The Bottom Line
October 2002, VOL. 24, NO. 1
Statements or expressions of opinion or comments appearing herein are those of
the editors or contributors, and not necessarily those of the association or section.
(Notice to librarians: The following issues were published in Volume 23 of this newsletter during the fiscal year ending June 30, 2002: August, No. 1; January, No. 2; April, No. 3; June, No. 4.)
Contents
* Lawyers work hard for their reputation--But they don't deserve it!
By Donald E. Weihl
This article will discuss the reasons engagement letters are utilized, the benefits they provide, and examples of the content of portions of engagement letters that are commonly in use.
Why use engagement letters? Many types of practice do not lend themselves to engagement letters. In personal injury practice, the contingent fee contract is an alternative that is required by statute. In domestic relations' practice and criminal law practice, a legal employment agreement is often a substitute for an engagement letter. Nonetheless, for most common engagements, the engagement letter serves the purpose of defining who the client is, the scope of the engagement, and also informing the client of many basic terms and conditions that will apply to the attorney-client relationship that is created when the engagement is accepted.
Many engagement letters begin by indicating that conflicts have been checked and that no conflict exists that would prohibit the engagement of the named client. A specific naming of the client is important, and it is sometimes appropriate to indicate that the engagement does not include representation of other involved parties or the named client in any capacity but the capacity described.
Example: A long-term developer appears in your office and requests that you create an entity to develop a multi-building condominium complex. He has his construction manager with him and you take the information and become the entity attorney. This entity fails and you receive a letter from the construction manager's attorney accusing you of failing to create an employment contract providing a severance package for the construction manager. The evidence you have to show that the construction manager had a clear understanding that he was not your client is the engagement letter he received that states the named client as the developer and entity. This example also illustrates the importance of sending the engagement letter not only to the client represented, but also parties not represented but having an interest in the engagement. There are occasions where clients are represented in one capacity, but not in other capacities.
Example: Five securities brokers retain you to negotiate a new employment contract for them with their brokerage house employer. Each of the brokers is also the owner of a five percent (5%) interest in the brokerage house. In this instance, the engagement letter needs to define the engagement as the limited task of dealing with the employee relationship. The engagement letter needs to detail that it does not include protection for the different considerations each broker has in obtaining an employment contract, and also state that the engagement does not include representation of the combined group as owners of twenty-five percent (25%) of the employer. This example illustrates the fine line some attorneys need to observe in defining complex engagements.
After naming the client and defining the engagement, the letter needs to set out how the lawyer is to charge for the engagement. It can state a flat fee charge, an hourly rate specifically stated, a contingent fee, or whatever the basis of the charge will be.
Example: My applicable rate is $175 per hour, and it is anticipated that I will do a majority of the work on this engagement. To the extent possible, I will utilize paralegals and lawyers with lower rates to perform such services as can be delegated in order to cause your bill to be lower than it would be if I performed the entirety of the work necessary to complete your engagement.
It is also important to detail the billing frequency and what will be included in the bill.
Example: You will be receiving an itemized statement on a monthly basis so that you will be aware of the services being rendered on your behalf at all times. The disbursements you will be charged include long distance telephone calls, delivery charges, reproduction costs, fax charges, and similar expenses.
Many clients believe the attorney's file is their file, and that they have paid for it in the course of their representation. This is a belief that should be dispelled in the engagement letter. The ISBA has specific opinions on this subject that detail how clients may receive copies from their files; however, that is a subject for another day. See Illinois Ethics Opinion No. 94-13 and Illinois Ethics Opinion No. 95-2.
Example: The files of this firm, including lawyer work product, pertaining to the matter will be retained by the firm. All such documents retained by the firm will be transferred to the person responsible for administering our records and retention program. For various reasons including minimization of unnecessary storage expenses, we reserve the right to destroy or otherwise dispose of any such documents or materials retained by us within a reasonable time after the termination of the engagement.
There is less than universal agreement among lawyers about whether disengagement discussions should be included in every engagement letter sent. Some feel it is too harsh a beginning to an engagement while others believe it to be an indispensable part of every engagement letter. The author believes this needs attention on a case- by-case basis with careful language being used in any event.
Example: This office reserves the right to discontinue representation in the event any statement for services rendered becomes delinquent more than sixty (60) days. Under no circumstances will the representation be discontinued without notice that the engagement has become one where services will be suspended based on specific notification subsequent to any discussions relating to extended terms for the payment of any outstanding charges.
In addition to the foregoing engagement letter subjects, the subjects that are appropriate because of the nature of representation should be included in the engagement letter. It should be noted, however, that less rather than more should be the rule where prediction of results is concerned. There are so many additional factors that arise in the course of representations that the client should not feel after reading the engagement letter that he is assured of victory in any event.
Whether or not the engagement letter should request that the client sign the engagement letter as acknowledgment of his understanding of the contents of the letter, depends on the relationship of the lawyer with the client and the type of engagement covered by the letter. If the engagement will be extensive for a substantial amount of work, very often the signature and return of the copy of the engagement letter is important. For clients who are receiving a letter as a reminder of the billing practices of the firm and as the identification of the client and the specific subject matter of the engagement, it is unnecessary to request a signed copy of the engagement letter. In that event, the letter should be concluded with a simple positive statement that acknowledges the importance of the client and the existence of the engagement involved.
Example: I am pleased to have the opportunity to provide services on your behalf, and look forward to hearing from you at any stage of the process to accept your input and answer such questions as you believe are appropriate.
There is all too little guidance on the subject of engagement letters that is available for reference. This article is inclusive of the thinking and opinions of the author, and every practitioner should give careful thought to the benefits being sought and the contents of all portions of engagement letters used with clients as new work is undertaken.
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Donald E. Weihl practices in the St. Louis-Belleville firm of Greensfelder, Hemker & Gale, and is a past chair of the ISBA Law Office Management and Economics (Standing Committe on) Council. dew@greensfelder.com
Lawyers work hard for their reputation--But they don't deserve it!
By Thomas J. Brannan
"Shyster," "ambulance chaser," "mouthpiece," "one with silver-forked tongue"...the number of disparaging words about lawyers seems to run the gamut. And, I suggested in the title, we've worked hard for that reputation. Sound strange, coming from a fellow lawyer? But we have.
The code of ethics provides that we shall represent our clients diligently, honestly, and ethically. But the bottom line, much like a marriage, is we take our clients for better or for worse, and have a legal duty to represent them to the best of our ability. Notice, I did not suggest that our duty is to seek justice, but instead to represent our client as best we can, as the law allows. Theoretically, justice will prevail, but do we really believe that?
Query: how many clients have you had within the last month, or year for that matter, that came in and said that what they really sought was justice? Oh, a few, I am sure. However, behind that "veiled justice" was, by their definition, the fact that they sought the relief they thought they were entitled to, not necessarily what society as a whole or a judge would suggest was either fair or just. Not long ago, on one of those typical trying days, to vent a little frustration, I said to my partner, "You know, we are no more than mercenaries... paid fighters." My partner retorted, "No, we are ladies of the evening."
Is it any wonder that lawyers "enjoy" the reputation we have? Listen to polls, for what ever they are worth, and you find that lawyers rank right along with used car dealers. Not long ago, the then President of the Illinois State Bar Association suggested that we should endeavor to improve the image of the legal profession and as a part thereof, to denounce untoward humor or remarks directed at lawyers and the legal profession. Frankly, I commend the thought, but I doubt that we will be able to change that public perception, for the public views us for what we do. We are advocates for our clients, and frankly, some of our clients are not the nicest of people, some are as guilty as sin of the crimes for which they have been accused, even the business community we represent is not always lily white. How many times have we had business clients that wanted us to "find a way" to get them out of what would appeared to be a totally valid agreement? "Find an out, a flaw, a glitch, but get me out of it." And, we are good advocates, and sometimes innovative, and sometimes we are able to find that absurd little sentence, or lack thereof, that gets our client out of the agreement. Maybe I am a cynic, but it is hard for me to truly believe that is necessarily justice. And yet, I jokingly tell clients that my idea of justice is "I win." And too, I tell clients that I will represent vigorously, and try to obtain the results they desire, so long as it is honest, legal and ethical. But notice, I did not say "just"! Philosophically, we have been taught that if the system works, justice will prevail. But again, whom are we kidding? It would work in a perfect society, but society is not perfect, the public is not perfect, laws are not perfect, judges are not perfect (excuse me, your Honor, if, per chance, you read this) and we are not perfect.
And so, we represent clients that want something. Sure, sometimes we may indeed be on the side of the "just." But just remember, for each of these situations, by definition, the attorney on the other side is representing the "unjust."And from this mix, is it any wonder that society does not hold our profession in the highest of regard?
If there is any reader who thinks the foregoing is an aberration, think back to the last divorce you handled, if you have been so unfortunate as to handle marital matters. When two people, who have shared the intimacies of life, cannot agree on who will get the dog, and will go to whatever length or expense to fight about it, can there be any questions as to whether or not either really seeks justice?
Our society is clearly one of capitalism. Capitalism has served our country and our people well. And yet, it is that same capitalism that has created the Enrons, anti-trust violations, and a multitude of other evidences of greed and avarice. As I get older, I think back on what I sought to teach my children, and wonder sometimes if I overstated sound principles. Case in point were the many edicts of "don't be selfish." And yet, we are all selfish, and our capitalistic society has been built on selfishness. The fact of the matter is it is somewhat selfish to want the highest grade in the class, to be the best football player, to be Order of the Coif, to win a case, to have the most attractive spouse, and of course the list goes on. Reflecting back, it occurs to me the lesson to be taught is that we should not be "too" selfish. But selfish, yes, for that is motivation. True, in a idealistic world, we would seek to achieve or to accomplish because it is the right thing to do, but society as a whole needs a little more motivation to work with than mere idealism.
And so, we, as a profession, have worked hard and have earned the reputation we enjoy. As lawyers, we are diligent, hard working, innovative, and go to great lengths to obtain the goals our clients seek. And every time we achieve a goal for a client, there is a relatively good chance that the party on the other side cannot say enough about how unjust our legal system is and how disreputable we are as an attorney, all because they lost. Recall the O.J. Simpson trial, and the public perception of the attorneys, for both sides. That was the legal system on display, and I am not convinced that the public came away with true admiration for the profession.
But if we have worked so hard to earn this reputation, why do I suggest we are not deserving of it? I suggest this because there is a side of the legal profession that the public knows little about, and has little appreciation for. This past fall I was asked to serve on the Standing Committee on Judicial Evaluations-Outside Cook County. I knew little about the committee but agreed to serve. What I saw and what I experienced in the ensuing months is a part of the legal profession that society knows little about. For those not familiar with the Standing Committee on Judicial Evaluations-Outside Cook County, this is a committee of approximately 49 attorneys, from all over the state (outside of Cook County), that are asked to evaluate and rate candidates running for the state appellate and Supreme Court. This past year there were eighteen (18) candidates running in five (5) appellate districts and three (3) candidates running for the Supreme Court in the 4th Judicial District. Two committee members were appointed to do an extensive investigation of two (2) of the candidates assigned to them. Two committee members investigated every candidate. The investigation consisted of talking to or interviewing the candidates, contacting references provided by the candidates, talking to attorneys the candidates had practiced with and against, or attorneys that had appeared before them, if they were a sitting judge, and ultimately, to prepare an evaluation and synopsis of the candidate to present to other committee members for consideration in making a determination as to whether or not a candidate was qualified, highly qualified or not qualified. After the investigation stage, each candidate was invited to participate in a personal interview with the committee members. These interviews took place at several locations throughout the state on Saturdays. After considering all available information, the committee voted a rating according to several criteria, including legal knowledge and ability, integrity, litigation experience, sensitivity to diversity, impartiality, and health.
Though I did not keep time records, I know I spent more than 10 hours conducting my investigations, and then, spent at least four Saturdays this spring conducting interviews. I know other committee members devoted a similar amount of time for their interviews, and they too spent Saturdays conducting interviews.
And the purpose of all this, was it for the lawyers? No, au contraire. The time and effort was spent for the benefit of society. No one got paid, no one received an award, but a large number of attorneys, from all over the state, devoted a great deal of their personal time and effort for a better Judiciary. And too, lest there be any question, efforts were not politically motivated. In fact, I was surprised at the absolute dedication to principle, free and clear of any "political" inclination or persuasion.
To me it is sad. In a sense, attorneys do not deserve the reputation we have earned, for rarely does society see the real commitment of the legal profession for the betterment of society or the professionalism of the practicing bar. To me, the efforts of the committee members of the Judicial Evaluations Committee exemplify the reputation that should be imputed to members of the bar. The legal profession is an honorable profession, and while it clearly lends itself to economic rewards to those who practice, a significant part of the profession is for the betterment of society. It is too bad that the public does not better understand the commitment of our profession.
Many articles have been written in recent years about the lack of civility among members of the practicing bar. Too, there has been much discussion about ways to improve the public perception of the legal community. I submit that as a part of good law practice management, each of us owe, to ourselves, to each other, to the bench, but most importantly, to society as a whole, a duty to instill a better understanding of the legal process and of the Judiciary to the members of our community and to dispel the notions that attorneys are only interested in the almighty dollar, and not justice or the betterment of society.
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Thomas J. Brannan, partner in the Centennial Law Firm of McClure, Brannan & Hardwick, Beardstown, Illinois.
By Maximilian M. Prusak
Has your practice ever been "out of control"? Have you become a "crisis manager"? Has your spouse told you that your work life is out of balance? If so, read on.
As one's law practice grows, a lawyer must ask himself or herself, "Has my practice grown to the point where I have more work than I can do? We all experience periods when we feel overwhelmed by our practices. This article is addressing those periods.
What is the scope of the problem?
In order to solve the problem, one must admit to having a problem and determine its scope. The problem itself is easy to state: there seems to be more work than a lawyer can do. However, is this really true? An analysis is necessary.
How much work is pending?
A good place to start is to do an inventory of pending files. Our firm uses a case manager computer program called, Amicus Attorney. Each file is entered into this program; consequently, an inventory of pending cases can be quickly done. The case management calendar contains all appointments, court appearances, deposition schedules and follow-ups on the to-do list. It is easy to see what needs to be done for the coming days, weeks and months.
If manual systems are used, the calendar and the follow-ups on the to-do list must be manually merged. Also, a physical inventory should be done which identifies both the number of pending files and category to which each belongs (litigation, real estate, etc.). This will allow the lawyer to "look at the forest instead of the trees."
Does the attorney have more than he or she can do?
The answer to this question is not obvious. Once again, an analysis is necessary.
What resources are available? In my case, I have a secretary and share a paralegal. There are also two other attorneys in my firm. First, the attorney must take a realistic view of what he or she can do personally.
The elementary answer to accomplishing more work is to put in more hours. This is a temporary solution. In order to have a balanced life one must have margins of time available that can be allocated to unanticipated events in one's life. If we fill our lives to the limit, there is no way to handle unanticipated events. If a lawyer's work week is beyond 50 or 55 hours per week, his or her life is probably out of balance. When an event such as a trial comes, it inflicts havoc upon the lawyer's professional and private life. If one has built-in margins, these temporary events can be absorbed without serious consequences.
For the purposes of this article, I am assuming that the lawyer has worked "maximum" hours regularly so that a temporary increase in work schedule is not going to fix the problem.
Now that the scope of the problem has been assessed, can it be solved in 40 or 50 or 55 hours per week? Once again, the lawyer must ask himself or herself, "Do I really have 40 or 50 or 55 hours to address my work?" The answer is no. To determine the number of hours that a lawyer controls during a work month, one has to do an analysis of his time.
(1) How many hours do I work?
(2) How many hours per week do I spend:
* Meeting with people?
* Talking on the telephone?
* Appearing in court?
* Attending depositions?
* Mentoring employees and associates?
* Training employees?
* Talking with salesmen?