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End-of-life notice: American Legal Ethics Library

As of March 1, 2013, the Legal Information Institute is no longer maintaining the information in the American Legal Ethics Library. It is no longer possible for us to maintain it at a level of completeness and accuracy given its staffing needs. It is very possible that we will revive it at a future time. At this point, it is in need of a complete technological renovation and reworking of the "correspondent firm" model which successfully sustained it for many years.

Many people have contributed time and effort to the project over the years, and we would like to thank them. In particular, Roger Cramton and Peter Martin not only conceived ALEL but gave much of their own labor to it. We are also grateful to Brad Wendel for his editorial contributions, to Brian Toohey and all at Jones Day for their efforts, and to all of our correspondents and contributors. Thank you.

We regret any inconvenience.

Some portions of the collection may already be severely out of date, so please be cautious in your use of this material.


Arizona Legal Ethics

1.16   Rule 1.16 Declining or Terminating Representation

1.16:100   Comparative Analysis of Arizona Rule

1.16:101      Model Rule Comparison

In 2003, paragraph (c) of the Rule was revised to make clear that lawyers must comply with applicable law or court rules when seeking to terminate a representation that involves litigation. Paragraph (d) was also revised to specify what documents must be returned to the client upon the termination of a representation, and that a lawyer may not retain documents reflecting work performed for the client, or assert a lien with respect to them, if to do so would prejudice the clients' rights.

AZ-ER 1.16 and its accompanying Comment are generally identical to MR 1.16 and its accompanying Comment, except with respect to the provisions regarding a lawyer's retention of client documents and the client's file upon termination of a representation. In place of the final sentence of MR 1.16(d), AZ-ER 1.16(d) provides the following: "Upon the client's request, the lawyer shall provide the client with all of the client's documents, and all documents reflecting work performed for the client. The lawyer may retain documents reflecting work performed for the client to the extent permitted by other law only if retaining them would not prejudice the clients' rights."

1.16:102      Model Code Comparison

The rough equivalent of AZ-ER 1.16(a) in the former Code of Professional Responsibility was DR 2-109(A), which provided that a lawyer "shall not accept employment . . . if he knows or it is obvious that [the prospective client] wishes to . . . [b]ring a legal action . . . or otherwise have steps taken for him , merely for the purpose of harassing or maliciously injuring any person . . ." Nor could a lawyer accept employment if the lawyer was aware that the prospective client wished to "[p]resent a claim or defense . . . that is not warranted under existing law, unless it can be supported by good faith argument for an extension, modification, or reversal of existing law." In addition, DR 2-110(B) made withdrawal mandatory if: (1) the lawyer knew or it was obvious that the lawyer's client was bringing the legal action . . . or was otherwise having steps taken by the lawyer merely for the purpose of harassing or maliciously injuring any person; (2) the lawyer knew or it was obvious that continuation of the representation would result in a violation of a Disciplinary Rule; (3) the lawyer's mental or physical condition rendered it unreasonably difficult for the lawyer to carry out the engagement effectively; or (4) the lawyer was discharged by the client.

The provisions concerning permissive withdrawal, which is now covered by AZ-ER 1.6(b), were contained in DR 2-110(C) of the Code. That Disciplinary Rule permitted the lawyer to withdraw, regardless of the impact upon the client if the client: (1) insisted upon presenting a claim or defense that was not warranted under existing law and cannot be supported by a good faith argument for an extension, modification, or reversal of existing law; (2) personally sought to pursue an illegal course of conduct; (3) insisted that the lawyer pursue a course of conduct that was either illegal and/or prohibited under the Disciplinary Rules; (4) by the client's conduct, rendered it unreasonably difficult for the lawyer to carry out the engagement effectively; (5) insisted, in a matter not pending before a tribunal, that the lawyer engage in conduct, not prohibited under the Disciplinary Rules, but which was contrary to the judgment and advice of the lawyer; or, (6) deliberately disregarded an agreement or obligation to the lawyer as to expenses and fees.

DR 2-110(C) of the Code also permitted the lawyer to withdraw, or to seek withdrawal, where: (1) the lawyer's continued employment was likely to result in a violation of a Disciplinary Rule; (2) the lawyer's inability to work together with co-counsel indicated that the best interests of the client would be served by the lawyer's withdrawal; (3) the lawyer's mental or physical condition rendered it difficult for the lawyer to carry out the employment effectively; (4) the client knowingly and freely assented to the termination of the lawyer's employment; or (5) the lawyer believed in good faith that, in a matter pending before a tribunal, the tribunal would find other good cause for withdrawal.

AZ-ER 1.16(c) essentially provides that a lawyer must continue with a representation, even if there is good cause for terminating it, if ordered to do so by a tribunal. Former DR 2-110(A)(1) provided: "If permission for withdrawal from employment is required by the rules of a tribunal, the lawyer shall not withdraw . . . without its permission."

Finally, the provisions of AZ-ER 1.16(d) are substantially identical to former DR 2-110(A)(2) and (3).

1.16:200   Mandatory Withdrawal

AZ-ER 1.16(a) provides that, unless a lawyer is directed by a tribunal to continue in a representation, a lawyer shall not either accept or continue in an engagement if:

1.) the representation will result in violation of the Rules of Professional Conduct or other law;

2.) the lawyer's physical or mental condition materially impairs the lawyer's ability to represent the client; or

3.) the lawyer is discharged.

With respect to the first criterion that mandates withdrawal, the Comment to this aspect of the Rule observes:

A lawyer ordinarily must decline or withdraw from representation if the client demands that the lawyer engage in conduct that is illegal or violates the Rules of Professional Conduct or other law. The lawyer is not obliged to decline or withdraw simply because the client suggests such a course of conduct; a client may make such a suggestion in the hope that a lawyer will not be constrained by a professional obligation.

Comment, AZ-ER 1.16, 2.

The first of the bases for mandatory withdrawal listed in AZ-ER 1.16(a) is where the representation will result in a violation of the Rules of Professional Conduct. This has been given a relatively broad construction in Opinions issued by the Committee on the Rules of Professional Conduct ("the Committee"). For example, in Arizona Ethics Opinion No. 86-04, the Committee determined that an attorney who had entered into a contract with a city attorney's office to prosecute criminal cases, and was concerned that the caseload assigned under and contemplated by the contract was unmanageable, had a continuing ethical duty to accept no more cases than the attorney could competently prosecute at a given point in time. Similarly, in Arizona Ethics Opinion No. 90-10, the Committee advised a Public Defender whose estimated caseload greatly exceeded the standards established in State v. Joe U. Smith, 140 Ariz. 355, 681 P.2d 1374 (1984), that there was an ethical duty to decline to accept new cases, if possible, and/or to withdraw from previously undertaken engagements until the caseload became manageable under the standards established. In Arizona Ethics Opinion No. 03-05, the Committee concluded that an attorney representing a plaintiff or claimant could not, under AZ-ER 1.8, ethically enter into a settlement agreement that would require the attorney to indemnify the settling and released parties against any lien on the settlement proceeds and that, if the client insisted that the attorney agree to such a condition, the attorney would be required to withdraw.

In Arizona Ethics Opinion No. 03-05, the Committee concluded that an attorney for a plaintiff or claimant could not ethically enter into any settlement agreement that would require the attorney to indemnify the settling parties from any lien claims against the settlement proceeds. The principal basis for this conclusion was that AZ-ER 1.8 precludes attorneys from providing financial assistance to a client by paying or advancing medical expenses, and would similarly preclude the attorney from guaranteeing, or accepting ultimate liability for, the payment of such expenses. The Committee went on to note that, while AZ-ER 1.2 generally requires an attorney to abide by a client's decision whether to accept an offer of settlement, a settlement that would require the attorney to hold settling parties harmless violates AZ-ER 1.8, and the attorney cannot agree to such a condition. If the client insists that the attorney do so, then the attorney would be required to withdraw.

In Arizona Ethics Opinion No. 2001-14, the Committee addressed an inquiry from a lawyer handling a pending criminal appeal who had discovered that the client had used a false name in the trial court. The Committee advised that the lawyer must inform the client that a false name could not be used on appeal. If the client insisted on using a false name, the lawyer should seek to withdraw, but without revealing the client's use of a false name. If the motion to withdraw was denied, then the lawyer must proceed but could not rely upon or argue the client's false identity in any further representation. In Arizona Ethics Opinion No. 91-02, the Committee ruled that an attorney was not permitted to reveal to a compensation insurer the fact that the attorney's client's monthly compensations checks were in amounts in excess of what the client was entitled to receive. The Committee went on to point out, however, that, if the client refused to grant consent to disclose this fact to the insurer, the attorney was obligated to withdraw, because continued representation would involve the attorney in providing assistance in a criminal or fraudulent act in violation of AZ-ER 1.2(d).

On the other hand, in Arizona Ethics Opinion No. 88-08, the Committee determined that an attorney representing the wife in a domestic relations case who learned from the client that (1) she had surreptitiously recorded a conversation between her husband and his attorney, and (2) the recording revealed that opposing counsel had advised the husband to dispose of a substantial amount of money received as a bonus, was not required to withdraw from further representation of the wife. Similarly, in Arizona Ethics Opinion No. 2001-04, the Committee addressed the obligations of a lawyer in a civil case who receives from a client documents containing privileged or confidential information which the client had obtained from an employee of the adverse party. The Committee adopted the views of ABA Formal Opinion No. 94-382, and held that the lawyer must refrain from examining or making use of the materials, notify (with the client's consent) opposing counsel of the receipt of them, and either abide by opposing counsel's instructions as to their disposition or seek a ruling from the court. If the client refused to consent to notifying opposing counsel, the lawyer may not do so but must still refrain from examining or making use of the materials and, if the lawyer does so, the lawyer would not be required to withdraw.

Even where AZ-ER 1.16(a) requires withdrawal, a lawyer seeking such a withdrawal is placed in a difficult position if the grounds for withdrawal are based upon information learned from the client that the lawyer is required to keep confidential. The Comment to the Rule itself notes the problem thereby presented:

. . . The court may request an explanation for the withdrawal, while the lawyer may be bound to keep confidential the facts that would constitute such an explanation. The lawyer's statement that professional considerations require termination of the representation ordinarily should be accepted as sufficient . . .

Comment, AZ-ER 1.16, 3. This precise issue was presented in Maricopa County Public Defender's Office v. Superior Court In and For County of Maricopa, 187 Ariz. 162, 927 P.2d 822 (App. 1996), where the Maricopa County Public Defender's Office had unsuccessfully moved to withdraw from two unrelated cases on the grounds that it had a conflict of interest between its duty to represent zealously a current client (the defendant) and its duty of loyalty to a former client (an adverse witness). The Superior Court in both cases had denied the motions because counsel declined to disclose confidential information concerning the former client that established the nature of the conflict. The Court of Appeals reversed, observing:

As we see it, the issue has to do with disclosure: the question is whether the trial court should require defense counsel to disclose confidential information when counsel avows that counsel has an ethical conflict requiring withdrawal. We conclude that ordinarily the trial court should not do that.

Id., 187 Ariz. at 166, 927 P.2d at 826.

Even where withdrawal is mandatory, the lawyer remains subject to the obligations imposed by AZ-ER 1.16(d) to "take steps reasonably practicable to protect a client's interests." Examples of such steps that may need to be taken, specified in the Rule itself, include: (1) giving reasonable notice to the client; (2) allowing time for employment of other counsel; (3) surrendering papers and property to which the client is entitled; and (4) refunding any advance payment of fee that has not been earned. See further discussion in Section 1.16:500, infra.

1.16:210      Discharge by Client

AZ-ER 1.16(a)(3) provides that a lawyer must withdraw from the representation of a client if "the lawyer is discharged." The Comment to this aspect of the Rule states that: "A client has a right to discharge a lawyer at any time, with or without cause, subject to liability for payment for the lawyer's services." This was the rule prevailing in Arizona even before the adoption of the Arizona Rules of Professional Conduct. In State Farm Mutual Insurance Company v. St. Joseph's Hospital, 107 Ariz. 498, 489 P.2d 837 (1971), the Supreme Court noted:

. . . the law in Arizona is clear that a client has the absolute right to terminate the attorney-client relationship at any time with or without cause . . . and may without the consent of his attorney settle and compromise his claim with his adversary . . . we . . . reaffirm the power of the client at any time to discharge his attorney and to settle or compromise his own claim. Our law does not bind a person to one attorney merely because he has entered into a contingent fee relationship.

Id., 107 Ariz. at 501-02, 489 P.2d at 840-41 (citations omitted). In Arizona Ethics Opinion No. 94-02, the Committee considered, among other issues, the propriety of a provision in an attorney's so-called Personal Injury Employment Agreement, which stated that "[u]nder the law, a client has the power, but not necessarily the contract right, to discharge their attorney at any time." The Committee found that the denomination of an engagement agreement as a "Personal Injury Employment Agreement" and the inclusion of this provision was unethical because it was likely to interfere with the client's right to have counsel of his or her own choosing, and would deter clients from discharging the lawyer, even if they were dissatisfied with the lawyer's services.

In the following passage, however, the Comment to this aspect of the Rule suggests that there may be limitations, under certain circumstances, on the client's absolute right to terminate a lawyer's services:

Whether a client can discharge appointed counsel may depend upon applicable law. A client seeking to do so should be given a full explanation of the consequences. These consequences may include a decision by the appointing authority that appointment of successor counsel is unjustified, thus requiring self-representation by the client.

If the client has severely diminished capacity, the client may lack the legal capacity to discharge the lawyer, and in any event the discharge may be seriously adverse to the client's interests. The lawyer should make special effort to help the client consider the consequences and may take reasonably necessary protective action as provided in ER 1.14.

mment, AZ-ER 1.16, 5, 6. Where the discharge of the lawyer by the client makes the lawyer's withdrawal mandatory, the lawyer remains subject to the obligations imposed by AZ-ER 1.16(d) to "take steps reasonably practicable to protect a client's interests." The Comment to the Rule specifies that this is so "[E]ven if the lawyer has been unfairly discharged by the client . . ." Examples of such steps that may need to be taken, specified in the Rule itself, include: (1) giving reasonable notice to the client; (2) allowing time for employment of other counsel; (3) surrendering papers and property to which the client is entitled; and (4) refunding any advance payment of fee that has not been earned. See further discussion in Section 1.16:500, infra.

1.16:220      Incapacity of Lawyer

AZ-ER 1.16(a)(2) specifies that a lawyer may neither accept nor continue in a representation if: "the lawyer's physical or mental condition materially impairs the lawyer's ability to represent the client." Neither the Comment to the Rule nor any other Arizona authorities elaborate upon this principle.

1.16:230      Withdrawal to Avoid Unlawful Conduct

It is well established that if a lawyer's acceptance or continuation in an engagement would constitute a conflict of interest on the lawyer's part, then the lawyer must decline the engagement or withdraw. See Alexander v. Superior Court, 141 Ariz. 157, 685 P.2d 1309 (1984); Maricopa County Public Defender's Office v. Superior Court In and For County of Maricopa, 187 Ariz. 162, 927 P.2d 822 (App. 1996). This is, on analysis, merely a specific application of the general rule, stated in AZ-ER 1.16(a)(1) that a lawyer must decline employment, or withdraw from a representation, if "the representation will result in violation of the Rules of Professional Conduct . . ."

In Arizona Ethics Opinion No. 96-04, the Committee considered the situation where a firm had initially undertaken the joint representation of a driver (A) and a passenger (B) in that driver's car which had been involved in an accident with a car driven by another driver (C). After the insurance carrier for C denied the claim, asserting that the accident was entirely the fault of driver A, the law firm referred B to another firm, but proposed to retain an interest in any contingency fee earned by that other firm on B's claim. The Committee concluded that such an arrangement would constitute a non-waivable conflict of interest, and advised as follows:

Under the facts presented, we find that Law Firm A has a non-waivable conflict to the extent that Law Firm A continues to represent Client A and yet has an interest in Client B's fee. Accordingly, Law Firm A must either withdraw from the representation of A prior to reaching any agreement with Law Firm B as to the division of the fee, or alternatively, must waive any fee in B's case.

Id., p. 8. In Arizona Ethics Opinion No. 96-03, the Committee ruled that a public defender must withdraw from the representation of a criminal defendant who has a "colorable" claim of ineffective assistance of counsel against another member of the public defender's office. Finally, in Cottonwood Estates, Inc. v. Paradise Builders, Inc., 128 Ariz. 99, 624 P.2d 296 (1981), the Court held that, if a lawyer ought to testify in the client's case, and is able to withdraw without prejudicing the client's interests, then the lawyer should withdraw and permit the client to retain other trial counsel.

1.16:240      Legal Action for the Purpose of Harassing or Maliciously Injuring Any Person

The present provisions of AZ-ER 1.16(a) do not specifically provide that a lawyer must not either accept or continue in a representation if it entails pursuing on behalf of a client a legal action brought for the purpose of harassing or maliciously injuring any person. AZ-ER 1.16(a) does, however, make declination of a proposed representation, or withdrawal from an existing representation, mandatory where "the representation will result in violation of the Rules of Professional Conduct or other law...." The pursuit of a claim on behalf of a client which the lawyer knows is being brought for the sole purpose of harassing the adverse party would almost certainly involve the lawyer in a violation of the provisions of AZ-ER 3.1. See discussions under Sections 3.1:200, 3.1:300, and 3.1:400 infra. In that regard, AZ-ER 1.16(a) is the rough equivalent to DR 2-109(A) in the formal Code of Professional Responsibility, which provided that a lawyer "shall not accept employment . . . if he knows or it is obvious that [the prospective client] wishes to . . . [b]ring a legal action . . . or otherwise have steps taken for him, merely for the purpose of harassing or maliciously injuring any person...." Nor could a lawyer accept employment of the lawyer was aware that the prospective client wished to "[p]resent a claim or defense . . . that is not warranted under existing law, unless it can be supported by good faith argument for an extension, modification, or reversal of existing law." In addition, DR 2-110(B) made withdrawal mandatory if, inter alia, the lawyer knew or it was obvious that the lawyer's client was bringing the legal action . . . or was otherwise having steps taken by the lawyer merely for the purpose of harassing or maliciously injuring any person.

The pursuit of a claim brought for such a purpose, even if meritorious, may subject the lawyer to judicially-imposed sanctions, and even civil liability for abuse or process, depending upon the manner in which the claim is pursued. These issues are more fully disclosed in Sections 3.1:300 and 3.1:400 of this Narrative, infra.

1.16:300   Permissive Withdrawal

  • Primary Arizona References: AZ-ER 1.16(b) and accompanying Comment
  • Background References: ABA Model Rule 1.16(b), Other Jurisdictions
  • Commentary: ABA/BNA § 31:1101, ALI-LGL § 44, Wolfram § 9.5.3, State Bar of Arizona Manual on Professionalism (1992) 49-52; G. Hazard & W. Hodes, The Law of Lawyering §§ 1.16:302 (2d ed. 1990)

AZ-ER 1.6(b) provides that a lawyer may withdraw from representation, unless ordered to continue in it by a tribunal, if the withdrawal can be accomplished without material adverse effect on the client, under the following circumstances:

1.) where the client persists in a course of action involving the lawyer's services that the lawyer reasonably believes is criminal or fraudulent;

2.) where the client has used the lawyer's services to perpetrate a crime or fraud;

3.) where a client insists upon taking action that the lawyer considers repugnant or imprudent or with which the lawyer has a fundamental disagreement;

4.) where the client fails substantially to fulfill an obligation to the lawyer regarding the lawyer's services and has been given reasonable warning that the lawyer will withdraw unless the obligation is fulfilled;

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

6.) where other good cause for withdrawal exists.

As the Comment to this aspect of the Rule elaborates:

A lawyer may withdraw from representation in some circumstances. The lawyer has the option to withdraw if it can be accomplished without material adverse effect on the client's interests. Withdrawal is also justified if the client persists in a course of action that the lawyer reasonably believes is criminal or fraudulent, for a lawyer is not required to be associated with such conduct even if the lawyer does not further it. Withdrawal is also permitted if the lawyer's services were misused in the past even if that would materially prejudice the client. The lawyer also may withdraw where the client insists taking action that the lawyer considers repugnant or with which the lawyer has a fundamental disagreement.

Comment, AZ-ER 1.16, 7.

A lawyer seeking permission to withdraw pursuant to one of the provisions of this Rule is placed in a difficult position if the grounds for withdrawal are based upon information learned from the client that the lawyer is required to keep confidential. The Comment to the Rule itself notes the problem thereby presented:

The court may request an explanation for the withdrawal, while the lawyer may be bound to keep confidential the facts that would constitute such an explanation. The lawyer's statement that professional considerations require termination of the representation ordinarily should be accepted as sufficient.

Comment, AZ-ER 1.16, 3. This precise issue was presented in Maricopa County Public Defender's Office v. Superior Court In and For County of Maricopa, 187 Ariz. 162, 927 P.2d 822 (App. 1996), where the Maricopa County Public Defender's Office had unsuccessfully moved to withdraw from two unrelated cases on the grounds that it had a conflict of interest between its duty to represent zealously a current client (the defendant) and its duty of loyalty to a former client (an adverse witness). The Superior Court in both cases had denied the motions because counsel declined to disclose confidential information concerning the former client that established the nature of the conflict. The Court of Appeals reversed, observing:

As we see it, the issue has to do with disclosure: the question is whether the trial court should require defense counsel to disclose confidential information when counsel avows that counsel has an ethical conflict requiring withdrawal. We conclude that ordinarily the trial court should not do that.

Id., 187 Ariz. at 166, 927 P.2d at 826.

1.16:310      Withdrawal to Undertake Adverse Representation

Although there are no Arizona authorities that specifically address this issue, it is generally understood that it is improper for a lawyer to withdraw from the representation of one client so that the lawyer can accept or continue in the representation of another client in a matter in which the other client's interests are adverse to the interests of the client from whose representation the lawyer seeks to withdraw. See G. Hazard & W. Hodes, The Law of Lawyering §§ 1.16:302 (2d ed. 1990).

1.16:320      Circumstances Justifying Discretionary Withdrawal

AZ-ER 1.6(b) provides that a lawyer may withdraw from representation, unless ordered to continue in it by a tribunal, if the withdrawal can be accomplished without material adverse effect on the client, under the following circumstances:

1.) where the client persists in a course of action involving the lawyer's services that the lawyer reasonably believes is criminal or fraudulent;

2.) where the client has used the lawyer's services to perpetrate a crime or fraud;

3.) where a client insists upon taking action that the lawyer considers repugnant or imprudent or with which the lawyer has a fundamental disagreement;

4.) where the client fails substantially to fulfill an obligation to the lawyer regarding the lawyer's services and has been given reasonable warning that the lawyer will withdraw unless the obligation is fulfilled;

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

6.) where other good cause for withdrawal exists.

As the Comment to this aspect of the Rule elaborates:

A lawyer may withdraw from representation in some circumstances. The lawyer has the option to withdraw if it can be accomplished without material adverse effect on the client's interests. Withdrawal is also justified if the client persists in a course of action that the lawyer reasonably believes is criminal or fraudulent, for a lawyer is not required to be associated with such conduct even if the lawyer does not further it. Withdrawal is also permitted if the lawyer's services were misused in the past even if that would materially prejudice the client. The lawyer also may withdraw where the client insists on taking action that the lawyer considers repugnant or with which the lawyer has a fundamental disagreement.

Comment, AZ-ER 1.16, 7.

In State v. Lee, 142 Ariz. 210, 689 P.2d 153 (1984), the Court indicated that "good cause" for a lawyer seeking to withdraw would be presented by an irreconcilable conflict of personality, interest or trial strategy between the lawyer and the client. Under the former Code of Professional Responsibility, it was held that a lawyer did not violate the provision that paralleled present AZ-ER 1.16 when the lawyer withdrew from a case after advising the client that he could not present certain defenses. In re Brown, 101 Ariz. 178, 416 P.2d 975 (1966). On the other hand, in Arizona Ethics Opinion No. 86-02, the Committee on the Rules of Professional Conduct ("the Committee") ruled that an attorney who had been appointed by the Juvenile Court to represent a juvenile defendant on criminal charges could not withdraw without the Juvenile Court's permission even though the parents of the juvenile had been generally uncooperative and had made continuous efforts to intervene in the proceedings.

In Arizona Ethics Opinion No. 2001-08, the Committee on the Rules of Professional Conduct held that, when a client moves without leaving a forwarding address, and fails to communicate with the lawyer, the client renders the representation unreasonably difficult and the lawyer may withdraw under AZ-ER 1.16(b)(5). Notwithstanding, the lawyer must use reasonable diligence to attempt to locate the client to inform the client of the intent to withdraw, and must make reasonable efforts to protect the client's interests upon withdrawal. Similarly, in Arizona Ethics Opinion No. 90-11, the Committee held that a lawyer could permissibly withdraw from representation of a client after exhausting all reasonable methods to communicate with the client, and after reasonable efforts to effectively continue with the representation have failed.

In Arizona Ethics Opinion No. 88-08, the Committee considered an inquiry from an attorney representing the wife in a domestic relations case who had learned from the client that (1) she had surreptitiously recorded a conversation between her husband and his attorney, and (2) the recording revealed that opposing counsel had advised the husband to dispose of a substantial amount of money received as a bonus. The Committee determined that, while the attorney was not required to withdraw under those circumstances, the attorney was permitted to do so. Similarly, in Arizona Ethics Opinion No. 2001-04, the Committee addressed the obligations of a lawyer in a civil case who receives from a client documents containing privileged or confidential information which the client had obtained from an employee of the adverse party. The Committee adopted the views of ABA Formal Opinion No. 94-382, and held that the lawyer must refrain from examining or making use of the materials, notify (with the client's consent) opposing counsel of the receipt of them, and either abide by opposing counsel's instructions as to their disposition or seek a ruling from the court. If the client refused to consent to notifying opposing counsel, the lawyer may not do so but must still refrain from examining or making use of the materials and, if the lawyer does so, the lawyer would not be required to withdraw.

One of the frequent situations where withdrawal is sought is where the client has failed to pay the lawyer's fees and/or failed to honor the terms of a fee agreement. Seeking to withdrawal under such circumstances would appear to be warranted under the provisions of AZ-ER 1.16(b)(4), (5) or (6). Riley, Hogatt & Suagee, P.C. v. Riley, 165 Ariz. 138, 796 P.2d 940 (App. 1990) was a special action taken from an Order denying a motion to withdraw. The firm seeking to withdraw had agreed to represent a criminal defendant on felony theft charges, under a fee agreement which called for the firm to be paid a sum in cash through the defendant's employer. When the firm's fee was not paid, it sought permission to withdraw, which the trial court denied. The Court of Appeals initially noted:

Withdrawal will not be automatically allowed. Such factors as the timing of the motion to withdraw, possible prejudice to the adverse party, the court's and the public's interest in the prompt disposition of the matter and the like, will be relevant considerations. On the other hand, a timely motion to withdraw for bona fide reasons will generally be looked upon with favor.

Id., 165 Ariz. at 139-40, 796 P.2d at 941-42 (quoting Allison v. State, 436 So. 2d 792, 796, n. 9 (Miss. 1983)). The Court then concluded:

Thus, while nonpayment of fees alone may not be sufficient to warrant withdrawal, in the absence of any showing of prejudice to the defendant or to the judicial process, a motion on this ground should be granted.

Id., 165 Ariz. at 140, 796 P.2d at 942.

1.16:400   Order by Tribunal to Continue Representation

AZ-ER 1.16(c) provides that, even if good cause for terminating representation of a client exists, a lawyer must continue representation of the client if ordered to do so by a tribunal. The procedural rules governing civil and criminal matters in the Superior Court, discussed below, make clear that, once having undertaken representation of a client in such a matter and having entered an appearance on the client's behalf, a lawyer may not withdraw without seeking the permission of the Superior Court in which the matter is pending. These rules also suggest that an order directing a lawyer continue with representation of a client, notwithstanding the existence of good cause for terminating it, may take the form of a direct order to that effect, or an order denying permission to withdraw.

In civil cases, the governing rule is Rule 5.1(a) of the Arizona Rules of Civil Procedure. Rule 5.1(a)(1) specifies that no attorney shall appear in an action, or file any paper in action, without first appearing as counsel of record, and "[A]n attorney of record shall be deemed responsible as attorney of record in all matters before and after judgment until the time for appeal from a judgment has expired or a judgment has become final after appeal or until there has been a formal withdrawal from or substitution in the case. See also Rule 5(c)(2), Arizona Rules of Civil Procedure. This subpart of the Rule also specifies that there must be a formal substitution or association of counsel before any attorney, other than counsel of record, may appear.

Rule 5.1(a)(2), Ariz.R.Civ.P., which prescribes the procedures for seeking withdrawal, does not draw a substantive distinction between withdrawals and substitutions of counsel of record. Any withdrawal of an attorney who has entered an appearance as counsel of record must be approved by a formal written order of the Court, whether there is to be a substitution or not. If the application for withdrawal or substitution contains the written approval of the client, it may be submitted to the Court ex parte with a proposed written order approving the withdrawal and/or substitution. If the application does not bear the written approval of the client, counsel seeking to withdraw must proceed by motion which must be served upon the client and all other parties.

After an action has been set for trial, a withdrawal or substitution of counsel will not be permitted unless the client or the new attorney acknowledges in writing, as part of the application, an awareness of the trial date and that new counsel will be prepared for trial. The requirement of such a written acknowledgment by the client or substitute counsel may be waived by the Court if the attorney seeking permission to withdraw certifies that the client cannot be located or notified, and the Court finds good cause for permitting the attorney to withdraw.

The governing rule in criminal cases is Rule 6.3 of the Arizona Rules of Criminal Procedure. Rule 6.3(a) provides that, at the first appearance on behalf of a defendant, counsel, whether appointed or privately retained, must file a formal notice of appearance. Rule 6.3(b) specifies that counsel representing a defendant at any stage of the proceedings shall continue to represent the defendant in all further proceedings in the Superior Court, including filing a notice of appeal, unless the Court permits a withdrawal.

Withdrawals of counsel in criminal cases is governed by Rule 6.3(c). It provides that no attorney shall be permitted to withdraw after a case has been set for trial except pursuant to formal motion, which must be accompanied by the name and address of substitute counsel and a signed statement by substitute counsel that he or she is aware of the trial date and will be prepared for trial. The Rule does not specifically address withdrawals prior to a case being set for trial, but in criminal matters, trial settings are generally established at a very early stage of the proceedings. The Rule also specifies that counsel appointed by the Court may withdraw after the arraignment, on the grounds of the client's ineligibility for appointed counsel, but only upon a showing that the withdrawal will not disrupt the orderly processing of the case. In Arizona Ethics Opinion No. 86-02, the Committee on the Rules of Professional Conduct ruled that an attorney appointed by the Juvenile Court to represent a juvenile defendant could not withdraw without the Juvenile Court's permission, even though the juvenile's parents had been generally uncooperative and had made continuous efforts to intervene in the legal proceedings.

The Court has discretion, under both Rule 5.1(a)(2) of the Arizona Rules of Civil Procedure in civil cases, and under Rule 6.3 of the Rules of Criminal Procedure in criminal cases, to deny a motion to withdraw. As the Court noted in Riley, Hoggatt & Suagee, P.C. v. Riley, 165 Ariz. 138, 139-40, 796 P.2d 940, 942-42 (App. 1990):

Withdrawal will not be automatically allowed. Such factors as the timing of the motion to withdraw, possible prejudice to the adverse party, the court's and the public's interest in the prompt disposition of the matter and the like, will be relevant considerations.

While there are no Arizona authorities that specifically address the point, it would seem that, if a motion to withdraw is denied, counsel who sought to withdraw must continue with the representation of the client.

A lawyer seeking withdrawal is placed in a difficult position if the grounds for withdrawal are based upon information learned from the client that the lawyer is required to keep confidential. The Comment to the Rule itself notes the problem thereby presented:

The court may request an explanation for the withdrawal, while the lawyer may be bound to keep confidential the facts that would constitute such an explanation. The lawyer's statement that professional considerations require termination of the representation ordinarily should be accepted as sufficient.

Comment, AZ-ER 1.16, 3. This precise issue was presented in Maricopa County Public Defender's Office v. Superior Court In and For County of Maricopa, 187 Ariz. 162, 927 P.2d 822 (App. 1996), where the Maricopa County Public Defender's Office had unsuccessfully moved to withdraw from two unrelated cases on the grounds that it had a conflict of interest between its duty to represent zealously a current client (the defendant) and its duty of loyalty to a former client (an adverse witness). The Superior Court in both cases had denied the motions because counsel declined to disclose confidential information concerning the former client that established the nature of the conflict. The Court of Appeals reversed, observing:

As we see it, the issue has to do with disclosure: the question is whether the trial court should require defense counsel to disclose confidential information when counsel avows that counsel has an ethical conflict requiring withdrawal. We conclude that ordinarily the trial court should not do that.

Id., 187 Ariz. at 166, 927 P.2d at 826.

1.16:500   Mitigating Harm to Client Upon Withdrawal

AZ-ER 1.16(d) prescribes the obligations of a lawyer upon "termination" of a representation. It is clear, from the context, that the Rule is using the word "termination" primarily to refer to the premature cessation of the lawyer-client relationship, either through the lawyer's withdrawal or the client's discharge of the lawyer, before the objectives of the engagement have been achieved, and secondarily to refer to the "termination" of the relationship which occurs naturally when the engagement has been completed and the client has no further need for the lawyer's services. The overriding obligation of the lawyer in situations governed by the Rule is to "take steps to the extent reasonably practicable to protect a client's interests." Examples of such steps that may need to be taken, specified in the Rule itself, include: (1) giving reasonable notice to the client; (2) allowing time for employment of other counsel; (3) surrendering papers and property to which the client is entitled; and (4) refunding any advance payment of fee that has not been earned. The Comment to the Rule makes clear that the obligations imposed by Rule AZ-ER 1.6(d) pertain "[E]ven if the lawyer has been unfairly discharged by the client . . ."

The Disciplinary Commission has relied upon AZ-ER 1.16(d) as the authority for imposing a variety of sanctions, ranging from public censure and/or probation to disbarment in situations in which it has found that a lawyer has abandoned the lawyer's practice entirely, or failed to complete a particular engagement, without taking adequate steps to protect the interests of the clients' involved. See Matter of Brady, 186 Ariz. 370, 923 P.2d 836 (1996); Matter of Secrist, 181 Ariz. 526, 892 P.2d 862 (1995); Matter of Kaplan, 179 Ariz. 216, 877 P.2d 789 (1994); Matter of Woltman, 178 Ariz. 548, 875 P.2d 781 (1994); Matter of Peartree, 178 Ariz. 114, 871 P.2d 235 (1994); Matter of Redeker, 177 Ariz. 305, 868 P.2d 318 (1994); Matter of Evans, 175 Ariz. 404, 857 P.2d 1258 (1993); Matter of Soelter, 175 Ariz. 139, 854 P.2d 773 (1993); Matter of Hegstrom, 153 Ariz. 286, 736 P.2d 370 (1987); In re Everidge, 147 Ariz. 104, 708 P.2d 1295 (1985).

One of the specific obligations imposed upon lawyers upon premature termination of the attorney-client relationship is to refund "any advance payment of fee that has not been earned. Although there are no Arizona authorities which specifically address the point, it seems to be assumed that a lawyer is entitled to receive those fees which have been earned up to the date the relationship is terminated. This is an easy standard to apply where the fee arrangements with the client were on an hourly rate basis. Issues arise, however, where the engagement was being carried out on either a fixed fee or contingency fee basis.

In the case of contingent fee engagements, a client who enters into a contingency fee agreement with an attorney may settle, compromise or release the client's claims on any terms the client finds acceptable, without the attorney's consent, and even against the attorney's advice. Richfield Oil Corporation v. LaPrade, 56 Ariz. 100, 105 P.2d 1115 (1940). Moreover,:

Our law does not bind a person to one attorney merely because he has entered into a contingent fee relationship. If the client in the exercise of this power discharges the attorney under a contingent fee contract before his lien arises, that attorney generally has a remedy only against the client for the value of his services.

State Farm Mutual Insurance Company v. St. Joseph's Hospital, 107 Ariz. 498, 502, 489 P.2d 837, 841 (1971) (citing Walker v. Wright, 28 Ariz. 235, 236 P. 710 (1925)). In Arizona Ethics Opinion No. 84-12, the Committee deemed the question of whether an attorney who accepts a case on a contingent fee basis may charge the client an hourly fee if the attorney is discharged prior to settlement to be an issue of law and declined to decide it. The decision in Schwartz v. Schwerin, 85 Ariz. 242, 336 P.2d 144 (1959), however, would seem to suggest that, in that circumstance and absent an agreement addressing the situation, the attorney must seek relief on a quantum meruit basis, which means the reasonable value of the services rendered before being discharged. In that case, the Supreme Court indicated that the reasonable value of an attorney's services, absent an agreement between the attorney and the client, would be determined by considering four factors: (1) the qualities of the attorney/advocate; (2) the character of the work to be performed; (3) the work actually performed; and, (4) the results obtained. If, on the other hand, the contingency fee agreement contains a provision specifying that the attorney will be compensated at a specified hourly rate in the event the agreement is terminated prematurely, such a provision may be enforceable. See Crews v. Collins, 140 Ariz. 80, 680 P.2d 216 (App. 1984).

In the case of a fixed fee engagement, if the client terminates the relationship before the engagement is completed, at least some portion of the fee will be unearned. As the Comment to AZ-ER 1.5 points out: "A lawyer may require advance payment of a fee, but is obliged to return any unearned portion." Indeed, one of the specific requirements imposed by AZ-ER 1.16(d) upon termination of a representation, is that the lawyer refund "any advance payment of fee that has not been earned." In Arizona Ethics Opinion No. 89-10, the Committee determined that where the client had paid an advance retainer or fixed fee by use of a credit card, the attorney could, upon termination of the relationship, accomplish return of the unearned portion of the fee through processing a credit to the client's credit card account.

In a number of cases in which lawyers have been found to have violated AZ-ER 1.5(a) by accepting advance retainers and not completing the engagement, the Disciplinary Commission has routinely ordered restitution to the wronged clients of the unearned fees. See Matter of Brady, 186 Ariz. 370, 923 P.2d 836 (1996); Matter of Woltman, 181 Ariz. 525, 892 P.2d 861 (1995); Matter of Secrist, 181 Ariz. 526, 892 P.2d 862 (1995); Matter of Engan, 180 Ariz. 13, 881 P.2d 345 (1994); Matter of Secrist, 180 Ariz. 50, 881 P.2d 1155 (1994); Matter of Woltman, 178 Ariz. 548, 875 P.2d 781 (1994); Matter of Peartree, 178 Ariz. 114, 871 P.2d 235 (1994); Matter of Wurtz, 177 Ariz. 586, 870 P.2d 404 (1994); Matter of Elowitz, 177 Ariz. 240, 866 P.2d 1326 (1994).

Prior to the 2003 amendments to the Rule, one of the thornier, and most frequently raised, issues raised concerned the disposition of client documents and the client's "file" upon termination of a representation. AZ-ER 1.16(d) now provides that one of the steps a lawyer is required to take upon termination of a representation is "surrendering documents and property to which the client is entitled . . ." AZ-ER 1.8(i)(1), on the other hand, provides that, notwithstanding the general prohibition on a lawyer acquiring a proprietary interest in the subject matter of litigation, a lawyer may "acquire a lien granted by law to secure the lawyer's fees or expenses ..." There is obviously a potential conflict between a lawyer's obligation upon termination of representation to "take steps to the extent reasonably practicable to protect a client's interests," AZ-ER 1.16(d), and a lawyer's exercise of a right to retain the client's papers as security for the payment of the lawyer's fees.

The two principal categories of lawyer liens that have been recognized in Arizona are "charging liens" and "retaining liens." National Sales & Service Co., Inc. v. Superior Court of Maricopa County, 136 Ariz. 544, 667 P.2d 738 (1983). "Charging liens" attach to the funds or other property created or obtained by the attorney's efforts. Id. The Supreme Court has held that a "charging lien" arises only when it appears that the parties agreed to look to the fund itself for the payment of the attorney's fees. Linder v. Lewis, Roca, Scoville & Beauchamp, 85 Ariz. 118, 333 P.2d 286 (1958). "Retaining liens," on the other hand, attach to the files, books and records that come into an attorney's possession, or are generated by the attorney, during the course of an engagement.

The issue of the propriety of an attorney asserting a "retaining lien" as security for the payment of fees was first addressed in Arizona Ethics Opinion No. 81-32. The Committee essentially avoided the issue, ruling that if an attorney had a retaining lien "as a matter of law," the attorney could assert the lien, as security for the payment of fees, on client property in the attorney's possession.

The issue of whether Arizona would recognize the existence and propriety of a "retaining lien" "as a matter of law" was first (and finally) addressed in National Sales & Service Co., Inc. v. Superior Court of Maricopa County, 136 Ariz. 544, 667 P.2d 738 (1983). The Court initially pointed out that no Arizona appellate court had previously addressed the issue of whether such liens were valid, but noted that such liens were contemplated by DR 5-103(A)(1) of the Code of Professional Responsibility, which was then in effect in Arizona. The Court also noted that, in the absence of prior decisional or legislative authority to the contrary, Arizona courts were usually inclined to follow the principles of the Restatement of the Law, and that both § 62 of the Restatement of Security and § 464(b) of the Restatement (Second) of Agency recognized retaining liens in favor of an attorney as security for the payment of fees and recovery of advances. Accordingly, the Court determined:

We therefore hold that an attorney has a retaining lien as security for the general balance due him for professional services and disbursements upon the papers and other chattels of his client which come into his possession in his professional capacity.

Id., 136 Ariz. at 546, 667 P.2d at 740.

After encouraging attorneys and clients to negotiate and resolve fee disputes without resorting to the assertion of liens and/or litigation, the Court noted that there would clearly be circumstances where it would be inconsistent with the lawyer's duties to the client to assert a lien right with respect to portions of the client's file. Laboring without a detailed record that would permit it to give definitive guidance on this issue, the Court could only announce general guidelines as to when the assertion of a lien would be proper. Thus, it pointed out that it would be proper for the lien to attach to the lawyer's, and the lawyer's staff's, research notes and internal memoranda concerning the engagement. Such work product was, in the Court's view, the lawyer's property and remained the lawyer's property at least until the lawyer was paid. The Court then observed:

On the other hand, we believe it is improper for the lien to attach to a document given by the client to the lawyer for a purpose inconsistent with the fixing of a lien upon it. If, for example, a client brings an original document or instrument to a lawyer for delivery to another, then the client's purpose is inconsistent with the fixing of a lien upon the document or instrument ... Likewise, if a client brings some book, document or other chattel to his lawyer for use as an exhibit at an impending trial, the client's purpose is inconsistent with the fixing of a lien upon the document. In either of the above cases the lawyer's duty to seek his client's lawful objectives and to avoid prejudice or damage to his client are inconsistent with his assertion of a retaining lien.

Id., 136 Ariz. at 546, 667 P.2d 740 (citations omitted). Briefly summarized, the rule which emanates from the National Sales decision is that an attorney has, and may assert, a "retaining lien" with respect to work product generated by the lawyer or the lawyer's staff during the course of an engagement. With respect to other papers received and retained by the lawyer during the course of an engagement as part of the client's "file," the attorney may assert a "charging lien" as security for the payment of fees, but not if to do so would be inconsistent with the lawyer's obligations to accomplish the client's objectives or if the assertion of a lien with respect to all or any portion of the file would damage or prejudice the client's interests.

The Court in National Sales based its decision upon two separate grounds: (1) the fact that former DR 5-103(A)(1) of the Rules of Professional Responsibility (which is no longer in effect in Arizona) seemed to contemplate "retaining liens," and (2) the fact that sections of two separate Restatements, which Arizona courts are inclined to follow in the absence of contrary Arizona authority, but neither of which specifically addressed the obligations of lawyers, also seemed to recognize them.

In that regard, it is interesting to note that § 43 of the American Law Institute's Restatement of the Law Governing Lawyers takes a somewhat different approach to the issue of retaining liens. Section 43(1) does permit a lawyer to retain documents prepared by the lawyer or at the lawyer's expense as security for the payment of fees if retaining such materials would not unreasonably harm the client's or former client's interests, which is consistent with National Sales. That Section also provides, however, that a lawyer may not retain possession of, or assert a lien with respect to, a client's property, unless a statute or rule authorizes that, or the client has agreed to such an arrangement. This seems more restrictive than the rule announced in National Sales, but the issue has not been considered by the Supreme Court since the promulgation of the Restatement.

Exercise of such a "retaining lien" is, quite obviously, only proper where there are unpaid fees which the lawyer has properly earned. Thus, in Matter of Martinez, 174 Ariz. 197, 848 P.2d 282 (1993), the Disciplinary Commission imposed the sanction of public censure and probation upon the respondent for a variety of ethical violations, including violations of AZ-ER 1.16. The violation of AZ-ER 1.16 was based on the fact that Martinez, after failing to keep several clients informed as to the status of their matters and receiving requests from those clients for the return of their files, failed to turn them over. In Matter of Struthers, 179 Ariz. 216, 877 P.2d 789 (1994), the Supreme Court approved the disbarment of Struthers for a host of ethical violations, most of which grew out of his operation of a child support collection practice. In one instance, the Disciplinary Commission had found that Struthers had violated AZ-ER 1.16(d) when, after one of his clients had terminated his representation, he refused the client and her new attorney access to her file. Struthers defended this action on a variety of bases, including making the contention that he was merely exercising his lien rights with respect to the file. The Court found that it need not address that issue, because it had already found that Struthers was using an ambiguous and facially invalid fee agreement, so that in this particular instance: "Struthers collected more than a fair fee and thus had no lien and no arguable right to retain the client's file." Id., 179 Ariz. at 225, 877 P.2d at 798.

With respect to a somewhat related issue, the Committee on the Rules of Professional Conduct recently issued Arizona Ethics Opinion No. 98-07 , which addressed, albeit in a limited fashion, the issue of what the Rules of Professional Conduct require with respect to the retention and/or destruction of client files after representation of that client has terminated. The Committee was responding to inquiries from three disparate sources: (a) an attorney who had recently moved from a sole private practice to employment with a government agency, (2) a County Public Defender's Office, and (3) an attorney with a predominantly domestic relations practice. The latter included a paragraph in retainer agreements which essentially provided that, upon the full payment of applicable fees, materials provided by clients would be returned to the client, that the client was expected to retain copies of relevant documents concerning the representation provided to the client during the course of the engagement, that the client's file (with the exception, apparently, of materials provided by the client) remained the property of the attorney and that copies of such materials would subsequently be provided, either to the client or to successor counsel, only at the client's expense. The other exception was that copies of personal notes of the attorney and the attorney's paralegals and secretaries would not be copied. The paragraph concluded by advising the client that the attorney would not be responsible for maintaining any file materials for longer than five years following the end of the case or the termination of the representation, whichever first occurred. The Committee noted that the Public Defender's Office was subject to the Records and Retention Disposition Schedule published by the State's Department of Library, Archives & Public Records, pursuant to A.R.S. § 41-1351.

The Committee announced that it would address three questions, which it stated as follows:

1. What are the ethical guidelines as to client file retention and destruction of a client's file after representation of the client on a matter has terminated?

2. May an attorney ethically refuse to copy or turn over to a client internal documents such as personal notes of attorneys, or other parts of a file?

3. Must a County Public Defender's Office, or any lawyer, give a prior client the client's file upon request or in lieu of destruction?

The Committee then noted the issues that it considered not to be subsumed within the three it stated it was addressing and/or that it was not addressing in any event. In particular, the Committee made clear that it was not addressing, nor purporting to override, whatever requirements might be imposed by statutes and/or rules other than the Rules of Professional Conduct, such as Rule 43 of the Rules of the Arizona Supreme Court concerning trust account verification. It also stressed that it was not offering an opinion concerning "the legal issue of a client's entitlement to some or all of the documents in any file, whether in an attorney's lien situation or otherwise," nor one concerning "the legal ownership of all or any portions of the office files of past clients."

In the Opinion, the Committee assumed that representation of a client on a matter had ended, either by the matter having been concluded or through withdrawal by the attorney involved. At that point, under Rule ER 1.15(b), the lawyer is under an obligation to return to a clients any funds or other property which the client is entitled to receive. Similarly, under Rule ER 1.16(d), a lawyer is required to surrender papers and property to which a client is entitled at the conclusion of the representation, and has a continuing obligation to minimize harm to the former client after either withdrawal from or termination of a matter. Accordingly, the first rule or guideline which the Committee announced was that: "any document retention and destruction policy must provide a reasonable method of identifying that property to which a client is entitled and returning that property to the client. Depending upon the circumstances, that may or may not include the entire file."

The Committee then reviewed other Ethics Opinions, both from Arizona and other jurisdictions, which addressed, to varying degrees, the issue of the retention and/or destruction of a client file after the termination of the representation and after all property otherwise belonging to the client has been returned, noting that in many of these Opinions the issue had been treated as one of the appropriate characterization of ownership of the documents in question. The Committee then noted that the apparent logic of the Proposed Final Draft of the Restatement of the Law Governing Lawyers was that clients had a reasonable expectation, and lawyers have a reasonable duty, to preserve and make available to the client not only documents and things that were clearly the client's property, but also all documents in a lawyer's file that the client has a reasonable need for, subject only to any valid "attorney's lien" or other justifiable grounds, and that the lawyer has the burden of identifying and demonstrating such "other justifiable grounds."

Following a review of several other Ethics Opinions on the subject, the Arizona Committee announced the following rules and/or guidelines concerning the retention of client files:

1. Materials in a client's file which are obtained from the client are generally owned by the client, and a lawyer is under an ethical obligation to use reasonable efforts to return all client property, including such materials, upon termination of the representation. Materials owned by the client may not be destroyed until, and if, a reasonable effort to return such property has been made and a reasonable notice of destruction has been given. After reasonable notice, such materials must be safeguarded for a period of time equal to that under Arizona law for the abandonment of personal property, which is currently five (5) years. See A.R.S. § 44-301 et seq.

2. The balance of the client's file belongs to the lawyer, but subject to the client's interest in and right to access to it, based upon the client's reasonable expectation that the lawyer will act to minimize possible harm to the client's interests. Consequently, the lawyer has an ethical duty to allow former clients access to their files, including internal memoranda and "work product" relating to the representation, unless there is substantial justification for denying such access. The burden is on the lawyer to demonstrate justification for denying access.

3. Lawyers and law firms should establish a written client file retention and destruction policy, which complies with all case law, rule and statutory restrictions, and takes into consideration the client's foreseeable interests in securing access to the file materials.

4. The client file retention and destruction policy should include an individual file review at the conclusion of a matter for a client.

5. Written notice of the lawyer's or law firm's client file retention and destruction policies should be given to the client at or before the termination of the representation, or if not given at that point, prior to the destruction of the client's file.

6. In some circumstances, the lawyer may fulfill ethical obligations by simply tendering the entire file to the client at the termination of representation. If that is not done, then for probate and estate matters and certain types of criminal cases, retention of the file for an indefinite period is appropriate. For most other matters, a file retention period of five (5) years will be appropriate, but that period may vary depending upon the lawyer's judgment as to the client's reasonable need for the file materials.

7. Specified portions of a client's file may be withheld only upon a showing of a valid attorney's lien or other substantial justification.

8. If the client requests the entire file, the lawyer may deliver it or provide a full copy. In the latter event, or if the lawyer delivers to the client the original file and elects to retain a copy, the client should not be charged any copying costs.

9. The client may be charged for any additional copying costs incurred in responding to client requests after the original or one full copy of the file has been given to the client.

The 2003 amendments to AZ-ER 1.16(d) added the prescription that: "Upon the client's request, the lawyer shall provide the client with all of the client's documents, and all documents reflecting work performed for the client. The lawyer may retain documents reflecting work performed for the client to the extent permitted by other law only if retaining them would not prejudice the client's rights." Those amendments also added several paragraphs to the Comment to the Rule which, together with the quoted language added to the Rule itself, were intended to partially codify Arizona Ethics Opinion No. 98-07 and to provide definitive guidance on a lawyer's obligations with respect to the client's files upon termination of a representation:

Ordinarily, the documents to which the client is entitled, at the close of the representation, include (without limitation) pleadings, legal documents, evidence, legal research, work product, transcripts, correspondence, drafts and notes, but not internal practice management memoranda. A lawyer shall not charge a client for the cost of copying any documents unless the client already has received one copy of them.

Even if the lawyer has been discharged by the client, the lawyer must take all reasonable steps to avoid prejudice to the rights of the client.

Lawyers may fulfill their ethical obligations with respect to client files by returning the file to the client. File retention policies should be disclosed to the client, preferably in writing and at the inception of the relationship.

Comment, AZ-ER 1.16, 9, 10, 11.

1.16:600   Fees on Termination

Although there are no Arizona authorities which specifically address the point, it seems to be assumed that a lawyer is entitled to receive those fees which have been earned up to the date the relationship is terminated. This is an easy standard to apply where the fee arrangements with the client were on an hourly rate basis. Issues arise, however, where the engagement was being carried out on either a fixed fee or contingency fee basis.

In the case of contingent fee engagements, a client who enters into a contingency fee agreement with an attorney may settle, compromise or release the client's claims on any terms the client finds acceptable, without the attorney's consent, and even against the attorney's advice. Richfield Oil Corporation v. LaPrade, 56 Ariz. 100, 105 P.2d 1115 (1940). Moreover,:

Our law does not bind a person to one attorney merely because he has entered into a contingent fee relationship. If the client in the exercise of this power discharges the attorney under a contingent fee contract before his lien arises, that attorney generally has a remedy only against the client for the value of his services.

State Farm Mutual Insurance Company v. St. Joseph's Hospital, 107 Ariz. 498, 502, 489 P.2d 837, 841 (1971) (citing Walker v. Wright, 28 Ariz. 235, 236 P. 710 (1925)). In Arizona Ethics Opinion No. 84-12, the Committee deemed the question of whether an attorney who accepts a case on a contingent fee basis may charge the client an hourly fee if the attorney is discharged prior to settlement to be an issue of law and declined to decide it. The decision in Schwartz v. Schwerin, 85 Ariz. 242, 336 P.2d 144 (1959), however, would seem to suggest that, in that circumstance and absent an agreement addressing the situation, the attorney must seek relief on a quantum meruit basis, which means the reasonable value of the services rendered before being discharged. In that case, the Supreme Court indicated that the reasonable value of an attorney's services, absent an agreement between the attorney and the client, would be determined by considering four factors: (1) the qualities of the attorney/advocate; (2) the character of the work to be performed; (3) the work actually performed; and, (4) the results obtained. If, on the other hand, the contingency fee agreement contains a provision specifying that the attorney will be compensated at a specified hourly rate in the event the agreement is terminated prematurely, such a provision may be enforceable. See Crews v. Collins, 140 Ariz. 80, 680 P.2d 216 (App. 1984).

In the case of a fixed fee engagement, if the client terminates the relationship before the engagement is completed, at least some portion of the fee will be unearned. As the Comment to AZ-ER 1.5 points out: "A lawyer may require advance payment of a fee, but is obliged to return any unearned portion." Indeed, one of the specific requirements imposed by AZ-ER 1.16(d) upon termination of a representation, is that the lawyer refund "any advance payment of fee that has not been earned." In Arizona Ethics Opinion No. 89-10, the Committee determined that where the client had paid an advance retainer or fixed fee by use of a credit card, the attorney could, upon termination of the relationship, accomplish return of the unearned portion of the fee through processing a credit to the client's credit card account.

In a number of cases in which lawyers have been found to have violated AZ-ER 1.5(a) by accepting advance retainers and not completing the engagement, the Disciplinary Commission has routinely ordered restitution to the wronged clients of the unearned fees. See Matter of Brady, 186 Ariz. 370, 923 P.2d 836 (1996); Matter of Woltman, 181 Ariz. 525, 892 P.2d 861 (1995); Matter of Secrist, 181 Ariz. 526, 892 P.2d 862 (1995); Matter of Engan, 180 Ariz. 13, 881 P.2d 345 (1994); Matter of Secrist, 180 Ariz. 50, 881 P.2d 1155 (1994); Matter of Woltman, 178 Ariz. 548, 875 P.2d 781 (1994); Matter of Peartree, 178 Ariz. 114, 871 P.2d 235 (1994); Matter of Wurtz, 177 Ariz. 586, 870 P.2d 404 (1994); Matter of Elowitz, 177 Ariz. 240, 866 P.2d 1326 (1994).

In Arizona Ethics Opinion No. 93-03, the Committee ruled that where an attorney, at the conclusion or termination of an engagement, had returned to the client all original documents and any other documents in the file that belonged to the client, it was not improper for the attorney to charge the client to charge the client for the expense of making additional copies of the file. That Opinion, however, may have been superseded by the Committee's subsequent issuance of Arizona Ethics Opinion No. 98-07, which is discussed extensively in both Section 1.8:1140, infra, and in Section 1.16:500, supra. In that Opinion, the Committee determined that if, after termination of the relationship, the client requested return of the entire file, the lawyer may deliver it or provide a full copy. In the latter event, or if the lawyer delivers to the client the original file and elects to retain a copy, the client should not be charged any copying costs. The client may be charged for any additional copying costs incurred in responding to client requests after the original or one full copy of the file has been given to the client.

1.16:610      Termination of Lawyer's Authority [see 1.2:270]

There are no Arizona authorities that specifically discuss the impact on the lawyer's authority to act for the client, and when the termination of that authority occurs, where there has been a withdrawal under AZ-ER 1.16. The Comment to AZ-ER 1.16 notes that: "A client has a right to discharge a lawyer at any time, with or without cause, subject to liability for payment for the lawyer's services." It would seem logical to assume that, in representations not involving litigation, the lawyer's authority to act for the client terminates when the client terminates the representation. Where the client terminates the engagement of a lawyer in a litigation matter, and the lawyer must still seek the tribunal's permission to withdraw, whether the lawyer retains authority to act for the client during the period between the termination and the Court's approval of the lawyer's withdrawal, is a more difficult issue.