Monday Morning Honors #260

Happy Monday! 

Thanks to all who wished the First Brother well!  He made it from Dunmore to Gettysburg, where he’ll spend this week camping near the battleground before continuing the trek to Savannah on Friday. 

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

Honor Roll

  • Evan Barquist, Montroll Oettinger & Barquist
  • Alberto Bernabe, Professor, UIC School of Law
  • Amy Butler, Amy Butler Law
  • Robert Grundstein
  • Keith Kasper, McCormick, Fitzpatrick, Kasper and Burchard
  • Jeanne Kennedy, JB Kennedy Associates, Mother (of the) Blogger
  • Patrick Kennedy, Amazon Web Services, First Brother
  • John T. Leddy, McNeil, Leddy, Sheehan
  • Pam Loginsky, Deputy Prosecuting Attorney, Pierce County, Tacoma, WA
  • Jack McCullough, Project Director, Mental Health Law Project, Vermont Legal Aid
  • Susan McManus, Office of the Public Defender, Bennington County
  • Jeffrey Messina, Messina Law
  • James Remsen, Master Planner, Parker Hannafin
  • Keith Roberts, Darby Kolter & Roberts
  • James Runcie, Ouimette & Runcie
  • Nikki Stevens, Firm Administrator, Langrock Sperry & Wool
  • Jonathan Teller-Elsberg, Sheehey Furlong & Behm
  • Jason Warfield, J.D.
  • Jack Welch, Esq.
  • Thomas Wilkinson, Jr., Cozen O’Connor

Answers

Question 1

Of the 7Cs of Legal Ethics, which specifically mentions “information related to the representation” in the rule that governs that C?

CONFIDENTIALITY.  V.R.Pr.C. 1.6(a) states that “a lawyer shall not reveal information relating to the representation of a client unless the client gives informed consent, the disclosure is impliedly authorized to carry out the representation, or the disclosure is required by paragraph (b) or permitted by paragraph (c).

The phrase “information related to the representation” is important.  Remember, as Comment [3] makes clear, Rule 1.6 “applies not only to matters communicated in confidence by the client, but to all information relating to the representation, whatever the source.”

Question 2

Yesterday I blogged about an order in which a New York trial judge sanctioned lawyers for uncivil and obstructive conduct during a deposition. 

Let’s imagine a similar incident involving a deposition that’s taken in a Vermont matter.  One of Vermont’s Rules of Professional Conduct makes it a violation for a lawyer to “engage in undignified or discourteous conduct which is degrading or disruptive to a tribunal.” 

Does the rule apply at a deposition?

  • A.           No.  A comment to the rule specifically leaves control of depositions to the trial courts.
  • B.           No, but a comment to the rule cautions lawyers against conduct that would be prohibited in court.
  • C.           Yes.  This is Rule 3.5(d).  As Comment [5] points out, the rule applies to “any proceeding of a tribunal.”  Rule 1.0(m) includes defines “tribunal” to include a deposition.

Question 3

Fill in the blank.  The same word goes in each blank.  What is it?

There’s a rule that sets out a lawyer’s duties when dealing with an __________ person.  The duties include not stating or implying that the lawyer is “disinterested,” and correcting any misunderstanding that the lawyer knows or reasonably should know that the __________ person has about the lawyer’s role.  A comment to the rule states that the “rule does not prohibit a lawyer from negotiating terms of a transaction or settling a dispute with the __________ person.”

Unrepresented.  This is V.R.Pr.C. 4.3.

Question 4

Lawyer called me with an inquiry.  I listened, then responded that “a comment to the rule, states that ‘matters are substantially related if they involve the same transaction or legal dispute or if there otherwise is a substantial risk that confidential factual information as would normally have been obtained in the prior representation would materially advance the client’s position in the new matter.’”

Lawyer didn’t contact me to discuss confidentiality.  Rather, given my response, Lawyer contacted me because Lawyer was concerned about, what?

A CONFLICT OF INTEREST between a client (or prospective client) and a former clientV.R.Pr.C. 1.9 prohibits a lawyer from representing a client whose interests are materially adverse to the interests of a former client in a matter that is the same as or substantially related to the matter in which the lawyer represented the former client.

Question 5

When the First Brother arrives in Savannah, he’ll be just over 200 miles southeast of Monticello, GA.  A movie that the American Bar Association has ranked as one of the Top 3 of all-time was filmed in Monticello. 

While most fans associate the movie with a neighboring state and its mud, in fact, the convenience store and courthouse that feature so prominently in the film are in Georgia.  In 2019, then federal judge Merrick Garland wrote an opinion in which he made numerous references to the movie, including a statement that the lead character “taught a master class in cross-examination.”

Name the movie.

MY COUSIN VINNY.

The Sac-O-Suds and Jasper County Historic Courthouse are in Monticello, Georgia.

Five for Friday #260

Welcome to Friday and the 260th #fiveforfriday legal ethics quiz!

I suppose I could concoct an intro that involves 260 or 8/26.  Alas, that would require effort, an ingredient not exactly coursing through my veins this morning.  I’m posting from the shores of Lake Dunmore, enjoying coffee and the late stages of the sunrise.  Putting too much effort into an intro seems inconsistent with the vibe, especially a mere 48 hours removed from my post Don’t Stresslax.

So, instead, I’ll use this space to wish fare winds and a following sea to The First Brother. Tonight is his last in Vermont, as tomorrow he officially sets out for Savannah, where adventure and temperate winters await. He closed on his Vermont place Monday and has spent the week here at Dunmore, resting before pulling his camper south.  While I will miss him, I’m happy for him and look forward to posting January and February quizzes from the new abode.

As I blogged the prior paragraph, a bit of effort entered by body. 

According to my research, it’s 1084.6 miles from Burlington to Savannah.  The First Brother’s condo was slightly south of downtown, so let’s call his upcoming trek 1084 miles.

260 + 826 = 1084.

To the First Brother!

Onto the quiz!

Rules

  • None.  Open book, open search engine, text-a-friend.
  • Exception:  Question 5.  We try to play that one honest.
  • Unless stated otherwise, the Vermont Rules of Professional Conduct apply
  • Team entries welcome, creative team names even more welcome.
  • E-mail answers to michael.kennedy@vermont.gov
  • I’ll post the answers & Honor Roll on Monday
  • Please consider sharing the quiz with friends & colleagues
  • Share on social media.  Hashtag it – #fiveforfriday

Question 1

Of the 7Cs of Legal Ethics, which specifically mentions “information related to the representation” in the rule that governs that C?

Question 2

Yesterday I blogged about an order in which a New York trial judge sanctioned lawyers for uncivil and obstructive conduct during a deposition. 

Let’s imagine a similar incident involving a deposition that’s taken in a Vermont matter.  One of Vermont’s Rules of Professional Conduct makes it a violation for a lawyer to “engage in undignified or discourteous conduct which is degrading or disruptive to a tribunal.” 

Does the rule apply at a deposition?

  • A.           No.  A comment to the rule specifically leaves control of depositions to the trial courts.
  • B.           No, but a comment to the rule cautions lawyers against conduct that would be prohibited in court.
  • C.           Yes.

Question 3

Fill in the blank.  The same word goes in each blank.  What is it?

There’s a rule that sets out a lawyer’s duties when dealing with an __________ person.  The duties include not stating or implying that the lawyer is “disinterested,” and correcting any misunderstanding that the lawyer knows or reasonably should know that the __________ person has about the lawyer’s role.  A comment to the rule states that the “rule does not prohibit a lawyer from negotiating terms of a transaction or settling a dispute with the __________ person.”

Question 4

Lawyer called me with an inquiry.  I listened, then responded that “a comment to the rule, states that ‘matters are substantially related if they involve the same transaction or legal dispute or if there otherwise is a substantial risk that confidential factual information as would normally have been obtained in the prior representation would materially advance the client’s position in the new matter.’”

Lawyer didn’t contact me to discuss confidentiality.  Rather, given my response, Lawyer contacted me because Lawyer was concerned about, what?

Question 5

When the First Brother arrives in Savannah, he’ll be just over 200 miles southeast of Monticello, GA.  A movie that the American Bar Association has ranked as one of the Top 3 of all-time was filmed in Monticello. 

While most fans associate the movie with a neighboring state and its mud, in fact, the convenience store and courthouse that feature so prominently in the film are in Georgia.  In 2019, then federal judge Merrick Garland wrote an opinion in which he made numerous references to the movie, including a statement that the lead character “taught a master class in cross-examination.”

Name the movie.

High School Basketball and an Order Imposing Sanctions for Incivility

My high school basketball coach expressed displeasure in various ways.  There was one method that we feared the most. He didn’t use it often, but when he did, it was often the last time he had to use it with the offending player.  Here’s how it worked.

Imagine that I did something egregious at practice.  “Egregious” in the behavioral sense, not because I missed yet another shot or made a typically errant pass.  Coach would make me sit on the stage while my teammates ran sprints because of my egregious behavior.  As they ran, Coach would bring me water and go overboard to make sure I was comfortable. 

Most players in my predicament desperately pled to be allowed to run in their teammates’ stead.  Or, at the very least, begged to join them in serving the punishment.  Nope.  Coach insisted on me resting while my teammates paid the price of my conduct.

Being made an example of worked. I don’t remember a single player having it happen more than once.

Yesterday I read an order issued by a New York trial court in response to a motion for sanctions.  It reminded me of Coach’s tactic. The order is here.[i] Here’s my summary.

Following a deposition in a civil suit, counsel for the defense moved for sanctions against plaintiff’s counsel and an attorney who represented the witness.  According to the court,

  • “The deposition transcript of 175 pages speaks for itself and need not be repeated. Suffice it to say that [Attorney 1], counsel to the witness, interjected 187 times with improper speaking objections and/or colloquy, while [Attorney 2], counsel for plaintiff, interjected 114 times with improper speaking objections and/or colloquy. Counsel instructed the witness not to answer 30 questions without any lawful basis.” (internal citation omitted).

The court noted:

  • “Improper deposition behavior not only thwarts the deposition but tarnishes the profession. Offensive and abusive language by attorneys in the guise of zealous advocacy is plainly improper, unprofessional, and unacceptable.”

In the end, the court sanctioned the lawyers. It ordered them to conduct themselves in a civil manner going forward, pay attorney’s fees associated with the deposition and the motion for sanctions, and make monetary payments to New York’s Client Security Fund. 

In addition, and most pertinent to this post, the court ordered the attorneys to attend a CLE on civility within 30 days and to attest to the court that they’d attended and read the “standards of civility.”  The court included this footnote:

  • “Counsel are referred to the NYS Bar Association which sponsors a regular CLE on civility taught by Vince Syracuse, Esq. The transcript in this matter, with appropriate redactions, will be shared with Mr. Syracuse for use in his seminar as an example of uncivil sanctionable behavior.”

Given the court’s language, it’s possible that the CLE at which the transcript of their deposition will be used “as an example of uncivil sanctionable behavior” is not the same CLE that they are required to attend. Still, on the chance that it might be the same CLE, it reminded me of Coach. 

In basketball, nobody wanted to be that player that Coach sent to the stage while the others ran.

Similarly, in law, nobody wants to be that lawyer who I’m using as an example at my next CLE. But who am I to disregard a court order?

As always, let’s be careful out there.

Related Posts


[i] I can’t remember how or where I came across it. 

Wellness Wednesday: Don’t Stresslax

It’s Wednesday, which means it’s time to discuss wellness.  Today’s topic: tips on recognizing and responding to anxiety.

I’ll cut straight to the chase: I recommend The Legal Burnout Solution: How to Identify and Manage Attorney AnxietyIt’s by Cynthia Sharp and Rebecca Howlett and appears in the latest report from the ABA’s Solo, Small Firm and General Practice Division.

I’ve mentioned Cynthia before.  I first encountered her through her work with The Sharper Lawyer. Later, I heard nothing but rave reviews for a presentation Cynthia did for the Bennington County Bar Association. Finally, I was honored that Cynthia referenced me in a post she did for the ABA Journal on how best to respond to negative online reviews.

A few years ago, Cynthia and Becky Howlett started The Legal Burnout Solution.  They’re doing good and important work.  Their piece in the GPSolo report shares great strategies on identifying and managing stress.  While I urge people to read the entire article, I’m going to highlight a paragraph that resonated with me.

I’ve often used this space to remind legal professionals to make time for interests outside the law. When Jennifer Emens-Butler was with the Vermont Bar Association, she did the same via her Pursuits of Happiness column in the VBA Journal. Well, now we can add Cynthia and Becky to the chorus — and we can introduce a new word to our lexicon!  Here’s one of their tips to manage anxiety:

  • “Have fun! On average, children laugh 300 times a day, whereas an adult generally laughs only 17 times per day. Often as attorneys, we over-prioritize our work and under-prioritize play, even to the point of ‘stresslaxing’ where we worry about what we ‘should be’ doing when we are trying to have fun. Consciously set aside time to do activities that bring you fulfillment and joy and make you laugh! Channel your inner child and do the things that brought you joy when you were younger—have a water balloon fight, go to an amusement park, play in the mud. Whatever the activity may be, give yourself permission to relax and play and just be in the moment. Laughter is medicine!”

They are so right! And I LOVE the term “stresslaxing.”

I’m terrible at practicing what I preach.  At countless CLEs and in numerous blog posts, I’ve urged legal professionals to consider not just time away from work, but time that they’re fully away from work.  For example, setting and honoring boundaries, or, making sure that vacation includes a vacation from devices.  Alas, not only do I rarely take time off, when I do, I reflexively, or perhaps compulsively, respond to work matters that, in a vacuum, I know can wait until I’m back. 

Why?  Because I constantly worry that I should be available and responding.  That’s stresslaxing. It’s not good and I know I’m not alone.

Instead, all of us should heed Cynthia and Becky’s advice:

Don’t stresslax! 

When making time for something outside the law, fully commit to enjoying it!  It is perfectly okay to do so and it is exactly what you are supposed to be doing when you’re there. Also, for you supervisors, strive to ensure that your employees know that it’s not only okay to be fully away, it’s healthy and it’s expected.

Previous Wellness Wednesday Posts

Monday Morning Honors #259

Happy Monday!  Only one more before Labor Day.  Make sure to enjoy the last few weeks of the unofficial end of summer!

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

Many thanks to all who informed me that it’s perfectly okay, and perhaps desirable, to clip the flowers growing on my basil. 

Honor Roll

  • Alberto Bernabe, Professor, UIC School of Law
  • Martha Bonneau, Blogger’s Aunt
  • Beth DeBernardi, Administrative Law Judge, Vermont Department of Labor
  • Robert Grundstein
  • Glenn Jarrett, Jarrett/Hoyt
  • Keith Kasper, McCormick, Fitzpatrick, Kasper and Burchard
  • Jeanne Kennedy, JB Kennedy Associates, Mother (of the) Blogger
  • Mark Kennedy, Retired, Father of the Blogger
  • Patrick Kennedy, Amazon Web Services, First Brother
  • John T. Leddy, McNeil, Leddy, Sheehan
  • Jonathan Teller-Elsberg, Sheehey Furlong & Behm
  • Jason Warfield, J.D.

Answers

Question 1

I often discuss the 7 Cs of Legal Ethics. At a recent seminar, I used a quote from George Bernard Shaw to discuss one of the 7 Cs.  In my view, Shaw’s quote accurately captures a dynamic that, in my experience, leads clients to file disciplinary complaints.  Fill in the blank with the correct C.

“The greatest problem in communication is the illusion that it has been accomplished.”

I agree.  Many disciplinary complaints aren’t caused so much by a lack of communication as they are by miscommunication: the lawyer thinking the matter was explained to the client when it wasn’t.

Question 2

While I haven’t blogged much lately, one of my recent posts highlighted a real-life example of how reconciliation helped a Vermont firm to stop trust account fraud.  It was the third such example I’d blogged about this year. 

What’s the rule on reconciling pooled interest-bearing trust accounts?  It must occur:

  • A.           “regularly.”
  • B.           “quarterly.”
  • C.           “in a manner consistent with generally accepted accounting principles.”
  • D.           “timely.”  The rule goes on to state that “timely reconciliation means, at a minimum, monthly reconciliation of such accounts.” 

My posts on reconciliation as a tool to prevent trust account fraud are here, here, and here.

Question 3

Saul represents Client.  Kim represents Opposing Party.  Unbeknownst to Lawyer, Client contacts Attorney to discuss the subject of the representation.  Does the rule allow Kim to discuss the matter with Client?

  • A.           No.  See, V.R.Pr.C. 4.2, Comment [3] (“The rule applies even though the represented person initiates or consents to the communication.)
  • B.           Yes, because a party is always free to contact opposing counsel.
  • C.           Yes.  The comments make clear that, in this situation, Client has consented to the communication. 
  • D.           Wait.  Kim & Saul are still licensed to practice.

Question 4

Lawyer called me with an inquiry.  I listened, then replied.  “You’re definitely out.  Whether your conflict is imputed to all depends on whether it presents a significant risk of materially limiting the representation of the client by the other lawyers in your firm.”

Given my response, Lawyer’s conflict involved:

  • A.           A personal interest.   The question refers to Vermont’s rule on imputed conflicts of interest.  My response, and answer A, reflect the standard set out in V.R.Pr.C. 1.10(a).  By contrast, situations B and C are always imputed.
  • B.           A former client.
  • C.           A current client.
  • D.           Lawyer’s paralegal.

Question 5

Questions 3 and 4 don’t do it justice.  So, while this one might only interest me, I’d be disappointed in myself if I didn’t use this week’s Question 5 to reference Monday’s series finale of my favorite “law” show of all-time.

Here is a license plate that hangs in my garage.

I’d love to add signs from “Palm Coast Sprinklers,” “Ice Station Zebra Associates,” or this one:

In real-life, audiences first saw the license plate on a different show.  However, on the two shows’ fictional timeline, the plate first appeared in the show that ended this week — on a car driven by the eponymous lawyer of questionable ethics.  While easy to like the lawyer — and the show’s other lawyers — it’s tough to believe that many of them still have their law licenses.

Name the show whose final episode aired earlier this week.

BETTER CALL SAUL

Bonus: in the same show, another license plate featured prominently in several episodes. It was on a Jaguar owned by a lawyer mentioned in Question 4. What was the license plate?

Howard Hamlin’s Jaguar bore the plate NAMAST3

Five for Friday #259

Welcome to Friday and the 259th legal ethics quiz.

I’ve struggled to find the motivation to blog over the past few months.  Today hasn’t been much different.  However, this morning, I managed to create this video, which will serve as this week’s official intro.  I’m finally getting around to posting the blog that goes with it.  In the video, I discuss why I’m not in the garage, my new hobby, and lucky numbers.

Yes, lucky numbers.

When it comes to numbers, I consider many to be lucky and even more to be unlucky.  As I mention in the video, I don’t know why I’m so much more than just a little stitious about numbers.  Well, it turns out, science itself agrees that some numbers are, in fact, lucky!

The best part?

One of the numbers officially recognized as “lucky” by science & mathematicians?

259!!!

Onto the quiz!

the-quiz

Rules

  •  Open book, open search engine, text-a-friend.
  • Exception:  Question 5.  We try to play that one honest.
  • Unless stated otherwise, the Vermont Rules of Professional Conduct apply
  • Team entries welcome, creative team names even more welcome.
  • E-mail answers to michael.kennedy@vermont.gov
  • I’ll post the answers & Honor Roll on Monday
  • Please consider sharing the quiz with friends & colleagues
  • Share on social media.  Hashtag it – #fiveforfriday

Question 1

 I often discuss the 7 Cs of Legal Ethics. At a recent seminar, I used a quote from George Bernard Shaw to discuss one of the 7 Cs.  In my view, Shaw’s quote accurately captures a dynamic that, in my experience, leads clients to file disciplinary complaints.  Fill in the blank with the correct C.

“The greatest problem in ____________ is the illusion that it has been accomplished.”

Question 2

While I haven’t blogged much lately, one of my recent posts highlighted a real-life example of how reconciliation helped a Vermont firm to stop trust account fraud.  It was the third such example I’d blogged about this year.

What’s the rule on reconciling pooled interest-bearing trust accounts?  It must occur:

  • A.  “regularly.”
  • B.  “quarterly.”
  • C.  “in a manner consistent with generally accepted accounting principles.”
  • D.  “timely.”  The rule goes on to state that “timely reconciliation means, at a minimum, monthly reconciliation of such accounts.”

Question 3

 Saul represents Client.  Kim represents Opposing Party.  Unbeknownst to Saul, Client contacts Kim to discuss the subject of the representation.  Does the rule allow Kim to discuss the matter with Client?

  • A. No.
  • B.  Yes, because a party is always free to contact opposing counsel.
  • C.  Yes.  The comments make clear that, in this situation, Client has consented to the communication.
  • D. Wait.  Kim & Saul are still licensed to practice?

Question 4

Lawyer works at the firm Hamlin, Hamlin, McGill.  Lawyer called me with an inquiry.  I listened, then replied.  “You’re definitely out.  Whether your conflict is imputed to rest of HHM depends on whether it presents a significant risk of materially limiting the representation of the client by the other lawyers at the firm.”

Given my response, Lawyer’s conflict involved:

  • A.  A personal interest of Lawyer.
  • B.  A former client.
  • C. A current client.
  • D. Lawyer’s paralegal.

Question 5

Questions 3 and 4 don’t do it justice.  So, while this one might only interest me, I’d be disappointed in myself if I didn’t use this week’s Question 5 to reference Monday’s series finale of my favorite “law” show of all-time.

Here is a license plate that hangs in my garage.

IMG_7399

I’d love to add signs from “Palm Coast Sprinklers,” “Ice Station Zebra Associates,” or this one:

Los Pollos Hermanos - Wikipedia

In real-life, audiences first saw the license plate on a different show.  However, on the two shows’ fictional timeline, the plate first appeared in the show that ended this week — on a car driven by the eponymous lawyer of questionable ethics.  While easy to like the lawyer — and the show’s other lawyers — it’s tough to believe that many of them still have their law licenses.

Name the show whose final episode aired earlier this week.

Bonus: in the same show, another license plate featured prominently in several episodes. It was on a Jaguar owned by a lawyer mentioned in Question 4. What was the license plate?

 

 

 

 

 

Cybersecurity, data protection, and a lawyer’s duty of competence.

Given some of the looks and comments that I receive when broaching this topic at CLEs, I’m not certain that it’s an appropriate subject for a day typically reserved for “wellness” posts.  However, as I emerge from a summer blogging hiatus fueled by a disinterest in blogging, I’m less worried about sticking to the traditional schedule than I am in finding something – anything – to write about.  And today, “cybersecurity” not only presents itself as a topic, it does so in a manner that reinforces a notion that lies near and dear to this blog’s heart: competence includes tech competence.

Cybersecurity White Images – Browse 16,974 Stock Photos, Vectors, and Video  | Adobe Stock

To recap, V.R.Pr.C. 1.1 requires a lawyer to provide clients with competent representation. Under the heading “Maintaining Competence,” Comment [8] states:

  • “To maintain the requisite knowledge and skill, a lawyer should keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology, engage in continuing study and education, and comply with all continuing legal education requirements to which the lawyer is subject.” (emphasis added).

The bolded language refers to “tech competence” and was added in 2018.  At the time, and as reported by LawSites, its addition made Vermont the 32nd state to adopt a duty of technology competence. The italicized language has existed since the rule was first promulgated in 1999.  I emphasized it to make clear that continuing legal education is a critical component of maintaining competence.

Which brings me to today’s point.

As reported by LawSites and the ABA Journal, New York recently became the first state to mandate CLE in cybersecurity and data privacy & protection.  From the LawSites post:

  • “Under the new requirement, all attorneys must complete one hour of training every two years in either the ethical obligations surrounding cybersecurity, privacy and data protection, or in the technological and practice-related aspects of protecting data and client communications. Only two other U.S. states mandate technology training as part of a lawyer’s continuing education requirement, Florida and North Carolina. While those states’ CLE requirements allow for training in a range of technology topics, which can include cybersecurity, New York’s is the first to focus its requirement on these topics.”

New York’s new rule is here. The ABA Journal notes that the rule allows lawyers to count up to 3 hours of cybersecurity CLE towards their required 4 hours of ethics CLE.  The ABA post goes on to state:

  • “The New York State Supreme Court’s Appellate Division adopted the cybersecurity CLE requirement based on a recommendation from the New York State Bar Association’s Committee on Technology and the Legal Profession. The NYSBA approved the committee reportin June 2020, according to the bar’s news center.”

This is important. The impetus for the new CLE requirement was not my counterpart in New York.  It was the bar association.  In other words, this isn’t bar counsel crying wolf over competence, tech competence, and the duty to take reasonable precautions to safeguard client data.

Am I saying that a breach is an ethics violation?

NO.

I, AM. NOT.

Again, a lawyer’s duty is to take reasonable precautions to safeguard client data. As I’ve always recognized, the fact that a lawyer or firm is breached or hacked does not necessarily mean that the precautions in place weren’t reasonable. Indeed, in yesteryear, the fact that a client’s paper documents ended up in unauthorized hands didn’t necessarily mean that the lawyer or firm charged with safeguarding those documents failed to take reasonable precautions.  For instance, it likely wouldn’t have been an ethics violation for a firm to fall victim to enterprising criminals who employed thermite to breach a secure cabinet within a secure room within a secure office within a secure building [i]

What I’m saying is this.

A lawyer’s professional obligations include providing clients with competent representation.  CLE is a way to maintain competence.  There’s now a jurisdiction that requires 1 hour of CLE in cybersecurity, privacy, and data protection.  That same jurisdiction allows lawyers to count up to 3 hours of cybersecurity CLE toward their required 4 hours of ethics CLE. In sum, no more eye-rolling at CLEs when I discuss cybersecurity and data protection.  The topic clearly goes to the duty of competence.

As always, let’s be careful out there.

******

[i] I’m obsessed with Better Call Saul.  This week’s series finale has left me thinking of ways to pay homage to the show.  My thermite analogy reminded me not of Better Call Saul, but of its predecessor, Breaking Bad. Specifically, the scenes in the Season 1 finale when Walt uses the innards of an old Etch-A-Sketch to make thermite that he and Jesse use to break into a warehouse to steal methylamine. In fact, the scenes themselves probably subconsciously caused me to use “thermite” in the analogy.

Some basics related to the duties that apply when a lawyer or law firm handles cryptocurrency.

Blogger’s Note:  many thanks to Tom Little for sending me the Ohio advisory opinion that is referenced below and that served as the impetus for this post.

Cryptocurrency

My sense is that not many Vermont lawyers or law firms often handle cryptocurrency.  Doing so is likely to become more common, especially for lawyers and firms whose clients regularly use cryptocurrency to conduct transactions. Thus, it makes sense to highlight the professional responsibility issues most likely to arise.

Caveat: I don’t understand even the basics of cryptocurrency. So, here, I’m not going to try to explain what it is or how it works. Rather, I will limit this post to sharing guidance that others have provided.  Namely, via the following advisory ethics opinions:

The opinions discuss three distinct situations in which a client or third party might ask to transfer cryptocurrency to a lawyer or law firm:

  1. to pay for legal services that have already been rendered.
  2. as an advance against legal services that will be provided in the future.
  3. to hold in escrow pending future use by the client.[i]

For me, the opinions lend themselves to a single overarching takeaway.[ii]

On this blog and at CLEs, I’ve long argued that new things don’t necessarily require us to rewrite the Rules of Professional Conduct. 

  • No matter the mode of communication, the duty is to employ reasonable precautions against unauthorized access to or inadvertent disclosure of client information
  • Whether using a file cabinet, the storage facility on Town Line Road, or the cloud, the duty is to take reasonable precautions to safeguard client property.
  • Yes, social media has provided new ways for lawyers to get caught. It has not, however, created or caused the underlying misconduct that has always been a violation of the rules, but is more readily apparent when done in a public medium.

That’s why a section of the D.C. opinion resonates with me:

“We do not perceive any basis in the Rules of Professional Conduct for treating cryptocurrency as a uniquely unethical form of payment. Cryptocurrency is, ultimately, simply a relatively new means of transferring economic value, and the Rules are flexible enough to provide for the protection of clients’ interests and property without rejecting advances in technologies.”

In other words, just because something is new doesn’t mean it’s unethical.

Rather, take the “tech” out of it and look to fundamental principles that have long been part of the foundation upon which the Rules were constructed:

  • legal fees must not be unreasonable,
  • client property must be safeguarded,
  • risks associated with the representation must be explained to the client,
  • no matter who pays, a client’s confidences must be protected, and a lawyer’s independent judgment must not be compromised, and,
  • business transactions with a client must be transparent and fair.[iii]

With these principles in mind, I should stop.  If I don’t, my second post in 2 months would go on so long that readers would wish I’d taken a permanent vacation from blogging.

Alas, I’d be remiss not to mention the following points, each of which is made in both the Nebraska and D.C. opinions.

  • Cryptocurrency is not fiat currency. It is property and must be treated as such. 
  • Before a lawyer or firm agrees to accept cryptocurrency as an advance fee, the lawyer or firm better know how to hold it safely.
  • V.R.Pr.C. 1.5 prohibits unreasonable fees. Comment [4] states that while a lawyer may accept property as payment of a fee, “a fee paid in property instead of money may be subject to the requirements of Rule 1.8(a),” the rule that governs business transactions with a client. 
  • Indeed, the D.C. opinion concludes that Rule 1.8(a), which governs business transactions with a client, applies when (a) a client transfers cryptocurrency against which the lawyer will bill for legal services in the future; and (b) a client and lawyer agree to an ongoing relationship in which the lawyer will provide legal services in exchange for X amount of cryptocurrency per month.

Now I’ll stop.  For real.  For more, check out the opinions or give me a call.

As always, let’s be careful out there.

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[i] The Nebraska and D.C. opinions focus on the first two, while the Ohio opinion addresses the third. 

[ii] My takeaway is not a substitute for reading the opinions themselves and may not be the same takeaway made by Disciplinary Counsel’s, a PRB hearing panel, or the Vermont Supreme Court.

[iii] In order, Rule 1.5, Rule 1.15, Rule 1.4, 1.6, and Rule 1.8.