I have written before about Colorado’s Ethics Rule
1.16A, the most helpful rule ever promulgated by the Colorado Supreme
Court. See Making Molehills Out of Mountains (9
April 2016). Rule 1.16A provides both guidance
and ethical safe harbors enabling Colorado lawyers to ethically manage their client
file archives.
From the Attic to the Cellar
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| The Equitable Building (1892) |
When I began practicing in 1981, our firm had just
celebrated its fifth anniversary. Our entire
client archives could be housed of a small wood and chicken wire “cage” in the dark
and somewhat musty attic of the 1892 Equitable Building where, as a clerk and
young associate, I was sometimes sent to find and retrieve a file. It was not an unpleasant task. The Equitable Building attic was pleasantly
cool both winter and summer. A trip to
its attic provided a brief escape from routine, and allowed one’s imagination
to connect with ghosts of lawyers long passed, such as MaryFlorence Lathrop, who called the Equitable Building home since the day it
opened nearly a century earlier.
When we moved to Seventeenth Street Plaza in 1987 we dragged
our client files with us, where they were consigned to the nether regions of
the 1982 high-rise until they outgrew the available space to be stored onsite.
After then, like many firms, we enriched the coffers of Iron
Mountain® by sending our client files to its massive warehouses. Iron Mountain was like a cloud server for
physical documents – infinitely scalable and not tied to our physical location.
Seventeen years and one move later – this time to 16 Market
Square – we were still using Iron Mountain as our client file archive
solution. Out of sight was out of mind
until the increased cost of that “infinitely scalable” storage, combined with
constantly recurring charges for rush file delivery, finally caught and
demanded our attention. This epiphany
occurred before Rule 1.16A, when there was little guidance on how to properly
dispose of client files. We spent months
developing and implementing a protocol of notifying clients to come get their old
files if they still wanted them. Unsurprisingly,
few clients took us up on that offer.
The implementation of our file retention and destruction protocol
was a full-time job for our records department, as each file had to be reviewed
to make sure that original documents – wills, deeds, certificates of trademark
and copyright registration, and other papers having continuing legal force –
were not committed to Iron Mountain’s fiery crematorium along with notes, drafts,
correspondence, and pleadings that nobody cared about anymore.
Implementation also consumed substantial attorney time since
our protocol required our records staff to confirm any doubts about what should
be kept with the attorney assigned to the file – assuming that attorney still
practiced with our firm. It was a
Herculean labor, even for a firm then only 30 something years old, but we
finally got on top of our mountain of paper
just about the time Rule 1.16A was adopted, nine years ago on 10
February 2011.
From a Paper to a Digital Mountain
Much has changed since I breathed my last lungful of the
Equitable Building’s cool attic air.
While the completely “paperless” legal office is still a pipe dream, we
have largely moved on from Iron Mountain’s physical document “server” to an
actual digital cloud server: Netdocuments®.
While this has considerably reduced the need for, and cost of, rush file
retrieval, neither cloud servers nor Rule 1.16A have eliminated the task of
client file management and document “sanitation” – it has simply changed the
medium and process. Iron Mountain’s
document shredding has simply been replaced with digital destruction standards,
first DoD 5220.22- M, and later NIST
SP 800-88.
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| (courtesy stokio.com) |
Take Thy File Hence and Never Let It Darken My Door Again!
In my earlier
blog I observed that, despite the command of Rule
1.16(d) to “surrender[] papers . . . to which the client is entitled” “upon
termination of representation,” few lawyers do, and fewer clients object. But what about those instances where a lawyer
wants to promptly surrender the client’s file upon termination? Does Rule 1.16A, which provides safe ethical
harbors regarding the destruction of client files, create any impediment to
surrendering a file? I recently had
occasion to consider this, and take a deeper dive into Rule 1.16A. The situation was this:
A law firm was terminating representation of a client and
wanted to ethically and completely purge itself of its client’s files. Legal proceedings against the client involving
matters relating to the firm’s representation were not pending or threated, but
were viewed as a possibility at some time in the future. Were that to happen, the firm understandably did
not want to become caught up in a “litigation hold” battle,
which, among other things, would have required the firm to determine which records
were subject to the hold, segregate them, assess which records were protected
by attorney-client or work-product privileges, and assert these privileges, all
without the prospect of compensation. The
firm might even have to incur the out-of-pocket cost of outside counsel to
assist it in making the evidentiary assessments. Given the size of the client’s file this
would be a considerable undertaking, a drain on the firm’s resources, and
possibly put it at odds with its former client.
The question was “could the firm simply deliver everything to its client
(both physical and digital records)?”
The pertinent part of Rule 1.16A provides:
(a) A lawyer in private practice shall retain a client's files respecting
a matter unless:
(1) the lawyer delivers the file to the client or the client authorizes
destruction of the file in a writing signed by the client and there are no pending or
threatened legal proceedings known to the lawyer that relate to the matter.
(Emphasis added.)
While the firm was anxious to divest itself of the client’s file, it did
not want to run afoul of the highlighted language in the event litigation
commenced shortly after termination and someone second-guessed the firm’s
determination that there were no “threatened legal proceedings known to the
lawyer that relate to the matter.”
The question was:
Taking a conservative approach which assumed that litigation might arise
in the future and that someone might contend that the firm should have “known”
such proceedings were “threatened,” could the firm safely and ethically
surrender the entire file to the client, or did the highlighted language
require the firm to retain a copy the file, perhaps even against the client’s
explicit instructions to surrender it?
If the latter interpretation prevails, then Rule 1.16A’s “threatened
or pending litigation” clause creates a serious potential conflict between a
lawyer and a client or former client, effectively requiring a lawyer to act an unwilling
escrow agent for the benefit of the client’s adversaries. This would be a harsh interpretation, but not
entirely inconsistent with other provisions of the Rules of Professional
Conduct which sometimes place an attorney’s duty as an officer of the court
ahead of a lawyer’s duty to a client. See, e.g.,
Colo.
RPC 3.3 (Candor Toward the Tribunal).
Rule 1.16A is unique to Colorado, and there is no decisional law discussing
this exception.
When is a Client Not a Client?
I kibitzed with my partner Eric, co-chair of our Law
Practice Professionals Group, about the potential conflict between Rule 1.16(d), which requires the “surrender”
of papers to which a client is entitled upon termination of representation, and
1.16A. Eric’s
quick take was that, upon termination, a client is no longer “a client.”
In Eric’s view, Rule 1.16(d)’s duty to “surrender” the file upon termination takes
precedence. Further, following termination
of the attorney-client relationship and surrender of the client file, 1.16A’s exception regarding “pending or
threatened legal proceedings” is inapplicable because the client is no longer a
“client.” While I liked Eric’s result and
thought his reasoning correct, I was concerned someone might think it a little
too clever by half.
The Last Antecedent Rule
Fortunately, I had recently listened to Justice Neal
Gorsuch’s book, A Republic, If You Can Keep It. In
it Justice Gorsuch discusses application
of the last
antecedent rule, “A doctrine of interpretation by which a court finds that
qualifying words or phrases refer to the language immediately preceding the
qualifier, unless common sense shows that it was meant to apply to something
more distant or less obvious.” Nolo Plain-English Law Dictionary.
Applying of the last antecedent rule to Rule
1.16A(a)(1), the clause “and there are no pending or threatened
legal proceedings” qualifies only “or the client authorizes destruction” and
not “the lawyer delivers the file to the client.” This approach has the virtue of not inferring
to the Colorado Supreme Court a policy that clients facing litigation cannot be
trusted to honor the litigation hold requirement themselves, such that lawyers should
be impressed into involuntary service as “litigation hold agents.” It further
avoids the uncomfortable prospect of putting a lawyer in an adversarial
position with a client. Finally, such
interpretation is harmonious with Rule 1.16(d)’s affirmative requirement that a
lawyer surrender a client’s papers upon termination of representation, which
substantially predates Rule 1.16A, having previously been codified in the Model
Code of Professional Responsibility, DR 2-110(A)(2) (“a lawyer shall
not withdraw from employment until he has taken reasonable steps to avoid
foreseeable prejudice to the rights of his client, including . . ., delivering
to the client all papers . . . to which the client is entitled,”).
Both policy and statutory construction support the conclusion
that Rule 1.16A always permits a lawyer to surrender
the client’s file to the client, even when there is pending or threatened legal
proceedings relating to the work the lawyer has done. Given the potential financial and other
burdens associated with being caught in possession a former client’s file when
litigation arises, not to mention the cost of providing “perpetual care” for
such records even if litigation never arises, Rule 1.16A may, in fact, provide
an incentive to do what most lawyers have heretofore considered an anathema:
actually observing Rule 1.16(d)’s edict to promptly surrender the client’s file
upon completion of a matter.
