Lesser Known but Wildly Helpful Ethics Rules

As practice and ethics counsel for the American Immigration Lawyers Association, I get to do a lot of ethics presentations—with panels, without panels, with robots. It’s an array of ethics, and so are the rules commonly cited. I frequently apply communication, competence, diligence, confidentiality, supervision, fees, and conflict rules to myriad facts. It’s fun.

However, a swath of less commonly cited ethics rules are no less instructive and no less essential to being an ethical and professional lawyer. Lawyers can make missteps on these rules and be none the wiser until a complaint comes in, so here is a refresher on the “oddball rules” you maybe haven’t looked at in a while.

Business Relationships with Clients

ABA Model Rule of Professional Conduct (RPC) 1.8 is an array of “specific” (read different) conflicts a lawyer can get into with current clients. It starts with the doozy of not permitting a lawyer to enter into a business relationship with clients or “knowingly acquiring a…pecuniary interest adverse to a” client unless transactions and terms are fair and reasonable to the client and fully disclosed in understandable writing, the lawyer recommends independent counsel to review and gives time to do so. The client gives informed consent to the terms, including the lawyer’s “role in the transaction” and if the lawyer is representing the client. RPC 1.8(a). Informed consent is defined in RPC 1.0(e) as the lawyer giving adequate information about a proposed course of conduct, including risks and alternatives. That’s a high bar.

The tricky thing about this conflict of interest is that a business relationship with a client already exists. What if you just want to support a client’s candle-making business by putting them on the shelves of your sister-in-law’s store? It would be better to keep your distance or apply this framework because that relationship could hit the rocks and harm the client-lawyer relationship in the future.

Some argue that if you renegotiate the terms of a contract or enter a subsequent contract for legal services after the first, the framework of 1.8(a) should be applied. Safe to say, this is a big one lawyers can stumble into despite their best intentions.

A Client’s Story is Their Own

One business relationship that a client-lawyer cannot enter into is acquiring literary or media rights to a client’s story (RPC 1.8 (d)). If the story is largely based on information about the representation, a lawyer must wait until the conclusion of the representation to do so. This may be why we have to wait so long to hear about hero lawyers, but it serves an important purpose of keeping the lawyer’s focus on the client’s legal goals.

Others Paying the Bill

A lawyer may pay for a client’s costs if it is an advancement, even if repayment is only contingent on the outcome of the matter. RPC 1.8(c) (1-2). This has always struck me as potentially conflict-creating, but there it is. Further, lawyers of indigent clients can provide “modest gives to clients” for normal basic needs, but they cannot use them to induce or promise anything, cannot seek reimbursement, and can’t advertise their willingness to do so. RPC 1.8(c)(3). In other words, this can’t be a marketing ploy to get clients.

More importantly, a lawyer must have good boundaries with a third-party payor who is footing a client’s bill. The lawyer must only accept those payments once a client has given informed consent, ensure there’s no interference with the lawyer’s independence or relationship, and protect the client's confidence. RPC 1.8(f), 1.6, 1.0(e). This is one lawyer often get wrong, I think because that third-party payor naturally thinks they have rights and power because in almost every business relationship when you pay money, you do have rights and power. The next payor may be very invested in the client’s future and freer to collect and offer assistance, such as when a client is incarcerated and the family relation payor is not. The next thing you know, the payor’s asking you questions; it feels natural to tell them things and follow their instructions.

But a lawyer can’t unless the client has instructed them to do so. It’s essential for lawyers to set up the rules of these complicated relationships from the very beginning and to stick to them throughout when the payor pushes boundaries. Have a written agreement for the payor and another for the client and have a meeting with both that sets out their rights (i.e., “Please understand I will only give you updates about payments, as he has not permitted me to share about his case, and he has that right to confidentiality even though you are paying.”) You may need a waiver of confidentiality if the third-party payor is fundamental to the success of the case, but make sure that informed consent is detailed and discuss the revocability of that consent with the client and payor. RPC 1.0(e).

Imputation of Conflicts

Many lawyers forget (maybe because it’s inconvenient) that all conflicts are attributed to all lawyers in the firm unless there are screening procedures in place before the conflict arises. RPC 1.10. Imputation also applies to all those specific conflicts. 1.8(k).

Talking with Third Parties and Unrepresented Persons

Switching gears a bit, a lawyer must not make a false statement to a third party or state or imply that the lawyer is disinterested when they aren’t. RPC 4.1, 4.3. They must disclose to an unrepresented third party that they aren’t representing that person and only advise to get independent counsel “when the lawyer knows or reasonably should know that the interests of such a person are or have a reasonable possibility of being in conflict with the interests of the client.” RPC 4.3. In other words, don’t deceive your motivations. Yes, police can do so in questioning. But lawyers can’t.

This issue of interests having a “reasonable possibility” of being in conflict with a client’s is a tough line to see sometimes. It can be as subtle as that person saying they will be responsible for an individual in an official capacity, then asking the lawyer, “What does that mean for me?” There are many possibilities of what that could mean, and not all of them are without conflict. A cautious lawyer will abstain from telling them anything but “Get a lawyer to explain that to you.”

Naming Conventions of Law Firms

A lawyer may not misrepresent their services. RPC 7.1. Many lawyers nod with an “of course” look when I talk about this rule, but they don’t think about the common ways we can mispresent. Some states are stricter about this than others. For example, some have found that calling a solo practice with no associate “Smith and Associates” is misleading. Other states have issued opinions that calling the firm the “Seattle Divorce Lawyers Group” may mislead potential clients to think they work for the city of Seattle. This was loosened in the ABA Model Rules when Chapter 7 was revised, but many states codified this and have not yet reversed those rules, so do some research before naming the firm. (See RPC 7.5 in Alabama, Alaska, and Arkansas, and that’s just hitting the “A” states.)

Referral Fees and Referral Organizations

Many states have rules that do not permit referral fees from lawyer to lawyer unless they are associated formally and it’s disclosed to the client, or it’s through a formal lawyer referral service (e.g., Delaware, Alaska RPC 7.2.) This is a big one for federal practitioners working across state lines who may not realize another set of ethics rules applies to the relationship they are arranging with another lawyer, for example. Be sure you know what rules apply and that they permit your arrangements. RPC 8.5.

Prospective Clients Have Rights, Too

Remember that prospective clients have rights under RPC 1.18, though they aren’t as expansive as the rights of actual clients. The most important one is that a lawyer should not use or reveal information gleaned from a consultation without informed consent, which can be conflicted, much like Rule 1.9 about former clients.

Independence of a Lawyer

The last rule I want to talk about is the professional independence of a lawyer because I think it’s an easy thing to slip when you deal day-in-day-out with someone or when someone’s paying your paycheck. “A lawyer shall not permit a person who recommends, employs, or pays a lawyer to render legal services for another to direct or regulate the lawyer's professional judgment in rendering such legal services.” RPC 5.4(c).

In other words, you have an obligation to manage when a stakeholder in a case is telling you to do something you know is wrong or even just not the best decision. If it’s the client, they may still go against your advice. But they should never do so without at least a lengthy conversation and maybe an opinion letter. If they are going down a path that’s fraudulent or criminal, you must get out of the case, and you may be required to correct the record even if it’s protected. RPC 1.6, 1.16, 3.3. These are rooted in the fundamental cornerstone of being an officer of the court. It’s immovable, and it’s also your shield when things are going really, really bad. So use it.

There are other rules that just apply to specific types of lawyers, like those governing prosecutors and government lawyers. Each rule has a purpose. Read the whole set at least every few years. You may find some gems in there that help you deal with difficult situations, or you may even see you’ve been a bit smooshy on things you should tighten up. Don’t get down on yourself if it’s the latter. Just do better next time.