Judge Ralph Erickson, Chair
Richard E.T. Smith, Chair, Disciplinary Board
Chair Erickson called the meeting to order at 10:00 a.m. and drew Committee members' attention to Attachment B (September 9, 1999) - Minutes of the June 8, 1999, meeting. Randy Lee requested the following changes to the first paragraph on page 4: delete the reference to Rule 1.14 and replace the reference to Rule 1.16 with Rule 1.6.
IT WAS MOVED BY BEN HAHN, SECONDED BY CURT CORNELIUS, AND CARRIED UNANIMOUSLY THAT THE MINUTES, AS CORRECTED, BE APPROVED.
Return of Client Papers - Report
Chair Erickson drew Committee members' attention to the report and analysis, distributed September 13, concerning Rule 1.16, Rules of Professional Conduct, and the issue regarding return of client papers. Staff distributed comments submitted by Paul Jacobson, Disciplinary Counsel, regarding the report and its recommendations. A copy of the comments is attached as Appendix A.
At the request of Chair Erickson, Randy Lee then summarized the report regarding possible amendments to Rule 1.16. Randy Lee said Paul Jacobson's concerns are that the proposed addition to the comment set out in the report on page 6 does not provide the kind of direction lawyers need on this issue and will not, therefore, eliminate or reduce client complaints or inquiries to the SBAND Ethics Committee for advice. He agreed with these concerns, but said the kind of clear advice contemplated by Paul Jacobson's comment is not possible because situations are too numerous and facts too different. Therefore, he suggested simply alerting lawyers to the problems in the area and leaving it to them to decide what to do in the particular case. That, he said, is the essence of the bold print advisory set out on page 6 of the report. He noted that Paul Jacobson had suggested it may be possible to do both: provide the advisory identified in the report and also provide the guidance described in Appendix A of the June 8 meeting minutes. But, he said, the two approaches seem to point in opposite directions one offers an answer, while the other asserts there is only case-by-case analysis and not, therefore, a generally applicable answer.
Judge Erickson observed that during his service on the SBAND Ethics Committee it seemed questions in this area were mainly about retaining papers until the lawyer was paid for the cost of making copies, which is not a correct assertion of either statutory lien discussed in the report.
Randy Lee described the most troublesome situation as one in which the client has demanded the file, the lawyer has made copies, and the lawyer then attempts to charge the client for the cost of making the file copies. Ethics opinions, he said, routinely disallow such efforts to charge for copies.
Mike Wagner said he is not opposed to Paul Jacobson's suggested approach, but it should not be set out in the Comment to the rule. Additionally, he said if a client has already received copies, the lawyer should not be burdened with the responsibility of providing additional copies whenever the client requests them.
Karen Braaten said there is a need to provide a warning about the appropriate claiming of a lien in these situations. Mike Wagner agreed and said he preferred the advisory set out in the report as it is an accurate statement of the law.
Sandi Tabor said the issue is more often one of a person wanting the original file and not just a copy. It would be helpful, she said, if what the client is entitled to original or copy of the file were clarified. Judge Erickson observed that the lien statutes pose problems for such an approach.
Marilyn Foss suggested simply abolishing the statutory liens. Dan Crothers observed that there is a proper place for the charging lien, but he agreed the retaining lien should be abandoned. Randy Lee noted that most lawyers likely do not clearly understand that there are, in fact, two different kinds of liens.
Christine Hogan wondered whether spelling out exactly what must be returned would solve most issues. Judge Erickson said it would solve some problems, but would be an incorrect statement of law.
IT WAS MOVED BY MIKE WAGNER AND SECONDED BY KAREN BRAATEN THAT THE COMMITTEE ADOPT THE ADVISORY SET OUT ON PAGE 6 OF THE RULE 1.16 REPORT.
Mike Wagner said the advisory is a correct statement of the law and gives guidance. He said Paul Jacobson's recommendation (Appendix A of the June 8 meeting minutes) is acceptable, but it should be included in a separate rule provision.
THE MOTION CARRIED UNANIMOUSLY.
IT WAS MOVED BY MARILYN FOSS, SECONDED BY DAN CROTHERS, AND CARRIED UNANIMOUSLY THAT THE BOARD OF GOVERNORS PURSUE REPEAL OF THE RETAINING LIEN STATUTE.
Mike Wagner said the repeal of the retaining lien statute does not answer questions regarding a client wanting a copy of the file and the lawyer charging excessively for the copy. In response to a question from Christine Hogan, he said the concluding paragraph of Paul Jacobson's recommendation would clarify issues concerning copies.
Sandi Tabor said there is still the issue concerning what the client receives (original?) and what the lawyer retains (copy?). These are the questions, she said, the Association most often receives.
Pat Maddock questioned whether the original is, in fact, the client's property. Similar to hospital records, he said, the original file is the lawyer's property, but the client has an absolute right of access to the file for copying. Karen Braaten agreed, although she said original documents given to the lawyer by the client would be the client's property.
Randy Lee suggested perhaps adding language to Rule 1.4 governing communication to cover the issue. The questions being discussed, he said, could arise during representation, as well as after representation. He noted that Mike Williams' earlier concern about doctors' reports is addressed, in part, in the Comment to Rule 1.4.
Mike Wagner suggested a subcommittee be formed to develop a proposed method for addressing copying of client files. In response to a question from Chair Erickson, Randy Lee, Mike Wagner, and Pat Maddock agreed to develop a proposal for consideration at the next meeting.
Duty to Report Misconduct - Report
At the request of Chair Erickson, Randy Lee reviewed Attachment C (September 9, 1999) - his report regarding possible amendments to Rule 8.3, Rules of Professional Conduct, governing a lawyer's duty to report misconduct. He said the draft amendments set out on the last page of the report include all items discussed at the June 8 meeting concerning possible exceptions to the general duty to report misconduct. He noted that the ABA had amended the Model Rule to add an exception to the duty to report in situations in which a lawyer learns of misconduct while serving on a peer assistance board. This is, he said, a narrow exception that is essentially a permission not to report, rather than an identification of information that is privileged. Specifically, he said, the draft amendments include the following new exceptions: (c)(2) disclosure by a member of the SBAND Ethics Committee of information received in the performance of Committee work; (c)(3) disclosure by a member of the district inquiry committee or disciplinary board of information received in the performance of official duties; and (c)(4) disclosure by a lawyer of information concerning misconduct obtained while consulting another lawyer about that lawyer's compliance with the Rules of Professional Conduct.
Marilyn Foss wondered whether the exceptions set out in (c)(2) and (3) are needed in light of the broad exception provided in (c)(4).
Ron Reichert observed that during inquiry committee investigations of individual cases, misconduct not directly at issue is sometimes discovered. In such cases, he said, there is an obligation to report and, as a consequence, he is troubled by the proposed (c)(3) exception, which would not require disclosure of such information by a member of the inquiry committee.
Judge Erickson said there is a difference with respect to the SBAND Ethics Committee in that a lawyer voluntarily brings a question to the committee and requests an opinion. At some point in the consideration of the question, he said, it may become apparent that the lawyer has already violated an ethical rule. There could be, he said, a chilling effect on lawyers' willingness to seek committee advice if the committee is obligated to report any misconduct discovered while addressing a request.
Randy Lee said the question becomes one of balancing the duty to report misconduct and the willingness or freedom to seek advice from the Ethics Committee.
Marilyn Foss wondered why the method of obtaining information about misconduct should give a lawyer a free pass on the misconduct.
Connie Sprynczynatyk asked what the expectation is of a person requesting an ethics opinion. Dan Crothers responded that lawyers seek advice from the Ethics Committee in part because of the rule provision that reliance on committee advice shelters the lawyer from disciplinary action as to future conduct addressed in the advisory opinion.
Sandi Tabor said if the proposed (c)(2) exception, which would not require disclosure by a member of the Ethics Committee, is removed then the committee will be left to handle these issues as it has in the past sometimes liberally construing rules or characterizing the activity as being of minor importance.
Marilyn Foss observed that if the duty to report is considered important, then it should be abided by, rather than creating numerous exceptions to the duty.
Randy Lee observed that under the old professional conduct rules, the duty to report applied to all violations and, as a consequence, was routinely ignored. The ABA Model Rule, he said, then constructed a narrower duty to report, i.e., when there is a substantial question about the trustworthiness of the lawyer. Now, he said, the question is whether this approach should be narrowed still further.
Dan Crothers said the rules are intended to protect the public and, consequently, he would not favor any of the proposed amendments.
IT WAS MOVED BY DAN CROTHERS AND SECONDED BY MARILYN FOSS THAT THE DRAFT AMENDMENTS BE REJECTED.
Karen Braaten observed that one of the purposes of looking at exceptions to the duty to report is to provide assistance for lawyers who may have problems. She noted that the Texas rule described in the report allows a lawyer to report another lawyer with a substance abuse problem to an assistance program. She suggested reviewing the Texas rule in conjunction with discussion of possible diversion programs.
Dan Crothers said his experience in the disciplinary process indicated that impaired lawyers are also likely to be stealing money from clients. It is not, he said, in the public's or bar's best interest to allow that activity to continue, even if the lawyer is seeking some kind of peer assistance.
THE MOTION CARRIED UNANIMOUSLY.
At the request of Chair Erickson, Sandi Tabor summarized her September 13, 1999, memorandum reviewing rules in other jurisdictions governing lawyer advertising.
Chair Erickson then called on Ron Reichert and Mike Williams for comments concerning their review of local advertisements and websites. Ron Reichert said he is not aware of many problems with respect to advertising in North Dakota, although there are problems in other states and they will likely surface in North Dakota at some point. He said some lawyers are concerned about mail solicitations in North Dakota by lawyers from other states. In that regard, he said it may be wise to require retention of copies of advertisements, including mail solicitations, for a set time period.
Judge Erickson said North Dakota rules allow direct solicitation across the board unless there is reason to know the person did not want to be contacted.
Mike Williams said he reviewed the yellow pages, television ads, and North Dakota websites. Law firm websites in North Dakota are interesting, he said, but pose no ethical problems. They follow, he said, a more or less standard format in providing firm and attorney profiles. He distributed examples of law firm websites, a copy of which is on file with staff.
Mike Williams said he has most often heard three general complaints about lawyer advertising. The first, he said, is the simple concern that lawyers advertise at all, although people now seem to be less worried about this general issue. The second concern, he said, is with respect to advertisements of questionable taste, but he said it is very difficult to regulate taste. He said the last area of concern is that of the content of advertisements which can be regulated, but which, as well, does not seem to be a serious cause for concern at the present time. Direct solicitation, he said, is the most significant issue and should be reviewed closely.
With respect to advertising, Judge Erickson said there is a dichotomy between what is in the lawyer's interest and what is in the public's interest. The Committee's purpose, he said, is to set standards that protect the public. However, he said, the public itself has competing interests. There is, he said, an interest in acquiring information for the informed selection of a lawyer. There is also, he said, the right to access information that constrains blanket prohibitions on advertising. Lastly, he said, there is the right to be protected against unduly intrusive and unreasonable advertising practices.
Chair Erickson then requested comments from lay members of the Committee regarding their impressions concerning lawyer advertising and whether the public needs more protection in this area. Connie Sprynczynatyk said the website information illustrates the impact of technology on the profession, which she does not find intrusive or inappropriate. She said she does not like direct solicitation and would be concerned if the legal profession in North Dakota became more involved in such practices. Protecting the public, she said, is a significant issue particularly with respect to older residents who are vulnerable to influence. She said the Internet is of concern in one area and that is with respect to providing legal services, such as preparation of wills.
Fran Gronberg said there are a few electronic media advertisements and the print media advertisements concerning legal services are not intrusive. She agreed that lawyer involvement in direct solicitation would be objectionable.
Curt Cornelius said he is not aware of any problems and he agreed that the Internet could be a significant issue. Direct solicitation, he said, would be troublesome if it became an obvious trend.
Ben Hahn said there are no particular advertising problems in the Fargo-Moorhead area, although certain ads seem to border on inflating what can be obtained or provided in the way of legal services. He agreed the Internet has potential for creating significant problems.
Chair Erickson said lay members seem to share a concern about technology and direct solicitation, but there is little worry about current print or television advertising. He suggested the Model Rule could be a useful starting point and that retaining copies of advertisements may be a reasonable requirement.
Dan Crothers suggested the Committee review the Model Rule and perhaps include rule provisions on letterhead and firm names and address, as well, concerns about the Internet.
Judge Erickson, Dan Crothers, and Mike Williams agreed to prepare a draft proposal for review at the Committee's next meeting.
Randy Lee suggested the review not be undertaken with the idea that North Dakota rules have no restrictions on direct solicitation. There are, he said, limitations, but they are admittedly difficult to enforce.
At the request of Chair Erickson, Christine Hogan distributed and summarized a memorandum describing that recent ABA activity regarding multidisciplinary practice. A copy of the memorandum is attached as Appendix B.
Christine Hogan said North Dakota, like other states, now has the opportunity to review the merits of multidisciplinary practice, which amounts to relaxing Rule 5.4 to allow sharing of fees with non-lawyers. She said all who have reviewed the issue have stressed the importance of maintaining the profession's core values of independence, confidentiality, loyalty to the client, and avoiding conflicts of interest. She said the hope of proponents of multidisciplinary practice is that lawyers in such a practice will abide by the professional rules. But, she said, it is nearly impossible to exercise independent judgment if the lawyer is being paid as a member of a non-lawyer multidisciplinary practice. The challenge, she said, is to find a way to change how services are provided without courting the demise of the profession.
Randy Lee observed that working for a non-lawyer group will compromise loyalty and independence. However, he said, it is important to be aware that current rules already admit a lawyer's compensation can come from somewhere other than the client, but the lawyer can still be loyal to that client. He noted that concepts of confidentiality and undivided loyalty are simply not recognized in other legal cultures around the world and lawyers in the United States cannot be insulated from that.
Sandi Tabor said the issue of multidisciplinary practice is on the agenda because there is an opportunity to solicit comment from members of the state bar. She suggested developing an informational flyer to distribute before regional bar meetings around the state. The brochures, she said, would provide background information for purposes of discussion when Paul Richard, the State Bar Association President, conducts meetings and discussions with the regional bar associations. She said the hope of the Board of Governors is that the Committee will review the issue of multidisciplinary practice and provide recommendations concerning what North Dakota lawyers think about this initiative.
Committee members agreed providing background information for discussions around the state would be helpful.
No further business appearing, the meeting was adjourned at 1:30 p.m.
Jim Ganje, Staff