Lawyer Malpractice Class #2: The Client-Lawyer Relationship
Hofstra Law School: Lawyer Malpractice Class #2.
I. What does it take to form a client-lawyer relationship?
Restatement of the Law Governing Lawyers (ALI 2000) (hereafter RLGL)
§ 14. Formation of a Client-Lawyer Relationship
A relationship of client and lawyer arises when:
(1) a person manifests to a lawyer the person’s intent that the lawyer provide legal services for the person; and either
a. the lawyer manifests to the person consent to do so; or
b. the lawyer fails to manifest lack of consent to do so, and the lawyer knows or reasonably should know that the person reasonably relies on the lawyer to provide the services;
(2) a tribunal with power to do so appoints the lawyer to provide the services.
It really takes very little to start a Client-Lawyer Relationship. That may be good in terms of getting clients. But it can be very risky in terms of incurring liability for malpractice to the client. Ultimately, the question to ask is: Who is my client?
One party's unilateral beliefs and actions , standing alone, does not necessarily confer upon him or her the status of client.
Moran v. Hurst, 32 AD3d 909, 822 NY2d 564
Solondz v. Barash, 225 AD2d 996, 639 NYS2d 410
Read Pam Bresnahan's article from the American Bar Association Journal about how little it takes.
Then, read each of the following cases:
In re Palmieri, 76 N.J. 51 (1978)
Procanik v. Cillo, 226 N.J. Super 132 (1988)
Togstad v. Vesely, Otto, Miller et al, 291 N.W. 2d 686 (1980)
Jordan v. Lipsig Sullivan, et al 689 F. Supp. 192 (DNY 1988)
How to you document the start of the Client-Lawyer Relationship ?
Rules of Professional Conduct (hereafter RPC)
RPC 1.5 Fees
(b) When the lawyer has not regularly represented the client, the basis or rate of the fee shall be communicated in writing to the client before or within a reasonable time after commencing the representation.
The New York Rule:
22 NYCRR §1215.1
(a)…an attorney who underakes to represent a client and enters into an arrangement for, charges or collects any fee from a client shall provide to the client a written letter of engagement before commencing the representation, or within a reasonable time thereafter (i) if otherwise impracticable or (ii) if the scope of services to be provided cannot be determined at the time of the commencement of representation. For purposes of this rule, where an entity (such as an insurance carrier) engages an attorney to represent a third party, the term “client” shall mean the entity that engages the attorney. Where there is a significant change in the scope of services or the fees to be charged, an updated letter of engagement shall be provided to the client.
(b) the letter of engagement shall address the following matters:
(1) Explanation of the scope of the legal service to be provided;
(2) Explanation of attorney’s fees to be charged, expenses and billing practices; and, where applicable, shall provide that the client may have a right to arbitrate fee disputes…
(c ) Instead of providing the client with a written letter of engagement, an attorney may comply with the provisions of subdivision (a) by entering into a signed written retain agreement with the client before or within a reasonable time after commencing the representation, provided the agreement addresses the matters set forth in subdivision (b).
§ 1215.2 Exceptions
This section shall not apply to (1) representation of a client where the fee to be charged is expected to be less than $3000, (2) representation where the attorney’s services are of the same general kind as previously rendered to and paid for by the client, or (3) representation in domestic relations matters…, or (4) representation where the attorney is admitted to practice in another jurisdiction and maintains no office in the State of New Yoir, or where no material portion of the services are to be rendered in New York.
CAVEAT: Failure to have a written engagement letter or agreement does not prevent a client-lawyer relationship from coming in to existence. But it can certainly have a negative impact if the client refuses to pay you for any reason and you have to sue the client to pay you (not a good idea in any event, which we'll discuss, soon enough.)
The existence of a client-lawyer relationship does not depend on a formal retainer or the payment of a fee.
Moran v. Hurst, 32 AD3d 909, 822 NYS2d 564
Tropp v. Lumer, 2005 NY Slip Op. 872 (App. Div.)
Jane Street Co. v. Rosenberg & Estis, PC, 192 AD2d 451, 587 NYS 2d 17.
II. What does it take to define or limit the scope of the client-lawyer relationship?
RLGL § 19. Agreement Limiting Client or Lawyer Duties
(1) Subject to other requirements stated in this Restatement, a client and lawyer may agree to limit a duty that a lawyer would otherwise owe to the client if:
(a) the client is adequately informed and consents; and
(b) the terms of the limitation are reasonable in the circumstances.
(2) A lawyer may agree to waive a client's duty to pay or other duty owed to the lawyer.
* * *
RPC 1.2 (c) A lawyer may limit the scope of the representation if the limitation is reasonable under the circumstances and the client gives informed consent.
How broad is the scope of the client-lawyer relationship? These next linked cases will give you some insight into how to narrow the scope of the relationship and whether that can save save you from liability for professional mistakes outside the scope of the relationship.
Campbell v. Fine Olin, 168 Misc. 2d 305 (NY 1996)
Greenwich v. Markhoff, 650 N.Y.S.2d 704 (App Div. 1996)
Lerner v. Laufer, 359 N.J. Super. 201, 819 A.2d 471 (App Div. 2003)
Estate of Albanese v. Lolio, 393 NJ Super 355 (App Div. 2007)
III. What does it take to End the Client-Lawyer Relationship?
RLGL § 31. Termination of a Lawyer's Authority
RLGL § 32. Discharge by a Client and Withdrawal by a Lawyer
RLGL § 33. A Lawyer's Duties When a Representation Terminates
RPC 1.16 Declining or Terminating Representation
Gilles v. Wiley, Malehorn & Sirota, 345 N.J. Super 119 (App Div. 2001)
Disengagement Letters
Suggested Readings: Fortney & Johnson, Legal Malpractice Law, Ch. 3 pages 35-50.
In re Palmieri
The case begins with the quote, "Society might be "better served if practicing attorneys were to remain full-time lawyers rather than become part-time businessmen." Marrying outside business dealings and clients clearly brings about multiple complications. How can one truly be acting in their clients best interest when one has a personal stake in the outcome? Further, a client, who is under the belief that you are in fact their attorney in one issue will find it difficult to separate advice given on a different issue such as business advice. Is the court reasoning that as an attorney you are in a position of influence and power over a client? Do clients likely have difficulty separating legal advice from friendly advice. If so, is the only way to avoid this is to avoid any muddling of businesses completely?
In In Matter of Palmieri the court reiterates a few times the notion that lawyers can wear their business hats (so to speak) even when dealing with former clients, but only if it is clear that they are wearing their business hats and not their lawyer hats. In regards to Megan's concern that the lawyer is not "acting in the best interest of the client," the court seems to hold that when wearing the business hat we forget about the lawyer hat altogether. I agree with Megan, though, that there should be some concern with this approach because of the potential for lawyers taking advantage of former clients. Hearkening back to the Model Rules of Professional Responsibility, I recall, for example, that for many years were not allowed to advertise because, as the notes to the Model Rules explain, lawyers were held on a moral pedestal. After the Supreme Court held that the first amendment entitled lawyers to advertise, the court still held that lawyers are not allowed to solicit clients in person because of the potential for "one trained in the art of persuasion" to manipulate a client. The idea that a lawyer should be held to a higher standard than a lay person is still one that pervades the ethics rules. While the court might have been technically right on the law, perhaps on an ethical level the decision is questionable. Then again, I know real estate lawyers who are partners with clients in apartment building purchases for personal pecuniary gain, and the lawyers might argue that even on an ethical level they are on the moral high ground, because they are dealing with intelligent businessmen who perform these sorts of deals daily. Should the lawyer be forced to miss out on lucrative opportunities because of our ivory tower dilemmas?
In regards to Pam Bresnaha's article, I think that there should be a "Good Samaritan" law for lawyers like there is for doctors to some extent. If an attorney gives his or her opinion on a legal matter at a cocktail party in the form of advice to a friend, there should be some kind of protection. Clearly, the attorney has not taken the friend on as a client and should make sure that is clear. I do not believe that a doctor who gave medical advice to a friend at a party could then be held liable if it turned out to be incorrect. Attorneys should be able to help their friends by giving basic thoughts or advice about issues, even if it is not their area of expertise. The attorney should be careful to make sure that the friend will not take their word as absolute truth if it is not their area of expertise but I do not see the harm in getting, for example, a second opinion about what their own attorney is doing in a matter or some basic advice about a legal matter they are facing.
Something about the Togstad v. Vesely case seems off to me. I know I have yet to grasp the intricacies of lawyer malpractice, but I find it very unjust that a lawyer can be liable to what I perceived as a potential client after a 45 minute meeting. Especially for such a large award, over $600,000.
I am curious to know the specific reasons why the jury chose to believe Mrs. Togstad's version of the facts over the lawyer's, who claimed he told the potential client that he was not a medical malpractice expert. If the lawyer had called Mrs. Togstad after the initial meeting to tell her the firm would not be able to represent her and her husband in this case, there would not have been a malpractice case against him, correct? It appears to me that the lawyer had every intention of doing so, because as he claimed the firm was not experts in medical malpractice, but simply forgot to make the call. I do not understand how a lawyer can be subject to such liability for forgetting to make a phone call to what he understood as a potential client.
I absolutely understand Miss Milone's point about Togstad v. Vesely being harsh; however, I believe the court came down on the correct side, even if the damages awarded may have been too severe. Because lawyers are professionals, they have the added duty to make it clear that they do not represent a client. Any potential conflict in the Togstad case could have been avoided if the attorney would have simply drafted a letter of non-engagement. The attorney's failure to do so, left him exposed to liability.
Attorneys all must remain competent and knowledgeable in all aspects of the law. Forgetting to follow procedure, can and always will lead to punishment for our profession.
Like Ms. Milone, I, too, found the Togstad case somewhat unsettling. The case facts didn't particularly seem persuasive one way or the other. I don't think it was clear whether there was an attorney-client relationship. However, to answer Ms. Milone's question, I think the jury was probably motivated by biases and stigmas towards lawyers or perhaps feelings of empathy/sympathy. Because the jury was likely not comprised of lawyers, I would imagine that many of the jury members could imagine themselves being in Mrs. Togstad's position. Perhaps they felt, as a collective, that a lawyer has a duty to make sure that clients/potential clients are very clear as to where they stand in the attorney-client relationship. Perhaps they felt that the lawyer's communications with Mrs. Togstad were not very clear.
(And yes, Nicole, I believe you are right to presume that there would be no malpractice case against the attorney if he had called Mrs. Togstad and provided her with the information allegedly relayed to him by Mr. Hvass--although I think it would have been far more prudent to mail her a letter stating that he was not going to be representing her to avoid any possibility of miscommunication.)
An episode of the Soprano's includes a legal tactic used by Tony to limit divorce attorney's available to his estranged wife. Tony contacted and met with a number of high profile divorce attorney's in an effort to limit the pool of lawyers for his soon-to-be ex wife to choose. An attorney advised him that if he did so the attorney's would be unable to represent the wife due to a conflict of interest. Is it possible to shop around for attorney's this way? If not, it seems it would be difficult case to prove.
I also agree that lawyers are held to a much higher standard. Because of this, lawyers must always be careful and diligent in all their dealings with clients. In the Togstad case, it did not surprise me either that the jury was on the side of the client. In society, lawyers are expected to uphold a certain standard at all times, almost like they can never commit any error. Although this is far from true, this seems to be what probably motivated the jury in this case. As a result, in this case, I think the jurors were primarily motivated by sympathy to the client.
The episode of the Soprano's that Miss Diodato is referring to is based on actual practices of many wealthy divorcees. However, a Mineola judge, in a recent case, found this practice to be unethical and; therefore, allowed a woman, whose husband had done this to her, to use an attorney that had been contacted by her husband.
If a plaintiff decides to terminate the attorney client relationship with their attorney, and the case was on contingency, and the attorney has not started a cause of action, can the attorney put a lien on the outcome of the case based solely on pre-litigation work; such as attempting to negotiate a settlement with the defendant?
I believe that an attorney's charging lien in NY attaches to a client's "cause of action" meaning that an action or counter-claim is required before a terminated attorney can impose a lien. However, the attorney is always contractually entitled to his agreed upon fees, and can subsequently sue a non-paying client to recover the same. I think he can also recover for the reasonable value of his services notwithstanding the fact that the original retainer agreed upon a contingent fee. Also, if an attorney is working on contingency and is terminated, I believe he has a lien on the actual file, and has a right to recover fees and disbursements before he transfers the file to the new attorneys or client (subject to certain limitations). These are three separate situations that apply in different contexts.