A Letter of Closure for All the Right Reasons
Using a letter of closure at the end of client engagements varies greatly from firm to firm — and at times among lawyers within the same firm. Among those who don’t use them, the excuses I hear include, “We do a lot of flat-fee, in-and-out kinds of things (simple wills or small business formations) and the effort simply isn’t worth it.” Or, “Most of our work is for repeat clients and we’re certainly not about to say good-bye to them.” Or even, “These matters never really close.”
Honestly, I don’t buy any of it.
Let’s start with the basics. The purpose of a closure letter is to confirm that the representation has ended, right? From this perspective, I can understand why some might view these letters as more of a good-bye, get-out-of-here statement and so don’t wish to use them. I respectfully disagree with that view, however. I see these letters as powerful marketing tools. Regardless of whether the client is an in-and-out or a long-term one, the client has honored you by entrusting you with its current legal matter. Why not acknowledge that and say thanks?
A simple thank-you note like this can do wonders in terms of repeat work and referrals:
This concludes our representation of you in this matter. We hope that you found the quality of our work to be exemplary and we look forward to working with you in the future if and when the need ever arises. Thank you for allowing us to be of service. It has been our pleasure.
If other matters remain open for the client, the letter can be modified. Instead of saying, “We look forward to working with you in the future,” you might say, “We’ll be in touch next week in regard to the Hightower matter.”
When preparing thank-you letters, write to your audience. Yes, it’s fine to have a few standard templates developed for various practice areas, but these things can and should be personalized — it only takes a few minutes to do so.
Think about Notification of File Retention Policies
Beyond the value of saying thanks, there are a number of other significant benefits that come with using these letters. The most common question I get is, “How long do we need to keep these files?” The answer changes depending on practice areas, among other issues. But many of the more senior of us have experienced the headache that comes from failing to notify clients of the firm’s file retention and destruction policy.
Remember, in most jurisdictions you’re not supposed to just get rid of old files whenever you want. Your client paid for the creation of the file and, to varying degrees, in just about every jurisdiction the client has some ownership interests in that file. Trying to inform clients that their file will be destroyed years later can be an exercise in futility. Why not inform clients of your file retention policy with a thank-you letter when you still know where they are? Seems like a no-brainer.
Use a Letter to Cut Off Unintended Reliance
As attorneys, we often view flat-fee, in-and-out work as just that. Clients, however, may see it differently. They may feel that they have finally found their family attorney or their business lawyer. If you don’t wish to have them relying on you going forward, send a thank-you letter.
Consider the simple will. If you don’t wish to take on the responsibility of informing everyone you’ve done a will for that the law has changed, cut off the possibility of an unintended reliance. Insert a statement into your thank-you letter along the lines of, “Here are your wills, they should be reviewed every three to five years because laws do change.” That might solve the problem nicely.
The same would hold true for small business formations, particularly when you make the decision to hold the corporate books for these clients in the hopes this will encourage them to return to the firm. You don’t get something for nothing when it comes to holding on to corporate books.
Don’t Fall Victim to “He Said, She Said”
A thank-you letter is also the perfect place to document final instructions to the client. Even after you’ve completed your work, there may be times when a task or two remains for the client to complete. What might happen if a client fails to do it, or does it incorrectly? I believe attorneys do a pretty decent job of informing their clients about remaining tasks. Unfortunately, attorneys don’t always document those instructions. Should the worst ever happen, the client’s memory of what was said may differ substantially from yours.
In the malpractice arena, attorneys often don’t fare well in word-against-word disputes. This is why tax attorneys regularly write final instructions in some type of closure letter as to where to sign, where to send, what amount to pay, and by what date these steps must be taken. After all, they don’t want to pay the interest and penalties after a client has missed a tax deadline and then says, “Why didn’t you tell me there would be consequences if I missed that deadline?”
When Does a Current Client Become a Past Client?
Two of the more significant benefits of a letter of closure concern conflicts of interest and the doctrine of continuous representation. For conflict resolution purposes, the question arises from time to time, when does a current client become a past client? It’s tempting to rationalize that the passage of time, coupled with a bright line, gets you there. After all, doesn’t the fact that the deed was delivered four months ago, the settlement proceeds were disbursed last year, or the contract was signed five years ago mean that these matters are concluded — and these are now past clients?
Well, conflict rules don’t speak of bright lines or the passage of time as being determinative. For conflict resolution purposes, once someone becomes a current client, they are always a current client unless and until you clearly document otherwise. This is typically done in a closure letter that clearly states something along the lines of “this concludes our representation of you in this matter.”
In fact, this is the reason conflict-savvy firms keep all letters of closure even after destroying the related file years after closing it. The closure letter is part of the conflict database because it documents who is a current client and who is a past client.
A Closure Letter Starts the Clock Running
The doctrine of continuous representation and its tolling of the statute of limitations in malpractice cases can also be a problem. Losses have been paid over work that was done 20, 30 and even 40 years in the past. How can this happen? As an example, let’s say a firm has represented a long-term client for years. The work has always focused on oil and gas leases, and the number of leases the firm has been involved with now numbers well past 40. Unfortunately, closure letters were never sent because the lawyers feared they would be received as “good-bye, get-out-of-here” letters.
But what happens if a problem arises on one of the older matters and the client sues? The firm will typically now say that the subject file was closed years ago, but, of course, there is no documentation. Continuous representation, coupled with the failure to formally close any of the long-term client’s past files, means an argument can be made that the running of the statute of limitations date has been tolled.
If the firm had simply sent a thank-you letter documenting that the work on each specific lease had been completed and the file was being closed, the outcome could be very different. Then an argument could be made that the closure letter started the clock running, and the window of opportunity to file suit has long since passed. That, my friends, is powerful stuff.
Take the Time to Save Time
Sometimes I’ll hear that the time it takes to write closure letters simply isn’t justified from a business perspective. Yes, there may be times when a more formal letter is called for but, again, remember to write to your audience. For some clients a simple “thanks for stopping by” email may suffice. The task can also be made much more efficient by developing a few templates for various practice areas. It’s going to be much easier to customize a basic standard letter than create something new each and every time.
Mark Bassingthwaighte is Risk Manager for ALPS Property & Casualty Insurance Company (ALPS), a leading provider of lawyers’ professional liability insurance. In his tenure with the company, he has conducted over 1,000 law firm risk management assessment visits, presented numerous continuing legal education seminars throughout the U.S., and written extensively on risk management and technology. Mark received his J.D. from Drake University Law School and can be contacted at email@example.com.
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