The Justice Department fired back this week at Jack Abramoff attorney Peter R. Zeidenberg for what it saw as his flip reply to a motion to disqualify him from the representation.
“The United States has serious concerns about one of its attorneys switching sides and believes that this matter deserves more serious and sober review. Defense Counsel’s almost flippant response in itself calls for the show cause order,” the government wrote in its reply memorandum.
The reply filed Monday continued a testy exchange between the government and Zeidenberg, who as Public Integrity Section lawyer in 2005 and 2006 helped prosecute Abramoff associate David Safavian for lying and obstruction of justice.
Failure to provide a proper standard of service (especially quality to vulnerable clients)
Breach of confidentiality: information security and cybercrime
Lack of independence
Very attractive integrity or ethics including improper or abusive litigation
Alongside bogus firms in breach of confidentiality, lack of independence are “new entries” into the professions risk outlook. It is the latter which caught my eye. It suggests a renewed interest in regulating the professional obligations to uphold the rule of law and the proper administration of justice and to behave independently.
The SRA reports that, “we have seen cases where pressure from influential clients has compromised firms’ prioritisation of the public interest.” The report goes into greater detail:
Lack of independence
Promotion of a client’s interests, or a desire to maximise commercial return, should not override wider obligations to the public interest and the proper administration of justice We acknowledge that the professional principles can, and do, come into conflict with each other However, when professional principles come into conflict, the one that best serves the public interest, in the particular circumstances, prevails There is an increasing trend towards corporate buyers of legal services, such as financial institutions and large multinational businesses, having sophisticated in-house legal departments This can change the balance of power between the client and their legal advisor Those we regulate must ensure they prioritise their obligations to act in the public interest, in accordance with their duties to court, and must resist client pressure which may adversely compromise their professional independence
Failure to act with integrity or ethics: improper or abusive litigation
Improper or abusive litigation is the misuse of legal proceedings (or the threat to bring proceedings) for unethical gains, either for the law firm, its clients or both. This is done by exploiting a client or third party’s lack of knowledge of the law or the lack of resources available to them. We have seen several cases where the justice system has been manipulated so that a firm can increase its financial return. This type of litigation is contrary to a solicitor’s duty to act in the public interest and has a significant negative effect on the public’s perception of the profession
The report argues that:
This risk is widespread, but is most relevant to firms engaged in corporate or city-based legal work. It may also be significant when a firm is reliant on a single or limited number of clients. Maintaining independence is also relevant to in-house solicitors, who may come under pressure from their employers.
It warns that, “sophisticated in-house legal departments,” exert greater scrutiny of, and pressure on, external law firms. “This can lead to law firms being presented with ‘take it or leave it’ contracts or prescriptive or onerous terms of engagement.”
Pressures law firms must manage include:
pressure to breach ethical or professional obligations – for example, to use a firm client account to provide a personal banking facility, or to mislead the court, or to breach duties of confidentiality to other clients
control over which clients the firm can and cannot act for – this could erode access to justice, particularly if the firm is one of few specialists in the area
being clear about who constitutes ‘the client’ – for example, when acting for a corporate client this may mean distinguishing between the interests of the client’s shareholders, its management and the individual who commissioned the legal advice These interests are not always aligned
The proposal appears to be to mainly pursue this through supervision relationships (the report is silent on enforcement in relation to the cases it has seen):
Through our supervision of firms we will explore how these risk are managed by law firms and aim to understand better the challenges firms face. We will share best practice on how firms manage these issues and balance their ethical responsibilities with commercial success
On abusive litigation the report emphasises:
firms being criticised by judges for aggressive correspondence in corporate litigation or accused of unethical conduct towards witnesses or their statements
judges highlighting serious concerns that ‘frivolous’ litigation was being brought forward by lawyers
he High Court warning that immigration solicitors face referral to the SRA if they make ‘abusive’ judicial review applications which fail to follow proper procedure
a number of cases where judges have dramatically reduced excessive costs claimed in litigation by over 90%
On the cybercrime front of the following alarming case study is offered:
Large law firm loses data to hackers
A solicitor at a large law firm received an email which looked like a message from the firm’s answering machine service He opened it, and this activated software to install a program called CryptoLocker
Once CryptoLocker had downloaded, it encrypted all the client and office files held by the firm, and a message came through that if the firm wanted the files decrypted, they would have to pay a £1000 ransom within 40 hours If they did not pay the ransom by the stated deadline, the encryption would become permanent and the firm would never be able to retrieve their files.
The firm’s IT department tried unsuccessfully for 2 days to break the encryption At this point, the firm tried to pay the ransom. However, the deadline had expired and so the files could not be recovered. The firm had to explain what had happened to all their clients A number of clients’ cases were severely affected, with court deadlines being missed
This could have been prevented relatively easily CryptoLocker does not spread across networks, and the only files it can encrypt are those that the user who opens the email can access Therefore, the only reason it affected all of the firm’s files was because the member of staff who opened the email had access to them all. In addition, the firm did not have remote backup of any of their files. If they had done, they would have been able to access the files from the backup and the attack would have failed
The report is silent on the identity of the firm. I do not know if it is emerged elsewhere. One can understand the SRA’s reticence, but also note in passing the broader regulatory emphasis on disclosing quality and ethics relevant material to clients (such as consumer complaints). Whether the SRA should disclose the name of the firm or not, I imagine this sort of information is being sought by sophisticated clients as part of their due diligence and taking firms on. I certainly hope so. What will happen where such breaches occur in firms serving less sophisticated clients? Will the SRA act? Would that be fair if they have allowed City firms anonymity?
There is perhaps less an emphasis in the report on changes in the market which are now seen as drivers of risks in and of themselves. Some hints of the extent of market change are indicated by the following statistical nuggets from the report:
the market share of the top ten conveyancing firms increased from five percent in 2010 to ten percent in 2012 17
in 2006 sole practitioners made up 41 percent of the profession; in 2013 this had reduced to 29 percent
there were 60 percent more law firm mergers in 2012 than in 2008
A version of this post was also posted today on lawyerwatch.
When the Honorable Jonathan Lippman, Chief Judge of the New York Court of Appeals, made New York the first state to establish a pro bono service requirement for bar admission, he may have sparked a national movement. Others states have quickly moved to adopt similar requirements, and eventually every state in the nation will have to decide whether or not to follow suit. Lippman’s law has three aims: to address the access to justice gap, to strengthen practical instruction so that new lawyers will be more “practice ready,” and to instill in new lawyers a more public service oriented sense of professional identity.
However, it seems clear that the rule as implemented in New York will not achieve its aims. The access to justice gap is not a superficial problem, it’s a structural one. It can be effectively addressed only by engaging the economic justice, racial justice, and voting rights inequities that remain at the root of it. Nor is it effective to implement an overbroad definition of pro bono with few built in measures for monitoring and feedback. This fails to provide a reliable basis for either measuring the progress of the project or ensuring that the new lawyers learn what they are supposed to from the experience.
This Article suggests that, while based on a good idea and a strong grasp of the lawyer’s traditional duty to serve the public interest, Lippman’s law as currently drafted in New York comes up short.
Hopefully yes, because there are a lot of proposals out there that would give people and businesses the right to do just about anything they want in the name of religion. I comment on one of those proposals here:
RFRA by contrast does a reasonably good job of balancing religious liberty with government’s legitimate interest in regulating some conduct that is not exclusively religious in nature. The Hobby Lobby decision recognizes that individuals can express their religious principles not only at worship but also in their daily life and work, whether they carry their work out as sole proprietors of a business, as partners in a business or through a closely held corporation. The real question is not the type of entity used for acting upon a personal religious belief, but whether the state has a compelling interest that should override a person’s right to act upon that belief.
In the Hobby Lobby case, the Obama Administration did not demonstrate a sufficiently compelling interest in its own particular plan for assuring widespread access to birth control, that would allow its regulations to override the religious liberty of individuals, and closely held corporations owned by individuals, who had a religious objection to paying for birth control. There are, after all, other ways the government can assure access to birth control besides making employers pay for it. The Court’s opinion was narrowly crafted to address these particular facts, and the Court directed a clear warning to those who would interpret the opinion to attack the validity of nondiscrimination laws and other regulations where the government much more easily can demonstrate that it is protecting a compelling interest.
The outcome of a RFRA case thus turns on a number of factors including first the extent of the government’s interest in the subject matter of regulation and second whether there are realistic alternatives to a particular type regulation that infringes upon religious liberty. The government could provide that if someone’s employer will not pay for birth control the government will pay for it or arrange for another insurer or a collective fund put together by insurers to pay for it. The Obama Administration had alternatives but chose not to pursue them. It would be a lot more problematic to say that a corporation, such a closely held investment bank can discriminate on the basis of religion (for example “we profess our Christian faith by not hiring Jews”), and that the government cannot prohibit this because the government can always find a job for the person discriminated against (for example at the SEC) (this indeed is what happened with some regularity before the 1960’s when government realized that it had a compelling interest in prohibiting employment discrimination in the private sector). The Hobby Lobby Court’s explicit effort to distinguish discrimination laws is a clear signal that the outcome would have been different in this very different factual context.
So we are left with the Court’s reasoned interpretation of RFRA, which is a difficult statute to interpret because it involves balancing tests rather than bright line rules (RFRA itself came into being because a conservative majority on the Court had previously refused to recognize any religious liberty exemption from generally applicable laws such as those that would prohibit use of controlled substances in Native American religious ceremonies). The fact that the Hobby Lobby Court has now refused to draw a bright line rule by making RFRA irrelevant to closely held corporations should be no surprise.
This decision will hopefully put to rest efforts, mostly at the state level, to enact religious freedom statutes that lack any balance whatsoever. Some of these proposed laws such as the Arizona bill I discuss above, are motivated by religious objections to same sex marriage, but have language so broad that they would give private businesses the right to engage in a wide range of discriminatory and destructive conduct in the name of religion. We have sufficient religious liberty with RFRA and a Court that broadly construes that statute. We do not need federal or state legislatures coming up with new laws that would allow religion to become grounds for individual or corporate abdication of all social responsibility.
The Supreme Court ruled in Hobby Lobby yesterday that three for-profit corporations cannot be required to adopt health plans that cover certain forms of contraception that are contrary to their religious beliefs. The nascent consensus seems to be that the holding is quite narrow and its effect on American women will be minimal. See, for example, here and here. A number of commentators have been highly critical of Justice Ginsburg's pointed dissent, claiming that much of it was hyperbolic and counterproductive.
I am not an expert on the operations of the Supreme Court so I will refrain from passing judgment on the the dissent's style. But I tend to agree with Justice Ginsburg that the logic of Alito's opinion in Hobby Lobby can be extended to corporations that do not resemble the family-run and operated entities that were before the Court. The holding is confined to closely held corporations, but closely held corporations come in many different forms and sizes. Some consist of a few employees whereas others are international conglomerates. Delaware law allows closely held corporations to have anywhere from one to thirty stockholders. Closely held corporations also happen to vastly outnumber and employ more people than public corporations do.
All this aside, even if the opinion's legal and practical significance is minimal, its expressive function cannot be ignored, and Justice Ginsburg's dissent should be seen in this light. The plaintiffs' (scientifically dubious) belief that birth control pills and IUDs are abortifacients trumped regulations that required employers to adopt health plans that covered these products, which millions of women use for a variety of reasons and are prescribed to them by doctors. Yes, perhaps the Obama administration will figure out a way to ensure that no one's contraception is jeopardized. But it strikes me as entirely appropriate for Justice Ginsburg to demonstrate outrage that women's health is given short shrift because of the Supreme Court's desire to accommodate an attenuated affront to the plaintiffs' exercise of religion. Indeed, four of the justices seemed unprepared to recognize that there is even a compelling public health case for expanded access to birth control.
It is, of course, worthwhile to remind the laity that the sky is not falling whenever the Supreme Court issues a controversial decision. But judges need not go along with their colleagues in making controversial decisions more palatable to the public, especially when those decisions are premised on such things as the allegedly fraught religious implications of making contraception more available to women in 2014.
The Supreme Court has upheld the longstanding tradition of prayer before legislative sessions. A good Congressional prayer, however, should seek God’s blessing of whatever Congress is doing – or not doing – at the time. The above translation of the Lord’s Prayer serves that purpose.
Many Members of Congress say they believe there will be a Judgment Day, a point that is emphasized in the weeks leading up to Election Day. We can say this prayer often and hope not to hear in reply those dreaded two words: “NO AMNESTY.”
Or we can go back to more traditional prayers, as well as back to our traditional religious and civic values, and then do something to fix the mess that purports to be U.S. immigration law.
We could at the same time cast aside hypocrisy with respect to another principle that politicians talk about almost as often as they talk about religion: free market economics. It is perhaps time for the government to stop using immigration law to prevent willing workers from working for the people who want to hire them. The vast majority of economists (at least those not running for Congress) view restrictive immigration laws with no more favor than do the vast majority of theologians and religious leaders.
And for those who think this comment is not relevant to lawyers and their ethics: Who is it that implements – or rather tries to implement -- these laws that Congress won’t fix? Over a dozen pages of my legal ethics casebook with Judge Noonan are devoted to this problem, and there will be dozens more if something is not done about it.
Recent years have seen an explosion of interest in commercial litigation funding which is regarded as a new phenomenon in the United States. Whereas the judicial, legislative and scholarly treatment of litigation finance has regarded litigation finance first and foremost as a form of champerty and sought to regulate it through rules of legal professional responsibility (hereinafter, the ‘legal ethics paradigm’) this Article suggests that the problems created by litigation finance are all facets of the classic problems created by ‘the separation of ownership and control’ that have been a focus of business law since the advent of the corporate form. Therefore, an ‘incorporation paradigm,’ offered here, is more appropriate. ‘Incorporating legal claims’ means conceiving of the claim as an asset with an existence wholly separate from the plaintiff. This can be done by issuing securities tied to litigation proceed rights. Such securities can be issued with or without the use of various business entities.
Indeed, in certain real life deals, previously overlooked by scholars, creative lawyers used securities tied to litigation proceed rights. The Article analyzes and then expands upon such instances of financial–legal innovation suggesting how various business entities can be used to deal with the core challenges presented by the separation of ownership of and control over legal claims. Specifically, the litigation funding problems being addressed by the incorporation of legal claims are (1) extreme agency problems; (2) extreme information asymmetries; (3) extreme uncertainty; and (4) commodification. In addition, the Article discusses how incorporation of legal claims can reduce various costs that litigation imposes in other transactions, such as mergers & acquisitions.
Family law courts in America are overwhelmed with self-represented parties who try their best to navigate an unfamiliar territory laden with procedural and evidentiary rules. Efforts to level the playing field in these courts have resulted in state entities and judges taking on roles that previously belonged to attorneys. State supreme court judges and state agencies draft and promulgate family law forms, such as divorce pleadings and paternity acknowledgments, to provide poor citizens access to justice. While these efforts have resulted in positive outcomes for some families, reliance on the state’s imprimatur has caused significant harm to others. Upon closer examination, the state has not adhered to the same ethical standards that ordinarily apply to judges and attorneys with regard to the development and dissemination of these forms. This Article is the first to explore whether state courts and agencies have overstepped ethical boundaries and subverted public interest to satisfy private interests of the state as regulator. It argues that these state forms are poor substitutes for attorneys and that the complexities of family law continue to warrant legal counsel in our current adversarial court practice.