Ending the Lawyer-Client Relationship – Financial Considerations
The Natural Conclusion of the Retainer
When a lawyer is retained to assist with a specific matter (as opposed to an ongoing retainer) and the matter has been concluded, the lawyer-client relationship may come to a natural conclusion.
Where the matter concludes because the purpose for the retainer has been met, it is beneficial for the lawyer to provide the client with written communication indicating the matter has been concluded and no further services are contemplated. A final or “closing” letter should address the following:
- Confirmation that the services pursuant to the retainer have been performed.
- Return of any property belonging to the client.
- Confirmation of any additional steps to be taken by the client or any future deadlines that the client needs to be aware of.
- Confirmation that the matter is concluded.
- How long file materials will be retained by the lawyer, in accordance with the requirements of law society guidelines in the relevant jurisdiction.
Often the lawyer’s final letter will enclose a copy of the final account, which serves to reinforce that the retainer is concluded and the lawyer-client relationship is at an end.
The benefit of providing written confirmation upon conclusion of the matter is to ensure the client understands that the lawyer is not taking any further steps on their behalf. Further, from a conflicts perspective, the final closing letter is important, because it serves to provide evidence as to the point at which a client becomes a “former client”. When a client becomes a former client, the lawyer is not precluded from acting in manner that is adverse to the former client in future unrelated matters, unless the lawyer has relevant confidential information that may prejudice that client, or unless the new matter may involve the lawyer attacking or disputing prior work done by the lawyer.1
In many jurisdictions, a lawyer withdrawing from the record in a litigation proceeding must also serve notice of withdrawal to the court, and to the parties to the proceeding. Lawyers should carefully check the applicable rules or governing legislation to ensure requirements are met.
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Termination by the Client
A client can terminate the lawyer-client relationship at will.2 Where the client terminates the retainer, the lawyer should take the following steps:
- Determine whether the client is retaining new counsel.
- Prepare a final bill for the client to settle accounts.
- Remind the client of limitations or deadlines.
- Arrange for the transfer of the file to the client or to new counsel, except to the extent a solicitor’s lien is being asserted.
- File documentation confirming formal removal as lawyer of record, unless new counsel is filing a notice to advise they are coming on as lawyer of record.
- Prepare a closing letter confirming termination of the retainer.
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Withdrawing from Representation
While the client can terminate the lawyer at any time, lawyers do not have the same freedom to withdraw services from the client, and in general can only withdraw services for a good reason and on sufficient notice.3
A variety of circumstances constitute sufficient reason for a lawyer to withdraw from representation, including:
- If there has been a serious loss of confidence between a lawyer and their client.4 This can occur where a lawyer is deceived by a client, the client refuses to act upon the lawyer’s advice repeatedly or with respect to a substantive matter, or the lawyer is facing difficulty in obtaining instructions.
- If, after reasonable notice, the client fails to provide a retainer or to pay their account.5
- Where a client persists in instructing the lawyer to act contrary to professional ethics.6
- If the lawyer is not competent to continue to handle a matter.7
While the circumstances above may justify withdrawal of services, lawyers should make every effort to complete the retainer unless there is justifiable cause for terminating the relationship. Additional resources can be found in the CBA’s Conflict of Interest Toolkit.
Manner and Timing of Withdrawal
While circumstances may justify withdrawal from representation prior to the conclusion of the retainer, it is essential that adequate notice be provided.
In some jurisdictions, the definition of what constitutes reasonable notice will be set out in a statute or court rules, in which case that is the definition that will apply. For example, some jurisdictions have special rules regarding withdrawal if a trial date has been set.
In the absence of statutory provisions or rules of court, “reasonable notice” must be provided.8 This generally means that the client should be given sufficient time to retain another lawyer before their counsel ceases to act.
While the rules differ across jurisdictions, in general withdrawal for non-payment of fees is only permitted if the withdrawal would not result in serious prejudice to the client.9 Serious prejudice may occur where there is an imminent limitation period or other deadline. In light of these obligations, lawyers should carefully consider the timing of withdrawal of services and assess whether it will result in “serious prejudice.” If so, counsel may be obliged to perform certain tasks before withdrawing services.
Learn more:
- Law Society of British Columbia, Practice Management Course, Part 10 – Withdrawal of Services Learning Module including:
- Withdrawal of Legal Services
- Withdrawal for Non-payment of Fees
- Procedure for Withdrawing Services
- Procedure for Withdrawing Services continued
- Law Society of Alberta, Law Practice Essentials, Part 13 – Withdrawal of Service including:
- 13.2 Contractual, Ethical and Statutory/Procedural Obligations
- 13.5 When You May Withdraw Services
- 13.6 Obligations on Withdrawal
- 13.7 Notice Requirements
- 13.8 Application to Withdraw
- 13.9 File Transfer and Retention Obligations
- Law Society of Ontario, Client Service and Communication, 2.18 Withdrawal of Services, or Otherwise Ending the Engagement
- Law Society of New Brunswick, Business of Law Course (users must create an account) including Part 6 – Withdrawal of Services
- Lawyers’ Insurance Association of Nova Scotia, “Law Office Management Standards - #1 – Withdrawal As Counsel” (February 26, 2016)
- Law Society of Newfoundland & Labrador, “Withdrawal of Services” (posted June 12, 2020)
Criminal Proceedings
Rule 3.7-4 of the Code establishes special rules for withdrawal from criminal proceedings. Where a lawyer has agreed to act and the client has not paid the agreed upon fee, or there is other justification for withdrawal, the lawyer may withdraw but only if there is sufficient time for the client to retain new counsel. Further, the lawyer seeking to withdraw must comply with a number of steps, including: notification to the client in writing of the intention to withdraw, notification to Crown counsel, and notification to the clerk or the Registrar of the Court.
Where there is insufficient time before trial to enable the client to retain new counsel, the lawyer should attempt to have the matter adjourned, and should seek permission from the court to withdraw.10 Although the Court has jurisdiction to refuse an application to withdraw legal services for non-payment of fees, courts are generally reluctant to prohibit withdrawal, even in criminal matters, and will only refuse in order to prevent serious harm to the administration of justice.11
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Solicitor’s Liens
Rule 3.7-9 of the Model Code provides that when a lawyer is discharged or withdraws, the lawyer must deliver to the client all papers or property to which the client is entitled. However, this requirement is subject to the lawyer’s right to claim a lien. If a right to a lien for unpaid fees and disbursements arises, the lawyer must have “due regard to the effect of its enforcement on the client’s position.”12
Generally, a lawyer must not enforce a lien to the extent it would materially prejudice a client’s position in any uncompleted matter.13
When determining whether to enforce a solicitor’s lien, the lawyer should consider:
- Whether the client will suffer serious consequences without the file;
- The client’s ability to pay;
- The fairness of the fee agreement or the client’s understanding of it; and
- Whether any prejudice to the client can be mitigated by means other than the return of the file.14
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End Notes
1 Although Rule 3.4-10 of the Model Code (p. 46) prohibits lawyers from acting against former client in the same or related matters, or from acting in any other matter if the lawyer has relevant confidential information arising from the representation of the former client that may prejudice that client, lawyers are not otherwise precluded from acting against former clients. See also the CBA’s Conflict of Interest Toolkit.
14 Law Society of Alberta, Law Practice Essentials, Withdrawal of Service, 13.10 Solicitor’s Liens