Disposition of Closed Client Files
A lawyer who is entrusted with the property of a current or former client has certain ethical obligations with respect to its disposal: (1) valuable client property must be promptly delivered to the former client or safeguarded indefinitely; (2) other client property may, based on the former client’s direction, be delivered to the former client, stored or destroyed; (3) if it is not possible to locate the former client, non-valuables that are not reasonably necessary to protect a client’s interest may be destroyed five years after the termination of representation; and (4) non-valuables not belonging to a former client or third party may be destroyed at any time.
- Rule 1.15 (Safekeeping Property)
- Rule 1.16(d) (Declining or Terminating Representation)
- Rule 1.8(i) (Conflict of Interest: Prohibited Transactions)
- Rule 3.4(a) (Fairness to Opposing Party and Counsel)
The inquirer is a solo practitioner in Washington, D.C. who represented a multinational corporate client for more than twenty years before the representation was terminated and another law firm began representing the client. Upon termination of representation, the inquirer transferred to the successor law firm all client files relating to pending matters as well as corporate documents and originals of documents provided to him by the client. The inquirer retained in an off-site commercial storage facility the former client’s closed or “dead files” including notes, memoranda, pleadings, and other items prepared by him in the course of the twenty-year representation as well as research files containing opinions, articles and other publicly available material, duplicate copies of correspondence between the attorney and former client, and materials received from third parties. According to the inquirer, the client was provided during the course of representation with copies of these materials. Furthermore, the inquirer states that there are no valuable items in the former client’s closed files, and asserts there would be “no foreseeable prejudice or harm to the former client’s interests if the files are not returned to the client.”
The inquiring attorney has begun to phase out his law practice, and no longer wishes to continue to pay storage fees for his former client’s closed files. Accordingly, the attorney recently wrote his former client and indicated his desire to dispose of the closed files, suggesting three possible alternatives: (1) delivery of the files to the former client’s successor law firm in Washington, D.C.; (2) retention of the files in the off-site storage facility with the former client responsible for paying the storage fees; or (3) destruction of the files under secure conditions.
The former client responded that it wished to have the files shipped from Washington, D.C. to it’s New York office. The inquirer asserts that complying with this request would cost him considerable time, effort and expense. Thus, the attorney asks whether he may ethically require the client to: (a) reimburse him for all direct costs associated with the transfer of the closed files; and (b) compensate him for the time expended in reviewing, and/or preparing the closed files for delivery.
The Legal Ethics Committee last addressed a lawyer’s ethical obligations relating to the disposition of former clients’ closed or “dead” files in 1989, prior to the effective date of the current D.C. Rules of Professional Conduct (“D.C. Rules”). Given the subsequent adoption of the D.C. Rules, numerous inquiries by members of the Bar, and recent ethics opinions in other jurisdictions, the Committee believes it appropriate to revisit a lawyer’s responsibilities in this regard. Specifically, this opinion attempts to clarify the parameters of a “client file,” to suggest reasonable guidelines to ensure the ethical disposition of closed client files in accordance with the D.C. Rules, and to address concerns regarding the costs of transferring, storing, reviewing, or destroying former client files.1
Lawyers do not have a general duty to preserve permanently all files of their former clients. D.C. Bar Opinion 206 (1989); ABA Informal Op. 1384 (1977). Obviously, neither solo practitioners nor the largest law firms have unlimited office space or other resources to accommodate all former client files on an indefinite basis.2 On the other hand, a lawyer has an ethical obligation to current and former clients to prevent the premature or inappropriate destruction of client files. D.C. Bar Opinion 205 (1989). Attempting to balance these two legitimate interests has created understandable uncertainty among members of the Bar, particularly with respect to closed files of a former client.
The Committee has noted in the past, and continues to believe, that the overriding consideration when disposing of closed files must be the lawyer’s responsibility to protect his former client, and not the former client’s property interests in any particular item or document in such files or issues of the lawyer’s personal convenience. D.C. Bar Opinion 206 (1989), D.C. Bar Opinion 168 (1986). However, in light of the fact that the D.C. Rules governing the disposition of client files are drafted in terms of the “property to which the client is entitled,” see D.C. Rule 1.16(d); D.C. Rule 1.15(b), some discussion of the major categories of property that may constitute a client file is necessary to clarify the lawyer’s ethical responsibilities.
Defining a Client File
In a previous opinion interpreting the D.C. Code of Professional Responsibility, we adopted the “entire file” approach to the disposal of a client file. D.C. Bar Opinion 168 (1986). Under this approach, before a lawyer withdraws from representation he must deliver to the client (or his or her legal representative) the entire contents of the client’s file unless withholding any items would “not result in foreseeable prejudice to the former client.”3 Id. D.C. Bar Opinion 206 retained the “foreseeable prejudice to the former client” standard, but also explained that not all materials within the client file necessarily impose the same ethical obligations on a lawyer. This opinion divided the closed client file into three categories: valuable property, work product and other client property. D.C. Bar Opinion 206 (1989). In order to avoid the potential for confusion arising from reliance on property law concepts, we now define a more workable means of segregating property within a client file that conforms with the standards used in several other jurisdictions.
1. Valuable Property Subject to Rule 1.15(b)
The disposition of property in a client file that has intrinsic value or that directly affects valuable rights, such as securities, negotiable instruments, deeds, settlement agreements, and wills,4 is governed by D.C. Rule 1.15(b), Safekeeping Property, which provides:
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 is entitled to receive and, upon request by the client or third person, shall promptly render a full accounting regarding such property, subject to Rule 1.6.In D.C. Bar Opinion 206, we noted that implicit in this duty to promptly deliver valuable property to the client or third person to whom it belongs is the obligation to retain such property indefinitely until it can be returned to its rightful owner, the owner’s legal representative, or a successor in interest. Thus, it would be unethical for a lawyer to destroy valuables contained in a client file.5 We also recognize, however, that it may be impractical for a lawyer to store valuable property indefinitely. Therefore, after termination of representation and a lawyer’s diligent but unsuccessful effort to deliver promptly valuables contained in a client file to the client or a third party (or their legal representatives or successors), the lawyer may invoke any state law procedures for escheat funds or unclaimed property depositories.6 In the absence of such alternatives, the lawyer is obligated to maintain the valuables until they can be delivered to the client or third party or appropriate representative.7
2. Other Client Property Subject to Rule 1.16(d)
Rule 1.16(d) governs all other client property in a former client’s closed file. Rule 1.16(d), Declining or Terminating Representation, provides:
In connection with any termination of representation, a lawyer shall take timely steps to the extent reasonably practicable to protect a client’s interests, such as giving reasonable notice to the client, allowing time for employment of other counsel, surrendering 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 relating to the client to the extent permitted by Rule 1.8(i).In order to avoid uncertainty regarding the treatment of client files, it is sound law practice management for lawyers to make arrangements with their clients for the disposal of clients’ files either in the initial representation agreement or in the agreement terminating the attorney-client relationship. See Wisconsin Ethics Op. E-98-1 (1998). Consistent with the remainder of this opinion and Rule 1.16(d), such an agreement may provide for the immediate delivery of the client’s files upon termination of the representation, storage of the closed files for a specified period of time and then destruction of the files, or the immediate destruction of the files following completion of the representation. Similarly, the parties’ respective obligations regarding delivery, storage or destruction costs may be set forth in this agreement.
In the absence of such an agreement, however, the lawyer must be guided by the provisions of Rule 1.16(d). Upon termination of representation the lawyer should make a reasonable and good-faith effort to notify the former client of the existence and contents of the client’s files and follow the client’s instructions whether to hold, return or destroy the files. See D.C. Bar Opinion 206.8 This process is obviously easiest to implement if undertaken immediately following the termination of the representation, but there may be circumstances where this is not possible.
More difficult problems associated with the disposal of former clients’ files arise when some period of time has passed since the end of the representation and either the client cannot be located or the client simply declines to respond to the lawyer’s request for instructions regarding the disposition of the client’s closed files. Because the ethical responsibility to do what is “reasonably practicable to protect a client’s interests” persists even in the case of a former client, see Rule 1.16(d), there is no hard and fast rule that resolves this issue in all cases. Many jurisdictions, however, have recommended a minimum time period in which a lawyer should maintain the closed files belonging to his former client.9
We believe, absent special circumstances,10 that a five year retention period beginning at the termination of representation is generally sufficient to protect the client’s interests with respect to closed files.11 Therefore, after unsuccessfully attempting to obtain instructions from the former client or his or her legal representative,12 a lawyer who concludes that further retention of a former client’s closed files is not “reasonably practical to protect a client’s interest” may destroy the files five years after the termination of representation. Relying on ABA Formal Op. 1384 (1977), we suggest that the following guidelines should be considered when determining which materials in the closed files should not be destroyed but retained under Rule 1.6(d) beyond the five year period:13
- A lawyer should use care not to destroy any document which the lawyer has a legal obligation to preserve.
- A lawyer should use care not to destroy or discard information that the lawyer knows or should know may still be necessary or useful in the assertion or defense of the client’s position in a matter for which the applicable statutory limitation period has not expired.
- A lawyer should use care not to destroy or discard original documents provided by the client when they are not otherwise filed or recorded in the public records.
- Copies of documents that previously have been delivered to the client in the course of representation may be destroyed if reasonable within the context of all the circumstances.
- Documents that are otherwise publicly available to the client may, if reasonable, be destroyed.
- Paper copies of documents that are stored on computer disk, CD-ROM, microfilm or a similar technology may be destroyed, provided the stored information is retrievable and the technology is not rendered obsolete over time by the fact that the equipment or hardware required to retrieve such document is no longer available.
- Any documents that the client would have no reasonable expectation for the lawyer to indefinitely preserve may also be destroyed.
- In disposing of a client’s closed file, a lawyer should take care to protect the confidentiality of the contents. See Rule 1.6 Confidentiality of Information (lawyer shall not knowingly reveal a confidence or secret of the lawyer’s client).14
- A lawyer should preserve, perhaps for an extended time, an index or identification of the files that the lawyer has disposed of or destroyed.15
Adopting an approach similar to the New York Bar, we believe that absent a legal obligation to the contrary, non-valuable property in the client’s closed file that does not clearly or probably belong to the client or a third party may be destroyed without consultation or notice to the client or third party.16 See New York Ethics Op. 623 (1991). This Committee, however, is not authorized to answer questions of law regarding the ownership of, or the property interest in, the contents of a closed client file. See “Preserving Client Files,” 27 Maryland Law. 52 (1994); Kentucky Ethics Op. E-300 (1985); ABA Informal Op. 1384 (1977). This decision should be made by the lawyer in accordance with the applicable laws of the governing jurisdiction.
Costs Related to the Disposal of Client Files
The inquirer here specifically has asked whether he may charge the former client for the direct costs associated with returning closed client files pursuant to the client’s directive. We believe that lawyer does not have an affirmative duty to pay for the delivery of files relating to the representation of a former client when the materials in the files are not reasonably necessary to protect the former client’s interest.17 Because the language in Rule 1.16(d) as distinguished from Rule 1.15(b) obligates a lawyer to merely surrender the client’s files, this means, absent an agreement to the contrary, that the lawyer may, in the case of files not necessary to protect a client’s interests or otherwise needed for continued representation,18 make the files available for pick-up or delivery at the client’s expense. Similarly, a lawyer instructed by the client to store any such files may charge the client for the costs of such storage.
The second specific inquiry is whether a lawyer may charge the former client for the time and effort expended segregating or reviewing materials in closed files upon termination of representation. As noted in New York Opinion 623, a lawyer has an ethical obligation to inspect the contents of closed files prior to disposition. Nonetheless, review of the files is being undertaken for the benefit of the client and, like other forms of client services, may be compensated by a reasonable fee. Thus, in the absence of an agreement to the contrary, a lawyer may charge the client a reasonable fee for the time incurred and other costs associated with file review. This is particularly appropriate when such review is made more complicated by the need to fulfill specific client instructions regarding the treatment of certain materials that may be contained in the client files. Good management practices during the course of the client representation, however, should be employed to minimize time and expense associated with reviewing voluminous client files. For example, detailed records kept during the course of representation by an attorney may prevent the need for a page-by-page review of all the former client’s files prior to disposition. If further review is necessary after the conclusion of the representation, non-lawyers working under the supervision of a lawyer also may assist in reviewing files or otherwise preparing them for disposition.
Under Rule 1.15(b), upon termination of representation, a lawyer should deliver promptly items of intrinsic value that belong to the former client or a third party. If such valuable property cannot be delivered, the lawyer must safeguard the valuables until they can be delivered, or if necessary, utilize available state law procedures for escheat funds or unclaimed property depositories.
Under Rule 1.16(d), upon termination of representation, a lawyer should notify the client of any other client property in the former client’s closed files and ascertain whether to retain, surrender or destroy such materials. In implementing the client’s instructions in this regard, absent agreement to the contrary, the lawyer may require the former client to pay the costs of delivery or storage of the files. If the client fails to respond to the lawyer’s request for instructions, after five years and a final attempt to notify the client, the attorney may destroy any materials “not reasonably necessary to protect a client’s interest.”
Inquiry No. 98-3-10
Adopted: July 15, 1998
- This opinion is intended to replace our previous opinions regarding the retention of client files. See D.C. Op. 206 (1989); D.C. Op. 168 (1986). Many of the views expressed in those earlier opinions, however, have been incorporated here.
- It has been recognized that the “substantial storage costs can affect the cost of legal services, and the public interest is not served by unnecessary and avoidable additions to the cost of legal services.” ABA Inf. Op. 1384 (1977).
- In contrast, some jurisdictions have
adopted the “end-product” approach, whereby the client
only owns the final results of the attorney’s work, i.e.,
pleadings, contracts, reports, etc., and the attorney owns the rest
of his work product. See, e.g., Corrigan v. Armstrong, Teasdale,
Schlafly, Davis & Dicus, 824 S.W.2d 92 (Mo. Ct. App. 1992);
ABA Inf. Op. 1376 (1977).
The “entire file” approach in the District of Columbia is consistent with D.C. Rule 1.8(i), which does not permit a lawyer to acquire a lien on any of the contents of the client file except that portion of work product within the file that has not been paid for. See Rule 1.8(i); D.C. Bar Opinion 250 (1995).
- While there is no indication in earlier opinions that deeds, wills and settlement agreements constitute the “other property” referred to in 1.15(b), due to the intrinsic value of such items, we find this interpretation is reasonable. Other jurisdictions have reached the same conclusion. See Wis. Ethics Op. E-98-1 (1998); 58 Ala. Law. 368 (1997); Mich. Ethics Op. R-12 (1991).
- This is the case regardless of whether the valuables belong to the client or to a third person, as Rule 1.15(b) makes clear.
- The availability of such procedures is a matter of state law. See, e.g., N.Y. Comp. Codes R. & Regs. tit. 22 § 1200.466(f-1) (1996) (money payable to a missing client may, by court order, be directed to the state’s Lawyers’ Fund for Client Protection); 58 Ala. Law. 368 (1997) (valuables belonging to a missing client preferably should be deposited with the court).
- The language in Rule 1.15(b) is significant
in this regard because it requires the lawyer to affirmatively “deliver” the
valuable property. See D.C. Bar Op. 206. We believe this word choice
implies that, absent an agreement to the contrary, the lawyer should
be responsible for any reasonable costs associated with promptly
returning the valuable property to its owner, or storing the valuables
for a reasonable time period should prompt delivery not be possible.
Additionally, we note that the requirement in Rule 1.15(a) that “complete records of such account funds and other property shall be kept by the lawyer and shall be preserved for a period of five years after termination of the representation,” refers only to the records of such property described in Rule 1.15(a) that were delivered to the client or other owner. This provision should not be construed as suggesting that the valuable property itself, if unable to be delivered in accordance with Rule 1.15(b), should only be preserved for five years following the termination of representation.
- Even if the client chooses to destroy the file, the lawyer still must review the files and withhold any documents that he may have a legal obligation to preserve. See, e.g., D.C. Rule 3.4 (lawyer shall not destroy evidence “if the lawyer reasonably should know that the evidence is or may be the subject of discovery or subpoena in any pending or imminent proceeding”); D.C. Bar Op. 119 (1983).
- See, e.g., Wis. Ethics Op. E-98-1 (1998) (recommending six year retention period); 58 Ala. Law. 368 (1997) (recommending six year retention policy); N.C. revised Proposed RPC 209 (1995) (recommending six year minimum retention period for closed files); Ill. Ethics Op. 94-19 (1995) (recommending five year retention period for former client files of legal aide agencies); Md. Ethics Op. 93-39 (1994) (recommending five year retention policy); Mich. Ethics Op. R-12 (1991) (recommending five year retention period for public defenders).
- Special circumstances that require a longer retention period may include, but are not limited to: files relating to a matter involving a minor who will not attain the age of majority within the next five years; estate planning files that may need to be maintained until after the death of the client and the expiration of the probate period; or tax files that may need to be retained longer. See Martin, How Long Do I Have to Keep Those Client Files Anyway, 21 Mont. Law. 5 (Sept. 1995); Inge, Handling & Retention of Clients’ Documents, Virginia Lawyer 10 (Dec. 1995).
- Several state bars apparently chose a retention period consistent with their jurisdictions’ preservation period for records of account funds as provided for in rules similar to D.C. Rule 1.15(a). The District of Columbia requires a five year retention period for such records of account funds. Thus, we believe that a five year period for the retention of former client files is sufficient, subject to the limitations described above.
- At a minimum, a reasonable attempt to reach the former client should include sending a letter to the client’s last known address and “wait[ing] a suitable period of time (perhaps six months)” for a response. Wis. Ethics Op. E-98-1 (1998).
- In previous opinions, the Committee, quoting language in former rule DR 2-110(a)(2) stated that the lawyer must consider whether destruction of documents would be “likely to prejudice the former client’s interests.” See D.C. Bar Op. 206. We believe instead that the new language in Rule 1.16(d) requiring a lawyer to retain or to return to the client or legal representative all materials “reasonably practicable to protect the client’s interest” is a more workable standard when applied consistent with the factors described above. Not only does this rule protect the former client’s best interest, but it also allows lawyers to account for the practical problems associated with the unnecessary retention of former clients’ files.
- Merely throwing the client files into the garbage presumably would not protect client confidentiality. On the other hand, shredding, incinerating or employing a commercial service that guarantees confidential disposal of documents would be sufficient. See Montana, Retention and Destruction of Client Files in a Law Firm, 25 Colo. Law. 47, 48 (Apr. 1996); Martin, supra note 10; Thar, How Long Should You Retain Client Files?, 83 Ill. Bar J. 649, 650 (Dec. 1995).
- Such an index should be sufficient to “provide the firm and any other investigators with all pertinent information regarding both protection of the client’s interests and the ultimate disposition of the file and its contents.” See Montana, supra note 14. Therefore, in addition to a list of files destroyed. the lawyer should at least retain a copy of the returned notice sent to the former client regarding the disposition of his or her closed files, or if applicable, a letter of consent from the client. See id.
- The lawyer still has a duty to preserve the confidentiality of these materials in accordance with D.C. Rule 1.6. See supra note 14.
- In the case of materials reasonably necessary to protect the former client’s interests, the lawyer may, for clients unable to pay for delivery of the files, have an obligation to pay the delivery charges. Cf. D.C. Rule 1.8(i) (attorney work product lien does not apply when client becomes unable to pay or when withholding work product would present a “significant risk to the client of irreparable harm”).
- See Cmt.  to Rule 1.16 (“a lawyer must take all reasonable steps to mitigate the consequences to the client”).