Risk Management Tip: Break Up With Your Clients

By Jennifer Becker, Long & Levit

less-painful-when-marriage-endsConstant business development pressure can lead to behavior at odds with prudent risk management. Many attorneys are reluctant to cut the cord on existing client relationships, even when substantive services are no longer needed. To encourage clients to think of an attorney as their own, attorneys fail to make a definitive statement clarifying the relationship is at an end.

There is no information on whether this is an effective marketing technique. There are, however, concrete examples of how attorneys deprive themselves of the benefit of California’s attorney malpractice one year statute of limitations by not clearly signaling an attorney-client relationship is at an end.

Although the end of an attorney-client relationship need not be formalized, clarity eliminates questions of fact. This is essential because the existence of the relationship is evaluated not from the attorney’s subjective belief, but from the viewpoint of an objective reasonable client. GoTek Energy, Inc., v. SoCal IP Law Group, LLP (2016) 3 Cal.App.5th 1240

In Laclette v. Galindo (2010) 184 Cal.App.4th 919, the attorney and client ceased all contact after a settlement that required the client to continue to make installment payments. The attorney did not formalize the end of the attorney-client relationship, nor did he withdraw as counsel of record in the pending action, which was still on file while payments were being made. When the client sued more than a year after the settlement was finalized, the attorney asserted a statute of limitations defense.

The Court of Appeal held there was a triable issue of material fact about whether the attorney continued to represent the client during the installment payment period, despite the lack of contact or performance of substantive legal services. The attorney had not expressly terminated the representation or obtained a court order. The continuing installment payments could have required further services, as the trial court retained jurisdiction over the settlement. From an objective client perspective, it was not unreasonable for the client to expect the attorney to represent her if issues arose about settlement performance.

Yet, the attorney could have avoided this result by expressly terminating the relationship, even without the client’s consent. The representation ends when a client actually has or reasonably should have no expectation that the attorney will provide further legal services.

In GoTek, the attorneys acted with speed and clarity to document their withdrawal. The client missed, by days, filing a malpractice action within one year of the attorney’s clearly stated termination of the relationship. The client argued they believed the physical file transfer, not the attorney’s withdrawal statement, was the end of the relationship. The court noted that purely ministerial acts, like file transfer, were not substantive legal services tolling the statute. The attorneys’ clear and documented termination of the relationship allowed the attorney to benefit from the client’s tardy filing of the malpractice action.

This is yet another example of how clear communication with clients is not only an ethical obligation, it is a risk management tool.

Jennifer Becker is certified by the State Bar of California, Board of Legal Specialization in Legal Malpractice, and is Chair of BASF’s Legal Malpractice Section. She is a partner at Long & Levit,, and the editor-in-chief of Long & Levit’s Lawyers and Judge’s Blog, www.longlevit.com/blog.