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2A            S P E C I A L   A D V E R T I S I N G   R O U N D T A B L E            June 5, 2006


                                                                            FOR THEIR
                                                                                  OF THIS
June 5, 2006                                 S P E C I A L   A D V E R T I S I N G        R O U N D T A B L E                                       3A

                                                    ing. I have some of the best clients in the
               AWYERS ARE USED                      world. They’re smart. They care about
               TO FILING SUITS,                     the clients, but, for whatever reason,
               BUT NO LAWYER                        sometimes things go wrong. . . . I will
               WANTS TO BE                          tell you that I also do some other things
               SUED. HOWEVER,                       such as defend lawyers not only in tort
               LEGAL MALPRAC-                       but also discipline, and then I also tes-
               TICE SUITS ARE                       tify as an expert witness on matters that
               ON THE RISE,                         involve lawyer conduct. . . .
               ACCORDING TO                         WILLIAM D. COBB, JR., share-
               PANELISTS WHO                        holder, Cowles & Thompson, Dallas:
  PARTICIPATED IN A TEXAS                           . . . [S]ince sometime in the mid-80s,
  LAWYER BUSINESS DEPARTMENT                        late ’80s, I’ve been greatly occupied in
  ROUNDTABLE DISCUSSION IN                          defending lawyers and sometimes other
  DALLAS ON APRIL 20. BUT THERE                     professionals in the real estate and ac-
  ARE THINGS LAWYERS CAN DO                         counting and securities fields, but most
  – AND NOT DO – TO LOWER                           of the time it’s defending lawyers. I also
  THEIR RISK OF BEING SUED.                         do state bar disciplinary defense work
                                                    and a lot of counseling of law firms that
  MIKE ANDROVETT, event mod-                        perceive that they are at some risk of ei-
  erator, attorney, journalist and                  ther a grievance, a conflict problem or a
  owner of Androvett Legal Media,                   potential risk exposure for damages on        recent news reports. . . . [I]n Texas Law-
  Dallas: What I would like to do at                the front end to try to either minimize       yer . . . . the reporter was John Council,
  this point is to have . . . the members           or eliminate those risks.                     and his lead sentence reported that the
  of this blue-ribbon panel introduce               DOUG PERRIN, president, The                   year 2005 demonstrated that clients’ and
  themselves. . . .                                 Perrin Law Firm, Dallas: . . . My prac-       plaintiffs lawyers are more willing than
  MICHAEL PHILLIPS, founding part-                  tice is principally professional liability    ever to sue law firms, litigation largely un-
  ner, Phillips & Akers, P.C., Houston:             cases, which is both the legal malpractice    heard of 15 years ago. . . . So my first ques-
  . . . I represent primarily law firms that are    and medical malpractice cases.                tion to all of you . . . is what is happening
  involved in litigation, both insured and          COYT RANDAL JOHNSTON, man-                    out there? . . . Is this a dangerous time to be
  uninsured. . . .                                  aging partner, Johnston ◆ Tobey, P.C.,        practicing law?
  DANIEL SHEEHAN, shareholder,                      Dallas: I struggled for years to try to de-   PHILLIPS: . . . It’s bad and it’s going
  Sheehan & Associates, LLP, Dallas:                scribe what I did for a living. . . . But     to get worse. Sometimes when I give
  . . . I’ve been trying lawsuits for 32 years.     my son actually gave me a way to de-          speeches like this, I say, “Remember that
  And in the last several years, I’ve gotten        scribe our law firm’s practice. He said,      game that you used to play when you
  more and more into legal malpractice              “Dad, you sue the people who rob at pen       were a kid called tag? Well, we are it.”
  work. It’s not something I went looking           point.” So that’s the way I tell people       And the reason for that . . . has to do
  for. It just sort of found me. I tried a few      what I do now. That includes lawyers,         with the fact that we have been in many
  cases several years ago and . . . sort of one     stock brokers, money managers, business       ways demonized by the political process.
  thing led to another. . . .                       partners, people who steal money wear-        We are blamed for many of society’s ills.
  BRUCE A. CAMPBELL, managing                       ing a suit and tie. . . .                     We are blamed often for a great deal
  director, Campbell & LeBoeuf, P.C.,               ANDROVETT: . . . Panelists, I’d like          of economic loss to the economy, and,
  Addison: . . . I defend lawyers for a liv-        to start by just sharing with you . . .       therefore, we don’t have the allegiance
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                                                       and the respect in many instances that           of the total number of claims, it may not
                                                       we had when yours truly took the oath            actually being going up dramatically. In
                                                       on Sept. 29, 1969. Why is it that this it        fact, it may be flat or down. So what I
                                                       happening? I don’t know. . . . I would like      see is if we had a scientific measure of
                                                       to say . . . that there are three areas that     what we were looking at for data, we’d
                                                       I see that generate claims.                                    be in a much better position
                                                       One, conflict of inter-                                        to tell. Now, what I think
                                                                                         And a jury that hears
                                                       est problems; two, missed                                      we do see is . . . what I call
                                                       deadlines, either statutes         disciplinary first-time plaintiffs lawyers
                                                       of limitations or declara-                                     bringing these cases against
                                                                                            rule as opposed to
                                                       tions of expert witnesses;                                     lawyers, and they don’t have

     BRUCE A. CAMPBELL                    is man-
                                                       and three, just general
                                                       bad advice. . . .
                                                                                         lawyer rule or lawyer the experience . . . to really

                                                                                         ethics rule, it doesn’t
                                                                                                                      assess and sift through the
                                                       SHEEHAN: Yes, legal mal-                                       facts and figure out whether
     aging director of the law firm of Campbell
                                                       practice claims are on the sound quite as bad. . . . or not the claim’s any good
     & LeBoeuf, P. C., in Addison, TX. Campbell        rise. The practice of law                                      or not. And so we wind up
                                                       is greatly expanded over           It sounds like some- with more what I call dog
     has extensive experience in defending
                                                       what it was years ago. I                                       bite cases that are really
                                                                                         body ought to go out
     lawyers in tort and disciplinary actions.         think the practice of law                                      more difficult to unwind
                                                       is becoming more com-                and whip them sometimes because the qual-
     He is regularly consulted to testify on the       plex. It’s more specialized.                                   ity of the representation on
                                                                                                    with a stick.
                                                       There’s more opportunities                                     either side is not as good.
     standard of care and standard of conduct
                                                       for a lawyer to step out of       — Bruce A. Campbell ANDROVETT: . . . Here
     for lawyers. He has served as an expert           their area of specialty and                                    in Texas . . . law firms have
                                                       mishandle something than                                       been reporting over the last
     witness in tort and discipline cases includ-
                                                       there used to be. And the                                      two months or so that they
     ing claims asserted by the Commission on          cases, if they’re . . . on the rise because      have increased associate pay salaries. . . .
                                                       of medical-malpractice lawyers stepping          Does that make lawyers at large law firms
     Lawyer Discipline. Campbell is a member           into the area or the need for somebody           targets in the sense that, No. 1, just more
                                                       to generate some business, then they’re          dollars seem to be at risk? There seems to
     of the College of the State Bar of Texas and
                                                       in for a sad experience, because if you          be more pressure on law firms to . . . get
     is admitted to practice in all federal courts     don’t have a good claim against a lawyer,        productivity out of these associates and
                                                       you’re gonna have a very tough time of it.       does that change the landscape at all?
     in the State of Texas as well as the Fifth
                                                       You have a tough enough time when you            COBB: . . . One, I think generally yes,
     Circuit Court of Appeals. He is the former        do have a good claim. So I think they’re         but I think the shift that I’ve seen in the
                                                       on the rise, but it’s only because of the        last 10 to 12 years has been from the
     co-chair of the Dallas Bar Ethics Commit-         complexities and the size of the practice        general run of legal malpractice claims
                                                       of law. . . .                                    being asserted against small firms, solo
     tee and the former chairman of the Steer-
                                                       CAMPBELL: . . . The problem in Texas             practitioners, . . . to more and more
     ing Committee for the Professional Liability      is we . . . have a lot of anecdotal evi-         firms against . . . larger firms, more and
                                                       dence, and we have what I would say a            more willingness to bring the premier
     Underwriting Society. He is a member of
                                                       sense among the people that underwrite           marquee names as defendants. And I
     the Association of Professional Responsi-         lawyers that says the severity of claims         think . . . when we start talking about
                                                       and perhaps the frequency of severity of         the economics of lawyering, particularly
     bility Lawyers. Campbell can be reached at        claims is perhaps on the rise. But in terms      at firms that are in the press a lot on the
     972-277-8585 or
June 5, 2006                      S P E C I A L     A D V E R T I S I N G      R O U N D T A B L E                                          5A

   issue of compensation, not only to part-       they can point to is that associate sala-   think they are increasingly a target in
   ners but to associates, I think it creates     ries are high. How in the world could       this state. . . .
   great danger. . . .                            they not devote resources to watch cal-
   ANDROVETT: Doug, do you lick your              endars, to be sure that deadlines are       LARGE AND SMALL FIRMS SUED
   chops a little bit when you see these          met and things of that nature? This         ANDROVETT: . . . [I]s it a different case
   reports?                                       is especially true, and I don’t mean        against a large law firm than it is against
   PERRIN:. . . I don’t find it a pleasure        to . . . dwell only on large firms, but I   the individual lawyer who may have
   necessarily to sue another
   lawyer. . . . I think a lot of
   lawyers have the idea that
   because lawyers are demon-
   ized in the press . . . that all
   you have to do is sue them
   and there’s gonna be a bunch
   of money coming down the
   stream. That’s not at all the
   way these cases work. . . . But
   the other thing regarding the
   money, it’s not so much the
   firms paying these lawyers so
   much money. . . . It’s . . . the
   fact that when you’re out of
   law school, you don’t know a
   damned thing, and you’re be-
   ing paid all this money for . . .
   purposes that are not entirely
   clear, I think, to the public
   at large. So the bigger issue
   to me is . . . not necessarily
   these salaries going up, but
   the fact that there is so much
   money in the system that . . .
   human nature is, of course, to
   maybe take advantage of that.
   PHILLIPS: Oh, I agree with
   that. . . . The public percep-
   tion is important, because
   they are on the jury. And so
   when you’re in a case and
   you are defending on an is-
   sue of was enough done, was
   there a missed deadline, then
   I think these good plaintiffs
   lawyers one of the things
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                                                       missed a deadline or didn’t disclose a          say, “Oh, he’s just another defendant and
                                                       conflict?                                       I’m kind of on his side,” disappears in an
                                                       JOHNSTON: Oh, yeah, it’s different at           eye blink if there is any kind of billing ir-
                                                       all kinds of levels, and there are good         regularity. Lawyers’ bills are my favorite
                                                       and bad things that come with that. And         place to show the public that this guy or
                                                       the high associate salaries                                    this woman doesn’t deserve
                                                       clearly offers fodder for                                      your sympathy. . . . My ad-
                                                                                            Law firms . . . if
                                                       the jury. I mean, you may                                      vice is, look at your billing
                                                       have what, in the mal-                    you are in a practices carefully right now,
                                                       practice arena, could be a             position . . . to because some of the stuff
                                                       relatively small case of a                                     you’re charging clients for,
                                                                                               collect, please
     WILLIAM D. COBB, JR.                  heads
                                                       half-a-million dollar loss,
                                                       and you have an associ-
                                                                                                                      it just ain’t worth it. . . .
                                                                                             remember COBB: . . . I don’t mean to
                                                       ate making $200,000 that                                       castigate first-year associates
     Cowles & Thompson's Professional Liability                                         that the immediate
                                                       made the loss, and the jury                                    getting a lot of money. . . .
     Practice Group, and has defended lawyers          will probably hear about                    reaction to That’s the market. But . . .
                                                       that salary. . . . [L]et’s face   a collection suit is lawyer fees seem to be hav-
     and legal malpractice claims for almost
                                                       it, nobody, I would hope, is                                   ing the potential for shock-
                                                                                           a cross-claim for
     20 years. He has extensive experience in          gonna testify that these . . .                                 ing lay people. . . .[W]hen
                                                       women, men know any- professional you start looking at indi-
     the defense of professionals, particularly
                                                       thing about the practice of                                    vidual people writing down
     in the fields of law, insurance, real estate      law when they get out of                                       something that says . . . what
                                                       law school, and yet they’re — William D. Cobb, Jr. I do is worth $725 an hour,
     and securities brokerage. Cobb represents
                                                       making more money than                                         and then you have that per-
     professionals across Texas, in state and          any three of the jurors                                        son being deposed, I have
                                                       combined usually. And so                                       yet to hear somebody do a
     federal courts, and in administrative disci-
                                                       it’s gonna be a question of after you pay       very good job of explaining why they’re
     plinary proceedings. He also serves as an         them this huge amount of money and              worth that money when you start mea-
                                                       turn them loose on the clients whom             suring it in increments of six minutes.
     outside advisor to law firms on conflict of
                                                       you value so much, what are you doing           And so the billing is vitally important in
     interest and risk avoidance issues. Cobb          to make sure that they’re not committing        all . . . these cases.
                                                       malpractice? And, quite candidly, one of        PHILLIPS: But it’s pretty significant be-
     is a member of the American Board of Trial
                                                       my favorite fields to plow is, what are         cause about half the cases that I received
     Advocates. He has been selected as a Super        you doing to make sure that the client is       early in my career started out as collec-
                                                       not being excessively billed? . . . A lawyer    tion cases. Law firms . . . if you are in a
     Lawyer by Texas Monthly magazine every
                                                       as a defendant does not have a natural          position . . . to collect, please remember
     year since 2003, and in 2005 was selected         disadvantage in the courtroom. My per-          that the immediate reaction to a collec-
                                                       sonal view is that they set down with the       tion suit is a cross-claim for professional
     as one of the "Top 100 Super Lawyers" in the
                                                       natural advantage that every defendant          negligence.
     state of Texas. He is a frequent speaker on       has in today’s environment. They think,         ANDROVETT: . . . [D]o you buy Ran-
                                                       “Oh, gosh. The poor defendant got drug          dy’s premise that a lawyer defendant
     professional liability topics. In 2002, Texas     into a court on a frivolous lawsuit.” I         comes into court situated exactly like any
     Lawyer named him among the seven "Go-To"
                                                       mean, that’s been the press that has been       other defendant?
                                                       out there, and jurors believe it. But that      COBB: Well, to a degree. . . . [T]hat
     lawyers in Texas for defense of legal mal-        . . . willingness to look at the lawyer and     plaintiff ’s lawyer will always at some
     practice claims.
June 5, 2006                            S P E C I A L     A D V E R T I S I N G       R O U N D T A B L E                                7A

   point try to scare our client by saying,       policies are consent policies — the right   they’re usually much more objective. I
   “You’re a lawyer.” . . . [A] lot of them       to consent to settlement is with manage-    can show them the mistakes this law-
   throw that as . . . one of their negotiating   ment, not the individual lawyer who is      yer made, how it will look in front of a
   tactics. . . . [A] great task in defending a   sued. And so one of the first things I do   jury, not because he’s a lawyer but be-
   lawyer is to make a lawyer into a human        is start hammering on management and        cause he did something wrong and
   being and make he or she not be a lawyer       showing them how it is to their benefit     then management is the one that makes
   when they’re a defendant. . . .                to settle this case. And quite candidly,    the decision.
   PHILLIPS: Randy, when you
   are representing a plaintiff
   against a law firm, let’s say a
   large law firm, may I ask you
   to outline generally what you
   do in splitting the allegiance
                                           Your Move.
   within the firm between up-
   per management and the at-
                                                     Confronting Malpractice Risk.
   torney who handled the mat-
   JOHNSTON: Well, it’s amaz-
   ing how many of these cases
   involve a lawyer who commit-
   ted the malpractice who is no
   longer with the firm. There’s
   a high percent of those. And
   it’s not hard to split the al-
   legiance then because the
   lawyer who left really doesn’t
   much care about the old firm,              Cowles & Thompson
   and he just wants the matter
   settled, and so he becomes                 • Represents lawyers across Texas,
   my ally.                                     in state and federal courts, and in
   PHILLIPS: What if he’s still                 disciplinary proceedings
   there, though, same problem             •   Has more than 20 years experience in
   for the firm true?                          defending clients in legal malpractice
   JOHNSTON: . . . [T]hen the                  suits
   roles kind of reverse. Typi-            •   Has defended over 500 legal malprac-
   cally the lawyer’s on his high-             tice cases
   horse about how he or she               •   Advises law firms on conflict of inter-
   did absolutely nothing wrong                est issues and risk avoidance
   and is righteously indignant            •   Texas Lawyer named Jim Cowles and
   and . . . is going through the              Bill Cobb as “Go-To” lawyers for
   four stages of grief, and so far,           defense of legal malpractice claims
   he’s in that first stage, which
   is kill Randy Johnston. . . .                                                                         Attorneys & Counselors
   [O]n consent policies — and                                                                           Dallas • Addison • Tyler
   many lawyers claim lawyers’                                                                
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                                                          COMMON MISTAKES                                  result of that? . . . [T]he area of proxi-
                                                          ANDROVETT: . . . What are the kinds              mate cause and damages is the . . . main
                                                          of mistakes being made that are serious          battleground. . . .
                                                          enough that we should all pay atten-             PERRIN: The only thing I would add
                                                          tion?                                            to that is, that in my experience you
                                                          JOHNSTON: . . . Clients                                        can pretty well summarize
                                                          who come in to see us . . .                                    the kind of mistakes that
                                                                                                   The relationship
                                                          always think that the most                                     might get a lawyer sued in
                                                                                              between the lawyer
                                                          important fact to us, the                                      two categories: greed and la-
                                                                                          and the client as a
                                                          plaintiffs lawyers, is whether                                  ziness. . . .
                                                                                          fiduciary is the equiva-
                                                          or not the lawyer did some-                                    PHILLIPS: Texas is known
                                                                                                 lent of the Secret

     COYT RANDAL JOHNSTON                is the man-
                                                          thing wrong. And I will as-
                                                          sure you that is usually the
                                                                                              Service. The Secret
                                                                                          Service is supposed to
                                                                                                                         as a suit-within-a-suit state.
                                                                                                                         . . . That means that if there’s
     is managing partner in the Dallas law firm           least important fact. I can’t                                  an error made by the attor-
     aging partner of the Dallas office of Ford &
                                                          think of a case I’ve ever         take the bullet for the ney, that doesn’t necessarily
     of Johnston ◆ Tobey, P.C. For the past two
     Harrison, a national employment and labor law        taken where that was the president. . . . Fiduciary mean that it caused harm.
     decades, Randy Johnston has concen-                  most important fact. . . .             duty says you put And the unhappy plaintiff or
     firm with offices from New York to Los Angeles.                                           the client’s interest client must then show that
     trated his practice on suing people who              These cases always turn on
                                                          proximate cause, not on          above your own. but for that legal error dam-
     Maslanka pen with including simplify
     steal at workspoint, employers tolawyers,
                                                          standard of care. By the             You do not let your age was suffered. And so this
     their issues; to money managers and other
     stockbrokers,quickly understand their options;       time I take the case, I know         interests trump the is what Dan is talking about

     fiduciaries. While acting as a legal traf-           the lawyer has screwed up.               client’s interest. when he speaks of causation.
     and to effectively manage their workforces. He
                                                          I mean, that’s a given. And               — Coyt Randal Did the legal mistake actu-
     fic cop who pulls over the worst offenders
     is editor of the Texas Employment Law Letter,        we’re fighting over some-             “Randy” Johnston ally cause something? And
     for professional malfeasance, Randy re-              thing beyond that. . . .                                       you know how difficult that
     founded in 1990, and subscribed to monthly by        SHEEHAN: . . . The                                             is to prove, because you have
     alizes that not every mistake is malprac-
                                                          battleground is gonna be in the causa-           to establish through . . . expert testimony
     tice. He Texas to legal groups and USA,
     over 1800speaks employers. Chambers does
                                                          tion area. Exactly what was the result           that an event would have occurred had
     a monthly podcast for Texas Lawyer as
     a rating guide for lawyers, describes him on         of that particular mistake? And, right           it not been for that mistake. And that
     how lawyers can protect against malprac-             now, I guess we’re focused on mistakes           is virtually impossible to do in this state
     “intellectually fertile” and notes his “holistic”    and not focused on any kind of inten-            with highly skilled defense attorneys
     tice claims. His e-mail series, Best Prac-
                                                          tional wrongdoing. . . . [M]istakes run          erecting barriers all along. Well, how do
     approach to clients and their needs. Maslanka
     tices, deals with legal ethics and can be            the gamut. We’re human beings. We’re             you know this would have happened?
     has tried a from the law to verdict, includ-
     accessed number of casesfirm's Web site,
                                                          going to make them. The transactions             And pretty soon the defense attorney
                                                          lawyers make mistakes when they fail             are erecting barriers that . . . lead to the Johnston was
     ing four in 2005, ranging from employee raiding
                                                          to notice a change in the last draft that        conclusion that it would be speculative.
     one of the first attorneys in Texas to rep-
     to fraudulent inducement, and has tried 10 age
                                                          radically changes the transaction and            Plaintiff bar, quick like a fox, is asserting
     resent plaintiffs on a contingency basis in
                                                          it goes out differently than was agreed          all over America sort of an alternative
     discrimination cases to verdict. He is board         upon. Trial lawyers make mistakes when           theory that, yes, we might be unable to
     business litigation and other non-personal
                                                          they fail to designate experts or they fail      prove exact causation to a specific event,
     certified in labor and employment law by the
     injury cases. He is also founder of Blue             to admit critical evidence or gather criti-      but even this case has to have settlement
     Texas Crime, a blues band of He law-
     CollarBoard of Legal Specialization.fourcan be
                                                          cal evidence in the discovery stage that         value. You see, every case has settle-
                                                          was there to be had. Those are the kind          ment value ranging really large down to
     reached one guitar legend who or through
     yers andat needs four
                                                          of mistakes that are made. The question          something small. So when it comes time
     lawyers.                                             then becomes, well, what happened as a           for the plaintiff ’s attorney to offer his
     his newsletter site,
June 5, 2006                             S P E C I A L     A D V E R T I S I N G        R O U N D T A B L E                                       9A

   testimony from an expert witness, then           can be plenty to fight about within that       ject of the suit is malpractice. Any good
   he runs at you with this . . . lost settle-      case. Are you . . . requesting too much        plaintiffs lawyer should be able to come
   ment value. And that’s why I think that          by way of damages? Did they really cause       to a clear conclusion on that. And if they
   this is an emerging area.                        the problem to the extent you describe         can’t come to that conclusion, then they
   CAMPBELL: Maybe my practice is a                 it? That’s all fair game. But lawyers in       shouldn’t file the suit. I mean, plaintiffs
   little bit different from everybody else’s,      particular are in a position to . . . evalu-   lawyers in legal malpractice face some os-
   but I’m not about to give up the boat            ate whether the conduct that is the sub-       tracism from the bar. . . . I can’t tell you
   on standard of care in all situ-
   JOHNSTON: But you’re about
   to lose it.                                      From the very beginning, Randy Johnston
   CAMPBELL: Well, I may. I
   may, but I’m not gonna give
                                                       armed himself against the bad guys.
   it up. . . . [H]ere’s where I see
   it’s sometimes very well worth
   fighting, because what’ll hap-
                                           Growing up in West Texas, Randy
   pen is a lot of times a lawyer
   will have alternative A and al-         learned that some things are just
   ternative B for how to handle           wrong. Like stealing from those
   a particular matter. And alter-
                                           who trust you.
   native A looks like a reason-
   able way to do it. Alternative              Today, his law firm is one of
   B is not selected. Alternative
                                           the most active in Texas against
   A ultimately leads to a bad
   result. That lawyer is not re-          professional wrongdoing.
   sponsible. That doesn’t fall                If you need someone with
   below the standard of care.
   And I can tell you, I’ve seen           the courage and experience to
   an awful lot of cases over the          handle a malpractice lawsuit,
   course of the last five years
                                           call Johnston � Tobey.
   where we’re basically fighting
   over whether or not the lawyer              Because seeking justice is
   should have taken alternative
                                           not child’s play.
   A or B, and those cases are still
   out there. So to say that we’re
   just fighting over causation
   and damages, I think that’s
   SHEEHAN: Well, I bet Ran-
   dy doesn’t have any of those
   cases and I don’t, either. . . .
   I really think that the plain-                                                                             3308 Oak Grove Avenue
                                                                                                              Dallas, Texas 75204
                                                                                                              214/741-6260, 214/741-6248 fax
   tiffs' bar has a responsibility                                                                  
   to the profession to take cases
   that have merit. . . . [T]here                               SUING PEOPLE WHO STEAL AT PEN      P O I N T, I N C L U D I N G L A W Y E R S ,
                                                              STOCKBROKERS, MONEY MANAGERS AND OTHER FIDUCIARIES
10A                                S P E C I A L                 A D V E R T I S I N G       R O U N D T A B L E                                    June 5, 2006

                                                                 how many people we discourage from             we do with regard to “I’m representing
                                                                 filing a suit. They really want to file one.   the corporation” or “I’m representing a
                                                                 And you tell them, “Well, that’s too bad.      general partnership,” which means every
                                                                 You . . . don’t have a case.” And that hap-    partner, or “I’m representing a limited
                                                                 pens behind closed doors in our offices        partnership,” which has partners, but I
                                                                 all the time. And that’s the                                 take my directions from the
                                                                 way it should be handled.                                    general. They step in dog
                                                                                                   [Y]ou can pretty well
                                                                 The kind of case Bruce is                                    do-do all over the place be-
                                                 STEVEN PHELPS

                                                                 describing, whether it’s a                                   cause they don’t know who
                                                                 strategy call and the strat-     summarize the kind of the heck their client is.

                                                                 egy that was chosen just                                     COBB: We’re trying to cre-
                                                                                                    mistakes that ate the lawyer-for-the-deal
  DOUG PERRIN              has practiced law
                                                                 didn’t work out, those
                                                                 should never end up at the                                   capacity.
                                                                 courthouse.                                                  JOHNSTON: Well, there’s
  for over 28 years and is president of The                                                                   might get a
                                                                 COBB: . . . [E]verybody in                                   an ethical rule that kind
  Perrin Law Firm, P.C., emphasizing profes-                     this room already knows                                      of contemplates that, Rule
                                                                 that when you’re on the              lawyer sued in two 107. But if you don’t fit
  sional liability cases in Texas and New
                                                                 plaintiffs' side and you be-                                 within Rule 107, . . . which
  Mexico. He received his B.A. at Lubbock                        come more skilled, more           categories: greed and requires informed consent
                                                                 accomplished and more                                        and full and complete dis-
  Christian University and his J.D. at Texas
                                                                 famous, your cases get                                       closure, then you have a
  Tech University School of Law. Perrin is                       easier and easier and easier
                                                                                                       laziness. . . . problem.
                                                                 because you can self-select.                                 PHILLIPS: Ever seen a con-
  fortunate to have gained experience as a
                                                                 On our side as that matu-                 — Doug Perrin sent letter that you couldn’t
  young lawyer in Roswell, New Mexico in a                       ration happens and you                                       break, Randy? . . .
                                                                 become more known, your                                      JOHNSTON: . . . Bill knows
  wide variety of cases. He learned how to
                                                                 cases get worse and worse and worse. So        my view on this subject so well. And I
  be a lawyer from a group of great lawyers                      there’s a natural kind of a stress thing       happily warn you about it. If you have a
                                                                 that happens. And so it may be that            waiver of consent form where your client
  in the generation ahead of his - lawyers
                                                                 Dan and Randy don’t have any cases where       agreed and waived the consent — waived
  who were tough, smart, funny and honor-                        . . . the standard of care issue is very im-   the conflict — I promise you that will
                                                                 portant, but we do still have them from        be my plaintiff ’s exhibit No. 1. It’ll have
  able.   This background has provided in-
                                                                 some guys.                                     . . . as big a yellow sticker as I can put
  sight into the nuances of the reality of law                   JOHNSTON: . . . I am shocked at how            on it because that tells me and the jury
                                                                 many transactional lawyers do not know         you knew this was wrong. You knew it
  practice in most areas. Perrin has learned
                                                                 who their client is. I mean, when you go       was a violation of the rules and yet you
  that success in professional liability cas-                    through the four elements of a claim —         talked your client into doing it anyway.
                                                                 duty, breach of the duty, proximate cause      And I promise you that’s how they view
  es is not necessarily measured by money,
                                                                 and damages — duty is essentially just be-     it. So just because you have a waiver let-
  but more in the opportunity to make right                      cause we’re a privity state. It’s a question   ter, don’t think that’s some kind of a free
                                                                 of did the lawyer represent this person or     pass. It usually works against you.
  something gone terribly wrong for a per-                       not. And I have cases that turn on that
                                                                 question often, and it is amazing. Trans-      VULNERABLE PRACTICE AREAS
  son who trusted a professional. He and his
                                                                 actional lawyers are often not skilled at      ANDROVETT: . . . Are there other law-
  brother Mark Perrin are shareholders in                        thinking with the kind of precision that       yers in specific areas of practice who find

  The Perrin Law Firm, P.C.
June 5, 2006                               S P E C I A L    A D V E R T I S I N G        R O U N D T A B L E                               11A

   themselves more vulnerable to at least le-     PHILLIPS: Inadvertent disclosure of            against the IP lawyer [is] . . . very hard
   gal-malpractice claims . . . ?                 proprietary     information.      Somebody     to do, because, by definition, if it’s pat-
   JOHNSTON: Everybody hates their fam-           leaves Law Firm A, goes to work for Law        entable, it is a new idea. And if it is a
   ily lawyer. . . . I get more calls from them
                                                  Firm B that’s in litigation with Law Firm      new idea, then there is no track record.
   than any single group, and I take fewer
                                                  A on a matter . . . — that’s a fruitful area   And Texas is incredibly strict about what
   of those cases than any single group. I
                                                  for potential litigation, too. . . .           they will let you do to prove damages on
   think I may have taken one or two in
   my career.                                     JOHNSTON: . . . Proving damages                something that has never happened. And
   SHEEHAN: I would add intel-
   lectual property. . . . There is a
   lot of ways to make mistakes,
   and that is a very complicated
   area, patent law, trademark law.
   There’s deadlines. The types of
   mistakes that can be made are
   ANDROVETT: . . . What sorts
   of mistakes?
   CAMPBELL: You didn’t talk
   about the most important thing
   and that’s damages.
   SHEEHAN: In intellectual
   SHEEHAN: Well, they’re enor-
   mous. . . . They can be. And
   they’re hard to exactly calcu-
   late. But I mean, the types of
   mistakes are . . . you finally get
   a patent approval through the
   U.S. Patent [and Trademark]
   Office, and you have a period
   of a year or whatever it is to file
   that patent internationally. And
   it’s a global economy. It’s a very
   big patent. It involves a prod-
   uct that can be used around
   the world. Losing the ability to
   protect the rights of your prod-
   uct in every country except this
   one has enormous consequenc-
   es. Describing the claims in
   the patent in a way where the
   patent office refuses to patent
   the product.
12A                               S P E C I A L   A D V E R T I S I N G          R O U N D T A B L E                                       June 5, 2006

                                                  so the fact that your client says, “. . . I was    handled the matter. That’s where con-
                                                  gonna have a million dollars a month in-           flicts come in. I agree with Mike that
                                                  come from this electric fork,” don’t just          many times a lawyer with a conflict is
                                                  assume. . . . You may never be able to get         well-intentioned. A conflict does not
                                                  that testimony into evidence.                      necessarily mean that . . . this lawyer is
                                                                                                                    trying to take advantage of
                                                  CONFLICTS OF                                                      his own client in some man-
                                                                                             I don’t mean to
                                                  INTEREST                                                          ner. It can mean that. But
                                                  ANDROVETT: Mike, ear-                                             it can also mean that the
                                                                                          . . . dwell only on
                                                  ly on you had mentioned                                           lawyer doesn’t understand
                                                  when we’re talking about                                          that he’s put himself or her-
                                                                                            large firms, self . . . on thin ice fully in-
  MICHAEL PHILLIPS                    is the
                                                  legal malpractice, we’re re-
                                                  ally talking in many, many,
                                                                                                   but I think
                                                                                                                    tending to bring the best
  founding partner in the Houston law firm of
                                                  many cases about conflict                                         benefit possible to the client.
                                                  of interest. . . . The ques-                                      ANDROVETT: . . . [I]t
  Phillips & Akers, P.C. He has been a regu-      tion of what you disclose           they are increasingly strikes me that in almost any

  lar and constant fixture at the courthouses     to your client or . . . what                                      case and almost any repre-
                                                  you have not disclosed, are                    a target sentation, there is gonna be a
  throughout the state over the years, trying
                                                  they the two big ones?                                            magical moment where may-
  to verdict over 350 cases. He serves as         PHILLIPS: Yes. And an-                         in this state. be something was done that
                                                  other example that I                                              shouldn’t have been done
  Special Counsel for the State Bar of Texas
                                                  meant to mention that                  — Michael Phillips or something was not done,
  arbitrating malpractice claims. In the past     causes claims to arise is a                                       that there was a mistake
                                                  general practitioner ven-                                         made. What standard should
  26 years, he has lectured at more than 45
                                                  turing into an area in                                            lawyers be held to if these
  CLE seminars on bad faith, workers' com-        which she/he is not quali-                                        cases survive and wind up in
                                                  fied — i.e.: filing a bankruptcy. That’s a         a courtroom? . . .
  pensation, and legal malpractice. He was
                                                  pretty treacherous area nowadays, folks.            COBB: . . . [I]n a legal sense, the disci-
  a featured speaker at the annual Harris         Congress made some major changes                   plinary rules are not germane to the stan-
  County Civil Judges Conference in 2005 on
                                                  in the bankruptcy law. And so that’s a             dard. I mean, the common law says we’re
                                                  fruitful area. . . .                               just held to a standard of ordinary care and
  "Voir Dire Case Law and Practice Update."       SHEEHAN: Let me say this on conflicts              experts can help us define what that is. The
  He is the author of "Dodging the Malprac-       just really quickly because we have spent          practical side of that, though, is . . . if the
                                                  a lot of time on it. . . . [H]aving a conflict     rule helps the defendant, then it’s the
  tice and Grievance Bullet," "Defending
                                                  is not actionable, per se. A conflict has to       defendant’s expert. If the rule helps the
  Bad Faith and Penalties," "Problems and         attach to some other kind of problem in            plaintiff, it’s the plaintiff ’s expert.
                                                  order to be relevant. It is not a tort to           ANDROVETT: So you wind up talking
  Developments in Pattern Jury Charge II,"
                                                  have a conflict of interest. What it is, is        about the rule anyway?
  and co-author of "Administrative Penalties      it’s ammunition that the plaintiff ’s law-          COBB: We’ll tend to define the standard
                                                  yer is going to use to explain your lack of        of care with reference to the rules. And
  and Sanctions" — Chapter 44 of Matthew
                                                  loyalty to the client or the conduct that          so the rules become at some level kind
  Bender & Co., Inc.'s Texas Workers' Com-        the lawyer engaged in, and this is what            of a substantive standard, even though
                                                  motivated this lawyer to act in this way.          what we’re supposed to be talking about
  pensation Law, Volume II, "Tips on Direct
                                                  It’s because . . . this conflict was chang-        is ordinary care. And there are some
  and Cross Examination of a Claims Person        ing their thinking, influencing how they           things in the rules that are both helpful
  in a Bad Faith Case."
June 5, 2006                                S P E C I A L     A D V E R T I S I N G         R O U N D T A B L E                              13A

   and harmful. . . . [W]e’ve got a preamble         CAMPBELL: Mike, let me jump in for             ary rule. It sounds like somebody ought
   to the rules that says these don’t define         just a second on the disciplinary rules.       to go out and whip them with a stick.
   the standard of civil liability. That’s help-     Like Bill, . . . I’m trying to at least keep   So, you know, sometimes it’s a matter of
   ful when you’re arguing to the judge. It’s        them out in some way. . . . And a jury         degree about what we’re trying to do in a
   not particularly germane to a jury. But           that hears disciplinary rule as opposed        case to minimize the impact of the rules
   there’s also things in there that say, for        to lawyer rule or lawyer ethics rule, it       and really kind of take the sting out as
   instance, these are minimal standards.            doesn’t sound quite as bad as disciplin-       much as we can of whatever it is that the
   These are the bare minimum.
   This is what you have to do to
   keep your law license, which
   most plaintiffs can . . . argue                      LET US PUT OUR EXPERIENCE, EXPERTISE
   very convincingly that that                           AND RESOURCES TO WORK FOR YOU.
   is some lesser standard than
   what ordinary care would                                                                                    MICHAEL PHILLIPS
   require, particularly when
   you’ve got a lawyer of some
   experience, reputation, board
                                                                 ���������������  �
   certification, et cetera, so it                    ����������������������
   can go both ways. . . .                         ����������������������������
   PERRIN: . . . [T]hey’re held
   to the standard of the rea-
                                                        �����������������������   �
   sonably prudent lawyer. I                         ���������������������
   mean . . . that’s what the in-                           ����������������������
   struction says to the duty of
   ordinary care. That varies as
   it does in any tort case with                                                                                   • Former Member,
                                                                                                                 Harris County Grievance
   the nature of what’s being                                                                                       Committee 12-G
   undertaken and the nature                                                                                        • Served as a Special
   and identity of who’s under-                                                                                       Prosecutor for the
                                                                                                                      State Bar of Texas
   taking it. If you’re a special-
                                                                                                                 • Author, “Dodging the
   ist, you’re held to a differ-                                                                               Malpractice Bullet” Houston
                                                                                                                Bar Association Seminar
   ent standard than one who’s
   not a specialist. I think the                                                                                    • Over 250 jury trials

   disciplinary rules are impor-                                                                                     • Speaker at over
                                                                                                                     25 CLE seminars
   tant. . . . The other thing I
   would like to comment on
   with regard to the fiduciary
   duty that Dan was talking
   about is that I . . . do be-
   lieve that a conflict of inter-
   est is actionable as a breach
   of fiduciary duty, aside from
   anything else. And of course,                             3200 Southwest Frwy • Suite 3400 • Houston, TX 77027
                                                                    Phone: 713.552.9595 • Fax: 713.552.0231
   that gets you into issues of                                   
   fee forfeiture. . . .
14A                                   S P E C I A L   A D V E R T I S I N G        R O U N D T A B L E                                   June 5, 2006

                                                      plaintiff is trying to sell to the jury at       breach of fiduciary duty is a separate and
                                                      that point.                                      distinct body of law and conduct apart
                                                      JOHNSTON: . . . [I]t’s amazing because           from malpractice. And the court seems
                                                      they’re basically trying to call a set of        to say most lawyers who don’t know
                                                      rules by some name other than what the           the area of law, “Well, we’ll mix them
                                                      state bar calls it.                                             up together in the hope of
                                                      CAMPBELL : Well, you get                                        scaring the defendant into
                                                                                      [M]aintain completely
                                                      to use them maybe, but                                          bigger damages, getting
                                                                                      open and honest
                                                      maybe I get to keep them                                        punitive damages, getting
                                                                                        communication with
                                                      out if I’m really lucky and                                     fee forfeiture” — not real-
                                                                                            your client. And if
                                                      get the right judge.                                            izing that they often plead
                                                                                        you make a mistake,

  DANIEL SHEEHAN                    has been a
                                                      COBB: You know, we have
                                                      some rules that are really       as soon as you make
                                                                                                                      themselves out of insurance
                                                                                                                      coverage by doing so.
                                                                                       it, go tell them about COBB: Or avoiding limita-
  trial lawyer for 32 years specializing in busi-
                                                      CAMPBELL: Absolutely.               it. And if they need tions.
  ness litigation and legal malpractice cases.        COBB: And not just in            counsel at that point, JOHNSTON: Yeah, or to

  He has been Board Certified as a Civil Tri-         the disciplinary rules. The advise them that they avoid the limitations, be-
                                                      rules would be a misno-               need counsel. You cause the breach of fiducia-
  al Specialist since 1980 and has achieved
                                                      mer. But I defended an                       could really ry duty is a four-year stat-

  more than 20 multi-million dollar verdicts          entire case one time . . .         minimize or ute. Malpractice has only a
                                                      based on the lawyers' creed even prevent any kind two-year statute. And the
  and settlements. Sheehan graduated first in
                                                      and some aspirational goal                   of claim by court’s been real clear that
  his class from St. Mary's University in 1974        that said a lawyer’s word                     doing that. breaches of fiduciary duty
                                                      should be his bond. In our            — Daniel Sheehan are separate as it relates to
  where he was Editor-in-Chief of the law re-
                                                      case, our defendant had                                         all of those kinds of issues.
  view. Following a one-year clerkship with           not documented an agree-                                        But when we talk about the
                                                      ment in accordance with what the rules           standard of care, I think it’s important
  the Texas Supreme Court, Sheehan joined
                                                      of . . . procedure would require and so          to keep in mind that the standard of care
  the Dallas firm of Wynne & Jaffee (now Gar-         was at risk. And we defended the entire          involves a fiduciary relationship. The law
                                                      case based on we’ve got this pronounce-          is real clear that the relationship between
  dere Wynne). He later established his own
                                                      ment from the U.S. or Texas Supreme              lawyer and client is one of fiduciary. And
  firm, Daniel Sheehan & Associates, LLP,             Court that says lawyers are supposed to          if the case structures itself so that I can
  which currently has four lawyers. The firm's
                                                      behave this way. And we were able to suc-        get a fiduciary instruction to the jury,
                                                      cessfully defend somebody for not docu-          it is stronger than battery acid. . . . I
  practice is limited to complex litigation and       menting their agreement even to the cli-         mean, the lawyer who sits in front of the
  legal malpractice cases. Sheehan has been           ent’s detriment by saying you’re entitled        jury trying to measure up to that stan-
                                                      to rely upon the other side’s word. We           dard has a huge burden. . . . This isn’t
  named a "Texas Super Lawyer" by Law and
                                                      did have to convince somebody that the           just eyewash for a jury. I truly believe it.
  Politics Media in 2003, 2004 and 2005. He has       other side had indeed given word, but,           The relationship between the lawyer and
                                                      yeah, . . . you can find something going         the client as a fiduciary is the equivalent
  tried cases and handled appeals in state and
                                                      both ways.                                       of the Secret Service. The Secret Service
  federal courts, including the Texas Supreme         JOHNSTON: I want to address the fi-               is supposed to take the bullet for the
                                                      duciary duty issue as it relates to all of       president. . . . Fiduciary duty says you
  Court and United States Supreme Court. Dan
                                                      this and the standard of care briefly. . . .      put the client’s interest above your own.
  can be reached at or           No. 1, my personal view of it is that            You do not let your interests trump the
June 5, 2006                           S P E C I A L      A D V E R T I S I N G                   R O U N D T A B L E                                                      15A

   client’s interest. . . .                   the courtroom, in my view, in a couple                           generally. And so there is respect for the
                                              different ways. We all know that lawyers                         profession in a lot of ways. And I think
   THE JURY FACTOR                            are regarded right there with the . . . used                     I have to be careful. My experience has
   ANDROVETT: . . . Do jurors understand      car salesman. . . . But the same studies                         been that the more urban a jury that sees
   these cases? . . .                         always say that people are thrilled that
                                                                                                               more lawyer advertising, that sees more
   CAMPBELL: . . . [I]t really depends on     their children become lawyers. They like
                                                                                                               TV commercials, particularly lawyer
   the kind of case you’re really defending   their lawyer. They just don’t like lawyers
                                                                                                               advertising, may have a lesser opinion
   or dealing with. If you’re talk-
   ing about a conflict of inter-
   est, unfortunately, you know,
   the average person walking
   down the street . . . under-
   stands that no man can serve
   two masters. And when you
   start hearing that over and
   over . . . during the course
   of the case it’s very hard to
   diffuse that. And . . . what
   you’re doing all the way
   through the case is trying to
   take that away in one way or
   another. Those kinds of cas-
   es are tough. On the other
   hand, if you’re looking at a
   case where we’re really talk-
   ing about a technical error
   of some sort, a lot of times
   the defendant actually walks
   in with a benefit because
   you have your own expert                                                                                                                          Daniel Sheehan
   . . . telling you, “OK, the                                                       Board Certified, Civil Trial Law, by the Texas Board of Legal Specialization.
   analysis that I used to come
   up with this game lane was
   XY and Z. Here’s the case
   authority that I actually
   looked at to try to come up
                                               Meet The Man Who’s
   with, you know, the strategy                Not Afraid To Tackle                                                                 D AN I EL
                                               Legal Malpractice.
   here and it backfired. Sorry.
   It’s over.” So I think it really
                                                                                                                                   SH EEHAN
                                                                                                                                  & A S S O C I AT E S, L L P
   does depend on the kind of                                                                                                      C I V I L   T R I A L   L A W Y E R S

   case you’re looking at and
                                              Daniel Sheehan.
                                                                                                                                 2200 Ross Ave Suite 4300 West
   how you craft your defense                  A client should not be left to bear a loss directly caused by                            Dallas, TX 75201
                                               their lawyer. It is because of that philosophy and his
   as you’re going along.
                                               experience that attorneys refer malpractice cases to Dan
   COBB: Lawyer-image factors                  Sheehan. And Dan gets results - more than $25 million -
                                               in malpractice verdicts and settlements on behalf of clients.
   into the way you come into
16A                                  S P E C I A L   A D V E R T I S I N G        R O U N D T A B L E                                   June 5, 2006

                                                     of lawyers. That may hurt you in a dis-        dency to want to protect the profession.
                                                     honesty case. But in a technical error         The profession in general has a tendency
                                                     case, I have a sense that there is perhaps a   to want to circle the wagons and protect
                                                     lesser expectation of lawyers in that kind     itself. . . . One of the things that defense
                                                     of a situation among the general public.       has as an advantage in a legal-malprac-
                                                     . . . If you go to a different jurisdiction    tice case is normally you’re going to have
                                                     . . . where the lawyer image may be held       a judge who’s gonna require the plaintiff
                                                     higher, the problem is you’ve got a high-      to put a pretty strong case on. . . .
                                                     er standard of care, because in those ju-      PHILLIPS: . . . I heard last night at din-
                                                     risdictions . . . those jurors expect every    ner with these men talking correctly that
                                                     lawyer to be Atticus Finch and to work         sometimes they try their case and pre-

  MIKE ANDROVETT                 is in business
                                                     for chickens and to do all the things that
                                                     they think lawyers from storybooks need
                                                                                                    pare it for the court of appeals. . . .
                                                                                                    JOHNSTON: . . . Rightly or wrongly,
  to make sure that his lawyer clients get posi-     to do. And so the standard of care can al-     defense lawyers and insurance carriers
  tive news coverage and their law firms are         most be higher for the lawyer where they       have believed for a long time that they
  marketed effectively through advertising           have a good reputation than it is other-       have a disadvantage with the jury when
  and public relations. Androvett is the found-      wise.                                          a lawyer is being sued and that there is a
  er of Androvett Legal Media & Marketing,           PERRIN: That’s a good point. I prac-           significant probability that they will lose
  the largest public relations and advertising
                                                     tice . . . in New Mexico some, which           with the jury. And so they try these cases
                                                     is a different situation than what we          for the court of appeals. The first two
  firm in the Southwest exclusively devoted
                                                     deal with here. It’s more like a small         legal-malpractice verdicts I got, the trial
  to lawyers and the legal profession. Estab-
                                                     town. . . . [T]hey still think that lawyers    judge took them away. So there is still
  lished in 1995, Androvett Legal Media serves
                                                     ought to do the right thing. They expect       some hostility there at the trial bench
  the specialized needs of law firms in com-         them to. Lawyer advertising is not near-       level, not so much at the court of appeals
  munications with outside audiences, includ-        ly as prevalent out there. It’s not on the     where they get a little bit more sterile.
  ing news media coverage, brochures and             television. And I think it does make a         But for the plaintiff lawyer, if you cannot
  Web sites, and sophisticated advertising of        difference. In fact, one more thing I want     prepare and put your case on in a man-
  all kinds. Androvett's firm assists lawyers in     to speak to, I think that the lawyer ad-       ner where it will survive appellate scruti-
  virtually all areas of practice while observ-
                                                     vertising perhaps is the single thing that     ny, you’re not gonna make money doing
                                                     has hurt plaintiffs more than anything         this because these guys know how to try
  ing the highest ethical standards. Lawyers
                                                     else really when you get down to it and        the defense side of this case for the court
  and their clients who receive media training
                                                     that can splash over into these cases as       of appeals. . . .
  from Androvett Legal Media are much bet-
                                                     well. . . . It diminishes and demeans us,      PHILLIPS: . . . I was just going to move
  ter prepared to deal with reporters and TV
                                                     I think. . . . I wish it could be done in      on to a different topic. . . . damages. Rath-
  camera crews. And, as a former chairman            a better and a different way instead of        er than me talking, what damages some-
  of the State Bar of Texas Advertising Review       just, “If you hire me, I’m gonna get you a     one, what damages are normally recovered
  Committee, his expertise and experience is         bunch of money,” because that just makes       in a . . . legal negligence case, when is pu-
  essential to firms seeking to comply with          us nothing but a profession of merchants       nitive damage recoverable and when are
  the state rules governing lawyer advertising.      or worse just out for money. . . .             emotional damages recoverable, and what
                                                     ANDROVETT: Dan, in court, judges, do           is your attitude toward DTPA [Texas De-
  Androvett and his team take the mystery out
                                                     they like these cases? Do they not like        ceptive Trade Practices Act]? . . .
  of public relations and advertising by recog-
                                                     these cases? Are they neutral?                 JOHNSTON: Well, I have strong feeling
  nizing law firms' true goals and providing the
                                                     SHEEHAN: I wouldn’t call them neutral.         towards the DTPA. If you file a DTPA
  know-how to make them happen. Androvett
                                                     . . . [T]he judges have a tendency to want     claim, you are basically spoon-feeding
  can be reached at or              to protect the lawyer. They have a ten-        your opponent a counterclaim . . .
June 5, 20066                           S P E C I A L   A D V E R T I S I N G                                            R O U N D T A B L E                                                                                      17A

   PHILLIPS: You mean for attorneys’ fees?     SHEEHAN: Punitive damages, if you                                                                     some act of significant wrongdoing. And
   JOHNSTON: That’s right. . . . I was         have a breach of fiduciary duty, you’re                                                               if you . . . do that, then I think lawyers
   shocked at how . . . low the burden is      not gonna get them in a negligence case.                                                              are major targets for punitive damages.
   to prove your right to attorneys’ fees on   Gross negligence is . . . all but gone in                                                             PHILLIPS: Are . . . punitive damages
   the defense side of the DTPA claim, . . .   terms of it really requires intentional con-                                                          normally covered under the standard
   and they’re never covered, and your en-     duct. So to get punitive damages, you’re                                                              professional negligence policy?
   hanced damages aren’t covered, and you      really gonna have to rise to the level of                                                             CAMPBELL: That depends on how the
   don’t get anything for them in
   settlement. So the only rea-
   son I would ever file a DTPA
   would be if I have a true affir-
   mative misrepresentation in
   writing that I can document,                                         How will you make
                                                                     your Mark?
   it’s stronger than battery acid,
   and I have a defendant who
   has assets in excess of their
   policy where I have some
   chance of being able to collect                                                                                                   Full Ser
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   to say we leave open the
   question of allowing them in
   more egregious circumstances                  The ONLY Advertising and Public Relations firm in Texas
   than were presented in this                  working exclusively with Law Firms and Legal Professionals.
   case. . . .

   TYPES OF DAMAGES                                                         2501 Oak Lawn Avenue, Suite 650 Dallas, Texas 75219
   ANDROVETT: What about                                                        214.559.4630 800.559.4534 Fax 214.559.0852
   punitive damages? . . .
18A                             S P E C I A L     A D V E R T I S I N G        R O U N D T A B L E                                   June 5, 2006

  policy’s written.                               And so it’s one in which the jury is more      I am familiar would cover disgorgement
  COBB: It depends on the carrier, too. I         closely aligned from a knowledge stand-        claims because . . . that’s treated as a fine
  had some yes, some no. . . . although I’m       point with the facts of the case than one      or a penalty, and those are specifically
  relieved to know that our punitive expo-        might think. . . .                             excluded under most policies unless it’s a
  sure is less than I thought. That scares        JOHNSTON: Under DTPA, one of the               manuscript policy that you’re big enough
  me to death . . . because so many lawyer        measures of damages or claims is fee for-      to get the carrier to write.
  errors, once you prove the error, you’re        feiture, and we’ve talked about that. . . .
  halfway there. . . . I guess I haven’t seen     [F]irst off, my assumption is that breach-     TO INSURE OR NOT TO INSURE
  that many punitive awards. It’s just a fac-     es of fiduciary duty are still covered un-     ANDROVETT: These lawyers who find
  tor that you think about.                       der the policy. . . . If the recovery sought   themselves as defendants, are they typi-
  PHILLIPS: It is a factor. And I think . . .     is fee forfeiture, is that covered under the   cally covered by malpractice insurance?
  this is the difficulty for those of us on       policy, if that’s the remedy that . . . the    CAMPBELL: It’s all over the road map.
  the south side of the docket, as we say,        plaintiff is seeking?                          JOHNSTON: . . . [T]hese two defense
  as we advise clients, especially large cli-     COBB: My experience is most of the             lawyers both know that I kind of have
  ents, that there’s a claim for punitive         time, although the policy will often cover     the rule that if you don’t have insurance,
  damages that likely might not be cov-           the tort of the breach of fiduciary duty,      then I’m gonna sue you. . . . We all make
  ered by the E&O [errors and omissions]          it will specifically exclude fees as a dam-    mistakes. . . . [M]ost of the time, our mis-
  policy. Remember, for sure, a client who        age that they will pay. . . .                  takes don’t damage anyone, fortunately.
  sues a law firm over a fee, that’s not cov-     JOHNSTON: . . . It clearly excludes fee        They’re remedial or it was irrelevant. But
  ered by your E&O policy. The law firm           disputes, but I have always argued that        every once in awhile when we’re driving,
  defends that case on its own nickel.            this isn’t a fee dispute. This is simply the   we’re changing the CD and a kid runs
  But. . . it makes it difficult for my clients   measure of the damages that I am seek-         in front of us and we ought to have in-
  in mediation because you’ve got this pu-        ing. I don’t want my money back. I want        surance. And every once in awhile, the
  nitive damage claim hanging out there,          an amount of money awarded to me as            same thing happens to lawyers. And so
  and it’s like a meteor. Will it strike? Ev-     damages equal to the amount that I paid        if you don’t have insurance, that’s one of
  ery now and then. But when it does, it          the lawyer. And I’ve wondered for some         the reasons I will file the lawsuit, just as
  can sink a law firm. And so that’s why          time if that’s covered or not. And the car-    punishment because I think it’s incred-
  a lot of these cases settle. And I must         riers tell me it’s not, but then they end      ibly disrespectful.
  advise you. A lot of them do because            up settling if you have that kind of a case    ANDROVETT: . . . [D]o . . . your col-
  they’re very excellently worked up, clev-       because no one seems to want to find           leagues ever say to you, “Look, I under-
  erly plead claims that are presented by         the answer.                                    stand you want to improve the profes-
  highly talented [people]. . . . And then        PHILLIPS: That’s exactly right. That’s         sion . . . but, really, do you have to sue
  . . . one more point I’d like to make. One      what happens. . . . [R]eal good plaintiffs     lawyers?” . . .
  of the things about this litigation that is     lawyers, one of the first things they want     SHEEHAN: . . . [H]ere’s how I feel about
  somewhat dangerous is that if you have          to do is set up this dichotomy of one side     it. If . . . the lawyer, in fact, had caused
  a jury of 12, there’s a really good chance      against the other, dividing and conquer-       significant harm to the client, then the
  that six of those people have had contact       ing, divide management from the law-           lawyer should be responsible for that.
  with a lawyer in some type of context.          yer who rendered the legal aid. . . . In       And it always surprises me, frankly, at
  And they already are a little bit educated.     large firms, you see that. Try to divide       how vigorously certain cases are defend-
  This is not a brain-stem injury case. It’s      the carrier and the policyholder, creat-       ed when it’s absolutely clear that the law-
  not a highly technical complex engineer-        ing an argument there. . . . There’s gonna     yer caused this problem. And it’s almost
  ing matter or medicine or science. A lot        be a big fight, and so the case works its      an inverse relationship. The more abso-
  of it is fair play, and a lot of the people     way toward settlement. But in general,         lutely clear it is, the more vigorous the
  have already been involved, especially          my understanding is — to get back to           defense you’re gonna get. I don’t have a
  the judge. They know the standards.             the point — no E&O policy with which           problem walking into the Belo Mansion
June 5, 2006                               S P E C I A L    A D V E R T I S I N G         R O U N D T A B L E                                19A

   and having lunch and being known as a          lac/Volkswagen speech for a client now          would ask, “Can you go to the judge
   lawyer who sues lawyers because I think        because . . . by doing the Volkswagen de-       where the case is pending, explain to
   it’s hypocritical for lawyers who will sue     fense, you’re gonna get the Volkswagen          the judge and try to protect yourself
   anyone else if there’s a valid claim to say,   result. They’re never gonna say, “OK,           and protect the client by describing this
   'well, but you can’t . . . sue us'. . . . We   yeah, let me have that. I’m electing that.”     problem, or is that a foolish suggestion?
   have a responsibility to the people who        And even if they do, I mean, you’ve got         Can you go to mediation? Can you talk
   have suffered the loss, and that loss is       . . . your adequacy of disclosure waiver.       to the opposing counsel?” Something
   no different than a loss that’s caused by      It’s just impossible, I think, to satisfy the   has to happen other than you not get
   anyone else. If there’s a causal connec-       burden of having conveyed enough in-            paid, but spend six hours a day on a very
   tion to wrongdoing or a mistake, then          formation so that they can truly make an        complex case.
   the responsibility should be placed with       informed decision to not be well repre-         COBB: Well, I think the advice is easy, but
   the wrongdoer. And it’s . . . that sample.     sented, to just take a chance. So I just        doing it is hard. All the risk management
   It’s not any different than any other kind     advise against it. I just think it’s a bad      advice will say get out of the case. Lawyers
   of case.                                       idea. It’ll come back to bite you unfairly.     have a right to be paid. You don’t have an
   PERRIN: . . .[T]here’s a lot of people         ...                                             obligation to defend anybody . . . or repre-
   who are not gonna invite me to parties, I      AUDIENCE MEMBER: . . . [W]hen the
                                                                                                  sent anybody that’s not paying you. It’s a
   think. We all go through that. But really,     Cadillac runs out of gas and the client
                                                                                                  contract. . . .
   if you just want to be popular, then be-       gets behind, you know, it’s kind of a law-
                                                                                                  ANDROVETT: . . . [W]hat’s the best
   ing a lawyer may not be a great thing to       yer as creditor dilemma. At what point
                                                                                                  thing that a lawyer can do to stay out
   be, anyway. . . .                              does the lawyer say, “Look, this isn’t gon-
                                                                                                  of trouble?
   JOHNSTON: Well, you do pay a price             na work out. I need to withdraw.” . . .
                                                                                                  JOHNSTON: Oh, have a great legal as-
   for it. There’s no doubt about it. Dan         CAMPBELL: . . . You know, what you
                                                                                                  sistant that keeps track of the deadlines
   and I were talking the other day. Ev-          essentially have outlined is what I call
                                                                                                  you’re gonna forget. That’s easy. . . .
   ery time we sue a lawyer, we shrink the        the involuntary pro bono case. And, un-
                                                                                                  PERRIN: Worry less about the money
   world of potential referring lawyers at        fortunately, . . . making the choice about
                                                                                                  and more about the client. . . .
   least by one and sometimes by seven or         whether you’re going to get out or if you
                                                                                                  COBB: . . . Read your fee bills 30 days
   800. And those are the ones we like. So        can get out, that’s hard. But then trying
                                                                                                  after you write them the first time before
   there is a price to be paid for that. . . .    to figure out what you do to adequately
                                                                                                  you send them to somebody. I mean, they
   If you’re out to win a popularity contest      staff that case when your law firm is going
                                                                                                  are the problem. They are what we’re all
   and become president of the Dallas Bar,        up in flames because that case is eating
   then this is not where you ought to be         your lunch, those are tough problems.           about. . . .
   spending your spare time. . . .                And you know, what it comes down to, I          CAMPBELL: I would say practice in a

   AUDIENCE MEMBER: . . . I’ve got a              guess, a lot of times is 20/20 hindsight.       firm where you have a collegial environ-
   question for the panel. And it has to do       “Gee, I wish I hadn’t taken that case.”         ment where each of you are looking over
   with a gray area between fiduciary duty        But that doesn’t necessarily help you. So       the other's work. . . .
   and malpractice. One is what I call the        I think where you wind up is you can’t          SHEEHAN: I think you maintain com-
   lawyer who talks to their client, and they     shirk your duty. You’ve got to look at it       pletely open and honest communica-
   say, “Do you want the Cadillac defense         real hard when you can get out, if you          tion with your client. And if you make
   or do you want the Volkswagen ap-              can. And if you can’t, sorry. You’re a big      a mistake, as soon as you make it, go tell
   proach to the case?” And then something        boy. You get to go forward with it.             them about it. And if they need coun-
   goes wrong and the client who chose the        PHILLIPS: . . . There’s a whole body of         sel at that point, advise them that they
   Volkswagen approach decides they really        law centering around withdrawal. And            need counsel. You could really minimize
   wanted the Cadillac approach. . . .            central to that is a doctrine called con-       or even prevent any kind of claim by
   JOHNSTON: . . . I don’t understand             structive abandonment. It comes over            doing that.
   why any lawyer would ever do the Cadil-        from the medical negligence side. . . .I        PHILLIPS: Follow the golden rule. . . . v
   R O U N D TA B L E

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