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.

 

 

 

 

 

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)

• Karen Allen, Esq.
• Matthew Anderson, Pratt Vreeland Kennelly & White
• Penny Benelli, Dakin & Benelli
• Robert Grundstein, Esq.
• Keith Kasper, McCormick, Fitzpatrick, Kasper & Burchard
• Mark Kennedy,  My Dad
• Lon McClintock, McClintock Law Offices
• Jack McCullough, Vermont Legal Aid, Mental Health Law Project
• Hal Miller, First American
• Thomas Wilkinson, Jr., Esq, Cozen O’Connor

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

Conflicts of Interest: keep it simple, trust your gut.

Conflicts are tough.

But not so tough that you shouldn’t trust your gut.

As most of you know, I provide lawyers with guidance on the Rules of Professional Conduct.   Over the past few years, I’ve averaged 1100 inquiries per year.  About 40% of those have been on conflicts of interest.

Inquiries on conflicts share one thing in common: lawyers almost always know the answer before they contact me.  Why?  Because if you feel the need to call me, text me, or e-mail me about a conflict, you probably have one.

Although my job is to know the rules inside & out, I don’t like getting lost in them. After all, they were written by lawyers.  I’ve been at this job for about 20 years.  To me, the rules are a perfect example of lawyers being lawyers and making the simple complicated.

It’s very simple.  As a lawyer, you owe duties to your client.  If any other duty or allegiance tugs you in a direction other than that which your client is headed, you might have a conflict. The “any other duty or allegiance” could be to another client, a former client, the court, a third person, or yourself.  The one that seems to arise most often: the duty to keep confidential any & all information relating to the representation of a former client.

I try to simply things.  Some of you think I’m overly simplistic.

Guilty as charged.

But, sometimes, simplification leads to realization.

Look back a few paragraphs. I used the word “tugs” for a reason.  The reason is because I think we’re all familiar with the game that, at least when I was a kid, was called “tug-o-war.”  As I blogged here, if you ever feel like the piece of red tape, you likely have a conflict.

Or, as those of you who were in Montreal know, if this picture reminds you of a tension you feel between duties to your client and duties to someone/something else, you probably have a conflict:

For those of you upset that this blog didn’t contain a link to, or quote from, a single rule or case, fine.  My next few posts on conflicts will be more lawyerly.

Or not.

For now, let’s keep it non-lawyerly simple: if ANYTHING ever tugs you, however slightly, in a different direction than that in which your client is headed, stop and consider whether you have a conflict. Then, if you think you do, trust your gut.

And, after that, call me.  I can count on less than one hand the number of times that I’ve said “no you don’t” when someone has called me to say “mike, I think I have a conflict.”

 

 

 

 

Thursday’s Tidbits

 

I’ve scoured the interwebs to bring you the latest news that may or may not be related to legal ethics & professional responsibility.

1. I often blog on the duty of competence.  Remember the LSAT?  For many years, critics have argued that the LSAT makes no effort to measure, and does not predict, professional competence.  Well, someday soon, you might be working with a lawyer who never took it.  As reported by The Wall Street Journal, an increasing number of law schools are dropping the LSAT requirement.
2. My posts on the duty of competence usually relate to tech competence.  A post on SLAW, argues that laptops should be banned in law school classrooms and, perhaps, courtrooms.
3. If you use your laptop, you might remember my blog on the Legal Keyboard. On his LawSitesBlog, Robert Ambrogi updates us on the mini version for travel.
4. Rule 1.5 prohibits unreasonable fees.  It’s okay to accept a fee in something other than money.  For instance, property.  But, as this suspension order from the Ohio Supreme Court reminds us, the value of the property must reasonably approximate the value of the services provided —  and, of course, the property transfer must not violate the criminal law.
5. Next year is an election year in Vermont.  Professor Alberto Bernabe, a frequent member of the #fiveforfriday Honor Roll, blogged on whether defense lawyers should be allowed to contribute to prosecutors’ campaigns.
6. Is your firm set up as a partnership or, perhaps, an LLC? The TaxProfBlog links to a Wall Street Journal article For Pass-Through Businesses, Let The (Tax) Games Begin.
7. Related, yesterday, the ABA Journal reported that the ABA asks Congress to include law firms in pass-through tax relief.
8. Last week I blogged on paralegal licensing.  A post on Law Times argues that it is Time for graduated licensing for lawyers.
9. From the ABA Journal, apparently there’s a ” ‘baffling phenomenon’ of lawyers who shoplift.”    It might make you ask yourself “self, was that wrong?”
10. Regarding judicial ethics, can a judge use the internet for independent legal research?  This advisory opinion from the ABA has the answer.  For a synopsis, the ABA Journal article on the opinion is here.

 

 

Monday Morning Answers #81

Nothing like a little Jay-Z to get people to enter the quiz!

Friday’s questions are HERE.  Today, the answers are below the Honor Roll.

Honor Roll

• 99 Problems but a Conviction Ain’t 1
  • Jordana Levine, Audrey Smith, Rachel Thompson
• Karen Allen
• Matt Anderson
• Evan Barquist
• Alberto Bernabe
• Andrew Costello
• Robert Grundstein
• Keith Kasper
• Deb Kirchwey
• Lon McClintock
• Hal Miller
• Herb Ogden
• Brendan Scherer

Answers

Question 1

Not all rules were created equal.  If an attorney’s duties under the rules conflict, which duty is usually viewed as trumping all others?

• A.   Duty of zealous advocacy to clients
• B.   Duty of fairness to opposing counsel & opposing parties
• C.   Duty to provide competent, conflict-free representation
• D.   Duty of candor to the courts; See generally, V.R.Pr.C. 3.4.  Per the Reporter’s Notes, “if the interests of client and tribunal conflict with regard to candor, the interest of the tribunal prevail.”  Also, Comment 11 makes it clear that the duty of candor to the court prevails even in the face of causing “grave consequences” to a client by disclosing the client’s false testimony.

Question 2

Competence.  Conflicts.  Candor.  There’s another word that begins with “C” that is a serious violation of the rules.  However, the word doesn’t appear in any of the rules, notable in its absence from the trust accounting rules and the rule on safekeeping client property.

What’s the word?

Commingling

Question 3

This comes up in approximately 30% of the inquiries I receive. So, about 330 times per year.

Imagine I’m speaking at CLE.  You hear me say “the idea is that we’re not going to put a client to the ‘Hobson’s Choice’ of having to disclose a confidence in order to protect it.”

What general topic am I discussing?

Conflicts/Withdrawal

It is not uncommon for lawyers who encounter former client conflicts to tell me “but Mike, I don’t remember anything about the prior case.”  That may be true, but it’s not the standard under Rule 1.9(a).  As the Vermont Supreme Court has explained, if the new client’s matter is the same as or substantially related to the former client’s matter, the Court will presume that the former client shared confidential information with the attorney.  Why? 

• “[t]he purpose of the presumption is to avoid “ ‘putting theformer client to the Hobson’s choice of either having to disclose his privileged information in order to disqualify his former attorney or having to refrain from the disqualification motion altogether.’ ” In re Crepault, 167 Vt. 209, 216-17 (citations omitted).

Question 4

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

• “Okay.  Since you and Attorney don’t work in the same firm, it is only allowed if  you  do one of two things.  And, since it sounds like Attorney doesn’t want to do any work on Client’s matter, that means that the first option is out. So, your only option is that you each assume joint responsibility for the representation of Client. Otherwise, the rule prohibits it.“

What is “it” that Lawyer called to discuss, and that Lawyer and Attorney propose to do.

Fee Sharing.   See, this post.

Question 5

As another school year approaches, imagine an aspiring 1L heading to law school.  Law student is cruising down the highway with the tunes blaring.  All of sudden, there are blue lights in the rear view. In the ensuing encounter with police, the law student says to the officer:

• “Well my glove compartment is locked, so is the trunk in the back
  And I know my rights, so you gon’ need a warrant for that.”

Problem 1:  The situation at hand for our erstwhile law student.

Problem 2:  Future issues with the Character & Fitness committee upon applying for admission?

Problem 3: If law student’s statement is based on advice from a lawyer, the lawyer didn’t exactly provide competent & ethical advice.

Your problem: Name the artist & song that was blaring just before law student was pulled over.

Jay-Z, 99 Problems.