| LEO Num | Topics | Summary | Date |
ABA-514
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| (a lawyer who jointly represents both an organization and its constituent owes each of them the same full duty (this opinion does not address a deposition setting, where the lawyer may either represent just the organization, or may represent both it and the constituent deponent); an organization’s lawyer does not jointly represent a constituent “simply by virtue of . . . communicating with the constituent,” but such a lawyer gathering facts rather than giving advice normally should give an Upjohn warning to avoid inadvertently establishing such a relationship; lawyers sometimes face “circumstances in which the lawyer knows or reasonably should know that the organization’s [non client] constituent is likely to have legal interests at stake if the individual acts on the lawyer’s advice,” in which case the lawyer may have duty: to engage in “a more in depth conversation“ to “satisfy the lawyers duty to undertake ‘reasonable efforts to correct’ a constituent’s misunderstanding of the lawyer‘s role as lawyer to the organization, explain to such non client constituents “that their actions on behalf of the organization may have personal consequences,” and that if they “want legal advice about how a proposed a course of conduct will affect their personal legal interests, the constituents must seek that advice from their own counsel, not from the organization’s lawyer;” in some circumstances, the lawyer must similarly advise the organization that its future conduct might create legal risks to its constituents; although perhaps not required, lawyers would be “well advised” to: “clarify their role” at other times, “avoid referring to individual constituents as their clients”, and “correct individual constituents who refer to the organizations lawyers as the constituent’s own lawyers”) | 1/8/2025 |
ABA-515
|
| (analyzing lawyers’ ability to disclose client confidences if they are victims of their clients’ criminal conduct; HYPOTHETICALS: describing several possible hypothetical situations in which clients victimize lawyers: (1) a foreign client hires the lawyer for a collection matter, but the debtor’s payment to the lawyer is discovered to be fraudulent after the lawyer has already transferred the expected amount to the client (this scam can succeed because a bank can “clear” a check and make funds available months before the bank “collects” those funds or discovers the fraud); (2) in a similar situation, the lawyer discovers the fraudulent scheme before it can be consummated; (3) a lawyer is a victim of or a witness to a client’s shooting; (4) a visiting client steals the lawyer’s wallet from her office; CONFIDENTIALITY DUTY’S APPLICATION AND EXPLICIT EXCEPTIONS: explaining that (1) in the first scenario, there may not be a bona fide client or prospective client relationship formed, thus freeing the lawyer to disclose the fraud; (2) in rare circumstances, information relating to the crime may not be “information relating to the representation” deserving of protection; but warning that “Rule 1.6 (a) covers substantially more information then does the attorney-client privilege, which ordinarily protects only confidential communications between the client and the lawyer or their respective agents;” turning to Rule 1.6 (b)’s exceptions, explaining that since 1980 the ABA Model Rules have expanded the number of permissible disclosures from 3 to 7; noting that a lawyer might rely on: Rule 1.6 (b)(1) if the lawyer reasonably believes disclosure is necessary “to prevent reasonably certain death or substantial, bodily harm;” Rule 1.6 (b) (3) to “prevent, mitigate or rectify substantial injury to the financial interests or property of another that is reasonably certain to result or has resulted from the client’s commission of a crime or fraud in furtherance of which the client has used the lawyer’s services” (this exception might apply if the lawyer was victimized by the client’s financial crime and there were other possible victims - but not in the four hypotheticals described above); Rule 1.6 (b)(5) to “establish a claim or defense on behalf of the lawyer in a controversy between the lawyer and the client” (this exception “would not justify initially reporting to law-enforcement authorities,” but might apply in a later civil claim); IMPLICIT CONFIDENTIALITY DUTY EXCEPTIONS: noting that the Model Rules are “rules of reason“ in explaining that lawyers might rely on an “implicit exception” to correctly “assume that, if a client commits a crime against them or their employees or associates, they can report the crime to law enforcement authorities and appropriate others;” listing various implicit exceptions later codified: (1) lawyers’ “widely assumed” freedom to “seek advice from legal experts outside their law firms regarding compliance with the professional conduct rules“ - even before the ABA’s 2002 adoption of Rule 1.6 (b)(4); (2) ABA LEO 455 (10/8/09)’s acknowledgment that lawyers “moving from one firm to another” may disclose certain information about their representations, which was eventually codified in Rule 1.6 (b)(7); recognizing two more implied confidentiality duty exceptions that have not been codified: (1) because lawyers would be “too easy a target of clients’ crimes ” if they were required “to remain silent when their clients abuse the relationship by committing a crime against the lawyer,” explaining that an implied confidentiality exception applies in that situation, and cleverly noting that “lawyers may metaphorically take a bullet for the client, but they cannot reasonably be expected to take a bullet from the client and to keep quiet about it;” (2) because it “would be unreasonable to conclude that a lawyer may report when the lawyer is personally a victim of a client’s criminal act but not when the lawyer witnesses a crime against someone associated with the lawyer or related to the lawyer like a staff member of the lawyer firm or against someone such as a family member,“ recognizing an implied confidentiality duty exception allowing that disclosure – but “only to the extent the disclosure of information is reasonably necessary”) | 3/5/2025 |
ABA-512
|
| (Lawyers relying on generative artificial intelligence (“GAI”) tools must consider several ethics issues: (1) COMPETENCE: lawyers relying on such tools “must have a reasonable understanding of the capabilities and limitations of the specific GAI technology that the lawyer might use” (including both its benefits and risks, including the possibility of what are called “hallucinations” when the AI generates faulty information); lawyers’ competence duty means that “lawyers may not abdicate their responsibilities by relying solely on a GAI tool to perform tasks that call for the exercise of professional judgment,” but must instead apply the “appropriate amount of independent verification or review” of what is generated by the tool; in some situations lawyers may “eventually have to use” such tools to act competently in representing a client; (2) CONFIDENTIALITY: lawyers must obtain a client’s “informed consent . . . prior to inputting information relating to the representation into such a GAI tool,” although using AI tool for “idea generation” may not require inputting protected client information; lawyers may not just add “boiler-plate provisions to engagement letters purporting to authorize the lawyer to use GAI;” lawyers must understand any AI tool’s “Terms of Use;” (3) COMMUNICATION: lawyers must communicate with their clients if they intend to use generative AI, and must also advise the client when such generative AI “will influence a significant decision in the representation” or if the lawyer used generative AI in undertaking a project for the client;” (4) DEALING WITH TRIBUNALS: lawyers must comply with the pertinent tribunal’s requirements when using generative AI; (5) SUPERVISORY RESPONSIBILITIES: managerial and direct supervisors in a law firm or law department must train their colleagues on the possible use of generative AI and the risks; lawyers must also supervise any generative AI supplier, as with any other outsourced work; (6) FEES: lawyers billing by the hour must only bill for the time they use, and may not add to that time what they consider an effort saved by using generative AI; lawyers charging a flat fee may not be able to do so if generative AI saved a material amount of the time they would otherwise have spent; as in other situations, lawyers may charge generative AI expenses, but may not add a surcharge to the actual cost unless there is some overhead that may be appropriately charged; absent an agreement with the client; lawyers must also be careful when charging a client for use of a “proprietary, in-house GAI tool” – including limiting the charge to the actual expenses and pertinent overhead; absent client consent; lawyers may not charge the client for time the lawyer spends learning about generative AI.) | 7/29/2024 |
ABA-516
|
| (MAJORITY: lawyers may decline to take a new matter for “almost any reason,” and may terminate a representation under ABA Model Rule 1.16(b) -- which contains both mandatory and permissive grounds for termination; under ABA Model Rule 1.16 (b)(7) lawyers may withdraw from a representation at any time as long as there is no “material adverse effect on the interests of the client“ in that matter –- such as if the withdrawal “will significantly impede the forward progress of the matter, significantly increase the cost of the matter and/or significantly jeopardize the client’s ability to accomplish the objectives of the representation;” a lawyer’s withdrawal is unlikely to have such a “material adverse effect” if: (1) “the representation has barely gotten off the ground;” (2) “co-counsel can successfully complete the remaining work”; (3) the lawyer’s work “is substantially completed“ and some other lawyer can handle the completion; (4) “there is no ongoing or imminent [“impending”] matter at the time;” although some courts prohibit lawyers from dropping a client like a “hot potato“ and then taking a matter adverse to the now-former client, “some courts recognize that the principle is not absolute” –- for example, if the lawyer’s dropped representation is “sporadic, non-litigious and unrelated to the issues” in the new adverse matter; the “hot potato“ principle is not based on the ethics rules (in which “the lawyer’s motivation is not relevant”) but instead is “an extension of the [“judicial”] common law duty of loyalty” in which courts “treat the lawyer’s withdrawal as if it did not occur;” DISSENT: “we fear [that the majority’s analysis] will prove more harmful than helpful to lawyers,” because: (1) it may discourage lawyers from “transform[ing] current clients into former clients” by closing files, thus freeing the lawyers to take matters adverse to the now-former clients; (2) it “fails to address the breadth” of “hot potato” caselaw, and whether dropping a client “for the purpose of turning around and filing suit against it … could itself qualify as an act inflicting [an ABA Model Rule 1.16 (b)(1)] material adverse effect” on the dropped client; (3) it fails to adequately address ABA Model Rule 1.16 (a)(1)’s mandatory withdrawal rule under the “thrust upon exception to the hot potato doctrine; (4) it “fails to offer guidance for transactional lawyers”) | 4/2/2025 |
ABA-513
|
| (Recent changes to ABA Model Rule 1.16 make explicit what has always been an implicit “duty to inquire into and assess the facts and circumstances of a representation” (as previously described in ABA LEO 463 (5/23/13) and ABA LEO 491 (14/29/20)). ABA Model Rule 1.16(a)’s now-explicit duty applies “more broadly” than just to the type of transactions that may involve a “lawyer facilitation of criminal transactions such as money laundering and terrorist financing”. The duty exists when any representation begins, and also “continues throughout the course of the representation.” As explained in the earlier ABA LEOs, the new ABA Model Rule 1.16(a) provision requires lawyers to “conduct an inquiry and assessment, appropriate to the circumstances, to avoid counseling or assisting in the client’s fraudulent or criminal conduct.” The assessment must take “[a] risk-based approach [which] incorporates the concepts of reasonableness and proportionality.” ABA Model Rule 1.16 cmt. [2] identifies “five non-exclusive factors” that lawyers might consider when undertaking the risk-based analysis. The ABA Model Rule 1.16 amendments “anticipated that only certain representations would necessitate only a significant inquiry, namely, those where there appeared to be a heightened risk of crime or fraud typically because of the nature of the representation or because of the appearance of ‘red flags’”. Lawyers must decline a representation if they have “actual knowledge” that their services will be improperly used. Otherwise, lawyers must “conduct a reasonable risk-based inquiry, not a perfunctory one and not one that involves a dragnet-style operation to undercover every fact about every client.” Thus, “lawyers must conduct a reasonable inquiry and assessment, proportionate to the risks presented by the facts and circumstances.” The assessment does not involve a “‘zero failure’ approach” – and “the lawyer’s judgment should be evaluated as the time it was made, not with the benefit of hindsight.” Lawyers should focus on representations that have heightened risk of misuse – such as those involving “purchasing and selling real estate,” representations where clients “use time pressure to rush a lawyer’s work, hoping to achieve their misconduct before the lawyer (or anyone else) has time to discover it,” and representations that involve “transferring large sums of cash” – especially funds “originating outside the United States” (because experience has shown that “[a] higher risk of participating in money laundering or terrorist financing exists when the lawyer ‘touches the money’”. In connection with conducting such a necessary inquiry, “[t]he lawyer need not resolve all doubts” – “if some doubt remains even after the lawyer has conducted a reasonable inquiry, the lawyer may proceed with the representation as long as the lawyer concludes that doing so is unlikely to involve assisting or furthering a crime or fraud.” | 8/23/2024 |