A state decision addressed whether the rules of professional conduct permit small firm attorneys to appear as trial counsel when they are necessary trial witnesses in disputes over their fees.
Lawyer as Necessary Witness is Grounds for Disqualification
ABA Model Rule 3.7 concerns situations wherein a "lawyer shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness." Model Rule 3.7 recognizes that lawyers called as witnesses during trial may prejudice the jury by combining the roles of advocate and witness.
Most states, including North Carolina, have adopted a rule identical or similar to ABA Model Rule 3.7. North Carolina's Rule 3.7 and Model Rule each provides:
(a) A lawyer shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness unless:
(1) the testimony relates to an uncontested issue;
(2) the testimony relates to the nature and value of legal services rendered in the case; or
(3) disqualification of the lawyer would work substantial hardship on the client.
In Harris & Hilton, the law firm filed the case to recover attorney fees for legal services provided to the defendant, Rassette. During a pre-trial conference, the judge expressed concern that the firm listed as witnesses its trial attorneys who would also testify for the firm. The judge found that the law firm's trial attorneys were necessary witnesses, and disqualified them from representing the firm. The appellate court affirmed the trial court's disqualification order.
Exceptions to the Witness-Advocate Prohibition
Paragraph (a)(2) of Model Rule 3.7 recognizes an exception where the lawyer's offered testimony concerns the value of legal services given in the case. "These lawyers would not have been disqualified if the dispute focused on the amount. The grounds for disqualification was whether there was a contract that existed. The testimony would not be just about the amount, but of whether a contract existed, one of the defenses asserted by the defendant," Douglas L. McCoy, Mobile, AL, cochair of the ABA Section of Litigation's Trial Practice Committee.
Movement to Loosen the Rule to Make the Practice of Law More Efficient
Harris & Hilton argued that Rule 3.7 is "archaic and fails to take into account the disproportionate economic burden on small law firms that are forced to hire outside counsel to litigate fee collection cases." "There is a movement taking place in several jurisdictions to loosen the rule of professional conduct to allow businesses to represent themselves in court," notes Daniel D. Quick, Troy, MI, cochair of the Section of Litigation's Trial Practice Committee.
"It really speaks to the movement to try and rethink the traditional legal model in order to drive efficiencies. The contingent which advocates for loosening of this rule, argues that small businesses shouldn't have to retain counsel on routine matters," states Quick. "For example, a landlord that has to be in court for eviction or deficiencies. The landlord knows the business, and their in-house counsel knows the business. To have to hire a lawyer to get up to date is inefficient. If we are talking about making the practice of law more efficient, then it makes sense to have in-house counsel represent themselves," says Quick.
Court Not in Position to Rewrite Rule
The court noted that its role is to interpret Rule 3.7, not rewrite it. "I think the court is using good judicial common sense. No one put the judge in the position to make the law, but rather to apply what the law is. The court did a good job mentioning what the arguments were, and saying that it is not the court's job to comment on the rule," notes Quick.
"The court did reach the correct decision based on the statute," says McCoy. "In a fee dispute case, when the dispute is the value, a lawyer should be able to represent his law firm, regardless of whether he will be a witness in the case. When the issues are broader than just the value of the services, it is a necessary disqualification. It would be confusing for a jury when the argument is evidence. When you have a participant in the trial when the witness is an advocate and a witness, it may cause confusion to a jury," McCoy adds.
The court noted that "the appropriate audience for Harris & Hilton's policy argument is the State Bar rather than this Court." "The court should be applauded for not overstepping its bounds and applying law as it exists, and not as how someone would like it be," notes Quick. "If there is a movement afoot for loosening the rule, they might use this opinion to advocate for loosening the rule," he adds.
Christina M. Jordan is the immediate past editor-in-chief for Litigation News.
- Harris & Hilton, P.A. v. Rassette, North Carolina Court of Appeals No. COA16-809 (March 21, 2017).
- Disqualification of Opposing Counsel Under ABA Model Rule 3.7 Lawyer as Witness, American Bar Association Section of Labor and Employment Law Committee on Ethics and Professional Responsibility 2010 Mid-Winter Meeting.
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