Making Your Non-Engagment Letters 'Fail-Safe'

We are continuing to talk about “tips” that create “fail-safe” systems in your office in order to facilitate the administration of the daily activities you perform in your law firm

“Fail-safe” systems are an integral part of “administration” which is the second part that makes up every business in the world. As soon as you get a “client” or “customer,” you immediately need administrative systems in order to properly handle that customer’s business.

In continuing our discussion of “fail-safe tips” we are again going to revisit non-engagement letters to be sure that you understand the “fail-safe” concept of such letters.

Every time that I talk about non-engagement letters, I always get a collective groan from the audience. It seems as though everyone asks “are you kidding, do we really have to cover our backsides by telling people that they have not retained us to do things?” My standard answer is “not only yes, but hell yes!”

I told the story about the lawyer in Minnesota who turned down a case but failed to tell the prospective client that a statute of limitations impacted the potential case that she had. The second lawyer told the client that her statute of limitations had run, but when she commented that the previous attorney had not told her about a statute of limitations, I’m confident that his eyes lit up as to the potential of a legal malpractice claim. The claim was ultimately settled against the first lawyer who failed to tell the prospective client about the potential that a statute of limitations applied in her medical malpractice claim for $250,000.00.

When I discussed non-engagement letters earlier, the main thing I stressed was the necessity for such letters. I did not go into much detail. The purpose of this week’s article is to spend some more time talking about the “fail-safe” concept in using these letters to be sure that every single matter that you are not agreeing to take on absolutely gets a non-engagement letter.

Remember that the non-engagement letters can be a “non-engagement keep” letter or “non-engagement kick” letter. The difference is, in one of the cases you want to remind the client that they have not yet hired you but you are interested in their business, and the other situation is one that you want to refer the matter onto another source where the client might be able to seek legal representation such as a lawyer referral service and that you are not interested in taking on their legal matter for them.

Last week we talked about Prospective New Matter Reports and those Prospective New Matter Reports are the control system for the utilization of non-engagement letters. Last week I said I keep a stack of the newest Prospective New Matter Reports right on my desk as a constant reminder that there are potential matters that need to be followed up on with regard to securing new legal business for my firm.

Once the Prospective New Matter Report is filled out, and any information that you have is attached to it, it sits in this stack on my desk until such time as the matter has been either brought into the firm or “kicked” by way of a non-engagement letter.
Once a non-engagement letter is sent on a matter that is to be “kicked,” it immediately goes to the Prospective New Matter Report filing system to be filed alphabetically and to be kept for five years. Each Prospective New Matter Report is kept for five years to be sure that any potential malpractice issues regarding those prospective clients who have been “kicked,” are documented. At the end of five years, items that have remained in the system for more than five years are pitched. We will discuss this system at a later date, but it really does not entail much work in order to maintain it.

If a non-engagement “keep” letter is sent, the matter remains on my desk, but for no longer than thirty days. I review this stack sometimes weekly, but absolutely no less than once a month. I always find it interesting how small the stack is because I like to be sure too, that I am looking at these issues and making a decision as to what actions are necessary in order to follow up with the potential client to try to get the business into the firm, or to write a non-engagement “keep” letter that ultimately will end up in the file system if the client has not become a client of the firm.

If a non-engagement “keep” letter is written to the client, this letter goes to my administrative assistant to keep in her folder of Prospective New Matter Reports where a non-engagement “keep” letter has been sent. This file is reviewed with my administrative assistant no less than once a month. If the client has not come into the office in response to the non-engagement “keep” letter, then the matter is again filed in the Prospective New Matter Report files to be held five years.

One of the best ways to be sure that you review current Prospective New Matter Reports, is to actually calendar a time at the end of each month to remind you to go through both sets of Prospective New Matter Reports on your desk. This “calendared” time is best used to see if there is anything more that needs to be done to potentially get that piece of business from the client into the office.

As you can obviously tell, most of the systems that I utilize in my office are not only keyed into my marketing system, but they are also tied into the administrative system which ensures you to cover your backside by being sure that people know that they have not hired you to do anything and that a statute of limitations or other time sensitive matter may apply to their prospective legal matter.

Again, the secret is to make these systems “fail-safe.” If you utilize a Prospective New Matter Report for every possible new piece of business, and if you appropriately send out non-engagement letters on each piece of business that has not relatively immediately ended up coming into your office, and if you follow up on these non-engagement letters to be sure that you have covered yourself, you will feel very confident that you have done everything you could do to try to bring the piece of legal business into the office. You will also know that you have done everything possible to cover yourself. I have always found that the duality between feeling good about doing everything I can do to get business and doing everything I can to turn business down in a professional manner with a light tone, seems to make me feel good about myself and seems to help the prospective client feel good about their relationship with me. I always believe the test of whether or not a system is working is if reminding people about the fact that they have not hired you results in them contacting you and actually hiring you, or if reminding people that they have not hired you and referring them to another source allows the prospective client to feel good enough about you that the next time they have a piece of legal business, they contact and hire you. Both of these situations consistently happen to me.

The main “fail-safe” concept to deal with regarding non-engagement letters is to be sure that every single prospective new matter that has not relatively immediately resulted in a new client for your firm gets a non-engagement letter. Secondly, every piece of prospective new business that has not actually come into your office is reviewed no less than once a month to be sure that you have done everything you can do to both get the piece of business into the office, and if it is not coming into your office, to be sure that you have done everything you can to cover yourself.

Next week we are going to talk about the “fail-safe” nature of New Matter Reports. We have already touched on New Matter Reports in a previous article, but again, under the concept of “fail-safe” systems, we would be absolutely remiss if we did not revisit the topic.

We have quite a few “fail-safe” concepts to talk about, so for the near future, we will be talking about these “fail-safe tips” on a weekly basis. Remember, “when the space is ordered, you are free to live creatively (James Michener.).”

Happy Holidays! Talk to you next week!

Jim Wirken is a civil trial attorney and the Chairman of the Board of The Wirken Law Group in Kansas City.