Five for Friday #65

For the first time, Five for Friday is live & on location in Bennington County!  I’m at the VBA’s Mid-Winter meeting.   Sadly, the forecast suggests that the name of the meeting complies with the advertising rules.

Rules

  • There are none. It’s open book, open search engine, use whatever resource you have.
  • Exception: Question 5.  We try to play that one honest.
  • Team entries welcome.  Creative team names encouraged.
  • Unless stated otherwise, the Vermont Rules of Professional Conduct apply
  • Please e-mail answers to michael.kennedy@vermont.gov
  • Please do not use the “comment” feature to submit your answers
  • I will post the answers Monday, along with the week’s Honor Roll
  • Please consider sharing the quiz with friends
  • Hashtag & share: #fiveforfriday

Question 1

The Vermont Supreme Court has described a particular as “prophylactic.”  The Court used the word, in part, due to what it termed as the “Hobson’s Choice” that would arise if:

  • A. A client had to disclose a confidence in order to protect it
  • B. A criminal defendant had to take a plea to avoid going to trial with ineffective& incompetent counsel
  • C. A client had to pay an unreasonable fee in order for disciplinary counsel to have grounds to prosecute the lawyer for charging  an unreasonable fee

Question 2

Lawyer represents Client. Lawyer reasonably believes that Client will offer false testimony. However, the rules prohibits Lawyer from refusing to offer the evidence.

  • What type of case must this be?

Question 3

What do these rules have in common?

  • A. The rule requiring zealous representation
  • B. The rule requiring lawyers to maintain copies of ads for 2 years
  • C. The rule prohibiting the appearance of impropriety
  • D. The rule prohibiting conduct that adversely reflects on a lawyer’s fitness to practice law

Question 4

The “self-defense” exception to Rule 1.6 is often discussed with respect to:

  • A.    Disclosing a client’s intent to commit a crime
  • B.    Disclosing a misrepresentation that a client made to the court
  • C.    Responding to a client’s negative online review
  • D.    Withdrawing upon discovery of a conflict that was not apparent at the outset of the representation

Question 5

Name the iconic musician/songwriter whose lyrics are cited more often in U.S. judicial opinions than any other musician.  Chief Justice Roberts and former Justice Scalia are among the scores of judges who have cited to the songwriter.

the-quiz

 

 

 

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An Opening Skirmish? 2nd Circuit Rejects Challenge to Ban on Nonlawyer Ownership of Law Firms

Rule 5.4(d) of the Vermont Rules of Professional Conduct prohibits lawyers from practicing in or forming a for-profit firm if (1) a nonlawyer owns any interest therein; (2) a nonlawyer holds a position similar to director or officer (or partner); or (3) a nonlawyer can control or direct a lawyer’s professional judgment.

Last year, I posted a series of blogs in which I asked whether it’s time to rescind 5.4 and authorize lawyers to practice in so-called “Alternative Business Structures.”  There are strong arguments in favor of ABS.  Chief among them, the infusion of capital, ingenuity, talent, and expertise in running a business might make lawyers and firms more efficient, more flexible, and better suited to provide clients with access to cost-effective legal services.  My posts aren’t all that original.  Rather, they summarize an ABA issues paper.  Nevertheless, I concluded that nonlawyer ownership is coming.

Josh King is the Chief Legal Officer at Avvo.  For a great take on how a careful and smart implementation of ABS might help both lawyers & clients, I recommend this post from Josh.

Last week, the 2nd Circuit Court of Appeals rejected a law firm’s challenge to New York’s ban on nonlawyer ownership. Jacoby & Meyers claimed that the rule violated the first amendment rights of association and to petition the government on behalf of clients.  In particular, per the ABA Journal, “Jacoby & Meyers  had argued it needed outside investment from nonlawyers to expand and increase efficiency, leading to reduced legal fees and the ability to represent more clients of limited means.”  Stories on the ruling and link s to the opinion ran in the ABA Journal, the Wall Street Journal Law Blog, How Appealing, and the Legal Profession Blog.

I’d be surprised if a constitutional challenge removes the ban on nonlawyer ownership & management from the ethics rules.  Rather, as a profession, we must continue to examine whether the rule makes sense. As noted at Above The Law, our task becomes increasingly important as more & more jurisdictions around the world and within the U.S. report not only the sky’s failure to fall following elimination of the ban, but a sunnier, bluer sky.

$1 Billion

Update: March 28 at 3:43 PM.  Avvo’s Josh King was nice enough to let me know that the $1 billion is only on tv ads.  Josh indicates that the amount spent on all attorney advertising is between $4 and $5 billion.

This year, it’s estimated that U.S. lawyers and law firms will spend over $1 billion on advertising.

$1 Billion.

You read that correctly.

The ABA Journal has the story here: Legal Advertising Blows Past $1 Billion And Goes Viral.

By comparison, in FY 2015, the Legal Services Corporation’s budget was $375 million.  (Editorializing? Maybe.  But, also, fact.)

Some of the lawyers/firms highlighted in the ABA Journal’s article:

  • an all-female firm that uses the catchphrase “Ever Argue with a Woman?
  • an attorney whose ads made him such a celebrity that a mother threw a birthday party for her 2-year-old in which the theme was…..the attorney.
  • a lawyer whose alter ego is the Texas Law Hawk.
  • the lawyer who originated the campaign “If you are injured in a car accident, call us immediately” and whose firm now spends between $30 and $40 million per year on advertising.

The article also includes an interesting recap of the history of lawyer advertising.  From the days when the ABA’s Canons of Professional Ethics banned nearly all advertising and, referring to lawyer advertising, included the ominous statement that “[t]he future of the republic, to a great extent, depends upon our maintenance of justice, pure and unsullied,” to the Supreme Court’s historic decision in Bates v. State Bar of Arizonato today’s landscape.

I’ve worked in the Professional Responsibility Program since 1999.  We’ve not received many advertising complaints. Maybe 5 or 6 in 18 years.

Vermont’s advertising rules are in Rules 7.1, 7.2, 7.3, 7.4, and 7.5.   It’s a violation to advertise a firm as being “injury experts” and “the experts” in particular areas of law.  It’s also impermissible to advertise as a “County’s Premier Criminal Defense Firm.”

I’ve never been a huge fan of the advertising rules.  I’m not against them, just not a fan.

The Association of Professional Responsibility Lawyers recommended that the ABA streamline its Model Rules on advertising.  The comment period closed on March 1.  I’m curious to see how the ABA responds.

$1 Billion.  On ads.

jimmy mcgill

 

 

Monday Morning Answers: #64

Friday’s questions are HERE.  The answers follow the Honor Roll.

Honor Roll

Answers

Question 1

Attorney called with an inquiry.  I listened, then said:

“Good question.  Here’s what it comes down to: your duty is to take reasonable precautions to protect the information from unauthorized disclosure. I’ll send you a few blog posts I’ve written on what ‘reasonable precautions’ are.”

Most likely, Attorney called to discuss:

  • A.  Cloud Storage/Cloud-Based Practice Management Systems.  See, this blog post.
  • B.  A disciplinary complaint that is under investigation
  • C.  A disciplinary complaint that has resulted in formal charges
  • D.. Electronically Stored Information that was inadvertently produced in discovery and that opposing counsel is trying to “claw back”

Question 2

Lawyer works for X.  Lawyer recently accepted a new job with a new employer. Next week, Lawyer will leave X to work for Y.

Y represents a client whose interests are materially adverse to a client who Lawyer represented while working at X.   The two matters are substantially related to each other. Lawyer has a conflict.

The rules will not impute Lawyer’s conflict to other attorneys at Y.  Rather, the rules will allow Y to screen Lawyer.

Which is most likely?

  • A.  X or Y is a government agency.    See, Rule 1.11(d), Comment [2].  The rules allow for screening when a lawyer moves to or from government practice.
  • B.  X and Y are private law firms.
      • B is not correct.  Nothing in the question suggests that both X and Y must be private firms.
  • C.  X represents a former employee of a corporation
      • C is not correct.  Lateral transfers and screens are not relaxed merely because a former client is also a former employee of a corporation.
  • D.  X and Y are in different jurisdictions
      • D is not correct. Lateral transfers and screens are not impacted by the fact that firms are in different jurisdcitions.

Question 3

Attorney called back with another inquiry. I listened, then asked “was it more than $1,000?”

Most likely, Attorney called to discuss:

  • A.   A client who brought a personal check to a real estate closing.  See, Rule 1.15(f) and (g).  Rule 1.15(f) requires a lawyer to have collected funds prior to disbursing from trust.  Rule 1.15(g) sets out instruments against which a lawyer may disburse upon deposit; in other words, instruments that we will presume to constitute collected funds upon deposit. Per Rule 1.15(g)(4) personal checks that do not exceed $1000 are among those instruments.  In this answer, “real estate closing” was a clue.  Buyers often bring personal checks to closings to cover any unforeseen costs. The rule, however, applies beyond closings, to any trust account transaction involving a personal check.
  • B.   Attorney’s deposit of Attorney’s own funds into a  trust account
    • This is not correct. Rule 1.15(d) allows an attorney to deposit an attorney’s own funds into trust, but only in amount necessary to cover bank charges and fees.  There is no $1,00o limit. In fact, for many of you, $1000 would far exceed charges and fees and, therefore, would serve as an impermissible “float.”
  • C.   Funds in Attorney’s trust account that belong to a client Attorney can’t locate
  • D.   Funds in Attorney’s trust account for whom Attorney cannot determine the      owner
    • C & D are incorrect. An attorney’s obligations with respect to unexplained trust funds are not impacted by the amount.

Question 4

Over the past few weeks, attorney regulators and legal ethics types throughout the country have turned their attention Congress.  The reason? Earlier this month, the Chair of the House Judiciary Committee wrote to the ABA and attorney regulators in all 50 states urging them to take action on:

  • A.   Vacancies on the Federal Bench
  • B.    Attorney Advertising Related to Lawsuits involving Pharmaceuticals.  See, Bloomberg BNA has the story HERE.
  • C.    Licensing Paralegals
  • D.   Bar Admission Rules that Impede Trade

Question 5

This week’s Question 5 is inspired by a conversation I had a few days ago with a loyal reader .  The reader followed-up by emailing me a YouTube clip.

Hint: if a question includes “the reader follow-up by emailing me YouTube clip,” well, that’s a hint.

Fictional lawyer spent a week at a fictional trial advocacy school.  The group of lawyers on staff at the school constantly preached “no matter the case, strike first, strike hard, no mercy!”

What name have the lawyers on staff at the trial advocacy school likely given to their group?

My readers know 80’s movies!

The staff likely named itself “Cobra Kai” in honor of John Kreese’s Cobra Kai dojo in The Karate Kid.

Five for Friday #64

Interesting that #64 occurs during the NCAA tournament.  If anyone out there has Xavier-Gonzaga in the regional final, send me a picture of your bracket and you’ll make the Honor Roll.

Rules

  • There are none. It’s open book, open search engine, use whatever resource you have.
  • Exception: Question 5.  We try to play that one honest.
  • Team entries welcome.  Creative team names encouraged.
  • Unless stated otherwise, the Vermont Rules of Professional Conduct apply
  • Please e-mail answers to michael.kennedy@vermont.gov
  • Please do not use the “comment” feature to submit your answers
  • I will post the answers Monday, along with the week’s Honor Roll
  • Please consider sharing the quiz with friends
  • Hashtag & share: #fiveforfriday

Question 1

Attorney called with an inquiry.  I listened, then said:

“Good question.  Here’s what it comes down to: your duty is to take reasonable precautions to protect the information from unauthorized disclosure. I’ll send you a few blog posts I’ve written on what ‘reasonable precautions’ are.”

Most likely, Attorney called to discuss:

  • A.  Cloud Storage/Cloud-Based Practice Management Systems
  • B.  A disciplinary complaint that is under investigation
  • C.  A disciplinary complaint that has resulted in formal charges
  • D.. Electronically Stored Information that was inadvertently produced in discovery and that opposing counsel is trying to “claw back”

Question 2

Lawyer works for X.  Lawyer recently accepted a new job with a new employer. Next week, Lawyer will leave X to work for Y.

Y represents a client whose interests are materially adverse to a client who Lawyer represented while working at X.   The two matters are substantially related to each other. Lawyer has a conflict.

The rules will not impute Lawyer’s conflict to other attorneys at Y.  Rather, the rules will allow Y to screen Lawyer.

Which is most likely?

  • A.  X or Y is a government agency
  • B.  X and Y are private law firms.
  • C.  X represents a former employee of a corporation
  • D.  X and Y are in different jurisdictions

Question 3

Attorney called back with another inquiry. I listened, then asked “was it more than $1,000?”

Most likely, Attorney called to discuss:

  • A.   A client who brought a personal check to a real estate closing
  • B.   Attorney’s deposit of Attorney’s own funds into a  trust account
  • C.   Funds in Attorney’s trust account that belong to a client Attorney can’t locate
  • D.   Funds in Attorney’s trust account for whom Attorney cannot determine the      owner

Question 4

Over the past few weeks, attorney regulators and legal ethics types throughout the country have turned their attention Congress.  The reason? Earlier this month, the Chair of the House Judiciary Committee wrote to the ABA and attorney regulators in all 50 states urging them to take action on:

  • A.   Vacancies on the Federal Bench
  • B.    Attorney Advertising Related to Lawsuits involving Pharmaceuticals
  • C.    Licensing Paralegals
  • D.   Bar Admission Rules that Impede Trade

Question 5

This week’s Question 5 is inspired by a conversation I had a few days ago with a loyal reader .  The reader followed-up by emailing me a YouTube clip.

Hint: if a question includes “the reader follow-up by emailing me YouTube clip,” well, that’s a hint.

Fictional lawyer spent a week at a fictional trial advocacy school.  The group of lawyers on staff at the school constantly preached “no matter the case, strike first, strike hard, no mercy!”

What name have the lawyers on staff at the trial advocacy school likely given to their group?

 

 

So You Want to Represent Both Buyer & Seller?

Facts:  Mother owns home.  Mother wants to sell home to Son.  Mother & Son agree on the details, without the assistance of counsel.  Mother and Son ask Attorney to handle the purchase & sale, and to represent each of them at closing.

Wait a minute! Is it already April 1?  Mother & Son agreeing on details – of anything – without the assistance of counsel? In what crazy world does that happen?!?!

Anyhow, I digress.  Does Attorney have a conflict? If so, can it be waived?

According to IIlinois State Bar Professional Conduct Opinion 2017-04, the answer is yes there’s a conflict, and it likely cannot be waived.

According to the Illinois State Bar:

  • Representation of a buyer in a real estate transaction is directly adverse to representation of a seller.
  • Thus, Attorney has a conflict.
  • It is not reasonable for Attorney to believe that Attorney will be able to provide competent and diligent represntation to both Mother & Son.
  • Thus, the conflict cannot be waived.

A few relevant passages from the opinion:

  • “Pursuant to Rule 1.7(b)(1), the lawyer must analyze whether the lawyer may reasonably believe that the lawyer will be able to provide competent and diligent representation to each affected client. The question is whether a reasonable lawyer would conclude that the lawyer could provide the required diligence and competence to both the buyer and the seller in the transaction.”
  • ” In our view, if the buyer and the seller have not already executed a valid sales contract, the lawyer could not reasonably believe that he or she could provide competent and diligent representation to both the buyer and the seller. The lawyer could not negotiate on behalf of one client without harming or potentially harming the other client. The lawyer’s obligations and loyalties are so divided that the lawyer could not reasonably believe that the lawyer could provide adequate representation to both parties.”
  • “Even if the parties agree on the terms of the sale, and have already executed the sales contract, we believe that it is highly unlikely that a lawyer could properly represent both the buyer and seller in concluding the transaction. Issues often arise “after the parties have executed the contract and prior to closing that would require the lawyer to give unqualified advice to his or her client.”

Vermont’s Rule 1.7 is identical to the Illinois rule.  In Vermont, “a lawyer shall not represent a client if the representation involves a concurrent conflict of interest.”  Rule 1.7(a).  A concurrent conflict exists:

  • if the representation of a client will be directly adverse to another; Rule 1.7(a)(1), or,
  • if there is a significant risk that the representation of a client will be materially limited by the lawyer’s responsiblities to another. Rule 1.7(a)(2).

So, in Vermont, Attorney has a concurrent conflict:

  • if the representation of Mother will directly adverse to Son; or,
  • if there is a significant risk that the representation of Mother or Son will be materially limited by Attorney’s duties to the other.

If a concurrent conflict exists, Vermont’s 1.7 allows it to be waived if 4 criteria are met. The first is in Rule 1.7(b)(1): Attorney must reasonably believe that Attorney will be able to provide competent and diligent representation to both Mother and Son.

The Illinois State Bar concluded that it would not be reasonable for Attorney to believe such a thing. The opinon cites to the VBA Advisory Ethics Opinion 2004-3.

In the VT opinion, the Vermont Bar Associatioin’s Professional Responsibility Committee concluded that “an attorney may not simultaneously represent a client who is selling a parcel of real property and provide limited representation to the buyer of the same real estate by providing a title insurance policy to such buyer.”

The opinion is not exactly on point with the hypo with which I started this post.  However, the Committee went through exactly the correct analysis. Is there a concurrent conflict? If so, can it be waived.

In addressing the questions, the Comittee referred to an advisory opinion it had issued in 1978: VBA Advisory Ethics Opinion 78-04.  The opinion was rendered pursuant to the old Code of Professional Responsibility, the rules that governed until September 1, 1999.  Under the Code, even when faced with a conflict, a lawyer was allowed to “represent multiple clients if it is obvious that he can adequately represent the interest of each and if each consents to the representation after full disclosure of the possible effect of such representation on the exercise of his independent professional judgment on behalf of each.”  Code of Professional Responsibility, DR-5-105(C).

The Committee concluded that the rule’s two phrases had equal meaning.  That is, “[i]t is important to emphasize, however, that consent – even if knowledgeably given – is not a general panacea to conflicts of interest. It will only vitiate the conflict if ‘it is obvious that [the lawyer] can adequately represent the interest of each.’ ”

From there, the 1978 Committee concluded that:

  • “It is difficult to see how a lawyer could ever make full disclosure in the real estate area given the myriad of problems that may arise. Moreover, real estate transactions often involve parties of different legal sophistication and disclosures suitable to one may be insufficient for the other.”

And, that

  • In [its view], the Committee reaffirms its position that representation of both purchase and seller in a normal ‘arms-length’ real estate transaction is unethical, at least when the representation of neither side is in any way limited.”

Now, perhaps times have changed. And, as did the Illinois and Vermont comittees in each of the three opinions I cited to in my blog, I am not going to try to list each and every situation in which a waiver may be valid under Rule 1.7(b).

All I’m saying is this: if Attorney wants to represent both Mother and Son, I read Rule 1.7(b) as requiring that it be reasonable for Attorney to believe that he can provide competent and diligent representation to each.

As always, let’s be careful out there folks.

Hill Street Blues

 

 

 

Lateral Transfers – Is VT’s Rule too Strict? Part 2.

Last week, I blogged  on lateral transfers, imputed conflicts, and ethical screens.

Consider this hypothetical:

  • Husband and Wife are divorcing
  • Old Firm represents Husband
  • New Firm represents Wife
  • Lawyer works at Old Firm.
  • Lawyer leaves for a job at New Firm

Upon Lawyer’s transfer, will New Firm be disqualified from representing Wife?

In Vermont, the answer is “it depends.”

The applicable rule is V.R.Pr.C. 1.10(a).  The critical question is whether Lawyer participated personally and substantially in Old Firm’s representation of Husband.

  • If the answer is “yes,” the rule imputes Lawyer’s conflict to New Firm and prohibits New Firm from curing the conflict by screening Lawyer.
  • If the answer is “no,” New Firm is not disqualified, even over Husband’s objection. as long as it screens Lawyer.

Last week, comparing the rule to the more lenient ABA Model Rule 1.10, I asked readers whether Vermont’s rule is too strict. I did not receive many responses.

Lateral Transfers: Three Different Approaches

I’ll use the original hypothetical throughout this post.

Jurisdictions are split on the issue.

One approach is to impute conflicts and prohibit screening.  Under this approach, absent Husband’s informed consent to waive the conflict, Lawyer’s conflict is imputed to all attorneys in New Firm and the firm is disqualified.

Other states, allow screening, even without the former client’s consent, but with exceptions.  This is Vermont’s approach.  Lawyer can be screened, but only if Lawyer did not participate personally & substantially in Old Firm’s representation of Husband.   Similarly, New Hampshire, New Firm could screen Lawyer, unless Lawyer “had substantial involvement in, or received substantial material information about, a matter that is ongoing at the time of the firm transfer and that would be the focus of the screening procedures.”  N.H. Rule 1.10(c).  

Finally, still other states allow New Firm to screen Lawyer, even over Husband’s objection, no matter how involved Lawyer was in Old Firm’s representation of Husband.  This is the  ABA approach, as reflected in ABA Model Rule 1.10, and is often referred to as “nonconsenual screening.”

The 2009 Amendment to the ABA Model Rules

Prior to 2009, the ABA Model Rules did not allow firms to screen lateral transfers.  In our hypo, absent Husband’s informed consent to waive a conflict, Lawyer’s conflict was imputed to New Firm and New Firm could no longer represent Wife.

However, upon the recommendation of the Standing Committee on Professionalism Ethics, the House of Delegates amended the rule to allow firms to screen lateral transfers, even over the objection of the affected former client.  The Committee’s Report & Recommendaton includes a majority view and a dissenting minority opinon.

By way of summary, the majority’s points:

  • Nonconsensual screening allows lawyers to switch jobs/enjoy professional mobility.
  • Screening strikes an appropriate balance between protecting the former client’s confidences & allowing lawyers to take jobs of their choosing
  • The rules already allow screening when lawyers move to & from government employment.
  • Several states already allow screening when private lawyers switch firms.
  • Screening works, as evidenced by the lack of disciplinary complaints & prosecutions in the states that allow it.

The dissent argued against nonconsensual screening, concluding:

  • “Current rule 1.10 protects former clients against the risk of adverse use or disclosure of confidential information. The proposed amendment substitutes the law firm’s resolution of this risk for the client’s. It catapults the lawyer’s interests over the former client’s determination at precisely the time the lateral lawyer and the new firm have their own and their client’s interests understandably in mind. Lawyers should consult with former clients about these matters and be bound by the client’s determination, which is precisely what current Model Rule 1.10 requires.”  Report & Recommendation, p. 17.

Screening Procedures

Jurisidictions that allow nonconsensual screening generally require the same types of screening procedures.

in Vermont, if Lawyer did not participate personally and substantially in Old Firm’s representation of Husband, New Firm must comply with the three subsections of Rule 1.10(a)(2).  Generally, New Firm must:

  1. Screen Lawyer from any participation in the matter and not letter Lawyer share in any fee generated by the matter; and,
  2. Provide Old Firm with written notice & description of the screening procedures that New Firm will use; and,
  3. Certify compliance with the screening procedures  periodically throughout the life of the case.

The ABA/BNA Lawyers Manual on Professional Conduct has written on The Elements of an Effective Ethics Screen.

Is Screening Enough?

Nonconsensual screening raises concerns regarding loyalty and confidentiality.  In our hypo, Lawyer will have “switched sides” in the Husband v. Wife dispute, and might share information about Husband with New Firm.

It would be a violation of the rules for New Lawyer to share the information.  For example, Rule 1.9(c)(1) prohibits Lawyer from using any information to Husband’s disadvantage.  Rule 1.9(c)(2) prohibits Lawyer from revealing any information about the representation.

To some, that’s not enough.

For example, the ABA Section on Litigation published this post shortly after the ABA House of Delegates adopted Model Rule 1.10.  The post quotes a delegate who opposed nonconsensual screening as saying:

  • “Today the ABA abandoned its commitment to client loyalty and confidentiality for nothing more than an undemonstrated need for lawyer convenience . . . Today, we compromised our birth right.”

The post goes on to quote Robert L. Rothman. At the time, Rothman was the Chair of the ABA Section of Litigation.

  • “Unfortunately, under new Model Rule 1.10, clients who believe their interests are placed at risk when their former lawyer moves to an adverse law firm no longer can merely refuse to waive the conflict created by the lateral move, they must bear the burden of going to court if they wish to disqualify the former lawyer and his or her new firm,” says Rothman. “We believe the new rule undermines client loyalty and sends the wrong message to clients, who will see this as the profession placing its own economic interests ahead of the best interests of our clients.”

To others, screening is the answer, no matter Lawyer’s level of involvement with Husband’s matter at Old Firm.  In the Report and Recommendation from the ABA Standing Committee on Professionalism and Ethics,  the majority noted:

  • “Screening is not designed to impair the interests of clients, but to protect them. Screening provisions permitting private lateral screening have been adopted in nearly half the states, where hundreds of law firms and thousands of lawyers practice in cities like Baltimore, Charlotte, Chicago, Detroit, Louisville, Philadelphia, Pittsburgh, Portland, Seattle, and Wilmington, and in the various smaller communities in those states. No reported disciplinary cases or lawsuits have demonstrated any significant problem with the efficacy of screens. There is no record that screening in those states has been unable to protect confidentiality or to prevent the transferring lawyer from participating against the former client. Nor is there any record demonstrating that screens have been ineffective in the context of lawyers moving from government service to private practice. We are firmly convinced that screening can protect essential client interests in the context of private lawyers changing firms. The Ethics 2000 Commission came to the same conclusion.”

Is Vermont’s Rule Just Right or Too Strict?

Again, Vermont’s rule is more strict than the ABA’s.  We allow New Firm’s nonconsensual screening ofLawyer, unless Lawyer participated personally and substantially in  Old Firm’s representation of Husband.

In two posts last week, I asked whether our rule is too strict.  I did not receive many replies.

Two readers replied that Vermont’s rule is not too strict.  One wrote:

  • “The rule is not too strict.  We’ve got to stop making it easier for some lawyers to do things that make all of us look like scoundrels.”

My guess is that this lawyer’s comment  jibes with how  my non-lawyer friends and family members would react if they found themselves in Husband’s shoes upon Lawyer’s transfer to New Firm

An aspiring Vermont lawyer argued the opposite.  The aspiring lawyer wrote:

  • “my comment as to whether or not to adjust Rule 1.10(a)(2) would be to change it to match the ABA Model Rules.  It gives clients more freedom in choosing representation, it allows attorneys more employment opportunities and flexibility, and it allows firms to hire more seasoned attorneys without worrying about an attorney’s “personal or substantial” participation in former matters.”

Similarly, several months ago I heard from a Vermont attorney who was frustrated that our rule prevented a job change.  The attorney wrote:

  • “I understand the necessity to have such a rule, but the current iteration of the rule unfairly limits the movement of attorneys in Vermont. See generally Reporter’s Notes–2012 Amendment, V.R.Proc.C. 1.10 (Without such a procedure, a lawyer wishing to move from one Vermont firm to another may be denied his or her choice simply because of the unamended Rule 1.10)”

The attorney added that a potential new employer was “certainly large enough to put up a ‘wall’ until [the] litigation resolves itself.”

Connecticut does not allow screening.  A few years ago, the Connecticut Bar Association’s Committee on Professional Ethics recommended that the CBA amend its rules and adopt the ABA’s version of the rule.  The recommendation, which appeared in the Stoval Memo, is an excellent primer on the topic.  On page 8, it includes an argument that echoes the sentiment expressed by the frustrated lawyer who contacted me a few months ago:

  • “The Committee notes that amended Rule 1.10 does not permit ‘side-switching’ by an otherwise disqualified attorney. It simply permits other attorneys at his or her new  firm to continue to represent a party adverse to the moving lawyer’s former client.  1.9 would continue to prohibit such a lawyer from participating in a matter adversely to his or her former client, and would still dictate that the moving lawyer preserve former clients’ confidences and information, while still providing a lawyer the freedom to move  from one firm to another without encumbering his or her new firm with imputed conflicts of interest.”

Conclusion

I’m not ready to reach one.  I want to keep this debate going beyond me and 4 others.  What say ye?

  • A.  Leave V.R.Pr.C. 1.10 as is. If Lawyer participated personally & substantially in Old Firm’s representation of Husband, then New Firm can no longer represent Wife.  That’s the price of hiring Lawyer.

 

  • B.  Amend the rule. Trust New Firm to employ an effective screen and trust Lawyer to maintain Husband’s confidences. Prosecute Firm and Lawyer if they do not. Despite Lawyer’s  personal & substantial involvement at Old Firm, an effective screening rule strikes an appropriate balance between protecting Husband and allowing Lawyer the freedom to take another (perhaps, better) job.

Nonlawyers who are reading this, don’t hesitate to weigh in.  How would you feel if your lawyer started working at the firm that represents your adversary?

Irrelevant Post-Script

 

For you hockey fans, my head spun for weeks as I tried to figure out how to apply Rule 1.10 to Montreal’s hiring of Claude Julien within days of Boston’s decision to fire him .  Talk about switching sides. But then I learned that the B’s gave the Habs permission to negotiate with Julien.  Conflict waived.

Bruins

 

 

 

Monday Morning Answers: St. Patrick’s Day 2017

shamrock

I should be disbarred from NCAA tournament pools.  That’s all I’m saying on that topic.

Friday’s questions are HERE.  The answers follow today’s Honor Roll.

HONOR ROLL

  • Matt Anderson, Esq.
  • Penny Bennelli, Esq.
  • Beth DeBernardi, Esq.
  • Laura Gorsky
  • Anthony Iarrapino, Esq.
  • Glenn Jarrett, Esq.
  • Patrick Kennedy, First Brother
  • John Leddy, Esq.
  • Pam Marsh, Esq.
  • Joe McNeil, Esq.
  • Hal Miller, Esq.
  • Kane Smart, Esq.
  • Emily Tredeau, Esq.
  • Rusty Valsangiacomo, Esq.

ANSWERS

Question 1

There’s a rule that includes the following sentence: “A communication is false or misleading if it contains a material misrepresentation of fact or law, or omits a fact necessary to make the statement considered as a whole not materially misleading.”

It’s in the set of rules that deals with:

  • A.   Candor to the Court
  • B.   Conduct involving dishonesty, deceit, misrepresentation, and fraud
  • C.   Fairness to Opposing Party and Counsel
  • D.   Advertising/Communications Concerning a Lawyer’s Services.  See, V.R.Pr.C. 7.1

Question 2

Client asks Lawyer to draft a will.   Client intends the will to bequeath a substantial sum to Lawyer’s daughter.

Which is most accurate?

  • A.  Lawyer may not draft the will.
  • B.  Lawyer may not draft the will unless Client gives informed consent
  • C.   Lawyer may not draft the will unless Client gives informed consent, confirmed in writing.
  • D.  Lawyer may not draft the will unless Client is related to Lawyer’s daughter.  See, V.R.Pr.C. 1.8(c).

Question 3

“Astroturfing” is word that is slowly becoming more common in the world of legal ethics. The word is most often used to describe:

  • A.   A lawyer’s practice of posting fake positive reviews & testimonials online.  Check out this blog from North Carolina.
  • B.   A lawyer’s purchase of e-mail distribution lists for mass marketing purposes
  • C.   A lawyer’s surreptitious uses of social media to investigate an adversary
  • D.   A prospective client who consults with as many different firms as possible, attempting to create conflicts that will prohibit the firms from representing the client’s adversary.

Question 4

In legal ethics, “lateral transfers” often give rise to concerns related to:

  • A.   The trust accounting rules
  • B.   Fraudulent conveyances
  • C.   Conflicts of Interest.  Last Thursday, I posted a blog on this topic.  So far, I’ve only received 2 comments on the topic. I’ll share the (without identifying the commenters) in tomorrow’s post. If you’d like to chime in before then, please do.
  • D.   The failure to take reasonable precautions in the electronic storage or transmission of client information.

Question 5

Agnes McDermott was from County Roscommon in Ireland.  She left the Emerald Isle for the U.S., where she met and married a man named William.  Believe it or not, William was also from County Roscommon.  They settled in Newark, New Jersey.

In 1906, the couple had a son.  In 1956, President Eisenhower appointed their son to the U.S. Supreme Court.

Name the U.S. Supreme Court justice whose parents were from County Roscommon in Ireland.

The couple named their son after his father.  The answer is Justice William Brennan, Jr.

Brennan

 

Five for Friday: St. Patrick’s Day

Late start today.  Two reasons why.

First, St. Patrick’s Day coinciding with the first round of the NCAA tournament is, well, how I envision heaven.

Second, and related to the NCAA tournament, I spent the morning wondering whether to open an ethics investigation into the Vanderbilt kid who fouled at the end of the Northwestern game.  I bet that coaches Joe McNeil and Rusty Valsangiacomo are still shaking their heads.  Both are masters of teaching score & situation.

shamrock

The rules are the same as always:

  • Open book. Open internet.  Text-a-friend.
  • Except Question 5
  • Unless stated otherwise, the Vermont Rules of Professional Conduct apply.
  • Team entries encouraged.
  • e-mail answers to michael.kennedy@vermont.gov
  • I’ll post the answers and Honor Roll on Monday morning.

Question 1

There’s a rule that includes the following sentence: “A communication is false or misleading if it contains a material misrepresentation of fact or law, or omits a fact necessary to make the statement considered as a whole not materially misleading.”

It’s in the set of rules that deals with:

  • A.   Candor to the Court
  • B.   Conduct involving dishonesty, deceit, misrepresentation, and fraud
  • C.   Fairness to Opposing Party and Counsel
  • D.   Advertising/Communications Concerning a Lawyer’s Services

Question 2

Client asks Lawyer to draft a will.   Client intends the will to bequeath a substantial sum to Lawyer’s daughter.

Which is most accurate?

  • A.  Lawyer may not draft the will.
  • B.  Lawyer may not draft the will unless Client gives informed consent
  • C.   Lawyer may not draft the will unless Client gives informed consent, confirmed in writing.
  • D.  Lawyer may not draft the will unless Client is related to Lawyer’s daughter.

Question 3

“Astroturfing” is word that is slowly becoming more common in the world of legal ethics. The word is most often used to describe:

  • A.   A lawyer’s practice of posting fake positive reviews & testimonials online
  • B.   A lawyer’s purchase of e-mail distribution lists for mass marketing purposes
  • C.   A lawyer’s surreptitious uses of social media to investigate an adversary
  • D.   A prospective client who consults with as many different firms as possible, attempting to create conflicts that will prohibit the firms from representing the client’s adversary.

Question 4

In legal ethics, “lateral transfers” often give rise to concerns related to:

  • A.   The trust accounting rules
  • B.   Fraudulent conveyances
  • C.   Conflicts of Interest
  • D.   The failure to take reasonable precautions in the electronic storage or transmission of client information.

Question 5

Agnes McDermott was from County Roscommon in Ireland.  She left the Emerald Isle for the U.S., where she met and married a man named William.  Believe it or not, William was also from County Roscommon.  They settled in Newark, New Jersey.

In 1906, the couple had a son.  In 1956, President Eisenhower appointed their son to the U.S. Supreme Court.

Name the U.S. Supreme Court justice whose parents were from County Roscommon in Ireland.

the-quiz

 

 

 

 

 

Changing Firms: Is our rule too strict?

Lawyers often change jobs, moving from one firm to another.  These so-called “lateral transfers” can raise concerns about conflicts-of-interest, particularly when the new firm represents a client with interests adverse to a client represented by the former firm.  Many lawyers assume that the new firm can simply “wall off”, or screen, the new lawyer.  Under our current rules, that is not an accurate assumption.

Caveat: this column applies only to transfers from private firm to private firm.  Transfers to an from government work, including agency to agency, are governed by Rule 1.11(d) and are a topic for another day.

Here in 2017 I present the scenario:

  • Attorney works for New Firm
  • Attorney used to work for Old Firm
  • In the matter of Michael v. Corporate, Old Firm represents Michael and New Firm represents Corporate
  • Does Attorney’s lateral transfer disqualify New Firm?

In my view, the answer is “it depends.”  I’ll go through 2 possibilities.

Possibility 1:  Attorney Participated Personally & Substantially in the Representation of Michael while working at Old Firm.

As I interpret the rules, if Attorney participated personally & substantially in the representation of Michael while at Old Firm, Attorney has a conflict that is imputed to New Firm, and that cannot be cured by screening Attorney.

Start with Rule 1.9.  Section(b) indicates that Attorney has a conflict. I don’t think there’s any doubt that Attorney is prohibited from switching sides and representing Corporate in the same matter in which Attorney used to represent Michael.

Now, go to Rule 1.10. It’s the rule on the imputation of conflicts. Rule 1.10 was amended in 2012.  Depending on which copy of the green book you have, the current rule might be in the pocket part. Or, the rule is HERE.

Attorney’s conflict is based on Rule 1.9(b).  Thus, Rule 1.10(a) imputes the conflict to New Firm, unless one of the exceptions applies.

The exception in Rule 1.10(a)(1) does not apply.  Attorney’s conflict is not personal. It is a former client conflict that arises under Rule 1.9.

The exception in Rule 1.10(a)(2) does not apply.  Rule 1.10(a)(2) allows New Firm to screen Attorney if:

    1. Attorney’s prohibition is based on Rule 1.9(a) or (b); and
    2. Arises out of Attorney’s association with a prior firm; and
    3. In a matter in which Attorney “did NOT participate personally or substantially.”

Comment 7 hammers home the point: with lateral transfers, new firms can screen transfers, but only if the new lawyer is “one who ‘did not participate personally and substantially’ in the matter giving rise to the conflict.” (emphasis added).

In this version of the hypothetical, Attorney’s prohibition is:

  • based on Rule 1.9(b); and
  • arises out of Attorney’s association with a prior firm; and
  • arises out of a matter in which Attorney participated personally & substantially

Thus, Rule 1.10(a) imputes Attorney’s conflict to New Firm and prohibits New Firm from screening Attorney.  Of course, New Firm would not be disqualified if Michael provided informed consent, confirmed in writing.  See, Rule 1.9(a).

Possibility 2:  Attorney did not Participate Personally & Substantially in the Representation of Michael while working at Old Firm.

If Attorney did not participate personally & substantially in the representation of Michael, then it appears permissible for New Firm to screen Attorney.

If Attorney did not participate in the representation of Michael, Attorney likely does not have a conflict under Rule 1.9(a).  Of course, it is possible that Attorney acquired information about Michael, even without participating in Michael’s representation. If so, Attorney is bound to protect the information, but Attorney has a conflict under Rule 1.9(b).

However, in this scenario, the third prong of Rule 1.10(a)(2) is not present.  Let’s look at each prong again:

  • Rule 1.9(b) prohibits Attorney from representing Corporate; and
  • the prohibition arises out Attorney’s association with a prior firm; BUT
  • Attorney did not participate personally & substantially in the representation of Michael.

Therefore, Rule 1.10(a)(2) permits New Firm to screen Michael.  Subsections i, ii, and iii set out the specific screening procedures with which New Firm must comply.

ABA Model Rule 1.10 is not as strict as Vermont’s Version of Rule 1.10

In 2009, the ABA amended Model Rule 1.10(a)(2).  As amended, the Model Rule does not include the phrase “in a matter in which the disqualified lawyer did not participate personally and substantially.”  In other words, under the Model Rule, a new firm is permitted to screen a lateral transfer even if the new lawyer participated personally and substantially in the matter while at the old firm.

Question for Vermont

Should we follow the ABA’s lead and drop the ” participated personally & substantially” language?  That is, should we permit firms to screen new lawyers — no matter how substantial the lawyer’s involvement with a matter at a previous firm?

An argument for “no”:  the new lawyer has so much information that it would be patently unfair to allow new firm to remain in the case even if new lawyer is screened from participation.”

An argument for “yes”: Vermont is a small state with many potential conflicts.  We should not have a rule that restricts lawyers from leaving for new opportunities.

Go Cats Go!

conflict