Brian Reynolds sued the law firm Henderson & Lyman, which represented various LLC’s he co-owned and managed, and one of its lawyers. Reynolds accused H&L of giving negligent advice to the LLC’s that led him to violate federal disclosure laws. The District Court granted summary judgment in favor of H&L, explaining that “Reynolds could not bring a malpractice suit on his own behalf because he did not have a personal attorney-client relationship with H&L.” Id. at 695. Reynolds appealed.
The Seventh Circuit affirmed, describing the attorney-client relationship as a “voluntary, contractual relationship that requires the consent of both the attorney and client.” Id. Given Reynold’s admission that he never asked H&L to represent him, that no one at H&L said anything suggesting it thought it represented him, and that Reynolds never entered into an agreement with H&L to that effect, the Seventh Circuit held that no attorney-client relationship existed. Reynolds argued that, as part-owner and manager of the LLC’s, his interests and theirs were “so closely bound […] as to be functionally indistinguishable.” Id. at 696. However, the court rejected this argument. “‘Simply because the [officers of a business entity] were at risk of personal liability,’” it explained, “‘does not transform the incidental benefits of [the law firm’s] representation of [the business entity] into direct and intended benefits for [the officers].’” Id. at 696, quoting Reddick v. Suits, 2011 IL App (2d) 100480, ¶ 44. Rather, the only time an Illinois attorney owes a duty of care to a third party is “when the attorney was hired for the primary purpose of benefiting that third party.” Id.
(This is for informational purposes and is not legal advice.)