Limit Mandatory Arbitration Clauses in Retainer Agreements
The Delaney decision reaffirms a principle which we all should have taken from law school that, although there is businessperson component of what we do, we are, first and foremost, fiduciaries.
January 24, 2021 at 09:00 AM
6 minute read
A retainer agreement In the lawyer-client relationship, there is a built-in tension between the lawyer-professional role and the lawyer-businessperson role. That tension is often most taut at the outset. The client wants access to the lawyer's knowledge. The lawyer wants a fee. The lawyer-businessperson wants to maximize profits and minimize loss, but the lawyer-professional is constrained by rules of professional propriety.
The parties are not free to negotiate whatever terms of engagement suits them. A handshake will not do. In most cases, the terms of engagement must be in writing. There was such a writing in the form of a retainer agreement recently examined by our Supreme Court in Delaney v. Dickey, (A-30-19). In Delaney, the retainer agreement contained a not uncommon clause requiring arbitration of "any dispute with respect to the Firm's legal services and/or payment by you of amounts to the Firm". The retainer agreement designated JAMS as the private arbitration organization to handle any conflict.
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