If You Failed to Document It, It Never Happened.
By Mark Bassingthwaighte
Please, can we just acknowledge that lawyers as a group are terrible when it comes to properly and thoroughly documenting their files! Of course, not you, but all the other lawyers out there sure are. You wouldn’ t believe how bad it can get. I say this because with almost every claim we handle, we have to deal with the lack of documentation of something. And I can assure you that, at times, a poorly documented file can become a very serious problem. Think about it. The fallout is now we may be forced to live with the reality that a word against word dispute between a lawyer and his or her client is in play and that rarely ends well for the lawyer. Here’ s just one story that highlights the problem.
Lawyer was retained by a client for the purpose of defending him in a contract dispute. No fee agreement or engagement letter was ever drafted. Lawyer prepared and filed an answer to the complaint that simply denied the allegations. There were no paragraphs specifically identified as affirmative defenses or a counterclaim, in part due to the fact there was no copy of the subject contract in the lawyer’ s possession. The matter eventually ended up in early mediation. Lawyer failed to draft and submit a mediation statement based upon a belief that the issues were simple and doing so would not have been cost effective. The matter was settled at mediation. The agreement provided client would sign a promissory note secured with a confession of judgment. Lawyer recalls telling client this was not a favorable settlement for him, but client decided to agree to it anyway due to the potential costs of going to trial coupled with the risk of an adverse verdict. In other words, client just wanted to put it all behind him. Lawyer drafted and sent to the client the final documents for signature. There was no cover letter explaining the documents or setting forth the client’ s obligations under them. Client never signed the documents. Instead client hired another lawyer who renegotiated the settlement for slightly better terms. Client refused to pay the bill, and lawyer turned the bill over to a collection agency. Client sued for malpractice.
There are all kinds of documentation missteps in the above example, but there’ s an even bigger problem. In this situation, there were no
ALPS Risk Manager Mark Bassingthwaighte, Esq., has conducted more than 1,000 law firm risk management assessment visits, presented numerous continuing legal education seminars throughout the United States, and written extensively on risk management and technology. Check out Mark’ s recent seminars to assist you with your solo practice by visiting our on-demand CLE library at alps. inreachce. com. Mark can be contacted at mbass @ alpsnet. com. notes of any kind in the lawyer’ s file. There was nothing documenting the lawyer’ s thinking, no record of what was communicated, no record of the decision-making process. Apparently, the staff person responsible for scanning closed files and shredding the original file once scanning was complete was never instructed to scan and preserve all attorney notes. Now that’ s the real problem.
Here at ALPS, we hear all the excuses when it comes to the reason why a firm’ s documentation policies are not as thorough as they perhaps should be.“ That step isn’ t necessary,”“ It takes too much time away from important work,”“ We didn’ t think keeping that was necessary,”“ There are too many other things we have to do,”“ The client would be offended if we did that,” and“ We were trying to keep the costs down” are commonly shared. That’ s all well and good, until someone questions what you did or why you did it. Memories are short, yours included. Never forget the following. If you didn’ t document it, it wasn’ t said, or it didn’ t happen. That’ s how it’ s going to play out in our world.
While the basics such as documenting scope of representation, who and who isn’ t a client, and that representation has ended are vitally important, my desire with this article is to identify a few documentation traps that, if not properly handled, could place you in a situation not unlike the one set forth above. Here’ s the ultimate goal. There should be a thorough written record of the advice given and the decision-making process in every file, and this record must be preserved for the life of the file.
The first trap involves the client who wants to save a little green. It’ s a trap because there may be unintended consequences the client hasn’ t thought through. If a client is cost conscious to such a degree that limitations are being placed on your scope of representation( e. g., taking shortcuts such as having you rely on documents prepared by others, severely limiting the amount of authorized research or discovery, not wanting to pay to have assets valued, not wanting to hire an expert, etc.), you must document this client has been informed of the legal ramifications of the limitations being placed on your representation, as well as the reasons why this client is making such a decision. Here’ s why. If this client is eventually harmed by his desire to save a little money, he will turn to you and say,“ Why didn’ t you tell me that could happen? If I had only known, I would have ponied up.”
In a similar vein, if your client refuses to follow your legal advice, it is essential you document
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