|Every so often, some hardworking lawyer will telephone to explain that a
former deadbeat client with a large overdue bill is going to bankrupt his or her practice,
and he or she is going to sue for fees. The image that comes to my mind is a scene of
Russian roulette. Yes, some lawyers are successful at this, but then there are the others
who just barely survive. Should you be considering this, think again.
By the way, did
you ever get around to sending a disengagement letter to this wayward client? Is that
client still a recipient of your newsletter or holiday greetings, encouraging the client
to believe you are willing to still be their champion? Clients, particularly when sued,
are notoriously unsure of when and if the attorney-client relationship has ended.
Termina-tion is clearly defined if there is a disengagement letter sent, the scope of
representation was clear in the retainer agreement, or you have withdrawn.
Remember, the rules do not explicitly delineate or limit the fundamental common law
fiduciary obligations, and there isn't a specific rule prohibiting a suit against an
existing client (Santa Clara County Counsel v. Woodside (1994) 7 Cal. 4th 525, 548).
Clearly, however, loyalty is the principle underlying Rule of Professional Conduct 3-310
(C), that an attorney cannot assume a position adverse or antagonistic to a client.
"Courts have found no barrier to suing a former client in the absence of a
substantial relationship between the matters." (Restatement of the Law of Lawyering,
§213, p. 727). However, if that substantial relationship exists, one court, in a quirky
decision, maintained that the duty of loyalty, even long dormant, can resurrect itself
(Damron v. Herzog (1995) 67 F. 3d 211). Loyalty is always a fertile source of controversy
in motions to disqualify counsel in the civil arena, because what could be more disloyal
than representing an adverse party in litigation?
Remember that suing a client is a surefire way to be countersued for malpractice,
breach of fiduciary duty or worse, even if your performance is impeccable. If the statute
of limitations has run, the client can seek that pound of flesh at the State Bar, where
the five-year period of limitations (Rule of Procedure 51) has so many holes it resembles
a piece of Swiss cheese. State Bar prosecutors technically could charge misconduct that
is, at this time, seven years stale.
Malpractice guru Ron Mallen uses a hypothetical situation with a client owing $15,000
and extrapolates the immense cost, including defense costs, lost time, payment of the
deductible and potential premium increase. Considering the overwhelming emotional distress
of litigation, it's just not worth it. Just imagine having your deposition taken and then
participating in a jury trial, in which you are the defendant. As lawyers, we should not
be playing with guns, unless of course, we want to shoot ourselves in the foot.
Diane Karpman specializes in lawyer law. She
can be reached at 310/887-3900 or firstname.lastname@example.org.