This Week in Legal Ethics – Residential Schools: Advising Clients When Lawyers Leaves Firm and Charges

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LegalEthicsBannerBy Melanie Hodges Neufeld

The Ethics Committee has released the following ruling to provide guidance for the profession when dealing  with Indian Residential School claimants if an associate leaves the firm.

Cite as:                              2015 SKLSPC 10
Code Section(s):             2.07 (9), 2.07 (10), 3.01 (2)

Facts:

Lawyer X, who had been an associate lawyer with The Firm for approximately 10 years, indicated to firm partner Lawyer Y that they intended to end their employment with The Firm, effective immediately.  At the time of their departure, Lawyer X indicated that they told Lawyer Y that they were not in a position at that moment to provide The Firm with new business contact information.  However, they were willing to provide such when it was available, to assist in the production of a joint letter for the facilitation of orderly transfer of client files.  The clients involved were almost exclusively Indian Residential School claimants under the Independent Assessment Process (“IAP”).

Beginning on the day that Lawyer X departed, The Firm began to produce letters to the clients of the firm to whose files Lawyer X had been assigned.  That letter indicated that Lawyer X had left the firm and that The Firm was “unaware where [they] had relocated to”.  Approximately half of the required letters were produced, signed and ready to be mailed by the following morning.  Mid-morning, the day following their departure, Lawyer X contacted Lawyer Y, enclosing their new contact information and requesting that contact with the clients contain their contact information and “give them information about their choice in legal representation”.  The remaining letters that had not already been prepared were modified to remove the line about being “unaware where Lawyer X had relocated to”, but did not add in Lawyer X’s new contact information, and both sets of letters were mailed to clients that day (the day following Lawyer X’s departure).

All of the letters from The Firm also contained the following:

“If you wish to have a different firm represent you in this matter, all disbursements that we have incurred to date will be billed and must be paid prior to the file being transferred.”

In regular circumstances, IAP are not expected to be able to pay disbursements out-of pocket, with disbursements to be paid by the Government of Canada through that process’ proper procedures.

Within a few days after their departure, Lawyer X had begun to receive communications from clients who were reportedly distressed when they received the letter from The Firm.  Realizing that The Firm had not, in fact, provided the clients with their contact information, Lawyer X decided to prepare and send their own letter to the clients, including a form for the client to sign authorizing transfer of the file to Lawyer X’s new firm.  Also included with the letter was a business card for Lawyer X’s new firm.  On the back of the business card was printed a promise of a Tim Horton’s gift certificate and Lawyer X’s thanks if the client completed and returned the file transfer authorization before a certain date.

Shortly thereafter, Lawyer X was advised by the Law Society to cease this offer and did not end up sending any gift cards.

Eventually, with the assistance of the Law Society and counsel, a true “joint letter” letter was sent to all of the clients, asking them to disregard all previous letters from both the firm and Lawyer X.  Thereafter, complaints were brought by both parties regarding the conduct by the other.

Ruling:

The three primary issues considered by the Committee were:

  1. What information should go to the clients when a lawyer leaves a firm?
  2. Guidance with regard to terms relating to payment requirements to go into a joint letter, should a client decide to leave a firm.
  3. Propriety of Lawyer X’s Tim Horton’s card offer in their solicitation letter.

In considering the letters sent out by The Firm upon Lawyer X’s departure, the Committee determined that it was not appropriate for The Firm to continue to produce and send letters to clients without including Lawyer X’s new contact information, after such information had been received.  Once Lawyer Y received Lawyer X’s new contact information, they ought to have included this in all letters created after that point, making it a true “joint letter”.

The Committee determined that the offer of the nominal Tim Horton’s gift card amount did not result in any direct Code breach, but was certainly in poor taste and put the member at risk of damaging the reputation and dignity of the profession.  Such tactics are not advisable.

With regard to the statements regarding disbursements made in the letters to clients authorized by Lawyer Y, the Committee acknowledges that a joint letter ought to contain information regarding payment arrangements which will be required, should a client choose to follow a departing lawyer or otherwise remove their file from a firm.  However, lawyers/firms must be very careful to ensure that the stated payment requirements are accurate and specific to the circumstances of each individual client.  In the case of the IAP applicant clients, to indicate that they would be required to pay out-of-pocket for disbursements incurred by the firm would amount to inappropriate coercion, as many would not be in a position to pay those amounts, nor would they be expected to in the normal course of their application.  Payment requirements in joint letters must be strictly accurate, in relation to the specific payment arrangements with the client.

 

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