Money and JusticeOld-time lawyers say that it used to be easy to get the court’s permission to withdraw from a case.  You would just go to the judge and state, “Your Honor, we are not ready to go forward, and I am seeking leave to withdraw, because Mr. Green has not arrived.”  You know:  “Mr. Green” aka the moolah, aka the promised fee from the client.  And, so the story goes, the judge would bang the gavel and grant your motion.  (For a variation on the theme, see The Lincoln Lawyer, 2011, starring Matthew McConaughey.)

Such stories may be apocryphal, and whether true or not, hopefully we’ve come a long way in our understanding of the duties we owe clients in seeking to terminate our representation.  When withdrawing requires permission of a tribunal, as it does under most court rules, a continuing ethics quandary has been how much information we are permitted to disclose to the court in justifying the request.  On December 19, the ABA’s Standing Committee on Ethics and Professional Responsibility issued some guidance on the subject.

When you “may withdraw”

Model Rule 1.16(b), and state rules based on it, describe when you “may” withdraw from a representation, including when the client “substantially fails to fulfill an obligation to the lawyer regarding the lawyer’s services,” and the client has been warned that the lawyer will withdraw unless the obligation is fulfilled.  Comment [8] gives the example of a client refusing to abide by an agreement concerning fees or court costs.

In civil litigation, the quandary arises because Model Rule 1.6 requires the lawyer to maintain confidentiality about everything “relating to the representation,” with only narrow exceptions, and Rule 1.16(c) requires the lawyer to comply with a tribunal’s rules in seeking to withdraw.

You have to phrase your withdrawal request to the tribunal in some way — but  how far can you go in revealing the reason?  In Formal Opinion 476, the ABA Committee acknowledged the difficulty, quoting one characterization of the issue as a “procedural problem that has no fully satisfactory solution.”

Will “professional considerations” suffice?

The ABA Committee noted that many courts will simply accept a reference to “professional considerations” that are prompting the motion to withdraw.  (Sounds just a little like “Mr. Green.”)  Rule 1.16 cmt. [3] endorses that approach, advising that the “statement that professional considerations require termination of the representation ordinarily should be accepted [by the court] as sufficient.”

But some courts won’t accept “professional considerations” as sufficient.  The Committee cited withdrawal decisions from several jurisdictions that reflected details about the money owed by the client, the specific legal services carried out and other facts, indicating that the court had required much more than a generic statement from the lawyer about “professional considerations.”

The Committee pointed out that Model Rule 1.6(b)(5) and its cmt. [11] permit some disclosure of confidential client information in fee-collection suits by lawyers.  A motion to withdraw for failure to pay is “generally grounded in the same basic right of a lawyer to be paid pursuant to the terms of a fee agreement,” said the Committee.  Also, many court rules specify that motions to withdraw must be supported by “facts,” or “satisfactory reasons,” or similar showings.

Limit the info … but explain if required

Therefore, the Committee concluded, where the assertion that “professional considerations” justify withdrawal is not acceptable, and “when a judge has sought additional information” to support the motion to withdraw for non-payment, then the lawyer may “disclose information regarding the representation of the client that is limited to the extent reasonably necessary to respond to the court’s inquiry and in support of that motion to withdraw.”

What about the judicial officers considering such motions?  The Committee advised that judges “should not require the disclosure of confidential client information without considering whether such information is necessary to reach a sound decision on the motion.”  And if detailed information is required, courts should mitigate potential harm to the client, such as by allowing disclosure under seal or in camera, and by using redaction.

There will always be a tension between the duty of confidentiality and the necessity of providing reasons for a request to withdraw from representation. But Opinion 476 at least charts a path forward when facing the need to withdraw because of a client’s failure to pay.

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.

Let's talkWhat should you do when you are co-counsel on a case or in a deal, and you become aware that the other lawyer has made an error?  A new ethics opinion from the New York State Bar Association says that if you reasonably believe that your co-counsel has committed a significant error or omission that may give rise to a malpractice claim, you must disclose the information to the client.

Discovery slip-up

Ethics Opinion 1092 was based on an inquiry received from a lawyer with a dilemma.  The lawyer had been brought into a case as co-counsel on the eve of trial, and found that the other lawyer had done virtually no discovery, and had not made any document requests — despite the fact that communications and e-mails between the parties would be critical to the case.

The lawyer believed that the lack of discovery was a significant error, and that it could constitute malpractice.  The outcome of the case was still pending.  The lawyer was concerned that disclosing the information to the client could undermine the lawyer’s relationship with co-counsel, but was nonetheless convinced that it was in the client’s best interest to reveal the facts as soon as possible.

Interpreting communication, conflict rules

The NYSBA Committee on Professional Ethics noted that prior opinions had consistently held that a lawyer must come clean to the client about his or her own significant errors or omissions in providing legal services.  That principle is founded on two ethical duties:  (1) the duty to communicate with the client, and provide the information necessary for the client to make informed decisions (see Model Rule 1.4); and (2) the duty to withdraw from the representation where the lawyer’s personal interests conflict with the client’s (see Model Rule 1.7(a)(2)).

Those same rules also raise a duty to communicate with the client about co-counsel’s potential malpractice, the Committee opined.

Respect for client autonomy and decision-making means that the lawyer must provide information about all significant developments affecting the representation.  That “applies equally to a significant error or omission by co-counsel that may give rise to a malpractice claim,” said the Committee.

If co-counsel committed such an error, the client would have several options, such as continuing the relationship with co-counsel and reserving a possible malpractice claim; terminating co-counsel; bringing a malpractice action against co-counsel now; or getting independent advice about the options.  But without information, the client would be stymied in pursuing any of these choices.

Also, depending on the facts, the lawyer with the inquiry might have a personal conflict of interest that would raise a significant risk of adverse effect on the lawyer’s professional judgment — for instance, if the lawyer’s desire to maintain a good relationship with co-counsel was motivated by personal concerns, like preserving a good referral source (as opposed to being based on the goal of avoiding harm to the client’s case).  A personal interest plus risk of adverse effect on professional judgment could raise a duty to withdraw.

Further thoughts …

Instead of the facts posed by the inquiry to the Committee, what if the case is already over, and then you become aware of some error by co-counsel — but the trial outcome was favorable, notwithstanding the mistake?  The Committee didn’t consider that possible scenario, but it raises some further questions.  For instance, even if the result was an award to the client, is it possible that the award would have been larger absent the error?  How far do you have to go to decide such a question?

Even with these open questions, one thing is clear from this recent ethics opinion:  at least sometimes, co-counseling a case can result in a duty to have a difficult conversation with your client, and you should keep alert and know your ethics rules if that day should come.

scientific_CloudComputing45Two New Jersey lawyers cannot avoid disciplinary charges arising from their use of a paralegal to friend a represented opposing party on Facebook, the state supreme court ruled recently.

We’ve written before about the perils of using Facebook to obtain information about opposing parties or to communicate with them.  This latest example involves a twist of particular interest to legal ethics wonks like me, because it also spotlights the issue of how disciplinary power is allocated between local and state ethics regulators.

“Will you be my friend?”

The two lawyers represented governmental defendants against the claims of a plaintiff injured after being hit by a police car.  The lawyers directed their paralegal to search the Internet to obtain information about the plaintiff, and in response, she accessed his Facebook page.  Initially, the page was open to all, but later, the plaintiff changed his privacy settings to limit access to “friends.”

It is alleged that the two lawyers then instructed the paralegal to access and continue to monitor the non-public parts of the plaintiff’s Facebook account.  In response, she submitted a friend request to the plaintiff — but she did not reveal that she worked for the law firm representing the defendants in the case, or that she was investigating him as part of the case.

The plaintiff — who was represented by counsel — accepted the friend request, and so the paralegal was able to get information from the non-public parts of his account.

The plaintiff learned about the lawyers’ actions after they sought to add the paralegal as a trial witness and produced printouts from the plaintiff’s Facebook page and his friends’ pages.  He filed a grievance with the local New Jersey District Ethics Committee, asserting that contacting him through Facebook without going through his own attorney constituted an ethical violation.

The local committee, however, declined to docket the grievance; the committee advised the plaintiff that the allegations, if proven, would not be a violation of the New Jersey Rules of Professional Conduct.

Who’s in charge?

But that was not the end of the matter.

The plaintiff’s lawyer filed a grievance directly with the state-level disciplinary body, the Office of Attorney Ethics, which, in New Jersey’s disciplinary system, has parallel jurisdiction.  The director investigated and filed a complaint against the lawyers alleging violation of numerous rules, including New Jersey’s versions of Model Rule 4.2 (communicating with a person represented by counsel); Model Rule 5.3 (failure to supervise a non-lawyer assistant); Model Rule 8.4(a) (violating the ethics rules by inducing another person to violate them); and Model Rule 8.4(c) (conduct involving dishonesty, fraud, deceit and misrepresentation).

The lawyers denied any violations — including asserting that they acted in good faith and were “unfamiliar with the different privacy settings on Facebook.”  Later, they asked the OAE to withdraw the complaint, arguing that procedurally, the state-level OAE could not proceed against them after the local-level district committee had declined to do so.  The OAE would not withdraw the complaint.

State supreme court:  “You’re on the hook”

That sent the case out of the disciplinary system and into the state court system, eventually ending up in the state supreme court.  On April 19, the court ruled that under New Jersey’s “robust disciplinary system,” the action of the local committee in declining the grievance would not “close off further inquiry” at the state level if the grievance presented “an important, novel issue as to which there is little guidance,” or if the allegations involved “egregious, unethical conduct.”

Bottom line:  The two lawyers will have face the ethics charges against them, notwithstanding the pass they got the first time around at the local level.  (Be aware that your own jurisdiction may have disciplinary procedures that are quite different from New Jersey’s.)  Stay tuned — and in the meantime, be very careful when using social media to investigate litigants.  Several jurisdictions have ethics opinions that point to the pitfalls, and provide specific guidance on how to stay out of trouble when doing so.  The New York State Bar Association guide to social media ethics issues, published last year, collects many of the significant opinions.

Unpaid internshipsIn today’s soft legal services market, some aspiring members of the profession feel pressure to work for free, but the fairness of such arrangements in general has come under scrutiny.  In a twist (and just in time for the summer crop of interns), the New York State Bar Association earlier this month said that law firms can bill clients for services provided by unpaid legal interns, as long as the amount is not excessive, and the internship program complies with applicable law.  If charged to clients as an expense, the law firm can build in its overhead costs, such as for supervising the intern, the Committee on Professional Ethics said in its Opinion 1090.

U.S. DOL standards judicially rejected

Last summer, the Second Circuit refused to apply U.S. Department of Labor standards barring employers from deriving immediate economic advantage from unpaid interns, in favor of a non-exhaustive set of considerations that focus on what the intern receives in exchange for the work.  The ruling overturned the grant of class certification in a wage case against Fox Entertainment.  The Second Circuit also upheld a trial court denial of class certification in another intern wage case against Hearst Corp.

Many law schools place students with private-sector employers who do not pay them; but the interns do benefit in some cases by getting academic credit.  Whether and how clients can be billed for the work of such credit-earning interns was the subject of a law firm inquiry.

Billing intern work as fees vs. expenses

In response to the inquiry, the NYSBA ethics committee said that there was nothing in the state’s ethics rules that would prohibit a law firm from billing clients for the services of a law student-intern on either a fee basis or as an expense to the firm, even if the firm didn’t pay the intern or the law school.

The state’s version of Model Rule 1.5(b) mandates communicating to the client “the basis or rate of the fee and expenses,” and under Rule 1.5(a), as interpreted by previous opinions, neither the fee nor any expenses may be “excessive” — defined as one where a “reasonable lawyer would be left with a definite and firm conviction” that it is too much.  Nothing in the opinion appears to require the firm to inform the client that although the intern receives academic credit, the firm is not compensating the intern.

While the firm could bill the student’s work to the client as legal fees (by the hour or per task, for instance), the committee also approved the possibility of billing the work as an expense instead.  In that case, the committee said, “the lawyer may charge the client ‘either … an amount to which the client has agreed in advance or … an amount that reflects the cost incurred by the lawyer’ to sponsor the intern (e.g., the cost of supervising the intern).”

In other words, although the law firm does not have any direct costs in connection with using an unpaid intern, it does incur overhead costs, and may peg the expense value of the  intern’s work to include those costs to the firm.

ABA opinions on billing

The NYSBA’s opinion tracks the ABA’s 1993 opinion on billing issues.  There, the ABA ethics committee said that in the absence of disclosure, it is improper to mark up expenses such as taxis and meals charged to the client unless the lawyer herself has incurred additional expenses beyond the actual cost of the disbursement item.  Later, in 2000, the ABA’s committee expanded the same principles to cover the work of temporary or contract lawyers.  This most recent New York opinion continues the same line of reasoning to support using the lawyer’s overhead cost to value an unpaid intern’s work when it is charged to the client as an expense.

The social justice aspect of using unpaid interns is hotly debated; but at least in New York, lawyers and firms have some guidance about the rules of the road in billing clients.

OopsWhat’s ethical may nonetheless not be a best practice — timely advice from the ethics committee of the New York State Bar Association, which weighed in recently with an ethics opinion on the practice of blind copying your client on e-mails you send to opposing counsel.

The inquiry to the NYSBA’s Committee on Professional Ethics arose because the inquirer’s opposing counsel apparently objected to the inquirer bcc-ing the client on e-mails that the two lawyers were exchanging.

Is a bcc “deceptive”?

The ethics committee noted that lawyers are required by the state’s version of Model Rule 1.4 to communicate regularly with the client, and to keep the client reasonably informed.

Against that imperative, the committee considered whether using a bcc as a handy way to keep the client informed was somehow “deceptive” within the meaning of New York’s version of Model Rule 8.4(c), which prohibits “conduct involving dishonesty, fraud, deceit or misrepresentation.”  The committee concluded that because the lawyer is the client’s agent, it is not deceptive for a lawyer to send to her own client copies of correspondence with opposing counsel, and opposing counsel may not reasonably assume that the lawyer will not share communications with her own principal, the client.

Therefore, bcc’s are allowed even over the objection of opposing counsel, the committee said.

And, the committee said, there are good reasons not to copy the client on an e-mail that is directed to opposing counsel — which might at first suggest that a bcc is the way to go.  First, a cc would reflect the client’s e-mail address, which the client may not wish to provide to opposing counsel.  A cc may also appear to invite opposing counsel to communicate directly with the client — although it would be improper for opposing counsel to do so.  (Model Rule 4.2 bars communication with a represented party, and comment [3] advises that the bar applies even when the represented party initiates or consents to the communication.)

Danger — “Reply All”

So, bcc-ing your client on e-mails you send to opposing counsel is not unethical, and it seems preferable to using a cc.  But not so fast.  The committee also said that there are reasons not to use either cc or bcc when copying e-mails to the client — namely the dreaded “Reply All.”  Inadvertent use of the Reply All button has created embarrassment (and worse) many times.  If you google “Reply All embarrassments” you will get hundreds of hits with titles like “Nine reply-all e-mail disasters,” and “Reply-all horror stories:  the button everyone loves to hate.”

For lawyers, the stakes are, of course, even higher.  As the committee pointed out, “if the enquirer and opposing counsel are communicating about a possible settlement of litigation, the inquirer bccs his or her client, and the client hits “reply all” when commenting on the proposal, the client may inadvertently disclose to opposing counsel confidential information otherwise protected by Rule 1.6.”

Bottom line:  the committee advised that you can bcc your client on e-mail to opposing counsel even over opposing counsel’s objection — but there are good reasons to take the extra step to forward that correspondence to the client later, and to stay off of that bcc button.

 

3d people - person talkingWe’ve mentioned before that some courts look with disfavor on lawyers helping pro se litigants by ghostwriting briefs for them to file as their own.  Some opinions discussing the issue frame the conduct as lawyer deceit, as misrepresentation, or even as potential contempt of court.  In a related twist, the ABA ethics committee has recently tried to issue some advice for the lawyer on the other side of the case.

Limited scope quandary

In Opinion 472, the committee addressed the obligations of a lawyer under Model Rule 4.2 (Communicating with Persons Represented by Counsel) and Model Rule 4.3 (Dealing with Unrepresented Person) when a pro se litigant is receiving limited-scope representation, a form of practice permitted under Model Rule 1.2(c).  What do you do if a pro se litigant is on the other side of a case from your client, and you have reason to believe that the party has gotten some assistance from a lawyer — in writing the most recent brief, for instance.  Can you contact that pro se party directly and communicate with him or her?  Or is the party “represented,” requiring you to go through the lawyer?

As is commonly known, Rule 4.2 (the “no-contact” rule) says that if you “know” that a person is represented by another lawyer in a matter, you may not communicate  about the subject of the representation with that person without the other lawyer’s consent.  “Knowledge” can be inferred from the circumstances.

In its opinion, the committee noted the “quandary” for the lawyer on the other side of a matter where a supposedly pro se party appears to be getting or to have gotten some limited legal assistance; the committee acknowledged that the situation doesn’t fit naturally into either the traditional full-matter representation contemplated under Rule 4.2’s no-contact rule or the wholly-pro se rubric of Rule 4.3, where the lawyer can, within limits, talk to the opposing party.

“Rules of Reason”

But the Model Rules are “rules of reason,” said the committee, to be interpreted with “reference to the purposes of legal representation and the law itself.”

Therefore, the committee recommended that when a lawyer sees indications that the person has received some degree of legal assistance on a case, that the lawyer inquire whether the person is in fact represented by counsel.  Such indications include briefs that appear ghostwritten.  (Parenthetically, in 2007 the ABA’s committee said in passing that ghostwriting a brief for a client does not violate ethics rules, differing from the position taken by some courts.  See Formal Op. 07-447 (subs. req.).)

The committee acknowledged that Rule 4.2 does not include a duty to ask whether a person is represented by counsel.  But the committee noted that you cannot evade the no-contact rule by “closing [your] eyes to the obvious.”  Therefore, said the committee, if you suspect a ghostwritten brief, you have to ask.

If the person “indicates that yes, a lawyer drafted documents, but is not providing any other representation,” the committee said that suggests that “the representation has concluded,” and you can talk to the person:  “On aspects of the matter for which representation has been completed and the lawyer who provided limited-scope services is not expected to reemerge to represent the client, a lawyer may communicate directly with the other person.”  But if not, and presumably if the situation is ambiguous, you have to reach out to the “pro se” party’s lawyer.

Whose burden?

I agree with commentator Brian Faughn that the opinion is not very helpful in shedding light in this murky area, and the burden (though it is a light one) seems to be put on the wrong participant.  Why should the opposing lawyer have to inquire about the scope of the representation?  If a litigant makes an informed choice to proceed with a limited-scope representation (and Rule 1.2 indeed calls for informed consent), doesn’t that include the possibility that the litigant will have to deal with opposing counsel on his or her own?  For purposes of the no-contact rule, shouldn’t you be entitled to rely on the fact that no lawyer has entered an appearance on the other side?

ABA formal opinions are advisory, of course, and you should also consider the case law and ethics rules in your own jurisdiction as you attempt to navigate these waters.  But this opinion’s “rule of reason” seems somewhat off-base.