Legal Ethics By: Harry Bartosiak O Reilly, Cunningham, Norton & Mancini Chicago Withdrawal Without Prejudice An Examination of the Ethical Implications of Terminating the Attorney-Client Relationship Through Withdrawal I. Introduction Defense and plaintiff attorneys alike must be keenly aware of the ethical implications of withdrawing from client representation. Not every attorney-client relationship runs its full course and it is periodically necessary to withdraw from representing a client before the particular legal matter at hand is resolved. Situations in which it may be necessary or appropriate to withdraw include: the discovery of a conflict of interest; termination of the lawyer by the client; or the client demands that the lawyer engage in unprofessional conduct. The Illinois Rules of Professional Conduct, as well as the American Bar Association Model Rules of Professional Conduct, are available to guide lawyers in determining the circumstances under which withdrawal from client representation is required or permitted. Lawyers must also take measures, however, to be sure that the manner in which they withdraw is appropriate. For example, attorneys preparing to withdraw from client representation must consider the requirements for providing the client with notice of the withdrawal; the implications of withdrawing during pending litigation; the manner in which the attorney intends to secure his or her fees; and issues concerning the return of a client s files or other property. This article is intended to examine the ethical requirements attendant to withdrawal and some of the issues which arise most frequently during the termination of representation of a client. The article is not designed to be an all inclusive guide on how to withdraw, but instead is intended to providea focus upon the overriding ethical principles to be considered by attorneys when withdrawing from representation. As will be seen below, a review of Rule 1.16 of the Illinois Rules of Professional Conduct is a necessary prerequisite to considering the manner in which withdrawal from client representation must be accomplished. II. Rule 1.16 of the Illinois Rules of Professional Conduct Rule 1.16 of the Rules of Professional Conduct provides as follows: (a) A lawyer representing a client before a tribunal shall withdraw from employment (with permission of the tribunal if such permission is required), and a lawyer representing a client in other matters shall withdraw from employment, if: (1) the lawyer knows or reasonably should know that the client is bringing the legal action, conducting the defense, or asserting a position in the litigation, or is otherwise having steps taken, merely for the purpose of harassing or maliciously injuring any person; (2) the lawyer knows or reasonably should know that such continued employment will result of violation of these Rules; Page 1 of 5
(3) the lawyer s mental or physical condition renders it unreasonably difficult for the lawyer to carry out the employment effectively; or (4) the lawyer is discharged by the client. (b) Except as required in Rule 1.16(a), a lawyer shall not request permission to withdraw in matter pending before a tribunal, and shall not withdraw in other matters, unless such request or such withdrawal is because: (1) the client: (A) insists upon presenting a claim or defense that is not warranted under existing law and cannot be supported by a reasonable argument for an extension, modification, or reversal of existing law; (B) seeks to pursue an illegal course of conduct; (C) insists that the lawyer pursue a course of conduct that is illegal or prohibited by these Rules; (D) by other conduct renders it unreasonably difficult for the lawyer to carry out the employment effectively; (E) insists, in a matter not pending before a tribunal, that the lawyer engage in conduct that is contrary to the judgment and advise of the lawyer although not prohibited by these Rules; or (F) substantially fails to fulfill an agreement or obligation to the lawyer as to expenses or fees; (2) the lawyer s ability to work with co-counsel indicates that the best interests of the client likely will be served by withdrawal; (3) the client consents to termination of the lawyer s employment after disclosure; or (4) the lawyer reasonably believes that a tribunal will, in a proceeding pending before the tribunal, find the existence of other good cause for withdrawal. (c) If permission for withdrawal from employment is required by the rules of a tribunal, a lawyer shall not withdraw from employment in a proceeding before that tribunal without its permission. (d) In any event, a lawyer shall not withdraw from employment until the lawyer has taken reasonable steps to avoid foreseeable prejudice to the rights of the client, including giving due notice to the client, allowing time for 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. (e) A lawyer who withdraws from employment shall refund promptly any part of a fee paid in advance that has not been earned. Rule 1.16 of the ABA Model Rules is similar to the Illinois Rule, but is not a word for word duplicate. Therefore, attorneys must be careful to read the two rules closely and independently of each other. Although Illinois Rule 1.16 provides the ethical dictates and considerations in regard to withdrawal, attorneys must also consult any applicable Supreme Court or local rules. In any event, once the attorney determines that withdrawal is a necessary or appropriate course of action, issues of how to withdraw must be considered. Some of the more frequent areas of difficulty are as follows: 1) notice to the client; 2) withdrawal during pending litigation; 3) return of client files and other property; and 4) refunding unearned fees to the client subsequent to withdrawal. A. Notice to the Client The cornerstone concept surrounding the ethical rules in regard to withdrawal from client representation is the avoidance of prejudice to the client and his or her case. Proper notice to the client of the attorney s withdrawal is of course the first step to ensuring that the client is not prejudiced by the termination of the attorney-client relationship. Just as with the formation of the attorney-client relationship, the termination of the Page 2 of 5
relationship should also be documented in writing. To prevent subsequent questions, it is important to create a paper record of the date and manner in which the relationship was terminated. As soon as it becomes clear that withdrawal will be necessary, the attorney should send a letter to the client in which the client is informed that the attorney intends to withdraw and that the client is free to retain other counsel. Additionally, theclient should be informed of any up coming deadlines or court activity. Issues regarding fees and the return of client property should also be addressed and will be discussed further below. An attorney seeking to withdraw must always (no matter how quickly the lawyer wants to terminate the relationship) take reasonable steps to avoid foreseeable prejudice to the rights of the client. Rule 1.16(d). This mandate is to be followed regardless of whether the client unjustly terminates the relationship. If notice to the client is insufficient, the lawyer exposes his or herself to potential accusations of client neglect or abandonment which may result in malpractice liability or disciplinary sanctions. When in doubt, the attorney should always take steps to ensure the client is provided with as full and thorough notification as possible to help ensure that the client s case will not be prejudiced. If a trial date is pending, the attorney may need to seek a continuance so that the client can retain new counsel. The attorney is not required by Rule 1.16 to obtain new counsel for the client, however. B. Withdrawal During Pending Litigation Rule 1.16(a) and (c) require that a lawyer representing a client before a tribunal seek permission from the tribunal to withdraw, if such permission is required. Supreme Court Rule 13 makes it clear that an attorney who has filed a written appearance on behalf of a client before any court in Illinois is bound to continue to represent the client in that cause until the court, after notice and motion, grants leave for the attorney to withdraw. (See Supreme Court Rule 13 and Committee Comment). Therefore, a written motion is required with notice to all parties of record and reasonable notice of the time and place of the presentation of the motion for leave to withdraw, by personal service, or by certified mail directed to the client at his or her last known business or residence address. (Supreme Court Rule 13(2)). The notice must also advise the client that, to insure notice of any action in the case, he or she should retain other counsel or file, within 21 days, a supplemental appearance stating the address at which service of notices or other papers may be had upon the client. (Supreme Court Rule 13). It has been stated that the purpose of this rule is to inform the court and the parties of who is properly representing each party and where that person may be served with notice. Pitulla v. Novoselsky, 202 Ill.App.3d 103, 559 N.E.2d 819 (1st Dist. 1990). The rule is also consistent with, although independent of, Rule 1.16(d) and its emphasis on taking reasonable steps to avoid foreseeable prejudice to the rights of the client. Once again, reference must also be made to any applicable local court rules regarding requirements for motions to withdraw and the like. If a motion to withdraw is required, the attorney must be careful not to disclose any client confidences or reveal any information that could prejudice the client s case. A problem may be encountered should a tribunal ask an attorney for an explanation for the withdrawal. If the attorney believes that a detailed explanation may prejudice the client, Comment 3 to Model Rule 1.16 suggests that the lawyer s statement that professional considerations require termination of the representation ordinarily should be accepted as sufficient. This scenario may arise in the situation where the attorney is withdrawing due to a client s demand that the lawyer engage in unprofessional conduct. A court may deny a motion to withdraw if the granting of it would delay the trial of the case, or would otherwise be inequitable. (Supreme Court Rule 13(3)). Should a motion for leave to withdraw be denied, the attorney must abide by the court s order and continue to represent the client. To withdraw without permission of the tribunal could amount to client abandonment and would leave the attorney open to legal malpractice liability, disciplinary sanctions and/or sanctions imposed by the court before which the attorney has appeared. C. Return of Client Files and Other Property One of the more difficult questions to be addressed in the context of withdrawal from client representation is the extent to which an attorney can retain a client s file or other property until all fees due and owing have Page 3 of 5
been paid. Rule 1.16(d) requires that an attorney not withdraw from employment until the attorney has taken reasonable steps to deliver to the client all papers and property to which the client is entitled. Nonetheless, Illinois common law allows attorneys to retain client files in order to secure payment of fees. The extent to which files can be retained, however, is subject to the Illinois Rules of Professional Conduct and the decisions of Illinois courts. The recurring theme of taking reasonable steps to avoid prejudice to the rights of the client should always be the guiding principle for an attorney considering issues of withdrawal. An attorney should hesitate to assert a retaining lien if to do so would risk prejudicing a client s case. Illinois courts have provided some guidance in regard to the ethical implications of retaining liens and the consideration of differing interests that must be addressed in such situations. Illinois courts have recognized that the ultimate purpose of a retaining lien is to provide the attorney with leverage to collect unpaid fees. In the matter of Liquidation of Mile Square Health Plan of Illinois v. Weiss, Orlikoff and Flamm, 218 Ill. App.3d 674, 578 N.E.2d 1075 (1st Dist. 1991). The Mile Square Health Plan case also recognized, however, that the mere existence of the attorney s right to retain client files does not entitle a lawyer to stand on that right if ethical considerations require that the attorney forego that right. Mile Square Health Plan at 578 N.E.2d at 1079; citing ABA Standing Committee on Ethics and Professional Responsibility, Informal Opinion 1461 (Nov. 11, 1980) and Rule 1.16(d) of the Illinois Rules of Professional Conduct. Reference is made to ABA Informal Opinion 1461 which provided that, in determining whether to assert a lien, an attorney should evaluate his or her interests against the interests of the client and of others who would be substantially and adversely effected by the assertion of the lien. The lawyer should take into account: 1) the financial situation of the client; 2) the sophistication of the client in dealing with lawyers; 3) whether the fee is reasonable; 4) whether the client clearly understood and agreed to pay the amount now due and owing; 5) whether imposition of the retaining lien would prejudice the important rights or interests of the client or other parties; 6) whether failure to impose the lien would result in fraud or gross imposition by the client; and 7) whether there are less stringent means by which the matter can be resolved or by which the amount owing can be secured. (ABA Informal Opinion 1461). It has been held that, if the client is financially unable to pay, the lawyer should forego his or her lien since failure to pay the fee is not deliberate in that instance, and therefore does not amount to gross imposition by the client. Lucky-Goldstar International (America), Inc. v. International Manufacturing Sales Co., 636 F. Supp. 1059 (N.D.Ill. 1986); see also 69 A.L.R. 4th 975 (1989). Clearly, every effort should be made to resolve fee questions by means not requiring the retention of the client s file as leverage. Perhaps, for example, the file can be released to the client subject to the client providing security for unpaid fees. See Lucky-Goldstar International, 636 F. Supp. at 1064-1065. A lawyer should be cautious in attempting to sue a client to collect a fee. In his treatise on legal ethics, Geoffrey C. Hazzard suggests that the traditional reluctance to sue a client to collect a fee remains good policy today as a practical matter given that clients usually will not hesitate to counter with a malpractice claim, if a colorable claim is present. Geoffrey C. Hazzard and William Hodes, Law of Lawyering-A Handbook on the Model Rules of Professional Conduct, p.486.2, 1993 Supplement. Whatever the means decided upon to secure his or her fee, the attorney must give hard consideration to ethical implications attendant to this volatile issue. D. Refund of Unearned Fees Rule 1.16(e) provides that a lawyer who withdraws from employment shall refund promptly any part of fee paid in advance that has not been earned. As with other provisions of Rule 1.16, subsection (e) would seem to apply regardless of whether the lawyer seeks withdrawal or the client discharges the lawyer. In general, an unearned fee must be refunded in either instance. The application of traditional contract principles provides some variation as to what are unearned fees, however. See Hazzard, The Law of Lawyering at p. 486.4, 1993 Supplement. The promptness requirement of Rule 1.16(e) must also be closely adhered to by a withdrawing attorney. The failure to act promptly in returning unearned fees may cause prejudice to the client s case by impeding the client from being able to retain new counsel and could conceivably result in a disciplinary Page 4 of 5
violation. The lawyer s prompt return of unearned fees should be documented in writing so that the manner in which the fees are refunded is not open to subsequent question. III. Conclusion In determining the manner in which to withdraw from the representation of a client, attorneys should attempt close adherence to Rule 1.16 of the Illinois Rules of Professional Conduct. The overriding principle to bear in mind in considering withdrawal issues is that attorneys must take reasonable steps to avoid foreseeable prejudice to the rights of the client. The client must always be given adequate notice of the attorney s withdrawal and local court rules must be complied with to ensure that withdrawal is accomplished appropriately in situations where the attorney is representing the client before a tribunal. Additionally, attorneys should make every effort to resolve fee disputes in a manner that does not prejudice the rights of the client and allows the client prompt access to his or her file. Just as importantly, an attorney must take care to document the prompt return of any unearned fees prior to withdrawal. An attorney s compliance with Rule 1.16 in withdrawing from representation, especially in regard to taking reasonable steps to avoid foreseeable prejudice to the rights of the client, can go a long way towards reducing the risk of disciplinary action or malpractice liability subsequent to the termination of the attorney-client relationship. To ignore or only haphazardly comply with the Rule is an invitation to unnecessary disaster. Page 5 of 5