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A law firm may retain copies of its former client’s files but may only do so at its own expense, a Philadelphia Common Pleas judge has ruled in what is apparently a case of first impression. Philadelphia-based Morgan Lewis & Bockius has been given the go-ahead to keep a copy of the file of a corporate client, Quantitative Financial Strategies Inc., according to a 22-page opinion authored by Judge John W. Herron of the Philadelphia Court of Common Pleas Commerce Court program. Herron suggested that Morgan Lewis maintain the former client’s files in an independent repository, the maintenance of which would notify Quantitative Financial Strategies of the law firm’s continued access to the documents. In the opinion, captioned Quantitative Financial Strategies Inc. v. Morgan Lewis & Bockius, Herron ruled that “an attorney may keep copies of [client] documents except under extraordinary circumstances.” Herron handed down the conclusion but observed that he could discover no Pennsylvania law on point. Quantitative Financial Strategies focused not on whether a former client is entitled to his files but whether the lawyer may keep copies of them, raising what Herron called a novel issue. According to the opinion, when former Morgan Lewis client QFS learned that the firm had sent a letter of engagement to one of QFS’ direct competitors, QFS demanded the return of “all plaintiff’s files, documents and things, including copies of its files and documents in whatever medium” from Morgan Lewis. Morgan Lewis said it complied with QFS’ request for the files and sent for them to be retrieved from storage when it received QFS’ request. However, Morgan Lewis attorney Thomas Kittredge sent a letter telling James Crumlish, QFS’ new attorney, that Morgan Lewis would “appreciate being advised as to the legal basis” for QFS’ request that Morgan neither retain nor make copies of any documents and confirm that all relevant computer records were deleted. Herron did not state whether there was any response by Crumlish to Kittredge’s letter. Morgan Lewis then notified Crumlish when the QFS files were ready to be picked up at its offices. But the firm said it would only release the files without making copies if QFS would sign a release and abandon its action in replevin to recoup the documents. QFS then filed a writ of seizure for the files. After a hearing, Herron determined that the issue before the court was a narrow one: Did QFS have a probable likelihood of proving a property interest in copies of its files maintained by Morgan that would entitle it to exclusive possession of those copies? Herron concluded the answer was no. Although Herron said that neither he nor the parties “were able to unearth precedent directly on point,” he said that existing case law, an opinion issued by the Pennsylvania Bar Association Committee on Legal Ethics and Professional Responsibility, and the Restatement (Third) of Law Governing Lawyers all pointed to the conclusion that a firm may generally keep copies of its former clients’ files. The restatement gives an exception for “extraordinary circumstances — for example, when a client retained a lawyer to recover and destroy a confidential letter” when a law firm might not have an implicit right to maintain copies of client files, Herron said. Otherwise, he said, the law firm’s right to keep copies exists. Both QFS and Morgan Lewis cited a 1994 Commonwealth Court decision Maleski v. Corporate Life Insurance Co. which discussed in general terms the proprietary interest of clients in their files. But Herron said Maleski did not address clients’ proprietary interest in copies of their files. Herron examined case law from various other jurisdictions and considered the issue of keeping copies of client files in the light in which he said the issue “typically emerges” — in a discussion of who is responsible for paying for copying fees. In such cases, Herron said, “courts conclude either that the attorney must pay the copy fees for any documents he intends to keep from the client’s file, or that it is improper to condition access to the client file on the payment of copying fees by the client.” He said that suggested there is an “implicit acceptance of an attorney’s right to maintain copies of client files.” Additionally, Herron said, the Pennsylvania Bar Association Committee on Legal Ethics and Professional Responsibility also suggested a lawyer’s right to keep copies exists in an informal opinion it issued in 1996. In that opinion, the committee advised lawyers that to the extent attorneys wish to retain any portion of a client file, the expense of making copies should be treated as a cost of doing business and should not be billed to the client. Under case law, Morgan Lewis would therefore have to pay for any copies of QFS’ files it made, Herron said. Herron also said Pennsylvania Rule of Professional Conduct 1.15(b), to which QFS cited, was unpersuasive. Even though that rule says that a lawyer shall promptly deliver to a client or third party “any funds or other client property that the client or third person is entitled to receive,” and allows for a full accounting of the property upon request, the rule does not define what property the client is entitled to receive, Herron said. Although Herron determined that Morgan Lewis was entitled to keep copies of the QFS files provided it paid copy costs, he said that QFS’ allegations about “potential misuse of information” by Morgan Lewis “suggested the possibility of the ‘exceptional circumstance’ set forth in … the restatement” and warranted “an additional degree of protection” for QFS. Under the Pennsylvania Rules of Professional Conduct, Morgan Lewis is already under a duty not to disclose the confidential communications of a former client to a current client, Herron said. But he said that “in light of the particular facts of this case and the uncharted legal waters … we advise and suggest that the copy shall be stored at Morgan’s expense in an independent repository that would provide notice to the former client prior to access by Morgan.” This arrangement, Herron said, would “afford QFS the option of judicial scrutiny of any future access by Morgan to the copy of its file” and would also protect Morgan Lewis from unfounded claims of misuse of the file.

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