Why Declinations Really Do Need to Be Tracked

I’ve always been curious about why some attorneys never take the time to make sure that at least the name of every declined prospective client makes it into the firm’s conflict database. Perhaps there is a belief that since no attorney-client relationship was formed, no subsequent conflict could arise. Perhaps others believe that the risk of some unscrupulous person trying to taint them is nothing more than an unlikely hypothetical so why waste the time. Besides, any attorney worth their salt can spot an attempt to taint from a mile away and would be able to avoid it before it ever became a problem.

Speaking personally, I view the above beliefs as excuses that miss the point. Conflict situations can and do arise even if no attorney-client relationship has been formed, and the problem of becoming tainted isn’t limited to situations where an unscrupulous person is playing games. Attorneys need to track declinations because ABA Model Rule 1.18 Duties to Prospective Client, now widely adopted, places distinct obligations on an attorney who has been approached by a prospective client for the purpose of possibly establishing an attorney-client relationship. Where obligations arise, recordkeeping obligations follow.

Think about the disqualification provisions found in Rule 1.18. In general, an attorney cannot represent a client with interests materially adverse to those of a prospective client in the same or a substantially related matter if the attorney received information from the prospective client that could be significantly harmful to that person in the matter. If declinations are not being tracked in your conflict database, the odds of missing this type of conflict rise because, and let’s be honest here, memories are short, particularly after saying no. Making matters worse, there is no language in this rule that says don’t worry about any of this if a few years have passed. I can assure you that attorneys have been disqualified from current matters due to conversations that occurred years ago.

Now, there is some good news in this rule as well. If an attorney has received disqualifying information, representation is permissible as long as informed consent has been obtained in writing from both the affected client and the prospective client; but again, if no record of the prior contact with a prospective party exists, the opportunity to obtain informed consent can easily pass you by.

The key is in learning to identify which declinations to track. Some attorneys will choose to make this an all or nothing decision. As I see it, these folks either end up tracking way more than is necessary or have problematic gaps in their conflict database. Thankfully, there is a middle ground. For example, I see no need to track a declination if the prospective client’s contact was limited to a simple “no” response to a question like “Do you do securities work?” and no additional discussion regarding the prospective client’s matter occurred. In fact, I wouldn’t even bother sending out a formal declination letter in situations like this.

Things start to get a little murky when a prospective client calls and wants to talk but refuses to share complete contact information or identify any of the principal parties in his or her legal matter, if for no other reason than an unwarranted fear about being billed for the call. Again, as long as this prospective caller did not share any substantive information about his or her legal matter, there is no need to update the conflict database.  Although, if I gave a little generic legal advice during the call, I still might make a note of the call with whatever limited information I obtained and keep that in my declined matters file.

Problems become real once a prospective client shares something substantive; and I do appreciate the challenge here. Trying to prospectively identify what may or may not be problematic and potentially disqualifying information later on isn’t always easy. This is why I would argue that the conflict database should be updated anytime a conversation with a potential new client is substantive in nature to any degree. Yes, you may not have the names of all the parties and may not have all the details. It doesn’t matter, track the names you do have and keep a record of the information learned.

I know that some attorneys view this advice as just another headache they have to deal with and so they often don’t bother to follow through. Then there are those who try to avoid the headache by consistently placing limits on the information obtained at first contact. As a risk guy, I like this approach. All these attorneys want to know is the names of all involved parties, the type of matter, etc. The goal is to obtain any and all relevant information that would enable the attorney to conduct a thorough conflicts check prior to entering into a substantive conversation. Only after making an initial determination that no conflict exists will they move forward with an intake interview and allow a more substantive discussion with a prospective client to take place.

Limiting the information gathered upfront isn’t as burdensome as it might seem because requiring identifying information at first contact can be a very effective screening tool. Prospective clients who refuse to provide the requested information are often not serious about hiring an attorney. Sometimes they are simply shopping for some free legal advice (and remember that free legal advice does not mean advice without liability). Prospective clients that provide the requested identifying information generally are serious about hiring an attorney, and will understand your request. This means that your initial “conflicts screen” can be a timesaver and who couldn’t use a bit more time?

If you are one who doesn’t track declinations and will likely continue to choose not to in spite of all I have shared, I have this to say. Yes, claims or disciplinary complaints for failing to track declinations are not on fire. That said, I recently took another call from a lawyer trying to work through Rule 1.18. Seems he had a conversation a few years back with an individual in regard to a criminal matter. Now a prospective client is wanting to hire him to sue this individual for harm that arose as a result of the past criminal matter. The information he obtained years ago turned out to be problematic to say the least. My point is these kinds of situations do come up from time to time and when they do, if you’ve been tracking your declinations, you’ll have the necessary information available to make the right call.