N.M. R. Prof'l. Cond. 16-104

As amended through January 19, 2021
Rule 16-104 - Communication
A.Status of matters. A lawyer shall:
(1) promptly inform the client of any decision or circumstance with respect to which the client's informed consent, as defined in Paragraph E of Terminology of the Rules of Professional Conduct, is required by these rules;
(2) reasonably consult with the client about the means by which the client's objectives are to be accomplished;
(3) keep the client reasonably informed about the status of the matter;
(4) promptly comply with reasonable requests for information; and
(5) consult with the client about any relevant limitation on the lawyer's conduct when the lawyer knows that the client expects assistance not permitted by the Rules of Professional Conduct or other law.
B.Client's informed decision-making. A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation.
C.Disclosure of professional liability insurance.
(1) If, at the time of the client's formal engagement of a lawyer, the lawyer does not have a professional liability insurance policy with limits of at least one-hundred thousand dollars ($100,000) per claim and three-hundred thousand dollars ($300,000) in the aggregate, the lawyer shall inform the client in writing using the form of notice prescribed by this rule. If during the course of representation, an insurance policy in effect at the time of the client's engagement of the lawyer lapses, or is terminated, the lawyer shall provide notice to the client using the form prescribed by this rule.
(2) The form of notice and acknowledgment required under this Paragraph shall be:

NOTICE TO CLIENT

Pursuant to Rule 16-104(C) NMRA of the New Mexico Rules of Professional Conduct, I am required to notify you that ["I" or "this Firm"] [do not][does not][no longer] maintain[s] professional liability malpractice insurance of at least one-hundred thousand dollars ($100,000) per occurrence and three-hundred thousand dollars ($300,000) in the aggregate.

_________________________________

Attorney's signature

CLIENT ACKNOWLEDGMENT

I acknowledge receipt of the notice required by Rule 16-104(C) NMRA of the New Mexico Rules of Professional Conduct that [insert attorney or firm's name] does not maintain professional liability malpractice insurance of at least one-hundred thousand dollars ($100,000) per occurrence and three-hundred thousand dollars ($300,000) in the aggregate.

_________________________________

Client's signature

(3) As used in this Paragraph, "lawyer" includes a lawyer provisionally admitted under Rule 24-106 NMRA and Rules 26-101 through 26-106 NMRA; however it does not include a lawyer who is a full-time judge, in-house corporate counsel for a single corporate entity, or a lawyer who practices exclusively as an employee of a governmental agency.
(4) A lawyer shall maintain a record of the disclosures made pursuant to this rule for six (6) years after termination of the representation of the client by the lawyer.
(5) The minimum limits of insurance specified by this rule include any deductible or self-insured retention, which must be paid as a precondition to the payment of the coverage available under the professional liability insurance policy.
(6) A lawyer is in violation of this rule if the lawyer or the firm employing the lawyer maintain a professional liability policy with a deductible or self-insured retention that the lawyer knows or has reason to know cannot be paid by the lawyer or the lawyer's firm in the event of a loss.

N.M. R. Prof'l. Cond. 16-104

Amended by Supreme Court Order No. 08-8300-029, effective November 3, 2008; by Supreme Court Order No. 09-8300-029, effective November 2, 2009.

Committee commentary. -

[1] Reasonable communication between the lawyer and the client is necessary for the client effectively to participate in the representation.

Communicating with Client

[2] If these rules require that a particular decision about the representation be made by the client, Subparagraph (1) of Paragraph A of this rule requires that the lawyer promptly consult with and secure the client's consent prior to taking action unless prior discussions with the client have resolved what action the client wants the lawyer to take. For example, a lawyer who receives from opposing counsel an offer of settlement in a civil controversy or a proffered plea bargain in a criminal case must promptly inform the client of its substance unless the client has previously indicated that the proposal will be acceptable or unacceptable or has authorized the lawyer to accept or to reject the offer. See Paragraph A of Rule 16-102 NMRA of the Rules of Professional Conduct.

[3] Subparagraph (2) of Paragraph A requires the lawyer to reasonably consult with the client about the means to be used to accomplish the client's objectives. In some situations-depending on both the importance of the action under consideration and the feasibility of consulting with the client-this duty will require consultation prior to taking action. In other circumstances, such as during a trial when an immediate decision must be made, the exigency of the situation may require the lawyer to act without prior consultation. In such cases the lawyer must nonetheless act reasonably to inform the client of actions the lawyer has taken on the client's behalf. Additionally, Paragraph A(3) requires that the lawyer keep the client reasonably informed about the status of the matter, such as significant developments affecting the timing or the substance of the representation.

[4] A lawyer's regular communication with clients will minimize the occasions on which a client will need to request information concerning the representation. When a client makes a reasonable request for information, however, Paragraph A(4) requires prompt compliance with the request, or if a prompt response is not feasible, that the lawyer, or a member of the lawyer's staff, acknowledge receipt of the request and advise the client when a response may be expected. A lawyer should promptly respond to or acknowledge client communications.

Explaining Matters

[5] The client should have sufficient information to participate intelligently in decisions concerning the objectives of the representation and the means by which they are to be pursued, to the extent the client is willing and able to do so. Adequacy of communication depends in part on the kind of advice or assistance that is involved. For example, when there is time to explain a proposal made in a negotiation, the lawyer should review all important provisions with the client before proceeding to an agreement. In litigation a lawyer should explain the general strategy and prospects of success and ordinarily should consult the client on tactics that are likely to result in significant expense or to injure or coerce others. On the other hand, a lawyer ordinarily will not be expected to describe trial or negotiation strategy in detail. The guiding principle is that the lawyer should fulfill reasonable client expectations for information consistent with the duty to act in the client's best interests, and the client's overall requirements as to the character of representation. In certain circumstances, such as when a lawyer asks a client to consent to a representation affected by a conflict of interest, the client must give informed consent, as defined in Paragraph E of Terminology of the Rules of Professional Conduct.

[6] Ordinarily, the information to be provided is that appropriate for a client who is a comprehending and responsible adult. However, fully informing the client according to this standard may be impracticable, for example, where the client is a child or suffers from diminished capacity. See Rule 16-114 NMRA of the Rules of Professional Conduct. When the client is an organization or group, it is often impossible or inappropriate to inform every one of its members about its legal affairs; ordinarily, the lawyer should address communications to the appropriate officials of the organization. See Rule 16-113 NMRA of the Rules of Professional Conduct. Where many routine matters are involved, a system of limited or occasional reporting may be arranged with the client.

Withholding Information

[7] In some circumstances, a lawyer may be justified in delaying transmission of information when the client would be likely to react imprudently to an immediate communication. Thus, a lawyer might withhold a psychiatric diagnosis of a client when the examining psychiatrist indicates that disclosure would harm the client. A lawyer may not withhold information to serve the lawyer's own interest or convenience or the interests or convenience of another person. Rules or court orders governing litigation may provide that information supplied to a lawyer may not be disclosed to the client. Paragraph C of Rule 16-304 NMRA of the Rules of Professional Conduct directs compliance with such rules or orders. Disclosure of Professional Liability Insurance

[8] Paragraph C of this rule requires a lawyer to disclose to the clients whether the lawyer has professional liability insurance satisfying the minimum limits of coverage set forth in the rule. Subparagraph (3) of Paragraph C defines "lawyer" to include lawyers provisionally admitted under Rule 24-106 NMRA and Rules 26-101 to 26-106 NMRA. Rule 24-106 NMRA applies to out-of-state lawyers who petition to be allowed to appear before the New Mexico courts. Rules 26-101 to 26-106 NMRA apply to foreign legal consultants. Subparagraph (4) of Paragraph C requires a lawyer to maintain a record of disclosures made under this rule for six (6) years after termination of the representation of the client by the lawyer. In this regard, the lawyer should note that trust account records must be kept for five (5) years but the statute of limitations for a breach of contract claim is six (6) years. Subparagraph (5) of Paragraph C provides that the minimum limits of insurance specified by the rule includes any deductible or self-insured retention. In this regard, the use of the term "deductible" includes a claims expense deductible. The professional liability insurance carrier must agree to pay, subject to exclusions set forth in the policy, all amounts that an insured becomes legally obligated to pay in excess of the deductible or self-insured retention shown on the declarations page of the policy.

[Adopted by Supreme Court Order 08-8300-026, effective November 3, 2008; amended by Supreme Court Order 09-8300-029, effective November 2, 2009; as amended by Supreme Court Order No. 13-8300-038, effective December 31, 2013.]

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ANNOTATIONS The 2009 amendment, approved by Supreme Court Order No. 09-8300-029, effective November 2, 2009, added the paragraph letter and title for Paragraph C, and Subparagraphs (1), (2), and (3); and added Paragraph [8] of the committee commentary. The 2008 amendment, approved by Supreme Court Order No. 08-8300-29, effective November 3, 2008, in Paragraph A, in the prefatory sentence, deleted "keep a client reasonably informed about the status of a matter and promptly comply with reasonable requests for information" and added Subparagraphs (1) through (5) of Paragraph A. Explanation of duty. - When one contracts with an attorney for legal services, he or she is entitled to expect that the attorney will take action of some sort, and if more information is needed from the client in order to proceed, it is the attorney's responsibility to notify the client; it is not the client's responsibility to initiate all inquiries to the attorney in order to insure that essential steps are being taken. Furthermore, it is within the scope of an attorney's obligations to a client to provide the information, advice, and reassurances necessary to allay unnecessary concerns that the client may have. Failure to do so violates this and other rules. In re Carrasco, 1987-NMSC-089, 106 N.M. 294, 742 P.2d 506. Uninformed client. - Since the client's lack of understanding was the direct result of the attorney's failure to adequately inform his client as evidenced by attorney's own admission that he failed adequately to communicate to his client her right to a hearing in a neglect and abuse case, the attorney had violated this rule. In re Cutter, 1994-NMSC-086, 118 N.M. 152, 879 P.2d 784. Failure to communicate. - Where Owen represented the complainants, who were the lessees in a daycare lease dispute; Owen failed to respond to the complainants inquiries and at other times, told the complainants that nothing was happening in the case; and it was only after the district court granted the lessor's motion for summary judgment and writ of execution that Owen notified the complainants that their daycare business was being evicted, Owen failed to keep the complainants reasonably informed about their case. In re Owen and Jackson, 2013-NMSC-035. An attorney who failed to pursue representation of clients and who abandoned his office and all forms of communication with his clients was subject to a one year suspension. In re Fandey, 1994-NMSC-118, 118 N.M. 590, 884 P.2d 481. Misappropriation of funds. - Attorney's conversion to his own use of money received from a client to have a liquor license transferred to her name violated Rules 1-102, 6-101, 7-101 and 9-102 NMRA of the Code of Professional Responsibility (now Rules 16-102, 16-104, 16-115 and 16-804 NMRA of the Rules of Professional Conduct). In re Gallegos, 1986-NMSC-058, 104 N.M. 496, 723 P.2d 967. Attorney's failure to docket an appeal and lying to his client for seven years about the status of the appeal violated numerous rules and warranted indefinite suspension from practice. In re Roberts, 1995-NMSC-037, 119 N.M. 769, 895 P.2d 669. Indefinite suspension warranted. - Since additional acts of misconduct and failure to communicate came to light after suspension had been imposed, and the attorney failed to cooperate with disciplinary proceedings, the additional matters warranted adding time to the suspension from the practice of law previously imposed. In re Tapia, 1990-NMSC-092, 110 N.M 693, 799 P.2d 129. Indefinite suspension was warranted because of an attorney's violation of this rule and other rules, such as Rule 16-101 NMRA, by failing to provide competent representation; Rule 16-103 NMRA, by failing to act with diligence and promptness in representing a client; Rule 16-116(D) NMRA, by failing to surrender papers and property to which the client was entitled at the termination of the representation; Rule 16-302 NMRA, by failing to expedite litigation consistent with the interests of his client; and Rule 16-804(C),(D) and (H) NMRA, by engaging in conduct involving dishonesty, fraud, deceit or misrepresentation, engaging in conduct prejudicial to the administration of justice, and by engaging in conduct that adversely reflects on his fitness to practice law. In re Lally, 1999-NMSC-003, 126 N.M. 566, 973 P.2d 243. Indefinite suspension was warranted because an attorney violated Paragraph A by failing to keep a client reasonably informed about the status of a matter and by failing to promptly comply with reasonable requests for information. The attorney also violated Rule 16-101 NMRA, by failing to provide competent representation; Rule 16-102(A) NMRA, by failing to abide by a client's decisions concerning the objectives of the representation; Rule 16-103 NMRA, by failing to act with reasonable diligence and promptness in representing a client; Rule 16-116(D) NMRA, by failing to timely surrender papers and property to which a client was entitled and by failing to timely refund any advance payment of fee that had not been earned; Rule 16-804(D) and HNMRA, by engaging in conduct that is prejudicial to the administration of justice and conduct that adversely reflects on his fitness to practice law; Rule 16-801(B) NMRA, by failing to respond to lawful requests for information from the office of disciplinary counsel; and Rule 16-803(D) NMRA, by failing to cooperate with disciplinary counsel in the course of the investigation. In re Carlton, 2000-NMSC-001, 128 N.M. 419, 993 P.2d 736. Disbarment was warranted, despite mitigating factors, since the attorney converted client funds; engaged in conduct involving deceit, dishonesty and misrepresentation; failed to hold clients' funds separate from his own; failed to notify clients of the receipt of funds belonging to them; failed to maintain required trust account records; failed to protect clients' interests at the termination of the representation; failed to advise clients of the status of their legal matters; engaged in conduct prejudicial to the administration of justice; and engaged in conduct adversely affecting his fitness to practice law. In re Kelly, 1995-NMSC-038, 119 N.M. 807, 896 P.2d 487. Disbarment was justified because of the inadequacy of an attorney's representation of clients in violation of Paragraph A of this rule and Rules 16-101, 16-102 and 16-103 NMRA, by his adverse business transaction with a client and misappropriation of trust account funds in violation of Rules 16-108, 16-115 and 16-116(D) NMRA, and violation of Rule 16-801 NMRA and other rules relating to disciplinary proceedings. In re Darnell, 1997-NMSC-025, 123 N.M. 323, 940 P.2d 171. Professional liability insurance disclosure requirement is mandatory. - Where attorney failed to notify his client that the malpractice insurance he had at the time he was employed by the client had lapsed, the attorney violated Rule 16-104(C) NMSA 1978, because the professional liability insurance disclosure requirement is mandatory and will subject attorneys to discipline for non-compliance. In re Torres, 2016-NMSC-019. Rule violated. In re Canevaro, 1997-NMSC-033, 123 N.M. 576, 943 P.2d 1029; In re Houston, 1999-NMSC-032, 127 N.M. 582, 985 P.2d 752; In re Chavez, 2000-NMSC-015, 129 N.M. 035, 1 P.3d 417; In re Dawson, 2000-NMSC-024, 129 N.M. 369, 8 P.3d 856. Law reviews. - For note, "Legal Malpractice - Liability for Failure to Warn: First National Bank of Clovis v. Diane, Inc.", see 16 N.M.L. Rev. 395 (1986). Am. Jur. 2d, A.L.R. and C.J.S. references. - Negligence, inattention, or professional incompetence of attorney in handling client's affairs in family law matters as ground for disciplinary action - modern cases, 67 A.L.R.4th 415. Negligence, inattention, or professional incompetence of attorney in handling client's affairs in bankruptcy matters as ground for disciplinary action - modern cases, 70 A.L.R.4th 786.