Can a discharged lawyer hold a client's deposition transcript until the client repays the cost the lawyer advanced for it?

Plain-English summary

A lawyer who represented a client in a jail-beating case advanced over $2,000 for a deposition and its transcript. The client discharged the lawyer and hired new counsel, who requested the file, including the transcript. The first lawyer refused to release the transcript unless he was reimbursed for the deposition and transcript costs. The first question is whether he may condition release on that reimbursement.

The opinion concludes he may not. Rule 1.16(d) requires a lawyer, on termination, to take steps reasonably practicable to protect the client's interests, such as surrendering papers and property to which the client is entitled. Following the earlier ruling RPC 79 (surrender of medical records), the opinion holds that material obtained on the client's behalf that would be useful in pursuing the claim must be turned over unconditionally, without regard to whether the lawyer or the client advanced the cost of acquiring it. While Rule 1.16(d) lets a lawyer retain papers "to the extent permitted by other law," the committee found no North Carolina statutory or case law allowing a discharged lawyer a general or retaining lien on the client's papers or property, and noted that even where retaining liens exist, the lawyer's lien right is subordinate to ethical obligations to the client; comment [10] to Rule 1.16 states a lawyer may never retain papers to secure a fee.

The second question is whether the lawyer may include a clause requiring the client, except in cases of misconduct, not to settle, compromise, litigate, or hire another lawyer without first paying the specified costs, expenses, and fees. The opinion concludes no. The provision is contrary to two precepts of the Rules: the client's right to counsel of choice and the client's right to decide the objectives of the representation. A client may discharge a lawyer at any time, with or without cause (Rule 1.16, cmt. [4]), and has an absolute right to decide whether to settle, compromise, or litigate (Rule 1.2(a)). The provision violates the Rules on its face and may not be included in a legal services agreement.

In practice

Under the North Carolina rules as they stood at the time of the opinion, the analysis turns on the client's entitlement to file materials and to control the representation. The opinion holds that a discharged lawyer must unconditionally surrender deposition transcripts and other materials useful to the client's claim, regardless of who paid for them, and may not assert a retaining lien to secure costs or fees.

Per the opinion, a fee agreement may not bar the client from discharging the lawyer, settling, or litigating until costs and fees are paid; such a clause conflicts with the client's right to counsel of choice (Rule 1.16) and right to decide the objectives of the representation (Rule 1.2(a)).

Common questions

Q: Can a discharged lawyer keep the client's deposition transcript until the client repays the cost?

A: No. The opinion concludes the lawyer must surrender the transcript unconditionally under Rule 1.16(d) and may not condition its release on reimbursement of the advanced cost.

Q: Does North Carolina recognize a retaining lien on the client's file?

A: The committee found none. The opinion states it is aware of no North Carolina statute or case law entitling a discharged lawyer to a general or retaining lien on the client's papers, and notes that a lawyer may never retain papers to secure a fee (Rule 1.16, cmt. [10]).

Q: Can a fee agreement require the client to pay all costs and fees before switching lawyers or settling?

A: No. The opinion concludes such a clause violates the client's right to counsel of choice and right to decide the objectives of the representation (Rules 1.16 and 1.2(a)) and may not be included in a legal services agreement.

Background and rules framework

The opinion applies North Carolina Rule 1.16(d) (duties on termination, including surrender of papers and property to which the client is entitled, with retention allowed only "to the extent permitted by other law") and Rule 1.2(a) (the client decides the objectives of the representation, including whether to settle), with reference to comments [4] and [10] to Rule 1.16. These track Model Rules 1.16 and 1.2. The opinion relies on RPC 79 and authorities including the Restatement of the Law Governing Lawyers § 43 for the principle that a lawyer may not hold a client's documents hostage to a fee.

Citations and references

Rules of Professional Conduct:

• MR 1.16 / NC Rule 1.16(d), cmts. [4], [10] (duties on termination; surrender of the client's papers; no retention to secure a fee)
• MR 1.2 / NC Rule 1.2(a) (client decides the objectives, including whether to settle or litigate)

Other opinions cited:

• NC RPC 79: a lawyer who advanced the cost of obtaining medical records may not condition their release to the client on reimbursement.

See also

• NC RPC 79: Surrender of Medical Records
• NC 2002 FEO 5: Retention of Email in a Client's File

Source

• Landing page: https://www.ncbar.gov/for-lawyers/ethics-and-governing-rules/ethics-opinions/opinions/2006-formal-ethics-opinion-18/

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

Inquiry #1:

Attorney A represented Client in an action alleging that Client was beaten by guards at the county jail. Attorney A advanced over $2,000 for the cost of a deposition and the deposition transcript. Client discharged Attorney A and hired Attorney B to prosecute his claim. Attorney B requested the file, including the deposition transcript, from Attorney A. Attorney A refused to release the transcript unless he was paid for the cost of the deposition and the transcript.

May Attorney A condition release of the deposition transcript on reimbursement for the amount advanced for the deposition and the transcript?

Opinion #1:

No. Rule 1.16(d) requires a lawyer "[u]pon termination of representation [to] take steps to the extent reasonably practicable to protect a client's interests, such as surrendering papers and property to which the client is entitled..." RPC 79 is also on point. The opinion provides that a lawyer who advanced the cost of obtaining medical records to decide whether to take a case may not condition the release of the records to the client upon reimbursement for the cost. The following excerpt includes the operative provisions of the opinion:

Law Firm X must turn over unconditionally to its client any material such as copies of medical reports or statements of expert opinion which were obtained on the client's behalf and account if such would be useful to the client in further prosecution of her claim. Rule 2.8(a)(2) of the Rules of Professional Conduct [now Rule 1.16] requires that a lawyer who withdraws from employment take reasonable steps to avoid foreseeable prejudice to rights of the client. One means of avoiding such prejudice is, in the language of the rule, "delivering to the client all papers and property to which the client is entitled." Although the rule itself does not define the extent of the client's entitlement, the comment to the rule does indicate that, "anything in the file which would be helpful to successor counsel should be turned over." If material obtained during the evaluation process on the client's account would be of some value to the client in pursuing her claim, it must, under the terms of the rule, be surrendered unconditionally without regard to whether the cost of its acquisition was advanced by the law firm or the client.

Rule 1.16(d) does permit a lawyer to retain papers relating to the client "to the extent permitted by other law." However, the Ethics Committee is aware of no North Carolina statutory or case law that entitles a discharged lawyer to a general or retaining lien on the papers or other property received by the lawyer during the client's representation. Even in jurisdictions where retaining liens are permitted by law, the regulatory bars "generally have held that a lawyer's legal right to execute a lien granted by law to secure a fee or expense is subordinate to ethical obligations owed to the client." Annotated Model Rules of Professional Conduct, Fifth Ed., p. 275 (2003); see also, Restatement of the Law Governing Lawyers, §43 Comment b. ("A lawyer ordinarily may not retain a client's property or documents against the client's wishes."); Rule 1.16, cmt. [10] ("The lawyer may never retain papers to secure a fee.").

Inquiry #2:

Attorney A would like to include the following provision in his legal services agreement:

Except in the case of misconduct, client agrees not to settle, compromise, or litigate said claim, or to retain any other attorney to handle said claim, without first paying attorney the costs and expenses and fees above specified

May Attorney A include this provision in his legal services agreement?

Opinion #2:

No, this provision is contrary to two key precepts of the Rules of Professional Conduct: the client's right to legal counsel of choice and the client's right to decide the objectives of his representation. A client has a right to discharge a lawyer at any time, with or without cause. Rule 1.16, cmt. [4]. Similarly, a client has an absolute right, at any time, to decide whether to settle, compromise, or litigate his claim. Rule 1.2(a). This provision is a violation of the Rules on its face and may not be included in a legal services agreement.

End Notes

• Rule 1.16 replaced Rule 2.8 when the Rules of Professional Conduct were revised in 1997. Rule 1.16(d) is essentially identical to the paragraph in Rule 2.8 that it replaced.