What Can Lawyers Take with Them Other Than People?

Many articles have highlighted the increasing trend of attorney mobility. See, e.g., Robert W. Hillman, The Property Wars of Law Firms: Of Client Lists, Trade Secrets and the Fiduciary Duties of Law Partners, 30 Fla. St. U. L. Rev. 767 (2003). In the midst of this changing landscape, however, lawyers are confronted with ethical obligations originally formulated during an era when lawyers, and particularly partners, were much less likely to leave their firms. Compounding the challenges confronting lawyers who wish to leave is that, in addition to a review of state ethics rules, they also might need to consider partnership law, agency law, trade secret law, tortious interference/unfair competition law, and property law.

While many of these issues have been addressed in recent literature, the focus has generally been on how and when a lawyer should inform the firm and clients that she is departing, and how and when she can solicit the firm's current or former clients or the firm's employees, all in the context of the general primacy of the client's interests during the lawyer's transition. See, e.g., Wayne N. Outten, Advising and Representing Law Firm Partners, National Employment Lawyers Association, Oct. 4, 2011; but see Hillman; Allison D. Rhodes, Client Files in the Digital Law Practices: Rethinking Old Concepts in an Era of Lawyer Mobility, UC Davis Legal Studies Research Paper Series, December 2010; Douglas R. Richmond, Yours Mine and Ours: Law Firm Property Disputes, 30 N. Ill U. L. Rev. 1 (2009). An important missing piece of this discussion is the departing lawyer's entitlement to electronic and hard copy documents created during the lawyer's time with the firm.

A Tangled Web

A close look at the standards for determining what documents a lawyer may take upon departing a law firm reveals a startlingly unclear and tangled area of legal ethics and law that should give any careful lawyer real pause. See Rhodes, supra at 900 (“[T]he nature of [firm intellectual property] rights is murky.”); Id. at 901 (“[I]ntellectual property ' including attorney work product and firm know how ' may transcend particular client files, and neither law nor ethics norms adequately address proprietary issues in such property.”). This article attempts to provide guidance for the departing lawyer who does not want to forego the opportunity to retain work product.

Little Definitive Guidance Exists on the Documents a Departing Lawyer May Take

The American Bar Association has issued the most prominent ethics opinion regarding a departing lawyer's ethical obligations. Notably, however, that opinion dedicates only a few paragraphs to the question of the departing lawyer's right to documents. It instructs that, “to the extent ' [the] documents [i.e., "files and other documents such as research memoranda, pleadings, and forms"] were prepared by the [departing] lawyer and are considered the lawyer's property or are in the public domain, she may take copies with her,” and that “absent special circumstances, the lawyer does not violate any Model Rule by taking with her copies of docments [sic] that she herself has created for general use in her practice.” American Bar Association, Standing Committee on Ethics and Professional Responsibility, Formal Opinion 99-414, Ethical Obligations When a Lawyer Changes Firms, Sept. 8, 1999 (“ABA Opinion 99-414″) at 8.

For documents that do not fit within these stated criteria, the Standing Committee concludes that, “the lawyer may have to obtain the firm's consent,” but frustratingly fails to identify the documents for which they must do so. Id. (emphasis added). In addition, the opinion notes that, “as with the use of client lists, the question of whether a lawyer may take with her continuing legal education materials, practice forms, or computer files she has created turns on principles of property law and trade secret law.” Id.

Finally, the most definitive guidance provided is that a “departing lawyer who is not continuing the representation may ' retain copies of client documents relating to her representation of former clients ' [,] but must ensure that the confidential client information they contain is protected in accordance with Model Rules 1.6 and 1.9.” Id. at 9.

Unfortunately, in practice, the opinion leaves departing lawyers to wonder:

1. whether the lawyer truly prepared the document or merely added to or improved the previous work of others, or merely approved the work of others, and if so, to what effect regarding the lawyer's entitlement to the document ( Cf. Hillman, supra at 917.);
2. who determines, and to what authorities should the lawyer look to determine, whether the documents are “considered the lawyer's property” ( See Richmond, supra at 24 n. 178.);
3. how the lawyer discerns whether the documents were “created for general use in her practice” or were instead specific to a particular matter;
4. precisely under what circumstances “may” the lawyer need to ask, or for that matter, when is she clearly required to ask, for permission to take copies of documents;
5. how the lawyer determines the effect of property law and trade secret law on the documents in question; and
6. how the lawyer should ultimately go about obtaining permission to make copies of documents to which she may or may not be entitled.

Although this ethics opinion provides the most authoritative guidance available, it fails to cite to any supportive authority for its relevant propositions; this may give the cautious departing lawyer additional pause. In addition, the opinion fails to address exactly what obligation the lawyer has to return copies of documents already in her possession.

Electronic Documents

Since this 1999 opinion, the proliferation of e-mail, smart phones, tablets, cloud computing, personal home computers, laptops, and their various iterations, means that sometimes electronic documents have been removed and copied, perhaps inadvertently, when downloaded or transferred. Even if a lawyer erased downloaded documents, the documents might still be recoverable through forensic means. While a departing lawyer arguably would be obligated to return any document she was not entitled to take in the first place, the duty not to take and the duty to return documents already in one's possession may be different, raising questions as to burden and waiver.

Documents the Lawyer Should Initially Assume Cannot Be Taken

What is clear from the ABA opinion, case law, and additional authorities is that the most perilous document to remove is a client list. These lists are the documents most likely to be protected by trade secret law. See Hillman supra. A client list falls far afield from documents that ABA Opinion 99-414 suggests a departing lawyer is generally entitled to take (i.e., documents she created), and the opinion specifically notes the elevated risk of taking a client list as opposed to other firm documents. See ABA Opinion 99-414 at 7 (“[D]eparting lawyer may avoid charges of engaging in unfair competition and appropriation of trade secrets if she does not use any client lists or other proprietary information ' [and] uses only publicly available information and what she personally knows about the clients' matters.”).

Nonetheless, as noted later on in the opinion, and as echoed by case law, the status of a client list as a trade secret often will depend on “who prepared the material and the measures employed by the firm to retain title or otherwise protect it from external use or from taking by departing lawyers.” Id. at 8. As this question is often a fact-intensive inquiry, the careful departing partner might seek to negotiate the use of the client list, or potentially, a partial client list limited to the clients for which she worked or with whom she had direct professional contact while at the firm. Cf. at 3-4. Whatever the strategy, a careful departing lawyer should never remove a client list unilaterally and should notify the former firm immediately if she has a list in her possession. Taking these precautions will help avoid a finding that the lawyer engaged in “dishonesty, fraud, deceit, or misrepresentation in violation of Rule 8.4(c),” to say nothing of a violation of fiduciary obligations to the firm. Id. at 8 & n.18; see also Richmond supra at 26 (suggesting that knowing violation of a firm's document or property policy may be a violation of a partner's fiduciary duty).

Documents the Departing Lawyer May Be Entitled to Take

On the other end of the spectrum, the ABA opinion, and all other available authorities, agree that departing lawyers are entitled to the client files of every client that follows them to their new firm. ABA Opinion 99-414 at 8. The opinion appears to go a step further and notes the departing lawyer may “retain copies of client documents relating to her representation of former clients.” Id. at 9 (emphasis added). It is unclear whether this language refers only to documents provided to the firm by the client, or whether it encompasses the entire client file.

Even if the opinion is read broadly in this regard, the parties may not readily agree on the scope of the client file. See Hillman, supra at 901-04. For example, does the client file extend to every email pertaining in any way to the matter or to every note or memo created at any time in connection with the matter? Or should the file encompass only the final versions of documents and public filings? Notably, ethics opinions and courts have taken varying views on the scope of the client file, and lawyers should refer to the ethics opinions and rulings in their local jurisdiction. Id.

Documents with an Indeterminate Status

Other than client lists, the potential for violation of professional responsibility standards and other standards might arise from documents in-between the two above-referenced ends of the spectrum. While the final versions of publicly filed documents are unlikely to be the subject of an ownership dispute, the “ownership” of the following types of documents is less clear: 1) drafts of publicly filed documents; 2) case strategy memoranda; 3) general litigation strategy memoranda; 4) discrete research projects; 5) CLE materials created by the lawyer; 6) discovery requests not filed with a court; 7) personalized intake forms; 8) e-mails; 9) contact lists on computers; 10) personal rolodexes; 11) form documents created or frequently used by the attorney; 12) deposition scripts; and 13) non-public drafts of articles.

A departing lawyer and her former firm may disagree over whether such documents meet the ABA Opinion's stated requirements: 1) prepared by the lawyer and considered the lawyer's property; or 2) created for general use in her practice. ABA Opinion 99-414 at 8 (emphasis added). Similarly, whether such documents constitute or contain “trade secrets” is unclear without additional information about the “measures employed by the law firm to retain title or otherwise to protect it from external use or from taking by departing lawyers.” Id. Indeed, given these criteria, the same document may have a different designation at different firms, given that the respective firms' internal policies concerning document safekeeping, e-mail use, and designation of firm property may influence the outcome. See Richmond, supra at 16.

The status of e-mails provides another example. Where a firm has promulgated a policy stating that e-mails are firm property, the firm can contend that departing lawyers are not entitled to their e-mails because they are not “considered the lawyer's property.” ABA Opinion 99-414 at 8; Samuel Lewis, Don't Let Your Firm's Proprietary Information Walk Out the Door, 17 No. 3 GPSolo 46, 51, April/May 2000. On the other hand, with respect to e-mails sent in the context of a client matter, the departing lawyer will have a strong argument with respect to current clients, and will have a possible argument with respect to former clients (depending on the reading of the ABA Opinion on a lawyer's entitlement to a former client's files).

Steps for the Careful Departing Partner

In conclusion, what should careful departing lawyers do when faced with this labyrinth of largely unanswered questions? First, they should disclose all electronic and other documents in their possession, setting forth in writing the documents they plan to keep and the basis for keeping them under the ABA Opinion and other authorities; full disclosure and candor will help ensure that the departing lawyer does not run afoul of the duty not to misrepresent or of any fiduciary duties of honesty and respect for firm policy. Second, to the extent applicable, the departing lawyer should characterize retained documents as “client documents relating to the representation of former clients.” See ABA Opinion 99-414 at 9.

Finally, careful departing lawyers should also do what may be the hardest thing for many lawyers to do ' admit that they need help and get the advice of competent counsel with respect to their rights to documents.

Wayne N. Outten, a member of this newsletter's Board of Editors, is the managing partner of Outten & Golden LLP, an employment law firm representing employees, executives, and partners, with offices in New York City, Stamford, CT, and Chicago. He co-chairs the firm's Executives & Professionals and Retaliation & Whistleblower practice groups. Cyrus E. Dugger is an associate in the firm's New York City office and a member of its Sex Discrimination & Sexual Harassment and Whistleblower & Retaliation practice groups.

Many articles have highlighted the increasing trend of attorney mobility. See, e.g., Robert W. Hillman, The Property Wars of Law Firms: Of Client Lists, Trade Secrets and the Fiduciary Duties of Law Partners, 30 Fla. St. U. L. Rev. 767 (2003). In the midst of this changing landscape, however, lawyers are confronted with ethical obligations originally formulated during an era when lawyers, and particularly partners, were much less likely to leave their firms. Compounding the challenges confronting lawyers who wish to leave is that, in addition to a review of state ethics rules, they also might need to consider partnership law, agency law, trade secret law, tortious interference/unfair competition law, and property law.

While many of these issues have been addressed in recent literature, the focus has generally been on how and when a lawyer should inform the firm and clients that she is departing, and how and when she can solicit the firm's current or former clients or the firm's employees, all in the context of the general primacy of the client's interests during the lawyer's transition. See, e.g., Wayne N. Outten, Advising and Representing Law Firm Partners, National Employment Lawyers Association, Oct. 4, 2011; but see Hillman; Allison D. Rhodes, Client Files in the Digital Law Practices: Rethinking Old Concepts in an Era of Lawyer Mobility, UC Davis Legal Studies Research Paper Series, December 2010; Douglas R. Richmond, Yours Mine and Ours: Law Firm Property Disputes, 30 N. Ill U. L. Rev. 1 (2009). An important missing piece of this discussion is the departing lawyer's entitlement to electronic and hard copy documents created during the lawyer's time with the firm.

A Tangled Web

A close look at the standards for determining what documents a lawyer may take upon departing a law firm reveals a startlingly unclear and tangled area of legal ethics and law that should give any careful lawyer real pause. See Rhodes, supra at 900 (“[T]he nature of [firm intellectual property] rights is murky.”); Id. at 901 (“[I]ntellectual property ' including attorney work product and firm know how ' may transcend particular client files, and neither law nor ethics norms adequately address proprietary issues in such property.”). This article attempts to provide guidance for the departing lawyer who does not want to forego the opportunity to retain work product.

Little Definitive Guidance Exists on the Documents a Departing Lawyer May Take

The American Bar Association has issued the most prominent ethics opinion regarding a departing lawyer's ethical obligations. Notably, however, that opinion dedicates only a few paragraphs to the question of the departing lawyer's right to documents. It instructs that, “to the extent ' [the] documents [i.e., "files and other documents such as research memoranda, pleadings, and forms"] were prepared by the [departing] lawyer and are considered the lawyer's property or are in the public domain, she may take copies with her,” and that “absent special circumstances, the lawyer does not violate any Model Rule by taking with her copies of docments [sic] that she herself has created for general use in her practice.” American Bar Association, Standing Committee on Ethics and Professional Responsibility, Formal Opinion 99-414, Ethical Obligations When a Lawyer Changes Firms, Sept. 8, 1999 (“ABA Opinion 99-414″) at 8.

For documents that do not fit within these stated criteria, the Standing Committee concludes that, “the lawyer may have to obtain the firm's consent,” but frustratingly fails to identify the documents for which they must do so. Id. (emphasis added). In addition, the opinion notes that, “as with the use of client lists, the question of whether a lawyer may take with her continuing legal education materials, practice forms, or computer files she has created turns on principles of property law and trade secret law.” Id.

Finally, the most definitive guidance provided is that a “departing lawyer who is not continuing the representation may ' retain copies of client documents relating to her representation of former clients ' [,] but must ensure that the confidential client information they contain is protected in accordance with Model Rules 1.6 and 1.9.” Id. at 9.

Unfortunately, in practice, the opinion leaves departing lawyers to wonder:

1. whether the lawyer truly prepared the document or merely added to or improved the previous work of others, or merely approved the work of others, and if so, to what effect regarding the lawyer's entitlement to the document ( Cf. Hillman, supra at 917.);
2. who determines, and to what authorities should the lawyer look to determine, whether the documents are “considered the lawyer's property” ( See Richmond, supra at 24 n. 178.);
3. how the lawyer discerns whether the documents were “created for general use in her practice” or were instead specific to a particular matter;
4. precisely under what circumstances “may” the lawyer need to ask, or for that matter, when is she clearly required to ask, for permission to take copies of documents;
5. how the lawyer determines the effect of property law and trade secret law on the documents in question; and
6. how the lawyer should ultimately go about obtaining permission to make copies of documents to which she may or may not be entitled.

Although this ethics opinion provides the most authoritative guidance available, it fails to cite to any supportive authority for its relevant propositions; this may give the cautious departing lawyer additional pause. In addition, the opinion fails to address exactly what obligation the lawyer has to return copies of documents already in her possession.

Electronic Documents

Since this 1999 opinion, the proliferation of e-mail, smart phones, tablets, cloud computing, personal home computers, laptops, and their various iterations, means that sometimes electronic documents have been removed and copied, perhaps inadvertently, when downloaded or transferred. Even if a lawyer erased downloaded documents, the documents might still be recoverable through forensic means. While a departing lawyer arguably would be obligated to return any document she was not entitled to take in the first place, the duty not to take and the duty to return documents already in one's possession may be different, raising questions as to burden and waiver.

Documents the Lawyer Should Initially Assume Cannot Be Taken

What is clear from the ABA opinion, case law, and additional authorities is that the most perilous document to remove is a client list. These lists are the documents most likely to be protected by trade secret law. See Hillman supra. A client list falls far afield from documents that ABA Opinion 99-414 suggests a departing lawyer is generally entitled to take (i.e., documents she created), and the opinion specifically notes the elevated risk of taking a client list as opposed to other firm documents. See ABA Opinion 99-414 at 7 (“[D]eparting lawyer may avoid charges of engaging in unfair competition and appropriation of trade secrets if she does not use any client lists or other proprietary information ' [and] uses only publicly available information and what she personally knows about the clients' matters.”).

Nonetheless, as noted later on in the opinion, and as echoed by case law, the status of a client list as a trade secret often will depend on “who prepared the material and the measures employed by the firm to retain title or otherwise protect it from external use or from taking by departing lawyers.” Id. at 8. As this question is often a fact-intensive inquiry, the careful departing partner might seek to negotiate the use of the client list, or potentially, a partial client list limited to the clients for which she worked or with whom she had direct professional contact while at the firm. Cf. at 3-4. Whatever the strategy, a careful departing lawyer should never remove a client list unilaterally and should notify the former firm immediately if she has a list in her possession. Taking these precautions will help avoid a finding that the lawyer engaged in “dishonesty, fraud, deceit, or misrepresentation in violation of Rule 8.4(c),” to say nothing of a violation of fiduciary obligations to the firm. Id. at 8 & n.18; see also Richmond supra at 26 (suggesting that knowing violation of a firm's document or property policy may be a violation of a partner's fiduciary duty).

Documents the Departing Lawyer May Be Entitled to Take

On the other end of the spectrum, the ABA opinion, and all other available authorities, agree that departing lawyers are entitled to the client files of every client that follows them to their new firm. ABA Opinion 99-414 at 8. The opinion appears to go a step further and notes the departing lawyer may “retain copies of client documents relating to her representation of former clients.” Id. at 9 (emphasis added). It is unclear whether this language refers only to documents provided to the firm by the client, or whether it encompasses the entire client file.

Even if the opinion is read broadly in this regard, the parties may not readily agree on the scope of the client file. See Hillman, supra at 901-04. For example, does the client file extend to every email pertaining in any way to the matter or to every note or memo created at any time in connection with the matter? Or should the file encompass only the final versions of documents and public filings? Notably, ethics opinions and courts have taken varying views on the scope of the client file, and lawyers should refer to the ethics opinions and rulings in their local jurisdiction. Id.

Documents with an Indeterminate Status

Other than client lists, the potential for violation of professional responsibility standards and other standards might arise from documents in-between the two above-referenced ends of the spectrum. While the final versions of publicly filed documents are unlikely to be the subject of an ownership dispute, the “ownership” of the following types of documents is less clear: 1) drafts of publicly filed documents; 2) case strategy memoranda; 3) general litigation strategy memoranda; 4) discrete research projects; 5) CLE materials created by the lawyer; 6) discovery requests not filed with a court; 7) personalized intake forms; 8) e-mails; 9) contact lists on computers; 10) personal rolodexes; 11) form documents created or frequently used by the attorney; 12) deposition scripts; and 13) non-public drafts of articles.

A departing lawyer and her former firm may disagree over whether such documents meet the ABA Opinion's stated requirements: 1) prepared by the lawyer and considered the lawyer's property; or 2) created for general use in her practice. ABA Opinion 99-414 at 8 (emphasis added). Similarly, whether such documents constitute or contain “trade secrets” is unclear without additional information about the “measures employed by the law firm to retain title or otherwise to protect it from external use or from taking by departing lawyers.” Id. Indeed, given these criteria, the same document may have a different designation at different firms, given that the respective firms' internal policies concerning document safekeeping, e-mail use, and designation of firm property may influence the outcome. See Richmond, supra at 16.

The status of e-mails provides another example. Where a firm has promulgated a policy stating that e-mails are firm property, the firm can contend that departing lawyers are not entitled to their e-mails because they are not “considered the lawyer's property.” ABA Opinion 99-414 at 8; Samuel Lewis, Don't Let Your Firm's Proprietary Information Walk Out the Door, 17 No. 3 GPSolo 46, 51, April/May 2000. On the other hand, with respect to e-mails sent in the context of a client matter, the departing lawyer will have a strong argument with respect to current clients, and will have a possible argument with respect to former clients (depending on the reading of the ABA Opinion on a lawyer's entitlement to a former client's files).

Steps for the Careful Departing Partner

In conclusion, what should careful departing lawyers do when faced with this labyrinth of largely unanswered questions? First, they should disclose all electronic and other documents in their possession, setting forth in writing the documents they plan to keep and the basis for keeping them under the ABA Opinion and other authorities; full disclosure and candor will help ensure that the departing lawyer does not run afoul of the duty not to misrepresent or of any fiduciary duties of honesty and respect for firm policy. Second, to the extent applicable, the departing lawyer should characterize retained documents as “client documents relating to the representation of former clients.” See ABA Opinion 99-414 at 9.

Finally, careful departing lawyers should also do what may be the hardest thing for many lawyers to do ' admit that they need help and get the advice of competent counsel with respect to their rights to documents.

Wayne N. Outten, a member of this newsletter's Board of Editors, is the managing partner of Outten & Golden LLP, an employment law firm representing employees, executives, and partners, with offices in New York City, Stamford, CT, and Chicago. He co-chairs the firm's Executives & Professionals and Retaliation & Whistleblower practice groups. Cyrus E. Dugger is an associate in the firm's New York City office and a member of its Sex Discrimination & Sexual Harassment and Whistleblower & Retaliation practice groups.