The Law for Lawyers Today

The Law for Lawyers Today

Ethics, Professional Responsibility and More

Too good to be true: dissecting the workings of an internet scam

Posted in Competence, How Not to Practice, Social Media and Internet

scam alertYou know those e-mails out of the blue that start “We would like to engage you to handle our $1 million legal matter”?  From our friends over at Lawyerist.com comes a description of what happened when Steven Chung, an L.A. tax attorney, actually took the bait and pursued one of those invitations.

Chung’s story is headlined, “Dear Lawyers, if a client you never met sends you $350,000, it’s probably a scam” — and of course it was a scam, although the tale ends happily, and Chung avoided getting ripped off.

Set-up for a scam

Here’s how it unfolded: The “client,” supposedly located in an Asian country, asked for representation to file a visa application for an executive who needed to work in the U.S.  Chung asked for a retainer in advance; the potential client asked for an engagement letter.

In the meantime, Chung started digging around, and several things didn’t check out:

  • although the company was apparently real, its purported e-mail address was a Gmail account that anyone can open for free;
  • the “executive” had a LinkedIn profile, but had only four connections, none of whom were connected to the company;
  • other websites did associate the executive with the company, but again, the potential client could have set those up.

With his Spidey sense tingling, Chung turned down the work and thought that would be the end of the matter.  Instead, the client dangled some more bait:  $350,000 that Chung would receive from one of the company’s customers “from an unpaid invoice,” and from which Chung would be able to deduct his fee.  At that point, Chung writes, he “shifted from wariness to the full-fledged realization that this was a scam.”  Chung decided to ignore the communication.

Then, a check for $350,000 arrived in the mail.  It certainly didn’t check out:

  • The return address was from California — but the envelope bore non-U.S. postage.
  • The check was drawn on the Bank of Nova Scotia, though the business had no presence there (and many check scams seem to use Nova Scotia banks).

Temptation…

Chung writes that it was “hard to ignore my name attached to the receiving end of a $350,000 check,” but if he had cashed it, it “could immediately be returned for insufficient funds, at which point either the sender would make an excuse, or possibly accuse me of stealing money and try to blackmail me.  Or the check would be placed on hold by the bank and in the meantime, either the sender or the potential client would ask that I repay them immediately before the check cleared.  Assuming I had a spare $350,000, that money would be transferred and likely never be seen again after the check bounced.  Worst of all, I could have transferred existing money in my trust account, which can result in ethics violations.”

Chung didn’t fall for it, but he kept the check as a memento.

How to avoid the peril

Last year, we wrote about an ethics opinion from the Association of the Bar of the City of New York, which identified an ethical duty to exercise “reasonable diligence” in avoiding internet-based scams like this.  That is certainly an opinion to take to heart, because of the potential for client harm, as well as the obvious downside to you and your firm.

Chung did well to unmask the scam.  You, too, can avoid being a victim.  We agree with Chung’s advice:

  • Just say no, and don’t respond to unsolicited requests for legal representation.
  • If you do respond, “make sure that their documents match their stories.”
  • “Don’t be afraid to ask the tough questions.”
  • “Finally, and most importantly, do not send any money until all checks clear.  Don’t be afraid to wait for an extended period.”

Although Chung did not opt to report the scam, you should consider doing so if you find yourself faced with one.  You can report suspicious e-mails to the FBI’s Internet Crime Complaint Center (www.ic3.gov).

Opinion that OH lawyers can’t aid medical marijuana businesses leads to possible rule change

Posted in Marijuana

Medical Marijuana Cannabis CaduceusThe smoke might eventually clear for Ohio lawyers who hope to help clients engage in the medical marijuana industry after it becomes legal in the state on September 8.  On August 17, the state supreme court said  that it had “directed its staff to prepare a draft amendment to the Ohio Rules of Professional Conduct that would clarify the services attorneys can offer clients seeking to comply with the state’s new medical marijuana law.”  The announcement follows the non-binding ruling 12 days earlier by the state’s Board of Professional Conduct that Ohio lawyers can’t provide any legal services to help clients in connection with a medical marijuana enterprise.

Board:  Medical marijuana “Yes,” legal services, “No.”

In contrast to Ohio’s upcoming state law, federal law designates marijuana as a Schedule I controlled substance, making its use for any purpose, including medical applications, a crime.  Coincidentally, on the same day that the Ohio board issued its ethics opinion, the U.S. Drug Enforcement Agency declined to revisit the Schedule I designation.  Since 2013, however, the U.S. Department of Justice has had the general policy of not interfering when marijuana is used medically under state law.

The disconnect between the federal and state law on marijuana is what creates the ethics problem for Ohio lawyers, said the Board.

Ohio Professional Conduct Rule 1.2(d) prohibits assisting a client who engages or seeks to engage in conduct the lawyer knows to be illegal.  And according to the Board, the rule “does not distinguish between illegal client conduct that will, or will not, be enforced by the federal government.”  If the legal services to be provided can be construed as assisting the client in violating federal or state law, the lawyer is barred from providing them to the client.

The Board was “mindful that the current state of the law creates a unique conflict for Ohio lawyers,” and makes it impossible for some clients to get legal services in an area deemed lawful by the Ohio legislature.  But any remedy, the Board said, must come via amendment of Rule 1.2 by the state supreme court.

Now, just 12 days later, the court will launch a process that will possibly result in such an amendment.

Paths of other jurisdictions

Unlike Ohio, some other bars and states have used ethics opinions to hew a path for their lawyers to help clients who want to work in the marijuana space.  As we wrote last summer, the San Francisco bar association gave the green light to lawyers to advise marijuana businesses — precisely because of the divergence between state and federal law.  “Assisting the client who wants to comply with state and local laws is not the same as advising the client to violate federal laws,” said the S.F. bar ethics committee.  (Importantly, California’s Rule 1.2(d) differs slightly from the analogous Model Rule.)

Other states have taken the approach that Ohio will now consider, by amending their rules.  In 2014, the Nevada Supreme Court amended its Rule 1.2 to add a comment expressly permitting lawyers to counsel a client “regarding the validity, scope, and meaning of” the state’s medical marijuana statute, and to “assist a client in conduct that the lawyer reasonably believes is permitted.”  Public comment and hearings on further proposals to amend the black letter rule are scheduled for later this year.

Other state ethics boards, like Ohio’s, have expressed a desire to have the state supreme court clarify the ethics murk with an express rule amendment; but unlike Ohio, some have given lawyers a qualified go-ahead in the meantime.  The Illinois State Bar Association’s 2014 advisory opinion said that “the provision of legal advice to those engaged in nascent medical marijuana business is far better than forcing such businesses to proceed by guesswork,” and that providing legal services to such clients is “consistent with the Rules of Professional Conduct.”

As always, stay tuned — more developments are sure to follow.

ABA amends model ethics rules to prohibit discrimination, harassment

Posted in In-house Counsel, Law Practice Management

scales of justice 3On Monday, the ABA House of Delegates amended the Model Rules of Professional Conduct to add a provision barring harassment and discrimination in all conduct related to a lawyer’s practice of law.  After months of debate, comment and revision, the revised Resolution 109 passed on a voice vote, without dissenting comment from the floor.  The version adopted reflects an amendment introduced last month, which changed the requirement for a finding of misconduct from strict liability to a “knows or reasonably should know” standard.

Amended Model Rule 8.4(g)

As amended, Model Rule 8.4(g) makes it professional misconduct to:

(g) engage in conduct that the lawyer knows or reasonably should know is harassment or discrimination on the basis of race, sex, religion, national origin, ethnicity, disability, age, sexual orientation, gender identity, marital status or socioeconomic status in conduct related to the practice of law. This  paragraph does not limit the ability of a lawyer to accept, decline or withdraw from a representation in accordance with Rule 1.16. This paragraph does not preclude legitimate advice or advocacy consistent with these Rules.

The revised rule retains in new Comment [5] existing language that some have called “The Batson Sentence.”  The sentence clarifies that a “trial judge’s finding that peremptory challenges were exercised on a discriminatory basis does not alone establish a violation of this rule.”

Twenty states already have varying provisions in their lawyer conduct rules addressing the subject of Rule 8.4(g) in some manner.  For instance, in my home state of Ohio, Rule 8.4(g) bars conduct “in a professional capacity” involving “discrimination prohibited by law,” but does not expressly touch on harassment.  It also omits mention of gender identity, ethnicity and socioeconomic status.

Will the states follow?

The Model Rules, of course, are just that — they do not apply in any jurisdiction, and states are free to adopt, revise or ignore them.  It will be interesting to see how the states without any express ethics rule against discrimination or harassment treat the new amendment.  My friend Brian Faughnan, who blogs from Memphis TN, expressed skepticism about how quickly his own state “and the various bright red states around” him “will move to revise a version of RPC 8.4 not already prohibiting harassment and discrimination,” although he hopes to be proved wrong.

The anti-discrimination/harassment amendment drew opposition on its path to adoption, including from those who raised concerns that the language went too far in restricting attorneys on matters of personal preference, conscience and religious belief.

As it moved through the year-long adoption process, the proposed amendment also drew a long list of co-sponsors, including national affinity bars and many past ABA presidents, and numerous comments on the various drafts.

4th Circuit to decide whether forfeiture clause in partnership agreement violates D.C. ethics rules

Posted in Law firm break-ups, Law Practice Management

parnership documents

The opening brief has been filed in a Fourth Circuit appeal that’s sure to be closely watched by the 100,000 members of the D.C. bar, as well as others.  A key issue in Moskowitz v. Jacobson Holman PLLC is whether a law firm partnership agreement can reduce a partner’s equity payout if the partner walks out the door with clients. The district court said that the provision violates ethics rules, and is therefore unenforceable as against public policy.

Forfeiture and right to practice

Many law firms attempt to protect their interests with partnership or operating agreement provisions that penalize equity holders who take clients with them when they depart the firm. The validity of such provisions has been litigated elsewhere, with the same result as the district court’s ruling in Moskowitz.  A notable example is Cohen v. Lord Day & Lord, the decision that also contributed to the New York Court of Appeals’ rejection of the “unfinished business” rule in 2014.

Lord Day and its progeny have been generally decided under state versions of Model Rule 5.6 (and its predecessor, DR 2-108), which prohibits lawyers from making or offering an “operating … agreement that restricts the right of a lawyer to practice after termination of the relationship,” except for retirement provisions.

In opinions similar to Lord Day and the district court’s ruling in Moskowitz, courts have refused to enforce agreements that require forfeiture of earned compensation when a departing lawyer competes with the lawyer’s former firm.  (There are many factual permutations to those holdings, however, and a number of jurisdictions reject any bright line approach.)

In Moskowitz, an amendment to the Jacobson firm’s operating agreement provided that a member who “withdraws from the Company … and takes client(s) of the Company” would forfeit 50 percent of the member’s equity interest that would otherwise be payable.

When Moskowitz left the firm in 2013, he apparently took the business of almost 50 prior clients (who paid more than $1 million in fees over the next two years).  He sued the Jacobson firm in 2015, asserting that Rule 5.6(a) of the D.C. Rules of Professional Conduct barred enforcement of the amendment, a position that the trial court accepted.

Firm argues for “non-substantial” exception

On appeal to the Fourth Circuit, the Jacobson firm is advancing an interesting argument in favor of reversal.

Reducing the payout of an equity interest, it says, is not by itself sufficient to violate Rule 5.6. While the rule proscribes an agreement if it “restricts the rights of a lawyer to practice after termination of the relationship,” the firm says that comments to D.C. Rule 5.6 recognize that a financial penalty may not be prohibited if it is not “substantial.”  In evaluating the substantiality of a forfeiture, it argues, the amount of the penalty should be compared to the lawyer’s post-withdrawal practice income at his or her new firm.

Using that measure, the firm says, Moskowitz’s penalty for competing against his former firm (about $63,000) is a small fraction of his annual earnings as a highly-compensated lawyer before and after he left Jacobson.

Firms in D.C. and elsewhere will be interested to see if the Fourth Circuit buys this approach.

What’s in a word? No arbitration for lawyer accused of breaches in deal with client

Posted in Malpractice

Dictionary Englisch - Dutch*Updated on 7/29 to insert missing url links. 

Closely parsing the language in an arbitration clause, the California state court of appeals recently reversed an order compelling arbitration of a dispute between a lawyer and his client-turned-business-partner.  The lawyer must now defend against a $1.5 million claim based on malpractice and breach of the operating agreement that the lawyer had drafted in connection with his real estate venture with the former client.  With arbitration provisions becoming a common feature of lawyer-client retainer agreements, this ruling is worth attention.

Arbitration of malpractice case

The client’s 2013 malpractice complaint in Rice v. Downs alleged that while serving as counsel to the client and the companies he was affiliated with, the lawyer and the client decided that they would form a company together to develop properties in the affordable housing market.  The lawyer prepared the operating agreement for the LLC, which provided that “any controversy between the parties arising out of this Agreement shall be submitted” to arbitration in Los Angeles.

The malpractice complaint alleged a variety of misconduct against the lawyer, including secretly billing the LLC for his time, overcharging, conflicts of interest and providing bad advice.

The lawyer moved to compel arbitration of all the causes of action, based on the arbitration provision in the operating agreement.  The trial court granted the motion, and the lawyer won the arbitration, with the arbitrator dismissing the client’s claims with prejudice and declaring that the lawyer had not breached the operating agreement or any other obligation.  The trial court almost entirely confirmed the award (although it made dismissal of the client’s complaint without prejudice).  Both parties appealed.

“Arising out of” “arising in connection with”

In a reversal of the lawyer’s fortune, the court of appeals determined that the arbitration provision in the operating agreement did not apply to the malpractice case.

Under California law, the decision as to whether a contractual arbitration clause covers a particular dispute rests on whether the clause is “broad” or “narrow,” the court of appeals said.  “Broad” clauses use language such as “any claim arising from or related to this agreement,” or any claim “arising in connection with” the agreement.  With broad language, the court will command arbitration where the fact allegations even “touch matters covered by the contract.”

Not so where the parties choose to provide for arbitration only of controversies “arising from” or “arising out of” an agreement, ruled the court.  Those are “narrow” clauses, and the more limited language may not extend to tort claims.

Here, the court framed the issue as whether the particular claims the client asserted were controversies “arising out of” the operating agreements.  The court found very significant the fact that the parties broadly consented to jurisdiction in California courts of actions “arising out of, under or in connection with this Agreement or the transactions contemplated by this Agreement” — but they agreed to arbitrate only controversies “arising out of this Agreement.”

Thus, said the court, a tort claim based on violation of an independent duty originating outside of the agreement would not “arise from” the agreement, and would be outside the scope of the arbitration provision.  That exactly characterized the claims for malpractice and breach of fiduciary duty, the court held, which were not based on failing to perform under the operating contract, but rather violating duties created by the lawyer-client relationship.

Words matter; so do state rules

Of course, it is no news that a case can turn on contract interpretation.  But this one emphasizes the small drafting choices that can send a case to a full-blown jury trial or keep it in arbitration.  That’s of special concern to lawyers and their clients at the front end of a relationship — pre-dispute agreements to arbitrate are increasingly included in retainer agreements.

As always, be aware of your jurisdiction’s ethics opinions and rules governing arbitrating malpractice claims.  Most opinions on the subject indicate that the client’s informed consent is necessary; ethics opinions in a minority of states require consulting with independent counsel regarding the advisability of agreeing to arbitrate such claims.  (Ohio mandates independent consultation by Rule 1.8(h)(1) of its Rules of Professional Conduct.)

Pokémon Go — another reminder about the duty of competence for lawyers

Posted in Competence, Social Media and Internet

Pokemon Go App Icon on iPhoneSince it debuted in the U.S. a couple weeks ago, Pokémon Go has become a nationwide phenomenon. If you’re like I was, you may need a primer in order to understand what the hoopla is about.  The smartphone game was launched by Nintendo and The Pokémon Company.  It involves capturing and “training” phantasmagorical creatures called Pokémon, who feature in a longtime videogame franchise.  And yes, there’s an ethics issue for you to think about.

Here’s what USA Today says about our latest digital obsession:

“What makes the game special is its use of augmented reality, where Pokémon will appear [on your phone] as if they’ve been spotted in the real world.  The game presents a map powered by GPS, using real-world locations to spot Pokémon and collect items.  When you find one, the game opens up your smartphone’s camera, giving you a view of Pokémon in the real world.  Once you spot them, you flick a Poke Ball toward the creature to capture it.”

So, when you see people — and they’re all ages — walking around gazing down at their phone these days, they may well be engrossed in playing the game.

Pokémon can be found all over the place — homes, stores, parks, cemeteries, your law office, behind police departments and even the U.S. Holocaust Museum, before administrators said people couldn’t play there.

What does it mean for lawyers?

First of all, be careful!  People have reportedly been injured because they weren’t paying attention to their surroundings in their quest for getting to the next level of the game.  Two players fell off a cliff near San Diego, for instance, and had to be rescued.

The obvious ethics issue is your duty of competence under your jurisdiction’s version of Model Rule 1.1.  Comment 8 says that “a lawyer should keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology…”

Twenty-one jurisdictions have already adopted the comment, which came into the Model Rules in 2013.  But even if your jurisdiction is not one of them, your general duty to have “the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation” still means you need to understand technological developments sufficiently to be able to advise your clients.

We had occasion to make the same observation about the many legal issues connected with the internet of things — you need to know this stuff because your clients are looking to you for advice and counsel on it.  As legal tech guru Bob Ambrogi has said, “You cannot assess the benefits and risks associated with various kinds of technology if you know nothing about the technology.”

Potential hot issues

The ABA Journal has collected some of the developing legal issues with Pokémon Go:

  • “Does placing a Pokémon character on a private property, without permission, affect the owner’s interest in exclusive possession?”
  • What about putting the creatures in potentially dangerous places — has that created an attractive nuisance?
  • “Does owning real property extend property rights to intellectual property elements that are placed on it?”
  • An augmented reality game like Pokémon Go can lead to competition for the use of the same physical space.  What if that disrupts the ability of players or non-players to enjoy the same space?  What if it leads to violence?  Who’s liable?
  • What First Amendment rights might be involved if government limits the players in a public space?
  • What about the game’s terms of service?  They “disclaim liability for property damage, personal injury or death while playing” Pokémon Go, “as well as claims based on violation of any other applicable law.”  How well will that disclaimer hold up?  There’s also a notice “that generally requires arbitration of disputes,” a contested provision in many contracts.

Clients may come to you with these and other novel questions related to Pokémon Go or other augmented reality games, as they become a bigger part of our modern lives.  You’ll need to research and analyze the issues if you have clients that might be affected — and many clients will be.

The take-away is to be aware of how these issues may affect your clients, because competent representation involves giving informed advice — not “off the cuff” answers.

Firm counsel privilege prevails; New York joins favorable trend in recognizing doctrine

Posted in In-house Counsel, Privilege

Attorney-client communicationThe attorney-client privilege covers ethics advice that lawyers get from their law firm’s general counsel, and the communications do not need to be disclosed to the client, said a unanimous five-judge panel of the New York Appellate Division last week, in a closely-watched case. In Stock v. Schnader Harrison Segal & Lewis LLP, the court ruled that the law firm was the “real client” in getting the advice from the GC, and held that the fiduciary exception didn’t apply.

Underlying case:  tale of expiring stock options

We have been following developments since late 2014, when the trial court decided in Stock’s legal malpractice case that the privilege did not apply to communications that lawyers at the Schnader firm had with the firm’s general counsel in the underlying case.  (Thompson Hine LLP, the sponsor of this blog, was one of 74 firms signing on to an amicus brief seeking reversal of the trial court’s ruling.)

In the underlying case, the Schnader firm represented the client in negotiating his separation from his employer.  The firm did not negotiate an extension of the exercise period for the client’s vested stock options.  When the former employer later advised the client that more than $5 million in options had expired with the termination of his employment, the client consulted the Schnader firm again about his remedies.  In an arbitration before the Financial Industry Regulatory Authority (FINRA), the employer said that it was going to subpoena the lawyers who handled the separation agreement negotiation, and indicated that it was seeking to point the finger at the law firm as being partly responsible for any loss to the client.

That sent the Schnader lawyers to their firm’s general counsel for ethics advice.  When Stock eventually sued the Schnader firm for malpractice, he sought production of 24 e-mails reflecting that advice.

The New York County commercial division court ordered the firm to turn over the documents.  Without extensive analysis, the court agreed with the plaintiff client that the firm lawyers did not expect their communications with the firm’s general counsel to be kept confidential from the client.  The court also invoked the “fiduciary exception” to privilege, saying that the client had “a right to disclosure from his fiduciaries of communications that directly correlate to his claims of self-dealing and conflict of interest.”

Trial court ruling is reversed

In a 28-page opinion, a five-judge panel of the Appellate Division’s First Department unanimously reversed.

The court rejected application of the fiduciary exception, ruling that the Schnader lawyers “had their own reasons, apart from any duty owed to plaintiff, for seeking the legal guidance … Because the purpose of the consultation with [the firm’s GC] … was to ensure that the attorneys and the firm understood and adhered to their ethical obligations as legal professionals, the attorneys and the firm, not plaintiff, were the ‘real clients’ in this consultation.”

The court put particular emphasis on two facts:  first, that the Schnader firm’s general counsel had never participated in the client’s representation; and second, that the firm did not bill the client for the lawyers’ ethics consult with the GC.  That solidified the court’s view that the firm and its lawyers were the clients, and entitled to the privilege protection available to other clients.

Relying on New York state ethics opinions, the court also said that “we do not believe that a consultation by attorneys with their firm’s in-house counsel on a purely ethical issue arising from the representation of a current client … inherently gives rise to a conflict of interest between the firm and the client.”

Adding to a trend?

In reaching its conclusion, the Stock court cited similar recent holdings from state high courts in Georgia and Massachusetts.  The ABA has also taken the position that the fiduciary exception does not apply to confidential communications between law firm personnel and the firm’s in-house or outside counsel, even regarding the firm’s duties or potential liability to a current client.  That favorable trend continues, with the opinion of this influential court.

Microsoft acquisition of LinkedIn could spell ethics issues for lawyers

Posted in Confidentiality, Law Practice Management, Social Media and Internet

Microsoft  apps on Apple iPhone 6S Plus ScreenMicrosoft’s plans to acquire LinkedIn for $26.2 billion was the talk of the tech world late last month.  The combination of these behemoths is going to give Microsoft access to all LinkedIn’s data.  Microsoft’s CEO has given some examples of the potential synergies that will result, like “getting a feed of potential experts from LinkedIn whenever Office notices you’re working on a relevant task.”  But legal ethics issues loom, involving our duty of confidentiality under Rule 1.6.

Aim:  monetizing your links

With its 433 million members, LinkedIn is the #1 professional networking site for lawyers:  93-99 percent of lawyers across firm-size categories have profiles, according to statistics from the ABA and others.

The main thing that Microsoft gets out of the LinkedIn deal is data about you.  As a writer for Forbes noted, LinkedIn “knows where people work, their skills, ambitions, who they went to school with and what interest groups people share. LinkedIn knows about people better than Microsoft does. Or did.”  Now, Microsoft will be able to combine that data with all the many products you use, from your Outlook calendar to Skype to Word.

What’s the money angle?  LinkedIn’s CEO described how the combination could give “sponsored content customers the ability to reach Microsoft users anywhere across the Microsoft ecosystem.”  In other words, to advertise to you in a totally targeted way as you work with any Microsoft product in its “ecosystem.”  Pop-up ads for a treatise when we’re working on a brief in Word?  That would be a stupid move, notes legal tech guru Bob Ambrogi, and hopefully Microsoft won’t go there.

What are the ethics issues?

But this combination does raise some possible ethics issues, centering on your duty of confidentiality.

The confidentiality rule says that you “shall not reveal information relating to the representation of a client,” with very limited exceptions.  The duty includes not disclosing the identity of your client, which in many instances can be extremely sensitive.

In a good analysis  of the issue, ethics educator Stuart Teicher points out that leveraging data in our Outlook calendar can cross that exact line by revealing our client relationships.  Teicher posits that on Outlook, Microsoft “might see a potential client introduction (which lists Pete Smith as present), a court appearance (which lists Pete Smith as present), and a meeting for settlement purposes (which lists Pete Smith as present).  It’s not going to be too tough for the Microsoft bots to figure out that Pete Smith is your client.”

Or, says Teicher, looking at Outlook might show that you are heading to Chicago.  Microsoft might “then cross reference our LinkedIn connections and send a message to one of them that says something like ‘Your connection Bruce Kramer is going to Chicago next week.  Why don’t you look him up?'”  If the purpose of your trip is to confidentially scout out a potential acquisition on behalf of your client, your client doesn’t want data out there from which the seller or its agents can figure out what your interest might be.

Keep your eyes open

Nothing like this has happened yet — the mega-combo has just been announced, after all — and the ethics issues are only potential ones.  But this development bears watching.  As Teicher correctly points out, that’s the way to fulfill your duty of competence, which includes staying up to date on changes in the law, “including the benefits and risks associated with relevant technology.”

Beware: malicious e-mail campaign is targeting lawyers with fake disciplinary, bar notifications

Posted in Competence, Social Media and Internet

Held to ransomA cyber-alert issued earlier this month by the non-profit Center for Internet Security warns of a dangerous wave of malicious e-mails that are specifically targeting lawyers.  The fake e-mails are calculated to get your adrenaline pumping and to get you to open them and click on a link — because they’re personalized, they look urgent, and they’re disguised as coming from your own state’s disciplinary body or bar association.

Don’t fall for these e-mails

The CIS, through its Multistate Information Sharing and Analysis Center, reports that the subject and body of these phishing or spoofing e-mails look like they are from your board of bar examiners, bar association, or disciplinary counsel.  In the subject line and/or body, they claim that a disciplinary complaint has been filed against you, or that your bar membership has lapsed.  You are asked to respond by clicking on a link — which, according to the CIS, “leads to a malicious download, potentially ransomware.”

We tweeted out the warning when it came in from Minnesota, but other states where lawyers have been targeted, according to the CIS, also include AL, CA, FL, GA and NV.

Tweet2

Well-written, well-disguised

The CIS says that unlike the obvious Nigerian-lottery-type e-mails we know to avoid, this latest wave consists of e-mails that are “well-written and appear to originate from the appropriate authority,” and they are personalized, too, which of course boosts their effectiveness.

As a member of my local certified grievance committee, I know the procedure my home state of Ohio uses to notify lawyers of grievances — and it does not include e-mail.  I doubt that your jurisdiction’s process does either.

Your full name, bar membership status, bar number, office address and other professional details are publicly available, usually through your supreme court’s web listing of enrolled lawyers.  So it is easy for the bad guys to find you, and relatively easy to match you up with an e-mail address.  If  Avvo can do it, why not criminals?

Ways to be savvy

CIS recommends several steps in response to this latest threat:

  • Know how to identify spear-phishing e-mails.  “This particular series of emails includes what appears to be a link to the state bar association, but when the user hovers over the link it shows that the link is really to a different website.  Copying and pasting the link, instead of clicking on it, would defeat this social engineering attempt.
  • Back up all your systems regularly “to limit the impact of data loss from ransomware infections.  Backups should be stored offline.”
  • CIS is a § 501(c)(3) non-profit; check out its additional recommendations for protecting against and responding to phishing campaigns, available here and here.
  • Report any suspicious e-mails to the FBI’s Internet Crime Complaint Center (www.ic3.gov) as well as to the legal organization that is spoofed in the e-mail.

And a duty to be savvy

As we’ve noted before, not only is it obviously in your own interest to avoid scams that would lock up your own computer data — it can also be part of your ethical duty of competence to your clients.  Law departments have been identified as particularly susceptible to falling for scam e-mails.

Our complete dependence on our computers makes them a point of vulnerability — take the steps necessary to avoid being exploited.

Lack of vitamin-D didn’t mitigate intentional, habitual non-compliance with discovery requests

Posted in How Not to Practice

A stack of files with a magnifying glass beside themYou may not realize it, but under your jurisdiction’s version of Model Rule 3.4(d) you have an ethics duty to make reasonably diligent efforts to comply with legally proper discovery requests.  Interpreting a wrinkle in Ohio’s version of the rule, the state supreme court held earlier this month that a violation requires “intentionally or habitually” flouting the requirement — and in an odd twist, the court held that a claimed vitamin-D deficiency didn’t excuse a Dayton lawyer’s failure to comply.

Discovery duties under the ethics rules

Ohio’s Rule 3.4(d), unlike it’s Model Rule counterpart, provides that a lawyer “shall not … in pretrial procedure, intentionally or habitually make a frivolous motion or discovery request or fail to make reasonably diligent effort [sic] to comply with a legally proper discovery request by an opposing party.”  The Model Rule does not include the “intentionally or habitually” language.

The Ohio disciplinary case centered on an administrative appeal the lawyer filed in 2012 on behalf of a client seeking workers’ compensation benefits.  The appeal was lodged with the county court of common pleas.  The lawyer failed to comply with discovery requests, and failed to respond to the employers ensuing motion to compel.  Nor did he appear for the hearing on that motion.  The court ordered the lawyer to respond to the requests within 5 days or the case would be dismissed, and eventually imposed $5,980 in sanctions.  The lawyer failed to submit complete responses and the case was dismissed with prejudice.  The lawyer tried to appeal that order, but didn’t file a timely notice of appeal, resulting in the appeal’s dismissal.  The lawyer also failed to pay the court-ordered sanctions, including bouncing a check for a partial payment.

Which rule:  series qualifier or last antecedent?

The Ohio Supreme Court had to decide for the first time whether the phrase “intentionally or habitually” qualified both “frivolous motion” requests and failing to make “diligent effort to comply,” or whether the phrase only applied to the first clause that follows it.  Statutory construction geeks call these opposing canons of interpretation the “series qualifier” rule and the “last antecedent” rule respectively, and choosing which rule applies can drastically affect the outcome of cases.

The court decided without any deep analysis that the words “intentionally or habitually” “serve to modify each clause separately and not just the first clause.”  Therefore, to violate the second clause of Ohio’s Rule 3.4(d), a lawyer must intentionally or habitually fail to make reasonably diligent efforts to comply with legally proper discovery requests.

The court easily held that the conduct of the lawyer here violated the rule.

Did Vitamin D deficiency doom diligent discovery?

The lawyer argued that he didn’t receive proper mitigating credit for a personal-health issue that he was experiencing at the time of the misconduct — namely an alleged vitamin-D deficiency “that led to absentmindedness,” and that his own testimony about his condition should have been sufficient to prove mitigation.  The court held that the Ohio Rules for the Government of the Bar set a much higher standard than that, requiring, among other things, a diagnosis by a qualified health-care professional, and a determination that the disorder contributed to the cause of the misconduct.

The outcome:  an 18-month suspension, with six months stayed on condition that the lawyer pay the sanctions previously ordered.

Take-home lesson

Even if your jurisdiction’s ethics rules don’t have the “intentionally or habitually” language, it’s worth remembering that your discovery duties aren’t founded solely on the rules of civil or criminal procedure:  ethics rules also apply.  And by the way, you should get plenty of the Sunshine Vitamin, too.

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