It’s often unfortunate for both a law department and a firm when the department stops using the firm; it’s worse when a department takes away pending matters from a firm but sometimes transitions are justified; it’s downright disastrous when a law department sues a firm for malpractice.
That is what happened eight to ten years ago, as related by Starwood Hotels & Resorts General Counsel, Ken Siegel, in SuperLawyers, Bus. Ed. 2011 at 76. The suit created new law because Siegel claimed breach of contract – “the first time anyone had done so to try to prove legal malpractice.” I wonder whether law firms that sign to indicate their agreement to outside counsel guidelines have accepted contractual risks that had not been present before (See my post of Nov. 8, 2009: malpractice of law firms with 8 references.).