Obligations to Clients
Law firm obligations to clients of departing lawyers

by Dean R. Dietrich

Question

An associate who had been working in our firm for two years recently left to join a different firm. I know that this is happening with far greater frequency in law firms. What are the ethical obligations of my law firm when this happens?

Answer

Both the American Bar Association and the State Bar of Wisconsin Standing Committee on Professional Ethics have issued opinions that address the ethical obligations of a lawyer when changing law firms. ABA Formal Opinion 99-414 contains a detailed discussion of the duties and responsibilities that a lawyer has to the law firm and to her clients when the lawyer moves to another law firm. State Bar Professional Ethics Committee Opinion E-97-2 addresses both the obligations of the lawyer and the law firm when a lawyer terminates association with that firm. The discussion in both opinions, however, centers primarily on the responsibilities of the departing lawyer and the duty to communicate with clients who were represented by the lawyer.

Generally, the remaining lawyers in the law firm have several obligations that must be met when an attorney departs from the law firm. The remaining lawyers have an obligation to keep clients informed of the impending departure of the lawyer who has had a substantial responsibility for the active matters involving that client. SCR 20:1.4 requires the law firm's remaining members, as the entity representing the client, to keep the client reasonably informed of facts and circumstances relating to the representation of the client. As such, the lawyers in the firm have an obligation to advise any client for which the departing attorney was performing legal services that the lawyer is departing the firm. This duty to advise the client only applies to those clients where the departing lawyer has had significant involvement or primary responsibility for providing services to that client. There is no obligation on the part of the firm to notify all of its clients of the departure of a lawyer, especially if those clients have not had any contact with or worked directly with the departing lawyer.

When notifying the appropriate clients of the departure of the lawyer, the lawyers in the firm have an obligation to make it clear that the client may choose to be represented by the departing lawyer, the law firm, or some other lawyer. The remaining lawyers have an obligation to determine the wishes of the client in those instances where the departing attorney was performing substantial work or had primary responsibility for the services being given to that client. Generally, this is handled by a letter to the client advising of the lawyer's departure and indicating that the client has the right to decide whether to continue representation by the law firm or to have the departing lawyer represent the client or to transfer the file to another attorney. Law firms generally also indicate that they will assume that the client wishes the law firm to continue the representation unless the client advises the law firm differently. There is no requirement that the client submit written consent to continue representation by the law firm; however, written client confirmation in the file would be considered a best practice. Often, both the law firm and the departing lawyer sign this letter to the client if the departure is of a friendly nature. If not, the lawyers in the law firm must initiate that correspondence under their duty to communicate with their clients under SCR 20:1.4.

The lawyers in the firm also have the responsibility to assure that all legal matters that were handled by the departing lawyer will continue to be managed and serviced by the remaining lawyers within the law firm and that the law firm exercises the appropriate level of competency under SCR 20:1.1 and the appropriate diligence under SCR 20:1.3. As such, the law firm has an obligation to continue to provide competent legal services to the client, even for those clients who were represented exclusively by the departing lawyer but who now continue to be represented by the law firm. These ethical obligations require the lawyers in the law firm to make a realistic assessment of whether or not they can continue to meet the needs of those clients who were represented by the departing lawyer and also ensure that the law firm has the appropriate level of expertise to meet those clients' legal needs.

If the law firm determines that it cannot competently and diligently represent the clients of the departing lawyer, the law firm must take reasonable steps to protect the clients' interests as it proceeds to withdraw from representing the clients. These steps would include ensuring that all pleadings and timelines for submittals are met or appropriate extensions are obtained to allow the clients to obtain new counsel and that all pending legal matters are reviewed to ensure that no harm will flow to the clients by a delay to obtain new counsel. If the law firm decides that it must withdraw from representation, the firm must follow the requirements of SCR 20:1.16 and must make sure that all file materials and client information is transferred to the lawyer or law firm assuming representation of the clients.

The handling of client files is an ongoing obligation of the law firm. Recent opinions of the Standing Committee on Professional Ethics have addressed the duties and obligations of a lawyer when responding to a request from a client for a client file (see E-82-7, E-95-4, E-98-1, and E-00-03). The division of fees between the departing lawyer and the law firm generally is a function of the employment agreement between the lawyer and the law firm. The State Bar of Wisconsin offers the Lawyer Dispute Resolution Program, through which a departing lawyer and a law firm can agree to mediation and final and binding arbitration of any disputes over fees for the matters handled by the departing attorney.

Lawyers in law firms must be aware of their responsibilities to clients in the event of the departure of a lawyer from the firm and should take all appropriate steps to notify the clients of the events related to their representation.

Wisconsin Lawyer