Yet another decision coming out of Washington that complicates life.

Nope.  This too is not a post having anything to do with the recent election.  The Washington in the title is the State of Washington, and the decision is the controversial 5-4 decision issued by the Washington Supreme Court in Newman v. Highland Sch. Dist. back on October 20, 2016.  The Washington court, over a strenuous dissent, ruled that the attorney-client privilege did not apply to protect a lawyer’s communications with a former employee of the lawyer’s corporate client.

You can read the entirety of the opinion, if you’d like, here.  But, I’d suggest that you’d do just as well to read the wonderful treatment of the opinion, and the interviews obtained from prominent folks about it, in this piece put out by Joan Rogers with the ABA/BNA Lawyers’ Manual on Professional Conduct.  Joan, as always, does a great job with a pretty deep dive into the issues raised.  [And, see, this is proof that I don’t only praise the ABA/BNA reporters when they quote me in a story.  ; ) ]

I find myself in agreement with the dissent and those interviewed by Joan that are critical of the opinion, but not only for the way that the ruling takes a crabbed view of the privilege in the corporate context and seems to fail (or be unwilling) to grasp that people who have certain important information belonging to the corporation that the attorney needs to know may very well have moved on to a different place of employment by the time the corporation’s lawyer needs to speak with them.

The other concern I have about this sort of outcome on privilege is that it can serve to drive lawyers, as a workaround, to decide to take on representation of the former corporate employee in what becomes a joint representation with the corporation in the matter in order to be able to secure application of the privilege to communications.

There is nothing inherently wrong with such an approach, but it does create real potential for claims to be raised by adversary counsel that the undertaking is intended solely to restrict them under the relevant analog to Model Rule 4.2 from being able to communicate with the former employee.  (Of course, depending on the particular language of the jurisdictions RPC 4.2 and accompanying comments, there hopefully already exists an argument for the lawyer involved that the person was treated as off-limits under RPC 4.2, but I digress a bit.)

From my experience, the more fundamental problem is that lawyers pursuing such a course — often with a blindered focus on privilege issues — do not always take the time to think through all of the other angles that can come into play by taking on this second client in the matter.

The concept of an “accommodation” client is one that some prominent minds in the legal ethics community consider to be at least highly controversial if not altogether antithetical to the premise of an attorney-client relationship.  Nevertheless, it is a recognized concept and a lawyer can lay out the concept in an engagement letter with this former employee to indicate that if something goes wrong and the interests of the lawyer’s primary client and the former employee’s interest diverge that the lawyer will be permitted to simply withdraw from representing the former employee while continuing to represent the corporation.  There is also the available structure of a limited scope representation under RPC 1.2(c), to make clear that the added representation will be limited in scope and duration so as to decrease the likelihood that the interests of the original client and this former employee will become cross-wise during the time period in which both clients are being represented.

ABA Law Connect post-mortem. ♫ Five. Five dollar. Five dollar not long. ♫

This is going to be a short update offered on a Friday for any weekend reading needs you may be facing.

A bit back (on Back to the Future day actually) I mentioned (almost as only an aside) the pilot project that the ABA was launching in cooperation with Rocket Lawyer to offer a limited-scope representation service where consumers of legal services could seek a quick answer to a specific legal question, and a follow up, from participating lawyers for $4.95.

Yesterday, The American Lawyer (which usually has its stuff behind a firewall) put up a publicly-available piece about the ABA’s decision to walk away from the joint venture.  Although just coming to light now, the American Lawyer piece indicates that the ABA dropped the Rocket Lawyer partnership in January 2016.

The fact that this fizzled out as quickly as it did could be a real indication of where lines may be drawn that simply cannot be overcome in the near future — which is a sentiment you could glean from one of the quotes from the Executive Director of the California State Bar near the end of the piece — or it may just be an anomalous event heavily influenced by other circumstances.  It, of course, cannot help but be connected in terms of timing at least (as The American Lawyer piece rightly noticed) to the contentious proceedings in the ABA House of Delegates over the adoption of proposed guidelines for states to use in seeking to regulate the conduct of nontraditional legal providers.

Either way, any post-mortem on ABA Law Connect ought to be a useful opportunity to make what should be a fundamental, and non-controversial, point.  The idea of any service where a lawyer makes herself available to answer a discrete question from a client, without a continuing obligation to provide further representation, is absolutely something that can be done in compliance with the ethics rules in any jurisdiction that a rule in place patterned upon ABA Model Rule 1.2(c).  That rule provides:

A lawyer may limit the scope of the representation if the limitation is reasonable under the circumstances and the client gives informed consent.

The primary fly-in-the-ointment in any given proposed limited-scope situation is whether a limitation is “reasonable.”  In the words that show up in Comment [7] to RPC 1.2 (albeit only with reference to a not-so-state-of-the-art method of communication):

If, for example, a client’s objective is limited to securing general information about the law the client needs in order to handle a common and typically uncomplicated legal problem, the lawyer and client may agree that the lawyer’s services will be limited to a brief telephone consultation.  Such a limitation, however, would not be reasonable if the time allotted was not sufficient to yield advice upon which the client could rely.

Presumably, ABA Law Connect was set up so that its underlying agreements (whether click-wrap or otherwise) had all participants involved acknowledging that there may be some questions for which answers cannot be provided in a limited scope representation universe because they are too complicated.

The other thorny issue that can often make or break participation by a lawyer in an arrangement designed to provide a high-volume of limited-scope representations is conflicts.  While the ethics rules contemplate the ability to limit the scope of a representation, the limited-scope client is still a client for purposes of RPC 1.7 and then becomes a former client for purposes of RPC 1.9.

The ABA Model Rules, already provide relief for lawyers from this conflict burden as long as they are providing these kind of “short-term limited legal services” through a “program sponsored by a nonprofit organization or court.”  (ABA Model Rule 6.5.)  The Rocket Lawyers of the world, however, are in the business of being for-profit endeavors and, thus, cannot offer the limited conflict of interest exposure that can be offered by the same bar associations that denounced ABA Law Connect as jeopardizing their revenue stream.

A duty to ask: Another of the unintended consequences of unbundling

Yesterday, the ABA Standing Committee on Ethics and Professional Responsibility issued its latest ethics opinion, Formal Opinion 472, “Communication with Person Receiving Limited-Scope Legal Services.”  On the whole, it isn’t a bad opinion.  It is well-constructed, addresses multiple topics that seem ripe for discussion, and clearly is the product of a lot of thought and consideration.

The main topic it seeks to address involves a situation that doesn’t fit nicely into traditional models – the use of the authority under RPC 1.2(c) to provide limited scope services to a client to provide what are usually referred to as “unbundled” legal services and whether/when a lawyer on the other side can treat the litigant as unrepresented for purposes of RPC 4.3 versus when RPC 4.2 applies.

RPC 1.2(c) wasn’t originally a rule designed to necessarily encourage unbundling, especially not in the litigation context, but that is a place that it has gone.  As the ABA Formal Opinion explains:

Limited-scope representation may include assisting a litigant who is appearing before a tribunal pro se, by drafting or reviewing one or more documents to be submitted in the proceeding.  “This is a form of ‘unbundling’ of legal services, whereby a lawyer performs only specific, limited tasks instead of handling all aspects of a matter.”

In Tennessee, there was a proposal a few years ago that would have involved rule changes on the civil procedure side to try to address the reality of problems with limited scope representations in litigation proceedings.  Concerns were expressed that judges might not let lawyers withdraw in accordance with terms of a limited scope representation. If memory serves, the proposal would have required lawyers in such situations to file a notice of appearance that revealed that the representation essentially had an expiration date and then would have permitted the lawyer to file a notice of withdrawal that the court would have no discretion to overrule once complete.  There were voices in opposition to aspects of the proposed rule, ironically, to make the point that it would truly make recipients of such services into second class citizens as the party on the other side would be fully aware that they could likely paper to death the lawyer in the short term to levy pressure or could simply hunker down and wait the inevitable withdrawal.  It probably was a bad rule and ultimately was not adopted.

This ABA opinion probably will be viewed in the future as a bad opinion, and I already wish it hadn’t been issued in this form.  Usually an ethics opinion that exhorts the fact that the ethics rules are “rules of reason and must be construed and applied ‘with reference to the purposes of legal representation and the law itself,'” can be counted upon to reach a practical, well-measured result.

I have no doubt the authors believe they did so here, but they squarely put the onus on the attorney who is undertaking a traditional representation model and placing the burden there is the wrong outcome under the opinion’s own terms.

In addition to calling upon the exhortation from [14] Scope above, the opinion hangs its hat on being just a repetition of the warning in Comment [8] to RPC 4.2 that a lawyer cannot circumvent RPC 4.2’s prohibition by “closing eyes to the obvious.”  Yet, the framing doesn’t track that warning at all.

In describing circumstances it says are enough for knowledge of representation to be inferred, the opinion offers:

[W]hen a lawyer representing a client faces what appears to be a pro se opposing party who has filed a pleading that appears to have been prepared by a lawyer or when a lawyer representing a client in a transaction is negotiating an agreement with what appears to be a pro se person who presents an agreement or a counteroffer that appears to have been prepared by a lawyer.

How would proceeding on the basis that you don’t actually “know” that there is a lawyer involved behind-the-scenes in either scenario “closing eyes to the obvious?”

The only obvious thing is that the “eye of the beholder” will make all the difference.  Today, it’s already fairly easy for a person, without a law license, to use the internet to find forms and pleadings of all sorts from other cases and, with some modification, attempt to use them for their own purposes.  That’s true even if you don’t bring into the mix companies that offer such forms for a fee.  When is it going to appear there is a lawyer involved as opposed to when it is going to appear that someone is buying forms or cannibalizing materials from the internet?

If the endeavor of trying to reconcile this “gap” where RPC 1.2, 4.2, and 4.3 intersect was to be undertaken “with reference to the purposes of legal representation,” then (if you didn’t already figure this out) I think the answer should clearly have been different.

The purpose of permitting unbundling as a good thing is inherently the idea that some access to the assistance of a lawyer is better than no access.  Half a loaf and all that.  Thus, unbundling necessarily contemplates that the client will have to navigate certain aspects of the matter — including communicating with counsel for the other side — on their own.  So, why shouldn’t the onus be placed on the person receiving unbundled services (with the guidance of their limited scope lawyer to make a choice — either (a) get the benefit of counsel’s involvement on a behind-the-scenes basis in exchange for the burden of being fair game for direct communication; or (b) get the benefit of being shielded from direct communication with counsel for the opposing party in exchange for the burden that your lawyer must come forward, no matter how limited the scope, and communicate forthrightly about that involvement?

Local counsel arrangements, RPC 1.2(c), and trying to avoid the wrath of court

This month the New York City Bar Association has issued an interesting formal ethics opinion on what is, in some respects, a surprisingly little discussed ethical situation:  What it can mean for a lawyer’s ethical obligations to simply be serving in a matter as “local counsel.”  When I first saw some of the media coverage of the issuance of this opinion — with some headlines/blurbs in the style of: “formal ethics opinion indicates that local counsel have all the same ethical obligations to the client as other counsel,” I started to worry that all the NYCBA did was make the kind of obvious point for which issuance of a formal ethics opinion should have been deemed unnecessary.  But, upon actually reading the full opinion, it is much more valuable than an exercise in stating the obvious.

The heart of the opinion focuses upon a concept that is (or at least should be) entirely uncontroversial in light of the existence of RPC 1.2(c) – someone serving as local counsel can certainly pursue an agreement with the client to limit the scope of their responsibilities as long as the limitations are reasonable.  The opinion smartly explains that this kind of arrangement “does not absolve a lawyer from complying with her ethical duties.  Rather, it narrows the universe within which those ethical obligations apply.”

The opinion then goes to some length to try to tease out examples of restrictions that would be viewed as reasonable and others that should not be reasonable.  One of which I’d like to note but put a pin in for just a second because it plays very much into what is sorely missing from the guidance in the opinion.  The first example the opinion offers as being acceptable would be where “[a] local counsel is asked to file a pro hac vice motion on behalf of an out-of-state lawyer in a multimillion dollar securities action, but not to perform any other work on the case once the out-of-state lawyer is admitted.”

The opinion then, at its conclusion, rightly stresses that local counsel still has to make certain to comply with relevant court rules regarding counsel’s responsibilities but then immediately points out that those kind of rules are outside the scope of what the NYCBA can opine about.  But the rub is that the first example proffered by the committee in its opinion is the kind of situation that it is difficult to imagine local counsel could ever manage to pull off and comply with relevant court rules.

From a loss prevention perspective, the risk for local counsel who serves in a very limited role like this where they find themselves being counsel of record in name only isn’t a compliance with the ethics rules question but one of ending up on the hook for lead counsel’s missteps, either in terms of the wrath of the trial court or a lawsuit for malpractice by the client.  Obviously, a limited scope arrangement signed off on by the client will go a long way toward chopping the legs out from under the malpractice suit.  But, in any jurisdiction like Tennessee’s where the pro hac vice rule still requires the local counsel to be present for hearings generally and to be on the pleadings, whether or not the lead counsel is the one calling the shots and running the litigation, to the trial court the “local” counsel is likely to be viewed as being on the hook for what happens in the litigation just as much as the lead counsel regardless of what sort of agreement may have been reached with the client.

Thus, in the end, this kind of opinion is of limited usefulness to lawyers looking for practical guidance on how risky it might be for them, as local counsel, to agree to be truly a passive almost bystander in connection with litigation.  In my opinion, the one additional piece of guidance that the committee could have offered that would have been within the scope of its mission was to suggest that a well-done limited scope representation engagement agreement for a local counsel in a litigation matter would include a provision that would expressly authorize the local counsel, should it become necessary, to produce the agreement to the court to make the court fully aware of the division of labor and responsibilities.  That might not be a bullet-proof way of deflecting a court’s wrath about something lead counsel did wrong, but it could only help.