Practice Tip: Limiting Scope of Representation

BE SURE TO INCLUDE A CLEARLY DRAFTED, UNAMBIGUOUS SCOPE OF REPRESENTATION CLAUSE IN EACH AND EVERY RETAINER AGREEMENT YOU DRAFT.

This can be one of the most important clauses in a retainer agreement. If a client claims that the attorney failed to complete a particular task for which he or she accepted responsibility, a well drafted scope of representation can prove invaluable.

RPC 1.2 (c) allows a lawyer to limit the scope of a representation if the limitation is reasonable under the circumstances and the client gives informed consent.

Lerner v. Laufer, 359 NJ Super 201, 819 A2d 471 (App. Div. 2003)* involved a very cautious matrimonial attorney who prevailed in a legal malpractice action as the result of a carefully drafted retainer agreement. The disgruntled client (i.e. Plaintiff) had participated in the mediation process and a comprehensive, written property settlement agreement had been negotiated -- all prior to retaining the Defendant attorney. She consulted with him upon the recommendation of the mediator.

A representation had been made by the husband during mediation that a decision had been made not to take corporation owned by him public. Two months after entry of divorce, she discovered that the company was about to proceed with an initial public offering. Ms. Lerner subsequently sued Attorney Laufer alleging malpractice.

Laufer raised a “scope of representation” defense. In relevant part the retainer letter which was presented to the client at the first meeting stated “I have not conducted any discovery in this matter on your behalf…” “I am not in a position to advise you as to whether or not the Agreement is fair and equitable and whether or not you should execute the Agreement as prepared.” “I have discussed the contents of the Agreement with you, and in your opinion you are satisfied that the Agreement represents a fair and reasonable compromise of all issues arising from the marital relationship…” The attorney’s standard retainer agreement was subsequently sent (and signed by attorney and client). The terms somewhat contradicted those of the initial retainer letter in that the standard retainer agreement stated that the services were to involve factual investigation. At the hearing, when being questioned about attorney services, Lerner testified that she understood the limited participation and role in the matter of the attorney. The Court found that it was not a breach of the standard of care for an attorney under a signed precisely drafted consent agreement to limit the scope of representation to not perform such services in the course of representing a matrimonial client that he or she might otherwise perform absent such a consent.”

The Court’s opinion in Estate of Albanese v. Lolio, 393 N.J, Super. 355 (App. Div.), certif. den. 192 N.J. 597 (2007) drives home the lesson that limitations as to the “scope of engagement” must be set forth in clear language that the client understands.

*Thanks to legalmalpracticelawreview.com for uploading the Lerner case.

Click here to view Lerner v. Laufer Case

Click here to view Estate of Albanese v. Lolio Case