ABA: Don't Violate Client Confidentiality When Withdrawal for Non-Payment of Fees

When your client stiffs you in the middle of litigation with an unpaid legal bill, don't you just want to complain about it to someone? Not your bartender, but someone who can do something about it -- like a judge.

Well, you can tell the judge you want to withdraw but you better not give too many details. According to a new ethics opinion, you are bound by confidentiality to disclose only information "reasonably necessary" for the court to make an informed decision. It's almost enough to make an attorney stop talking.

"The tension between a lawyer's obligation to provide the court with sufficient facts to rule on a motion and the lawyer's duty of confidentiality has been characterized in one treatise as "a procedural problem that has no fully satisfactory solution," the ABA's ethics committee said.

When Is Enough Said?

In crafting its opinion, the committee said courts have differed widely about what specific information a lawyer must provide in a motion to withdraw based on non-payment. In one case, an appeals court court reversed the denial of a motion to withdraw by a law firm that was owed more than $470,000 in fees, stating that it was "difficult to see why [the law firm] should be obliged to provide them free legal services."

However, the committee said no professional rule provides specifically for withdrawal based upon non-payment of fees -- no matter how much. Instead, lawyers must show "good cause" under Rule 1.16 and balance it against confidentiality under Rule 1.6. And when in doubt, err on the side of non-disclosure.

Judge, Can You Hear Me?

The committee said judges also need to balance the client's confidentiality and the court's need to know the reasons for the motion. The challenge usually comes when a complex case is well under way.

If a judge requires more information to determine whether good cause exists to relieve an attorney, an in camera inquiry may be appropriate. However, the committee warned, a lawyer is still subject to confidentiality obligations in such "off-the-record" discussions.

Ultimately, the committee said the model rules are "rules of reason" and withdrawal motions for unpaid fees should disclose "only such confidential information as is reasonably necessary for the court to make an informed decision on the motion."

Related Resources:

• The Ethics and Financial Impact of Dropping a Client for Nonpayment of Legal Fees (Bloomberg BNA)
• 3 Ethical Considerations When Dealing With Obnoxious Clients (FindLaw's Strategist)
• More BigLaw Firms Are Suing for Clients' Unpaid Bills (FindLaw's Strategist)