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Communicate your decision in writing as soon as you decide to refuse their case. You should also recommend the potential client visit another lawyer who can assist them with their case. A written letter serves as a factual record that you turned down the potential client's case and explains the reason for the decision.
Here are a few variations to practice: Thanks for thinking of me. I can't right now/I can't make it/I can't attend. I'm at capacity right now, so I will decline. Thanks for understanding. No, not at this time.
A lawyer representation letter should include: Date; Address to whom the letter is sent; The subject of the letter; Content or body of the letter. Briefly explaining why the lawyer is writing the letter and the general claim and damages. Signature.
Dear {Salutation}: In response to your request when you contacted this firm, I have reviewed the information you provided regarding possible representation in the matter of:________________. I appreciate the confidence you have expressed in our firm; however, the firm has decided not to represent you in this matter.
After you left our offices yesterday, we performed a formal conflict-of-interest check and found that our firm does indeed have a conflict of interest involving your intended adversary in this case, [Name]. Unfortunately, this conflict cannot be resolved in a manner that would allow us to represent you in this matter.