What potential downside can occur if a lawyer does not formally document an agreement with a client?

A potential downside of not formally documenting an agreement with a client is that the client may misunderstand the terms of engagement. When an agreement is not clearly outlined in writing, there is a higher chance for miscommunication regarding the scope of legal services, fees, timelines, and expectations. This can lead to differing interpretations of what was agreed upon, which can ultimately harm the lawyer-client relationship.

Having a formal agreement helps ensure that both parties have a mutual understanding of their obligations and expectations, reducing the risk of potential conflicts and misunderstandings. By clearly stating the terms of the engagement, the lawyer can protect both themselves and the client from future disputes that may arise due to vague or ambiguous agreements.

The other choices may have some relevance to the scenario but do not capture the primary risk associated with a lack of formal documentation. Reduced fees could stem from various factors unrelated to the documentation of the agreement, while additional claims or losing the client entirely are more indirect consequences that could arise from misunderstanding, but they do not address the root issue of the lack of clarity surrounding the terms.