by Jennifer Bagosy
Perhaps you were tired of the bureaucracy of a large firm. Perhaps you wished to develop your own business, with your own contacts—contacts that did not happen to include Fortune 500 executives. Or perhaps your firm downsized and you found yourself in a new and unexpected situation. Regardless of the method by which you arrived, you found yourself at a very busy general litigation firm with several lawyers instead of several hundred.
“[T]he standards governing an attorney’s ethical duties do not vary according to the many areas of practice. Nor do they vary according to whether an attorney practices alone or in a partnership, small law firm, large law firm, or corporate law department.” In the Matter of Valinoti, No. 96-O-08095, 2002 WL 31907316, at *3 (Cal. Bar Rev. Dept. Dec. 31, 2002) (citing Truck Ins. Exchange v. Fireman’s Fund Ins. Co., 6 Cal. App. 4th 1050, 1059-60 (1992)). However, attorneys moving from large-firm to small-firm practice may discover that ethical issues now arise in unfamiliar circumstances. For example, the attorney may face new challenges implicating the attorney’s duty of competence, duty of loyalty, and duties of honesty and candor.
Duty of Competence—Unfamiliar Practice Areas and Caseload Management California Rule of Professional Conduct (“Rule”) 3-110(A) provides that “[a] member shall not intentionally, recklessly, or repeatedly fail to perform legal services with competence.” If a client presents a case that involves an area of law with which the attorney is unfamiliar, she may comply with her duty of competence “by (1) associating with or, where appropriate, professionally consulting another lawyer reasonably believed to be competent, or (2) by acquiring sufficient learning and skill before performance is required.” Rule 3-110(C).
If a lawyer in a multinational, full-service firm is presented with a problem from a client that is outside her specialty area, gaining the necessary competence to represent her client on short notice may be as simple as making a phone call to another lawyer within the firm. However, the small-firm lawyer has fewer resources from which to draw, which means that the attorney may need to tell a prospective client “no” if he cannot familiarize himself with the area of law in time to provide the necessary services. This decision requires a greater level of self-knowledge for the small-firm attorney compared with his large-firm counterpart, who has a network of firm partners, and potentially even in-house ethics counsel, to consult for advice. “Attorneys are notoriously poor judges of their own limitations and often tend to take on more than they can handle . . . . Therefore, be extremely careful about deciding to learn a new field of law in order to competently handle a case . . . .” Vapnek, et al., Cal. Practice Guide: Professional Responsibility § 6:78 (2015).
Along the same lines, another trap in which a small-firm lawyer or solo practitioner may fall is to take on more clients than the firm can serve, even if those clients’ cases fall within the lawyers’ areas of specialty. In the Matter of Collins, No. 87-0-13132, 1992 WL 14102 (Cal. Bar. Ct. Jan. 22, 1992) provides one cautionary tale. The Bar recommended that attorney Collins be disbarred for a six-year pattern of misconduct in fourteen separate cases. The mitigating evidence he submitted, which failed to sway the Bar, was that he was overwhelmed.
Collectively, that evidence showed that the respondent (Collins) had served as a police officer and deputy sheriff for seventeen years before becoming a lawyer. After admission to the practice of law, he went right into solo practice. Fearing not having enough work, he took on an ever-increasing number of cases until, at one point, he had 180 active cases. He also had a problem with being unable to turn down clients or client requests. Many of the respondent’s cases required significant court appearance time, thus taking him away even more from the office and communication with his many clients. Collins never had a business background and, in late 1988, he began to realize he had office management problems. At that time, he began to reduce his caseload. By the time of trial, he had reduced his caseload to forty matters and had improved his ability to return client phone calls. Yet, he reported that he still had a heavy court appearance calendar. Starting in July 1990, the respondent consulted a psychologist to help him better understand his situation. That psychologist reported noting no evidence of any personality disorder but that respondent did appear to be a “super-responsible” type who took on more than he could handle, given the limitations of his staff. Id. at *9-10.
Taking on too many clients, as Collins did, may also make it difficult, if not impossible, for an attorney to comply with her duty of communication under Rule 3-500. An attorney has a duty to “respond promptly to reasonable status inquiries of clients and to keep clients reasonably informed of significant developments in matters with regard to which the attorney has agreed to provide legal services.” Cal. Bus. & Prof. Code § 6068(m). A failure to return client phone calls promptly may violate Rule 3-500 and Section 6068(m).
Duty of Loyalty—Conflicts of Interest With Third Party Payors When an attorney moves from a firm that represents corporations to a firm that represents primarily individuals, the potential conflicts of interest may shift from conflicts among corporate officers to conflicts among family members. Again, the factual situations will be different, but the rules and principles of legal ethics are the same. For instance, Rule 3-310(F) prohibits accepting a fee for legal services from a person other than the client without the client’s informed written consent. As the court explained in Sharp v. Next Entertainment:
Additionally, the Rules of Professional Conduct recognize that there may be a conflict of interest where, such as in the matters before us, a third party is paying for the attorney to represent another person or entity. “[W]hen a third party pays for a lawyer’s service to a client . . . there is [a] danger that the lawyer will tailor his [or her] representation to please the payor rather than the client. The distraction can become more pronounced if the lawyer hopes to be rehired by the same payor on a recurrent basis.”
As such, just as you would inform your former corporate client regarding its insurer’s advancement of defense costs, if a client seeking advice on evicting a tenant from an investment property arrives with his mother who intends to pay your fees, you must disclose the potential conflict to both of them, explain that your duty of loyalty runs only to the client in the event of a conflict, and obtain written consent to the arrangement. This rule applies equally to a situation in which your prospective client is in prison and relatives approach you to represent him. See In the Matter of Elstead, No. 08-O-11040, 2012 WL 5406777 (Cal. Bar Ct. July 17, 2012). In that case, the Bar found the attorney culpable of violating Rule 3-310(F) when he researched an imprisoned client’s appellate claims, filed a notice of appeal, and met with the client in prison, but did not obtain the client’s informed written consent to the $15,000 payment from the client’s wife and sister. Id. at *8.
Moreover, Rule 3-310(F)(2) requires that an attorney accepting payment from a third party maintain the confidentiality of information relating to the client’s representation as required by California Business and Professions Code section 6068(e). This means that, in the example above, your landlord client’s mother could not demand that you share with her information the client told you in confidence. If she asks if her son fixed the defective wiring on the property, and he admitted to you that he did not, you may not share that information with her. These types of boundaries ought to be disclosed to both the client and the payor from the outset in order to ensure that consent is fully informed.
Further, the bills themselves may contain confidential information about the representation, depending upon their level of detail. California Business and Professions Code section 6149 states that “[a] written fee contract shall be deemed to be a confidential communication within the meaning of [section 6068(e) of the Business and Professions Code and Evidence Code section 952].” It is the attorney’s duty to ensure that the bills sent to the payor protect client confidential information.
Duties of Honesty and Candor—Special Appearances and Limited Assistance to Pro Se Clients Sometimes, an attorney may be asked to make “special appearances” for a client with an upcoming court date, either where the client is in pro se or represented by another lawyer who is unable to appear. Streit v Covington & Crowe, 82 Cal. App. 4th 441 (2000). While, “technically, ‘special appearance’ means an appearance for the limited purpose of challenging an assertion of personal jurisdiction over a party,” the more common usage of the term refers to an appearance by an attorney at a hearing who is not counsel of record. Id. at 445 n.1 (internal citations omitted). However, one “special appearance” by an attorney still creates an attorney-client relationship, even though the attorney’s representation may be limited to a single hearing, and even if the attorney is not paid. Id. at 446.
Therefore, while the representation may be limited, an attorney approached by a client who would like “someone to stand with her” at a hearing the next day must still adhere to the professional duties of competence and loyalty, and must protect the client’s confidences. Afterward, the attorney should discuss with the client whether or not the attorney-client relationship will continue beyond the hearing. In either case, the attorney should memorialize either the continued representation or the termination of representation in writing for the client.
Clients may also request that an attorney help them prepare pleadings or other case documents without entering an appearance at all. According to the Orange County Bar Association’s Formal Opinion No. 2014-1:
The practice of an attorney writing documents filed with the court without disclosure to the court or opposing counsel of the attorney’s involvement (colloquially referred to as “ghostwriting”) is expressly authorized in the context of a lawyer providing unbundled legal services (also known as limited scope representation) to a pro se litigant.
To conclude, while an attorney’s ethical obligations remain the same regardless of the size or type of her practice, the issues an attorney confronts may be very different after moving from a multinational corporate litigation practice to a small firm. Therefore, it is important for the attorney to have a solid general knowledge of her ethical duties under the Rules and under California law so that she may effectively spot and address issues as they arise.
Jennifer Bagosy is an attorney with the firm of Hackler Flynn & Associates specializing in business litigation. She was previously a litigation associate with Morgan, Lewis & Bockius LLP and Howrey LLP, handling complex commercial litigation matters including securities litigation and professional liability. Jennifer is also a member of the Orange County Bar Association’s Professionalism & Ethics Committee. She may be contacted at jennifer@hacklerflynnlaw.com.