Survey shows the risks of lateral hiring

June 26, 2013 A new survey shows that lateral hiring may carry significant business risk. The survey reports that five out of seven major malpractice insurers that responded to the survey said they experienced an increase in malpractice claims as a result of mergers and lateral hires by law firms. The seven insurers represent about 80 percent of the largest 250 US law firms.

The survey was conducted by insurance brokerage Ames & Gough, who pointed out that mergers and lateral hires can create conflicts of interest and the potential for malpractice claims.

“All five insurers experiencing claim increases cited new, lateral-hired attorneys—who continue to work on clients of their former firms while employed at their new firm—as creating potential claim issues,” the report concluded. “Two insurers also indicated that new attorneys were not trained or supervised properly, and one insurer also traced issues to law firms not resolving potential conflicts of interest.”

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