Monday, February 28, 2011

How not to bill a client

Tomorrow in class I will start discussing issues related to fees. Right on cue, the website "Say what?!" - which tells funny but true stories of lawyers in Texas - posted this story:

[A lawyer from Houston] has clients who were engaged in a declaratory judgment action filed in another state. He asked outside counsel to conduct “an expansive review of possible jurisdictional issues related to this particular battle which included a number of non- U.S. business entities.” However, when he received the billing statement, he noticed the following provision: Per instructions ...., conduct an expensive search into any and all possible jurisdictional issues."

Monday, February 21, 2011

How not to practice law: advertise you have "associates" when, in fact, you don't

The Legal Profession blog is reporting on a new case involving a practice I have discussed before in this blog: the use of the phrase "and Associates" as part of a firm name when the firm has only one lawyer. There are a number of decisions out there that find this to be misleading and, thus, in violation of the rules of conduct.

The most recent case on this comes from Virginia where a three-judge court has imposed a suspension of 30 days followed by a year of probation. The case is available here. The attorney in question advertised his practice as himself "& Associates" when in fact he had a solo practice. To make matters worse, he also had a web page in which a non-attorney was presented as a member of the firm and in which he listed non-existent firm practice groups.

Obviously, this case involved more than the casual use of the phrase "and associates." This was a deliberate attempt to diceive the public. Given those circumstances, and the fact that there were other instances of conduct that violated other rules of conduct, I would have imposed a tougher sanction.

Sunday, February 20, 2011

How not to practice (criminal defense) law: decide for the jury whether your own client is guilty

In last week's episode of the TV show Harry's Law, the main character - Harriet - finds out during trial that her client is actually guilty. Having thought he was innocent all along, Harriet feels she can't continue to represent the client. She asks the judge for permission to withdraw and says to the judge that she will "tank" the case if she is forced to continue but the judge denies her request to withdraw. Harriet does tell the jury in no uncertain terms that her client did, in fact, kill the victim. The judge declares a mistrial and reports Harriet to the disciplinary authorities.

In a case of "life imitating art" (to the extent that "Harry's Law" is art), the Legal Profession blog is reporting on a case in which the Kansas Supreme Court has reversed a conviction based on very similar conduct by a criminal defense lawyer.

In this case, the lawyer told the judge that he thought a surveillance video depicted his client in the act of the crime. Given that the video was not clear, the court found the attorney "ignore[d] the separation of duties in a criminal prosecution", particularly the fact that the "duty as defense counsel [is] to advocate for his client, including the presentation of any truthful, relevant evidence that would assist in his client's defense." The court concluded that the attorney "exceeded the scope of his duties as defense counsel and invaded the province of the jury when he performed the fact-finding function of identifying the robber in the videotape as his client and, based thereon, made the determination that his client was guilty."

Wednesday, February 16, 2011

On the need to make sure the client knows the representation has ended

When discussing the formation of the attorney-client relationship in class, we talk about the Togstad case in which the relationship was formed out of a misunderstaning. I stress that it is very important for lawyers to be clear when they decide to reject a prospective client.

Having said that, I usually remind my students that it is equally important to be clear with current clients about when the representation actually ends.

A new case our of the Supreme Court of New York called McCann v. Manheimer, exemplifies this last point. In this case, the plaintiff filed suit for legal malpractice against her former attorneys. Defendant attorneys moved to dismiss arguing that the suit was barred by the applicable statute of limitations because it had been filed more than three years after the termination of the attorney-client relationship. Defendants alleged that the attorney-client relationship ended on October 28, 2005, at or around the time when they mailed a letter to plaintiff terminating the attorney-client relationship. Plaintiff, however, alleged that she never received the letter, and that she understood the attorney-client relationship continued through March, 2007. Despite New York law providing that a letter that has been mailed is presumed to have been received, the Court held that plaintiff had a raised a triable issue of fact and denied the motion to dismiss.

Conclusion: lawyers not only have to be clear as to when the representation ends; they have to make sure the message is received.

Thanks to the Legal Malpractice Law Review for the link

Monday, February 14, 2011

Indiana Supreme Court tries to clarify whether flat fees can be non-refundable

The Indiana Supreme Court has issued a short opinion on whether flat fees can be non-refundable. I have commented on the confused state of the law regarding this issue here and here. Also, I reported not too long ago that Tennessee and Minnesota have decided to allow non-refundable flat fees (here and here).

In the Indiana case, In the Matter of Heather McClure O'Farrell (available here), the court imposed discipline on an attorney for violating the rule that requires that fees be reasonable. Apparently, what made the fees unreasonable in this case was that they were non-refundable. But it is not as straightforward as that. The real problem was not that the fees were non-refundable, but that the attorney told the client they were non-refundable "no matter what."

In other words, the court suggests that a flat fee can be non-refundable as long as the task for which it pays is completed. What this means is that if the task is completed in less time than originally expected the attorney may keep the value of the time saved.

If the task is not completed, however, as when a client dismisses the attorney before the task is completed, the attorney must refund the portion of the fee that is "unearned."

On this last issue, the matter gets more complicated also since the court recognized that "we are not prepared to hold that some amount of a flat fee must be returned in all cases in which the attorney-client relationship ends before the work contracted for is completed."

In other words, there can be cases where the attorney may be justified to keep the fee even if the task is not completed.

So, are you keeping score? A flat fee can be non-refundable as long as there is nothing to refund; but if there is something to refund, it must be, unless there is a good reason not to. Easy.

And then, here is an interesting point. Given the specific facts of the question, the court found that there was no evidence to support the claim that the attorney had violated her duty to return unearned fees.

So, the attorney was disciplined for charging an unreasonable fee only that the fee was not unreasonable because it was non-refundable -since that is allowed - nor was it unreasonable because she did not refund it -since there was no evidence to prove that... Why was she disciplined for exactly then?

Thanks to the Legal Profession Blog for the update.

Wednesday, February 9, 2011

Top ten reasons to oppose mandatory CLE

A few days ago I reported that there is a petition pending before the Illinois Supreme Court asking it to revoke its rules requiring minimum continuing legal education. (See here) Today, in a letter to the editor published in the Chicago Daily Bulletin, the attorney who filed the petition lists the following "top ten" reasons to support the petition:

First, one simply cannot demonstrate that MCLE [madatory continuing legal education] enhances professional performance.

Second, one simply cannot demonstrate that MCLE has resulted in any benefit to the public, although touted to do so.

Third, one simply cannot demonstrate that MCLE is justified in terms of the time and expense required to meet compliance requirements.

Fourth, in purporting to comply with the requirements imposed by the various jurisdictions, participants often cheat or falsify compliance reports.

Fifth, instructors offered by providers are often ill-equipped to truly "educate."

Sixth, the real beneficiaries of MCLE are bar associations and other provider organizations and neither the profession nor the public.

Seventh, MCLE is inherently discriminatory. The little guy gets it once again.

Eighth, the time and expense devoted to MCLE often detracts from one's inclination and ability to contribute pro bono services.

Ninth, the notion that MCLE enhances the ethics of our profession is bogus.

Tenth, while MCLE may offer the responsible courts a "feel good" sensation and enhance "perception," the fact is that MCLE is laden with hypocrisy.

Friday, February 4, 2011

More on the finding that Feinberg is not "neutral"

Yesterday I reported (here) that a federal judge ruled that it was misleading for Ken Feinberg, the administrator of the Gulf Coast Claims Fund call himself "neutral" or "independent" in administering BP's $20 billion oil spill victim compensation fund. In his comment in the Legal Ethics Forum, Monroe Freedman concludes that the opinion "confirms that Feinberg has been engaging in unethical conduct that has been misleading claimants and posing a serious threat to the administration of justice.” Here is a link to a short comment and discussion on the wide-ranging implications of the BP and Feinberg arrangement. The PopTort blog also picks it up here.

How private is your privacy on Facebook?

Yesterday I reported on a recent case that held a litigant had waived his attorney-client privilege by disclosing information by e-mail and in a blog. At least in part, this was because the e-mail and/or blog were considered a "public." Interestingly, I just saw a couple of stories about cases in which courts are allowing discovery of information posted online in "areas" thare are supposed to be more "private." Proving again, that there is nothing private on the internet, as one of the stories points out "increasingly, judges in civil cases are granting access to online caches that had formerly been considered off-limits." Go here and here to read more.

Thursday, February 3, 2011

California Court Finds Client’s E-Mails and Blog Postings Regarding Conversations with Counsel Waive Attorney-Client Privilege

This is not entirely surprising since at least some jurisdictions have held that misadvertent disclosure of privileged information operates as a waiver of the privilege. Story here.

Judge finds Ken Feinberg is not "neutral"

About three weeks ago I reported (here) on an on-going debate related to Ken Feinberg, the administrator of the Gulf Coast Claims Facility. Several blogs, organizations and articles have argued that Feinberg is acting under a conflict of interest because he was not really simply managing the fund, he was getting paid $850,000 a month by BP to settle claims against BP and obtain releases of liabity for BP.

Now a federal judge has agreed with these allegations and ruled yesterday that it was misleading for Feinberg to call himself "neutral" or "independent" in administering BP's $20 billion oil spill victim compensation fund. The judge has ordered Feinberg to clearly disclose his role as acting for and on behalf of BP. Moreover, Feinberg must "[a]dvise claimants that the 'pro bono' attorneys and 'community representatives' retained to assist GCCF claimants are being compensated directly or indirectly by BP."

In the end, the judge has ordered BP, through its agents Ken Feinberg and any of their representatives, in any of their oral or written communications with claimants (including but not limited to websites, telephone scripts, personal contacts, release documents and correspondence) to

(1) Refrain from contacting directly any claimant that they know or reasonably should know
is represented by counsel, whether or not said claimant has filed a lawsuit or formal claim;

(2) Refrain from referring to the GCCF, Ken Feinberg, or Feinberg Rozen, LLP (or their
representatives), as “neutral” or completely “independent” from BP. . . .

(3) Begin any communication with a putative class member with the statement that the
individual has a right to consult with an attorney of his/her own choosing prior to accepting any
settlement or signing a release of legal rights.

(4) Refrain from giving or purporting to give legal advice to unrepresented claimants,
including advising that claimants should not hire a lawyer.

(5) Fully disclose to claimants their options under OPA if they do not accept a final payment, including filing a claim in the pending MDL 2179 litigation.

and, (6) Advise claimants that the “pro bono” attorneys and “community representatives”
retained to assist GCCF claimants are being compensated directly or indirectly by BP.

The judge's opinion is available here.

For a brief discussion of the opinion go to the PopTort blog, Legal Ethics Forum and the Wall Street Journal Law Blog.

Illinois Supreme Court to consider eliminating mandatory CLE?

The Chicago Daily Law Bulletin is reporting today that a former member of the Attorney Registration and Disciplinary Commission Review Board and chairman of the Judicial Inquiry Board has filed a petition before the Illinois Supreme Court asking it to revoke its rules requiring minimum continuing legal education for the state's lawyers.

The petition argues that mandatory participation in CLE programs is a costly and ineffective exercise not shown to enhance professional competence and that there is no evidence that mandatory participation in CLE provides any public or professional benefit.

A pre-hearing conference before an ARDC Hearing Board panel member is set for May 6.