Firing Your Lawyer in the Middle of a Business Lawsuit

What Gives a Business the Right to Fire Its Lawyer Mid-Lawsuit?

A Minnesota business may discharge its lawyer at any time during a lawsuit, and the lawyer must withdraw once discharged unless a court orders the lawyer to continue. Minn. R. Prof. Conduct 1.16(a) requires a lawyer to withdraw from representing a client if “the lawyer is discharged.” That duty is subject to paragraph (c), which covers court notice and permission.

The rule’s comment, which guides how the rule is read but is not the rule itself, states: “A client has a right to discharge a lawyer at any time, with or without cause, subject to liability for payment for the lawyer’s services.” The Minnesota Supreme Court described the same right in Faricy Law Firm, P.A. v. API, Inc. Asbestos Settlement Trust, 912 N.W.2d 652 (Minn. 2018). In that dispute over a discharged contingent-fee firm’s pay, the court stated that “a discharged attorney may not sue for breach of contract damages because the client always has an implied right to terminate the attorney-client relationship.”

So the business does not need a reason the lawyer would accept. It does need a plan, because a new lawyer bills time to learn a file the first lawyer already knows, and the court schedule keeps running during the handoff.

What Can a Business Try Before Changing Lawyers?

Before firing a litigation lawyer, a business can raise the problem directly with the lawyer, get a second opinion from a lawyer outside the case, and make its own settlement decision. Each step can cost less than a change of lawyers and keeps the current lawyer’s knowledge of the file working for you.

1. A direct conversation. Complaints about silence, about which lawyer at the firm is doing the work, or about the size of the bills can each be raised with the lawyer. The rules support that conversation. Under Minn. R. Prof. Conduct 1.4(a), a lawyer must “keep the client reasonably informed about the status of the matter” and “promptly comply with reasonable requests for information.” Rule 1.4(b) adds: “A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation.” Under Minn. R. Prof. Conduct 1.5(b), “Any changes in the basis or rate of the fee or expenses shall also be communicated to the client.” I suggest asking for a written case plan and a budget through the next major event, such as a summary judgment motion or trial. That plan gives you a measure for the work and the bills.
2. A second opinion. A lawyer who is not in the case can review it and advise you while your current lawyer stays in place. The comment to Minn. R. Prof. Conduct 4.2, the rule on contacting people who have a lawyer, states: “Nor does this rule preclude communication with a represented person who is seeking advice from a lawyer who is not otherwise representing a client in the matter.” The comment guides how the rule is read.
3. Your own settlement decision. Some frustration comes from a lawyer pressing for a settlement, or resisting one. Under Minn. R. Prof. Conduct 1.2(a), “A lawyer shall abide by a client’s decision whether to settle a matter.” That decision stays with your business whichever lawyer you have, and the factors are covered in whether to settle or go to trial.

A change is worth weighing when the problem continues after a direct conversation, or when a second opinion identifies a problem in the strategy itself. A budget complaint is easier to judge against a realistic picture of what a lawsuit costs.

How Does a Lawyer Substitution Work in a Minnesota State Court Case?

In Minnesota state court, the first lawyer’s withdrawal takes effect only when a written notice is served on the other parties who have appeared. If any other document in the action has been filed, the notice must also be filed with the court administrator. The new lawyer’s appearance should be in place by then. Minn. Gen. R. Prac. 105 provides: “After a lawyer has appeared for a party in any action, withdrawal will be effective only if written notice of withdrawal is served on all parties who have appeared, or their lawyers if represented by counsel, and is filed with the court administrator if any other document in the action has been filed.”

The notice also tells the court how to reach your business. Rule 105 states: “The notice of withdrawal shall include the address, email address, if known, and phone number where the party can be served or notified of matters relating to the action.”

Rule 105 sets the procedure only. Its 1997 committee comment states: “This rule establishes the procedure for withdrawal of counsel; it does not itself authorize withdrawal nor does it change the rules governing a lawyer’s right or obligation to withdraw in any way.” The lawyer’s own duty comes from Rule 1.16(c): “A lawyer must comply with applicable law requiring notice to or permission of a tribunal when terminating a representation. When ordered to do so by a tribunal, a lawyer shall continue representation notwithstanding good cause for terminating the representation.”

Coordinating the two lawyers is especially important for a corporation, an LLC, or a limited partnership. In Nicollet Restoration, Inc. v. Turnham, 486 N.W.2d 753 (Minn. 1992), a corporation’s president, who was not a lawyer, tried to present its case in district court after the case moved there from conciliation court. The trial court apparently offered a continuance so the corporation could hire a lawyer. The corporation declined, and the court dismissed the case with prejudice. Relying on the common law and the courts’ power over who practices law, the Minnesota Supreme Court affirmed: “As such, we reaffirm our conviction that a corporation must be represented by a licensed attorney when appearing in district court.”

The Minnesota Court of Appeals applies the same rule to LLCs and limited partnerships. In 301 Clifton Place L.L.C. v. 301 Clifton Place Condominium Ass’n, 783 N.W.2d 551 (Minn. App. 2010), the lawyer for two Nevada LLCs withdrew three weeks before trial. Their manager, who was not a lawyer, then represented them at trial. The other side conceded that the rule “extends beyond business corporations and applies to LLCs,” and the court agreed. The LLCs raised the issue only after trial, and the court refused them a new trial: “A corporation cannot claim it is prejudiced by its own violation of the rule and bootstrap itself into a basis for another trial.” In Hinckley Square Associates v. Cervene, 871 N.W.2d 426 (Minn. App. 2015), a limited partnership tried an eviction case in district court through a general partner and its management agent. The Court of Appeals reversed the partnership’s judgment, concluding that “limited partnerships must also be represented by a licensed attorney in pleadings and practice in district court except when otherwise authorized by court rule.” Filing the new lawyer’s appearance together with the first lawyer’s withdrawal keeps the company represented without a gap.

A statute adds a notice step: under Minn. Stat. § 481.11, “The attorney in a civil action or proceeding may be changed at any time. When such change is made, written notice of the substitution of a new attorney shall be given to adverse parties; until such notice, they shall recognize the former attorney.”

A case in the U.S. District Court for the District of Minnesota follows D. Minn. LR 83.7 instead.

How Do Trial Dates and Court Deadlines Affect the Timing?

Changing lawyers does not by itself move a trial date or any other court deadline in a Minnesota state case. Rule 105 states: “Withdrawal of counsel does not create any right to continuance of any scheduled trial or hearing.” Its 1997 committee comment adds: “Of course, withdrawal or substitution of counsel may be part of a set of circumstances justifying the exercise of the court’s discretion to grant a continuance.”

Three more rules control a request for more time:

1. A trial date set after a hearing. Under Minn. Gen. R. Prac. 122, “If a trial setting has been established by scheduling order after hearing the parties, the court shall decline to consider requests for continuance except those made by motion or when a judge determines that an emergency exists.”
2. The scheduling order’s other deadlines. Under Minn. R. Civ. P. 16.02, a scheduling order limits the time to join other parties and amend the pleadings, to file and hear motions, and to complete discovery, and “A schedule shall not be modified except by leave of court upon a showing of good cause.”
3. Orders after a pretrial conference. Under Minn. R. Civ. P. 16.05, the order entered after any conference held under Rule 16 “shall control the subsequent course of the action and shall be modified only to prevent manifest injustice.”

I suggest making a change early in the case where you can, because a new lawyer then has room to learn the file before discovery closes and motions are due. A change shortly before trial leaves the new lawyer working under the existing schedule unless the court grants a continuance or modifies the schedule. If the lawsuit was only recently served, the deadlines covered in the first weeks after your business is served keep running whoever your lawyer is.

What Must the First Lawyer Turn Over?

When a Minnesota business fires its lawyer, the lawyer must surrender the papers and property the business is entitled to and cannot hold them until the bill is paid. Rule 1.16(d) states: “Upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect a client’s interests, such as giving reasonable notice to the client, allowing time for employment of other counsel, surrendering papers and property to which the client is entitled, and refunding any advance payment of fees or expenses that has not been earned or incurred.”

Minnesota’s version of the rule lists what that includes, in paper or electronic form. Rule 1.16(e) covers these items, “whether stored electronically or otherwise.”

1. What you gave or paid for. Rule 1.16(e)(1) covers “the papers and property delivered to the lawyer by or on behalf of the client and the papers and property for which the client has paid the lawyer’s fees and reimbursed the lawyer’s costs.”
2. Litigation papers already served or filed. Rule 1.16(e)(2)(i) covers “all pleadings, motions, discovery, memoranda, correspondence and other litigation materials which have been drafted and served or filed, regardless of whether the client has paid the lawyer for drafting and serving the document(s).”
3. Cost-advanced evidence. Rule 1.16(e)(2)(ii) covers “all items for which the lawyer has agreed to advance costs and expenses regardless of whether the client has reimbursed the lawyer for the costs and expenses including depositions, expert opinions and statements, business records, witness statements, and other materials that may have evidentiary value.”

One limit applies to drafts. Rule 1.16(e)(2)(i) excludes papers “which have been drafted, but not served or filed if the client has not paid the lawyer’s fee for drafting or creating the documents.”

Payment cannot hold up the file. Rule 1.16(g) states: “A lawyer shall not condition the return of client papers and property on payment of the lawyer’s fee or the cost of copying the files or papers.” Under Rule 1.16(f), a lawyer may charge reasonable copying or retrieval costs only if the client agreed to that charge in writing before the representation ended. I suggest asking for the file in writing, with the new lawyer’s delivery address, in the same message that ends the representation, because the request then has a clear date.

What Fees Does a Business Still Owe the Lawyer It Fired?

A business that fires its lawyer still owes for the services provided but owes no damages for ending the relationship, and the rules of professional conduct provide for refunding unearned advance payments. When the business disputes the lawyer’s right to money in the trust account, Rule 1.15(b) bars withdrawing “the disputed portion” until the dispute is finally resolved (item 2). How that works depends on the fee arrangement:

1. Hourly fees. The Rule 1.16 comment describes the right to discharge as “subject to liability for payment for the lawyer’s services.” Any fee must also be reasonable: under Rule 1.5(a), “A lawyer shall not make an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for expenses.”
2. Retainers and other advance payments. Rule 1.16(d) lists refunding any unearned advance payment of fees or expenses among the steps a lawyer must take “to the extent reasonably practicable to protect a client’s interests.” If your business disputes the lawyer’s right to money in the trust account, Minn. R. Prof. Conduct 1.15(b) provides that “the disputed portion shall not be withdrawn until the dispute is finally resolved.” If the lawyer’s right to money already withdrawn “is disputed within a reasonable time after the funds have been withdrawn, the disputed portion must be restored to the account until the dispute is resolved.”
3. Flat fees. Under Rule 1.5(b)(3), “Whenever a client has paid a flat fee or an availability fee pursuant to Rule 1.5(b)(1) or (2) and the lawyer-client relationship is terminated before the fee is fully earned, the lawyer shall refund to the client the unearned portion of the fee.” The same rule adds: “If a client disputes the amount of the fee that has been earned, the lawyer shall take reasonable and prompt action to resolve the dispute.”
4. Contingent fees. In Faricy, a client ended a contingent-fee agreement before its matter concluded. The Minnesota Supreme Court stated: “Minnesota law prohibits a discharged contingent-fee lawyer from receiving the contingent fee as a contract remedy, instead allowing recovery only of the reasonable value of services under a theory of quantum meruit.” It listed eight factors for that value, including the “fee arrangement existing between counsel and the client” and the “timing of the termination.” The court added that “The contingent fee is instead only one factor among many.”

The first lawyer may also claim a lien on the case. Under Minn. Stat. § 481.13, subd. 1(a), “An attorney has a lien for compensation whether the agreement for compensation is expressed or implied (1) upon the cause of action from the time of the service of the summons in the action, or the commencement of the proceeding, and (2) upon the interest of the attorney’s client in any money or property involved in or affected by any action or proceeding in which the attorney may have been employed.” As against third parties, that lien on the client’s interest runs “from the time of filing the notice of the lien claim, as provided in this section.” Under subdivision 1(c), the lien “may be established, and the amount of the lien may be determined, summarily by the court” on “the application of the lien claimant or of any person or party interested in the property subject to the lien.” If your business later recovers money in the case, the first lawyer’s unpaid claim can reach that recovery, and the court can set the amount.

A complaint about the quality of the work, rather than the bill, raises a different question, covered in suing a lawyer for malpractice in Minnesota.

What Does a New Lawyer Need to Take Over the Case?

A new litigation lawyer needs the complete file, the current court schedule, the fee history with the first lawyer, and a clear statement of what your business wants from the case. I suggest gathering these before the first lawyer withdraws, because the new lawyer can then start on the deadlines immediately:

1. The file. This includes pleadings, motions, discovery served and received, deposition transcripts, expert materials, and correspondence. Regardless of payment, Rule 1.16(e)(2) covers litigation materials “which have been drafted and served or filed” and “all items for which the lawyer has agreed to advance costs and expenses.”
2. The schedule. This means the scheduling order and any trial date. The rules for changing them are in How Do Trial Dates and Court Deadlines Affect the Timing?.
3. The fee history. The engagement agreement and invoices, so the new lawyer can see what was done and what the first lawyer may claim under § 481.13.
4. Settlement history. Every offer made and received, with dates.
5. Your goals and limits. The result your business would accept, the budget, and any business relationship at stake in the case.
6. The substitution notice. A copy of the written notice of substitution given to the other parties under § 481.11, because until that notice “they shall recognize the former attorney.”

Inside a company, who talks to the new lawyer, and how, affects attorney-client privilege for a Minnesota company. The new lawyer can set that up at the start.

Changing Litigation Lawyers in Minnesota

Your business can fire its lawyer at any stage of a Minnesota lawsuit, but the case and its deadlines keep running. A change is easier to manage when the new lawyer is ready to appear before the first lawyer withdraws under Rule 105. Minn. Stat. § 481.11 also requires written notice of the substitution to the other parties, who deal with the first lawyer until they receive it. The file should move under Rule 1.16, and the fees should be settled under Rule 1.5 and, for a contingent fee, Faricy. More on my approach to business litigation is on my practice page. If you are weighing a change of lawyers in a pending Minnesota case, email [email protected] with a brief description, and I can start an intake and conflict check before you send any confidential documents.