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The risk of being the subject of a legal malpractice claim is a major worry for every attorney and law practice. Over the next ten months, this series will present ten steps—one step each month—to help attorneys and law practices reduce this risk. Each article will provide practical guidance using proven techniques that every attorney and law practice can use. Following is a general summary of what will be presented, beginning in the December 2014 issue.
Simple routine questions systematically asked by attorneys offer the best opportunity for identifying and avoiding “problem clients” before it is too late. No attorney, however careful, can entirely eliminate the risks of a problem client. Yet, for the most part, attorneys often know early in the relationship which potential clients are just too risky to represent. Moreover, attorneys never want to turn away business.
This article will identify some of the basic questions every attorney should ask before accepting a new client. As part of standard file-opening procedures, these questions integrate the essential tasks of client screening as one prerequisite for opening a file and reducing the risk of the problem client.
No issue creates more unexpected exposure for attorneys and law practices than conflicts of interest. As a result, identifying and resolving conflicts should be a mandatory step before any attorney–client relationship begins. This article will discuss the two kinds of conflicts—successive representations (involving former clients) and multiple representations (involving more than one current client). If the conflict is just a potential conflict, then it can be waived with full disclosure and client consent.
This article will include the topics for full disclosure and the requirements for effective client consent. It also will address actual conflicts. Documentation is an important part of any effective conflict resolution process. The best standard file-opening procedures make conflict resolution a second prerequisite for opening a file.
Fee disputes comprise a significant percentage of malpractice claims. As a result, the Colorado Rules of Professional Conduct require that the attorney disclose the basis or rate of the attorney’s fee and expenses to any client whom the attorney does not regularly represent. Similarly, Colorado attorneys must provide their clients written notification of any changes in the basis or rate of the attorney’s fee or expenses.
This article will address the essential elements of a fee agreement and boundaries for what attorneys can and cannot do. There are instances where a retainer may be involved. Discussion also will include the steps to ensure that the funds are treated as trust funds until the fees are earned.
Few actions by law practices yield as much protection against future claims as drafting written fee agreements and/or engagement letters. These documents can define the boundaries of the representation and identify the remedies if and when problems arise. As a result, when disputes occur, these documents remain the most effective tools for confirming exactly what the attorney and the client agreed to at the beginning of the representation.
This article will address some of the key elements that should be included in every engagement agreement, such as the identity of the client, the scope of the representation, the fee, the process for withdrawal, a non-assignability clause, and the attorney’s protocols for document retention. Every file should have either an executed fee contract or an executed (by both attorney and client) engagement or retainer letter.
Virtually every attorney uses a calendaring system for deadlines. Unfortunately, when it comes to managing the day-to-day details of the representation itself, many attorneys may be less diligent and rely instead on informal and less reliable tools for keeping up with the workload, such as piles of documents strategically placed around the office or innumerable e-mails in the inbox. These “practice habits” create unnecessary risks of becoming the subject of a malpractice claim due to a missed deadline. This article will address effective calendaring systems that use everything from the file-opening materials to billing cycles to docket control systems.
Although universally recognized, the duty to maintain client confidences and secrets often receives the least amount of attention from attorneys until it is too late. Indeed, a year rarely goes by without there being a high-profile bar grievance or legal malpractice suit based on an impermissible disclosure of privileged or protected information. This article will address two tools for avoiding the risk: (1) the adoption of protocols, practices, and procedures for protecting client confidences and secrets; and (2) training attorneys and personnel on the importance of and procedures for protecting client confidences and secrets.
There are tools such as “Google alerts” that permit attorneys to stay abreast of exactly what is happening with their clients and with their own firm. Docket services permit attorneys to learn (often before their client) when clients have been sued. There is no good reason not to take advantage of these services, and there are lots of good reasons to take advantage of them. What attorney would not want to be one of the first to know that his or her client has filed bankruptcy, been arrested, or been acquired? This article will address a number of tools that cost nothing, but should be part of every modern law practice.
One thing has become obvious: Ignoring problem client relationships rarely makes them go away. Instead, detecting problems and addressing them are important parts of preventing bad situations from becoming malpractice nightmares. Written client complaints, refusals to pay bills, or unexpected second opinions from other attorneys can all be signs of a problem. This article addresses how to respond and what to do if the problems cannot be resolved.
The article also will address what happens when things do not work out—that is, either the relationship cannot be repaired or the client cannot or will not pay for the services. The rules for withdrawal are relatively straightforward. The important thing is that attorneys end relationships that are on a one-way street to trouble. To effectively and legally end the relationship, follow the rules for withdrawal.
One of the most important but often overlooked steps in malpractice claim prevention is closing files. This step transitions a client from being a current client to being a former client for purposes of the conflict of interest rules. It also impacts the statute of limitations so that the risks of a claim do not remain forever. It ends the attorney’s duty to take further action for which the client will not pay. It does not have to be complicated, but it does need to happen. This article will address the file-closing letter—its content and when it should be sent.
Sometimes, even the best systems cannot prevent a claim. Mistakes happen. Other times, a client simply is intent on bringing a claim.
This article will address what to do when those situations occur. It will address what to tell the client, when to report to the legal malpractice insurer, and how to protect internal communications about the claim. A mistake in any of these areas can make things much worse. Thus, this article will outline the specific steps to take when a claim is made.
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