June 24, 2017

Colorado Supreme Court: Motion to Disqualify Under Colo. RPC 1.9(a) Rarely Raises “Identical” Issue to Other Case

The Colorado Supreme Court issued its opinion in In re Villas at Highland Park Homeowners Association, Inc. v. Villas at Highland Park, LLC on Monday, May 22, 2017.

Issue Preclusion—Attorney Disqualification—Colo. RPC 1.9.

In this original proceeding under C.A.R. 21, the supreme court reviewed a district court’s order applying the doctrine of issue preclusion to deny defendants’ motion to disqualify one of the plaintiff’s attorneys under Colo. RPC 1.9 and to disqualify her law firm by imputation of the attorney’s conflict under Colo. RPC 1.10. The disqualification inquiry under Colo. RPC 1.9(a) asks whether an attorney’s prior representation and current representation are “substantially related.” This inquiry under Colo. RPC 1.9(a) is specific to the particular matter for which disqualification is sought. The supreme court therefore concludes that a motion to disqualify under Colo. RPC 1.9(a) will rarely, if ever, raise an “identical” issue to a disqualification motion in another case for purposes of issue preclusion. Here, the court held that the trial court abused its discretion by relying on the doctrine of issue preclusion to deny the disqualification motion instead of conducting the requisite analysis under Colo. RPC 1.9(a). The court therefore made the rule to show cause absolute, vacated the trial court’s order, and remanded the case for the trial court to address the merits of the motion to disqualify under Colo. RPC 1.9(a).

Summary provided courtesy of The Colorado Lawyer.

Dissemination of Confidential Client Information Discouraged in Formal Ethics Opinion 130

The Colorado Bar Association Ethics Committee recently issued Formal Opinion 130, dated April 3, 2017. Formal Opinion 130 addresses the disclosure of confidential client information, including information that is publicly available, such as when the information has been on the news. The opinion concludes that dissemination of such information is prohibited by the Rules of Professional Conduct, and specifically states that there is no exception for information contained in the public record.

Formal Opinion 130 also addresses the use of information about former clients, concluding that such use may be allowed under the Rules when such information is “generally known.” The opinion advises attorneys to exercise caution when using information about former clients.

The opinion offers redaction and informed consent as reasonable measures to use for the dissemination of confidential client information, but cautions that merely redacting the client’s name is likely insufficient to comply with the Rules.

Finally, the opinion cautions against editing confidential client information in order to mislead or misrepresent positions. This would implicate Rule 8.4(c), which prohibits conduct involving dishonesty, fraud, deceit, or misrepresentation.

The opinion concludes, “In many situations, making information obtained in the course of representing a client public is helpful, either to other lawyers or to educate the public.  But client confidences must be respected.” Lawyers should use caution when disseminating confidential client information.

Formal Opinion 130 by cleincolorado on Scribd

Why Good Lawyers Do Bad Things – Think It Can’t Happen to You?

High-Profile Lawyer Charged with Punching Client in Court,” Above the Law, October 30, 2015.

Storied Plaintiffs Lawyer Disbarred in Kentucky Over Excessive Fees,” National Law Journal, March 21, 2013.

Lawyer Charged with Forging Signatures of 7 Judges on Over 100 Court Documents,” Above the Law, February 24, 2016.

Biglaw Partner and Associate Destroyed Evidence, Suborned Perjury,” Above the Law, June 24, 2015

Headlines like these grab our attention, but they don’t give us much cause for concern. After all, we would NEVER do anything like that. But what about these?

“[Lawyer] agreed to represent a client in his immigration and criminal matters. On [Lawyer]’s advice, his client pleaded guilty to felony sexual assault. The client later regretted his decision to plead guilty, hired other counsel, successfully withdrew his plea, went to trial, and was acquitted.” People v. Romero, 16PDJ057, December 9, 2016.

“[Lawyer] was convicted five times of driving under the influence (DUI) or driving while ability impaired (DWAI). His most recent conviction took place in 2011. Through this conduct, [Lawyer] violated Colo. RPC 8.4(b) (a lawyer shall not commit a criminal act that reflects adversely on the lawyer’s honesty, trustworthiness, or fitness as a lawyer in other respects).” People v. Condon, 16PDJ050, December 23, 2016.

“In October 2015, [Lawyer] sought a $1,000.00 loan from a client to address cash flow problems. The client agreed, so [Lawyer] executed a promissory note in favor of the client, providing for 8% per annum interest and providing that the principal and interest would be due one month hence, in November 2015. The terms of the loan were fair and reasonable. But [Lawyer] did not advise the client in writing of the desirability of seeking independent legal counsel as to the transaction. Nor did he obtain the client’s written, informed consent to [Lawyer]’s role in the transaction, including whether [Lawyer] was representing the client in the transaction. [Lawyer] failed to pay the client by the agreed-upon date, though [Lawyer] did fully repay the client in March 2016. At that time, the client had not yet reported [Lawyer] to disciplinary authorities.” People v. Foster, 17PDJ018, March 15, 2017.

Do these still sound too far-fetched to you? How about these ones?

“Lawyer accepts $5,000 ‘flat fee,’ expecting a complex dispute, but skillfully resolves the matter in one hour. He then keeps the entire fee.”

“While [Lawyer] served as county attorney, he worked on legal issues involving third parties’ management of dirt track racing at El Paso County’s fairgrounds. He was involved with drafting a memorandum of understanding between the County and one of those third parties to address issues that exposed the County to liability. After [Lawyer] left the employ of El Paso County, the County faced ongoing legal issues with that same third party. In 2013, [Lawyer] began representing that party against El Paso County.”

“[Lawyer] is subject to several orders entered in Arapahoe County requiring him to pay child support, various child-related expenses, and child support arrearages. [Lawyer] paid just over half of the child support obligations he owed between June 2015 and November 2016. [Lawyer]’s failure to satisfy these obligations violated Colo. RPC 3.4(c) (a lawyer shall not knowingly disobey an obligation under the rules of a tribunal) and Colo. RPC 8.4(d) (a lawyer shall not engage in conduct prejudicial to the administration of justice).”

“[Lawyer] failed to obey a court order to pay monthly child support and to satisfy child support arrearages. Her failure to honor her court-mandated obligations tarnished the integrity of the legal system and harmed her child. Her conduct violated Colo. RPC 3.4(c) (a lawyer shall not knowingly disobey an obligation under the rules of a tribunal) and Colo. RPC 8.4(d) (a lawyer shall not engage in conduct prejudicial to the administration of justice).”

“[Lawyer] was retained by a client in March 2016 in a paternity case. Because he failed to pay registration fees, [Lawyer] was placed on administrative suspension on May 2, 2016. While suspended, [Lawyer] participated in a telephone conference with the court and set a status conference for June 2016.”

“[Lawyer], a bankruptcy attorney, was retained by a lawyer who had been disbarred for knowing conversion. The lawyer’s disbarment order required him to pay restitution to several former clients, as well as more than $220,000 to a medical lienholder. On the client’s behalf, [Lawyer] filed a Chapter 13 bankruptcy petition. He did so to stall a foreclosure sale on the client’s house in the hopes of protecting from creditors up to $105,000 in equity under the homestead exemption, and to avoid entangling the client’s second property in Crested Butte in a Chapter 7 bankruptcy. The petition showed that the client’s debt was over 99% of the allowable limit for Chapter 13 cases. The petition did not, however, list the $220,000 debt to the lienholder; instead, it characterized the amount of the debt as “unknown,” “unliquidated,” and “disputed.” Had that debt to the lienholder been included in the client’s total debt, the amount would have exceeded the Chapter 13 debt limit.”

Are you starting to feel uncomfortable? These situations and others are published monthly in The Colorado Lawyer. Although many of the disciplinary situations are too egregious to relate to, others could happen to anyone – even good lawyers like you.

If you ask any random group of people to rank how ethical they are on a scale of one to one hundred, responses will average about 75, meaning almost everyone is misjudging how they would react to actual ethical dilemmas. Studies regularly show a gap between an ethical goal (how ethical we aspire to be) and ethical judgment (what we actually do). This has been called “bounded ethicality,” and it examines why individuals fail to recognize that external influence and self-interest impact their ethical thinking.

Ethical decisions can be hard for anyone, but the stakes are higher for lawyers because the Colorado Rules of Professional Conduct dictate lawyers’ ethical responsibility. The preamble to the Rules states, “Virtually all difficult ethical problems arise from conflict between a lawyer’s responsibilities to clients, to the legal system, and to the lawyer’s own interest in remaining an ethical person while earning a satisfactory living. . . . The Rules do not . . . exhaust the moral and ethical considerations that should inform a lawyer, for no worthwhile human activity can be completely defined by legal rules.” There are plenty of shades of grey in determining the ethical path, in other words.

On May 15, 2017, Christopher P. Montville of Wheeler Trigg O’Donnell will present a one hour lunch program, “Why Good Lawyers Do Bad Things (And What to Do About it).” This can’t-miss program will explore the reasons why good people sometimes make bad choices, and how to avoid becoming a disciplinary summary in The Colorado Lawyer. Register today by calling (303) 860-0608 or clicking the links below.

 

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CLE Program: Why Good Lawyers Do Bad Things

This CLE presentation will occur on May 15, 2017, at the CLE Large Classroom (1900 Grant St., 3rd Floor) from noon to 1 p.m. Register for the live program here and the webcast here. You may also call (303) 860-0608 to register.

Can’t make the live program? Order the homestudy here — Video OnDemandMP3 Audio

Rule Change 2016(12) Released, Amending the Colorado Rules of Professional Conduct

On Thursday, December 1, 2016, the Colorado Supreme Court issued Rule Change 2016(12), amending the Comment to Rule 2.1 of the Colorado Rules of Professional Conduct. Comment [2] of Rule 2.1, “Advisor,” was changed by the addition of a sentence regarding allocations of parental responsibilities:

[2] Advice couched in narrow legal terms may be of little value to a client, especially where practical considerations, such as cost or effects on other people, are predominant. Purely technical legal advice, therefore, can sometimes be inadequate. In a matter involving the allocation of parental rights and responsibilities, a lawyer should consider advising the client that parental conflict can have a significant adverse effect on minor children. It is proper for a lawyer to refer to relevant moral and ethical considerations in giving advice. Although a lawyer is not a moral advisor as such, moral and ethical considerations impinge upon most legal questions and may decisively influence how the law will be applied.

For the full text of Rule Change 2016(12), click here. For all of the Colorado Supreme Court’s adopted and proposed rule changes, click here.

Inadvertent Disclosure — Damage Control, Recipient Requirements, and More

EthicsInadvertent disclosure of privileged or confidential information is not a new problem for attorneys. However, email and the electronic age have widened the scope of inadvertent disclosure. What happens when you use your email’s auto-fill feature and accidentally fill opposing counsel’s name instead of your client’s? How about when you hit “Reply All” instead of only replying to one party, or when you reply instead of forwarding? These problems are the stuff of nightmares.

To address the problems created by inadvertent disclosure of privileged or confidential information, the Colorado Bar Association Ethics Committee created Formal Opinion 108, adopted on May 20, 2000. Formal Opinion 108 contemplates that a lawyer who receives documents (“receiving lawyer”) from an adverse party or an adverse party’s lawyer (“sending lawyer”) has an ethical duty to disclose the receipt of the privileged or confidential documents to the sending lawyer. If the receiving lawyer realizes the inadvertence of the disclosure before examining the documents, the receiving lawyer has a duty to not examine the documents and follow the sending lawyer’s directions regarding disposal or return of the documents.

In 2008, the Colorado Supreme Court repealed and reenacted the Colorado Rules of Professional Conduct. Rule 4.4(b) provides that “A lawyer who receives a document relating to the representation of the lawyer’s client and knows or reasonably should know that the document was inadvertently sent shall promptly notify the sender.” Rule 4.4(b) applies to situations in which the sending lawyer accidentally provides privileged or confidential information to the receiving lawyer, such as when someone hits “Reply All” instead of forwarding to the client.

Rule 4.4(c) addresses a far less common scenario, when the sending lawyer realizes the disclosure prior to receipt by the receiving lawyer and contacts the receiving lawyer before the privileged or confidential information is viewed. Rule 4.4(c) requires the receiving lawyer to “abide by the sender’s instructions as to its disposition.” Comments [2] and [3] to Rule 4.4 expand on the receiving lawyer’s duties, including providing that as a matter of professional courtesy the receiving lawyer may inform the sending lawyer of the inadvertent disclosure.

Colorado Rule of Civil Procedure 26(b)(5)(B) also addresses inadvertent disclosure. C.R.C.P. 26(b)(5)(B) imposes on the receiving lawyer a mandatory prohibition on review, use, or disclosure of the information until the privilege claim is resolved, if the sending lawyer informs the receiving lawyer of the inadvertent disclosure. C.R.C.P. 26(b)(5)(B) differs slightly from Fed. R. Civ. P. 26(b)(5)(B); lawyers who practice in both federal and state courts should familiarize themselves with the different rules.

On Monday, November 28, 2016, attorney Cecil E. Morris, Jr., will deliver a lunchtime presentation on inadvertent disclosure, which is available for one general CLE credit and one ethics credit. This program is a great way to learn about what to do in case you inadvertently disclose confidential or privileged information, and also what to do if you receive information inadvertently disclosed. Cecil will discuss the differences between the federal and state rules, and will also address the substantive areas of law most affected by inadvertent disclosure. Register here or by clicking the links below.

 

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CLE Program: Inadvertent Disclosure – Professional Liability Series

This CLE presentation will occur on November 28, 2016, at the CBA-CLE offices (1900 Grant Street, Third Floor), from 12 p.m. to 1 p.m. Register for the live program here or register for the webcast here. You may also call (303) 860-0608 to register.

Can’t make the live program? Order the homestudy here: MP3Video OnDemand.

Colorado Supreme Court: Ethical Prohibition on Paying Witness Contingent Fee Does Not Require Exclusion of Evidence

The Colorado Supreme Court issued its opinion in Murray v. Just In Case Business Lighthouse, LLC on Monday, June 20, 2016.

Contingent Fees for Witnesses—Summary Witness Testimony—Summary Exhibits.

The Supreme Court held that the violation of an ethical rule does not displace the rules of evidence and that trial courts retain the discretion under CRE 403 to exclude the testimony of improperly compensated witnesses. The Court also held that trial courts may allow summary witness testimony if they determine that the evidence is sufficiently complex and voluminous that a summary witness would assist the trier of fact. It further held that in those circumstances, summary witnesses may satisfy CRE 602’s personal knowledge requirement by examining the underlying documentary evidence on which they based their summary testimony. Finally, the Court held that that under CRE 1006, trial courts abuse their discretion when they admit summary charts that characterize evidence in an argumentative fashion rather than simply organize it in a manner helpful to the trier of fact. The Court reversed the Court of Appeals’ holding remanding the case to the trial court, but affirmed on all other issues.

Summary provided courtesy of The Colorado Lawyer.

Colorado Court of Appeals: Contract that Violates Rules of Professional Conduct Unenforceable

The Colorado Court of Appeals issued its opinion in Calvert v. Mayberry on Thursday, April 21, 2016.

Disciplinary Proceeding—Oral Contract—Colo. RPC 1.8(a)—Issue Preclusion—Void Agreement—Equitable Lien—Unclean Hands.

In a question of first impression, the Colorado Court of Appeals decided that an attorney who enters into a contract with a client that violates Colo. RPC 1.8(a) cannot later enforce the contract against the client.

The Colorado Supreme Court disbarred the attorney after a hearing board determined he had committed ethical violations, including some against the former client in this case. Specifically, the hearing board found that the attorney had loaned the former client over $100,000 and secured his interest in the loan funds by recording a false deed of trust in the chain of title on her house. The hearing board also found that the attorney had not complied with Colo. RPC 1.8(a) when he made the loans to the former client. The attorney then filed this case to recoup money he had loaned to the former client, claiming that he had an oral agreement with the client for repayment of the loans, and alternatively asserting that the trial court should impose an equitable lien on the former client’s house. The trial court granted summary judgment for the former client and her daughter (to whom she had quitclaimed her interest in the house), finding that because the oral contract between the former client and the attorney violated Colo. RPC 1.8(a), the attorney was ethically prohibited from enforcing that agreement.

The attorney appealed. On appeal, the former client contended that the doctrine of issue preclusion barred the attorney from relitigating factual issues that were litigated during the disciplinary proceeding. The court agreed; therefore, the hearing board’s factual findings bind the attorney in this case, including its finding that the attorney violated Rule 1.8(a) when he entered into the oral contract with the former client, and the oral contract between the attorney and the former client is void and unenforceable. The attorney contended that the trial court erred in applying the doctrine of unclean hands to bar his request for an equitable lien. Based on the attorney’s misconduct, the court disagreed. The attorney also asserted a fraud claim against the former client’s daughter, but his allegations did not support this claim, and it failed as a matter of law. The district court properly entered summary judgment.

The judgment was affirmed and the case was remanded to the trial court to determine whether fees should be awarded to the former client and her daughter.

Summary provided courtesy of The Colorado Lawyer.

Attorney at Work—Mixing Cocktails with Legal Advice: Don’t

Editor’s note: This article originally appeared on Attorney at Work on April 19, 2016. Reprinted with permission.

Mark3By Mark Bassingthwaighte

I can appreciate a well-crafted cocktail. But when I am in a situation where such beverages are being served, I never get involved in a conversation about someone’s legal problems. And I strongly encourage you to do the same.

Here’s a short story that explains why.

An associate at a law firm — not a litigator in any way — attended a social function and had a few more than she should have. She got involved in a conversation with another guest about a personal injury matter. In addition to sharing some generic advice, the associate also let the guest know there was still plenty of time to deal with the matter, saying the statute of limitations in that jurisdiction was two years. Unfortunately, unbeknownst to our heroine, there was an exception to the statute in play and the actual time to file suit was six months. The guest, relying on the advice, did not obtain legal counsel until after the filing deadline had passed.

The young lawyer and her firm were eventually sued for malpractice.

The Accidental Client

We all know drinking and driving can have serious consequences — when your judgment and reflexes are impaired, accidents can happen. Mixing cocktails and legal advice is similarly problematic. It’s too easy for a casual setting, coupled with a few adult beverages, to cloud your thinking. You may then find yourself dealing with an accidental client.

Malpractice claims can easily arise out of these situations, but the risk isn’t limited to cocktail parties. Casual conversations online with extended family members or friends and gatherings with members of your church congregation or other community organizations are all situations where you should proceed with caution.

You can’t overlook the office setting, either.

Should you be concerned about passing along a little casual advice in a conversation with a corporate constituent while representing the entity itself? How about discussing issues with beneficiaries while representing the estate, trying to help a prospective client out during that first meeting when you know you are going to decline the representation? Or what about being a good Samaritan by making a few suggestions on the phone to someone who clearly has a problem but really can’t afford an attorney? How about answering a few questions from an unrepresented third party?

The answer is, of course, yes — these are all situations that can easily lead to an accidental client.

“No Good Deed Goes Unpunished”

Old sayings became old sayings because they have a ring of truth to them.

I am always surprised by what attorneys say when they have to deal with a claim brought by an accidental client. Comments like “I never intended to create an attorney-client relationship,” “There was no signed fee agreement,” and “No money was exchanged so how could this be?” are common.

Guess what: It’s not about you! Typically, it is more about how the individual you interacted with responded to the exchange. If they happened to respond as if they were receiving a little legal advice from an attorney, and that response was reasonable under the circumstances, it can start to get muddy. Worse yet, if it was reasonably foreseeable that this individual would rely or act on your casual advice — and then, in fact, did so to their detriment — you may have a serious problem on your hands.

I share this not with a desire to convince you to keep quiet and never try to help someone. By all means, be helpful. The world could use a few more good Samaritans, and a desire to help others is a good thing as long as you stay the course. I share this because I want you to be cognizant of the risk involved whenever you decide to step into those waters.

Here’s the Bottom Line

Accidental clients are for real and there is no such thing as “legal lite.” So if you are enjoying a wonderful evening at a party, cocktail in hand, and find yourself conversing with another guest who has just learned you are an attorney and wants to “pick your brain,” don’t talk about legal issues you are not well-versed in. If you feel compelled to pass along a little advice, then remember to ask questions so you understand the entire situation. Just know that you may be held to the accuracy of that advice later on, so you might want to jot down a few notes as soon as you can.

Finally, know that it’s okay to say you’re not the right person to be asking, particularly after you’ve had a few.

That said, salute!

Mark Bassingthwaighte, Esq. has been a Risk Manager with ALPS, an attorney’s professional liability insurance carrier, since 1998. In his tenure with the company, Mr. Bassingthwaighte has conducted over 1150 law firm risk management assessment visits, presented numerous continuing legal education seminars throughout the United States, and written extensively on risk management and technology.  Mr. Bassingthwaighte is a member of the ABA and currently sits on the ABA’s Law Practice Division’s Professional Development Board, the Division’s Ethics and Professionalism Committee, and he serves as the Division’s Liaison to the ABA’s Standing Committee on Lawyers Professional Liability. Mr. Bassingthwaighte received his J.D. from Drake University Law School and his undergraduate degree from Gettysburg College.

Contact Information:
Mark Bassingthwaighte, Esq.
ALPS Property & Casualty Insurance Company
Risk Manager
PO Box 9169 | Missoula, Montana 59807
(T) 406.728.3113 | (Toll Free) 800.367.2577 | (F) 406.728.7416
mbass@alpsnet.com | www.alpsnet.com

ALPS offers up to a 10% premium credit for each attorney in a firm who receives 3 CLE credits annually in the areas of ethics, risk management, loss prevention, or office management. ALPS is a lawyers’ malpractice carrier endorsed by the CBA. Learn more at try.alpsnet.com/Colorado

Colorado Supreme Court Adopts Changes to Colorado Rules of Professional Conduct, Colorado Appellate Rules

The Colorado Supreme Court adopted Rule Change 2016(04), 2016(05), and 2016(06) last week, approving changes to the Colorado Rules of Professional Conduct and the Colorado Appellate Rules.

Rule Change 2016(04), adopted and effective April 6, 2016, enacts substantial changes to the Colorado Rules of Professional Conduct. Many of the changes were to the Comments to the Rules, and language was added to many comments about lawyers contracting outside their own firms to provide legal assistance to the client. Additionally, a new model pro bono policy was added to the Comment to Rule 6.1. The changes are extensive; a redline and clean version is available here.

Rule Change 2016(05) amended Rules 35, 40, 41, 41.1, and 42 of the Colorado Appellate Rules, adopted and effective April 7, 2016. The changes to the affected rules were extensive, and the Comments to those rules generally explain the changes. Rule 41.1 was deleted and incorporated into Rule 41. A redline and clean version of the rule change is available here.

Rule Change 2016(06), adopted and effective April 7, 2016, amended the Preamble to the Rules Governing the Practice of Law, Chapters 18 to 20 of the Colorado Rules of Civil Procedure. The Preamble addresses the Colorado Supreme Court’s exclusive jurisdiction and its ability to appoint directors of certain legal programs to assist the court. The Preamble also sets forth the court’s objectives in regulating the practice of law. A clean version of the newly adopted Preamble is available here.

For all of the Colorado Supreme Court’s adopted and proposed rule changes, click here.

Public Comment Period Open for Changes to Colorado Rules of Professional Conduct

The public comment period is now open for proposed changes to the Colorado Rules of Professional Conduct. Most of the proposed changes amend the Comments to the Rules. Some of the proposed changes are minor, such as updating cross-references or contemplating electronic communications, while others are extensive, such as changes regarding how much disclosure of client information is appropriate during conflict checks or use of lawyers and nonlawyers outside the firm.

Comments regarding the proposed changes may be submitted to Christopher Ryan, Clerk of the Supreme Court, via email, mail, or hand-delivery. Comments must be received no later than 5 p.m. on October 15, 2015. A public hearing will be held on November 4, 2015, at 2:30 p.m. in the Colorado Supreme Court courtroom, and anyone wishing to participate in the hearing must notify Mr. Ryan no later than October 26, 2015.

For a redline of the proposed changes, click here.

The Colorado Lawyer: Screen Clients First—Avoid Problems Later

Editor’s Note: This article originally appeared in the December 2014 issue of The Colorado Lawyer. Reprinted with permission.

By J. Randolph Evans, Shari L. Klevens, and Lino S. LipinskyEvans-Klevens-Lipinsky


Authors’ Note
Readers’ comments and feedback on this series of “WhoopsLegal Practice Malpractice Prevention” articles are welcomed and appreciated. References in the articles to “safest courses to proceed,” “safest course,” or “best practices” are not intended to suggest that the Colorado Rules require such actions. Often, best practices and safest courses involve more than just complying with the Rules. In practice, compliance with the Rules can and should avoid a finding of discipline in response to a grievance or a finding of liability in response to a malpractice claim. However, because most claims and grievances are meritless, effective risk management in the modern law practice involves much more. Hence, best practices and safer courses of action do more; they help prevent and more quickly defeat meritless claims and grievances. Other than billing, there is virtually nothing that attorneys dread more than addressing potential conflicts of interest. After all, resolving conflicts issues requires and attorney to focus on why not to take on a new representation rather than how to get the business in the door. However, unidentified or unresolved conflict issues cost lawyers more—in both clients and money—than most attorneys realize.


For many attorneys in today’s difficult economic world, screening clients seems like a far-fetched concept, akin to telling a starving man to watch what he eats. Many firms are just glad to have clients; screening the few they have appears to be the least of the firm’s worries.

However, according to the data, problem clients are often worse than no clients at all. Clients who pay fees, but who also bring legal malpractice claims, only hurt—not help—the attorney and can result in a large net loss for the firm. The challenge comes in screening out the problem clients during the intake process.

Screening clients has a different meaning depending on the size, type, and location of a law practice. For solo practitioners, it will mean identifying the risk factors for new clients (preferably through use of a checklist) and then balancing the risks against the potential rewards of the representation. For smaller and mid-size firms, screening involves identifying standard practices and procedures suitable for the needs and expertise of the law practice, and ensuring that all of the lawyers in the practice consistently follow those rules. For larger firms, effective screening includes systems to ensure consistent compliance with the firm’s policies.

Every representation, whether for a paying client or for a pro bono client, requires that the attorney exercise good judgment about acceptance of the new client; and because it involves judgment, there is no formula for every decision regarding whether to accept a new client. However, there are some practices and procedures attorneys can implement when creating checklists and developing systems for screening prospective new clients.

Developing a Screening Method

Some indicators for problem clients seem obvious. Others are the product of data about legal malpractice claims and the risks of the modern-day law practice. The most important part of client screening is to adopt and follow a set of standard practices and procedures, including referring to a screening checklist, that apply to every new client and matter.

1. Ask the right questions.

Common sense goes a long way in detecting and avoiding problem clients. For example, one of the most telling questions to ask a new client is: “How many attorneys have previously represented you in this matter?” If the answer to that question is “seven,” the attorney will want to think long and hard about becoming the eighth. Clients who have been unhappy enough to hire and fire seven attorneys are unlikely to be happy with the eighth. Of greater concern is that, if their case or transaction does not go well in their eyes, they just might hire a ninth to sue the eighth for malpractice.

The lawyer should ask prospective clients other common-sense questions. For example: How many times have you been a party to litigation? Potential clients who have been parties to several prior cases should raise red flags. This is especially true for potential clients who have made a career of suing other people. Eventually, these serial plaintiffs make their way to also suing their attorney.

The realities of the proposed representation are also relevant when deciding to take on a new client. In making this assessment, consider when the work must get done. This involves calculating the first deadline for the new matter. Representations often do not end well if they begin on the eve of (1) the expiration of the statute of limitations for a plaintiff’s claim; (2) a scheduled closing for completion of a transaction or deal; or (3) any other imminent deadline. Unrealistic deadlines are red flags for a new representation.

Sometimes, there are good reasons a client reaches out to an attorney to undertake a representation on the eve of a pressing deadline. However, they are sometimes the same reasons an attorney should have second thoughts about accepting the representation. It could be that an earlier attorney fired the client because the client did not pay, or there could be insurmountable problems that have left the client desperate for immediate representation. Whatever the reason, the most significant questions attorneys should ask are: (1) When is the earliest deadline? and (2) Why is the client just now reaching out? The answers to these questions are important in deciding whether to accept the representation.

Another good question to ask is whether the prospective client can afford to pay the attorney fees associated with the representation. If there is no realistic chance of getting paid and the attorney takes the case anyway, the attorney assumes the risks of liability with no opportunity for compensation. This is a lose–lose proposition. Thus, a prospective client’s ability to pay is an important pre-representation topic that attorneys should candidly address.

Other things to consider when screening prospective clients include (1) possible conflicts with other clients; (2) whether the attorney has the expertise required to effectively handle all of the client’s issues; and (3) the role the client expects the attorney to play in the context of the client’s overall situation. These determinations are of particular concern, because they relate to an attorney’s ethical obligations toward the client.

For example, the Colorado Rules of Professional Conduct (Rules or Colo. RPC) require an attorney to avoid conflicts with current and past clients or, alternatively, to take special care when entering into an engagement that could create potential conflicts.[1] The Rules also address attorney competence, requiring that an attorney has the “legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.”[2] Additionally, the Rules allow an attorney to limit the scope of representation at the outset of an engagement, if reasonable.[3] Thorough screening may reveal whether limiting the scope of representation from the outset is a prudent option under the circumstances, as opposed to declining the engagement, based on the client’s stated objectives. If the attorney has captured in writing the scope of the mutually agreed representation at the beginning of the engagement, that attorney will be in a far better position should the client later challenge the attorney on this front.

Certain types of engagements may be permitted under the Rules, but not under the Standards of Professional Conduct of the U.S. District Court for the District of Colorado. Attorneys should be aware that the U.S. District Court has declined to adopt the state’s “unbundling” rule, Colo. RPC 1.2(c), which allows the provision of limited representation to pro se parties, as described in Colo. RPC 11(b) and Rule 311(b) of the County Court Rules of Civil Procedure.[4] For example, in state court matters, an attorney may provide assistance to a pro se litigant without entering an appearance. The same attorney, however, is prohibited from “ghost writing” a pro se party’s filings in federal court. The attorney should turn away a potential client who is seeking the type of behind-the-scenes assistance that the U.S. District Court does not permit.

On October 10, 2014, the U.S. District Court promulgated proposed amendments to its local rules that include an opt-out from comment 14 to Colo. RPC 1.2(d). The comment, which the Colorado Supreme Court adopted on March 24, 2014, states that a Colorado attorney may counsel clients “regarding the validity, scope, and meaning” of the medical marijuana and recreational marijuana provisions of the state constitution, and “may assist a client in conduct that the lawyer reasonably believes is permitted by these constitutional provisions” and the laws implementing them, as long as the attorney also “advise[s] the client regarding related federal law and policy.” If the District of Colorado ultimately decides not to adopt comment 14, attorneys admitted to practice in that court would need to carefully consider whether they could accept engagements involving advice regarding the state’s marijuana laws.

In sum, thorough screening provides a double benefit to the prudent attorney. It decreases the attorney’s exposure to malpractice suits and fulfills several ethical obligations.

2. Consider what’s expected.

An attorney should inquire about the prospective client’s expectations—of both the representation and the attorney. Some clients simply expect their attorney to achieve a successful result on their behalf, without consideration as to how that end is achieved. These attorney-client relationships rarely end well. A candid conversation about what is possible, along with a description of what the attorney can and cannot do, is an important part of the screening process. If there are things the prospective client expects that the attorney is unable or unwilling to do, the attorney should decline the representation.

One other thing to watch for is a client who is “too good to be true.” Often, these are the same clients who expect an attorney to bend (or ignore) the rules. Their stories are full of contradictions, and they expect results regardless of means. Avoid the temptation of agreeing to represent them without conducting a thorough investigation; these may turn out to be problem clients, too.

3. Conduct some background research.

The Internet provides attorneys cost-effective tools for conducting fast preliminary background research on prospective clients. The research might turn up little, or it might disclose a prospective client with a history of problems that often extend to anyone and everyone around the client. Credit checks (with the consent of the prospective client) could reflect someone who either cannot or does not pay. A simple litigation search might reflect a prospective client who has sued his or her attorney before. These possible clients require a long look before an attorney would agree to the representation.

4. Create a client-screening system.

Inevitably, the client who creates the most problems is the one who escaped the screening filters. Effective systems make it next to impossible for potential problem clients to slip through the cracks. This means that a file cannot be opened or a matter billed unless the screening questions have been asked and the data collected. Hence, the certainty of the system is as important as the content of the screening itself.

NOTES

[1] See Colo. RPC 1.7 and 1.8. Comment 3 to Rule 1.7, which addresses conflicts with current clients, states, in part, “[a] conflict of interest may exist before representation is undertaken, in which event the representation must be declined, unless the lawyer obtains the informed written consent of each client . . .” under the conditions provided in the rule.

[2] See Colo. RPC 1.1.

[3] Colo. RPC 1.2, cmts. 6 and 7.

[4] See D.C.Colo.L.Atty.R. 2(b)(1).

 

Randy Evans is an author, litigator, columnist and expert in the areas of professional liability, insurance, commercial litigation, entertainment, ethics, and lawyer’s law. He has authored and co-authored eight books, including: The Lawyer’s Handbook; Georgia Legal Malpractice Law; Climate Change And Insurance; Georgia Property and Liability Insurance Law; Appraisal In Property Damage Insurance Disputes; and California Legal Malpractice Law. He writes newspaper columns (the Atlanta Business Chronicle, the Recorder, and the Daily Report) and lectures around the world. He served as counsel to the Speakers of the 104th – 109th Congresses of the United States. He co-chairs the Georgia Judicial Nominating Commission. He serves on the Board of Governors of the State Bar of Georgia. He handles complex litigation throughout the world. He has been consistently rated as one of the Best Lawyers in America, Super Lawyer (District of Columbia and Georgia), Georgia’s Most Influential Attorneys, and Georgia’s Top Lawyers for Legal Leaders. Along with numerous other awards he has been named the “Complex Litigation Attorney of the Year in Georgia” by Corporate International Magazine, and Lawyer of the Year for Legal Malpractice Defense in Atlanta. He is AV rated by Martindale Hubble.

Shari Klevens is a partner in the Atlanta and Washington, D.C. offices of McKenna Long & Aldridge LLP. Shari represents lawyers and law firms in the defense of legal malpractice claims and advises and counsels lawyers concerning allegations of malpractice, ethical violations, and breaches of duty. In addition, Shari is the Chair of the McKenna’s Law Firm Defense and Risk Management Practice and is a frequent writer and lecturer on issues related to legal malpractice and ethics. Shari co-authored Georgia Legal Malpractice Law and California Legal Malpractice Law, which address the intricacies and nuances of Legal Malpractice law and issues that confront the new millennium lawyer. She also co-authored The Lawyer’s Handbook: Ethics Compliance and Claim Avoidance, which is an easy-to-use desk reference offering practical solutions to real problems in the modern law practice for every attorney throughout the United States.

Lino Lipinsky de Orlov is a litigation partner in the Denver office of McKenna Long & Aldridge, LLP.  He represents clients in all aspects of commercial litigation, mediation, arbitration, and appeals.  He has developed particular experience in complex business cases, particularly those involving creditor’s rights, real estate, trade secrets, and employment disputes.  Mr. Lipinsky also frequently speaks and writes on legal issues relating to technology, employment law, and ethics.   He is a member of the Colorado Bar Association’s Board of Governors and serves on the Board of the Colorado Judicial Institute.  He is a former President of the Faculty of Federal Advocates.  Among his honors, Chambers USA has recognized Mr. Lipinsky as one of Colorado’s leading general commercial litigators, and he has been included in The Best Lawyers in America.  He received his A.B. degree, magna cum laude, from Brown University and his J.D. degree from New York University School of Law, where he was a member of the New York University Law Review.

 

The opinions and views expressed by Featured Bloggers on CBA-CLE Legal Connection do not necessarily represent the opinions and views of the Colorado Bar Association, the Denver Bar Association, or CBA-CLE, and should not be construed as such.

Colorado Supreme Court: Public Censure Appropriate Remedy Where Attorney Engaged in Negligent Conduct

The Colorado Supreme Court issued its opinion in In the Matter of Olsen on Monday, June 2, 2014.

Attorney Discipline—Colo. RPC 3.1 and 8.4(d).

In this attorney discipline proceeding, The Supreme Court held that the hearing board’s order suspending attorney John R. Olsen for six months with the requirement of reinstatement was unreasonable. The hearing board found that Olsen engaged in negligent conduct, not knowing falsehood. After reviewing prior decisions and the American Bar Association’s Standards for Imposing Lawyer Sanctions, the Court concluded that the appropriate sanction against Olsen was public censure. Accordingly, the Court affirmed the hearing board’s conclusions that Olsen violated Colo. RPC 3.1 and 8.4(d), but reversed its imposition of a six-month suspension with the requirement of reinstatement and instead ordered that Olsen be publicly censured for his misconduct.

Summary and full case available here.