I. Introduction. This blog deals with a variety of subjects – two drafting problems in Rule 7.3 (solicitation), a new subject of lawyer discipline (failure to make nanny tax withholdings) and a clarification (whether a client may veto a lawyer’s reporting another lawyer’s misconduct).
II. First Solicitation Issue – “A Prospective Client”
A. Before 2005 Rule Amendments. Rule 7.3 has long forbidden lawyers to make certain kinds of solicitations to “a prospective client.” Before 2005, the Rules did not define “a prospective client.” The Office of Lawyers Professional Responsibility (OLPR) regarded the target of solicitation as “a prospective client.”
B. “A Prospective Client” Defined. In 2005, new Rule 1.18 was adopted, including a definition, “A person who discusses with a lawyer the possibility of forming a client-lawyer relationship with respect to a matter is a prospective client.” Rule 1.18(a). The definition did not indicate whether it was solely for Rule 1.18 purposes or also for purposes of other rules. Rule 1.18 was intended to deal with obligations of a lawyer to persons who approached the lawyer with a view to forming an attorney-client relationship, without actually forming the relationship. Rule 1.18 was not intended to have anything to do with Rule 7.3.
C. OLPR’s About-Face. OLPR recently issued a determination that Rule 7.3 incorporates the Rule 1.18(a) definition of “prospective client.” This position is at odds with OLPR’s prior enforcement position. The chapter of this treatise on Rule 7.3 cites many disciplines issued by OLPR between 2005 and 2014 in which OLPR did not apply the Rule 1.18(a) definition to Rule 7.3.
D. Rule 7.3 Nearly Eviscerated. OLPR’s new position nearly eviscerates Rule 7.3. On one hand, a lawyer’s solicitation to a stranger is no longer deemed a solicitation to a “prospective client,” because, before the solicitation, there has been no discussion. One the other hand, solicitation to a person who has already approached the lawyer about legal services is not forbidden.
E. Solution on the Way. Before OLPR’s determination, the MSBA, following the lead of an ABA Model Rule amendment, decided to propose a clarification of the solicitation targets covered by Rule 7.3. The clarification substitutes terms like, “target of the solicitation” and “anyone” for “a prospective client” in Rule 7.3. The MSBA explains this amendment, “The rule is amended to clarify that it applies to targeted solicitations for professional employment addressed to anyone.”
III. Second Solicitation Issue – Pro Bono Labeling Requirement?
A. Pro Bono Solicitation Allowed. Lawyers may solicit clients in person, by phone, or by writing, if the lawyers do not have a significant pecuniary motive. This permission is anchored in constitutional law as well as ethics rule. NAACP v. Button, 371 U.S. 415, 83 S.Ct. 328 (1963), Rule 7.3(a). The “pecuniary gain” language of Rule 7.3 refers to the lawyer seeking gain, not the legal aid organization that employs the lawyer. In re Primus, 436 U.S. 412 (1978).
B. Labeling Solicitations – Rule and Comment Don’t Match. With certain exceptions, written solicitations to prospective clients “known to be in need of legal services in a particular matter” must be labeled “Advertising Material.” Rule 7.3(c). A comment states that the labeling requirement does not apply in some circumstances, such as “in situations in which the lawyer is motivated by considerations other than the lawyer’s pecuniary gain.” Rule 7.3 cmt. 4. However, this exception for pro bono solicitations was not incorporated into Rule 7.3 itself. This drafting imperfection stems from the ABA Model Rule and has not been noticed until recently.
C. OLPR Follows Comment. On June 4, 2014, in response to an advisory opinion request, OLPR stated that pro bono lawyers could rely on Rule 7.3 cmt. 4. This position is soundly based in policy – it would be illogical to allow these lawyers to solicit in person, without announcing “Advertising,” but require that label on written solicitations. The position is also based in OLPR’s general policy. “[T]he comments generally will reflect the OLPR’s interpretation and enforcement position. Lawyers can follow the comments’ guidance with confidence.” Timothy M. Burke, Comparing Services can be Dicey, Minn. Law., July 2006, at 5.
D. A Solution on the Way? The MSBA petition for amendments to the rules was drafted before the pro bono labeling issue surfaced. It is hoped that a means will be found for the Supreme Court to amend Rule 7.3(c), to be consistent with Rule 7.3 cmt. 4.
IV. Nannygate and Minnesota Discipline
A. Clinton’s AG Picks – “Nannygate.” In 1993, two of Bill Clinton’s picks for Attorney General were derailed when irregularities regarding their domestic help arrangements surfaced. One nominee, Zoe Baird, failed to pay taxes and withholding for domestic workers until shortly before her nomination.
B. Minnesota Tax Offense Disciplines. The long and complicated history of Minnesota lawyer discipline for tax offenses is well-summarized in Martin A. Cole, Taxes and Lawyer Discipline, BENCH & B. OF MINN., Apr. 2013, at 12. The summary focuses on failure to timely file income tax returns and also considers failures to pay withholding taxes for law office employees. The summary does not mention any nanny tax offenses.
C. Minnesota Nanny Tax Discipline. A Minnesota lawyer was recently reprimanded for “knowingly intercepting another person’s oral communications by placing a voice-activated recorder in that person’s car and failing to withhold taxes and obtain workers’ compensation and unemployment insurance for his children’s nanny, in violation of Minn. R. Prof. Conduct 8.4(c).” In re Janes, ___N.W.2d.___ (Minn. May 19, 2014).
V. Client Veto on Reporting to OLPR? 1.6(b)(10) – A Clarification
A. Issues. To what extent may a client (C) forbid a lawyer (L) to disclose C’s confidential information? May C veto L’s report to OLPR of another lawyer’s serious misconduct? These are complicated issues, discussed in the chapters of the treatise on Rules 1.6 and 8.3. Rule 1.6(b)(10) provides that a lawyer “may disclose” to OLPR. Also relevant are other rules, particularly Rule 1.2 (which addresses decision-making as between L and C) and Rule 1.7 (current client conflicts).
B. Restatement. Some authorities take an absolutist position, e.g. “Even in the absence of a reasonable prospect of risk of harm to a client, use or disclosure is also prohibited if the affected client instructs the lawyer not to use or disclose information. Such a direction is the client’s definition of the client’s interests, which controls.” Restatement of the Law Governing Lawyers § 60 cmt. c(ii).
C. Treatise. Minnesota Legal Ethics states, “Rule 1.6 gives clients a right to veto reporting to OLPR of all “information relating to the representation of a client.” Rule 1.6 §XXIV.C. Three clarifications are in order.
D. Clarification #1. First, before 2005, a comment to Rule 1.6 expressly stated “that the client retain[s] the veto power over the lawyer’s ability to divulge knowledge of another lawyer’s violations,” when the relevant information was protected by the attorney-client privilege. That comment was not carried forward in 2005.
E. Clarification #2. Second, while L continues to represent C, L may not report to OLPR, over C’s objection. The conflicts and control issues alluded to by the Restatement, and established by Rules 1.2 and 1.7 preclude L from unilaterally disclosing while continuing to purport to act in furtherance of C’s interests.
F. Clarification #3. Third, OLPR may take a view different from the author’s on these issues. Although OLPR normally takes very restrictive views on lawyers disclosing clients’ confidential information, when the issue is reporting lawyer misconduct, OLPR may be more permissive.