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Lawsuits against law firms up

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Law firms have had to downsize greatly as a result of the recession, and as a result of the cutting of employees and speciality areas, some firms have found themselves facing a number of malpractice suits, according to Insurance Journal.

Michele Wade, the executive vice president of Lockton, told the source that fewer employees is a common cause of mismanagement of some clients' cases.

"It leads to possibly having the same number of clients and a lot less number of people to help them," she told the source. "It also leads to a lot of law firms hiring independent contractors rather than full-time lawyers … That often can lead to problems for law firms."

In addition to these general problems caused by mismanagement of cases, many firms are also heading to court for counter-suits by clients who they may have sued for nonpayment, the source suggests. These are becoming more common as the suffering economy makes it more difficult for attorneys and firms to let clients with unpaid fees go without issue.

The source says many firms have had to rely on errors and omissions insurance to help manage the legal costs that these types of cases carry. Professional liability coverage can be essential to attorneys, as their professions carry a high risk for legal disputes, particularly during an economic downturn .

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