Ch. 1 Regulation of Lawyers
A. Institutions that regulate
pp. 24-34
1. Highest state courts: exclusive & inherent
authority over lawyers practicing in state, whether
licensed or pro hac vice. (cf. negative inherent
powers; no complaint if legal profession (LP), State
Ct likes).
a. State bar ass’ns (“comprehensive” or
“mandatory” v. voluntary; impt differences). 37
states, including OK & Tex: Mandatory)
b. County & city bars: voluntary; may have
political clout.
A. Institutions that regulate pp. 32-34
3. Lawyer Disciplinary Agencies: depends;
where State Ct deems worthy of credit.
4. ABA: mixed trade & regulatory functions.
a. Model Rules: only examples; states free to
adopt or reject.
b. Only binding authority: law school accreditation
standards; “persuasive” assessment of federal
judicial nominees.
Concept of self-regulation: ABA MRPC
Preamble
[1] A lawyer [L], as a member of the LP, is a
representative of clients, an officer of the legal
system and a public citizen having special
responsibility for the quality of justice.
[10] . . . LP is largely self-governing. Although other
professions also have been granted powers of selfgovernment, the LP is unique . . . because of the
close relationship between the profession and the
processes of government and law enforcement. . . .
manifested in the fact that ultimate authority over
the legal profession is vested largely in the courts.
Chart, Roles of Branches of Govt.
pp. 28-29
Usual principle: legal rules made by
democratically elected representatives.
Inherent powers doctrine: exception,
courts make rules, aspect of administrative
authority to over courts.
Nevertheless intrusions by legislative &
executive branches; mixed results.
Misc. “other regulators” pp. 38-45
Federal & State administrative agencies, e.g., SEC,
IRS, FTC, OTS (‘92 Kaye Scholer, asset freeze)
Prosecutors
**Malpractice carriers (education to prevent
unwanted risk, loss prevention, power through ratesetting
**Legal employers, “ethical infrastructure”
**Institutional Clients (Cs), e.g. insurance co’s,
corporate Cs, ACC as trade group speaking for them
Nutshell History of American Legal
Ethics Regulation & Law of Lawyering
See hand-out on overhead, material pp. 45-48
Hoffman (1936)
Sharswood (1854-1884)
*Alabama: 1st written Code, post-Civil War
ABA 1908 Canons of Ethics, supp. Pp. 661-673
’60s, Lewis Powell ABA President > Model Code of Prof’l
Responsibility (CPR adopted by HOD 1969>1982)
Watergate, John Dean’s testimony + other probs. > Kutak
Comm’n > 1st set of Model Rules (Restatement format)
“Ethics 2000” Veasey, Del. CJ chaired, Nancy Moore Chief
Reporter
“Ethics 20/20” re globalization & technology
State Rules
Most work off current Model from ABA,
although deviations.
*e2k: strong push for national uniformity
so easier for interstate practice L’s to find
variations. Largely successful, although still
significant differences among states re certain
Rules, e.g. on Advertising; Circuit split, SCOTUS
ready to take on new case?
Traditional attributes of “profession”
pp. 5-6
• Extensive technical training
• High degree of skill & care
• Technical, special language & procedure
beyond understanding of laypersons
• Licensure (monopoly over categories of
conduct)
• Altruism, commitment to serving others,
including those who cannot afford to pay
monopoly rates
Clicker: Given that definition, why did
YOU decide to attend law school?
a. Always been my dream inspired by live
person or fictional character.
b. practical, economy not ready to put my
undergraduate skills to work for amount of pay I
need to live.
c. Expectation of parents, other family that will
need advanced degree.
d. Need to “park myself” while economy
improved.
Clicker: Are you pleased with your
decision to attend OU Law?
a. yes, good place to park, acquire knowledge,
skills, continue friendships from
undergraduate, make new ones.
b. Yes, intellectually challenging, opened eyes
to new horizons, possible lines of work.
c. No, I’m bored or frustrated but don’t have
other good options at present.
d. No, I don’t like the competition, incurring
debt load concerns me.
Prob. 1-1 The New Country pp. 55-56
• Newly independent; some wealthy but per
capita income < $1000K. No established legal
system.
• Q: should it create legal system where are
lawyers?
• If so, how should they be trained?
• If so, any type of licensing system? Limit on
number of licenses? Basis for determining
who gets? Bar exam? Other criteria?
Admission to Practice
Common standards p. 53
Passing score on MBE & MPRE (multiple choice)
(states set minimum passing score)
NCBE marketing essay packages & scoring
services, practical skill components.
Satisfy that are currently “have good moral
character & fit to practice law”
Character & fitness inquiry, Q’s pp. 57-58
• Why do they want all this tedious information?
Reasonably related to fitness to practice?
– Every address last 10 years
– Every past job
– Every party to civil action (include copy of complaint,
answer, disposition)
• States vary, e.g. TX & NC want copy of EVERY law
school where applied. OK: only law schools that
you attended.
Q: What will bar admission staff do with it?
Mental Health Preamble
Conference “does not, by its questions, seek
information that is fairly characterized as
situational counseling.”
E.g., stress, domestic, grief, eating or sleeping
disorders . . . [not germane to whether qualified to
practice]
What ARE they looking for? What will they do
with it?
Mental Health Questions
pp. 68-71
• Preamble
–Purpose: determine current fitness
–Mere fact of treatment is ordinarily not
basis to deny admission
–Encourage applicants to realize when
need help & get it, unafraid of
consequences
Clicker Question: NCBE Character &
Fitness Questions
25.W/in last 5 years, diagnosed or treated for
bipolar disorder, schizophrenia, paranoia, or
any other psychotic disorder.
Clicker Q: Is this a proper question, with rational
nexus to the practice of law?
1. Yes
2. No
3. Debatable
NCBE Character & Fitness Questions
26.A. Do you currently have any condition or
impairment (including, but not limited to,
substance abuse, alcohol abuse, or a mental,
emotional or nervous disorder or condition)
which in any way currently affects, or if
untreated could affect, your ability to practice
law in a competent and professional matter?
27.B. If yes . . . Are the limitations caused [thereby]
reduced or ameliorated b/c receive ongoing
treatment or participate in monitoring program?
Chapter 2 Lawyer Liability
A. Professional Discipline pp. 79-100
• 1908 Canons: seldom used for (except v. p.i.
lawyers, grievances filed by opposing counsel)
• 1970 Clark Commission, p. 46: “disciplinary
action practically nonexistent; practices &
procedures antiquated, agencies powerless”
[cronyism, fox/henhouse] Urged bold reforms.
• 1998 McKay Report (Okla. had just revised
disciplinary procedures, “do-over” not feasible.
Now more “professionalized.”
B. 3. Reporting Misconduct by other Ls
Session # 5 pp. 100-18
RPC 8.3(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.
“Land of Lincoln” In re Himmel, 533 N.E.2d 790 (Ill.
1988)(Stamos, J.) pp. 106-110
Facts? Himmel’s conduct at issue?
IL (voluntary; excellent regulatory system. Proced’l
history? Grogan charged seeking 1 yr. suspension (picture p.
106); panel rec’dn? Supreme Court?
In re Himmell (IL. 1998)
• Not privileged (details communicated by L &
by Client (C) to non-privileged
communications
• C cannot (c/n) order L to refrain from
reporting
• Great impact nationwide, although rare for
discipline if fail to report.
– N. 82: next 2 years, 25% of IL reports from other
Ls. N.B. OK 2012, 41% of all grievances from Ls!
Important takeaway
p. 109
• This is LAW, not gut issue. Treat as such.
Research law of relevant jurisdiction(s).
• “don’t risk making a wrong decision . . . And . .
. Make sure you have adequate malpractice
insurance before reporting another attorney
against the wishes of a Client.”
Problem 2-2 Exculpatory Evidence
pp. 110-11
• You & Bobby: close friends since law school
• Both moved from same Prosecutor’s office to do
prosecution to do criminal defense where each sole
practitioner
• Went out 5 years ago, Bobby confided that had fatal
illness, few months left. Also confessed that he suppressed
exculpatory Brady evidence when both constitutional cases
& MRPC 3.8(d) required voluntary disclosure. Though you
encouraged, he didn’t reveal information sufficient for you
to identify & contact Δ’s L while still on death row.
• Now, newspapers covered pending execution and realized
this was the case.
Q: what are your options & risks now? What would you so?
In re Riehlmann, 891 So.2d 1239 (La. 2005)
●You (Riehlmann) contacted ΔL, gave affidavit
about old conversation with Bobby. You testified
at hearing for new trial, Δ released after 18
years on death row, exonerated because he was
“factually innocent.”
● LA Disciplinary authorities in New Orleans
opened file v. you, for failure to reveal
●Public reprimand; in mitigation phase of
discipline recognized that you were distracted
b/c difficult personal time.
Facts sound familiar?
• π John Thompson brought § 1983 action for
damages v. long-time elected NOLA prosecutor
Harry Connick Sr.; federal habeas verdict
awarded $14 M.
• Connick v. Thompson, 131 S.Ct. 1350 (2011),
Thomas, J. wrote majority opinion reversing
verdict & holding that no liability attached
absent strong proof that pattern & practice of
poor training on Brady duties; rationale
assumed sufficient coverage in law school, clinic,
CLE’s, thus no independent duty of prosecutor to
train & retrain lawyers.
Ch. 2 B. 3. b. Lawyers responsibility for ethical
misconduct of colleagues, superiors
Problem 2-3 The Little Hearing pp. 117-13
New L, 1st week on first job for sole practitioner in immigration law,
tight job market.
Boss assigned to represent C at high stakes immigration hearing
(deport to Rwanda). Knew no relevant law or procedure; “we can talk
about on train” but he napped instead. Supervisory style: “sink or
swim.” Hearing disaster (no interpreter, new L felt totally inadequate)
Secretary: 1500 open files, more than single person can handle. Do
the best you can. Modest fees entitle to modest amount of work,
preparation. (MRPC 1.1)
Boss: Do the best you can. Modest fees entitle to modest amount of
work, preparation (MRPC 1.1). Assigned 2 hearings next day.
What should she do?
Recent disciplinary case In re Phillips
(Ariz., 2010)
Founder & managing partner of Phillips &
Associates suspended 6 months + 2 yrs probation
for many violations of RPC 5.1(a), 5.3(a) and 7.1.
High volume practice: criminal defense,
bankruptcy, personal injury. Employed 38 lawyers,
228 nonlawyers.
Junior lawyer testified that upon hiring, she became
immediately responsible for 540 cases.
c. Legal protections for subordinate
lawyers? Wrongful discharge action?
Subordinate’s ethical duties RPC 5.2
(a) subordinate bound notwithstanding that
acted at direction of another. . .
(b) unless acted in accordance w/ supervisor’s
reasonable resolution of arguable question of
professional duty.
RPC 8.3, 8.4 and all other rules
Wieder v. Scala
pp. 120-21
609 N.E.2d 105 (NY Ct App. 1992)
*Associate “at will” employee, m/n be fired in
retaliation for complying with duty to report
another lawyer’s dishonest conduct.
* implied undertaking that associate and firm
will practice in accordance with ethical
standards; stated claim for breach of contract.
Contrast, Jacobson v. Knepper & Moga,
106 N.E.2d 491 (Ill. 1998) pp. 121-22
Individual lawyer's responsibilities to comply with
Rules of Professional Conduct, including Rules 3.3,
8.3 [Himmel], and 8.4( a) was sufficient protection of
public interest.
Unnecessary to recognize the tort of retaliatory
discharge when associate terminated for raising
internal concerns about the firm's persistent
violation of venue requirements.
Some improved protections for
whistleblowing associates pp. 122-34
Kelly v. Hunton & Williams, 199 WL 408416
(E.D.N.Y., 1999) pp. 122-23
See FBI Wanted notice p. 124
3 associates observed & reported Wolas’ billing
fraud; all 3 fired, 2 sued, only Peter K. recovered.
What internal corrective efforts taken? What
happened? Why fail?
What would you have done if you were Peter
Kelly?
Kelly v. Hunton & Williams, 199 WL
408416 (E.D.N.Y., 1999) pp. 122-23
• Tr. Ct. ruling?
• Legal basis, analysis?
Peter Kelly: lessons learned
1. Do not rely on either firm managers OR on
firm clients to do the right thing if it might
affect the money they made.
2. Never compromise on an issue you see as a
matter of right & wrong, because it will bite
you in the backside every time.
Ch. 2 B. Civil Liability of Lawyers
1. Legal Malpractice pp.135-140
• Reading: compact nutshell
• N. 121, P. 135 Mallen & Smith (multi-volume
treatise, great table of contents, index in back on
cases & secondary authorities; annual updates)
– Legal malpractice (LM): umbrella term
– Usual tort elements p. 135
• Case w/in case, causation (Palsgraf)
• Disagree w/ text, in OK, still hard to find π L,
Expert Witness (EW)
Tort v. K?
• OK still uncertain: Worsham v. Nix, circa 1990
(OK Ct. Civ. App.)
• Privity: most states & OK allow t/p to recover
if disappointed legatee under failed will (e.g.
not testamentary formalities). Not TX.
– Fact specific, e.g., where L failed to document
properly partnership documents.
– m/b signif. differences: especially punitive
damages
B. Civil liability of Lawyers pp. 135-55
“Legal malpractice”: UMBRELLA term, subtle
but important differences. Most cases: liability
to client or successors in interest.
Tort (negl., intentional tort)
duty, breach, actual & proximate cause,
damages
Breach of K
Breach of fiduciary duty
Possible Remedies
•
•
•
•
•
•
Compensatory damages
Maybe (m/b) punitive damages
Injunctive relief
Rescind contract
M/b fee forfeiture
If statutory violation, m/b treble damages,
attorneys’ fees
Risky Business Practices (top 10 list p.137)
• Conflicts of interest (COI)***
– Where present, ordinary tort easily “morphed” into
breach of fiduciary duty.
– Don’t advise or represent family members or friends!
• Sue for unpaid fee: check 1st w/ your carrier!
• Accept matters beyond what’s reasonable (esp.
small/sole pract’rs, take all comers to pay bills)
• Business transactions with clients
• Vicarious liability for others in firm; poor
internal monitoring
Risky practice areas p. 138
•
•
•
•
P.i. (π, increasingly Δ) > 22%
Real estate transactions 20%
Domestic relations 10%
Estate, trust, probate 10%
Q: what do these fields have in common?
Fiduciary
•
•
•
•
Position of trust & confidence
Safeguard property, information
Put other’s interests above own
Act in utmost honesty & good faith
Possible liability to limited categories
of non-clients
• Intended beneficiaries of will where lawyer’s
negligence caused it to fail. OK: have
standing. TX: no, privity still required.
• Greycas, Inc. v. Proud, 926 F.2d 1560 (7th ‘87) p.
140, n. 139. Bank required “no lien” letter as
condition of granting loan. Lawyer relied on
docs. from Client, false. C defaulted, debt
unsecured > recovered full amt from L b/c
negligent misrepresentation.
2. Malpractice Insurance (ins) pp. 140-42
Recall: INS carriers effective regulators
• Only Oregon requires coverage; recent study
shows Ls happy with captive carrier.
– Recent data: about 80% OK Ls have ins.!
• ~ (about) ½ states require lawyers to disclose
(somewhere, somehow) whether or not they
have malpractice insurance.
• Okla. & Tex.: “captive carriers” (underwrite only
for lawyers licensed in state). Lawyers free to buy
from private carrier.
– Oklahoma Attorneys Mutual Insurance Co.(OAMIC)
– Texas Lawyers Insurance Exchange (TLIE)
Policy exclusions p. 142
• Intentional torts
• Restitution of fees, fines, penalties, punitive
damages
• Conduct outside “practice of law”
• Claims where L is also owner of client company
• Employment discrimination, law firm internal
disputes.
N.B. Starting w/ OAMIC, some carriers cover
discipline defense. Why? Practical reasons?
C. Criminal liability of lawyers
pp. 144-48
High flyers, hard falls. GREED prevailing theme.
Harvey Meyerson (prosecuted while Peter Kelly at
Hunton & Williams): 70 months prison (mail & wire
fraud, overbilling)
Bill Lerach, Milberg Weiss p. 145 & fn. 157 (paid
investors to serve as named class representatives,
plead to $251M kick-back scheme; disbarred, 19
months prison). Now: mostly sweet life.
William J. Anton (multiple counts embezzlement,
10 years Okla. DOC)
New Era of Ls’ Criminal Liability?
• Corporate general counsels (backdating stock
options)
• Robo-signing?
• More “ordinary” crimes (embezzlement, drug
use, possession, dealing, bribery, witnesstampering)
Takeaway: Ls subject to same law as
general public
D. Client protection funds pp. 148-54
• LIMITED compensation for $$$$ loss to Cs by
dishonest Ls where L dead, mentally incompetent or
dead
• Great variation among U.S. jurisdictions.
• OK: Very hard to locate R’s, some shockingly unfair
– Created by S.Ct., OBA C Trust Fund Committee (Cm’tee)
– $100K/year (dues); maximum annual payout + interest on
$1M reserve.
– Reality: only pay $100K/yr, distribute pro rata. NEVER
MADE WHOLE!!
Okla. Clients’ Security Fund
Repeat offenders cost a lot. Remember 1st L in Himmel?
Wm. J. Anton (’07) resigned pending discipline; charged
embezzling over (>) $1.16M, convicted, 10 years in
prison.
OK C Security Fund paid out to his Cs: $92K (‘08); $65K
(‘09); $89K (’10); $48K (‘11) Total: $294K +
If payout attributable to L must make restitution to fund
before (b/4) reinstatement & C must sign subrogation
agreement (agmt) to fund.
Prevention Well Worth Pound of Cure
• OK & Maj.: Mandatory notice of trust
account overdraft. Early notice > identify and
educate (diversion) or investigate and
discipline if dishonest.
• Model Trust Accounting & Record Keeping ule
(not OK)
• Random audits (not OK)