In the session “You’re Fired! Whether, When, and How to Terminate Representation of a Client” at the 2023 Heckerling Institute on Estate Planning, Bruce M. Stone explains that in most cases, attorneys can’t simply terminate representation of a client without jumping through some hoops. Attorneys are covered by the Restatement (Third) of Agency (the Restatement), which imposes special rules and fiduciary duties on agents with respect to their principals. A lawyer’s decision to terminate the attorney/client relationship is a fiduciary decision. There’s one exception to this general rule: An attorney must withdraw from representation when such representation will result in the attorney violating rules of professional conduct or another law.
Here are some of the points Stone made during the session.
Ways to Terminate
Attorneys can terminate representation under certain circumstances. The termination can’t have material adverse effects on the interests of the client. Determining whether there are adverse effects depends on the facts and circumstances of each particular case. For example, the comments to the Restatement say that it could be a material burden if the client would have to spend too much time looking for another attorney or pay extensive fees to get another attorney up to speed on the case. The current attorney could mitigate these burdens by helping the client find another attorney or refunding fees that the attorney collected from the client. Another way the termination could have an adverse effect on the client is if the client divulged confidential information to the attorney and the client is reluctant to get another lawyer and make those disclosures again. If the attorney determines there will be no adverse effect, the attorney can terminate the relationship, but the decision on whether there’s an adverse effect on the client must be made in good faith.
It's also possible to terminate the relationship if the client gives their informed consent. This means that the agreement to end the relationship was reached with the client after the attorney has communicated adequate information about the risks of termination. The attorney must make reasonable efforts so that the client has enough information to make an informed decision. The attorney should disclose the facts and circumstances giving rise to the situation, the material advantages and disadvantages of termination, and any possible alternatives.
An attorney can also terminate the relationship if the client insists on course of action that the attorney believes is criminal, fraudulent or in breach of the client’s fiduciary duty. The attorney must have a reasonable belief that this is the case. The attorney can also terminate representation for less serious reasons, for example, if the client takes action that the lawyer considers imprudent, repugnant or a financial problem for the lawyer (for example, the client doesn’t pay their attorney fees). These lesser situations may require additional steps before the attorney can move ahead with the termination. For example, some laws require the attorney to get an order from the court permitting the termination.
One way to avoid having to fire a client is to refuse to represent a client in the first place. For example, say you’re approached by a client who says they’re unhappy with their current attorney, whom you happen to know is perfectly competent. The problem could be the client and not the attorney. If you get a bad feeling about a prospective client, trust your instincts. You can refuse to accept a new client for almost any reason, as long you’re not violating any statutes that prohibit discrimination. Also, Stone advised you don’t accept clients if they want you to do a type of work in which you’re lacking expertise unless you have someone you can work with who has that expertise. For example, not all estate-planning attorneys understand valuation discounts. And attorneys shouldn’t set up a trust in a state like Delaware or North Dakota if they’re not familiar with the laws of that state.