by Ashley E. Merlo
Although your clients can fire you at any time for any reason (Fracasse v. Brent, 6 Cal. 3d 784, 790 (1972)), as a member of the California bar you do not have the same right to fire them. Ethically, you may end a client relationship only by following the California Rules of Professional Conduct. This article provides a primer on how to end the attorney-client relationship ethically. Properly and adeptly ending the relationship can also serve the purpose of minimizing the potential for a legal malpractice claim.
When Must You End the Relationship?
The Rules of Professional Conduct of the State Bar of California specify three circumstances under which an attorney must terminate a client relationship: (1) where the attorney knows or should know that a client is bringing an action, conducting a defense, asserting a position in litigation, or taking an appeal, without probable cause and for the purpose of harassing or maliciously injuring another; (2) where continued employment would result in violation of the Rules of Professional Conduct or the State Bar Act; or (3) where the attorney’s mental or physical condition renders effective representation unreasonably difficult. Cal. R. Prof. Conduct 3-700(B).1 Of course, counsel also must seek to withdraw when discharged by the client. Cal. Bus. & Prof. Code § 6104 (member cannot appear as attorney for a party without authority).
Under the first circumstance, a lawyer, for example, should seek to withdraw if a client insists on bringing an action in the wrong forum for the purpose of harassment. Metzger v. Silverman, 62 Cal. App. 3d Supp. 30, 39 (1976). Likewise, where a client informs counsel that he does not care about winning or losing a lawsuit but merely wants to continue litigating to damage a competitor, withdrawal is mandated. Cal. State Bar Form. Opn. 2015-192. An example of a scenario requiring withdrawal under the second circumstance, i.e. where continued employment would violate the Rules of Professional Conduct, would be where the representation violates conflict of interest rules. See Sheppard, Mullin, Richter & Hampton, LLP v. J-M Mfg. Co., Inc., 244 Cal. App. 4th 590 (2016).
When May You End the Relationship?
Where the circumstances mandating attorney withdrawal are not present, an attorney normally must continue representation. A few exceptions, however, allow counsel to seek to withdraw. These include where the client (a) insists upon presenting a claim or defense not warranted under existing law and not supported by a good faith argument for extension, modification, or reversal of existing law; (b) seeks to pursue an illegal course of conduct; (c) insists that counsel pursue an illegal course of conduct or that violates an attorney’s ethical obligations; (d) engages in conduct that renders it unreasonably difficult for the member to effectively represent the client; (e) insists, in a matter not pending before a tribunal, that the attorney engage in conduct contrary to the judgment and advice of the attorney; or (f) fails to pay the attorney’s agreed-upon fees and expenses. R. Prof. Conduct 3-700(C)(1). Withdrawal also may be permitted where: continued employment is likely (contrasted to the certainty under 3-700(B)(2)) to violate the attorney’s ethical obligations, the client’s best interests would be served by withdrawal due to an attorney’s inability to work with co-counsel, the attorney’s mental or physical condition renders it difficult for the employment to be carried out effectively, the client knowingly and freely assents to termination, or the member has a good faith belief that the tribunal will find other good cause for withdrawal. R. Prof. Conduct 3-700(C)(2)-(6).
Procedure for Withdrawing From Representation
Whether the client discharges the attorney or the attorney seeks to terminate the relationship, when litigation is pending, the attorney must seek to withdraw from representation. Where the client consents to counsel’s withdrawal, there is a mandatory Judicial Council form (Form MC-050) that the attorney and client must sign and submit to the court. Substitution of counsel through this method does not require the court’s consent. Cal. Civ. Proc. Code § 284(1).
Where the client does not consent to counsel’s withdrawal, counsel must obtain an order from the court and to do so, must file a motion to be relieved as counsel using Judicial Council Form MC-051. Cal. Civ. Proc. Code § 284(2); Cal. R. Court 3.1362. No memorandum is required in support of the motion, however, it must be accompanied by a declaration (Form MC-052), stating the reasons for the motion. Cal. R. Court 3.1362(c). Under no circumstance may counsel reveal confidential client information in seeking to withdraw. Id. While the court may order an in camera hearing to consider the motion, client confidences still may not be disclosed. Aceves v. Superior Court, 51 Cal. App. 4th 584, 595 (1996); Cal. State Bar Form. Opn. 2015-192 (confidential information cannot be revealed in open court or in camera). See also Mary A. Dannelley, Ethically Speaking: Attorney Disclosure Upon Withdrawal, Orange County Lawyer, November 2015, at 47. This may even preclude an attorney from disclosing a client’s failure to pay agreed-upon fees as the reason for withdrawal, as such information may be a client “secret,” the disclosure of which would be embarrassing or detrimental to the client. See Cal. Bus. & Prof. Code § 6068(e); Dixon v. State Bar, 32 Cal. 3d 728, 735 (1982) (attorney subject to discipline for disclosing confidential client information likely to cause client public embarrassment); Oregon State Bar Form. Opn. 2011-185 (attorney may not disclose in withdrawal motion that client is not paying attorney’s bills). However, a court may not deny withdrawal where counsel maintains that he must step down because of a disabling conflict that involves privileged communications. Aceves, 51 Cal. App. 4th at 584.
Until the substitution of counsel form is filed or the court has otherwise permitted counsel to withdraw, the attorney remains the attorney of record, having the same duties to act competently to protect the client from prejudice. Cal. State Bar Form. Opn. 1994-134.
Attorney Obligations on Withdrawal
Rule 3-700(A)(2) of the Rules of Professional Conduct requires an attorney, prior to withdrawing, to take “reasonable steps to avoid reasonably foreseeable prejudice to the rights of the client, including giving due notice to the client, [and] allowing time for employment of other counsel.” R. Prof. Conduct 3-700(a)(2). The requirements of this rule apply not only where the representation comes to an end under the circumstances described above, but also where withdrawal results from dissolution of an attorney’s law firm. Cal. State Bar Opn. 2014-190.
The obligations of 3-700(A)(2) require attorneys, at a minimum, to advise the client of upcoming deadlines in the matter and ensure the return of the client’s files and papers. R. Prof. Conduct 3-700(D); Matter of Brockway, 4 Cal. State Bar Ct. Rptr. 944, 958 (Rev. Dept. 2006) (attorney violated ethical obligations by waiting two months to send former client’s files to new attorney). An attorney cannot hold the client file for ransom to obtain payment of fees; the attorney must make it available to the former client or successor counsel. Cal. State Bar Form. Opn. 1994-134. The client file includes the contents of the physical file—“correspondence, pleadings, deposition transcripts, exhibits, physical evidence, expert’s reports”—as well as “other items reasonably necessary to the client’s representation,” including electronic files (e.g., electronic versions of email, pleadings, discovery, deposition transcripts, etc.) and even attorney work product that has been shared with the client. R. Prof. Conduct 3-700(D)(1); Cal. State Bar Form. Opn. 2007-174; Cal. State Bar Form. Opn. 1992-127; San Diego Bar Ass’n. Form. Opn. 1997-1 (attorney may not withhold work product “reasonably necessary to client’s representation”). The obligation to release electronic items, however, does not require creation of such items if they do not exist or changing their application (e.g., from Word to WordPerfect) if they do exist. Cal. State Bar Form. Opn. 2007-174.
Upon termination and withdrawal from representation, the attorney also must promptly refund any part of a fee paid in advance that has not been earned. R. Prof. Conduct 3-700(D)(2).
In general, attorneys do not have an ethical obligation to maintain former client files. However, some materials in a client’s file may include documents that must be retained for certain periods under state or federal law, and where a client delivers original papers and property to an attorney, the attorney’s obligations are determined by the law of deposits (bailments). Cal. State Bar Form. Opn. 2001-157. Before destroying a former client file to which the former client is entitled under Rule 3-700(D), the attorney must use all reasonable means to locate the former client, advise the client of the file’s existence and his right to it, and the attorney’s intent to destroy it absent contrary instruction from the client. Such notice must provide the client a reasonable opportunity to respond. Id. Regardless of whether the file is stored or destroyed, the attorney always has a continuing obligation to protect the former client’s confidential information. Oasis West Realty, LLC v. Goldman, 51 Cal. 4th 811, 821 (2011).
Running of the Statute of Limitations Following Termination of the Relationship
Termination of the attorney-client relationship implicates not only an attorney’s ethical obligations as discussed above, but also may impact the statute of limitations on any potential malpractice claim that the former client may have. Subject to limited exceptions (in criminal cases and malpractice based on a written instrument to take effect in the future), the statute of limitations on an attorney malpractice claim is one year after discovery of (or through reasonable diligence, when the client should have discovered) the facts constituting the negligent act or omission, or four years from its occurrence, whichever occurs first. Cal. Civ. Proc. Code § 340.6(a). However, the statute of limitations is tolled during the time that the attorney continues to represent the client regarding the “specific subject matter in which the alleged wrongful act or omission occurred.” Cal. Civ. Proc. Code § 340.6(a)(2).
Substitution of counsel and attorney withdrawal will usually end tolling that would otherwise continue based on the attorney-client relationship. Croucier v. Chavos, 207 Cal. App. 4th 1138, 1146 (2012), as modified (July 18, 2012). But see Nielsen v. Beck, 157 Cal. App. 4th 1041, 1051 (2007) (tolling continued after execution of substitution of attorney form due to counsel’s continued advice to client). Likewise, where a client hires replacement counsel, tolling will end so long as former counsel ceases to provide advice to the client on the matter. See Foxborough v. Van Atta, 26 Cal. App. 4th 217, 229 (1994) (former’s attorney’s representation ended when client hired new counsel; former attorney’s later role as consultant and expert witness for the new firm on the same matter did not establish continued representation); Truong v. Glasser, 181 Cal. App. 4th 102, 117 (2009). But absent such facts, whether the attorney-client relationship has concluded may not be so clear. See, e.g., Gurkewitz v. Haberman, 137 Cal. App. 3d 328, 333 (1982) (where attorney assists client with unsettled matters, even if tangential to a case, relationship continues); Laclette v. Galindo, 184 Cal. App. 4th 919, 928-29 (2010) (finding an issue of fact whether attorney continued to represent client despite lack of contact for over two years while client made payments pursuant to settlement of underlying case, since attorney remained counsel of record and court retained jurisdiction over settlement).
Thus, at the end of a troubled, or otherwise high-risk relationship, it may be a good practice to send a confirming email or letter. For example: “This will conclude our attorney-client relationship.” Such communication will be strong evidence against tolling of the statute of limitations provided, of course, that no further legal advice is given.
Note that tolling of the four-year period will continue (even after termination of the attorney-client relationship) if the attorney knows of and willfully conceals facts constituting malpractice. Cal. Civ. Proc. Code § 340.6(a)(3). And to the extent that an attorney is guilty of wrongdoing not requiring proof of violation of a professional obligation, e.g., fraud or conversion, causes of action based on such conduct are not limited by the statute of limitations set forth by Civil Procedure section 340.6. See Lee v. Hanley, 61 Cal. 4th 1225 (2015) (limitations period for conversion applied).
When ending a client relationship, it is important to follow the Rules of Professional Conduct for at least two reasons. First, at the risk of stating the obvious, as attorneys in this state we are ethically obligated to follow them. Second, following the rules may reduce the risk of a malpractice claim. By following the rules, you will have exited for good cause and will have avoided doing things that will make clients angry, such as disclosing confidential information or holding the file hostage. You also will have protected the client from foreseeable prejudice by notifying the client about impending deadlines. Finally, by formally terminating the relationship, you will reduce the statute of limitations problem discussed above.
Ashley E. Merlo is a litigation attorney with Hodel Wilks LLP in Irvine, California. She represents clients in a broad range of litigation matters, including attorney malpractice, and has represented attorneys in connection with ethics matters. Ashley is also the immediate past president of the Associate Board for the Orange County Bar Foundation. Ashley can be reached at email@example.com.