Ethics Opinion 780
NEW YORK STATE BAR ASSOCIATION
Limitation of attorney liability, retaining copies of client’s file over client’s objection
Committee on Professional Ethics
|Opinion #780 (12/08/2004)||Topic: Retaining copies of client’s file over client’s objection; limitation of attorney liability.|
|Digest: Generally proper for a lawyer to retain copies of a client’s file; proper to require a release of malpractice liability as a condition of returning the file without retaining copies.|
|Code: DR 2-110(A)(2), 4-101(C)(4), 6-102(A), 9-102(C)(4); EC 4-6.|
1. May a lawyer retain copies of the client’s file over the objection of the client?
2. May the lawyer demand a release from liability as a condition of not retaining copies?
1. May copies of file documents be retained by the lawyer?
When a lawyer’s employment by a client ends, whether because the lawyer withdraws, the client terminates the engagement or the matter is completed, the lawyer is required to deliver to the client property, including files, which the client is entitled to receive as a matter of law. The New York Code of Professional Responsibility (the “Code”) does not provide guidance on which documents the client is entitled to receive as a matter of law. Rather, the Code provides in various sections only that the lawyer is ethically obligated to return to the client that which the client is legally entitled to receive. DR 2-110(A)(2) of the Code, governing withdrawal from employment, requires a lawyer contemplating withdrawal to “[deliver] to the client all papers and property to which the client is entitled.” Similarly, DR 9-102(C)(4) of the Code provides that a lawyer shall “[p]romptly pay or deliver to the client or third person as requested by the client or third person the funds, securities, or other properties in the possession of the lawyer which the client or third person is entitled to receive.” The question of which documents the client is entitled to receive is “generally a question of law, not ethics.” N.Y. State 766 (1993). See N.Y. State 623 (1991) (“Which documents may be deemed to belong to the lawyer is not always easy to ascertain; in certain instances, the lawyer’s ownership of such documents may be a complex issue of both law and fact.”). SeeRestatement (Third) of the Law Governing Lawyers §46(2). Although the Code does not explicitly address the issue of whether the lawyerhas an interest in the file that would permit the lawyer to retain copies of file documents, there can be little doubt that the lawyer has such an interest. As a preliminary matter, nothing in the Code prohibits a lawyer from retaining copies of the file, while EC 4-6 refers to “personal papers of the client” as distinguished from “papers of the lawyer.” DR 4-101(C)(4) of the Code provides as an exception to the general rule of confidentiality the lawyer’s right to reveal a client’s confidences or secrets in order to collect fees or defend against an accusation of wrongful conduct. Implicit in that rule is the lawyer’s right to retain copies of the file in order to collect a fee or to defend against an accusation of wrongful conduct New York case law appears to recognize that both the client and the lawyer have an interest in the file. Finally, the lawyer’s right to retain copies of the file may be reflected in a retainer agreement or an engagement letter. In summary, we agree with the several ethics opinions from other jurisdictions that a lawyer may retain copies of the file at the lawyer’s expense. This general rule may be subject to exceptions that we are not required to elaborate on in this opinion, such as where the client has a legal right to prevent others from copying its documents and wishes for legitimate reasons to ensure that no copies of a particular document be available under any circumstances.
2. May a lawyer demand a release as a condition of not retaining copies of the file?
Although this Committee has previously held that a lawyer may not insist on a general release as a condition of returning the client’s file, N.Y. State 339 (1974), it has not addressed the question whether a lawyer’s agreement to give up the right to retain copies of the file may be conditioned on such a release. Because we believe that a lawyer has a right to retain copies of the file, if the client objects to the lawyer’s retention of copies, we hold that the lawyer may insist on a general release as a condition of acquiescence. DR 6-102(A) of the Code prohibits a lawyer from “prospectively” seeking to limit liability to a client for malpractice, but does not prohibit a lawyer from seeking a release for work already completed, as contemplated here. A lawyer may “ethically negotiate with a former client for the settlement or release of potential malpractice claims, but only after the lawyer takes specific steps to insure that the negotiations are fair”, which steps include advising the client to seek independent counsel in the negotiation and consummation for the release. N.Y. State 591 (1988).
A lawyer may generally retain copies of documents in the client’s file at the lawyer’s own expense, even over the client’s objection. As a condition of foregoing this right, a lawyer may seek to have the client release the lawyer from malpractice liability.(19-04)
 In Sage Realty Corp. v. Proskauer Rose Goetz & Mendelsohn, 91 N.Y.2d 30, 37 (1997), the Court of Appeals observed that courts have “refused to recognize a property right of the attorney in the file superior to that of the client.” The New York Supreme Court case cited in Sage for that proposition is Bronx Jewish Boys v. Uniglobe, Inc.:Under New York law, an attorney has a general possessory retaining lien which allows an attorney to keep a client’s file until his/her legal fee is paid. Implied in this is the rule that attorneys have no possessory rights in the client files other than to protect their fee. In other words, the file belongs to the client.
Bronx Jewish Boys v. Uniglobe, Inc., 166 Misc. 2d 347, 350, 633 N.Y.S. 2d 711, 713 (Sup. Ct. 1995) (citation omitted, emphasis added). Although Bronx Jewish Boys held that the “file belongs to the client”, the Court of Appeals in Sage observed that both the lawyer and client have an interest in the “client’s” file. See also In re Grand Jury Proceedings (Vargas), 727 F.2d 941, 944-45 (10thCir.) (“So far as we can determine, it is a general principle of law that client files belong to the client . . . the attorney’s interest is only that of a retaining lien and his interest at best is a pecuniary one, not an interest of ownership, nor privacy”), cert. denied sub nom, Vargas v. United States, 469 U.S. 819 (1984); Matter of Calestini, 321 F. Supp. 1313, 1316 (N.D. Ca. 1971) (“In the instance of a legal file, the client has the right to the file. It is therefore ‘property’ of the client”). But seeMichigan Ethics Committee Op. R-19 (2000) (“There is no legal support in Michigan for the proposition that the files are the property of the client. The applicable legal precedent involving other professionals closely analogous to lawyers demonstrates that the courts have recognized that such professionals provide services, not goods.”)