Communicating with Prospective Client

Focus on two pairs of hands over a laptop and tablet

Screening for Conflicts

Before engaging in discussions with a prospective client in which you might receive confidential information or discuss the underlying facts in any detail, it is extremely important to conduct a screening process to ensure there are no conflicts of interest that would prevent you from acting. Lawyers are ethically bound to avoid conflicts of interest.1 A conflict of interest arises when a lawyer or law firm represents a client “whose legal interests are directly adverse to the immediate legal interests of another client even if the matters are unrelated unless the clients consent.”2 A conflict of interest may also arise if representing a client “would create a substantial risk that the lawyer’s representation of the client would be materially and adversely affected by the lawyer’s own interests or by the lawyer’s duties to another current client, a former client, or a third person.”3

As such, as a preliminary step lawyers should engage in a standardized process to screen for conflicts prior to engaging in conversations with the client where they learn more than the basic facts. During the screening process, lawyers should obtain only a brief description of the matter, the name of the potential client(s), and the names of other parties involved or potentially involved.

This Toolkit does not address conflicts of interest in detail. However, the CBA’s Conflict of Interest Toolkit provides extensive resources intended to help lawyers recognize, deal with and avoid conflicts of interest across different practice contexts, including practical checklists and precedents.

Matters to Discuss Before You Are Retained

After a lawyer has performed an initial screening for conflicts, it is important to engage in an initial discussion about the scope of the retainer. An initial conversation should allow the lawyer to obtain further information from the prospective client to determine whether it is a matter that the lawyer is able to assist with, and should help the prospective client decide whether to proceed with the retainer.

There are many factors a client may need to consider before deciding to retain a particular lawyer, and many factors a lawyer may need to consider before agreeing to represent a client. Clear communication with a prospective client even before being retained can help avoid misunderstandings down the road. This should include a direct conversation about how the lawyer will charge for their services and what the client can expect with respect to legal fees and disbursements (for some clients this should include an explanation of what the lawyer means by “disbursements”). Depending on the circumstances, a lawyer may be able to offer, or a client may request, a variety of fee arrangements.

Before being retained, a lawyer and their prospective client should have a shared understanding of:

  • What services the lawyer can and will perform.
  • What services the lawyer cannot or will not perform.
  • How the matter may be staffed, including the potential involvement of other lawyers or paralegals.
  • How the lawyer-client relationship will work, including a protocol for ongoing communications.
  • The lawyer’s fee structure and billing requirements.4

The ultimate goal of these initial communications is transparency about the scope of the retainer, fees and disbursements, to help avoid subsequent misunderstandings between the lawyer and the client.

The Model Code provides that “[a] lawyer should provide to the client in writing, before or within a reasonable time after commencing a representation, as much information regarding fees and disbursements, and interest, as is reasonable and practical in the circumstances, including the basis on which fees will be determined.”5 As a matter of best practice, a written retainer agreement should also set out the lawyer and client’s shared understanding of the scope of the retainer, what services will be provided, who may perform them within the firm, and any other key information to guide a client’s expectations over the course of the file. Further detail about written retainer agreements can be found in Section 2 of the Toolkit.

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When Does a Client Become a Client?

The Code defines a client very broadly as including not only a person who “consults a lawyer and on whose behalf the lawyer renders or agrees to render legal services” but also a person who “having consulted the lawyer, reasonably concludes that the lawyer has agreed to render legal services on his or her behalf.”6

Lawyers are strongly urged to formalize every lawyer-client relationship in writing. However, lawyers should not lose sight of the fact that a lawyer-client relationship may be created without putting anything in writing, or ever rendering an account. In Jeffers v Calico Compression Systems,7 Justice Hawco of the Court of Queen’s Bench of Alberta set out various indicia that may determine whether a lawyer-client relationship exists, including:

  • a contract or retainer;
  • a file opened by the lawyer;
  • meetings between the lawyer and the party;
  • correspondence between the lawyer and the party;
  • a bill rendered by the lawyer to the party;
  • a bill paid by the party;
  • instructions given by the party to the lawyer;
  • the lawyer acting on the instructions given;
  • statements made by the lawyer that the lawyer is acting for the party;
  • a reasonable expectation by the party about the lawyer’s role; and
  • legal documents created by the party.

Not all the indicia need to be present, nor is it determinative whether the lawyer actually intended to create a lawyer-client relationship. The question to be answered is “whether a reasonable person, in the position of a party with knowledge of all of the facts, could reasonably form the belief that the lawyer was acting for a particular party”.8

For this reason, lawyers should be cautious about seemingly casual conversations with friends or neighbours about their legal troubles, which could inadvertently be construed as creating a lawyer-client relationship. When entering into a lawyer-client relationship, it should be because the lawyer and the client have chosen to do so and have come to an agreement on the specific terms of the retainer.

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The Importance of Retainer Agreements or Retainer Letters and Non-Engagement Letters

A retainer agreement is a document setting out the terms of engagement for the provision of professional services, that is signed by the lawyer and the client.  A retainer letter9 also serves to indicate the terms of the engagement, but may or may not be signed by the client.

It is hard to overstate the value and importance of a written retainer agreement or retainer letter that accurately sets out a shared understanding between lawyer and client of the existence and scope of the lawyer-client relationship. Lawyers who do not confirm the retainer in writing are introducing unnecessary risk into their practice.10

Although a retainer letter may accurately set out the terms of engagement, some lawyers do not require clients to sign the retainer indicating acceptance of the terms.  Where there is no written acceptance, this can lead to uncertainty as to whether the terms of engagement set out in the retainer letter have been agreed to by the client.  As such, best practice is to ensure that the retainer agreement or retainer letter is signed by the client.

If the lawyer chooses to proceed without a signed retainer agreement or retainer letter, the lawyer should ensure that they can demonstrate that the client received a copy, and was agreeable to the terms.   For example, the retainer letter may indicate that the lawyer will not begin working on the file until a retainer deposit is received.  Receipt of the retainer deposit may then be taken as acceptance of the terms of the engagement.

On the other hand, because a lawyer-client relationship can be created without any formality, a lawyer should consider sending a non-engagement letter when a prospective client decides not to retain them or the lawyer decides not to act. A non-engagement letter confirms that no lawyer-client relationship has been established and should not include an opinion about the merits of the matter. It can be short and simple. Sometimes, it may be appropriate to inform the non-client of the possibility of pending limitation dates and recommend they take immediate steps to consult another lawyer about any deadlines or notice requirements that could affect their legal rights.

Non-engagement letters are especially important if something has happened that might have given the prospective client the impression a lawyer-client relationship has been established, for example if the lawyer decides not to act following a lengthy interview with the prospective client.

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End notes

1 Rule 3.4-1, Model Code p. 35

2 Rule 3.4-1[1], Model Code p. 35

3 Rule 3.4-1[2], Model Code p. 35

4 Law Society of Alberta, Law Practice Essentials, 12.11 Effective Communication Part II – Setting Expectations and Boundaries

5 Rule 3.6-1[3], Model Code p. 61

6 Rule 1.1-1, Model Code p. 9

7 Jeffers v Calico Compression Systems, 2002 ABQB 72 at para 8

8 Zimak v 4244354 Manitoba Ltd. et al., 2015 MBCA 58 at para 30

9 Referred to in some jurisdictions as an “engagement letter”

10 Law Society of British Columbia, Communication Toolkit, Retainers