Clients come in all shapes and styles, backgrounds and personalities. Some are needy; they are less knowledgeable and require handholding, they have a litany of questions and need more attention. Others are more sophisticated, understand the subject matter, have been there before and therefore ask less from you. The sophisticated client is a treat because she understands general concepts and allows you to focus elsewhere, right? Nope! The professional that takes her client lightly, hits the autopilot switch and relaxes her attention is asking for trouble. Consider this recent malpractice claim out of New Jersey.
Good risk management protocol suggests that a professional cannot assume anything when it comes to her client unless it is confirmed in writing. In a recent New Jersey lawsuit, discussed in detail here, an attorney found himself in hot water when negotiating an agreement arising from the sale of his client’s business. The client, a savvy business owner, worked closely with counsel in revising the first draft of the agreement. But the client and counsel did not discuss a particular clause within subsequent drafts that was clearly unfavorable to the client. It wasn’t until after the parties executed the agreement when the client realized the impact of the final document and sued his attorney for malpractice.
The trial court dismissed the case by way of summary judgment holding that the attorney had no obligation to explain unambiguous terms of a written agreement particularly when the client did not seek input from counsel regarding that specific provision. On appeal, the court reversed holding that there was a question as to whether a reasonably prudent attorney would have explained every term of the agreement and whether the failure to do so constituted a breach of the standard of care.
This is an unfortunate result for counsel, who may have been too focused on the big picture and assumed that his client understood every clause in the agreement. It’s understandable that counsel would expect a sophisticated business owner to comprehend certain terms of an agreement but it also may expose counsel to liability. Better practice could have been to review all of the material terms of the deal closely with the client or confirm in writing that the client knowingly limited the scope of the representation or considered the entire agreement.