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Are You Liable for a Client's Mistake After Getting Fired?

By George Khoury, Esq. on August 09, 2017 | Last updated on March 21, 2019

They said it was bound to happen. It was just a matter of time. Now your client came to a decision, and it was one of a painful kind. Cause now it seems that you wanted to save them from liability, and that's the one thing they kept preventing you from doing. So rather than realizing they're wrong, they fire you.

After all that, are you going to be liable when your now-former client destroys their case, their business, and their life, in spectacular fashion, while misinterpreting your advice?

Of course this will vary from jurisdiction to jurisdiction, and even from practice to practice. Below, you can read some tips on how to avoid malpractice claims after getting canned (keep the salt shaker handy, as you'll need a few grains for the following).

Post-Representation Wrap Up

There's no magic bullet to stop a malpractice claim. If you gave bad advice, missed a deadline, or did something even worse, it can definitely come back to haunt you.

However, one way to ensure that a client doesn't rely on your advice to their detriment and then try to hold you liable is to insist on providing a final memo and disengagement letter. The final memo should review the entire client file, and advise which parts of the file a client is advised not to act upon until securing new counsel (which should basically cover everything you did). The former-client should initial each page of the memo, and initial by any deadlines, and sign an acknowledgement of receipt.

If your former client refuses to cooperate and meet to review your letter or memo, you can send a private courier to hand deliver it and get a signature acknowledging receipt, or you can just use USPS certified return receipt or another delivery service that requires a signature. If they have retained new counsel, send the memo on to counsel as a courtesy to help them out (you know they'll need it with that client soon enough). This final wrap-up may not provide full protection, but it can minimally mitigate potential damages.

Passing the Buck

When a client hires a new attorney for an active case in litigation, or one that hasn't been filed yet, so long as no deadlines have been missed, malpractice liability can essentially vanish (unless your actions ruined the case and caused financial damages). Helping a bad client find a new attorney might present some guilt over what you're doing to the new attorney, but a guilty conscious is probably easier to deal with than a malpractice suit.

For transactional attorneys, this is a little different, as work is often performed piecemeal. A legal memo can be relied on for years, form contracts and employee agreements get re-used time and again, and just because you are no longer a client's attorney, your liability can continue for years after your last bill was paid, or until they stop using your work. As such, it is highly advisable to ensure that all forms, or documents, you create are dated, and that you advise the former client that all forms be reviewed regularly for accuracy, and that outdated forms will not be your responsibility.

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