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The Sky May Be Falling, But Does It Have to Fall on You?

The Sky May Be Falling, But Does It Have to Fall on You? . John B. Gordon Partner, Faegre & Benson LLP. The Engagement Letter is Key. Who is the client? What is the scope of the engagement? What are the payment terms? Advance consent to conflicts Ability to withdraw

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The Sky May Be Falling, But Does It Have to Fall on You?

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  1. The Sky May Be Falling, But Does It Have to Fall on You? John B. Gordon Partner, Faegre & Benson LLP

  2. The Engagement Letter is Key. • Who is the client? • What is the scope of the engagement? • What are the payment terms? • Advance consent to conflicts • Ability to withdraw • Client fails to cooperate • Client fails to pay bills • Any reason or no reason MSBA Probate & Trust Law Section — December 15, 2008

  3. Client’s History and Character: Yellow Flags • Recently, or frequently, changed lawyers or accountants • Making conspicuous purchases or living beyond apparent means • Have sued other lawyers • Provide inconsistent information, or engage in other unexplained behavior • History of financial malfeasance MSBA Probate & Trust Law Section — December 15, 2008

  4. Dubious Deals • Deals and transactions that have no apparent business purpose • Divert or transfer assets between related entities that they control other than in the ordinary course of business • Want you to “protect their assets” by transferring them to foreign trusts or other remote entities MSBA Probate & Trust Law Section — December 15, 2008

  5. Are You Renting Out Your Credibility? • Does the client want to use your escrow account, rather than a bank, to transfer or hold money or other valuables? • Does the client want you to make representations to others about client’s financial substance, creditworthiness, or reliability? MSBA Probate & Trust Law Section — December 15, 2008

  6. A Quintet of Quotidian Queries • Do you document important conversations? • Do you include other advisers and family members in conversations where appropriate (keeping in mind concerns relating to client confidentiality and the attorney-client privilege)? • Do you manage client expectations? • Do you overstate or understate your role? • Do you excel at client service? MSBA Probate & Trust Law Section — December 15, 2008

  7. Let Me Outta Here! Rule 1.16--Declining or terminating representation  (a)  Lawyer shall withdraw if   (1) Representation will result in violation of RPC or law (b) Lawyer may withdraw if   (2) client persists in fraud involving lawyer’s services (3) client has used lawyer to perpetrate fraud (6) client has made representation "unreasonably difficult" MSBA Probate & Trust Law Section — December 15, 2008

  8. Send a Disengagement Letter. • Reasons • Who has terminated the engagement • Your expectations regarding payment • Your willingness to provide transition to new counsel • Imminent deadlines and obligations that have not yet been satisfied • Negating undertaking to advise client further MSBA Probate & Trust Law Section — December 15, 2008

  9. Benefits of Disengagement Letter • Eliminates later claim that client depended on firm for future advice • Transforms party into former client for conflicts purposes • May trigger commencement of limitations period MSBA Probate & Trust Law Section — December 15, 2008

  10. It’s Not Over until It’s Over. • Provisions in agreements that require notices or copies of notices to be sent to firm as well as former client • Continue to store files • Continue to advise • Continue to forward correspondence • Fail to disclaim client relationship in dunning letters MSBA Probate & Trust Law Section — December 15, 2008

  11. The Sky May Be Falling, But Does It Have to Fall on You? John B. Gordon Partner, Faegre & Benson LLP

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