Withdrawal from Employment: When and How to Say Goodbye
Withdrawal from Employment: When and How to Say Goodbye
By Barbara E. Dunn, Of Counsel to the firm of Lacey, Dunn & Do, a Professional Corporation, in Glendale, California. The firm's practice emphasizes defense of professional liability cases against lawyers, accountants, and other professionals. In addition to defending civil malpractice cases, she has been consulting with lawyers about professional ethics since 1977, and previously served as Assistant to the Chief Trial Counsel of the State Bar.
It is a fact of legal life that attorney-client relationships sometimes terminate while matters are still pending. Rule 3-700 of the Rules of Professional Conduct of the State Bar provides California lawyers with ethical guidelines related to withdrawal from employment. It applies whether or not the employment involves litigation and regardless of whether the termination is sought by the client, the attorney, or by mutual agreement of both.
Risk Management Issue: Take Action without Delay. Once you decide that you should withdraw, do it right away. You are ethically required to do so where the reasons for withdrawal make it mandatory under Rule 3-700(B). However, even where withdrawal is permissive (Rule 3-700(C)), delay usually just makes things worse. This is particularly true where you need court approval. The longer you wait to request leave to withdraw, the greater the likelihood that your request will be denied, and the greater likelihood of prejudice to your client's interests.
The reasons for terminating the attorney-client relationship sometimes result in litigation. This is especially true in fee disputes. If you continue with representation after recognizing there is such a problem, chances are that your client's motive to find fault with your services will grow along with your account receivable. Address the situation early and before it becomes the elephant in the room. If you cannot come to a satisfactory resolution, take steps to withdraw, and follow through.
The legal malpractice statute of limitations (Code of Civil Procedure Sec. 340.6) tolls during the time that an attorney continues to represent a client regarding the subject matter from which the malpractice claim arises. California applies an objective standard in determining whether and when representation has ended. Worthington v. Rusconi (1994) 29 Cal.App.4th 1488. Formal withdrawal (by substitution of attorney or court order) is a bright line for statute of limitations purposes regarding litigation. While the attorney-client relationship may have effectively terminated prior to such formal withdrawal, the safer practice is compliance with the necessary formalities.
When withdrawal occurs in a non-litigation or pre-litigation matter, it is important to carefully document the change in representation, confirming in writing that you are no longer counsel and that the file has been transferred. Among other things, this includes getting a signed receipt for the file from the client or from new counsel. Observing and documenting these formalities will go a long way toward insulating you from liability if there is a subsequent claim for malpractice that arises after your representation ceased. Stekette v. Lintz, Williams & Rothberg (1985) 38 Cal.3d 46.
Avoiding Foreseeable Prejudice. Rule 3-700(A)(2) provides that a member of the State Bar "shall not withdraw from employment until the member has taken reasonable steps to avoid reasonably foreseeable prejudice to the rights of the client...." [emphasis added] The rule specifies that this includes "giving due notice to the client, allowing time for employment of other counsel, complying with rule 3-700(D) [returning client papers and advance fees], and complying with applicable laws and rules."
Risk Management Issue: What is "Reasonable under the Circumstances"? As a practical matter, the particular facts and circumstances surrounding the representation drive the steps that an attorney must take to comply with Rule 3-700(A)(2). The bottom line -- The lawyer will be held to an objective standard of what is "reasonable" under those circumstances. Generally, it includes explaining to your client the reasons for withdrawal, advising your client to consult with another lawyer, and informing your client (or the new lawyer) of the status of the matter and any pending deadlines or time limitations. It also means returning the client's documents and other property, and taking the procedural steps to accomplish withdrawal. In re Hickey (1990) 50 Cal.3d 571.
Litigated Matters. Rule 3-700(A)(1) provides that if permission for termination of employment is required by the rules of a tribunal, a member shall not withdraw from employment in a proceeding before that tribunal without its permission. Therefore, it is important that an attorney be aware of and comply with the applicable rules of the tribunal before whom a litigated matter is pending.
California Code of Civil Procedure Sec. 284 provides that counsel may be changed at any time before or after judgment or final determination by (1) consent of both the client and the attorney (a substitution of attorneys pursuant to C.C.P. Sec. 285), or (2) by order of the court upon application by the client or by the attorney, and after notice from one to the other (motion pursuant to Rule 376 of the Rules of Court).
Substitution of Attorneys. A client has an absolute right to substitute attorneys for any reason. It is unethical for an attorney to refuse to execute a substitution of attorneys in an attempt to protect the attorney's fees or fee claims. Kallen v. Delug (1984) 157 Cal.App.3d 940. Almost always it is in the attorney's ultimate best interests to get the substitution completed as soon as possible.
Risk Management Issue: Promptly Effectuate a Substitution. A significant and unwarranted delay in effectuating a substitution of counsel requested by a client runs afoul of Rule 3-700, especially where the client's interests are compromised or harmed in the meantime. Friedman v. State Bar (1990) 50 Cal.3d 235. Failing to promptly request and effectuate a substitution when you determine that you should withdraw also violates this rule. In re Hickey (1990) 50 Cal.3d 571. Further, if you and your client have mutually agreed to a substitution, but the process is not finalized immediately, consider making a motion for leave to withdraw, and document that you are not the reason for the delay.
Risk Management Issue: Be Sure to File the Substitution with the Court. Regardless of who wants the substitution, be sure to have it fully executed by you, your client, and new counsel, and insure that it is actually filed with the court. Either take care of the filing yourself, or get a conformed copy showing the filing date.
Motions to be Relieved as Counsel. Ordinarily the determination of whether to grant or deny a motion to be relieved as counsel is within the court's discretion. A lawyer's promptness in a motion to withdraw is an important factor for the court's consideration.
Motions to be relieved as counsel are made pursuant to Rule 376 of the California Rules of Court, which requires use of helpful Judicial Council forms. Although usually done by noticed motion, it is sometimes necessary and proper to do so ex parte after giving notice to the client. No memorandum of points and authorities is required. However, if you are making application on an ex parte basis, you may wish to include citations to and discussion of authorities authorizing it.
Rule 376 also requires that the attorney's declaration "state in general terms and without compromising the confidentiality of the attorney-client relationship" why a motion under Code of Civil Procedure Sec. 284(2) is brought instead of filing a substitution. Not all judges agree about the quality and quantity of factual showing that justifies leave to withdraw, and the case's procedural history can impact this as well, especially if the judge has reason to believe that it is a delaying tactic. Use extreme care in preparing the declaration in support of withdrawal. The contents can come back to haunt you in a variety of ways.
Risk Management Issue: Request an In Camera Hearing. Keep the declaration general, avoid client confidences, and request an in camera hearing to furnish additional details. This will allow you to provide additional information with a minimum of prejudice to your client, and will allow your client to elaborate on any concerns about possibly being left without assistance of counsel. Manfredi & Levine v. Superior Court (1998) 66 Cal.App.4th 1128, 136-1137.
The guiding general principle regarding all of these issues -- Use at least as much care in withdrawing from attorney-client relationships as you do in creating them. Identify what needs to be done, act promptly, document your actions, and, above all, take steps to avoid foreseeable prejudice to client interests.
This article is intended to inform the reader of potential liability exposures for attorneys. This article reflects general principles only and does not render legal advice. Readers should consult legal, financial, insurance, and other advisors if they have specific concerns. Neither the Los Angeles County Bar Association, Aon and its affiliates nor the author assumes any responsibility for how the information in this article is applied in practice or for the accuracy and completeness of the information. Reproduction without written permission is prohibited. This article is made available by Aon Direct Insurance Administrators, administrators of the LACBA Sponsored Aon Insurance Solutions Program, to the LACBA members. www.aonsolutions.com
# # #