In the aftermath of Hurricane Florence, which last month dumped up to 35 inches of rain on parts of the Carolinas, Virginia and Maryland, caused 48 deaths, and up to $22 billion in property damage, comes a timely new ABA opinion about our ethical obligations related to disasters.

The hurricane did not spare lawyers and law firms.  Ahead of the 1,000-year storm, reported that firms in Florence’s projected path shuttered offices, activated contingency plans, and were glad if their firm systems and client data were stored in the cloud.  (Subscribers can access the story here.)  (And doing the profession proud, volunteer lawyers manned hot-lines to help storm victims get needed legal services.)

But what are our actual disaster-related ethics duties?

Communication, withdrawal, files and more

Disasters happen; that’s a fact of life.  The entire 13-page Opinion 482 (Sept. 19. 2018) repays reading.  Some highlights and nitty-gritty advice from the opinion:

  • Model Rule 1.4 requires us to communicate with our clients.  To be able to reach clients following a disaster, the opinion says, you should maintain or be able to quickly recreate, lists of current clients and their contact information.
  • You “must evaluate in advance storing files electronically” so that you can have access to those files via Internet or smart device, if such are available after a disaster.
  • If you can continue to provide services in the disaster area, you continue to have the same ethics duties as before; but in an emergency, you may be able to provide advice outside your area of expertise, as allowed by comment [3] to Rule 1.1 (“Competence”).  (We’ve previously written here about “emergency lawyering.”)
  • If you’re a litigator, check with courts and bar associations to see if deadlines have been extended across the board.
  • You “must take reasonable steps in the event of a disaster to ensure access to funds” you are holding in trust, the opinion advises.  Of course, your obligations will vary depending on the circumstances.  If you know of an impending disaster, you should determine if you should reasonably transfer client funds to an account that will be accessible; or even attempt to complete imminent transactions before the disaster hits, “if practicable.”
  • You may need to withdraw after a disaster, under Rule 1.16 (“Withdrawal”) and Rule 1.3 (“Diligence”), if a client needs immediate legal services that you will be unable to timely provide.
  • If client files are destroyed, your duty of communication will require you to notify current and former clients about the loss of client property with “intrinsic value.”  But there is no duty, the opinion concludes, to notify either current or former clients about the loss of documents that have no intrinsic value, for which there are electronic copies, or that serve no current useful purpose.
  • To prevent the loss of important records, “lawyers should maintain an electronic copy of important documents in an off-site location that is updated regularly.”

Disaster Prep 101:

The ABA has a committee devoted solely to the topic of disaster preparedness, and its website has helpful resources and tips on everything from getting insurance, to types and methods of information retention, and how you can assess damage and rebuild after a disaster strikes your practice.  The committee’s 44-page Surviving a Disaster — A Lawyer’s Guide (Aug. 2011) is also helpful.

And remember, calamitous disasters aren’t confined to weather, war, and the like.  A disastrous health event can leave your practice reeling, especially if you are a solo or in a small firm.  As we’ve pointed out before, one’s own death and disability are not pleasant to think about, but choosing a profession in which we owe fiduciary duties to others requires us to make contingency plans, like those laid out in my home bar association’s “What-If Preparedness” program.

In all events, thinking about the unthinkable is part of what we do.

digital archiveA high-profile duel over rights to legal databases is playing out in state court in Boston.  The warring parties are six former partners and the asbestos defense firm they left, allegedly taking with them high-value file-management and other databases.  The firm’s suit, filed in November, raises the question:  When partners leave, does a database that includes client information belong to the clients they take with them?  Or to the old firm, which says it has invested heavily in developing the proprietary database?

Digital age departures

Model Rule 5.6(a), adopted by Massachusetts and most other jurisdictions, makes client choice the paramount concern when lawyers move from firm to firm, prohibiting any agreement that restricts the right of the migrating lawyers to practice.  Model Rule 1.16 also protects a client’s right to their file when the representation terminates, thus limiting the right of the old firm to “lock up” the file, and protecting the right of the departing lawyers to take files and service clients at their new firm.   And Massachusetts’ version of Rule 1.16 enlarges on that concept, with an expansive and detailed list of file items that “belong” to the client.

But where does a custom-developed digital database fall under an ethics rule analysis?  Firms can invest heavily in developing such specialty management tools.  Does the principle of client choice mean that departing lawyers can walk away with such a valuable asset and use it to service those clients in their new practice?

Database dispute

As reported in the ABA Journal, the Boston Globe and the Boston Business Journal, the Governo Law Firm asserts in a  complaint filed in Suffolk County Superior Court that the six former partners had been negotiating to buy the firm.  Included in the discussions were the databases, which Governo alleges it developed as a proprietary system, and which it says contains information about billing, expert witnesses, client correspondence, court rulings and asbestos litigation literature.

The Boston Business Journal describes the Governo firm as “a small firm that has built a national profile defending companies accused of exposing workers and consumers to asbestos.”

According to the complaint, before abruptly ending the sale discussions and leaving, one of the former partners had copies of the databases downloaded to her own computer.  The six partners allegedly took more than half of Governo’s business with them; the complaint asserts claims for misappropriation of trade secrets, interference with contractual relationships and civil conspiracy.

The former partners opened their new firm on December 1, and are asserting that the database information belongs to the clients who came with them, and who were billed for the work connected to the databases.

On January 11, the Suffolk County Superior Court in Boston denied the Governo firm’s motion for preliminary injunction, ruling that the record was too undeveloped to determine whether the databases belong to the Governo firm, or to the clients who moved their business to the new firm.  A scheduling conference is set for Feb. 14.

The Boston Globe reported that the case is being carefully watched, for its potential to make law on “leaving a law firm in the digital age.”

Watch your P’s and Q’s

In denying injunctive relief, the judge reportedly assessed evidence from both sides on the ownership of the database material, but found it insufficient to decide.  That would appear to be a sound call, since determinations in this area can be very fact-specific.  Key factors might be whether the firm used its own funds to develop the data base, or if those development costs were passed on to clients.  In the latter case, an argument could be made that the clients charged for  creation of the database should have a continuing right to have the lawyers use it at their new firm.

Whether you are a firm manager or a lawyer thinking about leaving your firm for greener pastures, this is an area where it pays to check your jurisdiction’s rules and ethics opinions before acting.  As we’ve noted before, some states regulate the departure process by rule, and others have guidance on notice, client files and more, in their ethics opinions.  The law also continues to develop on law partnership agreements that try to bring some certainty to this potentially contentious aspect of legal practice.  We’ll continue to keep you posted.

Money and JusticeOld-time lawyers say that it used to be easy to get the court’s permission to withdraw from a case.  You would just go to the judge and state, “Your Honor, we are not ready to go forward, and I am seeking leave to withdraw, because Mr. Green has not arrived.”  You know:  “Mr. Green” aka the moolah, aka the promised fee from the client.  And, so the story goes, the judge would bang the gavel and grant your motion.  (For a variation on the theme, see The Lincoln Lawyer, 2011, starring Matthew McConaughey.)

Such stories may be apocryphal, and whether true or not, hopefully we’ve come a long way in our understanding of the duties we owe clients in seeking to terminate our representation.  When withdrawing requires permission of a tribunal, as it does under most court rules, a continuing ethics quandary has been how much information we are permitted to disclose to the court in justifying the request.  On December 19, the ABA’s Standing Committee on Ethics and Professional Responsibility issued some guidance on the subject.

When you “may withdraw”

Model Rule 1.16(b), and state rules based on it, describe when you “may” withdraw from a representation, including when the client “substantially fails to fulfill an obligation to the lawyer regarding the lawyer’s services,” and the client has been warned that the lawyer will withdraw unless the obligation is fulfilled.  Comment [8] gives the example of a client refusing to abide by an agreement concerning fees or court costs.

In civil litigation, the quandary arises because Model Rule 1.6 requires the lawyer to maintain confidentiality about everything “relating to the representation,” with only narrow exceptions, and Rule 1.16(c) requires the lawyer to comply with a tribunal’s rules in seeking to withdraw.

You have to phrase your withdrawal request to the tribunal in some way — but  how far can you go in revealing the reason?  In Formal Opinion 476, the ABA Committee acknowledged the difficulty, quoting one characterization of the issue as a “procedural problem that has no fully satisfactory solution.”

Will “professional considerations” suffice?

The ABA Committee noted that many courts will simply accept a reference to “professional considerations” that are prompting the motion to withdraw.  (Sounds just a little like “Mr. Green.”)  Rule 1.16 cmt. [3] endorses that approach, advising that the “statement that professional considerations require termination of the representation ordinarily should be accepted [by the court] as sufficient.”

But some courts won’t accept “professional considerations” as sufficient.  The Committee cited withdrawal decisions from several jurisdictions that reflected details about the money owed by the client, the specific legal services carried out and other facts, indicating that the court had required much more than a generic statement from the lawyer about “professional considerations.”

The Committee pointed out that Model Rule 1.6(b)(5) and its cmt. [11] permit some disclosure of confidential client information in fee-collection suits by lawyers.  A motion to withdraw for failure to pay is “generally grounded in the same basic right of a lawyer to be paid pursuant to the terms of a fee agreement,” said the Committee.  Also, many court rules specify that motions to withdraw must be supported by “facts,” or “satisfactory reasons,” or similar showings.

Limit the info … but explain if required

Therefore, the Committee concluded, where the assertion that “professional considerations” justify withdrawal is not acceptable, and “when a judge has sought additional information” to support the motion to withdraw for non-payment, then the lawyer may “disclose information regarding the representation of the client that is limited to the extent reasonably necessary to respond to the court’s inquiry and in support of that motion to withdraw.”

What about the judicial officers considering such motions?  The Committee advised that judges “should not require the disclosure of confidential client information without considering whether such information is necessary to reach a sound decision on the motion.”  And if detailed information is required, courts should mitigate potential harm to the client, such as by allowing disclosure under seal or in camera, and by using redaction.

There will always be a tension between the duty of confidentiality and the necessity of providing reasons for a request to withdraw from representation. But Opinion 476 at least charts a path forward when facing the need to withdraw because of a client’s failure to pay.

client filesThe ABA Ethics Committee last week issued an opinion aimed at giving guidance on a sometimes-puzzling question:  what portions of the file does a lawyer have to provide to a client at the end of the matter — including a client who pulls the plug on the representation?

In Opinion 471, the Committee interpreted Model Rules 1.15 (Safekeeping property) and 1.16(d) (Protecting client’s interest on termination of representation).  Based on its own prior 1977 informal opinion, the Committee again endorsed the “end-product” approach — actually followed by only a minority of jurisdictions.

Under that approach, the client is not necessarily entitled to the entire file at the termination of representation.  Rather, what the lawyer must surrender are documents that are the end product of the lawyer’s services.  In contrast, the lawyer is not required to automatically surrender material that may have led up to the creation of that end product.

The Committee’s laundry list of some items exemplifying the end products of a representation include:

  • materials the client has provided to the lawyer;
  • legal documents filed with a tribunal — and those completed and not yet filed;
  • executed instruments, like contracts;
  • orders and other records of a tribunal
  • correspondence issued or received on relevant issues, including e-mail and other electronic correspondence that has been retained according to a firm’s document retention policy;
  • evaluations or records the client has paid for;
  • discovery materials.

Exempted from the definition of end products:  material that the lawyer generated for internal use, or for the lawyer’s own purpose in working on the client’s matters — especially when those matters are already concluded.  So, among the things that lawyers do not necessarily have to return at the end of the representation:

  • drafts;
  • internal legal memos and research materials;
  • internal conflict checks;
  • hourly billing statements;
  • notes regarding an ethics consultation.

The last two items are interesting.  Hourly billing statements will likely be relevant in any fee dispute, and subject to a discovery tussle to the extent not turned over to the client.  And notes of internal ethics consultations have been the subject of sharp dispute when clients and lawyers sue each other, centering on whether the attorney-client privilege applies.  (We’ve discussed that dispute before, here.)

Even while again adopting the end-product approach, the Committee emphasized that it can’t be applied mechanically. Especially if the matter is not finished when the client ends the representation, “the former client may be entitled to the release of some materials the lawyer generated for internal law office use primarily for the lawyer’s own purpose…”  A lawyer’s obligation under the rules “reasonably gives rise to an entitlement to those material that would likely harm the client’s interest if not provided,” and sometimes that may involve turning over internal or preparatory materials.

It’s been noted that the Committee’s opinion appears to avoid as many questions as it answers.  And the opinion does seem to say that lawyers don’t have to turn over preparatory materials …. unless they do.

But as much as we may want black and white answers to our ethics questions, this is not an area where that’s possible, and lawyers will continue to have to make reasoned judgments about what their obligations are when it comes to  handing back client files.  And as always, check your own jurisdiction’s rules and ethics opinions; they will vary.