Conflicts – More Than Just Adverse Parties

The State Bar of California just released two separate and sobering reports about its own failure to open any public discipline investigation of Los Angeles attorney Thomas Girardi, despite more than one hundred complaints against him between 1982 to January 2021. These reports highlight not only failures at the State Bar, but also underscore the need to carefully consider a sometimes-overlooked aspect of the conflict-of-interest rules.

Attorney Alyse Lazar authored the first report, which summarized her audit of all closed discipline files for complaints to the State Bar about Girardi. A redacted copy of Lazar’s report is available here.

The second report, based upon an independent investigation by the Halpern May Ybarra Gelberg firm, examined whether Girardi’s connections or influence at the State Bar affected the State Bar’s handling of past discipline complaints against him. That report is available here.

As a matter of background, the Office of Chief Trial Counsel (OCTC), headed by the State Bar’s Chief Trial Counsel, is the State Bar’s principal discipline investigator. It is charged with investigating and prosecuting complaints of lawyer misconduct. When, OCTC has a conflict of interest — for example, a complaint against a lawyer at OCTC or a member of the Board of Trustees — the Chief Trial Counsel must recuse OCTC. The matter is then referred to an independent lawyer not associated with the State Bar, a Special Deputy Trial Counsel (SDTC).

The Lazar audit examined the extent to which OCTC lawyers and SDTC met their responsibilities when they closed complaints against Girardi without public discipline or prosecution. Her audit of case files did not uncover any improper influence by Girardi on either OCTC lawyers or SDTC.

However, Lazar noted the files she reviewed did not provide sufficient information for her to determine if Girardi’s celebrity status or his giving of financial gifts or other benefits improperly influenced OCTC staff or a SDTC into closing valid cases or not thoroughly investigating complaints. Moreover, the audit found numerous errors at OCTC and by SDTC that resulted in closing cases without an adequate investigation. In some instances, these cases involved misconduct that should have been prosecuted.

The Halpern May investigation went further. It examined the conduct not only of lawyers at OCTC and SDTC, but also the conduct of members of the State Bar executive staff and its Board of Trustees during the period the State Bar closed complaints against Girardi. The Halpern May report found that the State Bar’s handling of past discipline complaints against Girardi was more likely than not affected by his connections and influence at the State Bar.

Multiple State Bar insiders did not properly disclose their connections to, or financial support or other gifts from, Girardi, including employees who dealt directly with Girardi discipline cases. The report details many instances where State Bar executives or Board members received favors from Girardi, or had relationships with him, that likely compromised the State Bar’s examination of his conduct for an extended period.

Given the State Bar’s stated duty to protect the public, the courts, and the legal profession; to protect the integrity of the legal system; and to promote the administration of justice and confidence in the legal profession, the Lazar and Halpern May reports demonstrate the State Bar faces a monumental task if it is to restore confidence in its ability to regulate and discipline members of our profession. Only time will tell whether, or to what extent, any of us may experience repercussions from those failures.

There is, however, a second lesson the Halpern May report underscores. We are all conscious that we cannot represent clients with adverse interests, either in the same matter or even different matters, without the informed written consent of all clients. The conflict-of-interest rules — Rules 1.7 (current clients); 1.9 (former clients) and 1.8.1 (business transactions with clients) — prohibit such conflicted representations.

Rule 1.7, however, goes further. Rule 1.7(b) also prohibits the representation of a client, absent informed written consent, if (1) responsibility to or a relationship with another client; or (2) responsibilities to or relationships with a former client or third person; or (3) our own personal interests will materially limit that representation.

Although the State Bar may not have been a “client” of the executives and Board members whose conduct the Halpern May report identified, they nonetheless owed the State Bar a fiduciary duty, such that the duty of loyalty and the Rules of Professional Conduct applied to their actions. (See, In the Matter of Schooler (Review Dept. 2018) 5 Cal. State Bar Ct. Rptr. 494, 503.)

The Halpern May report highlights for each of us that, when undertaking the representation of a client, or taking on a new matter for an existing client, we must first ask: do I have a relationship with anyone that may materially limit my ability to represent this client? Do my own interests materially limit the ability to represent this client with unfaltering loyalty? If so, I must disclose such limitations to the client and get the client’s informed written consent.

These may not be easy questions to consider. They necessarily require substantially greater personal exploration than a traditional conflict-of-interest analysis. The Halpern May report, however, underscores that they are at the heart of the duty of loyalty we owe each client, and that each deserves and expects.