Lawyers who find themselves overextended have an ethical obligation to address the situation.
I am a young lawyer and find myself overextended because of the bad economic situation in the United States. Even being overextended, I am barely financially making it. What are my ethical considerations and responsibilities?
For small firms and solo practitioners, particularly firms that rely on multiple types of hearings and trials, the present economic climate has not been kind at all. Of course, all firms are suffering at all different levels, but solo practitioners and small firms have been particularly hard hit because of the lack of clients who have sufficient funds to properly retain attorneys.
As a result, the old sage wisdom that money has to be received up front, particularly in representing domestic or criminal cases, is no longer viable. If most lawyers waited until they got the full fee up front, they would have no cases whatsoever.
Payment plans, unfortunately, are the norm and, even more unfortunately, it is difficult to have the payment plans completed. Clients always have a very good excuse, but that doesn’t help the lawyer who has the fixed obligations. Matters are compounded by the fact that there is still a perception out there that lawyers are rich and wealthy. Although some are, for many that is just not true anymore.
As a result, many lawyers take on more business than perhaps they normally would like to. Lawyers do that to get the cash flow moving. But this places a burden on the lawyer. Because of the bad economic times, most lawyers aren’t in a position to hire an associate or someone to assist them.
Particularly for younger lawyers who aren’t used to the stress of running to different courtrooms and doing five things at once, the modern practice of law is a burden. Also, the world is further complicated by the modern systems of communication. Although cellphones, iPads, laptop computers, etc., are great in terms of getting in touch with what is going on, they also place a tough burden on most lawyers because of the expectation of instantaneous communication.
This is particularly difficult for a trial lawyer. Trial lawyers, by definition, are usually in court and not at their desks looking at their computers and answering email. Therefore, the email might not be seen until the end of the day by a trial lawyer with resulting dissatisfaction by a client.
It gets even worse, because more and more people are aware of the Office of Disciplinary Counsel. Filing a complaint is very easy with websites, preprinted complaint forms, etc.
With this kind of pressure, it is no wonder that many lawyers are thinking of another way of making a living. The dream of one’s own practice sometimes seems impossible and sometimes becomes a grind.
Having said that, a lawyer still has an obligation to have a manageable caseload. The fact that a lawyer has to take on more than he or she should to make ends meet is not going to be a defense in a disciplinary trial. Under Rule 1.3 of the Rules of Professional Conduct, a lawyer must act with reasonable diligence and promptness in representing a client. Comment 2 talks about controlling a lawyer’s caseload: “A lawyer’s workload must be controlled so that each matter can be handled competently.”
Comment 3 talks about how procrastination hurts the legal profession and can often create problems with a client.
The rule is very clear that a lawyer has an obligation to proceed. If a lawyer has to take on more work, then the lawyer has to be willing to spend the additional time. The days of going home at 6 or 7 p.m. may have turned into 1 or 2 a.m. But a lawyer can’t take on more work than he or she can handle without facing potential disciplinary consequences and liability.
If the lawyer is taking more work, the lawyer should tell a client that he or she has a major practice and may not be able to move as fast as the client might always like. Of course, by saying that, one might lose the client.
This is the dilemma of the modern practice of law. Law is a wonderful business and a wonderful profession. One gets to help people and one gets to test his or her intellectual abilities and advocacy skills regularly. On the other hand, the pressures are immense. In this modern era, financial pressures are the killer for many lawyers.
Law is a profession, but these financial pressures often invade the professional aspects of practice.
In conclusion, every lawyer has to recognize his or her professional obligations. Although lawyers may have to be overextended to pay their bills, every lawyer must know there is a limit. If a lawyer cannot handle a matter after he or she accepts it, then the lawyer must return the fee and suggest other counsel. But the worst thing a lawyer can do is to totally ignore the situation. That not only hurts the client, but could have professional risk for the lawyer.
Lawyers should take precautionary measures to avoid conflicts of interest.
I am an attorney and a good friend of mine was an owner of a closely held corporation. I represented this owner in selling his share and interest in the corporation. Now there is some dispute as to the terms of the sale. May I sue the corporation?
The question is an interesting conflict of interest question that probably arises more than most people think. The starting point would be Rule of Professional Conduct 1.9. Under Rule 1.9(a), a lawyer who has represented a client in a matter cannot represent another person in the same or substantially related matter in which the person’s interests are materially adverse to the interests of the former client. The question is: Who was the former client?
The problem many lawyers have is they have represented people and corporations almost simultaneously or haven’t distinguished who they are representing. Many times a lawyer is the attorney for the owner, but also the attorney for the corporation. The owner or part-time owner of a corporation might feel comfortable using his or her attorney, but then the attorney’s role might expand if the attorney also represents the corporation.
Many lawyers are faced with the situation where they actually billed the corporation for their services. When the lawyer represents one of the owners in selling his or her share and there is a subsequent problem, the lawyer who also represented the corporation could be conflicted out by the other side, alleging conflict of interest because the lawyer was also counsel for the corporation.
The best thing for any attorney in these kinds of situations is to try some preventive care. Many times, lawyers represent individuals who have been their clients for many years. These individuals buy and sell businesses. The lawyer wants to continue to represent them. The lawyer doesn’t want to be conflicted out where the individual has to go to another lawyer for litigation involving a former business. When that happens, one might never see the client again.
Therefore, a lawyer has to think about how he or she can define his or her role so these conflict of interest issues don’t arise. A good way to start is in the fee letter or fee agreement. The document should be carefully drawn to clearly indicate who the lawyer represents.
Similarly, the bill thereafter should go to the individual and not the corporation. If the lawyer’s fees are to be paid by the corporation, then perhaps something can be worked out where there is an agreement between all parties that, although the corporation is paying the lawyer’s fees, the fee is for the sole representation of the owner.
There is a good discussion on this whole subject in The Pennsylvania Ethics Handbook, 2011 Edition, prepared by the Pennsylvania Bar Association’s committee on legal ethics and professional responsibility. Attorneys Michael Temin and Thomas Wilkinson Jr. are the editors. There is an interesting discussion on the subject on pages 76-79 for those who want to go into more detail.
But the bottom line is that the days of generic representation are over for the wise lawyer. More and more courts are sensitive to conflict of interest issues and the raising of a conflict of interest is now a major sport and defense in serious litigation.
One of the first ethical rules for an attorney is to decide who he or she represents. Lawyers who are representing owners, part-owners or shareholders in small corporations have to clearly define that role. Otherwise, the lawyer may well be prevented from representing his or her client in subsequent matters against the corporation. Sometimes, an ounce of prevention goes a long way in preventing unpleasant and drawn-out conflict of interest fights in the future. •
Chester County lawyer Samuel C. Stretton has practiced in the area of legal and judicial ethics for more than 35 years. He welcomes questions and comments from readers. If you have aquestion, call Stretton directly at 610-696-4243 or write to him at 301 S. High St. P.O. Box 3231, West Chester, Pa. 19381.