At its meeting on October 23, 2015, the State Bar Council adopted the ethics opinions summarized below:
2015 Formal Ethics Opinion 5
Authority to Discuss Former Client’s Appellate Case with Successor Lawyer
Opinion provides that in post-conviction or appellate proceedings, a discharged lawyer may discuss a former client’s case, and turn over the former client’s file to successor counsel, if the former client consents or the disclosure is impliedly authorized.
2015 Formal Ethics Opinion 6
Lawyer’s Professional Responsibility When Third Party Steals Funds from Trust Account
Opinion rules that when funds are stolen from a lawyer’s trust account by a third party who is not employed or supervised by the lawyer and the lawyer was managing the trust account in compliance with the Rules of Professional Conduct, the lawyer is not professionally responsible for replacing the funds stolen from the account. Prior to adoption, a footnote was added to Inquiry #5 to clarify that the opinion does not address the issues of professional responsibility raised when a lawyer knowingly makes disbursements contrary to a settlement statement.
2015 Formal Ethics Opinion 7
Prior Business Relationships Permit In-Person Solicitation
Opinion rules that the business relationships with health care professionals created by a lawyer previously employed as a health care consultant constitute prior professional relationships within the meaning of Rule 7.3(a), thus permitting the lawyer to directly solicit legal employment by in-person, live telephone, or real-time electronic contact with the health care professionals.
Ethics Committee Actions
At its meeting on October 22, 2015, the Ethics Committee sent proposed 2015 FEO 8, Representing One Spouse on Domestic and Estate Matters after Representing Both Spouses Jointly, to a subcommittee for study. The committee also voted to publish one new proposed opinion and to republish proposed 2014 FEO 1, Protecting Confidential Client Information When Mentoring.
The comments of readers on proposed opinions are welcomed. Comments received before December 30, 2015, will be considered at the next meeting of the Ethics Committee. Comments may be emailed to email@example.com.
Proposed 2014 Formal Ethics Opinion 1
Protecting Confidential Client Information When Mentoring
October 22, 2015
Proposed opinion encourages lawyers to become mentors to law students and new lawyers (“protégés”) who are not employees of the mentor’s firm, and examines the application of the duty of confidentiality to client communications to which a protégé maybe privy.
Note: This opinion does not apply to law students certified pursuant to the Rules Governing the Practical Training of Law Students (27 N.C.A.C 1C, Section .0200) or to law students who are participating in formal law school pro bono programs, externship programs, and clinics in which students participate in client representation under the supervision of a lawyer. In addition, the opinion does not apply to lawyers, employees, or law clerks (paid or volunteer) being mentored or supervised by a lawyer within the same firm. This opinion addresses issues pertaining to informal mentoring relationships between lawyers, or between a lawyer and a law student, as well as to established bar and/or law school mentoring programs. Mentoring relationships between a lawyer and a college or a high school student are not addressed by this opinion because such relationships require more restrictive measures due to these students’ presumed inexperience and lack of understanding of a lawyer’s professional responsibilities, particularly the professional duty of confidentiality.
May a lawyer who is mentoring a law student (“protégé”) allow the student to observe confidential client consultations between the lawyer and the lawyer’s client?
Yes, if the client gives informed consent.
The duty of confidentiality is set forth in Rule 1.6. It provides that all communications relative to a client’s matter are confidential and cannot be disclosed unless the client consents, the client’s consent is implied as necessary to carry out the representation, or one of the specific exceptions to the duty of confidentiality in Rule 1.6(b) applies. If a law student/protégé is not an agent of the lawyer for the purpose of representing the client, there is no implied client consent to disclosure of the client’s confidential information to the student. Moreover, none of the specific exceptions to the duty of confidentiality apply in this situation. Only the express informed consent of the client will permit disclosure of confidential client information to a law student/protégé.
“Informed consent,” as defined in Rule 1.0, Terminology, “denotes the agreement by the person to a proposed course of conduct after the lawyer has communicated adequate information and explanation appropriate under the circumstances.” Rule 1.0(f). Informed consent must be given in writing by the client or confirmed in writing by the lawyer. See Rule 1.0(c). In the mentoring situation, obtaining the client’s informed consent requires the lawyer to explain the risks to the representation of the client that will be presented by the law student’s knowledge of client confidential information and the law student’s presence during client consultations.
One such risk is the possibility that the law student, who is not subject to the Rules of Professional Conduct, will intentionally or unintentionally reveal the client’s confidential information to unauthorized persons. To minimize this risk, it is recommended that the law student be required to sign a confidentiality agreement that emphasizes the duty not to disclose any client confidential information unless the client and the lawyer give express consent.
The lawyer should also explain to the client any risk that the attorney-client privilege1 will not attach to client communications with the lawyer because of the presence of the law student during the lawyer’s consultation with the client. If the lawyer concludes that the student’s presence will jeopardize the attachment of the privilege and the resulting harm to the client’s interests is substantial, the lawyer should consider carefully whether it is appropriate to ask the client to consent to the student’s presence during the consultation.
A lawyer wants to be a mentor to a new lawyer (“protégé”) who is not employed by or affiliated with the lawyer/mentor’s law firm. The lawyer/mentor wants to allow the new lawyer to observe his consultations with clients and he also wants to observe the new lawyer’s consultations with the new lawyer’s clients in order to critique and advise the new lawyer.
May the lawyer/mentor allow the lawyer/protégé to observe confidential client consultations between the lawyer/mentor and his client? May the lawyer/protégé allow the lawyer/mentor to observe confidential client consultations between the lawyer/protégé and his client?
Yes, these observations are allowed with the client’s informed consent. See Opinion #1. The observing lawyer should sign an agreement to maintain the confidentiality of the information of the other lawyer’s client, in accordance with Rule 1.6, and to avoid representations adverse to the client in accordance with Rule 1.7 and Rule 1.9.
Both the lawyer/protégé and the lawyer/mentor should avoid the creation of a conflict of interest with any existing or former clients by virtue of the mentoring relationship. For example, the lawyer/protégé should not consult with a lawyer he knows has represented the opposing party in the past without first ascertaining that the matters are not substantially related and that the opposing party is not represented in the current matter by the lawyer/mentor. Similarly, the lawyer/mentor should obtain information sufficient to determine that the lawyer/protégé’s matter is not one affecting the interests of an existing or former client. Rule 1.7 and Rule 1.9.
When a lawyer seeks advice from a lawyer/mentor, what actions should be taken to protect confidential client information?
If possible, the lawyer/protégé should try to obtain guidance from the lawyer/mentor without disclosing identifying client information. This can often be done by using a hypothetical. If the consultation is general and does not involve the disclosure of identifying client information, client consent is unnecessary.
If the consultation is intended to help the lawyer/protégé comply with the ethics rules, client consent is not required because Rule 1.6(b)(5) allows a lawyer to reveal protected client information to the extent that the lawyer reasonably believes necessary “to secure legal advice about the lawyer’s compliance with [the Rules of Professional Conduct].” Pursuant to Comment  to Rule 1.6:
A lawyer’s confidentiality obligations do not preclude a lawyer from securing confidential legal advice about the lawyer’s personal responsibility to comply with [the Rules of Professional Conduct.] In most situations, disclosing information to secure such advice will be impliedly authorized for the lawyer to carry out the representation. Even when the disclosure is not impliedly authorized, paragraph (b)(5) permits such disclosure because of the importance of a lawyer’s compliance with the Rules of Professional Conduct.
If the consultation is for the client’s benefit, limited disclosure of client information may be “impliedly authorized to carry out the representation.” See Rule 1.6(a). The lawyer should only disclose client information to a colleague if the lawyer has determined that the confidentiality of the consultation is adequately protected. Once the lawyer makes that determination, the client’s express consent is unnecessary.
If the consultation does not involve advice about the lawyer’s compliance with the Rules of Professional Conduct, a hypothetical is not practical, or the consultation is not for the client’s benefit, the lawyer/protégé must obtain client consent. See Opinion #2.
Under all circumstances, the lawyer/protégé and the lawyer/mentor should avoid the creation of a conflict of interest with any existing or former clients by virtue of the mentoring relationship. See Opinion #2; Rule 1.7 and Rule 1.9.
1. The attorney-client evidentiary privilege to avoid compelled testimony applies to client communications with a lawyer if (1) the relation of attorney and client existed at the time the communication was made, (2) the communication was made in confidence, (3) the communication relates to a matter about which the attorney is being professionally consulted, (4) the communication was made in the course of giving or seeking legal advice for a proper purpose although litigation need not be contemplated, and (5) the client has not waived the privilege. State v. McIntosh, 336 N.C. 517, 444 S.E.2d 438 (1994).
Proposed 2015 Formal Ethics Opinion 9
Holding Out Non-Equity Firm Lawyers as “Partners”
October 22, 2015
Proposed opinion rules that lawyers who do not own equity in a law firm may be held out to the public by any appropriate designation, including “partner,” provided the criteria for holding out the lawyer by the designation is legitimate, the designation is not misleading, and the lawyer complies with the professional responsibilities arising from the designation.
ABC Law Firm is a North Carolina professional corporation. Three lawyers, A, B, and C, are shareholders in the firm and own all of the equity of the firm. In the firm’s communications, Lawyers A, B, and C are held out as “partners”; internally at the firm, they are referred to as “equity partners.”
Lawyers E and F also work for the firm, but they do not own any interest in the firm and are not shareholders. However, Lawyers A, B, and C consider Lawyers E and F to be “partners in every sense of the word except actual ownership.” Lawyers E and F have the authority to bind the firm and to sign opinion letters on behalf of the firm, but they do not vote on matters of corporate governance. Within the firm, Lawyers E and F are referred to as “income partners.”
The firm would like to hold Lawyers E and F out to the public as “partners” or “income partners.” May the firm do so?
Yes. A law firm may use whatever designation it chooses to identify its lawyers in external and internal communications provided the criteria for holding a lawyer out by a certain designation is legitimate and the designation is not misleading in violation of Rule 7.1. Rule 1.7(a)(1) states that a communication is false or misleading if it “contains a material misrepresentation of fact or law, or omits a fact necessary to make the statement considered as a whole not materially misleading.” Any firm lawyer who is identified as a “partner” shall be held to the professional responsibilities in the Rules of Professional Conduct that arise from that designation. See, e.g., Rule 5.1.
THE NORTH CAROLINA STATE BAR
217 E. Edenton Street (27601) • PO Box 25908 • Raleigh, NC 27611-5908 • 919.828.4620
Copyrightę North Carolina State Bar. All rights reserved.