In my previous blog post, I briefly discussed the little known (at least to clients) retaining lien. That’s because most lawyers don’t tell clients about this. By the time most clients find out about the retaining lien, it is usually too late to do much about it other than bring an action against your former law firm to get your documents back.
Most (but not all) states permit attorneys to refuse to turn over documents or property of the client if the attorney claims that money is owed. An attorney doesn’t actually have to prove that the money is owed, but simply needs to make the claim. (For further information, a detailed law review article on the topic can be found here.) Imagine you have a dispute with an attorney and you decide to obtain different legal counsel. Your new attorney needs the documents to complete the legal task but your former attorney refuses to turn the documents over until you pay fees that you dispute. If you did seek a new attorney, the chances are pretty good that you weren’t happy with the representation that you received and you probably do not believe the attorney deserves to be paid what is claimed. Basically a retaining lien is the law firm’s way of saying to you: “too bad for you that you are unhappy with our work, pay up or else.”
Usually, if there is a fee dispute with an attorney, this would be resolved through negotiation, litigation or dispute resolution such as arbitration. However, the retaining lien is designed to give attorneys leverage over former clients. Some states even allow attorneys to hold onto documents or property that are not even related to the dispute. Because some states do not permit this and other states have various exceptions, it is not necessarily a black-and-white situation, but there is a big enough gray area in what needs to be turned over by an attorney, and when, that the better approach for clients is to avoid the problem in the first place, at least as far as documents go. Even if you do not think that there is any possibility that the documents you turn over to an attorney may be needed at some future date , the fact is that you will likely need those documents if you ever dispute legal fees or make a claim that the attorney was negligent.
The best way to approach this is to address it prior to retaining a law firm. For example, unless there is a particular reason to provide originals, only give your attorney copies of documents rather than originals, and keep a copy of everything you give the attorney. Even better, scan your documents or have them scanned by a copy place, and provide your attorney with a PDF version of the documents. That way you have a permanent, easy to store copy, and the law firm does not have to scan the documents. Most often you can scan the documents for less than you will be charged to do this by a law firm. You can find this out simply by asking the law firm what it charges to scan, and compare that with the charge from a local copy place. You may even want to consider purchasing a scanner with a sheet feeder and scanning the documents yourself.
Whether you keep scanned or paper copies of your documents, that only addresses part of the issue. The other part of the issue is that during the course of representation, attorneys are likely to create and to receive numerous documents. The amount and nature of the documents depend on what you’re being represented for, but there will often be email communications between your law firm and others, research, draft documents, as well as final versions of documents. If the case involved litigation, there may be discovery of documents, pleadings, and orders from the court. Prior to retaining a law firm, you may want to find out what its policy is regarding providing copies of documents during the course of representation. Although things have changed dramatically with the advent of computers (making it extremely easy for law firms to provide copies of everything in real time), by doing so a law firm will not be able to use the retention of documents as leverage if there is a future dispute over fees. That may be one reason why many law firms do not automatically copy everything during the course of litigation.
Because it is so easy to provide copies nowadays simply by sending an email, if the law firm you are considering hiring balks at doing this, you may want to find out the reason. If there is some reasonable explanation of why it would be difficult to provide copies of everything during the course of representation as the copies are created, you may also want to consider proposing to the law firm a provision where the law firm waives its right to a retaining lien. If the firm is not going to assure you that you will be getting copies of everything and if the firm refuses to waive its right to a retaining lien, you will then have to decide whether this issue is important enough for you to look elsewhere for legal representation.
Author: Howard Altschuler
(Click here for a brief summary of my other blog posts on various legal malpractice related issues)
(Disclaimer: Please note that nothing in this blog or website is legal advice, and this post does not create an attorney-client relationship. You should always consult with an attorney for any legal malpractice issues, fee dispute, or ethical concerns that you may have. Thanks!) Copyright (c) 2014 by Howard Altschuler, All Rights Reserved