Closing a law firm: which records can still be licensed?
A firm that closes has two kinds of records. The client files belong to the clients and carry privilege, so they go back to the client or to storage and never into a data deal. The rest is how the firm worked: forms, checklists, redline histories with the client names removed, intake emails and billing narratives. That second set can have value after the doors close, but only if it is kept intact and only if the lawyers who run the wind-down agree to it.
Rules to read first
There is no federal retention rule for law firm files. The duties come from state rules of professional conduct and from the firm’s own letters to clients. Read the ABA model rule and then your state’s version.
| Source | What it asks of a closing firm |
|---|---|
| ABA Model Rule 1.15(a) | Records of client trust accounts are kept for five years after the representation ends. This is the American Bar Association model text; each state adopts its own version, and some choose longer periods. |
| Your state bar | Most state bars publish a closing or dissolution checklist: notice to clients, return of files, a custodian for the files that remain, and a plan for trust money. Find yours before you cancel any system. |
| Client engagement letters | Many say how long the firm keeps a file after a matter closes. That period binds the firm even after it stops practicing, and a client file in an email archive counts as a file. |
What a firm holds that is not a client secret
Everything on that list has to be reviewed by a lawyer before it leaves. A clause bank can carry a client’s name in a comment, and a billing narrative can say more than the client expects.
- Document templates, clause banks and form letters the firm wrote for itself.
- Redline histories where the client and the counterparty are removed and only the drafting moves remain.
- Intake emails and the questions the firm asks a prospective client, including the ones it declines.
- Billing narratives, which describe the work done in each entry.
- Practice notes: the memo a partner leaves for an associate on how a kind of matter is handled.
Where it sits, and what to ask
Law firm records usually sit in a document management system, an email platform, a practice management tool for time and billing, and a trust accounting ledger. For each one, ask the vendor in writing how long it keeps an account’s data after cancellation, whether a closed account can be restored, and who can authorize that. Closing the ledger early is the common loss, because the firm stops paying for the tool while the five-year trust duty is still running.
Keep one admin login alive until the files are returned and the custodian is named. When the last paid seat is cancelled, the billing history and the matter notes often go with it.
What stays out
| Record | Why it stays out |
|---|---|
| Open or closed client matter files | They belong to the client and the privilege is the client’s to waive. |
| Trust account ledgers | They hold client money records and must stay available for the retention period. |
| Anything under a protective order | A court order binds the firm whether or not the firm still exists. |
| Conflict check lists | They name clients and adverse parties together. |
Who can sign for a closing firm
In a firm that dissolves in an orderly way, the partners or shareholders sign. In one that fails, the answer may be a court-appointed receiver, a state bar trustee or a bankruptcy trustee, and each of them has to deal with the client files before the firm’s own records. Our article on who can sign a data license for a closing company covers the general picture. Ask your counsel which applies.
Read next
- Closing or bankrupt companies. Who signs and what to keep.
- Records to keep before you close. A checker by industry.
- Liability. Who answers for what in a deal.
- Law firms: licensing while open. What a running firm can license.
Questions about closing a law firm: which records can still be licensed?
Can a dissolved firm license anything at all?
Possibly its own work product, such as templates and procedures, once a lawyer has checked that no client detail remains. The client files are not the firm’s to license.
Do we have to keep trust records after we close?
The model rule sets five years after the representation ends, and your state may differ. A closing firm keeps the ledger and names who holds it.
What if a client never picked up the file?
Most state bar guidance says to make reasonable efforts to return it and then store it for a stated period. The data deal waits until that is settled.
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