Another development on impaired lawyers, Virginia drafts an ethics opinion

Almost a year ago, I wrote a little bit about what was a first-of-its-kind rule adopted by South Carolina to address the obligations of lawyers in a law firm when a lawyer within their midst was becoming impaired as a result of aging.  South Carolina’s adoption of a new RPC 5.1(d) aimed at that specific situation was part of a package 3 court rules but the language of SC’s RPC 5.1(d) specifically provides:

(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.

I have admittedly not scoured the landscape since SC adopted that rule, but I am not aware of any jurisdiction that has acted similarly.

Earlier this month, Virginia put out for public comment a draft ethics opinion that, at least, touches on the issue of what lawyers are supposed to do in dealing with an aging lawyer on the decline.  The draft of Virginia’s LEO 1886, titled “Duty of Partners and Supervisory Lawyers in a Law Firm When Another Lawyer in the Firm Suffers from Significant Impairment,” can be viewed here.

The opinion offers two hypothetical situations – one involving an associate with a drug problem and the other involving a 60-year old lawyer suspected to be having declining mental faculties.  This hypothetical reads as follows:

George is a sixty-year old partner in a small, two lawyer firm.  He has been honored many times for his lifelong dedication to family law and his expertise in domestic violence protective order cases.  He has suffered a number of medical issues in the past several years and has been advised by his doctor to slow down, but George loves the pressure and excitement of being in the courtroom regularly.  Recently, Rachelle, his long-time law partner, has noticed some lapses of memory and confusion that are not at all typical for George.  He has started to forget her name, calling her Mary (his ex-wife’s name), and mixing up details of the many cases he is currently handling.  Rachelle is on very friendly terms with the [juvenile and domestic relations] court clerk, and has heard that George’s behavior in court is increasingly erratic and sometimes just plain odd.  Rachelle sees some other signs of what she thinks might be dementia in George, but hesitates to “diagnose” him and ruin his reputation as an extraordinarily dedicated attorney.  Maybe he will decide to retire before things get any worse, she hopes.

The overwhelming majority of the proposed VA opinion focuses however on impairment caused by drug or alcohol abuse – the other lengthy hypo set out in the proposed opinion.  This focus is likely because of the recent wave of publicity focusing upon the high rates of depression and substance abuse among members of our profession.  In fact, the proposed opinion right out of the gate references the 2016 report in the Journal of Addiction Medicine that reported that our rate was “2 to 3 times the general population.”  The opinion does a fine job in elaborating on that scenario, but it reads in the end as if it were treating the aging lawyer question as something of an afterthought.  In fact, the only specific guidance the opinion offers on the second hypothetical comes in its last 8 lines:

In the second hypothetical, it is not clear that George has committed any violation of the Rules of Professional Conduct.  Obviously, George’s impairment, unaccompanied by any professional misconduct, does not require any report to the bar under Rule 8.3(a).  Yet, his mental condition, as observed by his partner, Mary, would require that Mary make reasonable efforts to ensure that George does not violate his ethical obligations to his clients or violate any Rules of Professional Conduct.  This would include, as an initial step, Mary or someone else having a confidential and candid conversation with George about his condition and persuading him to seek evaluation and treatment.

Offering just this, and only this, as guidance is a bit of a shame given just how stark and troublesome the facts of the second hypothetical are and how heart-wrenching you could imagine the circumstances in the hypo being for Mary when we’re told they practice in just a two-lawyer firm.

Who exactly would be the “someone else” if not Mary in that situation who could have the confidential and candid conversation with George?  Admittedly, it isn’t quite ethics guidance but it would also be helpful for Virginia lawyers in the future role of Mary in the hypothetical to hear that how wrongheaded and counterproductive Mary’s thinking as to what might ruin George’s reputation is.  Mary’s act of confronting George privately about her concerns is not the thing that would “ruin his reputation as an extraordinarily dedicated attorney.”  Allowing the situation to go unaddressed is much more likely to lead to outcomes in cases — again when we are talking about a two lawyer firm where it simply isn’t possible to think that Mary can keep track of and cover for anything that goes wrong in George’s practice —  is the much more likely route to ruination of an otherwise stellar reputation.

It will be interesting to see whether the public comment period will result in Virginia trying to elaborate a bit more on the much more difficult of the two hypos.  Here’s hoping.

 

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.