Explaining for Informed Decisions

Explaining for Informed Decisions

Rule 1.4(a) tells the lawyer when to speak, and Rule 1.4(b) tells the lawyer what the speaking must accomplish: a lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation.¹ Each duty in (a) supplies an occasion for communication, such as a settlement offer, a choice of strategy, or a development in the case; (b) supplies the content. Telling a client that a decision exists accomplishes little if the client cannot grasp what the decision involves. Paragraph (a)(1), for example, requires the lawyer to inform the client promptly of any decision or circumstance that calls for informed consent,² but a client who hears only that the other side has offered $90,000 knows that something has happened and cannot yet weigh it. To weigh the offer, the client must learn what acceptance would settle, what the realistic alternatives are, and what each path risks.

The standard in (b) is written as a result, and that shapes how you apply it. The words “to permit the client to make informed decisions” name the target, so the exam question is whether the client came away understanding enough to decide. The length of the lawyer’s talk and the number of conversations matter only as evidence of that understanding. Rule 1.4 assumes a division of roles: the client makes the decisions that belong to the client, and the lawyer holds the knowledge that makes those decisions intelligent. An explanation is how that knowledge crosses over, so it is judged by whether it arrived. A lawyer who recites accurate facts in dense legal vocabulary to a client who nods without following has spoken without explaining, while a short, plain account can satisfy the Rule for a client who already grasps the issue.

“Reasonably necessary” limits the duty from the other side. The lawyer need not explain more than the decision requires, and the explanation should stay on what bears on the choice instead of burying it under detail the client does not need. How much the choice requires depends on who the client is and what is at stake. The first subsection takes up that calibration. The next two apply the same outcome-oriented standard to decisions that require informed consent and to related matters that fall outside a lawyer’s limited engagement.

Calibrating the Explanation

The phrase “reasonably necessary” fixes no quantity of explanation. It names a purpose, the client’s ability to decide, and measures the amount against the particular client in front of the lawyer.³ Two lawyers who say identical words to two different clients can therefore stand in different positions under the Rule, so the first step on an exam stem is to identify who the client is and what depends on the decision.

An explanation transfers understanding, and how much must be transferred depends on what the client already holds. A seasoned executive with her own counsel gains little from a lecture on basics. A first-time client can be misled by vocabulary that an experienced client would hear correctly. A single fixed standard would waste effort on the first client and shortchange the second, and tying the duty to circumstances avoids both errors. What counts as adequate depends on the circumstances and on the person’s experience in legal matters.⁴ Reasonableness also looks to the magnitude of the risks and the feasibility of the alternatives, so the client’s sophistication is one input among three.⁵

At the sophisticated end of the range, a person of experience generally needs less explanation.⁶ A client who is independently represented in the matter is presumed to be adequately informed, as Comment 6 to Rule 1.0 observes, and a lawyer need not tell a client about matters on which that client is already fully informed.⁷ The presumption follows from the structure of the situation. The client’s own lawyer owes the client an explanation too, so a second full tutorial from the other lawyer would mostly repeat what the client has already received.

The inexperienced end calls for the opposite treatment. A person who has rarely or never used legal services, who is not well educated, or who shows confusion or a lack of confidence deserves a more thorough explanation.⁸ Such a client often cannot tell which words in a proposal carry consequences. A term the lawyer treats as routine, like a release or an indemnity, may sound like boilerplate to someone who has never signed one, and the client’s agreement then amounts to trust in the lawyer with no real decision behind it. A nod is weak evidence of understanding, and the lawyer who relies on it bears the cost if it proves wrong. According to Comment 6 to Rule 1.0, “a lawyer who does not personally inform the client or other person assumes the risk that the client or other person is inadequately informed and the consent is invalid.”⁹ The risk sits with the party best placed to reduce it, because the lawyer can ask what the client understands and fill the gaps.

Both calls ran ten minutes, and the outcomes differ because of what each client brought to them. Sophistication does not end the inquiry, though. A large or irreversible stake, or an alternative the client has not considered, enlarges what the lawyer must explain even to an experienced client. A short call can suffice for a modest settlement and fall short for a decision that could sink the company.¹⁰

Calibration changes the amount of explanation and leaves its kind alone. Even for an experienced client, the lawyer must do more than lay facts on the table, because full disclosure covers the material facts and also an explanation of their legal significance.¹¹ The conflict-consent setting draws the same line: a bare warning that a conflict exists, followed by a request for consent, is insufficient, and the lawyer must describe what the conflict could do to the representation and the hazards it poses.¹² Consultation, as paragraphs (a)(2) and (a)(5) use the word, calls for similar engagement. It is a conversation about ramifications in which the client can react and ask questions, and a one-way announcement does not supply it.¹³

The same principle governs documents the lawyer prepares. When a lawyer has drafted a legally complex document, the lawyer should carefully explain what it contains and what its legal significance is, and a summary prepared for the client is one effective way to do that.¹⁴ Handing a first-time client the finished agreement for signature is delivery, and a client who signs it may have agreed to terms that were never understood. Walking the client through the obligations, the exit terms, and the consequences of default, ideally alongside a short written summary, is explanation. The more complex the document and the less experienced the client, the more the reasonableness measure demands. The next subsection takes up the setting where the duty to explain is most formal, the informed consent defined in Rule 1.0(e).

Informed Consent in Practice

Rule 1.4(a)(1) sends the lawyer to Rule 1.0(e) whenever a decision or circumstance requires the client’s informed consent, and that cross-reference marks the setting in which the duty to explain is most formal.¹⁸ Rule 1.0(e) defines informed consent as a person’s agreement to a proposed course of conduct after the lawyer has communicated adequate information and explanation about the material risks of, and reasonably available alternatives to, that course of conduct.¹⁹ The definition has an agreement half and an information half, and a purported consent fails if either is missing. On the agreement half, the lawyer must obtain an affirmative expression of consent and may not assume it from silence, although the client’s later conduct can sometimes support an inference of consent.²⁰ On the information half, the client’s “yes” counts only if it follows a real account of what could go wrong and what else the client could do.

Both halves exist because of what consent is used for. A client may relax a protection the lawyer would otherwise owe, such as undivided loyalty, and the Rules respect that choice because the client lives with its consequences. That respect makes sense only if the choice is a real one, so the informed-consent requirement gives the client the information and understanding needed to take part in the representation and to decide intelligently on matters that belong to the client.²¹ Without it, a lawyer who holds both the facts and the fiduciary position could turn a client’s trust or politeness into a waiver. A client also rarely knows which questions to ask about a risk never encountered before, so the burden of supplying the information falls on the lawyer, who has the knowledge. The acquiescence of a client without informed consent is “tantamount to no consent at all.”²² When the information half fails, the waiver fails with it, and the lawyer remains bound by the duty the client supposedly relaxed.

The conflict setting, where the Rules most often demand consent, shows most clearly what adequate information looks like. A lawyer who merely warns the client that a conflict exists and asks for consent has done too little.²³ The lawyer must disclose the possible effect of the conflict on the representation, reveal the other relationship or interest that creates it, describe the hazards to the lawyer’s loyalty and performance, and explain how independent counsel might handle those problems differently.²⁴ Those items are the definition’s “material risks” and “reasonably available alternatives” translated into conflict terms. The two cases that follow come from conflicts litigation, which is taught elsewhere. They appear here only to show what an inadequate disclosure looks like.

In Image Technical Services, Inc. v. Eastman Kodak Co., Kodak moved to disqualify a law firm, Coudert, that represented Kodak and also appeared for the plaintiffs in litigation against it.²⁵ Opposing the motion, the plaintiffs argued that a Kodak representative had consented and that Kodak’s continued use of the firm showed consent. The court rejected the argument. Kodak’s representatives had been told only that the firm’s San Francisco office would be involved in a brief adverse to Kodak’s interests. The firm did not explain how the representation would be adverse, that Kodak was a party, what the case concerned, or what Kodak stood to lose.²⁶ The court treated this as a mention in passing and held that a client cannot weigh a contrary interest without the details of why it is contrary, so the disclosure “cannot be construed as ‘informed.’”²⁷ It contrasted an earlier case, Jelco, where counsel twice alerted the client’s own lawyers to the potential conflict, asked whether the client wished to keep counsel on, and obtained consent on two occasions after full disclosure and discussion with the client’s attorneys.²⁸ Because the case arose on a disqualification motion, the thin disclosure cost the firm the consent defense at the moment its right to act was challenged.

In Woodruff v. Tomlin, the clients were told nothing. The opinion observes that the girls and their father were never informed by their lawyer, Tomlin, of their rights, and so could not have given informed consent to his representing them. The suits had been consolidated for trial in state court.²⁹ Set beside Image Technical Services, the case shows the information half failing in two ways: Kodak’s representatives received one thin mention, and the clients in Woodruff received no account of their rights at all. In both, the client lacked the facts needed to weigh what it was agreeing to.

What separates that scene from Kodak’s is the content of the conversation before the agreement, because the email adds only proof that the conversation took place. The conflict-of-interest rule requires each affected client’s informed consent to be confirmed in writing,³⁰ and a short written recital is sound practice for any consent that matters. A writing sent after a bare warning would confirm only that the client signed, since a document cannot supply an explanation that never occurred.

On an exam stem, a signature, a casual “okay,” continued use of the lawyer, or the lawyer’s sincere belief that the arrangement is harmless will tempt you toward the wrong answer. None of them supplies the information half of the definition. Ask what the lawyer actually communicated about risks, alternatives, and, in a conflict setting, how the other interest could affect the lawyer’s loyalty. A sophisticated or separately represented client may need much less, as the previous subsection explained, but the question remains whether the information was in the client’s hands when the client agreed. Every duty in Rule 1.4(a) opens with the words “A lawyer shall,” so the explanation that informs a consent is mandatory, and a lawyer who skips it cannot defend the omission by pointing to good intentions.³¹

Warning About Related Matters

The duty to explain does not shrink when the engagement is deliberately narrow. Rule 1.4(b) still requires the lawyer to explain a matter to the extent reasonably necessary for the client to make informed decisions,³⁴ and agreeing to a narrow engagement is itself one of those decisions. A lawyer may seek the client’s consent to a defined limitation on the services, and the consent is only as good as the explanation behind it.³⁵ Because paragraph (a)(1) requires the lawyer to inform the client promptly of any decision that calls for informed consent, the client must hear about the limitation early.³⁶ The lawyer must say plainly what the engagement includes and, even more important, what it leaves out. An inexperienced or uncertain client is owed a fuller account of that boundary than a sophisticated one, the same calibration that governs every explanation under the Rule.³⁷

The boundary raises a question the client is poorly placed to ask: what lies just on the other side of it? A person who hires a lawyer for a narrow task usually does not know what else is at stake and may assume the lawyer would flag anything important. The limitation narrows what the lawyer does and leaves untouched what the lawyer knows. Because the lawyer may be the only participant who can see that a neighboring claim exists, silence about it hands the client a false picture of the situation. When a deadline governs that neighboring claim, the false picture can cost the client the claim entirely: a limitations period keeps running whether or not anyone is watching it, and a client who does not know the claim exists cannot protect it. The warning takes the lawyer a few sentences.

The Rules draw the line in two parts. A lawyer is not obliged to provide legal services beyond the defined scope of the representation. When the lawyer is aware of other matters that are closely related, however, the duty to obtain informed consent includes a duty to notify the client about those matters and to warn about the possible loss of rights if other representation is not obtained.³⁸ The first part says what work the lawyer must perform, and it keeps the lawyer from being pulled into an engagement the client never bought. The second says what the client must be told, and it keeps the client from relying on a silence that looks like reassurance. After the warning, the client can decide whether to hire another lawyer to protect the related claim, which is exactly the kind of informed decision Rule 1.4(b) exists to make possible.

The leading illustration is Nichols v. Keller. A lawyer who undertakes to represent an injured worker for the limited purpose of seeking workers’ compensation should advise the client that a personal injury lawsuit could be maintained against a third party responsible for the injury, such as the maker of equipment used in the workplace.³⁹ The lawyer should also explain that the client’s failure to take timely action could result in the barring of that lawsuit by the statute of limitations.⁴⁰ The duty applies even though the lawyer has made clear that she will not represent the worker in any claim against the third party.⁴¹ That last detail carries the lesson. Declining the third-party claim settles who will do the work, and it leaves open whether the client knows the claim exists and is running out of time to bring it. A compensation lawyer who has learned how the injury happened is positioned to notice the equipment maker’s possible role, and the warning turns that observation into information the client can act on.

Two facts separate the first version of that scene from the injured worker’s. The first is awareness, because the duty to warn attaches to matters the lawyer actually knows about. The second is a close relationship between the known matter and the task for which the lawyer was hired. A third-party suit over the same injury is closely related to a compensation claim for that injury, while an old wage dispute has nothing to do with an eviction.

The duty has a boundary on the other side as well. It gives the client information and leaves the decision about the related matter with the client. The lawyer need not take the related matter or expand the engagement, and an exam answer that treats the warning as an obligation to do the extra work has misread the rule. An answer that excuses a lawyer who stayed within scope while knowing of a closely related claim with a looming limitations deadline makes the opposite mistake.