On April 17, 2018, the Standing Committee on Ethics and Professional Responsibility issued Formal Opinion 481, A Lawyer’s Duty to Inform a Current or Former Client of the Lawyer’s Material Error.
The committee confronted the question of a lawyer’s obligation to inform both a client and a former client when the lawyer discovers that a mistake was made during the representation. The head note reads:
The Model Rule of Professional Conduct 1.4 requires a lawyer to inform a current client if the lawyer believes that he or she may have materially erred in the client’s representation. Recognizing that errors occur along a continuum, an error is material if a disinterested lawyer would conclude that it is (a) reasonably likely to harm or prejudice a client; or (b) of such a nature that it would reasonably cause a client to consider terminating the representation even in the absence of harm or prejudice. No similar obligation exists under the Model Rules to a former client where the lawyer discovers after the attorney-client relationship has ended that the lawyer made a material error in the former client’s representation.
The opinion addresses only a lawyer’s obligation under the Model Rules of Professional Conduct and does not give an opinion on lawyer malpractice.
From the rules analysis perspective, the committee viewed the question as composed of two elements. First, was there an error that was material, and second, was the individual a current or former client.
The analytical foundation for the opinion is Model Rule 1.4(a)(1): “A lawyer shall promptly inform the client of any decision or circumstance with respect to which the client’s informed consent, as defined in Rule 1.0(e), is required by these Rules” and Rule 1.4(a)(3): “A lawyer shall keep the client reasonably informed about the status of the matter.”
But what information must be disclosed?
The committee favorably cites the Colorado Bar Association’s Ethics Committee Formal Opinion 113 (2005). That opinion noted that the errors that must be disclosed to a client occur on a continuum that determines the obligation. Clear examples of errors that must be disclosed include a missed statute of limitations or a failure to file an appeal. Errors that may cause no client harm or may be easily corrected need not be disclosed. However, as the committee notes, errors along this continuum do not necessarily obviate disclosure. The more appropriate question is whether a disinterested lawyer would conclude that the error is “material,” i.e., is it reasonably likely to cause harm or prejudice to the client or would it reasonably cause a client to terminate the relationship regardless of harm or prejudice.
After addressing the analysis of whether an error is material, the committee addressed the disclosure obligation on the axis of whether the error involved the representation of a current client or a former client. “[T]he Committee concludes that a lawyer must inform a current client of a material error committed by the lawyer in the representation.”
Yet, there is still a question of whether the client is a current or former client. Generally, the attorney-client relationship arises from the legal relationship, something that is beyond the scope of the committee. However, such a determination is also determined within the Model Rules—particularly as it relates to the termination of the relationship. Rule 1.16 addresses termination of the relationship.
The committee reviewing numerous cases notes that:
a current client becomes a former client (a) at the time specified by the lawyer for the conclusion of the representation, and acknowledged by the client, such as where the lawyer’s engagement letter states that the representation will conclude upon the lawyer sending a final invoice, or the lawyer sends a disengagement letter upon the completion of the matter (and thereafter acts consistently with the letter); (b) when the lawyer withdraws from the representation pursuant to Model Rule of Professional Conduct 1.16; (c) when the client terminates the representation; or (d) when overt acts inconsistent with the continuation of the attorney-client relationship indicate that the relationship has ended.
This hierarchy led the committee to consider also how the scope of a lawyer-client relationship might be dispositive of when the relationship might terminate. Examples given are a lawyer retained as general counsel or retained for all matters in a specific practice area or retained for a discrete matter.
But despite this analysis, left for case-by-case determination is the status of those clients who are not clearly a former client—those clients who contact the lawyer whenever legal services are required regardless of the interval between contacts or those clients who consider the lawyer “their lawyer” regardless of whether a matter is pending or those clients to whom no termination or closing letter has ever been sent by the lawyer.
Model Rule 1.4, as noted above, applies to a current client, under the committee’s analysis. Had the drafters intended the rule to more broadly include former clients, the rule or comments would have so indicated. Therefore, the committee’s opinion is that the Model Rules obligate a lawyer to inform a current client of a material error in the lawyer’s representation of the client, but not, necessarily, a former client.
It is always worth remembering the oft-stated aphorism that the Model Rules of Professional Conduct state the floor for lawyer behavior below which no lawyer’s conduct may fall, not the ceiling to which a lawyer should aspire. This is equally true of the opinions interpreting the rules.