Do you toil in the pressure cooker of a firm, but dream of going in-house? Many lawyers have that goal.  But the churn works in the other direction, too, with in-house lawyers migrating to firms or solo practice.  When they do, they can face conflict of interest issues leading to disqualification, as a former in-house lawyer for Rolls-Royce discovered earlier this year.

A luxury ride

Donald Little was in-house counsel for Rolls-Royce for more than 10 years.  A couple years after he left, he represented Rolls-Royce as outside counsel in a suit by Davis S.R. Aviation, defending against allegations that Rolls-Royce made false statements about airplane engine parts in order to prevent Davis from selling engines on the open market. That case settled.

Then, in 2016, a different plaintiff filed suit against Rolls-Royce under the False Claims Act, but based on the same constellation of facts as Davis, centering on the alleged use of defective parts in a U.S. Air Force aircraft.  The qui tam plaintiff alleged that Rolls-Royce improperly used the parts, resulting in a crash, and that it submitted false documents and invoices for payment to the air force.

Little became one of the lawyers for the qui tam plaintiff in the False Claims Act case.

Rolls-Royce moved to disqualify Little, as well as to dismiss the case. The magistrate judge recommended disqualification and dismissal, and the U.S. district court for the Western District of Texas overruled the plaintiff’s objections and accepted the recommendation.

The rubber meets the road

In its opinion, the district court noted that the magistrate judge had “expressed disbelief at Little’s insistence that he should not be disqualified” in light of his prior work for Rolls-Royce, in a matter substantially related to the qui tam suit.

The Texas version of Model Rule 1.9 (Duties to Former Clients) is codified in Rule 1.09(a) of the Texas Disciplinary Rules of Professional Conduct.  Like the Model Rule, the Texas version bars representation adverse to a former client in the same or a substantially related matter, except with the former client’s consent.

In the view of the magistrate judge and the district court, this was a no-brainer: it was “a clear violation” of the conflict rules for Little to represent the plaintiff adverse to Rolls-Royce in the qui tam action, because it was substantially related to his prior work in-house for Rolls-Royce, and to the Davis case, in which Little had represented Rolls-Royce as outside counsel.

In-house counsel take heed

Migrating from a berth as in-house counsel to being outside counsel raises former-client conflict issues that you – and your new employer – must be aware of.  As the Association of Corporate Counsel has pointed out, all the ethics rules apply with equal force to in-house counsel.  Even lateral moves, from a company law department to the same post with a competitor can raise some thorny former-client conflict issues.  See Dynamic 3D Geosolutions LLC v. Schlumberger Ltd. (Schlumberger N.V.), 837 F.3d 1280 (Fed. Cir. 2016) (affirming disqualification of plaintiff’s in-house counsel and outside counsel in patent infringement case; plaintiff’s in-house counsel was defendant’s previous deputy GC).  Be aware, and you can avoid the risk of disqualification.

* Joy A. Wilson is a rising second-year law student at the University of Illinois College of Law where she is a finalist on the university negotiations team and client counseling team and an event coordinator for the Black Law Student Association and Sports and Entertainment Law Society.

Here’s a year-end reminder to in-house counsel:  make sure that you are properly registered and licensed, or you may run into disciplinary problems.  An Ohio lawyer who worked in a company’s law department learned that the hard way earlier this month, when she received a two-year suspension from the Ohio Supreme Court, with six months stayed.

If I don’t open that scary envelope…

The lawyer was suspended in 2013 because she failed to renew her registration with the state supreme court.  A year later, while still lacking any license, she got a second suspension based on her failure to complete CLE requirements.  She later stipulated that although she didn’t open letters she received from the supreme court, she was aware of her suspension.

A year after that, still without an Ohio or any other license, she started working for a company’s law department as staff counsel and (ironically) director of institutional compliance.

Shortly after being hired by the company, the lawyer completed a securities industry application form, and falsely stated that her authorization to act as an attorney had never been revoked or suspended.

In 2015, after the lawyer had been working for the company for about a year, the GC noticed that she hadn’t received a request from the lawyer to reimburse her Ohio attorney-registration fee for the upcoming biennium.  When the GC checked the supreme court’s website, she learned that the lawyer had been suspended since 2013.

The lawyer later admitted that she had known about her suspension, and that before filling out the securities application form falsely, the lawyer had delayed completing it, because she knew that it asked about prior suspensions.

The company fired the lawyer immediately.

Making a bad problem worse

The disciplinary case proceeded by stipulation, and the supreme court found numerous ethics rule violations, including of the state’s versions of Model Rule 5.5(a) (unauthorized practice); Rule 5.5(b) (misrepresenting oneself as authorized to practice law); Rule 8.1 (false statements in connection with a disciplinary matter); and Rule 8.4(c) (conduct involving dishonesty, fraud, deceit, or misrepresentation).

As in many disciplinary cases, the initial problem (failing to register) was made a lot worse by what my family calls “avoidant behavior” — like the lawyer’s failure to open the letters from the supreme court informing her of the suspension and what to do to cure it.  And of course, things were made even worse by the subsequent misrepresentation on the securities registration form.  An emotional shut-down in the face of a mistake can be a normal human reaction, but fighting against it is the best course. (That’s easy to say, I know.)

As a side note, the lawyer here was working for a corporate employer in Ohio and was (or should have been) licensed in Ohio.  Most jurisdictions permit a lawyer to work in-house with a license from a different jurisdiction — as long as you are validly licensed by the highest court of some jurisdiction.

But it’s dangerous to let that license lapse through inattention.  And many jurisdictions also have special in-house counsel registration requirements in their court rules or other regulations. (The ABA Center for Professional Responsibility has a list with links, here.)

Pay attention to all those requirements, and reach out for help if you have dropped the ball in meeting them.

Hot on the heels of the publicity for Brian Cuban’s new book, “The Addicted Lawyer:  Tales of the Bar, Booze, Blow and Redemption,” comes the searing account in the New York Times of the 2015 death of a former IP partner at Wilson Sonsini Goodrich & Rosati, who secretly battled drug addiction and reportedly died of a bacterial infection that often afflicts intravenous drug users.

Cuban’s book (he is the brother of billionaire Dallas Mavericks owner Mark Cuban) is, by all accounts, a story of perseverance and recovery; Cuban redeemed his life, although he does not practice law any longer.

But the New York Times article, authored by the Wilson Sonsini partner’s ex-wife, is a harrowing call to arms about the need to do a better job — in the organized bar, in BigLaw, small law, corporate law and everywhere else — of identifying and helping addicted lawyers.

“Last call” — dial-in to a work conference

The Wilson Sonsini partner, identified in the NYT article only as “Peter,” is described as successful, driven and work-obsessed.  After a stellar law school career, in which he graduated first in his class, he replicated that success in a legal career that saw him regularly working 60-hour weeks over the next 20 years.

His ex-wife, with whom Peter maintained good relations, found him dead on the floor in his house, near half-filled syringes, a tourniquet, and crushed pills.  She had no idea that he was struggling with a severe addiction — reflected in detailed notes the lawyer kept of the times and amounts of his drug injections — although she writes that she noticed wild mood-swings in the months before his death, and voice mails consisting of “meandering soliloquies.”

Most poignantly, the lawyer kept working right up to the end.  The last call he made from his cellphone, his ex-wife wrote, was to dial in to a work conference call, even though he was “vomiting, unable to sit up, slipping in and out of consciousness.”

At Peter’s memorial service, his ex-wife wrote, while a weeping young associate eulogized the partner he had come to know, firm lawyers were bent over their own cellphones, tapping out e-mails — unable to put down their work even then.

Grim statistics

The statistics on lawyers and alcohol abuse are grim, and well-known.  More than a fifth of all lawyers are problem drinkers, according to last year’s joint report of the Hazelden Betty Ford Foundation and the American Bar Association Lawyers.

The statistically-robust report drew responses from 12,825 licensed and practicing lawyers from 19 states.  But only 25 percent of respondents answered questions about drug use — out of fear of answering, according to the study’s lead author.  Quoted in the NYT story, he said that  “I think the incidence of drug use and abuse is significantly underreported,” because in contrast to alcohol use, drug use is illegal.

In his book, Cuban describes snorting cocaine in his former law firm’s bathroom, to keep going after boozing it up and using drugs the night before.  Other memoirs, like “Girl Walks Out of a Bar,” by a former Pillsbury Winthrop lawyer, underscore the reality of lawyer drug addiction.

What is the profession doing to help?

Accounts like Cuban’s and the death of the Wilson Sonsini lawyer spotlight the need for the legal profession to step up its efforts to help.  The ABA’s Model Rule on Continuing Legal Education calls for just one credit of CLE every three years on mental health or substance abuse.

Some states, like my home state of Ohio, have moved away from a specific substance-abuse requirement;  since rule amendments in 2014, many subjects qualify to meet our “professional conduct” CLE requirement, so a lawyer never needs to have any substance abuse CLE.

Yet, in the days before that change was made, when lawyers still needed to get one hour of  substance abuse training every two years, each time I spoke on ethics at a CLE seminar, I observed at least one lawyer going up afterwards to the person who had spoken on substance abuse, and speaking earnestly.  These were lawyers in trouble — and we need to do more to help them.

Jurisdictions like Illinois seem to be moving in the right direction, as reported by Chicago ethics lawyer Allison WoodUnder amended rules, Illinois lawyers are now required to take one hour of mental health and substance abuse CLE as part of their six-hour professional responsibility requirement.  Both the directive to have at least some substance abuse training, and the size of the PR requirement are laudable.

Law firms also have a huge role to play — there’s room to ask whether firm culture “enables” alcoholism.  De-emphasizing the historic link between lawyering and drinking , including at firm events, would help.  So would increasing access to law firm employee assistance programs, as highlighted in guidelines here, from Massachusetts “Lawyers Concerned for Lawyers.”

And as I have done before, here’s a state-by-state list of links to lawyer assistance organizations.  No problem is ever made worse by seeking help.

The former general counsel for clothing retail giant Zara USA, Inc. can’t claim privilege in his discrimination-wrongful discharge suit for e-mails he created on a company-issued computer, said New York’s First Department court of appeals in an opinion last month — but the same material might be protected by the work-product doctrine, the court held.

The discovery dispute and ruling arose from a now-common scenario:  an employee who uses a company computer for personal communications about litigation against the company — and apparently, even corporate GC’s do it.

GC suit alleges discrimination, harassment

The backstory starts in June 2015, when the former GC sued his employer for bias and harassment.  In his complaint, the GC alleged that, for instance, after learning that he is gay and Jewish, company personnel sent sexually-charged e-mails to him, used Yiddish expressions in speaking to him and sent his long-time partner an e-mail with an image of a tattooed penis.  The GC alleges that after he complained about his treatment, company leaders told him that his job was in jeopardy, and eventually terminated him.

During discovery, Zara sought documents from the former GC’s laptop, asserting that it and its contents were company property under a policy that the GC had helped draft.  The policy was in the company employment handbook, and like many such policies, it:

  • restricted use of company-owned devices to “business purposes”;
  • specified that content created/stored company resources belonged to Zara “exclusively”;
  • emphasized that employees lacked any expectation of privacy in information transmitted or stored on company computers; and
  • said that Zara could access such information without prior notice.

No privilege for documents on employer-issued computer

In the trial court, the GC won a motion for protective order.  The judge wrote that Zara seemed to be “merely trying to gain litigation advantage by accessing documents that may be privileged,” referring to 101 documents on his computer that the GC created after the litigation began.

But the First Department found no privilege, reasoning that given the employee handbook provisions (which he had at least constructive knowledge of), the GC had no reasonable expectation of privacy, and thus lacked “the reasonable assurance of confidentiality that is foundational to attorney client privilege.”

This ruling is consistent with the case law in most jurisdictions, holding that attorney-client privilege does not apply to communications between an employee and the employee’s personal lawyer if made using the employer’s computer network and if the employer has informed employees that they have no expectation of privacy with respect to communications using the employer’s e-mail system.

Will work-product work?  

However, the appeals court also said that even though Zara reserved the right to access company-issued computers, it never did so, and so there was never any actual disclosure to any third party of the material that the former GC sought to shield.

As a result, even though attorney-client privilege was unavailable, the work-product doctrine might be applicable if no one other than the former GC and his counsel had actually reviewed the materials.  Accordingly, said the court, the GC’s use of Zara’s computer “for personal purposes does not, standing alone, constitute a waiver of attorney work product protections.”

Now, on remand, it will be up to the trial court to review the documents in camera and determine the work-product question.

At the crossroads

This case is at the intersection of employment law and privilege law, with facts that have become more common recently.  In fact, the First Department cited its own privilege decision earlier this year in a similar dispute over access to e-mails that Marvel Entertainment’s CEO exchanged with his wife using the company e-mail system.  There too, the court found no privilege (spousal, this time), but possible work-product protection.

The twist in this latest case is that it was Zara’s former chief legal officer who used his company-issued computer to communicate with his private counsel — making this decision one that GC’s should take note of.

Business Ethics Concept with icons* Our guest blogger is a Certified Compliance & Ethics Professional (CCEP)® in Thompson Hine’s Dayton, Ohio office.

A growing list of businesses are eager to promote a strong culture of ethical corporate compliance, and lawyers should be ready to get on board by developing knowledge and skills to address this need.

Companies devoting resources to ethics

I recently participated as the Ethicist in Residence  for Xavier University’s International Business Ethics Program.  In addition to being a guest panelist regarding international trade compliance issues at the University Cergy-Pontoise’s School of Law in France,  I traveled in London and Paris to learn more about how corporate giants like L’Oreal and BP tackle compliance and ethics on a daily basis.

My trip was eye-opening.  I visited the London-based Institute of Business Ethics,  had dinner with Michael Woodford, the former CEO/President of Olympus (and whistleblower exposing corruption at the company in 2011).  I also spoke with Robert Bond, a legal expert on data privacy in the UK.

Bottom line from all of these events?  Ethics and compliance are increasingly important to today’s businesses, as evidenced by the growing number of programs and resources that companies are putting in place.  As a result, lawyers need to be prepared to weigh not only compliance concerns but also ethical considerations in doing business.

Legislative pressure

First, companies are focusing more on compliance and ethics because of increasing legislation and pressures.  France recently enacted the Sapin II Law, which aligns French anticorruption law with aspects of U.S. and UK corruption enforcement.  Sapin II was prompted by  concerns of political leaders who believed that increased trade globalization was contributing to corruption and undermining economic interests.

The Organization for Economic Co-operation and Development has criticized France in the past for lagging behind other countries in its corruption enforcement efforts.  Unlike the U.S., France has never convicted a company for bribing foreign officials, despite the fact that those same companies often found themselves subject to investigation or prosecution abroad for such conduct.  Now, French companies are looking to U.S. companies and legal counsel for tips on how to comply with the new law.

Globalization shines a light on ethics

Second, companies are increasing resources for compliance and ethics due to expanding multi-jurisdictional cooperation on a global basis to enforce anti-corruption efforts and hold wrong-doers accountable.  Examples include Operation Car Wash in Brazil, as well as the VimpelCom enforcement action, which coordinated efforts among the United States, Sweden, Switzerland, Norway, the British Virgin Islands, Caymans, Bermuda, Ireland, Estonia, Spain, Latvia, the United Arab Emirates and others.  Thus, not only are companies faced with more legislation, there is also increased international cooperation to coordinate investigations and to detect wrongdoing across national boundaries.

Attracting and retaining talent

Third, companies see value in increasing their compliance and ethics programs to attract and retain talent.  During a briefing to the Xavier University International Business Ethics Program participants, BP expressed that by refusing to bow to  cultural pressures of corruption, the company has been able to attract employees who would prefer to work for a fair and ethical organization.

L’Oreal representatives also commented that they are able to retain talent through efforts such as their Ethics Day, Ethics Café, and other ethics-focused programs throughout the year.  L’Oreal was recently named 2017’s Most Ethical Company by the Ethisphere Institute, winning the annual honor for the eighth time.  Unlike companies that lump compliance and ethics together, L’Oreal created a separate Ethics Department.  It was one of the first companies to appoint a Chief Ethics Officer, in 2007.

Takeaways

It is important for lawyers to understand that compliance is not just obeying this or that specific regulation.  Helping clients to create  a Code of Conduct or overall compliance program requires more than knowledge of certain regulations.  Further, ethical considerations must be built-in.  Just because something is legal does not make it ethical (and vice versa).  It is becoming vital for lawyers – both law departments and outside counsel — to understand not only the law, but also the ethical considerations involved.

Whatever an organization’s goals in creating a culture of ethical responsibility, lawyers must be able to respond, based on our own responsibilities under the Rules of Professional Conduct and with our  clients’ business perspectives in mind.

Taxi Ride Share Transportation AppThis is a good one for the law school legal ethics class I’m teaching this semester:  If a company’s lawyer approves a policy that may be legal in itself, but the lawyer knows that the company will use it to evade the law, has the lawyer violated ethics rules?

An analogous question arose last week when the New York Times reported that Uber Technologies Inc. used specially-developed software in order to avoid law enforcement stings in cities where Uber’s ride-sharing operation was facing local government opposition.

Within a few days of the report, Uber announced that it had halted the practice, called “greyballing,” which had been used in the U.S. and overseas.  Uber said that the practice was part of its broader efforts to halt all rider conduct that violates its terms of use.

However, the situation still provides a setting in which to consider Model Rule 1.2(d) and your ethics obligations if a client seeks your help in conduct that may be deemed to be pushing the legal envelope.

“Greyballing” a potential rider

As reported by the Times, starting in 2014, Uber apparently put policies in place in cities like Boston, Portland, Oregon and Las Vegas to identify users Uber thought might be city investigators or inspectors who were arranging for rides in order to conduct stings on operations that law enforcement officials questioned as violating city regulations.

After facing initial opposition in many cities where gaps in local regulations made it easy to launch its services, Uber eventually reached agreements with cities so that it could operate lawfully.

But before that point, as the Times described it, “law enforcement officials in some cities … impounded vehicles or issued tickets to UberX drivers, with Uber generally picking up those costs on the drivers’ behalf.  The company has estimated thousands of dollars in lost revenue for every vehicle impounded and ticket received,” the Times said.

To avoid these costs, Uber would try to identify law enforcement officers and keep them out of its drivers’ cars — “greyballing” them.  The digital techniques Uber used to do that included reviewing credit card information to see whether the card was linked to some official institution (e.g., a police credit union), drawing a “geofence” around government offices, and not picking up anyone seeking a ride from there, and searching social media profiles to identify people who seemed to be linked to law enforcement.

When someone who had been “greyballed” did successfully hail an Uber, the company could call the driver in order to end the ride.

What should counsel consider?

Model Rule 1.2(d) bars counseling a client to engage in criminal or fraudulent conduct, or assisting the client in doing so.  But was Uber’s “greyballing” program used for unlawful ends?  If not, there is no legal ethics issue to discuss.  And we certainly do not know what Uber’s legal team considered in advising Uber about the program.

Rule 1.2(d) of course permits discussing with the client “the legal consequences of any proposed course of conduct” and assisting the client in making “a good faith effort to determine the validity, scope, meaning or application of the law.”  A lawyer who conforms to that standard is on good ground.

Likewise, comment [9] notes the difference between opining about consequences and “assisting” in unlawful conduct.  And the “fact that a client uses advice in a course of action that is criminal or fraudulent” does not of itself “make a lawyer a party to the course of action.”  “Presenting an analysis of legal aspects of questionable conduct” is OK; but “recommending the means by which a crime or fraud might be committed with impunity” is not.

Be careful out there…

If you are in a grey area (no pun intended!), where it may be unclear whether you are counseling your client about the bounds of the law or whether you are possibly assisting with improper conduct, it pays to be careful, and to consider getting an outside view about your possible actions.  Check your jurisdiction’s version of Model Rule 1.6(b)(4), which permits you to disclose a client’s confidential information as reasonably necessary in order to obtain legal advice about your compliance with the ethics rules.

Whistle BlowerA whistle-blowing general counsel won an $8 million federal jury verdict earlier this month, in a case that might encourage other GC’s to call out corporate wrongdoing.

Compensatory and punitive damages

After deliberating only three hours, the jury in Wadler v. Bio-Rad found that the GC had a reasonable basis for reporting his suspicions about the company’s Chinese sales operations to the organization’s audit team.

The GC’s allegations prompted an internal investigation by outside counsel, which concluded that the sales team had not violated the Foreign Corrupt Practices Act.

But the jury found that the company had retaliated against the GC by firing him after the report, in violation of the Sarbanes-Oxley Act, and that absent the report, he would not have been terminated for legitimate reasons.

The award to the GC included $5 million in punitive damages.  Speaking to Law360 (subs. req.), the GC’s lawyer attributed the punitive damages to the company  CEO’s creation of a back-dated negative performance review; computer metadata proved that the review hadn’t been created until after the GC had been fired.

Does SOX protection trump company’s privilege?

Judgment on the jury verdict was entered on February 10.  It will almost certainly be the subject of post-trial motions and possibly an appeal.

But the verdict stands out as a rare trial win for a GC in a whistle-blower case based on retaliatory firing.  Such suits have often been foreclosed before trial because of restrictions on a company lawyer’s ability to use confidential information of the employer in proving the GC’s case.

For example, in 2013, the Second Circuit affirmed dismissal of a GC’s whistle-blower suit brought under the federal False Claims Act, holding that the allegations relied on privileged information that could not be disclosed, and that the FCA did not preempt New York state ethics rules on confidentiality.

In the Bio-Rad case, however, the federal magistrate judge found at the end of 2016 that the whistle-blower protections of SOX trumped the company’s attorney-client privilege, and turned back the company’s motion to preclude use of privileged information at trial.

The GC’s ability to use this information as evidence arguably spelled the difference here.

Key factors in the magistrate judge’s ruling:

  • as a federal claim asserted under SOX,  the federal common law of privilege applied; that took the case outside the scope of the California Supreme Court’s 1994 ruling in General Dynamics Corp. v. Superior Court, which had limited retaliatory discharge claims to those that could be established without breaching the attorney-client privilege;
  • the text and structure of SOX doesn’t indicate that in-house lawyers aren’t protected from retaliation, and SOX § 1514(A)(b) and particularly the SEC’s final rule (17 C.F.R. § 205) preempts the California state ethics rule on client confidentiality;
  • Model Rule 1.6 is the guiding standard, which — unlike the California state rule — permits a lawyer to reveal information relating to the representation of a client to the extent the lawyer reasonably believes necessary to establish the lawyer’s claim in a controversy between the lawyer and the client; and
  • Bio-Rad made so many disclosures to the SEC, the DOJ and the DOL during the course of previous investigations and administrative proceedings, and to the court in the pre-trial phase of the case, that the company waived the privilege as to many communications.

The SEC had filed an amicus brief during the briefing on the company’s motion to exclude, supporting the position that the magistrate judge took — that SOX trumps state legal ethics rules regarding client confidentiality.

Trend or outlier?

Whether the Bio-Rad case will be upheld, and whether it is a trend or an outlier, remain to be seen.  But in the short run, it may encourage other GC’s to blow the whistle.

Alcohol and drugs.The new year heralds a new start.  Many lawyers who struggle with an addiction — alcohol, drugs, gambling, food, sex — use the occasion to resolve to quit their harmful behavior, and there is a nationwide network of confidential bar organizations that can help.  But what are the obligations of a firm where an impaired lawyer works?  A new Virginia ethics opinion has some answers.

Duty to supervise

Every jurisdiction in the U.S. has a version of Model Rule 5.1.  Like Virginia’s rule, it requires partners or other lawyers in a firm who have managerial authority to make reasonable efforts to ensure that all lawyers in the firm conform to lawyer conduct rules.  The Virginia Supreme Court, in Ethics Opinion 1886, easily concluded that this mandates that firm managers and lawyers who simply supervise another lawyer make reasonable efforts to ensure that an impaired lawyer doesn’t violate the ethics rules.

Further, the rule requires preventive action, said the court.  “When a partner or supervising lawyer knows or reasonably believes that a lawyer under their direction and control is impaired,” they must “take reasonable steps to prevent” the impaired lawyer from violating ethics rules.

Steps to take

In dealing with an impaired lawyer, the firm’s first duty is protecting its clients’ interests, but the Virginia opinion (and common sense) suggests a range of responses that depend entirely on the circumstances:

  • Confrontation:  A first step may be confronting the impaired lawyer, and urging the lawyer to accept help.
  • Accommodation:  The firm may be able to work around some impairment situations.  For example, the firm might be able to reduce the impaired lawyer’s workload, require supervision or monitoring, or remove the lawyer from time-sensitive projects.
  • Supervision:  Depending on several factors — nature, severity, likelihood of recurrence — the firm may have an obligation to supervise, monitor or review the work of the impaired lawyer, including a senior lawyer or partner.
  •  Limitation:  Some circumstances will mandate that the firm entirely prevent the lawyer from servicing clients until the lawyer has recovered from the impairment.   In other situations, the firm might be able to protect clients by limiting the lawyer solely to giving advice, or to drafting legal documents for other lawyers.
  • Assistance as a condition of employment:  The Virginia Supreme Court said that firms should have an enforceable policy that requires an impaired lawyer to seek help — counseling, therapy, or treatment — as a condition of continued employment with the firm.
  • Reporting:  It may also be appropriate for the firm itself to confidentially report the impaired lawyer to the lawyer assistance program in that jurisdiction, or to consult with medical professionals for advice.

Not just for firms…

The Virginia ethics opinion focusses on harm prevention, and intentionally does not address the requirement under Model Rule 8.3 to report misconduct that has already occurred.  Also, legal obligations that a firm might have under HIPPA, the FMLA or the ADA, for example, are outside the scope of the opinion.

One important note:  Implicit in Opinion 1886 is that it also applies to lawyers working in-house or in corporate law departments, in government agencies, and in legal aid and legal services organizations — all of them constitute “firms” under Model Rule 1.0(c)‘s definition.

Deeds of loving-kindness

Whether you are a senior associate who supervises a more-junior lawyer, or you are the managing partner of a large firm, you have duties under Rule 5.1 with respect to an impaired lawyer.  We also have duties as human beings — duties that we can sometimes forget in the course of our practices.  Those duties, too, should point us in the direction of compassionate action for the benefit of a colleague suffering from an impairment.

Privilege 2A sharply-divided Washington Supreme Court has ruled that an organization’s attorney-client privilege doesn’t apply to post-employment communications between the company’s lawyers and its former employees.  Although Newman v. Highland School District No. 203 adheres to a minority viewpoint, the implications are troubling, and the bright-line test that the state supreme court established in a case of first impression will require new cautions in cases where Washington state privilege law applies.

Talks with former coaches not within privilege

In Newman, parents of a brain-injured high-school football player sued the school district, alleging negligence.  In preparing for trial, the school district’s lawyers interviewed the entire coaching staff, including several former coaches.  When the interviews came to light at a former coach’s deposition, the plaintiffs sought discovery of the communications between them and the lawyers for the school district.

Holding that “everything changes when employment ends,” the court’s 5-4 majority ruled that “the privilege does not broadly shield counsel’s postemployment communications with former employees.”

The court said that once the employment is over, the principal-agent relationship is severed, and the former employees are like any other third-party fact witness. “The flexible approach articulated in Upjohn,” the leading case on corporate attorney-client privilege, “presupposed attorney-client communications taking place within the corporate employment relationship,” the court wrote.

Likewise, the Restatement (Third) of the Law Governing Lawyers § 73 cmt. [e] generally limits the privilege to the duration of a principal-agent relationship, the majority said.  In addition, the court held, the rule promotes predictability and the “truth-seeking mission” of the trial process, which would be frustrated if the privilege were extended to cover post-employment communications with former employees.

“At odds” with Upjohn

The dissent in Newman disagreed with the majority’s adoption of a bright-line rule that would cut off the corporate attorney-client privilege at the termination of employment, and would exclude from its scope all postemployment communications with former employees, even when they have relevant personal knowledge regarding the subject matter.  “[H]ad they remained employed, such communications with counsel would have been privileged” under the reasoning in Upjohn, the author of the dissent noted.

Upjohn’s functional framework does not look at the “formalities” of the employment relationship, said the dissenters; rather, the focus is on the purpose of the communications themselves and the benefits and goals of the privilege.

Therefore, the proper test, the dissent argued, is “Did the communications with the former employee, whenever they occurred, ‘relate to the former employee’s conduct and knowledge, or communication with defendant’s counsel, during his or her employment?'”

ACC: Majority doesn’t get it

The VP and chief legal strategist of the Association of Corporate Counsel, Amar D. Sarwal, quoted in Bloomberg BNA/ABA Lawyers’ Manual on Professional Conduct, called the Newman decision “troubling,” and “a bad idea for Washington, and bad for other courts to follow.”  The decision reflects a “misunderstanding” of the way an organization gains and retains knowledge, which includes the knowledge of people who have left the organization, he said.

Practical implications

Washington’s supreme court got it wrong. Fortunately, its new bright-line rule is a minority viewpoint, and the privilege jurisprudence of most jurisdictions would follow Upjohn’s flexible approach.  But even if you are not litigating a case in a Washington state court, Federal Evidence Rule 501 might point to Washington law as supplying the rule of privilege.  Surmounting the challenge presented by Newman might involve exploring how an attorney-client relationship with an organization’s former employees might be extended or re-created for the purpose of communicating with them under the shield of privilege.