Supreme Court Adopts New Money Handling Guidelines

(article originally published in September 2008 E-Newsletter of Disciplinary Board of the Supreme Court of Pennsylvania)

The Supreme Court of Pennsylvania adopted a major revision of the Pennsylvania Rules regarding the handling of client funds by lawyers. In its order dated September 4, 2008, the Supreme Court adopted major changes to Rule 1.15 of the Pennsylvania Rules of Professional Conduct and Rule 221 of the Pennsylvania Rules of Disciplinary Enforcement. The full text of the revisions is set forth here.

The amendments are effective upon publication in the Pennsylvania Bulletin, which is scheduled for September 20, 2008. We will have a detailed report of the changes in the next edition of the Newsletter and posted at our website, www.padb.us, within the next few weeks.

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Calendar of Events

October 2008

6 - Young Lawyers Luncheon with Family Court Judges, Noon

7 - A CLE Event: "Overview of Procedural Changes in the Westmoreland County Sheriff's Office," 1.5 substantive credits, Noon to 1:45 p.m.

8 - Bankruptcy Committee, Noon Membership Committe, Noon Municipal Law Committee, Noon

13 - Courthouse closed in observance of Columbus Day

15 - Northern Lawyers Luncheon, Noon, King's Restaurant, New Kensington16 - Criminal Law Committee, Noon

21 - A CLE Event: "Family Law Practice Tips", Noon

22 - Ned J. Nakles American Inn of Court, 5 p.m.30 - Professor Solomon lecture UPG, 7 p.m.

November 2008

11 - Courthouse closed in observance of Veterans Day

13 - A CLE Event: "The Right to Know Act", Noon19 - Ned J. Nakles American Inn of Court, 5 p.m.

20 - A CLE Event: "An Elder Law Practitioner's Primer on Reverse Mortgages," Noon to 1:15 p.m., 1 substantive credit

Ethics Update on File Management

PBA Committee on Legal Ethics Defines File Handling Responsibilities

(article originally published in April 2007 E-Newsletter of Disciplinary Board of the Supreme Court of Pennsylvania)

The Pennsylvania Bar Association Committee on Legal Ethics and Professional Responsibility has issued a major formal opinion addressing several issues that arise out of the recurrent problem of file management. The opinion is posted at the Disciplinary Board Web site here. This nine-page opinion thoroughly examines the law of Pennsylvania on issues such as what constitutes the lawyer’s file, who owns different parts of the file, what a lawyer’s responsibilities are for providing file materials to a client, and how the cost of doing so should be allocated. It is far beyond the scope of this newsletter to recapitulate the reasoning and conclusions of such a comprehensive tract; any Pennsylvania lawyer who handles client files should read the opinion itself and carefully digest its analysis. This note will be limited to providing a map of the issues the opinion addresses and the major conclusions it reaches.

The opinion begins with the principle that “client files are maintained by a lawyer for the benefit of his or her principal, the client.” The Commonwealth Court case of Maleski v. Corporate Life Ins. Co., 163 Pa. Commw. 36, 641 A.2d 1 (1994), states a general principle that "once a client pays for the creation of a legal document, and it is placed in the client's file, it is the client, rather than the attorney, who holds a proprietary interest in that document." However, the Supreme Court of Pennsylvania has not spoken definitively on the issue of ownership of the file.

The Committee notes that the file materials are also essential business records of the lawyer. It identifies two separate issues regarding file possession and access: access to the file by the client while the representation is ongoing, and possession of the file after the representation ceases. It states a general rule that “items such as original client business records, deeds and other real estate records, estate papers, insurance policies, and personal papers should be returned to the client unless there is a specific agreement or other reason for the lawyer to retain custody.”

The second section of the opinion deals with what constitutes the “client file.” Primary documents establishing the events of the client’s case, such as pleadings, documentary evidence, and correspondence are clearly a main component of the file. However, “other documents relating to that particular representation, such as electronic mail messages, telephone notes, research notes, [and] billing materials” may also be part of the file, and these may exist or be stored in locations other than the physical folders of the file. There may also be internal documents arising from “administrative functions involved with running a law practice (such as assignment memos given to subordinate lawyers).” In an age of electronic practice, there may be e-mail, computer files, and other documents stored in multiple locations and with small variations between different recipients. The Committee notes that some items may not be part of the file, such as “memoranda and notes generated primarily for a lawyer's own purposes in working on the client's problem.” In light of such complexity, the Committee acknowledges that “it is nearly impossible to define on a prior basis what must be part of the client's file.”

As to who owns what in this mass of material, the Committee notes that there are two major points of view: a majority view is called the “entire file” view, which holds that “client is entitled to everything in the lawyer’s possession necessary to the continued representation of the client,” and a minority called the “limited file” view, holding that the client is only entitled to “core” materials, such as filed pleadings, correspondence and final memoranda on issues significant to the representation.” The Committee considers the majority “entire file” view as the prevailing rule in Pennsylvania.

In the third section of the Opinion, the Committee turns to the question of who bears the cost of making necessary copies of the file. The Committee recognizes that the terms of the client-lawyer agreement may shape the lawyer’s responsibilities. It notes,

Client requests for file materials, or copies of file materials, can arise in at least three separate contexts: (1) during the course of representation; (2) during transfer of representation between counsel; and (3) following representation.

The Committee believes that, in each of these contexts, the cost of copying and delivering file materials, as well as the cost of compiling and delivering the actual file, should be handled according to the agreement between the lawyer and the client regarding costs. The Committee recommends making some provision for these circumstances in an engagement letter.

The Committee affirms that generally the lawyer does have a right to make and retain copies of the file for the lawyer’s own use, but echoes Maleski in concluding that “where the client has paid for the creation of the file, the cost of the lawyer’s copy should be borne by the lawyer, absent agreement to the contrary.”

The core of the opinion lies in two compact summaries of its reasoning the Committee provides. On Pages 6-7, the Committee provides, in bold-faced type, a list of eight kinds of items it considers to be parts of the file to which the client is entitled:

1. briefs, pleadings, discovery requests and responses;
2. transcripts;
3. affidavits and witness statements;
4. memoranda of law, case evaluations, or strategy memoranda;
5. correspondence (including e-mail);
6. original documents with legal significance, such as wills, deeds and contracts;
7. documents or other things delivered to the lawyer by or on behalf of the client; and
8. invoices or statements sent to the client.

The Committee then specifies, on Page 7, five kinds of documents to which the client may not be entitled:

1. drafts of any of the items described above, unless they have some independent significance;
2. attorney notes from the lawyer’s personal files, unless those notes have been placed by the attorney in the case file because they are significant to the representation;
3. copies of electronic mail messages, unless they have been placed by the attorney in the file because they are significant to the representation;
4. memoranda that relate to staffing or law office administration;
5. items that the lawyer is restricted from sharing with the client due to other legal obligations (such as “restricted confidential” documents of a litigation adversary that are limited to counsel’s eyes only).

The opinion closes with a set of six recommendations for file management policies:

1. developing a detailed file storage, management, and retention policy;
2. a lawyer or lawyer's assistant (with supervision) making decisions as to how and when to destroy part or all of the file;
3. considering statutes of limitations, substantive law, tolling agreements or tolling jurisprudence, the nature of the particular case and the client's particular needs when deciding to destroy a file;
4. client confidentiality obligations continue after the representation ends and should be taken into account in file disposition;
5. an index should be maintained regarding all files destroyed or returned to clients; and
6. the lawyer and client can consider a specific agreement for handling the client file and data in complex cases.

Understand that this is a brief and oversimplified summary of a detailed and nuanced analysis, and no one should take this summary as a substitute for reading the opinion and carefully evaluating the many considerations it identifies in the increasingly complex process of file management. The Committee has put a great deal of thought and effort into providing Pennsylvania practitioners with detailed guidance, and members of the bar who handle client files would be wise to benefit from this guidance.

WBA Highlighted Download from Article:

PBA Memo: Client Files – Rights of Access, Possession and Copying, Along with Retention
Considerations (PDF file)

http://www.padisciplinaryboard.org/documents/PBAFO2007-100-CLIENT-FILES.pdf



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Young Lawyers Meeting - September 25, 2008

A meeting of the WBA Young Lawyers Committee is scheduled for Thursday, September 25, 2008 at 4 PM at the Bar headquarters.

The meeting will be prior to the Inns of Court gathering.

Please mark your calendars and contact the WBA if you plan on attending.



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Ned J. Nakles Inn of Court to Reconvene

Ned J. Nakles Inn of Court 2008-2009 Inns Year

Thursday, September 25, 2008
Wednesday, October 22, 2008
Wednesday, November 19, 2008
Thursday, December 11, 2008
Thursday, January 22, 2009
Wednesday, February 25, 2009
Wednesday, March 18, 2009
Thursday, April 30, 2009

Please mark your calendars and plan to join us on each of the meeting dates for dinner, refreshments, camaraderie and education. Also, note that meetings start at 5 pm at the bar headquarters.

Officers:
James T. Boggs President
Nancy L. Harris, Vice President
Annaliese Masser, Secretary
Jacquelyn A. Knupp, Treasurer
Donald J. Snyder, Jr., Past President

Executive Committee members:
Daniel J. Ackerman
Jack L. Bergstein
Brian P. Bronson
Richard H. Galloway
Robert I. Johnston
James E. Kopelman

Wine selections are compliments of:
(September) Don Snyder
(October) James Kopelman
(November) QuatriniRaffertyGalloway
(December) Belden Law

Free Private Dances Land Chicago Attorney in Hot Water

A DeKalb lawyer was suspended for 15 months Thursday for arranging to have a female client perform nude dances for him in exchange for credit on her legal fees, a state commission said.

Scott Robert Erwin, a lawyer since 1980, will begin his suspension Oct. 7, according to the Illinois Attorney Registration and Disciplinary Commission, a branch of the state Supreme Court that conducts investigations into attorney misconduct.Erwin, with offices at 211 N. 1st St., has not been charged criminally.Erwin represented the female client and several of her family members on several different types of cases.

The relationship began in 2001 at Heartbreakers, a Compton, Ill., strip club where, after Erwin talked to an exotic dancer, both realized they had talked to each other over the telephone about some pending legal matters, according to the commission's report of the allegations.

Erwin agreed to represent her on several legal matters, and they mutually agreed that she perform nude dances for him in his office as a way to cut down on the legal fees, according to the report.

Click here for the full article.

Family Law Committee Awards Stipend

The Family Law Committee, through the generosity of the WBA, awarded a $500.00 stipend to DeAnn McCoy, to attend the PBA Family Law Section Summer Meeting in Baltimore, MD, July 17-20, 2008. The purpose of the subsidy was to provide a first time attendee/young lawyer the opportunity to participate in the state bar function, and to increase and enhance the delegation of Westmoreland County lawyers attending the event. It was awarded to DeAnn based on her interest in expanding her knowledge of and practice in family law.

The WBA Family Law Committee is the first Family Law Committee in Pennsylvania to make such a "scholarship" award. Other attendees at the meeting from Westmoreland County were Committee Chairs Abby De Blassio and Michael J. Stewart, as well as Bruce Tobin, Michele and Eric Bononi, and Sandra Davis.

The Committee is presently considering the changes to the Pennsylvania Support Guidelines pending in the Domestic Relations Procedural Rules Committee. Copies of the proposed changes are available at the WBA Headquarters. Substantial changes are proposed, including the expansion of the guidelines to include families with monthly net incomes of up to $30,000 per month, and a formula to address support in cases formerly calculated pursuant to the Melzer case. Comments are to be submitted to the Procedural Rules Committee by October 31.

WBA Fall Gathering Quickly Approaching

Join us at the WBA Fall Gathering at the Westmoreland Country Club, honoring our special guest, The Hon. Rita Donovan Hathaway, current President of the Pennsylvania Conference of State Trial Judges • October 4, 2008

On July 18, 2008, the Hon. Rita Donovan Hathaway assumed the presidency of the Pennsylvania Conference of State Trial Judges. Please join the WBA, the Ned J. Nakles American Inn of Court, and the Westmoreland Academy of Trial Lawyers at the annual Fall Gathering as we recognized the distinguished achievement of one of "our own." $30 per person, cash bar. Entertainment by James Boggs, WBA Member and Inns President. RSVP to the WBA by September 26, 2007.

This is always a great event. We hope to see you there!!