presented by The South Carolina Bar Continuing Legal Education Division Protecting and Operating Your Law Office: Insurance, Employment and Ethics Issues for Small Firm Practice Rock Hill ~ Thursday, February 20, 2020 Charleston ~ Wednesday, February 26, 2020 http://www.scbar.org/CLE SC Supreme Court Commission on CLE Course No. 200586
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Transcript
presented by
The South Carolina Bar Continuing Legal Education Division
Protecting and Operating Your Law Office:
Insurance, Employment and Ethics Issues for Small Firm Practice
Rock Hill ~ Thursday, February 20, 2020
Charleston ~ Wednesday, February 26, 2020
http://www.scbar.org/CLE
SC Supreme Court Commission on CLE Course No. 200586
Table of Contents
Agenda ...................................................................................................................................................3 Speaker Biographies .............................................................................................................................4 Insurance: policy coverages; recommended office procedures; 5-10 year history of claims ........7 Employment (Hiring and Firing; Employment Contacts; Office Procedures to Avoid Claims) ..40 Ethics (Small Practice Pitfalls; Key Rules to Remember; New Case Law) ....................................65
Business TransCommCorporate/BusinessOrgPatent, Trademark,CopyrightAll Other
Percent of all claims by area of law in 2015 ABA study
Profile of Legal Malpractice Claims: 2012 - 2015. ABA Standing Committee
4
70% of claims come from 5 areas of law
McCarthy | Risk Management | Swiss Re Corporate Solutions
0 500 1000 1500 2000 2500
Administrative Errors
Number of Claims by Type of Alleged Error
2015 ABA Study
Profile of Legal Malpractice Claims: 2012 - 2015. ABA Standing Committee
0 1000 2000 3000 4000 5000 6000
Substantive Errors
5
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South Carolina
6
• In past 20+ years, over 600 reported matters handled by our claims team:
– Of these matters, over half were closed without payment due to:
– Effective early intervention and collaboration
– Education to claimant
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South Carolina
7
• Of those matters with payment, what has been paid?
– Average paid defense costs were $40K
– Average paid loss was $57K
– Claims loss payments range from $500 to 7 figures!!
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South Carolina
8
– Top Areas of Practice of Reported Matters:
– Real Estate – Commercial
– Real Estate – Residential
– Personal Injury – Plaintiff
– Workers Comp – Plaintiff
– Criminal Law
– Family Law
– Corporate and Business Organizations
– Estates, Probate and Trusts
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Common MythsAbout Legal Malpractice
9
McCarthy | Risk Management | Swiss Re Corporate Solutions
Common MythsAbout Legal Malpractice
10
•Myth: I’ll never get sued!
McCarthy | Risk Management | Swiss Re Corporate Solutions
Common MythsAbout Legal Malpractice
11
•Myth: I’ll never get sued!
•Fact: 4 out of 5 attorneys will get sued for malpractice at some point during their careers.
McCarthy | Risk Management | Swiss Re Corporate Solutions
Common MythsAbout Legal Malpractice
12
•Myth: Small firms don’t have to worry about getting sued for malpractice.
McCarthy | Risk Management | Swiss Re Corporate Solutions
Common MythsAbout Legal Malpractice
13
•Myth: Small firms don’t have to worry about getting sued for malpractice.
•Fact: 70% of all malpractice claims are filed against firms with 1 – 5 attorneys.
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Common MythsAbout Legal Malpractice
14
•Myth: I will save money in the long run by not paying insurance premiums.
McCarthy | Risk Management | Swiss Re Corporate Solutions
Common MythsAbout Legal Malpractice
15
•Myth: I will save money in the long run by not paying insurance premiums.
•Fact: The average cost to defend a legal malpractice claim exceeds $40,000. This does not include paid losses!
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Demystifying Legal Malpractice Insurance - Basic and Typical Coverage Provisions
16
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Policies are Written on a Claims Made and Reported Basis:
17
I. INSURING AGREEMENTS
A. The Company shall pay on behalf of any INSURED all LOSS
in excess of the deductible which any INSURED becomes
legally obligated to pay as a result of CLAIMS first made
against any INSURED during the POLICY PERIOD and
reported to the Company in writing during the POLICY
PERIOD or within sixty (60) days thereafter, by reason of
any alleged WRONGFUL ACT occurring on or after the
RETROACTIVE DATE, if any.
McCarthy | Risk Management | Swiss Re Corporate Solutions
Policies are Written on a Claims Made and Reported Basis:
18
I. INSURING AGREEMENTS
A. The Company shall pay on behalf of any INSURED all LOSS
in excess of the deductible which any INSURED becomes
legally obligated to pay as a result of CLAIMS first made
against any INSURED during the POLICY PERIOD and
reported to the Company in writing during the POLICY
PERIOD or within sixty (60) days thereafter, by reason of
any alleged WRONGFUL ACT occurring on or after the
RETROACTIVE DATE, if any.
• What does this mean to you?
– You must report claims when you get them or risk a coverage reservation or denial!
– You only have coverage for wrongful acts after the retroactive date.
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What is a Claim?
19
• "CLAIM" MEANS:• 1. a demand made upon any INSURED for LOSS, including, but not
limited to, service of suit, or institution of arbitration proceedings or
administrative proceedings against any INSURED;
• 2. a request for any INSURED to toll or waive a statute of
limitations;
McCarthy | Risk Management | Swiss Re Corporate Solutions
What is a Claim?
20
• "CLAIM" MEANS:• 1. a demand made upon any INSURED for LOSS, including, but not
limited to, service of suit, or institution of arbitration proceedings or
administrative proceedings against any INSURED;
• 2. a request for any INSURED to toll or waive a statute of
limitations;
• What does this mean to you?
– A “claim” is not just a lawsuit, but can also be a request for a tolling agreement or a demand for money!
– If you get a letter saying you have committed legal malpractice, this is most likely a claim!
– Whether or not you think there is any merit does not make it less of a claim.
McCarthy | Risk Management | Swiss Re Corporate Solutions
Should I Report Potential Claims?
21
• I. INSURING AGREEMENTS• B. If, during the POLICY PERIOD, any INSURED first becomes aware of
a POTENTIAL CLAIM and gives written notice of such POTENTIAL CLAIM
to the Company during the POLICY PERIOD any CLAIMS subsequently
made against any INSURED arising from the POTENTIAL CLAIM shall be
considered to have been made during the POLICY PERIOD.
*****
• "POTENTIAL CLAIM" MEANS:• 1. any act, error, omission, circumstance or PERSONAL INJURY
which might reasonably be expected to give rise to a CLAIM against any
INSURED under the POLICY; or
• 2. any breach of duty to a client or third party which might
reasonably result in a CLAIM against an INSURED.
McCarthy | Risk Management | Swiss Re Corporate Solutions
Should I Report Potential Claims?
22
• I. INSURING AGREEMENTS• B. If, during the POLICY PERIOD, any INSURED first becomes aware of
a POTENTIAL CLAIM and gives written notice of such POTENTIAL CLAIM
to the Company during the POLICY PERIOD any CLAIMS subsequently
made against any INSURED arising from the POTENTIAL CLAIM shall be
considered to have been made during the POLICY PERIOD.
*****
• "POTENTIAL CLAIM" MEANS:• 1. any act, error, omission, circumstance or PERSONAL INJURY
which might reasonably be expected to give rise to a CLAIM against any
INSURED under the POLICY; or
• 2. any breach of duty to a client or third party which might
reasonably result in a CLAIM against an INSURED.
• What does this mean to you?
– If you know of a potential claim, report it. The carrier may be able to help mitigate.
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What if I Don’t Report a Wrongful Act that Might Lead to a Claim?
23
IV. EXCLUSIONS
This POLICY shall not apply to any CLAIM based upon, arising out of, attributable to, or directly or indirectly resulting from:
B. any WRONGFUL ACT occurring prior to the effective date of thePOLICY PERIOD for this lawyers professional liability policy issued by theCompany to the NAMED INSURED if, (a) the WRONGFUL ACT had previouslybeen reported to any other insurance company or (b) if the INSURED at theeffective date of the POLICY PERIOD for this lawyers professional liabilitypolicy issued by the Company to the NAMED INSURED knew or could havereasonably foreseen that such WRONGFUL ACT might be expected to be thebasis of a CLAIM. .
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What if I Don’t Report a Wrongful Act that Might Lead to a Claim?
24
IV. EXCLUSIONS
This POLICY shall not apply to any CLAIM based upon, arising out of, attributable to, or directly or indirectly resulting from:
B. any WRONGFUL ACT occurring prior to the effective date of thePOLICY PERIOD for this lawyers professional liability policy issued by theCompany to the NAMED INSURED if, (a) the WRONGFUL ACT had previouslybeen reported to any other insurance company or (b) if the INSURED at theeffective date of the POLICY PERIOD for this lawyers professional liabilitypolicy issued by the Company to the NAMED INSURED knew or could havereasonably foreseen that such WRONGFUL ACT might be expected to be thebasis of a CLAIM. .
• What does this mean to you?
– If you know of an error that could lead to a claim, you must report it or potentially lose coverage!
McCarthy | Risk Management | Swiss Re Corporate Solutions
What Happens if I Report a Claim?
25
DEFENSE, INVESTIGATION AND SETTLEMENT OF CLAIMSAs respects such insurance as is afforded by this POLICY:
The Company shall have the right and duty to defend any CLAIM for LOSS
against any INSURED covered by Section I. Insuring Agreement A., even if
such CLAIM is groundless, false or fraudulent, and shall have the right to
make such investigation, negotiation and settlement of any CLAIM as it
deems expedient.
McCarthy | Risk Management | Swiss Re Corporate Solutions
What Happens if I Report a Claim or Potential Claim?
26
DEFENSE, INVESTIGATION AND SETTLEMENT OF CLAIMSAs respects such insurance as is afforded by this POLICY:
The Company shall have the right and duty to defend any CLAIM for LOSS
against any INSURED covered by Section I. Insuring Agreement A., even if
such CLAIM is groundless, false or fraudulent, and shall have the right to
make such investigation, negotiation and settlement of any CLAIM as it
deems expedient.
• What does this mean to you?
Most carriers have very knowledgeable claims specialists or claims counsel who will discuss the matter with you and strategize on an action plan.
If applicable, the insurance carrier will appoint counsel who is experienced in legal malpractice claims in your jurisdiction.
McCarthy | Risk Management | Swiss Re Corporate Solutions
What Are Typical Policy Exclusions?
27
• any intentionally criminal, dishonest, malicious, or fraudulent act, error,
omission; or PERSONAL INJURY committed by an INSURED.
• any INSURED'S activities as an officer, director, partner, manager or employee
of any company, corporation, operation, organization, partnership or
association other than the NAMED INSURED
• any PROFESSIONAL SERVICES rendered or that should have been rendered
to or on behalf of any entity other than the NAMED INSURED, which, at any
time, was (1) ten percent (10%) or more owned by any INSURED or
combination of INSUREDS and/or any spouse(s) of any INSURED or
combination of INSUREDS; or (2) held, controlled, managed or operated by
any INSURED or combination of INSUREDS and/or any spouse(s) of any
INSURED or combination of INSUREDS
• any conduct by any INSURED committed within the scope of or while acting
in a capacity as a public official or an employee of a municipality or
governmental body, subdivision, agency, department or unit
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What Damages Are Covered Under the Policy?
28
• "LOSS" MEANS the monetary and compensatory portion of any judgment,
award or settlement, provided always that LOSS shall not include:
• 1. civil or criminal fines, penalties, fees or sanctions;
• 2. matters deemed uninsurable by operation of law;
• 3. punitive or exemplary damages;
• 4. the multiplied portion of any multiple damages;
• 5. the return by any INSURED of any fees or remuneration paid to
any INSURED; or
• 6. any form of non-monetary relief.
McCarthy | Risk Management | Swiss Re Corporate Solutions
What Damages Are Covered Under the Policy?
29
• "LOSS" MEANS the monetary and compensatory portion of any judgment,
award or settlement, provided always that LOSS shall not include:
• 1. civil or criminal fines, penalties, fees or sanctions;
• 2. matters deemed uninsurable by operation of law;
• 3. punitive or exemplary damages;
• 4. the multiplied portion of any multiple damages;
• 5. the return by any INSURED of any fees or remuneration paid to
any INSURED; or
• 6. any form of non-monetary relief.
• What does this mean to you?
– Compensatory damages are typically covered.
– Return of fees is excluded.
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What Else May Be Covered Under a Malpractice Policy?
30
• Grievances:
– Typically a sublimit for defense costs
– Counsel will defend you in a disciplinary proceeding (always a good idea!)
• Subpoenas:
– Typically a sublimit for defense costs
– Counsel will provide advice regarding the production of documents, preparefor sworn testimony and represent at a deposition
• Cyber:
– First party (internal costs) and/or third party (outsider’s claim)
– May be sublimited or exclude certain acts
• Crisis Event:
– Sublimit for costs incurred due to death or illness, workplace violence, firmdissolution
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An Important Reminder….
•Wire transfers are still a problem!
31
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Hackers now intercept email exchanges and send fraudulent wire instructions
VERIFY!
Telephone/obtain fax with letterhead
Wire Transfers - Use Extreme Caution
32
McCarthy | Risk Management | Swiss Re Corporate Solutions
Thank you and have a great day!
33
Employment Issues for Small Law Practices
Hal Frampton
2020
2
Agenda
• Why Worry about Employment Issues
• Employment Practices Liability Insurance
• Hiring New Employees
• Wage and Hour Issues
• Workplace Environment and Operations
• Firing Employees
• What To Do if There May Be a Claim
• Common Employment Claims
3
Why Worry About Employment Issues?
• Ready access to your clients’ confidential information
• Potential access to IOLTA and operating accounts
• No industry standard quality controls for competence or ethics,
yet you are liable for their ethical breaches and mistakes
• Wage and hour claims: not covered by insurance, typically
include double or treble damages and attorneys’ fees
• Other employment claims: typically include potential for
liquidated and/or punitive damages and attorneys’ fees
• Employees are nearly every organization’s largest
cybersecurity risk
4
Employment Practices Liability Insurance
• Typically available as an add-on to your CGL policy
• Premiums and deductibles for small organizations with few claims tend
to be low
• All EPLI policies are manuscript, meaning that they vary greatly from
carrier to carrier and even within carriers – READ YOUR POLICY
• Typically cover standard non-wage & hour employment claims – e.g.,
discrimination, harassment, wrongful termination. Typically do not cover
wage & hour or contractual claims but may (or may not) provide a
defense. ADA claims and defamation claims can be gray areas.
• Defense costs in employment cases regularly exceed $100,000, in part
because most cases are in federal court
• Bottom Line: EPLI coverage is worth exploring with your insurance
agent
5
Hiring – Before You Hire
• Written job descriptions, policies, and procedures
– Include “conspicuous disclaimer” – all caps, underlined, on page 1 of
the document. If it’s an employee handbook, the disclaimer must be
signed by the employee
• Make sure you will be able to meet payroll
• Provide written wage and hour notice
• Conduct an in-person interview
• Check references
• Consider background / FCRA check
– Use reputable third parties to conduct background check
• Inquire about protected characteristics – age, race, disability,
gender, pregnancy / family planning, sexual orientation / gender
conformance, religion, disability
• Ask about prior workers’ comp or employment claims
• Use defined term employment contracts outside of special
circumstances – instead rely on “at will” employment
• Treat applicants differently based on protected characteristics
• Create a situation where anyone (except you) is indispensable
• Ignore red flags – e.g., resume full of multiple short-term stints,
overqualification, large gaps in employment, stories that don’t
add up, references that are noticeably tight-lipped
7
Hiring – On-Boarding
• On-Boarding is part of hiring
• Remember that there is no industry-standard training for legal
secretaries / paralegals – it therefore falls on YOU to train them
• Do not assume that staff were properly trained by their last employer;
take the time to review with them your office procedures, the Rules of
Professional Conduct, and your expectations
• Memorialize the training in writing. Even something as simple as a
signed checklist showing that you reviewed the above items is helpful.
• Failing to train staff can elevate simple negligence to gross
negligence and open the door to punitive damages
8
Wage & Hour Issues
• Fair Labor Standards Act (federal)
– Minimum Wage is $7.25 / hour for all hours worked
– Travel time (not commuting time) generally counts
– Nearly any expenses (other than commuting and normal office attire) you
require the employee to bear will be deducted from wages to determine the
actual wage
– Any hours worked over 40 hours in a week must be paid at time-and-a-half of
the employee’s regular rate
– Paralegals and legal secretaries are NOT exempt. You cannot pay them a set
salary and call it a day.
– You must keep contemporaneous time records of hourly staff. If you fail to
track hours, their testimony as to their hours will be regarded as presumptively
true.
– Overtime must be paid, even if the work was done without prior approval.
Failure to get approval is a disciplinary issue, not a payment issue.
9
Wage & Hour Issues cont.
• S.C. Payment of Wages Act
– Must provide notice of regular wages and hours and seven days’
written notice before making any changes
– Must provide itemized statement of wages and deductions every pay
day
– No deductions without prior notice and authorization
– Must pay terminated employees all wages due at the next regular
paydate not to exceed 30 days
– Best practices is to address in writing whether unused vacation time
is paid out upon termination
10
Wage & Hour Issues – Best Practices
• Have a good, reliable timekeeping system – preferably electronic
• Monitor hours throughout the week to identify potential overtime and
address it
• Do not allow hourly employees to work from home unless you are
prepared to assiduously track and pay for that time; likewise, be wary of
allowing hourly employees to have e-mail / work material on their
phones
• Put all wage and hour policies in writing, particularly PTO policies, and
follow them to the letter
• Do not punish employees by docking pay
• Address potential cash flow problems early
before they reach the level of affecting your
ability to make payroll
11
Workplace Environment and Operations
• Performance management
– Provide regular honest feedback, preferably in writing
– Have a formal review system whereby there is a documented review
of performance at least once a year
» BUT do not limit performance review to once a year. Nothing in an
annual review should be a surprise
– BE HONEST IN REVIEWING PERFORMANCE
– Nip problem performance in the bud early and follow up assiduously
– Do not let performance problems fester
12
Workplace Environment and Operations
• Foster an Environment that Does Not Tolerate Discrimination /
Harassment
– Be professional in all communications and actions and expect the
same of staff
– Sexual Harassment is broad and can include:
» Verbal statements / jokes
» Sexual propositioning
» Physical contact
» Visual images / posters / porn usage
» Any other unwelcome conduct of a sexual or gender-based nature
– Do not retain clients who abuse or harass staff. You can be liable for
your clients’ sexual harassment of your staff.
– Avoid romantic entanglements with staff
– Harassment can be based on any protected characteristic, not just
sex / gender
13
Workplace Environment and Operations
• Cell phones
– Have a clear policy for use of cell phones and other electronic
devices at work
– Avoid asking / allowing hourly employees to use personal electronic
devices for anything but occasional phone calls
– Consider providing phones for firm-related work if such use is
important to your practice
– For attorney employees, have a clear policy with respect to the firm’s
ownership of any firm-related electronic information contained on the
employee’s personal electronic devices and put in writing
14
Workplace Environment and Operations
• Data Security / Client Confidentiality
– Have a clear, written policy requiring that staff maintain the
confidence of client information and train them on it
– To the extent possible, limit staff access to electronic information they
reasonably need to perform their jobs
– Train staff on data security best practices – i.e., choosing a secure
password, not leaving devices on or open, not opening suspicious e-
mails, etc.
– If you allow staff to use personal electronic devices for work, make
sure those devices are secure
– Keep antiviral software / firewall up to date
– Strongly consider consulting an IT professional
15
Firing Employees – Making the Decision
• Performance problems
– Questions to ask yourself:
» Do I believe the employee can improve in a manner that is cost-
effective and does not create undue risk?
» Do I think my greater risk is keeping the employee or firing the
employee?
– If you’re not sure, consider a formal performance improvement plan with
clear metrics for improvement
– If you decide to terminate, gather documentation of performance
problems and review it (hint: there should be such documentation).
• Economic reasons
– Evaluate projected cash flow conservatively
– Consider impact on other employees
– Err on side of avoiding danger of not making payroll
16
Firing Employees – When, Where, How
• Performance reasons
– Meet in private, but have a witness if at all possible
– Keep it short and sweet and do not brook any argument:
» Unicorn standard: Give all of the reasons for the termination
» Gold standard: Give no reasons for the termination
» Do not give some but not all of the reasons; do not give false
reasons; do not tell someone they performed well if they did not;
do not soft pedal. EVERTHING YOU SAY CAN COME BACK TO
BITE YOU. 99% of employers should give no reasons.
» Document what happened; document what was said; document the
reasons for the termination
– Escort the employee out immediately following the termination
conference and disable all access to your systems / files
17
Firing Employees – When, Where, How
• Economic reasons
– Same basic set-up, but be upfront about the reasons for the termination
– Consider severance pay – it’s still not recommended to keep someone who
has been fired with you unless you have complete trust and confidence in the
person
• All reasons
– Make sure you issue the final paycheck appropriately (next regular paydate or
earlier) and pay through the last day of work
– No deductions except those properly disclosed / approved by the employee
– Maintain a neutral reference policy
– Think carefully before fighting unemployment
– No substantive communication with other employees
– Maintain records for at least 3 years
18
Common Employment Claims
• Discrimination
– Regulated by federal law
– Taking adverse employment action against an employee because of
their age (over 40), race, national origin, gender (including failure to
conform to gender stereotype), or religion. (We’ll come back to
disability)
– Applies if you have 15 or more employees (everything but race and
age). Race applies to all employers. Age applies to employers with
20 or more employees.
– Typically must be investigated by EEOC before a lawsuit can be filed
(not race)
19
Common Employment Claims
• Harassment / Hostile Work Environment
– Regulated by federal law
– Defined as unwelcome conduct based on the protected characteristic
that is so severe or pervasive as to alter the conditions of
employment
– Distinguish between co-worker and supervisor harassment
– Typically must go through EEOC (not race)
• Retaliation
– Regulated by federal law
– Prohibits adverse action based on employee’s good-faith opposition
to discriminatory practice or participation in investigation of same
– Subject to same employee thresholds
– “Adverse action” broadly defined
20
Common Employment Claims
• Americans with Disabilities Act
– Must have 15 or more employees
– Disability broadly defined to include any condition that, when active,
substantially interferes with a major life activity or major bodily
function
– Employers required to make reasonable accommodation unless such
accommodation would be an undue burden or the employee would
pose a direct threat to self or others
21
Common Employment Claims
• Fair Labor Standards Act
– Broadly applicable to employees involved in interstate commerce
and/or businesses with $500,000 or more in annual revenue
– Requires payment of minimum wage
– Requires payment of overtime for hourly employees
– Prohibits retaliation
– Allows for 2x damages and attorneys’ fees
– Typically not covered by EPLI
• SC Payment of Wage Act
– Failure to pay employees as agreed – includes claims re: failure to
provide PTO pay as agreed
– Failure to give 7 days’ notice of change in wages / hours
– Allows for treble damages and attorneys’ fees
22
Common Employment Claims
• Wrongful Termination in Violation of Public Policy
– State law claim; allows for punitive damages
– SC Supreme Court has NOT limited to these situations, so we do not
know totality of what may be included
– Demonstrates importance of having good, documented reasons for
termination
• Workers’ Comp Retaliation
– Prohibits terminating employee for making workers’ comp claim
– Damages limited to backpay
23
Common Employment Claims
• Defamation
– Act of termination can carry a defamatory meaning under
current SC law, subject to various privileges
– Importance of handling terminations with utmost discretion
– Punitives available
• Other claims
– Breach of contract / Handbook
– Promissory Estoppel
– Retaliation for Jury Duty / Compliance with a lawful subpoena
– Outrage
24
Offices in All 50 States
www.grsm.com
How to Successfully Handle Your Clients
(Applying the Rules of Professional Conduct)
Susan Taylor Wall
2020
2
South Carolina Rules of Professional Conduct 1.4
Rule 1.4 Communication
A lawyer shall:
1) promptly inform the client of any decision or circumstance with
respect to which the client’s informed consent, as defined in
Rule 1.0(f), is required by these Rules;
2) reasonably consult with the client about the means by which
the client’s objectives are to be accomplished;
3) keep the client reasonably informed about the status of the
matter;
4) promptly comply with reasonable requests for information; and
5) consult with the client about any relevant limitation on the
lawyer’s conduct when the lawyer knows that the client expects
assistance not permitted by the Rules of Professional Conduct or
other law.
3
South Carolina Rules of Professional Conduct 1.4
Rule 1.4 Communication (continued)
(b) A lawyer shall explain a matter to the extent reasonably
necessary to permit the client to make informed decisions
regarding the representation.
4
Communication Starts with a Clear Engagement Letter/Fee Agreement
• Define the client (who is and is not the client, i.e., the business, not the
principals)
• Define the scope of services – be specific
• Set out the hourly rate or contingency fee percent
» expenses are the responsibility of the client (must be reasonable)
• Ask the client to sign the Engagement Agreement
» avoid later misunderstanding – may lead to grievance or
malpractice lawsuit
5
Defining the Client: R. 1.13
Who is the client?
• Representing an Entity
− acts “through its duly authorized constituents”
• Clearly delineate that you do not represent:
partners of partnership
individual joint venturers in joint venture
shareholders in corporation
− (thereafter, be careful not to take sides: one individual or
group against the other)
• Dual representation can arise in context of closely held entities
− be cautious
− be clear in your written communication
6
HANDOUTS
✓Sample Legal Services Agreement
(hourly fee)
✓Sample Contingency Legal Services Agreement
(percentage of recovery)
✓Sample Joint Representation Agreement
7
Always Address:
➢Description of Services
➢ (not to broad)
➢Fees, including when billings will issue
➢Expenses
➢Discharge/Withdrawal
➢Client document handling
No Guarantee of Outcome
8
Update Fee Agreement as Necessary
• Modification of Fee Agreement is subject to limitations:
» Must be reasonable.
» Communicated to and accepted by client.
• Do not unreasonably underestimate fees.
» Why? Unfairly places client at risk of having to negotiate for
more services mid-stream.
9
What is a Reasonable Fee?
• R. 1.5(a) prohibits excessive fee and expenses.
» sets forth 8 factors to determine reasonableness of fee.
• An excessive fee will subject an attorney to discipline, including
disbarment in egregious cases.
In re Archer, 398 SC 145 (2012)
• Safeguards:
» keep contemporaneous hourly records
» (or hourly bills – not lump sum)
10
What to do if Fee Dispute Arises?
R. 1.5
• Your Fee Agreement may include mediation or arbitration provision
However, consider enforceability of arbitration clauses under SC
Code Ann. § 15-48-10(b)(3)
• Resolution of Fee Dispute Board may be invoked by client
(decision may be appealed to circuit court but not beyond)
Board may also arbitrate disputes among lawyers over division of
fees
(less than $50,000)
11
Avoid Fee and Billing Disputes
• Stay within parameters discussed with client
• Never allow AR to accumulate without a plan
• Never let an invoice be your only contact with client
client should never have to learn the status of a file by
reviewing an invoice
• Lawyer should follow up if bill is not getting paid
• Proactively discuss with client any big ticket expense items
12
Managing Client Expectations
COMMUNICATE clearly and often:
» Plan
» Risks
» likely outcomes
• possible loss
• time, expense and effort to forge a positive outcome
» update through written information to client
13
Be Courteous to Your Clients
✓Return calls promptly
✓Respond to emails promptly
but write carefully
re-read before sending
✓Provide alternate contact when out of office
✓BE KIND
✓BE CONSIDERATE
✓BE PROFESSIONAL
14
Document Your Client’s Acceptance/Rejection Understanding of Advice
• Confirming letters/emails
• Detailed billing statements
15
If Matter Proceeds to Trial
• Meet with client and document your discussion
➢ Procedure
➢ judge and jury will make all decisions
➢ witnesses may surprise
➢ evidence may be excluded
➢ jury may be disinclined to believe/award
• No guarantees!
• Do not oversell the case!
16
R. 1.16 – Terminating Representation
• Attorney must withdraw when client demands that attorney
engage in illegal conduct or actions that violate RPC.
• A client can discharge you without cause (not absolute if client
has diminished capacity).
• If withdraw or discharged; obtain permission of tribunal if in
midst of litigation. (See R. 1.14)
• if client refuses to abide by terms of representation agreement,
including payment of fees, you may withdraw only if your
withdrawal can be accomplished without material adverse effect
on interests of the client. (See R. 1.16)
• Send Disengagement/Termination Letter
(See Samples)
17
What if you are TerminatedBefore the Case is Ended?
• S.C. Supreme Court has said
If terminated without cause, compensation may be
appropriate.
Public Service Auth. vs. Weeks, (201 SC 199)
• Not clear what is the measure of compensation:
» hourly fee x hours spent
» quantum meruit
(Ethics Adv. Op. 02-08)
• Consider referencing in Representation/Fee Agreement
18
Always Send Closing (Ending) Letter
✓ Inform client that work has now ceased
✓ “Current” client is now “former” client
✓Reiterate document retention policy
✓ If withdraw or terminated, inform of any time constraints
• (i.e., court has set deadline for new counsel)
• (i.e., S/L may affect rights)
• See Sample
19
Communicate in Writing if You Will NOT Accept the Case/Matter
✓Do not delay
✓Do not express any opinions
✓Recommend an immediate second opinion with lawyer of client’s
choosing
• (if recommending names, give at least 2)
✓There may be time constraints (S/L)
20
Avoid the Surprise that Someone is Now Claiming to be a Client!
• Do not solicit confidential information on-line before a completed
conflicts check
• Watch social chatter; do not provide legal advice
• Be cautious about referrals
• Beware of potential client with:
» financial responsibility issues
» questionable social media presence
» multiple previous attorneys
» multiple previous lawsuits
21
Communicate, Communicate, Communicate!
➢Communicate with clarity
➢Confirm the plan, the risks, and
likely outcomes
➢Confirm any rejected plan and
consequences
➢Repeatedly check for client’s
understanding
22
What is the Number One Reason for Bar Grievances?
Neglect
(failure to regularly
communicate)Remind yourself: Whose case/matter is this?
Acting for the benefit of your client
23
Recent Ethics Opinions - SC Supreme Court
Disbarred; Definite Suspension
• Reporting/Communication/Honesty:
– Failing to obtain written confirmation from client as to settlement
– Failing to clearly / honestly explain status of matter
– Failing to promptly report / disburse settlement funds
• Internal Safeguards/Deadlines:
– Failing to file Summons and Complaint timely
– Failing to effectuate proper service timely
– Failing to calendar due dates (understanding and applying statute of
limitations
• To Avoid Ethics Complaint:
– Clear, honest and frequent communication with client
– Clear, confirmatory writings with client
– Adhering to the law and court orders
24
Recent Cases from SC Supreme Court
• See:
1) In re: Stockholm
➢ Attorney must act with diligence and promptness in representing
client;
➢ Attorney fees must be reasonable and communicated to client;
➢ Client must give informed consent on key matters; and
➢ Attorney must keep client reasonably informed.
2) In re: Jones
➢ Attorney must promptly communicate with client;
➢ Attorney must safeguard client funds; and
➢ Attorney fees and costs (expenses) must be reasonable.
25
Recent Cases from SC Supreme CourtCont.
3) In re: Fitzharris
➢ Attorney must withdraw when lawyer’s mental or physical condition
materially impairs his/her ability for effective representation; and
➢ Attorney shall not settle potential claim for malpractice with
unrepresented client unless client is advised in writing of desirability
of seeking independent legal counsel and is given reasonable time to
do so.
26
CONCLUSION
Communicate
✓ Clearly
✓ Timely
✓Often
Put your client’s interests first
Review often – and apply –
SC Rules of Professional Conduct
27
Be especially vigilant when handling:
1. Personal Injury
2. Real Estate
3. Workers’ Comp
4. Family Law
5. T&E
Most claims for malpractice stem from these 5 areas of practice.
www.grsm.com
Page 1
SAMPLE LEGAL SERVICES AGREEMENT
YOUR FIRM NAME (“Firm”) and [INSERT CLIENT NAME], (“Client”) agree that
Firm will provide legal services to Client as set forth below.
1. SCOPE OF LEGAL SERVICES. The legal services to be provided by Firm pursuant
to this Legal Services Agreement (“Agreement”) to Client are as follows: [INSERT DESCRIPTION OF SERVICES]. No other legal services will be provided to Client unless
Firm agrees to do so in writing. If additional legal services are provided, the terms of this
Agreement shall continue in full force and effect as to such services unless a subsequent legal
services agreement is entered into that expressly supersedes this Agreement.
2. RESPONSIBILITIES OF ATTORNEY AND CLIENT. Attorney will perform the
legal services called for under this Agreement, keep Client informed of progress and
developments, and respond promptly to Client’s inquiries and communications. Client will be
truthful, cooperate with Attorney, attend all meetings, arbitrations, mediations or court events as
requested, provide necessary declarations, promptly pay all fees and costs, and keep Attorney
informed of client’s whereabouts. Client has a duty to read all documents provided by Attorney.
3. ENGAGEMENT FEE WAIVED. Firm is not requesting payment of an advance
engagement fee against anticipated legal services.
[OR]
4. ENGAGEMENT FEE. An advance engagement fee in the amount of [INSERT DOLLAR AMOUNT] is to be paid by Client before representation commences and any legal
services are to be provided, and no later than [INSERT DUE DATE]. The engagement fee will
be deposited in a trust account and will be maintained as a non-interest bearing minimum credit
balance at a banking institution in the State of South Carolina. This minimum credit balance is
not the total fee, nor an estimate of what the total fee will be, and no promises have been made
by Firm that the total fee will not exceed a particular amount. This minimum credit balance is
required to be maintained on Client’s account at all times. Firm may choose to apply monies
from the minimum credit balance to any invoiced balance that is due and payable in which case
Client will be requested to pay the sum required to restore the minimum credit balance. Client
agrees that Firm is authorized to transfer funds from the trust account to Firm’s general account
at any time for the payment of fees and costs incurred under this Agreement, including, but not
limited to, payment of fees and costs due and payable upon termination of representation of
Client or a particular matter for Client.
5. FEES AND BILLING. Firm time will be accounted for in tenths of an hour and fees are
calculated by applying hourly rates assigned to Firm attorneys and other staff. Rates may also be
subject to Court approval pursuant to applicable statutory restrictions. Firm may, from time to
time and in its sole discretion, utilize contract, outsource, and/or temporary service providers in
connection with performing certain of the tasks to be rendered in connection with this
engagement at the rates listed below. Fees and expenses will be billed monthly and are due upon
receipt. Any bills that are not paid within 45 days from our mailing may be subject to a late
Page 2
charge equal to the lesser of 1% per month on the unpaid balance or the maximum rate permitted
by law. The current range of rates is set forth below. The invoices provided to Client will reflect
all Firm personnel who have billed time related to the representation of Client and their rates.
Partner/Counsel $______
Associate $______
Paraprofessional $______
6. EXPENSES. Client is responsible for all expenses incurred by Firm in this
representation. Certain expenses may include a standard overhead component when billed and
are set forth below. Firm will obtain advance payment for expenses from Client, subject to
exceptional circumstances when Firm in its discretion may determine to advance a cost. If Firm
advances an expense, Client will remain liable for the expense, and Client agrees to reimburse
Firm regardless of the outcome of this matter. Examples of expenses charged at cost include, but
are not limited to, air travel, meals, experts, consultants, investigators, filing fees, court reporters,
transcripts, postage, facsimiles, phone charges, overnight packages and couriers.
7. FIRM’S LIEN. Firm will have a lien for Firm’s fees and advanced expenses with
respect to the matters which are the subject of this Agreement and on all proceeds of any
recovery obtained whether by settlement, arbitration award, or court judgment or on any property
obtained. This generally means that Firm has an ownership interest in any recovery by Client to
the extent of Firm’s unpaid fees and expenses. Client acknowledges that it is aware of the right to
seek the advice of independent counsel as to this provision and has been provided a reasonable
opportunity to do so.
8. REPRESENTATION OF ADVERSE INTERESTS. Client is informed that the South
Carolina Rules of Professional Conduct requires that before an attorney may begin or continue to
represent the client when the attorney has or had a relationship with another party interested in
the subject matter of the attorney’s proposed representation of the client, that the attorney fully
disclose to the client the relevant circumstances and counsel the client on the actual and
reasonably foreseeable adverse consequences to the client. Client is further informed that the
Rules require that, before an attorney may represent a party who has, in a separate matter, an
interest adverse to that of Attorney’s client in the separate matter, Attorney obtain the informed
written consent of both parties. Attorney is not aware of any relationship it has with any other
party interested in the subject matter of Attorney’s services for Client under this Agreement or of
any separate matter in which Client has an interest adverse to that of any client of Attorney.
9. FIRM AUTHORITY. Client hereby gives Firm the power and authority to execute any
and all pleadings, claims, contracts, drafts, checks, dismissals, deposits, orders and other papers
and to receive in the name and stead of the undersigned any monies or other things of value
which may properly be payable or deliverable to the undersigned on account of any judgment
recovered or settlement entered into in connection with the Client’s claim.
10. SETTLEMENT CONSENT. No settlement shall be made without the written,
transcribed or electronically communicated consent of client.
Page 3
11. DISCHARGE OF FIRM. Client may discharge Firm at any time by written notice
effective when received within two days of delivery to Firm. Unless specifically agreed by Firm
and Client, Firm will provide no further services and advance no further expenses on Client’s
behalf after receipt of the notice unless required to do so in order to protect Client’s interests. If
Firm is Client’s attorney of record in any proceeding, Client will execute and return a
substitution-of-attorney form executed by Client immediately on its receipt from Firm.
Notwithstanding Firm’s discharge, Client will be obligated to pay Firm’s fees per this Agreement
for all services provided and to reimburse Firm for all expenses incurred or advanced by Firm
before the discharge, incurred in effectuating the discharge and as necessary to protect the
interests of the Client.
12. WITHDRAWAL OF FIRM. Firm may withdraw at any time as permitted under the
South Carolina Rules of Professional Conduct. The circumstances under which the Rules permit
such withdrawal include, but are not limited to, the Firm concluding that representation will
result in violation of the Rules of Professional Conduct or other law; the physical or mental
condition of the attorney handling this matter on behalf of Firm materially impacts Firm’s
ability to represent Client; Firm is discharged; Client persists in a course of action involving
Firm’s services that the Firm reasonably believes is criminal or fraudulent; Client has used
Firm’s services to perpetrate a crime or fraud; Client insists upon taking action that the Firm
considers repugnant or with which Firm has a fundamental disagreement; Client fails
substantially to fulfill an obligation to Firm; or the representation will result in an unreasonable
financial burden on the lawyer or has been rendered unreasonably difficult by Client. . Firm
may be required or elect to withdraw if a conflict of interest develops between Client, any other
persons and entities, and/or Firm, including any conflict between the interests of Client and Firm
that is not waived or waivable that adversely affects Firm’s ability to provide the type of
representation it has a duty to, or should, provide to Clients, or if the matter requires an expertise
which Firm does not have and it would not be practicable to develop under the circumstances.
Notwithstanding Firm’s withdrawal, Client is obligated to pay Firm the contractual Firm fees for
all services provided and to reimburse Firm for all expenses incurred or advanced by Firm before
the withdrawal, or in the case of an adjudicatory proceeding, through the time when an order
allowing the withdrawal is obtained.
13. MAINTENANCE OF CLIENT DOCUMENTS. Firm may maintain documents
related to the representation of Client in an electronically stored format only. Once such
documents are scanned and stored electronically, the paper form of the document may be
destroyed, unless otherwise agreed with Client. Firm, in its discretion, may maintain certain
documents in other than electronic form if necessary.
14. RELEASE OF CLIENT’S DOCUMENTS. Once the services under this Agreement,
have been completed, Firm will deliver to Client upon request, all existing hard copy documents
related to representation of Client. The documents will be sent to the Client address listed below,
to the attention of the Client signatory. If Client also requests delivery of documents related to
representation of Client existing in electronic form, Firm will provide them to Client via a disk or
the internet. The documents to be returned to Client include items reasonably necessary for
Client’s representation, excepting attorney work product or those documents which are otherwise
privileged from disclosure. Firm retains the right to keep copies of all Client documents. If
Client declines delivery of the documents, does not respond to related communications from
Page 4
Firm within 30 days or if Client cannot be located upon reasonable investigation, Firm will have
no further obligation to retain the documents except as may be applicable under the Rules of
Professional Conduct.
15. MEDIATION OF ALL ISSUES. [In the event of any dispute relating to this
Agreement, the relationship between Firm and Client, or the services performed [including but
not limited to disputes regarding Firm’s fees or expenses and those involving claims of
negligence, breach of fiduciary duty or contract, fraud or any claims based upon a written law]
Firm and Client agree to first (and before initiating any legal action or arbitration) meet and
confer within 30 days’ notice by one party to another in an effort to negotiate a resolution of the
dispute.]
If the dispute is not resolved through negotiation, Firm and/or Client shall, and before
initiating any legal action, within 30 days of failed negotiations, request that the American
Arbitration Association (AAA) choose a neutral mediator to conduct an in person mediation in
the Firm’s office from which the services were performed with all involved parties to take place
within 30 days of contact with AAA. Firm and Client agree to share equally in the cost of the
mediation. If the dispute is not resolved after mediation, then the dispute may be resolved in the
court system, with venue of such dispute to be the location of the Firm office where the majority
of the Firm’s services were performed.
If a dispute arises between Firm and Client regarding Firm’s fees or expenses under this
Agreement, and the amount at issue is less than $50,000, Client has the right to request
restitution through the Resolution of Fee Disputes Board. (Rule 446, SCACR) in a timely
fashion as per the Rule. If Client does not timely elect to proceed under the State Bar fee
procedures, any dispute over Firm’s fees or expenses may be resolved through initiation of a
legal action.
16. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the parties.
No other agreement, statement, or promise made on or before the effective date of this
Agreement will be binding on the parties.
17. SEVERABILITY IN EVENT OF PARTIAL INVALIDITY. If any provision of this
Agreement is held by a court or other tribunal of competent Jurisdiction, in whole or in part, to
be unenforceable for any reason, the remainder of that provision and of the entire agreement will
be severable and remain in effect.
18. MODIFICATION BY SUBSEQUENT AGREEMENT. This Agreement may be
modified by subsequent agreement of the parties but only if in writing.
19. NON-ASSIGNABILITY. Client agrees not to assign, sell or otherwise transfer any
rights to pursue any type of claim against Firm including, but not limited to, professional
negligence, breach of contract or breach of any duties owed to Client and that any such
assignment is void and without effect.
20. APPLICABLE LAW. The laws of the State of South Carolina shall govern the
construction and interpretation of this Agreement, excluding its conflicts of law provisions that
would result in the application of the laws of any jurisdiction other than South Carolina
Page 5
21. NO GUARANTEE OF OUTCOME. Firm does not guarantee that any specific result
or outcome will occur in this matter, including the amount of fees and expenses incurred during
the course of the representation. The parties acknowledge that no representation has been made
to the undersigned or their representatives concerning the outcome or probable outcome of the
subject matter this Agreement.
22. POSSIBLE PAYMENT BY CLIENT OF ADVERSE PARTIES’ FEES AND COSTS. Client acknowledges that in certain circumstances Client may be obligated to pay an
adverse party or parties' fees and/or costs incurred depending on the outcome of the legal
proceedings which are the subject of this Agreement. Such payment is the sole responsibility of
Client and not of Firm.
23. OPPORTUNITY TO CONSULT WITH OTHER COUNSEL. You may wish to
consult with another legal counsel about the content and effect of this Agreement before signing
below. Your signature will certify that you have either met with another attorney before signing
or have chosen not to do so, but you understand you have the right and have had the opportunity
to consult with another legal counsel.
24. EFFECTIVE DATE OF AGREEMENT. The effective date of this Agreement will be
the latest date of signing by Client or signing by a partner of Firm and its terms shall be
retroactive to the date Firm first performed services for Client which are the subject of this
Agreement. Firm has no obligation to provide any services until this agreement has been fully
executed by Firm and Client.
25. CONFIRMATION OF UNDERSTANDING. It is acknowledged by the signature
below that Client has read this entire Agreement, understands all of its terms and that any and all
questions Client has about the Agreement have been answered adequately.
Page 6
The foregoing is agreed to by:
Dated:
CLIENT
Name:
Title:
Address:
Phone Number:
E-mail:
Dated:
FIRM
Name:
Title:
Address:
Phone Number:
E-mail:
Page 1
SAMPLE CONTINGENCY LEGAL SERVICES AGREEMENT
YOUR FIRM NAME (“Firm”) and [INSERT CLIENT NAME], (“Client”) hereby
agree that Firm will provide legal services to Client on the terms set forth below.
1. CONDITIONS. This Agreement will not take effect, and Firm will have no obligation
to provide legal services, until Client returns a dated and signed copy of this Agreement to Firm.
2. SCOPE OF LEGAL SERVICES. The legal services to be provided by Firm to Client
are as follows: [INSERT DESCRIPTION OF SERVICES]. No other legal services will be
provided to Client unless Firm agrees to do so in writing. If additional legal services are
provided, the terms of this Agreement shall continue in full force and effect as to such services
unless a subsequent legal services agreement is entered into that expressly supersedes this
Agreement.
3. RESPONSIBILITIES OF ATTORNEY AND CLIENT. Attorney will perform the
legal services called for under this Agreement, keep Client informed of progress and
developments, and respond promptly to Client’s inquiries and communications. Client will be
truthful, cooperate with Attorney, attend all meetings, arbitrations, mediations or court events as
requested, provide necessary declarations, promptly pay all fees and costs, and keep Attorney
informed of client’s whereabouts. Client has a duty to read all documents provided by Attorney.
4. CONTINGENCY FEE ARRANGEMENT. Client agrees to pay to Firm for
professional services a fee equal to _____ percent of any and all amounts recovered in such
matter by way of settlement, judgment or otherwise. Firm shall be entitled to this fee after
payment to Firm of all related costs and expenses and before disbursement to Client. The
foregoing fee refers to services in the trial or appellate courts or arbitration or administrative
proceedings. If no recovery is obtained, Firm will receive no fee for its services, nor
reimbursement for their costs subject to the provisions hereinafter. These fee arrangements are
negotiable and not set by law. By signing this Agreement, Client accepts these terms and agrees
that they are reasonable. If the recovery consists of payments to be made over a period of time,
or other property not entirely cash or cash-equivalent, the contingency fee shall be based on the
present cash value of the recovery as determined by generally-recognized accounting and
appraisal standards.
The contingency fee shall be paid out of the first funds or property received by Client.
Client represents that Client has not given a security interest or otherwise assigned
(voluntarily or involuntarily) any interest in the claim which is the subject of this Agreement.
5. COSTS AND EXPENSES. Firm may, in its discretion, associate counsel of its choice,
but payment of such counsel’s fee will be the sole responsibility of Firm. Firm will advance any
costs which will be charged at cost and typically include, but are not limited to, travel, meals,
phone charges, overnight packages and couriers. The current schedule of commonly incurred
expenses charged at certain rates is set forth below and is reconsidered annually:
Page 2
Photocopying
Facsimile
Mileage
Computer legal research
Telephone
Postage
These costs will be paid directly out of any recovery in the case, and should there be no
recovery, Client will not be obligated for these costs advanced in the prosecution of this claim
except as stated hereinafter. If Client wishes to have a right of prior approval of expenses above
a certain amount, that must be made known to Firm by Client and negotiated and included in this
Agreement.
For personal injury cases it is understood that related costs including but not limited to
medical care and treatment are the sole obligation of the Client, for which the undersigned Client
is responsible either independently or out of Client’s share of any recovery, as the case may be,
and do not constitute costs under this Agreement nor charges against Firm in any way.
Additionally, services and costs not covered by this Agreement unless separately and explicitly
agreed to in writing include defense of any lawsuit or cross-complaint filed against Client in
connection with the above matter.
6. REPRESENTATION OF ADVERSE INTERESTS. Client is informed that the South
Carolina Rules of Professional Conduct requires that before an attorney may begin or continue to
represent the client when the attorney has or had a relationship with another party interested in
the subject matter of the attorney’s proposed representation of the client, that the attorney fully
disclose to the client the relevant circumstances and counsel the client on the actual and
reasonably foreseeable adverse consequences to the client. Client is further informed that the
Rules require that, before an attorney may represent a party who has, in a separate matter, an
interest adverse to that of Attorney’s client in the separate matter, Attorney obtain the informed
written consent of both parties. Attorney is not aware of any relationship it has with any other
party interested in the subject matter of Attorney’s services for Client under this Agreement or of
any separate matter in which Client has an interest adverse to that of any client of Attorney.
7. FIRM AUTHORITY. Client hereby gives Firm the power and authority to execute any
and all pleadings, claims, contracts, drafts, checks, dismissals, deposits, orders and other papers
and to receive in the name and stead of the undersigned any monies or other things of value
which may properly be payable or deliverable to the undersigned on account of any judgment
recovered or settlement entered into in connection with the Client’s claim.
8. CLIENT FUNDS. South Carolina Rule of Professional Conduct 1.15 requires that any
funds received or held for the benefit of Client, including advances for costs and expenses, be
deposited in one or more identifiable bank accounts labeled “Trust Account,” or with words of
similar import, in the State of South Carolina (or elsewhere with Client’s or a third party’s
consent). Firm shall promptly notify Client of the receipt of Client funds, securities, and or other
Page 3
properties. Firm shall maintain complete records of all funds coming into the possession of the
Firm and render appropriate accounts to Client regarding them. Firm shall promptly pay or
deliver, as requested by Client, any funds, securities, or other properties in the possession of
Firm that the Client is entitled to receive. Funds deposited in a trust account will be maintained
as a non-interest bearing minimum credit balance. The trust account may be with a banking
institution located in another state. Client agrees that Firm is authorized to transfer funds from
the trust account to Firm’s general account at any time for the payment of fees and costs incurred
under this Agreement, including, but not limited to, payment of fees and costs due and payable
upon termination of representation of Client or a particular matter for Client.
9. FEE AWARDS. It is understood that any sanctions or fee awards to Firm and/or Client
shall belong exclusively to Firm. But if the sanctions award includes a cost item (such as the
filing fee for making a motion), the amount thereof shall be credited to Client's costs account
when received by Firm.
10. SETTLEMENT CONSENT. No settlement shall be made without the written,
transcribed or electronically communicated consent of the Client. If an offer of settlement is
deemed appropriate by the Firm but declined by the Client, and thereafter no recovery is awarded
to Client, expenses incurred as set forth above shall be the responsibility of Client, unless Firm
agrees in writing to waive such recovery from Client.
11. FIRMS’ LIEN. Firm will have a lien for Firm’s fees recoverable under this Agreement
and costs advanced with respect to the claim and on all proceeds of any recovery obtained
whether by settlement, arbitration award, or court judgment or on any property obtained,
including by patent, trademark, copyright, rescission, specific performance or other means. This
generally means that Firm has an ownership interest in any recovery by Client to the extent of
Firm’s unpaid fees and costs. Client acknowledges that it may seek the advice of an independent
lawyer of the Client’s choice as to this, or any other, issue and that Client has been given a
reasonable opportunity to seek that advice.
12. DISCHARGE OF FIRM. Client may discharge Firm at any time by written notice
effective when received within two days of delivery to Firm. Unless specifically agreed by Firm
and Client, Firm will provide no further services and advance no further costs on Client’s behalf
after receipt of the notice unless required to do so in order to protect Client’s interests. If Firm is
Client’s Firm of record in any proceeding, Client will execute and return a substitution-of-Firm
form immediately on its receipt from Firm. Notwithstanding Firm’s discharge, Client will be
obligated to pay Firm the value of its services provided and to reimburse Firm for all costs
incurred or advanced by Firm, before the discharge, incurred in effectuating the discharge and as
necessary to protect the interests of the Client. The value of Firm’s services shall be calculated
by the Firm’s pro rata percentage share of any financial settlement or recovery by Client based
on its contribution to same or based on the value of it services based on the Firm’s customary
hourly rates for this type of legal work for the legal services provided by its professionals,
whichever is greater.
13. WITHDRAWAL OF FIRM. Firm may withdraw at any time as permitted under the
South Carolina Rules of Professional Conduct The circumstances under which the Rules permit
such withdrawal include, but are not limited to, the Firm concluding that representation will
Page 4
result in violation of the Rules of Professional Conduct or other law; the physical or mental
condition of the attorney handling this matter on behalf of Firm materially impacts Firm’s
ability to represent Client; Firm is discharged; Client persists in a course of action involving
Firm’s services that the Firm reasonably believes is criminal or fraudulent; Client has used
Firm’s services to perpetrate a crime or fraud; Client insists upon taking action that the Firm
considers repugnant or with which Firm has a fundamental disagreement; Client fails
substantially to fulfill an obligation to Firm; or the representation will result in an unreasonable
financial burden on the lawyer or has been rendered unreasonably difficult by Client. Firm may
be required or elect to withdraw if a conflict of interest develops between Client, any other
persons and entities and/or Firm, including any conflict between the interests of Client and Firm
that is not waived or waivable which adversely affects Firm’s ability to provide the adequate
representation, or if the matter requires an expertise which Firm does not have and it would not
be practicable to try to develop under the circumstances. Notwithstanding Firm’s withdrawal,
Client will be obligated to pay Firm the value of its services provided and to reimburse Firm for
all costs incurred or advanced by Firm, before the discharge, incurred in effectuating the
discharge and as necessary to protect the interests of the Client. The value of the firm’s services
shall be calculated by the Firm’s pro rata percentage share of any financial settlement or
recovery by Client based on its contribution to same or based on the value of it services based on
the Firm’s customary hourly rates for this type of legal work for the legal services provided by
its professionals, whichever is greater.
14. MEDIATION OF ALL ISSUES. [In the event of any dispute relating to this
Agreement, the relationship between Firm and Client, or the services performed (including but
not limited to disputes regarding Firm’s fees or expenses and those involving claims of
negligence, breach of fiduciary duty or contract, fraud or any claims based upon a written law)
Firm and Client agree to first (and before initiating any legal action) meet and confer within 30
days’ notice by one party to another in an effort to negotiate a resolution of the dispute.]
If the dispute is not resolved through negotiation, Firm and/or Client shall, and before
initiating any legal action, within 30 days of failed negotiations, request that the American
Arbitration Association (AAA) (or other body) choose a neutral mediator to conduct an in person
mediation in the Firm’s office from which the services were performed with all involved parties
to take place within 30 days of contact with AAA. Firm and Client agree to share equally in the
cost of the mediation. If the dispute is not resolved after mediation, then the dispute may be
resolved in the court system, with venue of such dispute to be the location of the Firm office
where the majority of the Firm’s services were performed.
15. ARBITRATION OF FEE AND COSTS DISPUTES. If a dispute arises between Firm
and Client regarding Firm’s fees or expenses under this Agreement, Client has the right to
request resolution pursuant to Rule 416, SCACR, subject to the Rule’s amount and timing. If
Client does not timely elect to proceed under this procedure, any dispute over Firm’s fees or
expenses may be resolved through legal action.
16. MAINTENANCE OF CLIENT DOCUMENTS. Firm may maintain documents
related to the representation of Client in an electronically stored format only. Once such
documents are scanned and stored electronically, the paper form of the document may be
Page 5
destroyed, unless other arrangements are made with Client. Firm, in its discretion, may maintain
certain documents in other than electronic form if necessary.
17. RELEASE OF CLIENT’S DOCUMENTS. Once the services under this Agreement,
have been completed, Firm will deliver to Client upon request all existing hard copy documents
related to representation of Client. The documents will be sent to the Client address listed below,
to the attention of the Client signatory. If Client also requests delivery of documents related to
representation of Client existing in electronic form, Firm will provide them to Client via a disk or
the internet. The documents to be returned to Client include items reasonably necessary for
Client’s representation, excepting attorney work product or those documents which are otherwise
privileged from disclosure. Firm retains the right to keep copies of all Client documents. If
Client declines delivery of the documents, does not respond to related communications from
Firm within 30 days or if Client cannot be located upon reasonable investigation, Firm will have
no further obligation to retain the documents and may destroy them in its discretion without
further notice to Client, subject to the Rules of Professional Conduct.
18. NON-ASSIGNABILITY. Client agrees not to assign, sell or otherwise transfer any
rights to pursue any type of claim against Firm including, but not limited to, professional
negligence, breach of contract or breach of any duties owed to Client and that any such
assignment is void and without effect.
19. APPLICABLE LAW. The laws of the State of South Carolina shall govern the
construction and interpretation of this Agreement, excluding its conflicts of law provisions that
would result in the application of the laws of any jurisdiction other than South Carolina.
20. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the parties.
No other agreement, statement, or promise made on or before the effective date of this
Agreement will be binding on the parties.
21. SEVERABILITY IN EVENT OF PARTIAL INVALIDITY. If any provision of this
Agreement is held by a court or other tribunal of competent jurisdiction, in whole or in part, to be
unenforceable for any reason, the remainder of that provision and of the entire agreement will be
severable and remain in effect.
22. MODIFICATION BY SUBSEQUENT AGREEMENT. This Agreement may be
modified by subsequent agreement of the parties only in writing.
23. NO GUARANTEE OF OUTCOME. Firm does not guarantee that any specific result
or outcome will occur in this matter, including the amount of fees and expenses incurred during
the course of the representation. The parties acknowledge that no representation has been made
to the undersigned or their representatives concerning the outcome or probable outcome of the
subject matter this Agreement.
24. POSSIBLE PAYMENT BY CLIENT OF ADVERSE PARTIES’ FEES AND COSTS. Client acknowledges that in certain circumstances Client may be obligated to pay an
adverse party or parties' fees and/or costs incurred depending on the outcome of the legal
proceedings which are the subject of this Agreement. Such payment is the sole responsibility of
Client and not of Firm.
Page 6
25. EFFECTIVE DATE OF AGREEMENT. The effective date of this Agreement will be
the latest date of signing by Client, or an authorized representative of Client, and signing by a
partner of Firm and its terms shall be retroactive to the date Firm first performed services for
Client which are the subject of this Agreement.
26. OPPORTUNITY TO CONSULT WITH OTHER COUNSEL. You may wish to
consult with another attorney of law firm before signing below. Your signature will certify that
you have either met with another Firm before signing or have chosen not to do so, but yet you
understand and appreciate you have the right and have had the opportunity to consult with
another attorney.
27. CONFIRMATION OF UNDERSTANDING. It is acknowledged by the signature
below that Client has read this entire Agreement, understands all of its terms and that any and all
questions Client has about the Agreement have been answered adequately.
Page 7
The foregoing is agreed to by:
Dated:
[CLIENT] Name:
Title:
Address:
Phone Number:
E-mail:
Dated:
[FIRM NAME] Name:
Title:
Address:
Phone Number:
E-mail:
8011178/46274251v.1
SAMPLE JOINT REPRESENTATION AGREEMENT
Re:
Dear ___________ and ____________:
This letter is to confirm FIRM’s joint representation of [insert] and [insert] in connection with [Provide a brief description of the scope of the representations, including any limitations on the representation.] (“Matter”). We appreciate the opportunity to work with you.
All fees and expenses incurred for services rendered by FIRM in defending ___________ and ___________ in connection with the Matter will be paid by ___________. [This paragraph is optional: depends on fee arrangement] [Insert specifics on hourly or other fee/cost agreement.]
Each of you agrees not to take a position which is adverse to each other while jointly represented by the Firm. As you are aware, our joint representation of you could represent a conflict of interest since each of you could have claims or take positions against the other. [PROVIDE POSSIBLE EXAMPLES]. Under the South Carolina Rules of Professional Conduct, a law firm may not represent a client if representation of that client will be directly adverse to another client or may be materially limited by the lawyer’s responsibilities to another client unless (i) the firm reasonably believes that such representation would not be adversely affected by its responsibility to the other client and will not adversely affect its relationship with the other client; and (ii) each client consents in writing after consultation. It is our belief that the proposed joint representation of both of you will not, at the present time, adversely affect our representation of you.
We further understand that you have authorized us to freely share all information (including privileged and confidential information) material to such representation with each of you. Specific consent to this sharing of information is a precondition to our joint representation. By signing this agreement, none of you has waived its respective right to assert the attorney-client privilege and neither FIRM nor its attorneys will attempt to preclude you from asserting such privilege against a third party non-client.
In addition, we understand that you have agreed that if we determine for professional reasons that we are no longer able to continue such joint representation, we may continue to represent ___________ in connection with this Matter even if we are no longer able to represent ____________ and even if _______ has shared confidential information with us that potentially may be used to _________’s detriment in this matter. ___________ will not assert a conflict of interest by our continuing to represent ___________ in this Matter or any other matter, such position being waived by ________________.
If at any point in time you believe that our representation is no longer in your best interest, you are free to terminate this relationship at any time subject to the limitations described above. We strongly recommend that you consult with independent legal counsel regarding this agreement and the terms thereof, and we have provided sufficient time for you to do so before
[Date]
Page 2
signing this agreement. Accordingly, by signing this agreement, each of you consents to our joint representation of you in connection with the above identified Matter.
We will proceed as outlined above and should you at any time have any questions, comments or concerns relating to the handling of this Matter, please do not hesitate to contact me. We look forward to working with you.
CONSENT FORM
I consent to the Joint Representation arrangement outlined in this letter. I acknowledge that I
have the right and opportunity to discuss this agreement with independent counsel and that I
have determined that this agreement sets forth the terms under which I wish to proceed.
Date:
Name:
Title:
Date:
Name:
Title:
8011178/47059157v.1
SAMPLE OF DISENGAGEMENT DURING REPRESENTATION LETTER
Dear [Client]:
This will confirm our conversation of [date] in which we agreed to terminate this firm’s
performance of legal services for you [in connection with __________ (specify matter, if
appropriate)].
We caution you that applicable statutes of limitations may be about to expire, and you should
take immediate steps to confer with other counsel to protect any rights which you may have and
which might be lost by you as a result of one or more such statutes.
[If matter is in litigation: The following events and deadlines are scheduled in this matter __ ___.
It is important that you make arrangements to attend to them so that you are not prejudiced.]
In connection with the termination of our services, we will, upon written request, deliver your
file to you or to an attorney designated by you to receive the file. You should advise us promptly
of how you wish to dispose of such matters.
[In connection with the termination of our services for you, all of our outstanding invoices for
fees and disbursements are now due and payable, and we enclose our final invoice for services
rendered and disbursements made on your behalf. We request that you pay promptly the
enclosed statement and those previously submitted to you which remain unpaid.]
NOTE: This form is a suggested model that should be adapted to the particular circumstances.
SAMPLE OF CLOSING LETTER
Dear [Client]:
As you aware, this matter in which we have been representing you has now concluded. [Describe
how it has concluded, for example, settlement, final judgment, transaction closed, etc….].
Since all legal work required for this matter has now been completed, we are closing our file and
removing it from our active accounts. [We will be returning to you any physical, hard copy
documents that you provided related to this matter.] [Consider whether firm wants to keep
electronic copies of returned materials.] We recommend that you keep all information relating to
the matter in a safe place where it can be easily located in the future if needed.
If there are any continuing duties for you to perform in connection with the resolution of this
matter or if subsequent issues arise related to this matter, the firm will not be providing related
legal services for you unless there is a separate written agreement between us to do so.
We have enjoyed working with you and hope that this matter has been completed to your
satisfaction.
NOTE: This form is a suggested model that should be adapted to the particular circumstances.