Do lawyers need to be reminded not to lie to a federal agency?

As reported earlier this week on Law 360, the staff of the Federal Trade Commission has issued a wake-up call to lawyers who practice before the agency, warning them that intentionally misleading the Commission could lead to “public reprimands, sanctions and even disbarment” from Commission practice.

The warning came in an FTC blog post you can read here.  The blog post notes that most lawyers who come before the FTC are honest, but “for a few,” there may be “perceived opportunities to seek an advantage in the debate through misrepresentation of key facts.”  The post says that there have been instances when “internal documents expressly contradict representations made by counsel and clients during investigations,” and “where the innocent explanation” for such  inconsistencies “seemed implausible.”

The blog post details the several FTC rules, codified in the CFR, that prohibit giving false information to the Commission at any stage of any proceeding, and authorize the agency to sanction lawyers who violate the rules.

Our three take-aways from this interesting piece:

1.  DUH!

First, it is startling that lawyers apparently need a tutorial on the “duty of candor and professionalism” owed to the Commission and its staff.  In its adjudicative role, the FTC is a “tribunal” under Model Rule 1.0(m), and therefore, Model Rule 3.3 (“Candor toward the Tribunal”) would apply.  And in any event, all the other numerous ethics rules against lying apply, too.  See Model Rules  3.4 (fairness to opposing party and counsel), 4.1 (truthfulness in statements to others), 4.4 (respect for rights of third persons), 8.4 (dishonesty, fraud, deceit and misrepresentation). Lawyers representing clients in regulatory proceedings do not shed the Rules of Professional Conduct at the agency door.

2.  Agencies have ethics rules, too.

While you don’t escape the guiderails of the Rules of Professional Conduct, administrative agencies also have their own ethics rules, as the FTC blog post notes.  Agencies with rules for lawyer conduct include the Patent and Trademark Office and the Securities and Exchange Commission.  There are many others.  See George M. Cohen, The Laws of Agency Lawyering, 84 Fordham L. Rev. 1963, 1978 (2016) (noting 46 federal agencies with rules regulating conduct of lawyers).  As Cohen notes, lawyers practicing before agencies “must comply with state ethics rules … And they must consider how the agency’s own rules may impact their ethical obligations under the general ethics rules.”

3.  Blogs!

The third notable thing about the FTC’s pronouncement is that it appeared in the blog published by the agency’s Bureau of Competition staff, titled Competition Matters.  I guess we shouldn’t be surprised that a federal government agency chose to use the medium of a blog to issue an important policy reminder to practitioners — blogs of all kinds have been go-to sources of information for a long time now.  Litigants cite blogs in their briefs.  (Although here is an article criticizing the trend.)  This blog, I’m proud to say, has been cited in two law review articles (here and here [sub. req.])  and in a law school case book.

In many contexts, you can’t beat a blog when it comes to putting out timely and useful content.  We hope you continue to enjoy reading this one!  Just remember to keep on the straight and narrow when you’re before an agency.

A New York lawyer representing a landlord was suspended earlier this month for conduct that included threatening a tenant with arrest and telling him that he was worthless and should commit suicide.

In its opinion, the court found that the lawyer violated Rule 3.4(e) of the state’s Rules of Professional Conduct, which bars threatening to bring criminal charges solely to obtain an advantage in a civil matter, and meted out a four-month suspension.  The case shines a light on threats of criminal charges under state ethics rules.

“I gotta get this guy”

A resident in one of the buildings that the lawyer’s client owned allegedly used a website to post accusations that the landlord overcharged tenants.  According to the court’s disciplinary opinion, the lawyer sent a letter to the tenant, calling the posts defamatory and demanding that they be removed.  Receiving no response after a week, the lawyer texted the tenant, “We are filing [a] lawsuit against you for millions of dollars of damages you have caused as a result of your defamatory website.”

Later that day, said the court, the lawyer phoned the tenant — who recorded the conversation.  The lawyer told the tenant that “you’re one of those people in the world that really should just kill themselves.”  Then, apparently turning to someone else present in his office, the lawyer said about the tenant, “start the lawsuit … I need him arrested … I gotta get this guy.  He’s gotta be arrested.”  The lawyer also told the tenant that his office was “in contact” with the District Attorney’s office, and that “you’re gonna be paying for this heavily for the rest of your life.”

The grievance committee charged the lawyer with threatening criminal charges solely to obtain an advantage in a civil matter; there were other disciplinary charges based on separate conduct, as well.  At the disciplinary hearing, the lawyer presented no evidence that his firm ever filed suit against the tenant.

The four-month suspension that the First Department of the New York Appellate Division handed down was partly based on finding that the lawyer was a repeat offender and failed to take full responsibility for his conduct.  (The referee had found that the lawyer was sorry that his actions had caused his disciplinary problems, but had not properly apologized or recognized “that his aggressive litigation tactics must be controlled.”)

No Model Rule…

Interestingly, while New York and many other jurisdictions have ethics rules barring threats of criminal prosecution to gain an advantage in a civil matter (see, e.g., Ohio, D.C., Florida, Texas, California), and the concept was embodied in DR 7-105 under the former Code of Professional Responsibility, the Model Rules omit this specific prohibition.  The ABA explained in Formal Opinion 92-363 that the drafters believed that extortionate, fraudulent or otherwise abusive threats were dealt with by other more general rules (e.g., Model Rules 4.4, “Respect for Rights of Third Persons,” and 8.4, “Misconduct”).

Where is the line?

As ethics commentator Roy D. Simon points out in his New York Rules of Professional Conduct Annotated, threats to present criminal charges are “at the heart” of Rule 3.4(e).  “The thinking is that if a person has engaged in criminal conduct, it ought to be brought to the attention of the appropriate authorities, not merely threatened,” he says, “and if a person has not engaged in criminal conduct then there is no basis for threatening to bring criminal charges.”  Threats that are not carried out (as in the case discussed), may especially put a lawyer on risky ground.

What about the New York requirement that the threat’s purpose is “solely” to get leverage in a civil matter (language that varies across jurisdictions)?  Simon notes that “courts and disciplinary authorities have sometimes paid little attention to the word.”  Indeed, it’s not analyzed in the case discussed here.  Some ethics opinions do call attention to the distinction raised by the word.  See D.C. Ethics Op. 339 (can include citation to criminal statute in demand letter as long as threat is not solely to gain advantage in collection matter).

But that possible lack of clarity would seem to create some uncertainty (and therefore risk) in knowing where the ethical line is, particularly where the lawyer’s conduct presents a closer call than the court found in this case.

A former part-time Ohio judge and bankruptcy trustee whose bookkeeper was convicted of stealing funds from his trust account was publicly reprimanded last week for failing to reconcile his trust account monthly and failing to adequately supervise his staff.  The court’s opinion spotlights the potential legal ethics problems that dishonest non-lawyer staff can create.  Below are some ways to steer clear of possible pitfalls.

Employee embezzlement

The respondent was a part-time judge, which allowed him to have a private practice, and he was a bankruptcy trustee for 30 years.  In his bankruptcy practice, the respondent received significant amounts of cash from clients for legal fees and court costs.  The respondent’s long-time bookkeeper recorded the payments in a client ledger, but was found to have regularly converted funds for her own use rather than depositing them in the respondent’s trust account or operating account.

The bookkeeper eventually left the respondent’s office to work elsewhere.  Two years later, in preparing to close his solo practice and merge with another lawyer, the respondent audited his books and discovered money was missing from his accounts.  The state attorney general conducted a forensic audit and determined that over a nine-year period, the bookkeeper had embezzled more than $185,000.  (She was later sentenced to 36 months incarceration.)

Failure to supervise and reconcile

Regularly reconciling the records of funds held on behalf of a client is a best practice, of course.  What is not well-known is that some state versions of Model Rule of Professional Conduct 1.15(a) (“Safekeeping property”) really get down to the nitty-gritty.  Ohio’s version, for instance, specifies that lawyers must perform and retain a  monthly reconciliation.  The ABA/BNA Lawyers’ Manual on Professional Conduct notes that “Most of the jurisdictions … have gone well beyond the [Model Rules’] paradigm and incorporated detailed recordkeeping and accounting requirements.”

The respondent admitted that while the bookkeeper worked for him he reviewed bank statements for his trust account, but never conducted a monthly reconciliation by comparing the client ledgers with the client-trust account registers and bank statements.

In addition, the respondent stipulated that he had failed to adequately supervised the bookkeeper, violating Ohio’s version of Model Rule 5.3 (“Responsibilities regarding non-lawyer assistance”).  Rule 5.3(b), as broadly adopted across the U.S., requires a lawyer with direct supervisory authority over a non-lawyer to make reasonable efforts to ensure that the non-lawyer’s conduct is compatible with the lawyer’s own professional obligations.  The rule requires us to monitor staff so their actions are in line with our own ethics duties; it forecloses any “free pass” for ethics violations just because an unfaithful employee under your direct supervision commits them.

The sanction here — a public reprimand — is the lowest level of discipline available in Ohio.  The court noted that the respondent had deposited $35,000 his own funds to make up the net shortfall in his accounts after it was discovered.  None of his clients lost money as a result of the employee’s theft, and respondent had a clean disciplinary record.

The court noted other disciplinary cases from Ohio and elsewhere, however, where aggravating factors led to stiffer penalties, including suspension from practice.

Tips for staying out of trouble

The court here properly noted that “delegation of work to non-lawyers is essential to the efficient operation of any law office.”  But on the other hand, “delegation of duties cannot be tantamount to the relinquishment of responsibility by the lawyer,” and “supervision is critical in order” to safeguard client interests.

  • If your jurisdiction specifies periodic account reconciliations or other kinds of detailed recordkeeping, it goes without saying that you should comply.  Don’t wait for a post-embezzlement forensic audit.
  • Trust but verify.  Even long-time trusted employees can do bad things under some circumstances.  Be alert for red flags.
  • Don’t stop supervising.  In some of the cases where lawyers received suspensions after employee thefts, they  had completely relinquished control of their office functions to staff, and stayed “oblivious” to potential problems.

Making “reasonable efforts to ensure” that your non-lawyer staff adhere to your own ethics duties takes attention; don’t fall down on the job.

Although I love my home state of Ohio, I have to acknowledge that we are not often in the avant-garde when it comes to legal ethics.  After all, Ohio was one of the last jurisdictions in the Union to adopt the Model Rules of Professional Conduct (2007).  But last week, the Ohio Supreme Court put out for public comment proposed rule amendments that would add the Buckeye State to a small number of progressive jurisdictions — namely, those that permit lawyers to practice temporarily while awaiting approval of their applications to “waive in” to the bar.

Out-of-the box AWOX

As background, most U.S. jurisdictions have some form of “admission without examination” process (“AWOX”), to allow lawyers licensed elsewhere, who have a specified number of years of practice under their belts and meet other qualifications, to become licensed without having to take the bar exam.

But the AWOX application process is a bureaucratic one and can be slow, requiring a character-and-fitness assessment, filling out a long form and providing lots of documentation.  In Ohio, the process can take nine months.  (Like gestation of another sort.)

In the meantime, what can the applicant do as far as practicing law?  Most jurisdictions answer “Nothing.”  Without a license in that state, an AWOX applicant essentially has the status of a law clerk during the time that the application is pending.

Restrictive AWOX rules limit the opportunities of migrating lawyers, in an economy that is increasingly borderless in other respects.  For instance, a lawyer who has to move to a new jurisdiction to follow a spouse’s employment can face considerable downtime, even though the lawyer is eligible for AWOX.  The rules also put law firms who want to hire laterals from out of state in a bind, knowing that a candidate might have to put down an existing practice and work (and be billed) as a paralegal while awaiting AWOX.

The ABA has long been a proponent of a model rule that it calls “Practice Pending Admission.”  The proposed rule, promulgated in August 2012, establishes a window of time during which a lawyer who has a license in good standing elsewhere and a designated number of years of experience can practice temporarily in a different state while awaiting admission there.

Select group with progressive rules

Only a very few jurisdictions currently permit any form of practice pending AWOX.  They include the District of Columbia, under Ct. of Appeals R. 49(c)(8) (“Limited Duration Supervision by D.C. Bar Member”) and Missouri, under Sup. Ct. R. 8.06 (“Temporary Practice by Lawyers Applying for Admission to the Missouri Bar”).

Now, Ohio proposes to join this vanguard.  Under proposed amendments to the state supreme court’s bar governance rules, an applicant who is eligible for AWOX and has submitted an AWOX application could apply for permission to practice for 365 days while awaiting processing of the application.

Two of the key requirements under the proposed Ohio rule:  the applicant must submit the AWOX application within 90 days of establishing an office or “systematic presence” in Ohio, and must either “associate with an active Ohio lawyer who is admitted to practice in Ohio” or attest that the applicant will “only practice the law of the jurisdiction in which the applicant is already admitted.”

The Ohio proposal is out for public comment until April 10.

In re Application of Jones

The new Ohio proposal follows the state supreme court’s decision last fall in In re Application of Jones.  The case involved a licensed Kentucky lawyer who moved just across the Ohio River to join the Cincinnati office of the firm she was already practicing with.  Sitting in Cincinnati, she continued to represent her Kentucky litigation clients in Kentucky courts, but when she applied for AWOX under Ohio’s current rules, the Board of Character and Fitness said she had been engaging in the unauthorized practice of law.

The Ohio Supreme Court, though, held that the lawyer was engaging in a permitted form of temporary practice under Ohio’s version of Model Rule 5.5(c)(2), which says that a lawyer can practice in Ohio in connection with proceedings before a tribunal located where the lawyer is authorized to practice, and approved the lawyer’s AWOX application.

That was the right result, and I’m proud to say that my firm spearheaded a group of law firm amici that submitted a brief in the case.

But, arguably, a better and more-direct way to support practice pending admission without examination is via a rule change — and that is what is now under consideration.  Ohio might sometimes lag behind in ethics innovations, but this time it is in the vanguard.

A Washington appellate court recently disqualified a county prosecutor’s entire office from participating in the re-trial of a murder case.  The chief prosecutor had previously represented the defendant while in private practice.  The case shines a light on government lawyers and imputed conflicts of interest.

Election win spells DQ

The county prosecuting attorney, Garth Dano, had worked closely as a “consulting attorney” with the murder defendant’s trial team, and communicated about strategy, the theory of the case, potential witnesses and jury selection.  Dano also had appeared in court with the defendant.  After the guilty verdict, and while the case was on appeal, Dano won election as county prosecuting attorney.

Dano’s office did not handle the defendant’s appeal, but after the conviction was reversed, two deputy prosecutors from his office were assigned to the case on remand.  Dano recused himself, and had no part in the proceedings on remand, but the defendant moved to disqualify the county prosecuting attorney’s entire office.  The trial court denied the motion, but a divided court of appeals reversed, applying Washington precedent and ethics rules to impute Dano’s personal disqualification to all the lawyers in the office.

“No screening” sufficient

“No amount of screening can be sufficient to fully wall off” Dano, the court of appeals held.  In “unusual circumstances,” said the court, an elected prosecutor’s prior representation of a private client may be “attenuated,” and “brief,” such that no confidential communications were obtained. In that situation, personal disqualification and a screen could be sufficient without imputing the disqualification to the prosecutor’s whole office.  Here, however, citing Washington Supreme Court precedent, Dano’s personal involvement in the same matter was too substantial to qualify for the exception, the court said.

Imputation rules

Two Model Rules (and their state counterparts, which can vary) govern whether a conflict of interest that disqualifies a lawyer is imputed beyond that lawyer to others.

Model Rule 1.10 is the general rule for lawyers practicing together in a “firm,” and provides that a conflict based on a private lawyer’s prior representation at a different firm is imputed to the whole firm, except under specified conditions.  (The conditions mainly involve screening, which is not recognized in all jurisdictions; see the ABA’s 2015 guide, here.  And see Model Rule 1.0(c)‘s definition of “firm,” which includes in-house law departments).

In contrast, Model Rule 1.11 is the special imputation rule for current and former government lawyers.  As comment [2] says, “Because of the special problems raised by imputation within a government agency,” the rule “does not impute” the conflicts of a government lawyer “to other associated government officers or employees, although ordinarily it will be prudent to screen such lawyers.”

You might think that the lack of an imputation rule for government lawyers would have allowed all the county prosecutors except Dano to participate in the remanded murder case, particularly since Dano had been screened from the other prosecutors.  But not so.  The court said that Washington’s then-version of Rule 1.11 simply meant that instead of a sweeping rule of imputation, as in Rule 1.10, government lawyer conflicts must be “assessed more narrowly, according to each lawyer’s individual circumstances.”

In Dano’s situation, the extensive access to privileged communications and work product of the defendant’s trial team spelled a conflict that would be imputed to the prosecutor’s entire office, requiring appointment of a special prosecutor, said the court.

Do we ever take off our “lawyer hats”?

The question has been in the news because of a tweet by Rep. Matt Gaetz, who represents Florida’s first congressional district and is a member of the Florida bar.  Pictured at the right, the tweet was directed at Michael Cohen, President Trump’s former attorney, the night before Cohen testified before Congress for the first time on Feb. 27.

The Florida bar opened an ethics inquiry in response to what a Law360 article termed “several complaints” about the tweet.  Some who tweeted in response to Gaetz viewed his words as a possible obstruction of justice or witness intimidation.  Gaetz later deleted the tweet and apologized, saying he did not mean to threaten anyone.  According to Law360, Gaetz told reporters he was “witness testing,” not witness tampering.

“If rules have been violated, the Florida Bar will vigorously pursue appropriate discipline by the Florida Supreme Court,” a bar spokesperson said in a statement reported by many media outlets. “The Florida Bar takes its responsibility of regulating lawyer conduct very seriously.”  We don’t know if Representative Gaetz violated any laws or ethics rules.  But the situation presents an opportunity to explore some concepts.

“Lawyer conduct”

So when is “lawyer conduct” involved?  As ethics gurus John Dzienkowski and (the late) Ron Rotunda wrote in their Lawyer’s Deskbook, it’s when the conduct “functionally” relates to the capacity to practice.

Some ethics rules specifically target conduct in connection with client representation.  For instance Rule 4-4.4 of the Florida  Rules of Professional Conduct (“Respect for Rights of Third Persons”), which tracks Model Rule 4.4, says that “In representing a client, a lawyer may not use means that have no substantial purpose other than to embarrass, delay, or burden a third person.”

On the other hand, the Preamble to the Florida Rules (and the Model Rules) says “A lawyer’s conduct should conform to the requirements of the law, both in professional service to clients and in the lawyer’s business and personal affairs.”

When a lawyer violates the law, even when it doesn’t involve representing a client, professional discipline can follow.  For instance, under Model Rule 8.4(b), it is professional misconduct to “commit a criminal act that reflects adversely on the lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects.”  These are characteristics that are relevant to law practice, say the comments, and offenses involving dishonesty or serious interference with the administration of justice, or show the lack of other qualities that make a lawyer “fit,” can justify discipline.

Under state versions of Model Rule 8.4(b), lawyers have been disciplined for everything from tax violations, to drug offenses, to road rage incidents, to fraudulently occupying a rent-controlled apartment.  (Interestingly, regulators in the Sunshine State view compliance with child-support obligations as  being in the same category:  Rule 4-8.4(h) makes it professional misconduct to “willfully refuse” to timely pay court-ordered child support.)

Keeping that lawyer hat on

As one court put it, “Courts possess the power to discipline attorneys for conduct that is both in and out of their profession so as to ensure the public’s right to representation by attorneys who are worthy of trust.”  That is true no matter what hat you happen to be wearing.

Five businesses filed suit earlier this month in a Texas federal district court against Morrison & Foerster, a 1,000+-lawyer mega-firm headquartered in San Francisco.  The case is unremarkable in most ways: on the one hand, former clients who assert wrongdoing in how the law firm handled their matters (including billing improprieties) and a less–than-desirable outcome – and on the other hand, a law firm that says “Don’t believe everything you read in a complaint, the claims are baseless and we will win.”  (MoFo told the ABA Journal last week that “[t]he complaint has no merit” and that the firm “will be vindicated.”)

What is noteworthy is one of the allegations about the firm’s billing.  The plaintiffs claim that the firm’s misdeeds include “block billing.”  By grouping multiple tasks in a single time entry, the plaintiffs allege in the complaint, Morrison & Foerster made it “impossible to determine exactly what tasks were performed and the amount of time allegedly spent for such tasks.”

Ye olde one-line fee bills

At this early stage, the allegations in the complaint remain unproven, and it can’t be known to what extent MoFo may (or may not) have sent invoices that block-billed discrete tasks.  Certainly, in days of yore it was common for law firms to send invoices summarizing the services provided.  (It was also common to see fee bills with one line: “For services rendered…” and then the dollar amount.)  In the 1980s, say, it was certainly easier to dictate a summary of the work done on a matter than it was to break out specific tasks.  (Those of us who were young and tech savvy in those bygone days would use our fancy Dictaphones™, though the senior partners would have their secretaries take dictation on a steno pad.)

Today though, most of us put our daily time charges directly into software that will spit out a list of charges for the month.  Preparing a “summary” of those charges actually requires more work than giving the client a detailed description of how much time was spent daily on what and by whom.  Why ever spend the time summarizing?

But what the plaintiffs in the case against MoFo might be alluding to is the practice of stringing together many short tasks in one running description and assigning a single combined time charge to those discrete tasks.  That can effectively obscure how much time the lawyer spent on each of those tasks – which is something clients now expect to be informed of.

Billing rules of the road

There is no ethics rule that says you may not “block bill” (though many corporate clients today have outside counsel guidelines that prohibit the practice).  But several ethics rules are broadly relevant, including your jurisdiction’s version of Model Rule 1.4(a)(3) (keeping the client reasonably informed about the matter); Model Rule 1.5(b) (communicating the basis of the fees and expenses); and Model Rule 1.5(a) (not charging an unreasonable fee).

ABA Ethics Opinion 93-79 vividly describes a number of billing no-no’s, including: billing more than one client for the same hours; billing time during travel to one client while working on another client’s matters and billing the second client as well; “continuous toil on or overstaffing a project for the purpose of churning out hours;” and marking up expenses, such as meals.  (The latter practice prompted the ABA Ethics Committee to opine colorfully that “[t]he lawyer’s stock in trade is the sale of legal services, not photocopy paper, tuna fish sandwiches, computer time or messenger services.”)

Blocking and tackling

When a client alleges misconduct against a lawyer or firm, the burden of proof is on the client.  But what we know about the tendencies of juries suggests that any lawyer should want to be in the best position possible to justify his or her fee if it is ever called into question.  We’re not playing football here – less blocking is better.

Last week the media was abuzz with the allegations made against the National Enquirer by Jeff Bezos, the founder of Amazon and the owner of The Washington Post. The details in Bezos’ blog post about his ongoing dispute with the Enquirer and its publisher David Pecker are sensationalistic to say the least: the world’s richest man being allegedly blackmailed by people working for Pecker (a long-time friend and supporter of President Trump), with threats to publish “compromising” photos of Bezos unless he backed off his investigation of the tabloid. Here is some reporting on the story.

Part of the interest arises because Bezos alleges that the threat was delivered, in part, by an attorney working for the Enquirer. A Law360 article on the situation says “Bezos’ published account of how a general counsel and others at the American Media Inc.-owned paper allegedly tried to blackmail him does appear to describe a violation of state and federal statutes, ethics and white collar specialists said.”

While there may be a debate as to whether these were just hard negotiations or discussions that crossed the line into blackmail, it at least appears that the lawyers involved might have allowed themselves to get close to the line, even if not over it.

Zeal … or trouble

When zealously representing your clients, it can be easy to forget that zeal cannot be the basis for doing things that break the law or undermine the legal system. For example:

  • In some states, threatening to file criminal charges against a potential defendant in order to obtain a civil settlement is treated as extortion, including when the threat is made by counsel attempting to recoup stolen assets. An ABA Litigation article on the general subject is here.
  • As the New York statute does, many states make it a crime to compel a person “by means of instilling in him or her a fear” that if a demand is not met the threatener will “expose a secret or publicize an asserted fact, whether true or false, tending to subject some person to hatred, contempt or ridicule.”
  • Obstruction of justice in the course of representing a client was the undoing of some of the lawyers involved in Watergate.  (See here for a take on Watergate’s legal ethics legacy by John Dean and our partner Jim Robenalt.)
  • Lawyers have faced ethics charges for going too far in public statements about their clients’ cases, in violation of the many different state versions of Model Rule 3.6 (“Trial Publicity”).
  • It can be an ethical violation under Model Rule 3.3(a)(2) if you fail to make a court aware of binding precedent that is directly adverse to your client’s position.

Knowing where zeal ends and unlawful or unethical conduct begins is the best way to keep yourself (and your client) out of trouble. And don’t let an echo-chamber do you in. Getting a reality check from someone not involved in the situation can sometimes help avoid problems. Remember, under Model Rule 1.6(b)(4), you are permitted to reveal information relating to the client’s representation to the extent you reasonably believe necessary to secure advice about your compliance with the Rules of Professional Conduct, opening the way for getting good ethics advice.

Going abroad?  Think that “national counsel” is going to take care of anything that comes up when you’re gone?  Get swamped when you return and take “several weeks” to wade through the e-mail that piled up in your absence?  If you’re local counsel, that might be a recipe for disaster — for your client — as the Seventh Circuit Court of Appeals held recently.

What we have here is a failure to communicate

After the plaintiff filed a trademark infringement case, the Wisconsin district court’s docket shows that just a month later the parties reached a deal and jointly moved to file a consent order resolving the dispute.  But about four months after that, the plaintiff was back in court, moving for a contempt order and asserting that the defendant had violated the consent order.

Here’s where things began to go south, according to the appeals court opinion:  The defendant’s local Milwaukee counsel received notice of the contempt motion, via the electronic docketing system (presumably PACER).  When the lawyer failed to respond, the district court scheduled a hearing.  No one showed up on behalf of the defendant.  The district court then granted the plaintiff’s motion, holding the lawyer in contempt, requiring his client to pay the plaintiff’s fees and costs, and ordering the lawyer to explain his unresponsiveness.

As the court of appeals wrote, that order “caught [the lawyer’s] attention.”  Local counsel explained that he had been “traveling internationally” when the plaintiff filed its motion for contempt, and even though he returned five days before his client’s response to that motion was due (and 26 days before the scheduled hearing), “it took him several weeks to catch up on his email.”  He saw the court’s notices only after “all response dates had passed.”

The defendant’s request for reconsideration of the contempt order also pointed to what the appeals court called a “communication breakdown between local counsel and the company’s national trademark counsel.”  Local counsel believed national counsel would be “attending to any ongoing needs in the case; national counsel apparently had a different understanding,” the court wrote.

“Deadlines matter”

The result of this mess-up?  The district court found the local counsel in contempt, and after a line-by-line analysis of the plaintiff’s attorney fees and costs for the entire case — not just the contempt proceedings — sanctioned the defendant to the tune of almost $35,000.  The Seventh Circuit easily upheld those rulings, characterizing the whole situation as “unfortunate and avoidable.”

“Deadlines matter,” wrote the court, and certainly after the district court provided a second chance to the defendant by noticing a hearing, the lower court’s reaction in issuing its contempt order was not an abuse of discretion.  Nor did the defendant’s good faith provide any immunity from sanction, the appeals court said.

And the big take-away:  “Nor, of course, can communication breakdowns serve to exempt outside counsel … from compliance with the rules, or from the penalties for failing to do so.”

Beware local counsel duties — and check your e-mail

We’ve written before about local counsel duties. and a New York City Bar ethics opinion that is a helpful cautionary road map on local counsel duties.  The bottom line is that you don’t get any free pass for being “merely” local counsel.  The extent of local counsel’s role in any particular matter should be expressly set out in a carefully-considered engagement letter with the client.  If you think that “national counsel” is going to monitor a case or a docket after some certain end point, you should additionally clarify that understanding, something the court here said would have helped.

And, hey — Model Rule 1.1 (“Competence”) and Model Rule 1.3 (“Diligence”) mean that we can’t just totally put down our practices when we go on vacation.  That was true even in the days before e-mail and PACER, when someone “back at the ranch” would be monitoring our postal mail.  Now, the available technology means there is little excuse for not being aware of court filings in real time.

As for clearing up the inevitable post-vacation backlog of e-mails, the laundry from the trip might have to wait — but that’s okay, isn’t it?

The Ohio Supreme Court is continuing its trend of suspending lawyers who violate the disciplinary rule on sex with clients, and has again rejected arguments that pointed to the consensual nature of the relationship.  In a recent opinion involving sex between criminal defense counsel and his client, the court characterized the lower disciplinary Board’s analysis as “blaming the victim,” and increased the penalty above what the Board recommended.  The lawyer will serve a six-month suspension, with 18 months stayed on multiple conditions.

Hot tub trespass

The lawyer had previously represented “J.B.’s” boyfriend.  When J.B. was charged with felony theft, the lawyer agreed to represent her.  According to the opinion, the next day the lawyer and J.B. had drinks at a restaurant, discussed her case, had sex in the lawyer’s car in the parking lot, and engaged in sexual activity at least seven more times over the next four months, including trespassing into a neighbor’s yard to use a hot tub.

After rumors about the relationship began to spread, the lawyer falsely denied them to the judge presiding over J.B.’s criminal case.  In the meantime, the lawyer had filed a petition to run for prosecuting attorney.  After that, the county sheriff’s office began investigating the lawyer, and J.B. agreed to disclose the true nature of her relationship with the lawyer in exchange for a reduced sentence on her felonies.

Eventually, as part of a plea agreement on charges against him, including sexual battery, and criminal trespassing, the lawyer withdrew his candidacy for prosecutor and was sentenced to two years of community control and a fine.

Consent just doesn’t matter

The lawyer stipulated to violating Ohio’s version of Model Rule 1.8(j), which prohibits “sexual relations with a client unless a consensual sexual relationship existed between them when the client-lawyer relationship commenced.”  (The Ohio version refers to “sexual activity” with a client.”)

As the sanction for the lawyer’s misconduct, the Board of Professional Conduct recommended a two-year suspension with the entire two years stayed.  In the Board’s view, “not only was there no harm to the client, but the client leveraged her relationship with [the lawyer] to get a better plea deal,” and the lawyer had already suffered by his arrest, indictment, spending two nights in jail and being forced to withdraw from the prosecutor’s race — all stemming “from [the lawyer’s] consensual sexual relationship with his client.”

The Supreme Court strongly rejected this whole line of reasoning, along with the Board’s recommended sanction.  The Board’s approach, said the court, “essentially blamed the victim, J.B., for the negative consequences that [the lawyer] experienced resulting from his own decision to engage in sexual relations with a vulnerable client.”  (Emphasis in original.)

The court wrote that without a sexual relationship that pre-dates the client relationship, “seeking or having sex with a client is a per se violation,” and “the fact that a client appears to have consented does not mitigate the attorney’s misconduct or provide a defense against a violation.”

Instead, the court termed a sexual relationship with a client as “inherently and insidiously harmful,” categorizing this case as the “most disturbing” variety” — where “a lawyer has had sex with a client while defending the client against criminal charges … or has accepted sex in lieu of fees.”

The court imposed a two-year suspension with only 18 months stayed, along with multiple conditions — including taking and passing the MPRE, completing 12 hours of ethics CLE, and serving a two-year period of monitored probation.

Continuing trend

This case is one in a line of disciplinary opinions in which the Ohio Supreme Court has emphasized the power imbalance between the lawyer and client, and rejected the argument that the client’s consent to the sexual activity somehow ameliorates the ethical misconduct.  We’ve written before about one of these cases, in which the court found the lawyer not to be “remorseful” because he continued to argue that his sexual relationships with multiple clients were “consensual,” even while acknowledging it was wrong.  Several other such cases are cited in the opinion involving J.B.  It will be interesting to see how this court’s disciplinary stance on sex with clients continues to evolve.