Five Hot-Button Lawyer Ethics Questions

Jim Wagstaffe

I have been writing about legal ethics and advising law firms as outside counsel on such issues for decades. And there are certain questions – not necessarily the “big” ones – that come up with some regularity and bear reminders on how we lawyers must behave.

Surprisingly, the five “hot button” questions described below do not always involve the high-profile, State Bar-sensitive subjects, e.g., dreaded trust account conundrums, in-take conflict of interest drill downs, or even client confidences, competence to practice, duties as an advocate or sex with clients. Rather, the following five ethics questions arise with surprising frequency for lawyers in this state.

What Must I Do to Share Fees with Another Attorney Outside My Firm?

Lawyers who are not in the same law firm shall not divide a fee for legal services unless (1) the lawyers have a written agreement to divide fees, (2) the client has consented in writing after a full written disclosure, and (3) the total fee charged cannot be increased solely by reason of the division CRPC 1 5 1(a) The client’s written consent must be either at the time the lawyers or as soon thereafter as reasonably practicable. CRPC 1.5.1(b).

What Must I Do to Help Clients Preserve Evidence?

Certainly, every client has a duty to preserve relevant evidence if litigation is reasonably anticipated. Additionally, attorneys have an affirmative duty to explain to their clients these discovery obligations, which include the types of records that are discoverable and the need to use appropriate collection and preservation methods.

Merely giving a general admonition to the client to preserve “relevant” documents is insufficient. Attorneys must describe the subject matter and the kind of documents to preserve, including giving advice on “litigation holds” and “preservation” notices to the client’s managers and employees. In this regard, the attorney has an affirmative duty to be informed about a client’s computer systems (e.g., content and location of ESI such as email, archival data, personal devices, removable media, etc.).

The requirements for disclosure and consent still apply in situations where the other lawyer’s involvement is limited to referring the matter at the outset. Id. Fee-splitting is prohibited if the arrangement is with a non-attorney.

The rules also provide that an attorney may not accept compensation for representing a client from someone other than the client unless: (1) there is no interference with the attorney’s independence or professional judgment; (2) information relating to the representation is protected as confidential; and (3) the attorney obtains the client’s informed written consent CRPC 1.8.6.

The bottom line: include these disclosures in your initial fee agreement and include a line for your client’s consent to the arrangements. Failure to follow such rules could result in a denial of a right to recover fees under such situations.

Can I Speak with a Represented Person?

In representing a client, a lawyer shall not communicate directly or indirectly about the subject of the representation with a person known to be represented by another lawyer (without the other lawyer’s consent). CRPC 4.2(a). This includes speaking with represented organizations’ current officers, directors, partners, managing agents, and even current employees (if it’d be binding on the entity). CRPC 4.2(b).

Importantly, this prohibition also precludes communicating “indirectly” with a represented person. CRPC 4.2, Comm. 3. This means that, while clients are free to communicate directly with each other, the lawyer cannot use the client or some other intermediary (e.g., agent, investigator) by way of directing them as to what to say to the represented party Id However, nothing prevents the attorney from advising or recommending that a client engage in such a communication. Id.

Issues that arise under this rule include:

• If a party himself or herself to a legal matter, the lawyer can communicate with a represented person (since they are not “representing a client”). Id.

• The rule bars communications initiated by the opposing party and communications to represented persons – whether they are parties to a pending litigation.

• Importantly, however, the rule does not apply to communications with former employees or company representatives (unless they are still represented by counsel). Communications are allowed if the person is not currently represented by counsel, even if it is likely they later will be.

Can I Negotiate Aggregate Settlements for Multiple Clients?

An attorney who represents two or more clients generally cannot enter into an aggregate settlement of the claims of or against the clients without the informed written consent of each client. CRPC 1.8.7(a). An aggregate settlement is one in which more than one client’s claim or defense is settled at once. CRPC 1.8.7.

However, an attorney is ethically permitted to obtain advance authority from clients (with informed consent) as to settlement ranges to be accepted if offered later within the range preapproved by the clients. The attorney must provide the following information:

The total amount of the aggregate settlement;

Details of every client’s participation in the aggregate settlement;

Total fees and costs to be paid to the lawyer; and

Method by which costs are to be apportioned among the joint clients.

How Long Must I Keep My Client Files and Documents?

Of course, the client “owns” the file, and the lawyer shall promptly release to the client at his or her request the client's materials and property. CRPC 1.16(e)(1). This rule also allows attorneys at their own expense to make a copy of the file. Id., Comm. 6.

After discharge (or at the end of a case), attorneys have an obligation to maintain or return the client’s files and documents. For example, if an original probate document is deposited with the attorney, he or she must use ordinary care for its preservation (e.g., placing it in a safe, safe deposit box or other secure place).

And regarding "client papers and property," absent a previous agreement, lawyers must make reasonable efforts to obtain the former client's consent to any disposition (giving notice of the intended return or destruction).

If, after such efforts, the attorney is unable to locate the former client or obtain instructions, the attorney may destroy the items unless he or she has reason to believe (1) that preservation of the items is required by law (e.g. probate documents or criminal case files while the client is alive), or (2) that destruction of the items would cause prejudice to the client, i.e., that the items are reasonably necessary to the client's legal representation.

In fulfilling these functions, the attorney should examine the file before the papers are destroyed. However, there may be a duty to preserve the documents (1) if there is a reasonable possibility of litigation, (2) there is a protective order requiring their preservation, or (3) there is a preservation agreement. Certainly, if the files are adequately backed up and safeguarded electronically, there is no ethical requirement to set up a separate paper file, though there clearly is a duty to safeguard client confidential information in the process (e.g., shredding).

As to the “how long” question, there is no bright line until it is safe to destroy unreturned client papers and documents. However, (and absent a separate client agreement), ethics opinions essentially conclude that the attorney may destroy a particular item from a former client's file if he or she has no reason to believe the item will be reasonably necessary to the client's representation.

Given the absence of detailed preservation timelines, the practice tip is to include “return or destroy” language in the original fee agreement. For example, the agreement can state that withina designated time after the end of the engagement or after notice, the attorney will destroy the file absent contrary instructions from the client. This ensures greater clarity and risk avoidance for legal practice.

There are many, many ethical issues that arise while obtaining and representing clients in California. However, these are five recurring circumstances that call for strict compliance with the governing rules to avoid later collisions with your clients and the State Bar.