Q: Dear Ethics Lawyer, Many of our vendors have a provision in their agreements limiting their liability related to their work to the amount of their fee, or to some other capped limit. Could we insert a similar provision in our standard form of engagement letter? For example, our firm has a primary malpractice insurance limit of $25 million. Could we include in our engagement letter a provision disclosing that, and limiting our liability for malpractice to the amount of our insurance?
A: You have asked The Ethics Lawyer the rare question that can be answered unequivocally and without much discussion. Model Rule 1.8(h)(1) precludes an agreement prospectively limiting a lawyer’s liability for malpractice, unless the client is independently represented in making the agreement.
In theory, this might permit negotiation of a limitation of liability provision if the prospective client is represented by independent counsel in the matter, but otherwise the answer is no. Comment 17 to the Rule does clarify that this does not preclude agreement for arbitration of claims, agreement to limit the scope of representation or practice as a limited liability entity when certain conditions are met.