The Answer Book Hits the Shelves

William Brennan III, an adviser on the work, says it's "the alpha and omega of the law as it affects and governs lawyers." But others who had a hand in the American Law Institute's "Restatement of the Law (Third): The Law Governing Lawyers," (published in September) say what's more distinctive than the work's scope is its divergence in several key areas from the ABA's Model Rules of Professional Conduct.

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It’s called the “Third Restatement,” but it’s entirely new. And it’s called “The Law Governing Lawyers,” but it encompasses not only attorney discipline but legal malpractice, fee forfeiture and many other diverse laws that touch and concern the legal profession. In the words of William Brennan III, an adviser on the work, it’s “the alpha and omega of the law as it affects and governs lawyers.” Brennan and others who had a hand in the American Law Institute’s (ALI) “Restatement of the Law (Third): The Law Governing Lawyers,” published in September, say what’s more distinctive than the work’s scope is its divergence in several key areas from the American Bar Association’s Model Rules of Professional Conduct, which for decades have enjoyed preeminence in helping to set standards for attorney ethics. The ALI adopts a more liberal approach than the Model Rules in such areas as disclosure of client confidences, conflicts of interest, multi-jurisdictional practice and liability to third parties. The work took 12 years to compile. Yet, as ambitious as it is, it does not purport to cover every conceivable topic pertaining to the practice of law. As the introduction acknowledges, it omits such subjects as lawyer advertising, the right to assistance of counsel, group legal services, and court-awarded attorneys’ fees. Like previous Restatements, the Law Governing Lawyers is not controlling authority, but it promises to exert a significant influence on judicial analysis and decision-making. Among the highlights: 1. CLIENT CONFIDENTIALITY: Section 66 allows a lawyer to disclose confidences to prevent death or serious bodily harm, even when that harm is not imminent. That is “a distinctly minority position,” says Charles Wolfram, a professor emeritus at Cornell Law School who originated the Restatement project and served as the chief reporter among four. The ABA Model Rules permit disclosure of client confidences only to prevent bodily harm. Most states take a more liberal approach to disclosing client confidences. One exception, however, is New Jersey, which goes even further than the Restatement to require disclosure under RPC 1.6(b) to prevent acts reasonably likely to result in bodily harm or fraud upon a tribunal. Restatement Section 67 allows for disclosure to prevent, rectify or mitigate substantial financial loss where the lawyer’s services were used in the matter in which the fraud is being committed. 2. MULTI-JURISDICTIONAL PRACTICE: Section 3(3) authorizes attorneys to provide legal services where not admitted “to the extent that the lawyer’s activities arise out of or are otherwise reasonably related to the lawyer’s practice” in states where the lawyer is admitted. The comment to the section indicates it is meant to be broadly construed, saying a lawyer is permitted not only to continue to provide services such as will-drafting to a client who moves to another state, but also to acquire new clients in that second state if the lawyer meets them through the original client. 3. CONFLICTS OF INTEREST: Unlike the Model Rules and New Jersey’s Rules of Professional Conduct, the Restatement authorizes screening in some circumstances by law firms to prevent disqualification from imputed conflict of interest. Section 124(2) says that imputation does not restrict an affiliated lawyer “when there is no substantial risk that confidential information of the former client will be used with material adverse effect” on the former client; because the information is unlikely to be significant in the present matter, the prohibited lawyer is adequately screened from participation and the client has timely and adequate notice. 4. LIEN ON CLIENT FILE: Section 43 adopts the minority view that lawyers may exert pressure to pay legal fees by withholding client files or property. Unless authorized by statute or rule, attorneys may only withhold documents not yet paid for where this will not unreasonably harm the client. 5. NO PUNITIVE DAMAGES FOR LEGAL MALPRACTICE: The Restatement does not allow successful malpractice claimants to recover punitive damages that might have been awarded in the underlying action. John Leubsdorf, a professor at Rutgers Law School-Newark and one of the reporters for the Restatement, says this was one of the most closely contested points. “Making the lawyer pay doesn’t really accomplish the intent” of sanctioning and deterring the original wrongdoer, he says, and the malpractice jury would have to speculate on the amount of such damages a hypothetical jury would have awarded. 6. INSURER’S CONTROL OVER ATTORNEYS REPRESENTING INSUREDS: Section 124 allows someone other than the client to direct an attorney’s representation so long as it “does not interfere with the attorney’s independence of professional judgment,” the direction is reasonable, and the client consents. 7. LIABILITY TO PROSPECTIVE CLIENTS: The Restatement also provides liability, under section 15, to prospective clients. “To the extent you start advising someone, you must use reasonable care in giving the advice,” says Leubsdorf, adding that New Jersey’s rule is similar. Also of interest are provisions authorizing full or partial forfeiture of fees for “clear and serious violation of duty to a client” (sec. 37) and creating an emergency exception to the rule against contacting represented adversaries (Sec. 99). As of early this month, the Restatement — mostly in draft versions — had been cited in at least 187 decisions around the United States, including two U.S. Supreme Court cases, and by courts in 27 states. Only a month after the new Restatement was approved by ALI vote in May 1998, Chief Justice William Rehnquist cited it in his majority opinion in Swidler and Berlin v. United States, 524 U.S. 399 (1998). The decision accorded posthumous protection to an attorney’s notes of his meeting with prospective client Deputy White House Counsel Vincent Foster Jr., who committed suicide nine days later. A federal grand jury had subpoenaed the notes at the request of Independent Counsel Kenneth Starr. Justice Sandra Day O’Connor, dissenting in Swidler, also cited the Restatement, which questions the posthumous survival of the privilege. More recently, in February, Justice David Souter, dissenting in Roe v. Flores-Ortega, 528 U.S. 470 (2000), cited the new Restatement. New Jersey courts have cited the Restatement in at least 17 cases, more than any other state. Six of those cites were by the Supreme Court, including five majority opinions by Justice Stewart Pollock, since retired, who was one of 29 advisers working on the new Restatement. Other jurists who participated were U.S. District Judge Joseph Irenas, U.S. Magistrate Judge Ronald Hedges, and Appellate Division Judges Lawrence Bildner, David Landau and Edwin Stern. The Restatement is also exerting an impact on the ABA’s Ethics 2000 Commission, which is reviewing the Model Rules. Nancy Moore, formerly of Rutgers Law School-Newark, who is the chief reporter for Ethics 2000, describes the Restatement’s move toward screening for conflicts as “influential” on Ethics 2000 and says the commission will recommend an even more permissive rule. That is likely to have an impact in New Jersey in light of the state supreme court’s decision in May to await the final report of the commission before deciding on whether disqualification under State v. Clark, 162 N.J. 201 (2000) should be imputed to other law firm members. Clark forbids attorneys from working as both municipal prosecutors and public defenders in the same county.

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