THE RECORD - New York City Bar Association

P R O F E S S I O N A L R E S P O N S I B I L I T Y
A N D P R O F E S S I O N A L D I S C I P L I N E
erning Lawyers provides that except as allowed by agreement or by statute,
“a lawyer does not acquire a lien entitling the lawyer to retain the
client’s property in the lawyer’s possession in order to secure payment of
the lawyer’s fees and disbursements.” 37 The lawyer may withhold only
documents “prepared by the lawyer or at the lawyer’s expense if the client
or former client has not paid all fees and disbursements due for the lawyer’s
work in preparing the document and nondelivery would not unreasonably
harm the client or former client.” 38 The comments to the draft provision
recognize that the proposal is contrary to the law in the majority of
jurisdictions in refusing to recognize a broad retaining lien. The comments
state that “[t]he use of the client’s papers against the client is in
tension with the fiduciary responsibilities of lawyers. A broad retaining
lien could impose pressure on a client disproportionate to the size or validity
of the lawyer’s fee claim.” 39
One Pennsylvania committee has taken a position that is closer to a
midpoint. The Pennsylvania committee defined two concepts, “substantial
prejudice” and “prejudice.” 40 “Substantial prejudice” means “detriment
to the client’s interest in a material matter of clear and weighty importance.”
The illustration of substantial prejudice given by the committee is
“the retention of a unique document that is only in the possession of the
discharged lawyer or where trial or a real estate closing is so proximate in
time that it would be impossible to obtain copies of pleadings, transcripts
and other necessary documents.” “Prejudice” is that prejudice which is
not substantial. The illustration of prejudice is the detriment to a client
from not having “pleadings turned over to the client or the client’s new
lawyer after discharging the client’s prior lawyer,” since “pleadings, deposition
transcripts and the like are readily available from other sources ....”
The committee opined that it is permissible for an attorney to enforce a
retaining lien that causes “prejudice” but not “substantial prejudice” to
the client.
As noted above, New York courts have also recognized instances in
37. Restatement (Third) of the Law Governing Lawyers § 55 (1), Proposed Final Draft No. 1,
March 29, 1996. The Reporter’s Memorandum to Tentative Draft No. 8, March 21, 1997,
states that Chapter 3, which includes section 55, “was tentatively approved as presented in
Proposed Final Draft No. 1 (1996) . . . .”
38. Id.
39. Restatement (Third) of the Law Governing Lawyers § 55, Comment b., [1997 draft].
40. Pennsylvania Bar Association Committee on Legal Ethics and Professional Responsibility,
Formal Opinion Number 94-35 (May 12, 1994), 1994 WL 907617.
M A R C H / A P R I L 1 9 9 9 ◆ V O L. 5 4, N O. 2
189