The Dangers of Broad Scope Retainer Agreements

A group of lawyers in Florida were sued by their client for a mistake made by the client’s previous legal representation. The case raised many questions about attorney responsibility when inheriting clients from other lawyers.

Man with bullseye face

Sara Collin

July 12, 2022 03:00 PM

Last week, the Florida Court of Appeals released a legal malpractice decision that made headlines after a client successfully sued her attorneys for missing a deadline. What made the case more interesting, however, is that the attorneys she sued had not been the ones to miss the deadline.

In Baum v. Becker & Poliakoff, P.A., the client had retained lawyers to represent her in a probate litigation case involving a $100 million estate. Her attorneys missed a vital service deadline. Soon after, the client retained different attorneys to represent her. However, because of the missed deadline, the client’s case was dismissed.

The client subsequently filed suit against the second set of attorneys for malpractice. On summary judgment, the trial judge ruled in favor of the attorneys. However, on appeal, the Court reversed the decision, ruling that the second attorneys had proximately caused damage by failing to cure the first attorneys’ mistake, noting that they had been “retained, at least in part, to take reasonable steps to avoid the adverse consequences of [the client]'s predecessor counsel's failure to effect service of process."

“It appears Florida's Court of Appeal is comfortable blaming a lawyer for a deadline missed before the lawyer was even retained,” commented Jeffrey Cunningham, a partner at Goldberg Segalla in White Plains, NY, who defends lawyers and acts as outside General Counsel to law firms. “The scope of this decision could have a very broad, chilling effect on attorneys taking on cases from prior counsel if they can be sued for prior counsel's mistakes.”

In Cunningham’s opinion, the case also speaks to a broader issue, stating, “Potentially, risk could be avoided or mitigated through a provision in the retainer agreement disclaiming responsibility for prior counsel's work or at least explaining the risks associated with transferring a case during the course of a litigation. Such a provision could have also alerted the attorneys to the potential and made them reevaluate the case or notice prior counsel's mistake sooner.”

Additionally, as Baum forewarns, Cunningham stated that counsel should be extra vigilant when taking on a client who had previous representation: “Even in the best of circumstances, inheriting a case from another attorney includes a lot of risk—getting up to speed quickly, understanding prior counsel's strategy and navigating whatever obstacles prompted the client to switch counsel all invite problems. Since you usually don't know what prior counsel did until you get into the file, I always recommend limiting the representation as much as you can at the outset—you can always adjust the scope later as needed. While you can't contract away your duties of competent representation in a retainer agreement, you can limit the risk of inherited incompetence."

Thus, according to Cunningham, retainers should be updated periodically to truly capture the scope of the representation to protect both the lawyer and the client. “Most attorneys do not effectively utilize this risk management tool,” he explained.

Cunningham believes that lawyers should be systematically reviewing and updating their retainer agreements—he recommends doing so when you change your smoke detector batteries—as well as custom-tailoring them to each client for each matter and limiting their scope. “Without a solid retainer agreement defining the identity of the client, the scope of services, the fee arraignment, etc. lawyers expose themselves to incredible risk by essentially the only person that can sue them for malpractice, the client.”

Finally, according to Cunningham, attorneys should consider asking for expert advice on the matter. “Retain your own outside counsel to review your retainer agreements. This is not a DIY job and outside counsel brings your firm clear attorney-client privilege protection.”

Headline Image: iStock/ Pict Rider

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