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Small Firm Startup: Cheap Malpractice Insurance is a Must

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By William Peacock, Esq. on February 11, 2013 9:03 AM

You’re starting to get what this series is about, right? We talked about what tech supplies you’ll need. We also discussed whether you need an office and other places to work if you lack one.

You’ve got the digs located, the computers set-up, and are ready to get started. You’re not completely ready for clients though, are you? That’s right - you forgot the malpractice insurance, didn’t you?

Whether it is required by your state bar or not, malpractice insurance is a must. No matter if you are Clarence Darrow or Franklin & Bash, eventually, some ungrateful twit dissatisfied client is going to sue you. It's one of those unfortunate facts of life, right next to the eternal "Don't worry - things will get worse."

The mission here is to start this hypothetical firm as cheaply as possible, without sacrificing your ability to provide excellent service and representation to your clients. So where do you go to find cheap, yet not too shady malpractice insurance?

Start with the state bar. MyShingle guru Carolyn Elefant is correct in saying that it shouldn't be your last stop - comparison shopping is a must. Some state bars apparently make their "official provider" whomever will pay for the privilege, but at least you'll have a baseline for reference.

However, some state bars, like our dear California, have bar-sponsored programs that are ridiculously cheap. California's Strong Start program is only $500 for your first year as a solo, $1,000 for your second, etc. It also provides free MCLE credit. The only catch is that you must do certain free MCLE's (likely on how to avoid being sued) and you can't partner up with others - this is for sole practitioners only.

Local bar associations might be an even better resource than the state bar, especially if you belong to a practice or social group. Ask your fellow members who they went with and who to avoid. Gather a few names, get quotes, check online for any red flags. Rinse, and repeat.

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