Legal Ethics Forum

Anna Nicole Smith and the Model Rules

As I consistently preached to my students last year, legal ethics is endless fun!  For more variation on this theme, here's the link to my op-ed in today's Legal Times discussing the Model Rules as applied to Anna Nicole Smith's latest legal fracas:

http://www.law.com/jsp/dc/PubArticleDC.jsp?id=1160643919665

I wish all my scholarship was this interesting...

Lynne Stewart Sentenced to 28 Months

Story here.    Although I have enormous respect for criminal defense lawyers, oppose the tape recording of attorney-client communications, and am skeptical of the Ashcroft DOJ's policies, the behavior of Lynne Stewart as captured on the tape recordings justified the loss of her law license.  As to whether it should have been prosecuted as a criminal matter, that's a closer question -- although her consciousness of wrong-doing is palpable on the transcripts.

Rule Violations With A Positive NPV

John's fourth conjecture in this post is that a lawyer might violate California's restrictive confidentiality rules because the violation would leave the lawyer better off financially than if he or she followed the rule.  In other words, maybe the lawyer acted in an economically rational manner by choosing to break a rule in a context where the violation had a positive net present value (NPV). (We would have to know the expected cost of discipline, of course, and the reputational hit the lawyer would take (see my thoughts on that issue here), but John takes care of those by positing that the lawyer is near the end of his career, so that the expected value of his license is low.)

I think this conjecture is quite plausible.  It raises two issues.  The first is purely normative.  If both the private and social value of a rule violation are positive, why in the world would we expect or want lawyers to follow rules?  (I'll stipulate for purposes of the question that whistle-blowing generates net positive social returns).  It seems that only rule-worship would favor compliance in such a case.

The second is harder.  What do we tell students about their own self-interest and rules?  More precisely, do we tell them that there are times when the expected private returns to rule-breaking are positive?  In my view, at least, that is the truth.  And having insisted on probabilistic thinking as an element of judgment, I am ill-suited to tell them to turn off their probability calculators when faced with such a choice.  One could scare them by alluding to public disgrace and the expected cost of suspension or disbarment, but that is fighting the hypo.

The best answers I have found are two-fold.  The first is that people generally should not engage in conduct that generates net social losses, as some rule violations will.  The second is that they have to decide what they can live with, and that is up to them.  Notice, of course, that neither argument has any unique relationship to lawyers.  They are just arguments about what people should do.

One argument I hear often but which I think does not work is this: if everyone violated the rules, then society would be worse off, including the lawyer; the lawyer has a moral obligation to follow the rules because he or she benefits from others doing so.  To me that dodges the consequentialst nature of the question by back-dooring deontology dresseed up as defuse consequentialism.  In particular, (i) lots of others do violate rules, sometimes against you, and yet the world plugs along without collapsing into chaos; so that (ii) the consequentialist feint of the argument is falsified by reality: one can violate a rule for self-interested reasons with a high degree of assurance that the sky will not fall.  This argument also fails to deal with the case (and, I think, cannot deal with it) in which violating a rule generates positive social returns as well as private returns.

Any other insights on approaching the positive NPV violation?

Did a California Lawyer Disclose Confidences about an (alleged) Ponzi Client?

Postings by Peter Henning at White Collar Crime Blog and Alan Childress at Legal Profession Blog prompted me to think of reasons why a hypothetical California lawyer might choose to disclose client confidences after learning that the client had been running a (hypothetical) Ponzi scheme.  I don't suggest that any real lawyer drew the following conclusions or that any of these reasons is legal justified, but here's my list:

1.  The lawyer concluded that the SEC ethics rules governed and were "supreme law of the land."

2.  The lawyer concluded that some other state's rules governed.

3.  The lawyer concluded he/she was under criminal investigation and/or a legal threat from the client and felt that California case law gave leeway to disclose.

4.  The lawyer weighed up the risks of being held financially responsible for the Ponzi scheme and decided they out-weighed the risks of state bar discipline.  Imagine, for example, that the lawyer is near retirement, has a modest nest egg, and knows that the lawsuits about to come fast and furious.  While I don't applaud the thinking, a lawyer might vote his/her own pocketbook.

5.  The Ponzi scheme entity had at least one "good" officer/director who authorized the disclosure in order to escape civil and criminal liability.

Political Ads and the Lawyer's Amoral Role

Obviously, political commercials do not generally offer great intellectual or moral insights.  But political advertising hit a new low this week when Massachusetts gubernatorial candidate, Kerry Healey, ran a commercial (which still prominently appears on her website) that questions whether her opponent, Deval Patrick, is fit to be governor simply because he represented someone who was on death row.  The catch line from the ad: "While lawyers have a right to defend admitted cop killers, do we really want one as our governor?"  Watch the ad here. 

Healey's claim that lawyers are in some way morally accountable for the clients they represent is oft-discussed in legal ethics.  Although a few scholars contend that lawyers have some moral responsibility for their client selection decisions, it is hard to leap from that position to the view that the representation of a death row inmate should disqualify someone from serving as governor.  According to Healey's logic, she would have to oppose the candidacy of a lawyer who previously represented tobacco companies.  That lawyer, after all, represented a client whose product was responsible for a lot more deaths than anyone on death row.  How about the lawyers who represented Enron founder Ken Lay?  Imagine this ad: "Although lawyers have a right to defend corporate executives who engage in massive fraud that leads to the loss of billions of dollars and thousands of jobs, do you really want one as our governor?"  Please. If that commercial would be absurd, I don't see how Healey's ad is any more reasonable. 

Naked Prosecutors, Oh My!

A prosecutor was arrested for wandering around naked after hours in the building, according to CNN.  You know, I have quite a wild view of life, but some things never occur to me to do.

Florida Moving on Metadata Mining

In mid-September, the Florida bar published an advisory opinion on metadata mining outside the context of discovery, saying that lawyers have an obligation to act reasonably to remove metadata, but they shouldn't look at metadata transmitted by opposing counsel (again, outside the context of discovery).  There's a New York opinion that largely agrees with the Florida opinion.

I was told recently that Virginia is leaning this way, too. I was also told, though, that the ABA is going to say it's fair to mine away.  Seems to me the ABA's opinion is wrong, but hopefully it's just a rumor.

Fun with Law, Culture, Photos, and Video

My colleague, Jessica Silbey, has a provocative post at the LawCulture blog about the attached photo of President Bush addressing a conference on faith based initiatives back in March.  I had a different reaction than Jessica did: I couldn't stop thinking of the Apple Computer commercial from the 1984 Superbowl.  So who's going to throw the hammer?

The Purpose of Law School Classes?

The blawgs are addressing two related issues: (1) should law schools require international law for first year students (Volokh); and (2) how much class participation should a law professor demand of students (Prawfsblawg and Concurring Opinions). 

Both issues have provoked debate and have prompted some comments to the effect of, "law school classes are supposed to deliver what the students will need as practicing lawyers."  Is there any consensus on that?  I often hear it said that law schools let their students learn how to practice law "on the job," that law schools recapitulate the instruction Harvard invented in 1880 because that's how we've always done it, and that having extended practice experience makes for a less desirable law professor candidate.

Without taking sides on which way is the better way, if law schools really were geared around what the students need to practice law, wouldn't we have less common law analysis and more analysis of statutory schemes; less focus on litigation and more focus on transactions, planning, and administrative compliance; less mooting of appellate law issues and more mooting of client interviews and counseling; fewer once-per-semester three hour exams and far more writing assignments; fewer assignments to individual students and more team assignments (like B-school)?

Quick Hits (10-08-06)

Lawyers who charge interest on clients' overdue accounts can sometimes run afoul of usury statutes and ethics rules.    . . . .    This from Law.com: "A New York state judge has reinstated tax shelter claims against law firm Sidley Austin and German banking giant HypoVereinsbank (HVB) on the grounds that a federal deferred prosecution agreement signed by HVB in February presented new evidence of a conspiracy."    . . . .     This from the National Law Journal: "Law blogs raising prickly ethical issues."  In short, state bars are weighing whether blogs are advertising.    . . . .     A move is afoot to permit English judges to return to private law practice -- which is currently forbidden.