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Personal Injury


									        Personal Injury:
An Ethically Hazardous Practice Area

               Presented by:

         Gordon Levinson, Esq.
           Levinson Law Group
An Ethically Hazardous Practice Area

Personal injury attorneys are disproportionately represented in bar complaints and disciplinary
orders filed in California and around the country. This high number of bar complaints for
Personal Injury attorneys is due to a number of factors.

Here are a few reasons:
1. Personal Injury is a hazardous field of law
2. Personal Injury is also a demanding practice
3. You have an emotionally-invested clientele because your clients are injured
4. P.I. attorneys must depend on non-lawyer support staff
5. P.I. attorneys usually have inadequate support systems and staff
6. A set of professional conduct rules focused on litigation behavior

To avoid sanctions from the State Bar and malpractice claims from your client, it is important to
be aware that there are a number of windows of risk in the attorney-client relationship – from the
engagement letter to termination of the client.

Initially, the point of engagement is a major window of risk for the Personal Injury attorney. At
the point of engagement it is key to avoid inadvertent “employment” or unclear attorney/client
status. For that reason, clear use of conditional language in the engagement letter and fee
agreement are key to avoiding misunderstandings with the client. It is also important to use non-
engagement letters for those clients that you decide not to represent.

Educating the client about the legal process and controlling expectations about recovery can also
very important at the point of engagement. You should use the engagement letter as a teaching
opportunity for the client and put them on notice what you expect from them.
The importance of communication in the first 90 days cannot be understated, as many attorneys
fail to keep their clients informed during this period.

A few other windows of risk in the attorney-client relationship include:
1. The point of engagement
2. The filing of the lawsuit
3. The settlement of the case
4. The termination of the employment

And always remember your basic duties of Competence, Diligence and Communication – I know
it might be hard for you to remember your Professional Responsibility class in law school. Most
bar complaints against personal injury lawyers allege a lack of competence, but a majority of
complaints are initially prompted by inadequate communication. As we know, one of the main
complaints from clients is that my lawyer never communicated with me – he never kept me
informed about my case. While you can’t pleas every demanding client, in some cases this may
also implicate a lack of diligence on the attorney’s part.

Violating these basic rules may result in disciplinary charges and malpractice claims. Here, the
pertinent rules on the subject are Model Rule 1.3 (Diligence) and Model Rule 1.4
(Communication). Failing to return phone calls is a chief complaint at State Bars around the
country and often leads to ethics complaints. In some cases, the failure to return phone calls has
also led to malpractice liability.

During the lecture I will be discussing seven main areas of ethical concern:
1. Advertising
2. Attorney’s Fees
3. Conflicts of Interest
4. Confidentiality
5. Attorney Liens
6. Representing Minors and the Catastrophically Injured, and
7. Retention and Control of Client File

During the presentation I will mainly refer to the American Bar Association’s Model Rules of

Professional Conduct. Since these are “Model” rules, they are merely recommendations – or
models – and are not themselves binding on any individual attorneys in the country.

However, these Model Rules have been adopted – in whole or in part – by almost every state in
the country. Indeed, most state’s Ethics Codes simply mirror the Model Rules. And here in
California – one of the few states that has their own set of ethical guidelines – we will soon be
moving to adopt an ethics code that will be substantially similar to the Model Rules. For the
sake of our ethical discussion, I will also be referring to the existing ethical rules in California to
highlight the similarity and departure from the ABA’s Model Rules.

During the presentation I will also be referring to Ethics Opinions. Each State Bar publishes
these hypothetical opinions to illuminate ethical attorney conduct in a given situation. According
to the State Bar of California website:

    “These advisory opinions regarding the ethical propriety of hypothetical attorney
    conduct, although not binding, are often cited in the decisions of the Supreme Court, the
    State Bar Court Review Department and the Court of Appeal.”

While these Ethics Opinions are not binding on you, they are very persuasive to the court and
have been cited by the Ninth Circuit and other courts around the country

1. Advertising

Advertising has taken on much greater importance in the Age of the Internet. However, there
would be no attorney advertising if it were not for a 1977 Arizona case, Bates v. State Bar of

Bates is significant because it was the first time the United States Supreme Court addressed legal
advertising. In Bates, the attorneys took out a simple ad in the Arizona Republic. The ad read:
“Do you need a lawyer? Legal services at very reasonable fees.” The advertisement then went
on to list their practice areas and prices.

Ultimately, the Supreme Court held that lawyer advertising is commercial speech protected by
the First Amendment. Since the Bates decision, lawyers have been free to advertise on the radio,
on T.V. and Internet – subject to a few conditions.

A number of ABA Model Rules address attorney advertising. Here are a few of the main ones
that you must be aware of:
    Section 7.1 – Attorneys must be truthful in their advertising and not mislead legal
    Section 7.2 – A lawyer may advertise services through written, recorded, or electronic
    communication.     This includes ‘public media.’       Section 7.2 (c) creates additional
    responsibilities and states that attorneys must, “include the name and office address of at
    least one lawyer or law firm responsible for its content.”
    Section 7.3 – This is a very important section because it prohibits the direct solicitation
    of clients. Subject to a few minor exceptions, this means that you can’t approach a client
    on a hospital bed fresh out of surgery. The Web has also brought us ‘direct solicitation
    online as well, and attorneys have been warned about approaching distressed clients in
    online chatrooms (See California Bar Ethics Opinion 02-0002).

This transitions nicely into our next advertising trap – online advertising. With traditional
advertising such as T.V. or radio, ads are seen or heard in a limited geographic area. A
California lawyer is typically not going to run T.V. ads in New York if they are not licensed in
that state.

However, the Internet creates problems for attorneys who want to advertise their services
because the Internet and your website is everywhere – even in states where you aren’t licensed.
California Bar Ethics Opinion 2001-155 was one of the first to deal with advertising in the
Internet Age. Specifically, Ethics Opinion 2001-155 addressed websites. The Opinion concluded
that an attorney or firm website is a communication and an advertisement under the California
ethical rules.

What’s the bottom line? There are four main ethical areas to be aware of with your website.

First, under the Bates standard the website must be ‘truthful and not misleading. This means that
you can’t post any false, misleading, or deceptive statements on your website. You can’t show a
video on your website of you proclaiming that you have never lost a case …. When in fact you
have never even tried a case. This information is misleading, and not entirely truthful. The
‘truthful, not misleading’ standard also applies to factual information about attorneys at your
firm. One firm was punished by their respective state bar after it continued to list an attorney on
their website who had departed their firm six months earlier.

The second ethical trap that websites create is a possible unauthorized practice of law claim in
other states where you are not licensed.       As we previously discussed, the Internet defies
geographic boundaries. A California lawyer’s website is seen by potential legal consumers in 49
other states where you not licensed. Many state bars suggest adding a disclaimer to your website
that you only represent clients in states where you are licensed.

The third area of ethical concern posed by your legal website is the inadvertent formation of the
Attorney-Client relationship. Many law firms have email template forms on their website.
These email template submission forms encourage potential legal consumers to submit the facts
of their case to the firm through the website. As another California Ethics Opinion pointed out
pointed out, this could possibly lead to the inadvertent formation of the attorney client
relationship and could lead to disqualification in other cases due to the potential conflict of

Lastly, don’t claim you are a specialist in your field or practice area unless the Bar has granted
you such status. Attorneys have gotten into trouble by stating on their website that they were
specialists in a certain practice area such as tax. However, in order to refer to yourself as a
specialist you must have approval of your state bar.

At the national level, ABA Formal Opinion 10-457 also addresses similar issues related to
websites. According to the digest of the Opinion:

    “Websites have become a common means by which lawyers communicate with the
    public. Lawyers must not include misleading information on websites, must be mindful of
    the expectations created by the website, and must carefully manage inquiries invited
    through the website. Websites that invite inquiries may create a prospective client-lawyer
    relationship under Rule 1.18. Lawyers who respond to website-initiated inquiries about
    legal services should consider the possibility that Rule 1.18 may apply.”

Social Media is also beginning to create some ethical problems for Personal Injury attorneys.
Blogs, Facebook, Twitter and other social media websites could also lead to ethical troubles.
For example, some Personal Injury blogs have very questionable content. Here is a blog from
one personal injury firm: Personal-Injury Lawyer Advertising:

    “[John Doe] had been laying in a coma for almost six months at Harborview Medical
    Center when he passed away on November 7th, a few weeks shy of his 25th birthday.
    [John Doe] died as a result of a May 25, 2007 accident on Interstate-90 when the car he
    was driving was hit head-on by a man with a blood alcohol content more than three times
    the legal limit.
    When a person is killed as a result of an accident the ensuing claim is characterized
    under Washington law as “wrongful death”. Even though a substantial amount of time
    passed between the time [John Doe] was injured and eventually died, the claim against
    the estate of the at-fault driver would still be characterized as a wrongful death claim.”

Some of these types of ads even go as far as suggesting that friends and family members call the
attorney in question.     Many attorneys would question whether this is a direct electronic
solicitation to an accident victim, and an impermissible form of attorney advertising.

There are also other social media websites that may expose you to risk. Initially, the main issue
with Facebook was whether judges ‘friending’ lawyers was ethical conduct. Recently, there
have also been recent issues with lawyers being untruthful about cases and credentials. This
would be impermissible because ABA MR 1.7 states that attorneys must be truthful in their
advertising and not mislead legal consumers.

Legal Ethics Opinion 2011-2 from the San Diego County Bar deals with Facebook and ex parte
communications.     The Opinion concluded that lawyer’s friending people who work for a
company that is represented by counsel is an unethical ex parte communication.

The professional networking website LinkedIn can also create ethical quandaries. Is merely
listing your credential advertising? Like many legal answers – it depends. Some states and
regulators are exceedingly stringent and may categorize LinkedIn as attorney advertising. In
some states, almost anything a lawyer says or writes is considered advertising.

One regulator even surmised that third party comments on attorney rating sites like AVVO are
also considered advertising. This is an incredibly strict view on attorney advertising

2. Attorney Fees & Fee Agreements

The topic of attorney’s fees and legal fee agreements usually makes everyone in the room
squirm. For many reasons, clients don’t like to discuss fee agreements because the client
perceives that he or she is at distinct disadvantage talking about contracts with a lawyer.
Lawyers don’t enjoy discussing fee agreements because they fear that all the legal terminology
may scare off the new client before the first fee payment is paid.

What is the result? Many attorneys and new clients just tend to gloss over these issues – until the
attorney-client relationship turns sour. A thorough discussion of legal fees with the client and a
clearly-worded legal fee agreement can go a long way to building trust and cooperation between
the lawyer and client. It also serves as a roadmap of the relationship for the client, and protects
you in case things go wrong.

As you know, there are generally three types of fee agreements: (1) hourly fee; (2) flat fee; and,
(3) contingent fee agreements. Contingent fee agreements may not be used in criminal or in

family law cases. In Personal Injury however, there is no such prohibition against Contingency
Fee Agreements.

Fee Agreements are controlled by Model Rule 1.5 at the national level. Right off the bat, MR
1.5(a) lists (8) factors that help to determinate the Reasonableness of a Fee. Here are the
highlights of the eight factors to be considered:

    1. The time and labor required, the novelty and difficulty of the questions involved, and the
       skill requisite to perform the legal service properly
    2. The likelihood that the acceptance of the particular client will preclude other employment
       by the lawyer
    3. The fee customarily charged in your location for similar legal services;
    4. The amount involved and the results obtained;
    5. The time limitations imposed by the client or by the circumstances;
    6. The nature and length of the professional relationship with the client;
    7. The experience, reputation, and ability of the lawyer or lawyers performing the services
    8. Whether the fee is fixed or contingent.

Model Rule 1.5(b) states that attorneys must inform the client of (1) The Scope of the
representation and (2) The basis or rate of the fee and expenses. Interestingly, MR 1.5(b) does
NOT state that the Fee Agreement has to be in writing. However, as a practice point it is quite
unwise to operate without a written Fee Agreement.

The Fee Agreement is the contract between the attorneys and client. It educates the client about
the serious nature of attorney-client relationship and it also protects the lawyer from liability
when and if the relationship sours. Without a written fee agreement, it is hard for the attorney to
prove the terms of the agreement without having written evidence of what was bargained for.

However, while under MR 1.5 (b) Hourly and Flat Fee agreements don’t have to be in writing,
MR 1.5(c) carves out the exception and states that contingent fee agreements must be in writing.
So if you are a Personal Injury attorney, and you utilize contingency agreements, it is a violation
of your Ethical Duties to operate without a written fee agreement. In addition to MR 1.5(c)

mandating that contingency agreements be written, the rule also states that the method of
determining fees must also be included in the written fee agreement.

Likewise, here in California Business & Professions Code Section 6147 requires that
Contingency Agreements must be written and state the fee rate. However, California takes a step
further and requires that the agreement describe how disbursements and costs will affect the fee
and recovery, and describe the extent the client must pay fees for related matters.

One last note on fees – a “non-refundable” fee must comply with California Ethics Opinion 11-
01.   In California, a non-refundable retainer is permissible. This is also known as a retainer
earned upon payment. However, a non-refundable retainer is permissible only if used to pay for
the lawyer’s availability, and not to pay him or her for any services that might be performed.

Referrals & Splits are also two other main ethical areas of concern for attorneys. According to
Model Rule 1.5 (e): A division of a fee between lawyers who are not in the same firm may be
made only if: (1) The division is in proportion to the services performed by each lawyer or each
lawyer assumes joint responsibility for the representation           (2) The client agrees to the
arrangement, including the share each lawyer will receive, and the agreement is confirmed in
writing; and (3) The total fee is reasonable. Comment [7] also states that joint responsibility for
the representation of the client entails financial and ethical responsibility for the representation as
if the lawyers were associated in a partnership. Further, a lawyer should only refer a matter to
another lawyer that is competent to handle the matter. See Model Rule 1.1.

In California, there are two main sections that deal with fee splitting. California Rules of
Professional Conduct (CRPC) 2-200 addresses fee splits among attorneys while CRPC 1-320
covers splits among non-attorneys. I will not go into detail on these sections here at this time, I
just wanted to make California attorneys aware of these sections.

One last point about Fee and Fee agreements. Comment [9] to MR 1.5 states that if a procedure
has been established for resolution of fee disputes – such as an arbitration or mediation
procedure established by your State Bar – then the attorney must comply with the procedure

when it is mandatory.        Further, even when it is voluntary program, the lawyer should
“conscientiously consider submitting to it.”

Other, more complex issues that arise regarding Fees and Fee agreements include client trust
funds and accounting, attorney bill padding, block billing, fees descriptions in billing, fee
requests, and loadstar statutes. Since I am providing a general discussion of ethics and personal
injury today, we will not get into detail on these topics. I just wanted to present the issues for
you in case you wanted to do further research on these matters.

As mentioned previously, each one of these sections could probably be a full day CLE course. I
am just trying to make you aware of some main areas involved in your practice with today’s
Ethics presentation.

3. Conflicts of Interest

The reason that Conflicts of Interest are such a problem for State Bars is that it cuts right to the
heart of the attorney’s job.     We are zealous advocates for our clients, trained to use our
independent professional judgment to get the best results for our clients. Indeed, loyalty and
independent judgment are essential elements to the attorney's relationship with the client.

Concurrent conflicts of interest tend to arise from the lawyer's responsibilities to another client, a
former client or a third person or from the lawyer's own interests. Here are a few questions to
consider in regards to Conflicts of Interest in the representation of co-plaintiffs. (1) Is another
party clearly liable? (2) Are the co-plaintiffs competing in a zero-sum game? (3) Do the
advantages of common representation outweigh the risks involved? (4) Can informed consent be
obtained from the clients?

Here are a few main issues that typically arise in multiple representation situations: (1) The
potential existence of conflicts in the joint representation – here you must work to minimize the

conflicts. (2) The nature of informed consent needed. (3) Issues arising from the joint settlement
of plaintiffs’ claims. (4) The attorney’s obligations if conflicts arise subsequent to obtaining
informed consent to the multiple representation.

ABA Model Rule 1.7 addresses the ethical issues involved when undertaking the joint
representation of clients. As a baseline, MR 1.7 permits multiple representation of non-adverse
clients provided that there is suitable informed consent to the clients in advance. Further, under
MR 1.7 the lawyer must reasonably believe that multiple representation will not adversely affect
the lawyer’s ability to adequately represent each client. However, if under the Model Rules the
attorney determines that the clients are directly adverse, joint representation CANNOT be

MR 1.7 (b) deals with Potential Conflicts and instances where the attorney MAY undertake
representation. The attorney may undertake representation if:
    1. The lawyer reasonably believes that the lawyer will be able to provide competent and
       diligent representation to each affected client
    2. The representation is not prohibited by law
    3. The representation does not involve the assertion of a claim by one client against another
       client represented by the lawyer in the same litigation or other proceeding before a
    4. Each affected client gives informed consent, confirmed IN WRITING.

According to Comment 8 to Rule 1.7 the critical inquiry in determining whether multiple
representation is appropriate is the “likelihood that a conflict will arise.”

Also of note are Comments 29 & 30 to MR 1.7 because of the practical advice. According to
Comment [29]: “In considering whether to represent multiple clients in the same matter, a lawyer
should be mindful that if the common representation fails because the potentially adverse
interests cannot be reconciled, the result can be additional cost, embarrassment and
recrimination.” And Comment [30] states: “A particularly important factor in determining the
appropriateness of common representation is the effect on client-lawyer confidentiality and the

attorney-client privilege. With regard to the attorney-client privilege, the prevailing rule is that,
as between commonly represented clients, the privilege does not attach. Hence, it must be
assumed that if litigation eventuates between the clients, the privilege will not protect any such
communications, and the clients should be so advised.”

In California CRPC 3-310(C) is analogous to MR 1.7(a). However, California varies slightly
from the ABA’s Model Rules. The California Conflicts Rules do not contain a provision similar
to MR 1.7(a)(1) requiring the lawyer to reasonably believe that the representation of one client
will not adversely affect the relationship with the other client. Under CRPC 3-310(C) you just
need informed consent from clients. Of course, this content must be written.

The California Rule also varies from ABA because CRPC 3-310(C)(1) requires written consent
of each client. Even if the interests of the clients do not actually conflict and there is only
potential conflict.

4. Client Confidentiality

Client Confidentiality is a fundamental principle of the client-lawyer relationship. Absent the
client's informed consent, the lawyer must not reveal information relating to the representation.
In some states, you may not even be able to reveal the fact that your client might seriously injure

Think about Client Confidentiality in terms of the attorney-client privilege and aiding client
disclosure. Our clients come to us for advice and representation, knowing that they can fully
disclose the facts of their case because the attorney must keep this information confidential. Due
to this confidentiality, clients are more apt to tell us all the facts of their case – even the
damaging ones.

At the end of the day TRUST is the hallmark of the client-lawyer relationship. The client is

therefore encouraged to seek legal assistance and to communicate fully and frankly with the
lawyer even if the subject matter is embarrassing or legally damaging. The attorney needs this
information to protect the client’s rights fully and effectively, and to possibly advise the client to
refrain from future wrongful conduct. Clients come to lawyers in order to determine their rights
and what is deemed to be legal and correct. The Duty of Confidentiality ensures this full
disclosure between client and attorney.

At the National Level, ABA Model Rule 1.6 addresses the Confidentiality of Client Information.
According to Model Rule 1.6(a), an attorney "Shall not reveal information relating to
representation of a client." However, the rules then carve out some exceptions to this mandate
where the lawyer may ethically reveal Client Information: (1) If the client gives informed
consent (2) The disclosure is impliedly authorized in order to carry out the representation or (3)
The disclosure is permitted by paragraph (b).

MR 1.6(b) then goes on to create a number of exceptions to the basic Duty of Confidentiality.
Here are the six instances where information relating to the representation may be revealed: (1)
To prevent reasonably certain death or substantial bodily harm; (2) To prevent the client from
committing a crime or fraud that is reasonably certain to result in substantial injury to the
financial interests or property of another and in furtherance of which the client has used or is
using the lawyer's services; (3) To prevent, mitigate or rectify substantial injury to the financial
interests or property of another that is reasonably certain to result or has resulted from the client's
commission of a crime or fraud in furtherance of which the client has used the lawyer's services;
(4) To secure legal advice about the lawyer's compliance with these Rules; (5) To establish a
claim or defense on behalf of the lawyer in a controversy between the lawyer and the client, to
establish a defense to a criminal charge or civil claim against the lawyer based upon conduct in
which the client was involved, or to respond to allegations in any proceeding concerning the
lawyer's representation of the client; or (6) To comply with other law or a court order.

Of note is MR 1.6(b)(1) the “death or substantial bodily harm” exception.               Contrast this
exception with California’s treatment. Under California Business & Professions Code 6068(e):
"[i]t is the duty of an attorney ... [t]o maintain inviolate the confidence, and at every peril to

himself or herself to preserve the secrets, of his or her client." This is a MUCH higher
standard than the ABA Model Rules.

Like the Model Rules, under California Rule 3-100(b) an attorney MAY reveal confidential
information to prevent a criminal act that is likely to result in death of, or substantial bodily harm
to,   an individual.   But a California attorney has NO DUTY to reveal this confidential
information, which may even result in the death of another person. Under California Rule of
Professional Conduct 3-100(c), however, the attorney must FIRST try to dissuade client from the
damaging course of action and tell the client that they must reveal the information.

Many legal commentators around the country claim that California has the strictest approach to
the Duty of Confidentiality. In Earl Scheib, Inc. v. Superior Court, the California court held that
the duty to preserve client information is “broad and exacting,” it is even violated by a revelation
made with “honest intentions and motives.”

One last practical point on the Duty of Confidentiality. Client information has become much
harder to protect in the Digital Age. The Confidential Client Information was once kept under
lock and key in an office file cabinet twenty years ago is now stored in the “Cloud,” on hard
drives, and in iPads, cell phones, and thumb drives, etc. Information is much more portable than
it was 20 years ago and it is now traded as a currency. Your paralegal or legal assistant could
copy your entire hard drive, and you would really never even realize that your client information
had been compromised. For that matter, an outside source could even hack into your firm
computers and steal confidential data – it’s already happened to an L.A. law firm that was
prosecuting a Chinese company.

Client Information is also much easier to divulge these days with the advent of email and Social
Media. There have been a number of cases where attorneys have sent confidential client emails
to the opposing party. There was even one case where the attorney CC’d a reporter from the
New York Time and the reporter posted the email in the paper’s Sunday edition. So always
double check who you are sending that email to before you fire it off.

Websites and blogs have also made it difficult for attorneys to protect client information. A few
months ago, one firm posted the confidential details of their settlement online as one of the
firm’s major accomplishments. The firm realized the mistake the next day, but by the time the
error was realized it was too late and about half of the Web had the details of the confidential
settlement between Apple and their client.

5. Attorney Liens

Another main area of ethical concern for Personal Injury attorneys is Attorney Liens. Attorney
Liens become troublesome because by taking a lien the attorney gains an interest in the litigation
– something that is prohibited by the Conflict of Interest Rules.

Let’s start with the national rule, Model Rule 1.8(i). Generally, an attorney shall not acquire a
proprietary interest in the cause of action or subject matter of litigation. However 1.8(i) goes on
to carve out two exceptions to the rule. First, an attorney may acquire a lien authorized by law to
secure fee or expenses. Second, an attorney may charge a reasonable contingent fee in a civil
case. As previously state, the rationale is that an attorney cannot acquire a proprietary interest in
the cause of action or subject matter of litigation. Once an attorney has acquired a proprietary
interest, it makes it much harder for the client to fire the lawyer. Further, the attorney may have
a difficult time exercising ‘independent professional judgment’ for the client if their interests
become intertwined.

While we are discussing the Model Rules which form the basis of almost every state’s ethics
codes, each state has it’s own laws regarding liens and each state determines which liens are
authorized by law. These include: Liens granted by statute, Liens originating in common law,
and Liens acquired by contract with the client. It is important to remember that when an attorney
acquires a lien, it becomes a business or financial transaction with a client. And this transaction
will be governed by the requirements of Model Rule 1.8(a) and the Conflicts of Interest rules.

Here in California, CRPC 3-300 & CRPC 3-310 offers a traditional conflict of Interest analysis
when considering Attorneys Liens. CA Rule 3-300 is entitled “Avoiding Interests Adverse to a
Client” and CRPC 3-310 is entitled “Avoiding the Representation of Adverse Interests.” CRPC
3-310 is interesting because whether there is an actual or even a POTENTIAL conflict, attorneys
must still get informed written consent from the client. And according to Comment [9] of rule 3-
310, There are some matters in which the conflicts are such that written consent may not suffice
for non-disciplinary purposes, including Disqualification in a proceeding, Enforcement of an
agreement, and Malpractice liability to name a few. Generally in California, however, Informed
consent from the client will cure a conflict of interest.

California has no parallel the section of MR 1.8 that deals with an acquisition of an interest in the
subject matter of litigation. In California, the interest is proper if: (1) The client gives informed
written consent under CRPC 3-310, and (2) The transaction meets the requirements of CRPC 3-
300 for lawyer-client business transactions. Since CRPC 3-300 deals with Conflicts, it also
controls contractual liens and other security agreements for fees and costs.          Also of note,
California Business & Professional Code Sections 6146-6149 address contingency fees &
attorney liens.

Lastly, California has an excellent Ethics Opinion on the subject – Formal Opinion 2009-177.
The San Diego County Bar Association also has a great resource in the Legal Ethics Corner
entitled Ethically Taking Steps to Protect Your Lien Rights in Settlement Proceeds when a Joint
Check is Issued.

Here are the facts of California Bar Formal Opinion 2009-177. Attorney A represented the
Client in a personal injury matter. The contingency fee agreement contains a valid charging lien
that protects your right to be paid. The Client then terminates you after two years of litigation
and proceeds to hire Attorney B. Two months later the case settles and the defendant issues a
check jointly made out to You, The Client, and Attorney B. The Client believes that you are
NOT entitled to any fees and insists that you endorse the check. What do you do now?

In order to comply with CA Rule 4-100’s requirement that you return all property to the client

you must take prompt steps to find a reasonable method of delivering the UNDISPUTED portion
of the proceeds that the client has a right to. You do not violate Rule 4-100 by refusing to use a
method that would extinguish your charging lien. Normally, you are normally not obligated to
endorse the check. However, you are under a duty to consult governing legal authorities to make
a reasonable determination of the amount of the fee that you are entitled to.

A California attorney must promptly seek resolution of the fee dispute through arbitration or
judicial determination if: (1) The Client does not agree to the proposed METHOD for delivering
the undisputed portion of the fee or (2) Does not agree with your DETERMINATION OF THE
AMOUNT of the proceeds that undisputedly belong to Client.

COPRAC – the California Committee on Professional Responsibility and Conduct –
recommends the following course of action. First, COPRAC states that you could offer to place
the disputed funds in your trust account OR in a separate blocked account requiring signatures
from you and Client. Alternatively, you could also quickly participate in fee arbitration and
promptly abide by the arbitration award. The decision notes that you should still release any
undisputed funds. Second, you then agree to place the settlement proceeds in Attorney B’s
account under an express agreement that he/she holds such funds in trust for both you and Client.
By doing so, Attorney B owes you a fiduciary obligation to not disburse the funds in Client’s

What is the ethical Bottom Line regarding attorney liens? You have the affirmative obligation to
make a reasonable determination of the amount of fees to which you are entitled to under the lien
and promptly offer reasonable suggestions for the disbursement or release of all remaining client
funds (if there are any left).

6. Representing Minors and the Catastrophically Injured

Now for our sixth topic of discussion – Representing Minors and the Catastrophically Injured.

One part of Personal Injury that makes it distinct from other areas of practice is that many of
your clients have suffered serious catastrophic injury and damages. Also complicating matters,
many car accidents and other types of personal injury cases can also involve minor children and
incapacitated individuals.

In cases involving severe injury – especially catastrophic brain injury – this question often
presents itself: “Can the client make adequately considered decisions that are in his or her best
interests.” Sometimes the plaintiff lawyer must decide whether a guardian or conservator should
be appointed. Under ABA MR 1.14(b), when a lawyer reasonably believes that the client cannot
"adequately" act in his or her own interest the lawyer MAY seek the appointment of a guardian
OR take other protective action. Of note, Comment [7] to MR 1.14 states that in considering the
range of possible alternatives the lawyer should be aware of any law that requires the lawyer to
advocate the LEAST RESTRICTIVE ACTION on behalf of the client.

According to Model Rule 1.14, even when a client suffers from a mentally disabling condition
the lawyer must continue to make every effort to maintain a normal attorney-client relationship
AS FAR AS REASAONABLY POSSIBLE. The lawyer’s duty to communicate material facts to
the client continues to exist, EVEN IF the client’s competence is seriously in doubt. MR 1.6
protects information relating to the representation of a client with diminished capacity.

More guidance when representing minors and the catastrophically injured can also be found in
the Comments to MR 1.14. Comment [3] states that the client may wish to have family members
or other persons participate in discussions with the lawyer. I am assuming that this is also an
implied exception to the attorney’s Duty of Confidentiality.              Comment [6] deals with
determining the EXTENT of the client’s diminished capacity. Comment [6] states that in
determining the extent of diminished capacity, the lawyer should consider and balance such
factors as: (1) The client's ability to articulate reasoning leading to a decision, variability of state
of mind and ability to appreciate consequences of a decision, (2) The substantive fairness of a
decision, and (3) The consistency of a decision with the known long-term commitments and
values of the client. Now, the fourth factor listed is slightly controversial and may vary in your
state. The fourth factor to determine the extent of the client’s diminished capacity states that in

appropriate circumstances, the lawyer may seek guidance from an appropriate diagnostician.

In the current version of the California rules there is no Equivalent to MR 1.14(b). There are,
however, three California ethics opinions that conclude that a lawyer must NOT petition the
court to have a conservator appointed for the lawyer's client. These opinions are California Bar
Formal Opinion 1989-112; L.A. County Bar Opinion 450 – bringing conservatorship action
constitutes representing adverse interest; and San Diego County Bar Opinion Op. 1978-1 –
bringing conservatorship action calls for lawyer to divulge client's secrets.

California feels that petitioning the court to have a conservator appointed would violate the
lawyer's two main duties of Confidentiality and Loyalty. The rationale behind the Rule: even if
the "information" is merely the lawyer's observations of the client's behavior, this information
was received in confidence from the client and such disclosure would violate the lawyer's duty
under Business & Professions Code 6068(e) to maintain the confidence of the client and to
“preserve the secrets" of the client. Further, instituting conservatorship proceedings for a client
at the request of another party is improper because it would require advocating and protecting the
interests of third parties. This creates a conflict of interest under CRPC 3-310.

There is some case law on point from around the country that reinforces the importance of these
ethical issues that you must consider. In an Illinois case In re Crane, an attorney was suspended
for 3 years for failing to explain the basis of large fees to clients who had just reached legal
adulthood.      In re M.R. – a 1994 case out of New Jersey – states that an attorney for a
developmentally disabled person must advocate for the client’s stated custody preference. And
in Quesnell v. State a case from Washington State, the court found error where although the
accused and her private attorney had made a timely demand for a jury trial the proceeding was
conducted without a jury on the theory that the guardian ad litem – an attorney – had waived
such a right.

7. Retention and Control of the Client File

Now, we all know where this comes into play – when the client hasn’t paid you and you no
longer wish to continue working for free. Keep in mind that the rationale behind returning the
client file is ensuring that the interests of the client are protected, and are not prejudiced by the
transition. And in some instances, the work product belongs to the client … EVEN IF THEY

ABA MR 1.16(d) addresses these sticky situations. According to the Rule, upon termination of
representation a lawyer shall take steps to the extent reasonably practicable to protect a client's
interests.   This may include such things as giving reasonable notice to the client of the
termination, allowing time for the client to seek and employ other counsel, surrendering papers
and property to which the client is entitled, and refunding any advance payment of fees or
expenses that have not been earned or incurred. MR 1.16(a) goes on to state that the lawyer may
retain papers relating to the client of the extent permitted by other law.

MR 1.15(a) addresses the safekeeping of Client property and client trust accounts. As you
probably know, one of the top ways to get disbarred is to co-mingle or “borrow” client funds.
According to the Rule: “A lawyer shall hold property of clients or third parties separate from the
lawyer's own property. Funds shall be kept in a separate account and maintained in the state
where the lawyer's office is situated unless the client consents to maintaining the funds in another
state. As such, other property shall be identified as such and appropriately safeguarded. It is key
to keep complete records of all such client account funds and other property. Records must be
kept by the lawyer for a total of five years after the termination of the representation.” Of note is
Comment [9] to MR 1.15 which states that even if the lawyer has been unfairly discharged by the
client, her or she must take all reasonable steps to mitigate the consequences to the client.
Further, the comment states that the lawyer may retain papers as security for a fee ONLY to the
extent permitted by law.

In California, CRPC 3-700(D)(1) requires a lawyer to return all of the client's papers and
property to the client upon termination of representation and requires the return of the unearned
part of any fee advance. CRPC 3-700(D)(2) diverges from MR 1.16 by clarifying that the

requirement to return an unearned fee does not apply “To a true retainer fee which is paid solely
for the purpose of ensuring the availability of the member for the matter." We stated this
previously in the second section addressing Fees.

One other main issue that you must often address is what does the phrase "client's papers and
property" entails. Do you have to give your electronic files of their documents? According to
CRPC 3-700(D)(2) the client's papers and property include:
       – Correspondence
       – Pleadings
       – Deposition transcripts
       – Exhibits
       – Physical evidence
       – Expert's reports
       – Other items reasonably necessary to the client's representation

Another question that often comes up is who OWNS the client file? Like just about every legal
answer – It depends. After reading the Ethics Rules, the concern appears to be related more to
competency and confidentiality of the representation, than to actual possession of the file. The
wisest course of action is to communicate with the client and ask them what they want to do.
Use some form of electronic storage for client files and address the retention of the client file in
your legal services agreement. Nowadays, client files aren’t just kept under lock and key. I
would imagine that a significant portion of your client files is stored electronically in the hard
drive of your computer.

California FORMAL OPINION NO. 2007-174 squarely deals with these file retention issues. In
California, an attorney is ethically obligated upon termination of employment to release to the
client at the client’s request: (1) An electronic version of e-mail correspondence, (2) An
electronic version of the pleadings, and (3) An electronic version of discovery requests and
responses. COPRAC – the California Ethics Commission – feels that such items are reasonably
necessary to the client’s representation in today’s Digital Age. Further, if such documents exist

you are also required to turn over (4) An electronic deposition and exhibit database, and (5) An
electronic version of transactional documents. This Rule does not require the attorney to create
such items if they do not exist or to change the application if they do exist. For example
changing document formats from Word (.doc) to WordPerfect (.wpd) is not required under the
ethical rules.

One last point about client files is to be aware of metadata. If you are not familiar with metadata
it is information about the creation and revision of electronic documents that is created by your
word processing program. This hidden information is invisible from plain sight and must be
‘scrubbed’ out of documents. One of the simplest methods to remove metadata is to create a
PDF file of the Word Document because PDF files contain no metadata.

In California, prior to release of the file the attorney is ethically obligated to take reasonable
steps to strip from metadata from every electronic document reflecting confidential information
belonging to any other client.


I hope you have enjoyed our discussion of possible ethical traps for the Personal Injury attorney.
Here is a quick recap of the ethical topics that we covered today:
        1. Attorney advertising
        2. Attorney’s Fees
        3. Conflicts of Interest
        4. Client Confidentiality
        5. Attorney Liens
        6. Representing Minors and the Catastrophically Injured, and
        7. Retention and Control of Client Files

We have covered a lot of traditional ethics issues that you must be aware of in your practice, and

we have also talked about how technology is continuing to shape your ethical duties as we speak.
One thing is for certain – Adhering to ethical conduct will not get any easier for the Personal
Injury attorney in the future. Everyday seems to bring more complex ethics issues and novel
situations to deal with.


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