|Oregon State Bar Bulletin OCTOBER 2010|
No, this has not become an advice column for the lovesick and heartbroken. Nor is it meant to address ending the difficult lawyer-client relationship. Even when the lawyer-client relationship has been a positive one, however, knowing how to neatly and deliberately close the relationship can help to ensure that the client leaves with clear expectations for the future and that the lawyer avoids ethics and malpractice traps.
One piece of advice that lawyers are likely to hear repeatedly from the bar’s ethics hotline is to send a disengagement letter upon termination of the representation. The purpose of a disengagement letter is to manage the client’s expectations, to make clear that the lawyer does not intend to take any further action on the client’s behalf. While sending a disengagement letter may seem an obvious best practice, it is not always followed for a variety of reasons. Some lawyers may feel the end is clear and need not be reinforced; some may be too busy with new matters to take the time to write; still others may not want to completely shut the door to the relationship.
Establishing clear expectations for the client at the end of the representation is particularly important when some further action may be warranted, but outside the scope of the agreed upon representation. Disclaiming responsibility for future action on a case can help to avoid malpractice claims. In addition, conflict of interest problems may arise when lawyers fail to clarify the end of a relationship. Even a client who has not used the lawyer’s services in some time may nevertheless consider herself a current client. In fact, some lawyers encourage that belief, nurturing the possibility of additional business from the client when legal services are needed in the future.
If a lawyer’s employment is limited to a specific matter, the relationship terminates when the matter has been resolved. If a lawyer has served a client over a substantial period in a variety of matters, the client sometimes may assume that the lawyer will continue to serve on a continuing basis unless the lawyer gives notice of withdrawal. Doubt about whether a client-lawyer relationship still exists should be clarified by the lawyer, preferably in writing, so that the client will not mistakenly suppose the lawyer is looking after the client’s affairs when the lawyer has ceased to do so.
ABA Model Rule 1.3, Comment 
In Oregon, a lawyer-client relationship exists if the purported client has a reasonable expectation under the circumstances that such a relationship exists. In re Weidner, 310 Or 757 (1990).
We hold that, to establish that the lawyer-client relationship exists based on reasonable expectation, a putative client’s subjective, uncommunicated intention or expectation must be accompanied by evidence of objective facts on which a reasonable person would rely as supporting existence of that intent; by evidence placing the lawyer on notice that the putative client had that intent; by evidence that the lawyer shared the client’s subjective intention to form the relationship; or by evidence that the lawyer acted in a way that would induce a reasonable person to rely on the lawyer’s professional advice. The evidence must show that the lawyer understood or should have understood that the relationship existed, or acted as though the lawyer was providing professional assistance or advice on behalf of the putative client….
Weidner at 770.
Thus, a lawyer who has not taken effective steps to document or clarify the end of a representation may find that a person believed to be a former client is in fact a current client. See, e.g., OSB Formal Ethics Op No 2005-146 (lawyer who sends periodic reminders to past clients regarding the possible need for further action on completed matters, maintains a current-client relationship with those clients).
Distinguishing between current and former clients is important because the conflict rules for current clients are stricter and apply in more situations than those for former clients. For example, RPC 1.7 applies any time that the representation of a current client is directly adverse to another current client. The limitations of RPC 1.9, by contrast, generally apply only when a lawyer undertakes a representation adverse to a former client and the matter involved in the prior representation is the same or substantially related to the new matter. In short, former clients have less “veto-power” over a lawyer’s other clients and work than do current clients. Further, unlike current client conflicts, former client conflicts can always be waived with the informed consent, confirmed in writing, from each affected client. See RPC 1.9(a).
As file storage costs increase and lawyers look for ways to trim their budgets, many lawyers have asked general counsel’s office whether and when they may destroy closed client files. While the Oregon Rules of Professional Conduct do not directly address the question, they do provide some guidance. Oregon RPC 1.15-1(a) requires that lawyers safeguard client property and maintain “complete records of …funds and other property” for five years after termination of the representation. This rule is usually interpreted to apply to lawyers’ obligations to maintain trust accounts and trust account ledgers. However, both Oregon case law and ethics opinions indicate that client property includes files maintained by lawyers on their clients’ cases. See, e.g., OSB Formal Ethics Op No 2005-125. Thus, RPC 1.15-1(a) could be interpreted to require lawyers to keep at least a “record” of their client files for five years. In addition, because client files may well include original client documents, the decision about whether to destroy a file will depend in part on the client’s wishes and the lawyer’s obligation to preserve client documents and information in accordance with RPC 1.15-1. Further, under RPC 1.16(d), lawyers are required upon termination of representation to “surrender papers and property to which the client is entitled….”
In addition to their obligations under the rules of professional conduct, lawyers should consider the substantive law of their area of practice for guidance about how long they should retain client files. For example, estate planning lawyers who still keep their clients’ original wills, should consult ORS 112.800-112.830, which establishes the terms and conditions under which lawyers may destroy wills. The ABA Legal Ethics Committee has offered the common sense advice that lawyers should exercise discretion in determining the length of time for retention of a file, depending on the nature and content of the file, and the relevance and materiality to matters that might be expected to arise in the future. See ABA Informal Op No 1384 (1977). Thus, lawyers should not destroy or discard information that they know their clients are likely to need in the future, such as corporate books or records, or information relating to the establishment of intellectual property rights. Note, too, that the PLF has file retention guidelines that parallel to some extent the statutes of limitations on malpractice claims.
If lawyers do not want to maintain responsibility for these types of file materials, then they must ensure that their clients have a complete copy of their files (as well as all originals where necessary) at the close of representation. Either the disengagement letter or the initial fee agreement (or both, ideally) should notify clients of the lawyer’s retention policy, exactly when the lawyer plans to destroy the client file, and how the client can obtain a copy of the file.
Finally, when purging client files, lawyers should be mindful of their duty of confidentiality. Lawyers may contract with third parties to dispose of client files as long as they make reasonable efforts to ensure that the third party takes steps to protect confidential information. See OSB Formal Ethics Op 2005-141(law firm may contract with recycling service to dispose of documents that may contain information relating to the representation of a client.)
This column obviously just touches the surface of issues that lawyers should be aware of when ending a lawyer-client relationship. For more in-depth information on managing and disposing of client files, the Professional Liability Fund (PLF) publishes a number of useful guides, including File Retention and Destruction, which can be found on the PLF website at www.osbplf.org/docs/aids/File%20Retention.pdf. In addition, the PLF practice management advisors can be a helpful resource for questions unique to your practice or your situation.
ABOUT THE AUTHOR
Helen Hierschbiel is general counsel for the Oregon State Bar. She can be reached at (503) 620-0222, or toll-free in Oregon at (800) 452-8260, ext. 361, or by e-mail at firstname.lastname@example.org.
© 2010 Helen Hierschbiel