Category: Legal Ethics

By David Carr

Most attorneys are familiar with the ethical rules that govern our professional conduct to some degree. Most attorneys, however, don’t pay much attention to the processes that create ethical rules. There may be some tendency to take these rules for granted, to assume that they reflect such ancient verities that they must have always been around in some form.  In fact, written ethical rules for the legal profession are less than 200 years old and far from reflecting eternal truths, they have often changed with the times as the norms of the profession change. In California, they are in process of what might well be a very radical change.

The evolution of the rule on an attorney’s duty when he or she receives an inadvertent disclosure of confidential information is an interesting example of the evolution of a completely new professional rule in California.

Its history begins 25 years ago as American Bar Association (ABA) Formal Ethics Opinion in 92–368, requiring notice of the receipt of inadvertently disclosed privileged documents. It came of age in California with a case, State Compensation Insurance Fund v. WPS, Inc. (1999) 70 Cal. App. 4th 644 (State Fund). Outside counsel for the State Fund inadvertently sent internal documents containing privileged attorney-client communications to counsel for WPS. Counsel for WPS gave some of the privileged documents to an expert witness, who passed those documents to another lawyer who was adverse to the State Fund in a different matter. Counsel for WPS refused to return the privileged documents after demand. The trial court found that conduct to be in bad faith, unethical and imposed monetary sanctions against the company and its attorneys under Code Civ. Proc., § 128.5.

The trial court leaned heavily in its analysis on formal opinion 92–368, which it seemed to regard as binding on the offending lawyer. But the appellate court in State Fund reversed the order of sanctions because the ABA Model Rules of Professional Conduct discussed in the opinion are not the law in California. We have our Rules of Professional Conduct that do not address inadvertent disclosure (at least not yet).

Then the appellate court did something remarkable. After vacating the sanction, it turned around and articulated the rationale of ABA formal opinion 92-368 as a judicial rule, reasoning that it was probable that similar circumstances will reoccur in the future. “When a lawyer who receives materials that obviously appear to be subject to an attorney-client privilege or otherwise clearly appear to be confidential and privileged and where it is reasonably apparent that the materials were provided or made available through inadvertence, the lawyer receiving such materials should refrain from examining the materials any more than is essential to ascertain if the materials are privileged, and shall immediately notify the sender that he or she possesses material that appears to be privileged. The parties may then proceed to resolve the situation by agreement or may resort to the court for guidance with the benefit of protective orders and other judicial intervention as may be justified.” State Fund, at 656.

The next big step in the evolution of the rule occurred with Rico v. Mitsubishi (2007) 42 Cal.4th 807. There, defendants in civil litigation moved to disqualify plaintiffs’ attorneys and experts, based on attorneys’ clandestine use of confidential and privileged defense document, obtained inadvertently, during depositions of defense experts. The trial court affirmed the disqualification, as did the court of appeal. The California Supreme Court accepted review, in hindsight for the clear purpose of making the State Fund rule binding on all California lawyers.  And so it did by affirming the disqualification based on State Fund.

The most recent application of the inadvertent disclosure rule in a published decision is McDermott, Will & Emery v. Superior Court (Hausman) (2017) 10 Cal.App.5th 1083 (petition for review denied). The appellate court upheld disqualification of a law firm that had received an email between attorney and client that had been forwarded to the client’s smartphone at least three times before falling into the law firm’s hands. The decision is an example of the heightened dangers of inadvertent disclosure in the use of digital technology which makes it cheap and easy — too easy sometimes — to move information.

The last step in the evolution of the inadvertent disclosure rule is imminent. The California Supreme Court is considering a wholly revised set of Rules of Professional Conduct based on the ABA Model Rules. Included is new proposed California Rule 4.4:

Where it is reasonably apparent to a lawyer who receives a writing relating to the lawyer’s representation of a client that the writing was inadvertently sent or produced, and the lawyer knows or reasonably should know that the writing is privileged or subject to the work product doctrine, the lawyer shall: (a) refrain from examining the writing any more than is necessary to determine that it is privileged or subject to the work product doctrine, and (b) promptly notify the sender.

Comment 1 to the proposed new rule cites to Rico v. Mitsubishi and states that the lawyer should return the writing to the sender, seek to reach agreement with the sender regarding the disposition of the writing, or seek guidance from a tribunal.

So the inadvertent disclosure rule is set to come full circle, from its birth in a long-ago ABA ethics opinion to maturity as a California ethics rule enforceable by professional discipline.

David Carr is a solo practitioner.

This article was originally published in the SDCBA’s “Ethics in Brief” column series.

No portion of this summary is intended to constitute legal advice. Be sure to perform independent research and analysis. Any views expressed are those of the author only and not of the SDCBA or its Legal Ethics Committee. Read More

By Charles Berwanger Read More

By Edward McIntyre

Macbeth sipped his Oban single malt, celebrating an appellate victory with Duncan and Sarah at Brennan’s Tavern. Fred Fox pulled an empty chair to their table — uninvited.

“Macbeth, I’ve got an idea I’ve gotta run past you —”

“Sorry, but we’re discussing a client matter —”

“Don’t worry. I won’t be long. This is killer.” Fox grabbed a passing waitress by the arm and ordered an orange mojito. Macbeth just closed his eyes.

“So, I’ve got this nephew. At college. We came up with this plan. I have him pay some of his fraternity brothers a few bucks. Say a hundred a piece. You know, beer and condom money. Or whatever kids do these days.”

Sarah, outside Fox’s line of sight, rolled her eyes.

“Anyhow, I pay my nephew another hundred for each kid he signs up. I’m out maybe two grand. Five tops.”

Duncan took the bait. “For what?”

“To be class-action plaintiffs, of course. You know, CLRA, UCL, FAL. Those kind of claims. Against these totally phony (making air quotes) ‘supplement’ products on the market. Kids wouldn’t even have to buy the stuff. Most of it’s garbage, anyhow. ‘Cure this. Make that bigger. Make it last forever.’ Garbage promises.”

Another eye roll from Sarah. Macbeth set down his Oban and took a deep breath.

“Doesn’t a consumer product class action have to allege that the plaintiff purchased a product, for example, relying on some representation, that it was false and the plaintiff suffered a resulting injury and that the plaintiff’s claims are typical of those of the class?”

Fox took a swig of orange mojito. “Yeah. So?”

“What business do you think you’ll take up after being a lawyer?”

“Macbeth, that’s almost insulting. Not a very funny joke.”

“Using a runner or capper is a misdemeanor that could lead to a year in jail and suspension or disbarment”

“Runner? Capper?”

“Yes, a person who acts as an agent for consideration for a lawyer to solicit or procure business. In the scheme you describe, your nephew.”

Sarah added, “The prohibition’s in the State Bar Act.”

“Rule 1-120,” Macbeth added, “prohibits assisting, soliciting or inducing a violation of the Rules of Professional Conduct or the State Bar Act.”

“Yes, but —”

“And the scheme, as you described it, also includes making false representations to the court and pursuing groundless claims. In the complaint. In any class-action motion. What about your client’s deposition? What does he say?”

Another swig of orange mojito. “Well, most cases don’t go that far. They see class action and run for the hills. Settle. Pay up. Before any class is certified.”

“And you keep the money?”

“Maybe give the kid another hundred. Haven’t thought about it that much.”

“Let me see if I understand.” Macbeth looked directly at Fox. “You plan on using a runner or capper to line up prepaid plaintiffs. They don’t even buy the product that is the subject of their claims that they did. They also claim they relied on advertising they never bothered to look at. And say that their claims are typical of a class of other consumers? And you’re doing this to try to force early settlements from these companies?”

“But I’ve collected some science articles and other stuff. They say the claims are garbage. That these supplements don’t do anything. So I’ve got probable cause, don’t I?”

“Do you have competing scientific studies that are favorable to the products?”

“Seen some. Haven’t looked at them. Probably paid for by the companies. You know how they are.”

“I don’t ‘know how they are.’ But I do know that for the lawsuit you describe you have no probable cause. Your prepaid plaintiff has no legitimate claim. You know it from the beginning. Not for himself. Not for a putative class.”

Final swig of mojito. “So I’ll have them buy the stuff. Hire my nephew. Part time. What then?”

“My view doesn’t change.”

Sarah nodded in agreement.

Duncan spoke up. “You’d be caught up in a host of Rules and State Bar Act violations. If a judge, opposing counsel — a competitor even — found out? Reported you to the State Bar? Boy, you’d need a miracle.”

Fox pushed his chair back and snatched up his messenger bag from the floor. “Gotta go.”

As Fox headed out the door, Macbeth lifted his glass ever so slightly. “You’re welcome, Fred. Anytime.”

Sarah and Duncan laughed and followed suit.

Editorial Note: Bus. & Prof. Code sections 6151-6154 prohibit using runners or cappers, criminalize it, void agreements and mandate fee divestiture. Rule 5-200 (A) & (B) and Bus. & Prof. Code section 6068(d) mandate candor to the court; section 6068(c) prohibits bringing actions except those that are “legal or just.” Rule 4-200 prohibits illegal and unconscionable fees, and Rule 3-110 requires supervision of subordinate lawyer and non-lawyer employees.

Edward McIntyre is an attorney at law and co-editor of San Diego Lawyer.

Cartoon by George Brewster Jr.

This article originally appeared in the

September/October 2017 issue Read More

By Timothy Casey

Recent technological advances in artificial intelligence present new problems for society, and, in turn, for lawyers.  Generally speaking, artificial intelligence describes the capacity of machines to perform the same complex cognitive functions as humans.

The technology of AI has raced ahead at breakneck speed.  As researchers push the limits of what AI can do, no one seems to be asking what AI should do.  It’s hard to imagine a problem more difficult than developing a system that is intelligent – a ‘machine’ that can learn, but the ethics of AI are precisely that – a problem more difficult and trickier than developing the technology itself.

The legal profession is not immune from the advance of technology, and existing AI technologies have the potential to dramatically change the legal profession.^[1]  More than simple document searches, new technologies such as Lex Machina guide litigation decisions by analyzing millions of pages of PACER data. Just as these technologies have created new ethical challenges for other industries, so too, the advance of technology raises ethical considerations for lawyers.  In this time of rapid advancement, the critical question is what are the ethical obligations for attorneys?

As lawyers we have an ongoing duty to keep abreast of technological developments.  Rule of Professional Conduct 3-110 states “A member shall not intentionally, recklessly, or repeatedly fail to perform legal services with competence.” (Calif. R. Prof. Conduct 3-110).  Competence is defined as the “(1) diligence, 2) learning and skill, and 3) mental, emotional, and physical ability reasonably necessary to the performance of such service.”  (Calif. R. Prof. Conduct 3-110 (B)). A member without the requisite learning and skill may nonetheless undertake the representation if the member associates with another lawyer or “by acquiring sufficient learning and skill before performance is required.”  (Calif. R. Prof. Conduct 3-110 (C)).

The ABA Model Rules of Professional Conduct sets a similar standard for lawyer competence:  A lawyer shall provide competent representation to a client.  Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.”  (ABA Model Rules of Prof. Conduct [MRPC] 1.1).

The comments to the Model Rules offer specific guidance regarding a lawyer’s professional obligation to remain informed about technological developments.  “[A] lawyer should keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology.…” [Emphasis added.] (Comment 8 to MRPC 1.1).

The ABA House of delegates amended the standard of competence to include technology in 2012.  Since then, the majority of states have adopted the change.  As of late 2017, twenty-eight states adopted the amended language of Comment 8.^[2]

Although California has yet to adopt language that expressly includes competence in technology as part of attorney competence, there is good reason for attorneys to heed the call to technological competence.  The ABA Model Rules serve as a guide in the absence of direct California authority.  (City & County of San Francisco v. Cobra Solutions, Inc. (2006) 38 Cal. 4th 839, 852; State Comp. Ins. Fund v. WPS, Inc. (1999) 70 Cal.App.4th 644).

Moreover, California ethics opinions suggest that the duty of competence includes technological competence.  For example, COPRAC Formal Opinion 2010-179 discussed the use of wireless networks.  The opinion noted that “attorneys have an ongoing responsibility of evaluating the level of security of technology that has increasingly become an indispensable tool in the practice of law.” (COPRAC Formal Opinion 2010-173). Another opinion, Formal Opinion 2015-19, which explained an attorney’s obligations in electronic discovery, included a reference to Comment 8 on Model Rule 1.1.  According to the opinion, attorneys must “[keep] abreast of changes in the law and its practice, including the benefits and risks associated with technology.”  (COPRAC Formal Opinion 2015-193).  The opinion concluded that attorneys must assess their understanding of e-discovery, and, if necessary, associate with an expert.

[T]he duty of competence requires an attorney to assess his or her own e-discovery skills and resources as part of the attorney’s duty to provide the client with competent representation.  If an attorney lacks such skills and/or resources, the attorney must try to acquire sufficient learning and skill, or associate or consult with someone with expertise to assist.  (COPRAC Formal Opinion 2015-193).

Technological developments will undoubtedly advance faster than specific guidance from ethics authorities.  However, we can be assured of two things: first, technology will continue to advance, and second, an attorney’s standard of competence will evolve to keep pace with a changing society.

The ethical standard does not require attorneys to know all of the new technologies, but instead, requires attorneys to know what they do not know, and to take steps to fill in the gaps in their knowledge when required to do so by a specific client engagement.

Timothy Casey is director of the STEPPS Program and professor in residence at California Western School of Law.

^[1] Steve Lohr, A.I. Is Doing Legal Work. But It Won’t Replace Lawyers, Yet., New York Times, March 19, 2017, available at https://www.nytimes.com/2017/03/19/technology/lawyers-artificial-intelligence.html (last accessed on February 12, 2018). Read More

By David Majchrzak  Read More

By Edward McIntyre

They come in pairs. A young couple who want an estate plan; two women who need a partnership formed; the employer who wants you to represent it and the accused supervisor/co-defendant; the non-party executive whose deposition is scheduled when you already represent the defendant company; two former employees who want to sue their former employer. All promising pieces of business.

But whenever you have two people sitting in your office, on the phone, identified on the email—no matter how seemingly allied their interests—think conflict of interest. At least potentially. That brings us to the joint representation or conflict of interest waiver letter.

Rule of Professional Conduct 3-310

Rule of Professional Conduct 3-310(C)(1) mandates that when the interests of two clients or more conflict, even potentially, we need the informed written consent of each before we can begin or continue the representation. The written part is obvious; but informed? It means telling each the actual and reasonably foreseeable adverse consequences to each of having the same lawyer represent them.

Scare Away Business?

Won’t that just scare them out the door? Not if done right. If the lawyer says: “I really want to help you both. I know I can. But my duty to each of you, and basic fairness, requires me to tell you some consequences of a joint representation. I want you to make the best decision for you.” Likely outcome? Both will appreciate your honesty and trust you more.

How Informed?

Importantly, the lawyer should tell each potential client that anything one client tells the lawyer, the lawyer is free to tell the other client; that if one client has information relevant to the representation that client does not want the lawyer to tell to the other joint client, obviously the lawyer must keep that information confidential; that but then the lawyer would have to determine whether the lawyer could continue to represent both clients, only one or neither. If the lawyer should elect to continue representing one client, the other acknowledges at the outset that she or he must obtain independent counsel.

In addition, the lawyer should also tell each potential client that Evidence Code section 962 provides that in any dispute between them arising out of the joint representation, no attorney-client privilege exists for anything they disclosed to the lawyer during the joint representation.

Some Particulars

For the young couple seeking an estate plan, consider discussing that, while they have common goals now, as time goes on and assets grow, they have children, or their parents age, their ideas may change. They may wish to alter their estate goals—and disagree fundamentally about how to do it. Untangling an existing estate plan could be cumbersome, even costly. At that point, they may have to retain separate counsel if they cannot reconcile differences.

The two new partners? First, who’s the client? One; both; the partnership-to-be; all three? Will there be employment agreements; buy-sell agreements; successor issues? Have they thought all this through—the lawyer cannot negotiate on behalf of one against the other.

In the employment lawsuit, you’re asked to represent your client, the company, and also the alleged harassing supervisor. “George would never do such a thing!” Make sure the supervisor knows that, if the facts change and an actual conflict develops, the lawyer will continue to represent the company and the supervisor will have to obtain independent counsel.

That non-party executive at the deposition? If you want adequately to prepare the executive for the deposition, then you have joint clients—however briefly—and need a conflict of interest waiver. Otherwise, you had better make sure from the first meeting that the executive fully understands that you do not, in fact, represent the executive; that there is no attorney-client privilege for any communication between you; that you represent solely the company’s interests.

Joint plaintiffs? Obviously, they have a common goal: win. But differences in strategy can—likely will—arise: conflicting instructions on how to proceed; whether to settle or fight; sue individuals or just the employer. If the employer offers a lump-sum settlement, how will they divide it? All potential conflicts that the conflict waiver letter should disclose.

Potential Becomes Actual?

If a potential conflict becomes actual, we have to get informed written consent of each client to continue the representation. (Rule 3-310(C)(2).)

And so, when George confides—“in strictest confidence, you understand”—that he did some of the things the plaintiff alleges, the potential conflict just became actual—in at least two respects. The employer may have a claim against the supervisor. More importantly, because the lawyer must keep confidential forever the information George just disclosed “in strictest confidence”—Rule 3-100 and Business and Professions Code section 6068, subdivision (e)(1)—the lawyer must determine whether the lawyer can continue to represent both without informing the employer what the lawyer has just learned.  If not, then the lawyer has an irreconcilable conflict and must withdraw from representing George.

A properly crafted joint representation agreement, however, should allow the lawyer to continue representing the employer, unless the lawyer determines that the information is so critical to the representation that the lawyer cannot continue to represent the employer without disclosing this new information. At that point, unfortunately, the lawyer must withdraw from representing both.

Conclusion

Whenever there are two potential clients, likely a potential conflict of interest lurks, triggering the need for a conflict waiver. But we don’t have to look on this as a threat, or even a chore. Rather, think of it as an opportunity to show each client that you have that client’s individual interest at heart; that you want the client to decide what works best for the client. It also helps avoid the “if-you-had-only-told-me” backbiting should something go amiss later. You have in hand the client’s written informed consent to the joint representation.

Edward McIntyre is an attorney at law and Co-Editor of  San Diego Lawyer.

No portion of this summary is intended to constitute legal advice. Be sure to perform independent research and analysis. Any views expressed are those of the author only and not of the SDCBA or its Legal Ethics Committee.

This article was originally published in the SDCBA’s “

Ethics in Brief Read More

By Richard Hendlin Read More

By Jennifer Gilman

I, like millions of others, have a Facebook account.  I’m responsible with it, as all attorneys should be, and always make sure it passes the “eyebrow test.”  That is, I review all messages before posting to be sure that if my boss, my parents, my rabbi, a judge, the State Bar, my frenemy, and my ex-boyfriend all read the post, none of them would raise an eyebrow.

The other day, my friend Juanita posted, “Today is a great day!  I feel like one of those bozos on car insurance commercials.  I’m about to save $3k a year to switch car insurance policies!  See ya, Highrate Indemnity, Inc.!  You’re way too expensive for my blood.”

(“Highrate Indemnity, Inc.” is a pseudonym.  Obviously.)

Dean, a mutual attorney friend, commented on Juanita’s post: “Please make sure that you are not contracting with a company that is underinsuring you.  You don’t want a company that will just slash your coverage and get rid of your UIM.  You are more important than any money you might save on good coverage.”

I groaned internally.  Was Dean giving legal advice and practicing law online?  Here are the thoughts that ran through my head:

It was unlikely that Juanita was represented by counsel regarding her switch from insurance companies, and she had made no mention of a car accident or lawsuit, so she probably isn’t a represented individual covered by Rule 2-100.  However, California Business and Professions Code § 6068(d) nonetheless imposes a duty to be honest with unrepresented parties.  It provides that it is the duty of a California State Bar member “to employ for the purposes of maintaining the causes confided to him or her, those means only as are consistent with truth…”

I know that Dean and Juanita both live here in California; Dean is a member of the California State Bar and does not practice law in other jurisdictions.  He probably doesn’t have to worry about the unauthorized practice of law in violation of 1-300(B).  But what about those who might be reading the public post in a different jurisdiction?  If insurance policies operate differently in other jurisdictions, could Dean be subject to discipline?

Dean’s communication was completely unsolicited. Rule 1-400 defines and regulates “communication” and “solicitation.”  Communication refers to “any message or offer made by or on behalf of a member” regarding employment that is directed to a prior, current, or potential client.  Does Dean’s comment rise to the level of a communication under this rule?

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