Freelance Lawyering Ethics Rule #8: Do freelance lawyers need to obtain their own malpractice insurance?
Take Away: There is no ethical rule requiring any attorney in California to carry malpractice insurance, whether the lawyer directly represents clients or works as a freelance lawyer for other law firms. The only ethical rule that exists states that attorneys who do not carry malpractice insurance must inform their clients in writing if the representation is expected to exceed 4 hours. When a freelance lawyer ghost-writes for a law firm or performs work behind the scenes, the freelance lawyer is working on behalf of the law firm – not on their own behalf. Even though freelance lawyers are not required by any rule to obtain malpractice insurance, freelance lawyers should review all malpractice rules and make their own decisions on whether to carry an independent professional liability insurance policy.
Independent malpractice insurance coverage confuses many freelance lawyers and law firms. Most often, freelance attorneys prevent malpractice issues by providing small firms and solo practitioners with high quality legal help, to ensure that their client matters are all being handled competently. Freelance attorneys can be a second set of eyes. Whether it is having a corporate lawyer assisting with a closing, or a litigator preparing a motion for summary judgment over a weekend, having a freelance lawyer help with a legal project can make sure a firm meets their own client’s needs and court deadlines, thereby preventing any malpractice issue.
Are CA lawyers required to obtain malpractice insurance?
No attorney in CA is required to have malpractice insurance, whether that lawyer is a law representing clients or a freelance lawyer. Attorneys practicing law in California are not required to carry malpractice insurance, but pursuant to Rule 1.4.2, attorneys who do not carry malpractice insurance must inform their clients in writing if the representation is expected to exceed 4 hours.
A law firm has the ultimate responsibility to their client, and most law firms who serve as counsel of record choose to carry malpractice insurance to protect against risks of a malpractice lawsuit.
Do law firm policies cover freelance lawyers?
Insurance policies are all different in terms of their coverage of associates, freelance lawyers and any other individual helping a law firm with a matter. Some insurance companies allow a law firm to add a specific freelance attorney to policies without additional premiums, while other insurance policies automatically cover freelance attorney work.
Pursuant to Rule 1.4.2, if a law firm carries malpractice insurance and hires a freelance attorney who does not carry malpractice insurance, the law firm does not necessarily have to notify their client. If the freelance attorney’s work does not constitute a “significant development,” and disclosure to the client is not required, then it follows that disclosure of the lack of malpractice insurance is also probably not required. See Ethics Rule #5 (Duty to Inform Clients). If a law firm knows their own malpractice policy does not cover its freelance lawyer, and their freelance lawyer’s work constitute a “significant development,” out of an abundance of caution, the law firm may choose to notify the client that the freelance lawyer does not carry their own policy.
Do freelance lawyers need to obtain their own policies?
Some freelance lawyers choose to carry their own malpractice policies out of an abundance of caution, but many do not. When a freelance lawyer is working for a CA barred lawyer, who is counsel of record, ethical rules are clear that the fees involved are not “attorney fees.” See Ethics Rule #7 (Fee-Splitting). Even people that aren’t lawyers in CA are permitted to work on cases, assuming they are working for a CA lawyer rather than for a client directly. See Ethics Rule #2 (Aiding and Abetting). If the work performed is not “attorney” work, but simply ghost-writing, just as a paralegal or law clerk wouldn’t obtain a malpractice policy, a freelance attorney may not need to carry a malpractice policy.
For example, imagine that a freelance lawyer, licensed solely in New York, prepares a motion for a California law firm. That freelance lawyer may have graduated from a top law school and previously practiced in AmLaw50, but they are not technically a lawyer in California. What are they? They are viewed as a high-level law clerk, a legal consultant, a paralegal, or simply a freelance lawyer ghost-writing for the law firm. California law is clear this is entirely permissible from an ethics standpoint. See Ethics Rule #2 (Aiding and Abetting). The hiring firm has a duty to review and approve the freelance lawyer’s motion, so the hiring firm is the one on the hook for any potential malpractice issues. This scenario may help law firms understand why ghost-writers – whether or not they are barred in CA – frequently choose not to carry malpractice coverage.
If a freelance lawyer is ghost-writing for a law firm, and is working on behalf of that law firm and not on their own behalf, many freelance lawyers are comfortable working under the law firm’s policy and choose not to obtain their own policy. Some freelance lawyers choose to carry their own policy out of an abundance of caution, and each freelance lawyer should weigh the costs and benefits of obtaining a malpractice policy. Kelley Milks, Executive Vice President of Acrisure, an Ahern professional liability brokerage, states:
Professional Liability policies for law firms state that the coverage provided is based on professional services performed on behalf of the Named Insured. If you do pursue an individual policy for yourself, be sure to disclose to them the scope of work you are doing and who is hiring you to perform this work. When seeking advice on insurance coverage utilize insurance carriers or brokers who specialize in law firm coverage.
Are CA law firms responsible for all work product performed by a freelance lawyer?
In all circumstances, a lawyer has a duty of competence to their client that they cannot discharge. See Ethics Rule #3 (Duty of Competence). Regardless of whether a freelance attorney carries malpractice insurance, the hiring firm is ultimately responsible for all work product, and must review a freelance attorney’s work product before submitting it to the client or to a court. See LACBA Opinion 518 (“…in performing services for the client, the attorney must remain ultimately responsible for any work product on behalf of the client and cannot delegate to Company any authority over legal strategy, questions of judgment, or the final content of any product delivered to the client or filed with the court.”)
It is not ethically permissible for a hiring firm to contract with a client to limit a law firm’s potential malpractice liability by attempting to place liability on the freelance attorney assisting with a project. See Rule 1.8.8 (“A lawyer shall not contract with a client prospectively limiting the lawyer’s liability to the client for the lawyer’s professional malpractice.”).
Practically Speaking
A hiring firm maintains and controls the client relationship. Even if a freelance lawyer has an independent malpractice policy, they do not have an independent engagement with the firm’s client to trigger coverage. The law firm hires the freelance attorney, and the firm assigns tasks to that freelance attorney. The freelance attorney researches, writes, drafts, prepares documents, or whatever else the firm has asked, and then submits the product to the firm. The firm is ethically required to review, revise, ratify, and/or adopt that work product as the firm deems appropriate before submitting it to the firm’s client, opposing counsel, or to a court. See Ethics Rule #3 (Duty of Competence). As discussed above, the firm is ultimately responsible for all work product that leaves the firm, and it cannot discharge that duty under any circumstances. In the unlikely event of a malpractice claim and the freelance attorney is added as a defendant, the freelance attorney’s carrier would undoubtedly tender coverage to the hiring firm’s carrier, who would be hard-pressed to deny coverage.
Despite these realities, there is no such thing as a risk-free endeavor. Every law firm and freelance attorney must make their own risk calculation based on their own individual circumstances and level of risk-aversion. Before hiring a freelance attorney, law firms should contact their carrier to understand their specific coverage to determine whether they need to take any additional steps to ensure they are properly covered.
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