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Law Practice, Ethics/Professional Responsibility

Sep. 8, 2017

Spot warning signs in the quest for new clients

In the never-ending search for new clients and more work, attorneys are often willing to overlook or explain away the warning signs.

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When reflecting on their attorney-client relationships that turned sour, many attorneys will admit that there was a point early on when they should have known the client would be trouble. However, in the never-ending quest for new clients and more work, attorneys are often willing to overlook or explain away the warning signs. Most attorneys, understandably, do not want to turn down paying work in the absence of a compelling reason such as a conflict of interest.

The promise of new business can turn into a liability for law firms where the client refuses to pay fees or asserts a baseless legal malpractice claim against the firm. For that reason, a key aspect of legal malpractice claim prevention is the use of appropriate screening procedures to assess potential clients before undertaking the representation.

Of course, not every client is going to have a pristine past, and many law firms would struggle to survive if they applied overly-stringent standards in determining what clients to accept. Instead, law firms can choose to evaluate certain key risk factors for clients, which are likely to vary depending on the size, type, and location of a law practice.

Typically, every decision regarding whether to undertake a representation that is otherwise permissible under the rules necessarily involves the exercise of the attorney’s judgment. So while there is no singular formula to apply to these judgment calls, there are some common factors that are likely to weigh heavily on the attorney’s decision.

Some common indicators of problems may seem obvious. Others are products of changes in the legal industry and the modern law practice. But by uniformly considering these factors, attorneys may be able to prevent problematic clients from disrupting their lives and practices.

Ask Practical Questions

Many of the questions that are helpful to ask in screening new clients involve common sense. For example, one question that can often set off red flags is “How many attorneys have represented you in this matter before now?” If the potential client already fired multiple attorneys in connection with the matter, it may be a sign that the problem was not with the other attorneys but with the client. It also might be evidence that, if things go south, the client could hire yet another attorney to sue its prior firm for malpractice.

Another common sense question to consider asking potential clients is “How many times have you been a party to litigation before?” Potential clients who have made a career of suing other people may eventually find a way to sue their attorney.

Beyond the more obvious questions, it can also be helpful to ask specific questions regarding the logistics of the new matter. In particular, attorneys sometimes neglect to consider the deadlines associated with a new matter until they have already agreed to the representation and are under the gun.

For that reason, one of the first questions to consider asking a potential client is “When must the work get done?” Representations may be fraught with stress and the possibility for misunderstandings if they begin on the eve of (i) the expiration of the statute of limitation for a plaintiff’s claim; (ii) a scheduled closing for completion of a transaction or deal; or (iii) some other imminent deadline. Unrealistic deadlines can be another red flag for a new representation.

Of course, there may be legitimate reasons as to why the client is seeking assistance on the eve of a deadline. However, where the client is facing deadlines because, for example, an earlier attorney fired the client because the client did not pay, then it might be cause for concern.

Another area of questioning for potential clients relates to the client’s ability to pay the attorney fees associated with the representation. Agreeing to undertake a representation without a realistic chance of getting paid is a lose-lose proposition for attorneys. Not only does the law firm not get compensated for its work, it also assumes the risk of any liability arising from the representation. Although this can be an uncomfortable topic to discuss with new clients, it is worth having a candid conversation at the beginning to avoid much greater discomfort later.

This type of questioning is generally separate and apart from the screening questions that deal with whether the attorney is ethically permitted or has the requisite expertise to handle the representation.

Clarify Expectations

It is important in any representation to make sure that there is no misunderstanding with respect to the client’s objectives and how the client expects the attorney to help attain those objectives.

Sometimes clients expect or assume that their attorney will achieve the impossible through whatever means are necessary. Although it may be difficult for attorneys to give a new client a reality check, it can be important to have a candid conversation about what the attorney can and cannot do. If that conversation leads to friction, it may be a signal that the relationship could be more trouble than it’s worth.

Conduct Simple Research

Before agreeing to undertake a representation, it never hurts to conduct some basic background research regarding the client. This can be as simple as running a web search on the client to see if anything relevant comes up. In addition, a litigation search might be revealing, especially if it shows that the client has previously sued its attorney.

Consider Appropriate Procedures

While the above screening procedures may sound great in theory, they are of little help if no one in the office follows them. Inevitably, it is the one prospective client that escapes the screening filters that creates the most problems.

To avoid this problem, law firms can adopt procedures that cannot be circumvented by attorneys, such as by requiring that attorneys ask certain screening questions before allowing a new file to be opened. With such procedures, attorneys can avoid the temptation to leap head-first into a problematic representation, although whether such procedures are necessary will vary from firm to firm.


Ben Armistead

Daily Journal Staff Writer

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