By Thomas P. Sukowicz and Thomas P. McGarry
Hinshaw & Culbertson
A lawyer is allowed to limit the scope of the representation of a client in a legal matter under Rule 1.2(c) of the Rules of Professional Conduct, if the limitation is reasonable under the circumstances and the client gives informed consent.
Under Rule 1.0(e), "informed consent" denotes: "The agreement by a person to a proposed course of conduct after the lawyer has communicated adequate information and explanation about the material risks of and reasonably available alternatives to the proposed course of conduct."
Addressing the "informed consent" requirement, a bankruptcy court ordered an attorney to refund fees to five clients because he did not appear with them at the first meeting of creditors.
The attorney argued that he had an agreement with the clients to limit his representation, but the court determined that the lawyer did not provide proper disclosure to the client, which would include an explanation of the nature of the process, what problems could or will be encountered, how those problems should be addressed and the risks or hazards associated with those problems.
Consent was also absent because the client did not have a clear understanding of those factors and the possible results of proceeding without an attorney. In re Bancroft , 204 B.R. 548 (C.D. Ill., 1997).
In Lerner v. Laufer , 359 N.J.Super. 201, 217, 819 A.2d 471, 483 (N.J.Super. A.D. 2003), a legal malpractice case, the court discussed the disclosure requirement of Rule 1.2(c).
A lawyer agreed to review a property settlement agreement that was the product of a divorce mediation to make sure it clearly set forth the parties' negotiated settlement. The client later claimed the agreement was inequitable, unconscionable and contrary to her interests.
When the client sued the attorney for malpractice, the lawyer's defense was an assertion that the scope of his engagement was limited to reviewing the contract.
The court agreed with the lawyer, based on the two-page letter from the lawyer to the client, which disclosed to the client that the lawyer was not conducting discovery into any of the assets or their value and was not rendering an opinion into the fairness of the proposed agreement.
The court stated that if an attorney's services are limited by consent, the degree of care required of the attorney is framed by the agreed service.
The attorney in that case was not liable to the client for entering into a bad agreement since he never agreed to advise her on the fairness of the agreement.
In the absence of a disclosure that the lawyer will not provide a specific service, the lawyer may have a duty to provide it.
In Bates v. Turner , 278 Ga. 788, 606 S.E.2d 849 (Ga., 2004), the lawyer handled the sale of a client's business. The buyer signed a 10-year promissory note that was secured by a lien on the buyer's assets. The lien was perfected by the filing of UCC financing statements, but the filing was only effective for five years and expired because it was not renewed.
In reversing the trial court's dismissal of the subsequent legal malpractice claim, the Supreme Court found that the lawyer had to either inform the client that renewal was necessary and was the client's responsibility, or the lawyer had to file the renewal himself. Because the lawyer did neither, the case was remanded for trial.
The lawyer could have avoided this claim had he limited his engagement under Rule 1.2(c) to exclude the filing of the renewal.
In another case, Keef v. Widuch , 321 Ill.App. 3d 571, 747 N.E.2d 992 (Ill.App. 1 Dist., 2001), the plaintiff sued the attorneys who handled his workers' compensation case for malpractice, claiming they failed to properly advise him about the possibility of third-party claims.
The written representation agreement provided for representation in the client's workers' compensation claims, but was silent as to the client's other possible claims. The client was unaware of any third-party claims he might have had.
The appellate court reversed the dismissal of the claim, limiting its ruling to "the unique circumstances of this case," in which the client was unaware of any third-party claims.
It held that attorneys have a duty to advise such clients that third-party claims may exist and that they could become time-barred. In discussing Rule 1.2(c), the court noted that it required disclosure to the client that the course of action is not the sole potential remedy, that there exist other courses of action that are not being pursued and that there are risks inherent in contracting for limited legal services.
One federal court, however, held that disclosure under Rule 1.2(c) requires the disclosure of "material" or "pertinent" facts and that if potential causes of action are not clearly meritorious, they may not be sufficiently material or pertinent to require disclosure to the client. Benet v. Schwartz , (not reported in F.Supp.) 1995 WL 117884 (N.D.Ill., 1995).
As the Lerner case illustrates, when a lawyer limits the scope of the representation, it is prudent to have the disclosure and consent confirmed in writing.