Disclosing client information on Facebook has gotten yet another lawyer in trouble.  A Massachusetts attorney was publicly reprimanded earlier this month for posting details of a guardianship case on the social media site, in violation of the Bay State’s version of Model Rule 1.6 (“Confidentiality of Information”).  The Board imposed a public reprimand, rejecting an argument that the only people who would have recognized the case from the information posted were the parties themselves.  The case highlights the risk of posting even information you have tried to anonymize.

“Back in the Boston office …”

After representing his client at a hearing in juvenile court, the lawyer (a member of the bar since 1977) posted on his personal Facebook page, which was public and had no privacy setting:

I am back in the Boston office after appearing in Berkshire Juvenile Court in Pittsfield on behalf of a grandmother who was seeking guardianship of her six year old grandson and was opposed by DCF [i.e., Department of Children and Families] yesterday.  Next date — 10/23.

Two people responded to the post.  A Massachusetts lawyer who was a FB friend asked, “What were the grounds for opposing?”  The lawyer answered, “GM [i.e. grandmother] will  not be able to control her daughter, the biological mother, and DCF has concerns.”  The friend responded (sarcastically), “DCF does have a sterling record of controlling children and questionable mothers, after all.”  The lawyer replied, “Indeed.”

A second FB friend, this one a non-lawyer, also responded:  “So what’s the preference … Foster care?  What am I missing here?”  The lawyer answered:

The grandson is in his fourth placement in foster care since his removal from GM’s residence in late July. I will discover what DCF is doing or not doing as to why DCF opposes the GM as guardian.  More to come.

Within a couple months, the lawyer’s client learned from her daughter about the lawyer’s FB post.  She later  complained to him and eventually to disciplinary authorities.

Connecting the dots?

The lower hearing committee recommended dismissing the disciplinary case, concluding that the FB post couldn’t reasonably be linked to the client, and therefore there was no confidentiality violation under Rule 1.6.  But the Board rejected that conclusion, because the post disclosed sufficient information to make it clear to the client’s daughter that the post referred to her mother. That belied the notion that no one could identify the case and learn confidential information from the post.

“Even if there were no evidence that a third party actually recognized the client in the post,” said the Board, “we would still conclude that the respondent had violated Rule 1.6(a).  There is no requirement that a third party actually connect the dots.”  Rather, the Board ruled, it was enough if it were “reasonably likely that a third party could do so.”

This was no mere hypothetical, or “shop talk” among lawyers the Board said.  The lawyer’s FB post did not seek advice from other lawyers, in the Board’s view, or have “any other purpose that would have served his fiduciary duty to his client.”  Rather, he violated the duty to “jealously guard … client secrets.”

The lawyer in this case had apparently practiced for 42 years without any other disciplinary history.  The Board brushed off his lack of previous discipline and said it was entitled to no mitigating weight.  Instead, the Board regarded the lawyer’s long experience as an aggravating factor, since “he should understand the importance of protecting client confidences.”

Be careful out there

Do we need to say it again?  Don’t even get close to talking about the specifics of your clients’ matters on social media.  Even if you try to disguise identities and details, that might not be enough to keep you out of trouble.

After hard-fought proceedings, you’ve finally settled a contentious case on behalf of your client.  The plaintiff’s lawyer has brought suit against your client before, and likely will again:  the lawyer advertises and uses social media aggressively to locate claimants who have the same kind of issue with your client.

Your client asks, “Can’t we include terms in the settlement agreement that would rein in this lawyer?  Maybe raise the settlement amount enough to get her to agree to stop taking these cases?  Or at least, get some language that would stop the blog posts and the TV ads fishing for clients to sue us?”

The answers:  “No — and no.”  A new ethics opinion from Ohio’s Board of Professional Conduct underscores the point.

Restrictions on right to practice

Model Rule 5.6(b), adopted with only minor variations in almost every jurisdiction,* bars you from “participating in making or offering” a settlement agreement that includes a restriction on a lawyer’s right to practice.  The new Ohio ethics opinion expressly extends that prohibition to settlement agreements conditioned on restricting a lawyer’s communication of information “contained in a court record.”

A settlement agreement can certainly bar both sides from disclosing non-public information (such as settlement terms, conditions and amount), and those are common clauses.  But preventing counsel from making a public announcement, or communicating to the media, or advertising about the case using information contained in case documents, violates Rule 5.6, said the Ohio Board.

The Board reasoned that an agreement prohibiting a lawyer from using public information interferes with the ability to market legal services in a way otherwise consistent with the Rules of Professional Conduct.  It also interferes with “the public’s unfettered ability to choose lawyers who have the requisite background and experience to assist in pursuing their claims.”  Rule 5.6(b) “prevents settlement agreements from being used to ‘buy off’ plaintiff’s counsel … in exchange for the lawyer foregoing future litigation against the same defendant.”  The Board also mentioned the conflict that such agreements create “between the interests of current clients and those of potential future clients.”

Expansive readings

The ABA Ethics Committee, as well as ethics committees in New York and the District of Columbia, have reached similar expansive conclusions about the reach of Rule 5.6(b).  The ABA Committee particularly disapproved in 2000 of settlement agreements conditioned on not “using” information in later representations against the same opposing party or related parties.  And the D.C. ethics opinion notes that the fact of settlement is usually reflected in public documents, thus making it a rule violation to condition the agreement on non-disclosure of that fact.

Underlying these opinions, as the D.C. ethics committee said, “is the intent to preserve the public’s access to  lawyers who, because of their background and experience, might be the best available talent to represent future litigants in similar cases, perhaps against the same opponent.”

Not a limit on duty of confidentiality

The Ohio opinion, and others, should not be read to alter your duty of confidentiality to your client.  Under Rule 1.6, absent client consent and other narrow exceptions, you already have a duty to keep confidential all information relating to the representation — and that would include otherwise public information, as we’ve noted before.  In contrast, the opinions centering on Rule 5.6(b) are about your ability to offer or accept settlement agreements restricting the right to practice.

Further, as Hofstra Professor Emeritus Roy Simon explains in his treatise on New York ethics law, you can get into ethics trouble even if a court might otherwise enforce the settlement agreement:  “A lawyer who makes or agrees to [a settlement in which a lawyer promises not to represent a client in later disputes with your client] risks professional discipline even if a court later holds that the agreement is enforceable.”

Client ABC’s — and the nuclear option

The restriction against participating in a settlement agreement aimed at reining in opposing counsel is a part of the ethical landscape that clients may not understand — especially when you need to turn down a request to pursue something that would be to the client’s advantage.

This is an issue that certainly merits explanation under Rule 1.4 in order to “permit the client to make informed decisions regarding the representation.”  And you also must “consult with the client about any relevant limitation on the lawyer’s conduct when the lawyer knows that the client expects assistance not permitted by the Rules of Professional Conduct or other law.”

The new Ohio opinion cautions that if worst comes to worst, and the client insists that you participate in accepting or offering settlement agreement with an impermissible condition, Rule 1.16(a)(1) requires you to withdraw from representation, in order to avoid violating Rule 5.6.  Hopefully you won’t need to exercise that nuclear option.

* An exception to the nearly-nationwide approach is Virginia’s Rule 5.6(b), which carves out settlement agreement restrictions on a lawyer’s right to practice that are approved by “a tribunal (in such situations as the settlement of mass tort cases) or a governmental entity.”

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

Duty “extends generally”

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

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

Don’t hype the hypo

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

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

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

Trial publicity statements

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

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

Folder searchIn late December, a divided California Supreme Court ruled that legal-fee bills in closed cases aren’t necessarily covered by attorney-client privilege.  Although the case involved a discovery demand  sent to a government entity under the state’s  public records act, some lawyers have questioned (sub. req.) how far the privilege limitations might go.

No “categorical” protection

The case arose out of a public-records request from the ACLU of Southern California to the Los Angeles County Board of Supervisors, seeking legal fee invoices that would reveal law firm billings to the county regarding nine lawsuits, each of which alleged the use of excessive force against inmates in the L.A. County jail system.  The ACLU alleged that the county and its outside lawyers were pursuing “scorched earth” tactics in refusing to settle excessive-force cases, and were using taxpayer dollars to do so.

Three of the cases were closed; the county agreed to produce copies of those legal bills.  But as to the six still-pending suits, the county said that they were exempt from the reach of the public records law under the attorney-client privilege exception, because “the detailed description, timing, and amount of attorney work performed … communicates to the client and discloses attorney strategy, tactics and thought process and analysis.”

On dueling writs of mandate, the intermediate state court of appeals found that the invoices were privileged and exempt from disclosure under the public record act.   In a 4-3 vote, the state supreme court reversed.

The high court rejected “categorical protection” for billing records.  Acknowledging that attorney-client privilege “no doubt holds a special place in the law of our state,” the majority wrote that it still only protects communications “made for the purpose of seeking or delivering the attorney’s legal advice or representations.”

Agreeing with the ACLU, the majority opinion said that “while invoices may convey some very general information about the process through which a client obtains legal advice, their purpose is to ensure proper payment for services rendered, not to seek or deliver that attorney’s legal advice or representation.”  Fee bills, the court said, evoke “an arm’s -length transaction between the parties in the market for professional services” more than they do the “discreet conveyance of facts and advice.”

Information in the “heartland”?

What remains privileged in a fee bill, however, said the court, is information that “lies in the heartland of the attorney-client privilege” — namely everything in an invoice on an active and pending legal matter — even when the information is  conveyed in a document, i.e. the  bill,  that is not “categorically privileged.”

The dissenters said that the majority’s ruling undermines a “pillar of our jurisprudence” by adding a “heretofore hidden meaning” to the state privilege statute, by shielding only communications that relate to the provision of legal consultation, even if they were otherwise transmitted confidentially between lawyer and client.

Following the majority’s rule, the dissenters wrote, means that lawyers must explain to their clients that confidential communications that were previously privileged “may be forced into the open by interested parties once the subject litigation has concluded.  If a limiting principle applies to this new rule,” the dissent warned, “it is not perceptible…”

Privilege takeaways

The contents of fee bills have long been subject to attorney-client privilege when they reveal information about strategy, research topics and the like.  As even the majority in this case notes, things like research topics or an uptick in the hours charged can be useful information to litigation opponents.  But as California commentators point out, the case will likely be read as a narrowing of the privilege, and by introducing subjectivity into the test, will possibly encourage discovery forays against the fee bills of opposing counsel.

California lawyer Ellen A. Pansky, quoted in the ABA/BNA Lawyers’ Manual on Professional Conduct, noted that “the case leaves an interesting, unanswered question: What mechanism will courts use to resolve a privilege claim when a party asserts attorney-client privilege to only portions of invoices previously transmitted in a completed prior matter?”  This might be an acute question, because California law seems to be that a court may not compel disclosure of attorney-client communications, even in camera, to rule upon a claim of privilege.

Particularly if you have cases in which California privilege law applies, stay tuned.

StorageYou’re chatting with your pals at the bar association cocktail hour, and talk turns to the indictment just handed down against a former city official.  Someone says, “Hey, didn’t your firm used to represent her?”  “Yes,” you reply, “and a couple years ago, I had a really interesting case involving her.  Maybe I shouldn’t discuss it — but I guess it’s of public record, so….”  And with that, you’re off to the races, discussing your former client’s old case.  Have you done anything wrong, since it’s all “of public record”?

“Publicly available” vs. “generally known”

Model Rule 1.9(c)  says that when you have formerly represented a client in a matter, you shall not thereafter:

(1) use information relating to the representation to the disadvantage of the former client except as these Rules would permit or require with respect to a client, or when the information has become generally known; or

(2) reveal information relating to the representation except as these Rules would permit or require with respect to a client.

Comment [8] notes that formerly representing a client “does not preclude the lawyer from using generally known information about that client when later representing another client.”

But significantly, just because information might be a matter of “public record,” or “publicly available” in a court filing, does not necessarily mean that it is “generally known” within the meaning of the ethics rules.  That’s the holding of a case decided last month by the Pennsylvania Superior Court, Dougherty v. Pepper Hamilton LLP, et al.

Disloyal use?

The ruling in Dougherty revives a union official’s suit against the Pepper Hamilton firm for breach of fiduciary duty.  The firm had formerly represented the official when he was subpoenaed by a grand jury as part of a federal bribery investigation.  An FBI affidavit was part of that investigation; it was later mistakenly filed on the federal court’s electronic PACER system.  Subsequently, the firm represented the Philadelphia Inquirer in defending a defamation suit by the same official against the newspaper.  In representing the newspaper, Pepper Hamilton used the FBI affidavit.

The official alleged that the firm breached its duty to him by using information from the former representation, including the FBI affidavit.  Pepper Hamilton countered that since the information was “publicly available,” it could not form the basis of a disloyalty claim.

The state court of appeals agreed with the official, reversing the lower court’s grant of summary judgment in favor of the law firm.

Duty of confidentiality not “nullified” by public record

Whether information is “generally known” for purposes of Rule 1.9, said the court, depends on the circumstances.  The court said that publicly-accessible electronic data could be “generally known” if it is easily accessible, such as through public indexes.  But information is not generally known if it would be difficult or expensive to obtain or would require special knowledge.

Quoting opinions from Ohio and West Virginia, the Dougherty court noted that “an attorney is not free to disclose embarrassing or harmful features of client’s life just because they are documented in public records or the attorney learned of them in some other way,” and that “the ethical duty of confidentiality is not nullified by the fact that the information is part of a public record or by the fact that someone else is privy to it.”

There were genuine issues of fact, the court said, about whether the FBI affidavit was actually “generally known,” and these questions were enough to keep the case against the law firm alive.

Your lips are sealed

In all, the safest thing to do at a cocktail party is to keep quiet about information you know as a result of formerly representing a client, even if you think that it is of “public record.”  That’s the best way to steer far clear of any chance of misconduct.  And when it comes to “using” information of a former client on behalf of another client, careful analysis is required before you conclude that the “generally known” exception applies.

Like it or not, artificial intelligence is not going away and it’s evolving—quickly.  While AI talk has been brewing for quite some time, many of us assumed AI’s direct effect on our business was still years off.  But over the last year the pace of development and use has accelerated exponentially and it is now obvious that lawyers must address numerous AI issues head on. Technological and societal changes often outpace the law, but lawyers remain ethically bound to stay abreast of changes in the law, including relevant technology. So, where do lawyers turn for ethical guidance when, as one authority has noted, “even for those who create generative AI products, there is a lack of clarity as to how it works?”

Recent guidance and resources

California’s Practical Guidance Executive Summary is one great resource. The Florida Bar Board of Governors’ Review Committee on Professional Ethics has issued Proposed Advisory Opinion 24-1. Also leading the charge, Michigan issued an ethics opinion, which confirms that judges have an ethical duty to understand artificial intelligence. Ethics counsel for the North Carolina State Bar also lists several ethics rules lawyers should be considering when using AI.

The American Bar Association recently created its Task Force on Law and Artificial Intelligence.  The New York State Bar Association created their own AI Task Force as well. Stay tuned for additional guidance from local and state bar associations.

Watch out for these ethics rules   

The Rules of Professional Conduct are written broadly enough to cover AI, even if the words “artificial intelligence” cannot be found in the rules or comments. While AI issues are easily found in several other rules, here are the most rules most often implicated:

  • 1.1 (Competence) Lawyers have a duty to provide competent representation. Do not overly rely on AI. Before using an AI tool, lawyers should have a reasonable degree of understanding.
  • 1.4 (Communication) Lawyers have an ethical duty to keep their clients reasonably informed, which will vary based on the circumstances and may include the use of AI.
  • 1.5 (Fees) Lawyers should not overcharge clients for time saved by using AI. Lawyers should be clear about who is paying for the costs associated with AI.
  • 1.6 (Confidentiality)  Lawyers must protect the confidential information of their client, including from inadvertent disclosure. This may necessitate working with IT and asking for client consent in advance.
  • 5.1 and 5.3 (Supervision) Lawyers must ensure proper training, supervision, and adherence to policies.  
  • 8.4 (Misconduct) AI systems may be trained on biased information. Lawyers must be watchful in identifying and addressing biases in AI tools to make certain they provide fair and unbiased legal services to their clients. Lawyers should continue learning about AI biases and their impact on the legal practice.

A few other practical tips

  • Start looking for changes in local rules and standing orders governing use of AI in the courtroom. For instance, the United States Court of Appeals for the Fifth Circuit has proposed to amend its rule to require lawyers and pro se parties alike to certify that no generative AI program was used to draft the document presented for filing, but if generative AI was used, that a human has reviewed the material for accuracy and approved it as well.
  • Always review documents and pleadings for accuracy before submitting to your client or the court!
  • AI for legal purposes is not cheap.  It can be priced many different ways that cost may increase over time.  So it is now the time to consider how AI will factor into the firm budget and pricing structures.  That also means that prudent lawyers will discuss he use of AI with their clients, including an understanding as to who is footing the bill.
  • Pay close attention to detect AI provisions in agreements, engagement letter, and outside counsel guidelines.
  • Watch out for Unauthorized Practice of Law (UPL) issues by leaving tasks that require legal judgment solely up to AI.

If you have not heard of the Corporate Transparency Act (CTA), now is the time to become familiar. Millions of companies will be affected by its reporting requirements. With the effective date being right around the corner, all lawyers need to be thinking about the CTA. The CTA, which Congress passed as a component of the Anti-Money Laundering Act of 2020, was created to enable the government to prevent, detect, and combat money laundering, the funding of terrorism, and other prohibited activity by requiring certain companies to report their beneficial ownership information to the Financial Crimes Enforcement Network division of the U.S. Department of the Treasury (“FinCEN”). There are still some moving parts with the CTA. For example, the reporting form is not yet available. However, the ethical implications inherent in CTA compliance must be considered now.

Reporting Companies & Beneficial Ownership

Companies that are deemed to be “Reporting Companies” are required to report beneficial ownership to FinCEN. There are two types of ”Reporting Companies”: Domestic Reporting Companies and Foreign Reporting Companies. There are currently twenty-three (23) exceptions that exempt entities that would otherwise be considered a Reporting Company. Lawyers and law firms alike will want to consider whether they intend to assist clients in ascertaining whether the client is a “Reporting Company.”

A beneficial owner is an individual who either directly or indirectly: (1) exercises substantial control over the reporting company, or (2) owns or controls at least 25% of the reporting company’s ownership interests. However, the Reporting Company does not have to report an individual as a beneficial owner to FinCEN should that individual fall under one of the five qualifying exceptions to the beneficial owner definition. Similarly, lawyers will want to consider whether they intend to assist clients in determining whether an individual qualifies as a beneficial owner.

Of specific interest to attorneys – the CTA also requires up to two “company applicants” to be identified for entities formed after January 1, 2024.  This may implicate law firms if they are involved in the preparation or filing or formation documents for clients.  The lawyers or paralegals providing those services would have the corresponding obligation under the CTA to register with FinCEN as a company applicant for the client.

Timing & Penalties

If an entity was formed before January 1, 2024, its report must be filed with FinCEN no later than January 1, 2025. Entities that are formed on or after January 1, 2024, have only ninety calendar days to file the report. Companies only have thirty days to report a change. Lawyers who intend to prepare and file CTA reports, monitor for changes in “Beneficial Owners” that would trigger an update, or otherwise dive into CTA related representations, must bear in mind that the CTA includes stiff civil fines and criminal penalties, such as potential imprisonment.  Failure to comply not only impacts clients but can lead to potential penalties for firms and for individual lawyers involved in violating its provisions.

Abundance of Ethical Considerations

The effect of the CTA is far reaching. Many practitioners will feel the impact it has on their practice, but all practitioners should know about it. Lawyers have a duty to stay abreast of changes to the law and the reporting requirements found in the CTA certainly qualify as a change. For example, the CTA likely implicates the provisions you want to include in employment agreements, shareholder agreements, or LLC operating agreements to require beneficial owners to provide the information needed by the entity to comply with the CTA’s reporting requirements.  In addition, due diligence for loans, mergers and acquisitions will likely need to include CTA compliance.   

Lawyers also have a duty to keep their current clients reasonably informed about the representation. While there is no duty to notify former clients, lawyers will want to be diligent in notifying current clients about the CTA. Now is the time to determine if the client is former or current.

Don’t wait until January to determine your firm’s capacity or desire to handle CTA related engagements and how it impacts various practice areas. Limitations on the scope of your representation will need to be clearly communicated with your clients. You will want to evaluate any third-party referrals for CTA filings and corporate formation filings.  If your firm will play a role in corporate formations and filings, you will want to consider who will be responsible for such filings and how to track and update FinCEN registration for those individuals.  Finally, you will want to start thinking of changes in firm policy and procedure that align with your level of involvement in CTA related representations, and ensure all staff are properly trained and supervised to comply accordingly.

The ABA Standing Committee on Ethics and Professional Responsibility, (the Committee”) recently issued Formal Opinion 508—which highlights the differences between proper witness preparation and unethical “coaching.” The Opinion also sheds light on how remote platforms have paved the way for easier and less detectable means of improper coaching.

What is allowed?

Discussing testimony with your clients can become necessary to their representation, but a lawyer cannot seek to improperly influence the testimony—and there is no bright line rule to make the distinction.  You must be thorough in your witness preparation or else fall short of your duty of competence. It is always permissible for lawyers to remind their clients to tell the truth during witness preparation. Similarly, it is acceptable practice to remind your client that they are under oath, explain to them that a truthful answer could be “I do not recall,” suggest proper attire, decorum, and demeanor, explain the nature of the testimonial process and purpose of the deposition. It Is likewise proper for the lawyer to provide context for the witness’s testimony, to inquire into the witness’s probable testimony and recollection and even identify other testimony that is expected to be presented and explore the witness’s version of events considering that testimony.

Witness preparation conduct that crosses the ethical line

Interaction with witnesses before and during testimony can both raise ethical issues.  Model Rule 3.4(b) prohibits a lawyer from advising or assisting a witness in giving false testimony (and probably Model Rule 1.2(d) and Model Rule 3.3(a)(3) as well). The Committee points out that encouraging false testimony can occur even if a lawyer does not instruct the witness to lie—such as telling a witness to downplay facts (such as the number of times they met with the lawyer to prepare). Lawyers must be careful when suggesting words to use or avoid, making sure that the taking of such advice does not result in the delivery of false testimony. Likewise, allowing your client to testify to fabricated evidence is an ethical violation.  It is also unethical for lawyers to advise clients or witnesses to disobey a court order regulating discovery or the trial process, offering an unlawful inducement to a witness, or procuring a witness’s absence from a proceeding.

Conduct during witness testimony that crosses the ethical line

Refining witness testimony during trial or deposition can also present ethical considerations. Manipulating testimony that is actually in progress would generally violate Model Rule 8.4(d)—conduct prejudicial to the administration of justice. Model Rule 3.4(c) would also be violated by failing to adhere to a court order restricting coaching behavior.  Many jurisdictions, for example, have specific rules about the content of objections made during a deposition.  “Speaking” or “suggestive” objections go beyond stating the basis for the objection and are suspected of being intended to impede the deposing lawyer’s discovery. Objections should not be used to instruct a witness how respond to the questions. Lawyers must also avoid physically signaling to their witnesses during testimony.

Remote considerations

              Formal Opinion 508 also addresses the fact that remote platforms and other technology provide ample opportunity for lawyers to secretly tell witnesses what to say or signal what not to say during proceedings. With changes in the legal practice, it is not uncommon that a witness, lawyer, and adjudicative officer could be sitting in three different locations during a remote proceeding. Sitting “off camera” makes it relatively easy to signal a witness without being detected. While it is improper for a lawyer to text or otherwise message a witness in the middle of a proceeding, one can see how it is effortlessly accomplished.  Lawyers have a duty to maintain a degree of technological competence. Understanding the risks involved with coaching in remote settings will allow lawyers and adjudicative officers to structure remote proceedings in a way that will help to deter its occurrence and increase detection.

The Committee concludes by suggesting several approaches to systematically address such conduct, though it points out that the approaches are not required under the Model Rules. Suggested methods include skillful cross-examination (questioning the witness as to the extent of any coaching), court orders directing uninterrupted testimony, and inclusion of protocols in remote deposition orders, scheduling orders, and proposed discovery plans. 

Rule 1.8 addresses conflicts that can arise between a lawyer and client (as opposed conflicts between clients).  Prior to the adoption of Model Rule 1.8 in 1983, the ABA Model Code flatly prohibited agreements limiting liability. DR 6-102(A) provided that “A lawyer shall not attempt to exonerate himself from or limit his ability to his client for his personal malpractice.” This rule was in stark contrast to the rules governing many others, including large accounting firms and lawyers in Europe, who often had agreements limiting their liability to clients for their work on deals alongside American lawyers who could not limit their liability (which raised numerous problems with potential disproportionate liability for deals gone bad). 

Model Rule 1.8 (adopted in 1983) softened the complete ban, adding conditions to make such prospective agreements permissible, yet still protecting client’s best interests in requiring the advice of independent counsel.  The first part of the Rule would then read “A lawyer shall not make an agreement prospectively limiting the lawyer’s liability to a client for malpractice unless permitted by law and the client is independently represented in making the agreement…” This amendment put some American lawyers on the same footing as colleagues here and abroad, but it was not widely adopted.

In 2002, the ABA again amended Model Rule 1.8(h), to eliminate the “unless permitted by law” requirement. The drafters supported the deletion by explaining that they were not aware of any such law.  Model Rule 1.8(h)(1) now states that “A lawyer shall not make an agreement prospectively limiting the lawyer’s liability to a client for malpractice unless the client is independently represented in making the agreement”.

Today, some states have adopted the revised rule.  And many of the states that have amended their version of Rule 1.8 deviate from the language found in Model Rule 1.8, resulting in varied degrees of permissibility as to whether their lawyers may prospectively limit malpractice liability to clients.   Approximately 28 states have adopted the language in Model Rule 1.8(h)(1) entirely. Seven states have similar language to that of the Model Rule but have added the requirement that such agreement must also be “permitted by law”. Nine states still outright prohibit such prospective agreement. The seven remaining states have language that does not squarely  fit into any of the aforementioned categories. The reasons for wanting to limit your liability in any given situation are likely obvious, but whether or how you should pursue such endeavor is far less clear.  

 Choose your language wisely  

Attorneys licensed in multiple jurisdictions and law firms spanning across multiple states must be keenly aware of any differences in the applicable rules.  Even in jurisdictions that permit lawyers to prospectively limit malpractice liability, lawyers must be careful to stay within the confines of the rules when drafting.  Ohio reminds lawyers that (their) Rule 1.8 allows for the prospective waiver of malpractice claims under certain conditions, but such permissibility does not extend to disciplinary proceedings.  Limiting malpractice claims is not synonymous with limiting the client’s ability to file a disciplinary grievance. Using the wrong language could subject the lawyer to additional rule violations.  Requiring a current or former client to refrain from filing a disciplinary grievance constitutes conduct prejudicial to the administration of justice under Rule 8.4(d) and conduct adversely reflecting on fitness to practice law under Rule 8.4(h).  

In Illinois, the Rules do not permit lawyers to prospectively agree with their legal clients that advice given to such clients in connection with insurance or investment products is not intended to be and should not be deemed legal advice, even if such determination could be reliably made. The Committee opined that such agreement is effectively one that prospectively limiting the lawyer’s liability to the client. Such agreements are prohibited by Rule 1.8 unless the requisite conditions are satisfied.

Wide spectrum of issues

Merely refraining from plugging in prospective agreements into your engagement letters will not ensure Rule 1.8 compliance. Lawyers barred in jurisdictions like DC, where such agreements are forbidden, must still examine less obvious conduct that may constitute a Rule 1.8 violation. For instance, many attorneys sit on boards of various entities.  DC Opinion 382 reminds lawyers that while directors on boards can limit liability to an entity, a director may not do so, if he or she is a lawyer, otherwise it violates the rule. 

While New York similarly prohibits lawyers from prospectively limiting malpractice liability, one New York opinion found that 1.8(h) is not violated simply due to a lawyer advising a client to accept a plea deal that includes waiving an ineffective assistance of counsel claim on appeal.  The basis was that advising the client does not constitute “making an agreement” and the giving of such advice does not make the lawyer a party to such agreement.  Plus, the lawyer could still be sued for malpractice.

What about employment concerns? Georgia opined that in-house lawyers employed by corporations do not violate 1.8(h) by entering into agreements with their employers which hold the lawyer harmless for malpractice committed within the course of his or her employment, if the employer is exercising an informed business judgment in utilizing the “hold harmless” agreement in lieu of malpractice insurance on the advice of counsel and the agreement is permitted by law.  The position of the client as employer and the sophistication of those who employ in-house counsel satisfies the concerns of overreaching. Plus, such agreement does not limit liability to third parties affected by in-house counsel representation. 

How about the structure of the firm? Mississippi opined that changing the form of practice from a professional corporation or general partnership to a “Professional Limited Liability Company” does not equate an agreement to limit liability under M.R.C.P. 1.8(h).

More than meets the eye

Lawyers may falsely see a green light if their state allows for the prospective limitation of malpractice liability. Prospectively limiting malpractice liability is a conflict of interest and compliance requires satisfaction of the Rule 1.8 conditions. Lawyers must be careful in choosing which words should or shouldn’t be used in the agreement. Lawyers in all jurisdictions, including where such agreements are prohibited, must also look beneath the surface of their conduct, and ultimately contemplate whether such conduct indirectly violates Rule 1.8(h).

Multijurisdictional practice can make any lawyer’s head spin, especially for lawyers licensed in multiple jurisdictions. The ABA Standing Committee of Ethics and Professional Responsibility, (the “Committee”) recently issued Formal Opinion 504, which breaks down the choice-of-law rules found in Model Rule 8.5.

Litigation

Model Rule 8.5(b)(1) provides that, for conduct in connection with a matter pending before a tribunal[1], ethics rules of the jurisdiction in which the tribunal sits shall apply.

  • Scenario: State A allows firms to have nonlawyer partners. State B adopted Model Rule 5.4, prohibiting firms from having nonlawyer partners. Lawyer is only admitted in State A. Lawyer’s office is in State A. Lawyer will appear pro hac vice before a State B tribunal. Will ethics rules in State B prevent Lawyer from sharing fees earned on the case with nonlawyer partners?
  • Answer: The ethics rules of the tribunal (State B) would apply to conduct in that tribunal’s matter, including conduct in representing the client in the proceeding and in dealings with the tribunal, opposing counsel, and opposing party. However, law firm structure is not “conduct in connection with a matter pending before a tribunal.” Accordingly, Lawyer would conduct that analysis through Rule 8.5(b)(2), which is discussed in the next section.

Non-litigation

Model Rule 8.5(b)(2) provides that for any other conduct (i.e., not connected with a matter before a tribunal), ethics rules of the jurisdiction where the lawyer’s conduct occurred will govern. However, if the “predominant effect” is in a different jurisdiction than where the conduct occurs, the rules of that jurisdiction apply.  

  • Scenario: Lawyer is admitted and works out of State X, but is also admitted in State Y. Client lives in State X and hires Lawyer to file litigation in State Y. When drafting the fee agreement, which state’s ethics rules apply?
  • Answer: “Securing a fee agreement is “conduct in anticipation of a proceeding not yet pending before a tribunal” and, therefore, Rule 8.5(b)(2) applies.” The predominant effect would be in State X, so State X’s Rule 1.5 governs. 

The Opinion offers factors to determine where the “predominant effect” of the lawyer’s conduct occurs, including: (1) client’s location, residence, and/or principal place of business; (2) where the transaction may occur; (3) which jurisdiction’s substantive law applies to the transaction; (4) location of the lawyer’s principal office; (5) where the lawyer is admitted; (6) location of opposing party and relevant third parties (residence and/or principal place of business); and (7) jurisdiction with greatest interest in the lawyer’s conduct.

  • Scenario: Lawyer is licensed in State A and B. Lawyer’s office is in State A, which follows Model Rule 1.6. Conversely, State B does not follow Model Rule 1.6 and therefore requires a lawyer to disclose information relating to the representation to the extent the lawyer reasonably believes necessary “to prevent reasonably certain death or substantial bodily harm. State A permits but does not require the revelation of such information. Lawyer is representing Client/Buyer, who lives in State B, with the purchase of State A real estate. Negotiations occurred at Buyer’s place of business in State B. Client/Buyer threatened to seriously physically harm Seller at the next meeting if Seller won’t accept Buyer’s terms. Lawyer reasonably believes Client will act on his threat. 
  • Answer: This matter is not before a tribunal, and therefore Rule 8.5(b)(2) applies. Lawyer must look to the “rules of the jurisdiction in which the lawyer’s conduct occurred, or, if the predominant effect of the conduct is in a different jurisdiction, the rules of that jurisdiction.” Lawyer must weigh the aforementioned factors. Both States are involved. But ethics rules from State B would likely govern as Client/Buyer resides in State B, the threat was made in State B, and the next meeting where the threat would be carried out would likely occur in State B, as that is where past meetings have been held.  

Safe Harbor

The Committee highlighted the safe-harbor provision in Model Rule 8.5(b)(2).  The last sentence provides “A lawyer shall not be subject to discipline if the lawyer’s conduct conforms to the rules of a jurisdiction in which the lawyer reasonably believes the predominant effect of the lawyer’s conduct will occur.”

Summary

While many states have adopted Model Rule 8.5, others have their own variations.  As the Committee points out, in reference to Massachusetts, variations of the Rule may lead to a different analysis. The ABA provides a state-by state guide simplifying Rule 8.5 distinctions. Be sure to check your jurisdiction(s) and think not just about what you are doing, but also where the predominant effect of your conduct may occur.


[1]  ABA Model Rule 1.0 (m): “Tribunal” denotes a court, an arbitrator in a binding arbitration proceeding or a legislative body, administrative agency or other body acting in an adjudicative capacity. A legislative body, administrative agency or other body acts in an adjudicative capacity when a neutral official, after the presentation of evidence or legal argument by a party or parties, will render a binding legal judgment directly affecting a party’s interests in a particular matter”.