Update, 14 February 2009: A judge of the Supreme Court of South Australia said this in Everingham v Mullins  SASC 448:
’12 The appellants maintain that Stanleys undertook an entire job and were not entitled to be paid when they were reluctant to continue the third set of proceedings. The Magistrate found: (par 28)
“There had been a complete breakdown in the solicitor/client relationship. Mr Bourne said that he could not get a simple task done by a junior solicitor without criticism from the Everinghams, and by then he felt that he was in a conflict situation because he had no enthusiasm to act in the third judicial review and therefore he was not any longer prepared to act. By offering the Everinghams the option of going to another solicitor he felt that the conflict would resolve. I should point out that the third judicial review was in turn discontinued, apparently on the advice of Caldicott and Co.”
13 The instructions came to an end by mutual consent. Mrs Everingham refused even to speak to a junior solicitor who was sent to a routine listing conference by Stanleys. In my opinion, the Everinghams were not entitled to avoid paying their solicitors by reason of the circumstances in which the relationship came to an end.’
Update, 13 July 2008: A commenter, ‘purplehazel’, has provided such a learned response that I repeat it below. Let’s keep working on this problem people, and see what the readers of this blog can come up with:
I think asking for “authority for the proposition that a solicitor may terminate a client retainer where the relationship of solicitor and client has irretrievably broken down?” is too broad a question. You have to consider the reasons for the breakdown.
The solicitor can’t get rid of the client on a whim, but case law and practice rules would support it the following contexts; refusal to comply with discovery, committing or telling the solicitor of plans to commit perjury, potential ‘abuse of process’ scenarios that you can’t talk the client out of and situations where the client wants you to break the law.
As for case law that simply refers to the ‘breakdown of the relationship’ all I’ve been able to come across so far is this:
Para  of Ahmed v Russell Kennedy (a firm)  VSC 41 (23 February 2000)
“ I do not see why the learned magistrate should not have concluded that each of the appellant’s refusal (or failure, in the circumstances) to pay any outstanding disbursements, and the breakdown in the solicitor/client relationship – in the context of what his Worship might have concluded was the appellant’s knowing misstatement of the terms of the retainer – gave good cause for the solicitors to terminate the retainer.”
But…reference to the ‘breakdown in the solicitor/client relationship’ does seem to be a consequence of the fee dispute and not a separate ground. It did however cause me to have a closer look at Underwood Son & Piper v Lewis  2 QB 306 [a decision of the English CoA] which Halsbury’s laws of Australia has as the leading case.
Underwood is authority for the idea that the retainer is an entire contract and can only be terminated by the solicitor on “good cause and reasonable notice”. It includes analogies about cigars and shoes from Re Hall & Barker ((1878) 9 Ch D 538 at 545):
‘If a man engages to carry a box of cigars from London to Birmingham, it is an entire contract, and he cannot throw the cigars out of the carriage half-way there, and ask for half the money; or if a shoemaker agrees to make a pair of shoes, he cannot offer you one shoe and ask you to pay one half the price.’
However, Underwood doesn’t just refer to a client’s failure to put the solicitor in funds to meet disbursements; to insistence by the client that the solicitor take some dishonourable step; and to circumstances where the client hinders /prevents the solicitor’s actions [the 3 instances related in Halsbury’s laws of Australia at [250-465] footnote 9] it also includes this obiter comment from AL Smith LJ:
“and many cases situations may be supposed in which the solicitor may be entitled to refuse to act for the client any further.”
Interesting that the cases citing Underwood seem less about what the solicitor may or may not do, and more about whether they can’t stop acting and still expect to be paid for what they’ve done so far (or to keep payments already received).
Relevant questions on the facts – is there one contract with the client or a series of separate ones? to what extent can a written costs agreement or other agreement that sets up the retainer simply take the relationship between the parties out of the realm of the ‘entire contract’ altogether?
There’s another passing reference (which doesn’t really help much) in R v Promizio  NSWCCA 75 (31 March 2004) at .
Conflicts between self interest [the risk of disciplinary or other sanctions] and the duty to the client would arise in the examples I suggest in the second paragraph of this comment – but they are probably best seen as part of the duty to uphold the law/duty to the court.’
Original post: One of the solicitors I have done some work for has several times told me that she ‘sacked the client’. Though clients can terminate the solicitor-client relationship without notice and for whatever reason they like, there are limits on solicitors’ entitlement to do so; even non-payment of fees only entitles you to cease acting pending payment, at least until the situation becomes chronic. I am going through a phase of looking unsuccessfully for authority for propositions I thought I know to be correct, and not finding them. Hence this call to readers: can you point me to authority for the proposition that a solicitor may terminate a client retainer where the relationship of solicitor and client has irretrievably broken down? Or authority for the proposition that in that situation, a solicitor ought not to continue acting because to do so would involve a conflict between self-interest and duty to the client? Here’s a recent case from the Utah Supreme Court which discusses the US authorities on this issue, where breakdown of the relationship is obviously good cause for a solicitor terminating a retainer. What about in Anglo-Australian law? Anybody?