CHANGE OF COUNSEL

This is an issue that came up in a recent consultation. Client wanted to change counsel but old counsel would not release files to Client because of unpaid legal fees. Here is the latest New York State Bar Association Ethics Opinion on this issue which is under the old Rules of Professional Responsibility:

"Opinion 766 — 9/10/03 (35-02)- New York State Bar Association Committee on Professional Ethics - September 10, 2003

Topic: Disposition of files of former client Overrules: N.Y. State 398
(1975)

QUESTION

What is a lawyer's obligation to a former client who requests the files
that were generated in the course of the prior representation?

OPINION DR 9-102(C) provides:

A lawyer shall:

* * * (4) Promptly pay or deliver to the client . . . as requested by
the client . . . the funds, securities, or other properties in the
possession of the lawyer which the client . . . is entitled to
receive.

The question of which "funds, securities, or other properties in the
possession of the lawyer" the client (or successor counsel) is entitled to
receive is generally a question of law, not ethics. See N.Y. State 623
(1991) ("Which documents may be deemed to belong to the lawyer is not
always easy to ascertain; in certain instances, the lawyer's ownership of
such documents may be a complex issue of both law and fact."); Nassau Bar
Op. 94-19 (funds in IOLA account); Nassau Bar Op. 96-13 (funds in escrow
account). The duty to deliver "to the client all papers and property to
which the client is entitled" is also a requirement of withdrawal from
employment. See DR 2-110(A)(2).

Accordingly, the Bar's attention is directed to Sage Realty Corp. v.
Proskauer Rose Goetz & Mendelsohn, 91 N.Y.2d 30 (1997), in which the
Court of Appeals abandoned the distinction "between documents
representing the `end product' of an attorney's services, which belong to
the client, and the attorney's `work product' leading to the creation of
those end product documents, which remains the property of the attorney,"
opting instead for the "majority" view wherein, "upon termination of the
attorney-client relationship, where no claim for unpaid legal fees is
outstanding," the client is "presumptively accord[ed] . . . full access
to the attorney's file on a represented matter with narrow exceptions."
91 N.Y.2d at 34 (citations omitted). The Court cited the final draft of
the American Law Institute Restatement (Third) of the Law Governing
Lawyers § 58 (proposed final draft No. 1, 1996), as follows:

The draft Restatement provides that a former client is to be accorded
access to "inspect and copy any documents possessed by the lawyer
relating to the representation, unless substantial grounds exist to
refuse" (id., § 58[2])

[emphasis supplied].

Even without a request, an attorney is obligated to deliver to the
client, not later than promptly after representation ends, "such
originals and copies of other documents possessed by the lawyer relating
to the representation as the . . . [former] client reasonably needs"
(id., § 58[3], comment d). 91 N.Y.2d at 35. The Committee recognizes
that, consistent with the now rejected "minority view," N.Y. State 398
(1975) suggested that "the client is not entitled to require delivery of
the firm's work product" unless, in the context of the particular
circumstances, the "firm's duty" to the former client or the
"professional courtesy" to be accorded to successor counsel, "are
necessary" to guard the client's interest" (citations omitted).

To the extent that N.Y. State 398 thus reflects a presumption of
non-accessibility that a former client must overcome with respect to a
certain class of documents, that view has been plainly rejected by the
Court of Appeals in Sage Realty and is no longer valid. See also Gamiel
v. Sullivan & Liapakis, P.C., 289 A.D.2d 88 (2001); Getman v. Petro
& Ingalsbe, 266 A.D.2d 688 (1999).

With regard to who bears the cost of file assembly and delivery, we
also note the Court of Appeals statement in Sage Realty that "as a
general proposition, unless a law firm has already been paid for
assemblage and delivery of documents to the client, performing that
function is properly chargeable to the client under customary fee
schedules of the firm, or pursuant to the terms of any governing retainer
agreement." 91 N.Y.2d at 38. Of course, the fee for such services may not
be excessive. DR 2-106(A). See also Deane v. Skadden, Arps, Slate,
Meagher & Flom, N.Y.L.J., Aug. 17, 1998 (Sup.Ct. N.Y. County).

CONCLUSION

As a matter of ethics, upon request by a former client, a lawyer must
promptly turn over or provide access to the files which the former client
is entitled to possess. As a matter of New York law, a former client is
entitled to any document related to the representation unless substantial
grounds exist to refuse access. The lawyer may charge such former client
reasonable fees for assembling and delivering such files, as reflected by
customary fee schedules or any governing retainer agreement."