The Risk Manager, Summer 2018
While John Murphey was representing the Village of Tinley Park on several matters, the Tinley Park Manager and Mayor called Murphey to discuss two suits unrelated to these matters brought against Tinley Park by a land developer and the Department of Justice. These suits involved the actions of Amy Connolly, the Director of Planning for Tinley Park, in making changes to the Tinley Park zoning plan to accommodate the “Reserve” development. The phone conversation lasted approximately 20 minutes in which Tinley Park claimed Murphey was provided with details regarding the Reserve development, the subject of both cases. This call ended with Murphey advising Tinley Park to settle the cases quickly.
Tinley Park subsequently sued its now former employee Connolly alleging that she breached her fiduciary duties to Tinley Park when she pushed the change to Tinley Park’s zoning plan through the Tinley Park Board. Connolly’s defense was provided by the Intergovernmental Risk Management Agency. The Agency selected Murphey to represent her. When Tinley Park learned of this it requested Murphey to withdraw because of the privileged and confidential information he received during the 20-minute call. Murphey denied receiving confidential information and refused. Tinley Park then filed a motion to disqualify Murphey.
Murphey rebutted the disqualification motion by claiming he never established an attorney-client relationship with Tinley Park with respect to the DOJ case, and asserted that Tinley Park did not disclose during the call any confidential information to him during his discussions with them about the DOJ case. The court found that since Murphey was already representing Tinley Park on other matters, it was reasonable to believe Murphey was acting as attorney for Tinley Park on the DOJ case – especially since he gave legal advice during the call. Therefore, an implied attorney client relationship existed between Murphey and Tinley Park.
Since Tinley Park is now a former client of Murphey’s, the court turned to ABA Model Rule of Professional Conduct 1.9 on former client conflicts to determine whether the DOJ case and the Connolly case were substantially related warranting disqualification. (Kentucky Rule of Professional Conduct 1.9 is identical to the ABA Model with only minor differences in the comments to the rule). The court noted that:
“… Connolly has previously told this Court and does not recant or rebut in the opposition to this motion, the DOJ case and the present case are ‘essentially the same’ with respect to the core issues. Connolly described the two cases as dealing with the same amendment to the Village code, the impact and reaction to that amendment, and the issue of ‘whether the Village’s subsequent actions with respect to the amendment were legitimate or discriminatory.’ Therefore, the Court finds that the two representations are substantially related, and the burden shifts to Connolly to rebut the presumption that the Village shared relevant confidential information with Murphey.” (citations omitted)
The court then reasoned that:
Murphey seems to assert that they had a phone call, and without reviewing the pleadings, defenses, or any other facts, he simply advised the Village to settle the case quickly based on what he had read in the press alone. Beyond being a poor way to provide advice to a client (or even to an associate simply seeking “insights”), it begs the question of what they discussed for twenty minutes. Therefore, the Court finds that Connolly has not rebutted the presumption that Murphey received relevant confidential information during the phone call.
The court having found an attorney client relationship with Tinley Park and a presumption that Murphy received confidential information within that relationship that is substantially related to the present case ordered Murphey disqualified. Village Of Tinley Park, Illinois v. Connolly. U. S. Dist. Ct, N.D. Ill., E.D., 2/15/18; 2018 WL 1054168.
Tinley Park involves the situation when a current client makes a cold call on a new matter. Murphey’s handling of that call is an object lesson on how not to risk manage a cold call or a current client call on a new matter.
The risk management question is how does a lawyer reasonably learn enough information during a cold call to determine whether to enter an attorney-client relationship without risking allegations by former prospective clients or current clients with new matters of conflicts of interest or malpractice. What follows is a gloss of our answer to this question that appeared in prior newsletters and Bench & Bar articles. *
There is an art to risk managing telephone calls to be sure that new business is encouraged, time is not wasted, and unintended attorney-client relationships with malpractice exposure are avoided. Michael M. Bowden in “How To Handle Phone Inquiries From Potential Clients” recommends office procedures that screen all incoming calls, get the caller’s contact information, get the names of other parties involved in the matter, and establish when the inquiry becomes a consultation.
- A good screening technique is for a well-trained secretary or paralegal to weed out calls concerning matters the lawyer does not want to take, provide the caller with information of the type of service the firm offers, explain typical fee arrangements, and ask the caller to make an office appointment or schedule a return call from the lawyer. If the caller is interested, contact information and names of other persons involved in the matter are then obtained. It should be made clear to callers that they are not yet clients of the lawyer – only the lawyer can accept the matter.
- Lawyers receiving calls directly should first get contact information and the names of other persons involved before discussing any facts. Since a complete conflict check cannot be done until after the call, limit the initial discussion to the essential information necessary to evaluate whether to pursue the retention. A good practice is to have a telephone consultation form pad on your desk to record this information during the call. Assign each call a consultation number and file the consultation sheet chronologically in a binder. Send a nonengagement letter if you choose not to take a matter and file it with the consultation sheet.
Editor’s Note: Lawyers Mutual’s Website offers a Client Contact Sheet that can be filled in online. Go to lmick.com, click on Resources, click on Risk Manager by Subject, under Checklists select Client Contact Sheet.
- The hardest part is controlling when a prospective client telephone call turns into an attorney-client relationship. Since the relationship may be implied from the circumstances without express lawyer acceptance of a matter, it must be made clear to a caller that a matter is not accepted simply because the lawyer takes the call. Some lawyers never give advice in response to a cold call. Others will if someone they know referred the caller or the caller is a current or former client. Sometimes you just have to go with your intuition, but complete the consultation sheet and get the contact information. Don’t forget that advice given to a prospective client during a preliminary consultation exposes a lawyer to a malpractice claim even if it is later decided not to take the matter. Avoid giving statute of limitations advice. If it appears that some limitation period is about to expire, inform the caller of that possibility and urge consultation with another lawyer immediately. Keep advice to a minimum until you have accepted the matter.
- Always use letters of nonengagement for declined cold call representations that are best sent by certified mail, return receipt requested. A former prospective client with a complaint or claim never receives nonengagement letters sent by regular mail. A typical letter:
- Thanks the prospective or current client for calling.
- Includes the date and subject matter of the consultation.
- Provides clearly that representation will not be undertaken.
- Repeats any legal advice or information given -- making sure that it complies with the applicable standard of care.
- Advises that there is always a potential for a statute of limitations or notice requirement problem if the matter is not promptly pursued elsewhere. Providing specific statute of limitations times should be avoided because of the limited information typically received in a preliminary consultation. If, however, it appears that a limitations period will expire in a short period of time, the declined prospective client or current client should be informed of this concern and urged to seek another lawyer immediately.
- Advises that other legal advice be sought.
- Avoids giving an exact reason for the declination, why the claim lacks merit, or why other parties are not liable.
- Encourages the person to call again.
* Summer 2000 Newsletter, Fielding Telephone Inquiries; KBA Bench & Bar Prospective Clients – Neither Fish Nor Fowl, Vol. 67, No. 3, May 2003.