Rules of Endorsement

How do you get the required signatures from your client on settlement checks and other documents?  When and how can you sign for your client?    How do you get the proper signature when the check or document’s here and the client’s there?  Clients sometimes ask to avoid two visits to your office, first to sign the settlement waiver, then to receive disbursed proceeds after the settlement check has cleared.  Many attorneys believe that a power of attorney provision in the representation agreement is sufficient to:  1. Settle the client’s case, and 2. Authorize the attorney to sign the client’s name to settlement documents and to endorse checks received.  This is a very dangerous belief.

General provisions in a representation agreement do not supplant an attorney’s ethical duties under the Rules of Professional Conduct.  Rule 1.2 requires that the lawyer abide by the client’s decision whether to settle a matter and requires that the lawyer must consult with the client and abide by the client’s decisions concerning the scope and objectives of representation.  Rule 1.4 sets forth the lawyer’s duty to communicate with the client regarding the status of the matter, to inform the client of any decision or circumstance with respect to which the client’s informed consent is required, and to explain a matter to the client to the extent reasonably necessary to permit the client to make informed decisions regarding the representation.

While a client may provide the lawyer with a settlement range that is acceptable to the client for negotiation, the lawyer generally should not commit the client to a settlement without the client’s express agreement to the exact terms of the proposed settlement.

Assuming that the client has expressly approved specific terms of settlement, can the lawyer execute settlement documents and endorse settlement checks as a convenience to the client?  It is the better practice to have the client sign all documents requiring the client’s signature.  If there is a compelling reason why the client cannot sign herself, the lawyer should first obtain written authorization to sign on behalf of the client.  When the lawyer does sign documents in place of the client, she must clearly indicate that the signature is by the lawyer on behalf of the client.  Simply signing the client’s name, even with authorization, is a false act and a violation of Rule 8.4(a)(4).  See In the Matter of Dock H. Davis, 291 Ga. 169 (2012).  And if you don’t make the mistake of signing your client’s name without so indicating, you will surely not make the mistake of then notarizing the client’s signature as if she had signed it herself!  If the bank will not accept the endorsement indicating that the lawyer signed for the client, then you will have to obtain the client’s signature.  It is never acceptable to simply sign the client’s name as if the client signed the document herself.

In a future post, we may go into the many digital signature situations that arise in practice, but for now, make sure you understand and comply with the proper rules of endorsement!

Tina and Natalie

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