13.07. Identifying a Current Versus Former Client

This topic has addressed a lawyer’s ethical obligations to a current client. It is important to note that the way that current clients and former clients are treated in a different manner when it comes to conflicts of interest.  It is very rare that a lawyer can go against a current client without the client’s consent.  The reason the prohibition is so broad is that the interest being protected is loyalty – and a lawyer should not act in a way that the client could believe would violate that duty of loyalty.

The test is different when a client is a former client of the lawyer.  A client may become a former client when the representation is terminated because the matter is completed, the client fires the lawyer, or the lawyer withdraws from representation.  A common situation that creates former clients is when a lawyer leaves one law firm and goes to another firm.  In that situation, the clients of the firm the lawyer left are former clients of the lawyer.   We have an entire topic dealing with former clients.  However, at this point it is worth noting that identifying which of these two categories a client belongs has significant consequences – ambiguity as to whether a client falls into the current or former category can result in bad outcomes for a lawyer.

The ethics rules do not provide a bright line test of when someone is a current or former client.  In fact, the Scope section provides: “for purposes of determining the lawyer’s authority and responsibility, principles of substantive law external to these Rules determine whether a client-lawyer relationship exists.”[1]  We discussed the ways that an attorney-client relationship can be established in Topic 10.  Recall the second situation where an attorney-client relationship can be established when a court implies one.  In these situations, a lawyer took actions that led a client to reasonably believe that an attorney-client relationship exists.  This same issue arises when identifying a client as current or former.

Chad Client hired Larry Lawyer to represent him in a breach of contract action.  The matter went to mediation where it settled.  Chad was very impressed with Lawyer’s representation. Chad has numerous businesses, and Lawyer is hoping to get future business from Chad.  The last two communications between Chad and Lawyer were: (1) at the end of the mediation Lawyer said “Thanks for hiring me, if you need anything else, just let me know”; (2) on the final bill Lawyer hand-wrote, “Look forward to working with you on your next legal issue.”  Three months after sending the bill, Polly Plaintiff comes to Lawyer’s office with a potential tort claim against Chad.  Larry thinks the suit could be very lucrative and wants to take it without informing Chad.  Can Larry take Polly’s case?

It depends on whether Chad is a current or former client.  If Chad is a former client, then Lawyer can take the case because the matter is not the “same or substantially related” (Rule 1.9) to the breach of contract action.  However, if a court determines that Chad remains a current client of Lawyer – and the last two communications could lead Chad to reasonably believe that he is – then Lawyer cannot take the case because a lawyer cannot go adverse to a current client even in an unrelated matter without the client’s consent. 

To avoid these ambiguous situations, it is important that lawyers utilize disengagement letters (and for prospective clients non-engagement letters).  These letters should make it clear to the client that the prior representation is terminated (or for prospective clients there was no attorney-client relationship formed) and that the person is no longer a current client.  Larry Lawyer’s situation demonstrates why lawyers are hesitant to utilize disengagement letters.  The most effective letters essentially say, “I am done with you, if you want to hire me for another case you have to call me, and we will discuss whether I want to take your case.”  This could leave a sour taste in the mouth of someone like Chad, who could feel that Lawyer is kicking him to the curb.  Instead, lawyers want to encourage these types of clients to call them if there is an issue, while at the same time having the power to go adverse to the client if the right case comes up.  That is understandable.  The truth, however, is that the failure to utilize non-engagement letters can lead to malpractice claims down the road.  Most often those claims will be based on the statute of limitations running.  In those situations, if there is not a non-engagement letter, the jury will have to determine who is more credible, the lawyer or the client:  “If you have rejected a case and have not sent a follow-up letter, your verbal testimony will be pitted against the client’s.  The plaintiff’s lawyer in the legal malpractice case against you is likely to bring out that you interview over two hundred clients or potential clients a year.  The jury is likely to believe that the client’s recollection is better than yours since the client only has one case.”[2]

[1] ABA Scope [17].

[2] Minnesota Lawyers Mutual, “Guidebook to Practice Forms and Letters: Non-Engagement,” 2.