Tips for Joint Representation of Spouses: Engagement Letters (Pt. 1 of 2)

May 16, 2023 | Business Planning, Family Law, General Estate Planning, Podcasts, T&E Administration

“Tips for Joint Representation of Spouses: Engagement Letters,” that’s the subject of today’s ACTEC Trust and Estate Talk.

Transcript/Show Notes

This is Margaret Van Houten, ACTEC Fellow from Des Moines, Iowa. Engagement letters are a critical step in creating professional relationships with clients. What do practitioners need to keep in mind when providing joint representation to spouses? ACTEC Fellow, Professor Elizabeth R. Carter, of New Orleans, Louisiana, joins us today to discuss this topic. Welcome, Elizabeth.

Thanks, Margaret. Before I dive in, I want to remind all of our listeners of two wonderful free resources available on the ACTEC website – the ACTEC Commentaries to the Model Rules of Professional Conduct and the ACTEC Engagement Letters. They both get revised periodically and are just wonderful resources, particularly for these joint representation issues. So, with that in mind, I have four tips for drafting engagement letters when you’re representing spouses jointly in their estate planning. I will generally refer to spouses in this podcast, but most of this also applies to unmarried, romantic partners.

Define the Scope of Your Representation of Spouses Narrowly

Tip Number One: Define the scope of your representation as narrowly as possible. This can feel a bit counterintuitive from a business perspective. Why would I want to limit the issues that I am involved in and can potentially bill for? But this really does make good business sense for a couple of reasons. First, it helps you set boundaries with clients, and it allows you to exclude any potentially problematic conflict-causing issues. For those reasons, this is also a good practice with many different types of clients.

Second, this approach allows you to efficiently convert current clients to former clients. If the scope of your representation is open-ended, then the client may continue to be considered a current client for some indeterminate time period. That can be a problem because the ethical and legal obligations that you owe to current clients are more onerous than those that you owe to former clients.

For example, in some cases, you may have an obligation to notify your current client about a material change in the law, but you would not usually have that sort of obligation if the client was a former client. Of course, you want clients to come back and to reengage you, but technically, you don’t usually want clients to continue to be considered as current clients in the interim when you’re not actively billing them for work.

So, how do you define the scope of your representation narrowly? It is obviously not going to be possible for all clients. But if you know at the outset that you’re just going to be drafting some specific estate planning documents, then it is pretty easy to limit the scope of your representation by just defining it by reference to the documents that you are preparing. The ACTEC Engagement Letters even have sample language that you can look at there.

Essentially, your engagement letter will say, “I represent you to draft these four or five documents for your estate plan. Once we finish those documents, our relationship is over, and you are automatically a former client.” Of course, you say this in a nice way. And you point out that you’re happy to do other work for them if you all agree to it in writing. By doing this, you are efficiently converting current clients to former clients. As soon as the documents are in place, then your representation is over.

Discuss How Communications and Confidentiality Work in Joint Representation

Tip Number Two: Explain how communications and confidentiality work in joint representations. This is really important because the rules are a bit different in the joint representation.

Essentially, you want to explain two primary issues. First, the zone of confidentiality is between the three of you against the world. That means you cannot disclose anything to anyone outside of the three of you. But – and this is the second issue – that also means that you are not going to keep something one spouse says a secret from the other spouse. You want to emphasize that the three of you are going to work collaboratively and that all three of you are going to communicate about the representation.

Now, the reality is that sometimes a spouse does reveal some secret to you, and you may not actually be able to disclose it to the other spouse. That is a complicated issue. But in the engagement letter, your goal is to set forth simple, clear ground rules. You want to tell them that they are not to put you in that position and that the three of you are a team. You might also want to point out that the attorney-client privilege may not apply in a later dispute between the spouses. The current ACTEC Model Engagement Letters do not do this, and it’s certainly not absolutely necessary that you do it. But you can include that type of language if you want to.

Explain Your Role as the Attorney in Joint Representation

Tip Number Three: Explain what your role is as the attorney in a joint representation. In a joint representation, your role is a little bit different than it is if you represent a client individually. Explaining this on the front end can help manage client expectations. In particular, you will want to point out that you can explain the pros and cons of various options but that you really cannot take sides or advocate for a particular position. This helps set boundaries and expectations on the front end. Again, the sample language from the ACTEC Engagement Letters is helpful for explaining this to clients.

Explain How Conflicts will be Resolved

Finally, Tip Number Four: Explain what happens if a conflict does arise in the joint representation. Generally, you need to point out that if a conflict arises that cannot be resolved, then the joint representation has to end. Conflicts that cause a joint representation to end present some thorny issues for the attorney. You might have to cease representation of either spouse. But in some cases, you might consider representing one or both spouses separately. You can address this in a couple of different ways in your engagement letter. The current ACTEC Engagement Letters basically give you two sample options here.

  • Option 1 says, “If a conflict arises, then I will cease to represent either one of you.”
  • Option 2 says, “If a conflict arises, then I will drop one of you, but keep the other. Also, the spouse that I am dropping agrees to waive any objections to that.”

The second option specifies in advance which spouse you are going to keep. But you could perhaps be a little bit more vague on that point. For example, depending on the circumstances, your engagement letter might have language somewhere between Option 1 and Option 2 of the model language in the ACTEC Engagement Letters. You might say that certain conflicts will cause joint representation to terminate and that you will assess later whether continued representation of either party individually is possible.

I do want to offer a word of caution here. I imagine many attorneys would like to obtain waivers from spouses allowing the attorney to retain the so-called “better spouse” if a conflict arises. That is basically what Option 2 in the engagement – in the ACTEC Engagement Letters – does. But you want to be cautious here.  Option 2 has two primary challenges that I see. First, it tells one of the clients, on the front end, that they are less important to you. If I’m the client, this might rub me the wrong way.

If I am the attorney and if that really is true, then maybe a joint representation was not appropriate in the first place. That being said, there are plenty of circumstances where Option 2 makes sense, and it’s not going to be offensive or problematic at the outset of the representation.

That leads me to the second consideration. This waiver language is probably not all that effective in most cases. Advanced waivers of future conflicts are not all that enforceable, and it is likely that you would still need to get an updated waiver once the actual conflict arose. In other words, you cannot just rely on the waiver language in Option 2 as giving you the protection you’re looking for down the road when a conflict actually arises. Instead, you will need to conduct a new analysis when and if a conflict arises. And you may need to get a new waiver.

  • One, define the scope of your representation as narrowly as possible.
  • Two, explain how communications and confidentiality work in joint representations.
  • Three, explain what your role is as the attorney in a joint representation.
  • And finally, Four, explain what happens if a conflict does arise in the joint representation.

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