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2007 Formal Ethics Opinion 8

July 13, 2007

Charging a Client for Motion to Withdraw

Opinion rules that a lawyer may not charge a client for filing and presenting a motion to withdraw unless withdrawal advances the client's objectives for the representation or the charge is approved by the court when ruling on a petition for legal fees from a court-appointed lawyer.

Inquiry #1:

Attorney A is hired by Client to represent him on a matter in litigation. After representing Client for some period of time, Client informs Attorney A that he is no longer satisfied with his services and he discharges Attorney A. Pursuant to the requirements of Rule 1.16 and court rules, Attorney A prepares a motion to withdraw, files the motion, and successfully argues the motion to the court. After he withdraws, Attorney A prepares a final bill for his services that includes charges, at his regular hourly rate, for the time that he expended preparing and presenting the motion.

May Attorney A charge Client for the legal work necessary to withdraw from the case?

Opinion #1:

No. Rule 1.16(c) requires a lawyer "to comply with applicable law requiring notice to or permission of a tribunal when terminating a representation." Once a lawyer makes a formal appearance in a North Carolina court proceeding, the lawyer must obtain the tribunal's permission to withdraw. E.g., N.C. General Rules of Practice for the Superior and District Courts, Rule 16. Thus, the act of withdrawal is a professional obligation of the lawyer, for the benefit of the lawyer, and, with the exceptions described in opinions #5 and #6 below, the cost of withdrawal cannot be shifted to the client.

Inquiry #2:

Does it matter whether the lawyer decides to withdraw against the client's wishes or the client discharges the lawyer?

Opinion #2:

No. Whether the client or the lawyer is the first to conclude that the relationship must end, determining who is at fault or the motivation of the client or the lawyer when ending the relationship is often impossible and, ultimately, beside the point. Regardless of who may be at fault, the cost of the work necessary to file and argue a motion to withdraw must be incurred because the lawyer is required by the Rules of Professional Conduct and the court rules to obtain the permission of the court to withdraw. It is the lawyer's professional duty and, therefore, the lawyer may not shift the cost to the client. Cf., 2000 FEO 7, Charging a Legal Fee for Participation in the Fee Dispute Resolution Program (participation in State Bar's fee dispute resolution program is a professional responsibility making it improper to charge the client for the time expended to participate).

Inquiry #3:

The court denies Attorney A's motion to withdraw. May Attorney A subsequently bill Client for the legal work necessitated by the motion to withdraw?

Opinion #3:

No, see opinions #1 and #2 above.

Inquiry #4:

Attorney A wants to include a provision in his standard legal services agreement that states that the client will pay the cost of preparing, filing, and arguing a motion to withdraw if the client terminates the lawyer's services.

If a client consents to this provision in a legal services agreement, may Attorney A subsequently charge the costs to the client if the client terminates his services?

Opinion #4:

With the exception of the situation described in opinion #5 below, a lawyer may not include a provision in his legal services agreement shifting the cost of withdrawal to the client. See opinions #1 and #2 above. Such a provision would have an improper chilling effect on a client's right to terminate a lawyer's services at will.

Inquiry #5:

On occasion, a lawyer must file a motion to withdraw, with the consent of the client, to advance the client's objectives for the representation and not because the client is dissatisfied with the lawyer's services or the lawyer wishes to terminate the representation. For example, an insurance carrier hires a lawyer to defend its insured in a personal injury lawsuit. Before trial, the carrier offers the full policy limits to the plaintiff. The carrier hires another lawyer to file the appropriate motion seeking to have the carrier relieved of its duty to defend the insured. The lawsuit must go forward, however, to determine whether there is liability entitling the plaintiff to recover the proceeds from an underinsured or other excess liability insurance policy. If the motion to be relieved of the duty to defend is allowed, the lawyer originally hired to defend the insured must make a motion to withdraw to further the insurance carrier's objective of being relieved of the duty to defend. The insurance carrier typically anticipates and assumes that it will pay the legal fees associated with the preparation and presentation of the motion to withdraw.

If a lawyer must withdraw from the representation of a client in a lawsuit to advance the client's objectives for the representation, may the lawyer charge the client for the legal work necessary to withdraw? May the lawyer include a provision in his legal services agreement with the client stating that the client will pay the legal fees for withdrawal under these circumstances?

Opinion #5:

Yes, in this instance, the lawyer is providing a legal service to the client in addition to fulfilling his professional obligation under Rule 1.16(c). Subject to the limitation on clearly excessive fees in Rule 1.5, a lawyer may charge a client for the legal work necessary to withdraw if withdrawal advances the client's objectives for the representation and the lawyer may include a provision in his legal services agreement to this effect.

Inquiry #6:

The client-lawyer relationship between a court-appointed lawyer and a client is often difficult because the client does not select the lawyer. In addition, a court-appointed lawyer may not have an opportunity to check for conflicts of interest prior to being appointed or, in the criminal defense practice, a conflict of interest may not be apparent until the case evolves (e.g., the lawyer realizes that a plea agreement involves cooperation with the authorities that will negatively impact another client of the lawyer). If withdrawal from representation by a court-appointed lawyer is necessitated by a breakdown in the relationship or a conflict of interest or other similar circumstances, may the lawyer include the charges associated with filing and presenting the motion in a fee petition which is reviewed by the court?

Opinion #6:

Yes, provided the lawyer, in good faith, concludes that the lawyer's conduct is not the reason for the motion.1 Judicial review provides oversight to insure that the fee charges are warranted and, unlike in private representation, seeking compensation for filing the motion will not have a chilling effect on the client's right to terminate the relationship.

Endnote

1. This opinion does not require the lawyer to itemize or describe the conduct of the client leading to the motion to withdraw in the petition for fees. In many instances, this information will be confidential and cannot be disclosed. Rule 1.6.

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