The Jamaican Bar Association Annual Weekend Conference The Half Moon Hotel & Villas, Rose Hall Resort & Spa, Montego Bay, St. James 16-19 November 2017
THE PROFESSION, BUSINESS & ETHICS OF LAWHOW TO CHOOSE AND WORK WITH LAWYERS AND CLIENTS 1
Presented by Lowel G. Morgan Managing Partner | Nunes, Scholefield, DeLeon & Co-Partners In recent years especially with the increasing number of Attorneys that graduate each year, the temptation exists for law practices to focus more on the profit margin than on the professionalism of law. While profit and profitability are important this should not be the focus of the practice. It is important to maintain identity and ethical considerations rather than give in to the impetus to maintain clients and profit motive. 2 The focus of the law practice should be to ensure that the highest standards of professionalism are being maintained and making certain that standards of ethics, integrity and honesty form the core values and bedrock foundation of the practice. This together with: a. competent work/representation of the highest quality (i.e. legal knowledge, b. skill,
1 2
Authored by: Lowel G. Morgan and Michelle T. Phillips Yale Law Journal
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c. thoroughness
and
preparation
reasonably
necessary
for
the
representation) 3, d. good client relationships and service will ultimately lead to repeat customers, referrals, new customers and to the practice generating a profit because of its excellent reputation and high professional standards. Canon I (b) of the Legal Profession (Canons of Professional Ethics) Rules states: “An Attorney shall at all times maintain the honor and dignity of the profession and shall abstain from behavior which may tend to discredit the profession of which he is a member.”
This Canon should be remembered at
all times. Given the broad scope of the topic we have chosen to concentrate on five (5) essential subtopics as follows: 1. The Client- how to engage clients and treat with the difficult ones; 2. Communication with your client; 3. The Invoice- how to deal with the matter of fees; 4. Admitting our mistakes- how to own up to missteps; 5. Business Management- dealing with the business, not just the law of your practice.
Survival Skills for Practicing Lawyers- Best Articles from Law Practice Management Magazine. “Organizing your practice for Quality” by Arthur Smith p. 18
3
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1. THE CLIENT- An Attorney’s worst nightmare The client has been stated to be the Attorney’s worst nightmare. (I am sure you have all heard this statement). As a young Attorney I used to wonder why, but after a few years in practice I think it becomes clear. It is not per se that a client is your worst enemy, it just means that he/she can make things very difficult especially if things do not go their way.
Some
indicators of a difficult client include a person: a. coming to you at the last minute for an important matter; b. complaining about previous dealings with legal service providers; c. attempting to negotiate services and fees; d. thinking that he/she know the law; e. having unrealistic expectations; f. expecting their matter to take priority; g. making excessive demands of staff; or h. indicating malice towards other parties. 4 Difficult clients also can be those who: a. track changes your retainer agreement to inter alia add an arbitration clause;
When a Single Client feels like one too many: Strategies for Dealing with Difficult Clients by Mr. Justice R. Libman, John Allen & Bernard Aron.
4
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b. want your mobile number so they can call you whenever they want at all hours of the day or night; c. won’t pay your invoice if the matter doesn’t end the way they wanted; d. are rude; e. don’t want to pay your fees and/or take forever to pay. This is why it is important to ensure you are always protected- Cover Your Assets (CYA). The Law Society of Upper Canada provides some strategies for handling problems at the outset of the client-provider relationship such as discussing expectations and objectives, including: a. what the client can expect from you, b. how much that will cost and c. how long it may take. 5 The retainer agreement / retainer/ letter of engagement/ Fee Engagement should be given to the client early on, probably after the first initial meeting. It is imperative that your client understands the retainer, that they sign the retainer and that copy is given to them. In most cases, it is best to orally review the terms of the engagement letter and fee agreement with the client.
5
Be sure it is clearly communicated in writing and that the client
Ibid
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understands that you are not engaged until you receive the signed engagement letter. 6 Having a detailed retainer that outlines: a. the nature and scope of your instructions; b. the work that will be performed in the matter; c. the hourly rates of the Attorney(s) who may be working on the matter; d. the fee agreement; e. what is expected of the client in the process (for example providing the Attorney with requested information and documents in a timely manner); and f. how the retainer may be terminated is essential. In order to deal with difficult clients it is important to understand your role in the Attorney/client dynamic. 7 The Attorney’s role is to analyze the client’s problem and offer a solution(s) or method(s) of achieving the goal the client has presented. 8
In addition to presenting the client with all possible
solutions and/or methods of achieving their goals in relation to their problem, you should advise on the consequences of the different courses of action. 9
Once you have advised your client as to their options and the
Through the client’s Eyes- New Approaches to Get Clients to Hire You Again and Again by Henry Ewalt p.42. Dealing with Difficult clients by Carole Curtis 8 Ibid 9 Ibid 6 7
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possible consequences of pursuing each option, the decision as to which option to pursue is that of your client. 10 Be transparent with your client and advise them. Deal with any problems that arise promptly. 11 In addition to offering the clients solutions to their legal problems, it is imperative that you manage the client’s expectations about the services you can and will provide or the outcomes and likely success of the outcomes that you can achieve. 12 It is also essential to include the possible consequences of taking various recommended courses of action, and this should be communicated in writing. 13 Similarly, any advice given to the client should be communicated in writing so that both you and the client have a record of the advice given. People tend to have a funny way of remembering things when they don’t quite go their way, therefore if the client does not follow your advice, it is imperative that you have a record of the advice that was given. Be very clear and explicit about all information and advice given to the client. 14 Also ensure that the client knows and understands who he/she is to deal with in relation to which issues, for example which staff, including paralegals and secretaries, are dealing with his/her matter. 15
Ibid. 5 tips for dealing with difficult clients 12 Dealing with Difficult clients by Carole Curtis 13 Ibid 14 Ibid 15 Ibid 10 11
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Establish timetables. Tell the client what you are going to do and when you are going to do it and stick to your promises and timelines. Developing a timetable with the client is important, for at least the initial actions to be taken in the matter (including matters to be done by the client- information to be obtained and sent etc.).
The timetable will enable the client to see
what his responsibilities are as well as what responsibilities are the lawyer’s. It will also provide the client with an early understanding that if the client does not provide information in a timely fashion the lawyer cannot or ought not to be blamed for failure to meet the subsequent deadline. 16 If the lawyer discovers that a timetable agreed upon at the initial meeting or subsequently evolved will not be met, this requires an immediate communication to the client. 17 It is always better to under-promise and over-deliver than overpromise and under-deliver. 18 Clients with high service expectations should be billed frequently and regularly so that they can understand fully the costs associated with their expectations. 19 With all clients it is important to document all communication, this is especially so with a difficult client- record all telephone calls, voicemail messages etc. in writing. 20 Some important things to record/document are:
Through the Client’s Eyes- New Approaches to get Clients to Hire You Again and Again by Henry Ewalt p. 41 Ibid p. 49 18 5 tips for dealing with difficult clients by Paul Caddy 19 Dealing with Difficult clients by Carole Curtis 20 Ibid 16 17
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a. who
the
contact
was
with,
whether
it
was
with
the
client
himself/herself, their assistant etc., b. the date of the contact, c. the nature of the contact – (telephone call, meeting etc.), d. details of the contact, e. any instructions given by the client and/or advice or recommendations given by you. 21 It is also important to advise your staff on documenting contact and communications with the client. Instructions and advice should always be in writing, 22 so if advice is given orally first ensure it is thereafter put in writing. For example, if the Attorney receives any instructions from the client via telephone, an email should be sent to the client to confirm the said instructions before acting on same. In this day and age it is almost inevitable that at least some of your clients will communicate with you via text messages or WhatsApp messages/ messenger. It is imperative to keep a record of these messages, especially any instructions sent via this medium. One method of keeping a record of these messages is to email yourself the conversation, print and keep in the client’s file.
Ibid When a Single Client feels like one too many: Strategies for Dealing with Difficult Clients by Mr. Justice R. Libman, John Allen & Bernard Aron.
21 22
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Although it is inevitable that you will encounter difficult clients do not let any client be abusive to your staff. 23 A few years ago we had an elderly client who came who came to us with a litigious problem.
He was rude to the
Attorney dealing with the matter and on one occasion he yelled expletives at one of the secretaries at my firm. This incident was reported to the head of the Litigation Department who promptly advised the client that his behavior was unacceptable and that we would not tolerate this. His retainer with our firm was promptly terminated. Stay calm and be patient with your client. 24 Recognize that your client is probably under a lot of stress over his/her case. 25 Your client’s case is important to him/her and it is important to recognize the significance of the case to the client (regardless of how many similar cases you have had before), and empathize with the client, by doing this will likely put the client at ease. 26 This may also be the first time that your client is in a situation like the one he/she has brought to you and he/she may not know what to expect. Taking the time to educate the client on the procedure will make for a smoother and more beneficial process to both your client and yourself.
Ibid Ibid and 5 tips for dealing with difficult clients by Paul Caddy. 25 Thirteen tips for Improving Client Relationships (practice.findlaw.com) 26 Ten things to Consider about Potential Clients 23 24
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Sometimes however, you simply have to be able to identify and potentially avoid a difficult client. 27
If a client comes to you and states for example-
“my other Attorneys were all completely incompetent” or “I am suing my previous Attorneys” you may want to decline representing these clients. 28 It is important not to let your enthusiasm to engage the client cloud your judgment, try to remain alert and to maintain an emotionally detached perspective. The Clients – An Attorney’s best asset That being said your clients are your best asset, they are your livelihood, they are the ones who build our business; without them we would have no practice. Clients need both legal value and service value. The best and most effective way of creating client loyalty is by giving the client value for their money. 29 Service is just as important as legal value, especially since clients nowadays have a fairly healthy picking of Attorneys and law practices. 30 You provide value for money by your competence, that is being an expert in your practice area. The bottom line is that your clients are paying you for your legal knowledge.
Therefore the best way to create legal value is to
bring an expert understanding of the issues to your client’s matter. 31 Being
5 tips for dealing with difficult clients Ibid 29 Client Retention 30 Ibid 31 Ibid 27 28
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proactive in your representation of a client is a cost-saving measure which enhances your legal value and makes a client more likely to remain loyal. 32 When a new client approaches you or an old client brings in a new matter ask yourself the following questions: •
Whether your practice is properly equipped to handle the client’s matter with the skill and experience required and to competently resolve same?
•
Is the fee being charged appropriate for the work, or is the client better off financially being represented by someone else, who could reasonably be expected to competently resolve the issue at a lower cost?
•
Do you fully understand all of the client’s needs and can they be satisfied by you or the practice?
•
Are you prepared to do whatever is necessary to serve the client’s needs as they change during the course of representation, regardless of what unforeseen changes occur? 33
You should be able to answer all of the above questions with an unequivocal yes.
If not or any issue with same cannot be resolved then the matter
perhaps should be referred to another legal service provider. 34 This is an important ethical consideration for the satisfaction of your client in being Ibid Through the client’s Eyes- New Approaches to Get Clients to Hire You Again and Again by Henry Ewaltp. 11-12 34 Ibid p.12 32 33
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able to obtain quality legal representation as well as the maintenance of your reputation as an Attorney. Attorneys ought not to be so controlled by their
financial
needs
that
they
neglect
these
important
ethical
considerations.
2. Communication
Canon IV(r) of the Legal Profession (Canons of Professional Ethics) Rules states: “An Attorney shall deal with his client’s business with all due expedition and shall whenever reasonably so required by the client provide him with all information as to the progress of the client’s business with due expedition.” This is one of the number one things that clients complain about- that their Attorney does not keep them adequately informed of what is going on in the matter or does not communicate with them enough. The quickest way to lose a client is to neglect them. It is essential to communicate with clients and to do so in a reasonably prompt manner. Always keep your client in the loop. Communicate with your client often, honestly and in a timely manner.
Also ensure that you are accessible to
your client when needed. 35 Be consistently available to your client- the client Survival Skills for Practicing Lawyers- Best Articles from Law Practice Management. “As a client sees Delivery of Legal Services” by Peter Manson p.17 35
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may want you to answer questions, to reassure that what is being done makes sense, or just to serve as a sounding board- but that is what you are being paid for. 36 Better communication equals better legal representation, according to successful
advocates.
Strengthening
communication
retainers and face-to-face meetings with clients. 37
extends
beyond
The client needs
information, 38 therefore ensure that clients are fully informed about what you
are
doing.
Informing
your
client
on
a
regular
basis
avoids
misunderstandings about what is being done and what is to be done on a file, but also to help ensure informed guidance from the client when decisions are to be made. 39 Ensure you communicate with your client at all stages of the matter so that they are aware of how their case is progressing.
Give the client regular
status updates on what is happening with their case. 40
There are some
cases when you may be awaiting a response from the Court or the occurrence of a scheduled court date, but you realize that there has been
Ibid “Handling clients” by James Freund p.44 When a Single Client feels like one too many: Strategies for Dealing with Difficult Clients by Mr. Justice R. Libman, John Allen & Bernard Aron. 38 Thirteen tips for Improving Client Relationships (practice.findlaw.com) 39 Survival Skills for Practicing Lawyers- Best Articles from Law Practice Management “Organizing your Practice for Quality” by Arthur Smith p.22 40 Through the client’s Eyes- New Approaches to Get Clients to Hire You Again and Again by Henry Ewalt p. 47 36 37
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some time since the client has heard from you. In these circumstances it is wise to ‘touch base’ with your client to let them know that their matter has not been forgotten.
Simple steps like this reassure the client and help to
cement the Attorney-client relationship and the client’s trust and confidence in you and your practice. Prompt communication with a client is one of the effective ways of creating and maintaining client loyalty and building a strong relationship with the client through increased client contact and involvement. 41 Communicating with the client makes them feel like their matter is important to you. From the initial meeting you should learn what the client expects from you; how much time, effort, and money the client is willing to commit to the matter. 42 This will assist in determining what course of action and options are available. Have the client be part of the decision making process. 43 The lawyer should request that the client provide input with respect to the strategy and direction of the matter. A lawyer has an obligation to describe the impact of Ibid p. 48 Ibid p.40 43 Ibid p.35 41 42
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the law on the facts that have been communicated, investigated, or formally discovered. Where possible, alternative courses of action/ options need to be laid on the table by the lawyer for discussion with the client. Then the client needs to be a full partner in deciding what to do. At critical junctures in the case (example after mediation if the matter is unresolved etc.) the lawyer should review the goals set forth by the client in the initial meeting. 44 Goals may need to be revised, expanded or contracted based on how the case progresses or favorable or unfavorable rulings or changes in the law. 45 It is also important to communicate with your client in language that will be understood by a layperson, the client, 46 (know your audience). I am guilty of writing to a client as if I am writing to another Attorney.
It becomes
standard, like second nature to write in complex legal jargon. However, it is important to remember that your client will not likely understand all of what you are saying if you communicate with them in this way. Therefore try to keep the language in your communications simple and ensure that each point is explained and that the client has a clear understanding of the individual points and the overall import and consequences of the result. 47
Ibid p.42 Ibid p. 49 46 Ibid p.47 47 Ibid p.53 44 45
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Know your client and take into account the client’s idiosyncrasies and attempt to adapt yourself accordingly. 48 It is important to make an effort to satisfy each client on their own terms. 49 If your client is an organization know what is happening in that industry and that particular organization, any organizational changes, personnel changes, legal and regulatory changes and problems. 50 Know whether your client prefers to communicate orally or in writing, whether he/she prefers a timely response even if your conclusion is tentative or is he/she less interested in the speed of the response and more concerned with definitive answers etc. 51 It is important to reiterate here however, that even if there is oral communication, this must be followed up with written correspondence. It cannot be said often enough that you should have a record of everything in writing. Ask what goals the client wishes you as his lawyer, to accomplish.
What
does the client want out of this case? Make a list and read it back to the client.
Ask the client whether any other items should be included on the
list. 52 You may need to assist the client in clarifying what they expect/ their goals.
You should use the information you acquired from the client about
Survival Skills for Practicing Lawyers- Best Articles from Law Practice Management Magazine; “Handling Clients” by James Freund p.47 49 Ibid p.37 50 Survival Skills for Practicing Lawyers- Best Articles from Law Practice Management Magazine; “As a client sees Delivery” by Peter Manson p. 17 51 Survival Skills for Practicing Lawyers- Best Articles from Law Practice Management Magazine; “Handling Clients” by James Freund p.37 52 Through the client’s Eyes- New Approaches to Get Clients to Hire You Again and Again by Henry Ewalt p. 39 48
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what they expect and what is to be accomplished to assist in goal setting and lawyer expectations. 53 A nice touch to conclude the initial meeting with a client is to give him or her an empty file folder in which the client is instructed to keep all correspondence and other documents pertaining to this matter. 54
The file
should be a distinctive color with the name of your law practice, the address, and phone number on the outside. 55 On the inside flap may be printed a list of all the services provided by the law practice and its services.
This all
assists in building the client relationship. 56 With every client interaction try to do the following: a. Show a cost comparison to illustrate the value you have created by representing the client.
For example in litigation, compare demands
with the final settlement or judgment- cost at settlement vs. if matter had
gone to trial;
differences
between
with
corporate acquisitions -
the
initially
proposed
illustrate the
warranties
and
representations and what you were able to negotiate into the Agreement of Sale. 57 Comparison of goal to result- lawyers should
Ibid p.40 Ibid p.43 55 Ibid 56 Ibid p.44 57 Ibid p. 53 53 54
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compare
goals
set
by
the
client
at
the
achievements by the lawyer’s representation.
initial
meeting
and
It is important during
this discussion of goals and achievements to acknowledge the points at which the client directed a change in the goals or a change in the course of representation whether to reduce cost or for another reason. Illustrations of involvement are critical so that the client may share in the responsibility for the outcome whether it be good, bad or indifferent. 58 b. Minimizing loss/maximizing win- discuss whether there is anything else that may be done after the decision to minimize the impact of an adverse decision or maximize a victory. 59 c. Conduct an exit interview•
ask client what did they like about how the matter was handled;
•
where did we fall down and not meet expectations,
•
what was your reaction to individuals on our staff, to each of the lawyers and legal assistants;
•
how would they rate our overall efforts;
•
how could we have done a better job for them;
•
how could we have improved the experience for them? 60
Ibid p.54 Ibid p.55 60 Ibid 58 59
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The exit interview should be conducted with a sincere expression of gratitude for the client having chosen the lawyer and an expressed hope for continuing the relationship in the future. 61 The exit interview is extremely important, although it is a tool that is rarely utilized by most practitioners and law practices. It is an excellent marketing tool as it allows you to increase the probability of getting future work from the client as well as leaving the client predisposed to recommending you to others. In addition it allows you to see where you went wrong, where you fell short and how you can better improve your service for that client for the future as well as in other client interactions.
3. THE INVOICE- FOR PROFESSIONAL SERVICES RENDERED While the importance of communication with the client cannot be stressed enough, one of the most important things you will communicate to your client is your fees. Many of us find the discussion on fees a most difficult task. The English poet Samuel Butler stated: “In law nothing is certain but the expense.� 62
61 62
Ibid Ibid p.119
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A senior legal practitioner shared some words of wisdom with me in relation to communicating your fees to your clients as follows: “Clients should be provided with an estimate of your fees at the outset. Clients are usually very satisfied when given an estimate up front especially in matters that take several months or longer to complete such as a Probate matter. Giving the client an estimate gives them time to prepare, to get their house in order, put money together and organize their finances. Clients generally don’t know what to expect in terms of Attorney’s fees. Legal work is a professional service, but it differs from other professional services such as going to the doctor or dentist, who are visited frequently and who have set fees for their service.
Most clients don’t utilize the
services of Attorneys and if they do it is not a service that is used regularly. Educating the client on the fees lets them know what to expect and makes them feel empowered. For some types of matters it is easy to ascertain the fee that will be charged at the outset for example in Conveyancing or Probate matters the fee is usually a percentage of the value of the property or estate. In litigious matters, although it may not be possible to provide a precise figure due to the uncertainties that litigation presents, an estimate of the fees should be provided to the client and the process and the uncertainties should be explained.”
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A full explanation of all fees and charges must be given to the client in the initial interview/meeting. If possible give estimates and ranges of total fees, and go over charges and bill-payment practices and expectation costs. If the matter is too complex and estimates are not possible, give the client the approximate cost of the first several steps that must be taken to achieve the client’s stated goals. 63 The bill is important as it is the necessary step for the client to really understand the value of the service they are receiving/have received. 64 It often controls whether there is an understanding of what particular services were performed and represents a major investment in a service that is not often understood by clients. 65 Research has indicated that the top cause of billing disputes arise as a result of a failure to properly articulate the value of the service the client is receiving. For corporations and corporate counsel, the invoice shows whether a budget is met, whether the matter was properly managed etc. 66 Although the bill may represent different things to different clients ultimately it is critical because it determines if the client, whether an individual or a large corporation, has received value for the services performed and fee
Ibid p.41 Ibid p. 119 65 Ibid 66 Ibid 63 64
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paid. 67 The client’s conclusion as to how they received value for the service justifies the amount paid. 68
The most crucial combination of factors that
influences a client’s decision to engage the same lawyer/law practice in a subsequent matter is the client’s perception of value along with client relations. 69 The bill should permit the client to readily know what the Attorney has done in his/her matter by providing a detailed description of same, for example summarizing the charges for each task such as legal research and preparation of a legal opinion as well as the date that such services were rendered 70client meetings, meetings with other Attorneys in the practice to discuss the matter etc. This detailed explanation will allow the client not only to see what has been done on their matter, but will allow them to become more effective contributors to determining the strategy of their case as well as control the budget. 71 Depending on the amount of the bill and the amount of resources the client can devote to the particular matter, the invoice will assist the client in determining what steps to take next for example whether to appeal a
Ibid p. 120 Ibid 69 Ibid 70 Ibid p. 121 and 122s 71 Ibid 67 68
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procedural ruling or settle the matter because legal costs are becoming too high. 72 If a matter is likely to take a long period of time, such as litigious matters which may take several years, it is important to send the client periodic bills at important junctures in the matter, for example send a bill after the defence has been filed, case management and pretrial review orders made (trial bundles cost money to prepare) or mediation has been concluded. This allows the client to better monitor the budget, control the cost and manage the case. 73 If an invoice is presented at a critical juncture in a matter it is important that the Attorney outline all possible options to the client, the pros and cons of pursuing each option and the likely costs associated with each option in order that the client can make a fully informed decision on the way forward. In addition to providing a summary of the charges and outlining the various tasks performed it is important to detail who performed what in relation to the bill. 74 This enables the client to ensure that his matter is being properly managed/staffed and that he/she is getting value for their money, for example that a senior partner is not billing for things an associate could have done and vice versa that complex matters are being dealt with by a
Ibid p. 122 Ibid p. 130. 74 Ibid p.123 72 73
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partner or senior associate and not a junior. 75 It is also important that the work of junior associates, for example with only one or two years of experience, is reviewed by partner. In some cases, if it is financially viable, the partner may bill for the Associate’s time and add a fee for “Quality Assurance Review” at “No Charge”.
The goodwill generated by this no
charge entry often outweighs the unbilled value. Similarly when reviewing invoices, if possible, by putting short teleconferences or other tasks that took a minimal amount of time at “No Charge” can make a huge impact on the client and generate repeat business and goodwill for your practice. By detailing who performed what task will enable the client to evaluate the staffing and approach that your law practice takes to handling client matters 76 for example whether the matter is headed by a senior Attorney who monitors the matter, an associate who does the bulk of the work and paralegals
and
secretaries
who
do
communications, filing documents etc.
routine
functions
like
minor
The client can then determine
whether they like the particular staffing approach taken by your legal practice or whether he/she would like to change or tailor how their matter is being managed and how resources are allocated to same. It is important for you in your legal practice to assess each matter and determine how to allocate the matter to which staff in order to effectively
75 76
Ibid p.124. Ibid.
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manage costs for your client. Although a junior associate’s hourly rate may be far less than a partner’s it may take the partner less than half the time to complete the task and therefore be more cost effective for the client if the partner handles a certain portion or task in the matter. 77
The partner in
charge of the matter should determine what matters/functions should be performed by the Associate and which he/she should retain- this is a key to profitable delegation of work. Client-development initiative can be pursued by demonstrating to clients and prospective clients, both individual and corporate, how your invoice will assist them in managing their legal fees. 78 A detailed bill can be a valuable management tool for corporate clients and provide insight and reassurance to individual clients and enables them to feel more confident and to understand what it is they are paying for. 79
The invoice also provides a
valuable tool to your law practice as it enables lawyers to accurately evaluate the quality of their service, the appropriateness of their charges and the management and allocation of matters. 80 The invoice is additionally a marketing tool; by showing the client how you manage their matter and the service you are providing can encourage the client to use your services in the future as well as to recommend your services to others. The invoice
Ibid p. 126 Ibid p.130 79 Ibid p.131 and 132 80 Ibid p. 132. 77 78
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therefore provides a significant opportunity for you to grow your legal practice by enhancing client relationships.
4. ADMITTING
OUR
MISTAKES:
OWNING
UP
TO
LAWYER
MISSTEPS
We are humans so at some point we will make a mistake in handling a client’s matter. The important thing is how you handle your mistakes. The response to a mistake may be the difference in being able to have the matter rectified or becoming a claim. 81 Some factors such as fear that the client may take his/her business elsewhere or fear of the consequences as well as embarrassment may keep us from wanting to admit our mistakes to our clients. 82 However, it is best to disclose the mistake to your client early, the consequences of same 83 and if there is a way to fix it do so and advise the client of same. The common law fiduciary duty of an Attorney, whereby the client’s interest is paramount even above that of the Attorney, compels the Attorney as the ‘quintessential fiduciary’ to report their error(s) to their
How an Attorney should handle a mistake by Randolph J Evans, Shari Klevens and Alanna Clair. Admitting your Mistakes- Risks versus Rewards 83 My Bad: Creating a Culture of Owning up to Lawyer Missteps and resisting the Temptation to Bury Professional Error by Dolores Dorsainvil, Douglas Richmond and John Bonnie. 81 82
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clients. 84 If there are several options as to how to minimize the damage done it is important to communicate all options to your client as early as possible and tell them the pros and cons of each alternative.
In almost
every case the risk of non-disclosure will far outweigh the risk of telling the client, and telling the client is of course the more ethical path to follow. 85 However, not every single mistake will necessitate reporting to the client, for example a typo in a document filed at court or the mistake can be rectified or has no significant consequence for the client then there would be nothing to report and no conflict for the lawyer. 86 An overly broad interpretation of this ethical obligation (telling the client every single (even little mistakes) may undermine the trust and confidence that is essential to an Attorneyclient relationship. 87
However, any mistake that is material, significant or
serious or would result in prejudice to the client’s right or claim should be reported to the client, 88 for example a critical error such as missing a relevant court deadline to comply with court orders or file documents can have
grave
consequences
for
your
client
and
therefore
must
be
communicated to your client as early as possible and relief from sanctions sought.
Ibid How an Attorney should handle a mistake by Randolph J Evans, Shari Klevens and Alanna Clair 86 My Bad: Creating a Culture of Owning up to Lawyer Missteps and resisting the Temptation to Bury Professional Error by Dolores Dorsainvil, Douglas Richmond and John Bonnie 87 Ibid 88 Ibid. 84 85
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Telling a client about the incident is different from admitting that a mistake was made or that malpractice has occurred. 89 Depending on how big a mistake you have made you may need to involve a senior to assist you in sorting out the problem or advise the client to seek advice regarding the incident from another independent counsel 90, but this does not eliminate having to fess up to the client.
Admitting to your mistake early on shows
the client that you are taking responsibility for your actions and also helps to build trust with your client. 91 Some ways to try to avoid mistakes are: 1. Give yourself enough time to learn something new, 2. Ask for help if you don’t understand a particular issue or don’t know how to handle a particular matter. 92 Whether it is a senior in your law practice or a colleague at the Bar, it has been my experience that Attorneys are more than willing to help a colleague out; 3. Make a list of errors as they occur and put systems in place to address the most common as well as the most critical ones. 93 This will assist in avoiding similar errors in the future.
Ibid. Ibid. 91 Admitting your Mistakes- Risks versus Rewards by Chris Hargreaves. 92 To Err is Human- To Admit it, Divine by Shari Shapiro 93 Ibid 89 90
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4. Schedule enough time for someone else to review your work. 94
If
there is not enough time give yourself enough time to review your work and concentrate on avoiding substantive errors. 95 5. When training new lawyers, expect that they will make mistakes and that your only requirement is that they admit when they are made. 96 When mistakes occur 1. Communicate the error to your client, your senior (if necessary and/or applicable) or the court promply; 2. Apologize 97 3. Do damage control- Rectify the error or take steps to minimize any adverse effect or consequence for your client; 4. Share your mistakes with others and how to rectify them with others in your practice. 98
5. Business Management- The Downward Pressures of Fees While the focus of the practice of law should be on the professionalism of the law, it is also a business, and lawyers cannot afford to just be legal experts— they also need to be active business managers. Financial performance, of Ibid. Ibid. 96 Ibid 97 Ibid 98 Ibid 94 95
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course, is a key consideration for any business manager and particularly law practices looking to make and sustain profit margins. An effective strategy on financial performance must take into account the issue of pricing in the context of increased competition and its impact on the bottom line. The challenge that many law practices in Jamaica and the Caribbean are facing is how to effectively price legal services in a way that is profitable and sustainable while simultaneously satisfying the client’s appetite for lower, more competitive fees. Canon IV (f) of the Legal Profession (Canons of Professional Ethics) Rules provides: “The fees that an Attorney may charge shall be fair and reasonable and in determining the fairness and reasonableness of a fee any of the following factors may be taken into account:i.
The time and labour required, the novelty and difficulty of the question involved and the skill required to perform the legal service properly;
ii.
….
iii.
The fee customarily charged in the locality for similar services;
iv.
…
v.
The
time
limitations
imposed
circumstances; Page 30 of 38
by
the
client
or
by
the
vi.
The nature and length of the professional relationship with the client;
vii.
The
experience,
reputation
and
ability
of
the
Attorney
concerned; viii.
Whether the fee is fixed or contingent.
Pricing is essentially the process of determining what a practice will receive for its services. This process is complicated by the need to consider a host of factors such as the internal costs to the practice in delivering its legal services and nebulous concepts such as brand and reputation. It is suggested however, that the central focus for law practices in pricing their products should be to align client needs to the objectives of your legal practice through innovation and a willingness to embrace change. Innovation does not necessarily mean radical sweeping changes to the way we do business—it
can
simply
mean
making
incremental
adjustments
or
improvements to not only the types of products or services we offer but the way that they are delivered. The fact is that we all must strategize and innovate to some degree as prudent business managers to ensure continued success and even survival. Pricing innovation must begin with open and transparent dialogue between the Attorney and the client if law practices are to reduce the dependency on Page 31 of 38
the much maligned billable hour and venture into the potentially profitable frontiers of Alternative Fee Arrangements (AFAs). The fee agreement whether time and charge, contingency, fixed fee etc. is extremely important as it will assist to eliminate any confusion down the road. With the traditional model, law practices quoted their price or rate to clients who had to either take it or leave it without a consideration of the production of value to the clients. Law practices also sanctioned discounts or reduced billing rates typically to appease loyal, influential clients or obtain volume work. With increased competition and technology, clients are more aware and fickle than ever before. More frequently, clients are expressing disquiet about high rates and fees. The notion of the billable hour without any qualification and context appears arbitrary and suspect to the prospective client who will inevitably demand a lower price. Pricing conversations are necessary in order to counteract the downward pressure on fees and same should be had at the commencement of every matter. It gives your practice an opportunity to demonstrate value and transparency to the client. It allows for the client to have an input in the agreed fee arrangement which may allow for a high level of customization to fit the specific needs of the client. The one-size-fits-all approach is inflexible and unsustainable in the present global economy.
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Effective and innovative pricing strategy must begin with a recognition that clients are generally willing payers when value has been demonstrably communicated and achieved. Value is subjective and should be viewed from the perspective of the client and his specific needs. Alan Hodgart and John Cussons write: “To understand what “value” means to a client, a lawyer must understand what the client is buying. Rarely are clients buying a legal opinion; the reality is they are usually seeking a solution to a business problem. Clients seek value in both the calibre of the services they receive and in the substantive nature of the representation. In terms of service, research indicates that, among other things, clients value the following: •
A commercial understanding of their legal requirements;
•
An understanding of the client’s business;
•
The depth and breadth of expertise of experience;
•
The ability to innovate and add value;
•
The personal chemistry and close working relationships that can exist
between them and the practice’s Attorneys; •
Demonstrated commitment to the client’s success;
•
The responsiveness of the practice; and Page 33 of 38
•
availability of the Attorney assigned to the matter or a partner when
needed. In terms of the product delivered, clients relate the price they pay to the importance of the issue to them. From a practical standpoint, the price for legal work should be set based on the client’s point of view – that is, the fee is a cost that should relate to the received value – at a level that falls within the firm’s profitability parameters. There is no “silver bullet” when it comes to pricing.” The Attorney must thus take time out to understand what the client values. It is then up to the practice to structure its presentation on price to lock in the client based on his/her/its specific needs. A unique and mutually attractive value proposition must be identified with each client along with a range of options to choose from. Remember that clients do not care what it costs you to deliver legal services. They do not care about your overheads or partner compensation schemes. With clear and effective communication, prices do not have to be compromised in the face of steep competition in the market. The objective is to demonstrate value to the client and demystify and re-contextualize the factors that influence what clients perceive to be excessively high fees.
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Innovation in civil practice is likely to come from an increased resort to the use of AFAs in a diverse array of legal matters and the degree of customization employed to meet client needs. Law practices must embrace the fact that the traditional model of pricing is often times not aligned to client expectations in retail and other service industries. Clients frequently ponder: “If bankers, accountants, doctors, land surveyors can name a price why can’t lawyers?” AFA’s are meant to provide dynamic options which are fair to both the practice and the client. The simple fact is that clients want a pricing strategy that allows for risk sharing and predictability and these are the two critical factors which drive the push for AFAs. Clients reasonably want to know what a particular legal service will cost them in the long-run. They need to budget and organize their own financial affairs. If your law practice understands profitability at an operational level a well-managed AFA can be substantially more profitable than an hourly fee structure. Effective communication and a willingness to adapt and be flexible allows for value to be realized for the client while maintaining and sustaining profit margins. Through effective and innovative communication, law practices will also be better informed as to when to take hardline positions with clients looking for cheap prices without consideration of true value. Understanding the business model of your client and their true financial position can shield your practice from being pressured to discount prices or waive fees. Sometimes effective Page 35 of 38
pricing and communication must signal to the client that this is a top brand with an unrivalled history which will cost top dollar. It is all about flexibility and being attuned to the needs of the client and the practice as well. Consider also that effective communication can inform the underutilized innovative pricing strategy of “no charge” which may yield substantial profits in the long run. Sometimes big, fickle clients tacitly require you to audition for their work and prove your pedigree. The practice may wish to consider doing a particular legal project for free knowing that it can achieve the desired result and with the knowledge that there is a likelihood of substantial billable work to come in the near future. Effective communication involves understanding your client’s business model and long-term objectives in order to determine not only their needs, but the value of the relationship to the practice and the flexibility and latitude to be extended in formulating fee arrangements. When presenting options to the client on AFA’s the key term to remember is flexibility. While it is important to be flexible, it is important to be able to manage the work profitably.
A thorough understanding of profitability will
better enable you to be flexible in your fee structures/fee agreements. The goal is ultimately to be able to create a win-win situation for both parties by determining when, how and which AFA is best suited to your client’s particular needs. Page 36 of 38
The range of possibilities in pricing can only be revealed through effective communication.
The deal struck must benefit not only the client but the
practice as well and it must be suitable for the nature of the specific legal problem. The law practice in its quest to be innovative should embrace hybridity and customization in its pricing strategy. A ‘capped fees’ arrangement, for instance, may allow for a ‘success fee’ add-on which represents the value of the legal result to the client. If the client loses he is financially protected by the cap which he has negotiated and budgeted for and if the client wins the practice has an opportunity to realize greater profits. The client is rarely disappointed if he feels that he was integral in the pricing selection process. Attorney-client relationships blossom when lawyers feel that their hard work is respected through adequate pricing and compensation and clients feel that they have gotten real value for their money. Innovative pricing does not involve any grand strategy, but it involves a willingness to embrace change be flexible, take risks, and experiment. Sometimes, the traditional hourly-rate billing is the most appropriate pricing which the client is more than willing to accept. Other times, viable alternatives must be presented and agreed upon. More importantly, pricing is directly related to the concept of value which can no longer be viewed
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from the perspective of the practice. The client is king and the client’s perception is therefore the point of reference.
Authors: Lowel G. Morgan & Michelle T. Phillips
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