Legal Ethics Forum

Exam questions

From the recently ended semester.

Question One

You are a litigation associate in a private practice law firm (“Firm”). The partner (“Partner”) asks for your help analyzing a potential new matter. The proposed client, Plaintiff, an airline that carries cargo, believes it has a contractual right to the exclusive use of a small commercial airport that is currently being used by ten competing airlines (which are conveniently named Alpha, Bravo, Charlie, Delta, Echo, Foxtrot, Golf, Hotel, India, and Juliet). Plaintiff wants to bring a suit for injunctive relief, barring all ten airlines from using that airport.

Partner tells you about some potential problems. The firm has been representing a company, Kilo, on some state law tax issues. Kilo is 66% owned by Alpha. The last billings to Kilo were three months ago and there is apparently no work going on right now—but no termination letter has gone out. Second, Bravo is a current client of the firm on employment counseling issues. Third, about one month ago, the Firm hired a lawyer, Lisa Lateral, who had previously done corporate work for Charlie. Fourth, our Firm used to represent Delta, but that was seven years ago and the lawyers who handled that have left the Firm.

Partner tells you, “I plan to talk to the CEO of Plaintiff and say that our Firm can do the litigation against Charlie, Delta, Echo, Foxtrot, Golf, Hotel, India, and Juliet, and we will quickly build a wall around Lisa Lateral just as insurance even though it’s not needed. If we win the suit, Alpha and Bravo can be dealt with in a second phase—a quick negotiation in light of the Plaintiff’s victory over the other companies or perhaps a second round of litigation brought by some other firm. That’s a good plan, isn’t it?”

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Using the ABA Model Rules and your sound judgment, advise the partner about how the law of lawyering applies to the fact pattern.

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Question Two

You work for a direct services group, the Alameda County Homeless Advocates (ACHA), that counsels poor and indigent people on their legal rights under state and federal administrative laws.

One of your clients, Clarissa Clark, comes to see you about a problem. Clark is a recovered, or recovering, alcoholic with a history of mental health issues. She has been living in an apartment subsidized by state funds but has been notified by the county that she might be moved to a different, less desirable set of apartments that the county is opening up several miles from Clark’s current apartments. Although the new building is nice, the new apartments are smaller, the building is not well served by public transit, and the move will take Clark out of her neighborhood. (You are aware that the new building will not be close to liquor stores and would put Clark much closer to her nephew, who on occasion drops by Clark’s apartment to see how his aunt is doing.) According to the county, Clark has been receiving modest monthly income supplements from her nephew, which have rendered Clark ineligible to remain in the current apartments.

At the meeting, Clark doesn’t seem to grasp the trade-off between receiving her nephew’s financial assistance and her desire to remain in her current apartments. As you look over the notification that the county sent to Clark, you see the name of a county lawyer, Elena Nochera, who went to law school with you and who has a social justice orientation. You know that you and Nochera are chronically over-worked and under-staffed, but can on occasion make special efforts to resolve a few cases that you find particularly compelling.

After Clark leaves, you go to speak to your supervisor but she is busy. You speak briefly to another lawyer at ACHA who has been there for many years. He knows about the recent notifications that have gone out from the county and says that if Clark can stay put for 90 days the new building will be full and Clark won’t be moved. He suggests that you call the nephew and explain the situation and see if the nephew doesn’t come to the realization that it would help to stop making payments briefly, save up the money, and send a larger lump sum in 90-100 days once the crisis is passed. In the meantime you can tell the county the payments aren’t guaranteed and have stopped. Telling that to the county should be enough to keep Clark in her building until the new building is full. (You wonder if the nephew would actually prefer seeing his aunt move to the new building.)

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Using the ABA Model Rules and your sound judgment, explain how the law of lawyering limits your course of conduct and suggest what you might do to handle this situation.

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Ethics Roundup for 2013: Six Developments that Affect the Way We Practice Law

The Professional Responsibility Group at my firm, Frankfurt Kurnit, periodically distributes ethics alerts by e-mail to lawyers in the New York area.  In our final ethics alert of the year, we recapped six trends we have observed over the past year in our ethics practice and our work on various ethics committees. 

The following is an excerpt of the first three developments we discuss in the alert, along with tips for staying out of trouble:

1. New York Has the Rules Now, Not the Code

Until 2009, New York lawyers were governed by the Code of Professional Responsibility.  That year, New York became the 49th State (with California the lone holdout) to implement a version of the ABA Model Rules of Professional Conduct.  Yet, many of New York's older ethics opinions and cases, which were decided under the Code, will continue to be extremely relevant to this practice area for many years to come.  Unfortunately, this seems to cause a great deal of confusion for New York lawyers who do not regularly engage in the area of professional responsibility law.  Because of this confusion, we continue to see motions and other papers that cite to the Code, instead of the Rules, even where the conduct occurred after the Rules were adopted. (Note that conduct prior to April 1, 2009 is still covered by the Code.)  We have observed similar confusion from some of our hotline callers.

Tip:  When analyzing your ethical obligations as a New York lawyer, the place to start is with the relevant provision of the New York Rules of Professional Conduct.  A copy of the Rules (with the comments) can be found here on the New York State Bar Association website. Naturally, as with any research project, reviewing the relevant rule is just the beginning.  But starting in the right place gives you the best chance of finding the right answer!

2.     You Must Supervise Your Escrow Accounts

New York lawyers received a sharp wake-up call in late-2012 when the New York Court of Appeals affirmed a disciplinary charge against attorney Peter Galasso, for failing to adequately supervise his escrow account, which allowed his bookkeeper (his own brother!) to steal millions of dollars in client funds. In early 2013, following a remand after an unrelated charge was dismissed on appeal, the Second Department re-affirmed a two-year suspension of Mr. Galasso.  Escrow violations remain the number one ground for attorney discipline in New York.  Just bouncing a check on an escrow account will trigger a report to the disciplinary authorities, and will likely lead to an audit covering at least six months of account records.  An attorney can be disciplined for inadvertently commingling business or personal funds with client funds, even if no client is harmed.  And it is now clear that attorneys (at least in smaller firms) can be disciplined for not catching misappropriations in their escrow accounts, even if they had delegated the management of those accounts to another partner or a non-lawyer bookkeeper.

Tip:  The treatment of advance retainers in New York differs from other states.  In New York, lawyers are permitted to treat advance retainers as the lawyer's funds, rather than client funds. See NYS Bar Op. 816 (2007). Such retainers do not need to be placed in an escrow account until the lawyer bills time against the funds.  They can be immediately placed in the lawyer's operating account or other non-escrow account.  This reduces the risk that the lawyer will inadvertently commingle or convert client funds.   To avoid confusion, the lawyer should specify in the retainer agreement that the advance retainer will be placed in the lawyer's operating account or other non-escrow account.  Any unused portion of the advance retainer must still be refunded to the client.

3.    You May Have a Duty to Disclose Your Client's Perjury or Other Fraud on the Court

Most lawyers believe that their duty of confidentiality is sacrosanct. They may not know, however, that a change in the ethics rules requires them to take "reasonable remedial measures" to correct false statements made to a tribunal by their client or another witness, "including, if necessary, disclosure to the tribunal." NY Rule 3.3(a)(3) & (b) (emphasis added). This obligation trumps the duty of confidentiality. See NY Rule 3.3(c).  In addition, a 2013 ethics opinion has concluded that the duty to correct false statements lasts beyond the conclusion of the legal proceeding. See NYCBA Ethics Op. 2013-2.  Over the past year, we have seen a growing number of lawyers faced with the Hobson's choice of having to disclose their client's fraud to a tribunal or risk disciplinary charges.

Tip:  Before the rule change, lawyers would sometimes deal with this problem simply by withdrawing from the representation.  Many lawyers (particularly older ones) still think that is a sufficient remedy.  Unfortunately, that may no longer be the case, particularly where a trial is nearing or ongoing. Before disclosing any client confidences, however, a lawyer faced with this dilemma should seek independent ethics advice.

You can read the full alert here.

If you would like to receive our ethics alerts in 2014, please e-mail me at [email protected]

Law Professor Files Ethics Complaint Against Scamblogger

As detailed here, after being subjected to a series of attacks online by a scamblogger named Dybbuk, Professor Nancy Leong was able to ascertain his identity and sought to contact him.  Unsurprisingly, Dybbuk, who is apparently a federal public defender in his late 40s, declined to speak with her.  Professor Leong  then filed an ethics complaint against him for his allegedly sexist and racist online comments.  Professor Leong claims to have consulted with ethics experts before doing so.     

This story is interesting for a number of reasons.  First, it tends to suggest that a movement that has been successful in warning young people that law school might not be a safe investment has to some extent been hijacked by individuals with personal axes to grind.  Dybbuk is not a marginal figure in the scamblog world, and the eponymous Paul Campos has written not one but two posts criticizing Professor Leong.  One of his posts claims that Professor Leong is "[trying] to leverage phony claims of racial victimization" into a job with a higher-ranking law school.   Professor Bartow rightly takes him to task here.  

Second, I think this story reflects that the legal world has too quickly forgotten the Autoadmit controversy, which Brad had an excellent post about here.  The creators of Autoadmit were not responsible for most of the offensive posts on their site, just as Dybbuk did not post some of the worst claims about Professor Leong.  But it is unrealistic to expect state bars and legal employers to ignore the online conduct of current and future lawyers.  

New York, for example, prohibits attorneys from engaging "in any other conduct that adversely reflects on the lawyer’s fitness as a lawyer."  If a lawyer spends his free time posting sexist and racist thoughts about other lawyers online (if this is what Dybbuk was in fact doing), it would not be unreasonable for a state bar to believe that he is not fit to practice law, and individuals have been denied bar admission on similar bases.  See also MR 8.4, cmt. 3.  If such comments were posted during work hours, one would also expect some action from his employer.  This is not to suggest that any consequences are warranted in this case, but online anonymity is not and should not be sacrosanct.   

[Disclosure: I do not know and have not consulted with any of the individuals named in this post].

 

(off-topic) The future of law school libraries

Jim Milles, a fomer law librarian (and current professor) at SUNY Buffalo who also teaches PR, wrote a new paper, discussed at the WSJ Law Blog, about what he sees as the bleak future of law school libraries. Abstract and excerpt:

The dual crises facing legal education—the economic crisis affecting both the job market and the pool of law school applicants, and the crisis of confidence in the ability of law schools and the ABA accreditation process to meet the needs of lawyers or society at large—have undermined the case for not only the autonomy, but the very existence, of law school libraries as we have known them. Legal education in the United States is about to undergo a long-term contraction, and law libraries will be among the first to go. A few law schools may abandon the traditional law library completely. Some law schools will see their libraries whittled away bit by bit as they attempt to answer “the Yirka Question” in the face of shrinking resources, reexamined priorities, and university centralization. What choices individual schools make will largely be driven by how they play the status game.

“Legal education in the United States is about to undergo a long-term contraction, and law libraries will be among the first to go.”

“Going forward, it will not be law libraries,” Mr. Milles concludes. “Revenue-­‐generating departments such as development, alumni relations, and career services, and perhaps status-­‐enhancing programs such as law journals, interdisciplinary programs, and research centers, will be strengthened, while revenue-­‐draining departments will be cut.”

[edited in light of Jim's comment below.]

SDNY reforms its case assignment system; gives litigants a chance to challenge assignments

New York Times. (h/t: How Appealing)

In earlier posts about the reassignment of USDC Judge Shira Scheindlin, I linked to an article by Katherine Macfalane presenting what I thought was a convincing (if not devastating) critique of how the SDNY had been mis-handling the issue of case assignments, related cases, etc. Now comes news that the SDNY had been busy revising its rules, presumably in light of the NYT article on this issue back in late Spring. Better late than never. (Btw, doesn't this development take a lot of steam out of the argument from Scheindlin's supporters that the Second Circuit panel's actions were illegitimate because even the litigants had not challenged the assignments? (On top of that, the City had orally urged the judge not to treat one of the stop-and-frisk cases as related, even though the rules did not give litigants any vehicle for making such challenges.)) Excerpt:

The new rules require any party that seeks to mark a lawsuit as “related” to another case before a judge to file a statement “stating clearly and succinctly the basis for the contention.”

Any other party may object to a claim of relatedness, in writing, the rules say.

Although a judge being asked to accept a “related” case will still make that decision alone, the court’s three-judge assignment committee, including the chief judge, will review every case where a claim of relatedness has been made, Chief Judge Loretta A. Preska said in an interview on Monday.

If the assignment committee disagrees with the judge’s decision to accept a case as related, the matter will be assigned randomly to a new judge, the rules say.

“We wanted to maximize the randomness of the assignment of cases — we wanted to regularize the process,” Judge Preska said, adding, “We also wanted to increase transparency.”

[edited and revised since posting]

Professor Rick Sander wins 7-0 at Supreme Court of California in first phase of litigation over access to bar passage data

Professor Rick Sander, of UCLA, has been seeking access to data that may bear on his "mismatch" thesis regarding effects of affirmative action. The State Bar of California denied a request by Sander for data regarding bar passage. The Supreme Court of California just ruled 7-0 in the suit brought by Sander (and others) over denial of access to the data.

But this is just the first phase of the litigation. The matter is being remanded to the trial court to examine how, if at all, the requested information can be disclosed without violating the confidentiality of individual bar applicants. In the now-completed first phase, the State Bar's position seemed contrived to me and the unanimous result seems to confirm that. It will be interesting to see how the Bar reacts in the second phase. I presume that the parties can negotiate a resolution if they care to. Opinion below; updates to follow. Excerpts below.

Download S194951

The public does have a legitimate interest in the activities of the State Bar in administering the bar exam and the admissions process. In particular, it seems beyond dispute that the public has a legitimate interest in whether different groups of applicants, based on race, sex or ethnicity, perform differently on the bar examination and whether any disparities in performance are the result of the admissions process or of other factors. Indeed, the State Bar uses the database to prepare a statistical analysis of the bar exam that reports the bar passage rates for various categories of applicants. Public access to the admissions database used by the State Bar to evaluate its admissions process would allow the public to independently ascertain and evaluate that process. Therefore, the public‟s interest in the information in the database would contribute to the public‟s understanding of the State Bar‟s admissions activities, and is sufficient to warrant further consideration of whether any countervailing consideration weighs against public access.

.....

The parties disagree concerning whether the information at issue can be provided in a form that does not breach the State Bar‟s promises of confidentiality. The State Bar contends that “the commonly held assumption that any data can be successfully [de-identified] as suggested by [plaintiffs], so that it can be made available to the public without risk that individual people‟s information be revealed, has proved to be false.” Plaintiffs counter that “[d]isclosure of de-identified information regarding individuals obtained from government databases is commonplace. . . . The routine release of such data refutes the claim that such information cannot be disclosed without undue risk of „re-identification‟ of those individuals.” This issue involves disputed questions of fact that we are not currently in a position to decide. By the parties‟ stipulation, litigation of this issue was reserved for the second phase of trial and may be decided in the trial court upon remand.

Prosecutorial tweeting mid-trial: just another medium for building the public record?

St. Louis Post-Dispatch. (h/t: How Appealing) We've seen ethics issues arise from careless use of social media, but it appears that the prosecutor believes that tweeting during trial is an acceptable aspect of adding to the public record during trial. She posted this response to the appellate ruling and was quoted, "“I am confident that continued use of social media by the Circuit Attorney’s Office will balance the competing rights of all citizens.” I don't want to be a Luddite, but mid-trial tweeting by the prosecutor doesn't make me happy.

The court of appeal affirmed the conviction but noted its concerns about the tweeting.

Mark O'Mara responds to news stories about Florida bar investigation

Mark O'Mara, the criminal defense lawyer who represented George Zimmerman has responded to news accounts that the Florida bar is investigating the defense's social media strategy and its fundraising site. O'Mara's statement is here. The statement includes a reference to a Slate article quoting our own Stephen Gillers.

As ethics guru and New York University law professor Stephen Gillers puts it, “Before the Web, defense lawyers played whack a mole trying to counter not only the adverse publicity leaked by law enforcement (not necessarily the prosecutor), but the stories reporters find on their own.”

I was impressed by O'Mara's innovate strategy to combat relentless media stories about his client. (I was quoted in this article.)

"Florida Allows Competitive Keyword Advertising By Lawyers"

Eric Goldman, writing at Forbes, explains how the Florida bar was convinced that its proposed regulation of keyword advertising was misguided. (Kudos to Eric.) Excerpt:

In March, the Florida State Bar’s Standing Committee on Advertising proposed an ethics opinion (Proposed Advisory Opinion A-12-1). The opinion was designed to help Florida lawyers understand what they could ethically do with online marketing. It targeted a melange of now-outdated search engine optimization (SEO) practices, such as hidden text and keyword metatags. It also restricted competitive keyword advertising–”[l]awyers may not purchase the name of another lawyer or law firm as a key word in search engines”–even though it’s becoming increasingly clear over the years that such competitive keyword advertising purchases are legal and legitimate (see, e.g., Habush v. Cannon). Rather than enlighten attorneys about their ethical obligations, this proposal was both hopelessly antiquated and potentially detrimental to legitimate competition.

ABA releases stats on 1L enrollment for Fall 2013

Lots of commentary about the new stats, which show a continuing decline in enrollment. TaxProf, Excess of Democracy, Tuition Bubble, Lawyers, Guns & Money and others are dissecting the news. Given the huge upsurge in the number of law schools, we now have the smallest number of students per law school in 45 years! That's a lot of salaries and overhead going to teach the same number of students we had some time ago.