Disengagement Letters Verses Letters of Closure - Two Sides of the Same Coin
Some may view this as me being nitpicky, but there is a difference between disengagement letters and letters of closure. Yes, while both serve to document the conclusion of representation, it’s the underlying reason for their use that differentiates the two.
As I’ve written in the past, closure letters are to be used at the conclusion of representation. Often, they are written in the form of a thank you letter that expresses a desire to have the client hire the firm again should another legal concern ever arise. Many lawyers will also use these letters as a way to let the client know what the firm’s file retention policy is, to pass along any final instructions, and to cut off the possibility of an unintended reliance.
In contrast, the purpose of a disengagement letter is to provide notice and document that the firm is withdrawing from an active matter in accordance with Rule of Professional Conduct (RPC) 1.16 Declining or Terminating Representation. In short, something has happened that necessitates the client be fired or requires the attorney to withdraw. Common situations calling for the use of a disengagement letter that are client driven include nonpayment of fees owed, no response to requests to contact the firm, a complete breakdown in the attorney-client relationship, an accusation of malpractice, or the client fires you. Attorney driven situations include the discovery of an unexpected and non-waivable conflict of interest, an appointment to the bench, a deterioration in mental health that impacts competency, a call to military service, and an accident that results in a total and permanent disability.
Regardless of the reason driving the need or desire to withdraw, disengagement letters need to cover a bit more ground than letters of closure because, again, RPC 1.16 is in play. This means that throughout the process, the interests of the client must be protected. While providing reasonable notice before the withdraw is final, following best practices, these letters should:
- Confirm that the end of the attorney-client relationship is imminent
- Set forth the reason for withdrawing
- Indicate the amount due for fees and expenses,
- Identify the importance of any upcoming deadlines
- Provide an update on the current status of the matter
- Recommend seeking other counsel, and
- Explain how the file transfer process will work
Other topics worth including if applicable would be identifying the conditions under which you will consult with a successor counsel and setting forth your file retention policy. Finally, once the letter is sent, make sure to follow through on your duty to protect the interests of your client.
With the distinctions between these two letters now made, let me briefly discuss one reason why they are so important. Both are intended to make it crystal clear that the attorney-client relationship has ended for conflict of resolution purposes on a going forward basis. These letters become the documentation that a current client has now transitioned into a past client as opposed to allowing “past” clients to view themselves as inactive current clients by default. When I think about how costly conflict of interest claims can be in the malpractice arena, this reason alone makes both letters worth their weight in gold.
Authored by: Mark Bassingthwaighte, Risk Manager
Since 1998, Mark Bassingthwaighte, Esq. has been a Risk Manager with ALPS, an attorney’s professional liability insurance carrier. In his tenure with the company, Mr. Bassingthwaighte has conducted over 1200 law firm risk management assessment visits, presented over 550 continuing legal education seminars throughout the United States, and written extensively on risk management, ethics, and technology. Mr. Bassingthwaighte is a member of the State Bar of Montana as well as the American Bar Association where he currently sits on the ABA Center for Professional Responsibility’s Conference Planning Committee. He received his J.D. from Drake University Law School.