Supervising Outside Agents in a Blame-the-Lawyers World
LACBA Update, August 2006
By Evan A. Jenness, who is a member of LACBA’s Professional Responsibility and Ethics Committee. She is a criminal defense attorney whose offices are located in Santa Monica. The opinions expressed are her own.
The pending federal criminal case against former private-eye-to-the-stars Anthony Pellicano brings home the importance of lawyers supervising the work of their agents. Notwithstanding Pellicano’s policy not to provide authorities with names, many lawyers who used the once-popular investigator are likely quaking at the prospect of being confronted by run-amok activities undertaken on their nickel. Looking forward, it would be prudent for counsel to consider how to best implement the duty to supervise nonlawyers, particularly those who work outside the office and beyond the lawyer’s immediate purview. This includes a wide range of professionals, such as private investigators, process servers, notaries, forensic experts, outside paralegals, computer experts, and document management and storage services, among many others.
Rules of professional conduct make clear that the onus is on counsel to monitor nonlawyers working for them. See Cal. Rules of Prof’l Conduct R. 3-110(A) & Discussion (lawyers may “not intentionally, recklessly, or repeatedly fail to perform legal services with competence,” which includes “the duty to supervise the work of subordinate...nonattorney employees or agents”) (2006); Crane v. State Bar, 30 Cal. 3d 117, 123 (1981) (“attorney is responsible for the work product of his employees which is performed pursuant to his direction and authority”); Gadda v. State Bar, 50 Cal. 3d 344, 267 Cal. Rptr. 114 (1990) (ethical duty to supervise employees to ensure proper representation of clients). See also ABA Model Rules of Prof’l Conduct R. 5.3 (“lawyer having direct supervisory authority over the nonlawyer shall make reasonable efforts to ensure that the person’s conduct is compatible with the professional obligations of the lawyer”) (2006).
Courts recognize that attorneys “cannot be held responsible for every detail of office operations.” Palomo v. State Bar, 36 Cal. 3d 785, 795, 205 Cal. Rptr. 834 (1984). Nonetheless, lawyers must exercise reasonable supervision of their subordinates. Spindell v. State Bar, 13 Cal. 3d 253, 259-60, 118 Cal. Rptr. 480 (1975) (disciplining lawyer where client could not reach him, and secretary erroneously told client she could legally marry); Matter of Hindin, 3 Cal. State Bar Ct. Rptr. 657 (Rev. Dept. 1997) (disciplining lawyer where one associate failed to file appellate papers, another left courtroom before motion was heard, and another opposed motion in ignorance of court’s prior ruling on matter). This includes addressing any recurring problems. “[W]here an attorney has been alerted to problems and does not adequately address them, then such gross neglect may be disciplinable as a failure to perform services properly.” Hindin, 3 Cal. State Bar Ct. Rptr. at 682.
Although a single instance of negligence resulting from staff error may not be disciplinable (See Id.), the ethical and other perils of failing to monitor subordinates are well-documented. See, e.g., Zamora v. Clayborn Contracting Group Inc., 28 Cal. 4th 249, 259, 121 Cal. Rptr. 2d 187 (2002) (assistant’s typo in settlement agreement attributable to counsel for purposes of evaluating motion for relief from judgment); Trousil v. State Bar, 38 Cal. 3d 337, 342, 211 Cal. Rptr. 525 (1985) (lawyer responsible for secretarial errors that delayed disbursement of settlement because lawyer failed to adequately supervise secretary); Alderman v. Jacobs, 128 Cal. App. 2d 273, 276, 274 P.2d 930 (1954) (attributing to counsel a secretary’s inadvertent disposal of a brief for purposes of evaluating motion to vacate default judgment); Pincay v. Andrews, 389 F.3d 853 (9th Cir. 2003) (en banc) (affirming, over vigorous dissent, trial court finding of excusable neglect where paralegal miscalculated filing deadline); Id. at 864 (“I would hold that the error here—whether made by the lawyer, the calendaring clerk or the candlestick-maker—is inexcusable and dismiss the appeal as untimely.” ) (Kozinski, J, dissenting); Matter of Bragg, 3 Cal. State Bar Ct. Rptr. 615 (Rev. Dept. 1997) (lawyer violated prohibition on unauthorized practice of law where he allowed nonlawyer subordinate to accept clients, negotiate, and settle “prelitigation” matters, with minimal or no supervision).
Implementing the duty of supervision may present particularly substantial challenges when using outside agents. A good rule of thumb is that if a lawyer is precluded from doing something under the Rules of Professional Conduct, so are the lawyer’s agents; if a lawyer is required to do something, actions of an agent must be consistent with the obligation. A lawyer is responsible for an agent’s acts that the lawyer induced. See Model Rule 8.4(a) (misconduct to “violate...Rules of Professional Conduct, knowingly...induce another to do so, or do so through the acts of another”); see, e.g., In re Brass, 696 So. 2d 967 (La. 1997) (unethical to pay investigator to solicit clients). A lawyer also may be held responsible for failing to supervise an agent effectively, even where the lawyer had no direct knowledge of a violation. Disciplinary consequences and/or civil liability can arise where, for example, an agent leaks confidential client information, bungles a critical task, contacts a represented person directly, or prepares inaccurate pleadings. See, e.g., In re Complex Asbestos Litigation, 232 Cal. App. 3d 572, 588, 283 Cal. Rptr. 732 (1991) (“The obligation to maintain the client’s confidences traditionally and properly has been placed on the attorney representing the client.”); Kleeman v. Rheingold, 614 N.E.2d 712 (N.Y. 1993) (lawyer may be held liable to client for negligent process service by independent contractor); Noble v. Sears, Roebuck & Co., 33 Cal. App. 3d 654, 109 Cal. Rptr. 269 (1973) (corporation and its house counsel may be liable to nonclient for negligence in selecting private investigations firm where agent invaded plaintiff’s privacy by going to her hospital room without the consent or presence of her counsel); Florida Bar v. Lawless, 640 So.2d 1098 (Fla. 1994) (disciplining attorney for failure to supervise contract paralegal who was given plenary responsibility for clients’ immigration matters).
Selecting a competent agent with a sound reputation is a critical first step to ensuring a responsible agent, and firms may want to develop internal guidelines for the screening and retention of agents. Documenting the careful selection of an agent may help in avoiding blame for any unanticipated wrongdoing. An efficient way to begin implementing the duty to supervise is to apprise outside agents of a firm’s general policies regarding the handling of client matters. See Model Rule 5.3 (“a partner, and a lawyer who...possesses comparable managerial authority...shall make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that [nonlawyers’] conduct is compatible with the professional obligations of the lawyer”). If a single page stating a firm’s general policies were distributed to all agents at the inception of their employment, they would know generally what is expected of them. A lawyer who ensures all agents receive written guidance might also enjoy a measure of plausible deniability if an agent’s wrongdoing later slips by the lawyer. Requiring agents to sign and return such a document could reduce the potential for problems even further.
While firms will have differing general policies depending on practice areas and the type of outside agents most often used, the following is an example of instructions that might be given to all agents upon retention:
FIRM POLICIES AND PRACTICES
Best & Brightest LLP (“the Firm”) appreciates your work on behalf of our clients. This memorandum reflects the policies and practices of the Firm that apply to the provision of services on behalf of all our clients. Please review this information, sign below, and return the original to the Firm to indicate your agreement to follow our policies and practices with respect to the services that you will be performing.
In connection with the matter for which you will be providing services to the Firm (“the Matter”), you agree and represent that you:
(1) Have disclosed to the Firm your prior retention on behalf of anyone regarding the Matter;
(2) Are not currently employed by anyone else related to the Matter;
(3) Will not undertake during the course of your employment by the Firm any employment related to the Matter without the advance written consent of the Firm;
(4) Will employ only lawful means in the performance of services for the Firm;
(5) Will employ only such means as are consistent with the standards of professional conduct applicable to your profession;
(6) Will keep the Firm apprised of significant developments regarding your performance of services for the Firm;
(7) Will protect the confidentiality of information provided to you by the Firm or our clients, or otherwise learned in the course of performing services for the Firm;
(8) Will not disclose information to or otherwise communicate with the media regarding the Matter;
(9) Will not contact any represented parties other than through their legal counsel;
(10) Will not accept payment or instructions from any other source for performance of any services regarding the Matter;
(11) Will apprise the Firm in the event that you receive legal process regarding the Matter;
(12) Will, at the conclusion of your work on the Matter, give to the Firm all confidential information obtained from the Firm or our clients; and
(13) Will contact the Firm immediately if any questions arise regarding the preceding. Emergency contact information is as follows [after-hours numbers].
UNDERSTOOD AND AGREED
Developing general internal guidelines for the supervision of outside agents also may be worthwhile. Areas that might be considered include the following: 1) specification of nondelegable tasks (e.g., maintaining contact with clients, rendering legal advice, and supervising the management of client funds); 2) requirement of written retention agreements defining the terms of the agent’s retention; and 3) kinds of preliminary instructions that counsel should give to any agent who is retained (e.g., specific tasks delegated or services to be provided, who is authorized to direct the agent’s activities, scope of the agent’s responsibility and any discretion, nature of any relationship between the agent and client, and expected frequency of status reports from the agent). It also may make sense to spell out procedures that counsel should follow in the event problems develop with an agent.
Even with careful selection and clear guidance, unanticipated issues will arise periodically. If counsel learns that an agent has gone astray, the lawyer should consider immediate termination of the agent and any possibility of rectifying the misconduct. Again, documenting these efforts may mitigate future claims of attorney responsibility.
Selecting agents with care, informing them of what is expected of them, and attempting to remedy agents’ wrongdoing where possible will not automatically discharge counsel’s duty of supervision, but taking and documenting these steps can help—and every little bit counts in an era of efforts to hold lawyers accountable for agents’ misconduct.