Law Practice Management Class #6 – Conflicts and Bar Grievances.

Law Practice Law Practice ManagementManagement

Class #6 – Class #6 – Conflicts and Bar Conflicts and Bar GrievancesGrievances

Conflicts of InterestConflicts of Interest

• Need to be sensitive to conflicts of interestNeed to be sensitive to conflicts of interest

• Not all conflicts are apparent at beginning Not all conflicts are apparent at beginning of representationof representation– Need to look forward to anticipated Need to look forward to anticipated

developments in case (witnesses, experts, developments in case (witnesses, experts, etc.)etc.)

– Need to take steps in advance to resolve Need to take steps in advance to resolve conflicts or, if not resolvable, decline conflicts or, if not resolvable, decline representation or withdrawrepresentation or withdraw

Common conflictsCommon conflicts

• Represent two or more plaintiffs against Represent two or more plaintiffs against same defendantsame defendant– Even where actions are unrelated, there may Even where actions are unrelated, there may

be a collection-related conflictbe a collection-related conflict

• Parties with contrary legal Parties with contrary legal positions/theoriespositions/theories– Exacerbated if in same courtExacerbated if in same court– Winning for one client often means losing for Winning for one client often means losing for

otherother

Common conflicts (cont.)Common conflicts (cont.)

• PartnershipsPartnerships– Representing multiple partnersRepresenting multiple partners– Representing both a partner and the Representing both a partner and the

partnership itselfpartnership itself

• CorporationsCorporations– Representing multiple directorsRepresenting multiple directors– Representing both a director and the Representing both a director and the

corporation itselfcorporation itself


• Divorce casesDivorce cases– NEVERNEVER represent both spouses represent both spouses– Don’t pretend to represent the children unless you are Don’t pretend to represent the children unless you are

appointed to do so by the courtappointed to do so by the court– Decline to represent either spouse if you previously Decline to represent either spouse if you previously

represented both spouses in matters such as estate represented both spouses in matters such as estate planning or closely-held businessesplanning or closely-held businesses

• Watch for “shoppers” who meet with lawyers just Watch for “shoppers” who meet with lawyers just to disqualify them from representing spouseto disqualify them from representing spouse– Good reason not to offer free consultationsGood reason not to offer free consultations


• Multiple defendants or potential Multiple defendants or potential defendants in criminal or civil casesdefendants in criminal or civil cases– Criminal defendants may turn on each other Criminal defendants may turn on each other

to cut a plea deal in exchange for testimonyto cut a plea deal in exchange for testimony– Civil defendants may try to shift liability to Civil defendants may try to shift liability to

other defendant(s)other defendant(s)

• Passenger and driver in auto accident Passenger and driver in auto accident casescases– Owner/driver liability may be issueOwner/driver liability may be issue

What can happen to lawyer if What can happen to lawyer if conflict is ignored or mishandled?conflict is ignored or mishandled?

• Withdrawal from caseWithdrawal from case

• Become object of motion to disqualifyBecome object of motion to disqualify– Heard in open court in front of your peersHeard in open court in front of your peers

• May not be able to collect fees dueMay not be able to collect fees due

• May have to refund fees already collectedMay have to refund fees already collected

• May face disciplinary proceedings or May face disciplinary proceedings or malpractice litigationmalpractice litigation

What can happen to client in What can happen to client in conflict of interest cases?conflict of interest cases?

• Need to retain new lawyerNeed to retain new lawyer

• Delay associated with bringing new lawyer Delay associated with bringing new lawyer up to date on caseup to date on case

• Delay in court date and ultimate resolution Delay in court date and ultimate resolution of matterof matter

Resolve conflict Resolve conflict FIRSTFIRST

• Better to recognize conflict and avoid Better to recognize conflict and avoid working on case than to work on case, working on case than to work on case, then find conflict, and not get paidthen find conflict, and not get paid

• Everyone has to “eat crow” (admit Everyone has to “eat crow” (admit mistake) sometimemistake) sometime

• Better to do so when crow is young and Better to do so when crow is young and tender rather than when crow is old and tender rather than when crow is old and toughtough

Waiver of conflict?Waiver of conflict?

• Conflict does not preclude representation Conflict does not preclude representation if conflict can be waivedif conflict can be waived

• Some conflicts should not be waived Some conflicts should not be waived – Such as representing both spouses in a Such as representing both spouses in a

divorcedivorce

• Always get conflict waiver Always get conflict waiver IN WRITINGIN WRITING– See See FoonbergFoonberg pp 224-227 for sample waiver pp 224-227 for sample waiver

clausesclauses

Ethics problemsEthics problems

• Avoiding an ethics war is much better than Avoiding an ethics war is much better than winning onewinning one

• Collateral damage to your reputation is Collateral damage to your reputation is serious and permanent even if you prevailserious and permanent even if you prevail

• The time and effort it takes to win an The time and effort it takes to win an ethics battle could be better spend on fee-ethics battle could be better spend on fee-generating client workgenerating client work

Ethics HotlinesEthics Hotlines

• Most State Bars Have Some Form of Most State Bars Have Some Form of Ethics HotllineEthics Hotlline– FL Ethics Hotline for Oral Advisory Opinion FL Ethics Hotline for Oral Advisory Opinion

call (800) 235-8619call (800) 235-8619– Written Ethics Opinion (3-5 weeks) write to FL Written Ethics Opinion (3-5 weeks) write to FL

Bar (Bar (standard request form online))

http://www.floridabar.org/TFB/TFBResources.nsf/Attachments/64A72E416BEBF8FA85256D8E006B0C73/$FILE/Ethics%20Request%20Form.pdf?OpenElement

Common ethics issuesCommon ethics issues• Amount of FeeAmount of Fee

– Generally must be “reasonable”Generally must be “reasonable”– If unsure what to charge, call other lawyers If unsure what to charge, call other lawyers

with experience in the areawith experience in the area– Fee agreement Fee agreement must be in writingmust be in writing– Keep accurate time recordsKeep accurate time records

Common ethics issues (cont.)Common ethics issues (cont.)

• Fee SplittingFee Splitting– Must be disclosed to clientMust be disclosed to client– Fee must not increase due to fee-splitting Fee must not increase due to fee-splitting

arrangementarrangement– Can’t split fees with non-lawyers or, in most Can’t split fees with non-lawyers or, in most

cases, with out of state lawyercases, with out of state lawyer• Exception is with non-profit lawyer referral Exception is with non-profit lawyer referral

agencies approved by the Bar (usually run by local agencies approved by the Bar (usually run by local bar association)bar association)

Common ethics issues (cont.)Common ethics issues (cont.)Fee Splitting in Florida - Fee Splitting in Florida - FL FL Rule 4-1.5(g)Rule 4-1.5(g) •total fee must be reasonable •division of fees in proportion to the services performed by each lawyer•written agreement with the client:

– discloses the basis upon which that division will be made

– each lawyer assumes joint legal responsibility for the representation

– each lawyer is available for consultation with the client.

http://www.law.cornell.edu/ethics/fl/code/FL_CODE.HTM

http://www.law.cornell.edu/ethics/fl/code/FL_CODE.HTM


• Fees paid by third partiesFees paid by third parties– Duty is to client, not person paying feeDuty is to client, not person paying fee– Fee agreement should state that duty will be Fee agreement should state that duty will be

to client, not fee payer, if conflict arisesto client, not fee payer, if conflict arises– Common problem when insurance carrier is Common problem when insurance carrier is

paying fee for the insuredpaying fee for the insured


• Failure to refund unearned feesFailure to refund unearned fees– Fee agreement should be clear that fee is flat Fee agreement should be clear that fee is flat

or fixed and not dependent on time devoted to or fixed and not dependent on time devoted to matter, continued representation, or result matter, continued representation, or result achievedachieved

• Dropping client for failure to payDropping client for failure to pay– Place appropriate clause in agreement letting Place appropriate clause in agreement letting

you get out if client doesn’t payyou get out if client doesn’t pay– Court permission required for litigation Court permission required for litigation

mattersmatters


• False billing practicesFalse billing practices– Overstating number of hours worked on caseOverstating number of hours worked on case

• Often to make up for unrealistically low hourly rateOften to make up for unrealistically low hourly rate

– Misstating who did the workMisstating who did the work– Billing for paralegal time at lawyer’s rateBilling for paralegal time at lawyer’s rate


• Depositing fee advance prematurely in to Depositing fee advance prematurely in to operating accountoperating account– Unless the fee is specified as non-refundable Unless the fee is specified as non-refundable

(and meets certain other requirements), fees (and meets certain other requirements), fees are not earned until the work is doneare not earned until the work is done

– Ethical violation to deposit or transfer such Ethical violation to deposit or transfer such funds into firm operating account before fee is funds into firm operating account before fee is earnedearned


• Suing clients for unpaid feesSuing clients for unpaid fees– Expect counter-claim for malpracticeExpect counter-claim for malpractice

• Waiting until malpractice statute of limitation runs Waiting until malpractice statute of limitation runs may limit counter-claim to amount of fees in may limit counter-claim to amount of fees in disputedispute

– Before you sue, make sure your file is in order Before you sue, make sure your file is in order and you have done an exemplary job for the and you have done an exemplary job for the clientclient

– Consider ADR (mediation or arbitration)Consider ADR (mediation or arbitration)• Juries don’t like lawyers, and especially don’t like Juries don’t like lawyers, and especially don’t like

suits for feessuits for fees


• Lack of a written fee agreementLack of a written fee agreement– No written agreement often means not getting No written agreement often means not getting

paid or being forced to take less than the full paid or being forced to take less than the full amount billedamount billed

– Agreement often defines scope of Agreement often defines scope of representation, which is important to avoid representation, which is important to avoid being pulled into disputes that were not being pulled into disputes that were not contemplatedcontemplated

– Agreement should have client’s signature as Agreement should have client’s signature as well as lawyer’s signaturewell as lawyer’s signature


• Failure to communicate all settlement Failure to communicate all settlement offersoffers– May think offer is totally unacceptable, but May think offer is totally unacceptable, but

must still advise client of offermust still advise client of offer– Free to offer your recommendation on offerFree to offer your recommendation on offer


• Failure to keep client informed of progress Failure to keep client informed of progress of matterof matter– Copies of all incoming and outgoing Copies of all incoming and outgoing

correspondence, pleadings, emails, etc.correspondence, pleadings, emails, etc.– FoonbergFoonberg says “bombard them with paper” at says “bombard them with paper” at

p 542p 542– Client should have a file nearly complete as Client should have a file nearly complete as

your ownyour own• Some firms provide nice binders for this purpose at Some firms provide nice binders for this purpose at

beginning of representationbeginning of representation


• Media advertisingMedia advertising– Follow the three “T’s”Follow the three “T’s”

• TruthfulTruthful• TastefulTasteful• TentativeTentative

– Do not guarantee resultsDo not guarantee results

– Most complaints come from fellow lawyers, Most complaints come from fellow lawyers, not clientsnot clients


• Indirect media advertisingIndirect media advertising– Keep yourself in the newsKeep yourself in the news

• Frequent press releases trumpeting Frequent press releases trumpeting accomplishments and awardsaccomplishments and awards

• Keep a list of all media contacts in your area Keep a list of all media contacts in your area including email addresses, fax numbers, telephone including email addresses, fax numbers, telephone numbers, etc.numbers, etc.

– Recognize when case related publicity may Recognize when case related publicity may be helpful to you but hurt your client – Avoid be helpful to you but hurt your client – Avoid crossing this linecrossing this line


• Nonsolicitation mailingsNonsolicitation mailings– Firm newslettersFirm newsletters

• Paper and emailPaper and email

– AnnouncementsAnnouncements– BrochuresBrochures– Holiday cardsHoliday cards– PR mailings with copies or excerpts of articles PR mailings with copies or excerpts of articles

about self or firmabout self or firm


• ““No recovery, no fee” advertisingNo recovery, no fee” advertising– Client may still be liable for costs, which can Client may still be liable for costs, which can

be substantialbe substantial– May also be sanctions or other penalties for May also be sanctions or other penalties for

non-meritorious filingsnon-meritorious filings


• Selection of firm nameSelection of firm name– Many jurisdictions have restrictions on Many jurisdictions have restrictions on

fictitious namesfictitious names• Often can’t use name that sounds like a research Often can’t use name that sounds like a research

or educational non-profit institutionor educational non-profit institution

– Can’t always use names of deceased lawyersCan’t always use names of deceased lawyers– Can often use names that describe the nature Can often use names that describe the nature

of the firm’s practiceof the firm’s practice• ““Business Litigation Group”Business Litigation Group”• ““Environmental Law Group”Environmental Law Group”


• Buying or selling law practiceBuying or selling law practice– Many states still prohibit the direct sale or Many states still prohibit the direct sale or

purchase of a law practicepurchase of a law practice– Forming entity for merger purposes, then Forming entity for merger purposes, then

transferring “goodwill” is a workaroundtransferring “goodwill” is a workaround


• Coaching a client to lieCoaching a client to lie– Ethical violation everywhereEthical violation everywhere– Some jurisdictions require lawyer to withdraw Some jurisdictions require lawyer to withdraw

and blow whistle on client if lawyer is and blow whistle on client if lawyer is convinced that the client liedconvinced that the client lied


• Failure to turn over client file when Failure to turn over client file when dischargeddischarged– Must return to client all property, including Must return to client all property, including

documents, that belong to the clientdocuments, that belong to the client– Must provide copies of all other file Must provide copies of all other file

documentsdocuments• Who bears the copying cost varies with jurisdiction, Who bears the copying cost varies with jurisdiction,

but this can often be specified in the fee but this can often be specified in the fee agreementagreement


• Premature destruction of client filePremature destruction of client file– Should first return documents belonging to Should first return documents belonging to

clientclient– Must be able to demonstrate compliance with Must be able to demonstrate compliance with

file retention policyfile retention policy– Best to have policy in fee agreement signed Best to have policy in fee agreement signed

by clientby client– Archive paper files on CD or DVDArchive paper files on CD or DVD


• Inadvertent violations of Attorney-Client Inadvertent violations of Attorney-Client confidencesconfidences– Discussion of client matters in public placesDiscussion of client matters in public places– Misdirected mail, faxes, emailsMisdirected mail, faxes, emails– Sending enclosures to wrong person via mail Sending enclosures to wrong person via mail

(or attaching wrong files to email)(or attaching wrong files to email)– Failure to use “Personal and Confidential” on Failure to use “Personal and Confidential” on

sensitive mail, faxes, emailsensitive mail, faxes, email– Not protecting identity of clientNot protecting identity of client


• Failure to teach client confidentiality to:Failure to teach client confidentiality to:– Members of lawyer’s familyMembers of lawyer’s family– Independent contractorsIndependent contractors– Office staff and others who come into contact Office staff and others who come into contact

with case filewith case file

• Special problem in smaller or close-knit Special problem in smaller or close-knit communitiescommunities


• Trust account violationsTrust account violations– Overdrawing trust account usually ethical Overdrawing trust account usually ethical

violation “per se” with no defenseviolation “per se” with no defense– Taking client funds for personal use almost Taking client funds for personal use almost

always results in suspension or disbarmentalways results in suspension or disbarment


• Getting into business deals with clientsGetting into business deals with clients– Never trade fees for a “piece of the action” in Never trade fees for a “piece of the action” in

a questionable business venturea questionable business venture– FoonbergFoonberg, p 555: “A lawyer who wears two , p 555: “A lawyer who wears two

hats has no head”hats has no head”– May move services outside of your May move services outside of your

malpractice policy coveragemalpractice policy coverage


• Alternative billing methodsAlternative billing methods– Results-oriented “bonus” fees not permitted in Results-oriented “bonus” fees not permitted in

every jurisdiction or in all types of casesevery jurisdiction or in all types of cases• Florida does not permit results-oriented fees in Florida does not permit results-oriented fees in

family law cases because they too closely family law cases because they too closely resemble an impermissible contingent feeresemble an impermissible contingent fee


• Overly “zealous” representation of clientOverly “zealous” representation of client– Rule permitting zealous representation not a Rule permitting zealous representation not a

blank check to win at all costsblank check to win at all costs– Zealous is not the same as hostile or Zealous is not the same as hostile or

aggressiveaggressive– Often results in running up a bill the client is Often results in running up a bill the client is

unable or unwilling to payunable or unwilling to pay

• Balance Balance duty to client with duty to legal duty to client with duty to legal system and duty to societysystem and duty to society


• Filing non-meritorious casesFiling non-meritorious cases– Failure to adequate investigate factsFailure to adequate investigate facts– Failure to develop a legal theory on which Failure to develop a legal theory on which

recovery may be obtainedrecovery may be obtained

• Sanctions can be levied against client, Sanctions can be levied against client, lawyer, or bothlawyer, or both

• Sanctioned client will often grieve or sue Sanctioned client will often grieve or sue lawyer who gave bad advicelawyer who gave bad advice


• Communicating with adverse party Communicating with adverse party represented by counselrepresented by counsel– Happens far too often in family casesHappens far too often in family cases

• Communicating “ex parte” with court or Communicating “ex parte” with court or court staffcourt staff– Limit communication to procedural issues Limit communication to procedural issues

such as confirming court dates, etc.such as confirming court dates, etc.


• Suppressing or sanitizing evidenceSuppressing or sanitizing evidence– Don’t hide discoverable evidence or counsel Don’t hide discoverable evidence or counsel

clients to do soclients to do so– Don’t alter or “clarify” documentsDon’t alter or “clarify” documents

Foonberg’sFoonberg’s 10 Rules 10 Rules

1.1. Discuss fees and expectations with client Discuss fees and expectations with client at beginning of representationat beginning of representation

2.2. Have written fee agreementHave written fee agreement

3.3. Bombard clients with paper (today, Bombard clients with paper (today, emailed PDF versions of paper)emailed PDF versions of paper)

4.4. Return all telephone calls promptlyReturn all telephone calls promptly

5.5. Be open and honest with bad news for Be open and honest with bad news for clientclient

Foonberg’sFoonberg’s 10 Rules (cont.) 10 Rules (cont.)

6.6. Hands-off client’s money (no dipping into Hands-off client’s money (no dipping into trust account before fee is earned)trust account before fee is earned)

7.7. Cooperate fully with substitute counsel Cooperate fully with substitute counsel when you are dischargedwhen you are discharged

8.8. Respond immediately and completely to Respond immediately and completely to all disciplinary inquiriesall disciplinary inquiries

9.9. Keep accurate time recordsKeep accurate time records10.10. Read and understand your state’s Read and understand your state’s

ethical rules and and interpretive opinions

http://www.floridabar.org/divexe/rrtfb.nsf/WContents?OpenView&Start=1&Count=200&Expand=4

http://www.floridabar.org/tfb/TFBETOpin.nsf/EthicsIndex?OpenForm

If you violate the rules…If you violate the rules…Types of Discipline in FL - Rule 3-5Types of Discipline in FL - Rule 3-5

• Admonishment Admonishment – Only applies to “Minor Misconduct”Only applies to “Minor Misconduct”

• Probation for 6 months to 3 yearsProbation for 6 months to 3 years– Professionalism Enhancement ProgramProfessionalism Enhancement Program– Supervision by another Bar memberSupervision by another Bar member– Restrictions on AdvertisingRestrictions on Advertising

• Public ReprimandPublic Reprimand• SuspensionSuspension

– Indefinite or Term of Up to 3 YrsIndefinite or Term of Up to 3 Yrs– More Than 90 Days Requires Proof of RehabilitationMore Than 90 Days Requires Proof of Rehabilitation

• DisbarmentDisbarment

Minor Misconduct?Minor Misconduct?• Cannot involve misappropriation of client fundCannot involve misappropriation of client fund

– Many trust account violations will not be merely “minor Many trust account violations will not be merely “minor misconduct”misconduct”

• Cannot result in actual prejudice to a clientCannot result in actual prejudice to a client• Cannot include dishonesty, misrepresentation, Cannot include dishonesty, misrepresentation,

deceit, or frauddeceit, or fraud• Cannot constitute a felonyCannot constitute a felony• Lawyer cannot have been disciplined in any way Lawyer cannot have been disciplined in any way

in past 3 yearsin past 3 years• Lawyer cannot have been disciplined for same Lawyer cannot have been disciplined for same

type of misconduct in past 5 yearstype of misconduct in past 5 years

If Suspended or Disbarred…If Suspended or Disbarred…

• Must Send Notice to Clients, Opposing Must Send Notice to Clients, Opposing Counsel and Courts of the Disciplinary Counsel and Courts of the Disciplinary DecisionDecision

• Forfeiture of FeesForfeiture of Fees• Payment of RestitutionPayment of Restitution• Payment of Costs of Disciplinary Payment of Costs of Disciplinary

ProceedingsProceedings

Problem #7Problem #7

What law practice management techniques What law practice management techniques can be used to minimize the risk of a Bar can be used to minimize the risk of a Bar grievance?grievance?

Law Practice Management Class #6 – Conflicts and Bar Grievances.

Documents

Transcript of Law Practice Management Class #6 – Conflicts and Bar Grievances.