The California State Bar’s Standing Committee on Professional Liability and Conduct recently issued a Formal Opinion to answer the question: What ethical obligations arise when a lawyer departs from her law firm?
Initially, the Committee stresses that: “The guiding ethical principles governing any attorney departure are the protection of the client’s best interests and the client’s right to the counsel of its choice…. Because clients have the freedom to discharge their lawyer at will and hire another one, they do not ‘belong’ either to the law firm or the lawyers that are providing the legal services…. In a competitive legal marketplace, law firms and lawyers must earn each client’s continued loyalty through outstanding service, quality of representation and an agreement regarding the value and cost of legal services.”
The Opinion then makes it clear that both the departing lawyer and the law firm each have ethical obligations in connection with the departure, and must prioritize their ethical obligations to each client above their own competing interests.
When the departing lawyer is one of the principal attorneys working on a matter, both the departing lawyer and the law firm each have a duty to communicate the fact of the departure to the client and to explain the significance of the change in representation, so that the client may make an informed choice regarding counsel going forward. Ideally, “Law Firm and Departing Lawyer should attempt to agree upon and provide joint written notice to all clients on whose matter(s) Departing Lawyer is responsible or for whom she plays a principal role in Law Firm’s delivery of legal services.” Notably, “any lawyer is ethically permitted to solicit in person, by telephone or by email any client with whom the lawyer has a family, close personal, or prior professional relationship, provided that in the course of said solicitation the lawyer does not make any false or misleading communications to the client.” However, “neither Departing Lawyer nor Law Firm should solicit, or continue to solicit, any client that has made it known that they do not want to be solicited, or in any manner which involves intrusion, coercion, duress or harassment. No lawyer should attempt to keep a client at a law firm by imposing conditions on how or when the client can leave the firm, transfer its matters or receive its file. For example, a lawyer should never: (1) condition the release of a client file or willingness to transfer the matter to new counsel on the client’s payment of any outstanding balances or costs to duplicate the files; (2) impose any contractual obligations on the client as a condition of signing a transfer authorization letter; or (3) improperly suggest that it would cost the client additional fees or costs to leave the firm.”
During all phases of the departure, the lawyer and the law firm must be mindful of their continuing obligations to protect client confidences and to avoid conflicts of interests.
If the lawyer or law firm is unable to competently handle the client’s representation as a result of the departure and cannot remedy that situation, or if the client chooses to make a change in representation, the lawyer or law firm must comply with Rule 1.16, including taking “reasonable steps to avoid reasonably foreseeable prejudice to the rights of the client.”
Finally, both the departing lawyer and the law firm have a duty to cooperate in the transition of any client matter in order to protect the client’s interests. “If the client elects to follow Departing Lawyer or retains another firm, Law Firm must promptly forward any requested part of the client’s file to the client or its new attorney. Pending the client’s instruction, however, Law Firm and Departing Lawyer should have reasonable access to the file in order to protect the client’s interests. Departing Lawyer should never remove the client’s files without the client’s consent. Even where the client has requested that file be transferred to Departing Lawyer, Law Firm should be given reasonable notice and an opportunity to copy the file. However, Law Firm should do so as quickly as possible to avoid any potential prejudice to the client, prioritizing getting files to clients where there are time-sensitive and pressing client matters that are in active litigation or with pending deadlines. In addition, if the client is leaving a law firm, any original client property and unearned client funds should be returned promptly to the client so as not to prejudice the client’s ability to retain new counsel. While an attorney-client fee agreement can hold a client responsible for costs of copying client files, a firm can never condition the return of client files or property on receipt of those costs or the payment of any outstanding legal fees. The client’s papers and property belong to the client, not to the attorney. The client’s ownership is not altered by the circumstances or the timing of the termination of the attorney-client relationship, or by whether the attorney has been paid for his or her services.”
California Formal Ethics Opinion No. 2020-201.