Avoiding Malpractice with Proper Documentation
Legal MalpracticeLawyers frequently fail to take the advice they give most often. The heart of most client consultations outside a litigation context is creation of proper documentation. Documentation suggested by a lawyer generally accomplishes several things for a client:
- Documenting can provide a checklist of things that should be done.
- Documenting can avoid difficulties with human recall.
- Documenting provides an opportunity to create good evidence in advance of a problem.
- When a bona fide problem arises, documentation often allows a matter to be resolved more quickly.
The need for documentation to avoid the legal consequences of a malpractice claim is similar. This article will discuss several of the most common types of documentation that we like to see in a legal malpractice case.
Before representation
Lawyers need a client intake form for several reasons. Client intake forms permit the lawyer to gather critical information necessary to decide whether or not to engage in the representation. Firms may have types of cases they do not want to take, and gathering information related to intake policies is an important step. Potential conflicts of interest can be identified based on information gathered on intake forms.
Client intake forms should not ask for every bit of information needed to carry out representation, but should instead be focused on gathering information sufficient to decide if the lawyer is willing to receive confidential information. Once confidential information has been received, a potential client is entitled to protection of the confidence, even if the lawyer subsequently rejects the matter.
If the lawyer declines to take a matter, the declination should be documented with a letter to the declined party. Many malpractice claims arise out of apparent misunderstandings about whether a lawyer has decided to accept the engagement.
Commencement of representation
If a lawyer decides to accept a matter, documentation is critical. The heart of an engagement letter or client contract should focus on:
- Client identity
- Scope of the engagement
- Fee arrangements
- Disclosure and consent to potential conflicts
Establishing client identity in initial documentation forces a lawyer to analyze confusing client situations up front. For example, when a group of persons seeks to form a corporation, the lawyer can determine whether one or more of the individuals should be the client, and can analyze if individual needs may conflict with the corporate interest. Another common situation that can be addressed is when a third party is paying for the legal services. A letter to the third party disclaiming any attorney client relationship can avoid claims that the lawyer failed to act in the interest of the third party. Establishing client identity may require disclaimers of representation as well as affirmative statements of identity in an engagement letter or contract.
The scope of the engagement must be established early, and may need to be altered as a matter progresses. The scope of engagement includes a definition of the tasks to be undertaken by the lawyer, the client, and by third parties. If the client has been warned in the engagement letter about the work they will have to do in connection with discovery, the chances that the lawyer will be sanctioned for the client’s lapses diminishes. When the services of an accountant are necessary to obtain the benefit of a tax reduction strategy such as formation of a Subchapter S corporation, including this in the scope of engagement documentation can avoid lawyer liability for the accountant’s errors.
Documenting the fee agreement is always a good idea, but is often required by the disciplinary rules as well. Contingent fee agreements must be in writing. Even when not required by the rules, the rules do suggest that putting fee arrangements in writing is preferable. Fee issues often are a prelude to client dissatisfaction and malpractice claims. When clients have multiple opportunities to understand the basis of fees, they are less likely to become dissatisfied and consider malpractice claims.
Documenting disclosure and consent to potential conflicts is not always required by the disciplinary rules, though it is required in certain situations. Even when not required, relying on oral discussion of potential conflicts is dangerous, as the client’s recollection is almost guaranteed not to match the lawyer’s recollection.
When client identity, scope of representation, fee arrangements and potential conflicts are documented, the lawyer must then act consistent with the documentation to gain full benefit of that documentation. Giving off hand advice beyond the scope of the initial representation after creation of the documentation can change the scope of the lawyer’s responsibilities. The issues addressed by engagement letters and contracts should be reconsidered as circumstances change. Too often, lawyers fail to understand that subsequent events can render terms of an engagement document meaningless. Addition of new parties to litigation should force a re-examination of conflict issues, for example.
Documentation during representation
As suggested above, initial documentation may need to be revisited during the representation. When unrepresented parties are encountered during the representation, it may be necessary to inform them that they are not clients and should seek separate counsel.
The advice given during representation should usually be documented. Clients may better understand the advice given if it is in writing as well as orally. In some cases, the client is given a range of alternatives and potential consequences. Making clear that there are advantages and disadvantages to various strategies can avoid claims that the lawyer failed to recommend a particular course of action.
One of the most critical times that advice should be documented is when it appears the client will not follow the advice. What will be remembered if your advice is oral is that you were the lawyer, and not that you advised the client differently than they acted.
Concluding representation
Whenever representation concludes, a letter clearly stating that no further services will be provided in connection with the matter is critical. Whether the matter has come to a natural conclusion or amounts to a withdrawal, it is important to make clear that the client must seek to engage the lawyer on any subsequent matter and that the lawyer is not assumed to be some sort of general counsel, if that is not the lawyer’s role.
When concluding a matter, a lawyer should detail what the client must do to obtain the benefits of representation and matters that must be addressed later. When a lawyer withdraws from a matter, the lawyer should provide the client with a detailed description of the status of the matter and urge them to seek other counsel.
If a lawyer firm has a file destruction policy, notify the client in a conclusion letter about when the file will be destroyed unless they want it. This can avoid the need to track down clients later.
