The scope of representation is crucial in an attorney-client relationship, which is why the parties enter into a retainer agreement. The retainer agreement must lay out the scope of the representation to prevent the attorney from having responsibility for legal issues beyond the ones for which the client retained the attorney. In lawsuits arising from a breach of the retainer agreement, courts look at the scope of representation within the agreement. Where the attorney does not fulfil their obligations set forth in the scope of representation in light of the retainer, the attorney may be in breach of the agreement. 

WHAT IS A RETAINER AGREEMENT? 

An attorney-client retainer is a contractual agreement for compensation between a client and an attorney that outlines the terms of the attorney’s representation and compensation for the services provided. The retainer also secures the attorney-client relationship for the attorney’s representation in a matter. As American Bar Association (ABA) Model Rule 1.2 notes, the retainer details the scope of legal service to be provided, the financial terms including fees and billing practices, and the responsibilities of all the parties. Depending on the financial terms, a client may pay a retainer fee to cover the initial costs for the attorneys’ fees. A retainer agreement is significant because it ensures that the attorney will commit to their client’s matter, but only within the scope of representation provided. 

According to the ABA, the retainer agreement defines the attorney-client relationship in two ways. First, it defines the scope of the representation. Second, it communicates the obligations undertaken by both parties. The Model Rules allow attorneys to “limit the scope of the representation if the limitation is reasonable under the circumstances and the client gives informed consent.” 

CONTRACT PRINCIPLES 

Retainer agreements often are governed by basic contract principles. However, some courts recognize that “ordinary contract principles must give way to the higher ethical and professional standards that govern the attorney-client relationship.” For a valid contract to be formed, there generally must be an offer, consideration and acceptance. Contract formation, however, is not often an issue because attorneys are advised to send non-engagement letters to prospective clients when they turn down cases. This prevents ambiguity and creates a record when there is no meeting of the minds regarding an attorney’s representation. Rather, issues may arise when there is a dispute as to the scope of the attorney’s obligations under the retainer agreement. “When performance of a duty under a contract is due, any non-performance is a breach.” 

ASSUMPTIONS AND MISUNDERSTANDINGS 

In a recent Arizona Superior Court matter, the plaintiff sued his attorney for allegedly not performing within the scope of the retainer agreement. The plaintiff requested that the attorney review the terms of transferring property within a family trust that was at issue in a prior family law matter, in which the attorney was not a representative. Although the retainer agreement clearly stated that the attorney did not represent the plaintiff in any capacity in relation to the family law matter, the plaintiff assumed the attorney would appeal the decision in the family law matter in light of the issues regarding the terms of property transfers he addressed with the plaintiff while reviewing the family trust.

The defendant moved to dismiss the plaintiff’s complaint. During oral arguments, the plaintiff tried to explain to the judge that after the retainer was signed, the parties discussed the attorney’s representation of the plaintiff beyond the scope agreed upon in the retainer agreement. However, since there was no amended retainer agreement or a new agreement for representation, the plaintiff failed to provide evidence that his attorney actually agreed to provide representation beyond the scope provided in the executed retainer agreement for the review of the family trust. 

After oral arguments, the court analyzed the retainer agreement in relation to the canons of construction under the common law of contracts in considering the defendant’s motion. The plain language of the retainer agreement at issue specifically narrowed the scope of representation. The limits of representation stated in the retainer agreement were refined to relate only to the scope of the review of the trust. The scope was even more refined to restrict representation related to any other actions, claims or matters. The provision regarding the limitation on representation also clearly stated that in order for the attorney to undertake any representation in other matters, the execution of a separate agreement or an addendum to the original retainer agreement was required. The court granted the defendant’s motion to dismiss with prejudice. This ruling is consistent with ABA rules. 

SCOPE 

The ABA Model Rules set forth what an attorney must clearly include in a retainer agreement to limit the scope of their representation: 
• The limitations of the attorney’s representation 
• The effect of the limitations on the client’s rights and interests
• Whether it is foreseeable that more extensive services will be needed
• That the limitation cannot so restrict representation as to render it inadequate to meet the client's goals
• That an attorney hired by a third-party insurer must communicate the limited representation to the client. 

The scope and limitations set out in a retainer agreement outline the boundaries for which the attorney is responsible and ensures that the parties to the agreement understand what is expected for the duration of the agreement. Attorneys limit the scope of representation by defining the specific legal services they agree to provide. A typical scope clause will state basic details about the matter, the tasks for which the attorney is responsible in relation to the matter, and limitations on the services provided. 

For example, an attorney can agree to represent a client solely in a divorce proceeding, but not in related matters such as child custody or property division. Another example could involve a transactional attorney limiting their legal services to contract review, without taking on litigation should a dispute arise. By limiting such representations, the attorney and client’s expectations are more manageable and the attorney can be protected from potential malpractice claims.

A retainer agreement containing a well-drafted provision regarding the scope protects the interests of the parties, especially those of the attorney. Where the scope provision is not detailed and well-drafted, disputes can arise regarding the duties of the representing attorney. Such issues may result in breach of contract and professional negligence claims and even ethical issues before a licensing authority for the attorney.

To prevent such issues, the retainer agreement must have strong contract terms and provisions that are abided by, and representation beyond the scope should not take place. Templates used as retainer agreements should be reviewed regularly and revised as needed, and boilerplate retainer agreements should be avoided in many circumstances.