The Law for Lawyers Today

The Law for Lawyers Today

Ethics, Professional Responsibility and More

Warning from WA: lawyer’s post-employment interviews with former employees not privileged

Posted in In-house Counsel, Law Practice Management, Privilege

Privilege 2A sharply-divided Washington Supreme Court has ruled that an organization’s attorney-client privilege doesn’t apply to post-employment communications between the company’s lawyers and its former employees.  Although Newman v. Highland School District No. 203 adheres to a minority viewpoint, the implications are troubling, and the bright-line test that the state supreme court established in a case of first impression will require new cautions in cases where Washington state privilege law applies.

Talks with former coaches not within privilege

In Newman, parents of a brain-injured high-school football player sued the school district, alleging negligence.  In preparing for trial, the school district’s lawyers interviewed the entire coaching staff, including several former coaches.  When the interviews came to light at a former coach’s deposition, the plaintiffs sought discovery of the communications between them and the lawyers for the school district.

Holding that “everything changes when employment ends,” the court’s 5-4 majority ruled that “the privilege does not broadly shield counsel’s postemployment communications with former employees.”

The court said that once the employment is over, the principal-agent relationship is severed, and the former employees are like any other third-party fact witness. “The flexible approach articulated in Upjohn,” the leading case on corporate attorney-client privilege, “presupposed attorney-client communications taking place within the corporate employment relationship,” the court wrote.

Likewise, the Restatement (Third) of the Law Governing Lawyers § 73 cmt. [e] generally limits the privilege to the duration of a principal-agent relationship, the majority said.  In addition, the court held, the rule promotes predictability and the “truth-seeking mission” of the trial process, which would be frustrated if the privilege were extended to cover post-employment communications with former employees.

“At odds” with Upjohn

The dissent in Newman disagreed with the majority’s adoption of a bright-line rule that would cut off the corporate attorney-client privilege at the termination of employment, and would exclude from its scope all postemployment communications with former employees, even when they have relevant personal knowledge regarding the subject matter.  “[H]ad they remained employed, such communications with counsel would have been privileged” under the reasoning in Upjohn, the author of the dissent noted.

Upjohn’s functional framework does not look at the “formalities” of the employment relationship, said the dissenters; rather, the focus is on the purpose of the communications themselves and the benefits and goals of the privilege.

Therefore, the proper test, the dissent argued, is “Did the communications with the former employee, whenever they occurred, ‘relate to the former employee’s conduct and knowledge, or communication with defendant’s counsel, during his or her employment?'”

ACC: Majority doesn’t get it

The VP and chief legal strategist of the Association of Corporate Counsel, Amar D. Sarwal, quoted in Bloomberg BNA/ABA Lawyers’ Manual on Professional Conduct, called the Newman decision “troubling,” and “a bad idea for Washington, and bad for other courts to follow.”  The decision reflects a “misunderstanding” of the way an organization gains and retains knowledge, which includes the knowledge of people who have left the organization, he said.

Practical implications

Washington’s supreme court got it wrong. Fortunately, its new bright-line rule is a minority viewpoint, and the privilege jurisprudence of most jurisdictions would follow Upjohn’s flexible approach.  But even if you are not litigating a case in a Washington state court, Federal Evidence Rule 501 might point to Washington law as supplying the rule of privilege.  Surmounting the challenge presented by Newman might involve exploring how an attorney-client relationship with an organization’s former employees might be extended or re-created for the purpose of communicating with them under the shield of privilege.

Expressing your opinion via social media can create conflict, D.C. ethics opinion warns

Posted in Conflicts, Social Media and Internet

Thumbs up and downIf you “like” a political Facebook post, or tweet a comment on a controversial legal topic, are you potentially creating an ethical conflict of interest with your clients who may have contrary interests?  The District of Columbia bar ethics committee thinks so, and warns about the risk in its Opinion 370, issued late last month.

The position, which the ABA/BNA Lawyers’ Manual on Professional Conduct (subs. req.) called “novel,” is part of an opinion that otherwise accords with the large body of common-sense advice about using social media for legal marketing and personal enjoyment.  Opinion 370 weighs in on several frequently-encountered issues, such as protecting client confidences, responding to online reviews and identifying legal specialties.

Positional conflicts?

But the D.C. bar ethics committee is possibly the first to single out blogging, tweeting or commenting as having the potential to raise a “positional conflict” with a client.  Such a conflict can arise when a lawyer takes one position and then takes an inconsistent position on behalf of a client.  The D.C. committee said:

“Caution should be exercised when stating positions on issues [on social media], as those stated positions could be adverse to an interest of a client, thus inadvertently creating a conflict.  [D.C.] Rule 1.7(b)(4) states that an attorney shall not represent a client with respect to a matter if ‘the lawyer’s professional judgment on behalf of the client will be or reasonably may be adversely affected by … the lawyer’s own financial, business, property or personal interest.’ … Content of social media posts … may contain evidence of such conflicts.”

While at least one academic scholar has advanced the idea that blogging can raise such a positional conflict, comment [13] to D.C.’s Rule 1.7 seems to describe the conflict only in connection with taking inconsistent positions on behalf of a client in a matter, where doing so would “adversely affect the lawyer’s effectiveness in representing another client.”

That would seem to rule out the possibility of a positional conflict where a lawyer is simply making a personal expression of opinion using social media, outside the scope of representing a client.

Bad for business…

Nonetheless, the brief warning in the D.C. opinion is valuable in making the point that what you say on-line can put you in an awkward spot with clients or potential clients.  Being identified in a high-profile way with a particular position could certainly cause a client to fire you or not hire you.  But that may just be viewed as a regular part of today’s legal practice.

When it comes to establishing a policy about what a firm’s lawyers and staff can say on-line, most firm managers avoid a heavy-handed approach.  Unless the lawyer or staffer wants to mention a specific client, the social media policies that most firms now have usually simply ask for the use of discretion and good sense, without stifling personal expressions of opinion — and that’s the way it should be.

Note:  My co-editors and I are thrilled that the ABA Journal has honored The Law for Lawyers Today as one of this year’s 100 best blogs!  Read the magazine’s announcement here.  We promise to keep bringing you fresh and lively news and comment every week from “Legal Ethics World.”

Five reasons why lawyers should be thankful

Posted in Uncategorized

ThankfulnessLast year at this time, we published this post on gratitude, and it resonated with a lot of lawyers.  Here it is again, slightly revised.  Have a grateful Thanksgiving holiday.

Looking at the roiling current of world events, many of them dark and discouraging, can justifiably make us anxious and depressed.  Our times seem indelibly marked by war, political turmoil, terrorism, desperate migration, environmental degradation, siege.  But here in the U.S., we will nonetheless sit down on Thanksgiving  Day with family and friends for a shared meal that is the proper antithesis — perhaps the strongest one — to hate, death and destruction.

And while you are feeling generally grateful, you should also think about your life in the law, in particular.  Academic legal scholars have examined the trait of gratitude and how it is and can be expressed in our chosen profession.

In her excellent 2012 article, which appeared in the Notre Dame Journal of Law, Ethics & Public Policy, author Reed Elizabeth Loder says that “Gratitude might be a curious topic at a time that the public maligns, even demonizes lawyers.  Asking lawyers to endure social scorn and yet feel thankful seems a double insult.  Yet … every lawyer should cultivate, feel, and act upon a special type of gratitude — call it legal gratitude.”

Cultivating this attitude, says Loder, can be a “sustaining source of ethical inspiration to lawyers.”  Having that inspiration can provide us with the outlook we need if we are to survive in our challenging profession with our inmost beings intact.

So here are five reasons to specifically be thankful for being a lawyer.

  • Our knowledge, skill and training are gifts.  Whether a GC of a Fortune 500, or a contract lawyer doing document review, we should recognize that we have achieved a privileged status in society that has improved our own lives, and created personal opportunities.  Even if we have earned our professional status by our own hard work, we have to acknowledge that we have “social and personal privileges” by virtue of the generally just society that permitted us to acquire our status, Loder writes.  “Whereas citizens owe gratitude to their government for general belonging and public benefits, the lawyer owes special gratitude for a legal heritage that bestows greater than normal benefits.  For this aura surrounding a life in the law, the lawyer should feel grateful.”
  • Our work has purpose.  More important than the concrete social advantages that being a lawyer brings to us, “are the possibilities a lawyer acquires for a meaningful professional and personal life.  The law is a worthy profession because it serves the intrinsic good of justice … Unlike many forms of work, legal work has an overarching purpose as its measure.”  Even when we struggle to find that purpose in the face of moral and practical uncertainty, “it is a privilege to have some standard of goodness” by which we calibrate our professional integrity.
  • We have the ability to change society.  “Because law is so central in a contemporary society that has few other shared cultural moorings, the lawyer is privileged to effectuate social changes that few have the power even to touch.  … Lawyers can influence, to small or large extent, legal reform and justice in particular cases.”
  • We have the opportunity to help.  As Loder says, “there is never a shortage of satisfying work for those lawyers who can make time to donate their expertise to represent otherwise voiceless clients or causes.”
  • We have the opportunity to grow personally.  Whatever you call your inner being — your soul, your psyche, your character — being a lawyer presents an incredible opportunity to refine and perfect it.   This concept may get lost in the hurly burly of daily practice, with its competitiveness and all the ordinary encounters we have that can diminish and dispirit us.  But at bottom, as Loder puts it, “the legal experiences that spur lawyers to perfect their craft and cultivate personal traits like patience and fortitude are the sources of gratitude.”

Our privileged position in society, the chance to do good work and serve a just system, the opportunity to serve others — all these build our own capacity for generosity and caring, and bring meaning to our own lives.

For these things, we should be grateful.

Being a technology “dinosaur” leads to license surrender in the Great North

Posted in How Not to Practice, Law Practice Management

Technophobia dinosaurTechnophobia isn’t  confined to U.S. lawyers.  No surprise, it affects Canadian members of the bar, too, with the same potentially disastrous results.  A cautionary tale:  a lawyer who was technologically illiterate failed to supervise his wife, who ran his office and used his bar credentials to misappropriate more than $300,000 without his knowledge.  Canadian disciplinary authorities last month permitted him to surrender his license voluntarily, instead of revoking it.

“Complete care and control”

First reported under the apt headline “Dinosaur in the Dark” over at Legal Profession Blog, the opinion describes how from 1996-2013 the lawyer totally abdicated administrative responsibility for his corporate and real estate practice to his non-lawyer wife, who served as his “law clerk.”

The 68-year-old lawyer had started out as a corporate/commercial litigator with a firm, where his practice was supported by an extensive staff and he never had to learn the nuts and bolts of running an office.  Nested in this comfortable cocoon, he remained technologically ignorant:  he dictated all his correspondence and documents; he did not access his own e-mail account, and “did not even know how to turn a computer on;” all accounting responsibilities were taken care of for him.

When the firm folded 22 years after he joined it, the lawyer began a solo practice, including real estate, running it out of his home with his wife as his clerk.  The wife, who had always dealt with the family finances, now took on all the tasks of running the business end of the law practice as well — she had “complete care and control” over the firm finances, had full access to the business account and trust account, opened all the mail and supposedly attended to all the bills and accounting.

The lawyer continued to be ignorant of all things technological — he did not even use a cell phone.  He remained unaware of Ontario’s mandatory Teranet system, the electronic registration facility implemented in the late 1990’s, in which client financial transfers and charges are required to be registered electronically using a computer key unique to the lawyer to whom it is issued.  The wife obtained the key on the lawyer’s behalf and used it without his knowledge, authorization or supervision.

Recipe for disaster

You can see where this sad story is headed.  When the income from the law practice failed to meet the couple’s modest expenses, the wife started robbing Peter to pay Paul out of the client trust accounts.  She testified “I always thought it would be a temporary thing.  I always thought things would get better and we’d … have more work or come into money, or something and I’d pay it all back.”

The wife’s delusional scheme continued based on the lawyer’s ignorance; he never saw e-mails that came from the bank or, eventually, from disciplinary authorities, and his wife intercepted postal mail and even phone calls that would have alerted him to the problems.  She admitted that she kept the lawyer totally in the dark about her increasingly desperate misappropriations.  Eventually, $373,000 in client funds had been misappropriated and more than $530,000 had been “misapplied.”

Keeping your eye on the ball

The house of cards finally fell after disciplinary authorities carried out a random “spot audit” of the firm.  (The 30-year marriage apparently ended, too.)  The lawyer was allowed to surrender his license by agreement, rather than having it revoked, partly because of his remorse, admitted misconduct and the wife’s admitted deception.

The lawyer’s counsel described him as a “dinosaur,” and the disciplinary opinion said he “refused or could not be bothered to become computer-literate, during a time when the practice of law and business in general was evolving rapidly and becoming much more dependent on electronic media and devices.”

Here in the States, of course, Model Rule 1.1 cmt. [8] says that the duty of competence means that “a lawyer should keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology.”  Here, the lawyer was found to lack “the technological knowledge necessary to conduct a successful legal practice in the twenty-first century.”

Although the lawyer had every reason to trust his wife, being so ignorant that he could not “actively review and supervise” her actions was misconduct, as it would also likely have been under our Model Rule 5.3.

These circumstances make for sad reading, to be sure, but as we’ve pointed out a couple times before, you have to keep up with the times.



“No contact” rule didn’t bar interview with represented suspect, district court holds

Posted in Communication, In-house Counsel, Unrepresented parties

Empty Chair in an Interrogation RoomWhen the government comes knocking during a grand jury investigation, can a G-man interview one of your executives without getting consent from counsel?  Last month, the U.S. District Court for the District of Maine said “Yes,” and refused to suppress a suspect’s statements in the tax fraud case against him, holding that the ex parte chat didn’t violate attorney ethics rules.

The case shows how in a federal criminal investigation, an exception to the well-known “no-contact” rule can sweep away its protection.

Tax fraud … more than skin-deep

In U.S. v. Sabean, IRS special agents interviewed a Maine dermatologist in his office, without his tax lawyer present.  Almost two years later, the dermatologist was indicted for taking more than $3 million in fraudulent medical deductions, health care fraud and illegally distributing prescription drugs.

The dermatologist moved to suppress the statements he made during the IRS interview, using an argument that the court called “rather novel” — namely, that federal statute requires government lawyers to adhere to the legal ethics rules of the jurisdiction where they work, including, Maine’s version of Model Rule 4.2, and that violating the no-contact rule amounted to a violation of his Fifth Amendment due process rights, requiring exclusion of his statements.

“Authorized by law” exception

Maine’s Rule 4.2, like its Model Rule counterpart, provides that a “lawyer shall not communicate about the subject of the representation with a person the lawyer knows to be represented  by another lawyer in the mater, unless the lawyer has the consent of the other layer or is authorized to do so by law or a court order.”

Acknowledging that the IRS agents who interviewed the dermatologist were acting on behalf of government lawyers and knew that he was represented, the court decided that the interview fell under the “authorized by law exception.”

Comment [5] to Rule 4.2 says that ex parte “communications authorized by law” include “investigative activities of lawyers representing governmental entities, directly or through investigative agents, prior to the commencement of criminal or civil enforcement proceedings.  When communicating with the accused in a criminal matter, a government lawyer must comply with this Rule in addition to honoring the constitutional rights of the accused.”

The district court judge in Sabean reasoned that the comment means that the bar of the “no contact” rule “begins when there is an ‘accused,’ thereby marking the actual commencement of criminal proceedings,” and that the pre-indictment, non-custodial interview did not require consent of the suspect’s lawyer.

The judge found additional support for this view in the Reporter’s Notes for Rule 4.2, which were prepared by the state task force that considered adoption of the Model Rules of Professional Conduct.  The Reporter explained that “[t]raditional investigative activities of prosecutors are those ‘authorized … by law” for purposes of the exception to the no-contact rule.

The judge also cited a case from the Third Circuit, and cases from district courts in Pennsylvania and North Carolina, which held that pre-indictment interviews do not violate the no-contact rule.

Suppression not an “appropriate remedy”

In addition, the court said that “while exclusion may be a remedy for due process violations of interview procedures, it is not a mandatory remedy,” and suppression is to be reserved for only the “most egregious violations of the no-contact rule.”

This case simply didn’t fall into the “egregious” category, the court ruled:  the interview was investigative, not prosecutorial; and it wasn’t “scripted to reveal potential trial strategy or obtain uncounseled confession.”

Following the denial of the motion to suppress, the jury trial in the case was set to begin on November 1.

LinkedIn “endorsement” upgrade shows need to monitor what others say about you online

Posted in Advertising and Solicitation, Law Practice Management, Social Media and Internet

LinkedInLinkedIn last week announced a “rethinking” of its endorsement feature, first launched in 2012.  Starting with its mobile app, the service says it has “improved targeting,” so people looking at your profile will see the endorsements for you that are most relevant to them.  Coming on the heels of this development, a new Ohio ethics opinion reminds us that we should be monitoring endorsements and other kinds of testimonials to ensure they are within ethical bounds.

LinkedIn endorsements — power of suggestion

According to LinkedIn (which has achieved near-universal penetration of the lawyer user market), more than 10 billion endorsements have been shared on its platform in the last four years.  For the uninformed, in LinkedIn-speak, an “endorsement” results from one of your connections clicking a link on your profile page, saying that you have “skill” in a list of areas that you have created and pre-set.  For instance, 50 people might say that you are skilled in “legal research,” and their little profile pictures (if they have them) are arrayed next to the endorsement.

Apparently, LinkedIn (which was acquired this summer by Microsoft) will now harness the power of its millions of users to calculate which of your skills would be most relevant to someone searching for you.

Clearly, endorsements can spotlight your particular accomplishments and skill set, but of course they come with some ethics considerations to be aware of.

Trust, but verify

First, you are responsible for monitoring testimonials and reviews of clients that are posted on websites that you control, as Advisory Opinion 2016-8, issued October 7  by the Ohio Supreme Court’s Board of Professional Conduct points out.

The Board said that websites that permit clients and others to “endorse” a lawyer are advertisements, and lawyers must ensure that they comply with the Buckeye State’s versions of Model Rules 7.1 and 7.2.  In particular, “false, misleading, or non-verified testimonials in the form of client comments or endorsements should be removed by the lawyer when he or she has control over the content of the profile.”  (Ohio’s rule imports from its prior Code of Professional Responsibility the prohibition on claims that are nonverifiable, i.e. not capable of being factually substantiated.)

So, if you have listed yourself on your LinkedIn profile (which you do control) as having skill in “Tax Law,” and a client “endorses” you for that skill, and you indeed have that skill, you presumably are within the bounds of good ethical practice.  (Don’t scoff at this seemingly-self-evident proposition.  Some lawyers in South Carolina got in ethics trouble when their marketing company  set up a website that claimed skillsets that they didn’t have.)

But if you set up your LinkedIn skill section to invite endorsements for being the “World’s Greatest Corporate Advisor,” that presumably would not be ethical, at least in Ohio, since such a claim would be non-verifiable.  And if you set up the section to claim skill in tax law but, like me, barely got through your law school tax course (thanks for the courtesy C+, Professor Lou Geneva), then you are definitely outside the bounds.

Second, if you accept endorsements and always “endorse back” the person who has endorsed you, you should think about your state’s version of Model Rule 7.2(b), which says that “A lawyer shall not give anything of value to a person for recommending the lawyer’s services…” with some non-relevant exceptions.  If you make your own endorsement contingent or conditional on receiving one in return (or vice versa), then you would potentially run afoul of Rule 7.2(b).  Quid  pro quo endorsements are obviously ethically suspect, as my St. Louis-based ethics friend Michael Downey points out in this 2013 interview.

Know the rules of your road

LinkedIn endorsements are optional — I simply haven’t set up my own profile to accept them, for instance.  But if you like endorsements for their potential to inform people about you and your skills, be aware of your jurisdiction’s rules and ethics opinions on the subject, and use endorsements wisely.

Ethics opinion nixes use of verein names in TX, but firms say “Business as usual.”

Posted in Disqualification, Law Practice Management, Multi-jurisdictional practice, Unauthorized practice

International communication conceptAs we’ve predicted before, the increasing globalization of high-level legal practice continues to create questions about forms of legal practice – in particular, vereins, a structure aimed at letting firms based in different countries operate under a unified brand.  Mega-firms Fulbright & Jaworski  (subs. req.) and Dentons have faced motions to disqualify centered on such structural issues, and now a Texas ethics opinion issued last month questions whether lawyers in the Lone Star state can use a verein name on pleadings.  (Hat tip to Dan Bressler and the Law Firm Risk Management blog for alerting us to the opinion.)

Five AmLaw 100 firms affected

In Opinion 663, the Texas Professional Ethics Committee concluded that under the state’s Disciplinary Rules of Professional Conduct, Texas lawyers in an organization such as a verein “may not use the name of the organization as their law firm’s name on pleadings or other public communications” unless all the names are those of current or former lawyers in the Texas firm or a predecessor firm.

According to an article in Texas Lawyer, five firms on the AmLaw 100, which lists the highest-grossing U.S. law firms, are Swiss vereins that include Texas lawyers, including DLA Piper, Baker & McKenzie, Hogan Lovells, Norton Rose Fulbright and Squire Patton Boggs.

The Committee based its opinion, which is advisory, on Texas’s Rule 7.01(a), which unlike the analogous Model Rule on firm names, expressly bars lawyers from practicing under a “a firm name containing names other than those of one or more of the lawyers in the firm,” (except for deceased/retired lawyers’ names or names of predecessor firms).

The Committee’s analysis used a hypothetical Texas firm formerly named “Smith Johnson,” that has joined an “international verein” and become known as “Brown Jones Smith.”  The Texas lawyers in the verein would be violating Rule 7.01(a), said the  Committee, because “there has never been a lawyer in the Texas law firm or any predecessor firm named Brown or Jones.”

In addition, like the analogous Model Rule, Texas Rule 7.02 prohibits “misleading” firm names, and the Texas Committee concluded that the use of the “Brown Jones Smith” name would also be misleading, by creating “the appearance that all lawyers in all the law firms that are in the verein are members of a single law firm when in fact they are not.”  The firm’s statements about its composition in advertising disclaimers don’t diminish the misleading nature of the communication, the Committee said.

Be careful what you ask for?

According to Texas Lawyer, the Texas Committee issued Opinion 663 in response to an inquiry from Robert Newman, who is of counsel with Norton Rose Fulbright (a verein with Texas lawyers), and a former chair of the Committee.  Asking for an advisory ethics opinion, and then getting an adverse one, is always a possibility, although even an adverse opinion at least tells you where you stand, ethically speaking.  But the reactions of the current Committee chair and the mega-firms contacted by Texas Lawyer are interesting, and indicate that it will basically be business as usual for the firms, notwithstanding the (advisory) opinion.  The Committee chair said that “Literally nothing is going to happen” unless someone files a grievance against a lawyer for using a verein name, which he said would be a “rare” occurrence.

For their part, two firms contacted by Texas Lawyer — Norton Rose Fulbright and Baker & McKenzie — said they do not plan to make any changes as a result of the ethics opinion.  The magazine quotes the managing partner of Baker’s Dallas office, who said “We’ve been practicing in Texas as Baker & McKenzie since 1986 and plan to continue to do so.”

Whether this ethics opinion will resonate with bar regulators in other jurisdictions, and whether it will generate some disciplinary cases remains to be seen.  Also interesting is the Texas committee’s view that the law firms in the verein are not members of the “same firm,” which might have a potential impact on analyzing future conflict of interest issues, among other things.  Stay tuned for further developments.

Five signs that your law department could be headed for a privilege problem

Posted in Confidentiality, In-house Counsel, Law Practice Management, Privilege

Confidentiality stampRegulatory compliance, cyber-security issues, herding legal operations staff — in-house legal practice is more complex than ever.  One element that remains a continuing challenge is protecting the organization’s attorney-client privilege.  Slipping up can risk the loss of the privilege in litigation involving the company, and can potentially result in an order to produce otherwise confidential communications to the other side.  What are some signs that your law department needs to tune up its privilege IQ?

Some privilege ABC’s

First, for purposes of attorney-client privilege, the client is the organization, and in-house counsel is the attorney, just as much as outside counsel is.  So communications between the law department and management, for the purpose of getting or giving legal advice, made in confidence and kept confidential, can qualify for privilege protection.  The facts aren’t privileged, of course — only the actual communication.

Signs of trouble

Outside that rubric, however, issues could lead to the loss of privilege and disclosure of your confidential communications.  Here are five signs of problems.

  1. The department’s lawyers overshare.  Sharing communications is good, right?  Sometimes.  But too much sharing is not.  E-mailing confidential legal advice with a cc: to a long list of managers and employees who have no need to know it can risk the privilege — because it can be seen as negating the confidentiality that is a hallmark of a privileged communication.  (On the flip side, however, when managers discuss business issues, dropping the name of the company GC into the cc: box does not make the communication privileged.)
  2. You fail to mark your communication as privileged; or you mark everything as privilegedWhen opposing counsel makes a request for documents, nothing quite says “privileged” like a document that you have clearly marked “CONFIDENTIAL – ATTORNEY-CLIENT PRIVILEGE.”  Failing to mark that e-mail or that report to management might not result in an order to disclose it — but why not express your intention at the time you make the communication?  It can only help — unless you automatically mark everything that comes out of the law department as privileged (like your lunch invites and inter-office jokes).  Then, a court reviewing your claim of privilege might be less likely to take you seriously.
  3. You mix business advice with legal advice without distinction.  We all know that the client expects in-house counsel to wear many hats, and giving advice on business issues comes with the territory.  The problem is that business advice does not qualify for protection by the attorney-client privilege.  If you mix business advice and legal advice in one memo without any distinction, you might be inviting a privilege problem.  Some courts might parse the communication and shield the legal advice; but in other jurisdictions, the court will determine what the “predominant purpose” of the whole communication is, and you might come out on the losing side of that equation.  It’s better to keep legal advice and business advice separate, if you can.
  4. You haven’t educated managers and employees about the ground rules of privilege.  You don’t have to make it a law school course, but it really helps if your client understands the basics:  that they can’t share with  others the privileged communications they have with you; that they should keep documents marked as privileged in a safe place; that making the legal department a cc: on an e-mail is not sufficient to make it privileged.  Create a check-list for the department heads you work with.  They’ll appreciate knowing the lay of the land.
  5. You don’t acknowledge the nuances of foreign privilege law.  The global nature of business and legal practice today means that you likely need to understand privilege law as it plays out internationally.  Be aware of the issues.  For instance, some courts hold that a legal practitioner  functioning in a foreign country qualifies as an “attorney” for purposes of the privilege; others have ruled that communications with foreign in-house counsel are only privileged if they qualify under the privilege laws of the foreign country.  Several countries (and the European Union) do not recognize any evidentiary privilege for communications between a company’s in-house lawyers and management or employees.

Addressing these potential problems should help maintain attorney-client privilege.

Out-of-state lawyer disciplined for e-mail negotiations; no safe harbor from unauthorized practice, says MN court

Posted in Multi-jurisdictional practice, Unauthorized practice

Officer custom control signHas your mother-in-law ever asked you for legal help?  Giving legal advice to family members can be challenging for lots of reasons — but it often comes with the territory when you have a law license.  A Colorado lawyer, however, recently got into disciplinary trouble for helping his Minnesota in-laws in a small collection matter.  In a badly flawed decision, a divided Minnesota Supreme Court decided that he had engaged in the unauthorized practice of law, and that no “safe harbor” applied to permit his activities — which consisted of sending e-mails from Colorado into Minnesota in order to negotiate the judgment.

Coming 14 years after the ABA adopted Model Rule 5.5(b)-(d), this opinion spotlights how turf protection by state regulators has thwarted hopes for a multi-jurisdictional outlook that would be more in line with the realities of modern-day legal practice.

Admonished — astonished

The Colorado lawyer received the lowest level of discipline available in Minnesota — a private admonition — and therefore is not named in the court’s opinion.

His road to trouble in the North Star State began when his in-laws, residents of Minnesota, contacted him for help on a $2,300 judgment against them in a dispute with their condo association.  From his law office in Colorado, where he has been practicing for 30 years, the lawyer exchanged about two dozen e-mails with the condo association’s Minnesota attorney over a four-month span, culminating in a settlement offer by the lawyer.  Part of the lawyer’s litigation practice includes debt collection.

The state supreme court, agreeing with the hearing panel, held that “engaging in e-mail communications with people in Minnesota may constitute the unauthorized practice of law in Minnesota, in violation of Minn. R. Prof. Conduct 5.5(a), even if the lawyer is not physically present in Minnesota.”

Astonishingly, the court majority rejected the argument that the lawyer’s efforts on behalf of his in-laws “arose out of or were reasonably related to his practice in Colorado,” even though his practice there partly involves debt collection.  Minnesota’s Rule 5.5(c)(4), like its Model Rule counterpart, creates a safe harbor for temporary practice in a state where the lawyer is not licensed, if the lawyer’s activities grow out of practice in the lawyer’s home state.  Not here, said the four-justice majority.  In a stunning bit of reality-denial, the court held that “simply because his in-laws contacted him in Colorado or appellant has done collections work in Colorado,” that was not enough to make the lawyer’s representation of his in-laws arise out of or reasonably relate to his practice in Colorado.

Dissent:  This is a “step backwards”

The three dissenting justices wrote that the e-mails and “assistance with a small judgment-collection negotiation for his parents-in-law” were reasonably related to the lawyer’s Colorado practice, and thus within the safe harbor of Rule 5.5(c)(4).  They properly saw the majority’s holding as “troubling and counterproductive,” in light of Model Rule 5.5’s policy:  to be a “bold step towards new latitude in multijurisdictional practice of law, which accommodates the increasingly mobile and electronic nature of modern, national legal practice.”  The majority’s decision, the dissenters wrote, “represents a step backwards.”

Contrary to the principles and policy goals intended by Rule 5.5, the majority’s holding, said the dissenting justices, means that “when family members or friends — an abundant source of clients — email or call a practitioner admitted in another state, seeking assistance in areas in which the practitioner is experienced and competent, relying on a relationship of trust and confidence, they must be turned away.”

The majority opinion relies on the parochial view that the Colorado lawyer’s knowledge and experience in negotiating resolutions of collection matters stopped at the state line, and that his e-mails sent into the ether across that state line constituted unauthorized practice that the citizens of Minnesota (i.e. his in-laws) needed protection from.  It’s sad that we haven’t come farther than this since 2002 and the safe-harbor provisions of Model Rule 5.5.