April 14, 1981
A lawyer may ethically retain copies of all materials in a client's file at the termination of the attorney-client relationship, for his or her own record. The attorney's duty to maintain the confidences of the client continues despite the termination of the attorney-client relationship.
A law firm was retained on an hourly basis to represent a client in a will contest. Due to a material breakdown in the attorney-client relationship, the lawyer requested and was granted permission to withdraw from the case.
The client owes the lawyer's firm a substantial amount for services rendered on his behalf prior to withdrawal, but the non-payment of the lawyer's fees was not a material factor in the lawyer's request to withdraw.
The client has recently written to the firm demanding that the lawyer deliver to him the complete contents of the file on him, retaining no copies of any of the documents for the records. The file contains only copies of pleadings, deeds, correspondence and wills related to the will contest, and the client has already been provided with copies and/or originals of the documents in the file.
The inquiry raises two questions, which are as follows:
- May a lawyer ethically require payment of all outstanding attorney fees relating to this matter and a reasonable amount for copying expenses prior to turning over the contents of said client's file to the client?
- . May the lawyer ethically retain copies of all necessary pleadings, documents, deeds and wills in the client's file, for the lawyer own records, despite the client's demand to the contrary?
In connection to the first quest, the inquirer state:
"It is my understanding that in matters of this kind, attorneys and/or law firms have in practice refused to release the contents of such a client's file until such time as the client pays the outstanding fees owed, plus reasonable expenses for the copying of said contents."
While this Committee has not examined this question before, it was the subject of an early ABA Ethics Committee Opinion. In Formal Opinion 209, the ABA Committee stated:
"In most jurisdictions an attorney is given a lien upon papers of his or her client property in his/her possession as security for the payment of fees. The question presents a disputed issue of fact as to whether there is a balance due the attorney first employed for which the attorney may assert an attorney's lien. Any controversy arising with respect to the assertion of such lien, is ruled by the statement of this committee in Opinion 63, as follows:
"Any question as the amount of an attorneys fee or method of its payment is a matter of contract, expressed or implied to be construed as other contracts are construed. Any controversy concerning such a matter is a matter of law to be determined by the courts. Ordinarily no ethical question is involved in such a controversy."
Because the question presented in that opinion was one of practice and did not involve legal ethics, it was outside of the Committee's jurisdiction and was not decided.
Although this Committee is not bound by decisions of the ABA Ethics Committee, we agree with that committee's decision in this matter. The determination as to whether you have an attorney's lien on the documents and papers in your client's file is a question of law and therefore outside of our jurisdiction. Michigan does recognize the right of an attorney to retain possession of documents, money or other property of the client, in the attorney's hands during the course of the attorney's professional employment until a general balance due for professional services is paid. See Kysor Industrial Corp v DM Liquidating Co, 11 Mich App 438 (1968). This attorney's lien I subject to the control of the court for the protection of the client and third parties and is by no means unqualified. See also, Daul v Sill Mortgages Inc 37 Mich App 708 (1972)_ and Ambrose v Detroit Edison Co, 64 Mich App 484 (1975).
"When an attorney withdraws from a case, his or her reasons for doing so determine whether the lien will be preserved:
'An attorney who withdraws from a suit without cause losses his or her inchoate right to a lien on the ultimate recovery . . . but where an attorney is justified in refusing t continue in a case, the attorney does not forfeit his or her lien for services already rendered' 7 CJS. Attorney and Client Section 220 pp. 1164-1165
. . . since the record here shows good cause for the attorneys to withdraw we hold that the trial judge properly imposed an attorney's lien in this case." (65 Mich App. 484, 488).
Assuming that you have a legal right to assert an attorney's lien, you should be advised that this right is not absolute but is subject to ethical considerations.
"Mere existence of a legal right does not entitle a lawyer to stand on that right if ethical considerations require that he/she forego it. Fir instance, EC 2-23 exhorts lawyers to forego a legal right to '. . . sue a client for a fee unless necessary to prevent fraud or gross imposition by the client.'" ABA Informal Opinion 1461.
Several sections of Michigan's Code of professional Responsibility suggest that an attorney may have an obligation to return all such papers to the client even if the lien is valid. Canon 2, DR 2-110(A)(2) states:
". . . a lawyer shall not withdraw from employment until he/she has taken reasonable steps to avoid foreseeable prejudice to the rights of his or client, including giving due notice to the client, allowing time or employment of other counsel, delivering to the client all papers and property to which the client is entitled, and complying with applicable laws and rules."
While this rule speaks with particular reference to voluntary withdrawal of an attorney, the obligations of a lawyer to the client to which the rule outlines would seem equally applicable in cases of discharge of the attorney.
Before retaining the client's property, a judgment must be made by the lawyer as to how this decision will affect the interests of the client and of others who would be substantially and adversely affected by assertion of the lien. In Informal Opinion 1461, the American Bar Association suggests several factors that the attorney should consider in making this evaluation.
"The lawyer should take into account . . . whether imposition of the retaining lien would prejudice important rights or interests of the client or of other parties, whether failure to impose the lien would result in fraud or gross imposition by the client, and whether there are less stringent means by which the matter can be resolved or by which the amount owing can be secured."
Your inquiry does not provide sufficient information for this committee to advise you in making that evaluation. Your inquiry indicates that a will contest is in process so it would appear that retention of these papers would, or could, prejudice the rights of your client in this litigation. The time and expense involved in reproducing the information that you have retained could possibly delay the litigation and adversely affect the rights of your client and possibly others. These are factors that you should consider.
If it appears that your client's failure to pay is due to a lack of financial resources, ABA Informal Opinion 1461 would relevant.
"Assertion of the lien would be ethically justified when the client is financially able but deliberately refuses to pay a fee that was clearly agreed upon and is due, since this conduct would construe gross imposition of the client . . . [however] the lawyer should forego the lien if he/she knew of the client's financial inability at the beginning."
DR 9-102(B)(4) states:
Obviously, if a court makes the determination that such a lien is not valid, a definite ethical violation would occur if delivery of these documents was thereafter refused.
The second question involves retaining copies of your files despite the client's demand that you no do so. The material in the file may be divided in two categories. First does the client provide the documents, and second do you generate the work product and internal working notes and memoranda during the course of your representation. With respect to the latter, there is no problem in your retaining copies for your own files. While any pleadings may be a product purchased from you by the client, you have at least as much interest in them as the client does. See ABA Informal Opinion 1376.
As to the documents provided to you by the client, there is no reason that would prevent you from keeping copies, despite the client's desire that you not do so. You were originally provided with the documents by the client as the client's agent. There was evidently no statement or condition made at that time that you would not keep copies of any of those documents. In CI-125 this Committee opined that an attorney's duty to his or her client continues even after the termination of the attorney-client relationship. Thus, any documents you received that would be covered by the attorney-client privilege, will retain that protection even after you have ceased representing this client. Other documents would be entitled to the ordinary protection afforded a client's papers by the attorney. Retention of these copies by the attorney may be particularly important should litigation arise between the attorney and the client, such as a fee dispute or a claim of legal malpractice. There is no ethical problem in your retaining copies of your client's file for your own records.