The Ethics Hotline at the State Bar of Michigan [(517) 485-ETHX] receives approximately 20 calls per day from Michigan lawyers seeking guidance on a full array of ethics issues for lawyers. Although many questions are novel, many others are asked on a frequent basis. This article will focus on the five most frequently asked questions and the responses given.
The questions, in no particular order, are:
1. My basement is full of old client files. Can I get rid of them?
There is no "magic" time period for retaining old client files. A firm that defends traffic tickets has very different needs than a firm which handles estate planning. Each law firm, including a solo practice, is obligated to have a record retention policy. The length of time a client file is retained should be carefully decided, based upon the type of practice by the lawyer. The record retention policy should include, at a minimum:
- Instructions to lawyer and nonlawyer personnel concerning their obligations under the policy;
- Information concerning the location of storage facilities;
- Methods for the eventual disposition of records and files;
- Information concerning retention periods and the establishment of retention periods; and
- A system for monitoring lawyer and nonlawyer employee compliance with the plan.
A good record retention policy will involve clients in the decision-making process of when files will be destroyed. Client participation may involve offering the file to the client or reaching an agreement with the client about the disposition of the file after an appropriate retention period.
If the client does not want the file, or is unavailable to give directions concerning the file, a lawyer may destroy the file after giving the client reasonable notice, as long as the file is destroyed in a manner that preserves the confidential and secret nature of the information in the file.
For further guidance, please see MRPC 1.6, 1.15; R-5, R-12; RI-109, RI-178, and RI-240.
2. My former client has retained new counsel and has asked for "my" file. Do I have to give my ex-client the entire file, even if the client still owes me money?
Lawyers must remember that they work for the client, not the other way around. Assuming a client pays the lawyer's bill, the "file" belongs to the client. But what if the client doesn't pay the bill? Does the file include the lawyer's personal notes or other "work product"? A typical situation is where the client has decided to change lawyers midstream during litigation. Usually, this means that the client is not satisfied with the original lawyer, which also means that the client has not fully paid the bill for the lawyer's services. The lawyer wishes to exercise a retaining lien on the file until the client pays the bill.
In RI-203, this situation was addressed. In that opinion, it was stated that a lawyer may not ethically exercise a retaining lien on client property (including the client file) if the client needs the property to pursue the client's legal rights or when a refusal to turn over the file would prejudice the client's case. The opinion further states that in the absence of an agreement for the client to pay for file copies, a lawyer may not ethically charge the client for copying the representation file. A withdrawing lawyer may not condition release of a client's property on the agreement by successor counsel to pay or advance the unpaid portions of a client's bill.
A client's file also includes the personal notes of the lawyer and other work product prepared by the lawyer. An exception to this rule is where the notes of the lawyer are so personal that the release would be prejudicial to the client (such as where the lawyer makes notes concerning the perceived mental status of the client). For further guidance, please see MRPC 1.6, 1.15; R-12; RI-203, RI-86, RI-109, RI-240.
3. I am changing firms. What kind of notice may I send to my current clients? May I take my clients with me?
First, it must be remembered that clients do not "belong" to the lawyer. Clients always have the unconditional right to choose a lawyer of their own choice. However, when a client goes to a law firm and retains the firm, there is a presumption that the client hired the firm, not the individual lawyer assigned to the case.
Whenever possible, it is best for the departing lawyer and the lawyer's former firm to send a jointly signed letter to the clients of the lawyer. Usually this letter will state that the lawyer is leaving the firm and that the client has the choice to decide whether to stay with the firm or to request that the file be transferred to the departing lawyer. Any decision by the client to transfer the representation should be in writing.
If the parting is not "sweet sorrow," the departing lawyer and the former firm many times issue separate letters to the client. The former firm may state that the lawyer has left the firm and that the firm has chosen "Lawyer A" to continue representation. The letter usually reaffirms the client's choice of counsel but encourages the client to stay with the firm.
The departing lawyer will usually send a separate letter to the clients, stating that the lawyer has left the firm and is now located at a new address. The lawyer may also state that he or she would welcome new business, or that the lawyer continues to handle a certain type of case. However, the departing lawyer may not affirmatively ask the client to "move" with the departing lawyer. This would be improper solicitation. However, if asked by the client, the departing lawyer may advise the client on how to ask for the client's file to be transferred.
The above general discussion is subject to many qualifying conditions, some of which depend on whether the departing lawyer was a principal or associate in the former firm. All lawyers changing firms should carefully review the ethics opinions to make sure that the correct procedures are being implemented.
For further guidance, please see R-4; RI-49, RI-86, RI-245, and an excellent article, "Lawyers Changing Firms," by Marcia L. Proctor, which appeared in the February 1990 edition of the Michigan Bar Journal.
4. What is "of counsel" and when is it appropriate to list someone as "of counsel" on the letterhead?
A lawyer or a law firm may be designated "of counsel" to one or more lawyers provided that the relationship is close, personal and regular with frequent and continuing contact. This is true whether the person or firm is located in Michigan or out-of-state. A partner, shareholder, associate, occasional consultant, or office-sharer may not be designated of counsel.
When a named shareholder of a professional corporation retires from the active practice of law and is no longer a shareholder in the firm, but remains associated with the firm in "of counsel" status, the firm may retain the retired shareholder's name in the firm name where the firm name has been long-established and well-recognized, if communications about the lawyer's status clearly indicate that the lawyer is retired. Lawyers and law firms engaged in "of counsel" affiliations are treated as one firm for purposes of the rules governing lawyer disqualification and lawyers as witnesses. If the "of counsel" and the law firm are located in different jurisdictions, any jurisdictional limitations of the affiliated lawyers must be made clear on public communications concerning the relationship.
For further guidance, see MRPC 7.5; RI-90, RI-102, RI-237 and "The Nuts and Bolts of Letterhead" in the November 1997 edition of the Michigan Bar Journal.
5. May I send a letter "advertising" my practice to the general public in my town?
Direct mail advertising or solicitation is governed by MRPC 7.3(a). That rule is further supplemented by the United States Supreme Court case of Shapero v Kentucky Bar Association, 486 US 466; 108 S Ct 1916; 100 L Ed 2d 475 (1988). Under these rules, a lawyer may send a "truthful and nondeceptive" letter to potential clients known to face particular legal problems. Also, a lawyer may send letters or advertising circulars to the general public not known to need legal services of the kind provided by the lawyer, but who are so situated that they might in general find such services useful.
For further guidance, see MRPC 7.3; RI-18, RI-49, RI-74, RI-193, RI-244.
Bonus Question: How do I get copies of the Ethics Opinions that you quoted? The full text of the State Bar's ethics opinions are found on the Bar's internet website, free of charge. Find our home page at www.michbar.org, then click on the "Ethics Opinions" button.
Thomas K. Byerley is the Regulation Counsel for the State Bar of Michigan.