During its June 25, 2015 meeting, the governing body of The Law Society of Upper Canada, which regulates Ontario lawyers, approved the creation of a task force to study compliance-based entity regulation (and another Task Force to promote wellness and address mental health and addiction issues.) The LSUC action was based on a report found here which was prepared by the Law Society’s Policy Secretariat and contains useful background information and a proposed structure for each task force.
The information about the task force on compliance-based entity regulation starts on p. 8. The Report explains at paragraphs 30-31 that “Compliance based regulation shifts regulatory emphasis from responding to complaints and enforcement through discipline to a proactive approach in which goals, expectations and tools for licensees are established. This means that licensees can themselves ensure that they have appropriate systems and processes in place to achieve regulatory compliance. Compliance-based regulation has been generally been implemented together with entity regulation. The goal is the improvement of regulatory results through a set of defined objectives that all legal services providers seek to achieve, on the basis that practice processes and systems are most effectively addressed at the firm or entity level.” See here.
The LSUC press release about the new Task Force is found here. For information showing US interest in proactive lawyer regulation, see the Session 1 materials from the ABA CPR’s 40th National Conference on Professional Responsibility held in Long Beach and a forthcoming Entity Regulation FAQ document that will be posted on the National Organization of Bar Counsel’s NOBC webpage.
The National Law Journal recently published a story about the possible application of the crime fraud exception to attorney client privilege in the deadly GM ignition-switch cases under the headline “What Did Counsel to GM Know? Plaintiffs allege that GM’s outside counsel, King & Spalding, encouraged GM to enter into confidential settlements to avoid revealing the ignition-switch defects. The plaintiffs allege that King & Spalding had a responsibility to tell federal regulators about the defect if GM did not. The underlying fact scenario of the case is a classic example of the interplay between attorney-client privilege and the exceptions to client confidentiality, and can serve as an example of the obligations of a lawyer or law firm employed by an organization under ABA Model Rule 1.13. One of the lawyer’s for the plaintiff’s claims that there is no evidence so far that King & Spalding advised GM to report the defect to the proper federal authorities, and that “[t]he only focus was settling cases and moving on.”
In January, the New York Times wrote a related story “Victims of GM Deadly Defect Fall Through the Legal Cracks” The article explains how damage caps in many states, combined with GM’s legal strategy to make suing it costly, prevented many injured and families of those injured and killed from obtaining lawyers willing to sue GM over the ignition-switches. Many injured persons and families of those who died found that when non-compensatory damages were capped at $300,000 to $400,000, GM was able to make suing it too costly for plaintiffs’ lawyers to take the cases. This was especially true when victims were young or elderly and had negligible economic damages. When GM did settle, often confidentiality agreements kept the dangerous ignition-switches secret. The story claims that at least 42 persons died in crashes linked to the faulty switches, and GM was able to keep the problem largely hidden for more than a decade. The New York Times story is useful to show how damage caps combined with certain defense strategies can have public safety consequences.
The California State Bar Standing Committee on Professional Responsibility & Conduct recently proposed an ethics opinion, Proposed Formal Op. 13-0005, available here http://www.calbar.ca.gov/Portals/0/documents/publicComment/2015/2015_13-0005DisclosurePublicyAvailableInformation.pdf, that should clear up something that many lawyers often fail to understand – a lawyer may never reveal embarrassing or detrimental secrets they learn about a client through representation even if the information doesn’t come from the client or is publicly available.
Some lawyers conflate attorney client privilege and client confidentiality, or believe that embarrassing or detrimental client information they learn through the representation of client, even if not from the client, is not covered under their duty of confidentiality if the information is available to the public. The proposed ethics opinion sends a clear message that both of these beliefs are wrong. The proposed ethics opinion also makes clear that the duty of confidentiality continues even after the client-lawyer relationship ends.
The California Bar is asking for comments on the proposed opinion through August 27, 2015, and follow this link to learn how to submit comments http://www.calbar.ca.gov/AboutUs/PublicComment/201511.aspx.
Relevant to Chapter 3: see ASSOCIATION OF PROFESSIONAL RESPONSIBILITY LAWYERS 2015 REPORT OF THE REGULATION OF LAWYER ADVERTISING COMMITTEE . The opening paragraph of the Executive Summary states: “The rules of professional conduct governing lawyer advertising in effect in most jurisdictions are outdated and unworkable in the current legal environment and fail to achieve their stated objectives. The trend toward greater regulation in response to diverse forms of electronic media advertising too often results in overly restrictive and inconsistent rules that are under-enforced and, in some cases, are constitutionally unsustainable under the Supreme Court’s Central Hudson test. Moreover, anticompetitive concerns, as well as First Amendment issues, globalization of the practice of law, and rapid technology changes compel a realignment of the balance between the professional responsibility rules and the constitutional right of lawyers to communicate with the public. ……
Based on the survey results, anecdotal information from regulators, ethics opinions, and case law, the Committee concludes that the practical and constitutional problems with current state regulation of lawyer advertising far exceed any perceived benefits associated with protecting the public or maintaining the integrity of the legal profession, and that a practical solution to these problems is best achieved by having a single rule that prohibits false and misleading communications about a lawyer or the lawyer’s services. The Committee believes that state regulators should establish procedures for responding to complaints regarding lawyer advertising through non-disciplinary means. Professional discipline should be reserved for violations that constitute misconduct under ABA Model Rule 8.4(c).3 The Committee recommends that violations of an advertising rule that do not involve dishonesty, fraud, deceit, or misrepresentation under Rule 8.4(c) should be handled in the first instance through non-disciplinary means, including the use of advisories or warnings and the use of civil remedies where there is demonstrable and present harm to consumers.
Our own Laurel Terry offers an insightful Jotwell review of a recent article by Andy Perlman, where he makes the case for a “law of legal services,” expanding regulation beyond what we traditionally conceive of as the “law of lawyering.” According to Terry: “…we may be getting close to a tipping point in which we begin to take seriously the notion of a ‘law of legal services.’ Professor Perlman’s thoughtful and measured article, his legal services ‘pyramid,’ and the model rule he includes in his article provide a useful way to start thinking about whether and how we might go about reimagining the regulatory space in which we operate.”
Hello, all! Thanks for welcoming me as a guest blogger. I’m happy to share my recent articles in my two-part project on attorney-whistleblowing. The first, entitled Advocate or Adversary? When Attorneys Act as Whistleblowers, examines whether attorneys may receive whistleblowing bounty rewards from the SEC under Dodd-Frank and the ethical concerns surrounding this issue. This article is forthcoming in the Georgetown Journal of Legal Ethics and available on SSRN by clicking here.
In my second piece, Conflicted Counselors: Retaliation Protections for Attorney-Whistleblowers in an Inconsistent Regulatory Regime, I examine a separate but related issue of retaliation protections for attorney-whistleblowers under Dodd-Frank in light of their reporting requirements under Sarbanes-Oxley. This article places special focus on in-house counsel and examines the various (and conflicting) regulatory regimes that govern attorney-whistleblowers in the corporate sector. You can access the article on SSRN by clicking here.
I hope you find these fruitful as this issue develops! If you would like to discuss more, please feel free to email me at firstname.lastname@example.org.
The Colorado Supreme Court recently granted cert in the case of Nathan Yadnez (2015 WL 929996), and the decision likely will provide additional guidance on how far the rule from Cuyler v. Sullivan, 446 U. S. 335 (1980), will extend to conflicts of interest beyond those rising from simultaneous representation of co-defendants or co-participants.
The relevant facts are straightforward. Defendant Yadnez murdered his mother at the age of 16. Yadnez’s father, also husband of Yadnez’s mother, hired and paid a lawyer to represent his son. The father also was a witness for the prosecution. There were allegations of child abuse that were neither investigated nor raised by the defense. There was no conflicts waiver.
The question is whether Yadnez’s lawyer was operating under an actual conflict of interest that adversely affected the representation, constituting ineffective assistance of counsel. The Court of Appeals found that there was a conflict, but arising solely from the fact that the lawyer was being paid by father, not sufficient to meet the ineffective assistance of counsel standard. Defendant Yadnez argues that under Sullivan, the conflict is not merely a Rule 1.8 conflict based on third party payment of fees. Instead, it is a nonconsentable conflict under Rule 1.7, because the father was a victim of the crime and a necessary witness for the prosecution, creating a risk of a material limitation on the representation, not merely a conflict arising from the payment of legal fees by the father.