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Hot Off the Presses: Recent Cases & Decisions (Series: Legal Ethics - Best Practices)

This webinar is for the lawyer -or anyone else- who wants to brush up on the latest issues and strategies to be aware of regarding legal ethics and best practices. The panelists discuss recent and important case law in the area and explain how those decisions can have real-world impact on the situations you may be involved in. Among others, the panel will address the following Model Rules of Professional Conduct: Rule 1.7-Conflict of Interest: Current Clients; Rule 1.8-Conflict of Interest: Current Clients: Specific Rules; Rule 3.8 - Special Responsibilities of a Prosecutor; and Rule 4.4(a) Respect for Rights of Third Persons.

To view the accompanying webinar, go to: https://www.financialpoise.com/financial-poise-webinars/recent-cases-decisions-2021/

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Hot Off the Presses: Recent Cases & Decisions (Series: Legal Ethics - Best Practices)

  1. 1. 1
  2. 2. 2 Practical and entertaining education for attorneys, accountants, business owners and executives, and investors.
  3. 3. Disclaimer The material in this webinar is for informational purposes only. It should not be considered legal, financial or other professional advice. You should consult with an attorney or other appropriate professional to determine what may be best for your individual needs. While Financial Poise™ takes reasonable steps to ensure that information it publishes is accurate, Financial Poise™ makes no guaranty in this regard. 4
  4. 4. Meet the Faculty MODERATOR: Michelle Gershfeld - Law Offices of Michelle Gershfeld PANELISTS: George Kuney - University of TN College of Law Bernard Burk - Formerly University of North Carolina School of Law Gerald Meyer - MoloLamken LLP 5
  5. 5. About This Webinar Hot Off the Presses - Recent Cases & Decisions This webinar is for the lawyer -or anyone else- who wants to brush up on the latest issues and strategies to be aware of regarding legal ethics and best practices. The panelists discuss recent and important case law in the area and explain how those decisions can have real-world impact on the situations you may be involved in. Among others, the panel will address the following Model Rules of Professional Conduct: Rule 1.7-Conflict of Interest: Current Clients; Rule 1.8-Conflict of Interest: Current Clients: Specific Rules; Rule 3.8 - Special Responsibilities of a Prosecutor; and Rule 4.4(a) Respect for Rights of Third Persons. 6
  6. 6. About This Series Legal Ethics – Best Practices Corporate scandals make the headlines periodically, but businesses and the lawyers that work with them face ethical challenges every day, even in situations that are legally compliant. This webinar series examines ethical issues confronted by lawyers in a variety of contexts. The panelists consider and recommend different approaches to ethical decision- making and lawyers responsibilities and concerns, especially in light of the impact of the COVID-19 pandemic. Each Financial Poise Webinar is delivered in Plain English, understandable to investors, business owners, and executives without much background in these areas, yet is of primary value to attorneys, accountants, and other seasoned professionals. Each episode brings you into engaging, sometimes humorous, conversations designed to entertain as it teaches. Each episode in the series is designed to be viewed independently of the other episodes so that participants will enhance their knowledge of this area whether they attend one, some, or all episodes. 7
  7. 7. Episodes in this Series #1: Best Practices Regarding Technology Premiere date: 2/10/21 #2: How to Avoid Malpractice & Disciplinary Actions - General Do's and Don'ts Premiere date: 4/14/21 #3: Hot Off the Presses- Recent Cases & Decisions Premiere date: 5/12/21 8
  8. 8. Episode #2: Hot Off the Presses - Recent Cases & Decisions 9
  9. 9. Prosecutors’ Use of Coercive Process on Lawyers: The Search Warrant Served on Rudy Giuilani There are multiple constraints on prosecutors’ use of coercive process (search warrants and grand jury subpoenas) on lawyers in order to safeguard the attorney- client privilege and prevent undue intrusion into the attorney-client relationship: • Ethical Constraints: ABA Model Rule 3.8(e): The prosecutor in a criminal case shall . . . not subpoena a lawyer in a grand jury or other criminal proceeding to present evidence about a past or present client unless the prosecutor reasonably believes: (1) the information sought is not protected from disclosure by any applicable privilege; (2) the evidence sought is essential to the successful completion of an ongoing investigation or prosecution; and (3) there is no other feasible alternative to obtain the information . . . . The rule is by its terms limited to prosecutorial subpoenas to lawyers, but prosecutors tend to be even more careful with more intrusive means such as search warrants.
  10. 10. Prosecutors’ Use of Coercive Process on Lawyers: The Search Warrant Served on Rudy Giuilani • Self-imposed constraints adopted by prosecutorial authorities  For example, the Justice Manual, an internal handbook governing the conduct of all federal prosecutors, requires that prosecutors not seek a search warrant on an attorney’s premises or materials unless:  Less intrusive methods will substantially jeopardize the effectiveness of the process;  The materials sought are of substantial importance to the investigation;  The warrant is drawn as narrowly as reasonably possible; and  A senior Justice Dept. official has approved seeking the warrant Justice Manual §§ 9-13.420, 9-19.220  Many state prosecutors’ offices have voluntarily adopted similar constraints • Court-supervised processes during and after search and seizure to protect privileged materials:  Execution of the warrant and post-seizure review by a separate ―taint‖ or ―privilege team‖  Review of seized materials for privilege by a judicial officer or special master
  11. 11. Prosecutors’ Use of Coercive Process on Lawyers: The Search Warrant Served on Rudy Giuilani What if a lawyer is served with a subpoena? • Ethical Constraints: ABA Model Rule 3.8(e): The prosecutor in a criminal case shall . . . not subpoena a lawyer in a grand jury or other criminal proceeding to present evidence about a past or present client unless the prosecutor reasonably believes: (1) the information sought is not protected from disclosure by any applicable privilege; (2) the evidence sought is essential to the successful completion of an ongoing investigation or prosecution; and (3) there is no other feasible alternative to obtain the information . . . . • Some states have statutory or case law applicable in civil disputes limiting subpoenas on lawyers in similar terms
  12. 12. Prosecutors’ Use of Coercive Process on Lawyers: The Search Warrant Served on Rudy Giuilani • The Lawyer’s Obligations when Served with a Subpoena:  The lawyer must respond to the subpoena (it’s a court order directed to the lawyer, not the client)  The lawyer must take reasonable care to protect the client’s confidential and privileged information and documents. ABA Model Rule 1.6(c).  That includes asserting all reasonably available privilege and other objections  The lawyer must confer with the client about which objections to assert (unless precluded by law), but has the final call except about whether to disclose confidential information or waive any privilege, which is the client’s call. ABA Model Rules 1.2(a), 1.4, 1.6(a).  If the client is unwilling or unable to confer, the lawyer must assert all colorable objections  The lawyer must defend those objections through a final order  The lawyer must do all this whether or not the client is willing or able to pay for it  Consequences for failing to do so include potential discipline and civil liability  Practice tip: Include a provision in your engagement letter requiring the client to pay for such services
  13. 13. Federal Rule of Civil Procedure 11  Overview: Pleadings filed in federal court must have a good faith basis  Factual assertions are, to the best of the signer’s knowledge after a reasonable inquiry, well-grounded in fact  Legal arguments are warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law  Pleading, as a whole, is not made for an improper purpose, such as:  To harass,  To cause unnecessary delay, or  To needlessly increase the costs of litigation.
  14. 14. Sanctions for Violations of Rule 11 • Initiated by a motion of a party or by the court on its own initiative • The person facing sanctions must be given prior notice and an opportunity to respond • The Court may order sanctions against an attorney, a law firm, or a party to the litigation • Sanctions:  Are within the discretion of the court;  Must be limited to what suffices to deter the conduct;  May include nonmonetary penalties;  May include order to pay penalty to court;  May include order to pay opponent’s reasonable attorney’s fees and expenses directly resulting from violation.
  15. 15. Other Consequences for Pursuing Meritless Litigation Professional Discipline Model Rule 3.1: A lawyer shall not bring or defend a proceeding, or assert or controvert an issue therein, unless there is a basis in law and fact for doing so that is not frivolous, which includes a good faith argument for an extension, modification or reversal of existing law. A lawyer for the defendant in a criminal proceeding, or the respondent in a proceeding that could result in incarceration, may nevertheless so defend the proceeding as to require that every element of the case be established. 16
  16. 16. Other Consequences for Pursuing Meritless Litigation • Conduct subject to discipline:  Bring or defend a proceeding whose basis in law or fact is ―frivolous‖  Assert or controvert an issue on grounds whose basis in law or fact is ―frivolous‖ • Two exceptions:  Assert a claim, defense, or issue based on ―good faith argument for an extension, modification or reversal of existing law‖  Criminal defense counsel may put the prosecution to its proof, and deny each element of the crime (reflects the defendant’s constitutional right to proof of guilt beyond a reasonable doubt) 17
  17. 17. Other Consequences for Pursuing Meritless Litigation • What does ―frivolous‖ mean for these purposes? • Model Rule 3.1 Comment [2]: ―The filing of an action or defense or similar action taken for a client is not frivolous merely because the facts have not first been fully substantiated or because the lawyer expects to develop vital evidence only by discovery. What is required of lawyers, however, is that they inform themselves about the facts of their clients’ cases and the applicable law and determine that they can make good faith arguments in support of their clients’ positions. Such action is not frivolous even though the lawyer believes that the client’s position ultimately will not prevail. The action is frivolous, however, if the lawyer is unable either to make a good faith argument on the merits of the action taken or to support the action taken by a good faith argument for an extension, modification or reversal of existing law.‖  Given this standard (which is quite similar to Rule 11’s), it’s not surprising that disciplinary proceedings are pending or have been referred or urged against a number of the lawyers involved in litigating presidential election challenges 18
  18. 18. Other Consequences for Pursuing Meritless Litigation • Civil Liability (besides sanctions) • Defamation:  Not for the statements in the lawsuits, which are typically privileged (that is, immune from liability) under state law  But for the extrajudicial public statements at press conferences and the like, which are typically not protected  For example, the billion-dollar defamation claims filed by the makers of accused voting machines and software against Rudy Giuliani and Sidney Powell • Abuse of Process  the existence of an ulterior purpose or motive underlying the use of some legal process; and  some act in the use of the legal process that is not proper in the regular prosecution of the proceedings. 19
  19. 19. Other Consequences for Pursuing Meritless Litigation • Malicious Prosecution  the institution (and in some states, the continuation) of a civil or criminal legal proceeding against the plaintiff  by, or abetted by, the defendant (the prosecutor or plaintiff in the underlying malicious action)  without probable cause and  with primarily malicious purpose  with termination of the proceeding on the merits in favor of the plaintiff (the defendant in the underlying maliciously prosecuted action)  causing damages. • These are all intentional torts that can bear punitive damages 20
  20. 20. Other Consequences for Pursuing Meritless Litigation Practical tip: It’s the cases about which you feel most deeply in which you must always force yourself to step back and take a cold-eyed look at your case’s legal and factual basis. Write your opposing counsel’s Rule 11 (or state-law equivalent) motion in your head. 21
  21. 21. In-House Counsel’s Obligations Under Rule 1.8 ABA Model Rule 1.8: ―A lawyer shall not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security or other pecuniary interest adverse to a client unless: (1) the transaction and terms on which the lawyer acquires the interest are fair and reasonable to the client and are fully disclosed and transmitted in writing in a manner that can be reasonably understood by the client; (2) the client is advised in writing of the desirability of seeking and is given a reasonable opportunity to seek the advice of independent legal counsel on the transaction; and (3) the client gives informed consent, in a writing signed by the client, to the essential terms of the transaction and the lawyer's role in the transaction, including whether the lawyer is representing the client in the transaction.‖ In-house counsel are not exempt from Rule 1.8 and cannot obtain an ownership interest in their client- employer without following the requirements of Rule 1.8. Kaye v. Rosefielde, 75 A.3d 1168, 1203 (N.J. App. Div. 2013).
  22. 22. In-house Counsel: How to Keep the Comp You’re Promised • First, determine if Rule 1.8 applies to your compensation • Rule 1.8(a) covers  any ―business transaction with a client‖ or  the ―acqui[sition of] an ownership, possessory, security or other pecuniary interest adverse to a client,‖ whether or not related to the services the lawyer is providing, EXCEPT  An ―ordinary fee arrangement‖—that is, an agreement for the payment of money in return for legal services. Model Rule 1.8 Comment [1]. Nonmonetary compensation is generally still covered by the Rule.  A security interest in the litigation claims the lawyer will assert on the client’s behalf, or their proceeds (at least in a contingent-fee arrangement). Model Rule 1.8 Comment [16].  ―[S]tandard commercial transactions between the lawyer and the client for products or services that the client generally markets to others, for example, banking or brokerage services, medical services, products manufactured or distributed by the client, and utilities’ services.‖ Model Rule 1.8 Comment [1]. 23
  23. 23. In-house Counsel: How to Keep the Comp You’re Promised • If the exchange is excluded from Rule 1.8(a) but concerns a fee arrangement, then it still must comply with Rule 1.5, which requires the fee arrangement to be  Reasonable  Agreed at or near the inception of the engagement  ―Preferably in writing‖ (see Model Rule 1.5(b)), and mandatorily in writing and signed by the client for any part of the fee that is contingent (with all material terms of the contingent fee disclosed in writing, see Model Rule 1.5(c)) 24
  24. 24. In-house Counsel: How to Keep the Comp You’re Promised • If the exchange is governed by Model Rule 1.8(a), then:  Substantively, it must be ―fair and reasonable to the client.‖ Model Rule 1.8(a)(1)  Procedurally,  The terms of the transaction must be ―[i] fully disclosed and [ii] transmitted in writing [iii] in a manner that can be reasonably understood by the client . . . . Model Rule 1.8(a)(1)  The client must be ―advised in writing of the desirability of seeking . . . independent legal counsel on the transaction‖ and be ―given a reasonable opportunity‖ to do so. Model Rule 1.8(a)(2)  The client must ―give[] informed consent, in a writing signed by the client, to the essential terms of the transaction and the lawyer’s role in the transaction, including whether the lawyer is repre-senting the client in the transaction.‖ Model Rule 1.8(a)(3). • Failure to meet all of these requirements is a ground for professional discipline, and for rescission or avoidance of all or parts of the agreement 25
  25. 25. Inadvertent Disclosure of Confidential Information • Ethical and Legal Implications for Sending Attorneys • Act reasonably to prevent inadvertent disclosure  RPC 1.1 competence; RPC 1.6(c) confidentiality. Comment [18] adds that Rule 1.6 is not violated if disclosure occurs despite an attorney’s reasonable efforts • Common instance: In discovery and in electronic communication with opposing counsel 26
  26. 26. Inadvertent Disclosure of Confidential Information • Ethical and Legal implications for Sending Attorneys • Prevention  Privilege Review (in litigation)  Care in Using Email, such as checking email addressing before sending and marking privileged documents privileged • Planning  Clawback Agreements and Order – Fed. R. Evid. 502  Do not borrow standard from Fed. R. 502(b)  Seek client informed consent. Why? • Acting reasonably to mitigate the damage when inadvertent disclosure inevitably occurs 27
  27. 27. Inadvertent Disclosure of Confidential Information • Ethical and Legal Obligations of Receiving Attorneys • RPC 4.4(b) or Case Law  ―Notice only‖ approach – This is the Model Rules approach followed by the majority of states  ―Notice+‖ approach – A receiving attorney must provide notice to the sender and take other steps to protect the confidential information 28
  28. 28. Inadvertent Disclosure of Confidential Information • Ethical and Legal Obligations of Receiving Attorneys • In civil litigation in federal court, FRCP 26(b)(5)(B), Fed. R. Evid. 502 clawback agreements, and case law should also be considered.  If the document was disclosed in discovery, the receiving attorney will have to protect the confidentiality of the document in the short term, but may decide to seek a court ruling that the privilege was waived, which will turn on the clawback agreement or order (if there is one) or the court’s application of the waiver standard found in Fed. R. Evid. 502(b). 29
  29. 29. ABA Opinion 497 • Model Rules 1.9(a) and 1.18(c) prohibit a lawyer from representing anyone with interests that are ―materially adverse‖ to the interests of a former or prospective client in the same or a substantially related matter. • Clear examples:  Does not include mere competing economic interests (e.g., competitors in a marketplace);  Prohibits a lawyer from attacking own prior work for a client (e.g., challenging a patent the lawyer prepared for a prior client). • Opinion 497 explains ―material adversity‖ in more detail, providing three examples:  On one end of the spectrum, a lawyer cannot undermine prior work (as opposed to attacking it outright) (e.g., a lawyer cannot sue to undermine an element of a settlement agreement he helped negotiate);  Lawyer can generally sue a third party that has a business relationship with a former client; and  Lawyer cannot represent a client in a case in which a former client may be an adverse witness.
  30. 30. Can a Breach of Professional Duty Cause Forfeiture of Fees? Basic Answer: Sometimes. Here’s how it works: • Most states have a general principle of fiduciary law that a fiduciary who is operating under a significant breach of fiduciary duty is not entitled to compensation  There is interjurisdictional variation as to how serious the breach of fiduciary duty must be to invoke this doctrine  Where the rule applies, in many states that means no compensation at all, not just the avoiding of any contractual compensation in favor of quantum meruit  Which means that the rule is a complete defense to any claim for compensation  And it can ground a claim by the beneficiary for unjust enrichment to obtain the disgorgement (repayment) of any compensation already paid (within the statute of limitations) • That matters here because lawyers are fiduciaries to their clients, and quite a few jurisdictions have recognized this rule as applying to lawyers 31
  31. 31. Can a Breach of Professional Duty Cause Forfeiture of Fees? • This raises the question what kind of breach of professional duty is sufficient work a forfeiture of a lawyer’s compensation.  Answer: It varies from state to state  The most common kind of breach grounding a fee forfeiture is a serious conflict of interest (no resulting harm to the client generally need be shown!)  But some courts are growing receptive to relying on other serious ethical breaches as well. E.g., recent case of Vandenberg v. RQM, LLC, No. 1-19-0544 (Ill. App. June 26, 2020). • Practice tips:  Figure out the law in your state  Conflicts of interest (and other breaches of duty) can not only get you disciplined and disqualified; they can result in your forfeiting fees for work you already performed. 32
  32. 32. Prohibitions on Discrimination or Harassment: Model Rule 8.4(g) • Let’s start by talking about prohibitions on discrimination and harassment outside the Rules of Professional Conduct: Federal and most states’ law have powerful provisions forbidding discrimination and harassment in the workplace, commerce, and elsewhere for many different protected classes. • In addition, many states’ Rules of Professional Conduct address discrimination by lawyers:  The original version of the Model Rules of Professional Conduct promulgated in 1983 contained a Comment to Model Rule 8.4 explaining that knowing manifestation of bias or prejudice on any of numerous grounds ―in the course of representing a client‖ that was ―prejudicial to the administration of justice‖ violates Rule 8.4(d), which forbids conduct prejudicial to the administration of justice.  20-30 states adopted that Rule and Comment in identical or similar form, and still have it in effect today. 33
  33. 33. Prohibitions on Discrimination or Harassment: Model Rule 8.4(g) • In 2016, the ABA promulgated Model Rule 8.4(g), providing that it constitutes professional misconduct to: Engage in conduct that the lawyer knows or reasonably should 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. 34
  34. 34. Prohibitions on Discrimination or Harassment: Model Rule 8.4(g) • Conduct the new Rule says it does not prohibit:  It ―does not limit the ability of a lawyer to accept, decline or withdraw from a representation in accordance with Rule 1.16‖  It also is not a violation to charge any fee authorized by Model Rule 1.5. Model Rule 8.4 Comment [5]  It ―does not preclude legitimate advice or advocacy consistent with these Rules.‖ Expression of views that are unpopular or offensive regarding matters of public concern does not violate the Rule, consistent with the First Amendment rights of petition and free expression. ABA Formal Ethics Op. No. 493.  It does not prohibit Conduct undertaken by lawyers or law firms to promote inclusiveness or diversity in the workplace or the bar that are permitted under other applicable law. Model Rule 8.4 Comment [4]  Discriminatory exercise of peremptory juror challenges in violation of Batson v. Kentucky does not by itself establish a violation of the Rule. Model Rule 8.4 Comment [5]  It is not a violation to ―limit[] the scope or subject matter of the lawyer’s practice or . . . limit[] the lawyer’s practice to members of underserved populations in accordance with these Rules and other law.‖ Model Rule 8.4 Comment [5] 35
  35. 35. Prohibitions on Discrimination or Harassment: Model Rule 8.4(g) • How is the new Rule different from the interpretation of Rule 8.4(d) provided by the former Comment?  The new Rule covers a broader range of protected classes, adding ethnicity, gender identity, and marital status to the older Comment’s list.  The new Rule covers a significantly broader range of contexts:  The old Comment was limited to discriminatory conduct ―in the course of representing a client‖ that was specifically ―prejudicial to the administration of justice,‖ which was generally understood to mean it had affected, or at least taken place in, a pending proceeding  The new Rule defines the forbidden conduct to be any discriminatory or harassing activity, adding an express prohibition on harassment  The new Rule has no requirement the conduct be ―prejudicial to the administration of justice‖  And the new Rule applies to ―conduct related to the practice of law.‖ ―Conduct related to the practice of law‖ is a much broader scope that ―includes representing clients; interacting with witnesses, coworkers, court personnel, lawyers and others while engaged in the practice of law; operating or managing a law firm or law practice; and participating in bar association, busi-ness or social activities in connection with the practice of law‖ 36
  36. 36. Prohibitions on Discrimination or Harassment: Model Rule 8.4(g) • How is this new Rule different from the interpretation of Rule 8.4(d) provided by the former Comment?  Although Model Rule 8.4 Comment [3] defines ―discrimination‖ and ―harassment‖ in terms similar to other anti-discrimination laws, ABA Formal Ethics Op. No. 493 (2020) suggests that ―discrimination‖ or ―harassment‖ need not be ―pervasive‖ or ―severe‖ to violate the Rule, making the Rule more stringent than most anti-discrimination laws in this regard  The new Rule has a less demanding intent standard  The old Comment was limited to ―knowingly‖ manifesting bias or prejudice  The new Rule forbids anything the lawyer ―knows or reasonably should know‖ is discrimination or harassment 37
  37. 37. Prohibitions on Discrimination or Harassment: Model Rule 8.4(g) • Very few states have adopted Model Rule 8.4(g)  Only Vermont, Maine, and three U.S. territories have adopted the new Rule.  Pennsylvania also adopted the new Rule in 2020, but a federal district judge has preliminarily enjoined its enforcement on the ground it excessively chills speech protected by the First Amendment. An appeal is currently pending. • Given the broad patchwork of laws and regulations prohibiting discrimination and harassment, the state of the ethical rules on this subject in your jurisdiction will probably not change whether you will be in a world of hurt if you are shown to have engaged in discrimination or harassment. The only thing it will change is whether you are censured, suspended, or disbarred on top of everything else 38
  38. 38. Bitcoin, other Cryptocurrency, and NFTs • Lawyers can generally accept Bitcoin, other Cryptocurrency, or NFTs as payment • The Washington, DC Bar recently released an ethics opinion (Opinion 378) approving of the practice:  Model Rules 1.1, 1.5, 1.8, and 1.15 apply  Rule 1.5: The fee must be reasonable.  Given the volatility of cryptocurrency, the financial risks of the fee arrangement to the client must be adequately explained.  Rule 1.8(a): Business transactions with a client must be fair and reasonable, executed with informed consent, and the client must be advised of the desirability of seeking advice of independent counsel.  Rule 1.8 is implicated when the fee arrangement requires advance payment of fees or when the fee is calculated in cryptocurrency (rather than calculated in dollars and paid in cryptocurrency)  Fairness is evaluated at the time of the agreement  Lawyer should advise the client of all terms of payment in writing, including the financial risks to the client  Rules 1.1 and 1.15: The lawyer must competently and appropriately safeguard client property  Lawyer must understand how cryptocurrency is stored, and how to keep it from being lost or stolen
  39. 39. Lawyer Mobility and Client Choice of Counsel • Lawyers departing their firms have an ethical duty to protect clients’ interests during the transition. • ABA Formal Ethics Opinion 489 (2019) reiterates that a lawyer has the right to switch firms and notes that ethics rules do not allow non-competition agreements in legal employment or firm membership agreements. • When a lawyer is departing a firm, the lawyer and the firm must develop a plan that will allow the client to make decisions about who will represent them. It is the client’s choice of representation that governs; firms may not put in place rigid procedures that restrict or interfere with the client’s choice in this regard. 40
  40. 40. Can a lawyer representing him or herself receive an award of attorneys’ fees per a statutory or contractual provision? • The general rule at the federal level is ―no‖ per Kay v. Erhler, 499 U.S. 432, 438 (1991): • ―A rule that authorizes awards of counsel fees to pro se litigants—even if limited to those who are members of the bar—would create a disincentive to employ counsel whenever such a plaintiff considered himself competent to litigate on his own behalf. The statutory policy of furthering the successful prosecution of meritorious claims is better served by a rule that creates an incentive to retain counsel in every such case.‖ • This appears to be an extension of the hoary maxim that an attorney representing themselves has a fool for a client and also appears to attempt to limit members of the bar from ―do it yourself‖ work when they may be prone to litigate matters with excessive zeal given that they are not having to pay a lawyer or find one willing to underwrite the litigation under a contingency fee arrangement. 41
  41. 41. Exceptions to Kay v. Erhler Gregory G. Sarno, Recoupment by pro se litigant of attorney's fees under Equal Access to Justice Act, 107 A.L.R. Fed. 888, § 2 (1992): ―While the Supreme Court held in Kay v Ehrler … that pro se litigants who are attorneys were entitled to attorneys' fees under the Civil Rights Attorney's Fee Awards Act of 1976 (42 U.S.C.A. § 1988), the courts have reached mixed results as to whether, pursuant to the EAJA, pro se litigants who were attorneys should be awarded attorneys' fees under particular circumstances. … Similarly, the courts have reached mixed results in cases involving pro se litigants other than attorneys, awarding attorneys' fees under the EAJA in one case, but denying them in other cases.‖) (internal citations omitted).). 42
  42. 42. These Exceptions are Limited, but They Exist • Rickley v. County of Los Angeles, 654 F.3d 950 (9th Cir. 2011) (holding that Plaintiff was entitled to reasonable fees under Civil Rights Attorney's Fees Awards Act for wife's work in § 1983 action). • Krislov v. Rednour, 97 F.Supp.2d 862 (N.D. Ill. 2000) (holding that an attorney who represented himself and other parties in civil rights suit recovered attorney fees). 43
  43. 43. State Courts Largely Parallel the Federal Approach, including the Exceptions • Sonja A. Soehnel, Recovery Under State Law of Attorney's Fees by Lay Pro-se Litigant, 14 A.L.R.5th 947, § 1 (1993) (providing examples of cases in which state courts of various jurisdictions have applied the general rule.) • See Calhoun v. Calhoun, 529 S.E.2d 14 (S.C. 2000) (stating that ―whether a pro se litigant who is an attorney should be allowed to recover attorney fees is a novel issue in this state and that there is a split of authority on the issue in jurisdictions where it has been addressed.‖) The South Carolina supreme court in Calhoun was under the impression that ―A majority of those states have allowed pro se attorney litigants to recover attorney fees, while the minority rule denies such relief." While this may have been true of the majority position in 2000, most of the more recent sources have suggested that the majority was in favor of denying attorney fees, even to attorney pro se litigants. 44
  44. 44. The Same Analysis Applies to Contractual Provisions for Attorneys’ Fees • Trope v. Katz, 902 P.2d 259, 264 (Cal. 1995), is typical. • ―[A]ll the California courts that had considered the matter had held for many years that an attorney appearing on his own behalf could not recover attorney fees under either a statutory exception to the American rule or under a contractual attorney fee provision, because in such circumstances the attorney did not pay or become liable to pay consideration in exchange for legal representation.‖ • See, generally, Lonnie E. Griffith et al, Statute or rule authorizing attorney's fees— Contract or Commercial Transaction Cases, 20 C.J.S. Costs § 139 (2021). 45
  45. 45. About the Faculty 46
  46. 46. About The Faculty Michelle Gershfeld - MGershfeldlaw@gmail.com Michelle Gershfeld is a bankruptcy attorney, debt negotiator and personal financial life coach who advises people who are in debt, or building wealth, by identifying and overcoming obstacles that lie in their path to securing worry-free, financial wellness. Michelle’s private practice, Law Offices of Michelle Gershfeld, provides services to clients in financial distress to create a strategic, customized plan for each unique financial situation. Michelle defends foreclosures and evictions when necessary, and will assist clients to move forward with dignity, despite current hardships. Michelle also works with commercial clients to reorganize outside of a formal bankruptcy filing, which effectively serves businesses at reduced costs. 47
  47. 47. About The Faculty George Kuney - gkuney@utk.edu George W. Kuney is a Lindsay Young Distinguished Professor of Law and Director of the Clayton Center for Entrepreneurial Law at The University of Tennessee College of Law in Knoxville, Tennessee. He holds a J.D. from the University of California, Hastings College of the Law, an M.B.A. from The University of San Diego, and a B.A. in Economics from the University of California, Santa Cruz. Before joining the UT faculty in 2000, he was a partner in the Allen Matkins firm’s San Diego office. Previously he practiced with the Howard Rice and Morrison & Foerster firms in his hometown of San Francisco, doing litigation and transactional work largely in the context of business restructuring and insolvency. He teaches business law courses including Business Associations, Contracts, Contract Drafting, Commercial Law, Consumer Bankruptcy, Debtor-Creditor, Mergers and Acquisitions, Representing Enterprises, and Workouts and Reorganizations. Kuney has written a number of books and articles and given presentations about business, contracts, and commercial law and insolvency- related topics. He advises clients nationwide regarding bankruptcy, restructuring, reorganization, and related subjects. He is admitted to the bar in California and Tennessee. 48
  48. 48. About The Faculty Bernie Burk - bernie.burk@bernieburk.com Professor Bernard Burk previously taught at the University of North Carolina School of Law. He is currently sitting out the pandemic finishing a textbook on legal ethics, to be published later this year by Wolters Kluwer Law & Business, entitled Ethical Lawyering: A Guide for the Well-Intentioned (with Nancy Rapoport of the University of Nevada at Las Vegas School of Law, and Veronica Finkelstein, Asst. U.S. Attorney for the E.D. Pa. and adjunct at Drexel University School of Law). Prof. Burk engages in consulting and expert witness work in the areas of legal ethics and professional conduct. 49
  49. 49. About The Faculty Gerald Meyer - gmeyer@mololamken.com Gerald Meyer’s practice focuses on complex business litigation, white collar criminal matters and investigations, and appellate litigation. He has represented businesses, senior corporate officials, and individuals in a broad array of subject matters, including securities litigation, class actions, antitrust law, and constitutional law. He has tried cases to verdict and drafted and argued dispositive, discovery, and evidentiary motions in trial courts across the country. He has argued appeals before the Seventh Circuit, and has briefed appeals in the Supreme Court of the United States and numerous courts of appeals. Before joining MoloLamken, Mr. Meyer was an associate with Skadden, Arps, Slate, Meagher & Flom LLP in Chicago. He has represented companies and individuals in a wide range of tax planning matters, including mergers and acquisitions, restructurings, securities offerings, and issues involving tax-exempt organizations. Mr. Meyer also served as a law clerk to Judge Robert R. Beezer of the United States Court of Appeals for the Ninth Circuit and to Judge G. Steven Agee of the United States Court of Appeals for the Fourth Circuit. 50
  50. 50. Questions or Comments? If you have any questions about this webinar that you did not get to ask during the live premiere, or if you are watching this webinar On Demand, please do not hesitate to email us at info@financialpoise.com with any questions or comments you may have. Please include the name of the webinar in your email and we will do our best to provide a timely response. IMPORTANT NOTE: The material in this presentation is for general educational purposes only. It has been prepared primarily for attorneys and accountants for use in the pursuit of their continuing legal education and continuing professional education. 51
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