This article is a companion to Chuck Lundberg’s article, Ethical Emergencies When a Lawyer Makes a Mistake, Minnesota Lawyer, April 10, 2023. Chuck dealt with general principles. Specific quandaries are the main subject here, but first two introductory comments.
First, a useful ethics maxim illuminates what lawyers should do after recognizing their own mistakes. “The existence of twilight does not mean there is no night or day.” This means that in some cases duty and prudence clearly point toward disclosure and remediation, in many cases nothing needs to be said, and in a few cases the best response is unclear.
In 2019, the Lawyers Board repealed its Opinion 21, “A Lawyer’s Duty to Consult With a Client About the Lawyer’s Own Malpractice.” The main sources for Op. 21 were the holdings on the Minnesota law of fiduciary duty in Leonard v. Dorsey & Whitney LLP, 553 F.3d 609 (8th Cir. 2009). The Board proposed an amended Op. 21 that would conform to ABA Formal Opinion 481, “A Lawyer’s Duty to Inform a Current or Former Client of the Lawyer’s Material Error” (2019). However, comments revealed a serious problem with ABA Op. 481, and the Board did not adopt a substitute for repealed Op. 21. The fact that ethics authorities have been unable to provide a clear and comprehensive guide does not mean there are no guidelines. Rather, it means that the best answers to a few genuine quandaries are debatable and that universal principles are difficult to discern.
Second, ABA Op. 481 has a serious problem in defining the “material error” that triggers a duty to communicate with a client. Op. 481 defines material error to include an error “of such a nature that it would reasonably cause a client to consider terminating the representation even in the absence of harm or prejudice.” This standard is so vague that it invites plaintiffs’ malpractice experts to opine that “a client” would “consider terminating the representation” after almost any error — including the error alleged in the malpractice suit, which the lawyer denies. Experts would also opine that an alleged failure to disclose breached fiduciary duty, and that the breach was serious enough to warrant fee forfeiture as well as recovery of actual damages. Thus, the ABA invites plaintiffs’ malpractice lawyers to juice up ordinary complaints of lawyer error with allegations of fiduciary breach. Op. 481 did not cite any source or precedent for this novel — and dangerous — disclosure trigger.
Keeping in mind the principles Chuck describes, and these problems, let’s examine several situations that lawyers may confront.
- An associate, Taylor, discloses to the firm’s ethics partner that Taylor has missed a statute of limitations. The firm’s policy requires Taylor to consult with the ethics partner. Consultation reveals that Taylor initially attempted to conceal the error by destroying and altering computer documents. Taylor is up for partner this year. What should the ethics partner do now?
Who is the ethics partner’s client? The partner represents the firm, and the firm represents its client. Does the ethics partner also represent Taylor? How should the firm’s policy deal with this possible situation? On one hand, encouraging and requiring communication of errors is a good policy; on the other hand, the interests of lawyers who report their errors may differ and even conflict with the interests of the firm and the firm’s client.
- Chris is a new associate who makes several terrible blunders in drafting a brief for a partner’s review. The partner corrects the errors before finalizing the brief, and does not bill Chris’s time. Is disclosing the blunders to the client advisable or required?
Former LPRB Op. 21 and Leonard would not require disclosure because harm has been averted. Would ABA Op. 481 require disclosure because a client (or is it this client?) would “consider terminating the representation even in the absence of harm or prejudice?” How this standard applies to these facts is open to debate. A leading Minnesota case on attorney fiduciary duty requires lawyers to “disclose any material matters bearing upon the representation.”1 In my opinion, a partner’s prompt corrective action prevented Chris’s backroom blunders from becoming material.
- J. D. Alter argues a summary judgment motion on behalf of plaintiff Daly. Preparing for hearing, Alter drafts an outline that makes five main arguments, each of which has two or three subsidiary arguments. At the hearing, Alter’s attention is diverted by questions from the court and Alter neglects to make several of the subsidiary arguments. Must Alter communicate these omissions to Daly? May Alter wait to see whether Daly prevails, or if Daly does not prevail, the court’s ruling does not appear to be affected by the omissions?
In addressing these questions, the rules give a tripartite guide that can be summarized in one question, “What would a good lawyer do in this situation?” First, “The Rules of Professional Conduct are rules of reason.” SCOPE . Second, “reasonable” denotes “the conduct of a reasonably prudent and competent lawyer.” Rule 1.0(i). Third, Rule 1.4 (“Communication”) requires a lawyer to “reasonably consult with the client,” and “keep the client reasonably informed,” and “explain a matter to the extent reasonably necessary.” In my opinion, a lawyer in Alter’s situation might well consider whether there is any currently available remediation for the omission and, if not, await the court’s ruling before considering disclosure. I say “might well,” rather than “should” because in an actual situation there are very likely additional circumstances, such as the nature of a particular attorney-client relationship, that would affect Alter’s judgment. I would also say that although every lawyer has, in the heat of litigation, forgotten to make some argument, pose some question, etc., few lawyers disclose such common omissions.
- Daly’s summary judgment motion is denied, but the court’s order is brief and conclusory. Alter cannot tell whether the omissions had any effect. The court orders mediation. Defendants make a new, somewhat higher settlement offer. Must Alter now disclose the omissions?
A lawyer’s material error can sometimes produce a conflict of interest between the lawyer’s interest and the client’s interests in the future handling of the case. The conflict is that the lawyer’s representation may become “materially limited,” under Rule 1.7(a)(2). The material limitation is that the lawyer’s representation may be skewed by a desire to avoid damages or embarrassment. A materially limited conflict may affect settlement advice. The erring lawyer may want to reach settlement so that the error does not come to light or, if already known to the client, to avoid or mitigate damages.
Here, Alter’s omitted arguments can be used at trial, thus mitigating any damages. If Alter has the case on a contingent fee basis, Daly may not incur great additional expense at trial. Assessing whether there is a materially limited representation conflict, and if so, determining how serious the conflict is, involves a likelihood calculation — what are the odds that Daly’s motion would have been granted if Alter had made all intended arguments? How subsidiary were the arguments? If Daly’s case is a small one, Alter may wish to ask a trusted partner to review the matter. If Daly’s case is a large one, Alter may wish to retain independent counsel for an opinion. Independent counsel could also assess the reasonableness of defendant’s settlement offer. Again, the best course of conduct may be affected by numerous circumstances not stated here; and disclosure to the client may sometimes be best even where it is not required.
- In a large firm’s Gaming Law practice group, several lawyers exchange e-mails expressing opposing views on whether government approval is needed for a client to make a certain amendment to an agreement for financing construction and initial operation of a casino. Wiseman is the practice group leader, an eminent national authority on the relevant law, and the billing attorney for the client. After reviewing colleagues’ emails, Wiseman opines that it is clear that governmental approval is not needed. Does fiduciary duty or Rule 1.4 require the firm to disclose the differences of opinion among the practice group members?
If the other practice group members are persuaded by Wiseman’s opinion, it seems clear that no disclosure is required. If some practice group members are not persuaded, but their reasoning is not persuasive to Wiseman, Wiseman still does not “know” or “believe” (the state of mind standards applicable under Board Op. 21 and ABA Op. 481) there has been an error. If a claim is made by a third party that government approval was in fact required, Wiseman may wish to disclose that he considered that position and rejected it for certain reasons. These facts summarize one of the issues in Leonard v. Dorsey & Whitney.
I hope that the law and its expositions, by Chuck and by me, have been clear on the matters we regarded as “night and day.” And I hope that we have provided some helpful guidelines for navigating the twilight.
1. STAR Ctrs., Inc. v. Faegre & Benson, L.L.P., 644 N.W.2d 72, 77 (Minn. 2002). “Would require” is used as to Op. 481 because, although ABA opinions are often followed, they have no intrinsic legal effect.
William J. Wernz is the author of the online treatise, “Minnesota Legal Ethics.” He has been a member of the Board on Judicial Standards, and he has served as Dorsey & Whitney’s ethics partner and as director of the Office of Lawyers Professional Responsibility.