The ABA Standing Committee on Lawyers’ Professional Liability recently released data on a cross section of legal malpractice claims from 2008 to 2011, reporting that nearly 16 percent of all claims had been caused by poor client communications. To avoid such an outcome, lawyers should start their relationship with a client by having a full and frank discussion about the goals and terms of the engagement and the responsibilities of both the attorney and the client. Shortly after, the oral agreement needs to be accurately committed to paper.
Many jurisdictions mandate the content of written engagement letters in certain situations, and lawyers must consult the local rules before settling on the form of engagement letter to use as a guide. The ABA Model Rules of Professional Conduct “prefer” written engagement letters but require written agreements only where a contingency fee is permitted (Rule 1.5(c)) or where the fee charged may be considered entering into a business transaction with a client (Rule 1.8(a)). Even where a jurisdiction does not mandate the use of a written engagement letter, however, maintenance of office procedures requiring that all engagements be reduced to writing is a sound risk management policy and promotes compliance with the Model Rules.
Identify the client. As an initial matter, the engagement letter should identify the client whose interests are being represented. Equally as important is a definition of those whose interests are not being represented. In representing a business organization, particular care should be taken to explain to the constituents of the organization that the organization is the attorney’s client where the interests of the organization may not be aligned with those of the constituents. Engagement letters in the trust and estates field should also clearly identify the attorney’s client in order to avoid the common misconception by relatives of the client that the attorney is the “family” lawyer.