Who’s the Client?
For those of you old enough to remember it, “who’s the client?” sounds a lot like Wendy’s old “where’s the beef?” The advertisement highlighted the competition’s failure to focus on the key aspect of its product. Lawyers all too often do exactly that: we fail to focus on whose interests we are protecting, i.e., who’s the client? When the identity of the client is unclear, the lawyer’s duties and obligations are not clear, which can lead to bad outcomes—for lawyer and client.
“In the most general sense [attorney] denotes an agent . . . who is . . . authorized to act in the . . . stead of another.” Black’s Law Dictionary (5th ed.). A lawyer, “as a representative of clients . . . performs various functions,” depending on the terms of the engagement. ABA, Model Rules of Professional Conduct: Preamble and Scope ¶ 2. The lawyer may be advisor, advocate, negotiator, or evaluator. Id. But the lawyer is always an agent who has a principal or principals (a/k/a client or clients) who are actually able to consider legal advice and make decisions. See ABA Model Rule of Prof’l Conduct 1.2. Knowing who that principal is, and making sure that everyone involved does, too, is a key aspect of the good practice of law.
The most recent survey of lawyers’ professional liability claims shows that conflicts of interest are by far the most common claims made against lawyers. Ames & Gough, Lawyers’ Professional Liability Trends: 2015, at 4 (2015). In fact, there are a third again as many conflicts claims as there are “other/general negligence” claims, the second most common type of claim. Id. at 4. In language that resonates with juries, the claim is, “no man can serve two masters,” and it arises when one client feels that the lawyer favored another client over him. The claim comes up in virtually every type of law practice.
In trusts and estates, there are at least three sets of interests: the testator, the executrix, and the heirs. Further, multiple heirs increase the sets of interests. These interests can align on some subjects (e.g., reducing the tax burden), but not on others (e.g., to whom the tax savings should go). The lawyer should prepare and have signed clear documentation of the scope of representation, including the identity of the client, to avoid being deemed to represent a client that he didn’t expect to have. Trask v. Butler, 123 Wash. 2d 835, 872 P.2d 1080 (Wash. 1994); Spinner v. Nut, 417 Mass. 549, 631 N.E.2d 542 (Mass. 1994); Rutkoski v. Hollis, 235 Ill. App. 3d 744, 600 N.E.2d 1284 (Ill. App. Ct. 1994); In Re Estate of Miller, 98 Ohio App. 445, 129 N.E.2d 838 (Ohio Ct. App. 1954).
Similarly, in family law, one is likely to find numerous stakeholders—husband, wife, children—whose interests and alignments are fluid. Given the volatility of this particular area of the law, and the typical emotional component, written retainer agreements signed before any confidential information is shared, and which identifies, among other things, the client, are crucial. Newton v. Newton, 955 N.E.2d 572 (Ill. App. Ct. 2011).
In a business transaction, there are also at least two sets of interests, and consequently, there are multiple possible clients: buyer/seller, lender/borrower, lessor/lessee, among others. Lawyers often say that they represented “the transaction” or “no one,” but neither of those is true. “The transaction” is not an entity, so it is not capable of being a principal. And by definition, if a lawyer is doing legal work, she is an agent who needs a principal. The lawyer can represent the buyer, the seller, any entity created for the transaction (e.g., limited partnership), or some combination thereof, but the lawyer cannot represent “the transaction” or “no one.” The transactional lawyer is well-advised to have written disclosure of who she represents, who she does not represent, and what her role is (i.e., what she does and does not agree to do for her client). Atlantic Richfield Co. v. Sybert, 295 Md. 347, 456 A.2d 20 (Md. 1983).
In a real estate closing, a lawyer likewise cannot represent “the deal” or “no one,” but the lawyer can restrict his obligations to certain parties. Legacy Homes v. Cole, 205 Ga. App. 34, 35, 421 S.E.2d 127 (Ga. Ct. App. 1992). However, it is the lawyer’s duty to ensure that all parties understand this and that the unrepresented parties know that they can hire counsel of their own. Marsh v. Wallace, 666 F. Supp. 2d 651 (S.D. Miss. 2009).
In litigation, one might think that the lines of demarcation are clear, but that is not always true. For example, if a claim is made, the defendant asserts a counterclaim, and the underlying situation has the potential for criminal exposure, there are many legal interests to be protected. Arden v. Forsberg & Umlauf, PS, 2017 Wash. Lexis 911 (Wash. 2017) (criminal and civil liability, civil recovery, insurance coverage issues). To be sure that all the client’s possible legal concerns are protected, and that the lawyer is not expected to protect a concern that she does not believe that she is protecting, the lawyer should get it in writing: “I am the lawyer for X, but not Y, for purposes A, B, and C, but not D, E, and F.”
And lest one think that the problem is one reserved to civil law, even if a family member pays the legal bills, the client is the criminal defendant. Estate of Nixon v. Barber, 340 Ga. App. 103, 796 S.E.2d 489 (Ga. Ct. App. 2017); Holliday v. Jones, 215 Cal. App. 3d 102, 264 Cal. Rptr. 448 (Cal. Ct. App. 1989). Again, a clear written engagement agreement saying this avoids a lot of problems for everyone.