1 Practicing Law in the 21 st Century An ALPS Ethics and Professionalism Program Answers from the Virginia State Bar s Perspective
2 The intent of this presentation is to focus on process, not solutions. The purpose is to encourage practitioners to be aware that ethical dilemmas can and do arise. For some practices, they arise almost daily. The malpractice exposure from such dilemmas occurs because they were not appropriately resolved or were never even recognized. Particularly with conflict of interest situations, the failure to recognize an ethical dilemma or to resolve it appropriately can be extraordinarily costly down the road. The process we are seeking to teach begins with encouraging attorneys to pause, even if just for a few moments, to consider whether any ethical concerns are present in the current matter. Resolution of a conflict of interest dilemma can only occur if the conflict is recognized up front. Once recognized, the next step is to define and work through the issues raised. Understand that there may be no one correct course of action or even a clear course of action. However, a review of the applicable rules of professional conduct; a search through state ethics opinions; a call to a trusted colleague, ethics counsel, insurance company risk manager or a law school ethics professor; and/or a discussion among firm attorneys could begin to put some parameters around what appropriate actions might be reasonable under the specific circumstances. The final step is to consider the options available for resolution of the ethical dilemma. Common steps that may aid in the resolution of a number of ethical dilemmas include, but are not limited to, withdrawing from representation, declining representation, obtaining a conflict waiver, disclosure, obtaining written consent to represent the client, encouraging or requiring a review of a proposed course of action by an independent attorney, making a referral, associating in co-counsel and reporting misconduct. In the end, every ethical dilemma presents its own unique issues. By focusing on the process of identifying and resolving ethical dilemmas, we hope to find that a greater number of them will be recognized early on and appropriately resolved long before they turn into a malpractice claim or disciplinary complaint. With this said, many attorneys do appreciate having some answers provided to the issues raised in this presentation. Understand that the following answers do not necessarily reflect the one and only correct course of action. They simply reflect the Virginia State Bar and the author s perspective.
3 Vignette One Virtual Reality A. Virginia s Rules of Professional Conduct 5.1 and 5.3 apply to supervision of legal and non-legal staff respectively. These rules apply whether the legal or non-legal staff is onsite or offsite. Indeed, Rule 5.3, Responsibilities Regarding Nonlawyer Assistants, applies to any non-lawyer employed or retained or associated with a lawyer. So this covers any non-lawyer working with a lawyer in any capacity whether an employee of a lawyer s firm/practice or whether with some outside service provider. Rule 5.3 (a) provides that a lawyer having managerial authority in a law firm is responsible for making reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that the conduct of any non-lawyer employed or retained by or associated with the lawyer/firm is compatible with the professional obligations of the lawyer. Rule 5.3(b) imposes this same obligation on an individual lawyer with direct supervisory authority over a non-lawyer. This rule imposes responsibility on the lawyer for the conduct of a non-lawyer staff person which would be a violation of the Rules of Professional Conduct if engaged in by the lawyer and if the lawyer ordered or condoned the conduct or if the lawyer knew or should have known of the conduct at a time when the lawyer could have taken steps to avoid or mitigate the consequences and did not. Rule 5.3(c). In this vignette, a paralegal with the firm moved to Florida but continued to work for the firm remotely by telecommuting and the arrangement has worked well for all involved. Under Rule 5.3, the attorneys in the firm are still responsible for ensuring that this paralegal conducts herself in a manner compatible with the professional obligations of the lawyers. The challenge, obviously, is that this person is hundreds of miles away physically. In a situation like this, the lawyers should assure themselves before entering into such an arrangement that the person involved is responsible and competent to work without much direct supervision and oversight and to assure themselves that the person has a good understanding of the ethical responsibilities of the lawyers. If a non-lawyer staff member is telecommuting the issue of client confidentiality and the lawyer s duties under Rule 1.6 become heightened. The lawyer should establish some policy for controlling the transmittal of confidential information and the security of that transmittal. Especially in a case such as in this vignette, where the telecommuting staff person is hundreds of miles away, the attorney must take steps to assure some limits of access to client confidential information by other than the staff person and prevention of improper dissemination of the information. Another concern is unauthorized practice of law. The attorney must assure him/herself that the telecommuting non-lawyer staff person is not engaging/will not engage in unauthorized practice of law, especially in any manner using firm resources, name, etc. The staff person cannot provide legal services independently of the attorney and all work product must go through the attorney. Again, this goes to an attorney evaluating the individual and whether the person is reliable and competent to work within the limits allowed by law and by the rules of professional conduct.
4 B. Virtual law firms are a group of lawyers who are not geographically or physically in the same law office, yet they have agreed to work together as a firm and hold themselves out to the public as a law firm, particularly on the Internet. Lawyers participating in a virtual law firm may also continue to practice in their individual traditional law practices. Many ethical implications can arise with virtual law firms, including: advertising issues (Virginia Rules of Professional Conduct ); multijurisdictional practice issues and unauthorized practice of law (VA RPC 5.5); choice of law which state s rules apply (VA RPC 8.5); confidentiality (VA RPC 1.6); conflicts and imputed disqualification (VA RPC 1.7, 1.9, 1.10); management logistics and consistent office practices; communication; malpractice issues. Complicating the issue more, some states require lawyers to maintain a physical office if the lawyer is practicing law in that state. Virginia, for example, requires foreign lawyers seeking admission by reciprocity to practice full time in Virginia and the Virginia Board of Bar Examiners insists on proof that the lawyer has rented or acquired a physical office space in Virginia to practice. Virtual office practice is not acceptable. See Regulation 7, Rule 1A:1, Lawyers who practice concurrently in more than one state could not satisfy this requirement. Id. Further, there may be unauthorized practice issues. Lawyers who practice virtually in a jurisdiction on a continuous and systematic basis usually must be admitted in that jurisdiction. Virginia s Rule of Professional Conduct 5.5 prohibits lawyers not licensed in Virginia from establishing an office or other systematic and continuous presence in Virginia for the practice of law. This would not be limited to the practice of Virginia law and a systematic and continuous presence could be established virtually by a non-virginia lawyer having regular interaction with residents of Virginia for delivery of legal services in Virginia through exchange of information over the Internet or other means. Rule 5.5, Comment 4. In a virtual firm composed of lawyers from various jurisdictions, ensuring compliance with all of the Rules of Professional Conduct involved comes down to the lawyers communicating with one another regarding the rules of all of the jurisdictions involved and conducting their practices accordingly. C. If a virtual firm is made up of lawyers located in several different jurisdictions, the application of VA RPC 5.5 will require particular attention. Under Rule 5.5 law firms may not allow partners and associates not admitted in VA to practice systematically and continuously in VA. The only exception is if the lawyer s practice is limited to areas which by state or federal law do not require admission to the Virginia State Bar such as practice before a federal agency or tribunal or, in Virginia, practice as a foreign legal consultant under Rule 1A:7 of the Rules of the Virginia Supreme Court. 1 Note that a foreign lawyer s presence in VA may be systematic and 1 Cmt  to Rule 5.5 states: [a] Foreign Lawyer violates paragraph (d)(2)(i) if the Foreign Lawyer establishes an office or other systematic and continuous presence in Virginia for the practice of law. Presence may be systematic and continuous even if the Foreign Lawyer is not physically present here. Such "non-physical" presence includes, but is not limited to, the regular interaction with residents of Virginia for delivery of legal services in Virginia through exchange of information over the Internet or other means. Such Foreign Lawyer must not hold out to the public or otherwise represent that the Foreign Lawyer is admitted to practice law in Virginia. See also, Rules 7.1(a) and 7.5(b). Despite the foregoing general prohibition, a Foreign Lawyer may establish an office or other systematic and continuous presence in Virginia if the Foreign Lawyer s practice is limited to areas which by state or federal law
5 continuous even if the foreign lawyer is not physically present in VA. For example, foreign lawyer(s) practicing with a virtual law firm who regularly provide services to clients in Virginia may be engaged in unauthorized practice of law and in violation of Rule 5.5(c) and subject to discipline per Rule In this vignette, James (based in Virginia) sends a longtime local client of his to Bob, who is based in Maryland. Whether there are any unauthorized practice of law issues depends upon where Bob is licensed and the nature of the representation. The facts in the vignette do not address Bob s licensure or the nature of the representation. If this local client has legal matters to be addressed in Virginia under Virginia law and Bob is not licensed in Virginia he can only participate in this representation if it is temporary or occasional and is within the scope of Rule 5.5 (d)(4): 1) it is undertaken in association with a Virginia-licensed lawyer who actively participates in the representation; 2) it is related to a matter pending before a Virginia tribunal and the non-virginia lawyer is authorized to appear in the matter or expects to be so authorized; 3) it relates to an arbitration, mediation or other alternative dispute resolution proceeding in Virginia or another jurisdiction if the services are related to the non-virginia lawyer s practice in the jurisdiction where he/she is licensed; 4) it is related to representation of a client in jurisdiction where non-virginia lawyer is licensed or is governed by international law. If this local client has matters involving Maryland law and/or in the Maryland courts and Bob is licensed in Maryland, then he can take this representation without any limitation. He can also do not require admission to the Virginia State Bar. Examples of lawyers admitted in another United States jurisdiction include those lawyers whose practices are limited to federal tax practice before the IRS and Tax Court, patent law before the Patent and Trademark Office, or immigration law. A Foreign Lawyer admitted to practice in a jurisdiction outside the United States may be authorized to practice under Rule 1A:7 as a foreign legal consultant and may likewise establish an office or other systematic and continued presence in Virginia. 2 Id. Rule 8.5: Disciplinary Authority; Choice Of Law (a) Disciplinary Authority. A lawyer admitted to practice in this jurisdiction is subject to the disciplinary authority of Virginia, regardless of where the lawyer's conduct occurs. A lawyer not admitted in Virginia is also subject to the disciplinary authority of Virginia if the lawyer provides, holds himself out as providing, or offers to provide legal services in Virginia. By doing so, such lawyer consents to the appointment of the Clerk of the Supreme Court of Virginia as his or her agent for purposes of notices of any disciplinary action by the Virginia State Bar. A lawyer may be subject for the same conduct to the disciplinary authority of Virginia and any other jurisdiction where the lawyer is admitted. (b) Choice of Law. In any exercise of the disciplinary authority of Virginia, the rules of professional conduct to be applied shall be as follows: (1) for conduct in connection with a proceeding in a court, agency, or other tribunal before which a lawyer appears, the rules to be applied shall be the rules of the jurisdiction in which the court, agency, or other tribunal sits, unless the rules of the court, agency, or other tribunal provide otherwise; (2) for any other conduct, the rules of the jurisdiction in which the lawyer s conduct occurred; and (3) notwithstanding subparagraphs (b)(1) and (b)(2), for conduct in the course of providing, holding out as providing, or offering to provide legal services in Virginia, the Virginia Rules of Professional Conduct shall apply.
6 handle the matter if it is a federal law matter and so long as Maryland does not have any additional restrictions. The limits set in Rule 5.5 must be considered and addressed whenever a non-virginia attorney is going to be handling a Virginia matter or coming into Virginia to practice law (Virginia law or otherwise) on a continuous/regular basis. These limits apply between and among lawyers in the same firm and whether there are 6 or 650 attorneys in the firm. For instance, it would not make sense for a Virginia lawyer handling a Virginia divorce for a Virginia client to hand off the matter to another lawyer in the firm based in Pennsylvania unless that lawyer in Pennsylvania was licensed in Virginia. A non-virginia lawyer can do little to nothing to pursue a divorce before a Virginia court. To do anything, the non-virginia lawyer would have to associate with a Virginia-licensed lawyer, get admitted pro hac vice (for a fee of $250) and then the Virginia lawyer would have to remain involved in the case throughout and would have to sign all pleadings and legal instruments filed in the case. See Rule 1A:4 of the Rules of the Virginia Supreme Court. This situation would be enormously impractical. D. So-called cloud-computing is a web-based type of software application that, instead of being installed directly on a user s computer, is delivered through the Internet by a third-party service provider or data center provider, to a user s browser. Any data/information generated by the user is held by the provider through the Internet application rather than on the user s server. Some lawyers express reservation concerning the ethical propriety of using cloud computing. However, there does not appear to be any basis in the Rules of Professional Conduct to prohibit lawyers from managing their office software applications and client data in this manner. Lawyers have an ethical duty to safeguard confidential client information. Rule 1.6. However lawyers may share information protected under Rule 1.6 with third parties as needed for necessary office management provided the lawyer exercises reasonable care in the selection of the third party vendor and secures an agreement that the third party vendor will safeguard the confidentiality of the information shared. 3 Rule 1.6(b). Lawyers have an obligation to act competently to protect the confidentiality of information relating to the representation of their clients, including protecting both open and closed client files. Virginia LEO 1305 (lawyers must destroy and cannot simply dump closed client files). Also, this obligation of confidentiality survives the death of the client. See Virginia LEO 1207 (1989). In addition, lawyers may convert paper files into electronically stored data. LEO 1818 (2005). In addressing attorney use of the Internet for client file storage the State Bar of Arizona s Ethics Committee has stated: 3 See also ABA Formal Opinion , where the Committee recognized that "in this era of rapidly developing technology, lawyers frequently use outside agencies for numerous functions such as accounting, data processing, photocopying, computer servicing, storage and paper disposal and that lawyers retaining such outside service providers are required to make reasonable efforts to prevent unauthorized disclosures of client information. The outside service providers would be considered to be non-lawyer assistants under Model Rule 5.3 which states that lawyers have an obligation to ensure that the conduct of the non-lawyer employees they employ, retain or become associated with is compatible with the professional obligations of the lawyer.
7 [A]n attorney or law firm is obligated to take reasonable and competent steps to assure that the client's electronic information is not lost or destroyed. In order to do that, an attorney must be competent to evaluate the nature of the potential threat to client electronic files and to evaluate and deploy appropriate computer hardware and software to accomplish that end. An attorney who lacks or cannot reasonably obtain that competence is ethically required to retain an expert consultant who does have such competence. Arizona State Bar Op The Massachusetts Bar Association Committee on Professional Ethics issued an ethics opinion that A law firm may provide a third-party software vendor with access to confidential client information stored on the firm s computer system for the purpose of allowing the vendor to support and maintain a computer software application utilized by the law firm However, the law firm must make reasonable efforts to ensure that the conduct of the software vendor (or any other independent service provider that the firm utilizes) is compatible with the professional obligations of the lawyer[s], including the obligation to protect confidential client information reflected in Rule 1.6(a). The fact that the vendor will provide technical support and updates for its product remotely via the Internet does not alter the Committee s opinion. Massachusetts Bar Op (March 3, 2005). The bottom line is that the lawyer s duty is to protect the confidentiality of his/her client s information. There is not any absolutely right or wrong answer regarding use of cloud computing. What a lawyer should do is educate him/herself if he/she/the firm believes that use of this resource may be advantageous, consider all the pros and cons, and then make the best choice for the practice and for the interests of the clients. E. Many lawyers already engage in some form of outsourcing in order to provide more efficient and effective service to their clients. Outsourcing takes many forms: from reproduction of materials to document retention database creation and from patent applications to document review and strategy development. Law firms have always and will always engage other lawyers and nonlawyers in the provision of various legal and nonlegal support services. Legal outsourcing can be highly beneficial to the lawyer and the client, as it gives the lawyer the opportunity to seek the services of outside lawyers and staff in complex matters. Although the discussion about outsourcing legal services is fairly new, lawyers have been outsourcing on a regular basis for many years, using legal research services, independent paralegals, legal temps and contract lawyers. The ABA s Ethics Committee issued an advisory opinion, ABA Formal Op (August 5, 2008), stating that a lawyer may outsource legal or nonlegal support services provided the lawyer remains ultimately responsible for rendering competent legal services to the client under Rule 1.1. In complying with her Rule 1.1 obligations, a lawyer who engages lawyers or nonlawyers to provide outsourced legal or nonlegal services is required to comply with Rules 5.1 and 5.3. She should make reasonable efforts to ensure that the conduct of the lawyers or nonlawyers to whom tasks are outsourced is compatible with her own professional obligations as a lawyer with direct supervisory authority over them. In addition, appropriate disclosures should be made to the client regarding the use of lawyers or nonlawyers outside of the lawyer s firm, and client consent should be obtained if those lawyers or
8 nonlawyers will be receiving information protected by Rule 1.6. The fees charged must be reasonable and otherwise in compliance with Rule 1.5, and the outsourcing lawyer must avoid assisting the unauthorized practice of law under Rule 5.5. The ABA Ethics Committee recommends: [a]t a minimum, a lawyer outsourcing services for ultimate provision to a client should consider conducting reference checks and investigating the background of the lawyer or nonlawyer providing the services as well as any nonlawyer intermediary involved, such as a placement agency or service provider. Duty to Protect Client s Confidences and Secrets Another significant ethical concern is client confidentiality. If confidential client information will be shared with a nonlawyer outside of the law firm then the lawyer must secure the client s consent, in advance. The implied authorization of Rule 1.6(a) and its Comment [5a] 4 to share confidential information within a firm does not extend to entities or individuals working outside the law firm. Thus, in a typical outsourcing relationship, no information protected by Rule 1.6 may be revealed without the client s informed consent. Additionally, the lawyer needs to ensure that all appropriate measures have been employed to educate the nonlawyer on the lawyer s duties as they apply to client confidences and that the nonlawyer will contract to abide by the same restrictions. If the information outsourced will be transmitted electronically, the lawyer should be mindful of and receive assurance about the security risks inherent in electronic transmittal of confidential information. For example, the lawyer should get assurances from the nonlawyer that policies and procedures are in place to protect and secure the data while in transit and that all nonlawyers understand and will abide by said policies. Written confidentiality agreements are strongly advisable in outsourcing relationships. See Rule 1.6, Comment [5c]. 5 When outsourcing legal work the lawyer must also ensure that proper procedures are in place to minimize the risk that confidential information might be disclosed. Included in such procedures should be an effective conflict-checking procedure. The outsourcing lawyer should ask the nonlawyer about his or her conflict-checking procedures and how he or she tracks work performed for other clients. The outsourcing lawyer should also ask the nonlawyer whether he or she is performing legal services for any parties adverse to the lawyer s client. Again, the 4 Rule 1.6, Comment [5a] Lawyers frequently need to consult with colleagues or other attorneys in order to competently represent their clients interests. An overly strict reading of the duty to protect client information would render it difficult for lawyers to consult with each other, which is an important means of continuing professional education and development. A lawyer should exercise great care in discussing a client s case with another attorney from whom advice is sought. Among other things, the lawyer should consider whether the communication risks a waiver of the attorney-client privilege or other applicable protections. 5 Rule 1.6 Comment [5c] Compliance with Rule 1.6(b)(5) might require a written confidentiality agreement with the outside agency to which the lawyer discloses information.
9 lawyer remains ultimately responsible for protection of client confidences and needs to ensure that adequate conflict-checking procedures are in place with the nonlawyer firm. More and more law firms and corporate law departments are relying on foreign outsourcing. Lawyers analyzing these issues must protect their clients from real risks, while avoiding the sort of "guild mentality" that will prevent the lawyer from exploring all of the options that might save the client money. No ethics rules prohibit such outsourcing. Just as lawyers may arrange for cocounsel from another U.S. jurisdiction, so they can arrange for co-counsel or other assistance from overseas. The ABA and state bars are still wrestling with the ethics implications of foreign outsourcing. The ABA has explicitly explained that lawyers may hire "contract" lawyers to assist in projects -- although the ABA focused on billing questions. 6 State bars have also dealt with ethics issues implicated by lawyers employing "temps" 7 and "independent contractor" lawyers. 8 6 ABA LEO 420 (11/29/00) (a law firm hiring a contract lawyer may either bill his or her time as: (1) fees, in which case the client would have a reasonable expectation that the contract lawyer has been supervised, and the law firm can add a surcharge without disclosure to the client (although some state bars and courts require disclosure of both the hiring and the surcharge); or (2) costs, in which case the law firm can only bill the actual cost incurred plus those costs that are associated directly with the provision of services (as explained in ABA LEO 379)); ABA LEO 356 (12/16/88) (temporary lawyers must comply with all ethics rules arising from a lawyer's representation of a client, but depending on the facts (such as whether the temporary lawyer "has access to information relating to the representation of firm clients other than the clients on whose matters the lawyer is working") may not be considered "associated" with law firms for purposes of the imputed disqualification rules (the firm should screen such temporary lawyers from other representations); lawyers hiring temporary lawyers to perform "independent work for a client without the close supervision of a lawyer associated with the law firm" must obtain the client's consent after full disclosure; lawyers need not obtain the client's consent to having temporary lawyers working on the client matters if the temporary lawyers are "working under the direct supervision of a lawyer associated with the firm"); lawyers need not advise clients of the compensation arrangement for temporary lawyers "assuming that a law firm simply pays the temporary lawyer reasonable compensation for the services performed for the firm and does not charge the payments thereafter to the client as a disbursement."). 7 Virginia LEO 1712 (7/22/98) (this is a comprehensive opinion dealing with temporary lawyers ("lawyer temps"); a lawyer temp is treated like a lateral hire for conflicts purposes (although lawyer temps who are not given "broad access to client files and client communications" could more easily argue that they had not obtained confidences from firm clients for which they had not directly worked); as with lateral hires, screening lawyer temps does not cure conflicts; lawyer temps may reveal the identity of other clients for which they have worked unless the clients request otherwise or the disclosure would be embarrassing or detrimental to the former clients; paying a staffing agency (which in turn pays the lawyer temp) does not amount to fee-splitting because the agency has no attorney-client relationship with the client and is not practicing law (the New York Bar took a different approach, suggesting that the client separately pay the lawyer temp and agency); if a firm lawyer closely supervises the lawyer temp, the hiring of lawyer temps need not be disclosed to the client; a lawyer must inform the client before assigning work to a lawyer other than one designated by the client; because "a law firm's mark-up of or surcharge on actual costs paid the staffing agency is a fee," the firm must disclose it to the client if "payment made to the staffing agency is billed to the client as a disbursement, or cost advanced on the client's behalf"; on the other hand, the firm "may simply bill the client for services rendered in an amount reflecting its charge for the Lawyer Temp's time and services" without disclosing the firm's cost, just as firms bill a client at a certain rate for associates without disclosing their salaries; in that case, the "spread" between the salary and the fees generated "is a function of the cost of doing business including fixed and variable overhead expenses, as well as a component for profit"; because the relationship between a lawyer temp and a client is a traditional attorney-client relationship, the agency "must not attempt to limit or in any way control the amount of time a lawyer may spend on a particular matter, nor attempt to
10 Law firms hiring such lawyers and those lawyers themselves must also follow the unauthorized practice of law rules of the jurisdiction in which they will be practicing. See, e.g., D.C. UPL Opinion (6/17/05) (holding that contract lawyers who are performing the work of lawyers rather than paralegals or law clerks must join the D.C. Bar if they work in D.C. or "regularly" take "short-term assignments" in D.C.). As bars analyze outsourcing issues, 9 some obvious issues come to mind: control the types of legal matters which the Lawyer Temp may handle"; agencies may not assign lawyer temps to jobs for which they are not competent.) 8 Virginia LEO 1735 (10/20/99) (a law firm may employ independent contractor lawyers under the following conditions: whether acting as independent contractors, contract attorneys or "of counsel," the lawyers must be treated as part of the law firm for confidentiality and conflicts of interest purposes; the firm must advise clients of any "mark-up" between the amount billed for the independent contractor lawyers' services and the amount paid to them if "the firm bills the amount paid to the Attorney as an out-of-pocket expense or disbursement," but need not make such disclosure to the clients if the firm bills for the lawyers' work "in the same manner as it would for any other associate in the Firm" and the independent contractor lawyer works under another lawyer's "direct supervision" or the firm "adopts the work product as its own;" the independent contractor lawyers may be designated as "of counsel" to the firm if they have a "close, continuing relationship with the Firm and direct contact with the firm and its clients" and avoid holding themselves out as being partners or associates of the firm; the firm must disclose to clients that an independent contractor lawyer is working on the client's matter if the lawyers "will work independently, without close supervision by an attorney associated with the Firm," but need not make such disclosure if the "temporary or contract attorney works directly under the supervision of an attorney in the Firm;" the firm may pay a "forwarding" or "referral" fee to the independent contractor lawyers for bringing in a client under the new Rules.) 9 New York City Bar Ass n LEO (8/06) (assessing the ethics ramifications of New York lawyers outsourcing legal support services overseas; distinguishing between the outsourcing of "substantive legal support services" (and "administrative legal support services" such as transcriptions, accounting services, clerical support, data entry, etc.; holding that New York lawyers may ethically outsource such substantive services if they: (1) avoid aiding non-lawyers in the unauthorized practice of law, which requires that the lawyer "must at every step shoulder complete responsibility for the non-lawyer's work. In short, the lawyer must, by applying professional skill and judgment, first set the appropriate scope for the non-lawyer's work and then vet the non-lawyer's work and ensure its quality."; (2) adequately supervise the overseas workers, which requires that the "New York lawyer must be both vigilant and creative in discharging the duty to supervise. Although each situation is different, among the salutary steps in discharging the duty to supervise that the New York lawyer should consider are to (a) obtain background information about any intermediary employing or engaging the non-lawyer, and obtain the professional résumé of the non-lawyer; (b) conduct reference checks; (c) interview the non-lawyer in advance, for example, by telephone or by voice-over-internet protocol or by web cast, to ascertain the particular non-lawyer's suitability for the particular assignment; and (d) communicate with the non-lawyer during the assignment to ensure that the non-lawyer understands the assignment and that the non-lawyer is discharging the assignment according to the lawyer's expectations."; (3) preserve the client's confidences, suggesting "[m]easures that New York lawyers may take to help preserve client confidences and secrets when outsourcing overseas include restricting access to confidences and secrets, contractual provisions addressing confidentiality and remedies in the event of breach, and periodic reminders regarding confidentiality"; (4) avoid conflicts of interest, advising that "[a]s a threshold matter, the outsourcing New York lawyer should ask the intermediary, which employs or engages the overseas non-lawyer, about its conflict-checking procedures and about how it tracks work performed for other clients. The outsourcing New York lawyer should also ordinarily ask both the intermediary and the non-lawyer performing the legal support service whether either is performing, or has performed, services for any parties adverse to the lawyer's client. The outsourcing New York lawyer should pursue further inquiry as required, while also reminding both the intermediary and the non-lawyer, preferably in writing, of the need for them to safeguard the confidences and secrets of their other current and former clients."; (5) bill appropriately, noting that "[b]y definition, the non-lawyer performing
11 First, lawyers must avoid aiding non-lawyers in the unauthorized practice of law. This requires the lawyers to take responsibility for all of the outsourced work. The lawyers must ultimately adopt the outsourced work as their own. Second, lawyers must provide some degree of supervision -- although the exact nature and degree of the supervision is far from clear. Lawyers should consider such steps as researching the entity that will conduct the outsourced work, conducting reference checks, interviewing the folks who will handle the outsourced work, specifically describing the work the lawyers require, and reviewing the work before adopting it as their own. Third, lawyers must assure that the organization they hire adequately protects the client's confidences. This duty might involve confirming that the foreign lawyers' ethics are compatible with ours, and might also require some analysis of the confidentiality precautions and technologies that the foreign organization uses. Fourth, the lawyers arranging for such outsourcing should avoid conflicts of interest. At the least the lawyers should assure that the organization handling the outsourced work is not working for the adversary. Fifth, lawyers must bill appropriately. As explained above, if the lawyers are not "adding value" to the outsourced workers, they should pass along the outsourcing bill directly to their client as an expense. Sixth, lawyers should advise their clients that they are involving another organization in their work. As the various legal ethics opinions explain, such disclosure may not be required if the contract or temporary lawyers act under the direct supervision of the law firm -- but disclosure is always best, and almost surely would be required in a situation involving a foreign law organization. F. James comment really is mixing apples and oranges, so to speak. The self-regulation of the profession refers to lawyers being responsible for reporting ethical/disciplinary violations of other lawyers and then enforcing the rules of professional conduct against lawyers in disciplinary actions. The external regulation that James and Andrew speak of refers to civil laws that apply generally, not just to lawyers, and which have nothing to do with lawyer legal support services overseas is not performing legal services. It is thus inappropriate for the New York lawyer to include the cost of outsourcing in his or her legal fees.... Absent a specific agreement with the client to the contrary, the lawyer should charge the client no more than the direct cost associated with outsourcing, plus a reasonable allocation of overhead expenses directly associated with providing that service."; (6) obtain the client's consent when necessary, as "there is little purpose in requiring a lawyer to reflexively inform a client every time that the lawyer intends to outsource legal support services overseas to a non-lawyer. But the presence of one or more additional considerations may alter the analysis: for example, if (a) non-lawyers will play a significant role in the matter, e.g., several non-lawyers are being hired to do an important document review; (b) client confidences and secrets must be shared with the non-lawyer, in which case informed advance consent should be secured from the client; (c) the client expects that only personnel employed by the law firm will handle the matter; or (d) non-lawyers are to be billed to the client on a basis other than cost, in which case the client's informed advance consent is needed.")
12 discipline. While an ethical violation and disciplinary punishment might result if a lawyer broke these laws, depending on the circumstances, that is not an absolute result. James and Andrew appear to be discussing these issues in the context of how these civil laws affect their ability to exercise their professional judgment in advising their clients, specifically, that these laws limit their ability to do so in a burdensome fashion. Burdensome or intrusive or not, lawyers still must obey the law and must advise their clients within the bounds of the law. Lawyers also have a duty to communicate with their clients under Rule 1.4 to keep clients informed and provide information for clients to make informed decisions. James comments, If I felt my client was best served by outsourcing, then that s what we did. That is not exactly true under Virginia s Rules of Professional Conduct. If the lawyer is considering outsourcing part of the client s matter, Rule 1.4 requires the lawyer to have communication with the client and obtain the client s informed consent to the engagement of lawyers or nonlawyers who are not directly associated with the lawyer or law firm that the client retained. In LEO 1712 the Committee opined that when a lawyer engages the services of a temporary lawyer, which is a form of outsourcing, the lawyer must advise the client of that fact and seek the client s consent if the temporary lawyer was to perform independent work for the client and was outside the firm. Relying on Rule 1.2(a), requiring a lawyer to consult with a client as to the means by which the client s objectives are to be pursued, Rule 1.4, relating to client communication, and Rule 7.5(d), prohibiting lawyers from implying that they practice in a partnership or other organization when that is not the fact, the Committee concluded that the client is entitled to know who or what entity is representing him or her and could veto the use of an outsourced lawyer or nonlawyer support. James and Andrew also discuss the fact that in the U.K. and Australia non-lawyers are permitted to have ownership in law firms, something of a multi-disciplinary practice. Many jurisdictions, including Virginia, have addressed the issue of multi-disciplinary practice and have rejected it as unworkable in light of the lawyers ethical duties and responsibilities that might be compromised in the endeavor. Rule 5.4 continues to control in Virginia and prohibits a non-lawyer from having any ownership interest in a law firm/practice and prohibits a lawyer from sharing legal fees with a non-lawyer. The marketplace and economy will always have some impact on the legal profession and how lawyers practice. Whether or not the Rules of Professional Conduct burden or restrict the profession s response/s to the marketplace or whether lawyers think the Rules do, will not excuse compliance. In many ways the Rules of Professional Conduct are designed to withstand and rise above changes in the marketplace and economy. However, there are times when exigencies of the marketplace, and/or the profession generally, dictate a review of rules and their application. This has occurred in Virginia most recently with the adoption of significant revisions to Rules 5.5 and 8.5 regulating a foreign/non-virginia-licensed lawyer s practice in Virginia. These changes came about as a result of jurisdictions across the country reviewing cross-border domestic and international practice. Rules can and do change and evolve when necessary and when there will be general and overall benefit to the profession. But government regulation will inevitably lag behind new market trends or evolving technology in a particular sector or industry. The delivery of legal services is no exception.
13 Vignette Two Getting Schooled in Social Media A. There is a significant difference between partners being ethically responsible for the actions of their other partners and being legally responsible. Rule 5.1 that deals with the Responsibilities of Partners and Supervisory Lawyers is a rule of reason. The rule requires that lawyers who have managerial responsibility for other lawyers in a firm must make reasonable efforts to ensure that other lawyers in the firm conform to the RPCs. The rule holds a lawyer responsible for another lawyer s violation of the RPCs only when that lawyers orders or ratifies the conduct or if the lawyer is in a managerial position in the firm and knows of the conduct and fails to either stop it or remediate the effect. In other words, a partner or managing lawyer in a firm is responsible for an ethics violation of another member of the firm if they direct the conduct, ratify the conduct or basically sit back and allow unethical conduct to proceed when they are aware of it in advance or even after the fact if the effects of the unethical conduct can be mitigated. In this scenario, even though the lawyers at Stone & Jeffries may be unhappy with the consequences here and have concerns about Brown Barker s supervision over their partners and other lawyers, nothing in these facts supports the conclusion that anyone other than the criminal partner, Charlie, had any insight into these thefts of monies. That partner may have been the exclusive contact on those client s trusts and therefore would have had exclusive authority and oversight on those matters. It may very well be the case that he reported to no others in the firm on these client matters and had exclusively handed these estates for many years, therefore obviating the need for anyone else to be involved. In such a case, it would be difficult to tag another lawyer in the firm for any ethical misconduct or wrongdoing because of the criminal partner s actions. That being said, depending upon how Charlie was handling these client estates and depending upon the legal organizational structure of the firm and the malpractice policy in place, the firm and the individual partners may have potential civil liability even if no ethical exposure. B. The firm itself is not bound by any rules of confidentiality that would preclude them making a public statement, but certainly rules of reason provide guidance here. It would be prudent that the firm be very cautious about anything they might say that could later be used against them in some form or could inculpate other members of the firm besides the criminal partner. Strategically, Ian is not going to want the firm making any kind of statement that he does not control and approve since he is their counsel in this matter. Further, any communication or public statement made by the firm must comply with Rule 7.1 that governs all communications concerning a lawyer s services. In compliance with Rule 7.1, the firm cannot say anything that is false or misleading, that compares a particular lawyer s services or the firm s services with another firm, or that is likely to create an unjustified expectation about results the lawyer can achieve. To that end, the firm cannot promise excellent response or that they are the best and will overcome this obstacle or any other
14 comparative statement or statement promising a positive result in this matter. Public statements at this point in time could be very dangerous on multiple fronts and should be handled by their counsel, Ian. C. Some issues related to social media in general: Blogging A blog is a Web site where an author publishes articles that are catalogued in chronological order. There are legal blogs on every conceivable subject, from the admiralty to zoning. Lawyers have flocked to blogs (in huge numbers) as a cost-effective way to demonstrate expertise in their practice areas and build their online reputation. As of November 2008, 71 of the 200 largest law firms in the United States are blogging, up from 39 a year ago. Several of these law firms publish multiple blogs (relating to their multiple practice areas) so that in total, there are 159 blogs being published by the AmLaw 200. The number of blogs published by lawyers in firms of all sizes is beyond count. The growing popularity of lawyers blogging as a business development practice is due to three things: first, it s free, so the return on investment for any business developed is gigantic; second, most lawyers are strong writers who are passionate about their practice areas, so publishing a blog often comes naturally; and third, blogging can be fun! That s a combination that is hard to beat. Confidentiality: Lawyers must make sure that postings do not compromise confidentiality without client consent. Lawyers must not post information that would breach client confidentiality unless there is client consent to the disclosure. All lawyers and non-legal staff should be reminded of this duty to prevent any online sharing of information that would result in a breach of client confidentiality. Under the Virginia rules, even the fact that you represent a particular client may be confidential under Rule 1.6 if disclosure would embarrass the client or the client does not want this fact disclosed. If you advertise or disclose that you represent a particular client make sure you have the client s consent or that disclosure of client identity is impliedly authorized in order to carry out the representation. A lawyer s advertising or marketing campaign does not give the lawyer implied authority to disclose who he or she represents. In most other jurisdictions where ABA Model Rule 1.6 is used, any information including client identity is protected as confidential even though client identity is not generally protected under the evidentiary attorney-client privilege. Defamation: Lawyers and law firms need to exercise good sense and judgment about postings and make sure any statements or claims are accurate. In relation to this matter, Stone has opened the door on their web site for others to post information and chatter as they see fit. Even though Stone has only offered the venue for this to occur, Stone must still be mindful of the RPCs as they apply to the firm s web site and what is posted on it. It appears that Stone is closely monitoring postings on the site and removing any
15 that they find offensive or problematic. Again, this would be necessary since the firm s web site is subject to the RPCs governing lawyer communication and advertising in Rule 7.1 and 7.2. For a firm to offer such public discussion boards without the monitoring capacity could be very problematic. It does not matter that the postings only come from people outside the firm; the fact that the postings are on the firm s web site that is controlled by and associated with the Stone firm makes the Stone firm responsible. In fact, pursuant to Rule 7.2(e) there is one member of the Stone firm responsible for the web site and that lawyer is ultimately responsible for the content of the web site. D. Ethically lawyers may speak to the press on civil issues within the parameters of the Rules of Professional Conduct. In other words, unlike the trial publicity prohibitions that are governed by Rule 3.6 regarding criminal proceedings, there are no specific prohibitions about lawyers speaking to the press related to civil disputes. The predominant concern anytime a lawyer speaks with the press or makes any type of public statement or comment is Rule 1.6 that deals with client confidentiality. Everything about a client s matter is confidential so before any statement is made outside a courtroom or outside the law office there should be advice given to the client as to the purpose of the dissemination of specific information and client consent to disseminate the information. In this case, Brown Barker is the client and they themselves are interested in public communications in defense of their firm. The applicable rules would be Rule 7.1 and 7.2 that deal with all lawyer communications and advertising and would govern to what extent a lawyer or law firm could make a statement that was not simply a truthful, factual statement about events or occurrences in their practice. Brown Barker s motive would likely be to improve or sustain the confidence level in their firm and caution would need to be taken that they not make selflaudatory or comparative statements about the firm that would be in violation of Rule 7.1. It seems certain that Ian, as defense counsel to Brown Barker, would want to be involved in any form of public communication regarding the firm and the potential impact it might have on the pending civil suits against the firm. In the alternative, Stone would be making public statements that potentially involve confidences of their clients whom they are representing in civil suits against Brown Barker. Stone cannot reveal any information about those client s claims or matters without client consent. As mentioned earlier, even if that information can be found in a public document or other public filing, that information cannot be revealed by counsel for the client unless the client is consulted and gives consent in advance of the dissemination of the information. Rule 1.6 is fairly broad as to client confidences in that almost everything learned in an attorney/client relationship is protected. The rule states that a lawyer cannot reveal any information that would be embarrassing or detrimental to the client unless the client consents. Stone needs to make sure they have client consent before speaking to the press or making any other public commentary on these matters and further need to make sure that their clients are not in any way detrimentally affected by the dissemination of any information. Information shared with the media can be used by the adversary. This is why most lawyers choose not to play out their cases in the media. Many times it is not a favorable outcome or response gained for the client s matter.
16 Vignette Three The Reality of Lost Virtue A. Andrew s intimate on-line relationship with his client is not per se an ethical violation. Virginia has not adopted a rule specifically prohibiting sex/intimate relationship with a client. This does not mean, however, that the consequences and effects of such a relationship do not result in serious violations of existing ethics rules. The manifold ethical issues that arise from these circumstances do not require a description of the actual acts of the lawyer nor what defines a sexual relationship. The problems arise from the impropriety and unfair exploitation of the lawyer s fiduciary position as well as the lawyer s untold influence and potential personal conflict. As the ABA s Standing Committee on Legal Ethics identified in Formal Opinion No (1992), [t]he roles of lawyer and lover are potentially conflicting ones as the emotional involvement that is fostered by a sexual relationship has the potential to undercut the objective detachment that is often demanded for adequate representation. While distinctions may be drawn between sexual relationships that predate the formation of the attorney/client relationship and those that begin during the attorney-client relationship, the lawyer must always be mindful of the ethical considerations involved. Clearly, the situation where the sexual relationship develops during the attorney-client relationship risks more probable ethical breaches and in most instances forms the basis for lawyer discipline. While there is no provision in the Virginia Rules of Professional Conduct specifically prohibiting sexual relationships between lawyer and client, 10 the Virginia State Bar s Standing Committee on Legal Ethics issued Legal Ethics Opinion 1853 which addresses the ethical issues arising from such a relationship. In LEO 1853, the Committee said that: 10 In response to growing concerns over breaches of fiduciary duty and exploitation of trust issues, prior to the development of ABA Model Rule 1.8(j), many states had developed their own specific rules regarding lawyer-client sexual relationships. By 2003, thirteen states had amended their model rules of professional ethics or disciplinary codes to include provisions regarding the propriety of consensual lawyer-client sexual relationships, ranging from absolute prohibition to limited restrictions to commentary advising about the possible negative consequences of such relationships. On April 2, 1992, California became the first state to enact a formal rule regarding attorney-client relationships when the state adopted Rule of Professional Conduct Phillip R. Bower & Tanya E. Stern, Conflict of Interest?: The Absolute Ban on Lawyer-Client Sexual Relationships Is Not Absolutely Necessary, 16 GEO. J. LEGAL ETHICS 535, 540 (2003) (explaining how a blanket rule prohibiting consensual lawyer-client sexual relations is both over inclusive and under inclusive). Currently, according to the American Bar Association, 27 states have addressed lawyer-client sexual relations in some form in their rules of professional conduct. Daniel Gilbert, Virginia State Bar rules against adopting sexual misconduct regulation, Bristol Herald Courier, August 9, 2009 ( Gilbert article ). Critics of an unqualified ban acknowledge that a lawyer often holds a position of substantial power vis-à-vis a client, but both attorney and client have rights of privacy and freedom of association which should not lightly be restricted by the state. As one commentator notes, any regulation by the bar of attorney-client sexual relations must account for the complex variety of relationships that can and do exist between attorneys and their clients. William K. Shirley, Dealing with the Profession s Dirty Little Secret: A Proposal for Regulating Attorney-Client Sexual Relationships, 13 GEO.J. LEGAL ETHICS 131, 133 (1999).
17 the lawyer must consider that such conduct could: (1) jeopardize the lawyer s ability to competently represent the client (Rule 1.1), (2) wrongfully exploit the lawyer s fiduciary relationship with the client, (3) interfere with the lawyer s independent professional judgment (Rule 2.1), (4) create a conflict of interest between the lawyer and the client (Rule 1.7, Rule 1.7 Comment , Rule 1.8(b) and Rule 1.10(a)), (5) jeopardize the duty of confidentiality owed to the client (Rule 1.6(a)), or (6) potentially prejudice the client s matter (Rule 1.3(c)). Additionally, a lawyer who intentionally uses the fiduciary relationship of lawyer and client to coerce sexual favors from a client may be found to have violated Rule 8.4(b) s prohibition against a deliberately wrongful act that reflects adversely on the lawyer s... fitness to practice law. 11 Also, when a lawyer solicits sexual favors in lieu of charging the client legal fees, the lawyer will have violated Rule 8.4(b). 12 In its analysis in LEO 1853 the Committee clearly does not encourage sex/intimate relationship with a client, however, it is also clear that the key to regulating/controlling the issues stemming from such a relationship is not necessarily to have a per se rule prohibiting the relationship; the key is to effectively apply the existing rules. This analysis acknowledges and allows that: a consensual sexual relationship that predates the attorney-client relationship is not per se improper, such as the representation of a spouse or significant other with whom the lawyer has had an ongoing romantic/sexual relationship. While such representation may warrant consideration of some of the ethical problems identified, clearly there are circumstances where a conflict may not exist or may be waived pursuant to Rule 1.7(b); by way of example and not limitation, representation of a spouse in a real estate closing, traffic matter or contract review See Virginia State Bar v. Wade Trent Compton, CL (Dickenson County Cir. Ct., December 2, 2009)(three-judge court entered agreed disposition suspending Respondent s license for five years for having vulnerable female clients perform sexual favors for Respondent while he was representing them as a staff lawyer for a legal aid office.) 12 The facts of reported disciplinary cases also provide support for the position that the client s purported consent may be illusory in this context. In the Matter of Sterling Weaver, Sr., VA Disp. Op , 1997 WL (Va.St.Bar.Disp.Bd., Nov. 17, 1997) (lawyer testified that sexual intercourse with client was consensual; public reprimand); Disciplinary Counsel v. Sturgeon, Ohio, No (Nov. 15, 2006) (permanent disbarment of lawyer for repeatedly pressuring financially vulnerable female clients to trade sexual favors for reduced legal fees, exposing himself, using crude language, and falsely denying fault); Iowa Supreme Court Attorney Disciplinary Bd. v. McGrath, Iowa, No. 113/ (April 21, 2006) (three-year suspension of lawyer who pressed three vulnerable female clients to have sex with him in lieu of paying his fees); In re Gamino, Wis., No. 2003AP2422-D (Dec. 20, 2005) (two-year suspension for sex with two vulnerable female clients and repeated misrepresentations about the relationships). 13 ABA Comm. on Ethics and Professional Responsibility, Formal Op n.1 (July 6, 1992).
18 The Committee concludes that: It is apparent that entering into a sexual relationship with a client during the course of representation can seriously harm the client s interests. The numerous ethical obligations of a lawyer to a client are so fundamental to the attorney-client relationship that obtaining the client s purported consent to entering into a sexual relationship with the lawyer will rarely be sufficient to eliminate any potential ethical violation. Therefore, it is the opinion of this Committee that a lawyer should refrain from entering into a sexual relationship with a client. In most situations, the client s ability to give the informed consent required by Rule 1.7(b) is overwhelmed by the lawyer s position of power and influence in the relationship and the client s emotional vulnerability. With regard to Rule 5.1, Responsibilities of Partners and Supervisory Lawyers, there is nothing in the facts of the vignette to suggest that the partners or firm as a whole bear any ethical responsibility for Andrew s actions. The nature of Andrew s conduct is an apparent blatant disregard for the rules, not a failure of his superiors to take reasonable steps to ensure that Andrew s conduct conforms to the RPC. Nor is there any indication that a supervising lawyer or partner ordered, knew of or ratified Andrew s conduct or knew at a time when the consequences could have been avoided. As discussed in answer to question A in Vignette Two above, Rule 5.1 is a rule of reason, not a rule imposing strict imputed or vicarious disciplinary exposure to other lawyers in the firm. B. As social networking websites like Twitter, Facebook, MySpace and LinkedIn become increasingly more popular among lawyers, judges, support staff and clients, lawyers have to be mindful about some ethical concerns that may not be obvious. Some lawyers may say that social networking does not present any novel issues for lawyers to worry about. Lawyers cannot afford to be so cavalier. Experienced lawyers and seasoned judges have suffered professional discipline for the improper use of social networking tools. The informality and speed with which communications are made using social network tools like Twitter and Facebook may contribute to errors and ethical transgressions. Also, lawyers need to appreciate that communications over social networks are public, easily searched and permanently archived. Lawyers in law firms have an ethical duty to supervise subordinate lawyers and non-lawyer staff to ensure that their conduct complies with applicable rules of conduct, including the ethical duty of confidentiality. See Rules 5.1 and 5.3. To this end, law firms need to have policies in place regarding employees use of social networking websites during and after normal business hours. Many firms have implemented policies concerning employee personal usage of the Internet, both in and out of the office. However, online social networking may require additional considerations. While the behavior manifested on social networking sites isn t truly that different from previous internet activities unchecked communication in chat rooms and forums, viewing inappropriate materials, and generally wasting time and bandwidth the popularity of
19 the newer social networking sites has raised the possibility of increased potentially risky behavior, as well as the exposure. If a law firm does not currently have an internet use/social networking policy there are guidelines from the Jaffe Associates, 14 a law firm PR firm, as well as Doug Cornelius guidelines, 15 that may help. In addition to developing their own policies and strategies regarding online social networking, lawyers and law firms may be expected to counsel and assist clients in the development of their policies as well so as to protect the client. However, there are non-lawyer experts better skilled and suited for this purpose and lawyers should check their credentials to ensure that such persons will meet the client s needs. C. Rule 1.16(a)-(d) governs when, how and under what circumstances a lawyer must or may withdraw from a representation. Generally, if a lawyer withdraws from representation he/she must do so in a manner that does not cause material adverse effect on the interests of the client. Rule 1.16 (b). However, there are some circumstances in which a lawyer may or is required to withdraw, even though doing so may have a material adverse effect. A lawyer shall withdraw if (a) the representation will result in violation of the Rules of Professional Conduct or other law; (b) if the lawyer s physical or mental condition materially impairs his/her representation of the client; (c) if the lawyer is discharged. Rule 1.16 (a). A lawyer may withdraw under circumstances outlined under Rule 1.16(b), including if the client had used the lawyer s services to perpetrate a fraud or crime; if a client insists upon pursuing an objective that the lawyer considers imprudent; if a client fails substantially to fulfill an obligation to the lawyer regarding the lawyer s services; or for other good cause. If a lawyer is counsel before a court, the lawyer cannot withdraw without leave of court and if the court for any reason denies the motion to withdraw, the lawyer must continue the representation despite having good cause to withdraw. Rule 1.16(c). Rule 1.16(e) governs a lawyer s duty to provide a client his/her file at the termination of the representation. This paragraph outlines in detail the content of the client s file which the attorney must return to the client upon request of the client or client s new counsel after termination of the representation. The rule also specifically notes that the file must be provided to the client regardless of whether the client owes fees or costs to the lawyer. Further, while the rule allows that the lawyer can charge the client for copying all but original, client-furnished documents, if the client refuses to pay the charge, the client still gets the file. The file must be provided within a reasonable period of time after the request. While this is not specifically defined, promptness is expected. Finally, paragraph (e) provides that a lawyer fulfills his/her obligation under this paragraph by furnishing these items one time at client request upon termination; provision of multiple copies is not required. Of note, however, a lawyer has not met his/her duty by the mere provision of copies of documents on an item-by-item basis during the course of the representation
20 If the lawyer holds any unearned fees or advanced costs in trust for the client upon termination, these funds must be refunded to the client and should be done so promptly. Rule 1.16(d). D. scams have run rampant among the legal community throughout the last year to two years. The scams have many variations, including the locations of the scammers, the legal service the lawyer is retained for, and the instructions for what the lawyer should do with the money. Methods of payment used in the swindle include cashier s checks, certified checks, and wire transfers. Some of the scams are elaborate. For example, the scammers use the names of actual companies and set up a fake toll-free number in the name of the company to give the impression of legitimacy. They also research their victims by scanning advertisements, firm websites, and news sources. Their communications might be personalized. So what s a lawyer to do? Some suggestions: Be vigilant for the fact patterns in the victims stories. Review the January 8, 2007, OCC Bulletin article issued by the Comptroller of the Currency at Confirm the existence of the bank the money is drawn on. Be aware that a bank may confirm that a certified check with a particular routing number was issued for a specific amount on a certain day, but counterfeit copies of that check might be in many lawyers mailboxes, or the check may have been altered. The lawyer may not be notified that it was counterfeit until weeks after deposit. To view sample counterfeit documents used in financial crimes, see the National Check Fraud Center site at Counterfeited checks may not be detectable by your local bank. For special alerts about counterfeit financial documents drawn on specific banks, see the Federal Deposit Insurance Corporation site at The site includes a link for subscribing to alert notifications as they are issued. Try to research the purported client, the company he or she is representing, and any legal case they refer to. Firms in which several attorneys and staff have access to accounts should conduct internal control reviews, so that if someone in the firm falls prey to a scheme, the loss can be detected quickly. Where circumstances permit, wait for the check to clear before you disburse the funds. But be aware that, while deposited money usually has to be made available within five days under federal law, the check can bounce or be exposed as a counterfeit much later, and the burden is on the depositor to make up the loss. Open a separate escrow account to deposit the certified check and wait until the funds are collected as opposed to merely available before you start disbursing funds.
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