GPSOLO July/August 2010
How to Close a Case
Law school teaches us many things: a new language, how to find the law, how to analyze, and how to advocate. However, much of the way we carry out the actual nuts and bolts of practicing law is developed through experience and learning from the experiences of others. This is true of the process of closing cases.
Cases are most commonly closed once the substantive legal work is completed. Sometimes it is prudent to close a case after a long period of inactivity. Say your client submits an executed engagement letter but does not provide information needed to begin actual legal work in the case within a reasonable amount of time; rather than leaving the case open indefinitely, you may wish to inform the client that you will close the case if you do not receive the necessary information by a certain date and that you would be happy to reopen the case at a later time. Leaving a case open indefinitely may give rise to later disputes regarding why the work was not done.
It can be trickier to close a case if you begin work and then reach an impasse with the client before completing the case. Nevertheless, sometimes carefully withdrawing and closing the case instead of trying to struggle through until the legal work is completed is truly beneficial to you or the client or both. Withdrawing and closing the case if you and your client have a substantial and intractable disagreement on how to proceed or if you are unable to effectively communicate with your client may limit your liability while freeing the client to pursue the path the client wishes to follow or to find a lawyer who may be a better fit for the client.
An unscientific poll of colleagues indicates that the manner in which we lawyers close our cases ranges from something as informal as simply stamping “FINAL” on the last invoice sent to the client to following a meticulous case-closing checklist and sending out a formal letter to confirm to the client that the case is closed.
For those who go beyond just stamping “FINAL” on the last invoice, the case-closing process may include returning original documents or some or all of the case file to the client, transferring electronic and hard-copy files from active file spaces to archives or inactive file spaces, verifying that all amounts owed by the client or to the client have been paid and that any remaining client monies in the client trust fund account are handled properly, closing the client’s account in the bookkeeping system, and sending out a closing letter to the client.
The closing letter essentially confirms with the client that the case is completed. If you are so inclined, the letter may include an expression of appreciation and a wish to work together again in the future or encouragement for the client to contact you again should a need arise. However, the closing letter is also a good opportunity to confirm your assumptions (CYA) regarding your understandings with the client in the case.
The CYA portion of the closing letter may include:
- A reiteration of the things that you were engaged to do and a confirmation that those things were in fact done.
- A statement that the client should let you know by a certain date if the client thinks any part of the case remains unfinished, and that if the client does not so inform you, then the case will be closed.
- A statement that upon the date the case is closed and the attorney-client relationship is ended, all forward-going communications with the client will no longer be covered by attorney-client privilege. This may seem to be a self-evident result of terminating the attorney-client relationship. However, this issue has actually arisen in a colleague’s case and, as a result, a specific statement to this effect is now included in that lawyer’s closing letter.
- An IRS Circular 230 legend or language to comply with Circular 230 if the letter contains tax information or tax advice.
- A listing of documents given to the client. You may wish to note whether the documents are originals, copies, or file-marked copies. Also consider having the client acknowledge receipt of the documents in writing.
- A confirmation that the client has received money from you if you have given money to the client or are giving money to the client with the termination letter (such as settlement funds or a reimbursement of the remainder of a retainer fee). You may wish to have the client acknowledge in writing the receipt of specific amounts of money and the date when the money was received.
- Documentation about why things were done or not done in the case, especially for matters you think your client may not recall or may not accurately recall, for matters that may have diverged from your normal way of handling similar cases, or for matters that may have had a negative result or may result in something negative in the future.
Written documentation about the manner in which certain things were handled may be the most beneficial aspect of a closing letter for a lawyer. Even clients who may seem satisfied at the closing of the case may become dissatisfied upon further reflection or if faced with unexpected consequences. Also, someone other than the client may question why certain things were done or not done.
You may wish to have the client countersign the closing letter or to send the letter to your client in a way that gives you confirmation that the client received it. If you do not have the client countersign the closing letter, you may wish to set a deadline by which the client needs to let you know if the client has any questions or disagrees with anything contained in the closing letter.
The following are two real-life examples that demonstrate how a closing letter can help.
In the first example, an offer to settle a litigation case was received and the lawyer informed the client that perhaps a better settlement could be reached if they negotiated further. The client did not want to prolong the matter and claimed to be satisfied with the amount and the terms of the settlement. The settlement was accepted, and the case was closed without the lawyer sending a closing letter to the client. Then the client was advised by friends that the client could have received more money and better terms. The client became disgruntled with the lawyer for not obtaining more money and better terms and disputed the lawyer’s recollection of why the settlement was accepted. The client sued the lawyer for malpractice. Documentation in a closing letter may not have forestalled the malpractice claim, but it may have provided considerable support to the lawyer’s side, especially if the letter was countersigned by the client.
In the second case, a client wished to transfer title to real property from the client into the client’s revocable living trust. The lawyer recommended obtaining a title report for the property to verify that there were no unexpected title issues and to make sure the property description was accurate. The client did not wish to obtain a title report because the client was sure that there were no unexpected issues regarding the property and that the property description in the current conveyance document was correct; according to the client, it was “just” a transfer from the client into the client’s own trust. The lawyer transferred the property into trust via a quitclaim deed. The client was satisfied. Then the client died, and in settling the trust estate, the trust beneficiaries discovered there was a flaw in the title. The flaw might have been more easily corrected at the time of the conveyance into trust but was not so easy to correct after the client’s death. The beneficiaries argued that if the lawyer had properly explained the benefits of a title report, the client would have gotten the title report and thus would have discovered the flaw in the title and corrected it. The beneficiaries concluded that the lawyer either did not suggest obtaining a title report or did not properly explain the benefits of a title report. In this case, however, there was a closing letter; it confirmed both that the lawyer recommended a title report (and briefly summarized the lawyer’s reasons for that recommendation) and that the client declined to obtain a title report despite the lawyer’s recommendation. Further, the lawyer had the client countersign the closing letter. The lawyer was able to show the closing letter to the beneficiaries and thereby satisfy them that the lawyer was not at fault.
This is just a general overview of closing cases. Your specific case-closing process and the details covered by your closing letter may be adjusted on a case-by-case basis and will probably change to address different issues that you may encounter over time.