As the Model Rules of Professional Conduct demonstrate, a lawyer may serve many functions for a client: advisor, advocate, negotiator, or evaluator, to name a few.  Under any role, however, a lawyer is obligated to act with the best interests of his or her client in mind, even when the client is not paying for legal services.  In this regard, attorneys must be mindful that they owe the same professional duties to both paying and pro bono clients.  Indeed, the New Jersey Advisory Committee on Professional Ethics long ago held in Opinion 671 that “the same ethical rules apply regardless of whether legal advice and representation is provided on a compensated or a pro bono basis,” and that there is “no separate, more relaxed version of applicable ethical precepts for attorneys providing pro bono advice.”  Advisory Committee on Professional Ethics, Opinion 671 (April 5, 1993).  “Duties of competence, confidentiality, and conflict avoidance, for example, all remain fully applicable.”  Id.  Likewise, law firms should not simply staff junior attorneys on pro bono matters to avoid the cost of staffing more senior attorneys on such matters, as the RPCs require supervising attorneys to ensure that those under their supervision comply with the requirements of the RPCs.  See RPC 5.1(b) (“A lawyer having direct supervisory authority over another lawyer shall make reasonable efforts to ensure that the other lawyer conforms to the Rules of Professional Conduct.”).

Much as the RPCs do not distinguish between compensated and pro bono work, neither do malpractice claims, and a lawyer’s failure to abide by the RPCs in the pro bono context in the same way he or she would in working for a paying client could just as easily open the lawyer up to a malpractice claim.  (See, for example, the recently filed case in the Superior Court for the State of California, County of Orange, Bernier, et al. v. Jones Day, et al., Case No. 30-2019-01085904-CU-PN-CJC.)  In short, lawyers should ensure that all clients are provided the same quality of work, regardless of compensation structure.

On June 25, 2019, the New Jersey Supreme Court’s Advisory Committee on Professional Ethics issued Opinion Number 735, deciding that Lawyer A can ethically purchase a Google AdwordSM or keyword that is competitor Lawyer B’s name (e.g., Pat Smith Law Firm purchases a keyword for Alex Doe Law Firm, so that when users search “Alex Doe Law Firm,” Pat Smith Law Firm will also appear in the search results, generally as an “ad.”  Lawyer A, however, crosses the line when (s)he pays a search engine to insert a hyperlink on Lawyer B’s name that diverts the user to Lawyer A’s firm when the user clicks on it.  Continue Reading Lawyers may purchase a Google AdwordSM or keyword that is a competitor lawyer’s name, but there are ethical limits to what lawyers can do with search engine services

There are three basic components to an attorney’s eligibility to practice in the State of New Jersey: (1) annual registration, including making the required annual payments to the Lawyer’s Fund for Client Protection (N.J. Ct. R. 1:28); (2) fulfilling the bi-annual CLE reporting requirements; and (3) maintaining an IOLTA (Interest on Lawyers Trust Accounts) fund (N.J. Ct. R. 1:28A).  Noncompliance with any of these requirements may render an attorney ineligible to practice.

Practicing law while ineligible may lead to ethics charges.  In fact, the current eligibility of an attorney under investigation for other alleged ethical infractions is routinely checked by the relevant disciplinary authority.  It is at this stage that an attorney may learn for the first time that (s)he is ineligible, perhaps through a completely innocent, technical oversight.  An ethics investigation that would otherwise be dismissed may now have the potential of proceeding to a formal complaint depending on the length of time of practicing while ineligible and the likelihood that the attorney knew or should have known (s)he was ineligible.

Moreover, there may come a time where an attorney needs to be admitted pro hac vice, and quickly. You do not want to find out you are ineligible when you are in a crunch. Worse yet, you don’t want to inaccurately represent in a certification to the court that you are active and in good standing in your jurisdiction.

We recommend that you confirm your status is active by going to the attorney index, which is available here.

If for some reason you are deemed inactive, find out why and immediately take corrective steps.  If you do so and the issue of your practicing while ineligible later surfaces, you will have a much higher chance of avoiding charge by having the infraction deemed as unknowing or de minimis.

Bonus tip:  If you move law offices, you must update your address on your attorney registration. This is required under Rule 1:21-1(a), and noncompliance may and has led to ethics charges.

The ABCNY has issued Formal Opinion 2019-5, requiring a lawyer receiving payment in cryptocurrency to comply with RPC 1.8(a) (business transactions with client), concluding it is different than an ordinary fee agreement.  It is thus advisable for attorneys to become familiar with RPC 1.8(a) and not assume that a typical engagement letter will be sufficient.

RPC 1.8(a) provides that:

A lawyer shall not enter into a business transaction with a client if they have differing interests therein and if the client expects the lawyer to exercise professional judgment therein for the protection of the client, unless:

  • The transaction is fair and reasonable to the client and the terms of the transaction are fully disclosed and transmitted in writing in a manner that can be reasonably understood by client;
  • The client is advised in writing of the desirability of seeking, and is given a reasonable opportunity to seek, the advice of independent legal counsel on the transaction; and
  • The client gives informed consent, in a writing signed by the client, to the essential terms of the transaction and the lawyer’s role in the transaction, including whether the lawyer is representing the client in the transaction.

ABCNY concluded that while RPC 1.8(a) “does not apply to ordinary fee arrangements between client and lawyer reached at the inception of the client-lawyer relationship” [Rule 1.8 Cmt [4C]], because cryptocurrency is more property than cash, RPC 1.8(a) may be implicated under the following circumstances:

  1. The lawyer agrees to provide legal services for a flat fee of X units of cryptocurrency, or for an hourly fee of Y units of cryptocurrency.
  2. The lawyer agrees to provide legal services at an hourly rate of $X dollars to be paid in cryptocurrency.

If, however, a client is given a choice between paying in dollars or cryptocurrency, the ABCNY found that RPC 1.8(c) is not implicated because in that situation paying in cryptocurrency is more of a convenience, rather than a requirement.

ABCNY then noted that RPC 1.8(a) is only implicated if the client expects the lawyer to advise the client concerning the fee arrangement.  Thus, “if the client is a sophisticated party who is knowledgeable about cryptocurrency or is represented by separate counsel, it is unlikely that the client expects the lawyer to exercise professional judgment for the client.  Indeed, in many instances the client may be more sophisticated than the lawyer on matters relating to cryptocurrency, in which case it would not be reasonable for the client to rely on the lawyer’s exercise of professional judgment.  Conversely, if the lawyer is advising the client about the implications of paying fees in cryptocurrency, then the client certainly would expect the lawyer to provide professional judgment on the client’s behalf in the transaction.”

Whether or not a client expects a lawyer to advise on the fee arrangement is a fact-intensive inquiry and attorneys should err on the side of caution.  The main takeaway is that in any fee arrangement concerning cryptocurrency, the attorney should review RPC 1.8(a) to determine whether it is applicable.

On June 25, 2019, the New Jersey Supreme Court’s Advisory Committee on Professional Ethics issued Opinion Number 736, deciding that a lawyer is not per se prohibited from concurrently serving as a municipal prosecutor and planning board attorney in the same borough.  This Opinion represents the latest in an ongoing series over the years that have responded to RPC changes on the delicate and often complicated conflicts of interest analysis that accompanies the representation of government entities – while cautioning lawyers to be mindful of the case-by-case analysis in RPCs 1.7(a)(2) and 1.8(k) that still applies. Continue Reading Lawyers may now serve as municipal prosecutor and planning board attorney in same municipality: (Opinion 736)

A recent Appellate Division case exposes the pitfalls of “judge-shopping” by a former law clerk with the cooperation of the judge. In Goldfarb v. Solimine, Docket No.  A-3740-16T2, (June 26, 2019) the panel ruled that a plaintiff alleging promissory estoppel in an employment context was entitled to a new trial on damages after an unusual practice was exposed, and after the now-retired trial judge refused to recuse herself.

Just prior to trial, the judge’s former law clerk texted the judge that a partner in her firm had a case on the upcoming trial list in a County with a central calendar (a calendar in which trial judges are assigned at random on the day of trial). The judge understood from the text that the partner liked appearing before her. The judge spoke to the Presiding Judge and manipulated the case assignment to herself, based on her seniority and the fact that she didn’t like trying car accident cases. Defense counsel found out about the text and moved to recuse. The judge denied the motion stating in her opinion, the practice of lawyers checking on judges’ availability was common and she believed the partner wanted her due to her skill and experience. During trial she barred plaintiff’s damages expert. The jury held defendant liable, but awarded limited damages.

The Appellate Division affirmed the jury on liability and reversed on damages. It did not opine on whether the practice of lawyers checking on judges’ availability was common, but criticized any attempt to select a judge, holding the method the defense firm used to have the trial judge assigned resulted in an appearance of impropriety and a perception of partiality.

A recent Appellate Division decision illustrates the importance of a solid engagement letter that sets forth both the scope of the engagement as well as any limitations on the scope, i.e., what the lawyer is not being retained to do. In Murphy v. Shaw, Docket No. L-0869-13 (decided June 21, 2019), the lawyer was successful in having a verdict against him reversed. But the real dispute was over the scope of the engagement. The client contended the scope of engagement included not only representing her in a municipal court action but also to sue several individuals – including the arresting officers, a municipality, and her insurance carrier – while the lawyer contended he was only retained to represent the client in the municipal court matter. The Appellate Court correctly noted that RPC 1.2(c) expressly permits an attorney, with the consent of the client, to limit the scope of representation, citing Lerner v. Laufer, 359 N.J. Super. 201, 217 (App. Div. 2003). The Court then focused on the Murphy/Shaw engagement letter, which expressly referred to the municipal court action by name, was limited to services performed while representing the client in municipal court, and made no mention of other claims against other individuals. The point to note, however, is that if the engagement letter specifically stated something like “we are not being retained to handle any other matter arising out of these facts, including civil claims against the arresting officer and the municipality,” it is possible that the time and energy spent to litigate the malpractice case in the first instance may have been avoidable.

The New Jersey Appellate Division recently confirmed how important it is to comply with procedural court rules, especially when the Court has given guidance as to how to comply with them.  In Cuomo v. TSI Ridgewood, Docket No A-4898-17T4, Defendant’s attorneys failed to comply with the requirements of electronic filing, as well as the submission of a filing fee.

While Defendants claimed inadvertent error (their lawyer tried to pay the $200 fee by check) and substantial compliance, the Appellate Division affirmed the Trial Court’s refusal to accept the application, rendering Defendant’s counsel possibly subject to a six-figure malpractice claim.

The Appellate Division recently permitted a law firm to proceed with litigation against a former expert who had been poised to provide expert testimony on behalf of the law firm’s clients in a medical malpractice proceeding.  Prior to trial, the expert declined to participate, and the court denied the clients’ request for leave to seek another expert.  Thereafter, the action was dismissed.  Following the dismissal, the law firm filed an action against the expert on behalf of the clients, which was removed to federal court.  The expert sought to disqualify the law firm, who then withdrew as counsel in that litigation.

Subsequently, however, the law firm filed an action on its own behalf against the expert, claiming that the expert’s failure to participate at the trial of the medical malpractice action was, among other things, a breach of contract and negligence.  The law firm sought its own damages allegedly incurred as a result of the expert’s failure to participate.  The expert moved to dismiss the action, and that motion was granted in part and denied in part.  On a motion for leave to appeal, the Appellate Division considered the question of whether the law firm properly possessed a cause of action against the expert, and answered that question in the affirmative.  Specifically, the Appellate Division held: “[P]laintiffs were in large measure acting as the estate’s representative in their dealings with defendants, but that does not preclude either a derivative or independent right to relief if defendants’ negligence or breach of contract wrongly caused plaintiff[’]s injury beyond or different from the estate’s alleged injury.  The very nature of plaintiffs’ contingency fee arrangement with the estate reveals plaintiffs had a real stake in the outcome of the medical malpractice action because certain obligations incurred during the litigation would be solely borne by plaintiffs if no recovery was obtained and because a recovery in favor of the estate would also benefit plaintiffs.”  Joseph E. Collini, Esq. et al. v. National Medical Consultants, PC, et al., Docket No. A-2857-18T4 (App. Div. June 4, 2019) (emphasis added).  The court thus concluded that the trial court properly denied the motion to dismiss and negligence claims, although the court also concluded that the trial court should have stayed the action pending the disposition of the clients’ federal action against the expert, as the attorney’s claims were largely derivative of those of the clients.

The New Jersey Appellate Division recently said no.  The Client in that case hired Attorney 1 to pursue an employment claim under a contract of employment that contained an arbitration clause as well as a Delaware choice of law clause. Approximately three years later, Client fires Attorney 1 and hires Attorney 2.  Attorney 2 files an arbitration demand within one month of being retained.  Unfortunately, Delaware’s three year statute of limitations had already run, and the arbitrator dismissed the demand.  Client thereafter sued Attorney 1 for failing to file the arbitration demand within the three-year statute of limitations.  Attorney 1 then filed an action for contribution against Attorney 2 under the Joint Tortfeasors Contribution Law, N.J.S.A. 2A:53A-3. Attorney 1 claimed that Attorney 2 was the proximate cause of any injury to the Client because Attorney 2 failed to properly brief the statute of limitations arguments before the arbitrator.

The trial court granted Attorney 2’s motion to dismiss for failure to state a claim because Attorney 1’s acts of purported malpractice occurred before  Attorney 2’s purported acts of malpractice.  The Appellate Division agreed, finding that Attorney 1 and Attorney were not “joint tortfeasors” under applicable law.  In order to be jointly liable, the lawyers have to have caused a single injury to the client.  “[S]eparate acts of malpractice cannot constitute the joint liability required under the Joint Tortfeasors Contribution Law.” D’Elia v. Kelly Law, P.C., No. A-4301-17T2 at *9 (App. Div. May 30, 2019).  Because Attorney 1 was alleged to have committed different acts of malpractice (failing to file an arbitration) from Attorney 2 (failing to properly brief an issue), the Appellate Division ruled that the claim for contribution was properly dismissed.