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.
Perhaps it is the rush to get a new client in the door or the excitement of a fresh problem to solve that causes attorneys to skip over this important process, or maybe it's just an established routine to allow administrative assistants to handle client intake without attorney input. Whatever the reason, attorneys and law firms who give short shrift to the engagement letter overlook an important risk management tool.
In this post and in posts to follow, I will explore some of the key terms that should be defined before you and your client say "I do":
1. Identity of Client and Scope of Representation. These two are huge. Who is your client? And what are you going to do for them? So many times malpractice suits result from ambiguity or miscommunication about whose interests the attorney has been hired to represent, or about what work the attorney has been hired to do. These risks can, and should, be managed.
First, clearly define who is - and who is not - your client. This will go a long way toward narrowing the universe of possible plaintiffs and perhaps discourage those on the periphery from claiming that you were representing them when, in fact, you were not. For example, if your client is a company, are you representing affiliates, parents or subsidiaries? What about officers, directors or employees? Shareholders, members or other owners of the business? It is important to clearly define where everyone stands.
Then, clearly explain what services you are providing and identify anything that should be specifically excluded from the scope of representaton. For example, does your engagement contemplate litigation and, if so, what about appeals? If your client raises an issue, but does not retain you to pursue it - that's important to note. Or, if your client has other counsel for specific issues, you might consider excluding those issues from the scope of your engagement. Often clients blame their counsel for failing to protect them from issues on the fringe of the representation. A clear engagement letter will help draw a bright line for what's in and what's out.
The key here is attorney involvement at the outset of the representation. Consider implementing intake procedures that require attorneys to draft a sentence or two defining the scope of representation, and make sure that your engagement questionnaire asks a number of questions about the identity of the client - especially for corporate entities. Often the seemingly obvious answer to the question "Who is our client?", is the wrong one.