Other than a signed release, there is perhaps no document more valuable to a malpractice defense attorney than a well-written engagement letter. Nevertheless, client intake and engagement practices are often some of the most overlooked areas in the practice of law.
Previously, in Engagement Letter Essentials, we discussed the importance of identifying the client and defining the scope of the representation. When multiple clients are involved, the engagement letter takes on an added level of importance.
2. Multiple Client Concerns. Often attorneys are asked to represent multiple parties: co-defendants in litigation, a parent and a subsidiary in a transaction, or a husband and wife contemplating a business venture. When undertaking the representation of multiple clients, your engagement letter should contemplate the possibility, however remote, that your clients may not always get along.
First, explain that information relating to the representation will be shared with others in the group and that the clients should not have an expectation of confidentiality vis-a-vis each other. Even if you provide this advice orally, be sure to document it in writing - the proof will come in handy if someone ever challenges your sharing of confidences within a client group.
Second, let the clients know that the joint representation does not have to be permanent. Any client can withdraw at any time. By making this point clear, you will avoid the client later arguing that he felt trapped or that she saw no way out of the common representation. Require written notice of any request to withdraw.
Third, address what happens if the clients disagree. Does one have power to decide for the others? Is it majority rule? Or, is consensus required? Whatever you do, avoid making yourself the arbiter of an intra-client dispute.
Finally, consider what will happen if a conflict arises. Will you continue to represent one client, but not the other? Will you withdraw altogether? You can decide at the outset or implement a "wait-and-see" approach, but either way you should address this potential in the engagement letter to avoid ambiguity later on.
Joining together affords clients an opportunity for increased efficiency and affordability, but it presents numerous traps for the unwary attorney. Work through these issues at the outset of your engagement when the clients are all getting along and working together. On the off chance that their harmony doesn't last, you won't be the one caught holding the bag.
Check back later for more Engagement Essentials.