Imagine the following scenario: A potential client consults with you to seek an opinion as to the merits of a potential cause of action. You tell him or her that you don’t think that there is a case but that because of your lack of expertise in this area of the law, he or she needs to consult with another lawyer “promptly”. You do not follow up with correspondence rejecting the matter. The person then consults with another attorney (after expiration of the statute of limitations) and finds that the case is (or was) actually very good.
You are then sued for malpractice for giving bad advice regarding the viability of the claim. Plaintiff’s testimony that you neither revealed your lack of expertise nor recommended consultation with another firm is found to be credible at trial. Even though no retainer agreement was signed and no fee was paid, the existence of an attorney/client relationship is found and you are liable for the client’s failure to pursue legal representation.
This is basically what happened in Togstad v. Vesely, Otto, Miller & Keef, 291 N.W.2d 686 (Min. 1980). While the case is not new, the lesson remains the same: ALWAYS SEND A WRITTEN NON-ENGAGEMENT LETTER WHEN YOU ARE NOT FORMALLY RETAINED.
A non-engagement letter is ALWAYS necessary where a lawyer never actually undertakes representation of a potential or even existing client in a specific matter. This precept remains true whether the decision not to establish a formal relationship is that of the attorney or of the client.
In drafting the letter, the following topics need to be covered:
1. Describe the client’s matter.
2. Clearly state that the lawyer has not been engaged by and does not represent the client in the matter.
3. Recommend consultation with another attorney
a. Consider that if you recommend an attorney or give a specific time frame, it could be found that you rendered legal advice.
4. State that you did not conduct research or investigation and are therefore not in a position to render an opinion as to the merits of the case.
5. Inform the client that there could be time limitations that apply to the matter and that failure to comply with these limitations will be detrimental to the case.
Send the letter return receipt requested and keep the letter along with the return receipt on file.
Keep in mind that a non-engagement letter can be a valuable marketing tool. Be sure to include information about your firm’s practice areas and explain that you welcome referrals. The letter may also be used as a friendly reminder to an individual who has stated the intention to retain you but has not yet followed through. On many occasions, clients who were in “procrastination mode” moved forward with our firm once we cautioned them that their file would be closed unless we heard from them.