Ethics Lawyer David C. Carr

Newsletter September 2017

Welcome to the Ethics Lawyer Newsletter for September 2017

State Bar Dues Bill (SB 36) Headed for Governor’s Desk

SB 36, authorizing the State Bar to collect membership fees for 2018 and making major structural changes is headed to Governor Brown’s desk.  Among other things, the bill would spin off State Bar sections into a separate non-profit corporation eliminate attorney-elected Trustees from the Board of Trustees, reducing it to a 13 member Board with 7 attorney members and 6 public members, all appointed by the Supreme Court, Legislature, and Governor and eliminate the State Bar offices of President and Vice President, replacing them with an appointed chair and vice-chair.  The State Senate, which had previously approved the bill, voted unanimously on September 12, 2017, to concur with Assembly amendments.  The Assembly unanimously approved the bill on August 28, 2017.

Disbarment Recommendation for Attorney Who Misappropriated Armenian Genocide Survivors Funds

A hearing judge of the State Bar Court has filed an opinion recommending disbarment for an attorney who misappropriated funds from class action settlement intended to benefit survivors of victims of the Armenian genocide.  Although the State Bar did not prove all of its charges, the hearing judge found that $30,000 was transferred to an account created for the daughter of the attorney without the daughter’s knowledge and that this was a misappropriation of funds.  Disbarment was recommended in part because the attorney had three prior impositions of discipline.


Public Comment: Proposed Formal Opinion Interim No. 12-0005 (Seeking Advice About Current Clients)

The Standing Committee on Professional Responsibility and Conduct (COPRAC) is seeking public comment about its proposed formal opinion interim no. 12-0005, entitled “Seeking Advice About Current Client.”

The opinion addresses the following issue: What ethical obligations arise when lawyers in a law firm consult with
outside counsel concerning matters related to the firm’s representation of a current client, such as the lawyer’s ethical compliance or a possible error by the law firm, and do those ethical obligations change if the lawyer consulted is a member of the same law firm as the consulting lawyer and serves as law firm in-house counsel?

The opinion’s digest states: Attorneys at times may seek legal advice concerning their ethical and other obligations to clients, advice that may be provided by, among others, outside counsel or a lawyer within the law firm serving as law firm in-house
counsel. The act of seeking legal advice concerning ethical obligations owed to a client by itself does not create a conflict with the client. Once a lawyer becomes aware that he or she has committed an error that could prejudice the client, the lawyer ethically may seek legal advice concerning obligations to the client and options available, but must comply with the rules governing disclosure to clients and conflicts. The lawyer’s ethical obligations in that situation do not vary whether he or she
seeks legal advice from a lawyer outside the firm or law firm in-house counsel.

The opinion interprets rules 3-300, 3-310 and 3-500 of the Rules of Professional Conduct of the State Bar of California; and Business and Professions Code section 6068(m).

 The deadline for comments is 5 p.m., December 11, 2017.

Direct comments to
Andrew Tuft
Office of Professional Competence, Planning and Development
State Bar of California
180 Howard St.
San Francisco, CA 94105-1639
Phone: 415-538-2172
Fax: 415-538-2171

State Bar Submits Report on Bar Exam Passing Score to Supreme Court

The State Bar has submitted its report to the California Supreme Court regarding options for changing the passing score on the California Bar Exam.  The 179 page report presents three options for changing the currently required score: 1. No change to the current CBX [Commitee of Bar Examiners] cut score of 1440 (approximately 72 percent); or 2. Adopt an interim cut score of 1414 (approximately 70.7 percent); or 3. Adopt an interim cut score of 1390 (approximately 69.5 percent); percentages represent the percentage of points out of a possible total of 2000 of the total scaled score.  The California Supreme Court recently made changes to the California Rules of Court to explicitly state its authority for determining the passing score on the California Bar Examination.

Disqualification Order Reversed Where No Substantial Evidence Supported Existence of Former Attorney-Client or Confidential Nonclient Relationship

Lynn v. George, Fourth App. Dist., Div. 3, case no. G053563, filed 9/21/17.  Defendant and his real estate management company were represented by Lawyer for 15 years.  They were sued by Plaintiff, who alleged she had formed a partnership with Defendants for buying and selling property.  Plaintiff moved to disqualify Lawyer, alleging that Lawyer had acted as attorney for the partnership and provided Plaintiff with legal advice concerning a sale. Alternatively, Plaintiff alleged that she had confidential nonclient relationship with Lawyer. The trial court granted the motion based on its finding that there was a confidential nonclient relationship between Plaintiff and Lawyer and a “potential attorney-client relationship with the alleged partnership.”  The trial court, however, did not find that there was a partnership between Plaintiff and Defendants.  The Court  of  Appeal reversed.  Plaintiff did not her burden of showing an attorney-client relationship with Lawyer.  The evidence also showed that any information Plaintiff shared with Lawyer was also shared with others and related to her role as broker in the transaction and not confidential.  Moreover, a “potential”  attorney-client relationship is not sufficient to deprive Defendants to their choice of counsel.


That’s Why They Call It Practice:  Can we talk? Yes, we can talk!

 COPRAC’s new interim formal ethics opinion 12-0005 asks a question whose answer you might have taken for granted.  If a lawyer seeks legal advice about an ethic issue or a potential legal malpractice claim, must she notify her client that she has done so? Like you probably did, I unconsciously assumed that the answer must be “no”.  Now COPRAC has kindly explained to us why the answer is no.

And it comes down to this.  It is in the interest of the client to have ethical and competent counsel.  The fact that counsel has sought advice does not itself constitute a conflict of interest.  Nor is is in itself a significant event that must be communicated to the client.

But the advice of the outside lawyer (or the inside lawyer, because COPRAC opines that the distinction does not make a difference) can create a significant event that the lawyer must communicate to her client.  Ethics lawyers are often consulted on the scope of the ethical duties that owe their clients and ethics lawyers often advise as to what kind of information must be communicated to the client to meet their ethical obligations, for instance, the duty to communicate under Rule of Professional Conduct 3-500.  That same duty includes a duty to advise the client of material facts that might give rise to a malpractice claim, even though an attorney is not required to advise the client that they have a malpractice claim.  The distinction may seem a fine one but advising the client that they have a malpractice claim actually creates a situation where the lawyer is advising the client on an issue that squarely creates a conflict of interest.  An unanswered question is whether the lawyer’s fiduciary duty goes so far as to require the lawyer to advise the lawyer that they should seek the advice of independent counsel short of attempting to resolve the malpractice claim.  Rule of Professional Conduct 3-400 explicitly requires advising the client in writing to seek independent counsel prior to resolving a malpractice claim, even if that resolution is part of a waiver of “all claims known and unknown”  See COPRAC Formal Ethics Opinion 2009-178.

So don’t be shy.  We can talk and you don’t have to tell the client that we did.  But you might be wise to tell the client what we talked about.