Ethics Advisory Opinion 14-03

Utah State Bar
Ethics Advisory Opinion Committee

Opinion Number 14-03

Issued April 22, 2014

ISSUE

1.         Do the Utah Rules of Professional Conduct prohibit referral agreements between two attorneys that require one of the attorneys (the “Referring Attorney”) to refer to the other (the “Receiving Attorney”) all clients that have a certain specified type of products liability claim?

 OPINION

2.         The Committee concludes that an agreement between two attorneys which requires the Referring Attorney to refer to the Receiving Attorney all clients that have a certain specified type of claim may likely violate various provisions of the Utah Rules of Professional Conduct (the “Rules”).

FACTS

3.         The Referring Attorney, licensed to practice in the State of Utah, and the Receiving Attorney, licensed to practice elsewhere, enter into an agreement governed by Utah law (the “Agreement”) to jointly pursue certain kinds of products liability claims (the “Claims”) of individuals located in the State of Utah.  The Agreement provides in relevant part:

  1. Referring Attorney will generate the cases by placing advertising and/or arranging for medical testing and diagnosis of prospective clients and would be entitled to reimbursement from the Receiving Attorney for the costs of doing so.
  2. In return for the Receiving Attorney’s agreement to pay those expenses, the Referring Attorney would be required to exclusively refer to the Receiving Attorney all clients having such Claims who contact the Referring Attorney.  The Referring Attorney would not be allowed to represent such clients himself or to refer such clients to any other attorney.
  3. The Referring Attorney will place advertising, accept incoming calls from potential clients, obtain medical records from potential clients, arrange for medical testing, and perform certain other related tasks, before turning the clients over to Receiving Attorney for further action.
  4. The Receiving Attorney will decide in his sole discretion the venue, jurisdiction, timing, counts, and content of complaints or petitions, joinder of plaintiffs and/or defendants, and any other strategic issues relating to the Claims.
  5. The Referring Attorney will ask clients to sign new fee agreements directly with the Receiving Attorney, identifying the Receiving Attorney as the clients’ attorney, will inform the clients of the division of fees between the two attorneys, and will inform the clients of any other matters deemed by either attorney to be required by the Rules of Professional Conduct.
  6. The Referring Attorney will not be required to perform any services except those specified in the Agreement or required by the Utah Rules or by any other ethical rules governing the Claims or any resulting cases.
  7. The Receiving Attorney will pay the Referring Attorney specified portions of the fees recovered by the Receiving Attorney for the clients on their Claims.

 ANALYSIS

 

4.         The fee sharing agreement between the two attorneys is governed by Rule 1.5, which provides that there may be a division of fees between lawyers in different firms, but on the following condition:

(e)(1) the division is in proportion to the services performed by each lawyer or each lawyer assumes joint responsibility for the representation;

(e)(2) the client agrees to the arrangement, including the share each lawyer will receive, and the agreement is confirmed in writing; and

(e)(3) the total fee is reasonable.
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Ethics Advisory Opinion No. 09-02

OPINION NO. 09-02
MAIN OPINION:
Issued August 11, 2009
The five issues addressed in this Opinion are based upon the following general scenario:
A lawyer represents many homeowner’s associations (both condominium and PUD) in various matters, at various times. Many of these associations are nonprofit corporations and others are common law associations. They are all operated through elected volunteer owner representatives who are organized into boards of directors (although they sometimes use diferent names for the representatives such as the management committee or board of trustees). Many
of these boards hire professional managers, as they lack the experience, skils, and time to properly manage the associations. Some associations that the lawyer represents were referred through managers of the associations. Some of these managers work for management companies that manage many associations, thus providing an incentive for the lawyer to develop a good relationship with the manager to hopefully facilitate future referrals of other associations that the manager manages. It is also important for the lawyer to maintain a reasonably good relationship with the manager related to the lawyer’s clients managed by that manager, because it is common in the industry for the manager to act as the point of contact with the attorney on legal matters involving an association. The lawyer does not represent or work directly for the manager or management companies.

1. Issue 1: Given the general circumstances described above, can the lawyer ethically represent associations in matters that do not include adversarial situations with the manager, and is any disclosure required?
Opinion: The lawyer may represent the associations, and no disclosure is required.
Analysis: Under the circumstances summarized in the Introduction, there does not appear to be a conflct of interest in the scenario described in Issue 1. Assuming compliance with the Rules of Professional Conduct generally, the representation does not appear to implicate Rule 1.7 1, and it does not appear that disclosure would be required.
2. Issue 2: Given the general circumstances described above, can the lawyer represent the association in a lawsuit against the manager, and is any disclosure required?
Opinion: conflct of interest exists under this scenario. Whether the clients may consent to the representation wil depend upon the circumstances of the representation.
Analysis: This scenario clearly creates a conflict under Rule 1.7(a), as “there is a significant risk that the representation of (the homeowner’s association (‘HOA’)) wil be materially limited by. . . a personal interest of the lawyer.” Lawyer has a personal and financial interest in preserving a friendly relationship with Manager, both to enhance the likelihood of future business referrals, and to preserve existing business relationships with other HOAs with which the manager is affiiated 2.
“Ordinarily, clients may consent to representation notwithstanding a conflct. However, as indicated in (Rule 1.7) paragraph (b), some conflcts are nonconsentable, meaning that the lawyer involved canot properly ask for such agreement or provide representation on the basis of the client’s consent 3. A conflct of interest is consentable if each of the four provisions of Rule 1. 7(b) is satisfied:
(b)(1) the lawyer reasonably believes that the lawyer wil be able to provide competent and diligent representation to each affected client;
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Ethics Advisory Opinion No. 08-01 Dissent

UTAH STATE BAR
ETHICS ADVISORY OPINION COMMITTEE
OPINION 08-01
PDF Version
DISSENT:
For Main Opinion click here>>>
1. Dissents from a Utah Ethics Advisory Opinion are understandably rare because of the harmonious working relationship among Ethics Committee members and the shared objective: to provide well-researched and analyzed ethics opinions upon which Utah State Bar members can hopefully rely. It is, therefore, with some trepidation that I dissent from the main opinion. In my view, the main opinion is logically inconsistent with a Tenth Circuit decision that binds Utah lawyers in federal court; incompatible with judicial and ethics opinions in other jurisdictions; and potentially harmful to what I think should be the overriding ideal of all ethics opinions—to ensure justice for clients.

2. To begin, I believe the Committee’s framing of the issue is overly broad. As the Opinion states the issue: “May an attorney provide legal assistance to litigants appearing before tribunals pro se and prepare written submissions for them without disclosing the nature or extent of such assistance?” The Committee’s answer to that question is an unqualified “yes.” Yet, I believe the Committee’s categorical all-or-nothing, black-or-white answer, inclusive of “substantial” with “insubstantial” or quite limited legal services, is ill-advised and contrary to law. To me, the issue is not whether “insubstantial,” unbundled legal assistance for pro se litigants is permissible and ethical. No one has ever disagreed that such assistance is permissible, ethical and encouraged. In fact, Rule 1.2(c) of the Utah Rules of Professional Conduct provides for this type of limited representation.1 Instead, the issue for me, and most jurisdictions that analyze the issue, is whether undisclosed and “substantial” legal assistance, commonly called ghost-lawyering is ethical. Admittedly, the difference between “substantial and “insubstantial” can, in some circumstances, be ambiguous. Presumably, no one would argue that ghost-written appellate briefs or individualized complaints are “insubstantial”— or, to the contrary, that boiler-plate forms available to anyone on the Utah courts web-site (I assume written by lawyers) run afoul of current prohibitions against ghost-lawyering.
3. As described in Nevada Formal Opinion No. 34, issued in 2006,“Ghost-lawyering occurs when a member of the bar gives substantial legal assistance, by drafting or otherwise, to a party ostensibly appearing pro se, with the lawyer’s actual or constructive knowledge that the legal assistance will not be disclosed to the court.”2
4. Citing the same cases and law review articles as does our Committee in Opinion No. 74, the Nevada Opinion, as initially issued, came to an opposite result, concluding, as do I, that “ghost-lawyering is unethical unless the ghost-lawyer assistance and identity are disclosed to the court by the signature of the ghost-lawyer under Rule 11 [the same as Rule 11 of the Utah Rules of Civil Procedure] upon every paper filed with the court for which the ‘ghost-lawyer’ gave ‘substantial assistance’ to the pro se litigant by drafting or otherwise.”3
5. From the outset, there appears to be some disparity of perception between the main opinion and me over the potential harm in ghost-lawyering. The Committee writes, “It is not clear to this Committee at what point such a typical pro se party needing limited scope legal help has obtained ‘extensive’ or ‘substantial’ help that appears dishonest. Because over 80% of respondents and 49% of petitioners in divorce cases are unrepresented, these are the typical pro se parties and needed limited assistance of counsel.” The Committee further opines, “Therefore, the ‘unfair advantage’ that pro se parties ostensibly gain through the court’s liberal construction of their pleading—one of the bases for prohibiting ghost-writing—does not appear to apply under Utah law.”
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ETHICS ADVISORY OPINION No. 08-01

OPINION NO. 08-01
MAIN OPINION:
For Dissent Opinion click here>>>
Issued April 8, 2008
1. Issue:
May an attorney provide legal assistance to litigants appearing before a tribunal pro se and prepare written submissions for them without disclosing the nature or extent of such assistance? If so, what are the attorney’s obligations when full representation is not undertaken?

2. Opinion: Under the Utah Rules of Professional Conduct, and in the absence of an express court rule to the contrary, a lawyer may provide legal assistance to litigants appearing before tribunals pro se and help them prepare written submissions without disclosing or ensuring the disclosure to others of the nature or extent of such assistance. Although providing limited legal help does not alter the attorney’s professional responsibilities, some aspects of the representation require special attention.
3. Background: Our Committee has previously issued three opinions regarding limited-scope legal representation under certain circumstances regarding various aspects of limited-scope legal representation.1 These opinions were issued under the Utah Code of Professional Responsibility that was superseded by the Utah Rules of Professional Conduct, adopted by the Utah Supreme Court in 1988 and modified in certain respects by amendments that were adopted by the Court in November 2005. A synopsis of those opinions is found in Appendix A to this Opinion. In this opinion, we undertake a more comprehensive analysis of the “behind the scenes” limited representation under the current Utah rules.
4. Recently, the ABA Standing Committee on Ethics and Professional Responsibility has issued Formal Opinion 07-446 (May 5, 2007), comprehensively discussing assistance to pro se parties and expressly superseding ABA Informal Opinion 1414, which disapproved certain undisclosed assistance of pro se litigants under the prior Code of Professional Conduct. ABA Opinion 07-446 concluded that under the Model Rules of Professional Conduct, “a lawyer may provide legal assistance to litigants appearing before tribunals ‘pro se’ and help them prepare written submissions without disclosing or ensuring the disclosure of the nature or extent of such assistance.”
5. Analysis: In addressing the issue posed, we begin by recognizing that a new regulatory framework is in place nationally and in Utah that provides directly for limited-scope legal representation of clients who, for various reasons, engage lawyers for narrowly circumscribed participation in their legal affairs.
6. Rules of Professional Conduct: Rule 8.4(c) of the Rules of Professional Conduct prohibits “conduct involving dishonesty, fraud, deceit or misrepresentation.” However, none of the comments to that rule suggest that failure to notify opposing parties and the court of limited assistance to a pro se party involves such dishonest conduct.2 Recently issued ABA Formal Opinion 07-446 expressly concludes that it does not: “[W]e do not believe that nondisclosure of the fact of legal assistance is dishonest so as to be prohibited by Rule 8.4(c).” Because the Rules of Professional Conduct include comments that explain and illustrate “the meaning and purpose of the rule” and “are intended as guides to interpretation,”3 and because the ABA drafters certainly knew of Informal Opinion 1414, it would have been obvious to include this example to illustrate dishonest conduct if that had been intended. (more…)

Ethics Advisory Opinion No. 05-03

September 30, 2005
HISTORY:
On May 6, 2005, the Utah Ethics Advisory Opinion Committee issued Utah Ethics Advisory Op. No. 05-03, 2005 WL 4748681 (Utah St. Bar). The Requestors of the Opinion filed a Petition for Review with the Board of Bar Commissioners pursuant § III(e)(1) of the Ethics Advisory Opinion Committee Rules of Procedure and § VI(a)(1) of the Utah State Bar Rules Governing the Ethics Advisory Opinion Committee. At a meeting of the Board of Bar Commissioners of the Utah State Bar on July 13, 2005, the Commission reviewed the conclusions and analysis of the majority view and the minority view of Opinion No. 05-03, and voted to issue a revised opinion, set forth below as Opinion No. 05-03. The initial Opinion No. 05-03 as originally issued by the Committee is appended in its entirety for historical reference only and should not be cited or used for purposes other than background.
1. Issue: May a lawyer who serves as a domestic relations mediator, following a successful mediation, draft the settlement agreement and necessary court pleadings to obtain a divorce for the parties?

2. Opinion: When a lawyer-mediator, after a successful mediation, drafts the settlement agreement, complaint and other pleadings to implement the settlement and obtain a divorce for the parties, the lawyer-mediator is engaged in the practice of law and attempting to represent opposing parties in litigation. A lawyer may not represent both parties following a mediation to obtain a divorce for the parties.
3. Analysis: The issue considered here was the subject of a prior opinion issued by the Ethics Advisory Opinion Committee in 1992. We have been asked to revisit this issue again because of the expansion and apparent success of divorce mediators in resolving domestic relations matters for pro se litigants for whom the cost of retaining legal counsel may be a serious financial burden. 1
4. Utah Ethics Advisory Opinion 116 considered the following issue: “Under what circumstances may an attorney represent both parties in a divorce?”2 The answer given in Opinion 116 was “never,” based on the clear ethical mandates of Rules 1.7(a) and 1.7(b) of the Utah Rules of Professional Conduct.3 These rules establish a duty of undivided loyalty of counsel to a client.4 Opinion 116 concluded that our rules preclude concurrent representation of clients with directly adverse interests in the matter. Opinion 116 included a lengthy discussion of policy arguments favoring dual representation and policy arguments opposing dual representation in divorce proceedings and concluded that: “The concurrent representation of both parties in a divorce is an ethically unacceptable practice.”5
5. In the 12 years since Opinion 116 was issued, the applicable rules and the arguments bearing upon dual representation in divorce proceedings have not materially changed. The arguably successful and beneficial development of alternative dispute resolution and mediation in the interim does not change our conclusion here. Since the Ethics Advisory Opinion Committee has no policy-making authority, the fact that parties to all lawsuits, including divorces, are increasingly turning to alternative dispute resolution with reportedly positive results to the public and Bar alike cannot alter the clear mandate of our Rules. Whatever the social, financial or other impacts of the alternative dispute resolution trend, and even assuming its worth and inevitability, the ethical rules we are charged to uphold have no “public policy” exceptions that would permit the Ethics Advisory Opinion Committee to rewrite the rules to achieve a result some may believe is beneficial, even if that revision is a carefully reasoned, narrowly crafted exception.6 (more…)

Ethics Advisory Opinion No. 04-01a

December 2, 2004
Amendment of Opinion No. 04-01: On March 29, 2004, the Utah Ethics Advisory Opinion Committee issued Utah Ethics Advisory Op. No. 04-01, 2004 WL 870583 (Utah St. Bar).1 The Office of Professional Conduct of the Utah State Bar filed a petition for review with the Board of Bar Commissioners pursuant to § III(e)(1) of the Ethics Advisory Opinion Committee Rules of Procedure and § VI(a)(1) of the Utah State Bar Rules Governing the Ethics Advisory Opinion Committee. The Commission asked the Committee to reconsider Opinion No. 04-01. Having reviewed the issues raised by the Office of Professional Conduct, we issue this amended opinion, which revises the conclusion and analysis of Opinion No. 04-01. Accordingly, this amended opinion replaces and supersedes Opinion No. 04-01.
Issue: What action, if any, may a lawyer for an employer ethically undertake on behalf of a vanished former employee who, along with the employer, has been named as a defendant in an action arising when the person was an employee?


Opinion
: The lawyer may not act on behalf of or purport to represent the vanished former employee unless the lawyer has an existing attorney-client relationship with the former employee or the former employee agreed to the representation prior to vanishing and, in either case, the lawyer complies with Rules 1.7 and 1.8(f) of the Utah Rules of Professional Conduct. The lawyer who represents the employer may engage in acts that may benefit the vanished former employee provided the lawyer makes it clear that he is acting on behalf of the employer as the employer’s lawyer and not on behalf of the vanished former employee as the former employee’s lawyer.
Facts: Plaintiff filed suit naming a company and its former employee as defendants. The company concedes that the former employee was acting in the course and scope of his employment and has asked the company’s lawyers to represent the missing former employee. The company is concerned that absence of a formal answer to the complaint by the former employee may result in a default judgment being entered against the absent former employee. We have no information about the reasons for the employee’s absence, but we assume that a reasonable effort has been made to locate the person and determine the reason for the absence. We also assume that, at this early stage of the proceeding, the interests of the employer and employee are not directly adverse with respect to the matter.2 The lawyer requesting this opinion also indicated that the employer has liability insurance that covers the incident giving rise to the lawsuit.3 The company has requested that the lawyer represent the vanished former employee.
Analysis: This case presents two competing concerns: On the one hand, a basic ingredient of the representation of a client is that, under Rule 1.4, the lawyer communicate with the client, keep the client informed about the status of the case, and provide sufficient information to the client that the client may make informed decisions; and, under Rule 1.2, the lawyer must abide by the client’s decisions regarding the goals of the representation. On the other hand, the interests of a party missing from a proceeding will go unprotected with an application of the Rules. The Rules of Professional Conduct are rules of reason,4 to be interpreted to further the administration of justice when the Rules are unclear. However, in this instance, we conclude the Rules are clear and must be applied despite arguments of countervailing public policy.5 (more…)