The Debate Finally Begins
	To Return Or Not To Return That Telephone Call?
	If You Did the Deal, You May Want To Refer Out The Litigation.
	Avoiding Conflicts With The Client’s Consent
	Links and Quick Takes

---

---

Ethics and Lawyering Today, an email newsletter published by William Freivogel and Lucian Pera, delivers pithy, practical updates for lawyers on the many ethics rules and other laws that govern how lawyers practice today. Subscriptions are free, and you can visit our website to subscribe. Feel free to pass on this email to anyone you think might be interested.

The Debate Finally Begins

ETHICS 2000: ABA House Debate on Model Rule Changes Starts

At a meeting in Chicago last week, the 532-member ABA House of Delegates began the debate on the final proposals of ABA Ethics 2000, the 13-member Commission (of which Lucian Pera is a member) that has labored for four years considering revisions to the ABA Model Rules of Professional Conduct.

The proposed amendments were, by and large, well received by the House, with many changes being tentatively approved without opposition. The House considered and tentatively approved all of the Commission’s proposed changes from the Preamble and Scope provisions through Model Rule 1.10, with significant debate on the following items:

Rule 1.5 - The House rejected the Commission’s proposal to require writings for most fee agreements, sticking with the "preferably in writing" language of the current Rule.

Rule 1.6 - By a six-vote margin, the House voted to approve E2K’s proposal to amend 1.6(b)(1) to permit disclosure of client confidences to prevent reasonably certain death or substantial bodily harm, broadening this grounds for disclosure under the Model Rule. By contrast, the House voted by a wide margin to defeat E2K’s proposed 1.6(b)(2), which would have permitted lawyers to disclose client confidences to prevent future crimes or frauds threatening substantial financial loss if the lawyer’s services had been used to perpetrate the crime or fraud. The repeated argument that 41 jurisdictions already have a form of proposed 1.6(b)(2), including many jurisdictions where opponents were licensed, was not at all persuasive. Sensing the direction of the House’s votes, the Commission withdrew its similar proposed 1.6(b)(3), which was similarly addressed to the prevention or mitigation of future harm from completed crimes or frauds involving the lawyer’s services.

Rules 1.7 and 1.9 - In addition to accepting an extensive rewrite of the black letter and Comment to the main conflicts rule, the House decisively rejected an attempt to delete the Commission’s proposal that all conflict waivers be in writing. At least one delegate distinguished the fee-agreement writing requirement and the conflict-waiver writing requirement, and the House clearly bought this distinction.

Rule 1.8(j) - Though the House came within six votes of relegating the prohibition to the Comments, the body subsequently overwhelmingly approved the Commission’s proposed ban on sex with clients.

Rule 1.10 - Confounding those who had suggested that the House was so heavily influenced by large law firms that E2K’s proposal to permit screening for lateral would sail through, the House flatly rejected lateral screening.

Scheduled to spend four hours of its two-day session on Ethics 2000, the House actually chose to spend more than five hours, clearly indicating its interest in the subject matter and its desire to work through the proposals without unneeded delay.

For the official version of the Chicago proceedings, see:

http://www.abanet.org/cpr/e2k-summary_2001.html

The House will take up the proposals again at its meeting in early February 2002 in Philadelphia, and the expected hot debate items include:

Rule 1.18 - E2K’s proposed new rule concerning duties to prospective clients is expected to raise afresh the issue of screening.

Rule 3.3 - More on confidentiality and candor.

Rule 4.2 - The controversy over E2K’s proposed addition of "or court order" to the Rule and tinkering with some comments.

Rule 5.5 - E2K’s attempt to make progress on the multi-jurisdictional practice front with a "safe-harbor" approach may be the hot number in Philly. Stay tuned to also hear from the ABA MJP Commission, whose preliminary report is due out in November.

The House’s procedures for consideration of the proposals will almost certainly permit reconsideration in Philadelphia of votes taken in Chicago last week. None of the Chicago votes are effective in changing the Model Rules until consideration of all of Ethics 2000’s proposals is complete, which now appears likely to occur in Philadelphia.

To Return Or Not To Return That Telephone Call?

CONFLICTS: Two Courts Struggle With Problems Arising from Initial Interviews

In Knigge v. Corvese, 2001 U.S. Dist. LEXIS 10254 (S.D.N.Y. July 23, 2001), the defendant attempted to hire a lawyer. He could never reach the lawyer directly, so he left several messages on the lawyer’s answering machine. The lawyer never responded to the messages and eventually turned up representing the plaintiff. The defendant moved to disqualify the lawyer. The court denied the motion, holding that the defendant never became a client and did not disclose confidential information in the voice messages.

Knigge v. Corvese, 2001 U.S. Dist. LEXIS 10254 (S.D.N.Y. July 23, 2001)

In Clark Capital Mgmt. Group v. Annuity Investors Life Ins. Co., 2001 U.S. Dist. LEXIS 9313 (E.D. Pa. July 6, 2001). The defendant’s lawyer contacted Biemer, a partner at Dilworth Paxson about becoming local counsel for the defendant. They had several telephone conversations about the facts and strategy. Dilworth was not hired. Friedman, another partner at Dilworth, later appeared as counsel for the plaintiff. Defendant moved to disqualify Dilworth. The district court denied the motion, finding that, because the defendant did not actually hire Dilworth, the defendant was not a "former client." The court noted in passing that, if defendant had been a former client, this was the "same" matter in which Dilworth would have represented the defendant, and Dilworth would have been disqualified. Nevertheless, the court was concerned that Biemer might have received confidential information from the defendant during the initial telephone conversations. The court ruled that Dilworth could stay in the case on the condition that it set up a screen between Biemer and the rest of the firm. Screening in this context is consistent with Section 15 of the Restatement Third, The Law Governing Lawyers, and this is also the approach taken in proposed Rule 1.18 offered by the ABA Ethics 2000 Commission. ABA Formal Opinion 90-358 would not allow screening to save the entire law firm from disqualification.

Clark Capital Mgmt. Group v. Annuity Investors Life Ins. Co., 2001 U.S. Dist. LEXIS 9313 (E.D. Pa. July 6, 2001)

If You Did the Deal, You May Want To Refer Out The Litigation.

MALPRACTICE: Litigating Disputes in Which the Lawyers Did Work

An Illinois appellate court recently offered a heart-breaking example of what Bill Freivogel refers to as the "underlying work syndrome," where a lawyer, now deceased, chose not to refer litigation arising from the firm’s prior transactional work. In NC Illinois Trust Co. v. First Illini Bancorp, Inc., 2001 Ill. App. LEXIS 441 (Ill. App. June 15, 2001), the lawyer advised a bank/trustee on selling a business partially owned by the trust. When the purchaser sued the bank/trustee for fraud for financial misrepresentations, the same lawyer defended the bank/trustee. He lost the case, and his estate has now been sued.

NC Illinois Trust Co. v. First Illini Bancorp, Inc., 2001 Ill. App. LEXIS 441 (Ill. App. June 15, 2001)

For more on this case and on the syndrome, see Bill’s site under "Underlying Work" at:

http://www.freivogelonconflicts.com

Avoiding Conflicts With The Client’s Consent

CONFLICTS: Permissible Limitations on the Scope of a Representation to Avoid Conflicts

Suppose you want to represent a client in litigation. You discuss with the client that it is possible that another firm client might need to be added to the litigation later. In a helpful recent opinion, the Association of the Bar of the City of New York, in Formal Opinion 2001-3, declares that a sophisticated client may agree that, in such event, you may continue in the case if another law firm is retained to handle issues relating to the other client. The opinion discusses a number of scenarios where such an agreement would be helpful. In passing, the committee makes the following statement:

If, for example, two businesses were competing for the same Government contract, and each engaged the same lawyer to prepare bids, Rule 1.7(a) would surely be applicable.

The Association of the Bar of the City of New York, Committee on Professional and Judicial Ethics, Formal Opinion 2001-3 (undated)

For more on this latter concept, see the section on "Zero Sum Games" at Bill’s site at:

http://www.freivogelonconflicts.com

LINKS AND QUICK TAKES

SECRET TAPING: ABA Issues New Opinion Reversing Its Long-Held Ban

On June 24, 2001, the ABA Standing Committee on Ethics and Professional Responsibility issued Opinion 01-422, reversed its 1974 Opinion holding that secret tape recording by lawyers was deceitful and thus banned by the ethics rules. The Committee opined that "the mere act of secretly but lawfully recording a conversation inherently is not deceitful." Still, the opinion warns that many states have laws prohibiting such conduct, and that lawyer statements concerning taping (e.g., falsely denying that a conversation is being recorded) can still get a lawyer disciplined. The Committee split on the opinion’s applicability to client-lawyer conversations. Unfortunately, ABA opinions remain unavailable on the web.

INDEMNIFICATION: Lawyers May Seek and Receive Client Indemnity

Although both Oregon DR 6-102(A) and Model Rule 1.8(h) put severe limitations on the ability of lawyers to seek client agreements prospectively limiting lawyer liability to the client, a new Oregon ethics opinion helpfully identifies an area apparently not covered by the prohibition. The facts in this opinion were that a client had asked a law firm to investigate possible employee fraud, which could have lead an employees’s termination. Concerned that the terminated employee might sue the law firm, the firm asked the client to agree to indemnify the law firm from such a claim. The committee opined that, because the law firm was not seeking a release of claims by the client, the indemnification agreement was permissible.

Oregon State Bar Legal Ethics Committee Formal Opinion 2001-165 (June 2001).

GRAMM-LEACH-BLILEY ACT: It’s Not Going Away Quickly

This newly-effective federal privacy statute continues to provoke concern and controversy.

As reported in our last edition, most lawyers had no clue that the Act might apply to them until a few weeks (or days) before July 1, when significant notice provisions of the Act kicked in.

Now, the ABA and the New York State Bar Association have taken up the battle for lawyers, each recently asking the Federal Trade Commission to authoritatively interpret the Act to exempt lawyers:

http://www.abanet.org/poladv/letters/exec/privacy071001.html

http://www.nysba.org/media/newsreleases/2001/ftc.html

Also, one of the authors saw a new twist during a very recent hearing on a motion to disqualify. Under questioning on the stand, the former client of the law firm fighting the disqualification motion testified roughly as follows:

Q: So, Mr. Former Client, virtually all of the work that my partner performed for your company was concluded in 1998, with another hour or so of work done by him last year, all well before the facts that give rise to this lawsuit even happened, right?

A: I believe that’s correct. But apparently your firm still thinks we’re a client, since I just got some privacy notice from you the week before last addressed to the company as "Dear Client."

Well . . . . what can you say to that? All we can say is, file it away in the More-Things-To-Worry-About folder, and consider all ways you deal with former clients that may give them the impression (and suggest to a court) that you’re still their lawyer. And maybe that’s why so many firms send out newsletters and notices headed, "Dear Clients and Friends."

JUDICIAL ETHICS: Microsoft Plays the Judge Jackson Card Before the Supremes

In a little-noticed angle on the endless Microsoft litigation, the software behemoth is pursuing a fascinating U.S. Supreme Court strategy. On August 7, 2001, Microsoft petitioned the high court to accept certiorari, presenting only one question: "Whether the court of appeals erred in not disqualifying the district judge as of the date of his earliest known violation of 28 U.S.C. § 455(a) and the Code for Conduct of United States Judges, thus requiring that his findings of fact and conclusions of law be vacated." Judicial ethics and speech may now take center stage before the high court. For the petition, see:

http://www.microsoft.com/presspass/trial/appeals/08-07petition.asp

Ethics and Lawyering Today
Practical Information for Practicing Lawyers
http://www.ethicsandlawyering.com

Ethics and Lawyering Today, an email newsletter published by William Freivogel and Lucian Pera, delivers pithy, practical updates for lawyers on the many ethics rules and other laws that govern how lawyers practice today. Subscriptions are free, and you can visit our website to subscribe. Feel free to pass on this email to anyone you think might be interested.

THE USUAL DISCLAIMERS

This newsletter and the related website are copyrighted by William Freivogel and Lucian Pera. Any reproduction of Ethics and Lawyering Today, portions of this newsletter, or the website is permitted for non-commercial purposes, provided the reproduction contains our copyright notice and correct attribution to us. Needless to say, this newsletter and the site are for informational purposes only, do not constitute legal advice, and are certainly not intended to create any attorney-client relationship of any kind. You’ve been warned.

SUBSCRIBING
To subscribe, visit: http://www.ethicsandlawyering.com/subscribe.htm

UNSUBSCRIBING
To unsubscribe, send an email with the words UNSUBSCRIBE ETHICS in the body of the message to: Requests@ethicsandlawyering.com

CONTACTING US

We value your input tremendously. Send us your comments, criticisms, ethics cases (published and unpublished), ethics opinions, questions, or anything else of interest:

Ethics and Lawyering Today
Brinkley Plaza
80 Monroe Avenue, Suite 700
Memphis, Tennessee 38103-2467
Email: authors@ethicsandlawyering.com

To reach the authors, contact:

William Freivogel
Email: william@freivogel.com
Website: http://www.freivogel.com

Lucian Pera
Email: lucian.pera@adamsandreese.com

Back To Top

©2001 William Freivogel and Lucian Pera