Dear Ethics Corner:
I have a client I will call Servco. Servco has been my client for five years. They have always been a client who pays promptly and I have never had to battle them over fees, until now. It must be the economy, but they now “nickel and dime” me on every bill. The other day the CFO told me that he did not want to pay me for arranging a deposition date because he said my secretary should have done it. But I have always worked with opposing counsel to arrange dates myself and they always paid in the past. I believe that the more friendly contact I have with opposing counsel, the better it is at settlement time.
The CFO also told me that reviewing documents should be done by a paralegal. The CFO has begun to micromanage the case even to the point of telling me what motions I can file (read: what he is willing to pay for).
I guess I am at my wit’s end and want to let this fish go. We are just getting through with the discovery phase of trial so it is a good point to “cut bait.” I am worried though that he will fight me on this as I have given him a good deal and cut down his bill more than once in an effort to keep him happy, and I have done it for so long that he might not want to let me out of this case. Also, there is some animosity between us not only because of his tightfisted ways but because he values his case far higher than I do for settlement purposes. I think he sees it as a way to win a financial cushion for the company.
Even worse, I am worried he might say I did something wrong in the case in an effort to hedge his bets; i.e. if he loses, he goes after my carrier to cover his loss. I anticipate a battle, whether I withdraw or stay in. What should I do?
Very truly yours,
Worried in Walnut Creek
Unfortunately this is a common problem in 2011 and has been for a few years as clients seek ways to cut their costs. Lawyers have to be very careful when a client (who may or may not be a lawyer themselves) tells their attorney what she can and can’t do in a case, as it may just set the attorney up for a malpractice suit when the client loses. Generally, clients have the ultimate right to determine whether to accept a settlement offer, but it is the lawyer who must make strategic decisions in a case. You are wise to seek a way out of being Servco’s unpaid servant.
First, I would advise you to make sure your file is in order. Look through it and think about any possible complaint your soon-to-be former client could have about your handling of the case. Is there anything left undone or anything which needs to be documented for later proof that whatever occurred happened? For example, if you orally gave your client a settlement valuation of the case, did you put it in writing? Make sure you do before you turn over that file to new counsel. Any “CYA” e-mails or letters should be done now if they were not done before.
Second, you should try to get the client to sign a substitution of attorney form. The problem with that is sometimes clients hem and haw and drag out the process just to keep the attorney in the case and on the hook, even when they are not being paid. I have seen more than one attorney so worried about the client’s anger and a potential suit that he stays in hoping the client eventually gives him a signed substitution.
As they say in New Jersey, “Fuggetabout that noise.” If you cannot get a signed substitution from the CFO, then move on and file a withdrawal motion and base it on a personality clash with your client. A breakdown in the attorney-client relationship is a ground for allowing the attorney to withdraw. The fact that the CFO has a different valuation than you of the case alone may not be grounds for withdrawal. The mere refusal of a client to settle is not a ground for withdrawal because of the client’s right to reject settlement being absolute, unless he reneges on a settlement.
But before you file the motion, really think hard about whether you want to cut this “fish” loose. The economy is definitely improving and that anxious CFO might be less tightfisted as his company starts turning a profit. Ask yourself how much of your disgust with this client is really just your frustration with having to recreate yourself and your billing practices in hard times. The lawyer that cannot be flexible in these trying times will unnecessarily suffer.
If you still want to move forward with the motion, do it in camera and ask that opposing counsel not be present. That is because you have a duty to protect the confidential information of the client and you may have to describe the nature of the conflict with your client in general terms. But be careful – if you think arguing the merits of your motion will prejudice your client before the judge who will hear his case, ask that the motion be heard by another judge. The bottom line here is to say only what you need to say and to avoid speaking negatively about the client, even though it is tempting to do so.
Lastly, don’t charge the client for the motion. There is a North Carolina ethics opinion on this issue that essentially says that a withdrawal motion is really for the benefit of the lawyer and his professional obligation so shifting the cost to the client is unfair. There may be some exceptions to this where it is done with the client’s consent to advance his objectives, like in the situation where an insurer wants to be relieved of the duty to defend so the lawyer files his motion.
Good luck with this. It is always hard to say goodbye to an old client. But clients have to compensate you fairly and if they refuse, it is better to move on, market yourself to another CFO and “pray for rain.”
Very truly yours,
The Ethics Corner
Carol M. Langford is a lawyer specializing in ethics and attorney in Walnut Creek. She was recently selected to be a NIFTEP (National Institute For Teaching Ethics and Professionalism) Spring 2011 fellow. She is an adjunct professor of ethics at U.C. Berkeley, Boalt Hall School of Law.
Filed Under: Ethics Corner