Many attorneys who have faced a claim or complaint from a client will say, in retrospect, that they should have known better. Some will even say that they knew at the very beginning of the problematic representation that something was not right or that the representation would be complicated. As a result, screening clients has become an increasingly important part of legal malpractice claim prevention.
Understandably, the idea of screening clients—and losing out on potential work—can be a conflict to many attorneys’ financial goals. Strict conflict of interest rules sometimes limit the work that an attorney can take on, and few attorneys are looking for more ways to reduce their potential client base. However, a problem client does not often get better with time and can create more risk—or even loss—than the promised gain. Over the course of a representation, problem clients can go from being challenging relationships to legal malpractice claims in progress.
The challenge is to try to identify and screen out problem clients who may not be worth the risk of representing. Depending on the size, type, goals, and locations of a law practice, a “problem” client may mean different things. Because the decision to take on a new client typically rests with the attorney’s judgment, there is really no ‘one size fits all’ formula to apply. But, there are some common characteristics and risks to consider. Some common indicators are fairly obvious. Others result from years of data regarding legal malpractice claims and the risks of the modern-day law practice.
Here are some issues to consider in deciding whether to listen to that little voice saying that a new representation may not be worth the risk.
Is the Client Very Litigious?
Common sense goes a long way in detecting potential problem clients. One of the most telling questions to ask a new client is: “How many attorneys have represented you in this matter before now?” If the answer is “seven,” an attorney may think long and hard about becoming the eighth. A client who is impossible to please may be unlikely to change their tune.
Worse yet, if their case or transaction does not go well, that client may even hire a ninth attorney to sue the eighth for legal malpractice. Similarly, if the seven previous attorneys refused to take on the case, that might raise additional questions as to why.
There are other similar questions that may shed some light on additional risks. For example: “How many times have you been a party to litigation before?” This is obviously not a bright-line rule. Large companies, for example, are frequently parties to litigation. Or, an individual client who may be involved in several lawsuits arising out of a single event or transaction, which would not necessarily suggest that the client is unreasonable.
However, potential clients who have unusually litigious histories might raise some red flags. The client who has made a career of suing other people for minor or perceived slights—their homeowner’s association, their former employer, their auto mechanic—may at some point make their way to suing their attorneys.
What is the Scope?
Many client relationships involve the management of expectations, even for very reasonable clients. Indeed, it can be part of the duty of candor to clients. Thus, many attorneys find it valuable to inquire about the prospective client’s expectations for both the representation and the attorney before agreeing to take on the case.
Sometimes clients expect their attorney to achieve the impossible through whatever means are necessary. However, a candid conversation about what is possible, along with a description of what the attorney can and cannot do, is important and can be quite helpful. If the client is resistant to such ethical limitations, the attorney may have an ethical obligation to decline the representation—or may simply decide that the representation is more trouble than it’s worth.
What’s the First Deadline?
It is a standard question when taking on a new representation to find out what the first deadlines are. Sometimes, however, a matter can come in on the eve of an important deadline, like the statute of limitation expiry for a plaintiff’s claim or a closing for a corporate transaction. Unrealistic deadlines can be red flags for a new representation.
Sometimes, there are good reasons a client is reaching out to an attorney to undertake a representation on the eve of a pressing deadline. But it could be that the reason a client needs an attorney is also a reason to have second thoughts about accepting the representation. It could be that an earlier attorney fired the client because the client did not pay. Or there could be intractable problems that have left the client at the end of his rope.
This does not mean that an attorney should never accept a last-minute representation. Instead, it is just another factor to consider in the overall scheme.
What Does the Firm Require?
Many firms have a mandatory checklist when a new matter comes to the firm: a conflicts check, an engagement letter or other tasks.
Such systems work well when routinely applied. Inevitably, it is the one prospective client who escapes the screening filters that can create problems for the attorney. In fact, for some clients, it is their ability to convince others to abandon the rules and ignore the systems that makes them the most risky clients.
Can the Client Pay?
Ethical obligations generally dictate that attorneys must explain their fee to their clients. Attorneys can also consider whether it seems likely that the clients can pay that fee. Taking on matters that have a low risk of ever paying the attorney can create unnecessary risk.
What Else Can Be Uncovered?
The internet provides cost-effective and fast tools for conducting some preliminary background research regarding prospective clients. Although this is not a necessary step, some simple Google searches may reflect a prospective client who has a history of legal problems or other risk factors. Alternatively, a litigation search might reflect a prospective client who has sued their attorneys before.
There is rarely an answer that automatically means an attorney should decline a representation, other than those prospective clients who are seeking an attorney to assist them with an illegal or unethical goal, such as bringing a litigation simply to harass another party. Rather, each of these points is worth consideration. Each response presents unique risks to each practice.
Shari L. Klevens is a partner at Dentons and serves on the firm’s U.S. board of directors. She represents and advises lawyers and insurers on complex claims, is co-chairwoman of Dentons’ global insurance sector team, and is co-author of “California Legal Malpractice Law”
Alanna C. Clair is a partner at the firm and focuses on professional liability defense. Klevens and Clair are co-authors of “The Lawyer’s Handbook: Ethics Compliance and Claim Avoidance.”