BY STEVEN D. WASSERMAN AND JOEL A. KANE
As noted in the first part of this discussion (which appeared in print in the October issue of California Lawyer
magazine under the title "Ending the Client Relationship [Part One]"), the client never needs permission-or even a reason-to terminate the relationship with his or her attorney. The client's right to fire counsel at any time is absolute.
The same is not
true, of course, for the attorney. If the engagement involves active litigation, the change in representation might need to be approved by the court. Indeed, if the adjudicating tribunal has rules that require the attorney to obtain permission to withdraw, there can be no exit until that permission is obtained. (Cal. Rules of Prof'l Conduct (CPRC) 3--700(A)(1).) And different rules apply depending on whether or not the client agrees to the change.
WITH CLIENT CONSENT
In state court, if the client consents, an attorney may withdraw from civil or criminal cases merely by filing a completed substitution of attorney form. (See Cal. Code Civ. Proc. § 284(1); In re Haro
,71 Cal.2d 1021, 1029 (1969).) A preprinted Judicial Council form is available for this purpose. (See Form MC-050; available at www.courts.ca.gov/documents/mc050.pdf).
In federal court, rules in particular districts often require a formal motion to withdraw, regardless of client consent. (See C.D. Cal. Local Rule 83-2.3; E.D. Cal. Local Rule 182(d); N.D. Cal. Local Rule 11-5; and S.D. Cal. Local Rule 83.3(f).) So whenever practicing in federal court, attorneys should check the pertinent local requirements.
There is always the chance that an attorney's request to withdraw will have a negative influence on the client's case. (See Kirsch v. Duryea
, 21 Cal. 3d 303, 311 (1978).) For that reason, if a formal motion is required, attorneys should consider requesting that a judge other than the one assigned to the case hear the motion.
Attorneys must also be careful not to disclose confidential information, even if it is relevant to the underlying conflict of interest or other basis for withdrawal. (See CRC 3.1362(c), which prohibits an attorney from compromising attorney-client confidentiality in a declaration supporting withdrawal.) Needless to say, a withdrawal motion is not a sanctioned means for a lawyer to inflict payback on a "problem client"; counsel should not use the judicial forum as a place to disparage the clients he or she seeks to part company with.
Courts understand this delicate situation and generally require that a withdrawing attorney only state that his or her continued representation is not possible for one of the typical reasons-usually because the attorney-client relationship has broken down. (See Aceves v. Superior Court
,51 Cal.App.4th 584, 596 (1996).) If the court requires additional information in support of withdrawal and the disclosure involves privileged or otherwise sensitive information, the attorney should request an in-camera hearing before an independent judge. (See Manfredi & Levine v. Superior Court (Barles)
, 66 Cal.App.4th 1128, 1136 (1998).) Even then, privileged information may not be disclosed. (See Cal. State Bar Comm. on Prof'l Responsibility and Conduct, Interim Op. 12-0001.)
That said, there may be times when a court presses counsel for the reasons underlying the request to withdraw, and even orders disclosure of confidential information. In such a situation, the attorney must take all reasonable steps to avoid disclosing privileged data; ethically, the attorney would be required to seek writ relief to reverse the trial court's order. If the attorney has exhausted all reasonable steps to avoid disclosure, the interim State Bar opinion cited immediately above provides that counsel is not required to disobey a court order requiring disclosure. In such a case, the attorney should disclose as little information as possible to comply with the order.
Finally, note that a withdrawal motion must be brought in good faith. Though the court may not delve deeply into the reasons for withdrawal, a judge may nevertheless scrutinize whether it is for some improper purpose, such as the lawyer's desire to delay a trial. (See Manfredi & Levine
, 66 Cal.App.4th at 1133--1136.)
TRANSFERRING THE FILE
Whether a change in counsel is the result of withdrawal or discharge, the attorney must provide all of the client's "papers and property" promptly upon request. The items to be transferred include "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." (CRPC 3-700(D)(1).)
Because of the qualifying phrase, other items reasonably necessary to the client's representation
, former and current counsel may not always agree on what constitutes the client file. Typically, as stated in the various rules, the file includes pleadings and other papers filed with the court that have become part of the public record; correspondence to and from the client, opposing counsel, witnesses, and other third parties; legal and investigative reports prepared at the attorney's direction; and a client's mental health records (even when the client's treating therapist or physician advises against release of the records to the client). (See Los Angeles Bar Ass'n, Formal.Op. 509 (2002).)
The client file may even include attorney work product. To be sure, an attorney's work product is never discoverable by an opponent. (See Code of Civ. Proc. § 2018.030(a).) However, an attorney's former client may be entitled to, and in fact own, those impressions, conclusions and opinions, especially if they are needed to avoid prejudicing the client's case. (See Los Angeles Bar Ass'n Prof'l Responsibility and Ethics Comm., Formal Ops. 330 (1972) and 405 (1982).)
However, it is less clear whether the attorney's disclosure obligation upon withdrawal or termination includes work product that was not previously shared with the client. Courts and State Bar ethics experts have both noted that this issue remains unresolved. (Rose v. State Bar
, 49 Cal.3d 646, 655 (1989); Cal. State Bar Comm. On Prof'l Responsibility and Conduct, Formal Op. 2001--157.)
Nevertheless, at least one decision suggests that uncommunicated work product is not part of the client's file and does not need to be provided upon termination or withdrawal. (See Matter of Regan
(State Bar Rev.Dept. 2005) 2005 WL 1864217 at *10.) Given the uncertainty, counsel should carefully evaluate the issue on a case-by-case basis. But here's a good rule of thumb: Rather than risk a debate down the road over whether the materials should have been provided, it may be better to err on the side of disclosure, especially if the information is required to avoid prejudicing the client's case. If the information is not required, and has not yet been billed to the client, disclosure may not be necessary.
Remember that the client file is not limited to the contents of a physical file; it includes electronically stored information (ESI) as well. (See Orange Cnty. Bar Assoc. Formal Op. No. 2005-01.) ESI need not be printed out and placed in the paper file; if the attorney has stored the material electronically, it can be shared that way, too. (See Vapnek, Tuft, Peck and Wiener, Cal. Practice Guide: Professional Responsibility (The Rutter Group) [hereafter "Cal. Prac. Guide"] ¶ 10:319.6, citing Cal. State Bar Comm. on Prof'l Responsibilty and Conduct Formal Op. 2007-174.)
Attorneys may charge the client for copying the contents of the file-but only if a provision to that effect is included in the underlying fee agreement
. Otherwise, the file must be provided at no charge. And even in those instances when a copying charge is proper, delivery of the file cannot be conditioned upon payment. (See San Diego Bar Ass'n Ethics Comm. Formal Op. 2001-1.) Of course, an attorney may-at his or her own expense-retain a complete copy of the client's file.
FAILURE TO DELIVER
Attorneys may be disciplined if they unreasonably delay in turning over a client's file after being notified of a substitution of attorneys. (See Bernstein v. State Bar
, 50 Cal.3d 221, 232 (1990); Matter of Phillips
, 4 Cal. State Bar Ct. Rptr. 315, 325--326 (Rev. Dept. 2001).) An attorney may also be exposed to a legal malpractice claim if the failure to provide the file causes actual damage to the client. (See Rosenthal v. State Bar
, 43 Cal. 3d 612, 636-637 (1987).)
In addition, a former attorney cannot negotiate fees from a successor attorney in exchange for turning over the client's file, and any contract based on such negotiations is void. (See Kallen v. Delug
, 157 Cal.App.3d 940, 950 (1984).) When breaking up, it is best to provide what belongs to the ex-client on demand, without delay or request for payment of fees.
Even after an attorney-client relationship has been terminated, lawyers are required to protect the confidential information of former clients. (See Oasis West Realty, LLC v. Goldman
, 51 Cal. 4th 811, 821 (2011); Rest.3d Law Governing Lawyers § 33(2)(a) & Comment "c".) There are, however, a few exceptions to this rule. Attorney-client privileged information may be disclosed if it is necessary for litigating an action for recovery of fees. (See Cal. Prac. Guide at ¶ 10:24.6, citing Los Angeles Cnty. Bar Ass'n Formal Op. 498 (1999).) Attorneys may also make limited disclosure of privileged information in a malpractice case where the information is relevant to liability issues. (Cal. Evid. Code § 958.)
If there is any doubt as to the proper course of action, make sure that confidential client information remains so, unless and until grounds for disclosure are proven.
WHAT ABOUT FEES?
Getting paid for legal work is important, but sometimes it must take a back seat to a client's (or former client's) rights. As previously discussed, attorneys may not hold a former client's file hostage over a fee dispute, nor do anything to prejudice a former client's case.
Also, while there are a number of permissible reasons for an attorney to withdraw (see CRPC 3-700(C)), there are instances when the withdrawal may not be for "justifiable cause" and, in such a case, outstanding fees may be forfeited. (See Rus, Miliband & Smith v. Conkle & Olesten
, 113 Cal.App.4th 656, 674--676 (2003).)
Many attorneys negotiate a lien on their clients' future recovery, often as part of the initial fee agreement. Such liens are respected by the courts, but there is at least one danger to be aware of. When the lien against a future recovery is to secure services on an hourly fee
basis, it is considered a "charging lien" and is deemed adverse to the client's interest, requiring compliance with CRPC 3-300. Under that rule, an attorney may obtain an interest adverse to his or her client only if:
* the terms are fair and reasonable to the client;
* are fully disclosed in writing;
* the client is given the opportunity to seek independent counsel after being advised of this right in writing; and
* the client agrees to the terms in writing.
If these requirements are not satisfied, the lien is deemed invalid even though the fee agreement otherwise remains intact. (See Fletcher v. Davis
, 33 Cal.4th 61, 71-72 (2004).)
In contrast, when the lien is to secure services on a contingent fee
basis, it is not considered adverse to the client's interest, so the attorney does not have to comply with CRPC 3-300.
The differing treatment stems from the fact that in a non-contingency case the lien could engulf the entire recovery, whereas in a contingent fee case, the fees are tied to the total recovery and will never consist of more than the agreed upon percentage. (See Fletcher
, 33 Cal.4th at p. 70 n. 3.)
Although a client has the right to discharge his or her lawyer at any time, a discharged attorney may nonetheless be entitled to all fees that have been duly earned. (See ABA Model Rule 1.16, Comment (4).) However, the amount of recovery depends on the timing of and reasons for the discharge (see Estate of Falco
, 188 Cal.App.3d 1004, 1014 (1987)). And in a contingency case, if the attorney's withdrawal is without justifiable cause, the recovery is potentially zero. (See Duchrow v. Forrest
, 215 Cal.App.4th 1359, 1382 (2013).) )
An attorney who holds money in a trust account for pre-paid services is entitled to the earned portion of the fees upon termination and must promptly refund any unearned portion to the client. (CRPC 3-700(D)(2).) Unfortunately, disputes sometimes arise regarding the earned and unearned portions of pre-paid fees. In such cases, the attorney must maintain the disputed amount in his or her client trust account until the dispute is resolved. (CRPC 4-100(A)(2).)
Disputes over attorney's fees disputes may be dealt with via a civil breach of contract action. Attorneys also have the option of seeking quantum meruit recovery for the reasonable value of the services provided. However, before any suit can be brought for the recovery of fees, the attorney-client relationship must be over (whether by termination or withdrawal), and the former client must be notified in writing of his or her right to arbitration. (See CRPC 3-310, Cal. Bus. & Prof. Code § 6201(a).)
A host of ethics issues bubble to the surface whenever an attorney-client relationship ends. Regardless of whether the attorney withdraws, is fired, or is "substituted out" for new counsel, the most important thing for the attorney to remember is that the client's rights come first. This does not mean that attorneys must bow to every client demand upon termination-only that the attorney should devote extra care to decisions regarding client relationships that are coming to an end.
Several steps will help protect an attorney whose relationship with a client has ended. These include, but are not limited to:
* providing written notice confirming the termination;
* advising the former client of all pertinent deadlines;
* refunding any unused retainer funds; and
* promptly providing the client's file upon request.
If questions remain as to the termination of the attorney-client relationship, attorneys should refer to the California Rules of Professional Conduct and not hesitate to contact the California State Bar or a local bar association. That's what the ethics hot lines are for.
RESOURCES FOR ETHICS ASSISTANCE
- State Bar Ethics Hotline
- Hotline & Ethics Opinions
- San Francisco
- San Diego
- 619/231-0781 x4145
Steven D. Wasserman is a partner, and Joel A. Kane an associate, at Sedgwick LLP in San Francisco.
- Ethics Opinions Only
- Los Angeles Bar Association
- Orange County Bar Association