Opinion 92-8

The Inquirer has requested that the Professional Guidance Committee (Committee) opine as to the steps to be taken when a lawyer departs from a former law firm (Former Firm) to ensure that certain lawyer-client related activities are consistent with the Rules of Professional Conduct. Due to the present transient nature of the legal profession, the issues which the Inquirer raises are important and timely. This Opinion will address some of the ethical considerations involved in the effectuation of a smooth transition which revolve around the continued representation of clients which were serviced by Inquirer at the Former Firm and the retention of these clients, files by the Former Firm to ensure payment of Former Firm's legal fees and costs.

The facts which Inquirer presents are as follows: The Inquirer was a lawyer with Former Firm and was given notice of termination based upon Former Firm's planned departure from the practice of law in Philadelphia. Some clients with whom Inquirer had direct responsibility learned of her termination and contacted Inquirer directly for her continued representation. These clients signed fee agreements with Inquirer and she notified Former Firm of same. These actions are assumed to have occurred after Inquirer's departure. Once departed, Inquirer contacted Former Firm to arrange for the immediate delivery of the clients' files. Inquirer confirmed to Former Firm that its costs would be reimbursed and appropriate referral fees paid at a future date. Inquirer received a letter from Former Firm with accusations of actively soliciting these clients prior to the termination date. Inquirer responded by denying said solicitation and again, requesting turnover of the files. Inquirer also received a telephone call from a referring lawyer to Former Firm (Referring Lawyer) threatening physical violence and professional humiliation for taking these clients.

Inquirer raises specific issues1 which have been frequently asked of the Professional Guidance Committee:

1.  What actions must Inquirer take after departing from the Former Firm in regard to the continued representation of those clients with whom she had a pre-existing relationship and was:

2.  a. primarily responsible for work on those clients' matters (Pre-Existing Clients); and

3.  b. secondarily or intermittently responsible for work on those clients' matters, i.e., attendance at a deposition, attendance at a limited court hearing (Prospective Clients).

4.  What rights, if any, does Former Firm have in the retention of these clients' files as security for the payment of expenses and future unpaid fees.

These issues will be addressed seriatim.

COMMUNICATION WITH AND SOLICITATION OF CLIENTS


Rule 1.4 (Communication) provides:

(a) A lawyer shall keep a client informed about the status of a matter and promptly comply with reasonable requests for information.

(b) A lawyer shall explain a matter to the extent necessary to permit the client to make informed decisions regarding the representation.

Inquirer and/or Former Firm must promptly communicate with all Pre-Existing Clients to inform them of Inquirer's changed status so that they will have sufficient information to make an intelligent decision regarding their future representation.

Further, the Committee directs Inquirer to Rule 1.16(d) which requires the Inquirer and/or Former Firm to place the Preexisting Clients on notice of Inquirer's departure. This may be accomplished by letter jointly authored by the firm and departing lawyer or by either party alone so that the client has notice of the change and can act accordingly. Further, in order to avoid a potential problem once a client receives notice of the departure and the client wishes to discharge the firm from representation and continue with the departing lawyer, the departing lawyer should request that these clients send a discharge letter to the firm. Rule 1.16(a) states that ...a lawyer shall not represent a client, or where representation has commenced, shall withdraw from the representation if: (3) the lawyer is discharged.

In general, Inquirer's communications to either category of clientele must follow Rule 7.1. Specifically, Rule 7.1(c) states that:

A lawyer shall not make a false or misleading communication about the lawyer or the lawyer's services. A communication is false or misleading if:

it compares the lawyer's services with the other lawyers' services, unless the comparison can be factually substantiated.

The issue as to what type of written communications may be sent to Pre-Existing Clients has been addressed in ABA Informal Opinion 1457 (April 29, 1980) and ABA Informal Opinion 1466 (February 12, 1981) 2. Factors which were considered important were the form and content of the communication, the timing of the mailing and the proposed recipient of the mailing. Opinion 1457 addresses the propriety of a letter-form announcement sent by a lawyer advising that he had resigned from a law firm to become a member of a new firm. The announcement was mailed soon after the change to clients with whom that lawyer had an active, open and pending matter and with whom that lawyer had direct responsibility. It emphasized that the client had the right to decide how and by whom the pending matters would be completed and did not urge the client to sever the existing lawyer-client relationship with the lawyer's former firm. The ABA found that this announcement was consistent with the Code in existence. In Opinion 1466, a lawyer was resigning from his law firm to become a member of another firm and proposed to mail a letter to clients for whom his former firm had open, active and pending matters for which he was directly responsible, to advise of his resignation. In limiting the Opinion to the facts presented, the ABA advised that the contents of the proposed letter were consistent with the Code of Professional Responsibility insofar as: (a) the notice was mailed; (b) the notice was sent only to persons with whom the lawyer had an active lawyer-client relationship immediately before the change in the lawyer's professional association; (c) the notice was clearly related to open and pending matters for which the lawyer had direct professional responsibility to the client immediately before the change; (d) the notice was sent promptly after the change; (e) the notice did not urge the client to sever the relationship with the lawyer's former firm and did not recommend the lawyer's employment (although it indicated the lawyer's willingness to continue his representation for the matters); (f) the notice made it clear that the client had the right to decide who would complete or continue the matters; and (g) the notice was brief, dignified and not disparaging of the lawyer's former firm.

Any communications by Inquirer to Pre-Existing Clients should adhere to these standards.

The Committee recommends that Inquirer's conduct regarding Prospective Clients should also be guided by Opinions 1457 and 1466. Although those Opinions were limited to the facts of those inquiries, the policy considerations inherent therein should also apply to communications by Inquirer with clients with whom she had some, although limited, contact at Former Firm 3.

Note that if Inquirer solicits the continued representation of Pre-Existing Clients or that of Prospective Clients, and does so by written communication, Inquirer must, pursuant to Rule 7.2(b), keep a copy of the written communication for two years after its last dissemination along with a record of when and where it was used.

Finally, allegations of improper solicitation of clients are sometimes pressed with claims in court of intentional interference with existing contracts or prospective contractual relationship. The Committee refers Inquirer to cases which have been decided in this jurisdiction, including Adler, Barish, Daniels, Levin & Creskoff v. Epstein, 482 Pa. 416, 393 A.2d 1175 (1978) and Shein v. Myers, 394 Pa.Super. 549, 576 A.2d 985 (1990).

RETAINING LIEN OF FORMER FIRM


The next issue raised by Inquirer involves Former Firm's ability to retain files of the subject clients after being discharged as counsel. Rule 1.16 sheds light on this issue. Specifically, subsection (d) of this Rule states:

Upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect a client's interest, such as giving reasonable notice to the client, allowing time for employment of other counsel, surrendering papers and property to which the client is entitled and refunding any advance payment of fee that has not been earned. The lawyer may retain papers relating to the client to the extent permitted by other law.

(Emphasis added). The Committee has already opined on this issue in Opinion 87-1. The Committee recognized the conflict between the exercise of the right of a lawyer to a retaining lien and the ethical obligation to avoid prejudice to the client in refusing to turn over files as security for payment of expenses and future unpaid fees. The Committee concluded that a retaining lien should be asserted only as a matter of last resort and only once the lawyer sought other reasonable means for collection.

The remaining issue which Inquirer raises involves a telephone call received wherein physical and professional threats were made to her by Referring Lawyer, based upon his belief that Inquirer had stolen the subject clients. Behavior like that demonstrated by Referring Lawyer cannot be tolerated. Rule 8.3 (Reporting Professional Misconduct) requires a lawyer who has knowledge that another lawyer has committed a violation of the Rules of Professional Conduct which raises substantial questions as to that lawyer's honesty, trustworthiness or fitness as a lawyer in other respects, to inform the appropriate professional authority. If Inquirer concludes, after reviewing the actions and comments of Referring Lawyer that they fit within the purview of Rule 8.3, Inquirer is required to refer the situation created by Referring Lawyer to the appropriate arm of the Disciplinary Board in Pennsylvania or the state in which Referring Lawyer practices.

Notes

  1. This Committee does not opine as to the propriety of Inquirer's prior conduct. The goal of this Committee in this Opinion is to provide guidance as to future conduct only.

  2. Although these Opinions were decided pursuant to the Model Code of Professional Responsibility, the findings are consistent with the now applicable Rules of Professional Conduct.

  3. Although the Committee does not believe that Rule 7.3 (Direct Contact with Prospective Clients) is directly on point insofar as that Rule deals with a situation wherein a lawyer had no prior professional relationship with the prospective client, the Committee believes that the policy behind this Rule is sound and applicable to the facts herein. The Comment to Rule 7.3 advocates the need for dissemination of information (through general advertising rather than direct private contact) which will help to assure that information flows clearly, truly, accurately, and without the possibility of undue influence, intimidation and overreaching. Surely, these are qualities to be adhered to in any communication sent by Inquirer to Pre-Existing and Prospective Clients.

     

The Philadelphia Bar Association's Professional Guidance Committee provides, upon request, advice for lawyers facing or anticipating facing ethical dilemmas. Advice is based on the consideration of the facts of the particular inquirer's situation and the Rules of Professional Conduct as promulgated by the Supreme Court of Pennsylvania. The Committee's opinions are advisory only and are based upon the facts set forth. The opinions are not binding upon the Disciplinary Board of the Supreme Court of Pennsylvania or any other Court. They carry only such weight as an appropriate reviewing authority may choose to give it.