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ABA Ethics Opinion provides guidance regarding client confidentiality when lawyer withdraws from representation for failure to pay fees

Hello everyone and welcome to this Ethics Alert which will discuss the recent ABA Formal Ethics Opinion which provides guidance regarding client confidentiality when a lawyer withdraws from representation.  The opinion is ABA Formal Opinion 476 (12/19/16) and is online here: ABA Opinion 476.

Model Bar Rule 1.16 related to withdrawal from representation

The ABA opinion discusses Model Rule 1.16, which is substantially similar to the Florida Bar Rule 4-1.16 and other state Bar rules.   According to the opinion, “Model Rule 1.16 addresses a lawyer’s duties and responsibilities when withdrawing from the representation of a client. Rule 1.16(a) sets forth the circumstances when a lawyer is required to withdraw, and Rule 1.16(b) describes the circumstances when a lawyer may be permitted to withdraw from a representation.  Among the permissive reasons, Rule 1.16(b)(5) provides that a lawyer may withdraw from representing a client when “the client substantially fails to fulfill an obligation to the lawyer regarding the lawyer’s services and has been given reasonable warning that the lawyer will withdraw unless the obligation is fulfilled.”

“Comment [8] to (Model Rule 1.16) states:  ‘A lawyer may withdraw if the client refuses to abide by the terms of an agreement relating to the representation, such as an agreement concerning fees or court costs . . . .’ In addition, Rule 1.16(b)(6) provides that a lawyer may withdraw where ‘the representation will result in an unreasonable financial burden on the lawyer or has been rendered unreasonably difficult by the client.’  As the courts have decided in the cases cited below, if a client fails over time to pay a lawyer’s fees, and that failure continues after a lawyer provides a reasonable warning to the client, the lawyer may be permitted to withdraw.  In effectuating a withdrawal, a lawyer should do so in a manner that minimizes any prejudice to the client.”

Model Bar Rule 1.16 related to the lawyer’s duty to maintain confidentiality 

“Neither Rule 1.6(b) nor the Comments expressly refer to motions to withdraw for unpaid fees. The Comments do, however, recognize that some disclosure of confidential client information otherwise protected by Rule 1.6(a) is permitted in fee-collection suits by lawyers, based on the “claim or defense” exception in Rule 1.6(b)(5).  Similarly, motions to withdraw based on a client’s failure to pay fees are generally grounded in the same basic right of a lawyer to be paid pursuant to the terms of a fee agreement with a client. Nonetheless, courts have differed widely as to whether any specific information regarding a lawyer’s reasons for seeking withdrawal is required in a motion to withdraw, and if so, how much.”

Limiting any required disclosures of confidential information to mitigate harm/prejudice to clients 

The opinion also discusses the requirements to limit disclosures to mitigate harm/prejudice to the client.  “Comment [16] to Rule 1.6 provides that disclosures under Rule 1.6(b) are permitted only to the extent the lawyer reasonably believes necessary to accomplish the purpose specified.  Of course, where practicable, a lawyer should first seek to persuade the client to take suitable action to remove the need for the lawyer’s disclosure. When such persuasion is not practicable or successful, and disclosure of some confidential information is required, ‘If the disclosure will be made in connection with a judicial proceeding, the disclosure should be made in a manner that limits access to the information to the tribunal or other persons having a need to know it and appropriate protective orders or other arrangements should be sought by the lawyer to the fullest extent practicable.’   Thus, Comment [16] anticipates the use of in camera submissions for disclosures where any of Rule 1.6(b)’s exceptions may apply. The situation is similar to discovery disputes over claims of privilege, whereby competing claims are often resolved by a court’s review in camera of the documents at issue and such procedures can help reconcile the competing issues involved in ruling on motions to withdraw as well.

The opinion’s final summary paragraph states:  “In moving to withdraw as counsel in a civil proceeding based on a client’s failure to pay fees, a lawyer must consider the duty of confidentiality under Rule 1.6 and seek to reconcile that duty with the court’s need for sufficient information upon which to rule on the motion. Similarly, in entertaining such a motion, a judge should consider the right of the movant’s client to confidentiality. This requires cooperation between lawyers and judges. If required by the court to support the motion with facts relating to the representation, a lawyer may, pursuant to Rule 1.6(b)(5), disclose only such confidential information as is reasonably necessary for the court to make an informed decision on the motion.”

Bottom line:  All lawyers must be aware of the ethics rules, issues, and requirements surrounding client confidentiality when a lawyer is withdrawing from representation due to the client’s failure to pay the fee and this opinion provides a good overview.  The fact that the client has failed to pay is confidential in itself and the lawyer should not include any client confidential information in the motion to withdraw and should only provide the information to the court if necessary or if ordered to do so by the judge.  If the court orders the lawyer to provide confidential information, the lawyer should consider an in camera appearance before the judge with the client and excluding the opposing counsel to preserve confidentiality, if plausible.

Be careful out there.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

29605 U.S. Highway 19 N. Suite 150

Clearwater, Florida 33761

Office (727) 799-1688

Fax     (727) 799-1670

[email protected]


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