The art of risk management for lawyers representing lawyers.

• Author: Grossbaum, David A.

IN REPRESENTING lawyers we see first hand the consequences of the mistakes lawyers--even great lawyers--make every day. Still, it is one thing to recognize where other lawyers made mistakes and quite another to implement within our own firms the practices that we preach will prevent avoidable claims.

Like every professional faced with the allegation that he or she departed from the accepted standards in their field, lawyer defendants react more strongly to the existence of a claim. Perhaps like the physician who knows too much about illness, an attorney knows too much about the consequences of a malpractice claim and the impact of protracted litigation.

Whatever the reason, lawyer clients are challenging. Managing the relationship from the outset is the most effective way of building a relationship designed to eliminate or minimize the effect of the claim.

This article is intended to address the intertwined issues of managing the relationship with the attorney-client and how to use that relationship to better protect our own practices while successfully defending the claim.

1. Engagement Of Defense Counsel

   The call comes in--usually from the insurer--"can you take a new assignment?" Does anyone ever say "no" to that question? Probably not, but the issue bears repeating that one of the sound principles of risk management is a recognition that the law firm has the time and resources to devote to the new matter. Usually this is not an issue in a professional liability defense firm. However, if the case involves an unusual response or the client or insurer is insisting upon the direct of involvement of a particular attorney, no good can come of saying "yes" when you know the firm does not have the necessary resources to devote to the needs of the representation.

   1. Documenting the Intake

      The only way that a firm can control the intake of cases is if every attorney is required to record the important information on each engagement in a uniform manner--no exceptions. For any risk management program to work, all potential retentions with new or existing firm clients must be entered on standardized intake sheets and entered by third parties in the firm's system. The intake sheet should contain, at a minimum, the following information:

      * the name, address and contact number of the client and any entities related to the client;

      * the date of the intake;

      * the nature of the representation;

      * if the client is a new client without established terms of compensation, the terms and conditions of the engagement;

      * if the client is a new client, the identity of the person authorizing the engagement;

      * the name, address and contact numbers of all parties and all of the attorneys involved in the representation; and

      * the terms/names which should be included in a conflict search.

      Two issues bear emphasizing here: the terms or names that should be run for a conflict search optimally should not be selected by a clerical person. If that is the practice in your firm, make certain that all attorneys understand that part of the conflicts analysis requires the attorney to verify that the non-professional staff included all appropriate names in the search.

      Second, most of us "get it" when it comes to recognizing the consequences of ensuring that the conflicts analysis process be as thorough as possible. If your firm practices beyond the area of representing attorneys, the absolute necessity of including the identity of all attorneys in the conflict system both at the time of intake and as the representations proceed is sometimes lost. As will be discussed further below, the need to include the attorneys representing the parties in all matters in which the firm is involved is essential to any meaningful conflicts analysis.

   2. Conflicts

      Conflicts are the bane of every law firm's existence. We work hard to attract business and the thought of turning it away because of the existence of a conflict is just plain depressing. The everyday procedure of analyzing conflicts is beyond the direct focus of this presentation. However, there are two considerations which are directly relevant to the representation of attorneys.

      1. Representing Plaintiff's Counsel

         The more experienced a professional liability firm is, the more likely you will be asked to represent an attorney who is currently representing, or has formerly represented, an adversary of the firm. Most jurisdictions recognize the concurrent representation as a conflict--not necessarily because it involves representing clients whose interests conflict but because the attorney-client relationship may result adversely impact upon the exercise of independent professional judgment because of personal or business interests. (1) Whether or not this constitutes a waivable conflict depends upon your jurisdiction. (2) In the event your jurisdiction maintains a per se ban on representing an adversary attorney, then, of course, the ethical prohibition must be observed.

         Even if your jurisdiction permits waiver of the conflict, common sense considerations must prevail since conflict analysis rarely involves a bright line rule. (3) If to properly represent your current client, you must cross-examine or otherwise attack the credibility of your client-to-be, the appearance of impropriety prevails and discretion must be exercised to accept the conflict and reject the representation. (4)

         Having said that, it is still very possible to obtain an informed waiver of the conflict that exists in representing your adversary. Very often attorney-clients would prefer to work with and against counsel they know and respect. Furthermore, since the discussion of the pros and cons of waiving the conflict are being conducted between two professionals, presumably of equal experience and competence, review of the waiver from the vantage point of hindsight lacks the undesirable characteristic of many waivers where one side is unequal in power to the other. (5) Even in the situation where the attorney and attorney-client reach an informed agreement to waive the conflict, in order to avoid future problems, the attorney-client must also document an informed conflict waiver with his or her client. Where the attorney-client balks at addressing the issue with his or her client, the representation should be rejected.

         In the situation where you have formerly represented an attorney-adversary and the representation has concluded, unless the current representation involves the same or substantially related subject matter, almost all jurisdictions do not consider this to be a conflict. However, even if your jurisdiction does not consider this to be a conflict, the better practice is to disclose the former representation to the current client and permit the client to decide if he or she is comfortable with the former relationship.

      2. Examining Conflicts in Representation of the Firm and Individual Attorneys/Former Employees

         As in any representation, care must be taken to evaluate whether a conflict exists between the representation of two clients, here law firm and any present or former attorneys that are individually sued. If the interests of the law firm and individually named attorney-defendant conflict, for instance where there may be a policy exclusion applicable to the conduct of a bad actor defendant, the defense of the two parties cannot be undertaken by the same law firm.

         There are many instances, however, where the "conflict" between the firm and an individually named attorney falls under the category of "bad blood" as opposed to any direct conflict of interests. In most situations, the defense of the case would be assisted by a unified defense rather than a public airing of the grievances between the defendant-attorney--unrelated to the subject matter of the litigation. Defense counsel should address with both sides the value to a unified defense. However, if the parties refuse to consent to representation by one attorney, the issue must be put to the insurer to decide whether a conflict exists so as to necessitate the assignment of separate counsel. Erring on the side of caution in these situations is an effective risk management tool. A client who vehemently resents representation by the same attorney as his or her former employer will be looking for every excuse to criticize the handling of the matter by both the lawyer and the insurer. In the event both defendant-attorneys agree to representation by one firm, take particular care to make certain that all communications are addressed to both parties and that all clients are kept in the loop on substantive discussions.

   3. First Contact with the Client

      First impressions count. Upon receipt of an assignment contact with the client should be made as soon as possible. However, before making the call, take a few minutes to review what is known about the claim against the client.

      1. Investigate the Underlying Case Before the First Call

         While the allegations of the complaint may be the extent of the information provided to you by the carrier, a wealth of information regarding the client law firm, individual attorney, and underlying claim is readily available on the internet. Check the client's website. Do a computerized legal research search to obtain copies of reported cases involved in the underlying matter. Copies of the court docket (and most pleadings) in the underlying case are available on PACER for all federal jurisdictions (Google "U.S. Case Party" to search all jurisdictions). Many state civil and criminal court dockets are currently online. Just a few minutes' review can provide you with the flavor of the underlying case and give you some perspective with respect to the story you are about to hear from the client.

      2. Listen

         Don't, however, be so quick to regurgitate what you've learned back to the client in your first conversation. After introducing yourself, listen to the client tell the story and ask questions when the narrative loses its path. In the initial...