Today we started to discuss conflicts of interest in my class. As we tried to define the concept I asked the students if it makes sense to talk about "potential conflicts" and tried to get them to understand that having a conflict is, in and of itself, a violation of a duty to the client.
Interestingly, over at the Legal Ethics Forum, four law professors recently exchanged views on this. NYU's Stephen Gillers started it off by using an example from journalism ethics saying that "if there is an appearance of a conflict there is an actual conflict. If the reporter succumbs to the conflict by favoring the clients of the speakers bureau, that's not a conflict. It's a breach of trust." Also, Hofstra's Monroe Freedman commented on the shameful way courts approach conflicts in criminal cases Read the rest of the conversation here.
Friday, September 30, 2011
Indiana Supreme Court on the reasonableness of a contingency fee
A few days ago, I spent some time discussing contingency fees with my students. Among other things, we talked about whether the reasonableness of a contingency fee should be evaluated based on the terms of the agreement, the circumstances at the time the agreement is reached, the end result (the amount recovered) or a combination of all of them.
Just a day too late for our discussion, but almost right on cue, the Legal Profession blog is reporting today on a new case in which the Indiana Supreme Court imposed a suspension of at least 120 day for "misconduct by collecting a clearly unreasonable and exploitive [contingecny] fee."
In this case, a client approached a recently admitted attorney [which is relevant since the rules list the lawyer's experience as one of the factors used to evaluate the reasonableness of a fee] asking for help to get access to money that was in a trust. The lawyer agreed to help based on a contingency agreement. Another lawyer who had been serving as the trustee of the trust agreed to resign as trustee, and the new lawyer took over. After the transition, the new lawyer paid himself one-third of the funds held in trust, nearly $15,000. The client got nearly $30,000, which presumably was quickly spent.
The trust had been created to protect the client and "to prevent rapid depletion by [the client's abusive, substance abusing boyfriend]."
In support of the view that a contingency fee should be evaluated based on the circumstances at the time of the agreement, the court emphasized that a contingent fee is not unreasonable "every time a case turns out easier or more lucrative than contemplated by the parties at the outset."
However, the court added that a fee that is not unreasonable at the outset may become unreasonable in light of later developments:
Just a day too late for our discussion, but almost right on cue, the Legal Profession blog is reporting today on a new case in which the Indiana Supreme Court imposed a suspension of at least 120 day for "misconduct by collecting a clearly unreasonable and exploitive [contingecny] fee."
In this case, a client approached a recently admitted attorney [which is relevant since the rules list the lawyer's experience as one of the factors used to evaluate the reasonableness of a fee] asking for help to get access to money that was in a trust. The lawyer agreed to help based on a contingency agreement. Another lawyer who had been serving as the trustee of the trust agreed to resign as trustee, and the new lawyer took over. After the transition, the new lawyer paid himself one-third of the funds held in trust, nearly $15,000. The client got nearly $30,000, which presumably was quickly spent.
The trust had been created to protect the client and "to prevent rapid depletion by [the client's abusive, substance abusing boyfriend]."
In support of the view that a contingency fee should be evaluated based on the circumstances at the time of the agreement, the court emphasized that a contingent fee is not unreasonable "every time a case turns out easier or more lucrative than contemplated by the parties at the outset."
However, the court added that a fee that is not unreasonable at the outset may become unreasonable in light of later developments:
...Respondent may have reasonably believed at the outset that removing Ross as trustee would be contested (despite documentation indicating Ross was willing to step aside in favor of a qualified successor). He may have even reasonably questioned the amount of money in the trust upon which his fee would be calculated and collected (despite documentation that $42,500 had been deposited in it just a few months earlier). But within two or three days, Ross agreed to resign as trustee in favor of Respondent, and Respondent had assumed control over the trust, knew the balance in the trust account, had gained access to those funds, and had cut himself a check for his fee. At this point, he knew the case did not involve any complex issues, prolonged time commitment, risk of no recovery, or even any opposition.The case is called In the Matter of Powell and it is available here.
Thursday, September 29, 2011
IL amends rules on CLE
The Illinois Supreme Court has amended some of the rules regarding Continuing Legal Education for Illinois attorneys. Go here for more information.
Tuesday, September 27, 2011
Cash for kids judge sentenced
On Friday, Pennsylvania judge Michael Conahan was sentenced to 17.5 years in prison for his role in the cash-for-kids scandal. Conahan and judge Mark Ciavarella Jr. were accused in 2009 of sending teenagers to privately run youth detention centers in exchange for kickbacks from the builder of the detention facilities. Ciavarella, was sentenced in August to 28 years in prison. For more, go here.
Supreme Court grants review of case on attorney immunity
The Supreme Court announced this morning that it will review a case on "whether a lawyer retained to work with government employees in conducting an internal affairs investigation is precluded from asserting qualified immunity solely because of his status as a “private” lawyer rather than a government employee." The case is called Filarsky v. Delia.
In this case, the District Court found the attorney was protected by qualified immunity, but the Court of Appeals for the Ninth Circuit reversed. The opinion of the Court of Appeals is available here. For all the documents filed before the Supreme Court go here.
For more on some surprising announcements by the Supreme Court today - on a different subject, go here.
Monday, September 26, 2011
Pro bono conversation questions of the week
The national pro bono celebration conversation continues this week with the following questions:
Some lawyers prefer to give money rather than their time and skill, and some legal services/pro bono organizations would also prefer this arrangement. Others favor both a monetary and personal commitment to pro bono work/legal services. How do you see this issue? What suggestions do you have?
Go here to join the conversation.
Some lawyers prefer to give money rather than their time and skill, and some legal services/pro bono organizations would also prefer this arrangement. Others favor both a monetary and personal commitment to pro bono work/legal services. How do you see this issue? What suggestions do you have?
Go here to join the conversation.
Recent disciplinary decisions in Illinois
The Illinois Supreme Court has announced 70 new disciplinary orders. The Court disbarred 12 lawyers, suspended 43, censured 10, remprimanded two and transferred three others to inactive disability status.
The disbarment orders were for misappropriation (5), charging unreasonable fees (3), failing to return unearned fees or retainers (3), unathorized practice of law in a different state (2), convictions for fraud/tax evasion (2) and dishonesty (1). The numbers add to more than 12 because some of the attorneys engaged in more than one of these examples of misconduct.
Go to Illinois Laywer Now (here) for details on all the cases.
The disbarment orders were for misappropriation (5), charging unreasonable fees (3), failing to return unearned fees or retainers (3), unathorized practice of law in a different state (2), convictions for fraud/tax evasion (2) and dishonesty (1). The numbers add to more than 12 because some of the attorneys engaged in more than one of these examples of misconduct.
Go to Illinois Laywer Now (here) for details on all the cases.
Oregon finds that convicted defendant can bring malpractice claim against lawyers for mishandling post conviction appeal
As I have discussed previously (more recently here, here and here), a majority of jurisdictions hold that a convicted criminal defendant does not have a right to sue his or her trial attorney for legal malpractice unless the plaintiff can show he or she was innocent of the crime.
In a slightly different type of case, the Oregon Supreme Court recently ruled, however, that a convicted criminal defense client need not obtain exoneration of the underlying offense before suing his or her lawyers. The case is called Drollinger v. Mallon, and it is available here. The case is slightly different because the plaintiff's allegation was that the lawyer was negligent in handling a post-conviction appeal. The court found that exoneration is not required in the post-conviction malpractice setting because the policies underlying the exoneration requirement in an action involving alleged trial malpractice do not apply to an action in which a client's failure to obtain post-conviction relief is the heart of the case.
In a slightly different type of case, the Oregon Supreme Court recently ruled, however, that a convicted criminal defense client need not obtain exoneration of the underlying offense before suing his or her lawyers. The case is called Drollinger v. Mallon, and it is available here. The case is slightly different because the plaintiff's allegation was that the lawyer was negligent in handling a post-conviction appeal. The court found that exoneration is not required in the post-conviction malpractice setting because the policies underlying the exoneration requirement in an action involving alleged trial malpractice do not apply to an action in which a client's failure to obtain post-conviction relief is the heart of the case.
ABA Committee on Professional Responsibility issues new formal opinion
The ABA Standing Committee on Professional Responsibility has issued a new Formal Opinion (No. 11-461 August 4, 2011) in which it discusses whether an attorney violates the "no contact rule" by helping a client communicate directly with another party that is represented by counsel.
The bottom line is essentially this: A lawyer may not communicate with a person the lawyer knows is represented by counsel unless that person’s counsel has consented to the communication or the communication is authorized by law or court order, and a lawyer may not use an intermediary to communicate directly with a represented person in violation of the “no contact” rule. On the other hand, it sometimes is desirable for parties to a litigation or transactional matter to communicate directly with each other even though they are represented by counsel. For this reason, since parties to a legal matter have the right to communicate directly with each other, a lawyer may advise a client of that right and may assist the client regarding the substance of any proposed communication. Such assistance may not, however, result in overreaching by the lawyer.
The full text of the opinion is available at the ABA's Center for Professional Responsibility website here or here.
The bottom line is essentially this: A lawyer may not communicate with a person the lawyer knows is represented by counsel unless that person’s counsel has consented to the communication or the communication is authorized by law or court order, and a lawyer may not use an intermediary to communicate directly with a represented person in violation of the “no contact” rule. On the other hand, it sometimes is desirable for parties to a litigation or transactional matter to communicate directly with each other even though they are represented by counsel. For this reason, since parties to a legal matter have the right to communicate directly with each other, a lawyer may advise a client of that right and may assist the client regarding the substance of any proposed communication. Such assistance may not, however, result in overreaching by the lawyer.
The full text of the opinion is available at the ABA's Center for Professional Responsibility website here or here.
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