Ethics Opinion Articles - NC State Bar Journal

Gone Fishin'

By Suzanne Lever

The closing of a law practice can be fraught with mixed emotions. Your reasons for closing your practice will likely affect your sentiments more than your professional responsibilities. Whether you are closing your practice due to retirement, appointment to the bench, or to pursue your dream of becoming the next American Idol, the implicated professional responsibilities are similar.1

Initially, try to complete and close as many files as possible. The practicalities of this directive will necessarily be affected by your personal time frame. If the bench (or Hollywood) is waiting, you may have very little time to wind down your practice. On the other hand, if you have been planning for your retirement for some time, you may have closed the majority of your files already.

For clients with active files, write each client to advise the client that you are unable to continue the representation and that the client needs to retain new counsel. Offer to refer the client to another lawyer who may be able to handle the client's case. Confirm the status of the case and inform the client about important time limitations; however, be careful with statements about exact dates or deadlines. Explain to the client how to pick up the file.

When you turn over the client's file, have the client sign either a receipt acknowledging that he received the file or an authorization allowing you to release the file to the client's new attorney. Consider whether you should make and retain copies of file documents before releasing the file to your client or your client's new counsel. You may make and keep a copy of the file but you cannot charge the client for your copy. You are not required to give the client items that would not be helpful to subsequent legal counsel, such as your personal notes or your incomplete work product. See Rule 1.16. The ethics rules do not require that you keep a copy of the client's file if you have turned it over to the client or his new attorney; however, check with your malpractice carrier to determine whether you carrier requires you to keep a copy.

For your active files, you may also need to take care of certain procedural matters. If a case has a pending court date, deposition, or hearing, discuss with the client how to proceed. Where appropriate, request extensions, continuances, and resetting of hearing dates. You should send written confirmations of these extensions, continuances, and resets to opposing counsel and to your client. For any case before an administrative body or court, you must follow the tribunal's procedures for withdrawal. These usually require the attorney to file a motion to withdraw and to receive the court's permission to withdraw.

Closed client files may be destroyed without client consent if they have been closed for six years or more. See RPC 209. Make a list of the files that you destroy, and be sure that the method of destruction protects client confidences. See RPC 133. Originals of wills, powers of attorney, etc., should not be destroyed but should be returned to the client if possible. If a file has been closed for less than six years, you may only destroy it with the consent of the client. (A practical alternative to destruction is the electronic storage of files. See RPC 234.) If you will be retaining the file for your client, tell each client where his closed file will be stored and who he should contact to retrieve the file. If a closed file is to be stored by another attorney, get the client's permission to allow the attorney to store the file for you and provide the client with the attorney's name, address, and phone number.

Your trust and fiduciary accounts must be reconciled and closed when you close your practice. You should disburse funds held in your trust account to the clients to whom they belong together with a final accounting. It is also permissible for you to deliver the funds to new legal counsel designated by a client. Although you need to close out your trust account, it may remain open for a reasonable period of time to collect outstanding funds that must be deposited into the account or to let items clear. For questions concerning closing your trust account, you may contact Bruno DeMolli at the State Bar. Fiduciary accounts may be transferred to the new fiduciary.

You will need to call the membership department at the North Carolina State Bar to update all membership records as to your status and new contact information. Tammy Jackson is the director of membership and would be glad to assist you. In addition, if you wish to change your membership status with the State Bar to inactive, you must complete a petition for transfer to inactive status. This petition can be found on the State Bar website (www.ncbar.gov). The petition must be completed and received no later than December 31st to avoid State Bar dues for the next year. All petitions for inactive status are heard at the State Bar's quarterly meetings. If you are a sole practitioner, ask the telephone company to provide your new phone number to anyone who calls your old number. If you do not want calls forwarded to your home or new office, set up an answering machine to receive these calls.

And by all means, if you do make it onto American Idol, give Paula a kiss, Randy a high five, and Simon . . . well I will leave that up to you.

Suzanne Lever is assistant ethics counsel at the State Bar.

Endnote

1. Much of the information contained in this article was taken from Turning out the Lights: Planning for Closing Your Law Practice, a publication of the North Carolina Bar Association Rich Harris Committee. The committee published the guidebook to help lawyers plan for untimely events that might necessitate the closing of a law practice. The publication can be purchased from the North Carolina Bar Association for $45. Send your request to Jane Weathers, NCBA Director of Sections at jweathers@ncbar.org, or call1-800-662-7407.

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