At Lawyers Mutual, we often talk about the importance of using a detailed engagement agreement in all representations. The engagement agreement is an opportunity to define clearly the scope of your representation and other terms of the engagement. I recently saw a post on a listserv asking for advice about what to include in an engagement agreement for an estate administration where the lawyer would be serving as both the attorney for the estate and as the personal representative. 

I was struck by the very wise reply from another lawyer. Rather than offering the inquiring lawyer advice about what to include in an engagement agreement, this lawyer recommended that the inquiring lawyer do a non-engagement letter to all the estate beneficiaries. This is very good advice in the context of estate administration, estate planning, closely held business representation, or any other area where there might be third parties who misunderstand your role and duties.

In the estate planning context or estate administration context, we often deal with malpractice claims where beneficiaries claim that our insured represented them. After all, they brought their elderly parent to the lawyer and helped their parent explain to the lawyer what was needed. They are the ones benefitting under the testamentary documents. In the absence of a non-engagement letter or email, it is not surprising that these individuals might assume that the lawyer represents them. In North Carolina, the determination of whether an attorney-client relationship exists is based on a purported client’s reasonable expectation or belief as a result of statements or actions by the attorney. A formal agreement or payment of a fee is not required. 

We often see confusion in family business and closely held business representation as well. Lawyers often fail to make clear to the family members, owners, managers, and officers who the lawyer is representing. When parties turn on one another, this can put the lawyer in a very difficult conflict situation. 

All these situations can be easily avoided with a simple email or other written communication to these third parties, making clear that the lawyer does not represent them. This email should include a statement explaining that the third party should not rely on the lawyer’s advice to the actual client and should seek their own counsel to protect their interests. By including such a statement, the third party is prevented from later claiming that they relied on the lawyer’s advice. 

You can find sample engagement, non-engagement and disengagement agreements in Lawyers Mutual’s Attorney-Client Agreements Toolkit.