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.



Another wrinkle from that malpractice insurance coverage opinion

Earlier this week, I wrote about the scariness that can come with understanding another way that lawyers’ fates are tied together when they practice law in the same firm: one lawyer failing to disclose a known problem on a malpractice renewal application could lead to loss of coverage for all of the other lawyers in the firm.

Another interesting aspect of the Illinois State Bar Ass’n Mutual Ins. Co. opinion is how it sheds light on the potential futility of enacting an ethics rule (or other court rule) requiring lawyers to disclose whether they have malpractice insurance.  According to the chart maintained by the ABA, 7 states mandate lawyers make a disclosure directly to the client regarding whether they have malpractice insurance.  If such a requirement is ever to be imposed, that certainly seems like the preferred option, even if it overlooks that lawyers already are required by RPC 1.4 to communicate important information to clients regarding their matters and a number of different ethics rules (RPC 7.1, RPC 8.4(c)) would be violated by a lawyer not truthfully answering a question from a client or prospective client about whether the lawyer has coverage.  The ABA chart reflects, however, another 17 states mandate that lawyers disclose whether they have coverage or not on their annual registration statement (and most of those states also require the information from the annual registration statement be made available to the public).

Illinois is one of the 17 states requiring disclosure on an annual registration statement and that makes the information available for review on a public website.  Among the concerns expressed by the dissent over permitting ISBA Mutual to rescind the Tuzzolino & Terpinas firm’s policy is that not only would the “innocent” lawyer in this situation have been acting in reliance upon the idea that he had coverage and disclosed the existence of such coverage to comply with his obligations under the rules, but the clients of his law firm could have relied upon the regulatory regime in place — and the fact that the public information would indicate he had coverage — to mean that they were dealing with a lawyer with malpractice insurance.   After the rescission of the policy based on one lawyers’ lack of disclosure, however, the clients were not dealing with lawyers who had coverage after all.

Tennessee has not, to date, ever gotten very far down a path toward serious consideration of adopting such a disclosure requirement.  Telling consumers that they can go look on a state supreme court website to know if the lawyer they are dealing with has insurance coverage provides information only about a fixed point in time, of course.  There are a number of principled grounds for opposition to such efforts.   One is that since most malpractice policies are “claims-made” policies rather than occurrence policies making the existence of a policy less important for a client then knowledge of whether a notice of claim was timely provided.  Another involves the various ethics rules a lawyer would violate if a client, who cared about the topic enough to ask, was lied to by the lawyer.  It seems to me that the ISBA Mut. Ins. Co. case demonstrates another example of a way in which rules that require disclosure of coverage on an annual registration statement and publication of that information publicly could, despite the best of intentions, end up misleading consumers of legal services.