Question

I am experiencing more situations in which my client refuses to follow my settlement recommendation in a lawsuit. Can I include a provision in my engagement agreement stating that I can withdraw from representation if my client does not accept my settlement recommendation?

Answer

The American Bar Association (ABA) Standing Committee on Ethics and Professional Responsibility recently issued Formal Opinion 516, which addresses the circumstances under which a lawyer may permissibly withdraw from representing a client under ABA Model Rule of Professional Conduct 1.16(b)(1). This opinion gives a lawyer discretion to seek approval to withdraw from representation when a client persistently fails to fulfill an obligation to the lawyer regarding the lawyer’s services. It does not, however, give a lawyer discretion to withdraw simply because the lawyer no longer likes the client, or because the client refuses to accept the lawyer’s recommendation to settle a litigation matter. The client decides whether to settle; the decision rests solely with the client, so a lawyer cannot unilaterally withdraw when there are no sound reasons under SCR 20:1.16 to do so.

The heart of your question is whether you can include a provision in your engagement agreement allowing you to withdraw from representation if the client does not follow your advice, particularly as it relates to settlement of litigation rather than pursuing further steps in the litigation. These clauses have been common in engagement agreements, especially those passed down through generations within a law firm, but they are no longer an appropriate basis for seeking withdrawal. The Rules of Professional Conduct and court decisions make clear that the client has exclusive control over the decision to settle a legal matter, and the lawyer is obligated to provide information to help the client make a reasonable decision about possible settlement. See SCR 20:1.4(b), which requires the lawyer to provide information to help the client make necessary decisions regarding the representation.

A provision in an engagement agreement allowing the lawyer to withdraw from representation if the client refuses to accept the lawyer’s recommendation would not satisfy the lawyer’s duties to the client. The lawyer decides the strategies and techniques that will be used to achieve the client’s goals, but the client retains the right to determine the goals and outcomes of the representation and make those decisions throughout the representation. A unilateral withdrawal from representation based on the type of language in an engagement agreement would not withstand scrutiny under the Rules of Professional Conduct or the fiduciary duties a lawyer owes a client. Lawyers are best served by eliminating such language in an engagement agreement to avoid confusion or misunderstanding regarding the nature and scope of the representation.

The lawyer decides the strategies and techniques that will be used to achieve the client’s goals, but the client retains the right to determine the goals and outcomes of the representation.