When a firm lawyer is disbarred (or suspended, disappears, or dies), what duty do the remaining lawyers have to safekeep and return that lawyer's client files?

Plain-English summary

The inquiry concerns a firm whose shareholder, Lawyer C, embezzled more than $1,000,000 from the trust account and was disbarred. When C was ousted in 2008, the two remaining lawyers reviewed C's client files and then allowed C to take possession of them; since then the paper files have sat in a storage facility whose key is held by C's lawyer, and C is now in prison. A former client whose 1998 real estate transaction C had closed now wants her file, but the remaining lawyers assert they are not obligated to help.

The opinion concludes the remaining lawyers are responsible for the safekeeping and proper disposition of both the active and closed files of the disbarred lawyer in their custody, and that closed files may not be relinquished to a disbarred lawyer who is no longer subject to State Bar regulation and no longer required to comply with the Rules of Professional Conduct. Rule 1.15 requires a lawyer to preserve client property, including documents and lawyer work product, from loss due to destruction, degradation, or disappearance. Because the duty to preserve a client's file in a firm is not solely the responsibility of the lawyer who served the client, Rule 5.1(a) makes the firm's partners and lawyers with comparable managerial authority responsible for ensuring firm-wide compliance.

The opinion states these responsibilities are the same regardless of whether the lawyer departed because of suspension, disbarment, disappearance, or death. The remaining lawyers must (1) ensure any open client matter is promptly and properly transitioned to the lawyer of the client's choice, and (2) retain possession of and safekeep the departed lawyer's closed files until the disposition requirements of RPC 209 can be met. The opinion adds that all firms should plan for the possibility of such an event and build into their operating procedures a means to access and secure client files. On the second inquiry, it concludes that when a file's location is known, the lawyers have a duty to take reasonable measures to help the client obtain it.

In practice

Under the North Carolina rules as they stood at the time of the opinion, conduct in which remaining firm lawyers hand a disbarred lawyer's closed client files to that lawyer is prohibited; the remaining lawyers must instead retain and safekeep those files. Per the opinion, Rule 1.15 imposes the duty to preserve client property from loss, and Rule 5.1(a) places that duty on the firm's partners and managerial lawyers, not only on the lawyer who served the client.

Per the opinion, the duty is the same whether the lawyer left by suspension, disbarment, disappearance, or death: the remaining lawyers must transition open matters to the client's chosen lawyer and safekeep closed files until they can be disposed of under RPC 209, and when a file's location is known they must take reasonable measures to help the client obtain it. The opinion states that firms should plan in advance for such events.

Common questions

Q: If a firm lawyer is disbarred, who is responsible for that lawyer's client files?

A: The remaining lawyers. The opinion concludes they are responsible for safekeeping and properly disposing of both the active and closed files of the disbarred lawyer in their custody, under Rule 1.15 and Rule 5.1(a).

Q: Can the firm just give the disbarred lawyer's files back to him?

A: No, not the closed files. The opinion concludes closed files may not be relinquished to a disbarred lawyer, because he is no longer subject to State Bar regulation or required to comply with the Rules of Professional Conduct.

Q: Is the duty different if the lawyer dies or disappears rather than being disbarred?

A: No. The opinion states the responsibilities are the same regardless of whether the lawyer departed because of suspension, disbarment, disappearance, or death: transition open matters to the client's chosen lawyer and safekeep closed files until disposition under RPC 209.

Q: Does the firm have to help a former client get her file?

A: Yes. The opinion concludes that when the location of a file is known, the lawyers have a duty to take reasonable measures to assist the client to obtain it, citing RPC 209.

Background and rules framework

The opinion applies North Carolina Rule 1.15 (safekeeping property, the analogue of Model Rule 1.15), reading the duty to preserve client property to include files and lawyer work product against loss, and Rule 5.1(a) (responsibilities of partners and managerial lawyers, the analogue of Model Rule 5.1), which makes firm leadership responsible for measures ensuring all firm lawyers comply with the rules. The combination puts the file-preservation duty on the remaining lawyers, not only on the departed one.

The opinion relies on prior North Carolina authority on file custody and fiduciary duties, including RPC 209 (disposition of closed files), RPC 234, RPC 48 (duties on firm dissolution), 98 FEO 15, and 2011 FEO 6 (cloud storage of electronic client files with reasonable care).

Citations and references

Rules of Professional Conduct:

• MR 1.15 / NC Rule 1.15 (safekeeping client property, including files and work product)
• MR 5.1 / NC Rule 5.1(a) (partners and managerial lawyers must ensure firm-wide compliance)

Other opinions cited:

• NC RPC 209: general fiduciary duty to safeguard client property and disposition of closed files.
• NC RPC 234: storing or returning a client's original documents of legal significance.
• NC RPC 48: duties on firm dissolution, including continuity of service and the client's right to counsel of choice.
• NC 2011 FEO 6: a firm may use cloud computing for electronic client files with reasonable care for security.

See also

• ABA Formal Op. 92-369: Deceased Solo's Client Files
• ABA Formal Op. 471: Surrendering the Client File
• AL Ethics Op. 2010-02: Client File Retention

Source

• Landing page: https://www.ncbar.gov/for-lawyers/ethics-and-governing-rules/ethics-opinions/opinions/2012-formal-ethics-opinion-13/

Original opinion text

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

Inquiry #1:

The law firm A & B, PA, was formed as a professional corporation in 1992. Lawyer A and Lawyer B were the initial shareholders in the firm. In 1993, Lawyer C joined the firm and became a shareholder. The professional corporation’s articles of incorporation were amended to change the professional corporation’s name to A, B & C, PA.

In 1998 Lawyer C closed a real estate transaction for a client of the firm. The file was placed among the firm’s inventory of client files.

In 2008 Lawyer A and Lawyer B learned that Lawyer C had committed numerous embezzlements from the firm’s trust account in a cumulative amount exceeding $1,000,000. Lawyer C (hereinafter, “C”) was ousted from the firm and was subsequently disbarred. The firm’s articles of incorporation were amended to change the professional corporation’s name back to A & B, PA. When C was ousted from the firm, Lawyer A and Lawyer B reviewed the files for the clients of the firm whose legal services had been provided by C. When their review was completed, Lawyer A and Lawyer B instructed or allowed C to take possession of those client files. Since 2008, paper client files have been in a storage facility to which C’s lawyer has the key, and electronic client files, to the extent that there were any, have been stored in a password-protected manner by C’s lawyer.

The client whose transaction was closed by C in 1998 is now seeking her file, which is believed to be in the storage facility. C is in prison. C’s lawyer cannot access the storage facility due to physical infirmity. However, C’s lawyer is willing to give Lawyer A and Lawyer B the key to the storage facility, and to authorize them to access and retrieve the client files. Lawyer A and Lawyer B assert that they are not obligated to help the client obtain her file.

When a lawyer leaves a firm and is subsequently disbarred, what is the professional responsibility of the lawyers remaining with the firm relative to the safekeeping and proper disposition of the files of the clients of the disbarred lawyer?

Opinion #1:

The remaining lawyers in the firm are responsible for the safekeeping and proper disposition of both the active and closed files of the disbarred lawyer in their custody. As used in this opinion, “files” applies to both electronic and paper files unless otherwise indicated. Because of the risk of loss, closed files may not be relinquished to a disbarred lawyer who is no longer subject to the regulation of the North Carolina State Bar and no longer required to comply with the Rules of Professional Conduct.

Rule 1.15 requires a lawyer to preserve client property, including information in a client’s file such as client documents and lawyer work product, from risk of loss due to destruction, degradation, or disappearance. See also RPC 209 (noting the “general fiduciary duty to safeguard the property of a client”); RPC 234 (requiring the storage of a client’s original documents with legal significance in a safe place or their return to the client); 98 FEO 15 (requiring exercise of lawyer’s “due care” when selecting depository bank for trust account); and 2011 FEO 6 (allowing law firm to use “cloud computing” if reasonable care is taken to protect the security of electronic client files).

If a lawyer practices in a law firm with other lawyers, the responsibility to preserve a client’s property, including the client’s file, is not solely the responsibility of the lawyer providing the legal services to the client. Rule 5.1(a) of the Rules of Professional Conduct requires the partners in a law firm and all lawyers with comparable managerial authority to make “reasonable efforts to ensure that the firm…has in effect measures giving reasonable assurance that all lawyers in the firm…conform to the Rules of Professional Conduct.”

The professional responsibilities of the partners and the lawyers with managerial authority relative to the files of the firm are the same, regardless of whether the lawyer has departed the firm because of suspension, disbarment, disappearance, or death.1 The lawyers are responsible for (1) ensuring that any open client matter is promptly and properly transitioned to the lawyer of the client’s choice, and (2) retaining possession of and safekeeping closed client files of the departed lawyer until the requirements for disposition of closed files set forth in RPC 209 can be fulfilled. See, e.g., RPC 48 (explaining duties upon firm dissolution including continuity of service to clients and right of clients to counsel of their choice).

All firms should recognize the possibility of suspension, disbarment, disappearance, or death of a firm lawyer. Law firms should plan for and include in their operating procedures a means or method to access and secure all client files for which the firm would be responsible if such an event were to occur.

Inquiry #2:

Do Lawyer A and Lawyer B have a duty to help a former client of the firm obtain the file relating to the legal services provided to her by C when C was a member of the firm?

Opinion #2:

Yes, when the location of a file is known, the lawyers have a duty to take reasonable measures to assist a client to obtain the file. See Opinion #1 and RPC 209.

End Notes

• 1. This opinion does not address the professional responsibilities of the firm lawyers when a lawyer leaves the firm to practice elsewhere.