Attorneys are (or should be) all too familiar with the execution of engagement letters or retainer agreements at the outset of every legal matter. These documents serve a necessary and practical purpose by delineating the scope and nature of services to be provided to the client and by setting forth general expectations that will guide the representation. A topic that receives much less attention, however, is the correspondence sent at the completion of a matter that serves to memorialize the client’s understanding that the representation has concluded, and that no further legal services will be provided under the operative retainer agreement. This article discusses the contours of closing out a file by sending a closing letter (also referred to as an end-of-engagement letter) and examines the potential consequences that may flow from failing to properly communicate the end of an engagement to a client.
What is a Closing Letter?
A closing letter is a written communication to the client confirming the conclusion of legal services in connection with a specific engagement. In other words, a closing letter informs the client that the matter for which the lawyer was engaged to perform legal services has been completed. The correspondence should also confirm that it is not the expectation of the client that the lawyer will be providing any further representation or legal advice as to the completed matter. This serves to create a record that can be useful in a future malpractice action in which the client alleges that there was a continuing or ongoing duty by the lawyer related to a particular engagement.
Considerations for Crafting the Closing Letter
Regardless of how a representation ends, lawyers will want to be sure that a closing letter sets out the lawyer’s (or law firm’s) document and file retention policy, which should advise the client as to the mechanics of how the file is being stored. For example, the closing letter should document the period of time that the file will be held in storage, whether the file is being stored in hard copy form or electronically, and how and when copies of the file to which the client is entitled can or will be returned. Practitioners should be mindful about what client records may not be permissibly destroyed, and which need to be returned pursuant to the rules that apply in a given jurisdiction; to that end, the closing letter should inform the client the manner in which those original legally operative documents, such as contracts, deeds, trusts, and wills, may be retrieved. The letter should provide a space for the client to acknowledge receipt of documents, records, or property being provided at the end of the representation.
Potential Pitfalls from Failing to Send a Closing Letter
A closing letter that unambiguously communicates that an engagement has concluded also helps to prevent any misunderstanding or confusion down the line about just that: whether and when the legal representation has in fact ended. This is central to the evaluation of whether a client is considered a “current” or “former” client for purposes of a conflict-of-interest analysis. Comment [4] to the Model Rules of Professional Conduct, Rule 1.3 (“MRPCs”) explains: “[i]f a lawyer has served a client over a substantial period in a variety of matters, the client sometimes may assume that the lawyer will continue to serve on a continuing basis unless the lawyer gives notice of withdrawal.” The significance of this cannot be overstated. MRPC 1.7, governing conflicts of interest involving current clients, functionally prevents an attorney from representing a client in any matter in which the client is directly averse to a current client. See Mindscape, Inc. v. Media Depot, Inc., 973 F.Supp. 1130, 1133 (N.D. Cal. 1997) (granting disqualification motion brought against law firm in copyright infringement matter due to impermissible concurrent representation where law firm never advised plaintiff that it “considered its representation terminated.”).
Under MRPC 1.9, a lawyer is prohibited from representing a party “in the same or a substantially related matter in which the [party’s] interests are materially adverse to the interests of the former client” absent informed consent that is confirmed in writing from the former client. Any doubt as to whether an attorney-client relationship “still exists should be clarified by the lawyer, preferably in writing, so that the client will not mistakenly suppose the lawyer is looking after the client’s affairs when the lawyer has ceased to do so.” Cmt. [4] to MRPC 1.3. See also Barragree v. Tri-County Elec. Coop., 263 Kan. 446, 457 (Kan. 1997)(denying disqualification motion brought against law firm that represented plaintiff adversely to a former client, finding that the law firm’s representation of the former client concluded before the firm undertook to represent plaintiff).
The Bottom Line
Lawyers can and should effectively communicate the completion of a representation by sending the client a closing letter. Take the time now to revisit existing protocol for closing out a matter by ensuring that part of the checklist includes a well-crafted closing letter to avoid potential headaches down the line. As legal professionals, we should all strive to end every engagement on a high note.
Reprinted with permission from the April 18, 2024 edition of The Legal Intelligencer © 2024 ALM Global Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-256-2472 or reprints@alm.com.