December 2000

RPC Informal Opinion Roundup

by Christopher Sutton
Professional Responsibility Counsel

The Rules of Professional Conduct (RPC) Committee, which meets bimonthly, receives, researches and prepares responses to written ethical inquiries submitted by Bar members. When issuing responses to inquiries, the RPC Committee mainly relies on the Rules of Professional Conduct, adopted by the Supreme Court in 1985.

Upon receipt, each written inquiry is assigned to two committee members for research. If the response to an inquiry could have wide impact, additional information from knowledgeable experts may also be sought. Those assigned to the inquiry present a written response memo to the entire RPC Committee for discussion. Specific language is proposed and voted on by the full committee, and a response letter is directed to the inquirer.

Once the response letter is redacted to remove identifying information, it is designated an informal opinion. If the inquirer acts in accordance with the response letter, a rebuttal presumption arises that the action is ethical. Informal opinions are based on the specific facts of the inquiry and reflect only the opinion of the RPC Committee and not the official opinion of the WSBA. While informal opinions are generally concerned with situations specific to the inquiry, because of current technological and economic developments, many of the recently issued informal opinions may be of interest to many. Some opinions are summarized below:

Informal Opinion 1848 concerns whether a nonprofit legal services organization which operates under and shares a computer network with a community services organization (CSO) may permit network administrators and related technical personnel from the community service organization (CSO) access for maintenance without the consent of legal services clients. The committee stated that sharing network personnel is permissible, provided that CSO personnel are instructed and agree in writing that permission is granted only for the purpose of maintenance of the network, does not extend to any confidential information on the system, and if confidential information is encountered incident to their technical work, it will not be disclosed.

Informal Opinion 1853 concerns whether a lawyer may enter into an agreement with an investment company whereby the lawyer would refer his clients to the investment company in exchange for a fee. The committee stated that such an agreement may violate one or more of the Rules of Professional Conduct, including: RPC 1.6 (maintaining confidences), because the lawyer may need to use confidential client information to assess the client's need for financial services; 1.7(b) (conflicts of interest), because the agreement includes either a non-waivable conflict of interest, or because it prohibits the lawyer from making the disclosures that the rules mandate; 1.8(a) (business with client), because the agreement contemplates the lawyer's obtaining a pecuniary interest in the client's property and sufficient disclosure is prohibited; 1.8(f) (compensation from one other than the client), because the agreement suggests that the lawyer's independent judgment and advice may be compromised; 1.8(h) (prospective limitation on liability), because some of the terms of the agreement suggest that the lawyer may be limiting his liability to the client; and 2.1 (candid advice), because the lawyer's relationship with the client may include duties that require the lawyer to render candid advice to the client that is prohibited by the agreement with the investment company.

Informal Opinion 1857 concerns whether work performed while clerking or interning during law school is governed by the conflict of interest rules. The committee stated that RPC 5.3 (responsibilities regarding nonlawyers) makes the lawyers in a firm responsible for the ethical behavior of its nonlawyer staff and makes the ethical rules apply to nonlawyers. In addition, once the clerk or intern is admitted to the Bar, he is bound by the RPCs, which includes potential conflicts of interest for work done as a clerk or intern.

Informal Opinion 1867 concerns whether a law firm may represent a lawyer when the lawyer is personally or vicariously representing a third party with direct adverse interests to a defense client of the firm, and when the firm's representation is unrelated to the matter between the defense client and the third party. The committee stated that the representation is possible, but under the facts presented, there may be material limitations that require compliance with RPC 1.7(b) (conflict of interest).

Informal Opinion 1868 concerns whether a lawyer on inactive status may maintain an "of counsel" relationship with a law firm. The committee answered no. Identifying a lawyer as of counsel to a firm implies a continuing professional relationship between the lawyer and the firm, necessarily involving some practice of law by the lawyer. An inactive lawyer cannot engage in the practice of law. Therefore, identifying an inactive member as of counsel would be false and misleading, in violation of RPC 7.1 and possibly 8.4.

Informal Opinion 1869 concerns whether a lawyer may directly contact an opposing party, whom he knows is represented, when the lawyer believes the opposing party's lawyer is not adequately representing the opposing party. The committee stated that RPC 4.2 prohibits a lawyer from communicating with a person who is represented by counsel, absent consent or authorization by law. The committee is of the opinion that RPC 4.2 clearly prohibits contact with the opposing party under these facts.

Informal Opinion 1873 concerns a lawyer's obligations to a client where the client, who had retained the lawyer to represent the client in a personal injury case, has disappeared. The committee stated that the lawyer may not settle the client's claim without authority from the client. The lawyer must use due diligence to try to locate the client and, if unsuccessful, may withdraw in accordance with RPCs 1.15(b)(5) and (6).

Informal Opinion 1874 concerns a lawyer wishing to provide financial and legal services. The committee stated that it may be difficult, if not impossible, for a lawyer to sell clients mutual funds, insurance and other financial investments while continuing to act as a lawyer. RPC 1.7(b) (conflicts of interest), 1.8(a) (entering business transaction with a client), 1.8(f) (accepting compensation from one other than your client), 1.10 (imputation of conflict to firm), 5.4(c) (independence of judgment), and 7.3(a) (solicitation) should be consulted. There is a serious risk that the responsibilities of the investment sales business may be materially limited by the lawyer's professional responsibilities.

Informal Opinion 1877 states that a lawyer may place brochures in a chiropractor's office so long as the lawyer gives nothing of value to the chiropractor. The brochures should comply with Title 7 of the RPCs, i.e., contain the lawyer's name and not contain misleading or false information.

Informal Opinion 1879 deals with the question of whether a lawyer may form a partnership to market and sell legal forms to Washington residents. The committee stated that a Washington lawyer does not violate RPC 5.4(b) by participating in a partnership with nonlawyers who sell legal forms, provided that the partnership does not give legal advice or engage in other conduct that constitutes the unauthorized practice of law.

Informal Opinion 1882 concerns, in part, the situation in which an organization sponsors a lawyer who is to provide free legal advice to the organization's members about estate matters. The committee stated that a lawyer may provide free legal services to a client, and the client may make voluntary donations to the organization. The lawyer must take care to maintain independent judgment (RPC 5.4(c)) and to maintain client confidences and secrets (RPC 1.6).

Informal Opinion 1884 deals with a lawyer mailing letters advertising legal services to persons whose names appear on a municipal court docket. The committee stated that RPC 7.3(b) permits a lawyer to communicate with prospective clients in writing unless the client has indicated that the client does not wish to receive such communications from the lawyer. The letter must comply with RPCs 7.1 and 7.2. The committee cautioned that it took no position on the legality of the use of the court list.

Informal Opinion 1887 concerns the following facts:

A law firm represents Insurance Company X in various coverage disputes and regulatory matters. A lawyer in the firm who does neither coverage nor regulatory work accepts a personal injury case arising from a traffic collision. The alleged tortfeasor provides the personal injury client with information at the scene of the collision indicating that Insurance Company X insured him. Is the lawyer wishing to represent the injured party prohibited from doing so? Yes, unless the requirements of RPC 1.7(a) and possibly 1.7(b) are satisfied. Under RPC 1.7(a), a lawyer may not represent a client if the representation will be directly adverse to another client, unless two additional requirements are met. First, the lawyer must in fact believe that the representation will not affect the relationship with the other client. See RPC 1.7(a)(1). Second, both clients must consent in writing following consultation and a full disclosure of the material facts. See RPC 1.7(a)(2). Third, if there is a long-standing relationship with one of the clients, the firm's responsibility to that client, as well as the personal interests of the lawyers in the firm in maintaining that relationship, may implicate 1.7(b). When a lawyer is precluded from representation by virtue of RPC 1.7(a) or (b), RPC 1.10 imputes the disqualification to all lawyers in the firm.

Informal Opinion 1888 concerns the issue of whether it is permissible for a lawyer to disclose the client's fee agreement to that client's insurer, who has a subrogation interest in a recovery and an obligation to pay fees and a portion of costs; and whether the lawyer is required to disclose the terms of an agreement with the client to reduce lawyer fees to effect settlement. The committee stated that the fee agreement would not generally be considered to be a "confidence" as defined in the Rules of Professional Conduct. It also would not be considered a "secret," unless the client had requested that it not be disclosed or if the information contained within would be embarrassing or would be likely to be detrimental to the client. Even if the fee agreement is "confidences or secrets" under RPC 1.6, disclosure seems necessary to provide maximum recovery for the client and to "carry out the representation." Although the lawyer may disclose the fee agreement, he or she would be wise to obtain the client's prior consent.

In addition, the lawyer must disclose to the insurer, pursuant to RPC 4.1(a), the terms of any "side agreement" with the client that modifies the terms of the contract concerning the payment of fees, since the contract with the client controls the fees paid by the insurer.

Informal Opinion 1891 deals with the question of whether a Washington provider law firm for a prepaid web-based legal services plan may contact a potential client based upon the potential client's response to a prepaid legal services website questionnaire. The committee opined that the use of information contained on the website to make an unsolicited call to a potential client to discuss his or her answers to a questionnaire about legal issues and the need for legal services violates RPC 7.3(a). The fact that the client information appeared on a website does not change the nature of the act by the lawyer, which would be an uninvited, unsolicited phone call to a potential client with whom the lawyer had no prior family or professional connection for the purposes of monetary gain.

Informal Opinion 1899 deals with the following situation: A lawyer has formed an attorney-client relationship with a personal injury client, but lost contact with the client before a complaint was filed and before receiving instructions on whether to file a complaint. May the lawyer file an action before the statute of limitations runs? Whether or not it is appropriate under the Rules of Professional Conduct to file suit depends upon the scope of the representation (RPC 1.2). The question of whether filing suit is or was implicit or express depends upon the totality of the communications between the lawyer and the client. Whether refraining from or commencing suit without further direction from the client would violate the Rules of Professional Conduct turns on whether the lawyer can articulate a good-faith belief that he was authorized to file suit or refrain from filing. In reaching a decision about the scope of representation, the lawyer should be guided by a review of RPC 1.4(b) (communication), 1.13(b) (client under a disability), and 3.1 (meritorious claims).

Informal Opinion 1990 concerns whether a dispute about the division of property acquired by parties who are not married (and who were not married during the time the property was acquired) may be handled by a lawyer acting under a contingency fee agreement. The committee stated that RPC 1.5(d) does not prohibit contingency fee agreements in this situation. The committee observed that clients will be protected because RPC 1.5(a) requires fees to be reasonable; 1.5(a)(8) requires that the client must receive a reasonable and fair disclosure of the material elements of the fee agreement; 1.5(c)(1) requires contingent fee agreements to be in writing; 1.4 requires the lawyer to keep the client sufficiently informed to make decisions regarding the matter; and 1.2(a) requires a lawyer to abide by a client's decisions concerning the objectives of the representation, including the client's decision whether to accept an offer of settlement of a matter.

Informal Opinion 1903 concerns a lawyer posting qualifications and representative experience on a website. The committee opined that the contents of a website posted by a lawyer or law firm must comply with RPC 7.1. The lawyer must maintain a copy of the website and changes made to that site pursuant to RPC 7.2. The committee suggested the lawyer review Published Informal Opinion 97-1.

Informal Opinion 1905 deals with competing claims made on funds held by a lawyer in an IOLTA account. The committee stated that because there are competing demands on the funds and the lawyer cannot with exact certainty determine who may be the rightful owner, he should not disburse the funds to either of the competing parties. Under RPC 1.14(b)(4), a lawyer is obligated to promptly pay or deliver funds from the lawyer's trust account. If the controversy cannot be promptly resolved, the lawyer should seek a judicial determination of the competing claims and act according to the decision. See CR 22.

Informal Opinion 1907 concerns client confidences and the reporting requirements of IRS Form 1099. The committee stated that it does not give legal advice and therefore does not offer comment on the accuracy of the lawyer's interpretation of any tax-reporting requirements. It is assumed that the lawyer has either correctly analyzed his substantive legal opinions or will seek the appropriate professional advice regarding the same. Subject to that caveat, the committee opined that RPC 1.6 does not prohibit the filing of Form 1099, reflecting moneys disbursed to clients by the lawyers, unless the client has requested that the lawyer keep the client's identity confidential or has otherwise communicated to the lawyer that his/her identity or the terms of the settlement not be divulged, in which case the lawyer is prohibited from doing so by RPC 1.6. The lawyer's attention is directed to WSBA Formal Opinion 194 (disclosure of client information to Treasury Department) for further guidance and to RPCs 1.2(d) (scope of representation), 8.4(b) (criminal conduct) and 8.4(c) (dishonesty, fraud, deceit or misrepresentation), and RLD 1.1 (grounds for discipline).

Informal Opinion 1908 concerns whether it is ethical for a lawyer to pay for the trial testimony of a doctor who provided medical treatment to the lawyer's client. The committee opined that it is not unethical for a lawyer to pay a treating physician testifying as a fact witness the reasonable expenses incurred by the witness in connection with testifying and the reasonable value of the witness's time in connection with testifying. A lawyer may not ethically pay a witness to induce particular testimony or make payment contingent on the outcome of the litigation, nor may a lawyer ethically pay a witness when doing so is prohibited by law, e.g., RCW 9A.72.090 (bribing a witness) and RCW 9A.72.120 (tampering with a witness).

Informal Opinion 1911 states that RPC 1.8(e) prohibits a lawyer from agreeing to advance the costs of litigation on behalf of a client when repayment of the costs is contingent on the outcome of the litigation.

To submit an ethical inquiry, contact Christopher Sutton at 206-727-8284.

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