Recent formal ethics opinions from the ABA
By George A. Riemer
As Oregon’s new Rules of Professional Conduct are based, in large part, on the ABA’s Model Rules of Professional Conduct, Oregon practitioners should be tracking the issuance of formal ethics opinions by the ABA’s Standing Committee on Ethics and Professional Responsibility. These opinions provide useful guidance regarding the ABA model rules. To the extent the corresponding Oregon rule is the same, the opinions should prove particularly helpful to Oregon lawyers. While advisory only, the ABA’s formal ethics opinions are well researched and written. Following their advice should keep you on the right track. The following is a brief summary of the last 10 ABA formal ethics opinions. By becoming a member of the ABA Center for Professional Responsibility, you can access the full text of recent ABA formal ethics opinions via the Internet.
1. Formal Opinion
05-436:
Informed Consent to Future Conflicts of Interest
This new opinion supersedes and withdraws Formal
Opinion 93-372. It indicates that while some conflicts
are nonconsentable, informed consent can be given in
many circumstances to both current and future conflicts.
The opinion notes that informed consent must be confirmed
in writing. It also notes that a client’s informed
consent to a future conflict, without more, does not
constitute the client’s informed consent to the disclosure
or use of the client’s confidential information against
the client. Lawyers must also determine if any other
rule prevents the contemplated representation, even
if the client had previously given informed consent
to a future conflict. "The lawyer also must determine
whether informed consent is required from the client
that is to be represented in that later matter."
2. Formal Opinion
05-435:
Ethical Obligations of a Lawyer Who Represents a Liability Insurer Named in
Litigation Who Simultaneously Represents a Client Against an Insured of the
Liability Insurer
This opinion notes that "Simultaneous representation
in unrelated matters of clients whose interests are
only economically adverse does not ordinarily constitute
a conflict of interest requiring the consent of the
respective clients." This would be the likely
situation if the insurer was not a named defendant
in litigation brought on behalf of the other client.
On the other hand, "even absent direct adversity,
a concurrent conflict may arise if ‘there is a significant
risk that the representation of one or more clients
will be materially limited by the lawyer’s responsibility
to another client. Determinations of material limitation
are fact specific.’" (footnotes omitted). The
opinion describes circumstances where material limitations
could arise. The opinion goes on to provide that "(i)f
the lawyer concludes that there is a concurrent conflict
of interest, withdrawal from one or both of the lawsuits
may be necessary unless two conditions are satisfied.
Notwithstanding a concurrent conflict of interest,
a lawyer may proceed with the representation if the
lawyer reasonably believes that the lawyer will be
able to provide competent and diligent representation
to each affected client, and each affected client gives
informed consent." (footnote omitted) The informed
consent must be confirmed in writing.
3. Formal Opinion
05-434:
Lawyer Retained by Testator to Disinherit Beneficiary that Lawyer Represents
on Unrelated Matter
This opinion contains a straightforward summary,
which provides as follows: "In summary, ordinarily
there is no conflict of interest when a lawyer undertakes
an engagement by a testator to disinherit a beneficiary
whom the lawyer represents on unrelated matters. However,
this may not be the case if the testator is restricted
by a contractual or quasi-contractual legal obligation
from disinheriting the beneficiary, or if there is
a significant risk that the lawyer’s responsibilities
to the testator will be materially limited by the lawyer’s
responsibilities to the beneficiary, as may be the
case if the lawyer finds herself advising the testator
whether to proceed with the disinheritance."
4. Formal Opinion
04-433:
Obligation of a Lawyer to Report Professional Misconduct by a Lawyer Not Engaged
in the Practice of Law
Lawyers working in nonlawyer jobs may still be
subject to professional discipline for engaging in
unethical conduct. This opinion indicates that if a
lawyer "knows" that another lawyer, even
if working in a nonlawyer job, has violated a rule,
the first lawyer must report the misconduct if the
violation raises a "substantial" question
as to the second lawyer’s honesty, trustworthiness
or fitness as a lawyer in other respects. "Knows" denotes
actual knowledge of the facts in question though knowledge
may be inferred from the circumstances. "Substantial" refers
to the seriousness of the possible offense. The opinion
also notes that the duty not to reveal information
relating to the representation of a client trumps the
duty to report so that if a report would reveal such
information, the reporting lawyer must obtain the client’s
informed consent before making a report. The opinion
concludes as follows: "We interpret Rule 8.3 as
requiring a lawyer to report professional misconduct
committed at any time by a licensed but non-practicing
lawyer. Even misconduct arising from purely personal
activity must be reported if it reflects adversely
on the lawyer’s fitness to practice law. A lawyer violates
the Model Rules and is subject to professional discipline
when she fails to report such professional misconduct,
in circumstances in which Rule 8.3 requires such reports."
5. Formal Opinion
04-431:
Lawyer Arranging or Posting Bail for a Client
This opinion indicates that a lawyer should not
post bail for a client though there is not categorical
prohibition against doing so. In most situations, the
risk is too great that the lawyer’s representation
will be materially limited by the lawyer’s personal
interest in being repaid. Furthermore, obtaining the
informed consent of the client would be problematic. "In
all but the rarest of circumstances, however, the stress
and anxiety of confinement and the other pressures
and conditions affecting the incarcerated client make
it highly unlikely that the client’s acquiescence in
the conflict, even if obtained, will qualify as sufficiently
genuine and voluntary in nature so as to constitute
the sort of "informed consent" contemplated
by Rule 1.7(b)." Bottom line: While not prohibited
per se under the Model Rules, a lawyer who contemplates
posting bail for a client "must reasonably believe
that her resulting personal interest does not create
a significant risk that her representation of the client
will be materially limited. Other than in relatively
unusual circumstances, the lawyer should conclude that
taking such action would be improper."
6. Formal Opinion
03-431:
Lawyer’s Duty to Report Rule Violations by Another Lawyer Who May Suffer from
Disability or Impairment
This opinion deals with the duty of a lawyer to
report another lawyer, not in the first lawyer’s firm,
based on a concern that second lawyer may be suffering
from a mental condition that materially impairs the
lawyer’s ability to represent a client. The opinion
indicates that "Although not all violations of
the Model Rules are reportable events under Rule 8.3,
as they may not raise a substantial question about
a lawyer’s fitness to practice law, a lawyer’s failure
to withdraw from representation while suffering from
a condition materially impairing her ability to practice
law, as required by Rule 1.16(a)(2), ordinarily would
raise a substantial question requiring reporting under
Rule 8.3." (footnotes omitted). The opinion qualifies
the foregoing by indicating that "if information
relating to the representation of one’s own client
would be disclosed in the course of making the report
to the appropriate authority, that client’s informed
consent to the disclosure is required." The opinion
also points out that whether a lawyer is required to
make a report or not, he or she can report the conduct
in question to an approved lawyers assistance program.
Of course, such a report is not a substitute for making
a report as required by Rule 8.3.
7. Formal Opinion
03-430:
Propriety of Insurance Staff Counsel Representing the Insurance Company and
its Insureds; Permissible Names for an Association of Insurance Defense Counsel
This opinion is likely of most interest to lawyers
who serve as in-house claims attorneys for insurance
companies. "We do not view the employment status
of insurance staff counsel as itself creating a conflict
between the insurance company and the insured when
they are both represented by insurance staff counsel
in a lawsuit. In fact, the Model Rules dealing with
conflicts of interest between co-clients specifically
contemplates lawyers representing multiple clients.
Of course, if a conflict of interest between the insurance
company and the insured does arise in the course of
the representation, the lawyer immediately must resolve
it by either obtaining the insured’s informed consent
or terminating his representation of the insured." (footnotes
omitted). The opinion notes that in any such permitted
representation, the lawyer must also comply with Rule
5.4(c) which requires a lawyer to exercise independent
professional judgment in advising or otherwise representing
clients, regardless of who pays for the lawyer’s services.
On the issue of the disclosure of the lawyer’s employment status, the opinion indicates ". . . we interpret Rule 1.8(f) to require insurance staff counsel to disclose their employment status and affiliation with the insurance company to all insureds-clients. Such disclosure should occur at the earliest opportunity practicable, such as during the initial meeting with the client or through appropriate language in the initial letter to the client." (footnotes omitted).
Finally, on the issue of how the insurance company staff counsel can be identified, the opinion indicates that a number of ways to do so were permissible including "John Smith and Associates," "Smith and Jones," and "Law Offices of ABC Insurance Company." The committee felt these names were permissible without further disclosure on the lawyers’ letterhead so long as the insurance staff counsel follow the requirement of promptly disclosing their employment status to their insureds-clients.
8. Formal Opinion
03-429:
Obligations with Respect to Mentally Impaired Lawyer in the Firm
The first part of this opinion deals with the duties
of partners or lawyers with comparable duties in professional
corporations, legal departments and other organizations
deemed to be a "law firm" under the rules,
and lawyers who have direct supervisory authority over
lawyers to make reasonable efforts to ensure that the
lawyers they oversee and supervise conform their conduct
to the rules. As Oregon has not adopted the language
of ABA Model Rule 5.1(a) or (b) in this regard, additional
discussion of what the opinion says on this topic will
not be provided. ABA Model Rule 1.5(c)(2) and Oregon
Rule 1.5(b) provide that a lawyer is responsible for
another lawyer’s violation of the rules if "the
lawyer is a partner or has comparable managerial authority
in the law firm in which the other lawyer practices,
or has direct supervisory authority over the other
lawyer, and knows of the conduct at a time when its
consequences can be avoided or mitigated but fails
to take reasonable remedial action." ABA Formal
Opinion 03-429 suggests that if a partner, manager
or supervisor knows that another lawyer in the firm
has an impairment that would prevent the lawyer from
providing competent representation to a client, the
partner, manager or supervisor may have an obligation
to prevent the impaired lawyer from rendering legal
services to clients of the firm.
As to the duty to report a firm member under ABA Model Rule 8.3(a), the opinion indicates that if "a lawyer’s mental impairment renders the lawyer unable to represent clients competently, diligently and otherwise as required by the Model Rule and he nevertheless continues to practice, partners in the firm or the supervising lawyer must report that violation."
Finally, the opinion indicates a firm’s duties to clients represented by the impaired lawyer may not end merely by the removal or departure of the impaired lawyer. "Under Rule 1.4(b), there may be a responsibility to discuss with the client the circumstances surrounding the change of responsibility. In discussions with the client, the lawyer must act with candor and avoid material omissions, but to the extent possible, should be conscious of the privacy rights of the impaired lawyer. . . . If the impaired lawyer resigns or is removed from the firm, clients of the firm may be faced with the decision whether to continue to use the firm or shift their relationship to the departed lawyer. Rule 1.4 requires the firm to advise existing clients of the facts surrounding the withdrawal to the extent disclosure is reasonably necessary for those clients to make an informed decision about the selection of counsel."
9. Formal Opinion
02-428:
Drafting Will on Recommendation of Potential Beneficiary Who Also is Client
The facts underlying this opinion are that lawyer’s
current client, the niece of a widower, desires to have
the lawyer prepare a will for the widower. The niece
is a potential beneficiary. The niece indicated that
she would pay any part of the lawyer’s fee that her uncle
did not pay. The question was whether it was permissible
for the lawyer to prepare the widower’s will under the
circumstances.
The opinion indicates that the lawyer would need to comply with ABA Model Rule 1.8(f) if the niece undertook to pay any part of the lawyer’s fee (client (widower) would have to give informed consent). "The lawyer may wish to reject the niece’s offer if the uncle is able to pay the fee himself. This obviates the need to obtain the uncle’s informed consent as required by Rule 1.8(f). It also eliminates one factor that possibly could, with other evidence, support a claim that the niece, with assistance of the lawyer, exercised undue influence over her uncle." (footnote omitted).
As to the concurrent conflict of interest issue, the opinion states, in part, as follows: "The lawyer currently is providing estate planning services for the niece and, therefore, also must determine whether Rule 1.7 applies. Under the circumstances described above, there is no significant risk that, in the lawyer’s concurrent representation of both the niece and her uncle in estate planning services, his representation of either will be materially limited by the representation of the other. Accordingly, Rule 1.7 does not apply to the simultaneous representation of niece and her uncle." (footnote omitted).
Finally, on the issue of confidentiality, the opinion states, in part, as follows: "In representing the uncle, the lawyer is obligated not to reveal information relating to the representation of the niece or to use such information to the niece’s disadvantage without the nieces’ informed consent. . . . The lawyer should also advise the uncle that information relating to his estate planning services will not be revealed or used to his disadvantage in the niece’s representation, except to the extent the uncle gives his informed consent." (footnote omitted).
Bottom line, and as a general proposition, "A lawyer who is recommended by a potential beneficiary to draft a will for a relative may represent the testator as long as the lawyer does not permit the person who recommends him to direct or regulate the lawyer’s professional judgment pursuant to Rule 5.4(c)."
10. Formal Opinion
02-427:
Contractual Security Interest Obtained by a Lawyer to Secure Payment of a Fee
This opinion explains the intended application
of ABA Model Rules 1.8(a) and 1.8(i). Subsection (a)
provides that a lawyer is not to enter into a business
transaction with a client or knowingly acquire an ownership,
possessory, security or other pecuniary interest adverse
to a client unless specified requirements are met.
Subsection (i) allows a lawyer to acquire a lien authorized
by law to secure the payment of the lawyer’s fees or
expenses, notwithstanding the general prohibition against
a lawyer acquiring a proprietary interest in the cause
of action or subject matter of litigation the lawyer
is conducting for a client. The opinion indicates that "Rule
1.8(a) should not be regarded as a rule that is inconsistent
with Rule 1.8(i) and we conclude that it does not apply
to the acquisition by contract of a security interest
in the subject of litigation for fees." (footnote
omitted).
The opinion concludes as follows: "A lawyer may acquire a security interest in (a) client’s property to secure a fee. A security interest may secure a fee meeting the requirements of Rule 1.5. Acquisition of such a security interest must meet the requirements of Rule 1.8(a) or Rule 1.8(i). Under the Model Rules, a security interest may be acquired in the subject matter of the representation, including litigation, before, during or following the representation."
• • • • •
As can be seen, these opinions cover a wide range of issues. They are very helpful in applying the ABA Model Rules. Caution is in order, however, to make sure you compare the text of Oregon’s rule to the corresponding ABA Model Rule to be sure any differences are not overlooked.
© 2005 George A. Riemer
ABOUT THE AUTHOR
George A. Riemer is
general counsel and deputy director of the Oregon
State Bar. He can be reached at griemer@osbar.org
or by phone at (503) 620-0222 or toll-free in Oregon,
(800) 452-8260, ext. 405.