In this day and age, the life and times of a full-time practicing attorney can be rather hurried and harried. Even the best intentioned attorneys can become so caught up in the responsibilities and time burdens of the so-called daily grind they lose sight of some of the basic principles of their duties of professional responsibility. For example, in the course of juggling substantive mastery of the law, deadlines, and administrative duties, disputes can arise regarding whether an attorney-client relationship has commenced and the ramifications of the commencement of such relationship, between an attorney and a person whom the attorney believed was merely a prospective client.
Under Florida law, the determination of whether the attorney-client relationship has commenced is measured by the subjective belief of the client that the client is being represented by the attorney. Although this subjective belief must be reasonable, the determination focuses on the intent of the client, rather than the conduct or belief of the attorney. Regardless of whether the attorney has been retained by the client, or otherwise believes that the attorney-client relationship exists, once the attorney-client relationship commences, the attorney’s duties under the Florida Rules of Professional Conduct (e.g. duties of competence, diligence, communication, confidentiality of information, and others) are triggered. As a result, it is critical that the attorney and the client have consistent views regarding when, and if, the attorney-client relationship has commenced.
In addition to the consequences under the Florida Rules of Professional Conduct, some attorneys must consider the implications of their duties under the new standards of professional conduct for attorneys prescribed by the Sarbanes-Oxley Act of 2002, and the rules of the Securities and Exchange Commission thereunder, which will become effective Aug. 5. Adopted in response to the accounting and other corporate scandals exposed in recent times, these new SEC rules are part of the sweeping corporate governance reform movement, and may trigger complex reporting and whistle blowing duties of attorneys covered by the rules.
The new SEC rules will be applicable to any attorney who: (1) transacts any business with the SEC, including communications in any form, (2) represents an issuer of securities (generally public companies, as defined in the rules) in any SEC investigation or proceeding, (3) provides advice with respect to the securities laws regarding any document that will be filed with the SEC, and (4) advises an issuer regarding whether information or any writing is required to be filed with the SEC, but only in the course of providing legal services to an issuer with whom the attorney has an attorney-client relationship. Attorneys who provide legal services with respect to certain securities law matters unknowingly may be subject to these complex federal rules of professional conduct, as well as the Florida Rules of Professional Conduct if the client believes that an attorney-client relationship exists.
Attorneys who diligently and clearly communicate with prospective clients regarding the commencement and existence of the attorney-client relationship not only avoid unknowingly becoming subject to the Florida Rules of Professional Conduct and the SEC rules of attorney conduct (if applicable) with respect to the client, but also foster the attorney-client relationship, if ultimately retained by these clients. Upon providing an initial consultation with a potential client, an attorney should prepare a clear and concise engagement letter specifically addressing the attorney’s willingness to provide legal services only in accordance with the terms of the engagement letter, the identity of the client, the scope of the legal services to be provided, a description of all fees and expenses that may be incurred in connection with the representation, the manner in which the fees and expenses will be billed, the right to withdraw from the representation for non-payment of fees or in the event of a conflict in accordance with all applicable law, and any other matter the attorney believes is critical to the representation of the client.
By taking the time and making the effort to provide a client with a thorough, yet concise, engagement letter addressing the specifics of the proposed representation, an attorney can avoid unknowingly commencing the attorney-client relationship and the related consequences, while fostering clear and open communication with the client.