Ethical issues remain at the forefront of all attorneys’ daily practice. With the new year comes an opportunity to examine those practices that may have become routine, but are subject to evolving ethical requirements. It is against this backdrop that we present the first in a series of two articles highlighting how attorneys can best navigate ethical pitfalls in the practice of law. The second publication is due for release in June.
Time to Update Your Retainer Agreements
At the outset of every legal matter, the execution of a retainer agreement has become a matter of routine. Although specific writing requirements vary depending on the jurisdiction, it is clear that the use of a specifically tailored writing delineating the scope and nature of services to be provided can avoid numerous issues as the matter progresses. The retainer should leave little doubt about what the attorney will and will not be doing for a client.
Limiting the Scope of Representation
When a client and attorney have agreed to a limitation concerning services to be provided, such agreements should be reduced to a writing. See Lerner v. Laufer, 359 N.J. Super. 201, 220 (App. Div.) (“[c]onsent to limit the scope of representation under RPC 1.2(c) should be included in a single, specifically tailored form of retainer agreement”), certif. den. 177 N.J. 223 (2003); Pa. R.P.C. 1.2(c) (attorney may limit scope of representation provided the client gives informed consent)). If the representation is only for handling trial matters, then the agreement should state that the engagement does not include appellate work. Properly defining the scope of representation is of particular importance in the matrimonial context as incidental matters frequently arise, including municipal court appearances, real estate transactions, and post-judgment applications.
Special Requirements for Fee Agreements
Practitioners should also be mindful of RPC 1.5 (fees) and its many implications. ABA Model Rule 1.5(b) provides that “[t]he scope of the representation and the basis or rate of the fee and expenses for which the client will be responsible shall be communicated to the client, preferably in writing, before or within a reasonable time after commencing the representation, except when the lawyer will charge a regularly represented client on the same basis or rate.” In the context of contingency matters, such fee agreements must be in writing and are often subject to additional requirements based on the attorney’s jurisdiction. ABA Model Rule 1.5(c); see e.g., N.J. Court Rule 1:21-7 (d) (setting forth how a permissible fee is to be computed)). Some jurisdictions, including New Jersey, require the fee arrangement to be in writing as opposed to the “preference” for a writing embodied in the model rule. Again, the best defense to a claim that the lawyer failed to act when required, is a writing setting forth a clear agreement as to what responsibilities the lawyer has undertaken.
ADR Provisions
The inclusion of alternative dispute resolution (ADR) provisions in retainer agreements has become more common and has drawn increased scrutiny. Generally speaking, the level of disclosure provided with respect to the scope and meaning of the ADR provisions is often determinative of its enforceability. In many jurisdictions, informed consent from the client, consisting of a detailed description of the advantages and disadvantages of ADR is required. See ABA Formal Op. 02-425 (2002). As noted by the New Jersey Supreme Court, New Jersey practitioners are subject to a “heightened professional and fiduciary responsibility” of explaining the specific differences between the “arbitral and judicial forum” which may include limitations on discovery mechanisms in ADR, the lack of a jury trial, associated costs of arbitration, and that the outcome is non-appealable and confidential. See Delaney v. Dickey, 244 N.J. 466, 473-474 n.2 (2020)(“The nature of the disclosure requirements will depend on the particular rules of the arbitral forum chosen by the attorney.”)). In reviewing existing ADR provisions moving forward, attorneys should be aware of specific jurisdictional disclosure requirements and related authority on the matter. One should not assume that the provision is enforceable simply because it is included a written retainer agreement.
Professionalism in the Practice of Law
In addition to the daily stress and pressure associated with the practice of law, attorneys have also had to grapple with unique challenges presented by the global pandemic over the past two years. Attorneys should always be cognizant of the fine line between zealous advocacy on the one hand, and discourteous, inflammatory, and disrespectful conduct on the other. The RPCs require attorneys to treat all persons involved in the legal process with courtesy and consideration.
This continuous obligation extends not only to the judiciary, but also to opposing counsel and clients. When lawyers engage in unacceptable conduct, disciplinary authorities have routinely imposed disciplinary sanctions. See In the Matter of Michael E. Rychel, DRB 16-250 (Apr. 10, 2017)(reprimanding attorney who sent inflammatory and disrespectful e-mails to OAE personnel during ethics investigation); Florida Bar v. Norkin, 183 So. 3d 1018 (Fla. 2015)(disbarring attorney who sent opposing counsel several inflammatory emails)). The pandemic itself has presented numerous circumstances of attorneys behaving badly in the virtual world to which the practice of law has expanded. In one instance, a senior assistant state’s attorney in Connecticut received a reprimand after calling his supervisor a “liar” during a Zoom hearing. In May 2021, the Michigan Court of Appeals ordered an appellate lawyer to pay a $3,000 fine and referred him to the attorney grievance commission for “flipping off” opposing counsel during oral argument held via Zoom. More recently, an Illinois Circuit Court Judge was caught making disparaging comments about defense counsel before realizing it was a hot mic. The standards of conduct are not relaxed by virtue of operating in a virtual forum or failing to fully understand how technology works.
In addition, the prevalence of social media and ease of responding to communications almost instantly have made it easier for attorneys to find themselves in trouble with ethical authorities. To avoid crossing the proverbial “line” in the sand, consider reading your communications out loud before clicking “send.”
Professional Liability Insurance and Disclosure Requirements
New Jersey is the most recent member of growing number of states requiring the disclosure of professional liability insurance coverage for attorneys engaged in private practice as solo-practitioners or as general partnerships. See N.J. Court Rule 1:21-1D. This disclosure requirement would include malpractice insurance coverage information, policy amendments, renewals, and terminations. Generally, practitioners across the country should be familiar with their jurisdictional rules on any coverage and disclosure requirements.
For attorneys and firms in the process of renewing or purchasing professional liability insurance, there are a number of considerations. When selecting a policy, note whether it affords coverage for malpractice counterclaims in actions to collect attorneys’ fees. As a fee collection action is often met with a malpractice counterclaim, certain policies exclude coverage for such counterclaims.
The risk of counterclaims can also significantly affect the insurance costs faced by attorneys. As disclosure of fee collection actions is almost always required in insurance applications, considerations of alternatives to fee collection actions like fee arbitration or other mechanisms that are offered in a given jurisdiction may lessen the impact. Frequent fee collection actions can affect premiums and, by extension, a practice’s bottom line.
When presented with a disciplinary complaint or investigation, a pro se defense is likely ill-advised. Many professional liability insurance policies provide defense cost coverage for such proceedings with a separate (and usually lower) limit of liability. Taking advantage of such coverage should provide the attorney with experienced defense counsel, and disclosure of the proceeding to the insurer in a timely fashion may avoid triggering issues related to late notice in the event a disciplinary proceeding develops into a malpractice action. Be sure to discuss the availability of coverage for disciplinary proceedings when renewing your policy or seeking new coverage.
The Bottom Line
Lawyers can and should familiarize themselves with the contours of the RPCs specific to their individual jurisdiction(s). Ethical concerns, if not addressed early on and in an effective manner, can compound and present themselves further down the road with severe consequences. Staying abreast of changes in the law and adopting best practices of professional responsibility can only help in navigating ethical issues as they crop up in the day-to-day practice of law. When in doubt, consult a colleague or seek the advice of an attorney who specializes in legal ethics.
Reprinted with permission from the January 28, 2022 issue of The Legal Intelligencer. ©2022 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.