This week, the ABA released a formal opinion clarifying (somewhat) the obligations lawyers have when a data breach occurs involving (or having a substantial likelihood of involving) material client information.
Just in time for Cybersecurity Awareness month 2018.
You can find Formal Opinion 483 here.
The DC Court of Appeals is seeking comments on whether it should “amend D.C. App. R. 46 relating to admission of graduates of non-accredited law schools.” The proposed changes affect the rule that allows foreign LL.M. students to sit for the DC bar exam, as well as graduates of U.S. non-ABA accredited schools who have been in practice for less than 5 years. Responses should be sent to the Clerk of the DC Court of Appeals by July 31, 2018.
In February 2018, the DC Board of Governors voted in favor of the proposed amendments that would, inter alia, change the bar eligibility requirements for foreign LL.M. students. The proposed changes would reduce from 26 to 24 the number of U.S. legal education credits that provide a pathway for bar exam eligibility, change the required courses, and allow the same number of distance education courses as are permitted by ABA accreditation rules. The proposed new language, which is used in multiple locations in Rule 46, states:
Of such 24 credit hours, a total of six credit hours shalJ be earned in courses of study in the following subiects: two credit hours of instruction in professional responsibility (based on the ABA Model Rules of Professional Conduct or rules of professional conduct of a U.S. jurisdiction}; two credit hours of instruction in U.S. legal institutions (including the history, goals, structure, values, rules and responsibilities of the U.S. legal system); and two credit hours of instruction in common law legal reasoning, research, and writing. A minimum of six credit hours shall be earned in courses of study, each of which is substantially concentrated on a single subject tested on the Uniform Bar Examination. The law school issuing the credit hours shall certify in writing that its courses comply with the specific course requirements in this rule. Any amount of such 24 credit hours may be completed through distance education from the ABA-accredited law school, provided the law school issuing the credit hours certifies in writing that its distance education methods comply with ABA distance education standards;
The DC Bar’s February 2018 proposals were based on the Jan. 2018 Final Report from the DC Bar’s Global Legal Practice Task Force (“Task Force“). The DC Bar’s transmittal letter begins on p. 3 of the Court’s Notice & Comment pdf; the Jan. 2018 Final Report begins on p. 11 of the pdf, and a redline version of the proposed changes begins on p. 25 of that Final Report, which starts at p. 41 of the Court’s Notice & Comment pdf. As the DC Bar’s transmittal letter describes, the January Task Force 2018 Final Report and the February 2018 Board vote reflect comments the Task Force had received on its July 2017 consultation draft.
The topics addressed in this Notice and Comment are covered on pp. 3-4 of the Casebook (especially the “Global Perspective” box) and in Chapter 9(1). For information about why U.S.-based clients might want access to foreign-trained lawyers, see Diane F. Bosse, Testing Foreign-Trained Applicants in a New York State of Mind, 83(4) The Bar Examiner 31–37 (Dec. 2014); Laurel S. Terry, Admitting Foreign-Trained Lawyers in States Other than New York: Why it Matters, 83(4) Bar Examiner 38 (Dec. 2014).
The Supreme Court heard arguments today in McCoy v. Louisiana, which presents the question of whether it is unconstitutional for defense counsel to tell the jury that a client is guilty when the client insists he is innocent. It also raises interesting questions about the ethical obligations under ABA Model Rule 1.2 that “a lawyer shall abide by a client’s decisions concerning the objectives of representation” and ABA Model Rule 3.3, Candor Toward the Tribunal.
As Justice Sotomayor observed in questioning McCoy’s attorney, “this sounds like my ethics class in law school, and this very hypothetical of what do you do with a lying client?” Full oral argument transcript is here.
Adam Liptak noted in the NY Times that the justices seemed likely to side with McCoy: “Several justices said a decision as fundamental as admitting guilt in a capital case belonged to the client rather than the lawyer.” Full article here.
Cross-posted at the Legal Ethics Forum
A new complaint this week against LegalZoom for the unauthorized practice of law, this time from LegalForce RAPC, a patent and trademark filing firm. The complaint alleges that non-lawyer “trademark document specialists” “provid[e] legal advice to the plaintiffs by selecting classification and modifying the goods and services description from the template thereby applying specific law to facts.”
More from the ABA Journal.
The Florida Supreme Court will hear a case from the Florida Bar, asserting that the website TIKD.com violates unauthorized practice of law. There is also an issue of whether the information advertised on the site was false and misleading.
TIKD.com had sued the Florida Bar and the Ticket Clinic in federal court back in November, and the Ticket Clinic has filed a bar grievance against the lawyers who represent TIKD.com.
The Miami Herald reports this latest development in the saga here.
The TIKD website is here.
This case will definitely be a supplement to my discussion of Chapter 2.
A preview of November’s ABA Journal Ethics piece by textbook co-author Bruce Green, discussing New York City Bar Association’s Professional Ethics Committee’s recent Formal Opinion 2017-4, which illustrates how legal services lawyers can help clients navigate the legal complexities of Medicaid while leaving it to the clients’ caseworkers to provide other necessary help.
Read the full article, which interprets ethics guidelines based on Rules 1.2(c) and 6.5.
The ABA Journal has a nice summary of the recent Seventh Circuit decision affirming the lower court’s dismissal of the malpractice lawsuit against Mayer Brown, which represented General Motors, for the erroneous release of a 1.6 billion dollar security interest against General Motors. The plaintiffs were the lenders whose security interests were released.
The Court held that Mayer Brown didn’t owe a duty to third parties who aren’t clients and that Mayer Brown’s representation of JPMorgan Chase Bank in different matter did not create a duty of care in the loan/security interest matter. According to the Court, Plaintiff had offered 3 theories as to why Mayer Brown owed a duty of care to plaintiffs: (a) JP Morgan was a client of Mayer Brown in unrelated matters and thus not a third‐party non‐client; (b) even if JP Morgan was a third‐party non‐client, Mayer Brown assumed a duty to JP Morgan by drafting the closing documents; and (c) the primary purpose of the General Motors‐Mayer Brown relationship was to influence JPMorgan.
Among other things, the Court stated: ““Consider the consequences of the rule plaintiffs advocate, that a law firm owes a duty of care to a party adverse to its client because the adverse party is a client in unrelated matters and has waived the conflict of interest.” The Court’s opinion is here.
The American College of Trust and Estate Counsel (ACTEC) has released the third edition of its book with sample engagement letters: Engagement Letters A Guide for Practitioners (3rd ed. 2017). It is also available as a free pdf. These samples can be useful when teaching Chapter 2, Section III on Creating the Lawyer-Client Relationship. (Hat Tip to the Elder Law Prof Blog for this news item.)
P.S. For those who don’t know, ACTEC has also issued commentaries on the Model Rules.
From today’s New York Times:
The Supreme Court is taking up the case of a longtime U.S. resident who is facing deportation to South Korea after pleading guilty to a drug crime based on his lawyer’s bad advice.
The justices are hearing arguments Tuesday in an appeal by Jae Lee, who has lived in the United States for 35 years and has never been back to South Korea since coming to the United States when he was 13.
The case has taken on increased importance because President Donald Trump has promised to step up deportations, with a special focus on immigrants who have been convicted of crimes. The American Bar Association has estimated that one of every 10 criminal defendants is not an American citizen.
Lee agreed to plead guilty to possession of ecstasy with intent to distribute after his lawyer, Larry Fitzgerald, assured him that doing so would not make him subject to deportation. The lawyer was wrong.
The issue in Lee’s appeal is whether the lawyer’s recommendation to take the deal offered by prosecutors was so bad that it amounts to a violation of Lee’s constitutional right to a lawyer.
Both sides agree that Fitzgerald’s performance was deficient in representing Lee. The Supreme Court ruled in 2010 that immigrants have a constitutional right to be told by their lawyers whether pleading guilty to a crime could lead to their deportation.
But Lee almost must show that the bad lawyering mattered to the outcome of the criminal case.
Full article here.
Unfortunately, my slides for the section of Chapter 2 relating to the representation of difficult and mentally ill clients continues to grow each year with the tragic recurring incidents in our national news.
This year’s update is the trial of Dylann Roof, charged with the mass shooting in a Charleston Church in June, 2015.
Dylann Roof’s self-representation, both in the guilt and sentencing phases of his case, raises fascinating ethical and constitutional questions. The case has been well-covered in the New York Times in recent weeks.
See this interesting article by UM Law Professor Scott Sundby in the Huffington Post (January 4, 2017), relating to the constitutional questions raised by his self-representation, particularly in the death penalty phase of the case.
The ABA Journal and Law.com have reported the story of a San Diego lawyer who was sentenced to five years in prison for using his IOLTA account to facilitate money-laundering activities. In his plea agreement, attorney Medina admitted that he used his IOLTA account for the receipt, transport, and transmission of cash to international destinations and that he “knew or had reason to know that the cash transactions described [therein] were proceeds of unlawful activity, or were intended to promote unlawful activity.”
This new story can be used in Chapter 2 when teaching Rule 1.2(d), which states that a lawyer “shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent….” Although PR profs cannot possibly teach the substantive law of all crimes, I think it is important to make sure that our students are familiar with 18 U.S.C. § 1956. Among other things, § 1956 makes it a felony “to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity.” This means that activity that is perfectly legal in one context (such as forming one or more corporations) may be illegal if the purpose of that otherwise legal conduct is to hide the location or source of the proceeds of crime. (The 60 Minutes/Global Witness videos and the Panama Papers leak can provide useful hypos for discussion).
The San Diego case shows students that lawyers who assist money laundering activity face criminal law sanctions, as well as disciplinary sanctions under Rule 1.2(d). I found it noteworthy that the plea agreement with Attorney Medina recited that he knew or had reason to know that the money in his IOLTA account were proceeds of unlawful activity, or were intended to promote unlawful activity.
For additional information about the role of lawyers in preventing money-laundering, see this ABA Task Force webpage and the guidance provided by the ABA and jointly by the IBA, CCBE, and ABA about how to identify money-laundering red flags. (I give my students a 2-page summary of the ABA’s red flags guidance.)
My other work about lawyers and money-laundering includes these slides about the potential impact on US lawyer regulation of FATF’s 4th Mutual Evaluation of the US; slides that focus on US efforts to educate lawyers about money-laundering; and slides and a 2 page handout that discuss how US lawyer regulation could be affected if US lawyers don’t recognize money laundering situations. My most recent article about this topic is available here.
In May 2016, the DC Bar issued the Interim Report of its Global Legal Practice Task Force. In June 2016, the Board of Governors of the DC Bar approved the report’s recommendations. As the DC press release noted, “D.C. Bar members practice in 83 countries, and nearly 1,500 of the Bar’s 101,500 members live and work abroad. Fifty-four percent of the Bar’s domestic members were very or somewhat interested in expanding their international practices within the next five years …with 57 percent of that number indicating that they expect to expand their practices during that time.”
The DC Bar sent separate surveys to bar members located in the US, bar members located outside the US, and Special [Foreign] Legal Consultants. To my knowledge, this is the first survey of its kind, in which bar members were asked demographic data about their practices and qualifications, as well as questions about the ways in which they currently interact with the DC Bar and the services they would like. Anyone who is interested in the globalization of legal practice will find the Interim Report an interesting read.
The DC Bar press release announcing Board approval of the recommendations summarized the Task Force work as follows:
To best achieve its charge, the Task Force divided its study into three areas: examining how best to serve domestic Bar members with international practices and clients, and Bar members who live and work overseas (outbound); studying the rules by which lawyers from foreign countries can be admitted and licensed to practice in the District (inbound); and studying developments in alternative business models being employed by law firms domestically and in other countries. The interim report reflects the recommendations of the outbound subgroup and a recommendation to conduct ongoing study of alternative business structures and multi-disciplinary practice. The Task Force’s work continues on issues about the regulation, admission, and practice of foreign-educated lawyers in the District of Columbia.
The Task Force’s proposals for outbound members fell into three broad categories: connections or networking, resources, and education and professional development.
Highlights of the proposals for short-term implementation recommend that the Bar should:
• Develop networking opportunities with substantive content for smaller groups of domestic Bar members with international legal practices.
• Improve the exchange of information about resources, education, and networking for all members engaged in the practice of cross-border and international law.
• Create varying “expertise” levels of educational programming in international law topics for all members and develop marketing for this programming.
• Develop educational programming about issues in international practice that all members often encounter: multi-country litigation; record keeping; e-discovery training and tools; conflicting legal ethics rules; attorney-client privilege abroad; and data security and privacy.
Highlights of the proposals for long-term implementation recommend that the Bar should:
• Facilitate informal gatherings of its members residing in specific regions of the world where these members commonly live and practice, such as Canada, China, France, and the United Kingdom.
• Facilitate networking between members who reside and practice outside the United States and local business groups.
• Partner with international groups and organizations based in Washington, D.C., for hosting networking events with domestic members with international practices.
• Develop and maintain a list of volunteer “resource attorneys” by international law subject matters or by conducting business in specific regions of the world.
California’s Second Commission for the Revision of the Rules of Professional Conduct continues its work to update California’s ethics rules (and switch to the ABA Model Rules format). The Commission’s website includes a page where it regularly posts its draft rules for comment. For example, in April 2016 the Commission posted its proposed drafts of Rules 1.2, 1.7, and 7.1-7.5, among other rules. In May 2016 the Commission posted drafts of Rules 3.3-3.6 and a proposed rule dealing with prosecutorial responsibilities. The June 2016 column by State Bar of California President David Pasternak urged California lawyers to submit their comments to the Commission. Given California’s size and influence, this work deserves careful consideration by all lawyers.
On April 22, 2016, the Second Circuit decided SCHOENEFELD v. SCHNEIDERMAN, et. al. In a 2-1 decision, the Second Circuit reversed the district court and remanded the case with instructions to the court to award judgment to the defendants. The Second Circuit majority upheld the constitutionality of New York’s rule that requires an instate office. Relying on
McBurney v. Young, 133 S. Ct. 1709 (2013), the Court held, inter alia, that “in the absence of any proof that that statute’s in‐state office requirement was enacted for a protectionist purpose”, plaintiff could not prevail.
The suit was filed in 2008 by Ekaterina Schoenefeld, who was a New Jersey resident. She had cited the Privileges & Immunity Clause and argued that the policy, which blocked her from practicing in New York despite passing the bar there and meeting all other requirements, served no substantial state interest. She had noted that New York residents need not have a physical office in New York and may practice from their homes. This argument was not successful. The opinions are quite lengthy – 31 pages for the majority and 25 pages for the dissent. The ABA Journal has a story about the case here about and there is Wall Street Journal article here.
Although the Court held that it was constitutional for New York to have an in-state office requirement, the decision does not require such a rule. At some point, New York might want to revisit this issue. In addition to its domestic implications, this ruling has the potential to reduce the number of foreign-admitted lawyers who annually sit for New York’s bar exam. See Diane Bosse, Testing Foreign-Trained Applicants in a New York State of Mind. New York’s in-state office rule could affect the attractiveness of the New York license as a global credential.
On Feb. 8, 2016, the ABA House of Delegates adopted a resolution that “urges the bar admission authorities in each state and territory to adopt expeditiously the Uniform Bar Examination.”
This is relevant when teaching Chapter 2 (and also for our students’ futures.) For more information, see the NCBE’s UBE webpage.
On Monday, Feb. 8, 2016, the ABA House of Delegates adopted a revised and amended version of the Regulatory Objectives Resolution. The original proposal is here. The language that was added stated:
FURTHER RESOLVED, that nothing contained in this Resolution abrogates in any manner existing ABA policy prohibiting non lawyer ownership of law firms or the core values adopted by the House of Delegates in Resolution 10F, adopted on July 11, 2000.
In my view, the resolution always was about encouraging jurisdictions to think about “why” they regulate and what they are trying to accomplish, not “what is regulated.” The Resolution “urges that each state’s highest court, and those of each territory and tribe, be guided by the ABA Model Regulatory Objectives for the Provision of Legal Services when they assess [regulatory issues].” I hope that each U.S. jurisdiction will now decide to adopt its own regulatory objectives (and will think about whether it wants to use the ABA’s model objectives verbatim or adapt a variation such as those recommended here, those set forth in this appendix, or those adopted in 2014 in Nova Scotia.)
From the Raleigh News & Observer:
Ronald Newton, a candidate for the Democratic nomination for lieutenant governor, represents himself as a lawyer even though he acknowledges he has never taken the bar exam and is not licensed to practice law anywhere.
The distinction, according to Newton, who runs a tax firm in Durham, is that anyone who graduates from law school is a “lawyer,” and those who pass the bar and are licensed are “attorneys.”
“I’m not a tax attorney; I’m a tax lawyer,” Newton said this week. “There’s a difference. I think this is a common error people make.”
The error is his, according to the N.C. State Bar, which regulates the practice of law.
The terms are used interchangeably, for purposes of regulation, according to David Johnson, who is in the State Bar section that investigates the unauthorized practice of law.
“Simply graduating from law school is insufficient to be called a lawyer or an attorney,” Johnson said in an email.
If you haven’t yet watched 60 Minutes’ recent episode on Anonymous, Inc., you might consider using in class it to spark conversation about Model Rule 1.2(d)’s requirement that:
A lawyer shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent, but a lawyer may discuss the legal consequences of any proposed course of conduct with a client and may counsel or assist a client to make a good faith effort to determine the validity, scope, meaning or application of the law.
The episode features interviews with 16 attorneys by a fictitious client seeking help with money laundering. Interestingly, only one attorney flatly refused to engage. Among the rest, we see fascinating clips of their conversations as they weigh whether or not to take on the client. The second half of the show features legal ethics expert Bill Simon discussing the attorneys’ behavior.
Here’s a brief synopsis from the 60 Minutes website:
If you like crime dramas and movies with international intrigue, then you probably have a basic understanding of money laundering. It’s how dictators, drug dealers, corrupt politicians, and other crooks avoid getting caught by transforming their ill-gotten gains into assets that appear to be legitimate.
They do it by moving the dirty money through a maze of dummy corporations and offshore bank accounts that conceal their identity and the source of the funds.
And most of it would never happen without the help — witting or unwitting — of lawyers, accountants and incorporators; the people who actually create these anonymous shell companies and help move the money. In fact, the U.S. has become one of the most popular places in the world to do it.
More coverage below:
Full report from Global Witness, the group conducting the investigation, is here.
ABA Journal, Group goes undercover at 13 law firms to show how US laws facilitate anonymous investment
NY Times, Report describes lawyers’ advice on moving suspect funds
ABA President Paulette Brown responds to 60 Minutes segment here.
LT addition: For an article on US legal profession efforts to combat money laundering, see here and here for related slides.
Professional Responsibility: A Contemporary Approach 