By Samson Habte
July 14 — Defense counsel who, after interviewing a corporate client's current and former employees, conveys the company's offer to have its attorney also represent those individuals at the company's expense may be guilty of unethical solicitation if the “purpose of the communication from its inception” is to block a litigation opponent's access to potential witnesses, the New York County bar's ethics panel advised June 9.
“However,” it added, “we conclude that an offer of representation at the corporation's request would be proper where the lawyer initially interviews the employee as a non-client witness in order to learn relevant information and subsequently determines that the individual is in need of legal services as a party or potential testifying witness and that the concurrent representation would be permissible.”
The opinion addresses an issue that was at the center of Rivera v. Lutheran Med. Ctr., 866 N.Y.S.2d 520, 24 Law. Man. Prof. Conduct 608 (N.Y. Sup. Ct. Kings Cnty. 2008), a controversial ruling that drew flak from many in the corporate defense bar.
The Rivera court removed a law firm as counsel for a hospital in a discrimination suit after finding that it violated a predecessor to New York Rule of Professional Conduct 7.3(a), which prohibits in-person solicitation of clients, by offering to represent former hospital employees who were likely to become nonparty deponents.
Critics said Rivera was misguided because Rule 7.3(a) “has generally been used to prevent ambulance chasing by plaintiffs' attorneys,” and could upend settled corporate practices if the rule is applied in this scenario. Barry R. Temkin & Michael H. Stone, Solicitation by Defense Counsel: Ethical Pitfalls When Corporate Defense Counsel Offers Representation to Witnesses, 80 Defense Counsel J. no. 4, at 363 (October 2013).
Addressing Rivera and other authority, the ethics committee said: “When a corporation's lawyer conveys in person or by telephone an offer to represent a corporate employee in connection with a lawsuit, the application of [Rule 7.3(a)] depends on the factual context and the lawyer's motivation.”
“Under Rivera, the communication would be improper if the lawyer's motivation was exclusively ‘to gain a tactical advantage in th[e] litigation by insulating [witnesses] from any informal contact with plaintiff's counsel,'” the panel explained.
But Rule 7.3 is not violated, it continued, if the offer is made under different circumstances—namely, “where the lawyer initially interviews the employee as a non-client witness in order to learn relevant information and subsequently determines that the individual is in need of legal services as a party or potential testifying witness and that the concurrent representation would be permissible.”
The committee stressed the importance of heeding the guidance set forth in New York City Ethics Op. 2004-2, 20 Law. Man. Prof. Conduct 360 (2004), which cautions that “Multiple representations of a corporation and one or more of its constituents are ethically complex.” That opinion outlines disclosures that a corporate attorney should make before interviewing or offering to jointly represent potentially adverse constituents of a corporate client.
Here, the New York County ethics committee said that if a lawyer adheres to those safeguards and “reasonably concludes that the current or former employee would benefit from legal assistance and that the conflict of interest rules allow joint representation, the lawyer may seek to convey the corporation's willingness to compensate the lawyer to represent the employee.”
Rule 7.3(a), which forbids in-person or telephonic solicitation of anyone other than “a close friend, relative, former client or existing client,” will not apply in this scenario “for several reasons,” the committee said.
It first noted that Rule 7.3(b) defines “solicitation” as a communication that has as its “primary purpose” the “retention of the lawyer or law firm, and a significant motive for which is pecuniary gain.” That definition doesn't fit in this situation, the committee said, because “the primary purpose of the in-person meeting at its inception is not to offer the lawyer's services to the employee, but to interview the employee as a potential witness.”
“Moreover, in conveying the corporation's offer and, if the employee is interested, following up by offering representation, the lawyer's ‘primary purpose' is not to secure legal fees from a new client but to render competent representation to a current corporate client by enabling it to fulfill its objective (and, in some cases, its statutory or contractual obligation or internal policy) of making legal assistance available to an employee who may need counsel,” the committee stated.
The court said such a scenario was also “meaningfully distinguishable” from the one addressed in Rivera.
“Rivera evidently was not a case where the entity's lawyer communicated with employees first to secure their information and later to extend the corporate employer's offer of assistance, but one where the primary, if not exclusive, purpose of the communication from its inception was to establish a legal representation in order to insulate the witnesses from opposing counsel's informal contact,” the committee said. Accordingly, it concluded that “Rivera would not be inconsistent with the procedure and principles outlined in this Opinion.”
To contact the reporter on this story: Samson Habte in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Kirk Swanson at email@example.com
Copyright 2014, the American Bar Association and The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)