June 28, 2019

CSG Law Alert: The Role of the Engagement Letter in Setting Client Expectations and Avoiding Legal Malpractice Claims

A recent Appellate Division decision illustrates the importance of a solid engagement letter that sets forth both the scope of the engagement as well as any limitations on the scope, i.e., what the lawyer is not being retained to do. In Murphy v. Shaw, Docket No. L-0869-13 (decided June 21, 2019), the lawyer was successful in having a verdict against him reversed. But the real dispute was over the scope of the engagement. The client contended the scope of engagement included not only representing her in a municipal court action but also to sue several individuals – including the arresting officers, a municipality, and her insurance carrier – while the lawyer contended he was only retained to represent the client in the municipal court matter. The Appellate Court correctly noted that RPC 1.2(c) expressly permits an attorney, with the consent of the client, to limit the scope of representation, citing Lerner v. Laufer, 359 N.J. Super. 201, 217 (App. Div. 2003). The Court then focused on the Murphy/Shaw engagement letter, which expressly referred to the municipal court action by name, was limited to services performed while representing the client in municipal court, and made no mention of other claims against other individuals. The point to note, however, is that if the engagement letter specifically stated something like “we are not being retained to handle any other matter arising out of these facts, including civil claims against the arresting officer and the municipality,” it is possible that the time and energy spent to litigate the malpractice case in the first instance may have been avoidable.