When Must a Lawyer Plotting a Lateral Move Obtain a Client’s Informed Consent?

1. Conflict of Interest and Informed Consent

To avoid a conflict of interest, a lawyer needs to be informed client consent to engage in substantive job negotiations with a law firm that is adverse to the client. Likewise, hiring firms must avoid serious job talks with opposing counsel unless its own client consents. See North Carolina State Bar Ethics Comm., Formal Op. 20163, 1/27/17.

North Carolina Rule of Professional Conduct 1.7 forbids a lawyer from representing a client if the lawyer’s own interests may materially limit the client’s representation unless the lawyer reasonably believes he or she can provide competent and diligent representation and the client gives informed consent, confirmed in writing. N.C. Rules of Prof’l Conduct, Rule 1.7(b)(2) (2003). This type of conflict may arise when a lawyer has discussions about possible employment with a client’s opponent or a law firm representing the opponent. N.C. Rules of Prof’l Conduct, Rule 1.7, cmt. 10.

2. Substantive Discussion or Negotiation

While the exact point at which a lawyer’s own interest may materially limit his representation of a client may vary, the ethics committee advised substantive discussions and negotiations materially limit the lawyer’s representation of a client. Similarly, The Restatement (Third) of the Law Governing Lawyers advises that once the discussion of employment has become concrete and the interest is mutual, the lawyer must promptly inform the client. Restatement (Third) of the Law Governing Lawyers: A Lawyer’s Personal Interest Affecting the Representation of a Client, § 125, cmt. d. (2000).

The ethics committee relied on the ABA definition of “substantive discussion”, which “entails a communication between the job-seeking lawyer and the hiring law firm about the job-seeking lawyer’s skills, experience, and the ability to bring clients to the firm; and the terms of association.” ABA Formal Ethics Op. 96-400 (1996). To find a “substantive discussion,” the ethics committee opined that there must be a discussion or negotiation that is substantive. See North Carolina State Bar Ethics Comm., Formal Op. 20163, 1/27/17.

The committee further provided examples as to what constitutes a “discussion” and what is “substantive.” “Sending a resume blind to a potential employer is not a ‘discussion.” Id. “Speaking generally with a colleague at a social event about employment opportunities is not ‘substantive.’” Id.

To read the full opinion, click here.

Facebook Jurors: Candor Required!

Facebook Juror Research

Attorney Petev Tenev’s client, Dr. Henry Acosta, was sued by a former business partner in a dispute over the dissolution of a dental practice. Dr. Acosta’s wife later obtained a list of the jurors and researched them on Facebook. She learned that one of the jurors was Facebook friends with a hygienist that worked for the plaintiffs. As a result, she asked Tenev to move to strike the juror.

However, Tenev failed to make the court aware of this connection until the trial date. Per the opinion, the trial judge “asked Tenev how she came to learn this information, and a lengthy discussion ensued during which Tenev gave three different answers,” none of which “involved any contact with the juror.” Tenev v. Thurston, 2016 BL 70906, Fla. Dist. Ct. App. 2d Dist., No. 2D14-4566, 1, 3/9/16.

The trial judge and the parties considered several options, including striking the juror and proceeding with trial. Nevertheless, the Plaintiff moved for mistrial, arguing “there was no way he could receive a fair trial given that Tenev [and Dr. Acosta’s wife] had attempted to make improper contact with the juror.” Id at 2.

The trial judge sided with the Plaintiff. The court granted a mistrial and noted that Tenev acted in “bad faith” by responding to the court’s questions in a dishonest manner. Id. Furthermore, the trial judge ordered Tenev to pay $74,000 to cover attorneys’ fees and costs the Plaintiff incurred in preparation for trial.

Appeal: Duty of Candor Toward the Tribunal and Misconduct

Judge Daniel H. Sleet of the Florida Second District Court of Appeal reversed the trial court’s order in its entirety. Judge Sleet held “[t]here is no prohibition in Florida law against an attorney researching jurors before, during, and throughout a trial so long as the research does not lead to contact with a juror.” Id at 4. Moreover, “the trial court’s findings lack the high degree of specificity required to support the imposition of sanctions.” Id at 3.  

In spite of this, Judge Sleet held “the [trial] court arguably ma[de] a sufficiently detailed finding upon which to sanction Tenev for being dishonest before the court.” Id.

Under Florida Bar Rule 4-3.3(a), “[a] lawyer shall not knowingly . . . make a false statement of fact or law to a tribunal.” See R. Regulating Fla. Bar 4-3.3(a)(1). Similarly, under Florida Bar Rule 4-8.4(c), “[a] lawyer shall not . . . engage in conduct involving dishonesty, fraud, deceit, or misrepresentation.” See id at 4-8.4(c).

With respect to potential ethical violations, Judge Sleet reasoned “the aggressive inquiry by the trial court as to the legal basis for her motion to strike the juror was met with inarticulate, evasive, and dishonest answers;” therefore, “she violated her oath as an attorney to be honest before a tribunal.” Tenev, 2016 BL 70906, No. 2D14-4566 at 3.

With respect to the “bad faith” sanctions, Judge Sleet reasoned the following.

“Tenev’s dishonesty was not a litigation tactic undertaken solely for bad faith purposes. Tenev initially set out to notify the court of a potentially biased juror before trial commenced. Such was her duty as an officer of the court, and she clearly was not attempting to unduly delay or protract litigation or to seek an unfair advantage against Thurston.”


To read the full opinion, click here.

Third Ethics Panel Dings Avvo’s Matching for Legal Services

Avvo Legal Services is offering a matching program to connect potential clients with lawyers. The program provides lawyers with the opportunity to offer legal services directly to consumers after a fixed price consultation. Moreover, at the Avvo Legal Services “law store” consumers may purchase fixed-fee legal services such as review of a will for $99 or a family green card application for $2,995. (To read Avvo’s Advisor web page, click here.) Ultimately, the lawyer pays Avvo, which is described by Avvo as follows:

For each paid service you complete, Avvo will charge you a marketing fee as a separate transaction.

For example, a lawyer who successfully completes 3 $149 document review services in the month of February will see 2 separate transactions on their bank statement in March: a deposit of $447 ($149/service x 3 services) and a withdrawal of $120 ($40 marketing fee/service x 3 services).

Since its launch in February 2016, three ethics advisory opinions—South Carolina, Ohio, and now Pennsylvania—have disapproved (without specifically identifying Avvo) Avvo’s type of matching program.  The most recent opinion was issued by Pennsylvania and notes that under Pennsylvania Rule of Professional Conduct 5.4(a) on “Professional Independence of a Lawyer,” a “lawyer or law firm shall not share legal fees with a nonlawyer.” The Pennsylvania opinion concluded that  the “marketing fee” may be a disguised fee sharing arrangement with a nonlawyer and, thus, would violate RPC 5.4(a). See Pa. Bar Ass’n Comm. on Legal Ethics & Prof’l Responsibility, Formal Op. 2016-200, (September 2016).

The Pennsylvania opinion also rejected the idea that the “marketing fee” could be authorized under RPC 7.2(c)(1), which provides a lawyer may pay “the reasonable cost of advertisements,” on grounds that the arrangement “do[es] not correspond to any traditional model of compensation for advertising.”.

Furthermore, the committee concluded that such a program would improperly delegate “to a non-lawyer several critical decisions and functions that fall within the exclusive domain of the practice of law,” such as “the decision whether the professional services the client requested of the lawyer have been satisfactorily completed.” It also noted issues regarding limited scope representation under Rule 1.2 (c), breach of confidentiality under Rule 1.6(a), and assisted unauthorized practice of law under Rule 5.5(a).

To read the full opinion, click 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.