Tag Archives: Rule 1.16

Avoid Ethics and Malpractice Pitfalls With Sound Business Practices


Law firms must run like a real business to stay open, pay bills, and succeed financially. The lawyers who manage these firms and work in them have business responsibilities, too. Whether you’re a solo practitioner or a managing partner at a big law firm, you have to bill your clients, market your practice, grow your client base, and nurture relationships to thrive in the legal industry. Otherwise, you cannot meet clients’ needs and deliver services on a sustainable basis.

Law students are typically reminded that the practice of law is a profession, not a business. It is indeed a self-regulating profession that is bound by rules of professional conduct. But focusing on the business side of law practice doesn’t weaken professionalism. Rather, having sound business practices strengthens your ability to serve clients ethically and responsibly.

Good business practices go hand in hand with professionalism. The traditional notion that law firms are not businesses is outdated. Although law firms are not ordinary businesses and lawyers are not just business people, ignoring the business side of law practice does not benefit your clients or the legal profession.

Many ethics complaints and malpractice claims are based on issues related to how you manage your firm and practice, instead of on substantive legal errors. Failing to respond promptly to client inquiries, procrastinating, missing deadlines, and over-billing or billing inaccurately are some of the top ethics and malpractice traps.

Here are sound business practices to help you prevent (and defend against) ethics complaints and malpractice claims:

1. Screen your potential clients and accept cases deliberately 

Choosing your clients carefully is the first step to building a strong clientele that appreciates the work you do and will pay you accordingly.

Demanding and difficult clients are hard to please and often the slowest to pay. If a client has gone through several lawyers before they meet with you, be wary. If they unduly blame others without taking any responsibility for their predicament, chances are they will find you wholly at fault for any delays and negative results.

Take cases that really capitalize on your expertise and interest and choose clients you really want to help.  This is not only sound business practice, but will also make it easier for you to comply with Rules 1.1 (Competence) and 1.3 (Diligence) of the Minnesota Rules of Professional Conduct (MRPC).

You can certainly take cases that require more than what you normally bring to the table, but be sure to do the reasonably necessary preparation to meet the clients’ needs. This includes asking for guidance from your colleagues and more experienced attorneys.

Even when a client passes initial screening, there are some situations where continuing to represent the client does not make good business sense and leaves you open to ethics and malpractice pitfalls.

Except as stated in paragraph (c), paragraphs (b)(5) and (b)6) of Rule 1.16 (Declining or Terminating Representation), MPRC, allows lawyers to withdraw from representation when “the client fails substantially to fulfill an obligation to the lawyer regarding the lawyer’s services and has been given reasonable warning that the lawyer will withdraw unless the obligation is fulfilled, or “the representation will result in an unreasonable financial burden on the lawyer or has been rendered unreasonably difficult by the client.” Be sure to surrender the client’s file and property when your representation is terminated.

2. Keep a written fee agreement that fully describes the fee and scope of services

While business deals can be made verbally, on a handshake, or through a simple “thank you” letter, lawyers have unique obligations when it comes to agreements with clients. New clients and new matters should have a written fee agreement. Having the agreement in writing clarifies the scope of representation, your fee structure, your billing practices, and the out-of-pocket charges the client needs to pay. A written fee agreement also helps set clear expectations on both sides.

Make sure your clients can pay your legal fee, unless you want to end up with “forced” pro bono work.  Ask for an initial/advanced payment or retainer fee before you begin to work. Let the client know this payment is refundable if the work is not performed. Rule 1.5 , MRPC allows for advanced payments as long as they are agreed to in writing by the client and they are subject to refund.

3. Compete on value 

Rule 1.15(a), MRPC, states the following are relevant factors in determining whether the attorney’s fee is reasonable:

(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;

(2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;

(3) the fee customarily charged in the locality for similar legal services;

(4) the amount involved and the results obtained;

(5) the time limitations imposed by the client or by the circumstances;

(6) the nature and length of the professional relationship with the client;

(7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and

(8) whether the fee is fixed or contingent.

Charge reasonable fees, not rock-bottom fees. Set your fees based mostly on the value you bring, instead of what you think the client can pay. Low billing rates don’t necessarily attract more clients. Competing on price often results in less profitable work, additional stress, and the need to take on a huge volume of cases to make up for the financial loss. While many clients will shop around for the lowest fees, you are better off with clients who choose their lawyers based on the value they bring. These clients are more likely to stay with you and refer others to you.

4. Implement effective billing and collections practices

Fee disputes and collections suits to recover on delinquent accounts are a driving factor behind many ethics complaints and malpractice claims. To avoid this ethics and malpractice trap, you need to have effective billing and collections policies in place. Mistakes — such as double-billing for duplicative work, charging clients for filing fees that have already been paid, inconsistent invoicing, and failing to clearly describe the work performed — leads to client mistrust. Accurate billing and timely collections will reduce financial problems down the line and enhance your relationship with the client.

Avoid suing a client just because you believe you deserve to get paid for the work you did and the results you delivered. Consider whether the client has the ability to pay and whether the amount owed is worth the hassle of trying to collect it.

5. Communicate regularly and respond promptly

Rule 1.4 (a), MRPC, requires you to promptly inform the client of key decisions and circumstances and obtain informed consent; reasonably consult with the client about means to accomplish objectives; keep the client reasonably informed about the status of the matter; and promptly comply with reasonable requests for information. These ethics rules are also sound business practices.

Respond to your clients’ voice mails and emails within 24 hours, unless there are extenuating circumstances, such as your being ill or on vacation. Have a back-up plan for those circumstances. Even if you don’t have an immediate answer, let clients know you received their message and will follow up within a certain time frame. At the very least, inform your clients about your communications policy, such as your office hours and when and how they can expect a response from you.

Send your clients copies of all filings, correspondences and other materials relating to their matter.  This is a convenient way to keep them reasonably informed about the status of their case. Regular and prompt communication is not only ethical, but is also a good business policy that increases client loyalty and satisfaction.

6. Set up systems to handle client matters and run your firm

Systematizing your  law practice helps you provide high-quality service and effective representation to your clients. Systems are clearly defined, step-by-step plans, procedures, processes and policies to complete routine tasks and address common issues.

Documenting your processes and policies, as well as systematizing repetitive tasks, can help you streamline your practice and create more consistent, high-quality results (no matter how heavy your work load).

Systematization doesn’t mean you provide cookie-cutter solutions or drop the uniqueness of your brand. Rather, they help you automate routine activities and daily operations so your firm runs like a business instead of just as a practice that depends completely on you.

Two key systems that allow you to run your firm effectively and avoid ethics and malpractice traps are:

  •  Calendaring, scheduling and tickler system. e.g. recording important hearings and meetings and setting reminders for due dates and deadlines.
  • Client file management system. e.g. providing steps for running conflicts checks, opening new client files, closing files, and destroying old files.

Setting up systems can be a time-consuming, costly activity. When you’re busy, it can seem a like a low priority. But having systems in place is key to operating your law firm like a real business and meeting your obligations to clients.

7. Find the best, workable solution for the client

Although law firms are businesses, your responsibilities as a lawyer should always trump your roles as a business person. While filing a meritorious lawsuit is probably more lucrative than using informal channels, lawyers need to consider the best interest of the client. As professionals, lawyers also have a duty to avoid overburdening the courts and clogging up the judicial system.

In immigration practice, for instance, a lawyer should consider negotiating an agreement with the immigration authorities that will meet the client’s objectives, instead of filing a federal lawsuit to make case law (and more money). While using cost-effective methods to gain desired results  might not bring you fame and glory, it will enhance your reputation and add to the bottom line in the long run.

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This article provides general information only. Do not consider it as legal advice for any individual case or situation.   The sharing or receipt of this information does not create an attorney-client relationship.

The author, Dyan Williams, is admitted to the Minnesota state bar and focuses on the Minnesota Rules of Professional Conduct, which are subject to change. Check your individual state rules of professional conduct, regulations, ethics opinions and case precedents, instead of relying on this article for specific guidance. 


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Photo by:  Kevin Harber

Responding to Requests for Client Files: Do’s and Don’ts

Lawyers might think they “own” their clients and their clients’ files. But clients are always free to fire their lawyers and get new counsel. And the file – at least the most critical parts – belong to the client.

Failure to promptly hand over the file to the departing client or to his new counsel is a strong basis for an ethics complaint and a common reason for disciplinary action.

What are the Minnesota rules on releasing client files? 

Rules 1.16(d) (Declining or Terminating Representation) and 1.15(c)(4) (Safekeeping Property), Minnesota Rules of Professional Conduct (MRPC), require lawyers to return client files upon the client’s request.

In 2005, Rules 1.16(e), (f) and (g) were added to the MRPC, which basically incorporated Lawyers Board Opinions 11 (repealed) and 13 (amended). Rule 1.16(e) describes which papers and property belong to the client and must be surrendered as the client’s file. Rule 1.16(f) states that lawyers may charge for reasonable costs of duplicating or retrieving the client file, after termination of the representation, but only if the client agreed at the outset, in writing,  to such a charge. Rule 1.16(g) prohibits lawyers from conditioning the return of the client file on payment of the lawyer’s fee or the cost of copying the files or papers.

What does the ABA have to say about releasing client files?

In July 2015, the American Bar Association (ABA) provided further guidance on the return of client files in Formal Opinion 471, Ethical Obligations of Lawyer to Surrender Papers and Property to which Former Client is Entitled.  The ABA noted that the lawyer must, at a minimum, turn over materials that would likely harm the client’s interest if not provided.

Applying Model Rule 1.15, the ABA determined that the lawyer must return all property that came into his possession in connection with the representation. This includes tangible personal property; items with intrinsic value or that affect valuable rights, such as securities, negotiable instruments, wills, or deeds; and any documents provided by the client.

Applying Model Rule 1.16(d), the ABA determined that the lawyer must surrender any materials provided by the client; legal documents filed with a tribunal (or those completed and ready to be filed); executed instruments like contracts; orders or other records of a tribunal; correspondence in connection with the representation (including emails retained according to the lawyer’s document retention policy); discovery or evidentiary 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 third-party evaluations or records paid for by the client.

The ABA stated it is unlikely the client is entitled to papers or property that the lawyer generated for internal use primarily for the lawyer’s own purpose in working on the matter. Thus, the ABA determined the  lawyer need not provide drafts or mark-ups of documents to be filed with a tribunal; internal research memos and materials; a general assessment of the client or the client’s matter; internal conflict checks; personal notes, billing statements; and documents that might reveal other client confidences.  The ABA added, however, that internal notes and memos, for which no final product emerged, may have to be disclosed if this would avoid harming the client’s interests. An example is the most recent draft of a document and the supporting research to help meet an imminent filing deadline.

In a September 2015 Bench & Bar of Minnesota article, the Director of the Office of Lawyers Professional Responsibility, Martin Cole, commented on the recent ABA opinion. He stated Minnesota has a long-standing rule on what constitutes papers and property belonging to the client, and Minnesota normally follows ABA guidance, absent good cause.

Lawyers who are terminated from representation or withdraw from representation must protect the client’s interest by surrendering papers and property that belong to the client. Although the ABA Model Rules and Formal Opinions provide guidance, the state rules of professional conduct are what governs.

There are things to do and things to not do when surrendering client files and responding to requests for client files:


1. Determine exactly what you must provide to the client 

Upon termination of representation or upon receiving a request for a client file from the client or an authorized third party, the lawyer must review Rule 1.16(e), MRPC. It provides a detailed list of what lawyers must hand over to the client in all representations, pending claims or litigation representations, and nonlitigation or transactional representations. The rule also describes what does not constitute client files, papers and property.

Rule 1.16(e) states  “Papers and property to which the client is entitled [upon termination of representation] include the following, whether stored electronically or otherwise:

(1) in all representations, the papers and property delivered to the lawyer by or on behalf of the client and the papers and property for which the client has paid the lawyer’s fees and reimbursed the lawyer’s costs;

(2) in pending claims or litigation representations:

(i) all pleadings, motions, discovery, memoranda, correspondence and other litigation materials which have been drafted and served or filed, regardless of whether the client has paid the lawyer for drafting and serving the document(s), but shall not include pleadings, discovery, motion papers, memoranda and correspondence which have been drafted, but not served or filed if the client has not paid the lawyer’s fee for drafting or creating the documents; and

(ii) all items for which the lawyer has agreed to advance costs and expenses regardless of whether the client has reimbursed the lawyer for the costs and expenses including depositions, expert opinions and statements, business records, witness statements, and other materials that may have evidentiary value;

(3) in nonlitigation or transactional representations, client files, papers, and property shall not include drafted but unexecuted estate plans, title opinions, articles of incorporation, contracts, partnership agreements, or any other unexecuted document which does not otherwise have legal effect, where the client has not paid the lawyer’s fee for drafting the document(s).

Like the ABA’s Formal Opinion 471, the Minnesota rule states that papers and property submitted to the lawyer by the client must be returned to the client. The Minnesota rule further requires any papers and property for which the client has already paid the lawyer’s legal fees or reimbursed the lawyer’s costs to be surrendered. In its recent Opinion, the ABA presumes that all fees were paid, but still allows withholding some documents.

Although lawyers retain billing and collection rights, they must hand over documents that have been served or filed in litigation matters, as well as items for which they agreed to advance costs and payments – even if the client has not paid for the work or items. In transactional matters, lawyers have a bit more leeway in withholding documents. While all work already paid for must be released, unexecuted documents that have no legal effect may be withheld if the client has not paid for the work.

2. Surrender the client file promptly

Rule 1.15(c)(4), MRPC, states a lawyer shall “promptly…deliver to the client or third person as requested…properties in the possession of the lawyer which the client or third person is entitled to receive.”

Rule 1.16(d), MRPC states, “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…”

Rule 1.(4)(a)(4), MRPC, further requires the lawyer to “promptly comply with reasonable requests for information.”

Delays in surrendering the client file can and often do harm the client’s interests, especially when there is an imminent deadline or statute of limitations to meet. Responding promptly to requests for client files should be a top priority for the lawyer and his firm.

The state ethics rules do not require a hard copy transmission of client files. Lawyers Professional Responsibility Board Opinion 19 states a lawyer may use technological means such as email, without encryption, to transmit confidential client information without violating Rule 1.6, MRPC.

Using cloud computing software, such as Dropbox, to transmit client files is also not prohibited specifically. In general, cloud computing refers to data that is provided over the Internet and stored on servers owned by a third party, rather than installed on the user’s computer or server. Many states have issued cloud ethics opinions that permit the use of such technology to store and transfer client files, as long as reasonable care is taken and certain conditions are met.

Lawyers — particularly those who run paperless or mobile offices — may release the file electronically to the client in the interest of expediency. Of course, original documents belonging to the client must be returned.

3.  Obtain a written agreement from clients, at the outset, authorizing you to charge for duplicating or retrieving client files upon termination of representation (if you do not want to bear such costs)

Lawyers may charge a client for the reasonable costs of duplicating or retrieving the client’s file only if they had a written fee agreement, at the outset, allowing such a charge. Billing the client for such costs, without prior written authorization from the client, violates Rule 1.16(f).

The Minnesota Supreme Court has stated that when an attorney copies the client file at the termination of representation, the copy is really for the attorney’s benefit (for example, to defend against malpractice claims or ethics complaints). If there is no written agreement authorizing the charge, lawyers must surrender all items belonging to the client without cost.

Lawyers are not required to duplicate the files upon release to the departing client. Keeping at least an electronic copy, however, is a good, protective measure.  And if the firm hands over the file without retaining any copy, it is especially important to obtain written acknowledgment from the ex-client or new counsel confirming receipt of the file. An inventory list of the items surrendered should also be kept.

4. Keep a systematic file retention policy and notify your clients about it

Rule 1.15 (c) obligates lawyers to maintain complete records of all properties of a client coming into the lawyer’s possession and promptly surrender to the client, as requested, the properties to which the client is entitled. Rule 1.16 requires lawyers, upon termination of representation, to surrender all property to which the client is entitled. But as former Director of OLPR, Kenneth L. Jorgenson stated in a Bench & Bar article, “Neither of these rules, however, provides any guidance or insight about the duration of the obligation to return client property or whether it is ever appropriate to dispose of client files.”

Advances in technology and electronic storage make it possible to retain client files indefinitely. But such a conservative file retention policy is not required by the ethics rules.

Jorgenson notes that retention periods for client files must meet or slightly exceed a client’s reasonable anticipated needs for the file.  Relevant factors include statutes of limitations or deadlines relating to the file, tax laws and other regulations applicable to the client, and whether the file includes original documents that are intrinsically valuable (e.g., stocks, bonds, notes, deeds, wills and trusts).

Lawyers should also consider their  own need for the file in the event of a malpractice claim. Work with your malpractice carrier to create and implement a file retention policy.

Jorgenson advises lawyers to separate client originals from the file and return them to the client at the end of representation, or if necessary, retain them when the rest of the file is destroyed. The lawyer should provide notice of the retention policy at the outset in a retainer agreement and/or at the end of representation in a closing letter.  Jorgenson adds, “Client notice of the firm’s file retention period may render client demand for documents after expiration of the retention period unreasonable, or at least less reasonable.”


1.  Refrain from hanging on to documents you may keep if this serves a trivial purpose 

Holding back parts of the file to which the client is not entitled – out of spite or for no substantial purpose – can make a bad situation worse.  Even upon termination of representation, a lawyer shall take reasonable steps to protect the client’s interest.

Lawyers may choose to hand over the entire file to the client, even if they can withhold certain parts under the state rules. Unless full release would disclose other client confidences, reveal competitive business strategies, violate a court order, or harm a lawyer’s professional interest, it is generally better to provide all documents to help the client.

In his September 2015 article, OLPR Director Cole noted:

Minnesota does not in its rule otherwise distinguish intermediate drafts of documents from final products, as the ABA opinion spends time doing. Minnesota has not stated that such drafts are somehow documents to which a client is not entitled, so it would seem that they may be. Many lawyers may not historically have retained drafts of pleadings, research memos, etc., but in today’s electronic world, perhaps they are retained and may contain valuable tracking information about changes made. Maybe this will be an area in which the new ABA opinion can influence Minnesota’s rules.

2. No holding the client file hostage to secure payment

The ABA Model Rule 1.16 (d) states that in surrendering papers and property to which the client is entitled, “[t]he lawyer may retain papers relating to the client to the extent permitted by other law.” The phrase “other law” generally refers to a common law retaining lien or other law permitting the lawyer to retain a file as security for a fee.  State rules, however, trump the Model Rules.

While some states like South Dakota, Massachusetts, Georgia and Vermont follow the Model Rule and allow retaining liens in general, others such as North Dakota and Minnesota forbid them entirely.

North Dakota Rule 1.19 states  “[a] lawyer shall not assert a retaining lien against a client’s files, papers, or property[,]” including electronically-stored items.

In Minnesota, Rule 1.16(g), MRPC, forbids lawyers from conditioning the return of client papers and property on payment of the lawyer’s fee or the cost of copying or retrieving the file. Even when a lawyer has a written agreement authorizing charges for copying or retrieving the file, he may not withhold the client file to secure payment of those costs or legal fees owed.

Rule 1.16(e), MRPC, does allow lawyers to withhold certain items that have not been paid for. But lawyers cannot keep documents that belong to the client and must be surrendered to the client, while awaiting payment for those documents.

Lawyers whose state rules allow retaining liens should carefully consider whether to exercise this right. Withholding client files to secure payment — regardless of whether you have such a right — could harm the firm’s reputation, conflict with your professional values, fuel public mistrust, and interfere with your ethical obligations not to prejudice the client’s interest.

3. Stop using client communication & correspondences during representation as an excuse to not surrender the client file

Lawyers might resist releasing a client file when they have previously provided the client with copies of documents, correspondences, etc. during representation. Rule 1.4(a)(3), MRPC, states a lawyer shall “keep the client reasonably informed about the status of the matter.”

In its Formal Opinion 471, the ABA  encourages lawyers to regularly provide clients with information and copies of documents during the course of representation and encourages lawyers to advise clients to maintain these documents. This helps to comply with Rule 1.4. But the ABA added, “The fact that copies of certain materials may have been previously provided to a client is not dispositive of whether the lawyer must also provide such materials at the termination of a representation.”

The Office of Lawyers Professional Responsibility takes a similar approach.  A lawyer is not relieved of his duty to surrender client property by claiming the client previously received copies of pleadings and other items during representation. This is part of client communication and reduces the likelihood that the client will request the file at the end of representation. But the client cannot be forced to maintain a copy of the file.

4. Avoid careless loss and premature destruction of valuable documents in the client file

Although the ethics rules do not, per se, require permanent storage of client files, lawyers ought to safeguard their client’s property under Rule 1.15  Sloppy maintenance of client files will make it much harder for you to surrender them upon request.

Keep your file management and retention system well-organized, secure, and properly labeled to allow easy retrieval. You should not destroy a client file without proper notice to the client and without providing an opportunity to take the file before the retention period ends. A client can be harmed substantially if the firm loses or destroys documents that are not otherwise readily available to the client.


A lawyer’s failure to return papers and property belonging to the client is a common basis for ethics complaints. The Minnesota Supreme Court has rendered public discipline when the failure to return a client file is part of a pattern of misconduct. Withholding the client file to secure payment of fees or costs may also lead to discipline, even when no other misconduct is involved.

Practicing the Do’s and Don’ts in releasing client files and responding to such requests will help you avoid ethics complaints and malpractice claims, as well as protect your reputation and your (ex) clients’ interests.

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This article provides general information only. Do not consider it as legal advice for any individual case or situation.   The sharing or receipt of this information does not create an attorney-client relationship.

The author, Dyan Williams, is admitted to the Minnesota state bar and focuses on the Minnesota Rules of Professional Conduct, which are subject to change. Check your individual state rules of professional conduct, regulations, ethics opinions and case precedents, instead of relying on this article for specific guidance. 


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Photo by:  Jonathan