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It's All about Documenting Scope

I know lawyers get tired of hearing it and risk folks 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. Now, 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 contract or engagement letter. By no means do I wish to suggest that. I am suggesting, however, that anytime a new file is opened for a client, new or longstanding, one would be well served by taking a few moments to document the scope of representation on that new matter.

Many attorneys respond to this advice by sharing that they object to 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 such clients never sued their attorneys. Unfortunately, longstanding clients, life-long friends, and even family members do sue their attorneys. In fact, some of our largest losses have come from claims that were brought by such clients. Here’s the spin. There is no rule that requires an engagement letter to be a lengthy three page contract full of legalese. A simple thank-you note or confirming email indicating that the usual fees will be charged along with a reference to the nature and scope of the work to be done can suffice.

Then this next argument is made. With flat fee work, such as transactional work, 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. 

Also, memories can be short. 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 does arise, few clients remember that they said they only wanted to pay their attorney 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. What harm is there in asking for additional work?

Given what we’re seeing in claims coupled with more and more attorneys moving into limited scope representation, I also encourage you to consider documenting what you are not going to do. If there happens to be a workers compensation component to a personal injury claim and you have no intention of handling that piece, put it in writing! 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, you might also consider documenting that you advised them to seek the services of someone who can assist them on those issues that you won’t be.

Finally, it is always a good idea to document that the representation has ended and inform the client that the file is about to be closed, or that the file relative to a particular matter for an on-going client will 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 completed. It is one more way to make certain that 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 are far less able to allege that their understanding of scope of representation was far broader than what yours was; and here’s the rub. Should scope ever be an issue in a malpractice claim and you find yourself in a word against word dispute with the client as to just what your scope was, you’ve got a serious problem. We all know that attorneys don’t fare well in word against word disputes in the malpractice arena. 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.

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