Issues in Professional Liability

LAWYERS SPEND LOTS of time and effort – hopefully – crafting engagement letters that document the scope of their responsibilities to new clients. These documents serve a valuable role in making plain the terms under which the representation will be conducted.

Less attention is typically given to turning down a prospective new matter. Lawyers may expose themselves to liability if they are careless in the manner in which they document their non-engagement as counsel.

Lawyers Are Usually Free to Decline to Represent a Prospective Client

With the notable exceptions of public service obligations and situations where lawyers are under a court order, attorneys have great latitude in deciding whether or not to represent a prospective client. Our Supreme Court has repeatedly refused to impose any duties on a lawyer in the absence of an attorney-client relationship. To create such a relationship, these elements must exist:

• a person seeking advice from an attorney;
• the advice must pertain to matters within the attorney’s professional competence;
• the attorney must agree to give the desired advice.

McCabe v. Arcidy, 138 N.H. 20, 25 (1993). Further, when one consults an attorney not in his or her professional capacity, but rather as a friend or advisor, an attorney-client relationship is not established. State v. Gordon, 141 N.H. 703, 706 (1997).

Did You Assume the Duty of Determining the Limitations Period in Your "Non-Engagement" Letter?

In declining a matter, "non-engagement" letters can be useful risk management tools. How detailed should lawyers be in preparing such letters?

From a risk management perspective, a non-engagement letter is a terrible place to discuss statute of limitations expiration dates. The initial interview usually does not give the attorney the opportunity to investigate the relevant facts or law. The attorney is therefore not in a position to accurately determine (in most instances) when the statute of limitations will expire.

If counsel feels an obligation to give notice of possible statute of limitations expiration dates, any such statement should be qualified, indicating that the issue was not thoroughly researched and that the prospective client should pay specific attention to that issue when discussing it with future counsel.

If the attorney offers a wrong opinion, liability can result. The claimant may rely on the date to his or her detriment and delay seeking new counsel in reliance upon the date in the non-engagement letter.

Any writing will be overwhelming evidence of the "advice" given the prospective client in this area, and unsophisticated consumers, particularly, may rely on anything committed to writing. For that reason, when issuing a letter addressing the limitations issue:

• use caution in specifying the expiration date;
• make clear you have neither considered nor agreed to consider the date for the rejected client;
• urge him/her to find another attorney to consider the case;
• get the letter to the rejected client in a timely fashion.

The "For Members" section of this site contains samples of "non-engagement," "disengagement," and "firing of client" letters (under Client Relations Handbook).

A different analysis may apply to a lawyer who has actually been retained by the client and subsequently seeks to withdraw from the representation. In such cases, the lawyer has an ethical responsibility to protect the client’s interests, and can only withdraw if it will cause no material adverse impact to the client’s interests. Rules of Prof. Conduct 1.16(b). The lawyer’s obligation extends to taking steps to protect the client’s interests even after the withdrawal. See, e.g., Rules of Prof. Conduct 1.9, 1.16(d).

In an existing representation, the lawyer has presumably had access to the facts and relevant documents, has examined the relevant law, and knows the adverse party. With such knowledge, the lawyer may have made at least a preliminary determination of the limitations period, and may have an implied duty to do so.

Logically and ethically, then, the lawyer is in a much different relationship with an existing client than with a prospective one. The lawyer is under a duty to communicate with and educate the client about any limitations deadlines (as well as other dates or issues that might affect the client). In such a case, an attorney preparing a withdrawal letter may well wish to:

• specify relevant deadlines;
• obtain a signature by the client acknowledging the advice, or at least receipt of the letter;
• suggest new counsel.

Conclusion

When lawyers decline to take on prospective clients, non-engagement letters should document the fact. This step enables lawyers to avoid liability later. Care should be taken to avoid giving any advice because the interaction between the lawyer and the prospective client has usually been fairly limited.

When a lawyer is withdrawing from representation of a current client, by contrast, the lawyer is terminating an existing duty, and needs to make sure that the client clearly understands any looming deadlines.

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