Transcript
ABA Model Rules
Key Concepts and OverviewFor Legal Managers
Beverly MichaelisPractice Management Advisor
Professional Liability Fund
ABA Model Rules – Topics1. Conflicts of Interest/Ethical Walls2. IOLTA (IOTA)3. Rules Relating to the Attorney-Client
Relationship, Fees, Communication, and more4. Advertising and Solicitation5. Current Trends6. Sample Test Questions
Key Concepts for Legal Managers
ABA Model Rules & Legal Managers
Conflict of Interest Systems
• Conflict systems are used to determine if potential new clients have conflicts with existing clients
• Written waivers are required if a conflict exists
• People & organizations representing a potential conflict are entered in the system
• Ethical or “Chinese” Walls may be necessary
ABA Model Rules & Legal Managers
How Conflicts Arise
Other lawyers in the firm:
1. Have represented opposing parties
2. Possess inside knowledge
Disqualified lawyers should be screened
ABA Model Rules & Legal Managers
The Firm Rule
• If one member of the firm has a conflict, all members have a conflict
• Conflicts leave with the departing lawyer
• Incoming lawyers should be screened for potential conflicts
ABA Model Rules & Legal Managers
Ethical Walls
1. Obtain consent
2. Issue notice to all employees
3. Place memorandum in file
4. Visibly mark file
5. Move file away from lawyers/staff
6. Respect the wall at all times
7. Issue periodic reminders
ABA Model Rules & Legal Managers
Why are Walls Erected?
Protect client confidences
Avoid limiting a legal professional’s job mobility
Some states are more restrictive – know your state’s rules!
ABA Model Rules & Legal Managers
Assessing Conflicts
1. The firm’s risk avoidance attorney will determine if a conflict exists.
2. Not all conflicts require ethical walls
3. The risk avoidance attorney will:
– Define the conflict– Obtain client consent– Neutralize the conflict
ABA Model Rules & Legal Managers
Group and Organization Representation
Groups:
• Lawyer should explain advantages and risks
• All clients must stay fully informed
Organization:
• Duty is to organization
ABA Model Rules & Legal Managers
Avoid the Following
1. Gifts from clients
2. Book or TV deals (until case concluded)
3. Loans to clients
4. Third party payment with strings attached
5. Aggregate settlements
6. Business transactions with clients
ABA Model Rules & Legal Managers
Avoid the Following
7. Sexual relations with clients
8. Proprietary interest in case
9. Agreement in advance to limit liability without independent legal advice
10. Settling a claim with an unrepresented or former client without independent legal advice
ABA Model Rules & Legal Managers
Procedures for Legal Managers
→ Know how to set up a database
→ Have familiarity with software
→ Know how to do a conflict search
→ Know how to supervise staff
ABA Model Rules & Legal Managers
IOLTA (or IOTA) – What is It?
• Mandated by state authorities • Requires interest-bearing accounts for
client deposits that are:– Nominal in amount or– Not long in duration
• Interest is pooled and administered by state bar
ABA Model Rules & Legal ManagersIOLTA (or IOTA) – What is It?
Funds being held for a client must be placed in:
1. An account paying interest to the client or
2. An IOLTA account
ABA Model Rules & Legal ManagersIOLTA (or IOTA) – How to Do It
• Instruct bank to open a NOW or other interest-bearing checking account
• Account is opened in state where lawyer’s office is situated
• Lawyers are responsible for minimum balance & fee requirements
ABA Model Rules & Legal ManagersIOLTA (or IOTA) – How to Do It
• Many banks waive fees• Maximum amount in IOLTA depends on rules in
each jurisdiction• Bank responsible for paying interest & sending
statements to IOLTA committee and lawyer
ABA Model Rules & Legal Managers
IOLTA (or IOTA) – Dealing with Client Funds
1. Client funds must be segregated.
2. If client can net interest – set up separate account unless client directs otherwise
ABA Model Rules & Legal Managers
IOLTA (or IOTA) – Avoiding Trouble
• Know your jurisdiction’s rules• Notify client promptly
o when money is added oro when money is taken out
• Keep unearned fees or unearned costs in trust
ABA Model Rules & Legal Managers
IOLTA (or IOTA) – Avoiding Trouble
• Promptly deliver funds when entitled• Promptly render full accounting upon request• Keep disputed funds separate• Keep complete records (usually 5 years)
ABA Model Rules & Legal Managers
IOLTA (or IOTA) – Notes for Legal Managers
1. Rule 1.15 on Safekeeping provides the ethical guidelines for establishing & maintaining accounts
2. All lawyers must establish IOLTA accounts, EXCEPT:• Lawyers who do not hold client funds• Lawyers who make loan transactions through
lending banks
ABA Model Rules & Legal Managers
IOLTA (or IOTA) – Notes for Legal Managers
3. No lawyer, law firm, or client pays taxes on IOLTA interest per IRS ruling
4. Contact IOLTA Committee immediately if you receive a 1099 on an IOLTA account
5. Banks file informational reports with IRS re interest paid to IOLTA Committees
6. IOLTA Committees are non-profit (pay no tax)
ABA Model Rules & Legal Managers
IOLTA (or IOTA) – Notes for Legal Managers
• You may, but are not required, to notify clients of your participation in IOLTA
• Clients have no say re use of IOLTA funds• Remember that funds must go into an interest-
bearing account benefiting the client if the client can “net” interest
ABA Model Rules & Legal Managers
Rule 1.0 Attorney-Client Relationship
A fiduciary relationship commanding Respect
Competence
Diligence
Independent professional judgment
Preservation of confidences
ABA Model Rules & Legal Managers
Rule 1.0 Attorney-Client (Fiduciary) Relationship
Fair play
Honesty
Responsiveness
Reasonable feesMuch the same is expected of the client in return
ABA Model Rules & Legal Managers
Rule 1.3 – Diligence
DOs:1.Zealously represent2.Complete entire task3.Timely manage workload
DON’TS1.Cause client anxiety2.Lose client’s trust
Legal Managers should calendar deadlines to ensure due diligence
ABA Model Rules & Legal Managers
Rule 1.4 – Communication
• Keep the client informed• Consult with the client• How will client’s objectives be met?• What is acceptable/ethical
ABA Model Rules & Legal Managers
Rule 1.5 – Fees
1. Use written agreements
2. No contingent fees in domestic or criminal cases
3. Fee splits must be proportionate or client must consent
ABA Model Rules & Legal Managers
Rule 1.6 – Exceptions to Confidentiality
1. To carry out representation
2. Prevent reasonably certain death, harm, crime, or fraud
3. Defensively (complaint, claim, other)
ABA Model Rules & Legal Managers
Rule 1.16 – Withdrawal is Mandatory When
Representation would violate rules Lawyer is impaired (mentally or physically) Lawyer is discharged
ABA Model Rules & Legal Managers
Rule 1.16 – Voluntary Withdrawal
1. Accomplished without material adverse effect
2. Client persists with fraud/crime or uses lawyer
3. Fundamental disagreement
4. Client’s action is repugnant
5. Client fails to pay
6. Other good cause
ABA Model Rules & Legal Managers
Rule 1.16 – Voluntary Withdrawal
Withdrawal always requires:• Notice• Permission of tribunal • Protection of client’s interests
Refund fees Surrender papers and property (unless
retention is otherwise permitted)
ABA Model Rules & Legal Managers
Rule 1.17 – Sale of Law Practice
1. Lawyers may sell all or part of a practice or goodwill
2. Requires written notice to clients
3. 90 days must pass
4. Fees cannot be increased
ABA Model Rules & Legal Managers
Rule 5.3 – Non lawyers
• Must conform to rules of conduct
• Make reasonable efforts to supervise
• Lawyers responsible if:
o Conduct ordered or ratified
oLawyer is partner/manager fails to avoid, mitigate, remediate
ABA Model Rules & Legal Managers
Rule 5.7 – Rules of Conduct Apply to Other Professions
If services not distinct from legal workClient not informed there is no attorney-client relationship (reasonable efforts standard)
Lawyers must always comply with the rules of the other profession
ABA Model Rules & Legal Managers
Rule 6.1 – Pro Bono
1. Every lawyer has a duty to provide pro bono services
2. Aspirational goal is financial contribution and 50 hours per year
ABA Model Rules & Legal Managers
Rule 6.3 – Legal Services Membership
Lawyers can serve as directors, officers or members of legal organizations even if persons served by the
organization are adverse to the lawyer’s firm
Key Concept for Legal Managers:This is not a conflict of interest
ABA Model Rules & Legal Managers
Rule 7.6 – Political Contributions
Lawyers cannot accept judicial appointments or government jobs in exchange for
making or soliciting political contributions
ABA Model Rules & Legal Managers
Advertising and Solicitation
Lawyers cannot pay others for channeling professional work to the lawyer
Prepaid legal services OK Non-profit referral organizations OK Attorney referral organizations OK
Legal Managers must be able to evaluate these types of intermediary organizations
ABA Model Rules & Legal Managers
Direct Solicitation Prohibited
1. There is no relationship with soliciting lawyer
2. When client rejects contact
3. Solicitation involves duress or harassment
Other Material in this Section
Current Trends
Review material for current trends1. Fee alternatives (flat/fixed fees, task-based
billing, bonus system)
2. Technological changes (billing, legal research, software, e-mail, Web sites, extranets, intranets, printing to PDF, and video conferencing)
Technology can save clients money and keep them better informed
Sample Test QuestionsSharing Space & Common Expenses
• Sally Smith and Reba Rodman share office space
• Can they advertise as Smith & Rodman?
No! They must first establish a firm.
Sample Test QuestionsWeb Sites, Extranets, and Intranets
1.Web sites are public and used for advertising
2.Extranets are secure, private sites accessible only to clients or co-counsel. They are NOT used for:• E-mailing clients• Listing staff and lawyers• Providing documents to the public
3.Intranets are for internal use only by law firm personnel
Sample Test QuestionsTrust Accounts
The following are FALSE:• Attorneys need not notify clients every time a deposit is
made or funds withdrawn• IOLTA interest is taxable to the attorney• IOLTA interest is taxable to the client
The following is TRUE:• Attorneys need not notify clients that their funds will be
enrolled in IOLTA
Sample Test QuestionsConflicts
If a conflict is noted during a conflict search, an attorney shall:
1. File a claim against the perpetrator
2. Work with another attorney to minimize the conflict
3. Alert the client and erect an ethical wall
4. Submit the case to a hearing of peers
Sample Test QuestionsAdvertising
May criminal attorney Susie advertise on her Web site that she has successfully defended 90% of her cases?
• Yes – if it’s true and accurate• Yes – if she lists her name, address, and phone• No – even if the % was true, it violates the rules• No – we don’t know what “successfully
defended” means
Sample Test QuestionsAdvertising
May criminal attorney Susie advertise she is a certified criminal law specialist?
• Yes – if she has been certified by an organization approved in her state or accredited by the ABA
• Yes – if the name of the certifying organization is clearly identified
• No – lawyers cannot communicate specialties
Sample Test QuestionsLetterhead & Advertising
The following are permitted:• Trade names (Bayside Immigration Clinic)• Deceased founder• Multi-state listings if jurisdictions designated
What is not permitted:• Listing a current state Congressman in public office
who is not active with the firm
Sample Test QuestionsUnauthorized Practice of Law
Joe Justice, criminal lawyer, is in Florida. His office is one hour from Georgia. His former paralegal, Inez, who has a law degree, now has an Immigration Clinic in Georgia. She fills out forms for immigrants. Inez wants Joe to review the forms before they are filed.
May Joe assist Inez?
Sample Test QuestionsUnauthorized Practice of Law
1. Yes, as her former boss, if he is aware of her work product and can assist with quality control and legal advice.
2. Yes, if he is licensed in Georgia and Inez is licensed to practice law.
3. No, if he is not licensed in Georgia.4. No, if he is assisting Inez in UPL.
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