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TABLE OF CONTENTS

ETHICS IN THE LEGAL PROFESSION ................................................................................................................ 1 CHAPTER ONE - PREFACE .................................................................................................................................... 1

DEFINITION OF ETHICS.................................................................................................... 1 RULES OF PROFESSIONAL CONDUCT .............................................................................. 2


TYPES OF ETHICS OPINIONS .......................................................................................................................... 2
DETERMINE THE OPTIONS ......................................................................................................................................... 3

THE LAWYERS RESPONSIBILITIES ................................................................................. 3 THE BAR ASSOCIATION ...................................................................................................... 4


ABA REPORT OF COMMITTEE ON CODE OF PROFESSIONAL ETHICS .................................................... 5
Reasons for the Code ........................................................................................................................................................ 7

ETHICAL THEORIES ............................................................................................................. 8


DETERMINING ACTION IN LIGHT OF THE CONSEQUENCES OF THE ACT ...................................................... 9 Acting only from Desire ................................................................................................................................................... 9

ETHICS OF VIRTUE ......................................................................................................................................... 10


Determining the Proper Action ....................................................................................................................................... 10

DEALING WITH RIGHT OR WRONG .............................................................................................................. 11


Personal Responsibility ................................................................................................................................................... 11

SENSITIVE JUDGEMENT ................................................................................................................................ 12


The Morals of the Lawyer ............................................................................................................................................... 13

INTEGRITY ........................................................................................................................................................ 13
Justification ..................................................................................................................................................................... 14

BELIEFS LEARNED AS A CHILD .................................................................................................................... 15 IS THIS GOOD FOR ME? ................................................................................................................................. 15 HOW DOES THE ACTION AFFECT SOCIETY? ............................................................................................. 16 IS IT FAIR, JUST AND PROPER? .................................................................................................................... 16 IS THERE A RIGHTS VIOLATION INVOLVED? ............................................................................................. 16 HAS THERE BEEN A PROMISE MADE? ......................................................................................................... 17 IGNORANCE IS BLISS? .................................................................................................................................... 18 OR GREED? ...................................................................................................................................................... 18 CHARACTER ..................................................................................................................................................... 19 QUANDARIES ................................................................................................................................................... 20 TRYING TO RESOLVE DILEMMAS ................................................................................................................. 20
Collect pertinent information .......................................................................................................................................... 20 Discover all of the players............................................................................................................................................... 21 Determine the Options .................................................................................................................................................... 21 Estimate the Effect of the Options .................................................................................................................................. 21

ETHICAL BEHAVIOR ....................................................................................................................................... 21


Moral Behavior ............................................................................................................................................................... 22

EQUITY.............................................................................................................................................................. 23
CHAPTER 1 STUDY QUESTIONS ......................................................................................................................... 24

CHAPTER TWO ADVERSARY THEORUM .................................................................................................... 26

OBJECTIONS TO THE ADVERSARIAL SYSTEM ............................................................ 27


CONFLICTS BETWEEN CLIENT OBLIGATIONS AND OBLIGATIONS TO OTHERS .................................. 28 LEGAL FICTION ............................................................................................................................................... 29

ZEALOUS ADVOCACY - REPRESENTING A GUILTY PARTY ..................................... 30


SANCTIONS AGAINST ABUSE OF THE ADVERSARY SYSTEM .................................................................... 34

CONFIDENTIALITY............................................................................................................. 35
Authorized disclosure ......................................................................................................................................... 37 Disclosure adverse to client ............................................................................................................................... 37 Withdrawal ......................................................................................................................................................... 38

Waivers of Privilege ....................................................................................................................................................... 38

THE CRIME-FRAUD EXCEPTION .................................................................................................................. 39 PRECEDENCE OF PROTECTING THE GUILTY OVER CONVICTING THE GUILTY ................................. 40
CHAPTER 2 STUDY QUESTIONS ......................................................................................................................... 43

CHAPTER THREE DISCOVERY & ATTORNEY-CLIENT RELATIONS .................................................. 45

DISCOVERY .......................................................................................................................... 45
LEGAL TACTICS USED DURING DISCOVERY.............................................................................................. 47 BILLABLE HOURS ............................................................................................................................................ 49
Division of fee ................................................................................................................................................................ 51 Disputes over fees ........................................................................................................................................................... 51 Referral fees and practices .............................................................................................................................................. 51

ATTORNEY-CLIENT RELATIONSHIP .............................................................................. 51


FOR ORGANIZATIONAL CLIENTS ................................................................................................................. 51 ABA MODEL RULE 1.13(D) ............................................................................................................................. 52 UPJOHN v. UNITED STATES ........................................................................................................................... 53 IF A CORPORATE CLIENT REFUSES TO FOLLOW LEGAL ADVICE ......................................................... 58
CHAPTER 3 STUDY QUESTIONS ......................................................................................................................... 58

CHAPTER FOUR - WHISTLE-BLOWERS AND PROFESSIONAL MISCONDUCT .................................... 61

WHISTLE-BLOWERS........................................................................................................... 61
AMBULANCE CHASERS AND OTHER PERSONAL INJURY LAWYERS ....................................................... 63 AS BAD AS AMBULANCE-CHASERS - ............................................................................................................ 64 INSURANCE LAWYERS .................................................................................................................................... 66

NOW APPEARING BEFORE THE JURY - .......................................................................... 67


BEHAVIOR OF TRIAL LAWYERS ............................................................................................................................. 68

RACISM ............................................................................................................................................................. 69

LAWYERS AND LIES .......................................................................................................... 69


THE KODAK-BERKEY CASE ..................................................................................................................................... 71 Postmortem ..................................................................................................................................................................... 72

WRONGFUL OBEDIENCE .................................................................................................. 74


ADVISING A CLIENT OR ASSISTING IN A FRAUD ....................................................................................... 75 THE SAVINGS AND LOAN SCANDAL ............................................................................................................. 76 CAN LYING BE JUSTIFIED BECAUSE JUSTICE IS BEING SERVED?......................................................... 77
CHAPTER 4 STUDY QUESTIONS ......................................................................................................................... 79

CHAPTER FIVE CORPORATION LAW & CLASS ACTION SUITS ........................................................... 81

CORPORATE WARFARE .................................................................................................... 81


JUDGES DISCRETION IN PROTECTED INFORMATION ............................................................................. 84 THE PROZAK CASE ......................................................................................................................................... 85

CLASS ACTION SUITS ........................................................................................................ 88


DETERMINATION OF WHOM IS THE CLIENT?...................................................................................................... 89 EQUITABLE RELIEF.................................................................................................................................................... 89 MULTIPLE LAWSUITS ON THE SAME ACTION .................................................................................................... 89 RIGHTS OF THE INDIVIDUAL CLASS ACTION MEMBER ................................................................................... 90 CLASS ACTION LAWSUIT SETTLEMENTS............................................................................................................. 90 MASS INJURY CASES ................................................................................................................................................. 91

DEFENDING (?) TRIAL LAWYERS .................................................................................... 93


CHAPTER 5 STUDY QUESTIONS ........................................................................................................................ 97

CHAPTER SIX PRO BONO WORK, TAX PRACTICE & POT POURRI ................................................... 100 PRO-BONO WORK ......................................................................................................................................... 100

TAX PRACTICE .................................................................................................................. 100


ACCURACY-RELATED VIOLATIONS .................................................................................................................... 100 PENALTIES FOR PREPARERS OF TAX RETURNS ............................................................................................... 101 SANCTIONS ................................................................................................................................................................ 101

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GOOD FAITH .............................................................................................................................................................. 103 CHANCE OF AUDIT................................................................................................................................................... 103 REASONABLE BASIS OR REASONABLE POSSIBILITY OF SUCCESS.............................................................. 103 TAX RETURNS NOT ADVERSARIAL PROCEEDINGS ......................................................................................... 104 TAX AVOIDANCE...................................................................................................................................................... 104 ETHICS IN TAX AVOIDANCE DEVICES ................................................................................................................ 105 REPORTING OF MISDEED BY ANOTHER ATTORNEY ....................................................................................... 105 GIVING ADVICE OR ACTIVE PARTICIPANT........................................................................................................ 106

ETHICS RULES ............................................................................................................................................... 106


Comment ................................................................................................................................................................. 107

LIMITS OF CONFIDENTIALITY .................................................................................................................... 107 Withdrawal ....................................................................................................................................................... 108

PUBLIC PERCEPTION AND SUMMARY ........................................................................ 108


CHAPTER 5 STUDY QUESTIONS ....................................................................................................................... 111

BIBLIOGRAPHY AND REFERENCES ............................................................................. 114

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ETHICS IN THE LEGAL PROFESSION

CHAPTER ONE - PREFACE


DEFINITION OF ETHICS (Webster says) Ethic(s) is the discipline dealing with what is good and bad and with moral duty and obligation. A set of moral principles or values, the principles of conduct governing an individual or a group. Ethical is defined as of or relating to ethics, and conforming to accepted professional standards of conduct. The law sets minimum standards, whereas ethical behavior is the highest standard. From the strictly legal point of view, ethics as it relates to the legal profession can be compared to a handful of Jell-O. In the legal profession, ethics is part of the professional responsibility of the attorneys, which also in includes statutes, case law, court rules and articles. When one attempts to determine the ethical obligations for himself or others in the law firm, the rules of conduct and ethics opinions which interpret these rules as they refer to the applicable jurisdiction either state or federal- must be used. There appears to be no other profession that is so aware of ethical conduct as is the legal profession and there seems to be no other profession that is so often accused of lacking ethics with the possible exception of used-car salesmen. Ethical questions can now be resolved nearly instantaneously through the miracle of the Internet. Of course, there are volumes and volumes of texts on legal ethics available to the interested scholar, many of which are well worn with voluminous notations in the margins. You will note that the first Chapter discusses Ethics as a concept that can be applied to the individual or to a business, and not specifically the legal profession. It is well understood that the ethical problems of the legal profession are unique and the remaining chapters discuss only those unique problems. In many of the important ethical dilemmas, there may not be only one answer the legal profession in particular has this problem. Therefore, there are not always one specific answer to a legal ethical situation discussed in this text, as there may be differences between the courts, the American Bar Association Model Code of Ethics, and those ethical Rules within a particular jurisdiction. When possible, all sides will be explored as much as is possible within the constraints of this text. The legal profession is comprised of those who offer differing opinions on nearly every subject as this is the raison dtre of lawyers. What would appear to be a simple, straightforward 1

situation for laypersons and other professionals would generally consist of a wide variety of opinions from lawyers (and courts). Therefore, it is impossible to provide a textbook that covers all possible ethical responses to the many legal problems of today. The only recourse is to simply discuss the basics of ethics and how they apply broadly to the legal profession. You will also note that this text is gender-neutral inasmuch as personal nouns and pronouns are in the male gender as it is much easier and less confusing than to use his/her, she/he, himself/herself, etc. Incidentally, the history of the profession shows that at one time influential attorneys and legal scholars publicly declared that women could not and should not function as lawyers. There are few, if any, professions that have come so far in recognizing the ability of women to function very well in their chosen profession. Also, it should be noted that the terms lawyer and attorney are used interchangeably in this text, except attorney is generally used when a lawyer is specifically designated to represent an individual in a particular matter. RULES OF PROFESSIONAL CONDUCT Every jurisdiction that admits lawyers to practice maintains ethic rules for these lawyers. Many states have rules that are based upon the American Bar Association Model Rules of Professional Conduct (often quoted in this text) but since these are model rules, the rules of the particular jurisdiction will always govern. State rules of professional conduct can be located at various places, such as in a states rules of court or its annotated states. Through the Internet, these rules of professional conduct can be obtained through Lexis, Westlaw, court and bar association websites, and sites with links to states rules include the Association of Professional Responsibility Lawyers (http://www.aprl.net/); Cornell Law School Legal Information Institute (http://www.law.cornell.edu/ethics/listing.html), and the American Bar Association Center for Professional Responsibility (http://www.abanet.org/cpr/links.html#States). State supreme courts publish cases disciplining lawyers for misconduct; civil cases and criminal cases address ethics issues. These can be located through the West Digest System, and case laws regarding ethics can be found through Westlaw, Lexis, Lois law (http://www.loislawschool.com) and versus law (http://www.fcsl.edu/Library/versuslaw.htm) TYPES OF ETHICS OPINIONS Ethics opinions interpret and apply the rules of conduct to specific situations, which are issued by a state Supreme Court for instance, but more generally by a committee of a state or local bar organizations. Some of these opinions are advisory only and do not have the force of law, but are still considered persuasive authority. Some opinions are binding, particularly if issued by state supreme courts. Generally, the rules are both imperatives, as indicated by the verbs shall and shall not and are used to define proper conduct within the parameters of professional discipline. Others 2

use permissive verbs, such as may, or should, which indicate that the lawyer has professional discretion. If the rule is permissive, then there should be no disciplinary action if an attorney decides to act, or not to act, within the bounds of this discretion. In a study of ethics, those rules that are permissive are normally those that are of interest. As later discussed, ethical situations arise in most cases, where there is a dilemma. If a rule were imperative, then there would usually be no dilemma. This is not to say that there cannot be a quandary in respect to imperatives indeed, some of the more interesting ethical situations arise when there is a flagrant misuse of ethical standards regarding a shall not type of rule. But for purposes of this text, permissive rules or situations are more applicable to the study of ethics. A quandary or dilemma occurs when in a certain situation, the person is not sure as to what to do, as there is good reasons for the action and good reasons against it. Conflicting responsibilities often arise in the practice of law and ethical problems are frequent because of the conflict between a lawyers responsibilities to a client and the attorneys own personal honor and any perceived obligations to society and the legal profession. These are the most common and the most trying of ethical problems, and are most frequently addressed in the Rules of Professional Conduct (or similar rules).
DETERMINE THE OPTIONS

Some ethics consultants maintain that since a dilemma (or quandary) must have at least two options, in order to determine the proper option, a third option is necessary. The reasoning seems to be that if one has not spent enough time and thought to the problem without coming up with at least a third option, then they simply havent thought enough about the problem. Practically speaking, in order to solve a dilemma, there MUST be another choice, other than just two.

THE LAWYERS RESPONSIBILITIES A good place to start this discussion is by quoting the first line of the above-mentioned Rules of Professional Conduct, Preamble: A Lawyers Responsibilities: A lawyer is a representative of clients, an officer of the legal system, and a public citizen having special responsibility for the quality of justice.

Since lawyers are officers of the court, they are responsible to the judiciary for their professional activities and therefore, lawyers are granted powers of self-government. This has been criticized by lay persons as granting too much power to the legal profession, but in actual practice, any abuse of the system is challenged more readily when members of the profession are not dependent upon the other branches of government (executive and legislative) for the right to practice their profession. In addition to the rules, a lawyer is guided by his conscience and by the approval of his professional peers, as is often stated in various rules. While everyone would agree to this simplistic statement, it must also be recognized that one persons conscience is another persons dare and in many cases, who is to say what is right. If everyones conscience were alike, there would not be the need for many lawyers. And in respect to peers, it often appears that the most highly regarded, and generally the highest-paid, attorneys dont really seem to give a hoot about what others think. The general public accuses attorneys of many things, but usually being a lemming is not one of those things. If there are indeed at least two (or more) sides to nearly every story, and the law is not clear, or is clearly unfair, in the situation, the deciding factor must then be the most ethical. And for the law practitioner, it should be remembered: When ethics are discarded, those affected are generally those who will suffer the most and who can ill afford the consequences. THE BAR ASSOCIATION Bar associations were formed during colonial times, but faded away with the exodus of the Tories. They were revitalized in the late 19th century because of a variety of reasons. It was (and still is) believed that public service can be developed and maintained only through organizations. High educational standards that can assure high standards for a profession can be obtained only through such an organization, and only such organizations can create and maintain high standards of ethical conduct with clients and with the courts. The general public has a substantial interest in such an organization and their ability to administer justice, particularly in fact of every-changing and complex society. Lawyers were among the most individualistic members of society after the American Revolution, but gradually, starting in the most populous areas, bar associations were formed for social and/or disciplinary reasons and took on the appearance of a guild. In 1870, a group of the best known and highest-regarded lawyers in New York City formed the Association of the Bar of the City of New York, principally to fight the Tweed organization. Four years later in Chicago, because of the activities of a number of unlicensed legal practitioners, the Chicago Bar Association was formed. By 1925, all the states and territories had Bar Associations, however most of them had been formed for social purposes which

continued until the 1920s. For some 50 years after the associations were formed, it was a given that the individual lawyer had neither the right nor the duty to join a bar association as membership was a privilege and new members had to be voted in by present members. By 1935, 60% of the lawyers belonged to some bar associations. The strongest supporters of the Association of the Bar of the City of New York were, according to some historians, Yale, Harvard and Protestantism. After a rather timid start, during the second half of the 20th century, the American Bar Association came of age and became more assertive. The purpose of the American Bar Association was stated to preserve its own exclusiveness (and social status thereof), and to exert professional leverage upon the political process. One item that drew national attention was when the American Bar Association admitted three black lawyers (by error, it was claimed) in 1912, when it then changed its admission practices so that only white men could be members. This remained unchanged for nearly 50 years. They also fought hard against the nomination of Louis D. Brandeis to the Supreme Court, mostly because the members of the bar considered him as a threat to their professional world. They were not successful as Brandeis had a brilliant record at Harvard Law School and Brandeis was confirmed by a vote of 47-22. The American Bar Association is the worlds largest voluntary professional organization with over 400,000 members representing about 40% of the practicing attorneys. It is governed by a House of Delegates who has adopted the following statement of objectives: 1. Promote improvements in the system of justice; 2. Improve the delivery of legal services; 3. Provide leadership in the improvement of the law; 4. Increase understanding of the legal system; 5. Assure the highest standards of professional competence and ethics (our emphasis); 6. Serve as the national representative of the legal profession; 7. Enhance the professional growth of its members. ABA REPORT OF COMMITTEE ON CODE OF PROFESSIONAL ETHICS The first book specifically addressing legal ethics was Fifty Resolutions in Regard to Professional Deportment, written by David Hoffman in 1836. Hoffman was as concerned with etiquette as he was with ethics. In 1854, George Sharswood (a Pennsylvania judge) wrote Essay on Professional Ethics which was a major influence on the first state bars Code of Professional Ethics (Alabama) and the ABAs first Canons of Ethics. His writing was noted for stressing the differences between personal and professional morality.

The ABA that recommended such a code received a shot in the arm by President Theodore Roosevelt, who had rebuked corporation lawyers for helping powerful clients to evade regulatory legislation. In 1906, the ABAs president authorized a committee to determine whether the ethics of the ABA rose to the high standards, which its position of influence in the country demands. Rather than be subjected to the reading of the entire report certain statements within the report of still of interest today. (Emphasis in following text in bold is ours) And here in America, where justice reigns only by and through the people under forms of law, the lawyer is and must ever be the high priest at the shrine of justice. Colorful and well put. Our profession is necessarily the keystone of the republican arch of government.We know it cannot be so maintained unless the conduct and motives of the members of our profession, of those who are the high priests of justice, are what they ought to be.A code of ethics, adopted after due deliberation and promulgated by the American Bar Association, is one method in furtherance of this end. With the influx of increasing numbers, who seek admission to the profession mainly for its emoluments, have come new and changed conditions. Once possible ostracism by professional brethren was sufficient to keep from serious error the practitioner with no fixed ideals of ethical conduct; but now the shyster, the barratrously inclined, the ambulance chaser, the member of the Bar with a system of runners, pursue their nefarious methods with no check save the rope of sand of moral suasion so long as they stop short of actual fraud and violate no criminal law. These men believe themselves immune, the good or bad esteem of their co-laborers is nothing to them provided their itching fingers are not thereby stayed in their eager quest for lucre. Much as we regret to acknowledge it, we known such men are in our midst.Such men are enemies of the republic; not true ministers of her courts of justice robed in the priestly garments of truth, honor and integrity. All such are unworthy of a place upon the rolls of the great and noble profession of the law. Members of the Bar, like judges, are officers of the courts, and like judges should hold office only during good behavior. Good behavior should not be a vague, meaningless or shadowy term devoid of practical application save in flagrant casesSuch standards may be crystallized into a written code of professional ethics, and a lawyer failing to conform thereto should not be permitted to practice or retain membership in professional associations.Such a code in time will doubtless become of very great practical value by leading to action through the judiciary, for the courts may, as conditions warrant, require all candidates for the Bar to subscribe to suitable and reasonable canons of ethics as a condition precedent to admission. If this were done, the courts will be in an indisputable position to enforce, through suspension or disbarment, the observance of proper ethical conduct on the part of members of the Bar so admitted. Action by the national Association will also tend to develop uniformity between the various states, not only inform and method of statement but also in application, and this we deem of practical importance .many men depart from honorable and accepted standards of practice early in their careers as the result of actual ignorance of the ethical requirements of the situation. Habits

acquired when professional character is forming, are lasting in their effects.an American Bar Association Code of Ethics should prove a beacon light on the mountain of high resolve to lead the young practitioner safely through the snares and pitfalls of his early practice up to and along the straight and narrow path of high and honorable professional achievement. Following this report, the ABA committee drafted 32 Canons of Ethics, approved by the membership in 1908 with little changes or debate and which all but 13 states and D.C. adopted with small local modifications. In the other states, the Canons were treated as guides. However, there were substantial problems in enforcement, mostly because of the brevity and generality of the rules, and also because they attempted to combine moral exhortation and disciplinary mandates. The Canons increased in number and there were so many variances, that in 1969 a new Code of Professional Responsibility was created. These Canons were divided into Canons, Ethical Considerations, and Disciplinary Rules. In respect to the Ethical Considerations, the drafters of the Code explained, The Ethical Considerations are aspirational in character and represent the objectives toward which every member of the profession should strive.
REASONS FOR THE CODE

Some commentators on legal ethics raise the question as to why there seems to be a need for ethics. They simply state what decent people already know and practice, while those who are not decent ignore these codes and who, it is suggested, find the navet of believing that a code of ethics would make a difference laughable. A logical answer to these concerns is that even if it is true that they are simply nave reiterations of what is already known, there are not as many virtuous people as one might think. Even those who are normally considered as above the fray, are often confronted with situations with which they are not familiar and need guidance. Particularly in a profession where success is often measured on a monetary scale, temptation rears its head quite often. Even if there are no sanctions involved, just the printed guidelines can be used to persuade a person to do what they may not have done without guidance. But perhaps the most persuasive reason against a code of ethics raised by some professionals who guard their individual autonomy jealously, is that the pronouncements are just too controversial and which require behavior about which reasonable people can disagree therefore the threat to the autonomy. Even though an individuals adherence to a stated principle may be inconsequential, when everyone acts in the same way, then the results are significant. Codes of ethics encourage, and in some cases, require, standards of behavior among a group of people with similar needs and interests, can have a significant influence on both their motivation to act, and by the very nature of the acts. Add the encouragement of sanctions when the Code is violated, the effects on the principles will be greater. Lets face it. The general public, which is comprised of clients and future clients, is not impressed with the general ethical conduct of the legal profession at this time. While one may not care what anybody thinks of them, the only way that one can build and maintain a

reputation that will influence the public and the lawmakers, is to abide by strict rules of ethics. Can you imagine what the public would think if there were no Code of Ethics? ETHICAL THEORIES Simply put, an ethical theory lays the foundation for a principle, which in turn constitutes the most important justification for pursuing or following a course of action. These principles of fairness, consistency and beneficial to the proper parties as discussed above, plus such things as morality, and other such items to consider, may be called ethical theories that form the basis for ethical rules. But as one would suspect, very rarely is there a clear-cut situation where such rules can be applied with no hesitation and with knowledge that the ethical solution has been reached no ifs, ands or buts. What if you promised your family to take them to Disney World this summer? However, just a few days before the planned trip you are informed that your daughter, who has a learning disability, must be tutored during the summer months in order for her to be admitted to the next grade with all of her friends. This presents a dilemma as the tutoring will be expensive and you are not sure that you can afford it and keep another promise to your son to buy him a new bicycle so that he can go to and from Little League practice and games in the Fall. Also, if you took a week to visit Disney World, your daughter would lose that much tutoring and the information that she did not learn could be crucial to her final grade and for her moving to the new class. This is called a real dilemma as more than pure reasoning is involved, obviously there are emotions involved too. Without going into a technical discussion as to the types of moral dilemmas, let it just be mentioned that there are those who appeal to fairness and rights over the consequences, and then there are those who appeal to consequences over fairness and rights. No discussion of dilemmas would be complete without bringing up the decision that was made by President Truman to use atomic bombs in Japan, and by doing so, ending World War II. Those who agreed with his decision say that it was worth taking the estimated 80 or 90 thousand Japanese lives in order to bring this bloody war to an end, and otherwise, in all probability, it would have cost millions of lives if the country of Japan had been invaded. On the flip side, there are those who (still) maintain that dropping the bombs was immoral and not just because of the loss of innocent lives. These dilemmas cry for solutions, and multitudes of such dilemmas arise every business day. Solving these dilemmas is what gives us ethical theory and which requires more study.

In determining whether an action is ethical or not will depend upon who is asking? to a great extent. There are those who prescribe an action for ethical reasons as to whether it benefits more people than it harms. Those who automatically look at every situation as whether or not it is fair regardless of the consequences, might look at a situation differently than one who always looks at every situation in the light of what benefit it would be to him (her). A few words in respect to each of these groups of people who usually look at the same situation differently: Those that look for the benefit to themselves find that problems arise when what is good for them can only be accomplished at the expense of another. This is the key for whether such consideration is selfish, or just self-concern. Selfishness would indicate that the extreme of ignoring how an action would affect others, is the most common example of unethical behavior. In many professions, the code of ethics requires one to act in a way that will best serve the public interest.
DETERMINING ACTION IN LIGHT OF THE CONSEQUENCES OF THE ACT

Another type of person will always determine an action in light of the consequences of the act and they will then always compute the benefits and the harm of every action. Therefore, an action may be justified if it brings more happiness than unhappiness for more people. This seems rather straightforward, but the problem is determining whether an action brings out the maximum amount of good, or whether it is good to a maximum number of people. If it brings out the good to a maximum number of people, then the problem becomes as to how these goods are to be distributed. Next problem is how one decides as to what counts as good? Sometime good is defined as to what satisfies the desires of the individual the best actually defining good as pleasure and happiness. Happiness is considered by many as the ultimate good. This discussion can (and does) fill page after page in text books, but it is presented just as an example of how professional ethical theorists can determine whether a specific action is ethical or not.
ACTING ONLY FROM DESIRE

As far as the other approach that one may take to an action in determining if it is ethical. If a person acts strictly from desire, then he is acting more like an animal inasmuch as there is no moral reason to take the course of action. The question should be not what action will fulfill the inclinations, but what fulfills the sense of duty or obligation.

ETHICS OF VIRTUE There is one more class of person, or perspectives used by a person, in determining whether an action is ethical, and which has been called the ethics of virtue, or as some prefer, ethics of character. The first word that comes to mind to most is honesty. While the classical sense of virtue is not necessarily confined to honesty, it is most descriptive for this discussion. Accountants, for instance, have the responsibility to always respond truthfully and there is little doubt that this is a virtue that is mandatory for a professional accountant. Another virtue can be loyalty. However, is loyalty compatible with good, solid (some say hard-nosed) auditing practices? This points out that some virtues can conflict. How much loyalty to a client should an attorney have? Should an in-house attorney report malfeasance of the President of the company to the Board of Directors before discussing it with the President or should he report it at all? (This is discussed at length later in this text.) It is easy to see the magnitude of this problem. While it certainly would not hurt any professional to spend the time to become better educated in philosophical studies of ethics with its many ramifications, as a practical matter, most people do not think about the principles to be used in determining whether an action is ethical. Most people in their private lives simply go by their gut-feelings, their intuition or their own personal feelings. Many in their professional lives simply go completely by what their training has provided them to consider. Since people in the same vocation or endeavor have various reasons and motives for acting as they do, there must be a published code of ethics for any profession if for no other reason than uniformity of action or reaction.
DETERMINING THE PROPER ACTION

Once these steps have been taken, then the options available must be evaluated to determine which would be correct. To oversimplify this evaluation, there are several ways to determine the right action, but many experts break it down into only four steps: 1. Is the action that appears correct, beneficial to the parties concerned? Sometimes at this point it would be helpful to use the smell test, i.e., if the action doesnt smell right, then it probably isnt. 2. Is the action to be taken, fair to the parties involved? 3. Is there a responsibility to perform the action because of a prior commitment or promise made? 4. Is it legal? The proper evaluation of these options is the heart-and-soul of Ethics and is discussed below in more detail.

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DEALING WITH RIGHT OR WRONG Obviously, Ethics can be said to deal with right or wrong. Believe it or not, nearly everyone has a(n) (ethical) set of beliefs as to what is right or wrong and these beliefs do not necessarily remain the same among all persons. For instance, abortion, capital punishment, and adultery can be good or bad, right or wrong, or acceptable or unacceptable, to a person or a group of like-minded persons. Cheating, stealing, and not keeping promises, or abusing children, elderly persons or animals are usually considered as wrong or bad. These all constitute moral beliefs, and if one were to write down all their similar beliefs, they would, in essence, create a personal code of ethics. The primary subject of ethics is human actions, referring specifically to any action that is deliberately taken. If a person thinks about a particular action and then chooses to take this action, then it is a deliberate action and if the person has any control over this (these) action(s) then they are held responsible for their actions.
PERSONAL RESPONSIBILITY

In todays society, this personal responsibility is becoming an ancient belief that is not relative to todays situations. A mother drowns her children, but it is not really all her fault A sniper kills innocent people at rest stops, but it was only because of the (fill in your own reason) A corporation goes bankrupt, leaving many vendors, employees and investors with empty pockets, because an accountant employed by the company went along with the desires of the company President to over-inflate the value of high-end inventory items in order to show the profit to the Board of Directors that the President had promised - but the accountant is not at fault because he was just doing what his boss wanted him to do. And then there are attorneys who have so many responsibilities that it is sometimes just an ethical question as to which the attorney is most responsible. True, the actions of individual humans are not the only subject regarding ethics that must be considered. The activities of a group of individuals can be called social practices if one delves deeply into the study of Ethics. A practical example would be an individual using insider information to buy certain stock or in the case of a stockbroker, to notify his clients of a probable decrease or increase in the value of their stock because of insider information. In the 1970s, in California, a life insurance company, Equity Funding, created thousands of phony policies, complete with phony records, reports of medical examinations, underwriting data, etc. They reinsured this business with several reinsurers who gave them first year and renewal allowances for the reinsured amount into the millions of dollars. This scam went on for months with the full knowledge of the top management, in-house attorneys, accountants, underwriters and other select top & middle management. It was finally discovered when an Underwriting Vice President reported this situation to a stock analyst who had been touting the stock. The stock analyst who was first made aware of this situation also faced an ethical 11

problem. The analyst was informed of the situation over lunch with an executive of Equity Funding. The analyst did some quick checking and as a result, was convinced that the executive was telling the truth. He contacted many of his clients and recommended that they get rid of their Equity Funding holdings. As a result of this action, the New York Stock Exchange charged the analyst with violating exchange rules with information about Equity Funding before regulatory authorities made it public. Ethical questions arose, naturally. Insider trading is a general practice and his using this information was an individual action. One question that could be asked and frequently was is What was the analyst to do? When he became aware of this information he was not able to completely verify the information, but he felt that it was his duty to his clients to pass on the information that he possessed, just in case Ethically, was it not his duty to protect his clients? If he had not notified his clients and it later was disclosed that he had known of the situation, would he not be susceptible to legal action? And another related ethical question could be Why did the executive wait for three years before exposing this situation. This particularly situation is discussed to show how ethics can sometimes create a Catch22 situation, not unlike many attorneys find themselves when they are bound by rules of confidentiality which would be violated if they reported misdeeds by their clients to the authorities; but on the other hand, if they do not report it, others could be injured and the attorney may be in violation of the Rules of Professional Conduct in this jurisdiction. (Also discussed at length later in this text.) SENSITIVE JUDGEMENT Sensitive judgment is often used in Code of Ethics of some professions, but should be used for all professions, including the legal profession. It simply refers to the total of all factors involved in ethical judgments, i.e., the professional should be aware of all matters pertaining to the morals and judgments of all actions that may arise during any personal or general actions. Every person has some sort of moral beliefs, which usually includes the simple belief that everyone should do their own job. Therefore, a person must determine whether they should do their job under every situation and circumstance. Many Codes of Ethics state that the members of the organization should accept the obligation to act in a way that will serve the public interest, honor the public trust, and demonstrate commitment to professionalism. This sounds good, but is very difficult to achieve at times. Is an attorney, for instance, to place his (or his familys) interest above that of the public? What if his needs conflict with the needs of the client, or as importantly, the public? There are always situations where there are conflicts between ones profession and their job or between either and their personal life. What to do what to do? How does one know what is acceptable and what is not, what action is acceptable, etc. Thus, the Code of Ethics (or Principles, etc.) has been created by nearly all professions and by most businesses of any size.

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THE MORALS OF THE LAWYER

There are those of society who lump all lawyers together and then come to the conclusion that it is not possible for an attorney to be moral. Is an attorney nothing but a hired gun who left his morals on his dresser when he graduated from law school and frankly, does not care, because who ever heard of a lawyer with a conscience? What other profession allows its members to lie and misrepresent material facts when in negotiation with another party? This may seem extreme at the least, but this is how many lawyers are perceived. Some point to the fact that a lawyer has no moral responsibility for representing a particular client, or for lawful means used or the end achieved for the client. This is one way of saying that the lawyers role in society is amoral. On the other hand, a lawyers role is very moral. True, the lawyers choice of client is not subject to moral scrutiny otherwise there are many, many criminals who would never be represented in court but the lawyer does have control of his clients morality by imposing his morals on the client (if, for instance, a person who would not lie, will stretch the truth if his attorney says that it is OK) as the attorney controls both the ultimate goal and the means for obtaining that goal. Actually, the lawyer can stop the client from using lawful means to obtain lawful results as the lawyer can threaten to withdraw if the client does not perform as the lawyer requests and represents as a moral or correct course of action. There are strict rules as to withdrawal from a case, however, discussed in the last chapter. Even by choosing the client, the morality of the lawyer is obvious. It is moral for the client to make the important decisions about their (the clients) goals. The client must approve any settlement, for instance and the client can dictate any lawful means to obtain those goals. However, it cannot be denied that the attorney does not have to accept a client (unless appointed by the court) so any choice of the client is a moral choice and the attorney can be held morally liable. In the eyes of some of the public, a moral attorney may be an oxymoron. Lawyers are members of a profession with a monopoly granted by the federal government and furthermore, lawyers are essential to the administration of justice. This should indicate to most lawyers that they do owe the public an explanation of what they do and why they do it. Perhaps the most important reason that there is so much lawyer-bashing today which, remember, this is not new is that the legal profession has failed to explain and justify the true nature and importance of the lawyers role in the American society. INTEGRITY The Code of Ethics for any profession will state in some fashion or other, that the member should perform with the highest sense of integrity, or words to that effect.

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The acknowledged definition of integrity is firm adherence to a code of especially moral or artistic values. One could look at the way this principle is stated and then ask, Am I showing integrity in the way that I am performing? It is important for the student of Ethics to realize that accepting just anyones beliefs does not make it correct think of suicide bombers, slavery, annihilation of a race of people, etc. Therefore, beliefs must be regarded in the sense of morality, and moral beliefs involve emotions, desires, preferences, and entrenched values. One thing for sure, they are intangibles one cannot touch, see, feel, etc. morality. Many simply ask, Are there any good reasons for doing a certain thing, or are there good reasons why one does NOT want to do a certain thing? Many old-timers would ask, Is it proper? when deciding what to do in many situations. When asked how a person could know if it was proper, the answer usually was, You just know.
JUSTIFICATION

Suppose you were 16 with a drivers license, and you had been looking forward for months to taking Susie (or Ralph) to the movies in the family car, all by yourself. Your father had agreed to let you use the car for transportation to the movies when you got your license. When the day came and Susie (Ralph) had agreed, you asked your father for the car keys, but he says that you cannot have the car. You are understandably upset, and you cannot understand how he can go back on his word. You father can then say that he is not obligated to give you the car, therefore his belief is not justified or he should justify it to you. Maybe he just doesnt feel like it right now. This justification probably wouldnt fly to your satisfaction, because he did promise. And, people should always honor their promises (a basic of Ethics). This could mean that any promise is not worth much business deals will fail, marriage will come apart, and the world will go to wherever in a hand basket. However, what if he said that the XX@&$!)**&% thing blew the carburetor today when he was driving home and he cant get the parts until Monday. Now, theres a reason for not honoring the promise. In other words, there is justification. This proves that: moral beliefs are right or wrong, correct or incorrect, and they can be justified if there are good reasons. This is an important precept in understanding ethics and ethical behavior.

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BELIEFS LEARNED AS A CHILD In order to better understand moral beliefs, a good exercise is to list those beliefs that you learned as a child. For many, this could start with the Ten Commandments. Nearly everyone will agree that one should not lie, steal, cheat, harm, kill, and one should live by the Golden Rule Do unto others as you would have them do unto you. As the younger generation may say, Now, get real! The overwhelming reason for taking an action for many (too many) today is that is best to do anything that is good for me. Or, it is in my interest to do a certain thing, or perhaps more importantly, will it benefit me. Better reasons are that by doing something, it is just or fair (or proper), you promised to do it and it will not do harm to others. And, one does not break promises. Take this one more step, and take a look at the action that one is considering. IS THIS GOOD FOR ME? It is not coincidental that this consideration would be the first to be discussed, as that is typically what is the first thing that goes through the average persons mind. This is not always true, - Mother Theresa rarely, if ever, thought of herself first. For the rest of us who are not approaching Sainthood, if you can actually perform an action that benefits yourself, can you think of a better reason for doing it? Of course, this is applicable only if it is meaningful work usually defined as work that can be beneficial to the person. Most people have a need to be productive and to work towards that end (some dont, but they wouldnt be professionals), so therefore, work is good for us all. Conversely, if an action hurts oneself (not necessarily physically) then that is a great reason for not doing it. This can be overdone frequently, as some people seem to think that any actions that are beneficial to them must therefore, not be the right thing to do. Of course, this is silly, as if a person doesnt consider or concern himself or herself with an action that benefits them, then who will? You cannot go through life without looking out for yourself. This concept can be overdone, as evidenced by taking a walk down the mall and note how many large, overweight people are in evidence. Not in every case, of course, but generally it can be accepted that when it comes to food, some of them look out for themselves just a little too well. A good rule to follow in determining if an action is good for you is that in most cases, there can be justification that an act can be good simply by showing that it is good for you.

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HOW DOES THE ACTION AFFECT SOCIETY? The next step is actually to take a step back and look at the big picture. Is this action not only going to be good for me, but is it going to be good for everyone (society) as a whole? One outstanding example of determining what is good for society, as often quoted in such discussions, involves Tylenol and Johnson & Johnson. When Johnson & Johnson were made aware that some of their Tylenol bottles had been tampered with and it was nearly impossible to determine just how many bottles were involved, they immediately made the judgment call to recall ALL Tylenol from the shelves of the many stores and warehouses, costing the corporation untold millions of dollars in profit. This was a decision based upon whether the action would affect society, and fortunately for Tylenol users, this was the right decision. An interesting point is that the business press solemnly but loudly (in some instances), prophesized that Tylenol would never regain its market prominence. It did. IS IT FAIR, JUST AND PROPER? Remember as a child, the many times that things would happen that just werent fair? Even as an adult, a situation will arise that just does not seem fair. When voiced, the objection was usually overcome with the statement (in some fashion of other) that life just isnt fair. While this may seem logical to an adult to some degree, for a child it still is not fair. Of course, all people should be treated equally unless there is some relevant difference. This can be illustrated by the way that a large (actual) European company was managed for many years. It had only one stockholder, who was designated as CEO and Chairman. In an effort to appear Democratic, the CEO designated a Manager in charge of each major division within the international firm (this would be equivalent to a Chief Operating Officer in most corporations) as a member of the Operating Management. Great pains were taken to make sure that each Manager was equivalent. However, there always has to be a decision-maker, so all Managers were considered as equal, but they would then elect one Manager as more equal than the others. This system survived for many years but upon the death of the sole shareholder, his heirs transformed the operation into a more-typical company-management style. Just like cream always rises to the top, there always seems to be one person who is moreequal than others. And that is probably a good thing. IS THERE A RIGHTS VIOLATION INVOLVED? Every American has the right to be treated equally. And, we all have the right to life, liberty and the pursuit of happiness, and, to be technically correct, to property. However, the government grants us certain rights and when these rights are infringed upon, then we are protected by laws and regulations. The use of coercive marketing techniques and deceptive advertising is considered as a violation of our rights to liberty. Even the laws that enforce the rights are often considered as a violation of a business entrepreneur to do business.

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Certain rights have become known as entitlements. These entitlements include the right of a child to be educated, for instance, but the means for this education must come from others who are obligated to provide this right. Healthcare for everyone, jobs for everyone, housing for everyone, etc., are not rights per se, but in certain situations, these rights could be assumed. If they are so assumed, it is the right of the taxpayer to know whom, how and how much these rights can affect the rights of the taxpayer to keep and hold property. More pertinent to this discussion is the right of a purchaser of stock in a corporation to be provided with accurate financial information regarding the corporation to be notified of any illegal action taken by the corporation. If a proposed action treats all persons involved equally and fairly and there is no violation of their rights, then this is a reason to continue with the action. Conversely, if the rights of another would be violated, even to a small degree, then this is a big reason not to take the action. HAS THERE BEEN A PROMISE MADE? A promise is a commitment, and if one has made such a promise/commitment, then one should do all in their power to honor the promise/commitment. This is an inescapable reason to pursue the course of action contemplated. In a discussion of ethics, however, this must be taken a step further. Is there any promise/commitment beyond those that were agreed upon by the parties involved? Implied promises are generally a distinct and very important part of most transactions. For instance, if one purchases a set of golf clubs, there is an implication that the club shaft will not break or bend if the club is used properly and for the task for which it is designed. Those who purchase insurance products do not expect that when the insurance is needed, the small print will void their agreement with the insurer. It is an inherent trait of civilization that promises between persons are kept and most of the promises are implied. What would happen to commerce if there were no implied agreements between an employee and an employer, that the employee would show up for work every working day? But what if you borrow some anti-freeze for your car from your neighbor with the promise to return what is not used. He later then asks for you to return what was not used as he had discovered that a cat would readily drink anti-freeze, and that when they do, they assume room temperature. And further, the cat belonging to the person across the street has been intimidating his poodle, and he is going to solve that problem, once and for all. Do you break your promise in this situation, knowing what the result of keeping your promise will be, that harm that will come of returning the anti-freeze would outweigh the promise? (This may be arguable with some that really, really, hates cats but you get the point.)

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IGNORANCE IS BLISS? Ignorance of ethics has universally been understood to start at early childhood. This is obvious in those situations where the parents have been involved in unethical and/or illegal activities as the child soon learns to accept such action as the norm. If they are exposed to such activities, not only from family but also by others with whom they associate, they will soon develop the attitude that it must be right because everyone does it. Obviously a child that grows up in such an environment, will not know whats right or whats wrong. Bad ethics are often taught by example. There is a true example of Ethics in an actual situation involving the sale of water softeners. (OK, they are not the most highly respected salespeople in the world) In this actual case, the salesman called on a lead (generated by telemarketing) to sell a water softener. When he walked into the rather modest home, he noticed an organ standing in the corner next to the bookcase that held the latest Encyclopedia Britannica indicating that they were suckers for a good sales pitch. The salesman performed his sales tasks of testing the water, which in reality is just an illustration of how certain chemicals interact with H2O. The prospects were eager to buy not only the unit, but also the most expensive unit. The prospects talked about dipping into their savings and taking an advance on wages to make the payments on the unit. Again, this actually happened the salesman just couldnt do it. He said he had not been raised to take advantage of people like that. He was fired from his job, and on a hunch a couple of weeks later, he called the people, who thanked him for sending the nice young man to their house to make sure they bought the right unit. This same salesman swears (verified by others that worked for this sales firm) that the Manager had a picture of a water softener sitting next to a run-down house, that he had sold to a man who had to get his water from a well. We would take buckets of water and pour it into the water softener If a persons early training taught that one could get away with wrongful acts and make money; then the individual needs re-training and re-education as to what is right and what is wrong, and WHY it is right or wrong. OR GREED? While some people act only out of ignorance when making ethical decisions, the ugly green monster, greed prompts others. The demon that perches on everyones shoulder is more active with some than with others. Nearly everyone will admit to having done a wrong at some time or other (or else they are lying) and psychologists have discovered that people respond positively to rewards but negatively to punishment no startling discovery, even Adam in the Garden of Eden knew that, or should have. In business, companies will reward the high producers with bonuses, gifts, commission increases, trips to exotic places, and whatever other rewards seem to ring the bells of the 18

producers. Productivity is rewarded, often regardless of how it was achieved. It is no shock to discover that quality of the sales is worse on business sold during a company promotion, Presidents Club qualification period, or some other such contest period. If only productivity is rewarded, any business suffers in quality when increasing in quantity. No one is perfect even Mother Theresa admitted to imperfections (but not many or of much importance). Often quoted in these types of discussions is the situation when Abraham Lincoln threw a man out of his office for attempting to bribe him. When he was asked as to why he had thrown the man out, Lincoln replied that the man was getting too close to his price. This simply points out that nearly everyone has his price. The old story of the man, who approached a well-dressed lady and asked her if she would go to bed with him for a million dollars, to which she gave considerable consideration, and when assured that he could pay that much, she agreed. He then asked her if she would go to bed with him for $20, to which she indignantly refused and asked What kind of a girl do you think I am? He answered, We have already determined that, now we are just trying to determine price. Since realistically we probably all have our price, the smart person will simply not put themselves in situations where they are tempted. CHARACTER We have all heard the word character in referring to certain individuals. Some seem to have it, and some dont. Actually, those who have overcome temptation tend to have developed a stronger character as a result. So what is character? The dictionary has about 50 lines (in small print) of definition, but the most applicable would be: one of the attributes or features that make up and distinguish the individual. Therefore, the goal of an ethical individual is to develop a strong character. Many scholars, authors, and others, consider virtue as the telling factor in a strong character. Simply put, virtue is like a habit to do good things, such as honesty is a virtue. Virtue is not something that anyone is born with, but it must be developed. Children go through a phase when they come up with some whoppers and while this upsets many parents, it is a natural part of growing up and it is the responsibility of the parents to teach honesty (a virtue) to the child. On the flip side, people can develop habits of doing bad things this would then be called a vice. People usually dont state doing bad things all at once - like virtue, it must be developed. Normally it is not taught by parents, but by others in the environment, associates, friends and those to whom a child respects. This usually starts with something small, like a little white lie that gradually develops into falsehoods so rampant that people simply no longer believe them. Unfortunately, it is easier to develop vice than it is virtue, as virtue demands

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continual attention and it must be exercised frequently. Since it is harder to be virtuous, virtue is praised more by others. People, nearly all people, at some time in their life face situations where they can easily succumb to temptation to do something that they know is wrong, even though they know that another action would be right. Unfortunately, many people take the low road. The importance of ethics training comes into play here, so that the person will do what is right and will be therefore, working towards building a strong character. QUANDARIES When a What to do, what to do? situation arise, it is called a quandary, dilemma, or just a gray area. This situation comes into play when it is just not clear as to what is right and what is wrong. A quandary or dilemma occurs when in a certain situation, the person is not sure as to what to do, as there is good reasons for the action and good reasons against it. Recently, the CEO of the New York Stock Exchange decided to cash in his retirement funds for estate planning purposes accumulated over the past 16 years. This totaled some $120 million and caught the eye of the press, making the headlines for a couple of days. He maintains that it has all been collected legally and under the provisions of his contract with the Stock Exchange, and at this point, there is no evidence to the contrary. But it is obvious that with the hue and cry of the self-appointed guardians of the press, his days are numbered. It may have been legal, but was this ethical? He evidently found himself in a quandary as to how to collect these funds, and one must suppose that there were good reasons for taking it in one lump sum as he did, or to spread it out in some fashion so that it could be more easily understood. Was it ethical for him to take it in one lump sum, considering the fact that during his reign, the stock market (probably through no actual fault of his) had fallen drastically and many investors, including retirees, who had invested in stock handled by the NYSE - lost their nest eggs. Was this right, or wrong, or just in a gray area? TRYING TO RESOLVE DILEMMAS These decisions are not easy, and as the world of business become more complex, so do the ethics decisions. But before a dilemma can be solved, there are certain steps to be taken before one can start applying ethical theories or ethical principles.
COLLECT PERTINENT INFORMATION

Every effort must be made to collect all of the information possible that pertains to the dilemma. In the situation previously discussed, it would be easier to make the proper and ethical decision if it were known that the client is not incompetent. It may be surprising to learn that many quandaries are solved when all of the information is collected.

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DISCOVER ALL OF THE PLAYERS

Before it can be determined as to what is fair, those that are involved in the dilemma must be discovered. Sometimes this is not easy and will require a lot of digging, but as they say, You cant determine the program until you know the players. Sometimes there are hidden agendas discovered when all participants are known. Also, sometimes there are those with shady reputations on one side of the question, which would raise red flags and which alone could determine the proper ethical decision.
DETERMINE THE OPTIONS

Some ethics consultants maintain that since a dilemma (or quandary) must have at least two options, in order to determine the proper option, a third option is necessary. The reasoning seems to be that if one has not spent enough time and thought to the problem without coming up with at least a third option, then they simply havent thought enough about the problem. Practically speaking, in order to solve a dilemma, there MUST be another choice, other than just two. There would not even be a dilemma if there were not two choices a right choice and a wrong choice and the dilemma is trying to figure out which is correct. Sometimes the third choice is an acceptable combination of the other two, sometimes it is completely different, but in any case, it usually is not easy to discover.
ESTIMATE THE EFFECT OF THE OPTIONS

If the action under consideration is fair to all parties, benefits the client, and is consistent with such actions in other situations, then there really is no reason not to choose that action. Conversely, if taking such action requires that a commitment is broken, it is harmful and unfair, then that action would not be proper. Of course, it is really not that easy in real life, primarily because of the conflict that occurs when an action is beneficial but it is still not fair hence the quandary/dilemma. ETHICAL BEHAVIOR Ethical behavior almost seems like a religious term actually religion is closely entwined as ethics, by its very nature, relates to moral behavior. So does religion and faith of the individual as in the balance of things, they both are higher than the law. As with ethics, faith has a higher standard of behavior than the law. One identifying factor of ethical behavior is that the person takes responsibility for his actions.

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People and organizations that do take responsibility for their actions are showing high ethical behavior. The Tylenol situation is an excellent example of taking responsibility, indeed, the company already had procedures in place for recalling a product long before the tampering with Tylenol occurred. Opinions as to what behavior is moral vary and what one may think is an ethical situation, may not appear so to another. The news media is full of situations that may or may not be ethical. Sometimes a well-intentioned situation can get out of hand. Recently parents and the school board of a community in Florida were concerned about the students dress code. While students in Florida usually wear shorts all year, the teen styles seemed to be dictating shorter and shorter shorts, and due to the influence of some entertainers, the exposure of the navel of young girls was a fashion note. Young men were copying jail birds who had their belt removed before they went into a cell, therefore their pants habitually drooped this was copied as a fashion statement for the young, and the exposure of the top of their underwear was added. Parents, teachers and the school board adopted a zero-tolerance position with a mandatory expulsion of one day as a minimum. As expected, one of the honor students with an impeccable reputation, showed up for school with a shirt-type blouse that folded over the top of her shorts which was not allowed, even if there was no skin showing in the mid-section. Is it truly ethical of the authorities to make such tight restrictions? Was it ethical for the young lady to show up with a blouse that did not make the requirements? Actually, her attitude turned out to be very ethical, as she stated that she should have known that this blouse did not meet the standards established by the school so she took full responsibility. The parents did not agree were they therefore unethical? The situation was fanned by the news media were they being ethical? (This might be a rhetorical question.)
MORAL BEHAVIOR

In determining whether an action is ethical, it must be approached as whether it is or would be moral behavior. As a matter of fact, ethical behavior can usually be called moral behavior, and an action to the contrary would not only be unethical, it would also be immoral. Take the situation of an automobile accident where a person in the other car is injured. Does the uninjured driver offer emergency help even though they may not be qualified? If there is no one else around immediately, of course a party is obligated to offer assistance, and in some cases may be so required by law. If the injured party is bleeding badly, and the other person has had no medical training, but elects to wait for the medics or someone who is professionally trained as they feel that they are not qualified is this an immoral act, and an unethical act as well? What most would consider as immoral/unethical behavior, is considered by some as just good business practice. A nurse may not stop at an accident and render medical help, as she is afraid that she could be subjected to a malpractice suit even if protected by a Good Samaritan law. A used car salesman may represent an auto as being safe and in good working condition, 22

knowing full well that the brakes are about gone. In the eyes of most of the public, used car salesmen are way down the chart of ethics. Most people have had bad experiences in business matters where the company and/or its representatives did not behave in an ethical manner - from small matters to large matters. In an actual situation that illustrates this point, recently a young mother had her sons trumpet repaired prior to the school year, and was charged $100 for the service. She thought this was fair and she recommended the company to a close friend whose son also needed the same trumpet repair. Her friend was charged $30. When this was discovered, the first mother called and represented herself as another person, and asked over the telephone what it would cost to do (what she had paid $100 to do). The reply was that it would cost $45. When the owner of the business was confronted with this situation, the alibi was that they send the instruments out to individual repairmen on a contract basis, and some charge more than others do. This business has existed for over 15 years, member of the Better Business Bureau, and is the largest seller and repairer of band instruments in the county. Just because a business is a member of the BBB is no sign that they are an ethical company. On a more extreme basis, ethics have been missing in recent years when the stock market was booming. It always seemed inconceivable to anyone with any business experience, that a person with no background or experience in a business could start a new dot.com business. People could not seem to get their money invested fast enough in these nebulous, to say the least, enterprises. Then, as everyone knows, the market bottomed out and a lot of people lost their nest eggs or their retirement funds. At the very least, the question must be asked as to whether it is ethical to prey on the gullible? Some businesses find themselves in a growth spurt and they take on more business than they can handle. Sensibly, they would hire more people, but that would mean more paperwork, more benefits and fewer profits, so they simply keep piling it on their existing staff. Another example of a business being legal but unethical. The lesson is that some people consider something just as good business, when actually it is either immoral or unethical behavior, or both. EQUITY Equity and equitable crop up often in any discussion of ethics. Blacks Law Dictionary defines equity as fairness, impartiality, evenhanded dealing, such as the companys policies require managers to use equity in dealing with subordinate employees. Also, the body of principles constituting what is fair and right (with reference to the Declaration of independence). The next definition is of particular interest: (Equity is) the recourse to principles of justice to correct or supplement the law as applied to particular circumstances.

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This falls in with the definition of ethics in the statement that law establishes standards, equity establishes higher standards. Keep in mind, however, that Equity is also a legal term, so for purposes of discussing ethics in non-legal language, equity means natural justice. The basic fundamental ethical duty of attorneys is to represent clients zealously. Often attorneys, when taking a deposition, will make sure that the deposition location is at considerable distance from the residence of the person to be deposed, will set a limited time for the deposition, and, in essence, hold the persons feet to the fire. Some attorneys may have mixed feelings about this type of behavior - even though most would say that the action is proper and is simply using a legal procedure to gain an advantage for the client. Ethics doesnt even enter the picture. However, most nonlawyers would say that something wrong has happened, justice has not been served in these cases but has been denied. Many Americans regard lawyers with suspicion and criticism as evidenced by the fact that polls show that public confidence in lawyers has never been lower. Many of the rules of legal ethics originated many years ago as moral precepts used to govern human affairs. Today, nearly 150 years after rules were first established as the Aims and Duties of the Profession of Law, these rules are questioned by both the public and the press as to whether the ethical behavior of attorneys is even related to ordinary moral concepts. CHAPTER 1 STUDY QUESTIONS 1. The law sets minimum standards, whereas ethical behavior is A. the minimum standard. B. has no relativity to standards, C. is little value. D. the highest standard. 2. Ethics opinions interpret and apply rules of conduct A. to specific situations. B. to the state Supreme Courts. C. which are only meaningful in religious settings. D. which have no value in commerce. 3. In order to solve a dilemma, there must be A. only one choice. B. another choice other than just two. C. a plethora of choices. D. litigation. 4. When ethics are discarded, those affected are generally those who A. can care less. B. have little regard for laws because they are wealthy. C. will suffer the most and who can ill afford the consequences. D. have good legal representation.

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5. Even though an individuals adherence to an ethical principle may be inconsequential, A. when everyone acts the same way, the results are significant. B. when everyone acts the same way, the results are meaningless. C. ethics have no place in the practice of law. D. members of a recognized profession are not required to adhere to ethical principles. 6. An ethical theory lays the foundation for A. a religious Canon. B. common law. C. a principle. D. meaningless and mindless mental wanderings. 7. An action may be justified if it brings more ___________ than ___________ for more people. A. confusion clarification B. happiness unhappiness C. wealth poverty D. thought money 8. Nearly everyone has an ethical set of beliefs as to what is right or wrong, and those beliefs A. are accepted by all civilized nations. B. vary by sex. C. are universal in the United States. D. do not necessarily remain the same among all persons. 9. The definition of integrity is A. firm adherence to a code of especially moral or artistic values. B. the ability to tell right from wrong. C. what just feels right. D. cheering for the same team. 10. It is an inherent trait of civilizations that promises between persons A. are universally ignored. B. are modified according to each individuals desires. C. are legal contracts. D. are kept, and most promises are implied. ANSWERS TO CHAPTER 1 STUDY QUESTIONS
1D 2A 3B 4C 5A 6C 7B 8D 9A 10D

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CHAPTER TWO ADVERSARY THEORUM


One of the most prevalent ethical theories of the practice of law is called the adversary theorem which effectively states that if an attorney does his utmost to represent his clients zealously, justice will nearly always triumph. The adversary theorum started with the Star Chamber of the Inquisition of ancient England restricted the rights of their accused, and actually imprisoned attorneys who filed frivolous lawsuits. In this country, the 5th and 6th Amendments to the Bill of Rights set forth the right not to testify against oneself, the rights to a jury trial, the right to call witnesses and to confront the accuser by the accused, the forbiddance of double jeopardy, and the right to due process of the law. The right of an accused to be entitled to the assistance of counsel for his defense was later upheld by the Supreme Court, which further defined this right as effective and substantial assistance. Under our system of laws, it would not be possible for an attorney to provide this effective and substantial assistance without accepting the adversary theorum. In civil cases, the concept of zealous advocacy provides the impetus but how this happened is still a mystery. James Madison warned against the abuse of power in 1689. In England, this was considered as the power of the throne, but in the U.S., Madison was concerned about the power of the community. He, rightfully, maintained that the greatest danger lies in that which possesses the highest prerogative of power. Today, these are modern American law firms that are international conglomerates, which are able to make their presence known well from anywhere in the United States or around the world. In the 17th century, the colonists began to adopt English legal practices, including the formal procedures which many that was too expensive and too cumbersome for the needs of the common folks. Also, lawyers were generally disliked, and this added to the need to develop a simple method for resolving disputes. However, as the country grew, the problems became more complex and there was more commercial activity in the new nation, therefore professional intermediaries were obviously needed. The middle and upper classes in America were very concerned about the possibility of the formation of a new aristocracy in their new country, therefore an adversarial legal process seemed to make sense, particularly as it limited the power of the judges and placed much responsibility into the hands of the public and their chosen representatives. It was important that the representatives be independent and professional so that they could provide a check on the authority of the central government. There are two major reasons for using the adversarial system. Adversary procedures are the best way to determine the truth, and zealous advocacy protects the basic individual rights from public and private breaches. Conversely, however, this, plus the confidentiality has a tendency to encourage lawyers to avoid disclosing the truth and can possibly infringe upon the legal rights of the adversaries. Even today, some law students are not really comfortable with this concept as 26

they may see it as a limitation or compromise of the human nature of combativeness. Many find it difficult to discover the limits of the adversarial system. Nevertheless, this system appears to be the only effective way to judge the typical tendency of an individual to judge too quickly in favor of that, which is known against facts not yet known. Each advocate comes to the hearing prepared to present evidence and arguments, with the gnawing feeling at the pit of the stomach that the evidence may be inconclusive and the arguments may not persuade. The tribunal comes totally unprepared with no preconceived ideas (hopefully) as to what evidence should be believed what argument is the persuasive or how they should be presented. If the deciding tribunal has to take matters into their own hands in respect to the preparations that precede the trial, then it cannot be uninvolved any longer. The tribunal is therefore under strong pressure to keep things moving along within the boundaries established previously. Therefore, it is looked upon as only a ritual to confirm what it wants the public to know, and for the public to agree with its already-established decision. This is called manipulation and is one of the reasons that partisan advocacy plays such an important role in our society. The experienced judge or arbitrator wants and will actively seek to have an adversarial presentation of the facts. That way, and only that way, will he be confident that he has all of the facts so that he can make an intelligent, and proper, decision. The advocate, therefore, becomes a vital and integral part of a much larger picture. The advocate performs his tasks admirably when his zeal for his clients cause can assist in a wise and equitable decision. On the other hand, he does not perform admirably if he distorts facts and hides and obscures the nature of his evidence and presentation instead of providing a much-needed perspective. Those who believe and support the adversarial system argue that the adversarial system is the best way to establish truth. OBJECTIONS TO THE ADVERSARIAL SYSTEM The adversarial system has its detractors; there is no doubt. One of the principal objections to this argument that this system is the best way to establish truth is that if it is correct, then countries that do not have this system would not be as efficient as the U.S. In finding facts and arriving at correct interpretations of the law. Obviously, this is not true as the courts of France and Germany are not inept and there is no evidence that these courts are inferior. The concept of the adversarial system actually being precise and scientific in disclosing pertinent information and disclosing evidence to the contrary and where emotions play no part in the scientific determination of all applicable facts - just does not fly. This would insinuate that attempting to exclude probative evidence, discrediting (known to be truthful) opposing testimony, the struggle for discovery, the use of devises and techniques to delay the trial (particularly where it appears that the other party may run out of money or witnesses may disappear or die), exploit the incompetence of the opposing counsel, shield material facts from

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the court based upon assumption of privilege, or other forms of sophisticated manipulation these tactics are used by, and may be considered as required by the adversarial system. White collar criminals until recently were rarely convicted of criminal acts. Movie stars can get away with murder, scions of wealthy families settle out-of-court, and many similar situations arise nearly every day. Why? Money! The adversarial system does not take into account the effect of money, wealth and prestige and the legal talent that money can buy. How many people could afford the legal talent that O.J. Simpson acquired during his trial? Truth as a result of the adversarial system also does not take into account the weaknesses of the humans involved, including opposing lawyers and judges and consultants. One example used by the nay-sayers of the adversarial system is that if you are faced with an important decision, you would then hire lawyers or recruit friends to investigate the possibilities of the effect of the decision, either way, and they the lawyer or friend would try to convince you of one decision or the other, including not telling you all of the material facts if they were afraid that it might influence you to make another decision. Of course, no one in his or her right mind would do this. But that is what the advocates of he adversarial system want you to believe. It just is not good old common sense. Many seasoned advocates insist that in addition to establishing the truth, the adversarial system also protects individual rights even at the expense of the truth. This is not a simple matter that every attorney faces - competing ethical principles including and most importantly, having to make a choice between representing a client properly and at the same time, being ending truthful in words and deeds. Legal ethics goes much further as attorneys have to balance their ethics with a moral principles of the society overall. They are faced with discussing whether ethical is the same thing as what they can get away with, should they remain loyal to a client who was acting illegally, and very importantly, whether they are willing to pay the price of doing the right thing, especially if it means losing a job. Many attorneys believe that they are acting with the highest ethical standards but the effect their behavior has on their clients or society, as a whole never enters their mind. CONFLICTS BETWEEN CLIENT OBLIGATIONS AND OBLIGATIONS TO OTHERS Conflicts between an attorneys obligation to his client and to the obligations of the legal system and society are perhaps the most difficult ethical dilemma for attorneys. An attorney acts within what is considered as the proper representation of a client that calls for full disclosure by the client to his lawyer of all (relevant) facts even if the facts referred to prior crimes committed by the client. The only way an attorney can have full disclosure is for the client to be assured of confidentiality. To the general public this would appear to be a situation where lawyers against lawyers are considered as a closed fraternity.

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In 1973 in New York State, an attorney was hired by the wife of a convicted rapist, an accused child molester, and suspected serial killer. During the subsequent trial and interrogation by the attorney of his client, the attorney discovered that his client had indeed murdered a child and his client gave him the location of the body. This created a tremendous problem for a very ethical attorney but he was required to keep this information which was given to him under the cloak of confidentiality, between himself and his client. Eventually, the attorney was indicted on failing to report a dead body (required by the health code), and failing to provide a body with a decent burial. Difficult charges were also brought up. All these charges were dismissed, and ethics committee stated that proper representation of a client calls for full disclosure by the clients lawyer of all possibly relevant facts, even though such fact may be the clients commission of prior crimes. To encourage full disclosure of the client, he must be assured of confidentiality. Looking at this from a viewpoint of a layman, this is the most logical conclusion. The court in dismissing the indictment stated, in part, however, the Constitution of the United States of America attempts to preserve the dignity of the individual by guaranteeing him the services of an attorney who will bring to the bar and to the bench every conceivable protection from the inroads of the state against such rights as are vested in the Constitution for one accused of crime. When asked what the point was in applying these principles to such a scumbag, the attorney replied that if the principal doesnt belong to the worst of us, then it cant belong to the best. Where does the one make the exception? Judge Learned Hand had often emphasized the fact that a society of laws must be measured by how it treats its worst examples, not its best. LEGAL FICTION Many attorneys, when asked, will admit that discovering what actually happened is not within their job description. Their duty is to explain the truth as their client perceives it. Lawyers of the old school maintain that the adversary process is where one side argues its version of truth and the other side argues another version, but which will regardless result in the emergence of absolute truth. Too many modern attorneys, this is pure nonsense. For instance, one side may have a lot more money or many more attorneys while the other side struggles to stay afloat (a little guy). What chance does Joe Lunch bucket have against a large corporation with limitless funds and legal minds? If attorneys do not consider themselves as purveyors of the truth, they usually consider themselves as seekers of justice, and point to the concept of legal fiction, which, in effect, chooses justice over truth. When a suspect in a criminal case confesses because of beatings and other coercive tactics, the judge would determine that the confession is unlawful because it was coerced by these unfair tactics. Even an innocent person would probably have confessed under the circumstances. But be that as it may, the judges opinion will never be presented to the jury and they will hear nothing about the confession in any way. The theory behind the legal fiction is that by letting the jury hear the confession that would be unfair because it might influence the jury despite the circumstances. Therefore, some jurors might feel that no one would confess to crime they did not commit regardless of coercion, 29

whereas others might take the opposite view. Therefore the judge strikes the confession and the guilt or innocence of the defendant will be tested only by admissible evidence. While attorneys and a legal system are working to obtain justice for the defendant, many Americans are asking, what about justice for society? Generally the response is simply that unless every persons rights are protected, then ultimately no ones are. Protecting the rights of individuals is the best way to protect a society. Judge Learned Hand also said that it was better 100 guilty men go free than one innocent man go to jail. But today average Americans are more much less willing to accept this philosophy, and more willing to agree with the words of Fred Goldman, father of Ronald Goldman, who declared in the middle of the O.J. Simpson trial, that this is not justice. Mr. Goldman, and indeed, most of the American public, was totally frustrated by endless months of testimony, innumerable witnesses, and a trial that was more about the victims then the accused. Incidentally, the convicted murderer-child molester discussed earlier actually escaped from prison. His attorney, who had lived for years with the burden of not being able to tell the family of the dead child as to where the body was located (but was discovered by others later) was asked by the police if he could help them located the convict. The attorney had been told by his client about how he manipulated the police by staying near the crime scene and letting the police pass him by. With this the information, the policy retraced their steps and encountered the criminal who shot at the lead policeman. The police opened fire and killed the criminal. The attorney was then able to sleep at nights, even though technically the cloak of confidentiality always remains. ZEALOUS ADVOCACY - REPRESENTING A GUILTY PARTY The two questions that continually are asked of defense attorneys are: How can you possibly represent someone that you are convinced is guilty? and How can you possibly try to set a criminal free? People often forget that Clarence Darrow (who is quite well known even with the general public) very often represented guilty individuals. Perhaps his most famous defense was defending (guilty) killers Leopold and Loeb. The separation of the lawyers personal values from those of his client allows the lawyer to be loyal to his client without being responsible for the actions of his client. This is the basic premise of the American adversary theorem, emphasizing that the job of the advocate is not to present the truth, but simply to present the story of the client. The basic theory is that truth will emerge when both sides have lawyers who play by the same rules. A California statute reads: it is the duty of an attorney Never to reject, for any consideration personal to himself or herself, the cause of the defenseless or the oppressed. This duty is not taken lightly, such as in the case of Anthony Griffin (an African-American) who represented the grand dragon of the Texas Knights of the Ku Klux Klan in 1993, when the state of Texas was attempting to obtain the membership list of the Klan. Since many of his friends and associates felt strongly that he should not have taken this case he was removed as chief

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counsel of the NAACP, he made it clear that he found his client to be repugnant but it was his duty as an attorney to represent even the worse. After all, these arguments had been used against the NAACP and the Black Panther Party. Griffin prevailed in and out of court, the Texas Supreme Court sided with Griffins client on the First Amendment grounds, and Griffin received the William Brennan award named in honor of the former Supreme Court Justice who championed free speech. Through the entire ordeal, Griffin had felt that he was doing the right thing and told the New York Times If our role as lawyer, were not God. If lawyers backed off because someone is unpopular or hated, then our whole system of justice would just fall apart. It is well accepted that the last thing that a good attorney should do is to judge a client. However, on the other side of those who believe that an attorney should not judge the client, there are those who pull up visions of the soldiers of the Third Reich who maintained that their job was not to judge but just to perform their duty. The public wants to know just where legal technicalities stop and where the abstract rules must yield to truth, justice and decency. Good question. An ethics question arises when the issue is raised as to whether an attorney who is aware that his client is guilty, then presents evidence at the trial, such evidence being truthful an acceptable, but the effect is to mislead the jury into thinking that the client did not commit the crime. This was the basis for a Michigan State bar ethics opinion in a case where there was a (legitimate) mistake regarding the time of a crime on the police report and the defense attorney was aware of this discrepancy. By emphasizing the wrongful time, he was able to prove that his client could not have been present at that time at the scene of the crime. The Michigan bar ethics committee found nothing wrong with this and said that the principal of zealous advocacy required the defense counsel to do whatever is possible within the bounds of the law to help the client. They also stated that it was not the duty of a defense counsel to correct inaccurate evidence that had been presented by the prosecution, or to ignore truthful evidence that could exculpate his client. While it is not acceptable to use perjured testimony or false evidence, it is permissible to call as witnesses on behalf of the client, those who will testify truthfully on behalf of his client. The truth of the guilt of the defendant is subordinate to the zealous representation by the clients attorney. An interesting study regarding this subject was the result of a column written by Marilyn vos Savant (who has the highest IQ according to Guinness Book of Records) who is a contributor to the Parade Magazine that is included in most metropolitan Sunday newspapers. She simply asked, Should a private attorney defend a criminal case in which he or she knows that the defendant is guilty? Or should the attorney say, No, thank you? She also noted that if a client could not obtain representation, the court would assign an attorney or public defender (for an 31

indigent client) as required by law. The responses were interesting to those who are concerned about their public image. One response frequently voiced, was that the private attorney should not take the case and as one quoted respondent said, so strongly that I fear having missed some novel argument to the contrary. No system is perfect, but I cant understand why a process for finding objective truth and holding citizens accountable should permit a legal representative to knowingly work against discovery of such truth. Another respondent was an attorney with the National Association of Criminal Defense Lawyers, and who naturally took another stand. He stated that: the system works best when parties are represented by zealous advocates. Then (quoting Dr. Samuel Johnson (1709-84)) who said, The lawyer has no business with the justice of injustice of the cause. The justice or injustice of the cause is to be decided by the judge. The comments by Mrs. vos Savant are quite interesting. She did not believe that, contrary to what many respondents stated, by turning down the cases of guilty defendants, they would be assuming the role of the prosecutor, judge and jury. This did not make sense as no one is suggesting that the attorney should gather evidence like a prosecutor, be allowed to make a legal decision about guilt like a jury or actually sentence the defendant like a judge. The suggestion is merely that the attorney turn down the case. She prides herself on being open, always searching for the truth, refining her opinion, etc., and those who avidly read her articles every week would agree with her assessment of herself. Then she said, But when I asked readers to tell me if they think (A) the attorney should take a case in which he or she knows the defendant is guilty, or (B) the attorney should NOT take the case, I was unprepared for the results. For one thing, I was surprised by the visceral antipathy towards attorneys in general, especially from those who chose B. For another, I was enlightened by the comments of my readers, especially those who chose A. Upon studying all the arguments, I have changed my mind. The results of the study showed that those who were not attorneys, 72% believe B (an attorney should NOT defend in a criminal case) and 25% believe A (an attorney should defend). Most of those non-lawyers who chose A, did so only with severe restrictions, such as insisting that the attorney advise the client to plead guilty. 3% just did not know. Among attorneys who responded, 92% chose A, and would defend a client they knew to be guilty. Only 7% chose B and would not defend a guilty client. 1% was not sure.

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The principles stated by the attorneys who chose A included: A vigorous defense, even of the guilty, will force the prosecution to maintain high standards of proof for all cases. Even a guilty client should have an appropriate charge. Even a guilty client should have a fair sentence. A guilty client might not be legally responsible, as in cases of self-defense or insanity. An innocent person might give a false confession.

The weakness of the A arguments is that a public defender or court appointed counsel is perfectly capable of handling these aspects of criminal defense it was never suggested that a guilty client have no representation at all. A related argument for A is that if private attorneys rejected the cases in which they knew the defendants were guilty, all guilty cases would go to a public defender or court-appointed counsel. Thus, having public defense or court-appointed counsel would take on the appearance of guilt. And because all indigent cases guilty or not would go to a public defender, these cases would be tainted with the appearance of guilt too. The factual weakness with this argument is that juries cannot tell the difference between private attorneys, public defenders and court-appointed counsel, so they wouldnt be affected. She had chosen A before the poll, but afterwards, she chose B the attorney should not take the case except for the following cases: When the attorney believes that the guilty client is still morally, ethically or spiritually wrong. When the attorney believes that the broken law is morally, ethically or spiritually wrong. When the attorney knows in his or her heart that he or she is doing the right thing, regardless of what anyone else thinks. This covers cases where the State has behaved badly, cases in which he or she thinks the client may be charged inappropriately or sentenced unfairly, cases in which the attorney thinks the client may not be legally responsible and cases in which the attorney suspects a false confession.

One attorneywrote: If private defense lawyers, such as myself, declined to represent clients who we known are guilty, we would be out of business. Everybody is guilty. There have been few exceptions perhaps three in my 27 years of practice. This statement, which was repeated by many attorneys, sounds highly negative on the surface. But, upon further reflection, I find it highly positive and reassuring to us all. It means the State is doing the right thing. The defendants who appear in the criminal courts belong there. Unfortunately, it also means that, if the conviction rate is only 90%, were freeing far too many criminals. Remember: A verdict of not guilty has nothing to do with innocence.

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Because money is such a strong motivator, I believe that highly principled attorneys should admit that their reputations are all being diminished by some members of their profession and should revise and strengthen their code of ethics appropriately. Make clear the moral difference between defend and represent. All guilty people should be represented; not all of them should be defended. In short, I believe that the time has come to reflect on it all, discuss the situation, and modernize accordingly. When that happens, I, for one, will feel safe to choose A again. While this survey is not professional or scientific, particularly since her readers are not representative of the public as a whole, and also because the responses were from those who felt very strongly about it, including the public nonlawyers who just do not like lawyers, and lawyers who felt that they had to defend their profession. But regardless, it must be noted, there is obviously a sizable gap between the view of the public and those of the legal profession about defending the guilty. How does one explain that gap? Sure, this article was written by a layperson, a non-lawyer, but it reveals a lot about how strongly people feel on both sides of this issue. One thing to consider would be her suggestion to make the moral difference between defend and represent. SANCTIONS AGAINST ABUSE OF THE ADVERSARY SYSTEM The Federal courts may impose sanctions (which include financial sanctions) against those who abuse the adversary system, under Federal Rule 11. This rule was seldom used until 1983, when it was expanded to give it more power and a longer reach, with the result that over the following 5 years, over 1,000 Rule 11 cases were reported. The new rule allowed financial sanctions against offending lawyers which were payable to their adversaries. This seemed to help open the floodgates. For aggressive lawyers, this rule attempted to be an invitation for sanctions because of intimidation. Also, it was invoked three times as much by defendants as by plaintiffs as the courts seems disposed to sanction plaintiffs filings as opposed to defendants filings. In 1994, the Rule was changed to its present form and was directed at three situations: (1) presenting paper for an improper purpose; (2) presenting paper that is unwarranted by law; and (3) presenting paper that makes or denies factual claims without appropriate support. An attorney may be sanctioned for insisting on a position after it is no longer tenable (kicking-the-dead-horse sanction). Even if there was a reasonable inquiry at the time of filing as to the sufficiency of the support of law or fact, if later research finds that the paper is insufficiently supported, then the attorney must withdraw the paper. Some of the more interesting provisions regarding sanctions are: Sanctions are discretionary with the courts, the courts does not have to sanction lawyers who violate the rules. There is a waiting period, i.e. an attorney has 21 days to withdraw or modify the paper with no penalty. Of course, they can ignore the complaint if they believe that they have not violated Rule 11.

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Payment of monetary sanctions will usually be paid directly to the court, unless payment to the adversary is preferred for the purpose of deterrence. Sanctions may be monetary or not monetary. A law firm shall be held jointly responsible for any violations that are committed by its associates, partners and/or employees. Papers must be warranted by law or by a nonfrivolous argument for the extension, modification or reversal of existing law. An attorneys unreasonable beliefs in the verisimilitude of the claim will, by itself, not satisfy the rule, even though the attorney may be sincere in his beliefs. Perhaps the most controversial feature is allowing fishing expeditions. This is where a plaintiff alleges wrongdoing but without much proof, hoping to develop more evidence through the discovery procedure. This was not allowed earlier but it was felt that it was necessary as the total prohibition was harsh, particularly where the plaintiff is required to show that the defendant knew certain facts, or was made aware of such facts, or in the case of a defendant being involved in a conspiracy, such as securities fraud, RICO, employment discrimination cases, etc. Often a fishing expedition is necessary as the necessary and crucial evidence can be found only after the complaint has been filed. There is a reiteration of disciplinary codes that forbid action by attorneys when it is obvious that such action is intended to harass or maliciously injure another person. Courts have other statutory and procedural conditions to help avoid abuse, including sanctions against unjustified resistance of discovery, and the awarding reasonable attorneys fees for bad faith litigation conduct. CONFIDENTIALITY The attorney-client privilege has existed as such since the early 1800s. Early English barristers were adamant in their belief that an advocate who is performing his duties properly, knows but one person in all the world, and that person is his client (Lord Brougham, 2 Trial of Queen Caroline 8) The advocate must use every means at his disposal to save the client, as that is his first and only duty, regardless of problems that he may bring upon others in the fulfillment of this obligation. In order to fulfill this obligation, the requirement of attorney-client confidentiality is paramount. The attorney-client privilege prevents lawyers only from offering evidence in legal proceedings, as noted elsewhere in this text. Ethical mandates of a bar association enjoins lawyers from revealing confidential information from anyone to anyone, in or out of the courtroom and are quite sweeping. These ethic rules protects secrets as well as confidences and therefore, will not allow a lawyer from disclosing any information related to the representation that would be detrimental to the client, including information obtained from sources other than 35

just the client. Model Rule 1.6(a) states a lawyer shall not reveal information relating to representation of a client. Many attorneys, at some time in their career, will face daunting ethical problems involving confidentiality. There are a plethora of examples, for instance, a defense attorney who knows that his client is guilty of a crime that another is being sentenced for. The client may ask an attorney in a negotiation, not to reveal important and material information, leaving the opposing party to negotiate under inaccurate and mistaken information. As discussed in this text, a corporation that is marketing a product that could be life-threatening or cause life-threatening injuries is represented by an attorney who is made aware of the situation and the consequences. Indeed, the toughest ethical problems arise in the area of attorney-client privilege. In the Restatement of the Law Governing Lawyers, it is stated: attorney-client privilege may be invoked with respect to (1) a communication (2) made by privileged persons (3) in confidence (4) for the purpose of obtaining or providing legal assistance for the client. This enumeration of the statement immediately creates more questions than there is room to answer. Any practicing attorney or even law-school student can imagine some of the questions, such as What advice is legal? What is communication? etc., ad infinitum. However, there are areas that need to be discussed within the study of Legal Ethics involving attorneyclient privilege. Comment The lawyer is part of a judicial system charged with upholding the law. One of the lawyer's functions is to advise clients so that they avoid any violation of the law in the proper exercise of their rights. The observance of the ethical obligation of a lawyer to hold inviolate confidential information of the client not only facilitates the full development of facts essential to proper representation of the client but also encourages people to seek early legal assistance. Almost without exception, clients come to lawyers in order to determine what their rights are and what is, in the maze of laws and regulations, deemed to be legal and correct. The common law recognizes that the client's confidences must be protected from disclosure. Based upon experience, lawyers know that almost all clients follow the advice given, and the law is upheld. A fundamental principle in the client-lawyer relationship is that the lawyer maintains confidentiality of information relating to the representation. The client is thereby encouraged to communicate fully and frankly with the lawyer even as to embarrassing or legally damaging subject matter. The principle of confidentiality is given effect in 2 related bodies of law, the attorney-client privilege (which includes the work product doctrine) in the law of evidence and the rule of confidentiality established in professional ethics. The attorney-client privilege applies in

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judicial and other proceedings in which a lawyer may be called as a witness or otherwise required to produce evidence concerning a client. The rule of client-lawyer confidentiality applies in situations other than those where evidence is sought from the lawyer through compulsion of law. The requirement of maintaining confidentiality of information relating to representation applies to government lawyers who may disagree with the policy goals that their representation is designed to advance. AUTHORIZED DISCLOSURE A lawyer is impliedly authorized to make disclosures about a client when appropriate in carrying out the representation, except to the extent that the client's instructions or special circumstances limit that authority. In litigation, for example, a lawyer may disclose information by admitting a fact that cannot properly be disputed or in negotiation by making a disclosure that facilitates a satisfactory conclusion. Lawyers in a firm may, in the course of the firm's practice, disclose to each other information relating to a client of the firm, unless the client has instructed that particular information be confined to specified lawyers. DISCLOSURE ADVERSE TO CLIENT The confidentiality rule is subject to limited exceptions. In becoming privy to information about a client, a lawyer may foresee that the client intends serious harm to another person. However, to the extent a lawyer is required or permitted to disclose a client's purposes, the client will be inhibited from revealing facts that would enable the lawyer to counsel against a wrongful course of action. While the public may be protected if full and open communication by the client is encouraged, several situations must be distinguished. First, the lawyer may not counsel or assist a client in conduct that is criminal or fraudulent. Second, the lawyer may have been innocently involved in past conduct by the client that was criminal or fraudulent. Because to "counsel or assist" criminal or fraudulent conduct requires knowing that the conduct is of that character. Third, the lawyer may learn that a client intends prospective conduct that is criminal. It is admittedly difficult for a lawyer to "know" when the criminal intent will actually be carried out, for the client may have a change of mind. The lawyer's exercise of discretion requires consideration of such factors as the nature of the lawyer's relationship with the client and with those who might be injured by the client, the lawyer's own involvement in the transaction, and factors that may extenuate the conduct in question. Where practical the lawyer should seek to persuade the client to take suitable action. In any case, a disclosure adverse to the client's interest should be no greater than the lawyer reasonably believes necessary to the purpose. 37

WITHDRAWAL If the lawyer's services will be used by the client in materially furthering a course of criminal or fraudulent conduct, the lawyer must withdraw, according to most jurisdictions. After withdrawal the lawyer is required to refrain from making disclosure of the client's confidences, except as otherwise provided in rule on confidentiality. Where the client is an organization, the lawyer may be in doubt whether contemplated conduct will actually be carried out by the organization. Where necessary to guide conduct in connection with the rule, the lawyer may make inquiry within the organization.
WAIVERS OF PRIVILEGE

The privilege will be presumed to have been waived if: the privileged communication takes place in the presence of a third party; the client and the attorney neglect or otherwise fail to assert the privilege; the client communicates the privileged information to a third party who is not privileged; or, the client, or anyone legally designated as an agent of the client, implicitly or explicitly agrees to the disclosure. Also, there is no privilege involved in subsequent litigation between co-clients. The ethical duty of confidentiality, covers a much broader range of communication that just the attorney-client privilege. The attorney-client privilege is a rule of evidence, which protects communications between a client and his attorney in a proceeding before a tribunal. On the other hand, the ethical duty of confidentiality forbids lawyers from disclosing confidential information to anyone, not just a tribunal. Keep in mind that the rules and duties of the attorneyclient privilege rules have been developed by courts and legislatures, whereas the ethical duty of confidentiality is actually part of the self-regulating duties of the bar association. The ABA in its Code of Professional Responsibility, divides confidentiality into confidences which is information protected by the attorney-client privilege under law, and secrets which is other information gained in the professional relationship that the client has requested be held inviolate or the disclosure of which would be embarrassing or would be likely to be detrimental to the client. The Model Rule (1.6) is even broader, as it protects information relating to representation of a client. One area that falls outside the privilege involved basic information about the attorney-client relationship per se, such as the identity of the client, the size of the lawyers fee, and even the fact that such a relationship exists. There is one exception when identifying the client would be the same as revealing otherwise-privileged information as well. The leading case in this matter (Baird v. Koerner, 279 F.2d 623 [9th Cir.1960]) a group of taxpayers instructed their attorney to make an anonymous payment of back taxes, ostensibly to help them in any subsequent criminal investigation. The ninth Circuit Court of Appeals ruled that the clients identities were privileged as if their identity was revealed, it would be revealing the privileged 38

information that they owed back taxes. The privilege applies only if the testimony about the client would directly or indirectly by reasonable inference, reveal the contents of a confidential communication. The principal argument for the privilege is that: by silencing the attorney the goals of society are met, and it presumes that without the privilege there could be no candid disclosure between attorney and client, the adversary system could not function nearly as well and societys interest in justice would be diminished. THE CRIME-FRAUD EXCEPTION An important exception to the attorney-client privilege occurs when the client attempts to use the services of an attorney to commit a crime or fraud. This is covered in more detail later in the discussion of Advising a Client of Assisting in Fraud. There have been cases where a person engaged in illegal activities, retains the services of an attorney in order to further his crimes; such as a coyote, one who illegally transports illegal aliens into the United States retaining a lawyer to represent him if (when) he gets caught transporting illegals. The reasoning for this is simply that when such a person approaches an attorney for his service, they are not consulting him for his official capacity as an officer of the court, so no attorney-client relationship is formed. This exception has four requirements: Just the intent to commit a crime by the client is sufficient to create the exception, even if the client does not believe the act to be a criminal act or fraud. The Restatement states that the crime-fraud exception applies only if the client actually accomplishes the wrongful purpose later this approach is rejected by most courts who believe that wrongful intent is enough to create the crime-fraud exception. It must be the intent of the client to commit a crime or fraud, and not that of the attorney even if the attorney has no knowledge of the illicit motive of the client. Conversely, if the attorneys intentions are illegal but that of the client is not criminal or fraudulent, then the crime-fraud exception would not apply. The burden of proof of the exception is the responsibility of that of the party who wants to pierce the attorney-client privilege. It is widely accepted that a prima facie case that will satisfy the judge that the exception would apply is sufficient. Most importantly, this exception only applies to conversations regarding crimes or fraud that will occur in the future. Discussions about past crimes/fraud remain under the attorney-client privilege umbrella. Incidentally, the time line starts when the client first communicates with the attorney, not when they assert the privilege.

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PRECEDENCE OF PROTECTING THE GUILTY OVER CONVICTING THE GUILTY A legitimate question raised by the American public is whether the criminal justice system should continue to put the protection of guilty defendants ahead of convicting the guilty. Yet, no one should forget that the Bill of Rights provides the right to effective legal assistance and the due process of law, and from this right comes social policies that are basic to our justice system and have been for many years. The most important policy is that before a person can be convicted of a crime, the state must prove its case beyond a reasonable doubt. This is, of course, the highest standard of proof. Historically, this became a right because of William Penn, a Quaker who had been imprisoned many times in England for his beliefs, and who fled to American and founded the colony of Pennsylvania. In 1735, a newspaper publisher, John Zenger, was accused of criminal libel because of the publication of articles criticizing the state of New York. Alexander Hamilton represented him and Zenger was exonerated. While these two historical icons were innocent victims, they have little in common with many of the common criminals and mass murders of today. However, the cost of allowing a few guilty people to go free is less costly than those whose rights deserve protection. In actual practice, the services of a public defenders appeal to the public by the fact that most of their clients are poor, with little education and have never had a chance in life and the attorney is the only person who is on their side outside of family members. The lawyers treat their clients with dignity and respect, but if the attorney does not speak for them, who will? The other side has the power and prestige of the law and legal authority of the District Attorney, police department, and a wide variety of other government offices, while the defendant has only himself and his attorney. Sometimes there is an abuse of the power of the police or the District Attorney, such as prepping a witness before the trial. Police may lie, but when they do it usually is done when they know the person is guilty and they are just trying to help strengthen an otherwise weak case. It is not easy to defend a person that an attorney would prefer not to even be in the same building with, and who may have committed a grievous crime that makes his stomach turn, but once the agreement is made to defend the person, the attorney must block out everything else and do the very best that he can do. There are two sides to every question (sometimes more than two) but it is hard to argue that an attorney is unethical when he represents a person accused of a crime. How does the attorney represent someone that the attorney knows is guilty of a crime? There are several techniques, such as pointing the finger at another person (anybody, if a logical substitute is not available) called the some-other-dude-done-it defense. This is just another way of establishing reasonable doubt. If an attorney knows his client is guilty, he cannot ethically allow that client to take the witness stand to claim that he is innocent, as that would be perjury. That does not stop the

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attorney from establishing a reasonable doubt because, for instance, the circumstantial evidence does not meet the reasonable doubt criteria, and to do so without lying. The real test of the ability and zealousness of the attorney appears in two situations: during cross-examination of a truthful witness; and presenting an argument to the jury that the attorney knows is not true. The cross-examination of a witness is familiar to nearly everyone because of television where actual trials are viewed, and who-knows-how-many legal dramas on TV where the crossexamination changes the whole complexion of a trial (Raymond Burr was particularly effective at this). There actually is no ethical question about this concept as it has been supported by the U.S. Supreme Court who stated: He mustdefend his client whether he is innocent or guilty. They agreed that if an attorney can confuse a witness, truthful or not, or make him appear uncertain or indecisive, that is accepted practice. They further stated that it was permissible to put the states case in the worst possible light regardless if the attorney knows it is truthful or not. The interesting part of this decision was the statement In this respect, as part of our modified adversary system and as part of the duty imposed on the most honorable defense counsel, we countenance or require conduct which in many instances has little, if any, relation to the search for truth. This does not, in any sense, suggest that an attorney can participate in a fraud on the court, but only that the defense lawyer must use all legitimate tools available to test the truth of the prosecutions case, regardless if the witness is known to be telling the truth. Sounds good? But how about crimes against elderly people who are particularly susceptible to thefts, purse snatching and sometimes even sexual assaults and who often make the weakest witnesses? It has not passed unnoticed that defense attorneys seem to always call attention to the memory lapses and jump on the smallest mistake. One technique is to ask so many questions that the elderly witness (as would nearly anyone) becomes confused and has to say I dont know or I dont remember so many times that the jury gets the impression of senility There is an infamous case of a factory fire in 1911, killing over 100 persons, mostly immigrant women who worked under terrible conditions and when the fire started, there was no way that they could escape the flames. One of the survivors of the fire, an immigrant woman who spoke very little English, had been carefully rehearsed over and over again. When the defense attorney cross-examined, he asked the same questions over and over again (in those days this was permissible) and received exactly the same answers each time. By proving that she had memorized her entire testimony, the court ruled in favor of the defendants. Chief Justice Warren Berger checked in on this, asking whether this was going too far. Does the situation change when the attorney knows that his clients are guilty? This brings up the question as to whether a criminal lawyer should be permitted to represent a client by presenting a defense that the attorney knows without a doubt, is false. Whether they should or not, there are techniques used by lawyers to win the case even if it is entirely built on falsehoods.

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A prosecution witness, even an entirely truthful one, can be cross-examined to undermine credibility. The defense attorney may present testimony that, while not false exactly, is used to discredit truthful evidence and/or create a false defense. The lawyer may argue all of this to the jury. Generally, though, when these techniques have been addressed at all, they generally have been approved. Few people can actually find any redeeming social value in allowing attorneys to do these things. It has been proposed that an ethical rule covering this would state that it is improper for an attorney who is completely aware of the undeniable truth (beyond a reasonable doubt) of a fact in the states case, to attempt to refute that fact through evidence or argument. As of this date, no jurisdiction in the United States has adopted such a rule and many maintain that such a rule would undermine the 5th and 6th Amendment principles of due process. Some of the most knowledgeable and respected legal authorities on ethics have openly wondered how the rules of ethics can prohibit perjured testimony on one hand, but yet permit (sometime even requiring) cross-examination of a truthful witness. Many find the crossexamination to be worse than the perjury as, for instance, the lawyer personally adds to the suffering of the victim. Under the guise of testing the truth of the case as presented by the prosecution, the lawyer presents vicious lies to the jury. Still, the lawyer must cross-examine the innocent victim to the fullest extent. Otherwise, the lawyer would be stating, in effect, Dont tell me too much, because if you confess, I can no longer help you. Or, the lawyer could be selectively ignorant of the clients stories. Many (if not most) defense lawyers are convinced that the only way to test reasonable doubt is with the full hammer down. This means that they attack the case as hard as they possibly can, leaving no stone unturned, and fighting all the way to the last breath (and other such euphemisms). And many of them are to be commended and complimented. The annals of bigotry and repression illustrate courageous attorneys fighting the good fight for the poor and oppressed, sometime being ostracized by society and by fellow bar members. But, how about the Colombian drug lords or wealthy mobsters? Or rapists, cop killers or mass murderers? Many law firms have established rules about whom they will represent and under what conditions, such rules show a grasp of legal ethics in most cases. However, they all point out that once they have accepted a client, they have made their decision to do their best whether or not their client is guilty. There are lawyers, many of whom do well financially, who have made their name by getting their clients exonerated through questionable courtroom tactics, vicious crossexamination, or by playing the press or in some situations, playing the race card. So, when a person is accused of a crime, they will want an attorney who does not judge them, or one who will not only go through the motions because the individual is obviously guilty. They will want an attorney who will give their best shot in every case to put the state to its proof. Under the Constitution that is their right and they are entitled to nothing less. Think Johnny Cochran.

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CHAPTER 2 STUDY QUESTIONS 1. The adversarial system is A. contrary to good sense. B. outlawed in the majority of states. C. the best way to establish truth. D. is only used when playing good cop bad cop. 2. Many insist that in addition to (the answer to 1. above), the system also A. protects individual rights even at the expense of the truth. B. corrupts the law. C. creates more lawsuits than is necessary in the dispensing of justice. D. causes great rifts between the attorneys and the judges. 3. According to many lawyers, the concept of legal fiction A. is a non-existent fable. B. chooses justice over truth. C. is the ability of attorneys to retire from law practice to write mystery books. D. was first recognized by the Minister of Information for Saddam Hussein. 4. The separation of the lawyers personal values from those of his client allows the lawyer to be A. disloyal to his client and stay out of jail that way. B. loyal to his client without being responsible for the actions of his client. C. able to bill more hours than actually worked. D. able to blame everything that goes wrong on his client. 5. The last thing that a good lawyer should do is A. judge a client. B. to be too well educated. C. join the American Bar Association. D. pay any attention to stupid ethical rules. 6. The legal system works best when parties are represented by A. inferior attorneys. B. lawyers from the Ivy League schools. C. lawyers from non-Ivy League schools. D. zealous advocates.

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7. For those who abuse the adversary system, sanctions may be imposed by A. county courts. B. federal courts. C. local bar associations. D. parish priests for Catholics. 8. The attorney-client privilege prevents lawyers from offering evidence in legal proceedings, but ethical mandates of a bar association A. prevents lawyers from offering evidence in the courtrooms only. B. ignore confidentiality in all of its ramifications. C. have no weight among attorneys or bar associations. D. enjoins lawyers from revealing confidential information from anyone to anyone, in or out of the courtroom. 9. The principal argument for privileged information is that by silencing the attorney, the goals of society are met, as without the privilege A. attorneys can charge much higher fees. B. lawyers would not be allowed to lie in court. C. there could be no candid disclosure between attorney and client. D. criminals would never be found not guilty in criminal cases. 10. Jose is a coyote who brings illegal immigrants across the Southern border into the U.S. He approaches lawyer Bill and asks that he represent him in court anytime that he gets caught by the Border Patrol. This conversation A. is protected by the attorney-client privilege. B. is protected by the attorney-client privilege only if Jose speaks English. C. is not protected by the attorney-client privilege. D. is not protected by the attorney-client privilege only during the first and second conversations. ANSWERS TO CHAPTER 2 STUDY QUESTIONS
1C 2A 3B 4B 5A 6D 7B 8D 9C 10C

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CHAPTER THREE DISCOVERY & ATTORNEY-CLIENT RELATIONS


DISCOVERY The battleground for zealous advocacy in civil cases is in discovery, which is the pre-trial process of gathering information and appropriate documents, which spell out, pretty much, the case of the other side. Most lawyers agree that during the discovery phase, cases are won or lost. Since the greatest majority of civil cases are settled, this information that is turned over to the other side is absolutely critical to the outcome. The discovery battle is waged often by attrition the side that is the strongest (financially or factually, or both) will wear down their weaker opponents. The actual exchange of material is usually insignificant the delays and requests are what are important. Generally, in these situations, big law firms with deep pockets with clients with as deep, if not deeper, pockets, are the contestants in the battle of zealous representation. Many fights during discovery concern interrogatories written questions from one side to the other about the details of the case, the parties involved, and the evidence, motions and documents (or demands for documents, and depositions. Generally, both parties are entitled to the discovery of admissible evidence pertaining to the case. Too many times, though, tactics of delay, denial obfuscation, etc., including refusing to comply and even destroy important pertinent documents, are used. Even personal attacks on the opponents are used at times. In a well-publicized case, in 1994 a USAir flight crashed in North Carolina, killing 37 of 52 passengers many soldiers on leave and their spouses taking advantage of special July 4th airfares. It took three years before the lawsuits from this crash saw the light of day in a courtroom, because of the attorney for USAir who fought the discovery of documents all the way to the Supreme Court, who lost but who bought valuable time by delaying the trial. The trial judge (federal) was not happy and rebuked and fined the attorney and even called for a FBI inquiry into possible witness tampering. He really got his dander up when he learned that there was an organized personal attack on the character of the plaintiffs expert witness, a Northwest Airline pilot. Sometimes during the discovery phase, documents are destroyed, and if the truth is obfuscated in addition to the destruction, there are no arguments that can justify such actions. After hearing a case involving a cleaning solvent and where the defendants attorneys had not provided testing results key to the case in the documents provided to the plaintiff, Judge Gladys Kessler raked the defendants attorneys over the coals, particularly since they tried to blame the error on a paralegal. The Judge stated that discovery is not just a game where all that counts is the ultimate score no matter how unethically the players behaved. The chemical giant, Du Pont was in trouble in three states, being charged that its fungicide (Benlate) was tainted with herbicide and the company and its lawyers concealed test information that would have proven this. The attorneys and the company suffered in this instance, as the 45

judge found that the company and the law firm colluded to misrepresent the test results. Du Pont and the legal firm were fined jointly with a $114 million penalty, but the judge would forgive $100 million if the company would publish ads in major newspapers around the country admitting that they had done wrong. Showing a strong will or a lack of good sense, the company refused the offer and appealed. The appeal (federal appeals court) reversed the decision, but based the reversal on the fact that there were more due process rights required because Du Pont and its attorneys may very well have engaged in criminal acts. He assumed that the U.S. Attorney would consider a criminal investigation of both the company and the law firm. One may rightfully ask, Why do some lawyers think that they can get away with hiding documents, then lie about it and still get away with it? The answer is simply that the adversary theorum is being abused to the point to where attorneys think that they can do anything as long as it is on behalf of their clients if is not clearly illegal. Even if they are caught, chances are that nothing will be done so it is worth the risk. This attitude is due in a large part to changes in law practice in the United States over the past 20-odd years where Americas largest and most powerful law firms have grown in size and in strength. As with most other businesses, the larger they get, the more arrogant they become and discovery abuses are hidden in their vaults, safe from prying eyes of others, particular the general public. Unfortunately, it is apparent that the larger the law firms become, the less they govern themselves from the basic professional ethics, which is supposed to provide their guidance. As typical with most businesses and other professions, legal firms that worked solely in corporate matters added litigation departments in order to become full-service firms, much like Accounting firms who added management consultation departments. Then, just as in the accounting profession, when the recession hit, these firms with huge overheads found themselves desperate to keep their clients. Their large clients were able to pressure their law firms to go to any length to keep their business. Again, there is a notable similarity to the accounting profession as the audit firms started providing management expertise in an effort to keep their clients, and they were often pressured into audits for the purpose of inflating the stock by the clients think Enron, WorldCom and others. As the law firms grew, so did their concentration of power and many feel that this was the death of the law as a profession. (Another parallel with the accounting profession.) Many law firms used discovery as a profit center instead of just being a means to an end. There is a reported incident made public at this time, of a senior corporate attorney who wanted to move back into private practice and who offered to provide the law firm with skills in settling cases, thereby avoiding years of discovery in some instances. The partner explained that this was a terrible idea, as it would interfere with the firms primary source of profit - that of the discovery battle. (Again, similar to the accounting profession that offered management consultation, and fought going back to the basic audit business, as the principal source of their profit had become the management consulting.) An interesting ethical problem arose as the law firms grew. Under the typical rules, each client that hired an attorney hired the entire legal firm, so as firms grew and spread out, the possibilities of representing clients whose interests conflict grew. Ethics rules universally state that a law firm cannot represent conflicting clients without the permission of the clients. As

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expected, this hardly slows down the large firm as they pressure their clients for consent and they lobby their bar associations for exceptions. Hence exceptions for corporate deal making, estate planning, entertainment law and just about any other area of law in which the firm specializes. To the credit of the American Bar Association, in the mid-80s they studied the problem of whether a law firm could survive as a profession, instead of a business. They issued a report by the Professional Committee, stating that there were several reasons as to why professionalism was declining among law firms. No surprise, but they listed such things as the perceived excesses of the adversarial process, the changing of the profession of law to that of a business, and the change in the traditional concept of lawyers serving the public good. While their reporting certainly was accurate, there was little offered in the way of changing the situation. A recent chairman of the ABAs Ethics Committee, who has often and frequently spoke out against the loss of professionalism and the increase in tough tactics, announced that the typical law firm has changed from a collegial collection of dedicated professionals to a business enterprise that has lost its soul. A legal ethics professor at a western university, stated, Practitioners see discovery as a part of, not an exception to, the adversary system. Tendentious, narrow, and literal positions with regard to discovery are, in my opinion, both typical and expected. (Tendentious is synonymous with biased, in case you were wondering.) Many state, local and federal court rules require that lawyers may not unlawfully obstruct another partys access to evidence or unlawfully alter, destroy or conceal anything having potential evidentiary value (or words to that effect). Unfortunately, this rather general language cannot cover every type of discovery abuse and so have little deleterious effect on attorneys who know that the chances of getting caught are slim. In the early (1970) ABA Model Code, one of the canons was A Lawyer Should Represent a Client Zealously Within the Bounds of the Law. The word zealous or zeal is mentioned often in the code, usually to suggest that attorneys should act zealously. But when the rules were rewritten in 1983, zeal is rarely mentioned, most of the time to warn lawyers that they should balance zeal with other duties. Comments on the 1983 Code states that a lawyer is not bound to press for every advantage that might be realized for a client. The result has been that many lawyers and law firms have developed civility codes that define acceptable attorney behavior, but these codes are merely definitive and not mandatory. It seems that the only result of this is that some attorneys now feel better about themselves. Besides, there are no rules that say that an attorney cannot be a jerk. The best result would be for the courts to use the power of sanctions in cases of violations of civility. This seems to have little effect in those few instances when sanctions are used, as the large law firms simply consider it as the cost of doing business. LEGAL TACTICS USED DURING DISCOVERY To most lawyers, the obfuscation, lying or overt destruction of documents is probably the worse thing that a lawyer could do. To other lawyers, though, that is just the beginning, and can be followed by personal attacks. 47

Most people have heard of the Dalkon Shield case, involving A.H. Robins Company, where the company was sued because the intrauterine device caused some women to die or become very ill, it also caused children to be born with serious birth defects, plus innumerable miscarriages. In addition, many women who wore this device would never be able to have children. For nearly twenty (!) years, Robins attorneys fought a war against the tens of thousands (!!) women who complained and filed against the company. Discovery was ordered in the mid 1970s, and in 1984 a Federal Magistrate wrote, an impenetrable wall has been erected around the A.H. Robins Company. Even though a federal judge issued an order barring the destruction of any Dalkon Shieldrelated documents, one attorney (as an example) who represented Robins in over 100 claims, had documents shipped to his home and then he destroyed the documents shortly thereafter. But the worse is yet to come the attorneys for Robins attacked ferociously any woman who sued by destructive person attacks on the women themselves. There are many examples of their grilling that would turn your stomach, such as when a woman who lost her ovaries and uterus because of the shield, was examined as to her personal sexual relations before she was married more than ten years previously. Questions as to the kind of material used in the crotch of their pantyhose, whether the woman had oral or anal intercourse or used marital aids, and how often, were flung here and there. Needless to say, the federal Judge was irate and attacked the CEO of Robins, the chief of research and development and the general counsel in the courtroom. One statement was particularly telling: You introduced issues that had no relationship whatsoever to the fact that you planted in the bodies of these women instruments of death. The personal attack technique is not unique, as witnessed by the creation of the Strategic Lawsuit Against Public Participation (SLAPP) by a sociology professor and a law professor at the University of Denver. These lawsuits are designed to intimidate people from seeking their day in court or requesting relief from a government agency. It can even be used against people who just protect and make public statements about their concerns. Brings to mind what some would do years ago if they were unhappy with their automobile purchase they would paint a lemon on the side, with a painted statement such as I bought this lemon from Ed Jones Fleet mobile. Actually, the SLAPP suit was designed only for filing by those with deep pockets and who may be seeking large awards against those who have limited funds. They are expensive to defend and they charge defamation or business interference (what happened to fee speech rights?). These suits nearly always had little or no merit, but that is the key while a vast majority do fail, the damage has already been done because of time and money spent by the defendants not to mention the chilling effect on free speech of the defendants Many SLAPP suits indicate that the plaintiff is willing to drop the suit if the defendants apologize and retract everything. Special real estate projects with emphasis on those that use land to build on or dump waste on are frequently the target of SLAPP suits. Even the U.S. government, as well as state and

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local governments has been the subject of SLAPP suits. One more publicized SLAPP suit was when General Motors sued Ralph Nader and the Center for Auto Safety (a Consumers Union group) through an outside attorney who had accused GM trucks with side-mounted fuel tanks as being dangerous and GM knew it. By suing under the name of one of the attorneys, GM was technically not a principal; therefore, documents held by GM could not be discovered. The case was eventually settled after a long war of attrition when the insurance company whom had written policies for both sides. However, Nader and friends found themselves with legal fees of $700,000. Many states have enacted legislation to protect the victims of SLAPP suits. Interestingly, the professors who designed the SLAPP suit drafted model legislation adopted by some of the states. What hath God wrought? BILLABLE HOURS Billing clients for hours spent on their legal problem, it would be safe to say, is scandalous with some firms. With a large firm, a new attorney is assigned (officially or unofficially) a person to show them the ropes. A new associate often has a very difficult time meeting the billable hours requirement of the larger firm. They are taught (or pick it up by themselves) how to bill for any and for all the time spent on a case even time in the shower in the morning as, after all, they are thinking about the problems of the client. Some firms actually hold billing seminars for new associates and to refresh the memory of other members of the firm. Advice from the master billers is offered such as billing in uneven increments as clients get suspicious if it is always even and exact hours (billing 3.1 hours instead of 3 hours, for instance). Billing for a court document is routinely half-hour, even though it comes off a computer in 5 minutes. It turns into almost a game of what the client will pay and what the firm can get away with billing. Bad ethics are often taught by example. The system of billing by the hour billable hours started as a method of justifying legal fees to clients. For years, the bills only stated the name of the case and the hours worked, and clients just usually paid the amount with no questions asked. Some state bar associations were touting a fixed type of billing for some legal services. The U.S. Supreme Court outlawed that practice, however, as it violated antitrust laws. In respect to ridiculous billing tactics, one of the best known was the case of Webster Hubbell, a partner at the Rose Law firm in Little Rock and also the former chairman of the Arkansas Bar Ethics Committee. Hubbell went from number three in the Clintons Justice Department, to jail (Do Not Pass Go). He was convicted of the theft of $394,000 from his client for time that he never worked. He also claimed many personal expenses as business expenses such as purchases at Victorias Secrets and a fur salon. Leaving this with no further comment, attorneys are rarely punished for overbilling.

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Another attorney was indicted in federal court on 16 counts of billing fraud. In one year, he billed a total of 13,000 hours (yes, there is only 8,760 hours in most years) oh, that was for 13 months Believe it or not, there was a hung jury. His defense was that everyone does it. Actually, overbilling has been called the perfect crime, as it is very hard to detect. Besides, many attorneys would ignore overbilling by their colleagues. The ABA has spoken, logically and clearly on this matter, and it is their opinion that is it strictly unethical for a lawyer to charge a total of more than one hour for an hours time, unless the client agrees. While this seems simple and straightforward, there are ways to avoid this opinion. One way is simply to adopt the practice of many long-distance telephone companies charge a full hour for any part of an hour in which work is done. With a large firm, this can really add up. Many overhead expenses are charged to clients, such as computer time, telephone calls, faxing and copying documents, and sometimes, just secretarial help. The ABA says that a law firm is required to pass on any savings to its clients. How often this really happens is open for conjecture. About 10 percent of American lawyers work for non-legal companies as in-house counsels. They are actually both an attorney providing legal services, and an employee. They more closely compare to a non-legal employee as they are on salaries and bonus, have the same employee benefits as other employees, are susceptible to stock options and promotions as an employee, all determined by the employer. Besides, they cannot fire a client without losing their job. The earlier-mentioned case of A.H. Robins and the activities of its attorneys point out the problem facing such in-house attorneys dramatically. One of these in-house attorneys, Roger Tuttle, was ordered by the chief counsel to oversee the destruction of documents, considered as troublesome. These documents pointed to the dangers of the Dalkon Shield and the early knowledge of Robins as to these dangers. Tuttle could not bring himself to do this, so subordinates were given this job and they burned hundreds of important documents. If these documents had been made public, there is no doubt that tens of thousands of women still wearing the shield would have been warned of the dangers, remove the shield before more damage was done, and, of course, sue the pants off Robins! At Tuttles deposition, he was asked as to what he had done to warn any of these women, to which he replied, Nothing. There was no disclosure made to the FDA or to a group of doctors who were then evaluating the IUD. True, there was no outstanding discovery order for these specific documents, but Tuttle assumed full responsibility for the destruction of the documents. Why, one may ask, would an obvious very ethical person, do such deeds with hideous consequences. His answer was simply that he did not have the courage to fight the employer as he had a wife and two young children. Interesting sidelight Tuttle did not destroy all of the documents. He saved the most damaging of the documents and hid them in his home, turning them over at his deposition. A few months later, the Dalkon Shield cases were settled, in large part to the action of Tuttle. Tuttle left the company to teach law and legal ethics at Oral Roberts University in Tulsa.

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DIVISION OF FEE

A division of fee is a single billing to a client covering the fee of 2 or more lawyers who are not in the same firm. A division of fee facilitates association of more than 1 lawyer in a matter in which neither alone could serve the client as well, and most often is used when the fee is contingent and the division is between a referring lawyer and a trial specialist.
DISPUTES OVER FEES

Since the fee arbitration rule has been established by the bar to provide a procedure for resolution of fee disputes, the lawyer should conscientiously consider submitting to it. Where law prescribes a procedure for determining a lawyers fee, for example, in representation of an executor or administrator, a class, or a person entitled to a reasonable fee as part of the measure of damages, the lawyer entitled to such a fee and a lawyer representing another party concerned with the fee should comply with the prescribed procedure.
REFERRAL FEES AND PRACTICES

In determining if a co-counsel relationship exists, the court should look to see if the lawyers have established a special partnership agreement for the purpose of the specific case or matter. If such an agreement does exist, it must provide for a sharing of services or responsibility and the fee division is based upon a division of the services to be rendered or the responsibility assumed. It is contemplated that a co-counsel situation would exist where a division of responsibility is based upon, but not limited to, the following: (a) based upon geographic considerations, the lawyers agree to divide the legal work, responsibility, and representation in a convenient fashion. Such a situation would occur when different aspects of a case must be handled in different locations; (b) where the lawyers agree to divide the legal work and representation based upon their particular expertise in the substantive areas of law involved in the litigation; or (c) where the lawyers agree to divide the legal work and representation along established lines of division, such as liability and damages, causation and damages, or other similar factors.

ATTORNEY-CLIENT RELATIONSHIP FOR ORGANIZATIONAL CLIENTS In the case discussed previously, the Robins attorneys fought hard to prevent Tuttle from testifying on the theory that since he had been an attorney for Robins, he could not say anything about the document destruction because of his attorney-client relationship with his former employer. This theory is that a corporation has the same right to rely on the attorney-client privilege and the lawyer should therefore, keep confidential as to what the corporation tells its lawyer just as in the cases where there is communication between an individual and his attorney.

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Corporations consider this as vitally important because internal communications were made to its lawyers. Therefore, there could be a very wide range of things that could be shielded by this relationship. However, the idea of a personal right to speak to an attorney in the strictest of confidence does not fit the corporate model very well. Information provided to an in-house attorney comes from individuals (not from a fictitious, artificial, invisible, intangible entity, as corporations are often called); but still, the corporation would have to hold the right of confidentiality. The fundamental principle of representing an organization is that the professional obligations apply to the organization as an entity into itself, and not to any of its officers, directors or employees. Following this principle, if the President of a corporation tells the attorney in confidence that he has stolen funds from the corporation, the counsel must tell the Directors. This is delicate, as the President could have been telling the attorney of his actions because he believed he had attorney-client privilege. ABA MODEL RULE 1.13(D) ABA Model Rule 1.13(d) states: In dealing with an organizations directors, officers, employees, members, shareholders or other constituents, a lawyer shall explain the identify of the client when it is apparent that the organizations interests are adverse to those of the constituents with whom the lawyer is dealing. Courts, on the other hand, traditionally have used two approaches in identifying the client for purposes of the attorney privilege. One approach allows the privilege only to conversations between the corporations lawyer and members of senior management. The other approach takes a 5-part test approach: The attorney-client privilege is applicable to an employees communication if (1) the communication was made for the purpose of securing legal advice; (2) the employee making the communication did so at the direction of his corporate superior; (3) the superior made the request so that the corporation could secure legal advice; (4) the subject matter of the communication is within the scope of the employees corporate duties; and (5) the communication is not disseminated beyond those persons who, because of the corporate structure, need to know its contents. We note, moreover, that the corporation has the burden of showing that the communication in issue meets all of the above requirements. (Harper & Row Publishers v. Decker). When one of the constituents of an organizational client communicates with the organization's lawyer in that person's organizational capacity, the communication is protected. Thus, by way of example, if an organizational client requests its lawyer to investigate allegations of wrongdoing, interviews made in the course of that investigation between the lawyer and the client's employees or other constituents are covered. This does not mean, however, that constituents of an organizational client are the clients of the lawyer. The lawyer may not disclose to such constituents information relating to the representation except for disclosures explicitly or impliedly authorized by the organizational client in order to carry out the representation. 52

When constituents of the organization make decisions for it, the decisions ordinarily must be accepted by the lawyer even if their utility or prudence is doubtful. Decisions concerning policy and operations, including ones entailing serious risk, are not as such in the lawyer's province. However, different considerations arise when the lawyer knows that the organization may be substantially injured by action of a constituent that is in violation of law. In such a circumstance, it may be reasonably necessary for the lawyer to ask the constituent to reconsider the matter. If that fails, or if the matter is of sufficient seriousness and importance to the organization, it may be reasonably necessary for the lawyer to take steps to have the matter reviewed by a higher authority in the organization. Clear justification should exist for seeking review over the head of the constituent normally responsible for it. The stated policy of the organization may define circumstances and prescribe channels for such review, and a lawyer should encourage the formulation of such a policy. Even in the absence of organization policy, however, the lawyer may have an obligation to refer a matter to higher authority, depending on the seriousness of the matter and whether the constituent in question has apparent motives to act at variance with the organization's interest. Review by the chief executive officer or by the board of directors may be required when the matter is of importance commensurate with their authority. At some point it may be useful or essential to obtain an independent legal opinion. In an extreme case, it may be reasonably necessary for the lawyer to refer the matter to the organization's highest authority. Ordinarily, that is the board of directors or similar governing body. However, applicable law may prescribe that under certain conditions highest authority reposes elsewhere; for example, in the independent directors of a corporation. UPJOHN V. UNITED STATES The Upjohn case is sufficiently important in discussions of attorney-client (corporate) privilege to be studied in some detail. This case appeared before the Supreme Court of the United States in 1981 (449 U.S. 383, 386-92, 394-96). Upjohn is a pharmaceutical manufacturer and auditors discovered that one of its subsidiaries had made illegal payments to foreign officials in return for government business. The General Counsel (Gerard Thomas) began an internal investigation which involved interviewing and having questionnaires completed by employees. As a result, in 1976, Upjohn voluntarily reported the illegal payments to the Securities and Exchange Commission (SEC) and the Internal Revenue Service (IRS). The IRS conducted its own investigation and demanded that Upjohn produce the questionnaires and interview notes where Thomas had interviewed employees. Upjohn refused this request based upon attorney-client privilege. The District Court rejected the claim of privilege. The Sixth Circuit Court of Appeals agreed with the District Court and remanded for determination as to who was in Upjohns control group. Upjohn appealed to the U.S. Supreme Court. Judge Rehnquist delivered the opinion of the Court: We granted certiorari in this case to address important questions concerning the scope of the attorney-client privilege in the corporate context. With respect to the privilege question the 53

parties and various amici have described out task as one of choosing between two tests which have gained adherents in the courts of appeals. We are acutely aware, however, that we sit to decide concrete cases and not abstract propositions of law. We decline to lay down a broad rule or series of rules to govern all conceivable future questions in this area, even were we able to do so. We can, and do, however, conclude that the attorney-client privilege protects the communications involved in this case from compelled disclosure It is relatively easy to understand the position of the other courts, and even the Supreme Courts opinion declined to address the questions raised in this area. The Appeals Court stated that the government was free to question the employees who communicated with Thomas and outside counsel and further, Upjohn supplied the IRS with a list of such employees (and interviewed 25 employees on the list). They questioned as to why it would not be convenient for the Government to subpoena the questionnaires and notes taken by the attorneys as these considerations of convenience do not overcome the policies of the attorney-client privilege. Justice Jackson, in Hickman v. Taylor, 329 U.S. at 516, stated, Discovery was hardly intended to enable a learned profession to perform its functions on wits borrowed from the adversary. In 1963, a federal judge in Chicago ruled that corporations were NOT entitled to hold a privilege that was historically and fundamentally personal in nature, as it was something that could only be claimed by natural individuals. (This is called the Radiant Burners case.) This ruling was overturned by the federal appeals court that stated that the privilege would never be available to allow a corporation to funnel its papers and documents into the hands of its lawyers for custodial purposes and thereby avoiding disclosure. Unfortunately, this appeals court judge has been proven wrong. To add fuel to the furnace, the Supreme Court refused to review this opinion, thereby opening the doors for corporations to hide their secrets under the guise of attorney-client privilege. Enter the suits involving the tobacco industry. This shield was widely and successfully used when the tobacco companies denied the public access to company-held information on the addictive properties and the health risks of smoking while they were holding fast to their declarations that no one had ever proven these dangers. For many years, the tobacco companies won the war of attrition over every piece of discovery by not spending all of the companies money, but making those attacking them spend all of theirs. In addition, and more importantly, not only did the tobacco companies manage to outspend its opponents, they placed all damaging documents, in particular research documentation, under this attorney-client privilege. As far back as 1979, in-house attorneys were warning the tobacco companies that sensitive documents should be prepared in anticipation of litigation, and one company attorney recommended routing all research projects through the legal department of the company, thereby making all the information confidential attorney-client communication, which allowed the company to argue that the entire project was protected from disclosure. Attorneys were often given the authority of hiring and firing scientific employees, and determining research projects to be pursued. In 1992, a judge in New Jersey quoted such a special projects unit established by lawyers, as an industry shield a front. Some company representatives acknowledged that if they did not like the project or were afraid of some

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consequences down the line, it was turned over to the attorneys Council for Tobacco Research which was set up for this purpose. They admitted that they wanted to protect it under the attorneys and did not want the information out in the open. Five years later, a Minnesota judge ordered the public release of 865 tobacco company documents that the company had tried to hide under the attorney-client privilege blanket. The judge charged the tobacco industry with a conspiracy of silence and suppression of scientific research. The Supreme Court refused to reverse the judges order, and the House Commerce Committee released 39,000 secret tobacco company documents. The floodgates were now wide open. The New York State Attorney General dissolved the non-profit status of the Council, declaring it was a fraudulent tobacco front. Shortly thereafter, the tobacco defendants settled the Minnesota case for $6.6 billion. The rest of the tobacco story is history. Now comes the hard part. What should an attorney do about telling the truth about a dangerous product developed by his company? The answer to this question according to the ABA model rules is that an in-house corporate counsel has much less leeway to prevent their employers from hurting the public than criminal defense lawyers have to stop a client about the commission of a dangerous crime. The rules in respect to individual clients allows an attorney to be released from confidentiality requirements when the lawyer believes that it is necessary to reveal information in order to prevent a client from committing a crime likely to result in imminent death or substantial bodily harm. Conversely, if an attorney believes the company is violating the law in a way that could cause substantial injury to the organization, counsel shall proceed as is reasonably necessary in the best interest of the organization. A well-known case involved the Pinto automobile, manufactured by Ford. Ford elected to pay the burn victims and the families of those that died because of the defect in fuel lines and gas tanks of the car. A jury awarded one individual who had been badly burned at age 13 because of this problem with the Pinto, $125 million in punitive damages alone. The punitive damages were awarded because evidence pointed to the fact that Ford Motor Company was aware of this problem. The question arose, outside of any duty that Fords engineers and executives might have had to reveal this problem to the public, to the obligation of Fords and in-house counsel. Legal scholars have concluded that once the lawyers failed to convince Ford Motor Company to change its decisions, they should have alerted the public to the menace of the Pinto. One may ask why the lawyers, rather than other responsible executives or scientists? The answer to that question is: "With who does the buck stop?" It has been said that the ABA rules would have allowed for preventative whistle blowing on the defective car, but this is a difficult argument because the rule requires that a criminal act be prevented and further, the act must result in imminent death or bodily harm.

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When a company produces and sells a product that is dangerous to the public, there must be others in the Corporation with knowledge of the product, such as company scientists, designers, and senior executives. They all have the ability to convince the company of the problem and to stop it by blowing the whistle if necessary. Most modern corporations have internal auditors whose job includes doing an honest evaluation of the dangers of the company projects. Unfortunately, many auditors are merely middle management with the title of ethics officer and they have little power to convince higher executives to change their ways of doing business. If the auditors are not also the ethics officers, they usually report to a separate ethics officer who almost always is an attorney in the corporate law department. That makes the report of wrongdoing privileged information according to many. Many corporations faced very stringent government oversight and with many industries, they must file compliance certificates affirming that there are no violations of the law. If the company violates the government regulations, they are subject to civil lawsuits and many times, criminal penalties including large fines. The government introduced the Organizational Sentencing Guidelines, which determines exactly how criminal penalties for corporations should be measured. Basically, points are added and penalties increase if there has been previous bad behavior, prior offenses, violations of injunctions, or high level approval of illegal behavior. On the other hand, points can be subtracted if the company can prove good efforts, if they accept responsibility and report their violations; they will then also pay lower fines. These points can be used by the in-house counsel to encourage the employer to disclose their own mistakes, taking the attorney off the hook. As one can expect, this has led to a drastic increase in the number of companies that have ethics officers. Usually the ethics officer is an in-house counsel. Many ethics officers also are compliance officers whose job is to make sure the government regulations have been met. Compliance with regulations is relatively easy, however ethics is another, much tougher, problem. It is accepted that it is part of a lawyers function to advise a client of the cost of moral behavior, therefore an in-house counsel should advise the Corporation that virtue is its own reward. While some executives of the Corporation may be sympathetic to the message, the main thing they really are concerned about (next to the bottom line) is the public image. It is nearly impossible to measure a good public image against the bottom profit line of a Corporation but the corporate counsel might encourage a company to be responsible by using awards and sanctions, such as the threat punishment by the government plus the potential for bad publicity. If the public cares about how Corporation may operate, the Corporation will start paying particular attention. In-house counsels have increasingly assumed central functions in providing basic legal services, selecting and monitoring outside attorneys and attempting to prevent legal problems (usually the principal reason for employment). There are a lot of reasons for in-house attorneys, such as financial savings because their legal counsel is familiar with the organizations structure, employees, records and objectives, and whose efforts and time are strictly for the company. Besides, there is no incentive to bill unnecessary hours.

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Outside counsel is needed for certain situations, usually those that are non-repeating and that require special staffing and expertise, or just for independent judgment. Sometimes an in-house counsel is just too close to the problem to be of much help. How about ethical responsibility? The usual view was that an in-house counsel would not be as able to check corporate misconduct because of the economic and psychological dependence on the company. Lawyers are like other management level employees; they want to keep their dirty linen in-house where it can be handled quietly. While similar pressures are present with outside counsel, many firms spend a lot of time with a single client, and they often maintain that it is easier for them to say no than it is for an in-house counsel. However, these outside lawyers may not be able to exercise the independence they need as they would not have access to inside information and the informal channels of influence that really run large corporations (and some smaller). Still, outside law firms maintain that independence is their single most important asset. They maintain that they can call a spade, a spade and even insult management to make an important point. They maintain that it is highly unlikely that an in-house attorney would report the company President to the Board of Directors for violating the Foreign Corporate Practices Act, as an example. They strongly assert that if you have both loyalties and accountability to the superior, you cannot be independent. However, there is little doubt that staff attorneys worry about their independence as they recognize that they cannot isolate themselves from the rest of the company and still perform the functions for which they were hired. Whistle-blowing is a particular problem, as if the lawyer makes top management aware of a problem that he should have reported to management, then the attorney will find cooperation with those whom he had reported, practically non-existent, making the lawyer lose a lot of his effectiveness. Regardless, in-house counsels maintain that rarely are their situations where the attorney has to compromise professional judgment. In actual practice, it would appear that the in-house counsel will feel that they have discharged their obligations of giving ethical advice by urging executives to take long-term action, as opposed to short-term. Then, once this has been done, the staff attorney are comfortable in stating that they routinely advise their clients to follow the ethical course, and if it is not accepted, then that is the way that business is done and it is not the fault of the attorney. What should an attorney-advisor do if his advice is not heeded? Well, the obvious answer is for him to resign. This might be highly ethical, but it is not practical in the majority of the situations, except when there is a fundamental disagreement in which case any executive in this position should probably start looking for another job. Those fundamental disagreements could be such as fabricating evidence or creating a swindle. Otherwise, lesser disagreements should probably not be enforced with resignation, as it would then appear that the management couldnt function without the invaluable input from the attorney,

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IF A CORPORATE CLIENT REFUSES TO FOLLOW LEGAL ADVICE There is a line of thought that if the disagreement is fundamental and the client refused to follow the advice of the staff attorney, that would indicate that the advice was peremptory and not just an informed suggestion (but a command). When this happens, then the roles are reversed, the advisor is the arbiter and the client is a subordinate. It is doubtful that this transfer of responsibility was contemplated when the attorney-advisor was hired. There are all sorts of ramifications when contemplating a situation where pertinent and important advice is not taken. Hopefully the client will figure out a way to retain such high-minded advisors without creating situations in which they will feel compelled to resign. Then the client will also know that he should not ask for advice in the cases that might put the counsel under that kind of pressure. In actual practice, the duties and job description of professionals, such as attorneys and accountants, as well as some engineers, must be carefully detailed, written and agreed-to. The top management of a successful company will know what he can ask his in-house professionals to do and will develop a relationship with them to that informal discussions could be held without serious implications as to whether outside professional help is necessary. This problem is similar to that of in-house auditors who are CPAs.

CHAPTER 3 STUDY QUESTIONS 1. The battleground for zealous advocacy in civil cases is A. the federal courts. B. trial attorneys offices. C. depositions. D. discovery. 2. Many law firms have developed civility codes that define acceptable attorney behavior, A. and these codes then become mandatory. B. but these codes are only definitive and not mandatory. C. but the practice has since been outlawed. D. because otherwise there are no ethical codes or guidelines for attorneys. 3. The SLAPP (Strategic Lawsuits Against Public Participation) lawsuits were designed to A. intimidate people from seeking their day in court requesting relief from a government agency. B. prevent others from testifying in the Dalkon Shield case. C. train young trial lawyers. D. censure unethical lawyers.

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4. Bad ethics are often A. hereditary. B. caused by bad kharma. C. taught by example. D. encouraged in Ivy League law schools. 5. In respect to client billing, the ABA has spoken clearly and says that it is A. the responsibility of a law firm to make a profit and they can charge when they want. B. the what-the-traffic-will-bear that will determine fees. C. unethical for a lawyer to charge a total of more than one hour for an hours time, unless the client agrees. D. unethical to use computer programs for automatic billing. 6. If a corporation has the same right as an individual to rely on the attorney-client privilege, A. then the lawyer must keep confidential as to what the corporation tells it lawyer. B. then the corporation will have to hire another attorney to protect them against ethical lawyers. C. then they should pay only the fees that individuals pay. D. then the officers of the corporation can legally lie in court. 7. The ABA Model Rule regarding identifying the client for attorney-client purposes, takes two approaches, one of which A. protects conversations between the attorney and any employee in the company. B. allows the privilege only to conversations between the corporations lawyer and members of senior management. C. protects conversations only between the lawyer, his family and the law firm. D. does not provide any attorney-client privilege at all, under any situation. 8. Corporate decisions regarding policy and operations, if they also entail serious risks, A. are part of the in-house attorneys job description. B. are not, as such, within the lawyers province. C. are definitely important to the lawyer who must stop any action he believes is unlawful. D. must be reported by the attorney to the Board of Directors. 9. The rules in respect to individual clients allows an attorney to be released from confidentiality requirements when A. the legal fees are more than 30 days in arrears. B. the attorney wants to, for any reason, personal or otherwise. C. the lawyer believes that it is necessary to reveal information in order to prevent a client from committing a crime likely to result in imminent death or substantial bodily harm. D. he can find a suitable replacement.

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10. If an attorney believes the company for which he is employed, is violating the law in a way that could cause substantial injury to the organization, A. there is nothing that he can do. B. the lawyer must give himself up to the closest police authorities. C. the lawyer must submit his resignation to the local bar association. D. the counsel shall proceed as is reasonably necessary in the best interest of the company. ANSWERS TO CHAPTER 3 STUDY QUESTIONS
1D 2B 3A 4C 5C 6A 7B 8B 9C 10D

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CHAPTER FOUR - WHISTLE-BLOWERS AND PROFESSIONAL MISCONDUCT


WHISTLE-BLOWERS In respect to whistle blowers, many states now have statutes protecting them, which allow the employee to sue the companies for retaliatory discharge for speaking out about corporate concealments or dangerous conduct. However, attorneys are still bound by the attorney client privilege, including the narrow exceptions to the confidentiality rule. Not only is it not clear as to what extent these statutes apply to lawyers, there is another problem: even if lawyers are allowed to leak enough information to protect the public, they cannot sue for retaliatory discharge like other employees if their suit requires them to reveal additional confidential information either to prove they were justified in speaking out, or that speaking out was the reason that they were fired. This is further illustrated by what happened to an in-house attorney for a Texas Corporation who was fired in 1984 because he refused to make false statements in environmental audits and he also advocated stronger corporate environmental cleanups. The attorney went to the federal court that said he had no right to sue for retaliatory discharge. He then went to the state court in Texas and a judge awarded him $500,000. But the Texas Court of Appeals, some twelve years after his termination, told the attorney that he could sue for retaliatory discharge, but only if he could do it without violating his oath of confidentiality to the Corporation. The appeals court found that he could not make his case without revealing confidences and therefore the court reversed the $500,000 award. Other states have made it nearly impossible for attorneys to be protected or allow them to sue for retaliatory discharge, except for the state of New Jersey, who treats in-house lawyers as any other whistle blowing employee. Under Nuclear Regulatory Commission mandates, an employee who becomes aware of certain nuclear safety risks must inform government officials. Engineering Codes of Conduct require disclosure of conditions posing a risk for public health or welfare. The question can be asked: Should similar requirements be applicable for lawyers in those situations, which are likely to involve serious health hazards? Whistle blowing can result in substantial personal costs but also substantial societal benefits. Some experience harassment, isolation and even economic retaliation, not to mention personal pain when disclosing wrongdoing of acquaintances and even in some cases, friends. The whistle-blower is seen as a traitor for exercising a breach of loyalty. To those who take their responsibility to the public seriously and yet has developed a bonding with others involved, and who is aware of their duty to their clients, this conflict is the strongest.

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Regardless, the good that is done by whistle blowing can be huge, while conversely; not reporting can be devastating. Major government scandals have been uncovered because of leaks of confidential information, and environmental disasters have been prevented by such leaks which is, in itself, a form of anonymous whistle blowing. Lawyers have been (and will probably continue to be) criticized severely for failing to protect innocent third parties. These situations are well known, including those involving tobacco, asbestos, automobiles, contraceptives, and savings & loan associations. There should be changes in the bar ethical codes to permit or even encourage whistleblowers, and for several years, the federal government has been passing legislation protecting government employees who disclose abuses, and private employees who report violation of specified safety and environmental standards. A few states also have laws protecting all employees, not just governmental and about half of all of the states have public policy exceptions to employers rights to fire an employee in response to ethical resistance. There still needs to be more protection offered, as even though most courts allow employees to sue for wrongful discharge if they have refused to do an illegal act, this type of protection is not available for employees that have been discharged after aggressively reporting illegalities to management. When lawyers are involved, the court results have varied with several of more publicized decisions not allowing attorneys claims from proceeding to trial. In Herbster v. North American Company for Life and Health Insurance, 501 N.E.2d 343 (Ill. 1986) cert. denied, 484 U.S. 850 (1987) an attorney was fired for refusing to destroy company files as requested by management. The district court granted the insurance companys motion to dismiss on the grounds that the communication alleged in the complaint were confidential and protected by the attorney-client relationship. In another Illinois case, the Illinois Supreme Court rules that wrongful discharge suits were not necessary to encourage lawyer whistle-blowing because professional ethics already compel attorneys to promote the public interest. Other courts have mostly agreed with the whistle-blowers and were based on three theories: 1. Discharges were in violation of public policy; 2. To breach an implied covenant of good faith and fair dealing; or 3. To violate an implicit term of an attorneys employment contract. In one case where an in-house lawyer sued for retaliatory discharge and demotion because the insurance company had punished is resistance to cutting corners and costs in defending policyholders, the jury awarded $1.25 million to the lawyer, later upheld, on the basis that the company should have known that the attorney would be bound by the Code of Professional Responsibility when they hired him. There were also cases in California and in Massachusetts, decided by the Supreme Courts of these states, that a corporate counsel has a right to sue for retaliatory discharges under certain circumstances, which included discharges exposing criminal conduct of violations of clear public policy that could be proved without violating the attorneys obligations of confidentiality.

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Similar issues arise when lawyers report misconduct by fellow lawyers. The Model Rules and the Code mandate such reports, but courts are still divided over whether lawyers who are fired in retaliation for blowing the whistle have a valid claim of wrongful discharge. Comment Self-regulation of the legal profession requires that members of the profession initiate disciplinary investigation when they know of a violation. 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. However, a lawyer should encourage a client to consent to disclosure where prosecution would not substantially prejudice the client's interests. 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. The term "substantial" refers to the seriousness of the possible offense and not the quantum of evidence of which the lawyer is aware. The duty to report professional misconduct does not apply to a lawyer retained to represent a lawyer whose professional conduct is in question. Such a situation is governed by the rules applicable to the client-lawyer relationship. AMBULANCE CHASERS AND OTHER PERSONAL INJURY LAWYERS More lawsuits are filed per capita in the United States than any other country. Personal injury and other such court cases comprise only a small fraction of the total, and less than 10 percent of the civil cases are filed. But these lawsuits have drawn a lot of public and media attention and watching the public spectacle of lawyers swarming around catastrophes (such as airplane crashes) does not help the image of the legal profession. Ambulance-chasers rarely actually chase ambulances now but get their intelligence information from hospital personnel, funeral home directors, and drivers of tow trucks there are all kinds of victim scams. Phony accident victims are much more sophisticated today as evidenced by a 1997 grand jury indicting eight lawyers, two doctors, three medics, and four ambulance chasing people in the employment of the lawyers. They became so brazen that one of the members actually posted a $200 reward for each referral on an on-line bulletin board for paramedics, (which is how they were caught). The Bar Association in that city reacted by saying all personal injury lawyers do it, besides, those arrested were not even small fish but guppies. While there have been volumes of regulations involving personal injury attorneys, covering everything from how they obtain their clients to advertising restrictions, nothing is as tasteless to 63

the general public as the conduct of personal injury lawyers taking advantage of injured people and families at times when they were the most vulnerable. In 1996, the airline crashes involving ValuJet 592 and TWA flight 800, illustrated the very worst of the ambulance chasing personal injury lawyers After the ValuJet D.C.-9, slammed into the Florida Everglades, attorneys by the dozen appeared, many sending brochures to the Miami hotel which housed many of the families of the victims. Some sent flowers and one firm even offered attractive young women to chauffeur the victims families. Lawyers were spotted by members of the press hiding behind potted plants in the hotel lobby - obviously trying to recruit families as clients. The families did not appreciate this, publicly calling the attorneys vultures and stating that they would simply like to get through the funeral without being bothered by the attorneys. One cannot help but appreciate the statement of one reporter who said these lawyers illustrated the meaning of sleaze. One plaintiffs layer from Ohio, on National Public Radio, read the typical letter that he sent to family members of the victims of the TWA crash: Dear Family of (insert the name here) Please accept my deepest condolences for the tragic death of (insert name here) in an air crash. I am sure this must be an extremely difficult time for all of you. I would be pleased to offer any assistance that I can from a legal standpoint, with no obligation for an initial consultation. If you have a few spare minutes, please call me collect so that we might further discuss this matter. Very truly yours, This attorney also illustrated the meaning of ghoulish. This same attorney later appeared on Nightline, and stated: Everybody else in America solicits business without shame so do I. On the other hand, there are those, such as attorney Phil Corboy, well known for being flamboyant and successful, but is perhaps best known for his lawsuit against Johnson and Johnson over contaminated Tylenol capsules. His clients (over 250 in this case, each suing for $1 million or more) consider him sympathetic and understanding. In this case, good deeds did not go unrewarded. AS BAD AS AMBULANCE-CHASERS Offsetting the attorney who is a credit to his profession, are those who overcharge their clients. Recently, a California attorney charged half of a cases value to advise clients about small claims court claims where attorneys are not allowed. He was disciplined twice for this. In the public eye are the attorneys who accept clients who want to sue because of a minor traffic accident fender bender or falling on a slippery or icy sidewalk. Typically they settle these cases for a fraction of the value of the case. These attorneys are known in some circles as friends of the adjusters as insurance adjusters just love these guys.

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One practice that leaves a bad taste in the mouth of the public, and which should be stopped entirely, is for an attorney to charge a fee based on the gross recovery, and then taking expenses out of the clients share. When doctor and hospital bills are involved, this often leaves the client with nothing. In case you have not noticed, there are parts of this country that have large Spanish-speaking citizenry. A favorite of attorneys who do not speak the language is to hire paralegals who do speak Spanish and this si habla espanol is advertised widely. Oftentimes the attorney is sharing fees with these paralegals an ethics violation in every state. There is a well-known attorney from Houston who is one of the most successful personal injury lawyers in the country and who has won awards worth billions of dollars. He has been particularly known for his successes in the breast implant litigations. He was highly regarded by his state bar association until it was learned that he used nonlawyers and a sometimes-suspended associate, to solicit cases out of a USAir crash. He was indicted in South Carolina on misdemeanor counts based on these charges. In Texas, the bar association brought disciplinary action against him for using 8 runners to solicit over a hundred cases. Boy, did they come down hard on him! He received a reprimand, one hundred hours of community service and he had to repay the bar associations expenses in investigating this case. Some attorneys publicly disagreed with this harsh punishment one attorney stating to a newspaper reporter that if the accident victims got the services of a winner attorney, they were better off for it. After all, if the attorney paid a very small amount in order to get a case that awarded the clients a huge settlement, wheres the problem? The U.S. Supreme Court did not agree. They approved a Florida ethics rule that prevents lawyers from soliciting clients within the first thirty days after an accident. This rule was specifically designed to prevent mail solicitations and it went further than banning runners or stopping attorneys from hiding behind plants in a hotel lobby (which have been outlawed by most states by now). Other states are now following suit. The wording used in the Florida bars Rules of Professional Conduct is very explicit, and other states have followed the lead of Florida. There is little doubt that those states that do not have such ethics rules, will soon. The Comments in respect to that portion of the Rules are worth reading: Comment There is a potential for abuse inherent in direct solicitation by a lawyer of prospective clients known to need legal services. It subjects the person to the private importuning of a trained advocate, in a direct interpersonal encounter. A prospective client often feels overwhelmed by the situation giving rise to the need for legal services and may have an impaired capacity for reason, judgment, and protective self-interest. Furthermore, the lawyer seeking the retainer is faced with a conflict stemming from the lawyers own interest, which may color the advice and representation offered the vulnerable prospect. The situation is therefore fraught with the possibility of undue influence, intimidation, and overreaching. This potential for abuse inherent in direct solicitation of prospective clients

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justifies the 30-day restriction, particularly since lawyer advertising permitted under these rules offers an alternative means of communicating necessary information to those who may be in need of legal services. There is another side to this that certainly is worth consideration. Many legal scholars and practicing attorneys, including ethic experts, see a major problem. This rule gives the insurance industry free rein to solicit accident victims themselves, and, as the attorneys maintain, not to represent them but to get cheap settlements or even avoid a lawsuit altogether. While there may be merit to this stand, the question must be asked, What does the public want? The public probably feels better about the Rules as adopted in Florida and other states as in most cases, they probably trust the insurance companies more than they do attorneys particularly since insurance agents (generally) establish a personal relationship with their clientele and in case of a claim, the agent puts a face to the insurance company. Few ordinary people have such a personal relationship with attorneys. INSURANCE LAWYERS Speaking of insurance companies, lawyers for insurance companies may have difficult and unusual ethical problems. Lawyers who defend insurance company clients (insureds) are particularly troubled sometimes. The lawyer is retained by the insurance company who determines how many and which cases to send to the law firm. Under the provisions of most insurance policies, the insurer makes the decision as to settlement and for how much. Lawyers who represent insureds for their insurers are usually retained by the claims manager or one in a similar position, and who gives out the cases to the lawyer. Of course the lawyer and the claims person establish a relationship which generally leads to additional business. Many attorneys depend upon insurance companies for their bread-and-butter business. This would in most cases, be an attorney-client relationship. However, these attorneys are actually paid by the premiums paid by the policyholder that contracted for and expects expert legal representation. Therefore, these policyholders are the clients as they are the ones who are served with process, named as parties in a lawsuit, deposed and sworn as witnesses at a trial, etc. They certainly are entitled to the lawyers loyalty and zealous representation. Even though the attorney has to report to the company as to the action that should be taken in the case, settlement and for how much, etc., most states make it clear that the lawyers primary duty is to the policyholders who are the defendants in the case. But the insurers goal, as a business, is to resolve any case as inexpensively as possible, whereas the goal of the insured is usually to just get the $$#$%@! thing over with so life can return to normal. The attorney is rather in the middle of things here. The American Law Institute (ALI) was formed by legal scholars, judges and attorneys from large firms, so as to give the insurance company a status at least equal to that of the policyholder. They accepted the typical view that an insurance defense lawyer owes a paramount duty to the policyholder, even if the insurer chooses the lawyer. That did not set well with insurance 66

lawyers, so they decided to try to change this by writing articles expressing their views, lobbying ALI members to change to a more pro-insurer viewpoint, and finally, lobbying ALI members at an annual meeting of the organization. This was a wise move on their part as there were only about 10% of the members at the meeting, so they were able to convince this smaller body to change. Therefore, under the ALI posture, policyholders would no longer be considered their primary client. There is obviously an ethics problem here, and it was recognized by other ALI members later who tried to retract their stand. Obviously the rights of the individual victim or policyholder have been sacrificed on the altars where lawyers and insurance companies worship. Also, plaintiffs attorneys and insurance lawyers appear to be operating on what has been called the doctrine of relative filth, if Im not acting as badly as you, then what Im doing is okay. NOW APPEARING BEFORE THE JURY Even though only a small percentage of cases go to trial, the ones that do are most often under public scrutiny. As many (if not most) trial lawyers will acknowledge, their job is not to present the truth in any objective sense, but to present only their clients version of the truth. This is the adversary system, many will pontificate, presenting a version of the clients truth and then letting the jury decide. Trial lawyers are for the most part, actors, and the courtroom is their stage. For instance, experienced trial lawyers readily admit that a little bit of humanity can be a great asset in court. The attorney, who has made a fortune out of breast-implant cases, presents a real down-home presence at trial. This is used by many lawyers, but the experts in the field always warn that if the jury thinks that the lawyer may be putting them on a little, or talking down to them, they will defeat their purpose. The lesson is that lawyers have to be themselves. Many are great storytellers dating back to Abraham Lincoln. This has been developed into an art the lawyer will be able to draw a mental picture of the point that he is trying to make to the jury. This is often called demonstrative evidence and the teachers of this art say that if a client loses a leg in an accident, then get the leg, take it to court and show the jury. Stories about the performance of trial lawyers are legendary. Perhaps one of the better known stories is that of Clarence Darrow (back in the days when smoking was accepted in courtrooms) lighting up a big cigar and started smoking it as the prosecutor made final arguments. The ash on the cigar grew and grew and did not fall off every person in the jury was fixated by the length of the ash. The defendant got off, as the jury never heard the prosecutors closing. The story is that Darrow had placed a long wire in the middle of the cigar to allow the ash to gather. There is a famous story (a favorite of a good trial lawyer) reading a case for wrongful death of the plaintiffs wife. The defense lawyer hired an attractive woman to sit behind the plaintiff

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and make small talk with him during the trial thereby the jury would notice the new relationship of the plaintiff and lose sympathy for his loss which they did. The lengths that attorneys will go to in an effort to establish rapport with a jury or with a particular jury member, are innumerable. They range from flirting with a juror to cleaning up a client and dressing him in a new suit, shirt and tie. An attorney would never allow his client to appear in his jail clothes, which, incidentally, has been approved by the U.S. Supreme Court. These shenanigans are allowed under ethics rules as long as the efforts to sway the jury are indirect. Usually, these techniques simply raise subtle reactions, which may not actually have anything to do with the trial but may have an effect on the jury or a jury member. While the attorneys are not allowed to converse with jury members, this is actually a way that they can get around that rule. Rarely are lawyers sanctioned for unethical behavior during or as the result of a trial, unless there is a very clear violation of ethics rules. There have been instances of where the defendant sat in the galley and a look-alike sat at the defendants table. When witnesses were asked to point out the culprit, inevitably they pointed at the look-alike. These tactics have been used without penalty on occasion, and in one situation, the trial judge fined the attorney $500 for this switch later reduced to $100 by the state Supreme Court. There is a real question as to whether this is misrepresentation and the lawyer should be held in contempt, or whether the lawyer is simply proving his point. Generally, if the misrepresentation is on a minor, or less-than-central point, the judge will often admonish the lawyer and instruct the jury to disregard the inadmissible evidence or in many cases, the judge will do nothing. The attitude of the public on these courtroom antics are most interesting. The authors of The Moral Compass of the American Lawyer conducted a survey on three situations, including two of those mentioned above. Of those attorneys who responded, 92% said that the attorney who hired the attractive woman to sit behind the plaintiff in a wrongful death case acted unethically. On the other hand, 80% of those same lawyers said that a lawyer who put his client in the audience and used a look-alike at the defendants table, acted ethically. The feelings were that the lookalike situation served a specific and legitimate purpose, but the use of the attractive woman served no legitimate purpose whatsoever.
BEHAVIOR OF TRIAL LAWYERS

If there ever was a void in legal ethics, it is in the area of the behavior of trial lawyers (discussed in more detail later). For instance, the whole world is aware that in the O.J. Simpson trial, the race card was played. There is an accusation that Christopher Darden was put on the prosecution team just because he is black. Is this really different than a well-known female defense attorney taking sex crime cases because she knew she would be more effective as a woman in the eyes of the jury? Racial issues are touchy, needless to say, and can cause issues of freedom or speech and religion. Through the trial of former Washington, D.C. mayor Marion Barry, he wore an African kente cloth scarf, an expression of African-American pride. However, in a later trial, a D.C. 68

attorney wore a similar scarf for what he stated were cultural and religious reasons, the judge ordered him to remove it as the judge believed the scarf was an attempt to bias the predominately black jury. Obviously, there is a lack of ethical standards and rules regarding the constitutional rights of religious freedom and the right to a fair trial. A lot of it is just common sense a judge would never allow an attorney to wear a Gestapo uniform in court, for instance. RACISM The playing the race card is one of the most discussed areas of courtroom behavior in modern time. Many times when the defendant is black and the plaintiff is white, this question will be raised if not by the trial attorney then by the news media. If the defendant is black, then a typical tactic is to use peremptory challenges to make sure the jury is largely black and/or female. Are these tactics ethical? The U.S. Supreme Court says it is not if the challenge to a juror is based strictly on race. The problem obviously is that attorneys can find other reasons to challenge other than race, in which case there is little that the court can do. Actually, it is relatively easy to challenge a prospective juror on the basis of race, sex or ethnicity. While many juries are smart enough to see through race-based selection, others are not. Some attorneys want a dumbed down jury if their case is weak, as they can then concentrate their efforts on their emotions rather than their reasoning. However, most juries are smarter than they are given credit for, even though it has been said that really smart people are able to get out of jury duty. Some attorneys say that smart jurors will actually think about reasonable doubt. Therefore prosecutors are not happy with a smart jury if there is any hint of reasonable doubt defense, or a black jury if the defendant is black. But since both sides have the right to challenge prospective jurors, this evens out usually. The leveling factor is that juries just wont buy tactics if they appear to be phony. Judges, also, run their courtrooms in different ways and many just wont put up with any questionable activity whatsoever. The smart attorney is well aware of this. In the theatre of the courtroom, it is vitally important that the intelligence and common sense of jurors determine the outcome. LAWYERS AND LIES It may come as a shock to many, but lawyers are among the least liked people in America (just above used car salesmen, insurance agents and telemarketers) and the principal reason is probably because they are thought of as liars. Talk show hosts and reporters continue to prolong this uncomplimentary view of a noble profession. What must hurt is that law professors and eminent judges share the same view. The reason for this is simply the working of the adversarial theorum. Are attorneys ever justified in lying or in helping a client to lie? To answer that, one must first define terms what, exactly, is lying? It has often been said that it is permissible to lie provided that it does not hurt anyone and does someone some good. What does a married man 69

say when his wife asks him if he likes her new dress? At least some of the times when questions like this are asked, the answer is not exactly the truth. What would happen if the husband stated something like, At least the color of that dress helps to draw attention away from your terrible hair-do? Well! Well-respected students, scholars and law professors admit that perjury exists in nearly every case and not of the little white lie variety. There are, actually, a rather wide variety of lies. There are those who literally did not lie, they simply left an impression that may be misleading. Some lies are ethically permissible, legal, or just a lie of omission because all the facts are not stated. And then there are those lies that are told during negotiations particularly when lawyers are involved, and particularly if the lies are owed to the client because of confidentiality or zealous representation. If an attorney tells the clients lie, does the attorney lie? If the attorney presents what the client states is the truth, even if the attorney has serious doubts that it is actually the way the client sees it is the lawyer then telling the truth? How about in the situations where the opposing counsel has obviously lied, so to compensate for that, the lawyer tells a bigger lie because the opponent acted badly. (That will teach him!) Then, the real head-scratcher, is where the attorney is absolutely positive that his client is innocent, but the only way that he will be exonerated is for his attorney to stretch the truth a little bit. Justice is served justice triumphed the ends justified the means? There are some realistic facts that have a major bearing in some of these lies. It is fair to say that: negotiation is not, never has been and never will be a matter of putting all of the cards on the table. Horse-trading has become a lexicon in the American language does anyone really believe that the horse-traders always told the total truth about their horses they were selling? The proper ethics approach to negotiation should be that the lawyer acts honestly and in good faith and as judge in Louisiana once stated, client avarice and hostility neither control the lawyers conscience nor measure his ethics. While this attitude is probably ethically correct, it is rather strict in actual practice, many attorneys complain. They feel that even the most honest and ethical of the negotiators actively mislead their opponents. The question has arisen as to whether an attorney may lie about whether he is authorized by the client to settle for a particular amount. Many lawyers feel that this is OK, many do not. The ABAs ethics rules states that estimated of price of value and whether a party is amenable to a particular settlement are not ordinarily considered as statements of material fact. Practically speaking, if lawyers had to always tell the truth about their settlement position, there never 70

would be any negotiations. On the other hand, can you imagine anything more material to a party to a case than the value of the case? Some argue that attorneys should stop kidding around, and call a lie, a lie, and they must lie in order to succeed. Once this is admitted, then action can be taken to determine what is justified and what is outside the box. Many lies are justified, even in negotiation, and many are not, but it is too much to ask that all attorneys be candid with each other. It simply is not realistic or even advisable in all cases as long as the adversary theorem remains. Clients have the right to, and lawyers have the duty to provide a lawyer who speaks for them and looks at the case from their point of view. Until such time, if ever, this concept is no longer in existence, lawyers will continue to advocate but with the loss of some candor.
THE KODAK-BERKEY CASE

A case involving Kodak provides an illustration as to how this can happen: In 1977, a young lawyer (Joe) had climbed to become a senior associate with a large New York law firm and was working on an anti-trust case that Kodak was defending against Berkey Photo. Kodak was the firms largest client with 20 full-time attorneys of the law firm working on their case and was gross billed for around $4 million a year. The young attorney was working with one of the senior partners on this case, Mahlon. In April, the lawyer for Berkey Photo, Alvin Stein, was questioning a Kodak expert witness, a college professor, about files and other materials the professor had received from Kodak in order to prepare his testimony (this was during the discovery phase). The professor told Stein he had shipped all of the materials in question to the law firm earlier that year. Stein then asked Mahlon where they were, and was told that they had been thrown out. This was a lie as he had saved all of the documents in a suitcase, even taking them back and forth between his office and a special office leased near the courthouse for the trial. Young Joe knew that his boss was lying because he had worked with the suitcase full of documents. Two weeks later, Mahlon filed an (false) sworn statement to the court that the documents had been destroyed. In January of 1978, it all fell apart when Stein, at the end of the Kodak-Berkey trial, asked the professor about any reports that had been submitted to Kodaks lawyers prior to the trial. This led to more questions about what material had been used by the professor in preparing his testimony. On the Sunday night before the last week of the trial, a frightened Mahlon broke down and told Kodaks lead lawyer that he had never destroyed the documents but had hid them in his office. Mahlon told the judge the next day and then resigned from the firm. Stein used the withholding of documents to help convince the jury of Kodaks bad faith and guilt, and Kodak lost the case to the tune of $113 million (later reduced to $87 million). Kodak fired the law firm

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and Mahlon was convicted of contempt of court for his perjury and sentenced to a month in prison. How about poor old Joe? The Code of Professional Responsibility in force at that time required that a lawyer who receives information clearly establishing that a person other than his client has perpetrated a fraud upon a tribunal shall promptly reveal the fraud to the tribunal. The code also required that a lawyer who knows that another lawyer has engaged in dishonesty, deceit, or misrepresentation must report the offending lawyer to proper prosecutorial authorities. Joe should have spoken up. Perhaps in an attempt to help Joe, Mahlon told federal prosecutors investigating the case later, that Joe and whispered in his ear and reminded him of the existence of the documents the first time that Stein had asked about them. Joe denies this. But what is really relevant, is that Joe never said a word to the judge about the big lie, as he was obligated to do, or to even another partner in his law firm. So, what was done? Throw the book at him? Hardly. Law firms teach young associates that they are apprentices to the partners, not whistle blowers. In a way, this makes sense, as Joe would have held the senior partner in the highest regard and was, of course, intimidated. Actually, Joe saw his boss lie and did not know what to do about it. Everybody loved Mahlon. To the credit of his law firm, they hired a personal attorney for Joe in case he needed it in the Mahlon case or for future bar disciplinary action. Federal prosecutors said that there was no evidence of criminal misconduct on Joes part. The law firm kept Joe on and for a while, treated him well. His friends said that he often acted like a beaten man as the episode had a drastic effect on him. Still, he was a well-liked personable genius and they gave him good work assignments. The question arose whether they would make him a partner as odds-on; he would have been made a partner had the Kodak episode never happened. On the other hand, they were concerned as to what would this do to the reputation of the law firm if they promoted a lawyer who knew of the lie and kept quiet? The trial judge in the Kodak-Berkey case was irate with the law firms conduct during the trial and was so outraged by Mahlons behavior, that he personally calls it to the attention of the federal prosecutor. He has since left the bench and is now a partner in a large NYC law firm. The judge now concedes that there wasnt any way for an associate to handle that problem. He adds, All firms, including that one, should push the bar association to evolve procedures so that an associate doesnt have to be a hero to do whats ethical.
POSTMORTEM

The counsel (Stein) made the most of the situation in addressing the jury: That sordid spectacle of dissembling, evasiveness, deception, and concealment disgraces the dignity of this court, this proceeding, and you jurors. And there is no doubt, I believe, based upon the evidence presented to you, and the conclusions to be drawn from that evidence, that the witness deliberately and purposefully concealed material evidence, and I think it has

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got to be said lied to you under oath. Not once, repeatedly. (The expert) has proven himself utterly unworthy of belief. The judge was upset with the entire behavior of the law firm that employed Mahlon and Joe. He noted that Mahlon had executed the false affidavit in response to his partners request for something stronger that would satisfy the court as to why the documents were not produced. He blamed the firm for not pressing Mahlon harder for the evidence, instead of waiting until the trial was about over. The judges statement is interesting (in part, stating: ) All of these things it seems to me reflect, and I have said it in just words of one or two syllables a kind of single-minded interest in winning, winning, wining, without the limited qualification of that attitude that the court, I think, is entitled to expect and which I feel must have infected (Mahlon) and has infected certain aspects of this case from time to time in ways that I find most upsetting. On appeal, the Second Circuit reversed and remanded the lower court judgment. Kodak eventually settled the case for $6.76 million. The law firm paid $675,000 to Kodak to avoid a malpractice claim for failure to turn over documents. The lead counsel, who was criticized by his colleagues at the firm for his arrogant manner and for his handling of the case, resigned from the law firm. So, what happened to Joe? He was passed over for partner but the firm did not announce this for a while and kept him on so that a prospective employer would not see that he was dismissed immediately and conclude that he had been implicated in the wrongdoing. Even so, Joe was not hired by any law firm to which he applied for a job. But Mahlon (his first name, in case you wondered) did OK, considering. He pleaded guilty to a misdemeanor charge of contempt of court. He served 27 days in jail (as an assistant chaplain); he received a pension payment from his old law firm and was never disbarred. He traveled to the Far East where he taught English to Japanese students for some time, returning to Connecticut where he was the president of the Greenwich, Connecticut, Philharmonic Orchestra. When he turned 65, he started working as a volunteer for the Center for Constitutional Rights, a public interest law firm specializing in civil rights, First Amendment and criminal justice issues. He is very happy with his position. This saga raises several questions, but one that is raised by many nonlawyers is, Why did a lawyer who cost a publicly held corporation millions of (investors) dollars because he lied in a court of law, do only 27 days in jail, receive a pension that evidently allows him to travel and to now live in Greenwich, Conn.? What would have happened if Joe Lunch bucket lied to a court, with the same costly result, which could have been more had Kodak sued the firm for malpractice (which they never did)? (Incidentally, Kodak never did sue the law firm for malpractice.) For that matter, what would have happened to an accountant/auditor/CPA, or an engineer, that lied in a court? Even a doctor? How does this case and others like it, affect the ethical conduct of those in the legal profession, particularly in the eyes of the public? And how should this attitude affect other legal duties, such as that of negotiation where it seems that anything goes? As long as bar associations

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and others who create the rules, refuse to face this question directly and continue to beg the question of which, if any, lies are acceptable, then there will be no change in negotiations which can often be best described as a free-for-all with no rules. WRONGFUL OBEDIENCE The Kodak case is also an excellent illustration of the ethics of wrongful obedience. Lets go back to poor old Joe. It is a given that he saw his partner lie but kept silent. Another associate reasoned that Joe saw the partner lie and really couldnt believe it. This was stated earlier, but note the range of Whys there he didnt know what to do, the other attorney was a nice guy and he didnt want to do anything against him, after all, the guy was his boss, he couldnt believe it. Therefore, Joes judgment must have been undermined by the situation in which he found himself. Actually, Mahlons excuses or reasons for his actions, were very much the same. He was not the lead partner in the case he was on a team headed by a newcomer, an intense, focused, driven and controlling lawyer (and no one liked him). Therefore, his judgment just failed him. Neither of the attorneys in this case was given a direct order to break the rules. What do the ethics rules say about that? ABA Model Rule 5.2(a) denies the defense of superior orders to a subordinate lawyer ordered to behave unethically, but Rule 6.2(b) states that a subordinate may defer to a supervisory lawyers reasonable resolution of an arguable question of professional duty. Remember Joe kept thinking that there must be a reason when he heard Mahlon perjure himself. This does not, of course, even resemble an arguable question and there is nothing reasonable about perjury, but the fact that it was Joes respected superior who committed it, undermined his confidence so that he did not understand what was reasonable and what was not. As it is often said, The road to Hell may be paved but is still a slippery slope. The slippery slope in this case started with adversarial deception that was lawful, and culminating with lies, perjury and wrongful obedience. The misdeed occurred during the discovery process, which is really slippery. Discovery is the one of the most contentious parts of any civil litigation. It has been likened to a game of Battleship, wherein one side calls its shots by filing discovery requests. The other side must announce when a shot scores a hit by releasing a document to the other side. Actually though, it isnt always really clear when a shot has hit arguments ensue as to whether their document really falls within the scope of the request and they can concoct all types of arguments. Another problem is that the lawyers do not get to see the opponents cards after the discovery. When the one being fired at decides that a hit had not been made, then the decision is made ex parte it will not be announced to the adversary who may never discover that an extremely important document (the smoking cannon) was being withheld for tentative reasons. Every associate involved in discovery goes through the same routine. They find a document that seems to fall within the scope of a legitimate discovery request, but she is told by a supervisor, to find an argument to exclude it. This is not improper, as long as it is not frivolous. Step one down the slippery slope. 74

The innocence is lost. At this point, withholding a document in spite of a legitimate request, starts to feel like zealous advocacy rather than deception. But danger lurks, because what goes around, comes around, and if the lawyer is not careful, there soon will be no document that should be released to the opposing side the request is just too broad, or too narrow, every document that is important (smoking cannon again) is either a work-product or privileged, and before long, no one has any rights to any (of my) documents. The question then becomes, is it really so bad to lie when it is the only way to protect the (read my) documents from the other side (adversary) who has no cotton-picking right to them anyway. If legitimate advocacy is the start of the slippery slope, then the end of the slipper slope was the Kodak-Berkey situation. ADVISING A CLIENT OR ASSISTING IN A FRAUD Sometimes, unfortunately, when a lawyer advises his client s to his rights, the client may use this information to commit a dishonest or fraudulent act. All, of nearly all, lawyers may find it necessary to draw a distinction between advising a client of the applicable law and legal options that may be available, or assisting the client in committing a fraud. For example, assume that a client was accused of shooting a man with a .22 caliber pistol that he had pulled from his back pocket. He claimed self-defense. His attorney asked, How often do you carry that pistol? The client wanted to know, What has that got to do with anything? The problem arises if the lawyer tells him that if he carried it every day that would be one thing premeditation, for instance. If, on the other hand, he was taking it to his girlfriends house to give to her as she had been receiving anonymous telephone calls then that is another thing. If the client has a brain in his head, he will make sure that his girlfriend backs up his story. Advising a client or assisting him in fraud? Many years ago, a movie actor named Jimmy Stewart acted the part of an attorney in the movie Anatomy of a Murder, based upon a best-seller book by the same name. In the movie (and book), the lawyer was defending his client, an army officer, who was accused of killing the man who shortly before had raped the officers wife. Stewart explains that the only conceivable defense would be that of legal excuse. The army officer quizzed Stewart on what that was, and after a rough explanation that what was needed was a legal peg for the jury to hang their hats on so they would vote for acquittal, particularly since their sympathy would be with the defendant who had just suffered having his wife raped. The officer said that he was mad but the attorney said that was no excuse. The officer said that he must have been crazy to do that and asked, Am I getting warm. The attorney (Stewart) walks towards the door and says, Ill tell you that after I talk to your wife, see if you can remember just how crazy you were. The army officer comes up with a legal excuse of irresistible impulse which would now be temporary insanity and is acquitted. While this is a good story, there have been many actual similar instances, most notably where corporations have had their attorneys review possible testimony where the company is involved. This is a conundrum, as a lawyer is required to give an honest opinion when asked by 75

his client about the consequences of the clients conduct. If the client uses that information in a fraudulent or criminal manner, the attorney is not automatically a party to the action. It is quite possible that an attorney may assist his client in pursuing a course of criminal action, and do so completely unknowingly. The difference is between analyzing the consequences of conduct and recommending the means by which a crime can be committed. Still, it is not easy for lawyers to know when they have crossed the lines into actually suggesting a way that the client could commit an illegal act. The ABA has written contradictory ethics opinions on these situations. If a reasonable person could see that the client was obtaining information as to the best way to commit a crime, then the attorney is on thin ice. Even this would be difficult, as many criminals are professional criminals and would pick up on the most innocently given advice. THE SAVINGS AND LOAN SCANDAL Perhaps the best known financial scandal of the 1980s was the Savings and Loan scandal, and the most infamous case was that of Lincoln Savings and Loan, if for no other reason than the cost of bailing out this S&L was put at $2.6 billion. When everything was said and done, the Chairman and CEO, Keating, was sent to prison on fraud charges and two of their law firms (one of which was one of the 5 largest law firms in the U.S.) had agreed to pay $92 million for their involvement. What in the world did the law firm do to be fined such a large amount? The whole sordid affair was a big cover-up and the law firms assisted. They were well aware that employees were back-dating documents to make them appear to be legal, falsifying loan and research documents and underwriting information so that the loans appeared to be legal and proper. The Federal Home Loan Bank Board examined Lincoln S&L, but the attorneys conspired to mislead them. The law firm made formal reports to the bank board that the S&L was not unsafe, to the contrary if was a financially healthy institution. They praised the management for their minimizing the risks associated with real estate lending and credited Lincolns success to its prudent underwriting and sound investment selections. The Office of Thrift Supervision (OTS) was formed in 1989 by Congress. In 1992, they filed a notice of charges against the larger of the law firms and froze the firms assets. The firm fought, of course, but within a matter of days after the assets being frozen and creditors voicing concern, plus its line of credits were frozen, they settled its dispute for $41 million and agreed never to represent a federally insured institution again. Even though the law firm bitterly fought the decision in the press and was able to obtain the sympathy of many legal scholars and attorneys, the New York State authorities investigated the law firm, but closed its investigation with no action taken. However, in 1993, the American Bar Association issued an ethics opinion stating: In representing a client in a bank examination, a lawyer may not under any circumstances lie to or mislead agency officials, either by affirmative misstatement or by omitting a material fact. But then they also stated, There is no duty to disclose weaknesses in the clients case of otherwise reveal confidential information. This was considered by many as a left-handed endorsement of the actions of the law firm. 76

To add to the confusion, about a year earlier, the ABA issued a statement that a lawyer could not represent a client if it meant assisting the client to commit continuing or future fraud. They also said that if a client uses the work of its law firm to perpetrate a fraud, the lawyers have the right to publicly disavow this work even if the work was done in good faith in order to stop it from being used for fraudulent purposes by the client. This appears to be contradictory to the stand taken with the attorneys for Lincoln S&L. Some say that the difference was that the firm involved with Lincoln S&L was much more powerful and if they were considered as unethical, so would many other lawyers in many powerful law firms in the country. Evidently the ABA recognized this concern, as in August of 1993, it passed a resolution opposing its previous early ruling. Who really knows how important was the fact that the Lincolns law firm lead counsel was an experienced and well-known litigator but who had never represented a federally insured institution before? It was subtly said that there was no one powerful enough to stand up to this attorney and there was no mechanism for doing so. In the mid-1990s, the first state to set up a system with the authority to discipline the entire law firm if necessary, was New York from the prodding of the New York City Bar Association. These actions made the point that law firms develop their own culture, which strongly influence the way that their attorneys practice law. Therefore, they felt that the entire law firm should be accountable for the behavior of all of its lawyers. If this appears draconian, consider the fate of the accounting firm of Arthur Andersen after action was taken against Enron. Although a very few accountants were actually involved, the end result was the demolishing of a large and respected accounting firm. CAN LYING BE JUSTIFIED BECAUSE JUSTICE IS BEING SERVED? An important question should be asked at this time are there any circumstances where an attorney can be justified in lying, except in negotiations? The question might also be, Can lying ever be justified because justice is being served? Take the situation that arose just prior to the jury selection process of the Timothy McVeigh trial. In March 1997, the Dallas Morning News reported that McVeigh had given his attorneys a written confession in which he admitted driving the truck into the building, killing 168 people. The confession itself would not have been admissible as it was made only to the defense attorneys. The newspaper admitted that it had obtained a copy of the confession from a member of the defense team, and it was therefore, a confidential communication under the attorney-client privilege. One can imagine the panic in the defense attorneys office they needed immediate damage control. First, the defense attorney said the confession did not exist and it was all a hoax. Then later, the story was changed and the attorney announced that there had been a confession, but it was part of a ruse to get a reluctant witness to testify as the witness would not testify if there were any chance that he would be accused of the crime. Immediately, the news media raised the question as to whether the attorney was lying. (Interestingly, there was no criticisms of the 77

newspaper who had made damaging accusations against the defendant, and it could only harm him as no jury would ever hear of this confession in court.) Legal ethics experts appeared and took both sides of the issue. Either the attorney had lied about the confession to fool a witness, or, on the other hand, the attorney had lied to the press. Almost a when did you stop beating your wife kind of situation. Many referred to the ABA rule prohibiting the making of false statements to any third party, (in addition to prohibiting false statements to the court or opposing counsel). In one case, the press was the third party, in the other case, the witness was the third party. There was talk of disciplining the attorney for these actions, but that was all it was talk. To this day it is unknown outside of the defense team, as to whether the confession was real or not. If the confession was true and the attorney lied to the press, he was only trying to get his client a fair trial. Imagine if you will, the attorney found himself in the center of a horrible case of mass murder, involving innocents, and with a ton of evidence proving his clients guilt. Now he finds himself in the center of a confession from his client. If the confession were true, he had three choices: admit that it was true which would damage his client in the eyes of the public and more importantly, potential jurors; he could remain silent, but which would have the same effect as admitting its truth; or concoct some plausible denial. The third choice appears to be the only thing he could do, even though others would condemn him for not choosing truth over justice. If he had concocted the confession in order to make a witness talk, many ethics experts believe that this was simply a matter of a lawyer doing what he was supposed to do. It was emphasized by some that prosecutors often do worse. The District Attorney of Houston at that time, sided with the defense attorney, and called the phony confession just a matter of strategy. The D.A. said that if, for instance, he had a witness who would not talk as long as his mother was alive, then he would send someone over from the funeral home to tell the witness that his mother had died. Is this ethical? This is the type of situation that justifies lying because of the doctrine of relative filth. If they can do it, so can I. There are other justifications for the attorneys conduct, not the least of which is the recognition by our justice system that truth needs to be balanced with justice. This justification created the legal fiction theory, which is just another way of stating that it was a lie. But the whole system is rife with these fictions dressing up a client so he wont appear in jail clothes, rules that keep a jury from hearing hearsay evidence or what one person told another, judges that strike testimony on the grounds that it causes prejudice that outweighs it probative value, etc., etc. Can there ever be good lies? Consider the techniques of attorneys who handle housing discrimination cases, and who would send black and white testers to see if the black families were treated any differently than white families. This is a lie, is it not? Would an attorney still consider telling this lie? You bet!

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CHAPTER 4 STUDY QUESTIONS 1. Even if an attorney were allowed to leak information to the public, they cannot sue for retaliatory discharge like other employees if A. they make demands for compensation that exceeds 150% of their annual income. B. their suit requires them to reveal additional confidential information. C. they are members of the American Bar Association. D. their discharge was the result of whistle-blowing. 2. When lawyers are involved in whistle-blowing, court results have varied but in one oft-quoted case where the lawyer refused to destroy papers as demanded by management, the court said A. the lawyer could sue only if he was a resident of Illinois where he worked. B. the ABA does not allow attorneys to be a plaintiff in any suit. C. the motion to dismiss was allowed because the communication in the complaint was confidential and protected by attorney-client relationship. D. the job of an in-house attorney is to destroy important incriminating papers, so he could sue. 3. Of all of the cases filed, the percentage of civil cases filed is A. about 90% B. less than 10%. C. the greatest majority. D. so many as to clog the system. 4. One unethical practice of a very few personal injury lawyers is for the attorney to charge a fee based on the gross recovery A. and expenses are paid out of the attorneys chare of the award. B. and the lawyer would take expenses out of the clients share. C. and only accept what the local bar association feels is proper. D. and then leave town with all of the award, leaving the client to sue him. 5. In one situation where a lawyer who already had been disciplined by the bar association, used runners to solicit over 100 cases. The bar association brought disciplinary action of A. fifteen years in prison. B. disbarment and a heavy fine. C. disbarment, a $10,000 fine and confiscation of his private auto. D. a reprimand, 100 hours of community service, and repayment of bar associations investigative expenses.

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6. The Rule prohibiting certain solicitation of clients is questioned by many legal scholars, attorneys and others because A. lawyers should never, under any circumstance, be told how to market their services. B. if the member of a minority race solicited for an attorney, it would be discrimination not to allow the runner to solicit clients. C. by law, every lawyer is assigned a maximum number of clients according to the general population within the state. D. this allows insurance companies free rein to solicit accident victims themselves. 7. The American Law Institute which was formed to give insurance companies a status at least equal to that of the policyholder, takes the view that A. a lawyer owes a paramount duty to policyholder, even if the insurer chooses the lawyer. B. lawyers leave their law license at the door of their employer, the insurance company (figuratively speaking). C. the duty of an attorney in an insurance company is to protect the company from lawsuits derived from poor claims practice. D. all insurance companies are crooked. 8. Most trial lawyers acknowledge that their job is not to present the truth in any objective sense, A. so very few of them tell the truth during the trial. B. but to present only the clients version of the truth. C. so they can testify during the trial about conversations with their clients. D. as no one believes lawyers anyway. 9. When an attorney dresses up his client by dressing him in a new suit and tie, even though the client had never worn a suit in his life and the lawyer does not want him to appear in jail clothes, under ethics rules A. this is not allowed. B. it not is only bad, it is also highly illegal. C. these actions are allowed because they are indirect. D. if the lawyer does NOT do this, the lawyer will be censored. 10. Negotiation is not, never has been and never will be A. a matter of putting all of the cards on the table. B. illegal. C. the duty of an attorney. C. anything but honest, truthful and highly ethical. ANSWERS TO CHAPTER 4 STUDY QUESTIONS
1B 2C 3B 4B 5D 6D 7A 8B 9C 10A

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CHAPTER FIVE CORPORATION LAW & CLASS ACTION SUITS


CORPORATE WARFARE The adage of a lawyers services having nothing to do with truth and justice, it only has to do with winning is never more apparent than in those situations where corporations must be defended against lawsuits. While unusual situations can arise where the defendant company is not a corporation per se, corporations are peculiar in law because of the fact that they are artificial or fictitious persons. One thing in particular makes them different they usually have a lot of money. John, an attorney in private practice, represents an individual who has been wronged by a corporation because of a faulty product, causing great distress to the client, both physically and mentally. The manufacturer of the product refuses to acknowledge that there is any problem with the product and denies any responsibility. Nevertheless, John files a lawsuit, and the manufacturer sends thousands of documents during the discovery phase to John, obviously to swamp him and discourage them from continuing with the suit. But, as happens so often, fate intervenes and an assistant discovers a memorandum stapled to the back of another paper, obviously overlooked by the manufacturer, but where the company acknowledges that there was problems with the product. If this were true, hundreds, maybe thousands, of people were using this product and their health could therefore be severely affected. John immediately files for the release of more documents pertaining to the product and specifically to the area that was faulty. The companys attorney fought the discovery, but is ordered by the judge to provide the documentation to John. The next day, the companys attorney shows up and offers John a sizeable settlement very generous in the eyes of the John and his staff but under the condition that the amount must be kept secret and all of the documents must be returned to the company. John and his staff review the new material and discover proof positive that the device is faulty and that the health, and even the lives, of many persons can be severely affected if they were not notified of this problem. Johns duty is to his client and he is sure that the client would accept the settlement because of the large amount offered. He also knows that he will not sleep nights if others die or become very ill because of information that he has. Lawyers who play the adversarial game with attorneys representing large companies can often match the companies attorneys if they have a large law firm behind them. However, the adversary theorum can be manipulated if there are large amounts of money at stake.

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If the company makes an offer to settle for a large amount, then the company knows something that the plaintiffs attorneys do not and that usually is information regarding the company and/or its products that could cause havoc if released to the public. Generally, in these types of situations, there will be a settlement. One good reason for a settlement is that they never include findings of fault. But if the settlement is quite large and the public is aware of it, the public will have no problem at determining who is at fault, at least in their own mind. Companies who rely upon public goodwill as most companies do would pay heavily for this information be withheld from the public. If information as to what the lawsuit leading to the settlement was for was also leaked to the public, this just compounds the problems. Plus, if there could be many complainants, the plaintiffs attorney will start seeing a multitude of lawsuits evolving and he could even afford a summer home There are, it must be said, good and honest reasons for a company to desire secrecy in these matters. Obviously, many claims are filed for publicity or just a feint hoping to pick up a few bucks on the side, and for other reasons that are not legitimate. Also, many of the suits just do not have merit. At least once a week, Paul Harvey News (on the radio) will discuss some ridiculous lawsuit. Most recently, he reported that a young lady slipped on a spilled soft drink in a fast food restaurant and broke her tailbone. The soft drink was on the floor because she had had an argument with her boyfriend and had thrown the drink at him. Regardless, the judge ordered the restaurant to pay the plaintiff $113,000. True story, reported on 12/5/03. No telling what will happen on appeal In todays society, people seem to want to blame anyone else except themselves, when things dont go right and there are many television ads for law firms that offer their services with no upfront money required to file a lawsuit. Sometimes there are a plethora of lawsuits if one successful suit is widely publicized. Just because one suit is successful, is no sign that similar ones will be. There is evidence that: open settlements actually encourage frivolous lawsuits! (This information was developed for the Product Liability Defense Council, whose membership is restricted to those companies who have been sued for defective products). Secrecy is the most famous tool of manufacturers of faulty products. When pharmaceutical houses that manufacture Zomax, Halcion and Prozac were sued they kept their settlements secret as well as humanly possible. Eventually, the evidence appears in the case of Halcion, it came from an English investigation. Zomac came off the market only after a scientist had a near-fatal experience and investigated it further. It was taken off the market after being responsible for a dozen deaths and over 400 severe reactions to the drug.

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The Dalkon Shield situation, as discussed earlier, forced the company to take the IUD off the market, but only after many very secret settlements. The company tried to condition the settlements on the promises of the attorneys who represented the claimants, never to accept another Dalkon case. This is, of course, a clear ethics violation of every state, which does not allow for attorneys to be bought off in this manner. One of the first breast implant suits occurred in 1984 against Dow Corning. The plaintiff won a $1.7 million settlement but on appeal, the attorney for Dow offered to settle on the provision that the plaintiff or her attorney could ever disclose the damaging information they had discovered. The plaintiff took the offer, as she was aware that the trial could drag on for years before she could receive a penny. Many are surprised that this suit appeared in 1984 as it took 7 more years before the FDA discovered what lawyers litigating breast implants had known but had kept secret. Now that it is no longer secret, there have been tens of thousands of women complaining to the FDA of serious injuries suffered because of the implants. True, scientists and legal experts continue to try to determine whether silicone implants are as dangerous as so many think they are, but that is not the question. The question should be: Does the public have a right to know about the risks when they buy a product?" The side-mounted gas tanks of General Motors mentioned earlier, created at least 200 settlements by GM, while at the same time they insisted that the gas tanks were safe. It would appear to most of the public, that there is a point at which legal secrecy serves the public, or the legal, purpose when there is a clear danger to public health and safety, or even if there is a possibility of such danger. One of the problems obviously, is that plaintiffs lawyers have to start fresh and completely in the dark in these type of cases, whereas the defendants lawyers are aware of any and all litigation regarding the product, plus they are aware of any studies and their conclusions regarding the product in question. They also have the experience of being able to make it more and more difficult for the plaintiffs lawyers to become aware of the information that others have but have agreed not to reveal. The adversary theorum creates the suppression of dangers and potential dangers to the public. Since the lawyers obligation is to put the interest of the client first, then the interest of the public will come in a distant second or third (depending upon the lawyers fees). Every lawyer knows that they cannot lie to or mislead the court, but other than that, they owe their clients their best efforts. For defense lawyers, requiring secrecy with any settlement offer is generally to their clients best interest. Since the plaintiffs lawyer has the same duties to their clients, many feel that they are compelled to accept a settlement that is of benefit to their client, even if it means the public could be harmed by the secrecy. Lets face it, the attorney cannot demand that the client accept the settlement, as that is the sole right of the client.

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Judges often contribute to the secrecy, for the best of reasons. They have the power to demand that one side provide the other side with documentation, but with the provision that the information will not be used outside of the particular case. Usually this includes returning the documents to the original owner. They are protected by the judge usually because they contain trade secrets which could be stolen by the public if it were made public. They will also protect this information because of the desire to protect a party from annoyance, embarrassment, oppression, etc. Still, it is difficult to make the argument that a dangerous car part or a dangerous drugs side effects are entitled to protection as a trade secret it does not make sense for a competitor to steal a defective part or drug. Perhaps they could use it in negative advertising, but that risk is small. Attorneys want to keep their clients rights of privacy and the client has not given up his rights just because he walked into a courthouse. Otherwise, just by paying a filing fee, anyone could force another party to give up personal and confidential information. Courts religiously protect these rights. On the other hand, clients certainly have the right of free speech that is protected by the First Amendment. So, if they want to talk about their case and what they have learned about it, they can do so to their hearts intent (as long as it is not slanderous of libelous). The right of free expression means that once you have found out something about your case, you can tell the world as you see fit. The Supreme Court enforces this doctrine, except they give a judge leeway if the judge believes that protection of the information is necessary and it furthers a substantial government interest. JUDGES DISCRETION IN PROTECTED INFORMATION Since there have been very few court opinions written dealing with these issues, the trial judge has a large amount of discretion in deciding what information should be protected, and what should not. Not all judges are strong enough unfortunately, and they will leave it up to the attorneys. If the attorneys cannot agree, then the judge will simply protect everything. This does not always work to the best interests of the public, as during the lawsuits against the drug Halcion, one woman who was under the influence of this drug, killed her mother. The judge prevented any disclosure of information about the drug. Also, most judges seem to feel that if the attorneys can agree on what is to be kept secret, then the judge should not object. Settlements should be encouraged, if for no other reason than it helps to clear the courts calendar. So, if secrecy is required for settlement, few judges will object. Keeping the information secret can be difficult at times, even when both parties and the judge agree. There are those who are expert at searching court records, such as reporters and other lawyers. Therefore, some defense attorneys will get the plaintiffs lawyers to agree to the parties to the suit, including the lawyers and law firms, to change their names to a fictitious name. That way, it would be nearly impossible for an outsider to discover who did what to whom. In California and a few other states, the parties may stipulate to reverse the jurys decision. Therefore, the real winners get paid and avoid appeal, and the lowers can avoid having a judgment against them. Other actions taken include a stipulation to vacate the verdict and to seal 84

the court record from public view, or to depublish any written court opinions that provides information that other plaintiffs could use. THE PROZAC CASE On order to keep this text as concise as possible, details of important cases have not been discussed fully. The Prozac case is such an outstanding educational tool in documenting what lengths companies will go to keep evidence secret from the public and in showing that the secrecy goes too far, that more than usual detail is discussed. In 1989, a Joseph Webecker, 47 years old and who had a history of mental illness over the past 10 years including 2 suicide attempts, bought an AK-47, walked into the printing plant where he had worked, and opened fire, killing eight people, wounding 12 more, and then he put gun to his own head and pulled the trigger. The pertinent fact is that about one month previously, he had started taking Prozac. Of course there were lawsuits, but probably since the printing company did not have the financial resources to satisfy the plaintiffs, suit was initiated against Eli Lilly and Company, the producers of Prozac. There were 160 cases filed (the case under discussion here was the Fentress v. Eli Lilly & Co. case, named after the first person to file suit). By the time that the case went to trial, Prozac was the drug of choice for antidepressants, a true wonder drug used by millions of people. Prozac accounted for a third of all Lilly sales in 1994 some $1.7 billion (with a B). At risk in this case was that if Lilly lost, then that would open the floodgates to more suits, but if they won, that could give pause to others contemplating suit. This suit was considered by some as a slam-dunk as in this case, the plaintiffs themselves had never taken Prozac they were claiming harm by a third party. Therefore, they would have to prove that Prozac caused We Becker to act as he did. During the trial in Louisville, plaintiffs attorneys pushed the judge to allow evidence about another drug of Lilly, the anti-inflammatory drug Reflex that had been taken off the market in 1982 because it was too dangerous. Lilly had been found guilty of 25 criminal counts of failing to report adverse reactions of Reflex to the FDA. The judge disallowed this, saying that it was marginally relevant (at best), and that the only result would be to prejudice the jury and it would have very little evidentiary value in this case. Then the attorneys and executives of Lilly made a big boo-boo. Executives testified that they had an excellent reporting for reporting incidents with their drugs even their top scientist who had succeeded the one that was previously convicted said that the FDA had praised their system for collecting and analyzing and reporting adverse events. Remember Reflex? Thereupon the plaintiffs attorneys renewed their request to being in the Reflex evidence. The judge agreed since Lilly had injected the issue into the trial. As one can imagine, this created a bombshell. Scores of attorneys, for both sides, descended onto the courthouse and soon asked for a postponement of a day. Everyone thought: Settlement,

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The next day, however, the plaintiffs counsel declared that they would rest and would not present the Reflex evidence, unless the case went to its second stage addressing the value of the reward and would occur only if the jury found that Lilly was liable. If the jury found Lilly not guilty, that was that, Reflex would not be introduced and they would pack their bags and go home. When the judge asked if a settlement had been reached, the attorneys replied that there had not been a settlement. The jury returned its verdict 3 days after the judges ruling allowing the Reflex information, by a 9 to 3 vote (minimum majority), Lilly was found not guilty, and the case was closed. Lillys attorneys were triumphant, and felt they could not beat down any other claims. Finished? Not quite. The judge was not satisfied as to why any lawyer would fight so hard over getting the Reflex evidence introduced, and then back off without a settlement. After the time for appeal had expired, he called the attorneys into his chambers and again denied any settlement. The judge became even more suspicious but he had no more jurisdiction. However, being so sure that the case had been settled, he filed a motion to change the post-trial order from a dismissal after jury verdict to dismissed as settled. This tore up the legal community around Louisville. The then-President of the Kentucky Academy of Trial Attorneys told the local newspaper that if money had been traded for evidence, then the entire trial was a sham. A well-known local trial lawyer disagreed, stating that the work of a lawyer has nothing to do with truth or justice, it only has to do with winning. But attorneys on both sides maintained silence. Eventually, a spokesman for Lilly admitted that both sides had agreed not to appeal, but stated nothing further; obviously to admit to a settlement would hurt Lillys proclamation that it had won the case at trial. The attorneys on both sides then filed an objection to the judges hearing anything about a closed case. The attorneys continued to deny a settlement and Lillys vice present made a public statement: There was no agreement or even any discussion about settling the case without allowing the jury to decide. But to the careful observer, it was still uncertain whether the jury had been allowed to participate in the trial or if it had participated in a sham. Interestingly, the judge decided that he needed an attorney, and he picked one out of the newspaper who obviously felt strongly about the case, and the two of them filed a brief in the appeals court: It is unbelievable that the plaintiffs would reach a settlement, and then want to keep it secret, particularly where the essence of their claims was that Lilly covered up information. Their public silence has been bought and paid for. Secrecy is certainly not important to the millions of people taking Prozac and the thousands of doctors prescribing Prozac. They want the truth, The appeals court sided with Lilly and the plaintiffs, ruling that the judge no longer had jurisdiction. The judge appealed to the Kentucky Supreme Court. During the following Spring and Summer, details leaked out. Statements by Lilly executives stated that Lilly had agreed with plaintiffs attorneys, not to use Reflex evidence. Later attorneys

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for both sides sated that they had settle all money issues and had agreed to go through the first phase of the trial, no matter what the outcome. No details were offered. In the appeal, the judge and his attorney zoomed in on the fact that the lawyers had lied to the judge. By so emphasizing the lack of candor, they knew they had a better chance of getting the attention of the Supreme Court as lying to or misleading a court is a clear ethics violation, and judges do not like that, at all, particularly when the details of the meeting in the chambers was told. It was also revealed at that time, that during the jury deliberation, a juror came forward and told the judge that she had overheard settlement negotiations in the hall, and she repeated it with the lawyers present. She was excused, and the judge asked if anybody had anything to say. They did not. In addition, there had been long discussions as to procedures if the trial entered the second phase and the timing, so that personal plans could be made. It was played to the hilt. In 1996, the Kentucky Supreme Court decided the case in favor of the judge, unanimously and stated that there was evidence that there was a serious lack of candor with the court, and there could have been deception, bad faith conduct, abuse of the judicial process and perhaps, even fraud. The important point to remember is that this decision did not concentrate on the secrecy of the agreement, but on the conduct of the lawyers. The judge wasnt through. With the authority of the Supreme Court, he asked a deputy state attorney general to conduct the investigation, with power to subpoena documents and question witnesses under oath. It worked. It was discovered that they had engaged in a secret agreement, so complex that some of it had not been reduced to writing. The lawyers agreed not to present the Reflex evidence; in exchange, plaintiffs would be paid regardless of the outcome, unless it was a hung jury. If the plaintiffs won, they would get a bonus if the jury found Lilly to be more than 30% at fault, and another if the fault was over 50%. The plaintiffs lead attorney agreed that all of his Prozac cases, including those in other jurisdictions, would be settled, and half of his expenses would be paid by Lilly. This lawyer was the one who had the most to gain by the settlement. The date was set for the hearing, but it never happened. Attorneys for both sides presented the judge with a new order in this case; showing the case was dismissed as settled. This is what the judge had demanded two years earlier. Eli Lilly & Co. acknowledged later that the case had been settled before the jury verdict. Lillys attorney, Tate, appeared before the Kentucky appeals court in an attempt to avoid having a hearing before the judge, arguing that the judge had a vendetta against Lilly and it was a lie to brand the trial a sham. The next day the judge, who realized that his participation would be a distraction, withdrew from the case, stating that the spotlight should be on what is under the log, not the person trying to roll it over. That was the end of the story except that of the 160 active Prozac cases in 1994, less than half have remained. The court of appeals ruled that any further hearing on Fentress v. Eli Lilly & Co. would be private and closed to the public. For some reason, this case really never got

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national attention, the plaintiffs attorney still is practicing law. No one every learned the amount of the settlement, except in a divorce case involving one of the plaintiffs in the case, the lawyer stated that the amount was tremendous. In 1995, the American Lawyer magazine asked 6 ethics experts about this case. Everyone thought that misleading the judge was wrong, but 5 defended the agreement as ethical, even though it was paying money to suppress evidence. This raises the question as to whether the legal ethics of attorneys is properly related to the conduct expected of others outside the legal profession. There have been some advances though, in 1990, Texas approved a Rule of Civil Procedure, which prohibits secret agreements. The law is written so that someone who really needs the law, such as abused children or elderly fraud victims, can get it, but those who just want to hide their mistakes, cannot. Floridas 1990 Sunshine in Litigation Act prevents secret settlements or secrecy orders that hide public hazards - which is defined very broadly. Washington State has passed a similar bill. Regardless of the intent of these regulations, there still is room for a judge to overrule, but conversely, all of these bills depend upon a string judiciary to make them work. Florida prohibits secrecy agreements between lawyers but has no specific penalties. In Texas it is possible for plaintiffs attorneys and defense attorneys from working together to influence a judge that their case is one where secrecy is needed. There still are potshots taken at the laws. In Texas a court limited outsider challenges to secrecy orders, while in Florida the law was attacked on the grounds that corporations have constitutional rights to privacy. CLASS ACTION SUITS Class action suits are designed so that people can fight back as a group for those small matters that they would otherwise have suffer in silence. Unfortunately, a class action lawsuit is also an opportunity for a lawyer to collect large fees while ignoring the people he is supposed to be helping. In the beginning, these suits were mostly those suits that were impractical or unprofitable for an individual to file such as defective household appliances, overcharging of interest on loans and credit cards, clothing manufacturers who produced shoddy apparel, etc. Soon the lawyers were using these suits for larger ticket items such as fraudulent stock offerings, toxic spills, discrimination in hiring, etc. They then started with the mega-class action suits breast implant and asbestos exposure come to mind. Class action suits have been quite effective in many cases. For instance a class action against State Farm because of sex discrimination ended with a total award of $150+ million, with some women getting between $135,000 and $800,000 each if they were more qualified than the men who were hired instead of them.

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DETERMINATION OF WHOM IS THE CLIENT?

The question could easily be: Who is the client, all the jillions of wronged persons in the suit? Obviously, if each person were a client with the right to settle the lawsuit, it would be impossible. There is no personal relationship between the lawyer and the participants in the suit they are just a signature and an address. The up-side of that is that the attorney cannot claim to have offered or performed more services for one person more than any of the others. Actually, there really are few, if any, rules pertaining to attorney-client relationship in a class action suit. So the lawyers cannot be blamed if some of their actions or huge fees from a class action suit seem unethical there just are no particular regulations governing these types of suits. Among the many criticisms of the class action lawsuit is in respect to the tremendous power given to attorneys and the very limited power of the class members. In individual cases each client is entitled to the loyalty of the lawyer, but, of course, in a class action suit, this is not possible. The temptation for an attorney to make a quick buck is by accepting a settlement of low value is great, as there is very little relationship between an attorney and the individual class member Unfortunately, there are no ethics that cover class action lawsuits specifically. This leaves each jurisdiction free to determine these responsibilities as they wish. Courts have to pass on the fairness of all class action lawsuits, but generally they are inclined to go along with the recommendations of the lawyers. At the beginning of a lawsuit the court approves the verification of the class by finding sufficient common characteristics of the members in order to make a cohesive group and the judge also approves of the legal counsel. Most of the time these are the largest hurdles for the attorney as a settlement is pretty much in the hands of the attorney if it is reasonable limits. The ethical problem facing class-action lawyers is that often they work on the case for years and if it goes to trial, it is more difficult in many ways than with an individual case. With so much time invested in the effort and with a difficult trial ahead, lawyers can, and often do, can convince themselves that it is the best interests of all parties to take a settlement that is probably a little bit short.
EQUITABLE RELIEF

Sometimes money is not the relief desired, but that of equitable relief or perhaps some change in the defendants behavior that would ensure that the practice is not repeated sexual or other discrimination, employment practices, manufacturing of defective products, etc. Since some businesses would rather pay money than change their behavior, it is easy for a lawyer to represent that the suit has been successful, when actually it has not.
MULTIPLE LAWSUITS ON THE SAME ACTION

The biggest single problem for class action lawsuits, according to many attorneys who practice this field of law, is that class action lawsuits on the same subject, can be filed by different lawyers in different part of the country, which means that the one that is settled first establish the precedent by which all other similar suits will be measured. What happens next in these situations is interesting.

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A veritable auction will then take place, but instead of the bids going up, they all see how low then go. The defendant (usually a company) will shop for the lowest bid and then make a settlement with them. If others insist on a larger settlement, they are usually just ignored. What happens is worse than a secret agreement as the plaintiffs lawyers will generally agree something is better than nothing. In effect, the plaintiffs lawyers have abandoned their responsibilities to the members of the suit, for his own personal gain. Many jurisdictions allow or require a judge to approve a settlement even if every single named class representative objects. This helps somewhat, but those who object must overcome the desires of both parties to the suit. The preferred method of settlement would be when no one objects at all. It has been reported that there was one group of class action attorneys who would put in the settlement materials a statement to the fact that if any one voices an objection they may be subject to monetary sanctions. Another warning in the documents advised that that was the only way the class members could receive further notice of later hearings, which included any hearings regarding the fee. Amazing that any one signed as a class member in order to stay informed, the members had to object, but if they did it could cost them money. Even though it is doubtful that any judge would uphold such a Catch 22 situation, it would still silence many class members who may be thinking of objecting.
RIGHTS OF THE INDIVIDUAL CLASS ACTION MEMBER

It may sound as if the class action members are powerless, but they still have the right to refuse to participate in any settlement and they can pursue their own claims, either individually, or by joining another class action lawsuit that just might be more profitable for them. There is a presumption that all class members want to join the suit, so if they do not want to join this suit, they can decline to participate. In other words, this is much like a book club where the member automatically gets the selection unless they take positive action to opt out.
CLASS ACTION LAWSUIT SETTLEMENTS

Settlements can be confusing and can be of little value to each class action member, but combined the total value can be very high. An illustration of this was the class action suit against airlines for price fixing involving 4 million persons, and where the attorneys fees totaled $14 million. This was actually about 4 percent of the recovery, but the trouble was how the settlement was paid. Coupons for $10 or $25 were issued to members to be used for future airfares and then attaching restrictions that were so severe that only a small fraction of the coupons have been used. Another class action suit that got a lot of publicity was where the owners of the pickups with the side mounted pickup trucks that were not injured sued because the value of the their trucks had decreased because of the publicity surrounding the hazards of the truck. Coupons worth $1000 on the purchase of another light duty truck were paid to these class members. Even though the coupons were not transferable except to family member or upon sale of the truck, could not be used with any other rebate or promotion, were valid only for 15 months after settlement, and over the objections of 5,000 who did opted out and 6,400 who filed formal objections, the judge considered these objectors as immaterial. Legal fees of $9.3 million were approved the attorneys based this upon their supposition that more than 1/3 of the coupons would be used, so the value of the settlement would be nearly $2 billion. On top of this, the 90

judge refused to insist a safety provision, even though the Center for Auto Safety testified that hundred have died and thousands have been injured because of the location of the tanks. Naturally, the case was appealed to the federal Third Circuit Court of Appeals, and 18 months later they received a ruling of over 100 pages which strongly objected to the settlement, calling it unfair and inadequate and it was called a General Motors sales promotion. The case was sent back to the judge for further review. Shortly afterwards, a Texas court threw out a similar case on GM side mounted gas tank and lawyers fee of, believe it or not, $9.5 million. The story is not over as other class action lawyers resuscitated dormant actions and in 1993 a Louisiana state court judge certified a new class action suit of GM truck owners, and while the original (Philadelphia) case was still in limbo, the Louisiana judge allowed many of the Philadelphia members to join that class. The Louisiana judge then approved the $1,000 coupon settlement causing another uproar, so the Louisiana coupons could to be transferred to anyone (thereby giving them actual value) and they could not only be used with other promotions, they could be used for the purchase of any GM vehicle. More importantly, GM agreed to spend $4 million on researching vehicle fire, plus $1 million on research into mounting the gas tanks in a safer manner which would be paid from the lawyers fees. Plaintiffs counsel petitioned for fees of about $19 million. The Center for Auto Safety eventually withdrew any formal objections, while still stating that it was not a good deal for anyone except for the attorneys.
MASS INJURY CASES

Class action lawsuits have recently expanded into the field of mass injury cases even though not originally designed to resolve individual cases. This started about the time that a New York federal judge ordered all cases of injury by Agent Orange to be considered in one mass action in his court. When the appeals court uphold the judges decision for grouping the case, even though each individuals case was different, a new area for class action lawsuits was created such as actions for toxic spills, silicone breast implants, asbestos claims, etc. While this solved some problems such much better use of court time and consistency in rulings, some of these cases were so huge that they created more problems. Some were concerned that in the hands of unscrupulous attorneys, they could blackmail companies into settling for such large amounts that the company could fear bankruptcy if they did not pay a settlement. Such a situation arose with the asbestos settlement when asbestos cases were filed against 20 companies. An agreement was reached between the plaintiff attorneys and the defense attorneys before it was even filed. Only those who had become ill from asbestosrelated causes would receive any compensation. Others that may become ill in the future might receive money but not much was guaranteed. Many looked upon this settlement as, if not unethical, at least having questionable ethics. The settlement agreement allowed a class action lawsuit member to opt out, however, in order to do that, they would first have to know that they were part of the lawsuit. For the most part, people did not know that they were included until they became ill from asbestos exposure. True, there were television advertisements and ads that appeared in newspapers, along with an 800 number, but this did not help many who did not know that they had been exposed earlier, such as 91

construction workers, carpenters, painters, etc. Another questionable settlement feature was that the class included present and future spouses, along with family members who may not even be conceived at the time of settlement. Because of the rapidity of settlement (instantaneous according to some accounts) the case was presented to the members of the suit as a done deal. The lawyers never intended to litigate, probably because it was terribly complex and it dealt with unnamed future victims. Regardless, the federal court in Philadelphia that approved the settlement enjoined anyone who was covered under the claim from filing individual suits. Various consumer groups appealed to the Third Circuit Court of Appeals (the same judge wrote the opinion that had written the courts decision in the GM case) who rejected this settlement. The court ruled that it was not right to certify a case for settlement unless it would qualify as a class for trial. This was upheld by the U.S. Supreme Court (by 6-2). The problems with class actions being approved solely for the purpose of settlement are rather obvious. The defendants would be willing to buy peace with the plaintiffs, and the plaintiffs attorneys could be sorely tempted by attorneys fees which they came by just because they were in the right place at the right time Class action suits are necessary as they help the ordinary folk obtain justice and gives them access to the courts that they might not otherwise have because of the lack of finances to pursue equity with large companies or because they simply were not aware that they could sue. This is a lot of power for an attorney or a legal firm, and in order for the ordinary folk to be protected, it would seem that the supervision of the courts is necessary in order not to create a situation such as that in the asbestos settlement. There have been many suggestions as how to make the class action suit abuses go away, including various forms of legislation suggested. The problem seems to be that none of these suggestions offer a way to control the attorneys. Some, including at least one law professor, argue that class suit representatives are just decorative figureheads, such opinion supported in many quarters. It has even been suggested that the plaintiffs class action lawyer must also act as the (de facto) client. On the other hand, it has been suggested by some scholars that real power should be given to the representatives of the class, as if the representatives were truly representative of the class and if there were enough of them, and if they had the power to settle the case on advice instead of orders from the counsel, there would be some control that would be returned to those who are actually affected by the outcome. If nothing else this would stop, or at least limit, unscrupulous lawyers who would settle lawsuits because of the fees never mind the effect on the class members as what do they know? It has been suggested that mass tort action lawsuits should be restricted, but there really is not a good reason to restrict or curtail the class action lawsuits. There are good arguments against consolidating such suits however, as there is a tendency to consolidate those who are victims in different ways. In other words, the purpose of the class action lawsuit is to provide justice when one individual claim would be too small, but common questions take priority over individual issues of the class members. The idea discussed above, of having representatives actually

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being representative of the group, has a tendency to narrow class action lawsuits probably a very good thing. DEFENDING (?) TRIAL LAWYERS William Tucker authored an article entitled In Defense (sort of) of Trial Lawyers in the December 5, 2003 edition of the Weekly Standard. The following is a summarization of the article covering certain salient points reflecting the practices and ethics of Trial Lawyers. In the 1980s, an Oregon personal injury lawyer took the case of a Filipino-American high school student who had been severely injured when he was kneed in the head by a fullback while playing football. "Richard" suffered headaches and dizziness for two days, then collapsed with massive brain injuries. The doctor who saved his life said, "I'm not sure I did him a favor." Richard had very few motor skills left and required 24-hour care. The attorney decided to pursue a product liability case against the manufacturer of the helmet. He was aware that all football helmets go through an impact- testing process before being marketed and the helmet in question had passed the test. With such testing procedures, manufacturers are usually able to defend themselves. After sifting through 20,000 pages of discovery documents, the lawyer found nothing incriminating except he did discover two other deaths and several cases of brain injury involving the same helmet. The manufacturer had quietly settled these cases to avoid publicity and when approached by the lawyer, the company also offered to settle with Richard's family now. Smelling blood, the attorney pushed further and finally turned up the former CEO of a rival manufacturer who had a story to tell. The CEO explained that the helmet in question was fitted with a "front in-sizer" to adjust for head size. This accessory came in two different sizes. One had passed the impact tests but the other-a one-inch in-sizer-had failed. Richard had been wearing a one-inch sizer. The lawyer and his partner had invested $350,000 of their own money in the case, including selling their homes, by the time that the case came to trial. Three years later, an appeals court finally approved the $11.2 million verdict that the attorney won before a jury. The company immediately withdrew the helmet from the market. The attorneys felt that they had prevented numerous other injuries. Richard is making tremendous progress, has a 300-word vocabulary and is completely ambulatory, thanks a lot to expensive full-time therapy affordable because of the lawsuit. Trial lawyers over the last couple of decades, have become fixtures in the American landscape, thanks to television advertising and their political activity. Trial lawyers have the funds to make substantial political donations, principally to the Democratic Party. Along with labor unions, they are considered one of the financial pillars of the party. The Manhattan Institute has just issued a condemnation of the plaintiff bar titled Trial Lawyers, Inc. The profession rakes in "almost $40 billion per year in revenues-50 percent more than Microsoft or

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Intel and twice those of Coca-Cola," trumpets the study. "[It] might well be the most profitable business in the world." Trial lawyers are often called a peculiar breed. They are nearly always men, and selfmade men, with the majority rising from humble beginnings. They are often the first in their families to attend college and are nearly universal in their dislike for Ivy League lawyers and others that come from East Coast centers of privilege. But many trial lawyers admit that they are different because they are businessmen. Where in the past the practice was that after wining a lawsuit, the lawyer would buy some land or a home or whatever, and relax. But they were the first to put their winning back into the next case, enabling them to do things that hadnt been done before. In their personal life, they are generally socially conservative. For instance, Jere Beasley, the Alabama attorney who won $675 million from Monsanto for PCB contamination in Anniston, supports Alabama chief justice Roy Moore's efforts to display his Ten Commandments statue in the courthouse. Many of them feel a religious calling to their profession. So why does the Democratic Party become the benefactor of the trial lawyer largesse? If there is any one thing, it is their belief that Republicans represent corporations, and to trial lawyers, corporations are the incarnation of evil, sinister megaliths directed by amoral men who use their monstrous power to get away with enormous crimes. While this may be called Populism early Populists never drug corporations to court, alleviating them of billing of dollars in the process. Their dislike for corporations (while many of them are, themselves, incorporated) is real and an integral part of their makeup. Their anger stems from their knowledge of how corporate attorneys operate wearing down their opponents, filing motion after motion, and challenging everything which the corporate attorneys can do with their large corporate salaries. Their principal tactic is to make the other party spend all of their money. For years, the trial lawyers had been outgunned by corporate treasuries. Now that has changed because of the number of large awards and the lawyers financing future cases with their winnings. A prime example was the tobacco industry that was masters at stalling so they had never lost a case. The lawyers put in $12.5 million from Texas alone when proceedings bogged down in Mississippi and Florida. There were other injections of funds also, and lawyers were known to put up their home and their farms for money to keep going. Of course this was worth it, as the 80+ law firms that won the 1998 settlements divided fees of $20 billion. Guess what much of that money is now available for new litigation. Trial lawyers have mastered the art of bankrupting their opponents (even though bankruptcy leaves less money for legal fees). More than 60 major companies have been put in Chapter 11 by asbestos litigation. So now the search for solvent deep-pockets has led the lawyers involved in asbestos cases to companies such as General Motors, General Electric, and Vivendi, whose involvement in injuries to asbestos workers was completely incidental (GM, for instance, used asbestos brake pads in its cars) but whose deep pockets can be reached through the doctrine of "joint-and-several liability. Dow Corning was bankrupted because of silicon breast implant

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litigation even though the theory of injury from implants is recognized as junk science and the FDA is reported to soon allow implants back on the market. With the leveling of the playing field, is their any chance that the two can come to a mutual agreement, or will the present course of assured destruction of American civil justice damage our entire economy? One point overlooked by many is the fact that a corporations pockets are full of only investments, many of them retired individuals and pension funds. So, will the continual robbing of Peter to pay Paul continue? For such peace to reign, corporations and their friends in Washington must admit that injury lawsuits are a permanent and acceptable part of the economic landscape. Some organizations such as the Manhattan Institutes talk of a $200 billion "tort tax"-as if money spent on lawsuits were simply being burned, must realize that this is not necessarily the case. Some wrongs affecting the health and safety of the public can only be corrected by legal means. While government regulation is inefficient in improving health and safety, personal injury lawsuits, as evidenced by the football helmet case, can reach into remote corners of the economy that would never be visited by a government inspector. And no one can deny that large transfers of money is a very effective way of making necessary improvements even though some monetary awards are ridiculous, at least it gets the undivided attention of large corporations. Many of the most famous of the ridiculous awards are later reduced, including the infamous case where the Arizona woman who infamously won $3 million for spilling McDonald's hot coffee in her lap eventually had the verdict reduced to $480,000 she was hospitalized for a week and had skin grafts, so nearly a half million should be more appropriate. When Joe Jamail convinced a hometown jury that Texaco (a New York company) had tortuously interfered when Pennzoil (of Houston) thought it had purchased Getty Oil, the $11 billion verdict (representing Texaco's entire net worth) was eventually whittled down to $3 billion. Newspapers report stories like the prison inmate who sues himself for $5 million and then asks the state to pay since he has no source of income-but never note that filing a lawsuit means nothing. All it reflects, in fact, is the growing awareness among trial lawyers that the bigger the numbers they post on the docket, the better chance the story will land in the papers. And you cant otherwise get that kind of publicity for nothing. Says Richard Epstein, author of Principles for a Free Society: Reconciling Individual Liberty with the Common Good: "Tort law is indispensable to any modern system of safety regulation. When directed toward the uncovering of fraud or incompetence, it works well. The problem comes when, in a search for deep pockets, it misdirects attention to some remote third party that is in a poor position to protect anyone from harm. We should be as skeptical of people who call for wholesale abolition of the tort system as we are of people who want to maintain the status quo." Trial lawyers are here to stay, even though there are a plethora of trial lawyers, which makes it easy to complain that there are still too many lawyers. However, since there are more and more college graduates, there will be more and more lawyers. Although personal injuries, consumer claims, mass torts, and class actions occupy a growing portion of the docket, the vast

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majority of time in American courtrooms is still occupied by one corporation suing another. In this country, the alternative would be disputes settled with payoffs, collusion or violence. Any peace would make the America's judiciary capable of curbing many of the litigation excesses by its own means. The common law moves slowly as in the 1970s, civil antitrust cases loaded down the courts because every time the newly formed Interstate Commerce Commission charged a company with anti-competitive behavior, private plaintiffs up and down the line began suing for triple damages under the 1914 Clayton Antitrust Act. For a while it appeared the entire economy might drown in private antitrust litigation. Then in 1977 the U.S. Supreme Court decided Illinois Brick v Illinois, in which it laid down the principle that only parties that bought directly from the offending company, could sue under Clayton. Antitrust suits quickly subsided to manageable proportions. Trial lawyers must be willing to make some concessions otherwise the specter of tort reform will continue. What makes not only corporations boil, but also the general public, are those highly publicized situations where there are huge punitive damages awarded in order to teach the defendants a lesson. Sometimes it is forgotten that there is an Eighth Amendment prohibition of excessive fines. Also grating to many people who find it totally irrational, is the situation where one plaintiff receives a huge windfall while he is only one of hundreds of thousands of similarly wronged individuals. (Oregon now requires 60 percent of punitive damages go into the state Crime Victims' Compensation Fund, a reform that could easily be extended to other states.) Nearly everyone will concede that the asbestos case has stretched reality. To many, it is now nothing more than a vast Ponzi scheme. Millions of people may have been harmed by inhaling asbestos fiber, but there is not enough money in the world to compensate them at prices set by jury verdicts. And still it continues - a Texas jury recently awarded $200 million to an oil field worker who feared he had suffered lung damage, even though he had no visible impairments. The way it now stands is that those who file first with the best lawyers get the money, everyone else is left out of the picture. Legitimate asbestos victims have claims with bankrupt companies, and are now receiving less than ten cents on the dollar for their damages. There are now 90,000 asbestos claims a year, still climbing even though the number of mesothelioma (lung cancer, the principal disease from exposure to asbestos) cases have been declining since 1991. The numbers increase because tort firms now run screening clinics at factories, often rewarding doctors for each positive diagnosis. This blatant recruitment of plaintiffs has turned many of the pioneering asbestos attorneys into opponents of the current campaign. Trial lawyers just must admit that there are those who have turned the class action lawsuits and mass torts, into a racket. It was recently reported that attorneys are sending letters to thousands of businesses citing their recent violations of the states draconian consumer protection laws, and demanding payment for not suing as if business in California needed more headaches. Would anyone call this anything other than racketeering? The New York State Trial Lawyers Association has created a nonprofit Big Apple Pothole and Sidewalk Protection Committee, which hires students to inspect New York City sidewalks and mark up

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maps with thousands of squiggles that supposedly represent pavement damage. These maps are then used as proof of prior notice in slip-and-fall cases that currently cost New York City $60 million a year. The entire American judicial system has been criticized because while it appears to usually be fair in the settlement of disputes, it seldom pays any attention on how the decision affects society at a large. After all, society is an interested third party. How far should lawyers go in representing their clients interest is the proper question, not how far can the lawyer go? Ethical values, such as good faith, honesty, morality and fair dealing as absolutely essential for efficient markets and regulatory systems. The battles only for the self-interest of clients can be eventually defeating for both the clients and for society as a whole. Author Philip Howard, who has founded a nonprofit called Common Good to reform "America's lawsuit culture," cites a recent decision in the House of Lords- Britain's equivalent of our Supreme Court-where the judges dismissed the claim of a young man who had broken his neck diving into a lake at a park where 160,000 visitors swim each year. Noting that the only way to achieve safety would be to prohibit swimming altogether, the Lords asked, "Does the law require all trees to be cut down because some youths may climb them and fall?" "This is the missing link in American justice," says Howard. "Judges have lost sight of the idea that lawsuits concern not only the parties in the dispute but everyone in society." Many trial attorneys are basking in newly acquired wealth, some of them having more money than they every dreamed they could have, and they justify their new-found gains by recognizing that they were pioneers the first to recognize the need for action. However, just like the early Robber Barons, they may require public restraint. As Theodore Roosevelt knew, the outsized success of any business endeavor presents problems to the rest of society. The public and the electorate must recognize that trial lawyers have a critical role to play in promoting health and safety and policing corporate America. Trial lawyers, for their part, will have to begin by recognizing that corporate America is not indestructible and that their litigious successes could end up doing great harm to the nation.

CHAPTER 5 STUDY QUESTIONS 1. Acme, a large manufacturer, was sued and immediately wanted to settle for a large amount, therefore it wants to settle because A. their lawyers charge too much money. B. they hate the judge and will settle for appeal. C. they have information that if released to the public, would cause havoc. D. the plaintiffs attorneys are in cahoots with the Acme lawyers.

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2. Open settlements actually encourage A. frivolous lawsuits. B. early settlements. C. other litigants to withdraw. D. huge legal fees. 3. The most famous tool of manufactures of faulty products is A. a high priced attorney. B. membership in the country club where judges are members. C. are accounts in well known New York City banks. D. secrecy. 4. Plaintiffs lawyers are at a disadvantage in product liability cases because A. even if they win the suit, they wont be paid very much. B. judges automatically dislike plaintiffs lawyers. C. they have to start from scratch where the defendants lawyers already know everything about the product. D. they have to obtain a huge performance bond before the trial. 5. The judges in product liability cases usually return admitted documents to the original owner because A. the original owner is usually a company who will pay him well under the table. B. the judge instinctively does not want to upset the status quo. C. he will usually feel sorry for the defendant being sued. D. the original papers may times contain trade secrets that should not be made public. 6. Some times judges are not strong enough to decide what should be protected in a trial, so A. they will take the strongest stand against the interests of the defendant. B. they will take the strongest stand against the interests of the plaintiff. C. they will leave it up to the court Bailiff. D. they will leave it up to the attorneys, and if they cannot agree, then he protects everything. 7. Unfortunately, a class action lawsuit is also A. a way to make poor people rich for no obvious reason. B. a way for an attorney to make a name for himself so he can run for office. C. a means for a lawyer to collect large fees while ignoring the people he is supposed to be helping. D. never won, so it is an exercise in futility. 8. If money per se is not what is being sued for in a class action lawsuit then it is probably A. equitable relief that is desired. B. because the attorneys contingency fees are way too high. C. because the judge is crooked. D. going to be thrown out of court anyway.

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9. One of the big problems with several class action lawsuits on the same subject, is that A. the one that is settled first establishes the precedent by which all similar suits will be measured. B. each lawyer will charge more than the suit filed previously. C. courts have a tendency to just dismiss all of them at one time. D. the publicity will increase and will help the defendant that way. 10. If a member of a class action lawsuit does not want to join the lawsuit A. they will then be sued as a defendant in the lawsuit. B. they can auction their name to the highest bidder in the suit. C. there is a presumption that all will join, but an individual may opt out. D. he will still share as if he were still a participating member. ANSWERS TO CHAPTER 5 STUDY QUESTIONS
1C 2A 3D 4C 5D 6D 7C 8A 9A 10C

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CHAPTER SIX PRO BONO WORK, TAX PRACTICE & POT POURRI
PRO-BONO WORK In addition to continuing education courses now mandatory in of the states, it is often suggested that mandatory pro-bono work be considered. Even the American Bar Association has a rule that strongly suggests Pro Bono work. It should be recognized that many lawyers will argue that pro bono work is admirable (how could they argue otherwise) but being forced to providing this legal service is a form of indentured servitude, therefore, any pro bono service is provided by an unwilling provider and so they would be receiving substandard legal services. Of course this is ridiculous and self-serving, as the practice of law is a privilege of a regulated profession. In those states where pro-bono work is not required, there are not nearly enough lawyers that participate.

TAX PRACTICE Any text on legal ethics must include at least a brief mention of Tax practice. Tax practice is unique as it has both regulatory significance plus the problem of competing responsibilities. These have become more important as the country depends more and more upon self-reporting taxation. The Internal Revenue Service only has resources to audit about 1% of the returns to check for substantive validity, but even those audits show a high level of underpayment. Estimates of unreported taxable income indicated that the income not reported averages 10 to 15 percent of taxable income. While this does not sound like much, actually it amounted to over $255 billion in 2000. And it is only going to get worse as the public becomes more unhappy with the complexity and inequities of the tax system, as well as IRS enforcement practices. To understand the problem, a discussion of the regulations and interpretations by the bar is essential. Basically, taxpayers face penalties for fraud and for accuracy related violations that do not rise to the level of fraud. For fraudulent underpayers, penalties of 75% of the amount due can be assessed. For accuracy-related violations, the penalties may be as high as 20% of the amount due.
ACCURACY-RELATED VIOLATIONS

Accuracy-related violations may occur in several ways that are relevant to any ethical discussion. Negligence as it pertains to the IRS Code, includes failure to make reasonable attempts at complying with the regulations. Disregard means careless, reckless, or intentional violations. Substantial understatement of income tax is considered as substantial if it exceeds 10% of the correct tax liability or $5,000, whichever is more. 100

Another accuracy-related penalty concerns substantial valuation misstatement. This is interpreted to mean an overstatement of property value or adjusted basis to at least 200% of the correct figure, or, an understatement of estate or gift tax valuation of at least 50%/ Most accuracy-related penalties are inapplicable if taxpayers disclose the basis for a position and the position has a reasonable basis. Also, according to the code, for certain specified violations, penalties may be avoided if the taxpayer establishes good faith and reasonable cause.
PENALTIES FOR PREPARERS OF TAX RETURNS

Preparers of tax returns are also subject to penalties. A $250 fine is applied if a return takes an undisclosed or frivolous position for which there was not a realistic possibility of being sustained on the merits, and the preparer knew (or should have reasonably known) of the position taken. As with the taxpayer penalties, the preparer penalty for an unrealistic position is not applied if there was a reasonable cause for the understatement and the tax preparer acted in good faith, but this exclusion does not apply to flagrant behavior by the preparer. If preparers willfully attempt to understate the clients liability or, acts, as the tax code states with any reckless or intentional or disregards of rules or regulations, they are subject to a penalty of $1,000. In the same vein, they are liable for a $1,000 penalty for an individual return, and up to $10,000 for a corporate return for any practitioner who helped prepare any document that they knew or had reason to believe would be used materially to understate federal tax liability.
SANCTIONS

Any preparer who engages in disreputable conduct may be sanctioned by suspension or disbarment from practice before the IRS. Disreputable conduct includes the knowledge of faults or misleading information or willful, reckless, or a result of gross incompetency. A practitioner may not sign a return as a preparer if the return has an undisclosed position that lacks a realistic possibility of being sustained on the merits. A realistic possibility is interpreted to mean a position that is reasonable and well informed by a person knowledgeable in the tax law which would lead such person to conclude that the questionable position has about a 33 percent likelihood of being sustained on its merits. If the questionable position is disclosed and is not frivolous, then no violation occurs. The regulation of lawyers tax practice is relatively recent. For many years the Internal Revenue Service required due diligence in preparing or assisting in the preparation of tax returns, but the Treasury Department offered no regulations interpreting due diligence. The ABA issued an ethics opinion in 1965 which allowed that a lawyer assisting in the preparation of the clients tax return, may freely used the statement of positions that was most favorable to the client has long as there was a reasonable basis for those opinions. The ethics committee felt 101

that lawyers were actually acting in an adversarial capacity against the IRS and therefore, were not obligated to disclose weaknesses in the clients position, unless it was obvious that crime was being committed. The committee also noted that wrong or indeed sometimes unjust tax results in the settlement of the controversy is not a crime. The reasonable basis standard is actually rather laughed at, and as a matter of fact is called the laugh allowed standard as it would allow any argument that could be made with a reasonably straight face. One of the biggest problems is the valuation of property. Often times there are several appraised values of property and the tax preparer isnt concerned about the proper value to put on the property considering the fact that the Internal Revenue Service assumes that some underreport and may attach a factor to what ever value the taxpayer selected. Because of this, some practitioners would value the property at the appraised value, but the majority of them would probably value at a lower amount. Ethical considerations in situations such as these have prompted several initiatives, and creasing penalties for over-valuation and under-valuation of property, requirements concerning the qualification of appraisers in certain circumstances, and the old standby good faith\realistic possibility of success. In 1990, guidelines were published with the input and approval of the ABA Section on Taxation Committee on Standards of Tax Practice. The guidelines provide while there is nothing wrong in either the appraiser or the preparer giving the client the benefit of the benefit of the doubt where the value of property is uncertain, any evaluation involved in the return that we prepare must be reasonably done, makes sense, been well reasoned, and internally consistent. The committee was requested to reconsider the reasonable basis standard and its opinion and was informed that the standard of reasonable basis was construed by many lawyers to support the use of any colorable claim on the tax return to justify exploitation of the lottery of the tax return. Model Rule 3.1 states a lawyer shall not bring or defend a proceeding, or assert or controvert an issue therein, unless there is a basis for doing so that is not frivolous, which includes a good-faith argument for an extension, modification or reversal of existing law. Rule 1.2 which applies to representation generally, states a lawyer shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent, but a lawyer may discuss the legal consequences of any proposed course of conduct with a client and may counsel or assist a client to make a good-faith effort to determine the validity, scope, meaning or application of the law. Based on these rules and provisions of the model code a lawyer while assisting clients to prepare their tax returns, may advise clients of positions that are the most favorable, provided the lawyer has a good faith belief that these positions are warranted in existing law or can be supported by a good faith argument for an extension, modification or reversal of existing law. It is possible for a lawyer to have a good faith belief in this context, even if the lawyer believes that

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the position taken by the client will not be accepted. However, good faith requires that there must be some realistic possibility of success if the matter is litigated. The lawyer does not have any duty to require as a condition of his continued representation that a rider be attached to the tax return, which explains the situation or the expenditures.
GOOD FAITH

In 1985, the Special Task Force on Formal Opinion examined Opinion 85 - 352, and concluded that it properly rejected a low standard of tax reporting, it reduced some of the potential for misuse of the governing ethical standards, and if properly interpreted and implemented, it should work to improve the reliability of tax advice furnished by members of the bar. If the attorney has a good-faith belief that those provisions are warranted according to existing law or that they can be supported by a good-faith argument for an extension, modification, or reversal of existing law, the attorney may make the statement positions that are the most favorable to the client. However, good faith requires that there must be some realistic possibility of success if the matter is litigated. This raises the standard to an objective standard, which then can be enforced.
CHANCE OF AUDIT

This standard which was adopted does not allow taking into the account the likelihood that the tax return may be audited or detected in the final determination as to whether the ethical standards is met. Whether the return will be audited, or not, is of no interest, according to the standard. Determining whether there is a realistic possibility of success is made without any regard to the possibility of the audited lottery i.e. whether the return will be audited by chance.
REASONABLE BASIS OR REASONABLE POSSIBILITY OF SUCCESS

Contrary to prior practice, to the extent that reasonable basis had been interpreted to support the use of any colorable claim on a tax return or to justify an exploitation of the lottery of the tax return audit process, the early interpretation of reasonable basis set the bar too low. The ABA Committee has rejected this early standard. The new standard requires not only that there be some possibility of success if litigation is involved, rather than a construction could be argued for what seemed reasonable but also there must be more than just any possibility of success. The possibility of success must be realistic. The possibility of success cannot be realistic if it is only theoretical or impractical which implies there must be a substantial possibility of success. This raises the ethical standards. If there were only a 5 or 10% chance of success, if it were litigated, would not meet this new standard, where as a chance of about 33% would probably meet the standard. If the standard is not met, the proper procedure would be to pay the tax and claim for refund, setting forth in detail why the refund is claimed provided the reason is not frivolous. If the client is determined to take a position in a tax return that is not supported by a realistic possibility of success if litigated, then the lawyer must step back and withdraw at least as to the 103

advice given for the position in question. The Model Rule 1.16(a) says that lawyer shall not represent a client, or having done so, shall withdraw from representing the client if the representation will result in violation of the Rules of Professional Conduct, or other law. The lawyer should determine first, whether the position meets the ethical standard, and if not, the client must be notified not to take that position. If the client proceeds anyway, then the lawyer must withdraw as to any representation on the position taken on the return. The lawyer may not prepare a return, sign it and present it to the client unless the position meets the standards. The lawyer has no duty to require that riders are attached to the clients tax return, but the lawyer is under a duty not to mislead the IRS deliberately, either by misstatements or by silence and therefore allowing the client to mislead.
TAX RETURNS NOT ADVERSARIAL PROCEEDINGS

It is pretty well established that a tax return serves a disclosure, reporting and self-assessment function, as it is the citizens report of his relevant activities for the year. Because some returns may result in an adversarial relationship, there is a place for consideration of the ethical considers regarding advocacy. Many clients, it is recognized, may not take the lawyers advice but file the tax return anyway. If they are not audited, they will probably be back the next year, ready for more advice, and if the lawyer gives it to them, they may ignore it again. A lot will depend upon how forceful the lawyer is in giving his advice, and if he does not indicate that the penalties will be severe, then the warning will have little effect. In any event, there will always be pressure on the lawyer to give his blessing.
TAX AVOIDANCE

Tax avoidance is in the nature or morals, and all tax attorneys know this. There just is nothing illicit or even reprehensible to attempt to avoid by legal means some portion of taxation or to reduce taxes to the minimum required by law. After all, this is typical human attitude of centuries of attitudes about taxation. There are many tax avoidance schemes available; most of which are illegal, impractical, or just stupid. Tax attorneys are continually being pressured to try some scheme or other, but in order to do his job, the tax attorney must be a determined skeptic, able to discount everything hears or reads about. Any taxes saved through one of these schemes seems to take on a life of its own, being discussed at coffee klatches, golf clubs, and wherever else persons who are interested in saving money on taxes gather. As a matter of fact, the tax advisor, out of necessity, must spend a large portion of his time advising against schemes of this type. The tax advisor must be aware of all regulations regarding taxation, and at times, put aside personal notions of tax policy and attempt to make an intelligent guess as to what the laws passed by Congress actually means. The tax advisor need not worry about a moral position at this point, as his duty is to win specific cases and guide clients to pleasant destinations. After 104

all, it is the duty of the tax attorney to show his client how to take full advantage of what the law will permit.
ETHICS IN TAX AVOIDANCE DEVICES

Assume that a tax attorney thought up a new tax avoidance device that he may think is probably illegal, but there is a legitimate (non-frivolous) argument for its legality. The attorney should not use the device where the courts or the IRS will never effectively review it, perhaps because of lack of sufficient enforcement by the IRS. The proper action would be, in that case, to bring the issue to the IRS. Most tax practices have three separate and distinct roles: 1. structuring transactions to make sure that they are in compliance and the client will receive maximum benefits under the regulations; 2. reporting tax transactions to the IRS; and 3. representing clients in tax disputes. The reporting and litigating functions of the tax practice are more adversarial than the tax planning function, principally because the risks of being wrong are usually lower by a considerable amount, as the penalties for underreporting are still relatively modest. It is argued frequently, that ethical requirements of the tax practice should be compared to the strict standards of disclosure applicable to the SEC legal work. Others feel that if the law is not clear, individuals should be given the advantage of the doubt if possible considerable leeway, at least in pushing reasonable positions. Therefore, the way to increase compliance with tax laws & regulations is by tougher penalties on taxpayers, and not their advisors. Guidelines to Tax Practice Second (1990) by Frederick G. Corneel, 43 Tax Law. 312, suggested: 1. It is unethical to assist the client in the preparation of evidence designed to mislead the IRS 2. At times the client, in ignorance of the tax law has taken steps resulting in adverse tax consequences. It is not unethical to make every effort to correct this result, provided that this can be done without destruction of existing documents, backdating of new documents or other steps intended to mislead the Service ass to what in fact happened.
REPORTING OF MISDEED BY ANOTHER ATTORNEY

The IRS will usually allow correction of clerical, mathematical, or drafting errors that do not reflect the true intent of the parties, but they will not permit backdating to obtain favorable tax treatment. Therefore, an attorney cannot ethically assist backdating, but it is not clear what an associate should do about it. The Model Rule 5.2 provides that a lawyer is bound by the rules of professional conduct notwithstanding that the lawyer acted at the direction of another person. In actual practice, attorneys reports of collegial misconduct to disciplinary agencies are quite rate, and disciplinary sanctions against attorneys for failure to report, are even rarer. Although pragmatically, it is difficult for a lawyer to inform on other lawyers, this still goes against the bars commitment of self-regulation. At the very least, associates who confront what 105

is unethical conduct should at least report it to other members of the firm. This is particularly true in tax advice situations because there is an active third party involved the IRS.
GIVING ADVICE OR ACTIVE PARTICIPANT

There definitely are differences between giving tax advice and performing any further step in the submission of a tax return. This is a hazy area, to say the least. Perjury could raise its ugly head when the lawyer is presenting the case. Another What-if? The client informs his tax lawyer that he had left additional funds he had received out of the previous years tax returns and asks for advice. The lawyer can tell him that there are several penalties that the client can suffer if he is caught. For instance, auditing is selective usually the chances for an audit are remote unless there is such an obvious understatement that alarms would go off. The decision is up the client as to whether he wants to report the mistake in the previously submitted tax return, and the attorneys obligation is to tell him what the enforcement situation is and what the law is in that respect. This response means that the attorney will not tell anyone, the client has been notified as to what is right and what the consequences can be, and any action after that is on his shoulders. If he wants to do it, that is his problem. Unfortunately clients not only have the responsibility of compliance with the tax laws, they also have the responsibility to file reports and they may have the tax attorney questions about the tax report. There is little difference between a report to any other governmental agency that requires an attorney to sign a form, than a client asking specific questions prior to filing the report. All the attorney can do is to tell the client what the law is and what enforcement practices are, as long as the attorney is not involved in executing the purpose. That way, the attorney would not violate the law or violate legal ethics. To a practicing tax attorney, the response to this discussion would probably be I wish it were that easy. There are innumerable situations that arise that can cause conflict between what is the correct thing to do and keeping a client. Actually though, many learned scholars and practicing tax attorneys have pretty well agreed that it is, indeed, that simple, at least as far as the final ethical result would be. ETHICS RULES While the adherence and the requirements of ethics rules vary by state and even with organizations within that geographical area, there should be some changes in those jurisdictions where necessary. But creating new rules will not solve all the problems ethical dilemma occur continually and will still continue even if there were 20 gigabytes of ethical rules (and who knows how many pages 20 gigs would be). Besides, too many rules have a lot of wiggle room, and who is to say that more rules would not still be wiggly. However, there are some changes that should be obvious.

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Any rule against material misrepresentation or statements of material facts and such wording should be eliminated, discharged, thrown out with the verbal trash. All these rules do is create more definitions of that is material and what is not which in turn has to be defined as to the definition, etc., ad infinitum. How about saying that NO deception is permitted by a lawyer unless it is specifically excepted. In California, the statement is made that lawyers must always use means that are consistent with the truth. Good example. Exceptions should be specific and not open to much interpretation. Such an exception might be during negotiation; complete candor is not required or something of that sort. Comment Misrepresentation A lawyer is required to be truthful when dealing with others on a client's behalf, but generally has no affirmative duty to inform an opposing party of relevant facts. A misrepresentation can occur if the lawyer incorporates or affirms a statement of another person that the lawyer knows is false. Misrepresentations can also occur by failure to act. Statements of fact This rule refers to statements of fact. Whether a particular statement should be regarded as one of fact can depend on the circumstances. Under generally accepted conventions in negotiation, certain types of statements ordinarily are not taken as statements of material fact. Estimates of price or value placed on the subject of a transaction and a party's intentions as to an acceptable settlement of a claim are in this category, and so is the existence of an undisclosed principal except where nondisclosure of the principal would constitute fraud. LIMITS OF CONFIDENTIALITY Nearly everyone will agree that rules on confidentiality should be more explicit. For instance, it has been ruled in some jurisdictions that an attorney may be released from the bonds of Confidentiality when a client demonstrates through his actions that there is a reasonable probability of considerable and substantial physical harm to any person, or to the public at large. This should not be based upon when the harm can/will occur even if the act of the client is criminal. Also, most jurisdictions include release from Confidentiality or they should not be allowed to participate in secret settlements when the public health or safety is likely to be in danger or adversely affected.

The lawyer's exercise of discretion requires consideration of such factors as the nature of the lawyer's relationship with the client and with those who might be injured by the client, the lawyer's own involvement in the transaction, and factors that may extenuate the conduct in question. Where practical the lawyer should seek to persuade the client to take suitable action. In any case, a disclosure adverse to the client's interest should be no greater than the lawyer reasonably believes necessary to the purpose.

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WITHDRAWAL If the lawyer's services will be used by the client in materially furthering a course of criminal or fraudulent conduct, the lawyer must withdraw. The adversary theorem has been broadened by the use of the term of zealous representation. Lawyers can fulfill their obligations to their clients, their profession and to the general public without being zealots. OK, this might just be semantics, but if the phrase is not used at all, even in judicial decisions, then the obvious conflict between zealous and ethical can start to be resolved. Courts control the cases that appear before them so they are the ones that must lead in determining what is ethical and what is not. In one area in particular, that of unacceptable behavior, the courts can be more specific and definitive and enforce rules on violations of such as withholding information for reasons best described as frivolous. There are plenty of criticisms to go around but it is universally accepted that those who enforce discipline must take a stronger stand by issuing strong punishment and for a wider spectrum of offenses. There is a wide disparity between punishment given to associates of large law firms and those who are in private practice or with small law firms. Nearly all ethics rules state that if a lawyer violates a rule that, by itself, does not mean malpractice. Some states allow the violation of a rule to be used as evidence of malpractice, which is being fought by lawyers. This protects the rights of the clients. In summation, it all boils down to the individual lawyer and how he should perform. While there will always be quandaries and dilemmas because of the nature of the beast. if each lawyer can step back and ask, Is it proper? OK, so this is old-fashioned but it worked for early generations in our country who may have been poor and under-educated according to modern standards, but who would not consider any action unless it was ethical. The profession of law should be no different. PUBLIC PERCEPTION AND SUMMARY There probably are as many suggestions and words of advice on how to fix the public perception of the legal profession, as there are those within the profession. Many of these recommendations are based upon whose ox is being gored. The very nature of the adversary theorum, often referred to as the engine that runs the legal system, nearly guarantees that there will be at least two opinions on any one matter. Suggestions as to how other professions can improve their public image is easy, compared to that of the legal profession. While each attorney must reach inside themselves when dilemmas and quandaries occur, there are certain broad actions that can be discussed and that can be agreed upon among those who are really concerned about ethics and ethical conduct. One of the problems, it appears to many, is the fact that it is a monopoly and only members of the Bar Association may practice law before the courts. Today, the law is more technical than ever and beyond the understanding and the reach of the common man. For instance, in the

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recent book and hit movie, The Runaway Juror, jury selection techniques were discussed in detail and it is fair to say that the majority of those who saw the movie or read the book were exposed to a view of the legal profession that they were uncomfortable with, at the very least. One of the statements made by an attorney early in the book/movie, was Trials are too important to be left to jurors. Not a good impression. There probably is nothing inherently wrong with the aristocracy of the legal profession (as voiced by Alexis de Tocqueville in 1840, writing Democracy in America since attorneys are required to have a 3-year postgraduate course at an institution approved by the ABA come to think about it, that makes the ABA a large monopoly, doesnt it? The public can accept that, just as they accept the professional requirements to be a MD, CPA, etc. It is safe to say that the typical opinion of lawyers is more flattering if they understand just what the lawyer does. Hiding behind another fence, it seems to the public, are attorneys who work for the large and powerful law firms. True, without a doubt, the clients of the large law firm are thankful that they are powerful and can help administer justice when the client has been wronged. But how many people use the large law firms? How many people ever use an attorney? Former President Jimmy Carter once said: Ninety percent of our lawyers serve ten percent of our people. We are over-lawyered and under-represented. Our society has changed, technology continues at unabated growth, so it follows that the legal profession must also become more diverse and more specialist-oriented. It is harder now to find a general practitioner of law for the average man. Even the largest law firms are fighting to grow even larger and are continually cognizant of their ratings nationally or state-wide in respect to number of employees and growth pattern of income. First year starting salaries for associates, usually in their middle 20s now start at annual salaries of $75,000 to $101,000. While this is encouraging for some, only those law firms who represent the large and wealthy clients can afford those kinds of salaries, leaving the 90% that Jimmy Carter talked about. There is also an ever-increasing number of law schools but applications are going down, obviously because there just are too many lawyers at the present time. Law schools are profitable for most universities, so there is little chance that many will close in the near future. The one exception to the lack of growth is that there has been a dramatic increase in the number of women entering the legal profession. Many legitimate sources report that lawyers are dissatisfied with their profession, more so today than in the past, and there seems to be no light at the end of the tunnel. Many third-year law students are primarily concerned with landing a job with a good law firm (good meaning that they pay well) so as to guarantee their future and help pay off their student loans. They are not unaware that they will be facing a huge workload, and that they will have to compromise some of their beliefs in order to serve the client. Unfortunately, ethic rules are confusing and sometimes contradictory which does not ease the minds of students and attorneys. Besides, in discussing and the study of ethics,

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too often, ethics rules appear to provide instruction as to what a lawyer can do and still avoid a penalty, instead of showing them the right thing to do. Lets face it in studying ethical problems and discovering that many unethical behaviors are either not addressed, or the lawyer just gets a slap on the wrist (which may bother him only in the carrying of large sums of money to the bank), the thought may cross your mind that this is something to keep in mind, just in case It would appear to many, primarily the general public, that those who write ethics rules seem far removed from the general public and what the public wants from its legal representatives. Many, and too frequently, ethical rules are a result of political pressure, rather than ethical reasoning, with the results that morals rarely are considered. There are many complaints, every day the number grows, and those who must enforce the rules are overworked, underpaid, and overwhelmed by caseloads so they have no alternative but to concentrate only on the more flagrant cases. That means that while some lawyers are punished for rule violations, others float on by and are mostly ignored. Judges contribute to the problem when they take the easy way out on a rule violation by admonishing the lawyers not punishing them. To admonish a person for violating or ignoring an ethical problem is akin to doing nothing in some cases it just lets the attorney know how far he can go with the court while presenting his case and an admonishment just stretches the limits a little. One cannot complain too loudly about the judges, though, because in some cases when they take strong stands they are often themselves attacked, accused of bias and they may even be required to remove themselves from the case. The American legal system is designed so that every person on both sides can have a lawyer represent them and whose highest duty is to the client and not to the state or to the court. Our Constitution guarantees everyone the right of legal counsel and a jury system for both criminal and civil cases so that a judge does not have to make the decision alone. Our system is unique in that contingency fees may be used, they do not make people pay for the legal costs if a legitimate case is lost, and class action lawsuits. As Winston Churchill said, its the worst known, except for all the others. Some things can never be changed, as least in the immediate future. For instance, the U.S. Supreme Court has ruled that corporations have a very broad attorney-client privilege, so regardless of what might be thought of this, it is now out of play. The same could be said for some of the easy fixes, such as forbidding minimum billable hours, limit the size of law firms, etc. Still, there are some things that can be done if the profession pulls together in their quest for a more ethical profession in the eyes of the public their clients. One thing that would help is to make the study of ethics more important in the law schools by adding more study hours for ethics, and more examination of ethics issues as they actually occur in the practice of law. A simple explanation and definition of ethics as it relates to morality, would be a good start.

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Speaking of law schools, there are not many lawyers who learned to practice law in law school. This is not the function of the law school, according to some academics, as that would make their school turn into some kind of trade school, stifling the ability to think like a lawyer. It would seem that this would just be like not allowing medical students to serve a year in the hospital wards what in the world is wrong with teaching someone how to do their job? There are many other criticisms of law schools, such as not requiring the instructors to have actual legal practice. Some have suggested that more instruction on interrogation and negotiation would be helpful, as every attorney has to interrogate his clients, and negotiate settlement and other actions very frequently. One suggestion that makes sense to many, is for the law schools to forgive student loans for those who take the lower-paying public service jobs when they graduate indeed there are a handful of schools doing just that. How many students when interviewed for admittance to the law school, will state that they just want to help people? A large percentage, probably. But then, at graduation, what do they want to do? Make money with a sound future would be a probable answer. Many attorneys and lawyer-groups are concerned that those who join the mega-law firms are entering a world-onto-itself. They are taught how to fight according to the rules of the firm, which often are too removed from the rules of society. When faced with ethical dilemmas, most young attorneys will move in the direction in which they are pushed, particularly with the large law firms. The state of New York has taken the approach of holding law firms more accountable for unethical behavior and while discipline is not on the table, fines and probation and review by disciplinary personnel who monitor the firms activities.

CHAPTER 5 STUDY QUESTIONS 1. A statement regarding pro bono work which applies nearly everywhere; A. as an officer of the court, each member of the (bar association) in good standing has a professional responsibility to provide pro bono legal service to the poor. B. every attorney may be excused from pro bono work if a signed declaration of overwork is submitted to the bar association. C. pro bono legal work is not to be used only for work for the poor or disenchanted, but may also be proper if the legal work involves eleemosynary institutions. D. pro bono work must be assigned by the judge of the Circuit Court. 2. In the course of representing a client, a lawyer shall not knowingly A. represent an individual until legal fees have been collected. B. shall never represent a party guilty of a felony. C. make a false statement of material fact or law to a third person. D. appear in a court room inappropriately dressed or unshaven.

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3. It has been suggested, and adopted in some jurisdictions, that a lawyer be released from the bonds of confidentiality when a client A. refuses to tell a reasonable story to his attorney. B. publicly chastises his attorney. C. pays his final bill for attorneys fees. D. demonstrates that through his actions there is a reasonable probability of considerable and substantial physical harm to any person or the public at large. 4. In most jurisdictions, if not all, if the services of a lawyer will be used by a client to materially further a course of criminal or fraudulent conduct, A. the lawyer must withdraw. B. the lawyer may not withdraw without being disbarred. C. the lawyer must increase his fees substantially. D. the lawyer must immediately publish everything told to him by the client. 5. According to the IRS Code, failure to make reasonable attempts at complying with the regulations is called A. mistakes. B. alibis. C. unacceptable excuses. D. negligence. 6. Most accuracy-related penalties in filing tax returns are inapplicable if A. the return is signed by a lawyer. B. the returns is signed by a CPA specializing in tax law. C. taxpayers disclose the basis for a position and the position has a reasonable basis. D. the return is handwritten. 7. Any preparer who engages in disreputable conduct A. will be warned three times and then his name is published on the Tax Letter. B. may be sanctioned by suspension or disbarment from practice before the IRS. C. is subject to imprisonment not less than 3 years in a federal facility. D. must take a tax-remedial course before he can practice tax law again. 8. If the client of a tax attorney is determined to take a position on a tax return that is not supported by a realistic possibility of success if it is litigated A. then the attorney must bring in a more experienced litigator to assist. B. then the IRS cannot do anything to the client or attorney. C. then the attorney must withdraw as to any representation on the clients position. D. the attorney must withdraw from any relationship whatsoever with the client.

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9. If the tax attorney thinks up a new tax avoidance device that he thinks may not be illegal, but there is an argument for its legality, then A. the attorney must not tell anyone because of attorney-client privilege. B. he should immediately get it copyrighted. C. the proper action would be to bring the issue to the IRS. D. he should set up seminars for a fee, to teach people how to use the device. 10. Too often, ethics rules appear to provide instruction as to what a lawyer can do and still avoid a penalty, A. which is the right thing to do. B. instead of showing them the right thing to do. C. and therefore, ethics rules should just be ignored. D. therefore the rules should be used to teach new associates how to beat the system. ANSWERS TO CHAPTER 5 STUDY QUESTIONS
1A 2C 3D 4A 5D 6C 7B 8C 9C 10B

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BIBLIOGRAPHY AND REFERENCES Rules of Professional Conduct, Florida Bar Association Legal Ethics, Third Edition Deborah L. Rhode and David Luban University Casebook Series Foundation Press, 2001

The Moral Compass of the American Lawyer Richard Zitrin & Carol Langford Ballantine Books, 2000 Legal Ethics in the Practice of Law Richard Zitrim & Carol Langford Ballantine Books, 1997 The Conscience of a Lawyer David Mellinkoff West Publishing, 1973 Accounting Ethics Ronald F. Duska & Brenda Shay Duska Blackwell Publishing, 2003 Winning by the Rules Ethics and Success in the Insurance Profession Ken Brownlee, CPCU The National Underwriter Company, 2001 Blacks Law Dictionary, Seventh Edition West Publishing Co. The Standards of Ethical Conduct for Practitioners of Management Accounting and Financial Management: Codes of Professional Responsibility Rena Gorlin, ed. BNA Books, 1997 Lawyers Ethics in an Adversary System Bobbs Merill, 1975

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Legal Ethics in the Practice of Law; Rules, Statutes and Comparisons American Bar Association Model Rules of Professional Conduct and Model Code of Professional Responsibility, as reprinted by Riahcard Zitrinand Carol Langford, Michie, 1995 American Bar Association Publications Gilbert Law Summaries: Legal Ethics Thomas Morgan Harcourt Brace 1994 Legal Ethics in the Practice of Law Richard Zitrin Matthew Bender & Co., 1995 American Lawyers and Their Communities; Ethics in the Legal Profession Thomas Shaffer Univ. of Notre Dame Press 1991 Problems in Legal Ethics Rex. R. Perschbacher West Grour, 1998 Legal Ethics & Professional Responsibility Johnthan S. Lynton Delmar Learning, 1994 PUBLICATIONS, COURT DECISIONS, AND OTHER REFERENCES Many newspaper articles from the New York Times, Washington Post, Philadelphia Inquirer, and others have been included in part in this text. If the material used is of any length or is quoted, the source is named in the text Court decisions and court cases are quoted when applicable. Oftentimes when decisions or court comments are discussed, they are a compilation of similar decisions and the specific sources therefore, are not named. References, such as the Florida Rules of Professional Conduct and several other sources of information were found on the Internet, most of them shown with addresses within the body of the text.

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