Five for Friday #213

Welcome to #213!

This week’s intro is via video from the Garage Bar.  It’s 6 minutes that not only include using sports memorabilia to explain the principles of imputed disqualification, but also the resumption of my singing career as my self-imposed sanction for the ethics violation I committed in last Friday’s post. To skip the conflicts lesson and get to my performance, go to the 3:34 mark.

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Onto 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 don’t use the “comment” feature to post your answers
  • Please consider sharing the quiz with friends & colleagues
  • Share on social media.  Hashtag it – #fiveforfriday

Question 1

There’s only one thing that the Rules of Professional Conduct require a lawyer to keep for a definite period following the termination of a representation.  What is it?

  • A.   a client’s confidences: 6 years.
  • B.   a copy of the client’s file: 7 years.
  • C.   a copy of the advertisement that led the client to the lawyer: 2 years.
  • D.  Records of any funds held in trust for the client: 6 years.

Question 2

Which word or phrase is associated with a different rule than the others?

  • A.  knows or reasonably should know that the person misunderstands the lawyer’s role.
  • B.  shall correct the misunderstanding.
  • C.  without the consent of the person’s lawyer.
  • D.  not give any advice, other than the advice to seek counsel.

Question 3

This is true: there is a rule that prohibits a lawyer from disbursing against a deposit to the trust account until the deposit has cleared and become “collected funds.”

True or false? In Vermont, there are no exceptions to the rule.

Question 4

Which is most accurate?  The Rules of Professional Conduct impose a duty to  _______:

  • A.  Encrypt email.
  • B.  Encrypt a client’s electronically stored information in transit.
  • C.  Encrypt a client’s electronically stored information  at rest.
  • D.  Act competently to safeguard client information, including by taking reasonable precautions to prevent against the inadvertent disclosure of or unauthorized access to client information.

Question 5

I botched it by not asking this last Friday.  Anyhow, on October 30, a famous actor turned 75.  For five seasons, the actor played one of my favorite ethically challenged lawyers: Arrested Development’s Barry Zuckerkorn.  Of course, Zuckerkorn is not to be confused with the acting coach that the same actor plays in Barry and for which he won the 2018 Emmy for Outstanding Supporting Actor.

Readers of an earlier vintage might know the actor better for his Emmy-winning performances on a 1970’s sitcom. Per his Wiki page, on that show, he played “a greaser who became the breakout character.”

Whose 75th birthday did I miss last Friday?

Low Places: Conflicts arising from personal relationships with opposing counsel.

Blame it all on my roots,

I showed up in boots,

and ruined your black-tie affair.

 ~ Garth Brooks, Friends In Low Places

****************

 The most common inquiry that I receive is one in which a lawyer calls to discuss a potential conflict of interest.  Most often, the potential conflict involves a former client whose interests may be adverse to those of a new client.   Despite our small bar, it’s rare that I receive an inquiry involving a potential conflict arising from a lawyer’s personal relationship with opposing counsel.

So called “personal relationship” conflicts are important to understand.  And, thanks to ABA Formal Opinion 494, there’s now guidance to assist us.  Among others, the ABA Journal, the Professional Responsibility Blog, and Faughnan on Ethics reported the opinion’s release.

Before I get to the opinion, I’ll start with the rule.

In Vermont. Rule 1.7(a)(2) states that a conflict of interest exists whenever:

  • “there is a significant risk that the representation of one or more clients will be limited by the lawyer’s responsibilities to another client, a former client or a third person or by a personal interest of the lawyer.” (emphasis added).

Don’t forget! Unlike conflicts involving current and/or former clients, personal interest conflicts are not automatically imputed to others in the conflicted lawyer’s firm.  They are imputed only if the prohibited lawyer’s personal interest presents “a significant risk of materially limiting the representation of the client by the remaining lawyers in the firm.”  V.R.Pr.C. 1.10(a).

So, what’s a personal interest conflict?  For years, I used an example that might be too simplistic:

  • Client wants to retain Lawyer.
  • Lawyer doesn’t know Opposing Party well, but Opposing Party is the coach of Lawyer’s child’s sports team.
  • Lawyer doesn’t want Child’s relationship with the coach to suffer.
  • So, Lawyer sits out the case, but another attorney in the same firm represents Client.

Another type of personal interest that might materially limit a lawyer’s representation of a client is the lawyer’s personal relationship with opposing counsel.  This is the type of conflict addressed by the recent advisory opinion.  It breaks such personal relationships into three categories: intimate relationships, friendships, and acquaintances.

Intimate Relationships.

Per the opinion, lawyers who are married, engaged to be married, or in an exclusive intimate relationship:

  • “must disclose the relationship to their respective clients and ordinarily must not represent the clients in the matter unless each client gives informed consent, confirmed in writing [and] the lawyers reasonably believe that they will be able to provide competent and diligent representation to each.”

This is consistent with the language in Comment 11 to V.R.Pr.C. 1.7.

Frankly, as those of you who know my status may have surmised, relationships are difficult enough for me. I can’t imagine navigating one in which my significant other represents a client’s adversary.  Alas, knowing me, I’d probably use it as an excuse to end the relationship.  And I’m not talking the attorney-client relationship.

Friendships

 This category is a bit trickier to analyze, especially in such a small state.  Here’s the quick answer:

  • “In sum, opposing lawyers who are friends are not for that reason alone prohibited from representing adverse clients.  The analysis turns on the closeness of the relationship.”  (emphasis in the original).

The opinion lists several types of friendships and indicates whether they are of a nature that would require disclosure and a client’s consent.

Among those for which disclosure and consent is advised are close friendships and friendships between lawyers who:

  • “exchange gifts at holidays and special occasions; regularly socialize together; regularly communicate and coordinate activities because their children are close friends and routinely spend time in each other’s homes; vacation together with their families; share a mentor-protégé relationship developed while colleagues . . . [or] share confidences and intimate details of their lives.”

Friendships that should be disclosed but likely do not require client consent for continued representation include those between lawyers who were classmates or who used to practice together and who stay in touch or occasionally get together.

Acquaintances

The opinion states that “[a]cquaintances are relationships that do not carry the familiarity, affinity or attachment of friendships.”  As such, while disclosing an acquaintanceship “may be advisable to maintain good client relations,” it is not required.  Examples include:

  • serving on boards or committees together;
  • going to the same gym or place of worship; and,
  • bumping into each other around town.

Conclusion

Again, the opinion is here.  Give it a read.  Otherwise, use good judgment.  Remember, even if a personal relationship with opposing counsel might not have a snowball’s chance in heck of materially limiting your representation of the client, it might make sense to disclose the relationship anyway.   I’ve seen situations in which a client who learns of the personal relationship after the fact considers the failure to disclose as evidence of the conflict.

Does that make it a conflict?

No.

But as friendly an acquaintance as I am, nobody likes learning from me that a complaint has been filed against them.

Finally, yes.  I’m a fan of the third verse.

Garth Brooks - Friends in Low Places [Remix] by $WAMP BEAT$ on SoundCloud -  Hear the world's sounds

 

Conflicts & nonlawyer staff

This situation arose this week via inquiry:

  • Mike – we’ve been approached by a prospective client who is getting divorced.  The spouse’s business deals are a significant issue in the divorce.  Our paralegal used to work at the firm that is representing the prospective client’s spouse. The paralegal may have worked on some business deals for prospective client’s spouse.  Can we represent the prospective client in the divorce?

What say ye?

  • A.  No. Paralegal has a conflict and it’s imputed to every lawyer in the caller’s firm
  • B.  Yes.
  • C.  Yes, because even if paralegal has a conflict, it is not imputed to the lawyers in the caller’s firm. Of course, paralegal must not have any involvement with the divorce or share information about spouse’s business deals.
  • D.  Mike, the answer is “C,” but you probably shared some practical reasons for the caller to think twice about representing the prospective client.

Rule 1.10 is our rule on imputed conflicts.  Per Rule 1.10(a), most of a lawyer’s conflicts are imputed to all other lawyers in the same firm.  Essentially, if Mike can’t represent potential client, neither can any of the lawyers in Mike’s firm.

There are exceptions.  And one covers Mike’s paralegal.

Here’s the first line of Comment [4] to Rule 1.10:

  • “The rule in paragraph (a) also does not prohibit representation by others in the law firm where the person prohibited from involvement in a matter is a nonlawyer, such as a paralegal or legal secretary.”

The Comment continues:

  • “Such persons, however, ordinarily must be screened from any personal participation in the matter to avoid communication to others in the firm of confidential information that both the nonlawyers and the firm have a legal duty to protect.”

This is not a new development in the law of lawyering.  Indeed, the oldest available advisory opinion from the VBA’s Professional Responsibility Committee is Opinion 78-02. In it, the Committee opined:

  • “A firm is not disqualified from handling a case because a paralegal employed in the firm formerly was enrolled in a paralegal training clinic which provided representation to an opposing party in litigation handled by the firm even though the paralegal had some involvement in that representation as long as the paralegal has no present involvement in the case and conveys no confidential information to firm attorneys.”

So, here again is the question I asked above:

What say ye?

  • A.  No. Paralegal has a conflict and it’s imputed to every lawyer in the caller’s firm
  • B.  Yes.
  • C.  Yes, because even if paralegal has a conflict, it is not imputed to the lawyers in the caller’s firm. Of course, paralegal must not have any involvement with the divorce or share information about spouse’s business deals.
  • D.  Mike, the answer is “C,” but you probably shared some practical reasons for the caller to think twice about representing the prospective client.

Under the rule, “C” is correct.  However, there are practical reasons that the caller should think twice about handling the prospective client’s divorce. So, “D” is the best answer.

Using the hypo as a construct, here are two practical considerations that I often share with lawyers who call to discuss potential conflicts.  There might be others.

  1. Even if it isn’t a conflict, do you want to deal with spouse filing a disciplinary complaint against you?
  2. Even if it isn’t a conflict, if the other side moves to disqualify you and your firm, it will cost the prospective client time and money.

Conflicts can be tough.  Don’t hesitate to call if you want to talk one through.

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Of Counsel: Conflicts

I’ll cut to the chase: as I see it, when an attorney is “of counsel” to a firm, conflicts are imputed between the attorney and lawyers in the firm.  Here’s why I see it that way.

As we know from my intro to “of counsel,” a lawyer so designated must have a “close, regular, and personal relationship” with the firm.  Mutual referrals do not an “of counsel” relationship make. Nor does being brought in for a single case or the occasional consultation.

Next, from this post, we know that given the “close, regular and personal” nature of the “of counsel” relationship, the “of counsel” lawyer will be considered part of the firm for compensation purposes.  In other words, the fee sharing rule doesn’t apply.

A final reason that I see it as I see is that others smarter than I have stated that that’s how they see it.  That is, the ABA’s Standing Committee on Ethics and Professional Responsibility and the Illinois State Bar Association have opined that if lawyers are considered to be in the same firm for fee sharing purposes, then the same goes for conflicts.  The ABA opinion is here, while the Illinois opinion is here.  As the ISBA stated:

  • ” If the lawyers are considered to be in the same law firm for purposes of
    the division of legal fees, it follows that the lawyers should be viewed as being in the same law firm for the purposes of any conflicts of interest, particularly given the close, personal nature of the ‘of counsel’ relationship. Accordingly, the disqualification of one from representation due to a conflict of interest must be imputed to the other.” (emphasis added).

The last sentence makes a critically important point.

Vermont imputes most conflicts to all other lawyers in the firm.  That is, but for a few exceptions, we do not recognize “the wall.”   It’s Rule 1.10, and here’s what it says:

  • “While lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by Rule 1.7 or 1.9, unless the prohibition is based on a personal interest of the prohibited lawyer and does not present a significant risk of materially limiting the representation of the client by the remaining lawyers in the firm.”

Or, in language I use when I want to be understood:

  • “The rule is this: if one lawyer can’t take the case because of a conflict with a current or former client, none of the other lawyers in the firm can take it either.”

An aside:, don’t get hung up on the “while lawyers are associated in a firm” bit.  The ABA & Illinois opinions says that “of counsel” counts.

So, the upshot:  Lawyer is “of counsel” to Firm.  Firm wants to represent Client.  However, the conflicts rules would prohibit Lawyer from representing Client, and the conflict isn’t a “personal” conflict.  Lawyer’s conflict is imputed to all lawyers in Firm.

I hear you now: “but Mike, that isn’t fair. She’s only ‘of counsel’, we never even really hear from her or see her.  We’ll wall her off.”

Be careful what you let me hear.

First of all, if you never even really hear from her or see her, then it’s likely misleading to call her “of counsel.”  Second, fair or not, Vermont doesn’t recognize the wall in this scenario. The conflict is imputed to all other lawyers in the firm.

To sum up my posts on the “of counsel” relationship:

  1. All the rules apply.
  2. If the relationship isn’t “close, personal, and regular” it’s likely misleading to call the lawyer “of counsel.”
  3. For the purposes of fee division and conflicts, “of counsel” will be considered part of the firm.

I’m not sure this is a burning issue in Vermont.  Still, a lesson to be drawn might be this:  carefully consider these issues before doling out the “of counsel” designation. It’s not a title to be bestowed willy nilly.

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Monday Morning Answers #115

Friday’s column about a kid from Barre is here.  The answers to the #fiveforfriday legal ethics quiz follow today’s honor roll.

Honor Roll

(hyperlinks when available.  lack of a link doesn’t reflect a lesser score or lower honors)

Answers

Question 1

Paralegal works for Firm.  Client asks Firm to represent Client in the matter Client v. Other.  

Paralegal has a relationship with Other that would preclude Paralegal from representing Client if Paralegal was a lawyer.

True or False? Under Vermont’s rules, Paralegal’s conflict is imputed to Firm and Firm cannot represent Client.

FALSE.  See, V.R.Pr.C. 1.10, Comment [4]Although, Paralegal “ordinarily must be screened from any personal participation in the matter” of Client v. Other.

Question 2

Lawyer called me with an inquiry. I listened, then said:

  • don’t state or imply that you’re disinterested;
  • do correct any misunderstanding about your role; and,
  • if the person’s interests conflict with your client’s, don’t give any legal advice other than the advice to seek counsel.

Given my response, Lawyer called to discuss the rule on:

  • A.  Candor to a Tribunal
  • B.  Communicating ex parte with a judge.
  • C.  Trial Publicity
  • D.  Dealing with an unrepresented person.  V.R.Pr.C. 4.3

Question 3

Attorney called with an inquiry. I listened, then said: “well, it’ll likely depend on whether you received information from Person that could be significantly harmful to Person.”

In this context, it’s most likely that Person is:

  • A.  A former client of Attorney’s
  • B.  A current client of Attorney’s
  • C.  A juror
  • D.  Someone who met with Attorney to discuss forming an attorney-client relationship, but who never formed such a relationship with Attorney See, V.R.Pr.C. 1.18. My comment comes straight from Rule 1.18(c).

Question 4

A lawyer who represents two or more clients shall not participate in making an aggregate settlement of the claims of or against the clients.

  • A.   True.
  • B.   True, unless each client gives informed consent in a writing signed by the client.  V.R.Pr.C. 1.8(g).
  • C.   True, but only in civil cases.  The rules prohibit joint representation of criminal defendants.
  • D.   The rules are silent on this issue.

Question 5

The unauthorized practice of law is contempt of court and, if done by a lawyer, is a violation of Rule 5.5.  And, as long time readers know, I’m a big fan of Rule 1.1 and the duty to provide clients with competent representation.

So, speaking of Italy, UPL, and competent representation . . .

. . . Portia was not a lawyer.  However, dressed as a man, she pretended to be one and successfully kept Antonio from having to give a pound of flesh to Shylock.

Name the literary work.

The Merchant of Venice, William Shakespeare

Avoid hot water by understanding Hot Potatoes

Ever consider dropping a client so as to be able to represent a different client?  It happens more often than you might think.

Figuratively, dropping a client like a hot potato can lead a lawyer into hot water.

See the source image

For the purposes of conflicts, the rules identify three types of clients.  Respectively,

The rules don’t treat all client conflicts equally.  The rule on current clients is more strict than the rule on former clients, which, in turn, is more strict than the rule on prospective clients.

For example, Rule 1.7(a)(1) states that it is a conflict for a lawyer to take any action that is directly adverse to another client.  The rule ensures that lawyers remain loyal to clients.

With respec tot the duty of loyalty, Rule 1. 7 is much broader than “a lawyer can’t represent both sides to the same action.”  As Comment [6] states, “absent consent, a lawyer may not act as an advocate in one matter against a lawyer the person represents in some other matter, even when the matters are wholly unrelated.” 

By contrast, the duty of loyalty to a former client is somewhat more relaxed.  Rule 1.9 prohibits a lawyer from representing someone who is adverse to a former client “in the same or a substantially related matter.”

So, imagine this scenario:

  • Lawyer represents Client A in Matter 1.
  • Client B asks Lawyer to sue Client A in Matter 2,
  • Matters 1 & 2 are wholly unrelated to each other.

Clearly, Rule 1.7(a)(1) prohibits Lawyer from suing a current client (A) on behalf of another client (B) even if the matters are wholly unrelated.

However, what if Lawyer “fires” A as a client?  Rule 1.7 would no longer apply since A would no longer be a “current client.”  Further, Lawyer would argue that Rule 1.9, the rule on former client conflicts, doesn’t apply since Matter 2 is not “the same as or substantially related” to Matter 1.

This is the so-called “hot potato” doctrine.  That is, Lawyer dropped Client A like a “hot potato.”

There’s been a lot written on the “hot potato” doctrine.  As Attorney Bill Freivogel noted in this this post, most courts will disqualify Lawyer from representing B against A.

In 2009, the Philadelphia Bar Association’s Professional Guidance Committee issued “The Hot Potato Rule and Conflicts of Interest.”  Analyzing a situation quite similar to the hypo that I presented above, the Committee concluded:

  • “Absent compliance with Rule 1.7(b), which includes informed consent from both clients, the inquirer can not represent Company A because the matter is directly adverse to the interests of the inquirer’s current client, Company B.  Moreover, the ethical violation cannot be avoided by the inquirer terminating his representation of Company B.  As noted in International Longshoremen’s Ass’n. Local Union 1332 v. International Longshoremen’s Ass’n., 909 F.Supp. 287, 293 (E.D. Pa. 1995), ‘[A]n attorney may not drop one client like a ‘hot potato’ in order to avoid a conflict with another, more remunerative client.’ ”

There are exceptions to the “hot potato” doctrine.  One is the so-called “thrust upon” exception.  That is, if a conflict is “thrust upon” a lawyer through no fault of the lawyer’s, it’s okay to drop a client like a hot potato.  Both the New York City Bar Association and the D.C. Bar Association have issued advisory opinions on the “thrust upon” exception.

In conclusion, think twice before you drop a client like a hot potato in favor of another client.

Why?

Because no matter what Snoop might say, when it comes to clients, it’s not always a good idea to drop ’em like they’re hot.

 

See the source image

 

 

 

 

Monday Morning Answers #107

Friday’s questions are here.  I received several great responses to the Olympic post:

  • one reader was at the US-USSR game;
  • another was in Lake Placid for the ’80 Winter Games; and,
  • a third watched with family on tape-delay, and, despite knowing the result, managed to maintain the “confidentiality” of the USA’s historic upset.

And speaking of hockey, congratulations to the Marjory Stoneman Douglas High School hockey team!  Yesterday, the squad won the Tier 1 state championship in Florida’s Lightning League.  ESPN has the story.

The answers follow the Honor Roll.

Honor Roll

Answers

Question 1

A financial institution must notify the PRB whenever an instrument drawn on an attorney’s pooled interest-bearing trust account is presented against insufficient funds,

  • A.  but only if the instrument is honored;
  • B.  irrespective of whether the instrument is honored.  V.R.Pr.C. 1.15B(d)(1)

Question 2

Here are 3 aspects to a specific rule.

  1. the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client;
  2. the representation is not prohibited by law;
  3. the representation does not  involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal.

What’s the 4th?

  • A.  each affected client gives informed consent, confirmed in writing;  V.R.Pr.C. 1.7(b)
  • B.  the deposit constitutes collected funds;
  • C.  the limitation is reasonable under the circumstances;
  • D.   other good cause for withdrawal exists.

Question 3

Attorney called me with an inquiry.  I listened and then said: “here is what the rule says – you ‘shall, as far as reasonably possible, maintain a normal client-lawyer relationship with the client.’ ”

What specific topic did Attorney call to discuss?

  • A.   a trust account scam;
  • B.  a client who had filed a disciplinary complaint against Attorney;
  • C  a client who has filed a motion for a new lawyer;
  • D.  a client whose capacity to make adequately considered decisions in connection with the representation is diminished, whether because of minority, mental impairment, or some other reason.  Rule 1.14.

Question 4

Lawyer’s practice focuses mainly on family law & criminal defense.  A few years ago, Lawyer took a personal injury case on behalf of an injured plaintiff.  Lawyer botched it and was sued for malpractice.

Plaintiff offers to settle the malpractice claim for $100,000 and Lawyer’s agreement to never again represent a personal injury plaintiff.

True or false:  the rules prohibit Lawyer from accepting the offer.

True.  Rule 5.6 prohibits a lawyer from making or accepting an offer in which restriction on the lawyer’s right to practice is part of a settlement of a client controversy.

Question 5

I preach competence.  Well, the person who is the answer to this question was more than competent as an Olympian.

This year, there’s a third-year student at the University of Pennsylvania Law School who won Olympic gold as a U.S. figure skater in 2002.  Name her.

Sarah Hughes.

See the source image