Download Draft Article on Client File Retention.04.18.16

NEW HAMPSHIRE BAR ASSOCIATION
Ethics Committee Opinion #2015-16/5
CLIENT FILE RETENTION
RULE REFERENCES:
NHRPC 1.6(a)
NHRPC 1.15
NHRPC 1.15(a)(1)
NHRPC 1.15(a)(2)
NHRPC 1.16(d)
N.H. Supreme Court Rule 50
N.H. Supreme Court Rule 50(2)(B)
SUBJECTS:
Confidentiality
Safeguarding Client Property
Materials Comprising Client File
Ownership of Client File
Disposal of Client File
ANNOTATIONS:
The client file is the client’s property, and must be returned to the client upon request.
The lawyer and client may reach an agreement as to retention and disposal of the file.
Client files must be retained for a period sufficient to avoid prejudice to the client’s interests, but
need not be retained forever. Client files may be retained in electronic format.
A retiring attorney must take reasonable steps to ensure client files are retained, either by
returning the file to the client, obtaining client permission for the files to be retained by successor
counsel, or maintaining the file in an accessible location.
QUESTIONS:
How long must a lawyer maintain a client’s file?
What are the obligations of a retiring attorney with respect to a client’s file?
BACKGROUND:
The Committee has been asked to provide guidance as to the retention of client files and as to the
obligations of retiring attorneys regarding client files. These are among the questions most
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frequently asked of the Committee; review of the applicable principles seems timely and likely to
benefit the bar.
ANALYSIS
With the exception of financial records, there is no specific New Hampshire Rule of Professional
Conduct or New Hampshire Supreme Court Rule dictating the retention period of specific types
of files. As in most other areas of practice, the period for client file retention depends on the
specific circumstances. Retiring attorneys remain responsible for client files, and must provide
for the retention or disposal of client files.
The touchstones for analysis of this issue are the attorney’s continuing obligations to avoid
prejudice to the client’s interests under Professional Conduct Rule 1.16(d) and to maintain the
confidentiality of client information under Professional Conduct Rule 1.6(a). See Ethical
Considerations and the Retention of Client Files, (NHBA Ethics Committee, March 18, 1999).
As with other details of the attorney-client relationship, it is prudent for attorneys to discuss
with their clients -- and to document in an engagement letter -- all of the issues surrounding the
client’s file. This includes what the client file will contain (be sure to address email, text
messages, and even voice messages), how long the attorney will retain the file, and what will
ultimately happen to the file.
What is the “Client File” and Who Owns It?
The New Hampshire Rules of Professional Conduct offer no definition of the “client file” or
“papers and property to which the client is entitled” as those terms are used in Rule 1.16(d). The
New Hampshire Supreme Court has determined that the “client file” comprises the “entire file”
maintained by the attorney on the client’s behalf. Averill v. Cox, 145 N.H. 328, 339 (2000).
The “entire file” includes all materials, including e-mails and materials maintained in electronic
format, relating to the representation of the client. See, e.g., ABA Formal Op. 471 (2015). With
communication by text message between client and attorney becoming more common, a lawyer
would be wise to consider this material to be part of the client file as well. See Obligation to
Provide Electronic Materials, 2005-06/3 (NHBA Ethics Comm., January 2006).
The New Hampshire Supreme Court held in Averill that the client’s file belongs to the client
and, upon request, an attorney must provide the client with the entire file. It is sound risk
management for the attorney to retain a copy of the file.
May the Attorney Withhold any Part of the Client File?
The Supreme Court in Averill v. Cox suggested that an attorney may withhold portions of the
client file but did not determine which specific portions, if any, could be withheld. The Court
did note, though, that in some jurisdictions “work product” may be withheld, and file contents
may be withheld in some circumstances when disclosure would violate an obligation to a third
party. Averill v. Cox, 145 N.H. at 339 (citing Sage Realty v. Proskauer Rose Goetz, 91 N.Y.2d
30, 666 N.Y.S.2d 985 (1997)); see Restatement of the Law Governing Lawyers § 46(2) and (3)
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(2000). ABA Op. 471 (2015) noted other “commonly recognized exceptions” to the “entire file”
requirement including materials relating to the attorney’s assessment of the client and materials
containing information which, if released, could endanger the health, safety or welfare of others.
While some jurisdictions have carved out some exceptions to the “entire file” requirement, a
lawyer must consider how withholding portions of the file might damage the client’s interests
going forward. This is a fact-specific analysis, and it may be prudent to err on the side of
production. See Colorado Ethics Handbook Op. 104 (1999).
How Long Must the Client File be Retained?
New Hampshire Supreme Court Rule 50(2)(B) requires financial records of client funds to be
retained for six (6) years from the date of final distribution. See New Hampshire Professional
Conduct Rule 1.15(a) (“the lawyer shall maintain the minimum financial records with respect to
the client and third party funds as may be required by the New Hampshire Supreme Court
Rules”). This includes receipt and disbursement journals or comparable records containing a
record of deposits into and disbursements from each client trust account, ledgers showing the
source of all funds deposited into each client trust account, copies of accountings to clients and
third persons, disbursement records, copies of monthly reconciliations, and other documents. Id.
Supreme Court Rule 50 should be carefully reviewed for a complete list of the financial records
that must be retained.
Neither the Supreme Court Rules nor the Rules of Professional Conduct specify the retention
period for other types of client files and documents. The consensus of ethics opinions is that
client files need not be retained indefinitely. See, e.g., Tenn. Formal Op. 2015-F-160 (2015);
ABA Op. 1384 (1977); D.C. Bar Op. 206 (1989); 58 Ala. Lawyer 368 (Nov. 1997).
The New Hampshire Bar Association Ethics Committee addressed this issue in a Practical Ethics
article dated March 4, 1987. The Committee cited ABA Op. 1384, which established guidelines
for client file retention as follows:
1. Unless the client consents, a lawyer should not destroy or discard items that clearly or
probably belong to the client. Such items include those furnished to the lawyer by or in
behalf of the client, the return of which could reasonably be expected by the client, and
original documents such as wills and deeds (especially when not filed or recorded in
the public records). [See Rule 1.15(a)(1) of the N.H. Professional Conduct Rules.]
2. A lawyer should use care not to destroy or discard information that the lawyer knows
or should know may still be necessary or useful in the assertion or defense of the client’s
position in a matter for which the applicable statutory limitations period has not
expired. [Special consideration should be given to files involving minors or other
situations where the statutes of limitations may be tolled.]
3. A lawyer should use care not to destroy or discard information that the client may need,
has not previously been given to the client and is not otherwise readily available to the
client, and which the client may reasonably expect will be preserved by the lawyer.
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4. In determining the length of time for retention or disposition of a file, a lawyer should
exercise discretion. The nature and contents of some files may indicate a need for longer
retention than do the nature and contents of other files, based upon their obvious
relevance and materiality to matters that can be expected to arise.
5. A lawyer should take special care to preserve accurate and complete records of the
lawyer’s receipt and disbursement of trust funds for six years after final distribution of
funds. See N. H. Professional Conduct Rule 1.15(a)(2). [See also N.H. Supreme Court
Rule 50.]
6. In disposing of a file, a lawyer should protect the confidentiality of the contents. [See
N.H. Professional Conduct Rule 1.6(a).]
7. A lawyer should not destroy or dispose of a file without screening it in order to
determine that consideration has been given to the matters discussed above.
8. A lawyer should preserve, perhaps for an extended time, an index or identification of
the files that the lawyer has destroyed or disposed of.
See Ethical Consideration and the Retention of Client Files (NHBA Ethics Comm., March 18,
1999); N.H. Professional Conduct Rule 1.15 (Ethics Committee Comments). These principles
remain viable and should aid attorneys in analyzing the issue of client file retention generally.
Criminal defense files are subject to the same considerations of prejudice to the client's interest
and confidentiality as outlined in this article. By way of example, the New Hampshire Public
Defender's Office typically retains misdemeanor files for 2 years from the end of the
representation or completion of the client's sentence, and felony files for 5 years from the end of
the representation or completion of the client's sentence, whichever is longer.
What are the Lawyer’s Responsibilities for Client Files when the Attorney Retires?
Dissolution or retirement from practice does not relieve a lawyer of the professional obligation
to maintain closed files. See, e.g., N.Y. State Bar Op. 460 (1977). If the lawyer is part of a law
firm, the firm is responsible for maintaining the client files. See, e.g., N.Y. State Bar Op. 623
(1991).
A retiring lawyer is not required to notify former clients of her or his retirement, provided the
lawyer has made arrangements for the safekeeping of files for an appropriate period of time.
Assuming a retiring lawyer has not changed his or her residence and can reasonably be contacted
by former clients, the lawyer may satisfy the safekeeping requirement by keeping the files in a
location readily accessible to the retiring lawyer, while maintaining the confidentiality of the
files. The retiring lawyer may choose to notify the clients, and, if an agreement has not already
been reached with regard to the client files, the lawyer may propose placing the files with a
named attorney who will assist the retiring lawyer in closing out his or her law practice, or
assisting the client to transfer the files to an attorney chosen by the client; or returning the files to
the client. See Fla. Bar Op. 77-1 1977 (Revised 1992). Similarly, the Ohio Bar Association
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advises consumers that “[l]lawyers who are retiring, or who can anticipate suspension of their
right to practice, will generally have time to notify clients and return files and property or obtain
permission to provide them to a lawyer approved by the client.” What Happens When a
Lawyer’s Practice Closes? Ohio State Bar Ass’n (Dec. 3, 2015).
What Should I do about all these Old Files?
Return client file to the client
There is no ethical prohibition against an agreement between an attorney and client regarding the
retention of client files (other than the financial records described in Supreme Court Rule 50).
The attorney and client may agree, for example, that the client’s file will be returned to the client
when the representation is complete. (As noted above, though, it is prudent risk management for
the attorney to keep a copy of the file.)
The attorney may address the future disposition of the client’s file in the initial engagement
agreement, or after the representation has been concluded. However, the attorney should be wary
of boilerplate policies concerning file destruction, as each file requires an individual assessment
under the guidelines listed above. If the attorney intends to destroy the file, the client should be
notified and afforded an opportunity to retrieve it if the client wishes to do so. See Anne E.
Trevethick and Peter G. Beeson, New Hampshire’s Guidance on Client Records Retention, N.H.
Bar News (March 19, 2010).
Retain file in electronic format
No rule requires that the client file must be retained in hard copy. Scanning and electronic
storage has become increasingly common and is ethically permissible provided reasonable
provisions are made to preserve client confidences as required in Rule 1.6, and to comply with
other applicable law such as HIPAA. See Constance L. Vecchione, Talking Trash Recycled
(Again) (Mass. BBO) (March 2014).
What about original documents?
Several other jurisdictions have determined that original documents such as wills, trusts, or
settlement agreements may have intrinsic value and comprise client property within the scope of
Professional Conduct Rule 1.15(a), thus making them subject to the rules relating to the
safekeeping of client property. See Wis. Ethics Op. E-98-1 (1998); 58 Ala. Lawyer 368
(November 1997); Mich. Ethics Op. R-12 (1991). Otherwise there is no ethics rule requiring that
attorneys maintain original documents, but, as a practical matter, attorneys may retain these
documents at the request of their clients. Before any files are destroyed, they should be carefully
reviewed to ensure original documents are removed. The attorney may wish to then analyze the
circumstances of the representation and the terms of the engagement letter to determine whether
these original documents may be destroyed.
• By the NHBA Ethics Committee
This opinion was submitted for publication to the NHBA Board of Governors at its May
19, 2016 meeting.
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