Why It’s Important to Document Scope of Representation
I know lawyers get tired of hearing it and risk folk like me get tired of always having to say it; but there is real value in documenting scope of representation on every new matter. Please note that I did not say with every new client, I said with every new matter. By saying this, I don’t mean to suggest that every time a call comes in from some longstanding client that you, as their lawyer, should shoot off a new eight-page contract or formal engagement letter. By no means. I am simply suggesting that any time a new file is opened for a client, new or longstanding, it’s worth taking a few moments to document the scope of representation on that new matter.
Many lawyers respond to this advice by letting me know they have no intention of sending engagement letters to their longstanding and/or well-known clients. They argue that doing so would be too formal and would detract from the attorney-client relationship. I could buy into this rationale if these folks never sued their lawyers. Unfortunately, longstanding clients, life-long friends, and even family members do sue. In fact, some of our largest losses in our earlier years were the result of malpractice claims brought by such clients.
Here’s the spin I counter with. There is no rule that requires every engagement letter be written in the form of a lengthy contract full of legalese. A simple thank-you note or confirming email indicating the usual fees will be charged along with a reference to the nature and scope of the work you’re agreeing to be responsible for can suffice.
Upon finding I didn’t buy into the first excuse; this next argument is often made. With flat fee in and out work, for example a simple transaction, more time would be spent drafting and sending an engagement letter than is warranted. After all, the work itself is usually completed within a month and often sooner. In response, it is uncanny to note the number of times that a planned one-month transaction ended up taking far longer. Unforeseen complications abound, particularly in repetitive transactions such as real estate closings in an area where many transfers are taking place.
Of course, we also need to recognize that memories can be short, including our own. Who wants to be in a dispute with a client over what you were or weren’t asked to do? When this type of dispute arises, few clients remember saying they only wanted to pay you to do certain tasks and not every possible action that might have been indicated. Again, a short letter or confirming email can do wonders. This documentation not only confirms your understanding of what the client’s needs are, thus avoiding the running with assumptions misstep, but can even be an opportunity to ask if there is anything else you might be able to assist the client with. After all, what harm is there in asking for additional work?
Given what we see in claims coupled with more and more lawyers routinely agreeing to limited scope representation, I would also encourage you to consider documenting what you are not going to do. If there happens to be a Workmans' compensation component to a personal injury claim and you have no intention of handling that piece, put it in writing! The same could be said for those of you who handle divorces or obtain large settlements of any type but also have no intention of advising those clients as to any tax ramifications that might arise. If you are only being retained to provide a second opinion, document that you have no obligation to file suit on the client’s behalf. It’s all about documenting that the client was made aware of what you will and will not be doing. Further, where called for, there is value in also documenting that you advised certain clients to seek the services of someone who can assist them on any issues you won’t be addressing.
Finally, it’s always a good idea to document that the representation has ended and inform the client that their file is about to be closed, or that a file related to a particular matter for an on-going client is about to be closed. A letter of closure sent at the conclusion of representation can meet this need quite effectively. At its most basic level this letter simply confirms for the client that everything you said you would do has now been done. It's just one more way to make certain no assumptions are in play on either side.
Of course, the letter of closure is also a way to inform the client of your file retention policy, can serve as a cover letter for the return of original documents to the client, assists in marketing by giving you a chance to say thanks for the business, and is one more opportunity to ask for additional work with a statement as simple as “please don’t hesitate to contact me if there is anything else I might be able to assist you with.”
All of this speaks to the need to play it safe when it comes to documenting scope of representation. Clients will be less successful should they ever try to claim that their understanding of the scope of representation was far different than yours. For this reason alone, the time spent documenting scope at the beginning and at the end of representation is well worth it. Try to get into a regular and consistent practice of doing so because claims attorneys will look for these types of documents in every claim file that comes in. They are that important.
Authored by: Mark Bassingthwaighte, Risk Manager
Since 1998, Mark Bassingthwaighte, Esq. has been a Risk Manager with ALPS, an attorney’s professional liability insurance carrier. In his tenure with the company, Mr. Bassingthwaighte has conducted over 1200 law firm risk management assessment visits, presented over 600 continuing legal education seminars throughout the United States, and written extensively on risk management, ethics, and technology. Mr. Bassingthwaighte is a member of the State Bar of Montana as well as the American Bar Association where he currently sits on the ABA Center for Professional Responsibility’s Conference Planning Committee. He received his J.D. from Drake University Law School.