Why Proper Documentation and Management is Critical to Your Practice

It’s not uncommon for lawyers to neglect properly documenting their files. Attorneys often cite lack of time or wanting to keep costs down for not doing so. And yet, lack of documentation is part of many malpractice claims. In this Article, we cover why proper and thorough file documentation are essential parts of preventing and defending any malpractice claims, what should be documented to avoid some common documentation traps and a few practical tips on taking better notes and file management.

WHY PROPER FILE DOCUMENTATION AND MANAGEMENT IS ESSENTIAL

Proper documentation may help ward off a legal malpractice claim and help defend against one. Here’s a hypothetical. Lawyer was retained for a contested divorce. The lawyer did not draw up a fee agreement or engagement letter. The divorce went to mediation, but the lawyer didn’t draft a mediation statement. The lawyer recalls advising the client it was not a favorable settlement, but the client wanted to accept the offer and be done with it. The attorney drafted the documents for signature, but failed to provide a letter to the client explaining the documents. Instead of signing the documents, the client retained another lawyer who obtained a more favorable outcome. The client did not pay the attorney, and the attorney sent the bill to collections. The client then sued for malpractice.

Now the attorney is faced with two options: attempting to settle the case or going to trial. Without sufficient documentation to support the lawyer’s account, the legal malpractice action may turn on whether the fact finder believes the testimony of the attorney or the client. In this type of scenario, it is often less costly to settle the claim.

Additionally, an attorney can jeopardize the success of the client’s case, increase the risk of missed deadlines and malpractice claims by misplacing, losing or failing to properly label files. All scenarios which are largely preventable had an organized internal filing system been in place. Moreover, organized files are cost-effective and efficient.

WHAT SHOULD BE DOCUMENTED

Here are some tips to help avoid falling into some common documentation traps.

Document the commencement, scope and termination of representation. Be sure to use an engagement letter to document when the representation of a client begins, who the client is, and the scope of representation to avoid any misunderstanding of what you will do for the client and when. With every new matter, take the time to clarify and document the mutual understanding between you and your client regarding the scope of representation. This may include specifically identifying who is not the client (e.g. individual vs. company, other members of LLC) and what you will not be doing (e.g. tax advice in estate matters, appellate work after a trial). Failing to properly document scope is one common misstep that malpractice insurers address each year. Yes, proper documentation takes time, but is ultimately far less time consuming (and expensive) than dealing with a malpractice claim. It’s important to keep in mind that if it is not part of a written file, the client could make the argument that it did not happen. It is inevitable that recollections will often differ.

Use a disengagement letter to document the termination of the attorney-client relationship when the matter is concluded or for other reasons (e.g. the client does not have the resources to pursue the matter further). If the attorney fails to send the client a disengagement letter, the client could later allege that the attorney failed to work on the case before the statute of limitations had run. You can read more on terminating the attorney-client relationship here.

A non engagement letter should be used when an attorney declines to represent a prospective client or when a prospective client decides not to pursue the matter. The non engagement letter documents that an attorney-client relationship does not exist and that the lawyer is not responsible for any deadlines or statute of limitations in the matter. The letter will protect the attorney if the prospective client later brings a malpractice suit alleging that the attorney had agreed to handle the case but neglected to do so.

Document the client’s instructions and lawyer’s advice. Another common error attorneys make is failing to document all advice given to the client. An example is a client who is so cost conscious that it limits the scope of representation. If the attorney fails to advise the client in writing of the implications of these limitations, the client could later argue that he would never have limited the scope of representation had he been aware of the risk of a less favorable outcome.

It’s critical to remember to follow up with a letter or email to the client documenting any advice given, options available to the client and the client’s instructions. Decisions about settlement, authority to settle, dismissal or appeal should all be documented. This will be particularly important if the client does not get the desired result.

Document important conversations with clients, opposing parties, and the parties involved. This will also serve as evidence to help resolve any claims for malpractice. This should include: the date (including the year), form of the communication (telephone, in person, email), list of all persons present, the substance of what was discussed or decided, and the follow-up action for which the attorney is or is not responsible.

Document major events and milestones. When a material event takes place concerning a client’s file, this should be documented and placed in the file. If communicated in person or by phone, notes should be written to the file and a confirming letter sent to the client. An attorney’s contemporaneous notes may be what ultimately sways a judge or jury in a malpractice case if the attorney and former client have differing testimony as to what was stated orally.

PRACTICAL TIPS FOR TAKING BETTER NOTES

Here are some practical tips on how to make yourself a regular note taker and how to follow up on your notes.

Make a Template. Download a form to take your notes on. This will help ensure your notes include all necessary information every time.

Get into a Routine. Get in the habit of taking notes for a few minutes after each meeting, client matter, or project. You can set a timer to review your notes to make sure you have included every necessary detail.

Keep a Notes File for Each Matter. Make sure one of the folders you create for each client file is a “notes” file. Every time you take notes, it should immediately be placed in the right file. This will help you locate them quickly. You can easily review your chronological notes and the takeaways on each to see the status of the matter. Keep notes relevant to the matter and avoid writing any unprofessional comments because the notes may later be seen by others if the client requests their file or it is produced as evidence in a malpractice action.

A FEW TIPS ON DOCUMENT MANAGEMENT AND RETENTION

The benefits of proper documentation will be limited if the files are misplaced, lost or prematurely destroyed. Here are some guidelines for better document management and retention.

Implement a system to organize, store and retrieve your files. Regardless of size, every law practice should have a uniform file organization system.

Be thorough when closing a client file. Attorney notes, drafts, memos, substantive emails and bills should be preserved.

Avoid the Temptation to simply hand over the client file without making a copy. Take the time to review and prepare the file for delivery to the client and make a copy for your own records. If you fail to keep your own records, a significant problem may be waiting down the road.

Avoid destroying files after a short period of time. No matter the motivation (keeping storage costs down, thinking the matter ended successfully or that the client cannot prove a malpractice claim without a file), keep your files for a reasonable amount of time. You can find our article on when and how you can destroy client files here.

Consider Going Paperless. Legal file management software can provide instant access to information, help you maintain schedules, and improve communication.

CONCLUSION

Proper documentation and management are certainly not the most exciting parts of practicing law, but are essential to operating efficiently and preventing legal malpractice claims.

By Lauren Bianchini