You might remember our report last year on the Florida judge who resigned after accepting Tampa Bay Rays baseball tickets from lawyers who had a pending case before him.

The lawyers were representing plaintiff in a slip-and-fall case against Wal-Mart.  The day after the jury came back with a defense verdict, one of the lawyers called the judge’s assistant and offered the judge tickets to that night’s Rays game against the Boston Red Sox.  The judge accepted five tickets (for great seats, if that makes a difference).

The judge asked for more tickets to a game against the Twins — four days after hearing the lawyers’ motion on behalf of the plaintiff to set aside the jury verdict.  The firm complied; this time, one of the lawyers delivered the tickets in open court.

The judge granted the plaintiff’s motion to set aside the verdict, and granted a new trial.  The judge resigned ahead of a disciplinary hearing on his conduct.

What about the lawyers?

At the time, I wondered about the lawyers, pointing to Model Rule 3.5(a) (barring lawyers from seeking to influence judges by means prohibited by law) and Model Rule 8.4(f) (knowingly assisting judge in conduct that violates rules of judicial conduct or other law).

Sure enough, a referee last week recommended that each lawyer receive an admonishment and a year’s probation for his misconduct — and be required to speak at CLE’s for new lawyers and veteran lawyers about the incident.  Each was also ordered to pay almost $5,400 in costs. The recommendation now goes to the Florida Supreme Court for review.

“It never crossed my mind…”

At the disciplinary hearing, one of the lawyers said that in offering the tickets, he thought they were doing something nice for the judge because the trial had been contentious.  They had seen the judge wearing a Red Sox cap, and knew it was his favorite team.

The other lawyer testified that “It never crossed my mind …  how bad it looked and how improper it was … it should have, but it didn’t.”  He said he had no intent to influence the judge, and it never occurred to him that the judge might be influenced by the tickets.

The lawyers each had more than 30 years of experience.  They testified that their firm’s policy now prohibits offering baseball tickets to anyone at the courthouse.

The referee recommended that the lawyers be found guilty of violating Florida’s versions of Model Rule 3.5(a) (so I called that one).  The other violations found were Rule 8.4(d) (conduct prejudicial to the administration of justice); Rule 8.4(a) (violating a Rule or assisting another to do so); and a rule unique to Florida, Rule 3-4.3 (commission of any act that is unlawful or contrary to honesty and justice).

Paved with good intentions

The referee did not find that the lawyers “acted with any corrupt intent to create a quid pro quo situation.”  But they should have known that their gift would create an appearance of attempting to influence the judge presiding over their case.  “The rules require the profession, both attorneys and judges, always to think about the implications of their words or actions. That these two attorneys … were so thoughtless and oblivious here is unacceptable.”

The referee based the recommendation for an admonishment and probation on several mitigating factors:  the absence of actual prejudice to the defendants in the underlying case (the grant of the motion for new trial was set aside on appeal, although not because of the tickets); the lawyers’ remorse and acknowledgment of their misconduct; and evidence of their good character and their “many public service and charitable works.”

Lessons learned

What are the lessons here?  Giving gifts is nice, but you shouldn’t step into the batter’s box when the umpire is the judge on your case.  An admonishment and probation, while the lightest forms of discipline in Florida, are nothing to welcome.  And, as we’ve mentioned before, if you are caught in a rundown, taking responsibility for misconduct is certainly the way to go.

We’ve written before about what you can and cannot say when withdrawing from representation.  Now a Texas bar ethics opinion adds a twist:  what can you tell an insurance company that retains you to represent its insured, when the client won’t cooperate?

Lonely in the Lone Star state

A Texas lawyer had a quandary.  An insurer had assigned Lawyer to defend its insured in a state court personal injury action arising out of a car accident.  For a while, the client cooperated.  Then — radio silence.  Lawyer tried contacting the client by various means, including having an investigator track the client down to ask him to contact Lawyer.

The client’s non-cooperation made it difficult or impossible to defend the suit, and exposed Lawyer to sanctions for not answering discovery requests.  Lawyer also realized that the client’s failure to communicate might violate the cooperation provision of the insurance policy, and result in the insurer withdrawing coverage.

Lawyer’s investigator finally delivered a letter to the client, warning that Lawyer would move to withdraw if the client didn’t contact Lawyer.  Receiving no response, Lawyer prepared to withdraw, and asked for guidance on what he could disclose to the insurance company  about the reasons for withdrawing.

Silence is golden

You can’t say much, answered the state bar ethics committee.  “At a minimum,” the committee said, the client’s “failure to communicate with Lawyer is unprivileged client information.”  Under the state’s version of Model Rule 1.6, that meant that it was confidential information that Lawyer could not disclose to third parties or use to the disadvantage of the client, including in the context of withdrawing from the representation.

No exception to the general confidentiality rule applied here, noted the committee.  For instance, like the Model Rule, the Texas rule allows lawyers to disclose confidential client information in order to carry out the representation.  It’s sensible to regard that kind of disclosure as always being impliedly authorized, because otherwise, we could not negotiate with opposing counsel, for instance.  But the disclosure here would not be for the purpose of representing the client, the committee said — rather, it would be for the purpose of ending the representation.

Therefore, in withdrawing, the Lawyer was advised not to reveal the client’s failure to communicate in order to explain either to the insurance company or the court the reason for Lawyer’s withdrawal.

The committee cited the  ABA Ethics Committee’s 2016 Opinion 476, which considered what you can say to the court when withdrawing for non-payment, and which, like the Texas opinion, advises that the information is within the scope of your confidentiality duty to the client.

Take home lessons

  • Bear in mind that even the most difficult client is still your client; the Texas opinion points out that there’s no free ethics pass even when the client stops communicating with you.
  • And in the insurance defense context, the insured is a client for ethics purposes, despite the fact that the insurance company has assigned the case to you and is paying your fees.

If you believe that you may have materially erred in a current client’s representation, your duty of communication under Rule 1.4 requires you to inform the client.

That’s the unsurprising conclusion that the ABA’s Standing Committee on Ethics and Professional Responsibility reached in its latest opinion, issued April 17.

Of note, though, is that the Committee firmly concluded that no similar duty applies to former clients. Also interesting is the excursion into substantive law that the Committee takes in order to delineate when a current client becomes a former client.

What we have here is a duty to communicate…

Even if you’ve only seen the Paul Newman classic Cool Hand Luke on YouTube clips, you know the classic line about communication. Not failing to communicate is important whether you’re on a chain gang or just working hard for your client.

As the ABA Committee said in the opinion, unfortunately, “even the best lawyers may err in the course of clients’ representations,” and if material, you have to ‘fess up to the client. “An error is material if a disinterested lawyer would conclude that it is (a) reasonably likely to harm or prejudice a client; or (b) of such a nature that it would reasonably cause a client to consider terminating the representation even in the absence of harm or prejudice.”

The Committee identified several parts of Rule 1.4 that potentially apply where a lawyer may have erred in the course of a current client’s representation:

  • the duty to reasonably consult with the client about how the clients objectives are to be accomplished;
  • the duty to keep a client reasonably informed about the matter;
  • the duty to comply with reasonable requests for information; and
  • the duty to explain a matter so that the client can make informed decisions about the representation.

Errors exist along a continuum, the Committee said, ranging from errors like missing a statute of limitations, which can undermine the client’s objective, to minor typographical errors, or missing a deadline that only causes delay.
It’s not only errors that could support “a colorable legal malpractice claim” that must be communicated – because an error can “impair a client’s representation even if the client will never be able to prove all the elements of malpractice.”

Rather, the measure of the obligation to disclose errors to current clients is the materiality of the error.

But not to former clients

Significantly, “nowhere does Rule 1.4 impose on lawyers a duty to communicate with former clients.” That led the Committee to conclude that although a lawyer must inform a current client of a material error, there is no similar duty to former clients.

But how do you distinguish between current and former clients? For instance, if you represent a client only “episodically,” is the client a “current client” in between times?

Interestingly, the Model Rules themselves, and their state analogs, decline to touch those issues; rather, in order to determine whether a lawyer-client relationship exists, a lawyer must consult “principles of substantive law external to these Rules,” says section 17 of the Scope section.

The Committee, however, was not reluctant to deal with substantive law principles, and undertook a case analysis, concluding that “if a lawyer represents a client in more than one matter, the client is a current client if any of those matters is active or open,” and that the “episodic” client’s reasonable expectations guide whether it is a current or former client.

Calling all gurus

Once you’ve determined that you have a duty to communicate with a current client about a material error you’ve made, or even during the process of that decision, you are going to want to get some expert ethics advice. In its opinion, the Committee points to the confidentiality exception that Rule 1.6(b)(4) extends, permitting a lawyer to reveal client confidential information to get legal advice about complying with the Rules.

We’ve also written before about the trend toward upholding the in-house firm counsel privilege, which can allow that type of advice to fall within the attorney-client privilege.

In any event, this is an area where it pays to tread carefully, in order to maintain the rights of both lawyers and clients.

Early last year, the federal Northern District of California became the first court to require — by rule — that a party receiving outside litigation funding must disclose the arrangement.  As we described, the rule is limited to class actions; it had been favored by the U.S. Chamber of Commerce, which views it as promoting needed transparency.

Now comes the first statute on the subject, Act 235, which passed in a narrow vote by the Wisconsin state legislature, and was signed into law on April 3.

“Forward” for the Badger State?

The U.S. Chamber’s Institute for Legal Reform had lobbied in support of the Wisconsin bill, and said on its website that its passage lived up to the state’s motto — “Forward” — by “bring[ing] litigation funding out of the shadows.”

The statute requires a party to disclose “any agreement under which any person … has a right to receive compensation that is contingent on and sourced from any proceeds of the civil action, by settlement, judgment or otherwise.”  It exempts lawyer-client contingency fee agreements, and only applies to actions filed in Wisconsin state courts.

Burford Capital, one of the largest of the U.S. commercial litigation funders, downplayed the significance of the Wisconsin law.  As reported by the ABA Journal, Burford’s chief marketing officer said that the statute overreached in applying to commercial litigation finance as well as consumer finance, and predicted a backlash from businesses.  Proponents of funding also point to a possible Pandora’s box of discovery disputes that will be opened with increasing regulation.

But you can’t invest in your cake and eat it, too…

Whether the new Wisconsin statute will be the first of many remains to be seen.  Another unknown, as we’ve discussed before, is how courts will deal with the doctrines of champerty and maintenance that have historically placed limits on the ability of third parties to fund suits.

But in another litigation-funding development, the New York State Bar Association last month decided that neither a lawyer nor the lawyer’s firm can represent a client in an action funded by a litigation finance company in which the lawyer is an investor.

In Opinion 1145, the NYSBA’s ethics committee said that doing so raised an unwaivable conflict of interest that couldn’t be remedied by the client’s informed consent.  New York’s version of Model Rule 1.8(e) bars a lawyer from providing “financial assistance to a client in connection with pending or contemplated litigation,” subject to limited exceptions for advances covering court costs and expenses, and indigent clients.  The committee said that even though the lawyer wouldn’t be the only investor in the funding company, the “reality [is] that money from the [lawyer] would be paid as financial assistance to the … client.”

And representing a client funded through the company the lawyer invests in would also violate New York’s version of Model Rule 1.8(i), which prohibits acquiring a “proprietary interest” in a client’s claim, the committee ruled.  By providing money to the client in exchange for a percentage of the prospective recovery, the funding company would acquire such an interest, and the lawyer would also do so, as a part owner of the company.

There is no provision for waiving these prohibitions, said the committee, and they are imputed to the investing lawyer’s whole firm.

Still trending

Third-party funding remains a hot topic, and we predict that there will be further developments, on all fronts — legislative, case-law, and regulatory.  (The U.S. Chamber is one of more than two dozen organizations that last summer asked the federal courts’ Rules Committee to consider amending the Rules of Civil Procedure to require disclosure of third-party funding arrangements.)   We’ll continue to keep you posted, so check back often.

In a warning to semi-retired lawyers and others, the Sixth Circuit Court of Appeals earlier this month affirmed a 90-day suspension for a lawyer who let others draft and sign his name to deficient  pleadings, saying that “a lawyer’s good name and professional reputation are his primary stock in trade, an asset to be cultivated and safeguarded throughout his career — even after ceasing the active practice of law.”

“One size fits all” briefs

The case started out in a Michigan district court, which found that briefs filed under the lawyer’s name from 2012-2015 in multiple social security benefits cases were “woefully deficient both as to the quality of the briefs and the management and monitoring of the appeal process on behalf of clients.”  The briefs sometimes had little to do with the facts of the particular case in which they were filed; the district court hearing panel, in its opinion, called them “one size fits all” briefs.

The panel found that in the process of retiring from the firm in which he was a senior partner, and withdrawing from actively practicing, the lawyer authorized his firm for a period of some years to continue submitting district court filings in his name in numerous social security benefits appeals as though he were attorney of record.  But he didn’t review these filings, or supervise the lawyers who actually prepared them.  Rather, his participation was simply a “façade” to help the firm.  (In fact, said the panel, the firm’s social security practice was essentially run by a secretary.)

The panel described how once a brief was filed in the district court, no further work would be done on a social security appeal.  Neither the lawyer whose name was used nor any other lawyer at the firm saw the opposing party’s brief, no lawyer submitted any type of response, and none ever saw a report and recommendation or a final decision.

In this process, the clients obviously got short shrift.  The panel described at least one of them as having been “abandoned.”

Duty to supervise, duty of candor

In its panel opinion, the district court said that the lawyer violated Michigan’s versions of Model Rule 5.1 (duty to supervise subordinate lawyers) by not supervising preparation of briefs that were submitted using his signature and his filing credentials; and Rule 3.3 (candor to the tribunal), by authorizing submission of briefs bearing his name – thus falsely representing that he had reviewed or monitored their preparation.

The district court panel recommended a 90-day suspension; as one of the aggravating factors, the panel noted that the lawyer had a “selfish motive” in lending his name to the appeals, since it helped keep the firm profitable, and his retirement benefits flowing.

The Sixth Circuit adopted the panel’s findings and recommendations.  It wrote that “this case presents a sad example of a decent lawyer, who in the autumn of a successful career, became careless in permitting the use of his name for improper purposes and needlessly brought dishonor to himself, his firm, the profession and the justice system.”

Takeaways…

First, whether you’re winding down your practice or in your prime, it’s clearly risky to let anyone use your name to sign court filings you don’t have control over, even if it’s someone at your firm.

Second, and maybe not so well-known, is that your state’s disciplinary authority is not the only body that can mete out professional discipline.  The federal district courts have inherent power to regulate the conduct of the lawyers who appear before them; they usually have their own disciplinary procedures laid out in their local rules; and by local rule, the district court usually adopts the lawyer conduct rules of the jurisdiction as the ones that govern.

And last, the lawyer here came under extra criticism for his “continuing resistance to this disciplinary action and stubborn refusal to acknowledge his leading role in the failings.”  If you  ever find yourself in the disciplinary cross-hairs, don’t do that — it will seldom help your cause.

We’ve written before about the breadth of the duty of confidentiality we owe to our clients, and how it even extends to matters that you think are safe to discuss because they are of “public record.”   (See here and here.)  Now comes the ABA’s latest on the subject of lawyer “public commentary” — Formal Opinion 480 (Mar. 6, 2018).  And it prompts us to be wary of a couple pitfalls when it comes to what we say about clients in online articles, on twitter, at webinars, in podcasts and through traditional print publications — all of which the opinion refers to as “public commentary.”

Duty “extends generally”

All such public commentary, the ABA reminds us, whether on-line or not, must comply with the relevant jurisdiction’s version of Model Rule 1.6.  The rule requires us to maintain the confidentiality of all information relating to the representation of a client, unless that client has given informed consent to the disclosure, the disclosure is impliedly authorized to carry out the representation, or the disclosure is permitted by a specific exception in Rule 1.6(b).

The confidentiality rule, as is frequently said, is much broader than the attorney-client privilege, and includes all information relating to the representation, whatever its source.  Even the identity of the client is usually deemed to be confidential information, the ABA ethics committee notes in this newest, foot-note-heavy opinion.  And, adds the committee, it’s highly unlikely that a disclosure exception (except for consent) would apply when a lawyer engages in this sort of public commentary.

Don’t hype the hypo

That brings us to “hypotheticals.”  We all use them — from law profs in class, to lawyers seeking informal practical advice from colleagues at other firms, to gurus of various stripes who use real-life examples at legal CLE seminars.  But, says the ABA committee, beware:  “A violation of Rule 1.6(a) is not avoided by describing public commentary as a ‘hypothetical,’ if there is a reasonable likelihood that a third party may ascertain the identity or situation of the client from the facts.”

For example, in a widely-reported case mentioned in the ABA opinion, an Illinois lawyer got a 60-day suspension in her home jurisdiction for violating  Rule 1.6, when she blogged about her criminal defense clients using either their first names, a derivation of their first names, or their jail ID number.  Reciprocal discipline was imposed in Wisconsin.

In light of the ABA opinion, you’re going to want to make sure that any real-life client situations you describe in  public commentary is so thoroughly disguised that no one can tell that it’s real.  If you’re using social media to educate and engage, there’s arguable benefit in discussing actual situations in a hypothetical way, while being sure to scrub the real facts out.  But as we’ve said before, if you’re just making cocktail party chit-chat, why even go there?  It’s not worth the risk of divulging confidential client information.

Trial publicity statements

The ABA opinion also briefly notes the constraints that Model Rule 3.5 puts on using public commentary to influence the court of public opinion.  The rule prohibits a lawyer from seeking to influence a judge, juror, prospective juror, or other official by means prohibited by law, and cites the case of a Louisiana lawyer disbarred for, among other things, using an internet petition campaign to contest the rulings of a judge presiding over a custody dispute involving her client.  That kind of conduct can also obviously lead to trouble.

All in all, the new opinion is a straightforward application of Rule 1.6 to this age of public commentary; but it is a good wake-up call for those who need one.

One of Bill Cosby’s accusers can continue with her defamation suit, the California state court of appeals said in an opinion late last year, holding that the trial court erred when it used the state’s anti-SLAPP law to partially strike Janice Dickinson’s complaint against the entertainer. Dickinson had based one of her claims on statements reacting to Dickinson’s claims that Cosby’s lawyers made in letters to media outlets.

The case could be a caution flag – at least under California law – for lawyers who label accusations against their clients as “lies.”

“Fabricated” and “an outrageous … lie”

Immediately after Dickinson went public on Entertainment Tonight with her claims that Cosby drugged and raped her in 1982, Cosby’s lawyer, Martin Singer, sent demand letters to Good Morning America and several other media outlets calling her assertions “fabricated and … an outrageous defamatory lie,” and explicitly threatening to sue them if they disseminated Dickinson’s claims further. The next day, Singer also issued a press release calling Dickinson’s accusations against Cosby “a lie.”

Dickinson sued for defamation based on the statements in the demand letter and the press release; Cosby responded with a motion to strike the complaint, under California’s anti-SLAPP law.

The trial court issued a divided opinion. It found the statements in the demand letter to be protected by the absolute litigation privilege; but the trial court rejected Cosby’s argument that the press release statements merely expressed a protected opinion, and held that Dickinson had shown a probability of prevailing on her defamation claim as to the press release. Both sides appealed.

The state court of appeals unanimously agreed that the trial court had gotten it right as to the press release, but reversed as to the demand letter, holding that the litigation privilege did not shield Singer’s statements on behalf of Cosby.

Litigation privileged?

California law, like that in other jurisdictions, extends an absolute privilege to statements made in connection with judicial proceedings. (California’s privilege is codified here.) The privilege is broad, and includes pre-litigation statements made in furtherance of the objects of the litigation.

A demand letter can qualify for the litigation privilege — but only when it relates “to litigation that is contemplated in good faith and [is] under serious consideration.” “Even a threat to commence litigation will be insufficient to trigger application of the privilege if it is actually made as a means of inducing settlement of a claim, and not in good faith contemplation of a lawsuit,” noted the court of appeals, citing a key 2007 state supreme court case.

Here, the court of appeals said, the letter was sent only to media outlets that had not yet run the story of Dickinson’s rape accusations, but indicated that they planned to; and when some of the news outlets ignored the demand letter and ran the story anyway, Cosby never followed through on the litigation threat in Singer’s demand letter, and never sued.

The court ruled that this evidence supported a prima facie inference that the demand letter was sent without good faith contemplation of seriously-considered litigation; rather, said the court of appeals, the letter “was a bluff intended to frighten the media outlets into silence (at a time when they could still be silenced), but with no intention to go through with the threat of litigation if they were uncowed.” Thus, the letters were merely “hollow threats of litigation” that did not qualify for the absolute litigation privilege.

Results may vary

The court of appeals noted and rejected the applicability of federal court decisions arising out of other claims against Cosby, including other statements that Singer made on his behalf; those cases were decided under Michigan and Pennsylvania law.

The point that the outcome in a defamation case is extremely dependent on particular state-law wrinkles is important. California’s strong authority on the litigation privilege and especially the high bar for showing that pre-litigation communications are serious threats of litigation, not settlement “bluffs,” spelled the difference here.

The law in your own jurisdiction may differ. In my home state of Ohio, for instance, similar authority appears lacking. But for cases under California law, the Dickinson ruling is instructive on the limits on privilege when it comes to calling the other side a liar.

The concept of “unbundled” legal services is laid out in Model Rule 1.2(c), which provides that lawyers may limit the scope of their representation in reasonable ways, if the client gives informed consent.  The rule opens the way to representing a client as to one phase of a matter, or as to certain issues or tasks.

A New York appellate ruling last month, however, demonstrates that an intended limited-scope arrangement can come back to bite you if you’re not careful to lay out in detail — in writing — what you are and are not going to undertake, and the client’s express buy-in to the plan.

Negligence?  Or thrift?   

The January 11 opinion of New York’s First Department reverses the grant of summary judgment in favor of the client on its malpractice claim, and gives the law firm a chance to prove at trial that client thriftiness — and not sloppy lawyering — was the cause of the client’s alleged $85 million loss on a soured loan transaction.

The plaintiff, a venture capital fund, hired the firm to document loans that the fund was making to a third party borrower.  The loans, totaling about $4.5 million, were to enable the third party to finance the purchase of several portfolios of life insurance policies,  secured by the policies themselves, with a face value of $84 million.  But the fund’s security interests in some of the loans were never perfected, because collateral assignment forms weren’t filed with the insurance carriers for the policies.  The borrower defaulted on the loans, defaulted on a subsequent settlement, and was uncollectible.  The underwriting insurers refused to pay proceeds of the collateral to the fund, because they had no records that the collateral had been assigned.

The question was, Whose fault was the slip-up?  The fund pointed at the lawyers, saying that filing the collateral forms was the firm’s responsibility.  It sued for legal malpractice, eventually moving for summary judgment on liability.

In the trial court, the law firm argued that it was not responsible for filing the collateral forms — that the fund expressly limited the scope of the representation as a cost-saving strategy, and further habitually minimized the role of outside counsel to “minimize legal spend.”  The firm said that it was retained only to draft the loan documents, and that the limited representation was at the client’s express instruction.

Significantly, there was no retention letter documenting the engagement or its scope.  The trial court granted judgment in favor of the fund.

Let’s have some paper with that….

This has a happy ending for the law firm — at least for now.  The reviewing court noted New York’s version of Model Rule 1.2(c), and said that if the firm “wanted to limit the scope of its representation, it had a duty to ensure that [the client] understood the limits.”  But the appellate division nonetheless reversed the summary judgment, holding that there were enough factual issues to justify trial — raised by warring e-mails between the client and the law firm, some of which suggested that the fund was looking to the firm to perfect its security interests, and some of which showed the contrary.

One fact that stands out, though, is the absence of an engagement letter that would have defined the scope of the representation and reflected the client’s assent.  That could have protected the law firm here.  As it is, despite beating summary judgment, the firm could still be at risk for an adverse trial verdict, absent some settlement.

Don’t be like the shoemaker’s children.  We would always counsel our clients to “get it in writing.”  When providing limited scope representation, the case for doing so is compelling.

In the ethics class that I teach as an adjunct law prof, I refer to Model Rule 8.4(c) as “The Four Horsemen of the Apocalypse,” because of the four things the rule prohibits:  dishonesty, fraud, deceit and misrepresentation.

While these ethical no-no’s are certainly not equivalent to the biblical “four horsemen” (Death, Famine, War and Conquest), violating Rule 8.4(c) can have a bad (if not apocalyptic) effect on your law license, as lawyers in Rhode Island and Oklahoma recently discovered in two separate disciplinary cases — each involving false documents.

False deeds = misdeed

In the Rhode Island case, the lawyer was counsel to a homeowner association that managed a timeshare development.  If a time-share owner failed to pay annual maintenance fees, the association could foreclose on the delinquent party’s interest in the property, and the lawyer regularly represented the client in these foreclosure proceedings.

The foreclosure process involved preparing a deed for execution by the client’s authorized officer.  The signature was to be witnessed by a notary public; after being properly executed, the foreclosure deed was recorded.

To expedite the process, the lawyer began signing the client’s president’s name on the foreclosure deeds, and then acting as the notary witness to the false signature.  The lawyer then caused the falsely-executed documents to be recorded.

After these actions came to light during unrelated litigation, the lawyer self-reported to the state disciplinary authority, and the supreme court issued its opinion publically reprimanding the lawyer for violating the state’s version of Model Rule 4.1 (truthfulness in statements to others) and Rule 8.4 — the four horsemen.  (The relatively light penalty stemmed from the lawyer’s “lengthy unblemished history” and “heartfelt remorse.”)

If you are like most lawyers, you’re a notary; and maybe you think that you’d never falsely sign or notarize a document.  But it’s possible that the lawyer’s actions here were aimed at not bothering the client’s executive officers.  And imagined or real pressure to avoid inconveniencing clients can tend to disorient even the best lawyer’s ethical compass.

I get teased by relatives when I refuse to notarize car titles they present to me after they’ve signed them.  Start by resisting your relatives, and you’ll likely be able to resist any temptation to execute or notarize a document falsely!

Turning back the hands of time…

In the Oklahoma case, the grievance was filed by a county judge, who reported that the lawyer had turned back the date on the court clerk’s file stamp to make it seem that a pleading had been filed on April 15, when actually it had not been submitted until April 19.  The lawyer admitted the misconduct, and pointed to three other instances when the lawyer “may have” done the same thing.

The supreme court’s short opinion fails to explain what happened here, or the circumstances that made it possible for a lawyer to dial back a clerk’s time-stamp (not something that would be physically possible in my bailiwick).  But significantly, while disciplinary counsel and the lawyer’s counsel stipulated to a penalty consisting of a public reprimand, the trial panel rejected that proposal and recommended a six-month actual suspension, instead.

The panel observed that intentionally backdating an official court document is a serious offense deserving of more than a public reprimand.

The state supreme court agreed, adding that “such conduct is the type of dishonesty, deceit and misrepresentation while engaged in the practice of law that is forbidden” by the Sooner State’s version of Model Rule 8.4.

It’s hard to derive a moral from this case, without knowing more of the background.  But one thing is for sure:  any time you are tempted to get on any of those four horses, you should ride the other way.

The ABA is proposing changes to the Model Rules on lawyer advertising, modestly streamlining them and trying to re-establish their relevance to the way lawyers and clients interact in the digital age.  The proposed amendments and their supporting memo fail to make any express adjustment for the elephant in the room — on-line referral services like Avvo, and especially whether engaging with them involves lawyers in paying impermissible referral fees, as some recent state ethics opinions have found.

Rundown on proposed rule changes

First, an overview.  The ABA’s effort is in response to a three-year study and package of recommendations from the Association of Professional Responsibility Lawyers (which we’ve previously mentioned here).  The ABA adopted many of APRL’s recommendations.

The ABA’s memo supporting the rule changes acknowledges that “the patchwork of inconsistent state attorney advertising rules is a prime example of a system that ‘fails to make sense’ in the current climate of social media, technology, and global lawyering.”  In other words, as APRL urged, the current Model Rules are at risk of becoming irrelevant.  The ABA noted that the people who complain about lawyer advertising are predominantly other lawyers, not consumers; and few states actively monitor lawyer advertising.

The ABA’s approach, emphasizing consolidation and re-arrangement, differs from APRL’s, which had recommended slimming down the ad rules to just two, effectively excising three others.  As we’ve reported, Virginia’s revamped rules, effective this past July, take that approach.  The ABA’s proposal, in contrast, eliminates only current Rule 7.5 on firm names and letterhead (now there’s an anachronism); and it simply redistributes most of that rule’s content to the comments of other rules.

While there’s no radical surgery, the ABA proposal has some potentially helpful changes and clarifications.  Highlights:

  • “Solicitation” would be defined in a new subsection of Rule 1.0, “Terminology,” and would mean offering to provide legal services to a specific person in a particular matter.  Soliciting by “live person-to-person contact” (Skype and Facetime are specifically mentioned) would be generally prohibited — but exceptions would include if the lawyer knows the person is “an experienced user of the type of legal services involved for business matters.”  That’s potentially a big deal for business lawyers, whose potential clients would often meet that definition.  And texts, e-mail and “other written communications that recipients may easily disregard” are also excluded from the definition of live solicitation.
  • Putting a “Lawyer Advertising” disclaimer on targeted solicitations would be a thing of the past, causing gladness at firm marketing departments.  The ABA concluded “after much discussion” that such a disclaimer is no longer necessary because consumers have become used to receiving advertising material (!) and most “will not feel any compulsion to view the materials solely because they were sent by a lawyer of law firm.”
  • A new provision would permit nominal client gifts (at holidays, for instance), and clarifies that they are not barred as things of value in exchange for recommending the lawyer’s services to others.
  • It would no longer be necessary to include an “office address” on marketing communications, but only “contact information” of a responsible firm or lawyer.  The proposed change resolves an ambiguity that has created confusion, and is in line with modern day legal practice (including virtual offices), and the way that real-life ads now look.
  • The ability to claim to be a “specialist” in a practice area would be eased.  Implying that you are certified as a specialist in a particular area continues to be restricted to those certified by approved organizations.  But saying that you “specialize in” a particular field would be permitted “based on the lawyer’s experience, specialized training or education,” as long as the statement were not false or misleading.

Small change to referral fee comment

Now back to that elephant.  Recent ethics opinions — for instance, from New York and New Jersey — have specified that Avvo’s business model (and similar ones) violate state versions of Model Rule 7.2(b), which prohibits giving anything of value to a person for recommending the lawyer’s services (except for paying charges of non-profit and bar-association-approved agencies).

Under that provision, operations that are similar to Avvo Advisor and Avvo Legal Services have been found particularly problematic by state ethics boards.  As described in a recent Indiana Lawyer article, Avvo Advisor connects online consumers with a lawyer for a 15-minute consultation for $39.  Avvo forwards the fee to the lawyer and then collects a $10 marketing fee from the lawyer.  Avvo Legal Services provides fixed-fee document review, and services such as business formation or family law matters.  Avvo bills $149 to $595 for services, which is paid to the lawyer doing the work, and collects a marketing fee from the lawyer ranging from $40-$150.

The ABA proposal does not include any change to Rule 7.2(b).  It does add a section to the relevant comment, saying that “directory listings and advertisements that list lawyers by practice area, without more, do not constitute impermissible ‘recommendations.'”  That may be a small nod to Avvo, which in the past has suggested that at least in part, it merely functions as an on-line lawyer directory.

But the ABA’s small proposed change to the comment would not appear to touch on Avvo’s business of charging lawyers for obtaining referrals from Avvo, or similar business models.

Of course, the referral-fee issue is not the only ethics rule that state ethics opinions have cited when it comes to Avvo and similar on-line organizations.  As we’ve previously noted, in addition to the advertising rule on referral fees, other rules flagged include state versions of Model Rules 5.4 (independent judgment, fee-splitting); 5.5 (unauthorized practice of law); 1.15 (comingling lawyer and client funds); 1.16 (duty to refund unearned fees at end of representation); 1.5 (contingent fees); and 1.6 (confidentiality).

What comes next?

The ABA will host a public forum on the proposed amendments at its mid-year meeting in Vancouver on February 2.  Written comments on the proposed amendments are invited; the submission deadline is March 1.  The ABA Ethics Committee aims to submit a resolution and report on amending the advertising rules at the association’s August 2018 meeting.

Stay tuned for further developments.