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Opinion #196: Transmission, Retrieval and Use of Metadata Embedded in Documents
Issued by the Professional Ethics Commission
Date Issued: October 21, 2008
Question
Bar Counsel has asked for the Commission?s opinion concerning the application of the Bar Rules to the ethical duties of lawyers involving the transmission, retrieval and use of metadata embedded in documents which may reveal client confidences or other legally privileged information (?confidential information?). The issue gives rise to two questions: first, whether it is ethical for an attorney receiving electronic documents (the ?receiving attorney?) to make efforts to uncover embedded metadata that contains confidential information not intended to be communicated by the attorney transmitting the document (the ?sending attorney?); and second, whether the sending attorney has an ethical duty to take reasonable measures to remove metadata containing confidential information before document transmission. Applying the principles of Bar Rules 3.2(f)(3) and (4),[1] 3.6(h)(1) and (2),[2] and 3.6(a),[3] the Law Court?s reasoning in Corey v. Norman, Hanson & DeTroy,[4] this Commission?s Opinions 172 (2000), 194 (2007) and 195 (2008), as well as opinions from other states following the lead of New York, we draw the following conclusions:
Without authorization from a court,[5] it is ethically impermissible for an attorney to seek to uncover metadata, embedded in an electronic document received from counsel for another party, in an effort to detect confidential information that should be reasonably known not to have been intentionally communicated.
A sending attorney has an ethical duty to use reasonable care when transmitting an electronic document to prevent the disclosure of metadata containing confidential information.
Discussion
Lawyers today routinely make use of electronic document transmission, including in communications to opposing counsel. Such documents often contain metadata, which is peripheral information electronically embedded within the document but often not seen by and sometimes not even known to those who produce or read it.6 Much metadata is mundane and legally inconsequential, lodged within the document by the software and identifying the date and time that the document was produced and the version of the software utilized. Some of this data may be accessed with as little effort as resting the cursor upon, or right clicking, the document icon. However, purposeful efforts to ?mine? metadata in a document may allow a receiving attorney to glean information that was clearly never intended to be communicated by the sending attorney. The revelation of such metadata could result in the disclosure of client confidences, litigation and negotiation strategy, legal theories, attorney work product and other legally privileged and confidential information. Due to the rapid advance and general opaqueness of some computer technology, it may not be reasonably possible for an attorney to know all the types of metadata that might be embedded in a document or the extent to which such data may be subject to being probed by someone using extraordinary but technologically available methods.
A number of other jurisdictions have considered these questions. While there are inconsistent approaches taken regarding the ethical duties of receiving attorneys in probing documents for metadata containing confidential information, there is greater harmony among the jurisdictions with respect to the duties of sending attorneys to take reasonable measures to minimize the prospect that such data will be inadvertently transmitted. In this Opinion, the Commission adopts a balanced view, articulating reasonable ethical duties on both the receiving and sending attorneys.
Duties of Receiving Attorneys in Probing Documents for Metadata Containing Confidential Information
In the first major bar ethics opinion on the subject, relying principally upon a lawyer?s ethical duty to refrain from dishonest, fraudulent, or deceitful conduct, New York determined that ?Lawyers may not ethically use available technology to surreptitiously examine and trace email and other electronic documents.? NY Bar Ethics Op. 749 (2001). Citing a 1992 ABA opinion, New York concluded that ?the strong policy in favor of confidentiality outweighs what might be seen as the competing principles of zealous representation?.? ?No such balance need be struck here because it is a deliberate act by the receiving lawyer, not carelessness on the part of the sending lawyer, that would lead to the disclosure of client confidences and secrets.?
Three years later, in an opinion discussed below focused on the duties of sending attorneys, New York renewed its ethical admonition to receiving attorneys: ?Lawyer-recipients also have an obligation not to exploit an inadvertent or unauthorized transmission of client confidences or secrets.? NY Bar Ethics Op. 782 (2004).
Generally following New York?s lead, Florida concluded that ?A lawyer receiving an electronic document should not try to obtain information from metadata that the lawyer knows or should know is not intended for the receiving lawyer. A lawyer who inadvertently receives information via metadata in an electronic document should notify the sender of the information?s receipt.??It is the recipient lawyer?s concomitant obligation, upon receiving an electronic communication or document from another lawyer, not to try to obtain from metadata information relating to the representation of the sender?s client that the recipient knows or should know is not intended for the recipient.?FL Bar Ethics Op. 06-02 (2006).
Emphasizing ?the strong public policy in favor of preserving confidentiality as the foundation of the lawyer-client relationship,? Alabama followed the New York analysis in finding that ?the receiving lawyer also has an ethical obligation to refrain from mining an electronic document.? ?The disclosure of metadata contained in an electronic submission to an opposing party could lead to the disclosure of client confidences and secrets, litigation strategy, editorial comments, legal issues raised by the client, and other confidential information.? AL Bar Ethics Op. 2007-02 (2007).
In contrast to the New York rule, some jurisdictions have adopted a view that more or less liberates receiving attorneys from ethical considerations in probing metadata in electronic documents, thereby placing upon the sending attorney the entire burden of cleansing the document of any possible, embedded client confidences or other privileged information. This view is based upon the fact that no bar rule specifically addresses the issue, together with the difficulty in prescribing permissible conduct in the context of rapidly changing technology.
Thus, recognizing that ?metadata is ubiquitous in electronic documents? and that its model rules ?do not contain any specific prohibition against a lawyer?s reviewing and using embedded information in electronic documents,? the ABA opinion placed the sole ethical obligation on the sending attorney: ?A lawyer who is concerned about the possibility of sending, producing, or providing to opposing counsel a document that contains or might contain metadata, or who wishes to take some action to reduce or remove the potentially harmful consequences of its dissemination, may be able to limit the likelihood of its transmission by ?scrubbing? metadata from documents or by sending a different version of the document without the embedded information.? ABA Ethics Op. 06-442 (2006).
Following the ABA view, Maryland concluded that ?there is no ethical violation if the recipient attorney? reviews or makes use of metadata without first ascertaining whether the sender intended to [send it].? MD Bar Ethics Op. 2007-09 (2007). Likewise, Colorado rejected New York?s and adopted a variation of the ABA?s view, emphasizing the responsibilities of the sending lawyer ?to guard against the disclosure of metadata containing Confidential Information? and ?to ensure that he or she is reasonably informed about the types of metadata that may be included in an electronic document or file and steps that can be taken to remove metadata if necessary.? [7] Generally absolving the receiving attorney of ethical responsibilities in probing metadata embedded in the document (?[T]here is nothing inherently deceitful or surreptitious about searching for metadata?), Colorado reasoned that the lawyer ?who receives electronic documents or files generally may search for and review metadata.? However, Colorado went on to create a complex and perhaps impractical set of requirements for the parties to such communications: ?If a Receiving Lawyer knows or reasonably should know that the metadata contain ? Confidential Information, the Receiving Lawyer should assume that the Confidential Information was transmitted inadvertently unless the Receiving Lawyer knows that confidentiality has been waived. The Receiving Lawyer must promptly notify the Sending Lawyer,? in which case ?the lawyers may, as a matter of professionalism, discuss whether a waiver of privilege or confidentiality has occurred.? If, however, before examining the metadata, ?the Receiving Lawyer receives notice from the sender that Confidential Information was inadvertently included, the Receiving Lawyer must not examine the metadata and must abide by the sender?s instructions regarding the disposition of the metadata.? CO Bar Ethics Op. 119 (2008).
Two other jurisdictions have adopted variations on the New York and ABA views. Acknowledging that there is no specific rule determining the ethical obligations of attorneys in this particular context, Pennsylvania arrived at what seems a default. ?[E]ach attorney must? ?resolve [the issue] through the exercise of sensitive and moral judgment guided by the basic principles of the Rules? and determine for himself or herself whether to utilize the metadata contained in documents and other electronic files based upon the lawyer?s judgment and the particular factual situation.? ?The utilization of metadata by attorneys receiving electronic documents from an adverse party is an emerging problem. Although a transmitting attorney has tools at his or her disposal that can minimize the amount of metadata contained in a document he or she is transmitting, those tools still may not remove all metadata.? PA Bar Ethics Op. 2007-500 (2007).The District of Columbia has articulated yet another approach: ?A receiving lawyer is prohibited from reviewing metadata sent by an adversary only where he has actual knowledge that the metadata was inadvertently sent.? (emphasis added). ?[W]e believe that mere uncertainty by the receiving lawyer as to the inadvertence of the sender does not trigger an ethical obligation by the receiving lawyer to refrain from reviewing the metadata?. Where there is such actual prior knowledge?, the receiving lawyer?s ethical duty of honesty requires that he refrain from reviewing the metadata until he has consulted with the sending lawyer to determine whether the metadata includes privileged or confidential information.? DC Bar Ethics Op. 341 (2007).
Having considered all of the approaches extant, this Commission believes that the better view is that generally expressed by New York and the jurisdictions that have followed it. While the Commission recognizes, as is the case in those jurisdictions, that no Bar Rule specifically addresses this particular situation, and the Commission is appropriately cautious in its specific application of the general proscription in Bar Rule 3.2(f)(3) and (4) on attorneys engaging in conduct involving dishonesty or prejudicial to the administration of justice, an attorney who purposefully seeks to unearth confidential information embedded in metadata attached to a document provided by counsel for another party, when the attorney knows or should know that the information involved was not intended to be disclosed, has acted outside of these broad ethical requirements. While the Commission has considered the contrary view held by the ABA and the states that have followed it, the Commission believes that Bar Rule 3.2(f)(3) and (4) would have little (and we believe quite inadequate) meaning if it were not applied in this situation. Not only is the attorney?s conduct dishonest in purposefully seeking by this method to uncover confidential information of another party, that conduct strikes at the foundational principles that protect attorney-client confidences, and in doing so it clearly prejudices the administration of justice.
The Law Court?s decision in Corey, while not directly addressing the Bar Rules, and the Commission?s adoption of Corey in Opinion 172 (reversing Opinion 146), offer additional support for this conclusion. There, the issue was whether an attorney might retain and make use of confidential information that had been inadvertently disclosed to him by opposing counsel, the Law Court determining that he could not, based upon the shared responsibility to protect the attorney-client privilege. [8] In Opinion 172, this Commission determined that it would be a violation of the Bar Rules, in direct contravention of the holding in Corey and therefore prejudicial to the administration of justice, for an attorney to retain and make use of such information. If anything, the issue before us now is more straightforward. Unlike in Corey, here the receiving attorney is making purposeful efforts to probe for information he or she knows or should know to be confidential and not to have been knowingly communicated by opposing counsel. That such conduct is dishonest and designed to prejudice the administration of justice seems beyond dispute.
In sum, following the general analysis of New York and the other states that have adopted its view, and based upon Bar Rule 3.2(f)(3) and (4) and Corey, we find that an attorney may not ethically take steps to uncover metadata, embedded in an electronic document sent by counsel for another party, in an effort to detect information that is legally confidential and is or should be reasonably known not to have been intentionally communicated.[9]
Ethical Duties of Sending Attorneys in Taking Measures to Avoid Transmission of Metadata Containing Confidential Information
While the jurisdictions opining to date have arrived at inconsistent views in dealing with the ethical duties of document-receiving attorneys, there has been relative unanimity in dealing with those of sending attorneys. Therefore, we have no difficulty in following the consensus approach on the subject.
New York determined that sending attorneys have a duty to take reasonable measures to guard against improper disclosure of confidential information contained in metadata in documents transmitted to other parties. This conclusion was based on the rule ?that a lawyer shall not ?knowingly? reveal a confidence or secret of a client.? ?When a lawyer sends a document by email, as with any other type of communication, a lawyer must exercise reasonable care to ensure that he or she does not inadvertently disclose his or her client?s confidential information.? NY Bar Ethics Op. 782 (2004).
Following New York?s lead, Florida concluded that ?A lawyer who is sending an electronic document should take care to ensure the confidentiality of all information contained in the document, including metadata.? ?It is the sending lawyer?s obligation to take reasonable steps to safeguard the confidentiality of all communications sent by electronic means? and to protect from other lawyers and third parties all confidential information, including information contained in metadata.? ?The foregoing obligations may necessitate a lawyer?s continuing training and education in the use of technology in transmitting and receiving electronic documents in order to protect client information.? FL Bar Ethics Op. 06-02 (2006).
Alabama, Maryland, Colorado and Pennsylvania have all followed suit. AL Bar Ethics Op. 2007-02 (2007); MD Bar Ethics Op. 2007-09 (2007); CO Bar Ethics Op. 119 (2008); PA Bar Ethics Op. 2007-500 (2007). However, those jurisdictions following the ABA analysis (described above), in finding few or no ethical duties of the receiving attorney to refrain from probing document metadata, have placed a correspondingly heavier burden on the sending attorney to take measures to avoid the transmission of metadata containing confidential information. ?The ultimate responsibility for control of metadata rests with the Sending Lawyer,? who ?may not limit the duty to exercise reasonable care in preventing the transmission of metadata that contain Confidential Information by remaining ignorant of technology relating to metadata or failing to obtain competent computer support.? CO Bar Ethics Op. 119 (2008). Going further, the Colorado opinion suggests that attorneys should access resources exceeding those normally expected of lawyers by retaining computer experts who understand the reach of metadata and methods to avoid transmission of confidential information embedded therein.
While we stop short of embracing the full force of Colorado?s advice, we agree with the other jurisdictions that attorneys are ethically required to take reasonable measures to avoid the communication of confidential information, regardless of the mode of transmission. This duty logically extends to metadata that the attorney should reasonably know may lie within an electronic document. If an attorney is in doubt, many documents can be readily converted to generic files (such as PDF) which retain little of the metadata contained in word processing documents, and of course resort can be made to paper copies where issues of metadata confidentiality are significant. Although we do not believe that an attorney?s ethical duties dictate, in routine work, the retention of a computer expert for these purposes, we also do not believe it reasonable for an attorney today to be ignorant of the standard features and capabilities of word processing and other software used by that attorney, including their reasonably known capacity for transmitting certain types of data that may be confidential.
This Opinion is consistent with others the Commission has recently issued dealing with confidentiality of information in the computer era. In Opinion 195 (2008), the Commission concluded that, as a general matter and subject to appropriate safeguards, an attorney may utilize unencrypted e-mail without violating the attorney's ethical obligation to maintain client confidentiality. The issue invoked the prohibition on knowing disclosure of confidential client information under Bar Rule 3.6(h)(1) as well as the general standard requiring lawyers to "employ reasonable care and skill and apply the lawyer's best judgment in the performance of professional services? under Bar Rule 3.6(a). While we found that it is reasonable for attorneys transacting routine business through unencrypted email, some circumstances might require a more secure method of communication.
Likewise, in Opinion 194 (2007), the Commission concluded that, with appropriate safeguards, an attorney may utilize transcription and computer server backup services remote from both the lawyer's physical office and the lawyer's direct control or supervision, without violating the attorney's ethical obligation to maintain client confidentiality. The Opinion cautioned, however, that the lawyer utilizing such services has a duty to take practical measures to assure that the services are reasonably secure and appropriate for the intended purpose. [10] As here, the issue is not amenable to an unqualified answer but requires the application of a standard of reasonableness, weighing all the factors of which the lawyer should be aware.[11]
On the issue before us, we conclude that, in applying Bar Rules 3.6(h)(1) and (2) in combination with 3.6(a), the sending attorney has an ethical duty to use reasonable care when transmitting an electronic document to prevent the disclosure of metadata containing confidential information. Undertaking this duty requires the attorney to reasonably apply a basic understanding of the existence of metadata embedded in electronic documents, the features of the software used by the attorney to generate the document and practical measures that may be taken to purge documents of sensitive metadata where appropriate to prevent the disclosure of confidential information.
Footnotes
[1] Rule 3.2(f) sets forth an attorney?s ethical obligations in broad terms: ?A lawyer shall not:? (3) engage in conduct involving dishonesty, fraud, deceit, or misrepresentation; (4) engage in conduct that is prejudicial to the administration of justice.?
[2] Rule 3.6(h)(1) sets forth an attorney?s ethical obligations to maintain client confidentiality:
Except as permitted by these rules, or when authorized in order to carry out the representation, or as required by law or by order of the court, a lawyer shall not, without informed consent, knowingly, disclose or use information (except information generally known) that:
i. Is protected by the attorney-client privilege in any jurisdiction relevant to the representation;
ii. Is information gained in the course of representation of a client or former client for which that client or former client has requested confidential treatment;
iii. Is information gained in the course of representation of the client or former client and the disclosure of which would be detrimental to a material interest of the client or former client; or
iv. Is information received from a prospective client, the disclosure of which would be detrimental to a material interest of that prospective client, when the information is provided under circumstances in which the prospective client has a reasonable expectation that the information will not be disclosed.
Rule 3.6(h)(2) addresses an attorney?s ethical obligation to ensure that others working on the attorney?s behalf in the course of representation who are privy to confidential client information likewise maintain the client's confidences: "A lawyer shall exercise reasonable care to prevent lawyers and non-lawyers employed or retained by or associated with the lawyer from improperly disclosing or using information protected by paragraph (1) of this subdivision."
[3] Rule 3.6(a) sets forth a general standard requiring lawyers to "employ reasonable care and skill and apply the lawyer's best judgment in the performance of professional services.?
[4] 199 ME 196
[5] This Opinion is not intended to deal with the extent to which relevant information may be sought in litigation through proper discovery under the guidance of a court.
[6] Although the type of metadata embedded in an electronic document varies with the software being used. and its full scope is unknown except to those with advanced computer expertise, examples include recording of the document?s source, authors, editors and those offering comments, as well as changes and comments made in the course of document preparation. Some metadata may reveal client confidences and attorney work product and advice, among other confidential information.
[7] While metadata may be ?ubiquitous? (to use the words of the ABA), we think that, with rapid technological advances, it may be overly simple to assume that an attorney may reasonably be able to know its full extent in all the software applications used, or that easily applied steps will cleanse the document of all embedded information not intended to be revealed. While reasonable steps can and should be taken to minimize the amount of metadata contained in an electronic document to be transmitted to another party, and of course the document can be transmitted in paper copy if security is paramount, there is no absolute assurance that electronic transmission of documents can be undertaken in a manner that is totally immune from unwanted probing for confidential information.
[8] ?In Corey, the Law Court, jurisdictionally unconstrained, has now pronounced that, as a matter of common law, the obligation to preserve the lawyer-client privilege is indeed an affirmative obligation shared by adversaries, and that the privilege cannot be inadvertently relinquished.? Opinion 172.
[9] See footnote 5.
[10] As stated in Opinion 194, ?[T]he primary responsibility for file integrity, maintenance, disposition, and confidentiality rests with the attorney employed by the client. See Maine Professional Ethics Commission Opinion # 74 (10/1/86)?. Rule 3.6(h)(2) implies that lawyers have a responsibility to train, monitor, and discipline their non-lawyer staff in such a manner as to guard effectively against breaches of confidentiality. Failure to take reasonable steps to provide adequate training, to monitor performance, and to apply discipline for the purpose of enforcing adherence to ethical standards is grounds for concluding that the lawyer has violated Rule 3.6(h)(2). See Maine Professional Ethics Commission Opinion #134 (9/21/93).?
[11] ?With the pervasive and changing use of evolving technology in communication and other aspects of legal practice, particular safeguards which might constitute reasonable efforts in a specific context today may be outdated in a different context tomorrow. Therefore, rather than attempting to delineate acceptable and unacceptable practices, this opinion will outline guidance for the lawyer to consider in determining when professional obligations are satisfied.? Opinion 194.
Enduring Ethics Opinion
Opinion #195: Client Confidences: Communications with clients by unencrypted e-mail
Issued by the Professional Ethics Commission
Date Issued: June 30, 2008
Question
Bar Counsel has requested a formal opinion on the following question:
Is it a violation of Maine Bar Rule 3.6(h) (confidentiality of information) for an attorney to communicate with clients by unencrypted e-mail.
Opinion
The Commission concludes that, as a general matter and subject to appropriate safeguards, an attorney may utilize unencrypted e-mail without violating the attorney's ethical obligation to maintain client confidentiality.
Bar Rule 3.6(h)(1) provides that ?a lawyer shall not, without informed consent, knowingly disclose? confidential information ?except as permitted by these rules, or when authorized in order to carry out the representation, or as required by law or by order of the court.? Whether in paper or e-mail form, much correspondence between attorneys and clients is obviously confidential under Rule 3.6(h)(1).
In 1999, the American Bar Association Standing Committee on Ethics and Professional Responsibility (ABA) issued Formal Opinion No. 99-413, providing a comprehensive analysis of the obligations of lawyers regarding e-mail communication under the Model Rules of Professional Conduct.[1] The opinion discusses the risks of disclosure inherent in many of the forms of communication available today to attorneys and their clients, including different e-mail technologies. [2] Internet e-mail was considered to be the least secure, although of course it is the most common method of e-mail transmission. The ABA concluded that lawyers had:
?a reasonable expectation of privacy in communications made by all forms of e-mail, including unencrypted e-mail sent on the Internet, despite some risk of interception and disclosure.?
In reaching this conclusion, the ABA relied on both law and science for reasons that remain relevant today. Federal law criminalizes unauthorized interception or disclosure of e-mail in transit or storage and strictly regulates the rights of internet service providers (ISPs), through whose computers internet e-mail passes, to inspect traffic. [3] In addition, the electronic process of sending e-mail divides individual transmissions into fragments of information, each of which follows a different path through the internet before being reassembled on the receiver?s computer. In view of the federal legal prohibitions and the technological difficulties of intercepting more than a fragment of any communication, the ABA concluded that there was a reasonable expectation of privacy in unencrypted e-mail.
Most other jurisdictions that have considered this question have arrived at the same conclusion. [4] Opinions to the contrary have noted the possibility of interception despite these legal and technological safeguards and have advised attorneys to either obtain informed consent from clients or use encryption prior to sending confidential information by e-mail. [5]
The Commission finds the reasoning in the ABA and majority opinions to be persuasive and hence concludes that an attorney generally may utilize unencrypted e-mail without violating the attorney's ethical obligation to maintain client confidentiality, subject to the caveats discussed below.
The Commission, however, notes that Maine Bar Rule 3.6(a) sets forth a general standard requiring lawyers to "employ reasonable care and skill and apply the lawyer's best judgment in the performance of professional services.? When exercising professional judgment in choosing a particular form of communication, lawyers should consider both the content of the communication as well as the security of the email address to which it is being sent. For example, an attorney representing a client in a divorce would generally not send sensitive advice in a letter to the client?s home address if the couple had not yet separated. Similarly, lawyers should be sensitive to the fact that others may have access to a client?s e-mail address, especially at home. Likewise, some places of business routinely monitor their employees? e-mail and often have access to it.
Of greater concern is the prospect of misaddressed email or that which is replied ?to all? in response to a broadcast email when some of the original recipients are not intended to receive the reply. [6] However, that potential problem must be dealt with through the routine application of diligence and is not corrected by use of encrypted email. Finally, since e-mail interception, though unlikely, is a possibility, attorneys should employ reasonable judgment in selecting a means of communication other than the internet when the information is of such a highly confidential nature that disclosure would result in significant damage to the client?s interests.
While it is impractical to try to fashion precise rules concerning email conduct geared to specific circumstances and ever-changing technology, as general guidance attorneys should discuss with clients their preferred method(s) of communication and follow the client?s wishes, should consider the degree of confidentiality of particular information in determining appropriate means to send it, and should take reasonable precautions to make sure that the address is correct and properly targeted. With these general cautions in mind, and noting that reasonable judgment may require additional safeguards depending upon the circumstances, an attorney may utilize unencrypted e-mail without violating the attorney's ethical obligation to maintain the confidentiality of client information. [7]
Footnotes
[1] Model Rule 1.6 provides that ?a lawyer shall not reveal information relating to the representation of a client unless the client gives informed consent.?
[2] The opinion discusses postal service and commercial mail systems, landline telephones, cordless and cellular phones and facsimile, in addition to e-mail.
[3] See 18 U.S.C. §§ 2510 et. seq.
[4] See for example Ohio Ethics Opinion No. 99-2 (April 9, 1999), Hawaii Ethics Opinion No. 40 (April 26, 2001), Utah Ethics Opinion No. 00-01 (March 9, 2000), Florida Ethics Opinion No. 00-4 (July 15, 2000), Delaware Ethics Opinion No. 2001-2 (2001), Virginia Ethics Opinion No. 1791 (December 22, 2003), and the other authorities set forth in footnote 40 of ABA Formal Opinion No. 99-413.
[5] See Iowa Bar Ass?n. Op No. 1997-1 (1997). Missouri Bar Disciplinary Counsel requires lawyers to notify all recipients of e-mail that (1) e-mail communication is not a secure method of communication; (2) any e-mail that is sent may be copied and held by various computers it passes through; and (3) persons not participating in a communication may intercept it by improperly accessing a computer through which email has passed.
[6] For example, if an attorney sends her client a copy of an email to opposing counsel, that client may inadvertently also receive a copy of a reply ?to all? from opposing counsel. In addition to the simple miscommunication, this could implicate Bar Rule 3.6(f), which prohibits communication with a represented party.
[7] Since non-lawyer staff may participate in client communications, attorneys should be aware of Maine Bar Rule 3.13(c) as regards training non-lawyer staff on office policies and any specific constraints relevant to a particular client. See for reference Opinion #134.
Enduring Ethics Opinion
Enduring Ethics Opinion #195 [December 2011 and June 2013]
Opinion #197: Nonprofit Board of Directors provides services to domestic violence victims, attorney member's obligation to preserve confidences between organization and a party receiving its services
Issued by the Professional Ethics Commission
Date Issued: May 20, 2009
Facts
The Commission has been asked for an opinion concerning the obligations of a member of a Board of Directors of a non-profit which offers legal assistance, as follows:
Attorney A is a member of the Board of Directors of a nonprofit organization O, which provides a variety of services to the victims of domestic violence.?O?s services include advice and assistance through a twenty-four hour hotline, temporary shelter services and public education on the issues of domestic violence.?O has a legal department consisting of one staff lawyer and several ?lay advocates.??Typically, members of the legal department attend the district court in the area at the times when protection from abuse cases are being considered, and are available to give plaintiffs advice, assistance in filling out a complaint for protection from abuse, negotiating consent orders, and the like.?When protection from abuse complaints go to hearing, the lay advocates may advise a plaintiff in how to present her own case; they typically do not maintain a formal record, nor does the court note the appearance of the lay advocate or of the organization.?The duties of the Board of Directors include the general policy direction of O, authorizing applications for grants, approving expenditures, and supervising the annual audit.?The Board of Directors hires, evaluates, and fires an executive director, who, in turn hires, evaluates, and fires the staff, including the attorney and the lay advocates.?Neither the board, nor any member has any access to confidential information or communications from the recipients of O?s services.
Attorney A has a practice which includes family matters such as divorce, parental rights cases, and occasionally protection from abuse prosecution or defense.?Attorney A routinely discloses his directorship of O to all prospective family matter clients.
Questions
? The question is under what circumstances, if any, is A precluded from representing party B, because the adverse party, C, has or is receiving services from O, as follows:
When C has received assistance from a lay advocate of O in a concluded protection from abuse matter against B?
When C is currently receiving assistance from a lay advocate in an active protection from abuse matter against B?
When C was receiving legal representation from the staff attorney of O in a concluded matter against B?
When C is currently receiving legal representation from the staff attorney in an active matter against B?
As a related matter, what is Attorney A?s obligation when he learns that the adverse party to a currently represented party has begun to receive services from O?
Opinion
The questions posed call for the application of the rules relating to conflicts of interest to the relationships Attorney A has (1) with B, his or her client, (2) with C, the adverse party receiving services from O, and (3) with O, the non-profit organization. In this regard, it is helpful to keep in mind two rules of general applicability that inform the analysis of each question. First, a conflict of interest is defined as:
a substantial risk that the lawyer?s representation of one client would be materially and adversely affected by the lawyer?s duties to another current client, to a former client, or to a third person, or by the lawyer?s own interests.
Bar Rule 3.4(b)(1).?
Second, whenever a lawyer knows of or becomes aware of circumstances that ?might reasonably give rise to a conflict of interest under these rules,? the lawyer has a duty to disclose those circumstances to his or her client or prospective client. Bar Rule 3.4(a)(1).?
In all five of the situations outlined above, the attorney?s initial duty to B, his client, is to disclose his position on O?s Board of Directors, as it might reasonably give rise to a conflict of interest. While the question states that ?Attorney A routinely discloses his directorship of O to all prospective family matter clients,? a specific disclosure must be made whenever it becomes apparent that the adverse party, C, is actually receiving services from O, as a general disclosure at the commencement of representation might not alert the client to the specific circumstances of his or her case.
A?s duty then is to determine whether there is a substantial risk that his representation of his client ?would be materially and adversely affected by [his] duties . . . to a third person or by the lawyer?s own interests.? This kind of analysis is underscored by the more specialized conflict of interest rule relating to one, such as a member of a Board of Directors, who has fiduciary duties:
Without the client?s informed consent, a lawyer may not undertake or continue to represent a client in any matter with respect to which the lawyer has a fiduciary or other legal obligation to another person if the obligation presents a substantial risk of materially and adversely affecting the lawyer?s representation of the client.?Bar Rule 3.4(e).
We do not have enough information about the lawyer?s relationship to the non-profit, or to others associated with it, to determine whether such an impact would occur. This is, however, a necessary area of self-inquiry for the attorney to explore. If he determines that his representation would be compromised because of his relationship with the organization, then he needs to either obtain the client?s informed consent or decline representation or withdraw if representation has already begun. [1] ? The next issue for consideration is what duty, if any, the attorney owes to C, the adverse party. Since there are no facts presented which would indicate that A rendered professional legal services to C or that an objective analysis of the facts could lead someone to believe that a legal representation ever ?commenced?, C is neither a client nor a former client of the attorney. See Bar Rules 3.4(a)(2) and 3.15(c) & (e). Hence, the attorney has no duty under the rules to C, and neither Bar Rule 3.4(d), the rule on successive representation, nor Bar Rule 3.4(c)(1), the rule prohibiting simultaneous representation of opposing parties, is implicated.?
The next issue for consideration is whether or not the attorney?s relationship with O, the non-profit, affects his representation of B. All five specific questions involve representation of the adverse party, C, by either a lay advocate [2] or staff attorney employed by O. Bar Rule 3.4(b)(3), the rule on imputed disqualification, would preclude representation only if A?s position in O was such that the advocate or staff attorney could be characterized as being A?s associate or being ?affiliated with [A] or [A?s] firm?. Although the term ?affiliated? can be read broadly, we do not interpret it to cover a situation, such as presented here, where A is merely a participant on a Board of Directors which hires an Executive Director who then hires the advocate and attorney. [3]?
Another issue to which the attorney needs to be alert in these kinds of situations, but which does not appear to be a problem here, is that of shared confidential information. Regardless of whether A can be deemed to have had an attorney-client relationship with C, if, by his association with the non-profit, he has acquired confidential information about C, A may at least have a continuing duty to keep the information confidential. Bar Rule 3.6(h)(1)(i) prohibits a lawyer from disclosing or using information ?protected by the attorney-client privilege?. This is so regardless of whether, as detailed in other sub-paragraphs, the information is obtained during the course of actual or potential representation.?See Maine Ethics Opinion #8 and Bar Rules 3.6(h)(1)(iv) and 3.15(d). Certainly any confidential information C gave to either an attorney or lay advocate employed by O would fall under Bar Rule 3.6(h)(1)(i), and attorney A has an obligation to preserve the lawyer-client privilege between O and C. See Maine Ethics Opinion #172 and Corey v. Norman, Hanson & DeTroy, 1999 ME 196, 742 A.2d 933; 1999 Me. LEXIS 220.?
In summation, the Bar Rules do not preclude the attorney from representing B in the situations described in questions #1 ? #4. However, as per question #5, the attorney must disclose to B his relationship with O whenever he learns that the adverse party, C, is receiving services from O. The attorney must either obtain informed consent, or must refuse employment or withdraw if he believes his obligation to O presents a substantial risk of materially and adversely affecting his representation of B.?
The Commission is mindful that on February 26, 2009, The Supreme Judicial Court ordered that certain sections of the Maine Bar Rules, including Rule 3, be abrogated and replaced by the Maine Rules of Professional Conduct (MRPC) as of August 1, 2009. Reference to the relevant provisions of the MRPC in opinions such as this one, which is being issued during the transition period, may prove helpful should similar questions arise after August 1st.?
As relevant to this opinion, the definition of a conflict of interest in Bar Rule 3.4(b)(1) is largely the same as the definition in Rule 1.7 of the MRPC, although the MRPC uses the word ?significant?, as opposed to the word ?substantial? to define the level of risk that would result in a conflict. Unlike the Maine Bar Rules, the MRPC requires that informed consent be confirmed in writing, although not necessarily signed by the client. See Reporter?s Notes to MRPC 1.7.
The MRPC would not alter the way the Commission views Attorney A?s relationship to adverse party C. The MRPC do not have a specific definition of ?client? as does current Rule 3.15(c), but MRPC Rule 1.18 regarding duties to prospective clients is consistent with current rule 3.15.?
Similarly, the MRPC would not alter the Commission?s conclusions regarding the effect Attorney A?s position on O?s Board of Directors might have on his representation of B. Comment (9) to MRPC Rule 1.7 is consistent with Bar Rule 3.4(e) in treating fiduciary responsibilities to third parties that could, depending upon the circumstances, result in a conflict of interest. However, no conflict could be imputed from organization O to Attorney A because MRPC Rule 1.10 only covers lawyers who are or have been ?associated in a firm.??
Although the MRPC does not include the precise wording of Bar Rule 3.6(h)(1)(i), Attorney A?s obligations regarding confidential information given by opposing parties to the attorneys or lay advocates employed by O would not change. See MRPC Rules 1.6, 1.18, and 4.4.?
Hence, our answers to the questions posed above would be largely the same under the MRPC, except that Attorney A?s self-examination of potential conflicts should focus on whether there is a ?significant?, as opposed to a ?substantial? risk that his relationship with O would materially affect his representation of B and that if he recognized a conflict, but reasonably believed that he could nevertheless provide competent and diligent representation, B?s informed consent would have to be confirmed in writing.
Footnotes
[1] ?Whether a client has given informed consent to representation, when required by this rule, shall be determined in light of the mental capacity of the client to give consent, the explanation of the advantages and risks involved provided by the lawyer seeking consent, the circumstances under which the explanation was provided and the consent obtained, the experience of the client in legal matters generally, and any other circumstances bearing on whether the client has made a reasoned and deliberate choice.? Bar Rule 3.4(b)(2).
[2] We are not given the details of the role of the lay advocate or his/her relationship to the staff attorney. We assume for the sake of this opinion that the advocate falls under the supervision of an attorney, pursuant to Bar Rule 3.13(c), with sufficient responsibility so as not to be engaged in the unauthorized practice of law. See Bar Rule 3.2(a)(2).
[3] Compare Maine Ethics Opinions #41 and #104.
Enduring Ethics Opinion
Opinion #194: Client Confidences: Confidential firm data held electronically and handled by technicians for third-party vendors
Issued by the Professional Ethics Commission
Date Issued: June 30, 2008
Question
An attorney has asked for guidance on the ethical propriety of using third party vendors to process and store electronically held firm data. The data would be transmitted to the third parties over a presumptively secure network connection. Processing of firm data may include transcription of voice recordings and transfer of firm computer files to an off-site "back-up" of the firm's electronically held data.
More specifically, the question is whether the use of such services and resources, which may involve disclosure of client information to technicians who maintain the relevant computer hardware and non-lawyer transcribers outside the sphere of the attorney's direct control and supervision, would violate the lawyer's obligation to maintain client confidentiality. The attorney further seeks guidance on what, if any, safeguards would make such practices permissible.
Opinion
While there is no provision of the Code of Professional Responsibility of the Maine Bar Rules that directly addresses this question, several provisions, along with previous opinions of this Commission, provide a framework for our response. We conclude that, with appropriate safeguards, an attorney may utilize transcription and computer server backup services remote from both the lawyer's physical office and the lawyer's direct control or supervision without violating the attorney's ethical obligation to maintain client confidentiality.
Rule 3.6(a) sets forth the general standard requiring the lawyer to "employ reasonable care and skill and apply the lawyer's best judgment in the performance of professional services." More specifically, Rule 3.6(h)(1) sets forth the lawyer's general obligations to maintain client confidentiality:
(1) Except as permitted by these rules, or when authorized in order to carry out the representation, or as required by law or by order of the court, a lawyer shall not, without informed consent, knowingly, disclose or use information (except information generally known) that:
i. Is protected by the attorney-client privilege in any jurisdiction relevant to the representation;
ii. Is information gained in the course of representation of a client or former client for which that client or former client has requested confidential treatment;
iii. Is information gained in the course of representation of the client or former client and the disclosure of which would be detrimental to a material interest of the client or former client; or
iv. Is information received from a prospective client, the disclosure of which would be detrimental to a material interest of that prospective client, when the information is provided under circumstances in which the prospective client has a reasonable expectation that the information will not be disclosed.
Rule 3.6(h)(2) addresses the lawyer's obligation to ensure that others working on the lawyer's behalf in the course of representation who are privy to confidential client information likewise maintain the client's confidences. The rule states: "A lawyer shall exercise reasonable care to prevent lawyers and non-lawyers employed or retained by or associated with the lawyer from improperly disclosing or using information protected by paragraph (1) of this subdivision."
The current question concerning these internet based services arises because transcription and backup services are now available at an attractive cost from companies using personnel working outside the lawyer's office and not subject to the lawyer's direct oversight. This situation leaves the lawyer with no direct control over individuals who have access to confidential client information.
As Rule 3.6(h)(2) makes clear and as we have opined previously, the primary responsibility for file integrity, maintenance, disposition, and confidentiality rests with the attorney employed by the client. See Maine Professional Ethics Commission Opinion # 74 (10/1/86). In this case, although the transcriptionists or technicians maintaining the computer backup files are not employed by the attorney, the directives of Rule 3.13(c) still govern because they also apply to non-lawyers "retained by or associated with a lawyer" and therefore require that an attorney "shall make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that the conduct of these individuals is compatible with the professional obligations of the lawyer."
Rule 3.6(h)(2) implies that lawyers have a responsibility to train, monitor, and discipline their non-lawyer staff in such a manner as to guard effectively against breaches of confidentiality. Failure to take reasonable steps to provide adequate training, to monitor performance, and to apply discipline for the purpose of enforcing adherence to ethical standards is grounds for concluding that the lawyer has violated Rule 3.6(h)(2). See Maine Professional Ethics Commission Opinion #134 (9/21/93). Clearly, when employing any outside contractor to perform law-related services, the lawyer does not directly train, monitor, and discipline the employees of the service provider; however, the lawyer retains the obligation to ensure that appropriate standards concerning client confidentiality are maintained by the contractor. The precise parameters of what constitutes "appropriate standards" are not defined in the rules or opinions, but are based on reasonable efforts to prevent the disclosure of confidential information.
With the pervasive and changing use of evolving technology in communication and other aspects of legal practice, particular safeguards which might constitute reasonable efforts in a specific context today may be outdated in a different context tomorrow. Therefore, rather than attempting to delineate acceptable and unacceptable practices, this opinion will outline guidance for the lawyer to consider in determining when professional obligations are satisfied.
At a minimum, the lawyer should take steps to ensure that the company providing transcription or confidential data storage has a legally enforceable obligation to maintain the confidentiality of the client data involved.[1] See ABA Ethics Opinion 95-398 (lawyer who allows computer maintenance company access to lawyer's files must ensure that company establishes reasonable procedures to protect confidentiality of information in files, and would be "well-advised" to secure company's written assurance of confidentiality); N.J. Sup. Comm. Prof. Ethics Opinion 701 ("Lawyers may maintain client files electronically with a third party as long as the third party has an enforceable obligation to preserve the security of those files and uses technology to guard against reasonably foreseeable hacking.") .
Footnotes
[1] Although the Privacy and Security Rules of the federal Health Insurance Portability and Accountability Act ("HIPAA"), 45 C.F.R. Part 164, requirements are generally not applicable to lawyers in their obligations to their clients, this law provides very detailed examples of standards intended to protect the confidentiality of patient health information that are now widely in use in the medical field. Under HIPAA, regulated entities that contract with others to provide services involving protected patient information are generally required to have "Business Associate Agreements" with prescribed provisions that detail the contractor's obligations to ensure the confidentiality of the patient information involved.
The contract between a covered entity and a business associate must provide that the business associate will:
(A) Implement administrative, physical, and technical safeguards that reasonably and appropriately protect the confidentiality, integrity, and availability of the electronic protected health information that it creates, receives, maintains, or transmits on behalf of the covered entity as required by this subpart;
(B) Ensure that any agent, including a subcontractor, to whom it provides such information agrees to implement reasonable and appropriate safeguards to protect it;
(C) Report to the covered entity any security incident of which it becomes aware;
(D) Authorize termination of the contract by the covered entity, if the covered entity determines that the business associate has violated a material term of the contract. 45 C.F.R. §164.314.
Similarly, the Security Rule, 45 C.F.R. §164.302-318, describes various administrative, physical, technical, and organizational security-related safeguards applicable to healthcare entities maintaining protected patient information electronically.
In some circumstances, such as with transcription, human involvement with confidential client information by the contractor's staff is inherent in the service. In that case, additional contractual obligations may be needed to ensure that the contractor's employees or agents who will have direct knowledge of the confidences are adequately trained and understand their personal obligation to maintain the information confidentially. In addition, the lawyer would be well-advised to include a contract provision requiring the contractor to inform the lawyer in the event the contractor becomes aware of any inappropriate use or disclosure of the confidential information. The lawyer can then take steps to mitigate the consequences and can determine whether the underlying arrangement can be continued safely.
Along with taking steps to ensure that the confidential information will be maintained securely by the company providing remote services, the lawyer should also take care to ensure that confidential information is conveyed to the service provider in a secure manner. While data encryption can provide appropriate levels of additional security for highly confidential data in transit in the internet, in some circumstances it may be reasonable to transmit information securely via email without encryption. See ABA Ethics Opinion 99-413 (lawyers may ethically communicate client confidences using unencrypted e-mail sent over Internet, but should discuss with their clients different ways of communicating client confidences that are "so highly sensitive that extraordinary measures to protect the transmission are warranted"); United States. v. Councilman, 418 F.3d 67 (1st Cir. 2005) (holding that unauthorized interception of email violated federal wiretapping law, thus providing support for a reasonable expectation of privacy in e-mail transmissions). The lawyer will need to evaluate carefully the level of confidentiality protection needed for different types of information transmitted via the internet.
Enduring Ethics Opinion
Enduring Ethics Opinion #194 [October 2012]
Opinion #193: Loans: Non-recourse litigation expense loans to an attorney
Issued by the Professional Ethics Commission
Date Issued: December 10, 2007
Question
Bar Counsel has requested an opinion on the ethics of an attorney participating in litigation expense funding for individual cases on a non-recourse loan basis that is offered by a number of litigation finance companies.
As an example, a Company offers wholly non-recourse loan advances to attorneys representing clients subject to a contingency fee arrangement. Under this arrangement, the Company will undertake the financial risk in a personal injury case by providing the attorney an advance on that case to cover litigation costs. If the case is unsuccessful, the attorney owes the Company nothing. If the case succeeds, either by way of settlement or judgment, the Company is entitled to be repaid its loan along with very substantial interest. The Company represents that it does not "share" in the attorney's legal fees. The Company may or may not require a lien on the attorney's fees in the case.
Opinion
In Opinion #191 we addressed ethical issues that attorneys must consider when asked to assist their clients in obtaining personal injury lawsuit loans. The question currently posed by Bar Counsel addresses personal injury lawsuit loans offered to attorneys rather than their clients. While these attorney loans may be offered as recourse as well as non-recourse, the current question relates only to non-recourse loans. Accordingly, this opinion is limited to loans in that context.
We conclude that an attorney may not enter into a non-recourse loan under the circumstances presented in Bar Counsel's question. Irrespective of how the finance company may characterize its agreement, the nature and structure of such an arrangement involves the sharing of legal fees with a non-lawyer. Repayment to the finance company is tied directly to the recovery of legal fees by the attorney in the particular case. The attorney must repay the finance company only if the attorney is successful and recovers a fee. Further, the interest charged upon repayment involves a premium based upon the risk incurred by the finance company in sharing in the prospects of success or failure of the particular litigation in which the company is thereby participating.
Maine Bar Rule 3.12(a) prohibits a lawyer from sharing legal fees with a non-lawyer except in limited circumstances not relevant here. The underlying rationale for the rule is that any fee sharing arrangement creates an unacceptable risk that the professional independence of the lawyer will be influenced by the non-lawyer who has an interest in the attorney's fee. We agree with Utah Bar Association Opinion 97-11 (1997), to the effect that payment on a non-recourse loan to finance litigation in a contingency fee case, where the lawyer is obligated to repay the loan only if a fee results in the case, constitutes sharing legal fees with a non-lawyer in violation of the rule.
Enduring Ethics Opinion
Opinion #192: Deceased Client: Confidential Information Requested by Personal Representative
Issued by the Professional Ethics Commission
Date Issued: June 20, 2007
Question
Bar Counsel has asked whether it is a violation of M. Bar R. 3.6(h) for an attorney to disclose confidential information of a deceased client ("Decedent") to the Decedent's court-appointed Personal Representative ("PR") in circumstances where the PR has requested the information, citing M. R. Evid. 502(c) as the source of authority for waiving the lawyer-client privilege on behalf of the Decedent.
Opinion
Like many questions that are presented to this Commission, Bar Counsel's question leads us to set forth a framework for guiding attorneys in their conduct, rather than to provide an unequivocal answer. The Maine Code of Professional Responsibility ("Code") sets forth the confidentiality obligations of an attorney to a client in M. Bar R.3.6(h):
- Except as permitted by these rules, or when authorized in order to carry out the representation, or as required by law or by order of the court, a lawyer shall not, without informed consent, knowingly disclose or use information (except information generally known) that:
(i) Is protected by the attorney-client privilege in any jurisdiction relevant to the representation;
(ii) Is information gained in the course of representation of a client or former client for which that client or former client has requested confidential treatment;
(iii) Is information gained in the course of representation of the client or former client and the disclosure of which would be detrimental to a material interest of the client or former client. . . .
The Rule recognizes that attorneys are obligated to refuse to disclose three categories of client information: (1) information that would be considered privileged under applicable rules of evidence; (2) information that may not be privileged but that the client has asked to be kept confidential; and (3) information that would be detrimental to the client if it were disclosed. Notwithstanding this broad prohibition, however, the Rule provides two safe harbors that allow attorneys to disclose information "when authorized to carry out the representation" or "as required by law or order of the court." Id.
The general privilege provided by M. R. Evid. 502(b) permits "[a] client . . . to refuse to disclose and to prevent any other person from disclosing confidential communications made for the purpose of facilitating the rendition of professional legal services to the client," provided that those communications are made between and among a select group of individuals, including "the client or the client's representative and the client's lawyer or the lawyer's representative." Me. R. Evid. 502(b).
For the purposes of the Rules of Evidence, "[t]he privilege may be claimed by the client, the client's guardian or conservator, the personal representative of a deceased client, or the successor, trustee, or similar representative of a corporation, association or other organization, whether or not in existence." M. R. Evid. 502(c). Recognizing that a client's attorney may be in the best position to assess the risks and benefits of claiming the privilege on the client's behalf and perhaps recognizing the ethical obligations imposed upon attorneys by the provisions of M. Bar R. 3.6(h) of the Maine Code of Professional Responsibility, the Rules of Evidence also provide that "[t]he person who was the lawyer or the lawyer's representative at the time of the communication is presumed to have authority to claim the privilege but only on behalf of the client." Id.
In the situation presented by the Question, the PR has decided not to "claim" the attorney-client privilege on behalf of the Decedent, but has instead decided to waive the privilege. In such a situation, we believe the attorney from whom the confidential information is sought may not rely exclusively upon the waiver by the PR, but must undertake an independent analysis pursuant to M. Bar R. 3.6(h) as to his or her own obligations with respect to the requested disclosure.
In many cases, the attorney's disclosure of information at the request of a PR will fall within the first safe harbor of M. Bar R. 3.6(h). For example, disclosure of information regarding a will's execution or a decedent's testamentary intent would ordinarily further the attorney's representation of the client. See In re Greene's Estate, 102 Me. 455, 460, 67 A. 317, 319 (1907) (holding that a PR may waive the attorney-client privilege on behalf of a decedent, because the PR is interested in the protection of the decedent's estate and "would consent to the waiver of the privileged communication only for the purpose of securing that end").
If, however, the attorney believes that the information sought to be disclosed would not further the client's purpose or would be detrimental to a material interest of the client, the attorney may waive the privilege only as required by law or by court order. Thus, despite a PR's waiver of the attorney-client privilege, the attorney may still be ethically obligated to claim the privilege on behalf of his former client if, for example, the information had been specifically sought to be kept unqualifiedly confidential by the client or if disclosure of the information would embarrass or otherwise be detrimental to a material interest of the client. See M. R. Evid. 502(c). The only safe harbor available to the attorney in that case would be a court order allowing disclosure of the information requested by the PR. See M. Bar R. 3.6(h)(1). Because the PR is the one seeking disclosure of the information, the PR will likely be the one seeking the court order compelling disclosure.
Enduring Ethics Opinion
Enduring Ethics Opinion #192 [October 2018]
Opinion #191: Loan from Litigation Financing Co. to Personal Injury Plaintiff
Issued by the Professional Ethics Commission
Date Issued: December 21, 2006
Question
Bar Counsel presents the following scenario involving litigation financing by a third-party lending company and asks the Commission to render an opinion on whether a lawyer would violate the Bar Rules by aiding a client in obtaining a personal injury lawsuit advance.
Financing Company A provides what it calls pre-settlement lawsuit funding whereby it lends money to plaintiffs while they pursue personal injury litigation. In its promotional materials, Company A states: ?You can get lawsuit funding on your personal injury claim NOW. Unlike a personal loan, you will not have to pay us back until your case settles.? It describes its loans as ?Non-Recourse Financial Assistance,? meaning that if ?you lose ? we lose;? i.e., ?if you lose your case you owe us absolutely nothing.?
Company A further explains in its materials that it ?will purchase a portion of your future settlement, providing you with cash today for any worthwhile purpose, including essential living expenses.? It discloses that it invests in the plaintiff?s lawsuit by ?literally buy[ing] a piece of the future settlement proceeds.?
The Company charges no application or closing fee, and represents that there are no hidden expenses. The plaintiff is not required to make any payments until the case is resolved. The Company states that there are no credit requirements and that it plays no part in the management of the case, explaining that ?[w]hat you decide to settle for is up to you and your attorney.? The Company?s fees are fixed, and it does not take a percentage of the plaintiff?s recovery.
In order to participate, the plaintiff must be represented by an attorney. The plaintiff must complete an application disclosing case information such as how the accident occurred, the personal injuries sustained, medical treatment rendered, any insurance that would cover the claim and attorney information. The plaintiff must also sign a release authorizing the Company to obtain records from the plaintiff?s attorney. The release form includes a clause to the effect that the plaintiff ?understand[s] the effects of disclosing the contents of my file, including waiver of the attorney-client and work product privileges.? The attorney must share with the Company her opinion on the merits of the case, and the Company periodically sends a follow-up questionnaire to the attorney to be filled out and returned.
The Company charges the plaintiff based on a monthly fee calculator with monthly financing rates ranging from 2.00% to 7.00%. As an example, in the case of a $1,000 advance, at 4.00% the fee would range from $120 if it took three months to resolve the case, to $1,200 if it took 30 months to resolve the case. The financing fees accrue each month and are paid at the end of the case only if there is a successful recovery. The Company does not compound fees, which it claims is contrary to the way some other companies charge.
Opinion
We understand that such advances are permitted in a number of other jurisdictions, but we are not aware whether any of these jurisdictions have a criminal champerty statute. For the Maine lawyer, the threshold question should be whether personal injury lawsuit advances are illegal because they violate Maine ?s criminal champerty statute, an issue on which we cannot opine.[1] Without an answer to this question, we cannot address whether it is per se unethical for a lawyer to assist in their creation. We caution, however, that the lawyer must be mindful of their potential criminality and the lawyer?s corresponding obligations under the Code of Professional Responsibility. See M. Bar R. 3.2(f)(2) (lawyer shall not engage in illegal conduct that adversely reflects on lawyer?s honesty, trustworthiness or fitness as lawyer); M. Bar R. 3.6(d) (lawyer shall not counsel or assist client in violation of any law, but lawyer may take steps in good faith to test validity of law). At a minimum, the lawyer must make an informed assessment of whether the proposed advance violates the statute and discuss the issue with the client. See M. Bar R. 3.6(a) (lawyer must employ reasonable care and skill and apply lawyer?s best judgment).
We also note that the scenario as posed leaves us many unanswered questions. For example, are the representations made in the advertisements borne out by the loan documents? What control, if any, does the financing company maintain over settlement decisions? Is the loan truly non-recourse, or is there any situation where the client might be obligated to repay a portion of the loan in the event of no recovery? Is the client?s obligation to repay capped by the amount of any settlement or verdict, or is it possible that the client could have a repayment obligation that exceeded that amount? Is the loan secured by the judgment, and if so, does that have a bearing on any issues? Additional questions arise if there are others to whom the plaintiff will be indebted and who expect to be paid out of a litigation recovery. For example, who gets paid first out of any settlement as between the financing company, lien holders (e.g., insurers and medical providers) and the attorney? What is the order of priority for payment? What amount is the client likely to net after case resolution and after the financing company and others have been paid? A final set of questions arise as we try to identify the nature of the relationship between the lawyer, client, and finance company. Is the finance company an agent of the client or the attorney with respect to the litigation? What duty of confidentiality does the financing company have and is its duty spelled out in the loan documents? Does the attorney take on any duties with respect to the financing company and, if so, what are they?
Irrespective of these unanswered questions, and while we cannot say that it is per se unethical for a lawyer to assist a client in obtaining personal injury lawsuit advances, we do find that the above scenario raises a number of potential ethical problems that should be of concern to the lawyer. The issues we identify are without limitation, meaning that any particular litigation scenario may present additional ethical concerns that are not evident from the facts presented here.
First, before assisting the client in a transaction like this, the lawyer must fulfill her obligation to provide the client with appropriate advice on whether the arrangement is in the client?s best interests. See M. Bar R. 3.6(a), supra. We express no view on whether personal injury advances in general are good or bad for clients. The wisdom, or lack thereof, of such an arrangement necessarily depends on the particular circumstances faced by the client. At a minimum, however, the client is sacrificing in interest payments a substantial portion of whatever final recovery may ultimately be received in the case. There may be other ways, such as letters of protection to medical providers or referral to a financial advisor, for the lawyer to assist the client in maintaining finances until a case is resolved. Whatever the circumstances and options, the lawyer must make sure that she fully explains the arrangement and the consequences to the client, and she must advise the client appropriately.
Second, the lawyer must guard against disclosure of client confidences or secrets without the client?s informed consent. See M. Bar R. 3.6(h). The scenario above involves a broad release to be signed by the client. The lawyer must make sure that the client understands the consequences of the release. The careful lawyer will keep the client timely informed on what she is sending to the lending company to ensure that she has the continuing informed consent of the client.
Third, the lawyer must assess and advise the client on the potential consequences of sending confidences and secrets to the financing company. Sending information to a third party may act as a waiver of the attorney-client work-product privileges, entitling the opposing side in the litigation access to the information. This risk requires the lawyer to take steps to avoid a waiver, if a waiver can be prevented at all. It also requires the lawyer to be careful about what she sends to the company, knowing that whatever is sent, including the lawyer?s evaluation of the case, may be discoverable to the other side no matter what steps are taken to avoid a waiver.
Fourth, the lawyer must guard against any risk that the financing company will attempt to control the litigation or otherwise interfere with the lawyer?s exercise of professional judgment. See M. Bar R. 3.6(a).
Fifth, the lawyer must be wary of conflicts of interest that may arise between the lawyer?s duty to the client and any obligation that the lawyer undertakes with respect to the finance company or between the lawyer and her client. See M. Bar. R. 3.4(e) and 3.4(f). For example, if the lawyer is obligated to describe to the finance company the likelihood of any recovery, the disclosure of any potential barriers to the client?s recovery might render the client a less likely candidate for a loan and might damage the client?s case if it becomes discoverable in litigation. Such a risk must be identified and the informed consent of the client must be obtained. As another example, if part of the reason the client is securing an advance is to pay litigation expenses that the lawyer will not advance, it may be necessary for the lawyer to advise the client that there may be other law firms willing to advance those expenses, which will alleviate the need for the loan.
As stated above, these are the more obvious issues posed by the limited facts of the scenario before us. There may be other ethical issues presented by any particular personal injury advance proposal, which we are unable to discern and address at this time.
Footnotes
[1] See 17-A M.R.S.A. § 516 (?A person is guilty of champerty, if with the intent to collect by a civil action a claim, account, note or other demand due, or to become due to another person, he gives or promises anything of value to such person.?) We cannot opine on this question because our jurisdiction extends only to interpreting the Code of Professional Responsibility. See M. Bar R. 11(c); see also Maine Professional Ethics Opinion #11, April 2, 1980.
Enduring Ethics Opinion
Opinion #190: Pro Bono Representation Issues: Change of Fee and Use of Confidential Information
Issued by the Professional Ethics Commission
Date Issued: May 3, 2006
Questions
Bar Counsel has asked the Commission the following questions:
When an attorney has made an agreement with a legal services organization serving the indigent to provide pro bono representation to a client referred to that attorney by that legal services organization, is it a violation of Maine Bar Rule 3.2(f)(3), 3.3(a) or any other Bar Rule for the attorney to make a separate fee agreement with the client that contravenes to the detriment of the client the terms to which the attorney agreed with the legal services agency?
Would the answer to the first question change if the attorney does not make any explicit fee agreement with the client but simply sends the client a bill for services during or after the representation that exceeds that to which the attorney agreed with the legal services organization?
When client and case information are disclosed by a legal services organization serving the indigent to an attorney for purposes of inquiring whether the attorney will agree to provide the client with pro bono representation, is it a violation of Maine Bar Rule 3.6(h) or any other Bar Rule for the attorney to use this information for a purpose detrimental to the client, such as in either later inducing the client to hire the attorney for a fee or in advocating for another client whose interests are adverse to those of the client referred by the legal services organization?
Opinion
The Commission finds the answers to these questions clear both in the context of any reasonable understanding of the broad ethical duties of attorneys as well as in the context of specific Bar Rules. This Opinion will directly examine the latter.
Alteration of Agreed Upon Fee to the Detriment of the Client
As to the first two questions, we believe that an attorney who violates an agreement undertaken for the benefit of the client in the manner indicated would be charging an excessive fee, in violation of Bar Rule 3.3(a), which states, in part: ?A fee is excessive when, after review of the facts, a lawyer of ordinary prudence would be left with the definite and firm conviction that the fee is in excess of a reasonable fee.? In the view of this Commission, a fee in excess of that to which the attorney agreed for the benefit of an indigent client is per se unreasonable and therefore in violation of this stated general principle of the Rule. Moreover, two of the specific factors to be considered under the Rule in determining the reasonableness of a fee are undermined by charging such a fee. The attorney has set a fee which is inconsistent with the nature of the professional relationship with the client, see Rule 3.3(a)(6), and the fee charged is in excess of that which was fixed, see Rule 3.3(a)(8).
If the financial circumstances of the client change or do not reflect those of indigence or financial need as the legal services organization referring the client had understood, then, if the attorney wishes to charge a fee, the attorney?s obligation is to so inform the legal services organization and obtain a change in its agreement before approaching the client about a different fee arrangement.[1]
If the attorney has not obtained a change in his/her agreement with the legal services organization before approaching the client about a different fee agreement, that attorney has misused a fiduciary position of trust with the client. An attorney who has agreed with a legal services organization, which is acting on behalf of the indigent client, to take a case pro bono or at a reduced fee, and then extracts a greater fee from the client, without telling the client about the lawyer?s prior commitment to charge a lesser fee or no fee at all, violates Bar Rule 3.2(f) (3). Through such silence, the attorney has essentially engaged in fraud. See Glynn v. Atlantic Seaboard Corp., 1999 ME 53 at ¶ 12, 728 A.2d 117, 120 (where fiduciary relationship exists between parties, omission by silence may constitute supplying of false information).
In sum, there are no facts conceivable to this Commission, in the absence of the legal services organization?s prior express consent, by which an attorney could agree to charge no fee for legal services and then ethically charge the client a fee. In this response, the Commission finds no distinction between the first and second questions.
Use of Confidential Information
Under the circumstances set forth in the third question, the Commission is of the opinion that the attorney would be in violation at least of Bar Rule 3.6(h)(1)(iv), which prohibits, except in circumstances not present here, knowing disclosure or use of information that is received from a prospective client, the disclosure of which would be detrimental to a material interest of the client, when the information is provided under circumstances in which the prospective client has a reasonable expectation that the information will not be disclosed. For purposes of this analysis, there is no difference between information received from the legal services organization on behalf of the client and information received directly from the client.
Footnotes
[1] The legal services organization?s materials that the Commission was provided document the client?s consent for the attorney to release such financial information to the organization.
Enduring Ethics Opinion
Opinion #189: Unauthorized Practice of Law in Maine by Admittees of Foreign Jurisdiction
Issued by the Professional Ethics Commission
Date Issued: November 15, 2005
Question
The Professional Ethics Commission has been asked by Bar Counsel for an opinion concerning whether two scenarios violate Maine Bar Rule 3.2(a) prohibiting the unauthorized practice of law.[1]
Scenario One:
Attorney A is admitted in State X. A seeks admission to the Maine bar. A described himself on his most recent application for admission to the Maine bar as "President and General Counsel of the A Group." A has a website for the "A Group" that describes it as follows: "The A Group is a Maine based boutique litigation law firm" with offices in several states in the northeast region. Over 20 different practice areas are listed as the firm's areas of concentration. These are not limited to federal practice areas. The website provides a primary address for the A Group in Maine and its only telephone number is a Maine number. The website contains an identifiable picture of a Maine coastal scene. The website also contains a brief personal description of A in which A explains that after practicing elsewhere, he returned to reside with his family in his home state of Maine. A describes his educational and employment background, states that he is admitted in State X, and describes himself as a member of the state bar associations in Maine and State X. His description is silent about his bar admission status in Maine. Only one other attorney is described as being a member of the firm, in an "of counsel" role. That other attorney is described as being admitted in two northeastern states? jurisdictions. There is nothing on the website that in any way suggests that the other attorney is admitted in Maine.
Scenario Two:
Attorney B is admitted to practice law only in State Z. For the last five years, B has resided in Maine and been an equity member of a law firm organized as a Maine LLC, having law offices in two locations in Maine. There are a total of 20 individuals whose names appear on the law firm letterhead, some equity, some non-equity members. Beside B's name on that firm letterhead, there appears a reference and a note that B is admitted only in State Z.
B provides legal services to clients of the firm for an hourly fee. B also performs managerial and administrative duties at the firm, including supervision of lawyer associates and non-lawyer employees. B himself, an equity member, is not subject to any other lawyer's supervision.
B's law practice is limited to legal services concerning international and domestic energy and utility law. B typically has only one or two large corporate clients. B is considering an offer from a multi-national company incorporated in Maine with subsidiaries in several locations in the United States and Canada to serve as "Outside General Counsel and Chief Legal Officer." B has disclosed to that company that he is licensed only in State Z and has further explained that consequently there are limitations upon the representation he can offer in Maine and other jurisdictions. B has informed the company that it will be necessary to employ licensed attorneys in Maine and other jurisdictions to complement his services when the company requires legal advice about the laws of these jurisdictions. The company has consented to the limitations of the engagement as outlined in writing by B to the company. B perceives the company as a sophisticated consumer of legal services that has the wherewithal to obtain independent review of the proposed engagement by other counsel. B does not believe that the proposed engagement could cause harm to the client, the legal profession, or any member of the public.
Discussion
First, we note that the Maine Bar Rules govern any attorney who practices law in Maine, regardless of whether that attorney is admitted to practice law in Maine. Rule 1(a) states:
These rules govern the practice of law by attorneys within this State and the conduct of attorneys with respect to their professional activities and as officers of the Court. Any attorney admitted to, or engaging in, the practice of law in this State shall be subject to the Court?s supervision and disciplinary jurisdiction and the provisions of these rules, including Maine Bar Rule 1(b). (Emphasis added.)
Maine Bar Rule 1(b) is the ?Choice of Law? provision of the Bar Rules, which deals specifically with conduct before a tribunal and other conduct where the lawyer is licensed to practice either only in Maine or in both Maine and another jurisdiction. The two fact situations that have been presented for consideration by Bar Counsel do not fit into either of these choice of law categories because they involve ?other conduct? of attorneys who are not admitted to practice in Maine. By default, however, Maine ?s Code of Professional Responsibility governs the conduct of these two attorneys to the extent that they are practicing law in Maine. If they are practicing law in Maine without the authority to do so, they are in violation of Maine Bar Rule 3.2(a).
Second, Rule 3.2(a) does not actually delineate the parameters of the unauthorized practice of law. It merely states that ?[a] lawyer shall not practice law in a jurisdiction where to do so would be in violation of law or court rule.? In construing Rule 3.2(a), we must opine on what it means to ?practice law in a jurisdiction where to do so would be in violation of law or court rule.? In other words, we must resolve the parameters of permissible multijurisdictional practice and impermissible unauthorized practice of law.
Neither of the two scenarios leaves any doubt as to whether the attorney involved is engaged in the practice of law.[2] The statute which renders the unauthorized practice of law a Class E crime, 4 M.R.S.A. §807,[3] prohibits persons who are not admitted in Maine from either practicing law or professing to practice law within the State and therefore potentially reaches both Attorneys A and B regardless of whether they actually obtained any clients within the State. The Law Court, in interpreting this statute, has made it clear that the term ?unauthorized practice of law? applies even to persons who merely hold themselves out to practice law, regardless of whether they actively have a client. See Board of Overseers of the Bar v. MacKerron, 581 A.2d 424, 425 ( Me. 1990) (use of attorney letterhead is sufficient to establish unauthorized practice of law).
Likewise, neither scenario leaves any doubt about whether the attorney is practicing law ?in [the] jurisdiction? of Maine. Given the extra-jurisdictional effects of modern legal practice, this concept can be viewed in a number of different ways. Questions can arise whether presence through the Internet, association with referral attorneys and other scenarios constitute practice in Maine. We need not grapple with issues created by these kinds of situations, however, because the two scenarios before us involve relatively clear circumstances where the attorneys have, or at a minimum suggest they have, a physical presence in Maine rendering legal services in Maine to Maine clients.
In assessing what it means to practice law in a jurisdiction, particularly without being admitted in that jurisdiction, we find the ABA Model Rules of Professional Conduct, specifically Rule 5.5, and the Restatement (Third) of the Law Governing Lawyers § 3, to be helpful. These sources aid us in identifying some of the critical factors relevant to determining whether a lawyer is practicing law in a particular jurisdiction in an unauthorized way. The factors we discern as important include:
Whether the attorney has established an office in the jurisdiction;
Whether the attorney has established some other systematic and continuous presence in the jurisdiction;
Whether the attorney holds out to the public or otherwise represents that the attorney is admitted to practice law in the jurisdiction;
Whether the attorney is providing legal services in the jurisdiction on more than a temporary basis in connection with some matter or proceeding for which the attorney is properly admitted to practice either by another jurisdiction or a tribunal; and
Whether the attorney is providing services that fall within some exception to the usual unauthorized practice of law rules, such as the ?federal practice? exception.
Indeed, we find that ABA Model Rule 5.5, as a whole, quite accurately reflects historical and widely accepted notions of the limits of multijurisdictional practice and the parameters of the unauthorized practice of law.[4]
Utilizing these factors, we conclude that the mere fact that an attorney, not admitted in Maine, is working in Maine does not automatically mean that the attorney is engaged in the unauthorized practice of law. For example, an out-of-state lawyer who has a vacation home in Maine might bring work to Maine to complete while on vacation. Where the lawyer?s practice is located in another state and where the lawyer is working on office matters from afar, we would conclude that the lawyer is not engaged in the unauthorized practice of law. We would reach the same conclusion with respect to a lawyer who lived in Maine and worked out of his or her home for the benefit of a law firm and clients located in some other jurisdiction. In neither case has the lawyer established a professional office in Maine, established some other systematic and continuous presence in Maine, held himself or herself out to the public as admitted in Maine, or even provided legal services in Maine where the lawyer is working for the benefit of a non-Maine client on a matter focused in a jurisdiction other than Maine. As another example, an out-of-state lawyer who is a member of a law firm with offices in a number of states, including Maine , may occasionally work in the Maine office providing legal services to Maine clients in association with other lawyers in the firm who are admitted to practice in Maine. When this is done on a temporary basis, we would conclude that the lawyer is not engaged in the unauthorized practice of law.[5]
Opinion
We now turn to the two scenarios posed by Bar Counsel.
Scenario One
We find this scenario relatively easy to assess. In analyzing this situation, that of Attorney A licensed only in State X, we evaluate A?s practice in light of the factors outlined above. First, A?s office is located in Maine (?a Maine based boutique litigation law firm?) with a primary mailing address in Maine and a telephone number in Maine . Second, A through his website has clearly established a systematic and continuous presence in Maine. Third, A holds himself out as being willing and available to provide legal services in his ?home state of Maine,? which taken together with his reference to being a member of the Maine State Bar Association, suggests that he is admitted to practice in Maine.[6]
These factors, in and of themselves, make it clear to us that Attorney A is engaged in the unauthorized practice of law in Maine, by at least professing to practice law within Maine without having been admitted to the Maine Bar.[7] Attorney A?s conduct therefore violates Maine Bar Rule 3.2(a).
Scenario Two
The second fact scenario requires greater analysis. As presented by Bar Counsel, the facts involve a partner in a Maine-based firm who limits his practice to international and national regulatory work. This potentially brings into question the application of the ?federal law? exception to unauthorized practice.
Once again using the factors identified above, we first note that Attorney B?s law office is physically located in Maine and apparently nowhere else. Accordingly, he has established an office in Maine, indeed only in Maine, and his law firm likewise has an office only in Maine. Second, B has clearly established a systematic and continuous presence in Maine. He appears to practice in Maine full time, he is an equity member of a Maine law firm, and he appears to use his locus in Maine to appeal to potential clients. Third, concerning whether Attorney B holds himself out to the public or otherwise represents that he is admitted to practice law in Maine , the firm letterhead states that he is only admitted in State Z. Accordingly, B does not appear to hold himself out to the public as admitted in Maine.[8] Fourth, it appears likely that B is performing legal services in Maine for Maine clients on a regular rather than a temporary basis, although we recognize the possibility that a majority of his legal services may be performed in connection with a licensing issue or some other process in one or more other jurisdictions.
In our view, the third factor produces little weight against the force of factors one, two and four.[9] Lawyer B has established an office and a systematic and continuous presence in Maine through which he provides legal services. Even though his practice is apparently self-limited to legal services concerning ?international and domestic energy and utility law,? he does so from a law firm having an office only in Maine. There does not appear to be any restriction against his working for Maine clients. The scenario states specifically that he provides ?legal services to clients of the firm? and also indicates that he is considering an offer from a multi-national company incorporated in Maine. This suggests that Lawyer B is promoting his ongoing presence in Maine.
Giving due consideration to these four factors, it is our opinion that Attorney B is clearly practicing law in Maine without being admitted in Maine, and that this is not negated by the fact that the firm letterhead states he is only admitted in State Z. In order to resolve whether B is engaged in the unauthorized practice of law, however, we must also consider factor 5 and the ?federal practice? exception on which we assume B relies.
B?s practice arrangement appears to presume that a lawyer, not licensed in Maine , may practice law in Maine so long as that lawyer?s practice is limited to international, federal or multi-state issues. We believe such a presumption, taken alone, goes too far. We receive guidance, once again, from the Restatement and the ABA Model Rules. The Restatement recognizes an explicit exception to the unauthorized practice rule where the lawyer provides legal services ?before a tribunal or administrative agency of another jurisdiction or the federal government in compliance with requirements for temporary or regular admission to practice before that tribunal or agency.? The Model Rules permit ?services that the lawyer is authorized to provide by federal law . . . .? ABA Model Rule 5.5(d)(2). Accordingly, the otherwise unauthorized practice is permissible if it occurs ?before? a tribunal or agency in compliance with its rules or if authorized by federal law. Comment 18 to Model Rule 5.5 makes it clear, however, that such authorization to practice will usually be derived from statute, court rule, regulation or judicial precedent.
We do not have sufficient facts to determine whether B?s practice is limited to matters before federal or international tribunals or whether his authorization to practice is otherwise derived from any statute, court rule, regulation or judicial precedent. Accordingly, we cannot opine whether his practice squarely falls within any ?federal law? exception to the unauthorized practice. We have concerns, however, as to whether B is appropriately limiting his practice, i.e., whether he is in a position where his legal services occasionally drift into other areas. We add that we do not believe Lawyer B insulates himself from unauthorized practice concerns by employing ?licensed attorneys in Maine and other jurisdictions to complement his services when [his clients] require legal advice about the laws of other jurisdictions.? The real question is whether despite this, B?s practice extends outside the strict boundaries of any ?federal law? exception to unauthorized practice. If so, then B is engaging in the unauthorized practice of law and is in violation of Maine Bar Rule 3.2(a)(1). Moreover, any lawyers who aid B in this regard stand in violation of Maine Bar Rule 3.2(a)(2).
Regarding B?s engaging, as a client, the multi-national corporation incorporated in Maine., the same factors and analysis stated above apply. We see no discernable difference between B?s current practice and B?s taking on representation of the multi-national corporation as outside general counsel.[10]
Footnotes
[1] M. Bar R. 3.2(a)(1) states that ?[a] lawyer shall not practice law in a jurisdiction where to do so would be in violation of law or court rule. M. Bar R. 3.2(a)(2) prohibits a lawyer from aiding any person, association or corporation in the unauthorized practice of law.
[2] The Law Court has had occasion to define the practice of law in Board of Overseers of the Bar v. Mangan, 2001 ME 7, ¶¶ 13-14, 763 A.2d 1189, 1193 (2001), where it stated:
The term "practice of law" is a "'term of art connoting much more than merely working with legally-related matters.?" Attorney Grievance Commission of Maryland v. Shaw, 354 Md. 636, 732 A.2d 876, 882 (1999) (quoting In re Application of Mark W., 303 Md. 1, 491 A.2d 576, 585 (1985)). "The focus of the inquiry is, in fact, 'whether the activity in question required legal knowledge and skill in order to apply legal principles and precedent.'" Id. (quoting In re Discipio, 163 Ill.2d 515, 206 Ill. Dec. 654, 645 N.E.2d 906, 910 (1994)). Even where "'trial work is not involved but the preparation of legal documents, their interpretation, the giving of legal advice, or the application of legal principles to problems of any complexity, is involved, these activities are still the practice of law.'" Shaw, 732 A.2d at 883 (quoting Lukas v. Bar Ass'n of Montgomery County, 35 Md. App. 442, 448, 371 A.2d 669, 673, cert. denied, 280 Md. 733 (1977)).
In Shaw, 354 Md. 636, 732 A.2d 876, 882 (1999), the court noted that the practice of law includes "'utilizing legal education, training, and experience [to apply] the special analysis of the profession to a client's problem.'" (quoting Kennedy v. Bar Ass'n of Montgomery County, Inc., 316 Md. 646, 662, 561 A.2d 200, 208 (1989)). The Shaw court further noted that "the Hallmark of the practicing lawyer is responsibility to clients regarding their affairs, whether as advisor, advocate, negotiator, as intermediary between clients, or as evaluator by examining a client's legal affairs." Shaw, 732 A.2d at 883 (quoting In re Application of R.G.S., 312 Md. 626, 632, 541 A.2d 977, 980 (1988)).
[3] 4 M.R.S.A. § 807 states in subsection 1: ?No person may practice law or profess to practice law within the State or before its courts, or demand or receive any remuneration for those services rendered in this State, unless that person has been admitted to the bar of this State and has complied with section 806-A, or unless that person has been admitted to try cases in the courts of this State under section 802.
[4] Model Rule 5.5, in its entirety, states:
RULE 5.5: UNAUTHORIZED PRACTICE OF LAW; MULTIJURISDICTIONAL PRACTICE OF LAW
(a) A lawyer shall not practice law in a jurisdiction in violation of the regulation of the legal profession in that jurisdiction, or assist another in doing so.
(b) A lawyer who is not admitted to practice in this jurisdiction shall not:
(1) except as authorized by these Rules or other law, establish an office or other systematic and continuous presence in this jurisdiction for the practice of law; or
(2) hold out to the public or otherwise represent that the lawyer is admitted to practice law in this jurisdiction.
(c) A lawyer admitted in another United States jurisdiction, and not disbarred or suspended from practice in any jurisdiction, may provide legal services on a temporary basis in this jurisdiction that:
(1) are undertaken in association with a lawyer who is admitted to practice in this jurisdiction and who actively participates in the matter;
(2) are in or reasonably related to a pending or potential proceeding before a tribunal in this or another jurisdiction, if the lawyer, or a person the lawyer is assisting, is authorized by law or order to appear in such proceeding or reasonably expects to be so authorized;
(3) are in or reasonably related to a pending or potential arbitration, mediation, or other alternative dispute resolution proceeding in this or another jurisdiction, if the services arise out of or are reasonably related to the lawyer's practice in a jurisdiction in which the lawyer is admitted to practice and are not services for which the forum requires pro hac vice admission; or
(4) are not within paragraphs (c)(2) or (c)(3) and arise out of or are reasonably related to the lawyer's practice in a jurisdiction in which the lawyer is admitted to practice.
(d) A lawyer admitted in another United States jurisdiction, and not disbarred or suspended from practice in any jurisdiction, may provide legal services in this jurisdiction that:
(1) are provided to the lawyer's employer or its organizational affiliates and are not services for which the forum requires pro hac vice admission; or
(2) are services that the lawyer is authorized to provide by federal law or other law of this jurisdiction.
[5] We do not opine at this time on other possible situations involving law firms with offices in several jurisdictions, including Maine, such as the lawyer who, while not admitted in Maine, has a more continuous presence in Maine. A resolution of the issues presented by the multitude of other practice situations that one might envision is not necessary for our opinion on the two scenarios presented by Bar Counsel.
[6] We also have concern about Attorney A?s potential violation of Rule 3.9 relating to false, misleading or deceptive advertising. As stated above, the statements by Attorney A about his connection with Maine, particularly his self-description as a member of the State Bar Association in Maine, leave the impression that he is licensed to practice in Maine. Although lawyers not licensed in Maine may become members of the Maine State Bar Association, this fact is neither well known to the public nor made clear by A on his website. Our conclusion is that this advertising contains material misrepresentations of fact as well as omissions of material facts that are necessary to make his statements, in the light of all of the circumstances, not misleading.
[7] Attorney A?s superfluous reference to having a second lawyer in an ?of counsel? relationship with his firm, which lawyer is admitted in two northeastern states? jurisdictions, neither of which appears to be Maine, is without consequence to our opinion.
[8] We render no opinion at this time on whether this reference, ?admitted only in State Z,? adequately comports with Maine Bar Rule 3.9(e), which states:
A multi-jurisdictional partnership shall disclose, in all public communications containing the names of affiliated lawyers, jurisdictional limitations of those lawyers not licensed to practice in the jurisdiction in which the communication is published.
The obvious issue is whether this adequately discloses to the average consumer of legal services the jurisdictional limitations on Attorney B, particularly where B maintains a systematic and continuous presence in Maine.
[9] We add that factors one, two and four are very significant when one considers the purposes of local licensure. Besides testing for competence in substantive Maine law, local licensure fulfills at least two other purposes: to insure that the applicant meets minimal standards of character and fitness and to provide the Board of Overseers of the Bar with unfettered oversight over those practicing law within the State. The ultimate goal is the protection of the public, the courts, the legal system and the profession. This cannot be accomplished when an attorney has an office or other ?systematic and continuous? presence in the state and may be altogether unknown to the authority charged with these protective duties.
[10] We differentiate Attorney B?s prospective employment as ?outside general counsel? from employment of a lawyer as in-house counsel. The case of the in-house lawyer involves considerations that are of no consequence to Attorney B as an outside counsel.
Enduring Ethics Opinion
Opinion #1. Police Legal Advisor
Issued by the Professional Ethics Commission
Date Issued: June 6, 1979
Question
The Grievance Commission has been advised that in one of the larger cities, it is proposed that the position of Police Legal Advisor (P.L.A.) be transferred to the office of the City Corporation Counsel. Heretofore, the P.L.A. has been a staff position in the Police Department operating under the supervision of the Chief of Police. We are told that the P.L.A. has ?confidential relations? with individual police officers in the course of advising them on matters of criminal law and procedure. When individual officers are charged with misconduct, they are prosecuted by the Corporation Counsel?s office and defended by private counsel of their own choosing.
On the basis of the foregoing, the Commission has been asked whether the relocation of the P.L.A. to the Corporation Counsel?s office would create conflict of interest problems. The Commission has also been asked whether a conflict of interest would be created by the possibility that the police might at some future date initiate an investigation of one of the members of the City Council since the P.L.A., although part of the Corporation Counsel?s staff, might be privy to details of the investigation.
Opinion
In the opinion of the Commission, no ethical problems will arise from the proposed transfer of the P.L.A. to the Corporation Counsel?s office which would warrant delaying the merger. Although the P.L.A. indicates that he has had ?confidential relations? with individual police officers in the past, we do not perceive why this would necessarily result from performance of his duties. Despite the fact that the P.L.A. may have developed personal relationships with individual police officers, his client has in actuality been the city. This will not be changed by his affiliation with the Corporation Counsel. If he has permitted his duty of loyalty to the city to become blurred by personal contacts with individual police officers in the past, this aspect of his role should not be continued. Police officers who approach him with personal problems the resolution of which might conflict with the interests of the city should be referred to private counsel of their own choosing. Indeed, the P.L.A. must be careful to avoid communications with individual police officers which would in any way compromise his duty of loyalty to his real client‑the city itself.
We also fail to see in the possibility of a police investigation of a city councillor a potential conflict of interest which would justify keeping the offices of the P.L.A. and Corporation Counsel separate. In such a case, the investigating attorney?s client is the city and not the individual councillor. If there is an ethical problem about investigating one who determines the level of your salary, it would not be peculiar to the P.L.A. and would, indeed, be shared by the Corporation Counsel himself. If the circumstances warranted, a special prosecutor could be appointed to undertake the investigation. There is, in any event, no more reason that the P.L.A. should resist affiliation with the Corporation Counsel because of this remote contingency than that the Corporation Counsel should also be required to resign in order to avoid the possibility that he might someday be required to conduct such an investigation of a City Council member.
Enduring Ethics Opinion
Opinion #2. Litigation Against Former Client
Issued by the Professional Ethics Commission
Date Issued: October 17, 1979
Preliminary Statement
The controversy discussed herein was originally brought to the Legal Ethics Committee of the Maine Bar Association for an advisory opinion. In light of the promulgation of the Maine Bar Rules, as amended by the Supreme Judicial Court effective May 15, 1979, it was the feeling of that Committee that such an advisory opinion issued at this time would be of minimal force and effect, given the changes in the Code of Responsibility (Rule 3) adopted by the Court and the jurisdiction of the Grievance Commission created by Rule 7, extending to both advisory and disciplinary functions. This matter is, therefore, being considered as an advisory opinion by the Grievance Commission.
An important observation should be made respecting the standards to be applied by this Commission in evaluating lawyer conduct. Rule 3 appears to this Commission to establish, in a manner similar to the Disciplinary Rules under the previously existing Maine Bar Association Code of Responsibility, minimal standards of conduct, violation of which calls for disciplinary action. The former Code also contained "Ethical Considerations" which provided guidelines for higher aspirations of the Bar for the conduct of attorneys. While these Ethical Considerations were not formally adopted as part of Rule 3, we will continue to view them, along with Ethics Committee opinions and other materials based on former canons of ethics, as aids to construction and interpretation of the present Code as set forth in Rule 3.
Facts
Lawyer A represented a client in 1958 in connection with the acquisition of certain real estate which is the subject of present litigation. In 1970 ‐ 71, Lawyer A again was called upon by the client to provide legal services in connection with the development and licensing of this property as a trailer park. The client claims that a central issue in seeking approvals of various agencies for the trailer park operation was a challenge to the adequacy of the septic system and that various contacts were made by Lawyer A with State Agencies, consultants, and the client with respect to the septic system problems. Lawyer A and his firm furnished materials to the Committee which negate any substantive knowledge or effort on the part of Lawyer A with respect to the septic system; these materials tend to show the legal services being limited to procedural assistance and zoning advice. The representation terminated prior to the approval of the trailer park because of a dispute over legal fees.
In November 1978, three tenants of the now functioning trailer park brought suit against Lawyer A's former client, alleging entitlement to compensatory and punitive damages under a theory of unfair trade practices based upon malfunctioning of Defendants sewage disposal system. All tenants are represented by Lawyer As law firm. The former client objects to this new representation, claiming that knowledge derived from Lawyer As prior representation on a confidential basis now is being used against him in connection with the pending suits. He requests this committees opinion as to the propriety of Lawyer As present representation of the Plaintiff tenants. Lawyer As firm resists withdrawal from its present representation asserting that the present malfunctioning of the sewage system is unrelated to the scope of representation provided to the client during the licensing and approval proceedings, and that nothing disclosed at that time has any bearing on the instant suit.
Discussion
While it is clear that ethical considerations normally preclude a lawyer from suing an existing client on behalf of another, it is likewise clear that the mere existence of a now‑terminated prior attorney‑client relationship does not disable an attorney from representing interests generally antagonistic to the former client. Any such disability must stem, if at all, from the duty of a lawyer to preserve the confidences and secrets of a client, even though the relationship has terminated; and the risk of apparent or actual disclosure of confidences increases as the degree of identity of subject matter in the two representations increases.
The obligation of a lawyer to preserve the confidences of his client continues after the termination of his employment. See Reporters Note to Rule 3.6(1). Under the facts presented here, there is no exemption from the mandate of Rule 3.6(1)(i) which prohibits a lawyer from knowingly revealing a confidence or secret of the client or from using the same to his clients disadvantage.
If the subject matter of the present suits in fact encompasses the subject matter of the former employment, or if confidential information derived from the former employment may be involved in the new representation, neither Lawyer A nor his firm may represent these Plaintiffs without the former clients written consent. Rule 3.4(e) and (k). On the other hand, if there is no identity of subject matter and no possibility of use of confidential information, then no impediment exists to Lawyer As firm continuing the new representation. There is no way for this Commission to determine whether or not confidences are now being used against the former client, or may be used against the former client, or whether there is an identity of subject matter in the two representations. In the context of an advisory opinion, this Commission cannot resolve issues of disputed fact; were the issue presented as a grievance, factual issues would be determined after hearing.
This inability to resolve a factual dispute, while rendering impossible any present judgment as to violation of the minimal standard of conduct set forth in Rule 3, does not end our consideration, however. We think it important to refer to the fabric from which our present Code was derived, particularly since the present facts raise the unfortunate (though recognized‑see Maine Bar Rule 3.6(1)(3)) circumstance that in order to prove or disprove the applicability of Rule 3.4(e), it may become necessary to invade the very confidentiality of the prior clients disclosures that the Rules are designed to protect.
A review of pertinent authorities persuades us that it would be the better practice for Lawyer As firm to withdraw from the present representation. Ethical considerations, as well as Rule 3.4(e), suggest avoidance of representation where there may be a possible violation of confidence. ABA Informal Opinion, No. 85. See also Rule 3.4(e). Cf, ABA Opinion 165 (1936):
An attorney must not accept professional employment against a client or a former client which will, or even may, require him to use confidential information obtained by the attorney in the course of his professional relations with such client regarding the subject matter of the employment . . .
Moreover, representations which raise an appearance of a conflict of interest should be avoided:
The matter is not to be determined by such facts as that the original services were rendered on the employment of a lawyer, or that the services may have had no particular bearing upon the phases of the litigation contemplated to be conducted on behalf of the new employer, or that it is probable that no information was required in the first employment that might prove useful in the subsequent employment. Irrespective of any actual detriment, the first client might naturally feel that he in some way had been wronged, when confronted by a final decree obtained by a lawyer employed in his behalf in the earlier part of the same litigation. To maintain confidence in the Bar, it is necessary not only to avoid actual wrongdoing, but an appearance of the wrongdoing. Drinker (Legal Ethics) Page 115, Quoting New York County Bar Opinion 202. Cf., Canon 9.
We would note that Rule 3.5(c)(7) authorizes withdrawal from a case where continued employment is likely to result in violation of the rules. If it is 'likely' that the identity of the subject matter or the risk of use of confidential information proscribed by Rule 3.4(e) would be found to exist, then Rule 3.5(c)(7) would permit Lawyer A to resign his present representation in the face of objection by his former client.
The Commission would also cite Rule 3.2(f)(4) as bearing on this problem. That Rule prohibits a lawyer from engaging in conduct that is prejudicial to the administration of justice. For Lawyer A or his firm to continue the present representation of the plaintiffs may well prejudice the administration of justice in two respects:
By fostering the erosion of public confidence in the confidentiality of lawyer communications, as discussed above, and
By risking the necessity to withdraw, after further proceedings and in the light of deeper involvement in the case, thus placing greater burdens upon substitute counsel and the client.
Thus, while we cannot say, without resolution of disputed fact issues, that the conduct of Lawyer A and his firm falls below the standard enunciated in Rule 3, we do feel that the spirit of the ethical considerations which have long guided our legal profession strongly suggest that withdrawal is the most appropriate course for Lawyer As firm to take.
Enduring Ethics Opinion
Enduring Ethics Opinion #2 [December 2010]
Opinion #3. Conflicts Between Related Lawyers
Issued by the Professional Ethics Commission
Date Issued: October 17, 1979
Facts
The Commission has received a request, initially addressed several months ago to the Legal Ethics Committee of the Maine Bar Association, for an advisory opinion regarding conflicts of interest between related lawyers. The request deals with three hypothetical situations:
Lawyer A versus Lawyer B, where two related lawyers are involved on opposite sides of a matter.
Lawyer A versus Lawyer B?s firm, where only one of the related lawyers is actually involved in the matter, but the opposing party is represented by the other lawyer?s firm, although that other lawyer has no involvement in the case.
Lawyer A?s firm versus Lawyer B?s firm, where the two firms are on opposite sides of a matter but neither of the related lawyers is involved.
The question posed is what are the ethical obligations of Lawyer A and Lawyer B, and their respective firms, in these three hypothetical situations, where Lawyer A and Lawyer B are related to each other as spouses, unmarried living partners, fiancees, siblings, parent and child, or in-laws.
Opinion
Rules 3.4(a), 3.4(f) and 3.4(b) of the new Maine Bar Rules set forth the minimum standards of ethical conduct required in these situations:
Applicability of Rule 3.4(a). Rule 3.4(a) provides:
(a) Disclosure of Interest. Before accepting any professional employment a lawyer shall disclose to the prospective client his relationship, if any, with the adverse party; his interest, if any, in the subject matter of the employment; all the circumstances regarding his relationship to the parties; and any interest or connection with the matter at hand that could influence the client in the selection of a lawyer.
The Commission interprets this Rule to require disclosure to both clients, in all three hypothetical situations, where Lawyer A and Lawyer B have any of the six relationships set forth in the Facts.Applicability of Rule 3.4(f). Rule 3.4(f) provides:
(f) Interest of Lawyer. Except with the informed written consent of the client after full disclosure, a lawyer shall not accept employment if the exercise of his professional judgment on behalf of the client will be, or reasonably may be, affected by any interest of the lawyer.
Obviously, a determination as to whether this Rule applies to any given case must depend upon the particular facts of that case. In the context of the hypotheticals presented at the beginning of this opinion, the issue would be whether the relationship between the lawyers involved is one which will, or reasonably may, affect the lawyer?s ability to exercise professional judgment because of his own financial, business, professional, or personal interests. See Reporter?s Notes to Rule 3.4(f). Since the nature of the relationship between Lawyer A and Lawyer B (friendly, supportive, estranged, etc.) clearly affects the likelihood of there being an impact on the ability of the lawyers involved to exercise their professional judgment, an advisory opinion by this Commission cannot set forth hard and fast rules that would govern all cases. A few observations are, nevertheless, in order.
To begin with, the Commission believes that the first hypothetical presented (Lawyer A versus Lawyer B) represents the type of situation where Rule 3.4(f) is most apt to apply, regardless of which of the six above‑mentioned relationships is involved. Accordingly, the Commission would recommend, as the preferred practice, that the informed written consent of each related lawyer?s client be obtained, in a case involving any of the six relationships involved, before the related lawyer accepts employment by the client.
With regard to the second hypothetical presented (Lawyer A versus Lawyer B?s firm), the Commission believes Rule 3.4(f) is most likely to apply to Lawyer A when the relationship to Lawyer B (who is not involved in the case) is as spouse, fiancee, or unmarried living partner, due to the degree of intimacy normally found in such relationships. The preferred practice would therefore be to obtain the informed written consent of Lawyer A?s client in that situation. The likelihood of Rule 3.4(f) applying to Lawyer B?s firm in this situation would seem more remote and would generally depend upon the relationship between the lawyer handling the case and Lawyer B. Finally, it would seem that Rule 3.4(f) would generally not apply to either side where Lawyer A and Lawyer B are siblings, parent and child, or in-laws, since by definition only one of the related lawyers would have any involvement in the case and the closeness of these relationships is not usually such that a conflict could reasonably be expected to arise between a lawyer?s personal interest and the interest of his client. See Reporter?s Notes to Rule 3.4(f). In all of these cases, of course, full disclosure would have to be made pursuant to Rule 3.4(a), see supra, so it would not seem unduly burdensome (and it would certainly be the preferred practice) for both lawyers involved to also secure the client?s express written consent to the representation in light of the potential (albeit remote, in most cases) conflict of interest. Failure to obtain such written consent would not be a violation of the Maine Bar Rules, however, except in those cases to which Rule 3.4(f) is found to apply.
With regard to the third hypothetical presented (Lawyer A?s firm versus Lawyer B?s firm), the Commission believes that in most cases Rule 3.4(f) would probably not apply with regard to any of the six relationships mentioned above, so that generally no written consent from either client would be required where neither related attorney will have any involvement in the case. In such cases, the disclosure requirements of Rule 3.4(a) will generally suffice to protect the clients involved from potential conflict of interest with their lawyers. In those cases where the disclosure requirements alone will not suffice, due to the special circumstances of the relationship involved, then Rule 3.4(f) would apply and the informed written consent of the client would have to be obtained.Applicability of Rule 3.4(b). The final issue to be addressed in this opinion concerns Rule 3.4(b), which provides:
(b) Conflict of Interest. A lawyer shall not accept employment if the exercise of his independent professional judgment in behalf of a client will be, or is likely to be, adversely affected by the acceptance of such employment, or if it would be likely to involve him in representing differing interests, except to the extent such employment is permitted by subdivision (d) of this rule.
This Rule goes beyond the consent requirement of Rule 3.4(f) and absolutely prohibits acceptance of employment by a lawyer (even where there has been full disclosure and written consent by the client) in situations where the exercise of the lawyer?s independent professional judgment will be, or is likely to be, adversely affected by the acceptance of such employment. As is the case with Rule 3.4(f), however, a determination as to the applicability of this Rule to any given case must be made on the basis of the particular facts of that case. Accordingly, this Commission is unable to set forth, in an advisory opinion, an across‑the‑board interpretation of the applicability of Rule 3.4(b) to the types of situations set forth in the Facts. It is important to note, however, that whenever the facts of a given case would require a related lawyer to disqualify himself from participation because of Rule 3.4(b), then all other members and associates of the disqualified lawyer?s firm must also be disqualified under Rule 3.4(k). The Commission would also make the following observations:
Rule 3.4(b) does not automatically prohibit lawyers having any of the six relationships being dealt with here, or their respective firms, from representing differing interests. On the other hand, lawyers involved in any of these situations must be extremely sensitive to the very real conflict problems that can arise because of a close personal relationship with opposing counsel. This is particularly true in the case of lawyers who are husband and wife, fiancees, or unmarried living partners, where the very nature and intimacy of the relationship can give rise to personal, psychological and/or pecuniary considerations that require very close attention to the strictures of Rule 3.4(b). As pointed out in the Reporter?s Notes to this Rule, doubts about potential conflicts between a lawyer?s personal interests and his clients? interests should be resolved against undertaking representation. This is consistent with the underlying rationale of the Rule, which is to promote a lawyer?s undiluted loyalty to his client, free of compromising influences and loyalties. See EC 5‑1 of the ABA Code of Professional Responsibility.
Although not necessarily prohibited by the Maine Bar Rules, the representation of differing interests by lawyers who are husband and wife, fiancees, or unmarried living partners, should probably be avoided in most instances. See Maine Bar Association Opinion No. 70 (12/4/78). The very appearance of impropriety and potential conflict in such a situation argues for its avoidance even if, technically, Rule 3.4(b) would not be violated. Representation of differing interests by the firms of these spouses, on the other hand, where at least one of the lawyer‑spouses is not at all involved, is less troubling. Similarly, representation of differing interests by lawyers who are siblings, parent and child, or in‑laws, or by their respective firms, is generally far less problematical, in terms of the appearance of impropriety, than the case of lawyer‑spouses. In all of these situations, of course, extreme care must be taken to comply with the requirements of Rules 3.4(b) and 3.4(k), as noted in the preceding paragraph of this Opinion; and whenever these rules are found to apply to a given case, employment may not be accepted by the related lawyer or by any of his partners or associates.
Dissent to Ethics Opinion #79-3
To the extent that the Commission?s opinion divides the six relationships that potentially give rise to conflicts of interest into two groups (spouses, fiancees, or unmarried living partners in one; siblings, parent and child, or in‑laws in the other) with the suggestion of differing standards for the two groups, two members dissent.
Initially the Commission notes that the nature of the relationships between Lawyer A and Lawyer B (friendly, supportive, estranged, etc.) affects the likelihood of there being an impact on the ability of the lawyers involved to exercise their professional judgment. This seems to be a recognition that the nature of the specific relationship involved in any given case is a crucial variable in determining the ethical consideration. If the Commission spoke in general terms of extremely close, intimate relationships as one category, and less close, less intimate relationships as the other, this dissenting opinion would not be necessary. However, by dividing the six relationships under discussion into two separate categories several times in the opinion, the Commission may be creating the impression that there is a presumption of a greater likelihood of ethical problems where Lawyer A and Lawyer B are spouses, fiancees, or unmarried living partners than if they are siblings, parent and child, in‑laws. (For example, the opinion states that the representation of differing interests by lawyers who are spouses, fiancees, or unmarried living partners should probably be avoided, but that for siblings, parent and child, or in‑laws to do so is far less problematical.) In the opinion of the dissenter, this particular division of the relationships is not required by logic, and is in fact unreasonable and unnecessary.
Prior to adoption of the opinion, members of the Commission appeared to agree that the relationship called ?unmarried living partners? could include mere roommates, as well as two people involved in a more intimate relationship with each other. There seems no logical reason why mere roommates should avoid representing differing interests to a greater extent than siblings. To thus classify roommates in the same category as spouses is simply not reasonable. Siblings, or a parent and a child, might well have emotional and/or financial bonds that create at least as great a likelihood of conflicts of interest as recently engaged fiancees, or estranged spouses. To include siblings and parents and children in the same group as in‑laws appears as unreasonable as including roommates in the same group as spouses.
If the phrase ?unmarried living partners? is taken to include only intimate relationships akin to marriage, the division of relationships made by the Commission appears to rest on a particular type of intimacy which is presumably present in this first group of relationships (spouses, fiancees, or unmarried living partners) and absent in the other. The Commission appears to be drawing distinctions as to preferred ethical practices for two sets of relationships while the rationale for the particular division of the relationships into the two sets is open to question. Accurately making broad assumptions about human nature under a variety of circumstances may well be beyond the province of the Commission.
Given that the Commission initially noted that the application of an ethical rule to any given case must depend on the particular facts of the case, and that the nature of the relationship between the lawyers involved would have a bearing on the likelihood of conflicts of interest such that it could not set hard and fast rules, the repeated implication that one group of relationships appears more likely to lead to conflicts than the other is, in the dissenters? opinion, unwise and unnecessary.
Enduring Ethics Opinion
Opinion #4. Zoning Board Opinion
Issued by the Professional Ethics Commission
Date Issued: October 17, 1979
Question
Lawyer A represented a client before a Town Board of Zoning Appeals whose neighbor had appealed the issuance of a building permit to A?s client. The Board revoked the building permit and Lawyer A took an appeal to the Superior Court.
While the appeal was pending, A?s partner, Lawyer B, was named as Town Counsel for the Town involved in the zoning appeal. Assuming that the Town will be required to engage other counsel to defend the appeal, the Commission is asked whether Lawyer A may continue to participate in the case. Additionally, we are asked if A has an ethical obligation to remain regardless of his own preference unless his client specifically releases him.
Opinion
Bar Rule 3.4(c) is relevant to our response to the first question. That rule provides that:
A lawyer shall not continue multiple employment if the exercise of his independent professional judgment in behalf of a client will be, or is likely to be, adversely affected by the acceptance of such employment or if it would be likely to involve him in representing differing interests, except to the extent such employment is permitted by subdivision (d) of this rule.
In our opinion, Lawyer A is involved in ?multiple employment? within the meaning of the rule since his partner (and thus, by extension, he) represents the Town on an ongoing basis. Indeed, we note that recognition of the ethical problem seems to have arisen a little late in the game since the multiple employment arose upon Lawyer B?s acceptance of employment with the Town. We cannot tell from the facts whether Lawyer A?s independent professional judgment will be adversely affected in the situation presented by the subtle pressures which may be generated as a result of his partner?s employment as Town Counsel.
Assuming that Lawyer A concludes that his ability to represent his client on the appeal will not be impaired by his partner?s new position, he may proceed with the appeal if the conditions of Rule 3.4(d) are met:
A lawyer may represent multiple clients if it is obvious that he can adequately represent the interests of each and if each consents to the representation after full disclosure of the possible effect of such representation on the exercise of the lawyer?s independent professional judgment on behalf of each.
It should be noted that the rule imposes an objective test of ?obviousness? which requires more than a subjective judgment by the attorney that his professional judgment will not be impaired by the multiple employment. See Reporter?s Note to Rule 3.4(b). In the present instance, Lawyer A must take into account that although the Town will be represented by other counsel on the appeal, it may nevertheless be apprehensive that its affiliation with Lawyer B will in some way give A an advantage. In addition, A?s client, for obvious reasons, may lose confidence in A?s independence of judgment when advised that A?s partner has become Town Counsel. Although not required by the rule, it would be preferable that the disclosure be in writing.
The Commission believes that Opinion #17 of the Professional Ethics Committee of the Maine Bar Association is not necessarily inconsistent with the conclusion indicated. In that case, it was determined that an attorney whose partner was a Trustee of the State University should not represent faculty members in litigation with the University. In concluding that even with client consent the multiple representation would not be proper, the Committee stated that:
The University is state supported. Its Trustees are appointed by the Governor. The public interest is involved to such a degree that we consider this to be a case where the attorney?s representation of clients with claims against the University would be improper even if the consent of the University and the clients were to be obtained.
The present case is distinguishable because it does not raise, at least in the same degree, the questions of public interest and public visibility which led to the conclusion that the appearance of a conflict affecting public confidence in the system would be presented.
The Committee has also been asked whether, if Lawyer A may continue to represent his client on the appeal, he is ethically bound to do so. Bar Rule 3.5(c) sets forth the grounds upon which a permissive withdrawal from employment is proper. A lawyer may not withdraw on a whim or simply because of a lack of interest in the case. By accepting the case in the first place, he impliedly agrees to see it through to completion except for good cause. It would obviously be unfair to abandon his client to the delay, expense, and prejudice which may result from having to educate some other lawyer regarding the background, legal problems, and advisable strategies to be pursued.
In the present instance, there would be no problem about Lawyer A?s withdrawing if he determined, for the reasons stated above, that it would be unethical for him to pursue the multiple employment. Rule 3.5(c) states that permissive withdrawal is proper where:
(7) His continued employment is likely to result in a violation of these rules.
Enduring Ethics Opinion
Opinion #5. Juropsychotherapist Opinion
Issued by the Professional Ethics Commission
Date Issued: October 17, 1979
Question
A licensed attorney who holds a J.D. degree expects to obtain a master?s degree in counseling and to be certified by the American Association for Marriage and Family Therapists. He hopes to practice as a marriage and family counselor and at the same time practice as a domestic relations attorney.
The Commission has been asked:
Whether the attorney may use the title ?doctor,? ?when wearing the 'hat' of the mental health professional?; when wearing the 'hat' of the mental health professional";
Whether the attorney may hold himself out to the public as both an attorney and as a marriage/family counselor, using the same stationery, professional card, shingle and books of account for both practices;
Whether the attorney may practice both as such and as a marriage/family counselor ?without a conflict.?
The questions suggest that the attorney views his law and counseling practices as different but related aspects of a single occupation. Indeed, in a letter to the Professional Ethics Committee of the Maine State Bar Association, he describes his proposed profession as ?juropsychotherapist.?[1]
Opinion
Whether this attorney may use the title ?doctor? depends upon whether his counseling training gives him the credentials normally implied by use of that title. He may not style himself ?doctor? on the basis of a J.D. degree. Regular use of the title ?doctor? is almost exclusively confined to certain health professionals (see 32 M.R.S.A. § 3270) and, to some extent, academics with a Ph.D. degree and clergymen. We think the natural tendency of any lay person hearing the attorney referred to as ?doctor? or reading such a title upon his office door or professional card would be to assume that the attorney is also qualified in one of those professions. The inquiring attorney concedes that ?(o)bviously, I would be in violation of the canon of ethics if I used it ('doctor') when wearing the hat of a legal professional.? Since he seems to view his future profession as wearing the single ?hat? of ?juropsychotherapist,? whatever that may be, it is hard to see how the title ?doctor? may be used without ?wearing the hat of a legal professional.?
Whether the attorney?s master degree in counseling will entitle him to use the title ?doctor? is a question normally outside the scope of this Committee?s jurisdiction. Given the special circumstances of the present case, however, the Committee notes that 32 M.R.S.A. § 3270 appears to control use of the title in Maine and to prohibit its use by a person whose only qualification is a master?s degree in counseling.
There is no reason why the attorney may not practice as both a lawyer and a family and marriage counselor, in the same office if that is his intention, and if he is otherwise entitled to practice as a family and marriage counselor. Since the Committee does not pass on questions of law, we express no opinion whether the training the attorney proposes to obtain and the certificate to which he aspires will allow him to use the words ?family and marriage counselor? to describe himself in Maine. He may likewise now use the same stationery, professional card, shingle and books of account for both occupations, and his advertising, if any, may identify both professions, as long as the identifying information and accompanying representations concerning his professional activities are not misleading or deceptive. (Rule 3 of the Maine Bar Rules contains no counterpart to DR 2‑102(E) of the Maine State Bar Association Code of Professional Responsibility, which prohibited such co‑mingling of the occupations of a single attorney.)
The Commission was also asked whether the attorney could practice both of his specialties ?without a conflict.? Since it is not entirely clear what was meant by conflict, we doubt that we can give a complete answer. It seems evident that the counseling occupation the attorney proposes to undertake will be so closely related to the practice of law as to subject him to the Code of Professional Responsibility in his counseling as well as his law practice. Counseling clients, knowing he is a lawyer, will inevitably be seeking and expecting legal advice along with counseling, or will assume that the counseling they receive has legal elements or is given with due regard for their legal rights and obligations. But when the lawyer‑counselor is counseling both parties to a marriage about marital conflicts, it seems clear that he cannot at the same time give legal advice or even appear to be doing so, since their interests conflict. The Commission understands that most marital counseling involves both spouses, or at least the counselors usually retain the option to deal directly with both. Thus it would appear the attorney‑counselor will not be able to act in both capacities in much of his marital counseling practice. The obligation to give each client his independent professional judgment, unimpaired by any conflicting loyalty or obligation, will apply equally to both professional roles in other situations as well. For example, clearly the attorney may not represent one spouse in a divorce action after he has provided counseling to both spouses. Although we express no opinion on the ethical responsibilities of the lawyer as counselor, we would be hard put to imagine any tolerable code of counseling ethics that did not require strict neutrality before and after joint counseling in such circumstances.
Lacking more specific questions, or more precise definition of the ?conflict? anticipated, we must leave to the inquiring attorney the task of unraveling the implications of being subject to the Code of Professional Responsibility in his counseling practice.
Although not specifically raised as a question, implicit in explanatory materials submitted by the attorney is a suggestion that he may wish to use a new term, such as juropsychotherapist, to describe his practice to the public. In the Commission?s view, such use of a coined word to describe the attorney would create a serious risk of misleading the public. There is no such interdisciplinary profession now; it is not subject to interdisciplinary licensing as such; and no standards exist to judge the qualifications of a person claiming to be such. Indeed it is not clear that the attorney will be entitled to use the term psychotherapist to describe himself in any event. (See 32 M.R.S.A. § § 3811.2 and 3812). Use of any coined word to describe the attorney could suggest qualifications he does not possess, and at best would either confuse or suggest that the whole is different from the sum of its parts, an attorney who is also a marriage and family counselor. The Commission is not prepared to agree that any material difference exists, particularly in light of the conflict problems discussed earlier.
Footnotes
[1] The questions to which this opinion responds were referred by the Ethics Committee to the Grievance Commission pursuant to Maine Bar Rule 7(c)(3)(B).
Enduring Ethics Opinion
Opinion #6. Disqualification of Prosecutor?s Opinion
Issued by the Professional Ethics Commission
Date Issued: October 17, 1979
Facts
The Commission has been asked by a District Attorney in Maine for an advisory opinion regarding the ethical obligations of his office when he or one of his assistant district attorneys may be a witness in a trial to be prosecuted by that office. Our attention has been directed to the recent decision of the Indiana Supreme Court in the case of Goldsmith v. Superior Court of Hancock City, 386 N.E. 2d 942 (1979), in which DR 5‑102 of the Code of Professional Responsibility has been interpreted. That disciplinary rule is the predecessor of Maine Court Rule 3.5(b)(1). The Indiana decision essentially holds that when an assistant in the prosecutor?s office is likely to be a witness, the case may be prosecuted by one of the other attorneys in that office. But, when the elected prosecutor himself becomes a potential witness, his entire staff must be recused.
Opinion
The Commission believes that the decision of the Indiana Supreme Court is only partially persuasive and that the correct rule is that the entire District Attorney?s office should be recused when either the District Attorney or any of his assistants is likely to be called as a witness. They may be replaced for that trial by either the Attorney General?s office or by a special prosecutor appointed by the Court. (The Commission intends in this opinion only to address the requirement to withdraw at trial. No opinion is expressed as to the question of withdrawal when a District Attorney or a member of his staff is to be a witness at an earlier stage of the prosecution.)
Maine Court Rule 3.5(b)(1) provides as follows:
If a lawyer knows, or should know, that he or a lawyer in his firm is likely or ought to be called as a witness in litigation concerning the subject matter of his employment, he and his firm shall withdraw from representation at the trial unless the court otherwise orders. This rule does not apply to situations in which the lawyer would not be precluded from accepting employment under Rule 3.4(j).
The Reporter?s Notes indicate that this rule is ?a condensed version of DR 5‑102? from the Code of Professional Responsibility. Since the Indiana case and other precedent relate to this disciplinary rule rather than Maine?s new rule, it is appropriate to compare DR 5‑102(A). It provides:
If, after undertaking employment in contemplated or pending litigation, a lawyer learns or it is obvious that he or a lawyer in his firm ought to be called as a witness on behalf of his client, he shall withdraw from the conduct of the trial and his firm, if any, shall not continue representation in the trial, except that he may continue the representation and he or a lawyer in his firm may testify in the circumstances enumerated in DR 5‑101(B) (1) through (4).
These rules are obviously very similar, but the Commission notes that if anything, the Maine Rule requires withdrawal in more situations than does DR 5‑102. This is because the Maine Rule applies not only when the lawyer ?ought to be called as a witness? but also where that is ?likely? to occur.
Even though the Ethical Considerations which are a part of the Code of Professional Responsibility are no longer part of the Maine disciplinary structure, they are helpful in understanding the background of our present rules. EC 5‑9 and EC 5‑10 are explanatory of DR 5‑102 and therefore are relevant to Court Rule 3.5(b)(1):
EC 5‑9 Occasionally a lawyer is called upon to decide in a particular case whether he will be a witness or an advocate. If a lawyer is both counsel and witness, he becomes more easily impeachable for interest and thus may be a less effective witness. Conversely, the opposing counsel may be handicapped in challenging the credibility of the lawyer when the lawyer also appears as an advocate in the case. An advocate who becomes a witness is in the unseemly and ineffective position of arguing his own credibility. The roles of an advocate and of a witness are inconsistent; the function of an advocate is to advance or argue the cause of another, while that of a witness is to state facts objectively.
EC 5‑10 Problems incident to the lawyer‑witness relationship arise at different stages; they relate either to whether a lawyer should accept employment or should withdraw from employment. Regardless of when the problem arises, his decision is to be governed by the same basic considerations.
Where the question arises, doubts should be resolved in favor of the lawyer testifying and against his becoming or continuing as an advocate.
Questions relating to lawyers or members of their firms becoming witnesses in their own case have resulted in many ethics opinions. See, e.g., ABA Formal Opinion 50 (1931), ABA Formal Opinion 185 (1938), and N.Y. State Bar Association, Formal Opinion 353 (1974). In ABA Formal Opinion 339 (1975) the purposes of the lawyer‑witness rules were summarized as follows:
The client?s need for the testimony from a disinterested source, and the client?s entitlement to an advocate whose effectiveness cannot be impaired because of his advocate having been a witness as to contested issues are the foundation of DR 5‑102 and DR 5‑102(B).
Of critical importance to the present inquiry is, of course, whether the Rule should be construed to apply to district attorneys and assistant district attorneys. There are really two questions: (1) Should a prosecutor recuse himself when he is personally likely to be a witness, and (2) should a district attorney and his staff of assistants be treated as a ?firm? such that they should all be recused when any one of them is likely to be a witness? A few prior ethics opinions have considered these issues. In Wisconsin Bar Bulletin 55 (1974), the ethics committee of that state determined that Canon 19, the predecessor of DR 5‑102, would apply equally to a district attorney or his assistant. Similarly, in Oklahoma Bar Association 16 (1931), the ethics committee there declared that the prosecutor and his assistant may not testify in cases wherein they are counsel for the state. The State Bar of Texas, in its opinion no. 226 (1959), has declared that a county attorney or his assistant may properly testify in a criminal case if someone else will prosecute the case. (It is unclear whether this opinion contemplates that the ?someone else? will be from the same office or not.)
The Commission has no trouble in declaring that a prosecutor (either the elected official or an assistant) should recuse himself when he personally may be a witness in that case. The spectacle of an attorney moving from the counsel table to the witness stand and back again, and perhaps thereafter arguing for his own credibility, is clearly to be avoided if at all possible, whether the attorney is a prosecutor or not.
The second question raised above is more difficult, however. Whether a prosecutor and his staff have the characteristics of a law firm to the extent that they should all be recused when one is likely to testify raises questions of policy and intent of the rules.
The Indiana Supreme Court in Goldsmith reaches its conclusion against recusing the entire prosecutor?s office by distinguishing between this type of practice of law and private practice. The Court declares that the reasons for the rule advanced by Ethical Consideration 5‑9
. . . [relate] largely to the common interest of the attorney‑witness and his law firm in the outcome of the litigation and the appearance of impropriety [which] have no applicability in the case of a multi‑deputy prosecuting attorney?s staff. The relationship between the prosecuting attorney and his sole client, the citizens of the circuit in which he serves, is fundamentally and decisively different from a lawyer and the ordinary attorney‑client relationship.
The lawyers in a law firm have a common financial interest in the case whereas the deputies in a prosecutor?s office have an independent duty by law to represent the State of Indiana in criminal matters. Their relationship to each other, rather than pecuniary, is no more than sharing the same statutory duties; and the interest of one deputy which requires him to testify will ordinarily have no financial or personal impact on the other deputies in the office. Thus, there is no reason to recuse the entire staff of deputies of the prosecuting attorney when one deputy becomes a witness in a case handled by the office.
We disagree. We believe that the reasons for the Rule do apply to a prosecutor?s staff in significant ways. While it is true that prosecutors have no financial stake in the outcome of cases in any direct sense, their continued employment may to some extent depend on their success in Court. Similarly, they may well have public relations or political motivations for winning cases that are at least as compelling as the financial interests of attorneys in private practice. [1] Thus it cannot be assumed that a prosecutor‑witness is unbiased or that bias will not be perceived by jurors. This potential can impair the client?s case just as much when the client is the state as it would when the client is a single individual.
As indicated at the outset, the Indiana Court distinguished between the situations where the potential witness was an assistant prosecutor and where he was the elected prosecutor himself. Goldsmith holds that the whole staff must be recused if the chief attorney is the potential witness. This was on the theory that the prosecutor himself ?exercises authority over and speaks through his deputies.? We agree that the elected district attorney should not be a witness in a case prosecuted by one of his assistant district prosecutors, but, as discussed above, we would extend this holding to require that when any member of the District Attorney?s legal staff is likely to be called as a witness then the entire staff of that office should be recused for that case.
Footnote
[1] Since we are talking about criminal cases in this opinion, it should be noted that defense attorneys have no direct financial stake in the outcome either. Contingent fees in such cases are prohibited.
Enduring Ethics Opinion
Opinion #7. District Attorney Conflict of Interest
Issued by the Professional Ethics Commission
Date Issued: April 2, 1980
Question
Is it permissible under the Maine Bar Rules for a District Attorney to serve as counsel for the defendants, the County Sheriff and a County Commissioner, in a civil action brought by a prisoner in the County Jail alleging the violation of constitutional rights in the administration of the County Jail while at the same time the District Attorney is prosecuting a criminal case against the prisoner, the Plaintiff in that action?
Opinion
It is the opinion of the Grievance Commission that under the circumstances presented, the District Attorney should disqualify himself from representation of the County officers in one of the pending actions because of the conflict, or at least the potential for conflict, between the interests of his clients in the civil action and the interest of the public in the prosecution of the criminal case.
Title 30 M.R.S.A. § 501 expressly authorizes the County Commissioners to employ other counsel in civil actions involving the County if in their judgment the public interest so requires. Moreover, the Attorney General could be requested to prosecute the pending criminal case because of the conflict with the prisoner?s civil action. The Commission believes that because of the conflict of interest inherent in this situation, the Maine Bar Rules and the public interest require that independent counsel be retained in one of the two cases.
The Commission?s opinion is based on Maine Bar Rule 3.4(b) (Conflict of Interest) and 3.4(c) (Multiple Employment Forbidden). The District Attorney?s representation of the County officials in the civil action is ?likely to involve him in representing different interests,? i.e., the interests of his clients in the civil action and the interest of the public in the prosecution of the criminal case. As a practical matter, particularly if the District Attorney is engaged simultaneously in plea bargaining in the criminal case and settlement negotiations in the civil action, it would be extremely difficult, if not impossible, for the District Attorney to separately and independently represent these two differing interests, and there is therefore a real possibility that one of those interests could be compromised for the sake of the other.
Accordingly, the Commission answers the question presented in the negative.
Enduring Ethics Opinion
Opinion #188. Conflict Analysis For Attorney Member of Municipal Planning Board
Issued by the Professional Ethics Commission
Date Issued: February 2, 2005
Question
An attorney who was recently appointed to a municipal planning board has asked for guidance regarding his participation in certain matters before the planning board and his ethical obligations under the Bar Rules, specifically Bar Rule 3.2(d)(1) which reads as follows:
A lawyer who holds public office shall not . . . [u]se that public position to influence, or attempt to influence, a court or other public body engaged in adjudicatory proceedings to act in favor of the lawyer, any partner or associate, or any lawyer affiliated with them, or of a client of any of them.
The lawyer?s request came in the form of a series of seven hypothetical questions based on these simple introductory facts:
Lawyer A is a member of Law Firm X and also is a member of a municipal planning board. The planning board reviews a variety of land use-related applications, including site development plan applications, conditional use applications and subdivision applications. Lawyer B is a member of Law Firm X but is not a member of the planning board.
Initially, for purposes of analysis under Rule 3.2(d)(1), the Commission concludes that as a member of a municipal planning board, Lawyer A ?holds public office? on a ?public body engaged in adjudicatory proceedings.? Furthermore, the Commission would note that any planning board member who engages in deliberations or votes on an application before the board is, almost by definition, using his or her public office to influence or attempt to influence that public body. That is, in fact, the role of a member of a public body engaged in adjudicatory proceedings. The first six hypothetical questions we are asked to consider concern Lawyer A?s role as a public official rather than his/her professional role as an attorney when not sitting as a public official. [1]
Question 1: Lawyer B represents Client C on an application presently pending before the planning board. Does Bar Rule 3.2(d)(1), or any other Bar Rule provision, prohibit Lawyer A from participating in the planning board's consideration of, and voting on, Client C's application?
We answer the first hypothetical question in the affirmative. The question concerns a planning board application brought by a party represented by Lawyer B, a partner or associate of Lawyer A. If Lawyer A participates in the discussion of that application, he would be using his public position as a planning board member to influence, or at the very least attempt to influence, the planning board. Similarly, merely voting on the application, even absent other participation, would be a use of his/her public position to influence the planning board as a public body. While the Rule only prohibits participation where the influence or the attempt to influence would be in favor of the application brought through Lawyer B, it is hard to visualize any participation, other than unwavering and unreserved opposition to the application, that would not be seen as an attempt to influence the planning board in favor of Lawyer B?s position.
It may be impossible for a planning board member to know at the outset of deliberations whether his or her initial opposition to an application may waver during the debate, and in Opinion No. 45, the Commission noted how difficult it can be to determine whether even a non-participating lawyer/public official ?has exercised a subtle influence over the decisions of the public bodies of which the lawyer is a member.? Rather than tread on this dangerous ground, Lawyer A should simply recuse him or herself from participation in or voting on the application.
Question 2: Lawyer A represents Client C on other matters. Client C has an application presently pending before the planning board but either is unrepresented or is represented by counsel outside of Law Firm X on the application. Does Bar Rule 3.2(d)(1), or any other Bar Rule provision, prohibit Lawyer A from participating in the planning board's consideration of, and voting on, Client C's application?
The Commission also answers this question in the affirmative. The only factual difference between this hypothetical and the one presented in Question 1 is that the application before the planning board is brought by a current client of Lawyer A rather than a partner, associate, or affiliated lawyer. The prohibition in Rule 3.2(d)(1) is not limited to matters in which Lawyer A?s partners, associates, or affiliated attorneys participate before the planning board. It applies equally when the participation is by clients of any of those attorneys. The hypothetical implies that Client C is a current client of Lawyer A, as opposed to a former client, and the Commission reads Rule 3.2(d)(1) as referring solely to current clients of Lawyer A or of any partners, associates, or lawyers affiliated with Lawyer A.
Question 3: Lawyer B represents Client C on other matters. Client C has an application presently pending before the planning board but either is unrepresented or is represented by counsel outside of Law Firm X on the application. Does Bar Rule 3.2(d)(1), or any other Bar Rule provision, prohibit Lawyer A from participating in the planning board's consideration of, and voting on, Client C's application?
The Commission also answers this question in the affirmative. Rule 3.2(d)(1) makes no distinction between a client of Lawyer A and a client of a partner, associate, or affiliate of Lawyer A. Again, the question presumes, and the Rule covers, only current clients of Lawyer B.
Question 4: Lawyer B represents Client D in opposition to an application presently pending before the planning board. Does Bar Rule 3.2(d)(1), or any other Bar Rule provision, prohibit Lawyer A from participating in the planning board's consideration of, and voting on, the application to which Client D is opposed?
The Commission also answers the question in the affirmative. The Rule prohibits influencing or attempting to influence the public body in favor of the lawyer, any partner or associate, or any lawyer affiliated with them, or of a client of any of them whether they are presenting, supporting, or opposing an application.
Question 5: Lawyer A represents Client D on other matters. Client D is opposed to an application presently pending before the planning board but either is unrepresented or is represented by counsel outside of Law Firm X with respect to the pending application. Does Bar Rule 3.2(d)(1), or any other Bar Rule provision, prohibit Lawyer A from participating in the planning board's consideration of, and voting on, the application to which Client D is opposed?
The Commission answers the question in the affirmative for the reasons stated in response to Questions 2 and 4.
Question 6: Lawyer B represents Client D on other matters. Client D is opposed to an application presently pending before the planning board but either is unrepresented or is represented by counsel outside of Law Firm X with respect to the pending application. Does Bar Rule 3.2(d)(1), or any other Bar Rule provision, prohibit Lawyer A from participating in the planning board's consideration of, and voting on, the application to which Client D is opposed?
The Commission answers the question in the affirmative for the reasons stated in response to Questions 3 and 4.
Question 7: The municipality has an ordinance that prohibits a planning board member from recusing him/herself or abstaining unless the planning board first has determined that the member has a conflict of interest. A circumstance arises in which Bar Rule 3.2(d)(1), or another Bar Rule provision, prohibits Lawyer A from participating in the planning board's consideration of, and voting on, a particular application. The planning board, however, determines that Lawyer A does not have a conflict of interest and that Lawyer A must participate and vote. What should Lawyer A do?
The Commission presumes that this would be a rare occurrence, but the answer to the question is clear. If Lawyer A?s participation on the planning board would violate Rule 3.2(d)(1) or any other Bar Rule, Attorney A must refrain from participating. There is no exception made in Bar Rules 1(a), 2(c), and 3.1(a) for contrary determinations made by a planning board or similar public body.
As discussed in the Advisory Committee?s notes when Rule 3.2(d)(1) was substantially re-written in April 1990, the Rule attempted to resolve the policy dilemma between the need to avoid the appearance of impropriety and the public interest in encouraging lawyers to undertake public service. In our view, should a municipal board on which a lawyer sits require him/her to violate a Bar Rule as a condition of service, and the lawyer has exhausted all avenues of appeal relevant to that decision, then it would be time for the lawyer to consider public service in a different venue. [Back to Index]
Footnote
[1] Ethics Opinion No. 45, issued on 11/22/83, considered a series of hypothetical questions presented by a lawyer/city council member including a question about ?the propriety of members of his law firm representing clients in proceedings involving agencies or employees of the city.? That Opinion considered questions similar to those raised herein, but from the point of view of an attorney representing clients before the public body rather than from the point of view of the lawyer in his/her role as public official. It was assumed in each of those questions that the lawyer/city council member would ?refrain from voting on any such matters which were presented to the city council.?
Enduring Ethics Opinion
Opinion #8. Divorce Conflict of Interest Opinion
Issued by the Professional Ethics Commission
Date Issued: April 2, 1980
Facts
The Commission has been asked to render an advisory opinion concerning the ethical obligations of Lawyers A and B in the following hypothetical situation.
H and W have decided to get a divorce. W has hired Lawyer A to represent her in the matter and has had her first meeting with him. H, not knowing this, subsequently consults with Lawyer B, who is Lawyer A?s associate, about getting a divorce from W. At that meeting H tells Lawyer B that the parties have agreed to a ?no‑fault? divorce and a property settlement. He then discusses with Lawyer B his income, assets, what he is seeking in the divorce, and the legal issues and procedures involved in obtaining a divorce.
Lawyer B then informs Lawyer A that this consultation has taken place, and Lawyer A tells Lawyer B not to represent H because Lawyer A already represents W. Lawyer B calls H and tells him this, and H hires Lawyer C, a member of a different law firm, to represent him in the divorce. No fee is ever charged to H for the consultation with Lawyer B, and there is no further contact between Lawyer B and H.
Questions
Must Lawyer A withdraw as W?s counsel in the divorce action?
If not, must Lawyer A at least disclose to Lawyer C the fact of H?s consultation with Lawyer B?
Must Lawyer B keep confidential the information obtained at his meeting with H?
Opinion
The Commission will begin by discussing Lawyer B?s ethical obligations in this situation. Rule 3.4(b) of the Maine Bar Rules provides, in relevant part:
(b) Conflict of Interest. A lawyer shall not accept employment if the exercise of his independent professional judgment in behalf of a client will be, or is likely to be, adversely affected by the acceptance of such employment, or if it would be likely to involve him in representing differing interests. . .
Rule 3.4(k) of the Maine Bar Rules provides:
(k) Partners and Associates Barred. If, for reasons other than health, a lawyer is required to decline employment or to withdraw from employment under these rules, no partner or associate, and no lawyer affiliated with him or his firm, may accept or continue such employment.
In the instant case, Lawyer B, after learning of Lawyer A?s representation of W, decided not to accept employment by H, and so advised H. This conduct complied with the above‑quoted rules. There is no ethical obligation to investigate whether representation of a prospective client will or may give rise to a conflict of interest situation before discussing the merits of the case with that prospective client.[1]If such a discussion does take place, however, and the lawyer then concludes that employment cannot be accepted because of an actual or potential conflict of interest, that lawyer is ethically obligated to preserve the confidences and secrets revealed by the prospective client during that discussion.
Rule 3.6(l) provides, in relevant part:
(l) Preserving the Confidences and Secrets.
1) Except as permitted by these rules or as required by law or by order of court, a lawyer shall not, without the informed written consent of the client, knowingly reveal a confidence or secret of his client, or use such confidence or secret to the advantage of himself or a third person.
2) A lawyer shall exercise reasonable care to prevent his partners, employees, associates, and others whose services are utilized by him from improperly disclosing or using confidences or secrets of a client.
A prospective client who consults with a lawyer, seeking advice and/or representation by that lawyer is, in the opinion of this Commission, a ?client? of that lawyer for purposes of Rule 3.6(l), even though the lawyer then or later decides not to accept employment by that client. Thus, in the instant case, Lawyer B must comply with the requirements of Rule 3.6(l) and preserve the confidences and secrets of H, even after informing H that he cannot represent him in the divorce action.
Turning now to Lawyer A, and to the question of whether he must withdraw as W?s counsel, the Commission believes Rule 3.5(b)(2)(ii) mandates such withdrawal. That Rule provides that a lawyer must withdraw from employment if ?he knows, or should know, that his continued employment will result in a violation of these Rules.? In the instant case, it is clear that confidences and secrets were imparted by H to Lawyer B, and therefore Lawyer B could not then represent W without violating Rule 3.6(l)(1), which prohibits the use by a lawyer of a confidence or secret of a client to the advantage of himself or a third person. Rule 3.4(k) extends this disqualification to Lawyer A, and therefore Lawyer A is ethically required to withdraw as W?s counsel in the divorce action.
In light of the Commission?s conclusion that Lawyer A must withdraw from the case, there is no need to address that alternative question presented with regard to disclosure to Lawyer C.
Footnote
[1]The Commission believes that the preferred practice among all lawyers should certainly be to establish procedures that will enable them to recognize conflicts of interest, or potential conflicts, at the earliest possible stage of dealing with a prospective client, in order to avoid the type of problem that arose in the instant case. On the other hand, the Commission recognizes the practical difficulties lawyers face in this regard, particularly in the larger firms (some of which have more than one office location), and the need to obtain certain basic information from a client at the initial conference to avoid additional consultations and expense to the client.
Enduring Ethics Opinion
Opinion #187. Guidance Concerning the Contents of the Client File that the Client is Entitled to Receive
Issued by the Professional Ethics Commission
Date Issued: November 5, 2004
Question
An attorney has asked the Commission for guidance on the scope of the attorney's obligation to provide a client with the contents of the clients file. Specifically, the attorney has asked whether the client is entitled to receive everything that the attorney has maintained with respect to the clients matter or whether the attorney is entitled to retain the attorneys notes, internal research memoranda and administrative documents, and similar documents created during the course of representation.
Opinion
This question places squarely in front of us issues we left open in a footnote to a recent opinion, Number 183. See Opinion #183, n.1 (issued 1/28/04). In that Opinion, we were asked whether an attorney is "obligated to keep a paper copy of the attorneys correspondence, if the attorney retains a copy of the correspondence in a computer or by other means of electronic storage." Id. We answered that question in a qualified fashion. We determined that an attorney may dispense[] with the retention of paper files in favor of computerized records, provided that the attorney is able to do so in a manner that comports with the attorneys obligation adequately to communicate with the client and to safeguard the clients property. Id. at 2. The attorney who sought our opinion on file retention understood that the attorneys correspondence was part of the clients file. We noted in Opinion #183, however, that we had not been asked to determine whether Maines Code of Professional Responsibility requires that certain categories of documents be maintained as part of the file or whether all records maintained by the attorney as part of the file . . . are property of the client. Id. 1 n.1.
File Maintenance
To guide attorneys on the scope of their obligation to provide a client with the contents of the clients file, we must at the outset discuss appropriate file maintenance, because an attorney can only discharge the ethical obligation to return materials to the client if the attorney has first discharged the ethical obligation to maintain the clients file.
Although the Maine Code of Professional Responsibility does not specifically deal with the obligation of an attorney to maintain files and, accordingly, offers no guidance as to the required contents of an attorneys file, it is inherently clear that adequate file maintenance is necessary in order for an attorney to discharge the obligation to employ reasonable care and skill and apply the lawyers best judgment in the performance of professional services. M. Bar R. 3.6(a). Files that are maintained in a comprehensive and orderly manner assist the attorneys own preparation and enable the attorney to review relevant notes, pleadings, correspondence, and documents before important telephone calls, interviews, meetings, and court appearances. See M. Bar R. 3.6(a)(2) (requiring attorneys to handle legal matters with preparation adequate in the circumstances). Furthermore, well-maintained files allow another attorney to provide subsequent representation to the client without prejudicing the clients interests. See M Bar R. 3.5(a)(2).
While we recognize that the amount of detail that any file contains will vary with the lawyers practice style and the nature of the representation, we believe that attorneys should be guided by a standard of reasonableness, the end result of which is that a file, whether kept electronically or in hard copy, should contain material that another attorney or the client would reasonably need to take up representation of the matter. Most of that material will be substantively related to the representation, but it could also include materials that some might deem of an administrative nature if the information contained in those materials is reasonably necessary to protect or defend the clients interests.
Materials that Must Be Delivered To The Client
We turn next to an analysis of an attorneys obligation to deliver the file to the client. At the outset, we revisit Opinion #74 (10/1/86), which offered attorneys some guidance on the circumstances in which they may destroy client files.[1]. We do so in order to highlight two general principles that we believe should guide attorneys in making decisions about the nature of the file documents to which the client is entitled. First, an attorney has an obligation to safeguard client property in the attorneys possession, even after representation ceases. Second, an attorney cannot destroy a file without the clients prior notice and consent if the file contains any information of value to a client.
We believe that the identification of these two principles - one dealing with client property and one dealing with valuable information highlights an important point. We do not read Maines Code of Professional Responsibility to imply that all material created or maintained by an attorney necessarily becomes client property. We likewise do not take the approach, underlying a variety of formulations offered by some courts, state ethics bodies, and commentators, that attempts to condition the return of file information on categorizing the material as property belonging either to the client (which must be returned) or the attorney (which need not be returned).[2] If a particular documents characterization as either client property or lawyer property were all that was required to determine an attorneys obligation with respect to the file, Opinion #74 would have had no need to identify a category of valuable property it could have discussed the attorneys obligation simply by reference to Rule 3.6(e)(2)(iv), which requires a lawyer to safeguard client property and deliver client property to the client upon the clients request. Similarly, if all material created or maintained by an attorney in the file is automatically considered client property, Opinion #74 would not have recognized that an attorney might destroy files in certain circumstances, even without client consent.
In sum, therefore, employing the two principles set out in Opinion #74, an attorney should deliver the clients property and any material, not otherwise readily available to the client, that the attorney knows or has reason to know is or would be of value to the client. The attorney must assess value to the client in relation to the accomplishment of the services for which the attorney was retained.
Ascertaining Client Property and Valuable Information
We now offer guidance on how to ascertain what is and what is not client property and the factors that must be considered when attempting to determine what is or may be valuable information to a client.
We turn first to the category of client property. This category typically includes materials provided by the client to the attorney, whether the material has intrinsic value i.e., money, securities, or a promissory note or value that is more dependent upon the particular items relationship to the legal matter for which the client seeks advice i.e., certain items of real evidence, documents such as tax returns and insurance policies, or the clients own notes and research. Also included in this category is finished work product that the attorney prepared for the client, and for which the client paid, such as contracts and estate planning documents.
In evaluating the second category of documents, information valuable to the client, we begin by describing those types of documents that ordinarily need not be provided to the client because they would not be helpful to the client in achieving the result for which the client retained the attorney. Those documents would ordinarily include:
Time sheets and billing records.
Internal administrative documents such as conflict checking forms and case assignment or staffing memoranda.[3]
Internal memoranda that set out a lawyers general impressions of the client and the matter, the options for staffing or handling a case, and certain internal firm business information.
Drafts of documents except as noted below.
We next turn to identifying those categories of documents that ordinarily should be provided to the client.[4] They include:
All pleadings.
All correspondence.
Research memoranda.
Notes and memoranda concerning information obtained from client interviews, witness interviews, facts of the case, and communications with other parties on the matter.
Certain drafts of documents (e.g., where prior drafts advanced legal arguments that might still be used in the matter, or where important to show the history of negotiations or otherwise pertinent to the future understanding of the outcome of the matter[5]).
We also offer additional observations that should help guide attorney conduct, all of which suggest that the prudent course of conduct is for an attorney to err on the side of providing the client with documents, rather than culling and withholding them.
First, in order to determine what information is valuable to the client in relation to the accomplishment of the services for which the attorney was retained, the lawyer must assess the point in time when the clients request for the file is made and any information that the lawyer has regarding the reason for the request.[6] Thus, for example, an attorneys notes regarding potential witnesses to be interviewed in any litigated matter will be useful information before the trial, but may not be useful after the trial has concluded and the witnesss testimony has been reduced to a transcript. Similarly, a first draft of a pleading or contract may have little utility once the final pleading has been filed or the contract executed.
Second, when an attorney withdraws from representation during the pendency of a matter, the Maine Bar Rules require the lawyer to provide the client with all the information that the client needs so as to avoid foreseeable prejudice. M. Bar R. 3.5(a)(2).
Third, whether a matter is ongoing or concluded, the touchstone of foreseeability referenced in Rule 3.5(a)(2) is important and embraces the idea that, as between the attorney and the client, the attorney is in a better position to assess the potential usefulness of any particular document to the client. The client should be able to depend upon the attorneys superior expertise in that respect.
Fourth, the fiduciary nature of the relationship between the lawyer and the client includes an obligation to be forthright and open, and to serve the interests of the client. It may be difficult for an attorney to maintain that he or she acted consistently with fiduciary obligations if documents are not provided to the client, but are later placed at issue in the course of the resolution of a legal or ethics dispute.
Finally, we offer several additional comments. There is nothing that prevents an attorney from maintaining at the attorneys expense, copies of all material provided to the client. We also see no reason to distinguish between materials stored electronically and materials kept in paper form. Thus, when deciding what material to maintain and return, attorneys should consider and evaluate material stored electronically. To aid in this process, attorneys and firms should consider developing file retention and disposition policies, and communicating those policies to clients at the outset of representation. Attorneys should also be mindful of substantive obligations that they may have under federal and state law with respect to document retention. For example, new provisions of the Sarbannes-Oxley Act impose significant criminal penalties on anyone who destroys documents with the intent to impede, obstruct, or influence an investigation or proper administration of any matter within the jurisdiction of any department or agency of the United States . . . . 18 U.S.C. § 1519.
Footnotes
[1] Although we do not further address file destruction in this opinion, we note that newly-adopted Rule 3.4(a)(4) (eff. Aug. 1, 2004) offers some guidance on file retention and destruction. That Rule states that unless file material is returned to the client or is of intrinsic value, or as otherwise ordered by a court or by agreement between the lawyer and client, a lawyer must maintain all information and data in the lawyers possession to which the client is entitled for a minimum period of eight (8) years. The new Rule also recognizes that a file may contain materials of intrinsic value that may not be destroyed until they are out of date and no longer of consequence. We observe, however, that once an attorney has complied with Rule 3.4(a)(4) by delivering to the client all information . . . to which the client is entitled, the attorneys decision regarding destruction of any remaining materials may be subject to rules of evidence, rules of civil procedure, and substantive law, all of which fall outside the scope of this opinion and our role in interpreting Maines Code of Professional Responsibility.
[2] We recognize that there is a wide divergence of opinions on this particular point. A majority of courts have ruled that a document created by an attorney belongs to the client who retained him. Swift, Currie, McGhee & Hiers v. Henry, 581 S.E.2d 37, 39 (Ga. 2003) (collecting cases). This approach is also captured in Section 46(2) of the Restatement (Third) of the Law Governing Lawyers, which requires a lawyer to allow a client or former client to inspect and copy any document possessed by the lawyer relating to the representation, unless substantial grounds exist to refuse. Restatement (Third) of the Law Governing Lawyers § 46(2) (2000). Under this analysis, documents may be withheld only if providing them would violate a duty to another; the lawyer concludes disclosure would harm the client; or they were reasonably intended only for internal review. Id. comment C. By contrast, a minority (although a substantial number) of courts and State bar legal ethics authorities . . . distinguish between the 'end product of an attorneys services, the documents representing which belong to the client, and the attorneys work product leading to the creation of those end product documents, which remains the property of the attorney. Sage Realty Corp. v. Proskauer Rose Goetz & Mendelsohn, 91 N.Y.2d 30, 689 N.E.2d 879, 666 N.Y.S.2d 985 (N.Y. 1997). The Commission here is taking neither approach, but one that is in between.
[3] We underscore here that, while under the Bar Rules an attorney may have no obligation to provide a client with administrative documents of this nature upon a clients request for the file, a court or tribunal could order an attorney to provide those documents if the attorney and the client are involved in a dispute that would render the documents relevant. Thus, an attorney should take care not to destroy such documents, if the attorney is on notice of potential litigation in which the documents might constitute relevant evidence.
[4] There may be documents that ordinarily should be provided to the client, but that might be withheld or screened in a particular case because of exceptional circumstances. For example, documents, or information within documents, the disclosure of which would violate a duty imposed by law or to a third party should be withheld. These would include documents that are subject to a confidentiality agreement imposed by a court that forbid disclosure to the client and entries in documents that contain confidential information concerning other clients and that therefore should be redacted. Material that might, in the attorneys reasonable judgment, cause significant harm to the client for example, certain medical or psychiatric records that might be injurious to the client can be withheld in limited circumstances (on this point, the Restatement (Third) of the Law Governing Lawyers states: [A] lawyer who reasonably concludes that showing a psychiatric report to a mentally ill client is likely to cause serious harm may deny the client access to the report. Ordinarily, however, what will be useful to the client is for the client to decide. Restatement (Third) of the Law Governing Lawyers § 46 comment C (2000)). Certain offensive personal statements made by witnesses or family members, not relevant to the legal matter for which the attorney was retained, might properly be withheld.
[5] Bar Rule 3.4(a)(4) underscores this point by requiring the retention of materials that have intrinsic value in the particular version. M. Bar R. 3.4(a)(4).
[6] If the client provides the attorney with the reason for the request, what will reasonably be of value to the client may be assessed in light thereof. For example, if the client merely wants to maintain for posterity a historical record of what took place in court, providing copies of pleadings alone might satisfy the clients request. On the other hand, if the client expresses no reason, and the attorney has any reason to believe that the client might want to review the entire case for any purpose whatsoever, or have it looked at by another attorney for a second opinion, then the attorney should provide the client with a copy of the entire file subject to our suggestions, supra.
Enduring Ethics Opinion
Enduring Ethics Opinion #187 [March 2019]
Opinion #9. Limiting Liability
Issued by the Professional Ethics Commission
Date Issued: April 2, 1980
Question
The Commission has been asked whether an attorney violates Maine Bar Rule 3.6(b) in refusing to acknowledge and correct an error in the distribution of real estate during the settlement of a probate estate. The attorney maintains that no error was made, but for purposes of this response the Commission will assume he is wrong.
Opinion
The Commission concludes that Rule 3.6(b) is not violated when an attorney takes the position that he has not been guilty of a professional error, or of professional negligence or misconduct. Rule 3.6(b) provides:
Limiting liability. A lawyer shall not attempt to exonerate himself from, or limit, his liability to his client for his personal malpractice or that of his partners or salaried employees. This rule shall not prevent a lawyer from settling or defending a malpractice claim.
Without attempting to detail all circumstances in which the rule applies, we believe its principal target is an attempt to limit liability prospectively as would occur, for example, if the lawyer incorporated such a limitation in a retainer agreement.
The rule expressly permits defense and settlement of a claim of malpractice. Defense necessarily implies a right to deny that malpractice has occurred, and a right to maintain that actions of the lawyer were legally correct, even if it seems obvious to others that he erred.
Enduring Ethics Opinion
Enduring Ethics Opinion #9 [April 2011 and February 2012]
Opinion #186. Screening of Non-Lawyer Staff to Avoid Conflict
Issued by the Professional Ethics Commission
Date Issued: July 22, 2004
Question
Pursuant to M. Bar R. 11(c)(1), Bar Counsel poses two questions to the Professional Ethics Commission, requesting an advisory opinion on each. First, can a lawyer use screening with respect to a non-lawyer assistant to avoid conflicts and as a means of fulfilling his or her duties under M. Bar R. 3.13(c)? Second, what does screening mean in this context?
Opinion
We illustrate the concept of screening through a hypothetical. Assume that Law Firm A hires a new secretary. The secretary previously worked for Law Firm B. While at Law Firm B, the secretary worked on matters for Client X. After the secretary joins Law Firm A, the firm is retained to represent Client Y in litigation against Client X. The secretary was privy to confidential information pertaining to Client X that is relevant to the pending litigation and that was acquired through the prior employment with Law Firm B. Can Law Firm A avoid a disqualifying conflict of interest under the Bar Rules through screening, i.e., by isolating the secretary from any involvement in the case and ensuring that none of the confidential information the secretary possesses gets imparted to the firm?
This question calls upon us to consider whether the imputed disqualification rules apply to conflicts of non-lawyer staff of a law firm. If these rules do apply on account of the secretary's knowledge, see M. Bar R. 3.4(b)(3)(i) and 3.4(d)(1)(ii), then Law Firm A would not be able to handle the case without the informed consent of Client X. If the imputed disqualification rules do not apply, then Law Firm A would be able to handle the case, but it would have to take steps to ensure that its lawyers and other staff members do not become privy to the secretarys knowledge.
This scenario represents a situation that is not at all uncommon in Maines legal community. Secretaries, paralegals and other non-legal staff members frequently leave one law firm and later work for another. A law firm must be sensitive to potential conflicts of interest when hiring non-legal staff members. Accordingly, the lawyer or law firm during the hiring process should make reasonable efforts to obtain information to determine whether there is a potential for conflicts and have systems and procedures in place to detect and manage conflicts after a new employee joins the firm. With this preface, we proceed to answer Bar counsels questions.
Screening Of Non-Lawyers Is Generally Permissible
We believe that screening of non-lawyer staff employed by a law firm is generally permissible under the Maine Bar Rules to avoid conflicts of interest presented by that staff, and it may be used to fulfill a lawyer's responsibilities under M. Bar R. 3.13(c), subject to certain qualifications discussed below. In reaching this conclusion, we start by examining the interplay between M. Bar R. 3.4(b)(3)(i) and M. Bar R. 3.4(d)(1)(ii) and M. Bar R. 3.13(c).
M. Bar R. 3.4(b)(3)(i), relating to imputed disqualification, states: Except as otherwise provided in these rules, if a lawyer is required to decline or withdraw from representation under these rules for reasons other than health, no partner or associate, and no lawyer affiliated with the lawyer or the lawyer's firm, may commence or continue such representation.
By its very terms, this imputed disqualification rule applies only to partners, associates and other affiliated lawyers of a "lawyer." Similarly, M. Bar R. 3.4(d)(1)(ii) states that when a lawyer becomes affiliated with a firm, the firm shall not accept employment adverse to a former client of the lawyer or the lawyers previous firm if the representation involves a former representation on which the lawyer personally worked or if the lawyer acquired confidences or secrets that are material to the representation. Neither rule refers to non-lawyers employed by a law firm.
M. Bar R. 3.13 was promulgated subsequent to the adoption of the above cited imputed disqualification rules. Bar Counsel's inquiry raises the question whether the wording of Rule 3.13(c)[1] implies that in order to "make reasonable efforts to ensure that a [non-lawyer assistant's] conduct is compatible with the professional obligations of the lawyer," the firm must impute unto itself "conflicts" or other disqualifying issues presented by non-lawyer staff.
We think not. First, we do not believe that reasonable efforts require such an imputed disqualification. There are other ways, such as through screening as discussed more fully below, by which the law firm can ensure that the non-lawyers conduct remains compatible with the professional obligations of a lawyer. Second, we believe that, in promulgating Rules 3.4(b)(3)(i) and 3.4(d)(1)(ii), the intent of the drafters was clear that the imputed disqualification rules applied only to lawyers. Third, we do not believe that, in adopting Rule 3.13, the drafters intended to change the way the imputed disqualification rules should work. Indeed, the Advisory Committee note to the rule states that Rule 3.13 "does not so much announce new principles as it serves to fill in areas of the Maine Bar Rules that are now left to the common sense of law firms and the Board of Overseers." In our experience, responsible law firms historically have effectively used screening to deal with conflict and related issues presented by nonlawyer staff. Finally, we note that Rule 3.13 was a verbatim adoption of ABA Model Rules 5.1, 5.2 and 5.3. We think it relevant that the comment to ABA Model Rule 1.10 (relating to imputation of conflicts of interest) specifically states that the imputed disqualification rule "does not prohibit representation by others in a law firm where the person prohibited from involvement in the matter is a nonlawyer, such as a paralegal or legal secretary." ABA Model Rule 1.10, comment 4.
Effective Screening
The next question is what should effective screening entail? How should a law firm deal with conflicts and similar disqualifying issues presented by non-lawyer staff? In answering this question, we find ABA Informal Opinion 88-1526 (1988) instructive. In that opinion, the ABA Committee on Ethics and Professional Responsibility considered the lawyer's obligations under Rule 5.3 with respect to the issue of screening. The Committee concluded that the measures utilized under Model Rule 5.3 should involve admonitions to non-lawyer assistants to be alert to all legal matters, including lawsuits, in which any client of the individual's former employer has an interest. The Committee advised that the non-lawyer should be cautioned: (1) not to disclose any information relating to the representation of a former employers client to the new employer; and (2) that the non-lawyer should not work on any matter on which he or she worked for a prior employer or respecting which he or she has information relating to the representation of the client of the former employer. In addition, when the new firm becomes aware of such matters, it must take reasonable steps to ensure that the non-lawyer employee takes no action and does no work in relation to matters on which that employee worked in the prior employment, absent informed consent from the former firms client.
The ABA Committee also recognized that there are limited circumstances that may require that a firm be disqualified or withdraw from representing a client when the firm employs a non-lawyer who formerly was employed by another firm. These circumstances are present either: (1) where information relating to the representation of an adverse party gained by the non-lawyer while employed in another firm has been revealed to lawyers or other personnel in the firm; or (2) where screening would be ineffective or the non-lawyer necessarily would be required to work on the other side of the same or substantially related matter on which the non-lawyer worked or with respect to which the non-lawyer has gained information in the context of former employment relating to the representation of the adverse party. In those circumstances, the firm must withdraw from representing the client, unless the client of the former employer consents to the continued representation of the person with adverse interests after being apprised of all the relevant factors.
We now discuss two hypothetical scenarios for illustration purposes. Scenario One: A secretary moves from Law Firm A to Law Firm B. While at Law Firm A, the secretary worked on a case for Client 1 against Client 2. Client 2 is represented by Law Firm B. Scenario Two: A firm paralegal is a member of the Board of a non-profit entity against which the paralegals law firm is now involved in litigation. How should the law firm deal with these two situations?
Screening means shielding the non-lawyer staff person from any personal participation in the matter and taking additional steps to avoid any violation by that person of a lawyers obligations under the Code of Professional Responsibility.[2] In Scenario One, the secretary should be shielded from any involvement in the case involving Clients 1 and 2, and should be instructed to avoid all discussion within Law Firm B about the case and about facts known concerning Client 1 in order to avoid inadvertent disclosure of Client 1s confidences and secrets and of Law Firm As work product. In Scenario Two, the paralegal should similarly be shielded from any involvement in or knowledge about the case, and should be instructed to abstain from any involvement in discussion or decision making in his or her capacity as a Board member of the non-profit entity with respect to issues related to the case. Other precautionary measures may also be necessary to avoid the risk that the personal interests of the paralegal or the paralegals obligations to the non-profit entity might in some way adversely affect the representation provided by the lawyer or firm or might otherwise cause harm to the client.
Footnotes
[1] Rule 3.13(c) states:
(c) Responsibilities Regarding Non-lawyer Assistants. With respect to a non-lawyer employed or retained by or associated with a lawyer:
(1) A partner in a law firm shall make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that the person's conduct is compatible with the professional obligations of the lawyer;
(2) A lawyer having direct supervisory authority over the non-lawyer shall make reasonable efforts to ensure that the person's conduct is compatible with the professional obligations of the lawyer; and
(3) A lawyer shall be responsible for conduct of such a person that would be a violation of the Code of Professional Responsibility if engaged in by a lawyer if:
(i) the lawyer orders or, with the knowledge of the specific conduct, ratifies the conduct involved; or
(ii) the lawyer is a partner in the law firm in which the person is employed, or has direct supervisory authority over the person, and knows of the conduct at a time when its consequences can be avoided or mitigated but fails to take reasonable remedial action.
[2] We also suggest that the Maine lawyer consider in each case whether disclosure of conflict-like nonlawyer assistant relationships should be made to the lawyers client. Rule 3.4(a)(1) requires disclosure prior to representation of any relationship or interest of the lawyer or of any partner, associate or affiliated lawyer, that might reasonably give rise to a conflict of interest and it requires continuing disclosure of any information that, in light of the circumstances arising after the commencement of representation, might reasonably give rise to such a conflict of interest. While the rule does not specifically mention disclosure of relationships or interests of non-lawyer staff, a cautious lawyer will be inclined to disclose those relationships and interests, as well as the screening methods to be used, if those relationships and interests would reasonably influence the client in the selection of the lawyer or would otherwise reasonably be of concern to the client.
Enduring Ethics Opinion
Enduring Ethics Opinion #186 [May 2019]
Opinion #10. Contingent Fee in a Divorce Property Settlement
Issued by the Professional Ethics Commission
Date Issued: April 2, 1980
Question
The Commission has been asked whether Rule 8(c) of the Maine Bar Rules prohibits in a divorce case a fee contingent upon the amount of the property settlement that a lawyer may obtain for his or her client.
Opinion
Rule 8(c) of the Maine Bar Rules, which is identical to former Rule 88(c) of the Maine Rules of Civil Procedure, provides in relevant part:
(c) Proceedings or Claims to Which Applicable. No contingent fee agreement shall be made . . . (2) in respect of the procuring of a divorce, annulment of marriage or legal separation. . . .
In their discussion of Rule 88(c) of the Maine Rules of Civil Procedure as it relates to these questions, the commentators state:
Almost universally such marital actions are thought not to be proper subjects for contingent fee arrangements on two public policy grounds: (1) Such an agreement would have the tendency to deter or prevent a reconciliation between husband and wife, contrary to public interest in preserving the marriage; and (2) such private agreement would interfere with the statutory responsibility of the court to fix alimony for the wife and support payments for the children in amounts appropriate for the needs and the husbands?s means, and to fix the attorneys? fees to be borne by the husband. 2 Field, McKusick & Wroth, Maine Civil Practice 362 (2d ed. 1970).
The Grievance Commission concludes that identical Rule 8(c) of the Maine Bar Rules prohibits a contingent fee in the situation posed in the question presented. A contingent fee is specifically prohibited in a divorce case by Maine Bar Rule 8(c)(2). Both of the policies set forth in Maine Civil Practice are involved even though the fee is tied to the amount of the property settlement. Moreover, in such cases, the attorney is confronted with the additional temptation to negotiate a settlement which maximizes the property aspects of the settlement upon which his fee is based at the possible expense of non‑monetary items such as visitation rights.
Enduring Ethics Opinion
Opinion #185. Lawyer's Retention of Closed Files in CD Format and Business Proposal for Scanning Other Law Firm's Closed Files to CD Format
Issued by the Professional Ethics Commission
Date Issued: April 1, 2004
Question
An attorney proposes to start a business storing legal files for other attorneys and law firms. The business plan is to scan documents onto CD format after culling the files for documents that have intrinsic value in their original version. The attorney asks two questions:
After originals of intrinsic value are culled and the remainder of the file scanned onto CDs, may the tangible file then be destroyed?
May non-attorney employees of the business, consistent with the Code of Professional Responsibility, perform such tasks for the business as scanning documents onto CD format, reviewing the CDs, and certifying the CDs as true records of the files?
Opinion
The first question is whether tangible documents in a file can be destroyed after certain originals are culled and kept and the remainder scanned onto an electronic format. The answer is a qualified ?yes?. The principles governing retention of records in an electronic, as opposed to a tangible format are outlined in Opinion #183 (1/28/04).
?[T]he attorney must be mindful that the obligation to the client may require the attorney to maintain the means to provide copies of those records in a format that will make them accessible to both the attorney and the client in the future.?
Assuming that the proposed file storage on CDs, or on any other electronic format, complies with Opinion #183, then the tangible file may be destroyed. [1]
The second question lists various tasks that the employees of the file storage business might perform and asks whether having non-attorney employees perform those tasks would compromise any ethical rules. Initially, the Commission notes that while the provisions of the Code are binding on all attorneys, including the attorney proposing to operate the file storage business, primary responsibility for file maintenance and disposition lies with the attorney employed by the client, not with the attorney operating the storage business. See, e.g., Opinion #74, supra, and Opinion #143 (7/26/94). In fact, for this purpose, it matters little that the file storage business itself is owned and/or operated by an attorney.
What does matter is that the file storage business will be retained by attorneys or law firms to accomplish tasks that are part of the attorney?s or firm?s practice of law. Attorneys frequently contract with outside businesses in the course of rendering legal services, such as copying or printing firms. Rule 3.13(c) describes an attorney?s responsibilities for non-lawyer assistants, while Rule 3.6(h)(2) requires lawyers to use reasonable care to prevent ?others whose services are utilized by the lawyer from improperly disclosing or using confidences or secrets of a client.? All attorneys should have a plan for storage and/or disposition of files. See Opinion #143. Whether that plan involves storage at the attorney?s office or the hiring of a business to scan files and store them in CD format, the attorney who generated the files remains responsible for them and for compliance with the ethical rules relating thereto.
The question that gave rise to this opinion, however, was asked by the attorney proposing to operate the electronic file storage business. That attorney?s ethical obligations would depend largely on the way the business is structured. The tasks generally involved in the storage of legal files are ?law-related services,? defined in Rule 3.2(h)(2) as:
?services that might reasonably be performed in conjunction with and in substance are related to the provision of legal service, and that are not prohibited as unauthorized practice of law when provided by a nonlawyer.?
Hence, under Rule 3.2(h)(1), the attorney operating the file storage business would be subject to the Code of Professional Responsibility with respect to those services if the file storage business were not conducted in circumstances ?distinct from the lawyer?s provision of legal services to clients? with appropriate measures assuring those contracting with the business that ?the services of the separate entity are not legal services.?
The inquiring attorney indicated that he or she might review the files intended for storage. Culling records to determine which tangible documents may be destroyed and which must be kept requires legal judgment and would be a legal service sub-contracted by the original attorney for the original client. If the attorney operating the business performs these tasks, then the Code of Professional Responsibility will clearly govern the rendering of that service. Furthermore, general access to confidential client information by the attorney or by his or her staff implicates Rules 3.4(c) and 3.4(d) and hence would impact on the attorney?s acceptance of other employment. Since the culling of records is a legal service rather than a ?law-related service,? the Code will govern whether or not the file storage business is distinct from the attorney?s regular legal practice.
In conclusion, there is no ethical bar to file retention in an electronic format or to subcontracting the tasks associated with file storage and disposition, provided those functions are performed in accordance with the principles noted above. The attorney who generates the file remains primarily responsible for storage and disposition. The Code of Professional Responsibility governs an attorney operating a file storage business if he or she performs any legal services in connection with the business or if the business is not operated as a separate and distinct entity from the attorney?s legal practice.
Footnote
[1] Of course, original documents may not be destroyed ?if there is a reasonable possibility that they may be needed in the future.? Opinion #74 (10/1/86). This would include such executed documents as wills, contracts, and promissory notes, and other documents with intrinsic value in their original form.
Enduring Ethics Opinion
Opinion #184. Lawyer's Referral of Clients to an Investment Advisor in Exchange for Referral Fees
Issued by the Professional Ethics Commission
Date Issued: March 30, 2004
Question
The Commission has been asked whether it would be a violation of the Maine Bar Rules for a lawyer to receive compensation from an independent investment advisory firm ("investment advisor"), in which the lawyer has no other interest or involvement, in exchange for the lawyer's referring clients to the advisor for investment management services.
The inquiring lawyer has provided the Commission with a copy of the proposed contract by which the investment advisor proposes to enter into this arrangement with the lawyer. The contract provides that the lawyer would be an independent contractor of the advisor, with the only service provided by the lawyer to be the referral of the lawyers clients business to the advisor.
The proposed contract contemplates that the investment advisor would continue to make cash payments to the lawyer for as long as the clients assets remain under the management of the advisor. Initially, the fee paid to the lawyer, in exchange for referring a client for the advisors services, would be calculated based upon the value of the referred clients assets managed by the advisor. Future compensation would be adjusted for any contributions or withdrawals by the client of funds placed with the advisor as well as any appreciation or depreciation in the value of the clients assets under the advisors management. The client would not be paying larger management fees to the investment advisor than if the lawyer had not been involved in making the referral. In other words, the lawyer making the referral would receive a portion of the investment advisors usual management fees, based upon the value of the principal of the clients account as calculated over time. At the time of making the referral, using the investment advisors forms for this purpose, the lawyer would make written disclosure to the client concerning this arrangement.
Opinion
The Commission believes that this arrangement would violate the Code of Professional Responsibility in at least two respects. First, the arrangement would violate Maine Bar Rule 3.4(f)(2), which prohibits a lawyer from acquiring a pecuniary interest adverse to a client unless, among other requirements, the terms are fair and reasonable to the client. Second, the arrangement would violate Maine Bar Rule 3.3(a), which prohibits a lawyer from entering into an agreement for, charging or collecting an excessive fee.
Not Fair or Reasonable to the Client
Of most direct bearing on this question is Maine Bar Rule 3.4(f)(2)(i), which provides, in pertinent part, as follows:
A lawyer shall not knowingly acquire a property or pecuniary interest adverse to the client ..., unless:
(A) The transaction and terms in which the lawyer acquires the interest are fair and reasonable to the client and are fully disclosed to the client in manner and terms which should have reasonably been understood by the client.
The Commission finds that the referral fee at issue here is inherently unfair and unreasonable to the client.[1] The singular purpose and design of this arrangement is to influence the lawyer to make recommendations to the lawyers client for the benefit of an investment advisor who is paying the lawyer to do so, in stark contrast to the lawyers being motivated by the best interests of the client. This arrangement is so adverse to the fiduciary relationship that is the foundation of the lawyers responsibility to the client, that the Commission finds it to be fundamentally and objectively unfair and unreasonable to the client, and therefore in violation of the Bar Rule.[2]
Excessive fee
Maine Bar Rule 3.3(a) provides that a lawyer shall not enter into an agreement for, charge or collect an illegal or excessive fee. The Rule defines a fee as excessive when, after a review of the facts, a lawyer of ordinary prudence would be left with the definite and firm conviction that the fee is in excess of a reasonable fee. Factors to be considered as guides in determining the reasonableness of a fee include, among others, the time and labor involved, the skill requisite to perform the service, the fee customarily charged in the locality for similar services, and the responsibility assumed by the attorney.
In weighing these factors, the Commission believes the referral fee[3] contemplated by the proposed arrangement is plainly excessive. First, the arrangement provides for potentially significant compensation to be paid for essentially no time or effort on the part of the lawyer. Second, there is little or no skill or judgment exercised by the lawyer. Third, in our experience, fees for referrals of this sort are not customarily received by Maine lawyers, many of whom would consider this practice unprofessional. Finally, the lawyer in this situation assumes no responsibility for the consequences of the referral and undertakes no responsibility for the quality of the investment advisory services rendered. In sum, it is fair to say that the fee, which may aggregate a large sum over time, is unearned by any service the lawyer has performed or will perform in the future, at least insofar as the clients interests are concerned.
In coming to this determination, the Commission is mindful of the conflict among bar ethics commissions and similar bodies in other states that have struggled with this and related questions.[4] However, having evaluated the views of these other states, the Commission believes and that its conclusion is most consistent with both the letter and the intent of the Maine Bar Rules in upholding the integrity of the fiduciary relationship between lawyer and client.[5]
For these reasons, the Commission views the transaction described in the question presented to be in violation of the Bar Rules.
Footnotes
[1] The Commission does not reach the issue of whether the client can make informed consent to the lawyers relationship with the investment advisor under the factors set forth in Bar Rule 3.4(b)(2). The Commission believes that no amount of explanation by the lawyer and no amount of sophistication of the client can overcome the inherent unfairness and unreasonableness of this arrangement to the clients interests and the consequent undermining of the fiduciary relationship between lawyer and client.
[2] Also potentially implicated here is the general principle of Bar Rule 3.6(a) that A lawyer must employ reasonable care and skill and apply the lawyers best judgment in the performance of professional services. The contemplated arrangement raises serious questions about whether a lawyer being paid by an investment manager to solicit the clients business for the advisor is in circumvention of this rule as well.
[3] We view the referral fee in this case as received in connection with the delivery of legal services, and therefore subject to the Bar Rule covering excessive fees, even though it is paid by the investment advisor instead of the client. The referral would occur in connection with, and arise from, the attorney-client relationship and could not be reasonably distinguished, in the clients mind, from the provision of legal advice. See Maine Bar Rule 3.2(h). Maine Bar Rule 3.12(b) recognizes that legal fees may be paid by third parties, but, the lawyer must not allow the third party to direct or regulate the lawyers professional judgment.
[4] Compare: Opinion 682 (1996) of the New York Committee on Professional Ethics of the New York State Bar Association, to the effect that a lawyer may not accept a fee from an investment advisor for referring clients to the advisor, because, among other reasons, clients reasonably expect their lawyers to act as fiduciaries in rendering such advice, and the amount of compensation involved is not objectively determined by the transaction; Opinion 99-08 (1999) of the Ethics Advisory Panel of the Rhode Island Supreme Court, to the effect that a lawyer may not provide both legal services and investment services to a client when the lawyer has a financial interest in the clients investment decisions, but a lawyer may conduct an investment advisory business with a law client provided the lawyer informs the client of the potential conflicts of interest, advises the client to obtain independent counsel and otherwise complies with the lawyers obligation to assure fairness, client consent and confidentiality; Opinion 2000-1 (2000) of the Ohio Supreme Court Board of Commissioners on Grievances and Discipline, to the effect that a lawyer may not receive referral fees from a financial advisor to steer clients to the advisor for investment advice, citing an irreconcilable conflict of interest that cannot be cured by full disclosure because the lawyers participation in such a scheme would impair the lawyers professional independence and fiduciary duty to the client and also would amount to a prohibited business transaction between lawyer and client; Informal Opinion RI-317 (2000) of the Michigan State Bar Commission on Professional and Judicial Ethics, apparently reversing an earlier opinion (RI- 146 (1992)), determining that it is not inherently unethical for lawyers to profit from referring clients to an investment advisor, so long as the client gives informed written consent, but recognizing that this arrangement precludes the lawyer from giving legal advice to the client in the event that there arises a dispute with the investment advisor; Opinion 97-04 of the Illinois State Bar Association Committee on Professional Ethics (1998), to the effect that a lawyer cannot collect referral fees for sending clients to investment advisors unless the lawyer can overcome a presumption of undue influence over the client, showing that the transaction was fair and that the client had the opportunity to seek independent counsel after full disclosure; Opinion 1998-99/10 of the New Hampshire Bar Association Ethics Commission (2000), in which that Commission deadlocked concerning the issue, with the advice being that a lawyer who wishes to engage in this practice should give serious thought to whether the lawyers independent judgment to the client would be compromised; Opinion 98-09 (1998) of the Committee on Rules of Professional Conduct of the State Bar of Arizona, to the effect that a lawyer may not engage in this practice since it may interfere with the clients ability to be candid with the lawyer, may affect the lawyers independent professional judgment, and, if the client becomes an adversary of the investment advisor, may place the lawyer in an impossible conflict; Opinion 97-16 (1997) of the Committee on Professional Ethics of the Connecticut Bar Association, to the effect that a lawyer may accept such an investment referral fee if the client gives informed, written consent; Joint Formal Opinion 2000-100 (2000) of the Pennsylvania Bar Association Commission on Legal Ethics Professional Responsibility and the Philadelphia Bar Association Professional Guidance Committee, to the effect that a lawyer may accept such an investment referral fee so long as the lawyer takes great care to obtain valid client consent and the fee will not influence the lawyers judgment or otherwise impair the attorney-client relationship, recognizing that the preferred practice would be for the lawyer to pass on the referral fee to the client; Opinion 99-07 (1999) of the Utah State Bar Ethics Advisory Commission, to the effect it is not per se unethical for a lawyer to accept such an investment referral fee but that the lawyer has a heavy and very difficult burden to assure that the lawyer can maintain independence while taking a cut of the advisors compensation.
[5] Many of the opinions of the states that find this practice to be potentially ethical set forth conditions that this Commission finds to be so unrealistic as to fortify the conclusion that the correct course is to consider the practice per se unethical, as other states deciding the question have found. For example, the Utah ethics panel, while technically allowing the practice, has said that it would be very difficult for a lawyer to engage in it and still maintain the required independence, with the lawyer obligated to consider whether the client may later have concerns that the lawyer has not provided unbiased advice or that the lawyers loyalty to the client has not been compromised. Likewise, the Pennsylvania ethics panel, while technically allowing the practice, states a number of challenging factors that the lawyer must weigh in determining that the relationship with the client remains that of trust, including the sufficiency of the disclosure, the sophistication of the client, the independence of the advice and the reasonableness of the referral fee. The New Hampshire ethics panel, while deadlocking on this question, was able to articulate that the lawyer must at least consider whether the client has received a benefit from the lawyers referral recommendation, and whether there may arise an inherent compromise of loyalty that would influence the lawyers judgment. In sum, all of the panels that technically allow the practice have at the same time admonished that the lawyer must remain independently loyal to the best interests of the client, a prospect that this Commission considers to be essentially impossible under the circumstances presented.
Enduring Ethics Opinion
Enduring Ethics Opinion #184 [July 2019]
Opinion #11. Contingent Fee in Arrearage Cases
Issued by the Professional Ethics Commission
Date Issued: April 2, 1980
Question
Does Rule 8(c) of the Maine Bar Rules prohibit in a motion to enforce a divorce judgment a fee contingent upon the amount of alimony or child support in arrears which the lawyer obtains from his client?
Opinion
Rule 8(c) of the Maine Bar Rules, which is identical to former Rule 88(c) of the Maine Rules of Civil Procedure, provides that:
No contingent fee agreement shall be made . . . (2) in respect of the procuring of a divorce . . . or (3) in connection with any proceeding where the method of determination of attorneys? fees is otherwise expressly provided by statute or administrative regulations.
In 2 Field, McKusick & Wroth, Maine Civil Practice, 362 (2nd ed. 1970), it is stated that:
The specific language of the second exception in Rule 88(c) would not seem to go far enough to except post‑judgment motions for modification or enforcement of alimony, support or other provisions of a divorce judgment. On the other hand, at least the second policy disfavoring contingent fee agreements applies equally after judgment as before. Furthermore, the third exception of Rule 88(c) applies, at least so far as the wife?s counsel fees are concerned, because the statute (19 M.R.S.A. § 722) provides that the court may order the husband to pay the wife ?sufficient money for the prosecution or defense thereof,? including attorney?s fees.
Such fees paid to the wife?s attorney are ?reasonable fees? for services actually rendered, without any relation to any contingency or to any contingent fee understanding that the wife may have with the attorney. This is a situation ?when the method of determination of attorneys? fees is otherwise expressly provided by statute.?
The Commission is less certain than the authors of Maine Civil Practice as to the proper construction of 19 M.R.S.A. § 722.[1]
Since the answer to the question presented depends on the resolution of a question of law rather than the interpretation of the Maine Bar Rules, we decline to undertake it. Compare Op. #48 of the Maine Bar Association Ethics Committee issued 2/2/77 in which the same conclusion was reached. The Commission is of the opinion, however, that whatever the proper interpretation of section 722 may be, a lawyer would be well advised to disclose any contingent fee arrangement to the Court so that it is clear that the presiding justice had in mind this prospective income from the plaintiff in making an order that counsel fees be paid by the defendant.
Footnote
[1] The Commission believes that the preferred practice among all lawyers should certainly be to establish procedures that will enable them to recognize conflicts of interest, or potential conflicts, at the earliest possible stage of dealing with a prospective client, in order to avoid the type of problem that arose in the instant case. On the other hand, the Commission recognizes the practical difficulties lawyers face in this regard, particularly in the larger firms (some of which have more than one office location), and the need to obtain certain basic information from a client at the initial conference to avoid additional consultations and expense to the client.
Enduring Ethics Opinion
Opinion #183. Lawyer's Obligations Concerning the Manner Of Retention of Client and Law Office Records
Issued by the Professional Ethics Commission
Date Issued: January 28, 2004
Question
Is an attorney obligated to keep a paper copy of the attorney?s correspondence, if the attorney retains a copy of the correspondence in a computer or by other means of electronic storage?
Opinion
There is no provision of the Code of Professional Responsibility of the Maine Bar Rules that directly addresses the manner in which an attorney should retain records in connection with the representation of a client. Several provisions of the Code, however, when read together in connection with previous opinions of this Commission, provide the relevant framework for considering this question.
First, an attorney is obligated to ?take reasonable measures to keep the client informed on the status of the client?s affairs.? Rule 3.6(a).
Second, as part of his or her obligation to preserve a client?s property, an attorney must take steps to ?[m]aintain complete records of all . . . properties of a client coming into possession of the lawyer? and ?[d]eliver to the client, as requested by the client, . . . properties in possession of the lawyer which the client is entitled to receive.? Rule 3.6(e)(2)(iii) & (iv). [1]
Third, an attorney withdrawing from representation must ?take reasonable steps to avoid foreseeable prejudice to the rights of his client, including . . . delivering to the client all papers and property to which the client is entitled.? Rule. 3.5(a)(2).
In Opinion #74, we addressed a question posed by a law firm that wished to return ?closed client files on matters for which it is no longer providing services.? The firm asked whether it could return files in the absence of a client?s request for them and whether it could dispose of files of clients who did not take custody of their files. We answered those questions in the affirmative, identifying several principles that also are relevant to the instant inquiry. First, we recognized that the obligation of an attorney to safeguard a client?s property does not cease simply because the representation has ended. Second, we recognized that when a file is returned to a client in the absence of a request, the attorney is obligated to ensure that the client who receives the file is capable of understanding its importance and discerning what is valuable within it. Third, we recognized that an attorney unable to locate a client in order to return a file or obtain consent to its destruction must be careful not to destroy documents that might be valuable or useful in the future.
In Opinion #120, we addressed the question whether an attorney is obligated to undertake the expense of delivering a file to a client?s new counsel. We concluded that an attorney satisfies the obligation to deliver paper and property to a client if the attorney makes the file available for the client to pick up at the attorney?s office.
With these Rules and Opinions in mind, we answer the question posed with a qualified no.
While the specific steps that an attorney may take to discharge the obligation to communicate with clients during the course of representation may vary with the nature of the case and the needs of the client, the Code obligates an attorney to ensure that the client is aware of important correspondence and documents prepared or exchanged by the attorney on the client?s behalf. Similarly, the obligation of an attorney to safeguard, retain, and return property to the client requires that important correspondence and documents created by the attorney on the client?s behalf be retained in a way that insures that the client and the attorney are able to access these records in the future.
Whether an attorney chooses to discharge these duties by providing verbal or written summaries of correspondence, forwarding paper copies of correspondence to the client, providing electronic files, or by some combination of means, the goal of the effort is the same. The means by which the attorney informs the client and retains files must enable the attorney to discharge these duties and must consider the client?s access to technology and comfort with it, as well as the ability of the client to comprehend the nature of the information provided by the attorney.
If an attorney dispenses with the retention of paper files in favor of computerized records, the attorney must be mindful that the obligation to the client may require the attorney to maintain the means to provide copies of those records in a format that will make them accessible to both the attorney and the client in the future. Because the attorney is obligated to ensure that the client is able to make informed decisions regarding the disposition of the file and also must take care in destroying files to be sure that useful information is retained, an attorney will need to consider how new hardware or software will impact future access to old computerized records. Thus, for example, it may be necessary for an attorney to retain old versions of software in order to ensure that computerized records may be accessed or printed when requested by the client. Similarly, as part of the obligation to deliver files, an attorney may need to retain the means by which a client may review or print computerized records. While an attorney may satisfy these ethical obligations by providing paper copies of computerized records to the client, electronic file retention is also acceptable provided that the client will have meaningful access to the electronic file in the future. The attorney should consider whether the means by which computerized records are kept and stored might not be sufficiently universal at this time to allow that attorney, who retains only computer records, to discharge these obligations in the future simply by delivering to the client a disc with data stored on it.
Footnote
[1] Our Opinions uniformly have considered "files" maintained by the attorney in the course of representation of the client to be property of the client. See, e.g. Opinion #51 (issued 12/5/84); Opinion #74 (issued 10/1/86); Opinion #120 (issued 12/11/90); Opinion #143 (issued 7/26/94). We have never been asked, however, whether the Code requires that certain categories of documents be maintained as part of the file or whether all records maintained by the attorney as part of the file, including the attorney's notes and internal communications of an administrative nature, are property of the client. We note that this is an area upon which there is a wide divergence of opinion. See, e.g., Brian J. Slovut, Eliminating Conflict at the Termination of the Attorney-Client: A Proposed Standard Governing Property Rights in the Client's File, 76 Minn. L. Rev. 1483, 146 (1992) (discussing the two standards applied by courts and state ethics opinions; one that assigns ownership of the entire file to the client and the other that allows attorneys to retain ownership in their work-product). Because resolution of the instant question does not require that we answer these questions, we will not answer them now.
Enduring Ethics Opinion
Enduring Ethics Opinion #183 [October 2012]
Opinion #182. Real Estate Transactions Involving Title Insurance Companies Owned in Whole or Part by Attorneys
Issued by the Professional Ethics Commission
Date Issued: August 6, 2003
Questions
The Commission has had two inquiries premised on Opinion 179, issued July 18, 2002. In that opinion, the Commission addressed the question whether an attorney would violate the IOLTA provisions of the Code of Professional Responsibility by structuring and closing real estate transactions to receive escrowed funds in the name of a title company, which the attorney owns or in which he or she has a proprietary interest, with that attorney retaining the net interest generated by those funds. The Commission concluded that there would be no violation of the IOLTA provisions provided that the title company, a law-related service, was operated in compliance with Bar Rule 3.2(h). In its opinion, the Commission also rendered guidance on compliance with Bar Rule 3.2(h), including the ?reasonable measures? provision of Rule 3.2(h)(1)(ii), stating that in connection with real estate transaction services, the recipient of the law-related services could not also be a client of the lawyer or the lawyer?s firm in the real estate matter if adherence to the Code is not to be required. The Commission suggested that, in such a transaction, Bar Rule 3.2(h)(1)(i) mandates that the title company comply with the Code in providing law-related services.
The first new inquiry asks whether the Commission?s opinion should be understood to mean that a lawyer providing legal services to a client in a real estate transaction cannot ethically refer that client to the lawyer?s or law firm?s title insurance company. This inquiry also requests the Commission?s opinion on the adequacy of a form of disclosure concerning a proposed venture for a Maine title insurance agency.
The second inquiry asks the Commission to reconsider Opinion No. 179, postulating that the Commission erred in suggesting that an attorney can never provide legal services to a client who is obtaining title insurance from a separate entity in which the attorney has an ownership interest, without incurring the obligation to ensure that the separate entity complies with the Code. In other words, the Commission is asked to consider whether there is any circumstance in which a lawyer may make adequate disclosure to the client that services performed by the lawyer?s title company are not to be considered legal services entitled to the protections of the Code.
Opinion
As to the questions presented in the first inquiry, Opinion 179 does not say and should not be read to mean that a lawyer, who is providing legal services to a client in connection with a real estate transaction, is prohibited in the same transaction from referring the client to a title company owned by the lawyer or law firm. On this issue, the Opinion states only that, if the lawyer engages in this practice, then the Code, including the IOLTA requirements, apply to law-related services provided by the lawyer-owned title company. In these circumstances, in the Commission?s view, the lawyer?s mere disclosure to the client of what the lawyer describes as separate work of the title company does not suffice to adequately distinguish law-related services provided by the title company from the provision of legal services by the lawyer to the same client in the same transaction. However, as stated in Opinion 179, full disclosure would be effective in avoiding application of the Code to law-related services of a lawyer-owned title company where the lawyer is not simultaneously providing legal representation to the client.
Turning to the adequacy of the form of disclosure, while the disclosure appears to us to be reasonable on the surface, we decline to render an opinion on its adequacy in the absence of a full and complete understanding of all the relevant facts, including those bearing on the degree of sophistication of the recipient of the disclosure. Having declined to opine on the adequacy of the disclosure, we are compelled to comment on what the disclosure reveals about the corporate structure of the title company. We notice that the law firm?s inquiry discloses the fact that the title company at issue is a limited liability company (LLC), the members of which are a second LLC and a separate corporation. Although the disclosure fails to identify the separate corporation or its shareholders, it does state that a number of attorneys in the inquiring law firm are ?investors? in the LLC that is a member of the title company LLC. The disclosure further states that as the title company LLC accrues earnings, ?the owners of that company will share in those earnings on the basis of their respective ownership interests.? This raises a number of possible issues under Maine Bar Rule 3.12, designed to protect clients by insuring that lawyers act as independent professionals. When the Code of Professional Responsibility applies, Rule 3.12(d) could prohibit the corporate structure of the title company itself, if the LLC that is a member of the title company includes lawyer and non-lawyer members or if the corporate member of the title company LLC includes non-lawyer shareholders. In addition, Rule 3.12(a) would prohibit the lawyers in the LLC from sharing fees that derive from title work in situations covered by the Code with any non-lawyer shareholders of the corporation.
After also closely considering the question presented in the second inquiry, the Commission acknowledges that it might be theoretically possible for certain services or products of a lawyer-owned title company to be structured so as to be sufficiently distinct from legal services so that the Bar Rules would not apply to the service or product of title company. For example, where a lawyer-owned title company is merely selling a product like an insurance policy, for which the client pays a separate policy premium to the company, the Commission would view the sale of this product alone as distinct from the provision of legal representation in the same transaction. However, where the lawyer-owned title company is providing to the lawyer?s client in the same transaction a title opinion, deed or other legal documentation, then the Commission remains of the opinion that mere disclosure and consultation will not satisfy the requirements of the Rule and thus the work of the title company will be subject to the Code.
Enduring Ethics Opinion
Enduring Ethics Opinion #182 [July 2018]
Opinion #181. Lawyer Contacting Municipal Officials as Agent for Unionized Employees
Issued by the Professional Ethics Commission
Date Issued: January 14, 2003
Facts
The Grievance Commission has asked for an opinion based on the following facts. The Maine Municipal Public Employee Labor Relation Act, 26 M.R.S.A. §§ 961-974 [?the Act?], and a union?s collective bargaining agreement allow individual public employees to be represented in a grievance proceeding by a designated agent. Attorney A is such a designated agent. The Act also provides for an informal conciliation process, the purpose of which is to encourage the parties to mediate the employment dispute. Designated agents who are not attorneys typically will contact police chiefs, town managers, and other municipal officials directly concerning the scheduling and conduct of disciplinary meetings and hearings.
Attorney A knows that Attorney B represents a municipality with respect to a particular employee?s grievance proceeding and that Attorney B objects to Attorney A?s direct contact with town officials regarding the employee?s grievance proceeding.
Question
In the above factual setting, does Bar Rule 3.6(f) prohibit Attorney A from directly contacting municipal officials concerning the disputed matter without first obtaining Attorney B?s consent?
Opinion
Rule 3.6(f) governs an attorney?s communications with an adverse party, and provides, in pertinent part, as follows:
During the course of representation of a client, a lawyer shall not communicate or cause another to communicate on the subject of the representation with a party the lawyer knows to be represented by another lawyer in that matter unless the lawyer has the prior consent of the lawyer representing such other party or is authorized by law to do so.
In Opinion No. 94, this Commission addressed the scope and applicability of this Rule when the adverse party was a municipality. See Opinion No. 94, Maine Manual on Professional Responsibility 0-323 (2000). In that opinion, we concluded that Rule 3.6(j), the precursor to current Rule 3.6(f),?bar[s] contact between counsel representing a party opposed to the municipality in a litigated matter and those officials of the municipality who have the responsibility of making decisions on the litigation and matters directly related to it.? Id. at 0-327. We also concluded that the Rule ?bar[s] contact with those other officials, if any, who have the responsibility of communicating municipal policy and decisions to its attorney, receiving the attorney?s advice in the first instance, and directing the work of the municipality?s staff in preparing for litigation.?
We do not see any material difference between the factual situation in Opinion No. 94, which involved a matter being litigated in court, and the situation posed by this question, which involves a contested grievance proceeding. In each instance, there is a discrete dispute for which both the employer and the employee are represented, and an attorney has not consented to opposing counsel?s communications with the former?s clients. Assuming, as we do, that the municipal officials whom Attorney A would contact are those with sufficient levels of responsibility that they could not be directly contacted under the standard set forth in Opinion No. 94, in the absence of the Act we would therefore find no basis for the Rule?s permitting Attorney A to engage in such contacts in this case.
This leaves the question whether the ?designated agent? provisions of the Act nevertheless dictate a different result.[1] Two possible arguments to this effect occur to us.
First, one might argue that the Act has the effect of rendering the lawyer?s conduct as something other than representation of a client by a lawyer. Because Rule 3.6(f) applies ?[d]uring the course of representation of a client,? if Attorney A is not representing the employee or the union, then the prohibition of the Rule does not apply. The simple answer to this argument is that, even on the face of the Act itself, Lawyer A is representing the employee or the union. The Act refers to ?designated agents? as ?bargaining agents,? and defines such individuals as ?any lawful organization, association or individual representative of such organization or association which has as its primary purpose the representation of employees in their employment relations with employers.? 26 M.R.S.A. § 962(2). Whenever a lawyer engages in the ?representation? of an individual or other legal entity, that individual or entity becomes a client of the lawyer, even if a non-lawyer is permitted to engage in the same sort of representation. In Opinion No. 79, we stated that the ?practice of law? has typically been interpreted as including services in fact performed by lawyers, even though non-lawyers may perform the same services.[2] See Opinion No. 79, Maine Manual on Professional Responsibility O-279, at O-280 (2000).
Second, one might argue that the Act authorizes the direct contact. Rule 3.6(f) allows communications by a lawyer with parties represented by counsel if such contact is ?authorized by law.? Thus, for example, a lawyer may cause a person to serve a subpoena, or other process, directly on an opposing party represented by counsel because the law requires that process must be served directly. Here, however, while we recognize that the Act may permit certain conduct in order to achieve speedy conciliation, see, e.g., 26 M.R.S.A. § 965(e), nothing in the Act requires, or otherwise authorizes, direct contact with the municipal official for these purposes. Without more specific direction in the Act, or in some other statute, the contact of high-level municipal employees by Attorney A without Attorney B?s permission would violate Rule 3.6(f).[3]
In reaching this conclusion, we are conscious of the fact that prohibiting a lawyer from performing work that a non-lawyer could perform in the same circumstances might be considered as placing the lawyer at some disadvantage. When a client hires a lawyer, however, the client and others involved in the engagement justifiably expect that the lawyer will act in strict accordance with the Bar Rules. No less should be expected in the factual setting of this Opinion.
Footnotes
[1] Although it is not within the jurisdiction of the Professional Ethics Commission to interpret Maine statutes, we may assume an interpretation of the Act for purposes of addressing the ethics question. See Opinion No. 47, Maine Manual on Professional Responsibility 0-171 (2000).
[2] In Opinion No. 79, we also referenced the following explanation contained in ABA Formal Opinion 297:
[When] a person becomes a lawyer he takes on a mantle that he cannot thereafter take on or off as he pleases. Conduct in which he engages which involves the practice of law when engaged in by lawyers must be in accordance with the ethical standards of the profession if he is to retain his professional status. Even though a particular activity may be open to a layman, if such activity is the practice of law when engaged in by a lawyer, one who is a lawyer cannot free himself of the ethical restraints of the profession in carrying on such activity merely by announcing he is to be regarded as a layman for this particular purpose.
See Opinion No. 79, Maine Manual on Professional Responsibility 0-279, at 0-280 (2000).
[3] We note, without necessarily endorsing its views, that the ABA Standing Committee on Ethics and Professional Responsibility addressed the question whether certain communications by a private citizen?s attorney with government officials may be ?authorized by law? because the communication itself would be construed as the exercise of the citizen?s constitutional right to petition the government. See A.B.A. Formal 45 Opinion 97-408 (Aug. 2, 1997), reprinted in ABA/BNA Lawyer?s Manual on Professional Conduct (1997 ed.) 39. That Committee has opined that Model Rule 4.2, identical to our Rule 3.6(f), permits communications with government officials with authority to take or recommend action in a matter, provided that the sole purpose of the communication is to address a policy issue. Id. 39. On the facts of this case, we have no basis to believe that Attorney A?s purpose, no less her sole purpose, in communicating with officials of the municipality represented by another lawyer would be to address a policy issue, rather than the specific facts regarding the employee?s grievance.
Enduring Ethics Opinion
Opinion #180. Lawyer as Salaried Employee of Private Non-Profit Corporation
Issued by the Professional Ethics Commission
Date Issued: November 14, 2002
Question
The Commission has been asked whether it would be a violation of the Maine Bar Rules for a lawyer to represent bankruptcy clients as a salaried employee of a private, non-profit corporation (which is not a law firm), whose business it is to provide credit counseling services and arrange debt repayment plans for these clients. Under the proposed arrangement, the corporation?s credit counselors would refer clients that they consider appropriate candidates for bankruptcy to the corporation?s staff attorney. These selected clients would pay fees to the corporation in exchange for bankruptcy legal services provided by the staff attorney. These fees would be held in an IOLTA account until ?earned,? at which time they would be transferred to the corporation?s general account. The corporation, its officers and directors (who are not lawyers), together with its staff attorney, would all be covered by a legal malpractice liability insurance policy paid for by the corporation. The corporation is funded in part by creditors of its credit-counseling clients.
Opinion
The Commission is of the opinion that this arrangement would violate the Bar Rules. First, Bar Rule 3.2(a)(2) provides that ?a lawyer shall not aid any person, association or corporation in the unauthorized practice of law.? Here, the corporation, which is not a law firm, would be paid fees to provide its clients with legal services. The corporation effectively acknowledges as much in undertaking to acquire legal malpractice liability insurance to protect itself, its officers and directors, who are not lawyers. The Commission believes that this proposed arrangement would result in the lawyer supporting the corporation in the unauthorized practice of law.
To the same effect, Bar Rule 3.12(a) provides that, subject to exceptions not relevant here, ?a lawyer or law firm shall not share legal fees with a non-lawyer.? Here, the corporation, which is not a law firm, would be paid fees by its clients in exchange for which legal representation would be provided by its salaried lawyer. Applying this Bar Rule to these facts, the Commission believes that there is little, if any, substantive difference between a lawyer sharing fees with a non-lawyer and, as here, a lawyer being paid a salary by a non-lawyer in order to provide legal representation to fee-paying clients of the non-lawyer.
The Commission further believes that the proposed arrangement would very likely result in a violation of Bar Rule 3.12(b). This Rule, in pertinent part, prohibits a lawyer from being employed by a non-lawyer who directs or regulates the lawyer?s professional judgment in rendering legal services to another person.[1] Whatever measures the corporation may put in place to minimize its control over its staff lawyer, the nature of the employer-employee relationship in this factual setting would make it very difficult, if not impossible, to practicably avoid violation of this rule.
Finally, the Commission makes note of the further difficulties that this arrangement would likely create for the lawyer in complying with conflict of interest rules. The pertinent portion of Maine Bar Rule 3.4(b)(1) provides that a conflict of interest occurs ?if there is a substantial risk that the lawyer?s representation of one client would be materially and adversely affected by the lawyer?s duties to?a third person ?? The prospect of a conflict of interest looms large in the work undertaken by the lawyer in this situation, since the lawyer owes a duty to represent the interests of the bankruptcy clients and simultaneously owes a duty to uphold the potentially different interests of the corporation that is the employer.
The Commission has received and reviewed letters and other written materials supplementing the opinion request. Some of these materials suggest approaches that the corporation and its lawyer would take in order to minimize the effects of the deviations from the Bar Rules noted here, while some offer what may be legitimate public policy reasons supporting different conclusions. However, these materials do not persuade the Commission that the type of practice contemplated here is permitted under the Bar Rules as written.
In sum, the Commission is of the opinion that the Bar Rules would be violated if the lawyer undertakes legal representation of the corporation?s clients in this factual setting.
Footnote
[1] In pertinent part, Bar Rule 3.12(b) reads as follows: ?A person who recommends, employs or pays a lawyer to render legal services for another shall not be permitted by the lawyer to direct or regulate the lawyer?s professional judgment in rendering such legal services unless direction or regulation occurs in the course of supervision by another lawyer who participates in the attorney-client relationship with the supervised lawyer.?
Enduring Ethics Opinion
Opinion #179. Lawyer Providing Title Insurance Law-Related Services
Issued by the Professional Ethics Commission
Date Issued: July 18, 2002
Question
Does an attorney violate Maine Bar Rule 3.6(e)(1)(4),(5) or any other Bar Rule, by structuring and closing real estate transactions to receive escrowed funds in the name of a title company ? which the attorney owns or has a proprietary interest in ? with that attorney retaining the net interest so generated and not following the IOLTA provisions of that Rule?
Opinion
A title company in the situation described in the question falls within the definition of a law-related service as provided for in Maine Bar Rule 3.2(h)(2). See Advisory Committee Note on February 15, 1997 Amendment to Rule 3.2(h), 1 Maine Manual On Professional Responsibility (2002) at 3-53. A lawyer who provides law-related services is exempt from the Code of Professional Responsibility, only if the lawyer takes steps sufficiently to distinguish the lawyer?s legal practice from his or her provision of law-related services. Although Rule 3.2(h)(1) is written so as to subject the lawyer to the Code of Professional Responsibility if the lawyer fails to take certain steps to sufficiently distinguish his or her practice from the provision of law-related services, by inverse implication, Rule 3.2(h)(1) offers an exclusion from the requirements of the Code of Professional Responsibility for a lawyer?s activities in connection with the ownership and operation of a title company as a law-related service if the title company is constituted and operated in accordance, and the lawyer complies, with Rule 3.2(h)(1)(i) or (ii).[1]
Maine Bar Rule 3.2(h) provides as follows:
A lawyer shall be subject to the Code of Professional Responsibility with respect to the provisions of law-related services, as defined in paragraph (2), if the law-related services are provided:
i) by the lawyer in circumstances that are not distinct from the lawyer?s provision of legal services to clients; or
ii) by a separate entity controlled by the lawyer individually or with others if the lawyer fails to take reasonable measures to assure that a person obtaining the law-related services knows that the services of the separate entity are not legal services and that the protections of the client-lawyer relationship do not exist.
(2) The term ?law-related services? denotes services that might reasonably be performed in conjunction with and in substance are related to the provision of legal services, and that are not prohibited as the unauthorized practice of law when provided by a non-lawyer.
The IOLTA provisions of Rule 3.6(e), by their express terms, apply only to ?funds of clients paid to a lawyer or law firm?? Under the question presented, provided that the funds are separately paid to and held by the title company and not the attorney or law firm, and provided that the provisions of Rule 3.2(h) are complied with, there would be no violation of Rule 3.6(e).
Having noted that when a title company is constituted and operated in accordance with, and the lawyer complies with, the provisions of Rule 3.2(h) the Code of Professional Responsibility provisions of the Bar Rules do not apply, we think it appropriate to give some guidance concerning compliance with Rule 3.2(h).
We note at the outset that we believe it would be very difficult for an attorney to provide title company services in a setting that is ?distinct from the lawyer?s provision of legal services,? Bar Rule 3.2(h)(1)(i), without establishing a separate entity. Although we do not by our opinion today indicate that such a practice automatically would subject a lawyer to the Code of Professional Responsibility, it does not seem likely to us that a lawyer could have such an arrangement, which would be sufficiently distinct so as to prevent the confusion the Rule seeks to avoid.
In the event a lawyer establishes a separate entity pursuant to section (ii) of Rule 3.2(h)(1), there are several minimum requirements we think a lawyer must observe in order to meet the ?reasonable measures? standard set forth in the Rule and thus comply with the provisions of this section. First, the recipient of the law-related services cannot also be a client of the lawyer or the law firm the lawyer is associated with in the title transaction at issue. Similarly, the lawyer or the law firm cannot also provide legal services in the transaction to any recipient of the law-related services. We reach this conclusion because of the nature of the law-related services at issue ? title insurance company services ? that by their nature are closely entwined with any legal service in the matter the lawyer might also provide to the recipient.
The ABA comment to Model Rule 5.7 from which the Maine Rule was adapted discusses this very issue:
Regardless of the sophistication of potential recipients of law-related services, a lawyer should take special care to keep separate the provision of law-related and legal services in order to minimize the risk that the recipient will assume that the law-related services are legal services. This risk of such confusion is especially acute when the lawyer renders both types of services with respect to the same matter. Under some circumstances the legal and law-related services may be so closely entwined that they cannot be distinguished from each other, and the requirement of disclosure and consultation imposed by?the Rule cannot be met. In such a case a lawyer will be responsible for assuring that both the lawyer?s conduct and, to the extent required by Rule 5.3, that of nonlawyer employees in the distinct entity which the lawyer controls complies in all respects with the Rules of Professional Conduct.
Further, we believe that a meaningful notice must be given to inform the recipient of the title insurance service that the lawyer or firm is not acting as an attorney for them, is not providing legal services, and the protections of the client-lawyer privilege do not exist in connection with this service. In these circumstances, the burden is upon the lawyer to give a notice that is understandable to the recipient so as to be informed.
The ABA comment to Model Rule 5.7 provides further guidance on taking reasonable measures. It states:
In taking the reasonable measures?to assure that a person using law-related services understands the practical effect or significance of the inapplicability of the Rules of Professional Conduct, the lawyer should communicate to the person receiving the law-related services, in a manner sufficient to assure that the person understands the significance of the fact, that the relationship of the person to the business entity will not be a client-lawyer relationship. The communication should be made before entering into an agreement for provision of or providing law-related services, and preferably should be in writing.
The burden is upon the lawyer to show that the lawyer has taken reasonable measures under the circumstances to communicate the desired understanding. For instance, a sophisticated user of law-related services, such as a publicly held corporation, may require a lesser explanation than someone unaccustomed to making distinctions between legal services and law-related services, such as an individual seeking tax advice from a lawyer-accountant or investigative services in connection with a lawsuit.
In conclusion, we opine that, if a lawyer in a title insurance law-related service circumstance complies with the foregoing standards then the Code of Professional Responsibility provisions of the Maine Bar Rules, including the IOLTA provisions, do not apply. We specifically limit our opinion to title insurance law-related services, and decline to expand this analysis to other law-related services at this time preferring rather to address those circumstances as the need arises.
Footnote
[1] We note that the Code of Professional Responsibility is only a portion of the Maine Bar Rules and accordingly, the remaining provisions of the Bar Rules apply to the lawyer regardless of compliance with Rule 3.2(h).
Enduring Ethics Opinion
Enduring Ethics Opinion #179 [December 2013]
Opinion #178. Disbarred or Suspended Lawyer Selling Practice to Another Firm or Lawyer
Issued by the Professional Ethics Commission
Date Issued: March 8, 2002
Question
Bar counsel has forwarded the following question to the Commission. May a disbarred or suspended attorney sell her or his practice to another attorney?
Opinion
The Commission finds nothing in the Bar Rules that would prohibit a disbarred or suspended attorney from selling that attorney?s legal practice to an attorney licensed to practice in Maine. While there are a number of provisions of the Bar Rules that impose requirements with respect to the sale of a legal practice, as well as other provisions of the Rules that impose requirements with respect to actions taken by attorneys disbarred or suspended from practice, none of these Rules impose a prohibition on the sale of such a practice.
Bar Rule 3.14 provides in pertinent part as follows:
A lawyer or law firm may sell or purchase a law practice, including goodwill, if the selling attorney or each attorney in the selling firm has retired, become disabled or has died; or the selling attorney or each attorney in the selling firm has ceased to engage in the private practice of law in the State of Maine.
Drawing from the above language of Bar Rule 3.14, a disbarred or suspended attorney ?has ceased to engage in the private practice of law.? Therefore, acting pursuant to this Rule, such an attorney may sell her or his practice to another licensed attorney, subject to other applicable Bar Rules.
The Commission makes note that Bar Rule 7.3 specifies actions that must be taken by a disbarred or suspended attorney to wind up the practice of law. Among the requirements of this Rule, such an attorney is required to notify each client of the disbarment or suspension and the attorney?s consequent inability to act as an attorney. Bar Rule 7.3(i)(1)(B)(i). In addition, such an attorney is required to advise each client promptly to substitute another attorney or attorneys or to seek legal advice elsewhere. Bar Rule 7.3(i)(1)(B)(iii). In complying with this Rule, a disbarred or suspended attorney, who is selling her or his practice, should take care to notify all clients of their right to appoint a new attorney of their own choosing.
While these provisions impose requirements pertinent to the question presented, the Rules do not create an outright prohibition of a proposed sale of a legal practice under these circumstances.
Enduring Ethics Opinion
Opinion #177. Advancing Litigation Costs Through Lines of Credit
Issued by the Professional Ethics Commission
Date Issued: December 14, 2001
Facts and Question
An attorney has requested an opinion on whether it is ethically permissible under the Bar rules to advance litigation costs through the use of a bank line of credit, passing interest and other costs of financing onto the client. The attorney has provided written material suggesting two alternative ways for financing litigation costs. Each would allow for interest to be tracked to individual cases. The first involves the use of separate credit lines for individual cases. The second involves the use of a single line of credit for more than one case, with the financing institution tracking each draw to an individual case and separately calculating interest on each draw so that interest can also be tracked to individual cases.[1]
Opinion
In the view of the Professional Ethics Commission, it is permissible under the Bar Rules for an attorney to finance litigation costs, and pass the interest and other costs of financing onto the client, under certain conditions. The attorney?s inquiry calls into question Maine Bar Rule 3.7(d), which provides:
*Financial assistance.* While representing a client in connection with contemplated or pending litigation, a lawyer may not advance or guarantee financial assistance to the client, except that a lawyer may advance or guarantee the expenses of litigation, including court costs, expense of investigation, expenses of medical examination, and expenses of obtaining and presenting evidence.
This rule unambiguously permits a lawyer to advance funds on behalf of a client for litigation expenses. The question then becomes: If a lawyer arranges for financing of those client advances, can the lawyer?s costs associated with the financing be charged to the client?2 When the costs and interest associated with financing litigation expenses can be directly linked to a specific case, the Commission sees no basis in the Bar Rules for requiring the lawyer to absorb those costs. Several other jurisdictions have reached a similar conclusion. See e.g.Ariz. St. Bar Comm. On the Rules of Prof. Conduct, Op. 2001-07, (9/2001); Ohio Opinion 2001-3 (6/7/2001); Chittenden v. State Farm Mut. Auto. Ins. Co. La. Sup. Ct, 2000-C-414 (5/15/2001).
The Commission has previously opined about several financing arrangements involving lawyers and clients. In Opinion 138, the Commission concluded that Rule 3.3(b), allowing lawyers to accept payment by credit card, would permit other client financing arrangements for legal fees, provided certain safeguards were maintained. In Opinion 144, the Commission determined that a lawyer could, without violating the bar rules, insure the payment of legal fees through a promissory note secured by client property unrelated to the representation, provided certain safeguards were maintained. In Opinion 152, the Commission advised that it would be permissible for a lawyer to enter into a financing arrangement with a third-party financial institution with a security interest in accounts receivables from legal services, again provided certain safeguards were maintained.
These opinions suggest that certain measures are necessary to assure that the financing arrangement does not result in the violation of the lawyer?s obligations to the client. For example, to avoid a potentially excessive fee prohibited by Rule 3.3(a), the terms for the loan including costs and rate of interest should be reasonable. Further, the requirements of Rule 3.4(f)(2)(i), concerning the lawyer?s obligations to avoid acquiring an interest adverse to a client, guide ME. MAN. ON PROF. RESP. (2002) many of the other necessary safeguards. The lawyer should not profit from the financing arrangement, but should simply pass through to the client the expenses attributable to financing the litigation costs, like any other disbursement. The terms of the fee arrangement, identifying the litigation expenses including the financing arrangement and its terms, should be clearly explained to permit the client to make an informed decision.
In order to comply with Rule 3.6(h)(1), the security agreement for the financing must not require the lawyer to disclose client confidences or secrets without the client?s informed written consent. In addition, the prohibition of Rule 3.7(c) against a lawyer acquiring a proprietary interest in the subject matter of litigation would require that the lawyer not attempt to obtain any interest in the client?s settlement or judgment to secure the lawyer?s obligation to repay the financing institution. See also Opinion #144.
In light of the foregoing considerations, the Commission concludes that it is reasonable for a lawyer to charge financing expenses to the client as a cost of litigation so long as the following safeguards are maintained.
First, the financing arrangement must have the informed consent of the client. At a minimum, the client should be advised of how and when the attorney will finance advances, the name of the lending institution, and the expected costs associated with financing, including rate of interest.
Second, in a contingent fee or limited representation case, the client?s responsibility for interest and other financing costs should be spelled out in the written contingent fee or limited representation agreement.
Third, the attorney must use a financing arrangement that accurately allocates interest and other financing costs to specific clients. The attorney should not use a single line of credit to finance advances on behalf of numerous clients and estimate how interest will be allocated among those clients.
Fourth, the attorney may not allow the financing institution to acquire any lien or other security interest in the client?s claim without the informed consent of the client. Moreover, whatever the nature of the financing arrangement, the client may not be deprived of his/her rights to challenge the amount of interest and other costs through fee arbitration as provided under Maine Bar Rule 9.3
Fifth, any interest or other financing costs passed onto the client must be reasonable.
Sixth, the lawyer may not disclose any client confidences or secrets to the financial institution without the informed written consent of the client.
Footnotes
[1] We understand that most banks will not take on the burden of tracking individual draws and interest to specific cases. The written material provided by the inquiring attorney, however, suggests that at least one relatively new bank specializes in providing such a line of credit.
[2] This opinion does not address the situation of a lawyer making interest bearing loans to a client for litigation expenses which may raise issues under consumer credit laws as well as other ethical concerns.
[3] Under no circumstances may the attorney acquire any security in the client?s claim to secure repayment beyond a lien granted by law as referenced in Maine Bar Rule 3.7(c).
Enduring Ethics Opinion
Opinion #12. Mortgage Loan Transactions
Issued by the Professional Ethics Commission
Date Issued: April 2, 1980
Question
Mortgage financing provides the occasion and the stimulus for most title examination in Maine. Typically, a prospective borrower (the owner of land to be mortgaged or the prospective buyer of the land) applies for a mortgage loan to buy the property or to build on it and is told that title must be certified.
In some cases the title opinion has been supplied by an attorney already representing the borrower in connection with the transaction or otherwise selected by the borrower without restriction. In other cases, before 9‑B M.R.S.A. § 439 recently became effective, the borrower chose from a list of attorneys approved by the lender, or the title was certified by counsel chosen by the bank. In all cases the cost of title examination has been and continues to be borne by the borrower, either directly or by reimbursing the bank. Section 439 of Title 9‑B, enacted by the First Session of the 109th Legislature, may have changed the rights of the parties to this transaction to choose an attorney, to be separately represented, or both. The relationship of bank, borrower, and attorney raises the following questions:
Who is the attorney?s client for purposes of the title search?
In light of 9‑B M.R.S.A. § 439, may an attorney chosen by the borrower to examine title stipulate that only the bank is the client; may the bank insist that the attorney represent only the bank; may the borrower insist that the attorney represent only the borrower?
May both borrower and lender be clients of the attorney without a disabling conflict of interest if the attorney?s only task is a title examination?
May both be clients of the attorney without a disabling conflict of interest if the attorney?s duties include preparation of documents: using forms supplied by the bank; prepared from scratch?
Does the attorney have a professional obligation to prevent unrepresented parties to a mortgage loan transaction from believing he or she is protecting their interests?
Opinion
- Before enactment of Section 439 of Title 9‑B, which will be considered below, the identity of the attorney?s client, for purposes of the title search and for other purposes, would have been settled by the parties, bank, borrower, and attorney. Neither the bank nor the borrower needs to be represented by counsel if it chooses not to be so represented. Aside from Section 439, the bank would have been at liberty to have a title examined, and to take any other precautions it saw fit in connection with a loan, using counsel of its choice or its own employees, or anyone it chose, to assist it for those purposes. It would also have been free to impose the cost of these precautions upon borrowers, either separately itemized or as a combined loan placement fee of some kind. Consequently, before enactment of Section 439, if an attorney accepted employment by a bank in connection with a mortgage loan, and it was the understanding of the parties that the attorney represented the bank and only the bank, that agreement would have identified the client for purposes of that transaction. The attorney could, however, have voluntarily assumed liability to the borrower for the accuracy of his title examination. Although this Commission does not pass on questions of law, we note that historically the liability of an attorney seems to have been limited to the client, in the absence of an additional undertaking [e.g., National Savings Bank v. Ward, 100 U.S. 195 (1878)], but in a few jurisdictions there has been a recent tendency to extend liability to other persons on a third party beneficiary theory or on the theory that injury to third parties is a foreseeable consequence of negligence (45 A.L.R. 3rd. 1181, 1195).
The identity of the client is not affected by the borrower?s payment of the fee for legal services in connection with a mortgage loan. This is obvious when the borrower merely reimburses the bank its cost of legal services. In that case, the bank pays the attorney and recovers its cost from the borrower. Even when the borrower pays the attorney directly, the agreement among the parties may still be that the attorney is rendering legal services to the bank, not to the borrower, and that the bank is the client. Rule 3.6(h) of the Maine Bar Rules acknowledges implicitly that an attorney may be paid by someone other than the client without changing the attorney‑client relationship.[1]
Enactment of Chapter 531 of Public Laws, 1979, complicated this scheme of things and may have altered the conclusions expressed above in ways that are not entirely clear. Ordinarily the Commission would not express its opinion on the interpretation of a statute. It has no authority to respond to questions of law. In the present situation, however, an adequate response to the questions posed is not possible without some comment on the possible effects of Chapter 531. This enactment added a Section 439 to Title 9‑B, M.R.S.A., providing as follows:
Every financial institution which accepts an application for a residential mortgage loan for one to 4 residential units and which requires that an attorney search the title of the subject real estate shall first permit the prospective mortgagor to select a qualified attorney of his own choice to search the title of the subject real estate, provided the financial institution may require the prospective mortgagor to provide it with adequate liability insurance or such other written policy requirements as the bank may deem necessary to protect its interests.
This statute raises the question who is the client of the attorney thus chosen, the borrower, the bank, or both. The language of the statute does not provide any satisfactory answers. If the client is, or may be, the bank, the statute seems to require that the borrower be allowed to choose the bank?s attorney, a result that is wholly incompatible with the normal consensual relationship between attorney and client.
If the client of the attorney chosen by the borrower is the borrower, the statute might, on the one hand, imply that the bank may not have title counsel in the transaction and must accept the opinion of the borrower?s counsel. Aside from Constitutional and other overriding legal issues, this would be a major change in the rights of the bank without benefit of the express language normally required to bring about such a result.
On the other hand, the statute might leave the bank free to obtain a separate opinion from its own counsel, and perhaps to charge the cost to the borrower. The statute does not expressly bar the bank from obtaining a separate opinion, and does not address the question of who pays the costs. This interpretation would, however, mean that the statute accomplished exactly nothing, since bank and borrower have always been free to make separate and duplicating arrangements for the legal services required in a mortgage loan transaction. Statutes are not normally given an interpretation that renders them utterly meaningless.
We think the most plausible interpretation of 9‑B M.R.S.A. § 439 is that the attorney chosen by the borrower represents both the bank and the borrower for purposes of the title examination and opinion. This interpretation is not free from difficulty, but it gives some meaning to the statute and produces a less bizarre result than denying the bank counsel altogether or having one party choose counsel who will represent only the other party. The statute says nothing about legal services other than the title examination and presumably does not affect the freedom of the bank and the borrower to make such arrangements as they wish for those other services. These may include an understanding that the attorney searching title also prepare documents but that in doing so he represents only the bank, or only the borrower, or both, subject to the conditions discussed in part 3 below.
In many cases the borrower may not accept the bank?s invitation to choose the attorney who will search title and may agree to using the bank?s attorney for the title search. The language of Section 439 seems to allow such a waiver by the borrower. In this case we see nothing in the statute that would preclude an understanding among the parties that the attorney searching title will represent only the bank. In part 5 below, we discuss the attorney?s obligation to insure that the borrower is aware of any limitations upon his representation.
- Assuming the validity of 9‑B M.R.S.A. § 439, it follows from what we have said that neither the attorney chosen by the borrower (pursuant to § 439) nor the bank may insist that the attorney represents only the bank for purposes of the title search. Section 439 seems to have the effect of requiring the bank to accept dual representation for this limited purpose. The attorney may, of course, decline employment, but he is not free to accept it and change the condition of dual representation apparently required by § 439. If the borrower declines to exercise the option given by Section 439 and agrees to a title search by the bank?s attorney, it would seem that either the bank or the attorney may insist that the attorney represent only the bank. The complications this scheme of things creates should be evident. In any case, the bank may insist that an attorney may take the position that employment to prepare documents will only be accepted upon the understanding that the only client is the bank, or the borrower.
Section 439 does not appear to be a restriction on the borrower. Consequently, we think the borrower may choose an attorney to search the title and insist that the attorney thus chosen represent only the borrower. This could amount to a waiver of the statute, leaving the bank free to choose its own attorney to search the title and demand reimbursement of the cost from the borrower.
- Both the borrower and the lender may be clients of the attorney at the same time without a disabling conflict of interest if, in the transaction in question, ?it is obvious that [the lawyer] . . . can adequately represent the interest of each and if each consents to the representation after full disclosure of the possible effect of such representation on the exercise of the lawyer?s independent professional judgment on behalf of each.?[2] This rule is substantially the same as DR 5‑105 (C) of the ABA Code of Professional Responsibility. According to the Reporter?s Notes to Maine Bar Rule 3.4(b):
The first condition of Rule 3.4(d) requires more than a judgment by the lawyer that he can perform adequately. It must be obvious that he can do so; and if his capability requires substantial explanation the condition cannot be met.
The adequate representation that must be obvious is not merely capable representation. It is representation in which the lawyer?s independent professional judgment in behalf of one client is not adversely affected by representation of another client. The counterweight to Rule 3.4(d) is Rule 3.4(c), which forbids multiple representation if the lawyer?s independent professional judgment is ?likely to be adversely affected.? We believe that Rule 3.4(c) refers to a likely effect at the time representation would be undertaken, in which case multiple representation is forbidden, while Rule 3.4(d) refers to a future possibility that the lawyer?s judgment could be affected, in which case multiple representation is possible if it is obvious that there is no present divergence of interest and if there is full disclosure of the future possibility and consent.
DR 5‑105 (c) of the ABA Code of Professional Responsibility was given a similar interpretation. Addressing DR 5‑105 (c), EC 5‑15 explained:
[T]here are many instances in which a lawyer may properly serve multiple clients having potentially differing interests in matters not involving litigation. If the interests vary only slightly, it is generally likely that the lawyer will not be subjected to an adverse influence and that he can retain his independent judgment on behalf of each client; and if the interests become differing, withdrawal is less likely to have a disruptive effect upon the causes of his clients.
The phrase ?differing interests? as used in EC 5‑15 means a difference such that representation of one client will adversely affect the exercise of the lawyer?s independent professional judgment in behalf of the other. (See the Definitions in the Code.) Whether it is obvious that adequate representation of each party is possible will necessarily depend on the circumstances of the transaction.
In a great many mortgage loan transactions it may be obvious that the interests of bank and borrower do not and probably will not differ as to any relevant aspect of the transaction and that the lawyer can adequately represent the interests of each. This is very likely to be the case when the attorney?s only task is a title examination, and in many instances, also when the attorney?s duties include preparation of closing documents. If the attorney?s only task is a title examination, bank and borrower may expect or agree that the title examination will include an explanation of all title problems, without regard to whether a particular problem has a material effect upon the bank?s security or could be accepted as a reasonable business risk for the bank. We see no reason why bank and borrower should not be able to consent to dual representation under these circumstances.
- Even if the attorney?s duties include preparation of loan documents, in nearly all residential mortgage transactions the note and mortgage will be prepared upon standard forms supplied by the bank. Although theoretically there is a possibility that the attorney might exact more favorable terms for the borrower if only the borrower were the client, this is seldom actually done. Given a reasonable explanation, the borrower should be capable of deciding whether to forego representation that includes an attempt to strip away the bank?s boilerplate.[3]
If the documents used to complete the transaction are to be prepared entirely by an attorney especially for that transaction, and particularly if the transaction is not the typical residential mortgage loan but a commercial loan, the situation could be quite different. In such cases, it may not be at all obvious that a lawyer can adequately represent the interests of both lender and borrower, and multiple employment consequently may be impossible. Of course, either borrower or bank may still choose to forego representation and accept documents prepared by counsel for the other. In all cases the attorney is obliged to make every effort to insure that each party knows who he or she represents.
Essentially the same considerations suggest that the attorney may be able to represent both the bank and borrower when the legal services include preparation of a deed. It is, however, doubtful that the seller could be added to the roster of clients in such circumstances. Representation of the seller introduces responsibilities that go beyond preparation of a deed and harbors the distinct possibility of conflict of interest in connection with the title examination.[4] At the same time, there is no reason why the deed need be prepared by an attorney representing the seller, even though the seller ultimately pays the cost of preparation of the deed.
The attorney-client relationship between borrower and attorney would not be altered by an agreement that the seller reimburse borrower the cost of having the deed prepared. Deed preparation may also be accomplished by the attorney for the bank, and the bank may look to the seller for reimbursement of its expenses, without altering the attorney-client relationship.
- In all of the cases discussed in this opinion, Rule 3.6(m) requires the attorney to ?take reasonable steps? to prevent unrepresented parties to a mortgage loan transaction from believing that the attorney represents their interests. Thus, an attorney preparing a note and mortgage, whose only client is the bank, must take reasonable steps to prevent the borrower from believing that the documents were prepared with a view to protecting the borrower?s interest, because paraphrasing the language of Rule 3.6(m), the lawyer knows or should know that these documents will be presented to the borrower. Similarly, an attorney representing the buyer‑borrower, who prepares a deed, knows that the deed will be presented to the seller. Ignoring Section 439 for the moment, an attorney searching title with the bank as the only client would also have to take reasonable steps to prevent the borrower from believing the attorney represents the borrower?s interest, since the title opinion may be communicated to the borrower.
What will be ?reasonable steps? will depend on the risk that an unrepresented party will think the attorney is representing his or her interest. The arrangement by which the attorney?s title fee is passed through to the borrower by the bank creates special problems because the borrower is likely to assume that he is entitled to rely upon the title opinion. In most transactions, after all, the one who pays ordinarily gets something for his money. It is undoubtedly because the borrower may believe that the attorney is working for him even though the lawyer may regard the bank as his client that some lawyers have voluntarily assumed a responsibility to the borrower for any title flaws that may later be revealed. A lawyer who wishes to absolve himself of such responsibility is obligated to take reasonable steps to bring home to the borrower that he will receive no direct benefit from the legal services for which he will be charged.
Attached to this opinion are sample disclosure letters concerning a variety of situations. We believe they are sufficient for purposes of disclosure, but do not suggest that other forms of disclosure would not also be sufficient.
Draft Letter to Borrower When Attorney Intends to Represent Only the Bank and to Warn Borrower Against Reliance on Title Opinions
Dear:__________________________(Borrower)
This firm has been retained by the First National Bank of Insolvency to examine the title of property you intend to purchase from_______________ ______________ (Seller)and mortgage to the Bank. We have also been asked to prepare the closing documents. The Bank intends to require that you reimburse it the cost of the legal services we will perform in connection with this transaction as a condition of the mortgage financing made available to you.
You should understand that, even though you will be paying the cost of our work, we will not be acting as your attorney but only as counsel for the Bank. Our title examination and title certificate and the closing documents will be solely for the benefit of the Bank.
This firm does not assume any liability to you arising out of any of the legal services it has performed or will perform for the Bank, including its title certificate. Any legal advice or legal representation you need in connection with this transaction should be sought from counsel of your own choice, retained by you.
Yours very truly,
Letter to Borrower and Bank When Attorney Proposes to Represent Both
Dear_______________________:(Borrower)
This firm has been retained by the First Benevolent Bank of Far Tottering to perform certain legal services required in connection with a mortgage loan it proposes to make to you to finance your purchase of certain real estate from __________________________ .(Seller)
The Bank will charge the cost of these services to you when the purchase is closed. You have asked us to represent and advise you, as well as the Bank, in connection with this purchase.
The legal services we have been asked to perform include examination of the seller?s title and preparation of the closing documents. Our title examination will undertake to identify all potential title problems, if any, without regard to whether a problem affects primarily the interest of you as purchaser or the Bank as lender.
In preparing the closing documents we will use pre-printed forms supplied by the Bank. Because we are acting for the Bank as well as for you, we will be unable to undertake any negotiations with the Bank on your behalf seeking modification of these forms. Should you desire significant modification of the terms of your loan or any part of the Bank?s mortgage and note forms, you should obtain separate counsel responsible only to you as borrower or undertake any discussions required for that purpose without the assistance of counsel.
Yours very truly,
The following paragraph may be used in a title opinion when the attorney represents the bank alone but wishes to assume liability to the borrowers for the title opinion.
The foregoing title opinion has been prepared at the request of ______ _________________ (Bank). In preparing this opinion and any accompanying documents, we have acted as counsel to the Bank and to no other party to this transaction. We assume liability, however, for any statements made in the foregoing opinion and for the adequacy and accuracy of the title examination it reflects, in accordance with the title standards of the Maine State Bar Association in effect as of the date hereof, to all parties named as addressees of this opinion.
Letter to Seller When Attorney for Borrower or Bank or Both Has Been Asked to Prepare a Deed
Dear:_______________________(Seller)
This firm has been retained by the 13th Savings and Loan Association of West Catastrophe to perform certain legal services required in connection with the purchase of certain real estate from you by__________________.(Buyer)
We have been asked to represent (both the purchaser and) the bank for the purpose of examining your title and preparing the closing documents.
Among other documents, we have been asked to prepare a deed from you to the buyer. Because we will be representing the bank (and the borrower), the deed will be prepared so as to protect their interests in the transaction. Although you may be required to assume the cost of preparation of this deed as part of the closing settlement, you should not assume that the deed has been prepared with a view toward your interest in the transaction.
If you desire legal advice or an opinion with respect to the adequacy of any deed we may prepare to protect your interest, such advice and opinion should be sought from independent counsel of your own choosing. You may, if you so desire, choose to have your own attorney prepare the deed in this transaction. If you wish to do this, please advise us to that effect and ask your attorney to submit a copy of the proposed deed to us five business days in advance of the proposed closing date.
Yours very truly,
Footnotes
[1] It may be argued that if 19 M.R.S.A. ' 722 is a statute expressly providing ?the method of determination of attorneys? fees, ?then an attorney may not charge any fee greater than or in addition to the fee authorized by the court; otherwise the court does not actually determine the fee. Section 722 could, however, be regarded merely as authority to shift liability for attorneys? fees from one party to the other, in whole or in part. If this is the case, it would not be the method for the determination of the fee, and it follows that attorneys could charge more than the fee awarded by the court and could enter into contingent fee agreements in post‑decree proceedings
[2] Rule 3.4 (d), Maine Bar Rules.
[3] The ABA Committee on Professional Ethics seems to have approved such dual representation, given full disclosure and consent. See Informal Opinions 643 and 837.
[4] The ABA Committee on Professional Ethics seems to have approved such dual representation of seller and buyer at least when the attorney's duties were limited to supervising the closing and perhaps preparing closing documents.
See Informal Opinions 1170, 923, 886, and 472.
Enduring Ethics Opinion
Opinion #13. Firm Name Including Public Official
Issued by the Professional Ethics Commission
Date Issued: October 15, 1980
Question
If an attorney (Lawyer A) withdraws from a law firm (A, B & C) to become a public official, may that firm ethically continue to use its same name if Lawyer A?s name is removed from the list of attorneys appearing on the firm?s letterhead, office entrance, etc., and if the response to any calls for Lawyer A, or questions concerning his relationship to the firm, is that Lawyer A is no longer a member of, or affiliated with, the law firm of A, B & C.
Opinion
The issue presented is whether the proposed retention of the firm name, and its use on business cards, stationery, directory listings and other professional notice, constitutes a ?misleading? or ?deceptive? statement prohibited by Rule 3.9(a) of the Maine Bar Rules. Rule 3.9(b) states that a misleading or deceptive statement would include, among other things, a statement or claim that:
a. Omits to state any material fact necessary to make the statement, in light of all circumstances, not misleading; (3.9(b)(2))
b. Is intended or is likely to create an unjustified expectation; (3.9(b)(3))
c. Is intended, or is likely, to convey the impression that the lawyer is in a position to influence improperly any Court, tribunal, or other public body or official; (3.9(b)(5))
d. Contains a representation or implication that is likely to cause an ordinary prudent person to misunderstand or be deceived thereby, or fails to contain reasonable warnings or disclaimers necessary to make the representation or implication not deceptive. (3.9(b)(6))
In the Commission?s view, continued use of the firm name of A, B & C, while Lawyer A is serving as a public official and is not a member of the firm, would be misleading and is therefore ethically improper.[1] Such conduct would be misleading because of the implication that Lawyer A may still be associated with the firm, when in fact he is not. An explanatory note on the firm letterhead and/or on other professional notices would not cure this problem with regard to prospective clients, as the problem is inherent in the misleading firm name itself. Similarly, the Commission believes there is a danger that an ordinary prudent person could believe, because of a misunderstanding about Lawyer A?s relationship to the firm, that the firm might have special influence in high places due to the connection with Lawyer A. In the Commission?s opinion, these are the very sorts of misunderstanding the drafters of the Maine Bar Rules were concerned about in defining the term ?misleading? in Rules 3.9(b)(3), 3.9(b)(5) and 3.9(b)(6).
This conclusion is also supported by a review of past ethical rules and opinions developed by the legal profession, and of past practices of law firms in the State of Maine. There has long been a concern about the dangers of misleading the public by retaining the name of a former partner in a law firm?s name. An early opinion by the ABA Committee on Professional Ethics in 1925 concluded that a law firm?s continued use of the name of a deceased partner in its firm name would be ethically proper where it was the local custom to do this and the result would not be misleading to the public. Formal Opinion 6. That Opinion also noted, however, that where a member of a law firm is appointed to the Bench, ?propriety would frequently require that the name of the judge should be dropped from the firm name.? These conclusions were later reflected in ABA Canon 33, adopted in 1928 and amended in 1937, which provided in relevant part:
In the selection and use of a firm name, no false, misleading, assumed or trade name should be used. The continued use of the name of a deceased or former partner when permissible by local custom is not unethical, but care should be taken that no imposition, or deception is practical through this use. When a member of the firm, on becoming a Judge, is precluded from practicing law, his name should not be continued in the firm name.
Subsequent interpretations of Canon 33 dealt with situations where a partner accepts a public office other than a judgeship. In Formal Opinion 192, it was stated that:
In general, where an attorney accepts employment, either public or private, his name may properly be carried by his firm. If the conditions of his employment require that he sever all other connections, he can no longer remain a member of the firm, and in such cases should not permit his name to be used by the firm. In the absence of such conditions or of a law requiring the attorney to refrain from private practice, there is no objection to his retaining his membership in a law firm or in sharing the earnings of the law firm, provided such firm does not represent interests adverse to the employer, and the public is not misled. (Emphasis supplied)
In Formal Opinion 315, dated December 11, 1965, dealing with a lawyer who was elected Governor of his state, the Committee noted:
Assuming that the conditions of the acceptance of the office of Governor do not legally require the successful candidate to sever any or all of his other connections, in general his name may properly be continued in the firm name and carried on the firm letterhead if there is no statute opposing it. However, if a state statute exists prohibiting the Governor from practicing law, then his name should be taken out of the firm name. The same principles would apply to listing the name of the Governor in the various legal directories wherein the firm is listed, with the notation 'on leave' after his name in the list of individual lawyers, but without showing the public office held.
In the event the officeholder?s name is so continued in the firm name, whether or not he receives compensation from the firm, he must be responsible as a partner of the firm and liable as such in order to avoid possible deception.
Finally, in Formal Opinion 318, the Committee established a safe harbor where:
. . . a partner whose name appears in the name of a law firm is elected or appointed to high local, state or federal office, which office he intends to occupy only temporarily, at the end of which time he intends to return to his position with the firm, and provided that he is not precluded by holding such office from engaging in the practice of law and does not in fact sever his relationship with the firm but only takes a leave of absence, and provided that there is no local law, statute, or custom to the contrary, his name may be retained in the firm name during his term or terms of office, but only if proper precautions are taken not to mislead the public as to his degree of participation in the firm?s affairs. (Emphasis supplied)
Three years later, the ABA Canons of Professional Ethics (including Canon 33) were replaced by the ABA Code of Professional Responsibility, effective January 1, 1970. One of the sections of this new Code, DR2‑102(B), provided in relevant part that:
A lawyer who assumes a judicial, legislative, or public executive or administrative post or office shall not permit his name to remain in the name of a law firm or to be used in professional notices of the firm during any significant period in which he is not actively and regularly practicing law as a member of the firm, and during such period other members of the firm shall not use his name in the firm name or in professional notices of the firm.
Although the above‑quoted Disciplinary Rule has been abrogated by Maine Bar Rule 3.9, it is the opinion of this Commission that the historical development of ethical rules that culminated in DR2‑102(B) is relevant to a proper interpretation of Maine Bar Rule 3.9 and supports the conclusions of this Commission in the instant case. Similarly, we are not aware of any local custom to the contrary that would argue for a different result. Thus, while there have been numerous instances where law firms have retained the name of a deceased or truly retired former partner in their firm name, we know of no such custom in Maine regarding former partners who have ceased practicing, not because of retirement, but because they have become public officials and are therefore unable to continue practicing law. On the contrary, in the case of lawyers appointed to the Bench, the custom has clearly been to remove the judge?s name from the firm name. The same result should obtain, in the Commission?s view, when the public official has assumed a legislative or public executive or administrative post as opposed to a judicial position.
For these reasons, the Commission concludes that the firm of A, B & C could not, on the facts presented, ethically retain the name of Lawyer A in its firm name, regardless of whether or not an explanation were added to the letterhead and other professional notices indicating that Lawyer A has withdrawn from the firm.
Footnote
[1] No opinion is expressed as to whether the result would be different if another lawyer whose last name was also A was still a member of the firm. (Back)
Enduring Ethics Opinion
Opinion #14. "Law Associates"
Issued by the Professional Ethics Commission
Date Issued: October 15, 1980
Question
The Commission has been asked for an advisory opinion regarding the propriety of two attorneys forming an informal ?association? with each other for the practice of law and holding themselves out to the public as such on their joint letterhead which would be captioned ?Law Associates.? The attorneys will continue to have separate practices in separate towns but they intend to share some cases based on their respective experience, preference, and location. Fees are to be worked out on a case by case basis. It is not intended by the attorneys that their relationship be a formal partnership; although they fully accept liability for each other?s negligence (not only in shared cases, but in all cases either of them handles), they do not accept liability for each other?s debts incurred in the practice of law such as for rent, equipment purchases, or other business credit transactions.
Opinion
Maine Bar Rule 3.9 now controls issues of publicity, advertising, and solicitation by lawyers. Its general approach is to permit any advertising which is not false, fraudulent, misleading or deceptive. Whether the expression ?Law Associates? is misleading or deceptive depends on whether it omits to state any material fact necessary to make the statement not misleading [Rule 3.9(b)(2)], or is intended or is likely to create an unjustified expectation [Rule 3.9(b)(3)], or contains a representation or implication that is likely to cause an ordinary prudent person to misunderstand or be deceived thereby [Rule 3.9(b)(6)].
The Commission believes that the phrase in question, measured by these standards, is misleading under the circumstances proposed. The concept of an association is itself ambiguous, implying no particular degree of common enterprise. The general public will probably infer that the attorneys involved are likely to share cases, consult with each other on a continuing basis, and otherwise cooperate with each other. These inferences would be true with respect to the association planned. Some members of the public, however, may also infer that these attorneys are partners. This inference would be false in that these attorneys do not accept full partnership liability. Accordingly, the Commission concludes that the expression ?law associates? used on a letterhead to describe this particular relationship would violate those subsections of Rule 3.9(b) cited above.
Enduring Ethics Opinion
Opinion #15. Advertised Fee for Uncontested Divorce
Issued by the Professional Ethics Commission
Date Issued: October 15, 1980
Question
The Commission has been asked to define the circumstances under which an attorney would be justified in departing from an advertised flat fee for an uncontested divorce without risking a charge that the advertisement had been misleading. The inquiring attorney asks whether a fee advertised for an uncontested divorce would be applicable only to a divorce action uncontested only at the outset, or to a divorce action heard as an uncontested matter by the Court, and whether the advertised fee could be abandoned if substantial negotiation and argument proved necessary to handle the divorce, even though it was ultimately heard as an uncontested matter by the Court.
Opinion
The Commission has concluded that a fee advertised for uncontested divorces must be adhered to with respect to any divorce action heard by the Court as an uncontested matter, regardless of the amount of negotiation devoted to achieving that result. Conversely, it is the Commission?s opinion that a contest before the Court over any issue at any stage of the proceedings, will remove the case from the uncontested category. Clearly, the mere filing of a complaint does not determine whether an action will be contested or not.
Thus, if the defendant files and brings on for hearing a motion for an order pending divorce, or if the defendant files no answer but appears and contests such issues as child support, custody, and the division of marital property, the divorce has become a contested matter. Conversely, if a motion for an order pending is filed but never heard, or an answer is filed but the divorce is nonetheless heard as an uncontested matter by the Court, the divorce remains uncontested. The filing of pleadings alone can be but a formal step to preserve the right of the defendant to contest the divorce.
It should be obvious that the labels contested and uncontested have very little to do with the amount of time an attorney may spend upon a domestic relations case. It is, however, equally obvious than an objective test to determine whether an advertised fee for a divorce is misleading and to determine whether an attorney is justified in departing from an advertised fee is highly desirable if it is possible. The nature of the Court proceedings can and should provide such a test. In most cases they will be a fair measure of the amount of time required for the case.
Although an attorney may, in a few cases, spend a great deal more time than anticipated to earn a fee that has been advertised for uncontested divorces, that is simply a disadvantage to advertising and charging flat rates for such cases that must be accepted. If an attorney wishes to reserve the right to make special fee arrangements in cases that may, for example, involve substantial property settlements, although technically uncontested, appropriate language can be inserted in an advertisement to warn the public of that possibility.
The inquiring attorney suggests that a lawyer advertising a flat fee for uncontested divorces may, by appropriate pleading, be able to create a contest where none would occur otherwise. The attorney is, of course, always obliged to carry out the lawful instructions of the client, and seek the client?s lawful objectives. If in doing so a contest over divorce is precipitated, the responsibility can justifiably be placed on the client. If, on the other hand, an attorney deliberately misinterprets the client?s instructions, or manipulates a litigated matter, whatever the nature of that matter, so as to increase the size of the fee that can be charged, appropriate disciplinary measures are available.
Enduring Ethics Opinion
Opinion #176. Complaint Justice Conflicts with Client
Issued by the Professional Ethics Commission
Date Issued: July 10, 2001
FACTS
Attorney A is a solo general practitioner in a rural Maine location. The local judge has appointed Attorney A to be a Complaint Justice.[1] One of the Complaint Judge?s duties is to issue search warrants upon the request of law enforcement authorities. Sometimes, their requests are received during the night and on weekends when the lawyer is not in the office. On the occasion at issue, however, law enforcement authorities went to Attorney A?s office during the day during normal business hours to request a search warrant.
Attorney A also is appointed by the courts to represent criminal defendants. Attorney A had been appointed to represent Defendant D on a violation of a Protection from Abuse matter. Although Attorney A had tried to communicate with the client and requested discovery on the case from the District Attorney, the client had not communicated with the attorney and the attorney had never spoken with or met him.
Some two months after the court appointment, law enforcement authorities requested a search warrant for an automobile because of suspected drug possession. Attorney A did not recognize that the owner of the automobile was Defendant D, and after reviewing the officer?s affidavit, Attorney A signed the search warrant. The next day Defendant D visited Attorney A and, at this point, Attorney A realized that the automobile owner for whom the search warrant was issued was Attorney A?s client. Attorney A immediately applied to withdraw from the case and requested that another attorney be appointed to represent Defendant D on the Protection from Abuse charge.
QUESTIONS
Bar Counsel has posed the following questions to us:
Does the Grievance Commission have jurisdiction to decide cases involving conduct by an attorney when that attorney is acting as a Complaint Justice appointed by a judge?
If so, did the attorney violate the conflict rules by failing to recognize that the person against whom the search warrant was issued was also a client?
What Bar Rules would be applicable to an attorney acting as a Complaint Justice?
OPINION
Question 1
In response to the first question, the Commission is of the view that it does not have jurisdiction under Rule 11 of the Maine Bar Rules to answer the inquiry. Maine Bar Rule 11 grants the legal authority and jurisdiction to the Professional Ethics Commission to ?render advisory opinions to the Court, Board, Bar Counsel, and to the Grievance Commission on matters involving the interpretation and application of the Code of Professional Responsibility (Rule 3)?. Although the Professional Ethics Commission is authorized upon request of the Bar Counsel or the Grievance Commission to render advisory opinions as to the interpretation of Rule 3 of the Bar Rules, the question posed in this case necessarily entails a determination of the jurisdiction of a coordinate agency established by the Bar Rules. Such a question is we believe outside the authority granted to us. Rather, consideration of the appropriate scope of jurisdiction of a coordinate body such as the Grievance Commission is an issue as to which deference should be accorded to the Grievance Commission. Accordingly, we respectfully decline to answer the question posed to us by Bar Counsel.
Question 2
The second question as posed to us necessarily entails a determination of all the facts in this matter. Under the structure of the Bar Rules, we believe that is a task, which is appropriately assigned to the Grievance Commission. The Professional Ethics Commission has long been careful both to avoid interfering in the jurisdiction of other agencies involved in the disciplinary process and to avoid rendering ethical opinions in circumstances where the answer requires a finding of facts. Thus, in Ethics Opinion 67 (January 7, 1986), the Ethics Commission held that its proper role under the Bar Rules was limited to providing interpretations of Rule 3 with respect to future conduct of attorneys, rather than as to circumstances that required the exercise of fact finding functions. In this case, the question of whether the Bar Rules were violated requires a full evaluation of all the facts and circumstances and the testimonial examination of the parties involved, all of which information is not available to the Ethics Commission. Accordingly, we respectfully decline to answer and defer to the Grievance Commission for its determination after full consideration of the relevant facts and circumstances.
Question 3
Although we have declined to answer the first two questions, we do believe it is appropriate to suggest to the Grievance Commission those Bar Rules, which may be applicable to the conduct, described. In listing these rules, we do not suggest that the attorney has violated them, but rather that the Grievance Commission should evaluate the facts it finds in light of the rules enumerated.
First, we note that we believe that, even though the lawyer was serving as a Complaint Justice, she or he was nonetheless governed by Maine Bar Rule 3. We do not express any view as to whether there may be any applicable provisions of the Code of Judicial Conduct or whether that code even applies.
With the qualification noted in the first paragraph of this section, we believe that several Bar Rules may apply to the facts as presented, including (1) Maine Bar Rule 3.2(f)(4), concerning the prohibition against lawyers engaging in conduct that is prejudicial to the administration of justice; (2) although Bar Rules 3.2(c) and (d) may not by their specific terms apply to activities performed as a complaint justice, they may be helpful analogs in determining under what circumstances undertaking legal representation following the performance of activities as a complaint justice are ?prejudicial to the administration of justice, under Bar Rule 3.2(f)(4)?; (3) Maine Bar Rule 3.4(a), imposing a continuing duty on lawyers to disclose any information that, in light of circumstances arising after the commencement of representation, might reasonably give rise to a conflict of interest; (4) Maine Bar Rule 3.4(b)(1), outlining the obligation of lawyers not to commence or to continue representation of a client if there is a substantial risk that the lawyer?s representation of one client would be materially and adversely affected by the lawyer?s duty to a third person; (5) Maine Bar Rule 3.4(e) prohibiting a lawyer from undertaking or continuing representation of a client without informed consent in any matter with respect to which the lawyer has a fiduciary or other legal obligation to another person if the obligation represents a substantial risk of materially and adversely affecting the lawyer?s representation of the client; and (6) Maine Bar Rule 3.6(a) requiring lawyers to employ reasonable care and skill and apply best judgment in the performance of professional services.
Footnote
[1] See 4 M.R.S.A. Section 161 (Justice of the Peace) and 15 M.R.S.A. Section 5
Enduring Ethics Opinion
Opinion #16. Letter Soliciting Personal Injury Case
Issued by the Professional Ethics Commission
Date Issued: October 15, 1980
Question
The Grievance Commission has been asked by a lawyer if it would be permissible under the Maine Bar Rules for that lawyer to mail a letter soliciting employment, as follows:
(letterhead)
Dear___________________
I understand that your________________ has recently sustained injuries in an accident. It has been my experience that many people are unaware that they may be entitled to compensation for their injuries even in situations such as automobile accidents where it appears that the person seeking compensation was at fault or where it appears that no one was at fault.
I am attempting now to concentrate my practice in the area of cases involving serious personal injuries or death and probate (settling the affairs of persons who have died). I am attempting this concentration in hopes that it will better allow me to serve the needs of clients who have suffered serious personal injuries or who are the heirs or representatives of persons who have died.
Pursuant to the Maine Bar Rules, Rule 3.9, I am not allowed to make any unwarranted suggestions or promises of benefits or to contact you under circumstances which create a risk of undue influence. If, however, after reviewing my letter and giving careful consideration to the possibility that there may be some right to compensation for the injuries suffered in the recent accident, you wish to contact me or another attorney to check into this matter further feel free to do so.
Should you choose to contact me, you should be aware that it is my practice not to charge for an initial office interview for the purpose of evaluating whether there may be a potential claim. You should also be aware that the most common types of fee arrangements which I enter into in cases involving serious injuries or death are what are known as contingent fees, in which my fee is based upon a percentage of the amount of compensation recovered for the injured party, or a fee based on an hourly rate. In handling cases on an hourly rate, I simply charge an agreed rate per hour billed monthly to the client. By requirement of the probate courts, all probate cases are handled on an hourly rate.[1]
In the event that you and the injured party wish to discuss the possibility of securing some compensation for the injuries with me, simply call my secretary and arrange an appointment for a time which is mutually convenient.
Sincerely yours,
Opinion
Maine Bar Rule 3.9 governs and regulates advertising and solicitation by Maine lawyers. Because the lawyer?s letter referred to above is intended to be sent to an individual and pertains to a singular situation involving personal injury, the propriety of the lawyer?s conduct in sending the letter is governed by subsection (f) of that Rule which prescribes the standards by which lawyer solicitation must be measured. Maine Bar Rule 3.9(f) provides:
(f) Recommendation or Solicitation of Employment.
(1) A lawyer shall not solicit employment on behalf of himself or any lawyer affiliated with him through any form of personal contact:
(i) By using any statement, claim, or device that would violate this rule if part of a public communication;
(ii) By using any form of duress or intimidation, unwarranted suggestions or promises of benefits, or engaging in deceptive, vexatious, or harassing conduct; or
(iii) When the circumstances create an appreciable risk of undue influence by the lawyer or ill‑considered action by the person being solicited. Without limitation, such circumstances will be deemed to exist as to the person solicited if he is in the custody of a law enforcement agency or under treatment in a hospital, convalescent facility, or nursing home, or if his mental faculties are impaired in any way or for any reason. Notwithstanding the foregoing, such circumstances shall be deemed not to exist when a lawyer is discussing employment with any person who has, without solicitation by the lawyer or anyone acting for him, sought the lawyer?s advice regarding employment of a lawyer.
(2) A lawyer shall not compensate, or give anything of value to, a person or organization to recommend or secure his employment by a client, or as a reward for having made a recommendation resulting in his employment by a client, except that he may pay for public communication permitted by these rules and may pay the usual and reasonable fees or dues charged by a lawyer referral service operated, sponsored, or approved by a bar association.
(3) A lawyer shall not knowingly assist or authorize any other person or organization to engage in conduct that would violate this rule if engaged in by the lawyer personally, nor shall a lawyer accept employment when he knows, or it is obvious, that the person who seeks his services does so as a result of conduct prohibited under this rule.
It is the opinion of the Commission that the letter must be treated as an indirect solicitation of the accident victim even though it is addressed to a relative. Since it is the accident victim who has the claim in which the lawyer is interested, it is obvious that the letter is intended to be communicated to him by the recipient. This conclusion is reinforced by the last paragraph of the letter which states that if the addressee or ?the injured party? wish to discuss the potential claim with the letter writer, he would be glad to oblige.
It cannot be said, however, that it would be a per se violation of the rule for the lawyer to send the letter in question. Indeed, the letter appears to be carefully drafted with a view to complying with the standards contained in Rule 3.9(f). The letter itself, however, tells only half the story. Since, as indicated above, the letter must be taken as having been directed to the accident victim, the rule would be violated if it were received by him while under treatment in a hospital or under the other circumstances set forth in subsection (1)(iii).[2]
It is conceivable that a lawyer could have made inquiry to satisfy himself that the accident victim had been discharged from the hospital and that the circumstances did not otherwise ?create an appreciable risk of undue influence by the lawyer or ill‑considered action by the person being solicited.? The Commission is of the opinion that the rule would not be violated if a lawyer had taken such steps to assure that the circumstances deemed in the rule to constitute a violation did not in fact exist even if, by some mischance, as in the case of a sudden relapse by the accident victim, the letter was nevertheless received by him while back in the hospital. The Commission believes that where, despite the fact that reasonable precautions are taken and good faith is exercised by the lawyer, a solicitation inadvertently occurs under circumstances described in subsection iii, the policy of the rule will be satisfied by simply barring the lawyer from accepting the case if he should later be requested to undertake it.
Footnotes
[1] The Commission is doubtful as to the factual accuracy of this statement.
[2] The Commission takes this opportunity to observe that the prohibition of Rule 3.9(f)(1)(iii) is framed in terms of ?appreciable risk of undue influence by the lawyer or ill‑considered action by the person being solicited.? Explicit proof or findings of harm or injury is immaterial. See Ohralik v. Ohio State Bar Association, 436 U.S. 447, 98 S.Ct. 1912 (1978).
Enduring Ethics Opinion
Enduring Ethics Opinion #16 [August 2014]
Opinion #175. Lawyer Acting as Solo Practitioner and "of Counsel" to Another Law Firm
Issued by the Professional Ethics Commission
Date Issued: April 12, 2001
FACTS
Law Firm A has entered into an agreement with Lawyer B pursuant to which Lawyer B will become ?of counsel? to the law firm. Lawyer B will be listed as ?of counsel? on the firm?s letterhead, its website and marketing materials. The lawyer will regularly perform legal services as a lawyer in Law Firm A on behalf of certain clients of the law firm. The lawyer will also solicit work from potential new clients for Law Firm A as a lawyer for Law Firm A. The lawyer may or may not personally perform work for such new clients of the firm, depending on the nature of the legal services to be provided. Lawyer B?s compensation will be (1) a percentage of the fees received by Law Firm A from legal services the lawyer personally performs for Law Firm A clients, and (2) a percentage of the fees received by Law Firm A from clients the lawyer has developed for the firm, either alone or in conjunction with other lawyers at Law Firm A, but either way in the lawyer?s ?of counsel? capacity.
In addition to practicing law in an of counsel relationship with Law Firm A, Lawyer B will also maintain an independent practice in separate offices from that of Law Firm A. The legal and clerical staff of Lawyer B?s independent practice will be separate from that of Law Firm A.
QUESTION
Does Lawyer B?s development of clients for or referral of clients to Law Firm A in an ?of counsel? capacity for Law Firm A, and Lawyer B?s receipt of a portion of the legal fees generated by such development or referral, constitute a division of fees for legal services that requires client consent under Maine Bar Rule 3.3(d)?
ANALYSIS AND ANSWER
For the reasons set forth herein, we conclude that such referral or development of clients is not a division of fees requiring client consent under Rule 3.3(d).
Rule 3.3(d) provides, in relevant part:
(d) Fee Division. A lawyer shall not divide a fee for legal services with another lawyer who is not a partner in or associate of the lawyer?s law firm or office; unless:
(1) The client, after full disclosure, consents to employment of the other lawyer and to the terms for the division of fees; and
(2) The total fee of the lawyers does not exceed reasonable compensation for all legal services they rendered to the client.
The threshold issue presented by the facts is whether Lawyer B?s status as ?of counsel? falls within the meaning of the phrase ?partner in or associate of the lawyer?s law firm.?
Bar Rule 3.3(d) was closely modeled on DR 2-107 of the ABA Model Code of Professional Responsibility (1969). See Maine Bar Rules Reporter?s Notes, Maine Manual on Professional Responsibility, pp. 3-31 (2000). Neither the Maine Bar Rules nor the Model Code define the term ?of counsel.? However, the ABA Committee on Ethics and Professional Responsibility has, through a series of Informal Opinions, noted that ?of counsel? status can cover a number of relationships between a lawyer and a firm including (1) the lawyer who practices part-time with a law firm, (2) the semi-retired partner who remains associated with the firm and is available for selective matters, (3) the probationary partner-to-be who is expected to become a partner shortly and (4) the lawyer with a status between that of a partner or associate who has ?tenure? but lacks the expectation of promotion to full partner status.
Annotated Code of Professional Responsibility, pp. 58-60 (1979). More recently the ABA Ethics Committee has formally defined the ?core characteristic? of ?of counsel? as:
a ?close, regular personal relationship;? but a relationship which is neither that of a partner (or its equivalent, a principal of a professional corporation), with the shared liability and/or managerial responsibility implied by that term; nor, on the other hand, the status ordinarily conveyed by the term ?associate,? which is to say a junior non-partner lawyer, regularly employed by the firm.
ABA Formal Opinion 90-357 at 3 (1990). The opinion notes that, although daily contact is not required, ?frequent and continuing contact,? defined as more than ?merely an availability for occasional consultations,? is. Id. At 4-5. The opinion also states that it is not ethically permissible to use the term ?of counsel? to designate (1) a relationship involving only an individual case, (2) a relationship of forwarder or receiver of legal business, (3) a relationship involving only occasional collaborative efforts among otherwise unrelated lawyers or firms, or (4) the relationship of an outside consultant. Further, the nature of the compensation arrangement has no bearing on whether designation as ?of counsel? is appropriate. Id. at 4. Although this definition was adopted by the ABA Committee under the earlier Model Code, we believe it is equally applicable to the question before us, given that DR 2-107 of the Model Code was the source of Bar Rule 3.3(d).
Although Bar Rule 3.3(d) and DR 2-107 from which it was derived use the terms ?partner? [1] and ?associate? but not the term ?of counsel,? we believe it is reasonable to read the words ?partner? and ?associate? as used in Rule 3.3(d) as intending to encompass a broad range of continuous economic arrangements between a lawyer and a firm including that of an ?of counsel? relationship. The apparent purpose of Rule 3.3(d) was to place limitations on the extent to which a lawyer may share fees with another lawyer or law firm with whom the referring lawyer has no continuous business and professional association. When there is no such relationship, the referring lawyer is required to obtain the client?s consent to the fee division. When there is such a continuous relationship, such as where a partner generates a client who is served by another member of the same firm, there is no fee division within the meaning of the rule and no requirement for client consent. Viewed in light of this purpose, we can see no distinction between a lawyer who is classified as a partner or associate and a lawyer who is classified as ?of counsel? as defined above. Just as a partner or associate can work on a part-time basis, so also can the lawyer who is ?of counsel.? Similarly, the compensation arrangements for a partner and associate can be as variable as those of an ?of counsel? lawyer. Although, as ABA Opinion 90-357 makes clear, an ?of counsel? relationship is not the same as a partner or associate, for purposes of Rule 3.3(d) there is no functional difference. Thus, we conclude, that, just as a partner and associate are not covered by the fee division rule, so also Lawyer B who is ?of counsel? is not deemed to be dividing a fee when he or she does work for or brings a client to Law Firm A.
We hasten to add that it is essential that the ?of counsel? relationship must be established in good faith, must meet the definition in ABA Opinion 90-357, and may not be used as a sham device to avoid compliance with Rule 3.3(d). Whether or not such arrangement is bona fide is dependent on the facts in each case. As described in the facts as provided by the inquiring lawyer in this case, the relationship between Law Firm A and Lawyer B meets the definition adopted by us. We also advise that our opinion that the fee division rule does not apply to Lawyer B and Law Firm A is limited to the work that Lawyer B does for Law Firm A and the work Law Firm A does for the clients he or she brings into Law Firm A in an "of counsel" capacity. If Lawyer B should refer to Law Firm A a client who originated in his or her independent practice, then the fee division rule would apply.
The facts as presented also warrant additional comment. Since Lawyer B will be maintaining a legal practice independent of Law Firm A, Lawyer B will presumably make engagements with clients either through Law Firm A (doing the work personally or having the work done by another lawyer at Law Firm A) or separately through his or her separate independent practice. Either practice is permissible. However, in order to avoid misleading clients, and thereby possibly violating Bar Rule 3.2(f)(3), Lawyer B must clearly define the terms of the engagement with the client making it clear whether the engagement is with Lawyer B alone or with Law Firm A.
Finally, because of Lawyer B?s dual practice status, it is incumbent upon both Lawyer B and Law Firm A to carefully apply the conflict of interest rules. Among other things, because of the relationship between Lawyer B and Law Firm A, it is important to note that disqualifications of either one due to conflicts will be imputed to the other by virtue of Bar Rule 3.4(b)(3)(i).
Footnote
[1] The term partner is defined in Rule 3.14(b) as ?a member of a group, however designated, that exercises ultimate authority over the activities of a legal entity or contractual association through which legal services are provided by lawyers.? Thus the term ?partner? encompasses ?shareholders? in professional corporations and ?members? of limited liability professional companies.
Enduring Ethics Opinion
Enduring Ethics Opinion #175 [August 2013]
Opinion #17. Negotiation of Attorney's Fees in Class Actions
Issued by the Professional Ethics Commission
Date Issued: January 15, 1981
The principal question before the Committee is whether, in a class action in which plaintiffs? counsel is statutorily entitled to be compensated by defendant, it is unethical for plaintiffs? counsel to negotiate the amount of those fees with defendant prior to settlement of the underlying action. Ancillary inquiries involve the propriety of disclosure to defendants of the number of hours and hourly rate expended by plaintiffs? counsel prior to settlement on the merits and the right of plaintiffs? counsel to prevent his client from agreeing to settle without protecting plaintiffs? counsel with respect to recovery of fees from defendant.
The questions posed raise the specter of a classic conflict of interest between an attorney and his client: the competing interest of the client and the attorney in the division of a settlement fund which a defendant is prepared to pay to resolve litigation. Surprisingly, no ethics opinion has been found which deals with such matter.[1] A number of recent cases, however, have discussed the question in the context of approval or disapproval of proposed settlements in class actions, and we feel that, whether viewed as statements of substantive law or ethical principles, these cases are persuasive and dictate the result of our deliberations.
Unlike other attorney self‑interest situations, the inquiry poses a circumstance which cannot be resolved by the attorney resigning from the case. Plaintiffs in class actions must, of necessity, be represented by counsel, and any attorney representing plaintiffs under these circumstances falls victim of the same statutorily created conflict. The conflict presented is very real; the attorney involved is always left open to the accusation that consideration of the amount of his fee may have influenced his recommendation as to the settlement of the underlying case.
?The present arrangement leaves the unfortunate impression that defendants are buying themselves out of the lawsuit by direct compensation to plaintiffs? counsel.? Jamison v. Butcher and Sherred, 68 F.R.D. 479, 484 (1975)
Several recent cases have condemned a practice of negotiating plaintiffs? counsel fees prior to settlement of the underlying case. Leading among these is Prandini v. National Tea Co., 557 F.2d 1015 (3rd Cir. 1977). The Prandini court establishes a far preferable procedure of deferring any consideration of counsel fees until after the approval of the class action settlement. See also, Norman v. McKee, 90 F.Supp. 29, 36 (N.D.Cal. 1968), aff?d, 431 F.2d 769 (9th Cir. 1970); Munoz v. Arizona State University, 80 F.R.D. 670 (1978); Jamison v. Butcher & Sherred, supra at 484 (?. . . (I)t is inappropriate for a proposed settlement to provide for direct payment of attorney?s fees to counsel for the class representatives . . . . Rather, the issue of attorney?s fees is more properly reserved for judicial consideration after settlement of the gross amount to be paid to the class.?) See also, 1 Moore on Federal Practice (Manual for Complex Litigation), Rule 1.46; 3B Moore?s Federal Practice, paragraph 23.07(1). C.f. City of Philadelphia v. Charles Pfizer & Co., 345 F.Supp. 454, 470‑71 (S.D.N.Y. 1972), where the court upheld a class action settlement providing for a plaintiff?s attorney to be paid ?reasonable counsel fees? to be later determined by the court.
In view of these authorities, we must conclude that the ?inherent conflict of interest? (Manual for Complex Litigation, Rule 1.46 supra) presented by this inquiry requires a plaintiff?s attorney to abstain from any fee discussions with a defendant until after the underlying case has been at least tentatively resolved. Once the plaintiff?s claims have been settled as between the parties and plaintiff?s counsel has committed himself to the settlement value of the underlying claim, it becomes appropriate to discuss fee considerations. Plaintiff?s counsel might disclose to defendant information concerning hours expended, billing rates, and other matters commonly considered in establishing a reasonable fee. Of course, the fee itself must be either fixed or approved by the court, and whether this were done in the context of a gross settlement figure recommended by the parties with a fee to be determined by the court, or in the context of an approval of a fee proposal made by the parties, seems to us to make little difference. The important factor is that the amount of the underlying claim be resolved prior to consideration of the fee for counsel. It should also be noted that it would be equally unethical for a defendant to seek resolution of plaintiff?s counsel fees prior to agreement on the underlying claim.
In no event may plaintiffs? counsel prevent his clients from settling a case, even though such a settlement may ignore the plaintiffs? right to recover statutory counsel fees from the defendant. We would perceive no ethical impropriety, however, in the attorney informing his clients that they might be directly liable to him for counsel fees‑such as under quantum meruit‑if they were to waive their right to receive counsel fees from the defendant.
Footnote
[1] Perhaps it is not so surprising, since none of the provisions of the Code of Responsibility address themselves directly to the issue. Rules 3.4(f) and 3.7(c) and (i), dealing with the interest of a lawyer in or antagonistic to his client?s interest, are not strictly applicable because counsel in a class action never really has an ?interest? in the client?s cause of action. Rule 3.6(g), relating to settlement of similar claims on behalf of different clients, does not really address itself to a class action. Of course, the principal duty of the lawyer, as set forth in Rule 3.6(a) is that he ?employ reasonable care and skill and apply his best judgment in the performance of his services?; the concern raised by the issue posed is that the resolution of the attorney?s fee may distract the attorney from using his best judgment in settling the class action.
Enduring Ethics Opinion
Opinion #174. Legal Services Websites
Issued by the Professional Ethics Commission
Date Issued: October 10, 2000
QUESTION
Prompted by an inquiry presented through Bar Counsel, we address several ethical issues that should be considered by an attorney in Maine who wishes to participate as an attorney to whom cases are referred through a certain legal services website, which we will refer to as ?WebSite.com? or ?WebSite? in short form. The issues we address concern false advertising, paid publicity, paid referrals and mandatory withdrawal.
WebSite.com is an on-line website through which consumers can locate lawyers to provide particular kinds of legal services. Through the use of WebSite?s home page, a person seeking legal representation (the ?User?) is provided with a menu of legal categories from which to choose. For each category of law, WebSite provides a brief summary of the scope of the representation to be provided and information concerning the cost of the representation. Once the User chooses a type of representation, the User is provided a list of attorneys in WebSite?s network of attorneys who are geographically close to the User and who are potentially available to represent the User. If the User wishes to expand the geographic base of attorneys, the User can do so through a click of the mouse. The User can also click on information supplied by each participating attorney to WebSite about the attorney?s background, qualifications and experience. The User, rather than WebSite, decides which attorney to choose for representation.
WebSite advertises on both television and radio. In addition, WebSite advertises on its own site. For example, in its current site, WebSite states: ?[WebSite] offers a revolutionary approach to accessing quality legal services. Select a pre-screened, network lawyer in your community to personally handle your legal need for a low, flat fee.? The site contains a ?flat fee menu,? listing base prices for various kinds of legal services. It also states that ?How we do it? is to provide ?Quality Lawyers, Internet Efficiency, Great Prices.?
As currently devised for use in Maine, WebSite charges the User an administrative fee pursuant to a ?User Agreement? for the use of its website in locating a lawyer. Once the User decides which lawyer ?Member? he or she wishes to retain for representation, the User and Member enter into a fee agreement, subject to the fee limitations imposed on the Member by WebSite. WebSite collects the lawyer?s fee in advance through a credit card transaction. The fee is held in a trust account maintained by WebSite and is not paid over to the Member until the legal work is completed. If the User expresses dissatisfaction with the Member?s legal work, however, the legal fee is refunded to the User, so long as WebSite?s ?Ombudsman? agrees that a refund is in order. The refund does not necessarily include filing fees, taxes or ?other costs incurred servicing the User?s legal need.? Whether the fee is paid to the Member or refunded to the User, WebSite takes no share of the legal fee. Rather, it acquires its revenue by charging the User directly and by collecting fees for advertising posted by non-lawyers on its website.
An attorney who wishes to be a Member of WebSite?s network of attorneys must meet certain minimum qualifications, and enter into a ?Member Agreement.? The minimum qualifications include five years? experience, good standing in the bar, no discipline, three peer references, an office in the jurisdiction, and legal malpractice insurance with minimum limits of $100,000 per occurrence and $300,000 in the aggregate. Through the Member Agreement, the attorney also agrees, among other things:
to contact the User within two business days of being notified of a potential matter, assuming the Member agrees to the representation;
to be available to accept matters requested by Users of the website;
to provide legal services pursuant to a defined scope of work as described on the site, in accordance with WebSite?s published price and rate sheet;
to the money back guarantee advertised by WebSite;
to maintain the minimum malpractice insurance coverage;
to devote up to 5% of the total hours expended on WebSite matters in each calendar year to unpaid public interest legal services, as directed by the WebSite?s Pro Bono Foundation;
not to withdraw from representation of a User without the User?s consent;
to indemnify and hold harmless WebSite from all claims, including attorneys fees, arising out of the Member?s actions;
that WebSite is not liable for any direct, indirect, incidental, special, or consequential damages of any kind; and
that WebSite will not be responsible for any loss or claim arising out of errors or omissions in its site or the Member?s use of the website.
Participation by a Maine attorney in WebSite?s network arrangement raises three questions under Maine Bar Rule 3.9 concerning false advertising, paid publicity and paid referrals. First, to what extent, if any, is an attorney who becomes a Member of WebSite accountable under Maine Bar Rule 3.9(a) for the accuracy of any public communications by WebSite? Second, to what extent, if any, does an attorney?s participation in WebSite as a Member implicate any of the requirements of Maine Bar Rule 3.9(d) applicable to paid advertising? Third, would a Maine attorney participating in WebSite violate the prohibitions of Maine Bar Rule 3.9(f)(2) regarding paid referrals by accepting clients obtained through WebSite?
The Member Agreement proposed by WebSite also raises a fourth ethical issue, namely, can a Maine attorney, consistent with Maine Bar Rule 3.5(b), make an unqualified agreement not to withdraw from representation of a User without the User?s consent.
OPINION
For the reasons expressed below, we answer these questions as follows. [1]
First, we conclude that, within the meaning of Bar Rule 3.9(a), an attorney-Member of WebSite uses, assists in or participates in the use of WebSite?s communications to the public that relate to or concern Members or the obtaining and provision of legal services from and by Members (as opposed to the non-legal advertisements also posted by WebSite on its Internet site). This means that an attorney cannot be a Member if the attorney knows that any of the pertinent communications by WebSite contains a false, fraudulent, misleading, or deceptive statement or claim as defined in Bar Rule 3.9(b).
Second, it is our opinion that the public communications by WebSite that relate to or concern Members, or the obtaining and provision of legal services from and by Members, is ?paid advertising? within the meaning of Bar Rule 3.9(d) and that, accordingly, to the extent such advertising is communicated to the public by use of radio, television or an Internet site, the attorney must approve and retain a prerecording of the advertising.
Third, we do not believe that a Maine lawyer who participates in WebSite under its present User fee structure would violate the provisions of Maine Bar Rule 3.9(f)(2) relating to paid referrals.
Fourth, in light of the provisions of Maine Bar Rule 3.5(b) concerning mandatory withdrawal, a Maine lawyer cannot make the unqualified agreement called for in WebSite?s Member Agreement that the lawyer will not withdraw from representation of a User without the User?s consent.
False Advertising
A Maine lawyer may not participate in any form of false advertising. Maine Bar Rule 3.9(a) provides:
(a) False Advertising Forbidden. A lawyer shall not, on behalf of the lawyer or any affiliated lawyer, knowingly use, or assist or participate in the use of, any form of public communication containing a false, fraudulent, misleading, or deceptive statement or claim. A public communication is any communication, through mass media, direct mail, or other means including professional cards, announcements, letterheads, office signs, and similar accouterments of a law practice. [2]
The preliminary question posed here is whether a lawyer, by virtue of being a Member, uses, assists, and/or participates in public communications made by WebSite to consumers. We answer this question in the affirmative. The essence of the arrangement between the Member and WebSite is that the Member gives WebSite the ability to furnish access to the Member?s services on agreed terms, while the Member, in turn, gets to be on a limited list of lawyers to whom Users are referred. The communications by WebSite to consumers are clearly intended to generate clients and to create expectations within those clients concerning both the Member and important aspects of the relationship between the Member and the client. In this important and dispositive sense, a lawyer who signs up as a Member therefore uses, assists, or participates in the use of public communications made by WebSite to potential and actual consumers of legal services. [3] Therefore, to the extent that a lawyer-Member of WebSite knows that any such communication by WebSite contains a false, fraudulent, misleading, or deceptive statement or claim, the lawyer violates Maine Bar Rule 3.9(a) if he or she continues to be a Member. [4]
Paid Publicity
The second consideration for lawyers is the impact of Maine Bar Rule 3.9(d) relating to paid publicity. The rule states:
(d) Paid Publicity. A lawyer shall not compensate or give anything of value to a representative of the press, radio, television, or other communication medium in anticipation of, or in return for, professional publicity in a news item. A paid advertisement must be identified as such unless it is apparent from the context that it is a paid advertisement. If a paid advertisement is communicated to the public by use of radio or television, it shall be prerecorded, approved for broadcast by the lawyer, and the lawyer shall retain the prerecording as approved for two years. If a public communication is transmitted through the mails, the lawyer shall retain a copy of such communication for two years following the mailing.
The application of Rule 3.9(d) depends on whether the lawyer who participates as a Member of WebSite has ?paid? for WebSite?s advertisements. ?Paid? means compensating or giving something of value in exchange for an advertisement. In contract law, it is equivalent to the giving of consideration. In the case of WebSite, Members incur a number of obligations that have value. These obligations include, among other things, agreements to handle legal matters for the flat fees imposed by WebSite or at certain hourly rates, to maintain minimum malpractice insurance coverage, to devote 5% of the Member?s total hours expended on WebSite matters to pro bono work as directed by WebSite, and to indemnify and hold harmless WebSite from claims arising from the Member?s actions. We do not opine whether any one of these obligations, standing alone, would rise to the level of a payment under Rule 3.9(d). We do believe, however, that collectively the promises mentioned above amount to the giving of substantial value and therefore a payment under the Rule. In singling out these obligations, we do not mean to suggest that none of the other bulleted promises set forth earlier in this Opinion could be deemed to constitute payment.
Since in our view a lawyer-Member is paying for WebSite?s ads, the obligations imposed by Rule 3.9(d) apply to the Member. WebSite?s radio and television ads must be prerecorded and approved for broadcast by the Member. The Member must retain the prerecording, as approved, for two years.
In our opinion, these prerecording, approval and retention requirements also apply to the legal services advertisements that WebSite places on its Internet site. We note that Rule 3.9(d), by its explicit terms, states that these requirements apply to paid advertisements communicated ?by use of radio or television.? In our opinion, however, the drafters intended these requirements to apply generally to public broadcast telecommunications, as opposed to print media, with radio and television being in existence at the time they wrote the rule. The Internet, as far as constituting a public accessible medium, did not exist at the time Rule 3.9(d) was promulgated. Yet today?s Internet, in our view, is similar to the public broadcast media that the drafters specifically addressed in Rule 3.9(d). The Internet is an advertiser?s mass marketplace, having the capacity to reach an audience as large as that served by radio and television. The public can now access the equivalent of radio and television broadcasts over the Internet. Just like radio and television, what one sees or hears on the Internet can evaporate once the communication has ended. Accordingly, the need for ?the creation of a probative base for the operation of Rule 3.9(a)? [5] exists. Because of these similarities between the Internet and radio and television, the precautionary measures prescribed by Rule 3.9(d), which were created to provide a means to enforce Rule 3.9(a), should be applied with equal vigor to WebSite?s Internet legal services advertising.
Paid Referral
We turn to Rule 3.9(f)(2) and address the question whether WebSite?s financial arrangement with Users and Members constitutes the compensation or giving of value by a lawyer to an organization to recommend or secure employment by a client. Rule 3.9(f)(2) states:
(2) A lawyer shall not compensate, or give anything of value to, a person or organization to recommend or secure employment by a client, or as a reward for having made a recommendation resulting in employment by a client, except that a lawyer may pay for public communication permitted by these rules and may pay the usual and reasonable fees or dues charged by a lawyer referral service operated, sponsored, or approved by a bar association.
As indicated above, it is our view that, under WebSite?s arrangement, a Member is giving something of value to WebSite in return for being listed on its site as one of its network attorneys. In Opinion No. 135 (1993), however, this Commission opined that paid lawyer advertising through the use of ?law lists? or ?directories? fit within the exception contained in the rule for ?public communication permitted by these rules.? The basis for our opinion was the historical treatment of such ?law lists? and ?directories? by the Bar at large, and the fact that the Bar, with equal consistency, has tolerated the practice of advertising and solicitation by lawyers through such means. As a result, a majority [6] of this Commission was persuaded that had the drafters of the Maine Bar Rules intended to prohibit the practice of lawyers paying for advertising in law lists and directories, they would have done so explicitly, which they did not.
We are of the opinion that, as currently devised, WebSite?s arrangement for listing its Members on its site is the functional equivalent of such a law list or directory and that a lawyer?s use of it for that purpose does not violate Rule 3.9(f)(2). We note that WebSite does not recommend any specific lawyer to a User. Rather, it provides the User with a list of lawyers who do work in the area of the law of interest to the User and who are in geographic proximity to the User. If the User wishes to expand the list of attorneys to a larger geographic area, the User can. The User is not ?steered? by WebSite to any particular lawyer, but makes his or her own decision.
Mandatory Withdrawal
Under WebSite?s proposed Member Agreement, a Member attorney must agree that the attorney ?shall not withdraw from representation? of a User who becomes an ?Eligible Client? [7] ?until he or she has . . . obtained Eligible Client?s consent ??
In our opinion, a Maine lawyer cannot make such an unconditional agreement consistent with Maine Bar Rule 3.5(b). [8] This follows from the fact that there are certain situations under Rule 3.5(b) where withdrawal is mandatory. For example, a lawyer must withdraw from representation if the lawyer knows or should know that his or her continued employment would result in a violation of the Maine Bar Rules. Since withdrawal is mandatory in this and the other situations outlined in Rule 3.5(b), a lawyer cannot agree under all circumstances that he or she will not withdraw without the client?s consent.
DISSENTS
Partial Dissent by One Member
This Member of the Commission dissents from that portion of the Commission?s opinion that pertains to paid referrals under Rule 3.9(f)(2). Although the circumstances are less egregious than those described in Opinion 135 with respect to the Foreclosure Network, the arrangement between the WebSite and its members nevertheless constitutes a ?recommendation (for) employment? which violates the rule for the reasons expressed in the dissent to that opinion.
In Opinion 135, the majority relied heavily on the fact that law lists had for years been recognized as an exception to the rule that attorneys could not ethically pay others to recommend their employment. Obviously, no argument based on the historic tolerance of ?approved? law lists can be made with respect to the Internet. For this reason also, therefore, Opinion 135 does not support the conclusion of the majority that Rule 3.9(f)(2) is not violated.
Although WebSite?s current practice does not comply with Rule 3.9(f)(2), it would appear that it could bring itself within the rule by making minor changes in its advertising. The rule is only violated if a person or organization ?recommend(s)? the employment of an attorney. Thus, if WebSite were to eliminate references in its advertising such as that it had ?pre-screened? its attorneys and that it is providing ?quality legal services,? its law list could become a neutral ?public communication? permitted by the rule.
This Member also joins in the following partial dissent of another Member.
Partial Dissent by Another Member
This Member joins in the well-reasoned opinion as a whole except for the conclusion that the prerecording, approval, and retention requirements of Rule 3.9(d) apply to the legal service's advertisements that appear on Website even to the extent that they are not readily viewable on a television.
Rule 3.9 generally applies by its terms to all forms of public communication. The first sentence of Rule 3.9(d), similarly, expressly applies to all forms of communication media. By contrast, the portion of the rule that imposes the prerecording, approval, and retention requirements expressly applies only to communications to the public through the use of radio and television. Thus, for example, the drafters excluded from the reach of these requirements advertisements on buses, advertisements in event brochures and programs, and oral testimonials delivered at live events and conferences.
Importantly for present purposes, in defining what media would be subject to the three requirements, the drafters chose to use a list of specific media, rather than a description of media characteristics, or a general statement of attributes (e.g., "any media which by its nature does not leave a clear record of what the ad was") followed by a nonexclusive listing of examples (e.g., "such as radio and television"). This latter, more open-ended approach to defining subject matter under the rules was not unknown to the drafters, and is in fact used in Rule 3.9(b). In short, if the drafters of the Rule had wanted to include all media like television and radio (the essential premise of the majority's reasoning), they could have done so, and they knew how to do so.
Given the language and structure of the Rule in question, this Member is therefore particularly reluctant to rest an opinion upon the conclusion, reached by the majority, that the drafters would have included the Internet in the exclusive listing of media subject to the prerecording, approval and retention requirements had they considered the issue on the basis of what is now known. Several additional considerations reinforce this reluctance.
First, it is not necessarily obvious that the drafters would have reasoned in the manner that the majority presumes. Differences in the context and focus with which a user searches out and comes into contact with an Internet site, as opposed to a television ad, might have been deemed dispositive. Similarly, the fact that such a user might make a record of the Internet ad on his or her own computer might have been seen as warranting different treatment. Alternatively, the drafters might have decided to rethink the rule altogether, reasoning that the slim benefits of the requirements are less needed today in view of the increased ability of users and enforcers to record or otherwise prove the content of ads on all media given the prevalence of VCR's and the digitalized streaming of all forms of electronic media across computer networks. In short, if we were to ask the "what if" hypothetical, then the question we would ask is not, "What would the drafters have done in 1990 or 1994 had they considered the possibilities of the Internet?" Rather, we would ask, "What would the drafters have done if they had considered the entire state of affairs and technologies as they now exist?" We do not know, and we are not the rules committee.
Second, the pertinent requirements do not play a sufficiently integral role in the overall protection of the public and clients so as to create a strong need to stretch the language of the rule beyond what one can fairly say is written. The requirements in question do not define or in any way address conduct that might be characterized as malum in se. Rather, they are essentially administrative rules, presumably intended to enhance the ability to prove wrongdoing in advertising when it occurs. There is not, in short, a conflict between plain language and central purpose of the type that might allow a body charged with interpreting ethical rules to go so far in saying that the rules must be applied not as written, but as they would have been written. Instead, this is an area in which lawyers should have some reasonable assurance that they can tell what they are supposed to do by reading the rules as they are written.
For the foregoing reasons, this Member respectfully dissents from only that portion of the majority opinion that holds that the recording, approval, and retention requirements of Rule 3.9(d) apply to the legal service's advertisements that appear on Website even to the extent that they are not readily viewable on a television.
Footnotes
[1] Nothing in this opinion should be read as indicating that there is anything ethically wrong with the idea of participating in a legal services website or using the Internet in other ways to match clients with lawyers. Indeed, the Internet offers many possibilities for improving access to legal services in countless ways. We stress, however, that when lawyers use this as well as any other means for marketing their services, they remain responsible for any transgressions of the ethics rules arising out of their chosen marketing method and the public communications associated therewith.
[2] Rule 3.9(b) defines false advertising as follows:
(b) False Advertising Defined. Without limitation, a false, fraudulent, misleading, or deceptive statement or claim includes a statement or claim that:
(1) Contains a material misrepresentation of fact or law;
(2) Omits to state any material fact necessary to make the statement, in the light of all circumstances, not misleading;
(3) Is intended or is likely to create an unjustified expectation;
(4) Violates Rule 3.8;
(5) Is intended, or is likely, to convey the impression that the lawyer is in a position to influence improperly any court, tribunal, or other public body or official; or
(6) Contains a representation or implication that is likely to cause an ordinary prudent person to misunderstand or be deceived thereby, or fails to contain reasonable warnings or disclaimers necessary to make the representation or implication not deceptive.
[3] We are aware that WebSite also runs paid advertising by other vendors for their products and services. Our opinion today is limited to communications by WebSite that relate to or concern Members or the obtaining and provision of legal services from and by Members.
[4] We note, as an example of what prospective Members should pay attention to, that WebSite currently tells the public that there is a ?Money-Back Guarantee,? yet attorneys fees and costs are not automatically refunded in the event of User dissatisfaction. Rather, a WebSite Ombudsman must agree that the User has reasonable grounds to be dissatisfied with the quality, rather than the result, of the legal services rendered and the refund does not necessarily include filing fees, taxes ?or other costs incurred servicing the User?s legal need.? Moreover, under the WebSite User Agreement, it is not clear that the User would be entitled to a refund of the ?User fee? under any circumstances. At best, any refund of the User fee is discretionary with WebSite. As another example, WebSite previously represented to the User that the Member attorneys were ?Approved? when in fact there was no process of approval beyond the minimum requirements to become a Member. We understand that a recent revision deleted the word ?Approved? from the site.
[5] See Reporter?s Notes to Maine Bar Rule 3.
[6] Two members of the Commission dissented from the opinion.
[7] A User becomes an Eligible Client after the User selects an Attorney from a list of potentially available WebSite Members, purchases a legal service through a credit card transaction, and responds to a series of on-line questions relevant to the selected legal service.
[8] Maine Bar Rule 3.5(b) provides:
(b) Mandatory Withdrawal.
(1) If a lawyer knows, or should know, that the lawyer or a lawyer in the lawyer's firm is likely or ought to be called as a witness in litigation concerning the subject matter of the lawyer's employment, the lawyer and the lawyer's firm shall withdraw from representation at the trial unless the court otherwise orders. This rule does not apply to situations in which the lawyer would not be precluded from accepting employment under Rule 3.4(g)(1)(i).
(2) A lawyer representing a client before a tribunal, with its permission if required by its rules, shall withdraw from employment, and a lawyer representing a client in other matters shall withdraw from employment if:
(i) The lawyer knows, or should know, that the client is bringing the legal action, conducting the defense, or asserting a position in the litigation, or is otherwise having steps taken, merely for the purpose of harassing or maliciously injuring any person;
(ii) The lawyer knows, or should know, that the lawyer's continued employment will result in violation of these Rules;
(iii) The lawyer's mental or physical condition renders it unreasonably difficult for the lawyer to carry out the employment effectively; or
(iv) The lawyer is discharged by the client.
Enduring Ethics Opinion
Opinion #18. Charges for Services in Providing Title Insurance and Title Search
Issued by the Professional Ethics Commission
Date Issued: January 15, 1981
Question
The Commission has been asked whether Rule 3 is violated where an attorney charges a client for a title search and also charges him a premium in his capacity as agent for a title insurance company for a title insurance policy where a portion of the premium is rebated by the insurance company to the attorney‑agent. A substantial portion of the premium represents the cost of the title work.
Opinion
Rule 3.4(c) and Rule 3.4(d) are largely declaratory of DR 5‑105(B) of the previous Code of Professional Responsibility. That section permitted multiple employment if employment had been consented to after full disclosure. Thus present Rule 3.4 does not absolutely prohibit the dual role of attorney‑agent.
Rule 3.4(a), however, regarding disclosure of any adverse interest, has no counterpart under the ABA Code. The Reporter?s Notes to Rule 3.4(a) describe its purpose as follows:
. . . in drafting 3.4(a) the Commission sought to mandate complete disclosure. The duty extends to all facts that could possibly be relevant; and the test of relevance is shifted from the lawyer?s judgment of his ability to act with unimpaired professional judgment to the client?s judgment of the wisdom of retention. The rule is designed to insure that a client, in retaining an attorney, is completely informed about the existence of any facts which might influence the judgment of the attorney.
Because of the strong policies expressed by the adoption of Rule 3.4(a), the Commission is of the opinion that it is vital to make a complete and full disclosure of the details of the financial relationship between the attorney‑agent and the title insurance company. This will extend to the formula by which the lawyer‑agent will receive payment from the title insurance company.
An additional question arises as to whether an attorney may retain his commission for sale of title insurance without giving a credit for such commissions to his client. The Commission believes that such a credit must be given when the work undertaken by the attorney for the client consists basically of the same services rendered to the title insurance company. Under the provisions of Rule 3.3(a), if the attorney were permitted to retain the insurance policy sales commission under such circumstances, this would constitute an excessive fee. The New York State Bar Association in its Opinions 320 and 351 reached a similar conclusion.[1]
The requirement that the insurance sales commission be remitted, as set forth above, presumes that the legal fee and the placement of the insurance policy are substantially part of the same transaction. The Commission can foresee other circumstances in which such would not be the rule. If, for instance, an attorney examines title for a purchaser of real estate and bills for these services, and the purchaser later determines to develop and improve the real estate and requests a policy of title insurance not originally contemplated, the insurance commission need not necessarily be rebated. In order to determine whether the fee is ?excessive,? all of the surrounding circumstances which affect the reasonableness of the fee must be taken into account.[2]
One final note of caution must be addressed to the attorney‑agent. In serving as attorney‑agent, the requirement of Rule 3.4(f) must be kept in mind that employment may not be accepted in the absence of a written consent of the client where the lawyer?s judgment ?reasonably may be? affected. In advising a client with respect to the need for title insurance, the lawyer?s judgment obviously may be substantially affected if the lawyer has an economic interest in selling insurance. This must be borne in mind prior to the acceptance of employment.
Conclusion
(1) Rule 3.4 does not absolutely prohibit the lawyer from serving in the dual capacity of title insurance agent and attorney providing legal services.
(2) Rule 3.4 does require complete disclosure as well as written consent of both parties in order for the lawyer to act in that capacity. This full disclosure must be obtained prior to undertaking employment.
(3) Employment may not be accepted if the lawyer?s judgment on behalf of his client ?reasonably may be? affected.
(4) Where the legal work done by the attorney for his client is substantially the same, and contemporaneous with the services performed by the attorney as agent for the title insurance company, the lawyer must give his client a full credit against the balance for legal services for the commission received from the title insurance company.
Footnotes
[1] The New York Bar Association based its conclusions both upon the view that there can be no distinction between fees charged to the client for title work and the fee charged to the insurer as a sales commission, as well as upon the law of agency, which requires an agent to account to his principal for a profit, absent an agreement to the contrary. The Commission bases its conclusion only on the first of these grounds. The Commission does not normally give opinions on matters of law and prefers to base its conclusion on an interpretation of the word ?Fees? as used in Rule 3.3.(Back)
[2] This does not require the remittance of a fee for preparation of title insurance documents or other work for which the client has not already been billed.
Enduring Ethics Opinion
Opinion #173. Retainer Fees, Credit Cards and IOLTA
Issued by the Professional Ethics Commission
Date Issued: March 7, 2000
QUESTION
May a lawyer accept a retainer from a client by credit card if the lawyer's bank insists on placing the funds in the lawyer's general business account rather than the lawyer's IOLTA account?
OPINION
We start our analysis of this question by noting that client funds or funds belonging in part to a client and in part presently or potentially to a lawyer or law firm must be kept in a segregated account, in some instances an IOLTA account, rather than a general business account pursuant to Rule 3.6(e) of the Maine Bar Rules. For the purposes of this analysis, we determine that client funds are funds held by the lawyer that may be refundable to the client. Put differently, if there are no circumstances under which the funds or any portion of the funds may be refunded to the client, then the funds can be fairly characterized as funds of the lawyer or law firm. All other funds received from the client are client funds.
Accordingly, before determining into what account the funds shall be placed, the lawyer must first determine to whom the funds belong, presently or potentially. If the lawyer decides, based upon an explicit understanding reached with the client that the funds belong to the lawyer or law firm and there are no circumstances under which the funds (or any portion of the funds) may be refunded to the client, then the lawyer may place the funds in a general business account. If on the other hand, the lawyer determines that the funds are client funds, then the rule prohibits placement in a general business account.
Funds paid by a client for services rendered and funds paid by a client to reimburse a lawyer for advances for costs and expenses paid by a lawyer would be expected to belong to the lawyer, whereas funds paid by a client for services not yet rendered and for costs and expenses not yet paid by the lawyer would be expected to belong to the client.
Having analyzed the problem as we have, we turn now to that portion of Maine Bar Rule 3.6(e)(1) that provides as follows:
All funds of clients paid to a lawyer or law firm, other than retainers and advances for costs and expenses, shall be deposited in one or more identifiable accounts . . .. No funds belonging to the lawyer or law firm shall be deposited therein except as follows: . . . (ii) Funds belonging in part to a client and in part presently or potentially to a lawyer or law firm must be deposited therein.
We note that the provisions of Rule 3.6(e)(1) and 3.6(e)(1)(ii) appear to contradict each other in that paragraph (1) excepts retainers and advances, but subparagraph (ii) makes no such exception. The provisions are reconciled by interpreting the phrase "retainers and advances for costs and expenses" to mean only those funds that are truly non-refundable to the client. In contrast, funds that are potentially refundable to the client, whether labeled retainers, advances, or something else, are fully or partially client funds and accordingly, must be segregated in accordance with section (ii).
We also recognize that in revising Rule 3.6(e), the Advisory Committee on Professional Responsibility added the word "retainer? in the first paragraph. The reporter's note indicates that this change was made as "advance payment of fees is not improper.? Although this change and the reason therefore appear to be as ambiguous as the rule, we construe the phrase ?advance payment of fees" to mean payment of a flat fee by a client that is non-refundable.
The answer to the question posed then turns upon whether the funds that are the subject of the credit card payment are potentially refundable (in which case they are client funds) or not (in which case they are not client funds). Once the lawyer answers that question, the options available to the lawyer are clear. Despite the bank's insistence, funds that are client funds may not be placed in a general business account, but rather must go directly into either an IOLTA account or other identifiable account.
We point out that once client funds are placed in an IOLTA account, any portion of those funds to which a lawyer becomes entitled may then be transferred to the lawyer's general business account. This issue was addressed in Opinion #98 of this Commission and should be referred to for questions concerning the withdrawal of funds from IOLTA accounts.
Enduring Ethics Opinion
Enduring Ethics Opinion 173 [June 2016]
Opinion #172. Obligation to Return Inadvertently Disclosed Privileged Documents
Vacating Opinion #146
Issued by the Professional Ethics Commission
Date Issued: March 7, 2000
Bar Counsel has asked the Commission to reconsider its decision in Opinion No. 146 in light of the recent decision of the Law Court in Corey v. Norman, Hanson & DeTroy, 1999 ME 196. In Opinion No. 146, a majority of the Commission determined that it was not a violation of the Code of Professional Responsibility for counsel to fail to return to opposing counsel an obviously privileged document inadvertently made available to him by opposing counsel. Upon facts nearly indistinguishable from those assumed in Opinion 146, the Corey Court upheld a Superior Court order requiring that the receiving counsel return the privileged document to opposing counsel. It bears mention that the Commission, in Opinion No. 146, conscious of its limited and specific jurisdiction[1] to interpret Rule 3 of the Bar Rules, based its conclusion on the absence of any provision in the Code of Professional Responsibility that shifted to the receiving lawyer the obligation to remedy the negligent failure of opposing counsel to guard against his own violation of the lawyer-client privilege. In Corey, the Law Court, jurisdictionally unconstrained, has now pronounced that, as a matter of common law,[2] the obligation to preserve the lawyer-client privilege is indeed an affirmative obligation shared by adversaries, and that the privilege cannot be inadvertently relinquished.
Having earlier determined that the Bar Rules furnished no basis for discipline under analogous facts, the Commission is now confronted with the conundrum of having substantive law impose upon lawyers obligations not founded in the Bar Rules. This Commission has long been reluctant to broaden the concept of conduct "...that is prejudicial to the administration of justice..." in violation of Rule 3.2(f)(4).[3] The source of this reluctance is that the standards of conduct set forth in Rule 3 of the Bar Rules establish the minimal standards of professional conduct, for the violation of which the imposition of disciplinary measures is called for. Because of the risk of discipline, the Commission has eschewed finding conduct to be a violation, which is merely implicit from the text of the Code. Rather, except where the Law Court has expressly spoken,[4] only those prohibitions (and affirmative obligations) which are clear in the Code should form the basis for imposing discipline upon a lawyer. This contrasts with the "ethical considerations" accompanying the former ABA Canons of Ethics, which purported to define higher, aspirational standards of conduct; under the Maine Code, a lawyer cannot be disciplined for acting in an indecorous manner.
Nonetheless, in the face of a clear holding by the Law Court that an obligation exists to protect against the consequences of the unwitting failure of opposing counsel to preserve the lawyer-client privilege, we can find a solid basis for defining at least one aspect of conduct that is prejudicial to the administration of justice. As the Court pointed out in Corey, the purpose of the lawyer-client privilege is "to protect not only the giving of professional advice to those who can act on it but also the giving of information to the lawyer to enable him to give sound and informed advice."[5] For this reason, the Commission withdraws its Opinion 146.
Footnotes
[1] See Maine Manual on Professional Responsibility, Opinion No. 82, at p. 0-291.
[2] We assume that since the Court does not cite any provision of the Bar Rules in support of its decision, the opinion is not based upon an interpretation of the Bar Rules.
[3] See Maine Manual on Professional Responsibility, Opinion No. 88, at p. 0-309: "...the Commission concludes that it would be inappropriate to construe the general language of Rule 3.2(f)(4) as if it contained that requirement. ln other words, while it might well serve the ends of justice to require lawyers to disclose client secrets concerning misconduct of judges or members of administrative tribunals, any such requirements would more appropriately be imposed by way of amendments to the Bar Rules.?
[4] See, for example, State v. Grant, 487 A.2d 627 (Me. 1985).
[5] Quoting Upjohn Co. v. United States, 449 U.S. 383, 390 (1981).
Enduring Ethics Opinion
<font color="Red"><strong>  Vacating Opinion #146</strong></font>
Enduring Ethics Opinion #172 [March 2017]
Opinion #171. Consultations with Attorneys Outside the Firm on Client Matters
Issued by the Professional Ethics Commission
Date Issued: December 24, 1999
FACTS
The Board of Overseers has requested an answer to the following questions:
(1) Under what circumstances may Attorney A consult with Attorney B, who is not a member of his or her own law firm, when the inquiry necessitates a discussion of facts arising from A's representation of Client X, without first obtaining X's consent?
(2) Does Attorney A's consultation with B constitute an attorney/client relationship that would make their discussion confidential and not subject to discovery in any related litigation?
(3) Does it make any difference if Attorney B is Bar Counsel?
OPINION
In answering the Board's questions we will distinguish between consultations that concern primarily the matter about which X sought legal services from A, including related matters, which for convenience will be dubbed consultations for the benefit of the client, and consultations that concern A?s obligations under the Maine Bar Rules, which will be dubbed consultations for the benefit of the attorney. We recognize that both consultations could be considered beneficial to both the attorney and the client. A distinction is justified by the different policies that may support allowing consultation without client consent in these different situations. Guided by Maine Bar Rule 3.6(a), it may be argued that the Bar Rules should encourage consultation with other counsel when an attorney's knowledge falls short of addressing the client's problem completely. It may also be argued that the Bar rules should encourage consultation with other counsel about requirements of the Bar Rules in the interest of preventing violations, if possible, and correcting them promptly when they do occur.
We shall assume that the "facts arising from A's representation of client X" are either confidences or secrets as those terms are defined in Maine Bar Rule 3.6(h). Bar Rule 3.6(h) does not inhibit discussion of other facts pertaining to a representation. In this respect, the scope of the Maine Bar Rule on confidentiality is not as broad as its counterpart in the ABA Model Rules. The latter (Model Rule 1.6) applies to all "information relating to representation of a client" but is buffered by a qualification that some disclosures may be impliedly authorized to carry out the representation. We shall also assume that the Board's first question presupposes not just a discussion of confidences and secrets but a disclosure, including identification of client X or the disclosure of facts that would permit identification of client X, at a time when adverse consequences of the disclosure are possible.[1]
In answer to question (1), the Commission concludes that, if consultation is for the benefit of X, the consent of X is not required; provided that, neither B nor any member of B's firm represents a party with an interest adverse to X in the matter on which consultation is to occur or a substantially related matter and one of the following additional conditions is satisfied:
(i) B undertakes an attorney-client relationship with X, at least for the limited purpose of the consultation;
(ii) If B declines to undertake an attorney-client relationship with X, the facts to be discussed will not include facts disclosed to A in a privileged communication but may include secrets, as defined in Maine Bar Rule 3.6(h), if B agrees to neither disclose nor use any of the secrets.
If consultation is for the benefit of A, our answer is the same except that the attorney-client relationship to which the conditions refer is an attorney-client relationship between B and A, rather than X and the disclosures may extend to communications "relevant to an issue of breach of duty" by the lawyer to the client or vice versa. Our answer to question (2) is that it depends on the circumstances and conduct of the parties, and our answer to question (3) is yes; it does make a difference if B is Bar Counsel.
Although on its face Maine Bar Rule 3.6(h) expresses an unqualified prohibition of any disclosure of a confidence or secret of the client by the lawyer first acquiring knowledge, we conclude that permission to make some disclosures for the benefit of the client, without the client's written consent must be implied from requirements of the representation. This implied authority, which is expressly acknowledged by ABA Model Rule 1.6 and by the draft Restatement 3rd, The Law Governing Lawyers, § 113, is manifest in several provisions of the Bar Rules. Bar Rule 3.6(h)(5) defines "confidence" as information protected by the attorney-client privilege "under applicable law", thus importing Maine Rule of Evidence 502, which in paragraph (a)(5) defines "confidential" communications as communications not intended to be disclosed other than to persons "to whom disclosure is made in furtherance of the rendition of professional legal services to the client . . . ." Paragraph (2) of Maine Bar Rule 3.6(h) enjoins a lawyer to prevent improper disclosure or use of confidences and secrets by other attorneys and non-attorneys in the lawyer's firm and "others whose services are utilized by the lawyer? and thereby necessarily implies that confidences and secrets may be shared with this circle of confidants. The "others whose services are utilized" may include persons outside the lawyer's firm, such as lay experts and accountants. It would not be logical to exclude lawyers from this circle. Implications aside, the efficiency and competence clients reasonably expect would be severely compromised if lawyers did not have limited authority to disclose information obtained during the representation to advance the interests of the client.
Permission to make disclosures for the benefit of the attorney is more directly expressed in the Maine Bar Rules and Rules of Evidence. Bar Rule 3.6(h) provides that the disclosure of confidences or secrets is permitted "as necessary to the defense of' the lawyer and other members of the lawyer's firm against an accusation of wrongful conduct. Maine Rule of Evidence 502(d)(3) provides that there is no privilege as to a communication "relevant to" an issue of breach of the duties lawyers and clients owe to one another. A restrictive interpretation of Bar Rule 3.6(h) might suggest that disclosure is not authorized unless an accusation of wrongful conduct has been made, and defense occurs in connection with proceedings before a tribunal with jurisdiction over the accusation. The Commission concludes, on the contrary, that the scope of the permission to disclose set forth in paragraph (3) of Bar Rule 3.6(h) also allows disclosures that are necessary to obtain advice in anticipation of a possible accusation of wrongful conduct or to prevent wrongful conduct from occurring at all. Such an interpretation is both justified by and necessary to further the interest of the client and of the judicial system in preventing violations of the Bar Rules and correcting them promptly once they have occurred. This interpretation is consistent with Rule of Evidence 502(d)(3), which withholds the privilege as to communications "relevant to an issue of breach of duty". The existence of an issue and the requisite relevance do not depend on a formal accusation. Lacking the privilege, to fall within the scope of Bar Rule 3.6(h), such communications must convey information that is a "secret" as defined in Bar Rule 3.6(h).
Just as authority to disclose client information in consultations may be implied from the Maine Bar Rules and Maine Rules of Evidence, so limitations on these disclosures may be implied. Disclosures may extend no further than is necessary for a fruitful consultation.[2] If it is not necessary to identify client X, if information adequate for the consultation may be conveyed in the form of hypothetical cases, if an abstract discussion of legal principles will suffice, these limitations should be observed. In any case, we conclude that A may not make a disclosure that would risk a waiver of the attorney-client privilege without client consent. Although this Commission is not authorized to opine on the Rules of Evidence, we believe that such a risk would be created if A disclosed a privileged communication received from X to B without establishing an attorney-client relationship between B and X. B's agreement not to disclose the information communicated by A may not plug this hole, although we conclude it would suffice to protect the client's interest in maintaining the confidentiality of a mere secret. If X were to consult B directly "with a view of obtaining professional legal services" from B, the communication would be privileged even if B later declined to provide, or X declined to request, those services. It is not, however, clear that the privilege survives if A makes the disclosure for X as an intermediary.
The Board of Overseers has also asked the Commission whether Attorney A's consultation with Attorney B occurs in the context of an attorney-client relationship and under circumstances such that communications occurring in the course of the discussion would be privileged. When consultation is for the benefit of the client, an attorney-client relationship between B and X may arise if B agrees to become additional counsel to X or if B's conduct leads X or A reasonably to conclude that such an agreement has been made. In such a case both of them will represent the same client. Maine Rule of Evidence 502(b)(5) recognizes that the attorney-client privilege extends to such communications. If B does not agree to become additional counsel to X, the situation is somewhat ambiguous. It could be argued that B is nevertheless a "representative" of attorney A, just as a lay expert retained to assist A in providing legal services to X may be a "representative" of A as that word is used in Rule 502. The Commission is not aware of a decision that resolves this question and is not authorized to offer its own opinion.
When Attorney A consults Attorney B for the purpose of obtaining advice about the Bar Rules or about potential malpractice or a similar collateral issue, we are not able to say that an attorney-client relationship arises between X and B. Whether an attorney-client relationship has arisen between A and B will depend upon the expectations of each and the circumstances of the consultation. If Attorney A has made disclosures for the purpose of facilitating the rendition of professional legal services consisting of advice from Attorney B, the communication would appear to be privileged, and at least for that purpose, an attorney-client relationship between A and B has apparently come into existence.
Finally, the Board asks whether it makes any difference if Attorney B is Bar Counsel. It is clear from the discussion thus far that there are differences. Disclosures to Bar Counsel will be permitted by Rule 3.6(h)(3), in view of our interpretation of this paragraph, if they are reasonably necessary to avoid violation of the Bar Rules or to defend Attorney A against an accusation of violation of the Bar Rules. On the other hand there can be no implied authority to disclose confidences and secrets in furtherance of representation of client X. Although it is not out of the question that Bar Counsel's expertise might be useful in representing a client, for example in a legal malpractice action, Bar Counsel does not engage in the private practice of law and is consequently not someone who can be associated with Attorney A in representation of Client X. Second, for similar reasons, Bar Counsel may not form an attorney-client relationship with Attorney A if the purpose of the consultation is to obtain advice about Attorney A's conduct. Consequently, disclosures to Bar Counsel will not be privileged. This is not to say that there are no constraints on Bar Counsel's disclosure of information conveyed by an attorney during an informal consultation. Bar Rule 11(f) imposes broad confidentiality requirements for the protection of information communicated for the purpose of obtaining an advisory opinion. Although housed in the Rule that creates and authorizes the Professional Ethics Commission, the policy underlying Rule 11(f) would appear to be applicable also to Bar Counsel when exercising the authority to provide informal advisory opinions conferred by Board Regulation 28.
The Commission is mindful that its conclusions depart in certain respects from the conclusions reached by The ABA Committee on Professional Ethics in Formal Opinion 98-411, August 30, 1998, Ethical Issues in Lawyer-to-Lawyer Consultation. The differences are not, in our view, significant and for the most part arise from differences between Maine Bar Rule 3.6(h) and Model Rule 1.6. For a more detailed discussion of the topics of this opinion, see Professional Lawyer, 1997 Symposium Issue, ABA, Center on Professional Responsibility. Although not part of Bar Counsel's question, the Commission also observes that the consulted lawyer may find it appropriate to consider the possibility that the consultation creates a disqualification to represent parties adverse to X in the matter on which consultation occurred and related matters.
Footnotes
[1] This assumption is required to formulate a question worthy of an opinion. in most cases it should be possible for a cautious and minimally competent attorney to seek and obtain the advice required without disclosing any confidences or secrets of the client or disqualifying the consulted attorney from future participation in the matter, by using hypothetical cases and other familiar devices to mask reality.
[2] The attorney must make a reasonably accurate judgment about the client's chance of benefitting from a disclosure. See In re Pressly, 628 A.2d 927 (Vt. 1993). A disclosure made for the purpose of dumping the client's case on another lawyer, without consent, does not count. See In re Mandelbaum, 514 N.W.2d 11 (Wis. 1994).
Enduring Ethics Opinion
Opinion #19. Disqualification of Deputy Attorney General Entering Private Practice
Issued by the Professional Ethics Commission
Date Issued: January 15, 1981
The Commission has been asked for an advisory opinion by an attorney presently employed as a Deputy Attorney General for the State of Maine. The attorney contemplates joining a large Maine law firm which is involved in many cases against the State. We are asked to advise as to the extent this attorney and the private firm would become disqualified from handling present and future cases against the State.
Facts
The attorney has for ten years worked for the Attorney General?s office and, since 1976, has been a Deputy Attorney General. In such capacity he has had general responsibility for the supervision of civil litigation in that office including reviewing civil suits initiated by the State of Maine or brought against the State, approving all appeals in civil suits, reviewing appellate briefs, consulting with other members of the Attorney General?s staff with respect to investigations, opinions, and the conduct of litigation and, at the request of the Attorney General, directly assuming responsibility for particular lawsuits and legal problems. The actual supervisory responsibility exercised in any particular instance varied greatly. In some instances, he was personally involved in a matter. In other cases, he was not involved at all and his general supervisory power was not, in fact, exercised. During this period the Attorney General?s Department represented, with a few exceptions, nearly all agencies, commissions and administrative bodies of the State and the Executive branch and the Legislature. The attorney has also personally represented a number of those agencies in various matters, has drafted a substantial number of regulations and has done statutory drafting.
The firm which the attorney contemplates joining represents a variety of clients who are involved in pending administrative or regulatory proceedings before state agencies, and are negotiating or litigating with, or are subject to investigation by the Attorney General or agencies represented by his Department. With respect to some of those matters, the inquiring attorney has been directly and personally involved either as counsel of record, as consultant to other members of that Department, or in reviewing and approving investigations, legal positions and advice or pleadings. In other instances, he has neither been personally involved in, aware of, nor exercised actual authority or supervision over such matters.
Issues
The Maine Bar Rules applicable to this case are 3.4(h) and 3.4(k). They provide, respectively, as follows:
(h) Prior Service as Public Official. A lawyer shall not accept private employment in a matter in which he held substantial and relevant responsibility while he was a public official or employee.
(k) Partners and Associates Barred. If, for reasons other than health, a lawyer is required to decline employment or to withdraw from employment under these rules, no partner or associate, and no lawyer affiliated with him or his firm, may accept or continue such employment.
The effect of these Rules is to create two major questions: (1) What disqualifications would be imposed on the Deputy Attorney General himself if he goes into private practice, and (2) what disqualifications would be imposed upon the firm which contemplates hiring him? Each of these questions has many sub‑parts in that distinctions may need to be made among those cases in which the inquiring attorney actively participated, those which he had theoretical responsibility for but no actual participation, those which involved the Attorney General?s office but not the division supervised by the inquiring attorney, and those cases involving laws or regulations which the inquiring attorney helped draft.
Discussion
The provisions of Maine Bar Rules 3.4(h) and 3.4(k) have been only slightly modified from their predecessors in the Code of Professional Responsibility. Rule 3.4(h) is directly descended from DR 9‑101(B)[1] and Rule 3.4(k) is the offspring of DR 5‑105(d).[2] As a result, we are aided in our analysis of the Maine Bar Rules by a substantial body of prior decisions by ethics committees and courts.[3]
I. The Disqualifications of the Former Government Attorney Himself.
As indicated above, Rule 3.4(h) controls what cases a former government attorney must decline after going into private practice. The language of that Rule is, however, not free from ambiguity. The phrase ?. . . a matter in which he has held substantial and relevant responsibility. . . .? needs closer analysis.
In 1975 the American Bar Association?s Committee on Ethics and Professional Responsibility issued Formal Opinion 342 which broke with prior precedent and custom tending to strictly construe DR 9‑101(B), the predecessor to Rule 3.4(h). The ABA analyzed the policy considerations for and against strict construction as follows:
The policy considerations underlying DR 9‑101(B) have been thought to be the following: the treachery of switching sides; the safeguarding of confidential governmental information from future use against the government; the need to discourage government lawyers from handling particular assignments in such a way as to encourage their own future employment in regard to those particular matters after leaving government service; and the professional benefit derived from avoiding the appearance of evil.
There are, however, weighty policy considerations in support of the view that a special disciplinary rule relating only to former government lawyers should not broadly limit the lawyer?s employment after he leaves government service. Some of the underlying considerations favoring a construction of the rule in a manner not to restrict unduly the lawyer?s future employment are the following: the ability of government to recruit young professionals and competent lawyers should not be interfered with by imposition of harsh restraints upon future practice nor should too great a sacrifice be demanded of the lawyers willing to enter government service; the rule serves no worthwhile public interest if it becomes a mere tool enabling a litigant to improve his prospects by depriving his opponent of competent counsel; and the rule should not be permitted to interfere needlessly with the right of litigants to obtain competent counsel of their own choosing, particularly in specialized areas requiring special, technical training and experience.
Formal Opinion 342 goes on to analyze the terms ?matter? and ?substantial responsibility? in this way:
Although a precise definition of ?matter? as used in the Disciplinary Rule is difficult to formulate, the term seems to contemplate a discrete and isolatable transaction or set of transactions between identifiable parties. Perhaps the scope of the term ?matter? may be indicated by examples. The same lawsuit or litigation is the same matter. The same issue of fact involving the same parties and the same situation or conduct is the same matter. By contrast, work as a government employee in drafting, enforcing or interpreting government or agency procedures, regulations, or laws, or in briefing abstract principles of law, does not disqualify the lawyer under DR 9‑101(B) from subsequent private employment involving the same regulations, procedures, or points of law; the same ?matter? is not involved because there is lacking the discrete, identifiable transactions or conduct involving a particular situation and specific parties.
As used in DR 9‑101(B), ?substantial responsibility? envisages a much closer and more direct relationship than that of a mere perfunctory approval or disapproval of the matter in question. It contemplates a responsibility requiring the official to become personally involved to an important, material degree, in the investigative or deliberative processes regarding the transactions or facts in question. Thus, being the chief official in some vast office or organization does not ipso facto give that government official or employee the ?substantial responsibility? contemplated by the rule in regard to all the minutiae of facts lodged within that office. Yet it is not necessary that the public employee or official shall have personally and in a substantial manner investigated or passed upon the particular matter, for it is sufficient that he had such a heavy responsibility for the matter in question that it is unlikely he did not become personally and substantially involved in the investigative or deliberative processes regarding that matter. With a responsibility so strong and compelling that he probably became involved in the investigative or decisional processes, a lawyer upon leaving the government service should not represent another in regard to that matter. To do so would be akin to switching sides, might jeopardize confidential government information, and gives the appearance of professional impropriety in that accepting subsequent employment regarding that same matter creates a suspicion that the lawyer conducted his governmental work in a way to facilitate his own future employment in that matter.
The element of ?substantial responsibility? as so construed should not unduly hinder the government in recruiting lawyers to its ranks nor interfere needlessly with the right of litigants to employ technically skilled and trained former government lawyers to represent them.
The ABA?s liberalization of the definitions of ?matter? and ?substantial responsibility? have not met with universal acceptance by other bar committees and commentators. See, e.g., the analysis in the Annotated Code of Professional Responsibility, supra, pp. 424‑428. A major thrust of the critics has been that Formal Opinion 342 does not sufficiently protect against the ?appearance of impropriety? that arises from the attorney switching sides. This issue arises, however, primarily because the structure of The Code of Professional Responsibility placed DR 9‑101(B) under the maxim of Canon 9, ?A Lawyer Should Avoid Even the Appearance of Professional Impropriety.? But, as the ABA?s opinion pointed out, ?the appearance of professional impropriety is not a standard, test or element embodied in DR 9‑101(B) . . .? and the appearance of evil is ?. . . probably not the most important reason for the creation and existence of the rule itself.?
The Commission agrees with the analysis of the ABA. Our conclusion is supported by two factors unique to Maine Bar Rule 3.4(h). One is that restructuring from The Code of Professional Responsibility to the Maine Bar Rules has dispensed with any rules about avoiding ?even the appearance of impropriety? and, therefore, Rule 3.4(h) no longer even implies, as did DR 9‑101(B), that this should be a significant factor in its application. The second factor which distinguishes DR 9‑101(B) from the Maine rule is that the former uses the expression ?substantial responsibility,? while the latter says ?substantial and relevant responsibility.? This addition can only be interpreted as a further limitation on the number of situations in which a former government attorney would be disqualified.
Accordingly, the Commission adopts the ABA?s definitions of ?matter? and ?substantial responsibility? as quoted above. The application of these definitions to particular facts will of course have to be done on a case by case basis, and there will still be some grey areas. It is possible that the inquiring attorney and the attorney general himself can resolve some of these but, if not, the Courts or the Commission are available for analyzing individual cases when the specific facts are presented.
II. The Disqualifications of the Former Government Attorney?s
New Private Firm.
Assuming cases exist which, upon joining his new firm, the inquiring attorney will be barred from handling, or that such cases arise thereafter, will this automatically require the firm to drop such existing cases or refuse such future cases? Rule 3.4(k) and its predecessor DR 5‑105(D) on their face require such disqualifications. Nevertheless, there is precedent to the effect that with the adoption of sufficient procedures designed to isolate the disqualified attorney from participation, the other members of his firm may handle such cases.
The ABA?s Formal Opinion 342, discussed above, also addressed this issue of ?vicarious disqualification? as follows in part:
The extension by DR 5‑105(D) of disqualification to all affiliated lawyers is to prevent circumvention by a lawyer of the Disciplinary Rules. Past government employment creates an unusual situation in which inflexible application of DR 5‑105(D) would actually thwart the policy considerations underlying DR 9‑101(B). The question of the application of DR 5‑105(D) to the situation in which a former government employee would be in violation of DR 9‑101(B) should be considered in the light of those policy considerations, viz: opportunities for government recruitment and the availability of skilled and trained lawyers for litigants should not be unreasonably limited in order to prevent the appearance of switching sides, yet confidential information should be safeguarded, and government lawyers should be discouraged from handling particular assignments in such a way as to encourage their own future employment in regard to those particular matters after leaving government service. The desire to avoid the appearance of evil, even though less important, must be considered. A realistic construction of DR 5‑105(D) should recognize and give effect to the divergent policy considerations when government employment is involved.
. . . DR 9‑101(B)?s command of refusal of employment by an individual lawyer does not necessarily activate DR 5‑105(D)?s extension of that disqualification. The purposes of limiting the mandate to matters in which the former public employee had a substantial responsibility are to inhibit government recruitment as little as possible and enhance the opportunity for all litigants to obtain competent counsel of their own choosing, particularly in specialized areas. An inflexible extension of disqualification throughout an entire firm would thwart those purposes. So long as the individual lawyer is held to be disqualified and is screened from any direct or indirect participation in the matter, the problem of his switching sides is not present; by contrast, an inflexible extension of disqualification throughout the firm often would result in real hardship to a client if complete withdrawal of representation was mandated, because substantial work may have been completed regarding specific litigation prior to the time the government employee joined the partnership, or the client may have relied in the past on representation by the firm.
All of the policies underlying DR 9‑101(B), including the principles of Canons 4 and 5, can be realized by a less stringent application of DR 5‑105(D). The purposes, as embodied in DR 9‑101(B), of discouraging government lawyers from handling particular assignments in such a way as to encourage their own future employment in regard to those particular matters after leaving government service, and of avoiding the appearance of impropriety, can be accomplished by holding that DR 5‑105(D) applies to the firm and partners and associates of a disqualified lawyer who has not been screened, to the satisfaction of the government agency concerned, from participation in the work and compensation of the firm on any matter over which as a public employee he had substantial responsibility. Applying DR 5‑105(D) to this limited extent accomplishes the goal of destroying any incentive of the employee to handle his government work so as to affect his future employment. Only allegiance to form over substance would justify blanket application of DR 5‑105(D) in a manner that thwarts and distorts the policy considerations behind DR 9‑101(B).
Our conclusion is further supported by the fact that DR 5‑105(C) allows the multiple representation that is generally forbidden by DR 5‑105(A) and (B),[4] where all clients consent after full disclosure of the possible effect of such representation.[5] DR 5‑105(A) and (B) deals, of course, with much more egregious contingencies than those covered by DR 9‑101(B). It is unthinkable that the drafters of the Code of Professional Responsibility intended to permit the one afforded protection by DR 5‑105(A) and (B) to waive that protection without also permitting the one protected by DR 9‑101(B) to waive that less‑needed protection. Accordingly, it is our opinion that whenever the government agency is satisfied that the screening measures will effectively isolate the individual lawyer from participating in the particular matter and sharing in the fees attributable to it, and that there is no appearance of significant impropriety affecting the interests of the government, the government may waive the disqualification of the firm under DR 5‑105(D). In the event of such waiver, and provided the firm also makes its own independent determination as to the absence of particular circumstances creating a significant appearance of impropriety, the result will be that the firm is not in violation of DR 5‑105(D) by accepting or continuing the representation in question.
Relying heavily on Formal Opinion 342 the United States Court of Claims has applied the screening mechanism to prevent the vicarious disqualification of a former government attorney?s new firm. See Kesselhaut v. United States, 555 F.2d 791 (Ct. Cl. 1977), where the Court said, at pp. 793‑4:
Should an attorney, having left Government perhaps contrary to his own volition, ineluctably infect all the members of any firm he joined with all his own personal disqualifications, he would take on the status of a Typhoid Mary, and be reduced to sole practice under the most unfavorable conditions. There will be instances where no screening procedure will be adequate, and the infection must be allowed to take its course. When screening is used it must, as here, be specific and inflexible. Each case depends on its own merits.
The iron rule urged by the trial judge would act as a strong deterrent to the acceptance of Government employment by the most promising class of young lawyers. Indeed, in fairness to them, it would be necessary to warn them before signing on, of the disabilities likely to be incurred at a later date. Attorneys having both private and Government experience are often better qualified to be of value to the courts, as their officers, and to their clients, public and private, than those having one or the other experience alone. If interchange between the private and public sectors of the bar is to be halted, and careers in such sectors made matters of separate tracks that will never converge, it should be only upon full consideration of all the legal incidents of Government employment of lawyers, and it should be done overtly, and not achieved as a collateral consequence of a disciplinary rule ostensibly having other purposes.
On the other side, the conclusion that screening may be an effective alternative to disqualification of an entire firm has had substantial criticism. See, e.g., the analysis in the Annotated Code of Professional Responsibility, supra, pp. 433‑438. The Annotated Code describes a tentative draft of the Legal Ethics Committee of the District of Columbia Bar prepared in 1976 as follows:
In the opinion, the District of Columbia committee found that the ABA Committee, in Opinion 342, was fundamentally in error when it rejected the criterion of appearance of professional impropriety and stated that an already suspicious public was not likely to appreciate sophisticated justifications of otherwise questionable practices. It then cited eight policy considerations supporting a strict construction of the vicarious disqualification principle applied in conjunction with DR 9‑101(B): (1) the protection of the confidentiality of government matters, matters properly withheld from the public; (2) the unfair advantage to one private party when the former government attorney effectively ?sells? inside information to a client rather than making it public; (3) the danger that current agency employees might show favoritism to their former agency colleague; (4) the appearance of opportunism in the attorney who ?switches sides?; (5) the danger that private firms would attempt to hire an agency?s key members in order to impair its effectiveness; (6) the abuse of government power by agency lawyers anxious to curry favor with future employers at the public?s expense; (7) the danger that agency attorneys would use their official positions to obtain an advantage against an individual who might be a defendant in subsequent private litigation; and (8) the danger that agency attorneys would attempt to obtain private employment in order to either uphold or upset action taken while they were public employees.
In the Tentative Draft Opinion to Inquiry 19, the District of Columbia committee found the screening procedure recommended by Formal Opinion 342, November 25, 1975, objectionable not only because it represented an exception not even implied in the text of the Code but also on five policy grounds. The committee objected to screening because: (1) it did not preclude favoritism being shown to a firm by the agency; (2) the policing of potential breaches of confidentiality was not provided for; (3) it was irrelevant to the problem of the hiring of key agency personnel by a firm or the attempt of an agency attorney to curry favor with a potential employer; (4) agency attorneys were likely to give routine consent in order to protect their future employment prospects; (5) it compounded and aggravated the fundamental problem of appearances of impropriety.
This tentative draft received a majority vote of the members of the Ethics Committee but failed to receive enough votes for adoption under the Committee?s rules.
The Commission concludes that it is bound by the plain language Maine Bar Rule 3.4(k) automatically disqualifying the entire firm when the former government attorney is disqualified.
Footnotes
[1] DR 9‑101(B). ?A lawyer shall not accept private employment in a matter in which he had substantial responsibility while he was a public employee.?
[2] DR 5‑105(D). ?If a lawyer is required to decline employment or to withdraw from employment under a Disciplinary Rule, no partner, or associate, or any other lawyer affiliated with him or his firm, may accept or continue such employment.?
[3] See generally, Annotated Code of Professional Responsibility, 1979, pp. 417‑437.
[4] These sections deal with conflict of interest comparable to Maine Bar Rules 3.4(b) and 3.4(c).
[5] This is also true under Maine Bar Rule 3.4(d).
Enduring Ethics Opinion
Opinion #170. Attorneys' and Clients' Agreement to Arbitrate Future Malpractice Claims
Issued by the Professional Ethics Commission
Date Issued: December 23, 1999
QUESTION
May an attorney at the outset of representation enter into an agreement with a client by which the attorney and the client mutually agree to submit to binding arbitration any and all malpractice claims that may arise out of the representation?
OPINION
There is no language in the Maine Bar Rules that directly addresses the subject of arbitration agreements with clients on matters other than fees. See Rule 3.2(f)(3). We have previously opined that a lawyer and a client may at the time of engagement enter into an agreement mandating the arbitration of any fee dispute as long as the agreement does not purport to abrogate the client's ability to have the arbitration conducted pursuant to Rule 9. See Opinion No. 151 (May 12, 1995). The rationales identified in Opinion No. 151 were several: the Commission should not add ethical prohibitions not suggested by the drafters of the rules, citing Opinion No. 146; there is a "strong public policy favoring arbitration," citing Anderson v. Elliott, 555 A. 2d 1042, 1044 (Me. 1989); a prohibition on arbitration as applied to agreements in interstate commerce might be unconstitutional, citing Allied-Bruce Terminex Companies Inc. v. Dobson, 513 U.S. 265 (1995); and, finally, a retention or engagement agreement does not constitute a covered "business transaction" between a lawyer and client within the meaning of Rule 3.4(f)(2)(i). Each of these rationales applies fully to the question posed here.
The dissent nevertheless argues that this question, unlike the question posed in Opinion No. 151, also implicates Rule 3.4(f)(2)(v), which precludes a lawyer from entering into an agreement with a client that prospectively "limits the lawyer's liability to a client for malpractice."[1]
We respectfully disagree. There is nothing in the language of the rule, or its history, to support the proposition that a mutual agreement on a neutral forum within which to adjudicate a lawyer's future liability is an agreement "limiting the lawyer?s liability." An agreement to limit liability is, in substance, an agreement that says that even though the lawyer errs in fulfilling certain duties to the client, the lawyer will not be liable to the extent that common and statutory law would otherwise make the lawyer liable. Perhaps if a particular forum had rules that themselves limited liability, then selection of such a forum could fairly be said to limit liability indirectly. Or if the arbitration agreement were a sham, such as an agreement to arbitrate before the lawyer's partner, then one could argue that its practical effect was to limit liability. Mutually agreed upon arbitration pursuant to the state and federal acts entail no such liability limiting rules. Nor is an agreement to arbitrate before a fair arbitrator selected at the time of the dispute, or appointed by the court, a sham. The arbitrator to whom resort would be made pursuant to the proposed agreement thus remains as unlimited as any judge or jury, and perhaps more so[2], in his or her freedom to find the lawyer liable, and to award any and all compensation or other damages that a court could award. If at the outset of the proceeding one were to ask such an arbitrator?or the parties?whether there was any agreement limiting the lawyer's liability in the proceeding, the answer would of necessity be "no." The same answer prevails here.
Therefore, unless we are to stretch the words of the Rules beyond fair meaning, it cannot be said that an agreement to arbitrate is an agreement to limit liability. Rather, it must be argued that an agreement to arbitrate is an agreement to select a forum within which the unlimited liability of the lawyer will be determined by a person who, although fair and unlimited, may nevertheless on average be less predisposed than a juror to rule against a lawyer qua lawyer, and therefore the odds that the trial will result in a finding of liability are affected. Or, as the dissent also suggests, it is an agreement to select a form of dispute resolution in which the outcome will hinge more on the facts and the law than on the tangential threat of publicity, thus affecting the "leverage" that the threat of publicity offers to the person suing the lawyer (i.e., the lawyer might pay even though not liable).
Whatever one thinks of such contentions, the simple fact remains that the Rules themselves do not prohibit agreements that have those effects. Because those effects are predicated upon a jaundiced view of arbitration that is contrary to public policy, see Roosa v. Tillotson, 695 A. 2d 1196, 1197 (Me. 1997) ("Maine has a broad presumption favoring substantive arbitration"), before adopting the dissent's view one should insist on at least some suggestion by the Rules' drafters that they so imprecisely sought to enact the prohibition inferred by the dissent. If clergy, doctors, fiduciaries of all sort, and so on, can all enter into prospective ADR agreements with their clients under the state and federal arbitration laws, there is no reason, a priori, to think the drafters of the rules silently decided that lawyers cannot. Rather, we presume as we must that they decided what they plainly stated: a lawyer cannot enter into agreements that prospectively limit the lawyer's liability.
If we were to accept the proposition that agreements that do not limit liability, but that might affect the odds of a liability finding or the leverage of the parties in negotiating a settlement, were implicitly prohibited by the Bar Rules, we would then call into question many well-accepted, even laudable practices. For example, the Bar Rules do not require that client consents to multiple representations be in writing. A careful lawyer, however, will often insist that a client sign a written agreement setting forth the terms of consented-to multiple representation. A reason for requiring the client to enter into such an agreement is that it will reduce the likelihood of future claims. Indeed, if you were to require a careful lawyer to choose between arbitration agreements and written multiple representation agreements, and if the lawyer's sole objective were to reduce exposure to malpractice judgments, the lawyer might well choose the latter over the former. In short, if an effect on the future odds of liability were to be our benchmark, many agreements would qualify for prohibition.
Additionally, while a belief that arbitrators might be less predisposed than jurors to award large damages against a lawyer will undoubtedly provide the motive for some lawyers to propose arbitration agreements, both lawyer and client may well have reasons for wanting to enter into an arbitration agreement that have nothing whatever to do with the odds of winning some future quarrel. Reducing transaction costs or, even more probably, achieving a degree of confidentiality might motivate lawyer, client, or both. Clients forced to sue in court run a serious risk of putting their confidences and secrets into the public record, M.R. Evid. 502(d)(3), and thus may be deterred from making a claim. Generally speaking, arbitration is faster, and less expensive. Because the lawyer would therefore know that he or she couldn't drag the client through years of expensive litigation, the lawyer is more likely to settle at a higher rate. For small claims in particular, the arbitration agreement may increase the likelihood of a liability finding, because it will increase the likelihood that a claim will be made.
We do recognize that other jurisdictions are split on the issue at hand. Ohio flatly prohibits such a clause. Ohio Ethics Opinion 96-9. California permits it. California State Bar Formal Opinion 1989-116. Others permit the clause with conditions. Arizona Ethics Opinion 94-05; District of Columbia Ethics Opinion 211, Virginia Legal Ethics Opinion 1707. Coloring some of the various opinions from other states, we think, is a distaste for arbitration. Both Congress and Maine's Legislature, however, have concluded that arbitration clauses are among the few contractual clauses meriting statutory approval and mandatory enforcement. We are not comfortable being in the position of suggesting in any way that such a form of dispute resolution is less favored in cases involving lawyers.
For the reasons stated above, particularly those set forth in our own Opinion No. 151, we conclude that a lawyer and a client may indeed, under the Maine Bar Rules, include in their initial engagement agreement a clause compelling arbitration of any and all malpractice claims as long as the clause does not preclude the client from requiring resolution of any fee disputes pursuant to Rule 9.
Finally, there is the related issue of whether the lawyer must advise the client to obtain independent advice before entering into an agreement to arbitrate prospective disputes. The theory supporting such a requirement would be that the lawyer and client have a conflict of interest on the matter. See Maine Bar Rule 3.4(f)(2). Yet this is true in theory of everything that is the engagement agreement, most especially, for example, the percentage fee provision in a contingent fee agreement. We do think that the arbitration clause should be clear and should expressly reserve both the client's right to compel Rule 9 arbitration over any fee dispute and the ability to file grievance complaints under Bar Rule 7.1(a), but we do not conclude that the presence of such an arbitration clause in an engagement agreement, without more, requires that the client be advised to consult other counsel.
Footnotes
[1] ?A lawyer shall not make an agreement prospectively limiting the lawyer's liability to a client for malpractice; nor shall a lawyer settle a claim for such liability with an unrepresented client or former client without first advising that person in writing that independent representation is appropriate in connection therewith. This rule shall not prevent a lawyer from settling or defending a malpractice claim."
[2] Compare 14 M.R.S.A. § 5938 (limited grounds for overturning arbitration award) with M.R. Civ. P. 50, 59 and 60.
DISSENT
Three members dissent from the majority opinion. The majority opinion adopts an overly technical reading of the phrase "limiting the lawyer's liability." By specifying the forum in which he can be sued for malpractice, an attorney has in practical fact limited his liability in violation of Rule 3.4(f)(2)(v). It is akin to pretending that the emperor is fully clothed to suggest that an attorney would not prefer to have his malpractice case heard by an arbitrator rather than by a jury. Indeed, if it were otherwise, why would a lawyer seek to include such restrictive language in his fee agreements?
A study of 337 arbitration cases involving National Association of Securities Dealers revealed that employers succeeded in defeating discrimination claims 90.47% of the time. The authors of the article in which the survey is reported state the obvious:
Certainly, this unofficial survey suggests that employers stand a greater chance of success in arbitration than in court before a jury.
Bompey, Delikat & McClelland, 13 The Labor Lawyer 21,66 (Summer 1997).
There are other disadvantages to the arbitral forum which potentially limit the attorney's liability for malpractice by limiting his client's ability to prove his case. In Alexander v. Gardner-Denver, 415 U.S. 36, the Supreme Court noted that, in arbitration, the record of the proceedings is not as complete, the rules of evidence do not apply, and discovery and process to compel the attendance of witnesses are limited or nonexistent. Id. at 57-58. In addition, under normal circumstances, punitive damages are unavailable.
Attorneys would naturally prefer to litigate malpractice claims in the arbitral forum because the proceedings are private.[1] The effect, however, is to deny clients an important source of leverage in settling their malpractice claims. Under these circumstances, it is not surprising that attorneys would prefer to avoid defending such claims in the courtroom. It is equally obvious that they violate Rule 3.4(f)(2)(v) by requesting their clients to do so.
No helpful legislative history has been found regarding Rule 3.4(f)(2)(v) which was adapted from DR6-102(A) of the Model Code of Professional Responsibility. However, it seems apparent that the rule was intended to protect unsophisticated clients from being induced to give up, at the inception of the attorney-client relationship, valuable remedies to redress future wrongdoing on the attorney's part. Moreover, unlike the hypothetical agreements discussed in the majority opinion, the client's acceptance of the arbitral forum is given essentially without consideration. Rule 3.4(f)(2)(v) was surely intended to protect clients in such vulnerable circumstances from being persuaded to enter such one-sided agreements limiting their right to recover damages from their attorneys.
Footnote
[1] The majority opinion suggests that a sophisticated client actually might prefer arbitration to protect the privacy of his affairs. In such a case, an attorney could agree to submit a malpractice claim to arbitration at the client's request as long as the right to arbitrate were not reciprocal.
Enduring Ethics Opinion
Enduring Ethics Opinion #170 [February 2015]
Opinion #20. Disclosure of Client's Whereabouts
Issued by the Professional Ethics Commission
Date Issued: January 15, 1981
Facts
H & W were divorced in 1975, and W was awarded custody of the minor child, with rights of visitation granted to H. After some time during which the exercise of visitation by H was strained, W moved out of State. W has had no contact with H and has permitted no visitation between H and C. He brought a motion to amend the custody decree. When retained by W, attorney A was expressly directed by W to keep the whereabouts of W and C confidential. Upon motion by H, the court has ordered A to provide the court with the address of child, C.
Question
In the face of the court?s order, what is the ethical obligation of attorney A.
Discussion
Rule 3.6(l)(1) of the Bar Rules provides:
(1) Except as permitted by these rules or as required by law or by order of court, a lawyer shall not, without the informed written consent of the client, knowingly reveal a confidence or secret of his client. . . . (emphasis added).
By its terms, the Rule creates an exception to the obligation a lawyer owes to his client to preserve confidences of his or her client.
Conclusions
A valid court order requiring an attorney to disclose a confidential communication relieves the attorney of a violation of Rule 3.4(l). The exception apparently applies in the present case. The lawyer should, however, be satisfied that the Order is valid.
Enduring Ethics Opinion
Opinion #21. Representation of Passenger and Driver in Personal Injury Case
Issued by the Professional Ethics Commission
Date Issued: January 15, 1981
Facts
Client W was involved in an auto accident while driving a vehicle owned by her husband, client H. The child of H & W was a passenger in the automobile and was killed in the accident. The inquiring attorney has filed a civil action on behalf of W, for her personal injuries, and on behalf of H, for his property damage claim, for loss of consortium, as next friend of the deceased child of H & W and as Administrator of the child?s estate. The defendant is the operator of the other automobile. The attorney asserts that all his clients agree the operator of the other automobile was solely negligent. The operator of the other automobile has, however, filed a counterclaim and third party claim for contribution against client W. H & W have no insurance. The defendant is insured. The attorney has reviewed the potential liability of W for damage to the property of H and for the death of their child with both H & W and both consent to the lawyer?s representation of both of them.
Opinion
We conclude that the attorney may not represent client W at the same time as he is representing client H, in his own capacity and as a surrogate for their minor child. Maine Bar Rules 3.4(b) and (c) prohibit the acceptance and continuation of multiple employment when the attorney?s independent professional judgment on behalf of one client is likely to be adversely affected by his representation of another or if the attorney would be representing differing interests. An attorney may represent multiple clients only if it is obvious that he can adequately represent the interests of each and each consents to representation after full disclosure of the possible effect of such representation on the exercise of the lawyer?s independent professional judgment.
If clients H & W were estranged, or if they were not husband and wife, it would be apparent that the representation undertaken could involve the attorney in representing differing interests and also could involve the kind of multiple employment in which exercise of the attorney?s independent professional judgment in behalf of one client could be adversely affected by his representation of the other. Stripped of the marital relationship, this is a case of an automobile accident in a borrowed car with an injured passenger. In such circumstances the driver of the borrowed car is at least potentially a defendant in the car owner?s suit for property damages and in the passenger?s suit for personal injury. In the present case, W as the driver has been brought into the action as a third party defendant, thus becoming formally aligned in opposition to the attorney?s other clients, H in his own behalf, and H as a representative of the estate of the passenger. The opposition of H & W could become substantive as well as formal. An attorney representing W could well advise his client, not only to defend on the grounds of lack of negligence, but to defend by attacking H?s proof of damages and the damages sought to be proved on behalf of the child?s estate.
Multiple representation in situations like this has in the past been approved and disapproved with little apparent regard for general principles. ABA Informal Opinion 723 disapproved representation of driver and passenger unless there was no possible liability of driver to passenger. Otherwise, the opinion would not have allowed dual representation even with consent, and the Committee noted that in any case it would be better that the same attorney not represent both parties. N.Y. State Opinion 349 expressed similar views. On the other side of the issue, for example, was Opinion 198 of the Michigan Bar Association dated November, 1963.
Prior to adoption of the ABA Code of Professional Responsibility it was the general rule that consent by an informed client would permit the representation of differing interests. Now the rule, in Maine, and nearly everywhere else, is that consent will not sanction multiple employment unless it is obvious that the attorney can adequately represent the interests of each client. As the Reporter?s Notes to Rule 3.4(b) express it, ?if his capability [to provide adequate representation for each client with a differing interest] requires substantial explanation the condition cannot be met.?
It is suggested that in the present case, there is no conflict of interest because clients H & W agree on the strategy to be followed by the attorney and agree that the driver of the other car, not W, was at fault. This, however, merely seeks to explain why H & W consent to multiple employment. This consent does not make it obvious that the same attorney can represent passenger and driver in the present case. Since consent alone will not remove the bar to representation of differing interests, the desire of the parties that their interests not conflict and their wish to avoid conflict will not do so when it is not otherwise obvious that each party will be represented adequately. In the present case it is not obvious, since the key issue of W?s potential liability cannot be resolved on the facts available to the Commission and would require ?substantial explanation? in any event.
It is not material that H and W are the sole heirs of the deceased minor. They are still potentially adverse as to one‑half of the minor?s estate. Nor is it material that they are uninsured.[1] We do not know what assets might eventually become available to satisfy a judgment against W.
Footnote
[1] Cf. M.S.B.A. Opinion No. 40 of 4/14/73 in which an insurance company, the real party in interest in owner?s suit against driver of the other car, was assumed to be the liability carrier, obliged as such to defend a third party complaint against the owner?s son, who was driving his car. Since there was but one interested party, the insurance company, the opinion held that the same attorney could represent the plaintiff owner and the third party defendant driver.
Enduring Ethics Opinion
Opinion #22. Obligation of Lobbyist to Former Clients
Issued by the Professional Ethics Commission
Date Issued: January 15, 1981
Question
The XYZ law firm has for several years represented an association of trial attorneys as a lobbyist in Augusta. XYZ has advised the association that it has accepted employment as a lobbyist on behalf of an association representing the interests of liability insurance companies and, to avoid potential conflicts of interest in the future, will no longer represent the trial attorneys? group. The trial attorneys have not consented to this new representation and have threatened to initiate legal action if it is consummated. The parties have jointly requested an opinion from the Grievance Commission as to the propriety of the proposed change in clients under Bar Rule 3.
Opinion
We agree with the parties that the answer to the question presented turns on the construction of Rule 3.4(e) which provides that:
(e) Interest of Former Client. A lawyer shall not accept employment adverse to a former client without that client?s informed consent if such new employment involves the subject matter of the former employment or may involve the use of confidential information obtained through such former employment.
In a memorandum submitted by XYZ in support of its position, it has been suggested that lobbying activities do not lend themselves to the ?subject matter? test of Rule 3.4(e) and therefore are not regulated by it. The Commission rejects the contention that lobbying, when performed by a lawyer, is not an aspect of the practice of law which it was the intention of the rules draftsmen to regulate. The scope of the Bar Rules is broadly stated to encompass ?the conduct of attorneys with respect to their professional activities.? Although lobbying in the halls of the legislature is obviously different than presenting a case before a tribunal in an adversary proceeding, it does not follow that a lawyer‑client relationship with respect to such employment may not be created or that an adversial relationship may in some cases exist when conflicting forces urge the adoption or defeat of a particular bill.
Lawyer?s ethical codes have long regulated lobbying as part of an attorney?s employment. Former Canon 26 of the Canons of Professional Ethics of the American Bar Association provided that:
A lawyer openly and in his true character may render professional services before legislative or other bodies, regarding proposed legislation or in advocacy of claims before departments of government, upon the same principles of ethics which justify his appearance before the courts. . .
Regulation of such professional activities was carried forward into the Code of Professional Responsibility from which Maine Bar Rule 3 was in large measure taken. It is inconceivable that the draftsmen of the Maine Bar Rules could have intended such a drastic departure from past practice or to create such a substantial exception in the ethical standards regulating all of a lawyer?s professional activities.
The trial attorneys have contended, however, that the ?subject matter of the former employment? consists of ?all lobbying activities? on matters of interest to their association and the XYZ is therefore barred from undertaking any lobbying for the insurance interests, even with respect to matters not previously dealt with by the Maine Legislature. This argument goes too far. The Commission sees no reason why the term ?subject matter? should not be limited to particular legislative matters as to which XYZ lobbied on the trial attorneys? behalf. A former government lawyer would be precluded from engaging ever after in the specialized practice in which he had gained an expertise if the trial attorneys? broad definition of ?subject matter? to include generally his legal activities on behalf of the government agency, were accepted. On the contrary, it has been stated that:
. . . the term seems to contemplate a discrete and isolatable transaction or set of transactions between identifiable parties. . . . The same lawsuit or litigation is the same matter. The same issue of fact involving the same parties and the same situation or conduct is the same matter. By contrast, work as a government employee in drafting, enforcing or interpreting government or agency procedures, regulations, or laws, or in briefing abstract principles of law, does not disqualify the lawyer under DR 9‑101(B) from subsequent private employment involving the same regulations, procedures, or points of law; the same ?matter? is not involved because there is lacking the discrete, identifiable transactions or conduct involving a particular situation and specific parties. ABA formal op. 342, p. 6 (1975).
The trial attorneys have also argued that if XYZ is permitted to lobby for the insurance companies, it will inevitably involve the ?use of confidential information obtained through such former employment? in violation of Rule 3.4(e). This contention is based on the fact that XYZ has gained inside knowledge about the internal operations of the trial attorneys? association such as its procedures for reaching consensus, financial strengths and weaknesses, and methods for allocating contributions to individual legislators. If this argument were accepted, however, it would effectively preclude a lawyer from ever taking a case against a former client without that client?s consent since he would inevitably pick up bits and pieces of information as to the client?s idiosyncrasies such as that he was a late riser, frequently exaggerated his statements, or was afflicted with a disease which disabled him at various times particularly in cold weather. This type of information acquired largely through observation by the lawyer rather than orally is not the type of confidential information with which Rule 3.4(b) is concerned, although it might conceivably be used to gain some advantage in an adversary proceeding. A lawyer employed by the N.L.R.B. or a large private corporation would invariably learn much about the internal modus operandi of his employer which would be useful in private practice yet it has long been accepted that an attorney leaving such employment is not barred from ever accepting cases against his former employer in the future where he was not previously involved in the subject matter of the litigation. Indeed, it has been stated that:
?Many a lawyer who has served with the government has an advantage when he enters private practice because he has acquired a working knowledge of the department in which he was employed, has learned the procedures, the governing substantive and statutory law and is to a greater or lesser degree an expert in the field in which he was engaged. Certainly this is perfectly proper and ethical. . . . This is distinguishable, however, from a situation where, in addition, a former government lawyer is employed and is expected to bring with him and into the proceedings a personal knowledge of a particular matter . . .? quoting Allied Realty v. Exchange Nat. Bk., 283 F.Supp. 464 (D. Minn. 1964), aff?d in 408 F.2d 1099 (8th Cir. 1969). See also ABA inf. op. #C‑760, p. 2 quoting from Drinker, Legal Ethics 105 (1953).
Although the trial attorneys warn of the difficulties of ?line drawing? in determining whether or not a particular lobbying effort in the future concerns the ?subject matter of former employment,? the task is no different than that presented by Rules 3.4(g) or 3.4(h) and will have to be approached on a case by case basis. In general, the Commission concludes that XYZ is free to accept employment by the insurance industry to lobby with respect to matters as to which XYZ was not involved in direct lobbying efforts to secure legislative action in the past and which do not involve the use or potential use of confidential information obtained through contacts with the trial attorneys? association regarding a particular legislative matter.
Enduring Ethics Opinion
Opinion #23. Lawyer Witnessing Violation of Clients' Rights
Issued by the Professional Ethics Commission
Date Issued: August 25, 1981
Facts
In the process of executing a search warrant at the law office of Attorney A, police officers examined the individual files of Attorney A?s clients. Attorney A was a witness to this conduct. Attorney A?s clients charged with criminal offenses wish to pursue Motions to Dismiss based upon the violations of their constitutional rights to effective assistance of counsel, the attorney‑client privilege and confidential relationship, work product privilege, and the right to privacy.
Questions
May Attorney A, without withdrawing as counsel, testify at a hearing on Motions to Dismiss the criminal charges against his clients based on the actions of the police officers during the search?
What are Attorney A?s obligations to these clients if the Motion to Dismiss is denied and each client wishes Attorney A to represent him at the trial on the merits?
Do the answers to the previous questions change if Attorney A believes that the conduct of the police officers provides the basis for a civil action by Attorney A against the officers?
Opinion
I. May Attorney A, without Withdrawing as Counsel, Testify at a Hearing on the Motions to Dismiss?
Maine Bar Rule 3.5(b)(1) provides the standard for consideration in this situation. It states:
If a lawyer knows, or should know, that he or a lawyer in his firm is likely or ought to be called as a witness in litigation concerning the subject matter of his employment, he and his firm shall withdraw from representation at the trial unless the Court otherwise orders. This Rule does not apply to situations in which the lawyer would not be precluded from accepting employment under Rule 3.4(j).
Rule 3.4(j) states:
A lawyer shall not accept employment in contemplated or pending litigation if he knows or should know that he or a lawyer in his firm is likely or ought to be called as a witness. This Rule does not apply where the predictable testimony will relate solely to uncontested matters or to legal services furnished by the lawyer or where the distinct value of the lawyer or his firm in the particular case would make denial a substantial hardship on the client.
It is clear from the facts presented that Attorney A?s testimony will not ?relate solely to uncontested matters or to legal services furnished by the lawyer . . .?; nor is there any basis to conclude that ?the distinct value of the lawyer or his firm? in this particular case would result in substantial hardship to the client if Attorney A were required to withdraw. Accordingly, it is the Commission?s opinion, based on the facts presented, that Attorney A may not testify at the hearing without first withdrawing as counsel.
As indicated in our Opinion No. 79‑6, ?(t)he spectacle of an attorney moving from the counsel table to the witness stand and back again and perhaps thereafter arguing for his own credibility is clearly to be avoided if at all possible . . .? The rationale for this view is well stated in EC 5‑9 of the ABA Code of Professional Responsibility:
If a lawyer is both counsel and witness, he becomes more easily impeachable for interest and thus may be a less effective witness. Conversely, opposing counsel may be handicapped in challenging the credibility of the lawyer when the lawyer also appears as an advocate in the case. An advocate who becomes a witness is in the unseemly and ineffective position of arguing his own credibility. The roles of an advocate and of a witness are inconsistent; the function of an advocate is to advance or argue the cause of another, while that of a witness is to state facts objectively.
Another important point is made in EC 5‑10, which states:
Problems incident to lawyer‑witness relationships arise at different stages: they relate either to whether a lawyer should accept employment or should withdraw from employment. Regardless of when the problem arises, his decision is to be governed by the same basic consideration . . . [and] where the question arises doubt should be resolved in favor of a lawyer testifying and against his becoming or continuing as an advocate.
In the case presented, it seems clear that Attorney A should testify as an eyewitness to the police search. His testimony regarding what was searched, how the search was conducted, how the police conducted themselves, etc., would seem to be critical to the decision on granting the Motion to Dismiss. It might, in fact, be the sole basis for granting such a Motion. And if Attorney A does testify at the hearing, then he must first withdraw from representing the clients in question.
II. What Are Attorney A?s Obligations to His Clients If the Motion to Dismiss Is Denied and Each Client Wishes Attorney A to Represent Him at Trial on the Merits?
Attorney A has an ethical obligation to proceed in a fashion that will serve the best interests of his clients, consistent with the mandates of the Bar Rules. If it is likely that Attorney A will be called or ought to be called as a witness at trial, then clearly Attorney A cannot also represent these clients during the trial, for the reasons previously stated.
Even if Attorney A will not and ought not appear as a witness at trial he must still comply with Rule 3.4(a) before accepting such employment. That Rule provides that:
Before accepting any professional employment, a lawyer must disclose to the prospective client . . . his interest if any in the subject matter of the employment; all the circumstances regarding his relationship to the parties; and any interest or connection with the matter at hand that could influence the client in his selection of a lawyer. (Emphasis supplied)
The Reporter?s Notes indicate that Rule 3.4(a) seeks to mandate complete disclosure. The Rule is designed to insure that a client in retaining an attorney is completely informed about the existence of any fact which might influence the judgment or effectiveness of the attorney. The Commission does not have sufficient information on the facts of this particular case to determine whether disclosure is mandated here. Clearly, however, such factors as (1) incriminating evidence having been discovered in Attorney A?s office, or (2) Attorney A?s interest in protecting his own rights or reputation possibly being or becoming at variance with his client?s interests, would if present here, have to be disclosed under Rule 3.4(a).
Further, if these or similar facts exist to the extent that Attorney A?s independent professional judgment on behalf of his client will be, or reasonably may be, adversely affected, then the requirements of Rule 3.4(f) would also have to be complied with.
III. Do the Answers to the Previous Questions Change If Attorney A Believes That the Conduct of the Officers Provides the Basis for a Civil Action Taken By Attorney A Against the Officers?
In our view, the fact that Attorney A believes that the officers? conduct provides the basis for a civil action by him personally simply adds another important reason why Attorney A should not represent the clients in question at either the hearing or the trial. The possibility of financial gain to Attorney A through a civil lawsuit would further strain Attorney A?s credibility in the eyes of the fact‑finder, to a point which would most certainly be a disservice both to his clients and to the cause of justice.
Enduring Ethics Opinion
Opinion #24. Charging Attorneys Fees Beyond Amount Allowed by Commission
Issued by the Professional Ethics Commission
Date Issued: August 25, 1981
A State agency, frequently required to review or approve the amount of counsel fees sought by attorneys who appear before it, has raised the question of whether it is unethical to bill for minimum time periods (such as 1/10th or 1/4th of an hour) without regard to whether the activity actually consumed the total time indicated.
While a case could be hypothesized where the use of standardized minimum charges could result in an impermissibly high fee, we do not believe that the issue posed rises to the ethical level. The Commission recognizes that records kept by attorneys and members of other professions and businesses utilize some convenient minimum unit of time, such as 1/10th or 1/4th of an hour, rather than attempting with stopwatch accuracy to record the minutes and seconds involved in a given task. Whatever deviation from exact precision may result from the use of these time units will, in substantially all cases, be de minimis; in the unusual case where a great number of these ?overcharges? combine to make the total fee excessive, that fact would be apparent from a review of the scope of work undertaken.
The Commission also suspects that there are equally as many instances where attorneys intentionally or unintentionally omit charging for fractions of time units actually spent on a matter; these minimal deviations may well balance out over the course of a case. In short, the Commission finds no ethical impropriety in an attorney adopting reasonably accurate minimum time units. We believe 1/10th hour is, under normal circumstances, such a reasonably accurate unit. Whether larger units are also reasonable depends upon whether they reflect a true average of time spent by the attorney.
The question raised is not the exclusive province of this Commission. Presumably the State agency has the power to adopt rules specifying the conditions under which it will consider and approve counsel fees. We see no reason why it may not, therefore, place such restrictions on the use of minimum time period billing as it deems justified.
Enduring Ethics Opinion
Opinion #25. Disqualification of Former Prosecutor in Subsequent Personal Injury Case Against Respondent
Issued by the Professional Ethics Commission
Date Issued: August 25, 1981
Facts
Attorney A represents Client C in a personal injury claim arising out of a one‑car accident in which C was the passenger and D was the driver. During the initial interview, C disclosed that D had been drinking at the time of the accident and had been cited for OUI by the investigating officer. D?s insurance carrier promptly acknowledged liability to C, but the case remains open pending resolution of damages.
Thereafter, D was tried and convicted for OUI in the District Court; the prosecution was handled by A?s partner, B, who is an Assistant District Attorney. C was among three witnesses called in the presentation of the State?s case, and the evidence included a showing that D?s blood alcohol level was .17.
Issue Presented
Whether A shall be barred from representing C against D in the personal injury matter because of his partner?s having prosecuted D.
Discussion
Under the circumstances here described, there are at least two rules which are being or have been violated, and we see no alternative but to disqualify Attorney A from representing C.
Rule 3.4(h) provides that:
A lawyer shall not accept private employment in a matter in which he held substantial and relevant responsibility while he was a public official or employee.
It is clear that Attorney B, as a public prosecutor, held the relevant responsibility for handling the case against D, and in the course of discharging that responsibility became privy to all aspects of the State?s case against D. It thus seems to us that the ?matter? for which B had responsibility was virtually identical to the liability issues in C?s case against D: proof that D was intoxicated at the time of the accident, and thus negligently caused damage to C. If B would be precluded from participating in this same ?matter,? his partner A is similarly disqualified. Rule 3.4(k).
Further, Rule 3.7(i)(4) provides that:
A public prosecutor or other government lawyer shall not conduct a civil or criminal case against any person relative to a matter in which he represents or has represented the complaining witness.
Application of this rule to the foregoing facts makes it clear that Attorney B could not and should not have conducted the prosecution for OUI against D because his partner represented one of the complaining witnesses. The purpose of the rule is clear: to prevent a government attorney from gaining advantage for a private client through governmental action, and to remove the risk of overzealous governmental prosecution being motivated by private interests. We are in no position to know the extent to which C?s private interests may or may not have affected the OUI prosecution against D. Since the prohibited conduct has already occurred, the only appropriate remedial action remaining is to disqualify the prosecutor and his firm from representing C in the civil case.
Thus, under either Rule 3.4(h) or 3.7(i)(4), Attorney A should resign from his representation of C. The Commission also believes the foregoing result is compelled by Rule 53A of the Rules of Criminal Procedure.
Enduring Ethics Opinion
Opinion #26. Limitation of Liability in Title Opinion
Issued by the Professional Ethics Commission
Date Issued: April 2, 1981
Question
The Grievance Commission has been asked whether the practice of limiting liability in opinions on the title to real estate is a violation of Rule 3.6(b) of the Maine Bar Rules. A typical such limitation would be the following: ?our liability to you as a consequence of this opinion shall not exceed the amount of $30,000.00. Our liability to you shall not extend beyond the time during which you are the owner of the property in question.?
Opinion
Rule 3.6(b) of the Maine Bar Rules provides as follows:
A lawyer shall not attempt to exonerate himself from, or limit, his liability to his client for his personal malpractice or that of his partners or salaried employees. This rule shall not prevent a lawyer from settling or defending a malpractice claim.
The first sentence of the rule is identical to DR 6‑102(A) of the ABA Code of Professional Responsibility. The former canons of ethics apparently contained no counterpart. Ethical consideration 6‑6 of the ABA Code of Professional Responsibility enlarged somewhat upon DR 6‑102(A) as follows:
A lawyer should not seek, by contract or other means, to limit his individual liability to his client for malpractice. The lawyer who handles the affairs of his client properly has no need to attempt to limit his liability for his professional activities and one who does not handle the affairs of his client properly should not be permitted to do so.
The practice of attempting to limit liability for errors in a title opinion falls squarely within the language of Rule 3.6(b) and is plainly prohibited by it. If allowed, the practice described in the question could leave the client without any effective remedy for damages directly caused by the malpractice of the lawyer. For example, title opinions containing such a disclaimer sometimes attempt to limit liability to the amount of the first mortgage, even though the opinion is directed to the borrower. Obviously, the client‑borrower?s loss could be much greater, particularly if the property has been improved. The loss of the client‑bank may also exceed the original principal amount of the mortgage, although this would not ordinarily be the case.
Neither limitations of liability in policies of title insurance nor the practice, if it exists, of basing the fee for a title examination on exposure to liability, alter this result. Attorneys are not title insurance companies; the practice of their profession is subject to the Maine Bar Rules. Unlike title insurance companies, attorneys are subject to liability only if they fail to exercise due care. Attorneys may, of course, base the amount of their fee in part upon the responsibility assumed. Because attorney?s fees may in the past have been calculated upon the basis of an erroneous legal conclusion about the extent of that responsibility is, however, no reason to disregard the plain meaning of Rule 3.6(b).
We do not mean to intimate that an attorney rendering a title opinion necessarily incurs liability to or represents both the bank and the borrower. The former is a question of law on which this Commission does not undertake to express any opinion. As to the latter, see Opinion #12.
Enduring Ethics Opinion
Opinion #27. Client Reneging on Agreement to Pay Creditor Through Attorney
Issued by the Professional Ethics Commission
Date Issued: September 9, 1981
Facts
Attorney A represented Client C in a personal injury action. C was being dunned by a collection agency and threatened with legal action for nonpayment. A was approached by the collection agency and asked if part of the proceeds could be held for the debt, indicating that otherwise it would recommend to the creditor that he bring suit. A obtained an ambiguous written confirmation from C followed by an explicit verbal confirmation to his secretary. A then assured the collection agency that C?s debt would be paid once the recovery was received in the personal injury action.
Once the proceeds of the personal injury case were received by A, C changed her mind and wished to renegotiate with the creditor for an amount less than the balance due. A, having given his assurances to the creditor, refused C?s request and issued a check in the names of both C and the creditor for the entire balance due. The Commission is asked whether A was ethically justified in declining to remit the proceeds to C in her name alone.
Opinion
On the basis of the facts presented, determination of the ethical obligation of A to turn over the proceeds of the settlement to his client and not to the creditor depends on the resolution of legal questions which are beyond the scope of the Commission?s jurisdiction. For example, if the lawyer is under a legal obligation to turn over the funds to the collection agency, under the common law of agency or any other valid legal principle, then he must do so. On the other hand, if he is not under such an obligation and if the client is entitled to receive the funds, the lawyer should remit the proceeds to his client. The Commission notes that, in such cases, a lawyer in the position of Attorney A would be well advised to make clear in advance to a third party such as the collection agency that he could not act as guarantor of his client?s agreement.
Enduring Ethics Opinion
Opinion #28. Duties of Attorney-Legislator and Partner Lobbyist
Issued by the Professional Ethics Commission
Date Issued: February 4, 1982
Questions
The Commission has been asked to render an advisory opinion on the ethical duties of an attorney-legislator, and of his law firm, to the general public and the firm?s clients, in the following situations:
One or more of the law firm?s clients may be affected, either favorably or unfavorably, by a proposed legislative action.
Another attorney from the law firm testifies at a public hearing and participates in a legislative committee?s work session in a general capacity as a citizen (not as a privately retained lobbyist for a specific client). It is assumed that some of the law firm?s clients would inevitably have some degree of interest in the legislative matter, such as changes in landlord‑tenant law, inheritance taxes, the Probate Code, workers? compensation laws, etc.
Another attorney from the law firm is employed as a registered lobbyist to represent a client?s interest in specific legislative measures.
Opinion
The Maine Bar Rules do not have a great deal to say about the conduct of attorneys as legislators. The only Rule directly on point is 3.2(d)[1], which is identical to DR 8‑101 of the ABA Code of Professional Responsibility. Commentary on that ABA Code provision indicates that its drafters were reluctant to go very far in developing a rule to regulate the conduct of an attorney as a legislator, believing instead that it is more appropriate for legislators to regulate themselves. See the Annotated Code of Professional Responsibility, 1979, page 382. The Maine Legislature has done this by enacting Subchapter II of Chapter 25, Title 1 M.R.S.A., entitled Legislative Ethics. The Legislature has also created the Commission on Governmental Ethics and Election practices, which is employed to interpret these provisions on legislative ethics and to issue advisory opinions thereon. Clearly, a full response to the questions presented must take these statutory provisions into account. Since it is beyond our authority to interpret these provisions, our response to the questions presented, limited as it must be to the applicability of Rule 3 of the Maine Bar Rules, will of necessity be incomplete.
Although we are not authorized to interpret Maine?s statutory provisions on legislative ethics, we believe the ?statement of purpose? set forth in Section 1011 of Title 1 is relevant to our interpretation of various Bar Rules as they relate to an attorney legislator and/or to his partners and associates. Section 1011 states, in part, the following:
The public interest is best served by attracting and retaining in the Legislature men and women of high caliber and attainment. The public interest will suffer if unduly stringent requirements deprive government ?of the services of all but princes and paupers.?
Membership in the Legislature is not a full‑time occupation and is not compensated on that basis; moreover, it is measured in 2‑year terms, requiring each member to recognize and contemplate that his election will not provide him with any career tenure.
Most Legislators must look to income from private sources, not their public salaries, for their sustenance and support for their families; moreover, they must plan for the day when they must return to private employment, business or their professions.
The increasing complexity of government at all levels, with broader intervention into private affairs, makes conflicts of interest almost inevitable for all part‑time public officials, and particularly for Legislators who must cast their votes on measures affecting the lives of almost every citizen or resident of the State. The adoption of broader standards of ethics for Legislators does not impugn either their integrity or their dedication; rather it recognizes the increasing complexity of government and private life and will provide them with helpful advice and guidance when confronted with unprecedented or difficult problems in that gray area involving action which is neither clearly right nor clearly wrong. M.R.S.A. Section 1011.
It is with these considerations in mind that the Commission now takes this opportunity to offer some general guidance on provisions of the Maine Bar Rules as they apply to an attorney‑legislator and to other lawyers in his firm.
Situation No. 1: Attorney‑legislator as member of a law firm which has one or more clients that may be affected, either favorably or unfavorably, by a proposed legislative action.
Rule 3.2(d)(1) requires that an attorney‑legislator shall not:
(1) Use his public position to obtain, or attempt to obtain, a special advantage in legislative matters for himself or for a client under circumstances where he knows, or it is obvious, that such action is not in the public interest; (emphasis supplied)
As noted by the ABA Committee on Ethics and Professional Responsibility (in its interpretation of DR 8‑101, which is identical to our Rule 3.2(d)):
The CPR [Code of Professional Responsibility] does not define ?special advantage? or ?not in the public interest.? We cannot, however, construe subd. 1 as being a blanket prohibition against the representation by a lawyer‑legislator of clients who may be affected by the defeat or passage of proposed legislation, for two reasons: (1) if the committee that drafted the Code had desired for it to include such a blanket proscription, that committee could and would have simply stated that a lawyer while serving as a member of a legislature shall not represent a client who is likely to be affected by the passage or defeat of proposed legislation; and (2) to interpret subd. 1 as constituting such a blanket proscription would make it a drastic measure, for there would be extremely few clients whom the lawyer‑legislator could represent. Accordingly, we think that ?special advantage? refers to a direct and peculiar advantage, and ?not in the public interest? refers to action (or legislation) clearly inimical to the best interests of the public as a whole . . . Thus it is apparent that a disciplinary action under DR 8‑101(a)(1) may involve several fact issues, such as whether there was a special advantage for the client or whether the action was in the public interest. (emphasis supplied) ABA Informal Opinion No. 1182 (1971).
We agree with this reasoning, particularly in light of the statement of purpose of our Legislature as quoted above, and we adopt this approach with regard to Rule 3.2(d)(1) of the Maine Bar Rules. We believe a similar approach is warranted with regard to Rule 3.2(d)(3), which provides that an attorney‑legislator shall not:
(3) Accept any thing of value from any person when the lawyer knows, or it is obvious, that the offer is for the purpose of influencing his action as a public official. (emphasis supplied)
Again, we do not read this Rule as a blanket prohibition against acceptance by an attorney‑legislator of compensation for services rendered (by him or his firm) from clients likely to be affected by the passage or defeat of proposed legislation. Only in those cases where payments are made ?for the purpose of influencing his actions as a public official,? and where the attorney ?knows? this, or cannot deny knowing it because the purpose of the payment ?is obvious,? do the strictures of this Bar Rule come into play. We believe the factual questions noted above with regard to both 3.2(d)(1) and 3.2(d)(3) must of necessity be dealt with on a case‑by‑case basis, in the context of disciplinary proceedings, and should not be discussed in any detail by positing various hypotheticals in an advisory opinion.
Another aspect to be considered here involves the ethical obligations of the attorney‑legislator to his clients.[2]Rule 3.6(a) requires that a lawyer ?employ reasonable care and skill and apply his best judgment in the performance of his services? for a client. Implicit in this Rule is the duty to avoid conflict of interest situations where the exercise of a lawyer?s independent professional judgment on behalf of a client will be, or is likely to be, adversely affected. See Rules 3.4(b) and 3.4(c). Whenever such situations arise, Rule 3.5(b)(2)(ii) mandates withdrawal from such representation, and Rule 3.4(k) extends this requirement to all partners and associates of the lawyer involved.
Applying these rules to an attorney‑legislator, the Commission believes that mandatory termination of representation of a client should only occur in those rare cases where the legislator?s public responsibilities will, or are likely to, adversely affect his independent professional judgment on behalf of the client. This would normally not occur simply by virtue of the fact that the client may be affected by proposed legislative action, since almost all citizens or residents of the State are affected to one degree or other by most legislation. For example, the fact that an attorney‑legislator might be considering or even proposing probate law reform would not normally preclude him and other members of his law firm from handling the administration of an estate with independent professional judgment and complete loyalty to the client involved. The Commission does not propose to posit examples where this would not be the case, preferring instead to treat specific situations as they arise, in the context either of disciplinary proceedings or requests for advisory opinions.
Also of relevance to the situation presented is Rule 3.4(a), which provides:
(a) Disclosure of Interest. Before accepting any professional employment a lawyer shall disclose to the prospective client his relationship, if any, with the adverse party; his interest, if any, in the subject matter of the employment; all circumstances regarding his relationship to the parties; and any interest or connection with the matter at hand that a lawyer knows or reasonably should know would influence the client in the selection of a lawyer. (Emphasis supplied.)
We interpret this Rule to require disclosure to any prospective client of the attorney‑legislator?s firm in cases where the duties owed to his constituency and the citizens of Maine would cause him to have an interest or a connection with the matter at hand that could influence the client in the selection of the lawyer. As stated in the Reporter?s Notes to Rule 3.4(a), this Rule seeks to mandate complete disclosure of all facts that could possibly be relevant to the subject issue. This then provides the client with information to make a judgment on the retention of an attorney. Accordingly, if the attorney‑legislator?s activities in the Legislature have more than a general connection with the subject matter of the representation of the client, these activities would have to be disclosed in detail before employment could be accepted.
Similarly, Rule 3.4(f) provides that:
Except with the informed written consent of the client after full disclosure, a lawyer shall not accept employment if the exercise of his professional judgment on behalf of the client will be, or reasonably may be, affected by any interest of the lawyer.
As pointed out in the Reporter?s Notes, the term ?any interest? as used in this Rule includes any form or nature of interest, including political or personal interests. However, the interest must be such that it will, or reasonably may, affect the attorney‑legislator?s professional judgment on behalf of the client. Whenever that is the case, then no lawyer in the firm can accept the employment without first obtaining the client?s informed written consent after full disclosure. See Rule 3.4(k).
In making the disclosures required by Rules 3.4(a) and 3.4(f), and in obtaining the client?s consent pursuant to Rule 3.4(f), the attorney involved must also be sensitive to the strictures of Rules 3.6(k) and 3.9(b)(5) about implying improper influence.
Situation No. 2: Another lawyer in the firm (as a private citizen and not as attorney or lobbyist for any specific client or group of clients) testifies at a public hearing and participates in a legislative committee?s work session.
The Commission sees no ethical impropriety in this situation of an attorney participating in the legislative process as a private citizen, even though the legislation being discussed would inevitably have some impact on some of his firm?s clients, so long as the relationship between the attorney in question and the attorney‑legislator is promptly and fully disclosed. In fact, such involvement in the legislative process by attorneys acting as private citizens is to be encouraged. (See EC 8‑1, ABA Code Professional Responsibility.) Clearly, the duty of loyalty to a client does not require that an attorney, when acting as a private citizen, remain a spokesman for his client?s interests. On the other hand, if the attorney?s personal political viewpoint is such as to affect the exercise of his professional judgment on behalf of the client, then the requirements of Rules 3.4(a) and 3.4(f) come into play (see above).
With regard to the attorney‑legislator himself, his ethical duties in this situation are covered by the statute on Legislative Ethics.
Situation No. 3: Another lawyer in the firm is employed as a registered lobbyist to represent a client?s interest in specific legislative measures.
Because of the impact of Rule 3.4(k), the threshold question here must be: can an attorney‑legislator also work as a registered lobbyist to represent a client?s interests in specific legislative measures? Clearly, that question must be answered in the negative. Such employment would be diametrically in conflict with the ethical standard set forth in Rule 3.2(d). It would also create a classic conflict of interest under Rules 3.4(b) and 3.4(c). Since the attorney‑legislator himself could not be employed as a lobbyist before the legislature, neither can any of his associates or partners be so employed. Rule 3.4(k). See Opinion 415, New York State Bar Association Committee on Professional Ethics (October 6, 1975). [Back to Index]
1 Acts as a Public Official. A lawyer who holds public office shall not:
(1) Use his public position to obtain, or attempt to obtain, a special advantage in legislative matters for himself or for a client under circumstances where he knows, or it is obvious, that such action is not in the public interest;
(2) Use his public position to influence, or attempt to influence, a tribunal to act in favor of himself or of a client;
(3) Accept any thing of value from any person when the lawyer knows, or it is obvious, that the offer is for the purpose of influencing his action as a public official.(Back)
[2] We do not believe the general public should be considered a ?client? of the attorney‑legislator for purposes of applying the Maine Bar Rules, and we do not treat it as such in this opinion. Again, the primary source of rules of conduct for an attorney serving as a legislator is the statute on Legislative Ethics referred to above.
Enduring Ethics Opinion
Opinion #29. County Commissioner-Lawyer vs. District Attorney
Issued by the Professional Ethics Commission
Date Issued: February 4, 1982
Question
The Chairman of a Board of County Commissioners is an attorney in active practice in the county in question. His practice includes representation of defendants in criminal actions, some of which will have been initiated as a result of investigations conducted by the Sheriff?s office or arrests made by deputies of the Sheriff. He has been involved in civil litigation in which the District Attorney is an adverse party. The County Commissioners have certain authority over the budget of the Sheriff and the District Attorney. The District Attorney, who has raised the questions addressed by this opinion, states, ?Because this attorney is an adversary in these matters and at the same time is my client on the County Commission and has decision‑making authority over my budget, I feel uncomfortable in representing both the State in these criminal matters and the county commission in other matters.? The District Attorney has asked for our opinion ?as to any conflicts of interest in the situation outlined above.?
Opinion
The facts set forth by the inquiring attorney do not, in our opinion, show any situation that would require the District Attorney to withdraw from any civil or criminal case. Contrary to the suggestion in the letter of inquiry, the District Attorney does not represent or counsel any one County Commissioner. The District Attorney is required, by 30 M.R.S.A. § 501, to represent counties in the prosecutorial district as governmental subdivisions. To the extent this involves or requires representation or counseling of the Commissioners, it is representation and counseling of the Commissioners as a collegial body in their official capacity, certainly not as private individuals. Moreover, in prosecuting clients of the Chairman of the County Commissioners the District Attorney is not representing a party adverse to the Chairman, but to clients of the Chairman. The two are not the same. Clearly, the District Attorney is not required to withdraw from any prosecution because the Chairman of the County Commissioners is defense counsel.
The situation of the County Commissioner involves somewhat different considerations. His activity raises the question whether a lawyer who is also a part‑time public official is disabled from accepting employment by a client whose interests are adverse to the governmental unit in which he holds office. The question has been addressed only obliquely in particular contexts. For example, ABA Opinions 296 and 306 held that the partner of a legislator could not, absent consent or a waiver, represent clients before the Legislature. Formal Opinion 26 held that a former governor could accept employment attacking the validity of legislation passed during his term of office. Informal Opinion 287 held that a lawyer elected to Congress could continue an appearance in Federal Court.
In the present case the Chairman of the Board of County Commissioners clearly does not represent the county as a client. Nevertheless, we conclude that his membership on the Board of County Commissioners is activity as a lawyer for purposes of applying the Maine Rules of Court.
The Commissioner is not disabled from representing all criminal defendants, but we believe he is disabled in those cases prosecuted, investigated or initiated by the Sheriff?s office. The State, rather than the County, is nominally the defendant?s antagonist in a criminal case. The District Attorney is a state and not a county official, even though the counties in which the District Attorney operates provide office spaces, supplies and a clerical staff who are county employees. The Commissioners are required by statute to provide office support for the District Attorney (30 M.R.S.A. § 555A); they have no discretion. They have nothing to say about the District Attorney?s legal staff. In our opinion the involvement of the District Attorney as a prosecutor of criminal cases will not disable a lawyer who is Chairman of the County Commissioners from defending criminal cases.
We believe a County Commissioner is in a different position with respect to those criminal actions in which the Sheriff?s office is the investigator, makes the arrest, or otherwise is involved as a prosecuting agency. The Commissioners appear to have some supervising authority over the Sheriff, although it is far from clearly defined. 30 M.R.S.A. § 1001. He is required to inform the Commissioners of his activities regularly. They are required to ?review the sheriff?s operation? and insure that law enforcement functions are adequately performed. They approve the hiring of all deputies. The Sheriff appears also to be a county officer. (§ 1001) We, therefore, conclude that if the Commissioner continues to represent defendants in cases prosecuted by the Sheriff?s office, he will be in a multiple employment forbidden by Bar Rule 3.4(c).
We do not believe the Commissioner is at liberty to deal with the situation by disqualifying himself from Commission decisions involving the Sheriff. To do so would be to abdicate substantial responsibilities of his elected office. See 30 M.R.S.A. § 1001.
We recognize that it can be argued that Rule 3.4(c) refers only to clients and that the county is not really a client of the Commission Chairman. The Chairman?s duties to the county as a Commissioner are, however, not dissimilar to his duties to a client. See Opinion of the Justices, 330 A.2d 912 (Me. 1975), and cases cited. It would appear that, just as he owes his clients in criminal cases independent professional judgment, so he owes the county independent judgment, when carrying out the duties to oversee county law enforcement imposed by 30 M.R.S.A. § 1001. Since the Chairman is unavoidably a lawyer, the judgment he brings to these duties is necessarily his professional judgment even though the county is not his client. His duties to private clients in criminal cases in which the Sheriff is involved may interfere with the independent exercise of that judgment. Conversely, it appears at least possible to the Commission that the Chairman?s contribution to county law enforcement through the duties imposed by 30 M.R.S.A. § 1001 will interfere with the independent professional judgment he is obligated to give to his client‑defendants in criminal cases prosecuted by the Sheriff. We, therefore, conclude that the Attorney‑Commissioner is required to decline employment representing defendants in criminal cases in which the Sheriff?s office is the responsible law enforcement agency.
Enduring Ethics Opinion
Opinion #30. Depositing Client's Funds in Out-of-State Bank
Issued by the Professional Ethics Commission
Date Issued: February 4, 1982
Question
A Maine lawyer whose law office is located in a Maine town on the Maine‑New Hampshire border has inquired if he may maintain his client account in a New Hampshire bank instead of in a Maine bank. The New Hampshire bank is located ?across the river? approximately 3/10 of a mile from his law office, while the nearest banking institution in Maine is located at a distance of some four or five miles from the lawyer?s office. The funds which pass through the lawyer?s client account are mainly derived from collection cases in which the lawyer represents as clients both New Hampshire and Maine creditors. In addition several debtors who make monthly payments to his office reside in either Maine or New Hampshire.
The lawyer asserts that it would not only be ?awfully cumbersome,? but would also cause ?great inconvenience to my clients? in the event that he were required to maintain his client account in a Maine banking institution located several miles from his office.
Opinion
While recognizing that Rule 3.6(f)(1) may cause some inconvenience in a situation such as that presented by this inquiry, the Commission concludes that Rule 3.6(f)(1) requires the lawyer to deposit his client account funds in one or more bank accounts maintained in the state of Maine. Rule 3.6(f)(1) in relevant part, provides:
All funds of clients paid to a lawyer or law firm, other than retainers and advances for costs and expenses, shall be deposited in one or more identifiable bank accounts maintained in the state in which the law office is situated, and no funds belonging to the lawyer or law firm shall be deposited therein except as follows:
(i) Funds reasonably sufficient to pay bank charges may be deposited therein; and
(ii) Funds belonging in part to a client and in part presently or potentially to the lawyer or law firm must be deposited therein, but the portion belonging to the lawyer or law firm may be withdrawn when due unless the right of the lawyer or law firm to receive it is disputed by the client; in that event the disputed portion shall not be withdrawn until the dispute is finally resolved.
This Rule contains no exception to its requirement that clients? funds paid to a lawyer be deposited in one or more bank accounts maintained in the state in which the lawyer?s law office is situated. Because the lawyer?s office is located in Maine, the Rule requires that he maintain his client account in a bank account in the state of Maine.
Enduring Ethics Opinion
Opinion #169. Responsibility of Attorney Leaving Firm for Contingent Fee Clients
Issued by the Professional Ethics Commission
Date Issued: September 9, 1999
Bar Counsel's Question
Bar Counsel has asked the Commission to explore the responsibilities a Lawyer inherits or retains to clients who were represented by an attorney employed by the Lawyer after the employment relationship has ended. Bar Counsel suggests the following example as a basis for the discussion.
Bar Counsel's Hypothetical Case
Associate, while in practice alone, undertook to represent Client in litigation pursuant to a contingent fee agreement. Thereafter Associate became employed by Lawyer. Representation of Client continued under the terms of a replacement contingent fee agreement, presumably between Client and Lawyer, which required that litigation costs be advanced by the contracting attorney. Litigation costs have been advanced by Lawyer; they have been substantial, and the end is not yet in sight. Before the case went to trial, Associate's employment by Lawyer terminated. Lawyer refuses to represent Client in the litigation and refuses to advance any additional costs. Associate would be prepared to continue representing Client, but neither Associate nor Client can afford to advance the costs. Does Bar Counsel's hypothetical disclose violation of the Bar Rules by Lawyer or Associate or both?
Opinion
For the reasons that follow the Commission is unable to provide a complete answer to the question. The facts as presented require both the interpretation of Bar Rule 3, which is within the Commission's assigned responsibility, and construction of a contract, which is not. Bar Rule 3 generally imposes its restrictions and requirements on individual attorneys. Even those rules that mention law firms, such as Rule 3.13, and Rules 3.4(d)(1)(ii) and (iii), and Rules that appear to restrict law firms as such, e.g. Rules 3.4(d)(1)(ii) and (iii), must in the end be enforced against individual attorneys, since the ultimate sanction is a temporary or permanent loss of the right to practice law.[1] For most purposes Bar Rule 3 bases its requirements and prohibitions on the existence of a lawyer-client relationship between an individual attorney and a client.[2] The rule on withdrawal, Bar Rule 3.5, refers to withdrawal by a "lawyer" and to steps the "lawyer" must take to protect affected clients.
The Bar Rules do not in so many words provide criteria to determine who is a client or who the client's lawyer is, although particular rules, such as MBR 3.4(b) - (d) and MBR 3.6(a) and (h), may impose some of the obligations of a lawyer-client relationship despite the decision of a lawyer or client not to undertake representation. These extensions rest on finding that a prospective client reasonably believed disclosures to a lawyer would be held in confidence or in some cases that the lawyer had accepted a case. For most other purposes an attorney-client relationship arises by agreement of the parties, and the agreement of the parties must be consulted to identify the lawyer or lawyers. This may take the form of an engagement letter or, as in Bar Counsel's hypothetical, a contingent fee agreement.
Bar Counsel's hypothetical requires us to conclude that Client was at least a client of Associate prior to execution of the replacement contingent fee agreement and that Associate could not withdraw from representation without complying with Maine Bar Rules 3.5(a) and (c). The replacement contingent fee agreement may have substituted Lawyer for Associate as the attorney primarily responsible for Client's case, or it may have been silent. We assume that at least it created an attorney-client relationship between Client and Lawyer. The question of Associate's compliance with MBR 3.5(a) and (c) apparently has not yet arisen, since Associate continued active representation of Client and does not wish to withdraw. Rather, Associate does not acknowledge, and is not able to perform, an agreement to advance the costs of litigation, an issue we address below.
If by becoming a party to the replacement contingent fee agreement, Lawyer assumed some responsibility for Client's cause, even if shared with Associate, Lawyer is not at liberty to withdraw without compliance with Maine Bar Rules 3.5(a) and (c). If Lawyer undertook the further obligation to advance costs of litigation in that agreement, the Maine Bar Rules do not suggest any basis upon which that obligation could be defeated or transferred to Associate solely because Associate's employment has terminated. This conclusion is limited to the Maine Bar Rules. We neither express, nor intend to suggest, an opinion on the rights of the parties to the contingent fee agreement under the law of contracts, both because we have not been given access to the agreement and because such opinions are not within the authority of this Commission.
Footnotes
[1] Presumably the Supreme Judicial Court could reprimand a law firm without imposing discipline on individual attorneys, but the Bar Rules do not expressly contemplate such a sanction.
[2] Bar Rules 3.4(d)(1)(ii) and (iii) refer to clients of a "firm" and representation by a "firm" in defining restrictions applicable to lawyers who change firms and to the firms they leave and join.
Enduring Ethics Opinion
Opinion #31. Profit-Sharing Plan for Law Firm Employees
Issued by the Professional Ethics Commission
Date Issued: September 22, 1982
Question
A law firm partnership inquires if a proposed profit-sharing compensation arrangement is prohibited by the Maine Bar Rules. Specifically, the firm proposes to make quarterly distributions out of the profits of the partnership directly to secretaries employed by the firm. Those distributions would be made in addition to the regular salaries of the secretaries and would most likely vary considerably in amount depending upon the business situation.
Opinion
Subject to the provisos stated herein, it is the Commission?s opinion that this type of employee compensation arrangement is not prohibited by the Maine Bar Rules. Maine Bar Rule 3.3(e) provides:
Dividing Fees with Non-Lawyers. A lawyer or law firm shall not share legal fees with a non-lawyer, except that:
(1) An agreement by a lawyer with his firm, partner, or associate may provide for the payment of money, over a reasonable period of time after his death, to his estate or to one or more specified persons.
(2) A lawyer who undertakes to complete unfinished legal business of a deceased lawyer may pay to the estate of the deceased lawyer that proportion of the total compensation which fairly represents the services rendered by the deceased lawyer.
(3) A lawyer or law firm may include non-lawyer employees in a retirement plan, even though the plan is based in whole or in part upon a profit‑sharing arrangement.
Maine Bar Rule 3.3(e)(1)‑(3) is identical to the original version of ABA DR 3‑102(A)(1)‑(3). Prior to the January 1, 1970 effective date of DR 3‑102 (A)(1)‑(3), the subject of dividing fees with non-lawyers was governed by Canon 34 of the ABA Canons of Professional Ethics, which provided that ?[n]o division of fees for legal services is proper, except with another lawyer, based upon a division of service or responsibility.?
In 1961, the ABA Committee on Professional Ethics held that Canon 34 prohibited a law firm structured as a professional association or corporation from including non-lawyers as beneficiaries of the firm?s profit-sharing plan. ABA Formal Opinion No. 303, (November 27, 1961). In that Opinion, the ABA Committee concluded that while the use of fees to pay agreed salaries to non-lawyer employees was permissible, if the salary of a non-lawyer employee were to be based on a percentage of the firm?s net profits, a division of legal fees would be involved and Canon 34 would prohibit it.
In a 1964 opinion, the ABA Committee implied that similarly a retirement plan covering lawyers and their lay employees under the Self-Employed Individual Tax Retirement Act of 1962 would be unethical under Canon 34 if benefits for lay employees under the plan were measured by the profits of the law firm. ABA Formal Opinion 311 (April 8, 1964). Relying on Canon 34 as interpreted in ABA Formal Opinion No. 303, the ABA Committee also concluded that it would be improper for a lawyer to make a commitment in advance to pay a lay employee an end-of-the year bonus based upon a percentage of net or gross profits, and that it would be "highly questionable? for a lawyer to give such bonuses without a commitment in advance. ABA Informal Opinion No. 792, (October 26, 1964).
After the January 1, 1970 effective date of DR 3-102(A)(1)-(3), the ABA Committee held that in view of subsection 3 of that Disciplinary Rule, a law firm, whether it is structured as a professional corporation or as a partnership, may ethically adopt a retirement plan that includes non-lawyer employees as beneficiaries even though contributions to the plan constitute profit-sharing. In so holding, the ABA Committee expressly overruled Formal Opinions Nos. 303 and 311 to the extent those opinions were in conflict with DR 3-102(A)(3). ABA Formal Opinion No. 325, (August 9, 1970).[1]
Finally, in 1979, the ABA Committee concluded that DR 3-102 did not prohibit a compensation arrangement whereby a law firm?s lay office administrator would receive a fixed predetermined annual salary and in addition a percentage of net profits which might represent one-fourth to one-third of the administrator?s total compensation. ABA Informal Opinion No. 1440 (August 12, 1979). In reaching that result, the ABA Committee reasoned that this arrangement did not constitute dividing legal fees with a non-lawyer under DR 3-102, ?because the compensation relates to net profits and business performance of the firm and not to the receipt of particular fees.? In this Informal Opinion, the ABA Committee indicated no concern with the fact that while DR 3-102(A)(3) by express exception permitted the inclusion of lay employees in a law firm?s profit-sharing retirement plan, that Disciplinary Rule contained no similar exception that would expressly permit the inclusion of lay employees in a profit-sharing compensation plan. Rather, the ABA Committee interpreted DR 3‑102 in a pragmatic manner to allow the profit-sharing compensation arrangement, concluding that ?[w]ith the development of professional business management within law firms, and given the fact that a fixed salary plus incentive compensation is not an uncommon form of compensation, we do not believe that such compensation structure is proscribed by the Model Code.? [2]
The Grievance Commission concurs generally with the opinion of the ABA Committee on Professional Ethics as expressed in its Informal Opinion No. 1440. In our view, the incentive compensation arrangement under consideration here does not constitute an ethically improper ?sharing of legal fees? within the meaning of Maine Bar Rule 3.3(e), provided that the amounts paid to lay employees in addition to fixed salary (1) are not based upon business brought to the law firm by such employees; (2) are not based upon services performed by such employees in a particular case; and (3) do not constitute the greater part of the total remuneration of such employees. The purpose of Maine Bar Rule 3.3(e)?s prohibition against sharing legal fees with lay persons is to prevent and discourage lay persons from engaging in the unauthorized practice of law, and that prohibition should be construed in a manner consistent with its purpose. Assuming that the incentive compensation arrangement under consideration here does not violate the three provisos stated above, we are satisfied that such a compensation arrangement would not aid or encourage lay employees to engage in the unauthorized practice of law, and thus we conclude that, subject to the provisos above-stated, this compensation arrangement does not constitute an ethically impermissible sharing of legal fees under Maine Bar Rule 3.3(e).
Footnotes
[1] ABA Formal Opinion 325 made no reference to ABA Informal Opinion No. 792, discussed above. (Back)
[2] Once again, in this Opinion as in Formal Opinion No. 325, the ABA Committee made no mention of its earlier Informal Opinion No. 792, discussed above. Subsequently, in 1980, DR 3-102(A)(3) was amended to expressly permit a lawyer or law firm to include non-lawyer employees in a profit-sharing compensation plan as well as in a profit-sharing retirement plan. As amended in 1980, DR 3-102(A)(3) now provides:
A lawyer or law firm may include nonlawyer employees in a compensation or retirement plan, even though the plan is based in whole or in part on a profit sharing arrangement providing such plan does not circumvent another disciplinary rule. (words in italics signify new language).
Enduring Ethics Opinion
Opinion #168. Secretly Taping Telephone Calls
Issued by the Professional Ethics Commission
Date Issued: March 9, 1999
Facts and Questions
Bar Counsel poses the following question pursuant to Bar Rule 11(c)(1).
Attorney A makes a regular practice of taping all her telephone calls, whether with the client, opposing counsel, another lawyer other than opposing counsel or the court. The attorney does not tell the other person(s) on the phone call that the conversation is being recorded. State and federal law permit the recording of the phone call as long as Attorney A is a participant. Bar Counsel inquires as to whether the practice is prohibited by the Bar Rules, and further inquires as to whether it matters who the other party is to the conversation.
Opinion
The Maine Bar Rules do not directly speak to the practice. However, Bar Rule 3.2(f) provides that "A lawyer shall not: ... (3) engage in conduct involving dishonesty, fraud, deceit or misrepresentation,? which, in our view, is the rule most directly applicable to the facts posed.[1] The specific question then is whether such recording may be characterized as dishonest, fraudulent, deceitful or involving a misrepresentation. Since these terms are not defined in the Bar Rules, we must look to other sources to divine their meaning.
Among the factors to be considered are the applicable provisions of state or federal law or regulations that apply to such recording. As Bar Counsel correctly notes, recording a phone call is permitted both by Maine and federal law so long as the person doing the recording is a party to the conversation. 15 M.R.S.A. § 709 and 18 U.S.C. § 2511. However, under federal law, such recording, even by a participant, is prohibited if it is "for the purpose of committing any criminal or tortious act." 18 U.S.C. § 2511. [2]
The ABA Committee on Ethics and Professional Responsibility and a number of state ethics or professional responsibility commissions have had occasion to address this issue. Although the applicable ethics rules vary among jurisdictions, in general the rules in all jurisdictions include a prohibition the same as or similar to Bar Rule 3.2(f)(3). The ABA Committee and a majority of state ethics bodies have concluded that such recording does violate that provision. American Bar Association, Committee on Ethics and Professional Responsibility, Formal Opinion 337 (1974); Alabama State Bar Disciplinary Commission, Opinion 84-28 (1974); Alaska Bar Association Ethics Committee, Opinion 83-2 (1983); Alaska Bar Association Ethics Committee, Opinion 91-4 (1991); Dallas Bar Association Legal Ethics Committee, Opinion 1981-5 (1981); District of Columbia Bar Legal Ethics Committee, Opinion 178 (1987); Hawaii Supreme Court Disciplinary Board, Opinion 30 (1988); Idaho State Bar Ethics Committee, Formal Opinion 130 (1991); Minnesota Lawyer Professional Responsibility Board, Informal Opinion 3 (1986); Minnesota Lawyer Professional Responsibility Board, Opinion 18 (1996); Association of the Bar of the City of New York Committee on Professional and Judicial Ethics, Formal Opinion 1995-10 (1995); New York State Bar Association Committee on Professional Ethics, Opinion 328 (1974); South Carolina Ethics Advisory Committee, Opinion 83-01 (1983); Board of Professional Responsibility of the Supreme Court of Tennessee, Formal Opinion 81-F-14 (1981); Board of Professional Responsibility of the Supreme Court of Tennessee, Formal Opinion 86-F-14(a)(1986); and Supreme Court of Texas Professional Ethics Committee, Opinion 392 (1978).
A number of state courts have joined in this view. People v. Selby, 606 P.2d 45, (Colo.1979); People v. Wallin, 621 P.2d 330 (Colo.1981); People v. Smith, 778 P.2d 685 (Colo. 1989); State Bar Association v. Mollman, 488 N.W.2d 168 (Iowa 1992); In the Matter of An Anonymous Member of the South Carolina Bar, 322 S.E.2d 667 (S.C. 1984); In the Matter of An Anonymous Member of the South Carolina Bar, 404 S.E.2d 513 (S.C. 1991); Kaplan v Wyatt, 1984 WL 9274 (Del.Ch. 1984); National Life and Accident Insurance Co. v. Miller, 484 So.2d 329 (Miss. 1985); Gunter v. Virginia State Bar, 385 S.E.2d 597 (Va.1989) and In the Petition of Sharon Ann Zieigler, 637A.2d829 (Del.1994).
In contrast to these opinions and cases, a few jurisdictions have held that secretly recording conversations does not violate any ethical rule. New York County Lawyers? Association Committee on Professional Ethics, Opinion 696 (undated); Oklahoma Bar Association Legal Ethics Committee Opinion 307 (1994); Utah State Bar Ethics Advisory Opinion Committee, Opinion 96004 (1996); The Mississippi Bar v. Attorney ST., 621 So.2d 229 (Miss. 1993); Attorney M- v. Mississippi Bar, 621 So.2d 220 (Miss.1992); and Netterville v.Mississippi State Bar, 397 So.2d 878 (Miss. 1981).
Having carefully reviewed all these precedents and the text of the Maine Bar Rule, we have concluded that the majority view is not persuasive. Those decisions that find that the practice is unethical share a common characteristic. Without exception, the opinions are highly conclusory, contain little if any analysis of any kind and fail to rely on provisions in the applicable ethical rules of the jurisdiction. ABA Op. 337, which has been adopted whole cloth by many state ethics panels, simply concludes, without analysis of the text of ABA rules, that undisclosed recordings "involve dishonesty, fraud, deceit or misrepresentation." Some of the opinions such as Minnesota Op. 18 conclude that undisclosed recordings are "inherently deceitful" without explanation as to the basis for such a conclusion. Such lack of analysis is the equivalent of stating that "recording is deceitful under the rules because it is deceitful." Other decisions such as in South Carolina Op. 83-01 base their conclusion on a finding that such recordings would "violate an attorney's duty to avoid the appearance of impropriety" without discussion as to what impropriety was implicated. Tennessee Op. 86-F-14(a) disapproves of recording conversations with other lawyers, but approves of secretly recording witnesses in criminal cases. The distinction is apparently based on the unstated grounds that it is a justifiable technique to gather evidence to impeach a witness and therefore in those circumstances not dishonest, deceitful or fraudulent. The Colorado Supreme Court has disapproved of such recording because it is claimed to discourage "candor" among attorneys and judges and because it "suggests deceit and trickery" even if no affirmative misrepresentation is made by the recording lawyer. People v. Selby, 606 P.2d at 47. The Delaware Chancery Court disapproved of the conduct because it interferes with "the right to free expression and confidentiality between counsel." Similarly, Idaho Op.130 concludes that recording conversations will ?not encourage the system's judicial objectives" and will cause people to be more "cautious" and to be "less candid" in their conversations. Suffice it to say that the dearth of rule-based analysis in all these opinions is neither helpful nor persuasive.
In our view the opinions that strike closest to the real rationale for the ethical objection to the practice are found in the opinions of the N.Y. State Bar and the Texas State Bar. In Texas Op. 392 the Texas Supreme Court Professional Ethics Committee concluded that "secret recordings of conversations offends the sense of honor and fair play of most people." In a more expansive statement of that same view the New York State Bar Association Committee on Professional Ethics stated:
There is general aversion to the secret electronic recordation of private conversations. Unrecorded private conversation encourages uninhibited and easy flow of expression and facilitates the exchange of ideas even though in unguarded and imprecise language which might not have been employed if the speaker had had knowledge that a literal transcript was being made. Elemental fairness ordinarily dictates that all participants be aware of the ground rules governing a conversation. They may then conduct themselves accordingly.
A lawyer should be candid and fair. Of equal importance, he should be regarded as such by other lawyers and the public and his conduct should not be susceptible to an interpretation that he is less than candid and fair. EC 9-6 states that "every lawyer owes a solemn duty to strive to avoid only professional impropriety but also the appearance of impropriety."
N.Y. State Bar Op. 328. While we wholeheartedly agree with the sentiment expressed in both these opinions, we are unable to find any support for it in the text of the Maine Bar Rules.
As noted at the outset, Bar Rule 3.2(f)(3) specifically addresses conduct that involves "dishonesty, fraud, deceit or misrepresentation." The common meaning of those words encompasses conduct that involves characteristics such as untruthfulness, theft or affirmative misrepresentation. We do not believe that the language of the rule can be read so broadly as to proscribe conduct simply because we are of the view that it is "unfair" or "not nice," or is "dishonorable." Such a broad reading of the rule could conceivably sweep in an array of conduct that was thought to be distasteful or unfair, even if not fraudulent or dishonest. In our view we are not authorized to apply this rule so as to prohibit conduct that we did not like or which we think might, in the words of the New York committee, "inhibit" the "easy flow of communication." We do not have a charter authorizing us to declare conduct to be unethical simply because we believe that it "offends our sense of honor and fair play" or because it will inhibit communication. Nor do we believe that the failure of the recording attorney to include a beep tone as required by the telephone carrier's tariff would result in a violation of the Bar Rules. We conclude, therefore, that, however much we would like to do so, we cannot find that electronically recording a conversation without the knowledge of the other participant(s) is per se prohibited by the text of the rule.
Having so concluded, we also note that such conduct must be undertaken with care. As stated in Oklahoma Op. 307:
Whether recording without the knowledge or consent of the other party is deceptive or unethical is situation specific. While in most situations, recording will be permissible, some situations will dictate a different result. For example, if a lawyer by words or conduct entices someone into believing a conversation is confidential and for his or her ears only, yet the lawyer records the conversation and disseminates a transcription to others, then the lawyer has engaged in a deceptive practice. Moreover, a lawyer is bound to be truthful. [citation omitted] Thus, if inquiry is made regarding the tape recording, then the lawyer must be candid and truthful.
The same observations would also apply with respect to subsequent use of the recording. That is, the recording must be used in a fashion consistent with Rule 3.2(f)(3). It is obviously not possible to delineate all the circumstances that might cause such usage to be in violation of the rule, since that would be a "situation specific" determination. However, the fact that the act of recording is not per se unethical still requires that the recording attorney?s conduct must otherwise not be dishonest, fraudulent, deceitful or involve misrepresentation.
Footnotes
[1]Bar Rule 3.2(f)(2) prohibits a lawyer from engaging in "illegal" conduct that "adversely reflects on the lawyer's honesty, trustworthiness or fitness." Since this question does not involve illegal conduct, we view that rule as not applicable.
[2]Telephone directories in Maine typically include a statement in the instructional portion of the directory informing users that use of a recording device without a beep tone every 15 seconds "is prohibited." The directory does not state the consequences for violation. The directory statement apparently arises out of the tariff filed by the local telephone company with the Maine P.U.C. which tariff provides that phone subscribers must provide for a "beep tone" device when recording a call to alert other participants to the fact of the recording. Such tariffs also provide that failure to use such device may result in termination of phone service. We do not know the extent to which telephone carriers in Maine actually enforce this condition, nor is it clear whether phone users are even aware of this condition and the possible consequences for violation. In any event, violation of the telephone company's tariff (i.e. its operating rules) by the user does not appear to be a violation of law, but at most a breach of the contractual terms on which the telephone service is provided.
Enduring Ethics Opinion
Enduring Ethics Opinion #168 [October 2015]
Opinion #167. Referring Attorneys
Issued by the Professional Ethics Commission
Date Issued: January 6, 1999
Facts
A lawyer who has practiced law for many years no longer does a substantial amount of legal work herself, but instead advertises and holds herself out as a "referring attorney." Clients will come to her with their cases, and she will find an attorney to take that case. That is all she will do on the case. Her remuneration for this effort will be a fee sharing arrangement with the referral attorney under Maine Bar Rule 3.3(d). The lawyer's activities are neither sponsored nor approved by any bar association in the State of Maine.
Against the background of these facts, Bar Counsel poses the following questions:
Is this lawyer simply engaging in fee sharing permitted by Maine Bar Rule 3.3(d), or is she operating a lawyer referral service in violation of Maine Bar Rule 3.9(f)(2)?
If the lawyer is operating a lawyer referral service prohibited by Maine Bar Rule 3.9(f)(2), is the lawyer engaging in misconduct or are the lawyers she refers cases to engaging in misconduct?
Is there an internal inconsistency between the terms of Maine Bar Rule 3.3(d) and Maine Bar Rule 3.9(f)(2)?
Opinion
This Commission previously addressed very similar questions in Opinion No. 87 issued on August 31, 1988. Maine Manual on Professional Responsibility 0-305 (1997). In that case, we interpreted Bar Rule 3.9(f)(2) as prohibiting a lawyer from paying a referral fee to a lawyer referral service privately operated by an individual lawyer or group of lawyers or law firms. The Commission based its Opinion No. 87 on the observation that such a privately-operated lawyer referral service consisting of a limited number of select members would not qualify as a referral service "operated, sponsored, or approved by a bar association." Bar Rule 3.9(f)(2).
Opinion No. 87 did not firmly and finally close the door on this matter. Rather, it concluded diffidently that "[i]n view of the fact that there may be alternate ways to structure such a private arrangement, we expressly limit this opinion to the proposal as presented."
The facts presented here do not appear to materially differ from those presented in Opinion No. 87. At base, the same proposition is being advanced: That a lawyer be allowed to pay a fee to a referral service operated by an individual lawyer or lawyers and not operated, sponsored or approved by the bar association. Unless we are to rethink Opinion No. 87, therefore, our conclusion would remain the same: The proposed activities would consist of the operation of a lawyer referral service that is not operated, sponsored or approved by a bar association; therefore any lawyer who paid a fee in return for the referral would be violating Bar Rule 3.9(f)(2); and the lawyer operating the referral service would in turn be violating Bar Rule 3.9(f)(3) for assisting in the referring attorney's violation of Bar Rule 3.9(f)(2).
We hesitate to so conclude our analysis without further discussion, however, because Opinion No. 87, unlike the questions posed to us by Bar Counsel, did not consider the relationship between Bar Rule 3.9(f)(2) and Bar Rule 3.3(d). Bar Rule 3.3(d) prohibits unassociated lawyers from dividing a fee for legal services with one another unless:
The client, after full disclosure, consents to the employment of the other lawyer and to the terms for the division of the fees; and
The total fee of the lawyers does not exceed reasonable compensation for all legal services they rendered to the client.
Nothing in the language of Rule 3.3(d) requires that each lawyer actually provide substantive legal services to the client. Under either the Model Code or the Model Rules, such a requirement existed because both the Model Code and the Model Rules required that the fee division be made in proportion to the services performed or the responsibility assumed. As we have noted on a prior occasion, however, the Supreme Judicial Court apparently rejected the full breadth of the fee-sharing limitations adopted elsewhere. See Professional Ethics Opinion No. 103 (Feb. 7, 1990); Maine Manual on Professional Responsibility 0-357 (1997). The Court has modified Maine's Rule to allow, for example, the payment of a percentage fee to a referring attorney who is to have no responsibility with respect to the matter and who will have no involvement in the case other than being kept apprised of the matter by the attorney to whom the case is referred. Id.
We thus have a situation in which one Bar Rule (3.9(f)(2)) prohibits an attorney from paying a fee to a referral service not operated, sponsored or approved by a bar association, while another Bar Rule (3.3(d)) allows an attorney to pay a fee to another lawyer for what is, in essence, the service of referring a client.
Despite this apparent conflict that prompts Bar Counsel's inquiry, we conclude that the two rules are reconcilable, In reaching this conclusion, we draw a distinction between what we think are two different situations: 1) a situation in which a lawyer who holds himself out as practicing law divides a fee for legal services with another lawyer; and 2) a situation in which a lawyer principally or exclusively holds himself out as operating a referral service. In making this distinction, we are assisted by the fact that we have previously recognized that a lawyer who refers a client to another lawyer, and splits a fee with that lawyer, remains the client's lawyer with respect to the matter at hand. See Opinion No. 145 (Sept. 27, 1994), Maine Manual on Professional Responsibility 0-499 (1997) ("the conclusion is inescapable that [Bar Rule 3.3(d)] contemplates both lawyers being employed in some sense by the client ... and ... a compensated referral to a particular lawyer is in and of itself representation of [the client] in the matter. . . ") Moreover, in the normal fee-splitting situation, the desire for a referral is not necessarily the sole reason for the client to contact the referring attorney in the first instance and, even when a referral is made, the referring attorney may continue to provide substantive legal services. The referral service, on the other hand, exists for the principal purpose of making referrals, is presumably contacted by clients for that reason, and as a general matter anticipates having no substantive involvement in any of the matters that it refers.
We recognize that these distinctions are not sharply drawn, may represent variations in degree more than kind, and might be difficult to apply to a situation in which, for example, a gradually increasing percentage of a lawyer's practice consists of referrals. On the facts posed here, however, the attorney expressly holds herself out as a ?referring attorney" and invites the public to seek her out for the purpose of obtaining a referral. To read Rule 3.3(d)(3) so broadly as to allow such activity under the rubric of fee division would substantially eliminate the protections of Rule 3.9(f)(2) by allowing any individual lawyer, without bar association sponsorship or approval, to operate a referral business.
Conversely, neither the result we reach here, nor the result adopted in Opinion No. 87, undercuts the plain language or spirit of Rule 3.3(d). Rule 3.3(d) does not grant permission to split fees in any and all circumstances no matter what the provisions of the other Rules. Rather, it simply creates an exception to the prohibition on fee division under certain circumstances. The fact that a subset of those circumstances (e.g., fee-splitting that occurs as a result of the operation of a referral service) might entail activity that is elsewhere prohibited by the Rules creates no inconsistency within the Rules. In short, that a lawyer is not prohibited by one rule from certain conduct does not mean that the conduct is permissible even in circumstances where it is otherwise prohibited by another rule.
In conclusion, we answer Bar Counsel's questions thus:
Whether or not the attorney is engaged in fee division that would otherwise be permissible, she is also engaged in operating a referral service that is not operated, sponsored or approved by a bar association.
Lawyers who compensate her for referrals do so in violation of Bar Rule 3.9(f)(2), and she violates Bar Rule 3.9(f)(3) by assisting in (indeed making possible) these violations.
There is no inconsistency between the terms of Maine Bar Rules 3.3(d) and 3.9(f)(2). The rules allow lawyers to refer matters for a fee incident to the practice of law while simultaneously insisting that persons who hold themselves out as a referral service do so subject to bar association sponsorship or approval.
Opinion No. 87 remains valid, and is fully applicable to the facts presented here.
Enduring Ethics Opinion
Opinion #166. Affiliation with Entity Selling Inter Vivos Trusts
Issued by the Professional Ethics Commission
Date Issued: December 2, 1998
Question
A Maine lawyer has been offered affiliation with an entity that is in the business of selling inter vivos trusts. The entity solicits its clientele through non-lawyer representatives, who receive no compensation for effecting a sale, or so it is claimed, but may be compensated if they are used by the trust settlors to perform related services such as effecting transfers of title. The proposal made to the lawyer contemplates that the entity prepare the trust documents and that the lawyer ?review? them for suitability to the client?s needs and conformity with local law. The lawyer is expected to meet with the client. The fee for all of these services is to be paid by the client to the lawyer. The lawyer is then obligated to pay the entity for the trust documents according to a previously agreed schedule. The question is whether this arrangement violates the Maine Bar Rules.
Opinion
Rule 3.9 (f)(2) provides in pertinent part:
A lawyer shall not compensate, or give anything of value to, a person or organization to recommend or secure employment by a client, or as a reward for having made a recommendation resulting in employment by a client ....
In the arrangement under consideration an organization would receive a thing of value, namely cash as one consequence of having made a recommendation resulting in employment of the inquiring lawyer. If this payment reasonably may be characterized as fair compensation to the entity for the service of preparing trust documents, we would be unable to conclude that it is a reward for recommending the lawyer and therefore a violation of Rule 3.9(f)(2). If, however, the fee is excessive compensation for the document preparation services to be rendered by the entity, all or part of the fee must be considered a reward for recommending the lawyer and a violation of Rule 3.9(f)(2).
As presented to the Commission, the circumstances strongly suggest that the so-called document preparation fee is in reality a thinly disguised reward for the referral. The documents could and normally would be generated by the attorney without the assistance of an outside drafting service. Such documents are available from many sources normally found in a law office. If the attorney practices in the field of estate planning and personal counseling, the overwhelming likelihood is that several examples are available in office files and that the attorney has an office staff experienced in following directions to adapt the models at hand to a new case. In short, in arrangements of this kind, the real value to the attorney will almost always be, not the documents, but referral of the client. Of course, the attorney will know what the truth is. If the service of document preparation has no significant independent value, a violation of the Bar Rules would appear to be inevitable.
Enduring Ethics Opinion
Opinion #165. Disclosures Required in Real Estate Transaction Where Lawyer Represents Lender and Issues Title Policy
Issued by the Professional Ethics Commission
Date Issued: December 2, 1998
FACTS
H & W contract to purchase a home. The purchase and sales agreement requires Seller to convey marketable title to H & W. H & W apply for financing with Bank. Bank?s mortgage consultant invites H & W to choose among several title companies and law firms to effectuate the loan closing. H & W choose AA Title Company, owned by Attorney A.
The closing takes place at AA Title Companies offices and A attends the closing. In advance of closing, A provides H & W with a written notice that he is representing the lender and that if they wish to do so they may obtain separate counsel. H & W do not retain separate counsel. At the closing, A asks H & W to sign a Notice of Availability of Owner?s Title Insurance Policy form, indicating whether they wish to purchase an Owner?s policy, in addition to the Loan policy that is required by the lender.
QUESTIONS POSED
Question 1: If H & W ask A whether they should purchase an Owner?s policy, should A respond?
Question 2: If H & W affirmatively decline to purchase an Owner?s policy, is A obligated, prior to completing the closing, to give H & W a copy of the Schedule B (exceptions) to the Loan Policy ?
Question 3: Schedule B to the Loan Policy contains a non-standard exception, which should be examined and discussed by H & W with their lawyer. Is A obligated to call this to the attention of H & W ?
Question 4: H & W indicate that they wish to purchase an Owner?s policy. On Schedule B of both the Loan and Owner?s Policies there is an exception that, according to the Maine Bar Association?s Title Standards, impairs marketability of title to the real estate but, according to the standards for the secondary mortgage market, will not prevent the mortgage from being sold on the secondary market. Is A obligated to call this circumstance to the attention of H & W?
DISCUSSION
In the hypothetical posed here, A has informed H & W in advance of closing that his role is to represent the Lender; he has done so in writing. A has proffered to H & W the Notice of Availability of Owner?s Title Insurance Form. A has made his role clear to H & W.
Question 1
When H & W ask A whether they should purchase an Owner?s policy, A should take care in any response to avoid muddling what he has striven to make clear. If A wishes, A may politely decline to offer any advice. If A offers H & W any advice on this subject, he should disclose the fact of his non-representation and disclose his agency relationship with the title insurance carrier.
Question 2
If H & W have affirmatively declined the purchase of an Owner?s policy by signing the declination on the Notice of Availability of Owner?s Title Insurance Form, A, who has taken pains to make clear that he does not represent H & W, is not obligated to provide H & W with a copy of the Schedule B of the Loan policy, prior to completing the closing.
Question 3
In the event that Schedule B of the Loan policy contains a non-standard exception that ought to be examined by a lawyer representing H & W, A is not under any obligation to call this to the attention of H & W. A has made it clear in advance of closing that he is not representing H & W and that they should seek separate counsel if they need to. To impose upon A an obligation to give advice to H & W finds no basis in the Bar Rules. The Bar Rules establish a minimum standard of conduct for attorneys. An attorney may wish to make certain that all parties at a closing understand the consequences of their legal acts, but when gratuitously offering any advice, A should be cautious not to create confusion with respect to his role and professional obligations.
Question 4
Similarly, in an situation where H & W have chosen to go unrepresented, A is under no obligation to warn them of the divergent standards between the standards of marketability of title and the secondary market standards. A is free, however, to do so.
As a general comment, although A has made all of the correct disclosures to H & W, the risk remains that it may nonetheless appear to H&W that A?s participation in the transaction implies some degree of responsibility on A?s part to call a halt to the closing and, if necessary, to refer H & W to other counsel for appropriate advice. Because it is common to provide borrowers with copies of the loan policy or of Schedule B to the loan policy, an attorney must bear in mind the underlying policies of Bar Rule 3.6(i), which provides:
(i) Avoiding Misreliance. If a lawyer knows or should know that the lawyer?s advice or opinion may be communicated to a person other than the lawyer?s client, the lawyer shall take reasonable steps to prevent that person from believing that the lawyer represents that person?s interests as well as the interests of the client.
While this provision refers to situations in which the lawyer?s advice or opinion is communicated to a non-client, similar concerns would necessarily obtain where the matter communicated is in the form of a title insurance policy or its schedule, which is a derivative of the lawyer?s opinion. Under such circumstances a lawyer should not merely rely upon the initial disclosure of the identity of the lender as client, but should take reasonable other steps to avoid misreliance. Such other steps may include pointing out that while H and W ultimately bear the cost of A?s fees, these fees have been billed to A?s client, the Lender[1].
Footnote
[1] This opinion relates only to obligations imposed by the Bar Rules. The Commission recognizes that there may be other obligations or responsibilities to H and W arising outside the Bar Rules, which may need to be borne in mind by an attorney in A?s position.
Enduring Ethics Opinion
Opinion #164. Release of Insured's Client Confidences and Secrets to Auditing Firm Retained by Insurance Company
Issued by the Professional Ethics Commission
Date Issued: December 2, 1998
Facts
A law firm has been retained by an insurance company to defend the insureds of the company. Subsequently, the insurance company advises the law firm, that it has hired an auditing company to review the insurance company?s case files at the law firm to insure that the amount of time devoted by the law firm to each file was reasonable and that the amount billed to the insurance company was consequently appropriate.
Following its retention by the insurance company, the auditing company sends an ?audit agreement?, to the law firm. The agreement provides that the law firm will produce all documentation supporting its billing to the insurance company, as well as make available all firm personnel to answer all questions about the billing posed to them by the auditing company. The agreement has no provisions for the law firm to withhold from the auditing company any confidence or secret that it may have obtained from an insured.
Question Presented
May the law firm agree with an insurance company or its auditing company to provide information from files of the insurance company?s insureds, if that information contains confidences or secrets within the meaning of the Maine Bar Rules?
Opinion
On several occasions in the past, the Ethics Commission has had occasion to determine the identity of the client when a lawyer is retained by an insurance company to defend an insured of the company. In each case, the Commission concluded that, even though the insurance company may be paying the cost of representation, the client is the insured and not the company. Opinions Nos. 63, 72, 122. Therefore, the provisions of Maine Bar Rule 3.6(h), concerning the preservation of confidences and secrets of a client by a lawyer, fully apply to the relations between a lawyer and an insurance company?s insured. Those provisions prevent a lawyer, and his or her co-workers, from disclosing the confidences or secrets of his or her clients, subject to certain exceptions not applicable here. Consequently, without client consent the inquiring law firm here may not provide, or agree to provide, information containing confidences or secrets of a client-insured, either to the insurance company, or to an agent of the company, such as a retained auditing company.
It is, of course, true that insureds may give express consent to communications between their counsel and their insurer pursuant to which counsel passes along to the insurer confidences or secrets of the insured. Sometimes the consent is in writing, as Rule 3.6(h) requires. Such communications are made, generally, for the purpose of allowing the insurance company to make decisions it is entitled to make, or in which it is entitled to participate, such as settlement. The Commission is of the view, however, that the giving of such express written consent by the insured should not be read to mean that the insured has impliedly consented to the disclosure of confidences or secrets to an auditing company retained by the insurance company for purposes other than defending the claim. Absent express written consent for this purpose there is nothing in the relationship between counsel and the insured or counsel and the insurer that makes the provisions of Bar Rule 3.6(h) inapplicable.
Similarly, the Commission does not think that the consent of the insured to the disclosure of confidences or secrets to an auditing company may be implied either from his or her undertaking a general duty to cooperate with the insurer, a common provision in insurance policies, or from the common law rule that an ethical duty to preserve confidences or secrets does not prevent the disclosure of confidences or secrets by a lawyer when necessary to further the representation. In the Commission?s view, client consent to the disclosure of confidences or secrets is not lightly to be implied; and a client?s consent to the disclosure of confidences or secrets to an auditing company cannot therefore be implied from a general duty to cooperate with the insurer (since the auditor is a different entity from the insurer) or from the implied power of a lawyer to make disclosures to further the representation (since the activities of the auditor have no relation to the conduct of the representation).
This conclusion does not mean, of course, that the law firm may not cooperate with the insurance company or its auditing company in providing information to justify its bills. It only means that, in providing such information, the law firm must take care not to release any confidence or secret which it may have obtained from the insured. The Commission suggests, therefore, that any agreement between the law firm and the auditing company simply recite that such information is excepted.
Enduring Ethics Opinion
Opinion #163. Prohibition on Invocation of Criminal Process to Assist in Collecting Bills
Issued by the Professional Ethics Commission
Date Issued: November 4, 1998
Question
The Commission has been contacted by an attorney who does collection work to determine whether Bar Rule 3.6(c) would prevent him from notifying a debtor who has given his client a bad check that he is subject to criminal penalties. He complains that he is at a competitive disadvantage because collection agencies not subject to the Bar Rules can successfully threaten persons who have written bad checks with prosecution if they do not promptly pay what is owed. The Commission is treating the letter in question as an inquiry about whether the criminal process may be invoked to any extent to assist in collecting bills.
Opinion
Bar Rule 3.6(c) provides that:
A lawyer shall not present, or threaten to present, criminal, administrative, or disciplinary charges solely to obtain an advantage in a civil matter.
Rule 3.6(c) was taken from DR 7-105 of the A.B.A. Model Code of Professional Responsibility. Regarding the policy of the rule, ethical consideration (EC) 7-21 states that:
EC 7-21. The civil adjudicative process is primarily designed for the settlement of disputes between parties, while the process is designed for the protection of society as a whole. Threatening to use, or using, the criminal process to coerce adjustment of private civil claims or controversies is a subversion of that process; further, the person against whom the process is so misused may be deterred from asserting his legal rights and thus the usefulness of the civil process in settling private disputes is impaired. As in all cases of abuse of judicial process, the improper use of criminal process tends to diminish public confidence in our legal system.
The procedure for notifying persons who have issued dishonored checks of their legal responsibility to pay the face amount of the check is set forth in 14 M.R.S.A. § 6071. The form of the notice is prescribed by § 6073. A person receiving such a letter who does not respond within 10 days is subject to a penalty of up to $50 plus attorneys? fees and costs. Ibid.
A criminal penalty for negotiating a worthless instrument is established by 17-A M.R.S.A. § 708 (Supp. 1997-98). Giving a notice of dishonor prescribed by 11 M.R.S.A. § 3-1503 is a prerequisite to a finding of guilt.
As can be seen from the foregoing, the civil and criminal processes proceed on independent tracks although the notice of dishonor is similar. There is therefore no legal requirement that an attorney attempting to effect a collection advise the debtor that he is also subject to criminal penalties. Under such circumstances, the sole purpose of the reference to the criminal process would seem to be a veiled offer to withhold support for criminal prosecution in exchange for payment of the debt.
What if the inquiring attorney were to report the matter to the District Attorney or other appropriate law enforcement authorities and did not communicate directly with the debtor except to send a copy of his letter? In Decato?s Case, 379 A.2d 825 (N.R 1977), the New Hampshire Court held that since reporting is to be encouraged, arguably such a complaint would not have been made ?solely? for the purpose of securing advantage in the civil matter.
On the other hand, it could be argued that even reporting the check violation to government authorities would violate Rule 3.6(c) which prohibits even ?presenting? a criminal charge to gain civil advantage. Professor Wolfram suggests, however, that the rule should not be read to discourage attorneys from reporting conduct. Wolfram, Modern Legal Ethics, p. 717 (Practitioner?s ed. 1986). See also A.B.A. Professional Ethics Inq. Op. #1484 (Dec., 1981)(law firm may proceed with civil action while at the same time assisting with presenting the facts to criminal prosecutors). In Wolfram?s view:
The report should be discrete, without putting pressure on the prosecutor to take action; *should not be conveyed to the person charged*; and should not by its timing suggest a punitive or extortionate intent. (Emphasis added).
Ibid.
The Commission adopts Professor Wolfram?s interpretation of the rule. Merely reporting the bad check violation to the authorities should not be deemed to violate Rule 3.6(c) even though the creditor?s attorney might incidentally benefit if restitution were to result. Since notifying the debtor that his conduct was being reported is irrelevant to the process, however, any attempt to do so would violate the rule since its sole purpose would be to convey an implied suggestion that he should pay up before it is too late.
Finally, it should be noted that the inquiring attorney?s complaint that the inhibitions imposed by the Bar Rules place him at a disadvantage when compared with collection agencies could be replicated in many other areas where the Bar Rules impose ethical obligations on attorneys not applicable to non-lawyers. One of the trade-offs for the privileges attached to their status as professionals is that attorneys must be prepared to accept that non-lawyers competing in areas which overlap with the practice of law are not subject to equivalent rules of professional conduct.
Concurring Opinion
A minority of the Commission concurs in the result reached by the majority, because the inquiry specified that the sole purpose of reporting the dishonored check was to induce payment and that the inquiring attorney knew there would be no prosecution. The minority does not agree that a violation of Rule 3.6(c) necessarily occurs whenever an attorney reports a crime to a prosecuting authority and notifies the perpetrator that the report has been made or notifies such a person that a report will be made. Notifying the perpetrator does not inevitably demonstrate that the attorney?s purpose was ?solely? to obtain an advantage in a civil matter, as the rule requires. The majority opinion treats Rule 3.6(c) as if it prohibited an attorney from presenting or threatening to present charges whenever one of the purposes is to obtain an advantage in a civil matter. That is not what the rule says.
Enduring Ethics Opinion
Opinion #162. Lawyer as Witness in Real Property Case Where Lawyer Previously Certified Title
Issued by the Professional Ethics Commission
Date Issued: October 14, 1998
Question
The inquiring attorney represents a client in a trespass case in which one issue to be decided will be a determination of title. Opposing counsel has advised the inquiring attorney that the inquiring attorney had previously certified title to the disputed property in accordance with the standards of the Maine State Bar Association. While the inquiring attorney believes his previous certification is ?probably? not relevant, he has been advised he will be deposed by opposing counsel on the matter.
The question is whether under the circumstances the Inquiring attorney can continue to represent his client, and whether at the trial even if he is to be called as a witness another member of his firm may continue to represent his client.
Opinion
Rule 3.4(g)(1)(i) states that ?A lawyer shall not commence representation in contemplated or pending litigation if the lawyer knows, or should know, that the lawyer is likely or ought to be called as a witness.? Rule 3.4(g)(1)(ii) creates an exception to the above rule by stating that, subject to exceptions that we are assuming for the purposes of this discussion are not relevant to this inquiry, ?[a] lawyer may commence representation in contemplated or pending litigation if another lawyer in the lawyer?s firm is likely or ought to be called as a witness.?
Were Rule 3.4(g)(1) the only applicable rule, the attorney?s firm, would not be prevented from continuing the representation. The problem arises because Rule 3.5(b)(1) seems to answer the inquiry differently: ?If a lawyer knows, or should know, that the lawyer or a lawyer in the lawyer?s firm is likely or ought to be called as a witness in litigation concerning the subject matter of the lawyer?s employment, the lawyer and the lawyer?s firm shall withdraw from representation at the trial unless the court otherwise orders. This rule does not apply to situations in which the lawyer would not be precluded from accepting employment under Rule 3.4(j).?
The reference in the last sentence of Rule 3.5(b)(1) to Rule 3.4(j) is problematical since Rule 3.4(j) does not exist in the present Rules.[1] Until the 1993 amendments, the text of Rule 3.4(g)(1) was Rule 3.4(j). The 1985 amendment to old Rule 3.4(j) added the provision now designated as Rule 3.4(g)(1)(ii). When present Rule 3.4 was revised In 1993, no substantive changes were made to Rule 3.4(j) other than re-designating it as Rule 3.4(g)(1). The Commission therefore concludes that Rule 3.5(b)(1) intended to refer to the rule now designated as Rule 3.4(g)(1)(ii).
Thus the Commission concludes that Rule 3.4(g)(1) (ii) answers the inquiry. As long as another lawyer represents the client the firm may continue its representation. If the Inquiring lawyer wishes to personally continue representation of the client, he may do so until such time he knows, or should know, that he is likely to be called as a witness. The Commission is in no position to determine at what point in the facts will develop such that the ?know or should know? threshold is crossed. If in doubt and the inquiring attorney Is unwilling to transfer representation to another member of his firm, he may have to bring the inquiry to court in an appropriate pre-trial motion.
The Commission further adds that even if the attorney or his firm may continue representation under the cited Rules, a further analysis must be conducted under Rule 3.4(f) and 3.4(b). After all, the prospect of the attorney?s prior work being presented to a fact finder to support a position contrary to the interest of the client raises considerable concern about desirability of continued representation under principles set forth in these two Rules.
Footnote
[1] The West Publishing pamphlet of Maine Rules of Court, 1997, cite the reference as a rule 3.4(g)(1)(i), but there is no authority for that modification, and the Rule as officially promulgated is as stated in this opinion.
Enduring Ethics Opinion
Opinion #161. Raising Funds in Support of National Center for Judicial Education
Issued by the Professional Ethics Commission
Date Issued: January 21, 1998
Question
The Commission has been asked whether the conclusion reached in its Opinion #129 would apply to the creation of a Maine committee of lawyers and lay persons to raise funds in support of a national center concerned with judicial education. The center presents programs for the education of judges of all state and federal courts. The funds would be used for all the work of the center, including its educational programs for judges. Maine judges are now eligible to attend, and we are informed have attended, programs sponsored by the center. The funds raised by the Maine committee would have no bearing on the future attendance of Maine judges. Membership on the Maine fund-raising committee would carry with it an obligation to make a substantial monetary contribution to the work of the center. Membership on the committee could be anonymous or public, depending on the wishes of the member and the requirements, if any, imposed by the Maine Bar Rules.
Opinion
The Commission?s Opinion #129 concluded that Maine Bar Rule 3.7(h)(1) prohibited Maine lawyers from making and soliciting contributions to a Judicial Education Fund to be created under the auspices of the Maine Bar Foundation. The fund would have made annual grants to the Judicial Department to be used to defray the expense of providing and attending judicial education programs for Maine?s judiciary. The Opinion reviewed the drafting history of Bar Rule 3.7(h)(1), changes in its counterpart in the Model Code of Professional Responsibility, and significant differences between the Maine and Model Rules. The Commission concluded that the Maine Rule is so broadly framed that the phrase ?directly or indirectly give or lend anything of value to a judge? must be read as including contributions to a judicial education fund that would benefit only Maine judges, even anonymous contributions, and solicitation of such contributions.
The question now presented to the Commission is different in four ways from the proposal discussed in Opinion #129. First, the recipient organization is national not local; the Maine contributions become part of a fund along with contributions from lawyers and other sources nationwide. Second, there will be no lump sum grant to the Judicial Department attributable directly to the generosity of contributors and effectiveness of solicitors. Third, we are assured that the level of contributions from Maine will have no bearing on the number of Maine judges who attend programs of judicial education or receive scholarships to attend. Fourth, although we are told that the anonymity of contributors and members of the State committee is possible, it seems clear that the operation would be seriously compromised if such a requirement were imposed. We must assume that Maine?s legal and judicial communities would be aware of the total level of contributions from Maine and probably the level of individual and firm contributions.
The legal backdrop to the question has been remarkably static, in view of changes in the surrounding circumstances and the effect of Opinion #129 itself. In 1993 the Maine Supreme Court adopted a revised Code of Judicial Conduct, which details gifts and contributions judges are allowed to accept, including ?a scholarship or fellowship awarded on the same terms and based on the same criteria applied to other applicants.? [Canon 4.D(5)(g)] Although the conclusion of Opinion #129 rested in part on an observation that the Maine Bar Rule omitted a reference to the Code of Judicial Conduct, unlike its counterpart in the 1969 ABA Model Code of Professional Responsibility, and although Opinion #129 is now five years old, the language of Maine Bar Rule 3.7(h)(1) has not been changed, nor is the Commission aware of any suggestion that it should be changed.
A majority of the Commission concludes that its answer to the question now before it must be controlled by the answer it gave in Opinion #129. That opinion rested on the phrase ?directly or indirectly?, a striking addition to Maine Bar Rule 3.7(h)(1) notably absent in the ABA?s 1964 Model Code of Professional Responsibility, which was a principal source of the Maine Bar Rules. The Opinion also noted that the Maine Rule omitted an exception allowing gifts to judges as permitted by the Code of Judicial Conduct. Among the gifts permitted by the Code of Judicial Conduct would have been invitations to attend activities devoted to ?improvement of the law, the legal system, or the administration of justice.? The omission was particularly significant, because it dropped a 1974 change in the ABA Model Code presumably known to the Select Committee that drafted the Maine rule and because Maine had adopted the Code of Judicial Conduct in 1974. The Select Committee?s omission had all the indicia of a purposeful change, convincing this Commission in 1992 that the Maine Bar Rules were designed to ban all forms of monetary support running from lawyers to the judiciary except for taxes and court fees. As we noted above, no attempt has been made to amend Maine Bar Rule 3.7(h)(1), although Opinion #129 is now five years old.
The proposal to create a Maine committee expressly for the support of a national organization whose mission is judicial education, the members of which would be chosen in part on the basis of their interest in making a substantial monetary contribution to the organization, is an indirect gift to every judge who receives educational services from the organization, just as a gift to the United Fund is an indirect gift to beneficiaries of the work of every participating organization. Under MBR 3.7(h)(1), for reasons explained in Opinion #129, it is immaterial that the motives of the contributing lawyers may be purely eleemosynary or civic. It is likewise immaterial that gifts of individual lawyers will in virtually every case be so attenuated when a particular Maine judge finally receives some educational benefit as to be insignificant. The rule requires that lawyers avoid even a suspicion that they are attempting to curry favor with the courts. Changes in the Code of Judicial Conduct as adopted in Maine, as well as changes wrought by the Model Rules of Professional Conduct are not open for consideration by this Commission. Maine Bar Rule 3.7(h)(1) does not impliedly change with the Code of Judicial Conduct; the opportunity to adopt such a cross-reference was declined by the drafters. The Model Rules have not been adopted in Maine; they are going through a laborious review by the Advisory Committee on Professional Responsibility. That body has yet to offer any recommendation based on Model Rule 3.5. This Commission is not authorized to amend the Bar Rules, only to interpret them.
Enduring Ethics Opinion
Opinion #160. Permissible Forms of Contingent Fee Agreements
Issued by the Professional Ethics Commission
Date Issued: November 26, 1997
Facts and Questions
An attorney has submitted to the Commission for its review a continent fee agreement which the attorney proposes to use when representing plaintiffs in employment law matters. The attorney represents that in employment disputes and employment litigation, a successful plaintiff may not receive a monetary recovery, but may instead simply be reinstated. In light of this possibility, the attorney proposes that the fee agreement provide that the fee be the greater of either (1) a predetermined percentage of any monetary recovery or (2) a fee based on an hourly fee for service. In either case the fee will be paid only if the attorney is successful in achieving a predetermined result. In addition, the attorney proposes to compute the percentage fee as a percentage of the total recovery to the client, including any court award of costs, pre-and post-judgment interest, attorneys fees and the present value of any award or benefits to be paid in the future. The attorney has inquired of the commission as to whether the fee agreement may include the above elements.
Discussion
The question is governed by Bar Rule 8, which Rule defines contingent fees and establishes the standards for their use. Rule 8(a) defines a contingent fee as an agreement for legal services
under which compensation, contingent in whole or in part upon the successful accomplishment or disposition of the subject matter of the agreement, is to be in an amount which either is fixed or is to be determined under a formula.
We have had occasion to apply this rule to a variation of these facts in Opinion 57 (7/1/85). In that opinion we concluded that it was permissible to have a fee arrangement under which the client agreed to pay a predetermined fee regardless of the outcome of a matter and to also pay an agreed upon bonus fee contingent on the lawyer achieving a specifically defined successful result.
Although Rule 8 does not specifically address a fee agreement such as proposed in this case, we see nothing in that rule which prohibits alternate methods of contingent fee computation. In the ordinary contingent fee case, the fee arrangement contemplates a monetary recovery for their client. In this, case, however, it is possible that a successful result might not recover any money for the client. We see nothing in the rule that would prohibit a contingent fee based on hourly rates in such circumstances. Indeed, given the possibility of alternate successful results for the client, it is entirely appropriate to set an alternate contingent fee arrangement. Further, Rule 8(e)(4) appears to contemplate that a contingent fee may be paid even with no monetary recovery, since that Rule requires the fee agreement to state ?whether and the extent to which the client is to be liable to pay compensation otherwise that from amounts collected for that client by the attorney.?
Nor do the rules require a particular method be used to calculate contingent fees. All that Rule 8 requires with respect to computation of the fee is that the payment of the fee be tied to ?the successful accomplishment or disposition of the subject matter of the agreement? and that the fee be either ?fixed? or ?determined under a formula.? While it is customary to use a contingent fee formula that is expressed as a percentage of the monetary recovery, the rule does not limit the type of permissible formula that may be used in contingent fee agreements. A fee defined as an hourly fee for service is equally permissible as a ?formula.? It is sensible and logical to permit the use of an hourly fee for service when the successful result might not result in the payment of money to the plaintiff. We conclude, therefore, that it is permissible to make a contingent fee agreement that provides for a fee computation in the alternative.
The attorney also inquires as to whether a percentage contingent fee may be computed based on the total amount awarded to the client including pre- and post-judgment interest, costs, attorneys fees and the present value of any award or benefits to be paid in the future. Rule 8 does not provide an express answer to the question. However, to the extent that the fee is computed as a percentage, the Rule does require that the percentage be applied to the ?amount collected? for the client. An award as a result of a court judgment ordinarily includes interest and costs and may, where authorized by statute, include reimbursement for attorneys fees. All those funds belong to the client and constitute ?amounts collected for the client.? Similarly, a settlement which provides payment of monies in the future, such as a structured settlement in a personal injury case, also belongs to the client and are amounts collected for the client by the attorney. It is, therefore, permissible under Rule 8 to calculate a percentage contingent fee based on all those funds paid to the client. However, the attorney may not calculate his percentage recovery on any court awarded costs for which the client has separately reimbursed the attorney, since to do so would result in a double payment to the attorney for those out of pocket expenses for which the attorney had already been reimbursed.
Enduring Ethics Opinion
Opinion #159. Conflicts of Interest in Adoption Proceedings
Issued by the Professional Ethics Commission
Date Issued: November 6, 1997
Facts
Adoption Agency is a not-for-profit, charitable organization. It is licensed by the State of Maine?s Department of Human Services. By charter, rule, and custom, its mission is to provide assistance to persons, often single natural parent (?Birthmother?), in connection with adoptions. It provides counseling to parents considering the voluntary surrender or placement of their children for adoption; it assists Birthmothers in explaining options ranging from abortion, to keeping the child, to adoption; it performs ?home-studies? regarding prospective adopting parents; and, in connection with formal adoption proceedings, it assists parents surrendering or placing children for adoption. It obtains its funds through government grants, United Way allocations, donations, and fees paid as able by adopting parents in reimbursement for costs of adoption incurred by Adoption Agency.
The questions posed relate to two different proceedings. In a ?Consent? proceeding, the Birthmother appears in court and consents to a petition for adoption of the child by specifically identified adoptive parents. In a ?Surrender and Release? proceeding, the Birthmother appears in court and relinquishes all parental rights to the child, who is placed in the custody and control of Adoption Agency for the purpose of a subsequent adoption by some suitable person or persons. The Birthmother?s participation and action in each of these proceedings is fully voluntary, and the Birthmother in each case has the statutory right to revoke her consent during a three (3) day waiting period after giving her consent. The court must approve the adoption, and explain to the Birthmother the right of revocation, as well the availability of counseling, and other services, including appointed legal counsel.
Question
Can Lawyers who regularly represent an Adoption Agency (?Agency?) represent, at the request of Agency, both Agency and Birthmother in connection with either Consent or Surrender Release proceedings?
Analysis
Our answer to this question begins with Rule 3.4(c), the relevant portions of which state:
3.4(c) Conflict of Interest:
Simultaneous Representation.
(1) Representation Prohibited. Notwithstanding the consent of each affected client, a lawyer may not simultaneously represent, or continue to represent, more than one client in the same matter or group of substantially related matters when the matter or matters are the subject of litigation or any other proceeding for dispute resolution and the clients are opposing parties.
(2) Representation Permitted with Consent. In all other cases, if a conflict of interest exists, a lawyer may not undertake or continue simultaneous representation of more than one client except with the informed consent of each affected client to representation of the others. Consent is required even though representation will not occur in the same matter or in substantially related matters. Simultaneous representation in the same matter or substantially related matters is undertaken subject to the following additional conditions:
(i) The lawyer must reasonably believe (A) that each client will be able to make adequately informed decisions, and (B) that a disinterested lawyer would conclude that the risk of inadequate representation is not substantial, considering any special circumstances affecting the lawyer?s ability to provide adequate representation of each client, such as the fact that the clients may seek incompatible results or pursue mutually disadvantageous tactics, or that their adverse interests may outweigh their common interests.
(ii) While engaged in simultaneous representation, the lawyer shall consult with each client concerning the decisions to be made and the considerations relevant in making them, so that each client can make adequately informed decisions.
(iii) The lawyer shall terminate the simultaneous representation upon request of any client involved, or if any condition described in this paragraph (2) can no longer be met, and upon withdrawal shall cease to represent any of the clients in the matter or matters on which simultaneous representation was undertaken or in any substantially related matter, except with the consent of any clients who will no longer be represented.
We do not consider either type of adoption proceeding to present a situation in which simultaneous representation is per se prohibited under subsection (1). In a Consent proceeding, Agency is not even a party. And while Agency might fairly be considered a party in interest in a Surrender and Release proceeding, Agency and Birthmother are not ?opposing parties.? Agency and Birthmother come before the court with no dispute, and seek the same relief. And either Agency or Birthmother can unilaterally decide not to participate in the proceeding.
We therefore focus our analysis on subsection (2). Does ?conflict of interest? exist? Rule 3.4(b) provides that a ?conflict of interest? is present ?if there is a substantial risk that the lawyer?s representation of one client would be materially and adversely affected by the lawyer?s duties to another current client . . .? In this context, where Attorney and Birthmother seek the same relief, and where Agency?s relationship with Birthmother is such that, for example, Agency provides counseling to her, a reasonable argument could be made that no ?conflict of interest? exists. We nevertheless conclude that a conflict of interest does exist because of the potential that Birthmother might begin to change her mind about proceeding with the adoption at a point when Agency has acquired, if nothing else, an institutional momentum towards completion of the adoption, particularly in a situation in which, if the adoption is completed, Agency will receive reimbursement for its expenses from the adoptive parents. While the likelihood of such an occurrence may not be great in view of Agency?s duties to Birthmother and its not-for-profit nature, the importance of the matter?irreversible relinquishment of parental rights?is so significant that we find the risk of conflicting duties to be ?substantial? within the meaning of Rule 3.4(b)(1).
Resolution of this question, therefore, falls squarely within Rule 3.4(c)(2) in that a conflict exists, yet simultaneous representation is not per se prohibited. Application of the Rule 3.4(c)(2) standard may vary from case to case. Generally, though, on the facts described, whenever Lawyer is reasonably satisfied that Birthmother is able to make an adequately informed decision, and desires to go through with a surrender or consent, simultaneous representation of both Birthmother and Agency does not violate the Bar Rules. We so conclude for three principal reasons.
First, the fundamental and important issue confronting Birth-mother?whether to surrender her child to adoption?is an issue concerning which Lawyer plays little if any role. To the contrary, it is Agency itself that provides counseling on this issue, and the decision to proceed forward with adoption is made before Lawyer even arrives on the scene. Lawyer?s role here is not the role of a counselor or mediator in the making of a decision. Rather, Lawyer?s role here is largely ministerial.
Second, the issue concerning which Lawyer?s advice and skill are sought?how to make sure that the adoption is performed properly under the law?is an issue concerning which both Agency and Birthmother share a common goal, the attainment of which involves no bargaining between them.
Third, even though the matter involves a court proceeding, Birthmother?s participation in the proceeding is entirely voluntary, and the court itself is obligated to ensure that she is aware of that fact.
We also note that the Vermont Bar Association has reached a similar conclusion in an analogous situation. In Opinion No. 90-6, the Vermont Bar Association opined that an Agency attorney can assist a Birthmother (among others) in preparing the legal documents for an adoption, provided that the attorney discloses the attorney?s relationships with the agency. While Vermont Opinion No. 90-6 does not state that the attorney may actually represent Birthmother in the proceeding, we find no dispositive difference of substance in this context between preparing papers for Birthmother, and going to the hearing with her.
Of course the consent of both clients need be obtained, and informed. Here, the primary points to be disclosed to Birthmother are her continuing (until 3 days post-decree) right to terminate the proceeding or adoption and the extent, if any, to which Agency might receive funds if the adoption is completed. Lawyer should also address with both parties the fact that, if Birthmother desires to terminate or revoke her consent prior to or during the three day statutory period, Lawyer will so assist client without regard to any arguable interest of Agency to the contrary. Finally, Lawyer should advise both clients that the joint representation is limited to the adoption proceeding, that there will be no confidences and secrets as between the parties concerning the matter on which they are jointly represented, and that Lawyer will not represent either party as against the other in any other matter during the joint representation, related to the joint representation, or likely to involve confidences and secrets gained in the joint representation.
Enduring Ethics Opinion
Opinion #158. Formation of a Partnership With a Non-Lawyer for the Provision of a Governmental Services Including Lobbying
Issued by the Professional Ethics Commission
Date Issued: April 3, 1997
Facts
Attorney A has been practicing law as well as working as a lobbyist in the legislature in Augusta. Attorney A now proposes to form a partnership with a lay person to perform and provide government relations services, including lobbying. Aside from the provision of these government relations services, Attorney A does not propose to engage in the practice of law.
Question
Does the formation of a partnership with a non-lawyer for the provision of governmental services, including legislative lobbying, violate the provisions of Bar Rule 3.2(a)(2), which provides: ?A lawyer shall not form a partnership or a professional corporation with a person not licensed to practice law if any of the activities of the partnership or corporation consist of the practice of law??
Answer
For purposes of the construction of Rule 3.2(a)(2)[1], with respect to persons on the roll of active attorneys maintained by the Board of Overseers, the practice of law consists of the provision of services that lawyers typically provide, notwithstanding that lay persons may also lawfully provide the same services. This view has been generally accepted in the context of considering whether lay-lawyer partnerships violate the prohibition of codes of professional responsibility, ABA Formal Opinion #297.
Among the purposes of Rule 3.2(a)(2) is to assure that the Court and the Board of Overseers and its subordinate regulatory bodies are able to regulate members of the profession effectively (see Reporter?s Notes to Rule 3.2(a)). In the field of legislative lobbying, and the somewhat broader category of governmental relations services, both lawyers and non-lawyers provide very similar services. These may include the drafting and interpretation of laws, and representation before government agencies. It is reasonable to assume that the person selecting as a lobbyist a lawyer rather than a lay person does so in anticipation of a higher degree of legal skill, in the expectation of adherence to more stringent standards of professional conduct, or under the assumption that the relationship between lawyer-lobbyist and client will give rise to a confidential relationship. It should be obvious that for a lawyer to associate herself as a partner of a non-lawyer in the rendition of such services creates an intolerable risk of confusion, or worse, misplaced reliance. Thus, to the extent that lawyer A proposes to undertake a partnership with a lay person while continuing to maintain the status of an attorney on Board of Bar Overseers? roll of active lawyers, such a relationship would violate the provisions of Rule 3.2(a)(2).
The Bar Rules do offer a lawyer the option of assuming inactive status under Bar Rule 6(c). If Attorney A were to assume inactive status pursuant to Rule 6(c), such a partnership would be permissible, provided that Attorney A does not hold herself out as a lawyer. Attorney A must make clear to her government relations clients that her role is not that of an attorney, and they will not benefit by the protection offered by the lawyer-client relationship.
Bar Rule 7.3(i)(2) details a number of requirements imposed upon attorneys who assume inactive status[2]. The clear purpose of these requirements is to make very clear to former and prospective clients of the inactive lawyer that the lawyer has ceased to function as an attorney and that the client must seek legal services elsewhere. That having been said, there remains a significant risk that, even assuming compliance by the inactive attorney with the directives of Bar Rule 7.3(i)(2), she may not succeed in making the client - especially the former client - aware of the change in her status[3]. The burden necessarily resides with Attorney A to make the consequences of her altered status absolutely clear to all clients.
The adoption, effective February 15, 1997 of Amendments to the Bar Rules relating to the provision of ?law-related services? does not alter the views expressed in this opinion. If anything the text of the new Rule 3.2(h) reinforces our concerns:
(1) A lawyer shall be subject to the Code of Professional Responsibility with respect to the provisions of law-related services, as defined in paragraph (2), if the law-related services are provided:
(i) by the lawyer in circumstances that are not distinct from the lawyer?s provision of legal services to clients; or
(ii) by a separate entity controlled by the lawyer individually or with others if the lawyer *fails to take reasonable measures to assure that a person obtaining the law-related services knows that the services of the separate entity are not legal services and that the protections of the client-lawyer relationship do not exist*. (emphasis added)
Specifically, Rule 3.2(h)(1)(i) does not suggest, nor do we perceive that legislative lobbying performed by a lawyer can ever be distinct from the rendition of legal services[4]. Thus, the rendition of services by the lawyer would in any event be governed by the substance of this opinion, rather than by Rule 3.2(h).
Furthermore, since Attorney A does not propose to render any other legal services along with the lobbying and governmental relations services, and because the definition of law-related services in the rule[5] limits the scope of the rule to situations in which both legal services and law-related services are being rendered, the provisions of Rule 3.2(h) do not by their terms apply at all, so that, upon the facts set forth in the inquiry, the recent adoption of this Rule would have no effect whatsoever upon this opinion.
Footnotes
[1] The definition we utilize for the purpose of construction of this rule is broader than that employed by the Department of the Attorney General in enforcing the prohibitions against the unauthorized practice of law. Our definition is rooted in the regulatory purposes of the Bar Rules; it is designed to protect the public in its dealings with lawyers - with members of the Bar; the definition utilized in the context of the unauthorized practice of law is designed to protect the public from those who are not licensed.
[2] These include notifying clients, and, in the case of litigation, opposing counsel, of assumption of inactive status and of consequent inability to act as an attorney, and advising clients to seek alternative counsel. While these requirements set forth in the Bar Rules are the minimum required, they may not in all cases be sufficient to put all clients on notice of the changed status of the attorney.
[3] As pointed out above, government relations clients may not understand that any communications with A are not subject to the lawyer-client privilege and that A could be compelled to testify about the content of these communications.
[4] The Commission finds it difficult to conceive of any law-related services that would not, if rendered by a lawyer, constitute the practice of law, for purposes of Rule 3.2(a)(2). The Advisory Committee notes appear to be inclusive rather than exclusive:
In Maine the scope of ?law-related services? as opposed to legal services may be quite broad, in view of the indefinite meaning of ?unauthorized practice?. It may be that in this jurisdiction any service other than litigation is a ?law-related service?. Familiar examples would include, however, the preparation of a federal income tax return, lobbying and such activities as real estate brokerage and marital counseling.
At the present time, title insurance is the most common example of law-related services provided through a separate entity by a Maine law firm. See, however, Me. Prof Ethics Comm?n, Op. No. 118. The applicability of the Bar Rules to captive title insurance agencies has been raised only in connection with the practice of receiving a commission on the sale of a title policy. [citations omitted]
[5] ?The term ?law-related services? denotes services that might reasonably be performed in conjunction with and in substance are related to the provision of legal services, and that are not prohibited as unauthorized practice of law when provided by a non-lawyer.? (emphasis added)
Enduring Ethics Opinion
Enduring Ethics Opinion #158 [October 2010]
Opinion #32. Suing Former Client
Issued by the Professional Ethics Commission
Date Issued: September 22, 1982
Facts
The Commission has been asked for an advisory opinion in regard to the following situation. An attorney was requested by a local Bank to write to an individual about a past due account. At that time, the local Bank was, and has continued to be, a regular client of the attorney?s firm and a client for whom the attorney does a considerable amount of collection work. The attorney sent the individual a letter by certified mail indicating the Bank's intention to institute legal proceedings in the event his account was not brought current. Before receiving the letter, the individual went to the Bank and made arrangements satisfactory to the Bank for bringing his account current. The attorney was instructed by the Bank to take no further steps in the collection matter. Subsequently, the letter was returned to the attorney ?unclaimed.? The attorney was paid by the Bank for writing to the individual and the file was closed.
Approximately two months later, the individual to whom the attorney had written came to the attorney?s office and asked him to draft some deeds for him. The deeds involved property owned by the individual's father which the father intended to transfer to the individual. The lawyer advised the individual that he did collection work for the local Bank and had sent the individual a letter a few months before regarding his overdue account. The lawyer indicated to the individual that the file had been closed since arrangements had been made to bring the account current. The individual said that was all right and asked the attorney to draft the deeds. The deeds were prepared and the individual (hereinafter Client A) was notified that he could pick up the deeds at his convenience. After not hearing from Client A for a few months, the attorney wrote again and received no response.
Several months later, Client A and his son came to the attorney?s office and requested that some of the deeds be revised, replacing the son as the grantee, and that the son be billed for the revised deeds. The revisions were made and Client A and the son were so advised. Three months have passed since the attorney has heard from either Client A or his son.
The attorney now has received a request from the Bank to begin collection proceedings against this individual, Client A. The Attorney has requested an advisory opinion as to whether he can handle this collection matter on behalf of the Bank.
Opinion
At the time when Client A came to the attorney to request the attorney to draft some deeds, the attorney was required to and did properly comply with Rule 3.4(a) by disclosing to the prospective client his relationship with the Bank and his involvement in the initial stages of the former collection proceeding against the individual. Also at that time, the attorney was obligated to consider Rule 3.4(b) which forbids an attorney from accepting employment if the exercise of his independent professional judgment in behalf of a client will be or is likely to be affected. The facts in this case indicate that there was no relationship between Client A?s formerly overdue account and the deeds which were to transfer property from Client A?s father to Client A. Furthermore, the previous collection proceeding had been terminated when Client A made satisfactory arrangements with the Bank regarding this account and the file was closed. Therefore, it was appropriate for the attorney to have concluded that his representation of Client A in a matter totally unrelated to the former collection proceeding would not affect the exercise of his independent professional judgment on behalf of either the Bank or Client A. In addition, the attorney?s work for Client A, which involved the transfer of property into Client A?s estate, would have had no adverse effect on the Bank?s ability to collect on Client A?s account. Therefore, since the attorney was unlikely to be involved in representing differing interests, the Bank?s consent to the attorney?s work for Client A was not necessary.
At the time that the Bank requested that the attorney begin the second collection action against Client A, it is the Commission?s opinion that an attorney‑client relationship continued to exist between the attorney and Client A despite the fact that three months had elapsed since the attorney had heard from Client A. The facts in this case indicate that previously there had been a substantial hiatus between the time the attorney had drafted deeds for Client A and the time Client A had contacted the attorney regarding these deeds. Nonetheless, the actions of both Client A and the attorney indicate that they considered the attorney‑client relationship ongoing at that time. Under these circumstances, the attorney must consider the acceptance of the collection suit from the Bank against Client A as a suit against a present client.
Before accepting employment on behalf of the Bank against Client A, the attorney is required to disclose to the Bank his relationship with Client A. Rule 3.4(a). In addition, this second collection action would involve the attorney in representing ?differing interests? which is forbidden under Rule 3.4(b) unless it is obvious that the attorney can adequately represent the interests of both the Bank and Client A and each consents to the representation after full disclosure. Rule 3.4(d). Accordingly, the attorney must fully disclose to both the Bank and Client A the possible effect of his representation on the exercise of his independent professional judgment and obtain the consent of both. In the event both such consents can be obtained, the question still remains whether ?it is obvious? that the attorney can adequately represent both interests. Client A?s interest in the preparation of the deeds appears to be adequately protected since the attorney had completed the deeds for Client A before the Bank asked him to institute the second collection proceeding. There are no facts before the Commission which would lead it to conclude that the attorney could not adequately represent the Bank in the collection proceeding if Client A consented to such representation.
The attorney also must consider Rule 3.4(f) which forbids a lawyer from accepting employment if the exercise of his professional judgment on behalf of a client may be affected by any interest of the lawyer. Although there are no facts presented in this case which suggest a problem with this rule, the possibility that one may exist should be considered by the attorney. For example, the fact that the attorney may be attempting to collect his fee from Client A could affect the way in which he would proceed on behalf of the Bank in the collection matter. If such were the case, informed written consent of the Bank would be required in accordance with Rule 3.4(f).
Enduring Ethics Opinion
Opinion #33. Disqualification of Public Advocate's Counsel
Issued by the Professional Ethics Commission
Date Issued: September 22, 1982
ADVISORY OPINION 82‑1 RE: COUNSEL TO THE PUBLIC ADVOCATE
Facts
In 1981, by virtue of 35 M.R.S.A. § 1‑A, the Maine Legislature created the office of the Public Advocate for the purpose of representing the interests of the ?consuming public? in matters within the jurisdiction of the Public Utilities Commission. Pursuant to that statute, the Public Advocate is entitled to hire staff attorneys to represent him.
Attorney A was hired by the Public Advocate to serve as general counsel. Attorney A had previously been actively practicing before the PUC representing certain clients who sought utility rate ?reform? and who generally opposed petitions brought by certain utility companies. In typical cases, Attorney A represented these clients as intervenors opposing rate increases for utility company XYZ. As the result of Attorney A being hired as counsel to the Public Advocate, XYZ?s attorney requested an advisory opinion as to whether the provisions of Rule 3.7(i) of the Maine Bar Rules will be violated by Attorney A if he now participates in cases involving his former client and XYZ utility company.
Specifically, the utility company suggests that Rule 3.7(i)(3) prevents Attorney A from representing the Public Advocate as an intervenor in any case in which A?s former clients are also intervenors if that representation would be against the interests of those former clients. As a corollary, XYZ suggests that Attorney A thus could only represent the Public Advocate in cases in which the latter would take the same side as A?s former clients and, therefore, that the Public Advocate would not receive impartial advice from Attorney A about what position to take as an intervenor in these cases. The utility company concludes that Rule 3.7(i)(3) prevents Attorney A from representing the Public Advocate in any case involving Attorney A?s former clients.
XYZ further suggests that Rule 3.7(i)(4) also prevents Attorney A from representing the Public Advocate in those PUC cases in which A?s former clients are intervenors on the theory that those former clients are ?complaining witnesses? against the utility company.
Subsequent to the original request for an advisory opinion being made, the Public Advocate position became vacant and Attorney A was named Acting Public Advocate. The utility company now seeks the Commission?s opinion on the additional question of whether Attorney A?s continuing ethical obligations as a lawyer will disqualify him from acting in his new job in those cases where his former clients are involved as intervenors.
Discussion
The rules cited above read as follows:
Rule 3.7(i)(3). A public prosecutor or other government lawyer shall not conduct a civil or criminal case against any person whom he represents or has represented as a client.
Rule 3.7(i)(4). A public prosecutor or other government lawyer shall not conduct a civil or criminal case against any person relative to a matter in which he represents or has represented the complaining witness.
The Commission concludes that these rules do not, by themselves, bar Attorney A from representing the Public Advocate in matters pending before the PUC involving the former clients of Attorney A.[1] And, since he would not be barred as attorney for the Public Advocate, A also will not be barred from acting while serving as Public Advocate.
The Commission concludes that the word ?against? as used in both of the above‑quoted subsections does not apply to the factual situations presented by this inquiry. In a sense, all cases before the Public Utilities Commission are ?against? only one party, the utility. Unlike most civil cases, PUC cases do not typically have a plaintiff and a defendant. To the extent that other parties are involved, either in favor of the utility?s petition or in opposition to it, they are intervenors.[2] Those intervenors may take positions and make arguments which are adverse to each other but, to the extent that they are ?against? anyone, they are against the utility company only. The Maine Bar Rules recognize a distinction between action which is ?adverse? to the interest of a former client and a case which is ?against? a former client. See Rule 3.4(e), for example, which prohibits in some situations employment which is ?adverse? to a former client without that client?s consent. See also, Rule 3.6(i).
The Commission notes that XYZ has at least implicitly recognized this distinction between being against a former client and acting adversely to a former client?s interest. XYZ?s question to the Commission used the phrase ?against the client?s interest? to describe the possibility of the conflict between the Public Advocate and Attorney A?s former client as intervenors in the same PUC hearing. But the Rules do not use this expression. The Rules use either ?adverse to a former client? [Rule 3.4(e)] or ?against? a former client [Rule 3.7(i)(3) and (4)] We think the phrasing chosen by XYZ in making its inquiry recognizes that normally intervenors before the PUC are not considered ?against? but only adverse to each other at most.
The Commission concludes that Attorney A would not be barred solely by virtue of Rule 3.7(i) or 3.7(i)(4) from representing the Public Advocate even in the situation where the Public Advocate?s position was contrary to the position taken by a former client of Attorney A?s. Such representation would be, at worst, adverse to the former client?s interest. This would bring into play the provisions of Rule 3.4(a), 3.4(e), and 3.6(l). (And, those rules would normally be relevant only where the specific subject matter of the former employment was involved.)[3]
The conclusion that Attorney A is not barred by Rules 3.7(i)(3) and (4) from being involved in cases even when his new client?s position would be adverse to his former clients? interest makes it unnecessary to decide the corollary suggested by XYZ which was that Attorney A must be barred from all cases involving his former clients since he cannot be active in cases against their interests. It is worth noting, however, that the underlying assumption of this proposition is that XYZ and other utilities are entitled to the existence in Maine of a Public Advocate who is totally without bias and whose staff attorneys are equally impartial. Such an idealized concept of the Public Advocate?s office would be difficult to fulfill and, furthermore, was probably not the intent of the Legislature.
In conclusion, the Commission finds that Rules 3.7(i)(3) and (4) are not applicable to the situation presented by this inquiry. However, the rules regarding conflicts of interests and disclosure of confidential information should be considered by Attorney A.
Footnotes
[1] Other rules, such as 3.4(b), 3.4(e) or 3.6(l) may prevent Attorney A from representing the Public Advocate regarding matters in which he formerly represented other clients. Analysis of the possible violation of these rules will depend on more specific facts.
[2] The Commission recognizes that under 34 M.R.S.A. § 291 a combination of ten persons or groups may initiate PUC actions against a utility. Such proceedings, however, are the exception rather than the rule.
[3] For analysis of the limited nature of what is meant by the subject matter of the former employment, see Commission Opinions #79‑2 (10/17/79), #19 (1/15/81), and #22 (1/15/81
Enduring Ethics Opinion
Opinion #34. Listing Office Manager on Letterhead
Issued by the Professional Ethics Commission
Date Issued: January 17, 1983
The Commission has received an inquiry from a law firm regarding the propriety of listing on its letterhead the name of its non‑lawyer office manager (together with the title ?office manager?).
Issues of what may ethically appear on a lawyer?s letterhead have customarily been answered by reference to the rules on advertising. Originally, advertising rules were principally restrictive but with enumerated exceptions. See, e.g., DR 2‑102(A). The adoption of the Maine Bar Rules in 1978 significantly changed this approach by recognizing ?the right to advertise in general and [forbidding] only those practices that would be regarded as improper in any context,?[1] namely using statements which are either false, fraudulent, misleading, or deceptive. Rule 3.9(a). Those terms are defined by Rule 3.9(b).
We find nothing within the advertising rule (or the other ethics rules) which specifically prohibits the listing of non‑lawyers on a lawyer?s letterhead. Such a practice is therefore prohibited only if it can be said to be false, fraudulent, misleading, or deceptive. We do not believe that the listing of the name of an office manager on a letterhead, clearly so designated (assuming it is a truthful listing) would cause fraud or mislead or deceive the public. We reach this conclusion in part because the public would not falsely expect to receive any special benefit or assume that the law firm had any special expertise merely by virtue of having an office manager in its office.
[1] Reporter?s Notes to Maine Bar Rule 3.9(a)
Enduring Ethics Opinion
Opinion #35. Providing Opposing Counsel with Copy of Draft Order
Issued by the Professional Ethics Commission
Date Issued: January 17, 1983
Question
Where a judge in a litigated case requests the prevailing attorney to prepare a final decree or judgment, does the prevailing attorney have an obligation to give a copy of his draft proposal to opposing counsel, so that opposing counsel may have an opportunity to object and ask to be heard?
Answer
Yes.
Discussion
Maine Bar Rule 3.7(h)(2) prohibits the addressing of a ?written communication to a judge . . . concerning the merits of a contested matter pending before such judge. . . without furnishing opposing counsel a copy thereof . . .? This is a revision substantially identical to the provisions of DR 7‑110(B) of the ABA Code of Professional Responsibility. It is clear from the Reporter?s Notes that no substantive change was interceded by the Maine revision. Two subsidiary questions raised by the inquiry are whether the submission of the judgment was a ?communication? and, whether, after issuance of findings, the action was still a ?contested matter pending? before the Judge. Both of these questions are answered in the affirmative. Clearly, although the Judge has invited the submission of the decree, the submission of the proposed decree is a request to the Court to enter judgment in that format. The matter is still ?pending? in almost any case where the nature of relief sought is more complex than the mere computation of a number. Any matter where the result is the fruit of a contested hearing must still be considered to be contested until the details of the relief have been finalized. Even in a simple property‑damage tort case, the apportionment of damages to the loss may have an impact on insurance coverage or subrogation rights. In any action wherein equitable or declaratory relief is sought the scope of the relief may be more significant in determining who the winner is than whether the Plaintiff nominally obtains a judgment.
Although it may be argued that on occasion a Judge who delegates the drafting of the relief to one party is motivated, in part, by a desire to avoid further nitpicking over the terms of the order, the Judge can always retain responsibility for the drafting of the order. In most instances, the chance to review and comment or object to the proposed decree offers the best opportunity for the Court to make certain that the decree reflects the Court?s intent and effectively accomplishes the result desired by the Judge. The obligation to submit a copy of such a proposed decree to opposing counsel should be as fundamental as submitting a copy of a brief.
Enduring Ethics Opinion
Opinion #36. Litigation of Criminal Cases by Law Firm of Assistant District Attorney's Husband
Issued by the Professional Ethics Commission
Date Issued: January 17, 1983
Question
Do the Maine Bar Rules forbid an Assistant District Attorney from prosecuting a criminal case against a person who is represented by a lawyer whose partner is the spouse of the Assistant District Attorney?
Opinion
The question presented is answered in the affirmative: the Maine Bar Rules forbid an Assistant District Attorney from prosecuting a criminal case against a person who is represented by a lawyer whose partner is the spouse of the Assistant District Attorney. This prohibition applies even if the law firm were to make an arrangement by which the Assistant District Attorney?s spouse would not share in any legal fees earned as the result of criminal defense work in which the Assistant District Attorney was the prosecuting attorney.
In Formal Opinion No. 79‑3, issued on October 17, 1979, the Grievance Commission dealt with a somewhat similar situation in the context of civil litigation. There, citing Rule 3.4(f),[1] the Commission decided that ?the preferred practice? would be for a lawyer to obtain the client?s informed written consent to representation in civil litigation against a person represented by a law firm, in which the lawyer?s spouse is a partner.
In the context of criminal litigation, however, the State of Maine is the ?client? of the Assistant District Attorney, and it is not possible for the State to give its ?informed written consent? to such representation. Accordingly, in this situation it is necessary to address directly the question of the application of Rule 3.4(f) to the circumstances involved.
In construing Rule 3.4(f) the Commission must bear in mind the fundamental importance of the avoidance of any appearance of impropriety in the prosecution of criminal cases. The Commission must also take into consideration the intimacy of the marital relationship which is respected and protected by law. See M. R. Evid. 504 (Husband‑Wife Privilege); State v. Smith, 384 A.2d 687, 691 (Me. 1978) (holding that all marital communications are presumed to be confidential).
Given these considerations, the Commission concludes that in the situation presented the prosecutor?s professional judgment in the prosecution of a criminal case ?may reasonably be affected? by the fact that the prosecutor is the spouse of a lawyer who is the defense counsel?s partner. While it might be argued that the particular circumstances which would require disqualification in this type of situation could be determined in a case by case basis, the Commission believe that such ad hoc determinations would be neither feasible nor in the public interest. Accordingly, the Commission construes Rule 3.4(f) broadly to prohibit an Assistant District Attorney from prosecuting a criminal case against a person represented by a lawyer whose partner is the spouse of the Assistant District Attorney.
Footnote
[1] Rule 3.4(f) provides:
(f) Interest of Lawyer. Except with the informed written consent of the client after full disclosure, a lawyer shall not accept employment if the exercise of his professional judgment on behalf of the client will be, or reasonably may be, affected by any interest of the lawyer.
Enduring Ethics Opinion
Opinion #37. Representing Both Customers and Retailer Against Manufacturer
Issued by the Professional Ethics Commission
Date Issued: January 17, 1983
Facts
A person making the inquiry has recited the following facts:
In November of 1980, Law Firm A commenced an action in the Superior Court on behalf of a retailer of manufactured homes against the manufacturer, alleging breaches of express and implied warranties and intentional damage to the retailer?s reputation. The retailer has now asked that same law firm to represent unhappy purchasers of the allegedly defective manufactured homes and to join them in the lawsuit as formal parties. To date, the purchasers of the defective homes have made numerous complaints, but have not taken any formal action with respect to the alleged defect. The inquiring party states ?to the best of my knowledge the purchasers would not have a cause of action against our client for which the manufacturer would not be ultimately responsible.?
Opinion
There is an inherent conflict of interest in representing the retail purchasers with respect to a claim arising out of the alleged defects in the goods where the law firm represents the retailer in a claim against the manufacturer with respect to such defects. Rule 3.4(b) prohibits a lawyer from accepting employment ?if the exercise of his independent professional judgment in behalf of a client will be, or is likely to be, adversely affected by acceptance of such employment, etc.? Rule 3.4(d) authorizes multiple employment if it is obvious that the lawyer can adequately represent the interests of all parties and each party consents to the representation after full disclosure. It is our opinion that it is not at all obvious that the lawyer can represent adequately the interests of each party and, indeed, it appears that the professional judgment on behalf of a client is likely to be adversely affected by the acceptance of such employment. Each of the purchasers from the retailer has a potential action against the retailer. Each of the purchasers may have a direct right of action against a manufacturer. Notwithstanding that the retail purchasers? claim against the retailers may in whole, or in part, be passed on to the manufacturer, there may be differences in the ease of collection against the manufacturer or the retailer and there may be instances in which the risk of insolvency on the part of the manufacturer may create a direct conflict of interest between the retailers and the retail purchasers.
In addition, there exists the possibility of differing remedies for a consumer, vis‑a‑vis, the retailer as opposed to the manufacturer. If there are remedies against one which are not available against the other, then the interest of one client may not be adequately represented and the judgment of the lawyer may be affected. In addition, the potential problems in advising clients regarding settlements may very easily be affected by the representation of the retailers. Based upon all of this, it is our opinion that an inherent conflict of interest would exist which would prohibit the representation of both classes of Plaintiff in that action.
Enduring Ethics Opinion
Opinion #38. County Commissioner Taking Cases Against Towns in the Same County
Issued by the Professional Ethics Commission
Date Issued: June 2, 1983
Facts
A question has been raised as to whether a lawyer, who is also a County Commissioner, has a conflict of interest in two cases in which he is representing persons asserting claims against municipalities located in the county which he serves. In one case, the attorney/County Commissioner represents the estate of a passenger who was killed in a car crash resulting from a high speed chase. The complaint alleges that individual police officers of town A were negligent in initiating a high speed chase. Town A is joined as a defendant on a theory of respondent superior.
In the second case, certain police officers in town B have been sued by the same attorney for negligently allowing a criminal defendant to commit suicide by hanging himself while confined in the town lock‑up. Town B is joined as a defendant because of the employment relationship.
It is suggested by the inquirer that the attorney has a conflict of interest because he represents towns A and B in his capacity as County Commissioner. Questions are also raised about the propriety of inquiries made to officials of town B about their lock‑up agents of the county in which the attorney serves as Commissioner which were allegedly made to assist him in obtaining information relevant to the investigation of his case.
Opinion
We do not find a conflict of interest on the basis of the facts submitted. Bar Rule 3.4(b) states that a lawyer:
. . . shall not accept employment if the exercise of his independent professional judgment in behalf of a client will be, or is likely to be, adversely affected by the acceptance of such employment, or if it would be likely to involve him in representing differing interests . . .
In Opinion #29 (Feb. 4, 1982) which involved an attorney who was also a County Commissioner, we analogized the duty owed to the county to the duty owed to a client. We nevertheless determined that no conflict of interest would exist even though the attorney/County Commissioner in that case represented criminal defendants being prosecuted by the District Attorney since his duty to the county was not adverse to his relationship with the District Attorney.
Clearly the individual towns within a County Commissioner?s district are not clients of a lawyer/County Commissioner nor does he have any special duty to them as a result of his county office. Neither do we see anything in his official obligation to the county itself or to his constituents which would create an adverse interest in a case such as is presented here. Were it otherwise, the attorney in question would never be able to sue anyone living within the county which he represents.
We are unable to make any determination regarding the alleged incidents in which county employees are said to have been used to assist the attorney in question in investigating jail conditions in connection with his lawsuit against town A. The facts are disputed. Moreover, even if any improprieties were involved, they would seem to concern the use of public funds for a private purpose and not any matters within the purview of the Rule 3.4(b).
Enduring Ethics Opinion
Opinion #39. Associates of Part-time Assistant D.A.Representing Criminal Defendants
Issued by the Professional Ethics Commission
Date Issued: June 2, 1983
Facts
A member of a law firm with offices located in several counties has been offered a position as a part‑time Assistant District Attorney in one of the Prosecutorial Districts. The firm presently represents criminal defendants as well as inmates at the State Prison.
Question
May other members of the firm continue to represent criminal defendants as defendants in any court in the State?
Opinion
Although the Commission has no authority to express its opinion on the interpretation of statutes or Rules of Court other than the Bar Rules, an adequate response to the question raised cannot ignore Rule 53A, Maine Rules of Criminal Procedure which states:
No attorney for the State . . . and no attorney holding himself out as a partner or associate (of the attorney) . . . shall be retained or employed or shall act as attorney for any defendant in any criminal proceeding in any court of this State or in any civil case involving the same facts.
The prohibition reflects the fundamental importance of the avoidance of any appearance of impropriety in the prosecution of criminal cases. There are no exceptions permitted by the Rule. It matters not that the Assistant District Attorney and his associates may practice in different districts nor is there any provision for waiver or consent by the parties.
The adversarial relationship of the prosecutor and criminal defense attorney is clearly a matter of such paramount importance in the administration of criminal justice that Rule 53A does not grant exceptions that might otherwise apply in other circumstances (cf. Maine Bar Rules 3.4(b), 3.4(k)). This means that the firm cannot continue to represent defendants in pending criminal proceedings.
In light of the answer to this question, it is unnecessary to discuss related questions raised by the inquiry.
Enduring Ethics Opinion
Enduring Ethics Opinion #39 (June 2023)
Opinion #40. Regarding Charges for Title Insurance Amended
Issued by the Professional Ethics Commission
Date Issued: June 2, 1983
Question
The Commission has been requested by an attorney who is active in the real estate field to reconsider Opinion #18. The Commission is advised that that opinion has caused confusion among the members of the bar who issue title insurance policies as to what, if any, fees may be charged for an attorney?s services in issuing the title insurance policy and other related functions having nothing to do with the title work for which the attorney has already been paid by his client. The inquiring attorney also asserts that the Commission was in error in asserting that a ?substantial? portion of the title insurance premium represents the cost of the title work.
Opinion
The Commission has reviewed Opinion #18 and declines to rescind or amend it except in the following respects:
The word ?substantial? is deleted from the last sentence of the statement of the question.
Sub‑paragraph (4) of the conclusion is amended to read as follows:
The lawyer must give his client a full credit for that portion of the title insurance premium which represents compensation for title work for which he has previously billed his client.
The Commission is satisfied that in all other respects the opinion adequately sets forth the Commission?s view that a lawyer who acts as agent for a title insurance company may receive compensation for doing so out of the title insurance premium paid by his client except that he must credit his client with that portion of the premium which represents compensation for title work for which his client has already been billed since he would otherwise be charging twice for the same work.
Enduring Ethics Opinion
Opinion #41. Referring Cases to Attorney with Whom Office Space Is Shared
Issued by the Professional Ethics Commission
Date Issued: August 23, 1983
Question
Attorney A and Attorney B maintain separate law practices although they share office space, telephone and other equipment, and a secretary. In one matter, Attorney B represents a defendant regarding a claim that a client of A wishes to commence. In another, Attorney A represents a client who wishes to bring an action in which A may be called as a witness. A inquires whether he may refer the case to Attorney B.
Opinion
With respect to question #1, at least two issues are presented. A lawyer is enjoined by Bar Rule 3.4(b) not to accept employment if "the exercise of his independent professional judgment on behalf of a client . . . is likely to be adversely affected." For reasons more fully discussed below, the Commission believes that the office‑sharing arrangement creates a certain mutual financial dependence which might compel them to decline employment in cases against the other under certain circumstances.
In addition, both A and B are required by Rule 3.6(1)(2) to exercise reasonable care to prevent (their) . . . employees . . . from improperly disclosing or using confidences or secrets of a client. Where, as here, A and B share the services of a secretary, the Commission believes that the danger that confidences will be revealed are too great to permit them to accept cases against each other. See San Diego City Bar Ass'n op. no. 1972‑8 and cases cited in Maru, Digest of Bar Assn Ethics Opinions, (1970) under office sharers, conflict of interest. The secretary, being an employee of both, would be placed in the impossible position of owing a duty, for example, to reveal to B the fact that his time was running out to file an answer or that he had neglected to subpoena a critical witness which she had learned from As communications with his client. Question #1 must therefore be answered in the negative.
With respect to question #2, somewhat different considerations are involved. Rule 3.4(j) provides that:
A lawyer shall not accept employment in contemplated or pending litigation if he knows . . . that he or a lawyer in his firm is likely or ought to be called as a witness.
Although A and B share space and other overhead expenses, they are not associated in the same firm. Since the rule is specifically so limited, B is not automatically prohibited from accepting a case in which it is likely that he will have to call A as a witness.
On the other hand, the Commission believes that, before accepting the employment, B is required by Rule 3.4(a) to disclose to the prospective client the potential problems which his space‑sharing relationship with A may present when the latter is called as a witness. It has been stated that:
The principal ethical objections to a lawyers testifying for his client as to contested issues are that the clients case will, to that extent, be presented through testimony of an obviously interested witness who is subject to impeachment on that account. . . .
. . . The fact that a witness may be interested, even financially, in the outcome of the case, does not necessarily mean that he will testify falsely or will color or slant his testimony to favor the party with whom his interest rests. But given a choice between two or more witnesses competent to testify as to contested issues, and other factors being equal, a clients cause is best served by having the testimony from the witness not subject to impeachment for interest in the outcome of the trial.
Because a trial advocate clearly possesses such an interest, his testimony or that of a lawyer in his firm is properly subject to inquiry based on such interest, perhaps including elements of his fee arrangement in some instances. Thus, the weight and credibility of testimony needed by the client may be discounted and in some cases the effect will de detrimental to the clients cause. A.B.A. formal op. no. 339 (1975)
Many of the same considerations apply in the case presented. Although A and B retain a certain amount of freedom of action within the framework of their space‑sharing arrangement, their fortunes are nonetheless to some degree mutually intertwined. If B fails to pay his share of the Xerox or office rental or the secretarys salary, A will risk losing these services. Thus, if as a result of As unfavorable testimony, his former client should lose the case, Bs fee may be reduced or the prospects of obtaining future referrals as a litigator diminished. In his capacity as a witness, A would be subject to cross examination regarding his affiliation with B and his vicarious pecuniary interest in the outcome of the litigation. Rule 3.4(a) requires that the client be advised of these disadvantages before the representation is undertaken in order to afford him an opportunity to hire another attorney who is totally independent of A so that the latters credibility will not be compromised.
Enduring Ethics Opinion
Enduring Ethics Opinion #41 [September 2019]
Opinion #42. Prosecution of Criminal Cases by Spouse of Member of Firm Defending the Accused (Revision of Opinion #36)
Issued by the Professional Ethics Commission
Date Issued: August 23, 1983
Question
Do the Maine Bar Rules forbid an Assistant District Attorney from prosecuting a criminal case against a person who is represented by a lawyer whose partner is the spouse of the Assistant District Attorney?
Opinion
The Grievance Commission has been asked to reconsider Opinion #36 adopted January 17, 1983. In that opinion the Commission held that an Assistant District Attorney could not ethically prosecute criminal cases which were defended by lawyers associated with the law firm in which her husband is a partner. In support of the request for reconsideration, the Commission has been advised that its previous opinion has created a hardship on the District Attorney?s office involved because it is located in a sparsely settled area in which able attorneys available for part‑time employment as assistants are in short supply.
Critical to the conclusion reached in its previous opinion was the Commission?s unquestioning acceptance of the frequently cited rule that the public cannot give its consent to a lawyer‑client relationship in which the attorneys ?may be affected by (an) interest of the lawyer.? In the context of the present matter, the inhibition on obtaining consent to the representation operates as an effective bar to the employment because so many of the criminal cases handled in the local District Court are defended by the husband?s law associates. The Commission has concluded that it should reconsider the correctness of its assumption that appropriate government officials as representatives of ?the public? could not consent to a representation involving a possible conflict of interest.
As far as the Commission?s research discloses, the notion that the public is disabled from giving its consent to a particular representation on the part of a government attorney appears to have had its genesis in Opinion #16 (1929) of the A.B.A. Committee on Professional Ethics. That opinion involved the question of whether a part‑time prosecutor could undertake a criminal case being defended by one of his law partners. In the course of holding that the representation would be improper, the Committee stated that:
No question of consent can be involved as the public is concerned and it cannot consent.
No authority was cited for this proposition and the opinion contained no further discussion of the Committee?s apparent rejection of the possibility that someone in a position of authority in the government office involved could consent on behalf of the state.
Opinion #16 was subsequently cited with approval in A.B.A. Opinions #34 (1931), #74 (1932) and #296 (1959). In none of these opinions, however, was the conclusion that the public could not give its consent challenged or discussed. Similarly, in N.Y. State Bar Ass?n Opinion #40, it was held that the public could not consent to the prosection of cases by a district attorney whose law associates were representing criminal defendants in the same courts, relying solely on Opinion #16.[1]
Despite its longstanding and apparently unchallenged acceptance by ethics committees, the concept that the public cannot give its consent to a particular course of conduct seems in individual cases to be generally ignored in the day‑to‑day conduct of the government?s legal business. Prosecutors routinely agree to continuances, waive compliance with formalities, and even plea bargain with accused felons in discharging their responsibilities. It is difficult to perceive any persuasive reason why a district attorney or other government officer exercising supervisory responsibility should be disabled from making similar practical judgments about whether or not an assistant district attorney should participate in a particular case because of a possible conflict of interest with a respondent?s counsel.
It is interesting to note that the A.B.A. itself has provided some precedent for permitting such practical judgments to be made in conflict of interest cases. In Opinion #342 (1977), it was held that a private law firm which had been joined by a former government lawyer could nevertheless undertake cases in which he had been substantially involved if he were screened from contact with the matter ?to the satisfaction of the government agency concerned . . .? Strangely enough, the opinion made no mention of the rule forbidding consent by the public.
A similar result was reached by the Maine Court in 1983 in adopting an amendment to Rule 3.4(k). Subsection (1) of that rule now permits a private law firm to undertake a matter in which a member of the firm had substantial responsibility during former employment with the government if the written consent of ?the appropriate governmental officer or agency is obtained.?
Finding no legal basis for the rule generally disabling responsible government officials from consenting to an employment relationship when it is determined that a potential conflict of interest will not adversely affect the judgment of the government lawyer involved, the Commission concludes that Opinion #36 should be amended to permit the assistant district attorney in question to represent the state in cases defended by her husband?s law firm provided the informed written consent of the District Attorney or the Attorney General is first obtained.
Although Rule 3.4(f) does not appear to limit the scope of the client?s right to consent, Rule 3.4(b) forbidding the acceptance of employment if a lawyer?s independent professional judgment will be, or is likely to be, adversely affected, would appear to permit the assistant district attorney in question to act only in cases in which she would receive no pecuniary benefit from the representation as a result of the participation by her husband?s law firm. This could be accomplished by the segregation of fees in such cases within the firm. For the reasons set forth in our previous opinion and in Opinion #3 (1979), we also assume that it is unlikely that the requirements of Rule 3.4(b) could be met in any case in which the assistant district attorney?s husband were to personally undertake the defense of a case which she was prosecuting.
For the reasons given, it is the Commission?s opinion that an assistant district attorney may undertake criminal cases defended by her husband?s law firm with the informed written consent of the District Attorney or the Attorney General and provided the requirements of Rule 3.4(b) are observed.
Footnote
[1] Equally unhelpful are Arizona Bar Ass?n opinion #82‑15 (1982) and Re A. & B., 44 N.J. 331, 209 A.2d 101 both of which conclude without discussion that the public cannot give its consent to a representation involving a potential conflict of interest. See also Drinker, Legal Ethics 120 (1953).
Enduring Ethics Opinion
Opinion #43. Purchase Price of Real Estate Deposited in Trust Account of Seller's Attorney
Issued by the Professional Ethics Commission
Date Issued: November 22, 1983
The Commission has received a request for an advisory opinion about the ethical propriety of the attorney?s conduct in the following situation.
Facts
Attorney for Seller (Attorney S) at real estate closing asks Attorney for Buyer (Attorney B) to make out the check for the balance of the purchase price payable to ?Attorney S Trust Account.? The contract of sale called for the balance due to be paid by check payable to order of Seller, and provided that no term of the contract could be varied except by agreement in writing signed by both parties. No such written variance was made. Attorney B has in his trust account the amount of the purchase price paid to him by Buyer, and he has no authority to do other than close according to the terms of the contract. Attorney S does not have written authority from his client, Seller, to show Attorney B authorizing Attorney S to have the money paid to Attorney S Trust Account. Attorney S urges Attorney B to comply with request anyway. Attorney S does have a trust account. It has in it only a small amount of the attorney?s personal funds necessary to cover bank charges. Earlier on the day in question Attorney S had deposited a check for $60,000.00 but he has already drawn a check against this deposit for $60,000.00 payable to Client Z who is entitled thereto.
Attorney B draws a check on his trust account for the balance due, $70,000.00, payable to ?Attorney S Trust Account,? receives the deed, and records it. Attorney S sends a check drawn on his trust account to his Seller client for the full $70,000.00, having deposited the check received from Attorney B. The next day Client Z cashes his check for $60,000 at the bank. Right after that the check for $60,000.00 which has been deposited is returned, payment refused. When Seller presents his check to the bank for $70,000.00, he is refused payment because of insufficient funds. We assume that Attorney S used his trust account in this transaction for his own purposes and not for the benefit of his client.
Opinion
On the facts given, the Commission does not believe that an ethical infraction has occurred. The facts presented do not tell us what we critically need to know, which is how the problem was resolved and how quickly Seller received his funds, if he ever did.
Maine Bar Rule 3.6(f)(2) provides:
A lawyer shall:
(i) Promptly notify a client of the receipt of his funds, securities, or other properties;
(ii) Identify and label securities and properties of a client promptly upon receipt and place them in a safe‑deposit box or other place of safekeeping as soon as practicable;
(iii) Maintain complete records of all funds, securities, and other properties of a client coming into possession of the lawyer and render prompt and appropriate accounts to his client regarding them; and
(iv) Promptly pay or deliver to the client, as requested by the client, the funds, securities, or other properties in the possession of the lawyer which the client is entitled to receive. (Emphasis added).
On the facts presented by this inquiry, it was the duty of Attorney S to deliver $70,000.00 to his Seller Client. If the funds were no longer available in his trust account, Attorney S was nevertheless obligated to pay that amount to Seller. Attorney S was required to use his own funds if necessary. It is the Commission?s opinion that a brief delay while this payment was arranged would not amount to a violation of 3.6(f)(2)(iv), but any substantial delay would subject Attorney S to disciplinary action.
Obviously the conduct outlined by this inquiry represents very poor judgment on the part of Attorney S and exemplifies the peril of drawing checks against uncollected funds. Attorney B likewise exercised poor judgment, but in our opinion not an ethical violation, by allowing his fellow attorney to persuade him to make the purchase funds payable otherwise than directly to the Seller. This concession subjects his Buyer client to the risk of litigation over the validity of the conveyance, a risk which could easily have been avoided by more exact compliance with the contract.
Enduring Ethics Opinion
Opinion #44. Representation of Injured Claimant and Subrogated Insurance Company of Same Attorney
Issued by the Professional Ethics Commission
Date Issued: November 22, 1983
A lawyer inquires as to the propriety under the Maine Bar Rules of representing in a personal injury action both insureds and a health insurer which has paid benefits to the insureds and is subrogated to their rights under the insurance conflict.
Opinion
It is the Commission?s opinion that a lawyer may represent both an insured and an insurer subrogated to the insured?s rights, but only after observing appropriate safeguards.
The relevant parts of the Code of Professional Responsibility (?the Code?) of the Maine Bar Rules are found in Rule 3.4, subdivisions (b) and (d). Subdivision (b) provides that:
A lawyer shall not accept employment if the exercise of his independent professional judgment in behalf of a client will be, or is likely to be, adversely affected by the acceptance of such employment, or if it would be likely to involve him in representing differing interests, except to the extent such employment is permitted by subdivision (d) of this rule.
Subdivision (d) of Rule 3.4 provides as follows:
A lawyer may represent multiple clients if it is obvious that he can adequately represent the interests of each and if each consents to the representation after full disclosure of the possible effect of such representation on the exercise of the lawyer?s independent professional judgment on behalf of each.
Because of the nature of the relationship between subrogees and subrogors a lawyer may represent both in certain phases of the litigation when those phases will be unlikely ?to involve him in representing differing interests. . . .?
In the ordinary course of events, when an insurer is subrogated to the rights of its insured, it succeeds to the same rights against the tortfeasor that the insurer would have. See generally 16 Couch on Insurance 2d, § 61:1, 61:4. Indeed, sometimes the concept of subrogation is known as ?substitution.? See 73 Am.Jr.2d Subrogation, § 1. The insurer?s cause of action against the defendant is identical to the injured party?s. While the potential for a conflict of interest must be examined on a case‑by‑case basis, in the usual case the insured and the subrogated insurer have identical interests in providing the tortfeasor?s liability. Thus a lawyer in the usual case may represent both parties in establishing liability.
However, a conflict of interest will often arise during settlement negotiations. The insured and the subrogated insurer are likely to be competing for the larger share of the settlement. Similarly, if the matter goes to trial and the fact‑finder returns a verdict for less than the full amount of damages claimed, the insurer may be entitled to only a pro‑rata of the recovery. See 24‑A M.R.S.A. § 2729‑A (Supp. 1983). In such cases, a single lawyer could not adequately represent both insured and insurer at arm?s‑length in negotiating a division of the money received as damages.
Despite the problems noted above, the lawyer may structure his representation in advance so as to avoid any impermissible conflicts of interest. In fact, it will often be in the best interest of both parties to avoid a separate appearance at trial by counsel for the insurance company. For example, while representing the insured but before agreeing to represent the insurer, the attorney could negotiate an arm?s‑length agreement with the insurer on behalf of the insured. The agreement could specify, for example, how any recovery would be divided, which party would be responsible for conducting the case and deciding on settlements, and which party would have responsibility for other decisions apt to arise during the case. The attorney might then (but not before) be able to represent both parties after appropriate disclosure. Alternatively, the attorney might agree after appropriate disclosures, to represent both parties except as to settlement or division of the settlement proceeds, provided it was first made clear through arm?s‑length negotiations which party would be responsible for which tactical decisions.
Given these or other adequate safeguards, the code would permit an attorney to represent both the insured and the subrogated insurer in the same transaction.
Enduring Ethics Opinion
Opinion #45. Accepting Claims Against City by a Municipal Officer (or his Firm)
Issued by the Professional Ethics Commission
Date Issued: November 22, 1983
Questions
A member of a city council who is also a lawyer has posed a number of questions concerning the propriety of members of his law firm representing clients in proceedings involving agencies or employees of the city. The inquirer indicates that he would refrain from voting on any such matters which were presented to the city council. Additionally, his firm would disclose his position on the city council to any clients who had matters involving the city. The specific questions are as follows:
Council member himself or another member of the firm handles a criminal case in which the city?s police are the arresting or investigating officers. The City Council has no involvement with hiring, firing, disciplining or promotions and all are done through the Civil Service Commission.
A firm member other than the council member appears before the council for licensing purposes, industrial revenue bonds, land leasing or bidding on behalf of a client. The council member abstains from voting on the issue.
A client of the law firm appears before the City Council. The law firm?s only involvement is clerk of the client?s corporation. There is no appearance by a member of the firm and the firm has no involvement with the particular issue. The council member abstains from voting.
A firm member appears before the Planning Board, Civil Service Commission or other city agency. The City Council appoints boards and commissions and there may not be an appeal to the City Council.
A workers? compensation claim by a municipal employee is handled by a firm member. The City Council is not involved. The City has retained an independent administrative agent to handle all compensation matters.
A firm member brings suit against the city. The council member does not participate in executive session or participate in discussion or vote on the issue.
A firm member other than the city council member represents municipal employees in employee grievances under a collective bargaining contract. There is no City Council involvement in the steps to the grievance procedure. The grievance procedure steps are from department head to City Manager and then to independent arbitrator.
A firm member negotiates a collective bargaining agreement on behalf of municipal employees. The council member does not participate in council action on the contract.
A business firm is represented by the council member?s firm on some matters. The client appears before the council without representation or with separate representation. Council member does not participate in voting.
Opinion
It should be noted at the outset that the Commission?s opinion is limited to consideration of the questions posed under the Maine Bar Rules. We note but do not construe the existence of conflict of interest statutes regulating the consideration of matters by municipal bodies in which a member has a pecuniary interest. See 30 M.R.S.A. § 2251.
Question 1
The Commission has recently had occasion to render an advisory opinion concerning the propriety of a county commissioner undertaking criminal cases in which deputy sheriffs in his own country were complaining witnesses or arresting officers. See Opinion #29 (2/4/82). There, analogizing the county commissioner?s public duty to that which is owed to a private client, we held that the county commissioner in such cases would be inhibited in providing the independent judgment required of him in his dual role because of his conflicting loyalties in violation of Rule 3.4(c) prohibiting multiple employment.
Our decision in Opinion #29 is controlling here. There is no meaningful distinction between the case of a city councilman/layer who undertakes the defense of a criminal case prosecuted by a city?s police officers whose salaries are set by the city council and one in which a county commissioner defends a case in which deputy sheriffs are prosecution witnesses.
Similar conclusions have been reached in other jurisdictions on somewhat different rationales. In Los Angeles County Bar Association Op. #273, it was held that:
The lawyer may be tempted to use the influence of his public office to the benefit of private gain and his client?s cause. The police officer, as a material witness, is subject to investigation by the council, and may be tempted to slant his testimony in favor of the council member?s client. Under the circumstances it might seem to the public that the council member has utilized the influence of his public office to further his private practice. See also Drinker, Legal Ethics 119 (1953); Arizona Bar Association Op. No. 75‑8 (1975) (city council member may not represent criminal defendant where complaining witnesses are local police officers); Florida Bar Association Op. No. 71‑12 (1971) (city council members ?may not . . . put themselves in a position where they must contest the evidence of the city police?).
Question 2
The second question concerns the appearance of a member of the inquirer?s law firm before the city council seeking a license or other similar property arrangement with the city for a private client. The lawyer/city council member would recuse himself.[1]
Rule 3.2(d) states that a lawyer who holds a public office shall not:
(2) Use his public position to influence, or attempt to influence, a tribunal to act in favor of himself or of a client.
It has elsewhere been held that the term ?tribunal? should be interpreted broadly to include administrative agencies, boards, and commissions. See e.g. A.B.A. informal op. no. 1182; State ex rel. Nebraska State Bar v. Holscher, 193 Neb. 729, 230 N.W.2d 75, 80 (1975). The Commission accepts this interpretation of the term as it is used in Rule 3.2(d)(2) at least in cases in which the City Council is acting in an adjudicative rather than a legislative capacity.[2]
A more difficult question is presented as to whether the attorney seeking the license would violate the rule if he made no overt attempt to influence the city council by reference to his partner?s public position. In A.B.A. informal op. no 1182 (1971), it was held that the mere appearance of a lawyer‑legislator before an administrative board appointed by the legislature would not violate DR 8‑101(A)(2), the counterpart of Rule 3.2(d)(2), even though it acknowledged that the attorney?s ?very appearance before such a board may be circumstantial evidence of such influence or attempt to influence.?
The Commission acknowledges that it may be difficult in any given case to establish whether or not a lawyer/councilman has exercised a subtle influence over the decisions of public bodies of which the lawyer is a member. It would ordinarily be impossible to prove what conscious or subconscious effect the appearance of the lawyer/city council member or his partner would have upon the objectivity of the city council itself. Even though he did not participate in the council?s deliberations, the lawyer member would be in a position to coach his partner as to how individual members of the council could most effectively be influenced. Council members might be reluctant to openly vote against granting the requested license for fear of losing the lawyer/council member?s vote on some other issue thought to be more important in the long run.
Although the Commission is sympathetic with these concerns, it is not persuaded that the drafters or Rule 3.2(d) intended that the mere appearance of an attorney/council member before the legislative body of the municipality or one of its subordinate agencies would constitute a per se violation of the rule. The wording suggests that evidence of an overt attempt to influence the decision‑maker through the attorney?s public position must be shown in order to establish a violation. It would have been easy enough to outlaw all such appearances by a lawyer who is also a public officer if this had indeed been the drafters? intention. Moreover, the effect of such a construction of the rule would be to discourage lawyers from seeking public office and thus limit public service on the part of a profession which has traditionally provided leadership at all levels of government. The Commission therefore holds that an attorney?s appearance as an advocate before the city council of which he is a member in a matter in which he is attempting to obtain a license or other similar grant of authority would not in and of itself violate the rule.[3]
Question 3
In the third hypothetical question, it is inquired whether there is any impropriety involved if a corporation of which the lawyer‑council member?s firm is clerk appears before the council. The question must be answered in the negative since the Bar Rules are directed only at lawyers. In the question presented, a non‑lawyer is the actor. Since there is no representation, there is no impropriety. It might be prudent for the lawyer/council member to disclose his nominal connection with the applicant and perhaps recuse himself to avoid any public misconception that his vote had been improperly influenced, but he would not be required to do so.
Question 4
The Commission believes that it would not be improper under Rule 3.2 (d)(2) for the law associate of a city council member to present a matter before a board or commission appointed by the city council provided there was no overt effort to influence the outcome of the proceeding by virtue of the lawyer?s public position.[4] The reasons are essentially the same as those given in answer to question no. 2. See, however, New York State Bar Ass?n op. no. 110 (1969) in which it was held that it would be improper for a city council member to represent clients before the Urban Renewal Authority whose members were appointed by the council.
Question 5
This question presents the issue of whether the inquirer?s law firm may bring a worker?s compensation claim against the city?s insurance carrier on behalf of a city employee. No disciplinary rule clearly applies. The city may have a pecuniary interest in defeating the claim because of the adverse effect a recovery would have upon its experience rating. In addition, city officials involved with the case may have developed strong feelings about the outcome. If interests such as these arising from the lawyer?s relationship with or duty of loyalty to the city would make it difficult for him to exercise full ?independent professional judgment? on behalf of the claimant, he would be barred from undertaking the case by virtue of Rule 3.4(b). The prohibition is extended to his law associates by Rule 3.4(k). There would otherwise seem to be nothing to prevent the inquirer?s law firm from pursuing the claim.
Question 6
The Commission is asked whether the inquiring attorney?s law firm may bring suit against the city. Clearly Rule 3.2(d) forbids the lawyer/council member from using his public position in any way to benefit the client. A more difficult question is presented where the lawyer abstains from any discussion of the lawsuit and does nothing which could be construed as an attempt to influence the City?s position in the matter.
In Maine Bar Association op. no. 8 (1971), involving a mayor who wanted to present a zoning case before the local board of appeals, it was held that the representation was improper. The opinion noted that the cases found in other jurisdictions unanimously held that lawyer/city council members could not properly litigate claims against their own cities (citing opinions from Cleveland, Washington, and Wisconsin).
In addition, the Commission notes that the attorney presenting the claim would of necessity be negotiating with employees or agents of the city whose compensation, and perhaps tenure, would of necessity be directly controlled by the city council of which his associate was a member. Opinions from other jurisdictions generally prohibit representation by a public official which places him in an adversarial relationship with public employees whose salaries are subject to his control. See the authorities cited, supra, under question #1. The factual situation is similar to that presented in Opinion #29 in which we held that a County Commissioner could not accept cases in which a sheriff or his deputies were his adversaries.
We also note that, even though not participating actively in the litigation, the lawyer/council member would nevertheless be in a position to provide strategic assistance to his law partner or associate if he were inclined to do so. His inside knowledge of city council affairs would make it possible for him to offer cogent advice regarding such matters as the attitudes which individual council members would be likely to adopt regarding the proceedings, the extent of the city?s insurance coverage, and whether the department head involved was likely to lose his nerve and urge that the case be settled. Even if inside information of this kind were not communicated, the public at large would find it hard to believe that inside influence had not been exercised if the proceedings culminated in a handsome jury verdict or settlement which the city was obliged to pay. The Commission therefore concludes that the representation proposed would violate Rule 3.2(f)(4) prohibiting ?conduct that is prejudicial to the administration of justice.?
Question 7
For reasons essentially similar to those set out above, the Commission concludes that it would not be proper for a law associate of a city council member to represent a member of a municipal employees labor union in a grievance proceeding. At each step of the grievance process, the attorney in question would be in an adversarial relationship with municipal employees whose salaries were set by his law associate in his capacity as city council member. In the case of the city manager, the power of appointment would also be involved. In addition, any municipal appropriation required to fund a negotiated settlement would have to be approved by the city council. For these reasons, the Commission holds that such representation would violate Rule 3.2(f)(4).
Question 8
The Commission believes that Rule 3.2(f)(4) would be violated if a law associate of the city council member negotiated a collective bargaining agreement for municipal employees for the same reasons set forth in answer to question 7. The city negotiators would doubtless be directly accountable to the city council. They should not be placed in the position of fearing that if they did not tread lightly in what may often be an acrimonious process of give and take, they might later suffer in terms of their own employment status at the hands of the council member whose law associate had been their adversary.
Question 9
The Commission holds that no disciplinary rule would be violated if a business firm represented by the council member?s law firm on other matters appears before the city council without representation. The Commission?s reasons are the same as those set forth in answer to question 3.
Footnotes
[1] Because of Rule 3.4(k), the question presented is the same whether the attorney himself or a member of his firm appears before the city council.
[2] We are not in the context of the present opinion called upon to determine whether a city council would be a ?tribunal? when exercising its legislative function as in the case where it is enacting an ordinance.
[3] We recognize that this conclusion is inconsistent with the holding in Opinion #28 that a partner or associate of a lawyer/legislator may not act as legislative lobbyist. We now hold that Rule 3.2(d) would prevent such lobbying activity only where the attorney/legislator?s public position is used by himself or his associate to influence or attempt to influence a legislative body to act favorably to his client?s position. Rule 3.2(d)(1) would also forbid any attempt by the attorney/legislator or his lobbyist associate from seeking to use the former?s public position to obtain a special advantage for himself or a client. We also note that opinion #28 did not address the question (which we need not now decide) of whether the legislature is a tribunal for purposes of Rule 3.2(d)(2).
[4] It is assumed that the lawyer in question has disclosed to his client the fact that his associate is a member of the city council and obtained his prior consent to the representation.
Enduring Ethics Opinion
Opinion #46. Advertising for Personal Injury Cases
Issued by the Professional Ethics Commission
Date Issued: May 10, 1984
Question
Is it permissible under the Maine Bar Rules for a lawyer to publish the following advertisement in a local newspaper:
INJURED? Who?s on your side when the insurance company decides how much to pay you for your injury?
We can work for you and help you get as much money as you should.
You can come in for a free consultation. You may have a good case and not know it.
WE WILL FIGHT FOR YOU
Name of Law Firm Attorneys at Law Address Telephone Number
Opinion
The question presented is answered in the affirmative. Under the Maine Bar Rules it is permissible for a lawyer to publish the advertisement in a local newspaper.
As the Reporter?s Notes to Rule 3.9(a) indicate, Rule 3.9 ?recognizes the right to advertise in general and forbids only those practices that would be regarded as improper in any context.? Consistent with that approach, Rule 3.9(a) prohibits a lawyer from knowingly using any form of public communication containing ?a false, fraudulent, misleading, or deceptive statement or claim.? Rule 3.9(b) defines ?a false, fraudulent, misleading, or deceptive statement or claim? as including, without limitation, a statement or claim that:
Contains a material misrepresentation of fact or law;
Omits to state any material fact necessary to make the statement, in the light of all circumstances, not misleading;
Is intended or is likely to create an unjustified expectation;
States or implies that a lawyer is a specialist other than as permitted by Rule 3.8;
Is intended, or is likely, to convey the impression that the lawyer is in a position to influence improperly any court, tribunal, or other public body or official; or
Contains a representation or implication that is likely to cause an ordinary prudent person to misunderstand or be deceived thereby, or fails to contain reasonable warnings or disclaimers necessary to make the representation or implication not deceptive.
It is the opinion of the Commission that the advertisement at issue does not constitute false advertising under Rule 3.9(a) or (b). Specifically, the advertisement does not contain a material misrepresentation of fact or law or omit to state any material fact (subsections (b)(1) and (2)). Nor can it be said that the advertisement read as a whole is intended or likely to create an unjustified expectation (subsection (b)(3)). In that regard, it is noted that the advertisement states that ?you may have a good case . . .? The advertisement neither states nor implies that the law firm specializes in personal injury matters (subsection (b)(4)). In that regard, it is noted that the advertisement does not represent that the law firm?s practice is limited to personal injury matters, a representation, which if made, might improperly imply specialization. Finally, the advertisement does not convey the impression that the law firm is in a position to wield ?improper influence? (subsection (b)(5)) or contain a representation or implication that is likely to cause a reasonable person to misunderstand or be deceived thereby (subsection (b)(6)).
The Commission is further of the opinion that the advertisement at issue does not constitute ?other improper public communication? under Rule 3.9(c). That provision prohibits a lawyer from using any form of public communication that:
Is intended or is likely to result in a legal action being taken, or a legal position being asserted, merely to harass or maliciously injure another; or
Appeals primarily to fear, greed, desire for revenge, or similar emotion.
The Reporter?s Notes to Rule 3.9(c) state that ?Rule 3.9(c) is intended to prohibit public communications that, although not a violation of Rule 3.9(a), are maliciously motivated or designed to appeal to the baser human emotions.? While the advertisement no doubt is intended to have some emotional impact, the Commission does not believe that the advertisement is violative of the letter or purpose of Rule 3.9(c).
In sum, it is the opinion of the Commission that the advertisement is permissible under the Maine Bar Rules.
Enduring Ethics Opinion
Enduring Ethics Opinion #46 [April 2013]
Opinion #157. Contingent Fee in Post-Divorce Proceeding
Issued by the Professional Ethics Commission
Date Issued: March 5, 1997
Question
The Commission has been asked whether Maine Bar Rule 8, Contingent Fees, prohibits a contingent fee agreement in a post-divorce proceeding to enforce the division of property set forth in the decree.
Discussion
We answer the question in the negative. Maine Bar Rule 8(c) provides that no contingent fee agreement shall be made
. . .(2) in respect of the procuring of a divorce, annulment of marriage, or a legal separation, or (3) in connection with any proceeding where the method of determination of attorneys? fees is otherwise expressly provided by statute or administrative regulations.
In the 1970 edition of Maine Civil Practice, Field, McKusick and Wroth explained the rationale for prohibiting contingent fee agreements ?in respect of the procuring a divorce? as follows.
Almost universally such marital actions are thought not to be a proper subject for contingent fee arrangements on two public policy grounds: (1) Such an agreement would have the tendency to deter or prevent a reconciliation between husband and wife, contrary to public interest in preserving the marriage; and (2) such private agreement would interfere with the statutory responsibility of the court to fix alimony for the wife and support payments for the children in amounts appropriate for the needs and the husband?s means, and to fix the attorney?s fees to be borne by the husband. Field, McKusick & Wroth, *Maine Civil Practice*, 2d. Edition, p.362.
In Opinion No. 10 the Grievance Commission concluded that Rule 8(c) prohibits an agreement for representation in a divorce case in which the fee would be contingent on the amount of the property settlement.
The question presented by the present inquiry is, however, different. The divorce has been granted; the time for reconciliation has long since passed; and the court has discharged its statutory responsibility to fix alimony, support payments for children, and attorney?s fees to be borne by each of the divorcing spouses. No public policy would be impaired by allowing contingent fee agreements in proceedings to enforce the property division decreed in the divorce judgment.
A somewhat similar issue was considered by the Grievance Commission in Opinion No. 11. There the Commission noted that the authors of Maine Civil Practice thought the specific language of Rule 8(c) did not reach post-judgment motions for modification or enforcement of alimony, support or other provisions of a divorce decree. They had concluded, however, that 19 M.R.S.A. Sec. 722, as it then existed, was a ?method of determination of attorney?s fees. . .otherwise expressly provided by statute. . .? Accordingly, they suggested that a contingent fee agreement was likewise prohibited in connection with a post-divorce motion to enforce the alimony or child support provisions of a decree. The Grievance Commission suggested the possibility of a different interpretation of Sec. 722 but declined to express an opinion, finding the question presented to be one of law rather than interpretation of the Maine Bar Rules.
The Ethics Commission now concludes that a post-divorce proceeding to enforce provisions of the decree that divide property is not ?the procuring of a divorce?, for which a contingent fee would be prohibited by exception (2) of MBR 8(c). Nor is it a proceeding ?where the method of determination of attorney?s fees is otherwise expressly provided by statute or administrative regulations?, for which a contingent fee would be prohibited by exception (3) of MBR 8(c). Neither 19 M.R.S.A. Sec. 722, on which the authors of Maine Civil Practice relied, nor the enforcement provisions of 19 M.R.S.A. Ch. 14-A, applies to enforcing a division of property in a divorce decree.[1] Enforcement of such a division of property would presumably be undertaken, at the option of the enforcing party, either under 14 M.R.S.A. Sec. 252, or by relying on the inherent power of the Court, see Elliot v. Elliot, 431 A.2d 55 (Me. 1981), or by commencing a civil action to take possession of property wrongfully withheld. None of these alternatives includes ?a method of determination of attorney?s fees that is expressly provided by statute or administrative regulations.? Accordingly, we conclude that Rule 8(c) does not prohibit the fee agreement in question.
Footnote
[1]The same may be said of comparable enforcement provisions in new Title 19-A, which will become effective October 1, 1997.
Enduring Ethics Opinion
Opinion #156. Representing One Party in Divorce After Being Contacted by Both Parties
Issued by the Professional Ethics Commission
Date Issued: February 5, 1997
Question
Husband and Wife independently contact the law office of Attorney Q to set up appointments to discuss a divorce. In the process of the initial telephone conversation with a staff member each states that he/she does not want the fact he/she is requesting an appointment seeking representation regarding his/her marital situation to be disclosed to the other. The lawyer is briefed on these conversations when she returns to the office. Under what conditions, if any, can she represent either party? It is assumed that neither party gives consent for the lawyer to represent the adversary.
Discussion
While the mere fact that adversaries contact the same lawyer and request representation does not limit the ability of the lawyer to select whom she will represent, the problem raised by the present question centers on the limitations set forth in Rule 3.6(h)(1):
Except as permitted by these rules or as required by law or by order of court, a lawyer shall not, without the informed written consent of the client, knowingly reveal a confidence or secret of the client; use such a confidence or secret to the disadvantage of the client; or use such confidence or secret to the advantage of the lawyer or a third person.
The problem raised by the inquiry cannot be avoided by the fact that the lawyer had not established a formal attorney‑client relationship with either person at the time she received the information. In Opinion 61 this Commission concluded that even if under contract law an attorney‑client relationship had not been established, certain obligations imposed by the Bar Rules toward ?clients? apply. Thus, under the principles set forth in Opinion 61, if the lawyer or her staff has obtained secrets or confidential information through these telephone conversations, she cannot represent either party. This conclusion is not altered by the fact the lawyer?s staff did not solicit the information.
Of course, there remains the question as to whether the information that was disclosed was in fact ?confidential? or ?secret?. Rule 3.6(h)(5) provides some assistance. ?Confidence? includes communications traditionally protected by the attorney‑client privilege, but ?secret? expands the set of protected communications to include ?other information obtained in the professional relationship that the client has requested to be held inviolate or the disclosure of which would be embarrassing or detrimental to the client.?
Thus, a ?secret? is not limited to the content of a communication. Particularly in domestic relations cases, which is the context in which the present inquiry arises, the mere fact that an attempt was made to communicate with an attorney about a divorce may be a secret. Furthermore, to a substantial degree, the client has the right to define what is a secret by merely requesting that the information ?be held inviolate.?[1]
The Commission recognizes that the mere acquisition of a confidence or secret does not require disqualification. Rule 3.6(h) prohibits only the use of the confidence or secret to the advantage of another. However, it is fair to observe that in most instances where there is knowledge of a material confidence or secret, use may be unavoidable.
Thus the Commission concludes that the lawyer may represent either party unless, as a result of the initial communications, she has obtained confidential information or a secret that is material to the representation, disclosed in good faith by an adverse party. In the latter instance we recommend she not represent either party unless she is certain that her knowledge of the confidence or secret would never be disadvantageous to the disclosing party.
Footnote
[1] It ought to be pointed out that in two instances the ?client? will not be deemed to have communicated a confidence or secret, and thus the lawyer would not be disqualified from representing the opposing party. The first would occur if he contacted the law office and, in an effort to disqualify the lawyer from representing the opposing party, revealed information that is ?secret? or ?confidential?. In that instance the ?client? did not disclose a ?secret? in the context of seeking legal assistance. Quite the contrary. Rather than seeking legal assistance advice for himself, he was merely trying to restrict his adversary from doing so. Under these limited circumstances, the ?client? would have no justifiable expectation of protection under this Rule as he was disclosing a ?secret? in a calculated effort to limit the ability of an opponent to obtain counsel of his choice.
The second instance could occur when, before any information is given by the caller, he is clearly warned that any information given in the initial telephone contact will not be considered confidential, and is given at his peril. He then ignores the warning and discloses secret information.
Enduring Ethics Opinion
Enduring Ethics Opinion #156 [August 2011]
Opinion #155. Arguing Different Sides of Same Legal Issue in Unrelated Cases
Issued by the Professional Ethics Commission
Date Issued: January 15, 1997
Question
Bar Counsel has posed the following general question to the Commission.
The lawyer represents one client who is a party in Lawsuit A, and a second client who is a party in Lawsuit B. The two lawsuits are unrelated except that they present the same legal issue. The clients interests are conflicting in the sense that they desire opposite resolutions of the same issue. The lawyer proposes to represent both clients, thereby causing the lawyer simultaneously to advocate opposing positions on the common legal issue.
Bar Counsel inquires into whether and under what circumstances the representation could create a conflict of interest under the Bar Rules.
Answer
The broad question framed by Bar Counsel poses what is sometimes referred to as an ?issue? or ?positional? conflict.
Bar Rule 3.4(b)(l) defines a conflict of interest.
Representation would involve a conflict of interest if there is a substantial risk that the lawyer?s representation of one client would be materially and adversely affected by the lawyer?s duties to another current client, to a former, or to a third person, or by the lawyer?s own interest.
Thus, the question is whether the proposed representation would violate this rule.
Research reveals surprisingly little analysis of this issue either in treatises, commentaries or case law. See I Hazard & Wodes, The Law of Lawyering, §1.07:04 (2d ed. 1990) and Wolfram, Modern Legal Ethics, §7.3.3 (1986). The decisions in Estates Theatres Inc. v. Columbia Pictures Industries, Inc. 345 F.Supp. 93 (S.D.N.Y. 1972) and Fiandaca v. Cunningham.827 F.2d 825 (1st Cir 1987) are sometimes cited by the commentators as examples of ?issue conflict? decisions. But neither case involved facts such as those presented by Bar Counsel which posit a pure legal conflict in different litigated matters. In Estates Theatres a lawyer?s competent representation of one client could have required him to call another of his clients as a witness, possibly eliciting testimony from that second client contrary to the second client?s interest.[1] In Fiandaca a legal services organization proposed to represent clients in a lawsuit seeking to close a state institution, while simultaneously representing another group of clients in a separate lawsuit that sought to keep open that same institution. Both cases appear to rest on traditional conflict analysis resulting from the clients? directly opposing interest in the outcome of a representation. In both cases the lawyers? clients were either involved in the same litigation (either as a party or as a potential witness with a conflicting interest, as in Estates Theatres), or were advancing conflicting positions regarding the outcome of the same event (whether the institution should be closed, as in Fiandaca). The question posed here involves neither such circumstance.
Our research reveals only a single opinion on the broad issue posed by Bar Counsel. In ABA Formal Opinion 93‑377, the ABA Ethics Committee, applying the ABA Model Rules, held that;
if the two matters are being litigated in the same jurisdiction, and there is a substantial risk that the law firm?s representation of one client will create a legal precedent, even if not binding, which is likely materially to undercut the legal position being urged on behalf of the other client, the lawyer should either refuse to accept the second representation or (if otherwise permissible) withdraw from the first, unless both clients consent after full disclosure of the potential ramifications of the lawyer continuing to handle both matters.
The ABA Opinion goes on to require that even if the cases are not being litigated in the same jurisdiction,
the lawyer should nevertheless attempt to determine fairly and objectively whether the effectiveness of her representation of either client will be materially limited by the lawyer?s (or her firm?s) representation of the other.
The opinion enumerates four factors to be considered by the lawyer in determining the existence of a substantial risk of adverse effect.
(1) whether ?the issue is of such importance that its determination is likely to affect the outcome of at least one of the cases,?
(2) whether the determination of the issue in one case is ?likely to have a significant impact on the determination of that issue in the other case,?
(3) whether there would be any inclination by the law firm to ?soft pedal or deemphasize certain arguments or issues?which would otherwise be vigorously pursued?so as to avoid impacting the other case,? and
(4) whether there would be inclination within the firm to ?alter any arguments for one or both of the clients, so that the firm?s position could be reconciled?and, if so, could that redound to the detriment of one of the clients.?
The ABA opinion implies, without discussion or express statement, that the principle of vicarious disqualification also applies to such conflicts.
After careful consideration we decline to join the ABA?s view. First, the ABA opinion is based, in part, on the ABA Model Rules and the commentary accompanying those Rules.
The Comment to Model Rule 1.7 states:
A lawyer may represent parties having antagonistic positions on a legal question that has arisen in different cases, unless representation of either client would be adversely affected. Thus, it is ordinarily not improper to assert such position in cases pending in different trial courts, but it may be improper to, do so in cases pending at the same time in an appellate court.
This comment appears to confirm that the conflict of interest provisions of the Model Rule contemplate their application to issue conflicts. No similar commentary is found in the Maine Bar Rules.
Second, the Reporter?s Notes to the 1993 revision to Bar Rule 3.4(b) specifically states:
It was not intended that the interests of two or more clients would be deemed conflicting *solely* because, in otherwise unrelated proceedings, a lawyer might be required to advance contradictory legal positions on their behalf.
(emphasis supplied). In other words, an ?issue conflict,? without more, is not a conflict of interest.
Third, adoption of the ABA position would necessarily imply that law firms must use the conflict screening procedures for ?issue conflicts? that are generally used for customary direct conflicts. Development of such an issue conflict warning system is, however, a far more formidable task, even for a firm of moderate size, than determining whether the firm is involved with clients who are at odds in the same or related matters or determining whether a prospective opponent is also a client in an unrelated matter. We decline to interpret Rule 3.4(b)(1) in such a way as to require the Bar to adopt screening procedures for issue conflicts which experience tells us are, in any event, extremely rare.
Although we conclude that an ?issue conflict? standing alone is not a conflict within the meaning of Bar Rule 3.4(b), we note that counsel has an obligation to both clients under Rule 3.6(a)(1) to employ ?reasonable care and skill? and to ?employ the lawyer?s best judgment? in the representation of her clients. In light of this rule, an attorney must be mindful of the possibility that contemporaneously arguing opposite sides of the same issue before the same judge or panel of judges could impair her effectiveness on behalf of both clients, thereby arguably violating Rule 3.6(a)(1). It is not possible to define all the circumstances in which this rule might be implicated, since it will depend on the particular facts and circumstances.
Dissent
One member of the Commission dissents and would substitute a slightly modified version of the principle established in ABA Formal Op. 93‑377 for that expressed in the majority opinion. The ABA opinion would bar undertaking a matter if there were a substantial risk that it would establish a legal precedent which was likely to materially undercut the legal position being urged by that law firm on behalf of another client. Conversely, the majority would permit a law firm to advocate conflicting positions on the same issue even though it would, under some circumstances, materially and adversely affect the firm?s duty to one client in violation of Bar Rule 3.4(b)(1) by establishing a disadvantageous precedent in the case of client #2.
If an associate of the firm who was involved in a case in the U. S. District Court for the Southern Division of Maine in which he represented an employee were to discover that a senior partner in the same firm was representing an employer in a case to be tried in front of another judge in the Northern Division in which he was asserting no liability under similar circumstances, it seems likely that he would be subject to real or imagined pressure to defer to the interests of the better‑financed employer client of the senior partner rather than establish a potentially damaging precedent.
Similarly, if an attorney were arguing before the First Circuit Court of Appeals an issue in which there was no controlling precedent while at the same time, another lawyer in his firm were arguing in the U. S. District Court in Maine the opposite side of the same issue, could it be seriously argued that the interests or the second client would not be ?materially or adversely? affected if the First Circuit were to rule in favor of the first client? This result would, nevertheless, be permitted by the majority opinion.
The view taken by the majority conflicts with that adopted by the American Law Institute in its proposed final draft of the Restatement of the Law Governing Lawyers (3/29/96). Comment f to proposed §209 regulating conflicts states that:
... (A) conflict is presented when there is a substantial risk that a lawyer?s action in Case A will materially and adversely affect another of the lawyer?s clients in Case B.[2]
The majority cites no authority in support of its view that an exception to the usual conflict rule exists in the case of positional conflicts.
The majority has overstated the significance of a comment in the Reporter?s Notes to Bar Rule 3.4(b) that a conflict of interest would not be deemed to exist solely because an attorney intended to argue contradictory positions in unrelated proceedings. As stated, the quoted language is unobjectionable. It is only when the representation of one client would ?materially and adversely affect? the attorney?s duty to another client that a conflict of interest arises. The Reporter?s use of the term ?solely? suggests that he would not disagree with this conclusion.
The real basis for the majority?s restrictive application of Rule 3.4(b)(1) in cases involving positional conflicts is that the task of searching for the existence of such conflicts within a law firm, particularly a large one, would be overwhelming. However, if an attorney were deemed to be guilty of a conflict of interest only when he or she knowingly[3] advocated a position on an issue on which another member of the firm had been engaged to argue the opposing point of view, it would be unnecessary to search the office for potential positional conflicts. At the same time, the Bar and the public would not be exposed to the spectacle of an attorney litigating an issue knowing that, if he or she were successful, the outcome would materially and adversely affect the resolution of a pending matter involving another client of the same law firm.
Footnotes
[1] Estates Theatres also involved interpretation of DR 5-105 of the ABA Model Code of Professional Responsibility, which Code differs significantly from the Maine Bar Rules.
[2] The factors which should be considered in determining whether there is a risk of such an effect are set forth in the rule.
[3] ?Knowingly? is used here to mean possessing information without having conducted a conflict search which indicates that the other side of the same issue is being advocated on behalf of another client of the same law firm. Obviously, one who does not know that another attorney in the same law firm will be arguing the opposite side of a critical legal issue cannot be accused of ?pulling punches? if his legal position is ultimately unsuccessful.
Enduring Ethics Opinion
Enduring Ethics Opinion #155 [June 2011]
Opinion #154. Representing Child Where Parents May Have Adverse Interest
Issued by the Professional Ethics Commission
Date Issued: November 12, 1996
The Commission has been asked a series of questions arising out of instances wherein a lawyer is asked by the parents to represent an injured minor and in some such instances the parents have an independent claim.
Questions
(1) A lawyer has a contingent fee agreement with the parents of a seventeen year old minor involved in an automobile accident. After the minor turns eighteen, the minor asks to settle the case over the parents' objections and further asks that his parents not be informed of the settlement. The minor is also opposed to reimbursement to the parents for medical bills incurred on his behalf. May the lawyer comply with the wishes of the minor?
(2) Assume that the father of the minor child was the significantly negligent driver (the driver of the other vehicle also being negligent) of the vehicle in which the minor as a passenger was seriously injured. Assume further that the father has no claim, is underinsured, has personal assets, and any suit against him involving this accident would put personal assets at risk. Assume that the lawyer ascertained the above facts during an initial interview. In the foregoing circumstances, can the lawyer accept representation on behalf of the minor child with either parent acting as next friend, or is a guardian ad litem required?
(3) Assume that a lawyer, pursuant to a contingent fee agreement, is representing the minor through the father as next friend. Assume that the child has incurred medical bills in the amount of $5,000. Prior to settlement or judgment, may the lawyer, at fathers request, ask the insurance company to disburse the $5,000 med pay coverage to the father for purposes other than payment of the medical bills?
(4) Assume a parent instructs the lawyer to settle the case for a figure significantly less than the lawyers evaluation of its worth, may the lawyer settle the case as instructed?
(5) Assume the lawyer has negotiated a settlement of the lawsuit and is preparing the paperwork necessary to obtain court approval. Assume the parents of the minor ask the lawyer to seek reimbursement to them from the settlement proceeds for items which may not be appropriate. May the lawyer present the parents requests to the Court in the paperwork which is filed? May the lawyer advocate the parents requests in oral argument to the court? Must the lawyer withdraw from the case?
Discussion
At the outset we direct our discussion to the applicability of Rule 3.4(c) (2) which provides in pertinent part:
...if a conflict of interest exists, a lawyer may not undertake or continue simultaneous representation of more than one client except with the informed consent of each affected client to representation of the others... Simultaneous representation in the same matter or substantially related matters is undertaken subject to the following additional conditions:
(i) The lawyer must reasonably believe (A) that each client will be able to make adequately informed decisions, and (B) that a disinterested lawyer would conclude that the risk of inadequate representation is not substantial, considering any special circumstances affecting the lawyers ability to provide adequate representation of each client, such as the fact that the clients may seek incompatible results or pursue mutually disadvantageous tactics, or that their adverse interests may outweigh their common interests.
and the potential applicability of Rule 3.4(c)(3) which provides in relevant part:
A lawyer who represents two or more clients shall not make or participate in the making of an aggregate settlement of the claims of ... those clients ... unless each client has consented after being advised of the existence and nature of all the claims ... and of the share of each person and the total amount of the settlement of a civil matter ...
We also refer the lawyer to the definition and considerations laid out in Rule 3.4(b)(l) concerning conflict of interest and section (b) (2) regarding informed consent.
In some situations, the lawyers only client is the child, and the parents role is to speak for and act on behalf of the minor child. The lawyer thus looks to the parent as the authorized representative of his client until the lawyer reasonably concludes that the representative is not in fact motivated by the interests of the client. The more difficult issue arises when the parent might reasonably be a party-as a claimant or defendant in the same matter.
In light of the rules, it is apparent that the lawyer must make a decision at the commencement of the matter as to whether a conflict exists and if so, the lawyer must then determine (1) whether there is a substantial risk of inadequate representation and, if not, (2) whether he has the informed consent of both clients. We think it more than likely that an inherent conflict will be found to exist in these types of cases where both parent and child have claims, however, we leave that determination to the lawyer to resolve on a case by case basis in light of the applicable facts.
If the lawyer ascertains that a conflict exists, he must then obtain the consent of both clients. In these instances, the consent issue becomes a difficult one because even though the parent may consent on his own behalf, the minor is incapable of consenting independently of his parent absent a guardian. Accordingly, the lawyer must assess whether either parent may consent on behalf of the minor child.
With the above rules in mind, we adopt the presumption that we believe is most likely to best serve minors, parents and society as a whole. A lawyer is entitled to presume that the minors parent is acting in the best interest of the minor even though the parent may have a claim of his own either directly or indirectly This presumption may be relied upon by the lawyer until such time as the lawyer has a reasonable basis to believe that the parent is no longer putting the interests of the child first. This presumption is fundamental to the legal relationship between parents and children in our society. Failure to acknowledge this presumption would impose unacceptable costs on the resolution of disputes including the expense of obtaining and paying a guardian ad litem to act on behalf of the minor throughout the case, a step that will usually disrupt family relationships and should not be required unless necessary to serve the interest of the child.
While we adopt the presumption noted above, we are mindful of potential situations that might arise in which it would not be appropriate for the lawyer to engage in representation of both parties. We suggest and strongly encourage the lawyer to examine the circumstances of each case by assessing at a minimum at the outset the applicable facts and information such as the nature of the relationship between the parent and child, the value of each clients respective claims, the age of the child, the amount of any available insurance proceeds, the seriousness of the childs injuries, the type of reimbursement the parent is seeking, the involvement, if any, of either parent in causing the childs injuries, liability, and the respective positions of the parties. We recognize that these will be difficult issues to assess in many of these cases and perhaps will need to be reassessed frequently throughout the course of the representation if representation is commenced.[1]
In the event the lawyer concludes that he cannot accept consent of the parent on behalf of the minor child, it would seem necessary to seek appointment of a guardian ad litem for the minor child pursuant to Rule 17A of the Maine Rules of Civil Procedure.
We also caution lawyers in these situations to consider carefully the implications of the recent Law Court decision in LaBier v. Pelletier, 665 A.2d 1013 (Me. 1995) wherein the Law Court rejected the doctrine of imputed parental negligence. In so doing, the Law Court made it possible for an injured child to recover despite the negligence of his parent. LaBier v. Pelletier, supra at 1015. Further consideration should be given to the earlier Law Court decision in Black v. Solmitz, 409 A.2d 634 (Me. 1979) in which the Law Court held that children may sue their parents. Black v. Solmitz, supra at 635.
Question 1
Addressing the issue of whether the lawyer may comply with the wishes of the minor, it is clear that once the minor attains the age of eighteen he is able to direct the course of his own litigation including settlement. Nonetheless, on the facts presented, it is inferred that the parents have an independent claim for reimbursement of medical bills incurred on behalf of the minor child. The minors request to settle the case without notice or reimbursement to the parents on their claim creates a conflict between the two clients and the lawyer must withdraw from joint representation. Continued representation of either client, without the consent of the other, would violate Rule 3.4(b)(l) and (c)(2)(iii).
Question 2
Turning next to the issues presented in the second question, consistent with the presumption we have adopted, the lawyer may presume a guardian ad litem is not necessary. We note however that as the combination of parental liability and financial exposure grow, the circumstances outlined pose a high probability of inconsistent interests so as to weaken the presumption such that representation can only be sustained if there are significant other factors which support it. Accordingly, the lawyer must assess the case, determine whether either parent will act with the best interest of the minor paramount, and then only proceed upon a clear understanding with the clients as to the course of the representation.[2] In this situation, the parent needs to be clearly informed of the potential for suit against him and what will happen to the representation should that circumstance arise.
Question 3
Initially we restate the principle stated above that the lawyer may rely on the presumption that the parent, as next friend of the child, is acting in the best interests of the child, unless the lawyer has a reasonable basis to believe otherwise. If the ultimate recovery to the minor child would be affected or in any way compromised by the parents instructions, we conclude that it would be improper for the lawyer to seek a prepayment from the insurance company in light of his knowledge of its intended use by the father. If so, and if the parent persists, then as a result of the fathers request, the lawyer now has to reconsider his earlier decision that he could adequately represent both clients. The lawyer must consider whether he continues to have a reasonable basis to believe that the parent is putting the best interests of the minor first and whether the presumption set forth above continues to apply. If the lawyer so concludes, then the lawyer must withdraw.
Question 4
We assume in responding to this question that the parent does not have an independent claim and that the lawyer is representing one clientthe minor child. With that assumption in mind, we believe the lawyer has an obligation to fully and completely inform the parent of his evaluation of the case, including at a minimum such things as the reasons underlying his evaluation, his thoughts with regard to further discovery, the potential for success of further settlement negotiations, the chances of obtaining a judgment if the matter is tried and the ability to recover any judgment. If after such disclosure the parent still wishes to settle the case, the lawyer should consider whether he still has a reasonable basis to accept the parents consent on behalf of the minor. If the lawyer believes the parent is putting the interests of the minor first, then the lawyer should settle the case, while at the same time indicating to the parent that should inquiry be made he will advise the court that the amount of the settlement may not reflect the defendants probable liability. The lawyer should also advise the parent that he should not waive his right to attend the Rule 17A hearing on the application for approval but rather should appear to present his views on the settlement to the judge.
Question 5
If the ultimate recovery to the minor child would be affected or in any way compromised by complying with the request of the parents, we conclude that it would be improper for the lawyer to present the request to the court in writing or in oral argument. If the minors recovery would be affected or compromised and the parent continues to insist on his request, then, as in our response to question three, the lawyer must then reconsider his earlier decision that he could adequately represent both clients. After going through the analysis suggested in our response to question three, the lawyer may well conclude that he must withdraw from representation.
Footnotes
[1] We think the prudent course of action in each of these cases where the lawyer undertakes representation is that an engagement letter outlining the representation and any limitations on the representation be sent to the parent at the outset of the case. Such a letter should note that the lawyer enters into the representation based upon the presumption that the parent is acting in the best interest of the minor child.
[2] See rule 17-A, Maine Rules of Civil Procedure.
Enduring Ethics Opinion
Enduring Ethics Opinion #154 (August 9 2021)
Opinion #153. Contingent Fee Agreement Providing Client Will Not Be Responsible for Any Disbursements
Issued by the Professional Ethics Commission
Date Issued: September 9, 1996
Question
In entering into a contingent fee agreement with a client, a lawyer wishes to provide that, regardless of outcome, the client will not be responsible for any of the disbursements. The lawyer asks whether this arrangement would violate the Maine Bar Rules.
Opinion
In the view of the Professional Ethics Commission, the arrangement would not violate the Bar Rules.
The rule applicable to this situation is Bar Rule 3.7(d) which provides:
Financial assistance
. While representing a client in connection with contemplated or pending litigation, a lawyer shall not advance or guarantee financial assistance to the client, except that a lawyer may advance or guarantee the expenses of litigation, including court costs, expense of investigation, expenses of medical examination, and expenses of obtaining and presenting evidence.
The thrust of this provision is plain: in representing a client, a lawyer may not provide financial assistance such as living expenses to the client, but the lawyer may both advance and guarantee litigation expenses. Thus, under the plain language of the rule, a lawyer entering into a contingent fee agreement, or any other agreement with a client, may agree to bear the cost of his or her disbursements, so long as they constitute ?the expenses of litigation.?
This conclusion is supported by the history of the adoption of Rule 3.7(d). As the reporter?s notes make clear, the rule was based on Disciplinary Rule 5‑l03(b) of the American Bar Association Model Code of Professional Responsibility, which is identical to Rule 3.7(d) except that the disciplinary rule contained a proviso at the end specifying that the advance or guarantee of litigation expenses may only occur if ?the client remains ultimately liable for such expenses.? This proviso was omitted from Bar Rule 3.7(d) by its drafters, the Select Commission on Professional Responsibility. The reporter?s notes indicate the reason why the proviso was eliminated:
The Commission believes the provison was unrealistic and unenforced and that it might often prove inimical to clients? interests. The rule was inconsistent with the modern assessment of the need to broaden access to courts.
It is thus clear that the drafters of Rule 3.7(d) intended that lawyers be able to advance litigation expenses to clients without restriction.[1]
The provisions of Bar Rule 8, relating to contingent fee agreements, are not to the contrary. Rule 8(e)(6) provides that the required written contingent fee agreement include ?a statement regarding the attorney?s anticipated expenses and disbursements, if any, for which the client is to be liable? (emphasis added). Thus, the rule does not prohibit a lawyer from agreeing to absorb the client?s litigation expenses.[2]
Footnotes
[1]This approach was later followed by the American Bar Association in the adoption of its Model Rules of Professional Conduct, which replaced the Model Code. Model Rule 1.8(e) provides:
A lawyer shall not provide financial assistance to a client in connection with pending or contemplated litigation, except that:
(1) A lawyer may advance court costs and expenses of litigation, the repayment of which may be contingent upon the outcome of the matter; and
(2) A lawyer representing an indigent client may pay court costs and expenses of litigation on behalf of the client.
[2] The requirement of Rule 8(e) that the agreement indicate if the client is to be liable for litigation expenses might be thought to be inconsistent with the final sentence of Rule 8(a) which provides that, in order to count as a ?contingent fee agreement,? an agreement ?shall not include an arrangement with a client, express or implied, that the client in any event is to pay the attorney the reasonable value of the attorney?s services and reasonable expenses and disbursements.? The Commission thinks, however, that the reference to ?reasonable expenses and disbursements? in Rule 8(a) is meant to apply only in circumstances where there is an agreement in which the client agrees to pay the lawyer?s fees. When the client does not undertake to pay such fees (and expenses and disbursements), the agreement becomes ?contingent? within the meaning of Rule 8, and the requirement of Rule 8(e)(6) that it state whether the client is to be liable for litigation expenses applies.
Enduring Ethics Opinion
Enduring Ethics Opinion #153 [February 2014]
Opinion #152. Law Firm Granting Bank Security Interest in Accounts Receivable
Issued by the Professional Ethics Commission
Date Issued: October 6, 1995
Facts
Firm X has been asked, in conjunction with the establishment of a credit arrangement with a Bank (presumably for operating capital), to grant a security interest in Firm X?s accounts receivable. As described to the Commission, the proposed security agreement, which would extend by its terms to ?all records and data relating to the [accounts],? authorizes the Bank to require the filing by Firm X of lists of receivables, ?including names and addresses of account debtors,? and provides that the Bank ?[a]t any time and even though no Event of Default exists? may ?exercise its rights to collect the account and to notify account debtors to make payments directly to [Bank]?: it further authorizes the Bank to sue for ?...or realize on [ receivables], and to receive, open and dispose of mail? addressed to [Firm X].
Question
Does the arrangement proposed by Bank require Firm X to violate the requirements of the Bar Rules?
Discussion
This inquiry raises a number of issues relating to the proposed conduct including the obligation of the attorney to preserve the confidences and secrets of the client as required by Rule 3.6(h) the mandatory fee arbitration required of lawyers under Rule 3.3(c), and the related issue of the ability of the lawyer to comply with the requirements of Rule 3.3(a), regarding excessive fees.
In Opinion 138, this Commission expressed its concerns with respect to several of these issues in the context of a charge‑card device. In that context, these questions were reviewed in the light of a voluntary arrangement entered into by the client for the purpose of financing the client?s obligations to the lawyer or law firm. Here, by contrast, the financing arrangement is invisible to the client, and it is in this somewhat different light that the inquiry is to be evaluated. Other states have addressed related issues and have found the transactions to be authorized, but have not in all cases focused upon the specific mandates and prohibitions of the Codes they were interpreting.[1]
A. Confidential Information
Although the act of entering into a contract with a Bank will not itself violate the Bar Rules, a lawyer entering into any such contract should insure himself or herself that the performance of the obligations of the contract will not violate the Bar Rules.
While an attorney?s grant of a security interest in his or her accounts receivable clearly does not, in and of itself violate the Code of Professional Responsibility, it is just as clear that it is not proper for a lawyer (i) to permit a financing Bank to receive, open and dispose of mail which might include mail from clients; (ii) to disclose all records and data of the client; or (iii) in some cases, where the mere fact of the rendition of legal services to a client may constitute a secret, to disclose names and addresses of clients prior to the time a client defaults upon a payment obligation to the lawyer.
Beyond these obvious limitations, however, the granting of rights under the security agreement and the exercise of rights of a Secured Party under the Uniform Commercial Code, might pose further and unforeseeable questions under the Code of Professional Responsibility. Any security agreement must protect against the disclosure of confidential information or clients? secrets, and must not purport to abridge the procedural or substantive rights of a client with respect to excessive fees.
The preservation of both confidences and secrets of a client, required by Rule 3.6(h), is the sine qua non of the lawyer‑client relationship. While the Rule admits of several exceptions,[2] it provides no general exception authorizing the disclosure of addresses or other information concerning the attorney‑client relationship that may give rise to an account receivable, nor any exception for disclosure to the lawyer?s lending institution.[3] While the whereabouts or the addresses of a client may not rise to the level of a confidential communication, they may, under appropriate circumstances, constitute secrets of the client which are prohibited from disclosure by Rule 3.6(h). In some circumstances, particularly where an attorney?s reputation as a specialist in a field of practice such as bankruptcy or divorce is widespread, the very fact that a client consulted a particular lawyer may constitute a statement about a client and his or her private affairs. Under such circumstances, the mere disclosure of the identity of a client would violate the rule.
Although an attorney could conceivably, at the inception of the lawyer‑client relationship, obtain a written waiver from the client regarding such disclosures as the Bank may require, absent such authorization, the law firm is likely to find it difficult to transmit client receivables information to its financing bank in a manner consistent with the requirements of the Bar Rules. Also, it may, as a practical matter, be difficult to administer a blanket assignment of receivables so as to distinguish between records pertaining to clients who had elected to waive objections to such disclosures and those who had not.
Although the establishment of a debtor/creditor relationship between the lawyer and client presumably assumes the enforceability of the fee agreement including the right of the lawyer to bring suit upon non‑payment of the agreed upon fee, the right given to the Bank in the proposed security agreement to obtain the list of account debtors prior to default by the client, and the right to notify account clients to make payment directly to the Bank, may exceed the legitimate expectations of both the client and lawyer as to the timing of collection efforts and attendant publicity as to the client identity and the existence and terms of a lawyer‑client relationship.
Any lawyer or firm entering into this kind of financial relationship must give consideration to the timing of the rights of the Bank with respect to the exercise of its rights to realize upon the accounts receivable, and consideration must also be given to identifying certain individual accounts or classes of accounts that may be so ?sensitive? that they ought not to be pledged at all.
B. Fee Arbitration
Rule 3.3(c) requires that all lawyers must submit fee disputes to arbitration in accordance with the provisions of Rule 9. While the proposed relationship between the Firm X and its Bank does not of itself preclude the Firm?s compliance with the obligations of Rule 3.3(c), there are nonetheless provisions in Rule 9 which make clear that the Bank could not participate in this dispute resolution process on behalf of the Lawyer. For example, the provisions of Rule 9(j) impose a continuing obligation of confidentiality upon the parties to the dispute and prohibit any person from disseminating information regarding the matter in dispute to any person not involved in the dispute. Clearly, the Bank could not participate in this kind of proceeding in any capacity.
It hardly needs to be said that the lawyer and the Bank cannot by contract dispossess a client of his or her rights under the Bar Rules. It may nonetheless be sufficient to provide in the security agreement for a re‑assignment to the law firm of any account receivable in which the client initiates fee grievance arbitration. Under such circumstances, the rights of the client to invoke arbitration under Rule 9 as well as the preservation of the confidentiality of the fee grievance process would be preserved. as would the principal procedural mechanism for protecting clients against the imposition of excessive fees [ Rule 3.3(a)].
Conclusion
While the Bar Rules do not per se prohibit the use of receivables as collateral by a law firm, a lawyer or firm granting a security interest in receivables must take appropriate steps to preserve secrets and confidences of each client and to assure each client?s right to demand and participate in fee arbitration. Certain economic acts?even those as seemingly non-controversial as retirement[4]?when undertaken by a lawyer, impose obligations not present with respect to non‑lawyer participants in our economic life. The recognition of the changed economic environment in which lawyers and law firms now operate does not in any way relieve members of the Bar of the obligations owed to their clients under the Bar Rules and under their oaths as attorneys. The obligations discussed above are emblematic of the professional obligations which distinguish the practice of law from other varieties of commercial enterprises and which have justified characterizing the practice of law.
Footnotes
[1] See, for example, Fla. Ops. 61 (Opinion 72-43, February 23, 1973) and 59 Ill. B.J. 766 (Opinion 347, February 12, 1971), excerpted in Maru, 1975 Supplement to Digest of Bar Association Ethics Opinions, as Items 8183 and 8290, respectively.
[2] e.g., Rule 3.4(h)(1)(3),(4), Opinion No. 20
[3] Rule 3.6(h)(2) does contemplate that a lawyer may need to enlist the support of others from time to time and requires that the lawyer use reasonable care to assure that others so employed will preserve the confidences of the client. Although the drafters of the Rule probably did not foresee that such an obligation would need to be extended to such relationships as are discussed here, the same policies inherent in this Rule should inform all activities of a lawyer notwithstanding the context in which confidential information is necessarily shared with others.
[4] See, for instance, Opinion No. 143.
Enduring Ethics Opinion
Opinion #151. Fee Arbitration Clause in Lawyer-Client Contract
Issued by the Professional Ethics Commission
Date Issued: May 12, 1995
Questions
Pursuant to Maine Bar Rule 11 (c)(2), we address the following ethical questions involving the Code of Professional Responsibility (Rule 3):
Question No. 1
Does Maine Bar Rule 3 prohibit a lawyer from entering into an agreement with the lawyer?s client that compels both the lawyer and the client, upon request of either one, to submit any future fee dispute arising out of the representation to binding arbitration conducted other than in accordance with Maine Bar Rule 9, thereby precluding the client from unilaterally requiring that arbitration of a fee dispute be conducted in accordance with Rule 9?
Question No. 2
Does Maine Bar Rule 3 prohibit a lawyer from entering into an agreement with the lawyer?s client that compels the client to submit to binding arbitration any future fee dispute arising out of the representation, but gives the client the option of having the arbitration proceed either in accordance with Rule 9 or with another standard arbitration procedure specified in the agreement?
Opinion
No. 1
The plain language of Maine Bar Rule 3.3(c) mandates that a lawyer ?shall submit upon the request of the client the resolution of any fee dispute in accordance with Rule 9.? (emphasis added ). If a client signed an agreement such as that posed by Question No.1, and thereafter requested submission of a fee dispute in accordance with Rule 9, the lawyer would have to proceed under Rule 9, the agreement notwithstanding.[1]
In reaching this conclusion, we recognize that, prior to submitting a fee dispute to Rule 9 arbitration, the lawyer and client might agree to settle a dispute on the merits. Rule 9 by its terms encourages such a result. See Maine Bar Rule 9(e)(1 )(C) (requiring the client to certify that he or she has made a good faith effort to settle the dispute prior to filing the petition)[2] One might therefore argue that if a lawyer and a client can agree to a complete, substantive resolution of a fee dispute, the rules should be construed to allow them to make the arguably lesser agreement concerning the procedures for resolving their dispute.
While this argument is of some force, we reject it for two reasons:
First, there is a fundamental difference between an agreement made prior to a dispute and an agreement made after the client is aware of the nature of the dispute and what is at issue.
Second, even when a lawyer and a client have settled a fee dispute, if the client thereafter contests the fee and files a petition, Rule 3(c) on its face would still require the lawyer to submit to Rule 9 procedures. This is not to say that the settlement would not be enforceable or potentially dispositive in the Rule 9 proceeding, or that the matter would even survive preliminary review under Maine Bar Rule 9(e)(3). The point, instead, is that if a lawyer and a client initially agree to resolve a fee dispute, and thereafter nevertheless continue to dispute the fee, then Bar Rule 3.3(c) would require the submission of that dispute in accordance with Rule 9 upon demand of the client. Thus, there is in fact no inconsistency between finding the proposed agreement to be precluded by the rules and recognizing that the rules at the same time encourage the settlement of fee disputes by agreement prior to Rule 9 proceedings. In either case, the lawyer cannot ethically refuse to accede to a client?s request to submit a dispute on fees paid or charged to Rule 9 procedures.
In sum, we conclude that the agreement proposed by this question would be inconsistent with the requirements of Maine Bar Rule 3.2(f)(3) because it purports to give the lawyer the right to act at variance with the mandate of Maine Bar Rule 3.3(c).
No. 2
The agreement posed by this second question presents no conflict with the plain language of Rule 3.3(c). Arbitration outside Rule 9 would proceed only in the absence of a request by the client that the matter be submitted pursuant to Rule 9, to which request the lawyer would accede.
More generally, one might ask whether this agreement is solely for the benefit of the lawyer and, if so, does the one-sidedness of the benefit render the agreement unethical? Without the agreement the client has the unilateral ability to choose between litigation in the courts and arbitration, albeit under Rule 9. Under the agreement the client arguably gains nothing, yet, by granting to the lawyer the ability to compel arbitration, loses the right to insist upon litigation.[3] Assuming this to be the case, but see footnote 3, supra, the question posed is whether Rule 3 imposes substantive fairness limitations on representation agreements between a lawyer and the lawyer?s client that go beyond the limitations generally applicable under statutory and common law, such as those, for example, relating to adequacy of consideration and unconscionability.
Maine Bar Rule 3 certainly contains several express, specific such limitations. Thus, for example, Rule 3.3(a) requires that fees not be excessive.
Similarly, Rule 3.4(f)(2)(v) prevents a lawyer from entering into an agreement with the client limiting the lawyer?s liability to the client notwithstanding the fact that such prospective limitation of liability provisions are enforceable on other situations.
The closest candidate for imposing a general ?fairness? requirement in the terms of a lawyer?s representation or retention agreement is Rule 3.4(f)(2)(i).
That rule prevents a lawyer from knowingly entering into a business transaction with a client unless the transaction and terms in which the lawyer acquires the interest represented by the transaction ?are fair and reasonable to the client and are fully disclosed and transmitted to the client in manner and terms which should have reasonably been understood by the client.?
Although it is arguably possible to read this language broadly to include as a covered ?business transaction? a retention or engagement agreement between lawyer and client requiring arbitration of future disputes, we decline to do so. Had the drafters of the rules intended to cover the most obvious and most common of all agreements between lawyers and clients, they would have done so expressly. It is unlikely that failure to do so was the result of a belief that the matter was covered in the language of Rule 3.4(f)(2)(i). Moreover, where the drafters felt it necessary to place limitations on the terms of representation or retention agreements between lawyer and client going beyond those substantive limitations provided for under the common or statutory law, the drafters did so expressly as noted above. Furthermore, if we were to reach any other conclusion, then no engagement or retention agreement between lawyer and client would be ethical or enforceable unless it was in writing and unless the client was ?advised and given a reasonable opportunity to seek independent professional advice of counsel of the client?s choice on the transaction.? Rule 3.4(F)(2)(i).
Having thus concluded that there is no provision of Rule 3 which on its face would prohibit the proposed agreement, we hesitate to graft onto the rules any such prohibition. See Opinion No.146 (?[W]e strongly believe that this Commission is not free to add ethical limitations not expressed by the Bar Rules.?) We note, too, that to the extent that there is a strong public interest in holding attorneys to higher standards than those minimum standards generally applicable to all commercial relations (and we believe there is, as evidenced by the Bar Rules themselves) there is also a ?strong public policy favoring arbitration.? Anderson v. Elliott, 555 A.2d 1042,1044 (Me. 1989). Furthermore, we need take same guidance from the notion that to interpret Rule 3 so as to prohibit or render unenforceable what is in effect a mutual arbitration clause between lawyer and client would raise a serious question as to the constitutionality of Rule 3 to the extent interstate commerce is in any way affected. Allied-Bruce Terminix Companies. Inc v. Dobson, 513 U.S. ___, 130 L.Ed 2d 753 (1995) (state statute making predispute arbitration agreement unenforceable is preempted by Federal Arbitration Act. 9 U.S.C. §1 et seq.).
In forming our opinion, we have also reviewed the Law Court?s decision in Nisbet v. Faunce, 432 A.2d 779 (Me. 1981), wherein the Court stated: ?Even were we to conclude that the client?s petition for fee arbitration is the equivalent of the completion of a written agreement to submit to arbitration, we would nevertheless be obliged to address the provision of [former] Bar Rule 9(g)(3) that renders the Uniform Arbitration Act inapplicable to the extent that it conflicts with the operation of the Maine Bar Rules.? Id. at 782. As an alternative grounds for its decision in Nisbet, the Court held that the version of Bar Rule 9 as it existed in 1981 precluded a court from relying on section 5928 of the Uniform Arbitration Act, 14 M.R.S.A. §5927 et seq., to compel a client to proceed forward with fee arbitration under the Rule should the client wish to revoke the request for arbitration under the rule. The decision in Nisbet is difficult to interpret because it is not clear from the opinion whether there remained any actual controversy between the lawyer and client regarding the fee charged. The fact that the lawyer sought to compel arbitration under the rule suggests that there was a dispute. However, in rejecting the lawyer?s position, the Court reasoned that compelling arbitration ?when the client decides he no longer wants to go forward with it? would impose on the client ?unjustifiable expense, delay, and inconvenience.? Such would hardly be the case if indeed there remained a dispute and the only alternative was litigation. See generally, Anderson v. Elliott, supra, 555 A.2d at 1049. (Rule 9 arbitration provides the client ?a faster and procedurally less forbidding form for fee disputes.?) In any event, it seems that Nisbet holds no more and no less than that under the provisions of Rule 9 as it then existed (and probably as it still exists, compare former Bar Rule 9(g)(3) with the current Bar Rule 9(i)) the client can withdraw his or her request for Rule 9 arbitration. Nothing in Nisbet holds that lawyer and client may not make an agreement to proceed by arbitration under the Uniform Arbitration Act in the absence of a desire by the client to proceed under Rule 9.[4]
For all of these reasons, we therefore conclude that the agreement between a lawyer and the lawyer?s client posed by this second question is not prohibited by Rule 3, and that, at least in this manner, lawyers can ethically obtain a binding agreement from a client to arbitrate fee disputes.
Footnotes
[1] Literally, one might suggest that the lawyer might both submit the matter to Rule 9 arbitration and simultaneously require the client to proceed forward with the agreement, arbitrate in another tribunal, and hope for a decision in the latter before the former. Such, however, would be to ?submit? the matter in form only. The rule, fairly read, requires more; i.e., it requires the lawyer, upon request of the client, to accede to the proposition that the dispute will be resolved finally by the fee arbitration procedures under Rule 9.
[2] Our jurisdiction does not include interpreting Maine Bar Rule 9. See Maine Bar Rule 11(c)(1). Our references to Rule 9 are therefore to be understood in the same vein as, for example, our descriptions of statutes or case law, each of which from time to time require description in order to set the context within which we need to interpret Rule 3.
[3] To be precise, the client would gain the ability to select an alternative arbitration forum. More generally, as is the case with all undertakings by a client in retaining counsel, the client receives as consideration the services of the lawyer.
[4] In view of the conclusion we reach concerning Question 2 and the issues raised by Nisbet regarding the interplay between the enforcement procedures of the Uniform Arbitration Act and Rule 9, pursuant to Bar Rule 11(c)(2) we exercise our discretion to decline addressing the alternative agreement posed whereby the client agrees to request Rule 9 arbitration upon demand of the lawyer.
Enduring Ethics Opinion
Enduring Ethics Opinion #151 [February 2015]
Opinion #150. Charging Referral Fee While Representing Same Client in a Divorce
Issued by the Professional Ethics Commission
Date Issued: May 12, 1995
Facts
Attorney A is handling a divorce matter. He has arranged with Attorney B to undertake representation of his divorce client with respect to a claim of aggravated assault against her husband. Under the recent Omnibus Crime Bill, a civil rights type remedy is available with respect to certain acts of violence against any person or property which are based on the gender of the victim. Under the Act, attorneys? fees are available to a prevailing plaintiff in the same manner as provided under 42 U.S.C. §1988. Attorney B has agreed to undertake the civil rights claim on a contingency basis and to pay a referral fee to A which is contingent on the size of the recovery. The Commission has been asked if the contingent fee arrangement would violate the Bar Rules. We are also asked what the result would be if A and B were jointly to negotiate an overall settlement of the property division issues in the divorce action and of the civil rights claim.
Opinion
Bar Rule 8(c) (2) prohibits contingent fee arrangements ?in respect of the procuring of a divorce, annulment of marriage or legal separation.? However, the Commission sees no reason to conclude that the civil rights claim may not be separated from the divorce. After all, a claim for damages based on domestic violence is not an action to ?procur(e) a divorce.?
The Commission has not been advised regarding the division of fees between A and B which would result if there were to be an over‑all settlement involving the marital property issues as well as the civil rights claim. However, it is conceivable that these arrangements could create a conflict of interest if A?s obligation to represent C aggressively in connection with the division of property in the divorce settlement were undermined by his desire to make sure that her ex‑husband retained sufficient assets to fund a generous settlement of the civil rights claim.[1]
A disclosure requirement is imposed by Rule 3.3(d) dealing with the division of fees. That rule limits referral fees to cases in which the client, ?after full disclosure, consents to employment of the other lawyer and to the terms for the division of fees .?[2] The proposed fee arrangement does not on its face violate the Bar Rules, however, and would be acceptable if A is able to satisfy the strict disclosure and consent requirements which the rule imposes.
Bar Rule 3.4(f)(2) also appears to be implicated by the proposed division of fees. That rule states that:
(2) Avoiding Adverse Interest.
(i) A lawyer shall not knowingly acquire a property or pecuniary interest adverse to a client, or enter into any business transaction with a client, unless:
(A) The transaction and terms in which the lawyer acquires the interest are fair and reasonable to the client and are fully disclosed and transmitted to the client in manner and terms which should have reasonably been understood by the client;
(B) The client is advised and given a reasonable opportunity to seek independent professional advice of counsel of the client?s choice on the transaction; and
(C) The client consents in writing thereto.
In this case, Attorney A?s ?pecuniary interest? in the transaction arises from the fact that, by virtue of the fee arrangement with B, he has acquired a stake in the outcome of the settlement of the civil rights claim which will, in turn, be affected by the division of the marital property. A is, therefore, subject to the stringent requirements of the rule which requires that the terms of the fee division be fair to the client, be disclosed to her in terms she can readily understand, and that her consent to the arrangement be given in writing after having been afforded the opportunity to discuss it with independent counsel. If these conditions can be met, however, the fee arrangement described is permissible.
Footnotes
[1] Presumably, A?s percentage of the contingent fee will increase in direct proportion to the size of the share of the marital property used to fund the husband?s settlement of the civil rights action.
[2] The adequacy of the disclosure would presumably be closely scrutinized in any subsequent proceeding challenging A?s fee since the client would seem to have little to gain by agreeing to the proposed referral fee arrangement.
Enduring Ethics Opinion
Opinion #149. Lawyer and Nonlawyer in Mediation Partnership
Issued by the Professional Ethics Commission
Date Issued: May 10, 1995
Question
The Commission has been asked the following question:
May a lawyer be a partner with a non-lawyer in an enterprise (referred to below as the Mediation Firm) which engages solely in offering mediation services?
Opinion
In response to the proliferation of alternative dispute resolution techniques, Rule 3.4(h) was adopted in 1993 to address ethical issues encountered when lawyers attempt to act as mediators of disputes between persons. One result was to articulate a relationship between the mediator and consumer different from that of lawyer and client. Rule 3.4(h.)(2) states in relevant part that ?The role of mediator does not create a lawyer‑client relationship with any of the parties and does not constitute representation of any of them.? Rule 3.4(h)(4) further specifies that when a mediator prepares documents for ?parties? as a mediator, she must remind them that such preparation is not to be understood as legal advice.
It follows that because of the lack of a lawyer-client relationship many Bar Rules simply will not apply to a lawyer acting as a mediator. However, just as clearly Rule 3.4(h) does not supersede or suspend all other Bar Rules where the lawyer is performing mediation services.[1]
Rule 3.2(a)(2) prohibits the formation of a business relationship between a lawyer and non-lawyer when that enterprise includes ?the practice of law?. While it is not generally within the jurisdiction of this Commission to determine what constitutes the practice of law, it must necessarily do so when the term appears in the Rules themselves. Thus in Opinion 79 the Commission concluded that the services contemplated by an enterprise consisting of an accountant and lawyers constituted the practice of law and was therefore prohibited by Rule 3.2(a)(2). The question posed necessarily requires the Commission to determine if the services performed by the Mediation Firm constitute the practice of law as envisioned by Rule 3.2(a)(2).
Initially, the Commission is cognizant of the narrow view historically taken by the courts and the Attorney General as to what constitutes the unauthorized practice of law under applicable Maine law. However, Rule 3.2(a)(2) does not limit itself to a prohibition of the unauthorized practice of law. Indeed, were it so limited, Opinion 79 would almost certainly have reached, if not an opposite, at least a much narrower conclusion. Thus, assuming that Rule 3.2(a)(2) intends to prohibit lawyer participation in a wide variety of enterprises where services traditionally performed by lawyers are being offered non-lawyers, the question is whether it prohibits all such arrangements without regard to the scope of services being offered. While there are practical concerns that will be discussed below, the Commission concludes that Rule 3.2(a)(2) does not per se prohibit the proposed arrangement.
As discussed in the Reporter?s Notes, Rule 3.2(a)(2) promotes three underlying policies. The first is to avoid public confusion as to the legitimacy of the services being offered. The second is to maintain clear authority of the Court over the practice of law. The third is to avoid ?the difficult problems that would be posed by the substantive law of partnerships under a contrary rule?. None of these policies are threatened or compromised by the Mediation Firm. The clear statement in Rule 3.4(h) that there is no lawyer‑client relationship created by the mediator and the disputing parties and the pains taken to insure that the participants understand this certainly avoids the first concern. If, in fact, all that is being done by the Mediation Firm is to provide an alternative to judicial intervention in resolving a dispute, it is equally hard to see how the Court?s authority over the practice of law is threatened. Nor does the Commission perceive any difficulties posed by the substantive law of partnership when applied to the Mediation Firm. On the other hand since mediation is practiced daily in this State, with the encouragement of courts at all levels, by lay persons working closely with lawyers, it is hard to believe that the Court intended to limit the opportunity of mediators to utilize a variety of talents and experiences to provide alternatives to judicial intervention in a dispute. Thus the Commission concludes that as long as there is no lawyer‑client relationship established during the mediation process, Rule 3.2(a)(2) does not prohibit the creation of the Mediation Firm between lawyers and non-lawyers.[2]
A second question raised is whether Rule 3.3(e) specifically applies to the Mediator Firm. Rule 3.3(e) states ?A lawyer...shall not share legal fees with a non‑lawyer? with exceptions not relevant here. The Commission concludes that if the activity is not prohibited by Rule 3.2(a)(2), then Rule 3.3 would not be violated. Rule 3.3(e) specifically limits the scope of its prohibition to the splitting of legal fees. If the services performed by the Mediation Firm are such that Rule 3.2(a)(2) does not apply, then the splitting of the fees received does not constitute the splitting of legal fees.
Footnotes
[1] The fact that the services that the Mediation Firm performs do not have to be performed by a lawyer does not suspend the application of the Rules to the lawyer. This Commission has previously stated that even if the specific service performed by a lawyer for a client is not necessarily one that must be performed by a licensed attorney, the conduct of the lawyer performing that service is nevertheless subject to the Bar Rules, at least where the activity falls within the scope of services lawyers traditionally perform for clients (c.f. Opinion 79 and ABA opinions referred to therein). Performing mediation services certainly is such an activity.
[2] That being said the Commission is well aware that merely labeling the services the Mediation Firm renders to two or more ?parties? as ?mediation? will not insulate the potential for a violation of Rule 3.2(a)(2). If in fact what the ?parties? are seeking is something other than assistance in resolving a live and discrete dispute, then it may well be that the services being rendered constitute legal advice; and in such cases there would be a violation of Rule 3.2(a)(2).
Enduring Ethics Opinion
Opinion #148. Disclosure of Client Financial Information under Indigent Defense Contract With State
Issued by the Professional Ethics Commission
Date Issued: March 30, 1995
Question
Bar counsel has asked the Commission whether a member of the Bar of this state would violate the Maine Bar Rules by entering into a contract with the Judicial Department of the State of Maine to provide criminal defense services for indigent defendants if one term of the contract provided as follows:
Non privileged information: Bidders agree to advise all clients that financial information related to indigent status eligibility is not privileged information unless the information is probative of the guilt or innocence of the client in which case the information shall be protected by the attorney‑client privilege. Bidders agree to a continuing duty to bring any non-privileged information regarding a defendant's financial status which relates to indigent status eligibility promptly to the attention of the judge presiding in the case.
Opinion
The Commission concludes that compliance with the contractual obligation recited above would not violate any of the Maine Bar Rules, if the phrase "probative of the guilt or innocence of the client" is not limited to the charges as to which contracting counsel has been appointed. The rules principally implicated are 3.6(h) preserving confidences and secrets, and 3.6(b) disclosure of fraud.
Rule 3.6(h) provides, in pertinent part,
(l) Except as permitted by these rules or as required by law or by order of court, a lawyer shall not, without the informed written consent of the client, knowingly reveal a confidence or a secret of the client. . .
(4) This provision is not violated by the disclosure of the clients intention to commit a crime or the information necessary to prevent the crime. . .
(5) As used in Rule 3.6(1) [the reference should be Rule 3.6(h)] confidence refers to information protected by the attorney‑client privilege under applicable law, and secret refers to other information gained in the professional relationship that the client has requested be held inviolate or the disclosure of which would be embarrassing or detrimental to the client.
The Commission assumes that information relating to the clients eligibility for court appointed counsel will have been acquired either through a communication from the client to the attorney or will be other information gained in the professional relationship. To the extent such information is gained outside the professional relationship or is so generally known that it cannot be held inviolate or the client preserved from embarrassment, the contracts requirement of disclosure raises no issue under the Bar Rules.
MBR 5.6(h) defines confidenceby referring to the evidentiary privilege, the principal contours of which are now outlined in Maine Rule of Evidence 502. Rule 502 explains that lawyer‑client communications are confidential, and hence privileged, if not intended to be disclosed to third persons, the relevant intention being that of the disclosing client. If the contract required the lawyer to instruct the client at the beginning of representation that no financial information disclosed to the lawyer would be privileged, then it might be argued that performance of the contract would make it impossible for the client to entertain any such intention. In such a case, no disclosure by the lawyer of financial information conveyed to the lawyer by the client would be a disclosure of a confidence in violation of the rules.
Here, though, the contract contains no such broad and easily understood disclosure requirement. Rather, the contract requires both the lawyer and the client to distinguish between financial information which is probative of the guilt or innocence of the client and other financial information, with only the latter being unprivileged. Reasonable lawyers, and certainly unsophisticated clients, might well understand this language to mean that information which is probative of the clients guilt or innocence on any type of charge will remain privileged. We will therefore assume that this reading is a reading that is intended by the drafters of the contract. Such a presumed reading is supported not only by the plain language of the contract, but by other important considerations.
An attempt to limit the privilege to disclosures probative of the clients guilt or innocence of charges the lawyer was appointed to defend burdens the lawyer with insuring that the client understands what may be a very fine, and not necessarily straight, line. Indeed, in some cases the client might need the lawyers advice to determine whether a particular disclosure is or is not privileged.
Such an interpretation of the contract would also narrow the privilege in a manner inconsistent with long standing Maine precedent. Thus, in Maine the privilege does not turn on actual employment of the disclosee lawyer in the matter to which disclosure pertains. It extends to all communications made to legal advisers with a view to obtain professional aid. Sargent v. Hampden, 38 Me. 581 (1854). Although the privilege does not extend to extraneous or impertinent communications, Snow v. Gould, 74 Me. 540 (1883), the client does not lose the privilege just by mistaking what may be relevant to the matter on which representation has been sought.
For the client cannot be expected to be fully informed how far many matters communicated may be important or material. Nor can he reasonably be expected to decide and to be governed by such considerations in making his disclosures, his object being to communicate every thing in any way appertaining to the transaction, that his attorney may be liable to no surprise. The character in which those communications were made and received, and not their relevancy or materiality to the defense of that suit, must therefore decide, whether they should be regarded as privileged or not.
Aiken v. Kilburne, 27 Me. 262, 262‑3 (1847); see also McLellan v. Longfellow, 32 Me. 496 (1851); Wigmore on Evidence, (McNaughton Rev. 1961), §2310, p. 599. There is no indication that the court system intended either its appointed counsel procedures or the contract for defense services to override the principles set forth in these cases or to require that the client waive the privilege in part as a condition of obtaining appointed counsel.[1] For this reason, and for the other reasons explained above, we therefore assume that all communications of financial information to the lawyer from the client that would otherwise be privileged in the absence of this contract, remain privileged if they are probative of the guilt or innocence of the client on any charge for any conduct predating the disclosure.[2]
Up to this point the opinion has considered only client confidences. Counsel may, however, have acquired information as to the clients financial status, not through a communication from the client, but in some other fashion. In that case, the information is at most a secret rather than a confidence. As such, it is not protected by the evidentiary privilege set forth in Maine Rule of Evidence 502. Moreover, if the information is such as to establish that the clients request for appointed counsel was a fraud upon the court, the lawyer is required by Maine Bar Rule 3.6(b) to reveal the clients fraud to the tribunal, if the client refuses to do so.[3] In these circumstances the contractual requirement merely confirms what the Bar Rules would themselves require.
The applicability of the contract to changes in the clients financial status that are disclosed to the lawyer by the client at a point in time when the client has not yet misrepresented or concealed any material financial information from the state in violation of his or her obligations and oath presents a different case. Such a disclosure does not imply that the client obtained appointed counsel through a perjurious affidavit, but it may portend wrongful conduct in the future if the information disclosed is not transmitted to the court. The contract and related documents clearly assume that no privileges would attach to such a disclosure. Every criminal defendant receiving the services of appointed counsel is required to execute and file an indigence affidavit stating I also understand that I have a continuing obligation, personally and through counsel to report to the court any changes in my employment or other financial circumstances. It is not necessary for the Commission to determine whether disclosure of such a change to appointed counsel. accompanied by an intention that the change not be reported to the court, is within the attorney‑client privilege or is excluded by Rule 502(d)(1). The attorney would not violate Bar Rule 3.6(h) by disclosing changes in the clients means to the Court. Subparagraph (4) of that rule provides that it is not violated by the disclosure of the clients intention to commit a crime or the information necessary to prevent the crime. A clients intentional failure to report a change in financial status would appear to be a criminal contempt of court, see Wells v.State, 474 A.2d 846 (1984). Moreover, Maine Bar Rule 3.6(d) bars the attorney from assisting the client in violating any order of the tribunal.
Footnotes
[1] The propriety of such a waiver would be beyond the scope of this Commissions authority. The ability of the court system to condition a constitutional right to counsel on waiver of a common law privilege is a question of law.
[2] The attorneys oath, 4 M.R.S.A. §806, which has been recognized as an additional source of disciplinary rules, requires disclosure of an intention to commit falsehood in court that it may be prevented not disclosure of a past perjury.
[3] MBR 3.6(b) excuses the lawyer from this duty only if the information is privileged.
Enduring Ethics Opinion
Enduring Ethics Opinion #148 (August 2021)
Opinion #147. Agreement with Referral Network Directing Lawyer's Professional Judgment
Issued by the Professional Ethics Commission
Date Issued: December 14, 1994
Facts
The Commission has been asked whether a Maine attorney would violate the Maine Bar Rules by entering into a so‑called participating attorney agreement with a Florida Limited Liability company styled Professional Asset Planning (hereafter PAP). PAP apparently proposes to recruit clients for participating attorneys through pre‑paid legal services agreements with membership organizations. Its letter inviting participation describes PAP as ?the most prestigious network of attorneys across the nation?. The letter claims that attorney members will gain ?the ability to expand your practice in many ways?. It identifies the initial client pool as members of a named incorporated ?Organization?, who are said to enhance the participating attorney?s ?client lists? and ?standing in the community? while expanding its clientele.
The Commission has been supplied with a ?Participating Attorney Agreement? to be executed by PAP and the participating attorney (hereafter PA). The agreement would require the PA to provide so‑called basic and supplemental services to clients referred to it by PAP. The basic services may be requested either by PAP or by a ?client in good standing?, which status must be verified with PAP before any services are provided. The basic services consist of a review of estate planning documents furnished by PAP to insure that they conform to the requirements of the state in which the PA practices, together with assistance in execution of the documents, either by mail or at an in‑office appointment, and assistance in funding a client?s ?revocable living trust? by preparing appropriate instruments transferring title to real or personal property.
The so‑called supplemental services may be provided to clients only at the request of PAP. They consist of full preparation of estate planning documents for a client by the PA, not merely a review of PAP?S product. Both basic and supplemental services are to be provided by the PA ?in a manner which conforms with applicable professional standards of legal practice.? The PA receives payment from PAP for both the basic services and the supplemental services at rates provided in the agreement. The agreement adds that the PA may provide clients with additional legal services for compensation to be paid solely by the client. The ?client? is defined as an individual ?who has been referred to the PA by PAP to receive contract legal services from the PA?, presumably a member of an organization with which PAP has a prepaid legal services contract.
Although the agreement calls for the PA to provide legal services to ?clients? it also provides that ?the attorney‑client relationship exists between PAP and each client.? The PA is directed not to interfere in any manner with that relationship. Various additional restrictions are set forth in the agreement and in exhibits to the agreement. Thus, the PA would agree not to induce any client to take an action contrary to the terms of the participating attorney agreement or to enroll in a program offering estate planning benefits during the term of the agreement and for two years thereafter. A PA would agree not to demand any changes in the client?s basic estate planning documents unless required by state law and not to suggest to a client that documents prepared by PAP are lacking or inferior in any manner. Any document modifications required to comply with applicable state law are to be made by PAP and not the PA. In addition, the PA would agree not to provide legal services to clients for the purpose of bringing any action against PAP or against any third party to whom PAP provides services, including other clients. The PA would also agree not to provide legal services to clients in any matter concerning foreign law.
Opinion
The Commission has reviewed this arrangement for compliance with Bar Rule 3.4(e)(l) [Avoiding Influence by Others].[1] The Commission?s conclusions are as follows.
Bar Rule 3.4(e)(l) provides:
*Avoiding influence by others*. A person who recommends, employs, or pays a lawyer to render legal services for another shall not be permitted by the lawyer to direct or regulate the lawyer?s professional judgment in rendering such legal services.
The participating attorney agreement tendered by PAP provides, among other things, ?whereas, PAP desires PA to provide legal services to certain of PAP?S clients in accordance with the terms of this agreement?. Subsequent portions of the agreement, including the description of basic and supplemental services, similarly recognize that the PA will be providing legal services to the ?clients? and not merely to PAP. The tendered agreement thus places PAP in the position of ?a person who recommends, employs or pays a lawyer to render legal services for another? under Bar Rule 3.4(e)(l).
The predicate for applying Bar Rule 3.4(e)(1) is the rendering of legal services. Accordingly, it is not material that the agreement purports to provide for an attorney‑client relationship between PAP and the clients; nor would it be material if it purported to forbid an attorney‑client relationship between the PA and the clients. The referral of clients by PAP to the PA, as apparently contemplated by the agreement, for review and execution of the PAP documents will create an attorney client relationship with the PA unless blocked by unusual circumstances not apparent from the agreement or accompanying materials.[2]
Contrary to Rule 3.4(e)(l), the agreement and its exhibits contain several provisions that purport to direct or regulate the professional judgment of the PA in rendering legal services to clients referred by PAP. Thus, the PA would agree not to interfere in any manner with PAP?S attorney‑client relationshipwith their joint client. The PA would agree not to request changes in any of the basic documents unless strictly required to conform to state law, and the PA would agree not to suggest to any client that the documents are lacking or inferior in any manner. The agreement thereby would require a PA and each referred client to forego the PA?s independent professional judgment about the adequacy or appropriateness of critical estate planning documents for that client as well as their adequacy generally. Other restrictions limit the exercise of the PA?S professional judgment in disputes between a client and PAP; in disputes between two or more PAP clients, regardless of whether the latter dispute affects PAP; and in matters involving foreign law. The Commission therefore concludes that the agreement violates Bar Rule 3.4(e)(l) on its face and that a Maine lawyer executing it would be agreeing to restrictions that violate Bar Rule 3.4(e)(l).[3]
Footnotes
[1] Since the PA apparently pays nothing to PAP to become a PA, but is paid by PAP at agreed rates for services rendered, there is no violation of Bar Rule 3.9(f)(2) [payment to secure recommendation or employment].
[2] The rendering of legal services would ordinarily be enough to create an attorney-client relationship for purposes of the Bar Rules. An attorney subject to the Maine Bar rules cannot exclude their operation by agreement with another private party.
[3] Performance of the agreement would harbor at least potential violations of Bar Rule 3.6(a), which requires a lawyer to ?apply the lawyer?s best judgment in the performance of professional services.? But Rule 3.6(a) is not violated without an actual client who has not received best judgment.
Enduring Ethics Opinion
Opinion #145. Taking Fee for Referral When Conflict Bars Representation
Issued by the Professional Ethics Commission
Date Issued: September 27, 1994
Facts
Bar counsel has submitted the following request for an opinion.
Attorney A is approached by Company X which wishes to engage Attorney A to bring litigation against Company Z. A represented Z in a past real estate matter, and determines that she is prevented from taking X?s case because of a conflict of interest from her former representation of Z. A will, instead, refer X to Attorney B in another firm. A will also share in B?s fee provided X, after full disclosure, consents to employment of B, to the terms for the division of the fee and the total fee does not exceed reasonable compensation for all the legal services rendered the client. May A refer X to B and share in B?s fee as outlined above?
Opinion
The Commission concludes that such a division of B?s fee for legal services would be inconsistent with A?s determination that she is precluded from participating in the litigation because of her former representation of Company Z.
Bar Rule 3.3(d) Fee Division provides as follows, in pertinent part:
?A lawyer shall not divide a fee for legal services with another lawyer who is not a partner in or associate of the lawyer?s law firm or office; unless: (1) the client, after full disclosure, consents to employment of the other lawyer and to the terms for the division of the fees; and (2) the total fee of the lawyers does not exceed reasonable compensation for all legal services they rendered to the client.?
Implicit in the terms of this rule is the concept that the referring lawyer, ?the other lawyer? in the rule, has undertaken representation of the client. Subparagraph 1 describes the requirement for client consent ?to employment of the other lawyer?. Subparagraph 2 refers to compensation for all legal services ?they rendered to the client?. The conclusion is inescapable that the Rule contemplates both lawyers being employed in some sense by the client, even if the referring lawyer does not expect to spend time proportional to her fee, or any time for that matter, or expect to be consulted about the litigation after her referral.
A further reason for the Commission?s conclusion, and support for its reading of Rule 3.3(d), is that a compensated referral to a particular lawyer is in and of itself representation of Company X in the matter on which it proposes to commence litigation. Attorney A?s determination that a conflict exists precludes her undertaking any representation of Company X in the matter without Z?s consent. Exercising a judgment about the lawyer most capable of handling the litigated matter in question is such representation. It requires at least a minimal analysis of the appropriate litigation theory, strategy and tactics, followed by a judgment that the lawyer to be recommended has the experience and professional skills required to pursue the indicated course of action. The question implies that Attorney A has not merely provided Company X with a list of lawyers and firms more or less equally qualified to undertake the litigation. The recommendation of a particular lawyer with the expectation of compensation would necessarily be tainted by the conflict that Attorney A has determined to exist.
Enduring Ethics Opinion
Enduring Ethics Opinion #145 [October 2013]
Opinion #144. Taking Security Interest in Client Property Unrelated to Litigation
Issued by the Professional Ethics Commission
Date Issued: August 22, 1994
Question
An attorney often represents indigent or cash poor clients in civil or criminal matters. The attorney wishes to know if he may ethically take a promissory note and secure the note by a mortgage or security interest in property of the client to insure the payment of legal fees, if the property is unrelated to the litigation on which the attorney has been retained.
Opinion
Bar Rule 3.4(f) provides:
(1) A lawyer shall not knowingly acquire a property or pecuniary interest adverse to a client, or enter into a business transaction with a client, unless:
(A) The transaction and terms in which the lawyer acquires the interest are fair and reasonable to the client and are fully disclosed and transmitted to the client in manner and terms which should have reasonably been understood by the client;
(B) The client is advised and given a reasonable opportunity to seek independent professional advice of counsel of the client?s choice on the transaction; and
(C) The client consents in writing thereto.
Rule 3.7(c) provides in part:
A lawyer shall not acquire a proprietary interest in the cause of action or subject matter of the litigation the lawyer is conducting for the client....
Since the facts of the Request specifically state that the property in which the security is given is not the subject of the representation, Rule 3.7(c) is not implicated. See Opinion 64. Where, however, the security interest is in property that is the subject of a pending or contemplated suit, for example a mortgage on real estate which is the subject of a title dispute, then such mortgage would be impermissible. See Opinion 92.
However, even when permitted, Rule 3.4(f) requires that the terms of the note and security interest must be fair and reasonable and must otherwise be executed by the client in circumstances which comply with that Rule, including that the client be advised to seek independent professional advice with respect to the note, security agreement or mortgage. No separate written consent is required under sub‑section (1) (C) if the client executes a note and written security interest or mortgage.
Enduring Ethics Opinion
Opinion #143. Disposition of Client Files on Death or Disability of Solo Practitioner
Issued by the Professional Ethics Commission
Date Issued: July 19, 1994
Question
The Commission has been asked for guidance by attorneys faced with the following problem. Within the State there still remains a significant number of solo practitioners. As the years pass, these attorneys discover they are custodians of an overwhelming number of client files. As long as the lawyers are working, the secure storage of this material is the only major concern. However a serious problem arises when a lawyer's practice is unexpectedly terminated through death or disability. What arrangements should solo practitioners make in advance to insure all/ any obligations to their then former clients?
Opinion
It must be recognized that the Commission cannot establish an exhaustive set of specific procedures that all solo practitioners must follow to meet their obligations in this difficult situation. However, it can identify the concerns that must be addressed by these circumstances, and at least proffer some specific suggestions that would meet these concerns. See also ABA Formal Opinion 92‑369 for further discussion and suggestions.
I. The Bar Rules
First of all, the Bar Rules, while not directly addressing the problem, do articulate some requirements that relate to the question. Rule 3.6(e)(2) states:
A lawyer shall:
(i) Promptly notify a client of the receipt of the client's funds, securities, or other properties;
(ii) Identify and label securities and properties of a client promptly upon receipt and place them in a safe‑deposit box or other place of safekeeping as soon as practicable;
(iii) Maintain complete records of all funds, securities and other properties of a client coming into possession of the lawyer and render prompt and appropriate accounts to the client regarding them; and
(iv) Promptly pay or deliver to the client, as requested by the client, the funds, securities, or other properties in the possession of the lawyer which the client is entitled to receive.
Rule 3.5(a)(2) states:
A lawyer shall not withdraw from employment until the lawyer has taken reasonable steps to avoid foreseeable prejudice to the rights of the lawyer's client, including giving due notice to the client, allowing time for employment of other counsel, delivering to the client all papers and property to which the client is entitled, and complying with applicable laws and rules.
Rule 3.6(a) states:
A lawyer must employ reasonable care and skill and apply the lawyer's best judgment in the performance of professional services. A lawyer shall be punctual in all professional commitments.
Finally, Rule 3.6(h)(1) states that a lawyer shall not. . .knowingly reveal a confidence or secret of the client.
II. The Need for a Plan
From these Rules two obvious principles emerge. First, the files must be kept secure at all times. They cannot be abandoned or simply casually passed on to some accommodating custodian. See Opinion 74. Arrangements must be made not only to prevent destruction but to preserve the confidential information that is contained within the files. Furthermore, many documents (e.g. wills, contracts, and notes) may not only be confidential but irreplaceable.
Secondly, arrangements must be made to inform the client of the termination and protect the client from deadlines in pending proceedings that require replacement representation in a timely manner.
To carry out the above obligations it is obvious that the solo practitioner should adopt a plan in advance of his departure. It is obviously too late to wait until death or disability to let unprepared successors deal with an impossible situation. Spontaneous improvisation when the crisis occurs is unacceptable.
III. Suggestions as to Plan Provisions
The specific content of the plan is a matter for each practitioner to determine based on his or her practice. Due to the complexity of the problem and the variety of circumstances surrounding any given solo practice, it is impossible for the Commission to promulgate what must be in every plan. However, the Commission makes the following suggestions it hopes will assist the lawyer in designing a plan that will meet the clients' legitimate needs and expectations.
First, a plan should include as one of its elements the engagement of an attorney to supervise the winding down of the practice.
Second, the plan ought to provide that clients be promptly notified of any termination. They should be advised of the name of the supervising attorney and key staff who might be employed to assist in the transition. They should be invited to retrieve the files and seek replacement counsel if further legal services are required to complete a task.
The above provisions are not unlike those that take place when a lawyer is disbarred or suspended. See Rules 7.3(i)(1)(B) and 7.3(i)(1)(c). The procedures in such instances also include prompt notification of opposing parties and courts in which the lawyer has any matters which might in any way be deemed ongoing.
Third, for those files that are not seasonably retrieved by clients, a determination should be made by a lawyer, presumably the supervising attorney described in the first suggestion, as to what to do next. Can the file be delivered even if the client makes no effort to retrieve it? Is destruction possible and permissible? See Opinion 74 for further discussion of this issue.
Fourth, what is to be done with those remaining files where destruction appears unreasonable at the time of transition and no client takes custody of the material? In those cases a suitable custodian ought to be engaged by the lawyer or the lawyer's estate, who is willing to assume custody of the files.
Finally, the Commission suggests that the supervising attorney notify the Board of Overseers of the Bar of the location of the unclaimed files. This gives former clients who were unable to be contacted during the transition period a chance to locate the file at some later date.
While the suggestions in the previous paragraphs may satisfactorily discharge the departing lawyer's duties, it will be argued that they are based on an unrealistic expectation that any lawyer can be found who would be willing to undertake the supervisory obligations described. While many lawyers extend the courtesy of "covering" for one another during a vacation or temporary disability,[1] it is unlikely in the extreme that any lawyer would have the time or desire to assume virtually a second practice—especially when there is no real possibility he will be compensated for it by clients. Furthermore, the lawyer contemplating his professional demise may be apprehensive about involving another attorney in such a position due to problems such as preserving confidences with respect to specific clients. However, the Commission believes that the Bar Rules require that the solo practitioner make suitable arrangements in advance to both oversee the notification process and take custody of the files.
Footnote
[1] [Malpractice insurance carriers for some time have required solo attorneys to have some other attorney be available to "back up" in cases of disability or vacations.]
Enduring Ethics Opinion
Enduring Ethics Opinion #143 [October 2011]
Opinion #142. Disclosure by Mediator of "Of Counsel" Affiliation
Issued by the Professional Ethics Commission
Date Issued: August 19, 1994
QUESTION
An attorney proposes to enter into a business relationship with two other attorneys (hereinafter the ?Mediation Group?) to provide alternate dispute resolution services as a mediator, while continuing an ?of counsel? affiliation with the law firm with which the attorney formerly practiced (hereinafter ?the Law Firm?). The ?of counsel? affiliation will be disclosed on the stationery of the Law Firm. The lawyer will have no ?monetary stake? in the firm. The lawyer submitted the following questions:
Will the lawyer need to do a conflicts check with the Law Firm each time clients seek his services or the services of his new business?
What disclosures should or may be made?
Would the answers be different if the lawyer were not ?of counsel? to the Law Firm?
Does it make a difference that the lawyer is married to one of the partners in the Law Firm?
OPINION
The questions posed require consideration of the relationship between the imputed disqualification rule, MBR 3.4(b)(3)(i), familial disqualification, MBR 3.4(f)(3), and the recently adopted mediation rule, MBR 3.4(h). MBR 3.4(b)(3)(i) prohibits a lawyer from undertaking representation of a client whenever the MBR would prohibit any lawyer affiliated with the lawyer or the Law Firm from undertaking the same representation. Familial disqualification is a special and limited case of conflict arising from an interest of the lawyer.
1. The Conflicts Check.
Being ?of counsel? to the Law Firm, the lawyer is ?affiliated with? it and all lawyers who are members or employees of the Law Firm for the purposes of M.B.R. 3.4(b)(1). Since mediation is not representation of a client, however, [MBR 3.4(h)(2)] and since the imputed disqualification rule speaks of declining or commencing ?representation?, that rule will not disqualify a lawyer from acting as mediator whenever a conflicts check would reveal representation of a party by the Law Firm. Note that the converse is not true; the Law Firm would be disqualified from representation that is prohibited by the mediation rule, MBR 3.4(h), such as representing a party to mediation ?in court or in the matter under mediation or any related matter.? [MBR 3.4(h)(3)] Accordingly, a pre-mediation conflicts check will at a minimum serve to put the Law Firm on notice when its counsel contemplates mediation of a dispute involving one or more of its clients.
The mediation rule supplies an additional reason for a conflicts check with the firm. Although imputed disqualification may not reach mediation, the mediation rule requires both the fact of impartiality [MBA 3.4(h)(3)] and disclosure of ?any interest or relationship? likely to affect impartiality or create an appearance of bias. [MBR 3.4(h)(1)] Past or present representation of a party to mediation, or a person adverse to a party to mediation, by the Law Firm could create an appearance of bias although the mediator is satisfied that in reality there will be no loss of impartiality. The appearance of bias could affect even a mediation conducted by a member of the Mediation Group who is not affiliated with the Law Firm. Thus the requirements of MBR 3.4(h)(1) and (3) cannot be fulfilled unless the Mediation Group determines, through a ?conflicts check? or otherwise, whether any party to a proposed mediation has a past or present connection with the Law Firm.
MBR 3.4(h)(3) provides, in part:
[w]hile acting as mediator, the lawyer may not represent any of the parties in court or in the matter under mediation or any related matter.
MBR 3.4(h)(5) provides, in part:
Upon withdrawal, or upon conclusion of the mediation, the lawyer shall not represent any of the parties in the matter that was the subject of the mediation, or in any related matter.
These are absolute bars that preclude the lawyer-mediator from such representation without regard to client consent. As explained above, the vicarious disqualification rule does apply to this representation. Thus the Law Firm will be disqualified whenever its ?of counsel? lawyer would be disqualified. We conclude that the vicarious disqualification rule also disqualifies the lawyer and the Law Firm whenever another member of the Mediation Group would be disqualified by either of the quoted rules. The affiliation required for disqualification under MBR 3.4(b)(3)(i) is not by its terms strictly limited to organizations engaged in the practice of law.[1] Moreover, the requirements for impartiality set forth in the mediation rule persuade us that MBR 3.4(b)(3)(i) should apply among attorney members of the Mediation Group. It would thus appear necessary for the Law Firm to institute reverse conflict checks whenever it proposes to undertake a new matter or client to determine whether the matter is or was the subject of, or the client is a party to, a mediation conducted by the Mediation Group.
2. The Disclosure.
If no participant in the mediation has any present or past connection with the Law Firm as client or opponent, disclosure of the ?of counsel? affiliation is not required. If any participant has such a connection, as client, opponent of a client or otherwise, the pertinent facts should be disclosed. Informed consent of the parties will permit the lawyer to act as mediator, unless it would not be reasonable in the circumstances to believe that the mediation can be undertaken impartially. [MBR 3.4(h)(3)] Accordingly, whenever the Mediation Group is aware of such a connection, a boilerplate disclosure of the ?of counsel? affiliation, without more, is not sufficient. Since consent must be informed, the disclosure must include all facts required to judge the extent and consequences of any possible effect on the mediator?s impartiality. Whether legally mandated mediation can proceed in the face of a connection between one of the parties and the Law Firm will depend on the statute and regulations, if any, that create and control the legal mandate; that aspect of the question is beyond the jurisdiction of the Commission.
The mediation rule further requires explanation of the ?limits of the lawyer?s role as mediator?. We conclude that the mediator should disclose the possibility of future disqualification of the Law Firm when a party to the mediation is a present or previous client of the Law Firm and therefore might harbor an expectation of subsequent representation in the matter submitted to mediation. We also conclude that the disclosure is not required unless a party to the mediation is a prior client of the Law Firm, but such a disclosure would generally be appropriate both to explain fully the ?limits of the lawyer?s role as mediator? and because mediation could be corrupted unintentionally by the mid-course attempt of one of the parties to employ the Law Firm in the same or a related matter.[2]
3. What if the lawyer were not ?of counsel??
These answers would be significantly different if the lawyer were not ?of counsel? to the Law Firm. The requirement for disclosure of ?any interest or relationship likely to affect the lawyer?s impartiality or that might create an appearance of partiality or bias? [MBR 3.4(h)(1)] would still require that the mediator disclose the previous connection to the Law Firm if any party to a proposed mediation has been a client or opponent of a client of the Law Firm while the lawyer-mediator was affiliated with it. For the same reason the former affiliation should also be disclosed by the mediator when the Law Firm has referred a party to mediation, or represents a party in a mediation conducted by the Mediation Group, at least for a reasonable cooling off period, regardless whether the party was a client when the mediator was part of the Law Firm. The other disclosures detailed above will not be required, and as a result, conflict checks to determine whether they are required need not be made. Since mediation is not representation of a client and is not adverse to any of the parties to mediation, the successive representation conflict rule [MBR 3.4(d)] will have no independent application to any case in which the lawyer-mediator or other members of the Mediation Group are asked to mediate a dispute involving former clients of the Law Firm.
4. Spousal disqualification?
The lawyer?s marital affiliation with a partner in the Law Firm would appear to make little difference in the disclosures and no difference in the conflict checks required if the lawyer continues ?of counsel?. If the ?of counsel? connection did not exist, marital affiliation alone would be a factor that could threaten an appearance of bias in a case in which one of the parties to a mediation is or has been represented or opposed by the spouse of the mediator. It is doubtful that the effect would invariably extend to parties represented or opposed by a partner of the mediator?s spouse; accordingly, we cannot say that MBR 3.4(h) requires automatic disclosure in all such cases, although it may require disclosure in matters of particular importance to the Law Firm.
EPILOGUE
Since the touchstone of this analysis must be the likelihood of an effect on impartiality or an appearance of partiality, the answers given should be considered rough rules of thumb. The need for disclosure in any given case could be affected by the passage of time since the event to be disclosed, the importance of the event to the parties involved, and many other factors.
FOOTNOTES
[1] We do not mean to suggest that the imputed disqualification rule will necessarily apply whenever more than one lawyer is employed or engaged in the same enterprise.
[2] Of course, the lawyer ?may? make any additional disclosures desired so long as they do not lead to misunderstanding of any fact relevant to judging the mediator?s ability to be impartial.
Enduring Ethics Opinion
Opinion #141. Real Estate Escrow Accounts as Trust Accounts
Issued by the Professional Ethics Commission
Date Issued: June 30, 1994
Facts
The Commission has received an inquiry concerning the proper interpretation of Maine Bar Rules 3.6(e) and 6 (as amended effective July 1, 1994) with respect to the administration of escrow accounts used by the firm exclusively in connection with real estate closings. Some of the ?escrow accounts? bear interest on an average daily balance; some bear no interest. The funds are customarily deposited in the accounts the day of the disbursements, so the ?float? in the account is minimal, usually just a day or two.
Question
Are the ?real estate escrow accounts? described above subject to the provisions of Rule 3.6(e) and Rule 6?
Answer
Yes.
Discussion
Neither of the Rules cited makes any distinction between the ?escrow? accounts described above and any other trust account. The Rule as recently amended gives the attorney two choices. Either the accounts may be maintained and administered as IOLTA accounts or they may be maintained as non-interest bearing (i.e., non-IOLTA) accounts. The new Rule requires that either all such accounts be IOLTA accounts or that all such accounts be non-interest bearing non-IOLTA accounts (see Rule 3.6(e)(4),(5), the single exception from the ?all-in or all-out? requirement being for funds of the United States Government (see amendments to Maine Bar Rules 3.6(e)(4) and (5), effective April 29, 1994). As drafted, except in that single exception, the Rule does not appear to permit a lawyer or a firm to have both IOLTA and non-IOLTA accounts.
In either case the reporting requirements set forth in Maine Bar Rule 6 are applicable with respect to each such account.
Enduring Ethics Opinion
Opinion #140. Obligation to Disclose Client's Perjury to Court
Issued by the Professional Ethics Commission
Date Issued: June 23, 1994
Pursuant to Maine Bar Rule 11(c), a Maine lawyer has requested an advisory opinion concerning the following situation:
Attorney is appointed to represent Client on pending criminal charges. After appointment, but prior to trial, Client confides to Attorney that he, in fact, committed the acts alleged in the indictment. Attorney advises client not to testify at trial; Attorney gives Client the following advice:
If Client testifies, the prosecutor will almost certainly ask whether Client committed the acts alleged in the indictment;
If Client testifies, Client will be obligated to answer the question truthfully;
If Client testifies and denies the acts and refuses to retract the denial, Attorney will move to withdraw from the case; and
If leave to withdraw is denied, Attorney will refuse to argue Client?s denial to the court or jury.
The question presented is whether, under the circumstances described above, the Attorney is required by the Maine Bar Rules to take the additional step of disclosing the Client?s false testimony to the Court.
As an initial matter, the Commission notes that the facts as stated in this inquiry are troubling, given the apparent likelihood that client perjury will occur. If under the circumstances, counsel in advance of trial believes that the prospect of client perjury is virtually inevitable, even though counsel does not in fact know that it will occur, the Commission suggests that the prudent course of action would be for counsel to seek leave from the court for permissive withdrawal from representation pursuant to Maine Bar Rule 3.5(c) in advance of trial (indeed, depending on the circumstances, withdrawal may be required by Maine Bar Rule 3.7(b), prohibiting participation in the creation or preservation of false evidence) in order thereby to avoid complications that may be adverse to the client?s interests as well as to the orderly process of the court, which would likely ensue were withdrawal and substitution of counsel to take place upon the occurrence of perjury after the trial has begun.
Turning to the question presented, the Commission observes at the outset that the circumstances as they are described in this inquiry do not indicate that the lawyer, in advance of the Client?s testifying, clearly knows that the Client will commit perjury. Presumably, the Client will take the stand solely for the purpose of answering such questions as may be put to him by the prosecutor. Since we are unable to conclude that at that juncture the Attorney clearly knows that the Client intends to perjure himself, what is at issue here is whether, in the event that the client commits perjury, through answering questions posed by the prosecutor on cross-examination, the Attorney is required by the Bar Rules to disclose to the Court that the Client has lied on the stand.
OPINION
For the reasons discussed below, the Commission concludes that the Attorney is not required by the Maine Bar Rules to reveal to the Court the Client?s perjury under the circumstances presented. The Attorney, however, may be required as a matter of law to disclose the Client?s perjury. In that regard, counsel should be aware that Maine Bar Rule 3.1(a) states that ?Nothing in this Code [of Professional Responsibility] is intended to limit or supersede any provision of law relating to the duties and obligations of attorneys or the consequences of a violation; and the prohibition of certain conduct in this Code is not to be interpreted as an approval of conduct not specifically mentioned.?
Maine Bar Rule 3.6(b) provides as follows:
(b) Disclosure of Fraud. A lawyer who receives information clearly establishing that a client has during the representation perpetrated a fraud upon any person or tribunal shall promptly call upon the client to rectify the same; and if the client refuses or is unable to do so, the lawyer shall reveal the fraud to the affected person or tribunal, except when the information is protected as a privileged communication. If a person other than a client has perpetrated a fraud upon a tribunal, the lawyer shall promptly reveal the fraud to the tribunal (emphasis added).
Maine Bar Rule 3.6(b) derived from DR 7-102(B) of the ABA Model Code. As originally adopted by the ABA in 1969, DR 7-102(B) did not contain the exception, ?except when the information is protected as a privileged communication.? In 1974, however, the words ?except when the information is protected as a privileged communication? were added to that Disciplinary Rule in order to make the requirements of that Disciplinary Rule conform with DR 4-101 (preservation of confidences and secrets of a client). See ABF Annotated Code of Professional Responsibility (1979) at 306-307, 321-322.
In 1979, the Supreme Judicial Court adopted the Code of Professional Responsibility, including Maine Bar Rule 3.6(c), which was redesignated as Rule 3.6(b) in 1993. As adopted by the Supreme Judicial Court, that Rule is substantially identical with ABA Model Code DR 7-102(B), including the exception, ?except when the information is protected as a privileged communication.? Although this exception was adopted in Maine, it was not adopted in most states. See C.W. Wolfram, Legal Ethics (1986)at 658.
Given this history of Maine Bar Rule 3.6(b), the Commission concludes that the Maine Bar Rules do not require disclosure of a client?s perjury on cross-examination once it has occurred if disclosure would involve information protected as a privileged communication.[1] See 1 Law. Man. Prof. Conduct 61:401:
Although the Model Code would permit disclosure of a client?s intention to commit a crime, it would not permit disclosure of a client?s perjury once it has occurred if disclosure involves information protected as a privileged communication.
In this regard, the ABA Model Code and Maine Bar Rule 3.6(b) differ markedly from the 1983 ABA Model Rules. Rule 3.3 of the Model Rules, like the 1969 Model Code prior to the 1974 amendment to DR 7-102(b)(1), requires a lawyer to take remedial measures, including disclosure, when a client has committed perjury, even if the lawyer knows of the client?s perjury because of what would otherwise be a confidential communication. See ABA Formal Opinion 87-353 (April 20, 1987); C.L. Wolfram Legal Ethics (1986) at 659. ABA Model rule 3.3 provides as follows:
Rule 3.3 Candor Toward the Tribunal
(a) A lawyer shall not knowingly:
(1) make a false statement of material fact or law to a tribunal:
(2) fail to disclose a material fact to a tribunal when disclosure is necessary to avoid assisting a criminal or fraudulent act by the client;
(3) fail to disclose to the tribunal legal authority in the controlling jurisdiction known to the lawyer to be directly adverse to the position of the client and not disclosed by opposing counsel or;
(4) offer evidence that the lawyer knows to be false. If a lawyer has offered material evidence and comes to know of the falsity, the lawyer shall take reasonable remedial measures.
(b) The duties stated in paragraph (a) continue to the conclusion of the proceeding, and apply even if compliance requires disclosure of information otherwise protected by Rule 1.6.
(c) A lawyer may refuse to offer evidence that the lawyer reasonably believes is false.
(d) In an ex parte proceeding, a lawyer shall inform the tribunal of all material facts known to the lawyer which will enable the tribunal to make an informed decision, whether or not the facts are adverse.
The comment to Model Rule 3.3, however, notes that the disclosure requirement of that Rule ?may be qualified by constitutional provisions for due process and the right to counsel in criminal cases.?
Although the exception within Maine Bar Rule 3.6(b) prevents us from concluding that the Maine Bar Rules require disclosure of client perjury on cross-examination once it has occurred if disclosure would involve information protected as a privileged communication, counsel should be aware that disclosure may nevertheless be required as a matter of law. In State v. Gilcott, 420 A.2d 1238 (Me. 1980), the Supreme Judicial Court stated:
The State?s concession [that Gilcott?s former counsel breached his duty to his client] ignores the attorney?s ethical obligation to the court. Counsel have no duty to support a motion having no basis in fact, and, indeed, have an affirmative obligation to inform the court of the falsity of a client?s assertions [citing the oath required of lawyers under 4 M.R.S.A. §806, with a see also citation to Maine Bar Rules 3.6(c) (now designated as Maine Bar Rule 3.6(b) and 3.7(e)(1)(i)].
Id. at 1240.
More recently, in Board of Overseers of the Bar v. Dineen, 481 A.2d 499 (Me. 1984), the Supreme Judicial Court Affirmed a judgment of disbarment of a lawyer who deliberately elicited false testimony from his client on the witness stand. The Court, in no uncertain terms, condemned that conduct, stating:
There is no more egregious violation of a lawyer?s duty as an officer of the court, and no clearer ethical breach.
Id. at 504.
Although the situation in Dineen can be distinguished from the situation here on the basis that in Dineen the lawyer deliberately elicited false testimony, the Court?s opinion in Dineen may nevertheless apply because the Court based its judgment in that case on the lawyer?s ?solemn oath to ?do no falsehood nor consent to the doing of any in court?.? The Court moreover stated:
While the lawyer has a duty to act zealously on his client?s behalf, that duty is subject to ethical limitations which the lawyer may ignore at his peril. Among these is the ?affirmative obligation to inform the court of the falsity of a client?s assertions?. State v. Gilcott, 420 A.2d 1238, 1240 (Me. 1980). See also M. Bar R. 3.7(e)(1)(i).
Id. at 504.
Given these decisions of the Supreme Judicial Court, both of which contain a ?see also? cite to Maine Bar Rule 3.7(e)(1)(i), it is possible that the Supreme Judicial Court may read that Rule so as to require disclosure of client perjury once it has occurred, notwithstanding the ?except when the information is protected as a privileged communication? provision of Maine Bar Rule 3.6(b). The Court, however, has not explicitly addressed the meaning and effect of that exception within Maine Bar Rule 3.6(b). Maine Bar Rule 3.7(e)(1)(i) states:
(1) In appearing in a professional capacity before a tribunal, a lawyer shall:
(i) Employ, for the purpose of maintaining the causes confided to the lawyer, such means only as are consistent with truth, and shall not seek to mislead the judge, jury, or tribunal by any artifice or false statement of fact or law.
The Reporter?s Notes state that Maine Bar Rule 3.7(e)(1)(i) is taken from Rule 7-105(1) of the California Rules of Professional Conduct, and has no direct counterpart in the ABA Model Code.
In light of the history of DR 7-102 (B)(1) and Maine Bar Rule 3.6(b) discussed above, and considering the explicit and specific exception within Maine Bar Rule 3.6(b), the Commission is unable to conclude that the somewhat less specific language of Maine Bar Rule 3.7(e)(1)(i) would require disclosure of client perjury once it has occurred under the circumstances presented here and where the disclosure involves information protected as privileged communication. For the same reasons, the Commission is unable to conclude that Maine Evidence Rule 502(d)(1) or Maine Bar Rule 3.7(b) mandates disclosure of client perjury under the facts presented here.
The tension between Maine Bar Rules 3.6(b) and 3.7(e)(1)(i) in this respect could be eliminated in a variety of ways, depending on the outcome intended, e.g. (1) by amending Maine Bar Rule 3.6(b) by deleting ?except where the information is protected as a privileged communication?; or (2) by amending Maine Bar Rule 3.7(e)(1)(i) to make it clear that the exception within Maine Bar Rule 3.6(b) prevails; or (3) by adopting a Rule similar to ABA Model Rule 3.3 in place of Maine Bar Rule 3.6(b).[2] Unless and until the exception within Maine Bar Rule 3.6(b) is removed by amendment of that Rule, the Commission concludes that the Maine Bar Rules as they presently stand do not require disclosure under the circumstances presented here. Nor, given the specific and explicit exception within Maine Bar Rule 3.6(b), is the Commission able to conclude that the lawyer?s oath overrides that exception under the circumstances presented here. Definitive clarification of the tension between the exception provision of Maine Bar Rule 3.6(b) on the one hand, and the lawyer?s oath on the other, is ultimately a matter of law for judicial determination, and as such is beyond the jurisdiction of the Commission. Resolution of that issue, involving as it does the meaning of the oath required of lawyers and whether the oath supersedes the exception within Maine Bar Rule 3.6(b), is plainly a matter of fundamental importance for the administration of justice in this State.
One member of the Commission dissents from the Commission?s conclusion that the Maine Bar Rules do not require disclosure of client perjury under the circumstances presented here.
Footnotes
[1] For purposes of this Opinion, the Commission assumes that disclosure of client perjury under the circumstances presented would involve disclosure of information which is protected by the attorney-client evidentiary privilege and which is also within the scope of Maine Bar Rule 3.6(h) (preservation of client confidences and secrets). ABA Formal Opinion No. 341 (September 30, 1975) interpreted ?privileged communication? in the 1974 amendment to DR 7-102(B) as referring to those confidences and secrets that are required to be preserved by DR 4-101. That Opinion also concluded that when disclosure is required ?by a law,? the ?privileged communication? exception to DR 7-102(B) is ?not applicable and disclosure may be required.?
[2] It is of interest that ABA Model Rule 3.3 has been modified in several states. As noted in 1 Law. Man. Prof. Conduct, 61:404-405, ?of the states that have adopted rules based on the ABA Model Rules, the following have amended Rule 3.3 so as to modify the lawyer?s obligations when dealing with a perjurous client.
Arizona, in Rule 3.3(a)(4), qualifies the lawyer?s duty of candor toward the tribunal with a reference to exceptions required by applicable law.
Florida requires that the lawyer?s duty of candor toward the tribunal continue beyond the conclusion of the proceeding. Rule 3.3(b).
Louisiana replaces 3.3(a)(2) with Model Code provision regarding disclosures required by DR 7-102 (A)(3).
Maryland provides that in a criminal case a lawyer need not disclose a client?s past or intended perjury if the lawyer reasonably believes such disclosure would jeopardize any of the client?s constitutional rights. Rule 3.3(e).
New Hampshire omits ABA Model Rule 3.3(a)(2), which states that a lawyer must not knowingly fail to disclose a material fact when disclosure is necessary to avoid assisting a client in a criminal or fraudulent act. The committee that drew up the rules stated that such a provision would conflict with Rule 1.6(b)(1), which make disclosures permissive.
New Jersey adds Rule 3.3(a)(5), which provides that a lawyer shall not knowingly fail to disclose material facts that are likely to mislead the tribunal if counsel were to remain silent.
North Carolina requires that a lawyer withdraw from representing a client who intends to commit perjury, but the lawyer need not disclose the client?s intention to the tribunal. Rule 7.2(B).
North Dakota does not limit Model Rules 3.3(a)(1) and 3.3(d) to ?material? facts. Model Rule 3.3(a)(2) is omitted. North Dakota applies a more subjective standard with regard to a lawyer?s right to refuse to offer evidence; the lawyer need only believe the evidence is false. If a lawyer has offered evidence and comes to know of its falsity, he must disclose this fact to the court unless the evidence was part of the testimony of the lawyer?s client. If the evidence was contained in the client?s testimony, the lawyer must make reasonable efforts to convince the client to consent to disclosure; if the client refuses, the lawyer should seek to withdraw without disclosure. If withdrawal is not permitted, the lawyer may continue the representation.
Washington subordinates the duty of candor to the tribunal to the duty of confidentiality impose by Rule 1.6. It also adds a reference to constitutional law defining the right to effective assistance of counsel in criminal cases. Rule 3.3(c), (g).
Enduring Ethics Opinion
Enduring Ethics Opinion #140 [April 2012]
Opinion #139. Charging Client for Defending Attorney Before Board of Overseers of the Bar
Issued by the Professional Ethics Commission
Date Issued: June 1, 1994
Facts
During the course of representing a divorce client, an attorney is reported to the Board of Overseers of the Bar by the adverse party for alleged professional misconduct. We are asked to assume, for purposes of this opinion, that the complaint constituted a tactical maneuver by the adverse party intended to pressure the attorney into withdrawing from the representation or otherwise attempting to dampen the attorney?s zealous representation of his/her client. We are further asked to assume that the charges are ultimately found to have been frivolous by the Board, and are dismissed as such without any adverse finding to the attorney.
In the event of such an adverse party?s complaint, the reported attorney is forced to expend time and expense in defense of the allegation. In some cases, this may involve considerable cost to the attorney. The attorney would like to pass that cost on to the client. The attorney inquires into the propriety of charging the client for professional time and disbursements incurred in responding to the adverse party?s tactical, frivolous complaint to the Board.
Opinion
Rule 3.3 governs the question of what fees, costs and disbursements may be charged to a client. In general, attorneys are allowed to enter into any agreement for fees that may be struck between the lawyer and the client. The limitations upon that general rule are set forth in Rule 3.3.
Rule 3.3 prohibits an attorney from entering into an agreement for, charging or collecting ?an illegal or excessive fee.? A fee will be considered ?excessive? when, ?after a review of the facts, a lawyer of ordinary prudence would be left with a definite and firm conviction that the fee is in excess of a reasonable fee.? To aid application of that general precept the Rule enumerates nine specific factors to be considered as guides in determining the reasonableness of a fee.
?(1) The time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
(2) The likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment of the lawyer;
(3) The fee customarily charged in the locality for similar legal services;
(4) The responsibility assumed, the amount involved, and the results obtained;
(5) The time limitations imposed by the client or the circumstances;
(6) The nature and length of the professional relationship with the client;
(7) The experience, reputation, and ability of the lawyer performing the services;
(8) Whether the fee is fixed or contingent; and
(9) The informed written consent of the client as to the fee agreement.?
We are struck at the outset by the novelty of the suggestion that the attorney?s personal defense against a complaint of professional misconduct could be construed, under any set of circumstances, as the rendition of legal services to a client. The contractual relationship between an attorney and a client is grounded on consideration flowing in the form of the attorney?s legal services in exchange for a reasonable fee.
Our review of the enumerated factors listed in Rule 3.3 reinforces our concern for the propriety of charging the client for the attorney?s defense. Such terms as ?legal service,? ?employment,? ?legal services,? and ?results obtained,? as used in Rule 3.3(a) (1), (2), (3), (4) and (7), clearly refer to the client?s case with respect to which the attorney has been hired to perform work. Of particular relevance to the inquiry at hand is Rule 3.3(a)(3), mandating consideration of the fee ?customarily charged in the locality for similar legal services.? Contemporary practice in the State of Maine, in our collective experience, does not establish the existence of a custom of charging the client for the attorney?s time and expenses defending against an adverse party?s frivolous complaint of professional misconduct.
Moreover, in view of the complete lack of support in the Rules for charging the client in these circumstances, we conclude that such fees remain unreasonable, notwithstanding that the client may in fact give his/her ?informed written consent? to such a fee agreement. See Rule 3.3(a)(9).
Enduring Ethics Opinion
Opinion #138. Payment of Legal Fees by Finance Company
Issued by the Professional Ethics Commission
Date Issued: March 25, 1994
Facts
The Commission has been asked whether a proposed arrangement to finance the payment of legal fees may be undertaken without violating the Bar Rules. The name given to this device is Lawcard. That name is to some extent a misnomer, however, since the plan does not, in fact, contemplate the issuance of a credit card to be used to pay legal fees. Instead the finance company would take an assignment from the attorney of the account receivable which it would classify in categories depending on the creditworthiness of the client.
An application for credit would be filled out by the client and faxed to the financing agency which assures that it will reach an opinion on creditworthiness within approximately one hour. The agency would then send the attorney a check in the amount of 90% of the bill if the client received an ?A? rating or 80% if the client is classified as a ?B?. If the client receives a ?C? listing, the financing agency will advance no money, but will provide collection services. In that event, the agency will remit 80% of the amount collected to the attorney including interest of up to 18%.
Opinion
Bar Rule 3.3(b) states that ?A lawyer may accept payment by credit card for legal services.?[1] The Commission believes that the proposed Lawcard arrangement is permissible under the Rule provided certain restraints are observed.
The American Bar Association has blown hot and cold regarding the financing of legal fees. Compare A.B.A. Informal Opinion No. 1176 (1971) with A.B.A. Formal Opinion 338 (1974) (allowing credit card financing with certain limitations). In Informal Opinion No. 1120, the A.B.A. disapproved of any arrangement which allowed recourse against the attorney on the grounds that his future relationship with the client might be adversely affected. An opposite result was reached by the Maine Bar Association Professional Ethics Committee in Opinion No. 49 (1977). In that opinion, the Committee concluded that the agreement between the attorney, the client, and the financing agency must permit recourse against the attorney.
The Commission agrees that the client should not be disadvantaged in asserting defenses against the financing agency. Any such financing arrangement must allow the client to assert any defenses based on the attorney?s failure to perform in resisting the financing agency?s demand for payment. In addition, there can be no impairment of the client?s right to submit a fee dispute with the attorney to binding arbitration pursuant to Bar Rule 9.
It is also essential that the attorney not be required to communicate client confidences as part of the financing agreement. See Mich. Opinion No. R1‑168 (1993). The attorney could only agree to disclosure of information regarding the nature of the services performed with client consent.
In Maine Bar Association Opinion No. 20, one member of the Committee who concurred in the decision that credit card financing of legal fees is unethical commented that this practice could lead an attorney to subject a client to an onerous interest‑bearing loan in a matter which he should have been willing to undertake at no charge or for a fee payable in installments without interest. Subsequently Bar Rule 3.10 was adopted encouraging each attorney to render unpaid public interest legal service which may consist of professional services at no fee or a reduced fee. This rule stands as a reminder that a lawyer may have an obligation to provide legal services to at least some clients without charging a fee regardless of the availability of financing arrangements such as Lawcard.
Under the Lawcard arrangement, the financing agency would act as a collection agent with respect to category ?C? clients not deemed sufficiently creditworthy to receive loans to pay their legal fees. In those cases, the financing agency will charge interest of up to 18% on the amount being collected, a portion of which will be remitted to the attorney. Although it is not per se unethical to charge interest on overdue legal fees, such an arrangement would not be enforceable without client consent supported by consideration. Cloutier, Barrett, Cloutier and Conley v. Wax, 604 A.2d 42, 45 (Me. 1992). Moreover, the requirement of Rule 3.4(f)(2) that any arrangement in which an attorney acquires a pecuniary interest adverse to the client must be ?fair and reasonable to the client? might under some circumstances preclude imposing an interest rate as onerous as the 18% maximum prescribed in the case of Lawcard class C clients.
Concern has also been expressed in ethics opinions in other jurisdictions about permitting an attorney to relinquish to a financing agency the decision about whether or not to bring suit to enforce collection of the debt. See, e.g., N.Y. State Opinion No. 362 (1974). Thus it has sometimes been required that the arrangement with the financing agency reserve to the attorney the right to buy back the client?s financial obligation before suit is instituted. See, e.g., N.H. Ethics Opinion, 1975 (Maru, 8792). Although it may be doubted that such buy‑back rights would frequently be exercised, the Commission believes that the reservation of such rights would nevertheless constitute a significant safeguard against potentially oppressive threats of litigation as a collection device on the part of employees of the financing agency. Although no Bar Rule expressly requires it, the admonition of Rule 3‑10 that an attorney should provide professional services ?at no fee or a reduced fee to persons of limited means? suggests that it would be the better practice for an attorney to reserve to himself the ultimate decision as to whether it would be appropriate to bring suit to collect a fee in light of the client?s ability to pay at the time that litigation is contemplated.
Footnote
[1] The Commission does not accept the holding of Maine Bar Association Opinion No. 49 that fees for ?legal services? cannot be read to include out‑of‑pocket expenses.
Enduring Ethics Opinion
Opinion #137. Preparation of Documents Ancillary to a Settlement Agreement by Mediator
Issued by the Professional Ethics Commission
Date Issued: December 1, 1993
Question
The Commission has been asked the following question:
When a lawyer-mediator has drafted a settlement agreement in a pro-se case (after advising and encouraging the unrepresented parties to seek independent legal advice prior to executing the agreement), is it proper for the lawyer‑mediator to prepare a divorce judgment for the parties and other ancillary documents such as promissory notes, deeds, etc.?
Opinion
The Commission concludes that a lawyer‑mediator operating under the constraints of Maine Bar Rule 3.4(h) may prepare documents ancillary to a settlement agreement, such as a divorce judgment, promissory note, and deed, provided such documents merely reflect the parties? resolution of the matter and all of the other conditions of Rule 3.4(h) have been satisfied.
Rule 3.4(h), a recent amendment to the Maine Bar Rules, governs the activities of lawyers who serve as full or part‑time mediators and provides in pertinent part:
(2) The role of mediator does not create a lawyer‑client relationship with any of the parties and does not constitute representation of any of them. The lawyer shall not attempt to advance the interest of any of the parties at the expense of any other party.
(4) The lawyer may draft a settlement agreement or instrument reflecting the parties? resolution of the matter but must advise and encourage any party represented by independent counsel to consult with that counsel, and any unrepresented party to seek independent legal advice, before executing it.
As the rule itself and the Reporter?s notes make clear, a lawyer‑mediator is not engaging in representation of any of the participants in mediation and may not advance the interest of any party at the expense of others. Subject to that limitation, and to the additional requirement that the parties to mediation be advised and encouraged to consult with counsel, a lawyer‑mediator is expressly permitted to ?draft a settlement agreement or instrument reflecting the parties? resolution of the matter.? We see nothing in this language indicating that only one such agreement or instrument or only a ?settlement agreement? is contemplated. On the contrary, the rule expressly permits the drafting of an ?instrument,? and the key criteria are found in the requirements of neutrality and that the agreement or instrument reflect the parties? resolution of the matter. The question presented presupposes that an agreement and several additional instruments may be necessary to reflect fully the parties? resolution of the matter.
Absent a draft from the mediator, the decree, note, mortgage, and the like, would presumably be drafted by a lawyer for one of the parties and reviewed by another, perhaps necessitating a return to the mediator to resolve issues unearthed by the drafting process. Provided the conditions of Rule 3.4(h) have been met, including the condition that the parties to mediation be advised and encouraged to consult with their counsel or to seek independent legal advice if not already represented, the Commission concludes it is permissible for the mediator to draft such ancillary instruments as may be required to fully reflect the parties? resolution of their dispute.
Enduring Ethics Opinion
Opinion #136. Direct Communication with Adverse Party After Litigation Is Complete
Issued by the Professional Ethics Commission
Date Issued: December 1, 1993
Question Presented
Bar counsel has requested an advisory opinion regarding the attorney?s conduct arising from the following set of facts. Attorney X represents a defendant in divorce litigation for over two years. Various post‑judgment matters are subsequently litigated and resolved over an additional period lasting several years. Attorney X continues to represent the defendant. Plaintiff is represented throughout by Attorney Y.
Some ten months after concluding the last piece of litigation, Attorney X intends to write the plaintiff directly instructing plaintiff to follow new arrangements for the payment of child support, with a copy of the letter to Attorney Y, still plaintiff?s last counsel of record.
Would Attorney X violate the Maine Bar Rules, particularly Rule 3.6(f), by communicating directly with the opposing party?
Opinion
During the course of a client?s representation, a lawyer shall not communicate or cause another to communicate on the subject of the representation with a party the lawyer knows to be represented by another lawyer in that matter unless the lawyer has the prior consent of the lawyer representing such other party or is authorized by law to do so.
Rule 3.6(f), Maine Bar Rules.
The pivotal inquiry is whether Attorney X at the time of the questioned communication ?knows? that the plaintiff is represented by another lawyer in the ?matter? at hand. It is difficult to conclude otherwise given the scenario under discussion. The subject of child support payments clearly lies within the scope of a domestic relations matter. Attorney X and Attorney Y had represented their respective clients in the matter over a period lasting several years. Attorney Y remained counsel of record for the plaintiff. In apparent deference to these circumstances, Attorney X intends to copy the correspondence to Attorney Y. Given that history, Attorney X plainly possesses actual knowledge that plaintiff continues to be represented by Attorney Y in the relevant matter. There are no contrary indications. Attorney X must direct the communication to plaintiff?s lawyer, Attorney Y, and not to the opposing client personally.
If plaintiff?s attorney, once contacted, no longer considers him/herself to represent that party, the attorney will certainly so advise Attorney X who may then contact the opposing party without running afoul of Rule 3.6(f).
Enduring Ethics Opinion
Enduring Ethics Opinion #136 [October 2014]
Opinion #135. Membership in a National Network of Participating Lawyers
Issued by the Professional Ethics Commission
Date Issued: November 10, 1993
FACTS
A Maine lawyer has inquired whether the Bar Rules would prevent his joining a national network of lawyers whose practice includes active participation in the foreclosure of mortgages. Prospective members provide a resume and other information regarding their experience in the foreclosure field sufficient to determine whether they meet the Network?s membership criteria. Information supplied by the Network indicates that the Network seeks to identify lawyers who are ?reliable, ethical, financially responsible? and ?who recognize the crucial needs of the mortgage servicing industry. . . .?
The Network is a nonprofit corporation, but charges dues to its members. Members in good standing are listed in a directory in the form of a three‑ring binder, containing information submitted by each of its members in the various states. The directory is provided by the Network to the members and to mortgage companies, free of charge. If a mortgage company needs a foreclosure attorney in another state, the mortgage company could look up the names of the Network members in that state and contact that lawyer directly. In some cases a mortgage company might call the office of the Network and ask for the name of a foreclosure attorney in another state. The Network would provide the names of its member or members in that state, but could also provide the names of qualified attorneys who are not members of the Network. No one is required to engage the services of a member of the Network by reason of being a member of the Network or a user of its directory of foreclosure attorneys. Although members pay annual dues to the Network, the amount of the dues is not related to the number of clients that might contact a member as the result of the member?s affiliation with the Network.
OPINION
For the reasons stated below, the Commission is of the opinion that the arrangement described above is not prohibited by the Maine Bar Rules. More specifically, the Commission is of the opinion that this arrangement is a permissible form of ?directory? advertising and is not a prohibited payment to a third party to recommend the employment of a lawyer.
Throughout the history of the regulation of lawyer conduct, the Bar has had an ambivalent approach to the subject of advertising and solicitation by lawyers. On the one hand, the Bar has consistently prohibited lawyers from paying third parties?variously described as ?runners,? ?touters,? or other ?channelers? of law business?to recommend the employment of lawyers by clients. On the other hand, the Bar, with equal consistency, has tolerated the practice of advertising and solicitation by lawyers through ?law lists? or ?directories.? As the following summary of the history of the Bar?s approach to these practices illustrates, lawyer advertising through ?law lists? or ?directories? has long been recognized as an exception to the rules that governed advertising and solicitation by lawyers. This historical review also demonstrates that the Maine Bar Rule that prohibits lawyers from paying third parties to recommend the employment of lawyers does not encompass the practice of lawyer advertising through the use of ?law lists? or ?directories.?
The History of the Prohibition Against Paying Third Parties to Procure Employment by a Client
The practice of lawyers paying third parties to procure employment by clients has been consistently prohibited by Bar rules since the adoption of the original American Bar Association Canons of Professional Ethics (the ?Canons?) in 1908.[1] As originally adopted, Canon 27 declared that it was ?unprofessional? to solicit business by circulars or advertisements, and that it was ?equally unprofessional to procure business by indirection through touters of any kind. . . .? Canon 28 similarly declared that it was ?disreputable? for a lawyer to pay or to employ ?agents or runners? or other persons in order to influence potential clients to retain a lawyer.
The American Bar Association Model Code of Professional Responsibility, which became effective on January 1, 1970, carried forward a similar prohibition. Like the earlier Canons, original Disciplinary Rule 2‑103(B) of the Model Code provided:
Except as permitted under DR 2‑103(C), a lawyer shall not compensate or give anything of value to a person or organization to recommend or secure his employment by a client, or as a reward for having made a recommendation resulting in employment by a client.[2]
The History of Lawyer Advertising Through ?Law Lists? of Directories?
The history of lawyer advertising and solicitation through the use of ?law lists? or ?directories? is set forth in Henry S. Drinker?s Legal Ethics (1953) (hereinafter ?Drinker?), at 266, as follows:
The Law Lists had their origin some time prior to the adoption of the original Canons in 1908. Several prominent and highly respectable lawyers had compiled for their own use and that of their friends at the bar a list of competent and reliable lawyers in different cities to whom they might refer matters requiring legal service in such localities, which lists were later taken over, in some cases, by their descendants, in others by persons purchasing the right to publish the list. The publishers of these lists instituted the practice of making a charge to the listees for the privilege of being listed either exclusively, or with a limited number of other lawyers in their locality, the amount charged being related to the amount of business normally available in the locality and to the number of other listees therein. The lists selected the lawyers listed as those whom they undertook to recommend as competent and reliable for the service in which the list specialized. Some of the lists bonded their listees and required them to report all items coming to them over the list, being thus able to revise their listing fees from time to time as the business received by the various listees increased.[3]
The practice of lawyer advertising and solicitation through the use of law lists is described in C.W. Wolfram?s Modern Legal Ethics (1986) at 775 as follows:
*Law Lists* are collections of the names of lawyers and other information about them gathered into book form for the use of subscribers. The most famous is the Martindale‑Hubbell multivolume collection, which attempts to include the names and some minimal other information about all admitted lawyers in the United States and, for a minority of selected lawyers, indicates a particularly high ?rating?. Other law lists are keyed to particular areas of legal service, such as personal injury or collection work. All are published by private concerns that make their money by charging selected lawyers a sizable fee for the privilege of advertising information, such as the lawyer?s credentials, representative clients, special abilities, and honors. The size of the fee that the listing company can charge depends upon the amount of business that is generated for listed lawyers by circulation of the publication. In some types of practice, lawyers may receive substantial referral business through advertising in a law list.
When the original Canons were adopted in 1908, a number of law lists were well known and extensively used. Drinker at 266, n. 29. The first mention, however, of law lists in the Canons was in the 1933 amendment to Canon 43, allowing the insertion of a lawyer?s professional card in ?reputable law lists.? Id. at 265. Thereafter, in 1937, Canon 27 was amended to provide for law lists. Id. at 216. That same year a Special Committee on Law Lists was appointed to formulate Rules and Standards governing law lists, on compliance with which the Committee would issue a Certificate of Compliance, thereby making the list a ?reputable? or ?approved? law list in which, under Canon 27, a member of the American Bar Association might properly be listed. Id. at 266.
As Drinker has explained, these amendments to the Canons which permitted the practice of lawyers paying to have themselves advertised and recommended were an obvious exception to the rules prohibiting advertising and solicitation:
The recognition of Law Lists in the Canons, by which a lawyer is permitted to pay a considerable sum for the express purpose of having himself advertised as available and recommended as a lawyer, constituted an obvious exception to the rule of the profession condemning advertising and solicitation.
Drinker at 267.
Consistent with the original Canons, as amended, the 1969 Model Code of Professional Responsibility similarly permitted lawyers to include biographical and other informative data in ?reputable? law lists or legal directories, and conclusively established that status for lists approved by a special committee of the American Bar Association. See original D.R. 2‑102 (A)(6). That degree of regulation of law lists survived until 1977. In 1977, the American Bar Association deleted D.R. 2‑102(A)(6). This abrupt termination of the ABA?s involvement in regulating lawyer advertising through the use of law lists is explained in C.W. Wolfram, Modern Legal Ethics, at 775, as follows:
The involvement of the American Bar Association in regulating law lists ended abruptly in 1977. Under the threat of antitrust suits [citation omitted], the ABA in that year dropped any reference to law lists in the Code as part of the process of amending the provisions on advertising. The 1983 Model Rules similarly contain no regulatory mention of law lists. Those publications, like telephone directories and other publications, are treated today simply as other accepted kinds of lawyer advertising.
Maine Bar Rule 3.9(f)(2)
By Order dated May 1, 1979, effective May 15, 1979, the Supreme Judicial Court of Maine adopted the Maine Code of Professional Responsibility, including Maine Bar Rule 3.9(f)(2). That Rule provides as follows:
A lawyer shall not compensate, or give anything of value to, a person or organization to recommend or secure employment by a client, or as a reward for having made a recommendation resulting in employment by a client, except that a lawyer may pay for public communication permitted by these rules and may pay the usual and reasonable fees or dues charged by a lawyer referral service operated, sponsored, or approved by a bar association.
Like D.R. 2‑103(B) of the ABA Model Code from which it derived, Maine Bar Rule 3.9(f)(2) prohibits a lawyer from paying a person or organization to recommend or secure his employment by a client. Like the Disciplinary Rules of the Model Code, as amended in 1977, the Maine Bar Rules contain no regulatory mention of ?law lists? or ?directories.?
Were it not for the history of the separate treatment accorded ?law lists? by the ABA Canons and Model Code over the years prior to the adoption of the Maine Bar Rule 3.9(f)(2), it could be argued that the prohibition of that Rule is cast in terms that are broad enough to include within its scope a prohibition on lawyer advertising and solicitation through the use of law lists, for inclusion in which lawyers pay dues or a fee. But history shows that the regulators of the Bar have consistently tolerated advertising by lawyers through the use of law lists, and that paid advertising through the use of ?law lists? or ?directories? has been an obvious and long‑standing exception to Bar rules otherwise prohibiting advertising and solicitation. When, in 1979, the Maine Code of Professional Responsibility was adopted, the ABA had already deleted from the Disciplinary Rules all regulatory mention of ?law lists? or ?directories.?[4]
Under these circumstances, the Commission is persuaded that if the drafters of the Maine Bar Rules intended to prohibit the practice of lawyers paying for advertising in law lists and directories?a practice that was not prohibited by the Disciplinary Rules of the ABA Model Code when the Code of Professional Responsibility of the Maine Bar Rules was adopted?they would have done so explicitly, but they did not. On the contrary, as explained in the Reporter?s Notes to Rule 3.9 of the Maine Bar Rules, the drafters decided not to replace ?the now discredited prohibition of professional advertising with a limited list of acceptable communications,? and instead drafted a Rule that ?recognizes the right to advertise in general and forbids only those practices that would be regarded as improper in virtually any context. . . .? See Reporter?s Notes to Maine Bar Rule 3.9.
For the reasons stated above, the Commission is of the opinion that the prohibition of Maine Bar Rule 3.9(f)(2) does not extend to lawyer advertising through the use of ?law lists? or ?directories,? even though lawyers pay a fee or dues to advertise through such publications. More specifically, based on the historical developments described above, the Commission is of the opinion that paid lawyer advertising, through the use of ?law lists? or ?directories,? constitutes payment for ?public communication permitted by these rules? within the meaning of Maine Bar Rule 3.9(f)(2). Accordingly, a lawyer?s participation in the network‑directory arrangement at issue here does not violate Maine Bar Rule 3.9(f)(2), and is permissible under the Maine Bar Rules, provided that a lawyer?s directory information does not violate any other provisions of Maine Bar Rule 3.9 governing lawyer publicity, advertising, and solicitation, and provided that the Network, if it receives requests for the names and directory information of Network lawyers, provides the requesting party the names and directory information of those lawyers, and does not otherwise recommend the employment of those lawyers. In closing, in the interest of full disclosure, the Commission wishes to note that all of its members are listed in Martindale‑Hubbell law directory, and several of its members are listed in other law directories.
DISSENT
Two members of the Commission are unable to agree with the majority of the Commission that law lists should be allowed as an unwritten exception to the prohibition of Bar Rule 3.9(f)(2) on compensating a person to recommend an attorney?s employment. We therefore dissent from that opinion.
The majority opinion appears to concede that paying the publisher of a law list to recommend an attorney?s employment violates the literal wording of the rule. The opinion takes the view, however, that if an abusive practice has existed for a long enough period of time, it may be permitted to continue.
The obvious purpose of Rule 3.9(f)(2) is to prevent lawyers from purchasing endorsements of their services. Although the rule may have been drafted with paid runners in mind, it is clearly broad enough to encompass the membership program established by the Foreclosure Network.
The Network indorses individual lawyers in at least two ways. It screens applicants for membership through an evaluation of their experience and competency in the foreclosure field. Therefore, whenever the Foreclosure Network sends its exclusive membership list to a lending institution, it is, in effect, recommending the employment of its local members for a consideration paid in the form of its membership fee. Thus it is unlike Martindale‑Hubbell and legal directories which publish in a nonselective manner the names of all attorneys who are active in a particular area of practice regardless of whether they have purchased the directory or paid for a display advertisement.[5]
The second method by which the Foreclosure Network provides endorsements is more direct. When it receives inquiries from lending institutions as to whom they should hire to undertake a particular foreclosure proceeding, it recommends a member of the Network in the area where the foreclosure work is to be performed. In effect, the Network explicitly recommends the employment of an attorney from its exclusive membership lists.[6]
An endorsement would not violate the rule unless it was given for consideration. Thus, if the Foreclosure Network were to circulate its list of attorneys considered to be qualified in the foreclosure field to prospective clients without exacting payment from the attorneys whose names appear on the list in the form of a membership fee, the rule would not be violated.[7]In the present instance, however, even the most highly qualified practitioners in the foreclosure field would not be listed nor would their names be provided in response to inquiries from prospective clients unless they had paid the specified membership ?dues? for the privilege. It is, therefore, apparent that the Network?s endorsement is available at a price and will not be given solely on the basis of the merit of the attorneys who are active in the foreclosure field.
Even though the Foreclosure Network?s membership plan constitutes a form of endorsement of its members, the circulation of its membership list might nevertheless be considered to be a ?public communication? and therefore permissible as an exception to the bar imposed by Rule 3.9(f)(2). Section 3.9(a) defines a ?public communication? as ?any communication through mass media, direct mail, or other means including professional cards, announcements, letterheads, office signs, and similar accoutrements of a law office.?
It could be argued that, since the membership list is circulated to subscribers and would presumably be available to any member of the public who wanted to see it, it ought to be viewed as a ?public communication? within the meaning of Rule 3.9(f)(2). Were it so, however, the rule itself would be swallowed by the exception.
Presumably everyone would agree that if an attorney paid a hospital attendant to hand his business card to accident victims, the rule would be violated. It is doubtful that anyone would argue that the result should be different even if the hospital attendant were to walk through the emergency room wearing a blown‑up version of the attorney?s card as a sandwich board even though this would appear to be a ?public communication.? Similarly, a paid letter from a prominent citizen indorsing the quality of a lawyer?s legal services would not be immunized from the application of the rule simply because it was published as a newspaper advertisement.
In the definition of a ?public communication? found in Section 3.9(a), the examples given include business cards, letterheads, and office signs. Each of the forms of public communication identified is an obvious form of advertising originated by the attorney in question. If an ad were presented on television or radio, through a paid announcer, the fact that a message was a paid advertisement initiated by the attorney himself would still be apparent. The ?public communication? exception should therefore be limited to circumstances in which it is apparent that, like a business card, the communication has been initiated by the lawyer himself as a form of advertising and should not be read to include endorsements given by others.
The distinction suggested is based on the same policy that underlies Rule 3.9(d). That rule bars lawyers from compensating a media representative for providing him with publicity in the guise of a news item. Similarly, the suggested interpretation of the term ?public communication would exclude paid professional publicity masquerading as a disinterested endorsement. In the present case, the Foreclosure Network has created the misleading appearance that its recommendation of attorneys who are expert in foreclosing mortgages is untainted by monetary considerations when, in fact, only those attorneys who have paid the required membership fee are eligible for inclusion on their referral list.
The historical analysis provided in the majority opinion purporting to show that ?law lists? have always been considered as a permitted form of advertising is somewhat misleading. In the first place, no attempt has been made to distinguish between law lists such as Martindale‑Hubbell which would not offend Rule 3.9(f)(2) and those which purport to offer disinterested lists of outstanding attorneys in various categories which are in reality limited to those who will pay a membership fee. It does little to advance the argument to point out that law lists like Martindale‑Hubbell have been around for many years since such lists do not require payment by the lawyers who are being rated.
In 1979, when the Maine Supreme Court first adopted the Maine Bar Rules, the version of the A.B.A.?s Model Code of Professional Responsibility which had been adopted by the Maine Bar Association prohibited advertising except for several stated exceptions. These included:
(6) A listing in a reputable law list or legal directory giving brief biographical and other informative data. A law list or directory is not reputable if its management or contents are likely to be misleading or injurious to the public. . . . A law list is conclusively established to be reputable if it is certified by the American Bar Association as being in compliance with its rules and standards. . . . *Id*., 2‑102 (A)(6).
The majority opinion concludes that, by abrogating this language, the Maine Court intended to continue it in existence. Nothing in the Reporter?s Notes suggests such a result. On the contrary, the Notes state that:
Rule 3.9 is a new approach to the issue of advertising by lawyers. Rather than replace the now discredited prohibition of professional advertising with a limited list of acceptable communications, the new rule recognizes the right to advertise in general and forbids only those practices that would be regarded as improper in virtually any context. . . .
Since the new Maine Rule 3.9, which had no precedent in other jurisdictions, swept away the structure of the previous rules which allowed lawyer advertising only in limited circumstances, it is incongruous to suggest that any part of the former rule, such as the limited authorization for ?reputable? law lists was to remain. A conclusion more in keeping with the wording of the new rule is that those law lists which consisted of straightforward advertising would henceforth be permitted while those which contained endorsements which appeared to be disinterested but were actually given for consideration would be barred by Rule 3.9(f)(2).
If, as the majority assumes, the Court did not mean to deauthorize the use of ?reputable? law lists, one may properly inquire whether it also intended to retain the use of the certification process by which the A.B.A. would determine that certain law lists are ?reputable?. If not, how would a determination be made that the Foreclosure Networks law list was ?reputable? and therefore permissible? The former rule also limited the information which an attorney could publish in an approved law list. The majority opinion does not consider whether these limitations still apply.
Finally, the majority opinion has not adequately addressed the issues presented by inquiries received over the telephone by the Foreclosure Network from commercial lenders as to whom they should employ in a given jurisdiction. The majority states that a response in such a case which identifies a Foreclosure Network member in a particular locale would not violate Rule 3.9(f)(2) if it ?does not otherwise recommend employment of those lawyers.? It is unrealistic in the extreme to construe the Network?s response to such an inquiry as anything but a recommendation of employment of the member in question. It is also difficult to see how such a private recommendation could be properly excepted from the application of Rule 3.9(f)(2) as a ?public communication.?
FOOTNOTES
[1] Those Canons were adopted by the American Bar Association at its Thirty‑First Annual Meeting at Seattle, Washington, on August 27, 1908. The Canons were applied, as amended, until the adoption of the American Bar Association Code of Professional Responsibility on August 12, 1969, effective January 1, 1970.
[2] The prohibition of Disciplinary Rule 2‑103(B) remained essentially unchanged from the date of its adoption. In August, 1983, the American Bar Association replaced the entire Model Code with the Model Rules of Professional Conduct. A similar prohibition is now contained in Rule 7.2(c) of the Model Rules.
[3] The extent of the practice of lawyer advertising/solicitation through the use of law lists is illustrated in James W. Hurst?s The Growth of American Law (1950), wherein it is noted that ?[l]aw list business grew to sizeable proportions. In 1926 one list handled $100,000,000 of forwarded claims, another $40,000,000, another $10,000,000; in 1938 about 200 lists were published in the United States, and they received about $15,000,000 from lawyers who inserted notices in their columns.? Id. at 320.
[4] As noted above, the ABA Model Rules of Professional Conduct, similarly contain no regulatory mention of ?law lists,? and treats those publications as other forms of accepted attorney advertising.
[5] Whether an attorney is required to pay a fee to obtain a listing is irrelevant as long as the same opportunity is available to all other lawyers and the publisher does not imply any endorsement of the attorneys who are listed. However, it is clear that willingness to pay a fee to the Foreclosure Network is not sufficient to entitle one to membership since the Network reserves the right to reject applicants who are not deemed ?reliable?, ?financially responsible?, or who fail to ?recognize the crucial needs of the mortgage servicing industry.?
[6] It is disingenuous of the majority to suggest that, when asked directly for a referral, the Network would ever recommend a non‑member to the caller.
[7] If the Network?s principal purpose was, in fact, merely to provide information to prospective consumers of legal services in the foreclosure field, it could presumably finance the development and circulation of its list of qualified practitioners by charging fees to the lending institutions who received the list rather than by exacting dues from the attorneys whose names were included.
Enduring Ethics Opinion
Opinion #134. Supervisory Liability for Breach of Confidentiality
Issued by the Professional Ethics Commission
Date Issued: September 21, 1993
Bar Counsel has asked the Commission to render an opinion with respect to the following factual situation:
FACTS
Attorney A is a partner in the firm of A, B, C, & D. The firm employs various clerical help in connection with its practice of law. In connection with the preparation of some documents for Attorney A on behalf of Client W, A?s secretary Z becomes privy to certain confidences of W. Z proceeds to share confidential information with persons outside the firm.
QUESTION
Does Z?s disclosure of confidential information subject A or her partners to discipline for violations of the Bar Rules?
DISCUSSION
The imposition of discipline for violations of the Bar Rules is necessarily a sanction against lawyers, and not their employees. However, a breach by A?s employee of the lawyer?s obligation to maintain confidences does not necessarily subject A to discipline under the Bar Rules. Rule 3.6(h)(2) requires a lawyer to:
. . . exercise reasonable care to prevent . . . employees . . . and others whose services are utilized by the lawyer from improperly disclosing or using confidences or secrets of a client.
Rule 3.6(h)(2) makes clear that lawyers have a responsibility to adequately train, monitor and discipline their non‑professional staff in such a manner as to guard against breaches by non‑lawyer staff. Failure to take reasonable steps to provide adequate training, to monitor performance and to apply discipline for the purpose of enforcing adherence to ethical standards is a proper grounds for concluding that the lawyer has violated Rule 3.6(h)(2) and for attributing the employee?s breach of these standards to the attorney and to those members of the firm who have supervisory responsibility for the employee. To hold otherwise would be to cut a great roadway through the Rule. Upon the facts set forth in the inquiry, there is no suggestion that Attorney A failed to exercise reasonable care to prevent improper disclosure by secretary Z.
Enduring Ethics Opinion
Opinion #133. Lawyer Referral Service Fee Remittances and Questions Pertaining Thereto
Issued by the Professional Ethics Commission
Date Issued: June 18, 1993
QUESTION
Bar Counsel, at the request of the Maine State Bar Association, has requested an advisory opinion concerning two questions relating to changes the Bar Association is considering in connection with its Lawyer Referral and Information Services Program. The questions presented are as follows:
Question 1
Is it proper for a lawyer referral service to ask a referral service attorney to disclose fees charged to person referred by service in order to determine usual and reasonable fees or dues paid by attorney to fund service?
Question 2
Is it proper for a member of a referral service to remit a percentage of fee earned from client referred by service? Said remittance would be used to fund service.
OPINION
In Opinion No. 99, issued on September 6, 1989, the Commission opined that the Maine Bar Rules would not be violated by Bar Association Referral Service requirements that a client referred to a lawyer by the Referral Service pay a service fee of $15.00 to the Referral Service and that the lawyer to whom the client was referred by the Referral Service contribute $15.00 to the Referral Service to help fund that Referral Service. In that Opinion, the Commission concluded that the first fee, paid by the referred client, was not an impermissible sharing of legal fees by the referral lawyer; and that the second fee, paid by the referral lawyer, was permissible under Maine Bar Rule 3.9(f)(2) (permitting the payment by a lawyer of ?usual and reasonable fees? charged by a bar association referral service).
For the reasons stated below, the Commission is of the opinion that both of the changes now proposed by the Bar Association?s Referral Service, as indicated by the two questions here presented, are permissible under the Maine Bar Rules.
The first question presupposes that instead of establishing a fixed referral charge for all cases, the Bar Association will adopt a sliding scale of referral charges in specific dollar amounts related to the total fee charged to the client by the referral attorney [example: referral fees of $X, $Y or $Z, etc., based on the amount of the fee charged to the client by the referral lawyer in any particular case]. In order to determine the amount of the referral service fee that would apply to any such case, the total fee would necessarily have to be disclosed to the Referral Service, or be disclosed at least to the extent of indicating the applicable dollar range within which the fee fell.
It is the opinion of the Commission that such limited disclosure of fees does not violate Maine Bar Rule 3.6(l)(1) (which requires the preservation of client ?confidences? and ?secrets?) because a sliding scale of referral fees of the type described above is a ?usual and reasonable? basis for establishing referral fees. That such an arrangement is a ?usual and reasonable? way of funding a bar association referral service, within the meaning of Maine Bar Rule 3.9(f)(2), is evident from a 1990 survey by the American Bar Association?s Standing Committee on Lawyer Referral and Information Services. See A.B.A. Characteristics of Lawyer Referral Programs 1990 Survey Results. That survey notes that of 97 bar association referral services surveyed, a significant number of those surveyed require referral lawyers to pay the referral service a portion or percentage of his/her earned fee in a referred matter. Accordingly, referral fees based on such a sliding scale are permitted by Maine Bar Rule 3.9(f)(2) (allowing payment of ?usual and reasonable? fees charged by a bar association lawyer referral service).
Since the limited disclosure of fees at issue here is necessary to determine the amount of the referral fees permitted by Maine Bar Rule 3.9(f)(2), the Commission construes that Rule as controlling the scope of Rule 3.6(1)(l) under the circumstances presented. As so construed, the Bar Rules do not prohibit disclosure to the Bar Association Referral Service of the amount of the fee charged to a client by a referral attorney for the purposes of determining the amount of the Referral Service?s referral charge. In so opining, the Commission assumes that as a matter of institutional policy, the Bar Association Referral Service maintains confidentiality of records of which clients have been referred to which attorneys, and that the Referral Service would similarly maintain confidentiality of the amounts of the fees that have been charged to individual clients by referral lawyers.[1]
With regard to the second question presented, the Commission is of the view that it would be permissible for the Bar Association Referral Service, for the purpose of funding the Referral Service, to charge referral lawyers a percentage of the fee earned by the referral lawyer from the referred client. That manner of determining referral fees would appear to be ?usual and reasonable? within the meaning of Maine Bar Rule 3.9(f)(2). See A.B.A. Survey, supra. The Commission also notes that the American Bar Association Committee on Professional Ethics has twice opined that a bar association referral service may require referral attorneys to assist in financing such a referral service either by payment of a flat fee or by a sliding scale based on the fees derived by the referral lawyers from clients referred to them, whether that scale is based on fixed charges or on a reasonable percentage of fees collected by referral lawyers from referred clients. A.B.A. Formal Opinion No. 291 (August 1, 1956); A.B.A. Informal Opinion No. 1076 (October 8, 1968).
In sum, for the reasons stated above, it is the opinion of the Commission that the proposed changes in the Maine Bar Association Lawyer Referral Service Program as indicated in the two questions presented here are permissible under the Maine Bar Rules.
FOOTNOTE
[1] The Commission also assumes that these arrangements are disclosed by the Referral Service to prospective clients.
Enduring Ethics Opinion
Opinion #132. Deletion from Firm Letterhead of Name of Attorney Who Has Been Suspended from the Practice of Law
Issued by the Professional Ethics Commission
Date Issued: April 12, 1993
Question
The Professional Ethics Commission has been asked by Bar Counsel whether the Bar Rules require deletion of the name of an attorney who has been suspended from practice from the name and letterhead of the law firm with which the attorney is affiliated.
Answer
The Commission had concluded that the Bar Rule 3.9(b) requires dropping the name of the suspended attorney from all ?public communications? of the law firm with which he is affiliated, one of which is the firm letterhead, until such time as the attorney has been authorized to resume the practice of law.
Opinion
Unlike the former ABA Model Code of Professional Responsibility and the present Model Rules of Professional Conduct, the Maine Bar Rules contain no provision directly addressing the content of a law firm name. The Model Code of Professional Responsibility contained fairly detailed instructions in DR2‑102(b), one of which prohibited practice under a firm name containing names ?other than those of one or more of the lawyers in the firm?, subject to an exception permitting names of ?deceased or retired members of the firm?, if otherwise lawful. The Model Rules, somewhat closer to the Maine Rules, prohibit the use of any law firm name that would violate the general ban on false or misleading public communications. Model Rule 7.5(a). Like the Model Code, however, Model Rule 7.5(c) expressly prohibits continued use in a firm name of the name of the lawyer who has been elected or appointed to public office unless the simultaneous practice of law is permissible.
Maine Bar Rule 3.9(a) prohibits in general terms the use of any form of public communication containing ?a false, fraudulent, misleading, or deceptive statement or claim.? The rule explains that the term ?public communication? includes letterheads and therefore the name of the firm. Rule 3.9(b) defines the prohibited statements as including, among others, any statement that:
(2) omits to state any material fact necessary to make the statement, in light of all circumstances, not misleading; (3) is intended or is likely to create an unjustified expectation; **** (5) is intended, or is likely to convey the impression that the lawyer is in a position to influence improperly any court, tribunal, or other public body or official; or (6) contains a representation or implication that is likely to cause an ordinary prudent person to misunderstand. . . .
Opinion 13 of the Grievance Commission, this Commission?s forerunner in issuing advisory opinions interpreting the Code of Professional Responsibility, explained the reasons why, and circumstances under which, a violation of Rule 3.9 could arise out of retaining the name of a lawyer who had been appointed or elected to public office in a firm name.
In the opinion of the Commission continued use of the name of a lawyer suspended from the practice of law is likewise a violation of Rule 3.9. Unlike use of the name of a public official, there seems little danger that prospective clients would think the firm had influence in high places if it continues use of a suspended lawyer?s name. There is, however, a risk that the general public will perceive the disciplinary process as somewhat lacking in meaning, or in force, if appearances suggest that a suspended lawyer continues to participate in the work, the profits, and the prestige of a law firm, as if nothing has happened. There is also a risk that clients and potential clients will think that the suspended lawyer continues to share responsibility for the debts of the firm and for its malpractice, if any. Such continued use of the lawyer?s name therefore violates Rule 3.9(b)(2). It seems quite clear that continued use of the name contains at least an ?implication that is likely to cause an ordinary prudent person to misunderstand?. This alone would make continued use of the name a violation. In the commission?s opinion, that would be the case if the suspended lawyer?s name appeared anywhere in a public communication of the firm in a manner that, from its appearance or from nondisclosure, suggests that the suspended lawyer enjoys a relationship with the firm comparable to that of a retired partner.
Enduring Ethics Opinion
Enduring Ethics Opinion #132 [August 2012]
Opinion #131. Representing Clients in Probate Court Where Partner is Register of Probate
Issued by the Professional Ethics Commission
Date Issued: March 26, 1993
Facts
Attorneys A and B practice law together in a professional corporation. At the request of the Department of Human Services Attorney A has in the past acted as a guardian or attorney for ?clients? of the Department in proceedings before the Probate Court under Title 18‑A § § 5‑401 through 5‑431. From time to time Attorney A has been appointed guardian ad litem by the probate judge in such proceedings.
Attorney B has now been elected Register of the Probate Court.
Question
May Attorney A continue to practice before the Probate Court on behalf of such clients in the matters so described?
Opinion
Bar Rule 3.4(g) states that: ?a lawyer shall not accept private employment in a matter upon the merits of which the lawyer has acted in a judicial capacity.? In Opinion No. 80 (1987) we had occasion to consider the application of this rule to a law firm appearing before a Probate Judge who was a member of the firm. In that opinion we concluded that the law firm could not appear before the Judge, even on matters such as uncontested motions for continuance, the appointment of a lawyer as a special administrator of an estate, or petitions for transfer to another jurisdiction, since such matters constituted rulings ?upon the merits in the matter.?
In this case, however, we are satisfied that the Register of Probate, unlike the Probate Judge, has no authority to act ?upon the merits? on any of the matters set forth in the factual statement. Our review of the statutes does not disclose any power in the Register of Probate to perform any function other than clerical and ministerial functions in such proceedings. Since the Register cannot act on the merits on such matters, it is our opinion that Attorney A may continue to represent Department clients in the above described proceedings before the Probate Court.
The Commission understands that on occasion some Probate Judges may consult with Registers of Probate regarding the merits of pending matters. The Register of Probate should be aware of Bar Rule 3.2(f)(4) which prohibits conduct ?prejudicial to the administration of justice.? In light of that Rule, the Commission would be concerned if the Register were to ?consult? with the Probate Judge about a pending matter involving the Register?s partner. We assume, however, that the Register will comport himself to avoid implicating Rule 3.2(f)(4) and creating any appearance of impropriety.
Enduring Ethics Opinion
Opinion #130. Vicarious Disqualification for Members of Special Assistant District Attorney's Law Firm
Issued by the Professional Ethics Commission
Date Issued: February 3, 1993
Facts
The District Attorney of X County had asked Law Firm A to participate in the following program. The District Attorney will appoint associates of Law Firm A as ?Special Assistants? to the District Attorney on a case‑by‑case basis. Each Special Assistant will handle only the criminal case(s) assigned to him or her and will have the duties of preparing the case and conducting the trial. Although it has been suggested that the Special Assistant will have no prosecutorial discretion,[1] we interpret this as a statement that the Special Assistant will not engage in the pre‑trial plea‑bargaining process. Neither will the Special Assistants have any participation in the non‑criminal aspects of the District Attorney?s jurisdiction.
Law Firm A represents one or more municipalities in the County of X and it is possible that these municipalities may have matters which come before the County Commissioners.
Question
Under these circumstances, is Law Firm A disqualified from representing client municipalities before the County Commissioners?
Answer
No.
Discussion
The statutory authority for appointment of assistant district attorneys makes no distinction between ?special? and ordinary assistant district attorneys. The duties of assistant district attorneys are set forth in 30‑A MRSA Sec. 272. They include the obligation to ?assist the District Attorney in the ordinary duties of that office.
30‑A MRSA Sec. 282 requires that the District Attorneys appear for the counties in any case in which ?. . . official acts of the called into question . . .? Although the statute authorizes the County Commissioners to ?employ other counsel,? the Commissioners rely as a practical matter upon the office of the District Attorney and its staff for advice in the discharge of their duties.
This Commission and the Grievance Commission have had several occasions to apply the Bar Rules in the context of various relationships between District Attorneys and their assistants and members of the private bar.[2]
Although the provisions of Bar Rules 3.4(a) and 3.4(b) extend the disqualification of a lawyer to all members of a lawyer?s firm, Rule 3.4(k), in order for a conflict to arise upon the facts posited here, it would be necessary for this Commission to find that the provisions of Rule 3.4(k) apply to common employment in a government agency such as a District Attorney?s Office. The Commission is of the opinion that Rule 3.4(k) does not apply to common employment in a government agency. Two sources of authority compel the Commission to reach this conclusion. First, the Reporter?s Note accompanying the adoption of the Bar Rule states as much, without elaboration.[3] Second, this view is consistent with the opinion of the Law Court in Superintendent of Insurance v. Attorney General, 558 A.2d 1197 (Me. 1989). Although the Law Court did not expressly cite Rule 3.4(k), the conclusion reached in that case implicitly and necessarily holds that subdivision (k) of Rule 3.4 has no applicability to the Attorney General?s Office.
Since, under this analysis, the associate of Law Firm A cannot be said to automatically represent every other ?client? of the District Attorney?s Office, except to the extent that the associate might be requested by the District Attorney to participate in advising the County Commissioners, no conflict of interest would appear.
In rendering this opinion we recognize that this conclusion is inconsistent with the opinion rendered in Opinion No. 49.
Dissent
One member of the Commission dissents from this opinion, and would hold that Rule 3.4(k) applies to public agencies; that Superintendent of Insurance v. Attorney General, supra is an unique case based in significant part upon the peculiar constitutional status of the Attorney General; and that the role of the District Attorney?s Office in advising the County Commissioners in a quasi‑judicial proceeding constitutes acting ?in a judicial capacity? within the meaning of Rule 3.4(g) and that, unlike the conflict situations covered by 3.4(b) and (c), the 3.4(g) conflict cannot be waived.
Footnotes
[1] We think it is impossible for an attorney to be trying cases on behalf of the state and avoid engaging in some plea‑bargaining in the course of trial.
[2] Opinion No. 36, Assistant District Attorney and partner of his/her spouse; Opinion No. 39, Assistant District Attorney and his/her law partner; Opinion No. 42, Assistant District Attorney and his/her spouse; Opinion No. 49, Assistant District Attorney as member of firm representing Towns; Opinion No. 65, District Attorney and his/her sibling‑in‑law; Opinion No. 70, Assistant District Attorney and his/her spouse.
[3] ?As used in this rule the term `lawyer affiliated with him or his firm? does not include . . . common employment in a government agency . . .?
Enduring Ethics Opinion
Opinion #129. Lawyers Raising Funds for Judicial Education Committee On Behalf of Maine Bar Foundation
Issued by the Professional Ethics Commission
Date Issued: December 31, 1992
Question
The Maine Bar Foundation has established a Judicial Education Committee for the purpose of raising funds from the private sector to enable the Maine Bar Foundation to make an annual grant to the Judicial Department for judicial education. The Chairman of the Judicial Education Committee has requested an advisory opinion under Rule 11(c)(2) of the Maine Bar Rules as to whether there is any ethical problem for lawyers who participate in this fundraising effort.
The Maine Bar Foundation proposes to solicit funds from private foundations, charitable trusts, business concerns, lawyers and others in order to make an annual grant to the Judicial Department of the State of Maine for judicial education. The goal for the first year is $45,000. The funds would be used to defray the expense of providing and attending programs of judicial education for the members of Maine?s judiciary, such programs to be primarily in‑state but not necessarily so restricted. The time, place and content of the programs would be determined and governed by a committee of the judiciary with the sole requirement imposed by the Foundation being that some portion of the program be devoted to poverty law. No member of the judiciary will participate in any way in the solicitation of funds. The solicitation will be directed and performed by the Maine Bar Foundation Judicial Education Committee, the members of which include practicing lawyers along with community and business leaders. It is anticipated that the funds will be made available by the Maine Bar Foundation to the Judicial Department as a single grant for a one‑year period.
There will be no publication or public acknowledgment of contributions to the judicial education fund of the Maine Bar Foundation, nor will the Maine Bar Foundation or its Judicial Education Committee inform the Judicial Department of the identity of the donors. All donors will be so advised.
The questions presented are whether under the Code of Professional Responsibility, members of the Maine Bar are subject to any restrictions in (1) participating in the work of the Maine Bar Foundation Judicial Education Committee; (2) soliciting funds for the Maine Bar Foundation Judicial Education project from other lawyers or from business concerns, private foundations, etc.; or (3) contributing to the Maine Bar Foundation Judicial Education fund.
Opinion
It is the opinion of the Commission that lawyers are prohibited by Rule 3.7(h)(1) of the Maine Bar Rules (1) from making contributions to the Maine Bar Foundation Judicial Education Fund (the ?Fund?) under the circumstances described in this inquiry, and (2) from soliciting contributions from other lawyers or from other persons, business concerns, private foundations, etc. for the Fund under the circumstances described in this inquiry. More specifically, the Commission is of the opinion that under the circumstances described in this inquiry, lawyers contributing to the Fund would be ?indirectly? making contributions to judges within the meaning and prohibition of Rule 3.7(h)(1).
Rule 3.7(h)(1) of the Maine Bar Rules[1] provides as follows:
A lawyer shall not directly or indirectly give or lend anything of value to a judge, official, or employee of a tribunal unless the personal or family relationship between the lawyer and the judge, official, or employee is such that such gifts are customarily given and exchanged. This paragraph does not preclude contributions to election campaigns of public officers.
- The prohibition of Rule 3.7(h)(1) extends to gifts that are made ?indirectly? to judges.
On its face, Rule 3.7(h)(1) prohibits lawyers from ?indirectly? as well as ?directly? giving anything of value to a judge, except as permitted by that Rule. Under the proposal described in this inquiry, lawyers would not be directly giving anything of value to judges. All contributions would be made to the Fund, and the Maine Bar Foundation would make an annual grant from the Fund to the Judicial Department and not to the individual judges. Although contributions to the Fund do not constitute ?direct? gifts to judges, they nonetheless indirectly ultimately accrue to the benefit of judges through the conduits of the Maine Bar Foundation and the Judicial Department. Given the broad sweep of Rule 3.7(h)(1), which expressly extends to ?indirect? as well as ?direct? gifts to judges, the Commission concludes that contributions by lawyers to the Fund would be prohibited by that Rule.
- The prohibition of Rule 3.7(h)(1) applies even though contributions are not made for the purposes of influencing, or are not likely to influence, the judgment of a tribunal.
Although it could be argued that Rule 3.7(h)(1) should be construed so as to prohibit only such gifts that are made for the purpose of influencing, or are likely to influence, the judgment of a tribunal, neither the language of that Rule nor its history supports such a construction.
On its face, Rule 3.7(h)(1) contains no language that limits its ban only to such gifts that are made with improper motive or that might adversely affect the administration of justice.[2]
Nor does the history of Rule 3.7(h)(1) suggest that the extent of its prohibition should be limited in that respect. Rule 3.7(h)(1) was derived from DR 7‑110(A) of the A.B.A. Model Code of Professional Responsibility. See Reporter?s Notes to Rule 3.7(h). As originally adopted by the American Bar Association as part of the Model Code on August 12, 1969, effective January 1, 1970, DR 7‑110(A) provided as follows:
A lawyer shall not give or lend any thing of value to a judge, official, or employee of a tribunal.
Prior to its adoption in that form, the preliminary draft of DR 7‑110(A) ended with the following limiting clause: ?if the gift or loan is for the purpose of influencing, or is likely to influence, his judgment or obtaining some benefit for the lawyer or the lawyer?s client.? That clause, however, was omitted from the final draft of DR 7‑110(A). See A.B.A. Annotated Code of Professional Responsibility (1979) at 375. The omission of that limiting clause indicates that the prohibition of DR 7‑110(A), as originally adopted, extended to gifts from lawyers to judges, regardless of motive or tendency to influence a tribunal, subject only to such exceptions as are contained within that Disciplinary Rule itself. See also In re Corboy, 528 N.E.2d 694, 698 (Ill. 1988) (eleemosynary motives are irrelevant under Illinois? version of DR 7‑110(A)).
Like DR 7‑110(A), Rule 3.7(h)(1) contains no language that would allow gifts from lawyers to judges provided such gifts are not intended to, or are not likely to, influence a tribunal. Indeed, if anything, the prohibition of Rule 3.7(h)(1) is broader than that of DR 7‑110(A) because the former, unlike the latter, expressly extends to gifts that are made ?indirectly? as well as to gifts that are made ?directly.?
In light of the broad scope of the prohibition of Rule 3.7(h)(1), it is immaterial that provision is made for assuring the anonymity of contributions to the Fund as described in this inquiry. Consequently, the Commission does not address the question of whether such anonymity could indeed be assured as a matter of fact.
- Rule 3.7(h)(1) prohibits lawyer contributions to the Fund notwithstanding the 1974 amendment of DR 7‑110(A).
Subsequent to its adoption by the American Bar Association, DR 7‑110 (A) was amended in February, 1974 in two respects in order to bring that Disciplinary Rule into conformity with the then‑new Code of Judicial Conduct.[3]
That 1974 amendment added two exceptions to the prohibition of DR 7‑110(A). One of those exceptions permitted lawyers to make gifts to judges ?as permitted by Section C(4) of Canon 5 of the Code of Judicial Conduct.? The other exception added by that amendment permitted lawyers to make contributions ?to the campaign fund of a candidate for judicial office in conformity with Section B(2) under Canon 7 of the Code of Judicial Conduct.? As thus amended, DR 7‑110(A) provided as follows (amending language underlined):
A lawyer shall not give or lend any thing of value to a judge, official, or employee of a tribunal except as permitted by Section C(4) of Canon 5 of the Code of Judicial Conduct, but a lawyer may make a contribution to the campaign fund of a candidate for judicial office in conformity with Section B(2) under Canon 7 of the Code of Judicial Conduct.
See A.B.A. Annotated Code of Professional Responsibility (1979) at 375. Section C(4) of Canon 5 of the Maine Code of Judicial Conduct permits judges to accept certain ?gifts,? including ?an invitation to the judge and his spouse to attend a bar‑related function or activity devoted to the improvement of the law, the legal system, or the administration of justice.? Section C(4)(a) of Canon 5, Maine Code of Judicial Conduct.
Although the Reporter?s Notes to Rule 3.7(h) state that Rule 3.7(h) is a ?restatement of DR 7‑110? and that ?[n]o substantive change is intended,? Rule 3.7(h)(1) as adopted by the Supreme Judicial Court, by Order dated May 1, 1979, effective May 15, 1979, did not include the exception, ?except as permitted by Section C(4) of Canon 5 of the Code of Judicial Conduct,? which had been added to DR 7‑110(A) by the above‑referenced February, 1974 amendment to that Disciplinary Rule. Rather, the drafters of Rule 3.7(h) (1) incorporated therein a novel exception permitting gifts from lawyers where ?the personal or family relationship between the lawyer and the judge, official or employee is such that gifts are customarily given and exchanged.? Under these circumstances, notwithstanding the Reporter?s Notes to Rule 3.7(h), it is evident that Rule 3.7(h)(1), as it was originally adopted and still reads, differs significantly from DR 7‑110(A), as that Disciplinary Rule read at the time when Rule 3.7(h)(1) was adopted. Specifically, unlike DR 7‑110(A) which was amended in February, 1974 to bring that Disciplinary Rule into conformity with the Code of Judicial Conduct, Rule 3.7(h)(1) contains no such conforming provision.[4]
Had the drafters of Rule 3.7(h)(1) incorporated an exception to that Rule in order to bring it into conformity with the Code of Judicial Conduct, in a manner consistent with the February, 1974 amendment to DR 7‑110(A), by incorporating the provisions of Section C(4) of Canon 5 of the Code of Judicial Conduct, Rule 3.7(h)(1) would permit lawyers to make ?gifts? to judges under certain circumstances, including ?an invitation to the judge and his spouse to attend a bar‑related function or activity devoted to the improvement of the law, the legal system, or the administration of justice.? See Section C(4)(a) of Canon 5 of the Maine Code of Judicial Conduct. Since, however, Rule 3.7(h)(1) does not incorporate Section C(4) of Canon 5 of the Code of Judicial Conduct, the circumstances under which contributions by lawyers to the Fund would be permitted under such a conforming provision, like the conforming provision of DR 7‑110(A) as amended, are beyond the scope of the present inquiry.[5]
In sum, for the reasons stated above, the Commission is of the opinion that the prohibition of Rule 3.7(h)(1) is so broadly framed that it prohibits lawyers from making contributions to the Fund under the circumstances described in this inquiry. Although the proposal to solicit contributions to fund judicial education might promote improvement in the administration of justice, the Commission is also mindful of the significant policy objective of Rule 3.7(h)(1), viz., the preservation of an independent and impartial judiciary. See In re Corboy, 528 N.E.2d 694, 697 (Ill. 1988). Given the plain language of Rule 3.7(h)(1), its legislative history, and the important policy objective of that Rule, the Commission is not inclined to construe that Rule to carve out an exception to permit indirect lawyer contributions to the judiciary in the manner described in this inquiry.
Consistent with the foregoing, the Commission further concludes that lawyers should refrain from soliciting contributions to the Fund from other lawyers or from other persons, business concerns, private foundations, etc. under the circumstances described in this inquiry. See Rule 3.2(f)(1) of the Maine Bar Rules (prohibiting indirect violation of any provision of the Maine Bar Rules, including Rule 3.7(h)(1)).
Finally, the Commission is unable definitively to answer the remaining question as to whether, apart from engaging in soliciting activities, lawyers are prohibited from otherwise ?participating in? the work of the Maine Bar Foundation Judicial Education Committee since this inquiry does not specify the nature of the activities that would constitute such ?participation.?[6]
Footnotes
[1] Rule 3.7(h)(1) of the Maine Bar Rules has not been amended since it was adopted by the Supreme Judicial Court as part of the Code of Professional Responsibility by Order dated May 1, 1979, effective May 15, 1979.
[2] In contrast with Rule 3‑7(h)(1), the A.B.A. Model Rules of Professional Conduct adopt the arguably less restrictive approach that the propriety of gifts from lawyers to judges should be measured by the standards of unlawful influence (Model Rule 3.5(a)), conduct prejudicial to the administration of justice (Model Rule 8.4(d)), and knowing assistance of a judge in conduct violative of rules of judicial conduct or other law (Model Rule 8.4(f)).
[3] The A.B.A. Code of Judicial Conduct was adopted by the American Bar Association on August 16, 1972.
[4] We are unable to assume that this was an oversight on the part of the drafters of Rule 3.7(h)(1) inasmuch as the Supreme Judicial Court had previously adopted the Code of Judicial Conduct by Order dated February 26, 1974, effective April 1, 1974, and DR 7‑110(A) had been amended in 1974 to bring that Disciplinary Rule into conformity with the A.B.A. Code of Judicial Conduct.
[5] In the case of In re Corboy, 528 N.E.2d 694 (Ill. 1988), the Supreme Court of Illinois read into the Illinois version of DR 7‑110(A) a provision that would conform that Rule with the Illinois Code of Judicial Conduct, observing that ?it would not be reasonable to hold that a judge may accept something from a lawyer which the lawyer is not permitted to give . . . .? Id. at 699. The Court?s judgment in that case expressly amended the Illinois version of DR 7‑110(A) to bring it into conformity with the Illinois Code of Judicial Conduct. Id. at 701. Unlike the Supreme Court of Illinois, however, the Commission is not empowered to amend the Maine Bar Rules, even if it were persuaded that the omission of an exception in Rule 3.7(h)(1) to conform that Rule with the Code of Judicial Conduct was an oversight on the part of the drafters of that Rule.
[6] The authority of the Commission is limited to providing advisory opinions involving interpretation and application of the Code of Professional Responsibility (Rule 3). See Maine Bar Rule 11(c)(1) and (2). That being the case, the Commission expresses no opinion as to the application of the general law or the Code of Judicial Conduct to the activities described in the present inquiry.
Enduring Ethics Opinion
Opinion #128. Lawyer as Director of Non-Profit Corporation Providing Legal Services to Indigents
Issued by the Professional Ethics Commission
Date Issued: December 30, 1992
Question
A Lawyer wishes to participate in the formation of a non‑profit corporation which, among other services, will provide legal representation to indigents. The question is whether she can also serve on its Board of Directors.
Opinion
The commission concludes that no Bar Rules are violated if the lawyer merely serves on the Board of Directors. Bar Rule 3.2(a)(2) states that ?A lawyer shall not form a partnership or a professional corporation with a person not licensed to practice law if any of the activities of the partnership or corporation consist of the practice of law.? The Reporter?s Notes to the Rule state:
The commission was aware of the growing interest in interdisciplinary service organizations but believed the public interest would not be best served by their encouragement on a proprietary level, in the legal profession.
The question presented assumes that the entity the lawyer contemplates serving is formed under Title 13‑B of the Maine Revised Statutes and is neither a partnership, joint venture, business or professional corporation. It also asks the Commission to assume that the entity qualifies as a tax exempt organization, presumably under Section 501(c)(3) of the Internal Revenue Code (which explicitly requires that the organization?s earnings not ?inure to the benefit of any private shareholder or individual?).
Although the Rule does not specifically so state, we believe that participating on the Board of Directors of an organization that by definition will not be proprietary and whose property and activities will not inure to the benefit of its directors or its members, is not prohibited by the Rule. In Opinion 79 this Commission concluded that a lawyer could not form a business relationship with an accountant that provided legal services to clients. We reasoned that regardless of the formal structure selected for the organization, Rule 3.2(a)(2) prohibited the formation of a proprietary relationship with non lawyers. The question presented here is different because the lawyer as a director will not be permitted to receive any proprietary benefit from the economic success of the organization as she most certainly would if it were a business enterprise in which she were an owner or co‑owner. If the lawyer were to be employed by the organization and her compensation related to the income received by the organization for her services, there may be a question as to whether such relationship would be a proprietary one similar to the type prohibited in Opinion 79. Since the Request does not address such a situation, we express no opinion about the permissibility of such an employment relationship.
Enduring Ethics Opinion
Opinion #127. Disbursements to Client of Funds Assigned
Issued by the Professional Ethics Commission
Date Issued: December 8, 1992
The Commission has received a request that it review the correctness of its Opinion No. 116, issued June 6, 1991, in view of two decisions of the Supreme Judicial Court of Maine, Northeast Bank of Lewiston and Auburn v. Murphy, 512 A.2d 334 (Me. 1986) and Herzog v. Irace, 594 A.2d 1106 (Me. 1991).
In Opinion No. 116, the Commission was faced with the problem of a lawyer who receives, on behalf of a client, the proceeds of a civil lawsuit in a circumstance in which the proceeds were the subject of a settlement divorce agreement directing that they be paid over to the client?s former spouse. The question presented was whether the lawyer violated the Bar Rules by paying the proceeds to the client (who subsequently did not pay it to the spouse) under various alternative scenarios concerning the degree of knowledge of the lawyer of the client?s intentions and the degree of prior authority given by the client to the lawyer. The Commission advised that it would not violate the Bar Rules for the lawyer to turn the proceeds over to the client, regardless of the lawyer?s knowledge of the client?s intentions, unless the client had authorized the lawyer to promise the lawyer for the spouse that the proceeds would be turned over, and the lawyer so promised. In this latter circumstance, the Commission advised that the lawyer?s failure to turn the money over to the spouse?s lawyer would violate Rule 3.6(c), in that such a failure would constitute a fraud upon another person. Absent such an authorized promise, however, the Commission advised that the failure to turn the proceeds over to the spouse?s lawyer would not violate the Bar Rules. Moreover, the Commission also concluded that the failure to turn the proceeds over to the client might violate Bar Rule 3.6(f)(2)(iv), requiring a lawyer to ?promptly pay or deliver to the client . . . the [property] in the possession of the lawyer which the client is entitled to receive.?
The question now presented is whether this conclusion is correct in view of the two decisions of the Supreme Judicial Court of Maine cited above.
With regard to Northeast Bank of Lewiston and Auburn v. Murphy, which predates Opinion No. 116, the Commission is of the view that this case has no effect on its Opinion. In Murphy, the Law Court held that the failure of a lawyer to turn over to an entity holding a court‑ordered lien on the proceeds of a civil lawsuit was a tort (conversion) committed by the lawyer against the entity, exposing the lawyer to double damages under 14 M.R.S.A. § 3155. Id. at 348350. The Court?s opinion does not discuss the ethical obligations of the lawyer in the circumstances of that case under the Bar Rules.
In Herzog v. Irace, decided only two months after the issuance of Opinion No. 116, the Law Court addressed the applicability of Bar Rule 3.6(f)(2)(iv) to this situation. There, a lawyer had received the proceeds of a civil lawsuit which were the subject of a preexisting assignment by the client. The Court ruled that since the client had legally assigned his right to the proceeds to someone else, the proceeds in effect were no longer the property of the client for purposes of the Rule, and therefore the lawyer was under no obligation to promptly turn it over to the client. Id. at 110910. The question thus becomes whether this holding is consistent with that of the Commission in Opinion No. 116. The Commission believes that it is. In Opinion No. 116, the Commission assumed that the settlement divorce agreement did not divest the client of the right to initially receive the proceeds of the civil lawsuit. That being the case, it concluded that a failure by the lawyer to turn the proceeds over to the client promptly would violate Bar Rule 3.6(f)(2). If, on the other hand, a court determines, as in Herzog, that the client?s interest in the proceeds has legally been terminated, then it follows that a failure to remit the proceeds to the client does not violate Rule 3.6(f)(2), since the proceeds are no longer the ?funds, securities or other properties [of the client] in the possession of the lawyer which the client is entitled to receive.?
In light of Murphy and Herzog, and consonant with Opinion No. 116, the task of the lawyer in each such case is to determine whether the client has been legally divested of his or her right to receive the funds in question.
Enduring Ethics Opinion
Opinion #126. Non-Compete Agreements as a Condition of Employment
Vacated by Opinion #218 (05/09/2018)
Issued by the Professional Ethics Commission
Date Issued: September 25, 1992
OPINION #126 (1992) WAS SUPERSEDED BY M. BAR R. 3.2(g) ADDED FEB. 1997.
FACTS
A law firm interviews a lawyer for a position in the firm as an associate. One of the firm?s requirements is that the attorney, if hired, sign an employment agreement which includes a provision that the lawyer will not compete with the law firm should employment be terminated for any reason. The lawyer is initially hired and she and the firm proceed to negotiate the exact terms of the employment agreement. The lawyer attempts to have any non‑competition covenant deleted from the employment agreement, but the law firm refuses. The lawyer then declines to sign the employment agreement and she is fired.
QUESTION
Is it a violation of the Maine Bar Rules for a law firm to require that a lawyer execute a non‑competition agreement as a condition of employment?
OPINION
No. It is not a violation of the Bar Rules for a law firm to require or utilize non‑competition agreements. Although both the ABA Model Code of Professional Responsibility and the more recently adopted ABA Model Rules of Professional Responsibility both specifically prohibit restrictions on the employment of an attorney after the termination of any employment relationship, Model Code D.R.2‑108(A) and Model Rule 5.6(a), no such provision in any form appears in the Maine Bar Rules. While this issue has been the subject of considerable litigation and commentary in other jurisdictions and such conduct has almost universally been held to be ?unethical,? such decisions are uniformly based on the provisions of the Model Code or Model Rules, or particular state variations thereof.[1]
Since ethical issues in Maine are governed exclusively by the terms of the Bar Rules, we conclude that, in the absence of a provision in those Rules prohibiting non‑competition agreements, there is no prohibition against the above described conduct.[2]
FOOTNOTES
[1] See for example 51 Law.Man.Prof.Conduct, Section 1201 (1992); Wolfram, Modern Legal Ethics, 888, fn. 72 (1986) and Garwin, ?You Can?t Take It With You?, 78 ABA Journal 89 (July 1992) and cases therein.
[2] In so answering this question we note that this opinion, consistent with the long established practice of this Commission, does not address whether, or to the extent to which, such covenants are permissible under substantive law in Maine.
Enduring Ethics Opinion
Opinion #125. Communication with Insurance Carrier's Adjuster
Issued by the Professional Ethics Commission
Date Issued: June 9, 1992
Question
The Commission has been asked for its guidance concerning the extent to which a lawyer for an employee in a workers? compensation proceeding may communicate directly with an adjuster who is employed by an insurance carrier. The carrier is named as a party in the proceeding and is represented by counsel.
Opinion
The Commission concludes that a lawyer for an employee in a workers? compensation proceeding is prohibited by Bar Rule 3.6(j) from communicating with an adjuster employed by a party?s insurance carrier, when the carrier is named as a party to the litigation,[1] is represented by counsel, and counsel has not consented. The purposes of the Rule, as it applies to communications with corporate employees, were extensively discussed in Opinion No. 94, both in a litigation and a pre‑litigation context. Generally, the Commission concluded that the anticontact rule prohibited communications during litigation by opposing counsel with employees of a corporation who either have the power to bind the corporation legally or have responsibility for making decisions on the litigation or assisting the corporation?s lawyers in making those decisions. The Commission indicated that whether a particular employee falls within one of these two categories must be determined on a case‑by‑case basis. The question presented by this particular case, therefore, is whether an insurance adjuster falls within one of the two categories of employees to whom the anticontact rule applies.
With regard to whether an insurance adjuster is a member of a so‑called ?control group? of a corporation, the Commission is of the view that, while it is possible for a particular adjuster to be so considered, it is difficult to resolve the issue in this case in the absence of additional facts. The Commission believes, however, that the Rule nevertheless applies, because an insurance adjuster clearly fits within the second category, since he or she is a person responsible for making decisions on litigation, or assisting the corporation?s lawyers in making such decisions. The very purpose of such an employee is to attempt to resolve disputes involving the insurance company. Inevitably, such employees work closely with lawyers employed by the company, and therefore may be in the possession of factual or tactical information about the dispute, not because they have actually witnessed the events which gave rise to the litigation, but because of their close association with the insurance company?s lawyers.[2] Consequently, unrestricted contact with them on the part of a lawyer representing an opposing party could lead to the kind of unfair advantage in the litigation which Rule 3.6(j) is designed to avoid.[3] Accordingly, the Commission interprets such employees to be within the meaning of the term ?adverse party? contained in the Rule, and concludes that opposing counsel may not contact them, or cause them to be contacted, without the prior consent of the lawyer representing their employer.
Footnotes
[1] The logic by which the Commission reaches this conclusion suggests, but the Commission need not decide, that the same result would obtain even if the carrier were not a party.
[2] The Commission notes that, under this analysis, it makes no difference whether the adjuster is a full‑time employee of the insurance carrier, or is retained by it on some other basis. Either way, the key fact is his or her close association with the corporation?s lawyers, who themselves may be either full‑time employees or separately retained counsel.
[3] In view of this purpose, the application of the Rule is much weaker in a pre‑litigation context. See generally the discussion contained in the answer to Question No. 2 of Opinion No. 94.
Enduring Ethics Opinion
Opinion #124. Accepting Referrals from a Paralegal Advisor
Issued by the Professional Ethics Commission
Date Issued: May 6, 1992
Question
An attorney proposes to accept a client by referral from a self-described ?independent ?paralegal? advisor? who is not an employee of the attorney, and who does not receive any type of payment directly from the attorney. The attorney questions the ethical propriety of accepting the client?s case on a standard contingent fee basis when the attorney knows that there is also a contract directly between the client and the ?independent ?paralegal? advisor? whereby the advisor will receive 17% of any benefits received by the client as a result of the attorney?s work. Thus, the attorney knows that the total fees to be paid by the client in the event of recovery would equal 50% of the amounts collected.
Opinion
We believe that strictly upon the facts presented, the lawyer may accept the referred client without violating any provision of the Maine Bar Rules. We assume in so concluding that the lawyer and the ?independent ?paralegal? advisor? are in fact completely independent from one another and that there exists no ongoing cooperative relationship between them. Under such circumstances, although Rule 3.3(a) governing contingent fee agreements prohibits a lawyer from charging or collecting an ?illegal or excessive fee,? because the lawyer?s own independent agreement with the client in question comports with customary percentages there is no violation of that rule. Similarly, assuming no present or ongoing agency or cooperative arrangement between the attorney and the ?independent ?paralegal? advisor,? Rule 3.9(f)(2) prohibiting the payment of compensation or reward for referral would not prohibit the attorney?s conduct. Finally, on such facts the proposed referral cannot be said to involve the ?sharing? of a fee with a non‑lawyer in violation of Rule 3.3(e). Thus, the lawyer?s proposed conduct would be ethically proper.[1]
In conclusion, however, a note of caution must be observed. We can readily postulate the existence of additional facts beyond those provided here which would necessarily dictate a contrary result. For example, the lawyer and the ?independent ?paralegal? advisor? might jointly develop a referral arrangement in order to benefit both of them financially on an ongoing, repeated basis. Of course, the attorney could not directly compensate or reward the non‑lawyer for the referrals, nor share ?legal fees? with a non‑lawyer. See Rule 3.9(f)(2) and Rule 3.3(e). Such a referral plan, created as part of a joint venture, would ?violate, circumvent or subvert? those provisions of the Maine Bar Rules if the plan were in essence designed to accomplish what otherwise is expressly forbidden.
Footnote
[1] Of course, the lawyer should still satisfy him or herself that taking up representation of the client with full knowledge of the pre‑existing 17% contingent fee agreement between the client and the non‑lawyer ?independent ?paralegal? advisor? does not otherwise constitute a violation of substantive law beyond the relatively narrow question of propriety under the Maine Bar Rules. See, e.g. 17‑A M.R.S.A. § 516 (champerty); 17‑A M.R.S.A. § 57 (accomplice liability). Cf. Opinion No. 60: ?Since the ultimate determination of an attorney?s duty in such cases depends on the application and interpretation of the Maine Criminal Code, we conclude that we are unable to authoritatively answer the questions.? (p. 216)
Enduring Ethics Opinion
Opinion #123. Participation in Seminar as Public Communication
Issued by the Professional Ethics Commission
Date Issued: April 23, 1992
Facts
A Marketing Organization obtains financial planners and attorneys to conduct workshops and seminars. Marketing Organization arranges the sessions through various organizations and conducts the publicity. An attorney and financial planner conduct a workshop/seminar. Part of the session includes the attorney providing one hour of consultant time to each attendee in private. Marketing Organization sets up the private appointment and acquires information about the attendees that is provided the attorney for the consultation.
Compensation from the attorney to Marketing Organization is calculated, in one instance, solely upon the number of attendees at the session; and, in another instance, upon the number of attendees who attend plus make the appointment with the attorney, regardless of whether the attorney is thereafter actually retained for any services.
Question
Do either of the above compensation arrangements with Marketing Organization violate any provision of the Bar Rules?
Opinion
Two Bar Rules could arguably apply to the above arrangements. The first is Rule 3.3(e) which states: ?A lawyer or law firm shall not share legal fees with a non‑lawyer [subject to exceptions not applicable to this discussion].? However, that Rule does not apply to either of the arrangements described above because the compensation to Marketing Organization is not based upon fees the lawyer collects as a result of the session. Marketing Organization is to be compensated whether or not the lawyer renders any services to these attendees; and its compensation is not based upon fees charged by the lawyer to the attendees. Its compensation is no different from compensation paid any media advertiser based upon the size of the audience it reaches.
A more difficult issue is presented by Rule 3.9(f)(2) which reads as follows:
A lawyer shall not compensate, or give anything of value to, a person or organization to recommend or secure employment by a client, or as a reward for having made a recommendation resulting in employment by a client, except that a lawyer may pay for public communication permitted by these rules and may pay the usual and reasonable fees or dues charged by a lawyer referral service operated, sponsored, or approved by a bar association.
The initial question is whether the arrangements fall within the general proscription of the Rule. The Commission concludes that they do. While there is presumably no explicit recommendation of employment being made by Marketing Organization in its advertising to the attendees, one cannot ignore that the entire enterprise is intended to suggest and encourage consideration of such employment; and Marketing Organization?s compensation is directly based upon the success of securing private communications between the lawyer and the attendees. While the technique is certainly more sophisticated than the archetypical ambulance chasing and lacks the risks of undue influence that would run afoul of Rule 3.9(f)(1), the result is the same: the attendees are encouraged to avail themselves of the ?consultations,? and Marketing Organization?s compensation is based in part on the number of those ?consultations.?
The next question is whether either of the exceptions to the general proscription of Rule 3.9(f)(2) applies. The last exception does not. The Marketing Organization is not ?a lawyer referral service operated, sponsored or approved by a bar association.? Nothing in the facts reveals any relationship whatever to any bar association. See Opinion No. 87.
However, with respect to the first compensation arrangement described above, the Commission concludes that the other exception set forth in Rule 3.9(f)(2) applies. The Marketing Organization is providing the lawyer a forum for public communication for which the lawyer pays based on the size of the public the Marketing Organization is able to provide for the session. The fact that the lawyer may offer to that public free consultation in addition to the public communication makes no difference since the Marketing Organization is not being paid by the attorney for the latter contact. The lawyer is merely paying for the opportunity to communicate with an audience publicly.
However, the second compensation arrangement cannot be similarly described. Marketing Organization is being paid based (at least in part) upon the number of private contacts the lawyer makes as a result of its efforts and not solely for the public communication.
In summary, Rule 3.9(f)(2) is violated if Marketing Organization is compensated on the basis of the number of private consultations that come to the lawyer. If its compensation is based solely upon the number of attendees attending the workshop/seminar as a result of its public communication, then no violation occurs. The distinction is subtle, as the above facts reveal, but it achieves a principled balance between the need to protect the public from ?surreptitious private client recruitment? (see Advisory Committee?s Notes to Rule 3.9(f)) and the encouragement of public communication of legal matters, whether or not motivated by a desire for employment.
Enduring Ethics Opinion
Opinion #122. Notifying Employer of Settlement in Worker?s Compensation Cases
Issued by the Professional Ethics Commission
Date Issued: March 5, 1992
Question
The Grievance Commission has requested an advisory opinion as to whether a lawyer representing an employer?s workers? compensation insurer is obligated by the Maine Bar Rules to communicate with the employer before settling a workers? compensation claim before the Maine Workers? Compensation Commission.
Opinion
For the reasons discussed below, the Professional Ethics Commission concludes that a lawyer representing an employer?s workers? compensation insurance carrier is required by Maine Bar Rule 3.6(a) to communicate with the employer (the insured) before settling a workers? compensation claim before the Maine Workers? Compensation Commission.
In relevant part, Maine Bar Rule 3.6(a) provides that ?[a] lawyer shall take reasonable measures to keep the client informed on the status of the client?s affairs.? The Professional Ethics Commission has previously opined that the insured party is the ?client? of a lawyer retained by a liability insurer to represent the interests of the insured. See Opinions 63 and 72. In that situation, therefore, Rule 3.6(a) generally requires the lawyer retained by the insurer to communicate with the insured in regard to the settlement of a claim against the insured since the settlement concerns ?the status of the clients? affairs? within the meaning of that Rule.
The question now presented is whether that same principle also applies in the context of a workers? compensation claim. At the outset, it is noted that there are some differences between the interests of an insured in defending against a tort claim and the interests of an insured (employer) in a workers? compensation claim. in the former situation, the insured has an immediate interest in any settlement since the settlement may require that the insured pay certain amounts below certain policy limits (deductibles) or above policy limits (excess exposure). In contrast, in the workers? compensation context, the insured‑employer generally has no exposure in regard to the payment of a settlement, and the insurer generally bears the full cost of paying any settlement arrived at.
It is also noted that there may be differences between some liability insurance policies and workers? compensation policies in regard to the insurer?s right to settle claims. Finally, it is noted that, in contrast with the usual tort action in which the insured is the defendant, the employer?s insurer is a party to a worker?s compensation claim proceeding.
Based on these considerations, it could be argued that in the worker?s compensation context the insurer is the real party in interest, and that the employer is not the ?client? of the lawyer retained by the insurer. The problem with that argument, however, is that the employer as well as the insurer is also a party to the proceeding; the lawyer enters an appearance as counsel for each, and the settlement is approved by both of those parties, signified by the lawyer?s signature as counsel for each. Under these circumstances, the Commission is constrained to conclude that the employer as well as the insurer are ?clients? of the lawyer for purposes of the above‑quoted provision of Bar Rule 3.6(a).
That the settlement of a worker?s compensation claim concerns the ?status of the client?s [employer?s] affairs? within the meaning of Rule 3.6(a) is also manifest since the terms of the settlement may affect the employer?s insurance premium level and may also involve consideration of such things as the resignation or the return to work of the employee‑claimant, matters of significant interest to the employer.
Accordingly, the question presented here is answered in the affirmative.[1]
Footnote
[1] The Professional Ethics Commission notes that its opinion in this matter is in line with the recent amendment to 39 M.R.S.A. § 106(2), which requires the insurer to give notification of proposed settlements to the employer under certain circumstances. P.L. 1991, ch. 615, § A‑50 (effective October 17, 1991).
Enduring Ethics Opinion
Opinion #121. Specialization
Vacated by Opinion #203 (04/13/2011)
Issued by the Professional Ethics Commission
Date Issued: February 4, 1992
An attorney?s advertising in the ?yellow pages? reads in part that ?our firm specializes in representing workers and other injured persons.? The attorney has inquired as to whether the quoted portion of the ad violates Maine Bar Rule 3.8.
Maine Bar Rule 3.8 provides in part:
A lawyer may communicate the fact that the lawyer does or does not practice in particular fields of law or that his practice is limited to or concentrated in particular areas of law. A lawyer shall not represent publicly or imply that the lawyer is a recognized, designated or certified specialist.
Rule 3.9(a) prohibits false, deceptive or misleading advertising and Rule 3.9(b)(4) defines that to include any statement or claim that:
States or implies that a lawyer is a specialist other than as permitted by Rule 3.8.
Although it may be argued that Rule 3.8, when read literally, only prevents a lawyer stating that he is ?recognized, designated or certified? as a specialist, we conclude that the rules, when read together and in light of the apparent policy purpose, do prohibit the ad in question. Rule 3.9(b)(4) clearly prohibits a lawyer stating that he or she is a ?specialist.? The only permitted exceptions are those in Rule 3.8. Those exceptions only relate, however, to (1) statements regarding practice limitation or concentration, (2) attorneys practicing patent, trademark and admiralty law, (3) advertising directed to other lawyers, (4) lawyer referral services and (5) specialty designations as permitted by the Supreme Judicial Court. Other than the exceptions in Rule 3.9, Rule 3.9(b)(4) prohibits any statement even ?implying? specialization. The Reporters Notes confirm this reading of § 3.9(b)(4):
The fourth of these categories [Rule 3.9(b)(4)] refers to Rule 3.8 and precludes advertisements asserting or implying specialists? qualifications unless made in conformity with a Court‑approved program.
Any arguable narrow reading of § 3.9 is inconsistent with the apparent policy purpose of the rule. That rule is intended to protect the public from the possible misleading impact from lawyers holding themselves out to be specialists other than pursuant to a Court‑approved certification system. See Rule 3.8(d).[1]
The fact that the ad uses the term ?specializes? rather than ?specialist? does not constitute a meaningful distinction. The form of the term, whether as a noun or verb, is in our opinion inconsequential. The plain import of the Rule is to prohibit the phrase in any form.
We conclude therefore that the ad in question is inconsistent with the Bar Rules.
Footnote
[1] We are aware that the Supreme Court in Peel v. Attorney Registration and Disciplinary Commission, ? U.S. ? 110 S.Ct. 2281, 58 L.W. 4684 (1990) concluded that a lawyer has a constitutional right to advertise his designation as a ?Certified Civil Trial Specialist? under a system adopted by the National Board of Trial Advocacy. Other decisions have also recognized a constitutional limitation on restriction of advertising. In Re RMJ, 455 U.S. 1 (1982); Zauderer v. Office of Disciplinary Counsel of the Ohio Supreme Court, 417 U.S. 626 (1985); Spencer v. Justices of the Pennsylvania Supreme Court, 579 F.Supp. 880 (E.D. Penn. 1984), Daves v. Texas State Bar, 691 S.W.2d 784 (Tex. 1986) and Ex Parte Howell, 487 So.2d 848 (Ky. 1986). However, the facts of Peel differ from those presented to the Commission in this case, since unlike Peel, the inquiring lawyer has not demonstrated that he is in fact certified by any professional organizations. More importantly, the Commission has traditionally held that its jurisdiction is limited only to interpreting the Bar Rules and that it has no authority to opine on questions of law. While it is conceivable that, in view of Peel, there may be a question as to the continuing validity of Rules 3.8 and 3.9(b)(4), consideration of such constitutional question is beyond the Commission?s authority.
Enduring Ethics Opinion
Opinion #120. Delivering Client's File
Issued by the Professional Ethics Commission
Date Issued: December 11, 1991
Question
An attorney has inquired as to whether an attorney who is terminating his relationship with a client is obliged to assume the expense of turning the file over to the client. The question is essentially whether it is sufficient for the attorney to make the file available for the client to pick up at his office or whether he is required to mail the file at his own expense or otherwise deliver it into the client's hands.[1]
Opinion
Resolution of the question presented is controlled by Bar Rule 3.5(a)(2). That rule states that:
(2) A lawyer shall not withdraw from employment until the lawyer has taken reasonable steps to avoid foreseeable prejudice to the rights of the lawyers client, including giving due notice to the client, allowing time for employment of other counsel, delivering to the client all papers and property to which the client is entitled. . . .
The inquiry presented concerns the interpretation to be given to the word "delivering" in reference to the papers and property of the client. Although this term could be read as requiring the attorney to assume responsibility for conveying the file into the clients hands, the Commission is of the opinion that the attorneys ethical obligation will ordinarily be satisfied simply by making it available for the client to pick up at the attorneys office. We think the primary purpose of the rule was to insure that the attorney in question would not delay the processing of the clients case by withholding the file rather than to impose upon him the cost of transporting it to a particular location. Since the transfer of the file would ordinarily be for the benefit of the client, it seems reasonable to require the client to assume the cost of mailing or other form of delivery if he is unwilling to pick it up at the attorneys office.[2]
Footnotes
[1] A subsidiary question as to whether an attorney can condition delivery of the file upon payment of costs of copying has been answered in a previous opinion. See Opinion #51 (1984). Since the file belongs to the client, the cost of any copying should be borne by the attorney since any such copies would be solely for his or her own benefit.
[2] The Commission can nevertheless conceive of circumstances in which a different result might obtain if, for example, the client urgently required the file in order to pursue or defend pending litigation and lacked sufficient funds to arrange a timely transfer.
Enduring Ethics Opinion
Enduring Ethics Opinion #120 [April 2022]
Opinion #119. Class Action Against Government Agency
Issued by the Professional Ethics Commission
Date Issued: November 14, 1991
QUESTION
The Commission has been asked whether the inquiring attorney would violate any Bar Rule by filing a class action against a government agency if the attorney had received payment from a different agency of the same government for providing legal services to the plaintiff class representatives in matters other than the class action but somewhat related thereto. The inquiring attorney proposes to inform the plaintiff class representatives that his fees in their other matters have been paid by the government agency.
OPINION
The Commission is of the opinion that the circumstances described in the question would not involve a violation of the Maine Bar Rules. It is the plaintiff class representatives who are the clients of the inquiring attorney in both the prospective class action and the matters for which legal fees have been paid by an agency of government. The government agency paying for the legal services is not a client. Moreover, allowing that government agency to direct or regulate the professional judgment applied to the rendition of legal services for the class representatives would violate Bar Rule 3.6(h), which provides:
**(h) Avoiding Influence by Others.** A person who recommends, employs, or pays a lawyer to render legal services for another shall not be permitted by the lawyer to direct or regulate the lawyer?s professional judgment in rendering such legal services.
Since a conflict of interest arises out of an adverse effect on the exercise of a lawyer?s independent professional judgment in behalf of one client that is or could be caused by representation of another, the proposed class action would not involve a violation of Rule 3.4 for two reasons: no attorney client relationship exists between the attorney and the government agency paying for legal services, and; Rule 3.6(h) requires that the attorney not allow the exercise of professional judgment to be directed or regulated by the payor. This conclusion is reinforced by the attorney?s present arrangements for representation of individual class members in other matters. In the case described by the inquiring attorney, the same conflict on which the inquiry focuses would exist with respect to the very services the attorney has been paid to perform, since another agency of the same government is the opposing party in each case. The Commission agrees that disclosure to the client class representatives is required in the circumstances. Bar Rule 3.4(f); Opinion 63.
Enduring Ethics Opinion
Opinion #118. Lawyers with Ownership Interest in Corporation Providing Public Relations Services
Issued by the Professional Ethics Commission
Date Issued: September 13, 1991
Facts
The individual partners of law firm ABC and public relations firm XYZ wish to form a new corporation, PAG. The corporation will provide a broad array of public relations services, including legislative lobbying. The role of the partners of law firm ABC will be limited to that of partial ownership; they will serve as corporate directors, but will not provide any of the services of the new corporation themselves nor will any of the law firm?s associates. In addition, the new corporation itself will employ no lawyers. The law firm has requested the Commission?s opinion whether this arrangement violates Bar Rule 3.2(a)(2). For the reasons which follow, it is the Opinion of the Commission that the rule is not violated.
Opinion
Bar Rule 3.2(a)(2) provides:
A lawyer shall not form a partnership or business corporation with a person not licensed to practice law if any of the activities of the partnership or corporation consist of the practice of law.
In Opinion No. 79, the Commission indicated that the phrase ?practice of law? in this Rule
. . . has typically been interpreted as including services in fact performed by lawyers, whenever the business entity in question represents that a lawyer will be performing the service, even though nonlawyers may and do perform the same service.
The rule thus prohibits the formation of corporations by lawyers and non‑lawyers if the corporation will be offering the legal services of those lawyers. The question presented here, however, is whether the rule is violated if the corporation uses non‑lawyers to provide services, such as lobbying, which are sometimes performed by lawyers.
In the opinion of the Commission, the rule would not be violated by this arrangement. As set forth above, the new corporation, PAG, will employ no lawyers, nor will the lawyer partners or associates of law firm ABC perform any work for PAG. Rather, PAG?s clients will be advised that if legal work is necessary, law firm ABC is available to do it. This arrangement does not violate either the letter or spirit of Rule 3.2(a)(2), one of the principal purposes of which is the avoidance of public confusion over the nature of the services provided by the new corporation. See Reporter?s Notes to Maine Bar Rule 3.2(a)(2). So long as none of the lawyers of law firm ABC are involved in the activities of corporation PAG, the Rule is not violated, even if some of the activities of the corporation, such as lobbying, are those which are sometimes performed by lawyers.
This conclusion is not inconsistent with that reached in Opinion No. 79. In that case, the inquiring lawyer indicated that the new corporation owned jointly by two lawyers and an accountant proposed to offer the services of the attorneys and the accountant, who would jointly ?provide total legal and financial services,? and that ?a named lawyer will be a member of the `team of experts.?? In Opinion No. 79, therefore, it was clear that lawyer‑owners would be involved in the activities of the new multi‑purpose entity, thereby blurring the clear distinction required by the Rule between lawyers providing legal services and non‑lawyers providing services which are sometimes provided by lawyers.
Enduring Ethics Opinion
Opinion #117. Mortgaging Marital Residence to Attorney After Property Division and Divorce Judgment
Issued by the Professional Ethics Commission
Date Issued: June 7, 1991
In Opinion No. 97, issued on May 3, 1989, the Commission opined that the acquisition by an attorney of a proprietary interest (in the form of a mortgage) on his client?s marital home to secure his attorney?s fees in connection with his client?s divorce proceedings would constitute a violation of Bar Rule 3.7(c). The Commission has now been asked whether an attorney?s acquisition of such a mortgage after the divorce court has divided the property in the divorce proceedings similarly violates the rule.
Opinion
Rule 3.7(c) provides as follows:
Interest in Litigation. A lawyer shall not acquire a proprietary interest in the cause of action or subject matter of litigation the lawyer is conducting for a client, except that the lawyer may:
(1) Assert a lien granted by law against the proceeds of such action or litigation to secure the lawyer?s fee or expenses. This paragraph does not authorize an attorney to assert a lien on a client?s file in order to secure payment of a fee. The assertion of such a lien (if any exists) is improper; and
(2) Contract with a client for a reasonable contingent fee as provided in Rule 8.
The primary concern of Rule 3.7(c) is to prohibit an attorney?s personal interests from being interjected into the subject matter of the litigation because of the risk that the attorney?s professional judgment will be affected by his acquisition of an interest in the property in litigation. The Commission is of the opinion that after the divorce judgment becomes final, the litigation is at an end, and the prohibition contained in Rule 3.7(c) is generally inapplicable. However, attorneys should recognize that the general expectation of the finality of marital property litigation in divorce proceedings is not always justified. Residual issues of possession, sale or other disposition, continued residence of the former spouse or minor children, or collateral security for continuing obligations may return to haunt the parties. The infinite variety of factual circumstance surrounding many divorce‑inspired property dispositions both prevent this Commission from articulating any simplistic rule, and counsel the practitioner to carefully consider the risk, if any, that such residual disputes may make the taking of a mortgage inappropriate under Rule 3.7(c).
Enduring Ethics Opinion
Opinion #116. Obligation of Attorney Regarding Client Funds Owed to Third Persons
Issued by the Professional Ethics Commission
Date Issued: June 6, 1991
Question #1
The Grievance Commission of the Board of Overseers of the Bar has requested an Advisory Opinion based upon the following facts. H and W are divorced. H was represented by Attorney L, and W was represented by Attorney M. H has commenced an action against a party who had previously bought a business from him in which there is a potential recovery of $9,000 in damages. L represents H in that action also.
The divorce decree states ?Husband hereby agrees to pay Wife Fifty Per Cent (50%) of any sum recovered in said action, after making a deduction for reasonable costs of such action, and further deducting $800 owed to X Company for a debt relating to said business.?
Later, after H had failed to comply with the divorce decree with respect to child support and payment of certain debts of the marriage, W, now represented by Attorney N, sought to have him held in contempt of court. As a result a mediation was held, and an amended settlement agreement was signed by the parties. In the amended agreement H agreed to pay off the debt to X Company and satisfy the arrearage in child support payments out of his share of proceeds of the pending civil action referred to above. H received a judgment by default in that action.
W, when advised of offers of settlement that H received on the judgment, although not a party to the action, indicated she did not ?approve? them. Nevertheless, H finally settled the matter for $2500. After deducting $400 for his legal fee incurred in collecting the judgment, and without notifying Attorney N, Attorney L at the instruction of his client and having no knowledge that H intended to violate the terms of the agreement above, gave the balance of the cash to his client. When W complained, H gave her $1250.
Question #2
Assume the same facts as above except that Attorney L reasonably believes that H does not intend to comply with the terms of the agreement because H so indicates to him.
Question #3
Assume the same facts as Question #1 except that Attorney L promised Attorney N he would hold the funds when collected and disburse them in accordance with the agreement, but H in fact did not authorize L to make that promise; and when funds arrive, H tells Attorney L to give the funds to him.
Question #4
Assume the same facts as Question #3 except that the promise of attorney L had been authorized by his client; but shortly before the funds arrive, he instructs Attorney L to turn the proceeds over to him when they are collected.
Opinion
As to Question #1 the actions of Attorney L do not violate any Bar Rules. Nothing in the hypothetical decree imposed any obligations upon the attorney, only the clients. Client H owned the cause of action against X Company. Under Bar Rule 3.6(f) 2), L not only is permitted but is obligated to turn the funds over to his client: ?A lawyer shall . . . (iv) promptly pay or deliver to the client, as requested by the client, the funds, securities or other properties in the possession of the lawyer which the client is entitled to receive.? While this Commission has no authority to interpret court decrees, it is obvious that the decree did nothing to alter the ownership of the cause of action. It only created an obligation on the part of H to pay a sum of money to W that was to be based upon the net amount H recovered from the claim. Assuming, as we do, that Attorney L reminded his client of his obligations under the decree, nothing more is required from L. He has no obligation to inform Attorney N under these facts of what has transpired. Bar Rule 3.6(e) is inapplicable because the lawyer has not counseled or assisted his client in the violation of any law, rule, or order of a tribunal. The turning over of the funds to the client does not constitute ?assistance? within the meaning of the rule in that the order necessarily requires that the client receive the money before he has any obligation to W, and the order also did not attempt to modify the obligations of Attorney L to his client.
As to Question #2, the answer is the same for the reasons stated above. Certainly the client would consider the communication that he did not intend to pay W as a confidential communication, and under Bar Rule 3.6(1) a lawyer ?shall not, without the informed written consent of the client, knowingly reveal a confidence or secret of his client.? The exceptions to the rule which permit disclosure when a client intends ?to commit a crime . . . or to avoid subjecting others to risk of harm? are not applicable in this case. No crime is being committed, and the risk of harm? exception cannot be extended to include every activity that would have some negative economic impact upon a third person. To do so would reduce one of the jealously protected expectations of a client to an illusion. Rule 3.6(e) is no more involved in this situation than in Question #1 even if Attorney L was advised by his client of his intention to disregard the order. The mere act of carrying out his obligation to his client with respect to his client?s property is not in itself a violation of an order of the tribunal. As long as the attorney advises the client of his obligations and counsels compliance, that is all he can do in the circumstances. cf. Opinion #60.
Question #3 must be answered no differently from Question #2. Indeed, the analysis is no different from Question #2 since the property remained that of Attorney L?s client. No comment, of course, is being made as to the attorney?s civil liability to third parties as a result of his ill considered promises.
As to Question #4 Attorney L has assumed a different role as between the parties; and Bar Rule 3.6(f)(2) does not necessarily govern the result. The property may no longer belong only to the client (cf. Model Rule 1.15 where the obligations of lawyers dealing with client funds are extended to funds held for third persons.) As Opinion 27 has previously pointed out, the lawyer?s position vis a vis the parties is a legal question of agency and contract law that is beyond this Commission?s jurisdiction. Indeed the lawyer may be obligated to carry out what he has promised since the client authorized the disbursement, and the third party relied upon that authorization. If the lawyer is in doubt as to his obligations in this matter, he can seek judicial guidance under Rule 24, Maine Rules of Civil Procedure. Whatever his legal obligations in this instance, the Commission concludes that the lawyer, if he is unable to persuade his client to change his mind, must notify the other party of the change in instructions, for under Rule 3.6(c) a failure to do so would constitute a fraud upon the other person.
Enduring Ethics Opinion
Opinion #115. Accepting Gifts From Court-Appointed Clients
Issued by the Professional Ethics Commission
Date Issued: April 25, 1991
Question Presented
Attorney A is court-appointed to represent an indigent criminal defendant pursuant to M.R. Crim. P. 44(c). The defendant proposes to make a gift to the attorney consisting of any of the following: a box of homemade cookies, a small amount of cash, or changing the oil in the attorney?s car. The gift may be made before or after the conclusion of the case. Bar Counsel inquires if the attorney may accept any of these gifts without violating Rule 3.2 (f)(4) of the Maine Code of Professional Responsibility.
Opinion
Rule 44(c) of the Maine Rules of Criminal Procedure expressly prohibits an appointed lawyer from subsequently accepting ?compensation? from a source other than the court for ?services or costs? of defense, absent court authorization. The Maine Supreme Judicial Court has deemed such action to constitute ?conduct prejudicial to the administration of justice? in violation of Rule 3.2(f)(4). State v. Grant, 487 A.2d 627 (Me. 1985); Board of Overseers v. Rodway, 461 A.2d 1062 (Me. 1983).
We approach the issue presented in this case with some caution, insofar as this Commission recognizes its lack of jurisdiction to construe court rules or statutes. See, e.g., Opinion No. 76. However, we offer the following discussion in the spirit of observing certain ethical ramifications raised by the inquiry, rather than as any attempt definitively to construe M.R. Crim. P. 44(c).
Rule 44(c)?s closing prohibition against the acceptance of other compensation by a court‑appointed attorney ?except pursuant to court order? appears principally aimed to meet two concerns. First, if funds become available to defray the court‑appointed attorney?s fee, that circumstance must be brought to the court?s attention to enable the court to protect the taxpayers? interest in reimbursement, or substitution of private payment. Second, the Rule preserves the court?s ultimate authority to determine in the first instance what constitutes ?reasonable compensation? for the attorney?s services in the case. See Criminal Rules Committee Advisory Notes, March 1, 1973; cf. Matter of Dwyer, 399 A.2d l (D.C. Ct. App. 1979), construing 18 U.S.C.A. Sec. 3006 A(f).
In light of the rule?s history and the interests it seeks to protect, this Commission is of the opinion that unsolicited gifts of nominal value, such as a box of cookies, do not constitute compensation for services or costs within the meaning of Rule 44(c), such that Rule 3.2 (f)(4) concerns are present. Similarly, the gratuitous and unsolicited performance of a personal service of nominal value, such as an oil change for the attorney?s car, is not compensation in the sense contemplated by the rule. Assuming that such gratuities are indeed unsolicited, it is immaterial whether the act occurs during the course of ongoing representation or after the underlying matter is concluded.[1]
Our view of the offering of cash, in however small an amount, necessarily differs from the above. To the extent of a cash ?gift? to the lawyer by the defendant during the pendency of a case, or after its conclusion, the defendant evidences some ability to contribute financially to his/her defense or to reimburse the State for its outlay. The lawyer should reject the tender.
In any questionable instance, a ready avenue exists for court‑appointed counsel to determine if an unsolicited gift is acceptable in view of Rule 44(c). The cautious practitioner would be wise to seek court authorization whenever in doubt.
Footnote
[1] Obviously, the attorney should not solicit or bargain for ?gratuitous? goods or services, of nominal value or otherwise, from an indigent Defendant. Some concern might well exist that the allowance of even unsolicited gifts of nominal value might in time have the unintended effect of encouraging a defendants? culture wherein the indigent feels compelled to do ?something extra? for his/her attorney in order to ensure zealous advocacy. While sensitive to this possibility, we regard it as sufficiently remote that it can, for the present, be discounted.
Enduring Ethics Opinion
Opinion #114. Communication Between Staff of the Office of Advocacy and Clients and Employees of the Department of Mental Health and Mental Retardation
Issued by the Professional Ethics Commission
Date Issued: February 26, 1991
The Chief Advocate of the Office of Advocacy within the Department of Mental Health and Mental Retardation of the State of Maine has requested an advisory opinion relating to the responsibilities of lawyers and non‑lawyers serving as advocates within the Office of Advocacy.
The Office of Advocacy is established within the Department of Mental Health and Mental Retardation (the ?Department?) to, among other things, investigate claims and grievances of ?clients of the Department,? to investigate allegations of adult and child abuse in state institutions, and to advocate on behalf of ?clients of the Department? for compliance with laws relating to the rights and dignity of such persons. (34‑B M.R.S.A. § 1205(1)). The ?clients of the Department? are defined by 34‑B M.R.S.A. § § 1001(2) and 1205(6), as persons receiving or seeking services from the Department.
The Office of Advocacy consists of 14 classified state employee positions, including a Chief Advocate, who is a lawyer, and several other advocates, some of whom are lawyers and some of whom are not lawyers. The statute establishing the Office of Advocacy (34‑B M.R.S.A. § 1205) does not require that the Chief Advocate or the other advocates be lawyers. All of the advocates within the Office of Advocacy report to the Chief Advocate (34‑B M.R.S.A. § 1205(2)(B)).
- Communication with Parties Represented by Counsel.
In the course of investigating a complaint by a ?client of the Department? concerning abuse by an employee of an institution, a lawyer‑advocate is informed by the employee?s lawyer that the employee is represented by counsel in that investigation and that the lawyer‑advocate should not communicate with the employee. Under these circumstances, does Maine Bar Rule 3.6(j) apply, and if so, does that rule also prohibit a non‑lawyer advocate from communicating with the party represented by counsel?
Rule 3.6(j) provides as follows:
(j) **Communicating With Adverse Party.** During the course of representation of a client, a lawyer shall not communicate or cause another to communicate on the subject of the representation with a party the lawyer knows to be represented by another lawyer in that matter unless the lawyer has the prior consent of the lawyer representing such other party or is authorized by law to do so.
It is the opinion of the Commission that the relationship between the advocates and the ?clients of the Department? is not an attorney‑client relationship and that therefore Rule 3.6(j), which applies to lawyers ?during the course of representation of a client,? is not applicable to such communications.
- Conflict of Interest Issues.
In the course of investigating complaints by ?clients of the Department? against other ?clients of the Department,? the question is presented as to whether the conflict of interest provisions of Rule 3.4 of the Maine Bar Rules apply to the lawyer‑advocates and the non‑lawyer‑advocates.
It is the opinion of the Commission that those conflict of interest Rules do not apply to the advocates in the particular circumstances presented because the relationship between the advocates and the ?clients of the Department? is not an attorney‑client relationship. Although the statute (34‑B M.R.S.A. § 1205(6)) uses the term ?client? as referring generally to persons seeking or receiving services of the Department, those persons are not ?clients? of the advocates within the meaning of Bar Rules 3.4 and 3.6(j).
In considering the questions presented, the Commission notes that the statute establishing the Office of Advocacy has not required that the advocates be lawyers. The particular responsibilities of the advocates are prescribed by statute. The fact that some of them are lawyers is incidental.
This Opinion concerns only the narrow questions presented under the unique statutory provisions involved and does not address other Bar Rules, such as those requiring honesty, which apply to conduct of a lawyer regardless of whether the lawyer is engaged in the practice of law or whether an attorney‑client relationship exists. See The Professional Ethics Commission Opinion No. 101.
By reason of the conclusions of the Commission in this matter, the Commission need not here address, and therefore does not here address, matters concerning the applicability of Bar Rules 3.4 and 3.6(j) to government lawyers who represent governmental agencies or officials in an attorney‑client relationship.
Enduring Ethics Opinion
Opinion #113. Limitations on Attorney-Witness and Contingent Fee Agreements
Issued by the Professional Ethics Commission
Date Issued: December 5, 1990
A panel of the Grievance Commission has requested an advisory opinion from the Professional Ethics Commission pursuant to Me. Bar Rule 11(c)(1) concerning the following matter.
FACTS
Attorney A has been representing Client C in business matters over a period of years. Client C has had a falling out with his business partners, and he asks Attorney A to undertake litigation in the matter. The potential damages in the case are very substantial.
Attorney A agrees to represent Client C in the matter, but since the litigation will be very complex, he believes that he should associate with co‑counsel. Attorney A expects that he will be called as a witness to give testimony by one side or the other about the legal services he has provided, if the matter goes to trial.
Client C agrees Attorney A should associate with other counsel for the matter, and Law Firm B accepts the referral. With the agreement of Client C, Attorney A and Law Firm B enter a contingent fee agreement with Client C. If there is a recovery, Law Firm B and Attorney A agree to split the contingent fee equally. The client agrees to this arrangement. However, Attorney A never enters an appearance as attorney for C.
The matter goes to trial, Attorney A is called as a witness by the other party, and he gives testimony under oath. Attorney A testifies at trial that he expected to be called as a witness by one party or the other and arranged for other counsel since ?it would be impossible for me to handle a matter like this where I would very likely wind up being a witness.? Transcript, p. 347. Neither Attorney A nor Law Firm B?s trial counsel reveal to opposing counsel or the court that if there is a recovery, Attorney A will receive a contingent legal fee. Opposing counsel never questions Attorney A about his current attorney/client relationship with Client C or about legal fees.
Client C prevails at trial and judgment is entered awarding substantial damages. Attorney A is entitled to one‑half of the contingent fee.
QUESTION
Is it a violation of the Maine Bar Rules for an attorney who has represented a client to refer a matter involving that former client?s representation to other counsel, participate in a contingent fee agreement with the client and other counsel, and then act as a witness in a trial of that matter in which there is a potential for receiving a contingent legal fee, without further disclosure to the Court, opposing parties or their counsel?
OPINION
As posed by the Grievance Commission, the question focuses on the lack of disclosure to opposing counsel of the contingent fee arrangement with Attorney A as the potential basis for a finding of ethical misconduct. Although the Ethics Commission concludes, for the reasons hereinafter stated, that the fee arrangement violates the Bar Rules, it is not because of a breach of a duty of disclosure. No Bar Rule requires an attorney to advise opposing counsel that a witness is interested in the outcome of the litigation. Rather, it is the office of discovery and cross examination to elicit facts which will impeach the witness? credibility.
Nonetheless, the Commission has concluded that the fee arrangement entered by Attorney A and Law Firm B violates Bar Rule 3.4(j)(1). That rule states that:
(1) A lawyer shall not accept employment in contemplated or pending litigation if he knows, or should know, that he is likely or ought to be called as a witness.
The rationale for the disqualification is set forth in A.B.A. formal Op. No. 339 (1975):
The principal ethical objections to a lawyer?s testifying for his client as to contested issues are that the client?s case will, to that extent, be presented through testimony of an obviously interested witness who is subject to impeachment on that account. . . .
. . .The fact that a witness may be interested, even financially, in the outcome of the case, does not necessarily mean that he will testify falsely or will color or slant his testimony to favor the party with whom his interest rests. But given a choice between two or more witnesses competent to testify as to contested issues, and other factors being equal, a client?s cause is best served by having the testimony from the witness not subject to impeachment for interest in the outcome of the trial.
Because a trial advocate clearly possesses such an interest, his testimony or that of a lawyer in his firm is properly subject to inquiry based on such interest, perhaps including elements of his fee arrangement in some instances. Thus, the weight and credibility of testimony needed by the client may be discounted and in some cases the effect will be detrimental to the client?s cause.[1]
We assume that A was ?employed? within the meaning of the rule since the Grievance Commission has advised us that he had agreed to act as ?associate counsel? even though he did not actually enter an appearance. Moreover, he signed a contingent fee agreement which we assume was in standard form and contemplated a fee for legal services.
An exception to Rule 3.4(j)(1) provides that it does not apply ?where the predictable testimony will relate solely to . . . legal services furnished by the lawyer. . .? In the present case, the lawyer expected to and did testify about legal services which he had previously performed for Client C. However, that exception is limited to testimony in cases where the nature and value of the legal services is in issue.[2] The reference in both D.R. 5‑101(B)(3) and Model Rule 3.7(a)(2) to the ?nature and value of the legal services rendered? (emphasis added) clarifies the limited breadth of the exception. The Reporter?s notes to Me. Bar Rule 3.4(j)(1) make clear that the changes in language from D.R. 5‑101(3) were not intended to be ?substantive.? We therefore conclude that the omission of the words ?nature and value? from Rule 3.4(j)(1) was not intended to alter the meaning of the Rule.
The policies favoring disqualification are particularly applicable in the case presented. A should have withdrawn completely from participation as an advocate as soon as it became obvious that his testimony would be required. By remaining as co‑counsel, he created a substantial risk of prejudice to his client?s case since his testimony could have been discounted by the fact finder because of his direct pecuniary interest in the outcome of the litigation. Since Law Firm B was apparently handling the actual trial of the case, A?s continued involvement could not be excused on the grounds that his withdrawal would impose a ?substantial hardship? on his client. See Rule 3.4(j)(1).
The Commission also believes that the conduct described may have violated 3.7(g)(3). That rule states that a lawyer shall not:
(3) Directly or indirectly pay, offer to pay, or acquiesce in the payment of compensation to a witness contingent upon the content of his testimony or the outcome of his case. . . .
Although Attorney A?s fee was ostensibly for legal services performed, the facts provided suggest that his favorable testimony as a witness may have been his sole contribution to the case. Thus, the outcome of the litigation, and therefore his entitlement to payment, may have been related to the fact finder's assessment of the persuasiveness of his testimony. Although the attorney may have regarded the contingent payment to A as a forwarding fee[3] rather than as compensation for his testimony as a witness, the harm which the rule was intended to prevent[4] exists as much in the present case as it would where the witness was not an attorney. The Commission, therefore, concludes that, under the circumstances presented, A apparently entered into a fee agreement in which his compensation as a witness was contingent ?upon . . . the outcome of (the) case. . . .? Law Firm B would also have violated Rule 3.7(g)(3) by acquiescing in the fee agreement. The rule makes no exception for cases in which such a fee arrangement is agreed to by the client.
It might be argued that this result is inconsistent with Rule 3.4(j)(2) which permits a lawyer to accept employment in a case in which his partner or associate is to be called as a witness since that rule permits the attorney‑witness to benefit indirectly in the successful outcome of the litigation by sharing in the fees charged by the attorney who is handling the case. The short answer is that A is not a member of Law Firm B so that the exception is by its terms inapplicable. In addition, the indirect pecuniary benefit to the attorney‑witness permitted by Rule 3.4(j)(2) may not have the same potential for inducing biased testimony as would a direct payment to a witness contingent upon the outcome of the trial. In any event, the Commission expresses no opinion whether Rule 3.4(j)(2) would apply where an attorney was to be a witness in a case being tried by his partner in which fees were contingent upon the outcome of the litigation.
FOOTNOTES
[1] This language was quoted with approval in Grievance Comm. op. no. 41 (1983).
[2] Model Rule 3.7, com. 3 states that the equivalent provision in the Model Rules ?recognizes that where the testimony concerns the extent and value of legal services rendered in the action in which the testimony is offered, permitting lawyers to testify avoids the need for a second trial with new counsel to resolve that issue. See also Wolfram, Modern Legal Ethics 386 (1986).
[3] This arrangement is not forbidden by Bar Rule 3.3(d) which permits a division of fees without regard to the responsibility assumed by the respective attorneys for carrying on the litigation.
[4] Contracts promising extra compensation to witnesses contingent upon the outcome of the litigation have also been held unenforceable because they are against public policy. It has been stated that:
(S)uch extra compensation is almost certain to affect the attitudes of the witness and to color his testimony, consciously or unconsciously. This is true even though there is no perjury and no intention to induce perjury. Doubtless such bargains are not effectively discouraged by merely declaring them to be illegal and unenforceable; but as in many other cases it is better than nothing, especially when the attempt to enforce more drastic penalties would fail. 6A Corbin, Contract (1951) quoted in N.Y. State Bar Ass?n, op. 547 (1982).
Enduring Ethics Opinion
Opinion #112. Law Firm Advertising as Title Company
Issued by the Professional Ethics Commission
Date Issued: November 1, 1990
Question Presented
Law firm A&B operate a title company, formerly as a separate corporation owned by the firm?s partners, and now under the name of the law firm. A&B wish to list the firm in the yellow pages of the telephone book under ?title companies.? It has inquired as to whether such advertising is permitted under the Bar Rules.
Answer
Our review of the Bar Rules does not disclose any prohibition against the proposed practice. Rule 3.9(a) permits advertising as long as it is not false, fraudulent, misleading or deceptive. Rule 3.9(b) defines various types of false advertising, none of which prohibit the proposed advertising. The mere statement in a yellow pages listing that the law firm provides title insurance is a true statement which can be expressed in the yellow pages or in any other form of oral or written communication. While it is conceivable, of course, that the listing might include statements which could be framed to be misleading, we believe that the listing is not per se impermissible under Rule 3.9.
Rule 3.8 prohibits an attorney from holding herself out as an expert, either expressly or implicitly. Again, however, we see nothing in the rule, or any prior interpretation of it, which causes us to conclude that such a listing constitutes a designation of a specialty. While it may be argued that advertising by a law firm under the heading of ?title companies? may constitute designation of a specialty, we are not persuaded by such a contention. Moreover, it may be that the providing of title insurance does not even constitute the practice of law, let alone designation of a specialty. Although it is frequently the case that title insurance is provided through insurance agencies operated by or affiliated with law firms, it is possible to be such an agent without being a lawyer. That being the case, we cannot conclude that such a listing would constitute designation of a specialty, any more than would the occasional practice of lawyers acting as real estate broker and so advertising themselves to the public.
We conclude, therefore, that the proposed listing of the law firm is permitted by the Bar Rules.
Enduring Ethics Opinion
Opinion #111. Disqualification of Former State Administrative Agency Board Member Entering Private Practice
Issued by the Professional Ethics Commission
Date Issued: November 1, 1990
QUESTION
Before graduating from law school the inquiring attorney was a member of the board of an administrative agency of this State having rulemaking, licensing and enforcement responsibilities. The request for advice asks under what circumstances the Bar Rules would preclude the attorney from appearing before the board: A) ?representing parties who came before the Board during my term or?; B) ?representing parties . . . who have matters that have a direct relationship to matters that came before the Board [during the attorney?s term].? The board on which the attorney served had extensive permit granting authority, which was exercised through rules that treated some such proceedings as adjudicatory. Others were delegated to a staff over which the Board had no administrative authority. Staff decisions on permits could be appealed to the Board. The board also had limited enforcement powers, which could be exercised through a hearing procedure. Other functions of the Board were not adjudication. For example, it engaged in rulemaking.
OPINION
The inquiring attorney suggests that the questions are controlled by either Bar Rule 3.4(g) or Bar Rule 3.4(h).[1]
The Commission has concluded that, given the procedure of the Board in question, Rule 3.4(g) is likely to be controlling in nearly all cases.
Rule 3.4(g) provides:
(g) Prior Judicial Activity. A lawyer shall not accept private employment in a matter upon the merits of which he has acted in a judicial capacity.
The reporter?s notes to the rule indicate that ?judicial capacity? should be given a broad interpretation, including ?any . . . official fact finding or adjudicatory position.? We accept the interpretation suggested by the Reporter and therefore treat the attorney?s board membership as within the scope of Rule 3.4(g).
Rule 3.4(h)(1) provides:
(h) Successive Government and Private Employment.
(1) A lawyer shall not accept private employment in a matter in which he formerly represented the government of a state, or of the United States, or any agency, entity, or political subdivision of a state or of the United States as client, or in which he participated personally and substantially as a public officer or employee, or when such private employment may involve the use of confidential information obtained through the former governmental representation or employment.
Rules 3.4(g) and (h)(1) concur in requiring as a predicate some prior connection as a government official with a ?matter.? They differ in the nature of the connection and in their consequences. Rule 3.4(g) rests solely on action on the merits of a ?matter? in an ?official fact finding or adjudicatory position.? Rule 3.4(h)(1) may rest on representation of the government as an attorney or on personal and substantial participation in a matter as a public officer or employee, or on the receipt of confidential information about a matter as a result of government employment. Rule 3.4(h)(1) does not necessarily require action of any kind on the merits of a matter.
Having a narrower predicate, Rule 3.4(g) has broader consequences. When an attorney is barred from employment by Rule 3.4(g), no partner or associate or affiliated lawyer may accept employment from which the attorney who is subject to Rule 3.4(g) would be barred. Because of a 1983 amendment to 3.4(k), however, when 3.4(h)(1) is the applicable rule, partners, associates and affiliated attorneys are not barred from accepting employment not permitted to the target attorney if that attorney is screened from participation as a professional and receives no economic benefit from the representation.
The application of both rules requires identification of a ?matter? with which the attorney was connected in some way during prior government service. Opinion 19 of the Grievance Commission[2] and the Reporter?s Notes to the 1983 amendment of Rule 3.4(h)(1) concur in defining ?matter? in Rule 3.4(h)(1) as ?a discrete and isolatable transaction or set of transactions between identifiable parties.? We believe the term ?matter? should have the same meaning in Rule 3.4(g) as it has in Rule 3.4(h)(1). In both rules this key term serves to draw the line between subsequent employment that should be permissible in the interest of encouraging lawyers to enter public service and employment that must be barred because it could impair the integrity of a lawyer?s previous acts as a public official or result in misuse of a former public office for private gain.?[3]
The licensing authority of the Board requires that we determine the scope of the ?matter? when a license issues. We conclude that when a license has indefinite duration, subsequent proceedings to modify, interpret or enforce the license, or conditions of the license, involve the same matter as the original licensing proceeding. Renewal of a license with limited duration, on the other hand, will not involve the same matter. The line may appear to be thin, but we conclude it should be drawn at that location.[4]
Because the applicability of both rules turns on the ?matter? as to which employment has been accepted, the attorney will not be disqualified from representing a client just because that client appeared before the board during the attorney?s service or is still involved in some way with the same matter that was before the board while the attorney served on it or a related matter. The question is whether the matter as to which the attorney accepts employment is disqualifying under 3.4(g) or 3.4(h).
Applicability of Rule 3.4(g)
Rule 3.4(g) will disqualify the attorney from further participation in matters: 1) that were before the board during the attorney?s tenure for adjudication; and 2) as to which he acted on the merits. Permits on which the Board took plenary action on the merits, including but not limited to action after hearings, permits on which the Board acted as a result of an appeal from a staff decision, and enforcement decisions reached by the Board after hearing, plainly involve adjudication within the scope of Rule 3.4(g). If the attorney voted on any such matter, there was action on the merits for the purposes of Rule 3.4(g).
It was also customary for the Board to approve, without separate vote, a list of consent orders and staff recommendations referring matters to the Attorney General for enforcement action. Although in practice the board did not deliberate on individual orders and recommendations, the governing statute required Board action on all of them, and the Board voted on all. The purposes of Rule 3.4(g) require that action on the merits be construed broadly. (See Opinion 80) A vote, even without deliberation on any item on the list, must therefore be deemed action on the merits. The Board acted in no other way. Accordingly, neither the lawyer nor any member or associate of his firm may accept employment in any matter that came before the Board on a consent agenda on which he acted while he was a member. If the result seems unduly restrictive, the remedy would seem to be an amendment to Rule 3.4(k).
On the other hand, Rule 3.4(g) will not disqualify the former board member from representation that involves a rule adopted while he was on the board, since rule‑making is not adjudication.
Applicability of Rule 3.4(h)(1)
The inquiring attorney did not represent the government as an attorney during his tenure on the Board, since he was not an attorney then and that was not his job in any case. The applicability of Rule 3.4(h)(1) thus will turn on finding that his present employment involves 1) the same ?matter? as he encountered while a member of the Board; and, 2) his ?personal and substantial? participation as a government official in the ?matter,? or 3) his possession of confidential information that could be useful in carrying out any employment as an attorney he may later be offered.
Members of the attorney?s board had no administrative responsibilities. Thus, in nearly all cases it seems that the attorney?s personal and substantial participation in a matter will consist of acting on the merits of that matter as a board member, that is, in a judicial capacity as those terms are used in Rule 3.4(g). Consequently, the restrictions of 3.4(g) rather than 3.4(h)(1) would apply.
It seems unlikely that the attorney would have received confidential information in any way other than part of a board proceeding, and therefore unlikely that he received any confidential information while serving on the board. Information that is available to the general public, regardless how narrowly the information may, in reality, have been disseminated is not confidential within the meaning of Rule 3.4(h). Virtually all the files and proceedings of the Board in question are public records.[5] Nor is the former board member?s knowledge of or assumptions about the views of fellow members or the reasons for a particular decision confidential information, as that phrase is used in Rule 3.4(h)(1).
As was the case with Rule 3.4(g), Rule 3.4(h)(1) would not bar the attorney from employment involving rules adopted by the board while he was a member, whether that employment consists of representation in proceedings in which the rule is attacked, interpreted or defended, or consists of representation in subsequent rule‑making to amend or repeal the rule. Rule‑making is not a proceeding between identifiable parties and thus does not create a ?matter,? as that term is used in Bar Rule 3.4(h)(1).
FOOTNOTES
[1] The Committee does not, of course, have authority to opine on the impact of 5 M.R.S.A. Sec. 18.
[2] The Grievance Commission formerly had the task of issuing advisory opinions.
[3] The inquiring attorney suggests it might be relevant that he was not a lawyer during his government service. Except for situations in which Rule 3.4(h)(1) could only be applicable because of prior representation of the government as an attorney, neither 3.4(g) or 3.4(h)(1) requires that the disqualifying prior service be legal in nature or that the attorney have been a member of the bar at the time.
[4] The Commission expresses no opinion on the identity and extent of a ?matter? in administrative proceedings not mentioned in this opinion, for example ratemaking.
[5] Some agency files may contain so‑called trade secrets made confidential by law.
Enduring Ethics Opinion
Opinion #110. Representation of "Potentially Responsible Parties" in Superfund Litigation
Issued by the Professional Ethics Commission
Date Issued: October 12, 1990
Question
In proceedings under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. 9601, et seq. also variously known as ?CERCLA? or ?Superfund,? certain groups of parties, sometimes generators or transporters of hazardous waste, or owners or operators of disposal sites (commonly referred to as ?Potentially Responsible Parties,? or ?PRPs?) often agree to share liability upon the basis of a formula. In a substantial number of Superfund cases, the sharing of site clean-up costs is negotiated among groups of PRPs sharing common liability characteristics. Thus, for instance, a group of waste generators who shipped relatively minor amounts of hazardous waste all having comparable levels of toxicity may typically, as a class, be offered an opportunity to settle their liabilities at an advantageous cost per gallon. Under the CERCLA statute these individuals would be jointly and severally liable inter sese, along with the other more (volumetrically) significant contributors to the Superfund site.
The question posed relates to the propriety of multiple representation under these circumstances.
Opinion
It is the committee, or the group of PRPs which is the client; not the constituent PRP members of the group. The attorney?s duty of loyalty is to the group?not to the individual PRP. In this sense, representation of such a group is analogous to representation of a creditors committee in a bankruptcy reorganization. There, in the absence of a 100% distribution, an underlying conflict exists with respect to the interests of the individual members of the creditors committee as well as the creditors represented by the committee. However, the representation of the committee itself poses no conflict.
Where the attorney also represents an individual PRP, Bar Rule 3.4 controls. Before accepting employment by a committee or group of PRPs, an attorney must disclose both to the committee or group and to any individual PRP‑client the possible effect of such multiple representation upon the exercise of the lawyer?s independent judgment. Bar Rule 3.4(d). Such disclosure should include an outline of any democratic or other decision‑making process which has been or is likely to be adopted by the committee or group.
If the multiple representation is likely to result in representation of differing interests or to have an adverse effect upon the exercise of the lawyer?s independent professional judgment, the attorney should not accept employment. Bar Rule 3.4(b), (c). Similarly, the attorney should withdraw from employment if circumstances later occur under which the attorney would not, had he or she known of the facts at the outset of representation, have accepted employment.
Enduring Ethics Opinion
Opinion #198. Attorneys handling of fees in Social Security Administration case where client was previously represented by a non-attorney advocate.
Issued by the Professional Ethics Commission
Date Issued: December 4, 2009
Attorney X has inquired for guidance in a case where a Social Security Claimant was previously represented by a non-attorney advocate. Attorney X stated that the advocate had withdrawn from the case but was waiting to get paid. Attorney X had received his fee and told the client that he would pay the advocate for her services but was concerned about a possible violation of Rule 5.4 of the Maine Rules of Professional Conduct, which prohibits fee splitting with non-lawyers, notwithstanding the attorney's proposed treatment of the disbursement as a "cost" and not a fee.
Question
Does the arrangement proposed by Attorney X violate the requirements of the Maine Rules of Professional Conduct?
Discussion
The proper route for Attorney X and the non-attorney advocate to take is to have the advocate file a Fee Petition with the Social Security Administration. The Administration requires that the Petition be filed within 60 days of the date of the Notice of Favorable Decision. Attorney X's Fee Agreement or Fee Petition will be adjusted by the Administration, if appropriate, for services rendered by the non-attorney advocate. If the 60-day deadline has passed, and/or, as in the instant case, Attorney X has already been paid his entire fee, Attorney X may refund a portion of his fee to the client to make a direct payment to the non-attorney advocate, if he believes that keeping his entire fee would render the client's total fees unreasonable. See Rule 1.5(a) of the Maine Rules of Professional Conduct. An attorney is always free to discount his/her fee to a client.
Conclusion
A lawyer may not share fees with a non-lawyer except under those circumstances set forth in Rule 5.4 of the Maine Rules of Professional Conduct, which are not present here. This Commission acknowledges that full disclosure and counsel to the client regarding his/her potential liability for fees to a prior non-attorney advocate is paramount, in Social Security and other similar administrative matters, to avoid exposing the client to litigation by the non-attorney advocate to collect his or her fees. The Commission suggests that lawyers handling these cases incorporate the following language into the standard contingent fee agreement, found at the end of Rule 1.5 of the Maine Rules of Professional Conduct:
(7) Attorney has inquired of Client as to any prior representation in this matter by a non-attorney advocate and has advised Client that he/she may be separately liable to that advocate for fees incurred for services rendered. Client states that a non-attorney advocate has/has not provided services to Client in this matter. (Insert name and address of non-attorney advocate).
(8) Attorney agrees to promptly provide the non-attorney advocate named above with a copy of any Notice of Favorable Decision rendered in this matter, so that the advocate may file a Fee Petition with the Social Security Administration, if appropriate, within 60 days of the date of the Notice. The Client understands that he/she has the right to agree or object to any Fee Petition filed with the Administration and that if he/she objects, he/she must do so in a timely fashion.
Enduring Ethics Opinion
Opinion #47. Representing Both Personal Representative and Beneficiaries of the Estate
Issued by the Professional Ethics Commission
Date Issued: May 10, 1984
Question
An attorney was requested by A to assist in probating her mother's will. The attorney had represented A previously and had prepared her mothers will upon As recommendation. As sister B, who was named in the will as co‑ personal representative, agreed to the representation.
The attorney has now learned that A and B have had a poor relationship since childhood. Although A initially assumed the principal role in winding up the estates affairs, she allowed B to take control after the latter had criticized her management abilities. Since that time, however, A has advised the attorney that B has been using assets of the estate for personal benefit and otherwise abusing her position of trust. She was also told by A that B had coerced a younger sister into permitting her to borrow against the sisters share of the estate. A nevertheless does not want to oust B as personal representative although she has requested B to resign. In fact, it appears likely that A herself will resign if B refuses to do so. The attorney wrote to B several months ago informing her of the alleged abuses and requesting her to come in and give her side of the story. B has not responded.
The attorney has asked us whether she represents A, A and B jointly, or the estate. She also inquires whether she should resign and whether she owes any duty to the estate or to the other devisees under the will to take action to redress the consequences of Bs misconduct.
Opinion
The initial question posed, upon which the rest depends, is who is the attorneys client. This question must be resolved on the basis of the state laws rather than the application of ethical standards.
The Commission has traditionally been reluctant to offer guidance regarding such matters as to which it has no special expertise. The Commission is nevertheless prepared to address the remaining issues presented on the basis of its assumption that the inquiring attorney represents the copersonal representatives jointly and not the estate. This assumption is based on the language of 18A M.R.S.A. § 3‑715(21) authorizing the personal representative of an estate to "employ persons, including attorneys . . . to advise or assist the personal representative in the performance of his administrative duties."[1]
Assuming that the attorney represents the two sisters in their capacities as personal representative, it seems clear that, if she is unable to deal constructively with B, she should resign pursuant to Bar Rule 3.5(a). Rule 3.4(c) provides that an attorney shall not continue multiple employment if the exercise of his independent professional judgment on behalf of a client will be, or is likely to be, adversely affected by his representation of another client. . . . In the present case, the attorneys previous association with and loyalties to A have made it difficult if not impossible for her to represent B objectively. Moreover, the rule goes on to require withdrawal where such multiple representation would be likely to involve him in representing differing interests. . . . There seems to be little doubt that As interest as co-personal representative differs from that of B.
If A resigns before the attorney does, the latters withdrawal would no longer be mandated by the rules. If B persists in her refusal to communicate with the attorney or to follow her advice, however, she would be well advised to request permission to withdraw under the provision of Rule 3.5(c).
Finally, we are asked what obligation, if any, the inquiring attorney has to protect the other devisees or to the estate against the apparent abuses of B. Rule 3.6(c) states that an attorney shall encourage his client to rectify any fraudulent acts of which he may have been guilty. Since the information suggesting wrongdoing on the part of B was revealed to the attorney in the course of the attorney‑client relationship, however, the limitation on revealing client confidences or secrets imposed by Rule 3.6(1) would appear to prevent her from taking any further steps to expose Bs alleged misdeeds. Moreover, it appears that the other beneficiaries are generally aware of what B has been doing with respect to the estates assets. They are, of course, free to engage counsel of their own to protect their respective interests in the estate.
Footnote
[1] The quoted language appears to represent a codification of the previously existing common law rule. In Jones v. Silsby, 143 Me. 225, 229, 61 A.2d 117 (1948), the Law Court held that fees for the necessary services of an attorney were a claim against the personal representative personally although reasonable attorneys fees are usually allowed to be paid from the estate.
Enduring Ethics Opinion
Enduring Ethics Opinion #47 [March 2022]
Opinion #48. Enforceability of Medical-Legal Cooperation Code
Issued by the Professional Ethics Commission
Date Issued: May 10, 1984
Question
The Commission has been asked to render an opinion as to whether a violation of the Code of Cooperation of the Maine State Bar Association and Maine Medical Association (first published in 1967) can be a matter for disciplinary action under Rule 3. We are also asked whether the adoption of Rule 3 by the Supreme Judicial Court has made the Medical‑Legal Code unenforceable.
Opinion
It is not entirely clear to the Commission whether the inquiry was directed at matters which are considered to violate the Medical‑Legal Code regardless of whether they would also violate Rule 3. If the question is whether a violation of the former would automatically constitute a violation of Rule 3, the answer must be in the negative.
Disciplinary action may be initiated whenever it is alleged that a lawyer has been guilty of ?conduct unworthy of an attorney.? See 4 M.R.S.A. § 851. Violations of the standards of ethical conduct established by Rule 3 are per se violations of the statute. See Rule 3.1(a). Since a lawyer may also be guilty of unethical conduct which is not specifically proscribed by Rule 3, however, see, e.g., Board of Overseers v. Rodway, 461 A.2d 1062 (Me. 1983), it is conceivable that a violation of the Medical‑Legal Code might constitute conduct unworthy of an attorney even though the misconduct was not dealt with by Rule 3. This would be so, not because the Medical‑Legal Cooperation Committee had so ruled, but because the Grievance Commission had independently reached the same conclusion based on its own review of the facts.
Enduring Ethics Opinion
Opinion #49. Part-time District Attorney Representing Private Client Where County Commission Acts as Decision-Maker
Issued by the Professional Ethics Commission
Date Issued: May 10, 1984
Opinion
The Grievance Commission has been asked the following questions:
A part‑time assistant district attorney is also employed by a private law firm that has as clients a number of local towns. The district attorney?s office is required by statute to represent that county. Occasionally, in matters such as tax appeals there is litigation involving a town on one side and the county on the other. If the particular assistant district attorney does not involve himself in any of these matters, either for the district attorney?s office or for his private firm, is there a conflict of interest problem? What if the assistant district attorney refrains completely from representing the county? What if the assistant district attorney refrains from any personal representation of towns for his private firm? Does it make a difference if the law firm is on retainer for the town or whether he is hired on a case by case basis as part of a continuing relationship?
Assistant district attorneys are appointed by the district attorney to serve at his pleasure. They are directed to ?assist the district attorney in the ordinary duties of his office.? (20 M.R.S.A. § 554‑A.)
Among other duties, the district attorney is required to ?appear for each county within the district for which he was elected, under the direction of the county commissioners for each county within such district, in all actions and other civil proceedings in which any county within such district is a party or interested, or in which the official acts and doings of said county commissioners are called in question, in all the courts of the State, and in such actions and proceedings before any other tribunal when requested by said commissioners.? (30 M.R.S.A. § 501)
Assistant district attorneys have no independent statutory duties; whatever the district attorney is required to do they may be required to and must do in the absence of their employer. Hence, it seems inescapable that all assistants represent all the counties in the district regardless of how duties of the office may be divided. Part‑time assistants therefore may not represent any party opposing the county or the county commissioners in any of the proceedings described in Section 501. If they may not do so, neither may their partners. If a town client of the assistant?s firm is opposed to the county in a litigated matter, the firm is disqualified and may not appear for the town.
This analysis does not alone answer the question, however, since ?tax appeals? are not really ?litigation involving a town on one side and the county on the other.? If the question refers to abatement proceedings, as we assume, the opposing parties appear to be the taxpayer applying for abatement and the town, both before the county commissioners and in subsequent proceedings. The county commissioners are not even a proper party to any Superior Court review of their decision. Shawmut Inn v. Town of Kennebunkport, 428 A.2d 384, 388 (1981); Assessors, Town of Bristol v. Eldridge, 392 A.2d 37, 3940 (Me. 1978). They function as a quasi‑judicial appellate tribunal. 36 M.R.S.A. § 844.
Although the district attorney would not represent the county on appeal in such cases (since the county is not a party) it does not follow that his office will not participate at some stage as attorney for the commissioners. The district attorney?s office may advise the commissioners about legal aspects of an abatement and even help them conduct a hearing. When that happens the district attorney is under a professional obligation to provide independent judgment to the commissioners. Clearly the same attorney may not both advise the commissioners and represent one of the parties to a proceeding in which the commission acts as decision maker.
We conclude it would likewise be improper for a part‑time assistant district attorney to represent a town (or taxpayer) before the county commissioners in an abatement appeal even if he had nothing to do with the case in his capacity as assistant district attorney. Although the vicarious disqualification rule [3.4(k)] does not apply to common employment in a government agency, an assistant district attorney?s sole function is to assist the district attorney in performing the duties of the district attorney?s office. Thus necessarily he or she always represents the county. Representing the county commissioners, Rule 3.4(b) and (c) bar the assistant from representing a party appearing before them as a quasi‑judicial body hearing abatement appeals. If the assistant may not represent a party appearing before the county commissioners, neither may any member of the assistant?s firm. [Rule 3.4(k)
Enduring Ethics Opinion
Opinion #50. Representing Partner in Case in Which He Will Be Called as a Witness
Issued by the Professional Ethics Commission
Date Issued: May 10, 1984
Facts
Attorney A is a party in a civil matter unrelated to the performance of any legal services (e.g., a defendant in a traffic offense, divorce proceeding or contract dispute). He has requested Attorney B who is a member of the same law firm to represent him. Neither B nor any member of the law firm will be a witness in the trial except, of course, A.
Question
Can B represent A?
Opinion
The Maine Bar Rules prohibit representation by B.
Rule 3.4(j) reads as follows:
A lawyer shall not accept employment in contemplated or pending litigation if he knows, or should know, that he or a lawyer in his firm is likely or ought to be called as a witness. This rule does not apply where the predictable testimony will relate solely to uncontested matters or to legal services furnished by the lawyer, or where the distinctive value of the lawyer or his firm in the particular case would make denial a substantial hardship on the client.
A major purpose of the Rule, as pointed out in some detail in ABA Formal Opinion 339, is to prevent a situation in which a lawyer, or a lawyer in his firm, is placed in ?the unseemly position of arguing his own credibility or that of a lawyer in his firm.? In such a situation, it is argued, a client?s case could be weakened where a supporting witness may be subject to impeachment because of an interest in the outcome of the trial. Furthermore, it has been suggested that opposing counsel may be handicapped in challenging the credibility of the lawyer witness.
It may be argued that under the facts set forth above no such risks are present. After all, the lawyer‑witness as a party has an interest in the outcome of the trial much the same as any non‑lawyer party, and it may be difficult to detect unseemliness where the lawyer is arguing the credibility of his client under the above facts. Indeed one might further argue that Rule 3.4(f) would provide more appropriate guidance in determining the wisdom of such representation under these circumstances.
However, to answer the question in the affirmative would be tantamount to amending the Rule which is beyond the authority of this commission.[1] No distinction is made between the lawyer‑witness who is a party and one who is not a party. The Rule permits only three exceptions: (a) where the testimony relates to uncontested matters, (b) where the testimony involves legal services furnished by the lawyer, and (c) where the distinctive value of the lawyer or his firm in a particular case would make denial a substantial hardship on the client. The facts as stated do not come within any one of these exceptions.
Thus the Commission concludes that Rule 3.4(j) prohibits employment of B by A without additional circumstances which would permit representation under one of the exceptions described therein.
Footnote
[1] It is perhaps of some interest to note that under the new ABA Model Rules of Professional Conduct, representation would probably be permitted under the facts posed by this question (c.f. Rule 3.7).
Enduring Ethics Opinion
Opinion #51. Refusal to Provide Deposition to Ex-Client Without Reimbursement of Cost
Issued by the Professional Ethics Commission
Date Issued: December 5, 1984
Question
May a lawyer refuse to provide a former client a deposition and other data in the client?s file unless and until the former client reimburses the lawyer for the costs of those items which were paid by the lawyer?
Opinion
This inquiry arises out of a situation in which a lawyer was representing a client in a still pending civil action; the client failed to pay any sum on account of fees or disbursements; and the lawyer has obtained permission from the Superior Court to withdraw from further representation. The client has now obtained another lawyer who has requested the entire file from his client?s former lawyer, and that file has been provided, except for a deposition and certain data, the costs of which were advanced by the lawyer first representing the client. Under these circumstances, the lawyer who first represented the client inquires as to the ethical propriety of his insistence on reimbursement from his former client for costs prior to turning over materials obtained as a result of his advancing such costs.
It is the opinion of the Grievance Commission that under these circumstances the lawyer is required to furnish to the lawyer?s former client the contents of the former client?s file, including the deposition and other data, the costs of which were advanced by lawyer, and that it would be improper under M. Bar. R. 3.7(c)(1) for the lawyer to condition the furnishing of such material on reimbursement for such costs.
Several provisions of the Maine Bar Rules bear on this inquiry:
M. Bar R. 3.5(a)(2) provides inter alia, that ?[a] lawyer shall not withdraw from employment until he has taken reasonable steps to avoid foreseeable prejudice to the rights of his client, including . . . delivering to the client all papers and property to which the client is entitled. . . .?
M. Bar R. 3.5(a)(3) provides that ?[w]ithdrawal shall not be conditioned upon payment by the client for services to date; and a lawyer who withdraws from employment shall refund promptly any part of a fee paid in advance that has not been earned.?
M. Bar. R. 3.6(f)(2)(iv) provides, inter alia, that a lawyer shall ?promptly deliver to the client, as requested by the client . . . properties in the possession of the lawyer which the client is entitled to receive.?
M. Bar. R. 3.7(c)(1) provides, inter alia, that while a lawyer may ?[a]ssert a lien granted by law against the proceeds of such action or litigation to secure his fee or expenses,? this ?does not authorize an attorney to assert a lien on a client?s file in order to secure payment of his fee. The assertion of such a lien (if any exists) is improper.?
M. Bar R. 3.7(d) provides, inter alia, that ?a lawyer may advance or guarantee the expenses of litigation, including court costs, expenses of investigation, expenses of medical examination, and expenses of obtaining and presenting evidence.?
While these provisions of the Maine Bar Rules do not explicitly address the question of payment for a lawyer?s disbursement, as distinguished from payment for a lawyer?s services, the Commission construes M. Bar. R. 3.7 (c)(1), which prohibits a lawyer from asserting a lien on a client?s file in order to secure payment of his fee, as encompassing a prohibition against the assertion of a lien on a client?s file in order to secure the payment of a lawyer?s disbursements. Any other construction of that Rule would be prejudicial to the former client and would thus be inconsistent with M. Bar. R. 3.5(a)(2) which expressly requires that a lawyer shall not withdraw from employment until he has taken reasonable steps to avoid foreseeable prejudice to the rights of his client. Given the Commission?s construction of Rule 3.7(c)(1), the Commission concludes that under the circumstances presented here, it would be improper under that Rule for the lawyer to condition the furnishing of the deposition and other data to his former client on reimbursement for his costs for that material. The Commission also notes that this result is consistent with an earlier opinion of the Maine Bar Association Professional Ethics Committee, Opinion No. 39, issued February 2, 1976.
The result reached here does not mean that the lawyer has no recourse. If a client has agreed to be liable for the lawyer?s reasonable expenses and disbursements, a lawyer who withdraws from representation, with leave of Court, may have a civil remedy against his former client to recover such expenses and disbursements.
Enduring Ethics Opinion
Enduring Ethics Opinion #51 [May 2017]
Opinion #52. City Attorney as Partner of Planning Board Member and Board of Appeals Member
Issued by the Professional Ethics Commission
Date Issued: December 5, 1984
Facts
City X has a Planning Board, a Zoning Board of Appeals and a City Solicitor. Law firm A, B & C has attorney A serving as a volunteer on the Planning Board, attorney B serving as a volunteer on the Zoning Board of Appeals, and attorney C retained as City Solicitor. None of the attorneys in the firm represent private clients before either Board, nor does attorney C ever appear before either Board representing the interests of the City. Attorney C does, however, represent the City in Court when an appeal is taken from a decision of one of the Boards. And, attorney C as City Solicitor has given legal opinions to the Boards upon request.
The Commission has been asked whether this situation gives rise to any conflict of interest.
Opinion
Maine Bar Rule 3.5(b) provides as follows:
A lawyer shall not accept employment if the exercise of his independent professional judgment in behalf of a client will be, or is likely to be, adversely affected by the acceptance of such employment, or if it would be likely to involve him in representing differing interests, except to the extent such employment is permitted by subdivision (d) of this rule.
We see nothing inherent in attorney C?s representation of the City in this situation that would affect his independent professional judgment. The mere fact of having partners serving the City in their volunteer capacities would not be expected to influence the advice that attorney C gives either directly to the City Council or to its appointive Boards.
It is, of course, possible to hypothesize particular situations in which a conflict might arise. If, for example, one of attorney C?s partners on one of the City?s Boards were to take a position on his Board that was so strongly felt and so thoroughly communicated to attorney C that C?s legal advice to that Board actually became influenced or was likely to be influenced by his desire to please his partner, then obviously C?s duty would be to decline to advise the City?s Board on that issue. However, this hypothetical situation has not, as far as we know, actually arisen and we do not think it likely that such an influence on attorney C?s independent judgment would likely occur in the normal course.
Nor do we see in this case any likely violation of Rule 3.2(d) pertaining to the acts of lawyers as public officials. That Rule states:
A lawyer who holds public office shall not:
(1) Use his public position to obtain, or attempt to obtain a special advantage in legislative matters for himself or for a client under circumstances where he knows, or it is obvious, that such action is not in the public interest;
(2) Use his public position to influence, or attempt to influence, a tribunal to act in favor of himself or of a client;
(3) Accept any thing of value from any person when the lawyer knows, or it is obvious, that the offer is for the purpose of influencing his action as a public official.
While clearly attorney A and attorney B are public officials within the meaning of this Rule, the fact that the law firm represents no clients before the Planning Board or Zoning Board of Appeals removes any temptation for those attorneys to misuse their public position, and distinguishes this situation from the thorny issues which were thoroughly discussed in Opinion No. 45.
Enduring Ethics Opinion
Opinion #53. Individual Attorneys as "Associates" But Not Partners
Issued by the Professional Ethics Commission
Date Issued: March 14, 1985
Question
The Commission has been asked by attorney X, a sole practitioner who ?associates? with two other attorneys, for an advisory opinion regarding the propriety of using on his letterhead (below his name) the following words:
An individual, general practice in association with [attorney Y] and [attorney Z].
The three attorneys in question have separate practices in separate towns but intend to share some cases based on their respective experience, preference, and location. Fee sharing is to be worked out on a case by case basis. It is not intended by the attorneys that their relationship be a formal partnership. Although they fully accept liability for each other?s negligence (not only in shared cases, but in all cases any of them handles), they do not accept liability for each other?s debts incurred in the practice of law such as for rent, equipment purchases, or other business transactions.
Opinion
Maine Bar Rule 3.9 now controls issues of publicity, advertising, and solicitation by lawyers. Its general approach is to permit any advertising which is not false, fraudulent, misleading, or deceptive. Whether the words quoted above are misleading or deceptive depends on whether they omit to state any material fact necessary to make them not misleading [Rule 3.9 (b)(2)], or are intended or are likely to create an unjustified expectation [Rule 3.9(b)(3)], or contain a representation or implication that is likely to cause an ordinary prudent person to misunderstand or be deceived thereby [Rule 3.9 (b)(6)].
In a 1980 advisory opinion written by the Grievance Commission a similar factual situation was presented except that the proposed letterhead would have used simply the expression ?Law Associates.? In that opinion the Commission held that the expression was ambiguous and could mislead the reader into believing that the attorneys were actually partners.
In the present variation of these facts this Commission concludes that the proposed wording is sufficiently specific to prevent ?an implication . . . likely to cause an ordinary prudent person to misunderstand or be deceived . . .? within the meaning of Rule 3.9(b)(6). Nor do we believe that any of the other provisions of Rule 3.9(b) would be violated. In this case the statement that the attorney has ?an individual, general practice? removes any suggestion of a partnership that the words ?in association with? by themselves might otherwise imply.
We have reached the foregoing conclusion while aware that ABA Informal Opinion No. 1265 holds that ?DR 2‑102(A)(4) permits the listing or identification of lawyers on firm letterheads only if the lawyers are partners . . . or associates or have the relationship described as `Of Counsel? or equivalent.? We conclude that DR 2‑102(A)(4) has no direct counterpart in the Maine Bar Rules.
Enduring Ethics Opinion
Opinion #54. Attorney for Corporation Who Also Serves as Director or Trustee
Issued by the Professional Ethics Commission
Date Issued: March 14, 1985
Question
Is an attorney who is a member of the Board of Directors or Trustees of a profit or nonprofit corporation precluded, by holding that office, from representing the corporation as a client?
Opinion
Attorneys who advise and represent corporations of all kinds are commonly asked to serve and frequently do serve as Directors of Trustees of the corporation. The prevalence of this practice suggests that the difficulties it can create for the attorney‑director are either not often acknowledged, or not often deemed a serious impediment. These difficulties include at a minimum, the following:
First, the lawyer‑director becomes part of corporate management and therefore in a sense becomes client and lawyer at the same time.
Second, the lawyer joins one component of a client entity having shareholders or members and officers as additional components. As counsel to the corporation, of course, the attorney represents the entity, not any of its components. When these components work at cross‑purposes, as sometimes happens, corporate counsel must insure that his independent professional judgment is exercised for the entity as a whole, not the director component alone. Membership on the Board is likely to make the judgments facing a lawyer in these circumstances much more difficult and can make them suspect.
Third, being a director the attorney will be more likely to be named as a party to litigation over corporate affairs or as a likely witness. His firm, if any, may be named as well. Additional counsel retained for this litigation may be required. Even if the attorney is not named as a party, the litigation may involve business decisions in which he was a participant. At a minimum this would strain his objectivity representing the corporation in litigation.
Fourth, the attorney‑director probably should not participate in the decision to choose counsel for the corporation, if he is one of the candidates, and should not pass on his own compensation. 13A M.R.S.A. §717 and 13B M.R.S.A. §713 do not require outright disqualification, and it may be argued that the Bar Rules do not apply, since the attorney is not acting as such in making these decisions, but abstention would seem to be the prudent course.
Notwithstanding these problems, and although the wisdom of the practice has been questioned,[1] dual service as a director and as counsel to a corporation is not, without more, a violation of any bar rule. Since only one client is involved, neither Rule 3.4(b), nor 3.4(c) or (d) is applicable. The attorney‑director case may be governed by Rule 3.4(f), which cautions against accepting employment, and requires informed written consent of the client, if an interest of the lawyer may affect the exercise of professional judgment on behalf of the client. Rule 3.4(f) does not, however, impose an absolute bar. Moreover, a director owes duties of fidelity, independence and judgment to the corporate entity not dissimilar to the duties of lawyers. Hence, it will not be clear in all cases that the lawyer?s interest as director will or even might affect the exercise of the professional judgment of counsel to the corporation. We merely note some of the number of situations in which counsel must be alert to that possibility.
Footnote
[1] Brandeis, Other People?s Money and How the Bankers Use it, 198, 1932 Ed.; 2 Swaine, The Cravath Firm and Its Predecessors, 18191949, 910 (1948); Rostow, ?The Lawyer and His Client?, 48 A.B.A. J. 146, 147 (1962).
Enduring Ethics Opinion
Opinion #55. Disclosure of Confidences of One Client in Defending Grievance Filed by Another
Issued by the Professional Ethics Commission
Date Issued: April 22, 1985
I. Bar Counsel?s Request for Advisory Opinion.
Pursuant to Maine Bar Rule 11(c)(1), Bar Counsel has requested an advisory opinion from the Professional Ethics Commission with respect to the following facts:
Attorney X has been complained about by Client C. As part of the factual allegations within C?s complaint, C has alleged certain misconduct by X in terms of his relationship with another client, D. The nature of these allegations is that X engaged in a conflict of interest and disclosed C?s confidential communications, in the context of X?s representation of D. Therefore, counsel for X, in preparation of his answer to C?s grievance complaint, has inquired of Bar Counsel whether X may properly disclose matters otherwise confidential between X and D. D, through his new counsel, has indicated to counsel for X, that D will not consent to any such disclosure of X?s confidential communications with D.
II. The Issue.
The issue presented by this inquiry is as follows:
Where a client has filed a grievance complaint against his lawyer, alleging that his lawyer engaged in a conflict of interest and disclosed confidential communications to another client of the lawyer, may the lawyer disclose confidential communications between himself and that other client in his defense to those allegations where that other client does not consent to such disclosure?
III. Opinion.
With certain exceptions, Maine Bar Rule 3.6(l)(1) provides that ?a lawyer shall not, without the informed written consent of the client, knowingly reveal a confidence or secret of his client; use such a confidence or secret to the disadvantage of his client; or use such confidence or secret to the advantage of himself or a third person.?[1] One of the exceptions[2] to this general prohibition is set forth in Rule 3.6(l)(3) as follows:
(3) This provision is not violated by the disclosure of confidences and secrets by a lawyer as necessary to the defense of himself, his partners, employees, or associates against an accusation of wrongful conduct, in a judicial proceeding including but not limited to, any grievance proceeding under these rules.
The self‑defense exception provided by Rule 3.6(l)(3) permits a lawyer who is accused of wrongful conduct by his client to disclose that client?s confidences and secrets as necessary to the lawyer?s defense in a grievance proceeding. The more difficult question, involved here, is whether the self‑defense exception provided by Rule 3.6(l)(3) permits a lawyer to disclose his client?s confidences and secrets in order to defend himself against an accusation of wrongful conduct in a grievance proceeding instituted against him not by that client, but by a third party, in this case, another client of the lawyer.
This situation, which concerns a third party complaint, involves considerations quite different from those involved when the complainant is the client whose confidences and secrets may be disclosed by the lawyer in his defense. In that latter situation, the complaining client can be said to have waived the attorney‑client privilege since by accusing his lawyer with a breach of his duty to him, the client thereby places in issue communications between him and his lawyer that are relevant to that issue. See Laughner v. United States, 373 F.2d 326, 327 (5th Cir. 1967) (?The privilege is not an inviolable seal upon the attorney?s lips. It may be waived by the client; and where, as here, the client alleges a breach of duty to him by the attorney, we have not the slightest scruple about deciding that he thereby waives the privilege as to all communications relevant to that issue?). In contrast, in the third party complaint situation, the client whose confidences and secrets may be disclosed by the lawyer in his defense against the complaint has no control over when and to what extent the lawyer may choose to disclose those confidences and secrets in order to protect himself. Moreover, if the lawyer is permitted to disclose the client?s confidences and secrets in defending himself against a third party complaint, there is a risk that third parties might invoke grievance proceedings as a means to force a lawyer to disclose confidential communications with a client in order to defend himself.
These considerations suggest that if disclosure is permissible in a situation involving a third party complaint, a client may be less willing to be completely open with his lawyer, and to that extent the underlying purpose of the attorney‑client privilege[3] will be compromised. At the same time, however, if the self‑defense exception is not applicable in cases involving third party complaints, the lawyer may be unable to defend himself from an accusation of professional misconduct.
These competing interests(the legitimate interest of the client in being assured that his lawyer will not disclose his confidences and secrets, and the legitimate interest of the lawyer in defending himself from an accusation of professional misconduct) must both be taken in account in construing the meaning and scope of Rule 3.6(l)(3) in a situation involving a third party complaint.
While Rule 3.6(l)(3) does not explicitly address the third party complaint situation, that provision is broadly drafted: by its terms it applies to ?any grievance proceeding.? Although the Reporter?s Notes accompanying Rule 3.6(l) furnish little guidance concerning the scope of the self‑defense exception, the Reporter?s Notes indicate that Rule 3.6(l) was, with certain modifications not germane here, derived from D.R. 4‑101 of the A.B.A. Model Code of Professional Responsibility.[4] We also note that prior to November 1, 1978, when Rule 3.6(l) was originally adopted, D.R. 4‑101 (C)(4) had been construed as being applicable to third party complaints. Meyerhofer v. Empire Fire and Marine Insurance, 497 F.2d 1190 (2d Cir. 1974), cert. den. 419 U.S. 998 (1974) (lawyer charged as a defendant with securities law violations may disclose client confidences and secrets necessary to defend himself against accusation of wrongful conduct); In re Friend, 411 F. Supp. 776 (S.D. N.Y. 1975) (granting attorney?s request for permission to submit documents protected by the attorney‑client privilege to the grand jury).
In view of the broad language of Rule 3.6(l)(3), which by its terms applies to ?any grievance proceeding,? and given the principle that a statute enacted after a judicial construction is to some degree presumed to take that construction,[5] the Commission concludes, consistent with the above‑cited judicial authorities construing analogous D.R. 4‑101(C)(4),6 that Rule 3.6(l)(3) is applicable to the third party complaint situation involved in the present case. This Commission further concludes that in this third party complaint situation Rule 3.6(l)(3) should be further construed so as to require the following attendant safeguards in order to reconcile the legitimate interests of both the lawyer and the non‑complaining client and to prevent undermining of the purpose underlying the attorney‑client privilege:
Prior to the lawyer?s disclosure, the lawyer should inform the client whose confidences and/or secrets are to be disclosed of (i) the reason for the disclosure; (ii) the specific matters that are to be disclosed; and (iii) to whom the disclosure will be made.
Any such disclosure should be no greater than is necessary to the defense of the lawyer against the specific accusation of wrongful conduct against him.
Any such disclosure should be made only to Bar Counsel and/or the Grievance Commission.
Bar Counsel and the Grievance Commission must not reveal any such client confidences and/or secrets to the third party complainant or others.
If the grievance proceedings lead to further proceedings before a court, any such client confidences and secrets that are disclosed to Bar Counsel and/or the Grievance Commission must remain protected from disclosure to the third party complainant or others absent a court order permitting such disclosure.
Footnotes
[1] Rule 3.6(l)(5) provides that as used in Rule 3.6(l), ?confidence? refers to ?information protected by the attorney‑client privilege under applicable law,? and ?secret? refers to ?other information gained in the professional relationship that the client has requested be held inviolate or the disclosure of which would be embarrassing or detrimental to the client.?
[2] Other exceptions to the general prohibition prescribed by Rule 3.6(l)(1) are (1) disclosure with the ?written consent of the client? [Rule 3.6(l)(1)]; (2) disclosure ?as required by law or by order of court? [Rule 3.6(l)(1)]; (3) disclosure of ?a client?s intention to commit a crime or the information necessary to prevent the crime or to avoid subjecting others to risk of harm? [Rule 3.6(l)(4). None of these exceptions is involved here. For purposes of this opinion the Commission also assumes that there has been no waiver of the attorney‑client privilege.
[3] The rationale for attorney‑client privilege is that the interests of justice are best served by encouraging clients to make full disclosure to their attorneys and thus enable their attorneys to serve them more effectively. Field & Murray, Maine Evidence §502.1.
[4] In August 1983, the A.B.A. replaced the entire Model Code with the Model Rules of Professional Conduct. D.R. 4‑101(C)(4) of the Model Code provided that a lawyer may reveal ?confidences and secrets necessary . . . to defend himself or his employees or associates against an accusation of wrongful conduct.?
[5] See General Motors Acceptance Corporation v. Anacone, 160 Me. 53, 78 (1964).
[6] The Commission notes that in both Meyerhofer and Friend, supra, the lawyer was charged with wrongdoing in which his client was allegedly implicated. Since the inquiry presently before the Commission does not state that such a situation is involved here, those decisions are to that extent distinguishable from the case at hand. That distinction, however, is not significant since the self‑defense provision of D.R. 4‑101(C)(4), which was the basis for those decisions, is not by its terms limited to the situation in which a lawyer is charged with wrongdoing in which his client?s conduct is implicated. Compare A.B.A. Model Rule 1.6(b)(2) (providing that a lawyer may reveal otherwise confidential information in a third party complaint situation to the extent the lawyer ?reasonably believes necessary . . . to establish a defense to a criminal charge or civil claim against the lawyer based upon conduct in which the client was involved. . . .?).
Enduring Ethics Opinion
Opinion #56. Attorney's Use of Own Affidavit in Support of Motion
Issued by the Professional Ethics Commission
Date Issued: June 4, 1985
Facts
Attorney A is employed as ?in‑house? counsel to a lending institution. He is also a corporate officer of the institution. In the course of his employment A has custody from time to time of commercial loan documentation generated in the ordinary course of business. Other officers are customarily involved in the preparation and execution of documents during the course of commercial transactions, and are usually available to serve as witnesses in connection with litigation, A has commenced a judicial real estate foreclosure action on behalf of his employer. Service is made upon all parties. A intends to file certain affidavits in connection with the foreclosure.
Questions Propounded
Where Attorney A files his own affidavits as to facts relating to pending action, do Bar Rules 3.4(j) and/or 3.5(b)(1) prohibit A from appearing as counsel?
Opinion
It is our opinion that the mere filing of an affidavit does not per see violate the lawyer/witness disqualification rules of Bar Rules 3.4(j) or 3.5(b)(1). An affidavit is a statement under oath to the effect that the contents of the affidavit are true.[1] An affidavit is customarily utilized to fill an evidentiary vacuum relating to a necessary but uncontested issue.
The purpose of the lawyer‑witness disqualification is that it is considered unseemly for an attorney to be arguing his own credibility as a witness. The dual role of lawyer and witness may also affect the independent judgment of a lawyer. Our conclusion is that the application of the lawyer‑witness disqualification to the lawyer as affiant is not supported by the same considerations.
Nevertheless, the attorney filing such an affidavit may lead to his testifying as a witness, should the subject matter of the affidavit be controverted, thus triggering the disqualification provisions of Rule 3.4(j) and 3.5(b)(1). It should therefore be obvious that the choice of the lawyer as affiant may be inappropriate where other equally competent affiants are available.
Footnote
[1] Jagoe v. Blocksum, 440 A.2d 1022 (Me. 1982).
Enduring Ethics Opinion
Opinion #57. Fee Bonus Contingent on Successfully Obtaining Commercial Permits
Issued by the Professional Ethics Commission
Date Issued: July 1, 1985
Facts
Client C has retained Attorney A for the purpose of obtaining the necessary permits to proceed with a commercial development. The fee arrangement calls for A to be compensated by C in a predetermined amount, which A and C agree is reasonable, regardless of the outcome. In the event that A is successful in obtaining the permits, C is to pay him a higher fee (either an amount which is fixed or which is determined by a formula) than the basic fee which has been guaranteed by C.
Question
Does this arrangement violate the provisions of either Bar Rules 3.7 or 8?
Opinion
Rule 3.7(c) states that:
A lawyer shall not acquire a proprietary interest in the cause of action or subject matter of litigation he is conducting for a client, except that he may:
(2) Contract with a client for a reasonable contingent fee as provided in Rule 8.
The Commission concludes that the fee arrangement in question does not violate either Rule 3.7(c) or Rule 8.
Arguably the fee arrangement in question would be beyond the scope of Rule 3.7(c) if the process of obtaining the necessary permits to allow the proposed development to proceed were not considered to be a ?cause of action? or ?the subject matter of litigation.? In Manning v. Perkins, 85 Me. 172, 26 Atl. 1015 (1893), an attorney had been promised a percentage of his client?s claim against the United States if he were successful in obtaining a share of an award received from Great Britain representing reparations for damage to American shipping. The Court held that the fee arrangement was not champertous. The Court reasoned that although Congress could be petitioned for relief, the claim would not ?foment litigation? since suit could not be brought directly against the United States. Id. p. 174 of 85 Me.
We think that the reference in Rule 3.7(c) to ?cause of action or subject matter of litigation? is broad enough to include the administrative issuance of the permits in the present instance. The modern view is that the restrictions prohibiting an attorney from acquiring a proprietary interest in his client?s claim are based more on protecting his objectivity in pursuing the case than upon protecting the courts against increased litigation. A.B.A. Code of Professional Responsibility, E. C. 5‑7 (1975). In A.B.A. Opinion #279 (1979), the words ?subject matter of the litigation? were construed to include an application to the F.C.C. to transfer a license even though the proceeding was before an administrative agency rather than a court.
It has also been suggested that
. . . (T)he broad definition of ?contingent fee agreement? in Rule 88(a)[1] and other provisions of the rule (such as the broad reference of subdivision (e) to ?matters with reference to which the services are to be performed,? which matters must be identified in the written agreement) indicate that the Court intended to regulate all contingent fee arrangements whether or not involving litigation. 2 Field, McKusick & Wroth, Maine Civil Practice 361 (2d ed. 1970).
Moreover the permit request in the present case could result in a judicial proceeding if the permits were denied by the administrative agencies involved.
Although the fee arrangement contemplated here involves the acquisition of a proprietary interest in the subject matter of the litigation, it would not be improper if it qualified as a contingent fee contract permitted by Rule 8. That rule defines contingent fee agreements in the following terms.
(a) Definition. In this rule, the term ?contingent fee agreement? means an agreement, express or implied, for legal services of an attorney or attorneys (including any associated counsel), under which compensation, contingent in whole or in part upon the successful accomplishment or disposition of the subject matter of the agreement, is to be in an amount which either is fixed or is to be determined under a formula. The term ?contingent fee agreement? shall not include an arrangement with a client, express or implied, that the client in any event is to pay to the attorney the reasonable value of his services and his reasonable expenses and disbursements.
It might be argued that the fee arrangement between A and C is not a contingent fee agreement permitted by Rule 8. In this case, A is assured of receiving a fee which the parties have agreed is ?reasonable? even if the permits are denied. Thus, it could be contended that this is an agreement to pay an attorney ?the reasonable value of his services? and is therefore excluded from the definition of a permitted ?contingent fee agreement? by the last sentence of Rule 8(a).
A majority of the Commission is of the view that the last sentence of Bar Rule 8(a) was not intended to apply to the fee arrangement presented here.[2] The reference in that sentence to open‑ended agreements under which a client agrees to pay his attorney ?the reasonable value of his services? when the case is closed was simply intended to provide assurance that an attorney computing his fee in such a case could properly take into account the degree of success achieved, as permitted by Rule 3.3(a)(4), even though he had not complied with the formal requirements of Rule 8. Moreover, C?s commitment to pay a basic fee regardless of the outcome does not take the agreement out of the definition of a contingent fee since fee arrangements under which the attorney?s compensation is contingent ?in part? are expressly contemplated. See Rule 8(a).
This conclusion is consistent with that reached by the Committee on Professional Ethics of the New York State Bar Association in Opinion #412 (1975). In the course of its discussion of the propriety of charging a contingent fee in a criminal case, the Committee stated that:
We hold that the Code prohibition of DR 2‑106 (c) encompasses, in addition to wholly contingent fees, agreements which provide in addition to a fixed basic fee, a further fixed fee contingent upon some specified result, such as acquittal, probation, fine or minimum term of punishment. The Committee distinguished the situation in which an attorney is to be paid a ?reasonable fee? for criminal defense work even though he takes into account the results obtained in figuring his bill provided such results are not given ?excessive weight.?
One member of the Commission would conclude that the fee arrangement between A and C is not a contingent fee agreement as defined by Rule 8 and thus constitutes the acquisition of a proprietary interest in the subject matter of the litigation falling outside the exception set forth in Rule 3.7(c)(2). That member would read the second sentence in Rule 8(a) as prohibiting fee agreements in which a basic reasonable fee is to be paid regardless of outcome, and a bonus is to be paid contingent upon success in the matter.
Footnotes
[1] Abrogated No. 1, 1978 and re‑enacted as Bar Rule 8(a).
[2] There is no helpful legislative history. Rule 8 was taken from former Rule 88 of the Maine Rules of Civil Procedure. That rule was derived from General Rule 14 promulgated by the Massachusetts Supreme Court. 2 Field, McKusick & Wroth, Maine Civil Practice 358 (2d ed. 1970).
Enduring Ethics Opinion
Opinion #58. Entering Plea of Insanity If Client Objects
Issued by the Professional Ethics Commission
Date Issued: September 4, 1985
Facts
Attorney A represents a client accused of a crime. Attorney A believes that his client, ?although mentally competent to stand trial, suffers from a delusional belief structure which may support a defense of not guilty by reason of insanity.? In fact Attorney A believes that such a defense is clearly the most desirable course of action. However, the client has not authorized the attorney to enter such a defense and in fact may forbid the attorney to do so.
Question
May an attorney enter a plea of not guilty by reason of insanity (a) without the client?s consent, or (b) over the client?s objection?
Opinion
Before addressing the question posed, it is important to clarify the statement of facts as presented by the inquiring attorney. In representing a possibly disabled client, an attorney must initially determine if there is a question as to whether or not the client is in fact competent to stand trial. As pointed out in Thursby v. State, 223 A.2d 61 (Me. 1966), it is the duty of counsel to raise the issue to the court. The court must then determine if indeed the client is competent to stand trial. If the latter, then it appears the attorney must bring the issue to the attention of the court.
Once the court has determined the client is competent to stand trial, it is the client who must make the ultimate decision whether or not to assert the defense of not guilty by reason of insanity. It is the attorney?s duty to ?apply his best judgment in the performance of his services,? and he shall fully inform the client of his options so that an informed decision can be made. See Rule 3.6(a)[1] It is the attorney?s task to advocate the wishes of his client. The attorney may wish to withdraw from employment under the circumstances (see Rule 3.5(c)), but he cannot ignore the client?s wishes. He must not substitute his judgment for that of his client.[2]
Thus the attorney may not enter a plea of not guilty by reason of insanity without the client?s consent.
Footnotes
[1] ?In certain areas of legal representation not affecting the merits of the cause or substantially prejudicing the rights of a client, a lawyer is entitled to make decisions on his own. But otherwise the authority to make decisions is exclusively that of the client and, if made within the framework of the law, such decisions are binding on his lawyer. . . . A defense lawyer in a criminal case has the duty to advise his client fully on whether a particular plea to a charge appears to be desirable and as to the prospects of success on appeal, but it is for the client to decide what pleas would be entered and whether an appeal should be taken.? ABA Model Code of Professional Responsibility EC 7‑7.
[2] There may be occasions where the attorney may seek the appointment of a conservator or guardian under 18‑A M.R.S.A. § 5‑101 et seq. Once such a fiduciary is appointed, the attorney would have to respect decisions the representative is authorized to make on behalf of the protected person. However, this would not likely occur in a criminal context.
Enduring Ethics Opinion
Enduring Ethics Opinion #58 (November 2023)
Opinion #59. Volunteer Lawyers Project
Issued by the Professional Ethics Commission
Date Issued: September 4, 1985
Facts
The Volunteer Lawyers Project has posed several questions inquiring whether there are ethical questions regarding various internal relationships and in its contacts with clients. The Volunteer Lawyer Project is a project of the Maine Bar Foundation, a non‑profit corporation. It is operated pursuant to a contract between Pine Tree Legal Assistance, Inc. and the Maine Bar Foundation. The Project?s paid staff are employed by Pine Tree whose Executive Director is responsible to the Maine Bar Foundation for the operations of the Project. The Board of Directors of the Foundation acting through its VLP Policy Committee, provides a policy determination and oversight role for the Project.
A prospective client is first screened by a lay volunteer who determines whether he or she meets financial eligibility criteria and makes a preliminary assessment as to the nature and severity of the problem. If the client is eligible and presents a legal problem which the Project can accept, the case is forwarded to the lawyer of the day. The latter, who is a volunteer, refers the client to one of the pro bono attorneys in the area where the client resides who has agreed to accept cases of that type. After the referral is made, the Project does not monitor the case although it does provide an internal grievance procedure through which clients can process complaints about the manner in which their cases were presented.
Opinion
Question 1
The first question is whether an attorney‑client relationship exists between the Volunteer Lawyers Project and those who contact it for assistance. The Commission is of the opinion that no such relationship is created.
In the first place, the Project is apparently not a legal entity and certainly is not an attorney. It therefore cannot enter an attorney‑client relationship. It is also not covered by Bar Rule 3 (The Code of Professional Responsibility) which applies only to the professional conduct of ?attorneys.? See Rule 3.1(a).
Question 2
Must the Volunteer Lawyers Project keep confidential the information received from clients or prospective clients? The Commission answers in the affirmative.
Although the Project is not an attorney, its lay staff members who obtain confidential client information in the performance of their duties are persons ?whose services are utilized by (a lawyer)? within the meaning of Rule 3.6(1) (1). The Executive Director (a lawyer) and other lawyers associated with the administrative operations of the Project must therefore exercise reasonable care to prevent such staff members from ?improperly disclosing or using confidences or secrets of a client.? Rule 3.6(l)(1). Moreover, even a prospective client whose case is ultimately refused is a ?client? for purposes of the rule. Grievance Comm. op. no. 8 (1980).
Question 3
Must the Volunteer Lawyers Project monitor the ongoing representation provided by its pro bono attorneys? The Commission is satisfied that no such duty exists under Bar Rule 3. As stated above, the Code of Professional Responsibility does not apply to the Project since it is not an attorney.
Question 4
Does a conflict of interest exist when a client has been assigned to a pro bono attorney if the adversary party is privately represented by an attorney who is also on the referral roster of pro bono attorneys? No conflict exists under these circumstances. Nothing about the fact that both attorneys have agreed to accept pro bono referrals creates a relationship with the Volunteer Lawyers Project which would be inconsistent with accepting a case opposing a client who had been referred by the Project?s staff.
Question 5
Would a conflict of interest exist if clients on both sides of the same case were both referred to pro bono attorneys by the Project? The Commission believes that it would not.
The Project concedes that there is a risk that confidential information will accidentally be transmitted by Project staff members to persons with an adversary interest. Procedures are in place which appear to make this risk remote. Moreover, since the second prospective client in a given case may have no other source of free legal assistance if his case is refused, it would be cold comfort to such a person to protect the confidentiality of his confidential communications by, in effect, denying him the assistance of counsel altogether.
In Opinion #41, the Grievance Commission held that two attorneys who shared office space could not take opposite sides of a matter in part because of the danger that client confidences would be disclosed through their shared secretary. In that case, however, the shared employee had a duty to both of her attorney‑employers to assist in maximizing their chances of success in advancing the interests of their opposing clients. Here no duty or obligation is owed by staff of the Project to the pro bono attorneys. On the contrary, their sole obligation in this regard arising out of their employment is not to violate the procedures designed to protect client confidences from disclosure.
Question 6
The Commission is also asked whether an attorney‑client relationship exists between the prospective client and the lawyer of the day which would preclude a partner or associate of the latter from representing the adversary party in the same matter. We are advised that the attorney of the day rarely or never meets the client face‑to‑face and ordinarily sees only a client information sheet describing the client?s problem and his eligibility for free legal services. Once the referral has been made, these materials pass permanently out of his possession. The Commission nevertheless concludes that an attorney‑client relationship exists for purposes of Rules 3.6(l)(1) and 3.4(a).
Although lawyer of the day?s exposure to confidential information about the client?s case is minimal, it clearly exists. It is well established that even a preliminary interview with a prospective client whose case is ultimately not accepted is a sufficient attorney‑client contact to invoke the duty imposed by Rule 3.6(l)(1) to keep confidential the information which was disclosed during the client interview. Grievance Comm. Op. No. 8 (1980). See also Mass. Bar Ass?n Committee on Professional Ethics, Op. Nos. 76‑6 (1976) and 81‑1 (1981). If it were otherwise, the lawyer of the day would be free to share with his partner or associate information about the pro bono client?s case which indicated potential weaknesses or fertile areas for investigation. Moreover, such a client, if his case had been successfully opposed by an associate of the lawyer of the day would, if aware of the connection, surely suspect that the relationship between the two lawyers had contributed to his downfall.
For the reasons given above, the Commission has concluded that receipt of confidential information by the lawyer of the day creates a limited attorney‑client relationship, at least for purposes of protecting the confidentiality of the information revealed. We also hold that the relationship in question is sufficient to make the pro bono client a ?former client? for purposes of Rule 3.4(e). It therefore follows that no partner or associate of the lawyer of the day who had successfully referred a pro bono client could appear on the opposite side of the matter without the written consent of the client in question. Ibid. It also follows that no such case may be accepted without disclosing to the prospective private client that a partner or associate of the lawyer in question had, in his capacity as lawyer of the day for the Volunteer Lawyers Project, referred the pro bono client to opposing counsel. See Rule 3.4(a).
Question 7
The last question presented is whether a conflict of interest exists if Pine Tree Legal Assistance represents a client whose interests are opposed to those of a person who has been referred by the Project to a pro bono attorney. The Commission is of the opinion that under some circumstances, disclosure of Pine Tree?s involvement in the referral process would be required.
It has been noted above that the staff persons at the Volunteer Lawyers Project are paid by Pine Tree Legal Assistance. These consist of the Project Coordinator, a Volunteer Coordinator, a paralegal, and a secretary/receptionist. The staff is supervised by Pine Tree?s Executive Director.
From the facts which have been furnished to the Commission it appears that under normal circumstances, a referral would be made without any direct contact with an employee of Pine Tree except the secretary/receptionist. It is not clear under what circumstances other staff persons employed by Pine Tree would become involved.
Assuming that Pine Tree already represented a person who was asserting rights adverse to someone seeking free legal assistance through the Project, it seems clear that the referral could be made once the client had been advised that staff members of the Project were paid by Pine Tree and that there was at least a remote possibility that confidential information received during the referral interview could be disclosed by design or through inadvertence. See Rule 3.4(a). The risk of such disclosure is minimized by the separation of functions between Pine Tree and the Project and the fact that Pine Tree generally has no financial interest in the outcome of its cases.
The harder question is presented by the converse situation in which Pine Tree is asked to represent a client in a matter in which a pro bono attorney is already representing the opposing party. Because, for the reasons noted above, the risks of disclosure of information received from the Project?s initial interview are minimal, the Commission has concluded that consent of the pro bono client is not required to permit Pine Tree to undertake the matter. It would seem to elevate form over substance to hold that the prospective Pine Tree client must be denied effective representation merely because Pine Tree employs staff members of the Project. The Commission is satisfied that, under these circumstances, it is sufficient if Pine Tree discloses to its prospective client its relationship to the Volunteer Lawyers Project and the fact that representation for the opposing party had been effected through the Project?s referral process. See Rule 3.4(a).
Enduring Ethics Opinion
Opinion #60. Attorney's Acceptance of Possession of Physical Evidence of a Crime
Issued by the Professional Ethics Commission
Date Issued: September 4, 1985
Facts
An attorney represents a client charged with or under investigation for a crime. During the course of the representation, the client discloses to the lawyer that he possesses evidence of the crime which evidence incriminates the client (e.g., the fruits of the crime, the instrumentality of the crime such as a weapon, or a document implicating the client). The client asks the lawyer to take custody of the evidence or the lawyer offers to hold the evidence. In any event, the lawyer takes custody of the evidence for these or other reasons, intending to hold the evidence temporarily or permanently.
Questions Presented
What is the duty of the lawyer in these situations? May the lawyer take possession of the evidence? If he does, may he keep it and if so how long? If he may not retain it, when and to whom and in what manner should it be transferred?
Opinion
At the outset, it is clear that the lawyer is under no ethical obligation to act as custodian of evidence for a client. Should, however, the lawyer elect to take possession of the evidence, for whatever reason, the lawyer will be confronted with complex and conflicting ethical and legal obligations. This opinion will, therefore, address the problem facing an attorney who in fact takes possession of physical evidence which incriminates a client and the disclosure of which to third parties could be damaging to the client.
The lawyer who takes possession of evidence of a crime is faced with a serious dilemma. On the one hand, Bar Rule 3.6(l)(1) prohibits a lawyer from knowingly revealing a confidence or secret of his client. Under the relevant facts here, the evidence held by the lawyer is such that its disclosure would seriously damage the client. This suggests that the evidence should be held in confidence. On the other hand, however, that same Rule provides an exception for disclosure permitted by the Rules or ?required by law or Court order.? Similarly, Rule 3.7(b) prohibits a lawyer from concealing ?information? legally required to be revealed. Since the Maine Criminal Code in 17‑A M.R.S.A. § 455 and 753 makes it a crime to conceal evidence, the lawyer may be ethically obligated by Rules 3.7(b) and the exception to 3.6(l)(1) to reveal and deliver the incriminating evidence to the investigating authority.
The historical and policy basis for these conflicting duties may be summarized as follows. This attorney‑client privilege had its origin in the Elizabethan era. It was based on the lawyer?s oath and honor as a gentleman rather than any concern for the client?s welfare.[1] Although its rationale has since changed, the privilege still exists with equal force. The purpose of the rule under modern legal theory is to encourage complete and open communication between the lawyer and client in order to enable the lawyer to adequately represent the client without fear by the client of prejudicial disclosure of information communicated to the lawyer. Advocates of the rule argue that any erosion of this principle that permits or requires disclosure of statements or objects given to a lawyer by the client compromises this principle and turns the lawyer into an agent of the prosecution.
To compel the defendant?s attorney to produce the evidence would, seemingly, be similar to compelling the client to testify. A collateral effect of such forced production might involve effectively denying the right to counsel by inhibiting the defendant from confiding in his attorney. By producing information against a client, the attorney would become an advocate against his own client, a role the legal profession has long resisted. Comment, The Right of a Criminal Defense Attorney to Withhold Physical Evidence Received from his Client, 38 U. Chi.L. Rev. 211, 212‑213 (1970).
The countervailing policy consideration notes quite properly that it is illegal to conceal evidence of a crime. [2] Since a lawyer may not himself break the law, and since the lawyer?s role has long been characterized as that of an ?officer of the court,? the lawyer may be required to disclose and surrender to the prosecutor any physical evidence in his possession even if the effect of doing so is detrimental to the interests of the client. To do less is to make the lawyer a participant in concealing the crime.
[T]he legal profession, for just as long a time, has considered its members to be officers of the court, owing a duty to the court as well as to the client. To permit the withholding of physical evidence (which may in many cases preclude the prosecution from getting the evidence at all) seems to contradict the lawyer?s duty to the court. Id. at 213.
A review of case law reveals little authority on what one would expect to be a frequently encountered situation. Our research discloses a bare handful of cases which have addressed these issues. In each of those cases, the Court concluded that a lawyer in possession of physical evidence of a crime (i.e., the fruits of the crime, the instrumentality, or other evidence) had a duty to turn that evidence over to the prosecution. In Re January 1976 Grand Jury, 534 F.2d 719 (7th Cir. 1976); In Re Ryder, 263 F.Supp. 360 (E.D. Va. 1967); Morrell v. Alaska, 575 P.2d 1200 (Alaska 1978); affirmed 381 F.2d 713 (4th Cir. 1967); People v. Lee, 3 Cal.App. 3d 514, 83 Cal. Rept. 715 (1970); and State ex rel. Sowers v. Olwell, 394 P.2d 681 (Wash. 1964).[3]
Of those cases, the one most widely cited and most clearly on point is In Re Ryder. In Ryder a lawyer representing a client in a criminal matter obtained from his client stolen money and a sawed‑off shotgun used in a robbery. The lawyer took the items from the client and placed them in the lawyer?s safe‑deposit box. The Court held in clear and uncompromising terms that notwithstanding the fact that Attorney Ryder had discussed the ethical implication of his proposed action with a former officer of the local bar association and intended after the trial to return the money to its rightful owner, Ryder acted with an intention to conceal the evidence and therefore had violated the Virginia Canons of Ethics.
More recently, the Alaska Supreme Court in Morrell v. State, supra, addressed the question of whether a defendant?s right to counsel had been violated when his former attorney provided to the prosecution certain inculpatory physical evidence obtained by the lawyer from a third person during the course of representing the defendant. Although the Court did not directly address the ethical rules, the Court held that ?a criminal defense attorney must turn over to the prosecution real evidence that the attorney obtains from the client.? Id. at 575 P.2d at 1210.
In State ex rel. Sowers v. Olwell, supra, the Washington Court considered the question of whether an attorney should be held in contempt for refusing to comply with a subpoena duces tecum requiring him to answer questions at a coroner?s inquest regarding a knife delivered to the lawyer by the client. While the Court held that the particular subpoena was defective, it also held, in dicta that as a general proposition, a lawyer had a duty to turn incriminating evidence over to the prosecutor after retaining it for a ?reasonable period of time.? The prosecutor was free to use the evidence at trial, subject only to the limitation of not disclosing the lawyer as the source.
Similarly, in In Re January 1976 Grand Jury, supra, the Seventh Circuit considered an appeal from a finding of contempt against an attorney who refused to produce documents in response to a grand jury subpoena. The Court did not directly discuss whether the attorney had an ethical obligation to voluntarily disclose incriminating documents to law enforcement agencies, but rather dealt only with the more narrow question of whether the attorney‑client privilege provided a basis for refusing to respond to a subpoena. The Court held that the privilege did not prevent disclosure inasmuch as the client himself could have been compelled to produce the documents if he had been subpoenaed. The subpoena to the lawyer only sought that which the state could have compelled by a subpoena to the defendant.
In the case of People v. Lee, the California Supreme Court considered the question of whether blood stained shoes given by the defendant to his lawyer, and held by the judge at the joint agreement of the lawyer and prosecutor, could be seized by warrant and introduced at trial. The Court held such seizure permissible and admitted the evidence. In so doing, the Court also stated that the attorney‑client privilege did not give a lawyer the right to withhold evidence and that it was an abuse of a lawyer?s duty of professional responsibility to knowingly take possession of and secrete the instrumentalities of a crime.
In each of the above cited cases, the Court resolved the ethical/constitutional issue with relative ease and certainty. However, of these cases, only Ryder dealt directly with the question of legal ethics. The other cases dealt with disclosure issues in the context of criminal appeals, contempt proceedings or other proceedings. In contrast, however, the commentators have been more troubled by the ethical, constitutional and practical dilemma posed by these situations.[4] Indeed, it is fair to say that the commentators? analyses have been far more thoughtful than the above cited judicial opinions, most of which express their opinions in conclusory terms with little considered evaluation of the competing legal and policy considerations. Many of the commentaries have been severely critical of the standard of conduct established by the courts.[5] Unfortunately, the commentaries also largely share a common flaw. Most provide no clear answer to the dilemma and those few that do so offer little practical guidance to ?real world? practitioners.[6] Similarly the Bar Rules, and their predecessor, provide no clear standard of conduct. As stated in the words of one commentator discussing the provisions of the earlier ABA Model Code of Professional Responsibility:
It provides meager guidance for attorneys, disciplinary committees, or courts concerning the attorney?s duty in dealing with incriminating evidence. . . . [T]he Code offers no guidance for resolving the conflict. Comment, Ethics, Law and Loyalty: The Attorney?s Duty to Turn Over Incriminating Physical Evidence, 32 Stanford L. Rev. 977, 983 (1980).
Since the ultimate determination of an attorney?s duty in such cases depends on the application and interpretation of the Maine Criminal Code, we conclude that we are unable to authoritatively answer the questions. As a matter of policy the Grievance Commission, our predecessor, has consistently held that it was without authority to interpret statutory law. We believe that such a policy is sound. Although this Commission is empowered to interpret the Bar Rules we are not similarly empowered to interpret statutes. Our reading of a statute represents only our opinion and does not bind a court or a prosecutor. Because the answers to the questions presented are so inextricably intertwined with the Criminal Code, and because our opinion on the statute has no legal impact and provides no protection to an attorney, we, therefore, decline to answer them. Notwithstanding that decision, however, we think it useful to outline what we think are the essential arguments on each side of the questions in order to alert attorneys to the potential consequences of taking custody of evidence of a crime.
On the one hand, the argument can be made that, based on the exception in Rule 3.6(l)(1) and the cited provisions of the criminal code, a lawyer is under an affirmative ethical duty to turn over evidence of a crime to appropriate law enforcement officials. Little need be added beyond the language of the criminal code and the conclusion of cases such as In Re Ryder. The Code prohibits concealment of evidence. 17‑A M.R.S.A. § 455.
It can also be argued that all that is protected by Bar Rule 3.6(l)(1) are ?secrets? and ?confidences.? As defined in Bar Rule 3.6(l)(5), secrets and confidences include ?information? protected by an attorney‑client privilege or that a client has requested be held inviolate. Physical evidence (e.g., the fruits of a crime or the instrumentality of a crime) may not be considered ?information? and may therefore not even be protected by the scope of Rule 3.6(l)(1).
In contrast to this plain language analysis, an argument can be made, albeit an argument more complex than a plain language reading of the statute and rules, that such disclosure of incriminating evidence from a client is not ?required by law.? First, although the Maine criminal code prohibits concealment of evidence, 17 M.R.S.A. § 455(1)(A) and 753(1)(C), it could be argued that those statutes were not intended to apply when the effect would be to destroy the confidential attorney‑client relationship, unless an express intent to abrogate that principle clearly appears on the face of the statute. Criminal statutes should be strictly construed to avoid applying them more broadly than the legislature intended. Freedman, 10 Crim. Law Bull. 979 at 986. State v. Goyette, 407 A.2d 1104 (Me. 1979); State v. Millet, 392 A.2d 521 (Me. 1978); State v. Porter, 384 A.2d 429 (Me. 1978). There does not appear to be anything in the history of the criminal code to support the conclusion that the legislature intended the obstruction of justice laws to affect long‑standing confidential relationships. Almost all jurisdictions have some kind of statutory prohibition on the destruction or concealment of evidence. In almost all cases those statutes were drafted ?without attention to their effect on the attorney‑client relationship and their application to an attorney seeking to protect the confidences of his/her client is often uncertain.? 32 Stan. L. Rev. 977 at 989 and n. 68. This could also be said to be true in Maine.
Second, an argument can be made that neither § 455 nor § 753 prohibits the mere possession by an attorney of physical evidence. Although there are no Maine cases interpreting either section, those statutes may not apply to mere possession by an attorney, but may require as an element of the crime a showing that the attorney intended to hide the objects from law enforcement officers. In other words it may be that the prosecution must prove that the attorney held the evidence with the intent of concealing it as opposed to using it for preparing the defense. Since mere possession by the lawyer cannot prevent a law enforcement agency from obtaining the evidence by a search warrant or subpoena, see e.g., In re January 1976 Grand Jury, supra, it logically follows that something more is required to prove ?concealment.? In the case of Attorney Ryder, for example, that ?something more? could have been the unusual and suspicious act of placing the evidence in a safe deposit box rather than holding it in his office like any other of his client?s papers. Such an act could lead to a conclusion that Ryder was doing more than just holding the evidence, he was attempting to hide it. Under the facts of that case, the Court could correctly have concluded that Ryder broke the law which prohibited the ?concealment? of evidence.
Third, it is possible to argue that the Ryder decision, on which many of the subsequent cases and commentaries are based, is flawed. In one commentator?s words, it may be seen as an exercise in ?begging the question.?
[T]o argue that the attorney?s actions [in concealing stolen money and a gun] is in violation of substantive law, such as ?possession? statutes or the Model Penal Code provision, is to beg the question. It must first be determined whether the conduct is privileged as a matter of law, and, if so, whether it is within a well recognized exception to the criminal statute. 32 U.Chi.L. Rev. 211 at 221.
In other words, the first task is to determine if the possession of the money and gun was within the scope of the attorney‑client privilege. If it was, then the unlawful concealment statute in Ryder, or in Maine, would not apply to the conduct, absent a clear statement in the statute that it was intended to apply to such traditionally protected lawyer‑client communications.
[I]t is a well settled principle that an attorney may withhold his client?s documents, such as confidential written communications from the client to the attorney, and it is generally recognized that the attorney may withhold any pre‑existing document that the client could have refused to produce. Just as the attorney?s act in advising is generally not considered ?aiding and abetting,? so too his possession of a document under the stated circumstances [i.e., Ryder] is not considered a violation of the law. Likewise, his possession of a chattel should not be considered illegal. Id. at 220‑221.
We recognize that this interpretation of the interplay between Bar Rules 3.6(l)(1), 3.7(b) and the Maine criminal concealment laws cited above is not free from doubt. Since Rule 3.6(l)(1) prohibits disclosures except where ?required by law,? and since § 455 and 753 specifically prohibit concealment of physical evidence without apparent regard for whether such evidence is held by an attorney by virtue of the attorney‑client relationship, it can be argued that the obligation of § 455 and 753 clearly controls and mandates disclosure by the Attorney.
On the other hand, it seems doubtful that such a result was intended by the drafters of the Bar Rules or the statute. Although Rule 3.6(l)(1) excepts conduct required by ?law or order of court,? one could read that phrase as encompassing only legally compelled disclosures such as search warrants, subpoenas, court orders or other judicially mandated disclosures and not the general requirements of the criminal code. Similarly, one could read the prohibition against concealing ?information legally required to be revealed? in Rule 3.7(b) as applying only after the issuance of such subpoena, warrant or order.
In response to the argument that physical evidence is not ?information? and is thus not protected by Bar Rule 3.6(l)(1), we believe a reasonable argument can be made that there is no essential difference between oral communication by a client to a lawyer which implicates a client in a crime and the transmission of physical evidence to a lawyer which has the same impact.
[I]t would be incongruous to permit the attorney to elicit oral information from his client but to prohibit him from soliciting information in the form of physical evidence. Id. at 220.
In either event, the disclosure would be damaging to the client and helpful to the prosecution and could transform the attorney into an agent of the law enforcement body. There is no Maine law obligating an attorney to disclose incriminating oral statements from a client. If a client confesses the commission of a crime to his lawyer, neither the Bar Rules nor the Criminal Code compel a lawyer to report that confession to the police. In fact, Bar Rule 3.6(c) specifically prohibits disclosure of fraudulent conduct by a client, even if the fraud occurs during the representation, if the attorney learns of the fraud through a privileged communication. It can be argued that § 455 and § 753 were not intended to create a different standard for physical evidence and that a lawyer is not required by Maine statute to voluntarily disclose physical evidence given to him by his client without a subpoena, search warrant or court order to do so.
Such position is consistent with the professional duty of a defense lawyer as characterized by Dean Monroe Freedman of Hofstra University School of Law.
Thus, the defense lawyer?s professional obligation may well be to advise the client to withhold the truth. As Justice Jackson said, ?Any lawyer worth his salt will tell the suspect in no uncertain terms to make no statement to police under any circumstances.? Similarly, the defense lawyer is obligated to prevent the introduction of evidence that may be wholly reliable, such as a murder weapon seized in violation of the Fourth Amendment, or a truthful but involuntary confession. Justice White has observed that although law enforcement officials must be dedicated to using only truthful evidence, ?defense counsel has no comparable obligation to ascertain or present the truth. Our system assigns him a different mission. . . . We . . . insist that he defend his client whether he is innocent or guilty.?
Such conduct by defense counsel does not constitute obstruction of justice. On the contrary, it is ?part of the duty imposed on the most honorable defense counsel,? from whom ?we countenance or require conduct which in many instances has little, if any, relation to the search for truth.? The same observation has been made by Justice Harlan, who noted that ?in fulfilling his professional responsibilities,? the lawyer ?of necessity may become an obstacle to truth finding.? Chief Justice Warren too, has recognized that when the criminal defense attorney successfully obstructs efforts by the government to elicit truthful evidence in ways that violate constitutional rights, the attorney is ?merely exercising . . . good professional judgment,? and ?carrying out what he is sworn to do under his oath?to protect to the extent of his ability the rights of his client.? Chief Justice Warren concluded, ?In fulfilling this responsibility the attorney plays a vital role in the administration of criminal justice under our Constitution.? Freedman, 10 Crim. Law Bulletin 979 at 982‑983. (citations omitted).
This view of the defense lawyer?s role obliges him to hold in confidence both oral and physical evidence conveyed to him by the client. Since either an oral statement or physical evidence can provide a ?link in the chain of evidence? to convict the defendant client, there is no functional difference between disclosing one but not the other. Moreover, this analysis of the duty of the lawyer is consistent with a policy of encouraging complete and open communication between an attorney and client.
Obviously, however, the client cannot be expected to reveal to the lawyer all information that is potentially relevant, including that which may well be incriminating unless the client can be assured that the lawyer will maintain all such information in the strictest confidence. ?The purposes and necessities of the relation between a client and his attorney? require ?the fullest and freest disclosures? of the client?s ?objects, motives and acts.? If the attorney were permitted to reveal such disclosures, it would be ?not only a gross violation of a sacred trust upon his part,? but it would ?utterly destroy and prevent the usefulness and benefits to be derived from professional assistance.? Destroy that confidence, and ?a man would not venture to consult any skillful person, or would only dare to tell his counselor half his case.? The result would be impairment of the ?perfect freedom of consultation by client with attorney? which is ?essential to the administration of justice.? Id. at 985. (citations omitted).
Having set forth the countervailing interpretations, one of which is a simple argument arising from the plain language of the rule and criminal code and the other of which is considerably more complex and less obvious from the law, we are unable to provide an answer as to what the ethical obligations of an attorney are when in possession of incriminating evidence.[7] We do think it clear that, precisely because there is such uncertainty, lawyers are well advised not to take possession of evidence of a crime. The prudent course for the lawyer to follow is to provide representation to a client without taking custody of physical evidence which the lawyer believes may be evidence of the commission of a crime, regardless of the purpose for which the attorney might hold the evidence. Until such time as the Courts definitely construe 455 or 753, any other conduct exposes an attorney to serious risks of criminal prosecution and subsequent ethical sanctions.
Footnotes
[1] Comment, Search Of The Lawyers Office‑Court Sanctioned Threat to Confidential Communications, 32 Alabama L. Rev. 92, 93 n. 13 (1980); Radiant Burners, Inc. v. American Gas Association, 320 F.2d 314, 318 (7th Cir. 1963).
[2] 17‑A M.R.S.A. § 455 provides in part:
?§ 455. Falsifying Physical Evidence.
- A person is guilty of falsifying physical evidence if, believing that an official proceeding as defined in section 451, subsection 5, paragraph A, or an official criminal investigation, is pending or will be instituted, he:
A. Alters, destroys, conceals or removes anything relevant to such proceeding or investigation with intent to impair its verity, authenticity or availability in such proceeding or investigation; or . . .?
17‑A M.R.S.A. § 753 provides in part:
?§ 753. Hindering Apprehension or Prosecution.
- A person is guilty of hindering apprehension or prosecution if, with the intent to hinder, prevent or delay the discovery, apprehension, prosecution, conviction or punishment of another person for the commission of a crime, he:
c. Conceals, alters or destroys any physical evidence that might aid in the discovery, apprehension or conviction of such person; or . . .?
[3] For a general, if inconclusive, discussion of this subject see Annotated Code of Professional Responsibility, pp. 173‑178 and 312‑314 (1979) discussion D.R. 4‑101(c)(2) and D.R. 7‑102(A)(3) of the ABA Model Code of Professional Responsibility, on which the current Maine Bar Rules were largely modelled, and Lawyer?s Manual on Professional Conduct, § 55 and 1201, briefly comparing the former ABA Model Code with the recently adopted ABA Model Rules of Professional Conduct.
[4] Comment, The Right of A Criminal Defense Attorney to Withhold Physical Evidence Received From His Client, 32 U.Chi.L.Rev. 211 (1970); Comment, Legal Ethics and the Destruction of Physical Evidence, 88 Yale L.J. 1665 (1979); Comment, Ethics Law and Loyalty: The Attorney?s Duty to Turn Over Incriminating Physical Evidence, 32 Stanford L.Rev. 977 (1980); Freedman, Where The Bodies Are Buried: The Adversary System And the Obligation of Confidentiality, 10 Crim.Law Bul. 979 (‑ ‑); Comment, Professional Responsibility and In Re Ryder: Can An Attorney Serve Two Masters?, 54 Va. L. Rev. 124 (1968); Comment, An Attorney in Possession of Evidence Incriminating His Client, 25 Wash. & Lee L.Rev. 133 (1968); Comment, Fruits of the Attorney‑Client Privilege: Incriminating Evidence and Conflicting Duties, 3 Duq.L.Rev. 239 (1965); Comment, Search of the Lawyer?s Office‑Court Sanctioned Threat to Confidential Communications, 32 Alabama L.Rev. 92(1980); Comment, Legal Ethics: Confidentiality And The Case of Robert Garrow?s Lawyers, 25 Buff. L.Rev. 211 (1975); and Recent Developments, Attorney‑Client Privilege‑Contempt: The Dilemma in Non‑Disclosure of Possibly Privileged Information, 45 Wash.L.Rev. 181 (1970).
[5] E.g., 25 Wash. & Lee L.Rev. 131 at 136, 140‑141 (It is inconsistent to require a defense attorney to assert his client?s innocence and not disclose orally incriminating evidence, but oblige him to turn over incriminating physical evidence); 3 Duq.L.Rev. 239 at 247 (Court opinions provide little insight into the problem and lack ethical and legal supporting authority).
[6] E.g., 3 Duq.L.Rev. 239 at 250 (?Regardless of the situation, the monstrous conflict still looms overhead until some definitive statement or guidelines are promulgated. Until then, each lawyer must resolve the problem for himself always remembering his obligations as counsel for the defendant.?); 54 Va.L.Rev. 145 at 193 (If the attorney is unsure, he can consult with the Court although that may itself violate the client?s confidences); 25 Wash. & Lee L.Rev. 133 at 140‑141 (Ryder raises more questions than it answers. Problems will remain one of the most difficult to decide, until the Courts supply a solution.)
[7] The fact that the argument against mandatory disclosure is more lengthy than that in favor of disclosure should not be read as any indication that we favor one interpretation over the other, but rather simply as a reflection of the fact that one line of analysis is more complex than the other.
Enduring Ethics Opinion
Opinion #61. Establishment of Attorney-Client Relationship
Issued by the Professional Ethics Commission
Date Issued: September 4, 1985
Facts
Pursuant to Bar Rule 11(c)(1), Bar Counsel has asked for an advisory opinion on the following fact situation:
Client (C) contacted an attorney (X), for the purpose of determining if C had a cause of action against a local business. X had received background information concerning this matter three days prior to the meeting with C. At the consultation, X and C reviewed C?s possible claim for a breach of warranty and wrongful withholding of pay for services rendered.
At the conclusion of this single interview, X requested C to provide X with additional information to document certain aspects of his claims. X indicated to C that after X had received this information X would be in a better position to determine whether or not X would pursue C?s claims. No fee arrangement was discussed at this initial meeting.
Approximately six months transpired, with no subsequent response from C. Accordingly, X closed his file on this matter, assuming that C had decided not to pursue this particular matter. X did not specifically inquire of C as to the correctness of this assumption, but assumed from C?s silence that X?s services were no longer needed.
Approximately one month after X closed his file, C corresponded with X, supplying the additional information that X had initially requested, and apologizing for failing to provide it earlier. This subsequent correspondence from C indicated that C believed X to be representing C?s interests in this matter, i.e., C requested that X initiate a suit upon C?s behalf. X then placed this subsequent material with C?s file, but did not take any immediate action on this matter.
Sometime later C determined that X apparently was not going to pursue his interests. C then requested all of the contents of his file be returned to him. X failed to do so for a six‑month period.
Question
For purposes of Me. Bar R. 3.6(a)(3) and 3.6(f)(2)(iv), had an attorney‑client relationship been established between X and C? Opinion
It is first important to observe that the issue presented here could be resolved by resort to ordinary contract law.[1] Whether there existed a professional attorney‑client relationship should, in the first instance, be governed by the usual principles of contract law. In the facts of this case, however, there is some doubt as to whether there was a sufficient meeting of the minds to create a contract in the ordinary sense. For purposes of our analysis, therefore, we assume that there was, in fact, no meeting of the minds and thus no "contract.?
Nonetheless, even if no contract may be found to exist as a matter of law, a question still remains as to whether a lawyer‑client relationship has been created for ethical purposes. In answering that question, we are less concerned with traditional contract law considerations and more concerned about determining the point at which a relationship has been established sufficient to trigger the various ethical obligations incumbent on an attorney under the Maine Bar Rules. While reference to contract law principles is instructive, such principles are not dispositive of the ethical questions before us.
For the reasons set forth below, we conclude that under facts such as those set forth above, a lawyer‑client relationship was established at the time when C provided the requested information to X. First, although the Bar Rules do not define the term ?client? we discern from the Rules a general intent to use that term in a broad sense. The Bar Rules establish standards of professional conduct that apply not only between attorneys and their ?clients,? in a contractual sense, but also between attorneys and the public generally. Thus Rule 2(a) states that the purpose of the rules is to provide appropriate professional standards for attorneys in their relationships with their clients and ?the general public.? Consistent with that general statement, the specific standards in Rule 3 impose duties with respects to ?prospective clients? (Rule 3.4(a)), persons other than clients (e.g., Rules 3.6(c), 3.6(m) and 3.7(b)) and ?former clients? (Rule 3.4 (e)). We conclude that as a matter of policy the Rules are intended to apply to professional relationships even when no contractual arrangement has been established between the parties.
Second, the weight of authority holds that the ethical duties arising out of an attorney‑client relationship apply even if no employment ever occurs. Nolan v. Foremen, 665 F.2d 738, rehearing denied, 617 F.2d 1380 (5th Cir. 1982); Westinghouse Electric v. Kerr‑McGee Corp., 508 F.2d 1311 (7th Cir.), cert. denied, 439 U.S. 955 (1978). The Massachusetts Supreme Judicial Court has held that:
The attorney‑client privilege may extend to preliminary communications looking toward representation even if no representation is ever undertaken.
Commonwealth v. O?Brien, 377 Mass. 772, 388 N.E.2d 658 (Mass. 1979). In two separate opinions the Massachusetts Bar Association Committee on Professional Ethics has concluded that disclosure of confidential facts and documents by a person to a lawyer during a ?threshold interview? creates an attorney‑client relationship barring unauthorized disclosure of confidential information by the attorney to third parties. Mass. Committee of Prof. Ethics, Opinions 81‑1 and 76‑6. Consistent with these authorities, the Maine Grievance Commission held in Opinion #8 (April 2, 1980) that a prospective client who consults with a lawyer, discloses confidential information to the lawyer and preliminarily discusses legal issues, is a ?client? for purposes of Rule 3.6(l) even though the lawyer later declines formal employment and terminates the relationship.
Applying the foregoing principles to this case, we are of the opinion that an attorney‑client relationship had been established under Rules 3.6(a)(3) and 3.6(f)(2)(iv). Even if the parties had not reached a meeting of the minds in a contractual sense as to whether a professional relationship existed and the terms of the relationship, the nature of their communication was sufficient to establish an expectation in the mind of a reasonable person that the attorney had undertaken to advise him. The authorities cited above generally agree that in major part the existence or non‑existence of the professional relationship is dependent upon the understanding and expectation of the putative client. We think that C would have been fully justified in expecting in this case that any communications he made to the lawyer, including those at the initial conference, would be held in confidence. Consistent with that conclusion, we think the putative client would also have been justified in concluding that, at the point he supplied the additional documents requested by the attorney pursuant to the original consultation, at least a limited attorney‑client relationship was established. Those documents were provided as a follow up to an initial conference at which the lawyer led the potential client to believe that he would review documents and give legal advice to him. Those events are sufficient in our judgment to establish an attorney‑client relationship at least for purposes of 3.6(a)(3) (neglect) and 3.6(f)(2)(iv) (prompt return of client?s property)[2].
Footnotes
[1] It must be emphasized that this opinion is intended solely as guidance for interpretation of the Maine Bar Rules and is not intended to constitute an expression of opinion regarding the legal obligation or liability of attorneys under contract, tort or other substantive law.
[2] It should be understood, however, that in finding that a professional relationship existed under these facts, we do not express any opinion as to whether attorney X breached any ethical duty under the cited rules. All we conclude is that the professional obligations established by the Rules applied to the attorney?s relationship with C.
Enduring Ethics Opinion
Enduring Ethics Opinion #85 [June 2015]
Opinion #62. Attorney Remitting Percentage of Collection Fee to Collection Agency
Issued by the Professional Ethics Commission
Date Issued: November 5, 1985
Question
Many collection agencies work with specific attorneys, and refer difficult collection cases to those attorneys for collection, with the client?s prior permission. Typically, a collection agency will provide in its contract with the client that if it collects the debt, a 40% commission will be retained. However, if the debt goes to an attorney for collection, the commission will be 50%. This higher commission is established with the knowledge that the attorney to whom the debt would be referred charges, for example, a 33% commission. Upon a debt being referred to an attorney by a collection agency on behalf of a client 32 M.R.S.A. § 576 requires the collection agency to bow out, the collection agency is expressly prohibited from interfering in the attorney‑client relationship that then exists between the attorney and the client. Specifically, the law requires the collection agency to conduct itself at all times in a manner consistent with the true relationship of attorney and client that then exists between the attorney and the creditor.
Assume the debt in question is $100. If the attorney collects it all, he is entitled to keep $33. Because the attorney has a working relationship with the collection agency, however, and knows that the contract the collection agency had with his client provided for a 50% commission if referred to an attorney, the attorney will sometimes remit only $50 to the client and pay the remaining $17 to the collection agency. Is this practice of splitting the legal fees with a non‑lawyer in violation of Rule 3.3(e)?
Discussion
Maine Bar Rule 3.3(e) provides that, with certain exceptions not applicable to this inquiry, lawyers ?shall not share legal fees with a nonlawyer.? The Reporter?s Notes indicate that ?the rule supports Rule 3.2(a),? which rule basically prohibits the unauthorized practice of law. Rule 3.3(e) is a direct descendant from the Code of Professional Responsibility?s Disciplinary Rule 3‑102. Ethical Consideration 3‑8 under the Code stated that ?[s]ince a lawyer should not aid or encourage a layman to practice law, he should not practice law in association with a layman or otherwise share legal fees with a layman.?
American Bar Association Formal Opinion No. 180 recognized that there is a factual distinction between ?sharing legal fees? and ?sharing commissions,? between forwarder (collection agency) and receiver (attorney). The difference is whether or not the lay forwarder is being compensated for additional services (not of a legal nature) performed by it. If so, the Opinion held, then there is no violation of the proscription against sharing fees with non‑lawyers.
Similarly ABA Formal Opinion 294 stated in part that:
(a) It is recognized that the lay forwarder in performing a non‑legal service separate and apart from the legal services rendered by the receiving attorney, is entitled to be paid therefore by the creditor upon the basis of the service rendered by the forwarder, separate and apart from the legal services rendered by the receiving attorney.
(d) The receiving attorney shall not under any guise or form share his fee for legal services with a lay agency, personal or corporate, without prejudice, however, to the right of the lay forwarder to charge and collect from the creditor proper compensation for non‑legal services rendered by the lay forwarder which are separate and apart from the services performed by the receiving attorney.
See also, ABA Informal Opinion 735.
We see nothing inherently improper with the attorney deducting from the proceeds collected not only his fees but also the commission earned by the collection agency. The difficulty with any such situation comes in distinguishing whether there is in fact merely a payment to the collection agency of its independently earned commission or if the payment represents a ?kickback? of part of the attorney?s fee. It is this latter possibility which the Bar Rules prohibit.[1]
In the example hypothesized, however, it is clear that the lawyer?s true ?legal fee? is the lawyer?s own $33 which is not split with anyone. The $17 which the lawyer forwards to the collection agency is merely its commission authorized by the client.[2] So long as this distinction is kept clear we see no violation of Bar Rules 3.3(e).
Footnotes
[1] 32 M.R.S.A. § 576 also prohibits collection agencies from ?[demanding] or [obtaining] in any manner a share of the compensation for services performed by a lawyer in collecting a claim.?
[2] Although the facts presented do not make the point explicit, we assume that the client has specifically authorized the attorney to forward its percentage fee directly to the collection agency.
Enduring Ethics Opinion
Opinion #63. Attorney Assigned by Insurance Company as Lawyer for the Insured
Issued by the Professional Ethics Commission
Date Issued: November 5, 1985
Facts
Pursuant to the terms of an insurance policy, an insurance company has retained an attorney to provide a defense to its insured. The insurance company has notified its insured that the company will provide such defense at the company?s expense, but under a so‑called ?reservation of rights.? The insured is one of several defendants, each of whom is insured by the same company. The company, in an effort to save legal expense, has requested the attorney to represent all its insureds. The claims in the lawsuit include ones which are both within and outside the scope of the policy (e.g., the suit claims negligent and intentional conduct by the defendant insured. The policy only covers negligent acts). The damages sought in the complaint also exceed the coverage of the policy.
Questions Presented
In the foregoing situation, the following general questions are presented:
Who is the attorney?s client?
May the attorney represent multiple defendants?
May the attorney provide advice to the insured or the company in a dispute over coverage?
May the attorney provide representation on claims outside the scope of the policy?
Opinion
Maine Bar Rule 3.4 establishes the standards of conduct that apply to this situation. Since our review of those Rules, the Code of Professional Responsibility on which the Bar Rules are modeled, and the relevant case law, yields inconsistent answers to the questions posed, see Annotated Code of Professional Responsibility, 233‑237 (American Bar Foundation 1979), and in recognition of the complexity of this issue and the probable impact of any ethics opinion on a substantial sector of the bar, we requested the assistance of Maine lawyers prior to undertaking this opinion. A notice by the Ethics Commission was published in the January 1985 Bar Bulletin soliciting input on these general questions. Only three written responses were received. The conclusions below have been reached with due consideration to both the legal precedent and limited response of the bar.
Question 1: In our opinion, the attorney represents the insured, notwithstanding that he is hired and paid by the insurance company. The fact that the insurance company pays for the service rendered to its insured does not mean that the insurance company is the client. Rather, the insurance company is simply providing a defense for the benefit of the insured, not the company. Rule 3.6(h) provides that a person who pays a lawyer to render legal services to another person shall not regulate or direct the legal services thus provided. In circumstances such as this, it is the person who is the beneficiary of services who is the client, not the paying person or entity. See for example Maryland Casualty Co. v. Peppers, 64 III.2d 187, 355 N.E.2d (1976); ABA Informal Opinion 728.
We recognize that it may not be uncommon for the lawyer to think of the insurance company as the client, especially where the attorney has an ongoing relationship with the insurance company and is regularly referred cases by the company. Sometimes the lawyers will even list such companies as ?clients? in Martindale‑Hubbell entries. However, such perceptions do not determine the true identity of the client. Obviously, the lawyer in such a situation will have a desire to produce results satisfactory to the insurance company. Such desire is, however, not necessarily inconsistent with the lawyer?s duty to the insured as his client. Although the insurance company is contractually obligated to pay for a defense for the insured and the cost of damages within the policy limits, it is the insured who is in court and it is his rights which are at stake in the litigation. The lawyer appears in court as the attorney for the insured, not as the attorney for the insurance company. The insured is, therefore, entitled to be considered as the client for all purposes and the attorney has the duty to treat the insured with the full measure of care accorded to all client relationships.
Such attorney‑client relationship with the insured does not, of course, prohibit communications between the company and the lawyer. Both the insured and counsel ought to keep the insurance company fully apprised of all non‑confidential information (e.g., copies of discovery information) and developments in the suit. Cooperation with the insurance company is ordinarily required by the terms of the policy. In providing non‑confidential information to the insurance company and otherwise cooperating with it, the attorney is assisting the insured in complying with this common policy requirement. However, the fact of such cooperation does not alter the attorney‑client relationship with the insured. The attorney is required to maintain client confidences consistent with his paramount role as counsel to the insured, and he should inform his client of his intention to provide non‑confidential information to the insurance company.
Question 2: Whether the attorney may represent multiple insureds requires a case by case analysis of the applicable facts. The fact that the question arises in the context of an insurance defense lawsuit does not alter the customary analysis required by Rules 3.4(b), (c) and (d). See for example Ethics Commission Opinions #21, 37 and 44. In all cases, multiple employment is permitted only if (1) it is ?obvious? the lawyer can adequately represent both interests and (2) all clients consent after full disclosure. Unless both tests are met, multiple representation is prohibited.
Question 3: The question of whether the attorney may represent the insurance company on coverage issues while also representing the insured/client on the basic claim is resolved by reference to Rule 3.4(d). Since we start with the premise that the insured is the client, even though the company pays the fees, we conclude that the attorney cannot also provide advice to the company that could adversely affect his client. Even if the insured/client and company both consent, we do not think it is ?obvious? that the lawyer can adequately represent the interests of either party in that circumstance. Hence, we conclude that the company must be referred to separate counsel.
Although the lawyer may not represent the company on coverage issues, the question still remains as to whether he may represent the insured/client on such issues. The appropriate rule to apply is 3.4(f). Such representation is not automatically barred, but is permitted provided that the lawyer fully discloses to the insured the lawyer?s relationship to the insurance company (see discussion under Question 1 supra) and the effect such relationship might have on the lawyer?s effort on the insured?s behalf. If the client provides written consent after such disclosure, the attorney may represent him or her on coverage issues that are adverse to the company. It is important to emphasize, however, that the lawyer?s disclosure must fully inform the client of the continuing relationship between the company and the lawyer and the possible inhibiting effect such relationship could have on the lawyer.
Question 4: Whether the lawyer may provide representation to the insured/client with respect to claims outside the scope of the policy is also subject to analysis under Rule 3.4(f). In certain circumstances, it is possible that the structure of the defense could affect the allocation of financial responsibility between the insurance company and the insured. In such a case, it is in the insured?s interest to frame the defense in such a way that all potential liability falls within the coverage of the policy thereby avoiding the risk of uninsured liability. Such a consideration would also affect the insured?s decisions regarding settlement. Presumably, the insurance company would have a contrary view and would wish to avoid liability to the maximum extent possible. Since we have already noted that an ongoing relationship between the lawyer and company could affect the lawyer?s representation of the insured on coverage disputes, the same would also hold true in the case. Therefore, the lawyer should fully disclose the situation to this client and obtain written consent before providing representation on claims outside the scope of the policy.
Enduring Ethics Opinion
Enduring Ethics Opinion #63 [August 2015]
Opinion #64. Assertion of Contingent Fee Interest in Real Estate Which Is the Subject of the Lawsuit
Issued by the Professional Ethics Commission
Date Issued: January 7, 1986
Facts
The Grievance Commission has asked for an opinion based on the following facts. In 1982 client X retained attorney A to defend an action brought to establish the plaintiff?s title to certain real estate. X was the defendant. X and A executed a document entitled ?Retainer Agreement? providing that X would convey the real estate involved in the litigation to a corporation in which A would hold one‑third of the capital stock and X would hold the remaining two‑thirds.
Ten months later X and attorney A executed a contingent fee agreement using the form provided in Rule 8 of the Maine Bar Rules. The controversy was identified as defense of the title litigation. The contingency was identified as resolution of the litigation in favor of the defendant X and presumably his successor in title, the corporation. The agreement provided that the client would not be liable to pay compensation other than from amounts collected by the attorney except for disbursements and travel expenses and at the same time provided that the fee would not exceed one‑third ?of lands involved in said litigation.? The agreement further stated that it was intended to confirm and ratify the previous retainer agreement.
Question
Does this arrangement violate any of the Bar Rules?
Opinion
It is not clear just what the parties intended, nor is it clear which parts of these overlapping and inconsistent agreements were performed. We will assume, however, that the corporation was formed, its stock was issued, and the real estate was conveyed to it. We will further assume that the attorney intended these agreements to be construed as complying with the Bar Rules to the extent possible. Whether or not that was his intention, we believe any Court adjudicating a claim arising from the attorney‑client relationship would so construe them for the client?s protection.
Standing alone, the retainer agreement provided that the attorney would receive a proprietary interest in the subject matter of the litigation in violation of Bar Rule 3.7(c). Rule 3.7(c) provides:
(c) Interest in Litigation. A lawyer shall not acquire a proprietary interest in the cause of action or subject matter of litigation he is conducting for a client, except that he may:
(1) Assert a lien granted by law against the proceeds of such action or litigation to secure his fee or expenses . . .(2) Contract with a client for a reasonable contingent fee as provided in Rule 8.
Ownership of stock in a corporation formed to hold title to the real estate in litigation is such a proprietary interest although indirect. Even if it were not, Rule 3.2(f)(1) would be violated by using a corporate shield to circumvent Rule 3.7(c).
Rule 3.7(c) permits two exceptions to its prohibition, assertion of ?a lien granted by law,? and a contingent fee agreement as provided in Bar Rule 8. The retainer agreement was not a lien granted by law in proceeds of litigation. It was an agreement to grant absolute ownership in the property being litigated. The term ?lien granted by law? does not, in our view, include an interest created by agreement.
Nor was the initial retainer agreement saved by the contingent fee exception. It may be inferred that the corporation would own nothing unless the attorney succeeded, and to that extent the likely effect of the retainer agreement may have resembled a contingent fee agreement. Rule 3.8(c) requires, however, a contract as provided in Rule 8. The retainer agreement lacked substantial terms that Rule 8 requires in a contingent fee contract and thus did not qualify.
Sometime later the parties executed a second agreement, attempting to follow the form of a Rule 8 contingent fee contract. The second agreement recited that it was intended as an amendment to the retainer agreement. Accordingly we will construe the two together and in light of applicable requirements of the Bar Rules. Thus construed, the agreements created only a contingent interest in the real estate. If the attorney failed to defend title to the real estate or was discharged he could have been required to surrender his stock, subject to any right he might have to some part of the real estate if a successor attorney managed to defend the title. Failure to do so voluntarily could be treated as a violation of Rules 3.2(f)(1) and 3.7(c).
Does Rule 8 allow attorneys to make a contingent fee agreement providing for payment in the form of an interest in real property? Although certain terms used in the Rule suggest that the drafters had in mind primarily fees payable in money, on considering the rule as a whole, we conclude that it was intended to have a broader scope.
Rule 8 was taken, without significant alteration, from M.R.C.P. Rule 88, adopted January 1, 1966. Originally the impetus for the rule was a 1965 amendment to Maine?s criminal champerty statute providing that ?agreement . . . to bring, prosecute or defend any civil action on a contingent fee basis? would not henceforth be champertous, as they had previously been. Maine was the last state to allow contingent fee agreements.
It is evident that Rule 8 cannot be limited to cases in which successful litigation will produce a monetary recovery. Excluded as cases in which contingent fee agreements are permissible are criminal actions, and certain domestic relations cases. The former produce no recovery; the latter frequently produce none. Paragraph (e) of the rule requires a statement ?whether and to what extent the client is to be liable to pay compensation otherwise than from amounts collected for him.? And the statute prompting adoption of the rule provided that contingent fee agreements to ?prosecute or defend a civil action? would not be champertous. Clearly this would allow defense of a real action on a contingent fee basis, even though there would be no fund recovered from which to pay a fee. The rule was intended to protect the public by regulating the fee arrangements recently made lawful by the Legislature and therefore must have been intended to apply to all those arrangements, including agreements for the defense of litigation.
The authors of Maine Civil Practice maintain that former Rule 88 was intended to be even broader.
?Rule 88 . . . is not restricted in scope to civil cases before that [Superior] court or even to litigated matters. It is a rule regulating the conduct of members of the bar generally. . . . The rule regulates contingent fee agreements for proceedings in the District Court and the Probate Court and before administrative agencies such as the State Liquor Commission. . . .? (2 Maine Civil Practice § 88.1, p. 361)
Obviously no such rule could restrict the attorney to a fee derived from monetary amounts recovered by him for the client, since the parties may not expect to recover anything. That being the case, is there any reason why a contingent fee may not be paid in any manner allowable for payment of a non‑contingent fee?
Rule 8 aside, nothing in the Bar Rules suggests that fees for legal services must be paid in cash. Payment in kind was at one time probably quite common. All the factors outlined in Rule 3.3 as determinative of whether a fee is excessive may be applied to fees paid in kind, although a disciplinary authority would presumably have to take on the added task of evaluating the property.
Rule 8 uses the word ?amount? in referring to the contingent fee in sub‑paragraphs (a) and (e) and in the suggested form of agreement. But original Rule 88 was intended to cover all the ground covered by the exclusion from the champerty statute that prompted the Court to adopt it. That exclusion made all agreements ?on a contingent fee basis? non‑champertous. Among the agreements thus made lawful would surely have been agreements in which the contingent fee was payable in kind. One result of the amendment was that attorneys and clients could henceforth bring or defend a civil action ?on shares,? including a share in any real estate involved.
We therefore conclude that the word ?amount? as used in Rule 8 is a word of convenience and was not intended to require payment of contingent compensation in cash.
Accordingly, a contingent fee agreement in which the service is defense of the client?s title to real estate, and the fee is to be a share of the real estate involved may comply with Rule 8 and if so will not offend Rule 3.7(c).
Enduring Ethics Opinion
Enduring Ethics Opinion #64 [June 2012]
Opinion #109. Duties of Lawyer/Mayor and Partners or Associates During Representation Before Public Bodies
Issued by the Professional Ethics Commission
Date Issued: October 4, 1990
A member of the Bar who is also the mayor of one of the cities of the State has asked several questions concerning the ethical restrictions which may apply to a member of his firm appearing as an advocate before or against the city or its governmental subunits. Under the city?s charter, the mayor presides at City Council meetings (but votes only in case of ties), and serves on the school committee, the water district and the sewerage district (though he may appoint city councilors to serve in his stead). The Commission believes that all of the questions asked are answered directly by recent amendments to the Code of Professional Responsibility and its Opinion No. 73 (August 6, 1986). Those answers, in summary form, are as follows:
Question No. 1
May a member of the lawyer/mayor?s firm represent clients before a municipal department in matters such as land use permitting, real estate tax assessment, and community development loans?
ANSWER
New Bar Rule 3.2(d)(2), effective April 2, 1990, prohibits lawyers who hold public office from representing clients only ?before an elected or appointed public body of which the lawyer is a member or before any committee or subcommittee of that body.? The enumerated municipal departments at issue are not public bodies of which the lawyer is a member. Thus, the lawyer/mayor himself could undertake the representation described by the question. Therefore, so may his partners and associates. The only restriction imposed upon the lawyer/public official himself is that contained in Rule 3.2(d)(1) which prohibits him from using his position to ?influence, or attempt to influence,? a ?public body or official engaged in adjudicatory proceedings,? which the types of activities described by the question appear to be. See generally Advisory Committee Note to 1990 Amendment to Rule 3.2(d).
Question No. 2
May a member of the lawyer/mayor?s firm represent clients before the City Council itself or before a municipal board such as a planning board or board of appeals or before a quasi‑municipal board such as the water district or sewer district?
ANSWER
Under the facts presented, the answer to this question depends on the identity of the particular board at issue. As just indicated, the only prohibition against the lawyer/mayor himself appearing before a public body of the city is that he may not appear before bodies of which he is a member, as well as committees or subcommittees of those bodies. The lawyer/mayor in this case is a member of the City Council, the school committee and the water and sewer district. He is not a member of the planning board or board of appeals.
Thus, he may not appear before the former group of bodies,[1] but may do so before the latter (which are not subcommittees of any of the former) so long as he does not use his position to influence their determinations.
Under the new rules, therefore, there is no problem with the lawyer/mayor?s partners and associates representing clients before all of those bodies of which he is not a member. As to those bodies of which he is a member the question becomes whether his partners and associates are disqualified through the vicarious disqualification provisions of Rule 3.4(k). That rule was also amended in 1990 to add a new provision specifying that if a lawyer is required to decline employment by virtue of Rule 3.2(d)(2), his partners and associates are not disqualified from appearing in front of the public body of which he is a member, so long as ?full disclosure of the relationship is made upon the record at or before the commencement of the representation.? Thus, a lawyer/mayor?s partners or associates may appear before the City Council, both on legislative and adjudicatory matters, and other city bodies of which he is a member, so long as they comply with the provisions of this rule.
Question No. 3
May a member of the lawyer/mayor?s firm represent clients in a civil action against the city such as one brought pursuant to Rule 80B, Me.R. Civ.P.?
ANSWER
This question was not addressed by the recent amendments to the Bar rules, but was thoroughly discussed in the Commission?s Opinion No. 73. The first question discussed in that opinion concerns the ability of a lawyer, or his partners or associates, to engage in litigation against the city of which the lawyer is a councilor. The opinion concluded that neither the lawyer/public official, nor his partners or associates, may engage in such litigation, even if the lawyer/public official were to take no part in any council deliberations concerning the litigation. Since the lawyer here, as mayor, serves on the city council, his situation is squarely covered by this opinion. Therefore, neither he, nor his partners or associates, may litigate against the city so long as he remains mayor thereof.
Footnote
[1] Since the lawyer/mayor may appoint city councilors to serve in his stead on these latter three bodies, the disqualification of Rule 3.2(d)(2) does not apply if he makes such an appointment and so is not on the committee at issue himself.
Enduring Ethics Opinion
Opinion #65. Defense of Criminal Cases by Attorney Whose Spouse Is Related to District Attorney
Issued by the Professional Ethics Commission
Date Issued: December 4, 1985
Question
What limitations do the Maine Bar Rules impose on the representation of criminal defendants by an attorney whose spouse is a sibling of the local District Attorney?
Opinion
We assume that the District Attorney has a staff of one or more assistants who take responsibility for part of the office caseload and could be responsible for any cases in which the related attorney is defense counsel.
The question is controlled by Rules 3.4(f) and 3.4(a) of the Maine Bar Rules. Rule 3.4(f) provides:
Except with the informed written consent of the client after full disclosure, a lawyer shall not accept employment if the exercise of his professional judgment on behalf of the client will be, or reasonably may be, affected by any interest of the lawyer.
Rule 3.4(a) requires disclosure of all such interests of the lawyer. Depending on the circumstances, the relationship of the brother or sister‑in‑law is potentially just such an ?interest of the lawyer.?[1]
In Opinion No. 3, the Grievance Commission considered several hypothetical cases involving related lawyers. In discussing the applicability of Rule 3.4(f), the opinion concluded that regardless of the relationship between the two attorneys involved, including the relationship of in‑laws, if the two attorneys opposed one another directly in a litigated matter there was a sufficient likelihood that their ?interest? might affect the exercise of the professional judgment of one or the other of them so that both should obtain the informed written consent of their clients. The opinion also concluded that when the related attorneys were in‑laws and one was opposed, not by the other related attorney, but by the other attorney?s ?firm,? there was only a remote possibility that Rule 3.4(f) would apply. Consequently, in that case we concluded that informed written consent of the clients would not be necessary, but might be desirable.
Opinion 3 did not discuss the applicability of the vicarious disqualifications required by Rule 3.4(k) to such a situation. According to the Reporter?s Notes, Rule 3.4(k) does not apply to common employment in a government agency and therefore need not be considered in this opinion. Opinion 3 thus appears to permit an attorney to represent criminal defendants in the jurisdiction for which an in‑law is District Attorney, provided the District Attorney does not actively participate in any case the in‑law is defending. If the in‑law District Attorney does participate, the opinion suggests that written client consent on both sides may be required.
Ordinarily, the applicability of Rule 3.4(f) must be determined primarily by the attorney involved. Presumably the attorney is in the best position to determine whether ?any interest? will or reasonably may affect the exercise of his professional judgment on behalf of a client. Some interests may, however, make such an effect so likely as to make any contrary conclusion unreasonable. For example, in Peaslee v. Pedco, Inc., 388 A.2d 103 (Me. 1978), an attorney representing sellers of real estate was a shareholder of the purchasing corporation, as well as its attorney. In an opinion delivered before adoption of Bar Rule 3, the Court held that the sellers could rescind because the attorney?s personal interest had not been disclosed. In dicta the opinion suggested proper disclosures might have cured the defect.
In Opinion 36, the Grievance Commission found that an Assistant District Attorney whose spouse was a member of a firm that represented a number of criminal defendants in the Assistant?s jurisdiction had an interest overwhelmingly likely to affect professional judgment. The opinion reasoned that consent from the State was unobtainable and therefore concluded that the assistant and a member of the spouse?s firm could not represent opposing sides of the same criminal case. In Opinion 42 the Grievance Commission modified this conclusion by holding that the consent of the State to representation despite a vicarious spousal conflict could be given either through the District Attorney or the Attorney General.
An in‑law relationship does not necessarily have any of the characteristics of intimacy and certainly does not have the legal protection relied upon by the Commission in finding that Rule 3.4(f) would necessarily be implicated if an attorney and the law firm of the attorney?s spouse were on opposite sides. There is no reason to assume any tie between attorneys related as inlaws, other than acquaintance.
The attorney who proposes to undertake a criminal defense will be subject to the disclosure requirement of Rule 3.4(a) whether or not Rule 3.4(f) applies to the case. The disclosure requirement does not depend upon the attorney?s judgment whether a relationship with the District Attorney may affect the exercise of the defense attorney?s professional judgment. Disclosure is required if there is any relationship with the adverse party or if the attorney has ?any interest or connection with the matter at hand that could influence the client in the selection of a lawyer.? It is evident that being related to the District Attorney as an in‑law falls into this category. Accordingly, disclosure should be made in all such cases.
The disclosure requirement necessarily will apply differently to the District Attorney. It may be advisable to notify the Attorney General, at least, of the possibility that the in‑law will be defense counsel and give that official an opportunity to provide a substitute prosecutor. We do not believe notice is required if the District Attorney does not intend to become personally involved in a case. As suggested in Opinion 42, the Attorney General presumably could give any client consent required for the District Attorney to undertake or continue an active role in a case in which the in‑law is defense counsel.
To summarize, an attorney who has an in‑law relationship with the local District Attorney may represent defendants in cases prosecuted by that District Attorney?s office, whether or not the District Attorney is involved personally. The defense attorney must disclose the relationship to each prospective client‑defendant before representation commences. If the District Attorney becomes personally involved in the case, and if the defense attorney concludes that such personal involvement creates an interest that may affect the exercise of professional judgment, the informed written consent of the client‑defendant must be obtained. If the District Attorney concludes that representation of the defendant by an in‑law may affect the exercise of his professional judgment in any given case (either because of the District Attorney?s personal involvement in the case or otherwise) the informed written consent of the Attorney General must be obtained.
Footnote
[1] Rule 3.4(b), which on occasion has been cited in response to questions involving consanguinity, is not pertinent. The conflicts of interest covered by Rule 3.4(b), and related rules 3.4(c) and (d), are conflicts between the interests of different clients and prospective clients of the same lawyer or law firm. It is not the interests of the clients but of the lawyers that raise the question presented by this request.
Enduring Ethics Opinion
Opinion #108. Limitations on Witness-Lawyer
Issued by the Professional Ethics Commission
Date Issued: September 20, 1990
Question
A lawyer has been hired by an employer to act as their chief negotiator in pending labor negotiations. Prior to the lawyer?s engagement the employer had been representing itself in sessions, but little progress had been made. After lengthy discussions with her client, the lawyer presented to the employee representative a set of proposals, many of which involved matters that had not been discussed in the previous bargaining sessions with the employee representative. The subsequent sessions produced no agreement. In fact the employee representative filed a Prohibited Practice Complaint with the Maine Labor Relations Board alleging, among other matters, 1) failure to bargain in good faith due to the addition of new issues presented by the lawyer when she entered the negotiations, and 2) discrimination against Union employees. The lawyer was named as a respondent as well as her client and its individual agents and officers.
The question is whether the lawyer?s firm can still continue to represent the client in the Prohibited Practice Complaint.
Opinion
Three rules are implicated in this matter. Rule 3.5(b)(1) states:
If a lawyer knows, or should know, that he or a lawyer in his firm is likely or ought to be called as a witness in litigation concerning the subject matter of the lawyer?s employment, the lawyer and the lawyer?s firm shall withdraw from representation at the trial unless the court otherwise orders. This rule does not apply to situations in which the lawyer would not be precluded from accepting employment under Rule 3.4(j).
Rule 3.4(f) states:
Except with the informed written consent of the client after full disclosure, a lawyer shall not accept employment if the exercise of his professional judgment on behalf of the client will be, or reasonably may be, affected by any interest of the lawyer.
Under the question as presented, this is really not an issue because the Commission is asked to assume that full disclosure has been made to the client, and the client has unequivocally indicated in writing its desire to have the lawyer and her firm continue to represent it.[1]
Thus it is the third rule, Rule 3.4(j), which is the primary focus of this inquiry. In relevant part it reads:
(1) A lawyer shall not accept employment in contemplated or pending litigation if he knows, or should know, that he is likely or ought to be called as a witness. . . .
(2) A lawyer may accept employment in contemplated or pending litigation if another lawyer in his firm is likely or ought to be called as a witness unless such employment is precluded by [exceptions not relevant to this question].
It is stated in the facts presented that the lawyer intends to have a member of her firm actually conduct the litigation before the Board although she expects to be substantially involved in the preparation of the case.
While the lawyer would clearly be disqualified from continuing to represent the client under subparagraph 3.4(j)(1) once she is made a party and is likely to become a witness, it is equally clear that subparagraph (2) permits her associates to represent the client. The only question is whether the fact that the lawyer continues to participate in the case means that subparagraph (2) does not apply in this case. The Commission concludes that the contemplated arrangement, as presented, would not violate Rule 3.4(j) as long as the non‑witness‑lawyer, and not the witness‑lawyer, exercises control of the litigation before the Board.
The purpose of Rule 3.4(j) is to (1) preclude an unseemly situation in which the lawyer is at once testifying and arguing his own credibility, and (2) the danger of a lawyer being unable to exercise independent professional judgment on behalf of a client. See Opinion 56. The first concern is resolved by requiring that someone other than the lawyer‑witness conduct the litigation. The Bar Rules resolve the second concern by a per se exclusion of the lawyer‑witness from serving the dual role, but permitting the client to determine if he wishes representation by the witness‑lawyer?s associate after full disclosure of the possible conflicts that exist. By requiring the non‑witness‑lawyer to control the litigation, these principles are not compromised. The witness‑lawyer is not prevented from participating in the case, as would be expected and indeed welcomed by the client; but appropriate protection is achieved as long as it is understood and accepted by all parties, including the client, that the non‑witness‑lawyer and the client are in control of the litigation.
Footnote
[1] The Commission also assumes that the standards of Rule 3.4(c) and (d) have been satisfied.
Enduring Ethics Opinion
Opinion #66. Settlement of Malpractice Claim Which Also Involves Withdrawal of Grievance
Issued by the Professional Ethics Commission
Date Issued: January 7, 1986
Question
Pursuant to Maine Bar Rule 11(c)(1), Bar Counsel has requested an opinion concerning the following situation:
X has sued Attorney A for malpractice. X also filed a complaint concerning A?s conduct with the Grievance Commission. Proceedings on the grievance were stayed by the Commission pending the outcome of the malpractice action.
Counsel for A and for X have virtually agreed upon a settlement of the malpractice litigation. Counsel for A has, however, requested a provision in the settlement agreement whereby X undertakes to ?withdraw? his pending grievance against A and not pursue that grievance at any time in the future.
Would such an agreement violate the Maine Bar Rules?
Opinion
The Bar Rules certainly do not encourage such a provision as part of a private settlement. Rule 7(g) provides that neither the refusal of a complainant to cooperate nor a settlement require abatement of a grievance proceeding. Hence, it may be doubted that the proposed agreement could accomplish very much. Nevertheless, it is not entirely clear just what X would be agreeing to do, and some versions of an agreement to ?withdraw? and ?not pursue? a grievance would clearly violate the Bar Rules.
If X will have agreed merely to inform Bar Counsel of the settlement, or even testify before the Grievance Commission that the settlement has occurred, none of the Bar Rules will be implicated. If X will have agreed to express a preference that the grievance not be prosecuted, or even mere satisfaction if it is not pursued, then we conclude that, unless these statements are entirely truthful, counsel will have violated Rules 3.2(f)(3) and 3.7(e) (1)(i). These Rules prohibit conduct involving dishonesty and misrepresentation and enjoin a lawyer to employ only such means as are consistent with truth in appearing before a tribunal. An agreement to provide this kind of statement in exchange for a settlement suggests strongly that it may be less than completely honest, e.g., see State v. Halleck, 308 N.W.2d 56, 59 (Iowa, 1981); Committee v. Halleck, 325 N.W.2d 117, 118 (Iowa 1982).
If the settlement agreement goes still further, for example, by providing for a payment to X contingent upon X?s refusal to cooperate with the Grievance Commission, Counsel for A and perhaps A as well, will have violated Rule 3.2(f)(1) by circumventing Rules 7(g), 7(r) and 5. Rule 3.2 (f)(1) provides: ?A lawyer shall not . . . circumvent or subvert any provision of the Maine Bar Rules.? Rule 7(g) provides that neither a settlement nor failure of a complainant to testify abates a grievance. Rule 7(r) provides for compulsory testimony, and Rule 5 gives Bar Counsel authority to investigate allegations of misconduct on his own. Exacting an agreement not to cooperate in an investigation would seem at least to be conduct circumventing the investigation.
If the agreement purports to require X to avoid service of a subpoena or change his testimony?features not suggested by the question as stated?A?s attorney would appear to be violating Rule 3.7(g), which forbids various forms of witness tampering.
Enduring Ethics Opinion
Enduring Ethics Opinion #66 [April 2024]
Opinion #107. Obligation of Attorney/Corporate Director to Maintain Client Confidences
Issued by the Professional Ethics Commission
Date Issued: June 27, 1990
Question
Bar Counsel has requested an advisory opinion regarding the following question:
A member of the Maine Bar who serves as a director of a Maine corporation has reason to believe that a client of his is in significant financial trouble. The corporation upon whose board he sits is at risk by reason of its business relationship with his client, not a relationship arranged by the attorney. Can the attorney disclose to the corporation that his client is having serious financial problems, thus enabling the corporation upon whose board he sits to minimize the extent of the loss to it? If not, how does he fulfill his duties as a director to the corporation?
Opinion
It is the opinion of the Commission that if the lawyer?s knowledge of the information concerning his client?s financial troubles was gained ?in the professional relationship? between the lawyer and the client, the lawyer is prevented by Maine Bar Rule 3.6(l) from disclosing that information to the corporation. See Maine Bar Rule 3.6(l)(1) and (5) (prohibiting disclosure of a ?confidence or secret? of a client and defining ?secret? as including ?information gained in the professional relationship . . . the disclosure of which would be embarrassing or detrimental to the client?).
If that information concerning the client?s financial difficulties was gained by the lawyer other than in connection with the lawyer?s representation of the client, for example, through a media report of his client?s financial affairs, the lawyer would not be prohibited by the Maine Bar Rules from disclosing that public information. Whether the lawyer would be subject to common law liability for breach of fiduciary duty for reporting that information under circumstances that would be detrimental to the client is a question of law, which is beyond the authority of the Commission. In that regard, however, it should be noted that ABA Model Rule 1.8(b) prohibits a lawyer from using information relating to representation of a client to the disadvantage of the client unless the client consents thereto after consultation. ABA Model Rule 1.9(b) permits disclosure of information generally known about a former client, but that public information exception does not apply regarding a present client. ABA Model Rule 1.8(b).
Under the circumstances presented, if the lawyer does not disclose the information in question to the corporation, the lawyer should determine whether the non‑disclosure of the information in question to the corporation is incompatible with his duties as a director of a corporation under Maine law, 13‑A M.R.S.A. § 716. The circumstances under which the lawyer?s resignation from his directorship would be mandated are fact‑specific and involve questions of law beyond the authority of the Commission.
Enduring Ethics Opinion
Opinion #67. Advisory Opinions Regarding Past Conduct by Other Attorneys
Issued by the Professional Ethics Commission
Date Issued: January 7, 1986
Question
A Maine attorney has asked the Commission whether it is proper for a law firm, one of the members of which is the town attorney of a municipality, to represent a real estate developer in acquiring permits, special exceptions and zoning changes from the appropriate agencies of the town, assuming that the town attorney member continues to advise and represent the town: a) in connection with the developer?s permit and zoning requests; b) on other matters, but not in connection with the developer?s requests.
Opinion
For the following reasons the Commission declines to answer the question.
Advisory opinions interpreting the Bar Rules were previously issued by the Grievance Commission. The Professional Ethics Commission was established by the Maine Supreme Court on February 15, 1985, under new Bar Rule 11 to assume this function. As an independent body the Commission must be careful not to interfere with the jurisdiction of other agencies involved in the disciplinary process. Its function is solely to issue advisory opinions.
The mandatory duties of the Commission include responding to opinion requests from the Court, Bar Counsel, the Grievance Commission and the Board of Overseers. [Bar Rule 11(c)(2)]. The Commission is authorized, but is not required, to respond to inquiries from members of the Bar. The Commission recognizes that this discretionary function, properly exercised, can be of considerable assistance to the Bar. The experience of the Grievance Commission in rendering advisory opinions however, revealed an occasional tendency on the part of attorneys to seek advisory opinions concerning past conduct of other attorneys as an alternative to filing a grievance.
The authorities empowered to investigate and act on questions as to whether the past conduct of an attorney violates the Bar Rules are Bar Counsel and the Grievance Commission, not the Ethics Commission. While a request for an advisory opinion may seem to be a less drastic way of dealing with perceived violations of the Bar Rules, there are several reasons why the Ethics Commission should not act on such requests.
First, the Ethics Commission proceeds ex parte and without investigating the facts. Consequently, an ostensibly advisory opinion, when applied to the real case, may be one‑sided and inaccurate.
Second, if the Ethics Commission were to issue an opinion regarding past conduct, the attorney requesting the opinion might later seek to use it to suggest publicly that his adversary had been guilty of unethical conduct. He is quite likely to use the opinion this way in a non‑public encounter. The target attorney naturally then will ask to have the matter reconsidered in light of different facts and additional arguments. Before long, the Ethics Commission would be embroiled in a fact finding process it is neither equipped nor authorized to conduct.
Faced with a similar problem the ABA Standing Committee on Professional Ethics adopted two limiting policies. Unless the request for an opinion comes from a disciplinary authority, such as a Grievance Commission, the ABA Committee will not render an opinion on conduct that has already occurred and generally will not render an opinion on the proposed conduct of anyone other than the requesting attorney. We adopt both these restrictions. In determining whether these restrictions apply, the Ethics Commission will use all the information that may be available to it and will not rely solely on the inquiry itself.
The Commission has concluded that the present inquiry does not concern future conduct of the inquiring attorney. Rather it seems to inquire about past, and perhaps anticipated, conduct of another person. Accordingly we decline to respond.
Although declining to answer the present request for an advisory opinion, the commission remains interested in receiving appropriate inquiries from members of the Bar, and is anxious to render opinions that will aid attorneys in faithfully adhering to their obligations. It should also be noted that even where deferral to bodies of coordinate jurisdiction is called for, Rule 11 authorizes those bodies to request opinions of the Ethics Commission, and such opinions are mandatory rather than discretionary.
Enduring Ethics Opinion
Opinion #68. Obtaining Release of Claims of Present and Future Professional Misconduct
Issued by the Professional Ethics Commission
Date Issued: March 14, 1986
Pursuant to M. Bar R. 11(c)(1), both Bar Counsel and the Grievance Commission have requested an advisory opinion from the Professional Ethics Commission with respect to the following fact pattern:
Client C retains the services of law firm XYZ for the specific purpose of handling certain financial negotiations with Bank B on behalf of C. The written agreement between C and XYZ with respect to this representation specifically indicates the hourly rate for such services, as well as C?s obligation to pay an initial retainer of $1,000. C made payment of the retainer, and XYZ commenced its representation of C by contacting B.
Subsequent to this initial work performed by XYZ, it was determined that the firm had an apparent conflict of interest, and was no longer able to represent C, regarding any claim against B.
Prior to ending XYZ?s representation of C with respect to matters involving B, XYZ had represented C on certain collection matters, unrelated to B or the conflict. It was agreed, that despite XYZ?s withdrawal from representation of C concerning B, that XYZ would continue to represent C on the collection matters. When C was advised by XYZ of its inability to represent him reference B, C demanded the return of his entire $1,000 retainer. XYZ then indicated that portions of the retainer were to be applied toward services and expenses regarding the defense of the unrelated collection claims, and returned to C the retainer less the amount attributable to such claims. Later, however, XYZ returned the balance of the retainer, upon C?s execution of a release of XYZ from any and all actual or threatened claims of ethical misconduct, professional negligence, economic harm, physical injury or emotional distress.
Questions Presented
Given the specific language of the fee agreement, is XYZ authorized to retain portions thereof for other unrelated matters, or are they required to return all of the retainer to C?
Was the release from professional negligence authorized pursuant to M. Bar R. 3.6(b)(2)?
In any event, notwithstanding the answers to questions 1 and 2 above, is a release from any present or future claims of ethical misconduct appropriate pursuant to the Maine Bar Rules?
Opinion
Return of Retainer. Maine Bar Rule 3.5(a)(3) provides, inter alia, that ?a lawyer who withdraws from employment shall refund promptly any part of a fee paid in advance that has not been earned.? By virtue of Rule 3.5 (a)(3), the critical question here is whether the portion of the initial retainer fee which was not refunded to the client had been ?earned? by the firm. If the initial retainer fee was paid to the firm for the specific purpose of the firm?s representation of the client in the subject matter of representation from which the firm later withdrew from representation, it is the opinion of the Commission that under Rule 3.5(a)(3) no part of that initial retainer fee could be said to have been ?earned? by the firm?s representation of the client in other matters which were unrelated to the subject matter for which the initial retainer was paid.
Release from Professional Negligence. Maine Bar Rule 3.6(b) provides:
(b) Limiting Liability. A lawyer shall not attempt to exonerate himself from, or limit, his liability to his client for his personal malpractice or that of his partners or salaried employees. This rule shall not prevent a lawyer from settling or defending a malpractice claim.
To the extent that the release in question purports to release the firm from malpractice claims that might arise in connection with the firm?s future representation of the client, the release would be prohibited by the first sentence of Rule 3.6(b).
To the extent that the release purports to release the firm from malpractice claims that might have existed as of the date of the release, the release would be permissible only if it could be considered to constitute the ?settlement? of a malpractice claim under the second sentence of Rule 3.6(b).
Since the settlement of a malpractice claim with a client constitutes a ?business transaction? with a client within the meaning of Rule 3.6(i)(2), the requirements of Rule 3.6(i)(1), which are made applicable to such a transaction by virtue of Rule 3.6(i)(2), must be read into the ?settlement? provision of the second sentence of Rule 3.6(b). Construing the ?settlement? provision of the second sentence of Rule 3.6(b) in conjunction with Rule 3.6(i)(1) and (2), the Commission concludes that a lawyer?s settlement and acceptance of a release of his client?s malpractice claim against him is not permissible unless, consistent with Rule 3.6(i)(1) and (2), the release and settlement are fair and reasonable to the client and are fully disclosed and transmitted to the client in manner and terms which should have reasonably been understood by the client; the client is advised and given a reasonable opportunity to seek independent professional advice of counsel of the client?s choice regarding the settlement and release; and the client consents in writing to the settlement and release.[1] One member of the Commission believes that the settlement of a malpractice claim with a client is not a ?business transaction? within the meaning of Rule 3.6(i)(2) and is therefore not subject to the restrictions imposed by the opinion.
- Release from Present and Future Claims of Ethical Misconduct. It is the opinion of the Commission that a client?s release of a lawyer from past or future claims of ethical misconduct is both ineffectual and prohibited by virtue of Maine Bar Rule 3.2(f)(1), which provides that ?[a] lawyer shall not (1) directly or indirectly . . . circumvent, or subvert any provision of the Maine Bar Rules.? It would therefore be improper for a lawyer to request or to accept a client?s release of present or future claims of ethical misconduct. See Ethics Commission Opinion No. 66.
Footnote
[1] The Commission notes that the release in any event may be ineffectual because of lack of consideration if the only consideration for the release was the refund to the client of the initial retainer fee. Assuming the facts to be as discussed in part (1) above, the client would have been entitled to that refund as a matter of right.
Enduring Ethics Opinion
Opinion #106. Law Firm Acting as "Escrow Agent" to Assist Both Parties in Purchase and Sale of Business
Issued by the Professional Ethics Commission
Date Issued: May 25, 1990
QUESTION
A law firm is requested by a self‑proclaimed ?business broker? to serve as an ?escrow agent? to ?assist both parties? in the purchase and sale of a business. The business broker advertises in its brochure that one of the services it provides is to arrange for such an escrow agent to prepare the closing documents.[1] With obvious concern for the strictures of Rule 3 of the Code of Professional Responsibility, the law firm proposes to send a letter to both buyer and seller in which the firm, inter alia, declares that it does not ?represent? either party to the transaction and that its role will be limited to the drafting of the necessary legal documents to complete the sale. The law firm also would request that the parties sign a form acknowledging that they have been advised of the limited role of the law firm and of their right to secure other counsel.
The central question presented to this Commission is whether the law firm?s services as ?escrow agent? under the circumstances described above would violate the Code of Professional Responsibility.
OPINION
Rule 3.4(c) forbids a lawyer from undertaking or continuing multiple representation if the exercise of his or her independent professional judgment in behalf of a client will be, or is likely to be, adversely affected by his or her representation of another client, or if it would be likely to involve the lawyer in representing different interests, ?except to the extent permitted by Rule 3.4 (d).? The latter rule permits multiple representation in otherwise prohibited circumstances only if it is ?obvious? that the attorney can adequately represent the interests of each party and if each party consents to the representation ?after full disclosure of the possible effect of such representation on the exercise of the lawyer?s independent professional judgment on behalf of each.?
The law firm in this case proposes to undertake representation of multiple clients under an arrangement that far transcends the customary understanding of the phrase ?escrow agent.? Typically, an escrow agent serves simply to hold legal documents and/or pecuniary consideration in anticipation of closing a transaction, according to clearly specified instructions. See, e.g., Eddy v. Pinder, 131 Me. 139, 159 A.727 (1932). When an attorney acts in this traditional limited manner, he or she is not called upon to exercise ?independent professional judgment? in behalf of either party, and thus such services do not contravene Rule 3.4(c).
In the present case, however, as expressly stated in the business broker?s brochure, the ?escrow agent? is described as representing both the buyer and the seller . . . ?seeing to it that closing documents are prepared according to the instructions and agreements of the buyer and seller.? The ?escrow agent? is further billed as a ?specialist? and ?an experienced practitioner (or firm) who is familiar with the legalities of transferring ownership of small businesses; one who will insure that proper legal steps are taken.?
Although the Commission considers the central issue presented in this case to be the scope of employment allowable under Rule 3.4, we must also comment briefly on the ethical problems created by the business broker?s choice of the terms ?escrow agent? and ?specialist? to describe the law firm?s functions and qualifications. Given the customary understanding of the phrase ?escrow agent,? its usage here coupled with the other representations in the brochure is potentially misleading to the consumer. Rule 3.9 prohibits a lawyer from knowingly using, assisting or participating in the use of a public communication which contains ?a false, fraudulent, misleading, or deceptive statement or claim.? Moreover, the brochure?s statement that the lawyer or law firm, albeit qua ?escrow agent,? is a ?specialist? directly contravenes the express prohibitions of Rule 3.9(b)(4) and Rule 3.8.
The underlying defect, however, in the proposed services by the law firm arises from the fundamental nature of the duties it is called upon to perform. The law firm is called upon in this case affirmatively to advise the respective parties concerning what documents they will need for closing, and to prepare the legal documents. To fulfill these legal services, the law firm must exercise independent professional judgment in behalf of both buyer and seller.
In today?s increasingly complex legal and regulatory environment, the interests of the buyer and seller of a business frequently diverge, and substantial negotiation and compromise are often necessary in the course of consummating a transaction. A few common examples serve to illustrate the point. In a business transaction, the purchase price must be allocated among real estate, personal property, good will and other categories, and the allocation carries with it differing tax consequences for the respective parties. The nature and terms of security interests and mortgages likewise bear different implications for the buyer and the seller. Compliance with the Uniform Commercial Code Bulk Transfers Act, T.11 M.R.S.A. §6‑101 et seq., is likely to be of greater concern to the buyer than the seller.
Rule 3.4(d) permits representation in circumstances otherwise violative of Rule 3.4(c), but only when two conditions are met. First, it must be ?obvious? that the attorney can adequately represent the interests of each party within the context of the multiple representation. Second, each party must consent to the representation after full disclosure. In a probable attempt to fulfill the disclosure and consent requirements, the law firm here proposes to send the clients a lengthy letter detailing the purportedly limited scope of this involvement and to obtain the written acknowledgment of the parties to the law firm?s role.[2] We need not consider in detail whether the firm?s prophylactic letter would satisfy the requirements of the rule, however, because in our view it is not at all ?obvious? that the attorney can adequately represent the interests of each party to this transaction.
Indeed, the law firm?s proposed letter to the clients only serves to highlight further the irreconcilable conflicts inherent in representing the competing interests presented by these facts. Much of the letter constitutes repeated warnings to the parties, jointly and severally, that various issues exist which the attorney knows to pose legal land mines waiting to explode with serious adverse consequences to buyer, seller, or both. The attorney concludes by noting that ?[b]ased upon information given to me and my general knowledge, I recognize that there are areas of significant legal complications and concerns.? The firm strongly advises that the parties obtain independent counsel.
According to the Reporter?s Notes to Maine Bar Rule 3.4(d):
The first condition of Rule 3.4(d) requires more than a judgment by the lawyer that he can perform adequately. It must be obvious that he can do so; and if his capability requires substantial explanation the condition cannot be met.
Cf. Opinion No. 12 of this Commission.
For the law firm in this case to advise which closing documents to prepare, and the precise terms of those documents, it must favor the interests of one party over those of the other with respect to each critical issue regarding which their interests diverge. It is certainly not ?obvious? that such can be done without compromising the interests of the parties. For these reasons, the Commission concludes that the law firm?s services as ?escrow agent? under the circumstances described herein would violate Rule 3.4(c) and (d).
THE ESCROW AGENT
As a service to buyers and sellers, your office can arrange for an escrow attorney, agent or company to prepare closing documents. This service is designed to assist both parties in the transaction. Many people have questions regarding the use of escrow. Here are a few of the most common ones.
What is an escrow agent?
He/she is an experienced practitioner (or firm) who is familiar with the legalities of transferring ownership of small businesses; one who will insure that proper legal steps are taken.
Whom does the escrow agent represent?
The agent acts on behalf of the buyer and seller, seeing to it that closing documents are prepared according to the instruction and agreements of the buyer and seller.
What is the cost of the escrow services?
Your ________ will be pleased to advise you of the cost of these services in your local community. Since the escrow agent is a specialist in this area, he/she is usually able to offer the buyer and seller a much more competitive price than a non‑specialist could.
Who pays for the escrow services?
Normally the buyer and seller share the cost of the escrow agent.
What documents are prepared?
Each transaction may have special arrangements requiring specific documents. In general, however, there are two basic types of transactions: the cash purchase and the installment sale.
In a cash purchase the escrow agent normally prepares the following documents:
1.) The Closing Statement ? This shows the sale price and the disbursement of all funds, i.e., to the seller, the broker, and any other creditors, such as banks or governmental authorities.
2.) Bulk Sales Notification ? A letter to the business creditors of the current owner, notifying them of a pending sale and the date, so that they may submit their claim for any outstanding balance owed.
3.) Bulk Sale Affidavit ? An affidavit by the seller in which he/she swears under penalty of law that there are no creditors or outstanding debts of the business to be sold.
4.) Property Schedule ? An exact and accurate list of all furniture, fixtures, equipment and other property being sold.
5.) Agreement Bill of Sale ? This contract reflects a check of public records to see that no vendor, supplier, taxing authority, or other entity has filed a claim against the business, its owners, or its equipment or fixtures. This is necessary to demonstrate that the seller has clear title to the assets to be sold.
In an installment sale, in addition to items 1 through 5 above, the escrow specialist also may prepare the following documents in which the seller finances a portion of the purchase price by taking a note from the buyer:
6.) Promissory Note ? A legal instrument whereby the buyer promises to pay the seller the balance of the sale price. It may include the following:
The total owed;
The interest rate;
The payment schedule;
Late charge (if any);
Provisions for default (non‑payment);
Seller?s remedies for default;
Right of offset; and
The buyer?s signature.
7.) Security Agreement ? A document which lists equipment, furniture, fixtures and other property of the debtor/buyer in which the seller is granted a security interest/ownership right. This secures the promissory note to the extent of the debt due. This agreement is signed by the buyer and seller.
8.) UCC (Uniform Commercial Code) Financing Statement Form ? There are two such forms; one is filed with county records, the other is filed with the Secretary of State or appropriate authority. This filing puts the world on notice that the seller has a security interest in applicable property sold to the buyer.
What other document might the escrow agent prepare?
Some transactions involve the buyer?s applying for an operating license or permit or require that monies be held in escrow. In these transactions, the escrow agent would prepare:
1.) License Transfer Application Documents ? to enable the seller?s license(s) or permit(s) to be transferred to the buyer.
2.) Escrow Agreement ? When funds are to be held in escrow until a specific condition is met (e.g., approval for a license), an agreement is prepared which specifically sets out what must be done, and under what condition the proceeds may be released and to whom.
Other documents such as lease assignments, subleasing agreements, corporate resolutions, stock pledge agreements, may also be requested of the escrow specialist.
Do I need an attorney?
While the escrow specialist will provide many of the legal documents necessary to close the sale of a business, some buyers or sellers choose to have their own attorney either prepare or review the documents.
_____ encourages you to consult your attorney to review these documents if you feel more secure by doing so.
What About the Earnest Money?
A certified check tendered as earnest money may be made payable to an independent escrow company or agent. It will be held until all contingencies are removed and all conditions of the contract are met. It is then credited as part of the purchase price payable at closing. If the conditions are not met, this check should be returned to the buyer. Since this money is ?earnest money,? it is interpreted by all involved as evidence of the buyer?s sincerity in completing the transaction. If all conditions are met by the seller, and the buyer does not complete the sale, the earnest money may be forfeited, depending on the terms of the purchase and sale agreement.
Do I have to use an escrow specialist?
No; the choice is yours. Our experience has shown, however, that the use of the escrow specialist is an effective and economical way to complete the transaction.
If you still have more questions, please feel free to ask your_____ or your personal attorney.
Footnotes
[1] The business broker?s brochure is reproduced in full at the end of this Opinion.
[2] Curiously, the law firm in its letter would disavow representation of either party, and the written consent would affirm merely that the parties have not relied upon any ?legal advice? from the firm nor in fact ?received any.? For reasons explained supra, the law firm in fact represents both parties in a professional capacity. To comply with Rule 3.4(d), if otherwise allowed, the mandatory consent would have to take precisely the opposite form, i.e., expressly to acknowledge multiple representation and ?the possible effect of such representation on the exercise of the lawyers? independent professional judgment on behalf of each.? Of course, nothing stated herein would prevent the broker from retaining its own counsel, conducting the negotiations, and instructing the attorney in document preparation.
Enduring Ethics Opinion
Opinion #105. Disclosure to Buyer of Attorney's Authorship of Broker's Purchase and Sale Agreement Form
Issued by the Professional Ethics Commission
Date Issued: May 17, 1990
Question
The Grievance Commission, pursuant to Maine Bar Rule 11(c)(1), has requested an advisory opinion regarding the following question.
Attorney X is a solo practitioner in rural Maine. His practice is concentrated in the area of real estate. From time to time he has been asked for general legal advice by a real estate brokerage firm. He also developed a form Purchase and Sale Contract which is used by that brokerage firm. However, Attorney X is only one of the several different attorneys in the area which have been employed by that firm.
Client Y wishes to purchase a parcel of real estate through the brokerage firm. The broker refers her to Attorney X who agrees to represent her in the purchase. At the time of employment, Attorney X does not tell Client Y that he has given legal advice to the brokerage firm, nor does he tell her that he developed the form Purchase and Sale Contract.
Later, when problems develop in the purchase of the property due to a disagreement about the meaning of certain terms of the Purchase and Sale Contract, Attorney X tells Client Y that he cannot represent her in any litigation because of a conflict with the brokerage firm.
Did Attorney X have a duty to disclose to Client Y that he had given some general legal advice to the real estate brokerage firm in the past and that he had developed the form of the Purchase and Sale Contract which the firm used?
Opinion
Maine Bar Rule 3.4(a) states:
Before accepting any professional employment a lawyer shall disclose to the prospective client his relationship, if any, with the adverse party; his interest, if any, in the subject matter of the employment; all the circumstances regarding his relationship to the parties; and any interest or connection with the matter at hand that a lawyer knows or reasonably should know would influence the client in the selection of a lawyer.
This rule, as the Reporter?s Notes point out, has no counterpart in the ABA Code, nor does it appear in the Model Rules. Other rules, of course, address various concerns involving potential conflicts but do not provide guidance to the question posed. For instance, Rule 3.4(e) states:
A lawyer shall not accept employment adverse to a former client without that client?s informed written consent if such new employment involves the subject matter of the former employment or may involve the use of confidential information obtained through such former employment.
However, its focus is on the expectations of a former client to loyalty and retention of confidences by the lawyer. These interests are not the concern of the question posed. The former client actually referred the new client to the attorney. Nor does Rule 3.4(f) apply because the facts as presented do not suggest that at the time of acceptance of his employment ?the exercise of the [lawyer?s] professional judgment on behalf of the [new] client . . . [might] reasonably . . . be affected? by virtue of the prior work he had performed with the real estate brokerage firm. Indeed, consistent with Rule 3.5(c)(7) the lawyer withdrew from employment when it became foreseeable that continued representation might very well have placed him in a situation precisely envisioned by Rule 3.4(f).
The focus of Rule 3.4(a) is not on the former client?s interests, nor the lawyer?s ability to carry out his duties of loyalty and independent judgment toward the new client, but rather the need of the new client to be fully informed of all connections that the lawyer might have to the subject matter so that the client can make a fully informed decision as to whether or not to employ the lawyer even if, by any objective standard, Rules 3.4(e) and 3.4(f) are fully complied with.
The Commission concludes that under the facts presented there has not been a violation of Rule 3.4(a). This rule requires four requirements to determine if appropriate disclosure has taken place. With regard to the first requirement (disclosure of the lawyer?s relationship with the adverse party) it is not at all clear that at the time of employment either the lawyer or the new client would be expected to consider the brokerage firm to be an adverse party. While the firm was clearly involved in negotiating a transaction between its principal, the seller, and the lawyer?s prospective client, the buyer, that involvement alone is insufficient to classify the broker as an adverse party.
As to the second requirement (disclosure of the lawyer?s interest in the subject matter of the employment) the fact that the lawyer in the past drew up a form contract that happens to be used by the brokerage firm in the present transaction does not establish a sufficient interest in the subject matter of the employment.[1] The fact that a form Purchase and Sale Agreement was drawn up in the past for the broker without regard to any of the principals who at a later date simply utilize the form to memorialize the terms of their agreement does not of itself constitute an interest of the lawyer in that subsequent transaction.
The Commission interprets the third requirement (disclosure of ?all circumstances regarding his relationship to the parties?) as a modification of the first requirement and means nothing more than to require disclosure of all relevant circumstances to assist the prospective client in understanding and evaluating the relationship with the ?adverse party.?
The final requirement (disclosure of ?any interest or connection with the matter at hand that a lawyer knows or reasonably should know would influence the client in the selection of a lawyer?) requires more discussion. Surely all prospective clients do not have a right or need to know in advance of employment everything about their lawyer?s relationships with every person that has become in any way involved or may become involved in a contemplated transaction. Any former client has the right, in the absence of an articulable requirement to the contrary, to expect his former lawyer to respect the privacy of his previous relationship with him. Indeed, Rules 3.4(e) and 3.6(l) demand the lawyer to respect the privacy of the prior relationship in many, if not most, circumstances. In light of these expectations, the final requirement of Rule 3.4(a) must be construed to require that the lawyer make a judgment as to what interests or connections he may have had with ?the matter at hand? that would be reasonably forseeably relevant to a prospective client in order for the latter to be satisfied that his chosen lawyer will be unreservedly loyal to his interests in the pending matter. If there is a reasonable likelihood that the interest or connection might affect the prospective client?s selection of the lawyer as his attorney, then disclosure must be made; but if such likelihood is not reasonably foreseeable, disclosure is not required. Recognizing that this is a ?facts and circumstances? judgment which cannot be abstractly decided for all cases, the Commission is satisfied in this case that neither the lawyer?s connection (if indeed it can be called a connection at all) with the subject matter nor the fact he may have provided occasional advice to the broker on unrelated matters are of such significance that he should have known at the time of employment they would influence the prospective client?s selection of him as her lawyer. Indeed, ironically, it could be argued that disclosing this tenuous relationship to the client would likely influence her in precisely the opposite direction from which the Rule contemplates?as an attraction rather than deterrent to representation.
Rule 3.4(a), as the Reporter?s Notes suggest, reinforces an important consideration before a client and lawyer enter into an employment relationship. Not only must the lawyer be aware of a potentially adverse (current or former) client?s expectations (Rule 3.4(b) and 3.4(e)), and any self interest that will interfere with his ability to act loyally on behalf of the prospective client (Rule 3.4(f)). Under Rule 3.4(a) he also has a duty to advise the prospective client of these matters so that in situations where reasonable people might differ as to the significance of the prior relationship or self interest it is the client, not the lawyer, that makes the final judgment in the matter.
While the Rule has the laudatory purpose of requiring that potential conflict situations be analyzed from the point of view of the prospective client, a consideration present only by implication in the ABA code and most other State disciplinary codes, its broad language, notwithstanding the Reporter?s Notes, must be tempered with reason and common sense. The underlying purpose is to provide the prospective client with information that might reasonably be considered relevant at the time of hire in helping her determine whether her lawyer will be able to offer her undivided loyalty. It does not require the lawyer to engage in a tedious, lengthy and necessarily incomplete description of all his contacts with everyone that would have any relationship whatever now or in the future to the transaction. A prospective client has neither the time, stamina nor need to be subjected to such a narration. She needs information that is reasonably likely to influence her selection of the attorney. There must be a sensitive determination of what facts are relevant from the prospective client?s point of view. The Commission concludes that the mere fact the lawyer at one time drew up a form for the broker that he later uses in negotiating an agreement between a prospective buyer and a seller, or the fact he may have occasionally provided services for the broker in unrelated matters, are not such relevant information that requires disclosure.
Footnote
[1] It is unclear from the facts whether or not the agreement was executed prior to Client Y employing Lawyer X. The Commission assumes it had been executed prior to employment. If the form were simply presented for possible use by the client and her lawyer in drafting an agreement, the concerns raised by this question become extremely remote.
Enduring Ethics Opinion
Opinion #104. Suit by Lawyer Member of Board of Overseers Against Attorney Who Is the Subject of a Grievance
Issued by the Professional Ethics Commission
Date Issued: February 7, 1990
Question
The Board of Overseers of the Bar has requested an advisory opinion in response to the following question:
May a lawyer member of the Board of Overseers of the Bar or that member?s firm accept or continue with employment on behalf of a party who wishes to initiate legal action against a lawyer who is under disciplinary investigation or is subject to disciplinary proceedings before the Grievance Commission?
Opinion
The Commission is of the opinion that the Code of Professional Responsibility, Maine Bar Rule 3, would not be violated by the lawyer or his firm?s acceptance of the employment at issue, provided the lawyer, in his capacity as a member of the Board of Overseers, (1) is not privy to confidential information respecting the person who is subject to disciplinary proceedings and (2) disqualifies and removes him/herself from any involvement with the disciplinary proceedings involved.
Absent compliance with these two provisos, the Commission is of the opinion that under the circumstances presented, the lawyer?s dual capacity, as a member of the Board of Overseers and as counsel for the litigant in question would tend to compromise public confidence in the integrity and impartiality of the Board of Overseers and that the administration of justice would thereby be prejudiced. See Maine Bar Rule 3.2(f)(4) (prohibiting conduct prejudicial to the administration of justice). Accordingly, the Commission concludes that the lawyer or his firm may undertake the employment in question only if the lawyer satisfies the two provisos set forth above. In this manner the Commission believes that the integrity of the Board will be protected without unduly discouraging lawyers from accepting appointment to the Board.
Enduring Ethics Opinion
Opinion #69. Agreement of Public Interest Litigation Organization to Receive Percentage of Court-Awarded Attorney's Fees on Referred Cases
Issued by the Professional Ethics Commission
Date Issued: March 14, 1986
Question
A Public Interest Litigation Organization (?PILO?) wishes to enter into an agreement with an attorney to handle a case in which the PILO is interested under which a percentage of the attorney?s fees which may be awarded by the court to be paid by the adversary party would be paid to a foundation affiliated with the PILO. This foundation ?is to direct its principal efforts toward initiating and supporting the educational and litigative activities of the PILO which can be funded with tax deductible contributions.? The attorney questions whether this arrangement is permitted by the Code of Professional Responsibility.
Opinion
Bar Rule 3.3(e) states that with three exceptions ?A lawyer or law firm shall not share legal fees with a non‑lawyer.? The three exceptions involve (1) payments upon a lawyer?s death by his firm or associates to his estate or named beneficiaries, (2) payment for unfinished legal business of a deceased lawyer, and (3) retirement or compensation plans to employees of a lawyer or law firm based upon profit‑sharing arrangements. The exceptions to the general prohibition are very narrow and are not applicable to this matter.
Neither the PILO nor its foundation, despite their interest in, and concern for, law related matters, are lawyers or a law firm. The PILO is not licensed to practice law in the State of Maine and is not subject to the Code of Professional Responsibility. An informal opinion of the American Bar Association dealing with arrangements between lawyers and so‑called legal support or consultation organizations has held that participation with, or engagement of, such organizations may be permissible if the lawyer ?maintains a direct relationship with his client, supervises the delegated work, and has complete professional responsibility for the work product.? See ABA Code of Professional Responsibility, E.C. 3‑6. However, the inquiring attorney was cautioned that compensation of the consultant organization must be computed ?without regard to the legal fees collected by the attorneys requesting this service. . . . (A) contingent fee agreement between attorney and his non‑lawyer employees is forbidden . . . Formal Opinion 297 states that an accountant employee of a law firm must be `paid a regular salary computed without regard to fees collected for legal services rendered to particular clients?.?[1]
Clearly the arrangement described in the present inquiry falls outside the bounds of permissible fee arrangements contemplated by the above ABA opinions. The prohibition of Rule 3.3(e) is unambiguous and does not permit the fee arrangement contemplated as it would involve splitting legal fees with a non‑lawyer.[2]
Concurring Opinion
One member of the Commission believes the following comments should be added to the opinion.
Adopting an assumption encouraged by the form of the question and perhaps required by the proposed agreement, the opinion treats a court‑awarded attorney?s fee as entirely subject to the attorney?s disposition. Given this assumption, the result can only be that division of the fee is barred by Rule 3.3(e). By thus limiting the question and answer, however, we risk misleading the bar, since a court‑awarded attorney?s fee is not necessarily subject to the attorney?s control until it is actually paid over unconditionally to the attorney.
In the first place, the right to a court‑awarded attorney?s fee usually belongs, not to the attorney, but to the client. Such an award is nearly always based on explicit statutory authority, such as 42 U.S.C.A. § 1988 or 5 M.R.S.A. §213. Generally those statutes authorize an award of attorney?s fees to the party litigant, not to the attorney who represents that litigant. International Travel Arrangers, Inc. v. Western Airlines, Inc., 623 F.2d 1255 (8th Cir. 1980). Hence the courts have held that the existence of a private fee agreement with the attorney is irrelevant to an award of attorney?s fees, both in cases in which the private agreement provides for payment of a sum greater than that awarded by the court, Sargent v. Sharp, 579 F.2d 645 (First Cir. 1978), and when the private agreement, such as it was, did not provide for payment of any attorney?s fee. The latter includes the many cases in which courts have held that attorney?s fees may be awarded despite representation of the plaintiff by a legal services organization or by some other entity devoted to providing free legal services. In many of those cases the opinions refer to the award as if it were an award to the attorney, but when the question has been presented it is clear that in reality the recipient is the client.
Since the award goes to the client, absent directions from the court, the client may decide how it is to be distributed. It may be paid to his attorney, or it may be kept by the client, as a reimbursement for fees already paid or otherwise. It seems clear that Rule 3.3(e) cannot prohibit an agreement for division of a fee award between client and PILO. An attorney who accepts employment subject to that agreement has not agreed to divide an attorney?s fee within the meaning of Rule 3.3(e). He simply accepts the client?s distribution of the judgment that may be recovered. Whether or not the public interest litigation organization provides any services for the attorney or for the client should not matter. The amount the defendant is required to pay as an allowance for costs and attorney?s fees will have been determined by the court?after hearing?on the basis of such criteria as the court deems applicable; consequently, it is hard to see how the size of the attorney?s fee could later be questioned.
In the second place, disposition of an allowance for attorney?s fees is subject to the control of the Court. For example, in Carmel v. Hillsdale, 428 A.2d 548 (N.J. App. 1981), the court seems to have determined that the fee allowance would be paid to the American Civil Liberties Union, which would control subsequent distribution to cooperating attorneys and to itself. In Sargent v. Sharp, 579 F.2d 645 (First Cir. 1978), the court noted that the trial judge could restrict the application of any fee award paid by the defendant to reimbursement for amounts the plaintiff might already have paid to counsel, citing an earlier opinion in Farmington Dowel Products v. Foster Manufacturing Co., 421 F.2d 61 (First Cir. 1970).
The converse situation seems to have occurred in Miller v. Amusement Enterprises, Inc., 426 F.2d 534 (Fifth Cir. 1970), in which the Court of Appeals observed that the District Court could use its general equitable powers to insure that an award of attorney?s fees actually reached the attorney and was not retained by the plaintiffs. If the court ordering an award decides that the allowance is to be divided between attorney and PILO, Rule 3.3(e) cannot be implicated. The PILO might present such a request pro se or through separate counsel, or the attorney may simply have agreed to disclose to any such court the terms of a cooperating attorney agreement to provide services pro bono, with the court to decide on the consequences.
Footnotes
[1] The facts do not indicate what, if any, services the PILO performs for the attorney in the matter. If none were performed then additional issues such as charging an excessive fee would be of concern. (Back)
[2] The Commission is aware that there may be instances where, pursuant to applicable Federal law, a court has awarded attorney?s fees directly to PILO?s. Those decisions are not relevant to the issue presented. Construction of federal statutes is beyond the jurisdiction of this Commission. However, the fact that a court may determine it can award "fees" to a PILO in a civil rights case has no relevance to whether an attorney and PILO can agree to split legal fees awarded to the attorney by a court.
Enduring Ethics Opinion
Opinion #70. Representation of Criminal Respondent by Spouse of Assistant District Attorney
Issued by the Professional Ethics Commission
Date Issued: May 7, 1986
Question
An attorney who proposes to handle criminal defense cases has requested an advisory opinion on the following question: May a criminal defense counsel, whose spouse is a member of the District Attorney?s Office, defend matters handled by the District Attorney?s Office, as long as the spouse is not involved in any way with the prosecution, and the attorney?s client consents to the arrangement? That is, in such a situation, is the consent of the District Attorney required?
Opinion
Rules 3.4(a), 3.4(b) and 3.4(f) of the Bar Rules are directly applicable to this inquiry:
(a) Disclosure of Interest. Before accepting any professional employment a lawyer shall disclose to the prospective client his relationship, if any, with the adverse party; his interest, if any, in the subject matter of the employment; all the circumstances regarding his relationship to the parties; and any interest or connection with the matter at hand that a lawyer knows or reasonably should know would influence the client in the selection of a lawyer.
(b) Conflict of Interest. A lawyer shall not accept employment if the exercise of his independent professional judgment in behalf of a client will be, or is likely to be, adversely affected by the acceptance of such employment, or if it would be likely to involve him in representing differing interests, except to the extent such employment is permitted by subdivision (d) of this rule.
(c) Interest of Lawyer. Except with the informed written consent of the client after full disclosure, a lawyer shall not accept employment if the exercise of his professional judgment on behalf of the client will be, or reasonably may be, affected by any interest of the lawyer.
It is obvious that these rules govern the relationship between the defense attorney and his prospective client. None of these rules requires consent from the opposing party. Thus, on the facts given, assuming full and accurate disclosure and informed written consent by the client, the defense attorney may accept the case regardless of whether the District Attorney consents.
This situation is somewhat the reverse of the facts discussed in the Grievance Commission?s Advisory Opinion No. 42, issued in 1983. The holding in that opinion was that the involvement of an Assistant District Attorney in a prosecution which was defended by a member of her husband?s law firm required consent from the District Attorney or the Attorney General. For the purpose of deciding the Assistant District Attorney?s ethical duties her ?client? is the State. Opinion No. 42 concluded that the consent of this client was needed under 3.4(f), but that either the District Attorney or Attorney General was competent to grant this consent on behalf of the State. That conclusion, however, has little bearing on the ethical duties of defense counsel in the present situation since he has a different client to whom he is responsible.
Enduring Ethics Opinion
Opinion #71. Law Firm Offering Divorce Mediation Services
Issued by the Professional Ethics Commission
Date Issued: May 7, 1986
Question
The Commission has been asked whether a law firm may offer and advertise the service of consulting with both parties to a divorce proceeding, reviewing their case in depth, and preparing a proposed divorce settlement agreement. The inquiring firm has submitted a draft advertisement describing the service. In it the parties are told that the firm cannot act as attorneys for either party but will work with attorneys for the parties throughout the settlement process. The parties are also told that they will be urged to review any proposed settlement agreement with their attorneys. It is made clear that in requesting the service the parties are not agreeing to accept the results.
Opinion
- The Proposed Mediation Service.
The proposed service would not violate the Bar Rules if undertaken on the basis suggested by the advertisement and if certain additional precautions are observed. The inquiring firm proposes to offer, in effect, a private divorce mediation service. If neither party is or has been a client, or becomes a client during the mediation process, the conflict of interest rules will not be involved. Nothing in the other bar rules suggests that there would be any impropriety in offering two potentially contending parties the service of recommending a settlement.
It must, however, be clear that the firm is not representing either one of the parties and is not using confidences imparted by one against the other or allowing its judgment on the recommended settlement to be affected by a confidence previously imparted to it. This critical factor could become confused if, for example, the firm previously represented one or both of the parties. In that case, for purposes of Bar Rule 3.4(e) we conclude that the position of a mediator would be employment ?adverse? to the party who is a former client and would be employment ?adverse? to both if both parties are former clients of the firm. Accordingly, if the firm represented either the family or one of the parties before the decision to seek a divorce, compliance with Rule 3.4(e) would appear to be required in almost all cases, and the firm must be sure that the consent of both parties is fully informed. Since a divorce touches potentially all interests of the parties, when one or both of them has been represented by the firm in other matters, we think it would be an extremely rare case in which such representation could continue during mediation, even on matters not apparently connected to the divorce, without risking violation of Rule 3.4(c).
A lawyer serving as a mediator between clients was expressly approved by EC 5‑20 of the former ABA Code of Professional Responsibility, which provided:
EC 5‑20. A lawyer is often asked to serve as an impartial arbitrator or mediator in matters which involve present or former clients. He may serve in either capacity if he first discloses such present or former relationships. After a lawyer has undertaken to act as an impartial arbitrator or mediator, he should not thereafter represent in the dispute any of the parties involved.
Rule 2.2 of the present Model Rules of Professional Conduct contains a somewhat more detailed prescription for mediating between clients and is stated to be inapplicable to mediation unless clients are involved. In general, however, both EC 5‑20 and Rule 2.2 confirm the warnings expressed above.
- The Proposed Advertisement[1]
Although the Commission does not wish to discourage experiments in private dispute resolution, it has concluded that a few statements in the advertisement should be amended or qualified to insure that no misleading impressions are created. Bar Rule 3.9 cautions broadly against statements that are ?likely to cause? misunderstanding, statements that are ?likely to create an unjustified expectation,? and statements that are misleading in all the circumstances through material omissions. The standard thus set requires a careful and strictly objective choice of advertising language. In a few respects the draft advertisement submitted for purposes of this opinion falls somewhat short.
First, the ad begins by saying ?divorce too often is a needlessly painful and expensive process leading to contested hearings in 20% of most divorce cases filed. Out of this we are providing a new and unique service.? (emphasis in original) Leaving aside the ambiguity of ?20% of most,? the phrase ?new and unique? falls somewhat short of accuracy as a description of a private version of the existing court mediation service. Second, the ad notes that court mediation is ?mandatory? only if there are minor children and no agreement. The implication to the inexperienced or casual reader is that it is unavailable in other cases. That is not a correct statement of the mediation statute, which does not so restrict the use of court mediators.
Third, the advertisement contains a parenthetical reference to the firm?s ?considerable legal experience? as ?over 41 lawyer years, 15 in family law.? This statement relies on the combined experience of lawyers in the firm. It can read, however, as suggesting either that the firm itself has been in existence 41 years, or that one of the members has that length of experience, and in either case could confuse a reader. It is hard to see what useful information the statement communicates, since it would describe with equal accuracy a firm of 41 lawyers, each of whom had one year of experience.
Fourth, the advertisement states ?we will work with both spouses, something your divorce lawyer is not allowed to do.? This is not a complete statement of the Bar Rules involved. The attorney for one party may work directly with an unrepresented opponent and may work with a party who is represented through that party?s attorney. In either case, settlement negotiations would be not only allowed but expected. Of course an attorney must be careful to comply with Bar Rule 3.6(m) ?Avoiding Misreliance,? but the implication in the advertisement that a divorce lawyer is somehow disabled from working with the other party to achieve a mutually acceptable result could tend to mislead the reader.
Subject to the precautions noted above and appropriate modification of the advertisement, the proposed service and advertisement do not, in our opinion, violate any of the Bar Rules.
AD
Divorce Settlement Service
________________________ & _______________________, P. A.
Attorneys at Law
Our experience as lawyers reveals divorce too often is a needlessly painful and expensive process leading to contested hearings in 20% of most divorce cases filed. Out of this we are providing a new and unique service we hope will lessen the pain and expense and prove useful to both spouses.
If you are considering a divorce, we will meet with you and your spouse and review your case in depth after which we will present you with a written,
Divorce Settlement Agreement
which is the product of our consultation, our considerable legal experience (over 41 lawyer years, 15 in family law), our recent experience with the court mediation service, which is only mandatory if there are minor children and no agreement, and our opinion of a fair arrangement for both of you.
We cannot act as your lawyers in the divorce, but will work with your lawyers throughout the settlement process. The difference is we will work with both spouses, something your divorce lawyer is not allowed to do. Our goal is to insure there are two winners, not just one.
Of course, you will each be urged to take the opportunity to review any proposed settlement agreement with your attorney(s) for advice. If agreed, the agreement would become the basis for a future court divorce decree. If agreement cannot be reached, you will be referred to your lawyers for litigation.
Please make an appointment to discuss this service with us by calling our local office. There is no charge or obligation for the time to discuss this new and unique service with you. After you decide to proceed, fees will be set with you at a rate you can afford.
(name of law firm, address, and telephone number)
Footnote
[1] A copy of the proposed advertisement is attached to this opinion as Exhibit A.
Enduring Ethics Opinion
Opinion #72. Refusal of Insured to Cooperate in Defense of Wife's Claim
Issued by the Professional Ethics Commission
Date Issued: August 6, 1986
This opinion concerns the ethical responsibilities of a lawyer retained by a liability insurance carrier to defend its insured, the husband of the plaintiff, in an action in which the plaintiff alleges that she sustained injuries as a passenger in an automobile accident caused by the negligence of her husband, the driver of the automobile. The lawyer believes that the wife?s claim may be unfounded because the accident occurred under extreme weather and hazardous driving conditions that could prevent the wife from establishing negligence on the part of her husband.
The situation is further complicated because, in the lawyer?s view, it could be determined that the wife?s injuries were work‑related, in which case the immunity provisions of the Workers? Compensation Act might bar the wife?s civil action. The husband and wife are both employed by the same company, as a managing officer and administrative employee, respectively, and the accident occurred while they were leaving a business meeting attended by other people in that company?s industry.
The husband?s liability policy limits exceed any conceivable verdict for the wife, and the husband has told the lawyer retained by the carrier that the wife?s claims should be paid despite any defenses based on the Workers? Compensation Act, absence of negligence or otherwise.
In Opinion No. 63, the Professional Ethics Commission concluded that a lawyer retained by an insurance carrier to represent its insured represents only the insured and not the carrier. Accordingly, the husband is entitled to be considered the client of that lawyer for all purposes, and the lawyer has the duty to treat the insured with the full measure of care accorded to all client relationships, including the duty to protect confidential communications with the insured.
Accordingly, the question presented by the situation described to the Commission is whether an attorney is bound to honor the client?s choice of desired result and strategy under these circumstances. Absent an insurer, the client would plainly be within his rights in deciding not to defend a claim. With an insurer in the picture, it is also plainly within the client?s rights to insist that his attorney refuse cooperation with the insurer, whatever effect that decision may have on coverage both for the ultimate liability and for the defense costs. The client may also require his attorney to design and carry out a strategy to refuse cooperation while asserting every honest justification for refusal offered by the policy and the law. But the client may not require the attorney?regardless of the eventual source of his compensation?to create the appearance of cooperation, so as to avoid jeopardizing coverage, while in fact, working to produce an unsuccessful defense and a recovery for the wife. Nor may the client require the attorney to bill the insurer for legal services which are inconsistent with the company?s legitimate expectations under the policy.
The reason is that such conduct would amount to a fraud on the insurer. The lawyer is forbidden by Bar Rule 3.2(f)(3) from engaging in fraudulent conduct himself. If he discovers that his client is committing a fraud, Rule 3.6(c) requires him to disclose the fraud unless the information is privileged, probably not the case here with respect to the critical information as to circumstances of the accident. Rule 3.5(b) requires withdrawal from representation if the lawyer knows that continued employment would result in violation of the Bar Rules, and Rule 3.5(c) permits withdrawal if continued employment would be likely to result in violation of the rules or the client seeks to pursue an illegal course of conduct.
If the client, the defendant‑insured and not the insurer, is asking the attorney to create an appearance of cooperation while suppressing, or perhaps just ignoring, facts that would establish a defense, the lawyer should call upon the client to amend his instructions, and if he refuses, should ask for leave to withdraw from the case.
Enduring Ethics Opinion
Opinion #73. Partner of City Councilor Litigating with the City
Issued by the Professional Ethics Commission
Date Issued: August 6, 1986
Question
A lawyer has been elected as a city councilor of a city with a so‑called Mayor/Council form of government. Under the city charter, the council exercises legislative power, including the power of approval of the overall budgets for the various departments of city government; but the council, as well as its individual members, are prohibited, on pain of punishment and loss of office, from interfering with the executive functions of the city, including the discipline and establishment of compensation of individual city employees, exclusive authority for which is vested in the mayor. The lawyer/councilor asks whether he (or the partners or associates of his firm)[1] may (1) represent private litigants against the city, whether as plaintiff or defendant, and (2) represent persons charged with criminal offenses in cases where a city employee, namely, a member of the city police force, may be a witness.
Opinion
For the reasons which follow, the Commission is of the view that lawyer/councilor (and his partners and associates) may not litigate against the city, but he may, under the particular constitutional structure of the city in question, defend criminal cases in which city employees may be witnesses.
These questions have been the subject of a substantial number of opinions of professional ethics authorities both in other jurisdictions and in Maine. Most notably, the Grievance Commission of the Maine Board of Bar Overseers has issued two recent opinions of considerable relevance to the current inquiry.[2] In 1982, that Commission ruled that a lawyer serving as a County Commissioner could not represent a defendant in a criminal prosecution in which a member of the county sheriff?s office, over which the Board of County Commissioners exercised substantial budgetary authority, might be a witness. Opinion No. 29 (February 4, 1982). In 1983, the Commission further determined that a lawyer serving as a city councilor similarly could not represent a criminal defendant when a member of the city police force might be a witness, since the city council in question had authority over the establishment of individual salaries of the police force. The Commission also determined that the lawyer/councilor cannot represent private litigants or municipal employees? labor unions against the city even when the lawyer/councilor would play no official role in the resolution of the litigation. It did, however, indicate that the lawyer/councilor might be able to represent a worker?s compensation claimant against the city. Opinion No. 45 (November 22, 1983) (Questions 1, 5, 6 and 7).
In reaching these conclusions, the Grievance Commission relied generally on Maine Bar Rules 3.4(b) and 3.4(c), concerning the acceptance of employment by a lawyer when his ?independent professional judgment? is likely to be affected by other interests of his own or of his other clients. See Opinion No. 29; Opinion No. 45 (Questions 1 and 5). The Commission recognized that the public body in question is not really a ?client? of the lawyer/councilor, but reasoned that the relationship between them is sufficiently analogous to warrant the invocation of the conflict rules, citing Opinion of the Justices, 330 A.2d 912 (Me. 1975) as to the nature of the duties of a public officer to the public. See Opinion No. 29. It also indicated that the resolution of the questions does not turn on whether the lawyer actually attempts to use his position as a councillor to influence the course of litigation, but on the mere fact of his holding both positions, citing Rule 3.2(f)(4), which prohibits ?conduct that is prejudicial to the administration of justice.? Opinion No. 45 (Questions 6 and 7).
With these principles in mind, we proceed to answer the precise questions posed.
I. Representation of Private Litigants by Lawyer/Councilor Against the City.
As indicated above, the Grievance Commission, in Question 6 of Opinion No. 45, determined that a lawyer, or his partners or associates, may not engage in litigation against the city of which he is a councillor,[3] basing its opinion on an earlier opinion of the Maine Bar Association. Maine Bar Association Opinion No. 8 (1971).[4] The Commission also considered whether the problem could be cured if the lawyer were to take no part in any council deliberations concerning the litigation. It concluded, however, that such non‑participation would not alter its conclusion since (1) the lawyer would still be responsible for establishing the salaries and tenure of city employees with whom he would be dealing in the litigation; (2) the lawyer would still be able to provide his private client with inside information about attitudes of various city officials concerning the progress of the litigation; and (3) even if such information were not actually provided, the appearances would be such as to prejudice ?the administration of justice? in the eyes of the public, in violation of Rule 3.2(f)(4).
These conclusions find widespread support among the determinations of other professional ethics authorities of which we are aware. In addition to the rulings relied on by the Grievance Commission, see note 4, supra, similar results have been reached in Arizona, California, Indiana, Michigan, and Texas.[5] In general, these jurisdictions have found that the conduct of litigation by a city councilor against his city is improper, even if the lawyer takes no part in any discussions with the council or other city officials concerning the case, for the reasons that the potential for the lawyer to have an unfair advantage in the litigation and for the litigation to have an effect on the lawyer?s conduct of other official business is too great, and the appearance of impropriety is too pronounced.
For these reasons, we do not think that, for purposes of this question, it makes much difference whether the structure of the city government in question would prevent the lawyer/councilor from having any actual power directly to affect the course of the litigation. Nor would it matter that he may not have any direct involvement with setting the tenure or salaries of the city officials with whom he may be dealing in the litigation. The fact remains that the city itself is the adversary. It would be difficult to conceive of how the lawyer, or his partners or associates, could conduct himself in the litigation without making some use of his position to his client?s advantage, or that he would be able entirely to insulate the conduct of his public responsibilities from any effect of the litigation. Beyond this, of course, the question of the appearance which such a circumstance would generate cannot be ignored by anybody charged with protecting the public perception of the legal profession. Accordingly, we adhere to the conclusion of the Grievance Commission in Opinion No. 45 that a lawyer, or his partners or associates, may not litigate against a city of which he is a councillor.[6]
II. Representation of Criminal Defendant by Lawyer/Councilor When City Police Officer May Be a Witness.
As indicated above, the Grievance Commission, in Opinion No. 29, determined that a lawyer who was also a County Commissioner could not represent a criminal defendant in a case in which a member of the county sheriff?s office was likely to be a witness because of the control exercised by the Board of County Commissioners over the discipline and remuneration of individual deputy sheriffs. The Commission adhered to this decision in Question 1 of Opinion No. 45 in the context of a lawyer/councilor defending a criminal defendant when a city police officer whose salary is set by the city council might be a witness. As indicated by the Commission, this result is supported by at least two other professional ethics authorities. Arizona Ethics Opinion No. 75‑8 (1975); Florida Ethics Opinion No. 71‑12 (1971). See also California Informal Ethics Opinion No. 1975‑4; Texas Ethics Opinion No. 382 (1975).
The problem presented by this inquiry is whether it makes any difference to this result if, under the structure of the city government in question, a councillor has no control over the discipline or compensation of individual city policemen. As indicated above, the inquiring lawyer/councilor here is prohibited by law, on pain of criminal punishment and loss of office, from disciplining or fixing the remuneration of any city employee, including the police.[7] That function is assigned by the city charter exclusively to the mayor. Thus, the question arises whether Rule 3.4 could possibly be violated in this situation since any attempt by the lawyer/councilor to use his position to affect the testimony of the police officer would subject him to severe sanctions.
We note first that such other authorities as have considered this question appear to conclude unanimously that the lawyer may represent the criminal defendant. While the general rule remains valid that a lawyer who is in a position to affect a policeman?s status or salary should not place himself in the position where he might be obliged to challenge that officer?s veracity, the rule does not apply when the only relation between the lawyer/councilor and the police force is a requirement that the city council approve the police department?s overall budget. Thus, in North Carolina it was determined that a lawyer/councilor may represent criminal defendants against state prosecution when a city policeman is to testify, provided that the board or commission on which he serves is not directly involved in the hiring, firing and setting of salaries of individual police officers. Compare North Carolina Ethics Opinion No. CPR‑252 (1979) with North Carolina Ethics Opinion No. CPR‑189 (1978) (councilor may not represent criminal defendant against city policemen even when council has no authority over discipline or individual salaries because council must approve the police chief).[8] And in Massachusetts, it was ruled that a lawyer/councilor may defend such a case so long as the council has no influence over the police department. Massachusetts Ethics Opinion No. 78‑14 (1978). Indeed, the Chicago Bar Association appears to have gone even further and sanctioned the representation of such defendants by a lawyer/alderman so long as the lawyer simply did not ?use? his position to influence, or create the impression that he was influencing, the officer?s testimony, a result inconsistent with the Grievance Commission?s determination that ethical questions of this kind cannot turn on the actual behavior of the lawyer in the conduct of the litigation. Chicago Ethics Opinion No. 75‑26 (1975).
We are persuaded that these authorities are correct. Therefore, so long as the city council on which the lawyer serves does not, as a matter of law, have any influence over the hiring or firing of the personnel of the police force, or the amount of their individual compensation, but is limited instead simply to approving the department?s overall budget, the lawyer may represent a criminal defendant in a case where a city policeman may be a witness. We do not regard this conclusion as inconsistent with that reached in the first part of this inquiry. There, it will be remembered, the party to the litigation in which the lawyer/councilor proposes to be involved is the city itself. Thus, the potential for abuse of the lawyer?s public office is great. Here, the prosecutor is not the city,[9] it is the State, over whom the lawyer/councilor has no influence. The potential for abuse is thus greatly reduced, and no impropriety likely to result if the lawyer/councilor cannot retaliate in any way against the testifying policeman.
Footnotes
[1] Through the operation of Maine Bar Rule 3.4(k), the disqualification of a lawyer from the acceptance of employment for any reason under the Maine Bar Rules requires the disqualification of his partners or associates.
[2] At the time of the promulgation of the Maine Bar Rules, November 1, 1978, the Grievance Commission was entrusted with the responsibility both of resolving disputes as to the past behavior of lawyers and of rendering advice as to their future conduct. On February 15, 1985, this latter function was transferred to the newly established Professional Ethics Commission. The determinations of the Grievance Commission prior to 1985 are therefore precedent for Ethics Commission advisory opinions.
[3] Actually, the Opinion indicates only that the lawyer, his partners or associates may not initiate legal action against the city. However, there would not appear to be any meaningful distinction, for purposes of Rule 3.2(d)(2), between whether the lawyer is representing a plaintiff or a defendant against the city. See Maryland Ethics Opinion 80‑60 (1980) (law firm obliged to withdraw from representing defendant in litigation with county when member of firm is a county councillor).
[4] This opinion in turn relies on the opinions of three other professional ethics authorities in the city of Cleveland, Ohio and the states of Washington and Wisconsin. Cleveland Ethics Opinion 1‑A (1950); Washington Ethics Opinion No. 79 (1960), revised on other grounds, Ethics Opinion No. 167 (1979); Wisconsin Ethics Opinion No. 2 (1954).
[5] Arizona Ethics Opinion No. 82‑14 (1982); California Ethics Opinions Nos. 1977‑46 and 1981‑63; Indiana Ethics Opinion No. 1980‑2; Michigan Ethics Opinion No. 132 (1950); Texas Ethics Opinion No. 382 (1975).
[6] In reaching this conclusion, we are not unmindful of the fact that in 1984, the Supreme Judicial Court declined to adopt an amendment to the Maine Bar Rules which would have had the effect, among other things, of prohibiting expressly the representation of a private client by a lawyer against a city of which he is a councilor. See proposed Rule 3.4(m)(2)(A), a copy of which is attached to this Opinion. We do not think, however, that the failure of the Court to adopt this rule means that existing rules cannot be interpreted to reach the same result, particularly when it is remembered that, as indicated above, other authorities have so interpreted similar versions of the same rule.
[7] We assume that the city council has no power to affect the tenure or compensation of members of the police force by indirect means as well, such as by abolishing the positions of individual officers. We are also aware that the council might be able to exert influence on an individual policeman by refusing to defend him in any civil action which might be brought against him in his official capacity, but consider that danger too remote for consideration.
[8] It is important to note that these determinations do not hinge on whether the councilor proposes to recuse himself from council deliberations on police matters, since such recusal is not legally binding and can, therefore, be ignored in the future. See North Carolina Ethics Opinion No. CPR‑233 (1979).
[9] If it were the city‑prosecuting to enforce one of its ordinances‑the result would be different. See Michigan Ethics Opinion No. 132 (1950) and Los Angeles Ethics Opinion No. 273, the latter cited with approval in Maine Bar Association Opinion No. 8.
Enduring Ethics Opinion
Opinion #74. Disposal of Client Files
Issued by the Professional Ethics Commission
Date Issued: October 1, 1986
Law Firm X does not wish to retain custody of its closed client files on matters for which it is no longer providing services. Can it return these files to the client absent such a request from the client? If the client refuses to take custody of the files, may the firm dispose of them? May the firm in the latter case assess the client for the cost of the storage of the files if it elects to retain the files to protect the client or the firm from future litigation?
Opinion
Before addressing each question raised, there are two rules in the Code of Professional Responsibility that provide general principles that have some application to the questions raised. Rule 3.5(a)(2) states:
A lawyer shall not withdraw from employment until he has taken reasonable steps to avoid foreseeable prejudice to the rights of his client, including giving due notice to his client, allowing time for employment of other counsel, delivering to the client all papers and property to which the client is entitled, and complying with applicable laws and rules.
Rule 3.6(f)(2) states:
A lawyer shall:
(i) Promptly notify a client of the receipt of his funds, securities, or other properties;
(ii) Identify and label securities and properties of a client promptly upon receipt and place them in a safe‑deposit box or other place of safekeeping as soon as practicable;
(iii) Maintain complete records of all funds, securities and other properties of a client coming into possession of the lawyer and render prompt and appropriate accounts to his client regarding them; and
(iv) Promptly pay or deliver to the client, as requested by the client, the funds, securities, or other properties in the possession of the lawyer which the client is entitled to receive.
From the above Rules several general conclusions can be made that have some application to the questions raised. First, a lawyer?s duty to safeguard a client?s property in his possession does not cease merely because his representation ends. Secondly, a client file containing any information of value to the client should not be destroyed without the client having been given timely advance notice and full and ample opportunity to take custody of it. Thirdly, no general rule can be made as to when it is safe to destroy a client file.[1] For example, a file should not be destroyed if the lawyer knows or has reason to know that the information may be necessary or useful to the client in a matter in which the applicable statute of limitations has not run. Finally, it must be recognized, on the other hand, that increasing the lawyer?s overhead expense by requiring him to indefinitely store all client files even if they contain no useful information serves no useful purpose for the client or the public.
With these general principles in mind, the Commission answers the specific questions raised by the inquiry as follows: The firm may return the file to the client absent a request from the client as long as in so doing it is satisfied that the client in fact will receive it under circumstances in which he is able to take reasonable measures to secure it and dispose of it responsibly. For instance, the attorney cannot simply deliver possession of a file to a client who is incapable of understanding or appreciating the importance of making an appropriate decision as to its disposal. There must also be no reasonable expectation on the part of the client that the firm would retain custody of the file for a period longer than the time it seeks to dispose of it.
If the firm cannot release custody of the file due to the existence of one of the above conditions, the firm can destroy it only if it determines there is no reasonable likelihood that the file contains valuable and useful information, not otherwise readily available to the client, that the firm knows or has reason to know would be useful to that client in a future matter. The firm should be particularly careful not to destroy original documents if there is any reasonable possibility that they may be needed in the future.
If the firm determines it can neither surrender custody of nor destroy the file for any of the reasons cited above, and if there has been no prior agreement with the client with respect to a charge for the cost of storage and the client had a reasonable expectation that the firm would retain custody of the file as part of its legal services, the firm may not assess a fee for storage without the client?s consent even if it determines it is doing so to protect the client from future litigation. Under no circumstances may it assess a fee without the client?s prior consent when the purpose of the storage is solely to protect the firm from future litigation.
Footnote
[1] The lawyer?s own interests may be served by retaining a client file beyond the six year limitation period when there is any reason to suspect that a client grievance may be brought concerning the subject matter which the file contains. The Supreme Court has impliedly held that no statute of limitations applies to client grievances. See Supreme Court order of April 11, 1979, 396 A.2d at p. LV.
Enduring Ethics Opinion
Enduring Ethics Opinion #74 [August 2017]
Opinion #75. Contingent Fees in Certain Divorce Cases
Issued by the Professional Ethics Commission
Date Issued: December 3, 1986
Question
The Ethics Commission has been asked whether counsel undertaking pro‑bono representation in divorce cases would violate the code of Professional Responsibility by charging a fee if the parties owned a marital asset that was sold at the end of the proceeding, presumably yielding proceeds payable to the client previously accepted pro‑bono or quasi‑pro‑bono. It appears from the inquiry that the possibility of paying a fee in this fashion would be disclosed to and accepted by the client at the outset. (A surprise bill to the client would raise questions not discussed in this opinion.) The Committee has also been given the hypothetical case of an attorney in private practice undertaking representation in a domestic relations matter with the understanding that the fee will be paid when a marital asset is sold, but apparently without any understanding that no fee will be charged otherwise.
The question has been posed by an organization engaged in making pro‑bono referrals and not by an attorney directly concerned with the hypothetical case.
Opinion
Rule 8 of the Maine Bar Rules defines ?contingent fee agreement? as an agreement ?express or implied, for legal service . . . under which compensation, contingent in whole or in part upon the successful accomplishment or disposition of the subject matter of the agreement, is to be in an amount which is either fixed or is to be determined under a formula.? Excluded from the definition are agreements ?in any event to pay to the attorney the reasonable value of his services.? Rule 8 expressly prohibits contingent fee agreements ?in respect of the procuring of divorce, annulment of marriage or legal separation.? Opinion No. 11 of the Grievance Commission declined to express an opinion whether this prohibition applied to post decree proceedings, e.g., to collect support arrearages.
Rule 8, which was simply a redesignation of former Rule 88 of the Maine Rules of Civil Procedure, thus prohibits any agreed fee for representation in a divorce proceeding, express or implied, that is contingent in whole or in part upon ?successful . . . disposition of the subject matter.? Apparently the effect of the proposal described in the question would be to compensate the attorney if, but only if, he or she were successful in obtaining for the client a share in the proceeds of salable marital assets. That must be accounted successful disposition of the subject matter. Consequently, the arrangement described in the question would be a contingent fee within the meaning of Rule 8 of the Maine Bar Rules, and since it would be an agreement in respect of the procuring of a divorce, would be barred by subparagraph (c) of that rule. For a similar conclusion, see Opinion No. 10 of the Grievance Commission dated April 2, 1980.
Because Rule 8 appears to cover the matter fully, we will not discuss whether the described arrangement would amount to acquisition of a proprietary interest in the cause of action or subject matter of litigation, in violation of Rule 3.7(c), if the attorney were not given by agreement a defined share of the asset in question, but merely understood a bill could be submitted in case a sale of the asset generated disposable proceeds.
The inquiring organizations suggest that Rule 3.6(i) ?avoiding adverse interest? might be pertinent. Like the question about the applicability of Rule 3.7(c), this suggestion raises the question whether the attorney has actually acquired any kind of property interest as a result of the arrangement described in the question. Based on the limited facts given to the Commission, that would not seem to be the case.
To the extent the inquiring organization seeks advice as to the propriety of supposedly similar arrangements undertaken by individual private practitioners, the Commission declines to respond for the reasons stated in Opinion No. 67.
Enduring Ethics Opinion
Opinion #76. Refusal of Court Appointments in Criminal Cases
Issued by the Professional Ethics Commission
Date Issued: December 15, 1986
Question
The Commission is advised that a crisis has developed in a rural county because of the relatively small number of attorneys who are willing to accept court appointments to defend indigent criminal respondents. The Commission has been asked:
(1) May attorneys who have an active criminal practice refuse to accept court appointments in criminal cases?
(2) May attorneys who are not actively involved in criminal practice refuse to accept court appointments in criminal cases?
(3) May attorneys retire from criminal practice and thereafter refuse to accept appointments in criminal cases?
Opinion
It should be noted at the outset that the Commission has no jurisdiction to resolve some of the issues implicit in the questions which have been posed. Although the Commission can offer guidance regarding a lawyer?s ethical obligations under the Maine Bar Rules with respect to accepting appointments in criminal cases, it cannot predict the outcome of a court proceeding in which an attorney is charged with contempt of court for declining to accept an appointment to defend a criminal respondent. Moreover, whether a court can constitutionally compel an attorney to act as defense counsel in a criminal case at a level of compensation which the attorney believes to be economically unreasonable is a question of law which the Commission declines to answer.
Although the Commission is unable to answer the questions presented in terms of the legal consequences of refusing to accept a court appointment, it can address some of the ethical ramifications raised by the inquiries. Quite apart from the power of a court to impose sanctions for refusing to represent an indigent criminal defendant, an attorney has an obligation to provide public interest legal services imposed by Bar Rule 3.10, adopted in 1984. The rule states that:
3.10 Public Interest Legal Service
A lawyer engaged in active practice in the State of Maine should render unpaid public interest legal service of a type and amount reasonable in all the circumstances. For purposes of this rule, ?unpaid public interest legal service? means
(1) the provision of professional services at no fee or a reduced fee to persons of limited means;
(2) participation in a program under which free legal services to the indigent are provided by individual lawyers upon referral from a central agency;
(3) the provision of professional services at no fee or a reduced fee to charitable organizations that provide services or support for the indigent; or
(4) service in activities for improving the law, the legal system, or the legal profession.
The Advisory Committee?s notes indicate that ?public interest legal services? include the performance of legal services in court‑appointed cases where the attorneys? compensation is less than he would usually charge. 467 A.2d at p. LIX. Thus it is apparent that the acceptance of court appointments in criminal cases is one of the ways in which an attorney can satisfy his generalized ethical obligations under the rule.
It should be noted, however, that even if an attorney clearly violates Rule 3.10 by refusing to perform any public interest legal services whatever, his ethical shortcomings cannot be punished through disciplinary proceedings under the Maine Bar Rules. This follows from the use of the verb ?should? rather than ?shall? in the first sentence of the rule. See Advisory Committee notes, p. LX. The wording was taken from Rule 6.1 of the A.B.A. Model Rules of Professional Conduct whose draftsmen rejected a mandatory statement of the rule because of doubts about its enforceability and constitutionality. Id. at p. LXII.
The questions which prompted this opinion also present an underlying issue of whether an attorney must undertake a criminal appointment in a case which he believes to be beyond his professional competence. Rule 3.6(a)(1) enjoins a lawyer not to accept a legal matter which he knows he is not competent to handle without first associating himself with competent co‑counsel.
When asked to accept a court appointment which he honestly believes is beyond his ability, an attorney should first make his misgivings know to the court. If the judge remains unmoved, the lawyer will be confronted with the conflict between his ethical obligation under the Bar Rules and the risk of judicial censure for refusing to accept the case.[1]
It would seem unlikely that a grievance commission would discipline an attorney for undertaking a matter, even though he did so in an incompetent manner, where he was acting pursuant to a court order after disclosure of his lack of expertise. Any risk that this might occur could be minimized if the lawyer requested the judge to appoint experienced associate counsel to assist him,[2] schooled himself appropriately in the subject matter through the use of written materials or by consulting informally with more experienced practitioners, or formally associated himself with other counsel.[3]
The third question posed to the Commission is whether an attorney can ?retire from criminal practice and refuse to take court appointments in criminal cases.? Obviously, an attorney is free to organize his law practice as he pleases. As Rule 3.10 makes clear, a lawyer can satisfy his obligation to provide free legal service in ways having nothing to do with criminal practice.
It does not follow, however, that an attorney who decides not to accept any more criminal cases automatically becomes incompetent to try them as court‑appointed counsel. Thus the relevant ethical question in this regard is whether an attorney is still competent to handle the criminal case in question at the time he is requested to accept the court appointment whether or not he is still accepting criminal cases for paying clients.[4]
Footnotes
[1] See, e.g., State v. Gasen, 48 Ohio App.2d 191, 356 N.E.2d 505 (Hamilton Cty. Ct. of App. 1976); Easley v. State, 334 So.2d 630 (Fla. Dist. Ct. of App. 1976).
[2] This solution was suggested by the A.B.A. Standing Committee on Professional Ethics in Inf. Op. #1216 (1972).
[3] Compare Me. Bar R. 3.6(a)(1). See also Alaska Bar Ass?n op. #82.1 in which it was held that an inexperienced lawyer would nevertheless be expected to accept criminal appointments and would be required to retain associate counsel at his own expense if he could not otherwise become competent to undertake the matter.
[4] As pointed out above, our response is limited to the application of the Bar Rules and should not be understood as being predictive of the result which a court would reach in imposing sanctions on an attorney for refusing to accept a court appointment.
Enduring Ethics Opinion
Opinion #103. Splitting Fees Without Regard to Responsibility Assumed
Issued by the Professional Ethics Commission
Date Issued: February 7, 1990
Question Presented
Bar Counsel, pursuant to Rule 11(c)(1), has requested an advisory opinion regarding the following question.
Is it a violation of Maine Bar Rule 3.3(d), or any other Bar Rule, for an attorney to engage in the following fee arrangement: Attorney A is contacted by a client to handle a personal injury matter. A decides that he should not handle the matter and refers the case to Law Firm B. After notice to, and obtaining consent from, the client in accordance with Rule 3.3(d)(1), A and B enter into an agreement with the client whereby A is to receive 1/9 of any recovery obtained and B is to receive 2/9. A is to have no responsibility with respect to the matter, and will have no other involvement in the case other than being kept apprised of the matter by B.
Opinion
At the outset it must be acknowledged that Maine Bar Rule 3.3(d), as adopted, differs significantly from its counterpart in the Model Code and the Model Rules. It reads as follows:
A lawyer shall not divide a fee for legal services with another lawyer who is not a partner in or associate of his law firm or office; unless:
(1) The client, after full disclosure, consents to employment of the other lawyer and to the terms for the division of the fees; and
(2) The total fee of the lawyer does not exceed reasonable compensation for all legal services they rendered to the client.
In the Model Code the provision reads as follows:
A lawyer shall not divide a fee for legal services with another lawyer who is not a partner in or associate of his law firm or law office, unless:
(1) The client consents to employment of the other lawyer after a full disclosure that a division of fees will be made.
(2) The division is made in proportion to the services performed and responsibility assumed by each.
(3) The total fee of the lawyers does not clearly exceed reasonable compensation for all legal services they rendered the client.
DR 2‑107(A)
Under the Model Rules the provision reads:
A division of fee between lawyers who are not in the same firm may be made only if:
(1) The division is in proportion to the services performed by each lawyer or, by written agreement with the client, each lawyer assumes joint responsibility for the representation;
(2) The client is advised of and does not object to the participation of all lawyers involved; and
(3) The total fee is reasonable.
Rule 1.5(e)
Curiously, despite the apparently significant linguistic deviation of the Maine Rule from its counterparts no mention or explanation is offered in the Reporter?s Notes. In fact the Notes appear to utterly ignore the difference and add a comment that is difficult to understand in view of the change. The reason for this curiosity, however, is not due to logical oversight or analytical failure on the part of the Reporter, but rather arose because the Rule was modified by the Supreme Judicial Court after it was presented in substantially unchanged form to the Model Code with the accompanying Notes.[1] In view of this aetiology, this Commission must conclude that the significant modification performed by the Supreme Judicial Court was intentional and designed to permit precisely the fee arrangement that this question presents.
While it may be persuasively argued that an arrangement of the type described results in a fee that is inherently unreasonable, the Committee must conclude that the arrangement per se does not violate the Rules. As long as the client is fully informed and consents to the arrangement, there exists no prohibition. The Maine Rule, while different from the Model Code, is by no means unique. At least a dozen other jurisdictions permit similar arrangements.[2] While the policy behind the Rule is a matter of debate, this Commission is authorized only to interpret the Rule as adopted which is unambiguous: the proposed arrangement is not prohibited provided that the other conditions set forth are satisfied.
[1] See original report of the Select Commission on Professional Responsibility presented to the Supreme Judicial Court in 1979 on file in the State Law Library.
[2] As of the date of this request, the following states appear to deviate from the Model Code in a similar manner: Alabama, California, Connecticut, Illinois, Kansas, Massachusetts, Michigan, Oregon, Pennsylvania, Puerto Rico, Texas and Virginia.
Enduring Ethics Opinion
Enduring Ethics Opinions 103 [June 2016]
Opinion #102. Application of Vicarious Disqualification Rule to Students in Legal Clinic
Issued by the Professional Ethics Commission
Date Issued: February 2, 1990
A law‑school‑affiliated legal clinic provides representation to indigents pursuant to Rule 90 M.R.Civ.P. and Rule 56 M.R.Crim.P. The student‑attorneys are supervised either by faculty members or by full or part‑time attorneys ?visiting? in this capacity from private practice. Individual student‑attorneys are assigned to individual cases, obtaining from clients the consents required under the Rules. The faculty or visiting supervising attorneys act as professional sureties for the competence of the representation provided by the student‑attorneys. From time to time the supervising attorneys cover court appearances for one another where scheduling conflicts or vacations intervene. Three kinds of factual situations have given rise to this inquiry:
1) Student‑Attorney A (supervised by Supervising Attorney X) is guardian ad litem for a minor in a protective custody proceeding. Unknown to A or X, Student‑Attorney B (supervised by Supervising Attorney Y) enters an appearance on behalf of one of the parties‑in‑interest (presumably a parent).
Question 1) Under what circumstances, if any, can A or B continue representation?
2) Supervising Attorney W is ?of counsel? to a law firm in which he was formerly an active partner. Student Attorney C, whom W supervises, undertakes to represent a defendant in a civil action; a co‑defendant, although represented by a separate firm, is a regular client of W?s firm and the interests of the two defendants are potentially adverse. The separate firm representing the co‑defendant reports periodically to W?s firm on the progress of the litigation, and W?s firm can be expected to advise the co‑defendant concerning the case.
Question 2) Under what circumstances, if any, is C permitted to represent the defendant?
3) Student‑Attorney D has a part‑time job clerking for law firm GHI. Student‑Attorney E represents a client in litigation with a client represented by GHI. D and E are supervised by different supervising attorneys.
Question 3) Under what circumstances, if any, is E permitted to represent the party?
Discussion
The common thread in these three inquiries is the applicability of Maine Bar Rule 3.4(k), the so‑called ?vicarious disqualification? rule. The applicability of the rule has two aspects, one being the relationship of the student attorney to the supervising attorney and the other being the relationship of the student‑attorneys among themselves.
That the relationship of the student attorneys and the supervising attorneys is a comprehensive one is well established by Rule 90 M.R.Civ.P., which provides inter alia:
?
(f) Supervision. The member of the bar under whose supervision an eligible law student does any of the things permitted by this rule shall:
(1) Assume personal professional responsibility for the student?s guidance in any work undertaken and for supervising the quality of the student?s work.
(2) Assist the student in preparation to the extent the supervising lawyer considers it necessary.
?
The rule imposes upon the supervising attorney the student?s obligation of professional responsibility. There is nothing in Rule 90 or in the Bar Rules which suggests a relaxation of Bar Rule 3, the Code of Professional Responsibility.
Application of the vicarious disqualification rule to the student‑lawyers among themselves is more problematic. The language of Rule 3.4(k)(1) refers to ?partner or associate . . . ? and ?lawyer affiliated with him and his firm.? This Commission takes the view that the clinic constitutes an aggregation of affiliated lawyers triggering the applicability of Rule 3.4(k)(1) (see ABA Informal Opinion #1235). This is based upon the language of the rule which disqualifies lawyers who are ?affiliated? regardless of whether they constitute a firm. Rule 90, supra, makes clear that the acts of the student‑attorneys are the surrogate acts of the supervising attorneys. Other precedent supports the application of an analogous rule to Legal Aid organizations, Borden v. Borden, 277 A.2d 89, 91 (D.C. App. 1971).
While there is precedent supporting the effectiveness of a ?screening? rule which would limit the imposition of the vicarious disqualification in situations in which effective screening of the ?tainted? individual would avoid a conflict, this Commission has previously declined to establish such an exception by itself (Opinion No. 19), preferring that the Supreme Judicial Court make such judgments through the rule‑making process (see, for instance, Order of January 20, 1983 Amending Rules 3.4(h) and (k) published in the Maine Reporter at 449 A.2d at pp. xciv et seq. and accompanying discussion in the Advisory Committee?s Notes).
Notwithstanding a number of attractive policy arguments which can be made in support of a special ?screening? rule for legal services agencies, it is for the Court to fashion such a rule‑not this Commission. In the absence of such a rule we are compelled to the conclusion that the student attorneys in the legal clinic are ?affiliated.?
In light of the foregoing, we respond to the several inquiries as following:
1) Student‑Attorney B may not represent an adverse party while Student‑Attorney A serves as guardian ad litem, unless circumstances and consents set forth in Rule 3.4(d) obtain. Because the consent of a minor is involved, at least court approval should be obtained.
2) Student‑Attorney C may not represent defendant; the inquiry makes clear that consent under Rule 3.4(d) is unavailable.
3) Student‑Attorney E may not represent a client adverse to the client of the law firm by whom Student‑Attorney D is employed.
Enduring Ethics Opinion
Opinion #77. Inclusion of Deceased Partner on Office Letterhead
Issued by the Professional Ethics Commission
Date Issued: March 4, 1987
Questions
Pursuant to Maine Bar Rule 11(c), Bar Counsel has requested an Advisory Opinion from the Commission with respect to the following questions:
Is it a violation of the Maine Bar Rules, e.g., Rule 3.9(a) or (b), for a law firm named A, B, C and D, to retain on its letterhead, as well as within its business title, the name of Attorney C subsequent to C?s death, without any description or indication of any kind on the letterhead as to who C was or that he is deceased?
Additionally, if the Commission determines that some mention must be made on the letterhead (or business cards) as to the existence and date of birth and date of death of C, if C?s surname is that of several other former deceased partners of the firm, must all of those deceased partners? complete names and respective dates of birth and death also be included on the office letterhead?
Opinion
- Retention of deceased partner?s name in firm name on firm?s letterhead and in firm?s business title.
The practice of retaining a deceased partner?s name in a firm name is a matter of long‑standing custom in Maine and other states. Since this is a long‑established custom, the retention of a deceased partner?s name in a firm name does not imply that the former partner is still an active member of the firm. Accordingly, the retention of a deceased partner?s name in a firm name on the firm?s letterhead or in the firm?s business title without indication that the named lawyer is deceased is not deceptive or misleading and is therefore permissible under the Maine Bar Rules.
This conclusion is in accord with Opinion No. 13 of the Grievance Commission. There the Grievance Commission concluded that it was misleading and therefore impermissible for a firm to retain in its firm name the name of a former member of the firm who was then serving as a public official. The Grievance Commission distinguished that situation from the situation involving a deceased partner, noting that in the latter situation, it has been customary in Maine for firms to retain in their firm names the name of a deceased former partner.
This conclusion is also in accord with the A.B.A. Model Rules of Professional Conduct under which a firm is permitted to be designated by the names of deceased partners where there has been a continuing succession in the firm?s identity. ABA/BNA Lawyers? Manual on Professional Conduct, Comment at 01:170: ?A firm may be designated by . . . the names of deceased members where there has been a continuing succession in the firm?s identity . . . .?
- Inclusion of deceased partner?s name in list of lawyers on firm letterhead.
Many firm letterheads contain both the name of the firm and a list of lawyers who are members of the firm. Since such a list of lawyers implies that those lawyers are members of the firm who are in active practice, it would be misleading and therefore impermissible under Maine Bar Rules 3.9(a) and (b) to include in such a list the name of a deceased partner unless the letterhead indicates that the lawyer is deceased. That can be done by indicating after the deceased lawyer?s name the lawyer?s dates of birth and death, e.g., John Smith (1900‑1987).
- Names of other deceased partners.
If a firm?s letterhead contains a deceased partner?s name in the list of lawyers under its firm name on its letterhead, parenthetically indicating, as required, the dates of birth and death of the deceased partner, as discussed above, the Maine Bar Rules do not require that the firm also include on its letterhead the names and the dates of the birth and death of all deceased former members of the firm who had the same surname as the deceased partner whose name is listed on the firm?s letterhead.
Enduring Ethics Opinion
Enduring Ethics Opinion #77 [April 2014]
Opinion #78. Withdrawal of Mortgagee's Attorney Who Will Be Called as Witness Regarding Fees Charged in Foreclosure Action
Issued by the Professional Ethics Commission
Date Issued: April 1, 1987
The Ethics Commission has been asked whether an attorney representing the mortgagee in a civil action to foreclose a mortgage must withdraw (unless the Court otherwise orders) if counsel for the mortgagor has indicated the likelihood that the inquiring attorney will be called as a witness at the trial for the purpose of being examined on the question of the attorney?s fee, if any, to be included in any judgment of foreclosure. The inquiring attorney has received a notice to take his deposition, which indicates that the topics of the deposition are to be limited to non‑privileged matters concerning the attorney?s fees recoverable by the plaintiffs under the mortgage.
Opinion
Rule 3.5(b) of the Code of Professional Responsibility requires the withdrawal of a lawyer who knows or should know that he is likely to be called as a witness in litigation concerning the subject matter of his employment. The Rule goes on to provide, however, that it does not apply to situations in which the lawyer would not be precluded from accepting employment under Rule 3.4(j). Rule 3.4(j)(1) makes clear that withdrawal will not be required ?where the predictable testimony will relate solely to . . . legal services furnished by the lawyer.? Subsection 2 of subparagraph (j) of Rule 3.4 provides that withdrawal of the entire firm is not required in any event; a partner of the witness attorney may take over the trial, regardless what topics will be covered by the witness‑attorney?s testimony.
Insofar as such matters are predictable at all, it seems apparent that the testimony contemplated from the inquiring attorney is testimony relating solely to legal services he or his firm has furnished or will furnish. Accordingly, his withdrawal would appear not to be required. Even if the testimony strays beyond the issue of legal services, a partner of the lawyer would be free to take over the trial, and in any case withdrawal would not be required if the Court otherwise ordered. Since attorney?s fees are always a potential issue in a foreclosure, the plaintiff?s attorney will always be a possible witness, and a rule mandating withdrawal in all cases would therefore be impractical to say the least.
Enduring Ethics Opinion
Opinion #79. Propriety of Business Venture in Which Lawyers and Accountants Are Principals
Issued by the Professional Ethics Commission
Date Issued: May 6, 1987
Question
The Commission has received a brochure describing a corporation that proposes to furnish the services of two attorneys and an accountant to individual clients. The brochure announces that the corporation will manage the careers and personal affairs of its clients, that it will ?provide total legal and financial services? including advice, negotiations, and ?handling legal . . . matters,? and that it has a ?team of experts? in ?legal and financial matters.? Neither the brochure nor any other materials supplied to the Commission state exactly the relationship between the corporation and each member of the team of experts. The brochure describes the corporation in places as ?we? and sets forth at length a biography of each of the three experts placing all on an apparently equal footing. It thus suggests that the three are all participants in the venture having apparently the same relationship to the corporation. An accompanying letter to the Commission states that the accountant is not part of the corporation ?as far as being an officer is concerned,? but does not state that the accountant will not be a shareholder or otherwise share in profits of the venture. The Commission has been asked whether this proposal would violate any of the Maine Bar Rules.
Discussion
Rule 3.2(a)(2) prohibits the formation of a partnership or a professional service corporation with a non‑lawyer, if any of the activities of the partnership or corporation consist of the practice of law. Our rule is derived from DR 3‑103 of the ABA Code of Professional Responsibility. The Reporter?s Notes to the Maine Bar Rules indicate that consideration was given to modifying this traditional prohibition, but no change was undertaken:
The Commission was aware of the growing interest in interdisciplinary service organizations but believed the public interest would not be best served by their encouragement on a proprietary level, in the legal profession. Among the goals supported by this decision are: (1) minimal public confusion as to the nature and legitimacy of proffered services; (2) maintenance of clear and unrestricted authority in the Supreme Judicial Court over the practice of law; and (3) avoidance of the difficult problems that would be posed by the substantive law of partnerships under a contrary rule. Lawyers and law firms are, of course, free to employ or otherwise retain in a non‑proprietary capacity economists, physicians, psychologists or others so long as there is neither a delegation nor a representation of authority to practice law. Reporter?s Notes to Rule 3.2.
Related Rule 3.3(e) prohibits a lawyer from dividing a legal fee with a non‑lawyer. This rule is almost identical with its ABA Code counterpart, DR 3‑102.
Rule 3.2(a)(2) turns on whether activities of the corporation consist of the practice of law. The materials furnished to the Commission do not identify as services offered by the corporation any specific service that may only be performed by a person with a license to practice law, such as representing the corporation?s clientele in judicial proceedings. The description of services to be provided includes, on the contrary, many services commonly offered by lay persons, such as business advice and negotiation. It does, however, contain a general representation that ?total legal . . . services? will be provided, and it represents that a named lawyer will be a member of the ?team of experts.? The corporation is thereby entering into the ?practice of law? for the purpose of applying Rule 3.2(a)(2), even if it has no intention of providing any service that requires membership in the Bar.
The ?practice of law? as used in rules like 3.2(a)(2) has typically been interpreted as including services in fact performed by lawyers, whenever the business entity in question represents that a lawyer will be performing the service, even though non‑lawyers may and do perform the same service. The ABA in informal Opinions 1482 (lay inventor‑assistants and patent lawyers) and 1241 (licensed treasury agent and lawyer practicing before the Internal Revenue Service) and Formal Opinion 297 (attorney as salaried employee of C.P.A. firm) explained that when a person becomes a lawyer he takes on a mantle that he cannot thereafter take on or off as he pleases. Conduct in which he engages which involves the practice of law when engaged in by lawyers must be in accordance with the ethical standards of the profession if he is to retain his professional status. Even though a particular activity may be open to a layman, if such activity is the practice of law when engaged in by a lawyer, one who is a lawyer cannot free himself of the ethical restraints of the profession in carrying on such activity merely by announcing he is to be regarded as a layman for this particular purpose. Formal Opinion 297.
Lawyers are not necessarily barred from co‑proprietorship with lay persons in non‑legal enterprises, or even in law‑related enterprises for that matter. Informal Opinion 1241 emphasized, however, that if the services of the enterprise would be included in the practice of law when engaged in by a practicing lawyer, and if the lawyer proprietor holds himself out as a lawyer, those services will constitute the practice of law for the purpose of determining whether co‑proprietorship with a lay person is forbidden. Inevitably there will be such a holding out if the enterprise represents that its services will be performed by a lawyer.
It is not clear from the materials supplied to the Commission whether it is proposed to organize the corporation as a P.A., or as a business corporation. If organized in Maine as a P.A., the corporation could not have a mixture of professionals as its shareholders and could not mix the professional services it proposes to offer. (13 M.R.S.A. Sections 705, 710) Nor could the corporation use the ?Inc.? tag in its name, as does the brochure furnished to the Commission. (13 M.R.S.A. Sec. 713) If organized as a business corporation, the corporation could not practice law or accountancy.[1] The Commission expresses no opinion on whether the services described in the brochure would constitute the practice of law or accountancy for this purpose.
The Commission has concluded that as the venture was described to it, Rule 3.2(a)(2) would be violated whether the corporation is a P.A. or a business corporation. If it is proposed to organize a P.A. with only one profession among the shareholders, then the brochure seems to describe a joint venture between the P.A. and the non‑shareholder professional or professionals. The Commission concludes that such a joint venture is within the rule?s prohibition on forming a partnership with a non‑lawyer. Otherwise the rule would be violated when an arrangement achieves the permanency of a formal partnership agreement but not when it is transitory, as are many joint ventures. Moreover, in the present case, the arrangement has been described as if it were to have an indefinite duration and thus for purposes of the rule could fairly be treated as a de facto partnership.
If the facts should be interpreted as describing a P.A. with both attorneys and accountants as shareholders, notwithstanding 13 M.R.S.A. Sec. 705, the result would be a violation of an express prohibition in Rule 3.2(a)(2).
The same conclusion follows if a business corporation is proposed. Although Rule 3.2(a)(2) expressly lists only partnerships and professional corporations as forbidden, both the text of the rule and the Reporter?s Notes make clear that Rule 3.2(a)(2) was intended to prohibit all business arrangements for providing legal services in which lawyers and non‑lawyers share proprietorship, thereby supporting the ban on dividing fees for legal services with a non‑lawyer [Rule 3.3(3)] and avoiding confusion of regulatory authority between the judicial and executive branches. The enumeration in the Rule of particular arrangements should not be construed as a limitation having the capacity to frustrate those objectives. Of course, the Bar Rules do not prohibit shared proprietorship in such entities as banks and insurance companies. Although those businesses may offer some of the same services as lawyers, typically they do not represent that the services are ?legal? or that they are performed by lawyers, let alone lawyers having a proprietary interest in the corporation.
The Commission therefore concludes that when a business corporation represents that it will offer services traditionally performed by lawyers and that those services will be performed by lawyers who are held out as having a proprietary relationship to the business, Rule 3.2(a)(2) will prohibit any sharing of proprietorship with non‑lawyers, regardless how that shared proprietorship is accomplished. The materials furnished to the Commission clearly imply just such a relationship among the lawyers, the accountant and the corporation in the present case. Accordingly, the arrangement described to the Commission would violate Rule 3.2(a)(2). As the Reporter?s Notes to that Rule indicate, it does not prohibit lawyers from employing other professionals, such as accountants, or non‑professionals. We do not mean this interpretation of Rule 3.2(a)(2) to be exhaustive; other cases will be resolved as they are presented.
Footnote
[1] Title 13A does not permit formation of a corporation under its umbrella for purposes expressly covered by some other incorporation statute. (13A M.R.S.A. Sec. 401.2.) Maine?s Professional Services Corporation Act authorizes formation of corporations to furnish services requiring licensure by the State, such as those of an attorney or accountant. (13 M.R.S.A. Sec. 703.2.) It follows that business corporations may not be organized to practice law or accountancy.
Enduring Ethics Opinion
Enduring Ethics Opinion #79 [June 2014]
Opinion #80. Representation by Probate Judge's Law Firm on a Matter upon Which He Has Acted in a Judicial Capacity
Issued by the Professional Ethics Commission
Date Issued: August 5, 1987
Facts
Lawyer L. filed a petition for formal probate of X?s will requesting that he be appointed as personal representative as set forth in the will.[1] Notice of the petition was sent to the decedent?s daughter and to a charity which was a residuary beneficiary under the will.
An attorney filed an appearance on behalf of the decedent?s daughter and an answer contesting the allowance of X?s will. Attorney L. requested that he be named as special administrator. A written request for a continuance of the hearing on the allowance of the will filed on behalf of X?s daughter was granted by the Probate Judge with the consent of Attorney L. By agreement between Attorney L. and counsel for X?s daughter, the Probate Judge appointed Attorney L. as special administrator. Subsequently the Probate Judge granted another motion for a continuance of the hearing on the allowance of the will which had been requested by the daughter and was not objected to by Attorney L.
Prior to the hearing on allowance of the will, law firm ABC, in which the probate judge is a partner, entered an appearance on behalf of the charitable beneficiary, and requested that further probate proceedings be transferred to another county pursuant to 4 M.R.S.A. § 307. The petition for transfer of jurisdiction was objected to by both Attorney L. and the decedent?s daughter. The Probate Judge responded by denying the petition and recusing himself from participating further in the proceedings concerning X?s estate. Law firm ABC has now requested the Ethics Commission to render an opinion as to whether its representation of the charitable beneficiary would violate the Bar Rules.
Opinion
Lawyer L. contends that a conflict of interest was created when law firm ABC accepted employment on behalf of the charitable beneficiary. However, the recusal of the Probate Judge appears to have removed the only potential conflict between the interests of ABC and the other participants in the litigation. The fact that some delay may result from the necessity of securing another judge is not a sufficient reason to prohibit the representation. Were it otherwise, no former partner or associate of a Superior Court Judge could ever accept a case in the Superior Court. Since presiding judges customarily decline to sit on cases in which their former law associates are involved and since the judges are on circuit, it could never be known in advance whether the case would come up on a trial list at a term when the judge in question was presiding thus necessitating a continuance. The only distinction presented by the case of a probate judge is that the members of his law firm know in advance that a recusal will be necessary if they appear in his court whereas, at the Superior Court level, the possibility is merely speculative since the judges sit at more than one location.
A more serious objection to the representation is that it violates Rule 3.4 (g). That section states that:
A lawyer shall not accept private employment in a matter upon the merits of which he has acted in a judicial capacity.
Because of the vicarious disqualifications imposed by Rule 3.4(k), law firm ABC in which the probate judge is a partner could not represent the charitable beneficiary if the judge himself could not ethically do so.
Law firm ABC suggests that the probate judge did not act ?upon the merits? within the meaning of the rule since his judicial activity was limited to granting two uncontested motions for continuance, appointing Lawyer L. as special administrator of the estate, and ruling on ABC?s petition that the case be transferred to another jurisdiction.[2] The Commission has concluded, however, that a determination of whether the ?merits? of a matter are affected by judicial action cannot be resolved on the basis of whether the judge acted with consent of counsel. After all, judgments for some or all of the relief prayed for in the complaint are sometimes entered ?by consent.? Yet it could not be seriously contended that the judicial action in such cases was not ?on the merits.?
Bar Rule 3.4(g) prohibiting representation by an attorney in a matter in which he had previously acted in a judicial capacity is taken verbatim from DR 9‑101(A) of the former ABA Code of Professional Responsibility. Ethical consideration 9‑3 states that an important purpose of the rule is to avoid the appearance of impropriety in such matters even if none exists.
In order to accomplish the policy of maintaining public confidence in the judiciary embodied in Rule 3.4(g), the Commission believes that a broad construction of the term ?upon the merits? should be adopted. Any other view would increase the risk that part‑time probate judges were ?feeding? cases to their law partners by recusing themselves after it appeared in the early stages of the litigation that the case would be lucrative. Such a construction of the rule would also tend to discourage judges from recusing themselves to make way for participation by their law firms in cases where they had gained insights during the preliminary stages of the litigation which might prove valuable if communicated to a law partner who had agreed to represent one of the parties.
In the present case, the probate judge appointed Lawyer L. as special administrator of the estate. Although the making of such an appointment might seem relatively innocuous, the uniform laws comment to 18‑A M.R.S.A. § 3‑615 suggests that the appointment of a special administrator is sometimes the initial battleground in an incipient will contest. A special administrator also has important duties regarding the collection and management of the assets of the estate. See 18‑A M.R.S.A. § 3‑616. The Commission is of the opinion that the appointment of the special administrator in this case constituted action ?upon the merits? for purposes of Rule 3.4(g).
The probate judge was also presented with a petition to transfer jurisdiction of the matter to another county. The petition was opposed by Lawyer L. and an attorney who represented another party interested in the estate. Depending on the outcome, the unsuccessful attorneys and their clients could have been subjected to substantial expense and delay in litigating the case in a more distant jurisdiction. The burden of such additional expense could weaken the resolve of a party who was in a marginal financial position. The Commission therefore concludes that the ruling of the probate court denying the petition to transfer the case to another jurisdiction was also ?upon the merits? within the meaning of Rule 3.4(g). It follows that acceptance of the representation by law firm ABC would violate the rule.
Footnotes
[1] The Commission assumes that the facts are as stated in the request. Its opinion might be different if the facts were other than as represented by the inquiring attorneys or if additional relevant facts were shown to exist of which the Commission is presently unaware.
[2] The Commission expresses no opinion as to whether there are any circumstances in which the granting of an uncontested motion for a continuance could constitute action ?upon the merits? of the case.
Enduring Ethics Opinion
Opinion #81. Contingent Fee in Case in Which Fee Award Is Permitted by Statute
Issued by the Professional Ethics Commission
Date Issued: November 4, 1987
Questions Presented
a) Does Bar Rule 8(c) prohibit the taking of a contingent fee in an action brought under a statute providing for the award of attorneys? fees to the prevailing party?
b) If a court‑awarded fee is sought, is the attorney seeking the fee obligated to disclose to the Court the existence of the contingent fee agreement?
c) If Rule 8(c) does not prohibit the taking of a contingent fee in such cases, are the Bar Rules violated if the contingent fee agreement provides that the attorney will receive a percentage of the gross recovery and gross recovery is defined to include the attorneys? fees as well as the judgment?
Opinion
Rule 8(c)(3) prohibits the use of a contingent fee agreement in any matter wherein the ?method of determination of attorneys? fees is otherwise expressly provided by statute or administrative regulations.? It is the opinion of the Commission that this provision precludes the use of a contingent fee agreement in a case involving a statutory fee provision regarding the award of fees to a prevailing party only if the statutory provision contains language indicating that the Court?s determination regarding the amount of the fees was intended to be binding upon all parties. The Commission believes that, absent an expression of legislative intent to the contrary, the statutory language regarding fee‑shifting should be taken as expressing no more than a legislative judgment that the non‑prevailing party should bear all or a portion of the prevailing party?s legal fees, and not a prohibition upon payment by the prevailing party of a larger fee to his or her own counsel. In such cases, the language of Rule 8(c)(3) would be taken as regulating only the contractual relationship between the claimant and his attorney with respect to the allowance of fees.[1]
The consequence of the foregoing analysis is that the claimant?s attorney will be obliged in every case in which relief is sought under a ?fee‑shifting? statute to determine whether it was intended to be preclusive as far as establishing the amount of the claimant?s attorneys? fee. If such preclusive language is not present, the claimant and his attorney are free to establish their own contingent fee contract. Since receipt of a statutory fee award is a right of the claimant rather than of his attorney, the claimant would normally be entitled to apply sums recovered for attorneys? fees from the non‑prevailing party against the contingent fee contracted for.
With respect to question (b), the Commission is of the opinion that, in all cases, the existence of a contingent fee agreement must be disclosed to the Court or other authority determining the statutory award of fees. In making its determination regarding fees, the Court is entitled to be informed as to what the parties themselves considered to be reasonable. Moreover, as a practical matter, the plaintiff?s attorney may want to demonstrate the risk factor involved to support a demand for a multiplier.
As to question (c), the Commission notes that Bar Rule 3.3(a) prohibits an agreement for or the collection of an excessive fee. The Commission cannot say that a fee agreement which included the fee itself in the base against which the contingency percentage is to be charged would be excessive per se. To do so would ignore the infinitely varying factors which affect the reasonableness of a fee. Of equal importance, determinations as to the reasonableness of a fee are by rule committed to the Fee Arbitration Commission. See Bar Rules 9, 3.3(c), 8(f). It would be singularly inappropriate for this Commission to adopt any per se rules as to the reasonableness of fees, for to do so would impinge upon the jurisdiction of a Commission of coordinate jurisdiction. However, because an agreement for an excessive fee can constitute grounds for discipline, we strongly recommend that in contracting for a contingent fee structured as set forth in the inquiry, a lawyer should be satisfied that, judged by the standards set forth in Bar Rule 3.3 (a)(1)‑(9), any fee provided for in such an agreement would be reasonable.[2]
Footnotes
[1] For a statute which absolutely limits the fee which can be charged, see 39 M.R.S.A. §110(1) (Supp. 1986‑87).
[2] We note that the contingent fee agreement form contained in Rule 8(f) may not meet the needs of the statutory fee‑shifting case. Counsel should be careful to make appropriate adaptations to this or other standard forms so that compliance with the formal requirements of Rule 8(d) are satisfied and the terms are sufficiently clear to both lawyer and client.
Enduring Ethics Opinion
Enduring Ethics Opinion #81 [December 2014]
Opinion #82. Communication with Opposing Party's Physician
Issued by the Professional Ethics Commission
Date Issued: November 4, 1987
Question
Is it a violation of the Maine Bar Rules for defendant?s counsel in a personal injury action to discuss plaintiff?s medical condition and treatment with the plaintiff?s treating physician without having obtained permission from plaintiff?s counsel to do so?
Opinion
It is the opinion of the Commission that under the circumstances described in the above inquiry, the Maine Bar Rules do not prohibit the defendant?s lawyer from discussing the plaintiff?s medical condition and treatment with plaintiff?s treating physician.[1]
The only Bar Rule which directly concerns the subject of a lawyer?s communications with witnesses is Bar Rule 3.7(g). None of the provisions of that Rule, however, address the question of the propriety of counsel?s communicating with an opposing party?s physician or other expert witnesses.
Our opinion is in accord with a 1979 opinion of the Professional Ethics Committee of the Maine State Bar Association in which that Committee concluded that the A.B.A. Code of Professional Responsibility did not prohibit plaintiff?s counsel from communicating privately with a medical expert who had been retained by defense counsel to examine plaintiff?s medical condition.[2] Several legal ethics committees of other bar organizations have reached the same result under various canons and rules. See, e.g., ABA Comm. on Ethics and Professional Responsibility, Informal Op. 892 (10/11/65); ABA Comm. on Ethics and Professional Responsibility, Formal Op. 127 (3/15/35); Ethics Comm. of Alaska Bar Assoc. Op. 84‑8 (8/25/84); Legal Ethics Comm. of Indianapolis Bar Assoc. Op. 5‑1985 (12/13/85); Comm. on Professional Ethics and Conduct of Iowa State Bar Assoc. Op. 83‑19 (12/13/83); Ethics Comm. of North Carolina State Bar Assoc. Op. 338R (10/18/83); Comm. on Professional Ethics of State Bar of Wisconsin Op. E‑83‑13 (11/83).[3]
Although the Maine Bar Rules themselves do not prohibit such ex parte contact with plaintiff?s treating physician, counsel should realize that the propriety of such conduct as a matter of law is a question which has not been decided by the Maine Supreme Judicial Court, and courts in other jurisdictions are sharply divided on this question of law. Some courts have concluded that such informal methods of obtaining information are not prohibited by discovery rules; that no party has a proprietary interest in any witness?s evidence; and that indeed such private interviews avoid the expense of formal discovery proceedings and play a useful role in formulating early evaluation and settlement of cases, thus promoting judicial economy. See, e.g., Doe v. Eli Lilly & Co., Inc., 99 F.R.D. 126 (D.D.C. 1983); Trans‑World Investments v. Drobny, 554 P.2d 1148 (Alaska 1976); Gailitis v. Bassett, 146 N.W.2d 708 (Mich. App. 1966).
On the other hand, a greater number of courts have ruled that such ex parte contacts with a plaintiff?s physician are impermissible for one or more of the following reasons: because discovery rules provide the exclusive mechanism for obtaining information from a medical witness; or because such ex parte interviews violate public policy promoting protection of the physician‑patient privilege, notwithstanding that the plaintiff may have waived that privilege as to certain matters respecting plaintiff?s condition by reason of having instituted a lawsuit in which plaintiff?s condition is at issue. See, e.g., Miles v. Farrell, 549 F.Supp. 82 (N.D. Ill. 1982); Hammonds v. Aetna Casualty & Surety Company, 243 F.Supp. 793 (N.D. Ohio 1965); Karsten v. McCray, 509 N.E.2d 1376 (Ill. App. 1987); Petrillo v. Syntex Laboratories, Inc., 499 N.E.2d 952 (Ill. App. 1986); Roosevelt Hotel Limited Partnership v. Sweeney, 394 N.W.2d 353 (Iowa 1986); Schwartz v. Goldstein, 508 N.E.2d 97 (Mass. 1987); Wenninger v. Muesing, 240 N.W.2d 333 (Minn. 1976); Jaap v. District Court of the Eighth Judicial District, 623 P.2d 1389 (Mont. 1981); Stoller v. Moo Young Jun, 118 A.D.2d 637, 499 N.Y.S.2d 790 (1986); State ex rel. Klieger v. Alby, 373 N.W.2d 57 (Wis. App. 1985).[4]
Given this split of judicial authority, it is evident that persuasive arguments can be made on either side of this important question of law. The decision of that question entails consideration of significant public policy issues, the scope and effect of the discovery rules and the Rules of Evidence,[5] as well as the questions of the possible liability of the physician and the admissibility of the physician?s testimony under circumstances where the physician has discussed the case privately with the defendant?s counsel. This Commission, however, is not authorized to determine and formulate rules of law or to decide such matters of public policy. Since our jurisdiction is limited to interpreting the provisions of the Maine Bar Rules, we decline to answer the question presented as a matter of law and conclude only that the Maine Bar Rules themselves do not prohibit the conduct which is the subject of this inquiry.
Footnotes
[1] The ethical propriety of interviewing an expert retained or specifically employed by another party in anticipation of litigation or preparation for trial may involve other considerations not applicable where the expert is the treating physician, see Me. R. Civ. P. 26(4), and is beyond the scope of this opinion.
[2] Maine State Bar Assoc. Ethics Op. 73 (2/2/79), in 13 Maine Bar Bulletin 67.
[3] Several other legal ethics committees have reached a contrary result or have imposed conditions on such interviews. See, e.g., Professional Ethics Comm. of Akron Bar Assoc. Op. 11 (12/83); Colorado Bar Assoc. Ethics Comm. Op. 71 (9/21/85) (plaintiff?s counsel must be notified and given an opportunity to be present); Comm. on Professional and Judicial Ethics of State Bar of Michigan Op. CI‑587 (12/19/80) (consent of plaintiff?s counsel required where interview attempts to obtain privileged information); Comm. on Professional Ethics of New York State Bar Assoc. Op. 577 (11/20/86) (provided lawyer may not attempt to discover from expert, without knowledge or consent of opposing counsel, matters which are protected by an evidentiary or work‑product privilege); Legal Ethics and Unlawful Practices Comm. of San Diego County Bar Assoc. Op. 1983‑9 (1983) (prior notification to plaintiff?s counsel required); Ethics Comm. of Board of Professional Responsibility of Tennessee Supreme Court Op. 85‑F‑86 (lawyer must fully disclose his role to physician and not engage in fraud, deceit or misrepresentation). See also Code of Professional Responsibility Comm. of Washington State Bar Assoc. Op. 180 (undated).
[4] A recent decision of the Supreme Court of New Jersey, while allowing defense counsel to privately interview plaintiff?s physician specified several conditions which must be met: defense counsel must provide plaintiff?s counsel with reasonable notice of the time and place of the proposed interview, must provide physician with a description of the scope of the interview, and must communicate with unmistakable clarity that the physician?s participation at an ex parte interview is voluntary. Stempler v. Speidell, 495 A.2d 857 (N.J. 1985). In that case, the court also solicited the views of the Civil Practice Committee with regard to amending the Court Rules to deal with this issue more formally.
[5] See Maine Rules of Evidence, Rule 503(e)(3) (no physician‑patient privilege under Rule 503 ?as to communications relevant to an issue of the physical, mental, or emotional condition of the patient in any proceeding in which the condition of the patient is an element of the claim or defense of the patient . . . ?).
Enduring Ethics Opinion
Opinion #83. Domestic Litigation Against Former Client
Issued by the Professional Ethics Commission
Date Issued: March 10, 1988
Pursuant to Maine Bar Rule 11(c)(2), ABC firm has requested an advisory opinion regarding the ethical obligations arising from the following set of facts:
Statement of Facts
In 1985, wife was represented by the ABC law firm in a divorce. In June, 1986, wife also requested advice from the firm regarding a loan she was seeking from a financial institution to pay off a mortgage held by husband on property owned by wife and obtained as a result of the divorce. The firm assisted wife at the closing of the loan that she obtained to pay off the mortgage and prepared the discharge of mortgage for husband?s signature. In April, 1987, husband contacted the ABC law firm requesting assistance in preparing a will. The office prepared a will for him at that time. In the summer of 1987, husband left the State of Maine for another state. In December, 1987, wife again contacted ABC law firm requesting assistance in collecting child support that husband is not paying pursuant to the terms of the divorce decree.
Question Presented
May the ABC law firm represent the wife in collecting child support that the husband is not paying pursuant to the terms of the divorce decree?
Opinion
Maine Bar Rule 3.4 governs the standards of conduct that apply to this situation. Both wife and husband are former clients of the ABC law firm. The firm?s professional relationship with wife consisted of divorce representation in 1985 and assistance in paying off husband?s mortgage on property, owned by her and obtained as a result of the divorce, in June, 1986. More recently, husband hired the firm to prepare a will in April, 1987. The facts with which we are presented do not suggest that wife has an ongoing attorney‑client relationship with the ABC law firm. Rule 3.4(a) mandates that before ABC can accept representation of the wife in this child support matter it must disclose to wife as the prospective client the prior professional relationship with husband.
Rule 3.4(e) prohibits a lawyer from accepting employment adverse to a former client without that client?s informed written consent if such new employment involves the subject matter of the former employment or may involve the use of confidential information obtained through such former employment. In the present case we have not been provided with details of ABC law firm?s representation of the husband. It may well be that in the course of preparing the will, the attorney(s) obtained financial information or other confidential information the nature of which bears upon the current child support controversy. In that review, ABC law firm in compliance with Rule 3.4(e) must inform husband of the proposed employment by wife and obtain his written consent in order to undertake wife?s representation. See also Opinions #2 and 32 of the Grievance Commission of the Board of Overseers of the Bar for further discussion of the Rules implicated by litigation against a former client.
Enduring Ethics Opinion
Opinion #84. Disclosure of Client's Incapacity to Protect Own Interests
Issued by the Professional Ethics Commission
Date Issued: March 2, 1988
Question
An attorney representing a 67‑year‑old woman in a workers' compensation matter believes he has reason to doubt the clients ability to make rational financial decisions. He has given advice that has been ignored, resulting, he believes, in adverse consequences to the client. The client has a son who lives in the vicinity.
The affairs causing concern include the clients refusal to accept delivery of checks for the payment of workers compensation benefits and the clients refusal to retire from employment formally (although she is not in fact working), resulting in the loss of substantial retirement benefits. The client has exhibited signs of irrationality and is uncommunicative. She has not forbidden the attorney from communicating the foregoing concerns to family members; neither has she responded to a request for permission to do so. There is no indication of the clinical reason for her condition.
The Commission has been asked whether any bar rule would be violated if the inquiring attorney were to inform the son of his client that the attorney believes the client is incapable of making rational decisions concerning her affairs and that a conservatorship should be considered.
Opinion
The Commission concludes that if the attorney reasonably believes the client is not able to act rationally in her own interest, a limited disclosure of his concern to one or more members of the clients family is permitted by the Bar Rules, provided the attorney further concludes that those family members have no interest in the clients affairs adverse to that of the client.[1]
The Maine Bar Rules do not provide a great deal of direct guidance to attorneys facing the kind of problem described in the question. Three principles can be identified as at least potentially involved: the attorneys obligation to refrain from disclosing confidences and secrets of the client; the clients right to make decisions about her affairs; and, the attorneys duty to act in the interest of the client. The first principle is made explicit by Bar Rule 3.6(1). The second and third principles, while generally acknowledged to accompany the attorney‑client relationship, are not expressed in so many words by any of the Bar Rules. Rather, they arise out of the agency relationship between lawyer and client, and are confirmed by the duty to avoid conflicts of interest and to preserve confidences and secrets of the client. [Developments in the Law-Conflicts of Interest in the Legal Profession, 94 Harvard Law Review 1244, 1252, 1260]
Both the ABA Code of Professional Responsibility and the ABA Model Rules of Professional Conduct are more explicit. DR 7‑101 of the Code provided, in pertinent part, "A lawyer shall not intentionally: (1) Fail to seek the lawful objectives of his client through reasonably available means permitted by law and the Disciplinary Rules . . . EC 7‑7 stated (with exceptions not material here) the authority to make decisions is exclusively that of the client." EC 7‑12, however, discussed in general terms the additional responsibilities of a lawyer whose client is disabled in such a way as to impair the ability to make a considered judgment on his own behalf, stating that such a disability could compel the lawyer to make certain decisions for the client unless a legal representative had been appointed, in which case the lawyer would be obliged to look to the legal representative.
The Model Rules are somewhat more specific. Rule 1.2 states: A lawyer shall abide by a clients decisions concerning the objectives of representation. Rule 1.14(b) provides, however:
A lawyer may seek the appointment of a guardian or take other protective action with respect to a client, only when the lawyer reasonably believes that the client cannot adequately act in the clients own interest.
Notwithstanding the failure of the Maine Bar Rules to achieve the detail of either the ABA Code or the Model Rules concerning the topic of this opinion we find no inconsistency in the principles involved.
Neither the ABA Code of Professional Responsibility nor the Model Rules discuss the dilemma of a lawyer who must reveal a clients disabling condition, which might fairly be considered either a confidence, a secret, or information relating to representation of a client [Model Rule 1.6], in order to perform the duty of making choices for an incapacitated client (as in the Code) or seeking the appointment of a guardian (as in the Model Rules). A practitioner guided by the Model Rules might find this a disclosure impliedly authorized in order to carry out the representation [Model Rule 1.6(a)]. Neither the ABA Code nor the Maine Bar Rules expressly provides that escape from the problem.
In Opinion 69 the Ethics Committee of the Maine State Bar Association concluded that the disclosure by an attorney to the Social Security Administration of a clients alcoholism would violate the duty to maintain confidences and secrets of a client, even though disclosure might be in the economic interest of a disabled client. The opinion assumed, however, that the clients involved had expressly directed the attorney not to disclose their condition, which in any event was more stigmatizing than a disability incident to aging. Moreover, the opinion does not indicate that the Committee considered the duty of an attorney to protect the interest of the client. Accordingly, we do not find the opinion to offer a persuasive solution to the question at hand.
In the present case, there is no indication that a confidence of the client would be involved in any part of the proposed disclosure and recommendation to a relative of the client. Rule 3.6(l) defines the term secret as including information gained in the professional relationship that the client has requested be held inviolate or the disclosure of which would be embarrassing or detrimental to the client. Apparently the client has not yet given any directions with respect to disclosure of her mental condition. Under these circumstances we do not think the attorney is required to conclude that disclosure would be embarrassing and therefore to refrain from taking action that might be in the clients clear financial interest. We conclude that it is reasonable for counsel confronted with a situation such as is described in the question to subordinate the risk of disclosing a confidence or secret of the client to the risk that failure to act will cause more serious damage to the clients interests.
This Committees Opinion 58 emphasized the clients right to make decisions in finding that appointed defense counsel did not have the right to enter a plea of not guilty by reason of insanity over the objection of the client, who the court had already determined to be competent. It may be that the clients right to control the choice of objectives during the professional relationship must be honored by the attorney under all but the most extreme circumstances. There seems to be general agreement that the attorney may only participate in or contribute to an interference with that right when he reasonably concludes that the client has demonstrated an incapacity to decide. [e.g., Oregon State Bar, Desk Book for Lawyers, Opinion 237, February 29, 1973: see In re Valentines Guardianship, 294 P.2d 696 (Utah, 1956)] When that threshold has been crossed, however, we conclude that the attorneys duty to act in the clients interest takes precedence over the duty to carry out decisions the client expresses as his or her preference.
What the inquiring attorney proposes here is submission of the issue of incapacity to an appropriate tribunal for decision. Consequently, reliance on the clients right to choose objectives during the professional relationship begs the question. It goes without saying that the attorney must have far stronger grounds for acting to seek the appointment of a guardian or to suggest that family members do so than mere disagreement with the client.
We conclude that the attorneys mere withdrawal from representation is not likely to be a satisfactory resolution of the dilemma described in the question, since it leaves the client without advice when it seems to be most needed. [Cf. Mo. Bar Bull., March, 1980, Informal Opinion 1, July 17, 1979; 22 Ore. State Bar Bulletin 10, October, 1961, Opinion 100] It is possible that circumstances could arise justifying or forcing that step, such as a clients directive that the attorney resist all attempts to obtain appointment of a conservator after the attorney himself has set the machinery in motion. Needless to say, however, any attorney considering withdrawal should be confident of having one or more of the grounds listed in Rule 3.5(c) and should take the precautions required by Rule 3.5(a).
Footnote
[1] If disclosure to members of the clients family cannot be made within these limitations, the attorney may request assistance from the Division of Adult Services, Bureau of Social Services, Department of Human Services, which provides for adult guardianship services. The ABA Model Rules of Professional Conduct, Rule 1.14(b) would allow the attorney to seek appointment of a conservator himself.
Enduring Ethics Opinion
Enduring Ethics Opinion #84 [January 2023]
Opinion #85. Distribution of Newsletter to Non-clients
Issued by the Professional Ethics Commission
Date Issued: April 7, 1988
Pursuant to Maine Bar Rule 11(c)(1), Bar Counsel has requested an advisory opinion from the Professional Ethics Commission with respect to the following facts.
A law firm in another state prepares and distributes to clients and non‑clients in the State of Maine a newsletter which is apparently prepared by members of the law firm. The newsletter not only reports recent legislative enactments, regulatory agency rulings and court decisions, but also gives general descriptions of courses of action and alternatives its readers can consider when involved with a problem such as an unfriendly takeover bid of a corporation. In addition the newsletter suggests that its readers contact named members of the firm if they have further questions on a given news article. Finally, the newsletter devotes space describing recent seminars and educational activities that firm members have conducted or participated in. At the end of the publication is a statement that the newsletter does not constitute legal advice and suggests that readers consult with counsel to determine the applicability of any new development to their specific situation. It concludes with a final invitation to contact the firm for more information on any item discussed in the newsletter.
The question is whether the distribution of the newsletter to non‑clients of the firm violates any provision of the Maine Bar Rules.
Opinion
The Commission concludes that with one exception the distribution of the newsletter to non‑clients does not violate any Maine Bar Rule.[1]
Rule 3.9(a) prohibits "any form of public communication containing a false, fraudulent, misleading, or deceptive statement or claim." Nothing in the statement of facts suggests that the newsletter contains any statement or claim that would violate this Rule. All articles in the newsletter were prepared by the law firm distributing it. No explicit statements or claims are made about the firm's competence to handle any particular legal problem of a reader. The descriptions of the firms members participation in recent educational seminars is factual and does nothing more than to suggest that the firm attempts to keep up with new developments in the law-nothing unique to this law firm or particularly newsworthy, to be sure, but not likely to unduly influence the reader in their assessment of the firms legal abilities relative to its competition.
The next question is whether the newsletter is subject to the restrictions of Rule 3.9(f) relative to solicitation activities. While it might be argued that the newsletter is merely what it purports to bea publication intended simply to convey general information of a legal natureit is clear that it is designed to solicit employment for the firm. The admonition that the reader may need to take some action to comply with a change in a regulation, the identification of the individual authors of the articles, and the suggestion that these authors be contacted to discuss the matter more thoroughly, while perhaps subtle is nonetheless a form of solicitation that must stay within the bounds proscribed by Rule 3.9(f).
Neither the newsletters content nor its method of distribution suggests duress, intimidation, or vexatious or harassing conduct. The newsletter is simply sent through the mail and involves no follow up contact by the firm. The reader can simply throw it in the wastebasket without any fear of embarrassing consequences. While the newsletter does suggest that the firm can and will provide legal services for the reader relating to the matters discussed in the newsletter, that in and of itself does not constitute unwarranted suggestions or promises of benefits prohibited by the Rule. Nor can the Commission find in these circumstances an appreciable risk of undue influence by the firm or ill‑considered action by the readers of the newsletter.
The Commission, however, concludes in one respect the newsletter as prepared would violate Rule 3.9(e).[2] Although the firm apparently has offices in only one state,[3] it appears to serve clients in several states and does not confine its newsletter to matters of federal or its home state law. Case law in several state jurisdictions is discussed and analyzed. The Commission concludes that under the circumstances the newsletter should describe the jurisdictional limitations of the lawyers whose names appear in the publication.
Footnotes
[1] The facts do not indicate if the lawyers in the firm are licensed to practice in Maine. Consequently, this opinion need not address the question of whether the distribution of such a newsletter to Maine citizens by a lawyer or law firm which is not licensed to practice law in the State of Maine constitutes the unauthorized practice of law under 4 Maine Revised Statutes Annotated § 807, a question which in any event this Commission has no authority to answer.
[2] Rule 3.9(e) is as follows: Multi‑Jurisdictional Disclosure. A multi‑jurisdictional partnership shall disclose, in all public communications containing the names of lawyers affiliated with it, jurisdictional limitations of those lawyers not licensed to practice in the jurisdiction in which the communication is published.
[3] The facts do not indicate whether the firm is a partnership, professional corporation or otherwise. The Commission does not construe Rule 3.9(e) to mean only those firms that are technically partnerships. The prohibition must have been intended to apply to any association offering legal services to the public no matter what form the association takes.
Enduring Ethics Opinion
Enduring Ethics Opinion #85 [April 2015]
Opinion #86. Firm Name Including "Of Counsel"
Issued by the Professional Ethics Commission
Date Issued: August 31, 1988
Question
Lawyer B asks whether it is permissible under the Maine Bar Rules for him to call his law firm ?A and B? under the following circumstances. Lawyer A, who has practiced law for 50 years in a small town, is planning on cutting down his activities and no longer wishes to run his own law office. Lawyer B has been practicing law by himself in that town. Lawyer A has agreed to become ?of counsel? to Lawyer B?s law firm and to be available for consultation on a regular basis at the office of Lawyer B. Under these circumstances, Lawyer B asks whether he may call his law firm ?A and B.?
Opinion
In determining whether a firm name is permissible under the Rules, the Professional Ethics Commission and the Grievance Commission have considered whether a given firm name is misleading or deceptive under Maine Bar Rule 3.9(b). See Grievance Commission Opinion No. 13 (impermissible for a firm to retain in firm name the name of a former member of the firm who has withdrawn from the firm to become a public official); Grievance Commission Opinion No. 14 (impermissible for two lawyers who have separate practices and offices in separate towns and who do not accept full partnership liability to use a joint letterhead, captioned, ?Law Associates?); Professional Ethics Commission Opinion No. 77 (permissible for a firm to retain a deceased partner?s name in the firm?s business title without indication that the named lawyer is deceased).
Under the circumstances presented by this inquiry, the firm name, ?A and B,? suggests that the relationship between Lawyers A and B is more than an office‑sharing arrangement; that to the extent that Lawyer A is practicing law, he is practicing law in conjunction with Lawyer B; that Lawyers A and B consult with each other on a continuing basis and otherwise cooperate with each other; and that Lawyers A and B share some significant level of mutual responsibility in connection with providing professional services to clients of the firm.
If all of these factors constitute the fact of the relationship between Lawyers A and B, the Commission concludes that under the circumstances of this inquiry, it would not be misleading or deceptive and would, therefore, be permissible for Lawyers A and B to call their law firm, ? A and B.? The Commission further concludes that a consequence of the use of that firm name and that relationship between Lawyers A and B is that the clients of each of them would be considered clients of the other for all purposes of the Maine Bar Rules, including those provisions respecting the maintenance of client confidences and secrets and avoidance of conflicts of interest. See Maine Bar Rule 3.4(k).
One member of the Commission would find that the proposed firm designation violates Rule 3.9(b)(3). This opinion silently overrules Opinion No. 14 which declined to approve the use of the former name ?Law Associates? by attorneys who, like A, were unwilling to assume the full responsibility of partnership status. It is also forbidden by Rule 7.5 of the A.B.A. Model Rules of Professional Conduct which states that:
(d) Lawyers may state or imply that they practice in a partnership or other organization only when that is the fact.
The present situation is distinguishable from that in which a retiring or deceased partner?s name is retained in the firm name because in the typical case, that name has become identified with a law firm as an institution rather than with the participation of individual members of the firm. In such circumstances, the purpose of the retention is to avoid confusing the public by changing a familiar label. In the present case, the sole purpose of the proposed firm designation is to ?create an unjustified expectation? in violation of Rule 3.9(b)(3) that the semi‑retiring attorney is a partner who is active in the firm as well as being responsible for partnership debts.
Enduring Ethics Opinion
Enduring Ethics Opinion #86 [April 2014]
Opinion #87. Structuring a Privately Operated Lawyer Referral Service
Issued by the Professional Ethics Commission
Date Issued: August 31, 1988
Questions Presented
An attorney is contemplating starting a privately operated lawyer referral service for personal injury claimants. The service would be owned and operated by individual lawyers or law firms selected throughout the State. The service would operate either from charges assessed to participating attorneys or from a fee split on referred matters. Clients in need of an attorney to handle a personal injury matter could contact the service and receive the name of one or more attorneys in their area of the State to handle the matter.
Opinion
The proposal is affected by two sections of the Bar Rules.
First, Bar Rule 3.9, governing advertising and solicitation, provides in sub‑section (f)(2) that:
A lawyer shall not compensate, or give anything of value, to a person or organization to recommend or secure his employment by a client, or as a reward for having made a recommendation resulting in his employment by a client, except that he may pay for public communication permitted by these rules and may pay the usual and reasonable fees in dues charged by a lawyer referral service operated, sponsored, or approved by a bar association. (emphasis supplied).
Second, Bar Rule 3.3(d) permits fee division with another lawyer who is neither a partner nor associate of the lawyer only if (a) the client after full disclosure consents to the division, and (b) the total fee charged does not exceed reasonable compensation for all services rendered to the client.
As structured, the proposed service appears to violate both those rules. First, Rule 3.9(f)(2) expressly prohibits a lawyer from paying a fee to anyone to recommend his/her services, except a usual and reasonable fee charged by a ?bar association? referral service. While the Rules do not define the term ?bar association referral service,? the ordinary meaning of that term would limit it to such types of associations as existed at the time of the adoption of the rules and presumably were within the contemplation of the draftsmen. Plainly, a privately operated organization consisting of a limited number of select members would not qualify as a ?bar association referral service? within the ordinary meaning of that term. We know of no basis to argue that such an entity constitutes a ?bar association? service.
A review of decisions from other jurisdictions reveals no decisions directly on point. That lack of guidance results from the fact that the provisions of both the Model Code of Professional Responsibility and the Model Rules of Professional Conduct contain limitations on participation on referral services that are materially different from those in the Maine Bar Rules.[1] Maine?s Rule is more limited than the provisions of either the Model Code or Model Rules.
Nonetheless, in all cases where the more flexible provisions of the Model Code and Model Rules have been interpreted, such interpretations have narrowly construed the provisions regarding participating in such services. ABA Committee on Ethics and Professional Responsibility. Informal Opinion 85‑1510 (2/16/85) and Informal Opinion 85‑1512 (3/26/85); Bar Association of Nassau County, N.Y., Committee on Professional Ethics, Opinion 84‑1 (2/84); So. Carolina Bar Ethics Advisory Commission, Opinion 86‑13(b) (10/9/86); D.C. Bar Committee on Legal Ethics, Opinion 170 (4/15/86); Alabama State Bar Disciplinary Commission, Opinion 86‑78 (8/14/86); California State Bar Standing Committee on Professional Responsibility and Conduct, Formal Opinion 1986‑90 (11/5/86). We conclude, therefore, that the provisions of Rule 3.9(f)(2) do not permit participation in the service as proposed.
In addition, Rule 3.3(d) prohibits fee division, unless expressly consented to by the client. Absent such conduct, the proposed referral service could not be funded by a sharing of fees with the referring organization.
In view of the fact that there may be alternate ways to structure such a private arrangement, we expressly limit this opinion to the proposal as presented.
Footnote
[1] The Model Code in DR2‑103(c) permits participating and the payment of a referral fee to bar association services, public defender programs and other non‑profit or for‑profit programs meeting specifically defined criteria. Model Rule 7.2 permits the payment of ?usual charges? to participate in a not‑for‑profit lawyer referral service or other legal service operation.
Enduring Ethics Opinion
Opinion #88. Disclosure of Unsolicited Communication Between Client and Member of an Administrative Tribunal
Issued by the Professional Ethics Commission
Date Issued: August 31, 1988
Question
Pursuant to Maine Bar Rule 11(c)(1), Bar Counsel has requested an advisory opinion as to whether the Maine Bar Rules require a lawyer to disclose information concerning a letter which the lawyer?s client received from a member of an administrative tribunal during the course of a hearing under the Maine Administrative Procedure Act. The hearing is being conducted pursuant to 5 M.R.S.A. §9051 and is being prosecuted by an assistant attorney general. The lawyer is defending the client in those proceedings. During the course of those hearings, the lawyer?s client received a wholly unsolicited letter from a member of the adjudicatory tribunal hearing the case. The board member?s letter expressed sympathy and understanding of the client?s problem and reflected significant disposition in the client?s favor. The client has read the letter to the lawyer over the telephone, but the lawyer has not seen the letter. The question presented is whether the Maine Bar Rules require the lawyer to inform opposing counsel (an assistant attorney general) of the letter.
Opinion
The lawyer in this situation is presented with a most troublesome dilemma. As an officer of the court, the lawyer must be inclined towards disclosure of the letter, lest the integrity of the adjudicative proceeding be tainted and undermined. On the other hand, the lawyer must be mindful of his responsibility to represent the interests of his client and to maintain inviolate the confidences of his client. Construing the Bar Rules in light of these conflicting loyalties, the Commission concludes that, under the particular circumstances presented here, the Bar Rules do not require the lawyer to disclose his client?s receipt of the letter in question.
Since the lawyer learned of the letter from his client during the course of the attorney‑client professional relationship, the first issue to be addressed is whether that information is a ?confidence or secret? of the client under Rule 3.6(l). Rule 3.6(l)(5) defines a client ?secret? as ?information gained in the professional relationship . . . the disclosure of which would be embarrassing or detrimental to the client.? Since disclosure of the client?s receipt of the letter might result in the disqualification of a tribunal member favorably disposed to the client, such disclosure would in that sense be ?detrimental? to the client. Accordingly, the Commission concludes that the lawyer?s information concerning the letter is a ?secret? of the client within the meaning of Rule 3.6(l).[1]
Rule 3.6(l) concerns the obligations of a lawyer with respect to confidences and secrets of his client. In relevant part, Rule 3.6(l)(1) provides:
Except as permitted by these rules or as required by law or order of court, a lawyer shall not, without the informed written consent of the client, knowingly reveal a confidence or secret of his client [or] use such a confidence or secret to the disadvantage of his client. . . .
Rule 3.6(l) thus prohibits disclosure by the lawyer of information concerning his client?s receipt of the letter unless, as provided by that rule, ?disclosure is required by law or by order of court.? There being no court order involved here, the issue then is whether disclosure is ?required by law.? Rule 3.6(l)(1). Since the Bar Rules have been promulgated by the Law Court, the words ?required by law,? as used in Rule 3.6(l)(1), are construed as including any applicable requirements of the Bar Rules. The issue to be decided, therefore, is whether the Bar Rules require the lawyer to disclose the client?s ?secret? concerning the client?s receipt of the letter in question.
Had the lawyer or his client initiated or solicited the letter from the tribunal member, the lawyer would be required by Rule 3.7(h)(2) to disclose his client?s receipt of the letter. That Rule prohibits lawyers from communicating, directly or indirectly, ex parte, with judges or tribunals with respect to the merits of a case. Here, however, the lawyer and his client have not engaged in such conduct because the letter was wholly unsolicited by either the lawyer or his client. The Commission, therefore, concludes that, on the facts presented here, Rule 3.7(h)(2) does not require the lawyer to disclose his client?s receipt of the letter in question. Nor is disclosure required by Rule 3.6(c) absent evidence that the client has perpetrated a fraud on any person or tribunal.
Other provisions of the Bar Rules require lawyers to disclose misconduct of jurors (Rule 3.7(f)(3)), and to disclose unprivileged information concerning misconduct of judges (upon proper request of an investigating tribunal). Rule 3.2(e)(2). The Bar Rules, however, contain no comparable provision concerning disclosure of misconduct of members of administrative tribunals. Indeed, as noted above, the Bar Rules do not require a lawyer to disclose misconduct of a judge except upon proper request of an investigating tribunal. Rule 3.2(e)(2). Accordingly, even though it be assumed, for purposes of this opinion, that the tribunal member?s sending of the letter constitutes ?misconduct? by that member of the tribunal (Title 5 M.R.S.A. § 9055(1) prohibits certain ex parte communications by members of administrative tribunals), disclosure of such misconduct is not required by the Bar Rules.
Finally, the Commission has considered the applicability of Bar Rule 3.2(f)(4), which prohibits a lawyer from engaging in ?conduct prejudicial to the administration of justice.? It can be persuasively argued that unless the client?s receipt of the letter is disclosed to opposing counsel, the lawyer and his client will be the beneficiaries of an unfair unilateral advantage; the tribunal?s processes and adjudication will be tainted and suspect; and justice would thereby be prejudiced. Notwithstanding the force of that argument, the Commission for the following reasons is unwilling to read into the general (conduct prejudicial to the administration of justice) provision a requirement that the lawyer disclose his client?s wholly unsolicited receipt of the letter in question.
The obligation of counsel to hold inviolate client confidences and secrets is a principle fundamental and essential to the attorney‑client relationship. In balancing the conflicting obligations of counsel to his client and to refrain from conduct prejudicial to the administration of justice, the former obligation is not insubstantial. In recognition of the importance of that obligation, limitations on that obligation have been cast, both in the Bar Rules and in the formulation of the scope of the attorney‑client privilege, as exceptions to the general rule of non‑disclosure. Given the importance of the lawyer?s obligation to maintain inviolate client confidences and secrets and the fact that the Bar Rules contain provisions which expressly require disclosure of client confidences and secrets under specifically defined circumstances, but contain no comparable provisions expressly requiring disclosure of misconduct of members of administrative tribunals, the Commission concludes that it would be inappropriate to construe the general language of Rule 3.2(f)(4) as if it contained that requirement. In other words, while it might well serve the ends of justice to require lawyers to disclose client secrets concerning misconduct of judges or members of administrative tribunals, any such requirements would more appropriately be imposed by way of amendments to the Bar Rules.
The Commission further notes that its conclusion in this matter is consistent with the provisions of the A.B.A. Model Rules of Professional Conduct. Under certain circumstances, A.B.A. Model Rule 8.3(b) requires a lawyer who knows of a judge?s violation of a rule of judicial conduct to inform the appropriate authority, but that requirement is limited by A.B.A. Model Rule 8.3(c) which provides that such disclosure is not required if doing so would require disclosure of confidential client information otherwise protected by A.B.A. Model Rule 1.6. The Comment to A.B.A. Model Rule 8.3 goes on to state that ?[a] report about misconduct is not required where it would involve violation of Rule 1.6 [confidential client information]. However, a lawyer should encourage a client to consent to disclosure where prosecution would not substantially prejudice the client?s interests.? The A.B.A. Model Rules thus support the client?s right to insist that his lawyer not disclose judicial misconduct where the lawyer?s knowledge of that misconduct was obtained in connection with the lawyer?s representation of the client and where such disclosure would be disadvantageous to the client.
For all the foregoing reasons, the Commission concludes that under the specific facts presented by this inquiry, the Maine Bar Rules do not require the lawyer to disclose to opposing counsel information concerning the lawyer?s client?s receipt of the wholly unsolicited letter from the member of the tribunal. At the same time, however, the Commission concludes that the lawyer should counsel his client to refrain from responding to the letter from the tribunal member or from otherwise engaging in ex parte communication with the tribunal. Any such response or communication would implicate the provisions of Rule 3.7(h)(2).
Footnote
[1] Information respecting the letter may also constitute a client ?confidence? under Rule 3.6 (l)(5).
Enduring Ethics Opinion
Opinion #89. Drafting Complaint Signed by Pro Se Client
Issued by the Professional Ethics Commission
Date Issued: August 31, 1988
Question
The Grievance Commission has requested an advisory opinion as to whether an attorney acted unethically under the following circumstances. The attorney in question was consulted by a woman regarding the possibility of initiating litigation alleging discrimination by her former employer. Although the claimant?s complaint had been denied by the Human Rights Commission, the attorney believed that her claim was not frivolous. Indeed, her employer had previously made an offer of settlement. Nevertheless, the attorney declined to accept the case because he felt that it could be difficult to prove and that the claimant would not be an easy person to work with. He, therefore, recommended other counsel and urged her to file her complaint promptly to avoid any problem with the statute of limitations.
The claimant returned in a week reporting that she had been unable to find other counsel. She was distressed that her claim might be barred by the statute of limitations. The attorney again declined to undertake the representation, but agreed for a fee to prepare a complaint which the claimant could sign herself and file to protect her rights. Subsequently the propriety of the attorney?s actions were questioned by a Superior Court Justice. The attorney then requested an opinion from the Grievance Commission as to whether he had in any respect acted unethically. The Grievance Commission has, in turn, asked this Commission pursuant to Bar Rule 11(c)(1) to determine whether any Bar Rule has been violated.[1]
Opinion
It is the opinion of the Commission that, under the circumstances presented, the attorney did not act unethically in agreeing with the client to limit the extent of his representation to the preparation of the complaint. Indeed, if the attorney had declined to prepare the complaint, the action might have been barred by the statute of limitations. There is no suggestion that the complaint, as drafted by the attorney, was frivolous; nor does it appear from the facts presented that the complaint was prepared ?merely to serve to harass or maliciously injure another.? Bar Rule 3.7(a).
Since the lawyer?s representation of the client was limited to preparation of the complaint, the lawyer was not required to sign the complaint or otherwise enter his appearance in court as counsel for the plaintiff, and the plaintiff was entitled to sign the complaint and proceed pro se. At the same time, however, the Commission notes that a lawyer who agrees to represent a client in a limited role such as this remains responsible to the client for assuring that the complaint is adequate and does not violate the requirements of Rule 11 of Maine Rules of Civil Procedure.
Footnote
[1] Since this request comes from the Grievance Commission, not from an individual lawyer, the Professional Ethics Commission?s practice of not opining on past conduct (see Opinion No. 67) is not applicable.
Enduring Ethics Opinion
Opinion #90. Written Communication with Amicus Curiae Regarding Matter in Litigation
Issued by the Professional Ethics Commission
Date Issued: August 31, 1988
Question
The Commission has been asked whether Bar Rule 3 (Code of Professional Responsibility) would be violated if a lawyer were to send each member of the council of a municipality a written communication protesting the legal position taken by the municipality in a brief filed with the Law Court as amicus curiae. The inquiring attorney represents another municipality, which is a party to the appeal in which the amicus brief was filed. The issue argued in the amicus brief concerned the scope of certain municipal regulatory powers. The amicus municipality was and is represented by its general counsel. The amicus municipality?s attorney was furnished with a copy of the proposed communication and asked to forward it to each member of the council. He refused and now takes the position that it would be improper for the inquiring attorney to deliver the communication directly and for him to do so as intermediary.
Opinion
The Commission has concluded that sending such a communication to the council of a municipality in the circumstances presented by the question could violate Bar Rule 3.6(j), which provides:
(j) Communicating with Adverse Party. During the course of his representation of a client, a lawyer shall not communicate or cause another to communicate on the subject of the representation with a party he knows to be represented by a lawyer in that matter unless he has the prior consent of the lawyer representing such other party or is authorized by law to do so.
The Commission?s conclusion that Rule 3.6(j) is applicable in this case is limited to the fact situation presented, which involved a matter in litigation, and the Commission expresses no opinion as to other situations involving communication with a government agency. The Commission?s opinion also does not, for reasons hereafter explained, exclude the possibility that a direct communication with government may be protected by the First Amendment, thus ?authorized by law,? and allowed by the final clause of the Rule.
There is no doubt the proposed communication has occurred during the course of representation of the inquiring lawyer?s client and concerns the subject of the representation. Moreover, it is a communication ?with a party he knows to be represented by a lawyer in that matter,? and the recipient?s lawyer has refused to consent. Although the municipality is but an amicus and thus in one sense is not technically a party to the appeal [4 Am. Jur. 2d ?Amicus Curiae,? Sec. 3, p. 111], the rule has never been limited to litigation and other situations in which the participants are formal parties. The term ?party? in the rule includes any kind of interest in the matter.
The purpose of Rule 3.6(j) has often been explained as the prevention of overreaching and improvident action by one who is temporarily without access to professional advice. [Annotated Code of Professional Responsibility, A.B.F., 1979, pp. 332‑33; Wolfram, Modern Legal Ethics, West, 1986, p. 613; Anno. ?Communication with Party Represented by Counsel as Ground for Disciplining Attorney,? 26 ALR 4th 102, and cases cited therein.] In the classical case that action will take the form of a settlement decision [e.g., In re Mussman?s Case, 286 A.2d 614 (N.H. 1971)], an admission, the disclosure of a confidence, or some other major impairment or alteration of position. It is evident that not all of these risks are significant in the present case. For example, as an amicus with an interest solely in questions of law, the recipient municipality appears to have nothing to settle, nothing to admit and no confidence to disclose. Nonetheless, even though its brief has evidently been filed with the Court, we are unable to say that the risk of an improvident change of position by the municipal legislative body, rushing into action without the benefit of its counsel?s advice, is nonexistent. The rule on its face applies; it is not for this Commission to create exceptions by interpretation.
Similar considerations dictate that we deem communication with the municipal legislative body to be within the scope of the rule. When the party is a corporation or other incorporeal entity, the prohibited contacts have generally been limited to officers and employees who have the authority to commit the entity, either to an agreement or to an admission. [In re FMC Corp., 430 F. Supp. 1108 (S.D.W.Vir. 1977); Anno. ?Right of Attorney to Conduct Ex Parte Interviews with Corporate Party?s Nonmanagement Employees,? 50 ALR 4th 652, and cases cited therein; Wolfram, supra, p. 613; Drinker, Legal Ethics, Columbia Univ. 1953, p. 201.] The legislative body of a municipality would seem to have such authority.
Some commentators have suggested doing away with the restriction on communicating with a represented party entirely when that party is the government. [Leubsdorf, ?Communicating with Another Lawyer?s Client: the Lawyer?s Veto and the Client?s Interests,? 127 U. of Pa. Law Rev. 683.] Others have suggested retaining but limiting the rule in such cases. [Note: ?DR 7‑104 of the Code of Professional Responsibility Applied to the Government `Party?,? 61 Minn. Law Rev. 1007.] Perhaps moved by such considerations, the authors of the Model Rules of Professional Conduct seem to have concluded that a communication with government will be ?authorized by law.? [Comment to Rule 4.2, Communication with Person Represented by Counsel.]
A similar conclusion in the present case, arising from the exception in the Maine Rule for communications ?authorized by law,? arguably could be based on the First Amendment right to petition and comparable state constitutional provisions. Art. 1, Sec. 15 of the Maine Constitution provides, in pertinent part:
The people have a right . . . to request, of either department of the government by petition or remonstrance, redress of their wrongs and grievances.
It is now well established that the power of the courts to regulate attorneys is qualified to a large extent by the First Amendment, presumably including the right to petition [e.g., In re Primus, 436 U.S. 412 (1978)].
There are three reasons why this Commission is unable to conclude that the communication presented to it is authorized by the law of the First Amendment. First, the phrase ?authorized by law? was probably intended to cover communications such as a summons and complaint or a subpoena that must be served upon the party sought, or formal communications with an administrative agency or board, such as a municipal Board of Appeals, that has the general assistance, and on occasion the representation, of counsel in all its activities. Second, the Commission is not authorized to opine on issues of constitutional law. Third, in the present case the First Amendment may not be applicable, since the inquiring attorney was acting for his client, which is a municipality and as such may neither have First Amendment rights nor be able to represent its residents in asserting such rights.
Enduring Ethics Opinion
Opinion #91. Including Designation of Stockholder as Attorney on Business Corporation's Letterhead
Issued by the Professional Ethics Commission
Date Issued: November 16, 1988
Question Presented
Attorney Q is a shareholder in a Maine business corporation that is not a professional corporation. The corporation?s letterhead will list the non‑lawyer shareholder and Attorney Q with the latter including the appellative ?Esq.? after her name. The corporation apparently will offer ?consulting? services with respect to marketing real estate of its customers. The question posed is whether Attorney Q is permitted by the Bar Rules to use ?Esq.? after her name on the corporation letterhead or any of its other promotional literature.
Opinion
The Commission concludes that the attorney is not prohibited from advertising her title as proposed.
The Commission has not been advised by the inquiring attorney as to the precisescope of the services the corporation will be providing but will assume they do not include activities that, if performed by lawyers, would be considered legal services.[1]
Therefore the only question is whether the proposed designation on the letterhead violates Rule 3.9. This Rule regulates advertising only to a very limited degree?it basically prohibits only false, fraudulent, misleading or deceptive statements. For reasons unnecessary to explore in this opinion the use of the anachronistic title ?Esq.? after a person?s name denotes to the public, at least in this state, that he or she is an attorney at law. Thus the designation cannot be considered either false or fraudulent in this case?the person is an attorney. Where the services the corporation is offering to the public do not include rendering legal services, the mere publicizing of a stockholder as an attorney cannot support a conclusion that there is an intent to mislead or deceive the public as to the activities of the corporation, nor that such deception will occur. The Commission sees no distinction between the identification of a stockholder/director as an attorney in the present case from those letterheads and brochures of charitable and non‑profit corporations that similarly identify attorneys on their Board of Directors or Trustees. In either case the mere advertising of the lawyer?s title, for whatever prestige value it may hold, does not violate Rule 3.9.
Footnote
[1] One member of the Commission cannot agree with this assumption and would therefore find that since participation by the lawyer in the organization violates Rule 3.2(a)(2) and 3.3(e) (see Opinions 69 and 79) there is no need to address the question raised by this inquiry.
Enduring Ethics Opinion
Opinion #92. Representation of Client in Which Lawyer Has Limited Partnership Interest
Issued by the Professional Ethics Commission
Date Issued: December 22, 1988
Question
A law firm that has a limited partnership interest in its client (a partnership) inquires if Maine Bar Rule 3.7(c) prohibits the law firm from representing that client as a plaintiff in litigation, the outcome of which would impact the value of that interest positively. The law firm?s limited partnership interest in the client is a less than two percent interest.
Opinion
The law firm has informed the Commission that it has independently satisfied itself that it has complied with the requirements of Rules 3.6(i) and 3.4(f). The question presented therefore concerns only the applicability of Rule 3.7(c). The implications of the provisions of Rules 3.6(i) and 3.4(f) as well as the implications of the provisions of 31 M.R.S.A. §154 are beyond the scope of this advisory opinion. Rule 3.7(c) provides:
(c) Interest in Litigation. A lawyer shall not acquire a proprietary interest in the cause of action or subject matter of litigation he is conducting for a client, except that he may:
(1) Assert a lien granted by law against the proceeds of such action or litigation to secure his fee or expenses. This paragraph does not authorize an attorney to assert a lien on a client?s file in order to secure payment of his fee. The assertion of such a lien (if any exists) is improper; and
(2) Contract with a client for a reasonable contingent fee as provided in Rule 8.
While the particular circumstances of this or any other specific case will be determinative, the Commission generally construes Rule 3.7(c) in the context of the question presented as follows. It seems clear that under certain circumstances, a lawyer?s acquisition of an interest in his client would come within the scope of Rule 3.7(c). For example, if a lawyer, with a view towards contemplated litigation on behalf of his client were to acquire an interest in the client for the purpose of benefitting from the enhanced value of that interest as the result of that litigation, the provisions of Rule 3.7(c) would be implicated. On the other hand, the Commission believes that Rule 3.7(c) does not extend so broadly as to prohibit a lawyer who has an interest in his client from representing that client in litigation provided the lawyer?s interest was acquired for reasons independent of and apart from any consideration of litigation which might thereafter be contemplated.
While the Commission believes that the latter situation is beyond the scope of Rule 3.7(c), the Commission underscores the necessity in that situation for scrupulous compliance with the ?full disclosure? and ?informed written consent of the client? requirements of Rule 3.4(f).
Enduring Ethics Opinion
Opinion #93. Requesting Release of Medical Records from Adverse Party Represented by Counsel
Issued by the Professional Ethics Commission
Date Issued: February 15, 1989
Question
The question presented is whether an employer?s attorney would violate Rule 3.6(j) of the Maine Code of Professional Responsibility if the attorney made a request directly to an employee for the release of medical records, in accordance with the provisions of Title 39 M.R.S.A. Sec. 52‑A, knowing that the employee is represented in the matter by an attorney.
Opinion
Section 52‑A provides that an employee who makes a claim for compensation ?shall upon request by the employer, execute a certificate . . . ? for the release of medical records. As amended by P.L. 1987, c. 559, sec. 21, the statute further imposes sanctions upon an employee ?if he fails to execute such a certificate within 20 days after receiving a request made by certified mail, return receipt requested. . . .? To invoke the sanctions in the event of non‑compliance, the request must contain a notice to the employee that if he fails to execute the certificate within 20 days after receiving the request the statutory sanctions will apply.
The concern raised by the present inquiry stems from the directive of Rule 3.6(j), which prohibits a lawyer during the course of his representation of a client from communicating or causing another to communicate ?on the subject of the representation with a party he knows to be represented by a lawyer in that matter unless he has the prior consent of the lawyer representing such other party or is authorized by law to do so.? The rule thus effectively mandates that all communication with an opposing party must occur exclusively through counsel, absent the applicability of one of the stated exceptions.
Section 52‑A, as amended, expressly commands that the request for execution of the certificate be made by certified mail, return receipt requested, upon the employee. This language constitutes a clear directive that the employee, and not the employee?s lawyer, personally receive the communication. The requirement that the communication be personally received makes it ?authorized by law.?
A word of caution remains in order, however, in that the mere fact that direct communication is authorized by statute in no way detracts from the fundamental application of Rule 3.6(j) insofar as the rule continues to require that any communication concerning the subject matter of the representation involve opposing counsel. To comply with the rule, counsel for the employer in these circumstances must mail a copy of the certificate request to the employee?s lawyer, if the employee is known to be represented, at the same time that it is sent to the employee. The logic of this application of the rule is particularly compelling given the severe potential consequences to the employee?s claim in the event of non‑compliance, and the fact that the current prescribed form for the certificate request (WCC‑220 Rev. 5/88) contains no admonition to the employee to consult his attorney concerning whether or not to comply.
Enduring Ethics Opinion
Opinion #94. Communication with an Employee or Official of a Municipality
Issued by the Professional Ethics Commission
Date Issued: February 24, 1989
Question
The Commission has been asked to supplement its recently issued Opinion No. 90 by responding to the following questions:
Will any communication from an attorney to an employee or official of a municipality concerning pending litigation in which the municipality is represented by counsel violate Bar Rule 3.6(j)?
Will any direct communication from a lawyer to an employee or an official of a municipality concerning the business of the municipality, but not pending litigation, violate Bar Rule 3.6(j) when the municipality has appointed a municipal attorney, either salaried or an independent contractor?
The Commission has also been asked to express an opinion on the conduct of the municipal attorney involved in Opinion No. 90 in refusing to forward a communication from another attorney directed to his client. Because this is a request for an opinion on past conduct of someone other than the inquiring attorney, the Commission declines to respond for the reason stated in its Opinion No. 67.
Opinion
Question No. 1: Litigation Pending.
It seems that the ancestor of Bar Rule 3.6(j) was designed with individual clients primarily in mind. The application of the rule to incorporeal entity clients is complicated by the need to determine who will be deemed to represent the entity for purposes of the rule while allowing informal access to information. According to Drinker:
?His [the lawyer?s] duty not to deal directly with one represented by counsel does not apply to the interviewing of witnesses for the other party. . . . But Canon 9 probably precludes interviews of managing employees of a corporation having authority to bind it.? Drinker, Legal Ethics, Columbia University Press, 1953, p. 201.
Opinion No. 90 observed that most courts do not read disciplinary rules like Maine?s Bar Rule 3.6(j) as barring communication with all employees of an incorporeal entity when the entity, and not its employees, is the represented party. For all practical purposes most of the employees are like third party witnesses.
The decisions are not abundant, and they vary somewhat in the descriptive language used to distinguish between employees who will be treated as the alter‑ego of a corporate party and employees who will be treated as non‑party witnesses. Thus, one case has adopted a so‑called control group test, forbidding interviews with employees who are either responsible for making final decisions or have advisory roles such that final decisions are not made without reliance on their advice or opinions. Fair Automotive Repair, Inc. v. Car‑X Service Systems, Inc., 471 N.E.2d 554 (Ill. App. 1984). Another case formulated the rule as barring interviews with employees who have the right to speak for and bind the corporation. Wright v. Group Health Hospital, 691 P.2d 564 (Wash. 1984). In still another case, without stating a general rule, the Court barred interviews with the defendant?s President, the Chairman of the Board, and certain designated Plant Managers. Re FMC Corp., 430 F. Supp. 1108 (S.D. W. Va. 1977).
Some opinions, e.g. FMC Corp. in which the conduct of government counsel was under attack, mention with approval the precaution of identifying the interviewing attorney and disclosing the purpose of the interview. It is not clear that any of these steps have been regarded as essential. In none of these cases did the Court have a disciplinary issue before it. All involved attempts to invoke the Court?s power to control its own proceedings.
The overwhelming majority of advisory opinions from commissions like this one in other states holds that communication with non‑managerial employees of a corporate defendant is permissible, whether or not the subject of the communication is a matter in litigation. 57 Mich. St. B.J. 325, Informal Op. 266; 57 Mich. St. B.J. 310, Informal Op. 70 (O. Maru, Dig. B.A. Ethics Opinion[1] 11509); Md. Opinions, Informal Op. 78‑27 (1978) (Maru 11356); San Fran. B.A., Informal Op. 1973‑4 (Maru 10662); L.A. City, Op. 369 (1977) (Maru 10562); L.A. City, Informal Op. 1966‑6 (Maru 7832); 47 N.Y. St. B.J. 526, Op. 404 (1975) (Maru 9164); Alaska Op. 71‑1 (1971) (Maru 7473); 24 Or. St. B. Bull. 8, Op. 134 (1963) (Maru 3970); N.C. St. B. 97, Op. 184 (1956) (Maru 3208); N.C. St. B. 80, Op. 97 (1952) (Maru 3121); N.Y. City 350, Op. 613 (1942) (Maru 2769); N.Y. City 175, Op. 331 (1935) (Maru 2487); 1965 N.Y. Co. Y.B. 262, Op. 528 (Maru 2144); 36 Mich. St. B.J. 181, Op. 141 (1951) (Maru 1315); 3 Advoc. 3, Op. 21 (Idaho 1960) (Maru 845); 31 L.A. B. Bull. 267, Op. 234 (L.A. City B.A. 1956) (Maru 477); ABA Comm. on Ethics and Prof. Resp., Formal Op. 117 (1934); ABA Comm. on Ethics and Prof. Resp., Informal Op. 1377; ABA Comm. on Ethics and Prof. Resp., Informal Op. 1410.
None of these opinions describe a precise line between employees who may be interviewed and those who may not. Most of them use words such as clerks, manager, managerial, drivers, and the like to describe the employees who may or may not be interviewed. Only a few attempt to generalize. A 1977 Los Angeles County opinion (Op. 369, 11/23/77, Maru 10562) identified the following three factors as establishing that an employee would be equated with the corporation for purposes of the contact rule: 1) authority to negotiate or control the corporation?s decision on litigation; 2) authority to make an admission binding on the corporation; and, 3) access to confidential corporate information. In a slightly different vein, Alaska Opinion 71‑1, referring to a matter in litigation between a citizen and a government entity, would permit interviews with employees not ?representing? the entity ?in matters relating to the controversial matter.? ABA Inf. Opinions 1377 and 1410, the first dealing with a municipal corporation, the second with a business corporation, rest a distinction between permitted and prohibited contacts on whether the employees are able to ?commit the corporation because of their authority as corporate officers or employees or for some other reason the law cloaks them with authority.? (ABA Inf. Op. 1410.)
The reasoning common to these myriad opinions is that the application of rules like Bar Rule 3.6(j) to a corporate (or government) party should be consistent with the purpose of the rule. According to C. Wolfram, Modern Legal Ethics, 1986, p. 613, that is:
to prevent improvident settlements and similarly major capitulations of legal position on the part of a momentarily uncounseled, but represented, party and to enable the corporation?s lawyer to maintain an effective lawyer‑client relationship with members of management.
The author would therefore prohibit contact with officials who have ?the legal power to bind the corporation in the matter? and also with those ?who are responsible for implementing the advice of the corporation?s lawyer.?
The Commission concurs in the principle underlying these decisions. There is no reason to inhibit counsel from communicating, investigating the facts, and preparing for trial, except to protect the other side from over‑reaching. Unfortunately none of the formulae advanced by courts, commissions or commentators are self‑executing. It will be no easier to identify a corporate or municipal officer with power ?to bind? or ?to commit? the corporation or municipality, or to be confident that an official lacks such power, when an attorney is trying to comply with Rule 3.6(j) than on any other occasion. Even if this Commission were empowered to opine on issues of law, it would be unable to pronounce one rule, or a reasonable number of rules, controlling all the situations within the scope of the question.
If a business corporation were involved the question would be one of agency; does the employee have express, implied or apparent authority to effect an improvident settlement or similar major capitulation of the client?s legal position? Each case would call for an independent decision on its own facts. No one municipal official, however, generally has the power to do these things. A settlement or a similar major capitulation ordinarily requires action by the council or other legislative body. 56 Am. Jur. 2d Municipal Corporations Sec. 811 (1971). The doctrine of apparent authority is not pertinent, since the municipality will almost never be estopped to deny the authority of someone purporting to act for it, other than counsel who have entered an appearance. Id. Sec. 528. It could, therefore, be argued that even in litigated matters direct communication between an attorney and officials of a represented municipal party should not be forbidden by the Bar Rules unless the attorney is addressing the legislative body in circumstances in which binding action without consulting the municipal attorney is a real possibility.
The other policy Wolfram identifies as underlying the rule gives us pause, however, although we have some difficulty reducing its implications to concrete terms. That is the objective of enabling the attorney for an incorporeal entity to maintain an effective attorney‑client relationship. Wolfram?s suggestion that this policy precludes opposing counsel from direct contact with employees who are ?responsible for implementing the advice of the corporation?s lawyer? is unacceptable, because it bars contact with an indeterminate and potentially unlimited class of employees.
We prefer a more explicit description that should protect the legitimate interests of a municipality. We therefore conclude that Rule 3.6(j) will bar contact between counsel representing a party opposed to the municipality in a litigated matter and those officials of the municipality who have the responsibility of making decisions on the litigation and matters directly related to it.[2] We conclude that the Rule will also bar contact with those other officials, if any, who have the responsibility of communicating municipal policy and decisions to its attorney, receiving the attorney?s advice in the first instance, and directing the work of the municipality?s staff in preparing for litigation. We do not anticipate that this class will invariably include the employees whose conduct is involved in the litigation. They are witnesses as well as employees, subject to being interviewed, unless they are in the category of officials who will be deemed to represent the municipality or unless they are separately represented by counsel in the matter.[See, e.g., N.Y. City 175 (Op. 331, 2/28/35) Maru 2487] We recognize that a municipality could resort to merely colorable assignments of responsibility to block access to its employees, but we think that is unlikely since the municipality, or any other party presumably may direct its employees not to communicate with opposing counsel. In any event that problem may be reserved until it arises.
The Rule is also not violated when the nature of the communication is such as to qualify it as a communication ?authorized by law.? We will not attempt to exhaust this category. Some of these communications are, however, necessitated by the litigation itself, such as summonses and other formal documents that require service upon a party for their efficacy.
Question No. 2: Litigation Not Pending.
Rule 3.6(j) cannot be invoked to inhibit communication by a lawyer unless the lawyer is in ?the course of . . . representation of a client,? the communication concerns ?the subject of the representation,? and the lawyer knows that the recipient is ?a party? who is ?represented by a lawyer in that matter.? Moreover, communications ?authorized by law? are not precluded even if all these conditions otherwise exist. With no interpretive gloss, it is clear that Bar Rule 3.6(j) is not violated by all direct communications from a lawyer to a municipal official or employee about municipal business. Thus, the short answer to the second question is no.
We conclude that, unless the subject of a communication is actually in litigation, communications with government officers and employees, state or local, on behalf of a client will not violate Rule 3.6(j) unless the attorney initiating the communication is on notice that counsel for the municipality has undertaken to represent it in connection with the particular matter in question. Even when the attorney is on notice, the ban extends only to employees with whom communication would be forbidden if the matter were in litigation, as described in response to Question 1.
Any other rule would make the conduct of municipal business unreasonably cumbersome and would greatly increase its costs. Rule 3.6(j) is aimed at preventing overreaching by lawyers who might take advantage of the absence of an opponent?s counsel to effect a major capitulation. That risk is quite low when government agencies are involved because of the limited authority of administrators to bind the agency to a major capitulation. It would appear to be minimal when the matter has not reached the stage of referral to counsel for the agency or municipality.
Concurrence
One member of the Commission, although concurring in the result, would add the following comment.
In Opinion No. 90, the Commission recognized, but was not required to decide, whether rights asserted under the State or Federal Constitutions might constitute exceptions to the prohibitions contained in Rule 3.6(j). It is appropriate to note that the same considerations might give rise to such an exception with respect to the current inquiry, see C. Wolfram, Modern Legal Ethics, 1986, p. 615, n. 59. This is, as in Opinion No. 90, an issue which need not be decided, on the facts before us.
Footnotes
[1] Hereafter cited as Maru.
[2] Some opinions suggest that capacity to make an extra‑judicial statement that will be allowed in evidence as the admission of a party will place an employee out of bounds to opposing counsel. This class of employees is so broad and so ill defined that we decline to adopt such a criterion for government parties. Employees who can make an ?admission? that will be incontestable as a matter of law, a very rare case when the party is an agency of government, are intended to be included in the classes described in the text.
Enduring Ethics Opinion
Enduring Ethics Opinion #94 [February 2013]
Opinion #95. Pre-settlement Negotiation of Statutory Attorney's Fees Claims
Issued by the Professional Ethics Commission
Date Issued: March 13, 1989
Question
In Opinion No. 17, issued on January 15, 1981, the Grievance Commission of the Overseers of the Bar[1] determined that it would be unethical for plaintiffs? counsel to negotiate a settlement of plaintiffs? statutory claim for attorney?s fees with the defendant prior to or simultaneous with settlement of the underlying action. On April 21, 1986, the United States Supreme Court decided the case of Evans v. Jeff D., 475 U.S. 717 (1986), in which it held that, with regard to the settlement of claims for attorney?s fees pursuant to section 1988 of the Federal Civil Rights Act, 42 U.S.C. § 1983, et seq., it was not illegal for settlement discussions to occur prior to or simultaneous with the resolution of the underlying claim. In reaching this conclusion, the Supreme Court cited, but did not adopt the reasoning of, Opinion No. 17. Id. at 728, n. 15; 737, n. 29. Under these circumstances, Bar Counsel now inquires of the Professional Ethics Commission whether Opinion No. 17 should be reconsidered.
Opinion
In view of the Supreme Court?s action, the Professional Ethics Commission is of the view that settlement discussions of statutory attorney?s fees claims in advance of or simultaneous with settlement of the underlying action should no longer be regarded as unethical in Maine. It is true, of course, that the Supreme Court?s Opinion relates only to the legal question of whether such settlement discussions may occur under section 1988 of the Federal Civil Rights Act, and, as the dissent correctly points out, is unrelated to the question of whether such discussions would violate state or local ethical codes.[2] Id. at 765. Nonetheless, in view of the Supreme Court?s considered conclusion that a prohibition against the pre‑settlement negotiation of attorney?s fees claims might actually impede the purpose of a fee‑shifting statute by reducing the attractiveness of settlement, id. at 732‑38, and in view of the confusion‑of possible constitutional dimension‑which might result if this Commission were to adhere to the position that such discussions remain unethical, the Commission believes that Opinion No. 17 must now be disapproved.
In reaching the opposite conclusion from that of the Supreme Court in Opinion No. 17, the Grievance Commission was careful to point out that none of the provisions of the Maine Code of Professional Responsibility dealt directly with the question of pre‑settlement negotiation of statutory attorney?s fees claims. Grievance Comm?n of Bd. of Bar Overseers, Formal Op. 17, at 1, n. 1 (1982).[3] Thus, in resolving the question, the Commission looked to the decisions of the federal courts under federal fee‑shifting statutes. Prominent among these was Prandini v. National Tea Company, 557 F.2d 1015 (3rd Cir. 1977), which held that discussion of attorney?s fees should be postponed until after settlement of the underlying action. As the Supreme Court observed, however, since the decision in Prandini (and Mendoza v. United States, 623 F.2d 1338 (9th Cir. 1980)),[4] four other Circuits, including the First Circuit, Lazar v. Pierce, 757 F.2d 435 (1st Cir. 1985), had approved the pre‑settlement discussion of statutory attorney?s fees claims, at least in some circumstances. Evans v. Jeff D., supra at 726, n. 11. Thus, the Supreme Court?s decision represents a disapproval of the Prandini approach, as well as that of the other federal courts relied upon in Opinion No. 17.
The Commission is thus left in the position of having to determine whether, in the absence of a specific prohibition in the Code of Professional Responsibility, it should nonetheless adhere to the position of Opinion No. 17 that pre‑settlement negotiations of statutory attorney?s fees claims are unethical, now that the legal underpinnings of that Opinion have been definitively removed.[5] The Commission believes that such adherence would not be warranted for two reasons.
First, and most important, the Commission is persuaded that the Supreme Court is correct that discouraging advance discussion of statutory attorney?s fees claims would actually work against the policy underlying such statutes by reducing the possibility of settlement. The Commission recognizes, as did the Grievance Commission and the Supreme Court, that permitting such discussions to occur does confer on defendants the possibility of driving a wedge between the plaintiff and his lawyer by insisting that the lawyer receive little or no fee if the plaintiff is to obtain substantial or full relief in settlement. On the other hand, plaintiffs? lawyer may also have an unfair advantage under the approach of Opinion No. 17 because defendants are frequently faced with cases where the accruing liability for attorney?s fees is far greater than the total cost of the relief sought, and thus may be induced to settle simply to keep those fees from accruing further if they are prohibited from negotiating on the subject. Thus, the Commission concurs that the maintenance of a general rule prohibiting such discussions is unwise. Rather, the Commission would prefer to leave the question of the reasonableness of the settlement behavior of either party in a case involving statutory attorney?s fees claims to the courts, for resolution on a case‑by‑case basis. See the discussion of the problem of handling vindictive or other unreasonable behavior by either party in such circumstances contained in Evans v. Jeff D., supra at 738‑42. Any attempt by the Commission to set out ground rules for such discussions in advance is very unlikely to be helpful, and much more likely to prove damaging to the interests of justice.
Second, as indicated above, the Commission is well aware that any attempt on its part to impose a rule of ethics contrary to the views of the Supreme Court in this area might raise constitutional questions. The issue is whether the Congress, through the enactment of the attorney?s fees portion of the Federal Civil Rights Act or other fee‑shifting statutes, has preempted state legislatures or ethical bodies from enacting prohibitions which interfere with those statutes. The Supreme Court expressly declined to rule on this point in Evans, because it found that the State of Idaho had not passed a statute or otherwise attempted to interfere with the operation of the attorney?s fees portion of the Federal Civil Rights Act. Id. at 739‑40. Nonetheless, were this Commission to maintain the kind of prohibition set forth in Opinion No. 17, a significant constitutional question would arise. Thus, in view of the fact that the Supreme Judicial Court has not seen fit to impose such a prohibition expressly in the Code of Professional Responsibility, the Commission, for this additional reason, is reluctant to read one into it.
Footnotes
[1] At the time of the promulgation of the Maine Bar Rules, November 1, 1978, the Grievance Commission was entrusted with the responsibility both of resolving disputes as to past behavior of lawyers and of rendering advice as to their future conduct. On February 15, 1985, this latter function was transferred to the newly established Professional Ethics Commission. The determinations of the Grievance Commission prior to 1985 are therefore precedent for Ethics Commission advisory opinions.
[2] Indeed, the dissent expressly encouraged state and local organizations to declare such conduct unethical. Id.
[3] The Opinion notes that the rules most closely related to the question, Rules 3.4(f) and 3.7(c) and (i), ?dealing with the interest of a lawyer in or antagonistic to his client?s interest, are not strictly applicable because counsel in a class action never really has an 'interest' in the client?s cause of action.? Id.
[4] As well as Opinion No. 17, decided on January 15, 1981.
[5] Indeed, the Supreme Court characterized the Opinion as ?bottomed ultimately on Section 1988,? id. at 728, n. 15, and therefore not an opinion on ethics at all.
Enduring Ethics Opinion
Opinion #96. Nonappearance of Attorney at Hearing upon Request or Consent Of Client
Issued by the Professional Ethics Commission
Date Issued: April 15, 1989
Facts
A judge has requested an advisory opinion as to whether an attorney who has entered an appearance on behalf of a client is excused from appearing at a hearing at which the client proposes to represent himself. In the hypothetical case presented, the client appears at the hearing without counsel and states that, by agreement with his attorney, he will present the matter on his own. The Commission has been asked whether the attorney?s failure to either appear or to secure the court?s permission to withdraw as counsel in advance of the hearing constitutes unethical conduct.
Opinion
Some members of the Commission are of the opinion that nothing in the Bar Rules requires that an attorney be present at every stage of the litigation if a client prefers to represent himself. They suggest that since the lawyer acts as his client?s agent, the client can terminate the relationship at any time. See Rule 3.5(b)(2)(iv). It would follow that the client can also limit the attorney?s role as advocate if he chooses provided the restrictions do not result in any violation of the Bar Rules or the rules of court. See, e.g., New York City Bar Ass?n Op. 1987‑2; ABA Inf. Op. 1414 (1978).
Other members of the Commission have suggested that an attorney who fails to attend a scheduled court hearing has in effect, withdrawn from the representation even though his client has directed him not to appear. Bar Rule 3.5(a)(1) states that an attorney may not withdraw from employment without consent of the tribunal where permission is required by the rules of the tribunal. M.R.C.P. Rule 89(a) provides that, once an attorney has entered his appearance, he is not free to withdraw without leave of court. These members would therefore read Rule 3.5(a)(1) as obliging the attorney to obtain leave of court before failing to appear for a court hearing even though his client insists on appearing pro se
Although the Commission was evenly divided on the proper interpretation of Rule 3.5(a)(1) under these circumstances, the question is, in the final analysis, one which the court itself must resolve. Whether an attorney?s failure to attend a court hearing even with the consent of his client would constitute a ?withdrawal? within the meaning of the rule would depend on the facts of the case presented. Moreover, the application of the rule to the facts would involve a legal interpretation of the term ?withdrawal? in M.R.C.P. Rule 89(a) which is beyond the authority of this Commission to give. Since, however, the court in a given case might construe the attorney?s failure to appear as a ?withdrawal,? counsel would be well advised to notify the court and opposing counsel in advance of the hearing that his client will be appearing pro se in any case in which he has been instructed not to appear.
Enduring Ethics Opinion
Opinion #97. Mortgaging Marital Residence to Attorney to Secure Fees in Divorce Case
Issued by the Professional Ethics Commission
Date Issued: May 3, 1989
The Grievance Commission has requested an opinion of the Professional Ethics Commission based upon the following facts:
H and W are married and own a home acquired during the marriage as joint tenants. Divorce proceedings are commenced by W. H retains an attorney, but does not pay an initial fee. Instead, he offers to give his attorney a mortgage on his 1/2 interest in the marital home. W is not aware of this transaction.
Both H and W are seeking physical placement of the children. W is reluctant to agree to a sale of the marital home until there is an order from the Court for primary residence of the children. W resides in the home.
Later, H?s law firm brings an action to force the sale of the home, claiming W is committing waste and not paying for property taxes and insurance.
Questions
Is it a violation of the Code of Professional Responsibility for an attorney to take a security interest in the marital residence to secure the legal fees of a client in a divorce action?
If not, is it a violation of the Code of Professional Responsibility for the attorney to take legal action to force a sale of the residence or otherwise foreclose upon the security interest prior to the rendition of a divorce judgment? After rendition of a divorce judgment?
Discussion
Since the enactment of 19 M.R.S.A. § 722‑A (P.L. 1971, c. 399), virtually all property acquired by parties who are married has become marital property, subject to disposition by the divorce court. Except for property which is within narrowly defined exceptions to the marital property statute, the property of the husband and wife is clearly subject to disposition by the Court in the course of a proceeding for divorce.
Rule 3.7(c) provides:
A lawyer shall not acquire a proprietary interest in the cause of action or subject matter of litigation he is conducting for a client except that he may:
(i) assert a lien granted by law against the proceeds of such action or litigation to secure his fee or expenses . . .
(ii) contract with a client for a reasonable contingent fee as provided in Rule 8.
It is the opinion of the Commission that acquiring a proprietary interest in the marital home in a divorce action would constitute a violation of Rule 3.7(c).
Among the many issues in a contentious divorce, the desire to be awarded a substantial share of the marital real estate is commonly a principal motivation. For either lawyer to obtain a legally cognizable interest in the client?s marital homestead constitutes an interest in the subject matter of litigation under Rule 3.7(c). The provisions of Rule 3.7(c)(i) which authorize a lawyer to ?assert a lien granted by law . . .? are to be read as permitting an attorney to assert a statutory and/or common law charging lien on the proceeds of litigation, see 14 M.R.S.A. § 5006; Stone v. Hyde, 22 Me. 318 (1843). Although we offer no opinions as to what the law is, it does appear to the Commission that such liens do not attach until a final judgment in an action, Averill v. Longfellow, 66 Me. 237 (876); Newbert v. Cunningham, 50 Me. 231 (1863). We do not read this proviso in the Rule as authorizing the consensual contractual creation of a lien between lawyer and client with respect to the marital homestead. Other states have reached varying results, (contrast Mississippi Opinion No. 152 (6/2/88) ABA/BNA Lawyer?s Manual of Professional Conduct Section 901:5108, with Georgia Opinion 86‑7, supra at Section 901:2701). Connecticut has adopted what is essentially a middle ground, holding that although the taking of a mortgage was permissible, the taking of the mortgage was nonetheless subject to the further orders of the Court with respect to the disposition of the property, and that to protect the continued jurisdiction of the Court, the attorney was prohibited from taking any action to dispose of the mortgage to a bona fide purchaser, Connecticut Opinion 87‑3, ABA/BNA Lawyer?s Manual of Professional Conduct, at § 901:2054.
In light of the breadth of the Maine marital property statute and the plain language of Rule 3.7(c), the taking of an interest in the marital property by the attorney inappropriately interjects the interests of the attorney into the issues in the divorce case, creating an unacceptable risk that the judgment of the attorney will be affected by his acquisition of the interest.
For those reasons, we answer the first question by concluding that the taking of a mortgage on the marital homestead would violate the provisions of Rule 3.7(c). In light of the foregoing opinion there appears to be no reason to answer the second question.
Enduring Ethics Opinion
Opinion #98. Allowing Undisbursed Fees Earned to Remain in Client Trust Account
Issued by the Professional Ethics Commission
Date Issued: August 16, 1989
Facts
Attorney A receives a $2,000 advance against fees to commence some legal work on behalf of Client C. Their agreement is that she would charge her time against these funds at a rate of $100 per hour, and the fee is due when earned.
Attorney A performs 20 hours worth of work and writes to Client C informing him of the status of the case, supplying some requested information and informing Client C that she needs an additional $1,000 to continue with the work. Client C never writes back or otherwise responds to Attorney A.
To date, Attorney A has kept the entire original $2,000 in her client trust account.
Questions
Has Attorney A commingled her own funds with her client?s funds by not withdrawing her fees as earned?
If the answer above is yes, what is a reasonable time to make withdrawals of such fees as earned so as to not commingle?
Opinion
Determination of the questions before the Commission requires an interpretation of Maine Bar Rule 3.6(f), ?Preserving Identity of Funds and Property.? This rule directs all lawyers and law firms to place any funds paid by a client, other than retainers and advances for costs and expenses, into ?one or more identifiable accounts.? The rule prohibits any funds ?belonging to the lawyer or law firm? from being deposited in this account, with the following relevant exception, contained in Rule 3.6(f)(1)(ii):
Funds belonging in part to a client and in part presently or potentially to a lawyer or law firm must be deposited therein, but the portion belonging to the lawyer or law firm may be withdrawn when due unless the right to receive it is disputed by the client; in that event, the disputed portion shall not be withdrawn until the dispute is finally resolved.
Thus, unless there is a dispute between the lawyer and the client, Rule 3.6(f)(1)(ii) permits the lawyer or law firm to withdraw fees earned when they are due. In performing such a withdrawal, the lawyer is acting in his or her capacity as trustee for the client, and remains strictly accountable to the client for his or her conduct in administering the account. See Bar Ass?n v. Marshall, 269 Md. 510, 307 A.2d 677 (1973). It is the opinion of the Commission that, as trustee, the lawyer does not have a proprietary interest in the client?s funds, but rather has a claim to those funds representing fees earned, and has the right to disburse those funds to himself or herself. The rule permits, but does not require, the withdrawal of funds belonging to the lawyer when due. Thus, the failure of a lawyer to withdraw money from the trust account when earned does not violate the rule.
While few cases have dealt directly with the issues involved here, the Commission?s conclusion is consistent with the decisions of many courts who have considered the question of commingling. Nearly all the cases involve lawyers who have either deposited the client?s funds in their personal accounts, In re Barron, 246 Ga. 327, 271 S.E.2d 474 (1980); used the client?s trust account for their personal expenses, The Florida Bar v. Padgett, 481 So.2d 919 (Fla. 1986); or who failed to keep an accurate accounting of the client?s money, Louisiana State Bar Ass?n v. Hopkins, 447 So.2d 464 (La. 1985).
None of the above factors are present here, and the Commission?s determination that undisbursed funds for fees earned do not constitute ?funds belonging to the lawyer or law firm? does not conflict with ABA Ethical Consideration 9‑5, which states in part that ?separation of the funds of a client from those of his lawyer not only serves to protect the client but also avoids even the appearance of impropriety.? It is difficult to imagine how simply delaying disbursement of earned fees would create a threat to the client?s funds or the appearance of impropriety.
There are two cases in which courts have implied that leaving earned fees in a client?s trust account violated the rule against commingling. In Wright v. Virginia State Bar, 357 S.E.2d 518 (Va. 1987), the lawyer, Wright, was accused of several ethics code violations. In upholding the commingling convictions of the lower court, the Virginia Supreme Court said that ?between October 1983 and December 1984, Wright routinely permitted his fees to remain in his trust account. He failed to record such amounts on his trust account records and thereby commingled his own funds with those of his clients.? Wright, 357 S.E.2d at 519.
While the Virginia court?s holding seems to contradict the conclusion of the Commission the two cases are actually very different. In Wright, the lawyer was charged with violating a series of Virginia record‑keeping requirements that do not even exist in the Maine Bar Rules. As to the general requirement that the lawyer shall ?maintain complete records of all funds . . . of a client coming into possession of the lawyer,? which is contained in Maine Bar Rule 3.6(f)(2)(iii), there is no evidence of any record‑keeping problems in the present case, and hence the Virginia ruling would not apply.
In a second case, North Carolina State Bar v. Speckman, 360 S.E.2d 129 (N.C. App. 1987), the lawyer deposited a $70,000 settlement check on behalf of his client into his trust account. After paying the client her share of the settlement, the lawyer left his fee in the account and wrote checks on the account to cover his office expenses.
In a somewhat confusing opinion, the court confirmed the conviction for commingling, but implied in its opinion that the lawyer had also deposited additional personal funds in the trust account, something not mentioned in the original recitation of the facts. In its opinion, the court said that ?defendant claims he placed personal funds in his trust account for the sole purpose of making it possible to clear personal injury settlement drafts and checks . . .?, Speckman, 360 S.E.2d at 133. The court went on to hold that the defendant?s motivation was irrelevant to whether he violated the ethics code, apparently basing its conclusion of guilt on the additional funds placed in the account and not on the failure to disburse the fees earned. Even if the court intended to base its conviction on the facts as originally stated, the fact that the lawyer in Speckman had actually written checks for his expenses on the trust account distinguishes it from the present case, where the funds were simply left untouched in the client?s trust account. In either case, therefore, the holding does not apply to the present case.
Because we find that no commingling of funds has occurred in the present case, we see no need to address the issue posed by Question No. 2. However, since there was no evidence of misappropriation of client funds or laxity of record‑keeping, factors which could affect the outcome of a commingling case, we explicitly limit the application of our opinion to the facts presented herein.
Enduring Ethics Opinion
Opinion #99. Collection of Lawyer Referral Service Administration Fee
Issued by the Professional Ethics Commission
Date Issued: September 6, 1989
Question
The Commission has been asked whether a lawyer referral service operated by a bar association may adopt a rule in substance as follows:
?Client will receive a free initial consultation of one‑half hour. Client agrees to pay the LRS a service fee of $15.00 which will be collected and forwarded to the LRS by the panel member. In addition, if the client retains the panel member, he/she agrees to contribute $15.00 to help fund the LRS.?
The inquiring attorney especially invites our attention to Bar Rule 3.3(e). We assume that the phrase ?he/she? in the third sentence refers to the panel member. Thus, the client would pay LRS for a referral and an initial consultation, which the panel member would provide without an additional charge to the client. If a retainer resulted, the panel member would also pay LRS a fee.
Opinion
We conclude that the required fees would not violate Rule 3.3(e) or any other Bar Rule. Rule 3.3(e) prohibits a lawyer from sharing legal fees with a non‑lawyer, subject to exceptions not material here. Collection of the first fee by the panel member is not the sharing of a legal fee with a non‑lawyer, assuming as we do that an incorporated bar association is a non‑lawyer for all relevant purposes under the Bar Rules, since the fee is not the panel member?s to share. The first fee is an administrative fee charged by the referral service, not the lawyer. The lawyer is merely collecting that fee for the referral service. The proposed rule, to which the panel member presumably agrees, provides that the LRS is entitled to this fee.
With respect to the second fee, Bar Rule 3.9(f)(2) expressly permits a lawyer to pay the ?usual and reasonable fees or dues charged by a lawyer referral service operated, sponsored, or approved by a bar association? while prohibiting all forms of compensation to other persons or organizations for recommending the lawyer?s employment by a client. Notwithstanding the inquiring attorney?s reference to Rule 3.3(e), the Commission is of the opinion that this part of the question is governed by Rule 3.9(f)(2). The express permission given by Rule 3.9(f)(2) to continue a common method of making lawyer referral services self‑supporting would be meaningless if the fees it expressly permits were prohibited by the ban on fee splitting in Rule 3.3(e).[1] Based on the language of the proposed rule, the Commission assumes that the second fee would not be charged to the client. The Commission concludes that the second fee is permissible under Rule 3.9(f)(2).
Footnote
[1] The Commission recommends that the referral service modify the description of the first half‑hour consultation as ?free? in light of the administrative fee charged to the client. See Bar Rule 3.9(a) and (b).
Enduring Ethics Opinion
Opinion #100. Threatening Grievance Action to Influence Malpractice Settlement Negotiations
Issued by the Professional Ethics Commission
Date Issued: October 4, 1989
Question
Bar Counsel has requested an opinion from the Commission regarding an attorney?s duty to keep separate the filing of a grievance and a claim of malpractice arising out of the same facts. Attorney A has acquired written documents prepared by Z, his client?s former attorney, which indicate that many of his client?s legal problems were caused by Z?s negligent conduct. As a result, Attorney A believes that his client has a meritorious legal malpractice case against Z and that Rule 3.6(a) may have been violated by Z?s conduct.
In addition to Z?s allegedly negligent conduct, A?s client strongly contends that at least one of the documents executed by Z was fraudulently prepared. The client has indicated that he has no real interest in initiating disciplinary proceedings against Z under the Bar Rules. However, the client has requested Attorney A to negotiate ?in any way possible? with Z to maximize his recovery with respect to his malpractice claim. The client has even implied that A should threaten to file a grievance against Z in the course of negotiating with him.
On the basis of the foregoing facts, Bar Counsel has asked the following questions:
To what extent may an attorney make any reference to the possible, intended or actual filing of a grievance complaint against another attorney in the course of his discussions or negotiations with that attorney (or his counsel) regarding the settlement of a related legal malpractice action against that same attorney?
Does Rule 3.2(e)(1) mandate reporting that attorney?s conduct to the Board, where although the ?reporting attorney? has some doubts in his mind as to the facts supporting the mandatory reporting provisions, his affected client is adamant that those facts do demonstrate potential fraudulent conduct on the part of the attorney? For purposes of this question, the client?s present attorney agrees that if his client?s interpretation of the facts is true, then fraud was committed by the former attorney.
If the answer to question 1 is such that any mention by the present attorney of the potential grievance action in relation to the settlement of the malpractice action is seen as a violation of Rule 3.6(d), then is the present attorney required to withdraw from representation of his client pursuant to Rule 3.5(c)(3)?
Opinion
It is clear that it would be unethical for Attorney A to threaten to present a grievance in order to enhance the chances of a favorable settlement of the malpractice claim against Attorney Z. Bar Rule 3.6(d) provides that:
A lawyer shall not present, or threaten to present, criminal, administrative, or disciplinary charges solely to obtain an advantage in a civil matter.
Indeed, any mention of the possibility of filing a grievance made in the course of the negotiations concerning the malpractice claim would be suspect if it conveyed a subtle inference that a trade‑off might be possible.
In connection with Attorney A?s duty to report Z?s possible misconduct to the Grievance Commission, Rule 3.2(e)(1) states that:
(1) A lawyer possessing unprivileged knowledge of a violation of the Maine Bar Rules that raises a substantial question as to another lawyer?s honesty, trustworthiness, or fitness as a lawyer in other respects shall report such knowledge to a tribunal or other authority empowered to investigate or act upon such violation.
The words ?that raises a substantial question as to another lawyer?s honesty, trustworthiness, or fitness as a lawyer in other respects? were added by amendment to the rules adopted on February 1, 1984. The Advisory Committee Note advises that the purpose of the amendment was to make clear that ?only violations raising a substantial question of professional fitness need to be reported.?[1] The word ?substantial? is said to relate to the seriousness of the possible offense and not to the quantum of evidence of which the lawyer is aware. Ibid. The amendment is nevertheless intended to incorporate the statement contained in ethical consideration E.C. 1‑4 of the A.B.A. Code of Professional Responsibility that a lawyer is obligated to report only that ?which he believes clearly to be in violation of the Disciplinary Rules.? Thus the lawyer?s ?knowledge? of the offense for purposes of Rule 3.2(e)(1) should be based on a substantial degree of certainty and not on rumor or suspicion.
In the present case, Attorney A apparently does not share his client?s conviction that Attorney Z was guilty of fraud. Lacking the requisite ?knowledge? of the violation of the Bar Rules, Attorney A has no obligation to report it. If his client remains adamant, A can instruct him how to file his own grievance with Bar Counsel concerning the alleged fraud.
Finally, the Commission is asked whether the ethical restriction upon mentioning the possibility of filing a grievance in the context of negotiating a settlement of the malpractice claim requires him to withdraw from the case. The answer is simply that A must advise his client that the Bar Rule forbids him to use the threat of filing a grievance as a negotiating tool. If the client nevertheless insists upon using the grievance as a lever, A should advise him that he will not be able to represent him further.
Footnote
[1] The consequences of a failure to report lawyer misconduct can be severe. See, e.g., In re Himmel, 125 Ill.2d 531, N.E.2d 790 (1988) in which an attorney was suspended from practice for one year for failure to report a conversion of client funds by another lawyer.
Enduring Ethics Opinion
Enduring Ethics Opinion #100 [November 2017]
Opinion #101. Referral of Real Estate Transactions by One Attorney-Spouse to the Other
Issued by the Professional Ethics Commission
Date Issued: January 17, 1990
Facts
Lawyer A and Lawyer B are husband and wife and have separate law practices but are located in the same building. Lawyer A is also a shareholder in and a broker for a real estate corporation. From time to time, Lawyer A refers prospective buyers or sellers of real estate to Lawyer B for legal representation in transactions in which he is involved either as a broker or as a lawyer.
Questions Presented
Lawyer B wishes to know whether she is prohibited from representing the buyer or seller in these circumstances, and if not, whether she has any obligation to disclose to the buyer or seller her relationship to Lawyer A. Lawyer B also asks whether the result would be any different if Lawyer A and Lawyer B were to form a partnership.
Opinion
The questions presented by this Request are substantially addressed by two Opinions of the Grievance Commission of the Overseers of the Bar.[1] In Opinion No. 3, the Grievance Commission discussed the problem of the application of the Maine Bar Rules to situations in which two married lawyers were on opposite sides of a matter. In Opinion No. 12, the Grievance Commission addressed, inter alia, the question of the ethical propriety of one lawyer representing both the buyer and seller in a real estate transaction.
In Opinion No. 3, the Grievance Commission concluded that before married spouses could oppose each other in a particular matter, they are required by Rule 3.4(a) to disclose their relationship to their respective clients. Next, the Commission advised that since the independent exercise of professional judgment by each lawyer is very likely to be affected by their relationship, ?the preferred practice? would be for each lawyer to obtain the written consent, pursuant to Rule 3.4(f), of his or her client before accepting employment. Finally, the Commission advised that even if full disclosure is given and written consent may be obtained, it may very well be, depending on the facts of the case, that both lawyers could not accept employment on the opposite sides of a matter because the nature of their relationship would inevitably result in a conflict of interest within the meaning of Rule 3.4(b). Thus, the Commission concluded that ?[a]lthough not necessarily prohibited by the Maine Bar Rules, the representation of differing interests by lawyers who are husband and wife . . . should probably be avoided in most instances.? Grievance Comm?n of Bd. of Bar Overseers, Formal Opinion No. 3 at 4 (1979).
In Opinion No. 12, the Grievance Commission was faced with a series of questions concerning the ethical propriety of a lawyer representing both a buyer of real estate and a bank which is financing the transaction. In the course of its extensive discussion of the issues raised by this situation, the Commission observed the following concerning the propriety of a lawyer representing both the buyer and seller in the transaction, for example, by preparing the deed on behalf of both:
It is, however, doubtful that the seller could be added to the roster of clients in such circumstances. Representation of the seller introduces responsibilities that go beyond preparation of a deed and harbors the distinct possibility of conflict of interest in connection with the title examination. Grievance Comm?n of Bd. of Bar Overseers, Formal Opinion 12 at 6‑7.(footnote omitted).
Thus, representation of a buyer and seller by the same lawyer in a real estate transaction would in all likelihood violate Rule 3.4(b). Moreover, the violation is not likely to be cured by reference to Rule 3.4(d), which authorizes multiple employment when it is ?obvious? that lawyer can ?adequately represent? the interest of each party. As the Commission observed:
The adequate representation that must be obvious is not merely capable representation. It is representation in which the lawyer?s independent professional judgment in behalf of one client is not adversely affected by representation of another client. Formal Opinion 12, supra at 5.
Applying these principles to the questions presented, the Professional Ethics Commission is of the view, first, that if Lawyers A and B are partners, they may not represent both the buyer and seller in a real estate transaction. See Opinion No. 12. If they are not partners, consistent with Opinion No. 3, it is not necessarily prohibited in every case for them to represent both the buyer and seller in a transaction because they are married, provided that the interests of the two lawyers are disclosed and the clients consent, although Opinion No. 3 cautions against such practice.[2] Moreover, it may be that, depending on the facts of an individual case, the interest of Lawyer B in seeing a transaction completed may be strong enough to constitute a conflict of interest within the meaning of Rule 3.4(b) and that it may not be ?obvious? within the meaning of Rule 3.4(d) whether the nature of the transaction is such that Lawyer B can adequately represent a client referred to her by her husband. As the Grievance Commission repeatedly emphasized, each transaction would have to be evaluated on its facts, and the Ethics Commission can do no more in these circumstances than alert the lawyers in question to the dangers presented by the rules.
Footnotes
[1] At the time of the promulgation of the Maine Bar Rules, November 1, 1978, the Grievance Commission was entrusted with the responsibility both of resolving disputes as to past behavior of lawyers and of rendering advice as to their future conduct. On February 15, 1985, this latter function was transferred to the newly‑established Professional Ethics Commission. The determinations of the Grievance Commission prior to 1985 are therefore precedent for Ethics Commission Advisory Opinions.
[2] It makes no difference whether Lawyer A is functioning only as a real estate agent in referring clients to Lawyer B. The ?interests? of Lawyer B which are the subject of Rules 3.4(a), 3.4(b), 3.4(d) and 3.4(f) are implicated in these circumstances by the fact of the marital relation and not by the fact that Lawyer A happens to be a lawyer. In addition, even when functioning as a real estate broker, Lawyer A remains subject to the Maine Bar Rules and must disclose his relationship with Lawyer B when recommending her to clients. See, generally, Grievance Comm?n of Bd. of Bar Overseers, Formal Opinion No. 5.
Enduring Ethics Opinion
Opinion #199. Advising clients concerning Maine?s Medical Marijuana Act
Issued by the Professional Ethics Commission
Date Issued: July 7, 2010
Bar Counsel asks the Commission to render an opinion concerning the general parameters within which an attorney may, consistent with the Maine Rules of Professional Conduct, represent or advise clients under Maine?s new Medical Marijuana Act.
Maine recently enacted legislation permitting the creation of dispensaries for the purpose of providing qualified patients with marijuana for medical treatment. Questions have arisen regarding the role which Maine attorneys may ethically play because of the interplay of Maine?s new law with the Federal prohibition against the distribution of marijuana. This issue has been made more problematic by the guidance, dated October 19, 2009, of the current United States Deputy Attorney General, David W. Ogden. Ogden?s memorandum (?the memorandum?) directs the United States Attorneys:
As a general matter, pursuit of [illegal drug prosecution] priorities should not focus federal resources in your States on individuals whose actions are in clear and unambiguous compliance with existing state laws providing for the medical use of marijuana.
The memorandum, however, makes clear that the Federal law against the distribution of marijuana is still in effect. It recognizes that ?no State can authorize violations of federal law? and that
This guidance regarding resource allegation does not ?legalize? marijuana or provide a legal defense to a violation of federal law, nor is it intended to create any privileges, benefits, or rights, substantive or procedural, enforceable by any individual, party or witness in any administrative, civil or criminal matter.
The issue, then, is whether and how an attorney might act in regards to a client whose intention is to engage in conduct which is permitted by state law and which might not, currently, be prosecuted under federal law, but which nonetheless is a federal crime. Indeed, the memorandum notes that ?the prosecution of commercial enterprises that unlawfully market and sell marijuana for profit continues to be an enforcement priority of the Department? and that nothing therein ?precludes investigation or prosecution where there is a reasonable basis to believe that compliance with state law is being invoked as a pretext for the production or distribution of marijuana for purpose not authorized by state law.?
The ethical framework governing lawyer conduct, the Maine Rules of Professional Conduct, states clearly that:
A lawyer shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent, but a lawyer may discuss the legal consequences of the proposed course of conduct with a client and may counsel or assist a client to make a good faith effort to determine the validity, scope, meaning or application of the law.
M. R. Prof. Conduct 1.2 (e)
Here, the proposed client conduct is known to be a violation of federal criminal law. In those circumstances, the role of the attorney is limited. While attorneys may counsel or assist a client in making good faith efforts to determine the validity, scope, meaning or application of the law, the Rule forbids attorneys from counseling a client to engage in the business or to assist a client in doing so. The limitation is highlighted by the 2009 Comment [9]: to M. R. Prof. Conduct 1.2:
There is a critical distinction between presenting an analysis of legal aspects of questionable conduct and recommending the means by which a crime or fraud might be committed with impunity.
Maine and its sister states may well be in the vanguard regarding the medicinal use and effectiveness of marijuana. However, the Rule which governs attorney conduct does not make a distinction between crimes which are enforced and those which are not. So long as both the federal law and the language of the Rule each remain the same, an attorney needs to perform the analysis required by the Rule and determine whether the particular legal service being requested rises to the level of assistance in violating federal law. It is worth noting that there is no guarantee that, with a change in policy, administration, or resources, the federal law might ultimately be enforced to the chagrin of lawyers whose conduct enabled the dispensaries. Even under the present policy, it is a situation where potential clients may ultimately, if not initially, use the medical dispensary and state law as a pretext for other more lucrative ventures.
Where the line is drawn between permitted and forbidden activities needs to be evaluated on a case by case basis. Bar Counsel has asked for a general opinion regarding the kind of analysis which must be undertaken. We cannot determine which specific actions would run afoul of the ethical rules. We can, however, state that participation in this endeavor by an attorney involves a significant degree of risk which needs to be carefully evaluated.
Enduring Ethics Opinion
Opinion #200. Attorney Serving only as Guardian ad litem: Use of IOLTA Accounts/Working with Non-Lawyer GALs and Parent Coordinators
Issued by the Professional Ethics Commission
Date Issued: August 11, 2010
Attorney X has asked the Professional Ethics Commission two questions concerning her work as a Guardian ad litem (hereinafter GAL).
Is a licensed Maine attorney who serves only as a court-appointed GAL in M.R.S. Title 19-A and Title 22 cases required to utilize an IOLTA account for the GAL fees paid by the parents?
Assume the same fact scenario: Is it permissible for Attorney X to establish a business with non-lawyer GALs and Parent Coordinators if the only professional services delivered to parties are those two distinct services? The business would be limited to GAL and Coordination services and the lawyers would not be identified as lawyers.
This inquiry first requires an analysis as to whether an attorney who serves solely as a court-appointed GAL is performing legal services or is engaged in the practice of law. GALs in Maine are subject to the Maine Rules for Guardians ad Litem, which provide that:
?[T]hese Rules and the accompanying Standards are to be governed and interpreted by application of the principles that a Guardian is a quasi-judicial officer of the Court, and that a Guardian does not act as a member of the Guardian's underlying profession, but rather as a judicial officer, primarily subject to and governed by the Court.?
M.R.Guardians ad Litem I.B.
GALs do not have to be lawyers. CASA certified volunteers and individuals with credentials in various mental health fields may also serve in this role. Even when a GAL?s underlying profession is that of attorney, the Code of Judicial Conduct governs GAL practice rather than the M.R.Prof.Conduct.1 Complaints against GALs are to be referred to the Judge who appointed the GAL (pending cases) or to the Chief Judge of the District Court rather than to the Board of Overseers of the Bar.
Hence, when attorneys in Maine act as GALs, they are not acting as lawyers, and their work falls within the definition of ?law-related services? under M.R.Prof.Conduct 5.7(b).2 Although all attorneys admitted to, or engaging in, the practice of law in Maine are covered by the Maine Rules of Professional Conduct, attorneys are not subject to those Rules when they are performing only law-related services if the provision of law-related services is distinct from the lawyer?s provision of legal services. See M.Bar R. 1(a) & M.R.Prof.Conduct Rule 5.7(a).3
All attorneys registered in Maine are required to certify that they maintain at least one IOLTA trust account. M.Bar R. 6(a)(2)(A)(1). However, an attorney is exempt from this requirement if he or she is not engaged in the private practice of law or holds no client funds other than retainers or advances for costs and expenses. M.Bar R. 6(a)(2)(B)(1) & (6).
Attorney X, although licensed to practice in Maine, restricts her business to court-appointed GAL services. Under the M.R. Guardians ad Litem, she is not performing those services as a lawyer. Although neither the Maine Bar Rules nor the Maine Rules of Professional Conduct define ?legal services? or the ?practice of law?, those concepts are centered around a lawyer?s responsibility to clients in the provision of services that (1) would be the unauthorized practice of law if performed by a non-attorney and/or (2) require the application of legal knowledge and skill in applying legal principles and precedent to ?the preparation of legal documents, their interpretation, the giving of legal advice, or the application of legal principles to problems of any complexity . . .? Board of Overseers of the Bar v. Mangan, 2001 ME 7, 13.
Attorney X does not have clients within the context of an attorney-client relationship. When she is working as a GAL, she is working as a quasi-judicial officer and not as an attorney. Hence, while she is undoubtedly applying her legal knowledge and skill and applying legal principles to complex problems, she is doing so in the provision of law-related services only, distinct from the provision of any legal services, and she is not engaged in the private practice of law. Therefore, Attorney X, assuming the professional arrangement she describes, is exempt from maintaining an IOLTA account.
M.R.Prof.Conduct 5.4(b) prevents lawyers from forming a partnership with non-lawyers ?if any of the activities of the partnership consist of the practice of law.? Similarly, M.R.Prof.Conduct 5.4(a) prevents attorneys from sharing ?legal fees? with non-attorneys.
Attorney X proposes forming a partnership with a non-attorney solely for the provision of GAL services and asserts that she would not be identified as a lawyer. Assuming this set of facts, and consistent with the analysis of Question #1 above, none of the activities of the partnership Attorney X is proposing consist of the practice of law and the fees paid to the partnership are not legal fees.
Attorney X is subject to the Maine Bar Rules and the Maine Rules of Professional Conduct in her professional activities because she is admitted to practice law in Maine. This is true even though, by rule, when serving as a GAL, she is not working as an attorney and is not practicing law. However, because of the nature of her work, she falls within an exception to the mandatory IOLTA requirement in M. Bar R. 6(a)(2)(A)(1), and because she is not practicing law in her professional work, she may choose to form a partnership with a non-attorney.
These conclusions are dependent upon the facts presented. If in the future Attorney X accepts any matters that come to her professional offices as an attorney rather than as a GAL, these conclusions may change. Any provision of legal services to a client must be kept distinct from the Attorney?s work as a GAL, and the Attorney must take reasonable measures to assure that a person obtaining the law-related services knows that the services are not legal services.4
Footnotes
1M.R.Guardians ad Litem II.3.A, entitled ?Standards of Conduct?, obligates Guardians, including those who are attorneys, to comply with ?Paragraphs 1 & 2 of the Preamble, and with the sections entitled Standards of Performance, Abuse of Position, Discrimination, and Conflict of Interest of the Judicial Branch Code of Conduct? but does not require compliance with, or even mention, the M.R.Prof.Conduct.
2The term ?law-related services? denotes services that might reasonably be performed in conjunction with and in substance are related to the provision of legal services, and that are not prohibited as unauthorized practice of law when provided by a nonlawyer. M.R.Prof.Conduct 5.7(b).
3Rule 1.15 of the MRPC requires that lawyers create IOLTA accounts for certain client funds and directly references Rule 6 of the MBR for the specific parameters for IOLTA accounts.
4Attorney X does not intend to identify herself as an attorney when she is hired as a GAL. While the Rules do not require her to do this, any self-identification as an attorney, for example on office letterhead, would require reasonable countermeasures to make sure that prospective clients understand that the services offered are not legal services.
Enduring Ethics Opinion
Opinion #201. Client File Retention Responsibilities Where an Associate Attorney Leaves a Law Firm
Issued by the Professional Ethics Commission
Date Issued: November 1, 2010
Bar counsel asked the Commission to render an opinion concerning client file retention responsibilities where an associate attorney leaves a law firm. The question presented is: Is the departing attorney or his/her former law firm responsible to retain clients? files for eight years under M. R. Prof. Conduct 1.15?
M. R. Prof. Conduct 1.15(f) applies when representation ends. It requires attorneys to either ?return to the client or retain and safeguard in a retrievable format all information and data in the lawyer?s possession to which the client is entitled.? Files that are retained must be safeguarded for at least 8 years. The rule provides only that ?a lawyer, or a lawyer?s successor? is the responsible party, without earmarking that responsibility to either the attorney who handled the client?s case or the attorney?s law firm.
Many law firms will have policies and/or employment contracts which shed light on and often resolve these issues. When they do not, it is up to the departing involved attorney who takes files and/or leaves files behind to clarify retention responsibility and notify the affected client(s) of his/her departure and the resulting location of the client?s files. Factors which may address the determination of responsibility are too numerous to allow for one set rule. Rule 1.15(f) is clear that the duty to either return or retain files applies only to information and data ?to which the client is entitled.? While the departing attorney and/or the departing attorney?s law firm may each wish to retain file information for their own purposes or protection, the attorney?s ethical duty is for the benefit of the former client and his or her right of access to file information. Hence, whether this is accomplished through retention by the departing attorney, the firm, or both, the location of the information must be clearly communicated to the client.
Enduring Ethics Opinion
Opinion #202. Inclusion in Engagement Letter of Client?s Agreement to Waive a Jury Regarding Disputes between Attorney and Client
Issued by the Professional Ethics Commission
Date Issued: January 9, 2011
The Professional Ethics Commission has been asked whether the phrase ?without a jury? can ethically be added to a sentence in an engagement agreement which otherwise states: ?In the event that a dispute between us ends up in court, both parties agree that it shall be tried exclusively in a court in Maine.?
It is not the role of the Professional Ethics Commission to express an opinion regarding the legal enforceability of a waiver of jury trial regarding disputes between an attorney and the client. The Commission?s review extends solely to whether or not such additional language comports with the Maine Rules of Professional Conduct.
When entering into an engagement agreement, lawyers and clients have both common and divergent interests. The essence of an engagement agreement is that the client is hiring the lawyer to perform certain work and the lawyer is agreeing to do so. However, the parties may initially have had very different expectations regarding such issues as the scope of the work, the fee, the anticipated results of the representation, etc. Should a dispute arise in the future about fees or about a malpractice claim, their interests would clearly be in conflict, just as they are at the commencement of representation when the parties are negotiating about the resolution of such future disputes.
M. R. Prof. Conduct 1.8 covers specific issues relating to conflicts of interest between lawyers and clients. Some activities are forbidden and some are allowed. Some conflicts require informed consent, while others may require referral to independent counsel. Engagement agreements are not directly addressed, although in subsection (h) (1), the rule prohibits agreements between lawyer and client ?prospectively limiting the lawyer?s liability to a client for malpractice.?
In Opinion 151 (1995), the Commission concluded that an engagement agreement that compelled a client to submit any future fee dispute to binding arbitration, provided that the fee resolution process in Maine Bar Rule 9 was not compromised, was not prohibited by then-existing Maine Bar Rule 3 and that ?lawyers can ethically obtain a binding agreement from a client to arbitrate fee disputes.?
In Opinion 170 (1999), this Commission interpreted then-existing Maine Bar Rule 3.4 (f) as allowing engagement agreements that compel both lawyer and client to arbitrate any future malpractice claims that might arise out of the representation. In that opinion, the Commission reasoned that there was a strong public policy in favor of arbitration and that the drafters of the Rule recognized that an attorney and client may agree as to the means of resolving disputes between them so long as there is no limit on the ?lawyer?s liability for malpractice.?
Language in an engagement agreement waiving the right to a jury trial, like a limitation on venue or a requirement to arbitrate disputes between lawyer and client, involves the means of resolving disputes and does not per se limit the extent of liability.1
Neither Opinion 151 nor Opinion 170 defined the attorney?s obligation to the client regarding disclosure in the circumstance where limitations of this nature were proposed. We find Comment [14] to M. R. Prof. Conduct 1.8, which was not available to the Commission in 1995 or 1999, to be helpful in this regard. It states that:
?This paragraph does not, however, prohibit a lawyer from entering into an agreement with a client to arbitrate legal malpractice claims, provided such agreements are enforceable and the client is fully informed of the scope and effect of the agreement.?
By necessity, this must be read in the context of M.R. Prof. Conduct 1.4(b), which requires the lawyer to ?explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation,? and M. R. Prof. Conduct 2.1, which requires the lawyer to ?exercise independent professional judgment and render candid advice.?2
Opinion 170 included a dissent by three Commission members. The dispute within the Commission was whether a proposal requiring the client to arbitrate future malpractice claims was or was not a limitation of liability that would have been prohibited by then-existing Maine Bar Rule 3.4(f)(2)(v).3 The majority determined that because an arbitrator ?remains as unlimited as any judge or jury . . . in his or her freedom to find the lawyer liable, and to award any and all compensation or other damages that a court could award,? an arbitration requirement was not a per se limitation of liability. The dissent argued instead that ?an attorney has in practical fact limited his liability? by specifying the forum for dispute resolution, noting that if this were not the case, ?why would a lawyer seek to include such restrictive language in his fee agreements??
In obtaining ?informed consent? as to the scope and effect of an arbitration requirement or a jury waiver clause in an engagement agreement, and in providing independent and candid advice on those questions, a lawyer must discuss with the client the potential effects from both the theoretical and practical points of view.4 While this would of necessity include the procedural aspects of forum choice such as timing, costs, appealability, and the evaluation of evidence and credibility,5 it must also include knowledge that the lawyer has regarding the differences between forums including, as the Commission mentioned in Opinion 170, the ?odds of a liability finding or the leverage of the parties in negotiating a settlement.?
M. R. Prof. Conduct 1.8 covers certain specific circumstances where there is a potential or actual conflict of interest between lawyer and client. In some circumstances, the rule requires that the lawyer obtain informed consent and confirm it in writing or refer the client to independent counsel. Since M. R. Prof. Conduct 1.8 does not directly address arbitration agreements or jury waivers, it does not expressly so mandate. However, the Commission?s role, as described in Maine Bar Rule 11(c)(1), is both to apply and to interpret the Maine Rules of Professional Conduct.
Opinion 151 concluded that an engagement agreement was not a business transaction between lawyer and client under then applicable Maine Bar Rule 3.4(f)(2)(i).6 Opinion 170 concluded that an agreement to arbitrate malpractice claims was not a limitation of liability pursuant to Maine Bar Rule 3.4 3.4(f)(2)(v).7 However, a jury waiver agreement implicates some of the same interests and concerns that underlie both of those rules. Comment [14] to M. R. Prof. Conduct 1.8 states that one of the reasons for the prohibition against limiting liability is that:
?[M]any clients are unable to evaluate the desirability of making such an agreement before a dispute has arisen, particularly if they are then represented by the lawyers seeking the agreement.?
Comment [1] to M. R. Prof. Conduct 1.8 explains that:
?A lawyer?s legal skill and training, together with the relationship of trust and confidence between lawyer and client, create the possibility of overreaching when the lawyer participates in a business, property or financial transaction with a client . . .?
The Commission concludes that a client?s informed consent to a jury trial waiver in an engagement agreement must be confirmed in writing and that prior to agreeing to such a limitation, the client must be advised in writing of the desirability of seeking, and given a reasonable opportunity to seek, the advice of independent legal counsel. In contrast to arbitration agreements, there is no public policy favoring the waiver of jury trials, and a limitation that excludes the right to a jury trial has potentially serious constitutional dimensions. Hence, a jury trial waiver is of a commensurate level of importance with business transactions between lawyers and clients or the settlement of potential or actual claims for liability.
Clients range from extremely sophisticated business clients to those with limited mental capacity. What constitutes ?informed consent? for different clients within that spectrum will, as a result, vary as will the resulting written confirmation. The sophisticated client will in all likelihood already understand that they can retain independent legal counsel when entering into an engagement agreement as they can with any other contractual arrangement. It costs nothing to inform that client of the desirability of doing so in the context of a jury waiver agreement, while for those clients who would have difficulty evaluating the desirability of such an agreement before a dispute has arisen, it emphasizes to them the importance of the issue.
The answer to the question posed is therefore that while the Maine Rules of Professional Conduct do not prohibit engagement agreements from stating that ?[i]n the event that a dispute between us ends up in court, both parties agree that it shall be tried exclusively in a court in Maine without a jury,? they do require that the client be fully informed as to the scope and effect of a jury waiver, that the client?s informed consent be confirmed in writing, and that the client be advised in writing of the desirability of seeking, and given a reasonable opportunity to seek, the advice of independent legal counsel prior to entering into such an agreement.
Footnotes
1The Commission was not asked to opine on the venue limitation in the currently worded retention agreement, but the Commission would note, as it did in Opinion 170, that the selection of a particular forum could implicate M. R. Prof. Conduct 1.8 (h) (1) if that forum had rules that themselves limited liability.
2Although the M.R. Prof. Conduct do not precisely delineate the point at which a prospective client becomes a client, any discussion regarding the particulars of a fee agreement would generally only take place after the lawyer and client had agreed that the client wanted the lawyer to represent him or her in a particular matter and that the lawyer was willing to do so. M.R. Prof. Conduct 1.5 (b) expressly recognizes that representation may commence before the scope of representation and the fee are fully negotiated.
3Now M. R. Prof. Conduct 1.8 (h) (1).
4?Informed consent,? as defined in M. R. Prof. Conduct 1.0(e), ?means a person?s agreement to a proposed course of conduct after the lawyer has communicated adequate information and explanation about the material risks of and reasonably available alternatives to the proposed course of conduct.?
5The Commission was likewise not asked to decide how agreements to arbitrate must be framed in order to comply with the prohibition against agreements ?limiting the lawyer?s liability to a client for malpractice?. There are certain procedural and substantive aspects of arbitration which may raise ethical issues, for example, whether an attorney?s liability for punitive damages is limited by arbitration, which are not addressed here.
6Now M. R. Prof. Conduct 1.8(a).
7Now M. R. Prof. Conduct 1.8(h)(1).
Enduring Ethics Opinion
Enduring Ethics Opinion #202 [April 2011 and February 2015]
Opinion #204. Prohibition of Attorney Entering Into a Hold Harmless or Indemnification Agreement in Favor of an Adverse Party Making Payment to the Attorney?s Client in Settlement of a Personal Injury Claim
Issued by the Professional Ethics Commission
Date Issued: April 22, 2011
Attorney A represents an injured party, Client C (hereinafter ?C?) in a personal injury action. In resolving that action, the parties responsible for C?s injuries and their insurers have asked that C indemnify them against subrogation interest, reimbursement claims and statutory and common law liens asserted by health insurance carriers, wage replacement carriers, governmental entities and health care providers who have provided services to C and/or may have reimbursed C for damages suffered by C as the result of C?s injuries. Now Attorney A has also been asked to execute an Indemnification Agreement in which Attorney A would agree to personally indemnify the party responsible for C?s injuries, as well as that party?s insurers, in the event that there is a failure on the part of C to satisfy claims by any third party who asserts an interest in the monies paid to settle C?s claim.
Is it a violation of the Maine Rules of Professional Conduct (MRPC) for a Maine attorney to personally enter into a Hold Harmless or Indemnification Agreement in favor of an adverse party or its insurance carrier as part of the adverse party?s settlement with the attorney?s client in resolution of the client?s personal injury claim?
Resolution of this question requires review of a number of the Maine Rules of Professional Conduct. These rules include the following:
(a) Rule 1.2(a), which requires that, among other things, ?a lawyer shall abide by a client?s decision whether to settle a matter. . . .?
(b) Rule 1.7(a)(2), which prohibits representation if the attorney?s representation would be materially limited by the lawyer?s responsibilities to, inter alia, a third person or by a personal interest of the lawyer;
(c) Rule 1.8(e), which provides that an attorney may not provide financial assistance to a client in connection with a pending or contemplated litigation, subject to exceptions not relevant here;
(d) Rules 1.1(b)(2)(iv) and 1.15(d), which require an attorney to promptly pay or deliver to the client, as requested by the client, funds in the possession of the attorney and, upon receiving funds or other property in which the client or third person has an interest, notifying the client and third person and otherwise making payment of those funds as appropriate; and
(e) Rule 2.1, which requires that an attorney exercise independent professional judgment and render candid advice in his or her representation of a client.
In view of the foregoing rules, it is the opinion of the Professional Ethics Commission that it is improper for an attorney to personally enter into a Hold Harmless or Indemnification Agreement in favor of third parties as part of the attorney?s representation of a client in a personal injury action. Such an agreement could impose financial obligations on the attorney which are adverse to the client, could significantly impair the attorney?s ability to exercise independent legal judgment on behalf of the client, and could result in the attorney having financial interests which are directly adverse to the interest of the client.
Such agreements to hold harmless and indemnify third persons essentially make the attorney a guarantor against lien claims that are or may be asserted against the attorney?s client. In such a circumstance, the lawyer?s interests will clearly be placed at odds with his or her client?s interests. This may well create violations of Rule 1.2(a), Rule 1.7(a)(2) and Rule 2.1(a). Moreover, Rule 1.8(e) provides narrow limits within which an attorney may provide financial assistance to a client. The attorney?s potential responsibility for the client?s obligation to pay third parties who are strangers to the direct representation for which the attorney has been retained would constitute both a prohibited acquisition of a financial interest in the cause of action or subject matter of the litigation that the attorney is conducting, and an improper advance of financial assistance to the client. Lastly, Rule 1.15 and its predecessor, Maine Bar Rule 3.6(e)(2), made clear that an attorney shall be bound by the direction of the client with regard to client funds in the possession of the attorney. A requirement that the attorney indemnify third parties against the distribution of such funds may well be contrary to the client?s rights to direct the distribution of the client?s funds.
This issue has arisen in a number of other jurisdictions dealing with Rules identical and/or analogous to the Maine Rules of Professional Conduct referenced above. Those jurisdictions are unanimous in holding that it is improper for an attorney to personally enter into an Indemnification and/or Hold Harmless Agreement as part of the settlement of the attorney?s client?s personal injury claim. See Arizona Opinion 0305 (2003); Indiana Opinion No. 1 of 2005; Illinois Adv. Op. 06-10-2006; Kansas Op. 01-05 (2001); Missouri Formal Op. 125 (2008); North Carolina State Bar Ethics Op. RPC 228 (1996); Ohio Sup.Ct., Bd. Comm?rs on Grievances & Discipline, Op. 2011-1 (issued February 11, 2011); South Carolina Ethics Adv. Op. 08-07 (2008); Tennessee Formal Op. 2010-F-154 (2010); Wisconsin Formal Op. E-87-11 (1987). See also Association of the Bar of the City of New York Committee on Professional and Judicial Ethics, Formal Op. 2010-3: Settlement Agreements Requiring the Financial Assistance of Counsel (2010).
Although the Professional Ethics Commission has not previously been asked to deal with the specific factual scenario presented here, this Opinion is consistent with the Commission?s Opinion Nos. 27, 116 and 127. Those opinions state that the task of the lawyer is to follow his or her client?s instructions unless the client has been legally divested of his or her right to receive the funds that are in the attorney?s possession. Opinion No. 127, P.2.
The Commission recognizes that it is not appropriate for it to provide opinions with regard to lawyers? legal, as opposed to ethical, responsibilities and potential liabilities. Rather, it simply provides opinions with regard to ethical issues under the Maine Rules of Professional Conduct. However, the Commission does caution attorneys to be mindful of their potential obligations to third parties which may be in tension with the attorney?s obligations to his or her client under the Maine Rules of Professional Conduct. See Opinion No. 116, P.3. See also Chapman v. Rideout, 568 A.2d 829 (Me. 1990); Restatement (2d) of Torts, § 552(1) (1977). Further, to the extent that the attorney provides an evaluation of a matter or provides factual information for the use of third persons, the attorney must comply with the provisions of Rules 2.3 (evaluation for use by third persons) and Rule 4.1 (truthfulness in statements to others).
The Commission has also been asked to provide an opinion with regard to the propriety of an attorney representing a settling party in personal injury litigation seeking indemnification against third party claims from his or her attorney opponent. The question inferred that such a request would violate Rule 8.4(a), by insisting or inducing another to violate the Maine Rules of Professional Conduct. Although a number of other Professional Ethics Advisory groups have answered these questions, the Professional Ethics Commission feels that it would be inappropriate to do so in this case. Essentially the Commission is being asked to evaluate the conduct of other attorneys, rather than that of the attorney seeking this opinion. Answering such a question would violate Board Regulation No. 28. See also Opinion No. 67.
It is the opinion of the Professional Ethics Commission that the Maine Rules of Professional Conduct prohibit a Maine attorney from entering into a Hold Harmless or Indemnification Agreement in favor of an adverse party making payment to the attorney?s client in settlement of a personal injury claim.
Enduring Ethics Opinion
Opinion #203. Specialization
Vacating Opinion #121
Issued by the Professional Ethics Commission
Date Issued: April 13, 2011
Bar Counsel has asked the Commission to reconsider its decision in Opinion No. 121 in light of the enactment of Maine Rule of Professional Conduct 7.4(a). In Opinion No. 121 and under the facts given in that matter pertaining to the advertisement in question, the Commission determined under Maine Bar Rule 3.8 that ??a lawyer may communicate the fact that the lawyer does or does not practice in particular fields of law or that his practice is limited to or concentrated in particular areas of law. A lawyer shall not represent publicly or imply that the lawyer is a recognized, designated or certified specialist.? Further, the Commission noted that ?Maine Bar Rule 3.9(a) prohibited false, deceptive or misleading advertising? and Maine Bar Rule 3.9(b)(4) defined that prohibition ??to include any statement or claim that states or implies that a lawyer is a specialist other than as permitted by Maine Bar Rule 3.8.? The Commission also noted those exceptions as set forth in Maine Bar Rule 3.8 only related ??to (1) statements regarding practice limitation or concentration, (2) attorneys practicing patent, trademark and admiralty law, (3) advertising directed to other lawyers, (4) lawyer referral services and (5) specialty designations as permitted by the Supreme Judicial Court. Other than the exceptions in Maine Bar Rule 3.9, Maine Bar Rule 3.9(b)(4) prohibited any statement even ?implying? specialization.?
The Commission concluded, based on the facts given in Opinion No. 121, that Maine Bar Rules 3.8, 3.9(a) and 3.9(b)(4), when read together, and in light of the apparent policy purpose, prohibited the advertisement in question. Further, the Commission opined that Maine Bar Rule 3.9(b)(4) clearly prohibited a lawyer stating that he or she is a ?specialist? or ?specializes? in a particular field.
The Maine Supreme Judicial Court adopted the Maine Rules of Professional Conduct, effective August 1, 2009. On the same date, Maine Bar Rule 3 (Code of Professional Responsibility) was abrogated. Currently, Maine Rule of Professional Conduct 7.4(a) provides that ?a lawyer may communicate the fact that the lawyer does or does not practice, concentrate or specialize in particular fields of law.? Comment (1) to Rule 7.4(a) further points out that the ??Rule permits a lawyer to indicate areas of practice in communications about the lawyer?s services. If a lawyer practices only in certain fields, or will not accept matters except in a specified field or fields, the lawyer is permitted to state that the lawyer is a ?specialist,? practices a ?specialty,? or ?specializes in? particular fields, but such communications are subject to the ?false and misleading? standard applied to Rule 7.1 to communications concerning a lawyer?s services.?
With the enactment of Maine Rule of Professional Conduct 7.4(a), the Commission recognizes Opinion No. 121 is now obsolete. Further, the Commission notes that Opinion No. 121 actually became obsolete by a February 15, 1994 amendment to former Maine Bar Rule 3.8. For the reasons stated above, the Commission hereby withdraws its Opinion No. 121.
Enduring Ethics Opinion
Opinion #205. Attorney?s representation of opposing counsel in an unrelated matter.
Issued by the Professional Ethics Commission
Date Issued: November 3, 2011
We have been asked to address conflicts of interest issues arising when an attorney represents opposing counsel in an unrelated matter.
The question has been brought to us by a firm whose practice includes representation of attorneys in a variety of legal matters and proceedings. Given the relatively small size of the litigation bar in this state it is understandably not uncommon for this firm to find that an opposing side is represented by one of its clients. The question raised is whether a conflict of interest exists for the representing law firm and what its ethical obligations are to its lawyer-client and to its third party client.1
The issue raised by this inquiry has been the subject of ethical opinions, commentary and disciplinary proceedings throughout the country. See generally, ABA Formal Op. 97-406; New York City Bar Association Formal Opinion 1996-3; Crane, When Lawyers represent their Adversaries: Conflicts of Interest Arising Out of the Lawyer-Lawyer Relationship, 23 Hofstra L. Rev. 791 (1995); Restatement (Third), The Law Governing Lawyers, §125, Reporter?s Note to Comment d. Maine?s adoption of the Maine Rules of Professional Conduct (MRPC) anticipated, but did not answer, the question being considered here. The Reporter?s Notes indicate that:
The Task Force discussed the question of whether a lawyer?s representation of a client who is a lawyer presented a conflict of interest when that client/lawyer is concurrently representing a party adverse to another client of the lawyer. The Task Force recognized that this situation may or may not present a classic conflict of interest. Notwithstanding the finding of a conflict of interest, the Task Force recommended that in appropriate cases, the lawyers should disclose the relationships and representation to all affected parties at the outset of the respective engagements. See Comment [10] to M. R. Prof. Conduct 1.7.
The referenced sentence in Comment [10] ("Likewise, when a lawyer represents a client who is a lawyer, and is concurrently representing another client in a matter in which the client/lawyer is representing an adverse party, the lawyer?s representation of either client may be limited."), however, was deleted from the final and adopted version of the MRPC. Therefore, the MRPC does not have any provision that directly addresses this issue.
This Commission?s analysis of the question begins with Rule 1.7 regarding conflict of interests and a determination of whether a concurrent conflict of interests exists. Such would exist in one of two situations. In the less likely situation, the attorney would be representing two clients, one of whom was an attorney, where the clients are ?directly adverse? to one another, regardless of whether the representation is in the same matter or substantially related matters. The mere fact that attorneys are opposed to each other in their representation of third party clients does not make the attorneys ?directly adverse? to the opposing clients in the sense intended for purposes of this conflict analysis. Situations may nonetheless arise where a lawyer?s client may be directly adverse to opposing counsel in another matter, such as a legal malpractice claim. In those circumstances, this first prong of the concurrent representation analysis would be implicated.
More commonly, the concurrent conflict rule would be implicated by the second prong of Rule 1.7(a), by an occasion in which
(2) there is significant risk that the representation of one or more clients would be materially limited by the lawyer?s responsibilities to another client, a former client or a third person or by a personal interest of the lawyer.
The existence of a conflict of interests here would depend upon the representing attorney?s honest and good faith evaluation of many factors which would lead to determining the risk of a limitation of that attorney?s ability to represent either client effectively.2 These factors may include
The relative importance of the matter to the represented lawyer
The relative size of the fee expected by the representing lawyer
The relative importance to each lawyer and to each lawyer?s client of the matter involving the third party clients
The sensitivity of each matter
The substantial similarity between the subject matter or issues of the two representations and
The nature of the relationship of one lawyer to the other and of each lawyer to his third party client. See ABA Formal Op. 97-406.
These listed factors are not meant to be exhaustive, but give a direction as to the inquiry required to fulfill the rule.
If, after performing this analysis, the representing attorney concludes that a concurrent conflict of interest exists as to either client, representation may continue or be commenced only if
(1) The lawyer reasonably believes that the lawyer would be able to provide competent and diligent representation to each affected client; and
(2) Each affected client gives informed consent, confirmed in writing.
M. R. Prof. Conduct 1.7(b)(1) and (2).
Under the first subsection, the representing lawyer would have to conclude that, in spite of the significant risk that that lawyer?s representation would be limited, the lawyer reasonably believes that diligent and competent services would be provided to each client. If that hurdle can be passed in the lawyer?s own analysis, then the rule next requires that the clients? informed consents to representation be obtained.3
It may be argued that this gives too much control to the client over the attorney?s relationships. It needs to be recalled, however, that the client?s consent is only required after the lawyer has determined that there is a significant risk that the representation would be materially limited by one or more other interests or responsibilities. This is a risk which the client may not be willing to bear in spite of the lawyer?s personal belief that the quality of the representation will not suffer. To the extent the representing lawyer may have a concern that the represented lawyer may use the consent issue to affect the third party litigation, this underscores the caution which should be used by each attorney in entering into the attorney-client relationship in the first place. Prudent practice may cause each attorney to explore whether a consent to future conflict, , is an appropriate tool in their respective situation. See Comment [22].
If the representing attorney concludes that a concurrent conflict of interests exists as to either client, then the rule relating to imputed conflict, Rule 1.10, comes into play and the other attorneys in the firm are likewise subject to the conflict. As a practical matter, a client may be more willing to undertake the risk of material limitation if a partner or associate of the lawyer with the personal conflict undertakes the representation. The existence of an attorney-client relationship between adversary attorneys, therefore, does not automatically cause a concurrent conflict of interest to exist. A careful analysis of Rule 1.7 needs to be undertaken concerning the specific facts of each case to determine the representing attorney?s responsibilities.
Footnotes
1 We have not been asked to address, nor do we here, the issues relating to the ethical responsibilities of the represented lawyer and that lawyer?s firm to that lawyer?s client.
2 This is a different standard from the prior Code of Professional Responsibility.. See Board of Overseers of the Bar v. J. Michael Conley, Grievance Comm?n File No. 99-70 (Report of Findings, June 5, 2001) finding a violation of Maine Bar Rule 3.4(a)(now abrogated) requiring disclosure of an interest or relationship ?that might reasonably give rise to a conflict of interest under these rules? where the Respondent attorney represented the bar complainant in a medical malpractice case but did not disclose to her that he was represented by the opposing attorney?s firm in an unrelated matter. Under the current rules, this disclosure would not be mandated unless the risk rose to the level defined in M. R. Prof. Conduct 1.7(a)(2).
3 We note that, even if no conflict exists and therefore no consent is required, the attorneys may as a matter of prudent practice want to advise their third-party clients, within the confines of the rules relating to confidentiality, of the existence of the concurrent representation. This may avoid future embarrassment or disputes between lawyers and lay clients.
Enduring Ethics Opinion
Opinion #206. Non-Refundable Flat Fee Agreements
Vacated by Opinion #211 (12/12/2012)
Issued by the Professional Ethics Commission
Date Issued: December 12, 2012
The Commission has been asked to review and advise as to the current ethical propriety of a flat fee arrangement whereby the lawyer agrees to perform all services for a set price. The fee agreement specifically states that the fee is a non-refundable minimum fee deemed earned by the Lawyer upon the execution of the agreement. The agreement also states that the client acknowledges the fee is not excessive.
The question is whether such an agreement is enforceable and/or proper under the Maine Rules of Professional Conduct.
Opinion
An opinion on this question requires a review of the definitions and provisions of several of the Maine Rules of Professional Conduct, as illuminated by reference to opinions in other jurisdictions.
M. R. Prof. Conduct 1.5(a) lists the factors to be considered in determining the reasonableness of a fee, which include, inter alia, the time and labor required, the responsibility assumed, the amount involved and the results obtained. Comment 4 to the Rule states that ?[a] lawyer may require advance payment of a fee, but is obligated to return any unearned portion.? See also M. R. Prof. Conduct 1.16(d), which provides that upon termination of representation ?a lawyer shall take steps to the extent reasonably practicable to protect a client?s interests,? and specifically requires an attorney?s ?refunding [of] any advance payment of fees or expenses that has not been earned or incurred.?
M. R. Prof. Conduct 1.15(b) (7) (iii) defines ?retainer? as
a fee paid to an attorney for professional services that is earned upon the attorney?s engagement. A retainer payment is the property of the attorney when received. ?Retainer? does not include a payment by a client as an advance payment that will be credited toward fees for professional services as the attorney earns the fees.
The fee in question calls for performance of ?all services for a set price? and thus falls into the category of what is sometimes referred to as a ?special retainer? rather than a ?general retainer? or ?classic retainer,? as contemplated by Rule 1.15(b)(7)(iii). The ?general? or ?classic? retainer, also called an ?engagement? retainer, secures an attorney?s ?availability? for any legal services that may arise during a specified term. Kelly v. MD Buyline, Inc., 2 F.Supp.2d 420, 445 (N.Y. 1998); In re Mance, 980 A.2d 1196, 1202 (D.C. App. 2009). ?A flat fee is different from an engagement retainer, which ?is a fee paid, apart from any other compensation, to ensure that a lawyer will be available for the client if required.? ? Id., citing RESTATEMENT (THIRD) OF THE LAW GOVERNING LAWYERS § 34 cmt. e (2000) and In re Sather, 3 P.3d 403, 410 (Colo. 2000).
As of 1996, the American Bar Association ?and bar association ethics boards in at least eighteen states ha[d] addressed the permissibility of nonrefundable retainers,? and noted that the states were ?still split on the issue.?1 Five states took ?a strong stance against nonrefundable retainers,? seven states and the ABA had ?decided nonrefundable retainers [were] permissible, but only with substantial qualifying rules? and ?five states allow[ed] nonrefundable retainers with only minimal qualifiers.?2 The engagement retainer under M. R. Prof. Conduct 1.15(b) (7) (iii) is ?earned upon receipt,? subject to restrictions, discussed below, in rare occasions, i.e., death, incapacity or other premature termination.
In contrast, a flat fee, in most jurisdictions, is considered to be a ?special retainer? for specific services or a specific assignment and should be treated as ?an advance,? deposited into the attorney?s trust account until earned and not treated as property of the attorney when received. As of 1996, not many jurisdictions had had occasion to decide the precise issue of how flat fees were to be treated. In September, 2009, the D.C. Court of Appeals in In re Mance, supra, provided a summary of the prevailing views across the country as of that date, most of which had reached the conclusion that flat fees are generally to be treated as ?advances of unearned fees.?3
This treatment of flat fees, and nonrefundable fees in general, has developed considerably over the past 20 years. ?While the ethical issues surrounding nonrefundable retainers were certainly considered prior to the late 1980s, the New York Court of Appeals case In re Cooperman4 and the academic work of professors Lawrence Cunningham and Lester Brickman,? who authored an amicus curia brief in Cooperman and several law review articles on the subject, ?mark[ed] the beginning of a resurgence of debate on this topic.?5 The New York Court of Appeals in Cooperman upheld the decision of the Appellate Division, which imposed a two year suspension on Attorney Cooperman, for violating the New York Code of Professional Responsibility by repeatedly using special nonrefundable retainer fee agreements with his clients.
Essentially, such arrangements are marked by the payment of a nonrefundable fee for specific services, in advance and irrespective of whether any professional services are actually rendered. The local Grievance Committee twice warned the lawyer that he should not use these agreements. After a third complaint and completion of prescribed grievance proceedings, the Appellate Division suspended the lawyer from practice for two years. It held that the particular agreements were per se violative of public policy.
633 NE.2d at1070.
One abiding principle that is referenced in virtually all of the writings on the issue of ?non-refundability? is that the client must retain at all times the unfettered right to terminate the attorney /client relationship, with or without cause.
That the client may at any time for any reason or without any reason discharge his attorney is a firmly established rule which springs from the personal and confidential nature of the relation which such a contract of employment calls into existence. If the client has the right to terminate the relationship of attorney and client at any time without cause, it follows as a corollary that the client cannot be compelled to pay damages for exercising a right which is an implied condition of the contract.
Kelly v. MD Buyline, Inc, supra., 2 F.Supp.2d at 444 - 445, citing Martin v. Camp, 219 N.Y. 170, 174, 114 N.E. 46, 48 (1916). Accordingly, ?it may become necessary to refund even a portion of a[n engagement] retainer if the lawyer withdraws or is discharged prematurely,? although the case law and treatises on the subject of ?nonrefundable retainers? tend to involve ?special retainers? or ?flat fee? cases. In re Mance, supra, 980 A.2d at 1202, citing RESTATEMENT (THIRD) OF THE LAW GOVERNING LAWYERS § 38 cmt. g (2000).
In re Mance involved a $15,000.00 flat fee for representation in a homicide defense case. The court adopted the Board on Professional Responsibility?s recommended sanction of a public reprimand over the objection of Bar Counsel, who had recommended a period of suspension in the case. Mance involved charges of misappropriating client funds, commingling funds with client funds, failing to maintain complete records of client funds, failing to treat an advance as client funds, failing to take timely steps to surrender client funds and failing to deposit client funds in a specially-titled trust or escrow account.6
The attorney in Mance returned the full $7,500.00 deposit made by the client?s father, but it was not until 4 ? 5 months after he was discharged, very soon after the retainer was paid. The attorney had deposited $6,010.00 of the retainer into a client escrow account and the balance into his operating account and although he immediately agreed to refund the payment, he ?did not have the funds readily available.? 980 A.2d at 1200. The hearing committee found that the flat fee was not an ?advance? but that the attorney improperly ?commingled funds.? The committee did not find that the attorney failed ?to take timely steps to surrender client funds,? instead ?noting that he acted honorably, and after some delay, refunded his entire fee? even though he had spent some time advising the client and his father. Id. at 1201. The Court, however, agreed with Bar Counsel?s argument that the flat fee was ?an advance of an unearned fee? and that the ?fee remained [the father?s] property upon transfer to Respondent, as no client consent was provided to a different arrangement? contrary to the hearing committee?s finding that the client?s father ?had agreed that the $7,500 belonged to respondent upon receipt? and the Board?s interpretation that ?a flat fee is not an advance on unearned fees.? Id.
Referencing D.C.?s Rule 1.5(a) which requires that ?a lawyer?s fee shall be reasonable,? the Court stated that ?an attorney earns fees only by conferring a benefit on or performing a legal service for the client.? 980 A.2d 1202, citing the Colorado Supreme Court in Sather, supra, 3 P.3d at 410. The Mance Court went on to state that a flat fee is earned ?only to the degree that the attorney actually performs the agreed-upon services.? Id., citing Alan Rothrock, The Forgotten Flat Fee; Whose Money is it and Where Should it be Deposited?, 1 FLA. COASTAL L.J. 293, 346 (1999). In a lengthy discussion of the history and competing interests of the client and attorney in flat fee agreements, the Court concluded ?that the client?s interest in protecting the funds override that of the lawyer?s in immediate access to them and that the public is ultimately better served by requiring that the lawyer keep flat fees in a trust or escrow account? until earned. 980 A.2d at 1203. The Court went on to discuss the preservation of the client?s right to choose his or her counsel, including the right to discharge an attorney. Indeed, the Court found that the respondent?s delay in returning the flat fee hindered the complainant from obtaining new counsel for his son.
The Mance Court acknowledged that its holding would foreclose a widely-used practice by attorneys of treating ?flat fees and other forms of advance fees as their own property,? but expressed its confidence that the ?Board of Governors, the Bar?s relevant sections, and the Board and Bar Counsel will take steps to inform the Bar and provide attorneys with helpful guidance on how to conform their practice to the rule? announced in its decision. 980 A.2d at 1206. Lastly, the Court referred to its decision as a ?default rule? and noted that ?an attorney may obtain informed consent from the client to deposit all of the money in the lawyer?s operating account or to deposit some of the money in the lawyer?s operating account as it is earned, per their agreement? and continued on to define ?informed consent.? See M. R. Prof. Conduct 1.0(e).
While one author has suggested that Mance ?may seem like a killjoy for practitioners considering flat fees? or those who currently use them, he noted that the Court in Mance provides sufficient ?methods by which attorneys can accelerate access to flat fee funds? such that the ?high bar? for attorneys drafting fee agreements is not insurmountable and that with careful drafting, attorneys may ?ethically gain immediate access to flat fees.?7
Accordingly, the Commission concludes that a ?flat fee agreement,? which specifically states that the fee is ?a non-refundable minimum fee earned by the lawyer upon the execution of the agreement? is impermissible under the Maine Rules of Professional Conduct. Flat fee agreements may not describe any fee as non-refundable or earned upon receipt but may describe the advance fee payment as the lawyer?s property subject to refund. The client and the attorney may agree upon a set price for certain services, and the agreement may provide that portions of the fee are earned, and become property of the attorney, at certain clearly defined benchmarks or milestones in the representation. The agreement may also specify that a flat fee constitutes complete payment for specified services and may require that the fee be paid in whole or in part in advance of the lawyer providing the services so long as the client is advised that the client-lawyer relationship may be terminated at any time and that the client will be entitled to a refund of all or a portion of the fee if the agreed-upon legal services are not provided.8
Whether or not a fee is excessive is ultimately determined, generally at the end of the representation, by applying the factors set forth in M .R. Prof. Conduct 1.5(a) regardless of what the written agreement may say. The only exception to the rule that all fees are refundable would be a true availability-only retainer, as set forth in M. R. Prof. Conduct 1.15(b) (7) (iii).
Footnotes
1 Alexander K. McKinnon, Analytical Approaches to the Nonrefundable Retainer, 9 Geo. J. Legal Ethics 583 (Winter, 1996).
2 Id., f.n. 2 ? 4 and Appendix attached thereto. There has been a developing body of law since 1996. This opinion will not provide an exhaustive nationwide update but rather will reference the reasoning behind decisions that have assisted the Commission in its interpretation of the Maine Rules of Professional Conduct and its opinion on the question before it.
3 980 A.2d at 1205. The opinion indicates the case was argued on October 5, 2007 and decided on September 24, 2009. It is unknown whether the delay was due to a court backlog or the court?s difficulty in reaching a decision.
4 633 N.E.2d 1069 (N.Y. 1994).
5 Tyler Moore, CURRENT DEVELOPMENT 2009 ? 2010: Flat Fee Fundamentals: An Introduction to the Ethical Issues Surrounding the Flat Fee After In re Mance, 23 Geo. J. Legal Ethics 701, 704 (Summer, 2010); See Lester Brickman & Lawrence A. Cunningham, Nonrefundable Retainers: Impermissible Under Fiduciary, Statutory and Contract Law, 57 FORDHAM L. REV. 149 (1988); Lester Brickman & Lawrence A. Cunningham, Nonrefundable Retainers Revisited, 72 N.C. L. REV. 1 (1993); Lester Brickman & Lawrence A. Cunningham, Nonrefundable Retainers: A Response to Critics of the Absolute Ban, 64 U. CIN. L. REV. 11 (1995).
6The Complainant told Bar Counsel that he wished to withdraw his complaint after he received his full retainer back (and prior to Respondent becoming aware of the Bar Complaint) but Bar Counsel refused to drop the case.
7 See Moore, supra at note 5, at 714.
8 See Minn. R..Prof. Conduct 1.5(b)(1) (effective July 1, 2011).
Enduring Ethics Opinion
Opinion #207. The Ethics of Cloud Computing and Storage
Issued by the Professional Ethics Commission
Date Issued: January 8, 2013
Is it ethical for Maine attorneys to use cloud computing and storage for client matters?
Yes, assuming safeguards are in place to ensure that the attorney?s use of this technology does not result in the violation of any of the attorney?s obligations under the various Maine Rules of Professional Conduct. While the technology is perpetually renewing and reinventing itself, cloud computing triggers the same ethical obligations that lawyers always have owed to their clients. With the expansion of remote data storage and processing services comes the need to observe the same, previously established ethical obligations attorneys always have followed in caring for client information.
So-called ?cloud computing? includes any software and/or hardware package that allows a lawyer to transmit, manipulate, store, and retrieve data off the lawyer?s premises ? in the proverbial clouds ? rather than on the hard drive seated at the lawyer?s office. It includes platforms like web-based e-mail, online data storage, software-as-a-service (?SaaS?), platform-as-a-service (?PaaS?), infrastructure-as-a-service (?IaaS?), Amazon Elastic Cloud Compute (?Amazon EC2?), and Google Docs, to name but a few examples.
The American Bar Association (?ABA?) canvassed the decisions of state ethics bodies across the nation and listed Maine as one of 13 states to have considered and formally approved attorney use of cloud computing and storage. http://www.americanbar.org/groups/departmentsoffices/legaltechnologyresources/resources/chartsfyis/cloud-ethics-chart.html December 21, 2012. The ABA cited Opinion #194 and noted that the Maine Professional Ethics Commission did not squarely address the cloud in that Opinion, but addressed issues similar enough to cover the ethical implications of using cloud computing and storage too. In a recent ?Enduring Ethics Opinion? email, the Commission noted that Opinion #194 remained a proper opinion under the Maine Rules of Professional Conduct, even though it was rendered under the former Bar Rules. The Commission further observed that the conclusion reached in Opinion #194 translates to cloud computing and storage, just as the ABA had suggested. However, at the request of Maine attorneys, the Commission has now elected to remove any uncertainty at this point by squarely and formally addressing the issue.
There is another Opinion of the Maine Professional Ethics Commission that should be considered as a precursor to Opinion #194 and this Opinion. Prompted by the increasing shift from paper hardcopies to electronic data, the Commission issued Opinion #183 on January 28, 2004. The Opinion answered the question whether an attorney is obligated to keep a paper copy of correspondence if that correspondence is converted to an electronic format and stored on a computer. Analyzing then applicable Maine Bar Rules 3.5(a) and 3.6(a) & (e) and Opinions #74 & #120, the Commission concluded that the ethics rules did not require the attorney to retain a paper copy in addition to the electronic one, but only if certain conditions are met. Those conditions generally ensure that the electronic format does not make the correspondence any less accessible to the client than a paper document. Note, however, that M. R. Prof. Conduct 1.15(f) states that there is an obligation now to retain and safeguard client records that have ?intrinsic value in the particular version, such as original signed documents,? rather than destroy them after conversion to an electronic format.
Four years later, in 2008, the Commission addressed in Opinion #194 the ethics of transmitting electronic recordings ? presumably the lawyer?s dictated correspondence, briefs and the like about the client?s confidential information ? for off-site transcription and transferring client files in the form of the electronic data off-site for backup storage. The Commission relied on then applicable Maine Bar Rules 3.6(a) & (h) and 3.13(c), as well as Opinions #74 & #134, to conclude that ?with appropriate safeguards, an attorney may utilize transcription and computer server backup services remote from both the attorney?s direct control or supervision without violating the attorney?s ethical obligation to maintain client confidentiality.? The 2008 version of Maine Bar Rule 3.6(a) & (h) can be found in current Maine Professional Conduct Rules 1.1 and 1.6, and former Maine Bar Rule 3.13(c) translates to current Maine Professional Conduct Rule 5.3.
What changes with evolving technology like cloud computing is not the overriding ethical constraints on counsel, but how those constraints are satisfied with respect to new challenges presented by that technology. Commentators on the ethics implications of cloud computing and the Maine Rules of Professional Conduct themselves reveal several rules implicated by the use of this technology:
? Rule 1.1 (competence)
? Rule 1.3 (diligence)
? Rule 1.4 (communications with client)
? Rule 1.6 (confidentiality)
? Rule 1.15 (safeguarding client property)
? Rule 1.16 (terminating representation)
? Rule 1.17 (sale of practice)
? Rule 5.3 (supervision of third parties)
Ethics commissions in other jurisdictions and legal scholars have written extensively on the nuts and bolts of acting ethically with cloud computing, including providing checklists for practitioners. See, e.g., Pennsylvania Formal Opinion 2011-200; North Carolina 2011 Formal Opinion #6 (January 27, 2012); The American Bar Association, ?Ethical Challenges on the Horizon: Confidentiality, Competence, and Cloud Computing,? 2012. For the purposes of this Opinion, some of the more salient safeguards Maine counsel should adopt in an effort to satisfy the Maine Rules of Professional Conduct in connection with cloud usage include several internal policies and procedures:
1. Backing up data to allow the firm to restore data that has been lost, corrupted, or accidentally deleted;
2. Installing a firewall to limit access to the firm?s network;
3. Limiting information that is provided to others to what is required, needed, or requested;
4. Avoiding inadvertent disclosure of information;
5. Verifying the identity of individuals to whom the attorney provides confidential information;
6. Refusing to disclose confidential information to unauthorized individuals (including family members and friends) without client permission;
7. Protecting electronic records containing confidential data, including backups, by encrypting the confidential data;
8. Implementing electronic audit trail procedures to monitor who is accessing the data;
9. Creating plans to address security breaches, including the identification of persons to be notified about any known or suspected security breach involving confidential data; and
10. Educating and training employees of the firm who use cloud computing to abide by all end-user security measures, including, but not limited to, the creation of strong passwords and the regular replacement of passwords.
See Pennsylvania Formal Opinion 2011-200.
In dealing with third-party vendors of cloud computing services or hardware, additional safeguards Maine counsel should adopt include the following considerations made relevant by the Maine Rules of Professional Conduct.
1. Inclusion in the [cloud computing] . . . vendor?s Terms of Service or Service Level Agreement, or in a separate agreement between the [cloud computing] . . . vendor and the lawyer or law firm, of an agreement on how the vendor will handle confidential client information in keeping with the lawyer?s professional responsibilities.
2. If the lawyer terminates use of the [cloud computing] . . . product, the [cloud computing] . . . vendor goes out of business, or the service otherwise has a break in continuity, the law firm will have a method for retrieving the data, the data will be available in a non-proprietary format that the law firm can access, or the firm will have access to the vendor?s software or source code.
3. The [cloud computing] . . . vendor is contractually required to return or destroy the hosted data promptly at the request of the law firm.
4. Careful review of the terms of the law firm?s user or license agreement with the [cloud computing] . . . vendor including the security policy.
5. Evaluation of the [cloud computing] . . . vendor?s (or any third party data hosting company?s) measures for safeguarding the security and confidentiality of stored data including, but not limited to, firewalls, encryption techniques, socket security features, and intrusion-detection systems.
6. Evaluation of the extent to which the [cloud computing] . . . vendor backs up hosted data.
North Carolina 2011 Formal Opinion #6 (January 27, 2012)(internal citations omitted).
More specifically, the attorney should ensure that the vendor of cloud computing services or hardware
1. Explicitly agrees that it has no ownership or security interest in the data;
2. Has an enforceable obligation to preserve security;
3. Will notify the lawyer if requested to produce data to a third party, and provide the lawyer with the ability to respond to the request before the provider produces the requested information;
4. Has technology built to withstand a reasonably foreseeable attempt to infiltrate data, including penetration testing;
5. Provides the firm with the right to audit the provider?s security procedures and to obtain copies of any security audits performed;
6. Will host the firm?s data only within a specified geographic area. If the data is hosted outside of the United States, the law firm must determine that the hosting jurisdiction has privacy laws, data security laws, and protections against unlawful search and seizure that are as rigorous as those of the United States and Maine;
7. Provides the ability for the law firm, on demand, to get data from the vendor?s or third-party data hosting company?s servers for the firm?s own use or for in-house backup.
See Pennsylvania Formal Opinion 2011-200.
These lists are not intended to be exhaustive or to convey a ?safe harbor? for counsel in all instances of cloud computing. The proprietary cloud options available and the dynamic nature of the technology make it impossible to list criteria that apply to all situations for all time. The North Carolina Ethics Committee aptly articulated the measure of an attorney?s appropriately discharging all professional ethical duties owed to the client while using cloud technologies:
[W]hile the duty of confidentiality applies to lawyers who choose to use technology to communicate, ?this obligation does not require that a lawyer use only infallibly secure methods of communication.? RPC 215. Rather, the lawyer must use reasonable care to select a mode of communication that, in light of the circumstances, will best protect confidential client information and the lawyer must advise effected parties if there is reason to believe that the chosen communications technology presents an unreasonable risk to confidentiality.
In light of the above, the Ethics Committee concludes that a law firm may use [cloud computing] . . . if reasonable care is taken to minimize the risks of inadvertent disclosure of confidential information and to protect the security of client information and client files. A lawyer must fulfill the duties to protect confidential client information and to safeguard client files by applying the same diligence and competency to manage the risks of [cloud computing] . . . that the lawyer is required to apply when representing clients.
North Carolina 2011 Formal Opinion #6 (January 27, 2012).
Furthermore, the reasonable care standard for ethical conduct requires attorneys? periodic education on computer technology as it changes and as it is challenged by and reacts to additional indirect factors such as third party hackers or technical failures.
Enduring Ethics Opinion
Enduring Ethics Opinion #207 [October 2023]
Opinion #208. Practice of Collaborative Law in Family Law Matters
Issued by the Professional Ethics Commission
Date Issued: March 6, 2014
The Commission has been asked to advise whether attorneys may enter into a ?collaborative participation agreement? to resolve legal disputes involving family relationships. For purposes of this opinion, the term ?collaborative participation agreement? means a written contract (a) in which the clients and their respective lawyers are parties; (b) that specifies the issues to be resolved by cooperative means; (c) that outlines a dispute-resolution process, usually multi-disciplinary, that entails minimal judicial involvement without recourse to formal discovery; and (d) that is consistent with this Opinion.
It is the opinion of the Commission that the Maine Rules of Professional Conduct do not prohibit attorneys from participating in or becoming parties to a collaborative participation agreement, subject to the following caveats:
1. Scope of Representation
A collaborative participation agreement should clearly specify the scope of representation by the respective attorneys and the goals to be achieved. M.R. Prof. Conduct 1.2(a) and (c). The agreement should state whether the lawyers may continue to represent their respective clients during contested adjudicative proceedings after termination of the agreement.1 The agreement may not compromise the duty of the lawyers to represent the interests of their respective clients under the Maine Rules of Professional Conduct. The lawyer?s role under a collaborative law agreement should not be confused with the role of a lawyer serving as a third-party neutral under M.R. Prof. Conduct 2.4.
2. Confidentiality
The agreement should state whether or the extent to which (1) the clients waive the attorney/client privilege and the extent to which information may be revealed among the parties, their counsel, and to the court or (2) that the attorney/client privilege is not waived and the attorneys shall preserve the confidentiality of information, subject to M.R. Prof. Conduct 1.6. Clients must be made aware that, absent an agreement that preserves the privilege or an agreement in which the parties exclude from evidence information revealed during the collaborative process, all disclosed information may be shared with the opposing party and their counsel and admitted as evidence in any contested adjudicative proceeding. Each client should be clearly informed that absent legislation or court rule, rules imposing confidentiality, such as those that govern mediation under M.R. Evid. 514, are not applicable to collaborative law agreements.
3. Competence
Lawyers must furnish competent representation to their clients. M.R. Prof. Conduct 1.1. The Commission recommends that, before entering into a collaborative participation agreement, lawyers should be knowledgeable about the prefatory note and comments that accompany the Uniform Collaborative Law Act, guidelines and recommendations promulgated by the International Academy of Collaborative Practitioners (https://www.collaborativepractice.com), and similar professional resources.
4. Fees and Costs
The agreement should specify the respective client?s responsibility for payment of legal fees and costs, consistent with M.R. Prof. Conduct 1.5.
5. Unrepresented Parties
Particular care is required when a party to the agreement is not represented by counsel. A lawyer may not represent multiple parties under a collaborative participation agreement. It is a lawyer?s responsibility to ensure that an unrepresented party understands that the opposing lawyer does not represent him or her. See M. R. Prof. Conduct 4.3. Because the subject of the agreement inevitably invokes the lawyer?s duty to exercise independent judgment to consider, recommend or carry out an appropriate course of action for the client, it is not likely that the parties can waive the conflict of interest as otherwise permitted by M.R. Prof. Conduct. 1.7(b). A lawyer should be very hesitant to enter into a collaborative participation agreement involving pro se parties.
6. Termination of the Agreement
A client may revoke the authority of the attorney at any time. M.R. Prof. Conduct 1.2, Comment 3. Furthermore, the right of access to the courts in divorce proceedings is a fundamental right guaranteed under the Due Process Clause. Boddie v. Connecticut, 401 U.S. 371, 384-85 (1971). Accordingly, the agreement should contain a provision permitting any client to terminate the process at any time and for any reason.
7. Clients? Informed Consent
A lawyer must fully explain the collaborative participation process to the client, including the content of the agreement, its benefits, risks, rights and obligations, and obtain the client?s informed consent before the collaborative participation process is initiated. M.R. Prof. Conduct 1.4.
This opinion should not be viewed as an exhaustive catalog of the ethical implications of the collaborative family law process. While the process may be intended to resolve family legal issues amicably and efficiently while reducing antagonisms inherent in the adversarial system of litigation, the Maine Rules of Professional Conduct governing the ethical obligations of lawyers remain applicable, whether or not cited and discussed above.
1A traditional collaborative participation agreement requires the attorneys to terminate representation of their clients if the process should be unsuccessful. See, e.g., Uniform Collaborative Law Act, §9. The Act has not been adopted in Maine but may serve as a useful model. The term ?cooperative law process? is often applied to a similar process that does not require mandatory withdrawal. The Ethics Committee of the Colorado Bar Association has explained the distinction in its Ethics Opinion 115. This Opinion makes no distinction between the two processes; both are governed by the same Maine Rules of Professional Conduct.
Enduring Ethics Opinion
Opinion #209. Disclosure Issues in Deferred Disposition Settings
Issued by the Professional Ethics Commission
Date Issued: May 20, 2014
The Commission has been asked to address the following questions: Pursuant to Title 17-A, M.R.S.A. § 1348-A, all deferred dispositions are required to have a Court-imposed condition that the defendant refrain from criminal conduct. Pursuant to § 1348-B, at the conclusion of the period of deferment when the defendant returns to Court, he/she has the burden of proof to demonstrate by a preponderance of the evidence that he/she has complied with all Court-imposed requirements of the deferred disposition. Given those statutory requirements, what are an attorney?s ethical obligations with regard to disclosure to the District Attorney and to the Court in the following factual scenarios?
Scenario #1:
The Defendant client has pled guilty to a felony with the agreement that if he/she complies with the terms and conditions of the deferred disposition, the State will move to amend the charge, reducing it to a misdemeanor with an agreed upon sentence to be imposed by the Court.
Scenario #2:
The client has pled guilty to a misdemeanor charge with the agreement that if he/she complies with the terms and conditions of the deferred disposition, the State will file a motion with the Court to allow the defendant to withdraw the ?guilty? plea and the case will be dismissed by the State.
In each scenario what, if any, are an attorney?s ethical obligations with regard to disclosure to either the District Attorney and/or the Court in the following circumstances:
- The client confidentially discloses to the attorney that he/she has been convicted and/or charged with a new criminal offense that occurred in a different jurisdiction during the period of deferment?
- The client discloses that he/she has committed a crime during the period of deferment, but has not yet been charged?
The answer to the questions under the scenarios as presented is that counsel has no affirmative obligation to disclose to either the Court or to the District Attorney information with regard to the client?s criminal history in other jurisdictions or whether the client has or has not forborne further criminal conduct. However, counsel cannot allow the client to make false statements to the Court as part of the deferred disposition process when the attorney knows that the client?s testimony is false. If the client does make false statements in Court, then the attorney has an obligation to disavow those statements. This obligation may go so far as to require advising the Court that the client?s testimony was false. See M. R. Prof. Conduct 3.3(a)(b)(c). Even then, however, any disclosure by counsel must be carefully limited and tailored so as not to divulge confidences or secrets of the client protected from disclosure by Rule 1.6. This may mean that counsel simply informs the Court that the client?s testimony was untruthful, but is prohibited from explaining or giving further information with regard to the specific manner in which client?s testimony was untruthful.
These questions address tensions within the Maine Rules of Professional Conduct between the lawyer?s obligation not to reveal a confidence or secret of a client without informed consent, or otherwise within the limited exceptions provided by Rule 1.6(b), the lawyer?s obligations of candor toward a Tribunal, as provided by Rule 3.3, as well as the lawyer?s obligations with regard to truthfulness as provided by Rule 4.1. Rule 1.6 provides as follows:
1.6 Confidentiality of Information
- A lawyer shall not reveal a confidence or secret of a client unless, (i) the client gives informed consent; (ii) the lawyers reasonably believes that disclosure is authorized in order to carry out the representation; or (iii) the disclosure is permitted by paragraph (b).
- A lawyer may reveal a confidence or secret of a client to the extent the lawyer reasonably believes necessary. . .
- to prevent the client from committing a crime or fraud that is reasonably certain to result in substantial injury to the financial interests or property of another and in furtherance of which the client has used or is using the lawyer?s services; . . .
- to comply with other law or a Court order.
3.3 Candor Toward the Tribunal
- A lawyer shall not knowingly:
- make a false statement of fact or law to a Tribunal or fail to correct a false statement of material fact or law previously made to the Tribunal by the lawyer;
- misquote to a Tribunal the language of a book, statute, ordinance, rule or decision or, with knowledge of its invalidity and without disclosing such knowledge, cite as authority, a decision that has been overruled or a statute, ordinance or rule that has been repealed or declared unconstitutional;
- Offer evidence that is false. If a lawyer, the lawyer's client, or witness called by the lawyer, has offered material evidence and the lawyer comes to know of its falsity, the lawyer shall take reasonable remedial measures, including, if necessary, disclosure to the Tribunal. A lawyer may refuse to offer evidence that the lawyer reasonably believes is false, except a lawyer in a criminal matter may not refuse to offer the testimony of a defendant, unless the lawyer knows from the defendant that such testimony is false.
- A lawyer who represents a client in an adjudicative proceeding and who knows that a person intends to engage, is engaging or has engaged in criminal or fraudulent conduct related to the proceeding shall take reasonable remedial measures, including, if necessary, disclosure to the Tribunal.
- The' duties' stated in paragraphs (a) and (b) continue to the conclusion of the ,proceeding, and apply even if compliance requires -disclosure of information otherwise protected by Rule 1.6.
- In an ex parte proceeding, a lawyer shall inform the Tribunal of all material facts known to the lawyer that will enable the Tribunal to make an informed decision, whether or not the facts are adverse.
4.1 Truthfulness in Statements to Others
In the course of representing a client a lawyer shall not knowingly:
- (a) make a false statement of material fact or law to a third person; or
- fail to disclose a material fact to a third person when disclosure is necessary to avoid assisting a criminal or fraudulent act by a client, unless disclosure is prohibited by Rule 1.6.
Additionally, important to this discussion is the definition of Tribunal as set forth in Rule 1.0(m) as follows:
- ?Tribunal? means a Court, an arbitrator in a binding arbitration proceeding or a legislative body, administrative agency or other body acting in an adjudicative capacity. A legislative body, administrative agency or other body acts in an adjudicative capacity when a neutral official, after the presentation of evidence or legal argument by a party or parties, will render a binding legal judgment directly affecting a party?s interests in a particular matter.
Further complicating this analysis is the fact that in the criminal setting posed by the questions, the client has a constitutionally protected right not to incriminate him or herself, and a right to the effective assistance of counsel. While it is not the place of the Professional Ethics Commission to opine on matters of substantive law, an analysis of the ethical issues cannot ignore the protections required by both the United States and Maine Constitutions. Similarly, these questions implicate the attorney?s fiduciary obligations of loyalty and confidentiality, which the Maine Supreme Judicial Court has held to exist as a matter of common law and equity, independent of any Professional Rules of Conduct.1
Although the questions deal with disclosure to the District Attorney and the Court in the conjunctive, the attorney?s obligations may well be different when dealing with a District Attorney as opposed to the Court. The District Attorney is not a Tribunal, and therefore the obligations of candor imposed by Rule 3.3 do not apply to counsel?s involvement with a District Attorney. Counsel?s involvement with a District Attorney, as opposed to representations made in and to the Court, are governed solely by Rule 4.1, requiring truthfulness, but not imposing the additional obligations of candor required by Rule 3.3.
As Comment [14] to Rule 3.3 points out, ordinarily an advocate has the limited responsibility of presenting one side of matters that a Tribunal should consider in reaching a decision; the conflict in position is expected to be presented by the opposing party. Similarly, Rule 4.1 Comment [1] states that a lawyer generally has no affirmative duty to inform an opposing party of relevant facts. This is consistent with the decision of the Task Force and of the Maine Supreme Judicial Court in adopting Rule 3.3 not to impose the Model Rule requirement that counsel advise a Tribunal of opposing authority at argument. Rather, counsel is required simply not to misquote legal authority nor cite to legal authority which has been invalidated. See Rule 3.3(a)(2). Rule 3.3 also states that a lawyer?s obligation to inform the Tribunal of all material facts applies only in an "ex parte" proceeding, where the other side is not represented. See Rule 3.3(d). That is, when the other side is not present and represented then, and only then, the lawyer has the correlative duty to make disclosures of material facts that the lawyer reasonably believes are necessary to an informed decision. See Comment [9], supra. By implication these Comments and Rule 3.3(d) imply that there is no affirmative obligation to inform the Court or the opposing side of such information.
Therefore, absent more, there is no obligation to disclose the client?s conviction, charge, or engagement in criminal activity in any of the scenarios set forth above.
That, however, does not end the inquiry. The provisions of the statute dealing with deferred disposition, 17-A M.R.S. § ;1348-A and § 1348-B, raise two additional concerns. First, § ;1348-A(3) imposes an affirmative obligation on a person who cannot meet a deferment requirement to bring a motion for modification pursuant to sub-section II. Since the deferred disposition includes a requirement that the person refrain from criminal conduct, at least the second question under each of the above scenarios raises a question of whether ¶ 3 imposes an affirmative obligation of disclosure.
Secondly, § 1348-B provides for a Court hearing as to final disposition. In sub-paragraph (1), the statute imposes upon the person charged an obligation of demonstrating by a preponderance of the evidence that the person has complied with the Court-imposed deferment requirements.
At the outset, it should be noted that based upon the statutory scheme, there is no requirement that the accused do anything other than refrain from additional criminal conduct. Accordingly, under the first and second questions under each scenario, there is no affirmative obligation that either the client or counsel disclose to anyone, whether it be the District Attorney or the Court, that there is another criminal proceeding and/or another criminal conviction.
However, if asked about any new criminal pending charges or convictions, neither counsel nor the client may give anything other than a truthful response to question(s) posed. See Board of Overseers of the Bar v. Dineen, 481 A.2d 499 (Me. 1984); State v. Gilcott, 420 A.2d 1238 (Me. 1980). Board of Overseers of the Bar v. Bertha E. Rideout, Docket No. BAR-81-10 (Decision of McKusick, C.J., dated January 7, 1982). Dineen expressly states that a lawyer may not present perjured testimony and has an affirmative obligation to prevent the presentation of perjured testimony and/or to advise the Court of the fact the testimony, once offered, is perjured. See also Rule 3.3(c). Gilcott holds that counsel has no duty to support a motion having no basis in fact and has an affirmative obligation to inform the Court of the falsity of a client?s assertions. Similarly, in Rideout, the Court disciplined counsel for standing mute while her client falsely answered the Court?s questions with regard to his prior criminal record. Accordingly, while it is theoretically possible that a client could appear and present the motion contemplated by 17-A M.R.S. § 1348-B, counsel would have to advise his or her client that if the client were to answer falsely, or to testify affirmatively in a false manner, counsel would have an affirmative obligation to advise the Court of the falsity of the client?s assertions.
If, on the other hand, the state simply moves, in accordance with § 1348-B(1-A) for a withdrawal of the plea, counsel has no obligation of disclosure as long as neither counsel nor the client are required to join in any representations with regard to the client?s criminal history and/or the client?s forbearance from engaging in criminal conduct.
If the client is asked by the Court about whether the client has engaged in criminal conduct, the only alternative available is for the client to assert his or her privilege against self-incrimination under the Fifth Amendment to the United States Constitution. Even then, there should be no discussion of whether the client has in fact engaged in any criminal activity.
This obviously poses challenges to counsel representing a party subject to a deferred disposition under the circumstances presented. Under all circumstances, counsel must advise the client that the client must be truthful, and if the client is not truthful, that the attorney has an affirmative obligation to flag or correct untruthful testimony. See Dineen, supra; Gilcott, supra, 4 M.R.S. § 806 (Attorney?s Oath). Further, if counsel anticipates that the client will be placed in the position of having to answer questions with regard to either whether there are or are not other criminal actions pending against the client or whether the client is engaged in other criminal activity, then the attorney may be well-served to advise the client to address (through defense counsel) those issues directly with the District Attorney before a hearing. The attorney must advise the client that if the client?s non-compliance with the terms of the deferment becomes known at the hearing, disclosure at that time may be significantly detrimental to the client?s interest. Similarly, counsel should advise the client that the District Attorney may well ask questions about compliance in discussions leading up to the hearing required by the statute. If counsel is asked specific questions by the District Attorney, counsel will be required to either refuse to answer or to provide accurate information. The burden is on the questioning attorney to request specific information. General, non-specific questions may be answered with general, non-specific answers. However, misrepresentations can also occur by partially true but misleading statements or omissions that are the equivalent of affirmative false statements. See M. Rules of Prof. Conduct 4.1, Comment [1]. However, until the issue of the client?s testimony is directly addressed, counsel may not, pursuant to Rule 1.6, disclose client confidences without the client?s informed consent.
The rules provide that an attorney may not counsel a client nor assist a client in engaging in a course of action which is either criminal or fraudulent. These provisions do not, however, impose upon the client an obligation to divulge past criminal conduct. Rather, the provisions simply prohibit the attorney from assisting the client in an ongoing criminal or fraudulent enterprise. Simply failing to provide information which the District Attorney?s office may believe is material is neither criminal nor fraudulent in and of itself.
This brings inquiry to the last issue. What does counsel do if the District Attorney asks whether the client has had any other criminal charges brought against him or her, or whether the client has engaged in criminal activity? Absent client consent, the attorney may not, pursuant to Rule 1.6, answer these questions. By the same token, however, counsel may not answer dishonestly. Further, the lawyer may not answer the questions in a way in which the omission to provide the information requested is misleading. See Rule 3.3 Comment [3]; Rule 4.1 Comment [1].
The Reporter?s Notes further note that Rule 4.1 prohibits both affirmative false statements as well as omissions when there is a duty to speak (emphasis added). While counsel has no duty to speak in terms of affirmatively informing the District Attorney of any of the issues raised by the questions presented, counsel may nonetheless violate the Rules if counsel gives an answer to an inquiry which omits the material facts presented and thereby misleads the other side. Rather, counsel?s only course of action is to simply refuse to answer the questions. See Board of Overseers of the Bar v. Traill, Maine Supreme Judicial Court, Docket No. BAR-09-04, Decision dated October 16, 2009, (Mead, J.).
1We have held that that an ?attorney and client necessarily share a fiduciary relationship of the highest confidence.? Anderson v. Neal, 428 A.2d 1189, 1191 (Me. 1981). In Peaslee v. Pedco, Inc., 388 A.2d 103 (Me. 1978), an attorney?s breach of the duty of loyalty supported an action for rescission of a land contract. The fiduciary obligations of an attorney are derived from common law and equity independent of professional rules of conduct. 2 Ronald E. Mallen & Jeffrey M. Smith Legal Malpractice, § 14.1 (4th ed. 1996). ?[T]he basic fiduciary obligations are two-fold: undivided loyalty and confidentiality. . . . These common-law duties predate and exist despite independent, codified ethical standards.? Id. at 227-28. ?A lawyer who acts adversely to a former client can be sued for the financial consequences of disloyalty, which primarily is for abuse of confidences.? Id. § 16.23 at 483-4.
Sargent v. Buckley, 1997 ME 159 ¶ 9.
Enduring Ethics Opinion
Opinion #211. Allowance of Nonrefundable Fee Agreements
Vacating Opinion #206
Issued by the Professional Ethics Commission
Date Issued: December 3, 2014
Opinion 206, which dealt with Nonrefundable Flat Fee Agreements, has been annulled by the Maine Supreme Judicial Court?s amendments to the Maine Rules of Professional Conduct namely, the Court added subdivisions (o) and (p) to Rule 1.0, subdivisions (a)(11), (h), (i), and (j) to Rule 1.5 and deleted the definition of ?retainer? from Rule 1.15(b)(7)(iii). The Court further amended Rule 1.5(a)(2)(3),(d)(1), (f)(g) and Rule 1.15(b)(1).
Nonrefundable fees are now permissible, subject to compliance with those amendments to the Maine Rules of Professional Conduct.
By virtue of 2014 Me. Rules 04, effective September 1, 2014, the Court amended and adopted the above rules, and referenced the Advisory Notes to aid in the understanding of the amendments. Definitions have been added for ?advance,? ?advance payment of fees,? and ?retainer? at Rule 1.0(o) and ?nonrefundable fee? at Rule 1.0(p). A ?stylistic change? has been made in the use of the term ?retainer.?
The definition of ?nonrefundable fee? clarifies that such fees, earned on receipt, are not limited to so-called ?availability retainers.? Rather, a fee may be earned on receipt, even though the parties expect the lawyer to render future services, even at no additional charge. So long as the fee is reasonable, such an agreed upon fee is nonrefundable, even though the future services are not rendered. This broader definition displaces the narrower concept of a ?general retainer? or ?availability retainer? expressed in Opinion 206. A lawyer?s use and acceptance of a nonrefundable fee is subject to the specific requirements set forth in new Rule 1.5(h)(see below).
The amendments eliminate the requirement that the likelihood of the acceptance of the particular employment will preclude other employment by the lawyer be ?apparent to the client? (M.R.P.C 1.5(a)(2)), and add the language ?range of fee[s]? customarily charged in the locality for similar legal services (M.R.P.C. 1.5(a)(3)).
The amendments add the following to the factors to be considered in determining the reasonableness of a fee: ?any other risks allocated by the fee agreement or potential benefits of the fee agreement, judged as of the time the fee agreement was made.? M.R.P.C. 1.5(a)(11).
The amendments clarify the rule allowing for acceptance of credit card payments in M.R.P.C 1.5(f).
New M.R.P.C. 1.5(h) provides as follows:
A lawyer may enter into an agreement for a client to pay a nonrefundable fee that is earned before any legal services are rendered. The amount of such an earned fee must be reasonable, like any fee, in light of all relevant circumstances. A lawyer cannot accept a nonrefundable fee, or characterize a fee as nonrefundable, unless the lawyer complies with the following conditions:
The lawyer confirms to the client in writing before or within a reasonable time after commencing representation (a) that the funds will not be refundable and (b) the scope of availability and/or services the client is entitled to receive in exchange for the nonrefundable fee;
A lawyer shall not solicit or make any agreement with a client that prospectively waives the client?s right to challenge the reasonableness of a nonrefundable fee, except that a lawyer can enter into an agreement with a client that resolves an existing dispute over the reasonableness of a nonrefundable fee, if the client is separately represented or if the lawyer advises the client in writing of the desirability of seeking independent counsel and the client is given a reasonable opportunity to seek such independent counsel.
Where it accurately reflects the terms of the parties? agreement, and where such an arrangement is reasonable under all of the relevant circumstances and otherwise complies with this Rule, a fee agreement may describe a fee as ?nonrefundable,? ?earned on receipt,? a ?guaranteed minimum,? or other similar description indicating that the funds will be deemed earned regardless whether the client terminates the representation.
New Rule 1.5(i) provides as follows:
A nonrefundable fee that complies with the requirements of (h)(1)-(2) above constitutes property of the lawyer that should not be commingled with client funds in the lawyer?s trust account. Any funds received in advance of rendering services that do not meet the requirements of (h)(1)-(3) constitute an advance that must be deposited in the lawyers? trust account in accordance with Rule 1.15(b)(1) until such funds are earned by rendering services.
New Rule 1.5(j) refers back to Rule 1.0 for definitions of ?advance,? ?retainer,? and ?nonrefundable fee.?
The amendments to Rule 1.15 clarify how and where the lawyer is to deposit any advance payments of fees or retainers and any expenses that have been paid in advance. The Committee Notes reflect the intent to maintain a bright line separating earned fees from unearned fees, stating ?[i]f the parties intend for the lawyer to treat funds as the lawyer?s own before services are rendered, the lawyer must make an agreement for a nonrefundable fee that complies with Rule 1.5(h).?
With the enactment of 2014 Me. Rules 04, the Commission recognizes Opinion No. 206 is now obsolete. Accordingly, the Commission hereby withdraws and vacates Opinion No. 206.
Enduring Ethics Opinion
Opinion #210. Restrictions on the Sale of an Attorney's Law Practice
Repealed
Issued by the Professional Ethics Commission
Date Issued: July 14, 2014
Related Opinion(s)
Opinion #143: Disposition of Client Files on Death or Disability of Solo Practitioner
Question (Part I)
Attorney H is a solo practitioner who is reaching the stage in his practice where he would like to start phasing out of the practice of law. He would like to be able to sell the practice, and then come back as an employee or independent contractor without all the headaches and liabilities that are involved with the actual ownership of the firm. May Attorney H sell his practice and then continue to practice law in some limited capacity without running afoul of the Maine Rules of Professional Conduct?
Opinion
The Commission finds that the current version of Maine Rule of Professional Conduct (hereinafter ?Rule?) 1.17 explicitly prohibits the sale of all or a part of Attorney H?s solo law practice if Attorney H were to remain in private legal practice within the state of Maine.
Rule 1.17 provides in relevant part:
A lawyer or a law firm may sell or purchase a law practice, including good will, if the parties comply with the other applicable provisions of these rules, and the [following] condition [ is] satisfied.
(a) [T]he selling attorney or each attorney in the selling firm [must] cease[] to engage in the private practice of law in the State of Maine.
(b) If the seller is or was a solo practitioner, then the entire law practice must be sold as a single unit. . . . The entire law practice, for purposes of this rule, shall mean all client files, for open and closed engagements, excepting only those cases in which a conflict-of interest is present or may arise.
As noted in Comment [3] to Rule 1.17, the requirement to exit the private legal arena after the sale of one?s practice is not absolute?one may still practice law within the state (see discussion on Rule 1.17 cmt. 4, infra) in certain, limited capacities. The prohibition on returning to practice within the state of Maine would not preclude Attorney H from working as a lawyer on ?the staff of a public agency or a legal services entity that provides legal services to the poor? nor would it bar Attorney H from employment as ?in-house counsel to a business.? See Rule 1.17 cmt. [3].2
Further, Comment [4] to Rule 1.17 provides that the Rule ?permits a sale of an entire practice attendant upon retirement from the private practice of law within the jurisdiction. Its provisions, therefore, accommodate the lawyer who sells the practice on the occasion of moving to another state.?
Upon its promulgation of the Maine Rules of Professional Conduct in 2009, the Maine Supreme Judicial Court adopted American Bar Association (?ABA?) Model Rule 1.17 in substantially the same form. In the uniform version of Model Rule 1.17, the ABA gave two options:
- The seller ceases to engage in the private practice of law, or in the area of practice that has been sold, [in the geographic area] [in the jurisdiction] (a jurisdiction may elect either version) in which the practice has been conducted. . . .
The options given by the ABA contemplate that some states may have different jurisdictions contained within their borders; however, the state of Maine has only a single jurisdiction. As a result, Attorney H would be barred from returning to private practice in Maine, aside from the limited exceptions noted supra, if he were to sell his solo practice.
Comment [6] may provide insight as to why planned returns to practice after a sale are disfavored; that Comment provides in relevant part:
The prohibition against sale of less than an entire practice area protects those clients whose matters are less lucrative and who might find it difficult to secure other counsel if a sale could be limited to substantial fee-generating matters. 3
The prohibition on partial sales of an attorney?s practice may also reveal its reasoning behind disallowing an attorney?s return to private practice after the sale of his or her firm. As noted in Comment [1] to Rule 1.17, ?The practice of law is a profession, not merely a business. Clients are not commodities that can be purchased and sold at will.?4 Based on this language, it appears that allowing the sale of individual clients and particular areas of an attorney?s practice would be adverse to public policy, preventing a practitioner whose clients depend on that attorney from simply cashing out and starting over when challenges arise or to ?commoditize? clients. The same holds true for sales of less than the entire practice. The strong desire to protect the clients of solo practitioners is further evinced in Comment [5] to Model Rule 1.3.5 For more on the sale of a practice, see Question (Part II), infra.
It should be noted that Comment [2] to Rule 1.17 provides that, a ?[r]eturn to private practice as a result of an unanticipated change in circumstances does not necessarily result in a violation.?6 Thus, when enacting Rule 1.17, the door was left open for a potential return to private practice, albeit in limited circumstances. It is essential that ?unanticipated? circumstances must be truly so, confirmed by a showing of good faith meeting the definition set forth in ABA Opinion 90-357, and may not be used as a sham device to avoid compliance with Rule 1.17. Each attorney?s situation will be unique and the determination highly dependent on the specific facts of each case.
We conclude that in order to remain in the practice of law within the state (excepting the limited exceptions noted supra), Attorney H, as a solo practitioner, would have to retain an ownership stake in his practice. This Rule incentivizes the selling attorney to take on and properly mentor or otherwise train a new partner before making a total exit from the practice of law. The goal of such a provision is to ensure competent legal service as well as to aid the clients in the transition by slowly introducing them to, and acquainting them with, the new attorney. Attorney H then seemingly would be free to withdraw as a partner, relieving himself of some of the demands and rigors of ownership, while still practicing law in a more limited capacity.
Question (Part II)
Given that it would be improper under Rule 1.17 for Attorney H to sell his law practice and return to private practice in the state, would it be permissible for Attorney H to continue his practice but (1) begin ?farming his or her cases out? under a ?fee splitting? arrangement and (2) would he be able to receive percentages of said fees from those clients who, in the future, begin new cases with the lawyer that he referred them to?
Related Opinion(s)
Opinion #175: Lawyer Acting as Solo Practitioner and ?of Counsel? to Another Law Firm; Opinion #103: Splitting Fees Without Regard to Responsibility Assumed
Opinion
Fee-splitting arrangements are governed by Rule 1.5 and are not per se disallowed, but are governed by a rather strict set of requirements.7 Rule 1.5(e) provides in relevant part:
A lawyer shall not divide a fee for legal services with another lawyer who is not a partner in or associate of the lawyer?s law firm or office unless:
- after full disclosure, the client consents to the employment of the other lawyer and to the terms for the division of the fees, confirmed in writing; and
- the total fee of the lawyers does not exceed reasonable compensation for all legal services they rendered to the client.
If Attorney H?s client, after ?full disclosure . . . confirmed in writing[,]? ?consent[s] to the employment of the other lawyer and to the terms of the division of fees,? then Attorney H may, so long as the fee itself ?does not exceed reasonable compensation for all legal services . . . rendered to [that] client[,]? proceed with the fee splitting arrangement.8
It is important to note that in the event Attorney H were to receive referrals from the attorney(s) to whom he previously ?farmed? clients in exchange for Attorney H?s referrals, Rule 7.2 could be implicated due to the Maine Rules of Professional Conduct?s prohibition on exclusive reciprocal referral arrangements. 9
Assuming that Attorney H?s clients consent in writing, after full disclosure, to the proposed fee splitting arrangement, would Attorney H be able to receive a percentage of said fees from those clients who, in the future, begin new cases with the lawyer to whom he referred them?
This inquiry implicates both Rule 1.5 and Rule 1.17. Rule 1.5, discussed supra, does not prohibit the splitting of fees with ?another lawyer who is not a partner in or associate of the lawyer?s law firm or office[,]? given that particular requirements are fulfilled, but it does necessitate that the fee represent a ?reasonable compensation for all legal services [the attorneys] rendered to the client.?10 Though the Rules do not present an absolute bar to Attorney H ?farming out? his clients, the Rules do require that the fee be ?reasonable.?
Would Attorney H?s receipt of any fee for a matter in which he has had no involvement or performed any work be prima facie ?unreasonable?? Though Maine?s current Rules do not provide much guidance on this matter, there is some guidance available from the Maine Supreme Judicial Court. In 2005, the Court requested that the Advisory Committee on Professional Responsibility consider whether Maine should adopt the ABA Model Rule version of the fee division rule. The ABA model rule only allows fee sharing ?in proportion to the services performed by each lawyer? or if the referring lawyer ?assumes joint responsibility for the representation.?11 The Advisory Committee held an open forum on the issue soliciting suggestions from members of the Bar and ultimately decided that Maine?s existing version of the fee division rule was adequate.
Accordingly, the Commission finds that Maine?s Rules do not create a per se prohibition on the division of fees between Attorney H and the attorney who has received the ?farmed out? cases, so long as the fee is reasonable under Rule 1.5(a) and so long as the client has previously consented to the division of fees in writing.12
The Rule does not mention anything about receiving fees after Attorney H has left the practice of law altogether and has ceased to be a ?lawyer.?13 However, Rule 5.4 states, in relevant part:
A lawyer or law firm shall not share legal fees with a nonlawyer, except that:
- an agreement by a lawyer with the lawyer?s firm, partner, or associate may provide for the payment of money, over a reasonable period of time after the lawyer?s death, to the lawyer?s estate or to one or more specified persons;
- a lawyer who undertakes to complete unfinished legal business of a deceased lawyer may pay to the estate of the deceased lawyer that proportion of the total compensation which fairly represents the services rendered by the deceased lawyer. . . .14
Though the Rule contemplates the transfer of money in limited circumstances upon a lawyer?s death, the Rule otherwise explicitly bars an agreement such as the one proposed by Attorney H. Attorney H may no longer receive any portion of the fees generated by the clients that he or she has ?farmed out? once Attorney H has left the practice of law and has ceased to be a ?lawyer? while he is still alive.
As for any possibility of Attorney H receiving a portion of the fees generated by his ?farmed out? clients inter vivos subsequent to his exit from the practice of law, there exists only one allowable exception. Rule 1.17 allows Attorney H to sell, along with the entirety of his practice, the ?good will? associated with said practice.15 The sale of ?good will? inexorably includes a particular amount of prospective fees that the buyer expects to receive in the future as a result of the reputation garnered by the selling attorney during his or her tenure in a locale. There is no question that Attorney H could attempt to assign a present value to the prospective fees and include that value in a lump-sum purchase price for the entire firm, though the exact amount may be difficult to estimate. Aside from this limited exception, a non-lawyer would be explicitly precluded under Rules 1.5 and 5.4 from receiving any portion of the fees collected from his or her previously ?farmed out? clients for new matters commenced in the future.
1 Rule. 1.17, 1.17(a)-(b) (emphasis added).
2 It should be noted that the Rules are predicated by the following statement ?The specific rules of the Maine Rules of Professional Conduct are stated below. To aid in understanding of the rules, a Preamble from the Maine Task Force on Ethics precedes the rules, and the text of each rule is followed by comments and reporter?s notes. The Preamble, comments and reporter?s notes state the history of and reasons for recommending the rules, discuss the relation of the new rules to the current Code of Professional Responsibility, and offer interpretations of the new rules, but the Preamble, comments and reporter?s notes are not part of the rules adopted by the Court.?
3 Rule 1.17 cmt. 6.
4 Rule. 1.17 cmt. 1.
5 Rule. 1.3 cmt. 5 (?To prevent neglect of client matters in the event of a sole practitioner?s death or disability, the duty of diligence requires that each sole practitioner prepare a plan, in conformity with applicable rules, that designates another competent lawyer to review client files, notify each client of the lawyer?s death or disability, and determine whether there is a need for immediate protective action.?); see also Me. Bd. of Overseers of the Bar, Formal Op. 143 (1994) (?Disposition of Client Files on Death or Disability of Solo Practitioner?).
6 Rule. 1.17 cmt. 2 (emphasis added).
7 See Rule. 1.5.
8 Rule. 1.5 cmt. 7.
9 See Rule. 7.2.
10 Rule. 1.5 (e) (emphasis added).
11 Model Rules of Prof?l Conduct R. 1.5(e)(1).
12 See Rule. 1.5 (?A lawyer shall not make an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for expenses. A fee or charge for expenses is unreasonable when, after a review of the facts, a lawyer of ordinary prudence would be left with a definite and firm conviction that the fee or expense is in excess of a reasonable fee or expense. The factors to be considered in determining the reasonableness of a fee include the following: (1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly; (2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer; (3) the fee customarily charged in the locality for similar legal services; (4) the responsibility assumed, the amount involved and the results obtained; (5) the time limitations imposed by the client or by the circumstances; (6) the nature and length of the professional relationship with the client; (7) the experience, reputation, and ability of the lawyer or lawyers performing the services; (8) whether the fee is fixed or contingent; (9) whether the client has given informed consent as to the fee arrangement; and (10) whether the fee agreement is in writing.?).
13 Rule. 1.5(e) (?A lawyer shall not divide a fee for legal services with another lawyer who is not a partner in or associate of the lawyer?s law firm or office unless . . .?) (emphasis added).
14 Rule. 1.5(a).
15 See Rule. 1.17.
Enduring Ethics Opinion
Opinion #212. Representing a Seller of Structured Settlement Payments: Professional Responsibilities
Issued by the Professional Ethics Commission
Date Issued: September 2, 2015
SUMMARY: Representation of a seller of structured settlement payments is a unique, special incidence of professional service, involving a concurrent conflict of interest. A lawyer representing a seller of future structured settlement payments must comply with the requirements of the Protection of Beneficiaries of Structured Settlements Act (24-A M.R.S. § 2241 et seq.) which mandates that:
- seller?s counsel must be engaged by the seller of payments and not by the purchaser or anyone affiliated with the purchaser;
- seller?s counsel cannot be paid for his services to the seller by the purchaser; and
- counsel?s compensation for services to the seller cannot be affected in any way by whether the sale is or is not consummated.
Counsel must also consider the necessity of complying with the concurrent conflict of interest prescriptions of Rules 1.7 and 1.8(f) of the Maine Rules of Professional Conduct, which, inter alia, may require the client?s written consent to counsel?s concurrent conflict of interest and counsel?s careful consideration of whether the representation is consistent with counsel?s professional competencies and professional judgment.
More than fifteen years ago, the State of Maine recognized the perils which can arise when a holder of structured settlement payments seeks to sell future payments for immediate cash and enacted the Protection of Beneficiaries of Structured Settlements Act (P. L. 1999, c. 268, § 2) codified at 24-A M.R.S. § 2241 et seq.1 (hereinafter called ?the Act? or the ?statute?). This statute not only requires judicial approval for a sale of future payments, but also mandates that the seller of payments must have received ?independent professional advice? from an attorney or other licensed professional. As a result, Maine lawyers are frequently asked to give professional advice to persons who propose to sell future structured settlement payments.
This advisory opinion addresses the professional responsibilities which attend representing a seller of structured settlement payments. The inquiry begins with the attorney?s engagement to represent the seller of payments. The nature and the scope of this engagement is specifically prescribed in the Act.
As applied to attorneys, the Act defines ?independent professional advice? to mean ?the advice of an attorney?
- Who is engaged by a payee [i.e. the seller of payments]2 to render advice concerning the legal, tax and financial implications of a transfer of structured settlement payment rights;
- Who is not in any manner affiliated with or compensated by the transferee of that transfer [i.e. the purchaser]3; and
- Whose compensation for rendering advice is not affected by whether a transfer occurs or does not occur.? 24-A M.R.S. §2241 (7). Bracketed language supplied.
These statutory requirements impose specific, non-waivable restrictions on counsel?s service to a seller of structured settlement payments.
First, seller?s counsel must be engaged by the seller, not by the purchaser or anyone acting on behalf of the purchaser. Furthermore, seller?s counsel cannot be in ?in any manner affiliated? with the purchaser. The term ?affiliated with the purchaser? is not defined in the Act. The Act?s purpose, however, is clear: the ?independent professional advice? to be given to a seller of payments must in fact be independent and must not be affected or influenced in any way by a relationship of any kind between the seller?s attorney and the purchaser. As it sometimes happens that a seller is referred to counsel by the purchaser, counsel must clearly weigh whether acceptance of that referral from the purchaser creates a prohibited affiliation. Acceptance of an isolated, single referral may not be problematic, but acceptance of such referrals from a purchaser on a regular or repeated basis could perhaps create an expectation or a relationship which becomes a prohibited affiliation.
Second, seller?s counsel cannot be ?in any manner?compensated? by the purchaser. Thus stated, the source of seller counsel?s compensation is unequivocally circumscribed: it cannot be paid in any way or in any measure by the purchaser.
The third requirement, i.e., that counsel?s compensation for service to his client cannot be affected by whether the ?transfer? is or is not consummated, is more complicated. The term ?transfer? is defined in the Act to mean ?any sale, assignment, pledge, hypothecation or other form of alienation or encumbrance made by a payee for consideration.? 24-A M.R.S. § 2241 (18). This definition is sufficiently broad to reach every conceivable form of sale or transfer of future payments. In any form of sale or transfer, counsel?s compensation, including the right to receive it, the certainty of payment, and its amount, cannot be contingent upon or even affected by whether the transaction does or does not occur.
These statutory requirements impose a differing and, in some ways, more onerous burden on seller?s counsel than do the complementary Maine Rules of Professional Conduct. Two Rules of Professional Conduct4 are relevant, both addressing concurrent conflicts-of-interest.
Generally, Rule 1.7, entitled ?Conflict-of-Interest: Current Clients,? prohibits representation of a client when ?there is a significant risk that representation [of the client] would be materially limited ?by a personal interest of the lawyer.? Subsection (f) of Rule 1.8, entitled ?Conflict-of-Interest: Current Clients: Specific Rules,? identifies payment of the lawyer by someone other than the client to be a specific incidence of a concurrent conflict of interest. Both rules include exceptions. Taken together, the exceptions to Rules 1.7 and 1.8 (f) permit an attorney?s representation of a seller of structured settlement payments where:
- the client gives informed written consent to the concurrent conflict;
- the lawyer reasonably believes that he or she can give competent and diligent representation to the client;
- there is no interference with the lawyer?s professional judgment or the lawyer-client relationship; and
- the client?s secrets and confidentiality are preserved.
Rule 1.7, however, also provides that a lawyer may not represent a client in circumstances of concurrent conflict ?if the representation is prohibited by law.?
The Protection of Beneficiaries of Structured Settlements Act essentially recognizes representation of a seller of structured settlement payments to be a unique, special incidence of professional representation involving a concurrent conflict of interest. Representation of such a seller of structured settlement payments is essentially prohibited unless, without exception, (1) the attorney?s engagement is with the seller alone, (2) the attorney is not affiliated with or compensated by the buyer, and (3) the attorney?s compensation for the representation is unaffected in any way by whether the sale of payments does or does not occur. Representation of a seller of structured settlement payments in the absence of these special restrictions is effectively a representation prohibited by the Act and thus ?prohibited by law.? When these specific statutory prescriptions for this special representation are met, the circumstances which implicate counsel?s personal interests and create a concurrent conflict of interest are eliminated. The Act contemplates that seller?s counsel, once these prescriptions obtain, has no professional duty to anyone other than the seller. Counsel is not subject to the conflict of interest which would be created if counsel had an affiliation with or is to be paid by the buyer and can give advice to the client without being influenced by whether or not the lawyer will be paid.
It should be noted, however, that circumstances implicating the lawyer?s personal interest may remain even after the statutory requirements for representation have been satisfied. For example, payment of counsel?s compensation for representing the seller could be unconditionally guaranteed or payable by a third party unaffiliated with the purchaser. If such a third party assumes the duty to pay the lawyer?s compensation, the lawyer will be obliged to recognize yet another potential source of concurrent conflict of interest, to obtain the client?s informed consent in writing, and to observe the other requirements of Rules 1.7 and 1.8(f), mentioned above.
Whatever arrangements are made, counsel must be sure that all requirements of the Act and of the applicable Rules of Professional Conduct are satisfied from the outset of any engagement to represent a seller of payments. As noted above, in some cases, counsel may need to consider whether, in addition to complying with the representation requirements of the Act, the client seller?s informed consent must be obtained in writing to satisfy Rule 1.7 and/or Rule 1.8(f). In addition, seller?s counsel, before accepting such an engagement, must carefully evaluate whether he or she is competent to meet the statutory requirement of rendering advice ?concerning the legal, tax and financial implications of a transfer of structured settlement payment rights?. Rule 1.1 requires that:
?A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.?
Counsel would do well to consider not only Rule 1.1, but also the accompanying commentary in assessing whether he or she can faithfully represent a seller of structured settlement payments. In doing so, counsel?s ability to provide the required ?independent professional advice? including not only legal, but also tax and financial advice should be carefully assessed in light of the specific requirements of the Act, the definition of ?independent professional advice,? the statutory standards of review which will be applied under the Act by the reviewing court, and the specific findings the court must make before approving a sale of future payments. Counsel should fully understand the transaction proposed by the client and should be aware that not all sales of future payments are permissible as a matter of law.5 Counsel should also be fully equipped to understand and explain to the client the serious financial consequences which will attend the sale if it should be consummated.
1 Maine is one of forty-eight states which has enacted an SSPA (shorthand for what is known as a structured settlement protection act.)
2 In the Structured Settlements Protection Act, a seller of payments is called ?the payee.? More specifically, ?[p]ayee means an individual who is receiving tax-free damage payments under a structured settlement and proposes to make a transfer of payment rights under that settlement.? 24-A M.R.S. § 2241 (9).
3 A purchaser of structured settlement payments is called the ?transferee.? ?Transferee? means a person that becomes entitled to receive structured settlement payment rights as a result of a transfer agreement. 24-A M.R.S. § 2241 (20).
4 As used herein, the term ?Rule? refers to the Maine Rules of Professional Conduct, effective August 1, 2009. The Rules of Professional Conduct can be found online at the following URL: http://www.mebaroverseers.org/attorneyregulation/maineconduct_rules.html .
5 As an example, a sale of structured settlement payments resulting from settlement of a Maine workers compensation claim may be prohibited, as it may contravene applicable workers compensation law forbidding assignment of future payments. See, e.g. In re: Donald Richardson, No. Civ. A. CV-05-130, 2005 WL 3804993 (Me. Super., Nov.3, 2005); see also Rapid Settlements, Ltd. v. United States Fidelity and Guaranty Company and Lonnie L. Hamm, 672 F. Supp. 2d 714 (D. Md. 2009).
Enduring Ethics Opinion
Opinion #213. Confidentiality Restrictions Concerning Old Inactive Client Files Having Potential Historical Significance
Issued by the Professional Ethics Commission
Date Issued: April 6, 2016
Bar Counsel has inquired whether, and under what circumstances, a law firm may consider donating old, inactive legal files that may have historical significance to a library or educational institution. As a matter of background, the attorney holds a variety of client files, many of which were generated by a single family, dealing with a public undertaking of significant historical interest in the attorney?s area. The files range back as early as the mid- to late 1800s, and run through the early to mid-1900s. The single family referenced above has indicated their consent, but for many of the other files, both the clients as well as the attorneys who were involved in the legal work generating the files are long since deceased, and it may be difficult to find a representative of either the attorneys or the families. Given the passage of time, and the historical import of the files, may the firm turn over these client files to a library or educational institution?
Despite the historical significance of the files, the answer to the inquiry is that the attorney?s and the firm?s obligations of confidentiality survive death. The attorney must conduct an examination of the files to ascertain that the information contained is not a ?confidence? or ?secret? of the client, in which case it may be disclosed. Alternatively, the attorney, based upon all of the information available, must be able to make a reasonably reliable determination that the original client consented to disclosure or that disclosure is authorized under Rule 1.6(a)(ii).
An attorney?s obligation to hold and keep the confidences and secrets of a client in a confidential manner is codified generally in Rule 1.6 of the Maine Rules of Professional Conduct. In relevant part, Rule 1.6 states as follows:
RULE 1.6 CONFIDENTIALITY OF INFORMATION
- A lawyer shall not reveal a confidence or secret of a client unless, (i) the client gives informed consent; (ii) the lawyer reasonably believes that disclosure is authorized in order to carry out the representation; or (iii) the disclosure is permitted by paragraph (b).
- A lawyer may reveal a confidence or secret of a client to the extent the lawyer reasonably believes necessary:
- to prevent reasonably certain substantial bodily harm or death;
- to prevent the client from committing a crime or fraud that is reasonably certain to result in substantial injury to the financial interests or property of another and in furtherance of which the client has used or is using the lawyer's services;
- to prevent, mitigate or rectify substantial injury to the financial interests or property of another that is reasonably certain to result or has resulted from the client's commission of a crime or fraud in furtherance of which the client has used the lawyer's services;
- to secure legal advice about the lawyer's professional obligations;
- to establish a claim or defense on behalf of the lawyer in a controversy between the lawyer and the client, to establish a defense to a criminal charge or civil claim against the lawyer based upon conduct in which the client was involved, or to respond to allegations in any proceeding concerning the lawyer's representation of the client;
- in connection with the sale of a law practice under Rule 1.17A or to detect and resolve conflicts of interest arising from the lawyer's change of employment or from changes in the composition or ownership of a firm. In those circumstances, a lawyer may disclose with respect to each affected client the client's identity, the identities of any adverse parties, the nature and extent of the legal services involved, and fee and payment information, but only if the information revealed would not compromise the attorney-client privilege or otherwise prejudice any of the clients. The lawyer or lawyers receiving the information shall have the same responsibilities as the disclosing lawyer to preserve the information regardless of the outcome of the contemplated transaction; or
- to comply with other law or a court order.
- Before revealing information under paragraph (b) (1), (2), or (3), the lawyer must, if feasible, make a good-faith effort to counsel the client to prevent the harm and advise the client of the lawyer's ability to reveal information and the consequences thereof. Before revealing information under paragraph (b)(5) or (6), in controversies in which the client is not a complainant or a party, the lawyer must, if feasible, make a good faith effort to provide the client with reasonable notice of the intended disclosure.
- As used in Rule 1.6, "confidence" refers to information protected by the attorney-client privilege under applicable law, and "secret" refers to other information relating to the representation if there is a reasonable prospect that revealing the information will adversely affect a material interest of the client or if the client has instructed the lawyer not to reveal such information.
The obligations imposed by Rule 1.6 extend indefinitely. They survive the death of the attorney, as well as the client, and may continue after the dissolution of a corporate client. Absent informed consent from the affected clients or some other applicable exception, a lawyer may not divulge information that constitutes a ?confidence? or ?secret? as defined above. This would mean that an individualized, document-by-document assessment would need to be undertaken in order to determine whether the particular document and the information within it constituted a ?confidence? or ?secret? of the client at the time it was made.
The Commission is not unmindful that this opinion may well restrict information that may have independent historical value. However, those values, though significant, do not trump the attorney?s obligation to keep the client?s confidences and secrets confidential. See, e.g., Oregon Formal Opinion 32005-23 (revised 2014); Virginia Legal Ethics Opinion #1307, dated November 13, 1989; Opinion #128, Committee of Legal Ethics of the District of Columbia Bar, dated July 19, 1983; and Oklahoma Bar Association Ethics Opinion #301, adopted June 16, 1983.
If the attorney believes that the files may contain a variety of matters that do not constitute confidences or secrets, the attorney nonetheless must make that determination consistent with Rule 1.6(d). A waiver by the family, the Personal Representative of an estate (to the extent one still exists) or similar person appearing to stand in the shoes of a deceased client is not sufficient to constitute a waiver of the attorney?s obligations of confidentiality. See Professional Ethics Commission Advisory Opinion # 192: Deceased client: Confidential information requested by Personal Representative, dated June 20, 2007.
We would note that to the extent the materials maintained by the attorney and that attorney?s law firm include files that are clearly segregated and marked in a manner that would make them non-legal (for example, copies of ancient and public documents, information that was directed to others outside of the attorney/client privilege, such as correspondence to third parties, and similar documents), those items may fall outside of the definition of ?confidence? or ?secret.? However, the attorney must be mindful, in making an analysis under Rule 1.6(d), that the determination of whether a client considered materials to be a ?confidence? or ?secret? is a subjective one unique to the client. Absent the attorney being able to make a reasonably reliable determination that the client did not consider the information to be confidential, disclosure is prohibited by Rule 1.6. See Board of Overseers of the Bar v. Turesky, File No. 93-S-124, Report dated April 26, 1995.
Lastly, it should be noted that in the event that a review is contemplated, it must be undertaken by the attorney and at that attorney?s direction. It would not be proper to allow any non-lawyer or other personnel not affiliated with the lawyer?s practice to review the files regardless of whether the outside party (such as a representative of a charitable or educational institution) agreed to hold any questionable materials confidential. See Virginia Legal Ethics Opinion 1307, supra.
In short, absent a reasonably reliable indication of informed consent or some other exception to the requirements of Rule 1.6 or a meaningful ability to determine that the materials held by the attorney were not client ?confidences? or ?secrets,? the attorney may not divulge the confidential materials in that attorney?s possession despite the passage of time and the potential historical significance of the materials.
Enduring Ethics Opinion
Opinion #214. Providing Advice Concerning Maine?s Medical Marijuana Act ? Proposed Revisions to M. R. Prof. Conduct 1.2(e)
Vacated by Opinion #215 (03/01/2017)
Issued by the Professional Ethics Commission
Date Issued: May 4, 2016
Opinion 199 was issued on July 7, 2010. That opinion responded to a request from Bar Counsel to the Commission to render an opinion concerning the general parameters within which an attorney may, consistent with the Maine Rules of Professional Conduct, represent or advise clients under Maine?s Medical Marijuana Act because of the interplay of that law with the Federal prohibition against the distribution and possession of marijuana.
Opinion 199 cited a guidance, dated October 19, 2009, from the United States Deputy Attorney General which directed United States Attorneys not to focus federal resources on individuals whose actions are in ?clear and unambiguous compliance with existing state laws providing for the medical use of marijuana.? That guidance, however, made it clear that the Federal law against the distribution of marijuana was still in effect, recognized that ?no State can authorize violations of federal law? and that the guidance did ?not ?legalize? marijuana or provide a legal defense to a violation of federal law, nor is it intended to create any privileges, benefits, or rights, substantive or procedural, enforceable by any individual, party or witness in any administrative, civil or criminal matter.? The Department of Justice (DOJ) has issued two subsequent guidance memoranda, both of which essentially reaffirm the 2009 guidance.
The issue presented which led to Opinion 199 was whether and how an attorney might act in regard to a client whose intention is to engage in conduct which is permitted by state law and which is a federal crime, even though it might not currently be prosecuted under federal law. The opinion cited Maine Rule of Professional Conduct 1.2(e), which states:
A lawyer shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent, but a lawyer may discuss the legal consequences of the proposed course of conduct with a client and may counsel or assist a client to make a good faith effort to determine the validity, scope, meaning or application of the law. M. R. Prof. Conduct 1.2 (e)
The opinion noted that when the proposed client conduct is known to be a violation of federal criminal law, attorneys may counsel or assist a client in making good faith efforts to determine the validity, scope, meaning or application of the law but are forbidden from counseling a client to engage in the business or to assist a client in doing so. The opinion concluded that
where the line is drawn between permitted and forbidden activities needs to be evaluated on a case by case basis. Bar Counsel has asked for a general opinion regarding the kind of analysis which must be undertaken. We cannot determine which specific actions would run afoul of the ethical rules. We can, however, state that participation in this endeavor by an attorney involves a significant degree of risk which needs to be carefully evaluated.
The Commission feels it is appropriate to revisit this opinion and to offer additional guidance to individuals and entities seeking legal advice to assist them in navigating the statutory and regulatory structure posed by the Maine legislation. In doing so, the Commission notes that there are two different issues to be addressed: 1) whether Maine lawyers can advise clients on how to conform their conduct to the law; and 2) whether a Maine lawyer may provide services that go beyond the provision of legal advice to medical marijuana clients, such as negotiation of contracts and drafting of legal documents for such a client in assisting the client in establishing a medical marijuana business.
With regard to the first question, the Commission notes that since Opinion 199 was issued, several other states have had occasion to address state legalization of medical marijuana and its impact on Rule 1.2. In that regard, a consensus seems to have developed that lawyers should be permitted to advise clients on how to conform their conduct to the law and that the provision of legal advice to clients involved in the medical marijuana trade falls squarely within that exception.
The second part of the analysis is whether Maine lawyers are permitted to go beyond merely providing legal advice to determine the validity, scope, meaning or application of the law to the point of advising clients on how to conform their conduct to the law? This would include, for instance, the negotiation of contracts and the drafting of legal documents to assist a client in establishing a medical marijuana business. The issue is that an attorney who performs such work is assisting the client in conduct that violates federal criminal law, even though such conduct is permissible under state law.
Other states have reviewed this distinction and determined that lawyers may ethically assist a client in legal matters expressly permissible under state law even if it may violate applicable federal law within certain parameters. For instance, Arizona concluded that such conduct is permissible, but only when three requirements are met: (1) there are no court decisions holding that provisions of the law are preempted, void, or otherwise invalid; (2) the lawyer reasonably concludes that the client is fully complying with state law requirements; and (3) the lawyer advises the client about possible federal law violations or recommends that the client seek other legal counsel to do so. Likewise, Washington added a new comment to its Rule 1.2 in 2015 as follows: ?At least until there is a change in federal enforcement policy, a lawyer may counsel a client regarding the validity, scope, and meaning of Washington Initiative 502 and may assist a client in conduct that the lawyer reasonably believes is permitted by this statute and the other statutes, regulations, orders and other state and local provisions implementing them.? In support of the comment, Washington noted that (1) the state Governor and Attorney General were on board; (2) the state executive branch was actively involved in implementation of the relevant laws; (3) since the adoption of the statute the federal authorities had not sought to impair the statute?s operation; and (4) Congress has prevented the DOJ from using appropriated funds to prevent states from implementing medical marijuana laws. In Colorado, the state had taken a similar position to Maine?s in 2013 and determined that lawyers could represent clients in proceedings related to past activities; advise government clients, argue, or lobby for certain rules, regulations, or standards; and could advise clients about consequences of marijuana use or commerce under Colorado or federal law, but could not assist clients in structuring or implementing transactions that violated federal law and could not represent a lessor or supplier in the transaction if the lawyer knew the client?s intended use of the property or supplies. In 2014, however, the state added a comment to its rule changing its position: ?A lawyer may counsel a client regarding the validity, scope, and meaning of Colorado constitution article XVIII, and may assist a client in conduct that the lawyer reasonably believes is permitted by these constitutional provisions and the statutes, regulations, orders, and other state or local provisions implementing them. In these circumstances, the lawyer shall also advise the client regarding related federal law and policy.? Similar conclusions have been reached by Nevada and Oregon.
Based on a re-evaluation of Opinion 199, pursuant to Maine Bar Rule 8(d)(3) the Commission now recommends that M. R. Prof. Conduct 1.2(e) be amended consistent with that change enacted by other states to include the following additional language:
A lawyer shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent, but a lawyer may (1) discuss the legal consequences of any proposed course of conduct with a client; (2) , counsel or assist a client to make a good faith effort to determine the validity, scope, meaning or application of the law; or(3) counsel or assist a client regarding conduct expressly permitted by Maine law, provided that the lawyer counsels the client about the legal consequences, under other applicable law, of the client?s proposed course of conduct.
In reaching this recommendation, the Commission emphasizes, as was done in Illinois, that a Maine lawyer who represents and counsels medical marijuana clients should stress the importance of the client?s conformity with the law and regulations. The Commission further cautions that because the DOJ guidance on prosecutorial discretion is subject to change, lawyers providing advice in this field should be up to date on federal enforcement policy, as well as any modifications of federal and state law and regulations.
Enduring Ethics Opinion
Opinion #146. Obligation to Return Inadvertently Disclosed Privleged Documents
Vacated by Opinion #172 (03/07/2000)
Issued by the Professional Ethics Commission
Date Issued: December 9, 1994
Pursuant to Maine Bar Rule 11(c)(l), Bar Counsel has requested an opinion based on the following set of facts.
Counsel A and Counsel Z represented adverse parties in a lawsuit. In the course of pretrial discovery, Counsel Z received a number of documents from Counsel A. Among those items was a copy of a document that is clearly privileged. According to the facts posed by Bar counsel, Counsel Z knew or should have known1 that the disclosure of the document was inadvertent.
Bar counsel poses the following questions:
- May Counsel Z use the privileged memorandum or the information in the privileged memorandum in representing her client and if so to what extent?
- Must Counsel Z notify Counsel A of his error?
At the outset, we note that the discoverability and admissibility of the document in question are governed by the Rules of Civil and Criminal Procedure and Evidence. Interpretation and application of those rules are beyond the jurisdiction of this Commission. Under the rules governing this Commission as established by the Supreme Judicial Court, the sole consideration for us is whether there are any ethical limitations in the Maine Bar Rules on Counsel Z?s use of the document.
For the reasons stated herein, the Commission concludes that Counsel Z may use the document and the information contained in it to the extent permitted by the rules of procedure and evidence, but that she should notify Counsel A, the sending lawyer, of the fact that the document has been received and provide a copy of the document to Counsel A on request.
In so holding, we are mindful that the ABA Standing Committee on Ethics and Professional Responsibility reached a contrary result in Formal Opinion 92 368. We do not find that Opinion to be persuasive. The ABA Committee was unable to cite any specific provision of the Model Rules of Professional Conduct in support of its conclusion. Indeed, Committee Opinion 92 368 expressly acknowledged that it was not based on any ?black letter of the Model Rules?. Instead, the ABA Committee?s analysis referred to other general principles and rules of law, including the rules regarding attorney-client privilege, the substantive law regarding inadvertent waiver of the attorney client privilege, the law of bailments, and what it characterized as other unspecified ?ethical restraints on uncontrolled advocacy?, to conclude that the receiving lawyer had a professional obligation to return the privileged documents to opposing counsel and that failure to do so was an ethical violation.
More recently the Ohio Supreme Court Board of Commissioners on Grievances and Discipline in opinion 93 11 (December 3, 1993) expressed disagreement with ABA opinion 92 368. The Ohio Board stated that it ?was not persuaded by A.B.A. Formal Opinion 92 368" which was based on an interpretation of the ABA Model Rules of Professional Responsibility. However, the Ohio Board went on to state that the receiving lawyer, while free to use the information and to disclose the same to his client, was obligated to inform opposing counsel of the disclosure of the confidential information. The Ohio Opinion did not cite any Rule in support of its conclusion.
We disagree with the ABA Opinion and agree with the Ohio Board, although for different reasons. In our view, the standards of ethical conduct in Maine are to be drawn from the codified provisions of the Maine Bar Rules. This Commission is limited to rendering advisory Opinions ?on matters involving the interpretation and application of the Code of Professional Responsibility.? Maine Bar Rule 11(c). We are not free to read into those Rules limitations on conduct that have not been stated expressly. However theoretically appealing we might find the conclusion reached by the ABA Committee or the sentiments expressed by the other members of this Commission, we believe that the approach to interpretation and application of the Maine Bar Rules adopted by both the ABA Opinion and the other Commission members are not appropriate for this Commission. ?In fairness to attorneys who look to [the Bar Rules] for guidance, the Rules must provide a clear and consistent articulation of what constitutes appropriate professional standards.? Board of Overseers v. Rodway, 470 A.2d 790, 791 (Me.1984). The fundamental purpose behind the creation of the Bar Rules was to establish a clear codified set of standards for attorneys, the violation of which could result in professional sanctions. With that purpose and the Law Court?s directive in Rodway in mind, we strongly believe that this Commission is not free to add ethical limitations not expressed by the Bar Rules.
In reviewing the Maine Bar Rules, the only applicable provisions are Bar Rules 3.2(f)(3) and 3.2(f)(4). Rule 3.2(f)(3) states that a lawyer shall not ?engage in conduct involving dishonesty, fraud, deceit or misrepresentation.? Nothing in the history at Rule 3.2(f)(3) indicates that it was intended to prohibit a lawyer from retaining and using a document voluntarily but mistakenly provided by opposing counsel. We do not believe it is dishonest, fraudulent or deceitful within the meaning of this rule to take advantage of the mistake of opposing counsel. In the recent decision of Aerojet General Corporation v. Transport Indemnity Insurance, 22 Cal.Rptr. 862 (1993) involving a similar fact situation, a California court similarly concluded that the receiving lawyer was permitted to retain the mistakenly sent document and was not required to notify the sending lawyer of the receipt of the document. In so holding, that court said:
?There is no State Bar rule of professional conduct, no rule of court nor any statute specifically addressing this situation and mandating or defining any duty under such circumstances.?
Rule 3.2(f)(4) states that ?A lawyer shall not:
. . .(4) engage in conduct that is prejudicial to the administration of justice.?
While that rule is very broad, nothing in its history suggests that the language of the Rule on its face would apply to the question before us. So long as use of the memorandum is permitted by the Rules of Evidence or Procedure, 2 use of the memorandum cannot be said to be prejudicial to our adversary system of litigation. We do not believe that Rule 3.2(f)(4), standing alone, requires Counsel Z to return the document to the sending lawyer, nor does that rule prohibit a lawyer from taking advantage of any other mistake of opposing counsel such as the failure to (1) plead an affirmative defense, (2) assert a counterclaim, (3) argue a theory of law, (4) assert an evidentiary objection at trial, (5) introduce an essential piece of evidence or (6) demand an important provision during contract negotiations.
Although we believe that Rules 3.2(f)(3) and (4) do not on their face require return of the document in issue, we are mindful that in interpreting the Bar Rules we cannot ignore the substantive law of Maine, specifically Title 17 A M.R.S.A. § 356.3 That statute makes it a crime to retain mistakenly delivered property of another. It is unclear to the Commission how that statute would apply to the present facts. Reasonable arguments can be made as to whether that law applies to documents obtained in pretrial discovery. Unfortunately there is no judicial guidance on its application to facts such as those posed to us.
However, we must acknowledge the real possibility that this law could apply. If the statute did apply to these facts, then we believe that it would necessarily follow that to retain documents in violation of state law would be ?dishonest? under Rule 3.2(f)(3). Further, we think that a violation of Section 356 would also violate Rule 3.2(f)(2) (?A lawyer shall not ... engage in illegal conduct that adversely reflects on the lawyer?s honesty, trustworthiness or fitness as a lawyer in other respects.?).
Since the jurisdiction of this Commission is by rule expressly limited to interpretation of the Bar Rules, and since we have consistently declined to interpret statutes, we are unable to determine whether Section 356 would apply in this case. However, because of the possibility that the statute could apply to documents received in discovery, we conclude that the prudent course is to advise the receiving lawyer to notify the sending lawyer of the receipt of privileged documents. Further, if requested by the sending lawyer, the receiving lawyer should send a copy of the document to the sending lawyer in order to ensure that there is no misunderstanding about the document in issue. Such notification will afford the sending attorney the opportunity to take any action deemed appropriate, including for example moving for return of the document or seeking a judicial construction of the application of Section 356, and will negate the possibility that the receiving lawyer ?intended to deprive the owner? of property within the meaning of § 356(2). Accordingly, on the facts of the case presented to us, we hold that Counsel Z may retain the inadvertently delivered privileged document and use it in any way permitted by the Rules of Evidence and Procedure, but Counsel Z should notify Counsel A of the receipt of the document and send a copy of the document to opposing counsel on request.
We are aware that a single Justice of the Supreme Judicial Court has held that the intentional and surreptitious removal and photocopying of trial materials of opposing counsel is a violation of Bar Rules 3.4(f)(3) and 3.4(f)(4), the same rules at issue in this opinion. Board of Overseers of the Bar v.Ebitz, BAR 92 10 (l992) 4. However, the facts in Ebitz are very different from those considered in this Opinion. Attorney Z has not engaged in any affirmative misconduct to obtain the privileged document, but rather has been the passive beneficiary of opposing counsel?s error. 5 [ On the facts before us, the document came into the hands of Counsel Z from opposing counsel. In such a circumstance the Maine Bar Rules do not prohibit Counsel Z from retaining and using the documents so long as she notifies Counsel A of the inadvertent disclosure and provides a copy of the document to Counsel A on request.
We recognize that the other members of the Commission would go further and require Counsel Z to return the inadvertently sent documents.6 That position and the ABA Committee Opinions are based in part on the view that lawyers owe to each other a level of courtesy that obligates them to return an inadvertently disclosed privileged document. That general philosophy also appears to form the foundation for the views of the other Commission members. However appealing such rationale is in theory, we find no support for that conclusion in the Maine Bar Rules. As the court stated in Aerojet General: The attorney client privilege is a shield against deliberate intrusion; it is not an insurer against inadvertent disclosure.22 Cal. Rptr. at 866. We agree. We join the other Commission members in their concern for maintaining and improving the level of civility, honor and common courtesy in the profession, however we do not believe that we can enforce those values through the Bar Rules in the absence of specific provisions to that effect in those Rules. Nonetheless, we think that this reading of the Bar Rules in conjunction with § 356 will also help to promote those values.
Four members of the eight member Professional Ethics Commission subscribe to the foregoing opinion. One member of the Commission concurs in the result reached, but is of the view that the obligation of the receiving lawyer to inform the sending lawyer of receipt of the document and provide a copy of the document to the sending lawyer on request is supported by Bar Rule 3.2(f)(3) (prohibiting conduct ?that involves dishonesty?) regardless of 17 A M.R.S.A. § 356, and notes that in any event, following such disclosure by the receiving lawyer, either party may file a motion with the court with respect to the use of the document in litigation or otherwise under the circumstances of the particular case.
Three members of the Commission dissent from the plurality opinion authorizing the use of the inadvertently obtained privileged materials.
In the debate about how the ethical question discussed in the majority opinion should be resolved, several Commission members indicated that, acting as individuals, they would return the papers as requested. However, absent any specific disciplinary rule which required otherwise, these members felt constrained to follow the client?s wishes that they retain the documents even though they would have preferred to do otherwise.
In an article entitled ?Uncivil Law? appearing in the winter, 1994, edition of the Boston College Magazine, former B.C. Law School Dean Dan Coquillette states that the ?legal culture? must change before the public?s perception of lawyers will improve. He suggests that attorneys cannot separate their private views of justice and morality from the standards which they practice as professionals: One lawyer I talked to who was very embarrassed about the profession said to me, ?You know, one thing I keep telling myself is that being a lawyer is what I do. It?s not what I am.? I said, ?You?ve got it wrong. Aristotle said you are what you do every day. You are the product of what you do day in, day out, hour in, hour out. You can?t say that being a lawyer is what you do and not what you are . . . There?s no way you can split these roles. If you act like a jerk in court, you?re not an aggressive advocate pursuing an assertive strategy?you?re just a jerk.? Id at p. 42. These views led Dean Coquillette to conclude that an attorney who had been asked by opposing counsel to return unopened a missent confidential letter could not ethically permit himself to be guided by his client?s desire that he not do so. Indeed, Dean Coquillette attributes much of the profession?s present image problem to its failure to maintain a proper balance between the duty to uphold the system of justice embodied in the lawyers? oath, and the obligation to promote the interests of individual clients. The foregoing considerations suggest that conduct which attorneys would find repugnant in their private lives, e.g., refusing to return something which clearly belongs to another, should not be tolerated on a professional level. It must be conceded that no disciplinary rule can be cited which specifically requires that the documents be returned in this case over the client?s objection. However, the Commission?s reluctance to rely on generalized rules of conduct to resolve specific ethical questions should not deter us in this instance from holding that failure to return the confidential letter in this case would be ?prejudicial to the administration of justice? and therefore violate Rule 3.2(f)(4). See also Me. Bar R. 3.1(a).
Our inability to identify a specific rule condemning such conduct would presumably not prevent the majority from requiring that the document be returned if it had been taken from Attorney A?s file by a disgruntled staff member and sent to Attorney Z, or if it had been picked up from counsel table and copied by the opposing attorney. See Board of Overseers v. Ebitz, BAR 92 10 (1992). It is obvious, therefore, that the majority would at least in some cases be willing to condemn professional conduct even without benefit of a specific rule upon which to base its conclusion. Since we are, therefore, engaged in an exercise in line drawing to determine what circumstances would require the return of the confidential material even though no disciplinary rule specifically requires it, these dissenting members would draw the line at holding that the privileged information must be returned in those cases in which it is clear from the circumstances that the disclosure was unintended. Although we would resolve the hypothetical presented to the Commission by Bar Counsel in this case by requiring Attorney Z to return the privileged documents and make no further use of them in the litigation, it is conceded that cases may arise in which Attorney Z?s ethical obligation will not be so clear. After all, Attorney Z should not be expected to rectify every mistake made by opposing counsel in the course of litigation. In those situations in which an attorney is unclear whether an opponent?s inadvertent disclosure gives rise to an ethical duty to keep the information confidential, the attorney should request the court having jurisdiction of the matter for instruction as to how to proceed.
1In requesting this Opinion Bar Counsel has not indicated the grounds for the factual statement that Counsel Z ?should have known? that the disclosure by Counsel A was ?inadvertent.? Nevertheless, the Commission answers this Request based on the facts as posed by Bar Counsel. We do not express any view as to the circumstances under which an attorney ?should know? of another attorney?s inadvertent error.
2The Commission is aware that at least one court in this jurisdiction has expressly held that inadvertent disclosure of privileged documents constitutes a waiver of any privilege. See the unreported opinion of the U.S. District Court in F.D.I.C. v. Singh, et al. Civil No. 91-0057-P-C (January 10, 1992). Such holding, however, appears to be the minority view. See W. Ayers, Attorney Client Privilege: The Necessity of Intent to Waive the Privilege in Inadvertent Disclosure Cases, 18 Pac.L.J. 59(1986).
3That statute provides:
A person is guilty of theft if:
He obtains or exercises control over the property of another which he knows to have been lost or mislaid or to have been delivered under a mistake as to the identity of the recipient or as to the nature of the amount of the property; and
With the intent to deprive the owner of the property at any time subsequent to acquiring it, he fails to take reasonable measures to return it.
4See also the similar decision in Lipin v. Bender, 597 N.Y.S.2d 340 (1993).
5The conclusion expressed in this Opinion is expressly limited to the facts presented. We specifically decline to indicate our view on other facts, for example: (1) if Attorney Z received a call from Attorney A telling her that he had sent a package of discovery documents which inadvertently contained a privileged document and asking Attorney Z to return the package or destroy the document without reading it or (2) if Attorney Z received a package of discovery documents which included privileged documents and was aware that the privileged documents were surreptitiously placed in the package by a disgruntled employee of Attorney A who was attempting to sabotage A or his client.
6The view expressed by the other Commission members would also mean that other ?inadvertently? disclosed documents would also have to be returned. Thus, for example, under their analysis, if Counsel Z served a document request seeking certain specified categories of documents, and if Attorney A provided some additional non-privileged documents beyond the scope of Z?s request, Attorney Z would be ethically required to return to Attorney A those extra non-privileged but voluntarily furnished documents. In addition, their analysis would shift the burden of vigilance from the producing attorney to the receiving attorney. Such a shifting of responsibility finds no basis in the Bar Rules.
Enduring Ethics Opinion
Opinion #215. Attorneys? Assistance to clients under Rule 1.2 regarding the use and sale of Medical and Recreational Marijuana
Vacating Opinion #214
Issued by the Professional Ethics Commission
Date Issued: March 1, 2017
The Professional Ethics Commission (Commission) provides this opinion to clarify that, notwithstanding current federal marijuana laws, Maine Rule of Professional Conduct 1.2 permits an attorney to counsel or assist clients who are engaged in conduct related to the sale or use of marijuana consistent with Maine?s laws and regulations governing medical and recreational marijuana.
Opinion 199 was issued on July 7, 2010. That opinion responded to a request from Bar Counsel to the Commission to render an opinion concerning the general parameters within which an attorney may, consistent with the Maine Rules of Professional Conduct, represent or advise clients under Maine?s Medical Marijuana Act because of the interplay of that law with the Federal prohibition against the distribution and possession of marijuana.
Opinion 199 cited a guidance, dated October 19, 2009, from the United States Deputy Attorney General which directed United States Attorneys not to focus federal resources on individuals whose actions are in ?clear and unambiguous compliance with existing state laws providing for the medical use of marijuana.? That guidance, however, made it clear that the Federal law against the distribution of marijuana was still in effect, recognized that ?no State can authorize violations of federal law? and that the guidance did ?not ?legalize? marijuana or provide a legal defense to a violation of federal law, nor is it intended to create any privileges, benefits, or rights, substantive or procedural, enforceable by any individual, party or witness in any administrative, civil or criminal matter.? The Department of Justice (DOJ) has issued two subsequent guidance memoranda, both of which essentially reaffirm the 2009 guidance.
The issue presented which led to Opinion 199 was whether and how an attorney might act in regard to a client whose intention is to engage in conduct which is permitted by state law and which is a federal crime, even though it might not currently be prosecuted under federal law.
The opinion cited Maine Rule of Professional Conduct 1.2(e), which states:
A lawyer shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent, but a lawyer may discuss the legal consequences of the proposed course of conduct with a client and may counsel or assist a client to make a good faith effort to determine the validity, scope, meaning or application of the law.
The opinion noted that when the proposed client conduct is known to be a violation of federal criminal law, attorneys may counsel or assist a client in making good faith efforts to determine the validity, scope, meaning or application of the law but are forbidden from counseling a client to engage in the business or to assist a client in doing so. The opinion concluded that where the line is drawn between permitted and forbidden activities needs to be evaluated on a case by case basis.
The Commission feels it is appropriate to revisit this opinion and to offer additional guidance to individuals and entities seeking legal advice to assist them in navigating the statutory and regulatory structure posed by Maine legislation with specific regard to marijuana (either medical or recreational). In doing so, the Commission notes that there are two different issues to be addressed: 1) whether Maine lawyers can advise clients on how to conform their conduct to the law; and 2) whether a Maine lawyer may provide services that go beyond the provision of legal advice to clients involved in the sale or use of marijuana as permitted under Maine law, such as negotiation of contracts and drafting of legal documents for such a client to assist the client in establishing a marijuana business.
With regard to the first question, the Commission notes that since Opinion 199 was issued, several other states have had occasion to address state legalization of medical or recreational marijuana and its impact on Rule 1.2. In that regard, a consensus has developed that lawyers should be permitted to advise clients on how to conform their conduct to the law and that the provision of legal advice to clients involved in the marijuana trade falls squarely within that exception.
The second part of the analysis is whether Maine lawyers are permitted to go beyond merely providing legal advice to determine the validity, scope, meaning or application of the law to the point of advising clients on how to conform their conduct to the law. This would include, for instance, the negotiation of contracts and the drafting of legal documents to assist a client in establishing a marijuana business. The issue is that an attorney who performs such work is assisting the client in conduct that violates federal criminal law, even though such conduct is permissible under state law.
Other states have reviewed this distinction and determined that lawyers may ethically assist a client in legal matters expressly permissible under state law even if it may violate applicable federal law within certain parameters. For instance, Arizona concluded that such conduct is permissible, but only when three requirements are met: (1) there are no court decisions holding that provisions of the law are preempted, void, or otherwise invalid; (2) the lawyer reasonably concludes that the client is fully complying with state law requirements; and (3) the lawyer advises the client about possible federal law violations or recommends that the client seek other legal counsel to do so. Likewise, Washington added a new comment to its Rule 1.2 in 2015 as follows: ?At least until there is a change in federal enforcement policy, a lawyer may counsel a client regarding the validity, scope, and meaning of Washington Initiative 502 and may assist a client in conduct that the lawyer reasonably believes is permitted by this statute and the other statutes, regulations, orders and other state and local provisions implementing them.?
In support of the comment, Washington noted that (1) the state Governor and Attorney General were on board; (2) the state executive branch was actively involved in implementation of the relevant laws; (3) since the adoption of the statute the federal authorities had not sought to impair the statute?s operation; and (4) Congress has prevented the DOJ from using appropriated funds to prevent states from implementing medical marijuana laws.
In 2013 Colorado took a similar position to Maine and determined that lawyers could represent clients in proceedings related to past activities; advise government clients, argue, or lobby for certain rules, regulations, or standards; and could advise clients about consequences of marijuana use or commerce under Colorado or federal law, but could not assist clients in structuring or implementing transactions that violated federal law and could not represent a lessor or supplier in the transaction if the lawyer knew the client?s intended use of the property or supplies. In 2014, however, the state added a comment to its rule changing its position: ?A lawyer may counsel a client regarding the validity, scope, and meaning of Colorado constitution article XVIII, and may assist a client in conduct that the lawyer reasonably believes is permitted by these constitutional provisions and the statutes, regulations, orders, and other state or local provisions implementing them. In these circumstances, the lawyer shall also advise the client regarding related federal law and policy.?
Similar conclusions have been reached by Nevada Oregon and Pennsylvania. Recently, the Ohio Supreme Court amended its Rule 1.2(d) (September 2016) to include the following new provision: ?A lawyer may counsel or assist a client regarding conduct expressly permitted under Sub. H.B. 523 of the 131st General Assembly authorizing the use of marijuana for medical purposes and any state statutes, rules, order, or other provisions implementing the act. In these circumstances, the lawyer shall advise the client regarding related federal law.?
Based on a re-evaluation of Opinion 199, the Commission issued Opinion 214, which recommended that M. R. Prof. Conduct 1.2(e) should be amended consistent with that change enacted by other states to include the following additional language:
A lawyer shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent, but a lawyer may (1) discuss the legal consequences of any proposed course of conduct with a client; (2) counsel or assist a client to make a good faith effort to determine the validity, scope, meaning or application of the law; or(3) counsel or assist a client regarding conduct expressly permitted by Maine law, provided that the lawyer counsels the client about the legal consequences, under other applicable law, of the client?s proposed course of conduct.
Through Opinion 214, that potential amendment was submitted and proposed to the Advisory Committee on the Rules of Professional Conduct (Advisory Committee) for its assessment. After significant consideration, that Committee reached a majority conclusion that no such amendment to Rule 1.2 is necessary or appropriate. In recognizing the difficult problems of professional responsibility facing practitioners in this area, the Advisory Committee agreed that in the ?specific instance of the marijuana laws, lawyers should not be subject to discipline for counseling or assisting clients to engage in conduct that conforms to Maine law, merely because that conduct violates a federal law, so long as federal authorities have declared they have no intention of enforcing the federal law against those who are complying with relevant state law.? However, a majority of the Advisory Committee also felt it unwise to craft a rule of general applicability for this specific issue and instead suggested that the Commission reconsider Opinion 214 to clarify that counseling or assisting a client to engage in conduct that conforms to Maine laws regarding marijuana does not violate Rule 1.2. This Commission appreciates the effort put forth by the Advisory Committee in reaching its conclusion and hereby adopts and references portions of the Advisory Committee?s reasoning.
In light of that posture, the Commission has reconsidered its Opinion 214 and offers the following further clarification of that opinion. In engaging in the reconsideration, the Commission looked to the intent of Rule 1.2. The Rules of Professional Conduct are recognized to be rules of reason, intended to be interpreted in light of ?the purposes of legal representation and of the law itself.? M. R. Prof. Conduct, Preamble ¶ [14B]. In that light, Rule 1.2 must reasonably be read considering the context of its interaction with Rule 8.4. Specifically, Rule 8.4 does not make every violation of law a violation of Rule 1.2 and instead contemplates only those violations that reflect adversely on a lawyer?s honesty, trustworthiness or fitness to practice law.
Likewise, Rule 1.2 does permit a lawyer to ?counsel or assist a client to make a good faith effort to determine the validity, scope, meaning or application of the law.? Rule 1.2(e). This is necessary in order to balance a lawyer?s obligations under the Rules with the public?s general interest in obtaining legal assistance to understand the law and to conform its conduct. Defining Rule 1.2 too strictly on matters involving marijuana would inhibit lawyers from assisting clients in testing the boundaries and validity of existing law, which is recognized to be an integral part of the development of the law. Thus, the Commission recognizes that such strict interpretation of Rule 1.2 would more likely have a detrimental effect, particularly where, as here, it appears the regulation of use and trade in marijuana is in a developmental phase. To subject lawyers to discipline for counseling or assisting clients to engage in Maine?s testing of this area would be, in practical effect, to shut down this particular approach to development of the law. The public?s need for legal assistance and right to receive it are substantial, and concerns about upholding respect for the law and legal institutions are not significant enough to outweigh those considerations in this circumstance.
Therefore, in clarifying and hereby replacing Opinion 214, the Commission opines that, notwithstanding current federal laws regarding use and sale of marijuana, Rule 1.2 is not a bar to assisting clients to engage in conduct that the attorney reasonably believes is permitted by Maine laws regarding medical and recreational marijuana, including the statutes, regulations, Orders and other state or local provisions implementing them. The Commission cautions that, because the DOJ guidance on prosecutorial discretion is subject to change, lawyers providing advice in this field should be up to date on federal enforcement policy, as well as any modifications of federal and state law and regulations, and advise their clients of the same.
Enduring Ethics Opinion
Opinion #216. Prosecutor's Communications with an Alleged Crime Victim Who is Represented by Counsel
Issued by the Professional Ethics Commission
Date Issued: April 5, 2017
Question: When does Maine Rule of Professional Conduct 4.2, Communication With Person Represented by Counsel and Limited Representations, permit a prosecutor to communicate with an alleged crime victim (ACV) if the prosecutor is aware that the ACV is represented by counsel in relation to the event or conduct that is the subject of potential or pending criminal charges in the absence of consent by that lawyer?
Brief Answer: Under Maine Rule of Professional Conduct 4.2, a prosecutor may not communicate with an ACV whom the prosecutor knows to be represented by counsel regarding the criminal matter or a closely related civil matter arising from the same incident or conduct without the consent of the ACV's lawyer, except as such communication is expressly authorized by law or court order.
Discussion: In this Opinion, the Commission addresses the extent to which Rule 4.2 applies to a prosecutors communications with an individual who is an identified victim or complainant in a criminal matter if such individual is represented by counsel. Rule 4.2(a) sets forth the core requirement of the "no contact" rule:
In representing a client, a lawyer shall not communicate about the subject of the representation with a person the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the consent of the other lawyer or is authorized to do so by law or a court order. Specific limitations on communications by a prosecutor are contained in (c).
Rule 4.2(a) applies to all attorneys, including those who prosecute criminal matters through county district attorneys offices or the Office of the Attorney General; a prosecutors client is the State of Maine.1 The subject of the representation in a criminal law context refers to the incident or conduct at issue in the charges or investigation.
As noted in the first comment to MRPC 4.2, the limitation on attorney communications with represented persons
contributes to the proper functioning of the legal system by protecting a person who has chosen to be represented by a lawyer in a matter against possible overreaching by other lawyers who are participating in the matter, interference by those lawyers with the client- lawyer relationship and the uncounseled disclosure of information relating to the representation.
Rule 4.2, Comment [1]. In addition, the Maine Reporters Note observes that, in recognizing the importance of the preservation of the lawyer-client relationship, [Rule 4.2] is designed to protect clients against overreaching by other lawyers, and to reduce the likelihood that clients will disclose confidential or damaging information without the advice of their counsel.... Rule 4.2 Reporters Note.
These descriptions of the rationale and importance of the rule apply to the scenario addressed in this Opinion. An ACVs participation in a criminal matter can have consequences in closely related civil litigation (e.g., a personal injury or protection from abuse case), particularly when they make statements about the incident and provide information about any resulting injuries. The ACVs lawyer can advise the ACV regarding the best routes to preserve their position in the litigation. Where a criminal proceeding may have implications for the clients position in civil litigation, they should have the same protection against overreaching by other counsel as well as the advice of their own counsel regarding disclosures made.2
Even if an ACV has not initiated or contemplated civil litigation regarding the underlying events or conduct, an ACV may nonetheless seek the assistance of counsel during the criminal proceedings to receive advice and representation regarding their rights in those proceedings, such as in relation to plea negotiations, obtaining restitution, and testifying in court. An ACV may have concerns about how to protect private information or even the possibility of becoming a target of a criminal investigation themselves.3
It cannot be assumed that a prosecutors and ACVs interests are aligned. A prosecutor has no specific duty to act in the interests of an ACV generally or with respect to any parallel civil proceeding. Rather, their duty is to act in the interest of public safety and to advance the goals and objectives of their office in the context of a criminal matter. While a prosecutor may have concern for the welfare of an ACV and may not engage in conduct that may present harm to the ACV, their public duty is substantially different from that of the ACVs civil litigation attorney.
Accordingly, Rule 4.2 generally prohibits a prosecutor from communicating with an ACV who is represented by counsel in the criminal matter or in a closely related civil action absent the consent of the ACVs attorney. A civil action is closely related to the extent that it arises from the same event or incident and involves common issues of fact such that the proceedings could have relevance to the determination of liability or damages in the other proceedings.4
The prohibition on communications with a represented person only applies in circumstances where the lawyer knows that the person is in fact represented in the matter to be discussed. Rule 4.2, Comment [8]. This means that the limitations on communications with an ACV apply only when the prosecutor has actual knowledge that an ACV is represented in a related action. In the context discussed in this Opinion, it is highly unlikely that a prosecutor would have such awareness unless it is specifically brought to their attention. For this reason, it is incumbent upon the ACVs attorney to make the fact of such representation known to the prosecutor as soon as possible, and particularly if the attorney wishes all communications to the ACV to be directed through them.5
Rule 4.2(a) does permit communication with represented persons where there is legal authority to do so. To preserve the rules key protections, such exception is limited to express grants of authority to make specific communications with others.6 One example of a prosecutors communications expressly authorized by law is the grand jury process, through which a prosecutor may subpoena and question an ACV. M.R.U. Crim. P. 17(i). As such proceedings are secret, the examination of an ACV must necessarily take place without the presence of their counsel. M.R.U. Crim. P. 6(d).
Some Maine prosecutors have taken the position that Maines crime victim statutes provide legal authorization to prosecutors to communicate with ACVs who are represented by counsel. However, such statutes permit only the communications described in those statutes; they do not confer broad legal authority to prosecutors to communicate with represented ACVs. Maines Criminal Code (Title 17-A) at Chapter 48 has several provisions addressing Victims Rights, including specific duties imposed on prosecutors to share information with ACVs. Section 1172 provides: When practicable, the attorney for the State shall make a good faith effort to inform each victim of a crime of the following, including a list of categories of information such as the details of a plea agreement, the right to comment on a plea agreement, the time and place of trial or sentencing, among others. 17-A M.R.S. § 1172(1). Subsection 2 of the statute describes certain pamphlets that an attorney for the state (or a victim and witness support program) must offer to provide to a victim. See also 15 M.R.S. § 812 (requiring attorneys for the state to comply with 17-A M.R.S. § 1172 in the context of plea bargaining); 15 M.R.S. § 6101(1) (imposing notification requirements similar to those in 17-A M.R.S. § 1172(1) for victims of domestic violence, sexual assault, and other crimes resulting in serious physical trauma or serious financial loss).
These statutes impose a duty on prosecutors to provide certain specific information to ACVs regarding the proceedings. To the extent that the laws permit communications with represented ACVs as an exception to Rule 4.2, such authority is limited to the categories of information set forth in the crime victims provisions and communications that are consistent with the purpose of the laws. The authority is not a license to have any other communication with represented ACVs. Thus, if a prosecutor is aware that an ACV is represented with respect to the incident or conduct at issue in the criminal matter, the prosecutor should seek the consent of the represented ACVs attorney before communicating with the ACV on topics beyond the scope of the information to be provided pursuant to Maines crime victims statutes.7
The Commission notes that Rule 4.2(a) also permits an attorney to contact a represented person if authorized to do so by ... a court order. To the extent that a prosecutor believes they have a lawful and important basis to have communication with an ACV but is unsure whether a rule or statute provides the express authority to do so, they can seek such authority through a court order. Comment [6] to Rule 4.2 explains:
A lawyer who is uncertain whether a communication with a represented person is permissible may seek a court order. A lawyer may also seek a court order in exceptional circumstances to authorize a communication that would otherwise be prohibited by this Rule, for example, where communication with a person represented by counsel is necessary to avoid reasonably certain injury.
Rule 4.2 Comment [6].
Finally, the Commission has also considered the potential significance of Rule 4.2(c), which, as Rule 4.2(a) states, addresses the [s]pecific limitations on communications by a prosecutor. That part of the rule, which is unique to Maines version of Rule 4.2, states:
(c) If a prosecutor knows a person is represented with respect to the matter under investigation:
(1) the prosecutor shall not communicate directly with that person absent consent of the other lawyer or a court order; and
(2) The prosecutor shall not extend, through any third person an offer to meet with the prosecutor or an offer to enter into plea negotiations with the prosecutor, or an offer of a plea agreement absent consent of the other lawyer or a court order.
Communications by the prosecutor in the form of advice or instruction to law enforcement agents about a person a prosecutor knows is represented with respect to a matter under investigation are authorized by this Rule and are governed by the substantive law.
Rule 4.2(c)(1) makes clear that the general no contact rule applies to prosecutors in terms of direct contact with a represented person. However, the remaining language of the subsection has little applicability to prosecutors communications with ACVs.
Rule 4.2(c)(2) states that a prosecutor may not use a third person to communicate with the person regarding plea negotiations; such language concerns only represented individuals who are potential targets of the investigation, rather than the complainants. The final sentence of Rule 4.2(c) addresses advice or instruction to law enforcement agents rather than communications with represented persons. The language clarifies that Rule 4.2 is not intended to limit the [t]raditional investigative activities of prosecutors, including advising law enforcement agents of applicable substantive law when agents communicate with individuals during criminal investigations. See 4.2 Reporters Note. Prosecutors are not, however, permitted under Rule 4.2 to initiate, direct, or be proactively involved with the contact that law enforcement officers have with any represented individuals.
Conclusion:
Maine Rule of Professional Conduct 4.2 imposes some limitations on a prosecutors communications with alleged crime victims. If a prosecutor is made aware that the ACV is represented by counsel regarding the criminal matter or closely related civil litigation arising from the same incident or conduct, the prosecutor must obtain the consent of the ACVs counsel before communicating with the ACV unless the communication is expressly authorized by law or court order.
Footnotes
1 See generally ABA Standing Committee on Ethics and Professional Responsibility, Formal Opinion 95-396 (addressing the application of Model Rule 4.2 in criminal matters).
2 See Nebraska Ethics Advisory Opinion for Lawyers No. 09-03 (2009).
3 Ethics opinions from other jurisdictions have concluded that Rule 4.2 applies to prosecutors communications with ACVs and other witnesses in criminal matters where such witnesses retained counsel with respect to their participation in the proceedings. See, e.g., North Carolina State Bar 2009 Formal Ethics Opinion 7, Interviewing an Unrepresented Child Prosecuting Witness in a Criminal Case Alleging Physical or Sexual Abuse of The Child (Approved: January 27, 2012); Oregon State Bar Association Board of Governors Formal Opinion 005-142, Communicating with Represented Persons: Criminal Witnesses (2005); Pennsylvania Bar Association Committee on Legal Ethics and Professional Responsibility, Informal Opinion Number 97-117 (1997). See generally Margaret Garvin & Douglas E. Beloof, Crime Victim Agency: Independent Lawyers For Sexual Assault Victims, 13 Ohio St. J. Crim. L. 67, 77-86 (2015) (discussing the myriad potential roles for a victims attorney during criminal proceedings).
4 Other jurisdictions have similarly defined the relationship between criminal and civil proceedings narrowly in the context of applying Rule 4.2. The Nebraska Lawyers Advisory Committee concluded that Rule 4.2 limits a prosecutors communications with a victim in a criminal case who has retained counsel to represent him in a civil case arising from the same set of facts and involving common issues and evidentiary questions, and that attorney has requested that contact with the victim regarding those aspects of the prosecution be made only through him. Nebraska Ethics Advisory Opinion for Lawyers No. 09-03 at 2723 (2009). The Nebraska opinion further explains that such limitations on a prosecutors communications apply where the criminal and civil matters clearly arise from the same set of facts and involve at least some common issues and the evidence the prosecutor seeks for the criminal prosecution will likewise no doubt be relevant in the associated civil litigation. Id. See also ABA Formal Opinion 95- 396 at 13 (noting that Rule 4.2s requirements apply only where the represented persons representation [are] within the compass of the inquiring lawyer's representation, meaning that there must be a connection between the two representations).
5 Rule 4.2 prosecutor may not make a communication prohibited by this Rule through the acts of another. 4.2 cmt 4. Thus, a prosecutor may not communicate with a represented ACV through non- attorney employees of a county attorneys office, such as a victim witness advocate. Similarly, if such employees are made aware of an ACVs representation by counsel in the criminal proceedings or a related matter, they should inform the prosecutor of such fact to ensure that Rule 4.2 is followed.
6 In Maine Ethics Opinion No. 93, Requesting Release of Medical Records from Adverse Party Represented by Counsel (Feb. 15, 1989), the Commission interpreted the authorized by law exception in MCPR Rule 3.6(j), the predecessor to MRPC 4.2, in the context of a workers compensation matter. The Commission concluded that the statute authorizes an employers attorney to make a request for medical records from a represented employee-claimant because it expressly commands that service of such request be made on the employee, which is a clear directive that the employee, and not the employees lawyer, personally receive the communication. Id. (emphasis added). See also ABA Formal Opinion 95-396 at 2 (stating that such exception is satisfied by a constitutional provision, statute or court rule, having the force and effect of law, that expressly allows a particular communication to occur in the absence of counsel) (emphasis added).
7 See Maine Ethics Opinion No. 93 (noting that the mere fact that direct communication [for a specific purpose] is authorized by statute in no way detracts from the fundamental application of [the no-contact rule] insofar as the rule continues to require that any communication concerning the subject matter of the representation involve opposing counsel.).
Enduring Ethics Opinion
Opinion #217. Ethical Obligations for Access and Use of Social Media
Issued by the Professional Ethics Commission
Date Issued: September 6, 2017
As of January 12, 2017, sixty-nine percent of Americans use at least one social media platform, as compared to just five percent of Americans in 2005.i Social media, such as Facebook, Twitter, and LinkedIn, contain millions of people?s profiles, messages, photographs and videos that could prove crucial to a legal dispute.ii It is now commonplace for attorneys who are exercising due diligence in the representation of clients to search for and obtain information through social media.
Because social media contain a hybrid of public and private information, and are accessed through different methods, the access to and use of social media raise ethical issues that do not neatly conform to the existing rules. This has led to some uncertainty on the part of attorneys. This Opinion addresses three common ethics questions relating to the access and use by lawyers of social media.
Definition of ?Social Media?
As a threshold matter, it is important to acknowledge that there is no good definition of ?social media.? The functionality, technology and content available on the platforms that make up ?social media? likely will continue to evolve dramatically in the future. For the purpose of this Opinion, the Commission defines ?social media? to include those Internet website platforms, such as Facebook, Twitter, Instagram and LinkedIn, that are used primarily for connecting socially with multiple ?friends? and for sharing a wide range of personal, professional and editorial information using text, links, photographs and video. ?Social media? typically allows the profile holder to use privacy settings to manage who has access to non-public content on their social media. ?Social media? is not intended to include other Internet platforms, which may offer information, services, shopping or other types of content, but which lack the type of sharing of non-public information with ?friends? selected by the profile holder, which characterizes social media platforms.
Question #1: What is the permissible manner and extent that attorneys, in client-related matters, may access and use information present on social media?
Brief Answer: Attorneys are generally permitted to access and use publicly-available information obtained from social media, including publicly-available information on a represented party?s social media. However, an attorney may not request access to private portions of a represented party?s social media, because such a request constitutes an impermissible contact with a represented party. An attorney may request access to private portions of unrepresented persons? social media, but only if the attorney is truthful and not deceptive in making the request, and the attorney takes reasonable steps to ensure that the unrepresented person does not misunderstand the attorney?s interest or role.
Discussion:
There are many reasons why a diligent attorney might want to access social media, and therefore it is important that there be a clear understanding of the ethical considerations. As the Kentucky Bar Association Ethics Committee observed, social media may represent a new medium of communication, but ?[t]he underlying principles of fairness and honesty are the same, regardless of context.?iii Accordingly, although Maine has no professional conduct rules that address attorney access to and use of social media explicitly, the Maine Rules of Professional Conduct provide sufficient guidance to address the ethical considerations relating to the use of social media. The particular Rules most relevant to the use of social media are several:
- MRPC Rule 4.1 (?Truthfulness in Statements to Others?), prohibiting an attorney from knowingly making a false statement of material fact to a third party;MRPC Rule 4.2(a) (?Communications with Person Represented by Counsel?), prohibiting communications between an attorney and a represented party;
- MRPC Rule 4.3 (?Dealing with Unrepresented Person?), prohibiting attorneys from implying they are disinterested when in fact working on behalf of a client; and
- MRCP Rule 8.4 (?Misconduct?), prohibiting ?dishonesty, fraud, deceit or misrepresentation? and ?conduct that is prejudicial to the administration of justice.?
The Commission adopts the position, which appears to be unanimous across those jurisdictions that have addressed this issue, that attorneys may properly access and use public portions of social media, just as an attorney may access and use any other publicly-available information, document or statement.iv
The publicly-available information that the attorney may properly access and use includes the public portions of the social media of represented parties. Merely accessing public portions of social media does not constitute a ?communication? with a represented party for the purposes of MRPC 4.2(a). We agree with the New York Bar Association Committee on Professional Ethics that ?there is no deception in accessing a public website.?v
By contrast, the Commission concludes that an attorney may not directly or indirectly access or use private portions of a represented party?s social media, because the efforts to access and use the private information (even if such effort is fully automated through the social media interface itself) are prohibited ?communications? with a represented party for the purpose of Rule 4.2(a).
An attorney may request access to non-public portions of the social media websites of unrepresented persons, provided that the attorney is truthful and not deceptive, as required by MRPC 4.1 (?in the course or representing a client, a lawyer shall not knowingly make a false statement of material fact or law to a third person?) and MRPC 8.4 (c) & (d) (?It is professional misconduct for a lawyer to . . . engage in conduct involving dishonesty, fraud, deceit or misrepresentation? or ?conduct that is prejudicial to the administration of justice.?).
Beyond the requirements of provisions analogous to MRPC 4.1 and 8.4, some states, such as New Hampshire and Massachusetts have gone further, requiring attorneys who seek access to the non-public social media of unrepresented parties to affirmatively disclose the purpose of the contact.vi Other states, such as New York and Oregon, do not require affirmative disclosure, but require only that the attorney honestly disclose the purpose of the contact if the unrepresented party inquires.vii
The Commission concludes that the lawyer?s obligations in accessing the non-public social media of unrepresented persons are sufficiently addressed by Rule 4.3, which provides:
In dealing on behalf of a client with a person who is not represented by counsel, a lawyer shall not state or imply that the lawyer is disinterested. When the lawyer knows or reasonably should know that the unrepresented person misunderstands the lawyer?s role in the matter, the lawyer shall make reasonable efforts to correct the misunderstanding. . . .
Accordingly, whether the lawyer must affirmatively disclose the purpose of the contact in order to obtain access to the non-public information on an unrepresented person?s social media will depend upon whether the lawyer?s failure to disclose the purpose, viewed in the context, would ?imply that the lawyer is disinterested? or whether the lawyer knows or reasonably should know that the unrepresented person ?misunderstands the lawyer?s role in the matter.? What specific disclosure the lawyer must make will depend upon the context, the sophistication or knowledge of the person contacted and the nature of the communications between the lawyer and the unrepresented person.
Question #2: To what extent may an attorney access information about jurors or potential jurors through social media?
Brief Answer: An attorney may access publicly available information on social media about jurors or potential jurors. However, an attorney may not request access to any non-public portions of a juror?s or potential juror?s social media. Attorneys must avoid accessing social media of a juror or potential juror where the attorney knows or reasonably should know that the social media site will alert the juror or potential juror to the fact that the attorney accessed the site. If an attorney becomes aware that the social media site alerted the juror or potential juror to the contact, the attorney must notify the Court of this fact.
Discussion: Most attorneys will seek as much information as possible about those who may serve as jurors on a particular case. In establishing norms for this conduct, the Commission has relied upon Rule 3.5 (?Impartiality and Decorum of the Tribunal?) and seeks to strike a careful balance between the party?s interest in access to information about jurors, the juror?s interest in avoiding intrusion into their privacy and personal lives, and the Court?s interest in preserving the integrity of the jury system.
An American Bar Association opinion provides, ?Unless limited by law or court order, a lawyer may review a juror?s or prospective juror?s Internet presence, which may include postings by the juror or potential juror in advance of and during a trial.?viii This position has been adopted by those jurisdictions that have addressed this issue, based upon the ?strong public interest in identifying jurors who might be tainted by improper bias or prejudice.?ix
However, an attorney?s access to information through jurors? social media is subject to the limitations imposed by Rule 3.5(a) (prohibiting a lawyer from seeking to improperly influence a juror) and Rule 3.5(b) (prohibiting ex parte communication with jurors). These Rules prohibit attorneys from directly or indirectly requesting or attempting to gain access to non-public portions of a juror?s or prospective juror?s social media, because such access or request constitutes an impermissible ex parte ?communication,? and also creates the possibility that the juror would become aware of the attorney?s effort, leading to the risk of improper influence.
As technology and online practices evolve, the distinction between passive access to publicly-available information and active communication with the subject of that information may not always be entirely clear. For example, some social media platforms, LinkedIn, for example, may send automatic messages to their members whenever someone with an open account views another member?s public profile.
New York considers this type of automatic message an impermissible ex parte ?communication? with a juror that ?may be considered a technical ethical violation.? By contrast, the American Bar Association takes a less stringent position, concluding that ?[t]he fact that a juror or a potential juror may become aware that a lawyer is reviewing his Internet presence when a network setting notifies the juror of such does not constitute a communication from the lawyer.?
With respect to Rule 3.5(b), we agree with the position of the ABA because any other approach would be unworkable as a practical matter and would subject attorneys to potential ethics violations based upon the happenstance of user settings or new technologies that generate automated messages outside of the attorney?s reasonable knowledge or control.
However, that said, we remain very concerned about any possible interaction with jurors that would result in the juror becoming aware that the attorney is directly or indirectly seeking information. Any conduct which might create a perception on the part of a juror that an attorney may seek to intrude into personal or private information risks violation of Rule 3.5(a) and is potentially damaging to the independence and integrity of the jury system. Accordingly, where an attorney knows or reasonably should know that accessing any social media of a juror will result in such juror becoming aware of the attorney?s access, the attorney should refrain from accessing that social media. If the attorney learns that any juror or prospective juror has become aware of the attorney?s access of the juror?s social media, the attorney must notify the Court. The Court, in turn, may find it advisable to provide a cautionary instruction to all jurors that attorneys may research publicly-available information on their social media; that such conduct is permitted and appropriate; and that no juror should allow that to influence them in any way.x
Question #3: Are attorneys permitted to connect with judges or other types of judicial, quasi-judicial or administrative hearing officers through social media?
Brief Answer: Attorneys are permitted to connect with judges and other judicial officers through social media, but they are precluded from having ex parte communications with, or from attempting to impermissibly influence, such judges or judicial officers through social media.
Discussion: The ethical considerations for attorney contact with judges and other judicial officers through social media are the same as apply to any other interactions with judges and judicial officers. The scope of permissible conduct is defined by MRPC 3.5(a), which prohibits attorneys from ?seek[ing] to influence a judge, juror, prospective juror or other tribunal officer by means prohibited by law? and Rule 3.5(b), which prohibits attorneys from ?communicat[ing] ex parte with such person, directly or indirectly, during the proceeding, concerning such proceeding unless otherwise authorized to do so by law or court order.? Based upon these rules, we agree with the Pennsylvania Bar Association that attorneys ?may connect with judges on social media websites provided the purpose is not to influence the judge and reasonable efforts are taken to assure that there is no ex parte or other prohibited communication.?xi
That said, attorneys must remain mindful that, while the Rules do not prohibit casual attorney contact with judges or other judicial officers through social media, attorneys and judges must take reasonable steps to avoid even the appearance of bias or partiality.
For that reason, some jurisdictions prohibit judges and attorneys from ?friending? each other on social medial sites like Facebook,xii and even New York, which permits judges to use social media, issued this cautionary caveat:
[A] judge also should be mindful of the appearance created when he/she establishes a connection with an attorney or anyone else appearing in the judge?s court through a social network. In some ways, this is no different from adding the person?s contact information into the judge?s Rolodex or address book or speaking to them in a public setting. But, the public nature of such a line (i.e. other users can normally see the judge?s friends or connections) and the increased access that the person would have to any personal information the judge chooses to post on his/her own profile page establish, at least, the appearance of a stronger bond. A judge must, therefore, consider whether any such online connections, alone or in combination with other facts, rise to the level of a ?close social relationship? requiring disclosure and/or recusal.xiii
The same admonition applies to attorneys who seek to ?friend? a judge through social media. The attorney must consider whether his or her online connection with a particular judge, alone or in combination with other facts, rises to the level of a ?close relationship? requiring disclosure.
_____________________________
Footnotes:
ihttp://www.pewinternet.org/fact-sheet/social-media/ as viewed on July 6, 2017.
iiSee, e.g., B.M. v. D.M., 31 Misc. 3d 1211(a) (N.Y. Sup Ct. 2011) (Spousal support denied because wife?s social media post about starting belly dancing constituted an admission that contradicted her testimony that she rarely left home because she was in too much pain);
iiiKentucky Bar Assn., Ethics Comm., Formal Op. KBA E-434 (2012).
ivPennsylvania Bar Ass?n Ethics Comm., Formal Op. 2014-300
vId.
viN.H. Bar Ass?n Ethics Advisory Comm., Op. 2012-13/05; Massachusetts Bar Ass?n Comm. On Prof Ethics Op. 2014-5 (2014).
viiNYCBA, Formal Op. 2010-2 (2010); Oregon State Bar Comm. On Legal Ethics, Formal Op. 2013-189 (2013).
viiiAmerican Bar Ass?n Comm. On Ethics & Prof?l Responsibility, Formal Op. 14-466.
ixId.
x This Opinion is necessarily limited by the mandate of the Professional Ethics Commission to address legal ethics issues within the framework of the Maine Rules of Professional Conduct. See Me. Bar Rule 8(d). This Opinion does not supersede case-specific limitations or other orders imposed by any court, which in some cases could be more stringent that what the Rules of Professional Conduct would permit. Lawyers involved in jury trials in Maine are required to be familiar with and follow Maine and Federal law and rules relating to juror contact and privacy issues, including Maine?s statute relating to the privacy of juror questionnaires, see 14 M.R.S. § 1254-A, Maine?s criminal jury tampering statute, 17-A M.R.S. § 454 (1-A) (?A person is guilty of tampering with a juror if the actor . . . [c]ontacts by any means a person who is a juror or any other person that the actor believes is in a position to influence a juror and the actor does so with the intention of influencing the juror in the performance of the juror?s duty.?), the 2014 Standing Order of the Chief Justice of the Superior Court Limiting Access to Juror Information (prohibiting attorneys from using juror information to ?(i) directly or indirectly contact, or cause to be contacted, any juror or prospective juror by any means including electronic or social media; (ii) take or authorize any action that could cause a juror or prospective juror to believe that someone is trying to contact the juror or to obtain information about the juror,?) and the United States District Court?s Plan for the Random Selection of Grand and Petit Jurors for Service in the District of Maine, as amended November 2, 2016. For additional information about the law and procedures relating to juror information, see Alexander, Maine Jury Instruction Manual, § 1-2, Juror Identification Confidentiality (2018 ed.)
xiPennsylvania Bas Ass?n Ethics Comm., Formal Op. 2014-300
xiiSee Domville v. State, No. 4D12-556 (Fla. Dist. Ct. App. Sept. 5, 2012) (sitting judge disqualified in a criminal case because he was Facebook ?friends? with the prosecutor, a status that would ?prompt a reasonably prudent person to fear that he could not get a fair and impartial trial.?)
xiiiNew York Advisory Committee on Judicial Ethics Opinion 08-176.
Enduring Ethics Opinion
Opinion #218. Restrictions on Right to Practice After Termination of Employment
Vacating Opinion #126
Issued by the Professional Ethics Commission
Date Issued: May 18, 2018
The Commission has been asked to clarify what, if any, continuing vitality Opinion 126 has in view of subsequent adoptions of first former Maine Bar Rule 3.2(g) and Rule 5.6(a) of the Maine Rules of Professional Conduct. In order to clarify this issue, the Commission now makes clear that Opinion 126 is no longer valid and is vacated.
In Opinion 126, the Commission was asked whether it was a violation of the then existing Maine Bar Rules for a law firm to require that a lawyer execute a non-competition agreement as a condition of employment. The Commission found that the then existing Maine Bar Rules did not prohibit a non-competition agreement, although the Commission noted that Model Rule 5.6(a), substantially similar to what is now Maine Rule of Professional Conduct 5.6(a), prohibited such agreements. Further, Opinion 126 noted that covenants-not-to-compete in legal employment contracts have "almost universally been held to be "unethical"".
Since Opinion 126 was issued in 1992, the Maine Bar Rules were amended to include Maine Bar Rule 3.2(g), added in 1997, which was the precursor to current Rule 5.6(a) of the Maine Rules of Professional Conduct. That rule specifically states that a lawyer may not participate in offering or making:
(a) A partnership, shareholders, operating, employment or other similar type of agreement that restricts the right of a lawyer to practice after termination of the relationship, except an agreement concerning benefits upon retirement;
The commentary on this rule has uniformally held that covenants-not-to-compete are barred, except as part of a retirement program, or, in some cases, a valid sale of a practice. See Maine Rules of Professional Conduct, Rule 1.17(A) Sale of a Law Practice, Advisory Note.
Accordingly, the Commission now formally vacates Opinion No. 126, and specifically advises that a non-competition agreement or similar restriction on the right to practice as the result of the termination of a lawyer’s relationship with other lawyers or law firm is generally prohibited. The Commission also notes that when a lawyer terminates his or her relationship with a legal practice, both the firm and the lawyer continue to have obligations to individual clients which are more fully addressed in Rules 1.2, 1.4 and 1.16.
The Commission has been asked to clarify what, if any, continuing vitality Opinion 126 has in view of subsequent adoptions of first former Maine Bar Rule 3.2(g) and Rule 5.6(a) of the Maine Rules of Professional Conduct. In order to clarify this issue, the Commission now makes clear that Opinion 126 is no longer valid and is vacated.
In Opinion 126, the Commission was asked whether it was a violation of the then existing Maine Bar Rules for a law firm to require that a lawyer execute a non-competition agreement as a condition of employment. The Commission found that the then existing Maine Bar Rules did not prohibit a non-competition agreement, although the Commission noted that Model Rule 5.6(a), substantially similar to what is now Maine Rule of Professional Conduct 5.6(a), prohibited such agreements. Further, Opinion 126 noted that covenants-not-to-compete in legal employment contracts have "almost universally been held to be "unethical"".
Since Opinion 126 was issued in 1992, the Maine Bar Rules were amended to include Maine Bar Rule 3.2(g), added in 1997, which was the precursor to current Rule 5.6(a) of the Maine Rules of Professional Conduct. That rule specifically states that a lawyer may not participate in offering or making:
(a) A partnership, shareholders, operating, employment or other similar type of agreement that restricts the right of a lawyer to practice after termination of the relationship, except an agreement concerning benefits upon retirement;
The commentary on this rule has uniformally held that covenants-not-to-compete are barred, except as part of a retirement program, or, in some cases, a valid sale of a practice. See Maine Rules of Professional Conduct, Rule 17(a) Sale of a Law Practice, Advisory Note.
Accordingly, the Commission now formally vacates Opinion No. 126, and specifically advises that a non-competition agreement or similar restriction on the right to practice as the result of the termination of a lawyer’s relationship with other lawyers or law firm is generally prohibited. The Commission also notes that when a lawyer terminates his or her relationship with a legal practice, both the firm and the lawyer continue to have obligations to individual clients which are more fully addressed in Rules 1.2, 1.4 and 1.16.
Enduring Ethics Opinion
Opinion #219. Formal Ethics Opinion Regarding Lateral Transfers by Attorneys
Issued by the Professional Ethics Commission
Date Issued: December 5, 2018
Attorneys moving from one firm to another is a common occurrence. In light of the potential for conflicts of interest and imputed disqualifications resulting therefrom, the hiring firm, the transferring attorney, and that attorney’s former firm must give careful attention to the obligations imposed by the Maine Rules of Professional Conduct, the most commonly implicated of which are addressed in this Opinion.
1. When during the hiring process should the conflict identification take place and what are the obligations of the hiring firm and the potential new attorney? Can a hiring firm make a conditional offer, pending the outcome of conflict identification?
Short Answer: As soon as negotiations are more than merely theoretical, a review of all cases in which the potential attorney is or has been involved should begin in order to identify conflicts of interest. A firm may make a conditional offer, pending the resolution of the conflicts review.
Rules Implicated:
M.R. Prof. Conduct 1.6
M.R. Prof. Conduct 1.7
M.R. Prof. Conduct 1.9
M.R. Prof. Conduct 1.10
Discussion: The question of when to start discussing conflicts of interest is a sensitive one. Due to confidentiality concerns, conflicts should not be discussed until the new firm and the prospective transferring lawyer are beyond the initial “kicking the tires” phase, such that an actual transfer seems imminent. The precise time varies based on a number of considerations. For example, many firms defer asking for conflicts information from newer lawyers until a conditional offer has been made. Experienced lawyers, who are more likely to have potentially problematic conflicts, may compel an earlier analysis. However, a conditional offer can be, and often is, made prior to performance of a conflicts analysis.
Both the transferring lawyer and the new firm are required to protect current and former clients from harm due to conflicts of interest. Because of confidentiality concerns inherent in the disclosure of information about clients, Rule 1.6 dictates that only the minimum information necessary to allow a conflict analysis under Rule 1.7 should be provided, and then only after substantive discussions about a transfer have taken place. The disclosure of information consistent with Rule 1.6 is discussed thoroughly in ABA Formal Opinion 09-455 (October 8, 2009), entitled “Disclosure of Conflicts Information When Lawyers Move Between Law Firms.”
The permitted disclosure of client information is limited in scope. If matters are in litigation and a matter of public record for that reason, identification of potential conflicts can be made easily without risk of over-disclosing. In private matters, initial disclosures of information should be limited to client names and attorney areas of practice. If there is a need to disclose more specific information in order to determine whether a conflict exists, care must be taken not to compromise client confidentiality. The conflicts analysis should be completed using information from non-confidential sources apart from the transferring attorney whenever possible, consistent with Rule 1.6. If there are no non-confidential sources available to the new firm to complete the analysis of an identified potential conflict of interest, and a fact-intensive review of confidential information is necessary, then a neutral intermediary lawyer may be retained to receive and analyze the information, if the client consents.
Lastly, the transferring attorney and the new firm both have a duty not to reveal or use any of the disclosed information except to identify and resolve potential conflicts of interest.
2. What level of involvement in a case will give rise to a conflict of interest? What if the attorney’s prior work was limited to research and did not acquire any case strategy knowledge or confidential client information? Was performed when the attorney was a nonlawyer? Was performed when the attorney was a student attorney?
Short Answer: Where the transferring attorney actually represented a client who is truly adverse to the client of the hiring firm in the same matter or in a substantially related matter, or the transferring attorney has actual knowledge of protected information such that it will pose a risk of materially advancing the position of the hiring firm’s client, then a conflict of interest exists and must be addressed when hiring that attorney.
Rules Implicated:
M.R. Prof. Conduct 1.6
M.R. Prof. Conduct 1.7
M.R. Prof. Conduct 1.8
M.R. Prof. Conduct 1.9
M.R. Prof. Conduct 1.10
Discussion: The overriding, general principle against which the transferring attorney’s role is measured is that “[l]oyalty and independent judgment are essential elements in the lawyer’s relationship to a client.” M.R. Prof. Conduct 1.7 cmt. (1). Stemming from that principle are the more specific prohibitions against using confidences or secrets of a client to that client’s disadvantage (Rules 1.8(b), 1.9(c)); changing sides as the representing attorney in the same or substantially related matter, (Rule 1.9(a)); and representing one client with interests that are materially adverse to a former client and about whom the prospective attorney acquired material information protected by the Rules, (Rule 1.9(b)).
There are several key concepts in assessing for conflicts of interest that may impact the hiring decision and that need to be addressed: (1) client representation; (2) same or a substantially related matters; (3) adversity; (4) information acquired; and (5) materiality.
First, the hiring firm should take care to confirm that the transferring attorney or their former firm in fact represented a client who is adverse to a client of the hiring firm. “An attorney-client relationship is established when ‘(1) a person seeks advice or assistance from an attorney, (2) the advice or assistance sought pertains to matters within the attorney's professional competence, and (3) the attorney expressly or impliedly agrees to give or actually gives the desired advice or assistance.’”1 If there is no attorney-client relationship, then there likely is no conflict of interest, of course.
Second, a conflict of interest exists when the representation of the former client by the transferring attorney occurred in a matter that is the same as, or substantially related to, the matter in which the hiring firm is representing the other, adverse client. However, Rule 1.9 defines a “substantially related” matter such that the transferring attorney’s knowledge may create a conflict of interest regardless of the similarity of that matter. The analysis focuses on the risk that “confidential factual information as would normally have been obtained in the prior representation would materially advance the client’s position in the subsequent matter.” Rule 1.9(d). If that risk is substantial, then a conflict may exist to be resolved even in the instance of different or dissimilar matters.
Third, a conflict of interest impacting the transfer exists if the former client represented by the transferring attorney and the separate client represented by the hiring firm indeed are adverse. This determination requires an analysis of many factors and involves concepts of direct and indirect adversity, as well as the lawyer’s independent professional judgment, that are beyond the scope of this Opinion.
Fourth, a disqualifying conflict of interest arises if the transferring attorney’s level of involvement with a former client means that the attorney “has actual knowledge of information protected by Rules 1.6 and 1.9(c).” M.R. Prof. Conduct 1.9 cmt. (5). If there is no actual knowledge of a client’s confidences or secrets material to the pending matter, then there is no conflict of interest requiring disqualification “even though the interests of the two clients conflict.” Id. The determination of whether actual knowledge exists is made objectively from the facts and circumstances.2 There is no per se imputed knowledge in this context. M.R. Prof. Conduct 1.9 cmt. (5). The fact that attorneys of the former firm have actual knowledge of a client’s confidences and secrets, furthermore, does not necessarily disqualify the transferring attorney or the hiring firm from representation.3
Regardless of the transferring attorney’s status at the time the confidences or secrets were learned, e.g., unadmitted, law student etc., that knowledge will disqualify them and the hiring firm from representing an adverse client. However, the transferring attorney’s status at the former firm and role with the former client are relevant in determining whether that attorney, in fact, represented the client or knows confidences or secrets in the first place. If the attorney was a summer law clerk, for example, who was limited to “back office” work, e.g., researching discrete issues and the like, then the risk is low that they will know client confidences or secrets that will disqualify them. Furthermore, the chances are slim that any confidential information they do know would materially advance the interests if the hiring firm’s adverse client.4 A good rule of thumb appears in the commentary to Rule 1.9: “The underlying question is whether the lawyer was so involved in the matter that the subsequent representation can be justly regarded as a changing of sides in the matter in question.” M.R. Prof. Conduct 1.9 cmt. (2).
The hiring firm suffers no imputed disqualification, however, if an individual non-lawyer of the firm, such as a paralegal, assistant, or law student, has a conflict of interest. M.R. Prof. Conduct 1.10 cmt. (3). In the case of an attorney or a law student associated with a legal aid clinic, specifically, disqualification of that attorney or student is not imputed to any other affiliated attorney or student within the clinic or outside it. M.R. Prof. Conduct 1.10(e). However, the transferring non-lawyer must be appropriately screened from all participation in the matter in order to avoid conveying confidential information. Rule 1.10(e) & cmt. (3). For more guidance on screening non-lawyers, see Opinion No. 186 issued on July 22, 2004, entitled “Screening of Non-Lawyer Staff to Avoid Conflict.”
Fifth, materiality is important in the conflict-of-interest analysis applicable to a transferring attorney in three respects: (1) the adversity of the clients, (2) the actual knowledge the transferring attorney has of the former client’s confidences and secrets, and (3) the impact of confidential information in the advancement of the position of the hiring firm’s client. The interests of the former client must be “materially” adverse to the interests of the other client in order to generate a conflict of interest. M.R. Prof. Conduct 1.9(a) & (b)(1). Clients who are not truly at loggerheads, or whose interests align, do not pose a conflict-of-interest problem for the lateral hire or for the hiring firm. The knowledge the transferring attorney learned, furthermore, has to be material to the matter for which the hiring firm is representing the adverse client in order for their to be a conflict. M.R. Prof. Conduct 1.9(b)(2). Finally, in dealing with substantially related matters, the confidential information known by the transferring attorney must pose a risk of materially advancing the position of the hiring firm’s client in order for there to be a disqualification. M.R. Prof. Conduct 1.9(d).
3. What if the potential new attorney worked as an attorney for the government?
Short Answer: The transferring attorney is disqualified from representing a client of the hiring firm in two circumstances: (1) against the government in a matter in which they participated personally and substantially, absent government consent, and (2) against a person about whom the transferring attorney has actual knowledge of confidential government information. However, the rest of the hiring firm is not disqualified if there is appropriate screening of the transferring attorney from the matter, they get no fee from it, and the involved governmental officer or agency consents.
Rules Implicated:
M.R. Prof. Conduct 1.9
M.R. Prof. Conduct 1.10
M.R. Prof. Conduct 1.11
Discussion: Rule of Professional Conduct 1.11(a)(2) dictates that a transferring attorney may not represent a client of the hiring firm in a matter in which the attorney participated personally and substantially while employed by the government, without the consent of the appropriate governmental officer or agency. Consented representation, however, does not permit the lawyer to reveal or use the confidences or secrets of the government to its disadvantage. The prohibitions of Rule 1.9(c) indeed apply to former government attorneys.
If a transferring lawyer is disqualified from representing a client against the government, the conflict of interest is not necessarily imputed to the rest of the hiring firm. “Where a lawyer has joined a private firm after having represented the government, imputation is governed by Rule 1.11(b) and (c), not ... Rule 1.10.” M.R. Prof. Conduct 1.10 cmt. (7). So long as the appropriate governmental officer or agency consents to the firm’s representation, the disqualified attorney is “timely screened from any participation in the matter,” and the attorney “is apportioned no part of the fee therefrom,” the firm is not also disqualified. M.R. Prof. Conduct 1.11(b).
When the transferring attorney has actual knowledge of confidential government information about a person, that attorney is disqualified from representing a client of the hiring firm adverse to that person in a matter in which the information could be used to the material disadvantage of that person. M.R. Prof. Conduct 1.11(c) and cmt. (8). The disqualification is not imputed to the rest of the hiring firm, however, so long as the disqualified lawyer is screened from the matter and gets no fee from it. Id.
4. If the imputed disqualification rule is implicated, what are the best practices for providing disclosure and seeking client consent by the hiring firm? By the attorney’s former/current firm?
Short Answer: Generally, a conflict of interest imported by the transferring lawyer will not be imputed to the new firm if the disclosure of information necessary to identify the conflict is appropriately limited, informed consent from the affected client is properly obtained, and the transferring, disqualified lawyer is sufficiently screened.
Rules Implicated:
M.R. Prof. Conduct 1.0
M.R. Prof. Conduct 1.6
M.R. Prof. Conduct 1.9
M.R. Prof. Conduct 1.10
M.R. Prof. Conduct 1.17A
Discussion: The consideration of an imputed disqualification involves several issues. The first is how much information can be revealed about a lateral hire’s clients to the new firm in order to determine whether any conflict of interest exists. Rule 1.6 imposes on an attorney the obligation to keep all information related to the representation of clients confidential. Some exceptions are provided in Rule 1.6(b)(6), which allows a lawyer to reveal a confidence or secret of a client to the extent the lawyer reasonably believes is necessary in connection with the sale of a law practice under Rule 1.17A, to detect and resolve conflicts of interest arising from the lawyer's change of employment, or to identify and address conflicts arising from changes in the composition or ownership of a firm. A “confidence” is information protected by the attorney-client privilege under applicable law. M.R. Prof. Conduct 1.6(d). A “secret” is any “other information relating to the representation if there is a reasonable prospect that revealing the information will adversely affect a material interest of the client or if the client has instructed the lawyer not to reveal such information.” Id.
Rule 1.6 provides for limited disclosures in those circumstances, permitting a lawyer to disclose
with respect to each affected client the client's identity, the identities of any adverse parties, the nature and extent of the legal services involved, and fee and payment information, but only if the information revealed would not compromise the attorney-client privilege or otherwise prejudice any of the clients. The lawyer or lawyers receiving the information shall have the same responsibilities as the disclosing lawyer to preserve the information regardless of the outcome of the contemplated transaction.
M.R. Prof. Conduct 1.6(b)(6). Before revealing that information, however, the lawyer first must make a good faith effort to provide the client with reasonable notice of the intended disclosure.
Rule 1.9 maintains the protection of a former client and permits a conflict to be waived under certain circumstances where the client gives informed consent, so long as the lawyer does not reveal or use the former client’s confidences or secrets to the disadvantage of that client. M.R. Prof. Conduct 1.9(c). Pursuant to Rule 1.0(e) “informed consent” means, among other things, a person’s agreement to a proposed course of conduct after the lawyer has communicated adequate information and explanation about the material risks of, and reasonably available alternatives to, the proposed course of conduct. Consent must be confirmed in writing, as defined by Rule 1.0(b), when a lawyer represented a client in a matter and the interests of that former client are materially adverse to the interests of a current client in the same or a substantially related matter, or when the lawyer’s firm represented a former client whose interests are materially adverse to the current client and the lawyer acquired certain material information protected by M.R. Prof. Conduct 1.6 and 1.9(c).
Rule 1.10, regarding imputed disqualification, addresses the conditions under which the transferring lawyer’s new firm may represent a client in the case of a conflict of interest involving a client of the transferring lawyer’s former firm. There are three conditions. One is screening the transferring lawyer from the matter and ensuring they get no fee from it. M.R. Prof. Conduct 1.10(a)(2)(i).
The second condition is providing written notice to the affected former client. The Rule specifies that
written notice [be] . . . promptly given to any affected former client to enable the former client to ascertain compliance with the provisions of this Rule, which shall include a description of the screening procedures employed; a statement of the firm’s and of the screened lawyer’s compliance with these Rules; a statement that review may be available before a tribunal; and an agreement by the firm to respond promptly to any written inquiries or objections by the former client about the screening procedures.
M.R. Prof. Conduct 1.10(a)(2)(ii). Pursuant to the Advisor Notes effective April 2018, the notice required by this paragraph generally should include a description of the screened lawyer’s prior representation and should be given to the former client as soon as practicable after the need for screening becomes apparent. It also should include a statement by the screened lawyer and the firm that the client’s material confidential information has not been disclosed or used in violation of the Rules. The notice is intended to enable the former client to evaluate and comment on the effectiveness of the screening procedure.
The third condition for the new firm’s representation of a client who is adverse to a client of the transferring lawyer’s former firm is written certification of compliance with the screening procedure “to the former client by the screened lawyer and by a partner of the firm, at reasonable intervals upon the former client’s written request and upon termination of the screening procedures.” M.R. Prof. Conduct 1.10(a)(2)(iii). The certifications give the former client assurance that the client’s material confidential information has not been disclosed or used inappropriately, either prior to timely implementation of a screen or thereafter. If compliance cannot be certified, then the certificate must describe the failure to comply.
It is important to note throughout this process that a client does not “belong” to either the departing lawyer or the former firm and therefore both have ethical obligations, including to inform the client of the departure so the client can decide whether to follow the departing lawyer or remain with the current firm. When a lawyer ceases to practice at a law firm, both the departing lawyer and the responsible members of that firm have ethical responsibilities to the clients on whose matters the lawyer currently is working to assure, to the extent reasonably practicable, that their representation is not adversely affected.6
5. Under what circumstances can a firm use screening, such as that mentioned in M.R. Prof. Conduct 1.10(a)(2)(i), to manage a conflict caused by a transferring attorney, and what should such screening involve?
Short Answer: A transferring lawyer may be screened from participation in a matter in a variety of circumstances in order to manage a conflict of interest caused by that lawyer’s change of firms. Maine has not articulated the precise elements necessary for an effective, comprehensive screen applicable to all circumstances, but M.R. Prof. Conduct 1.10 and other resources provide some valuable guidance for an effective screening process.
Rules Implicated:
M.R. Prof. Conduct 1.10
M.R. Prof. Conduct 1.11
M.R. Prof. Conduct 1.12
M.R. Prof. Conduct 1.18
Discussion: A core concern of a former client is protection of that client’s confidential information and secrets from disclosure or from their use to the disadvantage of that client. Lawyers and law firms can address this legitimate concern and prevent a disqualified lawyer’s conflict of interest from being imputed to the other lawyers within the same firm by using an ethical “screen.” The Maine Rules of Professional Conduct permit the use of a system of safeguards and procedures to prevent the imputation of conflicts when, for example, a disqualified lawyer leaves a law firm for a judgeship or third-party neutral position (Rule 1.12) or a disqualified lawyer moves from a private firm to a government position, or vice versa (Rule 1.11). Screening also is a permitted procedure to avoid imputed disqualification when a lawyer transfers from one private firm to another (Rule 1.10(a)(2)), when a lawyer has a conflict of interest based on a personal interest (Rule 1.10(a)(1)), when a former non-lawyer has become a lawyer (Rule 1.10, cmt. (4)), and when a lawyer received confidential information from a prospective client who did not become an actual client (Rule 1.18).
Courts have held that simple isolation of a disqualified lawyer from an affected client or client file is insufficient to avoid an imputed conflict of interest. In order to be effective, a firm must adopt “formal, institutionalized screening measures” that minimize the likelihood of a disqualified lawyer’s contact with the matter.7 Those measures should be reduced to writing and implemented before a disqualified lawyer transfers to a firm.
Maine courts, the Rules of Professional Conduct, and previous ethics Opinions have not specified the elements of an adequate screen when one is required under the Rules. “Screened” is generally defined under Rule 1.0(k) as the isolation of a lawyer from any participation in a matter through the timely imposition of a procedure within the firm that is reasonably adequate under the circumstances to protect information that the lawyer is obligated to protect under the Rules or other law. Following the ABA’s 2009 amendment of Model Rule 1.10 to allow screens to be employed in this respect, other jurisdictions have struggled to define the scope and details of an effective ethical screen. The Connecticut Bar, in particular, has endorsed the following components, all of which should be in place before the disqualified, transferring attorney begins working at the new firm. Each condition should be described in an agreement or memorandum provided to, and signed by, the disqualified attorney and others who may work on the affected matters.8
All attorneys and non-lawyer staff must be prohibited from communicating with the disqualified attorney about the representation by any means, and the disqualified attorney should be prohibited from communicating with other firm members about the matter.
The disqualified attorney must be barred from access to any aspect of the affected file. Electronic file materials must be password protected or otherwise encrypted so as to be quarantined, and hard copies should be kept in a locked area.
The disqualified attorney should be prohibited from keeping or sharing any material concerning the affected client with new firm’s lawyers or non-lawyers.
If feasible, the disqualified attorney should be located remotely from attorneys and staff working on the affected matter.
All law firm physical files should be conspicuously marked with indications that the disqualified attorney may not be permitted access to them.
Copies of the firm’s screening memorandum or agreement should be provided to all attorneys and staff assigned to the affected matter.
All outside vendors, experts, consultants, and others engaged to work on the affected matter should be required to sign a certification that they have received, read, and will comply with the screening memorandum.
Any firm publications or newsletters should avoid mention of the affected matter.
The law firm’s managing partner or committee should inform affected clients about the conflict before the disqualified, transferring attorney begins working at the new firm.
The law firm should inform the disqualified, transferring attorney’s affected client of the conflict and all measures taken to protect client confidences and secrets.
The disqualified attorney should receive no compensation derived from the affected matter.9
The disqualified lawyer should be isolated from all contacts with an affected client and those affiliated with the client or matter, including witnesses for or against the client.10
The affected law firm should designate personnel to monitor and ensure compliance with the ethical screen, and reminders should be sent at regular intervals to the disqualified lawyer and personnel.
This screening mechanism is at risk for being ineffective, however, without regular instruction about the conflict of interest rules to lawyers and relevant firm personnel in the form of continuing education, risk management bulletins, and other means. Firms should create and maintain checklists for establishing and monitoring ethical screens in order to ensure compliance.
Rule 1.10 requires that, in addition to being screened from participation in a matter, a disqualified lawyer must not received a fee from that matter. M.R. Prof. Conduct 1.10(a)(2)(i). The Rule further mandates that the affected former client receive prompt written notice, including a description of the screening procedure used, a statement of the screened lawyer’s compliance with the rules, a statement that review of the screening is available by a tribunal, and an agreement by the firm to respond promptly to any written inquiries or objections by the former client about the screening procedure. M.R. Prof. Conduct 1.10(a)(2)(ii). Finally, the firm is required to provide periodic certifications of compliance with the adopted screening procedure to the affected former client at “reasonable intervals,” if requested, and of the screening procedure’s termination, when it occurs. Id.
An ethical screen does not resolve a disqualified, transferring attorney’s conflict of interest as if it no longer exists. Rather, the screen avoids imputing to the new firm the conflict of interest of the transferring attorney by forming a barrier between that attorney and the rest of the firm.
6. What may a firm say to the departing attorney’s clients, and when may they say it? How are such clients identified? What may the departing attorney say and when can they say it?
Short Answer: Attorneys have a duty to keep clients reasonably informed about the status of their matters, which includes timely notifying clients that the attorney is leaving a firm if they have had significant professional contact with the client.
Rules Implicated:
M.R. Prof. Conduct 1.4
M.R. Prof. Conduct 1.16
M.R. Prof. Conduct 7.1
M.R. Prof. Conduct 7.3
M.R. Prof. Conduct 8.4
Discussion: Current clients who have had significant professional contact with the transferring attorney need to be told of the attorney’s departure and where the attorney will be practicing. This information facilitates the ability of the client to make “informed decisions regarding the representation.” M.R. Prof. Conduct 1.4(b). ABA Formal Ethics Opinion 99-414 provides a good discussion of the several ethical obligations incumbent on the departing attorney and the firm, including required communications with that attorney’s clients.
Since the transferring attorney may be terminating their representation of clients, in effect, by making the move, Rule 1.16 applies and provides some guidance on the timing of the required notification to clients. The clients might choose to follow the attorney to their new firm, but the attorney cannot assume that to be the case. The attorney must “take steps to the extent reasonably practicable to protect a client’s interests, including giving reasonable notice to the client, [and] allowing time for employment of other counsel . . .,” M.R. Prof. Conduct 1.16(d), if a client so chooses.
Ideally, the notification to the client would be in the form of a joint letter from the firm and the departing attorney. If a joint letter is not feasible, due to a hostile relationship for example, then the transferring attorney must undertake to provide the proper notification to their clients. Nothing prevents the firm from issuing a separate notice to the clients, too, but the departing attorney ultimately is responsible. If the firm issues its own, separate notice to clients, it “must not take actions that frustrate the departing lawyer’s current clients’ right to choose their own counsel.”11
The letter should be sent to all current clients of the departing attorney and objectively outline the clients’ options, including instructions on how to remain with the firm or follow the departing attorney to continue the representation. Clients should be informed expressly that they have the right to choose. It should go without saying that neither the departing attorney nor the firm may “make a false or misleading communication about the lawyer or the lawyer’s services” or about the firm. M.R. Prof. Conduct 7.1. Both the firm and the transferring attorney should avoid commenting negatively on the other in the letter in an effort to sway the clients’ in their decision. See, also, M.R. Prof. Conduct 8.4(c)(Misconduct, “dishonesty, fraud, deceit or misrepresentation”).
If the letter is not jointly issued, the departing attorney may be subject to the restrictions of Rule 7.3 relating to direct contact with prospective clients. The attorney may not “solicit professional employment from a prospective client with whom the lawyer has no family or prior professional relationship.” M.R. Prof. Conduct 7.3(a). Clients of the firm with whom the attorney has not worked in a significant capacity fall within that prohibition. If an attorney’s relationship with a client arises “solely by having worked on a matter for the client along with other lawyers in a way that afforded little or no direct contact with the client,” then Rule 7.3 applies to govern the lawyer’s communications about the transfer.12
7. When and how may a departing attorney gain custody of a client file? Of a closed file?
Short Answer: Whether a matter is ongoing or closed and whether the departing attorney or the firm will continue to represent the client in the matter documented by the file, the attorney shall be provided with either the original file or a copy, depending on whom the client chooses to continue the representation.
Rules Implicated:
M.R. Prof. Conduct 1.15
Discussion: Determining what documents, data, or information comprise the “file” or the “client’s property” to which the client is entitled is beyond the scope of this discussion. However, there are several discussions of those issues, as well as issues of access and retention, to be found among the Commission’s prior Opinions.
- Opinion No. 74, dated October 1, 1986, answered the question of what duty a firm has to retain custody of closed client files on matters for which it is no longer providing services.
- Opinion No. 120, posted on December 11, 1991, discussed whether an attorney who is terminating his relationship with a client is obliged to pay the expense of turning the file over to the client.
- Opinion No. 143, issued on July 19, 1994, commented on how to handle client files when a lawyer's practice is unexpectedly terminated through death or disability.
- Opinion No. 183, written on January 28, 2004, addressed whether an attorney has an obligation to keep a paper copy of the attorney’s correspondence, if they also retain a copy of the correspondence in electronic storage.
- Opinion No. 185, dated April 1, 2004, answered the question whether tangible documents in a file can be destroyed when scanned into an electronic format.
- Opinion No. 187, issued on November 5, 2004, addressed the scope of an attorney’s obligation to provide a client with the contents of the client’s file, including the confines of the duty to maintain a file, what constitutes the client’s property, and the duty to deliver the file to the client.
- Opinion No. 201, created on November 1, 2010, addressed client file retention responsibilities and client notification duties when an attorney leaves a law firm.
The confluence of those Opinions and the current Maine Rules of Professional Conduct lead to the following conclusions relevant to a client file when an attorney who is presumed to have worked in some substantial capacity on the matter documented by the client’s file transfers to another firm.
Rule 1.15 dictates that the lawyer shall promptly deliver any property to which the client is entitled upon request, to include the client’s file. M.R. Prof. Conduct 1.15(d). In the case of a closed file, meaning the representation has ended, that duty does not end. The lawyer must return the client’s file or safeguard all information and data to which the client is entitled in a retrievable format. M.R. Prof. Conduct 1.15(f).
Given the client’s right to the file and the lawyer’s duty of safekeeping, the disposition of the file is the largely the same whether it is the departing attorney who continues the client’s representation or the former firm, and whether the file is for a matter that is open or closed. The departing attorney shall be permitted to take the original file if they will continue to represent the client in that matter. The client gets to decide who will be their attorney, and that attorney gets the original file upon the request of the client. Rule 1.15(f) absolves the firm, as the former attorney no longer representing the client, of the obligation to safekeep the file or to maintain a copy of it once returned to the client or to the departing attorney authorized by the client to take it. When the client wishes the firm to continue the representation, on the other hand, the firm keeps and maintains the original file in order to provide the requested legal services to the client. The departing attorney in that instance has no obligation to safekeep information and data to which the client is entitled.
The question remains whether the departing attorney or the firm whom the client does not choose, and who does not get to keep the original file, may obtain a copy of it nonetheless. The Rule does not answer this question expressly, but there is guidance to be found in Opinion No. 201, which notes that they are entitled to a copy. “While the departing attorney and/or the departing attorney’s law firm may each wish to retain file information for their own purposes or protection, the attorney’s ethical duty is for the benefit of the former client and his or her right of access to file information. Hence, whether this is accomplished through retention by the departing attorney, the firm, or both, the location of the information must be clearly communicated to the client.”13
When the matter is closed because the representation of the client has ended, the result is similar: the client can direct the firm to surrender the original file to the departing attorney and the former firm may keep a copy for itself. The departing attorney then bears the burden of the duty to safekeep and maintain the file imposed by M.R. Prof. Conduct 1.15(f).
8. If a client has paid an advance or retainer, and there is an unearned portion remaining, under what circumstances may the client demand that the firm release it so that it can be paid to the departing attorney?
Short Answer: If a client terminates the representation by a firm after the departure of a lawyer who represented the client, the firm must return any unearned portion of the paid advance or retainer.
Rules Implicated:
M.R. Prof. Conduct 1.0
M.R. Prof. Conduct 1.5
M.R. Prof. Conduct 1.16
M.R. Prof. Conduct 1.15
Discussion: Rule 1.0(o) defines “ ‘[a]dvance,’ ‘advance payment of fees,’ or ‘retainer’” as “a payment by a client in anticipation of the future rendition of services that is not earned until such services are rendered and that is to be credited toward the fees earned when such future services are rendered.” The release of such advance or retainer to either the firm or the client depends on the extent to which fees have been earned by providing services to the client and the terms of the agreement between the client and the firm. M.R. Prof. Conduct 1.5 cmt. (4) (“A lawyer may require advance payment of a fee, but is obliged to return any unearned portion.”); M.R. Prof. Conduct 1.15(b)(1) (a lawyer or firm may withdraw an advance or retainer “only as fees are earned or expenses incurred”).
If a client chooses to discharge a firm after the departure of the lawyer with whom the client worked so that the client may continue the attorney-client relationship with the departing lawyer, the representation of the client by the firm is terminated. M.R. Prof. Conduct 1.16(a)(3). Rule 1.16(d) provides that, on termination of representation, a lawyer or firm must “take steps to the extent reasonably practicable to protect a client’s interests, including … refunding any advance payment of fees or expenses that has not been earned or incurred.” Comment 4 to the Rule notes, “A client has a right to discharge a lawyer at any time, with or without cause, subject to liability for payment for the lawyer’s services.” Therefore, a firm may withdraw any earned portion of the advance payment or retainer, but must return the unearned portion to the client upon discharge. A firm may not withhold from a client any unearned advance fee in the event the firm and departing lawyer are involved in a disagreement over the departure.
As an additional note, Comment 8 clarifies that the limitation on fee divisions in Rule 1.5(e) “does not prohibit or regulate division of fees to be received in the future for work done when lawyers were previously associated in a law firm, nor does paragraph (e) prohibit payment to a former partner or associate pursuant to a separation or retirement agreement.” A firm may pay some of the earned portion of a retainer to a departing attorney for fees the lawyer earned during the time they was associated with the firm. Such payment may be by agreement; nothing in the Maine Rules of Professional Conduct mandates or prohibits such payments.
9. May a firm require attorneys to sign non-compete agreements?
Short Answer: A law firm may not require an attorney to sign a non-compete agreement whether that attorney is joining or leaving the firm.
Rules Implicated:
M.R. Prof. Conduct 5.6
Discussion: Maine Rule of Professional Conduct 5.6 states, in relevant part,
A lawyer shall not participate in offering or making:
(a) A partnership, shareholders, operating, employment, or similar type of agreement that restricts the right of a lawyer to practice after the termination of the relationship, except an agreement concerning benefits upon retirement;....
While Maine once allowed such agreements, as noted in Opinion No. 126, that Opinion was superseded when Maine adopted Maine Bar Rule 3.2(g) in 1997. The commentary is nearly universal in prohibiting covenants not to compete, in part because they place the lawyer’s or the law firm’s own interests above the clients’ right to freely choose their own lawyers.
Footnotes
1Doe v. Reg. School Unit No. 21, No. 2:11-CV-25-DBH, 2013 WL 492540 *10 (D. Me. Feb. 7, 2013) (citing Board of Overseers of Bar v. Mangan, 2001 ME 7, ¶ 9, 763 A.2d 1189, 1192–93 (citations and internal quotation marks omitted)).
2See id., 2013 WL 492540 *9 n. ¶9.
3Id., 2013 WL 492540 *8 (citing M.R. Prof. Conduct 1.9 reporter’s notes, ¶ 8).
4See id., 2013 WL 492540 *5 (attorney “never personally represented [the defendant] . . . , merely performed ‘back office’ work,” but billed 140 hours working with the lead attorney, discussing strategy, filing briefs, and researching legal issues so court found it a “stretch” to say definitively that she did not represent defendant and found it a “closer” question whether there was a violation of Rule 1.9(a)).
5See the discussion in Question No. 5, below, for more information about screening.
6ABA Formal Opinion 99-414 (September 8, 1999).
7See, In re Columbia Valley Healthcare System, L.P., 320 S.W.3d 819, 826 (Tex. 2010).
8See M. Stovall, Lawyer Mobility and Imputed Law Firm Disqualification: Implementing Timely and Effective Ethical Screens, An Illustration of What Not to Do, Connecticut Lawyer (Nov. 2010).
9Id. at pp. 20-21. See also, District of Columbia Bar, Ethics Opinions Nos. 227, 277, 279; Kesselhaut v. United States, 214 Ct Cl. 124, 127-128, 555 F.2d 79, 793 (Ct. Cl. 1977); In re Del-Val Financial Corp. Securities Litigation, 158 F.R.D. 270, 273 (S.D.N.Y. 1994).
10M.R. Prof. Conduct 1.10(e)(2).
11ABA Formal Ethics Opinion 99-414, p. 5 n. 15 (September 8, 1999).
12Id., p. 3
13See Moore v. Ackerman, 24 Misc. 3d 275, 876 N.Y.S.2d 831, 280-81 (Sup. Ct. Kings Co. 2009) (even if retention is not mandatory, a lawyer may make a copy of the outgoing file)(citing N.Y. State Bar Op. 780 (2004) (“[a] lawyer may generally retain copies of documents in the client’s file at the lawyer’s own expense, even over the client’s objection”).
Attorneys moving from one firm to another is a common occurrence. In light of the potential for conflicts of interest and imputed disqualifications resulting therefrom, the hiring firm, the transferring attorney, and that attorney’s former firm must give careful attention to the obligations imposed by the Maine Rules of Professional Conduct, the most commonly implicated of which are addressed in this Opinion.
Enduring Ethics Opinion
Opinion #220. Cyberattack and Data Breach: The Ethics of Prevention and Response
Issued by the Professional Ethics Commission
Date Issued: April 11, 2019
The American Bar Association issued Formal Opinion No. 483 on October 17, 2018, addressing a lawyer’s obligations after suffering an electronic data breach or a cyberattack. The Professional Ethics Commission wanted to take this opportunity to recommend the ABA’s Opinion to the Maine Bar and to address a Maine lawyer’s obligations under the Maine Rules of Professional Conduct both before and after a data breach or cyberattack has occurred.
Question: What are a lawyer’s ethical obligations to understand the risks posed by technology, to prevent a cyberattack or data breach, and to respond once one occurs?
Short Answer: A lawyer’s professional obligations, of course, are not limited merely to the practice of law. Any lawyer who chooses to use technology in order to provide legal services for clients has an obligation to make sure that technology is serving the clients and not disserving them. That obligation applies both before and after a third party uses the lawyer’s technology for their own gains or for other purposes contrary to the interests of the lawyer’s clients. The overriding obligation is to know what the technology does, what it does not, and how to use it safely. If, despite the lawyer’s reasonable efforts to protect electronic data created and stored in the service of clients, a third party defeats those efforts, the lawyer’s obligations are to take reasonable action in order to stop or contain the attack or breach; to investigate and ascertain whether confidential information relating to clients has been, or may have been, compromised; to determine whether the representation of current clients has been, or may have been, significantly impacted or impaired; and to promptly notify current and former clients.
Rules Implicated:
M.R. Prof. Conduct 1.1 - Competence
M.R. Prof. Conduct 1.3 - Diligence
M.R. Prof. Conduct 1.4 - Communications with Clients
M.R. Prof. Conduct 1.6 - Confidentiality of Information
M.R. Prof. Conduct 1.9 - Duties to Former Clients
M.R. Prof. Conduct 1.15 - Safekeeping Property
M.R. Prof. Conduct 5.1 - Responsibilities of Partners, Managers, Supervisors
M.R. Prof. Conduct 5.3 - Responsibilities regarding Non-Lawyer Assistance
Since this Opinion cannot cover every ethical obligation associated with the expanding role of technology in everyday legal practice, the Commission recommends further reading to include not only the resources cited in this Opinion, but also Commission Opinions No. 207 (“The Ethics of Cloud Computing and Storage”), No. 196 (“The Transmission, Retrieval and Use of Metadata Embedded in Documents”), and No. 195 (“Client Confidences: Communications with clients by unencrypted e-mail”).
Discussion: In the case of a data breach or cyberattack, the standard for measuring ethical conduct is not one of strict liability, but reasonableness. The Commission agrees with the ABA Standing Committee on Ethics and Professional Responsibility that the standard of care “does not require the lawyer to be invulnerable or impenetrable. Rather, the obligation is one of reasonable efforts.” ABA Formal Opinion No. 483 at p. 9. Efforts that are deemed to be reasonable, furthermore, do not fit into a neat formula, but are measured based on “a fact-specific approach to business security obligations that requires a ‘process’ to assess risks, identify and implement appropriate security measures responsive to those risks, verify that the measures are effectively implemented, and ensure that they are continually updated in response to new developments.” JILL D. RHODES & ROBERT S. LITT, THE ABA CYBERSECURITY HANDBOOK: A RESOURCE FOR ATTORNEYS, LAW FIRMS, AND BUSINESS PROFESSIONALS, 124 note 11, at p. 73 (2d ed. 2018).
Appropriately, the first Rule of Professional Responsibility is that of competence. “A lawyer shall provide competent representation to a client.” M.R. Prof. Conduct 1.1. While the Rule goes on to talk about “legal knowledge, skill, thoroughness, and preparation,” the lawyer’s obligation of competence extends beyond the “legal” and into the technological, if the lawyer relies on technology to provide legal services.
The Comments to Rule 1.1 mention that competent handling of a matter involves an analysis not only of the factual and legal elements of the problem, but also of the “methods and procedures meeting the standards of competent practitioners.” M.R. Prof. Conduct 1.1 cmt. (5). Those methods and procedures often include using technology to communicate with clients, to store documents and information, to research the facts, to evaluate documentary evidence, and to produce documents, all of which activities introduce the risk of unauthorized access by third parties. “The required attention and preparation are determined in part by what is at stake....” Id.. The more confidential, sensitive, or valuable the client’s data, the greater the risk of harm to the client if a third party accesses them, and the more attention needs to be paid to the technology employed in representing the client.
Attending to the methods and procedures used to represent a client means that “a lawyer should keep abreast of changes” not only in the law, but also in “its practice.” Id., cmt. (6). Keeping abreast of practice changes means seeking education on evolving technology on a regular basis in order to maintain competence in its use. Id. M.R. Prof. Conduct 1.3 similarly requires that a lawyer shall “act with reasonable diligence and promptness in representing a client,” including using technology in the course of representing the client. A lawyer who lacks individual competence to evaluate and employ safeguards to protect client confidences and secrets should seek education from an expert or associate with another lawyer who is competent. See ABA Formal Opinion 477R (May 11, 2017, revised May 22, 2017).
ABA Formal Opinion No. 483 summarizes the lawyer’s responsibility succinctly in noting that the ABA’s counterpart to Maine’s Rule 1.1 requires “lawyers to understand technologies that are being used to deliver legal services to their clients. Once those technologies are understood, a competent lawyer must use and maintain those technologies in a manner that will reasonably safeguard property and information that has been entrusted to the lawyer. A lawyer’s competency in this regard may be satisfied either through the lawyer’s own study and investigation or by employing or retaining qualified lawyer and nonlawyer assistants.” ABA Formal Opinion No. 483 at p. 4. However, the Commission does not mean to suggest that it endorses a complete ignorance of technology just because an associated lawyer or staff member knows all about it. A baseline understanding of, and competence in, the technology used in the practice of law must be maintained by every lawyer.
Where the duty competence in technology intersects with the duty to protect the confidentiality of a client’s information, M.R. Prof. Conduct 1.6 becomes relevant to the discussion. “A lawyer shall not reveal a confidence or secret of a client” except under enumerated circumstances typically involving the client’s consent. A “confidence” means information protected by the attorney-client privilege. A “secret” means information, not privileged, that relates to the representation and for which “there is a reasonable prospect that revealing information will adversely affect a material interest of the client” or information that the client has instructed the lawyer not to reveal. There is no client consent to reveal confidences or secrets to a third party who accessed that information without authorization using technology. Consequently, Rule 1.6 may be violated when an electronic data breach or cyberattack occurs and the lawyer did not “act competently to safeguard information relating to the representation against inadvertent unauthorized disclosure by the lawyer or other persons who are participating in the representation of the client or are subject to the lawyer’s supervision.” M.R. Prof. Conduct 1.6 cmt. (16).
Of course, the lawyer’s duty to prevent unauthorized access also applies to electronic communications. “When transmitting a communication that includes confidences or secrets of a client, the lawyer must take reasonable precautions to prevent the information from coming to the hands of unintended recipients.” Id., cmt. (17). The ABA’s Formal Opinion No. 477R provides a comprehensive discussion of the ethical responsibility incumbent on a lawyer when communicating with a client using the Internet. “A lawyer generally may transmit information relating to the representation of a client over the internet without violating the Model Rules of Professional Conduct where the lawyer has undertaken reasonable efforts to prevent inadvertent or unauthorized access. However, a lawyer may be required to take special security precautions when required by an agreement with the client or by law, or when the nature of the information requires a higher degree of security.” ABA Formal Opinion No. 477R at p. 1. Maine’s Rule 1.6 “does not require that the lawyer use special security measures if the method of communicating affords a reasonable expectation of privacy. Special circumstances, however, warrant special precautions.” M.R. Prof. Conduct 1.6 cmt. (17). The extent to which a communication is protected by law or by a confidentiality agreement are two factors to be considered in determining the reasonableness of the lawyer’s expectation of confidentiality and privacy. The sensitivity of the information and its impact on the client, should it fall into wrong hands, is another factor.
Of course, the client’s wishes must be followed when it comes to security. “A client may require the lawyer to implement special security measures not required by this Rule or may give informed consent to the use of the means of communication that would otherwise be prohibited by this Rule.” Id. In the case of less protection than Rule 1.6 may require, the informed consent discussion the lawyer has with the client should be thorough and documented. The issue of what constitutes sufficient informed consent is different from client to client and from situation to situation. The Commission recommends that a lawyer who seeks to obtain a client’s consent to less protection than the Rules may require consult court and other decisions addressing whether discussions precipitating client consent were sufficient in other instances.
Lawyers should be well-versed in the fact that electronic data can constitute “property” of the client for which Rule 1.15 requires a duty of safekeeping. The duty lawyers owe to protect hardcopy documents and other tangible property given to them by clients applies equally to electronic data. Even when the representation has ended, the lawyer has an obligation to “retain and safeguard such information and data for a minimum of eight (8) years” or longer if the data has intrinsic value. M.R. Prof. Conduct 1.15(f). Generally speaking, “a lawyer should hold property of others with the care required of a professional fiduciary,” M.R. Prof. Conduct 1.15 cmt. (1), and that includes electronic data. The Rules extend this fiduciary responsibility beyond the lawyer who is working individually with the client. It includes that lawyer’s partners and any attorney who exercises “comparable managerial or authority in the law firm.” M.R. Prof. Conduct 5.1(a) & (c)(2). The Rules “impose upon lawyers the obligation to ensure that the firm has in effect measures giving reasonable assurance that all lawyers and staff in the firm conform to the Rules of Professional Conduct.” ABA Formal Opinion No. 483 at p. 4. See, also, M.R. Prof. Conduct 5.1(a).
A lawyer’s responsibility for non-partners who are not diligent in their understanding and use of technology is limited to situations where the lawyer ordered or ratified the conduct with knowledge of it. M.R. Prof. Conduct 5.1(c)(1). When a lawyer has direct supervisory authority over another lawyer, on the other hand, they must “make reasonable efforts to ensure that the other lawyer conforms to the Rules of Professional Conduct.” M.R. Prof. Conduct 5.1(b). The supervising attorney can be responsible for the other attorney’s non-conformance with the Rules if the attorney “knows of the conduct at a time when its consequences can be avoided or mitigated but fails to take reasonable remedial action.” M.R. Prof. Conduct 5.1(c)(2).
Individual attorneys are not absolved of their ethical duty to abide by the Rules of Professional Conduct by virtue of the fact that another partner, member of management, or other attorney has assumed greater duties with respect to certain requirements of the Rules. It is a violation of Rule 5.1 if an attorney knows precious little about the risk technology poses to a client, uses that technology, and causes the inadvertent revelation of the client’s confidences or secrets, even if another attorney in the firm is the foremost expert in the technology. M.R. Prof. Conduct 5.1 cmt. (8); M.R. Prof. Conduct 5.2(a). It is not enough to rely on another attorney in a firm who is fluent in the current state of technology and its risks, limitations, and benefits. All partners, shareholders, and other members of a professional organization of lawyers, in addition to the management designated by those organizations, have an obligation to ensure that there are sufficient internal policies and procedures for conformance with the Rules of Professional Conduct.
Lawyers who are partners, management, and direct supervisors in a law firm have a duty with respect to their non-lawyer staff too. M.R. Prof. Conduct 5.3. Support staff, even if independent contractors, must be given “appropriate instruction and supervision concerning the ethical aspects of their employment, particularly regarding the obligation not to disclose the information relating to representation of the client, and should be responsible for their work product.” M.R. Prof. Conduct 5.3 cmt. (1).
In addition to training lawyers and staff, the Commission agrees with the ABA that “based on lawyers’ obligations (i) to use technology competently to safeguard confidential information against unauthorized access or loss, and (ii) to supervise lawyers and staff, lawyers must employ reasonable efforts to monitor the technology and office resources connected to the internet, external data sources, and external vendors providing services relating to data and the use of data.” ABA Formal Opinion No. 483 at p. 5. The responsibility is two-fold: (1) supervising the use of technology by lawyers and staff to ensure it is consistent with their training and instruction, and (2) monitoring the status of the technology itself in order to reveal attacks and breaches as soon as reasonably detectible.
In Opinion No. 207, the Commission noted that “[w]hat changes with evolving technology is not the overriding ethical constraints on counsel, but how those constraints are satisfied with respect to new challenges presented by that technology.” The ABA has observed that fulfilling a lawyer’s responsibilities after a data breach or cyberattack requires the lawyer to “understand technologies that are being used to deliver legal services to their clients” in the first place. ABA Formal Opinion No. 483 at p. 4. Once the duty to understand the technology being used has been met, the lawyer’s corollary duty involves how to address a problem with that technology when it arises. The Commission recommends creating a plan to address known or suspected security breaches, including the identification of persons to be notified, in order to assist counsel with their ethical obligations.
If no confidential information relating to a client has been, or may have been, compromised, and the representation of a client has not been significantly impacted or impaired by the cyberattack or data breach, the lawyer’s ethical obligation may be limited to making reasonable efforts to prevent a reoccurrence. For example, the lawyer or the law firm may need to install or update security systems or technology or seek additional training. If the lawyer has an obligation to notify clients at all, it may be limited to the dictates of federal or state law. See, e.g., 10 M.R.S. §§ 1346-1350B (notice of risk to personal data); 45 C.F.R. §§ 164.404-414 (HIPAA breach notification rules); 15 U.S.C. §§ 6801, et seq. (disclosure of nonpublic personal information requirements under the Graham-Leach-Bliley Act).
Notification requirements under the Maine Rules of Professional Conduct arise when confidences or secrets are exposed or the breach significantly impairs or impacts the representation of a client. A cyberattack or data breach alone may give rise to a duty to notify clients, depending on the circumstances. Rule 1.3 requires that the lawyer “act with reasonable diligence and promptness in representing a client.” Rule 1.4 provides that the lawyer “keep the client reasonably informed about the status of the matter.” Once the scope of an attack or breach is understood, the lawyer must promptly and accurately make an appropriate disclosure to the client. We agree with the ABA that the Rules “do not impose greater or different obligations on a lawyer as a result of a breach involving client information, regardless of whether the breach occurs through electronic or physical means.” ABA Formal Opinion No. 483 at p. 7.
Due to the nature and scope of the cyberattack or data breach, the lawyer may reasonably believe that, in addition to the client, a disclosure should be made to third parties. Disclosure to third parties revealing confidential client information requires an analysis under Rule 1.6 to determine whether informed consent must first be obtained from the client or whether one of the exceptions applies. For example, the lawyer may make a disclosure to law enforcement with or without the informed consent of the client if the lawyer must make the disclosure in order to comply with applicable law. “Although the public interest is usually served by a strict rule requiring lawyers to preserve the confidentiality of confidences and secrets of clients’ information,” M.R. Prof. Conduct 1.6 cmt. (6), that rule is not without its exceptions. It is conceivable that a cyberattack or data breach could expose confidential information that presents a risk to public safety. Under those circumstances, a lawyer may disclose confidential information in order to prevent reasonably certain substantial bodily harm or death.
While the Commission agrees with the analysis contained in ABA Formal Opinion No. 483 concerning notification of a current client, the Commission departs from the ABA with respect to a former client. The ABA reviewed Model Rules 1.9 and 1.16 and concluded that notice to a former client is not required. However, Maine’s Rule 1.9 provides that a “lawyer who has formerly represented a client shall not thereafter: (2) reveal confidences or secrets of a former client except as these Rules would permit or require with respect to a client.” The duty of confidentiality survives the termination of the client-lawyer relationship. M.R. Prof. Conduct 1.6 cmt. (18). Indeed, trust is the “hallmark of the client-lawyer relationship,” id., cmt. (2), whether for a current or a former client. The Commission concludes that a former client is entitled to no less protection and candor than a current client in the case of compromised secrets and confidences. A former client must be timely notified regarding a cyberattack or data breach that has, or may have, exposed the client’s confidences or secrets.
In addition, Rule 1.15(f) requires that “upon termination of representation, a lawyer shall return to the client or retain and safeguard in a retrievable format all information and data in the lawyer’s possession to which the client is entitled.” (Emphasis added.) The Commission recently issued an Enduring Ethics Opinion commenting on Commission Opinion No. 187 and clarifying that information and data is entrusted to the attorney for safekeeping for both current and former clients.
Finally, as previously noted in the prevention of cyberattacks or data breaches, M.R. Prof. Conduct Rules 5.1 and 5.3 require a lawyer to take reasonable measures to provide assurance that the conduct of lawyers and non-lawyer assistants in a law firm is compatible with the professional obligations of the lawyer. The ethical obligations of a lawyer that arise after a cyberattack or data breach, including taking reasonable actions to stop or contain it, investigating the attack or breach, and notifying affected current and former clients are shared by many in the law firm.
Enduring Ethics Opinion
Opinion #221. Lawyers on Loan to District Attorney's Offices
Issued by the Professional Ethics Commission
Date Issued: March 13, 2020
Enduring Ethics Opinion
Opinion #222. Conflicts of Interest in Prosecutorial Applications
Issued by the Professional Ethics Commission
Date Issued: June 17, 2020
Introduction
As the practice of law has become increasingly mobile, and attorneys continue to practice while seeking new job opportunities, it has become common for active criminal defense counsel to apply for State or federal prosecutorial positions. The Commission has received requests for formal guidance to practitioners contemplating, or engaged in, such inquiries.
Question
Under what circumstances may a lawyer who is primarily engaged in criminal defense work continue to represent criminal defense clients while seeking a position with the United States Attorney’s office or a State prosecutorial office?
Applicable Rules
Maine Rules of Professional Conduct ("M. R. Prof. Conduct") 1.3, 1.4(1), 1.7 (a)(2), 1.7 (b) and 1.0(e).
Summary
Based upon an analysis of applicable Rules of Professional Conduct, a criminal defense lawyer may continue to represent criminal defense clients while seeking employment with a prosecutorial office. However, a lawyer pursuing such employment must obtain informed consent from a client if (1) the lawyer has a material and active role in the client relationship and (2) the lawyer's interest in employment by the prospective employer is concrete and has been communicated and reciprocated.
Discussion
This inquiry raises the issues of whether, and when, a lawyer who is seeking a prosecutorial position is disqualified from continuing to represent clients in criminal defense matters during the process but before becoming employed. At issue are the extent to which the lawyers interest in pursuing the job reasonably may be expected to interfere with his or her professional judgment on behalf of the clients, and whether the lawyer may continue to represent existing or new clients being prosecuted by the agency with which he or she is seeking employment. M.R.Prof. Conduct 1.3 requires an attorney to "act with reasonable diligence and promptness in representing a client." Rule 1.4(1) directs the same lawyer to inform a client of any circumstance in which the clients informed consent is needed.
Most importantly, Rule 1.7(a)(2) prohibits a lawyer from representing a client when "there is a significant risk that the representation [of the client] would be materially limited... by a personal interest of the lawyer." M.R.Prof.Conduct 1.7(a)(2). It is common sense that an attorney’s personal interests should have no adverse effect on representation of a client, as "loyalty and independent judgment are essential elements in the lawyer’s relationship to a client." Id., cmt. 1 & 10. Those personal interests can include efforts to secure new employment that, if accepted, would obviously prohibit continued representation.
Rule 1.7 Personal Interest Conflict
Under certain circumstances, a lawyer facing a personal conflict of interest may represent a client if the following conditions enunciated by Rule 1.7(b) exist:
- The lawyer reasonably believes that the lawyer would be able to provide competent and diligent representation to each affected client; and
- Each affected client gives informed consent, confirmed in writing.
Generally, compliance with Rule 1.7(b) requires a conflicted lawyer to engage in a multi-step process to identify affected clients, determine whether or not a conflict exists, decide whether, despite the existence of the conflict, representation may occur with client consent, consult with each affected client to clearly inform them of the conflict, and obtain the clients’ informed consent, confirmed in writing. M.R.Prof. Conduct 1.7(b), cmt 2.
To date, Maine has not addressed the application of M.R.Prof. Conduct 1.7(a)(2) and 1.7(b) in the context of an attorney exploring employment with opposing counsel, nor more specifically in the context of a criminal defense attorney exploring employment with a prosecutorial office.
In 1996, the ABA Committee on Ethics and Professional Responsibility (the "ABA") promulgated a comprehensive formal opinion on the subject of when a lawyer’s pursuit of employment with a firm or party that the lawyer is opposing in a matter may, in violation of Model Rule 1.7(b), materially limit representation of a client. Model Rule 1.7(b) is a precursor to Model Rule 1.7(a)(2), adopted in 2002 and on which is based current M.R.Prof. Conduct 1.7(a)(2).1
Model Rule 1.7(b), as addressed in ABA Formal Opinion 96-400, provided:
"A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer’s responsibilities to another client or to a third party, or by the lawyer’s own interests, unless:
(1) The lawyer reasonably believes the representation will not be adversely affected; and
(2) the client consents after consultation."
The ABA recognized that the lawyer’s pursuit of employment with opposing counsel may, depending on the stage of discussion, adversely affect the lawyer’s discharge of many of the lawyer’s ethical duties to the client. Such duties might include:
- The duty of the lawyer to serve his client without limitations resulting from his own personal interest: the judgment of a lawyer pursuing employment with an opposing firm or attorney may be affected by the lawyer’s interest in currying favor with, or at least not antagonizing, the prospective employer;
- The vigor of the lawyer’s representation: a desire not to offend a prospective employer might lead the lawyer to recommend a course of action which does not best serve his client, or may prompt the lawyer to postpone work on the matter when such postponement is not in his client’s best interest;
- The lawyer might reveal confidential information acquired in the attorney-client relationship: the lawyer might inadvertently reveal confidential information in discussions with the prospective employer about the compatibility of the lawyer’s work or about the lawyer’s clients and business potential.
See ABA Formal Op. 96-400, at 3.
In Formal Opinion 96-400, the ABA recognized that the mere prospect of a conflict will not itself preclude representation. Rather, "[t]he critical questions are the likelihood that a conflict will ensue and, if it does, whether it will materially interfere with the lawyer’s independent professional judgment in considering alternatives or foreclose courses of action that should reasonably be pursued on behalf of the client." ABA Formal Op. 96-400, at 4.
The ABA identified two overriding factors affecting the "likelihood that a conflict will eventuate" and "materially interfere with the lawyer’s independent professional judgmenton behalf of the client": the nature of the lawyer’s role in the representation of the client; and the extent to which the lawyer’s interest in the employment opportunity is concrete, and has been communicated and reciprocated. Id., at 4.
On the first point, the ABA concluded that the risk that a lawyer’s job search would adversely affect the lawyer’s judgment in considering alternatives or foreclosing courses of action is more significant where the lawyer has an active and material role in representing the client. Id.
With respect to when the duty of consultation and of obtaining consent to the continued representation arises, the ABA concluded that clients and lawyers "are all best served by a rule which requires consultation and consent at the earliest point that a client’s interest could be prejudiced." Id., at 5. However, the lawyer’s duties to a client are unlikely to be adversely affected before the lawyer has communicated an interest to the prospective employer or before the prospective employer has communicated its interest in the lawyer. Moreover, an interest that is communicated but unreciprocated was not deemed to present a significant risk that the lawyer’s duties to the client would be materially limited. The ABA noted, however, that conditions for consultation and disclosure "are certainly met at the point that the lawyer agrees to participate in a substantive discussion of his experience, clients or business potential, or the terms of an association." Id., at 5. The ABA concluded, "[A] lawyer who has an active and material role in representing a client in litigation must consult with and obtain the consent of that client, ordinarily before he participates in a substantive discussion of his experience, clients or business potential or the terms of an association with an opposing firm." Id.2
State jurisdictions other than Maine have addressed the issue more directly in the criminal defense context over the years. In 1990, the District of Columbia Bar Legal Ethics Committee (the "D.C. Bar") issued Ethics Opinion 210, directly addressing the circumstances under which a criminal defense lawyer may continue to represent clients while pursuing employment with a prosecutorial office. In 2014, the D.C. Bar clarified Opinion 210 in Ethics Opinion 367. The D.C. Bar’s opinions have since served as the backdrop for most subsequent analysis of this issue in the criminal defense context.3
In Ethics Opinion 210, the D.C. Bar focused on the job applicant lawyer’s responsibility to represent his or her clients zealously, without interference stemming from the lawyer’s personal interests. D.C.’s version of Rule 1.7 and its predecessor were held to require disclosure to criminal defense clients of the potential new employment, along with the "possibility of added expense, delay, inconvenience and other disadvantages that may occur, if the lawyer subsequently withdraws from the case, perhaps at a most inconvenient time," to take a position with the United States Attorney’s office. D.C. Bar Op. 210, §1, at 3. The same Rules required client consent to continued representation, after receiving the disclosure. Importantly, the lawyer’s duty to disclose was held to arise upon the first active step toward seeking such employment. In Ethics Opinion 210, the D.C. Bar determined that while the duty to disclose and obtain consent did not arise upon a lawyer’s dissemination of blanket form letters and resumes to multiple potential employers, a targeted employment letter or application would trigger the obligation. Id., § 1 at 3.
D.C. Bar Op. 210 also noted that a pending application for employment with a prosecutor’s office did not prohibit a lawyer from accepting new clients, as long as full disclosure was provided, and the clients consent obtained. Id., §2 at 3.
In 2014, the D.C. Bar clarified Opinion 210 in Ethics Opinion 367, interpreting D.C.’s Rule 1.7(b)(4) (addressing personal interest conflicts) to require that a defense lawyer seeking employment with a prosecutor’s office engage in both an objective and subjective test to determine the viability of continued representation. In Op. 210, the D.C. Bar opined that the lawyer must consider whether the employment search would cause the lawyer to "pull punches," to recommend a different course of action, to postpone work on the client’s matter, and the like. If the lawyer answers any of these questions affirmatively, then the lawyer effectively has determined that his or her professional judgment on behalf of the client will be or reasonably may be affected by a personal conflict of interest. D.C. Bar Op. 367 at 3.
To this subjective test, D.C. Bar Ethics Opinion 367 added an objective test: even if a lawyer subjectively concludes that his or her personal interest will not impair representation of a defense client, the duty to disclose will arise if an objective observer would reasonably doubt that subjective conclusion. Id., §1(b), at 3.
D.C. Ethics Opinion 367 describes those factors upon which an objective observer could determine that a personal conflict of interest exists in an employment search process. The D.C. Bar argued against a bright-line approach, recognizing that whether an objective observer will determine a personal conflict of interest exists depends on the specific facts of a case. Instead, it espoused a more "nuanced approach" for determining the existence of a personal interest conflict in the employment search context, an approach that tracks that of ABA Formal Op. 96-400. In Ethics Opinion 367, the D.C. Bar identified two criteria to consider in determining whether a personal conflict exists: (1) whether the lawyer has a material and active role in representing the client; and (2) whether the lawyer’s interest in the prospective employer is targeted, communicated and/or reciprocated. D.C. Bar. Op. 367. §§ 1(c)(i) and (ii), at 4-5. The D.C. Bar specifically concluded that if a lawyer has a material role in the client relationship, a personal conflict of interest arises "if the lawyer participates in substantive discussions of his experience, clients, or business potential, or the terms of employment, with the prospective employer." Id., §1(c)(ii), at 5.
The North Carolina Bar adopted the same position in 2016 Formal Ethics Opinion 3, noting that a "substantive discussion" entails a communication between the lawyer and the hiring entity about the lawyer’s skills, experience, ability to attract clients, and employment terms.
This Commission finds the reasoning adopted by the ABA in Formal Opinion 96-400 and its progeny, and in particular D.C. Bar Ethics Opinion 367, to be persuasive and consistent with the terms and intent of M.R.Prof. Conduct 1.7(a)(2). The Commission does not find that any exploration of employment by defense counsel with the US Attorney’s Office or with a State prosecutorial office per se adversely affects the client or creates a significant risk that the lawyer’s judgment on behalf of the client will be materially limited by the lawyer’s personal interest. As such, the Commission concludes that there is a significant risk that a criminal defense lawyer’s representation of one or more clients will be materially limited by a personal interest of the lawyer exploring employment with a prosecutorial office when (1) the lawyer has a material and active role in the client relationship and (2) the lawyer’s interest in employment by the prospective employer is concrete and has been communicated and reciprocated. The point at which the criteria of concreteness, communication and reciprocity/mutuality exists will vary, and the Commission does not preclude the prospect that, in a particular case, a significant risk of a personal conflict of interest may arise in the earliest stages of an employment search. Such criteria certainly are met when the lawyer agrees to participate in a substantive discussion of the lawyer’s experience, clients or business potential, or the terms of employment with the prospective employer. At such time, the lawyer must consult with the client and must obtain the informed consent of that client before the lawyer may proceed further in discussions with the prospective employer.
Rule 1.0(e) Informed Consent.
A majority of jurisdictions have consistently determined that a private-practice criminal defense attorney exploring employment with a prosecutor’s office may continue to represent clients, even after taking substantive steps in the job search, after full disclosure of that effort and its potential impact and after obtaining the clients’ informed consent in writing.
M.R.Prof. Conduct 1.7 (b) requires that if a personal conflict of interest, as determined under M.R.Prof. Conduct 1.7(a)(2), exists, a lawyer may continue to represent (or undertake to represent) a client if:
- the lawyer reasonably believes that the lawyer would be able to provide competent and diligent representation to the affected client; and
- the affected client gives informed consent, confirmed in writing.
To "reasonably believe" means that the lawyer believes the matter in question and that the circumstances are such that the belief is reasonable, that is, the belief is one which would be held or arrived at by a reasonably prudent and competent lawyer. M.R.Prof. Conduct 1.0(h) and (i). As such, Rule 1.7(b)(1) sets forth both a subjective and an objective standard to be met. "When a disinterested lawyer would conclude that the client should not agree to the representation under the circumstances, the lawyer involved cannot properly ask for such agreement or provide representation on the basis of the clients consent." M.R.Prof. Conduct 1.7(b)(1), cmt. 14.
Assuming that the requirements of Rule 1.7(b)(1) are met, representation may only continue if the client gives informed consent, confirmed in writing. Rule 1.0(e) defines "informed consent" as:
a person’s agreement to a proposed course of conduct after the lawyer had communicated adequate information and explanation about the material risks of and any reasonably available alternatives to the continuation of the representation. Whether the client has given informed consent to the representation shall be determined in light of the mental capacity of the client to give consent, the explanation of the risks involved which is provided by the lawyer seeking consent, the circumstances under which the explanation was provided and the consent obtained, the experience of the client in legal matters generally, and any other circumstance bearing on whether the client has made a reasoned and deliberate choice.
M.R.Prof. Conduct 1.0(e).
Informed consent requires that the affected client be aware of the relevant circumstances and of the material and reasonably foreseeable ways that the consent could adversely affect the client’s interest. The lawyer should identify for the client all facts that the client should consider in making an informed decision, with the specific information required to be provided depending on the nature of the conflict, the nature of the representation and the nature of the risks involved. M.R.Prof. Conduct 1.0 (e), cmt. 18.4
If the client declines to consent to the continued representation after the required disclosure, then the lawyer must either: end the lawyer’s pursuit of employment with the US Attorney’s Office or State prosecutorial office; or withdraw from the representation but only after complying with all rules of the tribunal and/or jurisdiction governing an attorney’s withdrawal from criminal defense representation. See, e.g., M.R.Prof. Conduct 1.16.
Conclusion
A Maine criminal defense lawyer seeking employment with a prosecutor’s office may give rise to a personal interest conflict under M.R.Prof. Conduct 1.7(a)(2), depending on the role that lawyer plays in the client’s matter and the degree to which the lawyer’s interest in the prosecutorial office as employer is concrete, communicated and reciprocated. However, such lawyer is not prohibited from continuing to represent defense clients in matters adverse to that prosecutorial office, even after the first substantive step in that job search, provided that he or she reasonably believes that he or she may provide competent and diligent advice to affected clients, and that the affected clients have consented in writing to continued representation, after the lawyer’s full disclosure.
1See ABA Ethics 2000 Commission Report, Reporter’s Explanation of Changes, Model Rule 1.7, n. 2 ("Unlike present paragraph (b), in which a conflict exists if the representation "may be" materially limited by the lawyer’s interests or duties to others, proposed paragraph (a)(2) limits conflicts to situations in which there is a "significant risk" that the representation will be so limited. This proposed change is not substantive but rather reflects how current paragraph (b) is presently interpreted by courts and ethics committees. The purpose of these proposed changes it to clarify the text and to better educate lawyers regarding the complex subject of conflict of interest. No change in substance is intended.")
2Model Rule 1.7(b) and associated Comment 10 (regarding personal conflicts arising from employment searches) are "intended to incorporate ABA Formal Opinion 96-400" ABA Ethics 2000 Commission, Reporter’s’ Explanation of Changes (hereinafter, "Reporter’s Explanation"), 1.7, cmt. 10
3Although the text of the ethical rule considered in both D.C. Bar Op. 210 and D.C. Bar Op. 367 differs from that of ABA Model Rule 1.7(a)(2) and M.R.Prof.Con.1.7(a)(2), nonetheless, these D.C. Bar Opinions serve as useful guidance. As the ABA notes in its 2002 revision of former Model Rule 1.7(b), the changes to the text of current Model Rule 1.7 are simply intended to reflect the manner in which courts and state ethics committees uniformly had been interpreting the Rule. Reporter’s Explanation, 1.7, n. 2.
4For additional guidance on, and discussion of, the meaning and application of "informed consent", see M.R.Prof. Conduct 1.7, cmts. 18 through 20 and Maine Professional Ethics Opinion #219 (2018).
Enduring Ethics Opinion
Opinion #223. Ethical Obligations of Former Counsel in Post-Conviction Review Cases
Issued by the Professional Ethics Commission
Date Issued: September 10, 2020
Introduction
The purpose of this opinion is to provide guidance where former counsel has become aware that a former client filed a post-conviction review ("PCR") proceeding alleging ineffective assistance of counsel ("IAC") in criminal or child protective proceedings, either through an informal inquiry by the prosecutor defending the case requesting information, by receipt of the PCR filing itself, or otherwise.
Primary Questions:
- What are the former counsel’s continuing duties to a former client where a post-conviction review (PCR) proceeding has been filed alleging ineffective assistance of counsel (IAC) by the former attorney in her representation?
- What are former counsel’s duties regarding requests for information or formal discovery in the PCR proceeding, whether formally through issuance of a subpoena by a prosecutor defending the action or requesting the file, or testimony by deposition.
Short Answers:
- Legal representation requires fiduciary duties of loyalty and confidentiality extending beyond the termination of the representation. Although a claim of IAC may waive attorney-client privilege, the waiver may be limited to the scope of the IAC claim. The best practice is for counsel to avoid making any disclosures beyond releasing the file to current counsel (consistent with the Commission’s Enduring Ethics Opinion #187).
- The Commission endorses seeking court intervention for any discovery from former counsel beyond transmittal of the former client’s file to the client or current counsel. Court intervention achieves the necessary disclosures while protecting client confidences that are not directly implicated by the IAC claims. Lawyers who are uncertain about the nature and extent of disclosures should consider obtaining a ruling from the court which necessarily will involve the former client’s current counsel. This recommendation provides counsel with a "safe harbor" to avoid one’s conduct being questioned later.
Guidance Summary:
Circumspect disclosure within the orbit of formal legal process is the most prudent path former counsel can follow in meeting her obligations to the former client and the courts while balancing legitimate concerns involving self-interest in one’s professional reputation, potential exposure to administrative disciplinary proceedings, and civil liability. Although the Maine Rules of Professional Conduct contains a "self-defense" exception to client confidentiality, which is permissive, not mandatory, the use of some form of judicial oversight will ensure that the former client can assess and, if necessary, object on privilege and relevance grounds those matters deemed not reasonably necessary to the issues actually presented in the IAC claim.
The Commission discourages informal communications with either current counsel or the prosecutor defending the PCR action. Obligations for information reasonably necessary to the IAC claim can be achieved through the use of subpoena for former counsel’s file, a motion for a protective order to limit disclosure to reasonably necessary matters based on the particular IAC allegations, and/or a deposition of former counsel. Pre-hearing disclosures within the ambit of formal process assist in meeting former counsel’s obligation "to provide the client with reasonable notice of the intended disclosures" while allowing current counsel the opportunity to limit the extent of confidential disclosures.
Applicable Rules:
M.R. Prof. Conduct 1.6 - Confidentiality of Information
M.R. Prof. Conduct 1.6(a):
A lawyer shall not reveal a confidence or secret of a client unless, (i) the client gives informed consent; (ii) the lawyer reasonably believes that disclosure is authorized in order to carry out the representation; or (iii) the disclosure is permitted by paragraph b.
M.R. Prof. Conduct 1.6(b)(5):
A lawyer may reveal a confidence or secret of a client to the extent the lawyer reasonably believes necessary:
(5) To establish a claim or defense on behalf of the lawyer in a controversy between the lawyer and the client, to establish a defense to a criminal charge or civil claim against the lawyer based upon conduct in which the client was involved, or to respond to allegations in any proceeding concerning the lawyer's representation of the client.
M.R. Prof. Conduct 1.6(c):
Before revealing information under paragraph (b)(5) or (6) in controversies in which the client is not a complainant or a party, the lawyer must, if feasible make a good faith effort to provide the client with reasonable notice of the intended disclosures.
M.R. Prof. Conduct 1.9 Duties to Former Clients
M.R. Prof. Conduct 1.9(c):
A lawyer who has formerly represented a client in a matter or whose present or former firm has formerly represented a client in a matter shall not thereafter:
(1) use confidences or secrets of a former client to the disadvantage of the former client except as these Rules would permit or require with respect to a client, or when the information has become generally known; or
(2) reveal confidences or secrets of a former client except as these Rules would permit or require with respect to a client.
Discussion:
A. Overview of Former Counsel’s Obligations
The work of legal representation comes with fiduciary duties of loyalty and confidentiality. The duty of confidentiality to the client extends beyond the termination of the representation. Maine Rule of Professional Conduct 1.9(c)(1), which sets out counsel’s duty to former clients, prohibits the attorney from using "confidences and secrets of a former client to the disadvantage of the former client except as these Rules would permit or require[.]"
A claim of IAC in PCR comes with tripartite ethical demands and conflicts. Former counsel must navigate obligations to the former client, current obligations to the court, and legitimate concerns of self-interest in one’s professional reputation as well as potential exposure to administrative disciplinary proceedings and civil liability.
While a claim of IAC ordinarily waives attorney-client and work product protections (coextensive with the scope of the IAC claim), out of court disclosures are problematic because of the lack of a client’s assessment and opportunity to object on privilege and relevance grounds. While waiver affords interested parties a fair opportunity to establish the facts underlying the claim, the paramount concept of confidentiality must be accomplished with either informed consent or the opportunity to present objections on grounds of privilege and scope.
B. Best Practices Involve Disclosures with Judicial Oversight
The best practice for counsel facing an IAC claim is to make no disclosure outside court-supervised proceedings. This option remains the most effective method to protect against over-disclosure of confidential information and consistent with the goals for promoting attorney-client confidentiality and public confidence in the legal profession. The protection against unsupervised disclosures is paramount. The disclosure of confidential information beyond the scope of the rules and the implicit attorney-client waivers could result in prejudice to the defendant on retrial, and a chilling effect on how clients confide in their lawyers.
Counsel places herself in a potentially precarious position if solely making a self-assessment of what information to share in an IAC defense. Without some form of judicial oversight, former counsel essentially decides the scope of disclosures concerning her own conduct without the benefit of basic objectivity, the hallmark of considered legal judgment. Decisions about what is "reasonably necessary" information to meet IAC allegations may be complicated by both a "natural tendency to defend and vindicate [one’s] own conduct," In re Thompson, 2014 WI 25, P. 40, 847 N.W. 2d 793, 80, and understandable emotional reactions including "feelings of anger and betrayal" DC Op 364. The caution of the RESTATEMENT is well-taken here: "the [self-defense] disclosure is warranted only when it constitutes a proportionate and restrained response to the charges." RESTATEMENT (THIRD) OF THE LAW GOVERNING LAWYERS, 64 cmt. e (emphasis added).
In reviewing IAC claims in PCR proceedings, the courts have exercised a variety of methods to maintain a former client’s confidentiality while recognizing that the IAC claim waives attorney-client privilege to the extent needed to prove or disprove the claim. Judges faced with challenges to maintain client confidences utilize various devices: protective orders to limit the scope of the disclosures, the subsequent use of information disclosed, and the threat of the imposition of sanctions for violations; in camera inspection of preliminary affidavits by former counsel and accompanying file documents; and depositions of former counsel. The extent of judicial involvement may turn on the scope of the IAC claim.
C. Self-Defense Exception Disclosures Are Not Recommended
Both the Maine Rules for Professional Conduct and the Model Rules contain a "self-defense exception" which is applicable in the IAC context. The exception permits revealing confidential information under certain circumstances. M.R. Prof. Conduct 1.6(b)(5) provides that: "[a] lawyer may reveal a confidence or secret of a client to the extent the lawyer reasonably believes necessary . . . to establish a claim or defense" in controversies where a lawyer’s conduct is called into question.
The self-defense exception attempts to strike a balance between permitting a lawyer accused of wrongdoing to respond to the charges, while assuring procedural fairness to the former client concerning the nature and extent of the disclosure. The self-defense exception rests on principles of agency law and fairness: "in the absence of the exception lawyers accused of wrongdoing would be left defenseless against false charges in a way unlike any other occupational group." RESTATEMENT (THIRD) OF THE LAW GOVERNING LAWYERS, 64 cmt. b.
The self-defense exception is permissive, not mandatory. While the text of Rule 1.6(b)(5) does not require some form of judicial supervision or participation in self-defense disclosures, the limitations imposed by the exception—only disclosures "the lawyer reasonably believes is necessary" concerning an allegation in controversy—place former counsel in a difficult situation. Counsel may be required to assess facts and legal claims without the benefit of full information and impartial judgment and guidance. In summary, while disclosure outside of the judicial process is permitted, it is not recommended.
Conclusion:
Lawyers engaged in criminal defense work must occasionally address their ethical duties as former counsel. That analysis implicates an objective consideration of client confidentiality and limited disclosures within the parameters of judicial oversight.
Enduring Ethics Opinion
Opinion #224. Payment to Non-Expert Witness as a Litigation Expense
Issued by the Professional Ethics Commission
Date Issued: April 15, 2021
Question:
Can a lawyer pay a non-expert witness for time spent testifying at a deposition or a trial, preparing for such testimony, and other related costs?
Short Answer:
A lawyer may advance court costs and litigation expenses without running afoul of the Maine Rules of Professional Conduct, including paying a non–expert witness’s lost wages, expenses, and other costs related to preparing and providing testimony or otherwise assisting counsel, so long as the payment is reasonable and not conditioned on the content of the witness's testimony.
Rules Implicated:
M.R. Prof. Conduct 1.2 Scope of Representation and Allocation of Authority
Between Client and Lawyer
M.R. Prof. Conduct 1.5 Fees
M.R. Prof. Conduct 1.8: Conflict-of-Interest: Current Clients: Specific Rules
M.R. Prof. Conduct 3.4: Fairness to Opposing Party and Counsel
An attorney may advance court costs and litigation expenses, including payment of costs and expenses to a non-expert witness.
Following inquiries from members of the bar about the scope of Maine Rule of Professional Conduct 1.8(e), and specifically its application in the context of payment to a non– expert witness, also referred to as a "fact witness" or "occurrence witness", the Professional Ethics Commission provides the following analysis and clarification about the rule with respect to advancing court costs and litigation expenses. Rule 1.8(e) provides:
A lawyer shall not provide financial assistance to a client in connection with pending or contemplated litigation, except that: (1) a lawyer may advance court costs and expenses of litigation, the repayment of which may be contingent on the outcome of the matter; and (2) a lawyer representing an indigent client may pay court costs and expenses of litigation on behalf of the client. M.R. Prof. Conduct 1.8(e).
This text both allows for traditional billing practices in which an attorney bills a client for costs incurred and advanced by the attorney during the course of the representation while also ensuring that a client with limited financial resources can nonetheless access the legal system in the context of a contingent fee agreement or, in the case of an indigent client, through the attorney paying those costs.¹ Witness–related expenses are just one example of litigation costs that may arise and be addressed through either routine billing or contingent fee arrangements, so long as they are clearly addressed in the fee agreement between the attorney and client before such costs are incurred.
While certain litigation costs and expenses may be paid to non-expert witness, some payments may violate M.R. Prof. Conduct 3.4(b). Rule 3.4(b) states that a lawyer is prohibited from "offer[ing] an inducement to a witness that is prohibited by law." The commentary to the Rule explains:
[I]t is not improper to pay a witness’s expenses or to compensate an expert witness on terms permitted by law. The common law rule in most jurisdictions is that it is improper to pay an occurrence witness any fee (except for expenses and reimbursement for lost wages) for testifying and that it is improper to pay an expert witness a contingent fee. M.R. Prof. Conduct 3.4(b) cmt. 3.
Any payment made by an attorney to a non-expert witness must be for the limited purpose of reimbursing the witness for their time and expenses and must be reasonable.
The American Bar Association Committee on Ethics and Professional Responsibility has addressed the issue of payments to non–expert witnesses and specifically the extent that Model Rule 3.4(b), which is identical to Maine’s Rule 3.4(b), imposes any limitations on such payments. Formal Opinion 96–402, Propriety of Payments to Occurrence Witnesses, begins:
ABA Comm. on Ethics and Professional Responsibility, Formal Op. 96–402 at 1 (Aug. 2, 1996). The purpose of the payment, to reimburse the witness, is critical. As Opinion 96–402 further explains:
As long as it is made clear to the witness that the payment is not being made for the substance or efficacy of the witnesss testimony, and is being made solely for the purpose of compensating the witness for the time the witness has lost in order to give testimony in
¹At the same time, as the comments to the rule make clear, "[l]awyers may not subsidize lawsuits or administrative proceedings brought on behalf of their clients, including making or guaranteeing loans to their clients for living expenses. " M.R. Prof. Conduct 1.8 cmt. 10.
litigation in which the witness is not a party, the Committee is of the view that such payments do not violate the Model Rules. ² Id. at 2.
The Opinion emphasizes, however, that any such reimbursement payments made must be reasonable. It also notes:
What is a reasonable amount is relatively easy to determine in situations where the witness can demonstrate to the lawyer that [they have\ sustained a direct loss of income because of [their] time away from work––as, for example, loss of hourly wages or professional fees. In situations, however, where the witness has not sustained any direct loss of income in connection with giving, or preparing to give, testimony––as, for example, where the witness is retired or unemployed––the lawyer must determine the reasonable value of the witness’s time based on all relevant circumstances. ABA Comm. on Ethics and Professional Responsibility, Formal Op. 96–402 at 3 (Aug. 2, 1996).
The Commission agrees. In short, payments to non–expert witnesses, if any, should be objectively reasonable and should reflect the witness’s time spent testifying, preparing to testify, or otherwise helping prepare the case, and can include reimbursement of expenses related to those activities.³ Reasonable payments by an attorney to a non-expert witness can include compensation for (1) actual expenses incurred, (2) actual wages lost, and/or (3) the value of time spent by the witness.4
²Reasonable compensation to a non-expert witness can include reimbursement of travel expenses.
³Such payments will typically be disclosed during discovery and lawyers cannot direct a non-expert witness to withhold such information. See M.R. Prof. Conduct 3.4(f) ("A lawyer shall not . . . request a person other than a client to refrain from voluntarily giving relevant information to another party . . . . " ).
4Any dispute regarding whether and how much compensation must be paid to a non–expert witness would be addressed by the court hearing the underlying lawsuit.
Enduring Ethics Opinion
Opinion #225. Non-Disclosure Clauses in Settlement Agreements
Issued by the Professional Ethics Commission
Date Issued: July 5, 2022
Primary Questions
May a settlement agreement require a lawyer to keep all information obtained during the legal representation confidential?
Under what circumstances may a lawyer use information of a former client that is either confidential, generally known, or publicly available?
Short Answers
A settlement agreement may require that the terms of the settlement and other non-public information be kept confidential, but it may not require that "publicly available" information be confidential.
A settlement agreement may not restrict a lawyer's right to practice by limiting their use of publicly available information. A settlement agreement may not restrict a lawyer or law firm from representing clients in lawsuits against the same party, using publicly available information to solicit new clients, or using publicly available information to promote an expertise based on the settling of a particular lawsuit.
However, even when a settlement agreement may not restrict a lawyers use of information, the lawyer must consider whether their duty of client confidentiality imposes independent restrictions. A lawyer may not, without their clients consent, use a former clients confidential information, except where it is generally known. Information that is generally known is a narrower concept than information that is publicly available. Information that is available in court records, the subject of court hearings, or available in public repositories is not, standing alone, information that is generally known.
Guidance Summary
The primary question concerning restrictive covenants in settlement agreements implicates the Rules of Professional Conduct on several levels. While restrictive covenants that preclude a lawyer from using publicly available information are not permitted, a lawyer must take care that any disclosure of publicly available information concerning the lawsuit does not run afoul of their obligations of confidentiality to their client.
Applicable Rules
M.R. Prof. Conduct Rules 1.6, 1.9(c), 5.6(b).
Restrictive Settlement Agreements
A lawyer cannot make settlement offers or accept settlement agreements which restrict any lawyers right to practice by limiting the publics access to legal services or a lawyers right to advertise their services under Maine Rules of Professional Conduct 5.6(b):
5.6 Restrictions on the Right to Practice
A lawyer shall not participate in offering or making:
(b) an agreement in which a restriction on the lawyers right to practice is part of the settlement of a client controversy.
Parties to disputes often have an interest in keeping settlement agreements and information related to disputes confidential to protect their reputation, safeguard trade secrets, and to insulate themselves from further claims. Parties would sometimes like to accomplish this protection by including confidentiality provisions in settlement agreements that broadly bind all parties and lawyers involved in the matter. However, confidentiality agreements can also infringe on lawyers rights to practice. Under Rule 5.6(b), lawyers cannot offer or agree to confidentiality provisions that restrict any lawyers right to practice. Settlement agreements which require publicly available information to be kept confidential by lawyers unduly restrict the lawyers right to practice because they place more stringent restrictions on the lawyer than the duties of confidentiality the lawyer owes their client. Settlement agreements may provide that the terms of the settlement and other non-public information be kept confidential. By agreeing to the settlement terms, the client is giving instructions to the lawyer about which non-public information to keep confidential and it does not infringe on the lawyers ability to use information that is generally known. (See, e.g., ABA Formal Op. 00-417 (2000) (ABA Op. 417); Colo. Ethics Op. 92 (1993); and New Mexico Advis. Op. 1985-5 (1985)).
Requiring a lawyer to keep publicly available information confidential would restrict an attorneys ability to use public information from one case to the benefit of future clients. See ABA Op. 417 interpreting ABA Model Rule 5.6(b) which is the equivalent of M. R. Prof. Conduct 5.6(b). [S]uch a provision would necessarily limit an attorneys ability to develop or to discuss legal strategy and prior disputes with future clients, and therefore would require the attorney to either refuse to undertake particular representation, or to undertake such cases with only a limited ability to communicate with the client. Maryland Ethics Docket No. 2016-07 (2016) (construing MD provision identical to current M.R. Prof Conduct 5.6 (b)). Rule 5.6(b) preserves the publics access to lawyers who might be the best available talent for future representation of clients with similar cases.
The right to practice under Rule 5.6(b) is not limited to the ability to accept future cases. For example, settlement agreements that compel counsel to not disclose publicly available information in promotional materials or on law firm websites, such as the name of the opponent, the allegations set forth in the complaint, or the fact that the case has been settled also restrict a lawyers right to practice by limiting the publics access to information about a lawyers experience and knowledge. See District of Columbia Bar Op. 335 (2006) (DC Op. 335) (construing the DC provision nearly identical to the current M. R. Prof Conduct 5.6).
It is important to note that Rule 1.2(a) generally requires a lawyer to abide by their clients decision to settle. However, Rule 1.2(a) does not require a lawyer to follow the clients instructions where the settlement agreement would violate the lawyers other ethical duties including the duty to not agree to or propose settlement agreements that restrict any lawyers right to practice.
Restrictive covenants in settlement agreements that attempt to restrict lawyers right to practice through confidentiality provisions can be constructed in many different forms, both direct and indirect. Examples of the types of confidentiality provisions that can restrict a lawyers right to practice can be found in opinions concerning the ethical propriety of restrictive covenants by other state ethics boards. While the facts in these examples have not been presented to the Commission, lawyers should be cautious when considering similar provisions and carefully analyze whether such provisions are placing restrictions on a lawyers right to practice.
Prohibiting a lawyer from either proposing or entering into a settlement agreement containing a provision which bars the lawyer for the settling plaintiff from representing other claimants against the opposing party: No. Carolina RPC 179 (1994) (construing NC R. 2.7 (b) which prohibited a lawyer from entering into an agreement which restricts her right to practice law);
Requiring disclosure of all clients with similar claims: Ohio Prof. Cond. Op. 2019-04;
Requiring counsels entire file to be turned over to defense counsel and sealed: New Mexico Advis. Op. 1985-5 (1985);
Barring a lawyer for a settling client from subpoenaing certain records, deposing certain witnesses, or using certain experts: Colo. Formal Op. 92 (1993) (construing Colorado provision nearly identical to current ME R. 5.6);
Prohibiting a lawyer from identifying the defendant corporation as part of the lawyers business efforts after significant litigation and settlement prior to trial: So. Carolina Advis. OP 10-04 (2010) (construing SC R. 5.6(b) identical to current ME R. 5.6 (b));
Interplay with the Duties of Confidentiality Owed to Clients
A lawyers use of publicly available information is not without restriction. The purpose of a confidentiality agreement in a settlement agreement is to provide the opposing party an enforcement device for confidentiality. However, a client does not need the mechanism of a confidentiality provision to enforce confidentiality with regard to their attorney. While a lawyer is prohibited from offering or agreeing to a settlement agreement that restricts their right to practice under Rule 5.6(b) even where the client would like to offer or agree, a lawyer is still bound to follow the clients decisions around information that is not generally known because of the lawyers duties under Rule 1.6 and Rule 1.9.
Rule 1.6 requires a lawyer to keep confidences and secrets of a client confidential. Rule 1.6(d) specifies that confidences are information protected by the attorney-client privilege and secrets are information that has a reasonable prospect of causing harm to the client if revealed. Once a case is over, Rule 1.9(c) requires lawyers to continue to keep confidences and secrets confidential except to the extent that information has become generally known or the lawyer obtains the clients consent.
Information that is generally known is not synonymous with information that is publicly available. In ABA Formal Op. 479 (2017) (ABA Op. 479), the definition of generally known includes information that is widely recognized by members of the public in the relevant geographic area or it is widely recognized in the former clients industry, profession or trade. Information may become generally known through print and electronic media, including websites and social media. Within an industry, profession, or trade, information can become generally known if it is announced, discussed, or identified in print or online sources. ABA Op. 479 makes clear the fact that the information may have been discussed in open court or may be available in court records or in public libraries, or in other public repositories does not, standing alone mean that the information is generally known for Model Rule 1.9 (c) (1) purposes. Id.
Courts considering the issue of the scope of generally known information versus publicly available information have acknowledged the narrow nature of the generally known exception. See, e.g., Turner v Commonwealth, 726 S.E.2d 325, 333 (Va. 2012) (concurring op.) (There is a significant difference between something being a public record and it also being generally known.); In re Marzen, 779 N.W. 2d757 (Iowa 2010) (disclosure of former clients lawsuit against a probation officer for sexual misconduct, notwithstanding the allegations could be accessed in court records); Pallon v. Roggio, 2006 US Dist. LEXIS 59881 *24 (D.N.J. August 23, 2006) (internet availability of the pleadings does not make the information generally known); Sealed Party, 2006 US Dist. LEXIS 28392, at *62 (the fact that information is in the public record does not necessarily make the information 'generally known); Akron Bar Assn v. Holder, 810 N.E.2d 426, 435 (Ohio 2004) (an attorney is not free to disclose embarrassing or harmful features of a clients life just because they are documented in public records); In re Bryant, 61 P. 3d 641 (Kan. 2003) (information previously disclosed in court records retains confidentiality); In re Anonymous, 654 N.E.2d 1128, 1129-30 (Ind. 1995) (Rule 1.6 violated by disclosing information relating to client even though information was readily available from public sources and not confidential in nature).
While lawyers may not offer or agree to settlement agreements which restrict a lawyers right to practice by requiring a lawyer to keep publicly available information confidential, lawyers must remember that their duty to their client may be greater than their duty under a settlement agreement. If information that falls under the definition of confidence or secret in Rule 1.6 is publicly available and cannot be required to be kept confidential under a settlement agreement, the lawyer must seek the clients consent before disclosing the information in any form including in advertising, promotions, or representing other clients if the information is not generally known. For the above reasons, lawyers are prohibited from offering or accepting broad confidentiality provisions in settlement agreements unless the provision excludes public information and does not expand beyond a lawyers duties under 1.6 and 1.9 to keep information confidential.
Enduring Ethics Opinion
Opinion #226. Formal Opinion on Payment Systems
Issued by the Professional Ethics Commission
Date Issued: February 1, 2024
Primary Questions
May Maine attorneys accept payments through online payment apps, such as Venmo, PayPal, Zelle, LawPay, LawCharge, or Headnote, and what are the ethical issues surrounding the acceptance of payment through these apps?
Short Answers
Maine lawyers can accept payments (typically for legal fees, retainers, or expenses) through such third-party payment apps as long as the payment app and processes used by the lawyer or the lawyer's firm do not comingle client funds with their own, and unearned fees are placed only into client trust accounts. Some apps have safeguards for ethics rules built-in, and some do not. Lawyers are strongly encouraged to select only apps that are specially designed for the legal industry and for ethical rules compliance. Lawyers are responsible for compliance with the Rules and cannot delegate their responsibility. The apps should be secure, app updates should be downloaded, and lawyers are strongly encouraged to stay updated on how the apps work.
Applicable Rules
Rule 1.1 Competence Rule 1.3 Diligence Rule 1.4 Communication Rule 1.6 Confidentiality Rule 1.15 Safekeeping property, client trust accounts, interest on trust accounts Rule 5.3 Responsibilities regarding nonlawyer assistants
Discussion
Technological advances in payment methods constantly change. Practitioners want to "meet their clients where they are at" in payments, as well as communication, document sharing and a list of other considerations in modern practice. To help mitigate risks to client property and avoid ethical rule violations, this opinion offers guidance to lawyers for using online payment apps.
Web-based electronic payment platform application systems, or apps, offer attractive advantages: speed, simplicity, payment from any physical location or payment source, reduced cost, smaller carbon footprints, easier administration, and convenience. Disadvantages include technical glitches, cyber security breaches, risk of fraud, risk of disputed transactions, service fees, and dependence on connectivity.
Payment apps are increasingly popular among clients and lawyers. Many clients strongly prefer them over traditional or legacy payment systems. Some payment apps are specifically designed for lawyers, like: Clio Payments; Headnote, LawPay, and LexCharge; others are not, such as: PayPal, Venmo, and Zelle. Each payment app creates risk regarding an attorneys duty to protect client funds and protect confidential client information.
Prohibition on Commingling of Funds and Requirement of Safekeeping Client Property
Rule 1.15(a) prohibits commingling of a lawyers property with property of a client or a third party. M.R. Prof. Conduct 1.15(a). Rule 1.15(b) generally requires lawyers to deposit into a client trust account advance payments (typically fees, retainers and expenses) that have been paid in advance, to be withdrawn only as the fees are earned or the expenses incurred. M.R. Prof. Conduct 1.15(b). Rule 1.15(b) allows lawyers to accept advances or retainers via methods that place the funds temporarily in a non-trust account, to accommodate payment by the clients chosen method, such as a credit card, as long as the funds are promptly transferred, and no later than two business days following receipt, into a client trust account. M.R. Prof. Conduct 1.15(b). Venmo and PayPal hold funds in a digital wallet until they are transferred to a bank account. Because they are not bank accounts, these apps, alone, do not qualify as the type of accounts contemplated by Rule 1.15(a).
To prevent commingling, there must be separate accounts: one for the lawyers operating account and a separate one for the lawyers trust account, and, therefore, lawyers should avoid payment apps that comingle funds. If a payment app does not allow a lawyer to accept electronic payments into two separate accounts, receipt of funds in this manner may not comply with Rule 1.15, especially if the funds are not transferred into the lawyers client trust account within two business days after receipt. M.R. Prof. Conduct 1.15 (b).
A lawyer should understand that payment apps operate in different ways. Some, like Venmo and PayPal, hold funds in a digital wallet until they are transferred to a bank account. Because they are not bank accounts, they do not seem to qualify as the type of account contemplated by the trust accounting rules set forth in M.R. Prof. Conduct 1.15.
On the other hand, payment apps that are specifically designed for lawyers, like LawPay, LexCharge and Headnote, allow attorneys to accept online payments into both an operating and trust account, and in this way comply with M.R. Prof. Conduct 1.15(b). These apps provide an easy-to-use format to facilitate efficient credit card processing and ensure compliance with industry security standards.1 App technology will undoubtedly evolve and lawyers using this technology are required to ensure that new products allow for compliance with the Rules of Professional Conduct.
Additionally, a lawyer must be aware of how apps handle disputes regarding payments made through the app. Some apps will, upon the filing of a dispute, automatically withdraw the entire payment and place it on hold while the dispute is pending. This withdrawal could adversely impact other client funds in the trust account, if the payment is made directly to that account, or cause an overdraft, especially if a portion of the disputed payment has already been withdrawn as earned fees. A lawyer should use caution in accepting payment of legal fees through an app that is not designed specifically for compliance with the professional rules. Fees and chargebacks should be paid by the lawyer unless the lawyer and client agree otherwise.
Competent and Diligent Representation, and pertinent Substantive Law
A lawyer must provide competent representation, which requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation. M.R. Prof. Conduct 1.1. Lawyers are also required to act with reasonable diligence and promptness in representing a client. M.R. Prof. Conduct 1.3. Lawyers using payment apps should inquire about cybersecurity protocols, such as two-factor authentication2 of transactions in order to secure client funds, and consider working with a cyber security consultant. To the extent relevant to the representation, lawyers should also be aware of substantive law applicable to the use of payment apps.
Confidentiality and Communication
A lawyer is generally required to keep confidential confidences and secrets of a client. M.R. Prof. Conduct 1.6. Privacy risks come with payment apps. A lawyer must take reasonable measures to protect client financial information. For example, transactions published in a notification feed of each user would breach client confidentiality. To comply with ethics rules, privacy settings should be set to restrict who may see particular transactions. Lawyers are also required to inform clients regarding matters that require their informed consent, to reasonably consult with clients about the means by which the clients objectives are to be accomplished, promptly comply with reasonable requests for information and explain matters to the extent reasonably necessary to permit the client to make informed decisions regarding the representation. M.R. Prof. Conduct 1.4. A lawyers use of a payment app, along with its risks and benefits, should be explained to the client so that the client can agree to undertake these risks. Similarly, clients should be advised to choose settings to prevent unintended disclosure. Payment apps specifically designed for lawyers should make clear how the lawyer can maintain confidentiality and comply with the confidentiality rules.
Record retention
A lawyer is generally required to retain and safeguard client information and data in the lawyers possession for a minimum of eight (8) years. M.R. Prof. Conduct 1.15(f).4 A lawyer may enter into a voluntary written agreement with a client for a different period. Id. Use of a payment app should allow the lawyer to maintain enough data to satisfy Rule 1.15(f). App data may be retrievable, exported and stored in a cloud-based format, digitally on a device, or copied. Since the duty to safeguard client records remains with the lawyer, the lawyer must be able to retrieve all stored records.
Responsibilities Regarding Nonlawyer Assistants
Lawyers are generally required to make reasonable efforts to ensure that the conduct of a nonlawyer assistant employed or retained by the lawyer is compatible with the professional obligations of the lawyer. M.R. Prof. Conduct. 5.3. If a lawyer uses a payment app the lawyer should comply with these responsibilities regarding the employees of the payment app and the lawyer or the lawyers firm.
Conclusion
Payment apps can be used as long as client funds are not commingled with lawyers funds, and as long as unearned fees are promptly transferred into client trust accounts. Lawyers are encouraged to download payment app updates regularly, and are strongly advised to stay updated on how the apps work. Lawyers are also advised to select only apps that are secure and specially designed for ethical rules compliance. Lawyers retain the obligation to comply with the ethical rules and cannot delegate ultimate responsibility for ethical rules compliance.
