The ALPS In Brief Podcast

Episode 10: Why is mandatory malpractice insurance gaining ground?

 

ALPS Executive Vice President, Chris Newbold, recently sat down with Doug Ende, the Chief Disciplinary Counsel at the Washington State Bar Association in the Bar's Seattle offices. Doug was able to shed some light on mandatory malpractice insurance from a disciplinary perspective and how coverage not only protects attorneys but ultimately is a protection for the public as they engage legal services.

ALPS In Brief, The ALPS Risk Management Podcast, is usually hosted by ALPS Risk Manager, Mark Bassingthwaighte. This episode is hosted by Chris Newbold, ALPS Executive Vice President.

Transcript:

CHRIS:

Hello, and welcome to ALPS in Brief. This is Chris Newbold, executive vice president of ALPS, and today I sit in downtown Seattle in the offices of the Washington State Bar Association with Doug Ende, who's the chief disciplinary counsel of the Washington State Bar Association.

And we're going to talk about an issue that is kind of growing I popularity, dare I say a trend, perhaps, in the legal world, which is bar associations and regulators thinking about their role with respect to protecting the public and whether they should require mandatory malpractice as a condition of licensure to be an attorney.

So Doug has been working on this issue, and so Doug, maybe you could start off by just introducing yourself and your role, how long you've been with the Washington State Bar and what you generally do both with respect to this issue and other responsibilities.

DOUG:

Sure. Thanks, Chris.

I am, as Chris mentioned, the chief disciplinary counsel at the Washington State Bar Association, so my typical portfolio of work is as director of the Office of Disciplinary Counsel, and that is the component of the bar that receives grievances or complaints against lawyers alleging ethical misconduct, investigates those complaints and prosecutes allegations of violations of the Rules of Professional Conduct. So that's my typical day-to-day work.

I should say that in my capacity as staff support or staff counsel to the Mandatory Malpractice Insurance Task Force, that's not because there's a disciplinary dimension to mandatory malpractice insurance, and it's not the intent and it won't be the outcome that it's a disciplinary initiative. It's a general regulatory initiative.

CHRIS:

Sure. And what do you think was the catalyst to get the discussion going in Washington? I mean, obviously there's lots of different kind of things going on in terms of some other states looking at this particular subject, but as it relates to Washington, why do you think now the discussion's happening here?

DOUG:

I would say that there are a number of reasons or catalysts that generated a discussion starting in 2016. One of those catalysts was the existence in Washington State of two other license types: limited practice officers and limited license legal technicians, or LLTs, both of which by rule are required as a matter of licensure to carry malpractice insurance, or otherwise in some cases, to establish proof of financial responsibility. And the gap or the dissonance between one license type being require to have insurance, professional liability insurance, and another license type, the lawyer license type, not having that requirement, began to be questioned.

Simultaneously, there were some members of the Washington State Bar Association that began to inquire of the Board of Governors, "Is this an issue that needs to be revisited in the state of Washington?" And as that exploration happened, the Board of Governors did authorize a work route to start to look into the issue. In 2016, Idaho, seemingly out of nowhere, came on board as requiring mandatory malpractice insurance, becoming, as you know, the second state in the United States to do so.

So I would say those three factors coalesced and became the impetus for further investigation.

CHRIS:

Yeah. And Washington's obviously what I would consider a large state from a lawyer population size. Talk to us about just kind of the numbers of lawyers that you have in Washington. To the extent that you know, how many are in private practice, to the extent that you know, to what extent there might be a problem in terms of lawyers being uninsured in the Washington legal market in terms of those providing service to clients? What do the numbers tell you?

DOUG:

So the membership of the bar in Washington is relatively large for a west coast state. Setting aside California, which is in another league, Washington I think has the largest population of lawyers in the western states. We have approximately 40,000 members, approximately 32,000 actively licensed lawyers. Unfortunately, I don't have at my fingertips the breakdown between private practitioners and other practitioners, but there are a great many private practitioners, lawyers, in Washington State.

And we do have the advantage in Washington State of having some information about private practitioners who are insured or not insured, because we do have an insurance disclosure rule. The insurance disclosure rule, which is in our Admission and Practice Rules, is based on the model ABA as a model insurance disclosure rule. And essentially what it requires is as part of annual licensing, lawyers inform the Bar Association whether they're in private practice, and if so, whether they are carrying professional liability insurance, malpractice insurance.

We've had that rule and we've been collecting that data for about 10 years now, so we have a reliable and fairly deep data source for that information. And at least in recent years, past three-plus years, what that data shows is that of lawyers in private practice, about 85% are reporting that they carry insurance and 15% are reporting that they do not.

CHRIS:

Okay. And what does your gut tell you about that fact? I mean, you obviously work for an organization that has a mission, a component of your mission that's protecting the public, right? And with 15% of your lawyers in private practice going uninsured, what do you think about that?

DOUG:

Yeah, absolutely. Part of the Bar Association's mission is both to serve its members and to serve the public, and certainly a key component of the regulatory mission is to protect the public and make sure legal services are being delivered in the public interest.

From a disciplinary perspective, we do from time to time see the tragic stories where lawyers have made a mistake, there's been an act of negligence, if you will, the client has been harmed, maybe lost their ability to protect a legal right or lost a remedy of some sort, and in the absence of malpractice insurance or other means of, say, satisfying a judgment or making the client whole, most of those individuals have no legal remedy. And from a regulatory and public protection standpoint, that seems like a failure of the mission.

CHRIS:

Yeah. One of the things I think is very interesting about the issue is there are very clear and stark excellent arguments on both sides of the ledger on this particular issue. If you look at Idaho, for instance, when they put this to a vote of their membership, 51/49, right? It was kind of right on the cusp. And obviously, it went in the favor of yes and went to the Supreme Court and got passed.

I wonder if you could just kind of briefly lay out for us kind of what you see as what's the argument for, what's the argument against? Because I do think that the arguments are kind of rock solid on both sides, and most people come at it with kind of a definitive sense of, "This is what I think."

DOUG:

Right. There are interesting and important arguments on both sides of the issue. And I should say preliminarily that when the Board of Governors, the Washington State Bar Association Board of Governors, authorized this and convened this task force, the issues on both sides were paramount in the minds of the board members. And they made it very clear in the charter of the task force, that job one, literally purpose number one, is to solicit and collect input from Washington State Bar Association members about the issue of mandatory malpractice insurance, so that is an element of what the task force is doing.

The arguments, on the one side, it is fundamentally a public protection argument, that in the absence of insurance, lawyers who are practicing and delivering legal services are putting clients, putting consumers, putting the public, at risk should a circumstance arise where someone is harmed and there isn't a realistic remedy to address that harm. There's also perhaps, I'm sure you're familiar with, a risk management component, that it's in the best interest of the members to have that protection. And we see that in other context. Not everyone necessarily likes or wants automobile insurance, and yet as a policy, our government has decided that that needs to happen for the protection of others and for the protection of ourselves. And I think some of the arguments here are similar.

CHRIS:

Yeah, particularly as a self-regulating profession, right? I mean, if we're not regulating ourselves, then we, I think, open ourselves up to other branches of government thinking that they need to regulate us. And so there is kind of some notion of if we're not leading ourselves in this protection movement, then we're probably leaving ourselves vulnerable to others kind of infringing in that space.

DOUG:

Absolutely, to the extent we are self-regulating. And of course, we're ultimately judicially regulated, as the Supreme Court has plenary authority to regulate the practice of law and delegate some of it to the Bar Association. I think it's obligatory on a somewhat self-regulated profession to not act only in its own interest, but also to act in the public interest.

On the other side of the equation, there are important arguments, multiple arguments, and we've seen some of them already come through to the task force, that there's a cost issue. It's going to add yet another cost of doing business to this regulated industry, and I think it's fair to say that no one likes the idea intrinsically of adding more cost to the cost of doing business. Related to that argument, there are those who argue because of the nature of their practice, the cost is prohibitive, because as you well know, not every practice area presents the same risk, and therefore, insures at the same cost.

Some arguments relate to where particular lawyers are in the continuum of practice. So for example, lawyers at the tail end of practice thinking about winding things down or in the midst of winding things down I think are concerned that given the level or magnitude of the practice, which is perhaps diminished, the cost of obtaining malpractice insurance would outweigh the value of continuing to maintain an active license. So they suggest that for retired or nearing retirement practitioners, this may drive them out of practice for new lawyers just coming in to the profession, perhaps carrying a substantial debt load from law school and perhaps even larger than just law school. Again, there's a cost concern.

And then finally, and I'm not necessarily naming every conceivable objection to mandatory malpractice insurance, but some point to an issue of uninsurability. I don't know of the extent to that's true. You probably know more about insurability versus uninsurability than I, but I think some members are concerned that if there are truly uninsurable risks that those individuals are going to be forced out of practice because they just can't obtain obligatory insurance.

CHRIS:

Sure, sure. So where are you at now in your process? Obviously the task force is being convened. As you think about the next 12 to 18 months, where do you see that process going, and then ultimately, what steps does the task force envision kind of taking in terms of recommendations and so forth?

DOUG:

We are still in the fairly early stages of our process. The board launched the task force by adopting its charter in September of 2017. The task force was convened and had its first meeting last month. We are in February of 2018. The task force is about to begin its second meeting. So we are really still at the headwaters, the information-gathering stage. So the Board of Governors through its charter asked for a report and recommendation from the task force in January of 2019. So they gave the task force about a year to do the work, determine what its recommendation would be, and prepare its report back to the Board of Governors.

So what we expect is at some point the task force will make a recommendation. I wouldn't be surprised if it evaluated more than one possible solution to the issue, malpractice versus other initiatives that might service the same or a similar public protection purpose. And we'll solicit and gather input from the WSBA membership when those recommendations start to solidify, and then based on all of that information, we'll report back to the board, we fully expect, in January 2019.

CHRIS:

Okay. Well, good.

Doug, any other kind of closing comments or remarks or kind of perspectives that you'd like to share with our audience?

DOUG:

Should any WSBA members find themselves interested in the issue, or even others find themselves interested in the issue, and care to share their perspective with the task force, with the Board of Governors, now would be a good time. There is a web page on the WSBA website devoted to the activities of the task force, so it's easily accessible and it's easy to provide feedback through electronic means, and we are be eager to hear from the membership, to hear from the public, to hear from others, about these ideas.

CHRIS:

Great. Well, thank you, Doug. I mean, this is an interesting subject, obviously one that we're kind of keeping a close eye on as the endorsed malpractice carrier for the Washington State Bar Association. And I think the carriers are obviously thinking about the affordability issue and whether even some insurance at a good or a basic level is better than no insurance, and particularly your solo practitioner community is a community that we're particularly sensitive to as we think ahead to the future of the market.

DOUG:

Sure.

CHRIS:

Well, good. I appreciate the time, Doug.

And if you have any other thoughts or questions about this subject, feel free to contact me, Chris Newbold at ALPS, cnewbold@alpsnet.com, and we thank you for listening.

DOUG:

Thanks, Chris.

Episode 9: The LLLT, Pioneering Efforts in Access to Justice

Recorded from the Washington State Bar Association offices in Seattle, ALPS Executive Vice President, Chris Newbold, sits down with WSBA Executive Director, Paula Littlewood to discuss Washington’s pioneering efforts in improving access to justice through the Limited Legal License Technician (LLLT) licensure. Today there are 80-90% of people with civil legal problems, particularly people in a lower income bracket, who don’t or are unable to receive help from a lawyer. Hear about where the program is today, its foundational principles and why it is being closely watched nationally as a forward-thinking solution by access to justice advocates as the first independent paraprofessional license in the legal profession in the United States.

ALPS In Brief, The ALPS Risk Management Podcast, is usually hosted by ALPS Risk Manager, Mark Bassingthwaighte. This episode is hosted by Chris Newbold, ALPS Executive Vice President.

 

Transcript:

CHRIS:

Okay. Welcome. Thanks for joining us for another episode of ALPS in Brief. My name is Chris Newbold. I am Executive Vice President of ALPS. Today I'm sitting in downtown Seattle in the offices of the Washington State Bar Association with a colleague and a friend, Paula Littlewood, who's the Executive Director of the Washington State Bar Association. I want to talk about a subject that is trending nationally, which is thinking about how we battle access to justice issues and one of the innovative programs that the Washington State Bar is involved with, which is the triple L.T. program, the Limited Legal License Technician. Before we start, Paula, if you could introduce yourself, your role, and what the Washington State Bar does.

PAULA:

I am Paula Littlewood, Executive Director of the Washington State Bar Association. I've been here about 15 years. The Washington State Bar is what's known as an integrative bar, so we are the regulatory agency operating under delegated authority from the Washington Supreme Court to regulate all licensed legal professionals in the State of Washington.  We are also the professional association supporting our members as they do their work and serve the public.

CHRIS:

Okay. One of the issues that we're really focusing on today is the issue of access to justice. We know that 80 to 90% of folks with civil legal problems in the United States, particularly those of low income, never receive help from a lawyer. I know that one of the things that you've been trying to do, as part of your job here in Washington, is to think about that challenge and to come up with solutions. One of the ways that you've done that is a program that, if you go out to the National Bar Association regional bar gatherings, it's hard not to hear about this particular subject that you all are at the forefront of. Talk about what the triple L.T. program is and why it's unique and why it's different when you think about the context of alternative legal services.

PAULA:

Probably the first thing I'd say is it's not a program. It's a license. What we are doing in Washington State is licensing the first independent paraprofessional in the legal profession in the United States. In many states you might be familiar with a nurse practitioner in the medical field. Nurse practitioners in many states, in our state, are licensed to work independently of the doctor to give medical advice up to a certain point. When they reach the edge of their license, and the scope of their responsibility that they're licensed to do, they refer the patient on to the doctor.  Triple L.T. is the exact same concept in the legal field. A triple L.T. is licensed. They have a limited license, hence the name limited license legal technician, to work independently. If they choose, open their own practice separate from a lawyer, to provide legal advice in certain practice areas.

The Supreme Court rule that creates this license is designed to be applied in various practice areas. The first practice area that the triple L.T.s are licensed in in Washington State is family law. One of the things that the Supreme Court's triple L.T. board is exploring now is what the next practice area will be. It's envisioned that some triple L.T.s may want to get licensed in multiple areas or there may be people that aren't interested in family law but, if a different practice area comes on line, they may choose to become a triple L.T. in that practice area.

I think it's important to distinguish the triple L.T. from other alternative service providers that we all are familiar with nationwide. We have document preparers. We have courthouse facilitators. We have the New York navigators who are all critical in helping service the public. The different with the triple L.T. is they are licensed to give legal advice just like Chris and I are as lawyers. We actually don't consider triple L.T.s non-lawyers because they have a license to practice law from the State Supreme Court just like I do. It's just that they have a limited license and can only provide services up to a certain amount, and then by court rule are required to refer the client on to a lawyer.

CHRIS:

Okay. What was the catalyst for the program? Who provided the thought leadership in coming up with the concept?

PAULA:

It's a two-track approach that it came in on. There was a Supreme Court board. The Washington Supreme Court had a board known as the Practice Law Board.  They were looking at unauthorized practice law and how can we deal with the unauthorized practice law? That was one track that brought us the triple L.T. They were trying to figure out how do you provide to the consumer qualified and regulated legal service providers? At the same time, our Washington Supreme Court had commissioned a civil legal needs study, which quantified the unmet need. Chris referenced this at the beginning of our talk, the unmet need in our country.

The civil legal needs study, we knew we had a lot of unmet needs, but it gave us an actual quantification that 80 to 85% of low and moderate-income folks were going without the representation that they needed in critical civil matters. Between those two things, the need to get more qualified and regulated providers into the marketplace, and the staggering unmet need, the Practice Law Board worked for about eight years and recommended to the Washington Supreme Court the creation of this limited license legal technician license. The court adopted the rule in 2012, and we were off to the races.

CHRIS:

Okay. When was the first class of those applying for licensure?

PAULA:

It was about two years later. When the court created the license, they also created the Limited License Legal Technician Board.  The Supreme Court needed a board that would figure out how the license would run. As the court's regulatory agency, we staff and fund that board. We work together because we're the regulator and they're the Supreme Court's board setting all the policy. It took two years. If you think about what the triple L.T. board was doing, they were creating a new profession out of whole cloth. When you hear the chair of the triple L.T. board talk about it, he'll say, "It wasn't like we could go to California or New York and pull their rule off the shelf and say okay let's modify it to fit in Washington." They had to define the scope of family law and what these folks would be allowed to do. We had to design a curriculum to train them. We had to design a bar exam. We were creating a whole profession.

It took about two years until we actually had candidates in the process being trained. We're about 2012 to 2018, we're about six years in. Right now we have 27 who are licensed. We have another 60 or so that are completing education and admission requirements. Then we probably have a couple hundred coming up through the community colleges. The education happens at two levels. There's what we call a core education at the community college level. Once they complete that, then they can move on to the practice area education, which is offered through the University of Washington Law School. We've had people say to us, "That's all you have?" We're saying, "Well, we started from ground zero." I think, once it starts picking up momentum, we'll ...

CHRIS:

Yeah. One of the things that we found very interesting about the class of folks that you are licensing is just that you require them to have malpractice insurance. ALPS, as the endorsed carrier of the Washington State Bar, actually found it to be a very appealing risk group because of the extensiveness of the educational requirements that you place upon these folks who aren't going to law school but, I would venture to say, are actually more qualified and trained coming out of their program than most folks coming out of law school. I wanted you to just comment on just the extensiveness of the training that your triple L.T.s have to engage in to earn this distinction.

PAULA:

One of the University of Washington law professors said the exact same thing. When we came to the end of developing the family law practice area curriculum, he said, "These folks are going to be better trained in family law than our JDs coming out."  I went to law school and never took family law. I could have started practicing family law the day I received my license. The family law training is 15 credits. Five credits are just basic family law, probably what a lot of us, if I had, would have taken them in school. The next 10 credits drill down very deeply into the actual scope. One of the most important things ... This is where I, as chief regulatory counsel and chief disciplinary counsel, was probably most involved was in this training aspect. We wanted to make sure these folks understood the scope of their authority. Most importantly, when they've come to the edge of it and gone beyond it.

Actually, when we first took the curriculum to the triple L.T. board, the triple L.T. board said, "Wait a minute. You're training them to do things they can't do." We said, "Yeah. We have to expose them to things that they can't do so they understand when they've crossed the line." Each class is twin taught by a law professor and a practitioner. When I think back to my own law school experience, if somebody would have been giving me the doctrine and, at the same time, saying, "Here's what it's going to look like on the ground." It would have been really helpful. Gonzaga is also helping teach the classes.

I would be remiss to not thank ALPS for stepping in. As Chris mentioned, we do require malpractice insurance for the triple L.Ts. We do not yet in Washington require that for lawyers. We had talked to a couple of insurance carriers. They said exactly what Chris said. "Huh. These guys are less risk, better trained, narrower scope." Whereas, lawyers can ...

CHRIS:

Go everywhere.

PAULA:

Go everywhere.  We thank ALPS hugely for stepping in and believing in the license and believing in the caliber of providers we're turning out.

CHRIS:

As you think about the future, what do you think is the outlook for the program and for the ...

PAULA:

For the license.

CHRIS:

For the license. I do think it's one of those that's very unique nationally. A lot of people are keeping their eyes on it. Talk about just what your outlook is for the license here in Washington, and what you see down the road in terms of the many speaking engagements you've done nationally in terms of thinking about where other states may go on this issue?

PAULA:

There's a number of states that are looking at it. Utah is probably the closest. Their rule is drafted. I think they're working on development of their exam. I think they're calling them limited license practitioner ... I can't remember. It's a little bit different name. Oregon has had two task forces recommend that they do it. We'll just wait and see when they get to putting rubber to the road. New Mexico is looking at it. California jumped in the water right behind us. They were moving pretty quickly, but I think they've got other issues they're dealing with right now. Minnesota was looking at it. Florida. I'm trying to think. Montana looked at it.

I'll tell you where I've been traveling a lot is Canada. We've probably been to four or five provinces now that are quite interested in a number of their provinces. I think in particular, states where there's a lot of rural population. We all know it's getting more and more difficult to recruit lawyers into the rural areas. I think there's a lot of states and some of these provinces that are seeing that the triple L.T. might be an option to serve rural areas. The nice thing for the triple L.T. is, since they go to a community college for the first part of their education, they get to stay in their community. Right?

CHRIS:

Mm-hmm (affirmative).

PAULA:

The practice area education that's offered by the law school is streamed, so you can actually be anywhere to take the law school classes. They're synchronous, so it's not like they're downloading podcasts at three in the morning. We've taught in the classes. It's very interactive. The students are there. They're chatting at you. I think a lot of states, and definitely these provinces, are looking at a possible solution for servicing rural populations.

CHRIS:

Mm-hmm (affirmative). Is there anything that's surprised you about the license as it's now moved from concept to regulatory infrastructure to an actual class of folks that you're regulating?

PAULA:

There are a couple of things. One was the collaborations that developed. One was our three law schools saying, "Don't don't have [inaudible 00:13:51] develop the curriculum. We'll do it together." That's was really fun. We worked with the three law schools in the state to develop the family law curriculum. Then the collaboration between the community colleges and the law schools. There were these collaborations that we never anticipated that were really fun. They really came together and said, "How are we going to make this the best license possible?" It created a culture of innovation in Washington.

As you know, the bar and a lot of people were very opposed to this right up until the bitter end. Once the Supreme Court spoke, once the Supreme Court passed the rule and said this is the direction we're going, we need to do this for the public, it really, in a lot of ways, created a culture of innovation. We had people coming to us saying, "Have you thought about the triple L.T. in this area or that area?" We had the Washington Association of Prosecuting Attorneys came and said, there's some parenting things where we think triple L.T.s might be helpful. The ALJs have approached us. That was exciting. Not to say we don't still have people that question the idea or are suspicious. County bars have started embracing them, the members of the county bars. The Washington State Bar two years ago, the Board of Governors voted to make triple L.T.s members of the bar. That's all been super exciting.

CHRIS:

Yeah. Yeah. I thought it was interesting. I mean, you and I, we were observers of legal trends. Our profession is not the fastest to adapt to emerging challenges that society thrusts upon us. I thought it was interesting going back to the Supreme Court order that started the license. Here's the quote. "We have a duty to ensure the public can access affordable legal and law-related services, and that they are not left to fall prey to the perils of the unregulated marketplace." It just seems like that's the type of ... Your Supreme Court, frankly, went out on a limb a little bit and said, "You know what? We think that there is something to be said for creating this opportunity." It's interesting to now watch, six years later, where you're at now and where you hope to go.

PAULA:

Yes. We tell everybody every place where we speak about it, "Come on in. The water is fine."

CHRIS:

Good. Thank you, Paula. I appreciate your time. Fascinating subject. As we think about access to justice and alternative legal services, it's clearly an issue that observers are going to be watching from around the country.

PAULA:

Great. Thank you.

CHRIS:

Thank you.

 

Episode 8: Cyber Coverage 2.0

There are two types of businesses - those that have been hacked and those that don't know they've been hacked. This may sound like hyperbole, but it's fairly accurate and many of those businesses are law firms. So you may ask yourself, how do I protect my law firm from a hack? Mark sits down with ALPS Director of Client Services, Matt Lubaroff, to discuss how ALPS has improved ALPS Cyber Response, our first-to-market cyber policy available exclusively to our legal malpractice insurance policyholders and designed to stay ahead of emerging cyber threats.

ALPS In Brief, The ALPS Risk Management Podcast, is hosted by ALPS Risk Manager, Mark Bassingthwaighte.

Transcript:

MARK:

Welcome to another episode of ALPS In Brief. I'm Mark Bassingthwaighte, the Risk Manager at ALPS, and we're recording here at the historic Florence Building in Missoula, Montana. I'm very pleased to have as our guest today Matt Lubaroff, the Director of Sales, Marketing, and Customer Service here, and today we're going to talk a little bit about cyber insurance.

Matt, in terms of over the years of my experiences consulting with lawyers, conducting risk visits and these kinds of things, it's somewhat common for lawyers to have this belief that we're not big enough in terms of our firm, in terms of size. We're not going to be on the radar of hackers and these kinds of things. I guess, would you agree or do they face a problem that they really need to be concerned about? Do you have some thoughts on that?

MATT: 

Yeah. Thanks, Mark. I would not agree. Maybe 10 or 15 years ago, it was probably the case because hacking was new. We didn't know what ransomware was. We didn't know what clicking on click links were and how that impacted us. But it's evolved into probably one of the most sophisticated industries out there, where some of the best technological minds unfortunately are using their skills for evil and not for good. So it really becomes a matter of when any business, but specifically law firms, will get hacked. Not a matter of if.

MARK: 

Yeah. I love ... there's a ... the FBI has put all kinds of information out there, but for law firms and businesses in general, and there's a great quote from one of the FBI guys. It's been maybe a year or so, but he basically said there's two types of corporations in the world. Those that have been hacked and those that don't know they've been hacked.

MATT: 

Yeah. It's accurate. We all click on things, and go, oh, I didn't mean to do that. But it's a little too late at that point.

MARK:

Well, and I absolutely agree with you, in terms of regardless of size, that law firms have a significant risk. Can we talk a little bit about solutions. What kind of solutions can we bring to the table and help with here?

MATT: 

Well, there's really two types of solutions that I suggest. One, of course, is insurance. Lawyers are trained in ways to manage their own risk. They go to law school not just to learn the substance of law and how to provide services to the community, but they also spend a lot of time in risk management techniques. They build practices that are successful. They build practices that help in our community, and the majority of lawyers out there are purchasing malpractice insurance in case a client sues them. But not enough lawyers and not enough law firms are buying cyber insurance.

One way to prevent something is to purchase a product that will protect you should something happen. Because accidents do happen. The other one that's probably just as important is training. Employee training. Some of that comes from understanding, is how to prevent a hack. What are systems, both technical and people-wise, that you can put in place to make sure that you are up to speed with techniques that will prevent that hack from happening in the first place.

MARK: 

Right. A lot of what I do ... I try to talk, whether it's again consulting or lecturing, I try to talk about the necessity of, if you will, securing the human. Now that certainly is frontline defense. But this other piece of the insurance is absolutely essential and necessary, because again, it just ... a naïve, innocent misstep, clicking on the wrong link, opening the wrong file or attachment or these kinds of things can lead to just devastating consequences.

Now for some time, ALPS has brought to the table, if you will, for our insureds, a basis cyber insurance policy, but we are just launching now a new product. Can you explain and share where we're going with this type of coverage?

MATT: 

Yeah, Mark. Happy to do so. We've tried to also adapt with the times. We've had the cyber policy available to our law firms for low per lawyer cost and lower limits for several years now. As our hackers have become more and more sophisticated ... we're all familiar with malware and ransomware that have become more and more popular, both on TV shows or in just the unfortunate press of everyday life. We've increased that coverage to provide more of that protection. Also expanded the liability coverage to handle really three different ways of providing the coverage.

MARK: 

Interesting.

MATT: 

There's one set of limits is available for that indemnity or kind of make yourself whole. So if you get hacked and there's a cost to you as a law firm, there's one aspect of the policy that provides that coverage. But there's two other towers or layers of coverage that we've included in the new policy that are just as important, if not more important.

One is that prevention. The response to the hack or to the privacy breach. We need to figure how it happened, where it is within your computer systems and how to prevent it from happening again.

MARK: 

This is dealing with some of the forensic teams that come in and the costs associated with that.

MATT: 

Yes.

MARK: 

Right, okay.

MATT: 

The third one is ... I think you were telling me in an earlier conversation that 47 of the 50 states have-

MARK: 

Breach notification.

MATT: 

... breach notification laws and requirements.

MARK: 

Right, right, right.

MATT: 

And so there's an available limit of liability should there be some notification requirements within that breach.

MARK: 

Yes, which can be very, very costly. A lot of people don't understand what did these regulations mean? For example, it's not in terms of the breach notification regulations that you're subject to. It's not where the breach occurred. It's where anybody impacted by the breach resides. When you think about law firms that have clients and all kinds of other people in their databases that cross these borders, this can get costly quickly. It sounds like we've got a wonderful product here at-

MATT: 

Yeah. The thing is, is these are very complicated situations.

MARK: 

Yes.

MATT: 

Let's just take the situation where a firm has ransomware. Ransomware is defined as your data is now encrypted, and the only way for you to get back your data realistically is to pay the ransom. If you think of how a typical cyber policy might respond is you have a payment of ransom. That's cyber extortion. You have the forensic investigation which is that breach response, that second tower, so to speak. Then there's the expense to restore the data from the backup that hopefully you have. That's data protection.

Then you've got a loss of business. There are hospitals, stories of businesses that have had to shut down completely because what they need they can't get to. So that's network business interruption. Then you have the response, to your point, to the regulatory inquiries. You need an expert to navigate through that. You don't want to do it poorly. You don't want to do it too quickly, but you have to make sure that you follow the letter of the regulatory laws.

And then you have these individual third party claims where it wasn't your data. It was somebody else's data that maybe you're in care or control of, and that third party, that other group, has been impacted by that data being stolen or lost, and there's susceptibility for claims there.

MARK: 

Okay, wow! You convinced me when I started to think through all of these different exposures and you think at times initially, oh, I get hacked and you just bring ... this is pretty complex stuff and spins out in all kinds of directions. I love it. You convinced me, and I hope many of the folks listening to us, of the value and need for a product like this. Can you share a little bit about okay, I'm an ALPS insured. How do I get this? What are my options? How do I go through this process?

MATT: 

Well, one of the things that we've aimed to do is make it as easy as possible for you. When you have your quote, when you're accepting your ALPS policy-

MARK: 

We're talking about the quote for the legal malpractice coverage.

MATT: 

Yes.

MARK:

Okay.

MATT: 

When you're being quoted or accepting your lawyer's malpractice insurance, you automatically have the ability, with no application, to accept our low limit, low cost charge per the attorney, right around $50. You don't need an application. Just accept it, sign, pay-

MARK: 

That makes it pretty easy. Yeah, wow!.

MATT: 

... done. We have some different limits-

MARK: 

Nice.

MATT: 

... based on the firm size, but there's no extra effort required. We also are very, very happy to offer limits up to a million dollars, which if you think of the susceptibility of data and how quickly things can happen and spiral out of control, the ability to secure your data and have response services available to you for up to a million dollars of limits is also important. There's no application required.

However, we do have some risk management suggestions that we can help you put in place to make sure that there's no ... we can continue to proceed, get you those limits, protect your law firm. They're a little bit more expensive. We have some minimum premiums and higher per attorney costs, but what I can say without any concern is that it's the easiest process, the lowest cost, and I'd argue, probably the best policy out there in the marketplace.

MARK: 

Yeah, yeah. And it's my understanding this policy's the first out there to be designed, written intentionally, or directed at law firms. Am I correct about that?

MATT: 

You are correct. We've partnered with Beazley, United States and Beazley London, who's probably the leader in this space as it is anyway.

MARK: 

Yeah. Absolutely. Yeah.

MATT: 

And they worked with us to provide a custom form, custom policy and custom process specifically for the ALPS lawyers book.

MARK: 

Yeah, yeah. Well, I appreciate your sharing all this, Matt. From my perspective as a risk guy, and just an individual living in this crazy world, this is a screaming deal, as I see it. Personally, I'm not trying to tell everybody to go out and buy these policies in the sense ... but how can you afford not to do this? When you look at the frequency of the attacks, the severity of these kinds of attacks, and it seems like you guys have really done a great job of putting a fantastic policy together that covers all these things. We've made it as easy possible. Just wow! Well done. Job well done. Do you have any final thoughts before we wrap this up, Matt? Anything else you'd like to share?

MATT: 

Yeah, I would just encourage folks to talk to their account manager if they're an insured, if they're in the process of applying with any type of insurance, specifically lawyer's insurance. Make sure they're asking about this. It's really a shame. It's unfair when businesses or law firms get hacked. It's scary because there's people out there smarter than us that are coming up with ways more devious than we could ever imagine to get access to that data, and we all deserve to have our data protected. We all deserve to have experts by our side who are helping us prevent it and walk alongside that path to recover, should a hack happen.

MARK: 

And a closing thought that I would have, just as, again, coming at it from the risk perspective, is we are charged with protecting the confidences of our clients. I just think even as a consumer ... you and I suspect, in terms of just statistically, are victims of the Equifax breach. I have some feelings about Equifax that are not the most positive things right now. I just encourage all of you listening out there to appreciate, too. If you ever are breached and don't have this type of insurance out there and can deal with this in a responsible way, how do you think your clients are going to respond? I just invite you to look at it from that perspective, too. It's another way to come back and say I just don't understand how you can afford not to do this. How you get to that point.

Well listen, Matt, as always it's been a pleasure. Thank you-

Episode 7: We Can All Use a Champion

In this episode of ALPS In Brief podcast, Mark connected with Ida Abbott, Former Practicing Attorney and Consultant on Optimizing Legal Talent,  to discuss why it is so important for lawyers to find and to be champions. Their discussion ranges from the need for more sponsorship of women in law firms to examining how solo attorneys can benefit from mentorship. Listen to the podcast and comment here on the blog, on our Facebook page or either of our Twitter feeds (@ALPSCorp or @NewLawyerPost) to be entered to win a signed copy of one of Ida’s books, Sponsoring Women: What Men Need to Know  or The Lawyer’s Guide to Mentoring, 2^nd Edition which was recently published by The National Association for Law Placement, Inc. (NALP).

Don’t want to wait to see if you win? Order Sponsoring Women: What Men Need to Know with this 20% off code from Attorney at Work: SAVE20

ALPS In Brief, The ALPS Risk Management Podcast, is hosted by ALPS Risk Manager, Mark Bassingthwaighte.

Transcript

MARK:

Hello, I'm Mark Bassingthwaighte. I'm the Risk Manager with ALPS and welcome to another episode of ALPS In Brief. I am sitting in the corporate office here in the beautiful Florence Building in downtown Missoula, Montana. And I am so pleased to have as my guest this morning Ida Abbott. Ida is from the Oakland area in California and has done some interesting work in mentoring and sponsoring, and has done some writing on the topic.

But before we talk about some of the issues that have been so important and that you've been working on, Ida, can you take just a brief moment and tell our listeners a little bit about yourself, your background?

IDA:

Sure, and thank you. It's really nice to be talking with you, Mark. I am a lawyer. I practiced ... I was a litigator at a large firm for about 20 years. And left there and started a consulting business that's been about the same amount of time. I've been doing work in the area of legal talent management, lawyer's professional development and career development. I specialize in mentoring and sponsorship and also now I'm doing a lot of work helping lawyers transition into retirement and helping firms develop ways to ease that transition.

MARK:

Interesting. And very, very important stuff. One of the things I've been fascinated by, and I'll be honest and say in my 20 years in terms of working in risk management with lawyers here, I've really not come across this whole notion of sponsorship. Can you tell our listeners a little bit about what this is all about the work you're doing here?

IDA:

Sure. And the reason you haven't heard about it is because it's a relatively new concept. In fact, let's start with what mentorship is and then we can distinguish them. A mentor is ... First of all mentoring today is much more collaborative where both parties are involved and learn from each other and help each other. But traditionally a mentor was somebody who was older and wiser and more experienced, took you under his wing, helped teach you the ropes, understand what the profession was about, how to be a lawyer, what it meant, what it meant to be a professional, made introductions and basically helped you in any number of ways in the course of your career.

That was sort of the old fashioned concept of mentor. What happened, really in the '50s and '60s, last century, was people started to study organizations and realized that there was a role for this within an organization. So they started promoting mentoring and started mentoring programs. And in the law mentoring programs became popular in the '90s and as we moved into the 2000s. And because a program necessarily is bringing people together in a way that's not the same. If you and I were working together informally, as a supervisor you might give me the kind of work and the kind of feedback and support that would help me learn and develop.

But when we're matched in a program then necessarily there are some expectations within the program. The relationship ... We may know each other to begin with or we may never have met before. And so you've got a much narrower range of activities that are expected and it kind of diluted the concept of mentoring into something that was more programmatic.

And what actually happened was because people were being matched and anybody could be matched as a mentor. As long as I had a little more knowledge and experience than you, I could be your mentor. But what it meant was that the kind of mentoring that actually helps you move ahead, that gets you a promotion or a raise, or an appointment to an important committee, or an introduction to somebody, to a critical client, that kind of mentoring was usually not within the scope of a program.

So people had to rely on it to happen informally. And as organizations got bigger and mentoring was seen in a narrower way, people started to wonder what was happening. And when they studied this, and it was only about five or six years ago that the first research was done on this, they found that what was happening was that men were being sponsored. They gave it a new term, this idea of helping somebody advance in their career as opposed to develop professional skills and understanding.

That kind of mentoring was not happening for women. And so they called that aspect of it, the advancement piece, or the advocacy piece, they called that sponsorship. And that's why when talking about it as something different I see it as the high end of the continuum. But a lot of people might talk about it as something separate.

MARK:

It's interesting. What I hear and what I like about this is, again, the old school model if you will on mentoring is helping even ... I think of the rural attorney just trying to hang up a shingle out of law school. And you find somebody else to help educate, get you started, teach you the basics. But what you're really talking about here is, in terms of a different way to phrase this, having someone groom you for professional success.

IDA:

That's right.

MARK:

Is that really where you're going with this? Is that ... Am I getting the idea of sponsorship?

IDA:

Yes and no, because even when we've developing, even if you're a brand new lawyer, I want to groom you for success. But the kind of needs that you have have to do more with basically learning what it means to be great lawyer, and how do you run an office, or how do you run a practice. But what I'm talking about happens later in your career. It can happen early. Let me just say we can all use a champion. We can all use an advocate at any point in our career. And a sponsor is that.

But when we talk about it the way we do in terms of professional development, it becomes more important once you've already established the basics. You have the platform. You have the skills. Now what you need is to move up. To move forward whether it's within an organization you want to be the president. Within a firm you want to be the biggest rainmaker or the person who runs the place. Or you just want to get more money and more clients and be better.

But where there are fewer slots or fewer resources available and more competition for them as you move ahead and you become more senior, that's when you really start ... This becomes more important. But there's no question we could use it from the time you're a kid you know.

MARK:

Absolutely. I understand. I see the value of this in terms of to the attorney that's being sponsored. I get that. What would the value be for a firm to look at this more formal, pivoting into this type of a model.

IDA:

Well, the issue is really one about fairness and diversity. The reason this has become so central is because when you look at the profession at the entry level you have equal numbers of men and women, or close to it. You have fairly good numbers at the entry level of diverse lawyers, people of color and people with other characteristics that place them in an underrepresented group.

But as you move toward leadership, partnership, seniority you have fewer and fewer people who are diverse. And what you have are a lot of straight white men running the world. For firms that are concerned about why they're losing women and minorities, then you have to take a look at whether sponsorship is happening in a fair way. What the research shows is that women, for example, get plenty of mentors. And most women today, most lawyers coming into the profession are fairly savvy. They've been told since they were kids the importance of mentoring. So they know to look for mentors and I think people are more conscientious about being mentors.

What they're not getting though, what they find is that women can get mentors, but they don't get sponsored because most of the people ... One of the critical characteristics of a sponsor is it's got to be somebody with some power. It's got to be somebody with power, influence, some sort of clout that can help you actually make a move forward or up.

Most of those people are men, and most men sponsor other men. And they don't sponsor women for a whole host of reasons. Sometimes it's just they overlook women. Sometimes it's deliberate. They want to avoid women. Today we're having a lot of issues about men being afraid to be too close to a woman.

MARK:

Absolutely. I get that. It seems to me too there's an element here that ... You started talking, some of the work you're doing is [inaudible 00:11:12] planning and these kinds of things. It seems to be long term viability of a firm ... A firm would also benefit to have diversity of thought, and diversity of client base that women and diverse races and what not. In terms of these kinds of programs I just think it's going to add to the bottom line and the success of a firm overall. Do you think there's anything to that?

IDA:

Absolutely. And there's loads of research on this. That's one of reasons why people are concerned about diversity. I think a lot of firms have a superficial interest in it. They need to meet numbers. They need to satisfy ... But I think the major reason for that is you need diversity in a whole host of ways to keep the thinking vibrant in an organization.

If your firm is only composed of people who were successful 20 years ago and that's where they learned how to be great lawyers ... When you take a look at the profession today, somebody who doesn't have current skills or look at the world in a different way and bring new thinking to the table, a firm is going to stagnate.

MARK:

When you look at national data in terms of the number of lawyers and the size of the firms they practice in and these kinds of things, a significant percentage of lawyers practice in the solo and small firm arena. In my years, and I've been at this for 20 years and doing a lot of consulting myself all over the country ... It's been fun and interesting to come across a number of all female firms as an example, and smaller firms. It is a different just feel. And I love to go into these kinds of settings at times.

But thinking about that we have a significant number of women in the solo, small firm space. Do you see ... Can these women avail themselves of the kinds of opportunities? How does sponsorship play into this space? Can it? Does it?

IDA:

Well, it does. In a slightly different way though. When we talk about this it tends to be within the context of an organization where people are trying to move up within an organization. In a small firm obviously you don't have a lot of the same dynamics. The larger the firm the more isolated individuals are and the more they need this sort of thing.

But still you can't really be successful on your own in any organization. Even when it's a solo, you still depend on other people. You depend on people sending you business. You depend on getting your name out there. That goes back to building a strong network, and within that network you need people who will be your champions. Who will send you referrals. Who will nominate you for positions in the bar association or some professional organization or business organization that you want to be prominent in.

I know how many lawyers still just graduate law school and hang out a shingle and don't realize how important it is to be connected professionally to other people. I think the general mentor model is more important because you need somebody who's also going to help you understand what it means to be a professional, and a valued and trusted advisor. The sorts of things that you may not learn in law school.

So the traditional model of mentoring I think is more important, but once you're out there and you really, you want to go for it. You want to be the most successful lawyer in town in your field. You need to have people working with you to help you.

One of the things that we encourage everyone to do is to have a constellation of mentors. People call it things like a personal board of advisors because one mentor isn't enough anyway. Some mentors are really great at some things but not at others. And so as you go through your career there may be many different ways that someone can be helpful to you.

Keep in mind this is a very, very much a reciprocal practice. And when I talk about mentoring I emphasize the collaborative and reciprocal nature. This is not a gimme, gimme, gimme. This is a practice and the people who have really good mentors tend to also be generous with their time. And they mentor and support other people. That's a big part of this.

But the advocacy role that a sponsor plays, it is important but it happens, again, later in your career. And when you're starting to think about positions within the community or within an organization of some sort. I think that's when it's more important.

MARK:

Yes, excellent, excellent point. I really like this one in terms of multiple mentors. I think so many people sort of go out and try to find one and we call it good. And that's not, no.

Ida, this has just been wonderful. I love the work that you're doing and I love hearing your thoughts. If any of our listeners were interested in finding out a little bit more, how can they find out more? Do you have email? Do you want to share book materials out? I'm happy to give you a moment. How can they contact you?

IDA:

Well, I have a website, idaabbot.com. My email address is idaabbott@AOL.com. So all that's pretty easy. There's a lot of material on my website that they can download and my newsletters and articles. I've written several books. The two that might interest your listeners in terms of our topic, one is called Sponsoring Women, What Men Need to Know. And the other one is coming out next week, actually. It's a totally updated version of my first book. It's The Lawyer's Guide to Mentoring, and this is the second edition.

Both of them ... Well, the publisher of the mentoring book is NALP. And that, as I say, will be available in another week or two. But that will be on the NALP website and in their bookstore, and also on my website at some point right after that. And the sponsorship book is published by attorneyatwork.com. There's a link to that on my website as well.

MARK:

I think I'm going to need to take a look more in depth at these. I'm looking forward to reading this. I really want to take a look at this one just coming out. Sounds exciting.

To my listeners, I hope you found something of value today. It is certainly a pleasure. And, Ida, thank you. Thank you so much. If any of you listening have topics of interest that you'd like to hear us talk about in future, please don't hesitate to reach out at me here at ALPS. My email address is mbass@alpsnet.com.

That's it. Thanks for listening.

IDA:

And thanks for having me.

MARK:

You're welcome. Thank you, Ida.

 

Episode 6: Pursue the 'Why' Intentionally

Last week the ALPS team gathered for a discussion about the company's vision this year and beyond. Afterwards Mark sat down with ALPS CEO, David Bell, to continue the conversation about vision and why it's imperative for every business, from a large corporation like GE to a solo law firm, to truly understand why they are doing what they are doing in order to give clarity to their vision and in turn, spark intentional action. 

ALPS In Brief, The ALPS Risk Management Podcast, is hosted by ALPS Risk Manager, Mark Bassingthwaighte.

Transcript

MARK:

Hello, this is Mark Bassingthwaighte. I'm the Risk Manager here at ALPS. And welcome to another episode of ALPS in Brief. We're here at the historic Florence Building, in downtown Missoula. And I'm delighted to be able to introduce our guest this afternoon, David Bell, CEO of ALPS.

David, can you take just a few moments and tell the audience a little bit about yourself, your background.

DAVID:

Sure Mark, thanks for including me in today's podcast. I've had the privilege of being at the helm of ALPS for almost six years. I've worked my entire career in the insurance industry, both domestically and abroad for small companies and large, and in some cases turning a small company into a large one. It's such a blessing and a privilege to have the opportunity in 2012 to come home to Montana, and also to take the leadership of ALPS.

We've accomplished a lot of great things together since then.

MARK:

You sure have.

David Bell:       More importantly we have a lot of exciting things on the horizon for the company and for its people, and for its policyholders and stakeholders.

MARK:

Well let's talk about that a little bit. We had just a great meeting today, getting the company together and looking more long-term and developing some vision. Would you just take a couple moments to share your vision, what are we doing here at ALPS, where are we going? I'd love to share this with our listeners.

DAVID:

Sure. We're at an exciting inflection point for ALPS. Having changed our regulatory structure and begun to move into the states remaining that ALPS has not been in historically, and really take the value proposition that has made ALPS successful over the past 30 years, and double and triple down on that. Today's meeting that included everyone in the company in various offices from the east to the west coasts, really set the vision for us together on our culture, on our financial metrics, and what we're striving towards, and how we're measuring ourselves, and also really the why. The why we do this vision. Why we do this together, why we do this for our customers, and what we hope to accomplish with all of the hours that we spend together, growing in the same direction and fighting for the same goal.

MARK:

I've been with the company now, 20 years. It's just been such an exciting time in recent years, to see the growth and the direction ALPS is moving in. And I'd kind of like to pivot the conversation, just a little bit and look at the value of vision for businesses in general, to include solo and small firms.

In my experience, in terms of doing some consulting risk management, vis-à-vis, these kinds of things over the year. At times, you do find attorneys, for lack of a better description, sort of spinning their wheels, and there's not a lot of growth. I would just be interested in your comments in terms of the value of vision to helping a lawyer move forward, and in the context of any business. There's nothing magical about vision, whether it's GE or a small solo. Do you see where I'm going? Your thoughts, your comments.

DAVID:

Sure. Well I think one of the reasons why we had the meeting we had today, coming off of a fantastic year in 2017, was, I felt frankly wanting at the end of '17 in messaging our accomplishments. But yet I'm recognizing that we close a year where we have the highest and first in almost every category, the highest revenue ever, the highest surplus ever, one of the lowest claim frequencies ever. The business is as healthy and vibrant as its ever been, and it's three decades. But yet, I felt like the year-end wrap-up of accomplishments was missing something, and I feel, and this is where I'm accountable, that what it was missing was some clarity and vision beyond the budget. Did we beat budget, did we not beat budget, right? That is a component piece of a plan, and part of a vision, but it's not the vision itself. Nor is a mission statement, or a several sentence tag line that identifies your values. That's important, and we have that, but that's not the vision.

The vision really comes down to the why we do what we do. And doing a little more than last year, a little more revenue, a little more profit, that's good, and it's necessary, but it's not the why. And if it is the why, it's frankly hard to seek inspiration over the long-term, if that is the why. And so today at ALPS, and I suspect the same is true within the story of a solo practitioner or a moderate or large size law firm. The why we do what we do, is as important as how effectively, ... how much money we make, in doing what we do. And so for us, the vision of why, really comes down to solving the problems for our customers. Doing it in a way that honors our core values. We write transparent, easy to read policies. We apply claims in a fair, honest, and transparent way, and we're proud of that. We can all look in the mirror knowing that we've both created and effectuated something that we can be proud of.

But within these walls and the people that are working together, this is a giant relationship potpourri. Everybody is interacting, everybody comes from different life experiences. They have had accomplishments and they have been wounded in different ways, and they bring all of that in those experiences to work. And work, we're complicated people and when we put a lot of us together, we're exponentially more complicated. So reminding ourselves of the why we're doing what we're doing, becomes really important so that it's not just we did a dollar, now we've got to do two dollars. We're doing it for each other, we're doing it for a certain mission, and we can seek inspiration from that. And Ideally, what we come up with is something that makes us excited to do what we're doing. We don't do it for a job, we do it because we really enjoy it, and we enjoy the people we do it with.

MARK:

And I love that. That's just fantastic. Can you, sort of the last topic I'd like to explore with is, ... I'm a lawyer, so it's a hypo here, and I've come together with a few other lawyers, and we're starting a small firm here. We may have a couple employees, this kind of thing. Maybe we've been in practice for a year or so, and we're still struggling, just, again finding direction, finding success. And so we reach out to you just as, if you will, even just as a business consultant, and somebody who just has a tremendous amount of experience here. How would you, ... well David, I appreciate the value of vision, but how would I go about this in a small setting? Do you have some thoughts, or some general, just advice to the business side of this?

Because I think lawyers spend a lot of time, ... we're taught how to practice law, and the education we have is a great education, but we're not taught how to run a business. There is this business aspect, this business side. And if we're not successful with the business of law, we're not, ... you see where I'm going? So do you have any thoughts to share on just a couple of day-to-day tips, how might I go about?

DAVID:

Well anybody who has a law firm is a better expert than I am at this, at the moment, on how to run a law firm. But I would suggest that like any business, as it pertains to lawyers and law firms, which is an industry we know quite well, and we see them succeed, and we see them fail. We see them dissolve, we see them merge, and we see them become phenomenally successful in a lot of cases.

I do think that it is important that those who run a law firm, it doesn't matter whether it's a solo practitioner, or a 50-person firm, really thinks in isolation about, I am a legal practitioner, I strive for excellence in my understand and application of the law. That's critical, that's really hard to be a great lawyer in a law firm if that's not a commitment. I also separately, to your point Mark, separately, I also have a business. And that business needs to be run like a business, which means I need to be sensitive to the fact that my time is billable hours equals money. There's only so many hours in the day. There are both efficient ways to spend that time, and inefficient ways to spend the time. And if I don't take some time understanding the difference between the two, it will lean towards inefficient, and will become financially stressful for the business.

So there is the legal practitioner of, and there is the business manager, and there also is the why. Because, why am I doing this? And the practice of law, is one of the most noble pursuits around. Different lawyers practice different types of law, and that are involved in different areas of law. But the fact that you are bringing your expertise to someone who doesn't have it themselves, and who would be disadvantaged, in some cases are literally lost without you, that's a great fiduciary responsibility that you're undertaking. There's a lot of inspiration that can be naturally born in the why of why I'm doing this, from that. But I suspect, and listeners can just reflect for themselves to what extent this might be true for their practice, that you do have to pursue the why intentionally, and pursue the most noble of the why option.

MARK:

I absolutely agree. In follow-up to that, is it important that, ... so again, I've got this small firm, they're three, four, five of us, whatever we have, is it important that each of us, as lawyers practicing in the firm, and perhaps to include our staff, does the why need to be uniform? Do we all need to have sort of a similar vision if the firm's going to succeed? Is that something you would encourage and advise? Do we sit down and have these kinds of conversations? Or is it more of a personal thing? Do you have any thoughts on that?

DAVID:

This is one guy's opinion, and I can't say that this is the right one. But my opinion is that you don't actually have to have the same why, with your contemporaries and colleagues in the firm. But I do think it is, the why needs to be known and discussed. And to the extent that there are differences, and in some cases there can be enormous strengths harnessed from different whys. As long as the whys are complementary. And as long as the whys are not in conflict, and that they can not just coexist, but that they can work off of each other. And so, I don't know that they need to be the same, I think it could be great if they are exactly the same, but I think it can also be great if they're not the same. But I don't think if can be great if it's just an unknown. An uncoordinated, every man or woman for him or herself, and we'll just see how it works out. If you want to just see how it works out, then you're not going to know how it's going to work out.

MARK:

Well this kind of circles back to what we were talking about earlier today. It seems to me there's this a difference in terms of having a vision and having clarity of vision. We, as business partners, if we all understand the whys of each other, and understand where we're trying to go, we can have some clarity of vision. And I think that lends itself to success in the business side.

DAVID:

And purpose. Success and purpose, where you wake up and say [crosstalk: 12:26].

MARK:

Well yes, exactly.

DAVID:

We've said here before, we have a wonderful business and a noble profession. This is not, ... we aren't feeding kids in Africa and so the inspiration that can be garnered from that type of a business, isn't the same as this business. So you have to, ... so often, people wake up one day, and they lack meaning, or they lack purpose in life. And we should all guard ourselves against that. But we don't all have to be in this wonderful philanthropic non-profit profession in order to feed and fulfill that side of us. But if we aren't watching for it, then one day it will just confront us when we wake up. Whether the crisis actually happens in midlife, or happens at some other point, that's often times when the crisis comes personally.

MARK:

There's some food for thought. Listen David, it has been such a pleasure. I really appreciate your taking the time to visit with the listeners here on the podcast. And I hope at some point in future, we can get together again and explore some other topics.

To those of you listening, thanks again. And please if any of you have any thoughts or ideas or things that you'd to hear in future podcasts, please don't hesitate to reach me at mbass@alpsnet.com. That's it, thanks for listening. Good bye.

Episode 5: What's your speed? 3 new policies to fit your needs.

ALPS is rolling out three new policy forms this year, offering legal malpractice insurance coverage options to fit your firm's needs. No one is more excited it seems to talk policy features than our General Counsel, Brad Dantic. Listen as Brad and Mark Bassingthwaighte share a lively discussion about the ALPS Basic, Preferred and Premier policies and learn how these coverage options can benefit you.

ALPS In Brief, The ALPS Risk Management Podcast, is hosted by ALPS Risk Manager, Mark Bassingthwaighte.

Transcript:

MARK:

Welcome to another episode of ALPS In Brief. This is Mark [Bassingthwaighte 00:00:06] and I’m the Risk Manager with ALPS. We’re recording here in the historic Florence building in beautiful Missoula, Montana.

Today, I have the guest Brad [Dantic 00:00:14]. Brad is the Vice President and General Counsel of ALPS. Brad, I was thinking the purpose of getting together, is talking about some exciting changes here at ALPS. I admit, as insurance guys, not everybody would view this as the most exciting topic. But, there some really important, significant changes coming.

Over the years, ALPS has really had, in terms of the legal malpractice policies, we’ve had two policies. What we have referred to as our standard policy and our enhanced policy. This is changing now. Can you kind of just set out the basic groundwork of what has happened and where we’re going?

BRAD:

Sure, absolutely. Thanks for having me, Mark. ALPS, we’ve kind of been a niche specialists. Lawyers, professional liability for 30 years. We’re endorsed by more state bar associations than any carrier.

So we listen to the legal profession, we listen closely to lawyers, we listen to what they need and what they want. What we’ve realized is that our products could be better tailored to meet the varying needs of different types of law practices.

For example, Sole Practitioner might need a different type of insurance coverage than a law firm.

MARK:

Well of course. Yeah, right.

BRAD:

A 20 member law firm.

MARK:

Right, makes sense.

BRAD:

So what we’ve done, is we’ve created three policy forms rather than two.

MARK:

Okay.

BRAD:

We have the Premier product, our ALPS Premier product, which is the most expansive insurance coverage. It might be what I would characterize as industry leading edge. I don’t think anybody in the industry is offering a product as comprehensive and as solid as the ALPS Premier policy.

Our second policy, is the ALPS Preferred Policy is comparable to what our standard policy used to be like, but with some enhanced features. Finally, we also offer the ALPS Basic Policy. I would characterize the ALPS Basic Policy as a policy that provides the most essential level of coverage. If you needed insurance coverage, it is the beginning of insurance coverage for a lawyer.

MARK:

I can see if somebody … I think back in the day, when I hung up the shingle.

BRAD:

Shingle.

MARK:

Shingle right after law school … Money is tight. I can appreciate some coverage is better than no coverage. I think that’s really where this policy comes into play. It’s the starter policy, perhaps, might be the way to describe it.

BRAD:

Absolutely. What we’ve learned in working with State Bar Associations and the American Bar Association, we’ve learned that there are a significant percentage of lawyers that are practicing law without insurance.

MARK:

Good point. Yeah, absolutely.

BRAD:

As State Bars begin to look at uninsured lawyers, they’re coming to the realization that perhaps it’s important that lawyers maintain at least a basic level of insurance coverage.

For those lawyers that are practicing law uninsured, this might be their first and most affordable option for getting entry into the Lawyer Professional Liability Insurance.

MARK:

It certainly fits a very real, legitimate need. Can we talk a little bit about the Preferred Policy? Can you just fill me in, then, on what we’re doing with it?

You’ve compared it to our historical standard policy, but we’ve got some enhancements, these kind of things. What do I get with this policy? Where am I going with it, if I’m looking at this?

BRAD:

Sure, sure. Again, the ALPS Preferred Policy, it’s our middle of the road policy.

MARK:

Yes, right.

BRAD:

The Preferred Policy is like our Standard Policy, as you mentioned, and here’s what it provides. In any Lawyers Professional Liability Policy, and this has always been the case for ALPS in our 30 years of existence, it is important to look to determine whether or not a claim expense allowances are provided under the policy.

MARK:

Okay.

BRAD:

So when an insurance company undertakes to represent our insured and to defend a claim against our insured, it’s important for the insured to understand are those defense costs being incurred and eroding the limit of liability available to pay damages? Or are they being incurred outside the limit of liability?

ALPS has always provided claim expense allowance, which makes us unique in the industry and perhaps one of the reasons why we’re endorsed by more State Bar Associations. Under the Preferred Policy, we offer up to $500,000.00 in defense costs outside the limit of liability.

MARK:

Now that’s nothing to sneeze at. That’s a nice sum, yeah. Fantastic.

BRAD:

Yeah. In most instances, we can undertake, settle, resolve, defend a claim easily with the $500,000.00 in claim expenses, in most cases.

MARK:

Okay.

BRAD:

We also offer a disciplinary benefit, well I’ll call it a disciplinary benefit. If the lawyer becomes subject to a disciplinary proceeding, say before a State Bar Association, the preferred policy provides coverage of up to $25,000.00 per attorney.

MARK:

Wow.

BRAD:

If you’re in a law firm, multi-attorney law firm, we provide up to $75,000.00 for the entire policy period. Irrespective of the number of attorneys.

But perhaps the most significant change that I think ALPS may have made in the course of moving into these new policy forms, is we now have moved to a pure consent to settle clause.

Under the Preferred Policy and you’ll find it in the Premier Policy as well, ALPS will not settle a claim without the consent of our insured.

MARK:

Now that’s gotta be somewhat unique in the market.

BRAD:

It is unique in the market. We do see some carriers that provide it. ALPS decided we are going to continue to be industry leading, so we went to a pure consent to settle clause.

MARK:

Yeah, very good. Very good.

BRAD:

A couple other unique features that I really like about our Preferred Policy, is our extended reporting period options. So, if you’re somewhat familiar with what … The Lawyers Professional Liability Insurance industry generally operates on a claims made and reported basis.

So we provide coverage for claims that are first made and first reported to us during the policy period. Irrespective of when the act, error, or omission occurred in the professional services. But when your policy ends, you no longer … If the policy simply ended, you’d no longer have the ability to report claims.

MARK:

Claims don’t come up immediately in our line of work.

BRAD:

Exactly.

MARK:

It’s a [inaudible 00:06:56].

BRAD:

It’s important to be able to continue to be able to report claims once your policy has expired, so we refer to that as tail coverage. Or extended reporting period coverage.

Again, I think our ALPS Preferred Policy, offers some of the most expansive, extended reporting period options in the industry. If you have been insured with ALPS for at least five years as a Sole Practitioner, we provide a free ERP.

If you have been insured in a law firm, you’re not a Sole Practitioner but you’re in a law firm, and you are retiring from the practice of law, we call this feature … You get a free ERP if you’ve been with us for five years, we call it, piece of mind piece of paper.

MARK:

I love this one.

BRAD:

You want to know that irrespective of whether your old law firm, from where you’ve recently retired, you don’t have to worry about them continuing to buy insurance.

You can buy from ALPS at the time you retire. You’re entitled to a free ERP, if you’ve been with us at least five years. We also offer free ERPs upon death, upon disability, and I’m unaware of any carrier in the industry offering a free ERP if you’re called to active military service. We provide a free ERP in that instance as well.

MARK:

Now that one is awesome. I’m just … Wow. Wow. Okay. Great stuff.

BRAD:

That’s kind of a run through of the Preferred Policy.

MARK:

Right. So let’s take us in to the Premier, then. I guess I would describe this as the Cadillac Policy of our series here. What am I getting with the enhancements here? Where are we going with this one?

BRAD:

I don’t look at it as the Cadillac Policy, I look at it as the Lamborghini.

MARK:

Oh, okay. I’m loving it, I’m loving it.

BRAD:

The Premier Policy is really what it is. I don’t believe there is a policy out in the industry today that provides the protections and the benefits that’s available under the Premier Policy.

For example, under the Premier Policy, you can receive claims defenses. That claims expense allowance.

MARK:

Right, that we were talking about.

BRAD:

Up to one million dollars. So, we can actually undertake defense and occurred offense costs up to a million dollars.

MARK:

Now that’s some serious coin.

BRAD:

Before the limit of liability begins, the defense costs, begin to apply to the limit of liability. We also look to our insured firm. They have the opportunity to weigh in on the appointment of counsel.

MARK:

Oh, okay.

BRAD:

So they get to participate, we have panels of lawyers that defend claims around the country. But, under your Premier Policy, we’ll always consult you as to which firm you’d like.

MARK:

Yeah, so you have a little more control here, a little say.

BRAD:

Mm-hmm (affirmative).

MARK:

Yeah, okay.

BRAD:

The disciplinary proceeding benefit, under the Preferred it’s $25,000 per attorney, $75,000 aggregate. Under the disciplinary benefit on the Premier, it moves to $50,000 per attorney, $150,000.00 per firm.

Then, I think one of the most significant features of the Premier Policy. Any lawyer buying insurance in the marketplace today, needs to understand, what is the definition of Professional Services. What types of services or activities that you can engage in, what is covered under that policy.

The Premier Policy provides the most expansive description of Professional Services. We include within the definition of Professional Services, for example, if you’re serving as an expert witness.

MARK:

Yes, okay.

BRAD:

You’re covered. If you are serving as a speaker or an author of legal research, or a presenter at a seminar, there is coverage within the definition of Professional Services. We cover you if you’re a government lobbyist. If you’re lobbying on behalf of clients, say before State Legislatures, we include that within the definition of Professional Services.

Really, the Premier Policy provides the most expansive coverage for the types of Professional Services and activities that are covered.

MARK:

I’m getting the Lamborghini analogy here, now.

BRAD:

Then, it has the Pure Consent to Settle clause. It has the similar, the leading industry options on extended reporting periods or tail coverage. We provide a unique feature, I’ll call it, the Reduced Deductible Feature.

Under our Premier Policy, if you settle a claim at mediation.

MARK:

Yes, okay.

BRAD:

There’s a waiver of the deductible up to a particular amount. If you engage, if it’s your customary practice to use an engagement letter that’s signed by the client … It describes the scope of services you’re going to render, it describes the billing arrangements. If you have an engagement letter and a claim arises from that engagement, you are entitled to a reduced deductible, which reduces the amount of money you ultimately have to pay.

MARK:

So we’re incentivizing risk management here, which is awesome.

BRAD:

We are, absolutely.

MARK:

Yeah, yeah.

BRAD:

Then, we provide some supplementary benefits under the Premier Policy that you would not find in our other ones. We provide subpoena assistance, for example. We’ll pay up to $50,000.00 for subpoena assistance.

So if you or your law firm receive a subpoena for the production of records, we will appoint counsel and we will pay for that counsel, up to $50,000.00 to assist you in the responding to the subpoena.

Then, of course, we have the Public Relations Benefit. If your firm were to incur what we would call a public relations event, some disastrous moment in your firm history that causes you to have to engage a Public Relations Consulting Firm. We provide some benefits for that, under the Premier Policy, as well.

I’ve talked a lot about the benefits, now you understand why I call it the Lamborghini of Lawyers Professional Liability Insurance.

MARK:

Yeah. Like I said, I think that’s an apt description. I like that a lot. I like that a lot. Are there any sort of closing thoughts that you have about this?

BRAD:

We’re really excited. We’ve already received approval of these forms in many states. Our plan is to roll it out January 1, 2018. I know the Insurance Regulators, it’s been well received by the Insurance Regulators. So we’re looking forward to offering it in the marketplace and looking forward to insure lawyers and law firms around the country.

MARK:

Brad, it’s always a pleasure. Thank you for sharing the information. If any of you, in terms of listening to us, you have any ideas of topics or things that you’d like to hear in future, please don’t hesitate in letting us know. You can reach me at mbass@alpsnet.com. Thanks for listening, folks.

 

Episode 4: Opening a Law Firm? Think About Protecting Your Future.

Mark talks with seasoned ALPS Business Development Representative, Julie Patterson, about new lawyers hanging their own shingle and the associated challenges. This includes looking at legal malpractice insurance as an investment in protecting all of the work you do from the day you open your doors. Julie and Mark discuss the dangers in going bare and how step rating works.

ALPS In Brief, The ALPS Risk Management Podcast, is hosted by ALPS Risk Manager, Mark Bassingthwaighte.

 

Transcript:

MARK:

Welcome to another episode of ALPS In Brief, the ALPS Risk Management Podcast. We’re recording here at ALPS’s home office in the historic Florence Building in downtown Missoula, Montana. I’m Mark Bassingthwaighte, the ALPS Risk Manager, and I have the pleasure of sitting down today with a long-time colleague, Julie Patterson, who has been with ALPS for over 20 years now. Julie, before we get started, can you just give us a brief introduction, background to yourself for our listeners?

JULIE:

Absolutely, Mark, I’d be happy to. I’ve been here at ALPS for 20 years, really have enjoyed my time here. It’s a great company to work for. I’m originally from California, but moved to Montana to have a different lifestyle in 1990, and have stayed and never left, and am not going to leave, so …

MARK:

Yeah, that happens to a lot of us, huh?

JULIE:

It does, yes.

MARK:

Well, thank you for sitting down with me today. What I wanted to really talk about is looking at the new lawyer situation, and going back many years ago … I’ll use me as, perhaps, the example we might talk about a little bit, but … I was one of those guys that when I came out of law school, I hung up a shingle, and boy, can that get a little frightening and crazy. You know, you sit down, you try to get some kind of business plan in place, you look at trying to get some advertising, get your computers, get the office set up, all these kinds of things, and the last thing that you’re thinking about, in so many ways, is this whole issue of malpractice. I’ve just … I don’t have many clients yet, you know, and I’m thinking here …

But I know that I was not alone or unique in this. When I started thinking about that whole issue, you sit here and say, “You know, I just don’t have the income stream yet to be able to afford this, because, you know, I know what medical malpractice premiums look like. Docs are paying, at times, $20,000, $30,000, $50,000, $100,000 a year in premium, and [inaudible 00:02:26], I can’t afford that.” Is that how the insurance marketplace in terms of the legal malpractice arena is priced, or … Can you just explain to a new attorney, what am I looking at here?

JULIE:

I would be happy to, Mark. It’s completely separate than medical malpractice, so take that out of the equation, and think about protecting your future. Starting out, you’re opening your first practice here, you may not have a ton of money up front, but still, the premium is going to be roughly probably starting out between $1,000 and maybe $1,500.

MARK:

Okay. That’s very different than what docs are paying, that’s for sure.

JULIE:

Yes, it’s very different.

MARK:

Right.

JULIE:

It also depends on what limits you want to hold. It can go a little lower, it can go a little higher. But know that that carrier’s going to have some premium finance terms to help you out so that you’re not paying everything all up front if you don’t have the cash up front. And really, when you open your doors, you want to protect yourself and your clients, and do it right as you start out into your private practice, because if you wait six months or a year down the line, and now decide to go, and you’ve got some money in your pocket, now you want to purchase the malpractice, no carrier in the marketplace is going to cover your prior work history to the day you open the doors to the day you decide to get that policy.

MARK:

Oh, wait, okay, so now that’s important. I want to make sure that we’re all understanding this. So if I sit down, and I open up my office, hang that shingle, and I’m doing a lot of marketing, networking, doing the things we all try to do to get the name out there, and I start to have a little bit of work, not much yet, but I build up, you’re saying that … So if I wait six months to buy my first policy, all of the work that I’ve done up until the day I buy that policy, I’m, in essence, bare on, that the policy doesn’t cover that?

JULIE:

You are, exactly. You’re bare on that time frame.

MARK:

Okay, that’s good to know, right.

JULIE:

Because a lot of new attorneys don’t realize that when they open their doors, and it’s a really key, important fact to before you open your doors, before you take that first client, is to get that coverage in place.

MARK:

Okay. When I think about … So I’m hearing that the premium is relatively affordable. Is that a normal kind of premium? Because it seems to me, I guess what I’m trying to get at is, you know, I don’t … I haven’t been in this long, so my exposure, if I’m thinking about the insurance carrier, it’s got to be pretty low. What does that play … What does that mean to you guys? Am I on to something here, that … What happens to my premium in the early years?

JULIE:

Good question. You are on to something. So, starting out, when you come into a carrier and they give you a new quote for a new policy, you have no work history behind that quote, that policy. And so you’re going to get a credit for having no work history. They know that when they’re quoting you, and they’re putting that factor into the premium before they release it to you. So as your exposure increases over the years, as your practice builds and you get more clientele, your premium is going to mature, or some people call it in the industry “step rating,” where you can expect gradual increases over a six-year timeframe. So basically, by year six, your premium would have almost doubled, provided the carrier has no rate increases, as well as you haven’t reported a claim and a settlement has been reached in that six-year timeframe. So there are varying factors, but maturing rating is common in all professional liability policies, including those for lawyers. Yes.

MARK:

Okay, so, all things being equal, the good news is … I mean, I understand that my risk matures, but it levels out.

JULIE:

It does.

MARK:

So I don’t keep seeing these increases my entire life, because heaven … Okay, I got you. So roughly six years in, I’m considered fully mature, okay. The final point that I’d like to just explore here a little bit is this, you know, what is it … Why do I want to have an insurance policy, in terms of what protection am I buying? Because I can see people sit here and say, “You know, again, I’m just starting out. I’ve got my computer system, and I got a good deal online,” or whatever it might be, “and it’s furnished lightly. There’s just, it’s not a lot of assets, you know? I don’t have tons of money I’m trying to protect and these kinds of things.” So I could also see just waiting a bit until I’m more established before I start to think about insuring. But how do you respond to that kind of perspective? Do you see where I’m going with that?

JULIE:

I see where you’re going with that, and I hear that quite a bit, but you also have to put yourself in where your future is going for your practice, and as you’re starting out, it is a litigious environment that we live in now, and if you take on a client, and for some reason, a year out, you still don’t have coverage, they’re not happy with what they did, you have no coverage. You have nothing to help back you up in case you maybe did something wrong, or maybe you didn’t do anything wrong, but still, that’s what you’re paying for. You’re paying for that peace of mind to cover your practice as it grows, and if a misstep happens along the way, that’s where the policy comes into play for you.

MARK:

Mm-hmm (affirmative). So it’s, in other words, I’m buying a little comfort. I can sleep at night, you know?

JULIE:

You can sleep at night.

MARK:

Yeah, yeah. And I’d also think, I suspect, I mean, colleague to colleague here, too, I think the other side that gets overlooked at times is we’re also just trying to protect the client.

JULIE:

Exactly.

MARK:

I mean, it’s … I want to work … If I think about who I’m hiring, I would want to work with a lawyer that’s insured as opposed to one that isn’t, because again, sometimes just mistakes happen, you know?

JULIE:

They do. They do.

MARK:

So I think it’s important for all of us to just kind of remember, not only are we buying peace of mind for ourselves, but we’re doing … There’s no disciplinary rule that says we need to do this, but it is the right thing to do-

JULIE:

It is the right thing to do, absolutely.

MARK:

… you know, to make sure that these clients are taken care of, should some misstep happen. Well, I appreciate … Do you have any final thoughts, or anything else you’d like to add on this?

JULIE:

No, I think that about covered everything. Thanks.

MARK:

All right. Well, thank you very much, Julie. It’s been a pleasure, as always, and I’ll see you around the halls.

JULIE:

All right, thanks, Mark.

MARK:

Well, thank you very much for listening, folks. That concludes this current episode. If you have any questions about the issues we’ve discussed today, please don’t hesitate to contact me at mbass@alpsnet.com. We’d love your feedback on the podcast, to include hearing about any other topics or issues you’d like to hear us cover. Thanks again. Have a good one.

Episode 3: Stay Away From The Gray Area. Reporting Claims.

There are a number of common questions that policyholders ask in regards to reporting claims. In this episode, ALPS Claims Attorney John Ries talks with Mark about some of questions he often hears. John also sheds light on why it’s important for attorneys to call their legal malpractice insurance provider even if they suspect that an issue or event may give rise to a claim.

 

ALPS In Brief, The ALPS Risk Management Podcast, is hosted by ALPS Risk Manager, Mark Bassingthwaighte.

 

Transcript:

MARK:

Welcome to ALPS In Brief, the ALPS risk management podcast. We’re recording here at ALPS home office in the historic Florence building in downtown Missoula, Montana. I’m Mark Bassingthwaighte, the ALPS risk manager. I have the pleasure of sitting down today with ALPS claims attorney John Reis. John, before we get into some discussions here, can you tell our audience just briefly a little bit of your background here at ALPS?

JOHN:

I’ve been here eight years. Before that, I was in private practice in Washington state for about five years. Then before that, I was in Oregon as a prosecuting attorney.

MARK:

Ah, interesting. Very good, very good. Both of us in terms of the roles that we’re in get some common questions, which are just concerning, “I think I might’ve made a mistake. There’s a problem out here. What happens? What do I need to do? What should I do?” The idea today is just to have some discussions about the claims process. If I am an attorney and I’m concerned that a mistake has happened, can you talk me through what the basic reporting requirements are? When do I need to report this? You see where I’m going? I don’t even know.

JOHN:

In the past, and this is changing starting next year, we have in the past asked for attorneys to give us notice as soon as reasonably possible. Like all attorneys, reasonable is up for interpretation. Now we are changing it to “immediately notify us.” Basically, I always tell attorneys when they call, inevitably they’ll say, “I wasn’t sure if I should report this or not because it’s not a claim yet.” Sometimes there are claims; they’re just flat out “I missed the statute and I had to my tell my client.”

MARK:

Right, of course.

JOHN:

Sometimes, it’s a little more in the gray area. “I’ve just lost a summary judgment motion. Is that a claim?”, or, “I may have forgotten to list an expert. Is that a claim?” I always advise people that it is a claim as soon as you think it’s a claim. If you’re thinking about whether or not to report it, you should just default and automatically report it, and not wait and see if it develops into an actual malpractice claim. There’s a lot of problems if you wait. There’s always the problem down the road. Someone will accuse you of having knowledge of it and not telling ALPS.

MARK:

Right, right.

JOHN:

Nobody wants to fight over that. ALPS doesn’t want to. We’d rather you just tell us up front. It doesn’t hurt you any, so you might as well tell us as soon as you think it’s a possible claim.

MARK:

Right. A takeaway for me here is some people just assume “I don’t have a claim until I’ve been sued,” and that’s not really what this is about. It’s about awareness. If you have questions or concerns, just call us. We’ll sit down and work through it. I think just as a side note, we don’t open everything that is reported as a claim.

JOHN:

Right.

MARK:

Would you explain that just briefly?

JOHN:

Yeah. We have the choice. Sometimes someone will call in and it’s clearly not a claim or even a potential claim, and so we don’t even open anything. We just put a note on the file. Other times, maybe many years down the road, it can turn into a claim or not. We’ll open those as circumstances. A circumstance, we don’t report it when you go to another insurance company, heaven forbid. We don’t report those, so it’s just an internal notation. If it does develop into a claim, they can turn it into a claim down the road. We call them circumstances. Sometimes, you’ll see some insurance companies say, “We don’t require you to report circumstances.” Basically what they’re saying is, “We don’t require you to notify us of things that are not actual claims,” which we think is problematic. That’s why we ask you to report even potential claims, what we call circumstances.

MARK:

It seems to me, the value of that is “we’re just going to pin down coverage.”

JOHN:

Yeah.

MARK:

“We’ve taken care of our reporting requirements just in case it’s a little muddy.”

JOHN:

Right.

MARK:

Okay, okay. So, I’ve had a call with you or someone to chat with me, and the decision is, “Okay, this is something that should be reported.” Is there a formal process that I need to go through to formally report a claim?

JOHN:

Required in writing. We don’t have a form. A lot of people call and ask, “Is there a form we have to fill out?” There’s no form. Oftentimes, it’s best you just call us first and we’ll give you an idea of what we want so you’re not sitting down and writing a 10-page letter that doesn’t really help us that much. We just require written notice that just basically puts us on notice of what the issues are. Has what has been missed, what’s being alleged, who the client is, when did this happen. It could be as short as a paragraph, depending on what the error or the potential error is.

MARK:

So you’re talking about writing. Can I do this even via email?

JOHN:

Email’s fine. Fax, email, regular mail.

MARK:

Okay, very good. Now you and I both know we get these questions a lot too: “Are you guys going to raise my rates?” This kind of thing. Is there an impact? What happens? How does ALPS deal with the fact that a claim has been reported? When we think about underwriting, rates, those kinds of things going forward.

JOHN:

Yeah, there’s no impact on your future rates for just reporting claims.

MARK:

Mm-hmm (affirmative).

JOHN:

In fact, I would consider it to be more of a benefit to you as far as underwriting, that you’re more cautious than the average person if you call in something that’s maybe not a claim. At least it shows that you’re thinking about the issue, which is much better than the other way, if you call us up six months after the claim has been made.

MARK:

Right.

JOHN:

If anything, I think it helps your future rates. There’s not formula that really takes it into consideration. It all goes into the black magic of underwriting. There’s not direct impact on your rates.

MARK:

So what I’m hearing is if I report a claim, you guys do your thing in claims and provide excellent customer service, and the claim goes away. I’m successfully [defended 06:45]. I’m hearing that that’s really not going to be a problem. How about I’ve blown a statute and there is a significant loss here? Let’s say there’s a $300,000 loss and I don’t know, $50,000 or something in defense costs, these kinds of things. Is that a similar outcome? What happens rate-wise there?

JOHN:

Yeah, the first thing that happens is there’s a surcharge. Anything over $30,000 is surcharged.

MARK:

Whether it’s loss or defense?

JOHN:

Right, loss or expense. I don’t know what the exact number is, but the majority of claims are probably in the surcharge level. A fair number don’t ever get to that high number. We can resolve them for next to nothing, or nothing at all. The ones that go over $30,000, the surcharge is relatively small. It’s half the basic rate, which is 1900. It’s a $950 surcharge, but that’s added into the formula mid-way through, so the final number could be higher than that.

MARK:

Are there any obligations that I have under a policy when a claim arises?

JOHN:

Well the only real obligation is you have to report it. When the new policies go into effect beginning next year, you have to immediately notify ALPS as soon as you become aware of a potential or actual claim. That’s your only requirement, is to immediately notify us. All of the claims attorneys have cellphones. We take calls 24 hours a day. Sometimes people say, “Oh, this came in over the weekend.” You can call us on the weekend.

MARK:

I get that I need to report the claim, but how about as you handle the claim, go through the process? Do I have obligations along those lines?

JOHN:

Yeah. The first thing that we’ll tell you after you report the claim, if it is a claim and it’s not just a potential claim or a circumstance, we’ll ask for a complete copy of your file. That’ll be the first, probably the biggest task you have as an insured is copying a file, depending on who the-

MARK:

– the importance of file maintenance and keeping files, but …

JOHN:

Yeah. Some people or some firms and some attorneys have a lot better record-keeping procedures than others. For some people, it’s not a big deal. They can just hit a button, copy it to a memory stick, and mail it to us. Other people, their banker box is scattered through several offices. Papers are loose, they’re difference sizes. I understand that’s a bigger task. Some files are just plain huge. They can take a whole room. If that’s the case, sometimes we can limit the request. Just give us the pleadings for now, or just give us the correspondence for now. Just enough to get us going. I guess the flip side would be if, we usually err on the side of just getting everything. It’s just like when you get a new claim or a new case as a lawyer. You want all of the information, or in discovery, you want all the information. You don’t want just the little bits that they give you. If there’s too much there, we’ll let you know and we can send it back, or just tell you not to send it to us to begin with.

MARK:

Do you prefer that digitally?

JOHN:

It’s a lot easier for us digitally. I guess the downside of digitally, sometimes people copy a file, if there’s multiples of thousands of pages, if it just goes from one to ten thousand, it’s a little hard to sort through. We manage.

MARK:

I can imagine that one.

JOHN:

Yeah. It happens a lot, so we’ve gotten pretty good at going through and sorting it out. Most files are, even poorly kept, some files are better kept than others but all files have some natural order to them. Pleadings, correspondence, notes. There’s a predictable outcome to each one.

MARK:

Going back to this sort of example of blowing a statute or something, I realized, “Oh my gosh, I really have made a mistake here and messed up here. This is going to be a malpractice claim.” Do you have any thoughts or advice that you would share in terms of, what do I do with my client? Should I just run out and fall on my sword and say, “[inaudible 11:18], I’m so sorry. I’m so sorry. I’ll make it right?” What is your advice? Walk through that, that issue of client information or management.

JOHN:

That’s a tricky one. Knock on wood, I’ve never had to deal with that, even when I was in private practice. I can understand that’s a difficult situation. I think most attorneys really want to tell their client, “I’ll make it right,” or they feel bad. If it’s a missed statutes of limitations, for example, they feel bad inevitably. Any error I guess an attorney feels bad. Then the next question is, “Well how do I communicate that to the client?” Well I guess we all tell the insured that you can be honest with them and tell them that the mistake was made. The only thing you can’t do is tell them that the insurance company will pay you a certain amount, or that the insurance company will fix it somehow. You have to limit it to just, “I made a mistake. Here’s what the error was.” You can’t say, “And you’ve been damaged in the amount of x dollars. Just call up John and he’ll cut you the check on Monday.” In the policy, it requires the insured to cooperate with ALPS. Part of that is to not undertake any debts or any obligations with your client.

Within that limitation though, you can pretty much tell your client anything that you feel is necessary. That you feel bad, you wish it never happened. All of that’s fine. It will come back in your deposition, so you have to be aware of that. If you say that you feel bad and you wish it never happened, you’ll be asked about that. Keep that in mind. I think the best advice is just to tell them succinctly as possible, “I made an error. Your case is no longer viable. I’ve reported this to my insurance carrier. Here’s the claim number. Please call him or her as soon as you can.” That’s good enough.

MARK:

Well, my takeaway here is not to be afraid. If I am concerned that I’ve made a misstep, just to call and talk to the people that are experienced in handling these kinds of things and you will work with any of the attorneys calling in to try to understand, “Is this reportable or not?”, understand, explain how the process works. The other takeaway that I have here is, “Hey, if I am afraid I’ve made a mistake, I want to call ALPS first and have some discussions about how to handle this because I can get into some trouble in terms of just coverage issues and these kinds of things. I want to be informed.” For those of you listening, any time a claim comes up, I would just, “Hey, call John and he’ll take you through the process.

Well John, thank you very much for spending a little time. Thanks to all of you for listening to our show. If any of you happen to have any questions about the issues we’ve discussed today, please don’t hesitate to contact me at mbass@alpsnet.com. We’d love your feedback on the podcast, including other issues you’d like to hear us cover. Thanks again. It’s been a pleasure.

Episode 2: Insurance as an Investment, Not Just a Line Item.

 

Mark sits down with Julie Patterson, a longtime ALPS Business Development Representative, bringing with her two decades of experience helping law firms across the country understand the importance of selecting the right coverage to protect their law firms. In this episode Mark and Julie discuss legal malpractice insurance costs in terms of what a firm should actually be getting for their premium dollar.

ALPS In Brief, The ALPS Risk Management Podcast, is hosted by ALPS Risk Manager, Mark Bassingthwaighte.

Transcript:

MARK:

Welcome to another episode of ALPS In Brief, The ALPS Risk Management Podcast. I’m Mark Bassingthwaighte, ALPS risk manager, and I’m sitting down today at the ALPS offices in Missoula, Montana, with JULIE. Julie has been with ALPS on the business development team for 20 years. She brings with her a wealth of knowledge on legal malpractice insurance, and today we are going to talk about the cost of legal malpractice insurance, focusing on what really should you be getting for your premium dollar. Julie, welcome.

JULIE:

Thank you, Mark. I appreciate that nice intro.

MARK:

Well, you’re very welcome. You’re very welcome. I think it’s a fair question. Malpractice insurance is … It’s an investment. It’s not an insignificant line item of business year to year. When I think about I’m cutting this check each year and buying my ALPS policy, really what am I getting, what should I be getting when I think about malpractice insurance?

JULIE:

Good question. It’s very important for your firm to have your malpractice insurance carrier picked out and go through their features with a reputable person at the company to help you out with everything. You want to look for somebody who is going to partner with you, who’s going to understand what you do in the course of your day-to-day business and be able to provide support where you need it, but also peace of mind for exactly what you’re buying for your firm.

MARK:

I think that’s a great point in the sense … Heaven forbid, if I have some significant claim come up at some time, I mean, I really am counting on the carrier to have my back. What I’m hearing is the relationship here I really should look into.

JULIE:

You should.

MARK:

That this is a partner.

JULIE:

It is, and that’s very important because you want to have access to the people when you need to talk to them, or if you have a claim in your firm, you need to be able to talk to that person who can help you, ease your mind, and get the ball rolling for you.

MARK:

Are there other things that come to mind?

JULIE:

Absolutely. You want to look at the policy features. You want to see what they offer in limits and deductible. You want to access your clientele and your risk and what you can sleep with at night for your limits and deductible. That’s an important factor as well.

MARK:

In policy features, there’s one thing I think that’s important and I’m not sure everyone fully appreciates at times. You can sit down and compare policies at times and everything seems to be exactly the same except one is significantly cheaper. What we’re really getting at is there’s some policies out there that are what we refer to as cannibalizing policies. I think that might be an important distinction. Can you share what I’m talking about, what this issue is?

JULIE:

Yes. That’s very important. A lot of times when you see a quote come in to your firm for a cheaper price, that means that they’re trying to buy the business in your area. They may not know what the jurisdiction brings in claims experience. They may be just trying feelers out there to see what kind of business they can bring in the door, but typically if it’s a cheaper policy, it’s going to be cannibalizing. You are not going to have limits on the outside of your per claim limit, and you will probably have a hammer clause, meaning if a claim were to arise and you don’t agree to settle it with the carrier who you’ve been insured with, they are going to walk away, and you’re going to be left holding the bag.

MARK:

Okay. I want to make sure that we’re clear. When we talk about limits being inside or outside, if I have my defense costs inside limits so that every dollar that gets spent on defense is going to erode what’s available for the loss payment.

JULIE:

You’re exactly correct. It’s going to erode that per claim limit, and you want to look for defense costs on the outside of your per claim limit with the carriers that you are shopping with.

MARK:

That seems to me to be a pretty important thing.

JULIE:

That’s very important.

MARK:

Just to understand, so two policies that are on their face may provide a million dollars in coverage, but if the cheaper policy has defense cost inside limits, I’m really not getting a million dollar policy, so that’s why it’s cheaper.

JULIE:

That’s correct.

MARK:

Okay. That makes sense. That makes sense. Continue on. We’ve talked about the relationship, we’ve talked a bit about some of the features and looking at some of the pricing issues. Are there other things that come to mind yet?

JULIE:

Well, the add-on to the pricing, responsible pricing. You want to look for a carrier that’s had some experience in that jurisdiction, that’s been there a while. They know the climate, they know the jurisdiction, and they are going to rate accordingly and responsibly. If you see a carrier come in real low, they’re just trying to buy your business, and they might do a bait and switch the following year. Be careful when you’re shopping and looking at pricing.

MARK:

Again, it seems to me, is it worth even asking how long you have been in a market if I’m shopping and-

JULIE:

Absolutely. The other important factor is if that carrier is endorsed by the state bar. Many state bars around the United States will endorse a carrier, meaning they’re giving back to that community, that legal profession in that community, and that’s an important factor as well. It comes with a-

MARK:

Okay. All right, so what I’m hearing on sort of the takeaway with this piece is just looking at commitment to the local market, that I want to work with an insurer that is committed long term. That makes a lot of sense. Okay.

JULIE:

Customer service plays into it as well. You want somebody who’s going to return your calls, who’s going to answer your questions, respond to your email in a timely fashion, and hopefully under 24 hours. You shouldn’t have to chase them down. They should be willing to talk to you, whatever it is that comes about and you need help with.

MARK:

Okay. Excellent. Excellent. Boy, I wish I had known that years ago, let me tell you, before I got into working with an insurance company. Are there any final thoughts or other things you’d like to share, Julie?

JULIE:

Yeah. Probably just a quick input on claims handling. Double check on how they handle the claims, how you report a claim, are you going to be assigned a claims attorney to work with or a claims adjuster, very important. You really want somebody who is a claims attorney, who is an attorney who can talk on your level, and find out who their defense panel is in your jurisdiction, and if you have input there. That’s important as well. You really want input instead of them picking an attorney that maybe is somebody you don’t respect in your jurisdiction.

MARK:

Right, right. This has been great stuff. The big takeaway for me is this isn’t just like going to a store and picking out some item for home or something. What you’re really saying is we’re entering into a partnership here and heaven forbid again, something come up in terms of a blown statute or some other type of significant claim. What you’re really telling me is that the relationship that I’ve created with the carrier is really going to be key in terms of how we get through all this in the end.

JULIE:

It’s very key.

MARK:

Yeah. Good stuff. Good stuff. Well, thank you very much for joining us today.

JULIE:

You’re welcome. Yeah, thank you.

MARK:

Thanks to all of you for listening to the show. If any of you have any questions about the issues Julie and I have discussed, please don’t hesitate to contact me here at ALPS at mbass@alpsnet.com. We’d love your feedback on the podcast including hearing about any other issues or topics you’d like to hear us cover. That’s it. Thanks again, Julie. Thanks to all of you.

JULIE:

Thank you.

Episode 1: A Cyber Breach. It's Not If, It's When.

 

While in Missoula, Libby Benet, U.S. Lead for Beazley Product Solutions took the time to sit down with Mark to talk about the latest trends in cybercrime, including the rise of industrialized ransomware, and how prevention paired with protection can help law firms best avoid and manage a cyber breach. Beazley has handled 8 of the largest breaches to date. In 2012 Beazley Breach Response Services partnered with ALPS to create the ALPS Cyber Response policy, which is the only one of its kind designed specifically for law firms. A more feature-rich version of the ALPS Cyber Response policy will be coming out in January of 2018. 

ALPS In Brief, The ALPS Risk Management Podcast, is hosted by ALPS Risk Manager, Mark Bassingthwaighte. 

 

Transcript:

MARK:  Welcome to the first episode of ALPS In Brief, the ALPS’ risk management podcast. We’re recording here at ALPS’ home office in the historic Florence Building in downtown Missoula, Montana. I’m Mark Bassingthwaighte, the ALPS risk manager, and I have the pleasure of sitting down today with Libby Benet, U.S. Lead for Beazley Product Solutions. Libby, welcome.  It’s just a wonderful opportunity to have you join us today.  We’ve been having some conversations earlier, doing some training here at the building, and I was fascinated and interested in your summary.  You were really talking about, you know, why small firms, small law firms, should be looking at a cyber policy, and I would just ask you to share it with our listeners.

LIBBY:  Yeah, sure.  Thank you so much for having me here.  I’m really glad that I have a chance to talk to you today. So we look at the cyber product really as a way for policyholders to deal with real-life risks that they’ve got in their businesses today that they may not be aware of and are addressing. And so small businesses — It’s not a question of whether they’ve been penetrated —

MARK:  Right, right.

LIBBY: — or not; it’s when they will be penetrated.

MARK:  Yeah, yeah.

LIBBY:  And then what is the response going to be. At Beazley what we talk about is having a data breach is not a crisis, but mishandling that data breach is. And so having an insurer that’s got a policy and services associated with it to help that law firm when an event happens is critical to dealing with a crisis situation.

MARK:  Okay.  Can we go further with that?

LIBBY:  Sure.

MARK:  If I would sit down and say, okay, I understand that it’s one of these “it’s not if, but when” kind of things —

LIBBY:  Yeah.

MARK:  — but I also — In my experience, a lot of small firms in particular tend to come with this attitude of I’m not big enough to be hit.  I’m — I’m not on anybody’s radar.  It’s not going to cost that much money, these kinds of things. Can you — Could you give me some business reasons, why — why would — You’re trying to convince me.

LIBBY:  Right.

MARK:  Why — why do I really need this product in terms —

LIBBY:  So let’s —

MARK:  What are the benefits —

LIBBY:  Yeah.

MARK:  — that come from this?

LIBBY:  So this is a great question, Mark.  I think one of the things we’re seeing at Beazley is that the area of ransomware has —

MARK:  Okay.

LIBBY:  — absolutely exploded.

MARK:  Yes.

LIBBY:  So this is a great example of how the exposures are changing and evolving in the marketplace. We are now seeing somewhere between 25 and 30 percent of the claims that we handle at the insurance company level are coming from ransomware attacks.

MARK:  Yeah.

LIBBY:  People are able to go out on the dark web, they’re able to buy the software that is malware, and they’re able to do an industrialized-sized explosion out into the marketplace through phishing emails.

MARK:  Right.

LIBBY:  And they’re capturing law firms.  They’re capturing retail establishments. I mean, they’re capturing small businesses whose employees inadvertently click on a malicious link and launch the ransomware. If your system gets hit with a ransomware attack, you can no longer access your files until you’ve paid the ransom, and if the criminal gives you the key back, you can unencrypt your system. That’s something that we didn’t see before, really, you know, the last 24 months, I would say.

MARK:  Right.

LIBBY:  So that’s an example —

MARK:  Okay.

LIBBY:  — of, you know, you can be a well-managed firm, but still have an exposure to a malicious event.

MARK:  And that’s a great example.  I mean, 2016 has been labeled as the year of ransomware and, yeah, I really see it as the year — or the rise of ransomware —

LIBBY:  Right.

MARK:  — that’s really come into the mainstream.

LIBBY:  Right.

MARK:  And this industrialization piece is absolutely spot-on. When I think about, okay, I know what my malpractice policy does, I have this general insurance policy and things, do I still have some gaps?  What would this policy —

LIBBY:  Yeah.

MARK:  Just in general —

LIBBY:  Yes.

MARK:  — what’s it going to do for me?

LIBBY:  So two things, two sides of the coin:  Do you have a gap in your other commercial insurance coverages, and the answer is yes.

MARK:  Okay.

LIBBY:  So the industry realized that they were having these events and around 2014 started to add exclusions to the business owners’ policy and the CGL policy. Cyber is not — cyber events are not considered professional services —

MARK:  Right.

LIBBY:  — so they weren’t considered under the professional policy.

MARK:  Makes sense.

LIBBY:  So a gap occurred.  So ALPS is offering an endorsement which offers information security and privacy, website media liability, PCI fines and penalties, business interruption, cyber extortion, data protection and some crime coverages, fraudulent instructions and computer crime.

MARK:  Right.

LIBBY:  So ALPS is trying to provide coverages for a series of events that happens when a breach occurs or a ransomware event occurs and the various losses that derive from that event.

MARK:  Okay.  Wow.  You know, I mean, when you really sit down and just start to think about it, you don’t fully appreciate all the fallout of an attack, and that’s spot-on.  I love it. In my own experience in terms of working with law firms that have had breaches over the years, one of the biggest concerns in terms of the financial loss seems to be just the funds. There’s wire fraud.  We’ve seen a lot of that. And these dollar figures can go sky high in a heartbeat. It’s my understanding that that is a loss that is difficult to insure.  Is that correct?  I mean, in terms of a small business being able to go out.

LIBBY:  Yes.  So the industry typically excludes the loss of money or securities out of the typical general liability BOP world. And also in the — certainly in the malpractice side, loss of funds isn’t covered. It’s an area that the industry is actually beating each other around the head about, to be honest with you, to find out who’s going to cover the loss —

MARK:  Yeah.

LIBBY:  — if a loss occurs.  And some — unfortunately, some law firms have found themselves without any coverage.

MARK:  Right.  Yes.

LIBBY:  Firms with large exposure to crime ought to be seeking a crime policy out in the marketplace, and we just had a conversation with someone who was going through that process —

MARK:  Yes.

LIBBY:  — and found that there were some markets that would do it up to $250,000 unlimited and one market that would do a million dollars.  That’s an individually underwritten approach.

MARK:  Okay.

LIBBY:  The ALPS’ endorsement that’s coming out offers a lower limit of crime protection that’s there, and for a small firm, that may be adequate. If in their evaluation, however, they think they have a much wider exposure, they should buy a crime policy in addition to this. (6:48-6:52)

MARK:  Okay.  And I agree with you.  I mean, I understand —

LIBBY:  Yeah.

MARK:  — I’d rather have some coverage than no coverage.

LIBBY:  Right.

MARK:  And when I’ve looked at a lot of cyber policies, you’re right, you know, these generally don’t cover any of the financial loss, and the fact that we have a little here is a great perk with the policy. But what I’m taking away is this –the ability to affordably insure for these kinds of risks for small businesses is a challenge —

LIBBY:  That’s true.

MARK:  — to say the least, which then takes me to the side, okay, so what do we do about that?  And it seems to me that the reality is getting proactive. I know that Beazley has some resources available.  Maybe you can share a quick – in terms of the website and what kinds of things I might find out there.

LIBBY:  Sure.  So as part of your — as a Beazley insured that has this coverage, we have an online website that provides the risk management — some of the risk management tools that you can put in place to manage the entirety of your cyber exposure including —

MARK:  Right.

LIBBY:  — loss of funds. I also know in our conversation you do a lot of risk management as well.

MARK:  Yes.

LIBBY:  I know you have some thoughts about this.  How do you think is best to manage?

MARK:  Well, honestly, the business standard in terms of what I’m seeing from even Microsoft down to a Ma and Pa shop, if you’re really going to get in front of cyber crime, cyber prevention is really what it’s all about. You know, I have been trying to advocate for years that we need ongoing regular training and just sit down with everyone in the office, from the most senior partner to the —

LIBBY:  Uh-huh.

MARK:  — you know, the part-time high school kid doing a little scanning in the summer, you know, that kind of thing because any one of these people can be the one that is tricked into doing something —

LIBBY:  Right.

MARK:  — you know, and I want to get ahead of it. So, to me, I want to use products like the insurance policy that Beazley offers, but I also want to look at the risk management tools and educational things and just sit down and do everything that I can to make sure that we don’t become the victim. Because at the end of the day, I mean, let’s be honest, IT can’t protect us from ourselves.

LIBBY:  Right.

MARK:  It’s all about securing the human.  So I think that’s it.  I thank you for listening. If you have any questions about the issue discussed today, please don’t hesitate to contact me at mbass@alpsnet.com.  We’d love your feedback on the podcast, including any other issues you’d like to hear us cover.