Protect Yourself from the Start
Avoiding the need to withdraw starts with a careful selection of clients and cases. Model Rule 1.1 imposes a duty of competence on attorneys, and you will want to ensure that you have the skills and experience to handle the case, as well as the capacity to add a new matter to your caseload. Just as important as having the technical skills to litigate the case is making sure that the client is a good fit for you. Be on alert for red flags that could indicate a potentially problematic client. Possible signs of a problem client can include (1) complaints about prior counsel, (2) someone who is clearly lawyer-shopping, (3) unrealistic expectations for the outcome of the case, (4) requesting unethical activities, (5) arguing the law with you, or (6) ignoring your advice or recommendations. Fortunately, with most case dockets online these days, you can often look up an active case to vet complaints about prior counsel, the status of the case, and what you can actually do for the client. When vetting clients and cases, trust your instincts! If you feel the prospective client is a bad fit, there is a good chance he or she will be.
Once you have agreed to represent a client, the next step in protecting the relationship is a well-crafted engagement letter. A written engagement letter is essential to documenting the responsibilities of both the attorney and the client, including both the services the attorney will provide and the fees the client will pay. Keep in mind Model Rule 1.5(a): “A lawyer shall not make an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for expenses.” Rule 1.5(b) requires:
The scope of the representation and the basis or rate of the fee and expenses for which the client will be responsible shall be communicated to the client, preferably in writing, before or within a reasonable time after commencing the representation, except when the lawyer will charge a regularly represented client on the same basis or rate. Any changes in the basis or rate of the fee or expenses shall also be communicated to the client.
Most jurisdictions require any agreement for a contingent fee to be in writing, following Model Rule 1.5(c), which states in part:
A contingent fee agreement shall be in a writing signed by the client and shall state the method by which the fee is to be determined, including the percentage or percentages that shall accrue to the lawyer in the event of settlement, trial or appeal; litigation and other expenses to be deducted from the recovery; and whether such expenses are to be deducted before or after the contingent fee is calculated. The agreement must clearly notify the client of any expenses for which the client will be liable whether or not the client is the prevailing party.
Your engagement letter can—and should—set forth conditions under which you may withdraw, such as consent, a court order, conflict of interest, the client’s failure to communicate with the attorney, the client’s failure to follow the attorney’s advice, and the client’s failure to pay agreed fees and expenses (including, if appropriate, expert witness fees). If the client violates one of these provisions, the client has breached the contract with you, presumably allowing you to withdraw. While courts will allow you to withdraw in the event of a conflict of interest (and some other circumstances) even if the engagement letter is silent on the issue, detailing it in writing communicates to the client some circumstances where you can terminate the representation.
A well-drafted engagement letter can also provide leverage for an attorney to ensure payment. Consider including a provision that fees earned are due whether or not you had sent an invoice at the time of withdrawal. If your jurisdiction permits, you can have a greater chance of ensuring payment if you are able to assert either (1) a charging lien, giving you an interest in any recovery later due the client, or (2) a retaining lien, allowing you to keep possession of the client’s file until you receive payment. As discussed below, the rules for charging liens and retaining liens vary by jurisdiction, and some states prohibit retaining liens in all cases.
When Do You Need to Withdraw?
When circumstances require your withdrawal, the sooner you act, the better. In general, once you think you need to withdraw, you will be better served by withdrawing. Prompt communication with your client, opposing counsel, and the tribunal will allow you to exit the representation more efficiently, preserve your client’s rights, and maximize your chances of getting paid. Knowing the difference between mandatory and permissive withdrawals may also inform your decision.
A lawyer shall withdraw from representation when
(1) the lawyer knows or reasonably should know that the representation will result in a violation of the rules of professional conduct or other law;
(2) the lawyer’s physical or mental condition materially impairs the lawyer’s ability to represent the client;
(3) the lawyer is discharged; or
(4) the client or prospective client seeks to use or persists in using the lawyer’s services to commit or further a crime or fraud, despite the lawyer’s discussion pursuant to Rules 1.2(d) and 1.4(a)(5) regarding the limitations on the lawyer assisting with the proposed conduct.
Model Rule 1.16(a).
In addition, an attorney may withdraw from a matter if
(1) withdrawal can be accomplished without material adverse effect on the interests of the client;
(2) the client persists in a course of action involving the lawyer’s services that the lawyer reasonably believes is criminal or fraudulent;
(3) the client has used the lawyer’s services to perpetrate a crime or fraud;
(4) the client insists upon taking action that the lawyer considers repugnant or with which the lawyer has a fundamental disagreement;
(5) the client fails substantially to fulfill an obligation to the lawyer regarding the lawyer’s services and has been given reasonable warning that the lawyer will withdraw unless the obligation is fulfilled;
(6) the representation will result in an unreasonable financial burden on the lawyer or has been rendered unreasonably difficult by the client; or
(7) other good cause for withdrawal exists.
Model Rule 1.16(b).
While the Model Rules also provide that a court may refuse a permissive withdrawal, in reality most courts will not force an attorney to keep representing a client where the attorney-client relationship has broken down or where it is otherwise apparent that the lawyer will not be able to effectively represent the client. Moreover, most courts will not require continued representation where the client refuses to pay the lawyer (although exceptions abound and practice may vary by jurisdiction). If you are unsure of the practice in your state, ask some colleagues. If you do decide to seek leave to withdraw, you want to be confident the court will grant your request; having your motion denied and being stuck with the client is unappealing on multiple levels.
How to Withdraw
Once grounds for withdrawal have arisen, you should move promptly to end the engagement and withdraw from the case. The one exception to this rule is when the client may be able to cure the grounds, such as for unpaid fees. If cure is possible, you may give the client the opportunity to cure by providing written notice to the client, and then acting promptly if the client fails to remedy the situation. Extending deadlines that are frequently missed tends to encourage the client to miss more deadlines.
Perhaps the paramount consideration when moving to withdraw is maintaining client confidentiality. Any submission to the court, whether public or for in camera review, must comply with confidentiality requirements and cannot reveal information that may impair the client’s case (other than the client’s failure to pay your fees). Model Rule 1.6 governs confidentiality—“(a) A lawyer shall not reveal information relating to the representation of a client unless the client gives informed consent, the disclosure is impliedly authorized in order to carry out the representation or the disclosure is permitted by paragraph (b).” For this discussion, Rule 1.6(b)(5) applies:
(b) A lawyer may reveal information relating to the representation of a client to the extent the lawyer reasonably believes necessary: . . . (5) to establish a claim or defense on behalf of the lawyer in a controversy between the lawyer and the client, to establish a defense to a criminal charge or civil claim against the lawyer based upon conduct in which the client was involved, or to respond to allegations in any proceeding concerning the lawyer’s representation of the client.
Comment 11 to Rule 1.6 states, “A lawyer entitled to a fee is permitted by paragraph (b)(5) to prove the services rendered in an action to collect it. This aspect of the rule expresses the principle that the beneficiary of a fiduciary relationship may not exploit it to the detriment of the fiduciary.”
So, while you may reveal confidential information if necessary to withdraw from representation or, as discussed below, to procure payment, ethics rules caution you to keep such disclosures to the bare minimum.
State ethics rules and court rules typically govern motions to withdraw. The easiest path to withdraw is with the client’s consent when the client has engaged or is engaging new counsel. In such cases, the client’s rights should be fully protected and the proceeding can continue with minimal disruption. You should be aware, however, that courts may occasionally prohibit a client from switching attorneys if it appears that the client is seeking to disrupt the proceedings or engage in gamesmanship. Objections can arise if the client has switched counsel multiple times or seeks to replace an attorney on the eve of trial while also requesting to delay the trial. Again, informing the court promptly of your and the client’s plans usually works best.
Consult your jurisdiction’s version of Model Rule 1.16 if you need to move ex parte. While you seek to withdraw, you may be required by the tribunal to continue to represent the client (Rule 1.16(c)). Best practices include (a) notifying opposing counsel that you are or will be seeking to withdraw and requesting in writing that any deadlines be stayed or continued in the interim; (b) informing the client in writing of both your next steps and what the client must do to protect his or her rights; and (c) filing your motion with the court, detailing the foregoing communications you have had with the client and opposing counsel, and asking the court to stay the case. Your communication to the client should include applicable deadlines in the case, a clear description of what work you have and have not performed, and delivery of any materials or work product that you must or agree to turn over.
Keep in mind your paramount goal in moving to withdraw: an order excusing you from the case. It is unlikely that your motion will be seriously contested, so you should divulge the bare minimum of information that will allow the court to grant your motion. In drafting your motion, mind the words of one legal expert, who has written that “brevity is your friend, and vengeance is your enemy.” Don’t take potshots at your client, even if the client’s behavior has forced you to withdraw. Employ phrases like “the attorney-client relationship has broken down” or “professional requirements compel me to withdraw,” and use the word “irretrievably” or confirm that the client terminated the relationship. While most courts will divine what is going on behind the scenes, you should be prepared with a pocket declaration or affidavit setting forth the specific grounds for withdrawal that you can submit for in camera review if the court requires more detail. You should further consider providing the pocket declaration to the client in advance to give the client an opportunity to object.
Best practices also suggest moving to stay all pending deadlines in the case while the court decides the motion to withdraw and the client engages new counsel. A motion for stay should list all relevant upcoming dates, how many extensions have been granted to date, confirmation that you requested opposing counsel’s consent to a stay, and confirmation that you advised your client of pending deadlines.
Securing Your Fees after Withdrawal
Now that you have withdrawn from the case, whether on consent or by court order, you can turn your attention to getting paid. Again, your options for recovering fees will depend on both your engagement letter and the applicable ethics rules.
If your engagement letter provides for a retaining lien or a charging lien, you should assert them when you are moving to withdraw. Some states permit a lawyer to assert a retaining lien over the file and the client’s papers to the extent necessary to secure payment of a fee. For example, New York Rule 1.8(i)(1) allows the attorney to “acquire a lien authorized by law to secure the lawyer’s fee or expenses,” and New York common law has long permitted an attorney to maintain a retaining lien. (See also comment 9 to Model Rule 1.16 (“A lawyer may retain papers as security for a fee only to the extent permitted by law.”).) By contrast, Virginia Rule 1.16(e) expressly requires the lawyer to turn over all documents, including third-party communications, transcripts, legal memoranda, and work product, “whether or not the client has paid the fees and costs owed the lawyer.” Retaining liens should only be used to ensure payment of flat or hourly fees; in a contingent matter, you can’t collect a fee if the client can’t successfully prosecute the case. Ethics rules universally hold that a contingency plaintiff has no obligation to prosecute a case solely to provide compensation for his or her attorney. You don’t need to inform opposing counsel that you are asserting a retaining lien, but you must notify your client by referencing the relevant section of your engagement letter. You should also tell incoming counsel that you are retaining the file, as he or she may be motivated to have it turned over, enhancing the possibility that you receive your fees.
If either the engagement letter or state law allows you to assert a charging lien, you should notify all relevant actors—your client, opposing counsel, and the court—at the time of withdrawal. Universal notice alerts everyone that you have a claim to a piece of any recovery, preventing your former client from settling the case without notice to you. If you do assert a charging lien, you should regularly monitor the case docket to be alert to any major developments in the case, including a settlement. Your charging lien should ensure that defendants, insurers, and defense counsel include you in any payouts.
What if the case resolves and you still have not been paid? In an hourly or flat fee matter, you can file suit or an arbitration claim for your fees, depending, again, on your engagement letter and state rules. Most jurisdictions have fee arbitration proceedings that allow for confidential determination of fee disputes by either the client or the attorney. If neither the engagement letter nor the applicable rules require arbitration, you may file a lawsuit to recover your fees. In bringing any action against a former client, you should consider the likelihood of recovery of fees, including the client’s ability to pay, as well as the likelihood that the client will bring a legal malpractice claim against you. While professional liability claims do not often succeed, they can wreak havoc on your malpractice insurance rates. Accordingly, you should be wary of filing suit against a former client for fees if you do not have a solid case. Moreover, in setting premiums, malpractice carriers regularly evaluate how many claims lawyers have filed for unpaid fees.
Timing may also factor into suing a former client for fees. For example, in California the statute of limitations for legal malpractice is generally one year from the discovery of injury, which is generally the conclusion of the representation. By contrast, the statute of limitations for breach of contract is four years, allowing the attorney to wait out the malpractice period and then sue for unpaid fees. If the client remains financially viable and you can wait until the statute has run, you can foreclose a malpractice claim.
Conclusion
Withdrawing from pending litigation can be frustrating and time-consuming. Following best practices for screening clients, evaluating cases, and drafting engagement letters can minimize the need to withdraw. Once you have determined you should or must withdraw, follow the procedures contained in your engagement letter, state ethics rules, and court practice. Moving quickly while setting forth only the necessary facts should allow you to exit the case with minimal harm to the client’s pending case and your ability to recover fees. When seeking fees after withdrawal, your prior client communications regarding fees, provisions of the engagement letter, and notices to the other party and court are all factors to evaluate. Before taking affirmative steps to recover fees, such as filing suit or for arbitration, weigh the likelihood of success, the client’s ability to pay, and the chances of a malpractice counterclaim.
