Wednesday, October 12, 2016

Recent Ethics Opinions: More Naming From Texas + Not-So-Well-Known Knowns




Several ethics updates to share. First, recalling a bit of fun poked back in 2014 when the state took aim and title inflation (aka "The Too Many Chiefs in Texas" saga), comes a new update from a state famous for not being messed with and doing things big: "Ethics Opinion Questions Use of Swiss Verein Firm Names in Texas" --
  • "Texas lawyers practicing at firms organized as a Swiss verein may change how they identify themselves because of a recent opinion issued by the State Bar of Texas Professional Ethics Committee. Opinion 663, issued in September, concludes that under the Texas Rules of Professional Conduct, Texas lawyers in an organization such as a Swiss verein may not use the name of the organization as their law firm name on pleadings or other public communication unless all names in the verein are current or former lawyers in the firm or a predecessor as permitted by Rule 7.01(a)."
  • "The opinion, issued at the request of a Texas attorney practicing at one of the vereins, would presumably affect Texas lawyers in a number of firms, including five firms on the Am Law 100 ranking of the nation's highest grossing firms. Firms identified as Swiss vereins on that list include DLA Piper, Baker & McKenzie, Hogan Lovells, Norton Rose Fulbright and Squire Patton Boggs."
  • "A Swiss verein is a corporate holding structure wherein the firms share activities such as strategy and branding but maintain financial independence."
  • "Mark Osborn, a partner in Kemp Smith in El Paso who chairs the committee, said Texas ethics opinions are considered advisory and not binding on the Texas Supreme Court. 'Literally nothing is going to happen unless someone else does something,' Osborn said. For instance, he said, a Texas lawyer could face disciplinary action if someone files a grievance against the lawyer for using a Swiss verein name in the wake of the opinion. That would be a 'rare' occurrence, Osborn said. More likely, firms will read the opinion and decide if they need to make changes because of it, he said."
That last quote about "doing something" almost begs for a joke about "drawing," or Jack Palance in Shane..

Next, speaking of names, North Carolina notes that: "Equity Stake Isn’t a Prerequisite for ‘Partner’ Label" --
  • "The North Carolina State Bar Association issued Formal Ethics Opinion 9 advising that professional corporations are allowed to designate lawyers in their firm as 'partner,' 'income partner,' and 'non-equity partner,' even if those lawyers do not own any interest in the firm and have no authority to vote on corporate governance matters."
  • "However, a lawyer who is designated as a partner must have been promoted based on legitimate criteria. Additionally, the Ethics Committee noted that any firm lawyer who has been promoted to “partner” will be held to all professional responsibilities that accompany that role, such as the supervisory responsibilities required by Rule of Professional Conduct 5.1."
Here in California, we sometimes like things complicated and nuanced, which brings us a reconfirmation of what might be called the "Not-So-Well-Known Knowns" principle: "California opinion reaffirms traditional view on the extent of the duty of confidentiality" --
  • "On that point, California's interim ethics opinion reaffirmed the old principle concluding that '[a] lawyer may not disclose his client’s secrets, which include not only confidential information communicated by the client to the lawyer, but also publicly available information that the lawyer obtained during or related to the professional relationship which the client has requested to be kept secret or the disclosure of which might be embarrassing or detrimental to the client.' More than a year later, the interim opinion has been officially published as Formal Opinion 2016-195 and it is available here."
Finally, from Iowa, comes a bit of truth or dare: "Lies to Counsel Violate Rule on Truthful Statements" --
  • "The ethics rule against making false factual statements to third persons covers lies to opposing counsel, the Iowa Supreme Court held Sept. 16 ( Iowa Supreme Court Attorney Disciplinary Bd. v. Barnhill , 2016 BL 305056, Iowa, No. 16-0731, 9/16/16 )."
  • "Rule 32:4.1(a) of the Iowa Rules of Professional Conduct forbids false statements to third persons about material facts when representing a client. Opposing counsel is a third person within the meaning of that rule, even though there’s a separate professional conduct rule on fairness to opposing counsel, Justice Daryl L. Hecht said."
  • "The opinion highlights the broad duty of honesty lawyers have towards anyone they deal with on behalf of on a client. Opposing counsel isn’t excluded from the universe of third persons to whom lawyers owe the obligation of truthfulness, according to the court."

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