NOTE: This opinion was drafted prior to the enactment of MRPC 1.18, please see the rule for further guidance.

RI-240

June 26, 1995

SYLLABUS

A lawyer should give a client notice of any proposed destruction of the client's representation file if the file contains client property.

A lawyer who declines representation of a prospective client after preliminary investigative work must protect the confidences and secrets gained from the prospective client, even though the representation is declined.

Interview notes relating to a former prospective client matter and medical records otherwise readily available to the former prospective client from another source may be destroyed by a lawyer without notice to the former prospective client.

A lawyer must determine on a file-by-file basis whether a client must be notified before representation file materials may be destroyed, and what constitutes reasonable effort to notify the client.

References: MRPC 1.6, 1.15, 1.16(d), 5.1, 5.3; R-5, R-12; RI-48, RI-154, CI-922.

TEXT

In the course of developing a record retention policy, a law firm has asked for guidance in developing procedures for dealing with various kinds of closed files pertaining to client and prospective client matters. The inquiry stresses the increasing volume of such records and the costs associated with extensive efforts to contact clients for directions on file disposition or consent to file destruction.

1.The first inquiry relates to files created in the initial or preparatory phase of plaintiffs' personal injury (medical malpractice) matters that the firm declines to undertake after some preliminary investigative work. Some files contain only an interviewer's notes of information provided by the prospective client. Others contain interview notes plus copies of medical records obtained from third party sources. The matters had been rejected either prior to making any formal retainer agreement with the prospective client, or were declined very soon thereafter. The inquirer asks as to these matters whether the firm must notify the prospective client before destroying the file, and if so, whether the firm must pursue such contact efforts to the point of checking with postal authorities for a forwarding address.

Implicit in this first inquiry, and critical to the Committee's analysis of this whole issue, is dependable knowledge, obtained by an actual review of the file contents, that the files do not contain different or additional material, such as property subject to safekeeping duties under MRPC 1.15. In addition, it seems clear that the inquiry relates to files that have been closed and inactive for some period of time and that do not contain disposition directions agreed upon by the firm and the client. Because a decision to reject a prospective client's representation is communicated to the rejected client, a typical record retention policy will require file disposition directions or destruction authorization to be determined when the client-lawyer relationship begins or when the decision to decline representation is conveyed to the prospective client. Thus, we interpret this inquiry to be limited to disposition of older, closed, and rejected representation matters that have been in storage or otherwise not covered by any disposition guidelines.

2.The second inquiry relates to files of matters concluded prior to the issuance of R-5 which alerted lawyers to their record retention plan duties. The question is whether such a file may be destroyed without notice to the client if the lawyer has examined the file and determined that there is no material to which the safekeeping duties of MRPC 1.15 attach.

3.Third, the inquirer desires input on a specific file destruction policy. Files closed prior to the policy's adoption would be retained for ten years (fifteen if the client was a minor or mentally incompetent) and then destroyed, with the decision on whether to attempt advance client contact made on a case-by-case basis by the lawyer responsible for the particular matter. Prospectively, the retention periods would be five years (ten for minors or mental incompetents), and client retainer agreements would recite the policy and would authorize file destruction without notice at the end of the retention period.

4.Finally, the inquirer seeks approval of a retention policy with respect to matters closed prior to December 15, 1989, the date of issuance of R-5. Files would be reviewed by a lawyer, lawyer work product would be removed. A file would be destroyed without attempting client contact if it contains nothing of continuing importance to the client. If such valuable material is present, the firm would send one regular first class mail notice to the client, presumably to the client's last known address, with file destruction to follow the expiration of a 30-day waiting period in the absence of client response and directions.

At the outset, we repeat our familiar admonition that the Committee does not resolve questions of fact or law and that the force of its opinions is limited to inquiries resolvable under the Michigan Rules of Professional Conduct. In R-5 the Committee opined:

"Clients may reasonably expect valuable and useful information in the representation file that is not otherwise readily available to the client will not be prematurely destroyed. A lawyer who fails to obtain client input prior to destruction of a representation file is not absolved of legal liability for negligent or improper destruction of property."

Legal liability may spring from professional responsibilities derived apart from ethical rules, and a lawyer faced with such issues will no doubt find it cold comfort that the lawyer's challenged actions might not have been unethical.

As noted in R-5 and R-12, the ethical considerations relating to the retention and disposition of client files are found in MRPC 1.6 concerning the protection of the confidentiality of information provided by a client, and MRPC 1.15, relating to the safekeeping of client property; and any record retention policy must consider the provisions and purposes of these two rules. But, at least within the literal language of the rules themselves, there is an evident gap which a law firm's comprehensive record retention plan can reasonably be expected to address.

It is quite clear that closed client files which do not contain "property" subject to safeguarding duties under MRPC 1.15 may be destroyed in a secure fashion, i.e., without revealing client confidences or secrets. Certainly care must be given to the mechanics of the file destruction process (see the concluding paragraph of R-5), but client participation in the decision is not per se ethically required. Thus, where R-5 speaks of two methods of protecting confidentiality in the process of file disposition and observes that either alternative involves some sort of participation by the client, it must be emphasized that such a policy of client participation is only when clients property is present.

In amplifying the recommendation for affording a client the opportunity for input in the retention program, R-12 listed three available options, the third of which was to notify the client at the end of the record retention period and offer an opportunity for the client to retrieve the file. In describing that third recommended option, R-12 states that "if offer three is used, then the lawyer must incur the expense to make a reasonable effort to notify the client before the file's destruction."

This requires clarification. A record retention policy is drafted so as to call for an offer to deliver closed files to the client in all instances (which may not be required), failing to obtain client directions at an earlier time will force the lawyer to attempt such contact at the end of the retention period, when client contact could be more difficult and expensive due to the passage of time. In that circumstance, R-12 states, "the lawyer must incur the expense to make a reasonable effort to notify the client before the file's destruction."

By way of further clarification, R-12's mandate for client input regarding files closed prior to October 1, 1988, is directed to situations in which "client property" within the scope of MRPC 1.15 is involved. R-12 uses the term "client property," and we clarify it here to be certain it is understood that the blanket mandate for client notice refers to file materials of the sort which are subject to the safekeeping duties imposed by MRPC 1.15. Assuming that no MRPC 1.15 safekeeping duty is extant, a lawyer is not required by ethics rules to notify clients in all instances prior to destroying a closed file at the expiration of the chosen retention period.

We observe that MRPC 1.16(d) is applicable to record retention plans that deal with closed files of former clients. MRPC 1.16(d) states:

"Upon termination of representation, a lawyer should take reasonable steps to protect a client's interests, such as giving reasonable notice to the client, allowing time for employment of other counsel, surrendering papers and property to which the client is entitled, and refunding any advance payment of fee that has not been earned. The lawyer may retain papers relating to the client to the extent permitted by law."

The Committee reasoned in CI-922 that clients and former clients reasonably expect that valuable and useful information in their lawyer's files not otherwise readily available to them will not be permanently and carelessly destroyed. A lawyer must use care not to destroy or discard information that he/she 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 limitation period has not expired. Moreover, a client may need information which has not been previously given to the client, if the client may reasonably expect that it will be preserved by the lawyer.

In R-5, the Committee stated:

"The important ethical consideration is that the lawyer examine the issue of whether the client must be consulted and whether the provisions of MRPC 1.15 are triggered."

Thus, where closed client files are concerned, and where specific arrangements with the former client have not been made at the time the representation was either undertaken or terminated, a law firm's record retention policy should require, at a minimum, an examination of each file which is a candidate for destruction at the end of the chosen retention period, to ascertain whether "client property" is present. If client property is present, then the material should either be permanently retained, delivered to the client, or notice given to the client with an opportunity to object.

We turn now to the specific questions posed in the present inquiry.

1.It is clear that information that a lawyer is obligated by MRPC 1.6 to protect may be acquired in an initial consultation even if the lawyer is not retained in the matter. RI-48, RI-154. The payment of a fee or signing a formal retainer agreement are not the only events triggering a lawyer's duties under that rule. The interviewer's file notes would not exist in the absence of an intention to perform some legal analysis of the prospective client's matter. Medical records (which may be independently protected by a medical privilege) would retain their protected status in the lawyer's hands under MRPC 1.6. It need not be determined whether the files are "client files" for record retention purposes, because it is sufficient that they contain information the lawyer is obligated to protect from improper disclosure under MRPC 1.6. The application of such a duty firm-wide is embraced in MRPC 1.16(d), 5.1 and 5.3.

As to the disposition of the contents of files in rejected matters, no notice to the prospective client is ethically required unless the file contains client property. The facts provided state that the files in question contain only interviewer's notes and medical records which are "otherwise readily available to" the prospective client and it appears unlikely that the prospective client's interests would be disadvantaged were the file materials destroyed. Under those circumstances, no client notice is required before destruction. A retention period might be calculated to expire after the applicable statute of limitations period on medical malpractice claims. One would also expect that a record destruction log would be kept as part of the firm's policy, and that review and decision information would be recorded in the log.

2.The duties highlighted in R-5 and R-12 are based upon the Michigan Rules of Professional Conduct effective October 1, 1988, and apply to all property in the lawyer's custody at the time the duties were imposed. The Committee cannot approve a different standard for files accumulated prior to the effective date of the Rules and which the lawyer still holds.

A lawyer has the burden of showing the reasonableness of any destruction decision and the reasonableness of efforts to notify clients. The burden is harder to meet if the effort and cost of a client notification attempt would have been minimal and the lawyer made no attempt. It may be advisable to include on a law firm checklist a notation on a file-by-file basis as to the feasibility of a client contact attempt.

3.The Committee is not in a position to approve or revise specific elements of record retention plans. All ethics opinions on the subject have been compiled into a "Record Retention Kit" available from the State Bar Membership Services Department, and the inquirer is referred to those materials for such guidance as the Committee has provided in the past.

Nevertheless, we offer the following observations concerning the suggested elements of the inquirer's draft plan. First, record retention principles do not distinguish between retention periods for clients who are minors or mental incompetents and clients not under such legal disabilities. MRPC 1.14(a) dictates that a lawyer maintain as nearly as possible a normal client relationship with clients under such disabilities. Simply tacking five years into a record retention period does not dedicate the degree of file specific attention that a dependable record retention plan requires. As to files closed in the future, i.e., after adoption of the firm's record retention policy, we note that R-12 itself suggests that client instructions regarding eventual file disposition be obtained when the client-lawyer relationship is established.

Any policy which authorizes the destruction of client property subject to safekeeping duties under MRPC 1.15 without client notice and opportunity to object would be defective. The inquirer's suggested policy would have to include, at minimum, a file-by-file examination and file inventory to be sure that MRPC 1.15 duties are met, and a determination as to whether client notice duties are triggered.

4.Finally, we address proposed procedures for files closed before December 15, 1989, which was the issuance date of R-5. The duties highlighted in R-5 and R-12 are based upon the Michigan Rules of Professional Conduct effective October 1, 1988. The dates of the opinions are irrelevant, because the duties were in force on October 1, 1988. The Committee lacks the authority to approve other time frames for the application of a lawyer's duties.

While the Committee will not draft record retention policies and is not equipped to participate in the drafting process, we do note the following with respect to the individual elements of the suggested policy.

Individual files proposed for disposition under a record retention policy must be reviewed on a file-by-file basis, but it is not required that such review be made by a lawyer in all instances if the procedures for file review are clear and have been established by a lawyer. See 5.1 and 5.3. The services of nonlawyer personnel may be utilized.

Lawyer work product material may be removed from a closed file. See R-5.

When the file review reveals that there is no client property in the file, it may be destroyed without notification to the client.

Where a client file does contain important material (such as a will, trust, promissory note, title policy, stock certificate, bond, continuing contract or lease, etc.), the suggested one-time notice attempt, with destruction to follow in 30 days if the client does not respond, would be inadequate. R-12 states:

"Regardless of when notice is given to the client regarding disposition, the lawyer's record retention plan must have safeguards for permanently protecting certain client property such as stock certificates, original wills and contracts, and unrecorded deeds."