Puffery: Ethics of Negotiations

Let’s be honest, the only reason I’m blogging about this is so I can use the word “puffery.”  It makes me laugh.

So, this is a topic that came up often when we had the “professionalism” rule. I remember two or three CLEs where we discussed the line between puffery & lying.  The question we addressed: does a lawyer violate the ethics rules by intentionally misstating a client’s bottom line?

We talked about it in several contexts: the plaintiff’s attorney who knows her client will accept $100,000 but who states that her client “won’t go below $200,000.”  The criminal defense attorney who knows his client will take a plea that includes jail time, but who tells a deputy state’s attorney “if your offer is anything more than probation, we’re going to trial.”  You get the picture.

Rule 4.1 states that “[i]n the course of representing a client a lawyer shall not knowingly make a false statement of material fact to a third person.”  I’d argue that opposing counsel is a “third person.”  However, if it could talk, Comment [2] might disagree with me.  Comment [2]:

  • “This rule refers to statements of fact.  Whether a particular statement should be construed as one of fact can depend on the circumstances.  Under generally accepted conventions in negotiations, certain types of statements ordinarily are not taken as statements of material fact. Estimates of price or value placed on the subject of a transaction and a party’s intentions as to an acceptable settlement of a claim are ordinarily in this category, and so is the existence of an undisclosed principal except where nondisclosure of the principal would constitute fraud. Lawyers should be mindful of their obligations under applicable law to avoid criminal and tortious misrepresentation.”

I’ve often kidded, but only half-jokingly, that the Comment really means that it’s okay to lie to other lawyers.  As long as you stop short of fraud and breaking the law.

There’s also Rule 8.4(c), which prohibits lawyers from engaging in conduct involving dishonest, deceit, misrepresentation, and fraud.  And don’t forget about the duty of candor to a tribunal imposed by Rule 3.3.

Here’s an interesting advisory ethics opinion from the State Bar of California.  Some outlets are touting the opinion as giving the green light to puffery in negotiations.  I suppose that’s a fair reading of an aspect of the opinion. However, if that’s your only takeaway, it’s a reading that ignores the first two sentences of the opinion’s digest:

  • “Statements made by counsel during negotiations are subject to those rules prohibiting an attorney from engaging in dishonesty, deceit or collusion. Thus, it is improper for an attorney to make false statements of fact or implicit misrepresentations of material fact during negotiations.”

I think the opinion provides a sound analysis of when puffery becomes a violation of the rules.

So, that’s the end of this blog.  But, if you don’t have time to read the entire California opinion, I will now paste in each fact scenario that it raises, followed immediately by the Cal State Bar’s answer.  To be clear, this  IS NOT the sequential order in which the opinion is structured and omits significant portions of the opinion. However, I know how y’all like to cut to the chase.  Still – it’s long.  So let’s be clear: THIS IS NOT REQUIRED READING.  If you choose to read it, please don’t email me that it was too long.  That’d be like skiing Nosedive and then complaining to management that it too steep.

Thank you.

Here we go:  what’s the scenario?

“Plaintiff is injured in an automobile accident and retains Attorney to sue the other driver (Defendant). As a result of the accident, Plaintiff incurs $50,000 in medical expenses and Plaintiff tells Attorney she is no longer able to work. Prior to the accident Plaintiff was earning $50,000 per year. Attorney files a lawsuit on Plaintiff’s behalf. Prior to any discovery, the parties agree to participate in a court-sponsored settlement conference that will be presided over by a local attorney volunteer. Leading up to and during the settlement conference, the following occurs:

Scenario 1.  In the settlement conference brief submitted on Plaintiff’s behalf, Attorney asserts that he will have no difficulty proving that Defendant was texting while driving immediately prior to the accident. In that brief, Attorney references the existence of an eyewitness to the accident, asserts that the eyewitness’s account is undisputed, asserts that the eyewitness specifically saw Defendant texting while driving immediately prior the accident, and asserts that the eyewitness’s credibility is excellent. In fact, Attorney has been unable to locate any eyewitness to the accident.

Answer:  Attorney’s misrepresentations about the existence of a favorable eyewitness and the substance of his expected testimony. Attorney’s misrepresentations about the existence of a favorable eyewitness and the substance of the testimony the attorney purportedly expects the witness to give are improper false statements of fact, intended to mislead Defendant and his lawyer. Attorney is making representations regarding the existence of favorable evidence for the purpose of having Defendant rely on them. Attorney has no factual basis for the statements made. Further, Attorney’s misrepresentation is not an expression of opinion, but a material representation that “a reasonable [person] would attach importance to . . . in determining his choice of action in the transaction in question . . .” (Charpentier v. Los Angeles Rams Football Co., Inc. (1999) 75 Cal.App.4th 301, 313 [89 Cal.Rptr.2d 115] quoting Rest.2d Torts, § 538). Thus, Attorney’s misrepresentations regarding the existence of a favorable eyewitness constitute improper false statements and are not ethically permissible. This is consistent with Business and Professions Code section 6128(a), supra, and Business and Professions Code section 6106, supra, which make any act involving deceit, moral turpitude, dishonesty or corruption a cause for disbarment or suspension.

Scenario 2.  While the settlement officer is talking privately with Attorney and Plaintiff, he asks Attorney and Plaintiff about Plaintiff’s wage loss claim. Attorney tells the settlement officer that Plaintiff was 1/ Unless otherwise indicated, all future references to rules in this opinion will be to the Rules of Professional Conduct of the State Bar of California. earning $75,000 per year, which is $25,000 more than Client was actually earning; Attorney is aware that the settlement officer will convey this figure to Defendant, which he does.

Answer: Attorney’s inaccurate representations to the settlement officer which Attorney intended be conveyed to Defendant and Defendant’s lawyer regarding Plaintiff’s wage loss claim. Attorney’s statement that Plaintiff was earning $75,000 per year, when Plaintiff was actually earning $50,000, is an intentional misstatement of a fact. Attorney is not expressing his opinion, but rather is stating a fact that is likely to be material to the negotiations, and upon which he knows the other side may rely, particularly in the context of these settlement discussions, which are taking place prior to discovery. As with Example Number 1, above, Attorney’s statement constitutes an improper false statement and is not permissible.

Scenario 3.  While talking privately outside the presence of the settlement officer, Attorney and Plaintiff discuss Plaintiff’s “bottom line” settlement number. Plaintiff advises Attorney that Plaintiff’s “bottom line” settlement number is $175,000. When the settlement officer asks Attorney for Plaintiff’s demand, Attorney says, “Plaintiff needs $375,000 if you want to settle this case.”

Answer:  Attorney’s inaccurate representation regarding Client’s “bottom line” settlement number. Statements regarding a party’s negotiating goals or willingness to compromise, as well as statements that constitute mere posturing or “puffery,” are among those that are not considered verifiable statements of fact. A party negotiating at arm’s length should realistically expect that an adversary will not reveal its true negotiating goals or willingness to compromise. Here, Attorney’s statement of what Plaintiff will need to settle the matter is allowable “puffery” rather than a misrepresentation of fact. Attorney has not committed an ethical violation by overstating Plaintiff’s “bottom line” settlement number.

Scenario 4. In response to Plaintiff’s settlement demand, Defendant’s lawyer informs the settlement officer that Defendant’s insurance policy limit is $50,000. In fact, Defendant has a $500,000 insurance policy.

Answer:  Defendant’s lawyer’s representation that Defendant’s insurance policy is for $50,000 although it is really $500,000. Defendant’s lawyer’s inaccurate representations regarding Defendant’s policy limits is an intentional misrepresentation of fact intended to mislead Plaintiff and her lawyer. (See Shafer v. Berger, Kahn, Shafton, Moss, Figler, Simon & Gladstone (2003) 107Cal.App.4th 54, 76 [131 Cal.Rptr.2d 777] [plaintiffs “reasonably relied on the coverage representations made by counsel for an insurance company”].) As with Example Number 1, above, Defendant’s lawyer’s intentional misrepresentation about the available policy limits is improper.

Scenario 5. Defendant’s lawyer also states that Defendant intends to file for bankruptcy if Defendant does not get a defense verdict. In fact, two weeks prior to the mediation, Defendant consulted with a bankruptcy lawyer and was advised that Defendant does not qualify for bankruptcy protection and could not receive a discharge of any judgment entered against him. Defendant has informed his lawyer of the results of his consultation with bankruptcy counsel and that Defendant does not intend to file for bankruptcy.

Answer:  Defendant’s lawyer’s representation that Defendant will file for bankruptcy if there is not a defense verdict. Whether Defendant’s lawyer’s representations regarding Defendant’s plans to file for bankruptcy in the event that Defendant does not win a defense verdict constitute a permissible negotiating tactic will hinge on the specific representations made and the facts known. Here, Defendant’s lawyer knows that Defendant does not intend to file for bankruptcy and that Defendant consulted with bankruptcy counsel before the mediation and was informed that Defendant is not legally eligible to file for bankruptcy. A statement by Defendant’s lawyer that expresses or implies that Defendant’s financial condition is such that he is in fact eligible to file for bankruptcy is therefore a false representation of fact. The conclusion may be different; however, if Defendant’s lawyer does not know whether or not his client intends to file for bankruptcy or whether his client is legally eligible to obtain a discharge.

Scenario 6.  The matter does not resolve at the settlement conference, but the parties agree to participate in a follow-up settlement conference one month later, pending the exchange of additional information regarding Plaintiff’s medical expenses and future earnings claim. In particular, Attorney agrees to provide additional information showing Plaintiff’s efforts to obtain other employment in mitigation of her damages and the results of those efforts. During that month, Attorney learns that Plaintiff has accepted an offer of employment and that Plaintiff’s starting salary will be $75,000. Recognizing that accepting this position may negatively impact her future earnings claim, Plaintiff instructs Attorney not to mention Plaintiff’s new employment at the upcoming settlement conference and not to include any information concerning her efforts to obtain employment with this employer in the exchange of additional documents with Defendant. At the settlement conference, Attorney makes a settlement demand that lists lost future earnings as a component of Plaintiff’s damages and attributes a specific dollar amount to that component.

ANSWER:  Plaintiff’s instruction to Attorney to conceal material facts from Defendant and Defendant’s lawyer prior to the follow-up settlement conference. This example raises two issues: the failure to disclose the new employment, and Plaintiff’s instruction to Attorney to not disclose the information.

First, as to the underlying fact of employment itself, it is assumed that Plaintiff would not be entitled to lost future earnings if Plaintiff found a new job. As such, including in the list of Plaintiff’s damages a separate component for lost future earnings is an implicit misrepresentation that Plaintiff has not yet found a job. This is particularly true because Plaintiff agreed to show documentation of her job search efforts to establish her mitigation efforts, but did not include any documentation showing that she had, in fact, been hired. Listing such damages, then, constitutes an impermissible misrepresentation. (See, e.g., Scofield v. State Bar, supra, 62 Cal.2d at 629 [attorney who combined special damages resulting from two different auto accidents in separate claims against each defendant disciplined for making affirmative misrepresentations with the intent to deceive]; Pickering v. State Bar (1944) 24 Cal.2d 141, 144 [148 P.2d 1] [attorney who alleged claim for loss of consortium knowing that plaintiff was not married and that her significant other was out of town during the relevant time period violated Business and Professions Code section 6068(d)].)

Second, Attorney was specifically instructed by Plaintiff not to make the disclosure. That instruction, conveyed by a client to his attorney, is a confidential communication that Attorney is obligated to protect under Rule 3-100 and Business and Professions Code section 6068(e). While an attorney is generally required to follow his client’s instructions, Rule 3-700(B)(2) requires withdrawal if an attorney’s representation would result in a violation of the ethical rules, of which a false representation of fact or implicit misrepresentation of a material fact would be. When faced with Plaintiff’s instruction, Attorney should first counsel his client against the misrepresentation and/or suppression. If Plaintiff refuses, Attorney must withdraw under Rule 3-700(B)(2), as Attorney may neither make the disclosure absent client consent, nor may Attorney take part in the misrepresentation and/or suppression. (California State Bar Form. Opn. No. 2013-189; 7 8/ see also Los Angeles County Bar Association Opn. 520). 8/ California State Bar Form. Opn. No. 2013-189 contains a full discussion regarding an attorney’s ethical obligations when a client instructs his or her attorney to conceal material facts from the opposing party and/or opposing counsel. As addressed more fully in that opinion, an attorney should first counsel his or her client regarding the client’s request and, if the client refuses to reconsider, the attorney may be obligated to withdraw his or her representation, pursuant to Rule 3-700(B)(2).”

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#FiveforFriday: Week 10

No blogs this week. Sorry about that. I got caught up traveling around the state, but was fortunate to have opportunities to meet with the Caledonia County Bar Association and professors, students, and alums at Vermont Law School.   Legal tech and the ethics of providing advice on marijuana-related issues remain hot topics!

Ok – a few quick reminders:

  • Questions 1-4 are open book, open search engine, feel-free-to-text-a-colleague.
  • Question 5 is not.
  • email your answers to michael.kennedy@vermont.gov
  • forward this to as many people as possible and encourage them to enter.
  • if you are scared reluctant to enter, read THIS!

Looks like there are 10 points on the line in this week’s quiz.

QUESTION 1

Last week, in a ruling that the Wall Street Journal reported is believed to be the first of its kind involving a defendant who is located within the United States, a federal judge approved service by ___________.

QUESTION 2

Lawyer called me with an inquiry. I listened, then asked: “do you think it’s going to cause death or substantial bodily harm?”   What did the lawyer call to talk about?

QUESTION 3

Attorney called me with an inquiry. I listened, then said: “the rule says it’s preferable that it be in writing, but doesn’t require a writing.”   What did Attorney ask whether needs to be reduced to writing?

QUESTION 4:

By rule, in trial, there are four (4) things about which a lawyer may not state a personal opinion.   1 point for each that you name.

QUESTION 5:

Alan and Denny were fictional lawyers who practiced together for years.  Each had a questionable sense of attorney ethics.  Last we saw them, they married.  Among the reasons that they decided to marry: to invoke the spousal privilege if Denny was arrested and Alan asked to testify against him.

  • Identify the television show
  • 2 point bonus:  who officiated their wedding?

There’s still time to donate to the Access to Justice Poverty Law Fellowship Campaign.  If you do, consider making your gift in honor of Bob Paolini.  For more on that, go HERE.

 

Of Coaches & Kennedys: Five For Friday Answers

In soccer, a goalie who posts a shutout is sometimes termed to have earned a “clean slate.”  This week, three entrants, including former BHS varsity soccer coach Scott Mapes, registered perfect scores, or clean slates, in the #FiveforFriday quiz.  As some of you might know, I have an affinity for high school coaches.

And, do we have another Kennedy dynasty on our hands?  David & Patrick earned spots on the honor roll.  David is a co-worker, but not related to me.  Meanwhile, Patrick is my little brother and IS NOT EVEN A LAWYER!  Congrats to Pat for being the first non-lawyer, non-paralegal to make the honor roll.

Spoiler – Answers are below the Honor Roll.  If you want to take the quiz first, it’s HERE.

HONOR ROLL

5 for 5

4 for 5 (* = perfect in ethics)

ANSWERS

Question 1:

Bar counsel receives approximately 900 ethics inquiries per year, with 80% coming from lawyers.  What ethics issue/topic do lawyers most often raise when they call me?

CONFLICTS OF INTEREST 

Inquiry stats last 3 fiscal years, top 3 topics, (as of May 31, 2015)

Inquiry Chart

 

Question 2:

Rule 8.4(c) states that a lawyer shall not engage in conduct that involves dishonestly, deceit, misrepresentation or fraud.  Per an opinion of the Vermont Supreme Court, to violate the rule, must also:

  • A.    induce reliance upon the conduct;
  • B.    adversely reflect on the attorney’s fitness to practice law; In re PRB Dkt. No. 2007-046, 2009 VT 115, 187 Vt. 35, 989 A.2d 523 
  • C.    have been intended to deceive (no negligent violations of Rule 8.4(c))
  • D.    have occurred while the attorney was acting in his or her capacity as a lawyer.

Question 3:

There is a rule that prohibits an attorney from disclosing information relating to the representation absent client consent.  The rule includes several exceptions.  Nationally, and over the past few years, attorneys have argued that a particular exception allows them to disclose information related to the representation in response to a negative online review from  a client.  Courts, disciplinary authorities, and bar associations have disagreed.

So called “self defense” exception in Rule 1.6(c)(3)

Question 4:

Two days ago, Plaintiff’s attorney won a jury verdict.  That night, Plaintiff’s attorney updated her Facebook status to “Million dollar win against big bad insurance company!  Who wants to be next?”  According to at least one state bar, for the purposes of the ethics rules, the attorney’s status update should be treated as an ADVERTISEMENT.  See, California State Bar, Formal Advisory Opinion 2012-186

Question 5:

Jury tampering is unethical.  (call me crazy).  In addition, some courts have held that there is an ethical duty to report juror misconduct, even if the case is going your client’s way. The Runaway Jury involves lawyers who, at the very least, should have suspected juror misconduct in a tort suit in which many millions of dollars were at stake.

The subject of the trial was different in the book than it was in the movie.  For one point each, identify the industries on trial in, respectively, the book & movie versions of The Runaway Jury.

  • Book:    Tobacco
  • Movie:   Firearms (guns)

Five for Friday #9

#FiveforFriday returns to American soil (or, Wifi) this week….and hopefully many of you return to the honor roll.

For newbies:

  • Bad news: #FiveforFriday is not filmed before a live studio audience and none of you will receive a parting gift, not to mention a lovely parting gift.
  • Good news: #FiveforFriday is an open note, open book, open search engine quiz.  Exception:  question 5.

Email your answers to Michael.kennedy@Vermont.gov  and please forward the quiz to your friends and colleagues.

Question 1:

Bar counsel receives approximately 900 ethics inquiries per year, with 80% coming from lawyers.  What ethics issue/topic do lawyers most often raise when they call me?

Question 2:

Rule 8.4(c) states that a lawyer shall not engage in conduct that involves dishonestly, deceit, misrepresentation or fraud.  Per an opinion of the Vermont Supreme Court, to violate the rule, must also:

  • A.    induce reliance upon the conduct;
  • B.    adversely reflect on the attorney’s fitness to practice law
  • C.    have been intended to deceive (no negligent violations of Rule 8.4(c))
  • D.    have occurred while the attorney was acting in his or her capacity as a lawyer.

Question 3:

There is a rule that prohibits an attorney from disclosing information relating to the representation absent client consent.  The rule includes several exceptions.  Nationally, and over the past few years, attorneys have argued that a particular exception allows them to disclose information related to the representation in response to a negative online review from  a client.  Courts, disciplinary authorities, and bar associations have disagreed.

Which exception? (either the cite, or describe the exception )

Question 4:

Two days ago, Plaintiff’s attorney won a jury verdict.  That night, Plaintiff’s attorney updated her Facebook status to “Million dollar win against big bad insurance company!  Who wants to be next?”  According to at least one state bar, for the purposes of the ethics rules, the attorney’s status update should be treated as an _____________.

Question 5:

Jury tampering is unethical.  (call me crazy).  In addition, some courts have held that there is an ethical duty to report juror misconduct, even if the case is going your client’s way. The Runaway Jury involves lawyers who, at the very least, should have suspected juror misconduct in a tort suit in which many millions of dollars were at stake.

The subject of the trial was different in the book than it was in the movie.  For one point each, identify the industries on trial in, respectively, the book & movie versions of The Runaway Jury.

Don’t forget to #give4bob

 

Tech Updates

A few updates on issues related to tech ethics.

In other words, I’m suffering from writer’s block and don’t have an original thought to post today.

A few weeks ago, I blogged on cloud storage.  Many lawyers want a recommendation as to the best cloud storage vendors.  That’s not something I’m supposed to do.

However, I can point you to this:  Robert Ambrogi is one of nation’s leading commentators on legal technology, with his LawSites blog consistently one of the best.  Earlier this week, he reviewed Citrix Sharefile.  The review is HERE.

Also, for those of you who were in Montreal, you’ll recall that I mentioned that Ravel Law and Harvard Law Library had partnered to make HLL’s entire collection available for free online.  When it was announced last fall, the project was heralded as a significant change in the access to justice landscape.  As Ambrogi updates,  Ravel and Harvard have the complete collection of California caselaw online.

Speaking of legal technology and access to justice, if you’d like to contribute to A2J while at the same time honoring Bob Paolini’s service to the VBA, check out this post from a few days ago.

Thank you to everyone who offered their condolences on the Steelers playoff loss.  I’m over it and am looking forward to next season, when I’ll resume climbing the Stairway to Seven.

#Give4Bob

Rule 6.1 is the pro bono rule.  It urges lawyers to provide at least 50 hours of pro bono legal services per year.  The rule also suggests that lawyers should “contribute financial support to organizations that provide legal services of limited means.”  Rule 6.1(b).

One such organization is the Vermont Bar Foundation.  Its mission includes raising funds for programs that promote equal access to justice for all Vermonters.  Over the years, the Foundation has raised more than $799,0000 through its Access to Justice campaigns.

Lawyers from throughout the state and the profession have contributed to A2J, whether financially, as members of the A2J campaign committee, or as county captains. Among them, though, Bob Paolini has played a critical role.

In 1996, the VBA hired Bob as its executive director.  Few would disagree that Bob’s hire ranks as one of the best hiring decisions ever made by a legal organization in Vermont. But for Bob’s leadership and vision, the organization would not be what it is today.

Last fall, Bob decided to step down as E.D.  His replacement will be named sometime in the next few months.

Bob’s work spanned the gamut of issues affecting lawyers and the legal profession. However, some of his best work, and the work closest to his heart, was on A2J issues.  Bob devoted himself to raising awareness and encouraging involvement. As he often said to lawyers, “the VBF is our charity.”

The VBF’s Access to Justice committee raises funds for the Poverty Law Fellowship, a position in which a lawyer provides legal services to low income Vermonters.  Bob Paolini was instrumental in creating the Fellowship  Since 2008, four extraordinarily talented and tireless lawyers have served as Poverty Law Fellows, not only providing direct legal services, but helping to raise funds & awareness on critical A2J issues:

  • 2008-2010         Grace Pazdan         The Foreclosure Crisis
  • 2010-2012          Jessica Radbord     Adequate Housing; the Hurricane Irene Disaster
  • 2012-2014          Jay Diaz                    Helping low-income children to succeed in school
  • 2014-2016          Katelyn Atwood     Vermont’s Military Veterans

Jeff Johnson co-chairs the Access to Justice Campaign.  Mary Kehoe co-captains Chittenden County’s efforts.  At the Chittenden County Bar Association’s 2015 holiday party, Jeff and Mary presented a fabulous idea:  thank Bob for all he has done as the VBA’s executive director by donating to the 2015-2016 Access to Justice campaign for the next Poverty Law Fellowship.

As I mentioned this weekend in Montreal at the YLD Thaw, I can think of no better way  to honor Bob for everything he’s done as ED than by donating to a cause that means so much to him and that, frankly, might not exist but for his vision and devotion to A2J issues.

If you haven’t already donated, consider doing so in his honor.  If you’ve already donated, consider giving a bit more, again, in Bob’s name.  To donate, go HERE.

Thank you very much.

 

 

Five for Friday #8 – Answers

C’etait un evenement fantastique!

That’s how I’d describe this recently concluded YLD Thaw in Montreal.  Special thanks to Gavin Boyles and the YLD Board for putting on another great show.

Not many submissions this week, probably because so many of you took part in the Thaw Bowl III in Montreal on Friday.  Congrats to Andrew Delaney and the team from Martin & Associates on defending their title, earning the coveted special edition VBA mugs in the process.

As for this week’s #FiveforFriday results, winter may have been milder than normal, but this week’s HONOR ROLL reminds me of Three Dog Night.  With only Lauri Fisher earning honors, one really is the loneliest number!

ANSWERS

Question 1:

Which is specifically required by the trust accounting rules?

  • A. Secure Storage of Signature Stamps
  • B. Three Way reconciliation
  • C. “Good funds” prior to disbursement
  • D. “Collected funds” prior to disbursement

Question 2

Vermont lawyers are required to self-report:

  • A. Violations of the Rules of Professional Conduct
  • B. Criminal Convictions
  • C. Adverse Malpractice Judgements
  • D. Discipline Imposed in another Jurisdiction

Question 3

Attorney called me with inquiry. I said:

“You could, but you don’t have to if you learned about it in the course of representing a client.”

Given my response, what is it that Attorney asked whether she has to do?

REPORT ANOTHER ATTORNEY 

Question 4

Your divorce client says:  “I bet he used that app to talk to her.  Can we get that stuff? Or is it gone? You should subpoena his cell phone.”

You ask which app.

She replies “you know, the one with Ghostface ChillahOr maybe it’s called Noface Chillah now. I wonder if their dirty talks are still there.”

The APP is SNAPCHAT

Question 5

Today’s CLEs include a seminar on the ethics of advising clients on marijuana related issues.  Some might argue that Dr. Dre’s debut album is related to the topic.

Five for Friday #8

Bonjours!   I’m in Montreal for the YLD Thaw.  Presenting a true “Five for Friday” later today – 5 rounds of questions for the coveted Thaw Bowl title.

Sorry I’m late.  Here are 5 of the questions that’ll be asked later today. As always, please forward to anyone who might be interested and use search engines, books, or colleagues for help — except for Question 5.   Email your answers to michael.kennedy@vermont.gov

Question 1:

Which is specifically required by the trust accounting rules?

  • A. Secure Storage of Signature Stamps
  • B. Three Way reconciliation
  • C. “Good funds” prior to disbursement
  • D. “Collected funds” prior to disbursement

Question 2

The Vermont Rules of Professional Conduct require lawyers to self-report:

  • A. Violations of the Rules of Professional Conduct
  • B. Criminal Convictions
  • C. Adverse Malpractice Judgements
  • D. Discipline Imposed in another Jurisdiction

Question 3

Attorney called me with inquiry. I said:

“You could, but you don’t have to if you learned about it in the course of representing a client.”

Given my response, what is it that Attorney asked whether she has to do?

Question 4

Your divorce client says:  “I bet he used that app to talk to her.  Can we get that stuff? Or is it gone? You should subpoena his cell phone.”

You ask which app.

She replies “you know, the one with Ghostface ChillahOr maybe it’s called Noface Chillah now. I wonder if their dirty talks are still there.”

WHAT APP IS YOUR CLIENT TALKING ABOUT?

Question 5

Today’s CLEs include a seminar on the ethics of advising clients on marijuana related issues.  Some might argue that Dr. Dre’s debut album is related to the topic.

  • Name the iconic album.

Crowdfunding: The More Things Change….

The first post to this blog argued that a lawyer’s duty of competence includes a duty to stay abreast of developments in technology and the benefits and risk thereof.  It’s HERE.

Today, I came across a tech ethics issue I hadn’t previously considered:  is it ethical for a lawyer to use a “crowdfunding platform” to solicit donations to fund the representation of  a client who cannot afford the lawyer’s fee?

The answer, according to the Philadelphia Bar Association, is “yes, as long as the lawyer complies with the rules.” The full text of the Philly advisory opinion is HERE.

I love the opinion.  Why?  Good question.  Let me tell you why.

You’d be surprised how often lawyers tell me “we need to change the rules to keep up with technology.”

No.  We.  Don’t.

Let’s use Rule 1.6 as an example.  Comment 16 tells us that:

  • “A lawyer must act competently to safeguard information relating to the representation of a client against inadvertent or unauthorized disclosure by the lawyer or other persons who are participating in the representation of the client or who are subject to the lawyer’ supervision.”

The rule does not reference technology.  In other words, the rule draws no distinction between the lawyer who is having a conversation with a person who is standing two feet away and a lawyer who is emailing a person who is 5000 miles away.

Advances in technology that have resulted in new methods of communicating & transmitting information have not changed a lawyer’s duty to safeguard client information that is communicated & transmitted. Are the risks associated with storing client information in the cloud different than those associated with talking with a client in a crowded hallway at the county courthouse?  Of course!  But the duty not to disclose otherwise protected information remains the same in each situation.

That’s why the Philly opinion is great.  It doesn’t treat “crowdfunding platforms” as new creatures that require new rules.  Rather, it reminds lawyers that the rules that apply when using a crowdfunding platform are the same rules that apply to any other representation.  That is, if a lawyer & client use crowdfunding to raise money  to cover the lawyer’s fee, the lawyer must:

Remember: advances in technology do not change the duties lawyers owe to client, courts, and third persons.

Some of you might be muttering “what’s a ‘crowdfunding platform’ ?”  If you want to learn more, or if you think they might help your clients, the wikipedia entry is HERE.  You’ve probably heard of GoFundMe and Kickstarter.  They are crowdfunding platforms.  For a list of the top 10 by traffic, go HERE.

Are you required to learn about crowdfunding?  No.  But, if a client asks about crowdfunding your fee, “i don’t know about that &  it’s probably not allowed” might not cut it.

Finally, as Margaret Barry of Vermont Law School has mentioned to me, advances in technology will improve access to justice.  That is the case with crowdfunding platforms. As the Philadelphia Bar Association noted, “[c]rowdfunding sites can be a beneficial source of funds allowing the public to assist in the assertion of valid legal claims that might otherwise go without recourse.” So, please, don’t succumb to the knee jerk reaction that if it’s new, it must be unethical.  There’s too much at stake for that thought process to prevail.

Crowdfunding