File Delivery

Vermont Supreme Court addresses a lawyer’s duty to deliver “the file.”

Michael 3 Comments

What is “the file?”

Summary

In late February, the Vermont Supreme Court issued this opinion in which it defined “the file.”  The opinion puts Vermont lawyers on notice as to what must be delivered to the client upon the termination of the representation.  For those of you who don’t have time to read this entire post, the answer is the entire file, but for documents that fall within the limited exceptions set out in Section 46 of the Restatement (Third) of the Law Governing Lawyers.

Background

The duties to safeguard and to deliver the file are rooted in V.R.Pr.C. 1.15(a) and V.R.Pr.C. 1.16(d).  The former requires a lawyer to safeguard client property. The latter states that:

  • “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 employment of other counsel, surrendering papers and property to which the client is entitled and refunding any advance payment of fee or expense that has not been earned or incurred.”

The profession has long endeavored to identify and define the “papers and property to which the client is entitled.” Must a lawyer deliver everything that is in the file? Or, is there material in the file to which the client is not entitled?  Prior to the Court’s recent opinion, there’s not been much guidance in Vermont.

Two years ago, I posted Deliver The File. In it, I suggested that Rule 1.16(d) can be traced back to David Hoffman’s 1836 publication of 50 Resolutions in Regard to Professional Deportment.  To my knowledge, Hoffman’s resolutions are the earliest known American guidelines for attorney conduct.  His 30th resolution:

  • “After a cause is finally disposed of, and all relation of client and counsel seems to be forever closed, I will not forget that it once existed, and will not be inattentive to his just request that all of his papers may be carefully arranged by me, and handed over to him. The execution of such demands, though sometimes troublesome, and inopportunely or too urgently made, still remains a part of my professional duty, for which I shall consider myself already compensated.”

In 1991, the VBA’s Professional Responsibility Committee issued Advisory Opinion 91-03.  The Committee declined to “define what property a client is entitled to have.” However, it noted with approval an informal ABA advisory opinion “that an attorney must return: (1) all of the property delivered to the attorney by the attorney’s client; (2) the ‘end product’ of the attorney’s work; and (3) all other material which is useful to the client in fully benefiting from the services of the attorney.”  The VBA opinion tacitly endorsed the ABA’s position that “an attorney need not deliver the attorney’s internal notes generated primarily for the attorney’s benefit in working on the client’s problem.”

In July 2015, the ABA’s Standing Committee on Ethics and Professional Responsibility issued Formal Opinion 471.  It lists the papers that a lawyer is and is not required to deliver. The Committee advised that ABA Model Rule 1.16 does not require a lawyer to provide a client with material generated for the lawyer’s own purpose in working on the client’s matter.

As bar counsel, I don’t get many inquiries asking “what is the file?” To the extent I do, they’re almost always limited to “do I have to include my notes?” 

My reply has always been along these lines: “I don’t know what Disciplinary Counsel, a hearing panel, or the Supreme Court would say.  But here’s what the VBA and ABA have advised.”  Also, in that I view my role as assisting lawyers to manage risk, I often add what I wrote in the blogpost linked above: “there’s nothing wrong with erring on the safe side and delivering the ‘entire file’ as opposed to ‘end product.’”

Which brings me back to February’s decision from the Vermont Supreme Court. 

Delivering the entire file is no longer “erring on the safe side.”  With limited exceptions, it’s the rule.

The Opinion

The case involved a dispute between an attorney and former client. As noted in the Supreme Court opinion, in 2015, the former client filed a disciplinary complaint alleging that the attorney had not delivered the entire file.  Per the opinion, “Bar counsel determined that attorney did provide client with a copy of the file and that the Rules of Professional Conduct did not require him to provide another copy.”  Thus, the complaint was closed.

In 2018, the former client sued the attorney in Vermont Superior Court. The former client alleged that by failing to deliver the entire file, the attorney had converted the former client’s property.  The former client sought an order declaring that he owned the entire file and compelling the lawyer to deliver it.  

In response, the attorney asserted that he had delivered everything to which the former client was entitled, some of it more than once, and that anything that had not been delivered was papers or property that the client was not entitled to receive. The trial court entered summary judgment in favor of the attorney.

On appeal, the Supreme Court affirmed in part, and reversed in part. 

The papers and property that the client sought fell into four categories.  The Court affirmed the trial court’s entry of summary judgment with respect to two of the categories, concluding that the former client was not legally entitled to the papers and property he sought. The Court remanded the former client’s claims in the two other categories.  

On one, the Court concluded that there exists a question of material fact as to whether the former client received everything to which he was entitled.  On the other, the Court determined that there is a question of material fact as to whether the client is entitled to a paper copy instead of an electronic copy.

For today’s purposes, and going forward, the key takeaway is the first line of paragraph 13:

  • “We hold that client owns the entire contents of the file, subject to certain exceptions.”

In reaching its conclusion, the Court analyzed the approaches taken in other jurisdictions, as well as the standard set out in Section 46 of the Restatement (Third) of the Law Governing Lawyers. The Court stated:

  • “We agree with the majority approach as set forth in the Restatement, and conclude that a client’s entire file, with narrow exceptions as identified in § 46, belongs to the client and upon request, should be turned over to the client upon termination of representation.”

Section 46 of the Restatement deals with “Documents Relating to a Representation.”  For today’s purpose, § 46 (3) is the critical paragraph:

  • (1) A lawyer must take reasonable steps to safeguard documents in the lawyer’s possession relating to the representation of a client or former client.
  • (2) On request, a lawyer must allow a client or former client to inspect and copy any document possessed by the lawyer relating to the representation, unless substantial grounds exist to refuse.
  • (3) Unless a client or former client consents to nondelivery or substantial grounds exist for refusing to make delivery, a lawyer must deliver to the client or former client, at an appropriate time and in any event promptly after the representation ends, such originals and copies of other documents possessed by the lawyer relating to the representation as the client or former client reasonably needs.
  • (4) Notwithstanding Subsections (2) and (3), a lawyer may decline to deliver to a client or former client an original or copy of any document under circumstances permitted by § 43(1)

Conclusion

We have clarity.  But for the limited exceptions set out in § 46 of the Restatement, the client owns the entire file. 

In the notes below, and by reference to the comments to § 46, I address three of the more common inquiries I receive. 

Notes

  1. Per Comment b, the duty to safeguard documents is not extinguished by the termination of the representation. Rather, “[i]t continues while there is a reasonable likelihood that the client will need the documents, unless the client has adequate copies and originals, declines to receive such copies and originals from the lawyer, or consents to disposal of the documents.”
  2. Per Comment c, a lawyer may withhold documents if delivery would violate a duty that the lawyer owes to another. The comment states “for example, if a court’s protective order had forbidden copying of a document obtained during discovery from another party, or if the lawyer reasonably believed that the client would use the document to commit a crime.”  
  3. Per Comment c, “[a] lawyer may refuse to disclose to the client certain law-firm documents reasonably intended only for internal review, such as a memorandum discussing which lawyers in the firm should be assigned to a case, whether a lawyer must withdraw because of the client’s misconduct, or the firm’s possible malpractice liability to the client. The need for lawyers to be able to set down their thoughts privately in order to assure effective and appropriate representation warrants keeping such documents secret from the client involved. Even in such circumstances, however, a tribunal may properly order discovery of the document when discovery rules so provide. The lawyer’s duty to inform the client can require the lawyer to disclose matters discussed in a document even when the document itself need not be disclosed.”

Legal Ethics

When a client asks you not to keep a copy of the file.

Michael

File retention and delivery remain among the most asked questions.  I’ve blogged on each:

A quick recap:

  1. Upon the termination of a representation, Rule 1.16(d) requires a lawyer to surrender “papers and property to which the client is entitled.”
  2. The client is entitled to “the file.”
  3. A lawyer may keep a copy of the file.
  4. A lawyer’s malpractice policy might include a provision that requires a lawyer to keep a copy of the file.

Today’s question: what to do if a client directs a lawyer not to keep to a copy of a the file?

I don’t recall ever being asked the question.  A few weeks ago, however, the New York State Bar Association looked at the issue in NYSBA Ethics Opinion 1164.

Here’s the context of the inquiry:

  • Lawyer represented Client in dispute with Former Employer;
  • Client provided Lawyer with digital data related to the dispute;
  • Former Employer alleged that Client had misappropriated propriety information, and that some of it was in the data that Client had provided to Lawyer;
  • Client terminated Lawyer, and hired new counsel;
  • Lawyer forwarded the file, but kept a copy, including back-ups of the digital data;
  • Client and Former Employer settled;
  • the settlement required Client to “retrieve and destroy” all of the digital data;
  • Client asks Lawyer to destroy the digital data.

Lawyer requested an advisory opinion, and asked two questions:

  1. Does Lawyer have an obligation to delete/destroy the digital data provided by the client?
  2. May Lawyer condition destruction upon (a) obtaining a release & indemnification from client; and (b) keeping an inventory of the data?

The NYSBA’s response:

  • A lawyer has a valid interest in keeping a copy of a former client’s file.
  • The general rule is that a lawyer may do even over a former client’s objection.
  • In New York, a lawyer may condition not keeping a copy on the former client providing a release.
  • The lawyer’s interesti in keeping a copy of the file is not unqualified.
  • There may be times when “extraordinary circumstances” exist that favor requiring a lawyer to comply with a former client’s instruction not to keep a copy of the file.
  • A lawyer may condition compliance with a former client’s instruction to destroy copies of the file on obtaining a release and hold-harmless agreement from the former client.
  • A lawyer may condition compliance with a former client’s instruction to destroy copies of the file on creating and keeping an inventory of the material provided to the lawyer by the former client.

The opinion specifically declines to list an “exhaustive catalog” of the “extraordinary circumstances” that will require a lawyer to comply with a former client’s instruction not to keep a copy of the file.  However, it provides some guidance. Factors to consider include:

  • the strength of the former client’s claim to ownership of the information;
  • the sensitivity of the information;
  • the relationship between “sensitivity” and the purpose of the representation;
  • the “legitimacy” of the client’s instruction to destroy;
  • the difficulty associated with complying with the former client’s instruction;
  • the degree to which the lawyer will be subject to liability in the future; and,
  • the availability of feasible alternatives to protect the lawyer in the future.

I have three thoughts.

First, it’s not entirely clear to me how to apply the factors in any given case.  Rather, it strikes me that the opinion might be driven by the fact that dispute focused on the proprietary nature of the very data that Client provided to Lawyer.

Second, while not addressed by the opinion, I’d suggest that a lawyer who asks a former client for a release and hold-harmless agreement should (1) advise the former client, in writing, to seek independent legal advice; and, (2) give the former client a reasonable period of time to do so.  See, V.R.Pr.C. 1.8(h)(2).

Third, it likely makes sense to include your carrier in any decision on whether to destroy copies of information provided by a former client.

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File Retention: How long?

Michael

Yesterday, I urged lawyers to resolve to deliver the file.  The post links to ABA Formal Opinion 471, an opinion that addresses the question “what is the file?”

A Twitter follower noted that natural follow-up to yesterday’s blog is one that addresses file retention.  How long must a lawyer keep a closed file?

It’s a common question.  To paraphrase another Irish guy, it’s not uncommon for me to hear a frustrated lawyer say something like:

  • I can’t believe the files in here.  I can’t close my eyes and make them disappear!  How long? How long must I sing this song? How long? How lonnnnnnnggggg……?

I’ll cut to the chase: I don’t have a good answer for you.  I’ll do my best.  But, I won’t be offended if you finish this post frustrated that you still haven’t found what you’re looking for.

Again, as I stressed yesterday, Rule 1.16(d) makes it clear that the duty to deliver the file kicks in upon the termination of the representation.  Delivering it moots the question of how long to keep it.  Of course, you’d be well-served to keep a copy for yourself, if only to defend against a potential disciplinary complaint or malpractice claim.

Once delivered, the only retention requirement in the rules appears in Rule 1.15(a)(1): records of funds & property must be maintained for 6 years from the termination of a representation.  The file is client property.  Thus, some jurisdictions have interpreted the rule to require lawyers to maintain a record of what happened to client files.  Even if not affirmatively required by the rule, keeping a disposition log is a good idea.

Now the hard part: what about the file that, for whatever reason, isn’t delivered upon the termination of the representation?

That’s a question that we haven’t answered.

Twenty years ago, the VBA’s Professional Responsibility Committee issued advisory opinion 97-08.  Here’s the synopsis:

  • “A lawyer must exercise discretion in determining the necessary length of time for the subsequent retention or disposition of a client’s file. The contents of certain files may indicate the need for a longer retention period than do the contents of files of similar age based on their relevance and materiality to situations which may foreseeably arise. Moreover, in disposing of a client’s files, a lawyer should protect the confidentiality of its contents. If possible, notice may be given the client as to the date of disposition, affording the client the opportunity to take possession of all
    or part of the material in the file.”

The VBA Opinion is consistent with the general consensus that “it depends.”  Three years ago, the Kentucky Bar Association’s Legal Ethics Opinion 15-01,  noted that the prevailing view is that a reasonable period to retain a file is between 5 and 10 years.

I understand that one-size doesn’t fit all and that, with closed client files, “it depends.”  Still, I’d like to provide relief to lawyers who’ve run out of physical & electronic storage space, or who simply can’t afford to maintain it any longer.

As I mentioned yesterday, I’ve asked the Professional Responsibility Board to consider a rule that would define “the file.”  The same rule would authorize lawyers to destroy files after 6 years, subject to certain exceptions.  The rule that the Board is considering is quite similar to this rule that was proposed last year in Massachusetts.

Until then, here are two things that I think are critical:

  1. If you haven’t already done so, build a retention policy into your standard representation agreement; and,
  2. Check with your carrier before destroying or disposing of a closed file.

Aside: real estate lawyers, #2 includes checking with your title insurer.

Finally, and as critical as the two thoughts expressed above, whether you pick a 6, 7, or 10-year retention policy, remember that there are some things that should never be destroyed, or that should be retained beyond your standard retention period.  Some (non-exhaustive) examples:

  • documents provided by the client;
  • anything that it’s reasonable to conclude the client might need;
  • files with original wills, deeds, trust documents, and estate planning documents;
  • criminal files;
  • files with pre-nups,
  • files for clients who had young children when support & custody were finalized;
  • files for which the statute of limitations on malpractice has yet to run;
  • files in which the client was a minor, and will remain a minor beyond the expiration of your file retention period;
  • adoption files;
  • Corporate books & records.

This list goes on.

I don’t want to make this blog too long.  If you have questions about file retention, call me.  If you want me to come meet with you and others at your firm, I will.  Until then, a few closing thoughts:

  • generally, it’s okay to store closed files electronically;
  • when disposing of or destroying files, do so in a manner that competently maintains the confidentiality of the client’s information.

Some other resources:

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Deliver the file.

Michael 3 Comments

Last November, I posted The 50 Original Rules.  It’s a post that briefly recaps the history of the conduct rules that apply to lawyers.  Best I can tell, the earliest record of guidelines for attorney conduct in the United States is David Hoffman’s 1836 publication of his Fifty Resolutions in Regard to Professional Deportment.  My post includes each of Hoffman’s 50 resolutions.

181 years later, it’s somewhat fascinating to me how many of Hoffman’s resolutions continue to resonate.  Many are embedded in the current rules and our collective professional conscience.  Given my fascination, I’ve resolved to blog about the continued relevance of Hoffman’s resolutions, taking them one at a time.  To date, I’ve posted:

Today, I’m focusing on Hoffman’s Resolution #30:

  • “30.  After a cause is finally disposed of, and all relation of client and counsel seems to be forever closed, I will not forget that it once existed, and will not be inattentive to his just request that all of his papers may be careful arranged by me, and handed over to him. The execution of such demands, though sometimes troublesome, and inopportunely or too urgently made, still remains a part of my professional duty, for which I shall consider myself already compensated.”

In other words, deliver the file.

Rule 1.16(d) is the modern equivalent of Resolution 30.  The rule requires a lawyer, upon the termination of a representation, to surrender papers & property to which the client is entitled. .

Of course, it’s not always that simple.  To what is a client entitled? In other words, what is “the file”?

Vermont’s rules don’t define “the file.”  In 1991, the VBA’s Professional Responsibility Committee issued Advisory Opinion 91-03.  The Committee declined to “define what property a client is entitled to have.” However, it noted with approval an informal ABA opinion that “determined that an attorney must return: (1) all of the property delivered to the attorney by the attorney’s client, (2) the ‘end product’ of the attorney’s work; and (3) all other material which is useful to the client in fully benefiting from the services of the attorney.”   The VBA opinion tacitly endorsed the ABA’s position that “an attorney need not deliver the attorney’s internal notes generated primarily for the attorney’s benefit in working on the client’s problem.”

In short, the VBA opinion suggests that Vermont is what bar counsel-types refer to as an “end-product” state.

In July 2015, the ABA issued Formal Opinion 471.  In it, the ABA reaffirmed its long-standing position that, at a minimum, a lawyer has a duty to deliver end-product, and that end-product includes:

  • anything provided by the client;
  • legal documents filed with a tribunal – or those completed, ready to be filed, but not yet filed;
  •  executed instruments;
  • court orders;
  • correspondence to or from the lawyer in connection with the representation, including email and other electronic correspondence that has been retained;
  • discovery & exhibits, including interrogatories and their answers, deposition
    transcripts, expert witness reports and witness statements, and exhibits;
  • legal opinions issued at the client’s request; and,
  • reports, evaluations, or assessments paid for by the client.

By contrast, the ABA concluded that Model Rule 1.16(d) does not require a lawyer to provide a client with material generated for the lawyer’s own purpose in working on the client’s matter.  For instance,

  • drafts & markups;
  • internal research & legal memoranda;
  • personal notes;
  • hourly billing records;
  • internal conflicts checks;
  • notes regarding ethics consults;
  • a general assessment of the client’s matter; and,
  • documents that might reveal the confidences of other clients.

However, the ABA cautioned that if the professional relationship is terminated before the matter has been completed, the duty to protect the [now] former client’s interests might require the lawyer to turn over material that the lawyer prepared for the lawyer’s own purpose.

Again, Vermont’s rules provide no guidance.  So, with that in mind, the Professional Responsibility Board is considering whether to recommend that the Court adopt a rule that defines the file.  I’ve asked the Board to work from a definition that was proposed last year in Massachusetts.

For now, there’s nothing wrong with erring on the safe side and delivering the “entire file” as opposed to “end product.” Indeed, New Hampshire is an “entire file” state.  Or, call me and we can chat about what to include when you deliver “the file.”

What’s most important is to pick an approach.  Rule 1.16(d) is not optional. It very clearly mandates delivery of the file upon termination of the representation.

Time consuming?  Maybe.  On that note, however, Hoffman was wise.  As time-consuming as he recognized file delivery might be, he also recognized that it was part of his professional duty.  It lives on as part of yours.

Deliver the file.

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