Potential Client, Prospective Client, Client, or Former Client?
The conflicts rules can be extremely complex, and they sometimes involve difficult judgment calls. Foundational to the analysis is the proper classification of potential clients, prospective clients, clients, and former clients. Lawyers’ obligations to current clients are the most strict and burdensome; former clients are owed less protection; and the protections of prospective clients are the least restrictive.
A potential client might be reasonably defined is all those individuals or companies that might possibly become a client at some point. One often considers potential clients when marketing or advertising, and these individuals are owed no protection with respect to conflicts of interest. Care must be taken to avoid having a potential client become a prospective one.
Under the NY Rules, a prospective client is “a person who consults with a lawyer about the possibility of forming a client-lawyer relationship with respect to a matter.” (NYRPC 1.18(a)). Potential clients who communicate “unilaterally to a lawyer, without any reasonable expectation that the lawyer is willing to discuss the possibility of forming a client-lawyer relationship” or communicate “with a lawyer for the purpose of disqualifying the lawyer from handling a materially adverse representation on the same or a substantially related matter” are not prospective clients. (NYRPC 1.18(e)). Accordingly, a lawyer might avoid the creation of a prospective client relationship through disclaimers that would remove any reasonable expectation of the potential client of hiring the lawyer. If a prospective client relationship is created, then the protections of Rule 1.18 are owed to the prospective client.
T he rules do not define when a prospective client becomes a client, but the Restatement of the Law Governing Lawyers defines it as either when the lawyer consents to such a relationship or when the prospective client is reasonably relying on the lawyer for representation and the lawyer does not take appropriate action to correct the misunderstanding. (See Restatement of the Law Governing Lawyers §14). Care must be taken to avoid inadvertently creating a client-lawyer relationship, especially once the lawyer is consulted. But the moment the lawyer-client relationship is created, the client is owed the protections of Rule 1.7.
A client becomes a former client when the lawyer has performed all the services that she has agreed to do. A carefully drafted engagement agreement can clearly delineate when this occurs. Better still is to send the client a disengagement letter when the attorney-client relationship ends to avoid any misunderstanding. This is especially important when the representation ends earlier than anticipated, e.g., the client terminates the relationship or the lawyer does so in accordance with the ethics rules. Once a client has become a former client, the protections owed them decrease. Rule 1.9 describes the obligations of the lawyer to former clients.