Friday follow up – TIKD off by a DQ motion and the Supremes won’t stop suspending the wrong lawyers.

In the middle of Roadshowing (short break until the next stops next week) and also still trying to handle client matters to boot, so this will be a quick post.

(If you are here next week looking for the Roadshow playlist, just keep scrolling down as it can be found in the post immediately below this one.)

The dustup between the smartphone app known as TIKD and the Florida Bar has been back in the news in the legal trades recently over a motion to disqualify TIKD’s counsel filed by the Florida Bar.

On its face, it sounds like a pretty decent disqualification motion on the merits as the Florida Bar is alleging that TIKD’s counsel who is a former Florida Bar president had access during his term in office to internal information evaluating the Florida Bar’s antitrust liability exposure given its structure in the wake of the U.S. Supreme Court’s ruling in an antitrust suit against the board that regulates dentistry in North Carolina.  (You might recall that I wrote a bit about that in the past as well as it is that case that has revived interest in, and concerns about, antitrust issues for the regulation of the practice of law in unified bar/mandatory bar jurisdictions.)  That would seem like a slam-dunk in terms of disqualification if that person had been a former General Counsel or otherwise a lawyer for the Florida Bar, but the analysis may be a lot murkier if, as is the case generally of bar presidents, that the president of the Florida Bar is always a lawyer but isn’t necessarily acting as a lawyer for the organization during the term of office.

Oh, and speaking of the U.S. Supreme Court, I wrote a bit earlier this year (as many other people did) about the weirdness associated with the fact that the United States Supreme Court made the very unfortunate mistake of suspending the wrong attorney – confusing one lawyer named Christopher P. Sullivan for another lawyer named Christopher P. Sullivan.  At the time, I tried to make discussing the circumstances a bit more worthwhile substantively and not just anact of piling-on by citing that epic mistake by the highest court in the land as maybe the ultimate example of the need for people in our profession to be deliberate in their actions and take their time because what we do can have real consequences for us and for others.

As is of course true for literally billions of other people on the planet, the Clerk of the U.S. Supreme Court is not a dedicated reader of this space (or didn’t take heed of that message) as a new story came to light a week or so ago of pretty much the same thing happening again with the Court suspending a lawyer named Jim Robbins instead of a lawyer named James A. Robbins.  (Even more coincidentally, the Sullivan who was wrongly suspended earlier in 2017 practiced law with a firm called Robins Kaplan.)

Actually, to say that pretty much the same thing happened isn’t quite right, as the James A. Robbins that deserved to be suspended wasn’t actually a member of the U.S. Supreme Court bar at all.

I’ve been fortunate enough to have been admitted to the U.S. Supreme Court since December 2008 and even more fortunately it appears to be an admittee with a name, Brian S. Faughnan, that seems highly unlikely to be duplicated on (or off) its rolls.

Coming to praise rather than bury: NYC Bar Op. 2017-6

About two weeks ago, I had the opportunity to speak to the Tennessee Defense Lawyers Association for an hour on ethics issues, using a “hot topic” format.

One of the topics I covered was the many things there are beyond just being parties on opposite sides of the “v” in litigation that present conflicts to be managed, avoided, and addressed in handling lawsuits.

I mentioned the difficult situations that can arise as a case evolves and someone shows up on the radar screen as an important witness — particularly an expert witness — and the importance of running supplemental conflicts checks to make sure that a lawyer or her firm doesn’t first figure out the problem when learning during the deposition that the witness claims to be a client of the lawyer’s firm.  That is a scenario that lawyers sometimes don’t always think about in advance but for which there is little, if any, push back on the idea that it is a conflict about which to be concerned.

I pivoted from that topic to a similar topic — issuing subpoenas for documents to witnesses — that lawyers are more inclined to want to try to intellectualize as not creating a conflict situation because it can have the feel of a “routine” act and it also “feels” like an administrative hassle.

At the time of that presentation, I somehow had not yet seen a recent Formal Ethics Opinion out of the New York City Bar on that very topic – if I had seen it I certainly would have pointed to it — because it is a very well done treatment of the issue.  The question addressed in NYC 2017-6 is:

What ethical restrictions apply when a party’s lawyer in a civil lawsuit issues a subpoena to another current client or may need to do so?

Now, a word before delving into the insight that can be gleaned by all lawyers in all jurisdictions from this opinion about an important, but not dispositive, difference in the language of New York’s Rule 1.7(a).

In Tennessee, and many other jurisdictions with rules patterned after the ABA Model Rules, RPC 1.7(a) reads so as to address two types of conflicts as being “concurrent conflicts of interest.” One where the lawyer would be required to represent one client in matter directly adverse to the interests of another client, and one where the lawyer’s duties to someone else (or the lawyer’s own personal interests) will impose a “material limitation” on the lawyer’s ability to represent the client.

The NY version of Rule 1.7(a) has slightly different language on each of those two fronts.  NY’s 1.7(a) indicates that a lawyer has a conflict:

if a reasonable lawyer would conclude that either (1) the representation will involve the lawyer in representing differing interests; or (2) there is a significant risk that the lawyer’s professional judgment on behalf of a client will be adversely affected by the lawyer’s own financial, business, property or other personal interests.

And, “differing interests” is specifically defined in NY’s rules to mean “every interest that will adversely affect either the judgment or the loyalty of a lawyer to a client, whether it be a conflicting, inconsistent, diverse, or other interest.”  Now those NY variations on the language make it a bit easier and cleaner to see the issues created when a lawyer pursues a subpoena for records from one client for another client but so much of the opinion that explains the analysis is written not just well, but in a practical fashion that, in my opinion, allows it to resonate for lawyers in jurisdictions with the ABA Model Rule language on conflicts as well.

After surveying the landscape of earlier opinions on these subjects, the NYC opinion laid out a number of helpful conclusions:

First, issuing a subpoena to a current client to obtain testimony from that client will ordinarily give rise to a conflict of interest.  Obtaining testimony typically inconveniences the witness, involves probing a witness’ recollection, and at times may involve challenging and confronting the witness, any of which a current client may reasonably perceive to be disloyal.

[snip]

Second, it will ordinarily be a conflict of interest for a lawyer to seek to obtain documents via a subpoena to a current client.  The production of documents in response to a subpoena very often requires an allocation of resources (time and money) which the subpoenaed party would prefer not to expend.  This is all the more so when outside counsel needs to be retained, and the scope of production needs to be negotiated.

[snip]

The opinion then goes on to offer some further practical advice for lawyers to keep in mind because of their ethical obligations which the opinions lays out as:

(a) the necessity for lawyers to run conflict checks prior to serving a subpoena; (b) the potential need to decline or limit a representation, or to obtain informed consent, if a lawyer knows before being retained that subpoenaing a current client may be necessary; and (c) the retention of “conflicts counsel” to avoid the need to withdraw, or the risk of disqualification, when a lawyer learns during the course of a litigation of the need to subpoena another current client.

The opinion does go on to provide helpful explanatory details for each of those topics, and you can go read the opinion in full at this link.

 

A three-part discussion of LA County Bar Op. 528

Though news to me much more recently, the LA County Bar Ass’n Prof’l Responsibility and Ethics Committee issued an  interesting ethics opinion back in April on a wrinkle that can arise in the tripartite relationship created in insurance defense situations.  You can read the whole thing here, but its summary is pretty to-the-point:

When an attorney engaged by an insurance carrier to defend the interests of an insured obtains information that could provide a basis for the insurance carrier to deny coverage, the attorney is ethically prohibited from disclosing that information to the insurance carrier.  In such a situation, the attorney must withdraw from the representation.

In honor of it being an opinion that hinges on California’s approach to the tripartite relationship, I want to divide this post into a three-part discussion of it.

Part the first: it certainly appears to get the answer right from a California perspective.  The answers appear clear and correct given California’s approach to the question of who is/are the client(s) when an attorney is retained by an insurance company to represent an insured.  While all jurisdictions have reached agreement on using the term “tripartite relationship,” to describe insurance defense arrangements, California is a jurisdiction that treats it as truly being one in which the lawyer involved has two clients, both the insured and the insurance company, and the duties to each are “equal and potentially competing.”  Working from that premise, then the particular scenario confronted in the opinion is certainly one that causes the ultimate result — the lawyer  being prohibited from telling one client the important information learned about the other client’s situation can no longer represent either client and has to move to withdraw.  Though the specific scenario is presented in a way that raises some immediate questions given that it involves the existence of a document and its authentication through a request for admission.  For example, does the opinion just assume both authenticity and that the insured would tell the lawyer not to let the insurer know?

Part the second:  While that is the correct result given California’s approach to the “who is the client?” issue, the outcome is more revealing for serving to demonstrate the folly of the approach California follows.  In Tennessee, for example, the tripartite situation exists but the lawyer only has one client, the insured.  The insurance company hiring the lawyer to defend the insured is not a client of the lawyer.  There are, of course, still thorny ethical issues that can arise (see below) but at least in the scenario in question, the lawyer’s path forward is both clear and one that permits continued representation of the lawyer’s only client and a focused effort to try to use the document to establish the statute of limitations defense.

Part the third:  On the California side of things, what in the world happens next in the scenario to keep things from just playing out the same way all over again?  Because the withdrawing lawyer will not be in a position to tell the insurance company the reason for the withdrawal, the whole scenario is likely to simply repeat itself when the insurance company retains a new lawyer to represent the insured.  That lawyer will eventually learn of the same information – be prohibited from disclosing to the insurance company — and then lather, rinse, and repeat.  Or, at least, that’s how it will go unless either the lawyer shirks the duty of disclosure to the insurance company or the insurance company figures out what is going on that is causing the withdrawals and goes ahead and makes a definitive coverage decision.  Either way, it is a particular example that paints a much more favorable picture of approaches to this relationship structure in which the lawyer’s only client is the insured.

(In fairness, the particular scenario examined in the opinion could be pretty readily spun out just a bit further to demonstrate how no system for this would be perfect by exploring what would happen if the the insured was trying to demand that the lawyer attempt to settle the case for the insured without disclosing to the insurer that the reason for seeking settlement prior to having to respond to the request for admission was to avoid defeating coverage.)

A kind note from a satisfied client

Since I’m seeing quite a few of these notes from satisfied clients on LinkedIn, Facebook, and other places in various formats, it seems like a good time to share a touching one I received recently.

Brian,

Thank you very much for the really great work and the successful outcome.  I really appreciate you and all that you do.  I’m sure I don’t even need to say this, but I’m certainly hopeful that you have the common sense not to try to publicly share my kind, private remarks to you about my case on any social media or anywhere else.  I figure you probably know not to do this without my consent because … well, you have that obligation of client confidentiality under RPC 1.6 and posting this as some sort of “atta-boy pat-on-the-back” which is really just a kind-of-but-not-really-all-that-subtle effort at marketing and touting your excellent work and client satisfaction certainly isn’t something that would be impliedly authorized in order to carry out the representation.

Plus, if you did that, it would be just kind of … I don’t know … crass (gauche?).  The mere act of sharing it to crow is one thing I guess, but then the way social media works you’re just crying out for people to comment and say, yeah you’re great and your clients are lucky to have you, or to “like” it and provide you further validation which certainly wasn’t why I sent you this kind note.   And even if the reason I’m so excited and grateful about your work is that the matter is over and now I’m just a former client, you still have confidentiality obligations to me under RPC 1.9 and if this had become generally known as would be necessary at that point, then you probably don’t need to do this because if you are going to get accolades they would come more naturally (right?), so, I mean, again.  How about you just not with the sharing this?

I mean I guess you could try to strip down any information anyone might use from my message to you to be able to figure out who I am or what the matter was, (because remember the Comment to RPC 1.6 talks about how even disclosures that don’t directly disclose confidential information are prohibited if the disclosures “could reasonably lead to the discovery of such information by a thid person”) but once you’ve done that it truly becomes so impersonal that it doesn’t really have the impact you were hoping for, and depending on the format you use, it might even look like you’ve maybe just made the whole thing up.

And, if you don’t do something like that, then you really are placing my confidentiality rights at risk because maybe you did remove everything you needed to in order to protect anyone in your network or circle of connections from being able to figure out who it was that would have sent this, but maybe you didn’t.  If you didn’t, I’m potentially not going to be very happy about that.  Plus, you might in your introductory paragraph of your social meda “update” say something about time and place or circumstances that actually does — combined with this note — let the cat out of the bag.

So, anyway, thanks for getting me that extension of time.  Sorry for being such a scold.

[name redacted]

These are the kind of messages that make being a lawyer worth it all.

Happy Friday!

It’s been a while.

Today I’m going to splice together two short discussions about topics that I haven’t mentioned in a while.  (And, for any fans of the podcast U Talking U2 to Me that are out there, you do have to read the title of this post to sound like the first words of this remake right here.)

I have not written in a while of an instance of a lawyer getting into disciplinary trouble over saying too much in the process of withdrawing from a client representation.  But it’s happened again, so it’s worth reminding people not to do that.

A week ago, the Ohio Supreme Court issued its opinion affirming a recommended one-year suspension (but with all of the suspension stayed) for a divorce lawyer who paired an affidavit with his motion to withdraw from a client’s matter.  The Ohio court succinctly laid out the problematic contents of the affidavit:

In the affidavit, he recounted communications he had had with
[the client] about the scope of his representation and his compensation, accused her of refusing to pay his agreed-upon fees “without cause,” and disclosed legal advice that he had given her. He also described [the client]’s discharge of him as “retaliatory” and alleged that it had “occurred because of [his] advice to her
concerning her objectionable and potentially illegal actions” relating to her ex-husband, which he characterized as “a problem similar to the one [he] experienced in [his] previous representation of her.”

The Ohio opinion not only cogently walks through why the lawyer’s attempted arguments that such disclosures were permitted to be made under exceptions set out in Ohio’s Rule 1.6(b) weren’t triggered, but also stresses another point too often overlooked by lawyers even when they might have justification to make certain disclosures:

Finally, even if [the lawyer] had reasonably believed that Prof.Cond.R. 1.6(b) permitted him to disclose [the client]’s allegedly fraudulent conduct, the means by which he chose to do so were improper. The comments to Prof.Cond.R. 1.6 clarify that when a lawyer believes that disclosure of client information is
necessary, the lawyer should first seek to persuade the client to take suitable action to obviate the need for the attorney’s disclosure and that a disclosure adverse to the client’s interest should be no greater than necessary to accomplish the purpose. Prof.Cond.R. 1.6, Comment 16. And “[i]f the disclosure will be made in connection with a judicial proceeding, the disclosure should be made in a manner that limits access to the information to the tribunal or other persons having a need to know it and appropriate protective orders or other arrangements should be sought by the lawyer to the fullest extent possible.” Id. Here, [the lawyer] failed to notify or communicate with [the client] about the allegations in his affidavit prior to filing it, and he did not attempt to limit public access to the document.

Another topic I haven’t mentioned in a while is ABA Model Rule 8.4(g) and how it’s playing in various states.  You will recall on at least one occasion when I did write about it, I mentioned how one of the ABA’s talking points was that somewhere north of 20 states already had black-letter rules in one form or fashion making acts of discrimination unethical.

About three weeks ago, one of those states, Vermont, just decided to scrap its version of such a rule and replace it with a Rule 8.4(g) that is substantially equivalent to the ABA Model Rule.  You can read the order of the Vermont Supreme Court adopting such a rule which will become effective on September 18, 2017 here.

What’s in a name?

For example, the folks behind the popular Radiolab podcast also launched a spin-off podcast last year about the U.S. Supreme Court called “More Perfect.”  The reason for naming it that, of course, is that it almost assuredly a reference to the famous line in the Preamble to the U.S. Constitution

But today it seems a funny/ironic name because the U.S. Supreme Court managed to make a pretty bad mistake that is being reported on now and that likely added some real stress into the life of a lawyer whose only crime was having almost the same name as another lawyer.

You can read about the story itself, and find links to other outlets reporting on the story, at the ABA Journal online, but the short version is that the U.S. Supreme Court intending to suspend and potentially disbar a Christopher P. Sullivan of Vermont instead suspended and issued show cause why disbarment should not occur to a Christopher P. Sullivan of Boston, Massachusetts.  The Vermont Sullivan’s middle name was Paul and he had already been disbarred in Vermont after being involved in a fatal automobile accident and pleading guilty to a DUI.  The Massachusetts Sullivan’s middle name is Patrick.

If you do the math, you will find that the Sullivan who was wrongfully sullied ended up with 15 days passing between being suspended and the U.S. Supreme Court fixing its mistake and reinstating him.  Presuming he was aware of and dealing with fixing the Court’s mistake, I imagine that was a long 2 weeks for that gentleman.

But, in terms of a larger lesson to be learned, I think the lesson is that we all need to be more deliberate rather than more perfect in what we do.  I can’t help but think that a more deliberate review of information on the Court’s part would have avoided the “mistaken identity” error in the first place.

I like to think that most errors I make are ones that, upon reflection, I could have avoided had I been more deliberate in the first place.  I reckon you might say the same about yourself, so …

Two short updates for a Tuesday

Late last month, I focused a post on a West Virginia lawyer who ended up staring down a 2-year suspension over chronic over-billing.  If you missed that post, you can read it here.  If you read it, you will recall that one of the items discussed was that the Executive Director of the West Virginia Public Defender Services agency had indicated that particular lawyer was not even among the worst offenders.

The ABA Journal online has a piece up that is apparently about one such even worse offender who has skipped out on bail regarding the criminal charges he is facing over his rampant over-billing (including billing more than 24 hours on 17 different days) and is suspected to be a fugitive in a much more temperate part of the world than West Virginia.

Over a larger time period and with a bit more frequency, I’ve written a little bit about the ABA Ethics 20/20 revisions to the Model Rules — admittedly through the lens that those revisions were being considered and then adopted here in my home state of Tennessee.  If you’ve been looking for a really good window into what the technology-focused aspects of the Ethics 20/20 revisions mean for your law practice, you are in luck because the ABA Standing Committee on Ethics and Professional Responsibility has now put out Formal Ethics Op. 477 which pretty much provides exactly that.

It is a good opinion – it’s getting a lot of attention in the legal media for establishing new standards but that’s not quite right.  It doesn’t really establish anything new but it does do a really good job of focusing lawyers’ attention upon the logical repercussions of the Ethics 20/20 revisions and the risks that lawyers need to be acutely aware of when communicating with clients.

It is also worth noting — particularly given the last few days of ransom ware news (and one other high-profile instance of information that was promised to be kept secret being disseminated under questionable circumstances) that user error continues to be a leading cause of unintended disclosure of (or complete loss of access to) confidential information whether technology is involved or not.

It should go without saying that there is only so much a lawyer can do to try to guard against those kinds of risks.

Traps for the Unwary – Employer email systems

I like to think I am “warier” than the average attorney.  But a recent attorney-client privilege opinion out of New York was a good reminder that being “wary” can be much like being “woke.”  Even if you think you are, you probably aren’t as much as you think you are, and you can always be a bit more.

I’ve spoken and written in the past about the risk for lawyers’ clients to using an email system provided by an employer to communicate with them but my focus in doing so has largely involved assumptions about ways in which the nature of the representation could be one in which the client wouldn’t actually want to the employer to be able to access the communications.  For example, where the client and the employer would actually have contrary interests.

That type of scenario was the focus of the kind of warning ABA Formal Ethics Opinion 11-459 provided to lawyers who handle employment law matters:

This opinion addresses this question in the following hypothetical situation.
An employee has a computer assigned for her exclusive use in the course of her employment. The company’s written internal policy provides that the company has a right of access to all employees’ computers and e-mail files, including those relating to employees’ personal matters. Notwithstanding this policy, employees sometimes make personal use of their computers, including for the purpose of sending personal e-mail messages from their personal or office e-mail accounts. Recently, the employee retained a lawyer to give advice about a potential claim against her employer. When the lawyer knows or reasonably should know that the employee may use a workplace device or system to communicate with the lawyer, does the lawyer have an ethical duty to warn the employee about the risks this practice entails?

[snip]

The situation in the above hypothetical is a clear example of where failing to warn the client about the risks of e-mailing communications on the employer’s device can harm the client, because the employment dispute would give the employer a significant incentive to access the employee’s workplace e-mail and the employer’s internal policy would provide a justification for doing so. The obligation arises once the lawyer has reason to believe that there is a significant risk that the client will conduct e-mail communications with the lawyer using a workplace computer or other business device or via the employer’s e-mail account. This possibility ordinarily would be known, or reasonably should be known, at the outset of the representation. Given the nature of the representation–an employment dispute–the lawyer is on notice that the employer may search the client’s electronic correspondence. Therefore, the lawyer must ascertain, unless the answer is already obvious, whether there is a significant risk that the client will use a business e-mail address for personal communications or whether the employee’s position entails using an employer’s device.

With hindsight it certainly seems an obvious extension of the same point to be worried that the privilege is in jeopardy even when the underlying matter is not one in which client and the employer are adverse, yet I’ll admit that I was initially surprised to hear about through this (as always) quite good write up in the ABA/BNA Lawyers’ Manual on Professional Conduct and then dig in and read the Peerenboom v. Marvel Entertainment opinion itself (which is remarkable for its brevity) which found that Marvel’s CEO’s emails to his personal attorney on Marvel’s email system could not be shielded from discovery by a third party pursuing litigation against Marvel based on attorney-client privilege.  (Simultaneously also saying that no marital privilege existed either.)

The New York court explained that Marvel’s email policy provided that it “‘owned’ all emails on its system, and that the emails were ‘subject to all Company rules, policies, and conduct statements.’ Marvel ‘reserve[d] the right to audit networks and systems on a periodic basis to ensure [employees’] compliance’ with its email policies. It also ‘reserve[d] the right to access, review, copy and delete any messages or content,’ and ‘to disclose such messages to any party (inside or outside the Company).'”  Based on that, the court considered it easy to conclude that the CEO had no reasonable expectation of privacy in email communications to others using his Marvel email address.

Interestingly, but not surprisingly, the opinion does not reference or discuss in any fashion whether the CEO’s lawyer would still be obligated to treat all of the communications as confidential under the relevant ethics rules in New York(spoiler alert: he would).

Since I’ve got your webcam turned on remotely, show of hands if you’ve 100% of the time been making sure your clients’ email communications with you are only happening on a platform provided by someone other than their employer – like gmail, Yahoo, Bellsouth, or Comcast, or some other personal source of email access.

Yeah, me neither.

It certainly feels like a harsh result — particularly when you stop and think about how much email traffic takes place on email platforms that are company provided to all involved — but it can be a difficult outcome to argue against given the traditional strict construction of the privilege and how readily it can be waived as a result of exposure to anyone who is a stranger to the relationship.

The Peerenboom opinion also serves, however, as a good reminder of just how different the attorney-client privilege and the attorney work-product doctrine are and how differently they are waived.

Given the lack of evidence that Marvel viewed any of Perlmutter’s personal emails, and the lack of evidence of any other actual disclosure to a third party, Perlmutter’s use of Marvel’s email for personal purposes does not, standing alone, constitute a waiver of attorney work product protections (see People v Kozlowski . . .898 N.E.2d 891 . . . .

That point is one I’ve always found easiest to explain to lawyers with reference to another New York case (albeit one in federal court) involving a different very famous brand, Martha Stewart, United States v. Stewart, 287 F. Supp. 2d 461 (S.D.N.Y. 2003).  That was the case in which a New York federal court explained the different ramifications as to privilege waiver versus work product waiver flowing from Martha Stewart sharing her lawyer’s communications with her daughter.  While, because she was a stranger to the attorney-client relationship Stewart had with her lawyer and thus eviscerated the attorney-client privilege, as to work product:

By forwarding the e-mail to a family member, Stewart did not substantially increase the risk that the Government would gain access to materials prepared in anticipation of litigation. Martha Stewart stated in her affidavit that “Alexis is the closest person in the world to me. She is a valued confidante and counselor to me. In sharing the e-mail with her, I knew that she would keep its content strictly confidential.” Martha Stewart Aff. ¶ 6. Alexis Stewart stated that while she did not recall receiving the June 24 e-mail, she “never would have disclosed its contents.” Alexis Stewart Aff. ¶ 2. The disclosure affected neither side’s interests in this litigation: it did not evince an intent on Stewart’s part to relinquish work product immunity for the document, and it did not prejudice the Government by offering Stewart some litigation-based advantage. Accordingly, I hold that Stewart did not waive work product protection over the June 23 and 24 e-mails.

And, it seems fair to say that the more robust ability of the work-product doctrine to withstand waiver in a world in which people use their work email for a lot of things, allow me to echo Ms. Stewart to say.

That’s a good thing.

A weird-ish court opinion here in Tennessee.

On the heels of my criticism of an ethics opinion out of New York as weird-ish, let me turn my attention closer to home to discuss a Court of Appeals opinion this week here in Tennessee that is fortunate for the law firm involved but unfortunate for lawyers in Tennessee in general.

In Guo v. Woods & Woods, PP (which you can read by clicking on this link: guox_031417 ) the Tennessee Court of Appeals issued an opinion that held that a lawyer (and his firm) were entitled to keep the entirety of a $7,000 fee paid to them at the beginning of a representation because it was earned when paid.  The outcome was certainly fortunate for the lawyer involved, and it is likely the correct outcome in the appeal if for no other reason than the inept nature of the effort of the pro se plaintiff on appeal, as the opinion describes.

The really unfortunate part of the opinion, however, is that it makes no reference whatsoever to our ethics rule – Tenn. Sup. Ct. R. 8, RPC 1.5(f) – that addresses what is necessary to charge a nonrefundable fee.  Instead, the Court of Appeals looked to an earlier appellate opinion from 2005 [before our state enacted RPC 1.5(f)] and applied a three-part test for non-refundable retainer fees established in that case, Stalls v. Pounders.

Charging and enforcing non-refundable retainer fees or other non-refundable fees is a tricky enough area.  The last thing Tennessee lawyers need is two separate tracks of authority to have to work through and seek to reconcile.  Particularly when one of them relates to potential discipline against their law license.  Unfortunately, this Court of Appeals opinion adds to that risk by not even acknowledging the existence of RPC 1.5(f).  The ethics rule reads:

A fee that is nonrefundable in whole or in part shall be agreed to in a writing, signed by the client, that explains the intent of the parties as to the nature and amount of the nonrefundable fee.

Given the pro se nature of the losing party in the matter and the small stakes involved, it seems unlikely that the case will go to the Tennessee Supreme Court where there would be an opportunity to make clear that a nonrefundable fee has to comply with RPC 1.5(f).  So, hopefully, over time there will not be any further appellate opinions in Tennessee that tackle this kind of matter without acknowledging the rule.

Until such time, the safer course for lawyers is to make sure to comply with the rule because it is hard to decipher a way that satisfying the rule would not also satisfy the Court of Appeals’ three-part test.  (Although insisting on saying that the fee has to be “just and reasonable” when the rule only requires that it be “reasonable” as explaned in cmt. [4a] to the rule at least creates a smidgen of doubt,)  The converse is not as clear particularly if you look at the language of the letter in Guo, take heed of footnote 2 in that opinion, and analyze the requirement in the rule that the writing has to “explain() the intent of the parties as to the nature and amount” of the nonrefundable fee.

Learn something new every day. Or two things. Or three things. I’m not your boss.

About a week or so ago, I learned something new about South Carolina’s ethics rules – thanks to the law-student-powered blog of the University of Miami (FL) School of Law, Legal Ethics in Motion.  They wrote about a South Carolina federal court case in which a motion to disqualify premised on South Carolina Rule 1.18 was denied.  I learned a second new thing about South Carolina’s ethics rules in reading that opinion.

The first new thing I learned about South Carolina was that it has a weird-ish wrinkle in its Rule 1.18(a).

Most jurisdictions, including Tennessee, follow the lead of ABA Model Rules and have a version of Rule 1.18(a) that defines a “prospective client” as someone who “consults with” or “discusses with” a lawyer the “possibility of forming a client-lawyer relationship with respect to a matter.”

South Carolina, however, takes a different approach.  Its RPC 1.18(a) reads as follows:

A person with whom a lawyer discusses the possibility of forming a client-lawyer relationship with respect to a matter is a prospective client only when there is a reasonable expectation that the lawyer is likely to form a relationship.

Now, that “only when there is a reasonable expectation that the lawyer is likely to form a relationship” language can have some obvious benefits in avoiding having to deal with certain situations where most folks would agree that the array of protections afforded to a person as a prospective client under RPC 1.18 just shouldn’t come into existence.  Like, if the only reason someone is reaching out is to get a lawyer disqualified – usually just dealt with through language in the Comment — this language should suffice to prevent RPC 1.18 protection from coming to pass.  Likewise, if say a person a lawyer has never met before calls out of the blue and starts running on at the mouth about their case before the lawyer could get a word – like “stop” – in edgewise, this rule’s “reasonable expectation” and “likely to form” language would be a very good tool for shutting down any RPC 1.18 argument.

But, even having only just learned of the existence of such language, I was still surprised to then learn what the federal court in South Carolina thought it meant.  Instead of resolving a disqualification motion on the basis that there didn’t seem to be any “significantly harmful” information that was ever transmitted, the court concluded that a series of events spanning a voice mail message, a telephone conference about a possible engagement, and an email exchange thereafter with a South Carolina lawyer was not sufficient to ever create the existence of a prospective client at all.

The court’s own description of the events is really all that should be needed to understand my surprise:

On July 7, 2016, Plaintiff’s attorney Jay Wolman (Wolman) called and left a voice mail for Wyche attorney Tally Parham Casey (Casey) about a possible engagement in a case.  Wolman and Casey discussed the possibility of Wyche’s serving as local counsel for Plaintiff in this matter in a telephone conference on July 11, 2016.  Wolman subsequently emailed Casey on July 11, 2016, and provided Plaintiff’s and Gari’s names “[f]or conflict purposes” and requested a fee agreement “[i]f there is no conflict.”  Casey responded on that same day with applicable hourly rates and stated, “I hope we get the opportunity to work together.”  On July 12, 2016, however, Casey sent Wolman an email stating, “I’m afraid we have a conflict and will not be able to assist you with this matter.”

Pardon the wordplay and all, but I’m not sure it is “likely” that a multitude of judges would agree with how that particular line was drawn on the RPC 1.18(a) front in this particular South Carolina decision.

While I am on the subject of South Carolina and its ethics rules, one other development is worthy of mention here.   South Carolina’s Supreme Court has issued a public censure against an Arkansas lawyer for his role regarding using investigators to “pose as customers in an effort to obtain evidence to prove that the defendant was violating the intellectual property rights of the plaintiffs.”  The Court explained that the Arkansas lawyer’s investigators “made false statements to the defendant’s employees and used tactics designed to prod the employees into making statements about the product,” and also “tape-recorded these conversations without notice to the employees.”

Many, many moons ago (2012), I wrote an article for an ABA publication called Landslide about the ethical problems for lawyers stemming from investigations relying on pretext in intellectual property matters.  I don’t think I’m bragging when I say that billions of people never read that article.  While it is probably a pretty safe bet to guess that this Arkansas lawyer was among the billions of people who didn’t read it, I can’t actually call that something I truly learned today because the conduct for which he is now being punished in 2017 with that public reprimand actually took place back in 2009.

Thus, if I’m flailing around trying to add one more thing to my list of nuggets learned today, it would have to be this, the South Carolina Court was actually a bit kind to this Arkansas lawyer in terms of how it described the problems.  It pointed out, in issuing a public reprimand against the lawyer in question, that the lawyer was “unaware that secret tape-recording, pretexting, and dissembling were in violation of the South Carolina Rules of Professional Conduct.”   Had it wanted to be a bit more damning in its explanation of events, it could have pointed out that the South Carolina rules upon which the discipline against the Arkansas lawyer rested (RPC 4.4(a) and RPC 8.4) say the same thing that Arkansas’s own version of those rules say and, thus, that it probably would not be a stretch to say that Arkansas’s ethics rules are also violated by (at least) pretexting and dissembling.