May a Nebraska lawyer with a contractual retaining lien refuse to release a former client's file until unpaid fees are paid?

Plain-English summary

A retainer agreement authorized the firm to claim a lien on the client's file for unpaid fees or expenses. After termination, the client requested the file for new counsel, but the firm withheld it because a balance remained.

Rule 1.16(d) requires reasonable steps to protect the client's interests at termination, including surrendering papers and property to which the client is entitled. It permits retention only to the extent other law allows. Rule 1.15 separately requires prompt delivery of property the client or another person is entitled to receive.

Nebraska law recognizes an attorney lien on client papers received during the representation, and the opinion states that retaining liens are not unethical per se. Ethical duties nonetheless can override lien rights in the circumstances of a particular representation.

When withholding the file would jeopardize the client's continued representation, the lawyer's duty to protect the client prevails over lien rights arising by statute or agreement. The materials generally owed include documents supplied by the client, discovery materials, correspondence, and counsel-generated notes, memoranda, briefs, and other work bearing on the client's business.

Counsel may keep copies absent a contrary agreement, but generally must bear the copying cost. Production to the client may consist of scanned or hard-copy materials.

In practice

Under this opinion, an unpaid balance and written lien clause do not answer the file-release question. The decisive ethics issue is whether retention would endanger the client's ability to continue the matter.

Common questions

Q: Are retaining liens always unethical in Nebraska?

A: No. The opinion says they are not unethical per se and may be authorized by law or agreement.

Q: When must file materials be released despite a lien?

A: When withholding them would jeopardize the client's continued representation.

Q: What materials generally belong in the released file?

A: Client-provided documents, discovery, correspondence, and lawyer-generated materials bearing on the client's business.

Q: May counsel retain a copy?

A: Yes, absent a contrary agreement, but counsel generally bears the copying cost.

Q: Must production be on paper?

A: No. The opinion allows scanned or hard-copy production.

Background and rules framework

Rule 1.16 governs protection of the client's interests and surrender of papers at termination. Rule 1.15 governs prompt delivery and accounting for client or third-party property. Nebraska's attorney-lien statute informs whether papers may otherwise be retained.

Citations and references

Nebraska Rules of Professional Conduct:

• Neb. R. Prof. C. §§ 3-501.15(d) and 3-501.16(d)

Statutes:

• Neb. Rev. Stat. § 7-108

Other opinions cited:

• Nebraska Ethics Advisory Opinion 01-3
• Colorado Ethics Opinion 104 (1999)

See also

• Nebraska Ethics Op. 17-01: Electronic closed client files
• VSB LEO 871: Former-client retaining lien
• Ohio Ethics Op. 1992-008: Client files and retaining liens

Source

• Landing page: Nebraska lawyer ethics opinions archive
• Original PDF: Nebraska Ethics Advisory Opinion 12-09

Original opinion text

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

NEBRASKA ETHICS ADVISORY OPINION FOR LAWYERS NO 12-09

Upon termination of representation, a lawyer shall take steps to the

extent reasonably practicable to protect a client’s interests, including

surrendering papers and property to which the client is entitled, although

the lawyer may retain papers relating to the client to the extent permitted

by other law.

QUESTION PRESENTED

What are the lawyer’s ethical duties to release the client’s file when the law

firm has a written express consent for the firm to acquire a lien on the file to secure

the lawyer’s fees or expenses?

FACTS

The client signs a retainer agreement with the law firm providing express

consent for the law firm to acquire a lien on the file to secure the lawyer’s fees or

expenses. The attorney/client relationship is then terminated, and there is a

balance owing on the client’s account. The client requests that the law firm release

her file to her so that she can provide it to her new attorney. The law firm refuses to

release the client’s file, because they claim a balance due and owing on the client’s

account.

RULES OF PROFESSIONAL CONDUCT

Section 3-501.16(7)(d): “Upon termination of representation, a lawyer shall

take steps to the extent reasonably practicable to protect a client’s interests, such as

giving reasonable notice to the client, allowing time for the employment of other 2925 counsel, surrendering papers and property to which the client is entitled, and

refunding any advance payment of fees or expense that has not been earned or

incurred. The lawyer may retain papers relating to the client to the extent

permitted by other law...

Assisting the Client Upon Withdrawal

[9] Even if the lawyer has been unfairly discharged by the client, a lawyer
must take all reasonable steps to mitigate the consequence to the client. The
lawyer may retain papers as a security for a fee only to the extent permitted by
law. (See Rule 1.15.)

Section 3-501.15(d): “Upon receiving funds or other property in which a

client or third person has an interest, a lawyer shall promptly notify the client or

third person. Except as stated in this rule or otherwise permitted by law or by

agreement with the client, a lawyer shall promptly deliver to the client or third

person any funds or other property that the client or third person is entitled to

receive, and, upon request by the client or third person, shall promptly render a full

accounting regarding such property.

DISCUSSION

Nebraska Ethics Advisory Opinion for Lawyers No. 01-3 provided: AN

ATTORNEY HAS AN ETHICAL OBLIGATION, UPON DEMAND, TO PROMPTLY

PROVIDE A CLIENT WITH THE CONTENTS OF THE FILE BELONGING TO

THE CLIENT. WHAT THE CLIENT MAY BE ENTITLED TO RECEIVE 2926
DEPENDS ON THE NATURE OF THE WORK, THE AGREEMENT BETWEEN

THE ATTORNEY AND CLIENT, AND THE PARTICULAR CIRCUMSTANCES OF

THE CASE. AS A GENERAL RULE, HOWEVER, A CLIENT IS ENTITLED TO: 1)

ALL DOCUMENTS PROVIDED TO THE ATTORNEY; 2) ALL DOCUMENTS OR

RESPONSES ACQUIRED BY COUNSEL THROUGH THE DISCOVERY

PROCESS; 3) ALL CORRESPONDENCE IN PURSUIT OF THE CLIENT’S

INTERESTS; 4) ALL NOTES, MEMORANDA, BRIEFS, MEMOS, AND OTHER

MATTERS GENERATED BY COUNSEL BEARING ON THE CLIENT’S

BUSINESS AND RESULTING FROM THE EMPLOYMENT OF THE COUNSEL.

THE COUNSEL MAY RETAIN COPIES OF THE FILE, ABSENT AN

AGREEMENT FROM THE CLIENT.
SUCH COPIES MUST BE MADE AT

COUNSEL’S EXPENSES.

Nebraska has since adopted the Rules of Professional Conduct. Therefore,

the applicability of the above has been questioned, as the prior opinion was decided

under the Code of Professional Responsibility. Neb.Rev.Stat. § 7-108 states, “An

attorney has a lien for a general balance of compensation upon any papers of his

client which have come into his possession in the course of his professional

employment; and upon money in his hands belonging to his client; and in the hands

of the adverse party in an action or proceeding in which the attorney was employed

from the time of giving notice of the lien to that party.”

The ABA-BNA Lawyers’ Manual on Professional Conduct, Practice

Guide, Section on Duties at the End of Representation (45:1201), provides as 2927 follows:

State Rules:

Many of the jurisdictions that have substantially modified their ethics
rules since the ABA adopted the Model Rules have embraced Model

Rule 1.16 with little significant change, although some states have
made slight modifications regarding the scope and existence of a
lawyer's right to retain the client's file in the event the

Client refuses to pay the lawyer's fees.

Arizona adds that a lawyer must upon request surrender “all of the
client's documents, and all documents reflecting work performed for the
client.” The lawyer may retain documents reflecting work performed for
the client to the extent permitted by other law, the rule adds, but “only
if retaining them would not prejudice the client's rights.”

Connecticut requires that the attorney confirm the termination in
writing within a “reasonable time.”

The District of Columbia provides that the continuing duty to protect
the client applies in connection with “any” termination of
representation, not just those terminations based on withdrawal. The
rule also reminds lawyers that the right to impose a retaining lien is
governed by Rule 1.8(i), which allows retaining liens to be applied only
to an attorney's work product and, in any event, prohibits a lawyer from
retaining property when the client is unable to pay or where there is a 2928 significant risk of harm if the property is retained.

Georgia omits completely the model rule language that allows a lawyer

to retain papers. It also specifies that the “maximum penalty” for

violating the rule is a public reprimand.

Louisiana requires a lawyer, upon written request from the client, to

promptly release to the client or the client's new lawyer the entire file

relating to the matter. The lawyer may keep a copy of the file “but shall

not condition release over issues relating to the expense of copying the

file or for any other reason,” the rule states. Who is ultimately

responsible for the cost of the copying “shall be determined in an

appropriate proceeding.”

Massachusetts adds a list, in paragraph (e), of items that the lawyer

must deliver to a former client after the client requests his or her file.

Michigan‘s rule calls on lawyers to take “reasonable” steps to protect the

client's interests when terminating the representation.

Minnesota omits the model rule language that allows a lawyer to retain

papers. It incorporates a list, in paragraph (e), of items that the lawyer

must deliver to a former client after the client requests his or her file.

Montana sets out a work product exception to the duty to return client

property, stating that a lawyer need not surrender “papers or materials

personal to the lawyer or created or intended for internal use by the

-2929- lawyer.” Papers that don't fall within that definition must be delivered

to the client; if copies are kept, the rule adds, the lawyer bears the

copying costs.

New Hampshire states that the steps to protect a client's interests are a

“condition to termination of representation.”

New Mexico allows a lawyer to retain property to the extent permitted

by law “or the Rules of Professional Conduct.”

North Dakota, in Rule 1.19, states that a lawyer shall not assert a

retaining lien against a client's files, papers, or property, defines what

constitutes a client's papers or property, and makes clear that copying

costs may be assessed against the client only when the client agreed to

the arrangement up front.

Ohio adds a clause defining client papers and property as including

“correspondence, pleadings, deposition transcripts, exhibits, physical

evidence, expert reports, and other items reasonably necessary to the

client's representation.”

Oregon adds “papers” and “personal property” to the list of things that

may be retained consistent with other law.

Rhode Island omits completely the model rule language that allows a

lawyer to retain papers. A separate rule states that whenever a lawyer

cannot locate a client the lawyer must petition the court for

-2930- instructions.

South Carolina adds a sentence expressly allowing a lawyer to “retain a
reasonable nonrefundable retainer.”

Tennessee includes in the property that must be returned “work
product” prepared for the client and for which the lawyer has been
compensated. The rule allows a lawyer to retain work product to the
extent permitted by other law “but only if the retention of the work
product will not have a materially adverse effect on the client with
respect to the subject matter of the representation.”

Texas permits a lawyer to retain papers “only if such retention will not
prejudice the client in the subject matter of the representation.”

Utah allows lawyers to retain papers to the extent permitted by other
law but adds that the lawyer must provide, “upon request, the client's
file to the client.” It also provides that the lawyer “may reproduce and
retain copies of the client file at the lawyer's expense.”

Virginia sets out in paragraph (e) a detailed list of the types of
documents that must be returned to the client , and specifies the
procedure for copying papers the lawyer wishes to retain.

Also, the ABA-BNA Lawyers’ Manual on Professional Conduct, Practice Guide, Section on Duties at the End of Representation (45:1205), provides as follows:

-2931-
 Attorneys’ Liens.

Many states allow lawyers to assert liens on client property as a means of guaranteeing that the attorneys' fees will be paid. See generally Restatement (Second) of Agency §464(b) (1958);
Restatement of Security §62(b) (1941); 7 Am. Jur.2d Attorneys at Law §313 (1980); 7 C.J.S. Attorney & Client §358 (1980). Indeed, Model Rule 1.16(d) specifically acknowledges that a lawyer may retain papers “to the extent permitted by law.”

Although the ethics rules neither endorse nor condemn attorneys' retaining liens, the majority of states have concluded that such liens are not unethical per se.
See Nat'l Sales & Serv. Co. v. Superior Court, 667 P.2d 738 (Ariz. 1983);
Marsh, Day & Calhoun v. Solomon, 529 A.2d 702 (Conn. 1987);
Maryland Attorney Grievance Comm'n v. McIntire, 405 A.2d 273 (Md.
1979); Levitas v. Levitas, 410 N.Y.S.2d 41 (Sup. Ct. N.Y. Cnty. 1978);
Silverstein v. Hornick, 103 A.2d 734 (Pa. 1954); In re Anonymous, 335 S.E.2d 803 (S.C. 1985).

See also Alabama Ethics Op. 86-2 (1988), Alabama Ethics Op. 89-25, and Alabama Ethics Op. 89-58 (1989); Arizona Ethics Op. 86-12 (1986);
District of Columbia Ethics Op. 250 (1994); Florida Ethics Op. 88-11 (1993); Indianapolis Ethics Op. 2 of 1990; Maryland Ethics Op. 87-36 (1987) and Maryland Ethics Op. 89-11 (1988); New Mexico Ethics Op.
1986-7; New York State Ethics Op. 567 (1984); Nassau County (N.Y.) Ethics Op. 91-5 (1991); New York City Ethics Op. 82-74; Columbus Ethics Op. 2 (1987); Oregon Ethics Op. 2005-90 (2005); Philadelphia Ethics Op. 87-1; South Carolina Ethics Op. 88-7; Utah Ethics Kp. 91 (1989); Virginia Ethics Op. 871 (1987) and Virginia Ethics Op. 996 (1988).

See generally Annotation, Attorney's Assertion of Retaining Lien as Violation of Ethical Code or Rules Governing Professional Conduct, 69 A.L.R.4th 974 (1989); Thompson, Attorneys' Fees and Liens, 85 Comm.
L.J. 136 (1980); Comment, Attorney's Liens: A Practical Overview, 6 U.
Bridgeport L. Rev. 77 (1985).

Thus, although the ethics rules neither endorse nor condemn an attorneys’ retaining

lien, the majority of states have concluded that such liens are not unethical per se, as

-2932- set out above.

Approaching this problem, Colorado Opinion 104 (4/17/99), provides as follows:

Files of client; Withdrawal from representation; Photocopies.

At the termination of the representation of a client a lawyer must surrender papers and property to which the client is entitled. The fact that the lawyer may have previously provided copies of documents to the client does not relieve the lawyer of this responsibility. A lawyer has the right to withhold documents related to the representation of other clients that the lawyer used as a model for drafting the client's documents, but the product drafted for the client may not be withheld.
Similarly, drafts of pleadings left in the file and not destroyed in the normal course of the representation should be surrendered. In addition, a lawyer may withhold personal attorney work product, including internal memorandums regarding the client's file, conflicts checks, personnel assignments, and a lawyer's notes containing personal impressions and comments that relate to the business of representing the client. If a lawyer's notes contain both factual information and personal impressions, the notes may be redacted or summarized to protect the interests of both the lawyer and the client. Lawyer work product does not include documents belonging to the client or those that are the lawyer's “end product,” such as pleadings filed in the case, correspondence with clients, opposing counsel and witnesses, and final versions of contracts, wills, corporate records, and similar documents prepared for the client's use. Preliminary drafts, legal research, and legal research memorandums must also be surrendered. Specific documents that would fall into the category of work product are to be identified on a case by case basis, but the lawyer's duty to protect the interests of the client favors production. In the event of a dispute, a judicial in camera inspection may be necessary. A lawyer who chooses to retain copies of documents surrendered to a client may not charge the client for the duplication costs. But if a lawyer voluntarily surrenders work product to the client, the duplication costs may be charged to the client. In the absence of a valid agreement to the contrary, a lawyer may not refuse to provide papers and property to the client until the client pays duplication costs. Opinion 82; Rule 1.16(d).

CONCLUSION

-2933-
 Regardless of the change from the Code of Professional Responsibility to the

Rules of Professional Conduct, “an attorney has an ethical obligation, upon demand,

to promptly provide a client with the contents of the file belonging to the client.

What the client may be entitled to receive depends upon the nature of the work, the

agreement between the attorney and client, and the particular circumstances in the

case. In circumstances where the clients continued representation would

be in jeopardy, the lawyer's ethical obligation to the client overrides any

lien rights the lawyer may have otherwise obtained by statute or

agreement.

As a general rule, however, a client is still entitled to:

1) ALL DOCUMENTS PROVIDED TO THE ATTORNEY; 2) ALL DOCUMENTS OR

RESPONSES ACQUIRED BY COUNSEL THROUGH THE DISCOVERY

PROCESS; 3) ALL CORRESPONDENCE IN PURSUIT OF THE CLIENT’S

INTERESTS; 4) ALL NOTES, MEMORANDA, BRIEFS, MEMOS, AND OTHER

MATTERS GENERATED BY COUNSEL BEARING ON THE CLIENT’S

BUSINESS AND RESULTING FROM THE EMPLOYMENT OF COUNSEL. THE

COUNSEL MAY RETAIN COPIES OF THE FILE, ABSENT AN AGREEMENT

FROM THE CLIENT. SUCH COPIES MUST BE MADE AT COUNSEL’S

EXPENSE.” Production to the client may consist of scanned or hard copy.

-2934-