The Risk Manager, Summer 2009

Editor’s Note: The 2009 Kentucky Rules of Professional Conduct (SCR 3.130, effective July 15, 2009) constitute a major advance in ethics standards for Kentucky lawyers. The 2009 Rules expand, strengthen, and substantially improve the 1990 Rules. Virtually every 1990 rule is revised for clarity, important new rules are added, and comments to the rules are improved by providing practical guidance on applying the rules. Significantly, the 2009 Rules feature more risk management considerations than in the past. This newsletter identifies those considered most important for evaluation and application to your practice.

With the promulgation of these new and tougher professional conduct rules, the recent addition to our insurance program covering attorney fees up to $10,000 incurred as a result of a bar complaint could not have come at a better time. This new benefit began in December 2008 and is extended to all our insured lawyers as they renew existing policies and to lawyers new to our program when they first insure with us.


Writing Requirements

Numerous rules require that the informed consent of a client be confirmed in writing and in some cases that the client sign the writing. Rule 1.0, Terminology, includes definitions for informed consent (1.0(e)), writing (1.0(n)), and confirmed in writing (1.0(c)).

Rules that require that informed consent be confirmed in writing are:

  • 1.5(e): Division of fees between lawyers not in the same firm.
  • 1.7(b): Conflicts of interest waivers.
  • 1.9(a) and (b): Former client conflicts waivers.
  • 1.10(c): Firm conflicts waivers (cross-reference to Rule 1.7).
  • 1.11(a): Conflict waivers for lawyers formerly in government service.
  • 1.11(d): Conflict waivers for government lawyers formerly in private practice.
  • 1.12 (a): Conflict waivers for lawyer who has acted as a judge, arbitrator, or mediator in a matter.
  • 1.17, Comment (11): Waivers for conflicts created by sale of a law practice (cross-reference to Rule 1.7).
  • 1.18(d): Waivers of conflicts created by receiving information from a prospective client.
  • 3.7, Comment (6): Waivers of conflicts for lawyer or firm acting both as advocate and witness.
  • 6.5, Comment (3): Conflict waivers for known conflicts created by short-term representations in legal services programs (cross-reference to Rules 1.7, 1.9, and 1.10).

Rules that require that a client sign a writing are:

  • 1.5(c): Contingent fee agreements.
  • 1.5(f): Non-refundable retainer agreements.
  • 1.8(a)(3): Business transactions between client and lawyer.
  • 1.8(g): Aggregate settlements.

Rules that require that a client be advised in writing of the desirability of obtaining the advice of independent counsel are:

  • 1.8(a)(2): Business transactions.
  • 1.8(h): Settling claim with an unrepresented client or former client.

Note: This list is a modified version of a list prepared by Professor William H. Fortune, College of Law, University of Kentucky, for a presentation at the 2009 KBA Convention.

Writing requirements should be risk managed by conducting a training program to educate everyone in the firm – lawyers and staff – on what they are and how to comply with them. Develop form letters for your office form database suitable for tailoring to the specific situation requiring a writing. Use a file checklist for assuring that all writing requirements are met, that any required client signature is obtained, and that the file is documented showing compliance.

If writings are not presented to the client in person, send them in a way that confirms receipt. At a minimum use return service mail. Many situations will call for use of delivery services that provide proof of delivery. If you deliver by e-mail, be sure to employ a procedure that confirms that the e-mail reached its addressee. If you use electronic office files for writings, be sure office data management is well organized to file and retrieve them. Backup of office computer systems is critical to this process – daily backup is recommended.