CURRENT ETHICAL ISSUES
FOR LEGAL PROFESSIONALS
Rob Charles
(520) 629-4427 (direct line)
(520) 879-4705 (fax)
RCharles@LRLaw.com
A Legacy of Integrity and Trust
Arizona Ethics Opinion on Restrictions on
Rights to Practice and Departing Lawyers
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• The State Bar of Arizona Committee on Rules of
Professional Conduct (Ethics Committee) issues formal
opinions that represent non-binding advice on ethics
issues for Arizona lawyers.
• In Op. 09-01, the Committee discussed the issue of a
firm that employs associate lawyers using a contract that
would require the departing associate to pay a flat
amount to the law firm for each instance in which the
departing associate continues to represent a client that
had previously been represented by the law firm.
Op. 09-01 (cont.)
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• Because ER 5.6 states that “a lawyer shall not participate
in offering or making: . . . a partnership, shareholders,
operating, employment or other similar type of
agreement that restricts the right of a lawyer to practice
after termination of the relationship, except an
agreement concerning benefits upon retirement . . .” the
restriction was unethical. Firms may not impose
financial disincentives upon a withdrawing way’s right to
represent a client, as the decision to retain counsel is
the client’s decision, not the law firm’s.
Termination of Representation;
Withdrawal; Fees; Confidentiality
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• In Op. 09-02, the Committee discussed issues arising
upon the termination of the lawyer/client
representation. Among other topics, ER 1.16 describes
the circumstances under which a lawyer may or shall
withdraw from client representation. In litigation, a
court may have jurisdiction to decide whether a lawyer
is entitled to withdraw or not.
09-02 (cont.)
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• The obligation to maintain client information
confidential as provided in ER 1.6 does not end upon
termination of the representation. A lawyer may not
disclose client confidential information simply because
the representation is terminated. In fact, ER 1.9
explicitly imposes duties on a lawyer with respect to
former clients, including the obligation to refrain from
using client confidential information to the disadvantage
of the former client or to reveal client confidential
information except as provided in the Rules. ER 1.9(c).
09-02 (cont.)
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• If the termination of representation is as a result of a
controversy between the lawyer and the client, ER
1.6(d)(4) may allow the lawyer to disclose client
confidential information “to respond to allegations in
any proceeding concerning the lawyer’s representation
of the client.” However, such disclosures can be made
only “to the extent the lawyer reasonably believes
necessary.” The lawyer may not simply disclose all client
confidential information in the event of a dispute with a
former client.
09-02 (cont.)
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• If the termination of representation arises because of a
dispute over the client’s providing fraudulent evidence,
the lawyer must consider ER 3.3(a)(3) and decide
whether disclosure is necessary if the client will not
remedy the problem of having provided false evidence.
09-02 (cont.)
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• Sometimes disputes arise in determination of
representation over the fee for withdrawal related work.
Legal fees must be reasonable. See ER 1.5. The ethics
opinion notes that most authorities believe the client
should not be charged for most withdrawal-related
work, in order to avoid chilling the client’s ability to
retain counsel of choice.
09-02 (cont.)
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• The withdrawing lawyer has other obligations under ER
1.9, including with respect to conflicts of interest. ER
1.16(d) addresses the requirement that the lawyer
provide the client with a copy of the file without charge,
unless the lawyer had previously provided the client
with a copy of the file.
Trust Accounts;
Safekeeping Property
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• There are lawyers licensed in Arizona who have offices in Arizona
and elsewhere. In the multistate practice of law, some firms
would prefer to keep their bank accounts in a central bank, rather
than in each jurisdiction where the law firm or lawyer practices.
The Arizona Committee explained in Op. 09-03 that client funds
may be held in the home office’s trust account, but that the law
firm must continue to comply with the trust account rules. In
addition, payment of sums to the Arizona Foundation for Legal
Services and Education as required under Rule 43, Ariz. R. Civ. P.,
requires payment to the Arizona entity. Consolidating bank
accounts is not a basis to excuse the payment to the AZFLSE.
Confidentiality; Maintaining Client
Files; Electronic Storage; Internet
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• Lawyers increasingly are attempting to maintain files that
have less paper, with a goal of becoming “paperless.”
Related to that goal is maintaining client files in
electronic form. Communications with clients are
increasingly electronic, through email and the internet,
rather than through meetings and mail.
09-04 (cont.)
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• The lawyer’s ethical obligation is to keep client information confidential,
and to take reasonable steps to make sure that client files are not
disclosed to third parties. See ER 1.6; Ethics Op. 05-04. In Op. 09-04,
the Committee talked about some of the steps that a competent and
reasonable attorney might take in order to maintain client
confidentiality, particularly of client files. The facts of the opinion
suggested extreme efforts at maintaining security by the lawyer,
including with respect to emails with the client. These protections
included password protections of the electronic file storage, for emails,
and for information that was available to the client through a lawyer
provided website. Those protections, while extensive, were not in the
opinion of the Committee, the minimum standard. Rather, they
represented one example of appropriate safeguards.
Confidentiality of Work Email
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•
Ordinarily, a communication between a client and lawyer for a purpose of obtaining
legal advice if made with an expectation of privacy is protected by the attorneyclient privilege. Problems can arise where a client uses non-confidential means to
communicate with the lawyer. For example, standing in a crowd, talking to a lawyer,
speaking loud enough for the crowd to hear, may be a waiver of the privilege. In a
less obvious manner, using non-confidential email to communicate with the lawyer
may result in a loss of the privilege. In Convertino v. United States Department of
Justice, No. 04-0236 (D.D.C. Dec. 10, 2009), a former government lawyer argued
that his communications sent from work to his personal counsel fell within the
attorney-client privilege. Because the information was sent from a work email,
there maybe concerns that the employee’s employment agreement or other
applicable rules may treat such information as not confidential, particularly as
against the employer. The District Court, however, in considering a request by a
third party for disclosure of the former prosecutor’s emails, found that the client
reasonably expected the emails with personal counsel to remain confidential.
Confidentiality of Work Email (cont.)
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• A New York bankruptcy court had identified factors to be applied
in determining whether the client intended to communicate in
confidence and whether that intention was objectively reasonable.
– Does the corporation maintain a policy banning personal or
other objectionable use,
– Does the corporation monitor the use of the employee’s
computer or email,
– Do third parties have a right of access to the computer or
emails, and
– Did the corporation notify the employee, or was the employee
aware, of the use and monitoring policies? In Re Asia Global
Crossing, Ltd., 322 B.R. 247, 258 (S.D.N.Y. 2005).
Confidentiality of Work Email (cont.)
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• In the particular case, the lawyer reasonably expected
his email with his personal counsel to remain
confidential.
Confidentiality of Work Email (cont.)
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•
•
Similarly, the Bankruptcy Court in Global Crossing had to consider whether corporate
officers and a consultant’s communications involving an attorney were protected by the
privilege. The former employees had communicated with their personal counsel
through use of company email. The company’s bankruptcy filing had not gone well, and a
trustee was appointed, who then had control over the office email systems. The former
employees sought to protect their email, as well as certain confidential documents,
which had been left at the company offices under the control of the trustee.
The trustee claimed that by using the corporate email system, the employees waived
any privilege. The court applied federal common law to find that the issue was one of
intent, but that the intent had to be reasonable. After considering the circumstances,
the court could not conclude as a matter of law that use of the company email system
waived the privilege. Nor did leaving documents in the company offices when directed
to vacate the offices by the trustee represent a waiver of the privilege. In contrast,
documents that would have been otherwise privileged but which were shared with a
consultant no longer remained privileged. One of the hallmarks of the attorney-client
privilege is that the information not be shared with persons outside the privilege. The
consultant clearly was neither an attorney nor the client.
Abusive Lawyer Conduct
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• A North Carolina lawyer was recommended for a 90-day
suspension from the practice of law, with a subsequent two-year
probation period, for sending 53 threatening and abusive
voicemail messages to the successor administrator of his father’s
estate, the attorney for the administrator, and the ex officio judge
of the Superior Court who is responsible for overseeing the
estate. The Review Department of the California State Bar Court
found that the lawyer’s behavior was so abusive as to constitute
acts of moral turpitude as well as threats to gain advantage in a
civil dispute, disrespect the courts and judicial officer. The
probation recommendation included extensive training and
counseling to help the lawyer avoid future misconduct.
Supervised Lawyer Responsible
for Firm Over Charges
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• In Disciplinary Council v. Smith, 124 Ohio St. 3D 49, 2009Ohio-5960 (2009), the Ohio court disciplined a lawyer
who represented clients in a personal injury matter for
excessive charges by the law firm. The law firm
attempted to charge a contingent fee from a client on
insurance coverage that New York law prohibits
contingent fees on. Other aspects of the firm’s billing
were excessive.
Disciplinary Council v. Smith (cont.)
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• The lawyer argued that the owner of the firm, not the lawyer, was responsible
for the excessive billings. The court responded in part, “Respondent’s counsel
stated at oral argument that respondent prepared the disbursement sheets as a
scribe would, following the dictates of his superior. Actually, respondent is not
a scribe, but an attorney, responsible for zealously representing his client’s
interests.” Id. ¶ 17. The supervised lawyer could not simply rely on assurance
from the firm’s owner that the owner would look into the responsibleness or
legality of the firm’s charges. To the extent that the lawyer’s explanation was
that he was unaware of the limitation of contingent fees on this particular
source of personal injury recoveries, the court agreed that the lawyer’s
position demonstrated he was not competent to provide the client the advice
he was providing, due to lack of education or training.
• The court determined to issue a public reprimand about the lawyer’s conduct.
Conflict Between Lawyer and Client
Concerning the Lawyer’s Own Malpractice
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• ER 1.7 and other rules require that lawyers avoid
conflicts of interest, including with the lawyer’s own
interest. Where a lawyer may have committed mistake, a
conflict can develop between the lawyer’s interests with
respect to the mistake, or alleged malpractice, and the
client’s interest.
Minn. Op. No. 21 (cont.)
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• The Minnesota Ethics Committee Op. No. 21 addresses this issue.
It describes an obligation of the lawyer to communicate with the
client under Rule 1.4. The opinion directs the lawyer who is
aware of a non-frivolous malpractice claim by a current client that
materially affects the current client’s interests, to inform that
client about that conduct to the extent necessary in order to
keep the client reasonably informed about the status of the
representation, to make informed decisions regarding the
representation, and to be sure that the client is properly informed
about the means by which the client’s objectives are to be
accomplished. There is no privilege or protection against self
incrimination that would allow the lawyer not to report a
possible malpractice claim to the client.
Disclosure of Conflicts Information When
Lawyers Move Between Law Firms
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• The ABA Standing Committee on Ethics and
Professional Responsibility issued its formal opinion 09455 (2009). This opinion addresses the issue of client
confidentiality in the context of a lawyer changing firms.
ABA Op. 09-455 (cont.)
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• On the one hand, a lawyer has an obligation to maintain
client information confidential under ER 1.6.
• On the other, the lawyer and a new law firm have the
obligation to avoid conflicts of interest under ER 1.7.
• The question is the extent to which the lawyer may
disclose information about pending representation in
order to check there are conflicts caused by changing
firms.
ABA Op. 09-455 (cont.)
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• The ABA opinion argues that since a conflicts analysis is necessary in order
to evaluate the impact of the lawyer changing firms, at least some limited
use of confidential information must be allowed in order to check for
conflicts.
• However, only minimal information should be provided to the new firm for
the conflict check.
• Nor should disclosing such information compromise the attorney-client
privilege or otherwise prejudice the client.
• If it appears that there may be a conflict and a question whether there is a
“substantial relationship” between two matters, the lawyer may not
disclose client confidential information to the other firm in order to
evaluate the facts of the conflict.
• Using a third party as conflicts counsel would not solve the problem, as the
information would be disclosed to the third party.
• Finally, the lawyers should be sensitive to the timing issues involved in
obtaining client consent to the disclosure of confidential information for
conflict checking purposes.
Courtroom Attire
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• A New York Lawyer argued that his right to free speech and his
liberty interest in his own personal appearance permitted him to
wear jeans and a hat in court.
• The New York State judicial system does not permit this type of
attire, even for pro se litigants.
• The United States District Court held that there was no
constitutional right to violate the state court rules, and that the
obligation to maintain courtroom civility prevailed over the
pro se lawyer’s wardrobe desires.
Bank v. Katz, No. 1:08-cv-01033 (E.D.N.Y., September 24, 2009).
Rob Charles
www.lewisandroca.com
Rob Charles is a partner with Lewis and Roca LLP, where
he represents clients in business bankruptcy cases,
commercial lawsuits and business transactions. He
primarily represents both secured and unsecured
creditors, as well as debtors, in all aspects of Chapter 11
business bankruptcy cases before the bankruptcy courts
of Arizona and Nevada and on appeal.
Mr. Charles is a member and past chair of the State Bar of
Arizona Committee on Rules of Professional Conduct;
and a fellow in the American College of Bankruptcy and
is an adjunct professor of law at the University of
Arizona College of Law.