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Monday Morning Honors #293

Michael Leave a comment

Happy Monday!  Go Cats Go! No Sleep Till Brooklyn!

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

Honor Roll

  • Matthew Anderson, Pratt Vreeland Kennelly Martin & White
  • Penny Benelli, Dakin & Benelli
  • Alberto Bernabe, Professor, UIC School of Law
  • Beth DeBernardi, Administrative Law Judge, Vermont Dept. of Labor
  • Andy Delaney, Martin Delaney & Ricci
  • Benjamin L. Gould, Paul Frank + Collins
  • Margo Howland, Howland Law Offices
  • Glenn A. Jarrett, Jarrett/Hoyt
  • Keith Kasper, McCormick Fitzpatrick Kasper & Burchard
  • Douglas Keehn, Assistant Attorney General, Medicaid Fraud & Residential Abuse Unit
  • Mark H. Kolter, Darby Kolter & Roberts
  • John T. Leddy, McNeil Leddy & Sheahan
  • Jordana Levine, Marsicovetere & Levine
  • Pam Loginsky, Pierce County (WA) Prosecutor’s Office
  • Lon T. McClintock, McClintock Law Office
  • Jack McCullough, Project Director, Mental Health Law Project, Vermont Legal Aid
  • Jeffrey Messina, Flynn Messina
  • Hal Miller, Esq.
  • Team MOB-kingbird
  • Herb Ogden, Esq.
  • Patrick Olmstead, Patrick Olmstead Law
  • Keith Roberts, Darby Kolter & Roberts
  • Joe Strain, Marsicovetere & Levine
  • Jonathan Teller-Elsberg, Staff Attorney, New Hampshire Legal Assistance
  • Jason Warfield, Jason Warfield Family Law & Mediation
  • Thomas Wilkinson, Jr., Cozen O’Connor

ANSWERS

Question 1

A lawyer called me with an inquiry. I listened, then replied: “the rule states that your first duty is to try to maintain a normal attorney-client relationship with the client.”

Give my response, which is most likely?

  • A.  The lawyer’s client filed a disciplinary complaint against the lawyer.
  • B.  The lawyer learned that the client provided false evidence to the court.
  • C.  The lawyer’s client asked the lawyer to do something that would violate the Rules of Professional Conduct.
  • D.  The lawyer believes that the client’s capacity to make adequately considered decisions in connection with the representation is diminished.  See, V.R.Pr.C. 1.14(a).

Question 2

There’s a rule that prohibits a lawyer from having a sexual relationship with a client. Which of the following is/are an exception(s) to the rule?

  • A.  A consensual sexual relationship existed before the attorney-client relationship was formed.  See, V.R.Pr.C. 1.8(j).
  • B.  The client gives informed consent, in writing, to continuing both relationships, thereby waiving the potential conflict.
  • C.  A & B.
  • D.  Neither A nor B.

Question 3

Which situation does the applicable rule treat differently than the others?

  • A. The representation has been rendered unreasonably difficult by the client.
  • B. The representation has resulted in an unreasonable financial burden on the lawyer.
  • C. Continued representation by the lawyer will result in a violation of the Rules of Professional Conduct.
  • D. The client has substantially failed to fulfill an obligation to the lawyer and has been given reasonable warning of the consequences of the failure to fulfill the obligation.

The scenario in C requires a lawyer to withdraw.  Scenarios A, B, and D permit, but do not require withdrawal. See, V.R.Pr.C. 1.16.

Question 4

Prospective Client (PC) contacted Lawyer.  PC was seeking representation in a matter in which PC’s interests are materially adverse to the interests of one of Lawyer’s former clients.  The new matter is substantially related to the matter in which Lawyer represented Former Client (FC).  However, Lawyer does not remember anything about the representation of FC and no longer has access to the file.

Which is most accurate?

  • A.  Because the matters are substantially related to each other, Lawyer is presumed to have received confidential information from Former Client.
  • B.  Because the matters are substantially related to each other, Former Client will not be required to disclose confidences in order to protect them.
  • C.  A & B. See this blog post & video.
  • D.  Whether Lawyer can represent Prospective Client necessarily turns on how long ago the representation of Former Client ended.

Question 5

As history tells it, Cicero was one of the great Roman orators.  He was also a capable & competent lawyer. 

Long ago, and at exactly this time of year, Cicero used all his skills to mediate a resolution between two groups: people who had conspired to commit murder, and people who were supporters of the famous victim.

Who was the victim?

Bonus: As history also tells it, before the crime took place, what warning did the victim receive from a “soothsayer?”

Julius Caesar & Beware the Ides of March

Five for Friday #292

Michael 2 Comments

Welcome to the 292nd Five for Friday legal ethics quiz!

So, I had a huge victory this week.  Well, huge to me anyways. It involved Jeopardy, my mom, and my late, great Uncle Ron.

I’ve previously introduced you to my mom and her father. Besides my mom and her four sisters, Nanny & Papa had one son, Ronald Edward Bonneau – aka “Uncle Ron.”

Uncle Ron spent his adult life as a Catholic priest in the Redemptorist Order.  In 1972, he was assigned to a parish in Paraguay, the country where he spent the next 24 years as a missionary. Returning to the USA in 1996, Uncle Ron spent most of the rest of his life working in (often Spanish speaking) parishes in New York City, Toronto, and Annapolis. You can read more about him in his obituary.

The First Brother and I didn’t view Uncle Ron as a priest as much as we did as our quirky, fun-loving uncle. My brother actually lived with Uncle Ron for 10 months.  That’s right, Patrick spent almost a year living at the parish house at Most Holy Redeemer, a church in Alphabet City in the East Village.

I never lived with Uncle Ron. However, whenever he visited Vermont, he stayed with me. Even my mom and her sisters will admit that, sometimes when you’re visiting your sisters, things go better when you stay with your nephew. I proudly served as his getaway on his getaways, and was humbled when he started referring to my condo as his personal “B&B” – Bed and Bourbon.

Now, three things.

Uncle Ron was loud, he loved to watch tv, and he was loud while he watched tv. Upon returning from a day of activities with his sisters, he’d pour himself a bourbon, commandeer the remote, and move his favorite rocking chair directly in front of my television.  And that’s when the loud would begin.

Uncle Ron loved to talk to (and yell at) the characters on his favorite shows. He was particularly fond of the NCIS and Law & Order franchises. He never hesitated to yell at Jack McCoy, Special Agent Riggs, and everyone else when they were doing something foolish. I’m not exactly into “loud,” preferring the quiet of my normal life. But on Uncle Ron’s stays, I enjoyed the entertainment value. Not only of his conversations with fictional people, but of his channel surfing. 

As you probably know, on any given evening, it’s likely that different episodes of Law & Order (or NCIS) are running on multiple channels/streaming sources at the same time. Not only different episodes, but episodes from different canons. For instance, the original Law & Order might be on X at the same time that Law & Order: SVU is on Y. 

Uncle Ron loved this.  As soon as one hit commercial, he’d switch to another. He switched so often that he frequently got confused, forgetting, for instance, that Riggs wasn’t on NCIS: New Orleans and had no reason to know the details of the New Orleans episode that Uncle Ron had just left. As you might imagine, this only caused him to yell even more, convinced that it was the characters, not him, who were confused.

Anyhow, I digress.  Here’s the point of today’s introduction.

My mom, my brother, and I are big fans of Jeopardy. Last summer, while watching together at my mom’s, I learned that Patrick used to watch with Uncle Ron when they lived together in NYC. He told me that as soon as the Final Jeopardy category was revealed, but before the clue was shown, Uncle Ron would yell out a wild guess. I decided that this was a fantastic idea and something worth carrying on as a sort of family tradition. So, ever since, that’s what I do: I yell my guess the moment the FJ category is revealed.

Actually, when I’m watching alone, I don’t yell. I save the yelling for when I’m watching with mom.  Why? Because I know that while she dearly loved her brother and dearly loves me, she doesn’t necessarily find our shenanigans amusing. So, I yell. When she frowns, I remind her that Uncle Ron is watching and, in a sense, controls whether she’ll pass the pearly gates.

Which (finally) gets me to the victory I scored this week.

Since deciding to emulate Uncle Ron last summer, my wild (and loud) guess based only on the category has not once been correct.  Until a few days ago when Ken revealed this FJ category:

As fate had it, I was watching with my mom. I immediately yelled “HUEY LONG!!!”  Even my mom had to smile when, after fast-forwarding thru the commercial break, we saw this clue:

Victory indeed!  And here’s to Uncle Ron!

Onto the quiz!

Rules

  • None.  Open book, open search engine, text-a-friend.
  • Exception:  Question 5.  We try to play that one honestly.
  • Unless stated otherwise, the Vermont Rules of Professional Conduct apply.
  • Please do not post answers as a “comment” to this post.
  • E-mail answers to michael.kennedy@vermont.gov
  • Team entries welcome, creative team names even more welcome.
  • 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

Here are some words & phrases that I used when responding to an ethics inquiry:

  • Concurrent
  • Significant risk
  • Materially limited by the lawyer’s responsibilities

Which of the 7 Cs of Legal Ethics was the subject of the inquiry?

Question 2

By rule, how long after the termination of a representation must a lawyer maintain complete records of funds & property held in connection with the representation?

  • A.  3 years.
  • B.  6 years.
  • C.  7 years.
  • D.  Trick question. The rule is silent on this issue.

Question 3

A lawyer has a duty to reasonably consult with the client about the means by which the client’s objectives are to be accomplished.

  • A.   False.  The lawyer controls the means and is under no duty to consult with the client about the means by which the client’s objectives will be pursued.
  • B.   False.   The lawyer must abide by a client’s decisions with respect to the means by which the client’s objectives are pursued.
  • C.   True.

Question 4

Over the years, I’ve used each of these phrases when responding to inquiries. Which is in a different rule than the others?

  • A.  don’t state or imply that you’re disinterested.
  • B.  if the person is seeking a second opinion from you, you don’t need the consent of the person’s current lawyer to communicate with the person.
  • C.  if the person misunderstands your role, correct the misunderstanding.
  • D.  if the person’s interests are likely to conflict with your client’s, don’t give the person any legal advice other than the advice to secure counsel.

Question 5

Speaking of uncles and nephews.

William “WW” Watkins Vaughan was a lawyer in Pawhuska, Oklahoma.  In June of 1923, Vaughan met with a prospective client named George Bigheart.  At the time, Bigheart was in a hospital in Oklahoma City.  Doctors suspected he had been poisoned.  Bigheart told Vaughan that he had information that could prove that two men had committed/arranged numerous brutal murders in another part of the state. 

That night, Vaughan boarded a train back to Oklahoma City. He never arrived. The next morning, a porter who went to wake him, found his berth empty and unused.  Later, Vaughan was found dead on the tracks just a few miles outside Pawhuska.  Bigheart died in the hospital on the same day.

The two men who Bigheart suspected of murder likely poisoned him.  One was later convicted of murder after the other, his nephew, pleaded guilty to murder and agreed to testify against his uncle.  A lawyer who worked for the uncle was sent to prison for 1 year for bribing a witness to change her testimony.

A movie about the brutal crimes committed by the uncle and nephew is currently streaming on Apple TV and is available to buy or rent on Amazon Prime.

Name the movie, which is based on a book.

Naked lawyer rushes stage at Phish concert, kicks off series of events that result in another lawyer being sanctioned.

Michael Leave a comment

Have you ever gone to a concert and ended up naked on the stage?

Have you ever been sanctioned for writing a demand letter for a client who claimed to have been injured by a naked lawyer who rushed the stage during a concert?

Well then do I have the blog post for you!

But first . . . .

As regular readers know, “civility” is one of my 7 Cs of Legal Ethics. I’ve long used this blog to raise concerns about incivility within the legal profession. During his tenure as President of the Vermont Bar Association, Andrew Manitsky joined me, making civility the theme of his presidency.  Our presentations on the topic often included asking “who should respond to extreme incivility and what tool do they have to do so?” In addition, we regularly alerted the Vermont bar that, around the country, more and more courts and disciplinary bodies are responding to incivility by invoking the disciplinary rule that prohibits lawyers from using means that have no substantial purpose other than to embarrass or burden a third person.

As of last week, we can add another invocation to the list.  It involves a Colorado lawyer who was sanctioned as a result of a demand letter she sent on behalf of a client to another lawyer who, while naked, rushed the stage at a Phish concert, allegedly injuring the client along the way.

If you hadn’t already learned of the story, yes, you read the last sentence correctly.

As reported by the ABA Journal, the lawyer who wrote the letter entered into this Stipulation  for Discipline with Colorado’s Regulation Counsel.  According to the stipulation, the sanctioned lawyer sent a demand letter on behalf of a client who claimed to have been injured at a Phish concert.  Per the stipulation,

  • “The person alleged to have caused injury to J.R. was V.D., who is an attorney. J.R. alleged that V.D. got naked during the concert and attempted to rush the stage, physically shoving crowd members (including J.R.) as he did so.”

In the demand letter, the sanctioned lawyer:

  • “used language that was demeaning towards [the naked lawyer] and unprofessional in nature. For example. [the sanctioned lawyer] referred to [the naked lawyer] as a ‘violent psychopath’; ‘obnoxious’; ‘a violent asshole’; ‘stupid’ (multiple times); ‘a shameless, ridiculous boasting shit’; ‘a terrible fucking attorney’; a “disgrace to the Colorado Bar, the Phish community, and [his] family; and ‘an g – 2 idiot.’”

The letter demanded $50,000.  It stated that if the naked lawyer paid, J.R. would not sue the naked lawyer, seek to have the naked lawyer banned from Phish concerts, notify the media, or, notify the naked lawyer’s employer. The letter added that if the naked lawyer did not pay, J.R. would sue, report the naked lawyer to law enforcement, and release a video of the stage-rushing incident to the media.

The parties stipulated that the letter violated Rules 4.4(a) and 4.5(a) of the Colorado Rules of Professional Conduct. The former prohibits lawyers from “using means that have no substantial purpose other than to embarrass, delay , or burden a third person.”  The latter prohibits, among other things, threatening to present criminal charges to gain an advantage in a civil matter.[1]  An announcement that the Presiding Disciplinary Judge accepted the stipulation and publicly censured the lawyer is here. 

I don’t have much to add.

But when has that ever stopped me?

Besides involving Phish, the story has another Vermont connection: according to the bio on her firm’s website, the lawyer who wrote the letter graduated from Middlebury College.  Moreover, the story is but the latest to involve the lawyer. 

Last March, she was named USA Today’s Women of the Year Honoree for Colorado.  The honor resulted, in part, from the lawyer’s representation of a client in a civil rights case against the Loveland (CO) Police Department. Then, in December, a Colorado television station reported that the lawyer’s work in the Loveland case and other civil rights cases “appears to be paying off.”  The report featured this plaque that adorns the office building that the lawyer owns:

Finally, the coverage of the disciplinary sanction has focused almost exclusively on the sanctioned lawyer. I understand why.

However, perhaps influenced by vague recollections of my my friends’ younger days, I found myself thinking about the lawyer who took off his clothes and rushed the stage during the Phish concert.

Well folks, the interwebs are a marvelous thing.

From this Reddit thread, I learned that, on the day after the concert, someone posting as Vinsanity46 claimed to be the naked lawyer. The person used Phish Net to attempt to explain & to apologize for their conduct.  Here’s the post:

  • “So I was the naked guy that tried to get on stage last night. My sincerest apologies to anyone I may have bumped, knocked, or generally rustled in my attempt to rage against the dying of the light.

    For me, that was the type of show you can’t exactly imagine until it happens, and then it breaks you down to the point of needing to be naked and get on stage, but I digress.

    As my friend Jeff said at set break, the first set felt like one, long, big explosion. The jams were those moments of improv where you think the band might be losing their touch, slipping into total dissonance but then WHAM. Pure cohesion, masterful sound control, and peaks that you really haven’t heard before.

    The second set is when things really went off the rails for me, but from what I do remember: Disease was astoundingly good and deep. Then to land on Numberline felt like a well earned reprieve from the nonstop onslaught that had taken place this far. “Take my hand” really met me where I was, and began to put me back together…

    Until Carini exploded my mind into one million sparkling bits of love dust through which I had to fight against the dying of the light and find my way to the stage. Unfortunately, I chose to do it by sprinting naked with my eyes closed through the crowd without a care for others. I caught the encore from the medical tent, very grateful I was slowing descending back to planet earth.

    All in all, my deepest apologies to anyone who had to deal with my nonsense last night, but this show is why we do what we do. And I’ll be taking it easy this evening . . .hoping for a Sanity opener…

    I love this band, I love you all, and I’m grateful for what we have.”

As always, and whether at a concert or writing letters on behalf of clients, let’s be careful out there.

[1] Vermont’s Rule 4.4(a) is identical to Colorado’s Our version of Rule 4.5 differs from the Rocky Mountain state’s but still prohibits threatening to present criminal charges to gain an advantage in civil case.

A lawyer’s duties when using artificial intelligence.

Michael

As we approach 2024, I’ll address one of the “hot topics” of 2023: legal ethics and the use of Artificial Intelligence (AI).

I’ve been straightforward on the issue.

Rule 1.1 requires a lawyer to provide competent representation. Comment [8], captioned “Maintaining Competence,” states that “a lawyer should keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology.”  AI is relevant to the practice of law.  Ergo, a lawyer should be aware of the risks & benefits associated with its use.

This year, several incidents highlighted one of the risks: legal memos created by generative AI that include citations to cases that do not exist in real life.[1] The most notable example involved the Avianca matter that I blogged about here.[2] 

In my opinion, the lesson to be drawn from the “hallucination” examples is NOT that a lawyer violates the rules by using generative AI to draft memos or motions. Rather, it’s that a lawyer who does so remains responsible for the work and should check the cites.[3]

Of course, having described it as “straightforward” above, I recognize that my guidance verges towards the simplistic. The bar deserves more than “your duty is to understand AI’s risks and benefits.” So, today, I’m sharing three resources that I hope will help.[4]

Earlier this year, the California State Bar’s Standing Committee on Professional Responsibility and Conduct published Practical Guidance For The Use Of Generative Artificial Intelligence In The Practice Of Law. It includes “guiding principles” that address various duties owed by lawyers. Without delving into each, they are confidentiality, competence, diligence, communication, fees, meritorious claims & contentions, candor to a tribunal, supervising staff, acting at the direction of a supervising lawyer, complying with court rules, abiding by the law, and avoiding conduct that involves prohibited bias.

More recently, the Florida Bar published for comment Proposed Advisory Opinion 2024-1 — Regarding Lawyers’ Use of Generative Artificial Intelligence. The opinion discusses the duties of confidentiality, oversight, fees & costs, and lawyer advertising.

Finally, in November, JDSupra posted Ethical AI Guideposts for Lawyers Using Generative AI. Besides good tips, it includes an interesting (to me) comment on the judicial response to hallucinations:

“Judge Xavier Rodriguez, a learned U.S. District Judge in the Western District of Texas, eloquently encapsulated the problem of judicial over-regulation in response to generative AI missteps:

‘Some judges (primarily federal) have entered orders requiring attorneys to disclose whether they have used AI tools in any motions or briefs that have been filed. This development first occurred because an attorney in New York submitted a ChatGPT-generated brief to the court without first ensuring its correctness [Mata case referenced above]. The ChatGPT brief contained several hallucinations and generated citations to nonexistent cases. In response, some judges have required the disclosure of any AI that the attorney has used. As noted above, that is very problematic considering how ubiquitous AI tools have become. Likely these judges meant to address whether any generative AI tool had been used in preparing a motion or brief. That said, if any order or directive is given by a court, it should merely state that attorneys are responsible for the accuracy of their filings. Otherwise, judges may inadvertently be requiring lawyers to disclose that they used a Westlaw or Lexis platform, Grammarly for editing, or an AI translation tool.’ 24 The Sedona Conference Journal at 822.”

Over the next few months, I’ll try to do a detailed post about each of the duties implicated by the use of AI. Not today.  Today’s goal was to share resources.

I’ll end with this.

I’ve long urged lawyers not to fear technology.  For almost as long, I’ve argued that it’s usually not technology that gets a lawyer into hot water. It’s something that would get the lawyer into hot water even if done in a non-digital world.  For example, failing to check cites before submitting a memorandum. Yes, the Avianca case resulted in the court sanctioning the lawyers. However, in doing so, the judge specifically noted that “[t]echnological advances are commonplace and there is nothing inherently improper about using a reliable artificial intelligence tool for assistance.”[5]

As always, let’s be careful out there. 

[1] Known as a “hallucination,” this risk is not limited to the legal profession. Rather, at least in its early stages, generative AI sometimes presents as fact something that is not.

[2] See also, Mata v. Avianca, 22-cv-1461, 2023 WL 4114965, (S.D.N.Y. June 22, 2023).

[3] As I’ve stated at seminars, if a lawyer asked an associate or paralegal to prepare a memo and submitted it to the court without checking the work, we wouldn’t be calling to ban the use of associates or paralegals if, in this instance, the associate or paralegal intentionally included fake citations that the lawyer failed to notice. We’d be reminding lawyers that they are responsible for their work.

[4] I’m struck by how much generative AI drove 2023’s discussion of the legal ethics issues associated with AI.  AI isn’t new and isn’t limited to generative AI. Indeed, in 2019, Squire Patton Boggs published Legal Ethics in the Use of Artificial Intelligence.  The posts tips remain relevant today.

[5] Mata v. Avianca, 22-cv-1461, 2023 WL 4114965, at 1 (S.D.N.Y. June 22, 2023).

Five for Friday #289

Michael 5 Comments

Welcome to Friday and the 289th legal ethics quiz!

A few weeks ago, the quiz included a reference to a Burger King jingle from my youth.  Today’s intro harkens back to another 1980s ad campaign.

Oh, and this intro stinks.

Just over a year ago, I posted Finally – misconduct that left even me in disbelief.  The post shared the story of an Ohio lawyer who had been charged with professional misconduct. A few weeks later, I followed up with this post in which I outlined how the lawyer might be charged in Vermont given that we do not have the same rule that he was charged with violating in Ohio.

Today, thanks to an eagle-eyed regular reader who alerted me to the fact, I’m here to report that the Ohio charges have been resolved.  As reported two days ago by Court News Ohio, the Ohio Supreme Court imposed a one-year suspension with six months stayed. 

I know what you’re thinking: “Mike, what’d this lawyer do?” 

As stated in the opening paragraph of the Ohio Supreme Court’s opinion, the lawyer was charged with “throwing a feces-filled Pringles can into the parking lot of a victim-advocacy center involved in a capital-murder case in which Blakeslee was representing the defendant.”

You read that correctly.

At the trial level, the parties advanced competing arguments about the lawyer’s intent. The disciplinary prosecutor contended that the lawyer intentionally targeted the victim-advocacy center. Here’s how the Ohio Supreme Court characterized the lawyer’s position:

  • “During his disciplinary hearing, [the lawyer] testified that he had engaged in similar misconduct on at least ten other occasions that year and that he randomly chose the locations where he deposited the Pringles cans containing his feces. He also specifically denied having any knowledge that the parking lot in question belonged to [victim advocacy center] when he threw the can from his vehicle.”

That’s right.  Charged with intentionally targeting the victim advocacy center, the lawyer’s defense was, essentially, “oh no, it had nothing to do with them. I’ve done this before. Many times.”

I’ll stop there. For more detail, including the fact that at both the trial level and intermediate stage of review, the recommended sanction was a public reprimand – not suspension – check out the full opinion.

Oh – the other jingle?

Let’s just say that the Ohio story doesn’t exactly leave me with the fever for the flavor of new Pringles.

As always, let’s be careful out there.

Onto the quiz!

Rules

  • None.  Open book, open search engine, text-a-friend.
  • Exception:  Question 5.  We try to play that one honestly.
  • Unless stated otherwise, the Vermont Rules of Professional Conduct apply.
  • Please do not post answers as a “comment” to this post.
  • E-mail answers to michael.kennedy@vermont.gov
  • Team entries welcome, creative team names even more welcome.
  • 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

It’s rare for the Rules of Professional Conduct to refer to specific practice areas or types of cases.  However, there’s one rule that both to criminal defense and divorces.  What’s the subject of the rule?

  • A. Conflicts of Interest.
  • B. Communication.
  • C. Candor to the Tribunal.
  • D. Contingent Fees.

Question 2

Sadly, this question is one that I receive between 5-8 times per year.

This morning, Client shared information with Lawyer that caused Lawyer reasonably to believe that Client intends to take their own life.  Lawyer wants to disclose Client’s intent to someone who can intervene.  Under Vermont’s rules, Lawyer:

  • A.  must not disclose Client’s intent.
  • B.  must disclose Client’s intent.
  • C.  may disclose Client’s intent.
  • D.  this situation is not covered by the Vermont Rules of Professional Conduct.

Question 3

Lawyer called me with an inquiry.  I listened, then said: “it depends, did you receive information that could be significantly harmful to that person?”

My words “that person” refer to:

  • An unrepresented person who is adverse to Lawyer’s client and who inadvertently communicated with Lawyer.
  • B.  a represented person who is adverse to Lawyer’s client and who directly communicated with Lawyer without going through counsel.
  • C.  A juror who approached Lawyer as the two were leaving the courthouse at the lunch break during a trial.
  • D.  A person who discussed potential representation with Lawyer but who did not retain Lawyer.

Question 4

Later today, I’m doing a CLE for the VBA’s Bankruptcy Section. Depending on how the seminar goes, I might get to a section where I urge caution when it comes to (1) last minute changes to wire instructions; and (2) an out of state client who only communicates via email and who is seeking representation to assist in collecting a debt allegedly owed by someone in Vermont.

Each is an example of common ____________ that target lawyers.  (Correct answers will not necessarily include the same amount of words that fill in the blank)

Question 5

Again, I’m doing a presentation for the VBA’s Bankruptcy Section later today. So, bankruptcy is the topic for Queston 5.   

I’m feeling generous. One question involves an old-time holiday classic, while the other relates to a much modern pop culture reference to bankruptcy.  Choose your own adventure!

Question 5A – The Classic

Name the holiday movie in which George is so mad that Uncle Billy misplaced $8,000 that he yelled:

  • “Where’s that money, you stupid, silly old fool? Where’s the money?! Do you realize what this means? It means bankruptcy and scandal and prison! That’s what it means. One of us is going to jail! Well, it’s not gonna be me!”

According to a current day bankruptcy expert:

  • “It’s unclear whether George meant bankruptcy for himself or for the Building & Loan.  Even less clear is whether the B&L would have been eligible for bankruptcy protection under the Bankruptcy Act of 1898 (“banking corporations” were ineligible).  It definitely would not be eligible under Section 109 of the Bankruptcy Code (specifically excluding “building and loan associations”) from bankruptcy eligibility.”

Question 5B – More Modern

My favorite pop culture bankruptcy.  It’s from a TV show that aired from 2005-2013.  The following lines are from Season 4’s episode Money. I’ve changed the speakers’ names to their first initials. Your task: name the show.

C:           Listen, I’ve got the answer. You declare bankruptcy, all your problems go away.

M:          How would that help Creed? In Monopoly when you go bankrupt, you lose.

C:           You don’t go by Monopoly man, that game is nuts. Nobody just picks up “get out of jail free” cards, those things cost thousands.

M:          That is a good point.

C:           Bankruptcy, M, is nature’s do-over. It’s a fresh start, it’s a clean slate.

M:          Like the witness protection program.

C:           Exactly.

O:           Not at all.

M:          I’ve always wanted to be in the witness protection program. Fresh start, no debts, no baggage. I’ve already got my name picked out, Lord Rupert Everton. I’m a shipping merchant who raises fancy dogs. That’s the life.

M.          (standing on a chair) I . . . DECLARE . . . BANKRUPTCY!

O:           Hey, I just wanted you to know that you can’t just say the word bankruptcy and expect anything to happen.

M.   I didn’t say it. I declared it.

A conversation about trust accounts.

Michael

When I was drafting the post about the New Jersey lawyer who was suspended for charging “inflated and fake” fees in a scheme remarkably similar to one that she had suggested might work, I started thinking about the basics of trust accounting. This resulted in me having an imaginary conversation with a lawyer or bookkeeper who has lots of questions about trust accounts. What follows is my attempt to turn the conversation into a helpful reminder. The conversation is based on the Rules of Professional Conduct that are in effect as of November 16, 2023.

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Are you holding funds that belong to a client or third person and that are in your possession in connection with a representation?

You answer my question with a question of your own:

Mike, what do you mean “in my possession in connection with a representation?”

Good question.  The phrase is in Rule 1.15(a)(1).  The next paragraph states that “‘in connection with a representation’ means:

  • funds or property of a client or third party that is in the lawyer’s possession as a result of a representation in a lawyer-client relationship or as a result of a fiduciary relationship that arises in the course of a lawyer-client relationship or as a result of a court appointment.”

Paragraph (b) adds that “‘fiduciary relationship’ includes, but is not limited to, agent, attorney-in-fact, conservator, guardian, executor, administrator, personal representative, special administrator, or trustee.”

So, are you holding funds that belong to a client or third person and that are in your possession in connection with a representation?

If the answer is “no,” stop reading.

If the answer is “yes,” then Rule 1.15 applies, and paragraph (a)(1) requires:

  • that the funds be held separate from your own and your firm’s;
  • that complete records of such funds be kept for 6 years following the termination of the representation; and,
  • that the funds must be held in accordance with V.R.Pr.C. 1.15(B).

What does it mean to hold funds “in accordance with V.R.Pr.C. 1.15(B)?”

The rule is here.  Its title is “Pooled Interest-Bearing Trust Accounts.” These accounts are what we more commonly refer to as “IOLTAs” or “client trust accounts.” 

Per the rule, if you are holding funds in connection with a representation and the funds are not reasonably expected to earn net interest or dividends, the funds must be held in a pooled interest-bearing trust account at a financial institution that has been approved by the Professional Responsibility Board.  A list of the financial institutions that have been approved by the Board can be found here.

How do I know if the funds are reasonably expected to earn net interest or dividends?

Rule 1.15(B)(2) defines “net interest or dividends.”  In most instances, a lawyer who holds funds in connection with a representation is holding funds that are not reasonably expected to earn net interest or dividends. 

On the rare occasion that a lawyer holds funds that will earn net interest or dividends for the client or third person, the funds are held in trust, but not in a pooled interest-bearing account that also includes funds that belong to other clients and third persons.  Rather, funds expected to earn net interest or dividends must be deposited into an account for the particular client or third person.

Finally, if you are uncertain whether the funds are reasonably expected to earn net interest or dividends, the rule encourages lawyers to err on the side concluding that they will not, stating:

“No lawyer may be disciplined for placing client funds in the pooled interest-bearing account if the lawyer made a good faith determination that the funds fit the provisions of this rule.”

What happens to the interest generated on these pooled interest-bearing accounts?

By rule, interest generated on a pooled interest-bearing trust account must be remitted to the Vermont Bar Foundation.

Will the bank send the interest directly to the Vermont Bar Foundation or is that my job?

A little bit of both.

When a lawyer or law firm opens a pooled interest-bearing trust account at an approved financial institution, Rule 1.15(B)(b) requires the lawyer or law firm “to direct the financial institution:

(1) to remit interest or dividends, as the case may be, to the Vermont Bar Foundation; and

(2) to transmit with each remittance to the Foundation a statement showing the name of the lawyer or law firm for whom the remittance is sent; and

(3) to transmit to the depositing lawyer or law firm at the same time a report showing the amount paid to the Foundation.”

Okay, I’ve set up a pooled interest-bearing trust account.  What now?

READ RULE 1.15A(a)!  

Funds that are in a lawyer’s possession as a result of an attorney-client relationship must be held in an account that is clearly identified as a “trust” account.

Funds that are in a lawyer’s possession as a result of a fiduciary relationship must be held in an account that is clearly identified as a “fiduciary” account.

Next, and at a bare minimum, your trust accounting system must include the following features:

  • a system showing all receipts and disbursements from the account or accounts with appropriate entries identifying the source of the receipts and the nature of the disbursements;
  •  a record for each client or person for whom property is held, which shall show all receipts and disbursements and carry a running account balance;
  • records documenting timely notice to each client or person of all receipts and disbursements from the account or accounts; and,
  • records documenting timely reconciliation of all accounts.

“Timely reconciliation” means, at a minimum, monthly reconciliation of such accounts.

The rule does not require 3-way reconciliation.  However, I urge you to consider it. The internet is replete with instructions on how to perform a 3-way reconciliation.

Besides these minimum features, is there anything else I should know?

Yes.  Read Rule 1.15(A)(b)! 

In 2022, the rule was amended as part of an effort to increase protection of funds held on behalf of clients and third persons.  The rule states:

  • only a lawyer admitted to practice law in Vermont, or a person under the direct supervision of the lawyer, shall be an authorized signatory on the account or be authorized to make transfers and disbursements from the account;
  • records of deposits shall be sufficiently detailed to identify each item; and,
  • withdrawals and disbursements shall be made only by
    • (i) check payable to a named payee and not to cash; or,
    • (ii) authorized electronic transfer from the pooled interest-bearing trust account.

Remember: no debit cards on trust accounts!

My bank charges fees on the account. Is it okay to keep my own money in the account to cover the fees?

Yes.  Rule 1.15(b) addresses this situation. 

  • “A lawyer may deposit the lawyer’s own funds in an account in which client funds are held for the sole purpose of paying service charges or fees on that account, but only in an amount reasonably necessary for that purpose.”

No guessing!!  Again, the rule permits commingling but only in an amount reasonably necessary to cover charges and fees.

What if my trust account is overdrawn?

Rule 1.15B(d) applies.  In order to appear on the approved list, a financial institution must agree to notify Disciplinary Counsel whenever:

  • A lawyer’s trust account is overdrawn; or,
  • An instrument drawn on a lawyer’s trust account is presented against insufficient funds, regardless of whether the institution chooses to honor the instrument.

What does Disciplinary Counsel do upon being notified of an overdraft?

Opens an investigation.  You will be asked to provide Disciplinary Counsel with an explanation of the overdraft.

Note: overdraft notices are not subject to the typical “screening” process that applies to most complaints.  Years ago, the PRB decided that overdrafts warrant investigation by Disciplinary Counsel. The Board also decided that a lawyer whose trust account is overdrawn will have 5 days to provide Disciplinary Counsel with an explanation of the overdraft. 

Does the Professional Responsibility Program Audit Trust Accounts?

Yes.  See Rule 1.15A.  The rule sets out two types of audit.

The first is described in Rule 1.15A(c) and is called a “compliance review.”  A lawyer can be chosen for a “compliance review” in response to an overdraft notice, as part of the investigation of a complaint, or at random.  Compliance reviews are performed by Certified Public Accounting firms that have contracted with the Professional Responsibility Program. A compliance review focuses on whether the lawyer or law firm has the required accounting system in place.

The second appears in Rule 1.15A(d).  By rule:

  • “The Supreme Court may at any time order an audit of financial records, including pooled interesting-bearing trust accounts, trust accounts, and fiduciary accounts, of a lawyer or law firm and take such other action as it deems necessary to protect the public.”

This is a lot of information about trust accounting systems.  Do you have any other thoughts or tips?

Yes.

  • Be aware of common trust account scams.
  • Understand your duties when it comes to disbursing funds.
  • Understand your duties when it comes to multiple claims to funds you are holding in trust.

I covered this information, and more, in posts & videos that are here.  Or, after my signoff, you’ll find my entire library of trust accounting posts and videos.

As always, let’s be careful out there. And kind to ourselves and others.

Peace.

Posts on the Basics

Videos

Other Blog Posts

Five for Friday #287

Michael 1 Comment

Welcome to Friday and the 287th legal ethics quiz!

It has been nearly two months since the last Five for Friday. All week, I told myself “Self, if you’re going to post a quiz, you better come up with an entertaining introduction after all this time off.”  Alas, it’s apparently not like riding a bike.  The rust leaves me feeling incapable. 

Would a competent bar counsel clear the cobwebs and craft a clever tale for his loyal readers?

Yes.

Am I going to do that?

No.

Instead, I’m going play the cancer card. 

No, seriously, I am. Look:

That’s right. I have an actual cancer card to play! 

It was part of the care package I received from Blondie & LSA, two close friends who were in the basement that long ago day that we watched basketball, lined up by height, and sang of September in March.

In an email, Blondie explained that the card was meant to make me laugh when I wanted to use cancer to get out of something. This morning, I was a bit frustrated that I couldn’t come up with a fun topic or an interesting way to tie this intro to “287.”  That’s when it hit me: the cancer card!!

Consider it played!

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.
  • Please do not post answers as a “comment” to this post.
  • E-mail answers to michael.kennedy@vermont.gov
  • Team entries welcome, creative team names even more welcome.
  • 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

Which of my 7 Cs of Legal Ethics relates to trust accounting?

Hint: the word does not appear in the Rules of Professional Conduct. However, the offense is so significant that the Vermont Supreme Court has suggested that a public reprimand, as opposed to a private admonition, will be the presumptive response.

Question 2

I’ve long urged lawyers to plan for their own unavailability. In a similar vein, I’ve asked law firms to craft disaster plans.  Arguably, the duty to prepare for unavailability & disaster is part of the duty:

  • A.  to keep a client reasonably updated on the status of a matter.
  • B.  to provide a client with conflict-free representation.
  • C.  to charge a reasonable fee.
  • D.  to act with reasonable diligence and promptness while representing a client.

Question 3

Lawyer called me with an inquiry. I listened, then responded: “I don’t know. Are you saying that you’ve concluded that your continued representation of Client will result in a violation of the rules? If so, yes.”

Give my response, it’s most likely that Lawyer called to discuss:

  • A.   the crime-fraud exception to the attorney-client privilege.
  • B.   whether Lawyer must withdraw from representing Client.
  • C.   whether Lawyer must self-report to Disciplinary Counsel
  • D.   Lawyer’s duty of candor to the tribunal.

Question 4

There’s a rule that that prohibits a certain type of communication with judges and jurors.  What’s the two-word phrase used to describe the type of communication that’s off-limits?

Question 5

There’s a pending lawsuit in the Southern District of Florida in which lawyers for a proposed class of plaintiffs allege that a famed restaurant chain duped customers about the size of its burgers and sandwiches. A few weeks ago, lawyers for the chain filed a motion for sanctions, arguing that the plaintiffs’ lawyers made a “baseless and unprecedented complaint that it is somehow unlawful for a restaurant to display a beautiful photograph of menu items.”

So far, the civil action has included:

  • Allegations that the chain uses pictures in advertisements and on its menu that show burgers that “overflow the bun” and deceptively make the burgers appear to be 35% bigger than they actually are;
  • the defendant arguing that its menu boards are “painstakingly constructed by professionals” who take well-lit pictures of menu items and that, “of course, the same sandwiches assembled speedily in a quick-service restaurant, wrapped, and transported, will not look the same;” and,
  • the judge already dismissing some of the plaintiffs’ claims, concluding that the defendant’s television and web ads did not promise a “size” that it failed to deliver.

Having grown up in the 80’s, I’m a huge fan of commercial jingles. Indeed, I still know the tune and every word that follows “hold the pickles, hold the lettuce” and it brought me great joy to belt out the jingle at the top of my lungs as I took a walk this morning.

Name the restaurant chain.

A lawyer’s duty to plan for their own unavailability.

Michael 2 Comments

Many thanks for the outpouring of support.  The healing vibes mean more than I can adequately express. Now, back to our regularly scheduled programming!

Today, I have tips for lawyers in firms of all sizes.

For smalls & solos, plan for emergencies & disasters!

For larger firms, plan for emergencies & disasters!

Sometime people ask “Mike, what’s the worst misconduct you’ve seen?” I’ve certainly seen a lot. However, I tend not to focus as much on the nature of misconduct as its impact on clients, the lawyer, and the lawyer’s family.  Of course, misappropriation is as bad as it gets.  Still, when it comes to the adverse impact on a lawyer’s clients and family, there’s not much as damaging as the fallout from a lawyer’s failure to prepare for their own unavailability.

Simply, what will happen if you’re not around? Not only to your clients, but to your family and loved ones stuck with cleaning up.

Consider a succession plan.[1]  Even something as simple as a list of your clients and instructions on how to access your calendaring system is better than nothing. Ideally, and as recommended here by the American Bar Association, “recommended items for an effective succession plan completed in conformity with applicable rules include, but are not limited to:

  • Written instructions concerning how and where client information is stored, including bank and other account details (e.g., operating and trust account information);
  • Information concerning disposition of closed client files, information about law office equipment leases or other contracts;
  • Information regarding payment of current liabilities;
  • Instructions to gain access to computer and voicemail passwords; and
  • Information detailing how the successor will be compensated.”[2]

Of course, emergencies, tragedies, and calamities aren’t reserved for smalls and solos.  So, a few years ago, I posted Is your firm prepared for a disaster?  I did so in response to the ABA Standing Committee on Ethics and Professional Responsibility release of Formal Opinion 482: Ethical Obligations Related to Disasters.  Here’s what 2018 me wrote:

  • I’d say that the key takeaway from the opinion is this:

Or, as the Committee elaborated:

  • “Lawyers must be prepared to deal with disasters. Foremost among a lawyer’s ethical obligations are those to existing clients, particularly in maintaining communication. Lawyers must also protect documents, funds, and other property the lawyer is holding for clients or third parties. By proper advance preparation and taking advantage of available technology during recovery efforts, lawyers will reduce the risk of violating professional obligations after a disaster.”
  •  

My thinking hasn’t changed.

In conclusion, I doubt the phrase originated with basketball coaches, but it’s one that we use a lot:  failing to plan is planning to fail.  When it comes to planning for their own unavailability, the same can be said for lawyers and law firms.

As always, let’s be careful and kind out there.

[1] Rule 1.3 requires a lawyer to act with reasonable diligence when representing a client.  Comment [5] states that “to prevent neglect of client matters in the event of a sole practitioner’s death or disability, the duty of diligence may require that each sole practitioner prepare a plan, in accordance with applicable rules, that designates another competent lawyer to review client files, notify each client of the lawyer’s death or disability, and determine whether there is a need for immediate protective action.”

[2] The VBA’s disaster planning resources have are on the lower left of this page.  Additional resources are available from the Washington State Bar Association,  South Carolina Bar Association, the State Bar of Nevada, the Knoxville Bar Association, and the Maryland Bar Association. 

Taco Tuesday: Live Mas!

Michael 3 Comments

Blogger’s Note: Edited version. Because the original failed to include the most important part: a link to the petition!

I’ve been waiting for the right Tuesday to post this.  As I drove home from Boston this morning, I decided today’s the day.

As most know, this blog loves those instances in which pop culture intersects with professional responsibility & legal ethics. While the following example might not lie exactly at that intersection, it involves pop culture and the law. Thus, at worst, it’s only a block away.

Earlier this year, Taco Bell petitioned to cancel a registered trademark.  What “mark” might that be?  Well, there’s a hint in the opening paragraph of this post.  I’ll give you a moment to look back.

Ready?

The mark is “Taco Tuesday.”

That’s right.  In 1989, Taco John’s registered the phrase “Taco Tuesday.” Ever since, the company has held the mark in 49 states.  The exception being New Jersey, where the mark is registered to a different company.

The petition for cancelation is here.  It received significant media coverage, including from CNN, The Hill, and Yahoo Finance. 

Without a doubt, the petition is one of the most entertaining pleadings I’ve ever read.  Actually, let me clarify that statement.

I have no reason to believe that the allegations weren’t well-pled. Nor do I have any reason to think that the petition failed to cite controlling authority.  However, it’s not the petition’s legalese that interests and entertains me.

Rather, it’s the petition’s “Preface.”  I urge you to take 30 seconds to read it.  You will not regret it.  My favorite section is paragraph D:

  • “‘Taco Tuesday’ is a common phrase. Nobody should have exclusive rights in a common phrase. Can you imagine if we weren’t allowed to say ‘what’s up’ or ‘brunch’? Chaos.”

As I texted a friend (who is also a lawyer) upon first reading the petition, it would be the high point of my career to have a case in which my entire argument boiled down to “Your honor, if you don’t rule for me?  Chaos.”

I mean, seriously. Who favors chaos? 

There’s another reason that I enjoyed the petition so much.

To me, the preface proves that there remains a space in the profession – however tiny it might be — in which it’s okay to have fun doing what we do. Where we don’t have to take ourselves so seriously all the time. 

Am I aware that that sliver of space, even if infinitesimal, is far too large for the liking of many?

Yes. Sadly, I am. However, as the profession relentlessly continues to exact a devastating toll, I hope more of us are able to find the occasional moment of levity like this one.  That’s wellness.

And competence.  In June, Taco John’s abandoned the mark. Among others, the Los Angeles Times, Food & Wine, and Forbes reported the end of the litigation. (As far as I know, the company that holds the registration in New Jersey is continuing to defend against the petition.)

So, what happened on the way home from Boston that made me conclude that today was the day to (finally) post this story?

Yesterday, I was in Boston to speak at the 2023 Annual Meeting of the Intellectual Property Owners Association. I concluded my seminar with, of course, a quiz question:

  • “A petition to cancel a registered mark made national news this summer.  The mark relates to food and a day of the week.   What’s the mark? And, bonus, who was the petition filed on behalf of?”

Given their practice area, most attendees knew the answer. I asked if anyone in the room had worked on the petition.

I’ve done a lot of seminars.  I don’t recall a moment at any of them that thrilled me as much as yesterday when a lawyer raised their hand and answered “yes.”

Taco Bell’s lawyers (or at least one of them) were at my seminar!

Live Mas!

Which might be the perfect catchphrase to urge legal professionals to, whenever possible, find joy in what they do. It’s still out there.

PS: I apologize for not posting this early enough to impact your dinner choice.