Attorneys’ Legal Liability, 2014

654 Pages·2014·4.459 MB·English

by  Thomas P. McGarry

ATTORNEYS’ LEGAL LIABILITY (IICLE®, 2014)

IICLE® is grateful to the General Editor, Thomas P. McGarry, and the chapter authors for
their dedication to this project. We are able to publish current, accurate, and thorough
practice handbooks because of the generous donation of time and expertise of volunteer
authors like them.

Any tax information or written tax advice contained herein (including any forms or
attachments) is not intended to be and cannot be used by any taxpayer for the
purpose of avoiding tax penalties that may be imposed on the taxpayer. This
notice has been affixed pursuant to U.S. Treasury Regulations governing tax
practice.

We would be interested in your comments on this handbook. Please address any
comments to Director of Publishing, IICLE®, 3161 West White Oaks Drive, Suite 300,
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IICLE® Customer Representatives at 800-252-8062 for information regarding other
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HOW TO CITE THIS BOOK

This handbook may be cited as ATTORNEYS’ LEGAL LIABILITY (IICLE®, 2014).

Publication Date: September 22, 2014
ATTORNEYS’ LEGAL LIABILITY

2014

General Editor: Thomas P. McGarry

Chapter authors:
Mary F. Andreoni Ira N. Helfgot
Sherri M. Arrigo Matthew R. Henderson
William T. Barker Fritz K. Huszagh
James H. Bowhay Rex K. Linder
Thomas L. Browne Terrence P. McAvoy
Robert A. Chapman Thomas P. McGarry
Cortney S. Closey Maureen A. McGuire
George B. Collins Justin M. Penn
Kent J. Cummings Elliot R. Schiff
J. Timothy Eaton David M. Schultz
James R. Figliulo Thomas P. Sukowicz
William M. Freivogel J. Matthew Thompson
Peter J. Gillespie Michael J. Wagner
Theresa M. Gronkiewicz Jennifer W. Weller

®

This 2014 handbook revises and replaces the 2012 edition of this title.

ILLINOIS INSTITUTE FOR
CONTINUING LEGAL EDUCATION
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Springfield, IL 62704
www.iicle.com

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ATTORNEYS’ LEGAL LIABILITY

Copyright 2014 by IICLE®. All rights reserved.
Except in the course of the professional
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IICLE® encourages the adaptation and use of
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printed in its publications in the professional
practice of its customers.

IICLE® is a not-for-profit 501(c)(3) organization dedicated to supporting the professional development of
Illinois attorneys through Illinois-focused practice guidance.

IICLE®’s publications and programs are intended to provide current and accurate information about the
subject matter covered and are designed to help attorneys maintain their professional competence.
Publications are distributed and oral programs presented with the understanding that neither IICLE® nor the
authors render any legal, accounting, or other professional service. Attorneys using IICLE® publications or
orally conveyed information in dealing with a specific client’s or their own legal matters should also research
original and fully current sources of authority.

Printed in the United States of America.

1597ALL-N:9-14(654)TB
PRD: 9-22-14 (1:H)
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TABLE OF CONTENTS

Table of Contents

Preface ................................................................................................................................... v

About the Authors ............................................................................................................. vii

1. Introduction — The Lawyer as a Professional: How Our Professional
Responsibilities Shape Our Practice ............................................................................ 1 — 1
J. Timothy Eaton

2. Duties to the Client: Defining the Standards of Care ................................................. 2 — 1
Ira N. Helfgot
Maureen A. McGuire

3. Attorney Liability to Non-Clients ................................................................................. 3 — 1
Rex K. Linder
J. Matthew Thompson

4. Attorney Liability to Adversaries and Other Third Parties ...................................... 4 — 1
Terrence P. McAvoy
Justin M. Penn

5. Legal Malpractice .......................................................................................................... 5 — 1
Elliot R. Schiff

6. Litigating the Legal Malpractice Case ......................................................................... 6 — 1
Thomas P. McGarry
Robert A. Chapman

7. Breach of Fiduciary Duty .............................................................................................. 7 — 1
Matthew R. Henderson

8. Attorney-Client Privilege and Attorney-Work-Product Doctrine ............................ 8 — 1
Michael J. Wagner
Peter J. Gillespie

9. Client Trust Accounts .................................................................................................... 9 — 1
Mary F. Andreoni

10. Conflicts of Interest ...................................................................................................... 10 — 1
William M. Freivogel
William T. Barker

11. Duty to the Courts — Sanctions ................................................................................. 11 — 1
Sherri M. Arrigo
Cortney S. Closey

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ATTORNEYS’ LEGAL LIABILITY

12. Statutes Affecting Lawyer Liability .......................................................................... 12 — 1
David M. Schultz

13. Disciplinary Liability ................................................................................................... 13 — 1
Theresa M. Gronkiewicz
George B. Collins

14. Attorney Liability Insurance ...................................................................................... 14 — 1
Fritz K. Huszagh
Kent J. Cummings

15. The Limitation of Liability Through Business Forms .............................................. 15 — 1
Thomas P. McGarry
Jennifer W. Weller

16. Attorney Liability Risk Management ........................................................................ 16 — 1
Thomas L. Browne
Thomas P. Sukowicz

17. Lawyers in Transition: Liability Issues Relating to Lawyer Mobility .................... 17 — 1
James R. Figliulo
James H. Bowhay

Index ............................................................................................................................... a — 1

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PREFACE

Preface

This 2014 Edition of ATTORNEYS’ LEGAL LIABILITY celebrates the 12th anniversary of its first
publication and represents the enduring dedication and scholarship of the volunteer chapter authors. This
IICLE® handbook is designed as a comprehensive and yet practical reference for Illinois practitioners. Its
goal is to easily pilot the practitioner through the very complex and ever-changing terrain of the law
governing attorney legal liability and to catalog useful information necessary to reduce liability risk.

Illinois attorneys are busier than ever, thriving in an environment of increasing standards and
expanding accountability. While we have remained largely self-regulated through our Supreme Court, we
can no longer view ourselves in colloquial terms as we operate in an ever-expanding national and even
global environment. This broader scope brings not only greater professional opportunity but also increasing
regulation and liability. As we are all aware, lawyers today are subjected not only to malpractice and
traditional disciplinary rules and liabilities, but also to federal and state regulators in unprecedented ways.
To operate effectively in today’s complex legal environment, every practitioner needs to grasp the wide-
ranging duties and liabilities that attend our day-to-day practices.

This IICLE® handbook begins with the ever-important reminder of the lawyer’s role as a trustee for the
public good. This is a logical starting point for any discussion on the importance of our profession’s
responsibilities and liabilities. The handbook then moves through doctrines pertaining to attorneys’
standards of care and legal malpractice liability. Special attention is given to legal malpractice theory and
practice, and a separate chapter is dedicated to principles of litigating the legal malpractice case. Because a
lawyer’s fiduciary duties are so important in terms of responsibility and exposure, a separate chapter deals
strictly with the standards applying to fiduciary obligations and liabilities. The handbook then offers
practitioners a desk reference to understanding and applying the attorney-client privilege. Other discreet
areas of attorney responsibility are discussed separately. These include the handling of client trust accounts
and property, the understanding and resolving of conflicts of interest, lawyers’ liability for court sanctions,
the statutory liabilities facing our profession, and an invaluable lawyers’ reference to understanding
disciplinary liability and practice in the ARDC.

This handbook also treats the practical aspects of protecting Illinois practitioners from liability
exposure. Separate chapters include a guide to attorney liability insurance, a treatment of the business
forms under which we can practice to limit liability consistent with our obligations to clients and the public
trust, and a very significant primer for attorney liability risk management. Finally, the handbook provides a
chapter dealing with lawyers in transition, discussing legal liabilities of those moving from the public
sector to the private sector or from firm to firm.

This work allows an Illinois practitioner to have together all the subjects of lawyer liability, combined
with chapters designed to help in reducing those liabilities, in a single text. We believe this 2014 Edition
continues to be a substantial contribution to the body of Illinois lawyers’ professional liability law. It could
not have been done without the exhaustive efforts of each of the authors, very busy practitioners in their
own fields, who took time from their practices to put together this excellent work. I would like to express
my sincere thanks to each of them for the time they have taken to share their knowledge and expertise with
our readers and also for their critiques and support in completing this project. It has been a high honor and
privilege to work on this publication with members of the bar who are both my colleagues and mentors. We
truly hope that this handbook will be a most useful aid for Illinois practitioners.

Thomas P. McGarry
General Editor
September 2014
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ABOUT THE AUTHORS

About the Authors

General Editor

THOMAS P. McGARRY is a Partner in Hinshaw & Culbertson LLP’s Chicago office and chairs
the firm’s National Lawyers Professional Liability Practice Group. He focuses his practice
almost exclusively on the representation of lawyers and law firms in the areas of professional
liability, discipline, and risk management. Mr. McGarry is a veteran trial lawyer and a
certified mediator in the Cook County Court-Annexed Mediation Program. He was a judicial
law clerk to the Hon. James J. Mejda, Illinois Appellate Court, and served in the United
States Navy as a commissioned officer. Mr. McGarry is a frequent lecturer on issues of
attorney malpractice and ethics for various legal organizations and is a co-contributor to a
monthly ethics column in the Chicago Lawyer magazine. He has authored chapters on
attorney communications published in the DEFENSE COUNSEL PRACTICE
MANAGEMENT MANUAL (International Association of Defense Counsel) and the 2005
and 2012 editions of LEGAL MALPRACTICE: THE LAW OFFICE GUIDE TO
PURCHASING LEGAL MALPRACTICE INSURANCE (West). Mr. McGarry was also
Editor of ATTORNEY DISCIPLINARY PROCEEDINGS: ILLINOIS PRACTICE AND
PROCEDURE (Law Bulletin Publishing, 2002). He is an associate member of the American
Bar Association’s Standing Committee on Lawyers’ Professional Liability, the Chicago Bar
Association’s Attorney Malpractice and Prevention of Malpractice Committee, the
Association of Professional Responsibility Lawyers, and the Professional Liability
Underwriters Society. Mr. McGarry did his undergraduate work at Marquette University and
earned his J.D. from DePaul University College of Law.

Authors

MARY F. ANDREONI is ethics education counsel for the Illinois Attorney Registration &
Disciplinary Commission in Chicago. Upon her admission to the Illinois bar, she served a
judicial clerkship with the Hon. Mel R. Jiganti, First District Appellate Court of Illinois. Prior
to joining the ARDC, Ms. Andreoni practiced commercial litigation with Peterson & Ross in
Chicago. She supervises the ARDC Ethics Inquiry Program and is the Director of the Illinois
Professional Responsibility Institute, where she is also an instructor. Ms. Andreoni has
presented many speeches, lectures, and workshops to various law firms, bar associations, law
schools, corporations, and judicial and governmental groups and agencies on issues including
malpractice, client trust accounts, conflicts of interest, and professionalism. She has also
authored several articles, including CLIENT TRUST ACCOUNT HANDBOOK (ARDC)
and Ten Questions from Young Lawyers, CBA Rec. (Mar. 1998). Ms. Andreoni is the Chair
of the Chicago Bar Association Professional Responsibility Committee (2014 – 2015). She
received her J.D. and undergraduate degrees from Loyola University Chicago School of Law.

SHERRI M. ARRIGO is a Partner with Donohue Brown Mathewson & Smyth LLC in Chicago,
where she focuses her practice on defending claims of professional malpractice against
hospitals, physicians, and lawyers as well as on commercial litigation matters. Prior to initiating
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ATTORNEYS’ LEGAL LIABILITY

a legal career, Ms. Arrigo worked for several years as a registered nurse. She is a published
author and a frequent lecturer to various groups and organizations on topics related to
professional malpractice liability and medical malpractice insurance. She is a Fellow with the
American College of Trial Lawyers and has received five American Jurisprudence Awards for
academic excellence. Ms. Arrigo earned her B.S. summa cum laude from Northern Illinois
University and received her J.D. with highest honors from DePaul University College of Law,
where she was a member of the DePaul University Law Review and was admitted to the Order
of the Coif.

WILLIAM T. BARKER is a Partner with Dentons US LLP in Chicago, where he has a complex
litigation practice, concentrating in insurance law, and is a member of Dentons’ Ethics
Committee. He is the author of Extrajurisdictional Practice by Lawyers, 56 Bus.Law. 1501
(2001), and continues to write and speak frequently on that subject. Mr. Barker is a coauthor,
with Ronald D. Kent, of NEW APPLEMAN INSURANCE BAD FAITH LITIGATION (2d
ed.). He is also a member of the American Law Institute and was active in the debates over
the RESTATEMENT (THIRD) OF THE LAW GOVERNING LAWYERS concerning the
ethical obligations of insurance defense counsel. Mr. Barker was a member of the Editorial
Advisory Board of the ABA/BNA Lawyers’ Manual on Professional Conduct from 2004 –
2007. He is a member of the American Bar Association Center for Professional
Responsibility and of its Policy Implementation Committee, the Board of Directors of the
Association of Professional Responsibility Lawyers, the ethics committees of the Chicago
Bar Association, and the ABA Sections of Litigation and Tort, Trial & Insurance Practice
(Chair, 2014 – 2015). Mr. Barker was Chair of the IADC Ad Hoc Committee on Interstate
Practice, an invited participant in the ABA Working Symposium on Multijurisdictional
Practice, a member of the Advisory Council of the ABA Ethics 2000 Commission, and a
member of the IADC and TIPS task forces on multidisciplinary practice. He earned his B.A.
and M.S. from Michigan State University and his J.D. from the University of California.

JAMES H. BOWHAY is a Shareholder with Figliulo & Silverman, P.C., in Chicago, where he
focuses his practice on the representation of businesses and individuals in the areas of
professional malpractice, partnership and limited liability company disputes, class actions, and
general business litigation. He also devotes a substantial portion of his practice to counseling
law firms and other professional clients on organizational and dissolution issues. Admitted to
the bar in both Illinois and Wisconsin, Mr. Bowhay has also handled and tried cases in several
other jurisdictions, including New York, Florida, Michigan, and Indiana. He received his B.A.
from Grinnell College and his J.D. from the University of Illinois College of Law.

THOMAS L. BROWNE is a Partner with Hinshaw & Culbertson LLP in the firm’s Chicago
office, where he focuses his practice almost exclusively on the representation of lawyers,
having represented hundreds of lawyers and law firms on numerous issues involving civil
liability, professional responsibility, and risk management. He is in-house counsel for Hinshaw
& Culbertson LLP and is the Past Chair of the firm’s Professional Liability Group. Mr. Browne
is a frequent lecturer on the subject of lawyer liability and professional responsibility and has
written numerous articles on the law of lawyer liability and professional responsibility matters.
He earned his B.A. from Northwestern University and his J.D. with honors from The John
Marshall Law School.

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