Due diligence, also known as reasonable diligence, is a general term for an attorney's proper attention to a legal matter. Although it is a subjective term, there is a widely recognized standard of due diligence among those who practice law.
Contracts
An attorney who agrees to represent a client in any matter will sign a written agreement with that client. The contract will state that the attorney must practice due diligence in working on the matter and take all necessary and legal steps needed to conclude the matter to the client's satisfaction.
Standards
Due diligence means a professional standard of conduct and attention to the legal affairs of a client. Attorneys must practice due diligence without regard to their own inconvenience and attend to the required work to a reasonable extent. Ignoring the matter, or neglecting to take actions that the client legally requires, would be a violation of due diligence, and a cause for a malpractice action by the client.
Forms
Due diligence takes various forms, depending on the legal matter at hand. A corporate client considering the acquisition of another company, for example, may require an attorney to investigate the company's financial statements, contracts and business practices to ensure the company is a smart investment. An investor interested in buying property may need an attorney to undertake a title search, or assess the costs of repairs or improvements to a building.
Ethical Due Diligence
By the terms of due diligence, attorneys are not required to undertake illegal or unethical steps in any matter, no matter the client's wishes. In most cases, due diligence means gathering information necessary for the client to make an informed decision.
Litigation and Due Diligence
Clients may sue attorneys for malpractice on the grounds of violating due diligence. Attorneys may defend their actions in court with affidavits of due diligence, which explain all the steps undertaken to meet the client's legal needs. In addition, an attorney seeking a court's writ or order may file an affidavit explaining the due diligence undertaken in serving a summons, enforcing a contract, or carrying out the terms of an agreement. Attorneys found guilty of violating due diligence are subject to disbarment in the states where they are licensed to practice.
