Testimony of Robert E. O'Malley, June 2000 - Center for Professional Responsibility

May 16, 2000

Ethics 2000 Commission
Public Hearing, June 2, 2000

 Testimony of Robert E. O'Malley

 

1. Rule 1.5 (revised public discussion draft dated 4/20/00). There appears to be a disconnect between the definition of "writing" and "written" in paragraph ( l.) of the April 19, 2000 draft of Rule 1.0 and the three important references to "writing" in Rule 1.5.

First, Rule 1.5(c) provides that "[a] contingent fee agreement shall be in writing . . . ." The reference to an "agreement" strongly implies that client signature, a manual signature or the electronic equivalent, is required, and that has been the consistent practice of careful lawyers for many years when a contingent fee agreement is involved. However, the definition of "writing" in Rule 1.0( l.) no longer requires the client's manual or electronic signature. Is it the Commission's intent to change the long-standing practice with respect to contingent fee agreements? I hope not.

Second, Rule 1.5(e)(1) permits division of a fee between lawyers not in the same firm if "the client gives informed consent in writing, . . . ." This creates confusion as to whether "gives informed consent in writing" as used in Rule 1.5(e)(1) has the same meaning as "confirmed in writing" in Rule 1.0 ( l.). If the same meaning is intended, that should be clarified by revising Rule 1.5(e)(1) to include the "confirmed in writing" language instead of the "gives informed consent in writing" language. If the same meaning is not intended, then Rule 1.5(e)(1) should be revised so as to explicitly require the client's signature, either manually or electronically.

Third, Rule 1.5(b) requires that, with respect to a new client, the fee arrangements "shall be communicated to the client in writing, . . . ." This indicates that a document must be simply "communicated" to the client without any requirement of signature by the client; it would be helpful to clarify that point in an additional sentence.

2. Rule 1.18 (revised public discussion draft dated 4/21/00). First, I endorse and repeat the comment in the District of Columbia Bar Rules of Professional Conduct Review Committee's February 28, 2000 letter to the Commission regarding the standard as to what constitutes disqualifying information obtained from a prospective client:

[C]omparing paragraph (c) of Rule 1.18 to paragraph (b)(2) of Rule 1.9, the description of disqualifying information obtained from the prospective client in Rule 1.18(c) should in any event be limited by the same phrase that appears in Rule 1.9(b)(2): "protected by Rules 1.6 and 1.9(c) . . ." Among other things, that qualification confirms this non-debatable principle: when information obtained from the prospective client has later become "generally known" (the words used in Rule 1.9(c)), there is no impediment to subsequent representation adverse to the prospective client under Rule 1.18(c), even if that generally known information would be "significantly harmful" to the prospective client in the later adverse representation. Comment [5] should be amended to conform to the change suggested in this paragraph.

Second, I endorse and repeat the comment in the District of Columbia Bar Rules of Professional Conduct Review Committee's February 28, 2000 letter to the Commission regarding the first sentence of Comment [8] under Rule 1.18:

The first sentence of Comment [8] reads as follows:

For the duty of competence of a lawyer who gives assistance on the merits of a matter to a prospective client, see Rule 1.1.

The Committee agrees that there should be a certain limited duty of care and a requirement for minimal competence in the case of a lawyer who voluntarily "gives assistance" to a prospective client. But there is nowhere in black letter Rule 1.18 any reference to a duty of care/competence. The Committee therefore suggests that the cryptic first sentence of Comment [8] be deleted. Surely the Commission does not intend that the full range of duties that a lawyer owes an actual client under Rule 1.1 are also owed to a prospective client. For example, it is probably true as a matter of substantive malpractice law (but not necessarily as a matter of legal ethics) that a lawyer ordinarily has a duty to warn a prospective client who is contemplating filing suit against another party that there is a statute of limitations to be considered, and that other counsel should be promptly consulted. But the lawyer clearly does not have the same duty that would be owed to an actual client under Rule 1.1 to research the law and advise the prospective client precisely what the statute of limitations is. In summary, it is inappropriate to treat in a disciplinary rule the unsettled issue of whether and to what extent a lawyer owes a duty of care/competence to a person who is not and never was a client of the lawyer."

I was not present at the Commission's March meeting in Chicago, but I conclude from a review of the minutes that neither of the foregoing suggestions was discussed at that meeting.

3. Rule 4.4 (revised public discussion draft dated 4/21/00). I endorse and repeat the comment in the District of Columbia Bar Rules of Professional Conduct Review Committee's February 28, 2000 letter to the Commission regarding what is now Rule 4.4(b) (formerly Rule 4.4(c)):

Paragraph [(b)] of Rule 4.4 reads as follows:

[(b)] A lawyer who receives a document and has reason to believe that the document was inadvertently sent shall promptly notify the sender.

Paragraph [(b)] is inconsistent with the unanimous and clearly correct view of the existing authorities: ABA Formal Opinion 92-368 (1992); State Compensation Insurance Fund v. WPS, Inc., 82 Cal. Rptr.2d 799 (Cal. App. 1999); Illinois State Bar Association Opinion 98-04 (1999); District of Columbia Bar Opinion 256 (1995); and Oregon State Bar Opinion 1998-150 (1998).

The foregoing authorities discuss what is often referred to for convenience as the errant FAX' issue. They all emphatically hold that, if the receiving lawyer knows before reading the material that it has been inadvertently sent, the recipient must not read the material, must notify the sending party, and must follow the instructions of the sending party as to the return or destruction of the inadvertently transmitted material. Thus, paragraph [(b)] of Rule 4.4 should read as follows:

([b]) A lawyer who receives a document and knows, before reading the document, that it has been inadvertently sent, shall not examine the document, but shall notify the sending party and abide by the instructions of the sending party regarding the return or destruction of the document.

That proposal was quite consciously rejected by the Commission at its March meeting. This point is extremely important as a practical matter; many lawyers confront the

problem regularly. I am puzzled by the Commission's reluctance to confirm in paragraph (b) a principle that plainly is correct legally and morally.

__________________________

I thank the Commission for its consideration of these views. [ Full disclosure: I am a member of the D.C. Bar Rules of Professional Conduct Review Committee whose February 28, 2000 letter is quoted extensively above, and I am one of the principal authors of that letter.]

 

Robert E. O'Malley
REOM/ccd

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