Law.com: The Smart Solo's Guide to Joint Ventures

The following article should help those attorneys contemplating the idea of a joint venture with one or more attorneys. The article was authored by Paul Schorn and originally published on Law.com.

awyers are like hounds on a hunt: Sometimes one just isn't enough. Some cases call for a team of lawyers to come at the problem from different directions to ensure success. Solos are well-suited to joint ventures by their tremendous flexibility. They can jump into working relationships without seeking approval from any committee and can form ad hoc alliances tailored to address specific disputes. This column will address some of the questions a solo practitioner should ask before teaming up.

1. Does a joint venture make sense?

Too many cooks can spoil the broth (or the closing argument), so do not enter into a joint venture unless it clearly helps the case. Co-counsel makes sense, for example, where a dispute straddles several substantive areas of the law, a party must bring a claim in an unfamiliar venue, or the resources required or the risks involved are greater than normal. If a solo has the knowledge, experience, time and money to handle a case, he probably ought to do it himself. This is especially true given that working within a joint venture increases the time and effort it will take to coordinate representation, as each decision must be (at least) communicated, and potentially involves disagreement, discussion and consensus building (anathema to many solos).

2. Who do I want on my team?

Quality counts. A solo should strive to work with lawyers who are better than she is -- smarter, more experienced, wiser. Character counts as well. A solo should not joint venture any case with someone unless she would feel comfortable standing next to that lawyer at the counsel table in open court.

Another tip: Avoid teaming up with your identical twin. Joint ventures work best when they involve lawyers whose strengths complement each other. Each attorney should bring something unique to the case. The classic example is a practitioner in a particular area of the law who teams up with a litigator to bring a case to trial. Similarly, a lawyer in one geographical area might join forces with local counsel in an area where the case is pending, or a solo might involve a lawyer who has already had conspicuous success with a specific type of claim to increase the chances of obtaining a reasonable settlement more quickly or winning the case at trial.

3. How should we divide the pie?

Joint venturers should be clear about the division of labor. Leave no room for confusion about who will draft pleadings, answer discovery, act as the primary client contact or negotiate with the opposition. Designate one lawyer as lead counsel, whether or not suit has been filed. Come to a general understanding about the kind of decisions that each attorney can make unilaterally and the kind that require agreement.
Make clear how lawyers will handle case expenses not covered by the client. It usually makes sense to have one attorney responsible for all such costs to avoid any I-thought-you-paid-that-bill confusion, though this might not be possible where lawyers formed the joint venture to cover especially large expenses. In such cases, divide costs by categories, i.e. "I'll pay for the filing fees, business records and court reporters; you pay for the expert witnesses, mediation costs and everything else."

Of course, division of the fee must also be crystal clear -- preferably equal shares for all. But this might not make sense where lawyers do not share equally the labor or risk. If one lawyer in a two-lawyer venture carries the case expenses, she probably should receive a greater share of the fee (say, 60 percent instead of half).

It makes sense to have a written joint venture agreement; however, in the interest of full disclosure, I have to say that I've done 90 percent of my joint ventures on a handshake and never suffered a regret. It has always seemed to me that I shouldn't partner up -- even for a single case -- with anyone I didn't trust deeply.

4. What are the larger effects of teaming up?

A solo should also consider the effect of a joint venture on her practice. This type of partnership can allow a solo to work on more and bigger cases and earn larger fees. It can also increase the solo's stream of business, as battle-tested co-counsel often become strong sources of referrals. It is not uncommon for joint venture partners to become good friends -- no small consideration given the potential isolation of solo practice.

Solos who are fortunate enough to partner up with better known co-counsel when joint venturing cases can also increase their standing in the bar, like the poor farmer who entered his tired old mule in the Kentucky Derby. Told by race officials that his broken-down beast had no chance to win, the farmer replied, "I know, but I thought he'd benefit from the association."

Contrary to common perception, working as a solo presents endless opportunities for collaboration. Choosing joint ventures wisely is the key to success. Just because a solo is a lone wolf doesn't mean that, every now and again, he can't run with the hounds.

Paul Schorn is a solo practitioner with offices in Lockhart and Austin, Texas.

http://www.law.com/jsp/law/sfb/lawArticleSFB.jsp?id=1202428476148

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PA Disciplinary Board Newsletter - January 2009

This month in the PA Disciplinary Board Newsletter:

(click on any of the links to read)

The Envelope Please: Top Five Disciplinary Cases of 2008

Stories of Steel

Supreme Court: We’ll Report Negligent Defense Counsel

FAQ: Complaints against Prosecutors and Criminal Defense Attorneys

Got a Tip?

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PA Disciplinary Board Newsletter - December 2008

This month in the PA Disciplinary Board Newsletter:

(click on any of the links to read)


New Disciplinary Procedure Rules Take Effect

Judicial Court Removes Luzerne Judge

Retired: No Job, No Boss, No Worries, No . . . Fees

We’re in the Movies!

Nostra Culpa

Got a Tip?

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PA Disciplinary Board Newsletter - November 2008

This month in the PA Disciplinary Board Newsletter:

(click on any of the links to read)

Douglas Leonard Joins Disciplinary Board

New Modifications Proposed to Rules of Disciplinary Enforcement

Rule Booklets Available

F.A.Q. (Furtively Asked Questions)

Got a Tip?

Read the whole newsletter here:

http://www.padisciplinaryboard.org/newsletters/index.php

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Supreme Court Adopts New Money Handling Guidelines

(article originally published in September 2008 E-Newsletter of Disciplinary Board of the Supreme Court of Pennsylvania)

The Supreme Court of Pennsylvania adopted a major revision of the Pennsylvania Rules regarding the handling of client funds by lawyers. In its order dated September 4, 2008, the Supreme Court adopted major changes to Rule 1.15 of the Pennsylvania Rules of Professional Conduct and Rule 221 of the Pennsylvania Rules of Disciplinary Enforcement. The full text of the revisions is set forth here.

The amendments are effective upon publication in the Pennsylvania Bulletin, which is scheduled for September 20, 2008. We will have a detailed report of the changes in the next edition of the Newsletter and posted at our website, www.padb.us, within the next few weeks.

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Ethics Update on File Management

PBA Committee on Legal Ethics Defines File Handling Responsibilities

(article originally published in April 2007 E-Newsletter of Disciplinary Board of the Supreme Court of Pennsylvania)

The Pennsylvania Bar Association Committee on Legal Ethics and Professional Responsibility has issued a major formal opinion addressing several issues that arise out of the recurrent problem of file management. The opinion is posted at the Disciplinary Board Web site here. This nine-page opinion thoroughly examines the law of Pennsylvania on issues such as what constitutes the lawyer’s file, who owns different parts of the file, what a lawyer’s responsibilities are for providing file materials to a client, and how the cost of doing so should be allocated. It is far beyond the scope of this newsletter to recapitulate the reasoning and conclusions of such a comprehensive tract; any Pennsylvania lawyer who handles client files should read the opinion itself and carefully digest its analysis. This note will be limited to providing a map of the issues the opinion addresses and the major conclusions it reaches.

The opinion begins with the principle that “client files are maintained by a lawyer for the benefit of his or her principal, the client.” The Commonwealth Court case of Maleski v. Corporate Life Ins. Co., 163 Pa. Commw. 36, 641 A.2d 1 (1994), states a general principle that "once a client pays for the creation of a legal document, and it is placed in the client's file, it is the client, rather than the attorney, who holds a proprietary interest in that document." However, the Supreme Court of Pennsylvania has not spoken definitively on the issue of ownership of the file.

The Committee notes that the file materials are also essential business records of the lawyer. It identifies two separate issues regarding file possession and access: access to the file by the client while the representation is ongoing, and possession of the file after the representation ceases. It states a general rule that “items such as original client business records, deeds and other real estate records, estate papers, insurance policies, and personal papers should be returned to the client unless there is a specific agreement or other reason for the lawyer to retain custody.”

The second section of the opinion deals with what constitutes the “client file.” Primary documents establishing the events of the client’s case, such as pleadings, documentary evidence, and correspondence are clearly a main component of the file. However, “other documents relating to that particular representation, such as electronic mail messages, telephone notes, research notes, [and] billing materials” may also be part of the file, and these may exist or be stored in locations other than the physical folders of the file. There may also be internal documents arising from “administrative functions involved with running a law practice (such as assignment memos given to subordinate lawyers).” In an age of electronic practice, there may be e-mail, computer files, and other documents stored in multiple locations and with small variations between different recipients. The Committee notes that some items may not be part of the file, such as “memoranda and notes generated primarily for a lawyer's own purposes in working on the client's problem.” In light of such complexity, the Committee acknowledges that “it is nearly impossible to define on a prior basis what must be part of the client's file.”

As to who owns what in this mass of material, the Committee notes that there are two major points of view: a majority view is called the “entire file” view, which holds that “client is entitled to everything in the lawyer’s possession necessary to the continued representation of the client,” and a minority called the “limited file” view, holding that the client is only entitled to “core” materials, such as filed pleadings, correspondence and final memoranda on issues significant to the representation.” The Committee considers the majority “entire file” view as the prevailing rule in Pennsylvania.

In the third section of the Opinion, the Committee turns to the question of who bears the cost of making necessary copies of the file. The Committee recognizes that the terms of the client-lawyer agreement may shape the lawyer’s responsibilities. It notes,

Client requests for file materials, or copies of file materials, can arise in at least three separate contexts: (1) during the course of representation; (2) during transfer of representation between counsel; and (3) following representation.

The Committee believes that, in each of these contexts, the cost of copying and delivering file materials, as well as the cost of compiling and delivering the actual file, should be handled according to the agreement between the lawyer and the client regarding costs. The Committee recommends making some provision for these circumstances in an engagement letter.

The Committee affirms that generally the lawyer does have a right to make and retain copies of the file for the lawyer’s own use, but echoes Maleski in concluding that “where the client has paid for the creation of the file, the cost of the lawyer’s copy should be borne by the lawyer, absent agreement to the contrary.”

The core of the opinion lies in two compact summaries of its reasoning the Committee provides. On Pages 6-7, the Committee provides, in bold-faced type, a list of eight kinds of items it considers to be parts of the file to which the client is entitled:

1. briefs, pleadings, discovery requests and responses;
2. transcripts;
3. affidavits and witness statements;
4. memoranda of law, case evaluations, or strategy memoranda;
5. correspondence (including e-mail);
6. original documents with legal significance, such as wills, deeds and contracts;
7. documents or other things delivered to the lawyer by or on behalf of the client; and
8. invoices or statements sent to the client.

The Committee then specifies, on Page 7, five kinds of documents to which the client may not be entitled:

1. drafts of any of the items described above, unless they have some independent significance;
2. attorney notes from the lawyer’s personal files, unless those notes have been placed by the attorney in the case file because they are significant to the representation;
3. copies of electronic mail messages, unless they have been placed by the attorney in the file because they are significant to the representation;
4. memoranda that relate to staffing or law office administration;
5. items that the lawyer is restricted from sharing with the client due to other legal obligations (such as “restricted confidential” documents of a litigation adversary that are limited to counsel’s eyes only).

The opinion closes with a set of six recommendations for file management policies:

1. developing a detailed file storage, management, and retention policy;
2. a lawyer or lawyer's assistant (with supervision) making decisions as to how and when to destroy part or all of the file;
3. considering statutes of limitations, substantive law, tolling agreements or tolling jurisprudence, the nature of the particular case and the client's particular needs when deciding to destroy a file;
4. client confidentiality obligations continue after the representation ends and should be taken into account in file disposition;
5. an index should be maintained regarding all files destroyed or returned to clients; and
6. the lawyer and client can consider a specific agreement for handling the client file and data in complex cases.

Understand that this is a brief and oversimplified summary of a detailed and nuanced analysis, and no one should take this summary as a substitute for reading the opinion and carefully evaluating the many considerations it identifies in the increasingly complex process of file management. The Committee has put a great deal of thought and effort into providing Pennsylvania practitioners with detailed guidance, and members of the bar who handle client files would be wise to benefit from this guidance.

WBA Highlighted Download from Article:

PBA Memo: Client Files – Rights of Access, Possession and Copying, Along with Retention
Considerations (PDF file)

http://www.padisciplinaryboard.org/documents/PBAFO2007-100-CLIENT-FILES.pdf



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