The Alpha: Writing a Scope of Representation Clause
There is no longer any excuse for not having a well-written scope of representation clause. The Colorado Rules of Professional Conduct compel a lawyer who has not regularly represented a client to communicate “the basis or rate of the fee and expenses . . . , in writing, before or within a reasonable time after commencing the representation.” Colo. RPC 1.5(b) (emphasis added). Further, “[a]ny changes in the basis or rate of the fee or expenses [must] also be promptly communicated to the client, in writing.” For better or worse, the day of the handshake engagement is over, and for an attorney seeking to contain her professional liability, it is for better.
Rule 1.2(c) provides the most powerful professional liability insurance policy against ever conceived, premium-free: “A lawyer may limit the scope or objectives, or both, of the representation if the limitation is reasonable under the circumstances and the client gives informed consent.” Since Rule 1.5(b) requires an engagement agreement to be in writing, how much more time could it take for a lawyer to sign up for this free insurance? Two minutes? Three minutes? Yet this gift granted by the Rules is largely ignored.
Lawyers routinely sweat the most minor contract clauses. I freely confess to scouring my documents for the proper use of “will” vs. “shall.” I have lost count of the articles I have read regarding whether “defend, indemnify, and hold harmless” is superstitious surplusage or absolutely essential to an effective indemnity clause. Do you belong to the “including, without limitation” school, or the “including, but not limited to” camp?
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| The Plays of William Shakespeare (published 1864–68?) Illustration by H. C. Selous |
We brood over our favored legal incantations like the witches in Macbeth huddled around their caldron. “Eye of newt, and toe of frog, Wool of bat, tongue of dog . . . devise, bequeath, bequest . . . defend, indemnify, hold harmless . . . comes now the plaintiff . . . whereas, wherefore.” If we can just get the legal incantation right, we believe, it will have magical effect on the transaction, brief, or demand letter.
Yet when it comes to our own contracts, the ones that form the basis of our duties and obligations to our clients, we give them little or no thought at all. We delegate the drafting of engagement agreements to our legal assistants, which isn’t a bad thing since they probably give more thought and care to them than we do.
Instead of availing ourselves to the protection of Rule
1.2(c), we act as though we have never read it – sadly, many lawyers probably
never have. If they had, they would
never title a matter “general representation,” as was frequently done by
lawyers in the early days of my firm.
Lawyers are literally thoughtless when it comes to their own scope of
engagement clauses. And that’s a shame,
for as I wrote in The Rules of Unwritten Engagement,
when you don’t write your own scope of engagement clause, the law will provide
one for you. It looks like this:
1. Scope of Services. We shall provide all legal services you have requested of us, may request of us in the future, claim to have requested, thought about requesting, or should have requested, whether or not you actually request such services and regardless of whether we could have conceivably known or remotely anticipated your need for such services. Our work for you will be unlimited in scope, as will our liability for neglecting any such work or any deadlines, laches, or statutes of limitation associated therewith. After we complete the work, we assume full and continuing responsibility to advise you on all matters affecting the work we have performed or should have performed for you, forever.
There is, however, a simple expedient to escape the fate of this unwritten Scope of Service clause. When your assistant delivers an engagement agreement for your review, force yourself to spend five minutes, whether it takes that long or not, thinking about and drafting a thoughtful scope of engagement clause. Take this time to:
1. Consider precisely what the client has asked you to do.
2. If the client has asked you to keep your costs down (as they frequently do), consider whether the limitations on your representation that client has asked you observe are “reasonable under the circumstances” and whether you have sufficiently advised the client about these limitations to constitute “informed consent” under Colo. RPC 1(e).
3. If the limitations are reasonable, for God’s sake don’t fight the client’s wishes! Draft, and redraft a scope of representation clause until it clearly conscribes and precisely defines what you will do and, if necessary for the avoidance of doubt, what you will not do for the client.
4. Last, put the scope of engagement agreement up front – it deserves primacy.
For example, an engagement agreement with one of my lawyer-clients might begin:
Dear Atticus,
It was a pleasure to speak with you Thursday. Thank you for choosing Moye White LLP to represent Finch Law, LLC to advise it regarding potential conflicts of interest regarding your potential representation of the Haverford brothers. Our work will be limited to providing this advice unless you specifically request, and we agree to undertake, additional work pursuant to a further written engagement. Please understand that once the described services are completed, we do not assume any continuing responsibility to advise you on matters affecting our work unless we both agree in writing that our engagement includes providing continuing representation.
Five minutes, tops, to avoid the effect of the default,
unwritten Scope of Services clause.
Force yourself to take the full five minutes. Sweat it like you would a “no third party
beneficiary clause.” Your professional
liability carrier will love you for doing it, you’ll sleep better at night, and
if your representation is ever called into question your defense counsel will
be grateful that clear boundaries were set.
While Rule 1.5(b) has coerced most lawyers into writing some kind of engagement memorandum—even if they still eschew the benefits of limiting the scope of representation—the one letter most lawyers simply cannot bring themselves to write is the end-of-representation letter. To them it is anathema.
The same mindset that turns even compulsively neat and orderly lawyers into client-file hoarders, notwithstanding the unambiguous commandment of Rule 1.16(d) to “[u]pon termination of representation . . . surrender[] papers . . . to which the client is entitled”—see Making Molehills Out of Mountains—causes attorneys to spurn writing end-of-representation letters.
Some put off this best practice because they feel it will be off-putting – that the client will feel rejected and never return. Others see no economic value in writing a letter they cannot bill for. More often it is simply forgotten, like the thank-you note we mean to write, but seldom do. When a matter is finally concluded, particularly one that has been all-consuming or hotly contested, the primary emotion is a feeling of relief, followed by a sense of urgency to move on to everything else has been set aside. As a result, the end-of-representation letter is rarely given a second thought. That is, until a potential conflict interest arises which might have been avoided if an end-of-representation letter had been sent.
The Rules of Professional Conduct divide clients into three distinct classes: Prospective Clients, Concurrent Clients, and Former Clients. The rules regarding prospective clients are governed by Colo. RPC 1.18. See Prospective Clients. Conflicts of interest involving concurrent clients are governed by Rule 1.7. Conflicts involving former clients are the subject of Rule 1.9.
The primary distinction between concurrent clients and former clients is that the rules governing conflicts of interest involving the former are rooted in the duty of loyalty (or “undivided fealty” if you want to impress your lay friends), while rules governing the latter are grounded in the duty of confidentiality. (The nuances between these two—and there are many—will be the subject of a future blog.) For now what is important is that duties to former clients are generally limited to avoiding subsequent a representation which is “the same or a substantially related” to a prior matter, while disqualification arising from concurrent representation extends even to matters which are completely unrelated. As Comment [6] to Rule 1.7 instructs, “absent consent, a lawyer may not act as an advocate in one matter against a person the lawyer represents in some other matter, even when the matters are wholly unrelated.” (Emphasis added.) Through the operation of Rule 1.10 within a law firm this disqualification is vicarious, spreading more swiftly and efficiently than the novel coronavirus to every current member of the firm.
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| The Beatles i Hötorgscity, Stockholm 1963 |
If a representation ended long ago and was obviously unrelated to a subsequent matter, the concurrent client disqualification “trap” is usually avoided. This may reinforce the bad habit of not sending an end-of-representation letter. Like a VFR-only pilot who has successfully scud-run in the past without getting into trouble, a lawyer who has never been stung by an alleged concurrent client may feel charmed or invincible. This feeling is sure to evaporate the first time she is disqualified by someone claiming to be a current client, or when a putative current client succeeds in disqualifying her partner from a potentially lucrative representation. By then, however, it is too late to do anything except vow to never again fall into the trap. How does one do that? By making the end-of-representation letter so habitual that one feels unclean without writing one.
The concurrent client trap always arises in an adversarial context, most frequently in the form of a motion or threat to disqualify when the subsequent matter is litigation. However, business lawyers are not immune. A client that has paid significant fees to a firm, particularly over a long relationship, is inclined to believe that the lawyer’s duty of loyalty transcends any limitations imposed by Rule 1.9, and that the prospect of potential future representation should be treated as consideration for a type of unwritten, perpetual general retainer.
Situations that create an opening for the concurrent client trap are those where a client might credibly claim it believes the attorney continues to represent it, even though no legal work has been performed or billed (or collected) for months. Examples include:
1. Family and immigration law matters, where “final orders” are never really final;
2. Estate planning, particularly where the attorney has prepared more than one trust or testamentary document, or has been regularly consulted on tax and other matters;
3. Long-standing representation of any kind where a lawyer has regularly represented a client in sundry matters for many years, albethey far apart in time; and
4. Any matter recently concluded where an argument might exists that some further work is expected, for example performance under a structured settlement, or continuing advice regarding a contract under which performance is continuing, such as a lease.
It is in these situations that the end-of-representation letter’s worth should be self-evident.
Resistance to writing the end-of-representation letter I think is largely a state
of mind. Lawyers view the end-of-representation letter as a kind of “Dear John” letter that may insult a client and send it in search of new counsel in the future. But it need not be so. Viewed instead as a “Thank you, please come again” letter, the end-of-representation letter is good marketing – assuming the client is one you want to come again. The letter need not be long, or off-putting. Here’s an example:
Harrison Bergeron
1225 Seventeen Street, Suite 900
Denver, CO 80202
Dear Harrison:
Enclosed is a copy of your Last Will and Testament.
This completes our limited engagement for you in connection with advising you regarding your estate and preparing your Will. Please let me know if you would like to pick-up your file, or if you would like us to retain it consistent with our document retention policy.
We have enjoyed working with you and, should you have a need for legal services at some time in the future, we would welcome an opportunity to be considered to represent you again. You will be receiving an invoice for approximately $460.00 for the services rendered in August. Please pay the invoice in accordance with its terms.
Thank you again for the honor of having represented you (and good luck in resolving your dispute with Diana Moon Glampers).
Sincerely,
Moye White LLP
This kind of letter serves to politely and cleanly cauterize the attorney-client relationship. It reminds the client of the limited scope of engagement, confirms that the representation has ended, complies with the spirit of Rule 1.16(d) regarding surrender of the client file, thanks the client for the engagement, and invites the client to consider using the lawyer again without committing the firm to future representation at the client’s “put.” In the event this client later claims to have “reasonably subjectively believed” the attorney continued to represent it regarding estate planning matters in an attempt to disqualify the lawyer or another member of her firm, this letter is the best insurance to counter such argument.
While ideally an end-of-representation letter should be sent with or shortly after the final bill, even a belated letter may avoid an expensive disqualification. For example, in Regal Cinemas v. Shops at Summerlin, 2017 U.S. Dist. LEXIS 149497 (Sept. 13, 2017) defendant Howard Hughes Corp. (“HHC”) argued that Loeb & Loeb could not represent Regal Cinemas because Loeb had improperly terminated HHC as a client for the purpose of retaining Plaintiff as a client in a lawsuit against HHC – an ineffective tactic commonly known as the “hot potato maneuver.” Disqualification turned on whether HHC was a current or former client.
The facts showed that HHC entered an engagement agreement with Loeb in 2015 and Loeb had provided transactional legal advice to HHC as recently as June 2016. Four months later, in October 2016, Loeb hired a new partner who represented Regal Cinemas. Loeb informed HHC it intended to sue HHC on behalf of Regal Cinemas. When HHC, not unexpectedly, refused to provide a conflict waiver, HHC sent an end-of-representation letter stating it was “effectively immediately.”
Finding the 2015 engagement agreement was limited in scope, that the transaction that was the subject of that engagement was completed in January 2016, and that two hours of work done in June 2016 were not an indication that the representation was “ongoing,” the court concluded that, although the letter confirming Loeb’s representation was seriously overdue, HHC was not an “ongoing client” and therefore Loeb was not disqualified from representing Regal Cinemas in unrelated litigation against HHC:
In fact, the 2015 engagement letter specifically limited the scope of the parties’ engagement and addressed the possibility of representation in future matters, providing that Loeb would perform additional legal services as the parties “may agree upon from time to time.” . . . Plaintiff calls this a “framework agreement,” meaning additional projects would be conceivable only through new agreements.
. . . .
Loeb’s October 2016 disengagement letter, which was sent the same day Loeb announced that it hired Mr. Hubsch—and the language in that letter indicating termination of the attorney-client relationship was “effective immediately”—certainly weighs in favor of disqualification. But it is not unreasonable to believe that Loeb simply sent the letter in an abundance of caution, likely when someone realized late in the game that the addition of Mr. Heuber to the firm might pose a problem. Similarly, it is not unreasonable to believe that the “effective immediately” language contained in that letter was included by mistake (perhaps because the firm uses a boilerplate disengagement letter). The sending of an unnecessary disengagement letter is not enough to create a conflict where one didn’t exist without the letter.
Loeb escaped falling into the concurrent client disqualification trap because its engagement agreement “specifically limited the scope of the parties’ engagement” and because, though woefully late and inartfully drafted, the court agreed that Loeb’s “waiver request was directed to HHC as a former client, and was only sent in an abundance of caution . . . [and] . . . that the disengagement letter of October 2016 was sent as a courtesy, and was intended to confirm the already-terminated attorney-client relationship.”
Hello, Goodbye. The Alpha and the Omega which bookend every attorney-client relationship. Instilling the discipline and taking the time to attend to these two best practices can make a huge difference to the lawyer who faithfully practices them.
