Law firms that want to include mandatory arbitration provisions in their client engagement agreements must explain to the client the benefits and disadvantages of arbitrating a prospective dispute, the New Jersey state supreme court held late last year — and merely providing a link to the arbitration rules doesn’t satisfy the requirement, the court said. 

Closely parsing the language in an arbitration clause, the California state court of appeals recently reversed an order compelling arbitration of a dispute between a lawyer and his client-turned-business-partner. The lawyer must now defend against a $1.5 million claim based on malpractice and breach of the operating agreement that the lawyer had drafted in connection with his real estate venture with the former client. With arbitration provisions becoming a common feature of lawyer-client retainer agreements, this ruling is worth attention.
Continue Reading What’s in a word? No arbitration for lawyer accused of breaches in deal with client