Samuel C. Stretton ()
With the articles about a law firm owning a pharmacy where their workers’ compensation patients are sent by doctors, where does Pennsylvania stand on a law firm also doing business in nonrelated law areas?
To evaluate the issue, one has to get away from the news articles and stories. The Pennsylvania Supreme Court, a few years ago, added Rule of Professional Conduct 5.7 that talks about when a law firm is involved in a nonlaw-related business. This rule is an important rule, particularly because it discusses when a lawyer in a nonrelated business is going to be bound by the Rules of Professional Conduct and when the lawyer would not be. That’s an important aspect because if the competitors are not bound by the Rules of Professional Conduct, the business may not be as competitive.
Rule 5.7 is titled “Responsibilities Regarding Nonlegal Services.” Rule 5.7(a) essentially holds if one is doing nonlegal business that’s not distinct from the law practice, then the lawyer is held to the Rules of Professional Conduct for both. Rule 5.7(b) states that when the nonlegal services are distinct from the legal services, then the lawyer is only bound by the Rules of Professional Conduct with respect to the nonlegal services that the lawyer knows or reasonably should know that the recipient believes he is receiving the protection of the attorney-client relationship. Rule 5.7(c) states that a lawyer who is an owner or controlling party or agent affiliated with an entity providing nonlegal services to a recipient is subject to the Rules of Professional Conduct if the lawyer knows or reasonably should know that the recipient might believe he’s receiving the protection of the attorney-client relationship. Rule 5.7(d) is a safeguard rule that says, “The above paragraphs B and C don’t apply if the lawyer makes reasonable efforts to avoid any misunderstanding at to their role.” Rule 5.7(e) defines nonlegal services as services “that might reasonably be performed in conjunction with and in substance are related to the provisions of legal services and that are not prohibited as the unauthorized practice of law when provided by a nonlawyer.”
In evaluating this rule, it must be noted that a lawyer is a lawyer 24/7. Therefore, a lawyer is always held to a higher standard. For instance, if a lawyer in their personal life lies on their tax return or mortgage application, the lawyer can be prosecuted for misrepresentation or deceit under Rule of Professional Conduct 8.4(c). Lawyers who also engage in nonlaw related businesses can’t lie, steal or cheat without facing the consequences of the Rules of Professional Conduct. But, there are certain rules that wouldn’t apply. For instance, the need to escrow monies in IOLTA accounts and strict rules about distributing monies in escrow or IOLTA accounts as set forth in Rule of Professional Conduct 1.15. Second, would be the attorney-client relationship or privilege under Rule 1.6. Third, would be potentially conflicts of interest. All of those are set forth in the Rules of Professional Conduct, but would not necessarily apply to a lawyer who is running a distinct separate non-legal business.
Perhaps the articles about the pharmacy and the law firm might generate some discussion as to whether or not the legal profession should take the next step forward. For instance, in England, the law profession and nonrelated businesses are allowed much more flexibility. In Pennsylvania, a law firm cannot give an ownership interest to a nonlawyer. For instance, a lawyer cannot pay referral fees to a nonlawyer. A lawyer can’t share legal fees with a nonlawyer. An example would be an accountant who refers his clients to a lawyer for say tax assessment appeals. The accountant gets the fee from the clients and pays the lawyer whatever amount of the fee and then pockets the rest for the representation. That is prohibited by Rules 5.4 and 5.5 of the Rules of Professional Conduct, which precludes fee-sharing with a nonlawyer.
Perhaps it’s time to review and start to think of where the law profession should be in 20 or 30 years, particularly in the context of law-related businesses and nonlaw-related businesses and the integration of the two. Presently, nonlawyers cannot be a partner or an equity holder in a law firm. In England, they can be, I believe. Perhaps it’s time to discuss this and the Pennsylvania Supreme Court might consider future amendments to the Rules of Professional Conduct.
Are the traditional views of the legal purist of a law practice being only law related the correct model or should the future reflect a different viewpoint of integration of legal and nonlegal issues? Whether the Pennsylvania Supreme Court makes rule changes and leads this way remains to be seen. Purists, like this writer, would always like to have the legal profession just being lawyers and the law firms just practicing law. In a perfect world, that might work, but in the modern world of interrelated businesses and the problems many law firms have in making a good living, perhaps it’s time to reconsider the old prohibitions. I always likes to take the position that law is a service business. One can make a living out of it, but the goal is not to be rich practicing law. This is opposed to a business where the goal is to make significant money and perhaps to be rich. The question is will the combination of these two different philosophies take away from the traditional role of a lawyer as one who provides services and helps people as the primary purpose.
Having said that, returning to the law firm having ownership in a pharmacy where personal injury or workers’ compensation clients are directed by medical providers, there is still is major concern about the ethics of that arrangement even if things change. Medical professionals, of course, are barred from referring their patients to businesses they have an interest in at least without a lot of disclosures. But, not enough facts are known to really comment on the specifics of that particular model. As currently discussed in the papers, it would appear there could be issues of conflict of interest under Rule 1.7 and Rule 1.8 and further, potential misrepresentations unless full disclosure was made. Further, though Rule 5.7 allows certain businesses it would appear that the lawyers must be held to the standard Rules of Professional Conduct as Rule 5.7 applies, which would put them in a somewhat different situation than their competitors. The point is not to criticize, particularly when the facts aren’t known. The point is to suggest this is a catalyst for reevaluating what law firms and lawyers can and cannot do in a nonlaw-related area. It’ really time for the Pennsylvania Supreme Court to address these issues. Rule 5.7 is a good start, but it only deals with whether one is held to the Rules of Professional Conduct. It does not deal with the many other issues that arise when and whether or not law firms can integrate nonlaw businesses into their legal practice.
A list of ‘don’ts’ for judicial officers.
I am a lawyer who is contemplating running for judicial office in the next judicial election cycle. I am curious as to any suggestions as to what kind of judicial conduct creates problems or is most annoying?
Pennsylvania has been blessed with many excellent trial judges and district judges. Many of these people are dedicated public servants and, at the same time, at the common pleas and appellate level very experienced and knowledgeable judges. But, because of the changing nature of the legal profession, there is far less opportunity for future judges to gain the real trial experience and be in a courtroom on a regular basis. It doesn’t happen in this modern world unless one is a public defender or district attorney or some government position that goes into court regularly. Of course, if that is the case, although there is trial experience, there’s not a breath of law experience because criminal law is just a discipline. There are hundreds of other types of cases.
Here is a list of the don’ts if one is fortunate enough to be given the high privilege of serving as a judicial officer:
Don’t be regularly late for scheduled hearings. If people are subpoenaed in at 9 or 9:30 a.m., the judge should be there, perhaps minus a few minutes to let the lawyers and the litigants get organized. There is nothing that hurts judiciary more in the eyes of the public and lawyers for the judge to show up an hour or two late without any excuse other then they like to sleep late. The Supreme Court has already severely criticized and sanctioned a judge for doing that.
Let lawyers try their case. Too many judges like to interrupt or take over. That’s the role of the lawyers. Perhaps the judge could do it better, but that’s not the judge’s job.
Don’t interrupt lawyers and make judicial objections when the other side is not objecting, unless the lawyer does not know what they’re doing. Further, a judicial officer shouldn’t by facial expressions signal to a jury their thought process. A judge should have a “poker face.” There is nothing more upsetting to litigants when the judge is shaking their head or rolling their eyes when a witness is testifying. Further, the same judicial conduct for plaintiffs or prosecution witnesses and defense witnesses should prevail. A judge should act the same toward both. A judge should not have their back turned to defense witnesses, but looking at witnesses in an approving way if they are prosecution witnesses.
Don’t demean or criticize lawyers before their clients in a courtroom. That’s an old tradition that seems to be forgotten. Obviously, there are sometimes when some lawyer really goes too far. But, if there is something that’s being done wrongly, a judge should take a brief recess and pull the lawyer in the back room. There outside the presence of jury or people in the courtroom or one’s client, the judge can lay the law down to the lawyer. It’s how lawyers used to learn. In the old days, it used to be called going to the woodshed. Nowadays, the judges seem perfectly fine to say and criticize a lawyer before their clients. But, that is really not fair and not an acceptable judicial practice. Obviously, if a lawyer continues to act badly afterwards, perhaps a public reprimand is warranted. But, the old-fashioned way is to take the lawyer in the back room. The judge still, to some extent, should remember there is still a mentoring role for inexperienced lawyers.
Don’t drink coffee or soda or eat while a judge is on the bench. Although jurors and counsel usually have water on the trial table, the lawyers shouldn’t be eating during a trial nor should judges. A judge shouldn’t have a steaming cup of coffee when everyone else is there with water or no water. The rule is that what litigants can have, the judge can have. If the litigants have a water pitcher and cups and the jury has access to that, then the judge can have water. But, otherwise, the judge shouldn’t be eating, drinking and sipping coffee or tea or soda. It doesn’t look good and it’s unfair. The judicial bench is not a restaurant.
Stay off the judicial computer, if possible. In years past, there were several justices on the Pennsylvania Supreme Court that had computers and one could never even see their face half the time when arguments were held. It’s understood that judges type on the computers as opposed to the old fashioned way of writing notes, but it’s annoying when one can’t see the judicial face and when the judge is buried in the computer and not looking at or about the courtroom.
Establish times when a court day ends. Although there are always exceptions, its better the judge has set rules. A trial starts at 9 or 9:30, has an hour or hour and 15 minutes for lunch, and then the court day ends at 4:30 or 4:45. Obviously, if someone is in the middle of a critical witness, there are exceptions. But, everyone gets tired and their concentration lags, particularly late in the afternoon. Trials are not to be endurance matches. A judge should have a schedule and stick to it.
Don’t do jury verdicts until the wee hours of the morning. In some counties, judges will allow a jury to deliberate as late as 1 or 2 in the morning. No judge should do that. Lawyers and litigants are exhausted. Jurors get tired and it puts undo pressure on them at times. Once a jury goes out, they should be sent home no later than 6 and then return the next day. Perhaps some jurors might resent that, but it’s better to deliberate and be fair when one is half awake as opposed to being there for 18 or 20 hours. Plus, it wears out the litigants and lawyers. Further, it’s not safe often for lawyers or litigants to leave the courtroom at 11 or 12 at night, depending on the location and the area. Some people take public transportation and that puts them at a great disadvantage if the jury cannot leave until late at night.
Don’t talk so much. There’s nothing that irritates a good trial lawyer as when the judge just talks and talks and talks and talks. A judge should keep their own counsel and make decisions. Obviously, there is the give-and-take of argument which is good. Some judges seem to go on a monologue. Experienced judges know the less the judicial officer says, usually the better it is. Judges get themselves in trouble by sometimes talking too much. Further, excessive talking certainly delays a courtroom day if on every case, particularly at sentencing or pleas, the judge goes on and on and on and on. There is benefit in terms of trying to impress a litigant to change their lives, but that benefit can be said in a couple sentences, not 10 pages of paragraphs.
Don’t explain your decisions. A judge doesn’t have to. An explanation is only required if there is an appeal and opinions are written. Very rarely is there any benefit for a judge explaining why they ruled someone not guilty or guilty in open court or when they render a verdict in a civil case. There is no need for such an explanation.
Treat your law clerks and your judicial staff with respect. Nothing hurts a judge more in the eyes of lawyers and probably the general public than if the judge is mean-spirited to their court staff or the court clerk or their own law clerks. That doesn’t mean that the judge can’t, at times, be critical of them, but do it privately with the person and not in the public forum.
While on the bench, have a coat and tie on or, a female judge, proper professional attire and then have the robe over it. Nothing is more distressing, at least to lawyers and to the public, to see a judge who comes in with a robe draped over a T-shirt and jeans or a male judge not having a necktie on under the robe. Further, wear one’s shoes. If a judge walks out and they are in their bare feet or socks, that doesn’t register well. A judge has to be a symbol of dignity and respect. A judge doesn’t have to wear $1,000 suits or professional attire, but the judge should not treat the bench as a casual place where the robe cures the jeans and sweatshirt they have on underneath.
Don’t be casual. Every time one takes the bench, there has to be formality and decorum. That sets the tone for the courtroom.
Finally, require lawyers to stand when the judge rises and leaves the courtroom or enters the courtroom. Require lawyers to stand when they make objections or argue a point. That is the way litigants show respect for the position of a judge. It also creates a respectful atmosphere in the courtroom.
There are many other matters and issues that could be discussed. But, these are the issues that at least I find annoying at times. Obviously, there’s room for honest disagreement, but at least hopefully these comments will generate potentially future discussions and changes. •