Ending the Lawyer-Client Relationship

(a) Right to terminate

A client may terminate the lawyer-client relationship at any time, without cause. A lawyer may require cause to terminate the relationship, depending on the timing of the withdrawal and the impact on the client’s interests; see 3.7-1 and 3.7-3 and 3.7-4 of the BC Code which discuss when you can terminate the relationship and for which reasons (non-payment of fees). Of course, a retainer may come to an end when the lawyer has completed the work that was contracted for.

(b) Communication rules

(i) Closing the file

When you have completed work on the file, and resolved outstanding accounts, you should send the client a final reporting letter. A model letter is available from LSBC. The final reporting letter informs the client that the retainer is over, and what (if anything) remains to be done. Using the earlier example of being retained to obtain default judgment, a final reporting letter would confirm the result, and remind the client that they will have to take steps to collect on the judgment.

Using a model client survey can be helpful to track the efficacy of your client communication skills and help you identify strengths and weaknesses in your practice. You might wish to provide the client with the survey at the beginning of the retainer, and ask them to fill it out when the work has been completed. This approach lets the client know that you are interested in communicating effectively, and that you value their feedback. It might also allow the client to alert you to points of strength, or areas of concern, earlier in the relationship.

(ii) Termination by the client

If your client terminates the retainer, remember that the client has the right to do so without cause. If a client terminates the retainer, it is not a license to ignore their communications or to be rude. Some continuing communication will be required, including that necessary to transfer the file, refund money, or collect remaining fees and disbursements.

If your client terminates the retainer, you should do the following:

  • Determine whether or not the client is retaining new counsel.
  • Prepare a final bill for the client in order to settle accounts (whether the client owes you money, or you are required to refund money to the client).
  • Remind the client of limitations or deadlines that might affect the client’s legal rights or obligations.
  • Suggest that the client instruct new counsel.
  • Arrange for the transfer of the client’s property to the client or his or her new counsel.
  • Confirm your communications in writing.

If you were engaged in a contingent fee agreement terminated by the client, try to arrange with the client’s new counsel for payment of your disbursements, and secure payment of your fees for when the matter settles. Review the case law dealing with a lawyer’s right to quantum meruit payment in circumstances where the client terminates a contingent fee agreement.

(iii) Termination by you

Section 3.7-8 and 3.7-9 of the BC Code specify the steps that must be taken when a lawyer withdraws from a file, or is discharged. If you withdraw from a retainer, ensure you follow these provisions. Giving the client reasonable notice is important – it allows the client time to make alternate arrangements for representation, and reduces the chance that the client will feel abandoned. By following the specified procedures you can make it clear that the lawyer-client relationship has ended.

Remind the client of important dates (e.g., limitation dates, trial, examinations for discovery). If you have already provided the client with a roadmap, this will amount to confirming what you have already told them. If you have not provided the client with a roadmap, advise the client of these matters so that the client can take proper steps to protect his or her rights, or meet obligations.

(c) Liens to secure payment

Lawyers have a common law right of lien over the file to secure payment. The common law lien is different than the statutory charging lien available pursuant to s. 79 of the Legal Profession Act. While a lawyer may assert a lien on a file, the court has the jurisdiction to order the file to be delivered to the client; s. 78 of the Legal Profession Act. The court exercises its discretion to require a lawyer to surrender property over which a lien has been claimed in order to protect the client from injury (see Re Galland (1885), 31 Ch. D. 296 (C.A.)).

A good overview of this topic can be found in the following material:

In considering whether or not to assert your common law lien right, consider the potential harm that delay in transferring the file or property might cause to the client. Bear in mind that the former client, or new lawyer, may apply to the court pursuant to s. 78(1) of the Legal Profession Act to have the client’s records delivered, and on terms established by the court (s. 78(2)). If the client has secured the services of another lawyer, try and work out an arrangement with that lawyer regarding any outstanding fees or disbursements. If the client has decided to self-represent, try and work out an arrangement with the client regarding outstanding fees. Where possible, try to avoid having the matter brought to court.

Note your obligation to take all reasonable steps to assist in the transfer of the client’s file; see 3.7-9 of the BC Code. When you transfer a file, make copies of the content, as you may be required to prove that a bill is fair and reasonable and if so will need a copy of your work product. In fact, keeping a copy of core material also has the benefit of ensuring you have documents to defend against future claims a client might make regarding the services you provided.

If you enter into an entire contract with a client, note that your entitlement to payment on withdrawal is governed by the decision in Ladner Downs v. Crowley, (1987), 14 B.C.L.R. (2d) 357 (S.C.).

Greg T. Palm and Gordon Turriff, QC, “Lawyers’ Remuneration” in CLE BC, Annual Review of Law & Practice (January 2007), at pp. 498-99, observe:

  1. A lawyer who is retained on an entire contract cannot, without an express term providing otherwise (Noel and Lewis Holdings Ltd. v. Owen, Bird (1990), 44 B.C.L.R. (2d) 37 (C.A.)), insist on payment along the way, except perhaps for disbursements incurred.
  2. A lawyer who withdraws without cause from an entire contract before all the required work is done is not entitled to any fee.
  3. Withdrawal from an entire contract because a client has not paid interim bills is not withdrawal for cause.

 

Community Discussion

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Note the "if you enter into an entire contract..." part. This may give some the impression that ":entire contract" is a matter of choice. In a sense that is true, but your contract will almost always be found to be (or to have been) an entiter contract no matter how much you may wish or think otherwise. The safest rule is always to work on the basis that your contract is an entire one.

The first parts of this piece represent just good business practice. If you have to place a lien over an account it should illustrate to you that the communication with the client (or your understanding of the clients needs) were not ideal.

This goes back to the discussions at the time of settling the retainer.  I will sometimes tell clients that trust is an essential part of the client/lawyer relationship.  I will also say that if there is some concern on the part of the client about the relationship, they should feel free to discuss it with me.  I try to reassure them that I will not attempt to keep the file against the client's wishes.  However, these situations sometimes arise due to some sort of misunderstanding, or bad advice to the client from a non-lawyer.  

I believe it is important that the client be aware that there are costs and potential prejudice associated with a change of counsel, so it is important to discuss the possibility that there is a misunderstanding which has led to the desire to change.

The reason for the change may be rather more general, such as the client does not like your style in Court, or you were unsuccessful on an application the client thought you should have won.  The client may not be willing to discuss the reasons for the change.  If so, the only option is to approach the situation in a professional manner, avoiding doing anything which might unreasonably prejudice the client.

In other words, approach the situation with grace, and (usually) wish the client well in the resolution of their legal problems.