Representation May Go Farther Than You Think

Hired one thing, but then sued for another? It may be a more common problem than you think.  In a recent decision, an appellate court held that an attorney tasked with a seemingly simple and defined engagement, may actually be on the hook for much more. This serves as an important reminder to effectively communicate with the client to ensure there is a consensus as to the scope and limits of the engagement.

Plaintiff Attorney (“PA”) decided to retire from Law Firm (“Firm”).  In so doing, he hired defendant Outside Law Firm (“Outside Firm”) to concretize his departure from Firm by preparing the necessary documents. But, after the departure was finalized, PA brought a legal malpractice claim against Outside Firm when he discovered that the agreement did not contain a provision related to payouts from a 401(k).

Initially, the trial court granted summary judgment on behalf of Outside Firm.  That court found that Outside Firm merely acted as “scriveners,” in that their primary function was to take the terms and language of the departure agreement as provided by PA, and turn them into a binding agreement. Outside Firm was not responsible for negotiating these terms or for orchestrating any other aspect of PA’s departure from Law Firm. On this basis, the trial judge concluded that Outside Firm did not technically represent PA, but merely acted as an instrument in effectuating his departure.

On appeal, however, the court reversed and held that, despite Outside Firm’s seemingly limited involvement, the potential scope was a matter of factual dispute.  Among other concerns, the appellate court noted that there may well have been representation by Outside Firm on behalf of PA, as the acceptance of professional responsibility by a law firm “need not necessarily be articulated.” The appellate court further found that, despite Outside Firm’s primary responsibility to effectuate the terms of the departure agreement as provided by PA, it may well have had a professional responsibility to explore further the terms of this agreement, particularly with respect to the 401(k).  Ultimately, the appellate court decided that this matter had too many factual wrinkles to be decided by summary judgment.

So, what does this teach us? Never assume that even the most seemingly simple representation is as appears at first blush. Even if hired for what seems to be the most rudimentary task (i.e., something akin to a “scrivener”), it behooves any attorney or firm to approach that task with a fine-toothed comb and to ensure that the scope of the agreement is clearly spelled out and understood. Since the scope of representations continues to impose risks to professionals, clearly documented communication may be the key.

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