Engagement Agreement Saves the Day for Law Firm
You probably know it’s a good idea to confirm the terms of your representation – particularly what you have agreed to do and how you will be paid – in a written agreement with your client.
But you may not appreciate how important an engagement agreement is for malpractice defense.
A recent case in New York shows how a carefully worded agreement can ward off an allegation that you failed to do something that falls outside the scope of representation.
In Attallah v. Milbank, Tweed, Hadley & McCloy, LLP, a client retained a law firm after being expelled from osteopathic-medicine college. The parties signed a Letter of Engagement, which said the firm would “investigate and consider options that may be available to urge administrative reconsideration of your dismissal.” The document specifically excluded “any form of litigation” or even “the threat of litigation” as part of the agreed-upon services.
The firm looked into the matter, but the school refused to reconsider the expulsion. The client sued for malpractice, alleging the lawyer failed to negotiate or commence legal action. The trial court dismissed the malpractice suit, and the appeals court affirmed.
“An attorney may not be held liable for failing to act outside the scope of a retainer,” according to the opinion. “The defendant’s alleged failure to negotiate with the school, its alleged failure to commence litigation against the school, and its alleged failure to properly advise the plaintiff on the efficacy of a defamation action against nonschool parties fell outside the scope of the parties’ letter of engagement.”
Put It in Writing
The engagement agreement in Attallah was notable for its specificity in delineating not only what the firm would do, but also what it would not do. The agreement stated:
“Our services will include all activities necessary and appropriate in our judgment to investigate and consider options that may be available to urge administrative reconsideration of your dismissal from the New York College of Osteopathic Medicine (the ‘College’). This engagement does not, however, encompass any form of litigation or, to the extent ethically prohibited in this circumstance, the threat of litigation, to resolve this matter. This engagement will end upon your re-admittance to the College or upon a determination by the attorneys working on this matter that no non-litigation mechanisms are available to assist you. The scope of the engagement may not be expanded orally or by conduct; it may only be expanded by a writing…”
The law firm never promised to negotiate an administrative reconsideration of the academic expulsion, but agreed only to “investigate and consider options.”
“Since the law firm’s alleged failure to negotiate with the school or to commence litigation against the school fell outside of the parties’ letter of engagement, the Appellate Division, Second Department, ruled that dismissal of the amended complaint was warranted,” writes Jennifer H. Feldscher for Professional Liability Matters.
Get the Lawyers Mutual Attorney-Client Agreement Toolkit
Lawyers Mutual offers a free Risk Management Practice Toolkit that includes sample letters of engagement, non-engagement and disengagement.
“A well-drafted engagement letter is the first step in establishing a professional relationship with the client and is an effective way of meeting the duty to communicate with clients,” says the LM Toolkit. “Many potential claims and/or grievances can be avoided with the adoption of a firmwide policy to use an engagement letter for each new representation.”
Download your copy of the Attorney-Client Agreement Toolkit here.
Sources:
- Professional Liability Matters https://professionalliabilitymatters.com/2019/03/11/limiting-malpractice-through-scope-of-engagement/
- Attallah v. Milbank, Tweed, Hadley & McCloy, LLP http://www.nycourts.gov/reporter/3dseries/2019/2019_00583.htm
