How to Avoid Malpractice & Disciplinary Actions - General Do's and Don'ts (Series: Legal Ethics - Best Practices)

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Practical and entertaining education for
attorneys, accountants, business owners and
executives, and investors.

Disclaimer
The material in this webinar is for informational purposes only. It should not be considered
legal, financial or other professional advice. You should consult with an attorney or other
appropriate professional to determine what may be best for your individual needs. While
Financial Poise™ takes reasonable steps to ensure that information it publishes is accurate,
Financial Poise™ makes no guaranty in this regard.
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Meet the Faculty
MODERATOR:
Michelle Gershfeld - Law Offices of Michelle Gershfeld
PANELISTS:
George Kuney - University of Tennessee College of Law
Bernard Burk - Formerly University of North Carolina School of Law
Gerald Meyer - MoloLamken LLP
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About This Webinar - How to Avoid Malpractice &
Disciplinary Actions - General DOs and DON’Ts
This webinar presents basic practice pointers to avoid malpractice and disciplinary actions,
and how to respond to claims of malpractice or unethical behavior if they arise. The panel
also discusses the role that malpractice insurance plays in these situations and the
ramifications of a malpractice judgment or disciplinary action. Model Rules addressed may
include: those that govern the client-lawyer relationship (Rules 1.1 through 1.10; 1.13; and
1.16); those that that speak to transactions with persons other than clients (Rules 4.1 through
4.4); those that govern the responsibilities of managing and supervisory lawyers, subordinate
lawyers, non-lawyer assistance, independence, unauthorized practice of law, and
multijurisdictional practice (Rules 5.1 through 5.5); and those that govern communication,
including advertising and solicitation of clients (Rules 7.1 through 7.5).
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About This Series
Legal Ethics – Best Practices
Corporate scandals make the headlines periodically, but businesses and the lawyers that
work with them face ethical challenges every day, even in situations that are legally
compliant. This webinar series examines ethical issues confronted by lawyers in a variety of
contexts. The panelists consider and recommend different approaches to ethical decision-
making and lawyers responsibilities and concerns, especially in light of the impact of the
COVID-19 pandemic.
Each Financial Poise Webinar is delivered in Plain English, understandable to investors, business owners, and
executives without much background in these areas, yet is of primary value to attorneys, accountants, and other
seasoned professionals. Each episode brings you into engaging, sometimes humorous, conversations designed to
entertain as it teaches. Each episode in the series is designed to be viewed independently of the other episodes so that
participants will enhance their knowledge of this area whether they attend one, some, or all episodes.
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Episodes in this Series
#1: Best Practices Regarding Technology
Premiere date: 2/10/21
#2: How to Avoid Malpractice & Disciplinary Actions - General Do's and Don'ts
#3: Hot Off the Presses- Recent Cases & Decisions
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Episode #2: How to Avoid Malpractice & Disciplinary
Actions - General DOs and DON’Ts
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Malpractice Claims
Typically, to establish a valid malpractice claim, the plaintiff needs to plead and prove (by a preponderance of the
evidence) that:
 The attorney owed the plaintiff a professional duty;
 The attorney breached that duty;
 The breach of duty actually and proximately caused; and
 Compensable pecuniary damage.
Regarding Duty and Breach:
• Professional negligence (a breach of the professional standard of care) is the most common, but not the only,
breach of duty asserted in claims against lawyers. A breach of any duty arising out of the attorney-client
relationship that causes compensable pecuniary harm is actionable and often referred to as “legal malpractice.”
• A breach of the lawyer’s duty of confidentiality, loyalty, or candor can also ground a client’s “malpractice” claim.
Relationship between Civil Duties and the Rules of Professional Conduct:
• In virtually all jurisdictions, a violation of a Rule of Professional Conduct is not considered negligence per se
• Instead, the Rules are solely a basis for professional discipline, but are considered relevant to, and to inform,
the professional standard of care
A 2016 ABA study showed that four out of five practicing lawyers can expect to be
sued for their professional activities (rightly or wrongly) in the course of their careers.

When is a “bad job” malpractice?
Malpractice cases are very fact intensive, but there are three characteristics to consider:
1. Was the attorney negligent in the first place. This is not a hindsight analysis but one
undertaken from the point of view of when the alleged mistake occurred. Was the action or
inaction consistent with the community standard of care?
2. Did the mistake cause damage? This is not as simple as it seems. Even if an attorney’s
obvious error in, say, failing to file a complaint before the statute of limitations runs, takes
place, to prevail, the client must show to a “legal certainty” that she would have won the suit
had it been timely filed, how much she would have been awarded, and that the amount
would have been collectable.
3. Are the damages sufficient to justify the investment in the malpractice suit, which is high as
it is a case within a case – prove malpractice and prove the underlying claim.

Ethical Practice in a Time of Pandemic
What is the difference between malpractice and ethics violations?
• Not all ethical violations will give rise to a malpractice claim
• Malpractice requires harm to the client, caused by the attorney’s bad conduct
• Malpractice claims compensate harmed clients, generally in the form of money
damages in a civil lawsuit or arbitration
• Ethics proceedings affect the attorney’s license and ability to practice law

In a period of pervasive remote practice, which is likely to continue in some respects and to
some degree for some time (even after the pandemic ends), do lawyers’ legal or ethical
obligations differ?
ABA Ethics Op. No. 498 (2021):
• There has never been a requirement that a lawyer maintain or work from a distinct brick-
and-mortar office
• So the Rules haven’t changed, but your circumstances probably have
• Lawyers must be mindful of how remote practice may weaken or remove some of the
guardrails on which we’ve historically relied in in-person practice

ABA Ethics Op. No. 498 (2021): Special risks in remote practice:
• Competence: Remote practice requires much greater dependence on technology to
communicate; store, retrieve, and transfer information; etc.
 Model Rule 1.1 Comment [8]: “To maintain the requisite knowledge and skill [to be
competent], a lawyer should keep abreast of changes in the law and its practice,
including the benefits and risks associated with relevant technology . . . .”
 You have to learn enough about the tech you’re using to choose tools that are safe,
reliable, and secure. And use them lawfully (e.g., watch out for unconsented recording)
• Communication:
 Model Rule 1.4(a): Whether interacting face-to-face or through technology, lawyers must
“reasonably consult with the client about the means by which the client’s objectives are
to be accomplished; . . . keep the client reasonably informed about the status of the
matter; [and] promptly comply with reasonable requests for information. . . .”
 Lawyers usually interact with clients remotely, so this is nothing new.

ABA Ethics Op. No. 498 (2021): Special risks in remote practice:
• Confidentiality: Model Rule 1.6(a): You must not “reveal information relating to the
representation of a client” (absent a specific exception, informed consent, or implied
authorization)
• Model Rule 1.6(c): You must “make reasonable efforts to prevent the inadvertent or
unauthorized disclosure of, or unauthorized access to, information relating to the
representation of a client.” What’s “reasonable” depends on the circumstances, including the
sensitivity of the information and the costs and impediments of more effortful measures.
• Things to watch out for in remote practice:
 The security of your communications software (e.g., precautions against “Zoom-bombing” or virtual
lurkers)
 The security of the area around you (e.g. members of your family, roommates, third parties who may
be within sight or earshot). Beware “smart speakers” and digital assistants!
 The security of the area around those with whom you are communicating (e.g., who is within sight or
earshot of the clients, colleagues, or agents with whom you’re communicating)
See ABA Formal Ethics Op. No. 477R (2017) for many helpful suggestions

• Management: Lawyers within a practice organization who have management authority:
 Model Rule 5.1(a): Partners and other managers must “make reasonable efforts to
ensure that the firm has in effect measures giving reasonable assurance that all lawyers
in the firm conform to the Rules of Professional Conduct.”
 Model Rule 5.3(a): Partners and other mangers must “make reasonable efforts to
ensure that the firm has in effect measures giving reasonable assurance” that nonlawyer
staff’s and independent contractors’ “conduct is compatible with the professional
obligations of the lawyer”
 Those “reasonable efforts” include “internal policies and procedures designed to provide
reasonable assurance that all lawyers in the firm will conform to the Rules of
Professional Conduct.” Model Rule 5.1 Comment [2]. That includes not only
formulating and adopting policies and procedures, but disseminating them and training
personnel in their use and application.
 Managers who fail to meet these responsibilities are personally responsible for the
ethical violations of those under their management and have committed the ethical
violation of failure to manage

• Supervision:
 Model Rule 5.1(b): Lawyers having “direct supervisory authority over another lawyer”
must “make reasonable efforts to ensure that the [supervised] lawyer conforms to the
Rules of Professional Conduct.”
 Model Rule 5.3(b): Lawyers having “direct supervisory authority” over nonlawyer staff or
independent contractors must “make reasonable efforts to ensure that the [supervised
nonlawyers’] “conduct is compatible with the professional obligations of the lawyer”
 Perfection is not required, but reasonable supervisory efforts are
 Supervisors who fail to meet these responsibilities (to make reasonable efforts) are
personally responsible for the ethical violations of those under their supervision and
have committed the ethical violation of failure to supervise

• Management and Supervision in a law firm were never easy, but they are significantly
harder now because work is not centered around a particular brick-and-mortar location
where most lawyers can be found most days. Pitfalls to watch for:
 Choice and implementation of technology consistent with ethical obligations is essential
(see ABA Formal Ethics Op. No. 477R (2017)); letting everyone figure it out for
themselves is a recipe for disaster. BYOD policies must be implemented with care
 Special policies and procedures governing remote practice may be needed (for
example, procedures to process paper mail and deliveries if the office is often empty)
 Special training in ethical compliance when using technology in remote practice is
needed
 Monitoring and followup to check for compliance by managers and supervisors must be
part of regular firm procedures

 Training in regular office policies and procedures must continue
 With hallway encounters infrequent or absent, supervisors must make special provision
to communicate with those they supervise. Given the stress and isolation that may
attend remote work for many, supervisors should monitor wellness as well as diligence
and ethical compliance
There are resources available to help managers and supervisors (whether in large firms or
small ones) address the new challenges of remote practice. See, e.g., ABA Formal Ethics
Op. No. 498 (2021); and ABA Formal Ethics Op. No. 477R (2017), both of which contain
many useful specific strategies and cite resources with others

Unlicensed Practice of Law and Working Remotely
ABA Formal Opinion 495 provides:
Lawyers may remotely practice the law of the jurisdictions in which they are
licensed while physically present in a jurisdiction in which they are not admitted if
the local jurisdiction has not determined that the conduct is the unlicensed or
unauthorized practice of law and if they do not hold themselves out as being
licensed to practice in the local jurisdiction, do not advertise or otherwise hold out
as having an office in the local jurisdiction, and do not provide or offer to provide
legal services in the local jurisdiction. This practice may include the law of their
licensing jurisdiction or other law as permitted by ABA Model Rule 5.5(c) or (d)
including, for instance, temporary practice involving other states’ or federal laws.
Having local contact information on websites, letterhead, business cards,
advertising, or the like would improperly establish a local office or local presence
under the ABA Model Rules. (emphasis added)

Poor Intake Process
• Failing to check for conflicts of interest prior to discussing the matter in more detail.
 RPC 1.7: Conflict of Interest– Current Clients
• Starting work before the terms of the engagement are fully documented and agreed to.
 RPC 1.2: Scope of Representation; 1.16: Declining or Terminating Representation
• Failing to specify the scope and length of the engagement with thoughtful precision.
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Bad Intake Decisions
• The clients you take on, but maybe shouldn’t have…
 The client who fired his/her prior lawyer, or whose previous lawyer fired him/her.
 The client who says, “I don’t care about cost.”
 The client who doesn’t want to talk about fees, or wants to talk about fees too soon.
 The client who talks about future engagements/referrals, but wants deep discounts
on this one.
 The client motivated by spite.
 The client interested in remedies the legal system does not provide.
 The client whose story of the matter at hand (or other personal history) contains
things that most folks just wouldn’t do (exception for criminal defense).
 The client who blames everyone else.
 The client who is rude to you or your staff during intake.
 The client who gives you a nagging or funny feeling.
 Others?
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Accidental Clients
• Be careful not to unintentionally acquire new clients at social gatherings or in dealings
with organizational clients.
• RPC 1.7: Conflict of Interest– Current Client
• RPC 1.13: Organization as a Client
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Duties to Non-Clients
• RPC1.18: Duties to Prospective Clients
 Confidentiality
• RPC 1.1: Competence
 Giving assistance on merits of a matter
 RPC 1.18 cmt. 9
• Duty of Care
 Intent?
 Knowing acceptance?
 Foreseeability of reliance?
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Contacting Represented Parties: “Reply All”
Model Rule 4.2, sometimes referred to as the “No-Contact Rule,” says that lawyers generally
must not communicate with someone they know to be represented by another lawyer unless
the other lawyer gives permission. The No Contact Rule also protects certain key employees
of a represented company.
• Among many complications in applying this rule, there has been dispute about whether a
lawyer receiving an email or letter from opposing counsel cc’d to opposing counsel’s client
is an implied consent to your communicating with opposing counsel’s client by “reply all.”
• Practical import: If it is an implied consent, then it’s up to you to send your clients copies of
your communications to opposing counsel by separately forwarding them only to the
client; if it is not an implied consent, it is up to your opposing counsel to scrub the “cc” to
your client off the email before replying.
• Practical import: If you fear the opposing party is being under- or misinformed by her
lawyer, or if you fear your opposing counsel will interfere in your relationship with your
client on the pretext of using “reply all,” you should worry about this!

Contacting Represented Parties: “Reply All”
• The overwhelming majority of states that have considered the question (in ethics opinions)
have concluded that a “cc” to your client is not an invitation or consent for opposing
counsel to communicate with your client by “reply all”
 Alaska Bar Association Ethics Opinion No. 2018-1 (2018)
 Illinois State Bar Association Opinion No. 19-05 (2019)
 Kentucky Bar Association Ethics Opinion No. KBA E-442 (2017)
 North Carolina 2012 Formal Ethics Opinion No. 7 (2013)
 South Carolina Bar Ethics Advisory Opinion No. 8-04 (2018)
• However, New Jersey just issued an Ethics Opinion (ACPE Op. No. 739 (2021))
concluding that is not a violation of the no-contact rule to “reply all” to an email from
opposing counsel that included a “cc” to the opposing counsel’s client
• The same opinion concluded that it is a violation of the rule to send a hardcopy response
to a hardcopy letter that includes a “cc” to opposing counsel’s client
• Best practice: Regardless of your state’s interpretation of Rule 4.2, don’t “cc” your client on
an email to opposing counsel. Forward it separately instead. That will prevent opposing
counsel from inadvertently or deliberately communicating with your client directly, and will
prevent your client from inadvertently copying a response to your opposing counsel

Rule 1.8(a): What payments can lawyers accept?
(a) A lawyer shall not enter into a business transaction with a client or knowingly acquire
an ownership, possessory, security or other pecuniary interest adverse to a client unless:
(1) the transaction and terms on which the lawyer acquires the interest are fair and
reasonable to the client and are fully disclosed and transmitted in writing in a manner
that can be reasonably understood by the client;
(2) the client is advised in writing of the desirability of seeking and is given a
reasonable opportunity to seek the advice of independent legal counsel on the
transaction; and
(3) the client gives informed consent, in a writing signed by the client, to the essential
terms of the transaction and the lawyer's role in the transaction, including whether
the lawyer is representing the client in the transaction.

Changing Fee Arrangements During Representation
(ABA Formal Ethics Opinion 11-458)
 Periodic, incremental increases in a lawyer's regular hourly billing rates are generally
permissible if such practice is communicated clearly to and accepted by the client at
the commencement of the client-lawyer relationship and any periodic increases are
reasonable under the circumstances.
 Modifications sought by a lawyer that change the basic nature of a fee arrangement
or significantly increase the lawyer's compensation absent an unanticipated change
in circumstances ordinarily will be unreasonable.
 Changes in fee arrangements that involve a lawyer acquiring an interest in the
client's business, real estate, or other nonmonetary property will ordinarily require
compliance with Rule 1.8(a).
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What If You Suspect Client Wrongdoing?
If your client has or might have broken the law in the past, your job is to keep the client’s
confidences and defend the client as zealously as the law allows. But what about the client that
is breaking the law right now, or is planning to do so in the future?
• You can’t advise or assist a client to break the law. Model Rule 1.2(d).
• If you know the client is breaking the law or plans to do so, you must tell them not to do so,
and may withdraw if the client persists. Model Rules 1.4, 1.6(b)(2)-(4); 2.1 Comment [5].
But the really hard problem arises if you suspect, but do not know, that a client is breaking or
intends to break the law in the matter on which you are representing her. When do you have an
obligation to find out what’s going on, and do something about it?
Authority is sparse, and all over the place.

ABA Formal Ethics Op. No. 491 (2020): “[A] lawyer who has knowledge of facts that create a
high probability that a client is seeking the lawyer’s services in a transaction to further criminal
or fraudulent activity has a duty to inquire further to avoid assisting that activity under Rule
1.2(d). Failure to make a reasonable inquiry is willful blindness punishable under the actual
knowledge standard of the Rule.”
“The kinds of facts and circumstances that would trigger a duty to inquire under these rules
include, for example, (i) the identity of the client, (ii) the lawyer’s familiarity with the client, (iii)
the nature of the matter (particularly whether such matters are frequently associated with
criminal or fraudulent activity), (iv) the relevant jurisdictions (especially whether any jurisdiction
is classified as high risk by credible sources), (v) the likelihood and gravity of harm associated
with the proposed activity, (vi) the nature and depth of the lawyer’s expertise in the relevant
field of practice, (vii) other facts going to the reasonableness of reposing trust in the client, and
(viii) any other factors traditionally associated with providing competent representation in the
field.”

N.Y. City Bar Assn. Formal Op. No. 2018-4 (2018) (a lawyer must inquire “where a reasonable
lawyer prompted by serious doubts would have refrained from providing assistance or would
have investigated to allay suspicions before rendering or continuing to render legal assistance”
(emphasis added)).
Best practice: When in doubt, inquire. You’re risking professional discipline as well as civil
liability to third parties.

Money Laundering Concerns: ABA Formal Opinion 491
Duty to conduct a reasonable inquiry:
Model Rule 1.2(d) prohibits a lawyer from advising or assisting a client in a transaction or
other non-litigation matter the lawyer “knows” is criminal or fraudulent. That knowledge may
be inferred from the circumstances, including a lawyer’s willful blindness or conscious
disregard of available facts. Accordingly, where there is a high probability that a client
seeks to use the lawyer’s services for criminal or fraudulent activity, the lawyer must inquire
further to avoid advising or assisting such activity.
Duty to decline representation/withdraw:
If the client or prospective client refuses to provide information necessary to assess the
legality of the proposed transaction, the lawyer must ordinarily decline the representation or
withdraw under Rule 1.16. A lawyer’s reasonable evaluation after that inquiry based on
information reasonably available at the time does not violate the rules.

About The Faculty
Michelle Gershfeld - MGershfeldlaw@gmail.com
Michelle Gershfeld has spent over 30 years as a lawyer, specializing in bankruptcy, commercial and personal debt
settlement. She began her career in 1989 at Milbank, Tweed, Hadley and McCloy, LLP. Ms. Gershfeld later worked at
and became the managing partner for Kittay & Gershfeld, PC, before the 2018 opening of her boutique firm, Law Offices
of Michelle Gershfeld. Ms. Gershfeld has represented bankruptcy trustees and clients in more than 20,000 cases. As an
Accredited Financial Counselor and Financial Fitness Coach, she is an active member of the Association for Financial
Counseling and Planning Education (AFCPE), the nationally recognized leader in financial counseling and education.
Bridging the two fields of law and financial counseling, Ms. Gershfeld uses her skills as a speaker and published writer to
help clients on the road toward financial security. Ms. Gershfeld has spent three decades as a bankruptcy attorney and
litigator. She works with both commercial clients to reorganize outside of formal bankruptcy, and with individual clients to
defend foreclosure, eviction and collection suits.
Ms. Gershfeld understands the struggle Americans are facing now more than ever, and how money has become a fear,
sometimes crippling and unexpectedly so. “I find great satisfaction in providing help to my clients in regrouping or
leaving their businesses and/or homes with dignity ... and at the best price (financially and emotionally)!”
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About The Faculty
George Kuney - gkuney@utk.edu
George W. Kuney is a Lindsay Young Distinguished Professor of Law and Director of the Clayton Center for
Entrepreneurial Law at The University of Tennessee College of Law in Knoxville, Tennessee. He holds a J.D.
from the University of California, Hastings College of the Law, an M.B.A. from The University of San Diego, and
a B.A. in Economics from the University of California, Santa Cruz. Before joining the UT faculty in 2000, he was
a partner in the Allen Matkins firm’s San Diego office. Previously he practiced with the Howard Rice and
Morrison & Foerster firms in his hometown of San Francisco, doing litigation and transactional work largely in the
context of business restructuring and insolvency. He teaches business law courses including Business
Associations, Contracts, Contract Drafting, Commercial Law, Consumer Bankruptcy, Debtor-Creditor, Mergers
and Acquisitions, Representing Enterprises, and Workouts and Reorganizations. Kuney has written a number of
books and articles and given presentations about business, contracts, and commercial law and insolvency-
related topics. He advises clients nationwide regarding bankruptcy, restructuring, reorganization, and related
subjects. He is admitted to the bar in California and Tennessee.
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About The Faculty
Bernie Burk - bernie.burk@bernieburk.com
Professor Bernard Burk previously taught at the University of North Carolina School of Law.
He is currently sitting out the pandemic finishing a textbook on legal ethics, to be published
later this year by Wolters Kluwer Law & Business, entitled Ethical Lawyering: A Guide for the
Well-Intentioned (with Nancy Rapoport of the University of Nevada at Las Vegas School of
Law, and Veronica Finkelstein, Asst. U.S. Attorney for the E.D. Pa. and adjunct at Drexel
University School of Law). Prof. Burk engages in consulting and expert witness work in the
areas of legal ethics and professional conduct.
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About The Faculty
Gerald Meyer - gmeyer@mololamken.com
Gerald Meyer’s practice focuses on complex business litigation, white collar criminal matters and
investigations, and appellate litigation. He has represented businesses, senior corporate officials, and
individuals in a broad array of subject matters, including securities litigation, class actions, antitrust law,
and constitutional law. He has tried cases to verdict and drafted and argued dispositive, discovery, and
evidentiary motions in trial courts across the country. He has argued appeals before the Seventh Circuit,
and has briefed appeals in the Supreme Court of the United States and numerous courts of appeals.
Before joining MoloLamken, Mr. Meyer was an associate with Skadden, Arps, Slate, Meagher & Flom
LLP in Chicago. He has represented companies and individuals in a wide range of tax planning matters,
including mergers and acquisitions, restructurings, securities offerings, and issues involving tax-exempt
organizations. Mr. Meyer also served as a law clerk to Judge Robert R. Beezer of the United States Court
of Appeals for the Ninth Circuit and to Judge G. Steven Agee of the United States Court of Appeals for
the Fourth Circuit.
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Questions or Comments?
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IMPORTANT NOTE: The material in this presentation is for general educational purposes
only. It has been prepared primarily for attorneys and accountants for use in the pursuit of
their continuing legal education and continuing professional education.
38

About Financial Poise
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