BAR ASSOCIATION OF NASSAU COUNTY

COMMITTEE ON PROFESSIONAL ETHICS

 

Opinion 2006-05

 

 

 

 

Topic:

 

     In retainer agreement, attorney seeks prior consent of the client to attorney withdrawal if payment has not been made within sixty (60) days of any future statement or bill.

 

Digest:

 

     An attorney may not require a client, or prospective future client, to agree, in advance, not to contest the possible attorney’s withdrawal if payment has not been received within a fixed period following a future statement or bill.  

 

Code Provisions:

 

     2-110(a)

2-110(c)(1)(f)

     2-110(c)(5)

     DR-2-106

     NYSBA Op 598 (1989)

 

Facts:

 

     Law Firm “A” is questioning whether a specific provision regarding any possible future termination of its services is valid.  The questioned provision requires the client to agree in advance “not to contest” the law firm’s withdrawal if a payment fee or costs has not been received within sixty (60) days of the date of statement or bill.

 

Inquiry:

 

     Law Firm proposes to include a provision “not to contest” future withdrawal in its standard letter of engagement (otherwise than as to matrimonial matters).  Law firm requests comment on the ethical propriety of that provision.

 

Analysis:

 

     The relationship between an attorney and client is generally an at-will relationship in which either party can terminate the professional association without any notice period.  However, an attorney cannot withdraw from an engagement involving litigated proceedings, without the approval of the Court, and in the absence of successor counsel being available, approval of the Court will typically require consent of the client.

 

     An attorney has a reasonable expectation of payment for services rendered in accordance with the terms of the engagement.  An attorney not receiving payment in accordance with the terms of the engagement clearly has the right to seek to terminate the relationship.  An attorney not being paid should reasonably expect the client not to contest withdrawal.  However, the Code Provisions do not permit the attorney to require the client, in advance of the controversy, to contract to grant such consent in the future.    

 

     DR 2-110 subparagraph A, provides that in general, if permission for withdrawal is required by the rules of a tribunal, a lawyer shall not withdraw from employment in a proceeding before that tribunal without its permission.  Further, under DR 2-110(A)(2), even when withdrawal is otherwise permitted or required, a lawyer shall not withdraw from employment until the lawyer has taken steps to the extent reasonably practicable to avoid foreseeable prejudice to the rights of the client, including due notice allowing time for other counsel, and delivering to the client of all papers and property to which the client is entitled. 

 

     In the event of permissive withdrawal, an attorney may withdraw from representing a client if withdrawal can be accomplished without material adverse effect on the interests of the client, or if, among other things, the client deliberately disregards an agreement or an obligation to the lawyer as to its expenses or fees.  Thus, it is clear from the Code Provisions that a client disregarding an expense or fee obligation to a lawyer risks the attorney’s withdrawal.  However, requesting the client to contractually consent, in advance, to such withdrawal omits important requirements of the Code Provisions of DR 2-110(C)(5) including; (i) that the disregarding of the obligation by the client has been deliberate, and (ii) that the lawyer has made a determination at the time of the happening of the event that withdrawal can be accomplished without material adverse effect on the interests of the client. 

 

     DR 2-106 “Fees for Legal Services” mandates that fees must be “reasonable” under the circumstances of the particular case.  To require a client “not to contest” withdrawal of the lawyer from the matter unless all bills for fees and expenses are timely paid (without regard to any challenge as to reasonableness), effectively negates the opportunity that the client might otherwise have for a discussion of the appropriateness of the charges under the circumstances of the particular case. Explaining to the client subtle consequences of consensual withdrawal, in advance, of any subsequently arising fee dispute, in a fair and reasonable way may be an almost impossible burden to sustain even for the most forthcoming and fair minded lawyer. 

 

     A client being asked to consent to termination of the engagement in the event of such an unknowable dispute cannot be fairly said to have “knowingly and freely assented” as required by DR 2-110(C)(5).  This conclusion is also supported by New York State Bar Opinion OP 598 (1989), which expressly permits an attorney to withdraw when a client fails to pay fees due to “financial inability” finding that it falls within the language of a deliberate failure to pay.  However, the Committee cautioned that “withdrawal will not necessarily be appropriate in all . . . circumstances”, stating that the facts to be considered include the amount of work performed and paid for in comparison to the work remaining, the amount of fees paid to date, and the likely effect on the client. Simon’s New York Code of Professional Responsibility Annotated, 2006 Ed., p. 413.

 

Approved by full Committee on October 11, 2006 

 

 


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