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Ethics Opinion

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RI-149

November 4, 1992

SYLLABUS

    A supervising lawyer who has knowledge that a subordinate lawyer (1) has repeatedly failed to file responses and pleadings which have resulted in defaults in more than 20 matters handled by the subordinate lawyer, (2) has failed to return phone calls to local or opposing counsel, to timely remit settlement checks, to follow through to obtain general releases and orders of dismissal, and (3) has otherwise delayed finalizing settlements, is required to notify the Attorney Grievance Commission of the misconduct.

    References: MRPC 1.0, 1.1, 1.3, 3.2, 5.1, 8.3(a), 8.4; RI-88, RI-101; C-229.

TEXT

A corporate general counsel supervises several lawyer "department heads" who in turn directly supervise other staff lawyers. The general counsel has been advised by a department head that a staff lawyer failed to answer a complaint, resulting in a default judgment being entered against the corporation. Upon discovery of the default, the corporation was able to negotiate a settlement in lieu of satisfaction of the default judgment. The department head required the staff attorney to henceforth obtain written confirmation of any extended deadlines granted by opposing counsel, in order to prevent reoccurrences.

The general counsel was subsequently advised of another default entered against the corporation, involving the same staff lawyer and similar circumstances. The general counsel ordered an audit of files handled by the staff lawyer, and discovered that defaults had been entered in nine court cases handled by the lawyer, defaults were entered against the corporation in eleven arbitrations handled by the staff lawyer, and three notices of intent to enter a default were served on the corporation in cases handled by the staff attorney. The audit revealed the staff lawyer failed to return phone calls to local or opposing counsel, failed to timely remit settlement checks, failed to follow through to obtain general releases and orders of dismissal, and otherwise delayed finalizing settlements. The staff lawyer never disclosed any of these problems to supervisors.

The general counsel asks whether ethics rules require notification to the Attorney Grievance Commission of the activities of the staff lawyer.

MRPC 1.1, 1.3, and 3.2 each impose a duty on lawyers to act prudently and diligently in the representation of a client. Where a lawyer continuously neglects a client's affairs or repeatedly fails to act in a diligent manner, there has been a violation of the Michigan Rules of Professional Conduct for which discipline may be warranted. MRPC 1.1 states:

    "A lawyer shall provide competent representation to a client. A lawyer shall not:

      "(a) handle a legal matter which the lawyer knows or should know that the lawyer is not competent to handle, without associating with a lawyer who is competent to handle it;

      "(b) handle a legal matter without preparation adequate in the circumstances; or

      "(c) neglect a legal matter entrusted to the lawyer."

MRPC 1.3 states:

    "A lawyer shall act with reasonable diligence and promptness in representing a client."

MRPC 3.2 states:

    "A lawyer shall make reasonable efforts to expedite litigation consistent with the interests of the client."

The responsibilities of law firm partners and supervisory lawyers, including lawyers employed in the legal department of a corporation [MRPC 1.0, Comment, Terminology], are discussed in MRPC 5.1, which states:

    "(a) A partner in a law firm shall 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.

    "(b) A lawyer having direct supervisory authority over another lawyer shall make reasonable efforts to ensure that the other lawyer conforms to the Rules of Professional Conduct.

    "(c) A lawyer shall be responsible for another lawyer's violation of the rules of professional conduct if:

      "(1) the lawyer orders or, with knowledge of the relevant facts and the specific conduct, ratifies the conduct involved; or

      "(2) the lawyer is a partner in the law firm in which the other lawyer practices or has direct supervisory authority over the other lawyer and knows of the conduct at a time when its consequences can be avoided or mitigated but fails to take reasonable remedial action."

MRPC 5.1(b) requires all lawyers in supervisory positions to make reasonable efforts to ensure that the conduct of subordinate lawyers conforms to the Rules of Professional Conduct; ethical responsibility for subordinate lawyers is placed directly upon the supervisor. The supervising lawyer is obligated to take both proactive measures [MRPC 5.1(b)] and reactive measures [MRPC 5.1(c)] to ensure that the conduct of subordinate lawyers is compatible with ethics rules.

Where a subordinate lawyer on a corporate legal staff neglects the representation of the corporate client despite the "reasonable efforts to ensure that the [subordinate lawyer] conforms," the supervising lawyer has an obligation to take remedial action, MRPC 5.1(c)(2). A failure to make reasonable efforts to ensure conformance with ethics rules, or a failure to take remedial action when the subordinate lawyer's misconduct could be avoided or mitigated, violates the supervisor's duty under the Rule.

MRPC 8.3 imposes an additional duty on all lawyers to report another lawyer's misconduct where that misconduct is a "significant" violation of the Rules of Professional Conduct. MRPC 8.3(a) states:

    "(a) A lawyer having knowledge that another lawyer has committed a significant violation of the Rules of Professional Conduct that raises a substantial question as to that lawyer's honesty, trustworthiness, or fitness as a lawyer shall inform the Attorney Grievance Commission." Emphasis added.

The official comment summarizes the policy considerations behind the Rules:

    "Self-regulation of the legal profession requires that members of the profession initiate disciplinary investigation when they know of a violation of the Rules of Professional Conduct. Lawyers have a similar obligation with respect to judicial misconduct. An apparently isolated violation may indicate a pattern of misconduct that only a disciplinary investigation can uncover. Reporting a violation is especially important where the victim is unlikely to discover the offense.

    "If a lawyer were obliged to report every violation of the rules, the failure to report any violation would itself be a professional offense. Such a requirement existed in many jurisdictions but proved to be unenforceable. This rule limits the reporting obligation to those offenses that a self-regulating profession must vigorously endeavor to prevent. A measure of judgment is, therefore, required in complying with the provisions of this rule."

It is impossible to precisely define or describe conduct sufficiently serious to trigger MRPC 8.3(a). A "substantial violation" of the Rules is clearly not enough; the violation must also raise a "substantial question" about the professional fitness of the offending lawyer. MRPC 8.3 introduces a subjective standard into the determination of whether one lawyer is obligated to report the conduct of another lawyer. The comments to MRPC 1.0, 8.3 and 8.4 offer additional guidance. See also RI-101, C-229. The comments to Rule 8.3 provide:

    ". . . A measure of judgment is, therefore, required in complying with the provision of this rule. The term 'substantial' refers to the seriousness of the possible offense and not the quantum of evidence of which the lawyer is aware." Emphasis added.

The comments to MRPC 1.0 define "substantial" to mean "a material matter of clear and weighty importance," and the comments to MRPC 8.3 provide that:

    "Many kinds of illegal conduct reflect adversely on fitness to practice law, such as offenses involving fraud and the offense of wilful failure to file an income tax return. However, some kinds of offenses carry no such implication. Traditionally, the distinction was drawn in terms of offenses involving 'moral turpitude.' . . . . Offenses involving violence, dishonesty, breach of trust, or serious interference with the administration of justice are in that category. A pattern of repeated offenses, even ones of minor significance when considered separately, can indicate indifference to legal obligation." Emphasis added.

It is obvious that the level of misconduct serious enough to trigger a violation of the Michigan Rules of Professional Conduct is itself unclear. However, MRPC 8.3 conclusively requires that lawyers police each other where the actions of a lawyer raise substantial questions as to the lawyer's trustworthiness and fitness as a lawyer. Lawyers are duty bound to make reasoned determinations concerning both the significant nature of the purported violations and whether they raise substantial questions of honesty, trustworthiness, and fitness.

Here, the subordinate lawyer has repeatedly failed to file timely pleadings, failed to return communications from other lawyers, and failed to follow through to obtain releases and orders of dismissal. Each of these offenses has directly affected the client's liability on those legal matters. The defaults themselves suggest that the subordinate lawyer is not capable of exercising any independent responsibility regarding legal matters for the client. Apparently the subordinate lawyer is similarly unprepared to follow the most straight-forward instructions regarding the handling of the matters. This conduct clearly raises "substantial questions" of the subordinate lawyer's trustworthiness and fitness to practice.

In addition, these offenses taken as a whole show a pattern of "indifference to legal obligations." The subordinate lawyer failed to advise or notify supervisors when the incidents occurred. When one incident was discovered and the supervisor henceforth required written confirmation of verbal continuances, the subordinate lawyer failed to comply. When the subordinate lawyer was specifically instructed to file a response to forestall a default, the subordinate lawyer failed to do so. Thus these are significant violations of the Michigan Rules of Professional Conduct which create substantial questions regarding the lawyer's trustworthiness and fitness as a lawyer.

Having determined that the subordinate lawyer's conduct violates the Rules, MRPC 8.3 requires a lawyer, supervisor or otherwise, who has knowledge of the violations to report such conduct to the Attorney Grievance Commission. Although evidence of the entry of the second default could have been sufficient knowledge of the misconduct, the audit results constitute clear-cut "knowledge" and trigger the reporting duties of both the general counsel and the supervising department head.

In addition to the reporting requirement, MRPC 5.1 requires a supervising lawyer to take precautionary and remedial measures to ensure that subordinate lawyers do not violate the Michigan Rules of Professional Conduct. A supervising lawyer's failure to take remedial action or to notify the Attorney Grievance Commission may subject that supervising lawyer to discipline. See also RI-88. It is not a "reasonable measure" to wait for a subordinate lawyer to bring matters to the supervisor's attention. At the very least, there should be a centralized calendar which tracks the status of all cases handled by the law office so there is no opportunity for a default to be entered without an inquiry being made prior to the deadline regarding the filing of a response.

 
     

 

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