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Ethics : Painless farewells

Every Issue

Cite as: (2003) 77(9) LIJ, p.84

The issues of the final bill and the indefinite security of files need to be considered when the lawyer-client relationship comes to an end.

Terminating the lawyer-client relationship requires as much care as the effort that goes into developing it in the first place. Like it or not, there are still “issues” to be dealt with. Primary among these is that of your reputation. Even when the retainer is simply at an end,[1] a lot of care needs to go into the bill – and not just because you need to be paid. A perfectly good lawyer-client relationship can be soured by your client thinking that the bill is too high, leading to a suspicion that you are not ethical after all and forestalling future referrals.

All this is obvious, yet ethical practice in relation to the bill is probably the most neglected area of lawyer-client relationships. Consider if your own ethical practices maximise the chances of attracting more work from departing clients. Do you:

  • “quote” in accordance with the communication provisions of the Legal Practice Act 1996 (Vic),[2] so that your client knows up front, more or less what the bill will be?;
  • deliver interim bills (with email progress reports) where the end-of-retainer total would otherwise make the client doubt your integrity?;
  • when the bill is finalised, use a costing service (such as those provided through the Law Institute) and itemise everything in the bill, having made that approach transparent to the client from the beginning?; and
  • offer payment terms to a client whom you know wants to pay but will be slow if they have to cough up in a lump sum?

Positive answers to these questions are a good start to termination without pain, but there is more to come. Hold on to the file as if your life depends on it. One day it might. Clients do return with related problems and want documents they say were in the old file. If you do not have the documents, or worse, have misplaced the file,[3] Professional Standards might get involved. However, that is actually the least of any consequences. When documents in files are lost and the loss negatively affects a client’s finances, you may have a reportable event for the purposes of your professional indemnity insurance policy, leading to the possibility of higher deductibles or premiums upon renewal.

Assuming you do have an effective filing system, you will also be able to remember the confidences that must be kept[4] after your client is no longer a client. Your client may go but their secrets remain with you. You will occasionally need to remember what you must keep secret and the only way to be sure of that is to have access to the old file.

Finally, and of most contemporary concern, former clients’ confidences must be kept because you may have to reject a new client because of a successive conflict of interest. Former clients are always your concern because, long after they have paid their bill, you must decline to use your confidential knowledge of that client’s affairs in the interests of a new client (and against those of your former client).[5] Again, how can you be sure of what you are doing in relation to this duty if you cannot find the old file?

In summary, surviving the termination of a client (relationship) centres on the file: to be ethical as well as “protected”, maintain files diligently, cost them accurately and secure them indefinitely.


ADRIAN EVANS is associate professor in law at Monash University and former coordinator of Springvale Legal Service Inc.

ethics@liv.asn.au


[1] Terminating before the retainer is complete is ordinarily ethically unacceptable, unless there is a “just cause” (a circumstance that sufficiently impedes representation – Jakab v Sauer, Morgan, De Jager & Volkenant (1998) 152 DLR (4th) 748), and reasonable notice is given. In the normal course, proof that you have been misled would be sufficient cause, subject of course to certain specific duties to continue representation in the midst of a criminal proceeding. See for example, Bar Rule 161 and associated rules, which provide for continuation of representation by an advocate despite an admission of guilt, to the extent of everything that can be “honourably” done in the client’s defence. G Dal Pont, Lawyers Professional Responsibility in Australia and New Zealand (2nd edn), 2001, LBC, lists a number of other “sufficient” circumstances. The Legal Practice Act 1996 (Vic) (the Act) s94 provides that a retainer may be terminated where a client refuses to provide security for costs.

[2] The Act, ss86-92.

[3] Although s443 of the Act permits you to destroy a client’s file after seven years if you have been unable to find your client and seek permission to do so, it is suggested that you do not destroy it unless you can make a digital copy. Even if a digital copy is made of a will file and even if the will itself is stored separately in your safe, never destroy the will file itself, as insurance against the possibility that the willmaker’s original instructions may need to be accessed at some time in the future. Recently expanded duties to beneficiaries under a will (Hill v Van Erp (1997) 142 ALR 687), also suggest that access to the original file should be maintained.

[4] Baker v Campbell (1983) 153 CLR 52.

[5] Wan v McDonald (1992) 105 ALR 473.

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