1. law, govt and politics

How to Lose Your Law License on Facebook
and Other Ethics Lessons
Emily Hughes
University of Iowa College of Law
Materials
The Perils of Facebook
Agreed Disposition and lilemorandulI1 Order (Virginia State Bar Disciplinary Board, 7117/2013,
outlining facts resulting in five-year suspension related to Facebook incident) .........
2-11
Recent Iowa Board of Professional Ethics Opinions
The Use (~fContracted Lawyerc<" (8/27/2013) ......... '" .................................................... .
Men!or-Menfee Relationships (8/27/20 I 3) ............................................................... .
Co-Counsel Relationships (8/ I 9/20 13) .................................................................... .
Pro Hac Vice Coumel (8/6/2013) ........................................................................... .
12-17
18-21
22-25
26-29
Information Re: Liens and Client Files
Imva Board ofProfessional Ethics Opinion: Retaining Lien-Client Files (10117/2007) .. '" ...... .
Nebraska Ethics AdvisOlY Opinion for Lawyers No. 12-09 ....................................................... .
30-34
35-44
Sample Waiver Agreements
(I) Sample COI?/lict ·Waiver Agreement: Concurrent Representation ofi\l/ultiple Clients in the
Same Matter (American Bar Association)........................................................ 45-47
(2) Sample Advance Waiver ofCOI!f!icts of In teres! (D.C. Bar)....... .................... ............. 48
(3) Joint Representation of Multiple Clients (Florida Bar Association)............................... 49
(4) Advance Waivers of Future COI?/liCfS: Blanket Advance Waiver Not Including Sl{bstantial~J'
Related Matters (I (~l2) (NYC Bar Association)............................................. ... 50
(5) Advance Waivers ~lFuture COlI/licts: Blanket Advance Waiver Not Including Substantially
Related Allllters (2 of 2) (NYC Bar Association)............................................. ... 51
(6) Advance Waivers of fUf;ure COI?/lic/s: Representationfor Substantially Related lv/alters
(NYC Bar AssociatIOn)............................................................................ 52
(7) Advance Waiver Provision/or a Large Firm (1 ~l2) (Texas Bar CLE Materials)............
53
(8) Advance Waiver Provision/hI' a Large Firm (2 of2) (Texas Bar CLE Materials)............
54
(9) COil/liet ~lJnlel'est Waiver: Joint Representation In a Real Estate Transaction (New
Hampshire Bar Association)...................................................................... 55
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VIRGINIA:
BEFORE THE VIRGINIA STATE BAR DISCIPLINARY BOARD
IN THE MATTER OF MATTHEW B. MURRAY
VSB DOCKET NOS. 11-070-088405 and 11-070-088422
AGREED DISPOSITION MEMORANDUM ORDER
On __ July 17,2013 _._., these matters were heard by the Virginia State Bar Disciplinary Board
upon the joint request of the parties for the Board to accept the Agreed Disposition signed by
the parties and offered to the Board as provided by the Rules of the Supreme Court of Virginia.
The panel consisted of Robert W. Carter, lay member, John A. C. Keith, Jeffrey L. Marks,
Melissa W. Robinson, and Pleasant S. Brodnax, III, Chair, presiding. The Virginia State Bar was
represented by Alfred L. Carr, Assistant Bar Counsel. Matthew B. Mun-ay, Respondent was
present and was represented by his cmmsel, Thomas W. Williamson, Jr. The Chair polled the
members of the Board as to whether any of them were aware of any personal or financial interest
or bias which would preclude any of them from fairly hearing the matters to which each member
responded in the negative. Lisa A. Wright, Court Reporter, Chandler and Halasz, P.O. Box
9349, Richmond, Virginia 23227, telephone (804) 730-1222, after being duly sworn, reported the
hearing and transcribed the proceedings.
WHEREFORE, upon consideration of the Agreed Disposition, the Certification, and
Respondent's Disciplinary Record,
It is ORDERED that:
The Board accepts the Agreed Disposition and the Respondent
shall receive a Five-Y~ill:_ Suspension_, as set forth in the
Agreed Disposition, which is attached to this Memorandum Order.
It is further ORDERED that:
The sanction is effective:
It is fm1her ORDERED that:
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The Respondent must comply with the requirements of Part Six, § IV, 1f 13-29 of the
Rules of the Supreme Court of Virginia. The Respondent shall forthwith give notice by certified
mail, return receipt requested, of the Five-Year Suspension of his license to practice law in the
Commonwealth of Virginia, to all clients for whom his is currently handling matters and to all
opposing attorneys and presiding judges in pending litigation. The Respondent shall also make
appropriate arrangements for the disposition of matters then in his care in confonnity with the
wishes of his client. Respondent shall give such notice within 14 days of the effective date of the
Five-Year Suspension, and make such arrangements as are required herein within 45 days of the
effective date ofthe Five-Year Suspension. The Respondent shall also furnish proof to the Bar
within 60 days of the effective day of the Five-Year Suspension that such notices have been
timely given and such arrangements made for the disposition of matters.
It is further ORDERED that if the Respondent is not handling any client matters on the
effective date of the Five-Year Suspension, he shall submit an affidavit to that effect to the Clerk
ofthe Disciplinary System at the Virginia State Bar. All issues concerning the adequacy of the
notice and arrangements required by Paragraph 13-29 shall be determined by the Virginia State
Bar Disciplinary Board, unless the Respondent makes a timely request for a hearing before a
three-judge court.
The Clerk of the Disciplinary System shall assess costs pursuant to
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13-9 E. of the
Rules.
A copy teste of this Order shall be mailed by Certified Mail to Matthew B. Murray, at his
last address of record 1852 Wayside Place, Charlottesville, VA 22903 with the Virginia State
Bar, and by first-class mail to his counsel, Thomas W. Williamson, Jr., Esquire, Williamson Law
LC., 3415 Floyd Avenue, Richmond, VA 23221 and to Alfred L. Carr, Assistant Bar Counsel,
707 East Main Street, Suite 1500, Richmond, Virginia 23219.
ENTERED THIS
81~ DAY OF - - - - , 8 - - ' 2013
VIRGINIA STATE BAR DISCIPLINARY BOARD
p
Pleasant S. Brodnax, III, Chair
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VIRGINIA:
BEFORE THE DISCIPLINARY BOARD
OF THE VIRGINIA STATE BAR
IN THEMAITER OF
MATTHEW B. MURRAY
JUL
<It
,',
t
9 2013
.'
,F
••
,
VSB Docket Nos. 11-070-0884Q5:and 11-070.088422'"
"
AGREED DISPOSITION
(FIVE YEAR SUSPENSION)
Pursuant to the Rules of the Virginia Supreme Court Rules of Court Part 6, Section IV,
Paragraph 13-6.H., the Virginia State Bar, by Alfred L Carr, Assistant Bar Counsel and Matthew
B. Murray. Respondent, and Thomas W. Williamson, Jr., Respondent's counsel, hereby enter
into the following Agreed Disposition arising out of the referenced matter.
1. STIPULATIONS OF FACT
L
At all relevant times hereto, Respondent Matthew B. Murray (hereinafter
"Respondent'') was a duly licensed attorney in the Commonwealth of Virginia.
2.
On March 26, 2009, Respondent and his legal assistant reviewed Respondent's client,
Mr. Isaiah Lester's (hereinafter "Plaintiff"). Facebook page in response to
Defendant's Request for Production of documents dated March 25. 2009.
3.
On March 26,2009, Respondent sent his client, Plaintiff, an email that
suggested that Plaintiff deactivate his Facebook page on April 14,2009.
Respondent's legal assistant sent Plaintiffao email of March 26, 2009, stating: "The
pic Zunka has is on your facebook. You have something (maybe plastic) on your head
and are holding a bud with your I Love Hot Moms shirt on. There are 2 couples in the
background .... both girls have long blond hair. Do you know the pic? There are some
other pics that should be deleted."
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4-'
,
I
, ;
4.
Respondent's response to Defendant's March 25,2009 Request No. 10 for documents
stated that Plaintiff did ''not have a Facebook page on the date this is signed, April 15,
2009."
5.
During a hearing on March 3, 2010, on Defendant's Second Motion for Continuance,
Plaintiff's counsel, Respondent, maintained that Defense counsei, David Tafuri, Esq.,
had "hacked" into Plaintiff's Facebook account, or had otherwise accessed the
account without permission. Respondent stated that he intended to use the word
"hack" to be synonymous with "no-permission access." Respondent offered this
evidence to the Court in support ofms argument that the Defendants' Second Motion
for Continuance should be denied.
6.
In response to the Court's question with regard to the basis for his claim, Respondent
stated that the evidence for his claim constituted the photograph attached to the
Defendant's Request for Production of March 25,2009.
7.
During the hearing, Respondent told the Court that he did not know how Defense
counsel had accessed the account, but that he "assumed" the account had been
"backed 'I Respondent stated further that he and his client "assumed" that opposing
counsel "had" the Facebook page and that "the only purpose of the request for
production was to legitimize that which they had acquired without permission."
8.
During the March 3, 2010, hearing, Respondent repeatedly acknowledged that he had
no familiarity with Facebook prior to tbe proceedings of this case.
9.
On November 13, 2009, Defense counsel. Mr. Tafuri, informed Respondent tbat the
Plaintiff bad sent Mr. Tafuri a Facebook message on January 9, 2009.
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10.
Mr. Tafuri's facsimile correspondence with Respondent on November 13, 2009,
confirmed a telephone conversation between Mr. Tafurj and Respondent during
which Respondent had asked whether Plaintiff had sent a Facebook message to
Defense counsel. since the Plaintiff remembered sending such a message.
11.
On December 14,2009, Mr. Tafuri sent Respondent a copy of the Facebook "messageh
of January 9, 2009, via facsimile and certified mail.
12.
On February 23,2010, John Zunka, Esq., counsel for Defendant, sent Respondent a
letter referring Respondent to copies of the correspondence on November 13,2009,
and December 14,2009, reiterating the basis for Mr. Tafuri's access to the photograph
in question, and referencing the relevant Facebook privacy rute in effect on January 9,
2009.
13.
In an email dated February 24, 2010, Respondent declined to comply with Defense
counsel's requests to strike Mr. Tafuri from the Plaintiffs witness list and to retract
the hhacking" comment.
14.
On February 25, 2010, Mr. Tafuri sent an email to Respondent notifying him that
Defense counsel would file a Motion for Sanctions if Respondent did not comply
with the requests contained in Mr. Zunka's February 23, 2010, letter based on
Defense counsel's explanations therein.
15.
At the hearing on March 3, 2010, Respondent said that he first learned of his client's
Facebook "message" during the hearing on February 8, 2010.
16.
In the Plaintiffs Responses to the Defendant William. D. Sprouse's Fifth Request for
Production of Documents (Defendant Allied Concrete's Sixth Request), dated May
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10, 2010, signed by Respondent, the Plaintiff twice asserted that Mr. Tafuri had made
"unauthorized access" to the Plaintiff's Facebook account.
17.
In the Plaintiffs Responses to Defendant William D. Sprouse's Second Request for
Production of Documents (Allied Concrete's Third Request), dated May 10,2010,
signed by Respondent, the Plaintiff referred to lIunauthorized access" of his Facebook
account.
18.
Aside from the photograph in question and the Plaintiff's bare assertion that he
believed his account had been accessed without penrussion, Respondent presented no
evidence to the Court as the basis for the claim of unauthorized access.
19.·
During the hearing on May 27,2010, with regard to sanctions, Plaintiff's counsel did
not address Facebook's default privacy settings or counsel's inquiry into any such
matters.
20.
Respondent argued that "hacking" is not a crime, that he did not intend the word
"hacking" to be used to accuse Defense counsel of a crime, and that therefore "no
harm to any reputation has been done and none can be claimed. II
21.
If Respondent and Mr. Tafuri. in fact, discussed Mr. Lester's Facebook "message" to
Mr. Tafuri on or around November 13,2009, Respondent would have had
approximately three and a half months before the hearing on March 3,2010, during
which he could have investigated his "unauthorized access" or "hacking" claims.
22.
Even if Respondent did not, as he said during the hearing, learn of his client's
Facebook "message" until February 8, 2010, he would have had approximately one
month before the hearing on March 3, 2010, during which he could have investigated
his "unauthorized access" or "hacking" claims.
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23.
On November 17. 2010, the Court ordered Respondent to produce a privilege log, to
include emails to and from Respondent and Plaintiff related to the Facebook
spoliation issue, to be reviewed by the Court in camera. On November 18,2010,
Respondent filed the privilege log; however, the Court ruled Respondent>s Privilege
Log as inadequate and ordered Respondent to file an Amended Privilege Log by
November 29,2010. On November 29, 2010, Respondent filed the Amended
Privilege Log.
24.
Respondent by letter dated December 14, 2010, notified the court that his legal
assistant had " ... apparently overlooked [the March 26, 2009 9:54 a.m.) email" from
the Privilege Logs that was enclosed with the letter to the Court. (See paragraph 3)
25.
Respondent, however, had directed his legal secretary to remove the March 26, 2009
9:54 a.m. email in question from both privilege logs that he filed with the Court. On
February 28,2011, Respondent stated under oath in his deposition that he
intentionally violated the Court's November 17. 2010 order when he caused the
deletion of the March 26, 2009 9:54 a.m. emails from the privilege logs he filed with
the Court.
26.
Respondent stated under oath that he expects to be held accountable for his
Misconduct in willfully concealing the March 26, 2009 email and falsely casting the
blame upon another.
27.
By Order entered October 21, 2011, the Court sanctioned and personally obligated
Respondent to remit to Defendant, the sum ofS542,OOO. The Court ordered Plaintiff
to remit $180,000 to Defendant for his Misconduct during the trial.
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28.
On or about May 30,2013, Respondent remitted $594,209.72 to Defendant.
on June
7,2013, Defendants executed an Acknowledgment of Payment In Full and released
all claims for the sanction against Respondent and Plaintiff.
II. NATURE OF MISCONDUCT
Such conduct by the Respondent constitutes misconduct in violation of the following
provisions of the Rules of Professional Conduct:
RULE 3.3 Candor Toward Tbe Tribunal
(a)
A lawyer shall not knowingly:
(1)
make a false statement of fact or law to a tribunal;
(2)
fail to disclose a fact to a tribunal when disclosure is necessary to
avoid assisting a criminal or fraudulent act by the client, subject to Rule 1.6;
(4)
offer evidence that the lawyer knows to be false. If a lawyer has
offered material evidence and comes to know of its falsity, the lawyer shall take
reasonable remedial measures.
RULE 3.4 Fairness To OpposiBg Party And Counsel
A lawyer shall not:
(a)
Obstruct another party's access to evidence or alter, destroy or conceal a
document or other material having potential evidentiary value for the purpose of
obstructing a partys access to evidence. A lawyer shall not counsel or assist
another person to do any such act.
(d)
Knowingly disobey or advise a client to disregard a standing rule or a
ruling of a tribunal made in the course of a proceeding. but the lawyer may take
steps, in good faith, 10 test the validity of such rule or ruling.
(e)
Make a frivolous discovery request or fail to make reasonably diligent
effort to comply with a legally proper discovery request by an opposing party.
In trial. allude to any matter that the lawyer does not reasonably believe is
relevant or that will not be supported by admissible evidence, assert personal
knowledge of facts in issue except when testifying as a witness, or state a personal
opinion as to the justness of a cause, the credibility of a witness, the culpability of
a civil litigant or the guilt or innoeence of an accused.
(1)
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RULE 8.4 Misconduct
It is professional misconduct for a lawyer to:
(c)
engage in professional conduct involving dishonesty, fraud. deceit or
misrepresentation;
III. PROPOSED DISPOSITION
Accordingly, Assistant Bar Counsel and the Respondent tender to the Disciplinary Board
for its approval the agreed disposition of Five Year Suspension of Respondent's license as
representing an appropriate sanction if this matter were to be heard through an evidentiary
hearing by a panel of the Disciplinary Board.
If the Agreed Disposition is approved, the Clerk of the Disciplinary System shall assess an
administrative fee.
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Ma ew B. Murray. Respondent )
v J~i~J
Th'omas W. W'll'
I lamson,
Respondent's Counsel t-
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August 27, 2013
Mr. Dwight Dinkla
Executing Director
Iowa State Bar Association
625 East Court
Des Moines, IA 50309
RE: IA Ethics Opinion 13-03 The Use of Contracted Lawyers
Dear Mr. Dinkla,
The Committee is asked to give guidance regarding the use of la'Wyers who are
utilized under a contract for temporalY employment. Those la'wyers are sometimes
referred to as contracted lav.ryers, locum tenens lm,yyers, temporary lawyers or simply
"lmv-temps". The lm\ryer or law firm that utilizes their services is often referred to as the
"retained lawyer." We prefer the use of the terms "contracted lawyer" and "retained
lmryer" and will address the issue accordingly.1 As described in ABA Formal Opinion
88-356:
The temporalY lawyer may work on a single matter for the firm or may work
generally for the firm for a limited period, typically to meet temporary staffing
needs of the firm or to provide special expertise not available in the firm and
needed for work on a specific matter. The temporary la"wyer may work in the
I Locum tenells is the term commonly used in the medical tield referring to physicians who take on temporary
medical assignments to with a clinic or hospital. Historically. in the legal profession. the activity has been known as
devilling. The term "Iaw-temps" is an extraction from the world of business which contracts with a temp-agency to
till a company's staff needs. We believe the term '·temporary lawyer" to be misleading with respect to the nlct that a
lawyer's obligation to a client is continuing in nature and is not viewed as temporary.
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firm's office or may visit the office only occasionally when the work requires. The
temporary lavvyer may work exclusively for the firm during a period of temporary
employment or may work simultaneously on other matters for other firms."
The contracted - retained lawyer relationship is different than a traditional co-counsel
relationship. Co-counsel relationships involve lawyers who practice independently
from each other and join together for a particular case or matter.
In this opinion we will address five issues relating to the scope and use of
contracted lawyers: competency, consent, control, compensation and conflicts.
Competency
A lmvyer always has a duty to exercise reasonable care with regard to the building
and delivery oflegal services to the client. Iowa R. Profl Conduct 32:1.1. This duty
extends to the need for assistance and selection of a lawyer to provide it. The duty is
well understood in the context of the need for specialist co-counsel on a particular
matter Rule 32:1.1 Cmt 1. But it can become more complex when a lmvyer or law firm
needs temporary legal help. The situation usually results from a volume of business that
suddenly overwhelms the law firm's legal staff. In such situations the firm is faced with
three options: Turn clients away, hire a full time associate or contract with a lawyer to
provide support services during the need. The due diligence process regarding the
selection of a contracted lmvyer is no different than that which the firm uses in selecting
an associate. The law firm must identifY the matters for which assistance is needed and
ensure that the contracted lawyer has the requisite legal expertise, is ethically sound and
is compatible with the firm and its practice. See, ABA Formal Opinion 08-451 "Lavvyer's
Obligations When Outsourcing Legal and Nonlegal Support Services" Even though the
contracted lawyer's involvement may be temporary to the client the contracted lawyer is
.
.
still a part of the law firm.
Control
Iowa Rule of Professional Conduct 32: 5.1(b) provides that "A lawyer having
direct supervisory authority over another lavvyer shall make reasonable efforts to ensure
that the other lawyer conforms to the Iowa Rules of Professional Conduct."
Importantly, in certain situations the rule makes the supervising lmvyer liable for rule
violations by the subordinate laV\ryer. Rule 5.1( c) states:
"(c) A lawyer shall be responsible for another lawyer's violation of the Iowa Rules
of Professional Conduct if:
(1) the lawyer orders or, with knowledge ofthe specific conduct, ratifies
the conduct involved; or
(2) the lawyer is a partner or has comparable managerial authority in the
law firm in which the other la\"yer practices, or has direct supervisory
authority over the other lavvyer, and knows of the conduct at a time when
its consequences can be avoided or mitigated but fails to take reasonable
remedial action."
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Rule 32:5.1 is framed within the context of intra-firm operations regarding partners and
associates. However ABA Formal Opinion 08-451 has interpreted the rule to apply to
the retained-contracted lawyer relationship:
"Although Comment [lJ to Rule 5.1 states that paragraph (b) applies to lawyers
who have supervisOly authority over the work of other la"wyers in a firm
(emphasis supplied), we do not believe that the drafters of the Model Rules
intended to restrict the application of Rule 5.1(b) to the supervision oflavvyers
within firms as defined in Rule 1.o(c). A contrary interpretation would lead to the
anomalous result that lawyers who outsource have a lower standard of care when
supervising outsourced lavvyers than they have with respect to lav.yers within
their own firm. As discussed below, the contrary is true in many respects."
We agree with ABA's interpretation. Accordingly, we are of the opinion that
Iowa R.Profl Conduct 32:5.1 (b) and (c) apply to relationships where one lawyer has
supervisory responsibility over the conduct and work product of another lawyer
regardless of whether the two lawyers are members of the same law firm. For clarity, we
note that supervisory responsibility usually does not exist in the of-counsel and cocounsel relationship. See, for example IA Ethics Opinions 13-01 and 13-04. Because
retained lavvyers have the responsibility to adequately supervise and control the services
rendered by the contracted lav\yer they should be selective in making assignments to
contracted lav.yers and diligent in supervising their work product.
Consent
Contracted lavvyers are considered part of the law firm for the contractual period.
Depending upon the need, the contracted lawyer may be assigned to several different
matters or cases. Iowa R. Profl Conduct 32:1.2(a) and32:1.4 (a)(2) require a lawyer to
consult with the client as to the means by which the client's objectives are to be
pursued. Client consent is not necessary when a firm hires a full time associate or
assigns a matter to a member who is "of-counsel." IA Ethics Opinion 13-01. However,
the necessity to obtain client consent when a law firm engages the services of a
contracted lawyer is a different matter. In one situation a master servant or employeremployee relationship may exist between the retained and contracted lavvyer; in another
the contracted lav.yer may simply be assigned to the retained lavvyer or firm by an
intermediary agency. The difference is important. The ABA has focused on the nature
of the underlying relationship in assessing the issue. ABA Formal Opinions 88-356
and 08-451 appear to draw a distinction between situations where there is an employeremployee relationship between the retained and contracted lawyer as compared to the
situation where the contracted lawyer's services were procured through an intermediary.
The ABA opinions reached the conclusion that in the employer-employee situation
client consent would be unnecessary whereas it would be needed where an intermediary
agency was involved.
Some state ethics committees have elected to follow the ABA rule, WI Ethics Op
E-96-4. Others have elected to require consent in all situations where the work
performed appears reasonably likely to be material to the representation or to affect the
client's reasonable expectations. See, NJ Ethics OP No. 284, Inquiry No. 97-1-15. Some
ethics committees opine that disclosure and consent is only necessary where the
contracted lawyer is working independently of the retained lawyer. NJ Ethics Op 689.
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The essence of the relationship is significantly different between a law firm and
an employed associate versus a Imv firm and a temporary laVlryer. The associate has
been chosen by the law firm to become part of the professional component of the fIrm,
for all purposes, for the long term. Clients are aware of the identity and reputation of
the members of the firm, including the associates, when selecting a law firm. And in the
situation where the associate joins the law firm after the client retains the firm's services
the client has the assurance that the firm has put its professional reputation behind the
employment of the associate. By contrast, contracted lawyers are temporary, provide a
limited service, do not constitute the professional component of the firm, have no
expectation of a lasting relationship with the firm and simply provide their services on
an ad hoc basis as assigned by an intermediary agency. In selecting a law firm, clients
vyill not knmv the identity of the temporary lawyer \,vho may be providing their legal
service. Consequently, we decline to adopt the ABA position. IO\va lav'\ryers who
anticipate engaging the services of a contracted laVlryer should do so with the consent of
their client.
For clarification, we emphasize the fact that lawyers who are employed as part
time associates by a law firm or who are in an "of-counsel" relationship with a law firm
are not considered contracted lawyers. Client consent to utilize their services is not
needed. They are considered part of the law firm and the implied authorization
regarding the sharing of confidential information within a firm would extend to them by
operation of Rule 32: 1.6(a) and its Comment [5].
Compensation
The nature and amount of compensation to be paid the contracted lawyer and
when and how it is to be paid is a matter of contract between the contracted and
retained hmryers. Because a contracted lawyer is considered to be part of the firm, albeit
for the duration of the contract period, the firm can utilize the services of the contracted
laVlryer, and bill as it would in the case of an associate. The same calculus used in
determining an associate's billing rate or charges should be used to determine the billing
rate or charges for the contracted lawyer. However the retained lawyer should be
cautious when charging the contracted lawyer's charges as an expense. ABA Formal
Opinion 00-420 addresses the issue:
"When costs associated with legal services of a contract lav"Ter are billed
to the client as fees for legal services, the amount that may be charged for such
services is governed by the requirement of Model Rule 1.5(a) [of the Rules of
Professional Conduct] that a lawyer's fee shall be reasonable. A surcharge to the
costs may be added by the billing lawY'er if the total charge represents a
reasonable fee for serv'ices provided to the client. When legal services of a
contract lawyer are billed to the client as an expense or cost, in the absence of
any understanding to the contrary \vith the client, the client may be charged
only the cost directly associated with the services, including expenses incurred
by the billing lawyer to obtain and provide the benefit of the contract lawyer's
services.
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Subject to the Rule 1.5(a) mandate that 'a lawyers fee shall be reasonable,' a
lavvyer may, under the Model Rules, add a surcharge on amounts paid to a
contract lavvyer when services provided by the contract lawyer are billed as legal
services. This is true whether the use and role of the contract lavvyer are or are
not disclosed to the client. The addition of a surcharge above cost does not
require disclosure to the client in this circumstance, even when communication
about fees is required under Rule 1.5(b). If the costs associated with contracting
counsel's services are billed as an expense, they should not be greater than the
actual cost incurred, plus those costs that are associated directly \vrith the
provision of services, unless there has been a specific agreement with the client
othenvise."
ABA Comm. on Ethics & Profl Responsibility, Formal Op. 00-420 ("Surcharge to
Client for Use of a Contract Lawyer"), at 1, 3 (Nov. 29,2000).
We adopt the ABA's rationale permitting a surcharge or markup on top of
payments made to the contract lawyer: When the retained lmV'yer bills the contracted
lavvyer's charges as fees, and not an expense, there is an expectation that the retained
lawyer has either supervised the work of the contract lawyer or has adopted that work as
his or her own and accordingly stands by it.
Conflicts
Iowa Rule of Professional Conduct 32: 1.7, 1.9 and 1.10, regarding conflicts of
interest and imputed conflicts of interest, apply equally to associates, partners or
contracted lawyers. Consequently, care must be exercised to identify possible conflicts
when choosing the contracted lawyer. Likewise at the conclusion of the contractual
period, the contracted lavvyer owes a duty to the firm's clients for which work was
performed. Rule 32: 1.9.
However a problem arises regarding imputed conflicts under Rule 32: 1.10. For
example, under a strict reading of the rule a contracted lavvyer is considered "associated
with" the law firm for all ethical matters. This creates the situation where a contracted
lawyer is assigned to a specific case for a particular client. After leaving the firm the
contracted la"wyer takes an assignment in another law firm that has other cases against
the prior law firm. Under a strict reading of rule 32: 1.10 the subsequent law firm could
be subject to disqualification because the temporalY lawyer had been "associated with"
the prior law firm. In ABA Formal Opinion 88-356, the ABA has taken the position that
contracted la'wyers should not necessarily be treated as "associated with" the law firm
that hires them for purposes of imputed disqualification. In doing so it has formulated a
"functional analysis" test focusing on the direct connection between the contracted
laV\ryer and the work that the lavvyer performed for the clients, if any, with conflicting
interests. The ABA opinion concluded that screening is permissible for contracted
lav\ryers moving from firm to firm:
"In order to minimize the risk of disqualification, firms should, to the extent
practicable, screen each Lawyer Temp from all information relating to clients for
which the Lavvyer Temp dos not work., All law firms employing Lavvyer Temps
also should maintain a complete and accurate record of all matters on which each
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La-wyer Temp ;,vorks. A Lawyer Temp working with several firms should make
every effort to avoid exposure within those firms to any information relating to
clients on whose matters the Lm'\'yer Temp is not working. Since a Lmvyer Temp
has an equal interest in avoiding future imputed disqualification, the La'Aryer
Temp should also maintain a record of clients and matters worked on."
"While we agree with ABA Formal Opinion 88-356 we caution that in some
situations screening measures may not be practical or possible and that the efficacy of
screening cannot always be guaranteed. Consequently the burden rests with the
contracted lawyer to recognize direct conflicts and to avoid placement in law firms that
represent clients adverse to the contracted lawyer's current or former clients.
Conclusion
Contract lavvyering can provide benefits to both the contracted and retained
la'wyer and law firm. However both parties - the contracted lm\ryer and the retained
lawyer and law firm - must exercise due care to ensure that the scope and nature of the
contracted services are well defined and that the potential for cont1icts of interest and
imputed cont1icts of interest are identified.
For the Committee,
NICK CRITELLI, Chair
Iowa State Bar Association
Ethics and Practice Guidelines Committee
NC:em
N-17
August 27, 2013
Mr. Dwight Dinkla
Executive Director
Iowa State Bar Association
625 East Comi
Des Moines, IA 50309
RE: IA Ethics Opinion 13-04 Mentor-Mentee Relationships
Dear Mr. Dinlda,
The Iowa Bar has a rich history of mentoring and training nevv lawyers. Recently
the Committee has been asked to give guidance regarding the parameters of client
confidentiality as it relates to the mentoring relationship when the mentor and men tee
are not in the same law firm. Can client confidential information be passed between the
mentor and mentee for training purposes? The issue arises when the men tee seeks
guidance from the mentor regarding a matter in which the mentee is involved, or
conversely, when the mentor is attempting to guide and train the mentee regarding a
specific aspect of the practice of law. Resolution of the issue is necessary in order to
define the nature and scope of a meaningful mentor-mentee relationship.
The terms mentor and mentorship are relatively new to the legal profession.
However the concept of lawyer-to lavvyer training is as old as the profession itself.
Historically lawyers have provided legal education to aspiring members of the bar and
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training to its new members. However, the structures by which the training has been
offered vary greatly, from pupillage or devilling, afforded by historical Inns of Court,
and the mid-nineteenth century American concept of "reading" 1aw 1 to the informal
curbstone Im.,vyer-to-lawyer chat and its modern version - the Internet list serve.
Recognizing the need for training, the Iowa State Bar Association and other state
bars have adopted mentorship programs and have encouraged members of the bar to
enter into mentorship relationships with newly admitted lawyers. 2 The complexity of
these programs vary from the highly organized Illinois and Ohio programs:3 to the more
informal Iowa State Bar Association's Rural Practice Committee and the YLD's
Professional Development Committee. Regardless of the program's formality or
complexity the essence mentorship is problem-solving, emphasizing analytical
assessment, strategic development, tactical execution and communication. However all
of these factors require a dialogue involving real issues. Whether that dialogue can even
occur, and if so its extent, is the subject of this opinion.
Mentoring vvithin the confines of one's own law firm is addressed in Iowa R.
Prof} Conduct 32: 5.1. Comment [5] states that:
"... Partners and lawyers with comparable authority have at least indirect
responsibility for all work being done by the firm, while a partner or manager in
charge of a particular matter ordinarily also has supervisolY responsibility for the
work of other firm la""yers engaged in the matter."
Client confidentiality,within the confines of the law firm, is addressed by Iowa R. Profl
Conduct 32: 1.6 Comment [5]
"... Lav"yers in a firm may, in the course of the firm's practice, disclose to each
other information relating to a client of the firm, unless the client has instructed
that particular information be confined to specified lawyers."
*
I Iowa Code 1935,
I0908. Qualifications/or admission. Every applicant lor such admission must be at least
twenty-one years of age. of good moral character. and an inhabitant of this state, and must have actually and in good
faith pursued a regular course ofstu(~v of/he law/or at least threefidl.vears. either il1 the ojJice o/a member ql
rhe bar il1 regular practice qfthis state or other state. or ofa judge (!f a court of record thereof or in some reputable
law school in the United States. or partly in such office and partly in such law school; but, in reckoning such period
of study, the school year of any such law school. consisting of not less than thirty-six weeks exclusive of vacations,
shall be considered equivalent to a full year. Every slIch applicant for admissionl11ust also have actually and in
good lilith acquired a general education substantially equivalent to that involved in the completion of a high school
course of study of at least four years in cxtent. (Emphasis added).
2 In 2009 the Iowa Supreme Court recognized the need fix basic skill development for the newly admitted lawyer
and adopted Iowa Sup. Ct. R. 41.12( I). The rule requires every lawyer admitted by examination, within one year of
their admission. to take an eight hour Basic Skills Course covering civil procedure: criminal law: criminal
procedure: family law; guardianships; conservatorships. trusts and powers of appointment: business entities;
probate; to!'ts: contracts: real estate transactions and ethics and protessionalism. R.41.12(2). However the issue of
training was left to the bar to address .
.l See tSr example. Illinois:
and Ohio:
hup:!/wvvw.supremecouli.ohio.gov/AttySvcs/mentoring/.
N-19
Consequently no issue of confidentiality arises when the mentorship relationship occurs
vvithin the law firm.
However a significant problem does occur when the mentoring relationship
occurs outside of the parameters of a law firm. This can happen in two instances. A
lawyer mentored within a law firm may be assigned to a lawyer outside of the law firm
who specializes in an area of the law that the firm does not practice. Or, the
relationship may exist between a mentor-mentee who are not in the same law firm.
Mentoring external to one's law firm directly impacts Iowa R. Prof I Conduct 32: 1.6.
Comment [5], prohibiting the disclosure of client confidential information ,'\ithout the
express consent of the client.
The American Bar Association addressed the subject, not as it concerns the
mentor-mentee relationship, but the more common and informal lawyer-to-Iawyer
consultation and list serve discussions. ABA Formal Opinion 98-411 commented that
"A consultation that is general in nature and does not involve disclosure of client
information does not implicate Rule 1.6 and does not require client consent." It also
opined that "the consulting lawyer can 'suppose' a set of facts and frame an issue
without revealing the identity of his client or the actual situation."
Other state ethics committees addressing the problem have come to the same
conclusion, See, for example IL Ethics Op 12-16 :
"Lawyer A may discuss general information relating to discovery procedures with
his or her mentor, Lawyer B. However Lawyer A should take caution not to revea]
any information relating to the representation of a particular client with Lawyer
B. Moreover, both Lawyer A and La,,\;yer B should avoid the creation of a conflict
of interest with any existing or former clients by virtue of the creation of the
mentoring relationship."
This is good advice for general consultations and computer list serves, but it does
not further training within the scope of the mentorship. The inability to discuss real life
situations strikes at the very heart of the mentor-mentee relationship. While it is
possible to phrase discussions in the hy-pothetical form, the practice often results in
over-scrubbing the salient details to the extent that the learning point is lost.
Consequently if a mentorship is to be meaningful it must be something more than a
casual or social relationship and must be accomplished vvithin the parameters of an
ethical construct that will alIov\' full discussion of real life problems.
Absent specific consent by the client there are only four relationships that would
allow disclosure under Iowa R. Profl Conduct 32: 1.6 Comment [5]:
It
•
An employer-employee relationship, Iowa R. Profl Conduct 32: 5.1;
a co-counsel relationship; Iowa R. Profl Conduct 32: 1.7;
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$
•
an of-counsel relationship; IA Ethics Opinion 13-01
Contracted -Retained lavvyer relationship; IA Ethics Opinion 13-03.
An internship 'within the parameters of the employer-employee relationship, as
discussed above, is common and an exchange of client information is permissible under
Iowa R. Prof! Conduct 32: 1.6 Comment [5]. Likewise, while it is possible to use a cocounsel relationship as a basis for mentorship training, it will, by its very nature, be
limited to that one specific matter and require the mentee to enter into a direct attorneyclient engagement with the client. It is possible to build a mentorship relationship
using the contracted-retained lawyer relationship described in IA Ethic." Opinion 13-03,
however doing so creates a logistical burden for the mentor who vyill be required to
anticipate which client's matter will most likely be used during the mentorship and
obtain the client's consent.
The last alternative, and we believe the best, is the of-counsel relationship. It
suffers from none of the restrictions discussed above. As described in 1t\. Ethics Opinion
13-01 the of-counsel lawyer is considered part of the law firm for all ethics purposes.
Consequently and an exchange of client information is permissible under Iowa R. Prof!
Conduct 32: 1.6 Comment [5]. Client consent is not required because the of-counsel
lawyer is considered part of the law firm. With the consent of the law firm, the men tee
can form multiple of-counsel relationships with mentors from differing fields of practice
provided, however, that they all understand the potential for direct and imputed
conflicts of interest as described in IA Ethics Opinion 13-01.
Conclusion
Iowa lawyers are encouraged to form mentorship relationships. Both the
profession and the administration of justice benefit from a legal profession that is well
formed and trained. However in doing so lawyers should remember that their duty to
train the profession is secondary to their duty to the client. Using a formal, albeit time
limited, of-counsel relationship to facilitate the mentorship relationship provides the
ability to discuss real life situations as needed during the period of the relationship,
while maintaining the degree of confidentiality required by Iowa Rules of Prof! Conduct
Iowa R. Prof! Conduct 32: 1.6.
For the Committee,
NICK CRITELLI, Chair
Iowa State Bar Association
Ethics and Practice Guidelines Committee
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August 19, 2013
Mr. Dwight Dinkla
Executing Director
Iowa State Bar Association
625 East Court
Des Moines, IA 50309
RE: IA Ethics Opinion 13-05 Co-Counsel Relationships
Dear Mr. DinkIa,
The Committee has been asked to provide guidance regarding the nature and
scope of the co-counsel relationship. A co-counsel relationship exists when two or more
lawyers, not in the same firm, represent the client on the same matter. The relationship
finds its inception in several ways. A client may request a lavvyer to bring in additional
counsel, a lawyer may advise the client that co-counsel is needed or a third party, such
as insurance company, may provide counsel even though the client has personal
counsel. Regardless of the inception, when two or more lawyers ,,,,ork together for a
single client a co-counsel relationship is formed. In this opinion we vl'ill address the
duties of the laV\ryers to each other and to the client.
Independent Overriding Obligation to the Client
It is important to keep in mind that in all co-counsel relationships each lawyer
owes an independent overriding duty of care to the client. Iowa Rule of Profl Conduct
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32: 2.1 states that "In representing a client, a lawyer shall exercise independent
professional judgment and render candid advice." Rule 32.1. 7 prohibits a lawyer from
representing a client if the representation of that client may be materially limited by the
la',vyer's responsibilities to another client or to a third person, or by the lmvyer's own
interests. These rules make it clear that while a fiduciary relationship exists bet\veen
each lawyer and the client there is no fiduciary duty ofloyalty as between the Im"yers.
Were it otherwise, a division of loyalty could occur between the laV\;yers and the client.
Consequently, a lawyer engaged in a co-counsel relationship must always maintain the
ability to communicate openly and freely with each other and vvith the client.
Duty of Mutual Cooperation
Because co-counsel owe the same fiduciary duty of loyalty to the client, they have
an obligation to cooperate with each other to accomplish the client's goals. 'When
disagreements cannot be resolved, Iowa Rule Profl Conduct 32: 1.4(b) require the
laV\;yers to "explain a matter to the extent reasonably necessary to permit the client to
make informed decisions regarding the representation."
Limitation of Authority
Unless specifically defined, co-counsel relationships are viewed as joint ventures.
Iowa Rule of Profl Conduct 32: 1.2(C) provides that
"a lawyer may limit the scope of representation if the limitation is reasonable
under the circumstances and the client gives informed consent."
Consequently co-counsel are able to delineate the scope of their respective work
provided, of course, that the client gives informed consent. Rule 32:1.0 specifies that:
" Informed consent" denotes the agreement by a person to a proposed course of
conduct after the lav\;yer has communicated adequate information and
explanation about the material risks of and reasonable alternative to the
proposed course of conduct."
La,,,,yers contemplating a co-counsel relationship would be well advised to define the
scope, nature and limitations of their duties in writing ,,,ith the client.
Division of Fees
Iowa Rule of ProfI Conduct 32: 1.s(e) provides that:
" A division of a fee between la\\yers who are not in the same firm may be made
only if:
(1) the division is in proportion to the services performed by each la,,,,yer or each
lawyer assumes joint responsibility for the representation;
N-23
(2) the client agrees to the agreement, including the share each lmvyer will
receive, and the agreement is confirmed in writing; and
(3) the total fee is reasonable."
Comment 7 makes clear that "a division of fee is a single billing to a client
covering the fee of two or more lav,ryers who are not in the same firm." This would be
the case in the typical contingent fee. Fees strictly for referring a matter to another
la"vyer are not allowed. The rule provides two measures for dividing a fee: The
proportion of the services performed or the assumption of joint responsibility.
Consequently a lmvyer may be justified in receiving a fee without actually performing
the legal services provided that the lavvyer is ,villing to accept joint responsibilityliability- for the case. In doing so, the lawyer should be mindful that courts generally do
not allow suits as between co-counsel for damages resulting from malpractice or breach
of fiduciary duty, whereas they to allow claims of indemnity or contribution in relation
to a malpractice claim brought against them by the client. See, Professional
Responsibilities of Co-Counsel: Joint Venturers or Scorpions in a Bottle?, 98 Ky.
L.J-461, 464 (2010)
However co-counsel are not limited to being compensated by dividing a single
fee. In many situations co-counsel may charge a fee calculated upon their individual
service, such as an hourly or unit rate or a flat fee, IA Sup.Ct. R. 45.10. In those
situations the fee that is charged must comply with the reasonableness standard
described in Iowa Rule of Profl Conduct 32:1.5.
Imputed Conflicts of Interest
Co-counsel are independent counsel and are not considered "associated in a firm"
for the purpose of imputed disqualification under Iowa Rule Profl Conduct 32: 1.10.
Comment [1] provides that: "For purposes of the Rules of Professional Conduct, the
term "firm" denotes lawyers in a law partnership, professional corporation, sole
proprietorship or other association authorized to practice law; or la,,,,yers employed in a
legal services organization or the legal department of a corporation or other
organization."
Conclusion
When contemplating a co-counsel relationship, Iowa la,,,,yers are advised to
reduce the terms of the relationship to writing and obtain the client's informed consent.
In those situations where a division of fee is contemplated, the fee division must be
based either upon services performed or assumption of responsibility and the client
N-24
must consent in writing to the agreement, including the share each lawyer will receive.
For the Committee,
NICK CRITELLI, Chair
Iowa State Bar Association
Ethics and Practice Guidelines Committee
N-25
August 6, 2013
Mr. Dwight Dinkla
Executive Director
Iowa State Bar Association
625 East Court Avenue
Des Moines, IA 50'30'9
RE: IA Ethics Opinion 13-0'2 Pro Hac Vice Counsel
Dear Mr. Dinkla,
The Committee has received several requests for clarification regarding
the duties and responsibilities of Iowa lawyers who agree to sponsor the
admission of non-Iowa lawyers pro hac vice. The situation arises when a
client engages the services of a lmvyer who is not admitted to practice law in
Iowa to provide legal services in Iowa. Practicing Imv in Iowa without being
authorized to do so by the Iowa Supreme Court is illegal and constitutes the
unauthorized practice oflaw. Furthermore, an Iowa lawyer who assists
another in the unauthorized practice of la\v violates Iowa R. Prof'l Conduct
32: 5.5 and is subject to professional discipline. The practice oflaw in Iowa is
an activity that is highly regulated by the Iowa Supreme Court.
Local Counsel and Pro Hac Vice
In order to be admitted pro hac vice, a non-Iowa lawyer must comply
with Iowa Sup.Ct. R. 31.14. That Rule requires a certain level of participation
N-26
by an Iowa lavvyer in the court or agency proceedings. The term "local
counsel" has crept into our legal lexicon to describe the Iowa lawyer whose
participation is required in order for the out-of-state lmvyer to be admitted
pro hac vice.
Unfortunately, some have come to view the role of the "local" counsel
as subservient to the non-Iowa lavvyer who vvill, in effect, be the "lead"
counsel. While some states may view the role of the "local" lawyer to be
nothing more than a mail drop, Iowa does not. In Iowa there is no such thing
as "local counsel" vvithin the meaning ascribed above. At best, the
relationship is one of "co-counsel" with the Iowa lawyer having certain
responsibilities to both the client and the court. With this in mind, we turn to
an analysis of the Iowa rules regarding pro hac vice admission.
Full vs Limited Bar Admission
Bar admission rules are found at Iowa Sup.Ct R. 31. The rule provides
for two types of admission, full and limited. Full admission is acquired by
qualifying for and passing the bar examination, (Iowa Sup. Ct. R. 31.3) or by
being qualified for and being admitted upon motion, (Iowa Sup.Ct. R. 31.12).
Limited admission is offered in two instances: to qualified non-Iowa lawyers,
(Iowa Sup.Ct.R. 31.14), and to qualified law students, (Iowa Sup.Ct. R. 31.15).
In exchange for not having to sit a bar examination or undertake the
procedure to be admitted on motion, those individuals who accept limited
admission privileges do so subject to the provisions of the rules regarding
sponsorship and supervision. For example, under Rule 31.14 a non-Iov{a
lawyer must be sponsored by a fully admitted Iowa lawyer who must be
vvilling to undertake certain supervisOly duties, (Iowa Sup. Ct. R, 31.14(3)).
Likev'Vise, a law student must be qualified by the dean of the law school and
operate under the supervision of a fully admitted member of the bar, (Iowa
Sup.Ct. R 31.15).
Limitation on Pro Hac Vice Lawyers
The rights of pro hac vice lawyers are further limited by the
requirements that:
•
The Iowa lavvyer must "actively" participate in the matter as
counsel of record or co-counsel with the non-Iowa lawyer, (Iowa Sup.
Ct. R 31.14(3)(b) and Iowa R. of ProfI Conduct 32:5.5(c)(1),
hereinafter referred to as the "Active Participation Rule") and
"... the in-state lawyer who is co-counselor counsel of record for
that client in the proceeding remains responsible to the client and
responsible for the conduct of the proceeding before the court or
agency ... " (Iowa Sup. Ct. Rule 31.14(3), hereinafter referred to as the
"Responsibility for Conduct Rule.")
N-27
In essence, the Active Participation and the Responsibility for Conduct
rules operate as substitutes for the requirement of admission by examination
or upon motion to ensure the court and the client that legal services win be
rendered consistent \'\lith the standard of care associated \yith a fully admitted
Iowa lavvyer.
Responsibility for Conduct Rule
The Responsibility for Conduct rule places a heavy burden on Iowa
lawyers who agree to sponsor the admission of pro hac vice lawyers. The duty
is owed to both the client and the court. Regarding the client, the
Responsibility for Conduct rule requires that the Iowa lavvyer forego the
opportunity to limit the nature and scope of the Iowa lavvyer's representation
to the client, a right that would otherwise exist under Iowa R. of Profl
Conduct 32:1.2(C). Likewise, Iowa lawyers have collaboration, consultation
and advisory responsibilities to clients which include the obligation to
engage in strategic planning dialogue,( Iowa R. of Prof'l Conduct 32:1.4(a)(2))
as well as an obligation under Iowa R. of Prof1 Conduct 32:1.4(b) to educate
the client. The Responsibility for Conduct rule prevents these obligations
from being delegated to the pro hac vice lm'\tyer or otherwise limited by the
Iowa Im'ryer under Iowa R. ofProf'l Conduct 32:1.2(C).
Active Participation Rule
The purpose of the Active Participation rule is to provide the client and
the court with the assurance that the matter ""rill be handled consistent \'\tith
the standard of care and professionalism demanded of a fully admitted Imva
lavvyer, as an officer of the court. Indeed, Iowa courts have held Iowa lawyers
liable for the misdeeds of the pro hac vice lawyers, Ideal Instruments, Inc. v.
Rivard Instruments, Inc. 243 F.R.D. 322, 348 (N.D. Iowa, 2007) imposing
Fed R. Civ. P. 11 sanctions. See also, "Professional Responsibilities of CoCounsel: Joint Venturers or Scorpions in a Bottle?" 98 KY L.J. 461.
We believe that the Active Participation rule is designed to complement
the Responsibility for Conduct rule such that one cannot fully conduct
litigation unless one actively participates in it. We recognize that there are
certain limited situations where the pro hac vice lawyer can operate \vithout
the presence of the Iowa lawyer. However, to be consistent ,,,ith the Active
Participation and Responsibility for Conduct rules it is the Iowa lawyer who
must determine what they are and set the operational parameters. For
example, after due diligence an Iowa lawyer may determine that his or her
attendance at a deposition taken solely for discovery purposes is not necessary
because the deposition is not likely to be used in evidence or to support a
motion during litigation. In that situation the Iowa lawyer may be justified in
allowing the client to be represented by the pro hac vice lavvyer and not run
afoul ofIowa R. of Profl Conduct 32:5.5 which prohibits assisting the
unauthorized practice of law.
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Lastly, both the Responsibility for Conduct and Active Participation rules
must be read in the context of the co-counsel relationship that exists between
the lavvyers and the reasonable division of duties between them. See, for
example, Macawber Engineering, Inc. v Robson & Miller 47 F. 3d 253, 257-8
(8 th Cir. 1995) where the court, applying similar Minnesota law, found no
duty on local counsel to supervise the performance of pro hac vice counsel.
Conclusion
In Iowa the term "local" counsel must be understood in the context of
Io-wa Supreme Court Rule 31 pertaining to professional regulation and the
Iowa Rules of Professional Conduct. La\vyers practicing in a limited
capacity as pro hac vice do so only by operation of the fact of their
sponsorship by a fully admitted Iowa lawyer who must, at all times, actively
participate and take responsibility for the conduct of the matter before the
Iowa court or agency. The Iowa lawyer may, after exercising due diligence,
exercise discretion in determining the level of participation required by Iowa
Sup.Ct. R. 31.14(3). However in doing so the Iowa lavvyer should be guided by
the overriding ethical obligations to the client.
For the Committee
Nick Critelli, Chair
Iowa State Bar Association
Ethics and Practice Guidelines Committee
NC:em
N-29
IOWA STATE BAR ASSOCIA nON
COMMITTEE ON
ETHICS AND PRACTICE GUIDELINES
NICK CRITELLI,
JO, CHAIRMAN,
DAN MOORE • .ID. SIOUX CITY.fA
317 SIXTH AVENUE
SUITE 950
DES MOINES. IA 50309
DAVE PHIPPS • .ID.DES MOINES. fA
I::RIC LAM . .ID. CEDi\R RAPIDs. fA
TIMOTHY SWEET • .ID. REINBECK. fA
515.243.3122
[email protected]
October 17, 2007
Mr. Dwight Dinkla
Executive Director
Iowa State Bar Association
521 E. Locust
Des Moines, IA 50309
Re:
Opinion 07-08
(Retaining Lien- Client Files)
Dear Mr. Dinkla:
We have been asked to opine on the apparent conflict between
the use of the lawyer's retaining lien found in §602.l0ll6(1)IOWA
CODE(2007)and Iowa Rule of Professional Conduct 32:l.l6(d).
OPINION
An Attorney may not assert a statutory retaining lien
against a client's original documents if, by doing so the client
would be otherwise prejudiced
ANALYSIS
IOvIa Code §602.l01l6(1)
(2007) provides:
An attorney has a lien for a general balance of
compensation upon:
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1Any papers be
to a client which have
come into the attorney's hands in the course of
professional employment.
In addition, Rule 32:1.16 dl provides:
(dl
Upon termination of representation, a
lawyer shall.
. protect a client's interests,
such as . . . surrende
papers and prope
to
which the client is entitled . . . . The lawyer
may retain papers relating to the client to the
extent permitted by law.
The lien created by Iowa Code §602.116(1) is known as a
"retaining lien" or a "general lien." Tri City Equipment Co. v.
Modern Real Estate Investments, Ltd., 460 N.W. 2d 464, 466 (Iowa
1990); Feaker v. Bulicek, 538 N.W. 2d 662, 663 (Iowa App. 1995).
This general or retaining lien "operates on any property,
including client's documents . • . in the attorney's hands that
belong to a client until such client pays the attorney for fees
due." Tri City Equipment, 460 N.W. 2d at 466; Feaker, 538 N.W.
2d at 663.
Such a retaining lien is "an exception to the rule of
professional conduct that prohibits an attorney from acquiring a
proprietary interest in the client's case." Iowa Supreme Court
Board of Professional Ethics & Conduct v. McKittrick, 683 N.W. 2d
554, 561 (Iowa 2004).
Consistent with the last sentence in Rule
32:1.16(d) (formerly DR 2-110), "this exception applies only to
liens 'granted by law.'" McKittrick, 683 N.W. 2d at 561. Most
recently, Justice Wiggins observed:
While it is not unethical for a lawyer to engage in fee
collection practices against a former client, the
practice employed to enforce a collection should be
carefully scrutinized.
Illegal, aggressive, and
improper collection practices can lead to disciplinary
actions against attorneys, as can the use of attorney
liens and confessions of judgment.
Iowa Supreme Court Attorney Disciplinarv Board v. Powell, 726
N.W.2d 397, 404 (Iowa 2007).
For example, in Iowa Supreme Court
Attorney Disciplinary Board v. Earley, 729 N.W. 2d 437 (Iowa
2007), the client hired the respondent attorney, but the
respondent attorney "took no action . . . despite [the client's]
numerous attempts to contact him." Id. at 440.
Later, the
client and a new attorney requested that the respondent attorney
provide him with a copy of the file.
The respondent attorney did
not respond, "nor did he make any arrangements to provide the
file to either [the client] or her attorney." Id.
The Court
2
N-31
found that such inaction violated DR 9-l02(b) (3), which then
required a lawyer to ~promptly deliver to the client the
proper~les in the possession of the lawyer that the client is
entitled to receive. u Id. at 442.
Similarly, in Iowa Supreme
Court Attornev Disciplinary Board v. Bjorklund, 725 N.W. 2d 1
(Iowa 2006), the re
attorney received a flat fee of
$1,500 to represent the client in an OWl charge.
The client
"appeared in court on two occasions for his sentencing, only to
learn that the matter had been continued. u Id. at 9.
Respondent
attorney's office was "aware of the continuance, but had not
notified u the client.
Id.
The client then wrote the respondent
attorney, asking the respondent attorney to withdraw from the
case, ~requesting a refund of any unearned funds, and asking that
his file be mailed to him.u Id.
The respondent attorney
informed the client that "he was not entitled to a refund,u and
"offered to send a copy of [the] file upon payment of $25 to
cover copying and postage. u Id.
The Court found the respondent
attorney's "failure to return his client's file was a violation
of DR 2-110 (AI (2) .
Id.
Last but not least, in Cornrni ttee on
Professional Ethics and Conduct v. Nadler, 445 N.W. 2d 358 (Iowa
1989), the Court cited with approval a "general rule u that
"[pJroperty or funds delivered for a special purpose by a client
to his attorney cannot constitute the subject matter of a
retaining lien in favor of such attorney.H Id. at 361 (citing 7A
C.J.S. Attorney and Client §377).
In Nadler, the respondent
attorney negotiated successfully a settlement on the client's
behalf, and the client then gave the respondent attorney $500 to
be used to pay toward the settlement.
The respondent attorney
then "asked for payment on his fees as well. u Id.
The client
"was not prepared to comply.
So instead of advancing the $500 to
[the client's] creditor, [the respondent attorney] retained the
sum to secure his own fee, claiming an 'attorney's lien' under
Iowa Code §602.10116. u
Id.
The Court found such action violated
then EC 9-6, because "by keeping his client's money instead of
applying it to the purpose for which he received it, [the
respondent attorney] clearly failed to seek the lawful objective
of his client and prejudiced his client's cause in violation of
DR 7-101 (AI (1), and (2), and (3)." Id.
U
Based on the language of Rule 32:1.16(d) and the Iowa
Supreme Court opinions discussed supra, we are of the view that
while it is generally proper for Attorney to assert a retaining
lien against a client's original documents, it would be improper
to do so if the retention of such documents will prejudice the
rights of the client.
The secondary, related issue is what constitutes "prejudice"
such that Attorney might counsel against assertion of a retaining
3
N-32
lien. In that context, the Annotated Model Rules of Professional
Conduct (5 Ed. ), published
the American Bar ]\ssociation
(2003), at p. 275, provides the following discussion:
State jurisdictions interpreting Rule l.16(d) and the
corresponding rule under the Mode Code generally have
held that a lawyer's legal ri
to execute a lien
granted by law to secure a fee or expense is
subordinate to ethical obligations owed to the client.
See, e.g., Defendant A v. Idaho State Bar, 2 P.3d 147
(Idaho 2000) (no violation in retaining client's
to insure payment of outstanding fees when lawyer made
file available to new counsel to copy and no imminent
prejudice to client); Ferguson v. State, 773 N.E.2d 877
(Ind. Ct. App. 2002) (trial court erred by denying
inmate's motion to compel delivery of papers and
unearned fee; hearing should have been held to
determine whether lawyer possessed any documents not
previously provided and amount of unearned fees, if
any); Campbell v. Bozeman Investors of Duluth, 964 P.2d
41 (Mont. 1998) (discharged lawyers claiming possessory
lien failed to protect client's interests by retaining
file when claim still pending); Averill v. Cox, 761
A.2d 1083 (N.H. 2000) (lawyer required to bear cost of
retaining copy of client's file; client's
belongs
to client and, upon request, lawyer must provide it to
client); In re Tillman, 462 S.E.2d 283 (S.C. 1995)
(lien inappropriate; lawyer failed to establish that
client deliberately failed to pay clearly agreed-upon
fee); Ky. Ethics Op. E-395 (1997) (upon termination of
representation, lawyer must give file to client and may
not retain file due to fee dispute); Miss. Ethics Op.
144 (1988) (if retention of file will prevent client
from obtaining another lawyer or proceeding with case
in timely matter, lawyer has breached ethical duty owed
to client under Rule 1.16); N.Y. State Ethics Op. 591
(1988) (lawyer may not ethically assert retaining lien
on client's papers to enhance ability to negotiate
general release from liability); Pa. Ethics Op. 96-157
(1996) (revised) (lawyer must give file to former
client if failure to do so would substantially
prejudice client's interests, even though lawyer has
valid retaining lien on file for outstanding costs) .
Perhaps the appellate court in Oklahoma best summarizes the
consideration as follows:
The rule imposes a mandatory obligation on an attorney
4
N-33
to mitigate the consequences of the severed attorneyclient relationship, and requires the attorney to
"surrender" the client's papers.
The rule also permits
an attorney to retain the client's papers to secure
payment of earned and unpaid fees, but only as allowed
by law.
The contrast between the mandatory obli
ion
to surrender the client's papers, and the permissive
retention right, suggests to us that, all other things
being equal, the right of the client to possession of
his or her books and papers prevails over the
attorney's retaining lien rights in the case of
conflict between the two.
This must be so because the
assertion of a retaining lien that causes prejudice to
a client is inconsistent with the lawyer's continuing
duty to his client, particularly since other legal
methods are available to collect the fee.
So, in a
conflict between an attorney's retained possession and
prejudice to the client, a balancing of the competing
rights must be undertaken.
Britton and Gray, P.C. v. Shelton, 69 P. 3d 1210, 1214-15 (Okla.
App. 2003) (emphasis is original).
In conclusion, the Committee suggests that while it may be
proper for an attorney to assert a retaining lien and keep the
client's files until the lien and underlying unpaid fee have been
satisfied and paid, assertion of the lien should only be made
only if retention of the file clearly does not prejudice the
client.
If there is any hint or potential for prejudice, the
attorney should err on the side of releasing the files and not
asserting the retaining lien.
The current language of Rule
32:1.16(d) and interpretive case law from the Iowa Supreme Court
and from other jurisdictions mandate this conclusion.
For the Committee,
Nick Critelli, Chair
5
N-34
NEBRASKA ETHICS ADVISORY OPINION FOR LAWYERS NO 12-09
Upon termination of representation, a lawyer shall take steps to the
extent reasonably practicable to protect a client's interests, including
surrendering papers and property to which the client is entitled, although
the lawyer may retain papers relating to the client to the extent permitted
by other law.
QUESTION PRESENTED
What are the lawyer's ethical duties to release the client's file when the law
firm has a written express consent for the firm to acquire a lien on the file to secure
the lawyer's fees or expenses?
FACTS
The client signs a retainer agreement with the law firm providing express
consent for the law firm to acquire a lien on the file to secure the lawyer's fees or
expenses.
The attorney/client relationship is then terminated, and there is a
balance owing on the client's account. The client requests that the law finn release
her file to her so that she can provide it to her new attorney. The law firm refuses to
release the client's file, because they claim a balance due and owing on the client's
account.
RULES OF PROFESSIONAL CONDUCT
Section 3-501.16(7)(d): "Upon termination of representation, a lawyer shall
take steps to the extent reasonably practicable to protect a client's interests, such as
giving reasonable notice to the client, allowing time for the employment of other
2925
N-35
counsel, surrendering papers and property to which the client is entitled, and
refunding any advance payment of fees or expense that has not been earned or
incurred. The lawyer may retain papers relating to the client to the extent
permitted by other law ...
Assisting the Client Upon vVithdrawal
[9]
Even if the lawyer has been unfairly discharged by the client, a lawyer
must take all reasonable steps to mitigate the consequence to the client.
The
lawyer may retain papers as a security for a fee only to the extent permitted by
law.
(See Rule 1.15.)
Section 3-501.15(d): "Upon receiving funds or other property in which a
client or third person has an interest, a lawyer shall promptly notify the client or
third person.
Except as stated in this rule or otherwise permitted by la\" or by
agreement with the client, a lawyer shall promptly deliver to the client or third
person any funds or other property that the client or third person is entitled to
receive, and, upon request by the client or third person, shall promptly render a full
accounting regarding such property.
DISCUSSION
Nebraska Ethics Advisory Opinion for Lawyers No. 01-3 provided: AN
ATTORNEY HA.8 AN ETHICAL OBLIGATION, UPON DElVlAND, TO PROMPTLY
PROVIDE A CLIENT WITH THE CONTENTS OF THE FILE BELONGING TO
THE CLIENT.
WHAT THE CLIENT MAY BE ENTITLED TO RECEIVE
2926
N-36
DEPENDS ON THE NATURE OF THE WORK, 'rHE AGREEMENT BETWEEN
THE ATTORNEY AND CLIENT, AND THE PARTICULAR CIRCUMSTANCES OF
THE CASE. AS A GENERAL RULE, HOWEVER, A CLIENT IS ENTITLED TO: 1)
ALL DOCUlvIENTS PROVIDED TO THE ATTORNEY; 2) ALL DOCUMENTS OR
RESPONSES
ACQUIRED
BY
COUNSEL
THROUGH
THE
DISCOVERY
PROCESS; 3) ALL CORRESPONDENCE IN PURSUIT OF THE CLIENT'S
INTERESTS; 4) ALL NOTES, MEMORANDA, BRIEFS, MEMOS, AND OTHER
:MATTERS
GENERATED
BY COUNSEL BEARING ON THE
CLIENT'S
BUSINESS AND RESULTING FROM THE EMPLOYMENT OF THE COUNSEL.
THE
COUNSEL l\tIAY RETAIN
COPIES
AGREEMENT FROM THE CLIENT.
OF THE
FILE,
ABSENT AN
SUCH COPIES MUST BE MADE AT
COUNSEL'S EXPENSES.
Nebraska has since adopted the Rules of Professional Conduct. Therefore,
the applicability of the above has been questioned, as the prior opinion was decided
under the Code of Professional Responsibility.
Neb.Rev.Stat. § 7-108 states, "An
attorney has a lien for a general balance of compensation upon any papers of his
client which have come into his possession in the course of his professional
employment; and upon money in his hands belonging to his client; and in the hands
of the adverse party in an action or proceeding in which the attorney was employed
from the time of giving notice of the lien to that party."
The ABA-BNA Lawyers' Manual on Professional Conduct, Practice
Guide, Section on Duties at the End of Representation (45:1201), provides as
2927
N-37
follows:
State Rules:
Many of the jurisdictions that have substantially modified their ethics
rules since the ABA adopted the Model Rules have embraced
=.;:..;;="'--===
="-=-'=
with little significant change, although some states have
made slight modifications regarding the scope and existence of a
lawyer's right to retain the client's file in the event the
Client refuses to pay the lawyer's fees.
Arizona adds that a lawyer must upon request surrender "all of the
client's documents, and all documents reflecting work performed for the
client." The lawyer may retain documents reflecting work performed for
the client. to the extent permitted by other law, the rule adds, but "only
if retaining them would not prejudice the client's rights."
Connecticut requires that the attorney confirm the termination
111
vvriting within a "reasonable time."
The District of Columbia provides that the continuing duty to protect
the
client
applies
in
connection
with
"any"
termination
of
representation, not just those terminations based on withdrawal. The
rule also reminds lawyers that the right to impose a retaining lien is
governed by Rule 1.8(i), which allows retaining liens to be applied only
to an attorney's work product and, in any event, prohibits a lawyer from
retaining property when the client is unable to pay
2928
N-38
01'
where there is a
significant risk of harm if the property is retained.
Georgia omits completely the model rule language that allows a lawyer
to retain papers. It also specifies that the "maximum penalty" for
violating the rule is a public reprimand.
Louisiana requires a lawyer, upon written request from the client, to
promptly release to the client or the client's new lawyer the entire file
relating to the matter. The lawyer may keep a copy of the file "but shall
not condition release over issues relating to the expense of copying the
file or for any other reason," the rule states. Who is ultimately
responsible for the cost of the copying "shall be determined in an
appropriate proceeding."
Massachusetts adds a list, in paragraph (e), of items that the lawyer
must deliver to a former client after the elient requests his or her file.
Michigan's rule calls on lawyers to take "reasonable" steps to protect the
client's interests when terminating the representation.
Minnesota omits the model rule language that allows a lawyer to retain
papers. It incorporates a list, in paragraph (e), of items that the lawyer
must deliver to a former client. after the .client requests his or her file.
Montana sets out a work product exception to the duty to return client
property, stating that a lawyer need not surrender "papers or materials
personal to the lawyer
01'
created or intended for internal use by the
-2929-
N-39
lawyer." Papers that don't fall within that definition must be delivered
to the client.; if copies are kept, the rule adds, the lawyer bears the
copying costs.
New Hampshire states that the steps to protect a client's interests are a
"condition to termination of representation."
New Mexico allows a lawyer to retain property to the extent permitted
by law "or the Rules of Professional Conduct."
North Dakota, in Rule 1.19, states that a lawyer shall not assert a
retaining lien against a client's files., papers, or property, defines what
constitutes a client's papers or property, and makes clear that copying
costs may be assessed against the client only when the dient agreed to
the arrangement up front.
Ohio adds a clause defining client papers and property as including
"correspondence, pleadings, deposition transcripts, exhibits, physical
evidence, expert reports, and other items reasonably necessary to the
client's representation."
Oregon adds "papers" and "personal property" to the list of things that
may be retained consistent with other law.
Rhode Island omits completely the model rule language that allows a
lawyer to retain papers. A separate rule states that whenever a lawyer
cannot locate a _client the lawyer must petition the court for
-2930-
N-40
instructions.
South Carolina adds a sentence expressly allowing a lawyer to "retain a
reasonable nonrefundable retainer."
Tennessee includes in the property that must be returned "work
product" prepared for the .client. and for which the lawyer has been
compensated. The rule allows a lawyer to retain work product to the
extent permitted by other law "but only if the retention of the work
product will not have a materially adverse eflect on the client with
respect to the subject matter of the representation."
Texas permits a lawyer to retain papers "only if such retention will not
prejudice the .client in the subject matter of the representation."
Utah allows lawyers to retain papers to the extent permitted by other
law but adds that the lawyer must provide, "upon request, the client's
file to the client." It also provides that the lawyer "may reproduce and
retain copies of the client file at the lawyer's expense."
Virginia sets out in paragraph (e) a detailed list of the types of
documents that must be returned to the _clien(, and specifies the
procedure for copying papers the lawyer wishes to retain.
Also, the ABA-BNA Lawyers' Manual on Professional Conduct,
Practice Guide, Section on Duties at the End of Representation (45:1205),
provides as follows:
-2931-
N-41
Attorneys' Liens.
Many states allow lawyers to assert liens on .
client property as a means of guaranteeing that the attorneys' fees will
be paid. See generally Restatement (Second) of Agency §464(b) (19;')8);
Restatement of Security §62(b) (1941); 7 Am. ,Jur.2d Attorneys at Law
§313 (1980); 7 C.J.S. Attorney & Client §358 (1980). Indeed, ='-"'==-==
1.16(d) specifically acknowledges that a lawyer may retain papers "to
the extent permitted by Im·v."
Although the ethics rules neither endorse nor condemn attorneys'
retaining liens, the majority of states have concluded that such liens are
not unethical per se.
See Nat'l Sales & Servo CO. V. Superior Court, 667 P.2d 7:38 (Ariz. 1983);
Marsh, Day & Calhoun V. Solomon, 529 A.2d 702 (Conn. 1987);
Maryland Attorney Grievance Comm'n V. McIntire, 405 A.2d 273 (lVId.
1979); Levitas V. Levitas, 410 N.Y.S.2cl 41 (Sup. Ct. N.Y. Cnty. 1978);
Silverstein v. Hornick, 103 A.2d 734 (Pa. 1954); In re Anonymous, 335
S.E.2d 803 (S.C. 1985).
See also Alabama Ethics Op. 86-2 (1988), Alabama Ethics .::e..!;;"--,,,=-...c='
and Alabama Ethics Op. 89-58 (1989); Arizona Ethics =-"'.:...=-"'--"=
District of Columbia Ethics Op. 250 (1994); Florida Ethics =-"'..:......;;:.-"'--"=
(1993); Indianapolis Ethics Op. 2 of 1990; Maryland Ethics ~-"--'"'-'---"=
(1987) and Maryland Ethics
(1988); New Mexico Ethics
1986-7; New York State Ethics Op. 567 (1984); Nassau County (N.Y.)
Ethics
(1991); New York City Ethics Op. 82-74; Columbus
Ethics Op. 2 (1987); Oregon Ethics
(2005); Philadelphia
Ethics Op. 87-1; South Carolina Ethics Op. 88-7; Utah Ethics KP..:.Jli
(1989); Virginia Ethics
(1987) and Virginia Ethics ~~~
(1988).
See generally Annotation, Attorney's Assertion of Retaining Lien as
Violation of Ethical Code 01' Rules Governing Professional Conduct, 69
A.L.R.4th 974 (1989); Thompson, Attorneys' Fees and Liens, 85 Comm.
L.J. 136 (1980); Comment, Attorney's Liens: A Practical Overview, 6 U.
Bridgeport L. Rev. 77 (1985).
Thus, although the ethics rules neither endorse nor condemn an attorneys' retaining
lien, the majority of states have concluded that such liens are not unethical per se, as
-2932-
N-42
set out above.
Approaching this problem, Colorado Opinion 104 (4/17/99), provides as follows:
Files of client; VVithdrawal from representation; Photocopies.
At the termination of the representation of a client a lawyer must
surrender papers and property to which the client is entitled. The fact
that the lawyer may have previously provided copies of documents to
the client does not relieve the lawyer ofthis responsibility. A lawyer has
the right to withhold documents related to the representation of other
clients that the lawyer used as a model for drafting the client's
documents, but the product drafted for the client may not be withheld.
Similarly, drafts of pleadings left in the file and not destroyed in the
normal course of the representation should be surrendered. In addition,
a lawyer may withhold personal attorney work product, including
internal memorandums regarding the client's file, conflicts checks,
personnel assignments, and a lawyer's notes containing personal
impressions and comments that relate to the business of representing
the client. If a lawyer's notes contain both factual information and
personal impressions, the notes may be redacted or summarized to
protect the interests of both the lawyer and the client. Lawyer work
product does not include documents belonging to the client or those that
are the lawyer's "end product," such as pleadings filed in the case,
correspondence with clients, opposing counsel and witnesses, and final
versions of contracts, wills, corporate records, and similar documents
prepared for the client's use. Preliminary drafts, legal research, and
legal research memorandums must also be surrendered. Specific
documents that would fall into the category of work product are to be
identified on a case by case basis, but the lawyer's duty to protect the
interests of the client favors production. In the event of a dispute, a
judicial in camera inspection may be necessary. A lawyer who chooses to
retain copies of documents surrendered to a client may not charge the
client for the duplication costs. But if a lawyer voluntarily surrenders
work product to the client, the duplication costs may be charged to the
client. In the absence of a valid agreement to the contrary, a lawyer may
not refuse to provide papers and property to the client until the client
pays duplication costs. Opinion 82; Rule 1. 16(d).
CONCLUSION
-2933-
N-43
Hegardless ofthe change f'rom the Code of Professional Hesponsibility to the
Hules of' Professional Conduct, "an attorney has an ethical obligation, upon demand,
to promptly provide a client with the contents of'the file belonging to the client.
What the client may be entitled to receive depends upon the nature of'the work, the
agreement between the attorney and client, and the particular circumstances in the
case. In circumstances where the clients continued representation would
be in jeopardy, the lawyer's ethical obligation to the client overrides any
lien rights the lawyer may have otherwise obtained by statute or
agreement.
As a general rule, however, a client is still entitled to:
1) ALL DOCUMENTS PHOVIDED TO THE ATTOHNEY; 2) ALL DOCUMENTS OH
HESPONSES ACQUIRED BY COUNSEL THROUGH THE DISCOVERY
PROCESS; 3) ALL CORRESPONDENCE IN PURSUIT OF THE CLIENT'S
INTERESTS; 4) ALL NOTES, MEMORANDA, BRIEFS, MEMOS, AND OTHER
:MATTERS GENERATED BY COUNSEL BEARING ON THE CLIENT'S
BUSINESS AND RESULTING FROM THE EMPLOYMENT OF COUNSEL. THE
COUNSEL MAY RETAIN COPIES OF THE FILE, ABSENT AN AGREEMENT
FROM THE CLIENT. SUCH COPIES MUST BE MADE AT COUNSEL'S
EXPENSE." Production to the client may consist of' scanned or hard copy.
N-44
Sample COI?flict Waiver Agreement: Concurrent RepreselltatioJl o/Alulliple Clients ill Same
Maller (Amcrican Bar Association)
http://apps.americanbar.org/labor/lcl-aba-annuallpapers/ I 999/annuaI33.pdf
[DATE]
PERSONAL AND CONFIDENTIAL
[Client #1, or existing client]
PERSONAL AND CONFIDENTIAL
[Client #2]
Re: Waiver of Conflict of Interest
Dear [client #1] and [client #2]:
This letter will confirm and is in follow-up to my recent conversation with [client # I] in
which [he/she] requested that [
] concurrently represent each of you ind ividually in
connection with [Los Angeles Superior Court case entitled
, or
describe subject matter]. [Client #1] and/or [client #2] and I have discussed the possibility that
our concurrent representation of both of you constitutes a potential conflict of interest.
In my opinion, no actual con1lict exists at this time. This is because all parties named in
the subject action currently share a commonality of interest in defending the litigation. [Set forth
analysis of underlying facts supporting conclusion, e.g., clear liability accident, etc.] Based on
this information, no actual conflict of interest appears to be present.
In undertaking the concurrent representation of each of you, we cannot and will not
advise either of you as to any matters upon which an actual conflict of interest develops among
you. In the event that any contlict, dispute or disagreement arises between you as to your
respective rights and defenses, we shall decline to represent you in any manner in connection
with that dispute or disagreement.
Again, there are various ways in which a future contlict of interest could arise. For
example, if we receive contlicting instructions from you, we will be placed in a position in which
we could not follow one set of instructions without violating our professional obligations to the
other of you. This situation, if unresolved, could create a conflict of interest which would require
us to 'vvithdraw from representation and which would require each of you to seek new counsel.
Therefore, we will require the condition of ollr employment that you provide us with a common
set of instructions as to the
matter, in order to prevent such a potential
contlict.
N-45
Additionally. in the event that you develop inconsistent defenses or objectives, sllch that
one of you wishes us to pursue a defense which would adversely affect the interests of the other,
a conf1ict would arise which would require us to withdraw as counsel for any of you in your
respective individual capacities. Thus, we will make every effort during the course of
representation to confirm that each of you have a commonality of interest in connection with the
positions asserted on your respective behalves. If your interests diverge during the course of
representation, further disclosure and ',vaiver of the contlict, or vvithdrawal from representation.
will ensue. Should such divergence of your respective interests occur, each of you in your
respective individual capacities expressly consents to our continuing representation of [client],
even if we withdraw from further representation of any of the remaining clients signing below.
You should each also be aware that each of you may have indemnification rights against
the other. As stated above, since we are representing your common interests in this matter, we
cannot represent or advise any of you with respect to those claims. We suggest that you consult
separate counsel with respect to any such indemnity claims which may exist or which may arise
in the future.
You should also consider that. as among you, there is no right to assert the attorney/client
privilege as to communications we receive from any of you in connection with the joint
representation. You confirm by executing this letter, that you are aware of the provisions of
section 962, California Evidence Code, and that you expressly consent to the communication to
any of you, of information received by this firm from any other of you. You further acknowledge
that, assuming the information learned from any of you is significant, we may have an ethical
duty to disclose that information to the remainder of you.
To the extent that the attorneys fees in this matter shall be paid by the [client # I or client
#2], and to the extent that either of you \viIf be paying the attorneys fees of the other, we are
required to obtain your written consent pursuant to the provisions of subdivision (F) of rule 3310, Rules of Professional Conduct. We confirm to you that any payment of either of your
attorneys fees by the other shall not interfere with the independence of our professional judgment
or the attorney/client relationship between our firm and each of you.
After termination of [Iawfirm)'s services in this matter, we will request that you take
possession of the original client file. You and each of you expressly agree that we shall be
deemed to comply with our duty to provide the file to our client by making the file available to
either [client # I] or [client #2]. YOll will be responsible for deciding among yourselves which of
you shall maintain the original client me. In the event that neither [client #1] nor [client #2] takes
possession of the original client file upon the expiration of five years after our representation
terminates in this matter, you, and each of you, expressly authorize [law firm] to destroy the
original client file in the normal course of business.
By executing this letter where indicated below. you and each of you confirm that you
have been fully informed as to the nature of the potential conflicts which arise as a result of our
concurrent representation of all of you; that you have been provided a reasonable opportunity to
seek the advice of independent counsel of your choice regarding these potential conflicts and
waiver thereof; and you understand that a conflict may arise in the future which may require an
N-46
additional disclosure and waiver by you, or, alternatively, withdrawal by this firm of
representation of one or all of you. Additionally. you confirm that you will take the opportunity
to retain independent counsel in the event you have any reservations regarding our concurrent
representation of your interests, the issues arising from that representation, and/or the 'Naiver of
the potential connict of interest.
Assuming the foregoing accurately rellects your agreements, please execute and return to
me the waiver form appended hereto. Of course, if either of you has any questions or comment,
please feel free to give me a call. I look f()f\vard to working with you in connection with this
matter.
Very truly yours,
WAIVER OF CONFLICT
I, [client #2], hereby acknowledge that I have carefully read the foregoing letter,
informing me that my interests may potentially be in conflict with those of [client # 1:1 in
connection with [law firm]'s representation of my interests and those of [c1 ient # I] in connection
with [subject matter]. I expressly acknowledge that the concurrent representation by [attorney]
and [law firm] of my interests and those of [client # I] constitutes the representation of
potentially conflicting interests, to the extent that my interests and those of[c1ient #1] are
potentially adverse. I nevertheless knowingly and voluntarily consent to sllch concurrent
representation by [attorney] and [law firm]. FllIiher, I knowingly and voluntarily consent to the
payment of legal fees to [law finn] by a person or entity other than myself.
I further expressly acknowledge that I have been advised that I have the right to seek
independent legal counsel in connection with the advisability of waiving said connict, and that I
have had a reasonable opportunity to do so.
Dated:- - - - - - -
Signature: _ _ _ _ _ _ _ _ _ _ _ _ __
[client #2]
Enclosure
N-47
Sample Advance Waiver ofCOI?flicts (lln/erest (D.C. Bar Inquiry No. 00-4-13; Adopted:
September 20, 200 I)
D.C. Bar Committee disclaimer: The committee does not vie,v this text as authoritative or
exclusive.
http://www.dcbar.om:lfor lawvers/ethics/leQal ethics/opin iOlls/opinion309 .cfm
"As we have discussed, the firm represents many other companies and individuals. It is possible
that during the time we are representing you, some of our current or future clients will have
disputes or transactions with you. [For example, although we are representing you on
- - - - -, we have or may have clients \vhom we represent in connection with
You agree that we may continue to represent, or undertake in the future to
represent, existing or new clients in any matter, including litigation, even if the interests of such
other clients in such other matters are directly adverse to yours, so long as those matters are not
substantially related to our work for you."
_ _ _ _ _ _ _ _ .J
N-48
Joint Representation olkfull iple Clients (Florida Bar Association, Form No. 096133c)
http://www.floridabar.ondDIVPGM/LOMASForrns.nsf/WLOMAS/A76E8763A533D83385256
FC600653C4E/$FILE/Conflict%20Waiver%20Joint%20Representation%20Multiple%20Clients
. %20Letter%20Form%20096133c.doc
You have asked us to represent you [Client A] and [Client B] jointly in connection with [full
description ofmatterJ. We would be pleased to do so, subject to the tollowing understandings.
Although the interests of [Client A] and [Client B] in this matter are generally consistent, it is
recognized and understood that differences may exist or become evident during the course of our
representation. Notwithstanding these possibilities, [Client A] and [Client B], have determined
that it is in their individual and mutual interests to have a single law firm represent them jointly
in connection with [full description of matter].
Accordingly, this confirms agreement of [Client A] and [Client B] that we may represent them
jointly in connection with the above-described matter. This will also confirm that [Client A] and
[Client B] have each agree to waive any conflict of interest arising out of, and that you will not
object to, our representation of each other in the matter described herein.
It is further understood and agreed that we may freely convey necessary information provided to
us by one client to the other, and that there will be no secrets as between [Client A] and [Client
BJ unless both of you expressly agree to the contrary.
[fyou need to edit the
terms of this letter, or. wish to discuss any related
issues, please contact
us
.
.
.
at your earliest convenience. However, if you agree that the foregoing accurately reflects our
understanding, please sign and return the enclosed copy of this letter.
N-49
Advance Waivers £?fFlIIllre COf?flicts: Blanket Advance IVail'er Nol Includillg Suhstanfial(F
Related Matters (1 Il2) (NYC Bar Association)
http://www2. nvcbar.org/Pub Iications/reports/prin t report. php ?rid=442
(Blanket Advance Waiver Not Including Substantially Related Matters)
Other lawyers in the Firm currently do [XYZ] work for [existing client] and its affiliates,
and expect to continue to do sLlch work. In order to avoid any misunderstanding in the future, we
ask that you confirm that the Company agrees to waive any conflict of interest which may be
deemed to arise as a result of such representation. Please also confirm that neither the Company
nor any of its affiliates will seek to disqualify our Firm from representing [existing client] or its
affiliates in existing or future [XYZ] or other matters.
Our agreement to represent you is conditioned upon the understanding that we are free to
represent any clients (including your adversaries) and to take positions adverse to either the
company or an affiliate in any matters (whether involving the same substantive area(s) of law for
which you have retained us or some other unrelated area(s), and whether involving business
transactions, counseling, litigation or other matters), that are not substantially related to the
matters for which you have retained us or may hereafter retain us. In this connection, you should
be aware that we provide services on a wide variety of legal subjects, to a large number of clients
both in the United States and internationally, some of whom are or may in the future operate in
the same area(s) of business in which you are operating or may operate. (A summary of our
current practice areas and the industries in which we represent clients can be found on our web
site at www.XYZ.com.) You acknowledge that you have had the opportunity to consult with
your company's counsel [if client does not have in-house counsel, substitute: "with other
counsel"] about the consequences of this waiver. In this regard, we have discussed with you and
you are aware that we render services to others in the area(s) of business in which you currently
engage.
N-50
Advance Waivers ofFlIfllre COI?flicls: Blanket Advance Waiver Not Including Substantially
Related Jv[afters (2 (?f2) (NYC Bar Association)
http://www2.nvcbar.org/PublicationsirepOlisiprint reporLphp?rid=442
This firm is a general service law firm that [insert client name here] recognizes has
represented, now represents, and will continue to represent numerous clients (including without
limitation [the client's] or its affiliates' debtors, creditors, and direct competitors), nationally and
internationally, over a wide range of industries and businesses and in a wide variety of matters.
Given this, without a binding conflicts waiver, contlicts of interest might arise that could deprive
[the client] or other clients of the right to select this firm as their counsel.
Thus, as an integral pali of the engagement, [the client] agrees that this firm may, now or
in the future, represent other entities or persons, including in litigation, adversely to [the client]
or any affiliate on matters that are not substantially related to (a) the legal services that [this firm]
has rendered, is rendering, or in the future will render to [the client] under the engagement and
(b) other legal services that this firm has rendered, is rendering, or in the future will render to
[the client] or any affiliate (an "Allowed Adverse Representation").
[The client] also agrees that it will not, for itself or any other entity or person, assert that
either (a) this firm's representation of[the client] or any affiliate in any past, present, or future
matter or (b) this firm's actual, or possible, possession of confidential information belonging to
[the client] or any affiliate is a basis to disqualify this firm from representing another entity or
person in any Allowed Adverse Representation. [The client] fUliher agrees that any Allowed
Adverse Representation does not breach any duty that this firm owes to [the client] or any
affiliate.
N-51
Advance Waivers
(~/FlItllre
Conflicts: Representationjbr Subslantia!~F Related Mailers (NYC
Bar Association)
http://wvvw2 .nyc bar.org/Pub Iications/reports/print report. php ?ri d=44 2
You also agree that this firm may now or in the future represent another client or clients
with actually or potentially differing interests in the same negotiated transaction in which the
firm represents you. In particular, and without waiving the generality of the previous sentence,
you agree that we may represent [to the ex/ell! practicable, describe the particlilar adverse
representations that are envisioned, such as "other bidders/hI' the same asse' " or "the lenders
or parties providing/inancing to the eventual buyer of/he asset '}
This waiver is effective only if this firm concludes in our professional judgment that the
tests of DR 5-105 are satisfied. In performing our analysis, we will also consider the factors
articulated in ABCNY Formal Opinion 2001-2, including (a) the nature of any conflict; (b) our
ability to ensure that the confidences and secrets of all involved clients will be preserved; and (c)
our relationship with each client. In examining our ability to ensure that the confidences and
secrets of all involved clients will be preserved, we will establish an ethical screen or other
information-control device whenever appropriate, and we otherwise agree that different teams of
lawyers will represent you and the party adverse to you in the transaction.
N-52
Advance Waiver Provisionfor a Large Firm (/ of2) (Texas Bar CLE Materials)
I. Limitation on Scope of Engagement. Unless specifically retained, our representation of
_____- - - does not include representation of any of its parents, subsidiaries, affiliates.
stockholders, officers or directors (" Affiliates''). In short, the Firm serves as legal counsel for
_ _ _ _ _ , but not for any of
Affiliates. Accordingly, it is understood and
agreed that any representation by the Firm of another client adverse to any
Affiliate
does not constitute a conflict of interest and does not require the consent of - - - - - 2. Advance Waiver of Unrelated Cont1icts offnterest. [Firm] is a large law firm with offices in
various locations throughout the United States, and with related practice entities located in
Europe, Asia, Africa and Australia. We may currently or in the future represent one or more
other clients in unrelated matters or transactions in which the interests
or
Affiliates are adverse to those other clients. For example, we
those of the
may represent other clients in corporate matters involving or concerning
or
the
Affiliates (including mergers and acquisitions, takeovers, and other
change-in-control issues and transactions), or in commercial transactions with
________ or the
Affiliates (including preparation and negotiation
of agreements, licenses, leases, loans, securities offerings or underwritings), or in other matters
or the
Affiliates. We may
and transactions involving
also represent other clients on legislative or policy matters, or in administrative proceedings that
may involve or affect
or the
Affiliates. This will
confirm that
waives all such conflicts of interest, and consents to the Firm's
current and future representation of such other clients in any of such matters without the need for
any further notice or consent from
even though
's
interests are adverse, provided that such matters are not the same, or substantially related to, a
matter in which we represent
. We do not view this advance waiver and
consent regarding unrelated matters to permit us to institute litigation against
________ nor to permit unauthorized disclosure or use of any ________ 's
confidential or privileged documents or information which
has provided to
us as
's lawyers.
11
N-53
Advance Waiver Provision/hI' a Large Firm (2 «/2) (Texas Bar eLE Materials)
We understand and agree that this is not an exclusive agreement and you are free to retain any
other counsel of your choosing. We recognize that we shall be disqualified from representing any
other client with interests materially and directly adverse to yours 0) in any matter which is
substantially related to our representation of you and Oi) with respect to any matter !'"here there
is a reasonable probability that contidential intormation you furnished to us could be L1sed to
your disadvantage. You understand and agree that with those exceptions, we are free to
represent other clients, including clients whose interests may connict with yours in litigation,
business transactions, or other legal matters. You agree that our representing you in this matter
will not prevent or disqualify us from representing clients adverse to you in other matters and
that you consent in advance to our undertaking such adverse representations.
N-54
COIl/lic! of1nterest Waiver: Joint Represel1/aliolllll a Rea! Estate 7hll1S({CliOIl (New Hampshire)
Suggested Real Estate Transaction Forms
RE: How To Avoid Potential Conflict of Interest Issues
BORROWER(S):
PREM
BORROWER(S) AFFIDAVIT
The undersigned (jointly and severally, if more than one), being duly sworn, hereby
depose and say that the undersigned owns or is purchasing the Premises.
The undersigned acknowledges that (I) no title evidence has been provided to the
undersigned relative the said premises and (ii) no certificate or opinion of title has been issued to
the undersigned by [lawyer].
[Lawyer], attorney for (Lender), Lender, have explained to the undersigned that owner's
title insurance, through
Title Insurance Company, is
available, and said attorneys have explained the general purposes and costs of owner's title
insurance.
The undersigned further understands that the lender's coverage is for the protection of the
lender ONL Y and that unless the undersigned purchases owner's title insurance, the undersigned
may have no protection relative to the title on said premises. The undersigned hereby
acknowledges that [lawyer] bears no responsibility for any damage to the undersigned which
may occur relative to said title. The undersigned does not wish to purchase owner's title
insurance.
BORROWER:
STATE OF NEW HAMPSHIRE COUNTY OF _____- - - - - : : - - - - - - The foregoing instrument was acknowledge before me, this _ _ day
,by
2
_______________________________________ .Beforelne,
Justice of the Peace
Notary Public
My Commission Expires:
13
N-55
***************************************************
AGENT'S DISCLOSURE TO PURCHASER AS TO OWNER'S TITLE INSURANCE
PREMIUM
The undersigned has requested the opportunity to purchase owner's title insurance from
___________ Title Insurance Company. [Lawyer] is acting as agent ft1r said title
insurance company in this transaction. The premium for said pt1licy is $
___________ , of which [lawyer] will be paid
% by said company to
compensate for services, costs and expenses as agent. [Lawyer] has nt1 ownership interest in said
title insurance company. [Lawyer] is also issuing lender's title insurance to [Lender). There is
thus a possibility of a contlict between the undersigned, the Lender, the title insurance company,
and [lawyer} in the event of a claim on the owner's policy. The undersigned has read and
understands the above disclosure, and consents to the facts described above.
Dated: - - - - - - - - - - - - - - - - - - - - - - - -
PURCHASER(S)
N-56