Written By:
David A. Grossbaum, Esq.
David is a partner in the Boston and Providence offices of Hinshaw & Culbertson LLP. He represents lawyers in legal malpractice cases, represents insurers in coverage disputes, and lectures on risk management for lawyers. He can be reached at dgrossbaum@hinshawlaw.com
These days it is easier than ever for clients to claim that they started an attorney-client relationship with a lawyer. That is because lawyers receive numerous unsolicited requests for advice through websites, e-mails, lawyer directories, text messages, blogs, Facebook, Linked In and other forms of social media. More traditionally, a lawyer may meet with a prospective client, examine the client’s documents, and decide not to take the case. Nonetheless, clients may claim reliance on a lawyer’s comments, even before the lawyer thinks he or she has been hired. Indeed, an attorney-client relationship can be implied where the person seeks the lawyer’s advice and received it, even without an express engagement agreement.
Once that person has become a prospective client, the obligations of confidentiality are triggered and the conflict of interest prohibitions also come into effect. This can create ethical and disciplinary problems, as well as malpractice problems. At a minimum, it can cost the lawyer a client who would be adverse to the prospective client.
The risk management lesson here is to understand the rules about prospective clients. Moreover, there are ways to prevent that tire-kicker from becoming a prospective client before you are ready.
I. The Obligation of Confidentiality and the Conflict of Interest Rules Apply to Prospective Clients, Too.
The Rules of Professional Conduct impose obligations of confidentiality on a lawyer who has discussed a legal matter with a prospective client, and those obligations can prevent a lawyer from taking on a representation adverse to the prospective client. Model Rule of Professional Conduct 1.18 states explicitly that “(a) A person who discusses with a lawyer the possibility of forming a client-lawyer relationship with respect to a matter is a prospective client” and that a lawyer cannot “use or reveal information learned in the consultation,” except if the information involves a former client and that client gives informed consent in writing (emphasis added).
If a lawyer has acquired confidential information from a prospective client, the lawyer cannot represent another client with interests adverse to that prospective client “in the same or a substantially related matter if the lawyer received information from the prospective client that could be significantly harmful to that person in the matter.” Model Rule 1.18(c).
And you cannot necessarily screen yourself off from the adverse representation through an ethical wall. Instead, the only way your firm can be involved is if both the prospective client and actual adverse client provide informed consent in writing, or if you took “reasonable measures to avoid exposure to more disqualifying information than was reasonably necessary to determine whether to represent the prospective client,” you are timely screened from the matter in your firm, you receive no part of the fee, and you notify the prospective client in writing. Model Rule 1.18 (d).
II. Ways to Avoid Creating an Attorney-Prospective Client Relationship
In order to make sure that you do not open yourself up to a claim of legal malpractice, a disciplinary complaint, or lose a good case based on a casual on-line conversation or other communication, make sure you set ground rules before you hear anything or read anything. If you get an unsolicited telephone call, you will need to control the flow of information, not just sit there and listen until you have heard too much. Take the initiative to find out how the caller got your name, the general type of case involved and which side of the case the person is on, such as plaintiff or defendant, buyer or seller, employer or employee. If your practice is devoted to representing only one side or the other, then you will know right away if the call is going somewhere. Also, find out who the potential parties to the case will be before you get any other information. This might allow you to know if you have a conflict before getting any confidential information that might disqualify you.
If you know that you cannot handle the case at this point, the best practice is to send a confirming written communication stating at least the following: 1) the person has not retained your services as a lawyer; 2) you have not provided legal advice to the prospective client on the matter; 3) you have not heard any confidential information about the matter; 4) the person should hire an attorney to obtain legal advice as to the matter; and 5) there may be deadlines, including statutes of limitations, that may apply in order for the prospective client to assert their legal rights and they need to seek immediate advice from a lawyer as to these deadlines.
Of course, this is harder if you get an unsolicited e-mail that contains confidential material in it. If you get these types of solicitations through a website, the ABA recommends the use of warning or cautionary statements to limit, condition or disclaim a lawyer’s obligations to website visitors. American Bar Association Formal Opinion 10-457 (2010). These limitations will be effective only if reasonably understandable, properly placed, and not misleading. The appropriate information should be conspicuously placed to assure that the read is likely to see it before proceeding. For example, lawyers may want to use “click through” pages that automatically direct the reader to another webpage containing disclaimers to ensure that visitors are not mislead and that the communication does not automatically start an attorney-client relationship.
III. How to End the Attorney- Prospective Client Relationship
If you have solicited and received confidential information as part considering whether you want to take a case, and you decide not to take it, you should convey that message to the prospective client in writing. This letter should contain much of the same information in the letter you send to the person who did not become a prospective client: 1) you were never hired to represent that person; 2) you have not rendered any legal advice; 3) you recommend that the person consult another lawyer about the matter; and 4) there could be deadlines with which the person needs to comply to protect their interests. Doing this will make clear that the person is no longer a prospective client. This could have significant impact on the limitations imposed by the conflict of interest rules, which treat current and former clients very differently.
IV. How to End an Actual Attorney-Client Relationship Before the Matter is Concluded
If you enter a full-fledged attorney client relationship, and you (or the client) decide that it should end before the client’s legal matter is over, you will also need to be mindful of the Rules of Professional Conduct, and your obligations to return the client’s property and protect their interests. The best way to prove that you have complied with these obligations is to set them forth in a letter in which you formally terminate the attorney-client relationship.
To begin with, you must terminate the relationship under Model Rule of Professional Conduct 1.16 if: “(1) the representation will result in violation of the rules of professional conduct or other law; (2) the lawyer's physical or mental condition materially impairs the lawyer's ability to represent the client; or (3) the lawyer is discharged.”
You have the option to withdraw in many other situations: 1) you can do so without adversely impacting the client’s
interests; (2) the client is utilizing your services in a way you think is “criminal or fraudulent”; (3) the client has actually used your services to “perpetrate a crime or fraud”; (4) your client takes action you consider “repugnant” or with which you have “a fundamental disagreement”; (5) the client does not fulfill their obligations to you under your agreement with them, and you have given reasonable warning that you will withdraw; (6) the representation has become “an unreasonable financial burden” or it has been rendered “unreasonably difficult by the client”; or (7) “other good cause for withdrawal exists.” Model Rule of Professional Conduct 1.16(b). If you are representing the client in a litigated matter, you will likely have to seek approval of the Court, if the rules require that. Model Rule of Professional Conduct 1.16(c).
Beyond that, however, you will need to take reasonable steps to protect the client’s interests, including giving the client time to hire a new lawyer, giving the client, “papers and property to which the client is entitled . . . ,” and refunding any unearned advance fee payments. Model Rule of Professional Conduct 1.16(d).
With respect to surrendering “papers and property to which the client is entitled …,” individual states have their own rules that may apply here. Some states may allow the lawyer to withhold papers that reflect work for which the client has not paid. Nonetheless, the guiding principle should be to make sure the client is not harmed in the transition to a new lawyer, or simply out of the attorney-client relationship they were in previously. In many cases, the client will be entitled to the original file. You can, however, make and retain a copy of it at your own expense.
V. How to End the Relationship When the Matter is Over
When the matter is completed, and your representation is at an end, you should send a closing letter. These are important because it will terminate your further obligations in the matter, can start the statute of limitations running on any legal malpractice claim, and make clear to the client that you are no longer protecting their interests. It will also convert a “current” client into a “ former” client for conflicts of interest purposes. Moreover, it starts the running of the period for keeping the client’s file, and it will force you to make a final accounting of any money or property you are holding belonging for the client.
CONCLUSION
Making sure that you are aware of and control the start of a professional relationship, and understand your ethical obligations at each stage of the relationship is an important risk management tool. Similarly, taking steps to properly end that relationship are equally important ways to prevent problems created when your understanding of the relationship is different that the other person’s understanding. There is nothing like a written communication to clear up the confusion.