Nowhere is the phrase “Start with the end in mind” more profound than when entering into a lawyer-client relationship. This critical first phase has more to do with planning than the proper application of statutes or the knowledge of applicable case law. It also may be more important to both the client and the attorney involved than either the law or the skills of the firm.
The first and critical question that you must ask is: What kind of business am I running? Do I intend to have a profitable business? Is my goal to be a helping agency and non-profit? Perhaps I will end up as an outright charity?
Even before greeting the potential client at the first meeting, decide how you will handle the relationship. Naturally the intention is to be open and honest. Will you be casual and very user friendly? Will you be in charge of the relationship with firm client control? Open to do whatever the client asks like a loyal employee? Whatever your style, you are not in control of how the client’s situation presents itself to you at the beginning of the case. Accordingly, your underlying question should be – How will the relationship end for you and this potential client?
An attorney may outright state that they will never sue a client. If your philosophy is that, as a helper, you should never sue a client for fees, you need to be firm with yourself as well as clear with your client where the economic lines are drawn. Part of this first meeting requires creating a clear understanding of the business side of your relationship, with guidelines for fees, costs and accounting discipline. It also requires foresight about the engagement – what it will take, in time and costs, to move from where the client is as she walks into your office to where the client wants to go (and just how far you are willing to guide her.)
Will you and your client agree to a renewable, or evergreen, retainer agreement? There are draft agreements of such available from the State Bar of California web site. The goal of an evergreen contract is that your trust account balance is always in the green, and you are never left pining for your fees. The initial deposit must be sufficient to pay for your time and all anticipated costs – either entirely through the process for which you are being engaged or at least to a point of pause: that point where the case can be handed back to the client or to another attorney. At each “pause point” you, as the attorney and business person, are required to recheck the balance in this client’s account to ensure you have sufficient funds to proceed to the next point or require a renewal of the retainer – additional payment – to get to that next step. Without that renewal, are you prepared to quickly disengage/withdraw as her attorney as ethically appropriate?
Will you decide the client’s cause will become yours? Will you represent this client through and beyond the point of their ability to pay for services? Will you contribute your time and money once the client can no longer pay for your services, i.e., continue the case as a Pro Bono matter? If you are at a critical phase of the case, your professional responsibility as the attorney of record may require you to “grant credit” to your client as the Court will not allow you to withdraw. You cannot tell, at the beginning, whether this Client will be credit worthy at that distant point in time; so you must ask yourself if the situation is so compelling that you are willing to financially support this Client in her cause?
The first actual meeting with the potential Client naturally includes gathering information and gaining an understanding of the legal matter(s) to be handled. The breadth of information must not be limited to those pieces relevant to the legal issues. The various legal issues required to prosecute the case certainly are legitimate areas to be gathered – thinking of your skill set or level of knowledge and amount of available time for research and pursuing the case. With your business hat on, you must also require/seek information about this potential client’s ability to fund the case including non-liquid assets you can look to later in the relationship. Litigation is generally more expensive than either the Client knows or the lawyer wants to believe, before the case begins. You need to ask “If this gets really involved, will I find myself worried about more than just doing my best legal work? Will I worry about prevailing on the legal side but losing on the business ledger?”
Once the information gathering part of the initial interview is complete, you and your client must mutually (remember you are not yet the advocate at this point but rather two individuals agreeing to a bi-lateral and mutually beneficial and respectful relationship) agree to the kind of relationship you will enter. There are several possible options, which include the following.
- If the decision is not to continue you might agree to simply not have a business relationship and conclude the relationship with a non-engagement letter. You can thank her for considering your firm and be clear you are not her lawyer for the purpose discussed or at all. Be sure to relate that she would be wise to consult another attorney about her situation so as to protect her rights.
- Similarly, if the need presented has been met and no further services are desired, here too you need to conclude the relationship in writing, worded slightly differently, and include an invoice for your consulting services.
- If you decide that you are only willing/capable/client-funded to perform a portion of an expected longer legal process, a Limited Scope Representation agreement may be appropriate. This can be done with a Client Retainer agreement that you draft or with a Judicial Counsel Form designed for this purpose. Be aware, before presenting this option, of how to disengage. This engagement is not necessarily automatically terminated (eg one must still generally obtain a Substitution of Attorney after a limited scope representation has been completed) so that last bit of legal work required to end the relationship, if you intend to be paid, will require you to start the process before the trust account is fully expended.
- Perhaps the total action is not expected to cost more than $1,000.00 and no written engagement is required. While this may be correct, consider having a writing nonetheless. Through painful experience one learns the value of being clear about who will do what and for how long. Keep your client informed of how close to the end – of the task and of the funding – the case is coming so there are no unmet and unsupported expectations.
- Contingent fee arrangements can sometimes hold the promise of a big payday at a future date. A written agreement is absolutely necessary and some special language is required to be included. The State Bar’s web site provides several sample fee agreements, including for Contingent Fee arrangements, which are commended to the prudent practitioner. No matter how promising the case, have the client fund the costs – being clear what those might be. If the Client feels no financial pain in the process, demands can be unrealistic or the weary or distracted client can become disinterested or unresponsive/unavailable. Either way, your expected result can be lost. No matter how large your portion of the recovery, that percentage of a zero result is still zero.
- A “Standard” Retainer Agreement”, also available from the State Bar web site, is required for all the others and you should do a good job setting forth requirements and duties of both the lawyer and the client. Do not expect a non-lawyer to understand them as you do, so time must be allowed for explanation with you and after the initial interview including the suggestion that they consult with another attorney about your relative rights and responsibilities. I would not recommend an “on the spot” engagement.
You and your potential new client are only now on the edge of a great adventure. You both will travel but you have the responsibility to manage, keep information flowing, and know when it may be time to end the relationship – even if that is before reaching the stated destination. Keeping the end in mind, your “end in mind” must be where you and your client legally disengage, with your bills fully paid, and both you and your client convinced that the best possible outcome was achieved at a just cost. This result will only be achieved by being clear at the beginning, informative through the process and ending – whether at the first meeting, at some set and agreed time during the course of the case, or at the completion of the journey – with a closing letter thanking them and stating the Attorney-Client relationship is over. When this is achieved, you will know success as a lawyer and success in the business of law.
D.J. Hartsough has been practicing law for more than 22 years. His practice in Brentwood, CA focuses primarily on commercial collection, some collection of spousal and child support, and, going forward, on Estate Planning.
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