By Elizabeth L. Bradley
It is not uncommon for lawyers to seek to limit the scope of a representation for a variety of reasons. These might include a lack of knowledge or experience in a practice area, the need for particular expertise, or the lawyer’s or client’s limited resources. California Rule of Professional Conduct 1.2, Scope of Representation and Allocation of Authority, went into effect on November 1, 2018.
One of rule 1.2’s primary objectives is to clarify the relationship between lawyer and client. Paragraph (b), authorizes a lawyer to “limit the scope of representation if the limitation is reasonable under the circumstances, is not otherwise prohibited by law, and the client gives informed consent.” Rule 1.0.1 defines “informed consent” as a person’s agreement to a proposed course of conduct after the lawyer has communicated and explained (i) the relevant circumstances and (ii) the material risks, including any actual and reasonably foreseeable adverse consequences of the proposed course of conduct. Comment  to rule 1.2 provides that all agreements concerning a lawyer’s representation of a client must be in accord with the Rules of Professional Conduct and other law.
Examples of situations where a limitation on the scope of representation may make sense include:
- Where the lawyer is handling a transaction and seeks to exclude any related litigation or vice versa
- Matters where a specialist may be needed, such as tax, bankruptcy, antitrust, estate planning, and regulated businesses
- Appellate matters
- Potential legal malpractice claims
- Insurance matters such as coverage and potential bad faith issues
- Potential affirmative cross-claims or third-party claims where counsel is retained by an insurer to defend an insured under a policy of insurance
- Advice as to potential claims against the employer when the employer hires counsel to represent an individual manager under Labor Code 2802.
Though rule 1.2, paragraph (b), has no direct counterpoint in the former Rules of Professional Conduct, existing case law has long authorized an attorney to limit the scope of the representation. See Nichols v. Keller (1993) 15 Cal.App.4th 1672; Janik v. Rudy, Exelrod & Zieff (2004) 119 Cal.App.4th 930, 940 (the extent of an attorney’s duty to act necessarily depends on the scope of the attorney-client relationship, which “may be limited by the agreement between the attorney and the client.”) In Nichols, plaintiff consulted Lawyer 1 regarding a workplace injury and his legal rights and remedies. Lawyer 1 filed a worker’s compensation claim and associated in Lawyer 2 to prosecute the claim. Neither lawyer had a written engagement agreement. Plaintiff sued both lawyers for legal malpractice for failing to advise him as to a potential third-party claim. Lawyer 1 claimed he only agreed to file plaintiff’s worker’s compensation case and to refer him to Lawyer 2 to prosecute the claim. Lawyer 2 claimed his representation was limited to prosecuting the claim Lawyer 1 filed, and that he had no duty prosecute or advise as to any third-party claim.
Plaintiff’s expert opined that both lawyers fell below the standard of care by failing to advise of different remedies available, including a civil action, by failing to advise of the applicable statute of limitations, by failing to advise plaintiff to consult a lawyer as to his rights against third-parties, and by failing to provide plaintiff with written advice as to the precise scope of the representation. The court agreed and concluded the representations were not limited to the worker’s compensation claim: “Not only should an attorney furnish advice when requested, but he or she should also volunteer opinions when necessary to further the client’s objectives. The attorney need not advise and caution of every possible alternative, but only of those that may result in adverse consequences if not considered.” Nichols, supra at 1683-1684. The court explained: “[E]ven when a retention is expressly limited, the attorney may still have a duty to alert the client to legal problems which are reasonably apparent, even though they fall outside the scope of the retention. The rationale is that, as between the lay client and the attorney, the latter is more qualified to recognize and analyze the client’s legal needs. The attorney need not represent the client on such matters. Nevertheless, the attorney should inform the client of the limitations of the attorney’s representation and of the possible need for other counsel.” Nichols, supra, at 1683-1684.
In Janik v. Rudy, Exelrod & Zieff, supra, 119 Cal.App.4th 930, the issue was whether class counsel in an overtime wage class action owed a duty to consider and advise the class representatives to add an Unfair Competition Law (“UCL”) claim to their Labor Code claim. Because a UCL claim was subject to a four-year statute of limitations instead of the three-year statute applicable to the Labor Code claim, plaintiff claimed a UCL claim would have produced an even larger recovery than the $90 million recovery obtained. The reviewing court disagreed with the trial court’s conclusion that class counsel had no duty to advise of any potential UCL claim.
The court agreed with defendants’ analogy of a class certification order to a retainer agreement, but rejected their assertion that “an attorney cannot be sued in malpractice for failing to raise claims beyond the scope of a retainer agreement.” Id., at 940. While the scope of the attorney-client relationship may be limited by the retainer agreement, “an attorney who undertakes one matter on behalf of a client owes that client the duty to at least consider and advise the client if there are apparent related matters that the client is overlooking and that should be pursued to avoid prejudicing the client’s interests.” Id. “A cause of action under the UCL … would have been based on precisely the same practice, and subject to much the same legal analysis, as the certified cause of action under the Labor Code … Class counsel therefore were obliged to consider the advantages and disadvantages to the class of seeking to add a UCL cause of action to their complaint, to bring these considerations to the attention of the class representatives, and to take or recommend such action.” Janik, supra, 119 Cal.App.4th at 942-943.
Nichols and Janik illustrate the importance of expressly clarifying the intended scope of the representation, and obtaining the client’s informed consent. One way to ensure that a client’s consent to any limitation of the representation is informed would be to include a carefully worded provision in a written engagement agreement signed by the parties, which expressly (a) identifies the intended scope of the representation, (b) limits the representation to matters falling within the expressed scope, (c) specifically identifies any particular matters the attorney intends to exclude from the representation, and/or that the parties have otherwise agreed to exclude, (d) explains, or confirms that the attorney has explained, the relevant circumstances and material risks, including any actual and reasonably foreseeable adverse consequences of the proposed limitation, and (e) advises the client to seek legal advice as to matters outside the scope of the representation.
Though rule 1.2 does not require an agreement to limit the scope of a representation to be in writing, a written fee agreement is the most obvious place to express any intended limitation, and to make the disclosures necessary to obtain the client’s informed consent. This is especially true for fee agreements that are required to be in writing (i.e., Bus. & Prof. Code §§ 6147-6148). In fact, fee agreements required by Bus. & Prof. Code § 6148 to be in writing must contain the general nature of the legal services to be provided, as well as the respective responsibilities of the attorney and the client as to the performance of the contract. This is the ideal place to specifically set out any limitations on the intended scope.
Another option would be to document or confirm in writing any discussion or oral agreement limiting the scope of the representation, as well as the facts establishing that the client consented and that the consent was informed, in order to avoid any subsequent factual dispute. Alternatively, or where the need for limitation arises after the parties enter into a written fee agreement, it is advisable, even where not required, to reduce any agreement limiting the scope of the representation to a writing signed by the client, which simultaneously documents that the client’s consent was informed.
Whether written or oral, even a carefully crafted attempt to limit the scope of the engagement may not relieve the attorney of the duty to advise the client on matters the attorney intended to exclude. Where a client has sued the attorney for legal malpractice for failing to advise the client on matters the attorney assumed, intended or believed in good faith fell outside the scope of the engagement, even an express limitation of the engagement will be scrutinized as to whether it achieved the intended goal of limiting the scope of the representation and the attorney’s duties to the client, whether the limitation was reasonable under the circumstances as required by rule 1.2(b), and whether the client gave informed consent.
Though rule 1.2 permits an attorney to limit the scope of the representation, the Nichols and Janik decisions provide useful guidance to ensure that any attempt to limit the scope is effective. Despite the fact that both cases were decided long before rule 1.2, paragraph (b), went into effect, they also assist in understanding the reasonableness and informed consent requirements. The Janik court’s language confirming an attorney’s duty to at least consider and advise the client if there are apparent related matters that the client is overlooking and that should be pursued to avoid prejudicing the client’s interests should be enough to keep all attorneys alert as to any such “apparent related matters,” both at the outset of the representation and on an ongoing basis as issues arise throughout the representation, and to express and document the intended scope of the representation, to ensure that any attempt to limit the scope is reasonable under the circumstances, and to obtain informed client consent.
Elizabeth L. Bradley is a partner with Rosen Saba, LLP, in Beverly Hills, where her practice focuses on legal malpractice, business and employment litigation. She is a founding member of the California Lawyers Association Ethics Committee, and is the Chair of the Los Angeles County Bar Association Professional Responsibility and Ethics Committee. The opinions expressed herein are her own.