Initial Consult Fee ≠ A/C Relationship

Posted by

We recently addressed the ethical implications of the initial, would-be client interview. As we discussed, the lawyer owes certain duties to a potential client and those duties vary from those owed to former and current clients.  Whether an attorney-client relationship is actually formed can dictate whether a lawyer has a conflict of interest down the road when representing a new client.  A recent decision out of the North Dakota Supreme court illustrates this concept.

The case centered around a child custody dispute.  The family law attorney (“Attorney”) had initially met with the child’s maternal grandfather (“Grandfather”) regarding custody issues as it pertained to the child’s mother (“Mom”) against the child’s father (“Dad).  The meeting was classified as an initial consult for which Attorney charged a $100 fee.   No additional meetings occurred after the initial consult.  Attorney was then subsequently retained by Dad to represent him in a proceeding to modify his parenting schedule against Mom.  Mom then filed a motion to disqualify Attorney when it was revealed that Attorney had previously met with the Grandfather regarding Mom’s case.  The court granted the motion and Dad then filed a disciplinary complaint against Attorney.

The state disciplinary board found that Attorney violated Rules of Professional Conduct relating to conflicts of interest (R.P.C. 1.7) and duties owed to former clients (R.P.C. 1.9).  It found that when Attorney accepted a $100 fee for the consultation to discuss Mom’s case, it resulted in an attorney-client relationship and Attorney was required to treat the Grandfather as a former client. As a result Attorney breached her obligation to her former client when she represented Dad, who had materially adverse interests in the same or substantially related matter.

On appeal, the state supreme court determined the evidence did not clearly and convincingly establish that the initial consultation created a lawyer-client relationship.  It found that a lawyer may charge an initial consultation fee without necessarily creating a lawyer-client relationship.  The existence of such a relationship depends on the particular circumstances of the case, “including the conduct of the parties, the circumstances of the consultation, the nature of information exchanged, and any agreements between the parties.”

In this scenario, Attorney advised all her potential clients during the initial consultation that she was meeting with them in a limited capacity and would not agree to become their attorney until she reviewed all the information and deadlines discussed during the initial consult.  She also informed potential clients that she was not their attorney as a result of the initial consultation.  As a result, the court found that no lawyer-client relationship was formed by the initial consult in order to invoke the duties owed to a former client.  Rather, the initial consultation resulted only in a “potential client” relationship under Rule 1.18.  Therefore, Attorney was not prohibited from representing Dad unless she had acquired significantly harmful information pertaining to Grandfather or Mom as a result of the initial consultation.  The court found that Attorney had not acquired such information, and therefore there was no conflict of interest.

This case serves as another reminder of the need for attorneys to be mindful of their initial contact with a potential client.  Taking steps to clearly define the parameters of the initial consult and limit the scope of the information exchanged can help to avoid any potential confusion as to whether a lawyer-client relationship is formed.  Additionally, as we previously discussed, conducting routine conflict checks before taking any case is crucial to avoiding the potential pitfalls that can later arise by an alleged conflict of interest.