Why Did My Lawyer Quit?

Commenting on Latham & Watkins’s withdrawal from representing the Chinese company Wahaha, I kept looking for the reason(s) for the withdrawal. I knew that there had to be some legitimate reason(s); otherwise, the withdrawal would be unethical under the American Bar Association’s Model Rule on Professional Ethics. My mind also led me to wonder how the Chinese law and legal ethics deal with the same issue. Bearing in mind that this post might be a bit technical, I will try to stick to simplicity and help people understand the differences between the two regimes of legal ethics, and how they protect clients’ interests when lawyers decide to quit.

First off, the ABA contemplates two types of withdrawals—permissible and mandatory. A lawyer must withdraw under the following conditions:

1. The lawyer’s physical or mental condition materially impairs the lawyer’s ability to represent the client;
2. The lawyer is discharged;
3. When the lawyer learns of a client’s crime or fraud, and the lawyer fails to dissuade the client from continuing such crime or fraud (Actual knowledge required, mere suspicion not enough). See In re American Continental Corp.

Under ABA Rule 1.16, a lawyer may withdraw if the following conditions are met:

4. The withdrawal will have no material adverse effect on the interests of the client; see Gilles v. Wiley, Malehorn & Sirota
5. The lawyer reasonably believes that the client is doing something criminal or fraudulent;
6. The client has used the client’s service to perpetrate fraud or a crime;
7. The client insists on doing stuff repugnant to the lawyer, and with which the lawyer has a fundamental disagreement;
8. Client fails to perform substantially under contract (paying fees);
9. The representation will result in an unreasonable financial burden on the lawyer or has been rendered unreasonably difficult by the client;
10. The representation will result in a violation of ethical rules or other law; or
11. Other good cause as deemed appropriate by a sitting judge.

Latham & Watkins’s withdrawal from representing Wahaha in the Los Angeles case has to be based on one of the above 11 causes. Once a lawyer decides to withdraw, she has to obtain permission from the court in a litigation case, and the court will examine the reason(s) given by the lawyer to determine whether the facts warrant a withdrawal. Of course, since the case is in California, Latham & Watkins’s lawyers in the local office have to follow California ethical rules, which might differ from the ABA Rules. Because I am not very knowledgeable about the California rules, I will just use the ABA Rules for illustration purposes.(In reality, the California rules and ABA Rules should be substantially similar with respect to terminating representation.)

Compared to the ABA Rules on withdrawal, the Chinese counterpart is far less specific. Currently, two documents provide guidance on the subject of terminating legal representation—the Lawyer’s Law of China (2007) and the Code of Conduct for Practicing Lawyers (2004 Provisional).

The Lawyer’s Law states that lawyers have the right to refuse or terminate representation in the following situations (similar to mandatory withdrawal):

1. the matter to be undertaken by the lawyer violates the law;
2. the client uses the lawyer’s service to violate the law;
3. the client purposefully withhold material facts from the lawyer.
See Lawyer’s Law (2007 Amended), Article 32, paragraph 2.

The Code of Conduct for Practicing Lawyers forbids terminating representation without appropriate cause, see Article 65; but it allows withdrawal when:

4. the lawyer learns of a present conflict of interest between her client and another existing client, (withdraw from representing the client who signed the contract but has not paid fees) see Article 85;

5. the lawyer is suddenly stricken with illness or disease and cannot physically continue the representation, see Article 89; [prompt notice to and agreement from client required before withdrawal]

6. the lawyer has changed her job and needs to move away, see Article 89 [prompt notice to and agreement from client required before withdrawal].

A simple and literal comparison of the American and Chinese rules may lead one to conclude the following:
1. Both rules mandate withdrawal when clients engage in fraud and/or crime, but the American rule requires the lawyer’s subjective knowledge, while the Chinese rule is less transparent on whether knowledge or suspicion is required for terminating the representation.

2. Where withdrawal is permissible, both rules require proper cause. The ABA Rules list six detailed and one general cause, whereas the Chinese rule provides three detailed causes for withdrawal, making the Code of Conduct much less instructive than its American counterpart. But, this is probably typical of statutes and rules in a civil law jurisdiction, where minute and exhaustive provisions on certain topics are less common than in the common law jurisdictions.

3. Overall, from a legal ethics perspective, clients with American lawyers should be able to enjoy more protection under the ABA Rules than they might under the Chinese rules. Under the ABA Rules, a client, at least, pretty much knows why her lawyer quit by way of eliminating the possibilities. But the Chinese rules leave so much room for generality that it might be hard to figure out why her lawyer terminated.