My Shingle

The Dangers of the 19th Century Retainer Agreement

by Carolyn Elefant on February 4, 2013 · 5 comments

in Retainer Agreements, Tech & Web

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shutterstock_88464040OK, maybe this Engagement Agreement sample, extracted from a Start Up Law Firm Toolkit published by Lawyers Mutual North Carolina isn’t as outdated as the Pony Express.  Still, the engagement letter provision below, which seeks express client authorization for use of any modern day method of communication is so antiquated and short-sighted made me seriously doubt whether the legal profession will survive into the next decade:

We will also need to reach an agreement regarding the means of communication Personal meetings are obviously welcome and land-line telephone conversations are appropriate in the majority of situations. Due to inherent confidentiality risks involved with modern technologies including misdirected facsimiles or emails, unauthorized access to computer data or unsecured cell phone conversations, any medium other than face-to-face, landline or the US Postal service will be at your discretion (A separate will be provided where you authorize and accept the risks of various forms of communication).

Before I start in on what’s wrong with this kind of provision, let me say that I’m well aware that some jurisdictions do in fact require client consent for use of email. Further, I also realize that email may  not be as secure  as lawyers once believed when jurisdictions first authorized its use to communicate with clients.  Yet, even taking account of these considerations, I still think that onerous retainer provisions like this one are ridiculous and will cause far more harm than a wayward email. Here’s why:

1.  The engagement letter provision deprives lawyers of discretion and makes them look like fools

OK, so email carries risk.  What part of life doesn’t? Most of us don’t walk around in glass bubbles because of a chance that we might catch the flu. Nor do we bring parachutes on airplanes in case of an emergency.  In life, we balance risks and burdens and make reasoned decisions based on our assessment of the risk. In the glass bubble case, a bubble is onerous and getting the flu or strep, while inconvenient, isn’t life threatening. In the airplane case, a parachute isn’t terribly expensive and could guard against a fatality but truth is, the risk of anything going wrong is so small that we deem even the minor added cost unnecessary. 

Risk assessment (or balancing risks versus rewards/harms) apply with equal force to use of email. Are risks of disclosure associated with email substantially greater than those for use of US mail?  Until I see documentation, I don’t buy it.  Even risks like accidentally forwarding an email to the wrong party can happen with hard copies (plus, hard copies introduce risk of permanent loss or damage that electronic communications don’t have).

But for the sake of argument, let’s assume that email is inherently risky. Even with high risk, in many cases, the harm associated with inadvertent disclosure are so small that they don’t justify inconveniencing clients with special consent forms. If harm resulting from disclosure are greater (for example, an employee using email on a work machine, which compromises attorney client privilege), lawyers need to take the time to educate their clients on the risks.

So that’s my first problem with this letter.  Rather than allow lawyers to exercise discretion to assess risks to their clients, the letter establishes a presumption that electronic communications are inherently risky – which isn’t true in all cases.   Second, the letter makes lawyers look like idiots.  After delineating the parade of horribles associated with use of electronic communications, the letter then permits clients to use these communications at their own risk.  Huh?  What kind of a lawyer warns clients of potential harms (for example, sharing privileged information on Facebook or violating a restraining order) and then says, OK – do it anyway, but if anything happens, it’s your problem.  Do the authors of this letter not realize the internal inconsistency of instructing lawyers to warn clients about risk and then turn a blind eye to it?

If electronic communications do in fact pose a real risk of harm in a particular matter (and again, there are plenty of situations where they do), then lawyers should take the time to educate clients of these harms (potential loss of privilege, identity theft, etc…) so that clients also take those risks seriously.  On the other hand, if electronic communications don’t pose a problem, then take the stupid clause out of the retainer agreement or, for jurisdictions that require client consent, phrase it differently (e.g., “The firm uses email to communicate with clients and has adopted a list of best practices to avoid risk of inadvertent disclosure or loss of attorney client privilege.  If you do not agree to our use of email, please let us know and we will make alternative methods of communication available.)

2. Clauses like this will have unintended consequences, far worse than harms associated with email

The engagement provision erects unnecessary hurdles to attorney client communication and increases costs of representation.  Many clients may be extremely reluctant to sign  off on this type of disclaimer and will wind up relying on phone or mail.  I don’t know about you, but it’s generally quicker for me to shoot off a quick email than get tied up in a 20 minute phone call with a client.  That means clients will pay more if their lawyers can’t use email.  More importantly, at the end of the day, I’d rather take a risk of disclosure than not be able to communicate to my client at all.  For example, while text messaging carries perils of its own, you can be sure that if I’m in court for a trial and my client hasn’t shown up, I’m going to text the living daylights out of him if that’s the only way I have to get in touch.

Even worse, clients may wonder why they should go through the hassle of using lawyers at all if they have to jump through so many hoops.  Some clients many suspect lawyers of deterring use of email so that they can jack up their bills with face time meetings and calls. Others may just get so frustrated that they’ll turn to Legal Zoom which for all of its problems, has a user friendly, online interface.

The reality is that our clients live in the 21st century.  Maybe yesterday’s world — with its morse code and Main Street offices and typewritten hard copies was safer — but it’s also not today’s reality.  When we lawyers insist on turning back the clock to protect clients, we actually expose them to far greater harm because we deprive ourselves of the knowledge and the tools to help our clients address the dangers they face today.

Photo of Old Fashioned Phone courtesy of Shutterstock

  • Guest

    But isn’t this type of provision requested by malpractice insurers?  If so, should a lawyer intentionally increase his or her premium?

  • myshingle

    Maybe they should choose another insurance provider. My insurer doesn’t require this.

  • Morris Singer

    I’d argue we’re actually getting to the point with this kind of provision where the retainer agreement is running up against other ethical obligations, namely Rule 1.4, which requires prompt communication with the client. Are we really being prompt when we insist on only calling our clients on their landlines, in an age of mobile devices and email?

  • Camille

    Carolyn, this is Camille Stell with Lawyers Mutual reaching
    out to discuss your blog post. You make good points – namely using today’s
    knowledge and tools to benefit clients. While North Carolina has an ethics
    opinion that requires lawyers to advise clients of the risks associated with potential
    losses of confidentiality, our language is outdated. We will be revising the
    engagement letter. In response to the question from your reader as to whether
    this language was required by us – the answer is no. This was one engagement
    letter in a collection of sample letters. We have had positive response from
    lawyers who found the Start Up tool kit helpful so I hope your readers will
    check it out.

  • myshingle

    I thought much of the kit particularly the intake forms was very good too.
    Carolyn

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