The Coming Changes to Your Duties
to Safekeep Client Property
Christian A. Stiegemeyer | Director of Risk Management
Christina Lewis Abate | Risk Manager
THE QUIZ
THE QUIZ
1. But I have a Written Contract?
You accept a contested probate case on a contingent fee basis.
Your fee agreement states that if the client discharges the firm
prior to the completion of the matter or decides not to pursue the
matter, the client will immediately pay the accrued hourly rate
incurred during the representation to that point. The conversion
clause:
A. Is enforceable as a matter of contract law.
B. Is enforceable so long as the hourly rate fee is reasonable.
C. Is enforceable in quantum meruit.
D. Unenforceable.
THE QUIZ
2. This Land is Your Land
You represent a real estate developer. Over the course of several years you
draft documents for successive entities of which the developer and investors
are partners. The investors never sign an engagement letter or pay you a fee.
After the development goes bankrupt and the investors lose $20 million, they
sue for malpractice. On the question of whether you had an A/C relationship
with the investors, the jury at your malpractice trial should:
A. Find an ACR because you did not have the investors sign
a non-engagement letter.
B. Find there was no ACR because the investors never paid you a
fee.
C. Find there was no ACR because it is not reasonable for the
investors to believe you represented both them and the
developer.
D. Find there was no ACR because the investors did not sign an
engagement letter or fee contract.
THE QUIZ
3. Practice, practice, practice?
You have learned that Adverse Counsel keeps clients’ notarized
signatures on file and subsequently attaches them to discovery
documents or documents to be filed in court. It is disputed whether the
signer actually reviews the documents prior to the notarized signature
being attached. Regarding this practice, you:
A. Don’t care what he does with his clients.
B. Have a duty to file a report with the OCDC after counseling
and obtaining your client’s consent.
C. Think it is a nifty time-saving idea and look into incorporating
it into your practice.
D. Do not have a duty to file a report with the OCDC.
THE QUIZ
4. I was Just Trying to be Sociable
After prevailing at trial, you are so excited you send out the following
Facebook post, “Another million dollar verdict! We got the lying scum!!
Who wants to be next?” This goes to relatives, friends, colleagues,
acquaintances, some clients, and other people you’ve talked to about
possibly representing in similar actions against this adverse party. The
post:
A. Violates MRPC 4-7.1(c).
B. Violates MRPC. 4-7.3(c)(5).
C. Violates MRPCs 4-7.1(c) and 4-7.3(c)(5)
D. Is permissible because your Facebook site is strictly personal
and not linked to any legal sites.
THE QUIZ
5. Bar None
You are defending a bar in a dram-shop action in which an over-served drunk
customer shot and killed another patron. Because the law is unsettled on the
question of whether you can make the shooter a party to the suit for allocation of
fault, you decide not to include him. The jury finds the bar not liable for the
shooter’s actions, but the judge directs a verdict against the bar for $950,000.
The bar sues you for malpractice, claiming the shooter should have been
included. At your malpractice trial on the issue of the standard of care the jury
should find you:
A. Met the standard because of the unsettled nature of the law.
B. Met the standard because bringing the shooter into the action exposed your
client to a malicious prosecution claim.
C. Met the standard because bringing the shooter into the action exposed your
client to an abuse of process claim.
D. Failed to meet the standard because the prudent course of action would be to
add the shooter as a defendant for fault allocation and preserve the issue.
THE QUIZ
6. It Never Occurred to Me
You draft a PoA for Client which includes this language: “The holder of this
Power of Attorney shall also file an annual account by January 31st of each
year and deliver it to [YOUR NAME HERE],attorney, or any attorney licensed
in this state, designated by me or by the holder of this Power-of-Attorney for
safe-keeping.” The holder does not file the annual account but does steal
$800,000 of Client’s money. Client sues you for malpractice. The above
language should be held to:
A. Create a duty in you to follow-up and encourage the holder to comply
with the scheme.
B. Create no duty beyond exercising appropriate care in drafting the
PoA.
C. Create the duty to be a guardian of Client’s financial well-being.
D. Create a duty of being a general overseer of the PoA’s holder’s
conduct.
THE QUIZ
7. I thought I updated that?
After changing firms, the notice of a federal district court’s decision is
forwarded to your old email address. As a result, your notice of appeal is filed
two weeks late. The district court, finding that all three factors necessary to
reopen the time to appeal under Rule 4(a)(6) are present, grants additional
time. In reviewing the decision the Circuit Court should:
A. Affirm the district court on the grounds that you did not timely
receive notice.
B. Find the district court did not abuse its discretion because all
factors of Rule 4(a)(6) were in fact met.
C. Affirm the district court because the law favors judgment on the
merits.
D. Reverse the district court because failure to receive the notice
“was entirely and indefensibly [your] fault.”
THE QUIZ
8. Again with the Social Media
During a dissolution representation you Facebook “friended” a client.
Several months after the resolution, you receive a Facebook
notification that the client has posted on her page. You’re surprised to
see it is a disgruntled rant with the client claiming you did little work and
way overcharged her. Not taking that lying down, you post on her page
a copy of a memo you filed seeking recovery of your fees from the
Husband, which was denied. Posting the memo was:
A. Permissible because the client waived attorney-client privilege when
she alleged you charged an unreasonable fee.
B. A permissible “use” under Rule 4-1.9(c)(1) because the memo was
“generally known.”
C. Permissible under Rule 4-1.6(b)(3) “to establish a claim or defense on
behalf of the lawyer in a controversy between the lawyer and the
client.”
D. Impermissible.
THE QUIZ
9. Last Social Media Question
As part of your investigation into a represented adverse party, you view their Linked-In
page to see what is there. The page has no password protection. The AP has enabled a
feature of the system that allows them to “see” who has come onto their page. Because
you are a Linked-In user also, you are aware of this feature. Looking at the Linked-in
page:
A. Is an unethical communication under Rule 4-4.2
Communication with Person Represented by Counsel.
B. May be an unethical communication under Rule 4-4.2
Communication with Person Represented by Counsel.
C. Is ethical per Rule 4-4.2 because the page was not password
protected.
D. Ethical pursuant to M.R.P.C. 4-3.2 Expediting Litigation.
THE QUIZ
10. Dating Service
In the ten year period 2002-2011, the most frequently reported “Error or Omission”
malpractice category cited in the 2011 Legal Malpractice Insurance Report issued by the
Missouri Department of Insurance was:
A. Fail to File Documents with no Deadline.
B. Failure to Calendar Properly.
C. Failure to React to Calendar.
D. Fail to Ascertain a Deadline Correctly.
THE QUIZ ANSWERS
THE QUIZ
1. But I have a Written Contract?
You accept a contested probate case on a contingent fee basis.
Your fee agreement states that if the client discharges the firm
prior to the completion of the matter or decides not to pursue the
matter, the client will immediately pay the accrued hourly rate
incurred during the representation to that point. The conversion
clause:
A. Is enforceable as a matter of contract law.
B. Is enforceable so long as the hourly rate fee is reasonable.
C. Is enforceable in quantum meruit.
D. Unenforceable.
THE QUIZ
1. But I have a Written Contract?
You accept a contested probate case on a contingent fee basis.
Your fee agreement states that if the client discharges the firm
prior to the completion of the matter or decides not to pursue the
matter, the client will immediately pay the accrued hourly rate
incurred during the representation to that point. The conversion
clause:
ANSWER: D. Unenforceable.
See, Guy Bennett Rubin PA v. Guettler, Fla. Dist. Ct. App. 4th Dist., No. 4D09-5055,
10/5/11.
“A termination-of-services clause in a contingency-fee agreement, which provides for
the client to pay the discharged law firm for all services rendered up through the date of
termination at the prevailing hourly rate for firm members, if the client abandons or
dismisses the claim, violates rule 4-1.5 on its face.”
Such clauses are unenforceable as a matter of public policy…because they have the
effect of intimidating the client into not exercising the right to discharge counsel or drop
the case.
THE QUIZ
2. This Land is Your Land
You represent a real estate developer. Over the course of several years you
draft documents for successive entities of which the developer and investors
are partners. The investors never sign an engagement letter or pay you a fee.
After the development goes bankrupt and the investors lose $20 million, they
sue for malpractice. On the question of whether you had an A/C relationship
with the investors, the jury at your malpractice trial should:
A. Find an ACR because you did not have the investors sign
a non-engagement letter.
B. Find there was no ACR because the investors never paid you a
fee.
C. Find there was no ACR because it is not reasonable for the
investors to believe you represented both them and the
developer.
D. Find there was no ACR because the investors did not sign an
engagement letter or fee contract.
THE QUIZ
2. This Land is Your Land
You represent a real estate developer. Over the course of several years you
draft documents for successive entities of which the developer and investors
are partners. The investors never sign an engagement letter or pay you a fee.
After the development goes bankrupt and the investors lose $20 million, they
sue for malpractice. On the question of whether you had an A/C relationship
with the investors, the jury at your malpractice trial should:
ANSWER: A. Find an ACR because you did not have the
investors sign a non-engagement letter.
Holland & Knight failed to convince a Los Angeles jury last month that it
didn't represent the plaintiffs…in their real estate deals with [an] Atlanta
developer and returned a verdict against the law firm for $34.5 million.
http://www.dailyreportonline.com/PubArticleDRO.jsp?id=1202555431438&Holland_amp_Knights_lesson_Get_a_disclaimer_&slret
urn=20130014130702
THE QUIZ
3. Practice, practice, practice?
You have learned that Adverse Counsel keeps clients’ notarized
signatures on file and subsequently attaches them to discovery
documents or documents to be filed in court. It is disputed whether the
signer actually reviews the documents prior to the notarized signature
being attached. Regarding this practice, you:
A. Don’t care what he does with his clients.
B. Have a duty to file a report with the OCDC after counseling
and obtaining your client’s consent.
C. Think it is a nifty time-saving idea and look into incorporating
it into your practice.
D. Do not have a duty to file a report with the OCDC.
THE QUIZ
3. Practice, practice, practice?
You have learned that Adverse Counsel keeps clients’ notarized
signatures on file and subsequently attaches them to discovery
documents or documents to be filed in court. It is disputed whether the
signer actually reviews the documents prior to the notarized signature
being attached. Regarding this practice, you:
ANSWER: B. Have a duty to file a report with the OCDC after
counseling and obtaining your client’s consent.
Informal Opinion: 970029
QUESTION: Attorney is involved in a case in which opposing counsel has admitted to keeping notarized signatures of
clients on file and subsequently attaching them to discovery documents or documents to be filed in court. The facts are
disputed whether the signer actually reviewed the documents by fax or mail prior to the notarized signature being
attached. Has opposing counsel violated the rules?
ANSWER: Advisory opinions are not issued on the conduct of an attorney other than the one requesting the opinion.
However, based on the information Attorney has provided, Attorney has a duty to report the information, including the
name of the attorney, the case, etc., to the Office of Chief Disciplinary Counsel. The duty to report is found in Rule 48.3(a). Because Attorney has a duty under the Rules to provide this information, Attorney may submit it in the form of a
"report" or a "complaint." If Attorney submits a complaint, Attorney will be considered the complainant in the same
manner as anyone else who files a complaint. If Attorney submits a "report," Attorney will not be considered or
identified as the complainant. Attorney also will not be notified of the disposition of the matter.
THE QUIZ
RULE 4-8.3: REPORTING PROFESSIONAL MISCONDUCT
(a) A lawyer who knows that another lawyer has committed a violation of the Rules of Professional Conduct that raises a
substantial question as to that lawyer's honesty, trustworthiness or fitness as a lawyer in other respects shall inform the
appropriate professional authority.
COMMENT
[1] Self-regulation of the legal profession requires that members of the profession initiate disciplinary investigation when they
know of a violation of the Rules of Professional Conduct. Lawyers have a similar obligation with respect to judicial
misconduct. An apparently isolated violation may indicate a pattern of misconduct that only a disciplinary investigation can
uncover. Reporting a violation is especially important where the victim is unlikely to discover the offense.
[2] A report about misconduct is not required where it would involve violation of Rule 4-1.6. However, a lawyer should
encourage a client to consent to disclosure where prosecution would not substantially prejudice the client's interests.
[3] If a lawyer were obliged to report every violation of the Rules, the failure to report any violation would itself be a
professional offense. Such a requirement existed in many jurisdictions but proved to be unenforceable. This Rule 4-8.3 limits
the reporting obligation to those offenses that a self-regulating profession must vigorously endeavor to prevent. A measure of
judgment is, therefore, required in complying with the provisions of this Rule 4-8.3. The term "substantial" refers to the
seriousness of the possible offense and not the quantum of evidence of which the lawyer is aware. A report should be made
to the bar disciplinary agency unless some other agency, such as a peer review agency, is more appropriate in the
circumstances. Similar considerations apply to the reporting of judicial misconduct.
RULE 4-8.3: REPORTING PROFESSIONAL MISCONDUCT
(c) This Rule 4-8.3 does not require disclosure of information otherwise protected by Rule 4-1.6 or information gained by a
lawyer or judge while participating in an approved lawyers assistance program.
RULE 4-1.0: TERMINOLOGY
(f) "Knowingly," "known," or "knows" denotes actual knowledge of the fact in question. A person's knowledge may be inferred
from circumstances.
THE QUIZ
What Must Be Reported
Rule 4-8.3(a) does not require lawyers to report every violation but does require reporting
when the violation raises a substantial question about the subject lawyer's honesty,
trustworthiness, or fitness as a lawyer.
The following conduct has, under certain discreet facts, been deemed as mandatorily
reportable:
Lying or Stealing
Inaccurate Advertising
Conflict of Interest
Unreasonable Fee
Improper Settlement Offer
Violation of Confidentiality
Failure to Correct Defective Court Order
Unauthorized Practice
THE QUIZ
4. I was Just Trying to be Sociable
After prevailing at trial, you are so excited you send out the following
Facebook post, “Another million dollar verdict! We got the lying scum!!
Who wants to be next?” This goes to relatives, friends, colleagues,
acquaintances, some clients, and other people you’ve talked to about
possibly representing in similar actions against this adverse party. The
post:
A. Violates MRPC 4-7.1(c).
B. Violates MRPC. 4-7.3(c)(5).
C. Violates MRPCs 4-7.1(c) and 4-7.3(c)(5)
D. Is permissible because your Facebook site is strictly personal
and not linked to any legal sites.
THE QUIZ
4. I was Just Trying to be Sociable
After prevailing at trial, you are so excited you send out the following
Facebook post, “Another million dollar verdict! We got the lying scum!!
Who wants to be next?” This goes to relatives, friends, colleagues,
acquaintances, some clients, and other people you’ve talked to about
possibly representing in similar actions against this adverse party. The
post:
ANSWER: C. Violates MRPCs 4-7.1(c) and 4-7.3(c)(5)
MRPC 4-7.1(c) - A communication is misleading if it:
(c) proclaims results obtained on behalf of clients, such as the amount of a damage award or the
lawyer’s record in obtaining favorable verdicts or settlements, without stating that past results afford
no guarantee of future results and that every case is different and must be judged on its own merits;
MRPC 4-7.3(c)(5) - (c) A lawyer shall not send, nor knowingly permit to be sent, on behalf of the
lawyer, the lawyer’s firm, the lawyer’s partner, an associate, or any other lawyer affiliated with the
lawyer or the lawyer’s firm a written solicitation to any prospective client for the purpose of obtaining
professional employment if:
(5) the written solicitation vilifies, denounces or disparages any other potential party.
THE QUIZ
5. Bar None
You are defending a bar in a dram-shop action in which an over-served drunk
customer shot and killed another patron. Because the law is unsettled on the
question of whether you can make the shooter a party to the suit for allocation of
fault, you decide not to include him. The jury finds the bar not liable for the
shooter’s actions, but the judge directs a verdict against the bar for $950,000.
The bar sues you for malpractice, claiming the shooter should have been
included. At your malpractice trial on the issue of the standard of care the jury
should find you:
A. Met the standard because of the unsettled nature of the law.
B. Met the standard because bringing the shooter into the action exposed your
client to a malicious prosecution claim.
C. Met the standard because bringing the shooter into the action exposed your
client to an abuse of process claim.
D. Failed to meet the standard because the prudent course of action would be to
add the shooter as a defendant for fault allocation and preserve the issue.
THE QUIZ
5. Bar None
You are defending a bar in a dram-shop action in which an over-served drunk
customer shot and killed another patron. Because the law is unsettled on the
question of whether you can make the shooter a party to the suit for allocation of
fault, you decide not to include him. The jury finds the bar not liable for the
shooter’s actions, but the judge directs a verdict against the bar for $950,000.
The bar sues you for malpractice, claiming the shooter should have been
included. At your malpractice trial on the issue of the standard of care the jury
should:
Answer: D. Find you failed to meet the standard because the prudent course of
action would be to add the shooter as a defendant for fault allocation and
preserve the issue.
Attorneys are not immunized from malpractice liability simply because their purported
mistakes involved “unsettled” legal questions and the existence of unsettled law does not
excuse an attorney from fulfilling a duty of care.
“Where the law is unsettled there is at least a viable claim that the standard of care
requires the attorney to advise a client to follow the reasonably prudent course of action
in light of the uncertainty.”
(L.D.G. Inc. v. Robinson, 290 P.3d 215 (Alaska 2012).
THE QUIZ
6. It Never Occurred to Me
You draft a PoA for Client which includes this language: “The holder of this
Power of Attorney shall also file an annual account by January 31st of each
year and deliver it to [YOUR NAME HERE],attorney, or any attorney licensed
in this state, designated by me or by the holder of this Power-of-Attorney for
safe-keeping.” The holder does not file the annual account but does steal
$800,000 of Client’s money. Client sues you for malpractice. The above
language should be held to:
A. Create a duty in you to follow-up and encourage the holder to comply
with the scheme.
B. Create no duty beyond exercising appropriate care in drafting the
PoA.
C. Create the duty to be a guardian of Client’s financial well-being.
D. Create a duty of being a general overseer of the PoA’s holder’s
conduct.
THE QUIZ
6. It Never Occurred to Me
You draft a PoA for Client which includes this language: “The holder of this
Power of Attorney shall also file an annual account by January 31st of each
year and deliver it to [YOUR NAME HERE],attorney, or any attorney licensed
in this state, designated by me or by the holder of this Power-of-Attorney for
safe-keeping.” The holder does not file the annual account but does steal
$800,000 of Client’s money. Client sues you for malpractice. The above
language should be held to:
Answer: Create a duty in you to follow-up and encourage the holder to
comply with the scheme.
“We conclude that, by incorporating the inventory and accounting scheme into
the power of attorney, [attorney] expanded the scope of his representation of
[Client] beyond the mere drafting of legal documents. By setting up the
inventory and accounting scheme, [attorney] assumed a responsibility to
attempt to make it work. Thus, [attorney] had a duty to follow up with [holder]
regarding [the] obligation to complete an inventory and the annual accountings
and encourage [holder] to comply with the scheme.”
Svaldi v. Holmes, --- N.E.2d ----, 2012 WL 6738345 Ohio App. 10 Dist.,2012.
THE QUIZ
7. I thought I updated that?
After changing firms, the notice of a federal district court’s decision is
forwarded to your old email address. As a result, your notice of appeal is filed
two weeks late. The district court, finding that all three factors necessary to
reopen the time to appeal under Rule 4(a)(6) are present, grants additional
time. In reviewing the decision the Circuit Court should:
A. Affirm the district court on the grounds that you did not timely
receive notice.
B. Find the district court did not abuse its discretion because all
factors of Rule 4(a)(6) were in fact met.
C. Affirm the district court because the law favors judgment on the
merits.
D. Reverse the district court because failure to receive the notice
“was entirely and indefensibly [your] fault.”
THE QUIZ
7. I thought I updated that?
After changing firms, the notice of a federal district court’s decision is
forwarded to your old email address. As a result, your notice of appeal is filed
two weeks late. The district court, finding that all three factors necessary to
reopen the time to appeal under Rule 4(a)(6) are present, grants additional
time. In reviewing the decision the Circuit Court:
ANSWER: D. Reverse the district court because failure to receive
the notice “was entirely and indefensibly [your] fault.”
Communication Network International Ltd. v. MCI WorldCom Communications Inc. (In re WorldCom
Inc.), 2d Cir., No. 10-4588 (L), 1/24/13
“[L]itigants at all times have an ‘obligation to monitor the docket sheet to inform themselves of the
entry of orders they wish to appeal.'”
“Rule 4(a)(6) was not designed to reward such negligence,” and that “in light of the systemic
importance of the ‘sanctity of final judgments,’” reversal was required.
Rule 4(a)(6) permits reopening of the time to appeal so long as:
“The court finds that the moving party did not receive notice under Federal Rule of Civil Procedure 77(d) of the entry of the
judgment,”
“The motion is filed within 180 days after the judgment or order is entered or within 14 days after the moving party receives notice
under Federal Rule of Civil Procedure 77(d) of the entry, whichever is earlier,” and
“The court finds that no party would be prejudiced.”
http://www.courts.mo.gov/page.jsp?id=46524
30
THE QUIZ
8. Again with the Social Media
During a dissolution representation you Facebook “friended” a client.
Several months after the resolution, you receive a Facebook
notification that the client has posted on her page. You’re surprised to
see it is a disgruntled rant with the client claiming you did little work and
way overcharged her. Not taking that lying down, you post on her page
a copy of a memo you filed seeking recovery of your fees from the
Husband, which was denied. Posting the memo was:
A. Permissible because the client waived attorney-client privilege when
she alleged you charged an unreasonable fee.
B. A permissible “use” under Rule 4-1.9(c)(1) because the memo was
“generally known.”
C. Permissible under Rule 4-1.6(b)(3) “to establish a claim or defense on
behalf of the lawyer in a controversy between the lawyer and the
client.”
D. Impermissible.
THE QUIZ
8. Again with the Social Media
During a dissolution representation you Facebook “friended” a client.
Several months after the resolution, you receive a Facebook
notification that the client has posted on her page. You’re surprised to
see it is a disgruntled rant with the client claiming you did little work and
way overcharged her. Not taking that lying down, you post on her page
a copy of a memo you filed seeking recovery of your fees from the
Husband, which was denied. Posting the memo was:
ANSWER: D. Impermissible.
Rule 4-1.6(b) A lawyer may reveal information relating to the representation of a client to the
extent the lawyer reasonably believes necessary:
(1) to prevent death or substantial bodily harm that is reasonably certain to occur;
(2) to secure legal advice about the lawyer's compliance with these Rules;
(3) to establish a claim or defense on behalf of the lawyer in a controversy between the lawyer
and the client, to establish a defense to a criminal charge or civil claim against the lawyer
based upon conduct in which the client was involved, or to respond to allegations in any
proceeding concerning the lawyer's representation of the client; or
(4) to comply with other law or a court order.
THE QUIZ
8. Again with the Social Media
During a dissolution representation you Facebook “friended” a client.
Several months after the resolution, you receive a Facebook
notification that the client has posted on her page. You’re surprised to
see it is a disgruntled rant with the client claiming you did little work and
way overcharged her. Not taking that lying down, you post on her page
a copy of a memo you filed seeking recovery of your fees from the
Husband, which was denied. Posting the memo:
Answer A. Irrelevant. The issue is whether the memo is Confidential
Information, not whether it is a Privileged Communication.
MRPC 4-1.6 COMMENT [3] The attorney-client privilege and work-product doctrine
apply in judicial and other proceedings in which a lawyer may be called as a
witness or otherwise required to produce evidence concerning a client.
THE QUIZ
8. Again with the Social Media
During a dissolution representation you Facebook “friended” a client.
Several months after the resolution, you receive a Facebook
notification that the client has posted on her page. You’re surprised to
see it is a disgruntled rant with the client claiming you did little work and
way overcharged her. Not taking that lying down, you post on her page
a copy of a memo you filed seeking recovery of your fees from the
Husband, which was denied. Posting the memo:
Answer B. Was a permissible “use” under Rule 4-1.9(c)(1) because the memo
was “generally known.”
Using the memo in this fashion was a “reveal” under 4-1.9(c)(2), not a “use”,
but even if it was a use, the memo was not “generally known”, only
generally available. See e.g. In re Anonymous, 932 N.E.2d 671 (Ind. 2010) .
[T]he Rules contain no exception allowing revelation …even if a diligent
researcher could unearth it through public sources. We note that…1.9(c)(1)
allows for use of information…if the information has become generally known.
[T]there is no evidence that the information relating to…the divorce filing, was
generally known.
THE QUIZ
8. Again with the Social Media
During a dissolution representation you Facebook “friended” a client.
Several months after the resolution, you receive a Facebook
notification that the client has posted on her page. You’re surprised to
see it is a disgruntled rant with the client claiming you did little work and
way overcharged her. Not taking that lying down, you post on her page
a copy of a memo you filed seeking recovery of your fees from the
Husband, which was denied. Posting the memo:
Answer B. Was a permissible “use” under Rule 4-1.9(c)(1) because the memo
was “generally known.”
RULE 4-1.9: DUTIES TO FORMER CLIENTS
(c) A lawyer who has formerly represented a client in a matter or whose present or former firm
has formerly represented a client in a matter shall not thereafter:
(1) use information relating to the representation to the disadvantage of the former client
except as these Rules would permit or require with respect to a client or when the information
has become generally known; or
(2) reveal information relating to the representation except as these Rules would permit or
require with respect to a client.
THE QUIZ
8. Again with the Social Media
During a dissolution representation you Facebook “friended” a client.
Several months after the resolution, you receive a Facebook
notification that the client has posted on her page. You’re surprised to
see it is a disgruntled rant with the client claiming you did little work and
way overcharged her. Not taking that lying down, you post on her page
a copy of a memo you filed seeking recovery of your fees from the
Husband, which was denied. Posting the memo:
Answer B. Was a permissible “use” under Rule 4-1.9(c)(1) because the memo
was “generally known.”
RULE 4-1.9: DUTIES TO FORMER CLIENTS
COMMENT [8] Rule 4-1.9 (c) provides that information acquired by the lawyer in the course of
representing a client may not subsequently be used or revealed by the lawyer to the
disadvantage of the client. However, the fact that a lawyer has once served a client does not
preclude the lawyer from using generally known information about that client when later
representing another client.
THE QUIZ
8. Again with the Social Media
During a dissolution representation you Facebook “friended” a client.
Several months after the resolution, you receive a Facebook
notification that the client has posted on her page. You’re surprised to
see it is a disgruntled rant with the client claiming you did little work and
way overcharged her. Not taking that lying down, you post on her page
a copy of a memo you filed seeking recovery of your fees from the
Husband, which was denied. Posting the memo:
Answer C. A Facebook page posting is not a “legal claim or disciplinary
charge” alleging “complicity of the lawyer in a client's conduct or other
misconduct of the lawyer involving representation of the client,…” MRPC
4-1.6 COMMENT [8].
See, e.g. New York County Ethics Op. 722 (1997), Exception applies only “where
the accusation is rendered in such a manner that a person would reasonably
conclude that the inquirer is subject to a charge or claim in an imminent (pending
or threatened) proceeding”; Exception cannot be invoked by a “passing remark”.
THE QUIZ
9. Last Social Media Question
As part of your investigation into a represented adverse party, you view their Linked-In
page to see what is there. The page has no password protection. The AP has enabled a
feature of the system that allows them to “see” who has come onto their page. Because
you are a Linked-In user also, you are aware of this feature. Looking at the Linked-in
page:
A. Is an unethical communication under Rule 4-4.2
Communication with Person Represented by Counsel.
B. May be an unethical communication under Rule 4-4.2
Communication with Person Represented by Counsel.
C. Is ethical per Rule 4-4.2 because the page was not password
protected.
D. Ethical pursuant to M.R.P.C. 4-3.2 Expediting Litigation.
THE QUIZ
9. Last Social Media Question
As part of your investigation into a represented adverse party, you view their Linked-In
page to see what is there. The page has no password protection. The AP has enabled a
feature of the system that allows them to “see” who has come onto their page. Because
you are a Linked-In user also, you are aware of this feature. Looking at the Linked-in
page:
ANSWER: A. Is an unethical communication under Rule 4-4.2
Communication with Person Represented by Counsel.
Under the above definitions [of “communication”], whether the communicator intends to “impart” a message or
knowledge is seemingly irrelevant; the focus is on the effect on the receiver. It is the “transmission of,” “exchange of” or
“process of bringing” information or ideas from one person to another that defines a communication. In the realm of
social media, this focus on the transmission of information or knowledge is critical. A request or notification transmitted
through a social media service may constitute a communication even if it is technically generated by the service rather
than the attorney, is not accepted, is ignored, or consists of nothing more than an automated message of which the
“sender” was unaware. In each case, at a minimum, the researcher imparted to the person being researched the
knowledge that he or she is being investigated.
If an attorney cannot ascertain the functionality of a website, the attorney must proceed with great caution in conducting
research on that particular site, and should keep in mind the possibility that even an accidental, automated notice to the
juror could be considered a violation of Rule 3.5.
New York State Formal Opinion 2012-2:
JURY RESEARCH AND SOCIAL MEDIA
THE QUIZ
THE QUIZ
10. Dating Service
In the ten year period 2002-2011, the most frequently reported “Error or Omission”
malpractice category cited in the 2011 Legal Malpractice Insurance Report issued by the
Missouri Department of Insurance was:
A. Fail to File Documents with no Deadline.
B. Failure to Calendar Properly.
C. Failure to React to Calendar.
D. Fail to Ascertain a Deadline Correctly.
THE QUIZ
10. Dating Service
In the ten year period 2002-2011, the most frequently reported “Error or Omission”
malpractice category cited in the 2011 Legal Malpractice Insurance Report issued by the
Missouri Department of Insurance was:
A. Fail to File Documents with No Deadline – 4.9%.
B. Failure to Calendar Properly – 6.2%.
C. Failure to React to Calendar – 7.6%.
D. Fail to Ascertain a Deadline Correctly – 22.64%.
The Coming Changes to Your Duties
to Safekeep Client Property
Christian A. Stiegemeyer | Director of Risk Management
Christina Lewis Abate | Risk Manager
Current Safekeeping Property Rule found at
MRPC 4-1.15 – Effective January 1, 2010;
Contains subsections (a)-(m); Including the
COMMENT, 4,769 words.
New Safekeeping Property Rule found at MRPC:
4-1.145 – Definitions;
4-1.15 – Safekeeping Property;
4-1.155 – IOLTA Accounts; and
4-1.22 – File Retention
Effective July 1, 2013; Including the several
COMMENT sections, 5,730 words.
4-1.145 DEFINITIONS - SAFEKEEPING
PROPERTY AND IOLTA ACCOUNTS
No Significant Changes
New entries in the Definitions Section are items previously found
elsewhere in the Current Rule
4-1.155 IOLTA ACCOUNTS
No Significant Changes
New entries in MRPC 4-1.155 are items previously found elsewhere in
the Current Rule
4-1.22 FILE RETENTION
No Significant Changes
New entries in MRPC 4-1.122 are items previously found elsewhere in
the Current Rule
4-1.15 SAFEKEEPING PROPERTY
Changes! MRPC 4-1.15(a)(3)-(7) – Bonus Reading Includes
COMMENT Changes Too
(3) Only a lawyer admitted to practice law in this jurisdiction or a person under
the direct supervision of the lawyer shall be an authorized signatory or authorize
transfers from a client trust account;
COMMENT [2]
- Rules 4-1.15(a)(3) to (7) enumerate minimal accounting controls for client trust accounts.
-COMMENT [2] enunciates requirement that only a lawyer or person under direct supervision of lawyer
shall be authorized signatory or authorize electronic transfers from a client trust account.
-It is permissible to grant limited nonlawyer access to a client trust account, access should be closely
monitored.
-Lawyer has a non-delegable duty to protect and preserve the funds in a client trust account and can be
disciplined for failure to supervise subordinates who misappropriate client funds.
COMMENT [3]
Authorized electronic transfers shall be limited to:
(1) money required for payment to a client or third person on behalf of a client;
(2) expenses properly incurred on behalf of a client, such as filing fees or payment to third persons for
services rendered in connection with the representation; or
(3) money transferred to the lawyer for fees that are earned in connection with the representation and
are not in dispute; or
(4) money transferred from one client trust account to another client trust account.
4-1.15 SAFEKEEPING PROPERTY
Changes! MRPC 4-1.15(a)(3)-(7) – Bonus Reading Includes
COMMENT Changes Too
(4) Receipts shall be deposited intact and records of deposit shall be
sufficiently detailed to identify each item;
COMMENT [4] The requirements in Rule 4-1.15(a)(4) that receipts shall be deposited intact
mean that a lawyer cannot deposit one check or negotiable instrument into two or more
accounts at the same time, a practice commonly known as a split deposit.
4-1.15 SAFEKEEPING PROPERTY
Changes! MRPC 4-1.15(a)(3)-(7) – Bonus Reading Includes
COMMENT Changes Too
(5) Withdrawals shall be made only by check payable to a named payee,
and not to cash, or by authorized electronic transfer; and
4-1.15 SAFEKEEPING PROPERTY
Changes! MRPC 4-1.15(a)(3)-(7) – Bonus Reading Includes
COMMENT Changes Too
(6) No disbursement shall be made based upon a deposit:
(A) if the lawyer has reasonable cause to believe the funds have not actually been collected by the
financial institution in which the trust account is held; and
(B) until a reasonable period of time has passed for the funds to be actually collected by the financial
institution in which the trust account is held.
COMMENT [5]
-Lawyer must wait reasonable time for deposited funds to be collected by the financial institution in
which the trust account is located before disbursing funds on that deposit, aka "good funds”;
- It is not sufficient to wait only until the deposit is "cleared" or "available" as the transaction may still
be reversed by the financial institution if a problem arises;
-A reasonable time to wait may vary between financial institutions;
- A lawyer must also delay disbursement and take extra measures to ensure collection before
disbursement if the lawyer is aware of information that causes doubt about the collection or
collectability of the deposit.
RULE 4-1.8: CONFLICT OF INTEREST: PROHIBITED TRANSACTIONS
(e) A lawyer shall not provide financial assistance to a client in connection with pending or
contemplated litigation, except that: (1) a lawyer may advance court costs and expenses of
litigation, including medical evaluation of a client, the repayment of which may be contingent on
the outcome of the matter;
4-1.15 SAFEKEEPING PROPERTY
Changes! MRPC 4-1.15(a)(3)-(7) – Bonus Reading Includes
COMMENT Changes Too
(7) A reconciliation of the account shall be performed reasonably promptly
each time an official statement from the financial institution is provided or
available.
COMMENT [18] The potential of these records to serve as safeguards is realized only if
reconciliations are regularly performed. Reconciliation each time a statement is generated by the
financial institution will enable the easiest identification of an error (whether by the lawyer or the
bank).
4-1.15 SAFEKEEPING PROPERTY
What Else?
MRPC 4-1.15(f)(1)-(11) – Record Keeping – Time Frame – Same as Current Rule
(f) Complete records of client trust accounts shall be maintained and preserved for a period
of at least five years after termination of the representation or after the date of the last
disbursement of funds, whichever is later.
4-1.15 SAFEKEEPING PROPERTY
What Else?
MRPC 4-1.15(f)(1)-(11) – Record Keeping – Dissolution or Sale - New
Upon dissolution of a law firm or of any legal professional corporation, the partners
shall make reasonable arrangements for the maintenance of client trust account
records. Upon the sale of a law practice, the seller shall make reasonable
arrangements for the maintenance of records.
4-1.15 SAFEKEEPING PROPERTY
What Else? MRPC 4-1.15(f)(1)-(11) – Record Keeping - Minimums
Complete records shall include at a minimum:
(1) receipt and disbursement journals containing a record of deposits to and
withdrawals from client trust accounts, specifically identifying the date, source, and
description of each item deposited as well as the date, payee, and purpose of each
disbursement;
(2) ledger records for all client trust accounts showing, for each separate trust client or
beneficiary, the source of all funds deposited, the names of all persons for whom the
funds are or were held, the amount of such funds, the descriptions and amounts of
charges or withdrawals, and the names of all persons or entities to whom such funds
were disbursed;
(3) fee agreements, engagement letters, retainer agreements and compensation
agreements with clients;
(4) accountings to clients or third persons showing the disbursement of funds to them
or on their behalf;
(5) bills for legal fees and expenses rendered to clients;
(6) records showing disbursements on behalf of clients;
4-1.15 SAFEKEEPING PROPERTY
What Else? MRPC 4-1.15(f)(1)-(11) – Record Keeping - Minimums
Complete records shall include at a minimum (Con’t):
(7) the physical or electronic equivalents of all checkbook registers, bank statements,
records of deposit, pre-numbered canceled checks, and substitute checks provided by a
financial institution;
(8) records of all electronic transfers from client trust accounts, including the name of
the person authorizing transfer, the date of transfer, the name of the recipient and
confirmation from the financial institution of the trust account number from which money
was withdrawn and the date and the time the transfer was completed;
(9) reconciliations of the client trust accounts maintained by the lawyer;
(10) those portions of client files that are reasonably related to client trust account
transactions; and
(11) records of credit card transactions with clients to the extent permitted by law and
the payment card industry data security standard.
4-1.15 SAFEKEEPING PROPERTY
Some Other New COMMENTS –
Safeguard & Account
Partners Always Responsible
[11] The basic financial records that a lawyer must maintain with regard to all
trust accounts of a law firm include the standard books of account and the
supporting records that are necessary to safeguard and account for the receipt
and disbursement of client or third person funds.
[12] Regardless of the arrangements the partners or shareholders make
among themselves for maintenance of the client trust records, each partner
maybe [sic] held responsible for ensuring the availability of these records.
4-1.15 SAFEKEEPING PROPERTY
Some Other New COMMENTS – Computerized Back-up
[13] Alternative media for the maintenance of client trust account records may
be used if printed copies of necessary reports can be produced. If trust records
are computerized, a system of regular and frequent (preferably daily) back-up
procedures is essential. If a lawyer uses third-party electronic or internet based
file storage, the lawyer must make reasonable efforts to ensure that the
company has in place, or will establish reasonable procedures, to protect the
confidentiality of client information. See ABA Formal Ethics Opinion 398 (1995).
Required records shall be readily accessible and shall be readily available to
be produced upon request by the client or third person who has an interest as
provided in Rule 4-1.15 or by the official request of a disciplinary authority,
including but not limited to, a demand under Rule 4-8.1 or a subpoena duces
tecum. Personally identifying information in records produced upon
request by the client or third person or by disciplinary authority may be
the appropriate subject of a protective order.
4-1.15 SAFEKEEPING PROPERTY
Some Other New COMMENTS – Appointment of Trustee
[14] Rule 5.26 provides for the appointment of a trustee to handle the
storage or disposition of a lawyer's client trust account records in the event
that the lawyer is suspended, disbarred, disappears, or dies.
4-1.15 SAFEKEEPING PROPERTY
Some Other New COMMENTS – Download Electronic Images
[15] The physical or electronic equivalents of all checkbook registers, bank
statements, records of deposit, pre-numbered canceled checks, and
substitute checks must be maintained for a period of five years after
termination of each legal engagement or representation. The "Check
Clearing for the 21st Century Act" or "Check 21 Act", codified at 12 U.S.C.
§§5001 et. seq., recognizes "substitute checks" as the legal equivalent of
an original check. A "substitute check" is defined at 12 U.S.C. §5002(16)
as "paper reproduction of the original check that contains an image of the
front and back of the original check; bears a magnetic ink character
recognition ("MICR") line containing all the information appearing on the
MICR line of the original check; conforms with generally applicable industry
standards for substitute checks; and is suitable for automated processing in
the same manner as the original check. "Banks," as defined in 12 U.S.C.
§5002(2), are not required to return to customers the original canceled
checks. Most banks now provide electronic images of checks to customers
who have access to their accounts on internet-based websites. It is the
lawyer's responsibility to download electronic images. Electronic
images shall be maintained for the requisite number of years and shall be
readily available for printing upon request or shall be printed and
maintained for the requisite number of years.
4-1.15 SAFEKEEPING PROPERTY
Some Other New COMMENTS – Automated Clearing House
[16] The ACH (Automated Clearing House) Network is an electronic funds
transfer or payment system that primarily provides for the inter-bank clearing
of electronic payments between originating and receiving participating
financial institutions. ACH transactions are payment instructions to either
debit or credit a deposit account. ACH payments are used in a variety of
payment environments including bill payments, business-to-business
payments, and government payments (e.g., tax refunds.) In addition to the
primary use of ACH transactions, retailers and third parties use the ACH
system for other types of transactions, including electronic check conversion
(ECC). ECC is the process of transmitting MICR information from the bottom
of a check, converting check payments to ACH transactions depending upon
the authorization given by the account holder at the point-of-purchase. In this
type of transaction, the lawyer should be careful to comply with the
requirements to maintain documentation of the transaction.
4-1.15 SAFEKEEPING PROPERTY
Some Other New COMMENTS – Electronic Checks
[17] There are five types of check conversions where a lawyer should be
particularly careful to maintain good documentation. First, in a "point-ofpurchase conversion," a paper check is converted into a debit at the point of
purchase and the paper check is returned to the issuer. Second, in a "backoffice conversion," a paper check is presented at the point of purchase and
is later converted into a debit and the paper check is destroyed. Third, in an
"account-receivable conversion," a paper check is converted into a debit
and the paper check is destroyed. Fourth, in a "telephone-initiated debit" or
"check-by-phone" conversion, bank account information is provided via the
telephone and the information is converted to a debit. Fifth, in a "webinitiated debit," an electronic payment is initiated through a secure web
environment. The need for complete documentation applies to each of the
type of electronic funds transfers described. All electronic funds transfers
shall be recorded and a lawyer should not re-use a check number that has
been used previously in an electronic transfer transaction.
4-1.15 SAFEKEEPING PROPERTY
Some Other New COMMENTS – Typical Documents to Retain
[19] In some situations, documentation in addition to that specified in this Rule
4-1.15 is necessary for a complete understanding of a trust account
transaction. The type of document that a lawyer must retain because it is
"reasonably related" to a client trust account transaction will vary depending
on the nature of the transaction and the significance of the document in
shedding light on the transaction. Examples of documents that typically must
be retained under this Comment [19] include:
1 - Correspondence relating to a disagreement over fees/costs/distribution of
proceeds;
2 - Settlement agreements contemplating payment of funds;
3 - Settlement statements issued to the client;
4 - Documentation relating to sharing litigation costs and attorney fees for
subrogated claims;
5 - Agreements for division of fees between lawyers;
6 - Guarantees of payment to third parties out of proceeds recovered on
behalf of client,
7 - Copies of bills/receipts/correspondence for payments to third parties on
client’s behalf (whether from client's funds or lawyer's funds advanced for
client ).
Why IOLTA?
MRPC 4-1.155 COMMENT [3]
[[3] The IOLTA requirements conform with the decision in Brown v. Legal
Foundation a/Washington, 538 U.S. 216 (2003). IOLTA funds must be deposited
with institutions paying interest and dividends comparable to rates paid to the
institution's own other similarly-situated non-IOLTA customers. This recognizes
that additional options have developed and are being offered in the marketplace
by financial institutions from which qualifying IOLTA balances should also benefit.
Apart from the important goal of fairness in the treatment of IOLTA funds,
the most recent rule changes are important to the purposes of the IOLTA
program: providing a source of funds to support civil legal services to the
poor, improving the administration of justice, and promoting other
programs for the benefit of the public as are specifically approved from
time to time by this Court.
Why IOLTA?
From the Missouri Trust Account Foundation website http://www.moiolta.org/grants.aspx
For 2012, the Foundation Board of Directors awarded $950,000 to four grant
recipients in the category of "Civil Legal Assistance to the Poor." The awards
will be paid to:
LEGAL SERVICES OF EASTERN MO $319,960.00
LEGAL AID OF WESTERN MO $289,940.00
LEGAL SERVICES OF SOUTHERN MO $276,355.00
MID-MISSOURI LEGAL SERVICES $63,745.00
SUBTOTAL $950,000.00
$50,000 in grant awards in the category "Administration of Justice" for 2012 will
be paid to the following to accomplish a diverse array of projects:
JACKSON COUNTY CASA $4,000.00
ST. LOUIS BAR FOUNDATION $20,000.00
KANSAS CITY BAR FOUNDATION $20,000.00
VOICES FOR CHILDREN $6,000.00
SUBTOTAL $ 50,000
The Coming Changes to Your Duties
to Safekeep Client Property
Christian A. Stiegemeyer | Director of Risk Management
Christina Lewis Abate | Risk Manager
Thank you!