Module 2: Formation of the Client-Lawyer Relationship

how are client-lawyer relationships formed? (3 ways)

1) actual agmt (lawyer + client agree that L will represent C);

2) implied assent + reasonable reliance; OR

3) court appointment

4 scenarios where a lawyer must refuse employment/reject taking on a case:

1. CLIENT BAD MOTIVE → Client’s motive is to embarrass, delay, or burden a 3rd person

2. FRIVOLOUS → Position is factually/legal frivolous

   • BUT good-faith argument to change the law or dispute facts is OK

3. LAWYER INCOMPETENT → Lawyer is incompetent or too busy to handle it

4. LAWYER IMPAIRED → Lawyer’s personal feelings or physical/mental condition materially impairs representation

Duties owed to prospective client (3)

(1) protect the person’s confidential information (which may mean declining to represent others in the same or a related matter);

(2) protect the prospective client’s property; and

(3) use reasonable care in giving the person any legal advice, such as whether the claim has merit.

Types of attorney’s fees (4)

• **Generic Property IF it doesn’t involve prohibited proprietary interest in subject of litigation [eg, if suing over a painting, cant offer the painting as the fee]

• Hourly (written fee agmt not req)

• Flat (written fee agmt not req)

• **Contingency fee → written fee agmt required!

Communication regarding fees – when must this happen?

Must communicate basis or rate of fee to client before or w/in reasonable time after commencing the representation; Changes to fees during the matter must also be communicated

• EXCEPTION: Routine representation of regular client: doesn’t require repetitive comm ab fees each time (however, this doesn’t trump the need to inform of changes of fees!!)

Reasonableness of Fees: 6 Factors =

• Time + labor

• Complexity; lawyer’s rep/experience

• Nature of relationship (eg, reg client or friend)

• Whether the fee is fixed or contingent (usu. ok for contingent fees to be > fixed fees)

• Fees of other lawyers in that area

• The amount at stake and the results obtained

Fee Arrangements – can lawyer structure agmt that allows them to abruptly cut off services?

No. such an agmt is unenforceable and lawyer will be subject to discipline

What happens if atty fees are unreasonable?

The K bw lawyer/client = unenforceable; lawyer subject to discipline

Advanced fees vs retainer fees

• Advanced payment of legal fees: this advancement isn’t yours until you earn it! If you’re fired shortly before you begin the work, you must return the advanced fee

• Retainer fee: basically a reservation fee to ensure you’re available; does NOT have to be refunded; it’s yours as soon as you receive it

Contingent Fees not allowed if (3 ways + exception):

1. CRIMINAL CASES → when representing a defendant

2. DOMESTIC RELATIONS CASES → when fee depends on obtaining:

   1. Divorce

   2. Alimony / child support

   3. Property settlement

3. FEE UNREASONABLE → eg, when the lawyer knows that the case will be settled for a huge amount after a few hours of work

• EXCEPTION: COLLECTIONS. You CAN charge contingency fee if helping client collect past due amounts! These are collections cases, which are different from DR cases where you are negotiating the amts

Writing/disclosure reqs for contingency fee agmt for beginning (4) + end of case (3)

• At the beginning of matter, must be in writing and signed by client, AND must disclose:

  • Who’s paying expenses

  • How fee will be calculated

  • deducted expenses from recovery and when (ie, before or after the contingent fee is calculated)

  • client expenses (if any) if atty loses the case

• When case concludes, must provide written statement including:

  • the outcome,

  • how much is going to client, and

  • how that amt was calculated

if a client doesn’t pay atty fees, what CAN’T a lawyer do to get compensation (3 things + 1 exception)

• Illegal collection methods

• Confidential information (improperly)

• Harass a client

EXCEPTION: may use common law or statutory charging liens, under which any recovery obtained for the client serves as security for the lawyer’s fees

Rule for fee splitting w other lawyers in diff firm [these rules don’t apply to fee splitting w lawyers w/in the same firm]; 2 reqs w subparts for each

Referral Fee rule: 1) both lawyers must be involved or responsible, and 2) the client must consent IN WRITING

1. both lawyers must be involved or responsible; and

   1. Split fees proportionate to services performed by each

   2. Each assumes joint responsibility (ethically and financially) and split fees however they want

2. Written Client Consent for fee splitting bw lawyers from diff firms – 3 reqs

   1. Client consents to fee-splitting agmt + shares;

   2. Agreement is confirmed in writing and states each lawyer’s share; AND

   3. total fee must be reasonable

True referral fee rule: When one lawyer simply refers a case to a second lawyer and the first lawyer neither works on nor assumes responsibility for the case:

the second lawyer must not pay the first lawyer a referral fee; doing so would be unethical

A lawyer may limit the scope of the representation if (2 things):

1) the limitation is reasonable under the circumstances, AND 2) the client gives informed consent.

Lawyer level of inquiry regarding representation (crime); 2 things a lawyer may do

A lawyer must not advise or assist a client to commit a crime or fraud. However, the lawyer may

• (1) explain the legal consequences of a proposed course of action; OR

• (2) help the client to make a good faith effort to test the validity, scope, meaning, or application of the law.

Decisions to be made by the CLIENT during representation in civil vs criminal cases — What authority does client have?

Auth to make important substantive decisions

• Civil Cases: whether to settle

• Criminal Cases: what plea to enter, whether to waive jury trial, whether the client will testify, and whether to appeal

Decisions to be made by the ATTY during representation in civil vs criminal cases — What authority does atty have?

Auth to make procedural, tactical decisions (eg, which ct to file in, discovery methods, etc); but, lawyer MUST consult w client ab how they’re doing the work

When does lawyer’s actions bind client?

When lawyer has actual or apparent authority to act for client

atty actual authority toward client

Actual authority: lawyer’s belief based on what the client has expressly told the lawyer to do and anything else impliedly necessary to carry out the representation

• communicated by client expressly OR impliedly

atty apparent authority is invoked when

Apparent authority: 3rd party’s belief. lawyer does something on client’s behalf + 3rd party reasonably believes lawyer has authority based on the client’s actions

• i.e., client leads 3rd party to believe you, the lawyer, has authority, even though you didn’t

When does lawyer’s actual authority to act for client end? 4 ways

1. Client revokes authority

2. Lawyer leaves the case

3. Client dies

4. Lawyer dies or otherwise becomes unable to represent client

When does lawyer’s apparent authority to act for client end?

When 3rd party has reason to know any of the above (ie, that client revoked authority, lawyer left case, client died, lawyer no longer able to represent them)

Duty to 3rd parties when lawyer authority ends

When a lawyer’s actual authority ends, lawyer has duty to inform 3rd parties who are relying on the continued existence of the authorit when their authority ends

Lawyers duties re: clients w diminished capacity (3)

• NORMAL relationship whenever possible

• PROTECTIVE ACTION if substantial harm is threatened

• MINIMAL disclosure—only what’s necessary, even if client objects

RULE: Lawyer must maintain a normal lawyer/client relationship to the extent possible. IF CLIENT POSES RISK OF SUBSTANTIAL phys/financial HARM:

• may take protective action appropriate to the circumstances. Can disclose necessary info even if client objects.

• BUT, CONFIDENTIALITY DUTY STILL APPLIES → disclose only information reasonably necessary to protect client (eg, consulting w client’s family members)

Emergency Legal Assistance to Nonclient with Seriously Diminished Capacity/Duty to emergency non-clients + exception

When a person w seriously diminished capacity facing imminent and irreparable harm to their health, safety, or financial interest consults a lawyer, the lawyer may take legal action on the person’s behalf (even if a lawyer-client relationship hasn’t been established) if the lawyer reasonably believes the person has no other representative.

• EXCEPTION: Such action should be limited to that necessary to maintain the status quo or to avoid the harm; normally won’t seek $$ compensation

Required communications w client: lawyer must communicate with client regarding 5 things:

• Case status updates

• Game plan/strategy

• Response to reasonable requests for info

• Anything that requires informed consent (eg, COI)

• *Must PROMPTLY inform client of settlement and plea bargain offers UNLESS client has expressly authorized rejection/acceptance of certain offers

When is withholding information from client ok? (2 situations)

• if the client would be likely to react imprudently to an immediate communication.

• if a court rule or order forbids a lawyer from sharing information with a client

Contract concerning the client-lawyer relationship is INVALID/avoidable by the client if: (2 ways)

(1) K made after representation began, UNLESS lawyer shows K was fair + reasonable to the client; OR

(2) K made after lawyer’s work completed AND the client wasn’t informed of facts needed to evaluate appropriateness of atty’s fees/benefits

4 Mandatory grounds for lawyer to withdraw from case:

‼ Court Permission req for ALL — ct’s order overrides all else!

• IMPAIRED → Physical/mental condition materially impairs representation

• RPC/LAW VIOLATION → Continuing would require violating a law or RPC

  • **CRIME/FRAUD → only mandatory if atty KNOWS of client’s Ongoing/Future Crime or Fraud using lawyer's services; if past crime or if lawyer only suspects, then permissive, not mandatory

• FIRED → Client fires the lawyer

Permissive grounds for lawyer to withdraw from case (7)

• Lawyer may withdraw for ANY reason if withdrawal causes no material adverse effect on the clientt; OR

• Potential Adverse Impact—Select Reasons Only: An attorney may withdraw despite an adverse impact if:

  • CRIME/FRAUD → Client is using lawyer’s services for crime/fraud OR used them for past crime/fraud

  • REPUGNANT → Client’s conduct is repugnant or lawyer fundamentally disagrees

  • DIFFICULT CLIENT → Client makes representation unreasonably difficult

  • NONPAYMENT → Client hasn’t paid after warning of withdrawal

  • BURDEN → Representation creates an unreasonable financial burden

  • GOOD CAUSE → Other good cause

Ct permission usu. req to withdraw from case; when may ct deny a lawyer’s petition to withdraw as counsel?

The court may deny permission if substituting attorneys would cause undue delay or disruption.

When ordered to do so by a tribunal, a lawyer must continue representation, even if there is good cause for terminating the representation

When an attorney withdraws or is fired, what fees are they entitled to? (flat fee vs contingent fee vs misconduct rule)

FLAT FEE → to be paid for the reasonable value of the hours they actually worked (quantum meruit)

CONTINGENT FEE → wait & see; atty must wait and see how the client’s case ultimately ends. if P wins, atty gets R.V. of their work; if P loses, atty gets nothing

MISCONDUCT EXCEPTION → court can deny a lawyer any quantum meruit recovery if the lawyer committed serious misconduct

How must a lawyer protect a client’s interest upon termination of client/lawyer relationship during case?

A lawyer must take steps to the extent reasonably practicable to protect a client’s interests on termination

• EGs: giving reasonable notice to the client, allowing time to employ other counsel, surrendering papers and property to which the client is entitled, and refunding any unearned advance payments.