In the Oscar-nominated 1980 Australian film, as the protagonist Harry “Breaker” Morant is led to his firing squad for murdering prisoners of war and civilians, he requests from the priest the biblical epitaph “A man’s enemies will be of his own household.” Spot on.
You see, Harry did not deny that he had done the crime. Instead, his defense was that he should not be punished because everyone else was doing it, too. Harry had troubles, to be sure, but just as sure, he brought them on himself.
Representing attorneys in ethics and professional negligence matters for more than 20 years teaches a thing or two. One for certain—whether it’s through good intentions, bad intentions, lack of insight, or staggering ethical failures, we attorneys cause our own problems.
Does that representation experience offer insight to help prevent the sort of problems we bring upon ourselves? Let’s see.
We’ll start with the Rules of Professional Conduct. The rules can be nuanced and complicated. Yet, just as there are some values you should simply learn early in life, there are certain core concepts arising from the rules that are easily understandable and compellingly clear. Lawyers should keep these key values in sight.
First, the rules are rules of reason. Interpret and apply them with reference to the purposes of legal representation and the law itself. Boiled down, do not ignore your gut assessments or your common sense. The purpose of legal representation is to advance the client’s interests ethically. If you are not pursuing a path to ensure your client’s best interests, you stand on shaky ground.
Second, always consider the second part of comment 16 to the preamble: “The rules do not . . . exhaust the moral and ethical considerations that should inform a lawyer, for no worthwhile human activity can be completely defined by legal rules.”
These first two core concepts are not complicated. If you are doing something that does not seem right, you should not be doing it. Further, if you are doing something that you would not—or cannot—discuss with your current or past client, or your ethics partner, in all likelihood you should not be doing it.
Third, make this next thought your guiding star, even though it is somewhat more complicated than it seems: You owe allegiance to the organization or individual who retained you. If you cannot or do not follow this principle, you are going to walk into trouble.
That seems obvious, of course. But countless times, attorneys lose track of whom they are representing and what interest they are trying to advance or have advanced in the past. If lawyers do not know whom they are representing or to whom they owe a past and present duty, they are navigating in a minefield without a map.
Experience in this area of the law also gives rise to knowing certain character types who present themselves in the ethics and legal malpractice world. Some folks are unique to their own character group, while others cross over into more than one character group.
Let’s begin with what we’ll call the do-gooder, the most benign attorney character in our study.
Everyone knows the do-gooder attorney. Do-gooders take on cases with little regard for the economics of the case or for their own level of relevant experience or expertise. Driven by their desires to do good and to attempt to bring fairness to what otherwise seems an unfair world, this type of attorney presents many positive traits.
But their desire to bring fairness to an unfair world can lead them down dangerous roads. One do-gooder I recall had no medical malpractice experience but agreed to gather and review medical records for a friend who thought she had been the victim of medical negligence. Through nothing but kindness and good intentions, the attorney led the friend to believe she had a legitimate case, even though the attorney had learned that the cost of a potential medical expert would be exorbitant and the case would have little likelihood of success.
In the end, the attorney could not bring himself to tell the friend that the case had little upside. No case was filed. Eventually, the statute of limitations expired. The friend, by then unhappy, filed a grievance. The lawyer, now at an advanced age, suffered through the grievance process. The result was a six-month suspension, stayed on good behavior.
What do we learn from this? Do not take on a matter in an area materially beyond the scope of your expertise. Also, it’s best not to represent personal friends—time and again, personal relationships and personal dynamics interfere with one’s professional judgment. Finally, do not delay transparently communicating with the prospective client about the problems with the case; nothing is achieved by waiting or by opacity. In this instance, the lawyer violated all three of those lessons and suffered the consequences.
Another notable character is the confused attorney. This type of lawyer is confused, bewildered, or both. Either unintentionally or intentionally, confused attorneys do not know whom they represent and thus cannot know to whom they owe a duty.
Here is a classic case: A corporate attorney, Jack, spends 20 years representing a family business, which makes nuts, bolts, and screws. During that time, Jack also represents the business’s shareholders, individually, and various estate planning trusts he forms for the shareholders and family members.
Jack becomes an unofficial member of the family. Luckily for him, no conflicts arise. Then all the shareholders agree to sell their shares in the family business to its employees through an employee stock ownership plan. Pursuant to the plan, a valuation of the stock price is initiated. Despite having served as corporate counsel and on the board of directors of the family business, Jack holds separate meetings with the individual shareholders to assist them during the valuation process to increase the size of the payment they are to receive for their shares.
What’s going on here? Jack has forgotten that he owes a duty to the family business—the corporate entity. He violated that duty when he gave advice to the individual shareholders to assist them in increasing the value of their shares. As a result of his conduct, the corporate entity was forced to redeem the shares at a much higher price than it should have paid. In advising shareholders, Jack also used confidential information, which he had obtained during his two decades of representing the family business, to harm that family business.
Jack gets sued for legal malpractice. As part of discovery in that case, Jack is deposed. Even after the deposition, Jack does not seem to understand what he did wrong. The insurance carrier does. After Jack’s deposition is concluded, it pays several million dollars in settlement to the family business.
As William Shakespeare said so aptly centuries ago, “[t]he fault . . . is not in our stars, but in ourselves. . . .” What can we learn here? Even after terminating his attorney-client relationship with the family business, Jack still owed a continuing duty to that corporate entity. Moreover, he was not permitted to use information he had learned during his representation of the corporate entity to benefit his individual shareholder clients to the detriment of that corporate entity.
This principle should have been obvious to Jack. Regardless, he continued to give advice to one set of clients—the shareholders—that harmed the interests of a former client, the family business. Whether it was the busyness of life, a special loyalty that Jack thought he owed to his individual shareholder clients, simple greed, callousness, or ignorance, Jack forgot whom he represented and his ongoing duties to past clients.
Another notable lawyer type is the rogue. We have all met them. They are gregarious, friendly, and driven by the pursuit of new matters and new retainers. They may be generally aware that ethical rules exist, but either they read them only once or not at all.
Rogues often consider written fee agreements and conflict checks a nuisance. Crazier versions of the rogue regularly enter into business transactions with their clients without making full disclosure of the potential risks inherent to the client. The rogues are skilled at finding ways around any firm’s internal rules and regulations about conflict checks and matter-opening procedures. They are tolerated because they bring in a lot of business, which benefits the firm and its partners. The rogues rarely, if ever, learn from their experiences.
Here are some extreme examples:
A lawyer’s best friend hires him to represent the trust of a deceased woman, which was designed to provide yearly donations to a children’s hospital. The trustee, with the knowledge of the lawyer, buys a condominium located next to a ski resort, which was purported to be an investment property that would generate income for the trust. The trustee pays $350,000 for the condominium.
Six months later, citing an economic downturn, the trustee and the attorney representing the trust purchase the condominium unit for themselves and their wives from the trust for $225,000, a dramatic financial loss for the trust. On its face, the transaction is unethical and improper. The same lawyer also permits the trust to make loans to a business entity in which he has an ownership interest without disclosing this conflict.
Not surprisingly, because of the condominium transaction and other transactions, the trust’s assets are depleted, and it runs out of money. Eventually, the beneficiary files suit to discharge the trustee and brings a legal malpractice claim against the lawyer.
Another example of the rogue arises in attorneys who represent aged or disabled individuals. These attorneys find ways to transfer client money to themselves. We sometimes read in our local papers about their indictments for some kind of theft offense, then about their disbarment, and then about their jail sentence.
Yet another example is the lawyer who, serving as magistrate, accepts a $100 bribe to fix a drunk driving charge and, as a result, loses his law license. Indeed, smart and well-educated lawyers put their license to practice law at risk over $100. You cannot make this stuff up.
Ironically, when legal actions are brought in situations like these, some of the claims are covered by insurance and some are not. But the rogues often receive the benefit of a defense provided by their insurance carriers. Moreover, the rogues are always clever enough to ensure that the case is settled with insurance proceeds, so they rarely pay out of pocket personally.
What lessons can we learn from considering the rogue lawyers? A multitude.
First, as any William Faulkner devotee knows, humans are capable of the most despicable behavior. Second, no amount of ethical training will ever change a rogue’s behavior. Third, if you represent a rogue, you must dissect his or her story in detail, because the rogue never will admit that he or she was wrong. Therefore, we have no choice but to face the practice of law without illusion or pretext. Never assume anything.
Another common character type is the gray-area guy, whom we’ll here call the “gag.” The gag is not an attorney; he is a client. All of us have met the gag. The gag lives, and comfortably resides, in zones of ethical, moral, and legal ambiguity. Often, the gag clearly understands the legal system, has substantial legal experience, and has been through a number of business transactions, litigated disputes, and retained lawyers before coming to you. He tells you that he has terminated his past attorney relationships because of problems on the attorneys’ end. He says he senses that you are different, that you are a better lawyer than all the others.
Gags embody a broader range than the other characters we’ve examined. Some gags are dangerous because they don’t know what they don’t know. These are ones with blinding loyalty to their version of the facts, regardless of the unrealistic nature of their claims. At the other end of the spectrum are gags who are flat-out grifters. They will use any small step to gain leverage to gain a money award from the opposing party or even from their own attorney.
Most lawyers have a sense that the gag is not quite who he claims to be. Deep down, we know he is that guy who’s always looking for an angle; who, if he sees an opening, will turn on us just as fast as he has turned on others in the past.
All of us know that the gag is dangerous. Some of us think we are different and that the gag will not turn on us. Others of us live with the fear, hold our breath or our nose, and take on the engagement. After all, we want the benefit of the retainer and the glory of new engagement.
To quote the rock band America, we want to “catch the perfect prize that waits among the shelves.” In the end, 95 percent of us accept the gag as a new client based on the lure of the new matter and the financial benefit of the sizable deposit. Every year, some percentage of us regret that decision. We forget that while we can enjoy a quality bourbon with the gag, we should not want to represent him.
Here is an example: A lawyer makes it clear when he begins the representation of a limited liability company that he represents the entity, not the individual members, one of whom is a gag. When the LLC is sold to a huge foreign conglomerate, the gag claims that the transactional lawyer failed to adequately represent his interests, individually as a minority member, even though the gag received a payment of $3 million for his $25,000 investment.
The gag’s legal malpractice claim receives a lot of coverage in the local newspaper. Eventually, the case is dismissed on summary judgment. The court holds that the attorney did not owe a duty to the gag, as the gag was never his client. That summary judgment result, of course, receives no coverage in the local paper. The lawyer’s reputation has been sullied. There is no remedy.
What can we learn here? First, from time to time, we all need to turn down the chance to represent the gag. Second, if we’re going to have a lawyer-client relationship with the gag, we had better be prepared to protect ourselves and take the bad with the good. Third, if we ever successfully represent the gag once, we should be grateful and happy and never go back for a second bite of that apple.
Takeaways from this crazy montage of characters and vignettes? It never hurts us to pull out the rules and read them. Do not lose track of your core values. A lawyer’s duty is to ethically serve his or her clients’ interests. In the course of that service, lawyers cannot harm other current or former clients.
Over the course of our lives and careers, we will see and recognize situations that we know will lead us down the wrong road. The next time we encounter that situation, we should think about our core values as we consider whether we really need the shiny object on the shelf.
We will never get it completely right. There is, however, a Peruvian saying: “Perseverance is where the gods dwell.”
Charles P. Royer can be reached at [email protected].
