Practical Challenges of Meeting Your Duties of Competence and Diligence to Your Clients

July 18, 2016

Attorney communicationOne of the biggest attractions of practicing as a solo practitioner or in a small law firm with just a few other attorneys is the diversity of projects and issues that are likely to come your way, particularly if you have focus on building a career as a generalist and avoided excessive specialization.  At the same time, however, this situation raises serious ethical issues for lawyers who are continuously being pushed outside their professional “comfort zone” since they are required to serve their clients with competence and diligence. Those requirements are fair and reasonable, and go to the heart of being a good counselor, but in order to meet those standards a lawyer must take a hard look in the mirror and ask whether or not he or she is really qualified to take on a project or give an informed answer to a client who thinks that because you are a lawyer you must be able to answer any question that relates to the law.

Many lawyers don’t realize that the concepts of “competence” and “diligence” are fleshed out in some detail in their state rules of professional conduct and that the rules can provide a basic framework to analyze whether or not the lawyer might be in danger of violating his or her professional duties to the client by venturing into practice areas that are unfamiliar to him or her.  While state rules vary, they are generally modeled on the ABA Model Rules of Professional Conduct (“Model Rules”).  With respect to “competence”, Model Rule 1.1 mandates that “[a] lawyer shall provide competent representation to a client” and explains that “[c]ompetent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation”.  As for “diligence”, Model Rule 1.3 sets out the expectation that “[a] lawyer shall act with reasonable diligence and promptness in representing a client”.  The Comments to Model Rules 1.1 and 1.3 provide helpful insights for attorneys confronted with a legal issue or transaction that is relatively unfamiliar to them or attorneys who are struggling with a heavy workload and/or outside events that may be undercutting the amount of time available to serve their clients.

Comment [1] to Model Rule 1.1 notes that “[i]n many instances, the required proficiency is that of a general practitioner”; however, the Comment also concedes that “[e]xpertise in a particular field of law may be required in some circumstances”.  The initial assumption for all lawyers, regardless of their training or experience, is that they will be able to provide certain basic and important legal skills: the analysis of precedent, the evaluation of evidence, legal drafting and the ability to determine what kind of legal problems a situation may involve.  Beyond that, however, the lawyer needs to take a hard and candid look at the answers to the following questions before deciding that he or she is capable of providing the requisite knowledge and skill with respect to a particular matter:

  • What is the relative complexity and specialized nature of the matter and will he or she be able to make adequate inquiry into and analysis of the factual and legal elements of the matter?
  • Does he or she have the requisite training and experience in the field(s) necessary for properly handing the matter?
  • Does he or she understand the methods and procedures that meet the standards of competent practitioners with respect to the specific matter?
  • If he or she is unfamiliar with required field(s), is he or she able and willing to undertake the appropriate preparation and study to provide adequate representation?
  • Will he or she have the time necessary to devote to the matter to fulfill his or her duties and obligations under Model Rule 1.3 (i.e., act with reasonable diligence and promptness)?
  • Is it feasible for him or her to refer the matter to, or associate or consult with, a lawyer of established competence in the field in question?

When pondering these questions the lawyer must take into account what is at stake for the client.  As noted in Comment (5) to Model Rule 1.1: “The required attention and preparation are determined in part by what is at stake; major litigation and complex transactions ordinarily require more extensive treatment than matters of lesser complexity and consequence.”

The Model Rules refer to a “general practitioner” and many attorneys are hired based on the implicit understanding and expectation that they will be competent “generalists” able to handle a wide range of matters.  Lawyers in smaller law firms who serve as the primary outside counsel for their clients, many of which do not have large budgets for legal services, are typically under extreme pressure to take on matters that fall outside their experience and competency.  Things become even more difficult when clients seek quick answers to questions without delay or equivocation.  In spite of all of this, lawyers must develop the discipline to push back against unreasonable demands from their clients, remembering to caution those clients that a hasty answer can be worse than no answer at all if it turns out to be incorrect or based on incomplete factual collection or analysis.

Before deciding that he or she has the requisite competence to take on a matter, the lawyer must be comfortable that he or she has kept abreast of changes in the applicable law and its practice, including the benefits and risks associated with relevant technology. Typically, this means engaging in continuing study and education and complying with all continuing legal education requirements to which the lawyer is subject.  However, keeping up with CLE requirements can be difficult for solo practitioners and lawyers from smaller firms, since there never seems to be enough time and small law firms are often reluctant to pay for the courses.  Solo practitioners also lack “down the hall” access to colleagues who they can turn to for ideas about how to proceed on a particular matter.

In addition, the lawyer should not ignore his or her obligations with respect to “diligence”.  Comment (2) to Model Rule 1.3 admonishes lawyers to control their workload so that each matter they take on can be handled competently.  Once a matter has been taken on, the lawyer must be prepared to pursue it on behalf of a client despite opposition, obstruction or personal inconvenience to the lawyer (emphasis added by author).  The possibility of neglect or procrastination must be taken into account by the lawyer before he or she takes on a new matter, since he or she has a duty to act with reasonable promptness and any actual or apparent failure to be on top of the matter at all times will create anxiety with the client and undermine the client’s trust in the lawyer’s skills and judgment.

As with the expectations of the client regarding the scope of competence of their lawyers, the client also tends to have little tolerance for lawyers who worry about whether they will have the time to take a new Gutterman WLEC bannermatter on.  Lawyers are consistently flooded with requests for assistance and it does not take long for their plates to reach the overflow point.  When this happens it’s time for the lawyer to proactively seek control of the situation, either by prioritizing existing work and rearranging deadlines or by convincing the appropriate decision makers inside the client that they need to considering bring on in-house legal personnel or turn over certain projects to other outside lawyers who are better qualified and capable of providing an acceptable return on investment for the client.  This often seems like a tough decision for the lawyer since he or she will appropriately be concerned about potential loss of business from the client, particularly if the client hires in-house lawyers and begins using them for work previously sent to the outside lawyer; however, the lawyer must remember that taking on work that he or she is not qualified to perform, or which cannot be fit into his or her current schedule, will lead to stress, large amounts of unbillable time to “get up to speed” in the new practice area and the possibility that the client will be so unhappy that all future work will be pulled.

If the lawyer determines that the best course of action is to retain or contract with other lawyers outside of the law firm to provide or assist in the provision of the legal services required by the client, he or she should obtain informed consent from the client and must reasonably believe that the other lawyers’ services will contribute to the competent and ethical representation of the client.  Before taking this step, the lawyer must conduct reasonable due diligence on the education, experience and reputation of the outside lawyers; the nature of the services assigned to the outside lawyers; and the legal protections, professional conduct rules, and ethical environments of the jurisdictions in which the services will be performed, particularly relating to confidential information.  The lawyer should expect that he or she will be obligated to comply with Model Rule 5.1, which imposes obligations on lawyers supervising other lawyers to make reasonable efforts to ensure that those being supervised conform to the Model Rules.

In some cases, the lawyer may outsource certain projects to non-lawyers, particularly when the lawyer doesn’t have the time and/or expertise to do them on their own.  Examples include relying on outside providers for document review and management or legal research (when done by paralegals rather than lawyers).  The Model Rules allow for this; however, Model Rule 5.3 obligates the lawyer to make reasonable efforts to ensure that outside providers conduct themselves in a manner that is compatible with the professional obligations of the lawyer.  This means doing proper due diligence before engaging the provider; reviewing the security of the facilities where the provider will be carrying out the project, if not inside the client’s office; and review the education, experience and qualifications of the specific persons involved in the project.  The lawyer should be sure that his or her client is aware of the outsourcing and has given explicit consent and the lawyer should maintain a record of the specific steps taken to oversee and supervise the activities of the provider.

Every lawyer has a different comfort zone and tolerance for uncertainty and these factors play an important role in how a particular lawyer assesses whether or not he or she is comfortable taking on a new project or issue.  The Model Rules provide guidelines that lawyers can follow to achieve the requisite comfort level; however, they often call for lawyers to invest time and effort in gaining additional knowledge, a luxury that may not be available in a bustling small law firm practice.  In addition, at some point in their career a lawyer will realize that it is simply impractical to assume that he or she can properly represent his or her client.  For example, while laypeople often assume that a lawyer has been down at the courthouse every morning the reality is that not every lawyer knows how to properly and effectively handle a litigation matter.  Similarly, complex issues surrounding ownership and use of technology and data are best left to experts given the “bet the company” importance of managing those assets.

As a solo practitioner or small law firm lawyer, you will need to know your limits and be prepared to explain them clearly to your supervisors and your clients.  This is not the easiest thing to have to do; however, biting off more than you can chew will ultimately lead to trouble for both the client and you, including the possibility that your client will petition the bar for disciplinary actions.  Unfortunately, you may find that even when you properly and prudently limit the scope of the work you take on for your clients you will harm your relationship with those clients.  For example, the best course of action of for a particular problem may be to engage outside counsel with expertise in a particular area.  This is all well and good; however, when the bills for those services start coming in your clients may not be pleased if the fees exceed those that the client is used to paying to you and your firm or the project runs over budget because you are unable to control how the work is performed by the outside counsel.  In that situation, you will need to be prepared to explain the costs to your client and proactively supervise the work of the outside counselor.  In addition, your duties with respect to supervision include educating yourself at a basic level about the issues and processes involved in the particular matter so that you can assist your client in being an informed consumer of the outside counsel services.

For further information on the issues discussed above, see Chapter 3 (“Building and Managing Client Relationships”) in Business Transactions Solution on Westlaw.

In addition, a new chapter on Employee Handbooks and Policies (Chapter 174) will be added to Business Transactions Solution on Westlaw in August and will include a large library of samples and practice tools to get you up and running.

Titles by Alan Gutterman