Gone But Hopefully Not ForgottenRule 1.9(a) and an Attorney’s Duty to a Former Client Page 2

In a Jam? What to do when a legal malpractice claim may be on the horizon Page 4

Winter Tech Tip Page 3

Agent’s Choice Page 5

AttPro Snippets Page 7

AttPro AllyWINTER 2017 ◊ ISSUE 21

Understanding What Makes a Client Tick Page 6

Lawyer, Know Thy Client

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Your phone rings and it’s the call you’ve been waiting for. NewCorp, a potential client you’ve been pursuing for years, has been sued in a breach of contract action and wants to retain you. NewCorp has been sued by OldCo. OldCo is a material supplier for NewCorp and alleges NewCorp failed to pay for goods it received. You discover that five years earlier one of your partners represented OldCo in a breach of contract action against a third party. In that case, OldCo asserted that the third party failed to pay for goods OldCo delivered under a similar contract. You want the case, but do the Rules allow you to take it? The Model Rules leave no doubt that an attorney owes his client a duty of loyalty1, but how far does this duty of loyalty extend after the conclusion of the representation? Rule 1.9(a) provides the framework for what proves to be a fact-specific determination. Addressing a lawyer’s duties to a former client, Rule 1.9(a) provides as follows:

A lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client unless the former client gives informed consent, confirmed in writing.

AttPro Ally Winter 2017 www.attorneyprotective.com

Will Jordan is an attorney

with Sowell Gray Robinson

Stepp & Laffitte, LLC in

Columbia, SC and focuses his

practice on defending legal

malpractice claims. Will and

his wife just welcomed their

fourth child. Quoting Jim

Gaffigan, Will says, “If you want

to know what it’s like to have a

fourth kid, just imagine you’re

drowning, then someone

hands you a baby.”

By Will Jordan As a preliminary matter, the fact that it was your partner and not you who previously represented OldCo is of no importance. The Model Rules prohibit lawyers associated in a firm from representing a client “when any one of them practicing alone would be prohibited from doing so by [Rule 1.9].”2

The key inquiry under Rule 1.9 is what the term “substantially related” means. The comments explain that “[m]atters are ‘substantially related’ . . . if they involve the same transaction or legal dispute or if there otherwise is a substantial risk that confidential factual information as would normally have been obtained in the prior representation would materially advance the client’s position in the subsequent matter.”3

Courts have recognized that determining whether, for purposes of Rule 1.9, matters are “substantially related” requires a fact-specific inquiry.4 “Two different matters do not constitute the ‘same transaction or legal dispute’ merely because they involve closely related issues.”5 Courts analyze “the extent to which the factual and legal issues in the two representations overlap” and examine “any other relevant circumstances.”6 Courts have considered several factors, including, for example, “the nature and scope of the prior representation [and] the present lawsuit,”7 “whether the client might have disclosed a confidence to his attorney in the prior representation which could be relevant to the present action,”8 “whether that information has been rendered obsolete by the passage of time,”9 and “whether confidential information provided to the attorney in the prior representation subsequently has been disclosed to the public.”10

So, how should you determine whether or not you can move forward with your representation of NewCorp? Here are some questions you might ask yourself:

1. How similar are the contracts at issue in the current case and the prior case?

2. To what extent do the factual and legal issues overlap? For example, do the cases turn on the same clause of the contract or the same principal defenses?

3. What confidential information did my partner acquire from OldCo in the course of his prior representation?

4. Would any of that confidential information be relevant in my case?

It can be difficult to remain objective when asking yourself these questions. If in doubt, consider running the scenario by a colleague who is not involved or contacting your state bar’s ethics hotline.1 See, e.g., Mod. Rule Prof. Cond. § 1.6 (prohibiting an attorney from revealing information relating to the representation of a client unless the client gives informed consent); § 1.7 (providing that a lawyer shall not undertake a representation that involves a concurrent conflict of interest); § 1.7 cmt. 1 (“Loyalty and independent judgment are essential elements in the lawyer’s relationship to a client.”).

2 Mod. Rule Prof. Cond. § 1.10(a).3 Mod. Rule Prof. Cond. § 1.9 cmt. 3.4 State ex rel. Swanson v. 3M Co., 845 N.W.2d 808, 816 (Minn. 2014); see also Magin v. Solitude Homeowner’s Inc., 255 P.3d 920, 926 (Wy. 2011) (“[T]he determination of whether the current and former matters are substantially related is inherently factual.”).

5 Gillette Co. v. Provost, No. 1584CV00149-BLS2, 2016 WL 26110677, at *4 (Mass. Sup. Ct. 2016).

6 Swanson, 845 N.W.2d at 816.7 NuStar Farms, LLC. V. Zylstra, 880 N.W.2d 478, 485 (Iowa 2016).

8 NuStar, 880 N.W.2d at 485.

9 Swanson, 845 N.W.2d at 816.10 Id.

AttPro Ally Winter 2017 www.attorneyprotective.com 3

Winter Tech Tip:Are your clients sending you text

messages? If you use text messaging in a professional capacity, it is critical

that you preserve messages and store them properly. Texts, photos and other

substantive communications need to be backed up in a usable format that can be properly stored with the client’s file. This

is not only important for the case at hand, but this communication can also be called

into question if a client complains about their representation at a later date. iExplorer is a great way to backup

messages from your phone. It enables you to extract SMS & iMessage history in CSV format. For more information please

visit: www.macroplant.com/iexplorer

F or a lawyer, there is nothing worse than the gnawing feeling that something at the office is not quite right. Whether it is mulling over the reason behind three unreturned phone calls to a client, second-guessing whether a brief was filed on time, or pondering

why a client is several months late paying a bill, this anxiety can be stressful to say the least. It is inevitable that every attorney will make a professional mistake at some point during their career. The important thing to understand is that the actions taken upon discovering the error may determine whether it can be repaired or exacerbated.

Avoiding errors is obviously ideal. Studying the sources of and trends in legal malpractice claims can help limit exposure to claims. And while understanding the trends and common errors that contribute to legal malpractice claims is important, taking proactive risk management steps to avoid becoming part of the statistics is even more essential. Risk management training and education services can help avoid claims, however they can be costly, especially for smaller firms or attorneys starting their own practice. Therefore, it may be beneficial to look for

a legal malpractice insurance carrier that offers complimentary risk management services, such as CLE courses, best practice tips or even a risk management hotline, through which an expert can assist in answering questions or concerns. Such services can generate substantial savings both now and down the road as they may provide the answer that avoids a large claim.

The thought of facing a legal malpractice claim is daunting enough, but the uneasiness of not knowing what to do next can be just as unnerving. Unfortunately, many attorneys respond to mistakes in ways that make matters worse. While most attorneys will try to remedy an error, in the absence of a solution, some will choose to ignore the problem, hoping it will just go away. Concern over the cost of defending a claim, or an unfamiliarity with policy coverages available can lead to this “wait and see” approach. If an attorney waits until a formal claim or lawsuit is commenced before involving their legal malpractice insurer, they are really doing themselves a disservice. There may be coverage for legal services or errors of which the attorney is not aware, such as coverage for the defense of disciplinary proceedings. Moreover, the carrier may offer pre-claim assistance, which can potentially minimize or avoid a lawsuit altogether.

Even worse than ignoring an error is attempting to conceal it. Concealment is not only ethically verboten, but may also create a conflict of interest between the lawyer and the client’s best interest. If a legal malpractice case is filed, the attorney is in trouble, as precedent shows juries are as sympathetic to attorney conflicts of interest as they are to big tobacco.

When a mistake is identified, the best approach is to immediately advise the client and the carrier. Keep in mind that advising of a mistake is very different from admitting that malpractice has occurred. When attorneys are upfront and honest about an error, clients are more inclined to be understanding. Realistically, though, no matter how much they like their attorney, clients are probably going to look for recompense if they are damaged. This is why early notification to the carrier is crucial as well.

If a legal malpractice suit is filed, the attorney should provide the client with the carrier’s information and then let the carrier handle the matter. Although the attorney may think that they are the best person to defend themselves, it is difficult for a lawyer to be objective about his or her own work. An experienced professional liability claim handler not only understands what constitutes a viable legal malpractice claim, but is also well aware that clients can threaten legal malpractice claims for several reasons, including to avoid paying a bill. Legal malpractice defense can be a thorny and

complicated area of practice. Therefore, when a lawyer’s work or character is being questioned, the defense should be steered by a professional liability claims team that specializes in the legal malpractice arena.

No attorney wants to be in the position where their judgement or reputation is questioned. Knowing how to avoid a claim and where to turn in the event that a claim is filed is crucial. Having proper risk management protocols in place, partnering with the right carrier, and understanding the benefits of early notification can help. The legal malpractice carrier should be viewed as an expert and an ally. Do not think of a legal malpractice insurance carrier as “the fixer,” only to be consulted in times of crisis; rather, think of them as a trusted advisor to lean upon for professional, expert advice guided by the attorney’s best interests.

AttPro Ally Winter 2017 www.attorneyprotective.com4

Erin is the Risk

Management Lead at

Attorney Protective.

When she isn’t busy

saving lawyers from

malpractice claims, she

can be found coaching

her children’s sports

teams and hopelessly

attempting to be the

next Serena Williams.

AttPro Ally Winter 2017 www.attorneyprotective.com5

We are excited to introduce Agent’s Choice to our newsletter!

Agent’s Choice is a forum through which our distribution partners may submit a risk

management question or topic about which they are most frequently asked or which

they find most interesting or relevant. We will publish the question and answer in the

following edition of AttPro Ally (submissions will be kept anonymous). We want

our partners to utilize all of the resources and risk management expertise we have to offer!

Please send your questions to AttPro’s Risk Management Lead Erin McCartney, Esq. at erin.mccartney@attorneyprotective.com.

Agent’s Choice

Everyone wants vendors or service providers to speak their language, understand their business and appreciate their issues.

LEARNING THE ROPESWhether you are interested in making the investment to learn more about an impor-tant client or as part of a broader effort to market to a particular industry segment, here are some ways to learn the ropes.

• Tour a company’s operations. Visit the con-struction site, walk through the plant or attend an open house in the company’s new space.

• Talk to a lot of people at the company. Visit with engineers who created the products. Talk to the people in HR. Interview the risk managers.

• Offer to sit in on planning or board meetings, no charge, to learn about the business.

• Conduct an informational interview with a com-pany executive to learn more about the business. Ask about the competition, industry, resources and challenges. Request an organizational chart.

• Read the company’s website, marketing materi-als and promotional information. Ask if you can be put on routing lists for internal newsletters or publications.

• Learn the industry’s terminology and acro-nyms. If you’re not familiar with something, Google it or ask a contact.

• Set up an alert through Manzama or Google on the company and your contacts there to track announcements, events and changes.

• Set up alerts on the company’s industry and on the company’s competition to learn about developments and see what positive or nega-tive events occur that may have an impact on your client or contacts.

• Join an industry association. Attend meet-ings (with a client, if possible) to find out what issues are top of mind and what trends are being discussed.

• Read industry publications—blogs, newslet-ters and magazines.

• Follow the company on social media—Linke-dIn, Twitter, Facebook—to see what they are posting. Join related groups on LinkedIn.

• Use the language of the client. If they call employees “team members” or “cast mem-bers,” then you should, too.

• Know when the client may have issues so you can anticipate needs. What is the fiscal year? When do they ramp up for board meetings? Key dates will often impact the client’s avail-ability and the information they need from you.

CONCLUSIONThere has been some research concluding that clients care more about what you know about their business than what you know about the law. There are a lot of good lawyers who can handle a particular type of matter substantively. What clients want is someone who can apply the law within the context of their business and with an appreciation for their situation.

Recently, I interviewed the partners at a law firm as part of a marketing assessment. I asked each of them whether there are any particular industries or types of clients that the firm should target for business. One of the lawyers said to me, “I don’t understand that concept. It doesn’t matter to us what the client is doing or selling; we can still provide our services.”

It got me thinking about the whole notion of understanding what makes a client tick. How would you feel if you were looking into software to help you manage your firm’s finances and the salesperson called your clients “customers,” didn’t understand how a partnership structure works and was unaware that lawyers bill their time?

AttPro Ally Winter 2017 www.attorneyprotective.com6

C L I E N T R E L A T I O N S A D V I C E B Y S A L L Y S C H M I D T

Lawyer, Know Thy Client

As President of Schmidt

Marketing in Edina, MN,

Sally Schmidt helps lawyers

with their client relations,

marketing and business

development initiatives.

Always the optimist, she

truly believes her beloved

Minnesota Golden

Gophers will return to the

Rose Bowl one day.

AttPro Snippets:

How to Keep Clients Loyal80% of future revenue comes from just 20% of existing customers.

- Gartner Group

It is easier and more cost effective to keep an existing client than it is to win a new one. Communication is a core competency on which clients can and will judge you. So, accessibility and prompt, clear communication with your current clients is essential. Keep in mind, if you fail to return repeated phone calls or emails, you may be violating your ethical responsibility of communication, but you may also be jeopardizing a future revenue opportunity.

A dissatisfied customer will tell between 9-15 people about their experience. Around 13% of dissatisfied customers tell more than 20 people.

– White House Office of Consumer Affairs

Poor service is one of the top reasons given for firing a law firm. Therefore, ensuring that meetings are not overlooked and legal documents are filed timely is essential. Utilizing a comprehensive calendaring system that is easily accessible, simple to update, and that sends multiple automatic reminders can help with this. It is a good idea to calendar in lead times necessary for the completion of tasks that are well ahead of the actual deadlines and then use a follow up system that confirms the actual completion of calendared deadlines. Keeping your own individual calendar, in addition to the firm calendaring system, is a great back up tool. Aim to conduct business in a way that’s congruent with how you want new clients to perceive you.

AttPro Ally Winter 2017 www.attorneyprotective.com 7

Get CLE for free by attending our one-hour webinars offered throughout the year. Visit - www.attorneyprotective.com/webinar to register.

Originally published in Attorney at Work

5814 Reed RoadFort Wayne, IN 46835-3568

Visit us at www.attorneyprotective.com or call (877) 728-8776.

ERIN MCCARTNEY, ESQ., EDITORPolicies are written by either National Liability & Fire Insurance Company or National Fire & Marine and administered by Attorney Protective. All coverage is subject to specific policy terms and conditions. 2016 Attorney ProtectiveSM. ® All Rights Reserved. Information provided by AttPro Ally is not intended as legal advice. This publication provides best practices for use in connection with general circumstances, and ordinarily does not address specific situations. Specific situations should be discussed with legal counsel licensed in the appropriate jurisdiction. By publishing practice and risk prevention tips, Attorney Protective neither implies nor provides any guarantee that claims can be prevented by use of the suggested practices. Though the contents of AttPro Ally have been carefully researched, Attorney Protective makes no warranty as to its accuracy, applicability or timeliness. Anyone wishing to reproduce any part of the AttPro Ally content must request permission from Attorney Protective by calling 877-728-8776 or sending an email to erin.mccartney@attorneyprotective.com.

This is AttPro Ally. A newsletter for today's modern law firm — AN ALLY IN A WORLD OF RISK.

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Read our article In a Jam? What to do when a legal malpractice claim may be on the horizon on page 4.