A recent The Recorder story “Open Ended Retainer Agreements Don’t Disqualify Firm” reports that a California appeals court concluded that an open-ended retainer agreement don’t automatically create attorney-client relationships.  Shute, Mihaly & Weinberger shouldn’t have been disqualified in the case just because of a couple of open-ended retainer agreements it signed in 2005 with the city of Newport Beach, the California appeal panel concluded in its published opinion (pdf).

Shute, Mihaly represents Banning Ranch Conservancy in litigation over the city’s plans to build a four-lane highway on a 400-acre coastal property.  Lawyers for Newport Beach had argued that the firm shouldn’t be allowed to represent the conservancy because two retainer agreements it signed with the firm from 2005 established an attorney-client relationship.  They cited the firm’s “special insight” into the city’s approach to land use matters based on its representation of the city in past decades.

But the conservancy argued that they were mere “framework” retainer agreements that didn’t create an attorney-client relationship unless the firm accepted the work.  It argued the court to issue a writ of mandate on the disqualification order, arguing that it might not be able to continue its case with any other law firm.

The panel noted the competing considerations raised by disqualification motions.  “On the one hand, these include clients’ rights to be represented by their preferred counsel and deterring costly and time-consuming gamesmanship by the other side,” the panel wrote.  “Balanced against these are attorneys’ duties of loyalty and confidentiality and maintaining public confidence in the integrity of the legal process.”