Can a lawyer use an advice-of-counsel defense in a disciplinary case?  The Florida Supreme Court last month accepted the defense, adopting a referee’s report in a case spotlighting the issue.

The lawyer in the case personally guaranteed a loan for his own business venture. Unable to repay the loan, and facing hard-hitting collection methods from his creditor, he filed a Chapter 7 bankruptcy petition.   His failure to disclose a potential bonus from his law firm, arising from nearly $10 million dollars in legal fees, cost the seasoned lawyer years of litigation before he was finally exonerated of ethical misconduct.

Disclose or not? 

The lawyer was required to submit certain bankruptcy schedules to the bankruptcy court prior to discharge.  While his salary and past bonuses were sure predictors of future income, he was unsure of the exact amount that he would receive from the nearly $10 million dollars in fees he generated for his firm and whether the bonus should be disclosed on the schedules.

The lawyer relied on his bankruptcy attorney’s advice and did not disclose the discretionary bonus.  The bankruptcy court denied the discharge based on the failure to disclose the bonus.  The Florida district court later affirmed and referred the matter to the Florida Bar.

Disbarment recommendation

The formal disciplinary complaint alleged that the lawyer purposely failed to disclose the bonus in the sworn schedules, in violation of Florida’s version of Model Rule 3.3(a) (“Candor Toward the Tribunal”) and 8.4(c) (barring dishonesty, fraud, deceit and misrepresentation), among other rule violations, and sought his disbarment.

The lawyer’s defenses included his reliance on his bankruptcy attorney’s advice that he was not required to disclose the potential discretionary bonus.  The initial disciplinary panel recommended an 18-month suspension, but the Florida Supreme Court remanded and ordered reconsideration of the advice of counsel defense.

At the rehearing, the lawyer provided evidence that he did not have even a basic understanding of bankruptcy law and completely relied on his bankruptcy attorney.  His bankruptcy attorney likewise testified that “although Respondent is an experienced civil litigation attorney, he was a bab[e] in the woods when it came to bankruptcy law.”  Evidence showed his bankruptcy attorney’s advice was unambiguous— that the lawyer did not have to disclose the discretionary bonus on the sworn schedules as the bonus would have been the property of the law firm until the firm awarded him the bonus.

Exoneration based on advice of counsel

Ultimately, the Florida Supreme Court exonerated the lawyer of ethical misconduct, adopting the hearing referee’s finding that there was no clear and convincing evidence that the lawyer submitted the schedules with the intent to mislead the trustee and creditors, and no evidence that he did not act in good faith reliance on his attorney’s advice.  Rather, the lawyer was found to have reasonably relied on his attorney’s advice.

Takeaways

We have considered the advice of counsel defense before, when an Illinois attorney asserted the defense after he failed to disclose to a court the fact that his client had died 8 months before the start of settlement negotiations.  There, the court rejected the defense where the lawyer asserted that his law partners had advised him that his ethical duty of confidentiality barred him from disclosing the death, although the court gave the circumstances mitigating weight.

The difference is that the Florida lawyer was held to have reasonably relied on advice of counsel in a substantive area of law he was totally ignorant of, while lawyers (like the Illinois lawyer above) are presumed to know the legal ethics rules. Thus, the Florida lawyer’s defense was exonerating, rather than mitigating. You cannot simply pass on the responsibility of knowing your ethical duties by seeking the advice of counsel; however, reliance on that advice could certainly be a mitigating factor.

Although the distinction may seem small, it could be the difference between being found guilty of misconduct or avoiding being disciplined altogether.

“Pervasive incivility” was part of a package of wrongdoing that resulted in disbarment for a D.C.-area lawyer last month.  The case sheds light on the potential, and very real, downsides when lawyers depart from professional conduct ideals.

Client authority lacking

The lawyer was admitted in Maryland and D.C., as well as Virginia, and his troubles arose from representing a plaintiff in a Fair Debt Collections Practices Act action in Virginia federal district court.  According to the Maryland grievance commission’s petition, the lawyer entered into an agreed disposition in which his Virginia license was revoked; the Maryland Court of Appeals then imposed the same discipline in August.  Law.com recently had the story here (subs. req.).

What got the lawyer into such hot water that he was disbarred in both jurisdictions?  Litigation misconduct with an add-on of unprofessionalism.

According to the lawyer’s stipulations in the Virginia disciplinary case, he filed the FDCPA suit on behalf of the client against two lawyers for American Express, who were trying to collect the client’s past-due AmEx account.  The lawyer later stipulated that he had prepared the FDCPA complaint without consulting with his client.  He also admitted that he failed to convey an offer to the client that would have settled the case because “it did not include sufficient attorneys’ fees for [the lawyer’s] benefit.”

After rejecting the offer without the client’s authority, the lawyer then made a counter-demand — also without authority — that he characterized as his “standard demand,” since he “simply had no time to do customized demands in such cases.”

The client later testified at his deposition in the FDCPA case that he had no further interest in pursuing the litigation against the AmEx lawyers, and admitted that the suit was unjustified, since he had no legal injury.  At the conclusion of the deposition, he fired his lawyer and settled with the defendant-AmEx lawyers.

The misconduct formed the primary basis for stipulations that the lawyer had violated Virginia’s versions of Model Rules 1.2 (scope of authority between client and lawyer); 1.4 (communication), 3.1 (meritorious claims and defenses) and 4.1 (truthfulness in statements to others).  The Maryland court of appeals identified its own versions of the same rules.

“Unreasonable, bordering on the malicious”

Against this background, the Maryland and Virginia authorities also noted the lawyer’s lack of professionalism.  The parties stipulated that in his pursuit of the client’s FDCPA action, the lawyer threatened to bring bar complaints against both the defendant-AmEx lawyers, and their counsel.  He also  opposed counsel’s pro hac vice admission without a good faith basis.

In addition, the lawyer engaged in “pervasive incivility” in the Virginia disciplinary case itself, said the disciplinary board, including “disrespectful conduct toward the tribunal” and “threatening outbursts both inside and outside the courtroom.”  The district court magistrate judge in the underlying FDCPA case said that the lawyer’s conduct toward the defendant-AmEx lawyers and their counsel was “unreasonable, bordering on the malicious,” and that his “apparent distaste for his opponents spawned a host of unnecessary motions” that increased the litigation’s cost and wasted the court’s time.

The district  court, adopting the magistrate’s recommendation, ordered the lawyer to pay more than $84,000 in attorneys’ fees and costs incurred by the AmEx lawyers — this on top of the license revocations in the two jurisdictions.

Professionalism pointers

The Rules of Professional Conduct in your jurisdiction constitute a “floor.”  That is, if you conform your conduct to those Rules, you should not be disciplined for ethical misconduct.  But in addition, there is the matter of acting professionally.  Here, the outcome involved both rule violations and a lack of professionalism.  Even if you have “distaste” for your opposing counsel, as the lawyer here apparently did, if you let it affect your judgment to the extent of making threats, filing frivolous motions, disrespecting the court and having “outbursts,” your license and your pocketbook might both be at risk.

Ethics authorities in New York and Georgia recently issued opposing opinions on whether lawyers can represent clients in navigating what Justice Clarence Thomas last month called the “half-in, half-out regime” related to both recreational and medical marijuana, “a contradictory and unstable state of affairs” that “conceals traps for the unwary.”  The issue, which we have commented on before here and here, is of course that cannabis remains illegal under federal law, while numerous states have liberalized their approaches to the drug.

Expanding counseling opportunities in NY

On July 8, 2021, following New York’s enactment of legislation legalizing recreational cannabis for adults, the New York State Bar Association gave attorneys the green light to counsel clients in the recreational marijuana industry. Similar to its prior opinions in 2014 and 2019 (post here) approving of attorneys counseling clients in the medical cannabis industry, the NYSBA focused on the federal government’s almost non-existent enforcement of marijuana laws in states that have legalized either medical or general adult-use marijuana.

Rule 1.2(d) of the New York Rules of Professional Conduct, like the analogous Model Rule, prohibits lawyers from assisting clients in illegal conduct.  The NYSBA found that the federal enforcement policy created a “highly unusual and unique circumstance” and that the prohibition in Rule 1.2 was not intended to “preclude lawyers from counseling or assisting conduct that is legal under state law or to provide assistance that is necessary to implement state law and to effectuate current federal policy.”

The NYSBA further opined that lawyers may use state-legal marijuana and, so long as they otherwise comply with Rules 1.7 (conflicts) and 1.8(a) (business transactions with clients), they may accept equity ownership in a cannabis business as payment for legal services.

Not peachy in the Peach State?

The NYSBA’s opinion comes on the heels of the Supreme Court of Georgia taking the exact opposite position in its June 21, 2021 order denying a motion to amend Rule 1.2(d) of the Georgia Rules of Professional Conduct.  The State Bar of Georgia had sought to amend Rule 1.2 to allow lawyers to assist clients in state-legal cannabis business, including the growth, manufacture, and sale of low-THC oil, which Georgia legalized in 2015.

In denying the motion, the Supreme Court of Georgia relied on the federal illegality of cannabis and held that passage of state laws permitting and regulating conduct that is still a federal crime does not change the long-standing prohibition against  “counseling and assisting clients in the commission of criminal acts.”  The court also noted that the requested amendment to Rule 1.2 would not necessarily be limited to state-legal low-THC oil, but “might well apply to a wide range of conduct constituting a crime under federal law that simply has no corollary state criminal sanctions,” perhaps hinting that it might leave the door open to a more-focused amendment.

 Balancing act for lawyers

While Georgia’s position appears to be in the minority, the opposing opinions demonstrate the cannabis balancing act that state ethics authorities have tried to perform. While a few states, including Oklahoma, South Dakota, and Mississippi, have not allowed an exception to Rule 1.2 to enable attorneys to advise cannabis clients, others have taken positions similar to New York’s, either through advisory ethics opinions or formal amendments to their state ethics rules. For example, Alaska, Colorado, Hawaii, Pennsylvania, Ohio, Oregon and others have amended Rule 1.2 to allow attorneys to counsel clients in state-legal conduct, including state-legal marijuana business.  (The International Cannabis Bar Association has a chart with an overview of jurisdictions and their approaches here.)

If you are considering counseling a cannabis client, you should be familiar with the relevant jurisdiction’s position on cannabis and Rule 1.2. Unsurprisingly, many commentators note that lawyers are simply ignoring ethics opinions that prohibit advising cannabis clients and some expect that will be the case in Georgia as well. That seems risky.  While it is unclear whether lawyers have yet faced disciplinary consequences for violating state ethics rules related to cannabis clients or will in the future, this is a continually developing area that requires caution.

Two recent developments in states accounting for a hefty percentage of U.S. lawyers spotlight the profession’s move toward technology-based practice models that are untethered from physical offices.

In New York, the state senate last month unanimously passed a bill that would remove the requirement — dating to 1909 — that New York-licensed lawyers residing outside New York keep a physical office in the state.  And in Florida, the state supreme court gave final approval to an ethics opinion permitting out-of-state lawyers to carry out their practices remotely from Florida.

Repeal of “an antiquated law”

In the Empire State, during a decade of litigation aimed at undoing the physical-office requirement on Constitutional grounds, the state’s high court in 2015 interpreted § 470 of the Judiciary Law as requiring lawyers licensed in New York but not residing there to nonetheless maintain a brick-and-mortar office in New York.  On May 12, the state senate overwhelmingly approved a bill that would repeal § 470.

The New York State Bar Association has strongly backed the repeal bill, citing the “antiquated” nature of the physical-office requirement, according to a report in Law360 (sub. req.).  The bar group has argued that the old requirement reduces access to legal services (especially in rural areas), and imposes unnecessary expense on lawyers.  About 25 percent of state bar members live outside New York, according to the association.

The physical-office requirement was long claimed to be justified by the need to ensure service of process on New York lawyers.  But the state bar association’s working group on the issue said that was no longer true.  And it found that “the requirement of a physical office is often onerous to non-resident attorneys, [while] there is no nondiscriminatory basis for imposing that burden.”

Following its approval by the state senate, the bill now will be considered by the state assembly, where it has already advanced out of that body’s judiciary committee.

Sunshine in the Sunshine State

As we reported last August, the Florida State Bar Standing Committee on the Unlicensed Practice of Law released a preliminary advisory opinion that considered whether a New Jersey IP lawyer could work for his New Jersey clients from the bedroom of his Florida home.  The committee said that those facts “quite simply, do not implicate the unlicensed practice of law in Florida.  Petitioner is not practicing Florida law or providing legal services for Florida residents.  Nor is he or his law firm holding out to the public as having a Florida presence.”

Now, the state supreme court has given final approval to the opinion, which gives official sanction to non-Florida-licensed snow birds and others who want to sojourn in the Sunshine State and continue to service their non-Florida clients.  The now-official opinion raises thse guardrails:

  • you can’t establish a “place of business or office” in Florida (your porch, den, etc. doesn’t count);
  • your work must be solely for your regular (non-Florida) clients, on matters that don’t pertain to “Florida law;” and
  • you can’t “hav[e] or [creat[e] a public presence or profile in Florida as an attorney.”

Work-from-anywhere

The work-from-anywhere concept was already percolating in the form of “virtual law offices” when the COVID-19 pandemic arrived and accelerated the acceptance of new practice models using remote technology to reach clients, courts and each other.  The trend is likely to persist, with more developments like the recent ones in New York and Florida, so stay tuned — literally.

Remember your first days in law school, when you were introduced to a whole Black’s Law Dictionary-worth of exotic legalese?  Words like “estop,” “arguendo” and “gravamen”?  (If you’re like us, you’ve spent your post-school days learning how to avoid this jargon and write plain English; but we digress.)  Remember “escheatment”?  The term of course refers to the process by which, after a specified dormancy period, unclaimed property eventually can become the state’s property.

All U.S. jurisdictions have some form of escheatment statute.  Effective earlier this month, our home-state of Ohio tweaked its unclaimed-funds law to clarify its application to unclaimed client funds that lawyers hold, and to direct those funds to a legal assistance foundation aimed at increasing access to justice.  The Buckeye State’s statutory change is a good opportunity to brush up on ethics duties regarding client property that lawyers hold — including if we are unable to return it to the client.

Safekeeping client property

Model Rule 1.15, “Safekeeping Property,” has been adopted in some form in all U.S. jurisdictions.  The rule emphasizes our role as a fiduciary in safekeeping all forms of client property that come into our possession and codifies the prohibition against commingling funds belonging to the client with our own funds.  Typically (and subject to some exceptions), this calls for holding in a trust account (“IOLTA’s” or “IOTA’s”) money such as pre-paid fees, retainers, flat fees paid in advance and pre-distribution settlement funds.

But what to do with money that remains in a lawyer trust account for more than the dormancy period specified by a state’s unclaimed-funds statute?  It may be that you have settlement funds that can’t be distributed because you’ve lost contact with the client.  Or you may receive a refund of court fees that a business client is entitled to — but the business has been dissolved without leaving a successor.

Such situations are rare (most jurisdictions specify that IOLTA’s are for holding funds only over a short term), but they do happen.

Here’s a clue:  You and/or your firm don’t become the owners of the unclaimed funds.  Rather, after the applicable dormancy period, the funds escheat to the state.  Your jurisdiction might also have record-keeping and reporting requirements relating to both lawyer trust accounts and unclaimed funds — either in ethics rules, bar governance regulations or by statute.

Buckeye State provisions

Ohio lawyers have always been under a statutory duty to report and remit unclaimed funds to the state department of commerce.  The new provision creates a new statutory category, however, called “attorney unclaimed funds,” defined as unclaimed funds in IOLTA’s, nondirected escrow accounts (IOTA’s) and residual settlement funds.

The new provision requires lawyers to report and to remit all such unclaimed funds, which the commerce department can then direct to the Ohio Access to Justice Foundation.  The foundation can use unclaimed funds to provide financial assistance to legal aid societies and enhance access to justice by underserved legal services consumers.

The new Ohio law does not affect an owner’s ability to make claims on the funds; under current law, all holders, including lawyers, are protected from any claims by an owner after the holder remits the funds as unclaimed.  Therefore, if a client were to come forward later, the Ohio lawyer would be immune, and the client would be required to file a claim with the state’s division of unclaimed funds.

Ohio’s foundation is the largest funder of civil legal aid in Ohio, and like many such state organizations, depends on income generated from court filing fees and IOLTA and IOTA streams. Due to the pandemic, both sources have been significantly diminished in 2020-21 as interest rates fell and case filings declined.

Oregon initiated a similar amendment to its unclaimed funds statute in 2010, and it may become a trend.

Takeaways

Unclaimed fund statutes help lawyers by letting them “clear the books” of unclaimed funds after the dormancy period, usually with indemnification against later claims by the owners.  But as always, the devil is in the details, and you should check your jurisdiction’s requirements for safekeeping client property, as well as specific unclaimed fund laws.  More jurisdictions in the future may adopt Ohio’s approach in order to increase revenue to beleaguered legal assistance foundations.

Law firms that want to include mandatory arbitration provisions in their client engagement agreements must explain to the client the benefits and disadvantages of arbitrating a prospective dispute, the New Jersey state supreme court held late last year — and merely providing a link to the arbitration rules doesn’t satisfy the requirement, the court said.  The 50-page ruling sent a legal malpractice case against a Newark-based firm back to court, where the former client had filed it, instead of to an arbitrator.

JAM-med up

The client, described in the court’s opinion as a “sophisticated businessman,” retained the 150-lawyer firm to represent him, and signed a four-page retainer agreement.  The client was invited to take his time reviewing the document and to ask any questions he had, according to the opinion.

The retainer agreement included an arbitration provision requiring any dispute about the firm’s legal services or fees to be determined by binding arbitration, and warning that the client was waiving his right to a jury trial.  The provision indicated that the arbitration would be conducted by the well-known JAMS private arbitration/mediation organization, and included a link to the 33-page JAMS rules.  As described in the court’s opinion, the client signed the retainer agreement without asking any questions.

After the representation ended, a fee dispute arose, and the law firm invoked the JAMS arbitration provision.   While that was ongoing, the client filed a malpractice claim against the firm in court, asserting that the arbitration provision violated the New Jersey Rules of Professional Conduct and his constitutional right to trial by jury.

The firm won in the trial court; the appellate division reversed in favor of the client, and the state supreme court likewise sided with the client, invalidating the arbitration provision.  In addition, the supreme court referred the issue to the state’s ethics advisory committee, so that it could give further guidance to Garden State lawyers on the scope of their disclosure duties in connection with arbitration provisions.

What’s higher than a fiduciary duty?

If the same arbitration provision were in an ordinary commercial contract, the court wrote, it would on its face have passed muster.  But, of course, unlike a vendor in a transaction, lawyers are fiduciaries.  And while all fiduciaries are held to duties of fairness, good faith and fidelity, the court said, “an attorney is held to an even higher degree of responsibility in these matters than is required of all others.”

According to the court, this ultra-high level of responsibility and the fact that it’s the lawyer who prepares the retainer agreement, means that the lawyer must make the disclosures necessary for the client to make informed decisions.  This duty, said the court, is expressed in New Jersey’s version of Model Rule 1.4(c), requiring lawyers to explain matters to the extent reasonably necessary to open the way to informed decision-making about the representation.

By virtue of their superior knowledge, lawyers are already thinking at the beginning of a representation about the “prospect that the client may be a future adversary,” and that leads lawyers to select the forum perceived to be most advantageous for resolving disputes, the court noted.  Calling that situation at least the “shadow” of a conflict, the court ruled that lawyers who insert arbitration requirements in their retainer agreements — either for fee disputes or legal malpractice claims — “must explain the advantages and disadvantages of the arbitral and judicial forums.”

ABA, courts weigh in

The court partly relied for its reasoning on the ABA’s Formal Op. 02-425 (Feb. 20, 2002) (“Retainer Agreement Requiring the Arbitration of Fee Disputes and Malpractice Claims”), which advised that binding arbitration provisions are permissible if the client “has been fully apprised of the advantages and disadvantages, and consented.”

The New Jersey Supreme Court opinion also helpfully collects cases and ethics opinions from around the country on the issue — and many of these jurisdictions bring their own twist (underscoring the need for you to be aware of your own bailiwick’s approach).

For instance, at one end of the spectrum is my own Buckeye State, where in Adv. Op. 96-9, the Board of Professional Conduct advised back in 1996, under former disciplinary rules, that a client retainer agreement “should not contain language requiring a client to prospectively agree to arbitrate legal malpractice disputes.”

Bottom line:  arbitration may be something you want to include in your retainer agreements, but you need to be savvy about complying with your jurisdiction’s requirements about client communication in order to create valid provisions.

A ruling handed down last month by the South Carolina Supreme Court provides object lessons on several aspects of the lawyer discipline system and how to stay out of trouble.  In its order and opinion, the court publicly reprimanded a lawyer who pursued a probate case all the way to the U.S. Supreme Court, engaging along the way in litigation tactics that the court found “frivolous and abusive.”

Frivolous will contest

According to the court’s disciplinary opinion, the lawyer was licensed in California, but was admitted pro hac vice in the Palmetto State, where she pressed a decade-long series of challenges to her great-aunt’s will.   The lawyer’s clients were herself and her own mother — the great-aunt’s closest living relatives.  The opposing parties were the caregivers to whom the great-aunt had bequeathed her estate.  The state supreme court affirmed the rejection of the substantive claims in 2018.   422 S.C. 234 (2018).

The next year, without going into detail, the state supreme court affirmed more than $16,000 in sanctions against the lawyer under the state’s civil Rule 11, in an opinion finding that she lacked standing to pursue the claims, that her argument in support of standing “border[ed] on frivolity,” and that she had “engaged in abusive litigation tactics.”

The U.S. Supreme Court denied certiorari.  140 S. Ct. 59 (2019).  But in the meantime, as required by the state’s Frivolous Proceedings Sanctions Act, the state supreme court had reported the Rule 11 sanction to the state’s Commission on Lawyer Conduct, launching the disciplinary proceedings.

As reported in the court’s disciplinary opinion, the hearing panel found that the lawyer had violated South Carolina’s version of Model Rule 3.1 (barring frivolous proceedings).  The court found an additional violation of  the state’s version of Model Rule 8.4(a) (making it misconduct to violate the Rules, knowingly assist or induce another to do so, or do so through the acts of another).  The panel had recommended that the lawyer receive a “Letter of Caution,” a form of confidential disposition available in South Carolina disciplinary proceedings.  But the state supreme court opted instead to publicly reprimand the lawyer, and also ordered her to pay costs.

Take-aways on pro hac vice, objectivity and more

Even though the court’s disciplinary opinion lacks detail about the underlying frivolous conduct that constituted the ethics rule violations it found, here are three things to chew on:

  • Losing your objectivity can lead to problems.    When you represent yourself and/or your family members, it can be easy to lose your way.  You may not be the most objective and best judge about the case, how far to go, and what methods are appropriate in pursuing the client’s goal.  From the scanty details given, we don’t know enough to say whether this was an issue in this case, but the risk is real and the precept is sound.
  •  You can be disciplined under another jurisdiction’s ethics rules.  This case is a good reminder that when you litigate away from your home jurisdiction, your pro hac vice admission likely requires you to comply with the away-state’s ethics rules and to accept that state’s disciplinary authority over you.  Here, a California lawyer, admitted pro hac vice in South Carolina litigation, found herself in the cross-hairs of that state’s disciplinary counsel.
  • A judicial finding of frivolous conduct can have disciplinary consequences.  When there is a judicial finding of frivolous conduct in underlying litigation, as there was here, it becomes that much easier for a disciplinary authority to conclude that a lawyer has violated Rule 3.1, which is tellingly titled “Meritorious Claims and Contentions.”  What is required, the rule comment advises, is that lawyers “inform themselves about the facts of their clients’ cases and the applicable law and determine that they can make good faith arguments in support of their clients’ positions.”

There’s more to say here (e.g.,  you can violate the ethics rules through the act of another, as was found here), but you get the point.  Even a public reprimand is a painful consequence, and watching your P’s and Q’s can help avoid it.

By now, you’re probably one of the 3.7 million people who’ve seen the video of a virtual court hearing in Texas that went terribly wrong for the county attorney.  (If not, here it is on YouTube.)   As depicted for all to see, the hapless lawyer appears on-screen as a fluffy white cat, complete with moving kitty lips as he plaintively explains to the judge that it’s a filter, and “I’m here live — I’m not a cat.”

Ethics lessons from this excruciating situation?  You’ve come to the right place!

  • Technological competence.  We’ve pointed out many times that Model Rule 1.1 cmt. [8] calls on lawyers to keep abreast of changes in the law, including the benefits and risks associated with relevant technology.  We’ve been Zooming for a year now.  Don’t let this happen to you.  Get help with any tech you aren’t comfortable with — before the hearing.
  • Professionalism.  I was struck by the poker faces of the kitty-lawyer’s opposing counsel.  They keep their composure throughout rather than dissolving in helpless laughter at the situation.  (One comes close to losing it, but still manages to keep it together.)  And the judge is extremely patient.  His voice never rises as he tries to walk the lawyer through how to take off the filter that has turned him into a fluffy feline.  In any court disaster it’s worth remembering — there but for the grace of God go you.
  • Cats and dogs.  Last, if you have to have a Zoom filter on — make it a dog, for heaven’s sake.

Here’s a newsflash:  you can’t defend yourself against a client’s bad online review by revealing client confidential information, as the ABA Ethics Committee reminded us in an opinion last week.

We’ve recently reported on the Oklahoma lawyer who was disciplined for his rogue consultant’s conduct in connection with an online review; a New Jersey lawyer who was disciplined for responding to a client’s online review by posting a bad Yelp review of his own, which revealed client information; and a Massachusetts lawyer who was disciplined for disclosing client information on Facebook.

No “self-defense”

If these cautionary tales were not enough, the ABA now has removed all doubt, with its guidance that the “self-defense” exception to the duty of confidentiality does not support revealing client information in response to an online review.

Model Rule 1.6(a), adopted in some form in all U.S. jurisdictions, bars disclosing “information relating to the representation of a client.”  That’s a very broad prohibition, and of course covers much more territory than just information that would come under the attorney-client privilege.

What the ABA has now made crystal clear is its view that the confidentiality exception expressed in Model Rule 1.6(b)(5) does not apply here.  The “self-defense” exception covers three situations that can entitle you to disclose otherwise-confidential information:

  • establishing a claim or defense in a lawyer-client controversy;
  • establishing a defense to a criminal or civil charge based on conduct in which the client was involved; and
  • responding to allegations in “any proceeding concerning the lawyer’s representation of the client.”

In its latest Opinion 496, however, the ABA flatly rules out applying these exceptions to permit any degree of confidential information disclosure in response to online reviews:  “A negative online review, alone, does not meet the requirements of permissible disclosure in self-defense under Model Rule 1.6(b)(5) and, even if it did, an online response that discloses information relating to a client’s representation or that would lead to discovery of confidential information would exceed any disclosure permitted under the Rule.”

The ABA specifically shot down any notion that the world of online reviews would fall into the third, catch-all exception for “any proceeding concerning” representing a client, saying that “online criticism is not a ‘proceeding,’ in any sense of that word, to allow disclosure under [that] exception…”

What’s a lawyer to do?

Instead of firing  back and risking your license, the ABA has several good recommendations on what you can do:

  • consider not responding — after all, doing so “may draw more attention to [the bad review] and invite further response from an already unhappy critic.”
  • ask the website or search engine to take down the adverse information;
  • if you do choose to respond online, don’t disclose “information that relates to a client matter, or that could reasonably lead to the discovery of confidential information by another.”
  • post an invitation for your critic to contact you privately to resolve the matter;
  • post a response saying that “professional considerations preclude a response.”

Any of these would be a better alternative than responding in the numerous ways that have gotten lawyers into trouble.

Commentators such as Prof. Alberto Bernabe, over at the Professional Responsibility Blog, have noted that the latest opinion does not break any new ground.  Nonetheless, it is a valuable reminder about avoiding risky online behavior, with some good how-tos.

The scope of the “no-contact rule” — barring a lawyer from communicating with represented persons — is spotlighted in a disqualification ruling that a Florida district court handed down earlier this month.  The opinion is a reminder that the prohibition against contact (without permission of the person’s counsel) extends only to “the subject of the representation.”

“Did not discuss Plaintiff’s case…”

The plaintiff sued the defendant collection agency in the Middle District of Florida for allegedly violating the federal Fair Debt Collection Practices Act; she was represented by the Agruss Law Firm.  In early November, according to the collection agency, Agruss employees contacted it twice, even though the firm knew that the collection agency was represented by counsel in the plaintiff’s case.

Based on Florida’s version of Model Rule 4.2, “Communication with Person Represented by Counsel,” the collection agency demanded that plaintiff’s counsel be disqualified based on the phone contacts.

Not so fast, responded the Agruss firm.  The law firm explained in its brief in opposition to disqualification that it frequently represents plaintiffs in FDCPA actions.  It acknowledged that on one of the dates in question a paralegal of the firm had phoned the collection agency — but it submitted unrebutted affidavit evidence that the call did not relate to the plaintiff’s case in the Florida action.  Rather, said the law firm, its paralegal had called the collection agency in order to investigate a potential FDCPA claim against the collection agency by a completely different person.  The law firm later filed a separate complaint in the Northern District of Texas against the collection agency on that person’s behalf.

A second call to the collection agency was made a few days later by a principal of the Agruss firm, who simply listened to the agency’s outgoing voicemail message, and who never spoke to anyone at the agency, according to a second affidavit.

Based on this evidence, the district court denied the plaintiff’s motion to disqualify the Agruss firm, holding that there had been no violation of the “no-contact” rule.

Must be “about the subject of the representation”

Florida’s Rule 4-4.2, like its Model Rule counterpart, provides that in representing a client, a lawyer “must not communicate about the subject of the representation with a person the lawyer knows to be represented by another lawyer in the matter,” without the consent of the other lawyer.

Although the evidence showed that the Agruss firm had contacted the defendant collection agency directly, the court said, it was about a completely different case.  Therefore, the contact was not “about the subject of the representation,” as would be necessary in order to demonstrate a violation of the rule, according to the court.

Some “no-contact rule” basics

The law firm in this case was on the right side of the no-contact rule.  As comment [4] notes, it does not bar “communication with a represented person, …  concerning matters outside the representation. ”  But  there are some fine points about Rule 4.2 (set out in the comments) that you should keep in mind, including:

  • The rule applies even though the represented person initiates or consents to the communication.
  • You may not make a communication prohibited by the no-contact rule through the acts of another. (See Model Rule 8.4(a).)
  • “Parties to a matter” may always communicate directly with each other, even though they are represented by counsel.

What about business entities?  There is a large body of cases and ethics opinions regarding contacts with current and former employees of entities.  In general, under the Model Rules’ approach, counsel for an entity can’t assert blanket representation of all the employees so as to bring them within the scope of the no-contact rule and keep opposing counsel from contact with them.  (See ABA Formal Eth. Op. 396 (July 28, 1995).)  On the other hand, contact is improper with “a constituent of the organization” who “regularly consults with the organization’s lawyer concerning the matter or … whose act or omission in connection with the matter may be imputed to the organization for purposes of civil or criminal liability.”  In contrast, as comment [7] notes, former employees of an organization are generally fair game (unless represented by their own counsel).

Seek advice if you have a no-contact rule issue.  And as we frequently say, this is an area where you need to pay attention to the relevant jurisdiction’s rules and opinions.