August « 2003 « f/k/a archives . . . real opinions & real haiku

August 13, 2003

Indiana High Court Huffs and Puffs Over P/I Ads

Filed under: pre-06-2006 — David Giacalone @ 2:11 am

What’s more insulting and injurious to the consumer: annoying-but-humorous personal injury ads that only an idiot would believe, or court decisions that assume consumers really are idiots? The Indianapolis Star carried an Associated Press report last week (by Mike Smith, Aug. 9, 2003) on just such a decision by the Indiana Supreme Court. [link to the article from law.com Newswire, 08-13-03, and to the decision in Matter of Keller & Keller from The Indiana Law Blog, 08-08-03]

The Court publically reprimanded the firm Keller & Keller for a series of tv dramatizations in which insurance executives are terrified into settlement by just hearing the name of the firm. According to the AP article, the Court concluded:

“The respondents’ advertisements create an impression that the claims they handle are settled, not because of the specific facts or legal circumstances of the claims, but merely by the mention of the name of the respondents’ firm to insurance companies.”

With all due respect, this is just plain silly, highly insulting to consumers, and a waste of judicial resources. The Federal Trade Commission knows a thing or two about misleading and deceptive ads. As the FTC explained in its Policy Statement on Deception (1983), “[W]e examine the practice from the perspective of a consumer acting reasonably in the circumstances. If the representation or practice affects or is directed primarily to a particular group, the Commission examines reasonableness from the perspective of that group.” Therefore:

The Commission generally will not pursue cases involving obviously exaggerated or puffing representations, i.e., those that the ordinary consumers do not take seriously.

A North Carolina case involving the same ad campaign is described in an AP article archived at the highly informative First Amendment Center (“Lawyers’ dramatic TV ads don’t make cut for federal judge,” AP, 07-25-01). The article quotes David Daggett, whose law firm ran the offending ad (over 10,000 times):

“We understand that law firm advertising makes some lawyers uncomfortable, especially with dramatizations,” said David Daggett, whose law firm sued the State Bar over the right to air the commercial.

“But the bottom line is that consumers are savvy enough to recognize that it’s just a commercial,” he said yesterday.

For an excellent history of First Amendment cases dealing with lawyer advertising, including links to the decisions, see the Overview by David L. Hudson, Jr., research attorney for the First Amendment Center.

If courts and bar associations really want to help personal injury victims, they should start making sure that contingency fees are reasonable and that clients are fully informed about their right to negotiate over the percentage charged. And, they should stop wasting their time fuming over ads that we all love to hate, but are all about familiarity and name recognition, not believable claims.

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August 12, 2003

ABA Passes “Might Tell” Version of Confidentiality Rule

Filed under: pre-06-2006 — David Giacalone @ 10:23 am

The ABA may have proven once again that compromises often create more problems than they solve — or solve nothing at all. By the narrow margin of 218 to 201, its House of Delegates voted to amend Model Rule 1.6, relating to confidentiality between attorney and client. As reported in Law.com’s The Record (by Jason Hoppin, Aug. 12, 2003), the changes were made “in the hopes of combating corporate fraud” and avoiding tougher S.E.C. rules, and would allow lawyers to breach the duty of confidentiality if a client uses the lawyer’s advice to commit a crime or fraud.

Specifically, the following subsections were added to section (b) of the current ABA Model Rule 1.6, which states that “A lawyer may reveal information relating to the representation of a client to the extent the lawyer reasonably believes necessary:”

(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 interest 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.

As the close vote within the ABA shows, this decision was very controversial. For example, the California Bar strenuously opposed the amendments (The Record, 08/04/03), as did the Florida Bar (JaxDailyRecord.com, President’s Column, 08/06/03), and the folks at TalkLeft, who pointed out last night (08/11/03) that “The incoming ABA President, Dennis Archer, supported the change. But the new President Elect, Robert Grey Jr, opposed them.” TalkLeft quotes Grey as saying:

“This is not the proper time to bow to threats by others who seek to regulate us,” argued ABA President-elect Robert Grey Jr., who will succeed Archer in 2004. “It is not a time to take the position that the core values of the profession are subject to compromise.”

An article in yesterday’s New York Times discusses both sides of the controversy, with quotes from supporters and opponents . (“Lawyers Pressed to Give Up Ground on Client Secrets,” by Jonathan D. Glater, 08/11/03). Simultaneously, however, the Times editorial page urged adoption of the amendments because, “in the post-Enron era, the legal profession should be holding itself to higher ethical standards” and “a client who engages in fraud forfeits the right to confidentiality.”

In addition, on August 7th, Bloomberg reported that The Conference of Chief Justices had unanimously endorsed a similar plan “to let lawyers at publicly traded companies set aside client confidentiality to tell regulators about accounting fraud and other corporate wrongdoing.”

With all the sparks and barbs flying, Jason Hoppin at The Record wondered, last week (Piercing the Privilege, 08/04/03)

[I]f the majority of states have already implemented crime-fraud exceptions, why all the hullabaloo? (emphasis added)

The answer can perhaps be found in this morning’s Washington Post (ABA Eases Rule On Informing, by Brooke A. Masters, Aug. 12, 2003):

Supporters of the approved change said that allowing voluntary reporting is necessary to head off a far more drastic mandatory proposal being floated by the Securities and Exchange Commission. The SEC has asked for comment on a “noisy withdrawal” rule that would require an outside law firm to quit if it believed the management of a public company was condoning fraud. The company would then be required to report to the SEC that their lawyers had quit and why.

The ABA’s proposal “is a reasonable compromise between the existing rules — which needed revising — and the SEC’s ‘noisy withdrawal’ proposals, which go too far,” said Bart Schwartz, general counsel to Mony Group Inc., a financial services firm. “The permissive ‘reporting out’ rule approved by the ABA leaves more discretion to corporate lawyers about when it is necessary to divulge client confidences, and should give corporate clients more comfort that their lawyers can continue to handle sensitive information without turning into SEC informants.” (emphases added)

Now, I understand. In an attempt to avoid federal regulation, we are left with a new Model Rule 1.6 that allows but does not require disclosure of a crime or fraud likely to cause significant financial or injury. The ABA hopes this will allow more lawyers to follow their consciences and do the societally right thing — while making sure the feds don’t actually make them all do it.

It seems to me, it is far more likely that the new rule will (1) cause clients to demand steelclad promises of confidentiality, unless disclosure is mandated by law; and (2) prompt law firms to explicitly adopt “no tell” rules to maintain current clients, attract new ones, and silence any firm members with overactive consciences .

As Fordham University law professor Jill E. Fisch said before the vote, it is unclear how many lawyers would take advantage of a rule that allowed them to report their clients to authorities. “It’s not economically feasible for a lawyer looking to build client relationships to be a whistle-blower.” (emphasis added)

Perhaps we’ll see red and white international no-whistle decals on law firm windows, and similar logos on letterhead and in marketing brochures. And, to soothe guilty lawyer consciences, clients who insist upon a confidentiality guarantee will be charged increased Omerta fees, with proceeds going to fund an ethics chair at a local law school.

I’m not necessarily against loosening up confidentiality rules in order to protect important societal interests, such as preventing clients from using a lawyer’s services to perpetrate a crime or fraud. The “basic tenets” of our profession are not absolutes — they spring from the needs and values of our society, not vice versa. It is difficult to imagine, however, that there is a truly pressing need to restrict the client’s right to confidentiality, if permissive disclosure is a sufficient solution.

Two Cents from Jack Cliente: If the ABA has amended Rule 1.6 merely to avoid regulation of the profession by “outsiders” like the federal government, perhaps someone should turn in the Association for perpetrating a fraud of its own.

P.S. You can check out some of the variations on Rule 1.6 that already exist:

The New Hampshire Rule, which is very similar to the New Model Rule, and allows disclosure “to prevent the client from committing a criminal act that the lawyer believes is likely to result in death or bodily harm or substantial injury to the financial interest or property of another.”

D.C. Rule 1.6, which only allows disclosures of confidences to the extent reasonably necessary “To prevent a criminal act that the lawyer reasonably believes is likely to result in death or substantial bodily harm.”

The Virginia Rule which requires that a lawyer promtly reveal that a client has the intention to commit a crime or to perpetrate fraud on a tribunal. (at 23)

And the California situation, under which “The lawyer’s duty to maintain, protect and safeguard client information is almost absolute.” As articulated in Business & Professions Code

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August 11, 2003

Are Lawyers Blocking Efforts to Revitalize Small Claims Courts?

Filed under: lawyer news or ethics — David Giacalone @ 2:21 pm

We could take a giant step toward solving the access problem in America’s justice system by revitalizing our small claims courts — turning them into consumer-friendly, affordable and effective “People’s Claims Courts“. The consumer legal reform group HALT has detailed a number of steps to achieve that goal. See their Small Claims Reform Project webpage, and the article Small Claims Reform – A Means of Expanding Access. In March 2003, the Consumer Federation of America adopted HALT’s plan.

The vast distance we need to travel, however, can be readily gauged from the state-by-state Small Claims Report Cards given by HALT last year (2002). How did your state do?

The first target for reform has been the trivially low dollar limits found in most states. There has been some progress recently in a handful of states, including laws passed during the past legislative session:

In Maryland the limit was increased from $2500 to $5000, as of Oct. 1st, 2003. (see HALT’s description of the battle, as well as a recent article from Hometownannapolis.com (07/27/03)).

In Indiana the limit was raised from $3000 to $6000, taking effect in 2005. HALT (which would like to see the jurisdictional limits eventually rise to $20,000.) reports that the original bill requested an increase to $10,000.

In New York, a bill raising the small claims dollar limit from $3000 to $5000 passed both houses of the Legislature on June 18, 2003. However, as reported in the Albany Times Union on Saturday, Governor George Pataki has not yet signed the legislation, and his office is mum about whether he will do so. It is expected that Pataki will sign eventually, and the law would take effect Jan. 1, 2004. (Albany Times Union, Upping the ante in small claims, by Andrew Tilghman, Aug. 9, 2003). A summary of the legislation, with links to sponsors’ sites and the text, is available here.

What is taking you so long, Mr. Governor? Just how hard is it for a Republican to sign legislation that helps lots of consumers while angering some lawyers?

In addition, a Review Commission in California is considering a number of improvements in the State’s small claims system, including whether to approve a tentative recommendation it has received in a commissioned study, which would raise the limits there from $5000 to $10,000. Hearings will be held in September, and HALT says it will be among those testifying.

Increases to $5000 or $6000 are important first steps, but most states have failed to increase their limits and, to be meaningful in our modern economy, far higher limits are needed. My 1999 column for Prairielaw.com, Supersize Small Claims [original in pdf.; also reproduced here] is still relevant:

[O]ur lawmakers could give a big chunk of the civil justice system back to the people by simply increasing the dollar limits allowed in small claims courts. By permitting claims up to $20,000 in these user-friendly “people’s claims courts,” we could greatly increase access to justice, and greatly decrease the time and money spent to resolve the everyday disputes of consumers and small businesses.

As they now exist, however, small claims courts have become irrelevant to most Americans — a downscale judicial stepchild, unfamiliar to most of the public, and relegated to handling cases too insignificant to warrant or attract lawyers. The dollar limits are simply too low: in two dozen states, the maximum monetary award granted in small claims courts is $3000 or less. It’s $1000 in Virginia, and in Washington State it’s $2500. Only two states (Delaware and parts of Tennessee) allow claims as high as $15,000. These paltry limits are outdated anachronisms at a time when the average new automobile sells for $24,000, and many kitchen renovations include $5,000 gas ranges and $4,000 refrigerators.

As a result, many consumers and small businesses must give up valid claims that would otherwise be highly appropriate for the user-friendly small claims format, because hiring a lawyer would make the claim far too expensive to pursue in other courts. Others are forced to take uncomplicated cases they could easily handle themselves to higher courts, where they pay hefty legal bills for lawyer services they don’t really need.

What’s stopping this needed reform? I’m afraid that virtually all resistance is coming from the bar. For example, I poked fun at the Maryland Trial Lawyers Association in a posting last month (07/13/03), for its battle against legislation that twice passed unanimously in Maryland’s legislature.

The New York State Bar Association hasn’t even bothered to take a public stance over the five years it has taken to increase the limit to $5000 in their State. This silence — surely based on the guild mentality of preserving work for members — sent a message to legislators that delayed passage and is perhaps now delaying its being signed into law.

What a contrast to the legal profession in the early 20th Century. As I stated in Supersize Small Claims:

At that time, we had a legal profession led by reform-minded titans, such as Louis Brandeis, who used their influence to create a system of small claims courts in the name of “Justice for All”. Using simplified procedures and rules of evidence, those courts allowed anyone to bring everyday consumer claims and simple business disputes before a judge for a quick, inexpensive resolution.

A century later, that same legal profession has become the greatest (maybe the only) beneficiary of our Byzantine court system, and the biggest impediment to its reform.

Do we even have titans in our profession these days? The best known and most successful lawyers in our era have had little or nothing to say about increasing access to justice for middle and low income Americans. The only battle ground is tort reform, where lawyers on the right propose legislation to protect the coffers of big business, and those on the left fight for the opportunity to make themselves billionaires.

The last few decades, the pro-consumer remnant of reformers still existing within the profession have been relegated to committees producing recommendations that are quickly ignored or defeated within their broader organizations. Consumers need advocates, outside and within the legal profession, who can overcome the financial self-interest, guild mentality, and satisfied indifference of the organized bar and the majority of its individual members. Maybe some of us who aren’t quite titans can still stand up and be heroes.

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August 10, 2003

How to Get Into The Judge Game

Filed under: pre-06-2006 — David Giacalone @ 7:52 pm

Topics such as outright bribery and similar judicial corruption aren’t usually subtle or controversial enough to warrant treatment here at ethicalEsq? I mean, who is in favor of bribing judges? [Rhetorical question, Jack.] On the otherhand, outright silliness about judicial corruption certainly deserves a Weakend Special posting:

There actually is a serious discussion about the way judges get (s)elected in New York State in this week’s online Gotham Gazette. Written by Mark Berkey-Gerard, the article suggests that politics has a lot to do with becoming a judge and offers little hope of reform. (“Judges,” August 8, 2003, available here.)

You might want to scan the article, but you should for sure click on the link to the Gazette‘s newest interactive game that “lets you see if you’ve got what it takes for the Brooklyn bench” — it’s called The Judges Game.

I won’t tell you whether I passed, nor if I wanted to, but you’re encouraged to Comment and/or confide.

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August 9, 2003

NYS Bar Brochure Wins “JuDee” Pampleteering Citation

Filed under: pre-06-2006 — David Giacalone @ 9:02 pm

Weakend Special:

Explaining that bar groups can now use both online and hard copy brochures to keep legal consumers ignorant of their rights and options, ethicalEsq spokesperson Jackie Cliente announced that the first ethicalEsq JuDee Pampleteering Citation has been awarded to the New York Bar Association, for its brochure “You and Your Lawyer“.

Named in honor of the famous biblical character, the Judas ESQariot Award Program was started in July 2003 (see “IL & MD lawyer groups win first “Judee” awards” (July 13, 2003), to recognize “exceptional efforts to promote the financial interests of lawyers while purporting to protect consumers of legal services” Affectionately called JuDees, the awards are granted, in various categories, to especially deserving lawyer groups.

You and Your Lawyer came to the attention of ethicalEsq last week when an NYSBA press release announced (Aug. 1, 2003) that the Association was “making available to consumers revised and updated legal information pamphlets” on various subjects, from its LegalEase series of pamphlets. The release noted that “Six of the 14 titles in the series have been translated into Spanish in order to broaden the reach of this information to all New Yorkers.” [Click here for the folleto Usted y Su Abogado.]

Launching the LegalEase update, NYSBA President A. Thomas Levin stated earnestly:

“It is important for citizens to understand how they are protected and affected by the law. In the interest of serving the public, NYSBA has developed this series of legal pamphlets to provide New Yorkers with a basic overview of the law and the legal system.”(emphasis added)

You and Your Lawyers, which is modestly described as merely giving information “on who needs a lawyer and when, legal fee basics, and tips on communicating successfully with your attorney,” easily meets the criteria of the JuDee review panel — with particularly notable efforts related to contingency fees and so-called “self-help” programs.

With this brochure, NYSBA boldly defies both consumer advocates (who say that personal injury clients should negotiate the percentage contingency fee charged or demand to pay an hourly fee, since taking one-third of the amount recovered is often excessive) and defenders of the contingency fee system (who insist that there is no “standard” contingency fee and that risk should indeed be taken into account when setting the fee). The pamphlet explains (emphasis added):

The basis for a fee

. . . There are several other methods [besides hourly fees] used for computing legal fees, a combination of which may be used: . . .

3. In some cases, the result itself may determine the fee. This is called a contingency arrangement which is the norm in New York State in personal injury cases, and prohibited in criminal and most injury cases. The lawyer receives no fee unless money is recovered for the client. If money is recovered, then the lawyer is paid an agreed upon percentage of the recovery, which in New York State might be about 33%, depending upon the amount recovered.

Similarly, NYSBA refuses to join the self-help bandwagon by suggesting that kits, books or software might give consumers useful access to legal services. Instead, You and Your Lawyer warns of dire consequences to be paid by any “fool” who attempts to solve legal problems without using a lawyer (emphasis admiringly added):

Why you should not seek to handle your own legal affairs

A number of do-it-yourself “kits” are offered for sale from time to time. Kits are available for getting a divorce, declaring bankruptcy, or forming a business. It’s not illegal for you to use these for your own affairs; however, you risk paying the consequences. Kits may appear to save you money, but a minor detail, one that you might overlook but one that a lawyer is trained to notice, could result in a loss far greater than what you “save” by trying to be your own lawyer. After all, there’s an old saying, even for lawyers, that “he who represents himself has a fool for a client.”

ethicalEsq‘s Editor beamed while awarding the JuDee Pampleteering Citation to NYSBA. Wondering aloud whether he should renew his long-lapsed membership in the bar group, he exclaimed “With fiduciaries like these, who needs felons?“.

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August 7, 2003

Proposed ABA Standards for Children’s Lawyers in Custody Cases are Dangerous for Children (and Their Attorneys)

Filed under: pre-06-2006 — David Giacalone @ 10:20 pm

At its Annual Meeting this week in S.F., the ABA House of Delegates is being asked to adopt Standards of Practice for Lawyers Representing Children in Custody Cases that will put children at risk in order to impose an inflexible definition of lawyer and a covert (and irresponsible) ideology of children’s rights on courts conducting custody proceedings and the lawyers who represent the affected children. (Click here for the Original Document in pdf form, approved by the Council of the ABA Family Law Section on May 2, 2003; or click here for an unformatted text version from ABA.)

Here are the major components of the Proposal, in the words of the Report (emphases added):

These Standards distinguish two distinct types of lawyers for children: (1) The Child’s Attorney, who provides independent legal representation in a traditional attorney-client relationship, giving the child a strong voice in the proceedings; and (2) The Best Interests Attorney, who independently investigates, assesses and advocates the child’s best interests as a lawyer.

These Standards seek to keep the best interests of children at the center of courts’ attention, and to build public confidence in a just and fair court system that works to promote the best interests of children. These Standards promote quality control, professionalism, clarity, uniformity and predictability.

These new Standards will improve practice nationwide by making it a clear that a lawyer always acts as a lawyer.
The major suggested change from existing laws is that the Standards delete use of the term “guardian ad litem” for lawyers representing children. . . . [A] person who serves essentially as a witness, by making a report on facts not otherwise in evidence, is not serving as a an attorney and thus is not covered under these Standards. The lawyer, when accepting such an appointment, figuratively puts his or her bar card in an envelope and is a volunteer in this nonlegal capacity.

The Child’s Attorney should abide by the client’s decisions about the objectives of the representation with respect to each issue on which the child is competent to direct the lawyer, and does so.

If the Child’s Attorney determines that pursuing the child’s expressed objective would put the child at risk of substantial physical, financial or other harm, and is not merely contrary to the lawyer’s opinion of the child’s interests, the lawyer may request appointment of a separate Best Interests Attorney and continue to represent the child’s expressed position, unless the child’s position is prohibited by law or without any factual foundation. The Child’s Attorney should not reveal the reason for the request for a Best Interests Attorney, which would compromise the child’s position, unless such disclosure is authorized by the ethics rule on confidentiality that is in force in the state.

These Standards do not presume that children of certain ages are “impaired,” “disabled,” “incompetent,” or lack capacity to determine their position in litigation. Disability is contextual, incremental, and may be intermittent. Lawyers for children are entitled to and should receive adequate and predictable compensation that is based on legal standards generally used for determining the reasonableness of privately-retained lawyers’ hourly fees in family law cases.

What’s going on here? Under the pretense of prescribing ethical requirements for attorneys representing children in custody cases, the Proposed Standards sweep away State statutes and precedent regarding the limited rights of minors in litigation matters or the goals of children’s lawyers in family court matters, as well as current ethical rules for attorneys representing persons under a disability (including, specifically, minors), and simply announce new children’s rights that an attorney ethically must protect and assert to avoid being in violation of his or her ethical standards.

It’s ironic that the Proposed Standards insist on giving children the same rights as adult clients, but are filled with cautions stemming from the special, nonadult shortcomings of minors — from the lawyer’s need to understand child development and form a special relationship of trust with the client (especially useful to talk the client out of dangerous objectives), to the child client’s capacity to be influenced unduly by parents (or by the lawyer), and to the child’s tendency to frequently change his or her mind as to objectives and to be unreliable as a source of information.

Current ethical rules, and volumes of court opinions, already deal rather well with the situation of a child client:

Model Rule 1.14 (a) already covers clients whose ability to make adequate decisions is impaired “because of minority“. It requires the lawyer to maintain a normal attorney-client relationship “as far as reasonably possible,” not to be the government-paid, robot-mouthpiece of an adolescent or subteen. The Commentary to Rule 1.14 says “children as young as five or six years of age, and certainly those of ten or twelve, are regarded as having opinions that are entitled to weight in legal proceedings concerning their custody.” Having your wishes heard and considered is a far cry from being entitled to totally control an attorney’s position and decision-making.
Similarly, EC 7-11 of the Code of Professional Responsibility reminds us that the role of lawyer is not always that of blindly zealous advocate: “The responsibilities of a lawyer may vary according to the intelligence, experience, mental condition or age of a client, the obligation of a public officer, or the nature of the particular proceeding.” (emphases added)

As the New York County Family Court has explained: “There is nothing in the statutes nor in the case law, however, which say a Law Guardian in a custody proceeding should advocate for the child’s wishes at the expense of his over-all interests or at the expense of a full presentation of the facs.” Therefore, the role of the child’s representative under EC 7-11 is to exercise a “mature judgement” to safeguard the child’s interests. Scott L v. Bruce N., 134 Misc.2d 240 (1986).

In your Editor’s opinion (which this time is based on actual experience*), if the Proposed Standards are adopted and then followed, they would — rather than achieve their stated goals — do the following:

1. Make it more difficult for a child’s attorney to get all relevant information in front of the judge. Under the Proposal, the Child’s Attorney would instead have the obligation to try to suppress or hide facts from the court that would not help achive the client’s expressed objectives — including coaching the client before in camera interviews or testifying about how to stress or leave out particular information. And, more important perhaps, because both types of attorney a prohibited from making a report to a court, force more matters to proceed to trial in order to get necessary information before the court. (Can’t we trust judges to weigh the value of a Report from the child’s lawyer?)

2. Cause the public to lose confidence in the courts. (Try these questions in a poll: “Would you support the government paying lawyers to help children oppose their parents in custody cases? Do you think your child would do a good job directing a lawyer’s in such a case?)

3. Create great confusion in places where little or none exists.

4. Greatly incease expenses for the government (and all parties) at a time when all state governments are cutting budgets — if e.g.,

a Best Interests Attorney is appointed at the request of a Child’s Attorney (and must begin a fresh, undirected investigation);

the child’s lawyer can’t play the mediator-like role of getting the parents to come to an agreement in the child’s best interests and settle;

important information must come in through an evidentiary hearing rather than through the Report of the child’s lawyer; compensation is increased as suggested in the Standards, to the same level as private-practice attorney’s in the area — which would probably mean at least tripling the courrent fees for court-appointed children’s lawyers

5. Multiply the number of motions by lawyers for one or both parents seeking to have the child’s lawyer dismissed or disciplined for failing to meet the new Standards.

6. Cause many dedicated children’s lawyers to refuse appointment rather than being forced to play the role of child’s mouthpiece as a Child’s Attorney; to serve less effectively as a Best Interests Attorney without the ability to submit Reports to the court and the parties; or to risk bar discipline should they act according to their best judgment and conscience to prevent harm to a client. And,

7. Most important, injure many minor clients by giving them (a) too much power over their fate — resulting in prolonged proceedings, and custody settlements or court decisions that place them in harmful situations; (b) a false impression of their ability to influence the outcome of the custody proceeding, resulting in frustration, rage, cyncism; or (c) a tool to use in a battle with one or both of their parents.

Courts may not be appointing children’s lawyers in enough cases. Certainly, many court-appointed lawyers need more training and more diligence. And, too few lawyers may be willing to take on the complicated, demanding role of a child’s court-appointed lawyer — especially, because the fees are so low. There is, however, no great crisis over the role of the child’s lawyer unless you posit that the child has the same rights as any adult party to a custody proceeding and the same right to control counsel. Is that where we want our law and legal ethics to go?

Through experience, common sense, and fairness, we have learned that a custody determination is far more likely to discern the child’s best interests, if the child’s input is sought, and fully considered, and the child has the advantage of receiving advice from a knowledgeable and caring legal professional.

The child has the right to be saved from his or her own immature judgment, which can often undervalue or ignore important interests and needs — especially longterm ones.

We don’t need to create new rights for children in custody cases — certainly not under the guise of promulgating legal ethics rules, rather than legislative or judicial action.

This Editor believes: Each child in a custody case has the right to a lawyer who respects his or her individuality and opinion (giving it all the consideration and weight it merits in the circumstances), and who has the mature judgment, competence and diligence needed to determine and effectively advocate and protect the child’s best interests.

*I practiced in NYS Family Court for a decade in various capacities (including law clerk and private practitioner), with the bulk of my work being the representation of children as a court-appointed Law Guardian (in about 400 proceedings). I also headed the not-for-profit Law Guardian Backup Center, in 1991 and 1992, giving research assistance and advice to hundreds of Law Guardians. In addition, I sat on the NYSBA Committee on Juvenile Justice and Child Welfare, which drafted the Law Guardian Representation Standards for Custody Cases (1992). As with the proposed ABA Standards, the NYSBA Custody Standards were drafted without regard to court precedent or existing general ethical rules for representing minors — instead, they both covertly impose a children’s rights agenda in the name of giving children a meaningful voice. The NYSBA Standards (at 23) state that the Law Guardian’s position and plan for each case should be developed with “the agreement” of any child able to “articulate his or her desires and to assist counsel.”

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August 5, 2003

Did This “Dream Team” Ever Take Antitrust 101?

Filed under: pre-06-2006 — David Giacalone @ 12:51 am

The Falstaffian tv news reporter seemed quite excited tonight, when he announced to the New York Capital Region that we’re about to have our own “Dream Team” of lawyers. Four of the biggest names in the local legal community, and biggest personal injury advertisers, were joining together to market themselves as the “Dream Team” — with joint tv ads, billboards, and 1-800 number. Unless a caller to their joint phone number already has a preference among the firms, the prospects will be assigned to each of the joint marketers on a rotating basis. The lawyers will have all the marketing advantages of a partnership while keeping their own firms! (NewsTen, WTEN.com, Albany, NY, reported by John McLoughlin, 8/4/03)

The four attorneys are E. Stewart Jones (of the Jones Law Firm, in Troy), Steve Coffey and Tom DiNovo of Albany’s O’Connell & Aronowitz, and Donald Boyajian of Dreyer Boyajian LLP. They are indeed among the best known lawyers in the New York Capital Region.

The story was also covered today in the online version of the Albany Business Review (Local attorneys market themselves as ‘Dream Team’, by Barbara Pinckney, 8/04/03). The Business Review (BizJournal) article quoted a breathless advertising agency representative (who I guess gets credit for the quartet’s very creative name):

“It’s very exiting,” said Ginny Siciliano, a partner in Ad Ease GMP Group, the Schenectady advertising and marketing firm that put the foursome together. “It has never been done anywhere.” . . . “These are the big players, when you think of lawyers in this area,” Siciliano said. “And with a lot of those national 1-800 numbers, you don’t know who you’re calling.” (emphasis added)

The Business Review article continued: “The ad campaign began with eight billboards announcing that “The Dream Team” was coming. On Aug. 6, those billboards will include pictures of the four attorneys and the 1-800 number. The television spots also will begin airing that day.”

Now, I have championed the right of lawyers to advertise since I was in law school 30 years ago, because I believe that truthful advertising can increase competition for legal services and help consumers make intelligent choices. My faith in legal advertising has been shaken over the years — due to incessant, tasteless, content-free ads that insult the consumer’s intelligence and never talk price — but, I still support the right to advertise and am cautiously optimistic that it will someday fulfill its promise.

Nonetheless, I just couldn’t get as excited as Ms. Siciliano. Instead, I thought, “Didn’t any of these guys take an Antitrust class?” That’s a question I’ve often asked myself about “Main Street” lawyers since leaving my job at the FTC — not because I expect them to be experts in the specialty, but because I believe that every lawyer should at least hear a bell go off when encountering competitors acting jointly in the marketplace (especially when they are themselves the competitors in question).

Of course, I don’t know all the facts, and don’t know if heavy-hitter antitrust lawyers have already advised the Albany-Troy-Schenectay-Saratoga Area “Dream Team” that the project can pass legal muster. But, I’m skeptical that competition is increased by four big advertisers marketing themselves jointly.

Normally, “coop advertising” where competitors get together to pay for an ad — e.g., neighborhood liquor stores — are allowed because the stores could not otherwise afford to advertise in a newspaper or on tv.

Sure, joint ventures can increase competition, but they are very likely to decrease competition when the members of the joint venture:

hold a significant joint market share
do not integrate activities in any substantial way
make joint decisions on important competitive factors (such as how much to advertise, or whether or not to compete on price or pricing terms in their ads)
allocate clients rather than competing for them
increase entry barriers for new competitors, or
facilitate explicit or tacit collusion, through activities such as disclosing competively sensitive information or increasing market concentration

Some of these factors seem to apply to the Dream Team. If they or their lawyers have not done so already, I suggest that this “Dream Team” read and contemplate the following documents, before the ads hits the airwaves and the billboards are unveiled on August 6th:

DOJ/FTC Joint Venture Guidelines (April, 2000). This 39-page pdf document provides a useful anaylsis of the many issues raised when competitors collaborate in joint business ventures.

FTC v. Polygram Holding Corp et al. (Docket 9298, July 28, 2003). Just last week, in this important “Three Tenors” decision, the FTC found that Vivendi illegally agreed with Warner Communications Inc. to curb discounting and advertising as part of a joint venture.

Chairman Timothy J. Muris emphasized in the opinion that “[N]o analytical exercise is more important to U.S. competition policy than defining the bounds of acceptable cooperation between direct rivals.” Therefore, the opinion gives an extensive history and discussion of the analysis appropriate in determining the legality of joint competitor conduct.

Antitrust and the Learned Professions This chapter, from a monograph by the American Antitrust Institute explains how and why antitcompetitive practices by professionals such as medical doctors, engineers and lawyers came to be recognized as illegal under the antitrust laws.

I don’t know the ultimate antitrust effects or ramifications of the “Dream Team” joint marketing efforts. However, from an ethical perspective, it’s clear that conduct amounting to an antitrust violation is improper, beyond merely breaking a law, as it injures consumers by limiting their choices and raising price. I hope that federal or state antitrust prosecutors will look very closely at this joint venture. At a time when p/i lawyers are trying very hard to avoid competing over the percentage contingency fee they charge, the loss of advertising rivalry is especially worrisome.

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August 4, 2003

Legal Profession Reform Is Coming Much Sooner in UK Than US

Filed under: pre-06-2006 — David Giacalone @ 1:50 pm

August means cool vacation retreats for leaders of the US bar, but it’s already hot-seat time for Peter Williamson, the new President of UK’s Law Society, which serves as both bar association and regulating body of the 90,000-member British legal profession. The London Times published an interview with Williamson last week.

(London Times, “Battle lines: Our correspondent meets Peter Williamson, the new boss of the under-threat solicitors’ union,” by Frances Gibb, July 29, 2003) [Link from Law.com Daily Legal NewsWire, Aug. 4, 2003.]

As we discussed here in a posting on July 24, the UK Government has begun a major review of the national lawyer disciplinary system and its training and competitive structure. The Law Society is expected to lose its self-regulating powers and the legal profession is expected to face significant new sources and types of competition.

Williamson’s comments show a strong kinship between British lawyers and their American cousins — a dominant guild gene. The American bar must be quite relieved that the Colonies revolted back in 1776, removing their fate from the hands of the British Lord High Chancellor. Of course, Amercian legal reformers feel quite differently. The London Times interview with Williamson shows that many of the same legal services issues exist on both sides of the Atlantic Ocean, but with very different regulatory systems and reform impulses. Seeing the differences and similarities is quite telling.

Although there is plenty of anti-lawyer feeling in the United States, and consumer discontent, there is no way to focus reform efforts, because of the local regulation of the profession. With problems such as multi-disciplinary practice (MDP) or the definition of “the practice of law,” for example, the need for change eventually results in a major ABA study or commission, fierce debate within the ABA and, then, separate versions of the same process in each of the 50 states, with vastly different (or no) results in the separate jurisdictions. (E.g., check out the ABA Joint Committee on Lawyer Regulation and the page listing state-by-state links on MDP committees and reports from each state.)

In contrast, the Financial Times wrote on July 25th that current reform efforts are “likely to lead to the legal world’s own version of ‘big bang’ deregulation’. David Clementi, who heads the new independent review, is expected to report back by the end of the year, and has been “asked to work out how – rather than whether – such changes should take effect.” [Link from Larry Bodine’s Law Marketing Blog, July 26, 2003.]

Self-Regulation: A quick look at our Discipline System Resouces page demonstrates that decades of calls for reforming the American system of lawyer self-regulation have failed and appear to have no likelihood of success (at least in my lifetime). In Britain, in the face of a rise in client complaints from 10,585 to 14,880 in one year, powerful UK leaders are calling for an end to attorney self-regulation, and the creation instead of a “super-ombudsman” to oversee the lawyer discipline process.

Law Society President Williamson admits there is a problem with the way complaints have been handled but, “wearing his trade union hat,” told the Times (emphasis added):

“I very much hope we can avoid the step of some kind of legal services commissioner because it is not in the best interests of the public. It will be very, very demoralising . . . and the threat of fines does not mean the work will be done better or more quickly.”

Although Williamson supports more open access for the public to information about disciplined lawyers — “naming and shaming” — he does not want the statistics about the aggregate number of complaints to be public and he appears to regret the Law Society’s own Client’s Charter, which “tells clients how to complain.”

Similarly, the Financial Times reported that the Law Society “ insisted self-regulation was the only way to guarantee lawyers’ independence.” [emphasis added]

Opening Markets

. While there have been some US breakthroughs lately in the area of multi-jurisdictional practice (see our posting on July 27, 2003), our law markets are not being opened to competition and partnerships with other professionals (see the ABA on MDP), and the organized bar in America continues to war against nonlawyer providers of legal services (see our ULP Resources Page).

In contrast, as the Financial Times reports (emphases added),

“A radical shake-up of the legal profession paving the way for law firms to float on the stock exchange and supermarkets to offer ‘Tesco law‘ was announced yesterday by the government [Tesco is the largest supermarket chain in Britain]. . . . Lord Falconer, the constitutional affairs secretary, said:

“There will need to be quality control, but if we can get to the point where there is ‘Tesco law’, we think that’s probably something of interest to the consumer.”

The Financial Times explained further, “The deregulation would open the door to mergers and diversification where accountants and lawyers in England and Wales could combine to form complete business services practices. Investment banks could also set up, or take over, legal teams to provide a full transaction facility.” The review commission is also “charged with drawing up new principles that will sweep away restrictions that stop companies such as banks and insurers offering legal advice to their clients, so such services would be available on the high street, including at supermarkets.” In addition, banks and building societies and insurance companies are being immediately allowed to help bereaved families administer wills.

The Financial Times added “The Law Society warned that new entrants to the market could ‘cherry-pick‘ the most profitable legal services and drive traditional lawyers out of business” — a refrain heard universally by American professionals facing deregulation. The London Times reports, however, that:

Williamson is with ministers over moves for greater competition and relaxing the rules so that solicitors can work for supermarkets — the “Tesco law” — as well as one-stop shops. “I’m keen to move forward the debate on competition and on the ‘modernising’ agenda — and to press for further liberalisation of the legal services market overseas.”

Access

Although the systems are very different, both the US and UK bars are concerned over over low-pay by the government for legal services to the poor. On this issue, The London Times notes about Law Society President Williamson:

But as a steady pair of hands who has been on the society council for ten years, he is tuned into the high street solicitor for whom the battle is not regulation but decent pay rates for legal aid work. It is not just a trade union issue. “This Government pledged to improve access to justice. But many people find it increasingly difficult to get legal aid. There are parts of the country very poorly served because firms are closing down. And there is a real danger we will no longer have a nationwide network of lawyers to do family or criminal work.” [emphases added]

So far, I’ve seen no threats of work stoppages in Britain similar to the current boycotts in Massachusetts and Oregon, as well as in D.C. in 1988.

That should be enough to chew on over your coffee or tea break today.

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August 3, 2003

ethicalQuickie: sexual relations rule is overbroad

Filed under: pre-06-2006 — David Giacalone @ 8:57 pm

To the utter surprise of this Editor, there appears to be a considerable amount of interest about the Washingon (State) lawyer who is being suspended from practice for a year for having sex in a jail cell with her murder-defendant client. Ken Lammers at CrimLaw Blog raised the topic on Thursday (7/31/03) and discussed some caselaw on August 2nd, while that ol’ CurmudgeonlyClerk added comments and research on Friday (8/01/03). They were both responding to a story that has received a lot of media attention since July 29th, for example from CNN’s law page.

Although none of my frequent readers wants mere gossip, as a public service for others attracted by the headline of this posting, I’m linking here to the saucy Seattle Post-Intelligencer Lifestyle Column by Susan Paynter, which gives a lot of highly unnecessary details. (July 30, 2003). For some reason, Paynter thinks somebody would care that “[I]t’s far from over, personally, professionally or legally, for the flamboyant, crusading 43-year-old defender who allegedly had sex with her 26-year-old client much more often than once.” Or, that Olson was “continuing the Clintonian insistence the act she engaged in “‘wasn’t sexual intercourse.'” Throwing in a couple quotes from the Supreme Court justice who drafted the Court Rule banning lawyer-client sex really doesn’t give the column any socially redeeming value either.

ethicalEsq? will instead keep itself out of the editorial gutter by focusing on the ethical controversy within the profession over recently-drafted and adopted rules that ban all sexual relations between an attorney and a client (unless a consensual sexual relationship existed with the client prior to entering into the lawyer-client relationship). As the Curmudgeonly Law Clerk explains:

“Indeed, there is a growing body of caselaw on the issue of sexual contact with clients in a variety of contexts. However, the notion that lawyers and clients may never, under any circumstances, become romantically or physically involved is actually quite controversial. For a thorough synopsis of the debate over relatively new rules in this area of attorney ethics, see Christian F. Southwick, Ardor and Advocacy: Attorney-Client Sexual Relations and the Regulatory Impulse in Texas and Across the Nation, 44 South Texas Law Review 307 (2002). [apparently not yet available online]

You can find ABA Model Rule of Professional Conduct 1.8(j-k), which bans sexual relations with clients here. The relevant sections of Rule 1.8 are:

(j) A lawyer shall not have sexual relations with a client unless a consensual sexual relationship existed between them when the client-lawyer relationship commenced.

(k) While lawyers are associated in a firm, a prohibition in the foregoing paragraphs (a) through (i) that applies to any one of them shall apply to all of them.

Washington State Rule 1.8(k) can be found here. In addition to the Model Rule’s ban, it addresses (but not very helpfully) the issue raised by the representation of an organization rather than an individual, and explicitly states that the rule does not apply to lawyers in a firm who do not actually participate in the representation of the client.

Your Editor has a some problems with blanket bans. The primary fault is that they seem to ignore the not infrequent situation where both the lawyer and the client are adults. Of course, there are circumstances where it is ethically improper for a lawyer to have a sexual relations with a client. However, to say that all such conduct is improper (unless there was a prior relationship) seems to place regulatory convenience over common sense, and to show a greater suspicion about the character of lawyers than is otherwise present in the disciplinary system (e.g., regarding fees).

Imagine, for example, the young, single lawyer and client who meet and fall in love while working on a complex tax or bankruptcy case that takes several years to complete, rather than during the early stage of a matrimonial matter, where the client is emotionally fragile. At what point does the ban become absurd?

I think lawyers can handle a more subtle approach that requires using a concept more sophisticated than a total ban. The route taken in the New York State Code Model Code DR 5-111 seems far preferable:

DR5-111 Sexual Relations with Clients.

A. “Sexual relations” means sexual intercourse or the touching of an intimate part of another person for the purpose of sexual arousal, sexual gratification, or sexual abuse.

B. A lawyer shall not:

1. Require or demand sexual relations with a client or third party incident to or as a condition of any professional representation.

2. Employ coercion, intimidation, or undue influence in entering into sexual relations with a client.

3. In domestic relations matters, enter into a sexual relations with a client during the course of the lawyer’s representation of the client.

C. DR 5-111 (B) shall not apply to sexual relations between spouses or to ongoing consensual sexual relationships that predate the initiation of the lawyer-client relationship.

D. Where a lawyer in a firm has sexual relations with a client but does not participate in the representation of that client, the lawyers in the firm shall not be subject to discipline under this rule solely because of the occurrence of such sexual relations.

It is hard to imagine a consensual sexual relationship that would not be covered by DR 5-111, but which should nonetheless be the subject of discipline as improper professional conduct — especially when New Model Rule 8.4 also covers “conduct involving dishonesty, fraud, deceit or mispresentation,” and virtually all states (including Washington) are still using an older version of Rule 8.4, which also prohibits “any act involving moral turpitude, or corruption” and “conduct demonstrating unfitness to practice law.”

To be frank, I’m even leery of the blanket ban against sexual relations within matrimonial matters set out in subsection B (3) and in the Rules of other states. Although written to apply to both genders, the source of the ban appears to be the somewhat sexist notion that female matrimonial clients need special protection from male matrimonial lawyers. The emotional state of a matrimonial client certainly could and should be taken into account within the factors set of in subsections B(1) and (2). Picking out a particular kind of case for a total ban might, in fact, create fertile grounds for loophole-making by zealous defense counsel in disciplinary hearings.

As always, I encourage your Comments.

BuffsLaw asks whether the sex bans reflect sexist attitudes about powerful male lawyers and weak females, and the meaning of that stereotype within the profession here (April 23, 2005),

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August 2, 2003

Even When It’s Show Biz, Judicial Discipline Is the Public’s Business

Filed under: pre-06-2006 — David Giacalone @ 4:09 pm

Troy (NY) City Court Judge Henry Bauer has been putting on quite a show this week (including blaming the ACLU for his woes), while combatting charges that he has deprived dozens of criminal defendants of “basic fundamental rights.” But, it’s not the entertainment value that makes me agree with today’s lead editorial in the Albany, NY, Times Union that New York and other laggard jurisdictions should join the vast majority of states, which require open hearings when a judge has been charged with judicial misconduct. (A judge on trial: The disciplinary hearing of a Troy jurist should be the model for all such proceedings, Aug. 2, 2003)

As the TU explains:

“Normally, such a disciplinary proceeding would be conducted behind closed doors, as stipulated by the Legislature, which created the 11-member watchdog panel in 1974. The accused has a right to a trial before a judge and, if he or she requests, an open proceeding. But in the last 25 years, that has happened only nine times.”

“Whatever the outcome of the charges against Troy City Court Judge Henry Bauer, he deserves credit for wanting to face his accusers in public. The irony is, many of his accusers, and the state’s chief judge, want the same openness for all such proceedings, if only the state Legislature would agree.”

In a posting on June 25, 2003, this weblog agreed with proposals by the legal reform group HALT, regarding the attorney disciplinary system. HALT argues that attorney discipline must be tougher and quicker, and far more open — including having hearings open to the complainant and the public. Those arguments are even stronger with regard to misconduct by judges, who are public officials whose proper conduct and integrity are obviously crucial for our justice system.

In February 2002, the Times Union ran a 5-part editorial series on the judicial disciplinary process, called “Unequal Justice“. It’s still available online at no charge and well worth reading. (scroll down the Opinion page to locate the links). The individual segments in the series are:

Privileged chambers
Justice denied
Conduct unbecoming
Starving the watchdog
The need for reform

In calling for reform, the closing editorial in the series discussed possible changes in the doctrine of judicial immunity, and then correctly asserts (emphasis added):

The first step toward any reform, however, must be to end the secrecy that now surrounds the commission’s investigations. Thirty-five other states already mandate open hearings for judges facing misconduct charges. But New York continues to shut the public out of proceedings that are clearly the public’s business.

The 2002 editorial also complained about political posturing and gridlock since attempts began in 1996 to open the hearings. Today’s editorial again decries cynical political antics that mouth support but undermine passage, and adds (emphasis added):

“The posturing is largely a reflection of the fact that most legislators are lawyers, and they fear that if judicial disciplinary hearings were opened to the public, similar hearings on attorney misconduct would be sure to follow.

“But that’s unfounded. Judge Bauer is not a private practice attorney. He’s a public servant, and it is only fitting that the charges leveled against him should be aired in public. That same principle should apply to all jurists in New York state, whether a part-time justice of the peace, or a Court of Appeals judge. Fittingly, the state’s chief judge, Judith Kaye, has long advocated such openness, and so do some members of the commission itself. It’s past time the Legislature did as well.”

[Note: I hope the TU will someday publically endorse requiring open lawyer disciplinary hearings, too. Last month, the newspaper declined to publish my op/ed piece calling for such reform; its local competitor did publish it, and the article is available on this site, here.]

I’m afraid the TU is correct that it is, among other things, opposition from the bar that is preventing this reform. Earlier this year, the NYSBA’s House of Delegates debated and defeated a proposal by its own Special Committee on Public Trust and Confidence in the Legal System to open attorney discipline proceedings. (March/April 2003 State Bar News, member-only access to the document) In February, 2002, the House had also “declined to adopt” a similar proposal.

Unfortunately, in his first “President’s Message” column in the NYSBA Journal, their new President, A. Thomas Levin, appears to be signalling an analogous desire to keep the judicial misconduct process and hearings closed. After pointing out that the judicial system is “under the public scrutiny microscope at all times,” Levin takes the uncontroversial stance that “we should await the full airing of the facts before we reach conclusions about the built or innocence of any individual.” But, he then adds:

However, we must also recognize that the media, and the public, are under no such contraints, and do not respect them. Thus, in the public mind, those accused of judicial misconduct are guilty as charged. The disrespect this has generated for the judicial system, and the legal profession, is profoundly disturbing.

Frankly, I’m more “disturbed” by this demonstrated disrespect for the public. No matter how unsuccessful their reform efforts have been in state legislatures and within the organized bar, those calling for an open process of judicial and lawyer discipline seem to have the far better of this argument — that is, if the public and the client are really in charge.

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August 1, 2003

Surprise: Clients Want Efficiency (with Lower Fees), Competence and Information

Filed under: pre-06-2006 — David Giacalone @ 12:08 pm

LawMarketing Blog had a very important posting recently about what clients want from their lawyers. Titled “Verbatim Comments from Clients” (July 21, 2003), the piece gives quotes from focus group participants who “were 80 purchasers of legal services — clients and prospects in large organizations with $500+ million in revenue.”

Lawyers need to read and re-read these quotes, and I wish they could listen to the tape. My main reactions:

It’s no surprise that “big” clients want the same thing as the “little guy” — efficiency, competence and enough information to feel in the loop and in charge.
It’s sad that lawyers need to hear this over and over, but somehow never get the message.

[Thanks to Benefits Law Blog for pointing to this article today.]

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N.Y. Appellate Court Disses and Dismisses Judge Ramos’ Try to Trim Tobacco Fees

Filed under: pre-06-2006 — David Giacalone @ 2:33 am

For over a year, Judge Charles E. Ramos had sought to review the $625 million in fees awarded to six law firms that had represented the State in a tobacco lawsuit, which netted a $25 billion settlement for New York. His campaign ended yesterday (July 31, 2003), as Ramos was overwhelmingly defeated before the 1st Department Appellate Division Court. In an article for the New York Law Journal, captioned N.Y. Panel Rejects Review Of Tobacco Fee Award (posted on Law.com, Aug. 1. 2003), reporter Daniel Wise aptly sums up Ramos’ drastic defeat:

Though finding “laudable” Ramos’ concern that the fee award might be “excessive,” Justice Richard T. Andrias found him wrong, and in instances dead wrong, on every legal conclusion he had to reach in order to proceed with his inquiry. Even Ramos’ concern over the amount of the fees was based on a factual “misapprehension” and was reached by reviewing the fee award out of context, Andrias wrote for a unanimous panel in State of New York v. Philip Morris, 1360N. Andrias further suggested that Ramos had done the six firms an injustice by “hauling” them into court without any legal authority. The panel also reversed Ramos’ order appointing an independent counsel to defend his ruling on the appeal . . . (emphases added)

Wise further explained the Court reasoning:

“In undertaking a review of the New York award on his own initiative, Ramos had focused on the large dollar amount without properly placing it in context, Andrias suggested. The award amounted to “approximately 2 percent” of New York’s recovery, he noted, while the firm’s retainer agreement with the state would have allowed for fees of 4 percent on any recovery pursuant to a settlement agreement. Andrias also faulted Ramos for laboring under the “misapprehension” that a reduction in legal fees could increase the state’s recovery.” . (emphases added)

In addition, Wise writes that Justice Richard T. Andrias, who wrote the Court’s opinion, “also criticized Ramos for ‘foisting’ independent counsel upon the class members, which consisted of the 57 counties and New York City. He described the class members as ‘sophisticated’ litigants who have made it clear that they do not want independent counsel to represent their interests.

In sum, Ramos had no authority to review the “reasonableness” of the fees (in effect, reversing the appellate court’s review), or to appoint independent counsel, and he misunderstood the relatively modest percentage size of the fee awards. The $13,000 per hour figure was simply not excessive, as the percentage rate applied to the damages award was not excessive.

We posted on this matter on May 30, 2003, asking whether a fee is ever too large. Apparently, an effective rate of $13,000 per hour isn’t, when it’s the result of a calculus that seems reasonable. Getting 2%, instead of the 4% allowed in the retainer agreement, is acceptable, despite the size of the multiplicand or the resulting hourly rate. Ramos’ appointed independent counsel said he would be seeking review at the Court of Appeals, despite great uncertainty over how or if he’ll be paid.

This result is disappointing, but the case contains a lot of special factors that are unlikely to arise frequently in the arena of highstakes contingency fees. We can, therefore, still hope that other judges will take a hard look at large fee awards and perhaps help craft a principle that can reign in contingency fee awards that amount to many many thousands of dollars per hour and — because of the enormous total — cannot be justified by the risk taken by the lawyers.

Supplement: The Albany (NY) Times Union covered the story this morning, and has a number of interesting quotes and observations. (Court cuts short scrutiny of fees in tobacco suit Albany — Justice sought recalculation of $625M paid to lawyers hired by state, by Andrew Tilghman, Aug. !, 2003)

Here are excerpts from the article (emphases added):

The move reverses the judge’s order that the fees be recalculated and some of the fees paid by the tobacco companies be taken from the lawyers and given to New York state.

State Attorney General Elliot Spitzer had fought the judge’s effort, arguing that it would threaten the entire $25 billion Master Settlement Agreement, or MSA, reached in 1998 between New York and the tobacco industry, one that the state has depended on to help balance the budget. “We did not want the judge’s well-intentioned actions to jeopardize the MSA in any way,” Darren Dopp, a spokesman for Spitzer’s office, said on Thursday after the ruling.

But other observers said Ramos had no intention of altering the master agreement and that the entire case, along with the appellate court’s decision, illustrates the power of big money in the legal system.

“I wouldn’t categorize it as a surprise because you expect the court to follow the money,” said Cardozo School of Law professor Lester Brickman, who teaches the country’s only seminar on the ethics of legal fees.

Brickman said he was disappointed that nobody on the four-judge panel dissented. “I might have hoped that one of the four judges might have expressed some concern about the total lack of application of the ethical rules to these absolutely gargantuan and unearned fees,” he said.

P.S. Last night and late this morning, I searched the New York Times web site to see if this important newspaper covered this important case. Once again, I got no search results, as happened back in June. I just don’t understand.

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