MCLE

by Steven D. Wasserman and Joel A. Kane

Terminating an attorney-client relationship?whether the breakup is mandatory or permissive?raises many profound ethics issues. It's not as simple as sending a "Dear Client" letter or filling out a substitution of attorney form authorized by the Judicial Council (a form, by the way, that requires the client's signature, which at times can be an elusive element).

Every attorney needs to be familiar with the rules that dictate when and how to call it quits with a client: how to terminate the relationship properly at different stages of the engagement; how to handle and transfer the client file; how to preserve the attorney-client privilege; and?perhaps stickiest of all?how to ensure fees can be collected after the breakup. (Some of these will be addressed in the second half of this two-part MCLE series, running in California Lawyer's November 2015 issue.)

A One-Way Street

It should be noted that clients have the absolute right to fire their counsel, meaning the attorney-client relationship ends if and when the client says so, regardless of whether "good cause" exists. (See ABA Model Rule 1.16(a)(3); Fracasse v. Brent, 6 Cal. 3d 784, 790 (1972).) A client can even terminate counsel in the middle of a trial, though the court may refuse to grant a continuance to secure new representation. (See Berger v. Mantle, 18 Cal. App. 2d 245, 248-294 (1936).)

But lawyers don't have the same right; if an attorney wishes to withdraw from representation, there must be good cause. In fact, an attorney who is unhappy with a client may have to just grit his or her teeth and bear with the unsatisfactory relationship. Even when there are valid grounds for terminating it, lawyers are required to comply with the procedures set forth in the California Rules of Professional Conduct (CRPC), and they may be disciplined if they fail to do so. (See CRPC 3-700; Slavkin v. State Bar, 49 Cal. 3d 894, 903 (1989).)

Many attorneys draft their own engagement agreements that spell out when and how they may withdraw. But no matter how precise the language in those letters may seem, they still don't give attorneys license to simply walk away from a given matter. At the very least, an attorney must take reasonable steps to avoid prejudicing the client's case (CRPC 3-700(A)(2)) or risk drawing a State Bar complaint (see Matter of Brockway, 4 Cal. State Bar Ct. Rptr. 944, 951-952 (Rev. Dept. 2006)), if not a malpractice claim from the disgruntled client.

The one time an attorney can substitute out of a matter without court permission?even on the eve of a trial-is when the client "knowingly and freely" consents. (CRPC 3-700(C)(5).) Still, the proper substitution form must be completed and signed by the existing attorney and the client?as well as by the attorney "substituting in" to the case. (See Judicial Council Form MC-050.) In fact, in one case, the court held invalid a local rule requiring leave of court to substitute counsel regardless of client consent. (Hock v. Superior Court, 221 Cal. App. 3d 670, 674 (1990).)

Mandatory Withdrawal

Like any relationship, the one between attorney and client can continue in a healthy manner only when both parties want it to. But when it becomes too much of a struggle to maintain, for whatever reason, the attorney should seriously consider ending it. Indeed, there are times when an attorney must terminate a client relationship and withdraw from the representation even if court approval is needed: For example, when he or she realizes that the client is bringing an action or asserting a defense without probable cause. (See CRPC 3-700(B)-(1); CRPC 3-200(A).) Though the standard for probable cause is low (see Paulus v. Bob Lynch Ford, Inc., 139 Cal. App. 4th 659, 674 (2006)), attorneys must be aware of it?and honor it?if the client is pushing a position that simply has no basis.

The same is true for a client acting out of malice or for an improper purpose, including the desire to harass or injure another party. Assessing a client's intent may be more a matter of art than of science, but it is nevertheless part of an attorney's job. And when he or she suspects a nefarious motive on the client's part, it may well require a parting of ways.

Withdrawal from representation is also mandatory when an attorney knows, or should know, that continuing as counsel will cause the attorney to violate the CRPC or the State Bar Act. (See CRPC 3-700(B)(2).) Examples include a clear conflict of interest. However, if the violation is merely likely, withdrawal is permitted but not required. (See CRPC 3-700(C)(2).) Even so, the best practice is to stop representing the client when a violation of the CRPC looms as a possibility. No cautious attorney wants to roll the dice on whether an ethics violation will occur. Still, an attorney must sometimes continue representation even if he or she doesn't like the case or the client, or is not making money on the engagement. (See "Permissive Withdrawal" below.)

The Attorney's Condition

Ending an attorney-client relationship is not always about the client. Sometimes an attorney must withdraw when his or her mental or physical state makes it "unreasonably difficult" to continue effective representation. (See CRPC 3-700(B)(3); Gary v. State Bar, 44 Cal. 3d 820, 824 (1988) [alcoholism]; Snyder v. State Bar, 18 Cal. 3d 286, 293 (1976) [mental and emotional strain].)

The key factor is the matter of degree: If the condition makes ongoing representation merely difficult, as opposed to unreasonably difficult, withdrawal is optional. (See CRPC 3-700(C)(4).) In either event, the lawyer needs to self-regulate to ensure that he or she is mentally, emotionally, and physically up to the tasks the engagement requires. This situation is tricky, of course, as those attorneys most at risk of being unable to competently practice (for example, those with drug or alcohol impairment, or issues of mental health or reduced capacity) are those least likely to recognize their limitations and most unwilling to withdraw.

Things Happen

Sometimes unforeseen circumstances compromise an attorney's ability to continue representation. For example, a technology-induced calamity?such as a crippling computer virus or a server crash?might make it impossible for a lawyer to adequately serve a client over an extended period. In rare situations, withdrawal may be forced by a destructive natural disaster such as a blizzard or tornado, or especially in California, an earthquake or fire. (See CRPC 3-700(B)(2).)

If any of these mandatory-withdrawal scenarios occurs in the context of litigation, however, the attorney may still have ongoing responsibilities to the client and the court. The attorney must therefore seek court permission to withdraw?or at least ask that deadlines be extended for a reasonable time. Courts generally are sympathetic if a proper showing is made.

Permissive Withdrawal

Although ABA Model Rules (and related ethics opinions) are not binding on California's courts, they are often cited as persuasive when there is no direct authority in California. (See City & Cnty. of San Francisco v. Cobra Solutions, Inc., 38 Cal. 4th 839, 852 (2006).)

The CRPC and the ABA identify a number of circumstances under which an attorney is permitted to withdraw. These include situations when the client:

Insists on presenting a claim or defense that is not warranted under existing law or couldn't be considered a good-faith extension of a law (See CRPC 3-700 (C)(1));

Insists that counsel pursue a course of conduct that is illegal or prohibited under the CRPC or the State Bar Act (See CRPC 3-700 (C)(1).) This can raise thorny issues. For example, when an attorney discovers that a client used his or her services in the past to commit a fraud or crime, withdrawal is permissive; but when the lawyer suspects that the client plans to use his or her services for criminal purposes in the future, withdrawal is mandatory, at least under the ABA model rules. (See ABA Model Rule 1.16(a)(1), as compared to ABA Model Rule 1.16(b)(3));

Insists, in a matter not pending before a tribunal, that counsel engage in conduct that is contrary to his or her judgment and advice. (See CRPC 3-700 (C)(1));

Has serious disagreements over case strategy (ABA Model Rule 1.16(b)(4));

Breaches an agreement with or obligation to counsel regarding expenses or fees. (See CRPC 3-700 (C)(1).) Attorneys do not need to represent clients at any and all cost. But while the profitability of a case should not be an attorney's only concern, ABA Model Rule 11.16(d) allows a lawyer to withdraw if the financial burden makes continued representation unreasonably difficult;

Violates a court order. (See ABA Formal Op. 98-412);

Insists on taking action that the lawyer considers morally repugnant, or with which the lawyer has a fundamental disagreement. (See Lindsey v. Admiral Ins. Co., 804 F. Supp. 47, 52 (N.D. Cal. 1992) (lawyers permitted to withdraw when there was "fundamental disagreement between counsel and defendants on matters of strategy, tactics, authority and mutual obligations, such that counsel cannot continue to represent defendants in this action"));

Disappears or is incommunicado;

By other conduct renders it unreasonably difficult for the attorney to carry out the employment effectively; or for "other good cause," which can include a serious personality conflict between counsel and client. (See CRPC 3-700 (C)(1),(6).)

Finally, a lawyer is permitted to withdraw from representation if the attorney cannot get along with co-counsel (CRPC 3-700(C)(3)).

Other mitigating circumstances in favor of withdrawal should be evaluated on a case-by-case basis using the attorney's good judgment.

Avoid Prejudice

No matter when the withdrawal occurs, and even when the client terminates the engagement, counsel must avoid prejudicing the client's case. As one recent ethics opinion notes: "Ordinarily, for purposes of the motion to withdraw, it will be sufficient to state words to the effect that ethical considerations require withdrawal or that there has been an irreconcilable breakdown in the attorney-client relationship." (Cal. State Bar Comm. on Prof. Resp. and Conduct, Formal Op. 2015-192 at 10.)

This requirement applies whether the lawyer withdraws as counsel or is fired. (See CRPC 3-700(A)(2); Cal. State Bar Comm. on Prof. Resp. and Conduct, Formal Op. 2014-190.) An attorney must at least give "due notice" to the client and allow time to arrange the employment of other counsel. He or she must advise the client of key upcoming dates (including filing deadlines, hearing and trial dates, and other relevant deadlines), promptly return the client's files and papers upon request, and review the rules and laws applicable to the case to ensure that the client is not in danger of violating any of them. (See CRPC 3-700(A)(2).)

Counsel should also explain to the client what effect the termination will have on his or her case. The last thing most lawyers want is to invest more time, before or after the breakup, helping the ex-client and new lawyer move forward. So, out of professional obligation and self-interest, departing counsel should make sure everyone has the materials they need, and the departing counsel's thoughts on the case that he or she thinks are important to productively proceed.

The greater the odds of the ex-client's success, the less likely that the client (and perhaps successor counsel) will return later and suggest the prior attorney failed to handle the matter properly and thereby damaged the client.

Next month: The manner of termination; transfer of the file; privilege issues; and getting paid.

Steven D. Wasserman is a partner and Joel A. Kane an associate at Sedgwick LLP in San Francisco

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