Introduction

 

In Texas, there is no bright line rule that states when a client file can be destroyed. Thes practice tips are based on the Texas Disciplinary Rules of Professional Conduct and the guidance provided in a few ethics opinions.

 

Applicable Rules and Ethics Opinions

 

Ensure that the destruction of a client file does not violate the following rules or ethics opinions:

 

1.      Texas Disciplinary Rules of Professional Conduct:

 

a.      Rule 1.05:  Prohibits disclosure of confidential information of current or former clients except in certain circumstances set forth in the rule.

b.      Rules 1.09 and 1.10: Prohibit a lawyer from taking adverse action against a former client related to the matter in which the lawyer represented the client.

c.      Rule 1.14: States client funds and property must be kept separate from lawyer’s own property in a trust account and records of the account shall be maintained for 5 years after termination of the representation.

d.      Rule 1.15 (d):  A lawyer must take reasonable steps to protect a client’s interest when representation ends, including giving reasonable notice to the client, allowing time for the client to hire another attorney, returning documents or property to the client, and refunding any unearned fees. A lawyer may retain documents related to the client if permitted by law provided it does not prejudice the client in the subject matter of the representation.
Note Regarding Rule 1.14 and Rule 1.15:  Rule 1.14 relates to how a lawyer should handle funds or other property that belongs to a client or third party. Ethics Opinion 627 clarifies that “other property” refers to property that is "similar to cash (such as bonds and stock certificates).”

 

2.      Ethics Opinions:

a.      Ethics Opinion 570: The client is entitled to obtain the contents of the file, including attorney notes and other work product related to the lawyer’s representation of the client, unless the lawyer is permitted or required to retain documents and can do so without prejudicing the interests of the former client in the subject matter of the representation.

b.      Ethics Opinion 627:  While Texas Disciplinary Rules of Professional Conduct do not provide specific guidance regarding the disposition of client files, they do provide basic principles and values:

                                                    i.     Confidential information of current and former clients may not be disclosed except in narrow circumstances.

                                                   ii.     Client has the right to the client’s file subject to limitations protecting the interests of other people, or in some situations, the interests of the client.

                                                  iii.     If there’s a reasonable likelihood that the client’s interests would be harmed by the destruction of the file documents and information, do not destroy the file. Factors to consider in making this determination include:

1.      Any client instructions regarding the file;

2.      The amount of time that’s passed since the file was closed and whether all applicable statutes of limitations for claims against the client and the lawyer, including malpractice claims against the attorney, have passed;

3.      The nature and content of the file, based on the attorney’s memory or case file labeling. A detailed review is not required before closing, but there should be an adequate basis for assuring that items like jewelry or original deeds are not destroyed. If no adequate basis exists, there should be a brief visual review of the file, at minimum; and

4.      Normal business practices, preferably reduced to writing.

                                                  iv.     The cost of storing the file until it can be destroyed is borne by the attorney unless otherwise agreed by client. However, if the client asks for the file to be stored longer than required, the cost of storage can be charged to the client.

c.       Ethics Opinion 657:  A client’s file will usually consist of paper documents, electronically stored documents or information, or some combination of the two. Generally, a lawyer can provide the file to the former client as it’s maintained or, at the lawyer’s expense, convert some or all of it to paper or to an electronic format. The file contents must be reasonably accessible to the ordinary client. If any information is kept in a special format that is not reasonably accessible to the ordinary client, the lawyer must bear the cost of converting the information to a reasonably accessible format or print the information in a format that can be read by the client. If the file contains anything with unique or significant value in its original form, it should be returned to the client in its original form.

 

Practice Tips

 

When a client relationship terminates, follow your firm’s file retention policy, if any, and:

 

1.      Review the file.

 

a.      Cull any protected information from the client file. Specific content in the file may be reviewable by the attorney but restricted from disclosure to the client. Be watchful for protective orders, markings that limit disclosure to “Attorney’s Eyes Only,” or other restrictions that may apply by statute, rule, or standing orders, such as:

 

                                                    i.     Criminal case discovery obtained from the prosecution may be restricted from the client. Tex. Code Crim. Proc. art. 39.14(f), (g) and ethics opinion 657.

 

                                                   ii.     Trade secret and proprietary information discovery may be restricted from the client. Misc. Order 62, ¶22 and Ex. A (N.D. Tex. Nov. 17, 2009) (standing protective order applicable to patent cases in the Northern District of Texas); Local Rules for the United States Court for the Eastern District of Texas, app. B, P. R. 2-2 (local rule applicable to patent cases in the Eastern District of Texas).

 

                                                  iii.     National security information discovery may be restricted from the client. Classified Information Procedures Act (“CIPA”), 18 U.S.C. app. 3; see U.S. v. Bin Laden, 2001 WL 66393 *2 (S.D. New York 2001) (“defense counsel have been cleared to review a category of classified documents that they may not share with their clients”).

 

b.      Return original documents/ valuables with a summary of the document retention policy. Files may contain original wills, signed contracts, stock certificates, promissory notes, property deeds, trust instruments, or other original documents like birth and marriage certificates and passports. Such items must be safeguarded, returned to the client, or disposed of, if at all, by court order.

 

2.      Return the file to the client when the representation ends or after an agreed time.

 

a.      If the file is completely electronic, returning it will be relatively easy. If paper, encourage client to come get it or mail/ship it at the client’s expense. You may want to make a copy at your own expense.

 

b.      If you keep the original file, ensure all valuables are returned to the client without delay, tell the client when the file will be destroyed, and what amount, if any, will be billed to them for storage if they wish it to be stored beyond the destruction date. See Ethics Opinion 657.

 

3.      Storage.

 

a.      Store in a location that would prevent an unauthorized person from having access to the contents of the file.

 

b.      Store in a fireproof, waterproof location.

 

c.      Per Ethics Opinion 627, the cost of storing the file until it can be destroyed is borne by the attorney unless otherwise agreed by client. However, if the client asks for the file to be stored longer than required, the cost of storage may be charged to the client.

 

4.      Destroy file only after:

 

a.      All valuable property and original documents have been removed and returned to the client (including excess IOLTA funds).

 

b.      You confirm that the destruction of the file will not prejudice the client. If destruction will do so, preserve the file, or return it to the client (subject to limitations protecting the interests of other people, or in some situations, the interests of the client).

 

c.      The expiration of:

                                                    i.     All applicable statutes of limitations for claims against the client and the lawyer, including malpractice claims. Do not ask a client permission to destroy the file before they do.

                                                   ii.     All rules, regulations, court orders, laws requiring a retention period longer than the applicable statutes of limitations.

                                                  iii.     In criminal matters, in addition to statute of limitation issues, a convicted client’s sentence and all appeals.

 

5.      What to Do with Original Documents and Trust Funds if Client Cannot Be Located.

 

If the client cannot be located to return their file or client property, or to provide consent to destroy the file, consider the following options as appropriate for the specific situation:

 

a.      Trust Account Funds:  Make a report to the Texas Comptroller regarding funds in the lawyer’s trust account when the lawyer has not been able to locate or identify the owner for longer than three years. See Tex. Comm. On Professional Ethics, Op. 602 (2010).

 

b.      Original Wills and Other Documents:

 

                                                    i.     Record the original will with the applicable county or probate clerk. See Chapter 252 of the Texas Estates Code.

                                                   ii.     Maintain storage of any original wills and documents that are not able to be returned to the client. Keep a digital copy of the original document in the event it inadvertently is destroyed.

 

c.      Court Order:  Petition the court for authority to destroy the file.

 

6.      Destroy the file in a way that protects all confidential information. Shredding is recommended.

 

7.      Consider maintaining electronic files.  They minimize the need for a paper file, reduce storage costs, and can be easily transferred to the client at the close of the case.