A U.S. Government Memorandum dated March 22, 2025 (the memo) and its associated fact sheet, directed the U.S. attorney general and the secretary of Homeland Security to stringently enforce accountability measures against attorneys and law firms that had allegedly previously engaged in improper conduct. The memo stated an intent to address concerns about the misuse of the legal system, particularly when such misconduct threatens national security, public safety or election integrity. The administration also issued separate executive orders (EOs) specifically aimed at several high-profile law firms.
Law firms that are currently dealing with an EO, the possibility of an EO or have concerns about how they could be potentially affected by the situation, would be well advised to review their insurance policies and consider next steps. This article is intended as a first step toward exploring the intersection between these EOs and potential insurance coverage.
The memo directed the attorney general (AG) and the secretary of Homeland Security to take several key actions, including:
The EOs that were aimed at specific law firms direct various agencies to take certain actions against those firms, in most cases suspending federal security clearances for law firm personnel, cutting contracts between the firm and government, preventing the law firm from working directly with the federal government and its contractors and preventing law firm personnel from entering federal buildings.
The question of whether the EOs or actions taken by agencies as a result of the EOs constitute claims against law firms will depend on the exact language of a law firm’s lawyers’ professional liability (LPL) policies or management liability policies. One thing to keep in mind is that neither type of policy generally requires that claims be brought by clients or that they allege malpractice.
Law firms that are affected or potentially affected should consult their insurance brokers on the best course of action, which may include providing notice to carriers if only on a precautionary basis. Carriers that take the position that the EOs and related actions are not claims may be likely to accept notices as placeholders for potential future claims pursuant to notice of circumstance provisions in their policies.
Note that law firms generally do not have any obligation to provide notice before a claim is made against them, but if they elect to provide an optional notice of circumstance with sufficient detail, a subsequent claim that arises from those circumstances will have potential coverage under the current policy (even if the subsequent claim is not made until a later policy year).
If a law firm chooses to provide a notice of circumstance to a carrier, it may discuss with its broker various future claims that could arise from the situation, including potential claims by a law firm’s clients.
Any such notice of potential claims should ideally make clear that the law firm does not believe that any potential allegations discussed therein would be well founded or have a basis in fact. Nonetheless, it is possible that claims may arise from a law firm’s inability to timely respond to deadlines or failure to properly investigate due to restrictions placed by the EOs.
There may also be allegations that an attorney did not zealously represent a client due to concern about potential repercussions. Clients may also assert breach of contract for a firm’s failure to provide contracted for legal services as outlined in an engagement agreement or fraudulent inducement arising from failure to adequately disclose potential conflicts. Such allegations may also lead to demands for the return of fees paid to the firm.
Additionally, if an EO instructs a federal agency to rescind or terminate a contract because an affected entity is represented by a certain firm, then there may be a claim against a law firm for tortious interference with a contract. A client may also claim that an attorney and law firm withdrawing from affected representation in an untimely manner has caused harm to them. These examples are not the totality of potential claims and should not be understood as such.
It is also possible that the existence of a relevant EO and the law firm’s actions in response could lead to employment practices liability claims. As a result, law firms should consider discussing how to address these risks and other insured risks with their broker as well.
A law firm may experience serious financial and reputational harms if it is targeted by an EO for the past acts of its attorneys. Regardless of whether a law firm chooses to settle or challenge the EO, it may lose current and prospective clients.
Law firms that have been faced with EOs or the threat of an EO may have to make difficult decisions regarding how they respond. Other law firms may want to consider proactively their exposure to an EO. In either case, law firms should not forget to consider their insurance policies, how they might be affected and how they might provide assistance to law firms in these situations. It is never too soon to discuss potential exposures and potentially relevant insurance coverage with your insurance brokers.
WTW hopes you found the general information provided in this publication informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, WTW offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).
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