Coulda, Woulda, Shoulda: Communicating With Clients (Special Credit)
Here's a primer on ethics rules that apply to lawyers' communications with clients, and tips on how to comply with them.
Communication is a lawyer’s stock in trade. It’s what we do. We prepare and present legal arguments; question witnesses; advocate in court and in other forums; communicate offers and demands, proposals and counters, recommendations and warnings. Although all of these communications are important, the most vital among them are the ones that flow between counsel and his or her clients and potential clients.
This article discusses the ethics rules that apply to lawyers’ communications with clients, makes suggestions to try to ensure compliance with those rules and hopefully will lead to happier clients and avoidance of claims based on alleged failures to communicate with clients.
Get it Right from the Get-Go: Do a Conflict Check
You might think it goes without saying that lawyers should get each engagement with a client off on the right foot by properly documenting the engagement and communicating those terms to the client. But, in fact, it does need to be said. Frequently lawyers are so enthused about opening a file and anxious to get on with the work that the steps they need to take – both required and recommended – are forgotten, ignored or given short shrift.
Before any engagement can begin, attorneys need to complete a conflict check. See Cal. Rule of Prof. Conduct (“CRPC”) 3-300 regarding representation of adverse interests. Many potential clients are anxious to share information about their needs and desires during their initial conversation with prospective counsel. However, lawyers should resist letting the client convey substantive information about the matter at hand beyond what is necessary to compete a conflict check. If the client communicates a great deal of information and it turns out the lawyer or his firm represents an adverse party, the lawyer is not only conflicted out of taking the new matter, but the firm may have to withdraw from representing the existing client. See Walker v. Apple, Inc., 4 Cal.App.5th 1098 (2016)(conflict led to disqualification of plaintiffs’ counsel in class action). So, at the outset of a budding relationship, the first issue to be sensitive to is the need to limit communication until a conflict check has been completed and it is clear that the lawyer may accept the client and engagement.
The conflict check may reveal that a conflict exists. If so, the lawyer must address it in writing to obtain an appropriate waiver. See CPRC 3-300(C). The terms of such waivers are beyond the scope of this article. The point to be made here is to ensure that the conflict is addressed at the outset of the engagement. And, if a conflict waiver is needed, be sure to get it signed. An unsigned conflict waiver is of limited and potentially no utility in defending against a claim.
What’s the Matter: Define the Scope of Engagement
It is also crucial in the early stages to communicate and document the terms of the engagement to ensure that the lawyer and client agree on exactly what the lawyer is being retained to do, and on what terms. In short, the lawyer and the client need to define just what the engagement entails.
In many instances, a written retainer agreement is required. See Cal. Bus. & Prof. Code § 6147 (regarding contingent fee agreements) and § 6148 (regarding non-contingent fee engagements).
All too often, disputes arise, with the client claiming the lawyer was to do certain tasks, while the lawyer adamantly argues that the engagement was more limited. Having a countersigned engagement letter from the client is the best evidence to help avoid such a situation. The best practice is to calendar to check on whether the signed conflict and engagement letters have been returned. The follow up date must be on a short fuse because lawyers should not do any work until the client has signed and returned these documents.
It may be worth documenting even seemingly mundane matters in the engagement letter, such as the lawyer will communicate with the client at a particular address and a particular phone number. Doing so will avoid misunderstandings and hopefully will prevent clients from later claiming lack of knowledge because the lawyer sent her reports to the “wrong address” or left a voicemail on the “wrong number.”
If the lawyer has gone paperless, it may be worth telling the client up front that the lawyer will not be maintaining a paper file. Also, if the firm has a document retention/destruction policy, let the client know about it at the outset so the client knows (and hopefully remembers) to request copies of any materials it wants along the way, to avoid the risk of the lawyer later destroying the file and the client belatedly claiming it wanted materials from the file. (This issue is discussed further below.)
While many clients are sophisticated and will understand the terms of such letters, there are many who will not. Obtaining signed engagement and conflict letters is better than no letters at all, but the lawyer’s defense to claims of malpractice or breach of fiduciary will be much stronger if the lawyer can testify that she called the client and explained what the letters mean. The benefit of investing a little time on these file opening tasks far exceeds the downstream cost of paying one’s errors and omissions deductible and suffering the impact on one’s insurability if the client later claims he did not understand what he was signing and contends that the lawyer made no effort to explain the documents to him.
What’s Going On?
Lawyers are required to communicate with clients about the matters they are handling. See generally Neel v. Magana, Olney, Levy Cathcart & Gelfand, 6 Cal.3d 176, 189-190 (1971)(an attorney owes a duty to communicate to his client whatever information the attorney acquires in relation to the subject matter involved in the transaction or case).
The rules of professional conduct specifically provide that a lawyer “shall keep a client reasonably informed about significant developments relating to the employment or representation, including promptly complying with reasonable requests for information and copies of significant documents when necessary to keep the client so informed.” See CRPC 3-500. Similarly, it is the duty of an attorney “to respond promptly to reasonable status inquiries of clients and to keep clients reasonably informed of significant developments in matters with regard to which the attorney has agreed to provide legal services.” Cal. Bus. & Prof. Code §6068(m).
The fact that California has two requirements that lawyers communicate with their clients and keep them informed of the status of their matters demonstrates how important communication is to meeting lawyers’ professional obligations. This is underscored by the fact that failure to communicate is frequently cited as one of the main factors leading to malpractice claims. Clients will sometimes forgive attorneys for making errors, but forgiveness can be hard to come by when the lawyer did not let the client know what was happening during the engagement, particularly if what was happening was adverse to the client’s interests. “No surprises” is one of the bedrock principles of good client service.
There is yet another vital aspect of the “full disclosure” rule: the statute of limitation for legal malpractice may not be triggered until a client understands that there has been a breach of duty. See Neel, supra, 6 Cal.3d at 189 (“Where there is a duty to disclose, the disclosure must be full and complete …. Postponement of accrual of the cause of action until the client discovers, or should discover, the material facts in issue vindicates the fiduciary duty of full disclosure….”).
Given the duty to keep clients well informed, lawyers should identify the best way to communicate with their clients – orally or in writing, by letter or email, at home or at work. In many respects, writing, whether by letter or email, is best. However, even if the lawyer and client decide that written communications are best, there are still decisions to make. For example, if the client is an individual, is she writing to the lawyer on her employer’s email? If so, issues will likely emerge as to whether any such communication will be privileged. See Holmes v. Petrovich Devel. Co., 191 Cal.App.4th 1047, 1051 (2011)(employee-plaintiff’s lawyer-client communications via employer’s computer system were not privileged). For these reasons, the lawyer and client should communicate via the client’s personal email address at every turn.
By virtue of the lawyer writing to the client, the client will have time to reflect on and absorb the contents of the lawyer’s communications and can refer to them later if need be. Also, writing provides a record of what the lawyer told the client, helping to avoid a swearing contest down the road if the client claims his lawyer did not tell him of certain risks, strategies or costs.
To bolster the lawyer’s defenses (should they be necessary) and to ensure that the client understands where his matter stands, written communications may offer to set up a call to discuss the engagement. That way the client cannot claim that the lawyer never offered to provide additional explanation if the client later claims that the written communications were too complicated for the client to understand. Further, some clients have litigation guidelines which contain reporting requirements. These should be calendared and adhered to.
Bills Can Communicate Too
Lawyers should not forget that every invoice sent to a client is a communication with the client. Each entry is a way to convey to the client what work the lawyer is doing and why it is important. Therefore, taking time to create substantive entries, as opposed to “worked on case” or “drafted brief” not only serve to educate the client as to what the lawyer is doing, but can also serve to demonstrate to the client that the time incurred is worth paying for.
Other clients may tell the lawyer they do not want to pay for the time involved in preparing written reports. If so, the lawyer has at least two options. One is to explain to the client why written reports can be a benefit to the client and, therefore, are worth the cost. If the client is resolute in opposing written reports, it falls on the lawyer to maintain detailed notes setting forth what the lawyer and client discussed. There is no substitute for a contemporaneous record of what the lawyer and client discussed if a dispute arises, as opposed to relying on recall to establish what the lawyer says she shared with her client.
Make Sure the Client Understands
With the graying of the client population, lawyers should be sensitive to the fact that communicating in a way which clients can understand may become more challenging. Taking steps to ensure that the client understands the lawyer’s communications so the client can knowingly consent to a course of action may become more difficult.
Since a client’s mental condition can deteriorate over the course of even a few years, it is important for the lawyer to document what he did to communicate with the client and ensure that the client understood his communications. If the client or client’s representative makes a claim against the lawyer, the judge and jury may see a far different client from the one with whom the lawyer communicated and whom the lawyer believed gave knowing consent to the lawyer’s advice. Contemporaneous notes about what the lawyer did to ensure his client understood the lawyer’s advice may be critical to defending against claims.
Merely sending letters and getting a “yes” or “no” response may not be sufficient to establish that the client understood and consented to the advice. Writing or calling the client to explain the advice may make a huge difference in how the trier of fact resolves issues of consent. An even better practice is to actually meet face-to-face with the client for this purpose. Meetings are arguably the best approach if the lawyer has concerns about the client’s mental acuity, as the lawyer can look for visual clues about his client’s mental condition. It is critically important that the lawyer be confident – and later able to testify if need be – that the client understood the lawyer’s advice and agreed with the lawyer’s strategy and recommendations.
Frankly, the issue of clients understanding what their lawyers communicate to them is not necessarily limited to elderly clients. It would behoove lawyers to speak with all clients, regardless of age, when key inflection points and issues are reached to ensure the clients understand the advice being given and the risks and benefits involved. This includes discussing what many lawyers treat as “form” documents, such as the majority of the terms in settlement agreements, which lawyers frequently send to clients for signature with little to no discussion of anything in the multipage document beyond the financial terms.
Of course, “graying” is not limited to clients; it applies to lawyers as well. A 2011 California State Bar survey found that half of the state’s attorneys had been in practice for at least 20 years; 48 percent were 55 or older, and 43 percent were over 60. A loss of mental acuity can affect lawyers’ ability to keep up with the demands of their practice. Keeping clients informed is one of the first things that falls by the wayside when an attorney struggles to stay on top of her practice. Erosion of memory and judgment can undermine an attorney’s ability to meet her obligation to communicate with clients. And once again, a reminder: this unfortunate phenomenon is not strictly age-related. It can happen to “young” folks too. The key is to be aware and recognize the problem if and when it occurs.
Using a calendar system to remind oneself to report to clients is an easy way to try to avoid this pitfall. Even sending a report every month or two to say “no new developments” can go a long way to helping clients feel that their lawyers are paying attention to them, as well as to the work undertaken, and help avoid claims based on an alleged failure to communicate.
Offers of settlement are so important that the California legislature has codified how lawyers must handle them. For example, the code provides that:
A member of the State Bar shall promptly communicate to the member’s client all amounts, terms, and conditions of any written offer of settlement made by or on behalf of an opposing party. As used in this section, “client” includes any person employing the member of the State Bar who possess the authority to accept an offer of settlement, or in a class action, who is a representativef a class. Cal. Bus. & Prof. Code § 6103.5(a).
This section does not state that the lawyer must provide the written offer of settlement; rather, the lawyer must communicate the amounts, terms and conditions of the offer. Better practice would be to provide the actual writing so there is no dispute as to what the attorney told the client about the offer. If the lawyer, for whatever reason, elects not to provide the written offer, she should keep detailed notes as to how and when she communicated the terms and what the client’s response was. (See Hill v. Kaiser Foundation Health Plan, 2015 WL 5138561 (N.D. Cal.)(regarding duty to advise of settlement offer.)
A further gloss stems from CRPC 3-510 which likewise addresses how lawyers should handle offers of settlement. That rule provides that:
- A member shall promptly communicate to the member’s client:
- All terms and conditions of any offer made to the client in a criminal matter; and
- All amounts, terms, and conditions of any written offer of settlement made to the client in all other matters.
As used in Rule 3-510, the term “client” includes a person who possesses the authority to accept an offer of settlement or plea, or, in a class action, all the named representatives of the class.
While the rule refers to written offers of settlement being conveyed in civil matters, the notes to the rule state that the rule is intended to apply to written and oral settlement offers in criminal matters, too, and “[a]ny oral offers of settlement made to the client in a civil matter should also be communicated if they are ‘significant’.” While the comment to CRPC 3-510 refers to “significant” offers, the better practice–since “significant” leaves room for interpretation–is to convey all offers to the client with whatever advice or comment the lawyer wants to include as to whether the offer is significant and deserving of a response. See Hill v. Kaiser Found. Health Plan, supra; Hernandez v. Vitamin Shoppe Indus., Inc., 174 Cal.App.4th 1441, 1461(2009)(duty of attorney to communicate settlement offers under CRPC 3-510.)
End of the Engagement
While it is crucial to report to the client during the engagement, communication at the end of the engagement is equally important. Several considerations come into play.
Statute of Limitations
First, the statute of limitations for legal malpractice claims does not begin to run while the attorney continues to represent the client on the engagement at issue. The governing statute provides that the running of the limitations period is tolled during the time that “the attorney continues to represent the plaintiff regarding the specific subject matter in which the alleged wrongful act or omission occurred.” See Cal. Code Civ. Proc. § 340.6(a)(2).
The lawyer may think it is obvious that the engagement ended at a certain point in time and upon the completion of certain tasks. However, a failure to make that clear to the client may allow the client to contend years later that the engagement never ended because the client expected the lawyer to continue to provide advice and services. As a result, the lawyer may find herself on the wrong end of a tolling argument. Therefore, it is important to send a concise communication stating that the lawyer’s work has been completed and the engagement has ended. By doing so, the lawyer will have a clear, contemporaneous communication on which to rely if she needs to demonstrate that a malpractice claim is untimely.
Lawyers can have belt and suspenders’ evidence by sending final invoices for engagements, clearly marking them as “Final Invoice.” This is another way to communicate to the client that the work is over and the lawyer will not be taking further action on the client’s behalf. Lawyers should make sure that their internal records reflect that the engagement has concluded. That means communicating within the firm to accounting and billing personnel to close the file. This would be a third piece of contemporaneous evidence to demonstrate when the engagement ended.
Second, lawyers should be sure to return all original documents to the client and advise the client of the lawyer’s file retention policy. There is no set time period for maintaining client files in closed matters, and different types of documents are governed by different rules. (See State Bar of Cal., Standing Comm. on Prof. Resp. and Conduct, Formal Op. No. 2001-157.) For instance, under CRPC 4-100(B)(3), a lawyer must “maintain complete records of all funds, securities, and other properties of a client coming into the possession of the [lawyer]” for at least five years. File retention is a complex issue outside the scope of this article, and lawyers must assess each of their files separately.
Nonetheless, lawyers can approach communications regarding file retention in at least two ways. One way is to calendar a date several years hence on which to communicate to the client that the file is about to be destroyed per the lawyer’s document retention policy. However, this is potentially problematic, not least because it can be difficult to find the client several years down the road or find someone at the client who understands the engagement and can make an intelligent decision about what, if anything, the client wants to retain from the file.
A better approach would be to advise the client in the “file closing” letter what the firm’s document retention policy is and ask if the client wants anything from the file. The letter should also tell the client that the file will be destroyed at a set time in the future without further notice to the client. That way the client can assess whether it wants anything from the file while the matter is fresh in its mind and the lawyer does not have to deal with the time and potential aggravation associated with sending a notice years later.
And remember: an equally sound practice is to advise the client in the engagement letter about the firm’s document retention/destruction policy and have the client agree to it as the relationship begins.
What Did We Learn Here?
Third, if the lawyer has not already done so, excellent client service might include communicating a “lessons learned” review to the client. Whether the engagement involved a transaction or litigation, there is almost always something that can be learned and applied to the client’s future business and activities. While the lawyer may think that the client learned those lessons during the engagement, providing a summary at the end helps convey that the lawyer is thinking not just of the particular engagement, but is thinking about the client’s business and future as well. Such a report can be done without charge as a courtesy and as part of business retention/development.
Communicate Early, Often, and Always
As the late Joan Rivers famously said: “Can we talk?” When it comes to attorneys communicating with their clients, the answer should be yes, early and as often as necessary, and correspond as well. The result will likely be clients who have been well-served and lawyers enjoying reduced exposure to malpractice claims.
Steven D. Wasserman is a partner and Joel Kane is an associate at Sedgwick LLP in San Francisco.