Utah Supreme Court approves Rocket Lawyer and other entities to participate in regulatory “sandbox”

Hello everyone and welcome to this Ethics Alert, which will discuss recent approval of Rocket lawyer and other entities to participate in Utah’s pilot regulatory “sandbox program. 

On September 8, 2020, Rocket Lawyer announced that it was one of the first entities approved by the Utah Supreme Court to participate in the regulatory “sandbox” program permitting, inter alia, nontraditional legal service providers.  Rocket Lawyer’s website is here:  https://www.rocketlawyer.com/ 

As I previously blogged here: https://jcorsmeier.wordpress.com/2020/08/18/utah-supreme-court-authorizes-pilot-program-which-inter-alia-permits-non-lawyers-to-own-law-firms-and-share-fees-with-lawyers/, the Utah Supreme Court approved the regulatory “sandbox” pilot program as the primary part of a regulatory reform package which was designed to allow the testing of innovative approaches to serving legal consumers will ultimately improve the public’s access to justice.  The Court’s August 14, 2020 Standing Order is here: http://www.utcourts.gov/utc/rules-approved/wp-content/uploads/sites/4/2020/08/FINAL-Utah-Supreme-Court-Standing-Order-No.-15.pdf   

A total of five entities were approved for participation in the sandbox program.  The other approved applicants were:

  1. LawHQ: A Salt Lake City law firm which plans to offer equity ownership to certain software developers in the firm and a software application called CallerHQ, which is designed to allow consumers to report spam telephone calls, text messages and voicemails. Consumers who sign up may then be included in a mass tort litigation brought by LawHQ against the spammers.
  1. 1Law: An entity which plans to provide no-cost and low-cost legal services to assist clients in completing court documents and also offer related legal advice using chatbots, instant messaging, automated interviews, nonlawyer staff and technology-assisted lawyers. 1Law plans to have more than 50% nonlawyer ownership.
  1. LawPal: An entity which plans to provide a TurboTax-like technology platform to generate legal documents in contested and uncontested divorce and custody cases, eviction cases and debt-related property seizure cases. It expects to feature 50% nonlawyer ownership.
  1. Blue Bee Bankruptcy Law: The sole owner of this law firm states that he will give his paralegal employee a 10% ownership interest in the firm as an incentive to remain with the firm.

The Utah Supreme Court’s Order creating the pilot sandbox program states that participants must demonstrate that the activities and services “do not cause levels of consumer harm above threshold levels established by” the Court’s innovation office.  Successful sandbox participants may also ultimately receive approval to exit the sandbox program and continue practicing the services after the pilot program ends.

After the two-year pilot program period, which began on August 14, 2020, is over, the Utah Supreme Court will evaluate whether the program should continue “based on a review of data collected from those entities and individuals participating in the program.”  If not approved to continue, the program will sunset after the 2 year period.  

As I previously blogged, the Arizona Supreme Court recently approved rule revisions which will permit alternative legal business structures.  The Arizona rule revisions become effective January 1, 2020 and there are no provisions for a regulatory “sandbox program”.  My blog is here:  https://jcorsmeier.wordpress.com/2020/09/02/arizona-becomes-first-u-s-state-to-authorize-non-lawyer-ownership-of-law-firms-and-fee-sharing/

Bottom line:  As I have said before, if this trend continues, this could become the wave of the future in other states and jurisdictions. 

Stay safe and healthy and be careful out there.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

2999 Alt. 19, Suite A

Palm Harbor, Florida

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Joseph Corsmeier about.me/corsmeierethicsblogs

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U.S. Third Circuit appeals court rejects New Jersey’s prohibition of lawyer’s website posts of excerpts of judicial opinions praising his legal work

Hello everyone and welcome to this Ethics Alert which will discuss the Third U.S. Circuit Court of Appeals opinion which reversed a federal district court opinion upholding a New Jersey guideline prohibiting a lawyer from posting judicial opinion excerpts praising his legal work. The opinion is Andrew Dwyer et al v. Cynthia A. Cappell et al, No. 13-3235 (U.S. Third Circuit Court of Appeal August 11, 2014) and the opinion is here: http://www2.ca3.uscourts.gov/opinarch/133235p.pdf
According to the opinion, the lawyer had posted multiple excerpts of unpublished and public judicial opinions related to fee applications in employment discrimination cases brought under the New Jersey Law Against Discrimination on his law firm website. One quote stated: ““The inescapable conclusion is . . . that plaintiffs achieved a spectacular result when the file was in the hands of Mr. Dwyer. . . . Mr. Dwyer was a fierce, if sometimes not disinterested advocate for his clients, and through an offensive and defensive motion practice and through other discovery methods molded the case to the point where it could be successfully resolved.”

A judge whose opinion quotes were posted on the lawyer’s website wrote to the lawyer in April 2008 and asked that the quotes be removed because he did not want his comments to be misconstrued as a blanket endorsement of the lawyer. The lawyer refused to remove any quotes and the New Jersey State Bar Association’s Committee on Attorney Advertising began examining the issue. The Committee and the New Jersey Bar Association ultimately produced Guideline 3, which was approved by the New Jersey Supreme Court in 2012. Guideline 3 stated that an attorney “may not include, on a website or other advertisement, a quotation or excerpt from a court decision (oral or written) about the attorney’s abilities or legal services.” The guideline did permit a lawyer to post the entire text of a judicial opinion on the website or in an advertisement.

The U.S. District Court upheld Guideline 3 in June 2013; however, before the Guideline was to become effective, the lawyer filed a lawsuit in federal court claiming that Guideline 3 violated his First Amendment rights to engage in truthful commercial speech. The district court found against the lawyer and found that the Guideline was a mere disclosure requirement and not a direct restriction on the lawyer’s speech. In making its ruling, the district court relied on the U.S. Supreme Court opinion in Zauderer v. Office of Disciplinary Counsel (1985), which stated that “an advertiser’s rights are adequately protected as long as disclosure requirements are reasonably related to the state’s interest in preventing deception of consumers.”

The Third Circuit Court of Appeals unanimously reversed the district court’s opinion. The opinion confirmed that disclosure requirements receive less scrutiny than actual restrictions on speech and that the New Jersey Guideline had characteristics of both a disclosure requirement and a restriction on speech. The opinion did not address whether the Guideline was a restriction or a prohibition; however, it stated that even under the less restrictive standard of review for disclosure requirements, the Guideline was constitutionally flawed.

The appellate opinion stated that “Guideline 3 does not require disclosing anything that could reasonably remedy conceivable consumer deception stemming from (the lawyer’s) advertisement.” The opinion also listed an example of a disclosure that would be sufficient: “This is an excerpt of a judicial opinion from a specific legal dispute. It is not an endorsement of my abilities.” Since Guideline 3 required a lawyer to post entire judicial opinions, it “effectively precludes advertising with accurate excerpts from judicial opinions on (the lawyer’s) website, it is unduly burdensome.”

“Guideline 3 as applied to (the lawyer’s) accurate quotes from judicial opinions thus violates his First Amendment right to advertise his commercial services. Requiring (the lawyer) to reprint in full on his firm’s website the opinions noted above is not reasonably related to preventing consumer deception. To the extent the excerpts of these opinions could possibly mislead the public, that potential deception is not clarified by Guideline 3. In any event, what is required by the Guideline overly burdens (the lawyer’s) right to advertise. We thus reverse the order of the District Court and remand the case.

Bottom line: This is a significant First Amendment decision related to lawyer advertising which found that New Jersey Guideline 3, which prohibited a lawyer from publishing excerpts of judicial opinions on his website, was an unconstitutional restriction on the lawyer’s commercial speech. The opinion did approve of the use of a disclosure/disclaimer to prevent any consumer confusion related to the opinion excerpts.

Be careful out there.

Disclaimer: this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire
Law Office of Joseph A. Corsmeier, P.A.
2454 McMullen Booth Road, Suite 431
Clearwater, Florida 33759
Office (727) 799-1688
Fax (727) 799-1670
jcorsmeier@jac-law.com
http://www.jac-law.com

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Arizona becomes first U.S. state to authorize non-lawyer ownership of law firms and fee sharing

Hello everyone and welcome to this Ethics Alert, which will discuss the Arizona Supreme Court’s recent implementation of rule revisions which will permit non-lawyers to own law firms and share fees with lawyers, and also makes other significant rule revisions.  The link to the Court’s August 27, 2020 press release explaining the rule revisions is here:  http://www.azcourts.gov/Portals/201/Press%20Releases/2020Releases/082720RulesAgenda.pdf

When the rule revisions become effective on January 1, 2021, Arizona will become the first U.S. state to implement revisions to its Bar rules permitting non-lawyer ownership of law firms and permitting non-lawyers to share fees with lawyers.

According to the press release, the rule revisions are intended to promote innovation and make legal services more affordable and still protecting the public.

“The court’s goal is to improve access to justice and to encourage innovation in the delivery of legal services. The work of the task force adopted by the court will make it possible for more people to access affordable legal services and for more individuals and families to get legal advice and help.”  “These new rules will promote business innovation in providing legal services at affordable prices.”

The press release states that, after the revised rules become effective, the court will adopt a new licensure process to allow non-lawyers, called “legal paraprofessionals,” to provide limited legal services to the public, including representing clients in court proceedings.  The revisions also eliminate rule 5.4, which prohibits non-lawyers from having an ownership interest in a law firm; however, these “alternative business structures” will be required to obtain licenses.

The Arizona Supreme Court also made revisions to the Bar rules regulating lawyer advertising “most of which align with recent changes made to the American Bar Association’s Model Rules.”

The press release states that more information about the revisions is on the Court’s Access to Legal Services webpage at https://www.azcourts.gov/accesstolegalservices/

Bottom line:  The Arizona Supreme Court’s decision to revise the Bar rules continues the growing trend toward permitting non-lawyers and non-traditional entities to become involved in legal practice and the legal process.

As I previously blogged here: https://jcorsmeier.wordpress.com/2020/08/18/utah-supreme-court-authorizes-pilot-program-which-inter-alia-permits-non-lawyers-to-own-law-firms-and-share-fees-with-lawyers/, the Utah Supreme Court also recently approved a two-year “regulatory sandbox” pilot program permitting non-lawyers to experiment with different methods of delivering legal services outside of the existing regulatory framework.  Washington, D.C. and other states are also considering potential revisions related to the restrictions on non-lawyer involvement in the practice of law.

Stay safe and healthy and be careful out there.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

2999 Alt. 19, Suite A

Palm Harbor, Florida

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

 

Joseph Corsmeier

about.me/corsmeierethicsblogs

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Utah Supreme Court authorizes pilot program which, inter alia, permits non-lawyers to own law firms and share fees with lawyers

Hello everyone and welcome to this Ethics Alert, which will discuss recent Utah Supreme Court approval of a pilot program which would permit non-lawyers to own law firms, share fees with lawyers, and makes other significant revisions.  The link to the Utah Supreme Court’s Standing Order No. 15 approving the pilot program is here:  http://www.utcourts.gov/utc/rules-approved/wp-content/uploads/sites/4/2020/08/FINAL-Utah-Supreme-Court-Standing-Order-No.-15.pdf and the Utah Bar Rule revisions related to the pilot program are here: http://www.utcourts.gov/utc/rules-approved/2020/08/13/supreme-court-regulatory-reform-effective-august-14-2020/.  The Standing Order and Rule revisions were effective August 14, 2020 and will sunset in two years unless there is a further order of the Court.

The details of the “pilot legal regulatory sandbox” are set forth in the Supreme Court’s Standing Order 15 and in the revisions to the Utah Rules of Professional Conduct.  The program creates a “regulatory sandbox” for non-traditional legal providers and services, including entities with non-lawyer investment or ownership and also creates an Office of Legal Services Innovation, which will assess the sandbox applicants and make recommendations to the Court and also supervise the applicants who are authorized by the Court to offer legal services.

According to the Utah Supreme Court’s August 13, 2020 press release:

“These changes allow individuals and entities to explore creative ways to safely allow lawyers and non-lawyers to practice law and to reduce constraints on how lawyers market and promote their services. In order to assess whether the changes are working as intended, the Supreme Court has authorized the core portions of these changes for a two-year period. At the conclusion of that time, the Supreme Court will carefully evaluate whether the program should continue. The evaluation will be based on a review of data collected from those entities and individuals participating in the program. The Supreme Court’s willingness to experiment with innovation is an important step, especially now, because the need for more affordable legal help has reached crisis levels as a result of the COVID-19 pandemic and its economic fallout.”

According to the press release, after the 90 day period which was allotted for input, the Supreme Court made a number of changes to the initial proposals. These changes “included: (1) increasing transparency into the application and approval process, (2) adding clearer channels for complaints regarding the new legal services, (3) severely restricting any roles for disbarred or suspended lawyers and those with certain felony convictions, (4) more explicitly articulating the program’s access-to-justice goals, (5) and more clearly delineating that the program will sunset in two years absent further order of the Supreme Court.”

The Utah Supreme Court’s press release is here: https://www.utcourts.gov/utc/news/2020/08/13/to-tackle-the-unmet-legal-needs-crisis-utah-supreme-court-unanimously-endorses-a-pilot-program-to-assess-changes-to-the-governance-of-the-practice-of-law/

Bottom line:  If the Utah Supreme Court’s pilot program is made permanent, it will radically change the practice of law in Utah and may also become the wave of the future in other states and jurisdictions.

Stay safe and healthy and be careful out there.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

2999 Alt. 19, Suite A

Palm Harbor, Florida

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

 

Joseph Corsmeier

about.me/corsmeierethicsblogs

4 Comments

Filed under 2019 Utah pilot program permitting non-traditional legal services, including non-lawyer firm ownership, 2020 Utah Supreme Court Order approving sandbox and non- lawyer practice and ownership, Attorney Ethics, fee sharing, Fee sharing with non-lawyer owned firms, joe corsmeier, Joseph Corsmeier, Lawyer ethics, lawyer fee splitting, Non-lawyer ownership, Non-lawyer ownership of law firms, non-lawyer ownership of law firms and fee splitting, Non-lawyer practice, Non-lawyer practice of law, Non-lawyer practicing law, Uncategorized, Utah Supreme Court regulatory sandbox

Pennsylvania lawyer suspended after paying clients over $500,000 from own funds for false case results

Hello everyone and welcome to this Ethics Alert which will discuss the recent Pennsylvania Supreme Court suspension of a Pennsylvania lawyer for 4 years retroactively for falsely telling four clients that he had resolved their cases and then paying them over $500,000.00 from his own personal funds.  The lawyer, Keith Michael McWhirk, was suspended in a July 31, 2020 Order, which is here: http://www.pacourts.us/assets/opinions/DisciplinaryBoard/out/28DB2016-McWhirk.pdf

The lawyer agreed to a four-year suspension retroactive to Feb. 25, 2016, the date that he was previously temporarily suspended from practice. The SC Order is here:  http://www.pacourts.us/assets/opinions/Supreme/out/2247dd3%20-%201025598236209037.pdf#search=%22McWhirk%22

According to the Joint Petition in Support of Discipline on Consent, the lawyer was a named partner at a firm called Mandracchia & McWhirk in December 2015 when he lost consciousness and collapsed at a work-related event. He was hospitalized for five days and required surgery for injuries that included facial fractures.  Other lawyers who were trying to cover the lawyers files “began to discover mounting evidence of serious ethical misconduct, according to the joint petition.  The joint petition is here:  http://www.pacourts.us/assets/opinions/DisciplinaryBoard/out/28DB2016-McWhirk.pdf

The lawyer was terminated by the law firm and self-reported his misconduct in February 2016.  He provided a list of 11 client matters in which he misrepresented the status of cases to clients. In seven additional cases, the lawyer falsely advised clients that he had filed complaints, motions and responsive pleadings when he had actually not filed them.

In four cases, the lawyer used his personal funds to pay clients after telling them that he had received money from settlements, awards and legal claims. The amounts paid were $10,000.00, $31,000.00, $69,500.00 and $424,000.00.  The client who received the $424,000.00 payment was a commercial bank seeking to foreclose on a mortgage and the lawyer misrepresented that he had filed a foreclosure action and also misrepresented that a sheriff’s sale had taken place.  The other clients who received personal funds from the lawyer were two other mortgage foreclosure clients and a plaintiff who sued an auto restoration company.

The joint petition in support of discipline set forth mitigating circumstances, including that the lawyer “self-reported his misconduct and was forthright and specific”, cooperated with the Pennsylvania Office of Disciplinary Counsel, making admissions that would not have been discovered without his assistance, and “exhibited deep remorse for his misconduct.”

Before his temporary suspension in 2016, the lawyer had practiced law for more than 16 years with no prior discipline and he has been diagnosed with anxiety and depressed mood and he is receiving treatment.  The lawyer claimed that the disorder was a causal factor in several elements of his misconduct, as well as a pattern of avoidance that the lawyer learned during childhood.

According to the joint petition, the lawyer “did not mishandle or misuse funds entrusted to him by any client or from the firm but instead utilized his own funds for the ultimate benefit of clients.”  “Importantly, no misrepresentations were made to any tribunal.”  The lawyer fabricated a court order and a sheriff’s distribution sheet to support his misrepresentations,; however, they were provided only to clients and not used to the lawyer’s advantage.

Bottom line:  This is a bizarre case involving a lawyer who engaged in a “pattern of avoidance”, fabricated court documents, and paid clients over $500,000.00 of his own money to cover up his misconduct.

Be careful out there.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

2999 Alt. 19, Suite A

Palm Harbor, Florida 34683

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Joseph Corsmeier

about.me/corsmeierethicsblogs

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Pennsylvania Bar Association publishes ethics opinion providing guidance in preserving confidentiality while working from home during the pandemic

Hello everyone and welcome to this Ethics Alert which will discuss the recently published Pennsylvania Bar Association Formal Opinion 2020-300, which provides guidance to lawyers working from home during the COVID-19 pandemic.  The formal opinion is here:  https://www.pabar.org/members/catalogs/Ethics%20Opinions/formal/f2020-300.pdf

As we all are acutely aware, the COVID-19 pandemic has forced many lawyers to work from home and also rely even more on electronic and digital devices and methods to communicate and practice law.

The opinion addresses multiple issues related to remote practice, including the duty of technological competence when handling sensitive client confidential information in a home/remote environment and provides guidelines for lawyers and their employees on how to comply with their obligation to comply with the Bar rules and preserve client confidentiality.

The opinion states that it is intended to provide global guidance to lawyers working from home, not only during the pandemic, but also for those who will continue to work remotely after there is a return to “normal.”

The opinion states as follows:

At a minimum, when working remotely, attorneys and their staff have an obligation under the Rules of Professional Conduct to take reasonable precautions to assure that:

All communications, including telephone calls, text messages, email, and video conferencing are conducted in a manner that minimizes the risk of inadvertent disclosure of confidential information;

Information transmitted through the Internet is done in a manner that ensures the confidentiality of client communications and other sensitive data;

Their remote workspaces are designed to prevent the disclosure of confidential information in both paper and electronic form;

Proper procedures are used to secure and backup confidential data stored on electronic devices and in the cloud;

Any remotely working staff are educated about and have the resources to make their work compliant with the Rules of Professional Conduct; and,

Appropriate forms of data security are used.

Bottom line:  The pandemic has greatly accelerated the use of digital platforms and methods of communication in providing legal services, which creates challenges for lawyers.  Lawyers must meet these challenges by taking steps to comply with the evolving ethical standards and rules related to technology, including preserving client confidentiality.

Be careful out there.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

2999 Alt. 19, Suite A

Palm Harbor, Florida 34683

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Joseph Corsmeier

about.me/corsmeierethicsblogs

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Filed under Attorney/client confidentiality, Attorney/client privilege and confidentiality, Confidentiality, Confidentiality and privilege, Lawyer communication over internet- confidentiality, lawyer confidentiality, Lawyer confidentiality during COVID-19 pandemic, Lawyer confidentiality while working remotely and from home, Pennsylvania Ethics opinion confidentiality during pandemic, Uncategorized

The ethical and professional risks and hazards of sending e-mails and tips on how to avoid them

Hello everyone and welcome to this Ethics Alert which will discuss the ethical risks and dangers of e-mails and provide tips on how to avoid them.

Electronic mail has certainly become the primary form of communication for most lawyers (even more than texting and Zoom); however, lawyers must always remember that their e-mails could be read not only by the intended recipients but also by third parties.  A lawyer’s e-mails can (and do) also become potential evidence in Bar discipline hearings and malpractice lawsuits and lawyers should not assume that communications with clients, opposing counsel, and others or even within their own law firm are protected from disclosure.

Errors made by lawyers in e-mails include inadvertently sending an e-mail with confidential information to the wrong recipient, copying the client on an e-mail to opposing counsel and receiving a reply all response, or otherwise using words in an e-mail which will negatively impact a client matter (or the lawyer’s reputation).  E-mails are also available in electronic form for all time.

With that in mind, the following are some tips regarding lawyer e-mail communications:

Before sending an e-mail, consider communicating by telephone or in person, which may be more effective than using e-mail.

Do not respond immediately to an e-mail that upsets you and/or that you believe attacks you or your client.  Always wait to calm down and compose your thoughts and also consider having a colleague in your law firm review the e-mail before sending it.

If you ultimately decide to send an e-mail, be sure to carefully review it before pressing “send.” Use the spell checker and complete the “to” and “cc” lines after you finalize the e-mail.

Always use professional language and do not try to make jokes, which may be misinterpreted by the recipient and/or interpreted differently in an investigation or legal proceeding.

Avoid the use of all capital letters (which may be interpreted as yelling), excessive exclamation points, abbreviations, and emoticons, which also may be wrongly interpreted by the recipient and/or in another context.

Before sending an e-mail, always confirm that the e-mail is addressed to the right recipient (and correctly copied to others) before sending it, particularly if contains confidential or sensitive information and the autocomplete feature can complete the wrong e-mail address.  Better yet, just turn off the autocomplete function.

Be careful using “reply all.”  E-mails that are meant for only one recipient may be sent to all recipients and potentially disclose information that should not have been shared.

Be careful using the “bcc” (blind copy) function and use it sparingly and judiciously.  A “bcc” recipient (including the client) can and sometimes will hit “reply all,” letting everyone know that he or she was blind copied and also potentially making comments that are embarrassing or inappropriate.  New York Bar Association Ethics Opinion 1076 (December 8, 2015) discusses the perils of copying the client and others and advises lawyers not to “bcc” clients on e-mails with opposing counsel.

If you are attaching a document, always confirm that it is the correct document. Sending the wrong document with confidential information in an attachment can have serious consequences.

Finally, when communicating with clients by e-mail, the lawyer should take steps to insure that confidential and privileged information remains within the attorney-client relationship, which can include specifically advising clients not to forward e-mails or other documents to third parties.

Bottom line:  E-mails are certainly a part of our daily lives, both personally and as lawyers.  These are some tips to avoid the professional risks involved in sending e-mails.

Be careful out there.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

2999 Alt. 19, Suite A

Palm Harbor, Florida 34683

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Joseph Corsmeier

about.me/corsmeierethicsblogs

 

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Law firm sued over $3.1 million wire transfer sent to a scammer’s fraudulent bank account

Hello everyone and welcome to this Ethics Alert which will discuss the lawsuit that was filed against, inter alia, Holland & Knight, alleging that it failed to prevent the transfer of $3.1 million to a fraudulent account in Hong Kong created by a scammer.  The lawsuit was initially filed in Utah state court in June 2020 and was removed to federal court on July 21, 2020.  The case is styled Sorenson Impact Foundation, and James Lee Sorenson Family Foundation, v. Continental Stock Transfer & Trust, Tassel Patent, Inc., and Holland & Knight, LLP.  The lawsuit filed in the Utah State Court is here: https://pdfserver.amlaw.com/legalradar/35418861_complaint.pdf

The lawsuit alleges breach of fiduciary duty and breach of contract and, factually, that Holland & Knight failed to investigate after the individual who perpetrated the scam intercepted e-mails regarding a stock sale by 2 trusts, posed as the seller, and instructed the law firm to wire $3.1 million from the stock buyer to another, but similarly named, account.  According to the foundation’s website, the plaintiffs were two foundations selling stock.  Sorenson Impact Foundation invests in startups that serve underserved communities and the James Lee Sorenson Family Foundation is a nonprofit trust located in Utah.

According to the lawsuit, Holland & Knight sent an e-mail addressed to the stock sellers requesting verification of the new account; however, it was intercepted by the scammer and was never received by the sellers. The scammer then sent Holland & Knight new documents that included information on a new bank account, held under a slightly different name, HongKong Wemakos Furniture Trading Co. Limited.

The lawsuit claims that both trusts had relied upon Holland & Knight to document the stock acquisition and carry out a merger plan related to the stock sale.  The lawsuit further claims Holland & Knight and the transfer agent, Continental Stock Transfer & Trust, Tassel Patent, Inc., the second defendant, knew or should have known that the accounts were not legitimate because of inconsistencies in the documents. The lawsuit also alleges that the defendants should have contact the stock sellers to verify the e-mails and should have been aware that international wire transfers to China have a heightened risk of being fraudulent.

According to the ABA Journal (which posted the PDF of the lawsuit): Holland & Knight provided the following statement: “Holland & Knight’s information technology system was not compromised in any way. The plaintiff was not a client, and the firm acted on wiring instructions received from the plaintiff’s email system by providing the instructions to the paying agent.”

Bottom line:  We will see how this particular lawsuit plays out; however, as I have said many times before, lawyers must be very aware of the potential for scammers to perpetuate this type of fraud and be vigilant in attempting to prevent this fraud from occurring.  In this situation, a personal call to the client with the client (or its representative) confirming the wire transfer details may or most likely would have prevented this fraud from occurring.

Be careful out there.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

2999 Alt. 19, Suite A

Palm Harbor, Florida 34683

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Joseph Corsmeier

about.me/corsmeierethicsblogs

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Filed under joe corsmeier, Joseph Corsmeier, Lawsuit alleging law firm liability for wire transfer scam, Lawyer victim of wire transfer scams, Uncategorized

Florida Bar UPL Committee issues proposed opinion stating that out-of-state lawyer may practice federal law remotely from Florida home   

via Florida Bar UPL Committee issues proposed opinion stating that out-of-state lawyer may practice federal law remotely from Florida home   

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07/23/2020 · 4:57 PM

U.S. Third Circuit appeals court rejects New Jersey’s prohibition of lawyer’s website posts of excerpts of judicial opinions praising his legal work

via U.S. Third Circuit appeals court rejects New Jersey’s prohibition of lawyer’s website posts of excerpts of judicial opinions praising his legal work

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07/23/2020 · 4:55 PM

Florida Bar UPL Committee issues proposed opinion stating that out-of-state lawyer may practice federal law remotely from Florida home   

Hello everyone and welcome to this Ethics Alert which will discuss the Proposed Advisory Opinion issued by the Florida Bar’s Standing Committee on the Unlicensed Practice of Law stating that an out-of-state lawyer may practice federal law remotely from his Florida home.  Proposed UPL Advisory Opinion FAO #201904 is here: https://www-media.floridabar.org/uploads/2020/07/Complete-FAO-2019-4-Opinion-1.pdf

The proposed advisory opinion states that an out-of-state licensed attorney who is working remotely on federal intellectual property rights matters (and not Florida law) from his or her Florida home for an out-of-state law firm and no public presence or profile in Florida as an attorney would not be engaging in the unlicensed practice of law.  The advisory opinion will be filed with the Florida Supreme Court on August 17, 2020.

The opinion states:

In light of the current COVID-19 pandemic, the Standing Committee finds the written testimony of Florida-licensed attorney, Salomé J. Zikakis, to be particularly persuasive:

I believe the future, if not the present, will involve more and more attorneys and other professionals working remotely, whether from second homes or a primary residence. Technology has enabled this to occur, and this flexibility can contribute to an improved work/life balance. It is not a practice to discourage.

There are areas of the law that do not require being physically present, whether in a courtroom or a law office. Using the attorney’s physical presence in Florida as the definitive criteria [sic] is inappropriate. So long as the attorney is not practicing Florida law, is not advertising that he practices Florida law, and creates no public presence or profile as a Florida attorney, then there is no UPL simply because the attorney is physically located in Florida. There is no harm to the public. These facts do not and should not constitute UPL in Florida.

The opinion concludes:

It is the opinion of the Standing Committee that the Petitioner who simply establishes a residence in Florida and continues to provide legal work to out-of-state clients from his private Florida residence under the circumstances described in this request does not establish a regular presence in Florida for the practice of law. Consequently, it is the opinion of the Standing Committee that it would not be the unlicensed practice of law for Petitioner, a Florida domiciliary employed by a New Jersey law firm (having no place of business or office in Florida), to work remotely from his Florida home solely on matters that concern federal intellectual property rights (and not Florida law) and without having or creating a public presence or profile in Florida as an attorney.

The Florida Bar’s notice of filing the proposed advisory opinion states:

The bar will file the proposed opinion with the Supreme Court of Florida on or about August 17, 2020. Pursuant to R. Regulating Fla. Bar 10-9.1(g)(3), “within 30 days of the filing of the proposed advisory opinion, the petitioner and any other interested party may file a brief or memorandum in response to the proposed advisory opinion, copies of which must be served on the committee at the Florida Bar’s headquarters address in Tallahassee. The committee may file a responsive brief or memorandum within 20 days of service of the initial brief or memorandum. The petitioner, and other interested persons, may file a reply brief within 10 days of service of the responsive brief or memorandum. The court may permit reasonable extension of these time periods. Oral argument will be allowed at the court’s discretion. Filing, service, and oral argument will be governed by the Florida Rules of Appellate Procedure.”

Bottom line:  If the Florida Supreme Court approves the proposed advisory opinion and issues a formal opinion, it will clarify that out of state lawyers with no place of business in Florida and without a public presence or profile in Florida as an attorney can practice federal law (and not Florida law) remotely from a Florida residence.

I will continue to follow this issue and keep you advised.  Be careful out there.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

29605 U.S. Highway 19 N. Suite 150

Clearwater, Florida 33761

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Joseph Corsmeier

about.me/corsmeierethicsblogs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Filed under Florida Bar, Florida Bar advisory opinion- out of state remote practice in federal matters, Florida Bar Rules, Florida Supreme Court, joe corsmeier, Joseph Corsmeier, Lawyer unlicensed practice of law, Uncategorized, Unlicensed practice of law, UPL remote practice