Today – Ethical Issues When Changing Law Firms.

There probably has been news this week about a set of departures of lawyers from one prominent firm to another or efforts that firms are taking to disincentivize their lawyers from taking their clients and moving on to a new destinaton.  As I indicated on Monday, I’m not actually around at the moment so this post was prepared and scheduled in advance so I won’t pretend that I’m doing anything other than guessing.  (As the McElroy Brothers would say, I’m sort of parting the kimono at this moment.)  But it is still that time of year, and just last week there were stories such as this one and this one and this one about such topics.

Today, if you are in any of the states where it is being broadcast today, including Alabama and North Carolina, you can sign up to hear me talk for an hour on Ethical Issues When Changing Law Firms.  In addition to getting necessary CLE credit, you’ll hear me discuss aspects of RPC 5.6 and RPC 1.16, as well as talk a bit about the relatively recent revisions to ABA Model Rule 1.6 to permit disclosure of client confidential information for purposes of running conflict checks when looking at making a lateral move.

Although in my practice I have advised and counseled both lawyers moving firms and firms being left behind, today’s seminar will have as its primary focus the perspective of a lawyer making a move and practical tips and approaches having an eye toward avoiding grass stains in your search for greener pastures.

A proposed ABA Model Rule 8.4(g) has been put out for public comment.

The ABA Standing Committee on Ethics and Professional Responsibility (“SCEPR”) has put out a proposed new RPC 8.4(g) for public comment with a March 11, 2016 deadline for any written comments.  The proposed rule revision would add to the list of types of prohibited conduct in RPC 8.4 the following:

(g) in conduct related to the practice of law, harass or knowingly discriminate against persons on the basis of race, sex, religion, national origin, ethnicity, disability, age, sexual orientation, gender identity, marital status or socioeconomic status.

Now, you might be asking yourself a number of things at this point.  The question that came to mind for me though was, aren’t there already other ethics rules sufficient to make harassing people for no good reason (including for discriminatory reasons) a disciplinary offense?  The answer to that question, I tend to think, is “yes.”  RPC 4.4 — which is entitled “Respect for the Rights of Third Persons” after all — prohibits a lawyer “in representing a client,” from “us[ing] means that have no substantial purpose other than to embarrass. . . or burden a third person.”  I would think that should already capture knowing sexual harassment or intentionally discriminatory conduct by a lawyer to an opposing party or opposing counsel or any other third party a lawyer has to deal with when representing a client.  Now I get that it wouldn’t capture anything a lawyer does when not representing a client, but that is when I would point to existing RPC 8.4(d) which prohibits engaging in conduct that is prejudicial to the administration of justice and does not limit its proscription only to when a lawyer is representing a client.  SCEPR clearly though does not see treatment of the issue through existing RPC 8.4(d) as sufficient.

Existing Comment [3] to RPC 8.4 provides:

[3]  A lawyer who, in the course of representing a client, knowingly manifests, by words or conduct, bias or prejudice based on race, sex, religion, national origin, disability, age, sexual orientation, or socio-economic status violated [RPC 8.4(d)] when such actions are prejudicial to the administration of justice.  Legitimate advocacy respecting the foregoing factors does not violate paragraph [d].

Now, setting aside the tautological circularity of the existing comment (which, of course, can be a bit “Well, other than that Mrs. Lincoln, how was the play?), current RPC 8.4(d) certainly brings something to the table over and above what RPC 4.4 would prohibit.  So, comparing the current comment with the new proposal, my next question was: why not just add “gender identity” and “marital status” to the list in the existing comment and be done with it? there must be some type of conduct not currently prohibited by the rules which is trying to be captured.

The answer to that is clearly that there is a specific type of conduct, and venue in which such conduct occurs, that is trying to be captured by RPC 8.4(g) as proposed.  The revision to Comment [3] offered by SCEPR spells out what the primary purpose of the change seems to be:  “Paragraph (g) applies to conduct related to a lawyer’s practice of law, including the operation and management of a law firm or law practice.”  So, workplace harassment and discrimination appears to be the motivation.

The rest of the proposed new comment language focuses a good bit on providing assurances that legitimate advocacy is still acceptable and that this provision won’t mean that you can’t claim a right of permissive withdrawal under RPC 1.16(b) if a client insists on doing something that the lawyer finds “repugnant” and turning down a potential client because they cannot pay you doesn’t mean you’ve discriminated on the basis of socioeconomic status.

That seems to me like an awful lot of assurances to have to provide in a comment about things a rule doesn’t prohibit.  I could get behind having to do that, I guess (even if it does seem weirdly defensive), if I was able to buy in to the need for the revision itself.  But, I just don’t quite understand how it makes sense to do the very thing this revision appears to be attempting to do — turn employment law issues into disciplinary matters.  Maybe I’m missing something.

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.

South Carolina adopts first of its kind* rule on cognitive impairment.

My paternal grandfather succumbed to Alzheimer’s disease.  As someone who makes a living (such as it is) using his mind (and is pretty certain that he could not feed his family if forced to use his hands for a living), the loss of my mental faculties is one of my greatest fears.  In that regard, I suspect I am quite like a plethora of other lawyers throughout the United States.

Dealing with lawyers on the tail end of their career, and any declining mental acuity that inevitably accompanies the aging process for many human beings, is a troubling issue for law firms of any size, but particularly for smaller firms.  I’m moderating a panel at the AON Law Firm Risk Symposium in Phoenix in October that will be focusing on the ethics, employment, and loss prevention issues associated with the “graying” of the profession.

For all of these reasons, a development out of South Carolina this week is particularly noteworthy to me.  The South Carolina Supreme Court has adopted what, to my knowledge, is a first of its kind (and the reason for the asterisk in the title is that it is possible there is a rule out there like this somewhere but I’m entirely unaware of it) package of rules focused on the issue of lawyers and the onset of “cognitive impairment.”  The measures adopted by South Carolina in this order dated August 24 do three separate, but obviously interrelated things.

First, SC established a new rule, SCACR 428 entitled “Intervention to Protect Clients,” giving authority for the Executive Director of the South Carolina Bar — SC has a unified bar association so that person, unlike say in Tennessee, is a government actor (an important distinction as I discussed in another context here) — to be able, upon receipt of information from someone “expressing concern about cognitive impairment of another lawyer” to appoint “Attorneys to Intervene,” who would in turn have the authority to attempt to meet with the lawyer in question and potentially propose a course of conduct, including actions such as making referral to the “Commission on Lawyer Conduct.”

Second, SC revised its RPC 5.1 to add a new subsection:

(d) Partners and lawyers with comparable managerial authority who reasonably believe that a lawyer in the law firm may be suffering from a significant impairment of that lawyer’s cognitive function shall take action to address the concern with the lawyer and may seek assistance by reporting the circumstances of concern pursuant to Rule 428, SCACR.

Along with that subsection, a new Comment [9] was adopted stressing that the new rule “expresses a principle of responsibility to the clients of the law firm.”

Third, SC imposed an ethical obligation upon judges to take certain steps when they reach a conclusion that a lawyer practicing before them is suffering from this kind of measurable mental decline through adoption of a new Rule 501(G) in the Code of Judicial Conduct.

Whether this will be the start of a trend among states remains to be seen.  It is worth noting that whether specialized rules are adopted or not, in jurisdictions tracking the ABA Model Rules, there are ethical rules already implicated by the situation, not just for the lawyer whose skills are waning, but also for those lawyers who practice with him in a firm or even as co-counsel.  It is, for example, not much of a stretch to read the duties owed by lawyers under RPC 1.1, RPC 1.4, RPC 1.16(a), and RPC 5.1(b) and (c) to perhaps have obligations roughly similar to the new obligations being delineated in South Carolina’s RPC 5.1(d).

It is also well worth keeping in mind that given the economic climate — both market calamities several years ago and things that seem like current market calamities — there is no reason to think that the phenomenon of aging lawyers being reluctant to retire is likely to go away any time soon.  Thus, whether jurisdictions seek to carve out specialized requirements and rules as has South Carolina or not, I feel pretty safe saying these issues will continue to challenge lawyers and law firms for the rest of my lifetime.



New ABA Formal Ethics Opinion Avoids As Many (or More) Questions Than It Answers Actually

Several years ago, we attempted in Tennessee to have our Court adopt an ethics rule that would specifically address what constituted client file materials. The effort was unsuccessful despite the fact that the rule we proposed was a strong, well-written rule. The primary reason we were unsuccessful was (as you’ll decipher from pages 24-25 of the PDF at the next link) that prosecutors and criminal defense attorneys were united in being uncomfortable with the rule because of how it would apply to criminal defendants. If you want to take a gander at our unsuccessful proposed RPC 1.19, you can find it here at pages 103-04. The lesson that at least I walked away from the experience learning was that coming up with a comprehensive solution within the ethics rules to what belongs to the client, and what belongs to the lawyer, is likely too difficult a task to manage.

From a practical standpoint, my typical advice to lawyer clients in this area tends to be that the starting point is that everything in your file is likely required to be produced to your client, or former client, if requested and that work through particular materials item by item to see if you can justify withholding/withstand attack on a decision to hold back. This usually, for example, ends up meaning that, when you study the language of our RPC 1.16(d), anything that the lawyer might think would be worth holding on to because its value to the case might cause the client/former client to make good on owed attorney fees is something that the rule specifically requires the lawyer to turn over because “retention of the work product will [] have a materially adverse effect on the client with respect to the subject matter of the representation.”

Today, the ABA has issued Formal Ethics Opinion 471, entitled “Ethical Obligations of Lawyer to Surrender Papers and Property to which Former Client is Entitled.” Although this opinion will be of some use to lawyers, I think that it really manages to further demonstrate how difficult it is to provide bright-line guidance in this area. It carves away many facts/factors and issues that usually are really important and in the mix when lawyers are trying to make these decisions and thereby doesn’t answer a stream of questions that lawyers usually want to know answers to in this area, such as:

  • What if the client/former client hasn’t paid all my bills and still owes me money? Can’t I use the lien law to hold back file materials?
  • I’m not sure I have stuff going back more than 4 or 5 years. Is that going to be a problem?
  • Do I have to give them a paper copy and an electronic copy of the same items, or can I just do one or the other, and who picks?
  • What if I’ve given them copies of everything as the matter progressed? Do I have to provide that stuff again?

Some of these questions are at least acknowledged in the opinion in footnotes or otherwise as topics that lawyers should be encouraged to try to plan for or reach agreement in advance with their clients.

But even as to the one question that the opinion announces it is deciding, its answer is significantly less than definitive. While the lead headline will likely be that the ABA Opinion adopts the “end product” rather than “entire file” approach. Lawyers who just pay attention to the headline might be walking into a real mess because, to me, one of the most important aspects of the opinion from a practical standpoint is the last paragraph on page 6 and the last sentence of the conclusion.  These parts are where the ABA explains that if the client terminates the lawyer’s representation  before a matter is over, then even things such as notes and memos generated for the lawyer’s own internal purposes and which are not “end product” must also be provided if necessary to avoid harming the client’s interests.

A lawyer’s public interview that should never have happened…

This is not a political blog, nor even a civil rights law blog.  So, there would be no reason for me to write a word here that has anything to do with the Walter Scott incident.  But this is a blog about legal ethics and lawyering issues, and the former lawyer for the police officer who we’ve now all seen shooting a fleeing man in the back decided to engage in this interview and has presented something of a teaching moment about what not to do after resigning from representation of a client.

There is no question that a lawyer in this gentleman’s situation would certainly be able, under RPC 1.16 in most states, to take the opportunity to withdraw from representation of his client.  In Tennessee, for example, a lawyer could justify withdrawal under RPC 1.16(b)(1) simply because (at least, in the absence of the interview) it could have been done without “material adverse effect on the interests of the client,” or under RPC 1.16(b)(4) if perhaps behind the scenes this lawyer learned that his client was insisting “upon taking action that the lawyer considers repugnant or imprudent,” or even under RPC 1.16(b)(7) on the basis that some “other good cause for withdrawal exists.”  South Carolina has provisions quite similar to one or more of these in its own version of Rule 1.16.

Yet, this lawyer (and others in high profile situations) has managed to overlook that RPC 1.16(d) also imposes obligations on lawyers to take steps that are reasonably practicable to protect the former client’s interests during and after withdrawing.  The notion of giving a press interview about the fact of withdrawal, ostensibly for purposes that are unclear other than to say that you can’t say anything about why you’ve withdrawn but to strongly imply you quit on your client once you saw video of him shooting someone in the back multiple time while the person was running away, is pretty antithetical to taking reasonably practicable steps to protect your former client’s interests.

The giving of the interview is made worse, from an ethics perspective, by the broad obligation of confidentiality owed by lawyers not just to clients but to former clients.  This lawyer, while mentioning that attorney-client privilege restricts his ability to explain, appears to be ignoring his obligations of confidentiality which are distinct from the privilege.  RPC 1.6 makes information related to representation of a client confidential.  RPC 1.9(c) imposes certain clear, continuing obligations of confidentiality that prevent lawyers from revealing certain information gleaned from former clients.  South Carolina has similar versions of Rule 1.6 and Rule 1.9.  A public interview such as this, in addition to being unwise and contrary to RPC 1.16(d)’s mandates, is almost impossible to pull off without disclosing information that, even if not privileged, would be confidential under the ethics rules.  That would be true even if the lawyer didn’t seem to be going out of his way to imply that he believed his client when he started representing him a few days ago and, now that he doesn’t believe him any longer thanks to videotape, he has nobly decided to stop representing him.

Fortunately (though it is hard to use that phrase in connection with the matter at all) it doesn’t appear that this ethical misstep has prevented the former client in question from securing new counsel.