VIRGINIA BEACH – Neither lawyers who want to leave a law firm nor those who remain would be able to contact the firm’s clients until the two sides have tried to forge a joint letter advising clients of the breakup, under a proposed new ethics rule.
When the parties can’t agree on a joint letter, any communication must provide three options for the client – to stay with the firm, to go with the departing lawyer or to find a new lawyer.
In recommending new Rule 5.8 of the Rules of Professional Conduct, the Virginia State Bar seeks to establish that the prescribed procedures are obligations, not mere suggestions from a legal ethics opinion.
The VSB Council sent the proposed rule to the Supreme Court of Virginia for consideration after some fine tuning at the VSB Annual Meeting in Virginia Beach June 12.
The proposal for a court-imposed rule, to replace guidance from existing LEOs, comes amid prolonged court proceedings following a split at a Richmond personal injury firm.
Seven lawyers who left the firm are asking for sanctions, claiming the firm improperly tried to keep clients from choosing the departing lawyers to handle their injury claims. The firm responded with similar allegations about the departing lawyers.
Allegations in that case illustrate the concerns of the VSB’s Standing Committee on Legal Ethics.
Despite specific guidelines in the LEOs, “there still seems to be a rush to the post office or rush to the phone to try to contact clients” in law firm splits, said Marni E. Byrum of Alexandria, chair of the ethics committee.
The key concern is protection of the client, Byrum said.
Questions and conflicts are common. “Hardly a day goes by in my office that we’re not faced with addressing this situation,” said VSB Ethics Counsel James M. McCauley. “There’s a lot of frustration, fear and lack of trust in law firm breakups.”
In response to comments about the proposed rule, the ethics committee added language to establish that – if the client remains silent – the client stays with the lawyer “primarily responsible” for the client’s active matters. The committee also added language to clarify what triggers the need to provide notice.
Further tinkering ensued at the beach. When a lawyer departs a firm and the client fails to choose his or her course, the client would stay with the firm unless the firm terminates the agreement in writing, under a last-minute revision approved by the council.
The change came in response to concerns from the Williams Mullen firm and some council members that the rule would trigger confusing client notice requirements whenever junior associates decided to move on.
The proposed rule was sent to the Supreme Court on a vote of 64-1, with David A. Oblon of Arlington the lone dissenter.
VSB urges tighter rule for conflict checks
The VSB Council also approved a revision to Rule 1:10 to prevent lawyers from intentionally avoiding knowledge of a conflict that should prevent them from taking a new client. The rule would add language barring representation when a lawyer “reasonably should know” about a firm conflict.
Byrum hoped attention to the change would force lawyers to focus on the need to maintain a system to check for conflicts.
“I was stunned to learn some attorneys do not know they have to have conflict checks in their firm,” Byrum said. “We are proposing this change to move attorneys in that direction.”
VSB in austerity mode
State government belt-tightening is already being felt at the VSB. Perhaps in anticipation of a new round of state budget cuts due to projected revenue shortfalls, the VSB has implemented a hiring freeze and is looking for other ways to meet a 5-percent expense reduction.
“We either have to cut expenses or raise dues. Or both,” said VSB Executive Director Karen A. Gould, who said the Supreme Court directed the austerity move after projections showed a possible decline in the bar’s financial reserves.
Bar officials reported progress in reducing the number of pending discipline cases. The caseload has been cut to nearly half of what it was five years ago, said VSB Counsel Edward L. Davis. Even though the hiring freeze will delay filling several positions, Davis said he did not expect a growing backlog of cases.