By Edward McIntyre
California’s new Rules of Professional Conduct went into effect November 1, 2018. This article will examine some of the ethical considerations of Rule 1.5 (Fees for Legal Services) and discuss some of the best practices for compliance.
By Alara Chilton
California’s new Rules of Professional Conduct went into effect November 1, 2018. This article will examine some of the ethical considerations of Rule 1.5 (Fees for Legal Services) and discuss some of the best practices for compliance.
By Edward McIntyre
Macbeth, Duncan and Sara were enjoying a celebratory toast at the Red Coach & Horses when MacTavish, drink in hand, joined them.
“Have you guys seen the news about that major law firm. Had its computer network hacked? Massive embarrassment, for sure.”
Duncan nodded. “I understand the FBI divides law firms into two kinds. Those that’ve been hacked — and those that will be.”
MacTavish laughed and sipped his scotch.
Macbeth cautioned, “Not sure I find much mirth in their misfortune. Not only embarrassing. They have to confront a myriad of liability issues. And think of the ethics nightmare.”
MacTavish looked surprised. “Ethics? How so?”
“Have you looked at the new and revised Rules of Professional Conduct? The ones that just became effective on November 1?”
“Not yet. On my to-do list. But —”
“When you get around to it, take a hard look, for example, at rule 5.1. It’s new in California. We’ve never had anything like it before.”
“What’s it about?”
“It imposes on lawyers with law firm management authority the obligation to ensure that the firm has in effect measures that give reasonable assurance that all the firm’s lawyers comply with the rules. And with State Bar Act.”
“Seems like a bit of an overreach, but —”
“It also requires lawyers with supervisor authority over another lawyer to make sure that lawyer does the same. Rule 5.3 applies the same obligations to the supervision of non-lawyer personnel, whether employees or not.”
“But what’s all that got to do with a computer hack?”
“I assume we agree that, as lawyers, we possess a vast trove of sensitive and confidential client information. Financial data. Transaction and litigation strategies. Personal information. Perhaps health histories.”
“Sure. Necessary to the practice.”
“Rule 1.6 and 6068(e)(1) require us to hold client confidential information inviolate. At almost any cost.”
“New number, huh. OK, understand that.”
“Further, rule 1.1 requires competence, including — in this digital era — staying knowledgeable about the benefits and risks associated with technology.”
“Well —”
Macbeth held up his hand. “Finally, rule 1.4 requires lawyers keep clients reasonably informed about significant developments related to the representation.”
“All fine. But I was talking about a computer hack —”
Sara smiled as Macbeth nodded to a waiter for another round for the table.
“We were indeed. Let’s start with rules 5.1 and 5.3 — even before any computer breach occurs.”
“If you want.”
“Given the prevalence of cyberattacks, likely firm managers and supervisors have an ethical obligation to ensure the firm has adequate cyber protection already in place —current and updated — to prevent the loss of any client information that rule 1.6 requires the firm’s lawyers keep confidential.”
“Good thing I’m a sole practitioner —”
“A manager of your own firm, in other words.”
“Ouch.”
By Edward J. McIntyre
Resist the temptation of examining apparently privileged writing sent inadvertently by opposing counsel. Stop reading and return it to sender.
When an attorney receives a writing that appears to be confidential and privileged, the attorney has an ethical duty not to examine the writing any more than is essential to determine if it is privileged. Then, the attorney shall immediately notify the sender that he or she received material that appears to be privileged, and resolve the issue either by agreement or by seeking the court’s intervention. See Rico v. Mitsubishi Motors Corporation, 42 Cal.4th 807 (2007). The Supreme Court in Rico noted that “[a]n attorney’s obligation is not only to protect his client’s interests but also to respect the legitimate interests of fellow members of the bar, the judiciary, and the administration of justice.” Rico, 42 Cal.4th at 818.
The Rico court adopted the standard applied in State Compensation Insurance Fund v. WPS, Inc., 70 Cal.App.4th 644 (1999), the seminal California decision defining an attorney’s ethical obligations upon receiving another party’s inadvertently disclosed materials protected by the attorney-client privilege. Additionally, the Rico court extended the rule to writings protected by the attorney work product doctrine.
In a more recent opinion, the McDermott court clarified that the attorney’s ethical obligation to return the inadvertently disclosed writing does not only arise when the writing is inadvertently disclosed during discovery in litigation, but such ethical obligation arises regardless of how the lawyer obtained the inadvertently disclosed writing. McDermott Will & Emery LLP v. Superior Court, 10 Cal.App.5th 1083 (2017). The McDermott court also explained that the inadvertent disclosure of a writing protected by the attorney-client privilege does not waive the attorney-client privilege because such disclosure lacks the necessary intent to waive the privilege.
Likewise, in Ardon v. City of Los Angeles, 62 Cal.4th 1176 (2016), the California Supreme Court held that the governmental entity’s inadvertent release of privileged writings in response to a Public Records Act request does not constitute a waiver of the attorney-client or work-product privilege. The court explained that Government Code section 6254.5 which generally provides that disclosure of a public record waives any privilege applies to intentional and not inadvertent disclosure. The court noted that the legislative history of section 6254.5 explains it is intended to prevent selective disclosure, which is an intentional act and not an inadvertent disclosure.
The California Supreme Court has recently approved a new Rule of Professional Conduct on this issue. This underscores an attorney’s ethical obligations upon receiving another party’s inadvertently disclosed materials protected by the attorney-client privilege. California Rule of Professional Conduct, Rule 4.4, which will be effective on November 1, 2018, states:
Where it is reasonably apparent to a lawyer who receives a writing relating to a 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.
Rule 4.4 essentially codifies the case law precedents set out above. Further, the new Rule of Professional Conduct was approved by the California Supreme Court; as such a clear message is being articulated as to the proper handling of inadvertently disclosed privileged materials, whether obtained in the course of discovery or through any other means. It is therefore incumbent upon attorneys to properly, and ethically, react to inadvertently disclosed privileged writings. Resist the temptation they pose and return the privileged writings to sender.
is the San Diego Chief Deputy City Attorney.
By Michael Crowley
California attorneys are constantly reminded that the number one reason for complaints to the state bar about attorneys is the failure to respond to requests for information from clients. Why? Think about it.
Besides avoiding problems with the state bar by violating the California Rules of Professional Conduct, what does good communication do for you and your law practice?
We can’t control what the court will do. We can’t control what opposing counsel will do. We can’t control how events can change things. We can, however, control how often we pick up the phone to call a client or write an email. We can also strive to control how our staff interacts with our clients by making sure they are in the loop on the cases, including knowing deadlines and court appearances approaching.
Setting aside for the moment these considerations that likely just fall in the realm of good business practices (which by the way, failure to know good business practices is another high-on-the-list reasons for state bar complaints) what are the rules?
California Rules of Professional Conduct (CRPC) Rule 3-500 requires that we keep our clients “reasonably informed about significant developments relating to the employment or representation.” The rule goes on to state that this includes “promptly complying with reasonable requests for information and copies of significant documents when necessary . . .” (emphasis added).
Rule 3-510 requires the communication of settlement offers along with “all terms and conditions of any offer made to the client in a criminal matter; and all amounts, terms, and conditions of any written offer of settlement made to client in all other matters.” Again, the rules state this will be done “promptly.”
These communications must be made within the current rules. We all know that we must maintain our communications confidential. To drive this point home, both the Business and Professions Code 6068(e)(1) states we must “maintain inviolate the confidence, and at every peril to himself or herself to preserve the secrets, of his or her client,” and CRPC 3-100 restates it by referencing B&P §6068 and stating information can only be revealed with “informed consent of the client.”
In these days of hacking, cyber-thefts and malware we are responsible for taking reasonable steps toward preserving our client’s confidential communications. One step is discussing it with your client and placing it in your retainer agreement that your client’s emails are not always confidential. For example, the use of a company email when the company’s policies allow for their access to employees’ emails calls for your client to set up a separate email for you to communicate with the client confidentially.
We all have experienced pesky and annoying clients. But the rules don’t provide an exception as to those clients. Seldom does procrastination as to your communication make it any better. The rules require your “prompt” communications with your client, good business practices dictate it and avoidance of state bar problems make it an excellent practice. We should all endeavor to lower the lack of communication from the top reasons for state bar complaints.
Michael Crowley is the Founder and Lead Attorney of the Crowley Law Group.
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.**
A good friend asked me to lecture to her business ethics class at San Diego State University, mostly juniors and seniors. During class, she would mark the 54 students on “participation,” so I quickly scrapped the “lecture” idea. Instead, the class at large — from scratch and without advance acquaintance with our Rules of Professional Conduct — would develop a set of ethics rules for a profession. Lawyers. In little more than an hour.
We started with some context: what lawyers do. The assumptions were: lawyers represent clients before tribunals; they counsel clients; they deal with non-client third parties on clients’ behalf.
With only this brief context — and perhaps material they had read for the course, and their own experience and ethical norms — the students addressed the question: What do you expect of your lawyer, focusing only on ethical standards?
First, Confidentiality.
This was the immediate and spontaneous response to the question. All who contributed to the discussion thought confidentiality was a key ethical requirement. What you say to your lawyer had to stay with that lawyer. Much later in the class, when we discussed the confidentiality mandates and exceptions in Business and Professions Code Section 6068(e) and ABA Model Rule 1.6, reactions were mixed. More about that below.
Next, Fair Fee.
I was surprised that this was the second ethical norm the class developed. Not only did participants think that fair fees were an important ethical component of the lawyer-client relationship, but also that the lawyer had to be efficient in delivering services — a corollary to a fair fee.
Loyalty.
The class wanted a lawyer who would represent their interests, no matter what conduct was involved, and not to judge the client. Rather, they wanted a lawyer who was devoted solely to the client’s best interest. They also wanted a lawyer who could focus on what was best for the client, no matter who the client was.
Conflict-Free Representation.
Another element of the relationship important to the class was that the representation be without conflict of interest — either with some other client or with the lawyer’s own interests.
Candor to the Client.
All who chimed in saw candor as important, as well as communication from their lawyer. In this context, they not only did not want a lawyer to misrepresent facts to them, but they also wanted a lawyer who was not afraid to deliver, honestly, uncomfortable or bad news.
Candor to the Tribunal.
A few saw this norm as important for the judicial system to function, but they emphasized that such candor had to be subordinate to the obligations of confidentiality and loyalty to the client. Confidentiality and loyalty remained the predominate ethical norms.
Competence.
The class thought competence was not just an important behavioral aspect of a lawyer’s representation, but also a lawyer’s ethical obligation. As the discussion of this norm continued, diligence and communication became part of the element of competence.
Ethical Reputation.
Several in the class said, and the balance appeared to agree, that a lawyer had an ethical obligation to maintain her or his reputation as an ethical lawyer in the community. As one student offered: “I don’t want to hire a lawyer and find out two months later that he’s been arrested for drug dealing or disciplined for misconduct. I want someone who’s known to be ethical.”
Confidentiality Revisited.
Toward the end of the class, I shared with them, Section 6068(e)(1)’s strict mandate — at every peril to herself or himself — and the permissive exception of Section 6068(e)(2). The reaction was mixed whether a lawyer should disclose a client confidence even to prevent the death or serious bodily injury of a third party, using a variant of the Tarasoff facts to provoke the discussion.
We then looked at ABA Model Rule 1.6, which has a permissive exception to confidentiality to prevent serious financial harm to another when the client is using the lawyer’s services to cause that harm. We used the Enron case as an example.1 Most of the class felt no disclosure was the proper ethical norm when only financial harm was at stake.
One interesting exception: a student who thought there should be no exception with the Tarasoff facts — threatened death of a girlfriend — saw a basis for the ABA Model Rule exception when the serious financial harm would affect many people. We agreed it would be better to be his broker than his girlfriend!
Sex With Clients.
As promised at the outset, we had the conversation first and saved sex until last. The scenario was a 38-year-old lawyer who agrees to represent a 19-year-old “Dreamer” college student pro bono, and says he has creative strategies to deal with DACA; over time he invites her to dinner, the theater and eventually his Mission Hills condo where they engage in consensual sex.
The overwhelming majority of the class thought this was ethically wrong.2 As one student put it: “If he wants to continue the relationship, he should get her another lawyer who can represent her.”
Unfortunately, time came for class to end. The experience, however — a group of smart, articulate, thoughtful college students — sheds a bright light on the ethical standards our clients and the public in general may expect from us.
Edward McIntyre (edmcintyre@ethicsguru.law) is an attorney at law and co-editor of San Diego Lawyer.
This article was originally published in the May/June 2018 issue of
San Diego Lawyer
Creed-21 v. City of Wildomar, 2017 WL 5484032,provides salient reminders regarding complying with local rules, scheduling depositions and most importantly, complying with court orders to avoid sanctions. The case also implicates the ethical duty of competence in managing one’s schedule, even when emergencies may arise.
The underlying case involved Creed-21’s challenge to a proposed Wal-Mart based on the California Environmental Quality Act (CEQA). The appellate court upheld a terminating sanction imposed after Creed-21 failed to comply with court orders requiring the deposition of a person most qualified (PMQ) regarding Creed-21’s standing in the case. The deposition, first noticed in August 2015 for September 2015, triggered objections as to the propriety of the discovery. The proponent’s efforts to resolve the dispute failed in part because Creed-21’s lead counsel Briggs was in trial. Ultimately, Briggs invited a motion to compel, or offered to file a motion for protective order.
In November, a motion to compel the PMQ deposition was filed. The court granted the motion, and awarded $3,000 in sanctions. An ex parte application seeking relief from the court’s order followed claiming that counsel for Creed-21 was not aware of the local rule requiring that he provide notice of appearance by telephone or in person, rather than via email. Wal-Mart argued that lack of knowledge of the local rules was “professional incompetence and not a mistake that justified relief.” At the hearing, attended by Creed-21’s attorney Kim, the court also directed that the deposition be scheduled on February 8, despite being informed by Kim that Briggs, who intended to defend the deposition, had a family emergency. The court indicated if that date did not work, any ex parte application would need to demonstrate good cause for another continuance.
A petition for writ of mandate concerning the appropriateness of the discovery was summarily denied on February 5. An ex parte application followed to continue the deposition asserting that Briggs, an only child whose parent had undergone surgery, was needed to care for his parent for three weeks, and unable to work. Wal-Mart opposed, noting the five month lapse of time and pending briefing deadlines, and claiming attorney Kim could handle the deposition. The court denied the relief, suggesting a caregiver could watch Briggs’ parent so he could handle the deposition. Still the deposition did not go forward in Briggs’ absence. Upon his return to work, Briggs offered a deposition date one business day prior to the briefing deadline. Too late Wal-Mart said.
The court then granted Wal-Mart’s motion for terminating sanctions for willful failure to obey the trial court’s earlier orders to produce the PMQ, noting Briggs not only failed to produce the PMQ witness, but also failed to produce documents related to the deposition, and had not paid the sanctions. The judge indicated, “Nothing had worked,” including multiple orders and sanctions. On review, the appellate court found no abuse of discretion given the lack of compliance with the court’s directives.
Carole J. Buckner is a Partner and General Counsel at Procopio, Cory, Hargreaves & Savitch LLP.
An amendment to the California Evidence Code on mediation confidentiality will require attorneys representing clients in connection with mediation to provide written disclosures to their clients about mediation confidentiality beginning January 1, 2019.
California law and public policy provide that all communications that take place in anticipation of and at mediation are confidential. “To carry out the purpose of encouraging mediation by ensuring confidentiality, the statutory scheme . . . unqualified bars disclosure of communications made during mediation absent an express statutory exception.” Even after mediation ends, communications and writings protected by the statutes are to remain confidential.
The restrictions on disclosure of mediation communications has been vigorously debated following the California Supreme Court’s decision in Cassel v. Superior Court (2011) 51 Cal.4th 113 confirming the broad scope of mediation confidentiality in holding a party to a mediation may not use confidential information obtained in the mediation to sue his or her attorney for alleged legal malpractice occurring at the mediation. (Cassel v. Superior Court, supra, 51 Cal.4th 113, 128 [Evidence Code section 1119 extends to “oral communications made for the purpose of or pursuant to a mediation, not just to oral communications made in the course of the mediation.”])
Although the new amendment does not provide any exception allowing disclosure in malpractice or other lawsuits, it will attempt to ensure clients understand the restrictions on mediation communications before participating in mediation by providing that except “in the case of a class or representative action, an attorney representing a client participating in a mediation or a mediation consultation shall, as soon as reasonably possible before the client agrees to participate in the mediation or mediation consultation, provide that client with a printed disclosure containing the confidentiality restrictions described in Section 1119 and obtain a printed acknowledgment signed by that client stating that he or she has read and understands the confidentiality restrictions.” (Cal. Evid. Code § 1129 (a).) Subdivision (d) specifies the “disclosure” language deemed to comply with subdivision (a) if it is (1) “printed in the preferred language of the client in at least 12-point font”; (2) “printed on a single page that is not attached to any other document provided to the client”; and (3) includes “the names of the attorney and the client and be signed and dated by the attorney and the client.”
As stated, the written disclosure must be provided “as soon as reasonably possible before the client agrees to participate in the mediation or mediation consultation…” Given the prevalence of mediation in civil litigation, providing the written disclosure sooner than later to allow for client inquiries is in the best interests of both the client and practitioner.
Andrew Servias is an attorney at law.
**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.**
With the November 1, 2018 effective date for California’s new Rules of Professional Conduct fast approaching, you may be wondering how new Rule 1.1 [Competence] and new Rule 1.3 [Diligence] will affect your practice. How do these rules differ from one another and what do they require of practitioners? Here is a brief look at what attorneys need to know about these two new rules.
New Rule 1.1 Will Replace Rule 3-110
Rule 1.1 [Competence] will replace current Rule 3-110 [Failing to Act Competently]. This new rule states “[a] lawyer shall not intentionally, recklessly, with gross negligence, or repeatedly fail to perform legal services with competence.” (Rules of Prof. Conduct, New Rule 1.1(a).)
With the exception of the phrase, “with gross negligence,” Rule 1.1 keeps the text of Rule 3-110(A) unchanged in order to maintain California’s longstanding legal standard of barring “intentional, reckless or repeated acts of incompetence.” (Executive Summary for Proposed Rule 1.1, State Bar of California Commission for the Revision of the Rules of Professional Conduct (Feb. 2016).)
Under new Rule 1.1(a), attorneys may now be disciplined for a single act of gross negligence. This new Rule 1.1 adds the phrase, “with gross negligence,” in order to distinguish an act of “ordinary negligence.” Indeed, many State Bar Court decisions have declined to find that a single act of negligence amounts to a violation of Rule 3-110(A). (See In Matter of Riley (Rev. Dept. 1994) 3 Cal. State Bar Ct. Rptr. 91, 97 [failure to pay client’s medical bill constituted negligence and not failure to act competently].) (See also In Matter of Respondent
P (Rev. Dept. 2000) 2 Cal. State Bar Ct. Rptr. 622, 633;
