f/k/a archives . . . real opinions & real haiku

Legal ethics cannot in practice merely mean “don’t commit larceny.” Fiduciary obligations are not fulfilled simply by “avoiding felonies.”   I say this in response to the Washington Post investigation of D.C.’s probate victims.

The Post report has raised appropriate cries of shock and anger.  But, I’m afraid too many people in the legal profession are already denying that such practices could happen in their home towns or be perpetrated by their colleagues.

Lucky for me (but not for law clients) I was able to point to a far better source than my personal anecdotes. In February, 1997, American Bar Association President N. Lee Cooper had issued his Challenge to State and Local Bar Organizations on “Improving Legal Representation in Cases Involving Children, Youth and Families.”  Cooper’s working group found that:

To alleviate these problems,” ABA President Cooper called on all state and local bar leaders to sign a pledge to work to improve representation in family courts. The list of suggested actions for bar groups included the following, which speak volumes about the need to make reality correspond to the profession’s professed ethical obligations and self-regulatory duties:

You don’t have to be as cynical as your Editor to marvel that any member in good standing of any state’s bar needs such clarifications.   Lawyers know these duties, they choose to ignore them.  Until bar counsel and bar organizations treat everyday diligence as an important part of law practice and legal ethics, nothing much is likely to change.

The Washington Post began a two-part story on Sunday, June 15, 2003, detailing shocking statistics and tales of clients victimized by their lawyer-Guardians in the probate section of the D.C. Superior Court.   The situation was made much worse by scandalously lax oversight and discipline from the responsible judges.  Sunday’s article is headlined Misplaced Trust | Guardians in the District : Under Court, Vulnerable Became Victims — Attorneys Who Ignored Clients or Misspent Funds Rarely Sanctioned . The article includes videos, graphics, and related online discussion.

Weakend Special: I confess, this is a topic I never considered until the Summer 2003 edition of the Harvard Law Bulletin hit my mailbox today. In a short article from its Briefs section, entitled We Are Where We Excrete, Editor Lewis Rice raises the lid on an issue that has been the focus of “serious scholarhip” for several years by HLS alumnus Mary Anne Case (’85).  Case, a professor at the University of Chicago Law School, teaches feminist jurisprudence and constitutional law, and hopes to publish a law review article soon on the topic of “potty parity”.

Right now, trial lawyers everywhere are planning strategy (and calling in favors), hoping to prevent the adoption of the early-offer settlement rules recently proposed by Common Good. The proposed rules would increase the victim’s share — by reducing the lawyer’s share — of damages won in a personal injury lawsuit. [As discussed previously in our postings on May 30, 2003 and June 3, 2003 .]

Well, ethicalEsq has the perfect plan to avoid adoption of the Common Good proposal in the 13 states where petitions are pending, or anywhere else. If p/i lawyers, bar associations, disciplinary committees, the courts, and the entire legal profession simply follow these suggestions, there will be no reason to make the changes proposed by Common Good to the existing rules of ethics. Indeed, this blawg will be the first to say just that. It’s easy:

(1) Start to follow and enforce the current rules concerning the proper use of contingency fees. Stop your denial of these obligations, which were clearly spelled out in the American Bar Association’s Formal Ethics Opinion 94-389, based on long-established principles, Rules and Commentary. Opinion 94-389 isn’t available online from the ABA, but I have summarized it quite fairly in a now unavailable Prairielaw.com column (and more thoroughly in “contingency fees: ethical duties” here at f/k/a):

The Ethics Opinion states that a contingency fee “does not violate ethical standards as long as the fee is appropriate in the circumstances and reasonable in amount, and as long as the client has been fully advised of the availability of alternative fee arrangements.” According to Op. 94-389, a long list of relevant factors needs to be discussed with every client in every case, and “a lawyer who always charges the same percentage of recovery regardless of the particulars of a case should consider whether he is charging a fee that is, in an ethical context, a reasonable one.” In short, the choice to use a contingency fee belongs to the client and any percentage fee charged should reflect how likely the client is to win, how much money is likely to be rewarded and collected, and how much work the lawyer is likely to have to do (that is, the apparent risk taken by the lawyer).

[Note: You are not being savvy, cute or ethical merely responding to Op. 94-389 by saying, as many p/i lawyers have slyly told me, “we have no alternative fee arrangements, so we don’t have to tell the client about them.”]

(2) Because the requirements are almost universally ignored by lawyers and their watchdogs, it’s time to follow this recommendation from Op. 94-389:

“[A]ny lapse from the applicable requirements by some members of the profession suggests that the profession should redouble its efforts to assure that the ethical obligations associated with entering into a contingent fee arrangement are fully understood and observed.”

This means creating CLE seminars, articles and brochures, and imposing some actual attorney discipline. Also, it should mean going to the public to let consumers know their rights, because that knowledge will allow clients to protect themselves and spur fee competition among p/i lawyers. To show good faith and effort, mandatory statements of client rights should be promulgated, to ensure that each prospective client has enough information to make a smart choice in bargaining for a fair contingency fee or another arrangement, such as paying by the hour.

(3) Publically reject the recent changes to Rule 1.5 of the Model Rules of Professional Responsibility that were clearly made to protect lawyers from the ethical and fiduciary obligations required in Op. 94-389. (See My Open Letter to the FTC ) Opt out of the Ethics 2000 conspiracy by specifically asking the ruling body in each local jurisdiction to keep the current version Rule 1.5.

If you don’t take this advice, you’ll prove Common Good’s case and deserve everything you get — or don’t get. However, if the profession immediately take the steps outlined above, Common Good’s complicated, micro-managing proposals will be unnecessary to protect clients from excessive contingency fees. And, that is, or should be, everyone’s goal.

The Kentucky Bar Association appears to be taking a giant step back into the nostalgic and fictional land of “professional dignity,” where all lahwyahs were gentleman who wouldn’t dirty their patrician hands with advertising — or competition!  As Carolyn Elefant at MyShingle.com pointed out yesterday, KBA seems about to enact strict regulations on lawyer advertising, using the ancient excuse that they are “trying to protect the public from false, misleading and deceptive advertising.” Yesterday’s Lexington Herald-Leader covered the story. [link via MyShingle.com]. Their report notes that:

“Ads that use props, such as damaged vehicles and checks with the implication they were involved in a legal case, would be prohibited. The new rules would disallow any ad that suggests a client more likely would win by picking a certain firm and would prevent firms from using certain testimonials concerning actual quality of service and suggestion that a firm has been more successful than others. An attorney’s ad also would not be able to state the dollar amount of a judgment, verdict or settlement in most legal matters.”

MyShingle.com correctly suggests that having a little more faith in the intelligence of the public, and perhaps helping to better educate the public on how to be intelligent consumers of legal services and advertising seems to be a far more enlightened and (to my perspective) client-centered brand of self-regulation. I bet the Federal Trade Commission is already preparing a bit of “competition advocacy” right now, to help educate KBA on the subject of regulating lawyer advertising in a manner that comports with the needs of consumer protection, without violating the First Amendment or antitrust laws.

“[I]t is best for consumers if concerns about misleading advertising are addressed by adopting restrictions on advertising that are tailored to prevent unfair or deceptive acts or practices. . . . [I]mposing overly broad restrictions that prevent the communication of truthful and nondeceptive information is likely to inhibit competition and to frustrate informed consumer choice.” As the Commission staff noted in a 1994 comment to the American Bar Association’s Commission on Advertising, “research has indicated that overly broad restrictions on truthful advertising may adversely affect prices paid by consumers, especially for routine legal services.”

The California Supreme Court held yesterday that a plaintiff in a legal malpractice action may not recover lost punitive damages as compensatory damages from the lawyer. The full opinion in the case of Ferguson v. Lieff, Cabraser, Heimann & Bernstein (S10444, 6/9/03) can be found at this link (provided by How Appealing).

Electrical, that is.  This morning I was in blawgger heaven: almost finished with a posting that offered insight, entertainment, provocation, erudition (trust me).  Then, the power went out — tree trimmers cut a line, I think.  Having been in the zone, I had forgotten to save my work at any point along the way.  Zap! Now, Zip.

It’s only ethicalEsq?’s second Monday, so I hate having nothing new posted here.  Whether this is your first visit or you’re nice enough to be coming back for more, I hope you’ll scroll on down the page and maybe do some clicking in the Navigation Menu.   . 

Because ethicalEsq? has still had no comments on any topic other than contingency fees, I’d like to steer you to my op/ed piece, D for Discipline in the Essays folder.  Although dealing mostly with the system of lawyer discipline in New York State, the essay describes problems that can be found across the nation, and suggests solutions similar to the recommendations of the national legal reform group “HALT”.  The Consumer Federation of America recently endorsed HALT’s proposals, calling for an end to secret hearings and private reprimands, a large increase in the number of nonlawyers on panels, the investigation of all complaints, and the opening up of attorney discipline records.  

For a detailed look at each state’s disciplinary problems, see the Lawyer Discipline Report Cards issued in October, 2002, by HALT for all 51 jurisdictions.   HALT concluded that the American system is still broken — as an ABA Commission stated in 1992, lawyer discipline is “too slow, too secret, too soft, and too self-regulated.”

Feedback is encouraged.  Come back again soon.

The Federal Trade Commission announced in a press release on June 6th, that its staff had filed an amicus brief opposing the proposed class action settlement in the Texas case of Haese v. H&R Block, Inc. — due mostly to excessive attorneys fees.  The plaintiffs claimed that H&R Block helped them get income tax “refund anticipation loans,” but failed to disclose it was receiving a “kick back” from the lending bank on each RAL.  The settlement would give the 700,000 class members coupons for a $20 H&R tax prep rebate, software and planning booklet for five years.  Based on the alleged face-value of the coupons, plaintiffs’ lawyers estimated the value of the settlement at $261 million, and requested attorneys’ fees of $49 million.

Got a few a minutes for truth and justice?  Please grab your local Yellow Pages directory and open to Lawyers.  I’d like to know how many of the ads for personal injury lawyers state the percentage or share of the contingency fee to be charged or say the firm will negotiate fee options with the client.

A May 26th article from the New York Times mentions a study by University of Virginia law professor Jeffrey O’Connell, which found that only 7 of more than 1,400 advertisements by lawyers in twelve big city Yellow Pages directories stated the percentage to be charged.  The average fee in those 7 ads was 31 percent (and I bet that included malpractice and disability claims that are capped at 25% by law).  O’Connell’s study sounds about right to me, although I have looked through many telephone directories from across the nation, at my local Library, and have never yet seen a fee level stated.

Welcome to Visitors pointed this way today by Overlawyered.com, and special thanks to Walter Olson for giving us such good coverage (despite my leftist leanings).

Gosh, the Blawgosphere is sure a friendly neighborhood!  Thanks to my new net neighbors at How Appealling  and The Curmudgeonly Law Clerk for letting me crash the party. 

And, Ernie Svenson of Ernie the Attorney fame toiled late into the evening to post me a plug.  Thanks, and keep those car windows up, Ernest.

Sabrina at beSpacific highlighted the Nevada Legal Resources Directory yesterday, and its sponsor, the L.E.A.N.  Project (Legal Electronic Assistance for Nevadans).  Nevada’s efforts to make legal services more affordable and accessible need to be studied and imitated by other states.  Implementing such programs should be an important part of the activities of bar associations, firms and individual lawyers, in fullfilling their ethical obligation to improve access to the law and to perform meaningful public service.

What’s important to me is not just the use of computer technology to inform consumers about law-related services, but the very existence of the services — e.g., meaningful self-help assistance for pro se parties in Family Court and alternate forms of dispute resolution, such as mediation.  Equally important, these services are available with no means test, letting middle class Americans decide, too, whether their law-related problems can be solved without using traditional lawyer services.  The middle class also finds it hard to afford lawyers and it deserves to know about less-expensive options.

Three cheers for the Washoe County Bar Association, which provided some of the funding for the L.E.A.N. project.  

• Two Cents from Jackie Cliente: I’ve got a BARonx Cheer for the Nevada Bar Association’s online Divorce brochure, which never mentions the mediation and self-help options available throughout the State. 

ethicalEsq?ethicalEsq?

Special Thanks to the Stark County (OH) Law Library Blog for its coverage of our blastoff.  And, to Kevin Heller of Tech Law Advisor for giving us a mention.  

Florida led the way last year with its required Statement of Insured Client’s Rights [Rule 4-1.8(j)].  Starting July 1, 2003, insured clients will have even more protection in Florida, to help ensure that they are not misled when a lawyer is representing both the insurance company and the insured in personal injury and property damage tort cases. The new requirements added to the Rules of Professional Conduct will (1) specifically obligate the defense lawyer to explain from the start to the insured client when the lawyer also represents the insurance company, in order “to minimize confusion and inconsistent expectations that may arise” [Rule 4-17(e)]; and (2) help clarify for the client when lawyers practicing under a law firm name are functioning as insurance staff attorneys [Rule 4-7.10(j)].

After just three days as a blawger, I got my first hate mail today. As expected, I was called anti-lawyer and pro-insurance for daring to believe that the blanket use of standard contingency fees is unethical (by a writer who refused to be go on the record).

To my knowledge, no lawyer who charges each p/i client the same standard fee has ever bothered to counter the ethics arguments — they only whine about disguising a “political issue” as a matter of ethics and making them look bad. I’m glad these guys weren’t my moot court partners back in law school.

P.S. The fact that p/i lawyers sometimes work hard on a case and don’t win does not justify a Standard contingency fee. If you never lost, there’d be no risk of nonpayment and no reason for ever taking more than a normal hourly fee would provide (with interest, perhaps).

No, I don’t merely mean I need visitors to this new blawg.  I need to hear from you about legal ethics reform efforts across the country, because I don’t have access to Members-only sections of bar association websites, or their journals and newsletters, nor to meetings behind closed doors, where proposals are made, amended, rejected or accepted.  I’d also like to hear about reform programs sponsored by consumer action groups.  So, please place your tips and news items into the ethicalEsq? “Suggestions” Box.  

I’m especially interested in efforts to better-inform clients of their rights and options.  Such as:

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  Rules requiring Mandatory Disclosure of Malpractice Coverage below a particular threshhold. E.g., New Hampshire’s Rule 1.7 (less than $100,000), which is described and archived in the Feb. ’03 edition of Ethics and Lawyering Today.  
  
  
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  Requirements or Programs to inform divorcing or separated couples about the existence of divorce mediation and of classes for “parenting-apart.”
  
  
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  Information relating to Client’s Rights when entering into contingency fees, such as Florida’s mandated Statement of Rights.
  
  
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  Client Bills of Rights, such as those passed in New York (which I think is a little too vague), and Illinois (matrimonial matters), and advocated by the legal reform group HALT in its Legal Consumers Bill of Rights Project.

Other topics of interest to ethicalEsq? are described on our “About” page, and new topics are also welcome.  We need your eyes and ears.  Thanks.

Carolyn Elefant of MyShingle.com was nice enough to welcome me into the law blog neighborhood yesterday. Even better, she left a comment that gives me a chance to make my basic soapbox case against the use of a Standard contingency fee — the practice of charging virtually every injured client the same percentage contingency fee (usually one-third or 40% of the damages).
Carolyn’s sentiments seem to be representative of those made by plaintiff’s lawyers who represent individual p/i clients, and you should head over to this page of MyShingle.com to see a list of her postings on contingency fees. Here’s what Carolyn said in her comment yesterday:

“I find the Common Good’s fee cap proposal to be somewhat mean spirited in that it goes after the piddly little “penny ante” cases that help smaller clients but don’t have much impact on the broader legal system. Also, as you point out in your article, clients can always pay by the hour to have an attorney take a case. And I have offered this option to clients (particularly in cases of mediocre value) and none have ever agreed to even front their costs, let alone pay fees out of pocket. The bottom line is that many clients don’t want to put their own money at risk and if that’s the case, attorneys should get something extra for taking the risk instead. (This is all discussed in more detail in my posts).”

Here are my quick replies: (1) I don’t believe the Common Good proposal is trying to reform the whole system (which is why it is not tort reform, it’s legal ethics reform). The proposal is trying to protect the indvidual injured client by correcting the basic unfairness of using a Standard Contingency fee for “easy” cases: compared to how much time the lawyer has in the case and how much risk there was of not being adequately paid, he/she is taking an unfairly large amount of the victim-client’s damages. The personal injury plaintiff’s bar has turned the maximum percentage fee allowed in most jurisdictions (the percentage meant to cover the most risky and difficult cases) into the fee it demands in virtually every case. It asks clients with clearcut, easy cases (where the defendant is clearly liable and has funds) to subsidize clients with far riskier cases.
(2) Clients gripe plenty about how much lawyers take out of their damages, but they don’t file formal grievances because almost all Americans believe there is a rule setting the Standard fee level (be it one-third or 40%). And an apparent lawyers Code of Omerta keeps them uninformed.
(3) Yes, clients have the RIGHT to pay by the hour, but almost none of them KNOW they have that right. Despite their fiduciary obligations, p/i lawyers do not inform clients of the right. Given this failure, I strongly support having a specific ethical rule that requires an attorney to inform the client of that right — and the likely financial impact of various fee options — before entering into a contingency fee contract.
ABA Formal Ethics Opinion 389 (1994) specifically imposed those requirements and was totally ignored by the P/I Bar, which instead has rewritten the new Model Rule 1.5 to remove the sections that clearly supported the requirements in Opinion 389. (I discuss the shenanigans at Ethics2000 in my Open Letter to the FTC on the ABA and Contingency Fees.)
(4) I have found that the relatively few attorneys who tell an injury victim that they could pay by the hour do so only when the case is so bad the lawyer won’t do it on a contingency, and the smart client wouldn’t want to take the risk either. The test for whether the lawyer is looking after the client’s interests first is whether the lawyer tells the client in a relatively easy case, with substantial bucks a near certainty, that the lawyer will accept being paid by the hour rather than insisting on taking the stardard percentage for what will likely be relatively little work. At that point, the client and lawyer might negotiate a fixed hourly fee or a lower contingency percentage based on the lawyers good faith estimate of the risk and time involved.
If you’re not totally persuaded by these cogent arguments, check out the presentation of Cardozo Law Professor Lester Brickman on Contingency Fees before Ethics 2000.    Update: And see our four-part, in depth treatment, of the economics and ethics of contingency fees, from April 2006.

ethicalEsq?ethicalEsq?

Thanks to Tom Mighell of Inter Alia for giving us a mention this morning. Visiting Tom’s site started me down the road of daily blog reading.