Ethics Are Coming! Ethics Are Coming!
LACBA Update, December 2000
By Diane L. Karpman, chair, LACBA Professional Responsibility & Ethics Committee. Karpman of Karpman & Associates in Los Angeles represents attorneys in disciplinary matters and is an expert consultant and witness on legal ethics issues. The opinions expressed are her own.
During the last three years, the American Bar Association’s Ethics 2000 Commission ("E2K") has labored to modernize the Model Rules by reconciling them with the American Law Institute’s Restatement of the Law of Lawyering:
• divergent state ethics rules and cases;
• the profound impact of technology and globalization on legal practice;
• new types of practice relationships including the burgeoning of in-house lawyers;
• the need for screening in law firms; and
• the impact of lawyers working as neutrals.
The Commission expects to issue a set of potentially sweeping recommendations before the end of the year, which could have a drastic impact upon your practice.
California is guided by its own Rules of Professional Conduct. However, the California Rules have not been reconsidered for a decade. When they are reevaluated, the ABA’s position will be seriously considered and could have a substantial impact. Several recent California decisions have increasingly relied upon Model Rule positions to justify departure from traditional California positions. The current issues of reciprocity (proposals to end jurisdictional boundaries on the practice of law) mandate serious consideration of the proposals. When California has failed to take a position, the ABA’s position is persuasive authority, and many of these new proposals lack a California parallel rule.
The LACBA’s Ethics 2000 Committee will be circulating copies of the proposals to every section and committee, seeking their unique practice perspectives regarding the proposed changes, in anticipation of developing our positions on the proposals. We need your input and guidance since many proposals could have a profound impact upon legal practice during the next decade.
Many proposals incorporate settled California positions, such as the need for written contingent fee agreements and (in some instances) written conflict waivers. However, others are divergent and reflect the growing chasm on the issue of discretionary or mandatory confidentiality disclosure between California and the other states. In Model Rule states, lawyers can and should disclose client confidences to prevent serious bodily (and sometimes economic) harm. In California, such disclosures are not permitted according to the Business and Professions Code.
Some proposals to be considered:
• Admissibility of Rule violations in legal malpractice litigation (recognizing the weight of judicial opinion) as evidence of breach of the standard of care. Such a violation alone should not create a "new" cause of action but does show violation of the standard of conduct.
• A new definition of "screen" will explain the elements of a valid screening procedure to block the imputation of shared confidences, how erection of the screen must be timely, and the impact of failure to follow the guidelines.
• A new definition of "writing" that includes both tangible accepted writings and electronic records such as e-mail.
• A list of circumstances where a lawyer cannot even request a conflict consent or waiver, since the representation is deemed "nonconsentable," including transactional settings, where the lawyer is prohibited from representing multiple parties, and when the lawyer did not "reasonably believe" that he/she could provide competent or diligent representation. If this is adopted, the Court’s interpretation should provide interesting and amusing decisions in the following years.
• How a lawyer should respond to the occurrence of unforeseen developments resulting in a client created conflict of interest, such as those occasioned by mergers and acquisitions.
• The viability of prospective conflict waivers, which are dependent upon how much disclosure was tendered and the sophistication of the client, including the assistance of in-house or independent counsel input upon the execution of the prospective consent.
• A recommendation supporting the use of non-consensual screening for lawyers moving between firms, recognizing the need for greater lawyer mobility and giving credence to the interests of current clients in selection of the lawyer of their choice.
• The issues raised by the representation of clients with diminished capacity (formerly "Client under a Disability"), which lacks an articulated California rule. Capacity could be wanting due to minority or mental impairment. If the diminished capacity is placing the client in a state of jeopardy (due to potential physical, economic or financial harm), the lawyer is empowered to take protective action, including the appointment of a conservator and the disclosure of confidential information to make that appointment.
• New rules are being suggested for lawyers performing as third party neutrals in ADR settings, requiring certain disclosure to the participating parties but not creating conflicts that could lead to future disqualifications in other litigation capacities. Former mediators or arbitrators would be prohibited from future participation in previously arbitrated or mediated cases, but members of their firms could proceed if proper screening occurred.
• The Commission has even considered the use by lawyers of "investigative agents" to assist in marshaling evidence before the commencement of civil enforcement proceedings and the impact upon the anti-contact rule expressed in Model Rule 4.2.
This partial representation of an exhaustive laundry list should provide food for thought and fodder for sections and committees to rally their constituents in support or denial of the proposed rule. Every member of the bar may want to comment. The implications of these proposals impact on every area of practice.