Current Ethical Issues for Legal Professionals.ppt

A Legacy of Integrity and Trust
CURRENT ETHICAL
ISSUES FOR LEGAL
PROFESSIONALS
Rob Charles
(520) 629-4427 (direct line)
(520) 879-4705 (fax)
RCharles@LRLaw.com

www.lewisandroca.com
Arizona Ethics Opinion on Restrictions
on Rights to Practice and Departing
Lawyers
• The State Bar of Arizona Committee on Rules of
Professional Conduct (Ethics Committee) issues
formal opinions that represent non-binding advice
on ethics issues for Arizona lawyers.
• In Op. 09-01, the Committee discussed the issue of
a firm that employs associate lawyers using a
contract that would require the departing associate
to pay a flat amount to the law firm for each
instance in which the departing associate continues
to represent a client that had previously been
represented by the law firm.

Op. 09-01 (cont.)
• Because ER 5.6 states that “a lawyer shall not
participate in offering or making: . . . a partnership,
shareholders, operating, employment or other
similar type of agreement that restricts the right of a
lawyer to practice after termination of the
relationship, except an agreement concerning
benefits upon retirement . . .” the restriction was
unethical. Firms may not impose financial
disincentives upon a withdrawing way’s right to
represent a client, as the decision to retain counsel
is the client’s decision, not the law firm’s.

Termination of Representation;
Withdrawal; Fees; Confidentiality
• In Op. 09-02, the Committee discussed issues
arising upon the termination of the lawyer/client
representation. Among other topics, ER 1.16
describes the circumstances under which a lawyer
may or shall withdraw from client representation. In
litigation, a court may have jurisdiction to decide
whether a lawyer is entitled to withdraw or not.

09-02 (cont.)
• The obligation to maintain client information
confidential as provided in ER 1.6 does not end
upon termination of the representation. A lawyer
may not disclose client confidential information
simply because the representation is terminated. In
fact, ER 1.9 explicitly imposes duties on a lawyer
with respect to former clients, including the
obligation to refrain from using client confidential
information to the disadvantage of the former client
or to reveal client confidential information except as
provided in the Rules. ER 1.9(c).

09-02 (cont.)
• If the termination of representation is as a result of
a controversy between the lawyer and the client,
ER 1.6(d)(4) may allow the lawyer to disclose client
confidential information “to respond to allegations in
any proceeding concerning the lawyer’s
representation of the client.” However, such
disclosures can be made only “to the extent the
lawyer reasonably believes necessary.” The lawyer
may not simply disclose all client confidential
information in the event of a dispute with a former
client.

09-02 (cont.)
• If the termination of representation arises because
of a dispute over the client’s providing fraudulent
evidence, the lawyer must consider ER 3.3(a)(3)
and decide whether disclosure is necessary if the
client will not remedy the problem of having
provided false evidence.

09-02 (cont.)
• Sometimes disputes arise in determination of
representation over the fee for withdrawal related
work. Legal fees must be reasonable. See ER 1.5.
The ethics opinion notes that most authorities
believe the client should not be charged for most
withdrawal-related work, in order to avoid chilling
the client’s ability to retain counsel of choice.

09-02 (cont.)
• The withdrawing lawyer has other obligations under
ER 1.9, including with respect to conflicts of
interest. ER 1.16(d) addresses the requirement
that the lawyer provide the client with a copy of the
file without charge, unless the lawyer had
previously provided the client with a copy of the file.

Trust Accounts;
Safekeeping Property
• There are lawyers licensed in Arizona who have offices in
Arizona and elsewhere. In the multistate practice of law,
some firms would prefer to keep their bank accounts in a
central bank, rather than in each jurisdiction where the law
firm or lawyer practices. The Arizona Committee explained
in Op. 09-03 that client funds may be held in the home
office’s trust account, but that the law firm must continue to
comply with the trust account rules. In addition, payment of
sums to the Arizona Foundation for Legal Services and
Education as required under Rule 43, Ariz. R. Civ. P.,
requires payment to the Arizona entity. Consolidating bank
accounts is not a basis to excuse the payment to the
AZFLSE.

Confidentiality; Maintaining
Client Files; Electronic Storage;
Internet
• Lawyers increasingly are attempting to maintain
files that have less paper, with a goal of becoming
“paperless.” Related to that goal is maintaining
client files in electronic form. Communications with
clients are increasingly electronic, through email
and the internet, rather than through meetings and
mail.

09-04 (cont.)
• The lawyer’s ethical obligation is to keep client information
confidential, and to take reasonable steps to make sure that client
files are not disclosed to third parties. See ER 1.6; Ethics Op. 05-
04. In Op. 09-04, the Committee talked about some of the steps
that a competent and reasonable attorney might take in order to
maintain client confidentiality, particularly of client files. The facts
of the opinion suggested extreme efforts at maintaining security
by the lawyer, including with respect to emails with the client.
These protections included password protections of the electronic
file storage, for emails, and for information that was available to
the client through a lawyer provided website. Those protections,
while extensive, were not in the opinion of the Committee, the
minimum standard. Rather, they represented one example of
appropriate safeguards.

Confidentiality of Work Email
• Ordinarily, a communication between a client and lawyer for a purpose of
obtaining legal advice if made with an expectation of privacy is protected by
the attorney-client privilege. Problems can arise where a client uses non-
confidential means to communicate with the lawyer. For example, standing
in a crowd, talking to a lawyer, speaking loud enough for the crowd to hear,
may be a waiver of the privilege. In a less obvious manner, using non-
confidential email to communicate with the lawyer may result in a loss of the
privilege. In Convertino v. United States Department of Justice, No. 04-
0236 (D.D.C. Dec. 10, 2009), a former government lawyer argued that his
communications sent from work to his personal counsel fell within the
attorney-client privilege. Because the information was sent from a work
email, there maybe concerns that the employee’s employment agreement
or other applicable rules may treat such information as not confidential,
particularly as against the employer. The District Court, however, in
considering a request by a third party for disclosure of the former
prosecutor’s emails, found that the client reasonably expected the emails
with personal counsel to remain confidential.

Confidentiality of Work Email (cont.)
• A New York bankruptcy court had identified factors to be
applied in determining whether the client intended to
communicate in confidence and whether that intention was
objectively reasonable.
– Does the corporation maintain a policy banning personal
or other objectionable use,
– Does the corporation monitor the use of the employee’s
computer or email,
– Do third parties have a right of access to the computer or
emails, and
– Did the corporation notify the employee, or was the
employee aware, of the use and monitoring policies? In
Re Asia Global Crossing, Ltd., 322 B.R. 247, 258
(S.D.N.Y. 2005).

• In the particular case, the lawyer reasonably
expected his email with his personal counsel to
remain confidential.

• Similarly, the Bankruptcy Court in Global Crossing had to consider whether
corporate officers and a consultant’s communications involving an attorney were
protected by the privilege. The former employees had communicated with their
personal counsel through use of company email. The company’s bankruptcy
filing had not gone well, and a trustee was appointed, who then had control over
the office email systems. The former employees sought to protect their email, as
well as certain confidential documents, which had been left at the company
offices under the control of the trustee.
• The trustee claimed that by using the corporate email system, the employees
waived any privilege. The court applied federal common law to find that the
issue was one of intent, but that the intent had to be reasonable. After
considering the circumstances, the court could not conclude as a matter of law
that use of the company email system waived the privilege. Nor did leaving
documents in the company offices when directed to vacate the offices by the
trustee represent a waiver of the privilege. In contrast, documents that would
have been otherwise privileged but which were shared with a consultant no
longer remained privileged. One of the hallmarks of the attorney-client privilege
is that the information not be shared with persons outside the privilege. The

Abusive Lawyer Conduct
• A North Carolina lawyer was recommended for a 90-day
suspension from the practice of law, with a subsequent two-
year probation period, for sending 53 threatening and
abusive voicemail messages to the successor administrator
of his father’s estate, the attorney for the administrator, and
the ex officio judge of the Superior Court who is responsible
for overseeing the estate. The Review Department of the
California State Bar Court found that the lawyer’s behavior
was so abusive as to constitute acts of moral turpitude as
well as threats to gain advantage in a civil dispute,
disrespect the courts and judicial officer. The probation
recommendation included extensive training and counseling
to help the lawyer avoid future misconduct.

Supervised Lawyer Responsible
for Firm Over Charges
• In Disciplinary Council v. Smith, 124 Ohio St. 3D
49, 2009-Ohio-5960 (2009), the Ohio court
disciplined a lawyer who represented clients in a
personal injury matter for excessive charges by the
law firm. The law firm attempted to charge a
contingent fee from a client on insurance coverage
that New York law prohibits contingent fees on.
Other aspects of the firm’s billing were excessive.

Disciplinary Council v. Smith (cont.)
• The lawyer argued that the owner of the firm, not the lawyer, was
responsible for the excessive billings. The court responded in part,
“Respondent’s counsel stated at oral argument that respondent
prepared the disbursement sheets as a scribe would, following the
dictates of his superior. Actually, respondent is not a scribe, but an
attorney, responsible for zealously representing his client’s interests.” Id.
¶ 17. The supervised lawyer could not simply rely on assurance from
the firm’s owner that the owner would look into the responsibleness or
legality of the firm’s charges. To the extent that the lawyer’s explanation
was that he was unaware of the limitation of contingent fees on this
particular source of personal injury recoveries, the court agreed that the
lawyer’s position demonstrated he was not competent to provide the
client the advice he was providing, due to lack of education or training.
• The court determined to issue a public reprimand about the lawyer’s
conduct.

Conflict Between Lawyer and Client
Concerning the Lawyer’s Own Malpractice
• ER 1.7 and other rules require that lawyers avoid
conflicts of interest, including with the lawyer’s own
interest. Where a lawyer may have committed
mistake, a conflict can develop between the
lawyer’s interests with respect to the mistake, or
alleged malpractice, and the client’s interest.

Minn. Op. No. 21 (cont.)
• The Minnesota Ethics Committee Op. No. 21 addresses this
issue. It describes an obligation of the lawyer to
communicate with the client under Rule 1.4. The opinion
directs the lawyer who is aware of a non-frivolous
malpractice claim by a current client that materially affects
the current client’s interests, to inform that client about that
conduct to the extent necessary in order to keep the client
reasonably informed about the status of the representation,
to make informed decisions regarding the representation,
and to be sure that the client is properly informed about the
means by which the client’s objectives are to be
accomplished. There is no privilege or protection against
self incrimination that would allow the lawyer not to report a
possible malpractice claim to the client.

Disclosure of Conflicts Information When
Lawyers Move Between Law Firms
• The ABA Standing Committee on Ethics and
Professional Responsibility issued its formal
opinion 09-455 (2009). This opinion addresses the
issue of client confidentiality in the context of a
lawyer changing firms.

ABA Op. 09-455 (cont.)
• On the one hand, a lawyer has an obligation to
maintain client information confidential under ER
1.6.
• On the other, the lawyer and a new law firm have
the obligation to avoid conflicts of interest under ER
1.7.
• The question is the extent to which the lawyer may
disclose information about pending representation
in order to check there are conflicts caused by
changing firms.

ABA Op. 09-455 (cont.)
• The ABA opinion argues that since a conflicts analysis is necessary
in order to evaluate the impact of the lawyer changing firms, at least
some limited use of confidential information must be allowed in order
to check for conflicts.
• However, only minimal information should be provided to the new
firm for the conflict check.
• Nor should disclosing such information compromise the attorney-
client privilege or otherwise prejudice the client.
• If it appears that there may be a conflict and a question whether
there is a “substantial relationship” between two matters, the lawyer
may not disclose client confidential information to the other firm in
order to evaluate the facts of the conflict.
• Using a third party as conflicts counsel would not solve the problem,
as the information would be disclosed to the third party.
• Finally, the lawyers should be sensitive to the timing issues involved
in obtaining client consent to the disclosure of confidential
information for conflict checking purposes.

Courtroom Attire
• A New York Lawyer argued that his right to free speech and
his liberty interest in his own personal appearance permitted
him to wear jeans and a hat in court.
• The New York State judicial system does not permit this
type of attire, even for pro se litigants.
• The United States District Court held that there was no
constitutional right to violate the state court rules, and that
the obligation to maintain courtroom civility prevailed over
the pro se lawyer’s wardrobe desires.
Bank v. Katz, No. 1:08-cv-01033 (E.D.N.Y., September 24,
2009).

Rob Charles
Rob Charles is a partner with Lewis and Roca LLP,
where he represents clients in business bankruptcy
cases, commercial lawsuits and business
transactions. He primarily represents both secured
and unsecured creditors, as well as debtors, in all
aspects of Chapter 11 business bankruptcy cases
before the bankruptcy courts of Arizona and
Nevada and on appeal.
Mr. Charles is a member and past chair of the State
Bar of Arizona Committee on Rules of Professional
Conduct; and a fellow in the American College of
Bankruptcy and is an adjunct professor of law at
the University of Arizona College of Law.

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