Rotting from the top down.

Being a lawyer is hard. It is certainly not the hardest thing in the world to be, but it is hard. Lawyers have lots of obligations and lots of stress. Again, there are many who have things worse, of course.

Among those “lots of obligations” are obligations to supervise those who work for them that are not also lawyers. For lawyers who practice as solo practitioners, they might not have anyone in that category, or they might have one or two such people to supervise. Lawyers who work in firms may have more, sometimes, many more.

Government lawyers can have blurry lines regarding who all is within their realm of supervisory responsibility. Attorneys who work as prosecutors can, for example, have to evaluate not just their supervisory responsibility over direct staff but whether other law enforcement officers’ conduct is something they have to be concerned with from a supervisory perspective.

In any particular jurisdiction, the ethical issues regarding all of this are primarily governed by whatever version of Model Rule 5.3 has been adopted. Other law can come into play as well.

Today’s post isn’t exactly about how all of that works, today’s post is an attempt to suss out how things like this keep happening with respect to the way that agents of Immigrations and Customs Enforcement agents are doing their jobs and engaging in deceptive, and illegal, conduct. In a different time, the instinct would be to say that the answer to questions of “Where were the lawyers?” would be that they were actively excluded by the other law enforcement officials so as not to know. But then there are things like this that also seem to keep happening.

So, at the moment, the simplest answer I can figure out for how this keeps happening is laid out in the contents of this editorial written by a career Justice Department prosecutor who resigned after 36-plus years of service.

Withdrawing a guilty plea is notary-ly easy thing to do.

The pun was, of course, inevitable.  It was also fully intended.  In fact, it is, at least for me, repetitive as back in 2013 I was asked to do a seminar on the ethics of being a notary public — they have their own ethics code — and I called it “Notary-ly Common Topic: The Intersection of Lawyer and Notary Public Ethics.”

I’m writing today about a relatively straightforward criminal case arising out of federal court in the Northern Mariana Islands but that has at least four interesting lawyer ethics percolating under the surface of it.  The decision also has one of the most elegant and timeless statements penned by the district judge authoring the opinion that I’ve read in a federal court opinion.  It is either one of the most useful statements of insight into the human condition or one of the best pieces of universal (but indirect) advice to offer to anyone – including lawyers — or possibly both.

In case you want to stop reading at this point, I’ll just share with you the district judge’s statement which, for many reasons (no matter when you manage to read this) will be timely:

Probably every adult feels that there is some important decision she has made that she wishes she could do over.  But that does not mean she did not make that decision voluntarily and did not know what she was doing at the time.

To be exceedingly candid, I’m also writing this post about this case because an incredible lawyer, and a giant in the field of legal ethics issues, Bill Freivogel, brought the case to my attention and encouraged to me to think I might have something to say about it that would be worth reading.

The case is U.S. v. Li and you can grab the PDF of it here: United States v. Li (D. N.Mariana Is., 2018).  In sum, Li was a notary public.  He managed to mess up a document he was notarizing for a passport application for a minor child, and the application was rejected for that discrepancy.  When folks reassembled to try to fix it and reapply, the father had already flown back home to China.  Despite the fact that it was contrary to the ethics code for a notary public, and despite the fact that the form was requiring him to speak under oath, Li signed the form misrepresenting under oath that the father was physically present the second time when he was not.

It seems clear that Li did this thinking that it was his own mistake that created the problem and that this would fix the error.  How the falsehood came to light is much less clear, but it did and Li was charged with two federal criminal counts related to false statements on a passport application.

A week before the case was set for trial, the parties submitted a plea agreement and proceeded to a change of plea hearing.  At that hearing, Li’s attorney – Holmes – was present as was a more senior attorney from Holmes’ law firm.  The opinion walks through the fairly detailed line of questioning the federal judge presented to Li designed to ensure that the record was crystal clear about the voluntariness of the guilty plea.  These questions solicited many clear answers demonstrating voluntary and knowing decision-making, including Li’s statements that he was fully satisfied with his attorney’s advice and legal representation.

Two months after the guilty plea was entered and about two months before the date set for sentencing, a new lawyer for Li filed a notice of appearance.  About 45 days later, Holmes moved to withdraw from representing Li citing “professional reasons.”  That motion was denied without prejudice based on failure to demonstrate good cause.

Two things then occurred right about a week before sentencing: Li, through the new counsel, filed a motion to withdraw the guilty plea and Holmes renewed the motion to withdraw now pointing to statements in a pre-sentence report that were alleged to create a conflict between her firm and Li.  This renewed motion to withdraw was granted.  (The opinion does not provide a ready explanation or insight into what the nugget was in that pre-sentence report that Holmes was forced to surface in order to be let out of the case.)

The order then details what Li argued as his grounds for seeking now to withdraw his guilty plea – it largely involved accusations that his attorneys would not listen to him and coerced him – through time pressures, denigrating his chances at trial, and hammering the potential of a prison sentence of more than a year, even allegedly going so far as to tell Li that he would be sexually assaulted if he had to do prison time.

The district court, however, was entirely unconvinced by Li’s allegations and walked through an objective view of what the attorney time records, and other underlying documents, showed about the events that occurred surrounding the plea negotiations.

Three of ethics issues here are, I think, readily recognizable.

The case is at least an indirect reminder for attorneys that RPC 1.2 doesn’t provide crystal clear guidance on all decision-making as between clients and attorneys but leaves no room for doubt that the decision whether to plead guilty in a criminal matter is always the client’s to make.

The case also is a good, indirect reminder to attorneys who have support staff who are notaries that your obligations under RPC 5.3 can be considered to include having some measures in place to provide reasonable assurance that they know how important complying with the law and their own code of ethics as to notarizing documents can be.  (For the record, there was no indication in the opinion itself that Li had any employment situation where he was working for an attorney.)

Also, the case reveals how sometimes – despite the best efforts of the drafters of the rules – the guidance given to attorneys seeking to withdraw from representation doesn’t always work as designed.  ABA Model Rule 1.16 cmt. [3] tries to provide guidance to attorneys about situations when they should begin by stating only that “professional considerations” require withdrawal and indicating the hope that courts will accept that “statement as sufficient,” but courts do not always go along and end up putting attorneys into a situation where they have to disclose information the client might rather not have aired.

The fourth ethics issue, however, is not as obvious but is, I think, the most interesting and compelling.  The district judge, without explicitly saying so, made clear that if the lawyers had scared Li into pleading guilty “by conjuring the nightmare of sexual assault in prison,” that would have been the kind of thing that could have “put their bar license on the line.”  I’m torn on that front.  Obviously, if the lawyers had actually threatened to cause that to happen or otherwise crossed lines into coercing someone against their will to plead guilty, then I’d agree wholeheartedly.  But, if a lawyer representing someone facing potential jail time, and knowing their client had the chance to take a plea that was likely to result in no jail time at all, engaged their client in discussions about the possibility of going to prison and the realities of the problems in the U.S. prison system including the statistics on violence and sexual assault that happens there on a daily basis, would that really be unethical conduct?

I tend to think the exact opposite.  I think that a lawyer would certainly be entitled under Model Rule 2.1 to discuss as “other considerations such as moral, economic, social and political factors, that may be relevant to the client’s situation.”  In fact, depending on the client and the likely prison in play, a lawyer might well be ethically obligated to discuss such issues under Model Rule 1.4(b)’s obligation “to explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation.”

Disturbing development in a recent disciplinary case

Late this Summer, the Tennessee Supreme Court issued an opinion, over a dissent, that imposed a public censure against a lawyer for what were, pretty clearly, a series of failures on the part of the lawyer’s staff in the handling of a client’s matter.  What makes the case, Garland v. BPR, interesting, and worthy of that dissent, is not the level of discipline imposed but the choice of the particular rules the lawyer was charged with violating.  The things that make it interesting and dissent-worthy are also the things that make it potentially disturbing as precedent for lawyers and lawyers (like me) who defend lawyers.

Even though the case was clearly one in which the staff to whom the lawyer delegated tasks and responsibilities failed to do their job correctly, the Board did not charge the lawyer with a violation of the rule that is tailor-made for that situation, RPC 5.3.

RPC 5.3 requires the following of a lawyer in Garland’s position:

With respect to a nonlawyer employed or retained by or associated with a lawyer:

(a) a partner, and a lawyer who individually or together with other lawyers possesses comparable managerial authority in a law firm, shall make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that the nonlawyer’s conduct is compatible with the professional obligations of the lawyer;

(b) a lawyer having direct supervisory authority over a nonlawyer shall make reasonable efforts to ensure that the nonlawyer’s conduct is compatible with the professional obligations of the lawyer; and

(c) a lawyer shall be responsible for conduct of a nonlawyer that would be a violation of the Rules of Professional Conduct if engaged in by a lawyer if:

(1) the lawyer orders or, with knowledge of the specific conduct, ratifies the conduct involved; or

(2) the lawyer is a partner or has comparable managerial authority in the law firm in which the nonlawyer is employed, or has direct supervisory authority over the nonlawyer, and knows of the nonlawyer’s conduct at a time when its consequences can be avoided or mitigated but fails to take reasonable remedial action.

Instead of trying to build a case against Garland for any failures under RPC 5.3, the Board charged him with violations of RPC 1.3 and RPC 1.4, contending that he personally failed to act diligently in the client’s matter and failed to properly communicate directly with the client.  The Board also charged Garland with what is often an add-on violation, RPC 8.4(a), but appears to have done so with an unusual twist — justifying it on the argument that the lawyer committed violations of the rules “through the acts of another,” where the “another” was a member of his own staff.

Justice Kirby, in her dissent, made the point that the rule that should have been the focus of the case was not:

The facts in this case center on the failure of Mr. Garland’s staff to response to [client’s] inquiries, the staff’s failure to make Mr. Garland aware of things that needed his attention, or staff members’ general incompetence in tasks such as filing and mailing.

Despite the fact that, “Rule 5.3 was tailor-made for situations such as the one presented in this case,” Justice Kirby trumpeted that the Board did not pursue any charge against Garland for a violation of that rule but instead leveled RPC 1.3 and 1.4 charges and explained her reluctance to adjudicate the disciplinary matter when the Court had “no findings on what measures Mr. Garland should have had in place to supervise his staff,” “no findings on what efforts Mr. Garland should have made to reasonably ensure that his staff’s conduct was appropriate,” and “no findings on whether Mr. Garland ordered or ratified his staff’s infractions, or whether he learned of them at a time when the consequences to [the client] could have been avoided or mitigated.”

Justice Kirby not only dissented from the ruling but also scolded the Board for not pursuing the case under the correct disciplinary rule — “I fault the Board primarily for the posture of this case. It is important for ethical charges against lawyers to be properly framed, so that the rules adopted to govern certain situations are applied to the intended situations.”

Justice Kirby’s admonition to the Board is important for at least two reasons.  First, as she herself writes:

There are countless lawyers in Tennessee with law practices similar to Mr. Garland’s high-volume practice, in which many daily tasks and interactions with clients are delegated to nonlawyer staff. Delegating such tasks to nonlawyer employees does not
violate ethical rules, but failing to properly supervise nonlawyer employees does. It is important for practicing lawyers to understand what this Court expects from them in terms of supervising nonlawyer staff to whom mundane but important tasks are delegated.

Hopefully, and perhaps even more vitally, Justice Kirby’s admonition to the Board needs to have an impact because of the significant problems that could be created for lawyers if the Board is allowed to use RPC 8.4(a) to impose discipline in situations where RPC 5.3 would not support that outcome.  In other words, Justice Kirby’s words — “Delegating tasks to nonlawyer employees does not violate ethical rules” — need to continue to be the law in Tennessee.  If the Board is permitted to charge lawyers with infractions of RPC 8.4(a) on the basis that the failing of a staff member is the lawyer violating the rules through the “acts of another,” then RPC 5.3 essentially becomes surplusage in the rules altogether.

Tennessee has adopted the Ethics 20/20 changes effective immediately.

I’ve written a couple of times in the past about the status of the Tennessee Bar Association’s petition seeking to have the Tennessee Supreme Court adopt essentially all of the ABA Ethics 20/20 changes.  Yesterday, the Tennessee Supreme Court entered an order doing just that – effective immediately — which now adds Tennessee to the list of jurisdictions that have adopted that package of ABA Model Rule changes focused on updating certain aspects of the rules to address technology and the role it plays in modern law practice.

I’m pleased to be able to report that as to the issues where our Board of Professional Responsibility had offered counter proposals to certain aspects that would both be contrary to the Ethics 20/20 language and for which the TBA expressed a level of disquietude with the proposals, the Court opted to stick with what the TBA was proposing.

You can read the Court order and the black-line of the changes made to those rules impacted at this link.  As a result of the order, effective immediately, Tennessee now has:

  • a definition of “writing” in RPC 1.0 that refers to “electronic communications” rather than just “e-mail”
  • paragraphs in the Comment to RPC 1.1 that provide more guidance about the need to obtain informed consent from a client before involving lawyers from outside the lawyer’s own firm in a client matter
  • language in the Comment to RPC 1.1 that makes clear that the lawyer’s duty to “keep abreast of changes in the law and its practice” includes “the benefits and risks associated with relevant technology”
  • more modern language in the Comment to RPC 1.4 making clear that not just telephone calls from clients but all modern forms of communication by clients need to be responded to or acknowledged promptly
  • a specific discretionary exception to confidentiality under RPC 1.6(b) for disclosing information “to detect and resolve conflicts of interest arising from the lawyer’s change of employment or from changes in composition orr ownership of a firm”
  • black-letter treatment in RPC 1.6(d) of the duty to “make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client”
  • a little clearer, and more focused, guidance in RPC 1.18 about what kinds of communications will suffice to trigger a lawyer’s obligations to someone as a prospective client
  • important distinctions described in the Comment to RPC 5.3 as to a lawyer’s supervisory obligations as to nonlawyer assistants within and outside of the lawyer’s firm
  • important guidance in the advertising rules about the appropriateness of working with certain companies providing lead-generation services

In addition to adopting the ABA Ethics 20/20 changes, the black-line materials also reflect some housekeeping revisions we had proposed to catch a few items that needed changing in terms of cross-references from other Tennessee Supreme Court rules that had changed over the last few years.

Legal Ethics Issues in “Making a Murderer” – Part 3 of 3

It has been a while since I last wrote about this topic.  And, getting around to finally writing this piece has been so frustrating and depressing for reasons that ought to be clear by the end of this post, that I am confident that I have no plans to return to it.

When I last left off, I was promising to come back and discuss issues arising under RPC 5.3 for lawyers regarding their responsibilities for nonlawyers that they employ or engage to provide them with assistance.  Specifically, what I promised was that I would come back to the topic of Len Kachinsky and his post-hac efforts to deflect any blame for the way his private investigator handled a session with his juvenile client, Brendan Dassey, and to now say that he would not have hired the private investigator he hired — Michael O’Kelly — if he had known the investigator would engage in such conduct.

Setting aside the question of how believable that position is — the claim that he didn’t know roughly (if not exactly) what was going to happen when he let O’Kelly at his client, let’s take a look at what his ethical responsibilities actually would have been.  (And, for the record, setting aside the question I just set aside takes real doing in the first place when you remember the email exchanges between Kachinsky and the investigator that were detailed in the final episode of the series and that were used in connection with the brutal cross-examination of Kachinsky by Dassey’s newest batch of lawyers.)

Wisconsin’s version (SCR 20:5.3) of the relevant rule is patterned after ABA Model Rule 5.3 and provides:

With respect to a nonlawyer employed or retained by or associated with a lawyer:

(a) a partner, and a lawyer who individually or together with other lawyers possesses comparable managerial authority in a law firm shall make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that the person’s conduct is compatible with the professional obligations of the lawyer;

(b) a lawyer having direct supervisory authority over the nonlawyer shall make reasonable efforts to ensure that the person’s conduct is compatible with the professional obligations of the lawyer; and

(c) a lawyer shall be responsible for conduct of such a person that would be a violation of the Rules of Professional Conduct if engaged in by a lawyer if:

(1) the lawyer orders or, with the knowledge of the specific conduct, ratifies the conduct involved; or

(2) the lawyer is a partner or has comparable managerial authority in the law firm in which the person is employed, or has direct supervisory authority over the person, and knows of the conduct at a time when its consequences can be avoided or mitigated but fails to take reasonable remedial action.

To pare that down, the two parts most directly applicable to analyzing Kachinsky’s obligations are (b), (c)(1), and the portion of (c)(2) applicable to a lawyer with direct supervisory authority over the person.

So, this is the part where I could walk through questions about what exactly ought to be expected of a lawyer who hires a private investigator or a consultant in terms of “reasonable efforts” to ensure that they will conduct themselves in a way that would be compatible with the lawyer’s own ethical obligations and those questions can be difficult ones to fully evaluate, and it is often easy to take shots at a lawyer with the benefit of hindsight to conjure up some additional thing that could have, or should have, been done.  And, from there, I could undertake an examination of the likelihood that — especially because the whole O’Kelly  interview of Dassey was video-recorded — that at some point Kachinsky surely had to learn what had happened and could have undertaken some sort of effort to try to remedy the impact on Mr. Dassey.

But, between having watched the documentary itself and having read this piece specifically about Mr. O”Kelly and who he was before and after these events, it’s just not worth all of the effort.  There really cannot be any justification for Kachinsky’s role in the farce.  If nothing else would make it clear, then surely the nice photo of the “document” that O’Kelly put in front of Dassey — the Self Interview and Information Survey — and the “choices” it offers should demonstrate that no one would learn anything from deconstructing this scenario to try to fashion a way that this could have been done in compliance with the ethics rules:

The form Michael O'Kelly gave Brendan Dassey

Or, if that isn’t enough, how about the fact that O’Kelly was known back then (before Kachinsky retained him) for being an adherent of something called SCAN that he considered to be more effective than a lie detector test.  You should actually go read the original Sacramento newspaper article as well, but if you are pressed for time, the summary treatment of it by the Gazette Review piece is pretty good:

In 2001, the Sacramento Daily Recorder ran an article about Michael O’Kelly. In short, the article explained how O’Kelly was one of “a dozen elite practioners” of a “truth detecting technique,” SCAN, which relied on exploiting linguistic deviations in statements. In the article, O’Kelly claims his technique is more dependable than a polygraph. An example of his technique is that if one were to say, “when I was a kid,” then that person was probably molested. Also, if you say the number 3, you’re probably lying.


Legal Ethics Issues in “Making A Murderer”– Part 2 of ?

Two recent events have brought me back around to wanting to talk about ethics issues raised by this fascinating documentary.  One event is public and absurd.  The other event was semi-private and surprising (at least to me).  As neither of the recent events are actually the thing I wanted to talk about a couple of weeks ago when I wrote my first post about this documentary, I will try to dispense with them with relative speed.

First, this story that made the rounds this week further cements the notion that the former prosecutor is really something else.  While, strictly speaking, it is hard to think of an ethics rule directly implicated by his letter to the person he put in prison for murder trying to cajole an admission of guilt so that he (the former prosecutor) can write a book revealing the true story, the mere act of writing such a letter certainly isn’t a strong look for the lawyer.  Perhaps the saddest aspect of it is the desperation of the “this was your absolute last chance to tell the truth and you blew it…. but let me know if you change your mind because I’m probably still going to be interested” approach to coercion.

Second, I found myself enmeshed in an interesting APRL listserv discussion when some lawyers who were taken aback at the “disclosure” made by Avery’s former lawyer, Bob Oedenkirk as Saul Goodman Dean Strang in an appearance on ABC’s Nightline that he worries that Avery “might” be guilty.  A number of lawyers expressed belief that even with the passage of almost ten years, it was bad for the profession for the lawyer to publicly express any such misgivings about a former client, particularly for as long as there are still folks pursuing proceedings to try to have the former client exonerated.  I was a bit taken aback for what I’ve now been able to figure out are three reasons.  First, and the most embarrassing for me because I didn’t realize it until I had already weighed in on the listserv was that I forgot that Tennessee’s RPC 1.9 differs significantly from the ABA Model Rule approach in applying the exception for “generally known” information to both adverse use and disclosure of confidential information of the former client.  Second, having watched all of the documentary, he didn’t seem to me to be saying anything in the Nightline piece that he hadn’t already said in the documentary itself — thus the current disclosures would be merely repetitive of disclosures that presumably had to have been consented to by Avery for broadcast in the first place.  The third reason though finally provides a segue into the original thing I wanted to talk about — given how detestable the conduct of at least one of the other defense lawyers in the drama appears — Strang came across to me as exactly the sort of lawyer you’d hope to have on your side.

That other defense lawyer is, of course, Len Kachinsky.  The second court-appointed lawyer for Avery’s nephew, Brendan Dassey.  The notion that Kachinsky never was disciplined for the way he handled his representation of Dassey is exceedingly difficult to fathom.  A lawyer’s duty to be the client’s zealous advocate is at its highest when the client in question is accused of murder.  Add into the mix details such as the client is a juvenile with well below average intellect and social coping skills, and you’d expect the likeliest ethical failings to come from a lawyer crossing lines that shouldn’t be crossed in the name of trying to protect that client.  Yet, Kachinsky now stands as an example of a lawyer managing to violate ethical duties to his client in the course of undertaking what appears to be the polar opposite of zealous advocacy.

As we learn in the course of the documentary, Kachinsky spoke to the t.v. cameras [as shown in Episode 4] before ever speaking to his client and made a much more damning statement about his client than Strang can ever be accused of making about his former client: indicating that his client was “morally and legally responsible” for the murder.  While that alone was unforgivable, it was not as impactful a transgression in the end as was his role, both active and passive, in coercing his own client into giving another “confession” to the police outside of his presence which also managed to lead to an admissible telephone conversation between his client and his client’s mother.

This story from The Guardian lays out much if not all of the detail necessary to take in something of the big picture of the problems with Kachinsky’s performance.  I certainly won’t condone anyone who has harassed or threatened the man as the article indicates has happened and, of course, cancer is awful and thankfully the article reports that his is now in remission.  But as to his explanations for his handling of the case, I’m not inclined to give him any more benefit of the doubt than he afforded to his minor client.

With all that being said, that article also happens to be the first time I’ve heard Kachinsky indicate that he was not aware at the time of the conduct and tactics of the private investigator that he hired.  Kachinsky’s portrayal of that private investigator as a “loose cannon” tees up an interesting discussion about a lawyer’s obligations with respect to the conduct of such a non-lawyer assistant under RPC 5.3, so it seems there will be a part 3 on this topic in my future.

First, trust but verify. Second, trust until verified.

Lawyers need to be able to trust some people to do their jobs.  These people might be support staff, colleagues, or sometimes even opposing counsel.

When it comes to trust accounting though, situation after situation demonstrates that no matter how much a lawyer trusts an employee with access to or some control over trust account funds, the lawyer always has to take a “trust but verify” approach to the situation.

A recent disciplinary decision out of Louisiana provides yet another example of the risk to lawyers in not actively supervising employees with access to and control over trust funds.  In this instance, a long-trusted employee of the lawyer (and someone who had in fact previously worked for the lawyer’s own father) started stealing funds from the settlement of the lawyer’s cases and continued to do so for a period of about five years.  The total amount of the theft appears to have been unclear to all involved for quite some time.  Even the ex-employee ultimately was unsure exactly how much she had stolen.

The opinion makes clear that the lawyer did not do anything to verify the employee’s handling of funds and also makes clear that, if that had been all there was to the story, that negligent supervision alone would likely have been sufficient to result in discipline to the lawyer even though what the employee did was criminal.  (RPC 5.3(b) in Louisiana and elsewhere requires that lawyers having direct supervisory authority over nonlawyers “shall make reasonable efforts to ensure that the person’s conduct is compatible with the professional obligation of the lawyer.”)  The opinion also reads pretty clearly though that, if that had been all that was in the mix, the lawyer likely would have only ended up walking away with a public reprimand.

The disciplinary consequences, however, ended up being a 30-day suspension because, in addition to not verifying the handling of funds done by the trusted employee in the first place, he didn’t do the correct thing with funds received after the crime.  The ex-employee was able to swing a loan from a relative and, after she had been reported to the police, repaid $39,312.35 to the lawyer.  Unfortunately, he didn’t put all of those funds in trust and wait until after he was able to completely verify how many clients or third parties funds were missing (and exactly how much) before treating any of the restitution money as his own.

Instead, as the opinion indicates, he had the ex-employee pay the restitution in the form of three separate, simultaneous checks – one for $19,612.35 that went into his trust account; another for $9,700 that went to his operating account, and then a third for $10,000 that went to his personal account.  In the disciplinary proceedings, he claimed that this approach was not provably wrong because he did not know that the amount being put into trust would not be sufficient.  The problem though was that, at that time, he had not yet had any audit performed on his accounts and only after depositing those three checks did he have a a CPA perform an audit of his trust account going back five years.  At the end of that audit though, the CPA determined that the $19,612.35 in trust was not the correct amount and that it should have been $22,330.96.  The lawyer immediately put his own personal funds in to make up the difference.

Unfortunately, the lawyer did not have his CPA also audit his operating account at that time.  The lawyer didn’t help his cause by testifying that he didn’t give access to the operating account, in part, out of a fear that it would be determined that the ex-employee paid back too much and was now actually owed money by the lawyer.

Subsequently, an audit performed by a different CPA retained by disciplinary counsel’s office, looking at both operating account records and trust account records, found that more trust funds were missing and that the balance in trust should have been something north of $34,000.  As a result, he was disciplined more harshly because he was viewed, in the best light, as having put his own personal financial interests ahead of the interests of clients and third parties who were harmed by his ex-employee’s criminal conduct and, in the worst light, of having twice violated RPC 1.15 with respect to the deposit of two of the three checks written by his ex-employee.

The practical lesson from all of this should be — in addition to the incredible importance of the “trust but verify” construct as to those with access to the trust account in the first place — if you are a lawyer victimized by an employee’s criminal conduct, and fortunate enough to be able to get that person to make restitution, you need to deposit the entirety of such funds into your trust account until you can completely verify just how much damage has been done and to whom.  RPC 1.15(a) in most jurisdictions, including in Louisiana, provides for the ability to hold both funds known to belong to clients and funds belonging to third parties together in the same trust account, it is just the lawyer’s own money that must be kept separate.  This Louisiana lawyer absolutely should have had the entire $39,312.35 deposited into his trust account and only moved any of it into his own personal account or his operating account once he was absolutely certain that the money was truly his.

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.

Washington and Its LLLTs

One likely future facing the practice of law in the U.S. is now on display in the State of Washington and getting some high-profile publicity this week.  This article in The Washington Post tells you almost all you need to know about the introduction of Limited License Legal Technicians (or “nurse practitioners of the legal world” as the article denominates them) into the legal marketplace.

Whether this kind of initiative would ever obtain approval in Tennessee is less than clear, but many aspects of what drove this result in Washington are equally true in my state.  It is undeniable that Tennessee also has too many lawyers on the one hand and not enough services being delivered to people in need of legal help on the other. Our Supreme Court has pushed and pushed access to justice and increasing pro bono participation as its primary initiatives for several years now.  (In fact, so much so, that if you surveyed lawyers around the state of Tennessee, you’d likely hear some real sniping and disenchantment about what some feel is browbeating at this point.)  Yet, the justice gap in Tennessee is still very, very real.

Perhaps the most revealing news is the statement that California, Oregon, Colorado, and New Mexico may already be exploring following Washington’s lead.  It is difficult to argue, in a vacuum, that the imposition of the lawyer ethics rules on LLLTs wouldn’t be just as likely to provide significant protections to clients as the imposition of those rules on lawyers is.  As the piece reveals, most of the new LLLTs in Washington are people who were serving as paralegals – a group we already count on to some extent to be expected to be able to comport their conduct with the professional obligations of lawyers (or else, we couldn’t really justify a rule such as RPC 5.3).

Perhaps more importantly, from a practical perspective, it seems hard to believe that those clients — who otherwise end up adrift on their own trying to handle their own legal needs — wouldn’t consider it to be a risk well worth undertaking to pay lower fees for the services and take their chances that the equivalent of nurse practitioners can provide them with competent services at least as ethically as many lawyers would do.