Two days late, but a two-fer nonetheless.
- Beware Changes to Wiring Instructions!
Here’s a post in today’s ABA Journal: BigLaw firm sued over $3M wire transfer to fraudster’s account. But for involving $3 million and a so-called “Big Law” firm, the scam was garden variety. No different than one that often targets Vermont lawyers, especially real estate practitioners, it was predicated on a change in wiring instructions.
As I’ve blogged here, here, here, here, and here, a change in wiring instructions should set off alarm bells. Further, if the change in wiring instructions comes by email, I suggest confirming the change by some other method than responding to the email.
Andy Mikell is State Manager & Title Counsel at Vermont Attorneys Title Corporation. In a prior blog, I used this quote from Andy to highlight the importance of using two-factor authentication to confirm changes to wiring instructions:
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- “We are telling folks that the ONLY appropriate 2nd factor authentication method is for the ‘Wiring Firm’: (a) to initiate the verification call; (b) to a phone number that they independently obtained/verified. In other words, it is NOT acceptable: (a) to receive a confirmatory phone call or (b) to call a phone number in the email which contains the requested wire change.”
Big Law should follow this blog.
- File Retention & Delivery
Over the past few weeks, I’ve heard from a few lawyers on the issue of file retention. Each started by saying “I have to keep the file for 6 years, right?”
Wrong.
The Vermont Rules of Professional Conduct do not specify a file retention period and never have. Rather, V.R.Pr.C. 1.16(d) states that “upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect a client’s interests, such as . . . surrendering papers and property to which the client is entitled.” In my opinion, the file is among “the papers and property to which the client is entitled.” So, as I’ve stated at CLEs and in this space, Deliver The File.
Nothing in Vermont’s rules affords a lawyer a 6-year window to deliver the file. Nothing in Vermont’s rules conditions file delivery upon the client’s request. Nothing in Vermont’s rules authorizes a lawyer to destroy an undelivered file 6 years after the representation ends.
Indeed, in 1997, the VBA’s Professional Responsibility Committee issued Advisory Ethics Opinion 97-08. While issued under the old Code of Professional Responsibility, the opinion remains helpful. The Committee’s conclusion is almost exactly what I might say at a seminar:
- “We cannot state that there is a specific time during which a lawyer must preserve files and, beyond which, he or she is free to destroy them. The sound exercise of good professional and business judgment should provide answers to most storage and/or retention questions that may arise.”
From there, the Committee listed factors a lawyer should consider prior to destroying a file. Again, many remain relevant today. In no particular order, here are thoughts & tips I’ve shared with lawyers:
- it’s okay to go paperless. But don’t destroy any important originals.
- once delivered, there’s no requirement to keep a copy of the file. But your liability policy might require you to, and it might be helpful to have a copy if a disciplinary complaint or malpractice claim is ever filed. Also, title insurers sometimes require agents to maintain copies of files.
- cull files for important originals before destroying. Especially if even one file might contain a will.
- Absent a client’s consent, anything that the client gives to the lawyer must be returned.
- give notice before destroying files. If not in the representation agreement itself, then again – even by publication – years later.
- Different types of cases require different retention periods. For more, see this opinion from the Kentucky Bar Association.
- A lawyer MUST keep records of client funds & property for 6 years after the termination of the representation. So, keeping a log of client files is a good idea.
For more, in 2018, I posted File Retention: How Long? Let’s see if anyone is still reading. In the 2018 blog, I wrote:
- “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?’”
Who is the “Irish guy” to whom I referred in the 2018 post?
And with that, I’m calling it a Thursday. Have a great night!
Ethical Grounds 