Some answers are so obvious that you are left wondering why the question needed to be asked in the first place. Like “should a client pay a fee it agreed to in advance?”  Or, “should an attorney try his or her best to prevail?”

And now this:  the ABA’s Standing Committee on Ethics and Professional Responsibility issued an advisory opinion earlier this month instructing lawyers who suffer a data breach that exposes “material client information” to notify clients of the breach and take additional measures to protect the confidentiality of the compromised information.  Obvious?  We think so.

When we advise clients about their data protection obligations, we often suggest that compliance is strengthened when data security strategies align with an organization’s culture. For law firms, this should be relatively easy:  lawyers learn (we hope in law school) that they have an ethical obligation under Model Rule 1.6 to preserve the confidentiality of their clients’ information.  In today’s world, that surely means that the lawyer and her firm should take appropriate measures to protect the information from cyber thieves and other threats to the security and confidentiality of a client’s confidential information.

Likewise, our duty of communication (Model Rule 1.4), coupled with our confidentiality obligations, should make it a no-brainer that when a breach occurs, the affected clients should be told.

Nevertheless, in its Formal Opinion 483 the Committee devotes 16 pages to state and support this conclusion. (Interestingly, the Committee primarily relies on rules dealing with competent representation and technological aptitude, and only secondarily refers to the duty of confidentiality.)  The opinion does contain instruction that, while hardly novel or visionary, provides sound advice:

  • A firm should implement technological and other measures to detect intrusions into its data systems;
  • A firm should develop, implement and test a data incident response plan. As we’re fond of saying, the time for a pilot to learn how to deal with catastrophic engine failure is not when the plane is hurtling to the ground from 30,000 feet.
  • The firm should promptly take measures to restore the affected systems and close the breach. (Don’t just stand by and do nothing!)
  • The firm should, alone or in concert with skilled cyber forensics professionals, determine how and why the breach occurred. (Again, don’t just scratch your head.)
  • The firm should notify current clients whose data are compromised. Oddly, the Committee stated that it is “unwilling” to impose that obligation with regard to former clients.
  • The opinion provides guidance on what the client notification should contain. Importantly, the opinion reminds lawyers that they may have additional notification obligations under federal and state data breach notification laws that apply, yes, even to lawyers.

 

Opinion 483 provides useful, if obvious, direction on our duties in response to a data breach. It hardly lays out a truly comprehensive set of best practices for safeguarding client information, but it does point in the right direction.

Picture this:   You’re travelling across U.S. borders, heading home from a client meeting abroad.  However, unlike other trips, this time a Customs and Border Protection agent requests that you unlock and hand over for inspection your computer and cell phone — full of client confidential information.  You’ve been concerned about this issue, and so you’ve had your IT department encrypt all of the sensitive data on your devices.  Will that protect you client’s information from disclosure?

Ethics duties at the border

We wrote here last year about the ethics issues with border searches of e-devices, including the New York City Bar Association’s July 2017 opinion on how to deal with the duty of confidentiality in that scenario.

The NYCBA ethics committee advised that you may of course ethically comply with lawful government orders, but also that you should not comply “unless and until” you “undertake reasonable efforts to dissuade border agents from reviewing clients’ confidential information or to persuade them to limit the extent of their review.”

The concern about this issue was heightened by a sharp uptick in border searches of e-devices.  Customs officers searched an estimated 30,200 cellphones, computers and other electronic devices of people entering and leaving the U.S. last year — an almost 60 percent increase from 2016, according to Homeland Security Department data.

Most recently, in January 2018, the CBP revised Directive No. 3340-049, which includes procedures for searching information subject to attorney-client privilege.  Section 5.2 calls for segregating privileged material to ensure that it is “handled appropriately.”

Encryption – it’s no panacea

What about encrypting the client information on your e-device to make sure it stays confidential and won’t be revealed during a potential border search? That approach may be of limited use.

Section 5.3.3 of the revised CBP directive provides that if border officers can’t inspect your device “because it is protected by a passcode or encryption,” they may detain it and convey it (or a copy of its contents) to third parties who can supply “technical assistance.”

This is an indirect reference to the various U.S. intelligence agencies that are authorized pursuant to Section 2.6 of Executive Order 12333 to provide technical support and assistance to the CBP.  This aid may be derived from the National Security Agency, which leads the federal government in cryptology, or from the National Media Exploitation Center which consists of representatives from multiple intelligence agencies that are  responsible for decrypting, translating and analyzing documents and electronic devices in the federal government’s possession.

If CBP officers seek to decrypt and access the confidential information on your device, they likely have the authority and the technical resources, through federal intelligence agencies, to do so.

The magnitude of the risk, and what to do

Even though the 5,000 devices searched in February last year sounds like a lot, it’s only a tiny percentage according to CBP’s Office of Public Affairs. The agency says that in FY 2017, only about .007 percent of arriving international travelers screened and processed by CBP officers were required to submit to an e-device search.  That possibly points to a low risk for any one lawyer who might be returning from international travel.

But given the breadth of your ethics duty, and the limits on the ability of encryption to protect confidential client information on your devices, it would be a best practice to heed the advice that the NYCBA gave last year:

  • Depending on the circumstances, including the sensitivity of the information, you should consider not carrying any client confidential information across the border.
  • Rather than exposing your client’s information to disclosure in a search, you should securely back up client information and cross the border only with a blank “burner” phone or laptop.
  • And before coming back across the border, you should also turn off syncing of cloud services, sign out of web-based services, and/or uninstall applications providing local or remote access to confidential information.

Lawyers and their firms should consider incorporating these measures into their data security policies and practices. It’s what the times, and your ethics duties, would seem to call for.

In the aftermath of Hurricane Florence, which last month dumped up to 35 inches of rain on parts of the Carolinas, Virginia and Maryland, caused 48 deaths, and up to $22 billion in property damage, comes a timely new ABA opinion about our ethical obligations related to disasters.

The hurricane did not spare lawyers and law firms.  Ahead of the 1,000-year storm, Law360.com reported that firms in Florence’s projected path shuttered offices, activated contingency plans, and were glad if their firm systems and client data were stored in the cloud.  (Subscribers can access the story here.)  (And doing the profession proud, volunteer lawyers manned hot-lines to help storm victims get needed legal services.)

But what are our actual disaster-related ethics duties?

Communication, withdrawal, files and more

Disasters happen; that’s a fact of life.  The entire 13-page Opinion 482 (Sept. 19. 2018) repays reading.  Some highlights and nitty-gritty advice from the opinion:

  • Model Rule 1.4 requires us to communicate with our clients.  To be able to reach clients following a disaster, the opinion says, you should maintain or be able to quickly recreate, lists of current clients and their contact information.
  • You “must evaluate in advance storing files electronically” so that you can have access to those files via Internet or smart device, if such are available after a disaster.
  • If you can continue to provide services in the disaster area, you continue to have the same ethics duties as before; but in an emergency, you may be able to provide advice outside your area of expertise, as allowed by comment [3] to Rule 1.1 (“Competence”).  (We’ve previously written here about “emergency lawyering.”)
  • If you’re a litigator, check with courts and bar associations to see if deadlines have been extended across the board.
  • You “must take reasonable steps in the event of a disaster to ensure access to funds” you are holding in trust, the opinion advises.  Of course, your obligations will vary depending on the circumstances.  If you know of an impending disaster, you should determine if you should reasonably transfer client funds to an account that will be accessible; or even attempt to complete imminent transactions before the disaster hits, “if practicable.”
  • You may need to withdraw after a disaster, under Rule 1.16 (“Withdrawal”) and Rule 1.3 (“Diligence”), if a client needs immediate legal services that you will be unable to timely provide.
  • If client files are destroyed, your duty of communication will require you to notify current and former clients about the loss of client property with “intrinsic value.”  But there is no duty, the opinion concludes, to notify either current or former clients about the loss of documents that have no intrinsic value, for which there are electronic copies, or that serve no current useful purpose.
  • To prevent the loss of important records, “lawyers should maintain an electronic copy of important documents in an off-site location that is updated regularly.”

Disaster Prep 101:

The ABA has a committee devoted solely to the topic of disaster preparedness, and its website has helpful resources and tips on everything from getting insurance, to types and methods of information retention, and how you can assess damage and rebuild after a disaster strikes your practice.  The committee’s 44-page Surviving a Disaster — A Lawyer’s Guide (Aug. 2011) is also helpful.

And remember, calamitous disasters aren’t confined to weather, war, and the like.  A disastrous health event can leave your practice reeling, especially if you are a solo or in a small firm.  As we’ve pointed out before, one’s own death and disability are not pleasant to think about, but choosing a profession in which we owe fiduciary duties to others requires us to make contingency plans, like those laid out in my home bar association’s “What-If Preparedness” program.

In all events, thinking about the unthinkable is part of what we do.

You can’t interview potential expert witnesses and share confidential information with them solely to taint them with a conflict that would prevent the experts from working for the other side, the Texas State Bar Professional Ethics Committee recently said in Opinion No. 676.

“T’aint” ethical

Lots of litigation requires expert testimony in order to support plaintiff’s allegations or to defend against them.  But if a lawyer shares confidential information with a prospective expert, the expert may be disqualified from working for the other side.  (There is a helpful collection of the cases on this point at Freivogel on Conflicts.)

What if your case involves an area where there are only a few specialized experts who can testify?  How about “interviewing” all of them, and providing confidential information about the case, even though you don’t have any actual intention of hiring them?  Can you try to keep the qualified experts out of the grasp of the other side with that tactic?

Not surprisingly, the Texas ethics committee said “No.”

The Lone Star State’s version of Model Rule 4.1(a) prevents using means to represent a client that have no substantial purpose other than to burden a third person, or using methods of obtaining evidence that violate the rights of a third person.  That prohibition applies to prevent a lawyer from hiring an expert, or communicating confidential information to a potential expert, “when the lawyer has no substantial purpose other than to … imped[e] the opposing party’s access to a limited pool of potential experts,” the committee said.

That “substantial purpose” is clearly a question of fact, said the committee, and it’s not necessarily improper to retain an expert and still interview additional ones, as long as the lawyer is actually considering using them.

Using misrepresentations and deceit to disqualify a prospective expert could also violate Texas’ version of Model Rule 8.4(c), barring dishonesty, fraud, deceit or misrepresentation, the committee added.

Can a client DQ a lawyer by “taint shopping”?

The principle that the Texas ethics committee applied is echoed, as to lawyers and clients, in comment [2] to Model Rule 1.18.  If a prospective client consults us about the possibility of hiring us, we take on confidentiality duties to that person or entity, even if we are not ultimately hired.

But especially in smaller legal markets, there can be an abusive tactic where a person “interviews” several lawyers in a specialty area — not with the goal of hiring one of them, but to preclude the other side from doing so.  That’s commonly known as “taint shopping,” and comment [2] makes clear that “a person who communicates with a lawyer for the purpose of disqualifying the lawyer is not a ‘prospective client.'”  Such a pretextual “shopper” is not owed any duties under Rule 1.18.

Making big news this summer was the shut-down of Avvo Legal Services just a few months after it was acquired by Internet Brands.  (A couple of the many reports are here and here.)  Some speculated that the new corporate owner had no stomach to continue to fight for that portion of Avvo’s business model in the face of numerous state ethics opinions that found a wide variety of ethics problems with it.

The flat-fee service that Avvo offered through a network of lawyers required the lawyer to rebate a “marketing” fee to Avvo out of the fee that the lawyer received.  As we’ve pointed out, that raised issues of fee-splitting with non-lawyers; but other aspects of the model also troubled ethics boards.

Does “processing fee” = fee-splitting?

On another front now drawing notice, another on-line legal services provider is contesting charges in California district court that its own business plan violates false advertising and unfair competition statutes, including recently-filed allegations that it supports its business with spurious attorney ratings.

The suit is significant for highlighting that despite the demise of Avvo Legal Services, the ethics issues remain in light of the other players that continue to occupy the same space in the marketplace, and that litigation, not just regulatory action, sometimes results.

The plaintiff in the California federal case is LegalForce RAPC Worldwide, an IP firm.  In an amended complaint filed earlier this month, LegalForce alleges that it competes with defendant UpCounsel Inc. to “provide individuals and small businesses with affordable access to attorneys,” by using technology to match clients with lawyers specialized in corporate, patent and trademark law.

The allegations, which withstood an earlier motion to dismiss, include that UpCounsel’s model features a “processing fee” markup that constitutes impermissible fee-sharing with non-lawyers.

The amended complaint says that UpCounsel tries to attract consumers by promising to provide lawyers in the “Top 5%” of specialized IP and corporate practice niches in cities across the U.S, and that the representation constitutes false advertising, as there is no ranking system that could provide a basis for the claim.

“Reviews” outnumber lawyers, says complaint

In addition, according to the allegations of the amended complaint, UpCounsel falsely advertised superior consumer ratings for the lawyers in its network.  As an example, the plaintiff pointed to the rating given to IP lawyers in Cotati, California:

“Cotati Intellectual Property Lawyers, 5.0 ***** Based on 5450 reviews.”  “It is impossible for Cotati Intellectual Property Lawyers to have 5,450 reviews on UpCounsel,” says the amended complaint, because “Cotati is a small town … with a population of 7,455. There are only 21 attorneys in the city of Cotati licensed to practice law in California, and none of these 21 attorneys are listed on UpCounsel.”

LegalForce alleges that this same pattern of “perfect or near-perfect review scores” based on thousands of purported reviews is duplicated as to lawyers advertised by UpCounsel in other cities, such as Tallahassee and Savannah.

More to come…

The ethics issues regarding on-line legal service providers have not gone away just because Avvo has withdrawn from that market.  As Prof. Alberto Bernabe, a legal ethics professor at John Marshall Law School in Chicago, has pointed out, “Where Avvo left off, someone else will pick up…,” including, most recently, “Text a Lawyer,” an on-line platform where prospective clients can ask lawyers questions via text.

Regulators and litigation parties will surely continue to confront the ethical issues inherent in these platforms, although the ABA’s recently-passed revamp of some of the legal marketing rules in the Model Rules of Professional Conduct fails to address on-line referral providers.

The New York City Bar Association recently found that common forms of third-party litigation funding for law firms violate New York’s Rule 5.4(a), which like the analogous Model Rule, bars fee-splitting with non-lawyers.

In its Opinion 2018-5, the NYCBA’s Professional Ethics Committee advised that “a lawyer may not enter into a financing agreement with a litigation funder, a non-lawyer, under which the lawyer’s future payments to the funder are contingent on the lawyer’s receipt of legal fees or on the amount of legal fees received in one or more specific matters.”  (Left untouched by the opinion are agreements between funders and clients, which do not implicate the fee-splitting issue.)

While ethics opinions are advisory, they can be cited by courts as persuasive authority; and an opinion from the influential NYCBA could help shape the conversation in an area that has been marked by controversy.  As we described earlier this year, two jurisdictions now require some disclosure when third-party funding is part of a case (Wisconsin by statute and the Northern District of California by rule), and the U.S. Chamber of Commerce has favored a change to the Rules of Civil Procedure to require such disclosure.  And as we have also described, some courts still view third-party funding as impermissible under the old doctrines of champerty and maintenance.  Yet, litigation funding is big business, with the U.S. market estimated at $5 billion annually, and growing.

Fee-splitting problem

Against this backdrop, the Committee considered two arrangements, both of which it found forbidden by the fee-splitting rule:  (1) where the funding to the firm is not secured other than by the lawyer’s fee, “so that it is implicit that the lawyer will pay the funder only if the lawyer receives legal fees in the matter;” and (2) where instead of a fixed amount or interest rate, the amount of the lawyer’s payment to the funder will depend on the amount of the lawyer’s fee.

Rule 5.4(a) (“Professional Independence of a Lawyer”) provides that “a lawyer or law firm shall not share legal fees with a non-lawyer.”  The purpose of the rule, as described in comment 1, is to protect independent legal judgment.  See also Roy Simon & Nicole Hyland, Simon’s New York Rules of Professional Conduct Annotated at 1420 (noting that the rule’s intention is to protect independent legal judgment by removing the incentive for non-lawyers to interfere or pressure lawyers to use improper measures to win cases).

The Committee noted the long-standing nature of the fee-splitting prohibition, and that it has been broadly interpreted to bar many different types of business arrangements in which lawyers agree to make payments to non-lawyers based on the lawyer’s receipt of legal fees, or on the amount of those fees.  A financing arrangement contingent on the receipt of fees or their amount is no different, and is impermissible, said the Committee, “regardless of how the arrangement is worded.”

“Rightly or wrongly,” the Committee said, Rule 5.4(a) “presupposes that when non-lawyers have a stake in legal fees from particular matters, they have an incentive or ability to improperly influence the lawyer.”

Lessons from the case law… and a call to the legislature?

The Committee acknowledged that New York courts have enforced litigation funding contracts against attempts to invalidate the agreements based on public policy grounds, but said that would be expected:  “[L]awyers who violate the Rules cannot ordinarily invoke their own transgressions to avoid contractual obligations.”

And as for the argument that the prohibition on fee-sharing is overbroad?  The Committee recognized that there is room for question there, including whether there might be adequate contractual or other means of preventing litigation funding arrangements from interfering with independent legal judgment.  But “that is a matter to be decided by the state judiciary,” said the Committee.

Funder reaction:  not warm

As described in Law360 (subscription required), the chief investment officer at one major funder, Burford Capital, called the NYCBA’s opinion “flatly wrong.”  The chief investment officer of another funder, Bentham IMF, said it was “going the wrong way.”

Perhaps these reactions are predictable; but the NYCBA’s opinion is only the most recent of a string of advisory opinions from other jurisdictions, such as Maine, Virginia, Nevada and Utah, that point in the same direction.

Stay tuned.  This is a topic with possible ramifications on how new firms are financed, as well as an ongoing debate over the role of the fee-splitting rule in actually protecting clients.

In the movie “Goodfellas,” Robert De Niro famously advises that the two greatest life lessons are “Never rat on your friends, and always keep your mouth shut.”  Those are good rules if you’re in a crime syndicate.  But as most lawyers know, our Rules of Professional Conduct can actually require us to “rat out” our fellow lawyers, under some limited circumstances.  Model Rule 8.3(a), adopted in some version in almost all jurisdictions, says:

“A lawyer who knows that another lawyer has committed a violation of the Rules of Professional Conduct that raises a substantial question as to that lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects, shall inform the appropriate professional authority.”

Rule 8.3(b) applies the principle to judges.

But do you ever have to, in effect, rat yourself out — self-reporting your own ethical misconduct?

In almost every jurisdiction (my home state of Ohio is an exception), the answer is “No.”  The Model Rule, as incorporated into almost all the state professional conduct rules and the rules of the District of Columbia, deals expressly with reporting the ethical misconduct of “another lawyer.”  Under that language, there is no ethical duty to self-report your own violation of the professional conduct rules.  In some jurisdictions, though, self-reporting might be considered as part of the mitigating factors that can reduce the severity of professional discipline, as a recent Nevada opinion illustrates.

Stayed suspensions for trust fund misconduct

In the Nevada case, two lawyers got one-year fully-stayed suspensions after their employee improperly used more than $1 million in client trust account funds to pay firm business expenses.  As described in the state supreme court’s opinion, the two lawyers admitted they violated Nevada’s version of Model Rule 5.3, by failing to properly supervise a non-lawyer assistant, and they agreed to the sanction.  The lawyers were not aware of the non-lawyer’s actions.  And, strikingly, “Within fifteen minutes of discovering the non-lawyer assistant’s improper trust fund transfers,” they “self-reported to the State Bar.”  In accepting the proposed discipline, the supreme court noted the lawyers’ “full and free disclosure to disciplinary authority.”  It also helped that the lawyers immediately hired a forensic accountant for an audit, and began repaying the trust account shortfall out of earned fees.

… And you might have to self-report crimes and/or other discipline

The general rule excusing you from ratting on yourself is turned upside down in many places, however, when it comes to self-reporting discipline that is imposed on you by a court (for instance a federal court) or by a disciplinary authority in another jurisdiction.  In those cases, many jurisdictions require you to bring the matter to the attention of your home state’s disciplinary body.  It’s not the misconduct itself, but the fact of disciplinary action emanating from somewhere besides your home jurisdiction’s highest court that triggers this kind of self-reporting duty.

You also might have a duty to self-report if you are charged with or convicted of a crime.  If (heaven forbid) you find yourself in that situation, you should get advice about what your jurisdiction requires of you, including any mandatory time frames on self-reporting.

Carve-out for lawyer assistance programs

Last, a PSA:  If you are struggling with a mental health problem, or with substance abuse, be aware that the lawyer assistance program that every jurisdiction has is very likely exempted from reporting to disciplinary authorities misconduct that its staff lawyers learn of in the course of helping you.  Check your own state’s version of Model Rule 8.3(c), but those I’m aware of have some form of the Model Rule’s carve-out:   “This Rule does not require disclosure of information otherwise protected by Rule 1.6 or information gained by a lawyer or judge while participating in an approved lawyers assistance program.”

Here in Ohio, our lawyer assistance program advises that no disciplinary problem is ever made worse by seeking help.

In an unusual application of the lawyer-witness rule, a district court recently held that the rule would not prevent an assistant state attorney general from being on an open phone line along with the court and other party representatives during the execution of a death-row inmate — even though the assistant AG might have to testify as a fact witness during the execution.

Open phone line

The inmate, Robert Van Hook, was scheduled to be executed in Ohio for a 1985 murder.  He and many other inmates had challenged Ohio’s lethal injection execution protocol on Constitutional grounds.  He requested that an open phone line be maintained through the course of his execution, and that his attorney, the Ohio assistant AG on the case, and the court be on the line, so that his attorney could move for a temporary restraining order to halt the execution mid-stream if it began to go wrong.

Some executions by lethal injection, including in Ohio, have had serious problems in being carried out.  (See here, here and here, for example.)

Lawyer-as-witness issue?

The Ohio Attorney General objected to the inmate’s request, because if the inmate’s lawyer moved for a stay or TRO during the execution, “an Assistant Attorney General may be placed in the difficult position of becoming a fact witness in order to rebut allegations made by Plaintiffs” in the ensuing telephone hearing from the death house.  This would create a conflict of interest under Ohio ‘s version of Model Rule 3.7, the Attorney General said, that would require recusal of one or more lawyers.  Because of the limited number of assistant AG’s familiar with the case, recusal would hamper the ongoing litigation over Ohio’s execution protocol, he noted.

The magistrate judge rejected the AG’s argument.  Ohio Rule 3.7(a)(3) (like the Model Rule) provides that “a lawyer shall not act as an advocate at a trial in which the lawyer is likely to be a necessary witness unless … the disqualification of the lawyer would work substantial hardship on the client.”

A main justification for the bar against acting as a lawyer and a witness in the same cause is confusion for the trier of fact in taking account of these dual roles.  But, the judge said, there was little risk of confusing the court under the likely circumstances here.  And any possible confusion was outweighed by the substantial hardship to the defendants that would result if the court were to bar testimony from the assistant AG with intimate knowledge of the case, and who was observing the execution, the judge held.  Therefore, the open phone line plan would not be impeded by the possibility of disqualification under the lawyer-as-witness rule.

The magistrate judge also held that the purpose of the open phone line — a possible post-lethal-injection motion for injunctive relief — was not “futile.”  The court said that Van Hook had the right to challenge his execution as cruel and unusual, and “he does not lose that right once the injection begins….”

Van Hook’s execution proceeded without incident on July 25.

Confession:  I’m a lawyer who’s married to a lawyer.  If that’s your situation too, then you know some of the challenges — how life at home falls apart when you both have trials scheduled; the strain on the budget in those early days when you’re paying off two sets of law school loans; playing rock-paper-scissors to decide who takes the sick kid to the office with them.

More than pillow talk

Now, from my home state of Ohio’s Board of Professional Conduct, comes a reminder about another challenge:  keeping your client’s confidential information confidential when you’re in a two-lawyer household.  There is always the temptation to talk shop, to discuss at the dinner table details of exciting work you’re doing, or even to give your spouse a leg up by sharing some work product you’ve created for your client.

It’s that last one that got two lawyers in trouble, according to the complaint filed by the Buckeye State’s Office of Disciplinary Counsel.  Two lawyers, both of whom practiced in the same area of law, first met at a trade association conference.  One had been admitted in 2001, and the other in 2010.  They dated (or “began a personal relationship,” as the complaint says), moved in together, and became engaged to be married.  They continued to practice at separate firms.

As the complaint alleges, after the lawyers moved in together, they began exchanging information relating to their clients, but without authority to do so.  More than a dozen times, said the complaint, one lawyer would forward to the other an e-mail from her client that requested a legal document — a contract, a waiver, or an opinion.  The other lawyer would respond by forwarding an e-mail with his client that attached that type of document.  The lawyers apparently didn’t scrub or redact the e-mails or the documents — rather, the exchanges revealed the identity of the clients and confidential communications that they had with their respective lawyers.

The complaint suggests that the lawyers were simply sharing the information and documents to help each other out at work.  “More often than not,” alleged the complaint, one of the lawyers “ultimately completed” the other lawyer’s work “relative to her particular client.”

The lawyer’s disclosures, over the course of nearly two years, were discovered by their respective law firms.

Discipline by consent

The result of the disciplinary complaint:  the lawyers each consented to discipline, acknowledging violations of Ohio’s version of Model Rule 1.6(a) (lawyer shall not reveal information relating to the representation of a client) and Ohio’s unique catch-all Rule 8.4(h) (lawyer shall not engage in “other conduct” that adversely reflects on lawyer’s fitness to practice law).

The lawyers also each agreed to a six-month suspension — but fully stayed on condition of no further misconduct.  The relatively light penalty is partly based on the finding that no clients were harmed.

The Board adopted the disciplinary panel’s recommendation in June — but the case is not over yet.  The Board’s recommendation now goes to the state supreme court, which can accept, or reject and modify it.

Avoiding temptation

It’s human nature to want to give professional help to your nearest and dearest when you can.  But there’s no question that sharing unredacted client documents and communications without consent can violate the duty of confidentiality — which is very broad, and extends to all information relating to the representation.  It’s hard to see how or why a client would ever consent to the kind of sharing that went on here.

My friend Brian Faughnan has an interesting take on this case, over at his blog — namely that lawyers who overshare believe the risk of getting found out is quite low because of the marital privilege.  He cautions, however, that in this digital age, things have a way of coming to light even without a spouse voluntarily providing information.

Bottom line:  Even the kind of casual sharing that falls into the category of shop talk between co-habiting lawyers can be ethically improper.  It’s hard to avoid that kind of temptation, but the necessity of doing so comes with the territory when your spouse or partner is not only a bed-fellow but a fellow member of the bar.

 

A Washington lawyer was disbarred last month by the state supreme court in a disciplinary case with an interesting array of issues:  the heavy penalties for using trust account money to “rob Peter to pay Paul;” the danger of treating the representation of a relative too casually; “compassion fatigue” as a potential mitigating factor in lawyer discipline; and the application of the Constitutional protection against double jeopardy in the disciplinary setting.

Rob Peter, pay Paul

The lawyer was a sole practitioner with a personal injury practice.  Alerted to overdrafts in his client trust account, disciplinary counsel investigated and found numerous irregularities:

  • The lawyer transferred trust account money to his operating and personal accounts when they were overdrawn or short of funds, in the process converting more than $10,000 to his own use.
  • He also failed to pay several clients the full amounts of settlements they were entitled to, and made misrepresentations to them in the process.
  • The lawyer shuffled money in and out of the trust account, using funds properly belonging to one client to pay settlement amounts owed to others.

Misusing and misappropriating client funds in these kinds of ways is the most serious ethics breach in the rule-book, and the court found violations of Washington’s versions of Model Rule 1.15 (Safekeeping Property) and Rule 8.4(c) (dishonesty, fraud, deceit and misrepresentation).  In Washington, as in many jurisdictions, the presumptive penalty is disbarment.

All in the family

Additional counts of the disciplinary complaint involved the lawyer’s representation of his nephew in a car accident case.  There was no fee agreement, but the lawyer eventually settled the case for $90,000 and took a $20,000 fee.  Later, however, after a change in Washington law, the tortfeasor’s insurer sent the lawyer more than $17,000 as an additional settlement payment.  The lawyer failed to notify the nephew, signed his nephew’s name on the check and eventually disbursed it to his office account, using it to pay bills.

The lawyer testified that his sister — the client’s mother — authorized him to negotiate the check, and that the nephew’s drug problem made it inappropriate to give the additional settlement money to him.  The sister had power of attorney over her son at one point, but it had expired long before the lawyer distributed the additional settlement funds to himself without the client’s knowledge or permission.

The court found that in addition to violating the trust account rules and converting the funds dishonestly, the lawyer violated the state’s version of Model Rule 1.4 (Communication).

“Compassion fatigue”?

The lawyer argued that the disciplinary board, which unanimously recommended disbarment, should have considered his emotional problems as a mitigating factor.  In the same year that he committed the charged misconduct, he had lost three personal injury trials in a row.  A psychiatrist testified at the disciplinary hearing that these losses and the lawyer’s over-identification with his clients led to “compassion fatigue,” a syndrome in which people in the helping professions become ill themselves as a result of working with traumatized populations.

The lawyer’s expert witness said that symptoms of “compassion fatigue” can include becoming “jaded,” and mentally disassociating from daily life, and that it had caused the lawyer to become careless and to avoid the stress of dealing with his bookkeeping.

The court accepted the concept of “compassion fatigue” as a potential mitigating factor.  Under Washington law, the mitigating factor of emotional problems requires merely some connection between the asserted problem and the misconduct; the court found that the psychiatrist’s expert testimony established that connection at least as to  some of the lawyer’s misconduct.

Nonetheless, the court said, under the totality of the circumstances, the lawyer’s emotional problems carried “little weight.”  “Compassion fatigue” did not actually cause the lawyer to forge his nephew’s signature, or convert client funds, the court said; and he testified that he was still aware of his ethical obligations.

In order to justify mitigation where the presumptive sanction is disbarment, the court noted, the circumstances must be “extraordinary.”  Here, they were not, and the failure to preserve the integrity of his clients’ funds led the court to rule that the lawyer’s emotional troubles could not reduce the sanction.

Double jeopardy and lawyer discipline

Last, the lawyer argued that being charged with multiple rule violations stemming from single instances of misconduct meant that he was being punished more than once for the same conduct, in violation of the Constitutional protection against double jeopardy.

This was an issue of first impression in Washington.  However, numerous jurisdictions have considered whether the double jeopardy clause is implicated in lawyer disciplinary proceedings, and answered “No,” and the Washington Supreme Court was persuaded by these holdings.  The weight of authority is that the sanctions for professional misconduct — reproval (or admonishment or reprimand), suspension or disbarment — are not criminal sanctions (which consist of fines or incarceration).  Thus, disciplinary sanctions are not “punishment” for purpose of the double jeopardy clause, the court held.