Of all classes of attorneys, those who handle real estate transactions are some of the most vulnerable to a legal malpractice suit. We have previously posted about the trend highlighted by the ABA that a higher percentage of professional liability claims arise from real estate dealings than almost any other class of attorney. A recent suit out of South Carolina serves as yet another reminder.

Some jurisdictions require that a would-be buyer engage counsel to proceed with a real estate transaction. Although closings are often billed at a relatively modest flat fee, they can ironically lead to the most claims. Perhaps there is a hidden defect with the property, or maybe the buyer is otherwise dissatisfied or simply suffering from buyer’s remorse. These factors and others can lead to a malpractice claim along with a suit against the seller. Although counsel for the buyer has virtually no responsibility for evaluating the condition of the property, counsel is still a vulnerable target.

The recent South Carolina case addresses another issue. As alleged, closing counsel’s negligence caused or contributed to roughly $400,000 of closing costs diverted to a fraudster. The purchaser has targeted her title company along with counsel and claimed that the negligence, in the form of entirely lax wire transfer protocols, led to wire fraud. As alleged, counsel operated as a “closing mill” that effectively stripped counsel with control of the transaction and subjected it to risk of fraud.

It is no secret that cybercrime is a risk. Likewise, it is no secret that real estate attorneys are particularly vulnerable. This recent example highlights the intersection of both.