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Phantom clients, those who believe they are represented by you, though the individual has not formally hired or retained you, can lead to a potential claim down the road. If you decline an engagement for legal services or the client chooses not to retain you, the non-engagement should immediately be confirmed in writing by way of a non-engagment letter. Here are three resources to help you draft one:

Law Society of Upper Canada:
http://www.lsuc.on.ca/WorkArea/DownloadAsset.aspx?id=2147491177

From the CBA’s Conflict of Interest Toolkit:
http://www.cba.org/cba/groups/pdf/model_non_engagement_letter.pdf

A checklist from Managing the Lawyer/Client Relationship booklet:
http://www.practicepro.ca/practice/pdf/Lawyer_Client.pdf#page=21