Wisconsin Lawyer: Managing Risk: Limiting Representation May Attract Clients, but Beware Gray Areas:

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  • Wisconsin Lawyer
    October
    01
    2013

    Managing Risk: Limiting Representation May Attract Clients, but Beware Gray Areas

    Diane S. Diel & Thomas J. Watson

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    Unbundling legal services and providing only the assistance clients want and can pay for is acceptable, as long as lawyer and client clearly understand and abide by the representation’s scope.

    streetlightFrom law firm downsizing to law school graduates’ difficulty finding work, it is apparent that the economy’s struggles have hit home for many lawyers. There is an additional sign that the practice of law is changing as a result of economic pressures: the seemingly increasing demand from clients for a limited-scope representation, or as it is known in some legal circles, unbundled legal services.

    We break down limited-scope representation into three main categories: 1) consultation – including giving advice and reviewing documents; 2) document preparation, sometimes done by ghostwriting; and 3) limited representation in court.

    Coauthor Diane Diel, a Milwaukee attorney and past State Bar president, has been providing some form of limited-scope representation to clients for years. We presented our perspectives on this issue in 2013 in a State Bar webinar entitled, “Practicing Law in the New Economy: Providing Limited-Scope Representation When Clients Don’t Think They Need More.”

    In our webinar, I looked at this issue from the malpractice perspective, including the potential risks and benefits, while Diel offered ways to provide this kind of representation to clients and how to make it work for both lawyers and clients.

    From a malpractice perspective, what causes claims? Here are four of the most common causes:

    • Clients with unrealistic expectations;
    • Clients who want to find someone to blame;
    • Inadequate communication between the lawyer and client; and
    • Poor client relations.

    Can limiting the scope of representation lessen these risks? Yes, in the following ways:

    • A client’s expectations are made more precise when they are narrowly defined in limited-scope-representation agreements.
    • Careful definition of the scope of representation may limit clients’ impulse to blame you for everything they don’t like about their cases.
    • Appropriate levels of communication usually are more carefully defined by limits of representation.
    • Relationships between you and your client are short term and well defined.
    • In some limited-scope representations, the system may be more tailored to bring the right talents to the client. If an attorney is especially skilled at drafting qualified domestic relations orders in a divorce matter, for example, a client may be best served by hiring that attorney solely for that purpose, taking advantage of that particular skill set.

    Why Provide Limited Representation

    Many Wisconsin lawyers have told me they are seeing more clients interested in hiring them for only a part of their case. Diel says, “I get asked this question more and more frequently. More of my clients want to spend more time talking about how to secure legal services at a predictable, or low cost. In other cases, it is clear that the other party is receiving legal advice, but I do not know who is advising that person.”

    Diane S. Dielcom ddiel diellaw Diane S. Diel, U.W. 1976, is a sole practitioner in Milwaukee, focusing in family law.

    Thomas J. Watsoncom Tom.Watson wilmic Thomas J. Watson, Marquette 2002, is senior vice president and director of communications at Wisconsin Lawyers Mutual Insurance Co., Madison.

    Limited-scope representation is one way to close the justice gap as more people are unable or unwilling to pay for legal services. Offering unbundled legal services can benefit lawyers and clients. Some lawyers believe that if handled properly, limited-scope representation can increase access to the court system, promote effective resolution of matters, and aid the court system in doing its work.

    From a business perspective, limited-scope representation may help lawyers get business they may not otherwise get. It can also be less time consuming and, if done properly, have a much higher collection rate than a full-scope representation. Lawyers’ willingness to engage in limited-scope representation emphasizes their service orientation. It is seen by many lawyers as a means to assist with the challenges presented by the combination of an ever-increasing number of people representing themselves in court and the need to improve access to legal services and the courts, by helping to reduce the number of parties operating without any legal assistance at all.

    Limited-scope representation can also help minimize the image of lawyers as professionals engaged in the practice to make money rather than to help people with their problems.

    For some lawyers, especially solo practitioners and small firms, limited-scope representation is a way to bring in the door business that they might otherwise not get. Diel says this is particularly so in family law cases, her area of focus. “Sometimes clients may not be able to afford an attorney for all aspects of a case, but benefit greatly by help on parts of the case. Clients engage me often just to review a final agreement or assist in placement disputes. Many of my clients who don’t have much money to spend on a lawyer are definitely interested in this type of representation. And I can provide the type of limited service that they can afford while helping them through their case.”

    Most states have adopted the ABA Model Rule (or a variation) that allows lawyers to take only part of a case. Many lawyers (and judges) have said in recent years that offering limited representation to parties whose only other option would be to go it alone is a valuable service.

    So are there any disadvantages to limited-scope representation? There are potential pitfalls, and lawyers should know and pay attention to them.

    Proper Safeguards

    According to State Bar of Wisconsin Ethics Counsel Tim Pierce, Wisconsin is one of the 41 states to have adopted at least part of the ABA Model Rule, and limited-scope representation is permitted by Wisconsin’s Rules of Professional Conduct. SCR 20:1.2(c) reads as follows:

    “A lawyer may limit the scope of the representation if the limitation is reasonable under the circumstances and the client gives informed consent.”

    What does that mean? Pierce says it is the lawyer’s burden to determine whether the limitation is reasonable. “Assisting a party with forms or providing a brief consultation may suffice for a simple uncontested divorce, but may be unreasonable for a matter involving complicated marital property and tax issues.”

    As for informed consent, Pierce says while it is always a good idea to get the client’s written informed consent to the limited-scope representation in writing, the rule does not require that it be in writing. “I strongly urge lawyers to do so and I think that it’s foolish not to.”

    The supreme court rules define informed consent as an “agreement by a person to a proposed course of conduct after the lawyer has communicated adequate information and explanation about the material risks and reasonably available alternatives to the proposed course of conduct.” A good written fee agreement is crucial. It should define what the attorney will and will not do and disclose the pros and cons of the limited-scope representation.

    Another danger to taking limited-scope cases is failing to review the entire case, as you would if you were providing full representation in the matter. One of the biggest pitfalls is providing advice with limited information. Providing only limited representation is not an opportunity to pay less attention. Competence, diligence, and communication (all required by supreme court rules governing lawyer conduct) remain important considerations. Also, the scope of the representation must be reasonable under the circumstances. A lawyer must fully evaluate whether the requested limited representation can be done reasonably without creating problems for the client, the court, and the lawyer’s reputation. As Pierce points out, there is no clear rule on what is reasonable, and each situation is unique.

    Sally Anderson, vice president – claims at Wisconsin Lawyers Mutual Insurance Co., could not agree more. She says some lawyers have been engaged in providing unbundled legal services for years, but many lawyers don’t realize that is what they are doing.

    Anderson says she has seen malpractice claims when a lawyer has not thought through the limited-scope representation, and the client is not prepared for what happens if something goes wrong. For example, a lawyer may agree to help prepare some of the documents for a closing. Something then goes wrong at the closing (which the lawyer does not attend). “So who do you suppose the client is going to blame?” she asks. “The client figures they hired a lawyer, so the problem has to be the lawyer’s fault. Now you have a malpractice claim on your hands because the lawyer did not clearly define the goals and tasks included in the representation.”

    Such a malpractice claim might have merit. A lawyer may have a duty to advise a client of relevant information, even if it falls outside the scope of a limited representation, and to advise the client to seek independent advice if appropriate. While you should inform your client of the limits of your representation, and you need not provide services beyond the agreed-on scope, you should alert your client to other relevant issues. Even if the lawyer believes the cost of the representation will be less than $1,000, a written agreement defining the scope of representation is a good idea in these matters.

    When Limited Scope Becomes Full Scope

    Another danger to accepting a limited-scope case is the ease with which the scope of the representation can expand. If you see that happening, you need a new written agreement. Do not exceed the scope of the representation defined in the written agreement without drafting a new written agreement. Too many lawyers fall into this trap and end up working on parts of a case to which they did not originally agree. Diel says sometimes clients start with a limited-scope representation and then request a full representation as the matter proceeds.

    Lawyers and parties previously viewed representation as “all or nothing.” Now that limited representation is more common, parties are seeking it out as a way of getting the help they need without committing to something more expensive and more work than the client thinks he or she needs.

    Sometimes clients have difficulty understanding where one issue ends and another begins. Diel says it is easy to get pulled into related issues on which the attorney was not retained. “It is important to remind the client that you are not retained for that issue or that part of the case. Sometimes, because we want to help our clients, we may do more than we originally signed up for. That can be risky.”

    Going to Court

    What about representing a client in court, even if you have been hired for only one issue, or one hearing? Will the judge allow this?

    Diel says limited appearances in court can work, and judges do understand if the attorney states that he or she is handling only a part of the case. Most judges, she believes, prefer that the client have some representation rather than none. But some judges might not be so accommodating. Pierce says lawyers who appear on behalf of a client for limited purposes should inform the court of the scope of the representation. “Nonetheless,” he says, “should a court refuse to permit a lawyer to withdraw upon completion of the limited services, SCR 20:1.16(c) requires the lawyer to continue the representation to the extent ordered by the court.”

    Ghostwriting

    Ghostwriting refers to the practice of a lawyer drafting pleadings, briefs, or other documents filed with a court by a pro se party when the lawyer’s role in drafting the documents is not disclosed. There is disagreement among lawyers as to whether this practice is a good idea, let alone ethical. Even courts and ethics committees can’t seem to agree. Pierce says Wisconsin has yet to address the issue in either case law or ethics opinions.

    So how should a lawyer handle a request for assistance in drafting documents? Pierce says the ABA Model Rules do not require lawyers to reveal assistance, so he says it is unlikely a Wisconsin lawyer would face discipline for ghostwriting. However, he adds, “Given that the large weight of case law holds that a lawyer should disclose substantial assistance in the preparation of pleadings, I still think a lawyer would be wise to obtain the client’s consent to such a disclosure.”

    Limited-scope Representation – Will There Be Clarity in Wisconsin?

    The Wisconsin Supreme Court’s Policy and Planning Committee (PPAC) considered a comprehensive proposal of its limited-scope representation subcommittee last November. The report from the subcommittee has not been submitted to the supreme court by petition, and the PPAC recommendations are not, at this time, effective in Wisconsin.

    Diel explains:

    “The recommendations of the report address many of the important issues and may ease concerns about limited scope representation. For example, the proposed rule at this time calls for the client/lawyer to disclose that the documents have been ‘written with the assistance of a lawyer.’

    “The PPAC committee will further propose amendments to SCR 20:1.2(cm) and SCR 20:3.1(am) to allow a lawyer who provides drafting assistance to rely on the client’s representation of facts unless the lawyer has reason to believe the representations are false, or materially insufficient. In such cases, the lawyer is required to make an independent inquiry into the facts.

    “The PPAC report creates a simple rule for resolution of ‘who’ to serve with pleadings when a client’s lawyer has filed a limited scope notice of representation, recommending that all documents in a case be served on a lawyer who has provided a notice of limited scope representation during the time of the limited scope representation, and ending with the filing of the notice of termination of limited scope representation.

    “The final concern with limited scope representation is whether the lawyer will be allowed to withdraw after the completion of the engagement. Wisconsin’s rules currently do not provide for ‘automatic’ termination of the lawyer, and it remains possible that a court could refuse to permit the lawyer to withdraw upon completion of the limited services.

    “The PPAC recommendation is to require that a lawyer providing limited-scope representation in court file a notice of representation specifically and clearly defining the scope of the representation, and a notice of termination of representation when those issues are concluded. The subcommittee does not, however, propose to amend 20:1.16(c) to allow automatic withdrawal of a lawyer upon the conclusion of the limited representation, but suggests that continuing legal education and judicial education sessions be conducted to inform lawyers and judges of the rule changes. Thus, the lawyer would still be exposed to some risk of being required to continue representation at the end of the limited representation.

    “Note that these proposed rules have not been submitted to the court, much less approved by the Supreme Court. However, the direction of the PPAC committee is noteworthy and should be considered when engaging in limited-scope representation.”

    Diel’s conclusion: “It is clear that limited-scope representation is here to stay. Learning how to practice effectively in this fashion will help lawyers provide value and service to their clients.”

    Conclusion, Best Practices

    The demand for limited-scope representation, which holds great benefits for both lawyers and clients, appears to be growing. Not only does it provide assistance to clients at a reasonable price but it can also help move cases through the system. But lawyers must be cautious, diligent, and thorough.