How to Dump That Dog of a Case

Vol. 33 No. 1

By

Randall P. Brett, Esq., operates a solo practice in Princeton, New Jersey, focusing on business law, employment law, and commercial litigation. He is past chair of the Solo & Small Firm Section of the New Jersey State Bar Association.

A (not so) long time ago, in a town far, far away (Princeton, New Jersey, to be specific), a young-at-heart and highly motivated attorney left the sheltered life of a law firm and struck out on his own, seeking fame and riches. Like most who went before him, he knew that attracting paying clients was the key to the aforesaid riches, if not necessarily the fame. So this attorney networked like crazy, gave talks on legal subjects before many groups, “did lunch” so many times his tailor was on speed dial, blogged frequently, and created a website that Google loved. In short, he developed a presence that quickly began to attract potential clients and developed a reputation that caused other attorneys to make referrals to him. A law practice was formed.

Fast forward a few years. The still young-at-heart (but now older and grayer) attorney had many clients. He was busy all the time, including nights and weekends. To everyone but his accountant, the practice appeared thriving and successful. The attorney had attracted a degree of fame—but the riches still eluded him.

One day his accountant, after conducting his regular review and reconciling the trust account, sat down with the attorney to explain why. Although the attorney had many clients, some were not profitable. The attorney was spending a lot of time on these clients’ matters but much was unbillable; of the time that was billable, he was not collecting sufficient fees. The accountant, echoing the words of Jay G Foonberg in his classic book How to Get and Keep Good Clients (ABA, 3d ed., 2008), told the attorney to “dump these dogs.” Continuing, he said: “Dogs just want you to feed and walk them but don’t earn their keep. A dog will never generate enough fees to make up for all of the time you spend on him.” Strong words, indeed, but the attorney immediately recognized the wisdom of what his accountant was saying.

Now the attorney, being a professional and quite aware of the ABA Model Rules of Professional Conduct, knew that he could not simply discard clients. Rather, he had to protect their interests by either completing their matters as quickly as possible, transitioning them to other attorneys, or just terminating the representation if that was feasible. From this understanding was born the attorney’s strategy for dumping the dogs and avoiding new ones.

What Is a Dog and Where Do These Clients Come From?

With apologies to canines everywhere, a “dog” is a client that cannot or will not pay its own way. By pay, I do not mean only generate financial rewards; payment can be in the form of psychological satisfaction (e.g., supporting a cause) rather than money. However, most engagements are entered into for money, and unfortunately, your landlord, employees, vendors, and family members need money on a regular basis. Hence, even if you are on the side of the angels, you need to make sure that someone is paying the bills.

A dog can be a new client or an old client; the chief characteristic is that she just sucks up your resources to the detriment of your other clients and/or your fiscal health. At first, the dog may present an interesting matter, intellectually challenging and potentially financially rewarding. But once you get into it, the dog begins to look mangy, with matted fur and an unpleasant temperament. However, like the stray you took pity on and brought into your house when it was raining outside, you cannot get rid of this dog.

Dealing with Your Dog

The first step to resolve the problem is to recognize that you have a dog and not just a difficult situation with an otherwise good case or client. Every attorney with more than a little experience knows that there are road bumps in every case, no matter what you do. Further, even the best client may have an occasional cash-flow problem and be unable to pay an invoice in a timely manner. That being said, sometimes you simply have a dog on your hands.

Some of the typical warning signs (growls?) that you may have a dog are:

  • The client procrastinates and/or does not follow through on commitments, particularly in providing documents or facts that you need.
  • The client frequently has issues with payment of invoices (e.g., the client does not pay on time, does not pay the full invoice, or frequently ignores your invoices, claiming they were not received).
  • The client second-guesses your strategy and/or micromanages your work, often citing his own “Internet research.” (A variation of this is the client who says, “My sister-in-law is an attorney, and she told me. . . .”)
  • The client needs excessive and frequent handholding, often demonstrated by incessant calls for seemingly insignificant reasons. These calls take your time, but when the client receives your month-end invoice, she complains that you should not charge her for 12 minutes when she is sure the call did not last for more than ten minutes (it actually took 20 minutes, but you wanted to give her a break).
  • The client objects when you say that you cannot work on his matter right now as you have a brief due in four hours, but will get to it just as soon as you can (and there are no immediate deadlines in his case).
  • The client fails to return your calls or e-mails during the week but attempts to contact you on weekends and gets angry that you did not respond until Monday morning.

Before you label the client a dog, try some remedial measures to see if the mutt can be turned into a purebred. Remedial measures include education, communication, delegation, and renegotiation.

Education begins with the initial intake meeting and continues throughout the engagement. As your client is not an attorney, he probably does not know that transaction documents always go through multiple revisions, there is no such thing as a “simple will,” motions require answers and briefs, the other side has a right to discovery, and judges have their own priorities that do not necessarily match the client’s. Legal matters take time (yours) and cost money (theirs). Often, a little education on the realities of the legal system can improve the client’s behavior.

Communication is an ongoing process, and whole books have been written on how to best communicate with clients, when and what to communicate, and perhaps equally important, what not to communicate. Whether you prefer e-mails, telephone calls, memos, or face-to-face meetings, your pooch wants to know what is going on and why. (Please, no texts! Texting is overused to the point of being abused, and it is virtually impossible to convey in a meaningful fashion the important facts or discuss complex issues in an SMS world.) Numerous surveys have shown that a failure to regularly communicate is one of the top-three reasons people rate an attorney poorly and don’t pay the invoice. Nothing turns a lap dog into a snarling beast faster than to receive an invoice for legal services at the end of the month after not having heard from the attorney for weeks.

Delegation is perhaps the least used but potentially most effective means both to educate and communicate with a client, particularly one who is complaining about the legal fees or a lack of attention. Although you may be loath to cede any task to a client for fear of a mistake or loss of control, depending on the nature of the matter there may be many things that a client can do that do not require your time at your billing rate. Discuss these tasks with your client, explain the need for a quick turnaround (i.e., procrastination only harms her interests), and show her how much money she would save by investing some sweat equity into the process.

Renegotiation of fees and limitation of the scope of the engagement should also be considered. During the initial discussions, you probably described what you will be doing for your client. Your written engagement letter should clearly spell out what you will do . . . and not do. (You do have an engagement letter, correct? If not, see ABA Model Rule of Professional Conduct [RPC] 1.2 and 1.5 as well as your local rules.) Your letter should also contain a statement saying that you reserve the right to raise your rate under certain circumstances, such as on a calendar basis or if the scope materially changes. Your understanding of the scope may not coincide with your client’s understanding, however. Periodically, you may have to revisit the scope, and if the understandings significantly diverge, bring them back together. For example, your client retained you to negotiate a lease on his behalf for a commercial space but then asks you also to review his child’s apartment lease because “a lease is a lease,” and if you are doing one, it will not take you much time to do the other. Right? See Education and Communication, above. (See also Comment 4 to RPC 1.3.) You also can exercise the fee increase clause in your engagement letter as a little more money in your pocket may improve your ability to deal with your dog.

Most of the time, the mutt can change and become, if not a show dog, at least a reasonable companion. But sometimes that dog will just have to be taken to the pound.

Dumping the Dog

Assuming that you cannot quickly finish up the matter (and hopefully collect your fees), it may be necessary to terminate the representation while the client still requires legal representation. How you withdraw from the engagement is critical. RPC 1.16, particularly Comments 7, 8, and 9, provide guidance. The comments are clear, but as always, it is in the execution that dogs can turn and bite you.

In representations involving non-criminal matters (leave of the court must be secured to terminate representation in a criminal matter), the primary issues you will need to address before and during the termination of representation are:

  1. timing of termination;
  2. protecting the client’s interests through the termination process; and
  3. winding up the representation.

Protecting the client’s interests during the withdrawal process is arguably the most important but also the most uncertain issue. This can include finishing tasks that can reasonably be completed prior to termination or alerting the client to tasks that need to be addressed and the date by which they must be accomplished. It also can include securing alternative counsel for your client, such as by making a referral to another attorney. (Your mutt may turn into the other attorney’s prize client. You never know.)

The timing is frequently dictated by the nature of the matter and, when litigation is involved, the local court rules. While your client can terminate you at his or her convenience, you must consider all the facts of the situation when terminating the representation. For example, it is considered bad form (and potential malpractice) to drop the client in the middle of negotiations for a major acquisition or just after the discovery end date. Similarly, if it is three weeks before trial, the court may require you to remain in the case if leaving would prejudice the client’s interests, inconvenience the court, or unfairly raise the costs to the other side.

Winding up activities should include preparing a detailed memo to the file discussing the significant issues that remain in the case, critical dates (e.g., the discovery end date, the expiration of the mortgage rate lock, running of the statute of limitations, etc.), and action steps for the client and/or replacement counsel. If you are referring the matter to another attorney, you will need the client’s permission to discuss the details of the case, and your closure process should include a memo of what you discussed, with whom, and the next steps. You also will need to prepare a detailed “close-out” letter to the client, which should include a discussion of the remaining issues and critical dates.

Finally, you should carefully consider whether to make an effort to collect outstanding fees, particularly if the reason for termination is that the client has not paid invoices. Much has been written advising attorneys not to pursue clients for unpaid fees, based on the premise that fee collection activities are the surest means of triggering a malpractice claim. On the other hand, telling a client that you are terminating the engagement and intend to pursue the unpaid fees can result in both the fees actually being paid as well as a better behaved dog. Administering shock therapy can be both cathartic for you and potentially financially rewarding, too.

Avoiding Dog Bites

Although every attorney in private practice will eventually own a dog, there are some steps you can take to minimize your exposure to fleas:

  1. Know what you do well and can do profitably so that you can better evaluate a case (and client) before you agree to the engagement.
  2. If the potential client came to you as the third or fourth attorney on the matter, carefully consider why this is the case. What is the reason the potential client terminated the other attorneys (or was dropped by them)?
  3. Does the client expect you to bankroll the matter? While you may be willing to take a case on a contingency basis, the client should have some skin in the game. If she cannot or will not cover the expenses, you should carefully evaluate the person’s real commitment to and confidence in her own case.
  4. If you decide to take on a matter that you have not handled before in order to get the experience, understand that the client should not have to pay for your learning opportunity. In other words, suck it up and realize that the matter likely will not be profitable. Your financial loss is simply the price of tuition and not a sign that you have a dog to deal with.

Likely, the vast majority of clients and cases will bring you both psychic and financial satisfaction. Dogs are actually rare, and many can be trained through education, communication, and delegation. If not, there is always renegotiation. But if all else fails, head for the pound.

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