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Ethical Violations Alex May Have Committed
MODEL BAR ANSWERS
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ETHICAL VIOLATIONS ALEX MAY HAVE COMMITTED
Lawyers Practicing Law with Nonlawyers
A lawyer may not practice law in association with, or otherwise share fees with, a nonlawyer. This rule does not prohibit a lawyer from delegating tasks to a paralegal, law clerk, or other such person. The lawyer must, however, supervise the delegated work carefully and must be ultimately responsible for the results.
Given the fact Alex has hired Dale – a “recently-disbarred attorney” – to assist him as a “paralegal” to form the partnership agreement between Booker and Clare, at issue is whether this constitutes an improper association with a nonlawyer. Further, Alex’s payment of $1,000 to Dale for his paralegal works seems to compound this issue in view of the fact he must not share any part of his $5,000 fee with Dale in the event Dale is deemed to be a nonlawyer.
Assuming, however, that Dale qualifies as a paralegal – and especially given the “decades of experience” he had as a practicing lawyer including the “preparation of partnership documents” – also at issue is whether Alex sufficiently supervised him in researching the Booker/Clare partnership agreement. Although Alex had two meetings with his clients, only a part of the two total hours he actually spent on the agreement was dedicated to “reading the documents” that Dale prepared. The facts are otherwise absent in describing any supervision or even review of Dale’s paralegal work. A possible ethical violation is compounded in the event Alex’s payment of $1,000 to Dale for his work – an unusually significant amount given the $250-per-hour rate – is considered unreasonable. In effect, it could be construed as a shared fee given the fact it proportionately represents 20% of the $5,000 fee Alex received.
Reporting Professional Misconduct
Although the ABA rules require a lawyer to report misconduct by another lawyer, the California RPC has no such reporting provision.
In this event, in the event Dale’s working arrangement with Alex is interpreted as unauthorized practice of law, Alex may have committed an ethical violation per the ABA reporting requirement but not under the comparable California rule in failing to report his working relationship with Dale. Although the facts state that “Alex notified the State Bar about hiring Dale,” they do not specify the nature of Dale’s status with Alex as a potential paralegal versus a possible practicing lawyer.
Concurrent Conflict of Interest
A lawyer must not represent a client if the representation creates a concurrent conflict of interest where the representation of a client will be directly adverse to the interest of another client or there is a significant risk that the representation of a client will be materially limited by the interests of another client or by the lawyer’s interests.
Although Alex’s college friendship with Booker could bias him in promoting Booker’s publishing interests and therefore be adverse to Clare’s partnership interest with Booker, there do not appear to be any further facts underscoring a significant risk to Booker or Clare’s interests due to Alex’s concurrent representation of them.
Client Consent to Concurrent Conflicts
Despite a concurrent conflict of interest, a lawyer may undertake a representation if the lawyer reasonably believes that he can competently represent each affected client, the representation is not prohibited by law, and each affected client gives informed, written consent.
Although the facts show that Alex “disclosed Dale’s involvement and disbarred status to both Booker and Clare,” they do not indicate that he disclosed his own lack of experience in forming partnership agreements. Alex’s competence in representing both Booker and Clare may therefore be questionable. Further, there are no facts that demonstrate Alex obtained written consent from both Booker and Clare in view of his potential concurrent representation of them.
Duty of Confidentiality
If a lawyer’s duty of confidentiality to one client prevents him from disclosing information that another client needs to understand any potential conflict of interest, then concurrent representation is unconsentable.
Although Booker and Clare may have different proprietary needs in their partnership agreement – and especially given their respective positions as publisher and author – there do not appear to be any specific facts highlighting Alex’s need to exercise his duty of confidentiality on behalf of either of them.
Competent Representation
A lawyer must exercise reasonable care in representing his client’s interests.
Alex’s lack of experience in forming partnership agreements as a new lawyer – and his apparent failure to disclose this fact to both Booker and Clare – may constitute an ethical violation in assuring a standard of reasonableness. Merely “reading the partnership agreement” prepared by Dale as a part of his two-hour investment in this transaction seems questionable in meeting the due care reasonableness standard.
Fee Must Be Reasonable
Under both the ABA and RPC, an attorney’s fee must be reasonable based on such factors as the time, labor, and skill required to perform the work. In addition, such factors as the experience, ability, and reputation of the attorney may also be taken into account. Further, California requires a written fee agreement if the fees should exceed $1,000 absent certain exceptions.
The failure by Alex to obtain a written agreement for the $5,000 fee – in addition to the size of the fee in view of his lack of experience as a new attorney in forming partnership agreements – all seems to suggest a possible ethical violation in that the fee was unreasonable. This is magnified given the fact Dale did two-thirds of the work in actually forming the partnership agreement and Alex only briefly met with his clients and read the agreement.
Withdrawal
Withdrawal is mandatory if representation will result in violation of the RPC – and per the ABA Rules – is permissive if withdrawal can be accomplished without material adverse effect on the interests of the client.
In the event Alex’s representation is considered a violation of any of the above-mentioned issues, he would be required to mandatorily withdraw from his representation of the Booker/Clare partnership agreement. Although the facts do not specify whether Alex’s withdrawal would adversely impact his clients, the ABA rules would permissively allow him to withdraw in the event of an ethical violation.
Duty to Maintain Professional Integrity
Failure to abide by either the RPC or ABA rules is itself an ethical violation. In the event Alex is deemed to have violated any of the above-described ethical issues he may also be found to have committed an ethical violation in failing to maintain his duty to protect the integrity of his profession.
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This answer was provided by Cal Bar Tutorial Review. For over 33 years CBTR has provided personalized and customized bar review for both first-time and repeat examinees. CBTR’s website is www.cbtronline.com. Cal Bar Tutorial & Review Program may be contacted through 800-783-6168 or 800-348-2401.