From the Vault: Caution: Friends and Family Ahead

For over ten years, CLIA produced more than 70 articles for our Loss Prevention Bulletin. While discontinued in 2016, the advice shared in some of these articles is timeless and still of value. We’re curating those articles to bring you our ‘From the Vault’ series. The article below is from CLIA Loss Prevention Bulletin #20.

Lawyers often report a potential insurance claim on a matter they have taken on for a friend or relative. These are among the most embarrassing claims for the lawyer and among the most difficult to defend for the insurer.

Be especially wary if friends or relatives approach you to act in areas of law where you don’t practice. Taking on an unfamiliar kind of legal matter requires extra time and greatly increases your chance of committing an error. If you do decide to act for friends or family members, even for free, you owe the same duty of care to them as you do to paying clients. Not getting paid will not relieve you of your professional responsibilities.

To avoid problems:

• Don’t talk about the file at social occasions or around the dinner table. Make these clients come to your office. Open a file.

• Send them letters, including an opening letter setting out the terms of your professional relationship and what you will and will not undertake for them. Include whether you will bill them and, if so, on what basis. Make clear the amount of disbursements you anticipate and who will pay for them.

• Report to your clients periodically, in writing, on the status of the file.

• If you meet with them on the matter, make notes for your file. Include notes of conversations you inadvertently have in your living room or at a hockey game. Make sure their file data makes its way into your office conflicts system and into your limitations system.