- Saturday, August 16, 2003
|Mark Dietrichs, Swift, Currie, McGhee & Hiers, LLP and Bob Sattin, Reid and Riege, P.C.|
I. LIABILITY OF REFERRING FIRM.
A. This arises where courts are willing to find the existence of a partnership or joint venture between or among firms.
B. Protective steps.
1. If TAGLaw is used in marketing material, refer to your affiliation with a network, not affiliation with other firms.
2. Emphasize that each firm is responsible for its own work.
3. Minimize or eliminate the chance that a client will be entitled to rely on a partnership relationship.
4. Use an engagement letter.
a. This is recommended, even where not required by local rule or law.
b. Make clear that there is no sharing of fees or supervision and no sharing of profit.
c. A letter to the client from the referring firm is also recommended if there is concern about communication (due to language, custom or otherwise) by referred-to firm.
d. See sample language attached (Attachment 1).
II. ETHICAL ISSUES.
A. These arise only where the relationship among firms is, according to the American Bar Association, "inextricably linked.”
Adhering to the TAGLaw Charter and Membership Agreement provides protection.
B. Either in your standard engagement letter or where a referral is being made, disclosure to the client of the limited relationship among member firms, as suggested by the sample paragraphs, is strongly recommended (Attachment 1).
a. Referral from TAGLaw member without continued involvement in the representation by the referring firm:
We appreciate the opportunity of representing [name of client] with respect to its [nature of the matter]. In order to satisfy my firm's policy on accepting new clients and providing the services, I am required to send you this letter which sets out the basic terms which you and I discussed and upon which we have been engaged by your company.
(Reference to fees, billing procedures, etc.)
Although you were referred to us by [name of referring law firm], [working law firm] is a separate, independent law firm which will independently perform its own work on behalf of [client]. [Name of working law firm] will be solely responsible for the quality of its work. If you request, we will provide courtesy correspondence or updates to [name of referring law firm], however, it is understood that [name of referring law firm] will not be supervising [name of working law firm] in this matter nor have any obligation to review the work which we are performing on your behalf.
[Firm Name] is a member of TAG Law, a worldwide network of law firms. The network is not a joint venture or master partnership of firms. Each firm in the network is an independent organization that performs its own work for its own clients, and neither the network nor any firm has a duty to supervise any other firm's lawyers or professionals. Member firms do not share fees. By this letter you are engaging [Firm Name] only.
If you have any questions regarding our representation, fee structure or responsibilities in this matter, please let us know. If this arrangement is acceptable to you, we would appreciate your signing the enclosed copy of this letter and returning it to us for our files.
b. Engagement letter to client involving joint representation by TAGLaw member:
We appreciate the opportunity to represent [client] with respect to [nature of matter]. In order to clarify our firm's policy on representation of clients and the scope of our responsibilities as we understand them, we are sending you this letter which sets out the basic terms upon which [working law firm name] has been engaged by your company.
[Law Firm “A”] will be primarily responsible for [nature of work]. [Law Firm “B”] will assume primary responsibility for [nature of work]. Although our firms will coordinate their efforts, each law firm will perform its own work independently with regard to its specialty and will be solely responsible for the quality of its work. The firms do not accept legal responsibility for one another’s work. However, [Law Firm “A”] will have supervisory responsibility as lead counsel with regard to these matters.
Please note that each law firm will provide separate service invoices. The service invoices will identify the personnel for each law firm who are performing the work, the work performed, and the amount charged. There is no sharing of fees between the firms and your payments should be directed to each firm individually for the services which it performs in conjunction with this matter. Our firms welcome the opportunity to explain the nature of our representation in this matter and fee structure. If you have any questions regarding the responsibilities of the individual firms in this matter, please feel free to contact us, so we can address your concerns. If this arrangement is acceptable to you, we would appreciate your signing the enclosed copy of this letter and returning it to us.
c. Letter to firm receiving referral.
We have been advised by [client] that you have been retained by them in connection with [describe matter].
We have advised [client] that they are retaining you directly and, by this letter, ask that, in accordance with your usual practice, oral or written, you similarly so advise [client].