The Department of Labor’s Final “Persuader” Rule – Part 2 of 2

So, yesterday, I started writing about the potential ramifications for lawyers of the adoption by the Department of Labor of its final “persuader” rule which will become effective on April 25, 2016, but will only be applicable to agreements entered into on and after July 1, 2016.  You can catch up on part 1 here.

I promised that I’d lay out my thoughts based on a full dive into the actual final rule itself to try to address whether, despite the DOL’s rhetoric, the rule really will require disclosure of information that ought to be protected by the attorney-client privilege  — so, here I go.

Having read through all (or least almost all) of the final “Persuader” rule, my “executive summary” takeaway is that the DOL sure seems to be willing to go to the wall on the idea that trying to help an employer make a more persuasive argument against the formation of an union is not “legal services.”  I happen to think that’s wrong but, I guess for the most part, that’s a policy call to be made by people who win elections.  I also think it is a position that is fundamentally in contrast to lots of other areas where conclusions are drawn that when a lawyer does certain things that aren’t the practice of law when done by nonlawyers, the lawyer is still engaged in the practice of law when doing those things.  I also think, though, as wrong as it may be, it seems to be a manageable situation and that lawyers and law firms can protect against the adverse consequences through building better (or at least more redactable agreements).  What seems to be a much worse possible outcome is the issue the DOL dodges by saying it isn’t at issue in the present rulemaking — the kinds of information that would now have to be reported on Form LM-21 that the ABA warned about a a good bit in its 2011 public comment.

There are many places in the Final Rule itself (page references below are to the Federal Register Vol 81. No. 57) that leave little room for a conclusion other than that the Department adamantly contends that “persuader activities” simply aren’t legal services and, as a result, communications about “persuader activities” aren’t entitled to be treated as advice or as privileged communications.  Stated another way, it seems the Department’s view that the only thing that a lawyer exists to do in this aspect of the labor law arena is provide advice to ensure the legality of her clients’ conduct.

In fact, the Department appears to be make this interpretative position abundantly clear in multiple places:

Agreements under which a consultant exclusively provides legal services or representation in court or in collective bargaining negotiations are not to be reported.  “Advice” does not include persuader activities, i.e. actions, conduct, or communications by a consultant on behalf of an employer that are undertaken with an object, directly or indirectly, to persuade employees concerning their rights to organize or bargain collectively.  If the consultant engages in both advice and persuader activities, however, the entire agreement or arrangement must be reported. (p. 15937)

While a lawyer who exclusively counsel an employer-client may provide examples or descriptions of statements found by the National Labor Relations Board (NLRB) to be lawful, this differs from the attorney or other consultant affirmatively drafting or otherwise providing to the employer a communication tailored to the employer’s employees and intended for distribution to them.  The latter is reportable, the former is not. (p. 15938)

A lawyer or other consultant who exclusively counsels employer representatives on what they may lawfully say to employees, ensures a client’s compliance with the law, offers guidance on employer personnel policies and best practices, or provides guidance on NLRB or National Mediation Board (NMB) practice or precedent is providing “advice.” (p. 15939)

Indeed, this rule exempts from reporting agreements involving exclusively the following activities: . . . legal services (as distinct from persuader activities undertaken by a lawyer). (p. 15952)

The reporting requirements in Form LM-20 . . . are designed to identify the specific persuader activities undertaken, not the legal advice provided.  In other words, if an employer retains a law firm with the purpose to persuade, directly or indirectly, its employees not to unionize, that retention is not privileged because it is not done with a purpose of obtaining a legal opinion, legal services, or assistance in a legal proceeding. (p. 15996)

Now, at just a common sense level, it seems implausible for anyone at all familiar with what lawyers do to say that anything other than advice isn’t legal services.   If an attorney communicating to a client about how to use more persuasive language to advance its legal rights isn’t the provision of legal services, why?  It certainly seems like legal services to me.  The conversation also presents for me another reminder about the fact that RPC 2.1 is almost never discussed when it ought to be with respect to the role lawyers play, and are supposed to play, in going beyond just giving legal advice.

I will admit that, at first blush, it was difficult for me to figure out how the Department, in requiring this Section 203(c) reporting, could just disregard the fact that Section 204 indicates that “attorney-client communications” are exempt from reporting where such communications are defined as “information which was lawfully communicated to [an] attorney by any of his clients in the course of a legitimate attorney-client relationship.”  But, having digested the whole rule, I understand that there is some mixture of interpretive history and judicial decisions lurking behind the scenes on which the Department of Labor rests its positions:

[T]he Department notes that — consistent with the interpretation that section 204 has received from the courts — it always has construed section 204 as roughly equivalent to the limited attorney-client privilege under the common law.  The Department has never embraced the view that section 204 creates a broad, separate exemption for attorneys that supplants 203(c). p. 15953

The Department’s interpretation in that respect does find support in a Sixth Circuit case, Humphreys, Hutcheson and Moseley v. Donovan, 755 F.2d 1211 (6th Cir. 1985).  Humphreys determined that Section 204 was intended to provide the same scope of protection against disclosure of information as is provided for under federal common law attorney-client privilege.  That case, and another even older case from the Fourth Circuit (Douglas v. Wirtz, 353 F.2d 30 (4th Cir. 1965)), are things the Department points to for their claim that “Congress recognized that the ordinary practice of labor law does not encompass persuader activities.” (p. 15996)

What I’m also very troubled by, and not just intellectually, but practically, is the DOL’s position that language in an attorney-client engagement agreement about the scope and nature of services provided is not protected by the attorney-client privilege.  The Department uses this position to brush aside concerns expressed in a variety of the comments it received during the public comment period about requiring the law firm’s engagement agreement with the employer client to be made public and to have to provide information through checking boxes about what activities were performed.   The Department maintains that the same Humphreys decision out of my circuit, the Sixth Circuit, supports that conclusion as well.  I’m not entirely certain that the Department isn’t stretching the language of Humphreys too far especially when it also is willing to contend, with respect to an engagement agreement that: “information that may reveal client motives regarding exclusively legal advice or representation sought would generally be redactable, but information concerning client motives related to the persuasion of employees is not privileged and would remain reportable.”  (p. 15995)

The one aspect of attorney-client confidential communications that the DOL does seem to get right is the non-absolute nature of confidentiality protection under the ethics rules where states have adopted rules similar to ABA Model Rule 1.6.  So, if the “persuader” rule adopted by the DOL ends up being treated as within its powers so as to be recognized as “other law,” then nothing about RPC 1.6 will serve to prevent reporting of the required items.  The privilege dilemma, however, will remain.

Thus, the practical takeaway for law firms worried about this issue — i.e. practicing in this sphere — would seem to be to get accustomed to either entering into two separate engagement agreements with their clients, one that would be bare-bones to cover anything that would be done that might stray into “persuader activities,” so that one is the only one that has to be attached to the Form LM-20 or (2) get very accustomed to crafting engagement letters that can be readily redacted to protect privileged communications within the text.  The final “persuader” rule, for its flaws, at least does acknowledge the ability of lawyers and law firms to redact the agreements it submits; though even on that front, there is troubling language in the rule that would appear to set up points of skirmish over the details of when that is done as well.

Given the effective dates of this, there is certainly time between now and July 1 to figure out how to do so.

Of course,  given the fact that it would appear litigation to challenge the rule is in the offing, who knows if it will ever come to pass.

“Other law” is always changing – the DOL’s new Final “Persuader” Rule – Part 1 of 2

The scope of confidentiality lawyers owe to their clients has long been a subject that I find fascinating.  Over the last few years, I’ve mulled how its broad scope will continue to play out with current and future generations of both lawyers and clients who routinely, almost even instinctively, share seemingly every detail of their lives on one online platform or another.  That general topic though of what confidentiality under the ethics rules might look like in 10 years is a discussion for another day, if ever.  The fact remains, though, that in jurisdictions pattered after the ABA Model Rules, there exists a version of Model Rule 1.6 — like Tennessee’s RPC 1.6 — that establishes an obligation of confidential treatment as to all information related to representation of a client.

The rule contemplates that anything can be disclosed provided you have the client’s express consent to do so or, alternatively, if disclosure is impliedly authorized to carry out the representation.  Beyond that, jurisdictions that hew to the ABA approach, then offer a list of circumstances in which a lawyer has discretion to make a disclosure, but isn’t obligated to do so.  Among those circumstances are instances where the lawyer reasonably believes the disclosure is necessary “to comply with other law.”  Model Rule 1.6(b)(6).

In Tennessee, we have carved out a further category of topics where a lawyer is obligated to disclose information, despite it otherwise being confidential.  For Tennessee lawyers, the comply with “other law,” exception to the duty of confidentiality is housed in that provision and, thus, is a mandatory duty of disclosure.  RPC 1.6(c)(3).

Keeping up with the vast array of ways that “other law” might appear to require lawyers to disclose information about their representation of clients can be a difficult enough task when your reason for interest is only about the exercise of a discretionary right of disclosure.  It can get significantly more stressful to keep up with developments in other law if the stakes are ratcheted up by a mandatory ethical obligation.

The “other law” aspect of the duty of confidentiality is why, for example, a client’s payment of your fee with $10,500 in cash is a development that would require a lawyer to fill out the appropriate paperwork to report that transaction to the IRS on Form 8300 because of federal law.  The fact that the fee was paid in cash on a particular date and in that amount is certainly information related to representation and, thus, confidential under RPC 1.6, but because other law requires the disclosure — the duty of confidentiality falls.  There are other existing examples, but I’ve already taken the scenic route to the actual point of today’s entry so one example will have to suffice.

Earlier this month, the U.S. Department of Labor published the final version of a long-discussed new “persuader” rule.  This issue was only on my radar screen because, at the end of an ethics seminar a few months ago, a lawyer approached me to ask if I was keeping up with the looming development and if I understood its potential for infringing on privilege and confidentiality for lawyers and law firms.  I wasn’t, and didn’t, at the time.  I am, but still not sure I do, now.

Admittedly, labor relations is not my native tongue, so a reader may lose a little something in my translation of the background leading to the adoption of the final persuader rule.  If you speak labor relations more fluently, or are interested in learning, you can read as much or as little as you’d like of the whole final rule in the Federal Register itself here.  You can also read the full versions of each of the other items I mention below if I have properly managed to include the links for each.

So, federal law, through the Labor Management Reporting and Disclosure Act of 1959 (LMRDA) has long required two sets of parallel reports that are supposed to be made in order to disclose expenditures that are made in connection, for example, with labor-organizing activities.  One report is required of labor organizations such as unions.  Another report has been required from employers when they hire a labor relations consultant to help it persuade employees about issues relating to bargaining and whether/how to organize.  Existing law provides that both direct persuader activities and indirect persuader activities are supposed to trigger such reports, but the law exempts employers from having to file a report when the purpose of hiring the consultant is just to get advice.  That exemption is set forth in Section 203 of the LMRDA.  Existing law also exempts from reporting attorney-client communications.  That exemption is set forth in Section 204 of the LMRDA.

According to the current U.S. Department of Labor, as explained in its Overview/Summary document, the Department has long been interpreting the law incorrectly to define “advice” in a fashion that extends to conduct that should be treated as “indirect persuasion,” and, thus, no reports are ever filed on the employer side other than for the hiring of consultants who have direct contact with employees.  The new persuader rule is clearly articulated by the Department of Labor as being about changing the interpretation of “advice” to limit its protective scope and cause reports to be filed regarding consultants that are helping employers craft messaging and other efforts at persuasion.

If you are following along still at this point, you will see the looming issue for lawyers and law firms retained by employers in situations involving labor organization issues.

Now, the Department of Labor, at least rhetorically, is going to great lengths to insist that the new rule it has enacted will not invade attorney-client privilege (confidentiality under the ethics rules isn’t really mentioned in the documents discussed below) and that reports won’t be required when an employer hires a lawyer or law firm just for the purpose of getting advice on complying with legal obligations.

The Department of Labor’s Overview/Summary states the Final Rule “exempts any agreement that involves only the provision of legal services” and also states that:

The Final Rule does not affect attorney-client privilege.  It only requires the disclosure of the identity of the client, the fee arrangement, and scope and nature of the persuader agreement in cases where the consultant has agreed to provide services other than legal services — specifically, to take action with intent to persuade employees regarding union representation or collective bargaining.

In the OLMS Fact Sheet regarding Employer-Consultant Agreements, discussing examples of exempt agreements, the Department explains:

As a general principle, no reporting is required for an agreement or arrangement to exclusively provide legal services.  For example, no report is required if a lawyer or other consultant revises persuasive materials, communications, or policies created by the employer in order to ensure their legality rather than enhancing persuasive effect.

In the Q&A materials put out by the Department of Labor, this point about not invading privilege is repeated:

Q.  Does this rule require disclosure of information protected by the principles of attorney-client privilege?

A.  No.  None of the information required to be reported (e.g., the identity of the parties, terms and conditions of the agreement, and specific persuader activities undertaken) is covered by the attorney-client privilege.  Privileged information is excluded from the reporting requirement by statute.

Yet, there seem to be a number of thorny interpretative questions lurking.  And, a dive into what the actual final rule says in the Federal Register leaves me pretty convinced that the DOL’s effort has blurred the issues of Section 203 and the issue of Section 204 and that its strong rhetoric about what it isn’t doing rings hollow.

I will do my best to describe my thoughts on that more fully in part 2.  So, stay tuned.







Fixing a bad ethics opinion – Kudos to the TN BPR!

Late in 2015, the Tennessee Board of Professional Responsibility issued Formal Ethics Opinion 2015-F-160 addressing issues regarding retention of client files.  I wrote here about a significant problem with the part of the opinion that indicated that our RPC 1.15(b) required retention of all client files for a five-year period.  The problem, to me, was of such significance that I couldn’t leave the criticism to a forum like this one where, if I’m lucky, it is read by a couple of hundred lawyers.  So, I also submitted a longer column about the problematic ethics opinion to the ABA/BNA Lawyers’ Manual on Professional Conduct, which was kind enough to accept it and publish it.

I am extremely pleased to report that the BPR has done the right thing and amended 2015-F-160.  You can go read 2015-F-160(a) in its entirety at the BPR”s website here.  But, the important takeaway can be summed up as: (1) only records of the funds (i.e. the kinds of financial records spelled out in more detail in Tenn. Sup. Ct. R. 9, Section 35.1(a)(2)) must be retained for five years; (2) the BPR does recommend as a guideline that lawyers retain all client files for 5 years from the end of the representation; and (3) lawyers and clients certainly can establish their own arrangement regarding a time period for retention.

As indicated in the title, the BPR deserves kudos for acting to amend this ethics opinion.

(P.S. While we’re fixing things, how about fixing the way Formal Ethics Opinions display on the BPR website?  Horizontal scrolling is a bad look – plus printing is a bit of a nightmare.)

ABA Formal Opinion 473 – mostly good advice all the way around

A few months ago, I wrote a post about a frustrating Tennessee Ethics Opinion that offered guidance on lawyers’ obligations when responding to a subpoena for client information by, in part, treating a subpoena as if it were a court order.

Last week, the ABA issued Formal Opinion 473, Obligations Upon Receiving a Subpoena or Other Compulsory Process for Client Documents or Information, that does not suffer from any such mixed-up approach.  Instead, the ABA opinion does a fairly good job of providing a structured analysis for lawyers to follow in an overwhelming majority of jurisdictions and even manages to strike what seems like exactly the right balance on thorny issues that can arise when the subject matter of the subpoena relates to a former client with whom the lawyer is no longer able to effectively communicate.

Opinion 473 revisits ground previously addressed more than 20 years ago in ABA Formal Opinion 94-385 and revises its prior guidance to address several vexing questions lawyers can face when on the receiving end of a subpoena.

Even though Model Rule 1.6(b)(6) grants a lawyer discretion to disclose confidential client information in order to comply with a court order, there are still complicated questions that a lawyer must answer with respect to taking such action and, more importantly, responsibilities to a client or former client that hopefully can be navigated at an earlier time in the process — presumably, a subpoena or other demand from someone seeking the materials made to the lawyer prior to entry of any such order.  (The opinion – as mentioned below – suffers a bit from not dividing out its guidance for situations in which the lawyer first learns of the situation upon receipt of an order as opposed to something else, but clearly is intended to propose that if the lawyer’s first knowledge comes in the form of an order that the lawyer ought to pursue a similar course of consultation with the impacted client/former client, even if the mechanics of seeking a reconsideration of the court order might be more difficult than a motion to quash or for a protective order at an earlier stage of the proceedings.)

The opinion lays out the lawyer’s obligations to notify, or at least attempt to notify, the client/former client and, if the lawyer is able to successfully reach the client/former client, the obligation to consult about how the client or former client wishes for the lawyer to proceed.  Model Rule 1.6(a) makes clear that, with informed consent, the client or former client can simply authorize the lawyer to just provide the materials sought by the subpoena and that would be that.  Before the client would provide the green light to comply though, the opinion highlights that the lawyer should, as the “informed” part of that consent, be certain that the client/former client is counseled about available privilege and work product protections, as well as confidentiality protections under RPC 1.6 itself.  At the same time, the opinion serves to remind the lawyer to be mindful of situations in which there may be downstream repercussions for the client if the information in the materials is disclosed to others.

Once the appropriate level of consultation occurs, if the client wants to oppose compliance with the subpoena, then:

the lawyer should, as appropriate and consistent with the client’s instructions, challenge the demand on any reasonable ground.  If, after making the challenge, the court or other tribunal rules against the motion to withdraw or modify the order or demand for production, “the lawyer must consult with the client about the possibility of appeal to the extent required by Rule 1.4.”  If the client decides not to appeal and gives informed consent to disclosure, the lawyer must produce the documents and information consistent with the client’s instructions and as described in Part IIC of this opinion.

Now, the heart is in the right place with this guidance, even if the execution is a bit lacking.  The opinion muddies things up by attempting to address two separate situations at once (situation #1 would be where an order has already gone down before the lawyer ever has the chance to consult with a client; situation #2 would be in trying to determine whether a client will oppose something like a subpoena before any order is ever entered) and, thus, the second sentence in that quote seems confusingly out of context.  Also, I’m pretty sure the committee means to reference IID — Complying With the Court Order — not IIC — Where the Client Is Unavailable for Consultation.

Opinion 473 also discusses an often overlooked practical point involving such situations in the real-world:  who pays for the lawyer’s time and trouble in dealing with this situation?  The opinion, on that front, strives to be about as helpful as it can be on that issue, but, the topic that really matters is where the targeted representation is of a former client, and the lawyer’s ability to force a former client to pay for the effort is matter of contract law or quantum meruit recovery beyond the scope of the ethics rules.  The opinion does suggest putting something in an engagement letter to address in advance as an option.

As to what do about clients/former clients whose whereabouts or unknown or with whom the lawyer otherwise is unable to communicate, the opinion relies upon the language of Cmt. [15] to Model Rule 1.6 to explain that the lawyer still has an obligation to assert any reasonable objections to the initial demand for the materials, explain to the court the efforts the lawyer has made, albeit unsuccessfully, to reach the former client, but ultimately can then abide by, and comply with, any court order that results.

Finally, the opinion wraps up by revising past guidance from Formal Opinion 94-385, in light of intervening changes in the language of Model Rule 1.6, to make clear that “the balance changes once a court or other tribunal has ruled on the lawyer’s initial objection,” and, if the client is unavailable to the lawyer for consultation, the lawyer is not required by the ethics rules to pursue an appeal of such an order.


The Wisdom of Ferris Bueller. The reality of Machiavelli.

Life moves pretty fast.  If you don’t stop and look around once in a while, you could miss it. – Ferris Bueller

Back in December 2015, during my Ethics Roadshow I talked a little bit about one of the items that had been rolled out for public comment by the ABA Commission on the Future of Legal Services, model regulatory objectives that might be used by jurisdictions to examine both how they regulate lawyers and how they might go about regulating others who provide legal services.  The discussion I had about this topic with audiences was way too disjointed at the time. (It is a topic that itself could have had an hour’s worth of dedicated discussion, but it was just one of many topics covered during the three hours of my presentation repeated across several cities in Tennessee.)  Earlier this week, a version of those regulatory objectives was adopted by the ABA House of Delegates after heated arguments and over significant opposition.  The ABA is now hawking Resolution 105 as a way to move the needle forward in an effort to ensure that those who provide legal services to consumers but are not lawyers are appropriately regulated.  Time will tell whether that effort will gain traction.

It was slightly less than a month ago that the news started to roll out about the planned launch of Avvo Legal Services and I wrote about it here. At the time, it was being tested in five cities.  Presumably, such testing was positive (or the outcome of the testing never really mattered) because now the news comes along that Avvo Legal Services has officially launched in 18 states.  Which states?  Well you can go read the article at the link, or you can see the list at the end of this post.

I’ve always liked the Ferris Bueller and life does move pretty fast, but another quote somehow seems more appropriate in this moment, though it comes from someone much less lovable:

[F]or there is such a gap between how one lives and how one ought to live that anyone who abandons what is done for what ought to be done learns his ruin rather than his preservation. – Niccolo Machiavelli

Oh yeah, which states has Avvo Legal Services launched in and is looking to have lawyers participate:

  • Arizona (RPC 7.2(b) “A lawyer shall not give anything of value to a person for recommending the lawyer’s services except that a lawyer may: 1) pay the reasonable costs of advertisements or communications permitted by this Rule; (2) pay the usual charges of a legal service plan or a not-for-profit or qualified lawyer referral service, which may include, in addition to any membership fee, a fee calculated as a percentage of legal fees earned by the lawyer to whom the service or organization has referred a matter, provided that any such percentage fee shall not exceed ten percent, and shall be used only to help defray the reasonable operating expenses of the service or organization and to fund public service activities, including the delivery of pro bono legal services. The fees paid by a client referred by such service shall not exceed the total charges that the client would have paid had no such service been involved. A qualified lawyer referral service is a lawyer referral service that has been approved by an appropriate regulatory authority….”)
  • California (Rule 1-600 (A) “A member shall not participate in a nongovernmental program, activity, or organization furnishing, recommending, or paying for legal services, which . . . allows any third person or organization to receive directly or indirectly any part of the consideration paid to the member except as permitted by these rules, or otherwise violates the State Bar Act or these rules.”)
  • Colorado (RPC 7.2(b) “A lawyer shall not give anything of value to a person for recommending the lawyer’s services except that a layer may (1) pay the reasonable costs of communications permitted by this Rule; (2) pay the usual charges of a not-for-profit lawyer referral service or legal service organization….”)
  •  Florida (Rule 4-7.17(b) “A lawyer may not give anything of value to a person for recommending the lawyer’s services, except that a lawyer may pay the reasonable cost of advertising permitted by these rules, may pay the usual charges of a lawyer referral service, lawyer directory or other legal service organization….”)
  • Georgia (RPC 5.4(a)(5) “A lawyer or law firm shall not share legal fees with a nonlawyer, except that: . . . a lawyer may pay a referral fee to a bar-operated non-profit lawyer referral service where such fee is calculated as a percentage of legal fees earned by the lawyer to whom the service has referred a matter pursuant to Rule 7.3. Direct Contact with Prospective Clients.”)
  • Illinois (RPC 7.2(b) “A lawyer shall not give anything of value to a person for recommending the lawyer’s services except that a lawyer may (1) pay the reasonable costs of advertisements or communications permitted by this Rule; (2) pay the usual charges of a legal service plan or a not-for-profit lawyer referral service….”)
  • Massachusetts (RPC 7.2(c) “A lawyer shall not give anything of value to a person for recommending the lawyer’s services, except that a lawyer may: (1) pay the reasonable costs of advertisements or communications permitted by this Rule; (2) pay the usual charges of a not-for-profit lawyer referral service or legal service organization….”)
  • Maryland (RPC 7.2(c) “A lawyer shall not give anything of value to a person for recommending the lawyer’s services, except that a lawyer may (1) pay the reasonable cost of advertising or written communication permitted by this Rule; (2) pay the usual charges of a legal service plan or a not-for-profit lawyer referral service….”)
  • Michigan (RPC 7.2(c) “A lawyer shall not give anything of value to a person for recommending the lawyer’s services, except that a lawyer may: Michigan Rules of Professional Conduct Last Updated 2/4/2015 (i) pay the reasonable cost of advertising or communication permitted by this rule; (ii) participate in, and pay the usual charges of, a not-for-profit lawyer referral service or other legal service organization that satisfies the requirements of Rule 6.3(b)….”)
  • North Carolina (RPC 7.2(b) “A lawyer shall not give anything of value to a person for recommending the lawyer’s services except that a lawyer may (1) pay the reasonable costs of advertisements or communications permitted by this Rule; (2) pay the usual charges of a not-for-profit lawyer referral service that complies with Rule 7.2(d), or a prepaid or group legal services plan that complies with Rule 7.3(d)….”
  • New Jersey (RPC 7.2(c) “A lawyer shall not give anything of value to a person for recommending the lawyer’s services, except that: (1) a lawyer may pay the reasonable cost of advertising or written communication permitted by this Rule; … (3) a lawyer may pay the usual charges of a not-for-profit lawyer referral service or other legal service organization.”)
  • New York (RPC 7.2(a) “A lawyer shall not compensate or give anything of value to a person or organization to recommend or obtain employment by a client, or as a reward for having made a recommendation resulting in employment by a client, except that: . . . (2) a lawyer may pay the usual and reasonable fees or dues charged by a qualified legal assistance organization or referral fees to another lawyer as permitted by Rule 1.5(g).”)
  • Ohio (RPC 7.2(b) “A lawyer shall not give anything of value to a person for recommending the lawyer’s services except that a lawyer may pay any of the following: (1) the reasonable costs of advertisements or communications permitted by this rule; (2) the usual charges of a legal service plan; (3) the usual charges for a nonprofit or lawyer referral service that complies with Rule XVI of the Supreme Court Rules for the Government of the Bar of Ohio ….”)
  • Pennsylvania (RPC 7.2(c) “A lawyer shall not give anything of value to a person for recommending the lawyer’s services, except that a lawyer may pay: … (2)  the usual charges of a lawyer referral service or other legal service organization….”) (RPC 7.7(b) “A ‘’lawyer referral service’’ is any person, group of persons, association, organization or entity that receives a fee or charge for referring or causing the direct or indirect referral of a potential client to a lawyer drawn from a specific group or panel of lawyers.”)
  • Texas (Rule 7.03(b) “A lawyer shall not pay, give, or offer to pay or give anything of value to a person not licensed to practice law for soliciting prospective clients for, or referring clients or prospective clients to, any lawyer or firm, except that a lawyer may pay reasonable fees for advertising and public relations services rendered in accordance with this Rule and may pay the usual charges of a lawyer referral service that meets the requirements of Occupational Code Title 5, Subtitle B, Chapter 952.”)
  • Virginia (7.3(b) “A lawyer shall not give anything of value to a person for recommending the lawyer’s services except that a lawyer may:(1) pay the reasonable costs of advertisements or communications permitted by this Rule and Rule 7.1; (2) pay the usual charges of a legal service plan or a not-for-profit qualified lawyer referral service ….”)
  • Washington (RPC 7.2(b) “A lawyer shall not give anything of value to a person for recommending the lawyer’s services, except that a lawyer may (1) pay the reasonable cost of advertisements or communications permitted by this Rule; (2) pay the usual charges of a legal service plan or a not-for-profit lawyer referral service….”)
  • Wisconsin (RPC 7.2(b) “A lawyer shall not give anything of value to a person for recommending the lawyer’s services, except that a lawyer may: (1) pay the reasonable cost of advertisements or communications permitted by this rule; (2) pay the usual charges of a legal service plan or a not-for-profit or qualified lawyer referral service. A qualified lawyer referral service is a lawyer referral service that has been approved by an appropriate regulatory authority….”)

Airing the profession’s dirty laundry

Ok, let’s talk about the 60 Minutes piece that aired this past Sunday.  If you haven’t watched it, by all means you should — it is worth the 20-30 minutes of your time.  You can watch it here.  As always, I’ll wait until you get done and come back.

Now, it seems beyond dispute that the 60 Minutes broadcast plays as a story likely to blacken the eye of the profession.  It’s also the kind of piece that, as it gets legs, tends to lead inexorably to vigorous discussions about the need for new and better regulations to crack down on using lawyers for such transactions.  Further, the story is a bad look for all of the lawyers involved in terms of publicity (with the exception of the lawyer who said no and should be well primed to do a Diet Snapple commercial or two) and that the ABA comes out at the end looking particularly bad.  Not just because of the level of enthusiasm that its former president showed for pursuing assisting the arrangement on a going forward basis (and, call me cynical, but the written statement about what the cameras would have shown if they’d kept rolling after the meeting ended rings hollow in my ears) but also for the juxtaposition of the ABA’s constant position in opposition to the Senate legislation which Senator Levin was given camera time to speak about having pursued on many occasions without success.  In the interest of being fair though, here is the link to the statement the ABA has put out in response to the 60 Minutes piece and that does rightly focus on the fact that the ABA’s perspective in terms of opposing legislation has been driven by seeking to protect the attorney-client privilege.

There are, of course, really weighty ethics issues raised by this rare sort of “behind closed doors” opportunity to see what happened at these consultations but before I roll up my sleeves to offer some of my own thoughts on those issues, I want to highlight one aspect of the story that the broadcast piece mentioned once but then blew right past because I think it deserves larger prominence for a positive it shows regarding the state of our profession.

Very early in the broadcast, Kroft mentions that this Global Witness outfit started out by contacting 50 law firms by telephone using their prepared script to try to set up in-person meetings to explore the potential representation.  From the brief image up on the screen, the script for the telephone portion would appear to have had the same core facts designed to make the situation raise red flags as the story told in person.  Kroft quickly then says that Global Witness was able to obtain sit-down meetings with 13 law firms and then stressing that of those 13, and of the 16 lawyers that they met with from those 13 law firms, only 1 turned them down.  (“Diet Snapple – it gives you the courage to make the right choice!” or “Diet Snapple – I drink it because my standards are higher.” – Hey, Madison Avenue, call me – I’m a veritable gold mine.)

1 out of 16 or even 1 out of 13 sounds like a very bad rate of success in terms of firms and lawyers seeing the “red flags” and declining to get involved.  But that isn’t the real ratio, the more positive takeaway is that some 37 law firms appear to have been savvy enough and focused enough on ethics (or at least loss prevention) to balk even before agreeing to an in-person meeting in the first place.  That’s a good thing and deserves to be given some media attention.  Further, the only 1 out of 13 turned them down is something of a skewed number when the story only focuses on the 13 of the 50 firms that were already inclined toward trying to pursue this business, i.e. didn’t reject the scenario outright over the telephone alone.

Now that I’ve mentioned the good, let’s dwell a bit more on the bad.  A government minister from a West African nation rich in minerals who is now rolling in dough from arranging for companies and corporations to obtain mineral rights is the potential client?!?!  Then the representative for that person indicates that they aren’t willing to tell you which one?!?!  Only 1 of the lawyers we are shown explicitly mentioned the Foreign Corrupt Practices Act by name, which is disappointing enough.  But it is equally remarkable (at least to me) that none of the lawyers appear to have spent a moment being concerned about the Specially Designated Nationals list or any of the other aspects of the fact that there is a giant list the Treasury Department keeps of certain countries, entities, and individuals with whom it is illegal for a U.S. citizen to do business in any respect.

If the potential client’s agent is telling you that the person involved is in a West African country but they won’t tell you which one and they are not inclined to want to necessarily even share the person’s name, how in the world could you or your firm ever expect to be able to run any appropriate check to make sure you aren’t dealing with someone in a country, or someone who themselves are on, the SDN list?

And speaking of things you are setting yourself up to never be able to do, whither these firms’ conflict checks?  Maybe 60 Minutes just edited out any of the conversations where these attorneys talked about how difficult it would be to run an appropriate conflict check if they won’t be told the country of residence or name of the individual whose money and assets they would be attempting to shield?

Now, as to the core legal ethics issue presented by the various consultations we are permitted to witness because of the hidden camera, where is the line between counseling a client about compliance with the law versus assisting a client on a path to accomplish fraudulent or illegal conduct? That issue is primarily addressed in Model Rule 1.2(d).  That rule provides:

A lawyer shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent, but a lawyer may discuss the legal consequences of any proposed course of conduct with a client and may counsel or assist a client to make a good faith effort to determine the validity, scope, meaning or application of the law.

Comment [9] of that Rule provides a bit of elaboration with its last sentence: “There is a critical distinction between presenting an analysis of legal aspects of questionable conduct and recommending the means by which a crime or fraud might be committed with impunity.”

Now, I have my own opinion of how close the various lawyers caught on the hidden camera footage were to crossing the line that separates the two sides of this “critical distinction,” but there isn’t much point ruminating about that given that the interactions weren’t actually “real,” and that they involved a proposed scenario that sounded shady enough that almost 75% of the law firms approached initially were able to recognize it and turn it away without agreeing to an in-person meeting.  I suspect if you asked most viewers of the 60 Minutes piece — especially those without law degrees — many of them would tell you they found those conversations to be much more along the lines of “recommending the means by which a crime or fraud might be committed with impunity.”

I do think it is worth pointing out though that Tennessee has an even stricter variation of RPC 1.2(d) as we add the words “or reasonably should know” after “knows” and before “is criminal or fraudulent.”  If the lawyers under the 60 Minutes spotlight had been Tennessee lawyers, it would be very difficult to defend the path they appeared to be pursuing as they wouldn’t be able to fall back on a claim that they didn’t “know” of criminal or fraudulent conduct; rather they would be battling over whether the criminal or fraudulent nature of the endeavor being explored was something that they reasonably should have known.

Variations on two unfortunate, recurring situations.

Much has been written over the last few years about the risks for lawyers of increasingly sophisticated financial scams targeting them.  I’ve even written about the issue some in the past.

Within the last 30 days or so, a “new” financial scam has gotten some publicity that should help real estate lawyers in particular to remain vigilant.  British media detailed how this sort of scam works, and a California paper reported on a panel discussion at a real estate forum about something similar, and the ABA Journal online did a nice piece this week tying the two media pieces together.  The nature of this scam, which those in the know have dubbed “spear phishing,” appears capable of summarizing as a three-step process: (1) gain unauthorized access (either by hacking or malware of some sort) to the email account of an attorney (or real estate agent or potentially someone else involved in the process, such as the lawyer’s client); (2)  exercise patience and monitor the traffic on the account to find an ongoing deal that’s headed to closing, and (3) use the control over, or information learned from, the compromised email account to send an email from that account to the other participants that changes existing wire transfer instructions to divert funds to the hacker.

Fortunately, one of the takeaways from the articles is that real estate lawyers can protect themselves to a significant degree from the most financially harmful step of the scam simply by getting confirmation by telephone or some other non-email means of any email instruction that changes the destination for funds.  The implication of the success of the second step of the scam — that someone else may be already hacked into a lawyer’s email account and just patiently reviewing all that the lawyer has going on and biding their time to shoot their spear — just further underscores the importance of cyber-security/data security in the modern practice of law.  And, not just for real estate lawyers, as there are other areas of practice where “spear phishing” lawyers could provide access to large financial hauls.

Lawyers losing their licenses as a result of abandoning their law practice and leaving clients high and dry is also a far too common occurrence.  Most of the time, the same external forces (whatever they may be) that drove the lawyer to abandon their law practice also lead to the lawyer ignoring the disciplinary proceedings altogether culminating in disbarment.  Such a story playing out in the context of running a law school clinic is not something I can recall running across before until now.

A New York lawyer was disbarred earlier this month in connection with allegations that he had abandoned the cases he was handling through the employment law clinic at the Cardozo School of Law (the law school affiliated with Yeshiva University in New York City).  That law school shut its clinic down in 2013, but claimed it expected that the lawyer – who had been an adjunct clinical professor at the school — would either wrap up or transfer all of the cases before the clinic closed.  When the law school never received information about the cases, it apparently filed a complaint against the lawyer for abandoning the cases.  The lawyer never responded or participated in the disciplinary proceedings.  That lack of cooperation led first to his immediate suspension in March of last year and, ultimately, to the January 2016 order of disbarment which indicates its entry came about pursuant to a rule that permits disbarment when a lawyer takes no action within six months of being immediately suspended.




First, trust but verify. Second, trust until verified.

Lawyers need to be able to trust some people to do their jobs.  These people might be support staff, colleagues, or sometimes even opposing counsel.

When it comes to trust accounting though, situation after situation demonstrates that no matter how much a lawyer trusts an employee with access to or some control over trust account funds, the lawyer always has to take a “trust but verify” approach to the situation.

A recent disciplinary decision out of Louisiana provides yet another example of the risk to lawyers in not actively supervising employees with access to and control over trust funds.  In this instance, a long-trusted employee of the lawyer (and someone who had in fact previously worked for the lawyer’s own father) started stealing funds from the settlement of the lawyer’s cases and continued to do so for a period of about five years.  The total amount of the theft appears to have been unclear to all involved for quite some time.  Even the ex-employee ultimately was unsure exactly how much she had stolen.

The opinion makes clear that the lawyer did not do anything to verify the employee’s handling of funds and also makes clear that, if that had been all there was to the story, that negligent supervision alone would likely have been sufficient to result in discipline to the lawyer even though what the employee did was criminal.  (RPC 5.3(b) in Louisiana and elsewhere requires that lawyers having direct supervisory authority over nonlawyers “shall make reasonable efforts to ensure that the person’s conduct is compatible with the professional obligation of the lawyer.”)  The opinion also reads pretty clearly though that, if that had been all that was in the mix, the lawyer likely would have only ended up walking away with a public reprimand.

The disciplinary consequences, however, ended up being a 30-day suspension because, in addition to not verifying the handling of funds done by the trusted employee in the first place, he didn’t do the correct thing with funds received after the crime.  The ex-employee was able to swing a loan from a relative and, after she had been reported to the police, repaid $39,312.35 to the lawyer.  Unfortunately, he didn’t put all of those funds in trust and wait until after he was able to completely verify how many clients or third parties funds were missing (and exactly how much) before treating any of the restitution money as his own.

Instead, as the opinion indicates, he had the ex-employee pay the restitution in the form of three separate, simultaneous checks – one for $19,612.35 that went into his trust account; another for $9,700 that went to his operating account, and then a third for $10,000 that went to his personal account.  In the disciplinary proceedings, he claimed that this approach was not provably wrong because he did not know that the amount being put into trust would not be sufficient.  The problem though was that, at that time, he had not yet had any audit performed on his accounts and only after depositing those three checks did he have a a CPA perform an audit of his trust account going back five years.  At the end of that audit though, the CPA determined that the $19,612.35 in trust was not the correct amount and that it should have been $22,330.96.  The lawyer immediately put his own personal funds in to make up the difference.

Unfortunately, the lawyer did not have his CPA also audit his operating account at that time.  The lawyer didn’t help his cause by testifying that he didn’t give access to the operating account, in part, out of a fear that it would be determined that the ex-employee paid back too much and was now actually owed money by the lawyer.

Subsequently, an audit performed by a different CPA retained by disciplinary counsel’s office, looking at both operating account records and trust account records, found that more trust funds were missing and that the balance in trust should have been something north of $34,000.  As a result, he was disciplined more harshly because he was viewed, in the best light, as having put his own personal financial interests ahead of the interests of clients and third parties who were harmed by his ex-employee’s criminal conduct and, in the worst light, of having twice violated RPC 1.15 with respect to the deposit of two of the three checks written by his ex-employee.

The practical lesson from all of this should be — in addition to the incredible importance of the “trust but verify” construct as to those with access to the trust account in the first place — if you are a lawyer victimized by an employee’s criminal conduct, and fortunate enough to be able to get that person to make restitution, you need to deposit the entirety of such funds into your trust account until you can completely verify just how much damage has been done and to whom.  RPC 1.15(a) in most jurisdictions, including in Louisiana, provides for the ability to hold both funds known to belong to clients and funds belonging to third parties together in the same trust account, it is just the lawyer’s own money that must be kept separate.  This Louisiana lawyer absolutely should have had the entire $39,312.35 deposited into his trust account and only moved any of it into his own personal account or his operating account once he was absolutely certain that the money was truly his.

2 out of 3 ain’t bad – NC releases a threesome of ethics opinions on the same day

In a lot of jurisdictions, mine included, formal ethics opinions from the governing disciplinary body are issued, if not rarely, then on a “few and far between” kind of time frame.  In North Carolina, on October 23, 2015, 3 were released in one day.

Two of them provide overall good advice.  One of those two is particularly timely for lawyers given growing concerns about hacking and phishing concerns.  The other offers a very well-reasoned, and appropriately terse, approach to an ethics issue rarely made the subject of ethics opinions.  The third… well let’s hold off saying anything about the third until the end.

NC Formal Ethics Opinion 2015-6 addresses an array of questions that all emanate (more or less) from the same general scenario:  what are the professional responsibilities of a lawyer who, through no fault of his own, has been the victim of crime or fraud that depletes money in the trust account to a level in which all obligations can no longer be satisfied?  2015-6 is a pretty faithful application of the principles underlying RPC 5.1 and RPC 5.3 and reaches the conclusion, over and over again, that a lawyer who gets ripped off despite having in place reasonable measures to give reasonable assurance of compliance with the ethics rules by the other lawyers and nonlawyers in the firm, is not to be held responsible as an ethical matter for making payment of the amount lost as a result of the wrong doing of the third party.  The North Carolina State Bar stresses, as it should, that it is not opining about the potential for civil liability as between attorney and client (or third party who has entrusted funds in the attorney’s trust account) for the lost funds but is limiting itself just to questions of ethical responsibility.

The opinion gives what would serve as a good answer to almost all questions in this general area with its first answer — addressing a scenario where a third party has made counterfeit checks designed to look like they are for the lawyer’s trust account and used those checks to commit theft from the account:

If Lawyer has managed the trust account in substantial compliance with the requirements of the Rules of Professional Conduct… but, nevertheless, is victimized by a third party theft, Lawyer is not required to replace the stolen funds.  If, however, Lawyer failed to follow the Rules of Professional Conduct on trust accounting and supervision of staff, and the failure is the proximate cause of theft from the trust account, Lawyer may be professionally obligated to replace the stolen funds. . . .

Under all circumstances, Lawyer must promptly investigate the matter and take steps to prevent further thefts of entrusted funds.

The opinion essentially applies this same rubric to provide good answers to successive questions, such as whether the lawyer is liable if a hacker gains access to the lawyer’s computer system and causes an authorized electronic funds transfer to take place, and how the lawyer’s duty of reasonable care can require a lawyer to be wary of an email “spoofing” situation designed to result in causing the lawyer to think they are wiring funds to their client but actually wiring funds to someone else.  The opinion even offers practical guidance that, while perhaps not supportable under a strict reading of the ethics rules, makes good sense from a loss prevention standpoint and when we let ourselves remember that the ethics rules are rules of reason and should be construed as such.  Specifically, the opinion indicates that while the lawyer is pursuing and investigating other remedies for clients affected by a theft, the lawyer is permitted, despite the prohibition on commingling in RPC 1.15, to deposit his own funds into the trust account to replace stolen funds.

The second opinion, Formal Ethics Opinion 2015-7, addresses a variation of a question I’ve often been asked by lawyers: do “prior professional relationships” you’ve had outside of the practice of law count to permit in-person solicitation that would otherwise be prohibited by RPC 7.3?  The North Carolina State Bar explains that yes they do.  Specifically, the questioner in 2015-7 can so characterize her relationship with a health care professional someone with whom she developed a business relationship while working as a health care consultant.  In so doing, the opinion succinctly focuses on the heart of the issue — the reason justifying such a prohibition on in-person solicitation at all.   The prohibition exists to “prevent undue influence, intimidation, and over-reaching by the lawyer.”  Thus, certain types of prior relationships are exempted because it is considered “unlikely that a lawyer will engage in abusive practices” when they have those kinds of prior relationships.  The opinion acknowledges that the term “prior professional relationship” is “not limited to prior client-lawyer relationships” and finds the questioner’s situation to qualify.  (Historically, I have made this same point but more expansively by noting that the language of the rules knows how to say “former client” when it means to impose that limitation, as well as how to use other words that would carve out a more narrow exception than what is intended by “prior professional relationship.”

The third opinion, Formal Ethics Opinion 2015-5, actually gives the correct answer, but justifies its response using what I believe is clearly the wrong rule.  In so doing, it fails to even reference the rule that does justify the outcome.  The question the opinion addresses is:

Lawyer A is appointed to represent a criminal defendant in an appellate matter.  Subsequently, Lawyer A withdraws from the representation of the client and Lawyer B is appointed successor appellate counsel.

Must Lawyer A obtain the former client’s consent prior to discussing the client’s case with Lawyer B or prior to turning over the former client’s file to Lawyer B?

The opinion concludes that the answer is no — unless the client had previously specifically instructed Lawyer A to not speak with Lawyer B — but rests its conclusion on the concept that RPC 1.6(a) permits a lawyer to make disclosure of confidential information when “the disclosure is impliedly authorized in order to carry out the representation.”  The problem, however, is that the question makes clear that the first lawyer has already withdrawn from representing the client.  Thus, from the first lawyer’s perspective, there is no representation to carry out much less any disclosure that can be argued to be impliedly authorized for the purpose of carrying out the representation.

There is a justification in the ethics rules for the answer “no.”  RPC 1.16(d) addresses steps a lawyer must still perform after the termination of a representation.  The NC version of the rule tracks the ABA Model Rule in stating generally that:  “Upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect a client’s interests….”  In Tennessee, we make the utlility of RPC 1.16(d)  as the answer to this question more obvious by providing a numbered list of six items that may be included, depending on the circumstances, in “protecting the client’s interests.”  The third item being “cooperating with successor counsel engaged by the client.”  Yet, even without that specific language, the NC rule’s general requirement of taking reasonably practicable steps to protect the client’s interest  is a much more justifiable way of validating the answer to the question presented in Formal Ethics Opinion 2015-5.

Official dishonesty and the consequences for lawyers – 3 of the latest examples

A common theme in many disciplinary proceedings brought against lawyers involves dishonesty.  This should not really be a surprise given that lawyers are human beings and human beings have a tendency toward being dishonest when they can get away with it.  Although there is an ethics rule that, on its face, makes it unethical for a lawyer to engage in any kind of dishonesty at all, lawyers usually only get taken to task for a category I’ll call today official dishonesty.

One such type of official dishonesty involves failure to make full disclosure in connection with an application for admission in some other jurisdiction.  The consequences of this kind of official dishonesty can be severe as is demonstrated by the one year and one day suspension now being imposed on this Pennsylvania lawyer for failing to disclose prior discipline against him when he applied for admission to the federal court in the Eastern District of Pennsylvania.  As luck would have it, the lawyer’s failure to make disclosure involved a 1996 suspension, also of 1 year and 1 day, which was itself brought about by failing to disclose a prior arrest on his original application for admission to practice law in Pennsylvania.

Disciplinary proceedings are not, of course, the only negative outcome that can result from a lawyer engaging in official dishonesty or failure to make full disclosure.  Another kind of negative outcome, discussed before in this post, involves losing out on coverage from your insurer for legal malpractice/professional liability claims.  Law360 has the story of another lawyer who, already faced with defending a legal malpractice lawsuit, is now faced with having no coverage for it as a result of a ruling this month by the Indiana Court of Appeals.

The issue of misrepresentation alleged by the lawyer’s carrier is a common one – a claim, with the benefit of hindsight, that the lawyer was aware he faced a potential claim and should have disclosed such on a 2011 renewal application.  As is also often the story, the claim about which the carrier says the lawyer should have been aware is the same one now being litigated and about which the carrier has refused coverage.  In this instance, the lawyer’s client’s case had been dismissed as a discovery sanction and that dismissal was still on appeal in the Indiana system at the time the 2011 renewal application was completed by the lawyer.  The Law360 piece grabs the salient quote from the court of appeals ruling (which actually reversed a trial court that had sided with the lawyer’s argument that he’d made no material misrepresentation):

“Therefore, because of the severity of the trial court’s remedy – dismissal of the cause – any reasonable attorney in [the lawyer’s] position would realize that his client might pursue a potential legal malpractice claim against him should the Supreme Court affirm the trial court.”

For lawyers, there are quite a few ethics rules that are implicated by acts of dishonesty, RPC 3.3 (false statements to tribunals), RPC 4.1 (false statements to third parties), RPC 7.1 (false statements about the lawyer or their services) but the rule that has the broadest reach, and to which I referred at the beginning of this post, is RPC 8.4(c).

That rule says that “[i]t is professional misconduct for a lawyer to … engage in conduct involving dishonesty, fraud, deceit or misrepresentation.”  Unlike many other ethics rules, the text of RPC 8.4(c) does not limit itself to things done in the course of representing a client.  Figuring out what it does, and does not, actually apply to can be less than an exact science.  For example, I’m confident that I’ve never violated RPC 8.4(c) by telling my kids when they were young that Santa Claus was real nor by bluffing in a friendly game of cards.  But figuring out where the lines are realistically drawn on other issues of dishonesty unrelated to anything the lawyer is doing in the practice of la involves a case-by-case analysis, but if there is an “official” component to the dishonesty, you can count on RPC 8.4(c) finding a way to apply.

A Maryland lawyer learned earlier this month that the price of having been dishonest about something unrelated to his law license was disbarment.  The lawyer in question established an LLC called Carefree Construction Services within a few months after becoming a lawyer and then performed home improvement work through the LLC.  The lawyer, however, was not properly licensed in Maryland as a home improvement contractor and was actually using his brother’s license to do the work without his brother’s permission.

In its opinion, the Maryland court, citing another 2014 decision, expressly addressed the fact that the dishonest conduct had nothing to do with practicing law was of no consequence and that the conduct did violate RPC 8.4(c).  The court also explained that since the conduct involved a misdemeanor (performing the home improvement work without a license) that it considered the lawyer to have committed the kind of criminal conduct that violated RPC 8.4(b) as well.

The opinion also went to some length to explain that, in its totality, the lawyer’s conduct amounted to a violation of RPC 8.4(d) – conduct prejudicial to the administration of justice — and that determination also played a role in ramping up the discipline meted out.  The lawyer had filed a number of lawsuits for non-payment against home improvement customers who had learned of his unlicensed status and, as to one such set of customers, threatening them by email and “attempt[ing] to leverage his position as an attorney to intimidate” the customers into paying him more money.  One example quoted in part in the opinion, involves the lawyer, in an email exchange, with the dissatisfied and fully-informed customer, writing:  “Are you forgetting, I AM A CONSTRUCTION ATTORNEY.  There is nothing about construction law that you can learn on the internet that I am not an expert on.”