By Von S. Heinz and Brian Pollock

© 2012 This article was originally published in the printed magazine COMMUNIQUÉ, the official publication of the Clark County Bar Association. (September 2012, Vol. 33, No. 9). All rights reserved. For permission to reprint this article, contact the publisher Clark County Bar Association, Attn: COMMUNIQUÉ Editor-in-Chief, 725 S. 8th St., Las Vegas, NV 89101. Phone: (702) 387-6011. 

As attorneys, we tend to focus on how to avoid being sued by a client in the first place. After all, the lawyer’s role is to protect the client’s interests and to take the actions necessary to secure this objective. No lawyer wants to face disciplinary action or a malpractice lawsuit, let alone the anger and disappointment expressed by the client whose matter was mishandled. But sometimes mistakes are made. Filing deadlines are missed. Statutes of limitations are blown. Conflicts of interest are overlooked or perhaps ignored. Mistaken, misplaced, or even plainly wrong advice is given. What should a lawyer do when an error is made? And now that the error is recognized, has a conflict of interest arisen between the lawyer himself and his client?

Ethical duties when a mistake happens

Sometimes mistakes can be corrected and that is the end of it. Other mistakes may impose a duty to withdraw from representation and inform the client that it now has a potential malpractice claim. When the lawyer recognizes that he has made a mistake, he has potential obligations to both his client and to his malpractice (sometimes “errors and omissions”) carrier. Foremost, the lawyer is obligated to meet her ethical obligations to the client. The two primary ethical duties to keep in mind are the duties to communicate with the client, including keeping the client reasonably informed and to avoid impermissible conflicts of interest. Nevada Rules of Professional Conduct 1.4, 1.7 and 1.8.

Nevada Rules of Professional Conduct

But how does the lawyer know if the mistake is such that there is now a conflict of interest between her and her client? The primary resources are the Nevada Rules of Professional Conduct (Nevada Rules) and the ABA Model Rules of Professional Conduct. Keep in mind that, while the preamble and comments to the ABA Model Rules of Professional Conduct have not been enacted through the Nevada Rules, they may be consulted for guidance in interpreting and applying the Nevada Rules, unless there is a conflict between the Nevada Rules and the ABA preamble and comments. Id. 1.0A. The Nevada Rules are clear: failing to comply with an obligation or prohibition imposed by a rule is a basis for invoking the disciplinary process. Id. 1.0A(c). Yet violation of a rule “should not itself give rise to a cause of action against a lawyer nor should it create any presumption in such a case that a legal duty has been breached.” Id. 1.0A(d) (explaining that while the rules “are not designed to be a basis for civil liability” or to be “invoked by opposing parties as procedural weapons,” they are “standards of conduct by lawyers,” and “are designed to provide guidance to lawyers and to provide a structure for regulating conduct through disciplinary agencies.”).

Determining if there is a conflict of interest

At what point does a conflict exist? Most courts and other authorities are in general agreement that some combination of the following factors is relevant: (1) How clear-cut is it that the lawyer was negligent? (2) Can the error be remedied without harm to the client? (3) How severe are the potential consequences of the mistake for the client, assuming that the error cannot be cured? Each of these factors pose the same ultimate question: What is the likelihood of a substantial malpractice claim against the lawyer as a result of the mistake in question? Using this standard, the extreme example exists when both the lawyer has committed an error and the client has threatened a malpractice claim. At this point, a clear conflict exists because the client and the lawyer have become direct adversaries. But the client does not have to express the threat of a malpractice claim in order to create the conflict. Indeed, the greater the risk that a lawyer will face a substantial malpractice claim due to the error and the greater his personal interest in the client’s ongoing matter, the more difficulty he will have providing impartial advice, and the more likely it is that his representation of the client will be materially limited.

Consider these steps

If facing a possible malpractice lawsuit, consider the following steps:

• Tell the malpractice insurer even if the client has not filed suit. Failure to report could lead to a loss of coverage. Check the policy’s required notice provisions, limits, and deductible. Also, review provisions relating to the selection of counsel to defend your firm.
• Alert the lawyers involved. Get together, review the lawsuit, and request each attorney’s cooperation as the case moves forward.
• Hire an outside firm that specializes in malpractice cases. Professional liability is a specialized area; someone who knows the rules, procedures, experts, and standards for causation is needed.
• Make sure the firm has attorneys experienced in the specific practice area involved in your case. This may mean retaining a full-service firm.
• Assign a point person. Ideally, a firm’s Ethics Partner/General Counsel should be the primary contact for outside counsel.
• Be guarded in discussions. Just because attorneys at your firm are discussing the claim, it doesn’t guarantee the communication is protected by attorney-client privilege. Hiring an outside law firm helps make clear what is privileged.
• Issue a gag order. To avoid potentially damaging and embarrassing comments, staff and attorneys should avoid written and verbal case discussions, including email and social media communications. Regularly remind employees that the gag order extends outside the office too.
• Save information related to the case. Get the IT department to help make sure preservation obligations on all documents and electronic data are met.
• Fix mistakes. Ignoring problems won’t make them disappear. Address the issue right away to avoid more trouble. Sometimes a conflict of interest arises between you and a client and you need to withdraw or get a client waiver for continued representation. You may also want to pursue ongoing ethical training to help your firm identify and confront potential issues before they lead to a lawsuit.
• Stay calm. As you know, lawsuits can take an emotional toll while a resolution is being worked out. Try to find ways to relax. After the dust settles All lawyers make mistakes, and unfortunately, sometimes those mistakes result in potential malpractice claims. If and when confronted by this situation, take a deep breath and keep the above tips in mind.

Founding partner of Lewis and Roca ’s Nevada practice, Von S. Heinz routinely counsels and defends lawyers and law firms in a variety of matters, including legal malpractice.

Arizona lawyer Brian Pollock belongs to Lewis and Roca’s Professional Liability group and practices from the firm’s Phoenix office.

By Paul C. Ray

© 2012 This article was originally published in the printed magazine COMMUNIQUÉ, the official publication of the Clark County Bar Association. (September 2012, Vol. 33, No. 9). All rights reserved. For permission to reprint this article, contact the publisher Clark County Bar Association, Attn: COMMUNIQUÉ Editor-in-Chief, 725 S. 8th St., Las Vegas, NV 89101. Phone: (702) 387-6011. 

When I first opened my law firm two years ago, after 19 years of practicing law, I asked an experienced accountant friend what the secret is to having a successful new business. He replied that there is one thing that many new business owners overlook but which is absolutely necessary: “Your revenue should exceed your expenses.” That is the secret to opening a successful new law business. Here are a few more ideas, coupled with some of my experiences.

Give your clients excellent service

People who know the quality of your work can give you your best referrals and recommendations. Give your clients every reason to want to give you more of their business. Do not overlook this effective method of developing business. Your excellent service will also give you increased confidence and satisfaction as well. A client I have known for several years needed a referral for an excellent attorney with specialized expertise that I do not have. After researching the options for the referral, both the client and the specialist attorney included me in their discussions that relate to the work that I do, which gave me more business. When the specialized task was complete, the specialist sent the client back to me for more work the client needed in my field. Get the word out that you present a new choice for clients People like to have choices. A demand exists for your talent, including your personal experience, education, and willingness to work diligently to help people resolve their legal problems. Let your family, friends, and associates help you spread the word that you can do the legal work that clients need.

An insurance agent friend of mine sent his mother to me for help on a fairly simple matter in my area of practice, which includes business litigation. I took care of her simple matter, and he now includes me on his list of attorneys to whom he refers his associates.

Let other attorneys and judges help you, and express appreciation to them. Attorneys like to build their own networks, and you can be a good addition to theirs. If you help other attorneys, they will often be glad to help you. In fact, many times attorneys and judges are glad, and sometimes flattered, to be asked to share their insights and experiences related to questions you may have about how to do certain tasks, if you only ask them. Be sure to respect their time. Let friendly, helpful attorneys and judges help you, and let them know you would like to help them, if the chance ever arises. More than one attorney I have known from before I opened my business has been interested to hear how my new law business is going. Talking to them about my business and asking them about theirs has led to doing some business together, including acting as co-counsel for one client and handling potential conflicts for which they needed help. Some former opposing counsel and some judges have also been helpful and expressed friendly interest in how my business is going.

Help other people out, and give some pro bono service

Everyone has work to do to get through their struggles. If you take a little time to help someone else out, you prove your own value, and you make a real contribution to the process. Most people will be appreciative of your help, and even for those who do not appreciate your efforts, you will feel good when you make someone else’s load a little bit lighter. Give some pro bono service to a person in need of legal advice, both without being recognized for your service and within the structured pro bono service programs here in Clark County.

A lady who rode a bus across town to see me from the State Bar Lawyer Referral Service had a question that was not likely to lead to the opening of a strong court case. By helping her understand why she was not likely to improve her position by going to court, I had at least acknowledged her concern, and she was very appreciative in return. One day I did a session at the Ask-A-Lawyer program at the courthouse. The people there were so appreciative, which provided some external recognition as well as personal satisfaction. By volunteering to do some pro bono work for different people, I have felt the satisfaction and rewarding feeling that gives me another reminder why I chose to be a lawyer in the first place.

Use your training, skill, and efforts to make a difference

As the owner of your law firm, you can allocate the resources to meet the most important needs of your clients and your business. Use your decision-making authority to full advantage. You have the ability to not only succeed in your business in the short term but also to make the long-term plans and decisions needed for your continued success. You know what you want to accomplish. Take advantage of your opportunity to pursue the goals that are most important to you, remembering that if sustainability of your business is important to you, you need to receive as much income as you pay out in expenses.

One of my favorite things about starting my solo practice is having the choice to do the things that I think are most important. This includes making choices to do the things I think will most benefit my clients and myself. I also enjoy being able to make adjustments when and how I think they are most needed.

While making some mistakes in starting a new business is common, I hope those who start their new law firm will persevere to achieve both professional excellence and personal rewards. If you take the plunge to go solo, I hope you enjoy your experience.

Paul C. Ray has been practicing in Las Vegas for 21 years. He founded his law firm, Paul C. Ray, Chtd. two years ago. He practices mainly in the areas of civil litigation, business, and real estate.