By Charles V. Berwanger
Gordon Rees Scully Mansukhani, LLP
Like any contract, an agreement to provide legal services requires there to be a “meeting of the minds.” Put another way, the parties must agree on what each party must do to perform. When representing a client, it may be of equal or greater importance for a lawyer to identify what he or she will not do. This article will address the following two scenarios:
1. Attorney has been asked by client to provide representation in a negligence lawsuit and attorney wants to exclude all post-trial matters. If the matter is to be handled on a contingent fee basis, Business and Professions Code section 6147 imposes several requirements that are specifically geared towards regulating the financial relationship between attorney and client. For non-contingent fee matters involving more than $1000 in fees and expenses, Business and Professions Code section 6148 requires the agreement to set forth, among other things, the general nature of legal services to be provided and the responsibilities of the attorney and client under the agreement. This column will address the propriety of using representation limiting provisions in an engagement agreement.
2. The second scenario arises from what may be termed the “accidental client.” One example: an attorney confers with a potential client but declines to enter into an attorney-client relationship, yet faces the not insubstantial risk the “potential client” claims to have been given legal advice, or was deprived of needed legal advice, and a malpractice action is commenced. This article will also address the wisdom of using of non-engagement letters.
Limiting the Scope of the Engagement
Attorneys may seek to limit the scope of their representation, and any such limitation must be delineated with care in a written engagement agreement. Limitations on the representation of a client include not only avoiding having to represent a client on appeal, but also making a so-called “special appearance,” preparing “one-shot” pleadings or transaction documents, representing a client only during the mediation of a lawsuit, and a myriad of other possibilities. An attorney who seeks to limit the scope of a representation must ensure the limitations on the representation are clear and understood by the client, so that if the client later alleges malpractice based upon a failure by the attorney to perform services which the attorney intended to exclude from the representation, the attorney has written proof of such limitations.
The Rules of Professional Conduct also apply. Rule 1.2 is entitled “Scope of Representation and Allocation of Authority” and provides, in pertinent part, that “a lawyer may limit the scope of the representation if the limitation is reasonable under the circumstances, is not otherwise prohibited by law, and the client gives informed consent.” Rule 1.0.1(e) provides that “‘informed consent’ means a person’s agreement to a proposed course of conduct after the lawyer has communicated and explained (i) all relevant circumstances and (ii) the material risks, including any actual and reasonably foreseeable adverse consequences of the proposed course of conduct.” See Nichols v. Keller (1993) 15 Cal. App. 4th 1672, 1684 (The attorney need not advise and caution of every possible alternative, but only of those that may result in adverse consequences if not considered.). Also applicable are California Rules of Court 3.35-3.37 [limited scope rules applicable in civil matters generally], and 5.425 [a limited scope rule applicable in family law matters].
The “unbundling” of legal services, also known as “limited scope representation,” is an increasingly common form of practice. “Unbundling” refers to an arrangement where the lawyer agrees to some, but not all, the legal services that are usually completed during a representation.
For example, “limited scope representation” is defined as “a relationship between an attorney and a person seeking legal services in which they have agreed that the scope of legal services will be limited to specific tasks that the attorney will perform for the person.” [California Rule of Court, rule 3.35 (a)]. The American Bar Association litigation section published a “Handbook on Limited Scope of Legal Assistance” that includes numerous examples of limited scope engagement contracts. The handbook may be downloaded at: https://www.americanbar.org/content/dam/aba/administrative/legal_aid_indigent_defendants/ls_sclaid_handbook_on_limited_scope_legal_assistance.authcheckdam.pdf.
The Non-engagement Letter
We are all aware that a casual conversation at a cocktail party, for example, or an introductory meeting with an individual who may not be an appropriate client can nonetheless lead to a malpractice claim against the unwitting attorney. For example, a casual contact between an attorney and another party may give rise to the creation of an attorney – client relationship. (Brydonjack v. Rieck (1935) 5 Cal. App. 2d 219, 222-223.) When a party consults an attorney (possibly over cocktails at a party) and secures legal advice, the relation of attorney and client may be established. (Matter of Peavey (Rev. Dept. 2002) 4 Cal. State Bar Ct. Rptr. 483. 489.) Depending on the circumstances, the initial consultation between a lawyer and a prospective client may unintentionally give rise to an attorney-client relationship. (Miller v. Metzinger (1979) 91 Cal. App.3d 31, 40).
Malpractice claims by someone an attorney never even considered a client may pose a substantial liability risk. Because of this, the non-engagement letter should not only be a principal part of the client-intake process, but also a necessary follow-up to that cocktail party conversation where the attorney – perhaps in a well-intended but ill-advised moment of weakness – opined on a legal issue to a fellow partygoer.
To protect both a client and oneself, it is vital that a lawyer exercises care when drafting the all-important written engagement agreement and, in particular, when accurately describing the scope of the representation and any limits thereon, as well providing any necessary information to the client regarding the possible ill effects that may attend the limited scope of the representation. The non-engagement letter is also an important component of the lawyer’s self-defense against claims made by an “accidental client.”
This is an excellent summary of an important issue! I would only add two, related points.
First, every fee agreement should also clearly state exactly who the client is, and who the client is not (e.g. husband, but not wife, or corporation, but no shareholders or officers).
Second, I strongly encourage all lawyers to send out “termination letters” whenever any engagement has ended. This is important for a number of reasons, not the least of which is such letters will commence the one year statute of limitations on any potential malpractice claims.