Tinder Box
"Lawyer Advertising and Malpractice Insurance"
Well, now there are two subjects that will generate some debate and discussion among members of the legal profession.
Interestingly, both topics have been investigated, reviewed and action taken by the State Bar’s Board of Governors during the past few years. In addition, State Bar members have had the opportunity to voice their opinions on these items through the two Membership Surveys that have been done since 1994.
First, let’s talk about professional liability insurance coverage for lawyers. You may not realize that there is only one state in the nation - Oregon - that requires all active practicing lawyers to have legal malpractice insurance coverage. It has worked effectively in that state for numerous years.
Within the past three years, our State Bar, through its Board of Governors, has done a thorough review of this issue. In conversations with the major insurance companies that are active in this market in West Virginia, it was their opinion that a mandatory professional liability insurance program would be somewhat difficult to administer and would be costly for all lawyers because of the need for increased premiums for the "good" lawyers without any insurance claims to make up for the risks in insuring the "bad" lawyers, who have had claims against them and settlements made.
On the other hand, if West Virginia wanted to set up its own program to be administered as a separate insurance company, like it is done in Oregon, the initial underwriting costs would be large. So, the Board decided that it was not practical or feasible to initiate a mandatory professional liability insurance coverage program for all active practicing lawyers in the state.
The other big topic is lawyer advertising. Again, the State Bar’s Board of Governors, through a special Lawyer Advertising Commission, has spent more than the past three years in looking at options in this regard.
As has been reported in this magazine as well as on the State Bar’s homepage, the report from the Lawyer Advertising Commission generated a great deal of discussion at several Board Meetings over the course of a year with some votes being decided by a majority of one - a rare occurrence at Board Meetings where votes are normally by a large consensus or unanimous.
At the Board of Governors Meeting in January of this year, the revised set of recommendations on lawyer advertising was tabled. It may be some period of time before the issue is considered again.
You may ask - how does the State Bar membership feel about these two significant issues? Well, all we need to do is look at the 1999 Membership Survey and compare it with the results of the 1994 Membership Survey. Here they are:
Do you have professional liability insurance?
| 1994 | 1999 | |
| Yes | 71% | 85% |
| No | 8% | 13% |
| Dk/Na | 21% | 2% |
A. If yes, what is the coverage limit?
| 1994 | 1999 | |
| Under $250,000 per claim | 6% | 3% |
| $250,000 to $500,000 per claim | 7% | 5% |
| $500,001 to $1,000,000 per claim | 34% | 35% |
| $1,000,001 to $2,000,000 per claim | 20% | 25% |
| $2,000,001 to $5,000,000 per claim | 13% | 12% |
| Over $5,000,000 per claim | 6% | 8% |
| Dk/Na | 14% | 13% |
B. If yes, have you increased your limit in the past three years?
| 1994 | 1999 | |
| Yes | 19% | 23% |
| No | 66% | 65% |
| Dk/Na | 15% | 12% |
C. If yes, have you decreased your limits in the past three years?
| 1994 | 1999 | |
| Yes | 2% | 2% |
| No | 73% | 76% |
| Dk/Na | 25% | 22% |
D. If yes, please indicate the amount of your deductible.
| 1994 | 1999 | |
| Under $1,000 | 5% | 7% |
| $1,000 to $2,500 | 18% | 20% |
| $2,501 to $5,000 | 25% | 23% |
| $5,001 to $10,000 | 13% | 13% |
| $10,001 to $20,000 | 3% | 4% |
| Over $20,000 | 9% | 8% |
| Dk/Na | 28% | 25% |
If you do not have professional liability insurance, what is your reason?
| 1994 | 1999 | |
| Self-insured | 4% | 8% |
| Insurance premiums are excessive | 10% | 14% |
| Have little exposure due to my practice | 10% | 62% |
| Dk/Na | 76% | 17% |
Are you in favor of lawyer advertising?
| 1994 | 1999 | |
| Yes | 37% | 38% |
| No | 56% | 57% |
| Dk/Na | 8% | 5% |
Which type of lawyer advertising do you use? (Mark up to three responses.)
| 1994 | 1999 | |
| Classified ads (newspaper) | 9% | 12% |
| Display ads (paper, billboard) | 10% | 9% |
| Radio | 7% | 9% |
| Television | 6% | 8% |
| Yellow Pages | 43% | 51% |
| Brochure or newsletter | 12% | 15% |
| Direct mail solicitation | 2% | 2% |
| Internet advertising | na | 13% |
| Do not advertise | na | 1% |
| Dk/Na | 61% | 36% |
Which types of lawyer advertising are MOST effective? (Mark up to three responses.)
| 1994 | 1999 | |
| Classified ads (newspaper) | 3% | 9% |
| Display ads (paper, billboard) | 5% | 12% |
| Radio | 4% | 11% |
| Television | 6% | 32% |
| Yellow Pages | 19% | 40% |
| Brochure or newsletter | 4% | 7% |
| Direct mail solicitation | 1% | 4% |
| Internet advertising | na | 6% |
| Dk/Na | 78% | 42% |
Which types of lawyer advertising are LEAST effective? (Mark up to three responses.)
| 1994 | 1999 | |
| Classified ads (newspaper) | 6% | 25% |
| Display ads (paper, billboard) | 5% | 12% |
| Radio | 4% | 15% |
| Television | 2% | 10% |
| Yellow Pages | 5% | 5% |
| Brochure or newsletter | 3% | 12% |
| Direct mail solicitation | 1% | 17% |
| Internet advertising | na | 13% |
| Dk/Na | 87% | 48% |
This may be getting monotonous, but I again urge you to take a look at the complete results of the 1999 State Bar Membership Survey - with comparisons to the 1994 Membership Survey results - on the State Bar’s homepage which is located at www.wvbar.org under the Announcement Section.