Law Firm Client Relations and Communication 2 — Questions and Answers
Question 1: What is a retainer fee?
- An upfront payment made by a client to secure an attorney's services (Correct answer)
- A refundable deposit held in escrow by the court
- A flat fee charged for every court appearance
- A monthly subscription to a law firm's services
Correct answer: An upfront payment made by a client to secure an attorney's services
A retainer fee is an advance payment made by a client that is held in trust and drawn upon as the attorney performs work.
Question 2: What is 'client trust accounting' and why is it critical?
- Maintaining separate accounts for client funds to prevent commingling (Correct answer)
- Tracking the profitability of each client file
- Reporting client assets to the IRS on behalf of the client
- A method of billing clients in advance for projected fees
Correct answer: Maintaining separate accounts for client funds to prevent commingling
Client trust accounting requires keeping client funds in dedicated accounts separate from firm operating funds, which is a core ethical requirement.
Question 3: When should an attorney send a client a status update?
- Whenever there is a significant development or at regular intervals agreed upon with the client (Correct answer)
- Only when the client specifically requests one
- Only at the conclusion of the matter
- Once per year regardless of activity
Correct answer: Whenever there is a significant development or at regular intervals agreed upon with the client
ABA Rule 1.4 requires attorneys to keep clients reasonably informed, which typically means updating them at significant milestones and at agreed-upon intervals.
Question 4: What is 'client counseling' in legal practice?
- Advising a client on their options and the consequences of each course of action (Correct answer)
- Providing psychological therapy to distressed clients
- Coaching a client on courtroom behavior
- Training clients to conduct their own legal research
Correct answer: Advising a client on their options and the consequences of each course of action
Client counseling is the process by which an attorney advises the client on their legal options, risks, and consequences to help them make informed decisions.
Question 5: Which of the following best describes 'managing client expectations'?
- Clearly explaining realistic outcomes and timelines from the start of representation (Correct answer)
- Promising favorable results to keep clients happy
- Avoiding difficult discussions about fees
- Delegating all client communications to support staff
Correct answer: Clearly explaining realistic outcomes and timelines from the start of representation
Managing client expectations means providing honest, realistic assessments of likely outcomes, timelines, and costs so clients are not surprised.
Question 6: What is a 'closing letter' at the end of a legal matter?
- A letter confirming the matter is concluded and formally ending the representation (Correct answer)
- A document filed with the court upon final judgment
- A letter offering the client a discounted retainer for future work
- An invoice for outstanding fees only
Correct answer: A letter confirming the matter is concluded and formally ending the representation
A closing letter formally notifies the client that the matter is closed, ends the engagement, and often includes instructions for retaining their own copy of documents.
Law Firm Client Relations and Communication 2
What is a retainer fee?