Lawyers owe many ethical duties to their clients. Most of these duties are bottomed on the fiduciary nature of the attorney-client relationship. But lawyers also owe ethical duties to the judicial system and other persons arising from their status as officers of the Court and agents of the justice system. The most exciting (sometimes too exciting) problems in legal ethics arise from conflicting duty situations. California’s Rule of Professional Conduct 1.2.1 provides the context for many conflicting duty scenarios. It has been a part of ethical controversies since it became part of the black letter law of legal ethics on its adoption by the Supreme Court in November 2018.Read More
A Central District of California grand jury issued subpoenas to a company and its lawyers related to a criminal investigation of the company’s owner, also a client of the lawyers. The subpoenas sought documents and communications related to that criminal investigation, the target of which was the company’s owner. The company and the lawyers produced some documents, but withheld others based on assertions of the attorney-client privilege and work-product doctrine. Prosecutors pressed the issue. The district court (Hon. John Kronstadt) determined that the withheld documents were not protected by any privilege or were discoverable under the crime-fraud exception to the attorney-client privilege. The company and the law firm disagreed with the court’s rulings and continued to withhold the disputed documents. The court then held the lawyers and the company in contempt because they failed to comply with grand jury subpoenas. Read More
With the recent release of the “Pandora Papers,” renewed attention is focused on corporate ownership transparency. The so-called Pandora Papers release from the International Consortium of Investigative Journalists (ICIJ) has outlined the elaborate mechanisms that the wealthy deploy to shift funds between global jurisdictions, masking their true wealth and minimizing their tax obligations while also unmasking the U.S. as a tax haven — including the state of South Dakota with its proliferation of “dynasty trusts.”Read More
The great California lawyer, writer, and historian Carey McWilliams referred to the Golden State as “the great exception.”[1] In legal ethics as in so many other things, that description holds up.Read More
California Rule of Professional Conduct and ABA Model Rule of Professional Conduct 5.4 feature a number of prohibitions designed to preserve the professional independence of lawyers, including prohibiting the sharing of legal fees with a nonlawyer, forming a partnership with a nonlawyer (if any of the activities of the partnership consist of the practice of law), and practicing in a business structure in which a nonlawyer owns any interest in the business or serves as a corporate director or officer.Read More
