Editor's Note:
State Bar Ethics Opinions cite the applicable California Rules of Professional Conduct in effect at the time of the writing of the opinion. Please refer to the California Rules of Professional Conduct Cross Reference Chart for a table indicating the corresponding current operative rule. There, you can also link to the text of the current rule.
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What are the ethical requirements and proscriptions relating to contacts with clients when private law firms dissolve or when one or more attorneys withdraw?
Both the private law firm and the attorneys involved in the dissolution or withdrawal owe a duty to provide fair and adequate notice of the change sufficient to allow the client an opportunity to make an informed choice of counsel.
Rules 2-101 and 2-111 of the Rules of Professional Conduct of the State Bar of California.
The dissolution of a private law firm or the withdrawal of one or more of its members imposes ethical duties upon both the law firm and the involved attorneys to the clients. Case law addresses the civil responsibilities of the parties, (Fox v. Abrams (1985) 163 Cal.App.3d 610; Rosenfeld, Meyer & Susman v. Cohen, et al. (1983) 146 Cal. App.3d 200; Redman v. Walters (1979) 88 Cal. App.3d 448) but the attorney's professional obligation to the clients and to his former firm members is not expressly defined by the law or by the Rules of Professional Conduct. It is the opinion of the Committee that the rules in these circumstances act as a regulatory framework, and their provisions dictate that the interests of the clients must prevail over all competing considerations if the practitioner's withdrawal from the firm or the firm's dissolution is to be accomplished in a manner consistent with professional responsibility.
The issue of what attorneys may or may not do upon withdrawal from a firm is governed by the overall principle of what is in the best interest of the clients. (Jewel v. Boxer (1984) 156 Cal.App.3d 171.) Whatever change may occur in an attorney's employment relationship does not vary the professional responsibilities the attorneys owe to the clients. (Redman v. Walters, supra, 88 Cal.App.3d 448; Crum, Dissolution of a Law Firm: Journal of the Legal Profession, pp. 278, 289-290.) Upon dissolution or withdrawal, the attorneys involved on both sides have a professional duty to act as fiduciaries to the clients who are affected by the withdrawal. (Blackmon v. Hale (1970) 1 Cal.3d 584; Little v. Caldwell (1894) 101 Cal. 553.)
Rule 2-111(A), California Rules of Professional Conduct, requires attorneys to provide for an orderly transition in the event of attorney withdrawal or dissolution, and to protect the clients' interests whenever there is a change in the employment status that materially alters the representation. This rule provides that "[A] member of the State Bar shall not withdraw from employment until he has taken steps to avoid foreseeable prejudice to... his client, including giving due notice ... allowing time for employment of other counsel, delivering to the client all papers and property to which the client is entitled, and complying with applicable law and rules."
Accordingly, whenever there is a material change in the representation of the client caused by a change in an attorney's employment status, all members of the Bar involved directly in this change have a responsibility to see that the client receives the protections required by this rule, including timely and accurate notice of the change. The policy behind the notice requirement is to allow the client an opportunity to be advised of the changed status of the attorneys, so the client can make an informed choice of counsel. (Jewel v. Boxer, supra, 156 Cal.App.3d 171; Little v. Caldwell, supra, 101 Cal. 553.)
The rights and obligations of attorneys involved in the dissolution of, or withdrawal from, a law firm are affected by rules governing attorney advertising and solicitation. Rule 2-101 prohibits communications concerning the availability for professional employment which are false, deceptive, or misleading. Nevertheless, the rule and the authorities interpreting the rule in recent years have permitted wide latitude to attorneys who wish to communicate directly with existing or potential clients for professional employment. The United States Supreme Court in Bates v. Bar of Arizona (1977) 433 U.S. 350 [97 S.Ct. 269, 53 L.Ed.2d 810], held that the states could not impose a blanket prohibition against attorney advertising. Similarly, the Supreme Court held in In re RMJ (1982) 455 U.S. 191 [105 S.Ct. 929], that, while attorney advertising was authorized by the commercial speech doctrine, misleading advertising may be properly prohibited.
Most recently, the California Supreme Court in Leoni v. State Bar (1984) 39 Cal.3d 609, dealt with the propriety of attorneys communicating their availability for professional employment through mass mailings. The court noted that recent decisions had approved the mailing of informational pamphlets as being protected by the commercial speech doctrine but held that the states could properly regulate the nature of advertising particularly with respect to legal professionals; the nature of their "product" creates an increased risk for confusion and deception if the manner and content of advertising were not subject to limitation. The court found the particular letters involved in Leoni to be deceptive and misleading, and therefore improper.
Thus, the limitations on attorney advertising are consistent with those obligations owed the attorney to his client to fairly and adequately advise the client of any change in the employment status of the attorney. Attorney false, deceptive and misleading communications can be prohibited.
Similarly, members of the State Bar are prohibited from communicating with clients in person, by telephone, or through agents acting on their behalf, in an attempt to influence the decision of the client with respect to the choice of counsel (Rule 2-101(B) and (C).) Nevertheless, if the client directs inquiries to any of the attorneys involved in the dissolution or withdrawal to obtain information necessary to make an informed choice, the lawyers have an obligation to answer these questions truthfully and accurately, bearing in mind that it is the interests of the client which govern and not the advancement of the attorney's interest in that choice.
Thus, the attorneys involved must strike a balance between the requirement that they provide adequate notice to the clients pursuant to rule 2-111, and that they not engage in client solicitation prohibited by rule 2-101.
To the extent practical, the law firm and attorneys involved in the dissolution or withdrawal should attempt to provide a joint notice to the clients regarding the change. The notice should identify the withdrawing attorneys, in what field the withdrawing attorneys will be practicing laws and the name, address, and telephone number of the leaving attorneys. This joint statement may also include information as to whether the former firm will continue to handle similar legal matters. Consistent with their obligations, the attorneys should advise the clients as to who will be handling ongoing legal work during the transition period.
In addition, the attorneys are required to inform the client of the client's right to select either the former firm, the withdrawing attorneys, or another lawyer, to handle their legal matters in the future. The client should be advised of the client's right to have all files, papers, and property delivered either to the client, or to whomever the client wishes to continue to handle the legal affairs. (Academy of California Optometrists, Inc. v. Superior Court (1975) 51 Cal.App.3d 999; Bar Association of San Francisco Formal Ethics Opinion 1984-l; Los Angeles County Bar Association Ethics Opinion 330 (1972).)
If the involved attorneys are unable, or unwilling to provide joint notice, each has an obligation and the right to communicate with the client in conformance with the guidance provided by this opinion. Unfortunately, law firm dissolutions or attorney withdrawals are often fraught with acrimony and accusations of wrongdoing. However, in the context of advising clients of these changed circumstances, lawyers must act professionally by subliming their own feelings for the benefit of their clients.
This opinion is issued by the Standing Committee on Professional Responsibility and Conduct of the State Bar of California. It is advisory only. It is not binding upon the courts, the State Bar of California, its Board of Governors, any persons or tribunals charged with regulatory responsibilities, or any member of the State Bar.
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