These loses are from stolen money, not legal malpracitce.  The numbers are huge:  in the millions.

The NYLJ reports: "Dishonest attorneys prompted the awarding of $7.1 million in 2006 from the Lawyers’ Fund for Client Protection, which warned yesterday that the fund is likely to start seeing claims from the largest case of lawyer theft in its 25-year history.

Last year, the fund paid out $1 million less than the $8.1 million awarded in 2005. The average awarded annually over the last five years has been just over $6.3 million. (The report is available at www.nylawfund.org.)

See the 2006 Annual Report and highlights from the report.

Officials say the fund’s finances are "very strong," but claims for reimbursement from clients defrauded by Andrew F. Capoccia and two attorneys working for him in his debt-reduction practice could total $5 million to $6 million alone, although the claims might be spread over more than one year, said Timothy J. O’Sullivan, executive director and counsel to the fund. Several hundred, and possibly thousands of clients, may seek help once federal authorities distribute restitution payments, he said in an interview yesterday.

"These catastrophic losses will challenge the New York Fund’s ability to be able to continue to serve as a model for effective law client protection in our nation," the fund’s 2006 report warned.

The precise amount that former clients of the Andrew F. Capoccia Law Centers of Albany and a successor firm, the Law Centers of Consumer Protection that moved to Bennington, Vt., will seek from the fund depends on how much in assets and restitution federal authorities can secure from Mr. Capoccia and two attorneys who worked for him, Howard Sinnott and Thomas Daly. Mr. O’Sullivan said federal authorities have seized about $4 million in assets so far in the case.

Mr. Capoccia is serving 15-2/3 years in prison for conspiracy, mail fraud, wire fraud and other charges for his role with the two firms, which federal authorities said diverted millions in client funds to accounts controlled by Mr. Capoccia’s wife. Carol Capoccia faces up to 10 years in prison and a fine of up to $250,000 when she is sentenced April 27 in connection with guilty pleas in January to obstructing a federal grand jury investigation. "

This Madison Record article contains a months work of issues: conflict of interest, change of venue, prejudice, blackmail, child ponography, indictments, plaintiff’s attorney joining the firm he has sued;  it just goes on and on.

"When Gary Peel joined the Lakin Law Firm in September 2003, he had spent the previous 17 months accusing the firm of malpractice.

Peel sued the firm in Madison County Circuit Court in April 2002, on behalf of William Coates.

Peel alleged that the firm failed to sue a Greene County farmer who may have caused the death of his client’s son, Michael Coates.

Peel dropped Coates as a client when he joined the Lakin firm. Chief Judge Edward Ferguson assigned the case to Circuit Judge Daniel Stack, who set it Nov. 1, 2005.

By then attitudes in Madison County had changed so fast that the Lakin firm tried to escape the community’s judgment.

Six days before trial the firm’s attorney, Jeffrey Mitchell of Geneva, moved for change of venue.

"Defendants cannot receive a fair trial in Madison County…," Mitchell wrote.

He argued that negative press about the firm’s principal, Tom Lakin, tainted the jury pool.

He wrote that on July 20, 2005, the St. Louis Post-Dispatch reported that West Virginia suspended Tom Lakin for a year.

He wrote that on July 22, 2005, the Belleville News-Democrat reported Tom Lakin’s discipline in West Virginia.

Stack denied the venue change and started the trial.

He stopped it when Bosslet and Mitchell told him they settled.

By then the author of the complaint had turned into another embarrassment for the Lakin firm.

Peel had filed a bankruptcy petition seeking relief from obligations to former wife Deborah J. Peel under a divorce agreement.

He had tried to cancel the agreement in St. Clair County divorce court, claiming she tricked him into signing a contract he did not understand.

In January 2006 he allegedly tried to blackmail her.

Grand jurors at U.S. District Court in East St. Louis indicted Peel in March 2006 on charges of bankruptcy fraud, possession of child pornography and obstruction of justice.

He left the Lakin firm.

This March, a federal jury in East St. Louis convicted him on all counts.

Back in Edwardsville, Peel’s old lawsuit still hasn’t gone away.

Bosslet and Mitchell never filed the settlement stipulation they told Stack they would file. The case remains open on Stack’s docket."

In New York there is case law which holds the attorney liabile for errors by a process server. Here is a similar case and analysis from Arizona

"Like most states, Arizona recognizes an exception to this rule, generally referred to as the "nondelegable duty exception." Id. "The policy reasons justifying such a departure are that the employer is the one who primarily benefits from the contractor’s work, the employer is free to select the contractor and may insist on one that is financially responsible and competent, and the employer has the ability to internalize the cost of insurance necessary to distribute the risk as a cost of doing business." Miller v. Westcor Ltd. Partnership, 171 Ariz. 387, 391, 831 P.2d 386, 390 (App.1991).

As the Arizona Supreme Court held in Ft. Lowell, the nondelegable duty exception arises in situations involving a "special relationship between persons," such as "persons who engage in relationships that are ‘protective by nature’ (e.g., the common carrier, innkeeper, employer) [who] are often held to possess an affirmative duty to guard the safety of their respective charges." Ft. Lowell, 101, 800 P.2d at 967. The Court explained:

The nondelegable duty exception is somewhat of a misnomer because it refers to duties for which the employer must retain responsibility, despite proper delegation to another. Such situations exist where the employer is under a higher duty to some class of persons. This duty may be imposed by statute, by contract, by franchise or charter, or by the common law. If the employer delegates performance of a special duty to an independent contractor and the latter is negligent, the employer will remain liable for any resulting injury to the protected class of persons, as if the negligence had been his own. The exception is premised on the principle that certain duties of an employer are of such importance that he may not escape liability merely by delegating performance to another.
The type of situation — i.e., negligence of a process server — was addressed in Kleeman v. Rheingold, 614 N.E.2d 712 (1993), where a client brought a legal malpractice action against a law firm based upon negligence of process server in failing to serve medical malpractice defendant within statute of limitations. The sole issue addressed by the Court was "whether an attorney may be held vicariously liable to his or her client for the negligence of a process server whom the attorney has hired on behalf of that client." Id. at 714. "

An Apology rather than a law suit.  This article reports that it works in medical malpractice.  Would it work in legal malpractice?

"Since encouraging its doctors to apologize for errors, the University of Michigan Health System’s annual attorney fees have dropped by two-thirds, and malpractice suits and notices of intents to sue have fallen by half, says a former …
"

Yesterday we reported on the Thomas Hyland letter in support of his firm’s position in the Wilson Elser Legal Malpractice case.  Today, a bar association rejoinder.  This second letter is not directed to the arguments that WEMED made, but to the entire concept of arguing the merits of a law suit in the letters to the Editor venue.:

"Letter to the Editor

Letter Is Disservice To Bench and Bar

New York Law Journal
April 11, 2007

I write with reference to the letter published on April 9, 2007, from Thomas W. Highland of Wilson Elser Moskowitz Edelman & Dicker. I am disturbed both by the fact of Mr. Highland’s letter and by its contents. The letter itself takes exception with no statement contained in an April 5 story to which the letter purports to respond. Indeed, that story reports the Wilson Elser firm’s disappointment with the court’s decision. But, Mr. Highland’s letter goes beyond that perfectly natural response. He offers a one sided, condensed version of the arguments he says he looks "forward to presenting . . . to a higher court," together with the citation of cases and rehashing of evidence. His letter seems more appropriate for an appellate brief rather than a letter to the editor.

I believe that such letters, especially from lawyers associated with a case pending in the courts, are inappropriate for a variety of reasons, not the least of which is the potential threat they pose to judicial independence. As a lawyer, Mr. Highland is presumably aware that his criticism of the judge cannot be answered by the judge herself because of ethical constraints upon a judge’s comments about pending cases. In that sense, the letter is patently unfair to the judge because it was composed with knowledge that the judge would not and could not respond in kind. I hope that Wilson Elser’s adversaries refrain from submitting some counter-letter for publication because such partisan sparring in the press detracts from the independence of the bench, the role of appellate courts, and the dignity of the organized bar.

I hope that no members of the judiciary will be deterred from "calling them like they see them" by the potential threat of litigants or their lawyers presenting their one sided views to the media about pending or impending litigation. I urge all members of the bar to refrain from writing or circulating such letters during the course of litigation in which they are so clearly partisans. Such letters as that April 9 letter are a far cry from the scholarly and thoughtful commentary by objective lawyers, for which the Law Journal is esteemed to publish. That sort of commentary is a service to both the bench and the bar. I submit that the April 9 letter is disservice to both.

Edwin David Robertson
The author is president of the New York County Lawyers’ Association. "

Geoffrey Tracktenberg reports this comma error which cost one side $1 Million in a legal malpractice case, which stemmed from a contract sentence.  The story itself came from the NY TImes.

"The dispute is over this sentence: "This agreement shall be effective from the date it is made and shall continue in force for a period of five (5) years from the date it is made, and thereafter for successive five (5) year terms, unless and until terminated by one year prior notice in writing by either party."
The regulator concluded that the second comma meant that the part of the sentence describing the one-year notice for cancellation applied to both the five-year term as well as its renewal. Therefore, the regulator found, the phone company could escape the contract after as little as one year."

The Wall Street Journal reports [subscription] that biglaw is a business, and is increasingly the target of legal malpractice suits.  The report is supplemented with a Hinshaw attorney quote.

"Big law firms are mostly in the business of keeping others out of trouble, not themselves. But some practitioners who defend law firms are seeing an uptrend in legal-malpractice claims. "The profession has become more like a business," says Philip Touitou of Hinshaw & Culbertson LLP in New York. "Now that firms have big revenues they’re now seen by the plaintiffs’ bar as viable targets."

Last week alone offered up two high-profile examples, each stemming from soured business deals consummated back around 2000.

On April 6, a Minnesota federal judge ordered that Dorsey & Whitney LLP disgorge about $887,000 in … "

Moving from Bankruptcy court to Federal District Court, the law firm again loses:

"Firm’s Bad Faith Leaves Bad Taste of $877,000 Malpractice Tab

New York Lawyer
April 10, 2007
Reprints & Permissions

By Leigh Jones
The National Law Journal

A Minnesota federal court has found Dorsey & Whitney liable for more than $877,000 for legal malpractice, breach of fiduciary duty and acting in bad faith for its role in a botched Indian casino deal.

Affirming a U.S. Bankruptcy Court decision issued last year, U.S. District Judge Donovan W. Frank ordered Dorsey & Whitney to turn over $887,440 in legal fees it received from former clients it represented in orchestrating a finance deal gone awry for the Akwesasne Mohawk casino in upstate New York.

In a 94-page decision, the judge determined that the 600-attorney firm breached its fiduciary duty of loyalty by representing two adverse clients at the same time and failed to inform its clients that it might have committed malpractice.

A spokesman for Dorsey & Whitney said the firm disagreed with Judge Frank’s decision, which it will appeal to the 8th Circuit Court of Appeals.

Edward Gale, a partner with Leonard, O’Brien, Spencer, Gale & Sayre, in Minneapolis, represented the plaintiffs. "