If You Failed To Document It, It Never Happened.

(Updated March 2024)

Please, can we just acknowledge that lawyers as a group are terrible when it comes to properly and thoroughly documenting their files? Of course, not you, but all the other lawyers out there sure are. You wouldn’t believe how bad it can get. I say this because with almost every claim we handle we have to deal with the lack of documentation of something. And I can assure you that at times a poorly documented file can become a very serious problem. Think about it. The fallout is we now may be forced to live with the reality that a word-against-word dispute between a lawyer and his or her client is in play. In our world, that rarely ends well for the lawyer. Here’s just one story that highlights the problem.

A lawyer was retained for the purpose of defending his client in a contract dispute. No fee agreement or engagement letter was ever drafted. This lawyer prepared and filed an answer to the complaint that simply denied the allegations. There were no paragraphs specifically identified as affirmative defenses or a counterclaim, in part due to the fact there was no copy of the subject contract in the lawyer’s possession. The matter eventually ended up in early mediation. The lawyer failed to draft and submit a mediation statement based upon a belief that the issues were simple and doing so would not have been cost effective. The matter did settle during the mediation.

The terms of the agreement provided that the client would sign a promissory note secured with a confession of judgment. The lawyer recalls telling his client this was not a favorable settlement for him, but the client decided to agree to it anyway due to the potential costs of going to trial coupled with the risk of an adverse verdict. In other words, the client just wanted to put it all behind him. The lawyer drafted and sent to the client the final documents for signature. There was no cover letter explaining the documents or setting forth the client’s obligations under them. The client never signed the documents, choosing instead to hire another lawyer who was able to successfully renegotiate the settlement with slightly better terms. The client refused to pay this lawyer's bill, which led to the lawyer turning the bill over to a collection agency. This is when the client sued for malpractice.

There are all kinds of documentation missteps in the above example but there’s an even bigger problem. In this situation there were no notes of any kind in the lawyer’s file. There was nothing documenting the lawyer’s thinking, no record of what was communicated, and no record of the decision-making process. Apparently, the staff person responsible for scanning closed files and shredding the original file once scanning was complete was never instructed to scan and preserve all attorney notes. Opps!

Here at ALPS, we hear all kinds of excuses when it comes to the reason why a firm’s documentation practices are not as thorough as they should be. “That step isn’t necessary,” “It takes too much time away from important work,” “We didn’t think keeping that was necessary”, “There are too many other things we have to do,” “The client would be offended if we did that,” and “We were trying to keep the costs down” are commonly shared. That’s all well and good until someone questions what you did or why you did it. Memories are short, yours included. Never forget the following. If you didn’t document it, it wasn’t said, or it didn’t happen. That’s how it often plays out in our world.

Yes, of course, the basics such as documenting scope of representation, who and who isn’t a client, and that representation has ended are vitally important, proper file documentation needs to go much further. The goal should be to have every lawyer in a firm commit to creating a thorough written record of the advice given and the decision-making process in every firm file coupled with a firmwide policy that mandates these records be preserved for the life of each file. With all this in mind, my true intent with this post is to identify a few documentation traps that if not recognized, properly managed, or thoroughly documented could place you in a situation not unlike the one set forth above.

The first trap involves the client who wants to save a little green. It’s a trap because there may be unintended consequences that the client hasn’t thought through. If a client is cost conscious to such a degree that limitations are being placed on your scope of representation (e.g. taking shortcuts such as having you rely on documents prepared by others, severely limiting the amount of authorized research or discovery, not wanting to pay to have assets valued, not wanting to hire an expert, etc.), you must document that this client has been informed of the legal ramifications of the limitations being placed on your representation as well as the reasons why this client is making such a decision. Here’s why. If this client is eventually harmed by his desire to save a little money, he will turn to you and say, “Why didn’t you tell me that could happen? If I had only known, I would have ponied up.”

In a similar vein, if your client refuses to follow your legal advice, it is essential that you document the client has been informed of why you made your recommendation, the benefits of proceeding according to your advice, and the potential legal ramifications that might occur by not following your advice. Of course, don’t forget to also document the client’s stated reasons for making the decision to ignore your advice.

The next trap underscores one of the learnings from the story above. When closing a file, make certain that items like attorney notes, drafts of documents, memos, billing statements, and all substantive texts and email exchanged are preserved because they serve as documentation of the work done, advice given, and the decision-making process. Again, these documents should be maintained for the life of the closed file. Pay particular attention to email and texts messages. All substantive texts and email should be captured and preserved with the relevant file. I have visited too many firms where this isn’t the case, and frankly, that’s asking for trouble.

Finally, don’t get caught in the comfort trap. Many attorneys thoroughly document the files of “problem clients” yet remain slack in the documentation of files with their longstanding “good clients.” More often than not, this is due to a level of comfort that has developed with longstanding clients. Be careful because too much comfort can cloud one’s perception of what needs to be documented. Understand that problem clients are not the only clients who sue. Take whatever time is necessary to thoroughly document all files throughout the course of representation. The peace of mind that follows will be much better than the feeling of regret for not having done so should a claim ever arise, particularly one brought by a long-term good client.

This comfort trap also arises in another situation you should keep in mind. Never forget that you don’t get a pass when doing a legal favor for a friend or family member. Treat this matter the same as you would if you were going to charge a paying client for the same work. Deadlines need to be calendared, conflict checks need to occur, phone calls need to be documented, etc. Friends and family do sue when things don’t turn out the way they expected; and when they do, if you happen to have little to no documentation of the advice given and the decision-making process, you’re about to learn a hard lesson just like the lawyer did in the story above.