Whether leaving and old firm or moving to a new jurisdiction, when starting a law firm, you need to be cognizant of who owns the old client file. Also, from my review, you need to be cognizant of what jurisdiction you are in because, of course, the rules vary from state to state.
The first place to look is your state’s professional responsibility and/or ethics rules. Another good place to look for model answers is the American Bar Association (ABA). In particular, the ABA, in its “Materials and Client File Retention” page, quotes two model rules:
Model Rule 1.16(d) states:
“Upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect a client’s interests, 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.”
Model Code
DR 2-110(A)(2) provides that:
“In any event, a lawyer shall not withdraw from employment until he has taken reasonable steps to avoid foreseeable prejudice to the rights of his client, including giving due notice to his 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.”
To me the gist of the model rule does necessarily answer the question of who retains the client file. As lawyers we are paid to interpret. My interpretation is that, under the model rules, a lawyer must be concerned foremost with the client’s best interest and finishing the representation in a professional, competent, and agreeable manner which avoids any damage to the client. After that is done, who retains the client file is not so important – it is the work product that goes into creating that file which is of the most importance.
In Indiana, where I am licensed, the Rules of Professional Conduct are similar and do not specifically state who retains the client file. There are two rules specifically on point, Rule 1.15 and Rule 1.16.
Rule 1.15, entitled “Safekeeping Property”, in pertinent part, provides that:
(a) A lawyer shall hold property of clients or third persons that is in a lawyer’s possession in connection with a representation separate from the lawyer’s own property. Funds shall be kept in a separate account maintained in the state where the lawyer’s office is situated, or elsewhere with the consent of the client or third person. Other property shall be identified as such and appropriately safeguarded. Complete records of such account funds and other property shall be kept by the lawyer and shall be preserved for a period of five years after termination of the representation.
Rule 1.16 states, in pertinent part that a lawyer may withdraw from representing a client if:
(1) withdrawal can be accomplished without material adverse effect on the interests of the client
However, to me, neither of these rules answer the question of who retains the client file. Is the client file client “property”. This gets me to start thinking of argument for and against either the lawyer or the client keeping the file. One argument in favor of the attorney owning the client file is that the attorney should have already made the entire file available to the client during the representation. I make it a practice of sending a client nearly everything I do so that (1) they know I’m working on their case and (2) the have a copy of everything already. Thus, the question may also be asked: What is “the client file”? Are there multiple client files? Are there different versions of the client file?
The ABA suggests that the client should always have originals of documents like Wills, Deeds, Contracts, etc. This seems obvious and I would hope the lawyers aren’t typically keeping originals of those sorts of documents. There is also some authority a lawyer retaining a client file as security for getting paid. I don’t necessarily recommend this practice, but, at least in Indiana, it is allowable under certain circumstances.
At the end of the day, I can’t necessarily tell you who owns the client file. The answer, like some many in the gray hued world of the law is: it depends. From my review of the applicable law in my state, and from reviewing the model law, the concern appears to be related more to competency and confidentiality than to actual possession. My advice, be clear with the client and ask them what they want to do.
Perhaps more importantly, I would suggest some form of electronic storage and putting the retention of the client file into your legal services agreement. That way there is no confusion Whether leaving a law firm or starting a law firm, you need to know your ethics and you need to know who gets the client file when the representation has ended.