How to Avoid a Grievance when Terminating an Attorney-Client Relationship
All attorney-client relationships come to an end at some point, as we know. But what you may not know is that the process of terminating the attorney-client relationship is rife with the potential for disciplinary rule violations. The irony being, you may have provided exceptional representation and received a great result for your client - and still wind up defending yourself against a grievance.
Mistakes made while terminating the attorney-client relationship account for the number three reason a lawyer is grieved, behind allegations of lack of communication and neglect.[1] Considering that the representation is largely over at this point, this may seem surprising. I suspect that is exactly why it happens - most lawyers do not recognize the importance of these seemingly minor details in parting ways with a client. They are often delegated to staff and forgotten as the lawyer moves on to new clients. But just as doctors with poor bedside manner receive disproportionately high numbers of malpractice claims,[2] lawyers who do not take the time to attend to the client’s needs – especially as the representation is ending – will face higher numbers of grievances and malpractice lawsuits.
There are a number of issues surrounding withdrawal and proper termination of representation, including the timing of the withdrawal and whether good cause exists for withdrawal. Such issues require a detailed factual analysis and are beyond the scope of this article. For our purposes, we will assume either that the case is over, that it is the client’s decision to early terminate the representation, or that the lawyer has appropriate grounds for withdrawal and the timing will not prejudice the client. This article will therefore focus on mistakes made during the process of withdrawal that result in a large number of grievances.
Providing the Client File Upon Request
The first issue that comes up in an astonishing number of disciplinary cases is the simple failure to provide the client’s file upon request. Texas Disciplinary Rule of Professional Conduct 1.15(d) states, “Upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect a client’s interests, such as …. surrendering papers and property to which the client is entitled. ….”
Rule 1.15(d) violations usually result from providing no file, an incomplete file, or not providing the file quickly enough. The rules do not specify what constitutes a reasonable amount of time in which to comply with this request, but I have personally seen cases sent into investigation where the attorney had not been given more than a couple of weeks to comply. The bottom line is - the file must be provided promptly, and while the definition of “promptly” may be debated, you will need to justify even slight delays in providing the client his or her file. Far better to avoid a grievance all together by establishing procedures to have the file to the client within a week or less of the request.
It may sound elementary, but the first step to accomplishing this goal is to actually keep a client file, and to update it in real time. Whether electronic or paper, it is imperative that there be a file assigned to each client in which all pleadings, orders, notes, correspondence and other documentation is placed as the case progresses. As I am writing this article, one of my lawyer clients has yet to provide me his client file on a case that I requested over two weeks ago. This type of delay is frequently the result of having to create or substantially update a file after the fact. With a busy practice, it is easy to neglect non-urgent matters like file maintenance. But this makes it monumentally more difficult to prepare and provide the file after the case is over. Do yourself a favor and make sure that files are maintained in real time. It will make the process of providing the client file seamless and avoid an unnecessary grievance, which would be much more costly and time-consuming than the effort it takes to keep the file updated.
A second issue lawyers run into with providing the client file is not knowing what exactly to provide. The short answer is - everything. Many lawyers still believe that their work product and case notes do not belong to the client. This is incorrect. With very limited exceptions, a lawyer’s notes and work product must be provided to the client.[3] Moreover, the client is entitled to the original file documents. If you, as a lawyer, want to retain a copy of the file, it is incumbent upon you to make a copy for yourself but to supply the original file to the client. All copying expenses are borne by the attorney, not the client.
Criminal defense attorneys are frequently concerned about receiving a grievance for not providing discovery received from the prosecution under Code of Criminal Procedure Article 39.14(f).[4] This is something that the State Bar’s classification attorneys are generally aware of, and have been trained to consider when reviewing a grievance alleging that portions of a file were not received. If you have provided the file to the client upon request, but have withheld discovery under Article 39.14(f), be sure to include a letter explaining why that information cannot legally be provided. Sometimes the client will include the letter as part of their grievance materials, thinking it proves that they are not receiving everything. In fact, if a classification lawyer sees from the letter that everything has been provided except discovery under Article 39.14, it will virtually ensure that the grievance will be dismissed.
Another problem arises when the lawyer destroys the client file too soon. If the client comes back at some future date to request the file and the lawyer is unable to provide it because it has been destroyed, the lawyer could be facing a sanction if the file was not retained for a reasonable amount of time. But what is a reasonable amount of time? The unsatisfying but true answer is, it depends on the case.
The disciplinary rules do not tell attorneys how long they must keep client files, or even provide any specific guidance on the issue.[5] Professional Ethics Committee Opinion 627 acknowledges this void and resorts to “guiding principles” to determine the appropriate considerations for file retention. For our purposes, the primary consideration is the lawyer’s continuing obligation not to harm the interests of a former client. This requires a lawyer to thoughtfully consider whether the client could reasonably need the file at some future point. As we know, in criminal cases, a client’s potential need for the file may vary wildly depending on the type of case, how it was disposed of, the availability of future appeals, etc. There is not a one-size-fits-all answer for the criminal practitioner. You will therefore need to put some reasonable policies in place that vary depending on the nature of the case and its disposition. Alternatively, and more common these days, is to keep electronic files for each client and to retain them indefinitely or for a prolonged period of time that ensures the file can be provided if needed for an appeal.
One final note on this issue - the rules do require a five-year retention of client trust account records.[6] If you are not retaining client trust account records for at least five years or, even worse, you do not put advance fee payments into your trust account or even have a trust account–you are violating a number of disciplinary rules. All of which may come to light when the client files a grievance for failure to supply their file. It is critical that you understand the rules governing the proper handling of fees and that you are maintaining proper trust account records for each client.
In terms of how to deliver the file to the client, this can require a more unique approach in criminal cases, particularly when the client is incarcerated. Generally, it is sufficient to tender a client’s file to be picked up at the lawyer’s office by the client or a designated representative.[7] It is also normally permissible to provide the file as it is maintained, which in many instances would be a digital format.[8] But for the incarcerated client, unless you are in agreement otherwise, it will usually be necessary for you to print out a hard copy of the file and mail it directly to the client. This can be expensive and time-consuming, but not nearly as expensive and time-consuming as defending a grievance. If there are certain items that cannot be provided in this manner, as long as you are working with the client and making reasonable efforts to get the information to him or her (or a representative) that will generally be sufficient to comply with the rules.
Failure to Refund Unearned Fees
When an attorney-client relationship ends before resolution of the legal matter for which the attorney was retained, you can bet the client will be asking for a refund of some or all of the fees. How you respond to this request will play a huge factor in whether that client decides to grieve you.
Many criminal practitioners charge flat fees and, if fired prematurely (particularly without good cause), will take the position that the fee was earned upon receipt and that no portion of it need be returned. Sometimes there is language in the fee agreement specifically stating that the fee is earned upon receipt and non-refundable.
Not only is refusing a refund on this basis one of the quickest ways to get a grievance, but it is an incorrect statement of the law. A flat fee is not earned upon receipt, even if language in the fee agreement says it is.[9] The fee is not earned until the legal work for which the fee is paid is completed. Theoretically, this means until the case is resolved. But many practitioners, rather than waiting until completion of the case to consider the fee earned, will use a graduated fee agreement to delineate what portions of the fee are earned upon completion of certain tasks in the case. This is perfectly fine, and even preferable. It leaves less room for misunderstanding by the client about how and when the fees are earned, and allows the lawyer to be paid as the case progresses.
When the Bar receives a grievance alleging that a lawyer refuses to refund fees, they attempt to determine whether there is a legitimate fee dispute - a valid disagreement about how much of a fee has been earned - versus a flat refusal to refund fees that clearly have not been earned. This can be difficult to discern from the face of a grievance, but if it appears that the lawyer is refusing to consider any refund even though a case ended prematurely, it is more likely to be upgraded for investigation. If this happens, the Bar will often check to see if you have a trust account and may even subpoena your trust account records to see if the fee was deposited into the trust account when received.
The Bar investigator will typically ask the lawyer to provide invoices justifying the fee or, if it is a flat-fee case, to essentially create an invoice estimating the hours billed times the hourly rate. If the lawyer is unable to justify keeping the entire fee, the case will likely be set for an investigatory hearing, after which the lawyer may be offered a sanction for violation of Rule 1.15(d).
If you want to avoid this time, money, hassle, and mark on your professional reputation, the time to negotiate with a client about a refund is before a grievance is filed – i.e., when the client first raises the issue. I have many lawyer clients who, after a grievance has been filed and they have hired me to defend them, tell me they are more than willing to refund some of the fee to resolve the matter. But once a grievance is pending, it is too late to negotiate directly with the client. Not only is there no way to “settle” a grievance at this stage,[10] but such overtures, even when genuine, can appear to disciplinary counsel as an attempt to bribe the complainant or tamper with their participation in the proceeding.
There may be times when the client is being wholly unreasonable – demanding a full refund despite substantial work on the case. Only you can decide whether it is worth it to stand on principle and weather a possible grievance, or try to work something out that may be enough to resolve the issue. It is perfectly ok not to pander to insulting or irrational demands. Just make sure that you can fully justify the amount of the fee you have retained before sending a client away empty-handed. And for the clients who are not being unreasonable but with whom you legitimately disagree about the fee - just know that sitting down with the client to discuss the matter and returning a portion of the client’s money could save you an exponential amount of time, money and trouble down the road. Sometimes it is not as much about the money as the need to feel heard and treated fairly that will make all the difference.
In conclusion, ending an attorney-client relationship well should be given the same priority in your practice as bringing on new clients. Maybe even more. Not only can it save you the stress and frustration of defending a grievance, but it is the lasting impression you leave with clients that will build your reputation over time.
[1] Statistics printed by the Commission for Lawyer Discipline rank it as the number four reason, behind rules addressing integrity. However, the integrity rules incorporate 8.04(a)(1), which includes any violation of the disciplinary rules. The inclusion of this rule skews the data so, in reality, mistakes involved in terminating the attorney-client relationship rank as the third most common basis for an upgraded grievance. See https://www.texasbar.com/AM/Template.cfm?Section=Content_Folders&Template=/CM/ContentDisplay.cfm&ContentID=54492
[2] https://www.natlawreview.com/article/bad-bedside-manner-or-medical-malpractice
[3] See Tex. Comm. on Professional Ethics, Op. 570 (2006).
[4] See Tex. Comm. on Professional Ethics, Op. 657 (2016).
[5] See Tex. Comm. on Professional Ethics, Op. 627 (2013).
[6] Tex. Disciplinary Rule Prof’l Conduct 1.14(a). Moreover, in a recent grievance case I was defending, the Bar took the position that Rule 1.14(a)’s reference to “property” included the client file, thus making the 5-year rule applicable to the entire client file and not just trust account records. Although I do not personally agree with this interpretation of 1.14(a), it may be the safest bet to adopt a 5-year minimum file retention policy on all files.
[7] See Tex. Comm. on Professional Ethics, Op. 657 (2016).
[8] Id.
[9] Cluck v. Commission for Lawyer Discipline, 214 S.W.3d 736, 740 (Tex. App. - Austin 2007, no pet.).
[10] The first opportunity to settle a case in the disciplinary system comes after an investigatory hearing before the grievance committee. Bar Counsel has no authority to settle a case directly with a respondent attorney prior to that time.