FAQ – Law Practice Management, Part 2

Last week I answered some frequently asked questions about law practice management.  In today’s post, I am addressing a few more:

Conflicts of Interest – Prospective and Declined Clients

Question

Am I required to track prospective and declined clients in my conflict of interest system?

Answer

We recommend that prospective and declined clients be included in your conflict system.  For example, assume a husband comes in for a consultation because he is contemplating divorce. During the consultation, the husband discloses confidential information. The husband then decides not to proceed with the divorce, or you decline the husband as a client. Two years later, the wife comes in seeking a divorce. If you accept the wife as a client, you will have a conflict of interest. This could happen easily if you forget about the consultation with the husband and do not maintain a record of consultations in your conflict system.

Conflicts of Interest – Tracking “No Show” Lawyer Referral Clients

Question

What should I do if the bar refers a potential client to me and they are a “no show?”  Or the potential client never calls?  Do I still need to include the non-client in my conflict system?

Answer

A piece of advice before I answer the conflict question:  If the bar refers a potential client to you and the potential client does not call, inform the bar so you can get another referral.

Now, with regard to your conflict system:  You are not required to include names of potential bar referral clients who never call you.   The same is true of a “no show” who fails to keep a scheduled appointment (unless you learned confidential information about the client or her matter in the course of setting up the meeting).

Regardless, tracking “no calls” and “no shows” might prove helpful:

Joe Smith is referred to you by the bar for a divorce.  Joe is a “no show” for his appointment.  Other than knowing the adverse party’s name (Marie Smith), you have no information about Joe’s divorce.  Because Joe did not keep his appointment and you possess no confidential information about the matter, Joe may not appear in your conflict system.  Time passes.  Marie Smith calls.  You want to represent Marie.  Can you see the value of having an entry in your system documenting that Joe was a “no show” and did not keep his appointment?  Joe was never your client and your entry proves it.

Or assume a slightly different scenario.  Jane is referred to you by the bar.  You schedule an appointment for the next day.  Jane doesn’t show.  Six weeks later, Jane calls again.  As part of your regular conflict screening process, you run Jane through your system and see that she did not keep her last appointment.  This might be useful information to have in deciding whether to schedule Jane for a second meeting.

Keeping Declined or Miscellaneous Client Records

Question

What should I do with the notes or nonengagement letters I’ve accumulated for persons who don’t become clients?

Answer

If you are paper-based

Keep a yearly declined or miscellaneous clients folder.  For example: “2011 Declined Clients.”  In the folder, staple together your intake sheet, notes, a copy of your nonengagement letter, and anything else you have from your meeting with the declined client.  This is cheaper than opening a file folder for everyone you meet.  Paperwork pertaining to declined clients can be kept chronologically within each year’s file.  Keep these records at least 10 years, as you would actual client files.  (For File Retention Guidelines, visit the PLF Web site.  Select Practice Aids and Forms > File Management.)   Always return any original documents provided by the client and remember to add declined clients to your conflict system.

If you are paperless

Create a file folder on your computer called “Declined Clients” and create subfolders for each year.  If you like, you can create further subfolders for each declined client.  Otherwise, generate a PDF file for each declined client and save the PDF under the declined client’s name.  In the PDF, assemble copies of your intake sheet, notes, and nonengagement letter or e-mail.  Scan any paper related to the declined/miscellaneous client and append it to the PDF.  Store your electronic records at least 10 years.  Be sure to capture your declined client folder in your backup.  Always return any original documents provided by the client and remember to add declined clients to your conflict system.

Unlawful Practice of Law

Question

What  should I do if I believe someone is engaged in the unlawful practice of law?

Answer

If you believe someone is engaging in the unlawful practice of law, report it to the Oregon State Bar.  A complaint form is available here.  On its Web site, the Oregon State Bar provides the following information:

“The UPL committee has authority to:

  • Dismiss a complaint
  • Send a notice letter, warning that the accused’s activities could be considered the unlawful practice of law
  • Issue an admonition with the consent of the accused
  • Enter into a cease and desist agreement with the accused or
  • Recommend to the OSB Board of Governors that the OSB file a lawsuit against the accused to prevent him from continuing to practice law without authorization.

Occasionally, if an investigation suggests that there has been some illegal activity that the UPL committee cannot address, then the UPL committee will forward the results of its investigation to other state bars, to the Oregon Attorney General, or to another appropriate regulatory agency.”

Copyright 2011 Beverly Michaelis

Sneak Preview: Virtual Practice in Oregon

Excerpted from my upcoming article in the Oregon State Bar Bulletin,
Unbundling Legal Services in the Twenty-First Century:

Providing limited legal services is not a new concept.  Transactional lawyers have long served in the role of document reviewer or preparer.  So how is unbundling different? It takes the idea one step further by employing a team approach in which the lawyer and client decide who will do what based on the legal services required by the client’s case.  The client takes a much more active role in the matter and often assumes responsibility for pro se court filings and appearances.  Add the twenty-first century twist of delivering unbundled services online, and some issues arise.

Ethics Revisited

Limited-scope representation is expressly permitted in Oregon so long as “the limitation is reasonable under the circumstances and the client gives informed consent.”  Oregon Rule of Professional Conduct 1.2(b). Whether unbundled services are “reasonable under the circumstances” will require your professional judgment.  For a complete discussion of the ethical implications in providing unbundled services, including restrictions on ghostwriting or scripting specific messages for clients engaged in settlement negotiations, see Helen Hierschbiel, The Ethics of Unbundling: How to Avoid the Land Mines of “Discrete Task Representation.”

Screening Clients Just Got Harder

In a virtual or online practice, clients are unseen.  You will need to invest extra effort to build rapport and gauge the likely success of your working relationship via e-mail or online contacts.  If you intend to practice virtually, checklists, tip sheets, and interview forms crafted around traditional screening criteria will be crucial to your success.  Review the resources listed at the end of this article and visit the sites of successful and respected virtual practitioners, like Stephanie Kimbro.

The Bona Fide Office Rule

Oregon has no “bona fide office rule,” requiring a brick-and-mortar office space to conduct a law practice.  If you practice in other states, the rules may be different. At least one jurisdiction has determined that virtual offices do not meet that state’s bona fide office requirement.

With that said, the same considerations involved in unbundling apply to online delivery of legal services.   (My forthcoming article analyzes unbundling in detail.)

Any virtual law office must also address:

  • Marketing restrictions
  • Full disclosure of the jurisdictional limits of practice
  • Client confidentiality (Any online portal that permits communication, collaboration, or document exchange with clients must be secure.)
  • Publication of terms and conditions identifying when an attorney-client relationship is formed

See Helen Hierschbiel, Internet Marketing: Rules of the Road and Odds & Ends: Safeguarding Client Information in a Digital World for more information regarding online marketing, jurisdictional disclosure, and protection of confidential client information in the cloud.

Online Practice and Lawyer Referral

Would a lawyer practicing virtually be eligible to receive referrals from Oregon’s LRS, absent a physical office?  The answer is no.  Clients referred by the LRS are specifically told to expect an “in-office” consultation.  See also LRS Policies and Procedures E.(3):

No duplicate registrations shall be made outside of the city where the attorney maintains his or her practice unless: a) the attorney maintains a second physical location where attorney-client meetings may take place; or b) the attorney’s office is located within two (2) miles of the border between two locations.

Online Practice and Professional Liability Fund (PLF) Coverage

Only an Oregon attorney engaged in the private practice of law whose principal office is in Oregon is covered by the PLF Claims Made Plan.  ORS 9.080(2).  But what if the attorney has no office in which he or she meets with clients? PLF Policy 3.180(C) provides:

If an attorney has no office as defined in subsection (B) above, the attorney’s principal office as defined by ORS 9.080 (2)(a) will be defined as the attorney’s principal residence if the attorney is an active member of the bar association of the state of residence; otherwise, the attorney’s principal office will be deemed to be in Oregon unless the attorney affirmatively demonstrates to the PLF that the attorney does not engage in the private practice of law in Oregon. (Emphasis added.)

PLF Policy 3.180 is available on the PLF Web site. Select Policies and Forms under Primary Coverage.  If you have questions regarding PLF coverage, call Jeff Crawford or Kimi Nam at (503) 639-6911 or (800) 452-1639.

Resources for Online Delivery of Unbundled Services

For additional information regarding virtual office practice, visit the ABA eLawyering Task Force and Stephanie Kimbro’s Virtual Law Practice Blog.  Delivering Legal Services Online, Stephanie Kimbro’s upcoming book, should be available soon.  Also see The Virtual Law Firm: Benefits, Costs, and Ethical Pitfalls to Avoid from the ABA.   Find more ABA Products related to virtual practice by searching the ABA Web store. ABA products can be purchased at a discount through the Professional Liability Fund. For more information, visit the PLF Web site.  Select ABA Products under Loss Prevention.  Vendors of online platforms for virtual offices include Virtual Law Office Technology, LLC and Direct Law.

Conclusion

If you are a brick-and-mortar lawyer, the potential traps of providing unbundled legal services are well known.  If you are one of the pioneers providing legal services online, the roadmap is a work in progress. Stay tuned.

Copyright 2010 Beverly Michaelis