The intersection of the ethics rules and the GDPR “right to be forgotten”

Although today is Halloween in my part of the world, I am not offering any spooky content.  I thought about trying to replace all mentions of Maryland in this post with Scaryland, but that just seemed like I was trying too hard.

In fact, I’m a bit torn about even writing about this particular topic because I’m really of two minds in all respects about what to say about Maryland becoming the first U.S. jurisdiction to issue an ethics opinion attempting to wrestle with any aspect of the EU’s General Data Protection Regulation (“GDPR”).

On the one hand, it seems like Maryland ought to be applauded for trying to be on the leading edge of issues of concern and many lawyers (and their firms) are struggling with exactly what GDPR might require of them.

On the other hand, the core premise of the inquiry being addressed involves an assumption about a legal question — not an ethics issue — and is the kind of thing ethics-opinion-writing bodies likely ought to stay away from.

Lots of commentators will give ethics-opinion-writing bodies grief for not, for example, striving to apply Constitutional issues when issuing opinions about the ethics rules.  I’ve probably done that myself in the past.  But, on the whole, more trouble for lawyers can likely come from ethics opinions straying outside the lines and getting a legal issue altogether wrong.

That might or might not have been how it would have shaken out if the Maryland State Bar Association Committee on Ethics had fully committed to trying to figure out whether the premise of the question posed to it in Opinion No. 2018-06 was even how the GDPR would work in the circumstances.

Instead, the committee flagged for the reader the possibility that the GDPR would not require the lawyer to respect the request to be forgotten at all but offered up what is, on the whole, pretty sound guidance that lawyers can bear in mind as to this and similar questions as other jurisdictions start adopting new privacy laws and regulations that may hit closer to home than the GDPR.

The question posed relied on the premise that a former client, if a citizen of the EU, could exercise the “right to be forgotten” by demanding the lawyer delete data about the person and, thereby, cause the lawyer to delete information that would otherwise protect the lawyer in terms of conflict checking in the future to avoid taking on a new client or matter that would involve an unethical conflict of interest as to the former client representation.

The core of the guidance ultimately given – again explicitly premised on assuming that it might ever be necessary – is this:

If a former client asks an attorney to delete the information needed to manage conflicts of interest, and the GDPR requires the attorney do so, we believe that the client’s request can act as a waiver of conflicts that could have been discovered had the data been retained if: (1) the firm provides written advice to the former client that fully informs the former client that deleting the information could result in a conflict and that by requiring such deletion the client consents to the firm’s potential future representation of other clients with conflicts that might have otherwise have been discovered, and (2) none of the attorneys who handle the matter for the firm have any retained knowledge of the former client’s information.

That’s pretty good guidance, actually.

It probably would have been better though if they hadn’t imposed quite so large a burden of communication and advice to the firm in response to the former client.  I think that simply saying that any such request from a former client can be treated by the firm as equivalent to a waiver on the basis that a former client cannot demand that s/he be forgotten and then try to later claim the “forgotten” relationship presents a conflict.

You can read the full Maryland opinion here.

And, if you are interested in more opportunities to hear me try to talk intelligently about what the GDPR does actually mean for U.S. lawyers, I’ll be participating in a panel discussion in Washington, D.C. on November 9 as part of a joint program presented by APRL and the Law Society of England and Wales.  If you’re interested, you can register at this link.

ABA Confirms that Model Rule 1.15 Should Solve What Model Rule 4.4 Doesn’t

So, I am certain you have heard by now that a little under a week ago the ABA issued a new Formal Ethics Opinion to address the ethical obligations of lawyers in the aftermath of a cyber-attack or an electronic data breach.  ABA Opinion 483 makes for a good read and provides good guidance about how the ethics rules work on the subject.

There are lots of decent summaries out there already of this ethics opinion if you want to try the tl:dr approach and just read secondary sources.  I am not going to repeat those summaries here.  Instead, I want to focus on what is, to me and perhaps only me, the most important development that ought to come from this opinion — the recognition by the ABA that “property” in Model Rule 1.15 has to also include digital property.

In the latest ABA Opinion, this issue is addressed with an eye toward thinking about electronic copies of client files, specifically as follows:

An open question exists whether Model Rule 1.15’s reference to “property” includes information stored in electronic form.  Comment [1] uses as examples “securities” and “property” that should be kept separate from the lawyer’s “business and personal property.”  That language suggests Rule 1.15 is limited to tangible property which can be physically segregated.  On the other hand, many courts have moved to electronic filing and law firms routinely use email and electronic document formats to image or transfer information.  Reading Rule 1.15’s safeguarding obligation to apply to hard copy client files but not electronic client files is not a reasonable reading of the Rule.

Now, why is this such an important takeaway to me?  Well, myopia often flows from the egocentric nature of people and I am no exception.  This is an important takeaway to me because I’ve been trying to make this point in an entirely different context – and to little avail — since 2010 when I co-authored an article entitled: “Model Rule 1.15: The Elegant Solution to the Problem of Purloined Documents” published in the ABA/BNA Lawyers’ Manual on Professional Conduct.  Now that article – which you can still find here — was itself an excerpt of part of a chapter of a book I was also fortunate enough to co-author with Doug Richmond that came out in 2011.  The “Elegant Solution” article explained that the lack of guidance offered by Model Rule 4.4(b) on what a lawyer must do if they receive stolen documents (whether on paper or electronically) should be resolved by application of Model Rule 1.15 and the obligations lawyers have under subsections (d) and (e) of that rule.

There are likely lots of reasons why that article has been largely ignored – and when not ignored treated as offering a controversial view to be shunned — but the primary one is that Model Rule 4.4(b) becomes a bit unnecessary as a rule if such questions could have been resolved under Model Rule 1.15.

Model Rule 4.4(b) reads:

A lawyer who receives a document or electronically stored information relating to the representation of the lawyer’s client and knows or reasonably should know that the document or electronically stored information was inadvertently sent shall promptly notify the sender.

Model Rule 4.4(b) only addresses information that a lawyer receives that is known to have been inadvertently sent and only requires the receiving lawyer to give notice to the sending lawyer of what has happened.  It does not address information sent purposely but without authorization, and it punts on what comes next.

In the “Elegant Solution” article, we explained why Rule 1.15 provided answers to the questions Model Rule 4.4(b) won’t address and, particularly in light of this latest ethics opinion recognizing the need for Model Rule 1.15 to apply to digital information, I think our explanation is worth repeating to close out this post:

The Model Rules do, in fact, appear to offer an elegant answer for lawyers who question
their professional responsibilities when they receive documents that may have been purloined or otherwise improperly obtained from another. The answer lies in Model Rule 1.15 and its provisions establishing lawyers’ obligations with respect to ‘‘safekeeping property.’’ See Model Rules of Prof’l Conduct R. 1.15 (2010).  Although lawyers are generally familiar with Rule 1.15 in the trust account context, the scope of the rule is clearly not so limited, as amply evidenced by its repeated references not just to funds or fees or expenses, but also to ‘‘property.’’

Model Rule 1.15(a) declares that ‘‘[a] lawyer shall hold property of clients or third persons that is in the lawyer’s possession in connection with a representation separate from the lawyer’s own property.’’ Id. R. 1.15(a) (emphasis added). Model Rule 1.15(d) further requires that ‘‘[u]pon receiving funds or other property in which a client or third person has an interest, a lawyer shall promptly notify the client or third person.’’ Id. R. 1.15(d) (emphasis added). Finally, Model Rule 1.15(e) mandates that ‘‘[w]hen in the course of the representation
a lawyer is in possession of property in which two or more persons (one of whom may be the lawyer)
claim interests, the property shall be kept separate by the lawyer until the dispute is resolved.’’ Id. R. 1.15(e) (emphasis added).

Analysis of over-the-transom deliveries through the lens of Rule 1.15 establishes that a lawyer, upon receiving purloined documents (or if not clearly purloined at least clearly reflecting privileged or confidential information belonging to someone other than the person who delivered the documents), is obligated to hold those documents separate from the rest of the lawyer’s documents, promptly notify the person from whom the documents were taken, and, if the lawyer is going to refuse to return the documents to that person (and thereby claim either that the lawyer or the lawyer’s client has an interest in them), continue to keep those documents segregated from the rest of the lawyer’s property until the dispute over the documents is resolved,
presumably through a ruling by a tribunal. This approach places no meaningful burden on the receiving lawyer and respects the rights of the party to whom the materials belong.

Friday Follow Up: Ohio Gets to the Right Outcome on UPL

Almost exactly three months ago, I wrote about what I considered to be a very disturbing ruling in a lawyer admissions case in Ohio.  If you missed that post, you can read it here.

I’m pleased to write, in follow-up today, that the Ohio Supreme Court has ultimately gotten to the correct outcome – it has rejected the findings below that the applicant was engaged in UPL while working on Kentucky matters for Kentucky clients in an Ohio office while awaiting action on her application for admission in Ohio.  As a result, it has finally cleared her to be admitted to practice in Ohio after multiple years of waiting after transferring from a Kentucky office of her law firm employer to an Ohio office of that same firm.

The majority opinion does a workperson-like job at justifying that outcome by stretching the meaning of the word “temporary” to its furthest defensible point — anything that is not permanent.  But, as the fascinating-and-much-more-important-to-the-future-of-our-profession concurring opinion explains: the majority opinion did so at the cost of mostly ignoring other text of the rules – particularly the text of the relevant rule that limits when a lawyer can provide services “through an office.”

The concurring opinion deserves your attention and a full read.  It is my strong hope that the rationale and logic expressed in the concurring opinion is the rationale and logic which will be embraced moving forward by all courts and other bodies dealing with this issue.  If RPC 5.5 could be used to determine that a lawyer “working remotely” is engaged in UPL, then RPC 5.5 applied in that fashion is simply, but plainly, unconstitutional.

The core of the concurring opinion’s analysis is a strong and smart understanding of what such a rule is truly saying:

But when applied to a lawyer who is not practicing Ohio law or appearing in Ohio courts, [RPC] 5.5(b) serves no state interest. Plainly, as applied to such a lawyer, the rule does not further the state’s interest in protecting the integrity of our court system. Jones, and others like her, are not practicing in Ohio courts.

Nor does application of the rule to such lawyers serve the state’s interest in protecting the Ohio public. Jones and others in her situation are not providing services to or holding themselves out as lawyers to the Ohio public.  Jones’s conduct as a lawyer is regulated by the state of Kentucky—the state in
whose forums she appears.

The problem is that unless a specific exception applies, [RPC] 5.5(b)(1) holds one to be engaged in the “unauthorized practice of law” and subject to legal sanction therefor simply because one has established an office or a systematic and continuous presence in the state. The rule deems such a
lawyer to have engaged in the unauthorized practice of law regardless of whether her practice touches on the Ohio public or Ohio courts. In an earlier age, perhaps such a rule made sense. Before the advent of the Internet, electronic communication, and the like, a lawyer who worked in Ohio was almost always
practicing Ohio law. But today that is hardly the case. Any number of lawyers, for any number of reasons, may choose to do their work from Ohio. Yet that does not give Ohio a right to prohibit their conduct.

Indeed, imagine what would happen if the rule were strictly enforced. Are we to ban lawyers from setting up a secondary office inside their homes so that they can access their files remotely simply because their homes happen to be in Ohio and their practices in another state? What about a New York attorney who maintains an Ohio vacation home on Lake Erie and is there for several months of the year? Certainly such an attorney has a continuous and systematic
presence in Ohio, but are we really going to say that she has engaged in the unauthorized practice of law because she does New York legal work at her vacation home?

I would conclude that as applied to an out-of-state attorney who is not practicing in Ohio courts or providing Ohio legal services, [RPC] 5.5(b)(1) violates Article I, Section 1 of the Ohio Constitution and the Due Process Clause of the Fourteenth Amendment to the United States Constitution.

Utahlking Ethics Opinions to Me? (Also Texas)

I’m interested in writing today about two recent ethics opinions that manage to go together quite nicely.  Utah Ethics Adv. Op. 18-04 and Texas Professional Ethics Committee Op. 679.  Both involve RPC 1.8 (or at least both should).  And, not only does neither opinion do a very good job with the subject matter it tackles but both tackle subjects where lawyers need to tread very carefully and could use really good advice.

But, as just a quick aside before doing so, I wanted to express some gratitude from last week and point you to a very important story worth reading.  As the culmination of a many-months-long project, I had the chance to share the stage last week at the ABA Forum on Franchising with two excellent lawyers – Shannon McCarthy Associate General Counsel for Chihuly, Inc. and Kevin Kennedy, General Counsel of Wiggin and Dana in Connecticut — and talk about a tricky and delicate topic – lawyers and obligations to report other lawyers with a particular emphasis on issues involving harassment and other toxic behavior.  I was really fortunate to get to work with them both.  For a story that offers something of a how-not-to manual offered by the experience of one of the world’s largest law firms, you can go read up here.

Now, back to regularly-scheduled programming…

While I missed it around the time it came out, the Utah State Bar put out an interesting ethics opinion explaining to lawyers a way they might be able ethically to mitigate their risk exposure in the event of third-party claims against the lawyer based on the client’s conduct.

The opinion declares that “[a]n attorney may include an indemnification provision in a retainer agreement at the commencement of representation that requires the client to indemnify the attorney and related entities against claims that arise from the client’s behavior or negligence.”

In explaining this outcome, the Utah opinion points out that nothing about RPC 1.8(h) directly prohibits it.  However, it doesn’t just stop there, it goes on to explain … just kidding actually.  It stops there on that issue.

As a practical matter, that is sort of a shame because lawyers ought to be cautioned a bit about the problems associated with starting the relationship with a client off with that sort of provision — particularly because if you are that concerned about that risk of liability from the client’s conduct, then maybe a rethink about whether to take them on is in order.  But, if one is going to do it, the beginning of the relationship is certainly more viable than mid-stream.

Speaking of which, that brings me to the Texas opinion, which tasked itself with answering this question:

May a lawyer renegotiate his fixed, flat fee for representing a client in litigation after the litigation is underway if the matter turns out to be greater in scope and complexity than the lawyer and client contemplated?

If Texas was interested in doing this right, it would recognize that the answer lies in application of its version of Model Rule 1.8(a) because that situation is a business transaction between lawyer and client.  Instead, Texas actually announced that its version of that rule does not apply to a mid-stream renegotiation of a fee.

Instead, the opinion points out that Texas courts have considered the issue and have said that it can occur but that there is a “presumption of unfairness.”  Rejecting the opportunity to apply Rule 1.8 to these circumstances is all the more baffling because — providing guidance to interpret ethics rules is the kind of thing ethics opinion writing bodies are supposed to do, rather than providing guidance about what court decisions mean.

In the end though, I’m likely being too harsh on the Texas opinion because it, at least, summarizes pretty nicely the analysis of the dynamic from the lawyer side of things and why, in most situations, effectuating an enforceable renegotiation will be unlikely:

The fundamental nature of a flat or fixed fee is that there is risk to the lawyer that the legal work and time required may exceed what the lawyer might have earned if the lawyer instead billed by the hour.  The client knows with certain that the total fee charged, no matter how much lawyer time or effort is involved, will not exceed the fixed amount.  The client’s risk in a flat or fixed fee agreement is the possibility of paying more than the client would have paid under an hourly billing agreement if the lawyer is able to complete the representation is [sic] less time than originally expected.  Because the lawyer is better able to anticipate the time and legal work required, the lawyer should be mindful that he knowingly assumed the risk — and should not unreasonably seek to change the fee agreement simply because the lawyer agreed to a fixed fee that, in hindsight, is no longer adequate.

(emphasis added).  And, also, amen to that.

 

 

“Let’s put our heads together and start a new country up.”

Serial, perhaps the best known podcast of all podcasts, has recently launched its third season and like one of the REM songs off of Life’s Rich Pageant it focuses on Cuyahoga – but not the river but the County in Ohio – more particularly, it focuses on what goes on inside the Justice Center in Cuyahoga County.  Yet, much like the song was according to Peter Buck, the podcast also may just really be about America and its lost promises too.

So far the first three episodes have dropped, and they are particularly good.  Good, of course, in a troubling way for what they show with respect to the inner workings of the justice system.  Admittedly, all this season of Serial can truly do is show problems in just one particular courthouse in one particular location, but we all know there are universal themes that recur in many other similar venues in the nation.

The first three episodes alone have also given fodder for discussions of legal ethics for those so inclined.  The first episode follows an unfortunate and unfair bar fight through the court system.  The host, Sara Koenig, is given extensive access to the criminal defense lawyer involved.  (The series so far reveals that she was given nearly free rein in the building altogether.)  Even though there is one spot in which Koenig explains that had to be excluded from a meeting between the lawyer and his client in order to protect the attorney-client relationship while they talked, those familiar with the duty of client confidentiality still know that given how incredibly much is actually revealed by the lawyer about the case he is handling, how he is handling it, what he and his client have discussed, that surely there must have been a thorough and clear consent provided by the client for there to be no breach of the lawyer’s duty under Ohio’s version of RPC 1.6.

The second of the first three episodes introduces you to a judge who almost certainly needs to be made the subject of multiple judicial ethics complaints and who seems to have no business sitting in judgment of other people.  But the judge it introduces you to is likely a character-type that will sound very familiar to you in many respects no matter whether you’ve ever been in Cuyahoga County, Ohio or not.

The third episode tackles the very relevant topic of police brutality, the intricacies that can arise when one situation results in intertwining civil and criminal matters, and, for true ethics nerds, raises (at least indirectly) issues associated with a lawyer who swaps places in the system later in their career as well as problematic issues regarding where the line is in court proceedings between advocacy and assisting someone with manipulating evidence and testimony to assure an end result that may be believed to be just.

Anyway, your mileage may vary, but I find myself hooked.  I also find myself really wishing that Karen Rubin over at The Law For Lawyers Today might be able to weigh in at some point on her take on how the show portrays things, but, because she practices in Cleveland, I’m guessing that she is likely too close to the courts and the lawyers involved to be able to comfortably weigh in.

The fourth episode should be out tomorrow.  You should check it out.  (And, yes, I’m a guy with a pretty decent sense of humor and I see the hilarity in me encouraging the few hundred or so people who read this blog to go check out something that has millions upon millions of downloads.)

Proposed revisions to the Code of Conduct for U.S. Judges

So last week I was quoted a bit in a Law360 story related to Judge Kavanaugh’s continued effort to ascend to the highest judicial position in our nation.  If you are a subscriber, you can read the article here.  It had to do with the news of the lawyer who was going to be representing Dr. Blasey-Ford and whether his departure from his firm was really sudden or not and the reasons why a firm with a significant appellate court practice might not want to let themselves have to treat Judge Kavanaugh as an adverse party.  If you are not a subscriber, I’ll offer you the two snippets involving what I had to say:

If Bromwich had stayed at Robbins Russell, Judge Kavanaugh would consequently have become an adverse party for conflicts purposes, potentially complicating the firm’s appellate efforts on behalf of clients, said Brian S. Faughnan, a legal ethics attorney at Lewis Thomason.

“That could have led to Judge Kavanaugh recusing himself from any appellate cases in which Robbins Russell was counsel of record or likely required the firm to seek Judge Kavanaugh’s recusal in all such cases. If he were confirmed, that would mean placing firm clients in a position where potentially only eight justices could hear their cases,” Faughnan said.

Even if Kavanaugh is not confirmed to the Supreme Court, the representation of Blasey Ford could still hurt the law firm as long as Judge Kavanaugh continues to hold a spot on the D.C. Circuit, Faughnan said.

Although that article came out just a week ago, it feels more like a year ago.

Based on the highly partisan nature of what Judge Kavanaugh had to say in his prepared testimony, it seems likely that, for as long as he has a position as a federal judge in any capacity, there will be lots of litigants and counsel that will have to seriously weigh whether to pursue motions for him to recuse from their cases.  “What goes around comes around,” could be a recurring quote referenced in motions seeking recusal for many years to come.

There are lots of other things I might write today about the troubling nature of things, but I will instead send anyone with an interest in where my perspective is at the moment to this piece published elsewhere.

While we are on the subject of federal judicial ethics though, I’d like to point out that there are proposed revisions to the Code of Conduct for United State Judges pending and for which there is a November 13, 2018 deadline for public comment.  The proposed changes do not impact in any fashion the existing rules for disqualification of federal judges — Canon 3(C) —  nor the rule that would be most difficult for a federal judge to claim would permit the making of any false statement under oath — Canon 2(A).

What the proposed changes do address are the conclusions of the June 1, 2018 Report of the Federal Judiciary Workplace Conduct Working Group and the perceived need for additional ethical guidance regarding workplace harassment in the world of federal judges — an area to which none of the accusations against Judge Kavanaugh extend.

The most extensive proposed changes are set out in Canon 3(B) addressing the performance of administrative responsibilities and in new explanatory Commentary.  The rules would include a new provision:

(4) A judge should practice civility, by being patient, dignified,
respectful, and courteous, in dealings with court personnel,
including chambers staff. A judge should not engage in any form
of harassment of court personnel. A judge should not engage in
retaliation for reporting of allegations of such misconduct. A
judge should seek to hold court personnel who are subject to the
judge’s control to similar standards in their own dealings with
other court personnel.

A new paragraph in the Commentary would further explain:

Canon 3B(4). A judge should neither engage in, nor tolerate, workplace
conduct that is reasonably interpreted as harassment, abusive behavior, or retaliation
for reporting such conduct. The duty to refrain from retaliation reaches retaliation
against former as well as current judiciary personnel.  Under this Canon, harassment encompasses a range of conduct having no legitimate role in the workplace, including harassment that constitutes discrimination on impermissible grounds and other abusive, oppressive, or inappropriate conduct directed at judicial employees or others. See also Rules for Judicial-Conduct and Judicial-Disability Proceedings, Rule 4(a)(2) (providing that “cognizable misconduct includes: (A) engaging in unwanted, offensive, or abusive sexual conduct, including sexual harassment or assault; (B) treating litigants, attorneys, judicial employees, or others in a demonstrably egregious and hostile manner; or (C) creating a hostile work environment for judicial employees”) and Rule 4(a)(3) (providing that “cognizable misconduct includes discrimination on the basis of race, sex, gender, gender identity, pregnancy, sexual orientation, religion, national origin, age, or disability”).

You can read all of the proposed revisions here.

Neither a stalker nor a burglar be.

Matters of the heart have caused people lots of problems throughout the course of human history.  Matters of the heart, when the heart is located inside the chest of a lawyer, work pretty much the same way.

Of course, sometimes stories that, on the surface, seem like matters of the heart might be more fairly characterized as being really about the inability of men to avoid controlling or toxic behavior directed toward the women in their lives (or who used to be in their lives).

This post is about a story of a Pennsylvania lawyer who is now suspended from practice over really bad judgment flowing either from a matter of the heart or from the more toxic issue of controlling behavior.  I don’t know the back story or the people involved in any way so I don’t know which, but I have my suspicions.  The story itself makes for an interesting post (maybe?) over and above just being an example of a lawyer behaving badly because it offers another reminder of how aspects of the ethics rules can apply to a lawyer even when they aren’t practicing law, and it taught me that I apparently do not know the full extent of what can constitute burglary.

If this blog is on your reading list, you likely already have read at least one article about this suspended lawyer (hopefully this one) — but in case you haven’t the suspension flowed from his secretly putting a GPS tracking device on the back of his ex-girlfriend’s car and hiding an audio recording gadget insider her car (under the driver’s seat to be more specific) in order to spy on her in hopes of finding out who she was now dating.

To some extent, being suspended for a year followed by four more years of probation is a secondary problem professionally for this particular lawyer because he also will be serving probation in the criminal system for five years as result of a guilty plea to two felonies: criminal trespass and to something of a violation of a criminal wiretapping statute in Pennsylvania for the same conduct.

Because of the felony convictions, it should certainly come as no surprise that the ethics violations with which he was tagged include a violation of Pennsylvania’s Rule 8.4(b) – conduct involving the commission of a crime reflecting dishonesty.

His suspension was also premised on a violation of Rule 8.4(c) which is simply the general provision prohibiting lawyers from engaging in any conduct involving dishonesty or fraud.  I’ve written in the past about the problematic potential scope of Rule 8.4(c)’s prohibition for lawyers given that it is not in any way actually textually moored to representation of a client or even to conduct related to the practice of law.

This probably would not be the kind of case where a lawyer would get much traction trying to argue that applying that rule to this kind of conduct would amount to overreaching.

As promised above, the other tidbit of note – more just educational for me – is the notion that, although he didn’t plead to the charge, he was also charged with burglary under Pennsylvania law for what he did to his ex-girlfriend.  That’s a new one for me given that while he may have broken into her vehicle, he didn’t actually take anything out of it but instead left something inside of it.

Turns out, under Pennsylvania law, burglary is defined to be entering any building or occupied structure with the intent to commit a crime inside.  So, this must mean that for the charge against him to have been colorable, his ex-girlfriend’s car was inside a garage at the time he put the recording device inside.

So, while there are many lessons to take from the situation described above, hopefully for most of you reading this the most practical one — the one that addresses the thing you are most likely to do that would be bad — is to remember that if you do not regularly practice a particular area of law you probably don’t know as much about it as you think you do.

(Also, though I know you don’t need this reminder, once your significant other moves on, you should too.  And, even if you can’t, don’t stalk them.  Seriously.)

Nebraska demonstrating less patience than Tennessee

Although I live in SEC country, I am a Chelsea FC fan rather than a follower of college football.  So this is not a sly college football reference in my title.  (I am aware that apparently UT lost its first game of the season but have literally no idea whether the Cornhuskers have even played yet in 2018.)  This post title is actually a very short description of the difference in how quickly the Nebraska Supreme Court managed to disbar an attorney who was obviously flouting the rules than did the Tennessee Supreme Court in the last matter about which I wrote.  The less patient approach on display in Nebraska was entirely understandable because the underlying rule being flouted was related to trust accounts and not conflicts.

The now-former lawyer in question – John Nimmer – went from one prior instance of having received a public censure to being disbarred for his next offense in 2018 because he repeatedly commingled funds and used money in client trust accounts to pay an array of personal expenses.  He also managed to get disbarred because his only defense to the charges – which were first pursued in 2016 but covered his banking for more than a decade – was something of an attempt to plead ignorance.  (He also managed a too-cute-by-half variation of something I’ve written about before as apparently having worked for one particular Wisconsin lawyer – failing to also keep records sufficient to fully prove what you did.)

Interestingly, before I tell you all that I will tell you about why the outcome seems so justifiable, it is worth noting that the initial decision against him was not disbarment, it was merely a 1-year suspension followed by 2-years of probation.  Nimmer objected to/appealed that proposal and, ultimately, got disbarment.  (It likely would come as no surprise to anyone who does disciplinary defense to hear that Nimmer was pro se on appeal.)

Also interestingly, unlike your normal trust account violation disciplinary proceeding, this one began when the SEC (no, not that one I referenced earlier, the Securities and Exchange Commission) made a referral in March 2016 to Nebraska bar regulators after gaining access by subpoena to Nimmer’s trust account records and finding much questionable activity.

The SEC’s “review of Nimmer’s trust account transactions revealed that he wrote numerous checks for personal expenses, ranging from rent and child support to
dog boarding and landscaping fees.”

Nebraska bar counsel first asked Nimmer to explain a number of the checks and he declined to do so.  They then issued their own subpoena for his trust account records covering a time period going back more than 10 years to January 1, 2006.  Thereafter, they pursued a formal petition for discipline against him alleging that:

between January 2006 and February 2016, Nimmer wrote personal checks on
his client trust account to 29 different businesses, individuals, and organizations. Additionally, it alleged that on December 20, 2007, Nimmer deposited a $10,000 check from his mother issued to him with the notation “loan” into his client trust
account.

As often happens in pro se disciplinary proceedings, Nimmer first challenged (unsuccessfully) the notion that there was any jurisdiction since bar counsel worked for the Supreme Court and also sought out a requirement that bar counsel should have to be disqualified because Nimmer was going to call him as a witness.  He ultimately got a special counsel assigned to his case, but the dismissal motions were unsuccessful.  Nimmer also tried a number of other procedural “Hail Marys,” including trying to have his trust account records barred from evidence because he was only actually required to keep records going back 5 years.

You can read the 31-page opinion here (N00006179PUB) and the array of transactions that were involved and that Nimmer admitted happened.  But, I’ll end with a quick elaboration on that “ignorance of the law” defense, paired as it was with an attempt to argue that he was acting at all times in good faith.

Essentially, the record was undeniably clear that Nimmer used his trust account like a personal checking account — he repeatedly wrote checks to pay the power company, his internet service provider, to pay for his daughter’s camps and health insurance, to pay for his cell phone service, and even one to pay his Nebraska State Bar dues out of his trust account.

Nimmer attempted to argue that “maybe” he was actually using earned fees he had deposited into the trust account to make these payments but he didn’t exactly offer documentation to support the possibility.  He also argued that the commingling rules were less than clear so he didn’t understand that he couldn’t, for example: receive a loan from his mother for $10,000, deposit that into his trust account, and then use that $10,000 to pay a whole series of personal debts.

Nebraska grabbed language from our nation’s capital to quickly dispatch of such an argument in this situation:

The District of Columbia Court of Appeals explained it well: “If a failure to understand
the most central Rules of Professional Conduct could be an acceptable defense for a charged violation, even in cases of good faith mistake, the public’s confidence in the bar and, more importantly, the public’s protection against lawyer overreaching
would diminish considerably.”  In re Smith, 817 A.2d 196, 202 (D.C. 2003).

Making it up as you go (but for a good cause): Texas State Bar Op. 673

There has been something of a trend of late in terms of ethics opinions focusing on variations on the breadth of the duty of client confidentiality and the inconvenience it creates for lawyers who have bought in to the modern trend of sharing and oversharing when online.  There was this opinion from the ABA and then this opinion from the ABA, for example.

The latest opinion in this vein is Professional Ethics Committee for the State Bar of Texas Op. 673.  Except, it is only partially in this vein because, while it starts out heading down the path of explaining how the duty of client confidentiality might prohibit lawyers from being able to do something useful, it swerves away from what would be the likely conclusion in most jurisdictions.

Of course, it does so essentially by making up a justification nearly out of whole cloth but, if you’ve ever participated in, and benefited from, access to any kind of online forum or listserv frequented by lawyers, it reaches a conclusion for which Texas lawyers should be grateful.

The questions addressed in Op. 673 are:

  1.  Does a lawyer violate the Texas Disciplinary Rules of Professional Conduct by seeking advice for the benefit of the lawyer’s client from other lawyers in an online discussion group?
  2. Does a lawyer violate the Texas Disciplinary Rules of Professional Conduct by seeking advice for the benefit of the lawyer’s client through informal, direct consultation with another lawyer in a different firm?

The opinion then goes on to describe arrangements that will be familiar to anyone who has spent anytime on any sort of lawyer listserv or other social media group setting or online forum but also makes the point that lawyers reaching out to pick someone’s brain about an issue or perform “lazy person’s research” can also happen in the “meat space,” offline when one lawyer seeks out another lawyer’s input in a version of informal mentoring.

The Texas opinion squarely flags that the biggest concern for the asking lawyer in such scenarios is protecting the confidentiality of client information.  (Importantly, the opinion also does a nice job of flagging for the answering lawyer the most significant risks for her – potentially creating duties to the asking lawyer’s client or wittingly or unwittingly violating duties to her own other clients by helping the lawyer.)

Nevertheless, the opinion explains that the asking lawyer can proceed even if providing some background information that is likely to identify the client or situation is necessary in order to get the advice without violating the ethics rules as to the disclosure of confidential information.

It is the opinion of the Committee that Rules 1.05(d)(1) and (d)(2) allow a lawyer to reveal a limited amount of unprivileged confidential information to lawyers outside the inquiring lawyer’s law firm, without the client’s express consent, when the inquiring lawyer reasonably believes that the revelation will further the representation by obtaining the responding lawyers’ experience or expertise for the benefit of the client, and when it is not reasonably foreseeable that revelation will prejudice the client.

This is where the Texas opinion is able to rely on two things.  One is a “creative” interpretation of the “implied authorization” aspect of the rule on client confidentiality that most jurisdictions also have.  (Texas Rule 1.05(d)(1)).  The other is a nuance in Texas’s rule that jurisdictions tracking the Model Rule don’t have at their disposal to justify this kind of lawyer-friendly (and not exactly consumer unfriendly) outcome.  (Texas Rule 1.05(d)(2)).

Starting with the second is the easy approach because it really is the most important thing to know to explain the outcome – Texas’s version of RPC 1.6 (which they have numbered as Rule 1.05) contains an exception (d)(2) that allows a lawyer to reveal information that is “confidential” but “unprivileged” when “the lawyer has reason to believe it is necessary to do so in order to ‘carry out the representation effectively.'”

For context, here is the entirety of Texas 1.05(d):

(d) A lawyer also may reveal unprivileged client information:

(1) When impliedly authorized to do so in order to carry out the representation.
(2) When the lawyer has reason to believe it is necessary to do so in order to:
(i) carry out the representation effectively;
(ii) defend the lawyer or the lawyer’s employees or associates against a claim of wrongful conduct;
(iii) respond to allegations in any proceeding concerning the lawyer’s representation of the client; or
(iv) prove the services rendered to a client, or the reasonable value thereof, or both, in an action against another person or organization responsible for the payment of the fee for services rendered to the client.

Now, I could quibble with that word “necessary” and how seeking out assistance from an online discussion forum could ever be “necessary,” but I can admit to being a fan of outcome-determinative analysis when I’m a fan of the outcome.  (To be clear, I have always tried very hard when making use of any kind of online forum to not let any cats out of any bags in terms of actual whos, whats, and wheres.)

The fact that the Texas opinion still involves a “making-it-up-as-you-go” approach though comes through loud and clear by the fact that the opinion has to provide a set of numbered considerations spanning more than a full page to guide lawyers in deciding whether and how much confidential but unprivileged information could be disclosed.  If you want to work through those factors, you can do so at pages 2-4 of the actual opinion itself here.

In any jurisdiction that does not have something like Texas’s Rule 1.05(d)(2) though, getting to this kind of result is a lot more difficult since it involves having to try to push the envelope on the “implied authorization” aspect of Model Rule 1.6(a).

Yet, again, this kind of conduct is likely not anything that a client would complain about and often results in driving down the cost of the representation by gathering the wisdom of a crowd before spending hours on research so… as good a time as any to bring back up again my thoughts on how Model Rule 1.6 ought to be revised.

Information overload; summer struggles.

Mid-August often feels like summer doldrums.  Yet, there has been so much recent information of interest in the world of legal ethics that it is hard to keep up.  Thus, one can manage to feel simultaneously adrift and overloaded.

In that spirit (and because I am that “one”), here are a handful (plus 2) of laconic (if not insightful) entries about important things that have happened of late but that between the constant push/pull of overload and doldrums will not be written about here separately at any great length:

  1.  The competitive space in the legal industry impacted by developments in artificial intelligence and the continued push of providers of legal services other than law firms had a “you got your chocolate in my peanut butter” moment recently with the announcement that one of the Big 4 accounting firms – E&Y – was purchasing Riverview Law, which among other things is responsible for the AI product KIM.  You can read a pretty good summary of what this might mean in the short (and long) term at the first link above and here.
  2. A California Bar task force is undertaking exploration of whether to change rules to permit people other than lawyers to own legal services firms.  This move was prompted by a report the California Bar commissioned from a leading guru, Bill Henderson who you can keep up with here.   Though action from this report could be seismic for the legal profession the task force isn’t scheduled to provide any such report until the end of 2019 by which time, California might not actually be able at the rate things are going to “go first.”
  3. Utah is about to be able to be added to the list of U.S. jurisdictions that allow limited licensing of paralegals so that they can practice certain types of law similar to Washington’s set up for Limited License Legal Technicians (LLLTs).
  4. LegalZoom put out a press release about having received a secondary investment of half a billion dollars in a deal that values it at $2 billion dollars total.  (As the old joke goes, that is a tough amount of money to envision, so try thinking of a billion dollars as being represented by a one-hundred dollar bill and now imagine you had 2 of those!)
  5. A coalition of law firms (including law firm biggie Baker Hostetler – which you might recall as being the first major law firm to sign up with ROSS) and startups in the blockchain space have made a big announcement about an endeavor they intend to launch in October, as Forbes reports, to: “develop a new legal services platform called the Agreements Network. Originally revealed in April, the network is being designed to allow lawyers to perform tasks like managing contracts, leases, and governance documents via smart contracts that are compatible with the public ethereum blockchain.”
  6. The enacted-but-never-implemented “Persuader Rule” that I wrote some about many, many moons ago was rescinded by the Department of Labor, in part, having heard the concerns that were expressed by many over the harm it would inflict on attorney-client privilege and client confidentiality.
  7. And speaking of the intersection of government and legal ethics, the current occupant of The White House speaks of John Dean as if he were a villain in the story of Watergate.  For those of us who focus on legal ethics, and are familiar with the role that the events of Watergate played in the evolution of modern legal ethics, that is a pretty chilling piece of information.