This is an interesting issue as some policies actually contain a business advice exclusion but some courts seem to suggest that lawyers must render some form of business advice as part of their representation.
This latest edition of The Lawyers’ Lawyer Newsletter discusses a situation where a company was defrauded out of nearly $5 Million after an employee in their finance department initiated a wire transfer that was purportedly authorized by the company president but was in fact requested by a fraudulent actor posing as the president. In recent months, numerous law firms have received similar fraudulent wire requests.
Theo Nittis, Gemini Risk Partners Principal, was quoted in the March 2019 issue of the Michigan Bar Journal, in an article on bad faith insurance practices. The article was written by Adam Kutinsky of the Bloomfield Hills law firm Dawda Mann.
To view the article, click here.
Here’s an important update about phishing attacks that have been affecting law firms recently.
This past week, David Kramer spoke to the Palm Beach County Association of Legal Administrators on Ethical and Practical Firm Management Considerations. The presentation included risk management tips for law firms as well as a discussion of actual claims scenarios experienced by law firms. Please let us know if you are interested in having a similar presentation conducted for your law firm or legal trade organization!
Cyber Fraud Against Law Firms
Below are links to two stories about a recent cyber fraud perpetrated against one of the world’s largest law firms, Dentons. In short, the firm inadvertently transferred $2.5M in client funds to a fraudulent account and then subsequently attempted to make an insurance claim under the firm’s cyber insurance policy for the lost funds. Though the firm had cyber insurance, they did not purchase a social engineering rider who provides for coverage when an insured is fraudulently induced to voluntarily part with monies and therefore, coverage was denied. This unfortunate incident highlights the importance of verifying all wire instructions via a phone call and the importance of social engineering coverage which can be purchased as part of a firm’s crime and/or cyber policy.