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Breaking Away From Bad: Avoiding Troublesome Clients and Ethically Handling Mistakes Made for the Good Ones

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Breaking Away From Bad: Avoiding Troublesome Clients and Ethically Handling Mistakes Made for the Good Ones

Breaking Away From Bad: Avoiding Troublesome Clients and Ethically Handling Mistakes Made for the Good Ones

This presentation will address two different topics that might be more related than you think at first. Mistakes in the practice of law are both inevitable and avoidable, and when they occur they trigger a variety of ethical issues and obligations for the lawyers involved. When they happen in the course of representing clients for whom it was a mistake to agree to be their lawyer in the first place, they can be doubly unpleasant. So, in addition to addressing ethical obligations brought about by mistakes, this course will also discuss ways that lawyers can try to avoid taking on “unworthy” clients in the first place.

Presenters

Brian Faughnan
Sole Practitioner and Owner
Faughnan Law, PLLC

Transcript

- Hello and welcome to "Breaking Away From Bad: Avoiding Troublesome Clients and Ethically Handling Mistakes Made for the Good Ones." My name is Brian Faughnan. I am a lawyer in Memphis, Tennessee. And I have my own practice with Faughnan Law PLLC. I focus my practice, in addition to doing some business litigation and appellate litigation, on solving problems for lawyers. And that means I represent lawyers in all sorts of proceedings, disciplinary proceedings, legal malpractice cases, serving as an expert witness, as well as consulting with lawyers and law firms, hopefully to avoid any mistakes or problems that would result in any of the other kind of matters, in which I represent lawyers. And along those lines today, we're gonna talk about topic through a presentation that I have given in a number of different contexts and a number of different forms of media. So let me tell you a little bit about what the agenda is for today. I'm gonna tackle two topics that I hope, by the end of our time together, you will come to understand, have more to do with each other than you might think at first glance. The first topic is the importance of trying to avoid taking on unworthy clients and things you can do in your practice at the time of new client intake to try to reduce the risks of doing so. Topic number two is the ethics issues associated with and some practical tips for managing communications with your clients once you learn that you have made a mistake impacting your representation or impacting their matter, or likely both. So why are these two topics important to lawyers? We will cover and talk a little bit about, as well as how do these topics intersect? So both of these issues have long been important to lawyers trying to make sure you're only bringing in the clients you really want to bring in the door, including with hindsight and communicated by mistakes have always been significant. But the economic and personal upheaval that's associated with trying to continue to practice law through a global pandemic over the last several years has only increased the importance of these issues. So what is it that I would tell you about these issues that makes them more likely to intersect with each other than you might think at first? So the stress and difficulty that's associated with managing problematic clients, clients that we will later describe and use the moniker of unworthy for. That stress and difficulty can in turn lead good lawyers into making mistakes. So two can the often more complicated situations that problematic clients create for lawyers and place lawyers in can increase the likelihood of those good lawyers, making mistakes resulting from representing those unworthy clients. And that unworthy client concept also plays in, because on the back end, clients that a lawyer with the benefit of hindsight, they end up wishing they had never taken on as an attorney. Those same folks can often be notoriously difficult if you were expecting them to have reasonable reactions to learning about mistakes you have made along the way. For many of the same reasons, they were unworthy to start with. You might not have recognized it at the time, but it should come as no surprise, although it can still be frustrating, that the things that made them unworthy on the front end tend to make them not the most forgiving and reasonable clients on the back end. So let's talk about risk management during the client intake process for a little bit. Obviously, the world is not binary. There are shades of gray and gradations among clients. But let's start out with a simplistic premise that there are some clients that you can put into the category of good clients and some clients who are bad clients, or at least unworthy clients. And in making this distinction, let's agree to focus on something more than simply whether they can pay for your services or not. Now, you cannot always identify a bad client in advance, but sometimes you can, especially if you know the data to look for, you know the right questions to ask, and you have a little bit of a sense of where you've had issues in your own practice experience with the way that your office and practice works. And so if you can, sometimes identify unworthy clients in advance. My premise is that you should at least strive to do so. And that part of that concept is you... Okay, if you're a criminal defense lawyer, some of this may be a completely different scenario for you. You may be appointed as counsel. In some limited civil circumstances, courts may appoint lawyers as counsel. And I acknowledge that ABA Model Rule 6.2 addresses lawyers' ethical obligations about not trying or seeking to avoid court appointments when they do not need to. But in most cases, lawyers are not appointed counsel. And so using that framework, and again, as we have done in some presentations like this, recognizing that I cannot know at this moment where you practice, we're gonna work from the ABA Model Rules today. And the important caveat is always true. You need to know if you have a variation on that rule in your state. But in terms of trying to have a better intake process, there are obvious economic considerations at play. You know, a bit flippantly asked you to agree that good clients or unworthy clients can't simply be defined as whether they can pay for your services. But I am not so unaware of economic realities to fail to see that turning down paying work often can be a tough call for lawyers. And the economic impact of the pandemic on our personal and professional lives obviously hasn't made that any easier for lots of lawyers. But in addition to economic considerations, in thinking about a better intake process and trying to avoid unworthy clients, there are other considerations. The possibility of disciplinary problems definitely is in the mix if you tie yourself to an unworthy client. And that can be true even if you do everything right during the course of the representation. There are reputational considerations at play as well. While we all have to acknowledge that Model Rule 1.2 of the ABA Model Rules certainly says that a lawyer's representation of a client doesn't constitute endorsement of the client's political, economic, social or moral views, or activities. We also have to acknowledge if we're going to be practical, that in a very polarized climate, which we all find ourselves in, if you are getting paid to represent someone controversial, if you're not court-appointed counsel, but you've made a voluntary decision to represent that person on a paid basis, the blowback that can come your way is definitely significant. And it can come your way whether rightly or wrongly. Now the premise of what we talk about next in terms of what you might tailor your client intake process towards trying to avoid come from lessons learned from the practice of law and lessons learned from the practice of law, both as a lawyer myself taking on clients, and as a lawyer who represents lawyers and has heard hundreds and hundreds and hundreds of stories of lawyer clients of clients that have tripped them up over the years. There are a number of characteristics that can signify that a potential representation is better declined by the lawyer than undertaken. Now, again, acknowledging. Obviously, the legal system works better if all litigants, for example, have counsel to represent. And that's mostly true in business transactions as well. But again, unless you are criminal defense counsel by trade, or really more importantly, somebody who gets appointed to criminal cases, what I would say it's important for you to remember is that not everyone is entitled to representation from you. Whatever color flag you prefer to use when we refer to these unworthy clients, whether that's red flags, pink flags, whatever, these categories are, broadly speaking, things that are worth trying to design your intake system to help you identify in advance, so you can make a knowing and deliberate call about whether you want this person or company to be someone to whom you end up owing all of the duties that come along with the attorney-client relationship. So that being said, let's take a tour of some common categories of types of unworthy clients and things that might constitute red or pink flags in your deliberation process. The first one I like to call, they can't even remember their first rodeo. And these are overly litigious characters. Now, obviously the American system encourages litigation rather than self-help. So we have built a system where we want people to go to court and air their grievances and allow the system to solve their problems. But that being said, when you're talking about individual human beings, litigation is usually not a frequent occurrence in their lives. You take your average person on the street and they are not likely to have had many instances of being a litigant in civil proceedings. Now businesses are different. Obviously, there can be lots of types of businesses and industries where litigation is part and parcel of what they have to do in their area of industry and business. But even businesses, other than certain industries, prefer to avoid litigation when possible. So what that sort of means is people who are more frequent characters in the litigation process sometimes are indicative of folks who do not play well with others generally. And the risk for lawyers taking them on as clients is that might eventually apply to you as well. They may not play well with you leading to disputes and problems, which transitions us into the second category, which we can call sort of Bullwinkle style here, marking my age, if not yours. We could give this one two possible titles. We could call it "may not play well with others," or we can call it "ask and you shall receive eventually." And these are potential clients where you would be the second or maybe even third lawyer that they're now turning to, to take on their case or their matter. And these folks, in terms of flagging them for your intake process, you should be particularly wary if they also don't want you to talk to their prior counsel. Now, fundamentally, there's nothing wrong with a client deciding to change lawyers. And there are lots of legitimate reasons that it can happen, which again is why we wouldn't necessarily call this a red flag, as much as a pink flag. But in many sets of circumstances, the ego that drives us as lawyers will often convince us to think that while the original attorney client relationship did not work out for some reason, surely we are a good enough lawyer to overcome whatever those shortcomings were. And history proves that lots of times, clients who are moving from lawyer to lawyer during the course of their matter, there are often reasons to be concerned about why that's happening. And it can be indicative of the fact that the client is not going to be satisfied with the services, or they are so difficult to get along with that you are on a road that will look a lot like the road of the prior lawyer in terms of the representation coming to a unnatural end. Another category, we can call Mr. Great Expectations. And that is the type of potential client who has unrealistic expectations about what success in their matter would be. These are the potential clients that, in the end, no matter how good a job their lawyer does for them, they end up being dissatisfied. I don't do it as often as I mean to. And I don't do it as often as I counsel other lawyers, too. But I find that one of the best questions that a lawyer can ask a potential client when they're deciding whether to represent them in something is a version of a question of, well, what constitutes success for you in this representation? What would you consider to be a successful outcome? Because it provides a very good jumping-off point for evaluating whether you may be dealing with someone either because of their hesitancy to answer that question, or you don't believe them in the interaction that what they're looking for is something that simply neither you, nor the modern equivalent of Clarence Darrow could ever deliver. Another category, we can call sort of flip sides. It's not really Bullwinkle style, because these two things mean different things. But they both fall into the same risk category. And that's one type of person that you call the missionary and another type of person that we can call the penny pincher, because, ironically, potential clients who care too much about how much the legal services are going to cost them and potential clients who care too little about how much the legal services are going to cost them can be equally problematic characters for different reasons. Obviously, those who start off telling you, you cost too much, or otherwise indicating that budgetary issues are an overly significant situation can be problems for lawyers to bring in unless those lawyers are expecting to and willing to perform exactly on the economic cost spectrum being offered. Lots of times, a good question in the intake process for the lawyer to ask the potential client is what they have budgeted for solving their legal problem. Because if you can get them to give you an answer on that, you can make a decision about whether you want to handle the matter, knowing that's all you might ever get paid, because whether you structured as a flat fee or an hourly rate, once that client hits that budget, that's probably where problems are gonna begin and you're not gonna receive further payments. On the flip side of that, it's the principle of the matter types for whom they say they're telling you cost is no object, unless they fall into certain categories of litigants, for example, where that's truly what they're doing, because they're making a business-based decision. Like, for example, media outlets to pursue something that they're not gonna get any money out of. And they know they have to sink money into it. Folks who insist that cost is no obstacle can often end up being a client, if you take them on, who ends up in your debt, where you end up writing off both the principle spelled differently and the interest. Another category, although, again, it may be dating me age wise, is thinking about representing tomorrow's Enron today. If you are particularly early in your practice, you may have missed Enron altogether, and can Google it and be fascinated. But what we are talking about here is situations where the client may be looking to you to help make a bunch of transactions happen for their business that don't seem to have any actual good reason to occur. And if you're looking for a little more thorough background information on the representing tomorrow's Enrons today type issue, you can go take a look at ABA Formal Opinion 491, which was issued back in April 29th, 2020, and offer some very good analysis about problematic areas for things like that. That kind of client can also create some issues for lawyers in things such as money laundering concerns. There's a good bit of effort being made at the national level to look at whether the ethics rules sufficiently stop lawyers from being conduits for clients engaged in money laundering activities. Another category of folks we'll talk about here is unworthy clients. We call them radioactive clients. And just think, for example, of, say, folks like Jeffrey Epstein, or surprisingly enough, the 45th President of the United States, for example, in terms of clients that can provide real reputational risks for lawyers, and at least as to the latter also concerns even with their ability to pay. Another category, we'll call them Ms. 11th Hour. This is the potential client who only comes to you when there's barely any time left to help. And again, these are not didactic rules where a potential client has one of these characteristics. And it automatically means that the risk of taking on the representation is not worth it, only that it's worth thinking about. There can be perfectly legitimate reasons why someone is coming to you only at the last minute to pursue something. However, there can also be indications that that's what the life of the representation is going to be like in terms of, they will always be putting off till the very last minute, doing what you need them to do to assist them. Another category, we can call what an awful contract, who drafted that mess. An issue for lawyers stems from litigating their own or their own firm's work product. So imagine a situation in which either you or if you are at a firm of any size, have someone coming to you to pursue some sort of breach of contract claim, and you don't pay attention to the fact when you start the representation that someone else at your firm may have handled the drafting of the contract. There can be real conflict of interest issues for lawyers that find themselves in that situation. If the litigation outcome is bad, often clients will end up arguing once they get their malpractice lawyer on board, that you were reluctant to raise the issues that needed to be raised to save their case, because to do so would've pointed the finger at someone else in your firm for not seeing around the corner in drafting the contract itself. Another category, we can call other people's money. These will be potential clients where when you dig into what they're looking to use you for, that everything they intend to do, and that they need your help with, involves using other people's resources to accomplish it. And again, like with one of the earlier categories, this flag could change color from pink to red quickly if they don't want you to have access to the folks with those resources, if they want to be the conduit so that they're the ones that keep telling you things are okay, rather than letting you confirm directly with the people whose money will be on the line with respect to whatever transaction or deal they are looking to pursue. And the last category that we will raise today, we won't give a cute title. We'll just call it straight-up family, because there really can be truth to the adage that we only hurt the ones we love. And time and time again, lawyers can find themselves regretting doing favors for family members or taking family members on as clients, because given the dynamics in play there, oftentimes those family members end up transforming into one of these other categories of unworthy clients. Now, let's talk a little bit about risk management tools, because obviously if there's any merit to these categories of folks as potentially unworthy, what you want is a process that will drill down into the right questions to ask at the intake stage, whatever that looks like for you. If you're a solo practitioner, it might look like one thing. If you are a managing partner at a large firm, it may look like another, in terms of what are the right questions to be asking to help identify those kinds of issues. And some of the questions on any form you put together can be as simple as, you know, has the client been previously represented by another lawyer? And if so, what's known about the reason for change? Some can be more complicated in terms of focusing on industries and other segments of the business world. Some can be a blend of practical and perceptive questions. Like, how did this person come to be in touch with you, which can open up a number of different venues for further follow-up questions, particularly in a world in which some unworthy clients that we deal with are unworthy because they're not actually who they say they are. But that if you don't have a process that asks questions, like, how did the person come to be in touch with you, then the lawyer in your firm might not have the opportunity to mention that they've never actually met them and they just are pursuing this engagement because they got a out-of-the-blue email that might have struck them at the right time of need to feel like they could take on the representation. You essentially also want a process that's gonna identify your or your firm's comfort zone on risk. Whatever that is, you decide as a autonomous lawyer or as an entity is the risk level you are okay with. And then the process is designed to help you stay within your comfort zone. You can make your own individualized decisions about types of cases you might never handle or types of characters you might never represent. But it is worth remembering that good policies alone are not enough. You also have to build in a process that's gonna allow for consistent enforcement of good policies. If you are a solo practitioner or practice in a very, very small firm, that can be easy. You can either do things by consensus or otherwise. But if you practice in a firm, and particularly if you're listening today and charged with any sort of risk management capabilities for your firm, there needs to be a decider. And that person should have some level of enforcement power that when that person says, "No, we are not bringing this engagement in," they need to be able to make that decision. And they should not be easily undermined by other people in the process. And ideally, if the firm is of a large enough size, that decider should be someone other than the lawyer who would be doing the work and bringing in the billings. So there are other helpful tools that can be used beyond intake as well, to help try to avoid some unworthy clients or better deal with them if they come in the door. And again, those involve things like managing expectations, both your expectations of what you're going to get from the client and the client's expectations of when they will hear from you, how frequently they will hear from you if you engage in a kind of practice where you don't want people to have access to you by phone, or expect you to respond to texts. You would need to manage those expectations. Calendaring, calendaring, calendaring is an important risk management tool, making sure all of the necessary dates and deadlines are on your calendar, and possibly backup calendars if available to you. And, likewise, documenting can be supremely important in any situation where despite a pink flag, you have decided to go ahead and take on a potentially problematic client. The best thing that you can do in that regard then is to make sure you've documented all that is done so that you are not left in a situation where you have to engage in any sort of, "She said, she said" battle with that person, because when that plays out, courts will put the burden of having documented issues directly on the lawyer. Along the documentation angle, engagement letters can be a fantastic risk management tool. And, again, particularly as a way of getting perhaps more comfort with some shades of these pink flag, unworthy clients, and including in an engagement letter, the ability to define who is and who is not your client in that engagement, defining the scope of your representation, what you will do, what you will not do, it is a chance to address any potential conflicts upfront and, importantly, to describe the fee arrangement in detail. And, obviously, that would be where you would comply with any rule requirements like Model Rule 1.5 on contingent fees, where you can't have an enforceable agreement if it's not in writing or things like non-refundable fees or fee sharing arrangements with lawyers outside of your firm. An engagement letter can importantly also help you address when fees paid are earned by you so that there become no questions about whether what's being paid to you should somehow go into your trust account or go into your operating account. And, again, if you want or need to set any expectations with the client about communication, whether that be frequency or platforms, this would also be the place to do that. Now, another documenting risk management tool is the disengagement letter. And these are not used frequently enough. This is the "I am no longer your lawyer letter because your matter has come to a conclusion" type letter. It can be very important to send a good disengagement letter in order to transform someone into a former client when you are no longer doing anything for them, rather than letting them continue to linger as a current client with more obligations. And lawyers are often reluctant to send disengagement letters, oftentimes for fear that it somehow seems rude or that it will scare that person away from ever sending them any additional work. But it is very easy to have a clear disengagement letter that is polite and even inviting of future opportunities to do work for that client if you wish to do so. Again, now, despite your best efforts, you will someday make a mistake in a representation of a client that made it through your intake process. Let's turn our attention to those situations and talk about that now. So first of all, risk is obviously endemic to the practice of law. No one is perfect. But even if you disagree and think you're the one, you have to at least agree that bad things can still happen to good people. And probably if you think you're perfect, you also think you're a good person. So you should be able to meet me halfway on that. Now, what are some of the leading causes of attorney mistakes other than just being alive? Well, I know we've referenced the pandemic already, probably more times today than anyone wants to hear about it. But literally living at work over the last few years is a contributing factor to lawyers making errors. Even before the pandemic, if you can remember at that time, many lawyers had or felt like they had 24-hour-a-day, 7-day-a-week practices, because of the demands of their clients, as well as the demands of other lawyers involved in their matters for immediate answers and rapid communications. Another leading cause of mistakes in representing clients are imperfect processes that are often implemented imperfectly, whether that's calendaring situations that human error creeps their way in, or whether that's lawyers who are striving to document everything, but sending a document to the wrong person. In-action can also lead to severe mistakes by lawyers. So what do you do when you make a mistake? Well, let's talk generally about what the two overriding ethics rules are that address lawyers' duty of communications with clients. The first is ABA Model Rule 1.2. And in addition to covering some obvious ground like having to consult with clients about the means to be pursued in their endeavors and covering some obvious ground about how the allocation of responsibilities happens in a representation, such that, for example, the client has the ultimate right to decide whether to settle a civil case or to plead guilty in a criminal case. What 1.2 also addresses is lawyers not being able to counsel clients to engage in certain conduct, but being able to talk with clients about the legal consequences of any proposed course of conduct and make a good faith effort to determine the validity, scope, meaning, or application of the law. So that 1.2 sets out sort of generally this idea that if certain things are in the bucket of complete control of the clients, then it would be obvious that there is some duty to communicate with clients about that. But then we have ABA Model Rule 1.4, which goes further and makes sure that things that might be obvious aren't left up to common sense or do not go unsaid. And ABA model Rule 1.4 quite helpfully titled communication, lays out that a lawyer shall promptly inform the client of any decision or circumstance with respect to which the client's informed consent is required by these rules. So, as an example, couldn't settle a case without the client's informed consent, since that's the client's ultimate decision to make. But lots of other circumstances as well are covered by that. Sub 2 of Rule 1.4 requires the lawyer to reasonably consult with the client about the means by which the client's objectives are to be accomplished. Three requires the lawyer to keep the client reasonably informed about the status of the matter. Four requires promptly complying with a reasonable request for information from the client. And then 5 , consulting with the client about any relevant limitation on the lawyer's conduct when the lawyer knows the client expects assistance that the rules would not allow. And then sub of Model Rule 1.4 says that a lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation. So as to certain kinds of mistakes, discrete provisions in Rule 1.2 or Rule 1.4 can come into play. But reading all of the provisions together drives home the point that there are certain kinds of mistakes in the handling of a matter that will invariably trigger an ethical duty on the part of the lawyer to fess up. And the core of that is when you take together the provisions of 1.2 and the idea in 1.4 3 that you have to keep a client reasonably informed about the status of their matter and 1.4 about having to explain a matter to the extent reasonably necessary to the client, to make informed decisions. When you throw those together, it makes it impossible, or at least inexcusable, to not communicate with a client about certain kinds of errors. So what are those and how to tell the client about them? So in terms of the best overall treatment of the obligations under the ABA rules, we are fortunate that in April of 2018, the ABA put out Formal Ethics Opinion 481, titled a lawyer's duty to inform a current or former client of the lawyer's material error. And this is the latest guidance from the ABA on their version of the rules. And it does a very good job of providing the lay of the land as a lot of the best ABA opinions do. If you read nothing further than just the description even before the introduction, you would likely know all you need to know, which is that the ABA's opinion is that Model Rule 1.4 requires a lawyer to inform a current client if the lawyer believes that he or she may have materially aired in the client's representation. The next sentence of which sums up, an issue that's tackled in the opinion about, well, what types of errors, what types of mistakes. And it says that recognizing that errors, mistakes occur along a continuum, it's not every error that has to be disclosed. It's material errors. And the opinion lays out, and the summary at the beginning even explains that an error is material under that standard. 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. Now, the opinion after laying that out also draws a distinction between current and former clients. It's a distinction that I believe makes a significant amount of sense because we are talking about different concepts. And so these concepts of 1.2 and 1.4 are obligations that lawyers have with respect to their clients. They are not obligations held with respect to former clients. And so the opinion rightly, in my view, lays out that no similar obligation will exist under the Model Rules to a former client if the lawyer discovers after the attorney client relationship has ended that the lawyer made a material error in the former client's representation. So if the lawyer only figures out their mistake after the matter has concluded or after they have ceased representing the client, then the ethical obligations under 1.2 and 1.4 can't create a duty of having to go tell that former client about the error inherently, because they are now a former client and not someone to whom those duties are owed. And so that causes me to do a bit of a callback to what we discussed about the importance, sometimes, of disengagement letters. If you have someone who, if you had when you were done dealing with them, actually made a clear paper trail that you ceased to be their lawyer, that could play a huge role. If you then come to find out about some mistake in terms of the act of disengaging, the act of at least proving the disengagement might prevent you, or would prevent you then, from having to have the unpleasant conversation about some mistake, or might at least allow you to avoid accusations that you were obligated to tell that client, even though they were a former client in your view, because you could not prove that they should have recognized they were a former client. So the Formal Opinion is worth a read, but, as again the best ABA Formal Opinions are, the summary treatment of it really tells you what you need to know, which is, if you reasonably believe you've made a material error for a client, you are going to have an ethical obligation under 1.4 to tell them. And the levels of materiality defined make some sense because either reasonably likely to harm, in which case we're falling in the 1.4 bucket, pretty clearly in terms of something that is necessary to make informed decisions regarding the representation. Like, do we now try to pursue settlement at some otherwise unpleasant value because of this error, or if it's the kind of mistake that could cause a client to decide, they don't want to deal with that lawyer anymore. That again becomes something that lets it make an informed decision regarding the representation. Now, that's the question of when you are ethically obligated to tell a client about a mistake. Now, why might a lawyer want to talk to a client about a mistake, even if not required? And for that matter, why would a lawyer possibly want to talk to a former client about a mistake, even if that is not required under Rule 1.2 or 1.4? Well, here's a hint. There's almost always a self-interest on the part of the lawyer for doing so. So let's entertain an example. And in terms of examples, the ABA opinion in explaining the continuum of mistakes that lawyers might make grabs a number of good examples and discussion of examples from various other states that have weighed in on their own version of this topic, including an ethics opinion out of North Carolina, an ethics opinion out of Colorado, talking about the difference between, say, a mistake that involves missing a deadline. That really isn't a true or important deadline other than to just cause an additional amount of delay versus the kind of deadline where there are significant ramifications. And so along those lines, the example I want you to think about is one of those quite significant missed deadline issues. So imagine you are a plaintiff's lawyer and you have a pretty high volume, personal injury practice. You have woken up one morning to realize that you've missed the deadline for filing a plaintiff's complaint in a case with significant monetary damages and significant liability exposure. So what now? Going to bed is one option, not a very productive option to go back to bed. But more seriously, there are two immediate paths that can spring to mind almost in the nature of the devil on one shoulder and the angel on another. One path that's available to you in this scenario likely helps you avoid ever receiving a disciplinary sanction. And it is a path that starts the clock on any malpractice case against you and perhaps even lets your client's case proceed despite your error. Now, the other path can increase both the risk of and severity of potential disciplinary sanctions against you and can even undercut the power that might otherwise exist of any case within a case defense that might otherwise be available in a malpractice lawsuit to you. Now, since you've been paying attention and since you've followed the discussion of the ABA Formal Ethics Opinion and what 1.4 requires, you probably have already figured out which path is which and what those entail in terms of which one is the devil on your shoulder and which one is the angel on your shoulder. But to help clarify it otherwise, or as further back up on those paths, the paths are so that it shouldn't go, I guess, unstated, telling the client about missing the deadline or choosing not to do so. Depending on your jurisdiction, missing a statute of limitations, even on a large case may not be the kind of mistake that is viewed by your bar council as anything that would merit discipline. In lots of jurisdictions, arguments have been successfully made and can be successfully made that one calendaring error is not the equivalent of a violation of ABA Model Rule 1.1 on competence, and is instead an error that does not signify a lack of competent handling or a disciplinary offense. But instead is something that bar council will agree, is better left to the world of legal malpractice litigation. But missing the deadline and not telling the client and stringing them along about their case or, worse yet, actively misleading them about what has happened and what is going on, that will be the stuff of an unpleasant disciplinary matter for you in this hypothetical. And that's because, without having to delve into the world of whether this is a violation of the jurisdiction's version of Rule 1.1 on competence, it now becomes a case from the disciplinary side, that's about violations of those other rules we talked about extensively, Model Rule 1.2 or 1.4 as adopted in the jurisdiction, the failure to communicate what you needed to communicate to the client. But also becomes a case about violations of ABA Model Rule 7.1 and 8.4. 7.1 is a rule that most lawyers only think about in terms of advertising, but it is not a rule that is written. So as to limit itself to advertising, it is instead a rule that says a lawyer can't make a false or misleading communication about the lawyer or the lawyer's services. And a communication is false or misleading if it contains a material misrepresentation of fact, or law, or omits a fact necessary to make the statement considered as a whole not materially misleading. And so, you know, without getting into the trite, it can be the coverup that is worse than the crime statement. The consequences that can happen naturally from not disclosing the error and responding to other inquiries and shading truth and the like can easily violate Rule 7.1. And then of course your jurisdiction likely has a version of the ABA Model Rule 8.4 , which essentially makes it improper for lawyers to engage in any sort of misrepresentation or deceit. And so choosing the path of not disclosing very much ramps up disciplinary exposure. On the civil side of things, it's also true that in many jurisdictions, the way to start the clock running on whatever statute limitations exists for a legal malpractice claim where you practice is to make certain that the client has been put on notice of the situation. So the path that involves listening to the angel on the shoulder and listening to the ABA Formal Ethics Opinion involves disclosing to the client the missing of the statute limitations deadline. And that serves not only to reduce disciplinary exposure, but from a self-interest can also be helpful with respect to any legal malpractice case by starting whatever the time period is. In Tennessee, for example, we have a very short, relatively speaking, timeframe on legal malpractice claims. We have a one year statute of limitation. And it is a effectively an inquiry notice statute. So it is one year from the time in which the person believes that they have been harmed by some error made by the client. So in a place like Tennessee, the moment you send a communication to the client, identifying for them the missing of the statute of limitations and its consequences, you would start that one-year clock running no matter what happens next. Now, that timing issue obviously can be very different in jurisdictions that provide for tolling of statute limitations for continuing representation. Tennessee is not one of those, but there are states that are. But even in those jurisdictions, again, the failure to communicate about the situation, if it is ultimately viewed as a deceptive omission can only make matters worse for the lawyer in terms of future claims. And it can move any future lawsuit over legal by practice from the realm of a claim for simple professional negligence, to the stuff of claims of fraud and possibly claims for punitive damages, depending on what's required in your jurisdiction to prove punitive damages. And along the way, what that happens as a practical matter is it very much hurts the otherwise available defense of making the litigant prove their case within a case. Nothing can turn a bad legal malpractice case for a plaintiff into a good legal malpractice case for a plaintiff, like the ability to make allegations over lack of candor and lack of forthrightness after the error was made, because you can then turn the case from being about what if anything might have ever been able to be won had the lawyer not missed the statute of limitations and turn it very much into a case where the damages can flow from other perspectives. As is often true when it comes to telling the truth, there are additional benefits of candor for a lawyer in this situation. With candor, you get to control the communication and information that the client is receiving. And ideally you are able to be alerting the client to the mistake and proposing the solution at the same time. Variations on this will be different depending on the mistake in question and the time you might have available to formulate your communication strategy, what is reasonable delay to figure it out will vary as well. But in the example, we're using of the missed statute limitations as a plaintiff's lawyer. In many jurisdictions, the fact that a claim is time-barred is an affirmative defense and it can be waived if it is not raised. So a lawyer in this situation can tell the client about the error and also explain to the client that if the client wants to continue the representation and go forward, the lawyer still can file the complaint and hope that for whatever reason, whether there's some weird tactical reason or whether the lawyer on the other side, also being a human being, they make a mistake on top of your mistake, but that hope for whatever reason, the defendant simply doesn't raise the statute of limitations as a defense in response to the late filed complaint, because in a jurisdiction, where that affirmative defense could be waived, that duct tape solution might protect the client's case. Now, in that example, it is important for that lawyer in making that communication to make sure the client does understand that while that can be done, if the other side does raise the affirmative defense of lapse of the statute limitations, that there won't really be anything left for the lawyer to do, but concede that the complaint was filed late, because the constraints of Model Rule 3.1 under the lawyer's ethical obligations, that plaintiff's lawyer, further pursuit of that claim could easily be considered frivolous in a violation of Rule 3.1. So again, your mileage may vary depending on what the mistake in question is, but the benefit of candor is you can be the one to propose a solution that might be agreeable to the client along with the error. And in that respect, that can offer some proof of mitigation in the event you're in any sort of disciplinary proceeding. That would be the concept of mitigating circumstances that your candor to the client mitigates what might be the discipline that would otherwise be imposed or your efforts to protect the client may also be a mitigating circumstance, as well as helpful in a legal malpractice lawsuit in terms of showing any ability of the client to have mitigated damages, because at least it will lay out the possibility that if they do not pursue that course instead, you know, terminate the representation and proceed to sue in legal malpractice, hold out that possibility in your jurisdiction of arguing that if they had filed the late complaint, it might have been able to go forward. But also in terms of proposing possible solutions, the benefit of candor is that the lawyer might also be able in this dialogue to reach a settlement with their client on the issues. If they have the financial wherewithal to do so, if they have insurance coverage and comply with whatever their insurance carrier requires from them, there is the possibility in this scenario with this plaintiff's lawyer to reach a settlement with the client of the underlying case, as long as the lawyer remains mindful of the restrictions under ABA Model Rule 1.8, which it's specifically 1.8 under the ABA Model Rules says that a lawyer cannot settle a claim or a potential claim for liability for their malpractice, with an unrepresented client or a former client, unless that person is advised in writing of the desirability of seeking and is given a reasonable opportunity to seek the advice of independent legal counsel in connection there with. So in this situation where the stakes are significantly high and the statute has been missed, the lawyer as part of proposing the solution might be proposing, attempting to settle the expected monetary recovery in the underlying case, if any, with the client or former client. And if it's a jurisdiction that follows the ABA Model Rules, that can be accomplished even if that person doesn't have their own lawyer, by making sure they're told in writing that, hey, that not only they might, it would be desirable for them to talk with another lawyer before agreeing to a settlement and giving them time to seek the advice of that. But under the ABA Model Rule, there's no obligation that they become represented by counsel in order to settle their claim before they ever bring it. Now, that's also an important one to be aware of if your jurisdiction has a deviation from that. Here in Tennessee, for example, we don't track the Model Rule, and in fact would not allow that kind of settlement of that potential claim unless the client was represented by independent counsel in agreeing to it. But even in that framework, candor provides the opportunity to accomplish that, whereas following the path of the devil on the shoulder, invariably turns a bad situation, much, much worse. I have taken up an hour of your day. I greatly appreciate you being here at least virtually to listen in. If you have any feedback, comments, thoughts of anything I got wrong, or otherwise wanna be in touch with me, you can get me by email at [email protected] I wanna again thank Quimbee for letting me present. And I hope you have a good rest of your day. Thank you very, very much.

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1h 56s

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