Professional Responsibility

 

A.  Overview:   The term ‘ethics’ means “the study of the general nature of morals and of the specific moral choices to be made by the individual in his relationship with others; the philosophy of morals,” and also as “the rules or standards governing the conduct of the members of a profession.”

 

1. Conflict Resolution.  An attorney may conclude that a rule of legal ethics permits, or requires, conduct that offends his common sense and personal moral creed.  When no rule on point exists, or the rule on point is open textured requiring more guidance, or the rule on point permits or requires conduct that is morally repugnant, then use :

 

a. Utilitarianism–holds that actions are right in proportion to the degree that they promote happiness, and wrong as they tend to produce the unhappiness.

i.  Referred to as the Greatest Happiness Principle, or the ultimate end, is an existence exempt as far as possible from pain, and as rich as possible in enjoyments, both in quantity and quality; the test of quality and the rule for measuring it against quantity, being the preference felt by those who in their opportunities of experience, to which must be added their habits of self-consciousness and self-observation, are best furnished with the means of comparison.

ii. The TEST: 1st: actions are judged right or wrong based on their consequences. Right actions are those that have the best consequences.

2nd: in assessing consequences, the only thing that matters is the amount of happiness or unhappiness that is caused.  Everything else is irrelevant.

3rd: in calculating happiness over unhappiness caused, no one’s happiness is more important than anyone else’s. Each person’s is equally important.

 

b.  Golden Rule Principle–To do as you would be done by, and love your neighbor as yourself, constitutes the ideal perfection of utilitarian morality.  This is an impersonal rule because it deals with individuals in real life, and has little to do with impartial, disinterested, or undifferentiated moral agents.

 

c.  Categorical Imperative–Act in such a way that you always treat humanity, whether in your own person or in the person of any other, never simply as a means but always at the same time as an end.  Agreeableness of one’s condition and even the promotion of happiness of others is brought about by many causes, so that there is no need of the will of a rational being, its cause is found in the supreme and unconditional good.  To deviate from the principle of duty is beyond all doubt wicked; to be unfaithful to the rule of prudence may be advantageous, but to abide by it is safer.  While I can will the lie, I can by no means will that lying should be universal, because as soon as it is so, it destroys itself.

 

2. Summary of Kant’s Theory

It is a theory of human obligations, and he does not try to generate a set of precise rules defining human obligations in all possible circumstances; instead he attempts to provide a set of principles of obligations that can be used as the starting points for moral reasoning.  The main focus is on action rather than either results, as in utilitarian thinking, or entitlements, as in the theories making human rights their fundamental categories.

a.  The necessity of acting from pure respect for the practical law is what constitutes duty, to which every other motive must give place, because it is the condition of a will being good in itself, and the worth of such a will is above everything.  Justice is only one part of duty.

 

b.  If there is a supreme practical principle or in respect of the human will, a categorical imperative, it must be one which, being drawn from the conception of that which is necessarily an end for everyone because it is an end in itself, constitutes an objective principle of will, and can therefore serve as a universal practical law.  Rational nature exists as an end in itself.  So act as to treat humanity, whether in thine own person or in that of any other, in every case as an end withal, never as a means to that end.

 

B.  Organization of the Bar

Admission to the bar and to practice law is gained by first graduating from law school, then passing a state bar examination, and demonstrating that the candidate possesses good moral character. 

 

1.  Residency requirements

a.  S.Ct of N. Hampshire v. Piper, 470 U.S. 274 (1985) the Court held that the N.H. S. Ct’s refusal to swear in a Vermont resident who passed the state’s bar examination violated the Constitution’s privileges and immunities clause.

b. S.Ct. of Virginia v. Friedman, 487 U.S. 59 (1988), the Court struck down a Virginia rule that let permanent Virginia residents licensed out-of-state waive into the Virginia bar, but required non-Virginia residents to take the state bar examination.

c. Barnard v. Thorstenn, 489 U.S. 546 (1989), the Court found none of the reasons claimed by the Virgin Islands bar substantial enough to justify excluding nonresidents. 

 

2.  Character requirements

All states require that an applicant for admission to the bar possess “good moral character” although enforcement of this requirement is uneven and sporadic.

a.  Konigsberg v. State Bar, 353 U.S. 252 (1957), the Court rejected mere membership in the Communist Party as proof that an applicant lacked good moral character.

 

 

3.  Admission to Practice in other States and Federal Courts.

An attorney who has been admitted in one state and who wants to represent a particular client in a court of another state may petition that court to appear pro hac vice.  To practice in Federal Court an attorney must be separately admitted to the bar of that court, because each federal court maintains its own separate bar.  Admission to a federal court of appeals requires that the applicant be admitted in the courts of any state.  Admission to the Supreme Court of the United States requires that the applicant have practiced before the courts of a state for at least three years.

a.  Leis v. Flynt, 439 U.S. 438 (1979), There is no right to appear pro hac vice, for this turn only, and each case requires a separate petition.

 

b. A significant distinction exists between state and national bar associations, state membership is mandatory prior to and in order to retain a license to practice law.  Compulsory membership is often called integrated bar.

 

4.  Sources of Guidance on Legal Ethics

a.  State Rules, Statutes, and Court Rules

Each state has a set of ethics rules, and special statutes that govern the lawyers in that state, in addition to the local court rules that apply to all lawyers appearing before them.

 

b. ABA Code of Professional Responsibility

In 1969 the ABA introduced the Code of PR as a model for the states to follow, and most states accepted them and modeled their rules after.

 

c.  ABA Rules of Professional Conduct

In 1983 the final version of the Model Rules of Professional Conduct was adopted by the Delegates and then 40 states patterned their rules on the ABA Model Rules.

 

d.  ABA Code of Judicial Conduct

In 1972, the CJC was offered as a model for the various states to follow in adopting their own sets of rules for judges, then in 1990 the new CJC was adopted and twenty states accepted them in whole and 17 accepted portions.

 

e.  Other sources

Most state and local bar associations provide telephone assistance for a fee, or an attorney may write in with a specific ethical question, at cost.  Westlaw and Lexis both offer supplemental support in the ethics area.

 

 

 

 

 

 

5.  Discipline

Discipline refers to the penalties imposed by a disciplining agency on an attorney who has breached a rule or statute for which discipline can be imposed.  There are three main types :

a.  Reprimand–the mildest form b/c it does not limit the attorney’s right to practice law.  Two types–1) Private reprimand, an unpublished, private communication in writing from the agency to the atty; 2) public reprimand, published–usually in publications aimed at attys but occasionally in public newspapers, naming the attorney and describing the conduct.

 

b.  Suspension–the atty is prohibited from practicing law for a period of time, and may include the requirement that the atty take and pass a legal ethics exam before re-admission.

 

c.  Disbarment–permanent removal from the practice of law, in some states a disbarred attorney may subsequently petition for readmission.  An attorney may be disciplined for violations of criminal offenses that reflects adversely on his honesty, trustworthiness, or fitness as an attorney.  The crime need not be committed in their role as an attorney.  Discipline can result for actions stemming from fraud, dishonesty, deceit, or misrepresentation, or prejudice in the administration of justice, or for helping a judge violate the law. [ABA Model Rule 8.4]

 

 

The American Bar Association has no authority over attorneys and cannot regulate the conduct of members, unless a particular State’s court of last resort adopted/promulgated the ABA’s Model Rules, (40 States as of 2003).  Those States have modified/altered what they have adopted.

 

Scope of the Rules of Professional Conduct

The Rules of Professional Conduct should be interpreted with reference to the purposes of legal representation and the law itself. The terms ‘shall’ and ‘shall not’ are imperatives that define proper conduct with regard to discipline.  The term ‘may’ is permissive and defines areas of discretion to exercise professional judgment. Use of the term ‘should’ within Comments to the Rules do not add any additional obligations, but only provide further guidance.

A. The Rules of Professional Conduct provide a framework for the ethical practice of law.  Principles of substantive law determine whether a client-lawyer relationship exists. 

B.  Failure to comply with an obligation or prohibition imposed by a Rule is a basis for invoking the disciplinary process.  A violation of a Rule should not itself give rise to a cause of action against the lawyer, nor that a duty has been breached, and a violation does not necessarily warrant any other non-disciplinary remedy.  A violation may be evidence of a breach of the applicable standard of conduct.

 

NOTE:  In addressing a lawyer’s breach of duties, ask what remedies may be invoked:

 

Multi-State Professional Responsibility Examination--Definitions

 

Subject to Discipline (look at MR 8.4 as to jurisdiction) asks whether the conduct described in the question would subject the lawyer to discipline under the provisions of the ABA Model Rules of Professional Conduct, or in the case of a judge the ABA Model Code of Judicial Conduct.

 

May or Proper asks whether the conduct referred to or described in the question is professionally appropriate in that it: 

a.  would not subject the lawyer or judge to discipline; and

b.  is not inconsistent with the Preamble, Comments, or text of the ABA Model Rules of Professional Conduct or the ABA Model Code of Judicial Conduct; and

c.  is not inconsistent with generally accepted principles of the law or lawyering.

 

Subject to litigation sanction asks whether the conduct described in the question would subject the lawyer or the lawyer’s firm to sanction by a tribunal such as contempt, fine, fee forfeiture, disqualification, or other sanction.

 

Subject to disqualification asks whether the conduct described in the question would subject the lawyer or the lawyer’s firm to disqualification as counsel in a civil or criminal matter.

 

 

Subject to civil liability– asks whether the conduct described in the question would subject the lawyer or the lawyer’s firm to civil liability, such as claims arising from malpractice, misrepresentation, and breach of fiduciary duty.

 

Subject to criminal liability –asks whether the conduct described in the question would subject the lawyer to criminal liability for participating in, or aiding and abetting criminal acts, such as prosecution for insurance and tax fraud, destruction of evidence, or obstruction of justice.

 

The attorney-client relationship begins when:

P manifests intent that L provides legal services and L agrees;

P manifests intent that L Rep him, L fails to clarify that she doesn’t want to, and

L knows or should know that P is relying on lawyer’s services;

Tribunal appoints L

 

Screening Prospective Clients

1.  Is the Legal Matter inappropriate for the scope and size of your practice?

*ex: Anti-Trust cases

2.  Is the subject of Rep something you can handle within the time constraints?

3.  Is the Client overly concerned about costs?

4.  Has the potential Client changed attorneys in the past?

5.  Does the Client have unrealistic expectations?

 

6.  Is the Client proceeding on ‘principle’ along?

* Courts resolve most disputes w/ compensation, not vindication

7.  Does the person exhibit irrational behavior?

*MR 1.14

8.  Has the Client created unreasonable time constraints by seeking your advice at the eleventh hour?

9.  Is the Client of questionable moral character?

10.  Do you have any conflicts of Interest in Representing the Client in the matter at hand?          * New Client vs. Existing or Old Client

 

With Prospective Representation

The General Rule is that lawyers are not public utilities, they need not serve just anyone who wants legal services and can pay for it.  A lawyer may reject work for reasons that suit them.

i. The Attorney, upon admission, must take an oath as an officer of the court, as required by state law, to uphold the U.S. Constitution and the laws and constitution of the state, and perform the duties of an attorney to the best of their ability. *A solemn promise which includes in some states, “Never to reject, for any consideration personal to himself, the cause of the defenseless or the oppressed.”

 

Restatement § 15 Duty to Prospective Client

When a L discusses with a P a potential case, L may not subsequently disclose info and must protect that P’s property in L’s custody, use R care providing legal services;

L may not Rep C whose INTs are materially adverse to a former C in Same or Substantially Related Matter;

* Disqualification is IMPUTED unless: Personally prohibited, L has been screened and takes R steps to avoid exposure to Confidential Info; or

Both affected C and prospective C give Informed Consent.

 

MR. 1.18 Prospective C

A person who discusses with a L possibly forming an A-C relationship is a Prosp. C and L shall protect that info even if NO Rep except : Prosp C and Former C both give ICW;

L shall not Rep C whose INT are Materially Adverse to Prosp C in Same or Substantially Related matter if L rec’d info from P.C. that could be harmful [Disqualf], unless both give ICW or L receiving info took R steps to avoid exposure to Disq info and he was Timely Screen and written notice is give to Prosp C.

* If Disq–No L in Firm may continue Rep unless avoided exposure with R. steps, was Timely Screened,  and written notice to P.C.

* If no potential for harm, then Rep C;

* If P communicates info without R expectation L is willing to form relationship then there is no Prosp. C.                                   


* When P comes to L for advise, automatically Confidentiality, Loyalty, and Duty of Competence attach.

* Corp Client–the entity is the C, not the officers, directors, etc.

* 3rd P involving multiple INTs –C is the party with legal problem

 

NOTE: On Rules 6.1 and 6.2

A lawyer shall render unpaid public interest legal service.  A lawyer may discharge this responsibility by service in activities for improving the law, the legal system, or the legal profession, or by providing professional services to persons of limited means or to public service groups or organizations.

 

MR. 6.1

Every L has a duty to Rep those unable to pay – 50 hours per year

 

MR 6.2–Accepting Appointments

A lawyer shall not seek to avoid appointment by a tribunal to represent a person, except for good cause, such as: representation resulting in a violation of the Rules or law; or representation likely to result in unreasonable financial burden on the lawyer; or the client or the cause is so repugnant to the lawyer as to likely impair the relationship or the lawyer’s ability to represent the client.

*Good Cause = Violation of Law or Rule

  Unreasonable economic burden

   Personal Belief case is repugnant

 

* Duty to Reject:   C’s motive is harassment

       Unsupportable legal position

       L is not competent

       Strong Personal Feelings

i.    Bothwell v. Republic Tobacco Co., 912 F.Supp. 1221 (1995), there is no constitutional right to an attorney in civil cases, but a federal court does possess inherent powers to compel representation of an indigent litigant

ii.   Mallard v. U.S. Dist. Ct S.D. of Iowa, 490 U.S. 296 (1989), fed. law does not authorize coercive appointments of counsel, but the court left the door open that a court may require a lawyer to represent any indigent party without compensation.

iii.  Cunningham v. Sup. Ct. of Ventura, 177 Cal.App.3d 336 (2nd. Dist. 1986), an attorney ordered to represent an indigent defendant in a paternity action without compensation was denied equal protection of the law.

 

 

 

 

 

 

 

 

Whether an A-C relationship can be limited?

 

MR 1.2

L and C have right to limit the scope of Rep to specially designed purpose.

Those limits cannot interfere with C’s rights to:

Terminate Rep

Settle Case

Plea, Waive jury, or testify

 

MR. 1.16

(L may not Quit Rep @ will generally, but C may fire L anytime).

L must W/D if :

Rep violates the rules or Law;

L’s condition materially impairs ability;

L Discharged;

Use of L’s services materially furthers crime or fraud

L may W/D if :

C persists in crime or fraud;

C used L’s advice to commit crime or fraud;

L considers case repugnant and disagrees

C fails to Substantially fulfill obligations after R. Warning L may w/d unless fulfilled;

C consents

 

If crime or fraud L may use Noisy W/D ONLY to the extent necessary and w/o breaking Confidentiality Rules such as in the event :

- to prevent Death or Substantial Bodily Injury;

- to secure legal advise for the L;

- Disclosed to avoid presenting False Evidence or Perjury.

L must have Ct permission toW/D if pleading is pending/filed or COA continues.

 

*R Notice - enough notice to allow C to protect INT, not (3) days before trial = malpractice.

* Must Return all papers, unless Fee are due, then may hold for security;

* Must Return all unearned fee, except unearned retainers;

* If dismissed or W/D before COA completed, THEN attorney is entitled to Q.Meruit for value of services: New York Rule–Q/M immediately without waiting for occurrence of the contingent event; California Rule–Q.M. but not until contingency occurs, if it doesn’t  occur, L receives nothing; Florida Rule–L is entitled to Q.M. up to the limits of the fee agreement if and when contingency occurs.

 

 

 

 

MR. 3.1

L must have Good Faith basis in Law or Fact to bring or defend claims.

L for a criminal defendant or respondent, facing incarceration, may defend by requiring every element of the charge be proven.           

*B/c in criminal case, L may bring claims otherwise barred to preserve Constitutional guarantees.

 

NOTE: On MR 1.16 and 3.1

ABA Model Rule 3.1 prohibits an attorney from taking a frivolous legal position–one that has no basis in existing law and that cannot be supported by a good faith argument for extending, modifying, or reversing the existing law.  Under Model Rule 1.16 an attorney must refuse employment (or withdraw from employment), if the employment would require the attorney to violate a disciplinary rule or other law.

 

Q: What might happen to an attorney who pursues a frivolous claim on behalf of a client?

A: Discipline, or a suit against the attorney and client by the adversary for malicious prosecution.

(Thereunder, the elements are 1)initiation or continuation of the underlying action; 2) lack of probable cause; 3) malice; and 4) favorable termination of the underlying action. Probable cause is either the objective standard–would a reasonable attorney have pursued the claim; or a subjective standard–did this attorney know the claim was frivolous, depending on the court).

1. FRCP 11 provides that a party or attorney, in certifying that to the best of his “Knowledge, information, or belief, formed after reasonable inquiry: 1) the paper is not being presented for any improper purpose, such as harassment or to run up an opponent’s expenses; 2) the claims, defenses, or other legal contentions are warranted by existing law, or by a non-frivolous argument for a change or reversal in existing law or the establishment of new law; 3) the factual allegations have evidentiary support or are likely to have support after further investigation or discovery; 4) the factual denials are likewise warranted by the evidence or identified as reasonably based on lack of information or belief.”

*Imposition of sanctions are discretionary, and must be no more than necessary.

 

2. 28 USCA 1927 states that an attorney or other person who “so multiplies the proceedings in any case unreasonably and vexatiously” may be ordered personally to pay the “excess costs, expenses, and attorney fees.”

 

3.  Chambers v. NASCO, Inc., 501 U.S. 32 (1991), the Court held that federal courts have the inherent power to sanction bad faith conduct by lawyers and parties whether the conduct at issue is covered by one of the sanctioning provisions or not. [See also Gregory P. Joseph, Rule 11 is Only the Beginning, ABAJ May 1, 1988 at 62-65]

 

 

Whether misconduct has occurred?

 

MR. 8.4

It is Misconduct to:

Violate, attempt, induce or assist violations of the MR;

Commit criminal act that reflects on L’s honesty, trustworthiness or fitness;

Engage in dishonest, fraudulent, misrepresentation or deceitful conduct;

Engage in conduct prejudicial to the Administration of Justice;

State or imply the ability to influence officials;

Assist a judge in violating the Code of Judicial Conduct.

* Can be repeated minor violations of criminal law–100 parking tickets

* Word/conduct indicating bias or prejudice against race, sex, or economic status.

 

MR 1.1

L must act Competently, exercise and provide Legal Knowledge, Skill, Thoroughness and Preparation as Reasonably necessary. Factors are Relative complexity and Specialized Nature of  the matter, L’s general Experience, Training, Expertise in the Field, and Whether feasible to refer the matter to, or associate/consult w/ L of established competence in that Field.

* No special training is required beyond Analysis of Precedent, identification of issues, evaluation of evidence and legal drafting.

* In emergency may give advice or assistance but limited to that which is R necessary to subdue or outlast the emergency.

 

MR. 1.15

L shall hold C’s or 3rd P’s property separate from own and shall safeguard by keeping records for 5 years.

L may deposit his funds to pay for banks service fees.

Shall deposit legal fees/expenses paid in advance in C’s trust,

On receipt, shall promptly notify and deliver to C a full accounting, unless agreement otherwise.

If 2 or more (could be L) claim INT, then keep separate until dispute is resolved.  L shall promptly deliver Prop not in dispute.

* Includes Prop of Prosp. C.

* Funds rec’d as payment for legal fees earned = L’s = separate

* Disputed Funds = Trust account

* If 3rd claim INT and dispute - hold in separate

 

 

 

 

 

 

 

MR.  1.8

L may not:

 

Use info related to Rep to disadvantage of C, (req’s consultation and consent), w/o Informed Consent, except: when used to commit crime or fraud; to prevent Death or Substantial Bodily Injury, info is generally known; if disclosure or refusal to disclose would lead to crime or fraud; during Bar Exam or Discipline; or Reporting Professional Misconduct.

 

Make or Negotiate K for media or literary rights based on Substantial portion of info related to Rep, prior to Conclusion of Rep.

 

Provide Financial assistance to C: except court costs of the indigent.

 

Can’t accept compensation from P other than C unless: C ICW and there is no interference by P w/ L’s independence or A-C relationship, and Confidentiality is protected.

 

If 2 + C’s a L cannot make Aggregate Settlements or Pleas unless each C gives ICW, signed; L’s disclosure shall include all claims, pleas, and participation of each C

 

Limit malpractice liability unless C is independently represented or L can’t settle w/ unrepresented C or former C unless advised in writing to seek outside L.

 

No acquisition of Prop Int in COA except; Lien authorized by law to secure L’s fee and K with C for R contingency fee in civil case.

 

No sex with C unless relations existed prior to A-C relationship.

 

If L in Firm and any of the above apply to L, apply to all within the Firm.

 

MR 7.3

No In-person, Real Time Electronic, or Live Telephone solicitation for economic gain, unless: P is a L, Family of L, or Personal or Prior Relationship.

No solicitation if: C informed L; Solicitation involves Coercion, Duress, or Harassment.

Solicitation must include “Advertising Material” on envelope and on correspondence.

* L may use Pre Paid Legal Services (if organization is not owned or operated by L), that uses solicitation to gain members not known to need Legal services.

* R. seeks to avoid possibility of Undue Influences, Intimidation, and overreaching L’s.

* General announcements and L’s responses do not need “Advertising Material.”

 

MR 5.5

L can’t practice where NOT Licensed.

Can’t assist in unauthorized practice of law.

 

Whether an attorney has a duty to Report Misconduct?

 

MR 8.3

L shall Report :

A L who committed violation of MR that raises a Substantial Question as to that L’s Honesty, Trustworthiness or Fitness;

A judge who violated the Code of Judicial Conduct.

* Does not apply to protected info or info gained while participating in L’s assistance program–Ls representing Ls.

*Self regulation of the Profession req’s members to initiate investigations

* 3 Types of Sanctions

Reprimand; Public (published) or private (unpublished) acknowledgment;

Suspension; definite period w/o ability to practice;

Disbarment- permanent

 

What fees may an attorney Charge?

 

Attorney Fees and Fiduciary Duties

A lawyer must disclose to a client the basis on which the client is to be billed for both professional time and any other charges.  A lawyer may not bill more time than she actually spends on a matter, except where she rounds up to minimum periods, such as one-tenth or one-sixth of an hour.  A lawyer may not charge for overhead expenses, but may recoup expenses reasonably incurred in connection with the client’s matter for services performed in-house, such as photocopying, long distance, computer research, special deliveries, secretarial overtime, so long as the charge reflects the lawyer’s actual cost.  A lawyer may not charge a client more than her disbursements for third-party services, court reporters, travel agents, expert witnesses, unless the lawyer incurs costs in addition to the direct cost of those services.

1.  Robert L. Wheeler, Inc. v. Scott, 777 P. 2d 394 (1989), The reasonableness of atty fees is determined by balancing twelve factors:  1) Time and Labor 2) Novelty or difficulty of issues 3) The skill required 4) Loss of opportunity–employment 5) Customary fee 6) Fixed or Contingency Fee 7) Time limitations 8) The amt involved and the results obtained 9) Experience, reputation, and ability–standing in the profession  10) Undesirability of the Case 11) Casual or regular employment–the nature and length of the professional relationship between the client and atty 12) Awards in similar cases

 

 

 

 

 

 

2.  What constitutes reasonable billing procedures?

a.  Disclosure of the bases of the amounts to be charged.  At the outset, the lawyer should make disclosure of the basis for his fee and any other charges to the client.  This includes not only an explanation of the basis for the fee/charges, but also an explanation within the billing statement such that the client may reasonably be expected to understand what fees and other charges the client is actually being billed. 

i.  MR 1.5 provides that :   When the lawyer has not regularly represented the client, the basis or rate of the fee shall be communicated to the client, preferably in writing, before or within a reasonable time after commencing the representation. Comment : It is not necessary to recite all the factors, only those that are directly involved in its computation.

ii.  MR 1.4(b) provides : A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation.  Comment: applicable to the lawyer’s obligation to explain the basis on which the lawyer expects to be compensated.

iii.  MR 7.1 provides that :   A lawyer shall not make a false or misleading communication about the lawyer or the lawyer’s services.  A communication is false or misleading if it : (a) contains a material misrepresentation of fact or law, or omits a fact necessary to make the statement considered as a whole not materially misleading. Don’t make statements about fees that are not complete.

 

b.  Professional Obligations Regarding the Reasonableness of Fees.  The client should only be charged a reasonable fee for the legal services performed.  MR 1.5 explicitly addresses the reasonableness of legal fees.  Continuous toil on or overstaffing a project for the purpose of churning out hours is also not properly considered ‘earning’ one’s fees.  One job of a lawyer is to expedite the legal process.  (See MR 3.2).  For charges other than professional fees, the rules provide no express guidance, but the reasonableness standard of MR 1.5(a) should be applicable.

i.  General Overhead.  The client should reasonably expect that the lawyer’s cost in maintaining a library, securing malpractice insurance, renting of office space, purchasing utilities, etc., are subsumed within the charges the lawyer is making for professional services. 

 

ii.  Disbursements.  When the term disbursement is used, clients should expect that the lawyer will be passing on to the client those actual payments of funds made by the lawyer on the client’s behalf, and if the lawyer flies to LA for the client, the client can reasonably expect to be billed as a disbursement, the amt of the taxi, hotel, airfare, meals.   It would be improper to assess a surcharge on these disbursements over and above the actual amount incurred, UNLESS the lawyer incurred actual expenses beyond the actual cost of the disbursement item. Likewise, if the lawyer receives a discount, that should be passed onto the client.

 

 

 

iii. In-House Service Provisions.  Photocopying, computer research, on-site meals, deliveries, etc., are allowed to be passed on to the client if agreed and reasonable.  If not agreement, the lawyer is obliged to charge the client no more than the direct cost associated with the service, plus reasonable allocation of overhead expenses directly associated with the provision of the service, e.g., the salary of a photocopy machine operator.  

 

iv.  Contingency Fees. 

1.  Contingency fees are not limited to personal injury actions, non-litigation matters, or patent-infringement, etc.  Sometimes they are used in matters where the contingency is the amount saved, rather than the amount gained, (e.g. a breach of K case in which the defense lawyer’s fee depends on the amount the Df saves by winning).

2.  ABA Model Rule 1.5 holds that a lawyer must not use a contingency fee when defending someone in a criminal case. Restatement ss35 (1)(a) prohibits contingency fees for prosecutors as well, b/c she might seek convictions more than justice. 

 

3.  ABA Model Rule 1.5(d)(1) prohibits a contingency fee in a domestic relations case, only if the contingency is getting a divorce, or the amount of alimony or support, or a property settlement.  The purpose is to avoid a lawyer discouraging reconciliation.

4.  There are two conditions on the use of a contingency fee.  One, the client must first be fully informed of the alternative fee arrangements. This means that the lawyer must discuss the situation in detail, including chances of success, how much may be won or lost, the possibility of multiple or exemplary damages and that effect on the fee, chances the other side will want to settle. Plus, if the client agrees, the fee cannot be objectionable on the ground that the client could have afforded to pay on some other basis.  Second, the amount of the contingency fee must be reasonable; ABA Model Rule 1.5(a), and Restatement Thrid ss35. Reasonableness is measured at the time of making the agreement, not when due.

Note:   A ct or disciplinary agency may conclude that a contingency fee is unreasonable, if a lawyer knows at the outset that the client had a strong case and settlement would be easily attainable under that condition.

v.  Loans to Clients–ABA Model Rule 1.8(e) prohibits loans to clients where litigation is pending or about to be pending, except the lawyer may lend the client money to cover court costs and litigation expenses.           

vi.  Fee Forfeiture–the term is sometimes used incorrectly when a court imposes sanctions on a lawyer for filing a frivolous action, abusing discovery procedures. 

One type of fee forfeiture occurs when the sanction consists of the ct barring the lawyer from collecting a legal fee, to which she would otherwise have been entitled. 


Second type occurs if a lawyer accepts funds that were derived from criminal conduct, such as drug trafficking or racketeering, then the lawyer may have to forfeit the fee to the government. See 18 U.S.C. ss1962-63 (1994), and 21 U.S.C. ss 848, 853 (1994), and Caplin & Drysdale v. U.S., 491 U.S. 617 (1989); U.S. v. Monsanto, 491 U.S. 600 (1989). 

 

A third type is where a lawyer commits a clear, serious violation of a duty to a client, such as if a lawyer tries to represent a client without disclosing a serious conflict of interest.  See Restatement 3d ss37, and Burrow v. Arce, 997 S.W.2d 229 (TX 1999).

 

c.  Client Trust Accounts

ABA Model Rule 1.15 requires attorneys to keep their client’s money/property separate from their own and the law office accounts, and never commingle those funds, to maintain adequate records, to notify clients promptly when money or property is received on their behalf, and to deliver promptly any money or property that belongs to clients.  See also Restatement Governing Lawyers, ss44 (2000).  When a lawyer receives a large sum, to be held for a long period, she should make a specific agreement on how the fund will be handled.

 

Note: The interest received on those moneys being held also belong to the client.  Use special interest-bearing accounts called IOTA, “Interest on Lawyers’ Trust Accounts.”   The bank send the interest drawn on small sums, being held for short periods, to legal programs that service the poor. 

1.  Expense Advances are the client’s property and cannot be commingled.  Also money given on work already performed is the lawyer’s money and cannot be commingled.

2.  Retainers.  Attorneys use the term to mean a lump sum paid by the client at the outset of a matter, and under that definition it is the lawyer’s property when it is paid.  State rules vary on the definition.   “Non-refundable retainer” fees are grounds for discipline because they inhibit the client’s freedom to fire the lawyer and because a lawyer gets paid a large sum for little or no work.  See In re Cooperman, 83 N.Y.2d 465 (1994).  Some states tolerate non-refundable fees, but only when reasonable in the amount; if a fee proves unreasonable, the lawyer must refund part of it.  Under ABA Model Rule 1.16(d), if an attorney uses the term retainer to mean an advance payment of fees for work that the lawyer will perform in the future, and he withdraws or is fired, he must return the unearned portion. 

Note: Explain to the client what is meant if the term is used, and express that understanding in writing.

3.  Recordkeeping.  Under MR 1.15, an attorney is required to keep “complete records’ of all the client’s money/property that comes into the attorney’s possession, (good rule keep 6yrs), and to render appropriate accountings to the client. Most states require a ledger sheet for each client, indicating dates, amts, etc., and a journal sheet for each bank account, and canceled checks.

4.  Client Security Fund.  A source of money that can be used to reimburse the hapless clients of dishonest lawyers, within certain bar associations.

 

MR 1.5

No arrangement, charge, or collection of Unreasonable fee/expenses.

Factors:

Time and Labor involved, Skill, Novelty, Difficulty of claim;

Loss of other employment;

Customary Fee

Amount involved and results obtained;

Time limits Imposed (S.O.L.);

Previous Relationship;

Experience, Reputation, Ability of L;

Fee, Fixed or Contingent (contingent higher b/c it a gamble on success and time involved).

Fee Should be communicated in WRITING;

Contingency Fees must be in WRITING describing how calculated, and expenses the C is liable for

No contingency fee in Domestic or Civil;

Fee Splitting is NOT ALLOWed unless:   Proportional to service performed or each assumes Joint Responsibility AND C is advised, consents, and FEE is Reasonable.

* IF advanced then unused portion goes back to the C when fired or w/d

* Contingency fee allowed in post-judgment collection of c. supp or alimony

* May accept Prop if not INT within Subject matter

* Fee and Scope must be communicated

 

MR 1.8(i)

L shall not acquire Prop INT in COA except;

Lien authorized by Law to secure L’s fee;

K with C for R. Contingency Fee in Civil cases.

* K for security only if terms are fair and reasonable to C and ICW, signed

* Avoids giving L too great INT in Rep and L is not so easily discharged

 

MR 1.8 (e)

No financial assistance, except Court costs with an agreement for repayment upon outcome; AND If C is indigent, L may pay court costs and expenses.

* Includes no loans for living expenses b/c it would encourage litigation that otherwise would not be brought and it gives L too great of an economic stake. 

 

Limits on Contingency Fee Amount - if amount exceeds 50% then the L has more at stake in the COA than the C and at 51% raises the presumption of impropriety. 

Michigan Court Rule – bars contingency fee in Personal injury or wrongful death actions beyond 33%.

If Contingency Fee exceeds amount of work done, i.e. 3 min = $26 K = unreasonable.

MR. 1.15

L shall hold C’s or 3rd P’s property separate from own and shall safeguard by keeping records for 5 years.

L may deposit his funds to pay for banks service fees.

Shall deposit legal fees/expenses paid in advance in C’s trust,

On receipt, shall promptly notify and deliver to C a full accounting, unless agreement otherwise.

If 2 or more (could be L) claim INT, then keep separate until dispute is resolved.  L shall promptly deliver Prop not in dispute.

* Includes Prop of Prosp. C.

* Funds rec’d as payment for legal fees earned = L’s = separate

* Disputed Funds = Trust account

* If 3rd claim INT and dispute - hold in separate

 

Retainers:

* When L takes money and agrees to provide services as C gives them over period of 1 year – earned and L’s has an ongoing legal obligation.

*Money drawn from an account as earned (hourly) after services are provided, the money is the C’s (separate account), until after the work.

 

 

MR. 7.4 Political Contributions

L or Firm may not accept government position if made a political contribution in consideration for that position. 

* Public Question the legitimacy of L’s competency and merit

* Raises misconduct questions

* Includes any Gift, Loan, Advance, Deposit or anything of value to a candidate, incumbent, party, or committee        

-but not uncompensated services

* Political Action Committee owned or operated by Firm = Firm

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Whether a L may advertize or solicit services?

 

RE:  Advertising and Solicitation

Advertising is the general communication by an attorney with the public at large.  Solicitation is a client gathering activity that involves personal contact (face to face or via telephone), that is initiated by a lawyer or his agent, and a specific potential client. An example of a blatant form of solicitation is ambulance chasing, where the lawyer hires an agent to urge injured people to employ the lawyer to represent them.

1.  Bates v. State Bar of Arizona, 433 U.S. 350 (1977), the state’s ban on lawyer advertising was immune from attack under the Sherman Antitrust Act b/c the ban was promulgated by an arm of the state government, the AZ S. Ct.   The 1st Amendment commercial speech doctrine protects attorney advertising that is truthful and not misleading.           

 a.  In re R.M.J., 455 U.S. 191 (1982), the unanimous Court held that under the commercial speech doctrine a state may flatly prohibit lawyer advertising that is false or misleading, and that a state may regulate advertising that is not misleading if the state can demonstrate that the regulation directly serves a substantial state interest, and that the regulation is not more extensive than is necessary to serve that interest.

 

Gen. Rule – L may advertize, but subject to State’s Reasonable Regulation, States can forbid in-person where the possibility of overreaching Ls or misleading may occur.

 

MR 7.1

L can’t make False or Misleading communications regarding the L’s services

False of Misleading if communication contains a material misrepresentation of Fact or Law or Omits a fact necessary to make Statement not materially misleading as a whole.

* Must be truthful

* Truthful but misleading is Barred.

* In person allowed to protect C’s right to associate and to assert civil rights b/c economics are not the primary issue.

 

Types of False or Misleading communications

- Misstating or Failing to state material info

- Create unjustified expectation about the results

- Make unverifiable comparison of services

 

 

 

 

 

 

 

 

Whether a State may limit attorney Advertizing or Solicitation?

 

Generally states must establish Substantial interest to regulate commercial speech.

i.  Florida Bar v. Went For It Inc., 515 U.S. 618 (1995), Commercial speech like direct target advertising, may be regulated if the govt satisfies a test of three prongs: 1) the govt must assert a substantial interest in support of its regulation; 2) the govt must demonstrate that the restriction on commercial speech directly and materially advances that interest; and 3) the reg must be ‘narrowly drawn.’

a.  Ohralik v. Ohio State Bar, 436 U.S. 447 (1978), a state may forbid in-person solicitation of fee-generating legal business under circumstances likely to produce fraud, undue influence, or similar evils.

ii.    Bates v. State Bar of Arizona, 433 U.S. 350 (1977), the state’s ban on lawyer advertising was immune from attack under the Sherman Antitrust Act b/c the ban was promulgated by an arm of the state government, the AZ S. Ct.   The 1st Amendment commercial speech doctrine protects attorney advertising that is truthful and not misleading.

 a.  In re R.M.J., 455 U.S. 191 (1982), under the commercial speech doctrine a state may prohibit lawyer advertising that is false or misleading, and regulate advertising that is not misleading if the state can demonstrate that the regulation directly serves a substantial state interest, and that the regulation is not more extensive than is necessary to serve that interest.

 

MR 7.2 

L may Advertize with written, recorded or electronic means

L can’t give anything of Value for recommendation, other than R. costs of Advertisement.

Ad must name at least 1 responsible L or Firm for content, w/ an address

* Allows the public to get info on L, Firm, and their services

* Internet is electronic, but R. Time on internet is barred.

 

MR 7.3

No In-person, Real Time Electronic, or Live Telephone solicitation for economic gain, unless: P is a L, Family of L, or Personal or Prior Relationship.

No solicitation if: C informed L; Solicitation involves Coercion, Duress, or Harassment.

Solicitation must include “Advertising Material” on envelope and on correspondence.

* L may use Pre Paid Legal Services (if organization is not owned or operated by L), that uses solicitation to gain members not known to need Legal services.

* R. seeks to avoid possibility of Undue Influences, Intimidation, and overreaching L’s.

* General announcements and L’s responses do not need “Advertising Material.”

NOTE: If solicitation involves a Free Service NOT the Rule.

 

 

i.  In re Primus, 436 U.S. 412 (1978), overturned the public reprimand of the atty, because she had not been guilty of in-person solicitation for pecuniary gain, she had only conveyed an offer of free legal help by a recognized civil rights group.  NAACP v. Button, 371 U.S. 415 (1963), established that 1st Amendment protects collective activities undertaken to gain meaningful access to courts and that the government can regulate such activity only with narrow specificity.

ii.  Shapero v. Kentucky Bar Ass’n, 486 U.S. 466 (1988), the State cannot ban solicitation letters outright, but it can impose reasonable regulations on their use.  Solicitation letters involve a lessened likelihood of risk that the lawyer will invade the client’s privacy, overreach, or use undue influence because the recipient can set the letter aside for later study, ignore completely, or simply throw it away.  Solicitation letter can be policed by requiring copies to be sent to the regulatory agency.

 

MR 7.4

Can’t Advertize as a Specialist unless: Patent or Admiralty attorney

No Qualification/Speciality Certificate advertizing unless State authority/Bar Ass’n approves certifying organization AND name of certifying organization is clearly i/d in the communication.

* Speciality claims are subject to False or Misleading Standard

* Certification signifies Advanced degree of knowledge, experience in an area of the law that a general practitioner doesn’t have.         

 

MR 7.5 Firm

L may not use Firm name or Letterhead or other Professional designation that are False or Misleading or contains material misrepresentation of Fact or Law, or Omits a fact necessary t make the statement not materially misleading as a whole.

Can use Trade Names if no association with the Govt and Not misleading

Firm in more than 1 jurisdiction, then identify the L’s licensing State if not that jurisdiction.

L holding Public Office can’t appear on Firm Name unless activity and regularly practicing with the Firm. 

* L or Firm may be designated by distinct WEB address

* Only State/Imply Partnership or Organization when True

 

 

 

 

 

 

 

 

 

 

 

Whether an attorney is Competent?

 

LEGAL MALPRACTICE

The Relationship between Legal Malpractice and Discipline by the Bar.  The term “legal malpractice” refers to the attorney’s civil liability to a client, or other injured person for professional misconduct or negligence.  The difference between malpractice actions and discipline are : the forum–civil ct v. discipline board/hearing; attorney’s adversary is the injured v. disciplinary authority; and the purpose in malpractice is to obtain money while the bar seeks to punish the lawyer or protect the public.

a.  Restatement ss52(2), provides that, in a negligence action, the trier of fact may consider the defendant lawyer’s breach of a statute or rule as an aid to understanding and applying the standard of care, provided the statute or rule was designed to protect people similarly situated as the plaintiff.  Yet, under ABA Model Rule 1.16(a)(1), if the attorney can show the client insisted that she further or commit and illegal act, the lawyer may be shielded from liability.

 

Liability for Malpractice Theories of Liability–the choice of which can be an important factor as it relates to the measure of damages, and applicable statutes of limitations.

a. Intentional Torts: misuse of funds, or abuse of process, or misrepresentation. 

b. Breach of Fiduciary Duty: an attorney’s fiduciary duty includes keeping a client’s confidences, safeguarding the client’s money and property, avoiding conflicts of interest, being honest with the client, adequately informing the client, and following the client’s instructions.  See also RS 3d ss49, comment b(2000).

c.  Breach of Contract: one source is the express agreement, written or oral, where the client hires the attorney to perform legal services.  Even without an express agreement, the court may imply that an agreement to use ordinary skill and care to protect the client’s.

d.  Ordinary Negligence: the plaintiff must prove the elements of negligence as it applies the attorney-client relationship. Under RS ss50, the attorney owes a duty of care to the client.  Under RS ss14(1)(b) a person can become a client simply by asking the attorney for legal help, if the atty does not decline, and if the atty knows or should know that the person will rely on the atty to give the help.  See De Vaux v. American Home, 387 Mass. 814 (1983).

There are Four situations where an attorney owes a duty of care to a non-client.

A.  Prospective Client.  See RS ss 15(1)(a), and ss51(1).  Ex: where a prospective client reveals confidential information to the atty to enable him to check for conflicts of interest.  If the atty reveals the information, he has breached his duty of care.

B.  Invited Reliance.  Atty owes duty of care to a non-client if the atty invites the non-client to rely on work the atty does for a client, and if the non-client does rely on it.  Also if the client does the inviting and the attorney does not object. See RS ss51(2).

 

 

C.  Non-client is intended to Benefit.  Atty owes a duty of care to a non-client if the atty knows that one of the client’s primary reasons for getting the legal service is to benefit the non-client.  See Lucas v. Hamm, 56 Cal.2d 583 (1961); RS ss51(3)(b) and (c).

 

D.  Breach of Fiduciary Duty by Client.  See RS 51(4).

Standard of Care.

--If atty Df is a general practioner, then the standard is the skill and knowledge ordinarily possessed by attys under similar circumstances. See RS ss 52(1).

-- If the atty is a specialist, or acts in a specialized area of law, the  atty must exercise the skill and knowledge possessed by attys in that specialty.  See RS ss 52, comment d.

-- Geographical area may define the standard of care in which the lawyer rendered the legal service. Hence, lawyers in rural areas are held to the same standard as their cousins in the big city.  Those from the big city, are held to possess the knowledge and skill of local customs, practice, and rules of rural courts.

 

Breach of the Duty of Care.

--  In Hodges v. Carter, 239 N.C. 517 (1954), lawyers are not liable for ‘mere errors in judgment,’ where he acted in ‘good faith and in an honest belief that his advice and acts are well founded,’ or ‘for a mistake in a point of law which has not been settled by the court of last resort in his state,’ and the judgment must be a well-informed judgment, not one made in ignorance.  EX: where an atty makes a tactical decision, such as what questions to ask a witness.  So long as well-informed judgment, it is not malpractice.                                     

--  Failing to find and interview key witnesses, or failing to consult with appropriate experts, or failing to discover pertinent statutes or regulations, or failing to conduct a reasonable factual investigation, may leave the atty liable.  See Woodruff v. Tomlin, 616 F.2d 924 (6th Cir. 1980).

 

 Actual Cause.

-- Proof that the injury would not have happened but for the Df’s negligent act.  See RS ss53.  Sometimes the but for analysis is inadequate to determine actual cause, in that case the court can use the substantial factor.  Where several acts united to cause an injury–and any one of them alone would have been sufficient to cause the injury. 

 

Proximate Cause.

-- RS s 53 (“legal cause” as the equivalent of “proxim cause”), and the Pl must prove not just actual cause, but that the injury was the P.C. for any unexpected injuries or expected injuries that occurred in unexpected ways.   Damages.

-- Plaintiff must plead and prove the atty’s conduct caused an injury/damages.   Damages can be direct, immediate, natural, and anticipated damages; or consequential damages, or those that flow indirectly but are reasonably foreseeable, ex: reputation damage.  

 

Defenses to Legal Malpractice Claims

The attorney reasonably believed that the action was required by a law or a legal ethics rule.  See RS ss54(1), and ABA Model Rule 1.16(a)(1), adhering to a legal ethics rule could be a complete defense.

 

If Contributory or Comparative Negligence is recognized in the jurisdiction.

 

Assumption of Risk and Failure to Mitigate Damages can be partial defenses to the extent that local law recognizes them.

-in pari delicto doctrine, (bars plaintiff from recovering when the Pl and the Df cooperated in an illegal venture and are equally culpable).

 

Statute of Limitations.

-Although generally, statutes of limitations do not run while the lawyer continues to represent the client in the matter at hand or a substantially related matter. 

-The statute of limitations in a legal malpractice case does not start to run until the lawyer notifies the malpractice to the client, or the fact that the client knows or reasonably should know, indicate that malpractice occurred.

-The statute of limitations does not start to run until the alleged malpractice significantly injures the plaintiff. 

 

Vicarious Liability.

i.  A law firm is civilly liable for injuries caused by an employee or principal of the firm who was acting in the ordinary course of the firm’s business, or with actual or apparent authority.  See RS ss 58(1).

ii.  If the firm is organized as a partnership without limited liability, the general law of partnership makes each partner jointly and severally liable with the firm.  See RS ss59(2).  Vicarious liability helps maintain the quality of legal services, by making both the firm and its principals stand behind the work of every lawyer and employee in the firm.

iii.  Legislatively created professional corporations, and limited liability general partnerships, and limited liability companies leave the law firm liable for injuries cause during the course of business, but the principals are generally not personally liable for negligence or misconduct in which they did not participate personally or as supervisors. 

 

 

 

Malpractice Insurance.

i.  The MR do not require malpractice insurance.  In shopping for malpractice insurance be aware that different policies differ dramatically in their features.  See R. E. Mallen, Law Office Guide to Purchasing Legal Malpractice Ins.(1998 ed.).

-‘occurrence’ v. ‘claims only’ policies, and “prior acts” coverage.

-option of selecting defense counsel on a claim

-liability limits

-size of deductible

-persons covered, kinds of acts/omissions, and exclusions.

 

MR 1.1

L must act Competently, exercise and provide Legal Knowledge, Skill, Thoroughness and Preparation as Reasonably necessary. Factors are Relative complexity and Specialized Nature of  the matter, L’s general Experience, Training, Expertise in the Field, and Whether feasible to refer the matter to, or associate/consult w/ L of established competence in that Field.

* No special training is required beyond Analysis of Precedent, identification of issues, evaluation of evidence and legal drafting.

* In emergency may give advice or assistance but limited to that which is R necessary to subdue or outlast the emergency.

 

MR 1.2 Scope

L must abide by the C’s decisions regarding Objectives, Settlement, Pleas, Testify, Waiver of Jury.

L may limit scope of Rep if C gives ICW

L shall not counsel C to commit, engage, or assist in crime or fraud, but L may discuss legal consequences with a Good Faith effort to determine the Law.

* If L and C can’t solve the disagreement, then W/D

* Ct has ultimate authority to Settle, Plea, Waiver, etc.

* C w/ Diminished Capacity, then look at MR 1.14

 

MR 1.14 Diminished Capacity

C’s ability to make decisions is diminished, THEN L shall maintain NORMAL A-C relationship if R possible.

If Substantial Risk of Harm w/o action, when L believes Diminished and L can’t act, THEN L may seek Guardian or other means.

* May be Minor, Advanced Age, or Disabled.

* Other means = consult the Family, Durable Power of Attorney, Professional Services. Factors to look at:

-Ability to Assist with the COA

- Articulate

- Ability to Appreciate consequences

* Disclosure of Diminished Capacity is prohibited b/c it affects C’s INTs but L may reveal as R. necessary to protect C’s INT.

MR 1.3

L shall act with R. Diligence and Promptness

* L does not have to press every advantage, may have authority to exercise Professional Discretion

* An Ethics violation does not automatically mean malpractice, or raise the presumption of malpractice.  It is only a relevant evidence.

 

MR 1.4 Communication

L shall keep C R. Informed and discuss matter so the C can make Informed decisions; Promptly comply with R requests for information.  L shall R. consult C regarding the means and limits of L.

* R. communication enables the C to effectively participate

* L may not Delay or W/H info unless C has previously instructed the L

 

Whether an attorney has a Duty of Care?