November 2015 | Earn one hour of MCLE Credit in Legal Ethics
Ending an engagement without inviting a disciplinary proceeding to begin
Peyton, a young practitioner who fights hard to bring in each case, is discouraged. Disagreements with a client who wants to pursue litigation in a highly questionable manner lead Peyton to conclude that the attorney-client relationship should be terminated. Peyton has concerns about the client’s litigious nature, and is aware of several other disputes that could reasonably escalate into additional filings. Indeed, Taylor, a lawyer who Peyton has never heard of, has requested a copy of Peyton’s file. Taylor refuses to discuss the scope of his engagement and has instructed Peyton not to talk to the client. Peyton has never disengaged as counsel and seeks advice from Cameron, a legal ethicist.
Like Peyton, many lawyers devote considerable time developing their businesses. And many clients likewise work hard to find the right lawyer to represent them. Despite these efforts, some engagements end due to a breakdown in this relationship. Regardless of the reasons for this, lawyers have ethical obligations that govern both the winding down of the relationship and the time that follows.
A myriad of reasons can spell the end of an attorney-client relationship. These can include communication problems, disagreements regarding the goals of the representation, the failure of one or both sides to satisfy obligations under the engagement or disagreements about how to accomplish the representation’s goals. A client may terminate the relationship at any time and for any reason or even for no reason. The same is not true for a lawyer.
When to withdraw
Lawyers may withdraw only under certain circumstances. These are set out in Rules of Professional Conduct, rule 3-700 (C). One circumstance is when the client interferes with the attorney’s responsibilities, often by being uncooperative or seeking an improper result. Situations that could permit withdrawal include when the client insists on presenting a claim or defense that is supported neither by law nor a good faith argument for change in the law; seeks to pursue an illegal course of conduct; renders it unreasonably difficult for the lawyer to effectively represent the client; insists that the lawyer act against the lawyer’s judgment and advice; or fails to pay expenses or fees.
Other circumstances where withdrawal is permitted are aimed at avoiding a breach of a lawyer’s ethical duties. This includes situations where continued employment is likely to result in an ethical violation; the working relationship with co-counsel dictates that the best interests of the client are served by withdrawal; the client insists that the lawyer engage in illegal or unethical conduct; or the lawyer’s mental or physical condition renders it difficult to carry out the employment effectively.
Of course, lawyers may also withdraw when the client knowingly and freely assents to termination of the employment. If none of these factors are present, the lawyer may seek withdrawal in a matter before a tribunal only if the lawyer believes in good faith that the tribunal will find good cause for withdrawal.
Sometimes, lawyers simply have no choice but to withdraw. This occurs where the lawyer knows or should know that the client is litigating to harass or injure and without probable cause; the lawyer knows or should know that continued employment will cause a violation of the Rules of Professional Conduct or of the State Bar Act; or the lawyer’s mental or physical condition renders it unreasonably difficult to carry out the employment effectively. (Rules of Professional Conduct, rule 3-700 (B).)
Peyton concluded that the relationship justified withdrawal on several grounds. So, Peyton inquired what would be required to ethically withdraw. Cameron proceeded to relay the following information.
Terminating the relationship in an ethical manner
Lawyers should end attorney-client relationships with the same care they put into beginning them. Lawyers owe obligations to their clients during and beyond termination. Particularly where court approval is needed to end the relationship, lawyers should be mindful that they continue to have the same duties until they are granted leave to withdraw. Notably, these include the duties to act competently and loyally. Regardless of the reason for terminating the relationship, attorneys must continue to protect their clients’ rights. To achieve this end, there are some guiding principles.
Foremost, once lawyers determine that they will withdraw, they should have a single focus: how to avoid causing any reasonably foreseeable prejudice to their clients. (See Rules of Prof. Conduct, rule 3-700(A)(2).) The circumstances dictate what needs to be done. But there are a number of ways lawyers can generally protect their clients during the disengagement process.
First, lawyers must provide adequate notice to their clients of the intent to withdraw. This allows the clients an opportunity to either find new counsel or prepare to represent themselves. Lawyers should also make sure their clients are aware of all scheduled events and deadlines. Again, this facilitates the search for counsel — allowing clients to understand and communicate the urgency for new counsel to come aboard — or the clients’ preparation to take the next steps on their own.
Subject to any protective order or non-disclosure agreement, lawyers must also promptly release to the client, at the request of the client, all the client papers and property. "Client papers and property" includes correspondence, pleadings, deposition transcripts, exhibits, physical evidence, expert's reports and other items reasonably necessary to the client's representation, whether the client has paid for them or not. (Rules of Prof. Conduct, rule 3-700(D)(1).)
It is unclear whether attorneys must also share their work product as part of responding to such a request. At least one bar association concluded that they must (Los Angeles County Bar Formal Opn. No. 330) and at least one other concluded that attorneys may withhold work product (Bar Assoc. of San Francisco County Formal Opn. No. 1990-1). Two appellate courts have noted that the work product doctrine and the client’s right to file materials pose an unresolved conflict (Eddy v. Fields (2004) 121 Cal.App.4th 1543, 1549; Metro-Goldwyn-Mayer, Inc. v. Super. Ct. (1994) 25 Cal.App.4th 242,244.) Notably, in 2009, a U.S. District Court concluded that the work product doctrine represented an exception to the obligation to produce client papers and property under rule 3-700. (White v. Experian Information Solutions (CD Cal. 2009) 2009 U.S. Dist. LEXIS 117979.) Despite the uncertainty that remains with most requests for file materials, it is well-settled that lawyers must turn over work product if requested in legal malpractice actions that their clients bring. (Code of Civ. Proc., § 2018.080.)
Finally, lawyers must return unused client funds. That includes promptly refunding any part of a fee paid in advance that has not been earned. The obligation does not apply to a true retainer fee, which is paid solely to ensure the availability of the lawyer for the matter. (Rules of Prof. Conduct, rule 3-700(D)(2).)
After the relationship ends
Once all unearned fees have been returned, lawyers still have obligations regarding the engagement’s finances. Lawyers must maintain complete records of all client funds the lawyer handles during the representation and provide an accounting to the client. Lawyers must also preserve those records for at least five years after their final distribution, and comply with any order for an audit of such records issued pursuant to the Rules of Procedure of the State Bar. (Rules of Prof. Conduct, rule 4-100(B)(3).)
Lawyers must also maintain client confidentiality, even after any dispute has been fully and finally resolved. Preserving the confidences of their clients is one of the most important duties that lawyers have. And California has a more expansive protection of confidentiality than any other state. California Business and Professions Code section 6068, subdivision (e)(1), requires a lawyer “[t]o maintain inviolate the confidence, and at every peril to himself or herself to preserve the secrets, of his or her client.” Rules of Professional Conduct, rule 3-100(A) states: “A member shall not reveal information protected from disclosure by Business and Professions Code section 6068, subdivision (e)(1), without the informed consent of the client ...” except under certain limited exceptions not applicable here. “No rule in the ethics of the legal profession is better established nor more rigorously enforced than this one.” (Wutchumna Water Co. v. Bailey (1932) 216 Cal. 564, 572.) Lawyers may not reveal confidential information — including the contents of the client file — except with the consent of the client or holder of the privilege as authorized or required by the State Bar Act, the Rules of Professional Conduct or other law.
Because of this, Cameron concluded that Peyton was justified in being apprehensive about turning over file materials to Taylor without an instruction from the client, especially since the client had not previously mentioned the other lawyer. Cameron advised Peyton to contact the client to determine whether the file should be produced, notwithstanding Taylor’s no-contact instruction. Rules of Professional Conduct rule 2-100 precludes lawyers from contacting a party known to be represented by another lawyer in the matter. Here, Peyton does not know whether Taylor, in fact, represents the client or if the representation is in the same matter. Moreover, until Peyton’s relationship with the client is terminated, Peyton continues to have a duty to communicate. The instruction to the contrary, even from another lawyer, does not abrogate that duty.
Finally, lawyers continue to owe a duty of loyalty regarding the subject matter of the representation. Although this may show up in several contexts, it most notably arises when assessing potential conflicts. Rules of Professional Conduct rule 3-310(E) precludes lawyers from accepting representation adverse to their former clients where the lawyers learned confidential information material to the employment. Like most conflicts, however, this may be waived with the former client’s informed written consent.
Peyton thanked Cameron for the advice. Although still regretting that he needed to end the attorney-client relationship, Peyton took solace that it would be completed in an ethically prudent manner.
David M. Majchrzak is counsel with the San Diego office of Klinedinst PC and a member of the State Bar Committee on Professional Responsibility and Conduct (COPRAC). His practice focuses on providing ethics advice, litigating professional liability claims and assisting professionals in disciplinary proceedings. The opinions here are his own.