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Retainer Agreements As Best Practice: Risk Management Tools And Ethical Considerations

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Retainer Agreements As Best Practice: Risk Management Tools And Ethical Considerations

The retainer agreement is an often neglected tool to meet our ethical obligations to our clients while simultaneously managing and reducing professional risks inherent in the practice of law. The retainer agreement touches on virtually every kind of private practice and directly addresses the two greatest sources of professional risk to attorneys – ethical obligations and legal duties to clients. This course explores the basics of the retainer agreement along with corresponding ethical considerations in the context of every day professional risks lawyers face through a review of the ABA’s model rules, sample retainers and ethics opinions. The “living” retainer agreement as a risk management device and best practice tool, including an overview of paralleling ethical considerations will be explored, along with how to develop a firm-wide retainer agreement plan.


Jeffrey Cunningham
Goldberg Segalla


Jeffrey Cunningham: Hello, and welcome to Ethics and Retainer Agreements, lawyers best practice risk management tools.

My name is Jeffrey Cunningham. I'm a partner at Goldberg Segalla LLP in White Plains, New York.

Today we're gonna talk about how attorneys can use the retainer agreements as risk management to limit potential liability, but also as a best practice tool to enhance their ethical law practice. My practice is primarily based in defending attorneys and other professionals, but attorney sued for malpractice or facing ethics issues. And I think retainer agreements are particularly important now during the COVID 19 era, but it really is the, the primary agreement between the attorney and client and it's often neglected in that most attorneys utilize a retainer agreement, but then put it in the file and never look at it again until years later when there's a problem and then it's pulled out. And by then the damages is completely done.

Today we're gonna be looking at the ABA model rules, which have been adopted in most jurisdictions or in many jurisdictions to some extent and a national perspective as we go through today.

 So a big picture view retainer agreements as I said, it's our best practice tool, but it's a risk management tool as well in that making you a better lawyer makes you a safer lawyer and clearly outlining the scope of the representation with your client. No matter what practice area you're involved in, reduces risk across the board and allows you to fulfill your ethical obligations in a far superior way. Retainer agreements of course are contracts. There's jurisdictional considerations. You have to know the law and you have to know your state or states bars rules. And think about not only where you practice, but where the client is also located. And any particular jurisdictional considerations should be addressed at the outset.

You wanna have a living retainer agreement like the constitution for every client, for every matter, you should have a living retainer agreement. And a living retainer agreement is one that evolves along with the attorney client relationship. You wanna audit your forms retainer agreements. It's not enough to just have a form retainer agreement, even if every client, every matter has a retainer agreement, that's not enough. You want it quarterly annually, updated, reviewed, make sure that the retainer agreement you're using, isn't something that was drafted 20 years ago. Isn't something that was drafted when your firm only handled med mal defense matters and now the firm is doing all sorts of other things and the retainer agreement no longer fits. And from a very simple practical standpoint, make sure it's the best possible contract you can be providing to your clients. It protects your firm, it protects the client and it helps you fulfill your ethical obligations. So the retainer agreement audit is very underutilized and very, very important. And it can be a very quick process. It doesn't have to be anything substantial. It doesn't have to be anything time-consuming, but having a team in place that can do that and do it quickly and efficiently is really key.

Before we dive into the specifics of retainer agreements, just wanna talk about the big picture two targets we're looking at here. Are professional ethics so attorneys professional ideas, ideals that govern our conduct and risk and typically risk to attorneys is legal malpractice and related claims, generally only from the client although in certain situations, other claims are available to non-clients. But there's other risks that I wanna think about today as well. Cyber risks. It's an ever-growing area of concern for attorneys and professional liability insurers. Business risks to attorneys and specifically the COVID-19 related risks as well. Stepping back to ethics, we all know the, our jurisdictional rules of professional conduct. Typically they are intentional acts, but not always. And usually it's a course of conduct. So it's not one error that can lead to ethics issues, but a repeated course of conduct. Whereas a claim against an attorney, particularly legal malpractice can involve just one mistake. And of course state bar rules and the model rules as adopted are particularly important. And it's a bit more challenging these days in that the many states have adopted the model rules, but not in their entirety. So there's nuances between jurisdictions that you need to be aware of.

Today we're going to discuss the retainer agreement, it touches on every aspect of the attorney client relationship, and it really hits on almost every rule in the model rules, but in particular, we're gonna talk about most of model rule one model rule three model rule five, six oh, and model rule two as well. So we'll we're gonna be touching on those specifically, but again the retainer agreement is the primary source of your attorney client relationship, or at least you want it to be, and it really does cover the whole host of our ethical responsibilities to our clients. So I'd be remiss if I didn't discuss the new normal, practice has changed dramatically. Life has changed dramatically due to COVID-19 and it presents a lot of challenges. Aside from our personal sanity. The exponential use of technology has just drawn risk to unparalleled levels. I mean, it really, the pandemic has forced attorneys, courts, our clients to embrace technology in a way that we just didn't before. And as we'll see a bit later in the presentation, the more attorneys you have using more technology pretty clearly equals more risk. And that's more risk of claims of legal malpractice, but also ethical concerns.

The COVID pandemic has also brought around an economic downturn. Anytime that happens, lawyers become a target amongst others, but particularly because lawyers are insured and lawyers are involved in so many facets of, of our economy, they become a clear target whether or not warranted. Practice during COVID-19 there are particularly vulnerable areas and I think we're really starting to see the first one just starting to develop now the executive and administrative emergency orders that were issued across the country, were emergency orders. They were rushed they were hasty not necessarily crafted perfectly. And I think courts and the bars are trying to grapple with what those orders mean, how those orders are going to be incorporated. And we're just really starting to see claims and case law developing related to what really turned out to be a mess, a necessary mess but a mess. Remote practice presents a host of challenges and risks, and then virtual courts. And under that rubric I include, mediation, arbitration, administrative proceedings. It's a whole new world and with any kind of change like that it increases risk and it also makes our ethics, it stretches our ethics rules because the paradigm has definitely changed and the rules were written in a time before COVID. And before the way we practice today, doesn't exactly fit. And it's really unique in that this level of changes, pace of change is truly unprecedented.

So the ABA tracks these things and puts out their legal technology survey and drawing your attention to the 2016 legal technology survey of the ABA. It's very clear, more attorneys using more tech equals more trouble. And the incline from the solo practitioner to the midsize firm of 10 to 49 attorneys is sharp and steep. And it's as sharp and steep as the incline from the mid-sized firms of 50 to 99 attorneys to the large firms of 500 or more attorneys. Those two groups, the mid-size 10 to 49 and plus 500 plus amount for more than half of the technology related claims. These are typically legal malpractice claims, but this is instructive. I mean, if ethics complaints ethics violations, and discipline aren't as easily tracked, they're not generally as published or publicized as a legal malpractice claim, not as easily searchable as case law. But even if they don't track precisely the same as a legal malpractice claim they're definitely going hand in hand. So the more tech the more trouble. The ABA notes that one in four firms have a hundred or more attorneys have experienced a cyber breach to date. I think that number is probably, or that statistic is probably conservative. We have a real problem across all industries, but particularly law firms of under-reporting cyber incidents. And that doesn't factor in the cyber incidents that go unknown and it's anybody's guess how many of those are out there. And the ABA also tracks one in four attorneys will face some type of claim in their career. Again these are not ethics violations, but typically legal mal claims, but it's instructive. And if there are one in four attorneys dealing with some sort of legal mal type claim, that number is probably pretty close for attorneys dealing with ethics issues as well.

Anytime I discuss attorney ethics, I think it's important to touch on our duty to disclose. The model rules 1.4 and 1.7 really do point towards a duty to disclose an error, ABA opinion 481 notes that rule 1.4 requires a lawyer to inform the client if the lawyer believes the error is 'material'. What material amounts to there is a lot of discussion about that. But looking at the restatement of law government lawyers and a minority of Commonwealth jurisdictions, there is a duty to disclose malpractice. Typically that material error is the standard and it's a reasonable this standard. But it's important to note that, there is an overarching duty of disclosure to our clients. if a mistake is made. Now that does not necessarily mean that you are obligated to in any sense, the model rules and jurisdictional rules recognize the balance between the attorney's duties to their client and the attorney's self-interest. And while we do owe a duty of candor to the client, it's not one that requires lawyers to hamstring themselves. There are other considerations as well disclosing my practice may expose you to a malpractice claim failing to do so may expose you to other sorts of claims such as a fiduciary duty claim. And on top of all of that I'm an insurance defense attorney at heart. And of course there are malpractice insurance considerations. You always wanna check your policy, especially if you're grappling with any sort of admission or apology for an error, even if it's an error that didn't necessarily amount to legal malpractice, talk to your carrier before you go making any decisions, talk to outside counsel, talk to ethics counsel, and really make an informed decision before you do anything that could compromise your position.

Our ethics overview, the model rules prevalence scope, specifically notes that a violation does not give rise to a cause of action against an attorney. And that the rules are not to be used to impose civil liability. Now it's almost more complicated now that most states have adopted portions of the model rules, because you really, I mean more than ever have to know the rules for each jurisdiction. When the rules were so different between states, I think it put attorneys practicing in more than one jurisdiction on notice in a way that we just aren't anymore. Everyone and not everyone, but most practitioners look, they see that the state they're becoming admitted to follows the model rules more or less. There are these exceptions, you learn about them. And then unless it's something you deal with routinely, it's sort of putting the, in the file cabinet next to your old retainer agreement. And it's only pulled out again when it becomes a problem. Note that the jurisdictional rules are generally admissible. And this varies from state to state, but are generally admissible to establish standard of care and other portions of claims against attorneys. Ethics rules are not the standard for malpractice, but they often touch upon the standard of care in malpractice and other claims against the lawyers. We talked about the areas of risk that attorneys face that we'll be discussing today, legal malpractice and other claims. Cyber based claims, general business risks and the unique risks that have evolved in COVID-19. And I wanna go through each of those four in a bit of detail. Discussing attorney risk. I think legal malpractice is the focus and it's something everyone is all practitioners are aware of and wary of. But I always like to take it back to the elements of a legal malpractice claim because so many people will lay people and attorneys will refer to an error as legal malpractice, the negligence element alone has legal malpractice and that is of course not the case.

Almost all states have four elements. Privity, the breach, approximate cause and damage. So the important thing to always remember is generally speaking with very, very limited exceptions, the only person or entity that can sue you for malpractice is your client. The breach it has to be that mistake, that negligence has to be a breach of the standard of care, and it has to proximately cause damage. All of that being said, it's to point out that an error is not malpractice. And we use that phrase all too often, but there's a whole lot more to it. There's a host of other claims that lawyers face routinely and they're usually thrown in with illegal malpractice claim, but breach of fiduciary duty breach of contract fraud are very common. And third-party claims there's a dispute between two parties and the attorneys get drawn in for a host of reasons. One of which of course is that most attorneys have malpractice insurance. So they can be a tempting target and they can be brought in by a non-client to a dispute with a client and then find themselves facing a legal malpractice claim from their client. And of course there's insurance considerations there. Your fraud based claims are not gonna typically be covered a breach of contract, probably not going to be covered. So that's something to think about as well. The sorts of claims that are brought, can have serious insurance considerations and as always you want to notify your carrier sooner rather than later, and know your policy. So the next big group of risk is the cyber risks. And as we talked about the legal technology survey from the ABA it's increasing exponentially. And it's just the reality it's increasing in every industry, but I think attorneys often are behind other industries.

So the legal profession is behind other industries when it comes to using technology. According to the ABA's 2019 legal technology survey, 8% of attorneys are using AI in some capacity in their practice. And there has been a decrease in the number of attorneys working remotely with public wifi. So that's good news that shows that we are embracing AI, we are embracing technology and we are getting a little more savvy in that you can't run your practice from a Starbucks on public wifi, but the fact that those are kind of the highlights, the good news from the legal tech survey is discouraging. The it'll be interesting they put these out every three years. It'll be interesting to see what effect the pandemic has had on our use of technology. Obviously it's skyrocketed, but you have to assume public wifi has probably gone down. I'm sure that AI number has gone up. So it'll be really interesting when those statistics come out. The 2016 legal technology survey, we talked about the danger zone for attorneys, 500 plus attorney firms with 500 plus attorneys and 10 to 49 attorneys make up for over half of the cyber based claims against lawyers. The ABA puts out a great resource. It's a bit of a read, but the ABA's cybersecurity handbook, most major firms also have resources available on their website. And a simple Google search can come up with with great resources as well, but cyber risks the number one problem is the head in the sand approach. You need to have a plan. You need to have an expert and, your random IT guy probably is not going to be sufficient going forward.

Just discussing business risk to attorneys, Yelp, attorney profiles, auto-generated profiles, social media, and social media can be professional. LinkedIn post or personal private social media posts can all be a source of risk to lawyers. There's the you hear stories about an attorney who meets a potential client at a cocktail party, and they talk about a case or a deal. And the client scribbled down some notes on a napkin. The attorney never hears from him again, the would be client relies on the attorney's advice. So some extent things go wrong and then the attorney sued for legal malpractice. I've never actually found the case bearing that out. It's sort of an urban legend I guess, but it certainly could be the case that an attorney profile or a social media post is relied on by some would be client and causes problems down the road. And the Yelp and especially the auto-generated profiles, present particular concerns as well. And the ABA has put out suggestions in how to respond to online criticism, anonymous criticism. And it's important to note that while in a legal malpractice claim defense or a disciplinary proceeding, and the attorney client privilege is often put at issue and can be used to defend the attorney. A nasty Yelp review does not generally amount to the level where you could violate the attorney client privilege, or even the duty of confidence that you owe to your client.

Another major business risk is staffing considerations. About a third of the claims against lawyers are administrative in nature. And with especially these days with COVID-19, the reduced staffing is going to be, I think that number is going to be significantly higher, but about a third of the legal mal and related claims are administrative in nature, transmitting documents, filing things, bringing things to the court, things of that nature. Business and political conflicts most firms have a decent conflict system in place, but having a business and political conflict system in place is key as well. And often is important as important as the actual conflicts check that's done at intake. Specific industries and regulatory requirements exist. And those need to be considered depending on your practice. And then a talk a fee claims. Anytime I talk about risks for attorneys, I like to talk, as I said about the duty to disclose, and I would totally drop in the fee claim issue. It is about a third anecdotally, about a third of my defense work for lawyers stem from fee claims. the attorneys trying to collect outstanding fees and sues their client and their client brings the papers to another lawyer who says, well let me see that file. And then next thing you know a $40,000 fee claim turns into a $3 million legal malpractice suit. So the fee claim sometimes it's necessary, but it's much, much better to have it outlined in the retainer agreement, the fee arrangement and the retainer itself. And then at a certain point to withdraw and try to remove yourself in each of your offices, suing your client is bad business for so many reasons, but it really does result in often frivolous but still legal malpractice claims and ethics complaints.

And then the COVID-19 risks. And there is no clear standard here. Each state in bar each attorney and firm is grappling with these challenges and trying to figure out what we're going to do how these emergency orders are in place, how remote practice is going to work going forward, what court is going to look like going forward? And the ABA again the rules were written before all of this happened, but the ABA's model rules really do point to rule 1.6 C the reasonableness standard. And while that's not a huge help, I think generally speaking, doing something is better than doing nothing that head in the sand approach is just not gonna cut it. And part of doing something is coming up with a plan. The living retainer agreement is a, a great tool in reducing risk and meeting our ethical obligations. And then staying up-to-date and keeping your people informed, knowing what the court decisions and ethics opinions are saying about the evolving risks from COVID-19 are really important. COVID-19 presents a perfect storm for bad actors. As I said attorneys and courts and clients even are forced to use technology they otherwise wouldn't, there's extremely reduced staffing for courts and attorneys. And a third of the claims when we had full staff. So third of the claims were administrative in nature. And then settlements and wire transfers are particularly targeted by bad actors. And we're seeing more and more claims based on wire transfers being intercepted, but also legal mal claims where settlements are reached and clients sort of have a buyer's remorse. And it's just a different situation when the Zoom call ends at the end of the mediation, rather than when everybody was at the mediators and everybody shook hands in front of the elevators. So it's a different world. And those risks are amplified these days with COVID-19.

So the attorney client relationship, it's the primary source of our ethical duties and issues and risks for attorneys. We still of course owe duties to the court, to our adversaries, to the public. But the primary source of our ethical duties is found in the attorney client relationship, which is defined by the retainer agreement. The scope of services is the key and I mentioned this earlier, but the attorney client privilege and the at issue doctrine if things go poorly, an attorney is allowed to use privileged information that's placed at issue in the defense of a legal mal or other claim typically. That's not a blanket waiver of the privilege. You can't go publishing privileged or even confidential information, but it is available. We're not defenseless just because of the attorney client relationship. Typically the client's belief is key. So we wanna put everything in writing courts will typically err on the side of the reasonable belief of the client. It doesn't matter who's paying for the services generally, although that can be a factor again in that reasonably for the client. So you really wanna outline what the scope of services is, who the client is. Who's gonna be working on the matter who's gonna be paying what the fees are, what the rate is. You want the retainer to be as detailed as possible. And limiting the scope really is important that living retainer agreement. As the representation evolves, as the relationship evolves, the retainer agreement needs to reflect that. And I think anytime fees are adjusted. That's a great time to look at your retainer agreement. Anytime a new transaction or a new lawsuit is involved that's a great time to look at your retainer agreement and you wanna it's almost like changing the batteries in your, in your smoke detector. You wanna just have a quarterly or seasonal, annual, whatever you wanna have some time where you always are looking back and checking your retainer agreements to make sure they make sense. Discussing some of the key rules here and that have to do specifically with the retainer agreement rule 1.2, rule 1.4, client communications 1.5 coverage fees, 1.7 to 1.12 in various iterations cover the conflicts. And the conflicts are often a key component in the retainer agreement. Rule 3.1, outlining meritorious claims and contentions and the duty of candor that flows both ways between the attorney and the client. And the rule 5.4 which touches on the attorney's professional independence and how important that is. The ABA's standing committee on ethics and professional responsibilities, formal opinion 11-458 discusses the idea of the evolving retainer agreement and unfortunately discusses the ethical challenges in having an evolving retainer agreement. So it's not enough to just have your living retainer agreement that you update and change and reflect as your transaction or litigation grows.

But you also need to make sure you're meeting your ethical obligations to the client when you're updating that retainer agreement. So just as you would with the very first retainer agreement, you need to make sure the client gets it, sees it, understands it. It's often useful to again suggest outside counsel and have the client acknowledge it. It's great to have the client sign it, but an email acknowledging that's received and accepted is great as well. All right so touching on the big picture for the retainer agreement, I urge everyone to look at the ABA sample agreement. It can be found online and it sort of has all the important points you need to know your state and in some instances your local rules and what your bar association says about retainer agreements, if there's any specific state and local issues especially client dispute rules are very common. Practice specific considerations if you do real estate work, if you do criminal work, there may be specific considerations that have to be plugged in. Client specific considerations. We'll talk about that a bit more, but knowing your client base is important when you're crafting your retainer agreement. Fees are key ADR for client disputes. Like I said a lot of state and local rules impact that as well. But you also wanna think about ADR generally. And this goes to your client's specific considerations. Depending on who your client is going to be for that particular engagement, you wanna customize the ADR provisions to reflect that. And then ethics counsel. It, you know, having outside counsel look at your retainer agreements, audit your retainer agreements, update your retainer agreements are key. And it's a really underutilized and helpful resource for attorneys and firms.

So the ABA sample retainer, again it sort of hits on the major areas identification of the parties. It's shocking how many retainer agreements don't do that. And I think the problem is attorneys are very comfortable identifying who the lawyer or the law firm is, but can sometimes be a bit too vague about who the client is. And I think the issue is most lawyers want the work they want the business and they don't wanna limit themselves. But it really is important to narrow the scope. And if you're working for a client and then it grows into working for another client, a related client, a related entity, then just put out another retainer agreement that specifically identifies the parties. Again the same idea with the general nature of assistance. I mean most lawyers want the work so they don't limit the scope. They keep that scope as broad as possible. Maybe they carve out appellate work. Maybe they carve out criminal work things that they really aren't comfortable doing. But otherwise, generally speaking retainer agreements tend to be way too broad in the nature of the work. The respective responsibilities of the attorney and client.

It's important to outline the duty of candor flows both ways that the lawyer will be relying on the client's representations. Typically you do not have a duty to investigate your client and you can take your client's representations at face value again under the reasonableness rubric, but outlining that in the retainer agreement is very important. And the more detailed the retainer agreement is the less likely it will be that a court or a an ethics committee would believe when the client comes up with something very specific that isn't included in the retainer agreement. And it happens all the time, especially things like about staffing. Clients will often have the misunderstanding that a particular attorney is gonna be handling all aspects of their case and outlining exactly what the staffing is going to be in their retainer agreement is a very good step in really defining the scope of services. Outlining the fees, the hourly rate costs, what the retainer amount is going to be, if any. When the fees change if the fees change annually, if there's a fat flat fee agreement or any other alternate fee agreement. And if there's an alternative payment agreement if you know somebody rich uncle's paying, or if an insurance company is paying, or if anyone else is paying, it should be reflected in the fees. And this ties back into the identification of the parties, especially in situations where spouses are involved. If the attorney's representing one spouse, but the spouses are paying it's important to reflect that in the retainer agreement. Dispute resolution, as I said, the state and local rules often dictate what you can do in that regard, but within the bounds of the rules, you also wanna think if there's anything unique about the particular client or the particular practice area, or the particular matter that this retainer agreements for that should be included in the ADR provisions. And then general contract provisions. And these are often neglected in retainer agreements, but simple things like choice of law venue should it be plugged in. No modification. Anything you would put in a general contract or a lease that you have with that you draft for your clients, you should think about whether it's appropriate in your retainer agreement for that client and for each retainer agreement, you wanna have this analysis. The former retainer agreement is great, but it really needs to be customized and it needs to be updated. It needs to be a living document. The state and local rules, you have to know your jurisdictions rules, as I said it's more challenging in many ways that most states have adopted portions of the model rules, but it's better to get ahead of it and, really embrace whatever jurisdictions you're practicing in know what those rules are and how they apply to the retainer agreement and your professional duties to your client.

Many jurisdictions have specific ADR, another provisions fee and informed consent provisions recommendations for outside counsel, things like that. Not all jurisdictions require a retainer. Not all require a retainer agreement for specific practices for specific dollar amounts, but your practice must. I mean it's just a must. If you're going to practice law, you should use your retainer agreement and there's, I've never heard a valid reason not to. And I encourage anyone who has a valid reason to please email me and let me know what you think the valid reason is be an interesting discussion. I always invite people to do so. And I still have never come across a situation where it's better not to have the retainer agreement in place. Practice specific considerations, rule 1.1 competence rule 1.2, the scope are both key here. But certain practice areas regulated or otherwise require specific retainer considerations. You wanna assess the risks that are inherent in your practice area, whether it's vulnerable clients, vulnerable data, such as HIPAA regulated data or financial data and focus your retainer agreement there. That should really be something that you work up again the form retainer is a great starting point, but you wanna focus on the actual risks from that practice and make sure that you're doing your due diligence. And this allows you to do your due diligence on your client, while you're developing the retainer agreement. Client specific considerations, touch on a lot of rules for incapacitated in competent clients. Rule 1.14. Minor clients, spouses and estates. Rules 1.4, 1.8 and 2.3 are impacted business partners, huge source of problems rules 1.8 and 1.13. Corporate clients and Upjohn warnings representing corporations and dealing with corporate employees touches on rule 1.13. Pro bono clients which are a huge source of risk to attorneys. And require the same level of professional care. Are they a paying client of course. Rule six covers our obligations to our pro bono clients, conflicts of interest, the major source of ethics risk and legal malpractice risk. As we talked about before are covered by rule 1.7 through 1.12. I mean they're pretty specific the general rules and then, and really do dive down into these specific instances where conflicts of interest can be key. And then just the simple question of who's signing the cheque? And then you know it typically does not matter who's paying for the attorney's services, but that can be a factor. And again if it's outlined clearly in the retainer agreement, I'll be many less problems later on when there's a problem. And someone's claiming that they're the client because they were paying the bills. It's much harder to defeat that when there isn't anything reflected in their retainer agreement fees generally in there. Jurisdictional rules cover these in much greater detail. If you're using an alternative fee arrangement of any kind you want that clearly defined clearly delineated in the retainer agreement. As best as you can you wanna define every aspect of the financial interaction between you and your client. If allowed in your jurisdiction include withdrawal provisions for nonpayment, late payment interest, things like that. A great metric is if that your fees change, the scope of the work has changed and that's an excellent time to audit your engagement agreement. ADR, as I said is specific jurisdictional rules, generally speaking consider if allowed, consider arbitration agreements. There's considerations informed consent and independent counsel there consider building in disclosure and notification requirements and outlining what those are. And then of course, again before you go plugging anything into the retainer agreement, but especially ADR related provisions, talk to your insurer, look at your policy. Make sure that by building binding arbitration into your retainer agreement, you're not impacting your insurance in any way.

And then ethics counsel. Engage outside of the ethics council to prepare your retainer agreements or, and or I guess, engage outside ethics council to review your retainer agreements and conduct the audits. As attorneys we can't outsource our ethical responsibilities, but we can and should outsource our risk. So to the best you're able find ways to mitigate the risk by bringing in competent support. Malpractice point the CYA letter, the CYA email really is, an excellent tool. Rule 1.4 requires reasonableness. You want the communication to really be unreasonable. I typically just warn my clients in advance that every time we hang up the phone, I'm gonna shoot you a quick email, just memorializing what we talked about, it's good for you it's good for me. It, it makes sure we're on the same page. And also as years go by and we need to remember what was discussed we have it readily available. Contemporaneous communication in writing is really key. The email follow-up for meetings, for phone calls, for any event in the transaction or in the litigation. It really is our best, best practice and risk management tool. And it ties right into the evolving living retainer agreement. As the contemporaneous communications are flowing through email, just keep tabs on that. That's the pulse of the case and at a certain point, you can just take those emails and plug them into the formal retainer agreement, quarterly. annually, whenever you update them and make sure that the scope is really captured and precise. Keep track of billing and too often attorneys, instead of using the contemporaneous writing the email, too often attorneys use their bills as a way to, follow up from conversations and phone calls but you don't wanna put privileged, sensitive or confidential information into the bills. In most jurisdictions they're not privileged in and of themselves. And typically the client's not gonna see that for a month, three months or more. If you have entity clients or insurance clients, the client who handles the day to day in the case might also never see the bills. Some other department might be handling that. And then just an overall practice point, but especially for communications writing only get the information you need. If you don't need a social security number, if you don't need a bank account number, don't get it. All too often attorneys attempt to get as much information as possible from our clients and then filter out what we need and what we should use. And that's a great instinct and it's a great practice, but when it comes to sensitive and valuable information, if you don't need that social security number, don't bother getting it. Don't put it in writing, don't save it to your system. If you don't have it, then it can't be taken in a cyber incident or anything else. I mean it really is. Sometimes we cast too big a net and you wanna think about that if you really do need that sensitive information. I like to highlight here that your communications, your email should have some sort of disclaimer, here no attorney client relationship is formed and this presentation does not constitute and should not be considered legal advice. You'll want your emails to reflect that they may contain privileged information or attorney work product, and just try to protect your contemporaneous communication as best you can. So you wanna develop a risk management strategy and policies and before you can do so, you have to identify your risks. You have to figure out what risk you want your retainer agreements to address. And again client considerations, jurisdictional considerations, practice considerations are all going to be key here. And it should not be a one size fits all approach. Even if you only do landlord tenant work.

Now, you shouldn't have one retainer agreement for every single client for every single matter matter. You wanna establish a formal retainer agreement. You want to use that form retainer agreement where appropriate, but have other form retainer agreements for other matters. Other client types, other jurisdictions and the jurisdictions may not be in another state, but even another city. Again if you're a landlord tenant attorney maybe each city has a retainer agreement that addresses the specific risks inherent in that area. You need to update the retainer agreement regularly and audit your retainer agreements and have an outside attorney, even if it's not outside counsel, even if it's just another attorney from your firm audit and review your retainer agreements. And use that as an opportunity to make them better. You gonna enact firm-wide procedures, whether it's a three person firm or a 500 person firm, you wanna have some consistency. And again using the form retainer agreements is a great first step, but the updating process, the auditing process, you want all of that to be enacted firm-wide and uniform. And it really does speed things up if everybody's using the same general form and making sure everybody's hitting the same important points. And then coming up with a plan, a notification plan for clients, your council, your carrier. Courts, and bar associations. You need to have everything drawn out in advance, what to do when there's a problem. So many times when there is a problem, especially an ethics issue everyone gets excited everyone gets upset and starts from scratch, and you should have the business card of your ethics council ready. You should have ethics counsel retained so that they'll pick up the phone right away. And there's no need for them to conduct a conflicts check. There's no need for them to figure out who you are, what your practice area is, who they need to talk to they're ready to go. Same with your insurer. You should know your policy and have contact ready so that you can provide notice as quickly as possible and then get ahead of any problems you wanna plan for early resolution with your clients. It's again, ADR with clients is generally very jurisdictional specific, but within the bounds of your jurisdiction, you wanna be thinking about how you can resolve claims and ethics issues with their clients before it is a problem, have a plan in place. Most firms now have a plan for legal malpractice claims. They have a plan for cyber breaches, or they should, but generally firms are deficient when it comes to a plan for ethics issues. It's sort of left to each lawyer to fulfill their professional responsibility duties and as I said we can't outsource those duties. It is on each individual attorney to meet their ethical obligations, but you can mitigate that risk. You can outsource the risk. And so having a plan in place a firm-wide plan and having your retainer agreements be part of that plan and updating them and auditing them and making sure they really do address the risks you're facing are absolutely key to getting ahead of ethics problems before they develop.

I think a major area of potential risk mitigation risk mismanagement is vendors and including vendors in your retainer agreement really can be a helpful tool. Not only does it let the client know you're using the best discovery people, or you're using a particularly cost-effective legal research program or whatever it is, it can be used as a selling point from the client management perspective, but it also makes sure you're doing your due diligence on your vendor. It clearly outlines your vendor's role. It lets you think about insurance, your insurance considerations, your vendor's insurance. It lets you find out in advance your vendors, information security, general security, their information and data retention. And lets you look at your vendors, engagement agreements. So many times the vendor provides their standard engagement agreement. And they're to some extent contracts of adhesion, they're just accepted. That's what the court reporting company requires. That's what the e-discovery guys require but you can build those into your retainer agreements. You can customize those contracts with your vendors of course, and attempt to outsource risk through vendors. And this is putting vendors in the retainer agreement, but also just generally speaking. Again you can't contract away your professional responsibilities, but you can contract away some of the risk. I think anytime a vendor and a vendor can include even an expert, anytime they're brought into the case anytime a vendor is needed for a transaction, it's again a great spot to check the batteries in your smoke detector and say, is our retainer agreement still applicable? Is this scope of services still on point? Do we need to identify the parties differently? Are we representing the same client has another entity sort of crept in here? And mission creep in the practice of law is a real problem. And I think it's because you never know when you sit down with the client for the first time. Or these days when you Zoom with the client for the first time, you don't know where the case or the deal is going to lead. So that initial retainer agreement is really just your best guess. And that's why the form retainer is great because it's based on your experience and your firm's experience, but it needs to be customized and then it needs to evolve as the matter evolves. So any milestones you can come up with, whether again it's quarterly or retaining an expert or another vendor, or any milestones you can build in firm-wide to audit and review your retainer agreements is really key.

So some big picture takeaways here the retainer agreement really is our best tool. It makes us better lawyers it brings out your best practice and just makes you your representation more precise. Again almost every rule in the model rules impacts the retainer agreement in some way. So it really does cover the entire attorney client relationship and should. And it's a great risk management tool. It lets you really define the scope of services, insulate yourself as best you can make sure your client has the same understanding that that you do, of what your job is, what your role is and what services you'll be providing. It also let you get ahead of fee disputes and issues that could develop down the road. And again, you, the last thing you wanna do is have an issue with your client, have a complaint filed or a grievance with the ethics committee, and then be going back into the file to dig out your retainer agreement, to figure out what it says. You should know in advance, what it says, and you should have a plan for when and if an issue comes up. You need to educate your people.

So again most firms have a form retainer agreement that's disseminated and maybe even through practice groups or different offices. But it's sent out and then it's sort of on each individual attorney to use the retainer agreement. And oftentimes firms don't even have a system in place to make sure there's a retainer agreement that's actually returned and executed, but it's pretty rare to have a firm that is continually updating their staff and their attorneys in the living evolving retainer agreement and how it can be used to control the scope of services. You wanna have use an updated retainer agreement for every single engagement, every client, every matter, even if you have 50 matters for the same client, you should have a living retainer agreement for each of those 50 matters. And again your client can be made to appreciate it. It's good to give them a heads up, to warn them in advance, let them know what's happening. Don't charge them for each one of those. But use that as a best practice point and a client management tool sell it to them because it really is to their benefit as well as yours. And use a smoke detector analogy. Again, you need to update it. It has to be, there has to be milestones built in so that you're looking back at the retainer agreement periodically. And really the best thing to do is just do it every quarter or annually if needed. Auditing the retainer agreements. It's great if you can retain outside counsel to do that, but it doesn't have to be outside counsel. It can be just another lawyer in the firm who looks at the file, looks at the retainer agreement and make sure in their opinion, it's an appropriate fit and doesn't need to be updated in any way.

Anytime I discuss ethics, I like to talk about the host of professional resources available. The ABA maintains the lawyers professional liability hotline. The number is 1800-285-2221 extension 5754. And most state and local bar associations have similar hotlines available. Some are at 24 hours some are via email, but know the resources your know your jurisdictional rules, but know your jurisdictional resources as well. The ABA's legal technology resource center is especially helpful in dealing with the ever increasing role of technology in the practice of law. And then know your firm's resources know your ethics council. Use your insurers. Those are all great resources again, that are only great if you use them in advance. And then other attorneys, judges, law professors, or mentors. Even a solo practitioner does not practice law alone. We all daily in our practice, we all interact with other lawyers who are bound by the same professional duties we are. And make sure you have someone available that you can discuss issues with as they arise. And then me, my contact information is available. And I think you should practice your best practice tool of the contemporaneous writing. Shoot me an email. Let me know what you think. Let me know if you have any questions and try to build that into your daily practice, to follow up every call, every meeting, every milestone in the case, or the deal follow up in writing. And use those email CYAs to develop your evolving living retainer agreement.

There are a host of COVID-19 resources out there. The ABA's coronavirus taskforce is, comprehensive. I, in particular, like Winston Strong's COVID-19 client resource center, It's just what I used early on and I always recommend it to to clients and other attorneys. My firm Goldberg Segalla LLP has a coronavirus resources and rapid response taskforce, which is impressive sounding. It's also a great resource, your state bar associations and courts. I mean everybody's been trying to deal with, with this issue. And I think the key to the professional resources and the COVID-19 resources is really just to, to pick one you're comfortable with one you like and know how to use again before a problem arises that way you're ready to go. You don't have to start Googling randomly to find resources, you have that ready to go.

So to recap the retainer agreement is really our best practice tool. The scope of the services, the identification of the client are really key and allow us to, to really provide the best service possible while at the same time being a excellent risk management tool and limiting your exposure to legal malpractice claims, ethics complaints, and the host of risk that attorneys and firms face. If you're a better lawyer, you're a safer lawyer and an evolving living retainer agreement makes you a better attorney. You have to know the jurisdictions you are practicing in, and each jurisdiction has its own challenges and its own specific considerations. But that living retainer agreement is not enough. You need to have one for every client for every matter, but they need to be updated in audit. You need to have outside counsel or at least another attorney who's not handling the matter periodically review your retainer agreement and make sure that it's providing, the appropriate scope of services and the appropriate protections for both you and your client. Practice in the days of COVID-19 is even more challenging. And I think it's going to get worse before it gets better, but the retainer agreement really is an ideal tool to do so. I urge you to pull up your retainer agreement that you use following this presentation, and then pull up the ABA sample or your local bar associations sample retainer and really compare them. So many times I see retainer agreements that were clearly drafted, maybe on a computer, maybe on a typewriter. I mean they're oftentimes older than I am. You can just tell and they, that's not doing anybody, any kind of service. They need to be updated they need to be customized. And they really do need to identify the parties, the general nature of the services, the responsibilities of both the attorney and client outline the fees as detailed as possible to the extent available to provide for dispute resolution between the attorney and client, and then to include the normal general contract provisions, you would plug into any contract. And so often that's an neglected step. And I don't know why that is, but it's completely unnecessary and attorneys who would otherwise never leave simple things like a provision that says that you had the opportunity to consult with counsel or that this is the complete agreement where it can be only modified in writing would never leave that out of any contract they drafted for a client, leave it out of, of their retainer agreements. And oftentimes it's because it's not in the form that they've used since 1975. So you wanna make sure you treat the retainer agreement for the contract that it is.

Again, in conclusion, my name is Jeffrey Cunningham, I'm a partner at Goldberg-Segalla in White Plains, New York. No attorney-client relationship is formed and this presentation does not constitute and should not be considered legal advice. Don't forget your best practice homework. And shoot me an email at jecunningham C-U-N-N-I-N-G-H-A-M @goldbergsagala.com. Let me know what you thought about the presentation and let me know if you can think of an instance where having a retainer agreement would be a bad thing. Thank you so much for listening.

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