[This post is a follow-up to a prior post on the issues involved with terminating a relationship with an attorney.]
In my prior post on the subject of removing a file from one lawyer to transfer to another lawyer, I noted that the ABA Model Rule of Prof. Conduct (RPC) 1.16(d) provides that an lawyer must “promptly” turn over client property (i.e., the file) upon notification of termination, but that the lawyer also “shall take steps” to “protect a client’s interest.” I left off with the issue of how to prevent or control the actions of an lawyer who wants to do a flurry of work on a file after you have provided notice that you want to transfer a file.
This issue is easily addressed. In the notice of transfer letter to the lawyer simply state that the lawyer is not authorized to act past the date of notice without first checking with you. But even in the absence of such language, the lawyer’s burden would be to show that the work really was “reasonably necessary” to “protect a client’s interest” pending a file transfer and that the work could not have waited until after the transfer.
Another issue that may arise when transferring a file is what constitutes the client’s file (i.e., client “property”)? That can be another devilish detail. But the basic rule of thumb to apply is simple: whatever the client has paid for in the file is the client’s property. The client file, however, may contain other documents, attorney notes, etc. that the client has not paid for. In file disputes, many discharged attorneys will object to turning over for free what the client has not paid for.
Another issue that may arise in terminating a relationship with an attorney and transferring the files is who pays the costs of transferring the files. The transfer costs can easily run into the thousands of dollars if numerous document intensive files are involved.
Over the years in counseling lawyers in my private practice, I have found that the costs of transferring files is an issue that is widely misunderstood by attorneys. One thing that many lawyers seem to not understand is that the attorney’s client files actually belong to the clients, not the lawyer. In other words, a client’s file is the client’s “property.” And as I noted in my prior post on this subject, RPC 1.16(d), mandates that a lawyer must surrender client “property” upon termination of the relationship.
Many lawyers who do not understand this ethical obligation want to give the client a “copy” of the lawyer’s file and charge the client for the copy. But the law and the ethics of the legal profession are quite clear on this point. The client is entitled to the client file without charge. If the lawyer wants to make a copy of the file (or any documents within the file) for the lawyer’s records, the lawyer must bear that cost of that copy.
Unfortunately, the professional rules have not kept up with the electronic advances in file storage. Thus it is that disputes now arise over what format the attorney is obligated to return the files when the files are part paper files and part electronic files or are all electronic files.
I have been involved in disputes among law firms when large corporate clients leave and wants to transfer intellectual property files containing very large amounts of data. In those types of situations, disputes can arise when the client (or the new law firm) wants the electronic data transferred using an expensive formatted process. In those situations, I have advised that the lawyer has an obligation to only return electronic client files in a “useable” format. If the client wants something customized that is more expensive, the client (or the client’s new firm) should pay for that.
The final devilish detail that often must be dealt with in a transfer of files is how to deal with any outstanding fees owed to the former attorney. Related to this issue is whether any outstanding or disputed fees have to be paid before the attorney is obligated to turn over the client files. These issues will be discussed in a future blog post.