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

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

Rule 8.3(b) applies the principle to judges.

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

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

Stayed suspensions for trust fund misconduct

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

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

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

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

Carve-out for lawyer assistance programs

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

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

Greetings 2018!  Time for some ethics trend predictions to kick off the Year of the Dog (according to the Chinese zodiac).  Let it be a year in which you doggedly pursue ethical practice (ouch).  No more bad puns — here’s what’s hot as we begin the year:

Law firm cyber-security

No surprise here that the top trend is data security.  It’s one of the “chief concerns” of GC’s, and for good reason:  It’s not if, but when, a firm is going to experience a cyber-attack.  The latest ABA report says that 22 percent of law firms of all sizes were hit with a data breach in 2017, up from 14 percent in 2016; several of the biggest firms experienced attacks and various kinds of disruption in the past couple years.  But small and medium-size firms are just as vulnerable, say the data.  Of course, lawyers have an ethical duty under Model Rule 1.6(c) to take reasonable steps to safeguard the confidentiality of client data.  Ethics rules also require lawyers to have the technological competence to recognize and address the problem.  (See comment [8] to Rule 1.1.)  Trending:  More clients are insisting that firms establish data security policies and procedures.

The “Uber” effect – on-line service providers and other tech disruptors

Just as Uber disrupted an entire market segment with its ride-hailing model, on-line businesses like Avvo and LegalZoom have taken aim at legal services and how they are marketed.  But these on-line types of business raise legal ethics issues, including fee-splitting, handling client funds and professional independence.  (Excellent summary is here.)  Some innovative models, like the traffic-ticket-fighting site TIKD, are under fire for potential antitrust violations and the unauthorized practice of law.  And will consumers soon be taking their legal problems to chatbots?  Will legal teams soon be using artificial intelligence to analyze complaints and generate document drafts?  Trending:  State ethics regulators have come down against Avvo-like platforms, but they are still thriving.  How will the legal industry adapt?  (Hint:  Watch the progress of the ABA’s consideration of a revamp of the Model Rules on lawyer marketing and advertising, aimed at “bringing them into the 21st century” and reported here, in the Professional Responsibility Blog.)

Gender bias and sexual harassment in the profession

The ABA adopted Model Rule 8.4(g) in 2016, barring lawyers from engaging in harassing or discriminatory conduct; states are now considering whether to adopt the rule into their own lawyer conduct codes.  (Box score as of 8/1/17:  1 aye, 1 nay, many studying; and some commentators raise First Amendment concerns.)  But 40 percent of women in the profession report that they have been subjected to harassment and discrimination; and there have been several high-profile discrimination and pay-equity claims against prominent national firms and individuals.  The judiciary has been hit as well, with a prominent federal judge apologizing and retiring abruptly after sexual harassment allegations; and 695 law professors and former clerks are now petitioning Chief Justice John Roberts, seeking revision of judicial employee guides and support for reporting misconduct.  Trending:  Women in the profession are adding their voices to #metoo.

Lawyer health and wellness — mental and physical

Finally, we’d be remiss, in our first post of 2018, if we didn’t mention the personal aspect of lawyering:  keeping yourself safe and sane.  As a profession, more of us fight alcoholism, substance abuse, depression and anxiety than the general population, and those trends start developing in law school.  The statistics are alarming.  Trending:  a hopeful resolve, via a new, comprehensive ABA report, to come to grips with these systemic issues.  If you made a New Year’s resolution to stop drinking or drugging, or to address mental health issues that are affecting your legal practice, every state has a lawyer assistance organization to help you.  We’ve linked to the ABA’s state-by-state listing before; but here it is again.  If it helps one person, there’s no such thing as posting it too often.

Happy New Year.

 

A lawyer who was physically dependent on opioids and in an “opioid haze” was disbarred earlier this month for stealing more than $117,000 from a client.  Her chronic pain and addiction were not “extraordinary mitigating” factors that justified departing from the presumptive penalty for client theft, the Washington Supreme Court held.

The decision is a stark reminder at a time when the ravages of lawyer substance abuse have been spotlighted in studies, books and current events.

Trust account theft

The lawyer had a family law practice and worked with one associate.  In 2009, she agreed to represent a client in dissolving his marriage, took a $5,000 retainer and assigned the case to her associate, a recent law school graduate.

The court soon entered a dissolution decree, and awarded the client more than $117,000 as an equalization payment for his interest in the family house, which the lawyer put in her trust account.

The lawyer never paid the client.  Instead, she moved her trust account to another bank, and eventually transferred all the money to her personal account.  She used some of the funds to keep her practice afloat, but also for symphony and Mariners tickets, manicures, groceries, pet food and restaurants.

Most of the client’s many calls to the lawyer went unanswered.  When the lawyer did respond, she said she had been sick and needed time to get back to the client about the funds.  At the time, the client was destitute and sleeping on a friend’s couch while waiting for the settlement funds to help him get back on his feet.

In the meantime, the lawyer stopped coming to her office, and stopped attending to her practice.  The associate registered her concern in an e-mail, citing the trust account irregularities and the “ethical conundrum.”  In reply, the lawyer said that the associate had no responsibilities regarding the office’s finances, and purported to “relieve [the associate] of any ethical obligations regarding the firm’s financial business…”  The associate soon left the firm.  (A lawyer in such circumstances might need to consider whether Model Rule 8.3, “Reporting Professional Misconduct,” could be applicable.)

In 2014, the lawyer pled guilty to a criminal charge of first degree theft, and was sentenced to nine months of electronic home monitoring.

“Opioid haze”

The lawyer had been in successive car accidents in 2003, 2004 and 2006, and had developed chronic pain.  After the lawyer unsuccessfully tried several pain management techniques, her doctor prescribed a variety of opioids in 2006; the lawyer started taking the medication in increasingly large amounts and became dependent.

In her disciplinary filings, the lawyer said that she was in an “opioid haze,” and that her chemical dependency caused her to “overlook the proper disbursal of the trust funds” to the client.

Evidence at the hearing depicted the lawyer’s personality changes.  As her drug use mounted, she became chronically lethargic, “would pass out midsentence and was unable to complete simple tasks.”

Finally, in 2012, the lawyer entered a detox program.

No mitigation

Under the ABA’s Standards for Imposing Lawyer Sanctions and Washington law, the presumptive punishment for client theft is disbarment.  Only “extraordinary” mitigation will merit reducing that sanction, the court noted.

The disciplinary hearing officer found that the lawyer had a physical disability due to her chronic pain; that she was chemically dependent; and that these two factors justified a three-year suspension rather than the presumptive disbarment penalty.

But the full disciplinary board — by an 11-0 unanimous vote — disagreed, and the state supreme court adopted the board’s recommendation of disbarment.

The court rejected the argument that the lawyer’s significant pain was an “extraordinary mitigator”:  “We do not wish to minimize the debilitating and disabling impact that chronic pain has on many individuals’ lives.  Nevertheless, such pain does not excuse extreme lapses of an attorney’s moral judgment.”

And the court held that the lawyer’s chemical dependency, either alone or in combination, would not justify a sanction short of disbarment — even if the lawyer had been able to show that her opioid dependence caused her to steal client funds.

The court wrote that it has consistently found that alcohol and drug addiction are not extraordinary mitigating factors in cases involving client theft.  Rather, the court said, despite her “opioid haze,” the lawyer was to some degree “culpable and responsible for her actions.  At some point, she ‘chose the path’ that led to her misconduct.”  The court refused to view the lawyer as an “innocent victim of forces beyond [her] control …. We must hold her responsible for the harm she caused to the real victim here [the client].”

Harsh result — or appropriate?

This was a tragic situation — for the client, whose money was stolen by the fiduciary who was supposed to protect his rights; and for the lawyer, whose professional life has now been foreclosed by a terrible lapse.

As a profession — and as individuals — we need to do a much better job of intervening in the chain of life events that led to the result in this case.  Our failure to do so when we are aware of a situation like this makes us bystanders.  Our obligation as humans demands more.