Texas Ethics Opinion May Have Gone Too Far in New Restrictions of Non-Lawyer Job Titles

According to Ethics Opinion No. 642 issued by the Texas Supreme Court Ethics Committee in May, law firms operating in Texas are no longer able to use “officer” or “principal” in job titles of non-lawyers. According to the opinion, the word “officer indicates that the person holding the title has the power to control the entire law firm (in the case of chief executive officer) or significant areas of the firm’s operations,” and “use of the term ‘principal’ for non-lawyer employees implies that the employees have an interest in the firm involving control, ownership, or both.”

According to the Texas Disciplinary Rules of Professional Conduct Rule 5.04, non-lawyers are prohibited from running a law firm or having control over the “professional judgment of a lawyer.”  However, according to the Ethics Opinion, even firms that follow Rule 5.04 are still in violation of Rule 7.02 which states, “A lawyer shall not make or sponsor a false or misleading communication about the qualifications or the services of any lawyer or firm,” because the title of “principal” or officer” misleads the general public.

In response to this opinion, fifty-three of Texas’ largest law firms have signed a letter asking for a reversal of this opinion. Many Texas firms have non-lawyers working in positions such as “chief financial officer, chief technology officer and chief marketing officer.” The firms fear this opinion will have a detrimental effect on their ability to adequately serve the community. Many law firms attract people with top educational backgrounds and give them job titles reflecting their role: “A well-regarded firm searching for a CFO will attract candidates with excellent credentials and qualifications. That same firm searching for a Head Accountant will not. A firm searching for a Chief Technology Officer will be competing with other companies-not just law firms-for the best candidates. Those candidates seek the right title-CTO or CIO-and will understandably turn up their noses at lesser-titled positions. Ultimately, the Committee’s decision will degrade the quality of nonlegal professionals that are available to Texas law firms.” In addition, not having these titles would mean lawyers would have to serve in these roles, taking away time needed to adequately serve their clients

The letter signed by the fifty-three law firms discusses how the Ethics Opinion analyzed Rules 5.04 and 7.02 incorrectly. According to the letter, Rule 5.04 was meant, “to prevent nonlawyers form owning law firms or exercising professional control over the lawyers,” not for delegating job titles. The people hired with the title “officer” are not the kinds of officers the rule intends to prohibit. In response to violating 7.02, the letter states that the public is not being misled because there is a difference “between nonlawyer employees who interact with the firm’s clients (e.g paralegals, investigators, tax preparers), and those who do not because they are involved in the back-office management of the firm.”

The Texas Disciplinary Rules of Professional Conduct in addition to the ethics rules from many other states have restrictions designed to promote the accurate portrayal of lawyers such as the new Florida rules dealing with LinkedIn and Texas Rules 7.04(a) and (b) which discuss when lawyers can call themselves specialists. The purpose of these restrictions is for accurate information of the lawyers’ qualifications to be relayed. However, the issue of calling oneself a specialist when one is not seems more black and white than calling a non-lawyer an officer and principal. Specialists in in the legal field have specific meanings unlike “officers” or principals.” Calling a non-lawyer an “officer” does not necessarily mean the firm is inaccurately portraying the non-lawyer’s position because “courts have recognized, the term officer’ does not, by itself answer the question of whether an individual has management control over the company.” Courts have come to the conclusion “that the term ‘officer’ must be interpreted functionally, not mechanically.” As the letter recommends, the purpose behind the rules is what matters rather than a possible interpretation of the title “officer” or “principal.”

The detrimental effect of removing the terms “officer” or “principal” in the titles of non-lawyers far outweighs the slight possibility the public is misled about these job titles. The Texas Supreme Court Ethics Committee will reconsider Ethics Opinion No.642 at their next meeting this fall.

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Ethics and Social Media Evidence: New York Issues Guidelines & Florida Contemplates an Advisory Opinion

The Commercial and Federal Litigation Section of the New York State Bar Association has developed a set of “Social Media Ethics Guidelines” that explain how ethics rules apply to lawyers’ use of social media networks. The guidelines are premised on the New York Rules of Professional Conduct and precedent from New York and other states.

While the guidelines are not meant to serve as a set of “best practices,” they will likely prove a valuable tool for lawyers wishing to be conversant with the nuances of social media networks and the implications of communication therein.

These guidelines are particularly significant, given that they represent the most comprehensive statements on the issues arising around social media evidence. For example, the advice that may be given to clients regarding additions and deletions to social media profiles with regard to anticipated and ongoing litigation.

While not binding, commentators anticipate that the guidelines will be used as a model by other states when fashioning their own policies. In fact, on June 27th, the Florida Bar’s Professional Ethics Committee is considering adopting a proposed advisory opinion that will address pre-litigation questions regarding spoliation and the issue of lawyers advising their clients to “clean up” their Facebook pages prior to litigation. It will be interesting to see how influential the New York guidelines will be in Florida and other jurisdictions.

Click here to read commentary on the guidelines and click here for the full text of the guidelines.

Click here to read about Florida’s proposed advisory opinion and here to read an article on the topic in the Daily Business Review.

The Rise of the Social Law Firm

A recent study, undertaken by Above the Law and Good2bSocial, demonstrates social media’s proliferation into the legal profession. The study included a review of the social media practices of several major law firms across numerous public platforms including LinkedIn, Facebook, Twitter, Google+, YouTube, and SlideShare.

The study assessed each firm’s publicly available substantive content, as well as its social reach and engagement, assigning a point value based on the number of followers, friends, likes and comments. Researchers then created a Social Law Firm Index, where they measured the specific uses that the social media practices were implemented for. The study identified that an astounding 90% of social media usage was conducted for marketing purposes.

The legal community’s growing interest in analyzing the effectiveness of firms’ use of social media highlights the growing awareness that social media plays a large part in a modern legal practice. The study is a positive step forward in generating best practices guidelines for law firms and individual lawyers to utilize social media in compliance with ethical advertising obligations.

Federal Judge Allows Attorney’s Copyright Claim Against Ripoff Report to Survive

On March 24, 2014, U.S. District Judge Denise Casper allowed a recent copyright claim against Xcentric, that was filed by Boston attorney Richard Goren, to survive. The claim alleged that Xcentric operates in an “unfair and deceptive manner” by offering to delete or redact negative postings for a fee. Xcentric operates Ripoff Report, which allows users to post free, un-moderated and uncorroborated complaints on a specific company or individual.

Goren’s case had an unusual journey to the federal court. First, he had to prevail against the Communications Decency Act, which gives website operators immunity from defamation claims for third-party posts. Goren persuaded a trial court in Massachusetts to assign him the copyright to the negative postings against him on Ripoff Report. As a result, Judge Casper found that there was a live dispute on who owns the posts’ copyrights as Xcentric asserts that they hold a U.S. copyright registration, which precedes the state court order giving rights to Goren.

In addition, Judge Casper also found a dispute arising from “whether the Ripoff Report site’s terms and conditions and language next to a check box that users must check before posting was enough to alert a user of Xcentric’s rights to user postings.” Does this case pave a new way for attorneys to own negative reviews posted by former clients? If so, what kind of ethical implications could this case create under Florida’s advertising rules?

For more information, click here and here.

Calling in Sick May be Hazardous to a Lawyer’s Career

The Illinois Supreme Court recently issued an order suspending an attorney for sixty days after faking an illness to avoid oral arguments before the 7th U.S. Circuit Court of Appeals. The order, which came on the heels of a scathing opinion by the 7th Circuit, also required the lawyer to pay $5,000 in restitution to his client’s mother, as well as to repay the state’s client protection fund for any payments made as a result of his conduct.

On the morning that oral arguments were scheduled to take place before the 7th Circuit, the lawyer called the clerk’s office and informed the clerk that he would not be appearing in court that day. The clerk subsequently attempted to contact the lawyer and notify him that his attendance was required, but the lawyer failed to respond. As a result, the arguments proceeded without the lawyer, and his client ultimately lost the appeal.

In the order to show cause, the Circuit Court requested that the lawyer supply medical documentation of his claimed illness, such as a certificate showing his admission to an emergency room. After failing to supply any such documentation, the lawyer admitted that he had feigned an illness because he felt unprepared to proceed. Concluding that the lawyer had acted unprofessionally, the 7th Circuit fined him $1,000 and stated that it would refrain from appointing him to any appeals under the Criminal Justice Act for 24 months. In doing so, the court acknowledged that, “[t]o leave a client unrepresented on the morning of oral argument is nothing short of appalling.”

Click here to read commentary on the suspension.

Failure to Disclose Information on the Bar Application May Come Back to Haunt You

In an Illinois Supreme Court order issued on March 14, 2014, lawyer, Reema Nicki Bajaj, consented to be suspended for three years and until further order for failing to disclose on her bar application her illegal work history as a prostitute.

According to the Illinois Attorney Registration and Disciplinary Commission, Bajaj advertised herself as “Nikita” on AdultFriendFinder.com, performed sex acts with two men who answered the ads (ultimately pleading guilty to prostitution for one of them), and gave false testimony in an ethics case in September 2012, where she denied that she ever exchanged sex for money. With regards to her bar application, Bajaj failed to disclose her “Nikita” alias in response to the question that asks if the respondent has ever been known by any other name, failed to disclose her employment as a prostitute in her employment history, and falsely answered “no” in response to a question about possible misconduct.

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Bajaj was admitted to practice law in the State of Illinois in 2010, but was active on AdultFriendFinder.com between 2005 and 2008. In 2012, she pleaded guilty to prostitution stemming from a 2010 encounter with a man she met on the website, bringing her past to the attention of the Illinois Attorney Registration and Disciplinary Commission.

The Illinois Supreme Court sided with the Commission and agreed to suspend Bajaj from the practice of law for three years, placing great importance on a lawyer’s honesty. This decision serves as a cautionary tale to law students and lawyers alike: what you include (or fail to include) on your bar application matters and it may just come back to haunt you.

Read more about the case here, and see the disciplinary petition here.

The Lying Client Dilemma

Elizabeth J. Cohen’s article, “Risk Management Speakers Debate Duties When Suspicions Arise That Client Is Lying,” reports on a recent discussion panel held in Chicago called “Watching Your Step: Uncovering and Working Through Client Lies,” focused on what a lawyer’s obligations are when dealing with a client who may not be telling the truth. Thomas Sukowicz, the panel host, explained it well when he said that an untrustworthy client triggers a difficult tension between a lawyer’s “obligation of confidentiality and the obligation of professional independence.”

Featured panelists commented that modern lawyers are driven by “causes” such that the boundaries of attorney-client confidentiality are more likely to bend. Unlike previous generations of attorneys, this modern generation believes that “the cause justifies keeping the client’s secret.”

Nevertheless, panelist Mark Tuft explained that Model Rule of Professional Conduct 1.4 and Comment 9 to Rule 1.2 illustrate the fine line that attorneys walk in offering legal advice to a client who may use that advice to commit fraud or criminal activity.

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Comment 9 emphasizes the critical distinction between legal analysis and improper recommendations. According to the Comment, “the prohibition on a lawyer from knowingly counseling or assisting a client to commit a crime or fraud . . . does not preclude the lawyer from giving an honest opinion about the actual consequences that appear likely to result from a client’s conduct. Nor does the fact that a client uses advice in a course of action that is criminal or fraudulent of itself make a lawyer a party to the course of action.”

Additionally, Rule 1.4(a)(5) offers attorneys a safety valve by explaining that “a lawyer shall consult with the client about any relevant limitation on the lawyer’s conduct when the lawyer knows that the client expects assistance not permitted by the Rules of Professional Conduct or other law.” A relevant limitation includes the impermissible assistance of a client in committing a crime.

Finally, Tuft reminded panel-attendees, “a core concept of [the rules of professional responsibility] is client autonomy. A client will do what they choose to, and the lawyer’s obligation does not arise until he has actual knowledge of client wrongdoing.”