Protecting and Operating Your Law Office: Insurance, Employment … · 2020-02-11 · Protecting...

presented by

The South Carolina Bar Continuing Legal Education Division

Protecting and Operating Your Law Office:

Insurance, Employment and Ethics Issues for Small Firm Practice

Rock Hill ~ Thursday, February 20, 2020

Charleston ~ Wednesday, February 26, 2020

http://www.scbar.org/CLE

SC Supreme Court Commission on CLE Course No. 200586

Table of Contents

Agenda ...................................................................................................................................................3 Speaker Biographies .............................................................................................................................4 Insurance: policy coverages; recommended office procedures; 5-10 year history of claims ........7 Employment (Hiring and Firing; Employment Contacts; Office Procedures to Avoid Claims) ..40 Ethics (Small Practice Pitfalls; Key Rules to Remember; New Case Law) ....................................65

SC Bar-CLE publications and oral programs are intended to provide current and accurate information about the subject matter covered and are designed to help attorneys maintain their professional competence. Publications are distributed and oral programs presented with the understanding that the SC Bar-CLE does not render any legal, accounting or other professional service. Attorneys using SC Bar-CLE publications or orally conveyed information in dealing with a specific client's or their own legal matters should also research original sources of authority. ©2020 by the South Carolina Bar-Continuing Legal Education Division. All Rights Reserved THIS MATERIAL MAY NOT BE REPRODUCED IN WHOLE OR IN PART WITHOUT THE EXPRESS WRITTEN PERMISSION OF THE CLE DIVISION OF THE SC BAR. TAPING, RECORDING, OR PHOTOGRAPHING OF SC BAR-CLE SEMINARS OR OTHER LIVE, BROADCAST, OR PRE-RECORDED PRESENTATIONS IS PROHIBITED WITHOUT THE EXPRESS WRITTEN PERMISSION OF THE SC BAR - CLE DIVISION.

Protecting and Operating Your Law Office: Insurance, Employment and Ethics Issues for Small Firm Practice

This program qualifies for 3.0 MLCE credit hours, including up to 2.0 LEPR credit hours

SC Supreme Commission on CLE Course #: 200586

Speakers: Susan Taylor Wall, Gordon & Rees

Henry W. “Hal” Frampton IV, Gordon & Rees Ellen M. McCarthy, Swiss Re

11:30 a.m. Registration and Lunch 12 p.m. Insurance (Policy Coverages; Recommended Office Procedures; 5-10 Year

History of Claims) 1 p.m. Employment (Hiring and Firing; Employment Contacts; Office Procedures to

Avoid Claims) 2 p.m. Ethics (Small Practice Pitfalls; Key Rules to Remember; New Case Law) 3 p.m. Adjourn

Susan Taylor Wall

Susan Wall is a Partner in the Charleston office of Gordon & Rees. She primarily handles complex

litigation for professional errors and omissions. She is AV rated, has been named in Best Lawyers

for 13 consecutive years, and was just named Best Lawyers, 2020 “Lawyer of the Year”,

Charleston, Professional Malpractice Defense.

Susan is a member of the SC Supreme Court Committee on Character and Fitness and has served

on the Judicial Merit Selection Commission. She is a frequent presenter on legal ethics and

malpractice prevention.

Henry W. Frampton, IV

Hal Frampton is a Partner in the Charleston office of Gordon & Rees. He concentrates his practice

on employment matters and professional negligence cases. He regularly assists businesses and

professionals with claims brought by employees, former employees, and clients.

Mr. Frampton is AV Rated, is listed in Best Lawyers for Labor & Employment Litigation and in

Chambers USA.

Ellen McCarthy

Ellen McCarthy is the Client Operations and Risk Management Leader for the lawyer's professional

liability program with Swiss Re Corporate Solutions. Prior to her current role, Ellen served as a

claims expert adjudicating complex legal malpractice claims across the US, and as an underwriter

for the LPL program. Ellen is a licensed Maryland attorney.

McCarthy | Risk Management | Swiss Re Corporate Solutions

Risk Management and Legal Malpractice Insurance Primer for South Carolina Attorneys

Ellen A. McCarthy, JD, CPCU, RPLU



Agenda

2

• Trends in legal malpractice claims

•Common myths about legal malpractice

•Demystifying legal malpractice insurance - basic and typical coverage provisions


Trends in the Lawyers’ Professional Liability Market

3

➢ American Bar Association Standing Committee on Lawyers’ Professional Liability - Profile of Legal Malpractice Claims 2012 – 2015

➢ South Carolina Experiences


18.24%

14.89%

13.51%12.05%

10.59%

5.60%

5.30%

4.44%2.33%

13.05%Personal Injury -PlaintiffReal Estate

Family Law

Estate, Trust andProbateCollection andBankruptcyCriminal

Business TransCommCorporate/BusinessOrgPatent, Trademark,CopyrightAll Other

Percent of all claims by area of law in 2015 ABA study

Profile of Legal Malpractice Claims: 2012 - 2015. ABA Standing Committee

4

70% of claims come from 5 areas of law


0 500 1000 1500 2000 2500

Administrative Errors

Number of Claims by Type of Alleged Error

2015 ABA Study

Profile of Legal Malpractice Claims: 2012 - 2015. ABA Standing Committee

0 1000 2000 3000 4000 5000 6000

Substantive Errors

5


South Carolina

6

• In past 20+ years, over 600 reported matters handled by our claims team:

– Of these matters, over half were closed without payment due to:

– Effective early intervention and collaboration

– Education to claimant


South Carolina

7

• Of those matters with payment, what has been paid?

– Average paid defense costs were $40K

– Average paid loss was $57K

– Claims loss payments range from $500 to 7 figures!!


South Carolina

8

– Top Areas of Practice of Reported Matters:

– Real Estate – Commercial

– Real Estate – Residential

– Personal Injury – Plaintiff

– Workers Comp – Plaintiff

– Criminal Law

– Family Law

– Corporate and Business Organizations

– Estates, Probate and Trusts


Common MythsAbout Legal Malpractice

9



10

•Myth: I’ll never get sued!



11

•Myth: I’ll never get sued!

•Fact: 4 out of 5 attorneys will get sued for malpractice at some point during their careers.



12

•Myth: Small firms don’t have to worry about getting sued for malpractice.



13

•Myth: Small firms don’t have to worry about getting sued for malpractice.

•Fact: 70% of all malpractice claims are filed against firms with 1 – 5 attorneys.



14

•Myth: I will save money in the long run by not paying insurance premiums.



15

•Myth: I will save money in the long run by not paying insurance premiums.

•Fact: The average cost to defend a legal malpractice claim exceeds $40,000. This does not include paid losses!


Demystifying Legal Malpractice Insurance - Basic and Typical Coverage Provisions

16


Policies are Written on a Claims Made and Reported Basis:

17

I. INSURING AGREEMENTS

A. The Company shall pay on behalf of any INSURED all LOSS

in excess of the deductible which any INSURED becomes

legally obligated to pay as a result of CLAIMS first made

against any INSURED during the POLICY PERIOD and

reported to the Company in writing during the POLICY

PERIOD or within sixty (60) days thereafter, by reason of

any alleged WRONGFUL ACT occurring on or after the

RETROACTIVE DATE, if any.


Policies are Written on a Claims Made and Reported Basis:

18

I. INSURING AGREEMENTS

A. The Company shall pay on behalf of any INSURED all LOSS

in excess of the deductible which any INSURED becomes

legally obligated to pay as a result of CLAIMS first made

against any INSURED during the POLICY PERIOD and

reported to the Company in writing during the POLICY

PERIOD or within sixty (60) days thereafter, by reason of

any alleged WRONGFUL ACT occurring on or after the

RETROACTIVE DATE, if any.

• What does this mean to you?

– You must report claims when you get them or risk a coverage reservation or denial!

– You only have coverage for wrongful acts after the retroactive date.


What is a Claim?

19

• "CLAIM" MEANS:• 1. a demand made upon any INSURED for LOSS, including, but not

limited to, service of suit, or institution of arbitration proceedings or

administrative proceedings against any INSURED;

• 2. a request for any INSURED to toll or waive a statute of

limitations;


What is a Claim?

20

• "CLAIM" MEANS:• 1. a demand made upon any INSURED for LOSS, including, but not

limited to, service of suit, or institution of arbitration proceedings or

administrative proceedings against any INSURED;

• 2. a request for any INSURED to toll or waive a statute of

limitations;


– A “claim” is not just a lawsuit, but can also be a request for a tolling agreement or a demand for money!

– If you get a letter saying you have committed legal malpractice, this is most likely a claim!

– Whether or not you think there is any merit does not make it less of a claim.


Should I Report Potential Claims?

21

• I. INSURING AGREEMENTS• B. If, during the POLICY PERIOD, any INSURED first becomes aware of

a POTENTIAL CLAIM and gives written notice of such POTENTIAL CLAIM

to the Company during the POLICY PERIOD any CLAIMS subsequently

made against any INSURED arising from the POTENTIAL CLAIM shall be

considered to have been made during the POLICY PERIOD.

*****

• "POTENTIAL CLAIM" MEANS:• 1. any act, error, omission, circumstance or PERSONAL INJURY

which might reasonably be expected to give rise to a CLAIM against any

INSURED under the POLICY; or

• 2. any breach of duty to a client or third party which might

reasonably result in a CLAIM against an INSURED.


Should I Report Potential Claims?

22

• I. INSURING AGREEMENTS• B. If, during the POLICY PERIOD, any INSURED first becomes aware of

a POTENTIAL CLAIM and gives written notice of such POTENTIAL CLAIM

to the Company during the POLICY PERIOD any CLAIMS subsequently

made against any INSURED arising from the POTENTIAL CLAIM shall be

considered to have been made during the POLICY PERIOD.

*****

• "POTENTIAL CLAIM" MEANS:• 1. any act, error, omission, circumstance or PERSONAL INJURY

which might reasonably be expected to give rise to a CLAIM against any

INSURED under the POLICY; or

• 2. any breach of duty to a client or third party which might

reasonably result in a CLAIM against an INSURED.


– If you know of a potential claim, report it. The carrier may be able to help mitigate.


What if I Don’t Report a Wrongful Act that Might Lead to a Claim?

23

IV. EXCLUSIONS

This POLICY shall not apply to any CLAIM based upon, arising out of, attributable to, or directly or indirectly resulting from:

B. any WRONGFUL ACT occurring prior to the effective date of thePOLICY PERIOD for this lawyers professional liability policy issued by theCompany to the NAMED INSURED if, (a) the WRONGFUL ACT had previouslybeen reported to any other insurance company or (b) if the INSURED at theeffective date of the POLICY PERIOD for this lawyers professional liabilitypolicy issued by the Company to the NAMED INSURED knew or could havereasonably foreseen that such WRONGFUL ACT might be expected to be thebasis of a CLAIM. .


What if I Don’t Report a Wrongful Act that Might Lead to a Claim?

24

IV. EXCLUSIONS

This POLICY shall not apply to any CLAIM based upon, arising out of, attributable to, or directly or indirectly resulting from:

B. any WRONGFUL ACT occurring prior to the effective date of thePOLICY PERIOD for this lawyers professional liability policy issued by theCompany to the NAMED INSURED if, (a) the WRONGFUL ACT had previouslybeen reported to any other insurance company or (b) if the INSURED at theeffective date of the POLICY PERIOD for this lawyers professional liabilitypolicy issued by the Company to the NAMED INSURED knew or could havereasonably foreseen that such WRONGFUL ACT might be expected to be thebasis of a CLAIM. .


– If you know of an error that could lead to a claim, you must report it or potentially lose coverage!


What Happens if I Report a Claim?

25

DEFENSE, INVESTIGATION AND SETTLEMENT OF CLAIMSAs respects such insurance as is afforded by this POLICY:

The Company shall have the right and duty to defend any CLAIM for LOSS

against any INSURED covered by Section I. Insuring Agreement A., even if

such CLAIM is groundless, false or fraudulent, and shall have the right to

make such investigation, negotiation and settlement of any CLAIM as it

deems expedient.


What Happens if I Report a Claim or Potential Claim?

26

DEFENSE, INVESTIGATION AND SETTLEMENT OF CLAIMSAs respects such insurance as is afforded by this POLICY:

The Company shall have the right and duty to defend any CLAIM for LOSS

against any INSURED covered by Section I. Insuring Agreement A., even if

such CLAIM is groundless, false or fraudulent, and shall have the right to

make such investigation, negotiation and settlement of any CLAIM as it

deems expedient.


Most carriers have very knowledgeable claims specialists or claims counsel who will discuss the matter with you and strategize on an action plan.

If applicable, the insurance carrier will appoint counsel who is experienced in legal malpractice claims in your jurisdiction.


What Are Typical Policy Exclusions?

27

• any intentionally criminal, dishonest, malicious, or fraudulent act, error,

omission; or PERSONAL INJURY committed by an INSURED.

• any INSURED'S activities as an officer, director, partner, manager or employee

of any company, corporation, operation, organization, partnership or

association other than the NAMED INSURED

• any PROFESSIONAL SERVICES rendered or that should have been rendered

to or on behalf of any entity other than the NAMED INSURED, which, at any

time, was (1) ten percent (10%) or more owned by any INSURED or

combination of INSUREDS and/or any spouse(s) of any INSURED or

combination of INSUREDS; or (2) held, controlled, managed or operated by

any INSURED or combination of INSUREDS and/or any spouse(s) of any

INSURED or combination of INSUREDS

• any conduct by any INSURED committed within the scope of or while acting

in a capacity as a public official or an employee of a municipality or

governmental body, subdivision, agency, department or unit


What Damages Are Covered Under the Policy?

28

• "LOSS" MEANS the monetary and compensatory portion of any judgment,

award or settlement, provided always that LOSS shall not include:

• 1. civil or criminal fines, penalties, fees or sanctions;

• 2. matters deemed uninsurable by operation of law;

• 3. punitive or exemplary damages;

• 4. the multiplied portion of any multiple damages;

• 5. the return by any INSURED of any fees or remuneration paid to

any INSURED; or

• 6. any form of non-monetary relief.


What Damages Are Covered Under the Policy?

29

• "LOSS" MEANS the monetary and compensatory portion of any judgment,

award or settlement, provided always that LOSS shall not include:

• 1. civil or criminal fines, penalties, fees or sanctions;

• 2. matters deemed uninsurable by operation of law;

• 3. punitive or exemplary damages;

• 4. the multiplied portion of any multiple damages;

• 5. the return by any INSURED of any fees or remuneration paid to

any INSURED; or

• 6. any form of non-monetary relief.


– Compensatory damages are typically covered.

– Return of fees is excluded.


What Else May Be Covered Under a Malpractice Policy?

30

• Grievances:

– Typically a sublimit for defense costs

– Counsel will defend you in a disciplinary proceeding (always a good idea!)

• Subpoenas:

– Typically a sublimit for defense costs

– Counsel will provide advice regarding the production of documents, preparefor sworn testimony and represent at a deposition

• Cyber:

– First party (internal costs) and/or third party (outsider’s claim)

– May be sublimited or exclude certain acts

• Crisis Event:

– Sublimit for costs incurred due to death or illness, workplace violence, firmdissolution


An Important Reminder….

•Wire transfers are still a problem!

31


Hackers now intercept email exchanges and send fraudulent wire instructions

VERIFY!

Telephone/obtain fax with letterhead

Wire Transfers - Use Extreme Caution

32


Thank you and have a great day!

33

Employment Issues for Small Law Practices

Hal Frampton

2020

2

Agenda

• Why Worry about Employment Issues

• Employment Practices Liability Insurance

• Hiring New Employees

• Wage and Hour Issues

• Workplace Environment and Operations

• Firing Employees

• What To Do if There May Be a Claim

• Common Employment Claims

3

Why Worry About Employment Issues?

• Ready access to your clients’ confidential information

• Potential access to IOLTA and operating accounts

• No industry standard quality controls for competence or ethics,

yet you are liable for their ethical breaches and mistakes

• Wage and hour claims: not covered by insurance, typically

include double or treble damages and attorneys’ fees

• Other employment claims: typically include potential for

liquidated and/or punitive damages and attorneys’ fees

• Employees are nearly every organization’s largest

cybersecurity risk

4

Employment Practices Liability Insurance

• Typically available as an add-on to your CGL policy

• Premiums and deductibles for small organizations with few claims tend

to be low

• All EPLI policies are manuscript, meaning that they vary greatly from

carrier to carrier and even within carriers – READ YOUR POLICY

• Typically cover standard non-wage & hour employment claims – e.g.,

discrimination, harassment, wrongful termination. Typically do not cover

wage & hour or contractual claims but may (or may not) provide a

defense. ADA claims and defamation claims can be gray areas.

• Defense costs in employment cases regularly exceed $100,000, in part

because most cases are in federal court

• Bottom Line: EPLI coverage is worth exploring with your insurance

agent

5

Hiring – Before You Hire

• Written job descriptions, policies, and procedures

– Include “conspicuous disclaimer” – all caps, underlined, on page 1 of

the document. If it’s an employee handbook, the disclaimer must be

signed by the employee

• Make sure you will be able to meet payroll

• Provide written wage and hour notice

• Conduct an in-person interview

• Check references

• Consider background / FCRA check

– Use reputable third parties to conduct background check

– Comply with notice requirements:

https://www.eeoc.gov/eeoc/publications/background_checks_employ

ers.cfm

6

Hiring – DO NOT

• Inquire about protected characteristics – age, race, disability,

gender, pregnancy / family planning, sexual orientation / gender

conformance, religion, disability

• Ask about prior workers’ comp or employment claims

• Use defined term employment contracts outside of special

circumstances – instead rely on “at will” employment

• Treat applicants differently based on protected characteristics

• Create a situation where anyone (except you) is indispensable

• Ignore red flags – e.g., resume full of multiple short-term stints,

overqualification, large gaps in employment, stories that don’t

add up, references that are noticeably tight-lipped

7

Hiring – On-Boarding

• On-Boarding is part of hiring

• Remember that there is no industry-standard training for legal

secretaries / paralegals – it therefore falls on YOU to train them

• Do not assume that staff were properly trained by their last employer;

take the time to review with them your office procedures, the Rules of

Professional Conduct, and your expectations

• Memorialize the training in writing. Even something as simple as a

signed checklist showing that you reviewed the above items is helpful.

• Failing to train staff can elevate simple negligence to gross

negligence and open the door to punitive damages

8

Wage & Hour Issues

• Fair Labor Standards Act (federal)

– Minimum Wage is $7.25 / hour for all hours worked

– Travel time (not commuting time) generally counts

– Nearly any expenses (other than commuting and normal office attire) you

require the employee to bear will be deducted from wages to determine the

actual wage

– Any hours worked over 40 hours in a week must be paid at time-and-a-half of

the employee’s regular rate

– Paralegals and legal secretaries are NOT exempt. You cannot pay them a set

salary and call it a day.

– You must keep contemporaneous time records of hourly staff. If you fail to

track hours, their testimony as to their hours will be regarded as presumptively

true.

– Overtime must be paid, even if the work was done without prior approval.

Failure to get approval is a disciplinary issue, not a payment issue.

9

Wage & Hour Issues cont.

• S.C. Payment of Wages Act

– Must provide notice of regular wages and hours and seven days’

written notice before making any changes

– Must provide itemized statement of wages and deductions every pay

day

– No deductions without prior notice and authorization

– Must pay terminated employees all wages due at the next regular

paydate not to exceed 30 days

– Best practices is to address in writing whether unused vacation time

is paid out upon termination

10

Wage & Hour Issues – Best Practices

• Have a good, reliable timekeeping system – preferably electronic

• Monitor hours throughout the week to identify potential overtime and

address it

• Do not allow hourly employees to work from home unless you are

prepared to assiduously track and pay for that time; likewise, be wary of

allowing hourly employees to have e-mail / work material on their

phones

• Put all wage and hour policies in writing, particularly PTO policies, and

follow them to the letter

• Do not punish employees by docking pay

• Address potential cash flow problems early

before they reach the level of affecting your

ability to make payroll

11

Workplace Environment and Operations

• Performance management

– Provide regular honest feedback, preferably in writing

– Have a formal review system whereby there is a documented review

of performance at least once a year

» BUT do not limit performance review to once a year. Nothing in an

annual review should be a surprise

– BE HONEST IN REVIEWING PERFORMANCE

– Nip problem performance in the bud early and follow up assiduously

– Do not let performance problems fester

12


• Foster an Environment that Does Not Tolerate Discrimination /

Harassment

– Be professional in all communications and actions and expect the

same of staff

– Sexual Harassment is broad and can include:

» Verbal statements / jokes

» Sexual propositioning

» Physical contact

» Visual images / posters / porn usage

» Any other unwelcome conduct of a sexual or gender-based nature

– Do not retain clients who abuse or harass staff. You can be liable for

your clients’ sexual harassment of your staff.

– Avoid romantic entanglements with staff

– Harassment can be based on any protected characteristic, not just

sex / gender

13


• Cell phones

– Have a clear policy for use of cell phones and other electronic

devices at work

– Avoid asking / allowing hourly employees to use personal electronic

devices for anything but occasional phone calls

– Consider providing phones for firm-related work if such use is

important to your practice

– For attorney employees, have a clear policy with respect to the firm’s

ownership of any firm-related electronic information contained on the

employee’s personal electronic devices and put in writing

14


• Data Security / Client Confidentiality

– Have a clear, written policy requiring that staff maintain the

confidence of client information and train them on it

– To the extent possible, limit staff access to electronic information they

reasonably need to perform their jobs

– Train staff on data security best practices – i.e., choosing a secure

password, not leaving devices on or open, not opening suspicious e-

mails, etc.

– If you allow staff to use personal electronic devices for work, make

sure those devices are secure

– Keep antiviral software / firewall up to date

– Strongly consider consulting an IT professional

15

Firing Employees – Making the Decision

• Performance problems

– Questions to ask yourself:

» Do I believe the employee can improve in a manner that is cost-

effective and does not create undue risk?

» Do I think my greater risk is keeping the employee or firing the

employee?

– If you’re not sure, consider a formal performance improvement plan with

clear metrics for improvement

– If you decide to terminate, gather documentation of performance

problems and review it (hint: there should be such documentation).

• Economic reasons

– Evaluate projected cash flow conservatively

– Consider impact on other employees

– Err on side of avoiding danger of not making payroll

16

Firing Employees – When, Where, How

• Performance reasons

– Meet in private, but have a witness if at all possible

– Keep it short and sweet and do not brook any argument:

» Unicorn standard: Give all of the reasons for the termination

» Gold standard: Give no reasons for the termination

» Do not give some but not all of the reasons; do not give false

reasons; do not tell someone they performed well if they did not;

do not soft pedal. EVERTHING YOU SAY CAN COME BACK TO

BITE YOU. 99% of employers should give no reasons.

» Document what happened; document what was said; document the

reasons for the termination

– Escort the employee out immediately following the termination

conference and disable all access to your systems / files

17

Firing Employees – When, Where, How

• Economic reasons

– Same basic set-up, but be upfront about the reasons for the termination

– Consider severance pay – it’s still not recommended to keep someone who

has been fired with you unless you have complete trust and confidence in the

person

• All reasons

– Make sure you issue the final paycheck appropriately (next regular paydate or

earlier) and pay through the last day of work

– No deductions except those properly disclosed / approved by the employee

– Maintain a neutral reference policy

– Think carefully before fighting unemployment

– No substantive communication with other employees

– Maintain records for at least 3 years

18

Common Employment Claims

• Discrimination

– Regulated by federal law

– Taking adverse employment action against an employee because of

their age (over 40), race, national origin, gender (including failure to

conform to gender stereotype), or religion. (We’ll come back to

disability)

– Applies if you have 15 or more employees (everything but race and

age). Race applies to all employers. Age applies to employers with

20 or more employees.

– Typically must be investigated by EEOC before a lawsuit can be filed

(not race)

19


• Harassment / Hostile Work Environment


– Defined as unwelcome conduct based on the protected characteristic

that is so severe or pervasive as to alter the conditions of

employment

– Distinguish between co-worker and supervisor harassment

– Typically must go through EEOC (not race)

• Retaliation


– Prohibits adverse action based on employee’s good-faith opposition

to discriminatory practice or participation in investigation of same

– Subject to same employee thresholds

– “Adverse action” broadly defined

20


• Americans with Disabilities Act

– Must have 15 or more employees

– Disability broadly defined to include any condition that, when active,

substantially interferes with a major life activity or major bodily

function

– Employers required to make reasonable accommodation unless such

accommodation would be an undue burden or the employee would

pose a direct threat to self or others

21


• Fair Labor Standards Act

– Broadly applicable to employees involved in interstate commerce

and/or businesses with $500,000 or more in annual revenue

– Requires payment of minimum wage

– Requires payment of overtime for hourly employees

– Prohibits retaliation

– Allows for 2x damages and attorneys’ fees

– Typically not covered by EPLI

• SC Payment of Wage Act

– Failure to pay employees as agreed – includes claims re: failure to

provide PTO pay as agreed

– Failure to give 7 days’ notice of change in wages / hours

– Allows for treble damages and attorneys’ fees

22


• Wrongful Termination in Violation of Public Policy

– State law claim; allows for punitive damages

– SC Supreme Court has NOT limited to these situations, so we do not

know totality of what may be included

– Demonstrates importance of having good, documented reasons for

termination

• Workers’ Comp Retaliation

– Prohibits terminating employee for making workers’ comp claim

– Damages limited to backpay

23


• Defamation

– Act of termination can carry a defamatory meaning under

current SC law, subject to various privileges

– Importance of handling terminations with utmost discretion

– Punitives available

• Other claims

– Breach of contract / Handbook

– Promissory Estoppel

– Retaliation for Jury Duty / Compliance with a lawful subpoena

– Outrage

24

Offices in All 50 States

www.grsm.com

How to Successfully Handle Your Clients

(Applying the Rules of Professional Conduct)

Susan Taylor Wall

2020

2

South Carolina Rules of Professional Conduct 1.4

Rule 1.4 Communication

A lawyer shall:

1) promptly inform the client of any decision or circumstance with

respect to which the client’s informed consent, as defined in

Rule 1.0(f), is required by these Rules;

2) reasonably consult with the client about the means by which

the client’s objectives are to be accomplished;

3) keep the client reasonably informed about the status of the

matter;

4) promptly comply with reasonable requests for information; and

5) consult with the client about any relevant limitation on the

lawyer’s conduct when the lawyer knows that the client expects

assistance not permitted by the Rules of Professional Conduct or

other law.

3

South Carolina Rules of Professional Conduct 1.4

Rule 1.4 Communication (continued)

(b) A lawyer shall explain a matter to the extent reasonably

necessary to permit the client to make informed decisions

regarding the representation.

4

Communication Starts with a Clear Engagement Letter/Fee Agreement

• Define the client (who is and is not the client, i.e., the business, not the

principals)

• Define the scope of services – be specific

• Set out the hourly rate or contingency fee percent

» expenses are the responsibility of the client (must be reasonable)

• Ask the client to sign the Engagement Agreement

» avoid later misunderstanding – may lead to grievance or

malpractice lawsuit

5

Defining the Client: R. 1.13

Who is the client?

• Representing an Entity

− acts “through its duly authorized constituents”

• Clearly delineate that you do not represent:

partners of partnership

individual joint venturers in joint venture

shareholders in corporation

− (thereafter, be careful not to take sides: one individual or

group against the other)

• Dual representation can arise in context of closely held entities

− be cautious

− be clear in your written communication

6

HANDOUTS

✓Sample Legal Services Agreement

(hourly fee)

✓Sample Contingency Legal Services Agreement

(percentage of recovery)

✓Sample Joint Representation Agreement

7

Always Address:

➢Description of Services

➢ (not to broad)

➢Fees, including when billings will issue

➢Expenses

➢Discharge/Withdrawal

➢Client document handling

No Guarantee of Outcome

8

Update Fee Agreement as Necessary

• Modification of Fee Agreement is subject to limitations:

» Must be reasonable.

» Communicated to and accepted by client.

• Do not unreasonably underestimate fees.

» Why? Unfairly places client at risk of having to negotiate for

more services mid-stream.

9

What is a Reasonable Fee?

• R. 1.5(a) prohibits excessive fee and expenses.

» sets forth 8 factors to determine reasonableness of fee.

• An excessive fee will subject an attorney to discipline, including

disbarment in egregious cases.

In re Archer, 398 SC 145 (2012)

• Safeguards:

» keep contemporaneous hourly records

» (or hourly bills – not lump sum)

10

What to do if Fee Dispute Arises?

R. 1.5

• Your Fee Agreement may include mediation or arbitration provision

However, consider enforceability of arbitration clauses under SC

Code Ann. § 15-48-10(b)(3)

• Resolution of Fee Dispute Board may be invoked by client

(decision may be appealed to circuit court but not beyond)

Board may also arbitrate disputes among lawyers over division of

fees

(less than $50,000)

11

Avoid Fee and Billing Disputes

• Stay within parameters discussed with client

• Never allow AR to accumulate without a plan

• Never let an invoice be your only contact with client

client should never have to learn the status of a file by

reviewing an invoice

• Lawyer should follow up if bill is not getting paid

• Proactively discuss with client any big ticket expense items

12

Managing Client Expectations

COMMUNICATE clearly and often:

» Plan

» Risks

» likely outcomes

• possible loss

• time, expense and effort to forge a positive outcome

» update through written information to client

13

Be Courteous to Your Clients

✓Return calls promptly

✓Respond to emails promptly

but write carefully

re-read before sending

✓Provide alternate contact when out of office

✓BE KIND

✓BE CONSIDERATE

✓BE PROFESSIONAL

14

Document Your Client’s Acceptance/Rejection Understanding of Advice

• Confirming letters/emails

• Detailed billing statements

15

If Matter Proceeds to Trial

• Meet with client and document your discussion

➢ Procedure

➢ judge and jury will make all decisions

➢ witnesses may surprise

➢ evidence may be excluded

➢ jury may be disinclined to believe/award

• No guarantees!

• Do not oversell the case!

16

R. 1.16 – Terminating Representation

• Attorney must withdraw when client demands that attorney

engage in illegal conduct or actions that violate RPC.

• A client can discharge you without cause (not absolute if client

has diminished capacity).

• If withdraw or discharged; obtain permission of tribunal if in

midst of litigation. (See R. 1.14)

• if client refuses to abide by terms of representation agreement,

including payment of fees, you may withdraw only if your

withdrawal can be accomplished without material adverse effect

on interests of the client. (See R. 1.16)

• Send Disengagement/Termination Letter

(See Samples)

17

What if you are TerminatedBefore the Case is Ended?

• S.C. Supreme Court has said

If terminated without cause, compensation may be

appropriate.

Public Service Auth. vs. Weeks, (201 SC 199)

• Not clear what is the measure of compensation:

» hourly fee x hours spent

» quantum meruit

(Ethics Adv. Op. 02-08)

• Consider referencing in Representation/Fee Agreement

18

Always Send Closing (Ending) Letter

✓ Inform client that work has now ceased

✓ “Current” client is now “former” client

✓Reiterate document retention policy

✓ If withdraw or terminated, inform of any time constraints

• (i.e., court has set deadline for new counsel)

• (i.e., S/L may affect rights)

• See Sample

19

Communicate in Writing if You Will NOT Accept the Case/Matter

✓Do not delay

✓Do not express any opinions

✓Recommend an immediate second opinion with lawyer of client’s

choosing

• (if recommending names, give at least 2)

✓There may be time constraints (S/L)

20

Avoid the Surprise that Someone is Now Claiming to be a Client!

• Do not solicit confidential information on-line before a completed

conflicts check

• Watch social chatter; do not provide legal advice

• Be cautious about referrals

• Beware of potential client with:

» financial responsibility issues

» questionable social media presence

» multiple previous attorneys

» multiple previous lawsuits

21

Communicate, Communicate, Communicate!

➢Communicate with clarity

➢Confirm the plan, the risks, and

likely outcomes

➢Confirm any rejected plan and

consequences

➢Repeatedly check for client’s

understanding

22

What is the Number One Reason for Bar Grievances?

Neglect

(failure to regularly

communicate)Remind yourself: Whose case/matter is this?

Acting for the benefit of your client

23

Recent Ethics Opinions - SC Supreme Court

Disbarred; Definite Suspension

• Reporting/Communication/Honesty:

– Failing to obtain written confirmation from client as to settlement

– Failing to clearly / honestly explain status of matter

– Failing to promptly report / disburse settlement funds

• Internal Safeguards/Deadlines:

– Failing to file Summons and Complaint timely

– Failing to effectuate proper service timely

– Failing to calendar due dates (understanding and applying statute of

limitations

• To Avoid Ethics Complaint:

– Clear, honest and frequent communication with client

– Clear, confirmatory writings with client

– Adhering to the law and court orders

24

Recent Cases from SC Supreme Court

• See:

1) In re: Stockholm

➢ Attorney must act with diligence and promptness in representing

client;

➢ Attorney fees must be reasonable and communicated to client;

➢ Client must give informed consent on key matters; and

➢ Attorney must keep client reasonably informed.

2) In re: Jones

➢ Attorney must promptly communicate with client;

➢ Attorney must safeguard client funds; and

➢ Attorney fees and costs (expenses) must be reasonable.

25

Recent Cases from SC Supreme CourtCont.

3) In re: Fitzharris

➢ Attorney must withdraw when lawyer’s mental or physical condition

materially impairs his/her ability for effective representation; and

➢ Attorney shall not settle potential claim for malpractice with

unrepresented client unless client is advised in writing of desirability

of seeking independent legal counsel and is given reasonable time to

do so.

26

CONCLUSION

Communicate

✓ Clearly

✓ Timely

✓Often

Put your client’s interests first

Review often – and apply –

SC Rules of Professional Conduct

27

Be especially vigilant when handling:

1. Personal Injury

2. Real Estate

3. Workers’ Comp

4. Family Law

5. T&E

Most claims for malpractice stem from these 5 areas of practice.

www.grsm.com

SAMPLE LEGAL SERVICES AGREEMENT

YOUR FIRM NAME (“Firm”) and [INSERT CLIENT NAME], (“Client”) agree that

Firm will provide legal services to Client as set forth below.

1. SCOPE OF LEGAL SERVICES. The legal services to be provided by Firm pursuant

to this Legal Services Agreement (“Agreement”) to Client are as follows: [INSERT DESCRIPTION OF SERVICES]. No other legal services will be provided to Client unless

Firm agrees to do so in writing. If additional legal services are provided, the terms of this

Agreement shall continue in full force and effect as to such services unless a subsequent legal

services agreement is entered into that expressly supersedes this Agreement.

2. RESPONSIBILITIES OF ATTORNEY AND CLIENT. Attorney will perform the

legal services called for under this Agreement, keep Client informed of progress and

developments, and respond promptly to Client’s inquiries and communications. Client will be

truthful, cooperate with Attorney, attend all meetings, arbitrations, mediations or court events as

requested, provide necessary declarations, promptly pay all fees and costs, and keep Attorney

informed of client’s whereabouts. Client has a duty to read all documents provided by Attorney.

3. ENGAGEMENT FEE WAIVED. Firm is not requesting payment of an advance

engagement fee against anticipated legal services.

[OR]

4. ENGAGEMENT FEE. An advance engagement fee in the amount of [INSERT DOLLAR AMOUNT] is to be paid by Client before representation commences and any legal

services are to be provided, and no later than [INSERT DUE DATE]. The engagement fee will

be deposited in a trust account and will be maintained as a non-interest bearing minimum credit

balance at a banking institution in the State of South Carolina. This minimum credit balance is

not the total fee, nor an estimate of what the total fee will be, and no promises have been made

by Firm that the total fee will not exceed a particular amount. This minimum credit balance is

required to be maintained on Client’s account at all times. Firm may choose to apply monies

from the minimum credit balance to any invoiced balance that is due and payable in which case

Client will be requested to pay the sum required to restore the minimum credit balance. Client

agrees that Firm is authorized to transfer funds from the trust account to Firm’s general account

at any time for the payment of fees and costs incurred under this Agreement, including, but not

limited to, payment of fees and costs due and payable upon termination of representation of

Client or a particular matter for Client.

5. FEES AND BILLING. Firm time will be accounted for in tenths of an hour and fees are

calculated by applying hourly rates assigned to Firm attorneys and other staff. Rates may also be

subject to Court approval pursuant to applicable statutory restrictions. Firm may, from time to

time and in its sole discretion, utilize contract, outsource, and/or temporary service providers in

connection with performing certain of the tasks to be rendered in connection with this

engagement at the rates listed below. Fees and expenses will be billed monthly and are due upon

receipt. Any bills that are not paid within 45 days from our mailing may be subject to a late

charge equal to the lesser of 1% per month on the unpaid balance or the maximum rate permitted

by law. The current range of rates is set forth below. The invoices provided to Client will reflect

all Firm personnel who have billed time related to the representation of Client and their rates.

Partner/Counsel $______

Associate $______

Paraprofessional $______

6. EXPENSES. Client is responsible for all expenses incurred by Firm in this

representation. Certain expenses may include a standard overhead component when billed and

are set forth below. Firm will obtain advance payment for expenses from Client, subject to

exceptional circumstances when Firm in its discretion may determine to advance a cost. If Firm

advances an expense, Client will remain liable for the expense, and Client agrees to reimburse

Firm regardless of the outcome of this matter. Examples of expenses charged at cost include, but

are not limited to, air travel, meals, experts, consultants, investigators, filing fees, court reporters,

transcripts, postage, facsimiles, phone charges, overnight packages and couriers.

7. FIRM’S LIEN. Firm will have a lien for Firm’s fees and advanced expenses with

respect to the matters which are the subject of this Agreement and on all proceeds of any

recovery obtained whether by settlement, arbitration award, or court judgment or on any property

obtained. This generally means that Firm has an ownership interest in any recovery by Client to

the extent of Firm’s unpaid fees and expenses. Client acknowledges that it is aware of the right to

seek the advice of independent counsel as to this provision and has been provided a reasonable

opportunity to do so.

8. REPRESENTATION OF ADVERSE INTERESTS. Client is informed that the South

Carolina Rules of Professional Conduct requires that before an attorney may begin or continue to

represent the client when the attorney has or had a relationship with another party interested in

the subject matter of the attorney’s proposed representation of the client, that the attorney fully

disclose to the client the relevant circumstances and counsel the client on the actual and

reasonably foreseeable adverse consequences to the client. Client is further informed that the

Rules require that, before an attorney may represent a party who has, in a separate matter, an

interest adverse to that of Attorney’s client in the separate matter, Attorney obtain the informed

written consent of both parties. Attorney is not aware of any relationship it has with any other

party interested in the subject matter of Attorney’s services for Client under this Agreement or of

any separate matter in which Client has an interest adverse to that of any client of Attorney.

9. FIRM AUTHORITY. Client hereby gives Firm the power and authority to execute any

and all pleadings, claims, contracts, drafts, checks, dismissals, deposits, orders and other papers

and to receive in the name and stead of the undersigned any monies or other things of value

which may properly be payable or deliverable to the undersigned on account of any judgment

recovered or settlement entered into in connection with the Client’s claim.

10. SETTLEMENT CONSENT. No settlement shall be made without the written,

transcribed or electronically communicated consent of client.

11. DISCHARGE OF FIRM. Client may discharge Firm at any time by written notice

effective when received within two days of delivery to Firm. Unless specifically agreed by Firm

and Client, Firm will provide no further services and advance no further expenses on Client’s

behalf after receipt of the notice unless required to do so in order to protect Client’s interests. If

Firm is Client’s attorney of record in any proceeding, Client will execute and return a

substitution-of-attorney form executed by Client immediately on its receipt from Firm.

Notwithstanding Firm’s discharge, Client will be obligated to pay Firm’s fees per this Agreement

for all services provided and to reimburse Firm for all expenses incurred or advanced by Firm

before the discharge, incurred in effectuating the discharge and as necessary to protect the

interests of the Client.

12. WITHDRAWAL OF FIRM. Firm may withdraw at any time as permitted under the

South Carolina Rules of Professional Conduct. The circumstances under which the Rules permit

such withdrawal include, but are not limited to, the Firm concluding that representation will

result in violation of the Rules of Professional Conduct or other law; the physical or mental

condition of the attorney handling this matter on behalf of Firm materially impacts Firm’s

ability to represent Client; Firm is discharged; Client persists in a course of action involving

Firm’s services that the Firm reasonably believes is criminal or fraudulent; Client has used

Firm’s services to perpetrate a crime or fraud; Client insists upon taking action that the Firm

considers repugnant or with which Firm has a fundamental disagreement; Client fails

substantially to fulfill an obligation to Firm; or the representation will result in an unreasonable

financial burden on the lawyer or has been rendered unreasonably difficult by Client. . Firm

may be required or elect to withdraw if a conflict of interest develops between Client, any other

persons and entities, and/or Firm, including any conflict between the interests of Client and Firm

that is not waived or waivable that adversely affects Firm’s ability to provide the type of

representation it has a duty to, or should, provide to Clients, or if the matter requires an expertise

which Firm does not have and it would not be practicable to develop under the circumstances.

Notwithstanding Firm’s withdrawal, Client is obligated to pay Firm the contractual Firm fees for

all services provided and to reimburse Firm for all expenses incurred or advanced by Firm before

the withdrawal, or in the case of an adjudicatory proceeding, through the time when an order

allowing the withdrawal is obtained.

13. MAINTENANCE OF CLIENT DOCUMENTS. Firm may maintain documents

related to the representation of Client in an electronically stored format only. Once such

documents are scanned and stored electronically, the paper form of the document may be

destroyed, unless otherwise agreed with Client. Firm, in its discretion, may maintain certain

documents in other than electronic form if necessary.

14. RELEASE OF CLIENT’S DOCUMENTS. Once the services under this Agreement,

have been completed, Firm will deliver to Client upon request, all existing hard copy documents

related to representation of Client. The documents will be sent to the Client address listed below,

to the attention of the Client signatory. If Client also requests delivery of documents related to

representation of Client existing in electronic form, Firm will provide them to Client via a disk or

the internet. The documents to be returned to Client include items reasonably necessary for

Client’s representation, excepting attorney work product or those documents which are otherwise

privileged from disclosure. Firm retains the right to keep copies of all Client documents. If

Client declines delivery of the documents, does not respond to related communications from

Firm within 30 days or if Client cannot be located upon reasonable investigation, Firm will have

no further obligation to retain the documents except as may be applicable under the Rules of

Professional Conduct.

15. MEDIATION OF ALL ISSUES. [In the event of any dispute relating to this

Agreement, the relationship between Firm and Client, or the services performed [including but

not limited to disputes regarding Firm’s fees or expenses and those involving claims of

negligence, breach of fiduciary duty or contract, fraud or any claims based upon a written law]

Firm and Client agree to first (and before initiating any legal action or arbitration) meet and

confer within 30 days’ notice by one party to another in an effort to negotiate a resolution of the

dispute.]

If the dispute is not resolved through negotiation, Firm and/or Client shall, and before

initiating any legal action, within 30 days of failed negotiations, request that the American

Arbitration Association (AAA) choose a neutral mediator to conduct an in person mediation in

the Firm’s office from which the services were performed with all involved parties to take place

within 30 days of contact with AAA. Firm and Client agree to share equally in the cost of the

mediation. If the dispute is not resolved after mediation, then the dispute may be resolved in the

court system, with venue of such dispute to be the location of the Firm office where the majority

of the Firm’s services were performed.

If a dispute arises between Firm and Client regarding Firm’s fees or expenses under this

Agreement, and the amount at issue is less than $50,000, Client has the right to request

restitution through the Resolution of Fee Disputes Board. (Rule 446, SCACR) in a timely

fashion as per the Rule. If Client does not timely elect to proceed under the State Bar fee

procedures, any dispute over Firm’s fees or expenses may be resolved through initiation of a

legal action.

16. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the parties.

No other agreement, statement, or promise made on or before the effective date of this

Agreement will be binding on the parties.

17. SEVERABILITY IN EVENT OF PARTIAL INVALIDITY. If any provision of this

Agreement is held by a court or other tribunal of competent Jurisdiction, in whole or in part, to

be unenforceable for any reason, the remainder of that provision and of the entire agreement will

be severable and remain in effect.

18. MODIFICATION BY SUBSEQUENT AGREEMENT. This Agreement may be

modified by subsequent agreement of the parties but only if in writing.

19. NON-ASSIGNABILITY. Client agrees not to assign, sell or otherwise transfer any

rights to pursue any type of claim against Firm including, but not limited to, professional

negligence, breach of contract or breach of any duties owed to Client and that any such

assignment is void and without effect.

20. APPLICABLE LAW. The laws of the State of South Carolina shall govern the

construction and interpretation of this Agreement, excluding its conflicts of law provisions that

would result in the application of the laws of any jurisdiction other than South Carolina

21. NO GUARANTEE OF OUTCOME. Firm does not guarantee that any specific result

or outcome will occur in this matter, including the amount of fees and expenses incurred during

the course of the representation. The parties acknowledge that no representation has been made

to the undersigned or their representatives concerning the outcome or probable outcome of the

subject matter this Agreement.

22. POSSIBLE PAYMENT BY CLIENT OF ADVERSE PARTIES’ FEES AND COSTS. Client acknowledges that in certain circumstances Client may be obligated to pay an

adverse party or parties' fees and/or costs incurred depending on the outcome of the legal

proceedings which are the subject of this Agreement. Such payment is the sole responsibility of

Client and not of Firm.

23. OPPORTUNITY TO CONSULT WITH OTHER COUNSEL. You may wish to

consult with another legal counsel about the content and effect of this Agreement before signing

below. Your signature will certify that you have either met with another attorney before signing

or have chosen not to do so, but you understand you have the right and have had the opportunity

to consult with another legal counsel.

24. EFFECTIVE DATE OF AGREEMENT. The effective date of this Agreement will be

the latest date of signing by Client or signing by a partner of Firm and its terms shall be

retroactive to the date Firm first performed services for Client which are the subject of this

Agreement. Firm has no obligation to provide any services until this agreement has been fully

executed by Firm and Client.

25. CONFIRMATION OF UNDERSTANDING. It is acknowledged by the signature

below that Client has read this entire Agreement, understands all of its terms and that any and all

questions Client has about the Agreement have been answered adequately.

The foregoing is agreed to by:

Dated:

CLIENT

Name:

Title:

Address:

Phone Number:

E-mail:

Dated:

FIRM

Name:

Title:

Address:

Phone Number:

E-mail:

SAMPLE CONTINGENCY LEGAL SERVICES AGREEMENT

YOUR FIRM NAME (“Firm”) and [INSERT CLIENT NAME], (“Client”) hereby

agree that Firm will provide legal services to Client on the terms set forth below.

1. CONDITIONS. This Agreement will not take effect, and Firm will have no obligation

to provide legal services, until Client returns a dated and signed copy of this Agreement to Firm.

2. SCOPE OF LEGAL SERVICES. The legal services to be provided by Firm to Client

are as follows: [INSERT DESCRIPTION OF SERVICES]. No other legal services will be

provided to Client unless Firm agrees to do so in writing. If additional legal services are

provided, the terms of this Agreement shall continue in full force and effect as to such services

unless a subsequent legal services agreement is entered into that expressly supersedes this

Agreement.

3. RESPONSIBILITIES OF ATTORNEY AND CLIENT. Attorney will perform the

legal services called for under this Agreement, keep Client informed of progress and

developments, and respond promptly to Client’s inquiries and communications. Client will be

truthful, cooperate with Attorney, attend all meetings, arbitrations, mediations or court events as

requested, provide necessary declarations, promptly pay all fees and costs, and keep Attorney

informed of client’s whereabouts. Client has a duty to read all documents provided by Attorney.

4. CONTINGENCY FEE ARRANGEMENT. Client agrees to pay to Firm for

professional services a fee equal to _____ percent of any and all amounts recovered in such

matter by way of settlement, judgment or otherwise. Firm shall be entitled to this fee after

payment to Firm of all related costs and expenses and before disbursement to Client. The

foregoing fee refers to services in the trial or appellate courts or arbitration or administrative

proceedings. If no recovery is obtained, Firm will receive no fee for its services, nor

reimbursement for their costs subject to the provisions hereinafter. These fee arrangements are

negotiable and not set by law. By signing this Agreement, Client accepts these terms and agrees

that they are reasonable. If the recovery consists of payments to be made over a period of time,

or other property not entirely cash or cash-equivalent, the contingency fee shall be based on the

present cash value of the recovery as determined by generally-recognized accounting and

appraisal standards.

The contingency fee shall be paid out of the first funds or property received by Client.

Client represents that Client has not given a security interest or otherwise assigned

(voluntarily or involuntarily) any interest in the claim which is the subject of this Agreement.

5. COSTS AND EXPENSES. Firm may, in its discretion, associate counsel of its choice,

but payment of such counsel’s fee will be the sole responsibility of Firm. Firm will advance any

costs which will be charged at cost and typically include, but are not limited to, travel, meals,

experts, consultants, investigators, filing fees, court reporters, transcripts, postage, facsimiles,

phone charges, overnight packages and couriers. The current schedule of commonly incurred

expenses charged at certain rates is set forth below and is reconsidered annually:

Photocopying

Facsimile

Mileage

Computer legal research

Telephone

Postage

These costs will be paid directly out of any recovery in the case, and should there be no

recovery, Client will not be obligated for these costs advanced in the prosecution of this claim

except as stated hereinafter. If Client wishes to have a right of prior approval of expenses above

a certain amount, that must be made known to Firm by Client and negotiated and included in this

Agreement.

For personal injury cases it is understood that related costs including but not limited to

medical care and treatment are the sole obligation of the Client, for which the undersigned Client

is responsible either independently or out of Client’s share of any recovery, as the case may be,

and do not constitute costs under this Agreement nor charges against Firm in any way.

Additionally, services and costs not covered by this Agreement unless separately and explicitly

agreed to in writing include defense of any lawsuit or cross-complaint filed against Client in

connection with the above matter.

6. REPRESENTATION OF ADVERSE INTERESTS. Client is informed that the South

Carolina Rules of Professional Conduct requires that before an attorney may begin or continue to

represent the client when the attorney has or had a relationship with another party interested in

the subject matter of the attorney’s proposed representation of the client, that the attorney fully

disclose to the client the relevant circumstances and counsel the client on the actual and

reasonably foreseeable adverse consequences to the client. Client is further informed that the

Rules require that, before an attorney may represent a party who has, in a separate matter, an

interest adverse to that of Attorney’s client in the separate matter, Attorney obtain the informed

written consent of both parties. Attorney is not aware of any relationship it has with any other

party interested in the subject matter of Attorney’s services for Client under this Agreement or of

any separate matter in which Client has an interest adverse to that of any client of Attorney.

7. FIRM AUTHORITY. Client hereby gives Firm the power and authority to execute any

and all pleadings, claims, contracts, drafts, checks, dismissals, deposits, orders and other papers

and to receive in the name and stead of the undersigned any monies or other things of value

which may properly be payable or deliverable to the undersigned on account of any judgment

recovered or settlement entered into in connection with the Client’s claim.

8. CLIENT FUNDS. South Carolina Rule of Professional Conduct 1.15 requires that any

funds received or held for the benefit of Client, including advances for costs and expenses, be

deposited in one or more identifiable bank accounts labeled “Trust Account,” or with words of

similar import, in the State of South Carolina (or elsewhere with Client’s or a third party’s

consent). Firm shall promptly notify Client of the receipt of Client funds, securities, and or other

properties. Firm shall maintain complete records of all funds coming into the possession of the

Firm and render appropriate accounts to Client regarding them. Firm shall promptly pay or

deliver, as requested by Client, any funds, securities, or other properties in the possession of

Firm that the Client is entitled to receive. Funds deposited in a trust account will be maintained

as a non-interest bearing minimum credit balance. The trust account may be with a banking

institution located in another state. Client agrees that Firm is authorized to transfer funds from

the trust account to Firm’s general account at any time for the payment of fees and costs incurred

under this Agreement, including, but not limited to, payment of fees and costs due and payable

upon termination of representation of Client or a particular matter for Client.

9. FEE AWARDS. It is understood that any sanctions or fee awards to Firm and/or Client

shall belong exclusively to Firm. But if the sanctions award includes a cost item (such as the

filing fee for making a motion), the amount thereof shall be credited to Client's costs account

when received by Firm.

10. SETTLEMENT CONSENT. No settlement shall be made without the written,

transcribed or electronically communicated consent of the Client. If an offer of settlement is

deemed appropriate by the Firm but declined by the Client, and thereafter no recovery is awarded

to Client, expenses incurred as set forth above shall be the responsibility of Client, unless Firm

agrees in writing to waive such recovery from Client.

11. FIRMS’ LIEN. Firm will have a lien for Firm’s fees recoverable under this Agreement

and costs advanced with respect to the claim and on all proceeds of any recovery obtained

whether by settlement, arbitration award, or court judgment or on any property obtained,

including by patent, trademark, copyright, rescission, specific performance or other means. This

generally means that Firm has an ownership interest in any recovery by Client to the extent of

Firm’s unpaid fees and costs. Client acknowledges that it may seek the advice of an independent

lawyer of the Client’s choice as to this, or any other, issue and that Client has been given a

reasonable opportunity to seek that advice.

12. DISCHARGE OF FIRM. Client may discharge Firm at any time by written notice

effective when received within two days of delivery to Firm. Unless specifically agreed by Firm

and Client, Firm will provide no further services and advance no further costs on Client’s behalf

after receipt of the notice unless required to do so in order to protect Client’s interests. If Firm is

Client’s Firm of record in any proceeding, Client will execute and return a substitution-of-Firm

form immediately on its receipt from Firm. Notwithstanding Firm’s discharge, Client will be

obligated to pay Firm the value of its services provided and to reimburse Firm for all costs

incurred or advanced by Firm, before the discharge, incurred in effectuating the discharge and as

necessary to protect the interests of the Client. The value of Firm’s services shall be calculated

by the Firm’s pro rata percentage share of any financial settlement or recovery by Client based

on its contribution to same or based on the value of it services based on the Firm’s customary

hourly rates for this type of legal work for the legal services provided by its professionals,

whichever is greater.

13. WITHDRAWAL OF FIRM. Firm may withdraw at any time as permitted under the

South Carolina Rules of Professional Conduct The circumstances under which the Rules permit

such withdrawal include, but are not limited to, the Firm concluding that representation will

result in violation of the Rules of Professional Conduct or other law; the physical or mental

condition of the attorney handling this matter on behalf of Firm materially impacts Firm’s

ability to represent Client; Firm is discharged; Client persists in a course of action involving

Firm’s services that the Firm reasonably believes is criminal or fraudulent; Client has used

Firm’s services to perpetrate a crime or fraud; Client insists upon taking action that the Firm

considers repugnant or with which Firm has a fundamental disagreement; Client fails

substantially to fulfill an obligation to Firm; or the representation will result in an unreasonable

financial burden on the lawyer or has been rendered unreasonably difficult by Client. Firm may

be required or elect to withdraw if a conflict of interest develops between Client, any other

persons and entities and/or Firm, including any conflict between the interests of Client and Firm

that is not waived or waivable which adversely affects Firm’s ability to provide the adequate

representation, or if the matter requires an expertise which Firm does not have and it would not

be practicable to try to develop under the circumstances. Notwithstanding Firm’s withdrawal,

Client will be obligated to pay Firm the value of its services provided and to reimburse Firm for

all costs incurred or advanced by Firm, before the discharge, incurred in effectuating the

discharge and as necessary to protect the interests of the Client. The value of the firm’s services

shall be calculated by the Firm’s pro rata percentage share of any financial settlement or

recovery by Client based on its contribution to same or based on the value of it services based on

the Firm’s customary hourly rates for this type of legal work for the legal services provided by

its professionals, whichever is greater.

14. MEDIATION OF ALL ISSUES. [In the event of any dispute relating to this

Agreement, the relationship between Firm and Client, or the services performed (including but

not limited to disputes regarding Firm’s fees or expenses and those involving claims of

negligence, breach of fiduciary duty or contract, fraud or any claims based upon a written law)

Firm and Client agree to first (and before initiating any legal action) meet and confer within 30

days’ notice by one party to another in an effort to negotiate a resolution of the dispute.]

If the dispute is not resolved through negotiation, Firm and/or Client shall, and before

initiating any legal action, within 30 days of failed negotiations, request that the American

Arbitration Association (AAA) (or other body) choose a neutral mediator to conduct an in person

mediation in the Firm’s office from which the services were performed with all involved parties

to take place within 30 days of contact with AAA. Firm and Client agree to share equally in the

cost of the mediation. If the dispute is not resolved after mediation, then the dispute may be

resolved in the court system, with venue of such dispute to be the location of the Firm office

where the majority of the Firm’s services were performed.

15. ARBITRATION OF FEE AND COSTS DISPUTES. If a dispute arises between Firm

and Client regarding Firm’s fees or expenses under this Agreement, Client has the right to

request resolution pursuant to Rule 416, SCACR, subject to the Rule’s amount and timing. If

Client does not timely elect to proceed under this procedure, any dispute over Firm’s fees or

expenses may be resolved through legal action.

16. MAINTENANCE OF CLIENT DOCUMENTS. Firm may maintain documents

related to the representation of Client in an electronically stored format only. Once such

documents are scanned and stored electronically, the paper form of the document may be

destroyed, unless other arrangements are made with Client. Firm, in its discretion, may maintain

certain documents in other than electronic form if necessary.

17. RELEASE OF CLIENT’S DOCUMENTS. Once the services under this Agreement,

have been completed, Firm will deliver to Client upon request all existing hard copy documents

related to representation of Client. The documents will be sent to the Client address listed below,

to the attention of the Client signatory. If Client also requests delivery of documents related to

representation of Client existing in electronic form, Firm will provide them to Client via a disk or

the internet. The documents to be returned to Client include items reasonably necessary for

Client’s representation, excepting attorney work product or those documents which are otherwise

privileged from disclosure. Firm retains the right to keep copies of all Client documents. If

Client declines delivery of the documents, does not respond to related communications from

Firm within 30 days or if Client cannot be located upon reasonable investigation, Firm will have

no further obligation to retain the documents and may destroy them in its discretion without

further notice to Client, subject to the Rules of Professional Conduct.

18. NON-ASSIGNABILITY. Client agrees not to assign, sell or otherwise transfer any

rights to pursue any type of claim against Firm including, but not limited to, professional

negligence, breach of contract or breach of any duties owed to Client and that any such

assignment is void and without effect.

19. APPLICABLE LAW. The laws of the State of South Carolina shall govern the

construction and interpretation of this Agreement, excluding its conflicts of law provisions that

would result in the application of the laws of any jurisdiction other than South Carolina.

20. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the parties.

No other agreement, statement, or promise made on or before the effective date of this

Agreement will be binding on the parties.

21. SEVERABILITY IN EVENT OF PARTIAL INVALIDITY. If any provision of this

Agreement is held by a court or other tribunal of competent jurisdiction, in whole or in part, to be

unenforceable for any reason, the remainder of that provision and of the entire agreement will be

severable and remain in effect.

22. MODIFICATION BY SUBSEQUENT AGREEMENT. This Agreement may be

modified by subsequent agreement of the parties only in writing.

23. NO GUARANTEE OF OUTCOME. Firm does not guarantee that any specific result

or outcome will occur in this matter, including the amount of fees and expenses incurred during

the course of the representation. The parties acknowledge that no representation has been made

to the undersigned or their representatives concerning the outcome or probable outcome of the

subject matter this Agreement.

24. POSSIBLE PAYMENT BY CLIENT OF ADVERSE PARTIES’ FEES AND COSTS. Client acknowledges that in certain circumstances Client may be obligated to pay an

adverse party or parties' fees and/or costs incurred depending on the outcome of the legal

proceedings which are the subject of this Agreement. Such payment is the sole responsibility of

Client and not of Firm.

25. EFFECTIVE DATE OF AGREEMENT. The effective date of this Agreement will be

the latest date of signing by Client, or an authorized representative of Client, and signing by a

partner of Firm and its terms shall be retroactive to the date Firm first performed services for

Client which are the subject of this Agreement.

26. OPPORTUNITY TO CONSULT WITH OTHER COUNSEL. You may wish to

consult with another attorney of law firm before signing below. Your signature will certify that

you have either met with another Firm before signing or have chosen not to do so, but yet you

understand and appreciate you have the right and have had the opportunity to consult with

another attorney.

27. CONFIRMATION OF UNDERSTANDING. It is acknowledged by the signature

below that Client has read this entire Agreement, understands all of its terms and that any and all

questions Client has about the Agreement have been answered adequately.

The foregoing is agreed to by:

Dated:

[CLIENT] Name:

Title:

Address:

Phone Number:

E-mail:

Dated:

[FIRM NAME] Name:

Title:

Address:

Phone Number:

E-mail:

8011178/46274251v.1

SAMPLE JOINT REPRESENTATION AGREEMENT

Re:

Dear ___________ and ____________:

This letter is to confirm FIRM’s joint representation of [insert] and [insert] in connection with [Provide a brief description of the scope of the representations, including any limitations on the representation.] (“Matter”). We appreciate the opportunity to work with you.

All fees and expenses incurred for services rendered by FIRM in defending ___________ and ___________ in connection with the Matter will be paid by ___________. [This paragraph is optional: depends on fee arrangement] [Insert specifics on hourly or other fee/cost agreement.]

Each of you agrees not to take a position which is adverse to each other while jointly represented by the Firm. As you are aware, our joint representation of you could represent a conflict of interest since each of you could have claims or take positions against the other. [PROVIDE POSSIBLE EXAMPLES]. Under the South Carolina Rules of Professional Conduct, a law firm may not represent a client if representation of that client will be directly adverse to another client or may be materially limited by the lawyer’s responsibilities to another client unless (i) the firm reasonably believes that such representation would not be adversely affected by its responsibility to the other client and will not adversely affect its relationship with the other client; and (ii) each client consents in writing after consultation. It is our belief that the proposed joint representation of both of you will not, at the present time, adversely affect our representation of you.

We further understand that you have authorized us to freely share all information (including privileged and confidential information) material to such representation with each of you. Specific consent to this sharing of information is a precondition to our joint representation. By signing this agreement, none of you has waived its respective right to assert the attorney-client privilege and neither FIRM nor its attorneys will attempt to preclude you from asserting such privilege against a third party non-client.

In addition, we understand that you have agreed that if we determine for professional reasons that we are no longer able to continue such joint representation, we may continue to represent ___________ in connection with this Matter even if we are no longer able to represent ____________ and even if _______ has shared confidential information with us that potentially may be used to _________’s detriment in this matter. ___________ will not assert a conflict of interest by our continuing to represent ___________ in this Matter or any other matter, such position being waived by ________________.

If at any point in time you believe that our representation is no longer in your best interest, you are free to terminate this relationship at any time subject to the limitations described above. We strongly recommend that you consult with independent legal counsel regarding this agreement and the terms thereof, and we have provided sufficient time for you to do so before

[Date]

Page 2

signing this agreement. Accordingly, by signing this agreement, each of you consents to our joint representation of you in connection with the above identified Matter.

We will proceed as outlined above and should you at any time have any questions, comments or concerns relating to the handling of this Matter, please do not hesitate to contact me. We look forward to working with you.

CONSENT FORM

I consent to the Joint Representation arrangement outlined in this letter. I acknowledge that I

have the right and opportunity to discuss this agreement with independent counsel and that I

have determined that this agreement sets forth the terms under which I wish to proceed.

Date:

Name:

Title:

Date:

Name:

Title:

8011178/47059157v.1

SAMPLE OF DISENGAGEMENT DURING REPRESENTATION LETTER

Dear [Client]:

This will confirm our conversation of [date] in which we agreed to terminate this firm’s

performance of legal services for you [in connection with __________ (specify matter, if

appropriate)].

We caution you that applicable statutes of limitations may be about to expire, and you should

take immediate steps to confer with other counsel to protect any rights which you may have and

which might be lost by you as a result of one or more such statutes.

[If matter is in litigation: The following events and deadlines are scheduled in this matter __ ___.

It is important that you make arrangements to attend to them so that you are not prejudiced.]

In connection with the termination of our services, we will, upon written request, deliver your

file to you or to an attorney designated by you to receive the file. You should advise us promptly

of how you wish to dispose of such matters.

[In connection with the termination of our services for you, all of our outstanding invoices for

fees and disbursements are now due and payable, and we enclose our final invoice for services

rendered and disbursements made on your behalf. We request that you pay promptly the

enclosed statement and those previously submitted to you which remain unpaid.]

NOTE: This form is a suggested model that should be adapted to the particular circumstances.

SAMPLE OF CLOSING LETTER

Dear [Client]:

As you aware, this matter in which we have been representing you has now concluded. [Describe

how it has concluded, for example, settlement, final judgment, transaction closed, etc….].

Since all legal work required for this matter has now been completed, we are closing our file and

removing it from our active accounts. [We will be returning to you any physical, hard copy

documents that you provided related to this matter.] [Consider whether firm wants to keep

electronic copies of returned materials.] We recommend that you keep all information relating to

the matter in a safe place where it can be easily located in the future if needed.

If there are any continuing duties for you to perform in connection with the resolution of this

matter or if subsequent issues arise related to this matter, the firm will not be providing related

legal services for you unless there is a separate written agreement between us to do so.

We have enjoyed working with you and hope that this matter has been completed to your

satisfaction.

NOTE: This form is a suggested model that should be adapted to the particular circumstances.

Protecting and Operating Your Law Office: Insurance, Employment … · 2020-02-11 · Protecting...

Documents

Transcript of Protecting and Operating Your Law Office: Insurance, Employment … · 2020-02-11 · Protecting...