(a) Larry must return to Carla any undisputed amount owed to her, keep any undisputed amount as earned by him, and hold onto any disputed amount until there is a determination of who gets the disputed amount.

Fees for lawyer’s services must be reasonable. A fee arrangement between a client does not necessarily have to be in writing. If a client pays a lawyer a retaining fee, the lawyer must keep the retaining fee in the client trust account. Upon termination of the client & lawyer relationship, the lawyer has a duty to return the amount unearned back to the client, keep what has been earned, and hold onto the disputed amount, if any, until the dispute can be resolved as to who is the proper owner of the amount.

Here, Carla and Larry entered into a legal relationship, and Carla paid Larry a $5,000 retainer fee. Then, a month after Larry was hired, Larry sent Carla a bill for $3,000 worth of legal work. Carla objected to the bill, believing that Larry only did $1,000 worth of work. Carla fired Larry, and demanded a $4,000 refund. At this point, Larry has the ethical duty to return and keep any undiputed amount. Thus, Larry will keep $1,000 for himself, as this is undisputed and what Carla believes Larry has earned. Larry must also provide Carla with $2000 of the retainer, as this is undisputed and unearned, as Larry is claiming only $3,000 of the retainer fee. Larry must then retain the $2000 disputed amount until there is a proper determinaiton of who gets to keep the $2000.

Therefore, Larry must return to Carla $2000 of the undisputed retaining fee, keep $1000 of the undisputed retaining fee for himself, and hold onto the other $2000 disputed fee until there has been a determination of who will acquire the $2000.

(b) Larry must return to Carla her client file

Upon the termination of a client and lawyer’s relationship, a lawyer has a duty to return to the client any and all files related to her case. Included in the return of the files includes the lawyer’s notes, work product, pleadings, correspondence, and communications regarding the client’s matter. However, a lawyer does not have to turn over files or communications that are unrelated to their case.

Here, after a month of work, Carla fired Larry and demanded her entire file, including Larry’s notes, work product, pleadings, correspondence, and communications within the firm that that concern her even if not directly related to her case. Now, Larry, as a lawyer, has a duty to return almost all of those files requested by Carla, including work product, notes, and pleadings. However, Carla’s last request of “and communications within the firm that concern her even if not directly related to her case” may raise question. As stated, Larry must return everything to Carla that relates to her case, and if those communications within the firm are not “directly related” but are related to Clara’s case, Larry does have a duty to provide them to her. However, if they are unrelated, or just relate to Clara, or are meant more for inter-office communication, Larry does not have to provide those to Carla.

Therefore, Larry has an ethical obligation to return Carla’ client file upon the termination of their attorney & client relationship.

(c) Larry cannot ethically seek to enforce the arbitration clause against Clara

Virginia has adopted the Uniform Enforcement of Arbitration Judgment Act, and arbitration provisions are generally enforceable within Virginia. However, a lawyer cannot limit their future malpractice between a client and an attorney, absent some few exceptions. Similarly, a lawyer cannot limit the rights of a client to seek recourse by atrbitration unless there have been procedural safeguards in place to protect the client, including a discussion with the client regarding the scope of the arbitration clause, potential need for separate representation, and consent after consultation by the client.

Here, in Larry and Clara’s fee arranegment, it contained the clause that “any disputes between Larry and Clara will be resolved through mandatory binding arbitration.” The arbitration clause, among other things, limited Carla’s right to a jury trial, limited her right to conduct discovery, and limited her right to appeal any adverse arbitration award. Carla agreed to these remedial limitations without any discussion between Larry and Carla. However, in this agreement between Larry and Carla, Larry is severly limiting the legal rights of Carla. Larry has considerably more legal knowledge than Carla, has failed to disclose or discuss the arbitration provision with her - including her limitations of a right to a jury trial, discovery, and appeal. Since Larry’s arbitration severly limits Clara’s legal rights, and almost inadvertently limits Clara’s recourse for any malpractice committed by Larry, Larry cannot ethically seek to enforce the arbitration clause between them.

Therefore, Larry cannot ethically seek to enforce the arbitration clause against Clara.

(a) Larry must return $2,000 to Carla, and may hold the disputed $2,000 in the client trust account (if he wants to dispute Carla's claims) and withdraw the undisputed $1,000 from the client trust account.

An attorney may request an advance payment or retainer upon entering a representation. But if the attorney does not earn the entirety of the advance payment, the attorney must refund the unearned portion to the client. And if a client disputes the attorney's bill, the attorney-if he does not acquiesce to the client's demand-must hold the disputed funds in the client trust account, pending resolution of the dispute.

Larry properly requested and received a $5,000 advance from Carla. Both Carla and Larry agree that Larry earned at least $1,000 of the advance, so Larry can withdraw those funds into the firm's accounts. And they both agree that Larry did not earn $2,000 of the advance, so Larry should withdraw those funds to transfer to Carla. But they dispute the remaining $2,000. Larry is permitted to refuse to return these funds, but he must hold them in the client trust account until the dispute is resolved.

(b) Larry must return the file: specifically he must return any client originals and produce copies of any work product, aside from work product related to conflicts checks. He must provide an accounting of his work if requested. And he must also avoid any conduct that would unnecessarily harm Carla.

Even after an attorney has been fired by a client, the attorney has ethical obligations to the client. The attorney must provide an accounting of their work if requested. They must return, from the client's file, any original documents provided by the client and copies of all work product, excepting work product related to conflicts check. And the attorney must avoid causing unnecessary harm to the client's interest. Thus, if Carla asks, Larry must provide an accounting for his representation of Carla, including the hours worked and the matters accomplished. Larry must also return most of Carla's file: Carla's originals and copies of work product that does not involve conflicts checks. And Larry must avoid unneccesarily harming Carla's case.

(c) Larry cannot ethically seek to enforce the arbitration clause, because he did not receive informed consent.

Informed consent is a core ethical duty of an attorney. Regarding the terms of representation, the attorney must ensure that the client understands and consents to all material aspects of the representation. Oral consent is usually sufficient. But limitations on a client's remedies to a dispute with the attorney requires more. The attorney must receive explicit consent, in writing, from to client in order to include limitations on client remedies such as an arbitration clause or a limitation on the client's right to a jurty trial. And the client must be represented by an attorney.

Larry likely did not even receive basic informed consent, let alone the heightened consent required for the limitations clauses to be ethically enforceable. Carla might have understood the clauses, but Larry had no way of knowing because he did not expressly review the clauses and their implications. Larry's review of the fee agreement was likely insufficient to provide even basic informed consent. But Larry also did not receive the required express written consent. And Carla does not appear to have been represented by an independent attorney in the representation. Thus, Larry cannot ethically enforce the arbitration clause, for lack of sufficient consent from Carla.