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Sealing the Deal: How to Negotiate Fee Agreements

By Stephanie Francis Ward

November 7, 2011, 9:44 pm CST

Podcast Transcript:

This podcast is produced by the ABA Journal. We bring you the latest legal news every day from around the Web. Visit us online at ABAJournal.com.

Stephanie Francis Ward: If someone says they’re going to hire you as a lawyer, in most situations it doesn’t really mean anything until you have their payment in hand. So how can you move a potential client to a paying client—in an ethical way, of course? I’m Stephanie Francis Ward, and that’s what we’re discussing today at the ABA Journal Podcast. Joining me are Diane Karpman, a Los Angeles lawyer whose work focuses on defending legal ethics matters; Howard Miller, a Los Angeles commercial litigator; and Greg Siskind, an immigration lawyer in Memphis, Tenn.

My first question is for you, Diane. If someone has told you they want to hire you, they just need to get business together before they go ahead with it, what is appropriate in terms of checking in with them to see when they’re ready?

Diane Karpman: Well, about ten years ago I wrote an article for the ABA GP Solo Magazine and indicated at that point I would no longer take lawyers as clients. My client base is entirely made up of lawyers who didn’t do email and had a certain familiarity with computers. And because of that, I will start emailing them an hour later. Usually in my area, there might be something that’s relatively hot that we have to step on right away. And law is not for the faint hearted. So I don’t know what a reasonable period of time is when their house is on fire.

Stephanie Francis Ward: When would you let it go, if you’re not getting a response but they don’t tell you, “Look, I don’t want to hire you.” If they keep on saying, “Maybe,” when would you let it go?

Diane Karpman: Well, one of the things I like to do is make myself indispensable. When I talk to someone, I start sending them ethics opinions and other things that are directly on point. And then after an hour of discussion, or several emails, I’ll say, “Well, I’m going to assume you’re all taken care of and just move on.” So at that point, they either respond appropriately, in my opinion, by sending money or saying, “I’m getting myself together. I’ll contact you in a day or two.” Or, I’ll just go forward.

Stephanie Francis Ward: OK. Howard, what do you think? What’s appropriate for checking in with someone who’s a potential client?

Howard B. Miller: Well, I think in many ways it’s like voir dire in a jury trial, where a big chunk of the trial is over when voir dire is over—even before the trial begins. The key element, I think, here is when the contact is initially made if it’s a new client—which I think the discussion is focusing on. And when the contact is made, I think the nature of the discussions that take place before the client decides to hire you is critical to how the relationship develops. And I think that requires candor on the part of the lawyer—a real discussion with the client about what the client’s goals are as a person or a business.

I find all too often someone walks in, for example, with a piece of litigation that has a retainer and the lawyer automatically takes it because it’s business, so long as all the ethical requirements check out. But in terms of the relationship, I think it’s important—even before the client engages you—to have a real discussion with the client about what the client’s goal is in coming to you. What’s the goal of the litigation? Is it just to win? What are the implications for the business? What is the client looking to? What are the client’s candid expectations about cost and time?

And it’s the nature of that discussion that begins to build an attorney/client relationship that’s a true relationship, and not just based on what a retainer agreement says.

Stephanie Francis Ward: Have you had those discussions, Howard, where you tell the person, “You know what, I don’t think I’m the right lawyer for you?”

Howard B. Miller: No, I’ve said that on many occasions. And I’ve also talked to a very large number of people out of filing suit by upfront telling them, “Look, this is what’s involved. This is how much time is going to be involved in depositions. This is how much time you’re going to be in trial.” I talk to them candidly, if it’s a business, about what the opportunity cost is for them to be focusing on the past instead of the future. There clearly are times when people should bring suits, but I think it’s tremendously important to have that realistic discussion with clients about—in my case—what the litigation means with great candor, upfront. And that avoids a lot of problems in the future.

Stephanie Francis Ward: When it’s a potential client who’s thinking about hiring you and you talk them out of it, do they often come back to you with other matters?

Howard B. Miller: Oh, yeah. The intangible here is trust. Not only do they often come back, but come back with a real sense of trust, because it’s clear that they were dealing with a lawyer who wasn’t just out to get every piece of business that possibly could be gotten, but who was genuinely interested in the client as a person or a business, and what was good for them.

Stephanie Francis Ward: And Greg, how often are you willing to check in with someone who might hire you? And how do you go about doing it?

Greg Siskind: My personal practice is mostly physician immigration. Diane made a comment that I think is appropriate for our practice as well, which is that even well in advance of our beginning actual legal work for that client, we need to be indispensable to them. And for us, it’s the point when the physician and the employer match actually happens. When an employer hires a doctor, that’s when the immigration work would begin. But for us, we may be contacted by a doctor a couple of years before the doctor finishes their training to ask questions so that they know how the process works.

And in that case, we would—for example, I might see if the doctor wants to be on our newsletter list. We have a healthcare immigration newsletter. Or something that our firm tries to help with that not too many other firms can do, is actually to help the physician find employment. We represent a lot of hospital systems. We have a website that helps link up our clients to physicians that are seeking employment. If we can be playing that indispensable role in the matchmaking process, then obviously our chances of getting the immigration work later on go up significantly.

Stephanie Francis Ward: Greg, how did you focus on immigration work for physicians? It seems like, perhaps, it might be easier to get the paperwork for physicians than other professions coming to the States.

Greg Siskind: Well, actually it’s quite the opposite. It’s probably one of the most complex areas within immigration law. And a lot of immigration lawyers that do employment-based immigration steer clear of the doctor cases just because of the level of complexity of the work. So that’s always good when you’re trying to build up a niche practice area, to find something that most other people—where there are a lot of barriers to entry, such as it being a very complex area.

How I got into it, actually, is I started my practice in Nashville, Tenn. I’m in Memphis and go back and forth between Nashville and Memphis now. But when I was getting into immigration 20 years ago, I was told by many people in Nashville and elsewhere that that was a poor choice of a specialty. There just wasn’t going to be enough work in the area. And one of the things I did was set up one of the first websites in the country. But with respect to the doctors, in terms of getting work from there, I focused on that because Nashville is a Silicon Valley for healthcare companies, and I knew there was a lot of work potentially in that area.

And with the firm I started with, I was doing corporate and securities work for healthcare companies. So I knew that practice area. I also knew that I was going to have difficulty competing with firms in California and New York for the computer companies, the banks, and the big companies that just weren’t in Tennessee. So I think that finding the right niche practice area that’s suitable for where you are geographically or where your expertise is is important. And that’s how I got into that.

But it’s also a practice area that I don’t usually worry about whether clients have the ability to pay. I also don’t worry about whether they are going to hire a lawyer. A lawyer is going to get hired in the process, for the visa. There’s just too much at stake in a physician recruitment. And the question is, which law firm is going to get hired, not whether a law firm is going to get hired. So that’s where my focus is.

Stephanie Francis Ward: Is there much competition in that area?

Greg Siskind: Not that much. I chair a national bar organization for physician immigration lawyers. And I would venture to say there’s probably about 25 firms around the country that probably do about 90 percent of the work in that area. There are a lot of firms that do a little bit of work in that area, but as far as firms that really have a strong focus on it, there are not that many.

Stephanie Francis Ward: I have a question for all of you. When a potential client comes to you, are you willing to work with them on what they can pay you and how they can pay you? And if so, how? Diane, do you want to go first?

Diane Karpman: I’m frankly not willing to work with them. Because my practice is unique and I only represent lawyers, I really can’t leverage my hours. So my clients really only want to work with me. I can’t say, “Well, let my associate do this or that.” And that actually drives my prices up because there’s only so many hours in a day and I’m an hourly biller. So we don’t take contingency fees. I’m pretty much unwilling to work with them. I will work with governmental authorities. And on occasion, if it’s a hugely high profile case that I have some interest in, I will work with them. But very, very rarely.

Stephanie Francis Ward: OK. And I’m assuming you take a retainer?

Diane Karpman: Oh, yes.

Stephanie Francis Ward: OK. And they work through it. Howard, how about you?

Howard B. Miller: Well, the firm I’m with now, and have been for 10 years, is a pure contingency firm. That’s all we do.

Stephanie Francis Ward: I see.

Howard B. Miller: So that’s not the kind of issue—but I’ve dealt with this issue in the past. And it seems to me that it’s really important to have a real understanding of the client’s ability to pay and to work out a fee arrangement that makes sense against the value that’s being created. In a way, Diane and Greg and I may be in a different situation here than a firm that faces the question you’ve asked. Greg has a niche practice with a great specialty that’s in demand. Diane—same thing. She’s an expert in her area. And we do contingency work.

But I think for the lawyer that’s out there now, especially in an age when the billable hour is under real questioning by so many people—again, you have to work it out. And if it’s a question of lack of resources of the client, you need to work out some alternative arrangement, even if you bill by the hour. Maybe do some on contingency. If you represent a defendant in litigation, that’s a very, very difficult thing to do. And I think lawyers are really asking for trouble by undertaking representation where it’s pretty clear that at some point the client won’t be able to pay.

This has become an issue in an area of practice none of us practice in. But in family law, there was a commission appointed by our judicial council to look at this. And one of the things they found out—their main focus was other things, but this was interesting—is that some lawyers will, in family law cases, take a significant retainer up front. And then as soon as they’re through the retainer and the client can’t pay, seek to be removed from the case. And it’s one of the reasons that, in California family law courts, so many people wind up being in pro cur and unrepresented.

Diane can talk about the ethics of that, but I think to undertake representation where you know upfront that there will be great difficulty in continuing it through to the end raises a whole host of questions that lawyers are best to stay away from.

Stephanie Francis Ward: OK. And Greg, how about you? Are you willing to work with clients on fees?

Greg Siskind: We do. Although, I should mention at the outset that one of the reasons I left a large law firm was because I didn’t want to work on an hourly basis. And for the 17 years my firm has been around, we’ve billed on a flat fee basis. So we have a menu of services and flat fees for them. And that’s important, because when clients know upfront what the costs are going to be for the process, they’re going to be a lot less likely to have problems on the backend, where clients don’t pay you because they had sticker shock when they got the bill. They know upfront exactly what it’s going to cost for what we’re going to be providing.

But we do work with clients. In a lot of cases—especially since our fees are not inexpensive—we need to work out a payment plan for our clients. And for some of our clients—if it’s a physician hiring individually—we know while they’re in residency training, they’re paid a very low salary. And then as soon as they start their job, their salary may go up by anywhere from five to 10 times the salary when they enter private practice versus what they made in residency.

So we may, on our flat fee, charge a relatively modest amount upfront and have the first number of months of payments at a very low amount, and then time our payments for our services to go up once we know they are making a paycheck where they can afford to pay us a higher amount. So that’s an example where we might customize our payment schedule for the client.

We also represent large hospital systems, which don’t have that problem as far as ability to pay. But in those cases, we may adjust our fee schedule downward just because they are providing us a regular stream of work and we have economies of scale when we work with them over and over on matters. So that’s one way where we might work with them to reduce our fees, mainly to reward them for being an important client.

Howard B. Miller: Stephanie, if I can intervene?

Stephanie Francis Ward: Mm-hmm.

Howard B. Miller: Greg should really be congratulated for this. He’s been doing this for a number of years. He was way ahead of the curve. This is the future of law practice, which is determining value for services rendered, not just the automatic keeping of hours, which has caused so many problems at all ends of the spectrum. And when I started practicing—as a matter of fact, the bills that went out at the end just were for professional services rendered, a set amount. And this client thought it wasn’t worth that—there was a discussion and there was an adjustment.

The billable hour then came in as what amounted to an artificial metric. Because people don’t like paying for time. They like paying for value. In Diane’s case, people get the value and the time is a metric for it because of her specialty. But except for rare cases, I think, in law practice today, all lawyers have to think of how they adjust what they charge for their services to the value that’s delivered. Because that’s ultimately what people are looking for, what clients are looking for—and what Greg does.

Stephanie Francis Ward: I wanted to ask you, Diane—I know it’s pretty common for fee disputes to come up in attorney discipline matters. What do you advise your clients on fee agreements?

Diane Karpman: I do a program on this every year at the Beverly Hills Bar, and write repeatedly—I’ve been writing the California Bar Journal for about 15 years now on a monthly basis. And the California State Bar has free sample fee forms available online. And your listeners can either email me and we’ll send a link, or they can go to Google and do “sample fee forms”. And although they’re Californian—which means they’re useful for 200,000 lawyers—they’re useful for many more than that number because these are clauses that have been tested since about 1987. These are about 31 pages of potential clauses.

And why throw the dice with ambiguity and vagueness being interpreted against the lawyer, when you have these clauses that are really a guide to these problems? When I have a state bar investigation and it’s about a fee agreement, then it’s sort of a gift to me. Because I know the state bar in California doesn’t deal with fee agreements. It will be referred out or to the mandatory fee arbitration panel. And in fact, as a way of proactively dealing with a potential fee dispute with a client, I have advised lawyers to obtain the proper forms and send them to the client. So if the bar sends my client a love letter, I’m able to say, “Well, obviously this is a fee dispute and isn’t within the purview of your investigation.”

And the other great thing about using the state bar fee forms is that if I’m acting as an expert witness, or if I’m at the State Bar of California, or if it’s in a fee dispute, when you walk in with the blessed sanctified Good Housekeeping Seal of Approval fee agreement, you’ve already won half the battle. So I teach fee agreement tune-ups constantly. I strongly recommend these forms. Of course, all of the clauses won’t be useful for everyone. But they’re free, they’re online. And I think they’re highly useful for most people.

Right now we are suggesting—I have some celebrity lawyer clients—we’re suggesting very strongly firm arbitration clauses. Because if you do have a dispute with the client, why have it all over the local press and in the media? So that’s just a change we’re using right now.

Stephanie Francis Ward: And Diane, maybe this is an odd question to ask, as you said you don’t negotiate on your fees. But I’m curious. I think there’s this idea that very successful attorneys won’t negotiate on fees because they don’t need to. And certainly, that’s true in some cases. But do you think that is as true as perhaps everyone thinks in this economy? And perhaps more people are negotiating on fees than we realize.

Diane Karpman: Well, I often say lawyers do much more pro bono than anyone ever recognizes. And I only wish I knew when a case was becoming pro bono. You know, because sometimes that happens—I mean, that happens to everybody. But I like Greg’s system of the value billing as things increase. I think my area is so niche practice that there’s not a whole lot of negotiation. Frankly, I have clients that will say to me, “Sweetie, you don’t know what you bring to the table.” So if my name is going to go on something—I’m bringing two decades of practice in this area and a certain reputation—I don’t think in certain areas as much negotiation is going on.

Tom Morgan has a terrific book out called The Vanishing American Lawyer. And parts of that are available online free. And he raises this concept that if you are in a niche practice then you have some sort of security in these dire economic times. So I am in that type of a niche practice and worked hard to get there. I think Greg has probably done the same thing. And it does buttress you from the economic issues that we’re all dealing with right now.

Stephanie Francis Ward: OK. I’m curious, because you mentioned your niche practice. How do you determine what to charge? Did you find out what other ethics defense attorneys with your experience are charging and how to do that?

Diane Karpman: Yes, because we will see them in expert witness depositions. I’m an active expert witness in legal malpractice and I’m very active in class actions. And it will be part of the expert witness report as to what they are charging. So that’s one of determining it. And oftentimes I’ll charge just a little more because I’m bringing my reputation to the table. And that is worth something.

Stephanie Francis Ward: In terms of setting up fee agreements, is it ever ethical to trade services for fees?

Diane Karpman: You know, it’s interesting, the states are sort of in a split about this. And most of the opinions came out in the ’80s. But for example, Abraham Lincoln bartered for a pistol that was used during the Mexican Revolution. So bartering for services is something that goes way back, although obviously we didn’t go to law school because we were going to accept chickens. And clearly, our families are not going to be able to be maintained in the lifestyle to which they’ve all become accustomed if we were accepting chickens or other things. But bartering has a history. And it is questionable in North Carolina, permissible in Missouri, prohibited in Maryland, prohibited in Texas, not per se prohibited in Utah, OK in New York if you pay taxes.

And one of the issues in these bartering circumstances is, is it a direct barter between the client and the lawyer, or is there some sort of organization or service that’s going to receive a portion of the legal fees? We all know, going back to Dickens’ time, you can’t split legal services fees with non-lawyers. So that’s a well-established principle. And the way these concepts are really being tested right now with social media is on sites like LivingSocial and Groupon.

For example, North Carolina just did an opinion saying Groupon is ethically prohibited for North Carolina lawyers, whereas a fellow named Mr. Redler went in Missouri and got an opinion saying that Groupon is acceptable. He was selling estate planning. And the regulators of Missouri approved of it, and so he’s able to give these steep discounts. But one of the things that Howard raised—and it’s really important for us to be thinking about it—although we may be permitted to do something, is it really a good idea in terms of professionalism? Because we’re not selling a car wash. We’re selling our time and our focus and our professionalism.

So if you give a client such a steep discount on day one, are they going to expect and anticipate—and possibly justifiably require—that kind of a discount down the road? So that’s something you need to be thinking about. And Groupon and these services also raise issues involving solicitation and some of those problems that vary throughout the United States.

Stephanie Francis Ward: And I think that issue of giving someone a deep discount to begin with can cause problems. Maybe they don’t value your services. Howard and Greg, do you have thoughts on that?

Howard B. Miller: Well, there’s another side to that. It all depends how and when you do it. For example, I have—over the years and still do today—have clients—for example one, without naming him, in the entertainment industry, who I’ve handled major litigation for. But in between several pieces of major litigation, he regularly calls, on what’s going on in his life and what deals he’s negotiating, and asks for offhand things on strategy and some of the legal issues. And I just do it. We have a relationship with trust, so I’ve never even added up the value, if there were time to it, of the amount of help I’ve attempted to give in those situations.

But we both know that any time there’s a major case that comes up, he’s going to come to me and we’re going to handle it. I think it goes to the relationship. If somebody walks in the office cold, and you try and get them to be your client by giving a discount, that’s one thing. If you’ve represented someone for years who needs some help, you don’t want to be in the position of billing for 15 minutes of time or 20 minutes of time. You just give it to maintain the relationship. Because I think the real relationship you want to develop with your clients is the old-fashioned counselor relationship, where people trust you and come to you.

So I think the answer is, it all depends when and who. But there’s circumstances under which making yourself available to give people help is just a very good thing to do.

Diane Karpman: Stephanie, can I just comment on that?

Stephanie Francis Ward: Of course.

Diane Karpman: Earlier in the conversation—and Greg picked up on this—is the idea that I like to make myself indispensible. So my clients all know they can call me 24/7. And if they have an issue going on, I’d rather preload it. So they’ll call me or email me, “Is there an ethics opinion on this?” And I just send it out to them. That’s part of that indispensability quotient. If it’s a preexisting client, it’s not worth my time to write down, as Howard was suggesting, a 15-minute interview. It’s not worth it. I just want to get it done and move on to the next issue.

Howard B. Miller: No, I think one of the things here that Diane has said and what Greg has talked about—what we’ve all talked about—is that there’s a theme here that’s important to all of us. There’s a relationship with clients beyond the formal retainer agreement for each individual item. I mean, Greg has spent years building his relationships with hospitals and through his website and the work that he does. And I think that many lawyers have lost sight of that. That you ultimately build relationships with people, and it’s from those relationships—and helping them, providing them with information, and giving them a sense of confidence—that ultimately brings in the legal business.

You have to think that way, in terms of relationships, rather than just in terms of whatever the particular representation is at the moment.

Stephanie Francis Ward: Greg, do you have anything to add to that?

Greg Siskind: As I’ve mentioned before, I work on a flat fee basis. And I try to develop the relationship early with clients. And one of the things that tied into what Diane and others were saying is that we don’t start billing until sometimes well toward the later parts of the process, once we actually can start handling the immigration work. But for example, I don’t charge clients or prospective clients in the physician area for all the initial phone calls and conversations that I may have about the process, mainly because the more information that they have that I can provide them with, the more likely it is that the deal is going to happen and I’ll be getting the legal work on the end.

So it may be that I’m several hours invested without ever sending a bill out on the front end for a physician or hospital that’s recruiting a doctor. And I think that a lot of lawyers basically are so concerned about losing any bits of time in the process that they, I think, they steer clients away. Whereas if you’re willing to give a little away on the front end, you can payoff big on the backend.

Howard B. Miller: I don’t know if you watch Curb Your Enthusiasm, Larry David’s TV show, there’s a wonderful scene where he bumps into his psychiatrist in line at the movies.

Stephanie Francis Ward: Um-hmm.

Howard B. Miller: And they talk for 20 minutes or whatever and then he gets a bill for that time. And that’s exactly the kind of thing I think we’re all saying watch out for.

Greg Siskind: Right.

Stephanie Francis Ward: Let’s switch gears a bit and talk about beauty contests. Howard, as partner at a well-known successful litigation firm, what advice would you give to lawyers who are starting out at their own firms about beauty contests? How can they bring it and convince potential clients that they can do good work, if not better, than a bigger firm that’s more well known and perhaps more expensive?

Howard B. Miller: I think today, except for some bet-the-company litigation—and even sometimes there—but putting that aside, in a lot of litigation clients are hiring lawyers not law firms. They’re looking for people who can get stuff done efficiently. And if there’s a true beauty contest, I think it’s the work that’s done before you walk in the room, to learn as much as possible about the client, about what the dispute may be about. The more preparation you’ve shown before you walk in the room, the greater an indication you have as to being available and what you can accomplish afterwards.

I just think learning about the individual or the business—and today, because of what’s available on the Internet and for all sorts of other reasons, you can find out an astonishing amount of information very efficiently. And dropping the right information at the right time—very funny, if you just like a funny story. I once got a major client before I was with Girardi & Keese—an absolutely major client, as a matter of fact, one of the large banks in the country. I do a huge amount of work for them. Because, in an interview with the general council I made a reference to Christopher Marlowe, to something from a play by Christopher Marlowe.

And the GC looked at me and he said, “You know, I have a master’s degree in English literature. Marlowe was my specialty.” It was a famous quote. “I haven’t heard anyone use that quote in 20 years.” And that essentially was the reason that I got that particular business. I kicked myself afterwards for not having found out what the GC’s background was. It just happened to be accidental. But I think that kind of knowledge about people is just vital to having people develop trust in you.

Stephanie Francis Ward: And Greg, what do you think about the beauty contests? And how can smaller firms really get the client to hire them?

Greg Siskind: Yeah. First of all, it’s flattering when you hear from—in my area, for example, it’s a company with a household name that potentially has a lot of work. Although I think we’ve gotten a little bit more savvy over the years about the process and when it’s best to potentially take a pass. Because it’s hard in a lot of cases, to do that when there’s potentially a lot of work that can come in. But we ask ourselves a couple of questions—one is, you know, to the extent that we can find out, why—usually you don’t know exactly why they’re leaving the firm that they’re leaving. But you might be able to find out whether—without them even having to tell you which firm is doing the work—find out whether that firm is in the running or not to keep the work.

Because in a lot of cases, at least in my field, what’s really happening with these contests is, they think the firm they’re working with is a little expensive and they’re trying to see if they maybe find a new firm. But more likely they’re trying and push down the prices of the firm that they’re with so that going in you’re about to put a whole lot of work in. And the odds of actually—any other firm that’s competing and getting the work may be less than you think. And you can also a lot of times learn about the values of the company that’s putting the request for a proposal out, based on the kinds of questions that they’re asking in the work.

And if it looks like, for example in our area, that they see this as commodity work and are not as focused on high service or the quality of the work—or in our case, for example, we have fewer matter staff per attorney and fewer paralegals per attorney than some firms that are very high volume firms. You can pick up on a lot of that from the request for proposal itself. And then also, you can hopefully have a conversation as well with the company that’s putting the proposal out if the proposal is not giving enough information.

But we’ve actually passed much more frequently in the last couple of years on requests for proposal. We usually stand a better chance when a firm seeks us out specifically, because they know about our reputation.

Stephanie Francis Ward: Hm.

Diane Karpman: You know, I agree with Greg. I don’t like beauty contests and have, as of late, refused to participate. But I have seen—and this is important for your listeners—I have seen participation in beauty contests give rise to viable motions to disqualify due to the exposure to confidential client information. So prior to engaging in that, it’s probably a good idea to obtain a consent or a waiver from the potential client to your ability to take future business and not be conflicted out.

Howard B. Miller: And that raises the whole question that was highly debated in California, and is used by a great many firms now, which is a kind of blanket waiver of any future conflict. There are intellectual property litigation shops now, especially in patent litigation, that as a matter of course, in their standard retainer agreement, they basically have a blanket waiver of any future conflict. Is that appropriate?

Diane Karpman: Howard, I wrote a cover article for The LA Lawyer about four years ago, about the use of blanket consents, or boilerplate consents. I personally don’t think that a you-waive-everything-for-the-rest-of-your-life type of waiver is going to hold up. But they haven’t been litigated yet. And major firms throughout the United States are using them. It’s just that no one has had the guts to try to test it yet. As we all know, a waiver is a known relinquishment of an appreciated right. So when you’re waiving everything, what are you appreciating? And what do you know you’re waiving? I don’t think it’ll hold up.

Howard B. Miller: No, I was just going to say—there are some of that I’ve seen that are fairly narrow, that only talk about waiving a conflict where someone is engaged in litigation. That’s the one you don’t waive if someone is in litigation against you, but you waive other things. A lot depends on the sophistication of the company—not just dealing with the general council. But if you ask the company to get outside advice on whether the waiver is enforceable or not, I think a lot will turn on what the waiver says, who has been engaged, and the nature of the client.

Diane Karpman: Well, Howard raises a very interesting issue. And this is something we’re seeing emerge during the last decade. And that is the greater emphasis being placed on the concept of the sophisticated client who’s got council. And maybe our fundamental idea of one-size fits all with our rules is not really accurate. It doesn’t reflect today’s economic powerhouse corporations that can basically dictate requirements to a client. When you have a sophisticated client who’s got outside council, who’s going over every document—and in that instance, I think an informed written consent would hold up and the client’s feet would be held to the fire.

But that’s different than a family law matter or criminal law matter. So one of the things you have to look at in terms of these consents is the context and the client’s status.

Stephanie Francis Ward: OK. I want to thank you all so much for your time. I really appreciate it.

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You’ve identified a target client, made a good connection, and they say they want to hire you. But no fee agreement has been signed yet. ABA Journal Podcast moderator Stephanie Francis Ward talks to lawyers from a variety of practice areas about ways to ethically seal the deal.