Buried Bodies

I have been a fan of RadioLab for years.  The programs are almost always interesting and include such diverse topics as a miracle of ancient mechanical ingenuity (A Clockwork Miracle), speculation about whether Ravel's Bolero was a manifestation of his growing brain tumor (Unraveling Bolero),  an episode called Words in which a woman teaches a 27-year-old man the first words of his life, and another called Speed, which, among other things, discusses the millions made in winning the race to build the fastest communications link to with the stock exchange.

RadioLab gets a shout-out from this blog for its current episode: The Buried Bodies Case, which is their first that I am aware of that tackles a gut-wrenching issue of legal ethics. 

Through interviews, RadioLab recounts the ethical dilemma faced by the attorneys who defended Robert Garrow, a mass murderer living in upstate New York.  Garrow confided in his lawyers that he had killed others, and where the bodies could be found.  Seeking to determine whether their client was delusional, his lawyers then went out and found the bodies.  The Rules of Professional Conduct (then the Code of Professional Responsibility) required that they remain silent, even as desperate families, holding out hope that their then-missing children might yet be alive, begged them for information.  

Reviled at the time, Frank Armani, one of Garrow's defense counsel, is now properly revered in ethics circles -- like Atticus Finch, a lawyer who held fast to his principals in the in the face of public scorn and even death threats.  It is riveting radio.

You can download The Buried Bodies Case, and other great RadioLab programs as a podcast from iTunes.

Smart Phones and Tablets in Legal Practice

     IN CASE YOU WERE WONDERING why there have been no new posts recently, the answer is I have been immersed in study and writing, preparing for a new video webcast I will be recording at NBI's offices in Altoona, Wisconsin on 6 June.

The topic is Ethical  Issues involving Smart Phones and Tablets in Legal Practice.  A large part of the presentation will involve a discussion of the many ways wireless devices can be hacked, and how to reduce the chance of your becoming a "teachable moment."

The broadcast date is 22 June, and will include a live Q&A session.  You can register for the webinar here.  Having been some time in preparation a splendid time is guaranteed for all.

Making Molehills Out of Mountains

Photo by Dieder Plu

  
     Lawyers are natural pack rats, and document management systems, coupled with cheap data storage, are their enablers.  But is the hoarder lifestyle good for lawyers?

For decades lawyers have served as “free warehouses” for their clients’ files.  As a result, a lawyer’s heirs may discover that all they have inherited is a mountain of paper, the mass of which evokes the final scene from Raiders of the Lost Ark.  This mountain now has a digital layer which is just as, if not more, challenging to scale.  

This amazing matte painting by Michael Pangrazio took 3 months to create

Genesis of the Problem

Colo. RPC 1.16(d) commands: “Upon termination of representation, a lawyer shall . . .  surrender[] papers . . . to which the client is entitled.”  Few lawyers do, and few clients complain.  Why? 

 

To a lawyer, retention of a client’s file is security that it will return for future services.  Moreover, file pruning and delivery is a time-consuming, non-billable task.  As long as warehouse space is cheap, it’s easier and potentially more profitable for a lawyer to kick the can down the road, even all the way to the graveyard.  For their part, most clients are delighted to have their lawyer retain their files, especially if they are voluminous, since it is virtually unheard of for a lawyer to charge for this perpetual maintenance.  With no incentive for either lawyer or client to houseclean, why bother?

One consequence of this mutual neglect is the rise of “Inventory Counsel,” an entire group within the Office of Attorney Regulation Counsel tasked with overseeing the disposition of files when an attorney dies or becomes incapacitated without having made arrangements for the handling of his practice.  More than 21,000 of the 48,000 attorneys registered in Colorado are baby boomers who have, or will, stop practicing – one way or another – within the next two decades.  Little wonder that in 2014 OARC inventoried 4,301 client files, a 44 percent increase over 2013 – just the tip of a rapidly aging iceberg.  

The rise of e-mail and electronic documents has exacerbated the problem.  Vydec & Wang is not the name of an immigration law firm.  Together with NBI, Linolex, and Lexitron, these were the earliest dedicated word processing systems, each with its own proprietary software.  All were long ago consigned to the Museum of Computer Antiquities, along with 5-1/4” and 3-1/2” floppy discs.  How many attorneys maintain the obsolete software and hardware required to read the native files created by these systems?

Even if an attorney has faithfully converted all of her electronic files through each successive iteration of technology, the magnitude of the Mount Megabyte, and the imperative to better manage it, will hit home the first time a client with hundreds of digital files requests them, or an e-discovery request is served.  For law firms, the problem is magnified by the number of time-keepers who have worked on a matter.  Woe unto the lawyer or firm who has not implemented and scrupulously followed a document management plan when the litigation-hold letter arrives.

Solutions and Strategies

                Adopt a File Retention Policy (and Follow It!)

A partial solution is offered by Colo. RPC 1.16A (Client File Retention), perhaps the single most important ethics rule enacted in the last decade.  Rule 1.16A provides four methods of turning a document mountain into a more manageable mole hill:

The first and easiest solution is to simply “surrender” the file to the client.  This can be done either by delivering the file or notifying the client it is available for pick-up.  Be sure to get and keep a signed receipt which should expressly inventory important documents.  Also, if circumstances warrant, Bates numbering and copying each page will avoid later disputes as to what was in, and what was not in, a file.  The cost of continued storage in such cases is more than compensated by the peace of mind provided, and can be lessened by digitizing the retained file.

Second, a client may give written consent to destroy its file, provided there are no pending or threatened legal proceedings known to the lawyer that relate to the matter.  

Third, a lawyer may give notice to a client of his intent to destroy a closed file so long as notice is provided at least 30 days before the declared destruction date.  Rule 1.16A (d) explicitly allows: 

A lawyer [to] satisfy the [30-day] notice requirement[] . . . by establishing a written file retention policy consistent with this Rule and by providing a notice of the file retention policy to the client in a fee agreement . . . .

The fourth and most powerful file clean-up tool is provided by Rule 1.16A (2)(b):

At any time following the expiration of a period of ten years following the termination of the representation in a matter, a lawyer may destroy a client's files respecting the matter without notice to the client, provided there are no pending or threatened legal proceedings known to the lawyer that relate to the matter and the lawyer has not agreed to the contrary.

This provision enormously lessens the burden of providing notice, and is the only practical solution when a client has disappeared.  An attorney who avails himself to any of these methods should always review, remove, and retain original documents, such as deeds, wills, notes, and stock certificates.

                Deploy a Document Management System

Implementing a document management system (DMS) is essential to herding digital cats.  For a solo practitioner a simple folder-tree system, hierarchically organized by client, matter, and document type, may be sufficient.

For larger firms, bona fide DMS software is essential, as is insisting on attorney compliance.  If “garbage in, garbage out” is bad, nothing in is infinitely worse.  While some gap between client intake and the creation of a client DMS profile is inevitable, attorneys must be constantly nagged reminded to move locally-stored documents to the DMS if the additional overhead of searching and retrieving documents from every time-keepers’ PC is to be avoided.  Doing this, and limiting users’ ability to delete documents from the DMS, will lessen the havoc created when a hoarding attorney bolts a firm and wipes his hard drive clean.

                Malpractice Considerations

The virtues of implementing and following a document management system commend themselves.  There is, however, a philosophical divide on the question of whether retaining documents – especially e‑mail – for longer than is required helps or hurts an attorney when sued for malpractice. 

One camp espouses “if it doesn’t exist, it can’t be discovered.”  Another camp believes that if a matter has been conscientiously and competently handled, retained files, especially electronic files, are more helpful than harmful in establishing that the standard of care has been met, and in refreshing recollections.  Whichever view prevails it is a question that needs to be resolved at a policy level, since any inconsistency in file handling is bound to be discovered and exploited by plaintiff’s counsel, even if spoliation of evidence has not occurred.

An abridged version of this blog originally appeared in the 14 March 2016 edition Law Week Colorado.

The Biggest Social Media Mistakes Made by Lawyers

Attorneys have taken to social media like they did earlier online technologies – with enthusiasm and just a little naivety.  They can mine LinkedIn for business referral sources like a honey badger, but may think Tinder is something you start a campfire with, and that “Netflix and Chill” involves watching movies and unwinding.  Mistakes will be made.  Here are a few of the biggest:

Underestimating the Power of Social Media

Fueled by Ecstasy at a 1985 Dallas night club, Joe MacMillan, Halt and Catch Fire’s enigmatic technology impresario, declares:

Online could be more.  . . .  It could be universal.  You could live your life there.  It would change everything, I promise you.  The world we live in now is going to look like the Stone Age.
. . .   The physical world is dead.  A pathway is being built.  A way out, into a world of pure information.  A shared consciousness. The future is bearing down on us like a freight train and nobody sees it.

Joe was right.  Social media has become “Your electronic Second Life.” 

Asked why he robbed banks, Willie Sutton supposedly said, “Because that’s where the money is.”  Trolling for clients, an attorney would be foolhardy to ignore social media for the same reason – it’s where the clients are.  Hardbound volumes of Martindale-Hubbell have joined the Montgomery Ward catalog and sandwich board man in the Museum of Marketing Antiquities. 

When seeking information — whether sports scores or a new lawyer — the public goes first, if not exclusively, online.  In January, GlobalWebIndex reported that a typical user spends 1.72 hours per day on social media platforms, about 28% of all online activity.  Seventy-three percent of Americans have a social network profile.  The 2014 ABA Legal Technology Survey found 39.4% of attorneys have generated legal business from blogging.  For solo practitioners the number is 60%; for firms of 50-500 lawyers it’s 50%.  Those are numbers too big to ignore.  An attorney who doesn’t have a social media presence in 2015 is 28% invisible.

Underestimating What it Takes to Build a Social Media Presence

While these numbers suggest blogging is an excellent way to build your social media presence, it takes time — a lot of it — over both the short and long haul.  The goal is to place your blog high enough in search engine results so that when a would-be client goes looking for counsel he finds you.  For this to happen content is king.  Simply hanging out an electronic business card that says “Denver Lawyer” won’t get you noticed.

I smile whenever I recall my firm’s first discussion about creating a website in in 1995, the pre- social media era.  My then-partner Paul Lewis, a Joe MacMillan visionary in his own right, described how our website would include John Moye’s entire Secured Transactions and Loan Documentation Manual and Bill Callison’s treatises on LLCs, LLPs and LLLPs.  “Why would anyone do that?” one of our partners asked, alarmed that we were giving away the store.  The answer, then and now, is that simply hanging out an electronic business card that says “Denver Lawyer” won’t do anything to get you noticed.  Paul understood this.  Under Paul’s leadership our content-rich website won the Silver Webbernaut Award in 1995 and the Platinum Award the following year.  More importantly, it attracted clients having legal issues and needs that our website clearly demonstrated we were competent to handle.

This marketing fundamental has not changed.  With more attorneys shouting online to be heard, an attorney hoping clients will beat an electronic path to her blog must identify with surgical precision those issues clients she wants to attract care about most, write authoritatively about them, and lace posts with the terms they are most likely to search.  This may require developing a new and challenging skill: not thinking like a lawyer. 

To be effective blogging must be habitual.  If you don’t enjoy the process — identifying and developing story ideas, writing, editing, and posting — your time is better spent going to lunch; you will hate blogging and fail miserably at it.  Persistence and content, not the latest SEO strategy, are the keys to rising to the top of the search engine results and staying there.

Overestimating the Power of Social Media

For lawyers seeking new clients — which is to say all lawyers — social media is not only important, it is terribly addictive.  The virtual world, however, should not be mistaken for the whole world.  Having a social media presence, not an existence, is the goal.  Lunch still matters.  It’s a human connection that seals the engagement.  Also, if your client exists only online, there’s a high probability you are being scammed.  Beware online clients too eager to overpay large retainers.

Creating Conflicts of Interest Instead of Clients

Real clients make an appointment; persons wanting free legal advice send an e-mail.  Colorado’s Rule of Professional Conduct 1.18 creates a gotcha for lawyers engaging in social media:  the prospective client. 

With certain exceptions, “a person who discusses with a lawyer the possibility of forming a client-lawyer relationship” becomes a client for purposes of confidentiality.  The Comments make clear that prospective client status may be conferred “regardless of how brief the initial conference may be.”  Worse, from the duty of confidentiality imposed by Rule 1.18(b), disqualification, and its evil twin, vicarious disqualification, flow as easily as Märzenbier from an Oktoberfest keg, and with nearly equal potentially debilitating effect.

Rule 1.18 is not inherently unfair, but absent constant vigilance and professional self-control, a casual and even anonymous online “friend” may be converted into a “prospective client” in a few keystrokes.

Don’t Be Chatty

Attorneys may freely engage in real-time chat, as long as no paying legal business results from it.  That’s because Colo. RPC 7.3(a) includes “real-time electronic contact” among its prohibited means of solicitation, unless the “person contacted is a lawyer . . . or has a family, close personal, or prior professional relationship with the lawyer.”  Further, where permitted, every “electronic communication . . .  soliciting professional employment [must] . . . include the words ‘Advertising Material’ . . . at the beginning and ending of any . . . electronic communication,” unless the recipient is one of the exempted parties under Rule 7.3(a).  Bottom line: if you want to chat online, stick to sports.

Online Sleuthing 

Facebook, Twitter, and Instagram are a fabulous source of free discovery – ask any divorce lawyer or prosecutor.  Just remember this rule: don’t be a sneak.  If a party or witness has posted materials for the world to see, lawyers are not required to avert their eyes.  However, woe unto the attorney who attempts to gain access by “friending” someone under false pretenses, or asks another (including a private investigator) to do so.  The ethics book that will be thrown at him will include Rule 8.4(c) (conduct involving dishonesty, fraud, deceit or misrepresentation), 4.1 (truthfulness in statements to others), and 4.4 (respect for the rights of third persons).

Have Fun Out There

The moral is not to avoid social media, even were that possible.  Your electronic second life is fun, and social media is an essential component of client generation and network building.  Just remember that, while it may still be the Wild Wild Web, ethics rules apply, and attorney regulators are online, too.

An abridged version of this blog originally appeared in the 14 September 2015 edition Law Week Colorado.

Do You Promise Not to Tell? – Nondisclosure Agreements for Lawyers

Lately I have noticed more instances of clients asking lawyers to sign nondisclosure agreements (“NDAs”) like this:

Confidential Information

Law Firm shall treat as confidential and not reveal to any third party (including any current or future client) any Confidential Information of Paranoid Partners LLC (“Paranoid”), its affiliated investment advisers or broker-dealers, or any of its current or future subsidiaries, sponsored funds, or other investment products. “Confidential Information” means any and all confidential and proprietary information of Paranoid’s current or proposed business, past, present, or future products or services, marketing plans, business plans, regulatory or other strategies, or any other information that Paranoid identifies as confidential or which by its nature would reasonably be deemed to be confidential, including all communications or documents subject to attorney-client privilege. This confidentiality provision shall not limit or diminish, in any way, any duties owed by Law Firm to Paranoid under any applicable model rules of professional conduct. This confidentiality provision shall survive in perpetuity. Bwahaha!

(“Bwahaha!” added.)

Apart from the usual sins of redundancy and verbosity, why are some (other) lawyers advising clients to request such provisions in attorney engagement agreements?  Even nascent attorney-client relationships – including those never consummated – are protected by the Rules of Professional Conduct.  See, e.g., Colo. RPC 1.6(a) (Confidentiality of Information) and 1.18 (Duties to Prospective Clients).  Further, Rule 1.9(c) (Duties to Former Clients) expressly prohibits “us[ing] information relating to the representation to the disadvantage of [a] former client except as these Rules would permit or require with respect to a client, or when the information has become generally known.”  The NDA above expressly recognizes the existence of “model rules of professional conduct,” so we should presume the lawyers drafting such clauses passed the Multistate Professional Responsibility Examination and are aware of the confidentiality protections the Rule of Professional Conduct already provide.

So what advantage do these clients, or their lawyers, believe is gained by obtaining an express contractual remedy for nondisclosure?  Have they been so scarred or scared by Sarbanes-Oxley, or conditioned by HIPPA and other privacy laws, that they deem the remedy of an attorney’s potential disbarment an inadequate deterrent to disclosure?  In asking its lawyers to sign an NDA is Paranoid Partners being paranoid or prudent?[1]

There is at least one argument to be made for requesting such a provision – Rule 1.6 has exceptions:

A lawyer may reveal information relating to the representation of a client to the extent the lawyer reasonably believes necessary:

(1) to prevent reasonably certain death or substantial bodily harm;

(2) to reveal the client's intention to commit a crime and the information necessary to prevent the crime;

(3) to prevent the client from committing a fraud that is reasonably certain to result in substantial injury to the financial interests or property of another and in furtherance of which the client has used or is using the lawyer's services;

(4) to prevent, mitigate or rectify substantial injury to the financial interests or property of another that is reasonably certain to result or has resulted from the client's commission of a crime or fraud in furtherance of which the client has used the lawyer's services;

    . . . .

(7) to comply with other law or a court order.

  

Colo. RPC 1.6(b) (emphasis added).

The financial whistleblower exceptions of Rule 1.6(b) were a direct response to Sarbanes-Oxley.  In August 2003 the ABA House of Delegates, by a 218-201 vote, amended Rules 1.6 and 1.13 to accommodate the noisy withdrawal and up-the-ladder provisions created by Sarbanes-Oxley, provisions many states had already adopted in their attorney professional codes.[2]   Because the language Rule 1.6 is merely permissive, a confidentiality provision of the kind set out above ostensibly plugs a gaping hole in a client’s security defenses.  But does such a provision provide any real protection?  I doubt it.

 

First, a client seeking such protection must find a lawyer willing to hamstring herself by signing such an agreement.  Rule 1.6(b) is permissive, so there is no obvious legal impediment to an attorney agreeing to its terms.  Still, such a request should, at a minimum, cause any attorney to whom it is proffered to raise at least one eyebrow.

Second, a client seeking counsel’s contractual silence needs be certain that, should push come to shove, the threat of a civil suit for breach of contract will be adequate to gag a lawyer willing to sign it.  This is more problematic.  If ordered to disclose information by a court, will a capitulating counselor really be willing to rot in jail for Bernie Madoff?  Self-interest, if not ethical considerations, weigh heavily against the efficacy of such provisions under these circumstances.

Third, if the reason for proffering or threatening to enforce such a provision is to further a criminal purpose, or to conceal a crime which the lawyer was duped into assisting[3], one hopes that the lawyers advising their clients to seek NDAs from other lawyers are also counseling their clients that the prospect of such an agreement being enforced is slightly less than that of the Colorado Rockies and the CU Buffs winning the World Series and the College Football Playoff in the same year.

Fourth, assuming the client’s lawsuit against the lawyer for breach of the NDA survives a motion to dismiss, just imagine the reaction of a jury empaneled to hear such a case to the plaintiff-client’s opening statement:  

Ladies and gentlemen of the jury, Plaintiff concedes that it engaged Defendant to enlist its unwitting legal assistance in furtherance of committing crimes that were certain to cause substantial injury to the financial interests of widows, orphans, and cripples.  The court will instruct you, however, that you must completely disregard Plaintiff’s confessed criminal intent.  This . . . this . . . lawyer breached a contractual obligation to keep her mouth shut.  As a consequence my client’s evil plan was foiled and its officers are going to jail.  Justice must be done!  Damages must be awarded!

Yeah.  Right.  If the jury does not immediately leap out of the box, set upon the plaintiff’s representative and its lawyer, and lynch them both from the courtroom’s rafters, it is easy to envision the damages award rivaling that of the jury in Dering vs. Uris – the libel action brought by Dr. Wladislaw Dering, one of the butchers of Auschwitz, against Leon Uris for his description of Dering’s atrocities in Exodus (and memorialized in the second television mini-series to air in the United States, QB VII):   One ha'penny – the smallest coin of the realm.  

Lawyer NDA provisions are simply too clever by half.  An honest client has nothing to fear from an honest lawyer – the protections of the Rules of Professional Conduct and the attorney-client privilege are ample fortification against disclosure.  The law of professional malpractice and agency already provide civil damages remedies in the event of breach.  Moreover, lawyers are not predisposed to capriciously jeopardize their professional licenses or fortunes.  On the other hand, a dishonest client should place little or no stock in such contractual provisions as a bulwark against whistleblowing for the reasons noted above.  There is a far greater chance such a provision will hang a dishonest client than save it. 

The presentation of an NDA to an attorney should send red flags soaring, and trigger a full and frank discussion of why the client feels it is necessary, as well as a due diligence investigation of the would-be client before accepting an engagement on such terms.  While it may be the client is simply acting on the advice of other counsel, or because “everyone else is doing it,” such advice and rationale are dubious.  If a client genuinely believes such a provision is necessary to remind an attorney of its existing legal obligations of confidentiality, the client should be interviewing smarter lawyers, or, if the client expects an NDA will effectively gag an ethical attorney, dumber ones.

____________________________________________________

[1] I don’t mean to pick on the financial industry; I have reviewed similar agreements from clients in other, less regulated industries.  However, most of these requests emanate from businesses in the financial industry.

[2] For an exhaustive and fascinating history of the political machinations surrounding the ABA’s reversal of its position regarding Rule 1.6 in the face of Sarbanes-Oxley see Roger C. Cramton, George M. Cohen, and Susan P. Koniak, Legal and Ethical Duties of Lawyers after Sarbanes-Oxley, 49 Vill. L. Rev. 725 (2004).  A searchable version of this article is available on the Boston University Law School website (BU School of Law Working Paper Jan. 12, 2012)

[3] Although the exceptions of Rule 1.6(b)(1)-(3) apply only to disclosures made to prevent a client’s future misconduct, Rule 1.6(b)(4) expressly permits a lawyer to reveal otherwise protected client information “to . . . mitigate or rectify substantial injury to the financial interests or property of another that . . .  has resulted from the client's commission of a crime or fraud in furtherance of which the client has used the lawyer's services.”