When moving from associate to partner, focus on ethics of new leadership role
Making partner is an important career milestone for practicing lawyers. With better pay, bigger offices and several perks that come with the prestigious promotion, many associates look forward to the day when their hard work is awarded with a partnership offer.
But becoming partner means more potential for problems as well as perks. Many associates don’t realize the risks and ethical responsibilities associated with the position.
In the presentation “Ethics for New Partners: Understanding Professional Liability Risks and Exposure,” Patrick Minter, shareholder of the law firm Graham Curtin, and Laurie Carr Mims, partner at the law firm Keker and Van Nest LLP, shared 10 tips for how new partners can ensure they are operating ethically while fulfilling the demands that come with a partnership.
- Know the different types of partnership and the liability risks. “The first thing you really need to do when you get that notice that you became partner is you need to take a look at that agreement,” said Minter, a lawyer who defends other lawyers in legal malpractice cases. Different partnership structures have varying levels of exposure risk, so potential partners must be aware of what their liabilities will be. A law firm partnership can be a professional corporation, a limited liability company, a limited liability partnership or a general partnership. A general partnership carries the most liability and offers a partner the least amount of protection, he said. Minter encouraged lawyers to “discern what the corporate or partnership makeup is and how it affects your personal exposure risk” and to understand the local and state rules that detail potential exposures.
- Resist the “temptation to dabble” in order to secure new business. When new partners feel pressure to accept new business that is outside their realm of legal experience, it can put the lawyer and the firm in a bad spot — especially if they face an opposing firm with a laser-like focus on that area of the law. Minter said it’s a good way to get “steamrolled” and opens the door to legal malpractice claims. Areas that Minter identified as dangerous to “dabble” include estate planning, residential real estate, out-of-state cases, federal tort claims act cases, matrimonial cases and tax advice. He recommended that new partners stick with their skill set and build referral relationships both within and outside the firm for when these types of cases come to them.
- Conduct a proper and thorough intake review for every prospective client. As a lawyer who works on professional negligence cases, Mims can attest to times when partners didn’t do their due diligence to uncover skeletons in a potential client’s closet. Referring to them as a “ticking time-bomb client,” she encouraged attorneys to examine whether other law firms have already engaged with the client. “If the client fires the previous counsel and does not provide information for you to accurately vet that termination, that is a red flag,” Mims said. Mims added that the “unsolicited, unconnected potential client that reaches out” can be a potential for disaster, so a responsible partner should always do a credit check, Web search and other information gathering before taking on the representation. If the law firm has risk management or in-house general counsel, she recommended also reaching out to them to get a proper assessment.
- Write clear and detailed engagement letters. Engagement letters, or retainer agreements, are written to establish the scope of work and the expectations for legal representation. The agreement “specifies who is the client and, maybe more importantly, who is not the client,” Mims explained. The need for this distinction arises often in situations when there are multiple corporate entities. “If you specifically note that employees, officers and directors are not clients, that can protect you,” she said. The engagement letter should also state when and how much clients will pay. Mims advised being thorough and very obvious in the agreement in order to have clear expectations of what is covered and what is not. If the agreement expands, the engagement letter can be revised so that it accurately reflects the proposed representation.
- Avoid conflicts of interest. Many loss prevention and risk management claims that get to the lawsuit stage stem from a conflict of interest. “Juries hate nothing more than lawyers who seem to not understand conflict of interest and seem out for their own self-interest,” Mims warned. If a new partner ends up disqualified from a case over conflict of interest, Mims said, the firm usually has to absorb the fees. She stressed that a conflict check has to happen before any engagement or substantive conversation and that firms have been disqualified for a 15-minute discussion a partner had with an adverse party. In a concurrent conflict, Mims said that best practice is to obtain written consent to the representation of each affected client.
- Become a responsive and attentive supervisor. New partners often become responsible for the work and management of associates, and Minter encouraged them to embrace the new role by being dependable and accessible. “Have an open-door policy with any of the associates that work for you,” he said. Through open communication and clear instructions ― such as an in-person meeting followed up by an email confirming tasks ― new partners can ensure that the work is being executed properly by their subordinates. Minter recommended asking to be copied on all associates’ correspondence as a strategy to passively monitor their work.
- Maintain constant communication with clients. Lawyers have a duty to communicate frequently with their clients. Many malpractice claims stem from improper, incomplete or insufficient communication with clients, Minter said. The simplest way to avoid this is with email correspondence. “Email is the perfect way to communicate with the clients because it’s easy to do, it’s easy to do frequently, it is time and date stamped to prove it was sent,” Minter explained. “It increases our ability to communicate with the client but also helps us practice defensively.” It is also a partner’s responsibility to communicate the bad news as well as the progress, he said. Another simple rule of thumb for all client communication is “never overpromise and under-deliver.” Minter recalled his first malpractice case in which an associate told a client in the initial meeting that the case would be “a slam dunk.” He suggested telling clients the cold-hard reality and updating the analysis as the transaction or case goes forward.
- Establish consistent and concise billing practices. It may sound obvious, but sending bills and receiving payment in response is crucial to the profitability of a law firm. Through responsible and clear billing practices, firms can receive the appropriate payment for services and avoid fee disputes with clients. “Billing disputes with clients are complete fertile ground for malpractice claims,” Minter said. “The more information you can give in your bills, the better.” A crucial partner responsibility is to avoid exposures by exercising financial responsibility and timeliness.
- Uphold responsible discovery practices. The keyword for partners to remember in the discovery stage is document. Mims recommended new partners make a clear record of what has been done to preserve documents and avoid the withholding, altering or destruction of evidence relevant to a legal proceeding. New partners also must specify who the client is before they conduct interviews for discovery ― also known as the Upjohn warning ― and make it clear who they represent.
- Close the case with the proper paperwork. When all the necessary work is completed and the case is closed, partners need to make sure that a current client is converted into a former client for conflict purposes and alert the client that the legal relationship is done. The closing letter to the client can be “framed in the right way and can be used to say thank you but still make clear that the representation is over,” Mims said.
The program “Ethics for New Partners: Understanding Professional Liability Risks and Exposure” was sponsored by the American Bar Association Young Lawyers Division, Law Practice Management Section, Solo, Small Firm and General Practice Division and the Center for Professional Development.
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