Even though professional liability insurance and cyber insurance can be extraordinarily expensive, and I will tell you that I spend more than a thousand dollars a month on professional liability insurance and quite a lot of money on cyber insurance. Don’t shortcut around this. I personally have an astonishingly large amount of professional liability insurance for small law firms, many multiples of what would be expected because I like to put my head on the pillow at the end of the night and know that I’ve done my very best and I am not going to worry about malpractice claims that will never materialize. It is absolutely worth it to me to have the peace of mind. And as I’ve hired young lawyers into my firm, those expenses have really gone up. It is absolutely well worth it. This is one area that I would not play games with. And so go ahead and get yourself all the professional liability insurance that you think that you can get.

Sometimes it can be hard to buy a lot of it, but I work on very substantial transactions that get into the nine figures. And so I am not messing around. You want to be very well covered with professional liability insurance. And cyber insurance is really something that wasn’t on my radar until I started to pay some attention to it, but you really need to make sure you’ve got adequate cyber insurance as well. What a lot of people don’t understand before they start their own law firms is that there are rules out there about what you need to do if you have a data breach. And a lot of it has to do with contacting clients and former clients whose data may have been exposed. And there is probably no better way to crash your law firm. Then they have to go out into the market and tell hundreds and hundreds of former clients that you may have just exposed their data to a breach.

And if you have to do that, then when you go out and you have to make those communications, you want to have in your corner a PR firm and a damage control expert, and you want to have somebody that knows how to write these letters and how to communicate in the right way and to try to minimize the damage. And so it’s not just that it’s good to have good cyber policy because it’s just best practices. It’s also, I think, really important to realize that there’s a ton of benefits that come along with the cyber policy. This entire SWAT team of people that would come and help you deal with a breach if you had one in terms of complying with your ethical obligations and communicating with current and former clients and others whose data may be exposed. So I would spare no expense on cyber or professional liability insurance as you set up your law firm.