|Oregon State Bar Bulletin FEBRUARY/MARCH 2011|
Choosing a Contract Attorney:
Tips for Establishing a Working Relationship
By Heidi O. Strauch
If you are interested in learning more about using contract attorneys in your practice, this article is for you. Whether or not you’ve used contract attorneys before, this article will give you tips for finding the right one and for getting the best results from the contract attorney that you engage.
The important considerations as you talk with prospective contract attorneys are: Whom do you trust to be competent, fit well within your firm’s culture, be honest, serve your clients well, and increase your profit? Once you’ve chosen a contract attorney that you trust, the most effective tool for getting the most out of the relationship is to identify and communicate clear expectations.
How Do I Find a Contract Attorney I Can Trust?
If you do not already have a working relationship with a contract attorney, talk to your lawyer friends, colleagues and law school classmates — anyone who can give you a referral to a contract attorney they’ve used in the past. The personal reference of a trusted colleague is invaluable. If this doesn’t yield results, broaden your field of inquiry, such as through the Lewis & Clark Law School contract lawyer list at www.lclark.edu/law/offices/career_services/ad_hoc/ or the Oregon Women Lawyers contract lawyer list at www.oregonwomenlawyers.org/services/. (Disclosure: I am on the Oregon Women Lawyers contract lawyer list and have sporadically used the Lewis & Clark Law School list.) Once you’ve identified potential contract attorneys, get references from them and follow up on the references. Any contract attorney should be able to give you the names and contact information for people for whom they’ve worked.
Most importantly, establish relationships with contract attorneys you trust before you need them. In the middle of a crisis with deadlines looming is not a good time to make a hiring decision: the pressure to get someone on the case will limit your ability to be selective and may affect your ability to accept a large case when the opportunity arises. A low-risk way to create these relationships is to test the waters with smaller projects to get a sense of the contract attorney’s abilities and working style.
Does the Client Have to Know?
Before you engage a contract attorney you must obtain the client’s consent. Oregon RPC 1.5(d). Client consent may generally be handled through the initial engagement letter: consider inserting language that discusses the use of contract attorneys. Once you’ve addressed the idea of contract lawyers in the engagement letter, notify the client if you plan to use a contract lawyer on a particular case. The notice will not only comply with the rules of ethics but also maintain a good working relationship with your client. (The most obvious way the contract attorney will come to the client’s attention is when his or her initials appear on the client’s monthly bills).
What Details Do I Need to Consider For Each Project?
What goals do you have for the contracted project and what are your expectations of the contract attorney? Take the time to write yourself a project memorandum. This will be time saved in your initial meeting with the contract attorney and throughout the project, as it brings focus to the contract relationship. In my experience, the hiring attorney who has taken the time to think through the parameters of the assignment receives much more value in return. Consequently, when I discuss a project with hiring attorneys, if they haven’t thought the project through I take the initiative to help them articulate their expectations.
Here are some considerations:
Location of work. Do you want the contract attorney to work from your office or from his or her own office (or does it matter)? Having the lawyer work at your office allows easier access for a collaborative project, but requires you to provide office space and supporting resources (computer, printer, fax machine, desk, etc.). When the lawyer works from his or her office you minimize your support requirements. This decision will be a function of your available resources, goals and your relationship with the contract attorney.
Scope of Work. Be clear with the contract attorney about the parameters of the project: the timing of turn-round, the format of the end product (A memorandum? Copies of pertinent legal citations? A motion suitable for filing?) and how much time you have budgeted for the project. Do you expect the contract attorney to keep track of court filing deadlines, or is this something that you or your staff will do?
Access to Client File and to Client. The contract attorney will need at least some access to the client file, depending on the scope of the project. The more responsibility you are delegating the more important full access to the file becomes. Client access will differ depending on the case, your working relationship with your client and your assessment of how the contract attorney and client will relate to each other. There is no right answer to whether or not the contract attorney should deal directly with the client, but consider from the outset what the arrangement will be.
Payment and Billing: Do you expect the contract attorney to keep detailed time sheets that your staff can then enter into your time and billing system? Or do you prefer a general bill for “services rendered?” When do you want the timesheet? At the end of the project? Monthly if it is an ongoing project? What day of the month do you need the contract attorney’s timesheets in order to include them in your bills for that month?
In most contract attorney arrangements, the contract attorney will expect to be paid by you, whether or not the client pays you. At the risk of stating the obvious, make sure that you have client funds in trust to cover the cost of the contract attorney.
Rate: The most frequently asked question I hear from new contract attorneys is “How do I set my rates?” Not surprisingly, this is one of the first questions I asked of more experienced contract attorneys when I began contract work. Practicing contract attorneys offered a wide range of numbers, based on experience, practice area and whether or not they carried their own PLF insurance. However, the most helpful answer I received from a contract attorney advised me to meet with the potential hiring attorney, ask what rate they expect to bill me out at, find out what kind of a margin they expect, and determine whether or not the resulting figure is within my acceptable range.
Of course, hourly billing isn’t the only option. You may arrange a flat fee, a contingent fee, a combination reduced hourly rate with a contingent element, or any other structure that fits your needs and fulfills the ethical requirements of RPC 1.5(d) (discussed more below).
Whether or not the contract attorney has PLF coverage, the practice area, the amount and quality of experience, and the quality of work will all affect the contract attorney’s rate. Contract attorneys who appear in court or take depositions, for example, must have their own PLF coverage. Those who perform research and writing only are not required to have PLF coverage, but you must supervise them more closely. Ultimately, perception of value is going to drive the rate you pay. The goal is to find the sweet spot that makes both parties happy.
What about ethical considerations? The ABA addresses surcharges to the client for contract attorneys in Formal Ethics Opinion 00-420. Opinion 00-420 concludes that if the cost of the contract attorney is billed to the client as fees for legal services, the hiring firm may add a surcharge, but if the attorney is billed as an expense, a surcharge is not permitted. Although the difference between a “fee” and an “expense” seems to be one of form rather than function, it stems from the client’s expectations based on the label you use. So when you add a surcharge, for goodness sake call it a fee. The amount of the surcharge is controlled by the rule requiring that a lawyer’s fee not be clearly excessive. RPC 1.5(d).
Confidentiality and conflicts: Any contract attorney that you hire is subject to Oregon’s Rules of Professional Conduct, including confidentiality with regard to the assigned project. But what about your other client files? If the contract attorney has unfettered access to your other client files, either hard copies or on your computer network, you run the risk of an imputed conflict of interest. ORPC 1.10 states that a lawyer associated with a firm shall not knowingly represent a client when any member of the firm would be prohibited from doing so. A lawyer who works with a firm on a limited basis is not considered a member of the firm unless the facts of the particular situation dictate otherwise. ORPC 1.0(d). However, it is prudent to ensure that a contract attorney does not have access to files to which he or she is not assigned, to minimize the risk of disqualification. Also, make sure that the contract lawyer maintains his or her own conflict database.
Software compatibility: WordPerfect versus Microsoft Word, Mac versus PC, and access to different versions of the same software can all get in the way of getting work product turned around from a contract lawyer. Work out these details before the project starts.
Engagement letter: Once you’ve established your initial expectations the details should be confirmed in an engagement letter. In my experience the contract attorney usually provides the engagement letter. There is an example of a contract attorney engagement letter at the PLF website. There is also a good form letter in The Complete Guide to Contract Lawyering: What Every Lawyer and Law Firm Needs to Know about Temporary Legal Services, by Deborah Arron and Deborah Guyol. (Publication information below.)
Establish relationships with contract attorneys when you aren’t in dire need, and pay attention to the details of the working relationship. This will put you in a position to get the most out of a contract attorney when the big project comes in.
Additional Resources Relating to
Hiring Contract Attorneys
Oregon Rule of Professional Conduct (RPC) 1.0(d), “Firm” and “Law Firm” defined.
RPC 1.5(d), Division of Fees Between Lawyers who are not in the same firm.
RPC 1.10, Imputation of Conflicts of Interest; Screening.
American Bar Association Ethics Opinion 00-420: Surcharge to Client for Use of a Contract Lawyer (This can be ordered from the ABA online, at www.abanet.org, for $20; it is also reprinted in the May 1, 2008 CLE materials mentioned below).
Oregon State Bar CLE, The Ethical Oregon Lawyer, Section 12.24, Relations Among Lawyers within a firm: Contract Lawyers.
Professional Liability Fund online resources at www.osbplf.org/. (From this page you will need to sign in with your bar number and name and follow the link to: Loss Prevention > Practice Aids and Forms > Contract Lawyering.)
PLF and Oregon Women Lawyers CLE: Practical Contract Lawyering, May 1, 2008. You can download the written materials for free or order a CD or DVD of the program from www.osbplf.org. (From this page you will need to sign in with your bar number and name and follow the link to: Loss Prevention > CLE > Programs on CD/DVD > Contract Lawyering.)
Arron, Deborah and Deborah Guyol, The Complete Guide to Contract Lawyering: What Every Lawyer and Law Firm Needs to Know about Temporary Legal Services, Decision Books, Seattle, Wash. (2004).
ABOUT THE AUTHOR
Heidi Strauch is a professional contract attorney based in Portland, specializing in litigation support. Contact her at firstname.lastname@example.org; (503)-201-7642; www.heidistrauchlaw.com.
© 2011 Heidi O. Strauch