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When It’s Time to Say Goodbye: Terminating the Attorney-Client Relationship

Client Compatability, Firm Management

This Article focuses on the termination of the attorney-client relationship, including practical steps of withdrawal, ethical obligations under the Texas Rules of Professional Conduct (“Texas Rules”), and risk mitigation tips when terminating the attorney-client relationship. 

TERMINATING THE REPRESENTATION 

In many instances, the attorney-client relationship has a natural conclusion. For example, the parties have agreed that the relationship terminates automatically if legal services have not been provided over a set period, or because the matter for which the attorney was retained has ended  (as defined in the engagement letter). That is, of course, not always the case. Below is a recap of the Texas rules regarding when withdrawal is required or permitted. 

Mandatory Withdrawal 

In some situations, the decision is unavoidable because withdrawal is mandatory.  Under Texas Disciplinary Rules of Professional Conduct (“Texas Rule”) 1.15(a), a lawyer must withdraw from representing a client when:

  1. the representation will result in a violation of the Rules of Professional Conduct or other law;
  2. the lawyer’s physical, mental or psychological condition materially impairs the lawyer’s fitness to represent the client; or
  3. the lawyer is discharged by the client, with or without good cause. 

Permissive Withdrawal 

In certain situations, the best decision an attorney can make may be to terminate the attorney-client relationship. Doing so may help reduce the risk of a legal malpractice claim or bar complaint.

Texas Rule 1.15(b) permits withdrawal when:

(1) withdrawal can be accomplished without material adverse effect on the interests of the client;

(2) the client persists in a course of action involving the lawyer’s services that the lawyer reasonably believes may be criminal or fraudulent;

(3) the client has used the lawyer’s services to perpetrate a crime or fraud;

(4) a client insists upon pursuing an objective that the lawyer considers repugnant or imprudent or with which the lawyer has fundamental disagreement;

(5) the client fails substantially to fulfill an obligation to the lawyer regarding the lawyer’s services, including an obligation to pay the lawyer’s fee as agreed, and has been given reasonable warning that the lawyer will withdraw unless the obligation is fulfilled;

(6) the representation will result in an unreasonable financial burden on the lawyer or has been rendered unreasonably difficult by the client; or

(7) other good cause for withdrawal exists.

THE PRACTICAL STEPS OF WITHDRAWAL 

Texas Rule 1.15(d) provides that the lawyer must take all steps “to the extent reasonably practical” to protect a client’s interests. This includes giving reasonable notice to the client, allowing time for employment of other counsel, delivering to the client all papers and property to which the client is entitled, and refunding any advance payments of fee that has not been earned. 

While withdrawal implicates attorneys’ ethical obligations under the Texas Rules regardless of the type of matter, attorneys should be aware that the practical steps of withdrawal usually vary between litigation and nonlitigation matters. In nonlitigation matters, withdrawal may often be achieved by asking for and receiving the client’s consent or even by simply terminating the relationship by letter. For litigation matters, however, the court is required to approve the withdrawal, subject to satisfaction of various notice and filing requirements. Under Texas Rules of Civil Procedure 10,  an attorney may withdraw from representing a party only upon written motion for good cause shown and imposes the following restrictions on the manner in which an attorney may withdraw from an attorney-client relationship: 

  • If another attorney is to be substituted as attorney for the party, the motion shall state: the name, address, telephone number, telecopier number, if any, and State Bar of Texas identification number of the substitute attorney; that the party approves the substitution; and that the withdrawal is not sought for delay only. 
  • If another attorney is not to be substituted as attorney for the party, the motion shall state: that a copy of the motion has been delivered to the party; that the party has been notified in writing of his right to object to the motion; whether the party consents to the motion; the party’s last known address and all pending settings and deadlines. 
  • If the motion is granted, the withdrawing attorney shall immediately notify the party in writing of any additional settings or deadlines of which the attorney has knowledge at the time of the withdrawal and has not already notified the party. The Court may impose further conditions upon granting leave to withdraw. 
  • If the attorney in charge withdraws and another attorney remains or becomes substituted, another attorney in charge must be designated of record with notice to all other parties in accordance with Rule 21a.

It is important to note that under Texas Rule 1.15(c), a lawyer shall continue representation notwithstanding good cause for terminating the representation if so ordered by the tribunal.

RISK MANAGEMENT STRATEGIES WHEN TERMINATING THE ATTORNEY-CLIENT RELATIONSHIP

  • At the outset of the attorney-client relationship, lawyers should use an engagement letter to help protect their ability to withdraw from a matter when a client stops paying fees or cooperating in the matter. The engagement letter should include a section setting forth the client’s responsibilities, and provide that the lawyer may suspend or terminate the representation if the client breaches any of these obligations. The engagement letter should be signed by the client, acknowledging that she accepts the terms and conditions of the engagement.
  • Attorneys should be mindful of the timing of withdrawal to ensure the timing affords the client sufficient time to obtain other counsel, does not unduly prejudice the client in their ability to meet any imminent deadlines in their case, and the notice of withdrawal provides sufficient time for the client to respond.
  • Remember that it’s not so much what you say, but how you say it. It’s particularly important to pay attention to the tone of the termination letter and maintain a high level of professionalism, which can be easier said than done if the relationship has become contentious. If a disagreement has arisen between the lawyer and the client, it’s advisable to have another attorney review the letter. Attorneys with questions or concerns regarding the termination or proposed termination letter, can contact TLIE’s Risk Management department for assistance.
  • It’s important to effectively terminate a representation to avoid inadvertently tolling the statute of limitations for legal malpractice claims, and to minimize potential exposure for events that occur after the attorney-client relationship ends (e.g., missed deadlines). The attorney should send a termination letter to its client at the end of a matter. This is particularly important if the representation does not have a natural termination, such as settlement of litigation. The termination letter should include when the representation was terminated, identify upcoming deadlines, and confirm the firm will not act on future deadlines. Additionally, the firm should not perform further work for the client. Any time spent in a risk management capacity on the matter should not be billed to the client, but should be billed to a separate internal firm billing matter. This will help avoid any inference that the attorney continued to provide services to the client.

A NOTE ABOUT COLLECTING OUTSTANDING FEES  

Attorneys should be wary of suing a client to collect outstanding fees as it can serve as an invitation for a counterclaim for legal malpractice. If a lawyer is considering suing for fees, she should have a lawyer who was not involved in handling the case review the matter to determine whether there is any basis for a malpractice or breach of fiduciary duty claim. It’s worthwhile to consider whether the actual amount to be recovered is worth the risk of a malpractice counterclaim.

CONCLUSION

Terminating an attorney-client relationship can be stressful and troublesome at times, but understanding one’s obligations under the Texas Rules and implementing risk mitigation strategies can help.  

By Lauren Bianchini