Limited scope representation – allowing lawyers and clients to limit legal services – is a concept whose time has come across much of America and it may be making a much-heralded formal entrance in New York – soon.
On Nov. 5, 2016, the New York State Bar Association House of Delegates approved a resolution to explore and, where appropriate, expand limited scope representation (LSR) plans for low- and moderate-income persons in civil matters. The resolution seeks to expand representations for the millions of New Yorkers who need help in civil matters and cannot afford it.
But this well-intentioned proposed expansion of legal services raises a number of difficult ethical and practical hurdles for practitioners that may take some careful drafting and thoughtful analysis before its benefits are fully realized.
To digest the concept, some background and insight may help New York lawyers considering this “a la carte” option to providing legal services. LSR, in concept, is not entirely new in New York, especially in matrimonial matters and pro bono services. In retainer agreements, matrimonial attorneys frequently limit their work to only divorce matters and exclude preparation of qualified domestic relations orders or representation in post-judgment enforcement actions. As one court noted, unbundling of services – or limited scope services – “are ever more common, and in family law and bankruptcy law in particular.”
The New York Court’s Access to Justice Program has also modeled other limited services to indigent litigants. The American Bar Association has permitted LSR under its rules for more than a decade. The New York State Bar Association has similarly endorsed LSR, in the absence of law or court rules, as ethical if the client has given informed consent, the representation is reasonable and the limitation is not prejudicial to the system of justice.
The justifications for LSR are many. Most significantly, it expands the availability of legal services and narrows the evident “justice gap.” It can reduce court congestion by minimizing delays caused by unrepresented litigants unfamiliar with procedural and substantive rules. In New York, the state bar estimates 1.8 million individuals appear in the courts without counsel annually. Finally, some commentators suggest LSR can keep attorneys competitive in a challenging marketplace and complement rather than combat the “do-it-yourself” (e.g., Legal Zoom)” mentality circulating on the internet.
LSR in other states
Other states are ahead of New York. In New Jersey, for example, the rules permit an attorney to “limit the scope of representation if the limitation is reasonable under the circumstances and the client gives informed consent.” Mississippi has the same rule, but if such a representation was unreasonable under the circumstances the attorney must advise the client of the need for further legal services.
Furthermore, Mississippi’s rules, consistent with those from other states, expressly permit lawyers who undertake pro bono assignments to represent clients that would otherwise have a conflict with a firm’s clients and limit any resulting disqualification only to the participating attorney and not the entire law firm. This aspect of the rule is designed to allow attorneys from larger firms to actively participate in pro bono representation without disqualifying the entire firm if a conflict arises.
Obstacles to LSR
Several hurdles remain before the concept achieves widespread acceptance by the bar. First, the concept requires an exacting disclosure of the limited nature of the attorney’s services to the client in a detailed retainer agreement. In addition, in a number of states, the rules require “informed consent” by the client to the limited representation. The risk that a client, especially a less sophisticated and inexperienced litigant, may not understand the limits of the attorney’s services and may not give “informed consent” will be a risk for any attorney seeking the limited scope status.
Second, LSR attorneys will need to resolve to whom they disclose their limited representation. Arizona court rules, for example, provide that an attorney must file a notice of LSR with the courts detailing that there is a written agreement regarding the representation and specify the matter, hearing or issues on which the attorney will represent the client and whether the attorney will accept service of papers. If the attorney has a limited role, then he may need to advise opposing counsel whether they will accept service of papers or other document unrelated to their limited representation.
Third, LSR also impacts communications between clients and opposing counsel. Both attorneys will need to understand the limited role of counsel in deciding whether the opposing counsel should contact the client or his LSR counsel on various aspects of the litigation. Attorneys will need to be cautious when dealing directly with a litigant who has LSR on some – but not all – aspects of the legal matter. Furthermore, attorneys will need to re-examine their malpractice coverage to assure that LSR work is explicitly covered by any malpractice policy.
Fourth, some states, California among them, expressly provide for undisclosed representation, which allows an attorney to “draft or assist in drafting legal documents” but not “appear” in the case. California goes a step further and allows a litigant in a family court matter to seek a court order for fees for services provided by an undisclosed attorney for drafting documents, even though the attorney is not required to disclose his involvement in drafting the document. The California courts have upheld attorneys’ fees awards to LSR counsel. However, in the bankruptcy setting, an area where LSR may be more readily utilized, several courts have cautioned against unbundling legal services, which may cause attorneys to forfeit fees, and create other ethical complications.
Ghostwriting pleadings – a second cousin to LSR – has also drawn judicial comment because the subject is somewhat in limbo because, while there is an apparent rising tide of federal court decisions condemning ghostwriting as unethical, advisory opinions from numerous bar associations have opined that the practice is permissible. Some federal courts have allowed it when a LSR notice is filed. Drafting and presenting briefs to a court in response to a motion to dismiss was permissible when a notice of LSR was filed. The Second Circuit in New York declined to sanction a ghostwriting attorney because Rule 11 of the Federal Rules of Civil procedure only requires the signature of the attorney of record. The Rhode Island Supreme Court overturned sanctions against three attorneys who had engaged in “ghostwriting” without disclosing their identities but directed that future ghostwriting should only occur if the client gives informed consent and the attorney signed a document, disclosed their identity and the extent of their involvement.
Fifth, most states require that attorney withdrawals from LSR follow the same rules for withdrawal of full-services attorneys. The Arizona rule contains a withdrawal provision that mirrors New York’s practice: Any withdrawal without the client’s consent requires motion practice but if an objection is filed, the court is required to hold a hearing to determine whether the attorney had “completed the limited representation for which the attorney appeared.”
As LSR has been recognized in court rules, an increasing number of courts have wrestled with the ethical issues raised by its implementation. In Matter of Torvinen, 790 NW2d 67 (2010), for example, an attorney had closed a real estate deal and, later it turned out the purchase was encumbered by a parking lot lease drafted by his law firm. The Wisconsin Supreme Court concluded that the attorney had engaged in only a “very limited scope representation” of the first client at the closing and representing the opposing client, in enforcing the prior lease agreement, was not unethical.
Similarly, in Matter of Breckenbridge, 78 SE 2d 466 (S.C. 2016), an attorney represented both a lender and the borrower at a real estate closing. The attorney had the borrowers review a “dual representation disclosure” but the attorney failed to “properly disclose the limited scope of his representation” and failed to notify the borrowers that the mortgage would be net funded. The South Carolina Supreme Court reprimanded the attorney because the attorney had failed to inform the borrowers that he would not supervise the disbursement of the loan proceeds.
The concept of limited representation may also present challenges as courts shift to electronic filings. In a recent Colorado matter, the attorney under a LSR was listed as the counsel of record and received notices of electronic filings, as the federal computer system required when filings occurred. The court held that the limited scope counsel was required to “keep the plaintiff informed of all relevant filings regardless of the limited nature of the representation.” As the court concluded, if a LSR exists, the attorney must carefully – in writing, demarcate the exact nature of the duties that he has agreed to perform or risk sanctions.” The court held it would decline to accept any pro se motions because the litigant was represented by counsel, even in a LSR. In another federal case, a district court appointed an attorney to help a pro se litigant understand the “exhaustion of remedies” doctrine but, as the court acknowledged, the attorney was dragged into a host of other issues outside the scope of his limited representation.
A final glimpse of the potential ethical and legal potholes of LSR in New York is found in MC v. GC, 25 Misc. 3d 217 (Sup.Ct. Bronx Cty 2009). In that matter, a young associate at large law firm, agreed to represent a wife in a divorce action, even though she had never handled a matrimonial case and she had no training. The young attorney gave incorrect advice to the wife, which led to a stipulation that the court later vacated. The attorney understood that she was only retained pro bono for an uncontested divorce, a form of LSR, but because the attorney gave inaccurate advice on issues involving the contested divorce, the court vacated the stipulation. This cautionary tale demonstrates that competent representation is essential in LSR work and an attorney, working on a voluntary pro bono matter, may not be able to limit the scope of representation in a way that undermines the effectiveness of the representation.
In short, the state bar’s resolution should move New York closer to a full embrace of LSR. But the eventual rules, the requirement for a precise and detailed “informed consent,” malpractice considerations, disclosure of the attorney’s limited services to the courts and opposing counsel, restrictions on communicating with counsel and the opposing litigant and the requirement for diagnosing and communicating with clients on limitations in the delivery of the legal services while ideally increasing legal services for millions of poorer residents pose significant challenges to the next generation of New York attorneys.
Judge Richard A. Dollinger is a member of the New York Court of Claims and an acting Supreme Court Justice in Rochester. He participated in a panel discussion on limited scope representation before the Monroe County Bar Association in September 2016.