“Attorney’s Eyes Only”

Court orders imposing “attorney’s eyes only” discovery restrictions do not disrupt the attorney-client relationship or contradict an attorney’s ethical duty to keep clients informed, according to the District Court for the Southern District of Florida.

The issue before the court arose in a trademark infringement action, in which the plaintiff contended that an “attorney’s eyes only” order, requiring an attorney to withhold discovery material from a client, contradicts an attorney’s duty to keep his clients informed and creates “an unnecessary level of secrecy.” However, the court reinforced attorneys’ “professional obligation to obey a court order imposing ‘eyes only’ limitation,” in holding that such a protective order does not conflict with Florida Rule of Professional Conduct 4-1.4, which requires an attorney to communicate with his client so that the client is reasonably informed about his case.

In reaching its holding, the court reviewed the language of Rule 4-1.4 and concluded the rule does not impose an absolute obligation on the attorney to disclose every matter to a client. Magistrate Judge Jonathan Goodman found Rule 4-1.4 to be applicable only to reasonable disclosures and noted the use of reasonable several times within the rule .

Moreover, the court highlighted that the comments to Rule 4-1.4 specifically recognize the permissibility of protective order in litigation, which would include an “attorney’s eyes only” provision. (Rule 4-1.4’s comment refers to Rule 4-3.4(c), which requires attorneys not to “knowingly disobey an obligation under the rules of a tribunal.”)

The opinion recognizes that protective orders with an “Attorney’s Eyes Only” provision “agreements are widely accepted in Florida” and notes that several jurisdictions are in accord.

To read the full opinion, click here.







Feuding Directors Can Access Privileged Communications Under Delaware Law

A company’s directors have the right under Delaware law to access all corporate attorney-client communications originated during their terms as directors—even if their interests in the current suit are adverse to the company itself.

The communications at issue in Del Giudice v. Harlan were emails exchanged between members of the board of directors and the company’s counsel. The plaintiffs, who were current directors of the company, expected these emails to assist them in challenging certain distributions paid under the operating agreement. However, the decision, made by a federal magistrate judge in Manhattan, has even broader implications. The order hints that where a discord arises among directors in a company regarding management or control, none of them should expect any of their communications with corporate counsel to be kept confidential in accordance with the privilege.

The defendants argued that the plaintiffs should not be able to gain access to the privileged emails because the plaintiffs’ interests in the suit were adverse to the company and they only sued to enforce their individual interests.

However, Delaware case law does not make distinctions when addressing a director’s right to legal advice provided to the corporation during the director’s term. Therefore, it does not matter that the plaintiffs were serving their own interests when bringing a suit versus serving the interests of the company.

The defendants rejected this argument, urging the court to follow New York law instead of Delaware because New York differs materially and might have generated a different outcome. The judge disagreed and concluded that Delaware law controls due to a choice of law provision in the operating agreement.

To read the full opinion, click here.

Mississippi Court of Appeals: A Bar Complaint Does not Toll the Statute of Limitations on a Legal Malpractice Claim

The Mississippi Court of Appeals recent decision in Archer v. Creefound holds that a client’s state bar complaint against a lawyer does not toll the statute of limitations on that client’s legal malpractice claim. Regardless of the bar proceedings, the beginning of the life of a legal malpractice claim is when the client learns of his or her lawyer’s negligence or malpractice.

The case arose from the following facts. In 2010, Mary Archer hired an attorney, Mitchell Creel, to represent her brother in post-conviction proceedings. She eventually fired him and filed a bar complaint about a breach of contract. The bar complaint was dismissed in 2012. She then filed a legal malpractice lawsuit.

In Mississippi, there is a three-year statute of limitations on legal malpractice claims, and the clock begins to run on the first day the client is aware of his or her lawyer’s negligence.

Nonetheless, Archer argued that a client must wait to sue until after an administrative remedy, such as the bar complaint, is exhausted. Her reasoning was that a lawsuit is untimely when it is filed during the pendency of bar proceedings.

However, both the Mississippi trial court and the Mississippi appellate court disagreed with Archer finding that the clock on the statute of limitations runs independently of a bar complaint. Thus, in Archer’s case, the statute of limitations began running when Archer fired her lawyer, based upon allegations of bar violations and malpractice, rather than after the bar complaint was dismissed.

To read the full opinion of Archer v. Creel, click here.

Avvo’s Directory Akin to the Yellow Pages: Embedded Attorney Advertising Does Not Render a Profile Listing to be Commercial Speech

On September 12, the U.S. District Court for the Northern District of Illinois ruled in Vrdolyak v. Avvo, Inc. that Avvo’s publishing of online profiles of Illinois attorneys, which may contain advertisements for competing attorneys on the same page,  does not violate an individual attorney’s publicity rights. (Vrdolyak v. Avvo, Inc., 2016 BL 297789, N.D. Ill., No. 16 C 2833, 9/12/16).   Avvo Inc., maintains a website that publishes biographical information about every U.S. lawyer without seeking consent of the lawyers. A lawyer has the opportunity to claim his Avvo profile and customize his Avvo information. On an attorney’s profile page there may also be attorney advertisements for other attorneys.  Avvo provides information about lawyers for consumers in need of legal representation.

Avvo’s chief legal officer, Josh King, explained that the decision is the first to dismiss a complaint that sought to hold Avvo liable under a state law that prohibits using an individual’s identity for commercial purposes without that person’s consent. Avvo has previously been sued for claims including defamation, unfair trade practice, and inaccuracy of information just to name a few. Nevertheless, Avvo has prevailed in these cases.

The plaintiff, in this Illinois class action case, asserted that the publication of his biographical profile along with advertisements about competing attorneys that were published on the same page is impermissible and  constitutes “commercial speech, which does not receive full First Amendment protection.” Vrdolyak at 1. However, the court disagreed and found that the fact that another attorney’s advertisement was embedded on an attorney’s profile page did not render the entire page an advertisement.

Instead, the court found that Avvo’s listing of attorneys’ information is akin to a yellow pages directory, and therefore is protected by the First Amendment. Id. at 4.  For the full opinion, click here.

Equity Stake Isn’t a Prerequisite for ‘Partner’ Label

May a law firm refer to its lawyers, as partners, when those lawyers do not have voting authority on corporate governance matters or equity shares in the firm? The North Carolina State Bar recently answered this question in the affirmative.

The North Carolina State Bar Association issued Formal Ethics Opinion 9 advising that professional corporations are allowed to designate lawyers in their firm as “partner,” “income partner,” and “non-equity partner,” even if those lawyers do not own any interest in the firm and have no authority to vote on corporate governance matters. However, a lawyer who is designated as a partner must have been promoted based on legitimate criteria. Additionally, the Ethics Committee noted that any firm lawyer who has been promoted to “partner” will be held to all professional responsibilities that accompany that role, such as the supervisory responsibilities required by Rule of Professional Conduct 5.1.

In analyzing the meaning of the designation partner, the opinion looks to Black’s Law Dictionary, which defines a “partner” as “one of two or more persons who jointly own and carry on a business for profit.” However, the opinion notes that the legal profession often uses the concept of “partner” more expansively, such as defining shareholders in a professional corporation as “partners”. The North Carolina State Bar concurred on the broader definition of “partners” by concluding that lawyers tend to qualify as “partners” once they reach a certain level of experience, status, or authority within the firm.

The opinion cautions that referring to a lawyer as a “partner,” “income partner,” or “non-equity partner” cannot be utilized for deceptive purposes. The opinion cites North Carolina Rule of Professional Conduct 7.1(a)(1), stating that a communication is false or misleading if it “contains a material misrepresentation of fact or law, or omits a fact necessary to make the statement considered as a whole not materially misleading.”

To avoid violations of 7.1(a)(1), the opinion advises that a law firm can designate a lawyer as a partner without meeting the technical definition of that term, only if the firm has promoted the lawyer by “legitimate criteria” and in accordance with some type of formal action, management vote, or according to the firm’s governing documents. The Committee did not set a standard for legitimate criteria because it acknowledged that law firms have distinct standards for promotion. However, the opinion does provide guidance on what constitutes valid criteria, such as experience, integrity, industry, intelligence, communication, legal knowledge, motivation, judgment, efficiency, and involvement.

To read the full North Carolina opinion, click here.

No Longer Up in Smoke? Ohio Lawyers May Now Advise Clients on the Marijuana Business

An amendment to an Ohio Rule of Professional Conduct 1.2 (Scope of Representation) permits lawyers to assist clients who are involved in the state-authorized medical marijuana business. The amendment was adopted in response to the Supreme Court of Ohio’s advisory opinion finding that counseling clients to engage in conduct that violates federal law—even if state law authorizes the conduct— and therefore also violates Ohio’s Rules of Professional Conduct. The Court suggested an amendment to the rule as a possible solution.

The amendment modifies Ohio Rule of Professional Conduct 1.2 by adding a subsection that specifically allows a lawyer to counsel a client regarding activities expressly permitted by the state’s medical marijuana law, on the condition that the lawyer also advises the client about a related federal law. The amendment does not address the Ohio Supreme Court’s concern that a lawyer who uses medical marijuana or participates in an Ohio regulated marijuana business commits a “technical” violation of federal law that may impact his trustworthiness, honesty or fitness to practice law. The opinion reserves that assessment to be applied on a case by case basis.

Twenty-four states have legalized medical marijuana, and most of those states have issued ethics opinions saying that legal guidance relating to the industry does not violate ethics rules so long as the client is informed about the illegality under federal law.

To read the Ohio Supreme Court advisory opinion, click here

To read the Ohio Supreme Court proposed amendment, click here

The Client Comes First: Lawyers Must Report Co-Counsel’s Potential Malpractice

The sanctity of the attorney-client relationship relies in large part on establishing and preserving a bedrock of trust between the parties. A recently released opinion by The New York State Bar reinforces this principle by concluding that a lawyer to must disclose to his client any potential malpractice of a co-counsel

This obligation arises when a lawyer “reasonably believes” that a co-counsel has committed a “significant error or omission.” The example used in the opinion is that of a lawyer who has learned that his co-counsel did not conduct discovery even though certain documents may have been critical to effective representation in the case.

The opinion recognizes that while a lawyer may desire to maintain a good relationship with co-counsel, the right of the client to be fully informed pursuant to New York Rule of Professional Conduct 1.4 (Communication) is paramount. However, the opinion notes that there is a potential that some lawyers could abuse this new duty to unfairly criticize co-counsel. The opinion addresses this fear and states that a lawyer cannot “wrongfully or improperly disparage the other lawyer in an endeavor to supplant him.”

To read the full opinion, click here.

New York: No Obligation for a Lawyer to Report a Judicial Misconduct

The New York State Bar Association’s (NYSBA) Committee on Professional Ethics recently opined that lawyers do not have a duty under the Rules of Professional Conduct (“RPC”)to report judicial misconduct; however, a lawyer may report a  judge for a violation of the Rules of Judicial Conduct (“RJC”). The opinion also cautions lawyers to be mindful of their duty of client confidentiality and to obtain client consent if necessary.

In reaching its conclusion the NYSBA Committee reviewed not only the currently reporting rule, but also the legislative history pertaining to the enactment of New York’s current Code of Professional Conduct.

RPC 8.3 discusses both a New York lawyer’s duty to report and to cooperate. RPC 8.3 reads:

“(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 shall report such knowledge to a tribunal or other authority empowered to investigate or act upon such violation.

(b) A lawyer who possesses knowledge or evidence concerning another lawyer or a judge shall not fail to respond to a lawful demand for information from a tribunal or other authority empowered to investigate or act upon such conduct.”

Notably, RPC 8.3(a) dictates a New York lawyer’s duty to report, while RPC 8.3(b) dictates a New York lawyer’s duty to cooperate. Importantly, RPC 8.3(a) does not include judges while RPC 8.3(b) does encompass judicial conduct.

The NYSBA’s Committee of Professional Ethics juxtaposed RPC 8.3 with its predecessor (Disciplinary Rule 1-103 of the former New York Code of Professional Conduct) and proposed amendments to RPC 8.3 that included the duty to report violations of the RJC. The Committee concluded that despite other states’ reporting requirements that include judges, the Committee would be overreaching if it mandated such a duty. The committee’s conclusion is based on the fact that the proposal to include judicial misconduct in the reporting requirements of RPC 8.3 was ultimately rejected by the courts upon adoption of the rules

Read the Opinion here.

California Interim Opinion Provides Guidelines For Attorney Bloggers

Lawyers who maintain non-legal blogs may preemptively celebrate that their recipe and music blogs would not be considered “communications” subject to California’s attorney advertising rule 1-400 even if they link to their professional law firm pages according to The State Bar of California’s second Proposed Formal Opinion Interim. Still, the generous opinion draws limits, as “extensive” or “detailed” information that identifies the blogger as an attorney and announces his availability for professional hire will trigger the rules, as such information is a communication in itself.

Unsurprisingly, a blog that is built into the lawyer’s or law firm’s professional website is as much subject to the advertising rules as is the firm’s website. However, an attorney’s individual blog, even if it discusses legal topics is not a communication for purposes of the advertising rules unless it implies that the attorney is available for legal employment. This implicit hint can be as subtle as describing the legal services or detailing case results.

Overall, this second proposal focuses on the importance of First Amendment protection to avoid chilling speech on legal commentary, even though the California Bar committee acknowledges that these blogs are motivated at least in part by business development concerns. By interpreting blogs as non-commercial speech where appropriate, the opinion hopes to serve as guidance rather than a strict conversation-chiller.

Read the new opinion here.

Texas Bar Ethics Committee Approves “Competitive Keyword Advertising”

Competitive keyword advertising in the legal services industry refers to the use of a competing lawyer’s name or firm name as a hidden “meta tag” or “keyword” to boost the visibility of online advertisements purchased from search engine companies (e.g., Google, Yahoo!, Bing). Typically, it is a less well-known lawyer who takes advantage of a more established lawyer’s brand name. The practice reduces barriers to entry in the legal industry, especially by helping new entrants challenge incumbent players. Eric Goldman & Angel Reyes III, Regulation of Lawyers’ Use of Competitive Keyword Advertising, 2016 U. Ill. L. Rev. 103, 107 (2016).

Notwithstanding the fact that the practice tends to give potential legal clients increased access to information on a greater diversity of legal service options, incumbent firms have challenged competitive keyword advertising on grounds that it violates the Rules of Professional Conduct. One such challenge was brought by Jim S. Adler, a personal injury attorney known for the size of his mass-market advertising budget who brands himself as “The Texas Hammer.” See Jim Adler & Associates, Attorney Jim Adler, Jim Adler Law Firm, September 9, 2016, http://www.jimadler.com/lawyers/jim-adler.

In a Request for an Ethics Opinion to the Texas State Bar Professional Ethics Committee, Mr. Adler asked the Texas State Bar Professional Ethics Committee whether competitive keyword advertising violates three Texas Disciplinary Rules of Professional Conduct: (i) Rule 7.01(d), which prohibits lawyers from holding themselves out as being associated with lawyers with whom they are not associated; (ii) Rule 7.02(a), which bars misleading communications about a lawyer’s qualifications or services; and (iii) Rule 8.04(a)(3), which prohibits conduct involving dishonesty, fraud, deceit or misrepresentation. See Request for an Ethics Opinion.

In a ground-breaking opinion, the Texas Bar Ethics Committee responded with approval for “competitive keyword advertising.” See Tex. State Bar Prof’l Ethics Comm., Op. 661, 7/16. It marked the first time an ethics panel has endorsed the practice. The panel described the practice as a “search-engine optimization” (“SEO”) technique that legal professionals can use to ensure their brand “appears on the first page of the search results obtained when a potential client uses a search engine to seek a lawyer.” Id.

To read Mr. Adler’s Request for an Ethics opinion, click here. To read the full opinion, click here.

Widening the Scope of the Administration of Justice: IAC Waivers in Plea Bargains

On June 10, 2016, the New York State Bar Association issued Opinion 1098, which prohibits prosecutors from ethically requiring that defendants waive ineffective assistance of counsel (“IAC”) claims as a condition in plea bargains. The New York State Bar Association’s ethics committee highlighted different issues surrounding IAC waivers of plea bargains—many of which affect not only criminal defendants, but also prosecutors, defense counsel, and the courts.

New York’s Rules of Professional Conduct Rule 8.4(d), identical to the American Bar Association’s Rule 8.4(d) denotes professional misconduct as when a lawyer “engage[s] in conduct that is prejudicial to the administration of justice.” New York maintains that a violation of 8.4(d) can occur even in good faith: “[I]f the conduct in question is likely to cause substantial individual or systemic harm to the administration of justice, regardless of the motivation of the party, we have interpreted Rule 8.4(d) to apply.”

The ethics committee affirms that prosecutors violate 8.4(d) by requiring IAC waivers because doing so creates an obvious conflict of interest for defense lawyers. More significantly, however, defense attorneys may fear that raising this conflict of interest issue may result in losing a valuable plea deal for their clients. Thus, defense lawyers are forced to decide between ignoring ethical obligations and working in the best interest of their clients.

Moreover, IAC waiver conditions in plea deals unduly burden the courts. If a defense lawyer asserts a conflict of interest that is not waivable, the lawyer must move to withdraw. The court then has to expend resources to determine whether the conflict of interest exists, conduct a balancing test, and possibly provide substitute counsel. The court could also decline the motion to withdraw; in that case, the defense lawyer must proceed despite an identified, personal conflict of interest. However, if defense counsel identifies a conflict of interest, but contends that it is waivable, the court must then investigate whether the defendant made a “knowing, intelligent, and voluntary” waiver.

Finally, IAC waivers undermine criminal defendants’ Sixth Amendment rights and chances for malpractice litigation. Plea deals preclude defendants from seeking civil recourse for lawyer malfeasance. As a result, criminal defendants have few avenues for malpractice litigation, and even if they do manage to show malpractice, nonpecuniary damages are not available.

This opinion reflects a growing trend because other states have associated the requirement of IAC waivers in plea deals with harming the administration of justice. Florida, Ohio, and Arizona established that IAC waivers are a per se violation of Rule 8.4(d). Nevertheless, New York allows a case-by-case evaluation regarding IAC waivers in plea deals: “[A] defendant who has been advised by an independent lawyer may waive an identified instance of ineffectiveness.” This emerging trend seems to reflect a wider reach to protect the “administration of justice.”

For the full opinion, click here.


Good Old Fashioned Rivalry: NY Bar Allows Attorneys to Represent Direct Competitors of Former Clients

A lawyer may represent a new client who is a direct competitor of a former client in an unrelated action against a third party, even where it would be in the former client’s best interest for the new client to lose the suit.

This representation would be in accordance with the New York State Bar Association’s recent opinion stating that economic adversity between two corporations does not necessarily mean there is a “material adversity” that would violate Rule 1.9 governing duties to former clients.

The rule currently states that a “lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client unless the former client gives informed consent, confirmed in writing.”

The rivalry between the two companies itself is not enough to be “materially adverse.” Therefore, mere competition between the companies is not a current client conflict or a former client conflict under the rules. This holds true for companies in the same industry and same geographic area that provide services to the same customer base.

However, the opinion also went one step further. It concluded that even if the former client is threatening to sue the new client in the matter, representation of the new client is still proper—so long as the previous and current matter aren’t substantially related.

Click here to read the opinion.

Misconduct Sanctions Subject to Appeal

Misconduct sanctions “can seriously impair an attorney’s professional standing, reputation, and earning possibilities, such an order can’t be brushed off as easily as a gnat. It is not just a slap on the wrist, or an angry remark by a judge in the course of a trial or other hearing,” Judge Posner explained in his recent ruling in Martinez v. City of Chicago.

Judge Posner’s opinion holds that nonmonetary sanction orders are subject to appeal. His ruling aligns with eight other courts that have decided the issue. The opinion distinguishes a mere angry remark by a judge, which would not be grounds for appeal, from an unfounded misconduct sanctions order that is akin to defamation.

The case involved a lawsuit against the City of Chicago and others for malicious prosecution and other torts. The plaintiff’s lawyers requested files from the Cook County State’s Attorney’s Office. The State Attorney’s Office claimed that the requested files no longer existed.

The district court ordered the State Attorney’s  Office to provide the plaintiff’s lawyers with access to 181 boxes of documents stored in a warehouse so that the plaintiff’s lawyers could attempt to locate the requested files .The plaintiff’s lawyers quickly found the relevant documents., The court ordered sanctions against the state attorneys for obstructing discovery.

To read the full opinion, click here.

New York Firms May Bill for Work of Unpaid Interns

A recent opinion issued by the Committee on Professional Ethics of the New York State Bar Association ruled that law firms may bill clients for the work of unpaid interns. Specifically, law firms are free to bill for work executed by unpaid interns, who receive academic credit in lieu of pay, so long as:

  • The internship program complies with applicable law,
  • The intern’s school does not object to the firm charging for the work, and
  • The charge is neither excessive nor illegal.

In response to the opinion, several organizations wrote an open letter, printed in the New York Law Journal, criticizing the decision as “fundamentally flawed.” Among the letter’s signatories are the CUNY Law School, the CUNY Labor Coalition, the NYU Black Allied Law Students Association, the NYU Latino Law Students Association, and the National Employment Law Project. In the letter, the signatories ask the ethics committee to reconsider its decision because the opinion “fails to consider the circumstances of most unpaid legal internships and the important moral questions they raise.”

The letter also challenges the assumption that unpaid internships at private firms comply with the applicable labor laws. The organizations contend that when a law firm charges for an intern’s free labor, they implicitly derive a substantial and economic benefit that cannot be offset by the academic credit that the interns receive, and they therefore may be entitled to pay.

To read Ethics Opinion 1090, click here. To read the letter, click here.

Hey “Darling,” There’s No More “Honey” In The Courtroom

The American Bar Association (ABA) House of Delegates passed Resolution 109, which states that it is a violation of professional responsibility to discriminate or harass in conduct related to the practice of law.

So, the use of “honey,” “darling,” and other remarks and gestures is now considered professional misconduct.

Although the discussion focused mainly on harassment and discrimination of women, the Resolution amends Model Rule 8.4 so that it now prohibits conduct that an attorney knows or should reasonably know is harassment or discrimination on the basis of race, sex, religion, national origin, ethnicity, disability, age, sexual orientation, gender identity, marital status or socioeconomic status in conduct related to the practice of law.

Proponents of the Resolution assert that without an overt prohibition on this type of conduct, the use of demeaning and misogynistic terms and actions to undermine opposing counsel and others will continue without repercussion.

However, whether this Resolution and amendment to Model Rule 8.4 will have the desired effect remains to be seen as it is within the province of each state bar to determine whether to adopt the amendment and if adopted, how to enforce it.

California Ethics Opinion Says ‘Keep Quiet’: Lawyers Cannot Reveal Client Secrets, Even if Publically Available

Does a secret stay a secret when it is posted on the Internet for anyone to find out about? According to common sense about confidentiality, it might seem obvious that sharing something online would utterly break any secrecy.

However, the State Bar of California disagrees and says such client secrets should still be protected. According to a recently finalized opinion, “[a] lawyer may not disclose his client’s secrets, which include not only confidential information communicated between the client and the lawyer, but also publicly available information that the lawyer obtained during the professional relationship which the client has requested to be kept secret or the disclosure of which is likely to be embarrassing or detrimental to the client.”

Even after the attorney-client relationship ends, a lawyer still cannot disclose potentially embarrassing or detrimental information—despite the fact that the information could be easily discovered on the Internet or in court files, the opinion said.

The new guideline may seem confusing in light of ABA Model Rule 1.9, which provides that information ceases to be a client secret when it is “generally known.” But a footnote in the opinion explains that “generally known” and “publicly available” are different ideas: generally known information is that which most people already know, whereas publicly available information is accessible by the public through searching different online or court sources.

The California state bar explains its guidelines through several hypotheticals about a lawyer who defended a hedge fund manager against fraud claims. For example, in one hypothetical the hedge fund manager blogged about confidential information, and the opinion states that the lawyer had a duty to protect that information as a client secret; therefore forwarding the blog to friends would violate that duty. These hypotheticals illustrate that client information does not lose its confidential nature merely because it is publicly available.

The opinion emphasizes a lawyer’s core duty to keep quiet about clients’ sensitive information, even if some members of the public could share and discuss the same information freely.

To read the full opinion, click here.

Ohio Advises on the Use of Flat Fee Agreements in Criminal Cases

In its recent Ethics Opinion 2016-1, the Supreme Court of Ohio’s Board of Professional Conduct addressed the issue of whether an attorney retained in a criminal matter can enter into a flat fee agreement requiring a client to pay a fixed amount in advance of representation.

Interpreting Ohio Rule of Professional Conduct 1.5, the board advised that fixed fee agreements are permissible; however, if the representation is not completed for any reason, the attorney is obligated to return any unearned portion of the fee regardless of whether the fee was designated “nonrefundable” or “earned upon receipt.” Moreover, a flat fee must be deposited in the attorney’s trust account unless it is designated “nonrefundable” or “earned upon receipt.” The board further advised that when a fee is designated as “nonrefundable” or “earned upon receipt,” it does not need to be deposited in the trust account; however, the client must be advised in writing that he or she may be entitled to a refund pursuant to Rule 1.16(e) if the attorney withdraws from the case before the representation is completed.

To read more about the Opinion, click here.

A Lawyer in Motion—A Conflicts Puzzle Solved

The Utah Bar recently considered the following conflicts inquiry. Lawyer A represented a wife in a divorce proceeding and then moved to a new law firm #2. New law firm #2 had previously represented the husband in the same divorce; the husband consented to the wife’s attorney’s continued representation of her for the purpose of mediation and settlement negotiation. The wife’s attorney did not have access to the husband’s file.

Later, the wife’s attorney moved to a third, separate law firm #3. The wife approached her attorney at law firm #3 to seek representation for post-decree enforcement proceedings against the former husband. So, could the attorney continue to represent the wife while at law firm #3?

According to the Utah State Bar’s Ethics Advisory Opinion Committee, the wife’s attorney could continue to represent her at the third firm. In a February 2016 opinion, the Committee explained that a lawyer may represent a spouse in post-divorce matters at a firm, which the lawyer recently joined, even if the lawyer’s former firm previously represented the other spouse in the divorce case. So long as the wife’s lawyer has no actual knowledge of the husband’s information, no ethical violation occurs.

Utah’s Rule of Professional Conduct 1.9(a) states that a “lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client.” Applying this rule and its exceptions to the situation stated above, the Committee explained that while the spouses were considered adverse parties, the conflict had been cured. The Committee explained the actions that cured the conflict included the written consent from the husband and the attorney’s sequestration from the husband’s information at the second firm.

Read the recent advisory opinion here.

An Attorney’s Duty of Confidentiality: Responding to a Subpoena for Client Files

On February 16, 2016, the ABA issued Formal Opinion 473, which revisits Formal Opinion 94-385 that was issued in 1994. In 1994, Model Rule 1.6(b), provided only two instances when a lawyer could disclose confidential information in response to a subpoena—to protect against certain crimes and to establish certain claims or defenses on behalf of the lawyer.


Today, Model Rule 1.6(b) lists seven exceptions that permit, but do not require, an attorney to disclose client information, one of which is in compliance with a court order. Although Formal Opinion 94-385 acknowledged an attorney’s obligation to take measures to protect the confidentiality of a client, Formal Opinion 473 addresses concerns that have arisen over the past 21 years and provides guidance regarding the disclosure of client information pursuant to a court order.


For example, the opinion suggests that after receiving the initial demand, an attorney should first consult with his client to discuss possible courses of action. During this consultation the attorney should advise on the potential claims that may be asserted against disclosure, as well as the possible consequences disclosure may have for the client. If the lawyer and client disagree about how to respond to the demand, the lawyer may withdraw in compliance with Model Rule 1.16, but must protect the client’s interest until the client obtains another attorney.


If the client is unavailable for consultation, or if the client consents to disclosure, an attorney must nonetheless “assert all reasonable claims against disclosure and seek to limit the subpoena.” If the attorney is unable to locate his client, further appeal is not ethically required because it places an undue burden on the lawyer. Regardless, if the attorney is ultimately ordered to produce a client’s documents, the attorney must reveal confidential information only to the extent that is reasonably necessary.



To read Formal Opinion 473, click here.

Attorneys v. Clients: Clients Ordered to Pay $350K for Online Defamation

As the old adage goes, “It takes 20 years to build a reputation and 5 minutes to ruin it.”  Disgruntled clients are increasingly posting defamatory reviews on widely available public online attorney review websites. Some attorneys have begun fighting to protect their online reputations by filing defamation suits against their former clients.

On January 6, Florida’s Fourth District Court of Appeal held that the First Amendment does not protect demonstratively false allegations that a former client wrote about her attorney and posted online. The court determined that the comments posted on Avvo and other attorney review websites were factually inaccurate statements rather than statements of opinion. The comments included claims that the attorney misrepresented her fees and falsified a contract to support the increase in fees.  The court ordered the client and her husband to pay $350,000.00 in punitive damages for defamation

The court’s decision has been hailed as a potential turning point in the online battle among some attorneys and their clients that is damaging to attorneys’ reputations. However, it is important to note that a similar ‘client vs. lawyer’ defamation case in another state may not result in a similar award; Florida statutes allow targets of per se defamation to recover punitive damages even when the plaintiff cannot demonstrate a quantifiable loss. By contrast, there are higher evidentiary burdens in other jurisdictions that require punitive damages to be based on the amount of actual damages. Without a calculable loss, this burden would create a barrier to achieving a similar result.

To read the trial court’s opinion, click here.

Rhode Island Approves Attorney’s “Winning” Advertisement

A lawyer whose last name rhymed with win may use an advertisement that proclaims “Win with [insert attorney’s rhyming last name].” Rhode Island Supreme Court’s Ethics Advisory Panel (“The Panel”) Opinion 2015-03 held that the slogan is not misleading, and a reasonable person would not be hoodwinked into believing the lawyer will always succeed; however, it should be noted that the inquiring attorney indicated the advertisement would include the disclaimer “Prior results do not guarantee similar outcome.” Moreover, the attorney plans to include similar language in his retainer agreement where a client will initial that statement.

The Panel framed the issue as “whether there is a substantial likelihood that the proposed rhyming slogan…would lead a reasonable person to form an unjustified expectation about the results that the inquiring attorney would achieve.” The Panel found that the slogan would not be misleading and based its decision on Rhode Island’s Rule 7.1: Communications Concerning A Lawyer’s Services and the 2007 amendments to the rule.

In 2007, Rule 7.1 was amended, and new comments explaining misleading statements added the qualifiers “substantial likelihood” and “reasonable person” to Comments [2] and [3] of the rule.

Comment [2] states:

A truthful statement is misleading if it omits a fact necessary to make the lawyer’s communication considered as a whole not materially misleading. A truthful statement is also misleading if there is a substantial likelihood that it will lead a reasonable person to formulate a specific conclusion about the lawyer or the lawyer’s services for which there is no reasonable factual foundation.

Comment [3] states:

An advertisement that truthfully reports a lawyer’s achievements on behalf of clients or former clients may be misleading if presented so as to lead a reasonable person to form an unjustified expectation that the same results could be obtained for other clients in similar matters without reference to the specific factual and legal circumstances of each client’s case . . .

The Panel explained that in today’s world, advertising is found everywhere—billboards, print, television, radio, and the Internet. Thus, “reasonableness” is the standard used to determine whether an advertisement is misleading. The Panel found the attorney’s advertisement that cleverly rhymes his last name with “win” to be reasonable in light of his disclaimers and the public’s constant exposure to all manner of advertising in today’s digital world.

For more information on the advisory opinion click here.

California Lawyers Receive Clarification on the Limits of Negotiation ‘Puffery’

The State Bar of California Standing Committee on Professional Responsibility and Conduct released an opinion this month concluding that while engaged in negotiations on behalf of a client, an attorney’s puffery and posturing are generally permissible, but false statements of fact or implicit representations are prohibited. The opinion is consistent with the 2006 ABA Standing Committee on Ethics and Professional Responsibility Formal Opinion on the same topic.

The committee interpreted sections of the Rules of Professional Conduct of the State Bar of California and the Business and Professions Code as they applied to a hypothetical scenario involving negotiations in an automotive personal injury suit. It analyzed six statements made by two attorneys from the scenario; of the six, one was found to be clearly permissible puffery. The lawyer made an inaccurate representation regarding his client’s “bottom line,” but the committee explained that such statements are not considered “verifiable statements of fact” because parties should expect that the opposition will not reveal its true goals or willingness to compromise during negotiations. Four other statements made of the attorneys’ own volition were considered impermissible conduct on the part of the lawyers, and the sixth statement—which was the result of a client’s instruction—was analyzed in further detail.

In the sixth statement, the plaintiff instructed the attorney to conceal a material fact (new employment). Because the employment would affect the client’s ability to collect lost future earnings, the failure to disclose this fact would be an implicit misrepresentation that the client had not yet found a job. The committee continued and explained that the attorney should first counsel the client against the misrepresentation and/or suppression, and if the attorney is unsuccessful, they must then withdraw from representation.

New Social Media Opinions: West Virginia and Colorado

Recently, two more states, West Virginia and Colorado, joined the legal ethics conversation regarding social media, issuing opinions that are generally consistent with most other states’ social media opinions.

In September 2015, the Lawyer Disciplinary Board of West Virginia issued new social media and social networking guidelines titled “Social Media and Attorneys.” Specifically, the Board addressed the following topics: attorney competency, taking down posts, avoiding contact with represented persons, contacting unrepresented persons, monitoring third-party reviews and endorsements, protecting confidentiality, honesty in endorsing other lawyers, researching jurors, friending judges, and avoiding inadvertent lawyer-client relationships. The Board concluded in part that attorneys may not make statements on social media that the attorney knows or reasonably knows will be disseminated publicly and will have “a substantial likelihood of materially prejudicing an adjudicative proceeding,” subject to certain exceptions listed in the rule on trial publicity. Additionally, the Board opined that attorneys may accept client reviews but must monitor the reviews for accuracy. Regarding advising clients on their social media presence, the Board concluded that attorneys may advice their clients to change the privacy settings of their social media pages, but attorneys may not instruct their clients to “destroy, alter, or conceal any relevant content on their social media pages.” Instead, attorneys must take the appropriate steps to preserve the information in the event that it is discoverable or relevant to the clients’ cases.

Also in September 2015, the Colorado Bar Association Ethics Committee issued its opinion titled “Use of Social Media for Investigative Purposes.” The Committee concluded that investigation of public profiles and posts is always permitted. Limits apply, however, when permission is requested to view restricted or private content. The opinion addresses ethical issues that arise when lawyers, either directly or indirectly, use social media to obtain information regarding witnesses, jurors, opposing parties, opposing counsel, and judges.

Both West Virginia and Colorado came to the following conclusions, among others: Regarding attorneys reviewing jurors’ Internet presence, attorneys may review public sections of a juror’s social networking presence, but may not attempt to access private sections of a juror’s social media page or use the assistance of a third party to do so. Moreover, attorneys may not seek to communicate ex parte with a judge through social media concerning a matter or issue pending before the judge. The Colorado opinion further states that attorneys may not request permission to view restricted portions of a judge’s social media profile while the judge is presiding over a case in which the lawyer is involved as counsel or as a party.

In a nutshell, both opinions conclude that lawyers must comply with the ethics rules when using social media just as when using other forms of communication.

To read the full West Virginia opinion, click here. To read the full Colorado opinion, click here.

Is Your LinkedIn Profile Attorney Advertising?

Does an attorney’s LinkedIn profile necessarily constitute attorney advertising?

In analyzing whether a LinkedIn profile is advertising, The Association of the Bar of the City of New York Committee on Professional Ethics Formal Opinion 2015-7 (“Opinion”) applied the New York Rules of Professional Conduct’s definition of an advertisement, which is “any public or private communication made by or on behalf of a lawyer or law firm about that lawyer or law firm’s services, the primary purpose of which is for the retention of the lawyer or law firm.”

The Committee concluded that if the primary purpose of an attorney’s LinkedIn profile is not to attract new clients, it is not advertising. So, how does an attorney define primary purpose? The Opinion explains that if the following criteria are met then a LinkedIn profile is advertising:

  1. It is communication made by or on behalf of the lawyer;
  2. The primary purpose of the LinkedIn content is to attract new clients to retain the lawyer for pecuniary gain;
  3. The LinkedIn content relates to the legal services offered by the lawyer;
  4. The LinkedIn content is intended to be viewed by potential new clients; and
  5. The LinkedIn content does not fall within any recognized exception to the definition of attorney advertising

The Opinion’s elaboration on each of the criteria may be found here.

So what do you do if your LinkedIn profile is considered an advertisement?

The Committee noted that a LinkedIn profile that constitutes advertising must comply with all of New York’s attorney advertising rules, including, but not limited to, the inclusion of the label “Attorney Advertising” legibly placed on the profile along with the name, principal law office address, and telephone number of the attorney. Additionally, the advertisement must not be deceptive or misleading.

The Committee also cautioned attorneys to personally “pre-approve” their advertisements, and reminded them that LinkedIn is considered to be a “computer-accessed communication” and thus must be retained for at least one year in accordance with New York’s attorney advertising rules.

The Opinion is novel in that it is the first ethics advisory opinion to conclude that all attorney LinkedIn webpages (or other social media profiles) are not necessarily advertisements. It will be interesting to see whether other bar associations and state bars follow New York City’s lead.

What’s In A Name? Lending Name to Out of State Attorney Results in Suspension

An Order was recently entered by the Supreme Court of New Jersey, suspending an attorney from the practice of law for a period of three months as a direct consequence of his allowing the use of his name and law license by a California attorney seeking to practice in New Jersey.


The attorney acknowledged to the Office of Attorney Ethics that his partnership with the California firm was a ‘legal fiction’ created in order to allow a California attorney to open and operate a law firm in New Jersey.


As a result of this violation, he was found guilty of violating Rules of Professional Conduct 1.15(d) (failure to keep appropriate financial records and controls), 7.1(a)(1) and 7.5(d) (name of firm contained New Jersey attorney’s name, despite the fact that he had no role in any of the firm’s business), 8.4(c) (allowing the firm to use New Jersey attorney’s signature stamp on correspondence with clients and opposing counsel, thereby intentionally misrepresenting his affiliation with the firm), and 5.3(a) (failing to make reasonable efforts to ensure that the conduct of non-lawyer staff complied with the professional obligations of the lawyer, which resulted in the misappropriation of client funds).


In reaching its decision to affirm the suspension, the Supreme Court considered a number of mitigating factors including the fact that the attorney was a “relatively young and inexperienced attorney who was likely easily controlled” by the California attorney, the attorney did not make misrepresentations to a judge, and he had no history of discipline. In addition to the suspension, the Supreme Court further required the attorney to reimburse the Disciplinary Oversight Committee for administrative costs and actual expenses incurred in the prosecution of the matter.


To read more, click here.

South Carolina Attorneys May Tout Certification as Privacy Professional

Can attorneys use a Privacy Professional as their designation in a signature block? Are attorneys implicating ethics rules, such as advertising, by doing so? The South Carolina Bar recently issued an Ethics Advisory Opinion stating that a lawyer who is a Certified Information Privacy Professional/US (“CIPP/US”) may use that designation in her e-mail signature block and other communications.

A hypothetical was posed to the Ethics Advisory Committee by a member of the South Carolina Bar: In the hypothetical, an attorney, working for an entity that collects and processes private data, obtained a CIPP certification by passing an exam that was “designed to be challenging” and that “required study and preparation.” The attorney was curious as to whether she may use the designation “CIPP/US” in her e-mail signature block. The use of the designation was found to be permissible because “the designation truthfully reflects a recognized professional certification available to both lawyers and non-lawyers[s], is objectively verifiable, and is not misleading.” The committee reasoned that use of the designation does not violate Rules 7.1, 7.2, or 7.4. of the South Carolina Rules of Professional Conduct.

Rule 7.1 provides that a lawyer “shall not make false, misleading, or deceptive communications about the lawyer or the lawyer’s services.” As the committee explained, use of the designation is “neither false nor misleading” because the “designation is given by a recognized association” and “granted by the association based on objectively verifiable criteria.”

Rule 7.2(a) “allows advertising through written, recorded or electronic communication, including public media.” Here, the committee explained that use of the designation is information because it “alerts a person that Lawyer has taken and passed examinations in privacy protection topics.”

Finally, Although Rule 7.4(b) prohibits the use of “any form of the words ‘certified,’ ‘specialist,’ ‘expert,’ or ‘authority’ when describing areas of limited or concentrated practice,” use of the designation is permissible. Referencing S.C. Bar Ethics Adv. Op. 93-97, the committee reasoned that an “attorney who was licensed as both an attorney and a Certified Professional Accountant” could use both professional designations, despite Rule 7.4(b).

For more information on this recent advisory opinion click here.

Crowdfunding for Legal Fees?

What is crowdfunding? It is the use of an Internet site to share information about a project in order to solicit money from the public. Individuals who contribute are not given a financial stake in the project.

So, may an attorney post information about anticipated litigation and ask for funds as a way to be paid his fees as long as contributors do not gain any influence in how the case is handled or a stake in the outcome?

The Philadelphia Bar Association Professional Guidance Committee recently released Opinion 2015-6, which addresses an attorney’s use of crowdfunding to obtain legal fees from third parties on behalf of a client who cannot afford to pay for legal services. The Committee approved the general concept of crowdfunding, but with certain restrictions on its use.

The Committee opined that an attorney should obtain the client’s informed consent and be mindful of his duty of loyalty to the client. The Committee cautioned that an attorney’s online descriptions must avoid any implication that contributors are granted a right to direct or control litigation. Additionally, the Committee stressed the importance of ensuring that contributors do not feel that they have been misled in any way. Not only might a misleading description be a violation of the advertising rules and the obligation not to mislead third parties, but also, it might impede on the ability of future litigants to use crowdfunding to raise the fees necessary to assert their legal rights.

Finally, the Committee provided guidance on provisions that should be included in the fee agreement to avoid contracting for excessive or impermissible nonrefundable fees. (In other words, the attorney could potentially receive fees from crowdfunding that might be deemed excessive depending upon the nature of the case and the attorney’s participation in the case.) First, the agreement should include terms describing the lawyer’s obligation to remain on the case until its conclusion or until a point at which the retention of the contributions would not constitute an excessive fee. Second, the agreement should require that the funds raised be retained in a trust account until they are earned in accordance with the fee agreement.

Crowdfunding is another product of technology and the Internet that may assist in providing the public with greater access to legal services, but lawyers must beware of ethical landmines by understanding the technology at play within the context of the legal ethics rules.

Attorneys Beware: Mailing a Subpoena that Warns of Noncompliance Sanctions May Constitute an Ethical Violation

May attorneys include language threatening sanctions for noncompliance when they send a subpoena duces tecum by mail? The Supreme Court of New Jersey’s Advisory Committee on Professional Ethics released an opinion this month clarifying that subpoenas sent by mail should not include language threatening sanctions for noncompliance, because the threats, at a minimum, are inaccurate and misleading.

The committee explains in the opinion that under the applicable rules of civil procedure, subpoenas must be served personally in order to create the personal jurisdiction required over the recipient for a court to deem that party in contempt for failure to comply with the subpoena.  In practice, many subpoenas are mailed when parties and witnesses reach an agreement to effect service by mail.  However, the committee was clear that this agreement does not provide the court with any contempt power over the recipient. Thus, the threat of sanctions is misleading cases because it misstates the immediate consequences for noncompliance.

The opinion provides that going forward, a New Jersey attorney who intentionally includes threatening language in these documents may be in violation of the local Rule of Professional Conduct 8.4(c), which governs conduct involving misrepresentation.

For more information, read the opinion here.

Taking Accountability Over Accounts: Familial Relationship Is No Excuse

The Supreme Court of Ohio recently released an opinion the sanctions to be imposed on two attorneys for their violations of several rules of professional conduct, including Professional Conduct Rules 1.5(a) (excessive fees), 1.15(a) (holding client funds in interest-bearing account with a clear fiduciary title), 1.15(a)(2) (maintenance of complete records of accounts with client funds), and 1.15(a)(5) (monthly reconciliations of accounts with client funds).

In this case, the attorneys—along with their client—were signatories on a special account set up by the firm as the client’s primary vehicle for managing her money. A third attorney, the father of the two signatory-attorneys, was primarily responsible for preparing accountings on the special account. The account did not bear interest, was not designated as a fiduciary account, and was not reconciled on a monthly basis. The attorneys also failed to maintain complete and accurate records on the account. The issue that received most of the court’s attention, however, was the charging of excessive legal fees. The client was essentially charged separate attorney fees, some of which were paid through the special account, for nonlegal services and was charged twice for several services. Additionally, unbeknownst to the two attorneys appearing in this case, some of the attorney fees were paid directly to their father.

The attorneys argued that their father was the “mastermind” behind the excessive fees and that they were “restrained from acting in the best interests of their client, at least in part, because of the familial relationship.” The Ohio Supreme Court declined to accept such a “family relations” excuse and declared that neither case law nor professional conduct rules offer an exception for situations where an attorney is complicit in a relative’s conduct. Ultimately, the court emphasized the responsibility that attorneys have to act in the best interests of their clients, even when that would require preventing the actions of relatives. The court concluded that because both attorneys had a fiduciary responsibility to oversee the special account and because their “collective silence…by their failure to oversee the special account was vital to their father’s success in overcharging,” both were ultimately responsible for the charging of excessive fees. The court therefore ordered both attorneys to pay restitution.

Representing the Child and her Guardian: Conflict of Interest?

On August 19, 2015, the New York State Bar Association issued a formal ethics opinion, which advises that an attorney who represents a child in Federal Immigration Court may also be competent to simultaneously represent the proposed guardian of the child in State Family Court proceedings. The opinion conducts a traditional conflicts of interest analysis to conclude that the representation is permissible as long as both parties provide informed written consent and the attorney reasonably believes he or she can competently and diligently represent both clients at the same time. While the opinion employs a traditional analysis, it also notes the unique issues that may arise when representing a minor in an immigration proceeding.

The opinion addresses conflicts of interest that may occur when a lawyer represents a child who is attempting to qualify for a deportation exception called the “Special Immigrant Juvenile Status” (SIJS). SIJS permits minors who have been abused, neglected, or abandoned by their parents in their country of origin and who are declared dependent on a juvenile court to obtain permanent legal status in the United States.

The procedure for obtaining SIJS in Federal Immigration Court proceedings includes the appointment of a guardian through Family Court. Although the proposed guardian and child often have a common goal, the child and guardian may have differing interests posing a potential conflict of interest for a lawyer representing both parties.  For example, the child may not want a guardian or may prefer another adult to be appointed as her guardian.

To obtain the child’s consent to the simultaneous representation, the lawyer must fully disclose the material risks and reasonably available alternatives. Then, the lawyer must believe that the child has the capacity to understand the conflict and make a reasoned decision to consent, and the consent must be voluntary. The opinion noted that there are opinions finding that a minor may not have capacity to consent and that there is no specific age at which a child may have such capacity; however, generally a verbal child who is twelve years or older will be capable to make a reasoned decision in this situation.

Click here to read the full text of the opinion.

If It’s Not “Real Time,” Is It Solicitation? Florida to Reconsider Rule on Prohibited Solicitation

In light of the Florida Bar’s recent decision to permit attorney advertising by texting, the Florida Bar Board of Governors will review amendments to Florida’s solicitation rule at its meeting on December 4, 2015.

The proposed amendments focus on the definition of “real time” contact to clarify that a lawyer may not solicit “in person.” The proposed amendment not only adds the “in person” language, but also further defines “solicit” to include: “by electronic means that include real-time communication face-to-face such as video telephone or video conference.” Thus, the language expands “in person” by prohibiting attorneys from contacting prospective clients through means such as Skype, Face Time, or Google Hangouts.

The proposed amendment  incorporates the recent  texting decision by removing both telegraph and facsimile from the language as well as the phrase, “includes any written form of communication, including any electronic mail communication, directed to a specific recipient . . . ,” from 4-7.18(a)’s definition for “solicitation.”

Some view the changes as a signal that the Florida Bar is attempting to adopt advertising amendments that embrace the digital age…

Read the proposed amendments to Rule 4-7.18(a) here.

Storing Client Data in the Cloud is Ethical, With Safeguards

On September 11, 2015, the Tennessee Supreme Court Board of Professional Responsibility confirmed in Formal Opinion 2015-F-159 that a lawyer may ethically allow client confidential information to be stored in “the cloud.” In doing so, the lawyer must take reasonable care to ensure that client materials remain safe and confidential.

“The cloud” is a remote location controlled by a third party that provides storage or other computing services. Rather than having information stored on a server or personal computer, access to cloud computing technology allows lawyers to transmit, process, and manage their client’s data from a remote location. One benefit of cloud computing technology is that the cloud service provider takes on the responsibility for new technology and software updates.

Because technology is constantly changing, lawyers must stay abreast of these changes and ensure that they continue to comply with the rules of professional conduct. It must be noted that this opinion does not mandate any specific practices that a lawyer must follow when using cloud computing technology. Rather, the opinion provides guidance to lawyers on how to exercise judgment when using cloud technology in order to remain compliant with the rules of professional conduct. For example, when using cloud computing technology a lawyer must abide by several Rules: Rule 1.1, which requires a lawyer to act competently; Rule 1.6, which requires a lawyer to take practical measures to protect the confidentiality and security of the client information stored in the cloud technology; and Rule 1.9, which states that a lawyer has a duty to former clients to not reveal any client information relating to the representation except as the Rules permit or require with respect to the client.

This recent opinion follows several other states that have provided commentary on cloud technology and what lawyers in those jurisdictions should consider. The opinion provides commentary on the subject by different states, including Florida, Kentucky, and Alaska.

Although cloud-based services are available for use by lawyers, reasonable care must be exercised when storing client information in the cloud to ensure that it is stored safely. If the client’s information is at risk, this cloud could rain on the lawyer’s head!

To read our other posts on cloud computing click here.

South Carolina: Linking Google AdWords to Opposing Party and Counsel Violates Legal Ethics Rules

A South Carolina attorney—who used Google AdWords to link his law firm’s advertisement to the names of an opposing party timeshare company and three attorneys associated with the timeshare company—was prosecuted by the South Carolina Bar for violations of South Carolina’s advertising rules and the Lawyer’s Oath contained in South Carolina Appellate Court Rule 402(k).

The attorney’s use of Google AdWords created a situation such that when an individual searched the Internet for the opposing counsel or the opposing party, there was a likelihood that the attorney’s law firm website would appear in the search results. The South Carolina Lawyer’s Oath pledges fairness, integrity, and civility in all written communications to opposing parties and their counsel.

The matter was settled when the attorney agreed to a public reprimand, the completion of a legal ethics course and payment of costs incurred in the investigation and prosecution of the matter. The South Carolina Supreme Court approved the settlement.

To read the public reprimand and opinion accepting the agreement, click here.

Federal Court: Florida Limitations on Advertising Specialization Are Unconstitutional

On September 30, 2015, a Florida federal court held that the Florida advertising rule that prohibits an attorney from truthfully stating that he or she specializes in a specific field of law is a violation of the First Amendment and therefore unconstitutional. The rules currently require that a lawyer may only claim a specialization or expertise when the lawyer has been certified under the Florida Certification Plan, or by an organization whose specialty certification program has been accredited by the American Bar Association or the Florida Bar; or the lawyer has been certified by another state bar if the state bar program grants certification on the basis of standards reasonably comparable to the standards of the Florida Certification Plan. The opinion explains that, “the state cannot prevent a person from advertising a lawful specialty, even if the state’s own definition of the specialty is different.”

The issue is one of several in the Searcy, Denny law firm’s suit against the Florida Bar. The claim partially derives from the fact that not every field of law has a board certification. Therefore, according to the Florida rule, an attorney who specializes in mass torts or unsafe products cases is not permitted to truthfully state that he specializes in these fields, because there is no board certification available.

Florida has some of the most detailed advertising rules in the country; however, the rule at issue is a common one.  It will be interesting to see whether other states amend their rules in accordance with the Florida opinion.

For more information on the recent decision, click here. To read the opinion click here.

Defining the Practice of Law: North Dakota Admonishes Minnesota Attorney for UPL

Does the title “staff attorney” define the practice of law? The Supreme Court of North Dakota believes so. In a recent opinion, the Supreme Court of North Dakota admonished a Minnesota attorney for, engaging in the unauthorized practice of law, in violation of N.D.R. Prof. Conduct 5.5(d) The attorney—who is barred in Minnesota—was working for a Minneapolis based law firm that also has an office located in Bismarck, North Dakota. The attorney relocated to North Dakota to function as a lobbyist and also to assist with the drafting of real estate title opinions.

In a press release, the law firm announced that they had hired five new staff attorneys and included the attorney among the five. Additionally, the attorney identified himself as a “staff attorney” when applying for admission to the North Dakota State Bar.

Relying on the 1998 Ohio case of In re Application of Stage, 692 N.E.2d 993 (Ohio 1998), the court highlighted the requirements for avoiding confusion regarding whether an individual is a licensed attorney in a state. The court held that individuals who are not admitted to that state’s bar may not use designations such as “General Counsel,” “Managing Counsel,” or “any other term implying [that] the individual is already admitted to the practice of law” unless the individual provides a disclaimer explaining that he or she is not licensed to practice law in that jurisdiction.

The respondent argued that the North Dakota Disciplinary Board failed to show that the out-of-state attorney actually practiced law while working at the firm because his activities of working as a lobbyist and assisting licensed attorneys with researching and drafting title opinions did not constitute the practice of law. However, the court rejected this argument, concluding that regardless of whether he actually performed work as an attorney Rule 5.5(d) makes it a violation to even represent to the public that the individual is admitted to practice law in the jurisdiction. Therefore, the violation occurred as a result of the firm’s press release, and by the attorney’s designation as a “staff attorney” in the state.

Thus, an attorney needs to make sure that his or her conduct does not constitute the practice of law in a state where he is not licensed. If an attorney is working in a state where he is not licensed, best practice for the firm and the attorney is to clearly disclose that the attorney is not a licensed attorney in that state. Such disclosures will serve to avoid allegations of the unauthorized practice of law.

For the full opinion click here.

Indiana Advisory Opinion on Reporting Child Abuse: Attorneys’ Obligations & Constraints

What happens when an Indiana lawyer learns, while representing a client, that a child is a victim of abuse or neglect? Must the lawyer make a report to the Indiana Department of Child Services or local law enforcement? The Indiana State Bar Association (“ISBA”) Legal Ethics Committee’s advisory conclusion is essentially, “it depends.”

In Formal Opinion 2 of 2015, the ISBA concluded that absent client consent, an attorney may not report information about suspected child abuse learned during a representation unless the lawyer believes it necessary “to prevent reasonably certain death or substantial bodily harm.” Notably, the ISBA cautioned that the Indiana Supreme Court is the final authority on both Indiana law and the professional conduct of Indiana lawyers.

Generally, under Indiana Rule of Professional Conduct 1.6(a), a lawyer may not “reveal information relating to representation
of a client . . . .” However, Indiana Code §§ 31-33-5-1 and 5 broadly require that any “individual who has reason to believe that a child is a victim of child abuse or neglect” to “immediately make an oral report to (1) the department [of Child Services] or (2) the local law enforcement agency.” Failure to report constitutes a Class B misdemeanor under Indiana Code §31-33-22-1(a). This broad statute does not exempt lawyers from the reporting requirement. As a result, there is a direct conflict between a lawyer’s ethical duty to keep silent and the apparent statutory duty to speak.

The committee expressed that constitutional, pragmatic and statutory reasons dictate that the lawyer’s duty of confidentiality is generally paramount over the general duty
to report. The committee reiterated that Indiana’s constitution gives the Indiana Supreme Court authority to regulate lawyers. This authority indicates that the Indiana Rules of Professional Conduct, which are promulgated by the court, “control over conflicting legislation.” After determining that Rule 1.6 generally trumps Indiana’s child abuse reporting statute, the committee concluded that, unless the client consents to disclosure, the rule forbids the attorney to report any abuse that does not come within the exception in Rule 1.6(b)(1) authorizing the disclosure of information necessary “to prevent reasonably certain death or substantial bodily harm.” Absent the client’s consent, mandatory reporting would undermine the “fundamental principle” that “the lawyer must not reveal information relating to the representation” because confidentiality is critical to encouraging clients “to seek legal assistance and to communicate fully and frankly” with lawyers.

Nevertheless, the committee held that lawyers must report information relating to child abuse or neglect if they believe it necessary “to prevent reasonably certain death or substantial bodily harm,” regardless of the client’s wishes. However, a lawyer may not report information of lesser harm without the client’s consent.

Although ISBA noted that Formal Opinion 2 of 2015 is advisory in nature and does not have the force of law, it is important for lawyers to obtain as much information as possible prior to disclosing information regarding possible child abuse. If the attorney does not have information that would lead him or her to be reasonably certain that death or substantial bodily harm was going to occur, the attorney could be potentially violating the rules of confidentiality.

Click here to access the full opinion.

Discriminatory Organizations: To Participate or Not To Participate?

In Opinion No. 1 of 2015, the Indiana State Bar Association Legal Ethics Committee addressed the extent to which Indiana Rule of Professional Conduct 8.4(g) limits a lawyer’s participation as a leader of a nonprofit organization that discriminates through membership requirements (e.g. on the basis of religion, gender, race, etc.). That rule prohibits lawyers from “engag[ing] in conduct, in a professional capacity, manifesting…prejudice” based upon certain types of characteristics. Several other states, including Florida, have an anti-discrimination clause in their professional conduct rules guiding attorneys.

The main hurdle with which the Committee struggled was the lack of guidance from the Indiana Supreme Court on the definition of “professional capacity.” The Committee first reviewed the six Indiana cases that have applied Rule 8.4(g) and then reviewed a number of cases in which lawyers were disciplined for conduct that was unrelated to the representation of a client. It found that although the rule encompasses conduct in the course of representing a client, the rule’s reach goes well beyond that.

Having established that the bounds of Rule 8.4(g) extend beyond actions taken in a representative capacity, the Committee next turned to the question of how far those boundaries go. After an analysis of both the New Jersey Supreme Court’s interpretation of its own version of Rule 8.4(g) and Indiana’s Model Code of Judicial Conduct, the Committee decided that the rule is meant to catch only such conduct where the lawyer’s status as a lawyer is a relevant part of his or her role and where the conduct was intended or likely to discriminate. Further, even in such cases, the attorney may still be protected from the rule’s application, depending on the nature of the organization. That is because, in some types of organizations, the constitutional freedom of association may apply. The Committee noted that typically, smaller, more intimate organizations have been afforded greater protections of associations, whereas organizations whose goals involve other recognized freedoms have been afforded such protections only in more stringent circumstances.

In short, the Committee concluded the following: (1) mere legal representation of such organizations—without making discriminatory comments—is not a violation of the rule; (2) participation in a personal capacity is not a violation of the rule; and (3) participation where status as a lawyer is connected to the participation and where the lawyer intends to personally participate in activities that advance discriminatory policies may be a violation of the rule, depending on the nature of the organization and the lawyer’s role in it.

Ohio Attorney Suspended for Lack of Cooperation

An attorney in Ohio whose license has been suspended since 2013 was reminded just how important it is to cooperate with disciplinary authorities while facing his third disciplinary hearing in three years.  Despite being cleared by the Ohio Supreme Court on the underlying charges, which involved the Board of Professional Conduct’s finding of the mishandling of a criminal case and related fraudulent statements to the court, the attorney nonetheless was sanctioned for his failure to cooperate.

The attorney’s failure to cooperate with the Board’s investigation was evidenced by the attorney’s failure to promptly respond to three letters of inquiry. He replied to the first letter several weeks after the stipulated reply date, and did not reply to the subsequent letters. The attorney defended his failure to reply to the subsequent letters by claiming that the questions in the subsequent letters were not relevant to the rule cited in the first letter. He also argued that he was given insufficient time to respond. The Court rejected the arguments after the attorney admitted he was aware of his duty to cooperate with the Board.

The attorney received a six-month suspension and was taxed with costs.

Read the Supreme Court of Ohio’s Slip Opinion here, and the Board’s Overview here.

Attorneys May Use Crowd Funding To Finance Firm Expenses

“Go-fund-me” and other crowd funding resources have been steadily increasing in popularity as a means to fund a variety of activities from serious business ventures to Cancun vacations. Typically crowd funding is used in product development as a means to test the market. It therefore requires a large group of people raising large funds for that purpose.

Because of the great success many projects have had in using crowd funding as a source for their operations, recent law school graduates have inquired about the feasibility of using this tool to start their own firm.

Most recent law school graduates desiring to start their own practice are facing a mountain of student loan debt. As a result, these graduates are reluctant to take out additional loans to finance their first months of operation.

Crowd funding is marketed as a creative solution to avoid creating additional debt, but attorneys old and young must keep in mind the potential ethical limitations. According to the New York State Bar Association in their June 29th opinion, two methods of crowd funding create clear ethical violations under Rule 5.4: the royalty and equity models. Consequently, there are only two crowd sourcing models from which an attorney can benefit.

The donation model appears to be the most promising. In this case an individual can essentially give money towards a venture with the clear understanding that their donation in no way entitles them to an interest in the business. There are no ethical limitations relating to this model, so long as attorneys make it clear to donors that they receive nothing in return for their donations. There are valid questions relating to how effective a tool this might be in garnering funds, but at the very least a lawyer does not have to worry about violating any codes of conduct.

The reward model is the second available option. In exchange for his donation, a donor would receive informational pamphlets that report the progress of the firm or the lawyers’ performance of pro bono work for a third-party non-profit legal organization. Attorneys who opt to use this model have to ensure that materials are only distributed for educational purposes (i.e. newsletters, blogs, or client alerts) so as not to trigger advertising sanctions under Rule 7.1.

Also, an attorney must avoid offering legal advice in distributed materials to avoid potential malpractice exposure. As it relates to the promise of performing pro-bono hours for a third party organization, an attorney must condition his agreement on being competent in the subject matter and not subject to a conflict of interest.

As a whole, crowd funding is not a perfect tool with which to establish a new private practice. Attorneys must ensure that investors do not receive a share in the law firm’s revenue or an interest in the firm. Nevertheless, for young attorneys, crowd funding can be considered at best as a colorful option to circumvent additional loans as they embark on their exciting careers. With that said, “Go fund me!”

To read full opinion click here.

Do Consultation Fees Create An Attorney Client Relationship?

On August 25, 2015 the North Dakota Supreme Court decided that a consultation fee alone does not form an attorney-client relationship; it is merely a factor that may indicate its creation. Alone, the fee creates only a potential client relationship with an attorney. Without this distinction, the attorney in Kuntz v. Disciplinary Board of the Supreme Court of North Dakota would have been in violation of North Dakota Rules of Professional Conduct Rule 1.7 (Conflict of Interest) and Rule 1.9 (Duties to Former Client).

This case arose from a client, the father in a child custody matter, claiming his attorney violated her ethical duties. The client retained the attorney and later learned that approximately one year prior to commencing representation, the attorney had consulted with the child’s maternal grandfather, who had paid the attorney a $100 fee for the consultation. There was no further contact between the maternal grandfather and the attorney. The client felt there was a conflict of interest as the attorney had previously met with a family member of the opposing party for a consultation with respect to custody arrangements for the same child.

The attorney advised the court that she always charges a $100 fee for initial consultations, and in each meeting she makes clear to the potential clients that the consultation does not form an attorney-client relationship. Her notes from the meeting with the grandfather showed no exchange of legal advice or collection of confidential information, supporting the attorney’s assertion that she met her responsibilities under North Dakota Rules of Professional Conduct Rule 1.18 (Duties to Potential Client).

After reviewing the case de novo on the record and noting that violations must be established by clear and convincing evidence, the North Dakota Supreme Court found only a potential client relationship between the attorney and the grandfather despite the fee. As a result, Kuntz had not violated any conflict of interest rules. The court held that the “existence of a lawyer-client relationship depends on the particular circumstances of the case, including the conduct of the parties, the circumstances of the consultation, the nature of information exchanged, and any agreements between the parties.”

To read the full opinion, click here.

Taking a Menopause Jab at Opposing Counsel: A Definite “Don’t”

A U.S. District Court judge was unamused by a jab an attorney made at opposing counsel during litigation this past March. After a female attorney complained about the temperature in a room where 16 attorneys were participating in a deposition, a male attorney remarked aloud, “You’re not getting menopause, I hope.” After a motion for sanctions was filed against the attorney who made the offensive remark, the judge expressed his negative view of the offending attorney’s conduct.

The judge called the attorney‘s comment “discriminatory in nature.”

“Because menopause occurs only in women, and predominantly in middle-aged women…a comment suggesting that a woman may be menopausal singles her out on the basis of gender and age.”

The judge ruled that the attorney’s statement was a violation of ABA Model Rule 4.4 (Respect for Rights of Third Persons). “The public nature of [the male attorney’s] comment combined with the personal and private nature of menopause leads the Court to conclude that the comment was made to embarrass [the female attorney] and was not intended to serve any other purpose.”

Attempts to ridicule opposing counsel are unfortunately nothing new in the legal profession. Citing a 2015 ABA report, the judge noted that “inappropriate or stereotypical comments” made by opposing counsel are one cause for the under-representation of women in lead trial attorney roles.

Accordingly, the court decided that the violating attorney was to pay his opposing counsel’s reasonable attorneys’ fees of $1,000 for bringing the motion and complete a continuing legal education course on professional conduct.

For more information click here. To read the full opinion click here.

Emerging Technologies & EDiscovery: Redefining the Competent Lawyer

Future Law Office 2020, a report issued by Robert Half, contains a survey in which 350 attorneys were asked which issue would have the biggest impact on the practice of law in the next five years. Emerging technologies was the issue that garnered the most votes. Furthermore, 44 percent of the respondents identified eDiscovery as the main issue driving legal departments to work more closely with IT specialists.

Is your law firm up to speed on technology and eDiscovery? Emerging technologies are not only a trend, but also are becoming a matter of competence. In fact, recent sanctions imposed on the Defendants and their attorneys in a case in the U.S. District Court for the Southern District of California reminds us of the legal implications of poor handling of eDiscovery. HM Elecs., Inc. v. R.F. Techs., Inc., 2015 BL 254876, No. 3:12-cv-02884-BAS-MDD (S.D. Cal. Aug. 7, 2015).

In HM Elecs. Inc, the Plaintiff—a manufacturer of drive-thru headset systems—brought forth various claims against the Defendant—a repairmen of drive-thru headset systems—for trademark infringement and unfair competition and interference by the Defendant. During the course of the case, several discovery disputes arose, most notably related to the failure to properly and timely produce documents as required. The Plaintiff filed a joint motion alleging that Defendant intentionally withheld and destroyed highly relevant electronically stored documents (“ESI”), among other allegations.

The Court granted the Plaintiff’s request for reasonable attorneys’ fees and costs incurred as a result of Defendants’ eDiscovery misconduct pursuant to Rules 26(g)(3) and 37, and for not paying close enough attention to the misconduct of its clients. The court sanctioned discovery practices by the Defendant such as (1) signing certifications of discovery stating that certain documents didn’t exist, even though they did; (2) attorneys did not property craft and implement a litigation hold; (3) emails were sent to employees instructing them to destroy relevant documents; (4) massive amounts of data withheld by the used of limited search terms; and (5) failure to produce more than 375,000 pages of electronically stored information (“ESI”) until after close of discovery due to vendor error.

Thus, failure to be proactive in acquiring competence in emerging technologies and specifically in eDiscovery may result in a costly lesson that not only takes a financial toll on a lawyer and his client, but also may tarnish the reputation and career of the lawyer.  In other words, being a technophobe is becoming risky business for lawyers practicing law in the digital age.

To read the survey, click here.

To read the opinion, click here.


To Err is Human: When Must a Lawyer Disclose an Error to a Client?

On July 17, 2015, the North Carolina State Bar Ethics Committee (“Committee”) issued a 2015 Formal Ethics Opinion 4, discussing when it is appropriate for an attorney to disclose potential malpractice to a client.

The opinion begins with an explanation of the distinction between professional malpractice and professional misconduct, the former being a lawyer’s error under the applicable standard of care, which could subject the lawyer to civil liability. The North Carolina Committee acknowledges that even a generally competent lawyer may make a mistake and then proceeds to analyze the responsibilities that ensue.

Relying on analysis from a Colorado Ethics Opinion and a New York State Ethics Opinion, the North Carolina Committee advises that the decision to disclose an error to a client is governed by an attorney’s duty of communication pursuant to Rule 1.4. The obligation of disclosure of an error depends upon where it falls on the spectrum of possible errors as well as the circumstances under which the error is discovered. With respect to the spectrum, errors range from those that are material and clearly prejudice the client’s interests, which should always be reported, to those that are easily corrected or negligible and do not need to be revealed to the client.

A mistake that falls within the grey area of the spectrum must be examined in terms of the attorney’s duty to keep the client reasonably informed about his legal matter. For example, if the error will result in financial loss to the client, substantial delay in achieving the client’s goals, or a significant disadvantage to the client’s legal position, the error must be disclosed. When in doubt about the duty to disclose, the Committee advises that it is best that an attorney err on the side of disclosure.

After making the decision to disclose, an attorney may retain representation of the client unless there is a Rule 1.7 conflict of interest issue. When disclosing the error to a client, the lawyer must candidly explain the important facts surrounding the error, including the circumstances under which it occurred and its effect on the lawyer’s continued representation of the client. The lawyer must not advise the client about a potential malpractice claim, but the lawyer can recommend that the client seek independent legal advice.

Judges on Facebook: Exercising First Amendment Rights or Violating the Judicial Canons?

There is no doubt that since the inception of Facebook in 2004, various other social media networks have sprung up allowing people to share and exchange information instantly. As of the second quarter of 2015, Facebook had nearly 1.49 billion monthly active users.[1] Originally a social networking website geared towards college students, Facebook has grown to market its services to people of all ages, backgrounds, and professional occupations. As social media continues to become a part of people’s everyday lives, many have predicted that this is a long-term trend that will be continuously refined so that people turn to interacting and behaving online as they do in their everyday lives. But with this dependency on online social networking comes potential consequences that can affect many groups of people, including the legal profession.

The American Bar Association reported in its most recent Legal Technology Survey that about 62% of law firms maintain social networks. This can include, for example, LinkedIn, Facebook, Twitter and Instagram. In fact, 78% of individual lawyers maintain one or more social networks, and spend on average 1.7 hours per week using these sites for professional purposes.[2]

But what about in the courtroom? Is it ethical for a judge to use social media to comment and express his or her opinion on a case unfolding in the judge’s courtroom? Unfortunately for one District Court judge in Texas, Facebook updates about a trial over which she was presiding resulted in a reprimand by the State Commission on Judicial Conduct.

This story began during the criminal jury trial of State v. David M. Wieseckel, which was held in Judge Michelle Slaughter’s court. The defendant, Wieseckel, was charged with unlawful restraint of a child for allegedly keeping a 9-year-old boy in a wooden enclosure.

Judge Slaughter’s social media saga began a few days before the commencement of the trial when she posted on her Facebook page: “We have a big criminal trial starting Monday! Jury selection Monday and opening statements Tues. morning”. However, it wasn’t until after the first day of testimony when Judge Slaughter posted several comments on her Facebook page that ethical issues allegedly emerged.

The following are the Facebook comments that led defense counsel to file a motion to recuse Judge Slaughter from the case:

“Opening statements this morning at 9:20 am in the trial called by the press ‘the boy in the box’ case.”

“After we finished Day 1 of the case called the “Boy in the Box” case, trustees from the jail came in and assembled the actual 6”x 8’ box inside the courtroom!”

“This is the case currently in the 405th!” [This post included a link to a Reuters article entitled “Texas father on trial for putting son in a box as punishment”].

The issue raised about these comments was that the box to which she referred had not yet been admitted into evidence at the trial.

As a result of these comments, defense counsel filed motions to recuse Judge Slaughter from the case and for a mistrial and she was removed from the Wieseckel case. The case was transferred to another court and the judge in that court granted the defendant’s motion for mistrial. Judge Slaughter’s behavior was criticized on social media despite her argument that she made her comments with the intention of promoting transparency and to encourage individuals to come watch the proceedings.

The State Commission on Judicial Conduct (Commission) did not share the Judge’s perspective. After considering the relevant standards of judicial conduct, including Canon 3B(10) of the Texas Code of Judicial Conduct and Canon 4A, the Commission concluded that Judge Slaughter’s comments “went beyond providing an explanation of the procedures of the court” and instead “highlighted evidence that had yet to be introduced at trial”. Further, the Commission stated that “Judge Slaughter cast reasonable doubt upon her own impartiality and violated her own admonition to jurors by turning to social media to publicly discuss cases pending in her court, giving rise to a legitimate concern that she would not be fair or impartial in the case”.

On April 20, 2015, the Commission issued a Public Admonition and Order of Additional Education to Judge Slaughter requiring her to obtain four hours of instruction, with a mentor and in addition to her required judicial education, on the proper and ethical use of social media by judges.

Judge Slaughter appealed the sanction to a special court of review based upon First Amendment claims. On July 20, 2015, Justice Charles Kreger of the 9th Court of Appeals, Justice Gina Benavides of the 13th Court of Appeals, and Justice John Bailey of the 11th Court of Appeals heard arguments and evidence in the trial de novo. The crux of Judge Slaughter’s argument is that this particular proceeding is going to chill the exercise of the right to free speech as the matters that occur within the courtroom are of public concern. The Court of Appeals has not yet issued its decision.-This case is a prime example of the tension between the First Amendment and the judicial canons that may arise when the judiciary engage in social media however well-intentioned.

[1] http://www.statista.com/statistics/264810/number-of-monthly-active-facebook-users-worldwide/

[2] American Bar Association, 2014 Legal Technology Survey Report, available at http://www.americanbar.org/groups/departments_offices/legal_technology_resources/publications.html