Dangers of dabbling

From an early stage in their careers, many lawyers have to decide what area of the law they wish to specialise in.

There are always exceptions to this, namely those who change specialisms during their careers, and sole practitioners and lawyers in smaller practices who do not have the luxury of being able to focus on one type of law.

Being a specialised practice or division is mostly a good thing as the lawyer knows his area inside and out.

However, problems can stem from the fact that there are still practices trying to advise on areas of law in which they have little or no experience and knowledge.

In the past, we have come across claims made against solicitors who were trying to do their client a favour.

These favours have backfired because the lawyers did not know all the intricacies of that particular area of law.

For example, a tax practice was asked by its client to undertake work on some properties he was trying to buy for development.

The client wanted to use this law firm as it had always worked successfully for him in the past.

However, the practice had little experience of property law.

As a result, the team was not up to speed on the latest planning and development laws and, more importantly, the firm missed some important planning details in the contract.

A professional indemnity claim was made against the firm and the client took all his business elsewhere.

Another example was a case where a partner believed that he could add value to his client by providing advice in relation to an area of law with which he was unfamiliar.

He thought he could save his client money, but in fact he ended up losing money for the client as the advice he gave was not complete.

He had missed a couple of important details, and this resulted in a claim of negligence being made against the practice.

It is important, from a risk management point of view, to ensure that any new cases being taken on fit into a practice's areas of knowledge and expertise.

It is far better to refuse work if you are not certain that you can do a proper job.

The alternative is to run the risk of a disaffected client, a claim of negligence against your professional indemnity insurance and the chance that all of that client's work will be taken away from your practice.

This column was prepared by the Alexander Forbes Professions risk management team