Monthly Archives: April 2016

ABA Formal Opinion 475 addresses when lawyers from different law firms are permitted to share a referral fee

Hello and welcome to this Ethics Alert blog which will discuss the recent American Bar Association Formal ethics Opinion which addresses when lawyers may share a fee in a referral arrangement.  The opinion is ABA Formal Ethics Opinion 475 and was issued on April 21, 2016.  The formal opinion is here: http://www.abajournal.com/files/FO_474.pdf

Under ABA Model Rule 1.5(3) (and the Bar Rules of most jurisdictions), lawyers may refer cases to lawyers in other firms and receive a fee as long as the referring lawyer performs legal services or assumes joint responsibility for the case. Comment 7 to Model Rule 1.5 explains that these arrangements most often occur between a referring lawyer and a trial lawyer.  ABA Formal Ethics Opinion 474 discusses the propriety of referral fees between lawyers, explains that clients must consent in writing to such arrangements, and provides examples of when a lawyer does and does not have a conflict of interest.

The opinion notes that state rules related to referral fees vary widely.  Some states only require client consent and a total reasonable fee and some states prohibit referral fees altogether.  Other states (including Florida) require that the referring lawyer either perform legal services of assume joint responsibility for the case (which would include potential legal malpractice liability) and limit the amount of the fee without court approval.

The client must consent to the referral arrangement and be fully informed of the agreement regarding the division of fees before or within a reasonable time after the representation begins.  A lawyer cannot be involved in the case (or receive a referral fee) if there is a conflict of interest unless the lawyer obtains a waiver which meets the requirements of ABA Model Rule 1.7(b), which includes the requirement that each affected client give informed consent in writing (if the conflict is waivable).  A lawyer cannot perform legal services or assume responsibility for the case, however, if he or she has a conflict of interest.

The opinion also states that “(t)he agreement must describe in sufficient detail the division of the fee between the lawyers including the share each lawyer will receive.”  In addition, a referral agreement should not be entered into toward the end of the attorney-client relationship but must be disclosed and agreed to by the client “either before or within a reasonable time after commencing the representation.”

Bottom line:  Lawyers should be aware that, although most jurisdictions (including Florida) permit referral fees, the Bar rules typically impose the requirement that the client provide informed consent in writing to the referral fee and the fee is also subject to limitations in the amount without court approval (25% in Florida without court approval).  In addition, if a lawyer is unable to represent a client outright because of a conflict of interest that is not waived or waivable, the lawyer will not be able to accept a referral fee since, in Florida and most jurisdictions, the referring lawyer must either perform legal services or assume joint responsibility for the matter (which includes potential legal malpractice liability).  Lawyers should consult the Bar Rules in his or her jurisdiction before participating in a referral fee.

Be careful out there.

Disclaimer:  this e-mail is not an advertisement and does not contain any legal advice 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

www.jac-law.com

 

 

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New Jersey Supreme Court opinion holds that lawyers accused of improper Facebook access can be charged with ethics violations

 

Hello and welcome to this Ethics Alert blog which will discuss the recent Supreme Court of New Jersey opinion which held that lawyers who allegedly engaged in improper conduct related to access of an opposing party’s Facebook page can be charged with disciplinary rule violations.  The disciplinary matter is John J. Robertelli v. The New Jersey Office of Attorney Ethics (A-62-14) (075584) (New Jersey Supreme Court 4/19/16).  The disciplinary opinion is here: http://www.judiciary.state.nj.us/opinions/supreme/A6214JohnRobNJ.pdf

According to the opinion, in the underlying matter, the plaintiff sued Bergen County New Jersey related to injuries that he allegedly sustained when a police car struck him in 2007.  The two lawyers represented the plaintiff and:

“(i)n order to obtain information about Hernandez, plaintiffs directed a paralegal employed by the firm to search the internet. Among other sources, she accessed Hernandez’s Facebook page. Initially, the page was open to the public. At a later point, the privacy settings on the account were changed to limit access to Facebook users who were Hernandez’s “friends.” The OAE contends that plaintiffs directed the paralegal to access and continue to monitor the non-public pages of Hernandez’s Facebook account.  She therefore submitted a “friend request” to Hernandez, without revealing that she worked for the law firm representing defendants or that she was investigating him in connection with the lawsuit. Hernandez accepted the friend request, and the paralegal was able to obtain information from the non-public pages of his Facebook account.

The opinion states that the plaintiff learned of the alleged misconduct when the lawyers “sought to add the paralegal as a trial witness and disclosed printouts” from the plaintiff’s Facebook page.  The opinion did not address whether the two lawyers violated any ethics rules or should face sanctions, but whether the New Jersey Office of Attorney Ethics (OAE) could prosecute the lawyers for the alleged misconduct after a regional disciplinary committee found that the lawyers’ actions, even if proven, did not constitute unethical conduct and dismissed the matters.

The OAE disagreed with the disciplinary committee and filed a disciplinary complaint with the Supreme Court against the lawyers.  The complaints alleged, inter alia, that the two lawyers communicated with a represented party without consent of the party’s lawyer and engaged in conduct involving dishonesty, fraud, deceit or misrepresentation.  The two lawyers argued that they acted in good faith and had not committed any unethical conduct. They also stated that they were “unfamiliar with the different privacy settings on Facebook.

The opinion noted the unique nature of this attorney disciplinary matter and stated that it involves a “novel ethical issue” and “no reported case law in our State addresses the sort of conduct alleged.”  The court unanimously held:

“Consistent with the broad authority that the Rules of Court grant the Director and the important goals of the disciplinary process, the Director has authority to review a grievance after a DEC Secretary has declined to docket the grievance. The OAE may therefore proceed to prosecute plaintiffs’ alleged misconduct.”

Bottom line:  Lawyers beware: although this issue has not previously been addressed by the New Jersey Supreme Court (or the Florida Supreme Court), the Florida Bar Rules (and the Bar disciplinary rules of most, if not all jurisdictions, including New Jersey), prohibit a lawyer from communicating with a represented person without the consent of that person’s lawyer.  Florida Bar Rule 4-4.2(a) prohibits lawyers from communicating “about the subject of the representation with a person the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the consent of the other lawyer.”  The Rule is here:  Florida Bar Rule 4-4.2.  This rule would appear to prohibit a lawyer (or the lawyer’s agent) from accessing an opposing party’s Facebook (or other social media) page by sending a “friend” or other request and obtaining information that has been made private on that person’s settings.

Be careful out there.

If you have any questions about this Ethics Alert or need assistance, analysis, and guidance regarding these or any other ethics, risk management, or other issues, please do not hesitate to contact me.

Disclaimer:  this e-mail is not an advertisement and does not contain any legal advice 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

www.jac-law.com

 

 

 

 

 

 

 

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Missouri Supreme Court suspends lawyer who used payroll document and opposing counsel’s written direct exam questions from e-mails hacked by client

 

Hello and welcome to this Ethics Alert update blog which will discuss the disciplinary case against a Missouri lawyer who failed to disclose payroll document and direct examination questions of opposing counsel which were obtained by his client/husband by hacking the wife’s e-mail account, used them at a settlement conference, and planned to use them at a trial+.  The disciplinary case is In Re: Joel B. Eisenstein, No. SC95331 (Missouri SC 4/5/16) and the opinion is here: http://www.courts.mo.gov/file.jsp?id=99378.  My previous blog on this case is here:  https://jcorsmeier.wordpress.com/2016/02/11/missouri-lawyer-alleged-to-have-used-payroll-document-and-opposing-counsels-written-direct-exam-questions-from-e-mails-hacked-by-client/.

According to the disciplinary opinion, the lawyer was representing the husband in a dissolution matter.  The husband hacked the wife’s e-mail account and obtained her payroll documents and a list of direct examination questions prepared by the wife’s lawyer for the upcoming trial.  The husband gave the lawyer the payroll document in November 2013 and he used the payroll information in the document during a mediation/settlement conference before the trial.

During the trial, the lawyer provided documents to the opposing counsel which included a list of the direct examination questions which the opposing counsel had prepared and sent to her client via e-mail.  The opposing counsel asked the lawyer why he had the list of questions and he told her that there were some leading questions and he planned to object to them.

During a hearing that followed on the issue, the lawyer stated that his paralegal had erroneously included the questions in the stack of exhibits and claimed that he was joking when he made the remark about the leading questions to opposing counsel.  He admitted that he had received the documents from his client and failed to disclose them to opposing counsel.  The lawyer later sent opposing counsel an e-mail stating: “Rumor has it that you are quite the ‘gossip’ regarding our little spat in court. Be careful what you say. I’m not someone you really want to make a lifelong enemy of, even though you are off to a pretty good start. Joel’”.

According to the opinion, the lawyer violated Missouri Bar rules by failing to promptly disclose to opposing counsel that he had received the information/documents from his client and by sending the threatening e-mail to opposing counsel, which was prejudicial to the administration of justice.  According to media reports, the lawyer is 70 years old, and the opinion set out the lawyer’s prior disciplinary record:

Mr. Eisenstein’s license has been disciplined on five prior occasions. In 1991 and again in 1999, Mr. Eisenstein was admonished for violating Rule 4-3.5(b) by engaging in ex parte communications with the judge. In 1997, this Court suspended Mr. Eisenstein after he  pleaded guilty to a federal misdemeanor for willfully failing to file an income tax return. In 2001, Mr. Eisenstein was admonished for violating Rule 4-8.1(b) by failing to respond to the OCDC’s request for information regarding an ethics complaint. Finally, in 2004, Mr. Eisenstein was admonished for violating Rule 4-3.3(d) for failing to inform the court of material facts relevant to a pending issue.

The opinion of the majority suspended the lawyer indefinitely and for a minimum of 6 months with reinstatement conditioned upon the lawyer meeting the requirements for readmission.  Two justices dissented and said that the lawyer should be suspended indefinitely and for a minimum of 12 months.  The dissenting opinion stated it was inappropriate for the lawyer to solicit the bar and judiciary to influence the state supreme court in the case and “(o)ne of these solicitations took the form of an e-mail titled ‘I’m too old for this xxxx!!’ (Expletive deleted.)” The e-mail from the lawyer included what he claimed was a “complete history” of the case which the dissent stated “varies greatly from the facts” found by the disciplinary hearing panel.

Bottom line:   As I stated in my earlier blog, this was very serious misconduct and the opinion makes it clear that the lawyer knew that the documents were obtained without the wife’s permission and did not advise opposing counsel.  Compounding the misconduct, the lawyer used the improperly obtained payroll document to his advantage  at a mediation/settlement conference and may also have been planning to use the direct examination questions to his advantage without opposing counsel’s knowledge until the paralegal included the document with the copies of exhibits by mistake.  The lawyer also sent an e-mail threatening the opposing attorney if she pursued the matter and tried to improperly influence the court.   The sanction may have been more severe in a different jurisdiction.

Be careful out there…and of course, do not do this.

Disclaimer:  this e-mail is not an advertisement and does not contain any legal advice 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

www.jac-law.com

 

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Oklahoma Supreme Court publicly censures lawyer who had been permanently suspended by bankruptcy court for disobeying order

Hello and welcome to this Ethics Alert blog which will discuss recent Oklahoma Supreme Court opinion censuring a lawyer who had been permanently suspended from practicing before the bankruptcy court for disobeying a bankruptcy judge’s order.  The case is State ex rel. Oklahoma Bar Association v. Oliver, case number Case Number: SCBD-6268 (Oklahoma Supreme Court, March 29, 2016).  The disciplinary opinion is here:  http://www.oscn.net/applications/oscn/DeliverDocument.asp?CiteID=477506

According to the opinion, the lawyer was suspended for 30 days by a bankruptcy judge in the Western District of Oklahoma on October 29, 2014, he was reinstated on December 1, 2014, and he was suspended again for 60 days on January 14, 2015.

In a show cause hearing on May 6, 2015, the bankruptcy judge told the lawyer that he had errors in nine documents that she had assigned for him to complete and required that he show cause as to why he should not be permanently suspended from practicing in that court. The lawyer stated that he had an attorney friend who would be willing to assist him with his filings.  The judge told the lawyer that he had 30 days to have a bankruptcy attorney who was well-versed in the local bankruptcy rules and guidelines to assist him and file a document confirming that attorney’s assistance. The judge also required the lawyer to resubmit the documents without any substantive or typographical errors.

The judge issued an order on May 7, 2015 confirming her instructions at the show cause hearing. The lawyer was required to refile the nine documents and, “(i)n doing so, (the lawyer) may not seek or obtain assistance from this Court’s law clerk, the staff of the Court Clerk’s office or any other person.”  The order also confirmed that the lawyer was required to file a document under oath from a bankruptcy attorney who was “well versed in the Local Rules and Guidelines of the court and the Federal Rules of Bankruptcy Procedure” and agreeing to assist in the preparation and filing of documents with the court.

On June 15, 2015, the judge permanently suspended the lawyer from practicing in the court after concluding that he had disobeyed her order by contacting a bankruptcy attorney who was admitted in that court and paying him $1,000.00 to prepare and provide the nine documents that she had required in the show cause order.

The bankruptcy attorney testified at the disciplinary hearing that the lawyer had only asked him to review the nine documents that he had already completed and that the $1,000.00 was for the attorney to continue to help the lawyer in his bankruptcy practice. The attorney submitted the agreement which stated that part of the $1,000.00 was to be credited to future months, and provided the amounts of future payment.  He also testified that he had contacted the clerk to obtain guidance on the court’s requirements and he not been asked to prepare the documents for the lawyer nor had he written them.  The opinion stated that the evidence did not support any discipline related to that issue.

The Bar trial panel recommended that the lawyer be publicly reprimanded for failing to provide notice to the Oklahoma Bar regarding his bankruptcy court suspensions. The panel also found that the lawyer did not deliberately conceal his suspensions and that he had admitted that his oversight resulted from his ignorance of the rule.  The lawyer had notified his clients of the January 14, 2015 sixty day suspension on April 21, 2015 and he admitted that he should have provided more timely notice of his suspensions to his clients.

The Bar prosecutor’s office recommended that the lawyer’s discipline be in the range of a public censure to a 6 month suspension.  After hearing the mitigating evidence and the witnesses, the trial panel recommended that the lawyer receive a public censure and found that “(t)here is no evidence of a deliberate effort at concealment.”  The panel also noted that the lawyer continued to attend bankruptcy CLE seminars even though he was no longer required to attend them.

The disciplinary opinion stated that the lawyer acknowledged his lack of expertise in computer skills and his frustration in trying to meet the federal court’s expectations in filing electronic pleadings and that he also admitted that he had failed to report his suspensions to the Oklahoma Bar and that he did not timely notify his clients of the suspensions.  The lawyer received a public censure; however, two justices dissented and stated that they would suspend the attorney for two years plus one day.

Bottom line:  This is an unusual case.  The lawyer was permanently suspended by a bankruptcy judge from practicing in (after being suspended on two previous occasions) and then failed to report his suspensions to the general counsel of the Oklahoma Bar Association and failed to “timely” notify his bankruptcy clients of the suspensions; however, he received only a public censure of his license to practice in Oklahoma.  This is an example of how discipline imposed by a federal bankruptcy court (or other federal or administrative court) does not automatically result in the same discipline by the state court, unlike state court discipline, which typically results in reciprocal discipline of the lawyer’s license to practice in other states.

Be careful out there.

Disclaimer:  this Ethics Alert  is not an advertisement and does not contain any legal advice, 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

www.jac-law.com

 

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