Records, Retention & IG: Client Files and Client Identities

From the Ethical Grounds Blog (which sounds like the makings of a great name for a firm’s in-house coffee bar…) comes some interesting commentary in the just issued NYSBA Ethics Opinion 1164 (Returning client files without keeping a copy; conditions on compliance): “When a client asks you not to keep a copy of the file” —

  • “A quick recap: Upon the termination of a representation, Rule 1.16(d) requires a lawyer to surrender ‘papers and property to which the client is entitled.’ The client is entitled to ‘the file.’ A lawyer may keep a copy of the file. A lawyer’s malpractice policy might include a provision that requires a lawyer to keep a copy of the file. Today’s question: what to do if a client directs a lawyer not to keep to a copy of a the file?”

  • “Former Employer alleged that Client had misappropriated propriety information, and that some of it was in the data that Client had provided to Lawyer; Client terminated Lawyer, and hired new counsel; Lawyer forwarded the file, but kept a copy, including back-ups of the digital data; Client and Former Employer settled; the settlement required Client to “retrieve and destroy” all of the digital data; Client asks Lawyer to destroy the digital data.

  • The NYSBA’s response: A lawyer has a valid interest in keeping a copy of a former client’s file. The general rule is that a lawyer may do even over a former client’s objection. In New York, a lawyer may condition not keeping a copy on the former client providing a release.”

  • “The lawyer’s interesting in keeping a copy of the file is not unqualified. There may be times when ‘extraordinary circumstances’ exist that favor requiring a lawyer to comply with a former client’s instruction not to keep a copy of the file. A lawyer may condition compliance with a former client’s instruction to destroy copies of the file on obtaining a release and hold-harmless agreement from the former client. A lawyer may condition compliance with a former client’s instruction to destroy copies of the file on creating and keeping an inventory of the material provided to the lawyer by the former client.”

Next, a different type of fight over client files: “Covington Told To Hand Whole Client File To Flynn Associate” —

  • “Michael Flynn business associate Bijan Rafiekian won an order on Tuesday [4/9/19] telling Covington & Burling LLP to hand over notes and documents related to a false foreign agent registration that Rafiekian is accused of causing the firm to make about work he and Flynn did for the Turkish government.”

  • “A Virginia federal judge ruled that Covington must hand over the entire client file including notes containing attorneys’ thoughts to Bijan Rafiekian, a former director of the Flynn Intel Group.”

  • “Last month, he subpoenaed Covington for its client file related to the foreign agent registration he’s accused of lying to the firm about, ‘including, but not limited to, notes, memoranda, timesheets, billing records and other documents.’ Covington opposed the demand, saying the material was irrelevant, protected by attorney-client privilege and mingled in a file with non-FARA and non-FIG related work for Flynn. The firm also claimed Rafiekian was not the firm’s client.”

  • “Yes, he is, U.S. District Judge Anthony J. Trenga decided on Tuesday. Judge Trenga pointed to the fact that Flynn and Rafiekian were the only directors and shareholders of FIG. Flynn was CEO and chairman of the two-person board, but the judge said that didn’t give him the sole right to Covington’s work for the company, which Rafiekian says he paid for in part. Instead, the judge said the pair are ‘comparably situated’ within the company under Delaware law.”

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