When a partner leaves a firm, what may the remaining partners do about that partner's clients, files, and a liability release?

Plain-English summary

A partner withdrew, at the other partners' request, from a three-partner professional corporation; all retainer agreements were in the firm name though one lawyer was usually primarily responsible for a given client, and the partners had orally agreed to notify the departing partner's clients in writing and offer each a choice of staying with the firm, going with the departing partner, or choosing other counsel. The inquiry raised several ethical questions about the dissolution.

On contacting the departing partner's clients, the committee applied DR 2-103(A) (no in-person solicitation of employment that is misleading or coercive) and held that if a remaining partner contacted such a client in person or by telephone and tried to persuade the client to stay with the firm, that would be improper, especially if couched as mere notice of the firm's change; it pointed to California Opinion 1985-86 for proper joint-notice guidelines. On contacting opposing counsel and seeking an assignment of settlement proceeds, it held that unauthorized communications to opposing counsel could be deceitful under DR 1-102(A)(4), and that pressing the client to assign settlement proceeds to the former firm could violate DR 1-102(A)(4) and DR 2-105(D) (fee division between lawyers not in the same firm), though asserting a lien against the proceeds might be permissible.

On a required release of liability, the committee held that demanding the client execute a release for all prior representation before releasing files is per se unethical under DR 6-102(A) (a lawyer may not limit liability for personal malpractice), reinforced by EC 6-6. On conditioning file release on payment of fees, it held (following LE Op. 1176) that even where applicable law allows retaining papers, conditioning release on payment when a hearing is scheduled and the client cannot pay would violate DR 2-108(D). On withholding the departing partner's severance for unremitted advanced costs, it found a business and legal matter, not an ethical one, noting DR 5-103(B) makes the client ultimately responsible for litigation expenses. Finally, on changing the locks to deny the departing partner access to client files, it held that could violate DR 2-108(D) if intended to sequester client files, and it reminded the inquirer of the duty to report misconduct under DR 1-103(A).

Currency note

This opinion was issued in 1990, under Virginia's former Code of Professional Responsibility (the disciplinary rules it cites), before the Virginia State Bar's adoption of the Rules of Professional Conduct effective January 1, 2000. As the committee note observes, current Rule 1.16(e) governs the duty to provide files to a former client, and Rule 1.8(e) allows repayment of advanced costs and expenses to be contingent on the outcome of the matter. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Can the remaining partners call a departing partner's clients to keep them?

A: Under this 1990 opinion, no. The committee held that in-person or telephone contact attempting to persuade the client to stay with the firm would be improper under DR 2-103(A), especially if presented as mere notice of the firm's change.

Q: Can the firm make the client assign settlement proceeds or sign a liability release?

A: The committee said pressing the client to assign settlement proceeds could violate DR 1-102(A)(4) and DR 2-105(D), and that requiring a release of liability for prior representation is per se unethical under DR 6-102(A); a lien on the proceeds, by contrast, might be permissible.

Q: Can the firm hold a client's files until fees are paid?

A: Not where it would harm the client. The committee held that conditioning release of files on payment when a hearing is scheduled and the client cannot pay would violate DR 2-108(D), though the lawyer need not surrender files if that would defeat a valid statutory or common-law lien.

Q: Can the firm lock the departing partner out of the client files?

A: The committee said changing the locks to deny access could violate DR 2-108(D) if a finder of fact determined the intent was to sequester client files from the departing partner; access to the departing partner's personal possessions was a legal question beyond its purview.

Background and rules framework

The opinion interpreted former Virginia DR 2-103(A) (solicitation), DR 1-102(A)(4) (dishonesty), DR 2-105(D) (fee division), DR 6-102(A) (limiting malpractice liability), DR 2-108(D) (protecting the client on termination, including file delivery), and DR 5-103(B) (litigation expenses), plus the reporting duty in DR 1-103(A). These map to Virginia Rules 7.3 (solicitation), 1.16(e) (file return), 1.8(e) and 1.8(h) (litigation costs and limiting liability), 5.6 (restrictions on practice), and 8.3 (reporting) today.

Citations and references

Rules of Professional Conduct:

• Former Virginia DR 2-103(A), DR 1-102(A)(4), DR 2-105(D), DR 6-102(A), DR 2-108(D), DR 5-103(B), DR 1-103(A); EC 6-6 (Code of Professional Responsibility)
• ABA Model Rule 7.3 (solicitation); Model Rule 1.16 (file return); Model Rule 1.8 (limiting liability; litigation costs); Model Rule 5.6 (restrictions on practice)

Other opinions cited:

• State Bar of California Opinion 1985-86: joint notice of dissolution to clients.
• Virginia LE Op. 381; LE Op. 1113: permissible notice to clients.
• Virginia LE Op. 794; LE Op. 1176.

See also

• VA LEO 1357: Letting a Client See the File List
• VA LEO 1822: Departing Lawyer's Client Notice
• VA LEO 1366: The Whole File Belongs to the Client
• VA LEO 1485: Conditioning File Return on a Receipt

Source

• Landing page: https://vsb.org/Site/about/rules-regulations/leo-opinions.aspx
• Original PDF: https://www.vsb.org/common/Uploaded%20files/LEOs/1332.pdf

Original opinion text

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

Committee Opinion
April 20, 1990
Committee Op Note Update
November 18, 2021
LEGAL ETHICS OPINION 1332

PARTNERSHIPS/EMPLOYMENT
AGREEMENTS – ADVERTISING AND
SOLICITATION – FEES – FILES –
LIMITING PROFESSIONAL LIABILITY:
CONDUCT REGARDING DISSOLUTION
OF LAW FIRM.

You have advised that Partner A, with the concurrence and at the request of the other
partners, withdrew from a professional legal corporation which had consisted of three
partners and one associate prior to the withdrawal of Partner A. In addition, you advised
that all written retainer agreements with clients are in the firm name, although, generally
only one attorney performs services or is primarily responsible for a particular client
and/or case. Finally, you have indicated that the partners orally agreed to notify, in
writing, the withdrawing partner's clients of the dissolution and to offer each the choice
of continuing with the firm, continuing with the withdrawing partner, or choosing another
lawyer or law firm.
You have asked the Committee to consider ethical implications involving several issues
related to the partnership dissolution.
Remaining Partners' Contact with Clients Serviced Primarily by Withdrawing Partner.
You have asked if, prior or subsequent to the dissolution of the partnership, it is
ethically permissible for a remaining partner to (a) contact a client serviced primarily, if
not exclusively, by the withdrawing partner; (b) attempt to influence the client to remain
with the firm by informing the client, in writing, that the firm will continue to represent
him; and (c) neglect to inform the client of his right to select counsel of his choice, which
may include the departing attorney. You have also inquired as to the propriety of the
remaining partner arranging a meeting with the client, possibly in order to attempt to
influence the client to retain the firm for representation on a pending matter originated by
the withdrawing partner, when the client contacts the firm to advise that his choice is to
continue with the withdrawing partner. Finally, you have asked about the propriety of the
remaining partner's arranging to meet with a client of the withdrawing partner when that
client arrives at the former firm's offices to pick-up certain files as part of a document
production in a pending matter.
The appropriate and controlling Disciplinary Rule relative to the above inquiry is DR:2-103(A) which provides that a lawyer shall not, by in-person communication, solicit
employment for himself, his partner, or associate or any other lawyer affiliated with him
or his firm from a nonlawyer who has not sought his advice regarding employment of a
lawyer if (1) such communication contains a false, fraudulent, misleading or deceptive
statement or claim; or, (2) such communication has a substantial potential for or involves
the use of coercion, duress, compulsion, intimidation, threats, unwarranted promises of
benefits, overpersuasion, overreaching, or vexatious or harassing conduct in light of the

Committee Opinion
April 20, 1990
Committee Op Note Update
November 18, 2021
sophistication regarding legal matters, the physical, emotional or mental state of the
person to whom the communication is directed and the circumstances in which the
communication is made. Thus, the Committee believes that if the client contact was made
in-person or by telephone and the attorney attempted to influence or persuade the client to
remain with the firm, such communication would be improper under the Code of
Professional Responsibility's mandates regarding acceptable communication and
solicitation of employment. The Committee is of the opinion that such contact is
especially unacceptable if couched in terms of giving notice to a client of a change in the
firm as in the case of a dissolution, or the departure of an attorney who is directly
responsible for the representation of a client.
The Committee directs your attention to State Bar of California Opinion 1985-86
(undated), which provides appropriate guidelines for a firm's notice of dissolution to a
client. The opinion states in part that nothing in the written notice should contain false,
misleading or deceptive advertising. Also, where feasible, the attorneys should prepare a
joint notice which (1) identifies the withdrawing attorneys; (2) identifies the field in
which the withdrawing attorneys will be practicing law, gives their addresses and
telephone numbers; (3) provides information as to whether the former firm will continue
to handle similar legal matters, and; (4) explains who will be handling ongoing legal
work during the transition. In addition, the opinion states that “a lawyer . . . may not
attempt to influence the client's choice of counsel by communicating with clients in
person, by telephone or through agents.” (See also LE Op. 381, LE Op. 1113 for other
examples of permissible communication or notice to clients.)
Remaining Partners' Contact with Opposing Counsel in Pending Matters.
You have inquired if it is ethically permissible for a remaining partner to contact
opposing counsel in a pending matter to inform him that the remaining partner will be the
attorney for firm's client after client has informed remaining partner that he wishes to be
represented by the withdrawing partner. In addition, you have asked if one of the
remaining partners may enter into settlement negotiations with an opposing party and
also request that the client, who has sought representation by the withdrawing partner,
assign a portion of the proceeds of that settlement to the (remaining) firm to satisfy an
outstanding bill for legal services.
The appropriate and controlling Disciplinary Rules relative to this second issue are
DR:1-102(A)(4), and DR:2-105(D) governing misconduct and sharing fees between
lawyers respectively. The rules provide as follows:
DR:1-102(A)(4)
A lawyer shall not engage in conduct involving dishonesty, fraud, deceit, or
misrepresentation which reflects adversely on a lawyer's fitness to practice law.

Committee Opinion
April 20, 1990
Committee Op Note Update
November 18, 2021
DR:2-105(D)
A division of fees between lawyers who are not in the same firm may be made only if
the client consents to the employment of additional counsel; both attorneys expressly
assume responsibility to the client; and the terms of the division of the fee are disclosed
to the client and the client consents thereto.
The Committee is of the opinion that unauthorized communications made to opposing
counsel in a pending matter may be deceitful and a misrepresentation. Such deceit and
misrepresentation may be determined by an appropriate finder of fact to reflect adversely
on the lawyer's fitness to practice law. Assuming that the opposing party was not
represented by counsel and, therefore DR:7-103(A) (which prohibits a lawyer's direct
communication with a represented party) is not an issue, the Committee is of the opinion
that unauthorized settlement negotiations and any assignment of settlement proceeds to
the remaining firm may be violative of DR:1-102(A)(4). Furthermore, the committee
believes an assignment of settlement proceeds to the former firm may be violative of
DR:2-105(D) since, under the facts of the inquiry, there is no evidence that the client
requested additional counsel, nor is there any indication that both attorneys agree to
assume responsibility to the client or that the client had consented to an agreed upon
division of fees between both lawyers. Thus, while the assertion of a lien against the
proceeds by the former firm may be permissible, the Committee views any attempt to
influence the client to execute an assignment of settlement proceeds as potentially
improper. (See also LE Op. 794)
Requirement of Release of Liability for Previous Legal Representation.
You have requested that the Committee opine as to the propriety of the former firm's
requirement that the client execute a release of liability to the firm for all previous legal
representation and all representations made by the departing partner of the firm prior to
the firm's release of that client's files to the withdrawing partner.
The Committee is of the view that such an agreement is per se unethical and violative
of DR:6-102(A) which provides that a lawyer shall not limit his liability to his client for
his personal malpractice. Ethical Consideration 6-6 [EC:6-6] provides further guidance in
urging, first, that a lawyer should not seek, by contract or other means, to limit his
individual liability to his client for his malpractice, and then goes on to state that a lawyer
who has handled the affairs of his client properly has no need to attempt to limit his
liability for his professional activities and one who has not should not be permitted to do
so.
Requiring Payment of Legal Fees Prior to Releasing Client Files.

Committee Opinion
April 20, 1990
Committee Op Note Update
November 18, 2021
You have asked if the former firm may require payment of outstanding legal fees prior
to releasing the client's files to the withdrawing partner in active pending matters in
which court hearings have been scheduled.
Disciplinary Rule 2-108(D) [DR:2-108] is the appropriate and controlling rule
regarding this inquiry. That rule provides that upon termination of representation, a
lawyer shall take reasonable steps for the continued protection of a client's interests,
including giving reasonable notice to the client, allowing time for employment of other
counsel, delivering all papers and property to which the client is entitled, and refunding
any advance payment of fee that has not been earned. The lawyer may retain papers of
the client to the extent permitted by applicable law. The Committee is of the opinion that
prior LE Op. 1176 is dispositive of this issue. That opinion indicates that, even if
applicable law permits the attorney to retain the client's papers, under certain
circumstances, retention of papers relating to the client may be inconsistent with taking
“reasonable steps for the continued protection of a client's interest,” as required by DR:2-108(D). It is thus the opinion of the committee that, in certain circumstances where fees
are owing, the attorney must make the file available to the client or his designee for
review and possibly for copying, but may not be required to release the file if to do so
would defeat the attorney's legal rights to preserve any statutory or common law lien. See
also LE Op. 1176. Thus, conditioning the release of client files upon payment of past
legal fees when the matter is pending a scheduled hearing would be detrimental to the
client and, as such, violative of DR:2-108(D) if the client cannot meet the obligation
financially.
Withholding of Departing Partner's Severance Pay for Remittance of Incurred Costs.
You have asked that the Committee consider the propriety of the former firm's
withholding, from severance pay due the withdrawing partner, of advanced costs (such as
court reporter fees) incurred by the firm on behalf of a client but not yet remitted to the
third party by either the firm or the client.
In pertinent part, Disciplinary Rule 5-103(B) [DR:5-103] provides that in contemplated
or pending litigation, a lawyer shall not advance or guarantee financial assistance to his
client, except that he may guarantee the expenses of litigation provided that the client
remains ultimately responsible for such expenses. Since a lawyer may not acquire a
proprietary interest in the cause of action or subject matter of litigation he is conducting
for his client (DR:5-103(A)), a client must be ultimately liable for expenses such as court
reporter fees. Whether the departing attorney advances such costs and later bills the client
or whether the former firm chooses to advance the costs and later bill the client, is a
business decision and any subsequent responsibility of the withdrawing partner for such
fees is a legal matter. Neither situation poses any ethical question and therefore is not
within the purview of this Committee.
Restricting Withdrawing Partner's Access to Office, Files, and Personal Possessions.

Committee Opinion
April 20, 1990
Committee Op Note Update
November 18, 2021
Finally, you have inquired if the former firm, on the day of the dissolution, may change
the locks for the office and deny the withdrawing partner access to office and files. You
have also inquired as to the propriety of a remaining partner's culling through the
withdrawing partner's files and personal possessions during that time.
The Committee is of the view that if access to office and files of clients was being
denied even during office hours, such conduct may be violative of DR:2-108(D) if a
finder of fact were to determine that the intention was to preclude access to or to
sequester the client files or copies of client files from the withdrawing partner. Whether
the remaining partner was within his rights to search through the departing attorney's
personal possessions is a legal question beyond the purview of this Committee.
In conclusion, the Committee directs your attention to DR:1-103(A) regarding a
lawyer's obligation to report another attorney's misconduct. The rule mandates that if the
ethical violation raises a substantial question as to that lawyer's fitness to practice law in
other respects, a lawyer having such information is mandated to report such information
to the appropriate professional authority, unless such information is protected by Canon 4
(Preservation of Confidences and Secrets of a Client).
Committee Opinion
April 20, 1990
Legal Ethics Committee Notes. Rule 1.16(e) governs a lawyer’s duty to provide files
to a former client. Rule 1.8(e) allows repayment of advanced costs and expenses to be
contingent on the outcome of the matter.
Committee Op Note Update
November 18, 2021