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July 09, 2020 Feature

Risks from an Absent Client and an Unreliable Agent

Lawyers are often asked by one person to provide legal services to another, which can raise ethical questions.

by Michael Downey

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“Our client Pat is threatening to file a bar complaint,” Paradox told Ethox.

“What happened?” Ethox asked.

“Our firm is defending two restaurant owners, Chris and Pat,” Paradox said. “Chris handled business matters while Pat ran the kitchen. The restaurant struggled, and the landlord sued Chris and Pat for unpaid rent.

“All our communications were with Chris,” Paradox continued, “so when Chris asked us to file a counterclaim against the landlord, we did.”

“OK,” Ethox responded.

“That’s what we thought,” Paradox said. “But then Pat called, furious that we had sued the landlord. Pat claimed to be unaware of the lawsuit and said we were not authorized to sue the landlord. Are we in trouble?”

“You made a very common lawyer mistake,” Ethox answered, “trusting that one client was a reliable agent and conduit for another.

“Lawyers are often asked by one person to provide legal services to another,” Ethox continued. “Sometimes it’s a family member or friend. Other times, as in this case, it’s a business partner.”

“Yes,” Paradox agreed.

“The key thing in such circumstances is for the lawyer to maintain appropriate communications with each client and to make sure each client’s interests are protected,” Ethox said.

“ABA Model Rules 1.2 and 1.4 require that the lawyer communicate with and let the client choose the objectives of the representation. Rule 1.2 also directs the lawyer to consult with the client regarding the means for pursuing those objectives,” explained Ethox. “To do this properly, the lawyer should communicate with each client—or at least ensure the client authorizes someone else to communicate with and direct the lawyer’s activities.”

“OK,” Paradox responded. “So what we did is wrong?”

“Possibly,” Ethox said. “Under Rule 5.4(c), a lawyer cannot allow a person to direct or regulate how the lawyer represents someone else, just because that person recommended, employed, or is paying for the lawyer. Also, since both Chris and Pat were joint clients, under Rule 1.7(a) we needed to evaluate and possibly obtain waivers of any conflicts of interest.”

“Oh my,” Paradox groaned.

“Yes,” Ethox sympathized, “it can get quite messy if a lawyer relies on an agent when doing work for a client and that agent turns out to be self-interested. In the Illinois discipline case In re Krasnik, for example, a lawyer prepared a deed and power of attorney, supposedly for the person requesting the documents to give to his hospitalized friend. The person who had requested the documents then apparently obtained signatures on the documents and used them to take the friend’s money and house.

“The lawyer had never spoken to the hospitalized friend, so the discipline charges included alleged violations of the duties to provide competent representation (Rule 1.1), consult with the client concerning the objectives of the representation (Rule 1.2), and explain the matter so the client could make reasonable decisions regarding the representation (Rule 1.4),” Ethox continued. “The lawyer was also charged with operating under an unwaived conflict of interest and allowing the person who had engaged the lawyer to direct or regulate the lawyer’s professional judgment, potential violations of Rules 1.7(a) and 5.4.”

“What if the client, like Pat, is unable to help guide the representation?” Paradox asked.

“If a client has diminished capacity or lacks capacity altogether,” Ethox answered, “ABA Model Rule 1.14 provides guidance. But Rule 1.14(a) still directs a lawyer, ‘as far as reasonably possible,’ to maintain a ‘normal client-lawyer relationship’ with each client.”

“So we could get in trouble for this?” Paradox asked.

“Hopefully, we can speak to Pat and Chris and work things out,” Ethox said, “either by having Chris and Pat waive conflicts and agree to our joint representation with a common plan or by trying to undo some of what we have done and to withdraw from representations.

“The key,” Ethox emphasized, “is for us to speak to both Pat and Chris, and see what we can work out.”

“I trust you will help me with that call?” Paradox asked.

“Absolutely,” Ethox reassured Paradox.

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Michael Downey

The author is a legal ethics lawyer at Downey Law Group LLC, St. Louis.