Tech Sells

It’s funny how quick we are to blame technology.  At least in headlines.  Apparently, tech sells.

I’ve blogged on this phenomenon before: Social Media Sanction! Except, not really.  For the latest, I present 3 headlines:

• Charleston attorney suspended for 3.5 years after offering legal advice for Go Fund Me money
• Go Fund A Lawyer
• Misleading GoFundMe appeal with offer for free legal advice leads to lawyer’s suspension

Without reading the articles, what do you think got the lawyer in trouble?

I can hear you now:

Mike, for all your tech competence mumbo jumbo, tech only leads to one thing – trouble!

Wrong.

1. The first headline ran on January 26 in the West Virginia Record.
2. The second ran on January 28 on the Legal Profession Blog.
3. The third ran on January 31 in the ABA Journal.

Yes, a West Virginia lawyer’s license was suspended for 42 months.  Yes, the misconduct included a misleading GoFundMe page.

How much money do you think the lawyer raised via the GoFundMe campaign?

If you guessed anything more than $0.00, you guessed wrong.

The lawyer created the page in September 2017.  He took it down immediately after disciplinary authorities alerted him to their investigation of the page.  It had been active for 3 or 4 days and generated exactly zero donations.  The lawyer testified that he’d meant it only for family members and did not realize that it was publicly available.

Then why the 3.5 year suspension?

Alas, for approximately nine months that spanned 2016 and 2017, the lawyer misappropriated more than $12,000 from the Kanawha Valley Soccer League while serving as its treasurer.

The hearing panel’s decision is here.  Yes Costanza, stealing money is wrong.

There’s no need to fear tech or to think that tech developments have foisted a whole new type of unethical lawyer on the masses.  Since the dawn of time, people (including lawyers) with access to other people’s money have stolen it.

Further, don’t let the headlines detract from something more important: crowdfunding platforms can help to provide access to legal services.

Are there ethics issues associated with crowdfunding platforms?  Yes.  I’ve written about them here and here.  Regular #fiveforfriday contributor Professor Alberto Bernabe has discussed them here.

But, to think that a crowdfunding platform caused a lawyer to lose his license for 3.5 years would be, quite simply, wrong.

Don’t let buried ledes fool you.  Don’t fear tech.

 

 

 

Legal Ethics & Crowdfunding to pay legal fees

Professor Alberto Bernabe often appears on this blog’s #fiveforfriday Honor Roll.  He also has his own blog and, last week,  blogged on an advisory from the DC Bar. The opinion addresses the ethics issues that arise when a lawyer’s client crowdfunds legal fees.

The opinion is here. Professor Bernabe’s blog post is here.  He wrote more extensively on the topic in this article that pre-dates the DC advisory opinion.

I’ve also blogged on the topic. I did so here in response to an advisory opinion from the Philadelphia Bar Association.  I wrote:

• “That’s why the Philly opinion is great.  It doesn’t treat ‘crowdfunding platforms’ as new creatures that require new rules.  Rather, it reminds lawyers that the rules that apply when using a crowdfunding platform are the same rules that apply to any other representation.”

As Professor Bernabe notes, the DC Bar opinion is consistent with the Philadelphia opinion and others on crowdfunding.

I like the following statement from the DC Bar:

• “It is not unusual for clients to rely on money collected from family or friends to pay for legal services.”

Indeed, many Vermont lawyers accept payment from someone other than the client.  The most common situation?  A parent pays for a child’s lawyer in a criminal or family case.

When that happens, it’s critical for the lawyer to remember Rule 1.8(f):

• “A lawyer shall not accept compensation for representing a client from one other than the client unless (1) the client gives informed consent; (2) there is no interference with the lawyer’s independence of professional judgment or with the client-lawyer relationship; and (3) information relating to the representation of a client is protected as required by Rule 1.6.”

In other words, even if Parents are paying Lawyer to represent Child, they don’t get to direct the representation and, absent Child’s consent, Lawyer cannot disclose information relating to the representation to them.

Somewhat related, the DC Bar included a great tip in Ethics Opinion 375:

• “A lawyer should consider counseling his or her client regarding disclosures to third parties. Crowdfunding typically entails some level of disclosure to third parties about the predicate need for counsel. Because of their financial support, crowdfunding contributors may be interested in the status of or information about the client’s matter. Due to the risk of waiver of the attorney-client privilege, or simply for strategic reasons, a lawyer who knows that a client is crowdfunding should provide the appropriate level of guidance to the client regarding disclosures to third parties, whether such disclosures occur on a social media platform or privately in discussions with friends and family.”

In sum, nothing about using a social media platform to crowdfund legal fees is inherently unethical.  Oh, and as mentioned in both the Philadelphia and D.C. advisory opinions: crowdfunding helps provide access to legal services to those who otherwise might not be able to afford a lawyer.

Related:

• (Bernabe) DC Ethics Committee new opinion on crowdfunding
• (Bernabe) Is it ethical to use “crowdfunding” to finance the practice of law?
• (Kennedy) Crowdfunding: The More Things Change . . .
• DC Bar Ethics Opinion 375
• Philadelphia Bar Association Opinion 2015-06

 

 

 

 

 

 

Monday Morning Answers: #67

This week’s answers come to you live from Boston, MA.  I’m preparing to run the Boston Marathon.  Unlike most marathons, Boston seeds its start.  Faster runners up front, with runners organized, more or less, in numerical order.

It appears that I’m not one of the favorites:

Friday’s questions are HERE.  The answers follow the honor roll.

HONOR ROLL

• Evan Barquist
• Penny Benelli
• Beth DeBernardi
• Laura Gorsky
• Robert Grundstein
• Anthony Iarrapino
• Keith Kasper
• Patrick Kennedy
• Nicole Killoran
• Deborah Kirchwey
• Elizabeth Kruska
• Cristina Mansfield
• Hal Miller
• Jim Runcie

Answers

Question 1

Which is most accurate?  A contingent fee:

• A.   Must be fair
• B.   Must be in a writing
• C.   Must be in a writing signed by the client; See, Rule 1.5(c) and my blog on the basics of contingent fees.
• D.  Must not be calculated until after the client’s expenses are deducted

Question 2

Attorney called with an inquiry.  I listened. I replied “It doesn’t matter that your client ‘initiated’ it, the rule still applies.  And the fact that you cc’d your client on the e-mail is not the same as consent.”

What topic did Attorney call to discuss?

Communicating with a represented party.  Specifically, Attorney called to discuss whether by cc’ing her client on an email to opposing counsel she had given opposing counsel permission to contact client directly.  I blogged on the issue HERE.

Question 3

Fill in the blank.

In an advisory ethics opinion okaying the use of a particular type of technology, the Philadelphia Bar Association concluded that:

• “CROWDFUNDING sites can be a beneficial source of funds allowing the public to assist in the assertion of valid legal claims that might otherwise go without recourse. Thus, great care should be taken to make sure that the initial development of such sites not affect the ability of subsequent persons to use such a source.”

My blog on crowdfunding is HERE.

Question 4

North Carolina gained national attention for an amendment to its rules that went into effect last month.  If Vermont were to follow the Tar Heel state’s lead, nearly all lawyers would have a duty that, today, only applies to a subset of the bar.  It’s the rule that, right now, relates to:

• A.  “Admiralty” lawyers being allowed to advertise their area of specialization
• B.  Conflicts for defense attorneys who move from a public defender’s office to a state’s attorney’s office
• C.   Television ads by lawyers who represent large classes of plaintiffs
• D.  A prosecutor’s duty to disclose evidence that tends to negate the guilt of an accused.  

My blog on the issue is HERE.

Question 5

Earlier this week, three news media organizations were named co-winners of the 2017 Pulitzer Prize for Explanatory Journalism.  The organizations were The Miami Herald, The McClatchy Group DC, and The International Consortium of Investigative Journalists.  

The Pulitzer reflected their efforts on reporting a story that involved, among other things, Vladimir Putin, David Cameron, and offshore shell companies. The story came to light after a whistleblower “leaked” 11.5 million documents that a law firm had stored electronically. Review of the documents resulted in the law firm’s name partners being arrested and jailed on suspicion of money laundering.

By what name is the scandal better known?

THE PANAMA PAPERS

Throwback Thursday: Crowdfunding

Earlier this week, I received my first inquiry on the ethics of crowdfunding litigation.  It reminded me of a blog I posted in January 2016.

The post is HERE and it’s on, you guessed it, the ethics of crowdfunding litigation.  Given the inquiry, I thought I’d revisit the post.

 

I’m aware that January 2016 isn’t much of a “throwback.”  But that’s okay.  At GW Law, I was the quarterback on O.P.P., the first law school team to win the “grad school” division of GW’s IM flag football league.  We advanced to the Final Four where we were utterly smoked in the semis by the team that won the “staff” division. In any event, back then I wasn’t known for throwing deep; pinpoint accuracy was my thing.   So, a throwback of a mere 14 months might not be much of a throw, but the topic is relevant. So, I consider it the equivalent of an 11-yard out that keeps the chains moving.

Crowdfunding: The More Things Change….

The first post to this blog argued that a lawyer’s duty of competence includes a duty to stay abreast of developments in technology and the benefits and risk thereof.  It’s HERE.

Today, I came across a tech ethics issue I hadn’t previously considered:  is it ethical for a lawyer to use a “crowdfunding platform” to solicit donations to fund the representation of  a client who cannot afford the lawyer’s fee?

The answer, according to the Philadelphia Bar Association, is “yes, as long as the lawyer complies with the rules.” The full text of the Philly advisory opinion is HERE.

I love the opinion.  Why?  Good question.  Let me tell you why.

You’d be surprised how often lawyers tell me “we need to change the rules to keep up with technology.”

No.  We.  Don’t.

Let’s use Rule 1.6 as an example.  Comment 16 tells us that:

• “A lawyer must act competently to safeguard information relating to the representation of a client against inadvertent or unauthorized disclosure by the lawyer or other persons who are participating in the representation of the client or who are subject to the lawyer’ supervision.”

The rule does not reference technology.  In other words, the rule draws no distinction between the lawyer who is having a conversation with a person who is standing two feet away and a lawyer who is emailing a person who is 5000 miles away.

Advances in technology that have resulted in new methods of communicating & transmitting information have not changed a lawyer’s duty to safeguard client information that is communicated & transmitted. Are the risks associated with storing client information in the cloud different than those associated with talking with a client in a crowded hallway at the county courthouse?  Of course!  But the duty not to disclose otherwise protected information remains the same in each situation.

That’s why the Philly opinion is great.  It doesn’t treat “crowdfunding platforms” as new creatures that require new rules.  Rather, it reminds lawyers that the rules that apply when using a crowdfunding platform are the same rules that apply to any other representation.  That is, if a lawyer & client use crowdfunding to raise money  to cover the lawyer’s fee, the lawyer must:

• not disclose information relating to the representation absent client’s informed consent;
• comply with the rule that applies when a fee is paid by someone other than the client;
• avoid conflicts of interest;
• refrain from charging an unreasonable fee;
• account for & track client funds;
• not commingle funds;
• deposit earned & unearned fees in the appropriate accounts; and,
• not make misleading statements to others.

Remember: advances in technology do not change the duties lawyers owe to client, courts, and third persons.

Some of you might be muttering “what’s a ‘crowdfunding platform’ ?”  If you want to learn more, or if you think they might help your clients, the wikipedia entry is HERE.  You’ve probably heard of GoFundMe and Kickstarter.  They are crowdfunding platforms.  For a list of the top 10 by traffic, go HERE.

Are you required to learn about crowdfunding?  No.  But, if a client asks about crowdfunding your fee, “i don’t know about that &  it’s probably not allowed” might not cut it.

Finally, as Margaret Barry of Vermont Law School has mentioned to me, advances in technology will improve access to justice.  That is the case with crowdfunding platforms. As the Philadelphia Bar Association noted, “[c]rowdfunding sites can be a beneficial source of funds allowing the public to assist in the assertion of valid legal claims that might otherwise go without recourse.” So, please, don’t succumb to the knee jerk reaction that if it’s new, it must be unethical.  There’s too much at stake for that thought process to prevail.