Top Tips for Practicing Law Top Tips for Practicing Law in a Small Firm or Solo in a Small Firm or Solo

PracticePractice

By Patrick J. Olmstead, Jr.By Patrick J. Olmstead, Jr.Hoover Hull LLPHoover Hull LLP

Hon. Jason G. ReyomeHon. Jason G. Reyome

April 19, 2012April 19, 2012

Screening ClientsScreening Clients This is your best chance to avoid This is your best chance to avoid

malpractice suits and grievances.malpractice suits and grievances. Conflict Check before meeting.Conflict Check before meeting. Make sure you can comfortably handle the Make sure you can comfortably handle the

representation (both the expertise and representation (both the expertise and time) and the client suits you.time) and the client suits you.

Watch out for: Watch out for: Unrealistic expectations;Unrealistic expectations; Too emotionally involved; Too emotionally involved; Nothing else to do but monitor the litigation;Nothing else to do but monitor the litigation; Overly involved;Overly involved; Has already had one attorney (this should be a red flag);Has already had one attorney (this should be a red flag); Prior history as a litigant.Prior history as a litigant.

Duties to Prospective ClientsDuties to Prospective Clients Duty to maintain the confidential nature of Duty to maintain the confidential nature of

the communications shared by the the communications shared by the prospective clients.prospective clients.

In re AnonymousIn re Anonymous, 932 N.E.2d 671 (Ind. , 932 N.E.2d 671 (Ind. 2010) (violated 1.9(c)(2) by disclosing that 2010) (violated 1.9(c)(2) by disclosing that client was getting divorced) (no exception client was getting divorced) (no exception for public information or discussing with for public information or discussing with others). Rejected argument that she was others). Rejected argument that she was not prospective client, where lawyer was not prospective client, where lawyer was asked for and gave a referral. asked for and gave a referral.

Rule 1.18(d)(2) Safe Harbor.Rule 1.18(d)(2) Safe Harbor. Independently verify the facts – (proper Independently verify the facts – (proper

parties, statute of limitations issues, etc.). parties, statute of limitations issues, etc.).

Evaluation LetterEvaluation Letter

Send a letter informing the client you Send a letter informing the client you are assessing whether to accept the are assessing whether to accept the representation.representation.

Until you accept the case, Until you accept the case, in writingin writing make it clear that no attorney-client make it clear that no attorney-client relationship has been formed and relationship has been formed and you do not represent them.you do not represent them.

Ask them to waive all conflicts in Ask them to waive all conflicts in return for your evaluation and make return for your evaluation and make them sign it.them sign it.

Objective EvaluationObjective Evaluation

““About half the practice of a decent About half the practice of a decent lawyer consists in telling would-be lawyer consists in telling would-be clients that they are damned fools clients that they are damned fools and should stop.” and should stop.” Hill v. Norfolk & Hill v. Norfolk & Western Rwy. CoWestern Rwy. Co.., 814 F.2d 1192, , 814 F.2d 1192, 1202 (7th Cir. 1987) (imposing 1202 (7th Cir. 1987) (imposing sanctions for frivolous litigation).sanctions for frivolous litigation).

Letter Declining RepresentationLetter Declining Representation

An important tool for defending An important tool for defending malpractice suits and grievances is a malpractice suits and grievances is a letter declining representation. letter declining representation.

These malpractice lawsuits fall under These malpractice lawsuits fall under the category of “no good deed goes the category of “no good deed goes unpunished.” unpunished.”

Declination Letter LanguageDeclination Letter Language As we discussed in our telephone conversation, As we discussed in our telephone conversation,

no attorney-client relationship was formed.no attorney-client relationship was formed. No duty was owed to perform any research or No duty was owed to perform any research or

to do any work.to do any work. The confidential nature of the discussion will be The confidential nature of the discussion will be

maintained.maintained. There are certain notice requirements and There are certain notice requirements and

statute of limitations issues that may affect the statute of limitations issues that may affect the viability of your claim, and you should secure viability of your claim, and you should secure legal counsel. (Do legal counsel. (Do notnot provide expiration provide expiration date.)date.)

Avoid such statements as, “if you have any Avoid such statements as, “if you have any questions, please call me.”questions, please call me.”

CompetenceCompetence

An attorney must be competent in An attorney must be competent in subject matter of representation to subject matter of representation to accept the case. Rule 1.1.accept the case. Rule 1.1.

Only one of three options:Only one of three options: Be competent;Be competent; Become competent (through research); Become competent (through research); Hire competent co-counsel.Hire competent co-counsel. You cannot contract a lower standard of You cannot contract a lower standard of

care.care.

Assisting the Unauthorized Practice Assisting the Unauthorized Practice of Lawof Law

In the Matter of AnonymousIn the Matter of Anonymous, No. , No. 10S00-1006-DI-288 (Ind. Sept. 3, 10S00-1006-DI-288 (Ind. Sept. 3, 2010) (private reprimand) (Indiana 2010) (private reprimand) (Indiana attorneys serving as local counsel for attorneys serving as local counsel for out-of-state attorneys are hereby out-of-state attorneys are hereby advised of the importance of their advised of the importance of their duty to ensure complete and timely duty to ensure complete and timely compliance with all the requirements compliance with all the requirements of ADR 3(2) [regarding of ADR 3(2) [regarding pro hac vice pro hac vice admission].”). admission].”).

Clarify the Client and ConflictsClarify the Client and Conflicts

Who is your client? Make that clear!Who is your client? Make that clear! Rule 1.18.Rule 1.18. Joint representation can create a conflict Joint representation can create a conflict

of interest. ABA Formal Opinion 06-438, of interest. ABA Formal Opinion 06-438, Feb. 10, 2006.Feb. 10, 2006.

Personal interests? Personal interests? Positional conflicts? Positional conflicts? Draft Conflict Waivers and recommend Draft Conflict Waivers and recommend

independent counsel to review the conflict independent counsel to review the conflict waiver.waiver.

Engagement LettersEngagement Letters

You must draft a careful and proper You must draft a careful and proper engagement letter. Very important engagement letter. Very important tool for defending malpractice tool for defending malpractice complaints and grievances.complaints and grievances.

Written fee agreements are Written fee agreements are increasingly recommended for all increasingly recommended for all cases. cases.

Scope of EngagementScope of Engagement

Carefully describe the scope of your Carefully describe the scope of your services to limit your responsibility. RPC services to limit your responsibility. RPC 1.1, 1.2. 1.1, 1.2. Flatow v. IngallsFlatow v. Ingalls, 932 N.E.2d 726 , 932 N.E.2d 726 (Ind. Ct. App. 2010), (Ind. Ct. App. 2010), trans. denied.trans. denied.

What matter does the engagement cover?What matter does the engagement cover? Scope of services in the matter?Scope of services in the matter? What are you What are you notnot doing? doing? (Ex: Corporate formation only. Separate (Ex: Corporate formation only. Separate

engagement for further legal work.)engagement for further legal work.)

Diligence and Adequate Diligence and Adequate CommunicationCommunication

Most common disciplinary complaints:Most common disciplinary complaints: Rule 1.3 regarding diligence and promptnessRule 1.3 regarding diligence and promptness 1.4(a) keeping client adequately informed1.4(a) keeping client adequately informed 1.4(b) explaining matter sufficiently to client1.4(b) explaining matter sufficiently to client

Do not accept cases your office cannot handle.Do not accept cases your office cannot handle. Do not procrastinate, use your calendar.Do not procrastinate, use your calendar. Keep copies of all communications (includes notes Keep copies of all communications (includes notes

of voicemails from and phone conferences with of voicemails from and phone conferences with clients).clients).

Establish guidelines for communication – e-mail, Establish guidelines for communication – e-mail, letter? How often? How quickly will you return letter? How often? How quickly will you return phone calls?phone calls?

Keep client reasonably and objectively informed Keep client reasonably and objectively informed (including weaknesses and worst case recoveries). (including weaknesses and worst case recoveries).

Litigation Hold LettersLitigation Hold Letters

Increasing emphasis. Increasing emphasis. 1100 West, LLC v. Red Spot Paint & 1100 West, LLC v. Red Spot Paint &

Varnish Co., Inc.Varnish Co., Inc., 2009 WL 1605118 (S.D. , 2009 WL 1605118 (S.D. Ind. 2009) (default judgment due to Ind. 2009) (default judgment due to discovery abuse and sanctions against discovery abuse and sanctions against client and attorneys) (“BME compounded client and attorneys) (“BME compounded the problem by, like a chameleon, the problem by, like a chameleon, becoming indistinguishable from its client becoming indistinguishable from its client and allowing Red Spot … to evade the and allowing Red Spot … to evade the truth.”). truth.”).

Determine Client’s WishesDetermine Client’s Wishes

Make sure you have a writing documenting Make sure you have a writing documenting your client’s decisions, including not to spend your client’s decisions, including not to spend money. money.

Do not guess. Do not guess. In re termination of the Parent-In re termination of the Parent-Child Relationship of I.B. v. Indiana Dept. of Child Relationship of I.B. v. Indiana Dept. of Child ServicesChild Services, 933 N.E.2d 1264 (Ind. 2010) , 933 N.E.2d 1264 (Ind. 2010) (“[I]t is improper for a parent’s trial lawyer, (“[I]t is improper for a parent’s trial lawyer, after the lawyer has exercised due diligence after the lawyer has exercised due diligence to determine the parent’s wishes with respect to determine the parent’s wishes with respect to an appeal, to pursue an appeal without the to an appeal, to pursue an appeal without the parent’s authorization.”)parent’s authorization.”)

Advice on Billing and Fees Advice on Billing and Fees

Non-refundable retainer is an anachronism. Non-refundable retainer is an anachronism. Matter of O’FarrellMatter of O’Farrell, 942 N.E.2d 799 (Ind. , 942 N.E.2d 799 (Ind. 2011) (public reprimand for non-refundable 2011) (public reprimand for non-refundable flat fees). Cannot insert “nonrefundable flat fees). Cannot insert “nonrefundable general retainer language” into your fee general retainer language” into your fee agreements as boilerplate language. agreements as boilerplate language.

You cannot stop rendering services until You cannot stop rendering services until you receive payment.you receive payment.

Rule 1.4(a), duty to keep client reasonably Rule 1.4(a), duty to keep client reasonably informed, likely includes estimating costs informed, likely includes estimating costs versus likely recovery. (Ability to collect?) versus likely recovery. (Ability to collect?)

Must Explain FeesMust Explain Fees

In re LauterIn re Lauter, 933 N.E.2d 1258 (Ind. , 933 N.E.2d 1258 (Ind. 2010). Lauter agreed to $750 fee to 2010). Lauter agreed to $750 fee to take case through EEOC process. EEOC take case through EEOC process. EEOC found no probable cause. Suit filed found no probable cause. Suit filed anyway, and client paid additional anyway, and client paid additional $4,250. Recovered $75,000. Client $4,250. Recovered $75,000. Client grieved Lauter anyway. Public grieved Lauter anyway. Public reprimand for not disclosing “what the reprimand for not disclosing “what the additional retainer would be or how it additional retainer would be or how it would be determined.” would be determined.” IdId. at 1262.. at 1262.

Fee Agreement ProvisionsFee Agreement Provisions

Clauses you should consider include:Clauses you should consider include: The client shall pay reasonable costs and The client shall pay reasonable costs and

expenses regardless of recovery in suit. expenses regardless of recovery in suit. Representation will not begin until the Representation will not begin until the

attorney receives payment in full of the attorney receives payment in full of the advance fee. advance fee.

The client consents to the attorney’s The client consents to the attorney’s withdrawal in the event the client does not withdrawal in the event the client does not promptly pay the attorney’s bill. promptly pay the attorney’s bill. Fidelity Fidelity Nat’lNat’l, 310 F.3d 537 (7th Cir. 2002) (permitting , 310 F.3d 537 (7th Cir. 2002) (permitting attorney to withdraw).attorney to withdraw).

Attorney shall have a lien on the proceeds Attorney shall have a lien on the proceeds and the file until paid in full.and the file until paid in full.

1.5 Reasonable Fees and Billing1.5 Reasonable Fees and Billing

Factors Regarding Whether Fee is ReasonableFactors Regarding Whether Fee is Reasonable Taking retainer & performing “no meaningful service.”Taking retainer & performing “no meaningful service.” Collecting private fee when paid by government. Collecting private fee when paid by government.

Matter of BrownMatter of Brown (2006) (60 day suspension for taking (2006) (60 day suspension for taking a fee as a public defender); a fee as a public defender); Matter of McKinneyMatter of McKinney, 948 , 948 N.E.2d 1154 (Ind. 2011) (120 days for prosecutor N.E.2d 1154 (Ind. 2011) (120 days for prosecutor taking 25% of forfeitures).taking 25% of forfeitures).

Large % of initial payment in a structured settlement. Large % of initial payment in a structured settlement. Charging a fee for withdrawing from the case. Charging a fee for withdrawing from the case. Charging fees after client has dismissed attorney. Charging fees after client has dismissed attorney. Billing client for work done but not provided to client. Billing client for work done but not provided to client.

Billing (Cont’d)Billing (Cont’d)

Send interim billing to keep the client Send interim billing to keep the client informed. informed. Matter of AreauxMatter of Areaux (2005) (public (2005) (public reprimand where final bill of $12,195.18 reprimand where final bill of $12,195.18 exceeded $4,000 estimate).exceeded $4,000 estimate).

You cannot stop rendering services until You cannot stop rendering services until you receive payment. (You must get you receive payment. (You must get approval to withdraw.) approval to withdraw.)

Disclaim personal liability for third party Disclaim personal liability for third party costs. costs. Kelly v. LevandoskiKelly v. Levandoski, 875 N.E.2d 850 , 875 N.E.2d 850 (Ind. Ct. App. 2005) (jury ordered attorney (Ind. Ct. App. 2005) (jury ordered attorney to pay towing company $18,827).to pay towing company $18,827).

Collecting on Your Fees (1.8)Collecting on Your Fees (1.8)

Four Winds, LLC v. Smith & DeBonisFour Winds, LLC v. Smith & DeBonis, 854 , 854 N.E.2d 70, 75 (Ind. Ct. App. 2006) N.E.2d 70, 75 (Ind. Ct. App. 2006) (approving of termination clause which (approving of termination clause which rendered the client liable for attorney rendered the client liable for attorney fees upon discharge and retaining lien on fees upon discharge and retaining lien on file). file).

Estate of JohnsonEstate of Johnson, 855 N.E. 2d 686, 693 , 855 N.E. 2d 686, 693 (Ind. Ct. App. 2006) (lien on proceeds). (Ind. Ct. App. 2006) (lien on proceeds).

Grimes v. CrockromGrimes v. Crockrom, 947 N.E.2d 452 (Ind. , 947 N.E.2d 452 (Ind. Ct. App. 2011) (valid retaining lien on Ct. App. 2011) (valid retaining lien on medical records). medical records).

Don’t sue your client for feesDon’t sue your client for fees

90% of fee claims result in a 90% of fee claims result in a counterclaim for legal malpractice. counterclaim for legal malpractice.

Oftentimes, your insurer will ask Oftentimes, your insurer will ask whether you sue for fees (because it whether you sue for fees (because it makes you a higher risk). makes you a higher risk).

There is little point in suing a client There is little point in suing a client who cannot pay. who cannot pay.

Don’t sue (cont’d)Don’t sue (cont’d)

Matter of BeachamMatter of Beacham, 934 N.E.2d 735 , 934 N.E.2d 735 (Ind. 2010). In 2003, agreed to (Ind. 2010). In 2003, agreed to nonrefundable retainer of $5,000, plus nonrefundable retainer of $5,000, plus the greater of $200/hr. or 25%. Work the greater of $200/hr. or 25%. Work “provided no value,” and was “of poor “provided no value,” and was “of poor quality and rambling.” Final bill of quality and rambling.” Final bill of $233,484. Client settled her case for $233,484. Client settled her case for $20,000. Beacham sued for fees (in $20,000. Beacham sued for fees (in Indiana), defaulted client, forcing her Indiana), defaulted client, forcing her into bankruptcy. into bankruptcy.

TimesheetsTimesheets

Always keep track of your time, Always keep track of your time, regardless of the fee arrangement.regardless of the fee arrangement.

They are a valuable tool for defending They are a valuable tool for defending malpractice complaints and grievances.malpractice complaints and grievances.

They are They are admissibleadmissible as business as business records.records.

Think “defensively” when writing your Think “defensively” when writing your narrative.narrative.

Explain: who, what, why.Explain: who, what, why. ““Clients lie, and clients die.” Olmstead.Clients lie, and clients die.” Olmstead.

Writing Terminating RepresentationWriting Terminating Representation

Never assume the attorney-client relationship has Never assume the attorney-client relationship has been terminated. Confirm in writing.been terminated. Confirm in writing.

Writing should establish the date of termination. Writing should establish the date of termination. Writing should be short but designed to cover you Writing should be short but designed to cover you

in case of subsequent lawsuit or grievance.in case of subsequent lawsuit or grievance. Writing should inform client of potential lien Writing should inform client of potential lien

against client’s file and proceeds of the litigation against client’s file and proceeds of the litigation as security for your fees and expenses.as security for your fees and expenses.

Helps defend against continuous representation. Helps defend against continuous representation.

Trust AccountsTrust Accounts

An increasing point of emphasis is An increasing point of emphasis is the proper maintenance of trust the proper maintenance of trust accounts. accounts.

Separate ledger for each client.Separate ledger for each client. Each client must have balance above Each client must have balance above

$1.$1. Hire a bookkeeper or accountant. Hire a bookkeeper or accountant.

Trust Accounts (Cont’d)Trust Accounts (Cont’d)

Matter of GoldbergMatter of Goldberg, 952 N.E.2d 200 (Ind. , 952 N.E.2d 200 (Ind. 2011) (failed to keep adequate records, failed 2011) (failed to keep adequate records, failed to hold funds in trust, used trust funds to pay to hold funds in trust, used trust funds to pay filing fees for clients) (90 days, 30 served filing fees for clients) (90 days, 30 served with 60 stayed subject to 2 years of with 60 stayed subject to 2 years of probation). probation).

Matter of SmithMatter of Smith (2006) (60 days because he (2006) (60 days because he did not use attorney trust account or IOLTA did not use attorney trust account or IOLTA account for awhile and then mismanaged the account for awhile and then mismanaged the accounts he opened).accounts he opened).

Arranging for a Surrogate AttorneyArranging for a Surrogate Attorney

Lawyers should have an agreement Lawyers should have an agreement with another local attorney to step in with another local attorney to step in for each other in an emergency. This for each other in an emergency. This is a point of increasing emphasis with is a point of increasing emphasis with the Disciplinary Commission. the Disciplinary Commission.

Prepare arrangement on how to split Prepare arrangement on how to split fees.fees.

Make sure surrogate is competent to Make sure surrogate is competent to handle the case.handle the case.

What to do if a Grievance is filedWhat to do if a Grievance is filed

Contact your insurance carrier or Contact your insurance carrier or agent.agent. Satisfies notice requirements.Satisfies notice requirements. The carrier may even provide counsel to The carrier may even provide counsel to

represent you in the grievance process. represent you in the grievance process. Consult an attorney.Consult an attorney. Do not contact your client about Do not contact your client about

dismissing the grievance. dismissing the grievance. Matter of Matter of RamirezRamirez, 853 N.E.2d 121 (Ind. 2006)., 853 N.E.2d 121 (Ind. 2006).

What to Do When You Mess UpWhat to Do When You Mess Up

Owning up to your mistake immediately Owning up to your mistake immediately can mitigate your damages.can mitigate your damages.

Notify your insurance carrier/agent.Notify your insurance carrier/agent. Consult with an attorney (creates Consult with an attorney (creates

attorney-client privilege notwithstanding attorney-client privilege notwithstanding the fiduciary exception). the fiduciary exception).

Prepare a letter explaining the mistake Prepare a letter explaining the mistake made and what can be done about it.made and what can be done about it.

Top 10 ListTop 10 List

1.1. You wear two hats, but lawyer role You wear two hats, but lawyer role trumps business person role.trumps business person role.

2.2. Develop referral and co-counsel Develop referral and co-counsel networks (be active in the Bar).networks (be active in the Bar).

3.3. Use engagement letters.Use engagement letters.

4.4. Use termination of engagement and Use termination of engagement and declination of engagement letters.declination of engagement letters.

5.5. Define methods of communication and Define methods of communication and expectations (return calls w/in 24 hrs).expectations (return calls w/in 24 hrs).

Top 10 (cont’d)Top 10 (cont’d)

6.6. Use timesheets (and tell a story).Use timesheets (and tell a story).

7.7. Use a trust account and be diligent as Use a trust account and be diligent as to each client’s “sub-account.”to each client’s “sub-account.”

8.8. Hire a bookkeeper or accountant.Hire a bookkeeper or accountant.

9.9. Get your fees up front when possible, Get your fees up front when possible, and do not sue your client for fees.and do not sue your client for fees.

10.10. When you mess up (we all do), When you mess up (we all do), consult with experienced counsel. consult with experienced counsel.

If any questions, contact:If any questions, contact:

Patrick J. Olmstead, Jr.Patrick J. Olmstead, Jr.

Hoover Hull LLPHoover Hull LLP

111 Monument Cir., Ste. 4400111 Monument Cir., Ste. 4400

P.O. Box 44989P.O. Box 44989

Indianapolis, IN 46204-0989Indianapolis, IN 46204-0989

(317) 822-4400(317) 822-4400

polmstead@hooverhull.com

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