Simon on New Rules: Rule 4.1 Through Rule 8.4

By Roy Simon

[Originally published in NYPRR December 2009]

This month I conclude my series on the new New York Rules of Professional Conduct. I will concentrate on the handful of provisions in Articles 4 through 8 that significantly alter or add to the Code, or that are otherwise worthy of comment. Specifically, this month’s column covers Rules 4.1 through Rule 8.4.

Rule 4.1: Truthfulness in Statements to Others

Rule 4.1 is the shortest rule of all of the fifty-eight rules in the new Rules of Professional Conduct. It consists of only a single sentence, which provides as follows:

In the course of representing a client, a lawyer shall not knowingly make a false statement of fact or law to a third person.

This language is almost identical to old DR 7-102(A)(5), but Rule 4.1 adds the phrase “to a third person.” The term “third person” is undefined — it is not defined in the Terminology (Rule 1.0), or in Rule 4.1 itself, or in the Comment to Rule 4.1. What does the term “third person” mean in this context? It apparently means anyone other than the lawyer or the client. (Fortunately it is not a disciplinary offense for lawyers to make false statements of fact or law to themselves — otherwise, a lot of lawyers would be in trouble!)

Is the addition of the words “to a third person” to its DR 7-102(A)(5) root significant? Does it mean that a lawyer may knowingly make a false statement of fact or law to someone who is not a “third person”, e.g., the client or a tribunal? No.

As to truthfulness to courts, Rule 3.3(a)(1) provides that a lawyer shall not knowingly “make a false statement of fact or law to a tribunal or fail to correct a false statement of material fact or law previously made to the tribunal by the lawyer.”

As to truthfulness to clients, no provision directly expressly prohibits a lawyer from making a false statement of fact or law to a client, but other Rules appear to fill that gap. For example, Rule 2.1 states that in representing a client, “a lawyer shall exercise independent professional judgment and render candid advice.” However, Comment [1] to Rule 2.1 says: “This Rule is not intended to be enforced through the disciplinary process.” A better example is Rule 8.4(c), which provides that a lawyer shall not “engage in conduct involving dishonesty, fraud, deceit or misrepresentation.” Lying to a client would seem to fall within the realm of “dishonesty,” if not worse. (Of course, so does lying to a third person, raising the question whether Rule 4.1 is needed at all.) And Rule 1.5(d)(3) provides that a lawyer shall not enter into an arrangement for, charge or collect “a fee based on fraudulent billing.” Thus, lawyers have no license to lie to their clients. Still, Rule 4.1 would be a better rule if it said: “In the course of representing a client, a lawyer shall not knowingly make a false statement of fact or law to the client or to a third person.”

Rule 4.3: Communicating with Unrepresented Parties

When a lawyer is representing a client in a matter, everyone else in the world falls into one of two categories — every person is either represented or unrepresented by counsel in that same matter. If a person is represented by counsel, then Rule 4.2 (the “no-contact” rule) generally prohibits a lawyer representing a client from communicating about the subject of the representation with a party the lawyer knows to be represented by another lawyer in the matter. I am skipping over Rule 4.2 because it is almost identical to its Code predecessor, DR 7-104(A)(1).

If a person is not represented by counsel in the matter, then communications with that person are governed by Rule 4.3, which provides as follows:

In communicating on behalf of a client with a person who is not represented by counsel, a lawyer shall not state or imply that the lawyer is disinterested. When the lawyer knows or reasonably should know that the unrepresented person misunderstands the lawyer’s role in the matter, the lawyer shall make reasonable efforts to correct the misunderstanding. The lawyer shall not give legal advice to an unrepresented person other than the advice to secure counsel if the lawyer knows or reasonably should know that the interests of such person are or have a reasonable possibility of being in conflict with the interests of the client.

The first two sentences had no equivalent in the old Code. The last sentence should sound familiar because it is based on DR 7-104(A)(2), but it contains a few subtle changes that clarify the rule’s meaning.

The first sentence prohibits a lawyer from telling an unrepresented person (or from giving the person the impression) that the lawyer is a neutral, objective, disinterested actor. For example, when a lawyer interviews a witness who has no counsel, the lawyer may not pretend to be an investigator who has no personal or professional interest in the matter. Comment [1] explains the underlying concern:

[1] An unrepresented person, particularly one not experienced in dealing with legal matters, might assume that a lawyer is disinterested in loyalties or is a disinterested authority on the law even when the lawyer represents a client. In order to avoid a misunderstanding, a lawyer will typically need to identify the lawyer’s client and, where necessary, explain that the client has interests opposed to those of the unrepresented person. …

Comment [1] also reminds lawyers to consult Comment [2A] to Rule 1.13 regarding the misunderstandings that “sometimes arise when a lawyer for an organization deals with an unrepresented constituent.” Since lawyers who represent corporations are engaging in communications governed by Rule 4.3 whenever they speak with corporate constituents who do not have their own counsel and whose interests differ from the corporation’s interests, Comment [2A] to Rule 1.13 is worth examining. It provides:

[T]he lawyer should advise any constituent whose interest differs from that of the organization: (i) that a conflict or potential conflict of interest exists, (ii) that the lawyer does not represent the constituent in connection with the matter …, (iii) that the constituent may wish to obtain independent representation, and (iv) that any attorney-client privilege that applies to discussions between the lawyer and the constituent belongs to the organization and may be waived by the organization. Care must be taken to ensure that the constituent understands that, when there is such adversity of interest, the lawyer for the organization cannot provide legal representation for that constituent, and that discussions between the lawyer for the organization and the constituent may not be privileged.

Comment [2B] to Rule 1.13 adds: “Whether such a warning should be given by the lawyer for the organization to any constituent may turn on the facts of each case.”

I do not believe that Rule 4.3 ordinarily requires such an elaborate “warning” to unrepresented people in the organizational context. Rather, as suggested in Comment [1] to Rule 4.3, a lawyer will typically need to do only two things: (1) “identify the lawyer’s client,” and (2) “where necessary, explain that the client has interests opposed to those of the unrepresented person.” Identifying the lawyer’s client is easy (e.g., “I represent the company — I do not represent you personally”), but what about explaining that the client’s interests are opposed to the unrepresented person’s interests? When will that be “necessary”? I think it will be necessary when the unrepresented person misunderstands the lawyer’s role or doesn’t realize that the lawyer’s client may ultimately be blaming the person, seeking damages from the unrepresented person, or otherwise using the information against the person. Those situations are covered by the second sentence of Rule 4.3, which expressly deals with misunderstandings.

Misunderstandings are most likely to arise in three situations: (a) the lawyer’s client is a potential plaintiff and is contemplating a suit against the unrepresented person; or (b) the lawyer’s client is a defendant who is deciding whether to blame or file a third-party claim against the unrepresented person as part of a defense strategy (which may then lead others to blame the unrepresented person as well, perhaps resulting in serious consequences for the unrepresented person); or (c) the lawyer is negotiating a transaction (either creating a new relationship or settling an old dispute) with an unrepresented person. Let’s consider some examples in each category.

Suppose a client who has been injured in an auto accident with Jones hires a lawyer named Sullivan. If Jones has not retained his own lawyer regarding the accident (and Rule 4.2 therefore does not apply), it is perfectly proper for Lawyer Sullivan to contact Jones to find out how the accident happened. But Jones may not understand Sullivan’s purpose. Jones may think the lawyer is from his insurance company and will help Jones to avoid any liability. If Lawyer Sullivan gets a sense (i.e., “knows or reasonably should know”) that Jones misunderstands Sullivan’s role in that way, then Sullivan must “make reasonable efforts to correct the misunderstanding.” Sullivan ought to say something like, “Wait a minute — I’m not a lawyer from your insurance company. I’m a lawyer for the person you crashed into, and my client may seek damages from you.” Rule 4.3 doesn’t try to prescribe a formula, but the lawyer has to take reasonable steps to ensure that the unrepresented person gains an accurate understanding of the lawyer’s role.

The second situation, which is similar and sometimes overlapping, arises if Lawyer Sullivan is representing a civil defendant and hopes to blame an unrepresented person (Smith) for the harm allegedly suffered by the plaintiff. Smith may, however, mistakenly think that Lawyer Sullivan will protect his interests by arguing that the plaintiff did not suffer any harm or does not have any legal basis for a lawsuit. Sullivan may indeed intend to make those arguments on behalf of his client, but Rule 4.3 requires Sullivan to correct Smith’s misconception that Sullivan is on his side and will protect him. Essentially the same situation arises if Sullivan is representing a criminal defendant and plans to cast blame (or at least suspicion) on an unrepresented person as a defense. The lawyer has to take measures, at the first sign of misunderstanding, to set the unrepresented person straight about the lawyer’s role and purpose.

The third situation, which is quite different, arises if Sullivan is negotiating a deal or a settlement with an unrepresented person (Miller). Miller may ask Lawyer Sullivan about the law that governs various aspects of the transaction, or Sullivan may need to explain that the law mandates or prohibits certain terms in a contract. Miller may get the impression that Sullivan is also acting as his lawyer and is giving him legal advice. Rule 4.3 therefore requires Sullivan to correct Miller’s misunderstanding by advising Miller that he (Sullivan) is not Miller’s lawyer but rather the adversary’s lawyer.

The last situation — negotiating with an unrepresented person — also implicates the last sentence of Rule 4.3. As mentioned earlier, the closing sentence of Rule 4.3 is very similar to old DR 7-104(A)(2), which provided that during the course of the representation of a client a lawyer could not “[g]ive advice to a party who is not represented by a lawyer, other than the advice to secure counsel, if the interests of such party are or have a reasonable possibility of being in conflict with the interests of the lawyer’s client.” But Rule 4.3 makes two subtle changes.

First, Rule 4.3 refers to an unrepresented “person” rather than to an unrepresented “party.” This does not change existing law, but the use of “person” rather than “party” avoids any doubt that Rule 4.3 applies to communications with all people, including those who are not parties to a transaction or parties who are representing themselves in litigation.

Second, Rule 4.3 adds an element of scienter for the lawyer. Specifically, Rule 4.3 applies if the lawyer “knows or reasonably should know” that the interests of the unrepresented person conflict or might conflict with the interests of the lawyer’s client. I have always thought that the phrase “reasonably should know” is the scariest phrase in the law because it holds a lawyer accountable for what the lawyer does not know but ought to know. Thus, lawyers should be alert to any signs that a client’s interests may clash with the unrepresented person’s interests, and should give appropriate warnings and avoid giving any legal advice in the matter (except advising the unrepresented person to secure counsel).

Let’s return now to the situation in which Lawyer Sullivan is negotiating a deal or a settlement with an unrepresented person named Miller, and Miller asks Sullivan to explain what the law requires or prohibits (e.g., “Will I have to pay taxes on the money your client is paying me to settle this case?”). If Sullivan says, “Our view is that our settlement payment will not be taxable income to you,” do Sullivan’s communications about the law violate the prohibition on giving legal advice to an unrepresented person? No. As Comment [2] to Rule 4.3 explains:

This Rule does not prohibit a lawyer from negotiating the terms of a transaction or settling a dispute with an unrepresented person. So long as the lawyer has explained that the lawyer represents an adverse party and is not representing the person, the lawyer may inform the person of the terms on which the lawyer’s client will enter into an agreement or settle a matter, prepare documents that require the person’s signature, and explain the lawyer’s own view of the meaning of the document or the lawyer’s view of the underlying legal obligations.

This Comment reflects the prevailing interpretation of DR 7-104(A)(2) — see, e.g., N.Y. State Bar Ethics Op. 768 (2003) (“a lawyer’s statement of a client’s legal position in the matter does not constitute impermissible legal advice to an unrepresented person”). Rule 4.3 has not changed the law on this point. But when a lawyer communicates with an unrepresented person, the first two sentences of Rule 4.3 impose new obligations on the lawyer — he must avoid implying that he is “disinterested” and promptly correct any “misunderstanding” by the unrepresented person about his role.

Rule 4.4(a): Respect for Rights of Third Persons

New York’s ethics rules have always prohibited lawyers from engaging in illegal or dishonest conduct, but new Rule 4.4(a) goes further by prohibiting lawyers from using means that have no real purpose other than harming third parties (including an adversary), and by prohibiting lawyers from using improper methods of gathering evidence. Rule 4.4(a) provides as follows:

(a) In representing a client, a lawyer shall not use means that have no substantial purpose other than to embarrass or harm a third person or use methods of obtaining evidence that violate the legal rights of such a person.

In the former Code, the closest equivalent was DR 7-102(A) (1), which provided that in the representation of client a lawyer shall not “[f]ile a suit, assert a position, conduct a defense, delay a trial, or take other action on behalf of the client when the lawyer knows or when it is obvious that such action would serve merely to harass or maliciously injure another.” (Emphasis added.) That language was broad enough to encompass nasty conduct toward third parties, but the prohibitions in the first clause of DR 7-102(A)(1) (regarding suit, position, defense, and delay) were aimed squarely at litigation tactics unfair to the opposing party. Consequently, DR 7-102(A)(1) almost entirely overlapped sanctions provisions already in court rules such as 22 N.Y.C.R.R. Part 130, which prohibits frivolous conduct in litigation.

Rule 4.4(a) improves the Code provision by replacing the “merely” test of DR 7-102(A)(1) with the more objective formulation “no substantial purpose,” and by directing the rule solely to misconduct toward third parties, such as third party witnesses not already before the court. Since third party witnesses are typically not represented by counsel, misconduct toward them is more difficult to police than misconduct toward adverse parties. The first sentence of Rule 4.4(a) may not be a frequent basis for discipline, but it should deter some improper conduct toward third parties.

The second sentence of Rule 4.4(a) attacks methods of obtaining evidence that violate the legal rights of third parties. Some of these methods, such as wiretapping or stealing mail (as Paul Newman did in “The Verdict”), violate the criminal law and are thus also forbidden by Rule 8.4(b) (prohibiting “illegal conduct that adversely reflects on the lawyer’s honesty, trustworthiness or fitness as a lawyer”), but other methods are not criminal and yet violate “legal rights” under statutes or common law. The Comment to Rule 4.4 unfortunately gives no illustrations, but cases and ethics opinions have identified such conduct as: seeking privileged information from a company’s former lawyer; reading documents that a disgruntled employee has pilfered from a company’s files; and obtaining a wife’s confidential medical records from her husband. Rule 4.4(a) thus prohibits some methods of gathering evidence that are not clearly barred by other Rules.

Rule 4.4(b): Receiving Inadvertently Sent Documents

Rule 4.4(b) wades into deep waters where the old Code did not venture — a lawyer’s receipt of documents that were intended for someone else but were sent to the lawyer by accident. This problem has perplexed bar association ethics committees for nearly two decades, and many (but not all) have imposed significant obligations on the receiving lawyer — see, e.g., ABA Formal Ethics Op. 92-368 (1992) (lawyer who receives misdirected communications from another lawyer “should notify the sending lawyer of their receipt and should abide by the sending lawyer’s instructions as to their disposition” — withdrawn in 2005 as inconsistent with ABA Model Rule 4.4); N.Y. County Lawyers Op. 730 (2002) (lawyers receiving misdirected communications containing privileged information “share responsibility for ensuring that the fundamental principle that client confidences be preserved — the most basic tenet of the attorney client relationship — is respected”); N.Y. City Bar Op. 2003-4 (2003) (“lawyer who receives a misdirected communication containing confidences or secrets should promptly notify the sender and refrain from further reading or listening to the communication, and should follow the sender’s directions regarding destruction or return of the communication”) (emphasis added); Pa. Bar Ethics Op. 2005-22 (2005) (whether receiving lawyer may use misdirected communication is a question “of substantive law, not ethics”).

Rule 4.4(b) takes a much simpler route. It provides:

(b) A lawyer who receives a document relating to the representation of the lawyer’s client and knows or reasonably should know that the document was inadvertently sent shall promptly notify the sender.

This rule is a model of clarity. The only obligation imposed by Rule 4.4(b) is to “promptly notify the sender.” Rule 4.4(b) does not require the receiving lawyer to destroy the documents, refrain from reading them, or follow the sender’s instructions. A lawyer who cannot resist the temptation to read a misdirected document, even when the lawyer “knows or reasonably should know” that the document was not intended for his eyes, will not be subject to discipline under Rule 4.4(b) for doing so.

However — and this is a big “however” — the bare text of the rule is misleading, because other laws and rules may impose heavier obligations on receiving counsel. This point is hammered home in Comments [2] and [3], which provide as follows (with emphasis added):

[2] … Although this Rule does not require that the lawyer refrain from reading … the document, a lawyer who reads or continues to read a document that contains privileged or confidential information may be subject to court-imposed sanctions, including disqualification and evidence preclusion. Whether the lawyer is required to take additional steps, such as returning the original document, is a matter of law beyond the scope of these Rules … Similarly, this Rule does not address the legal duties of a lawyer who receives a document that the lawyer knows or reasonably should know may have been wrongfully obtained by the sending person. …

[3] Refraining from reading or continuing to read a document once a lawyer realizes that it was inadvertently sent to the wrong address and returning the document to the sender honors the policy of these Rules to protect the principles of client confidentiality. Because there are circumstances where a lawyer’s ethical obligations should not bar use of the information obtained from an inadvertently sent document, however, this Rule does not subject a lawyer to professional discipline for reading and using that information. Nevertheless, substantive law or procedural rules may require a lawyer to refrain from reading an inadvertently sent document, or to return the document to the sender, or both. Accordingly, in deciding whether to retain or use an inadvertently received document, some lawyers may take into account whether the attorney client privilege would attach. But if applicable law or rules do not address the situation, decisions to refrain from reading such documents or to return them, or both, are matters of professional judgment reserved to the lawyer. See Rules 1.2, 1.4.

Among the “procedural rules” that govern the receipt of inadvertently sent documents is Rule 26(b)(5)(B) of the Federal Rules of Civil Procedure, added in 2006, which governs a lawyer’s obligations upon receiving inadvertently produced privileged information. Rule 26(b)(5)(B) provides as follows (with emphasis added):

(B) Information Produced. If information produced in discovery is subject to a claim of privilege or of protection as trial-preparation material, the party making the claim may notify any party that received the information of the claim and the basis for it. After being notified, a party must promptly return, sequester, or destroy the specified information and any copies it has; must not use or disclose the information until the claim is resolved; must take reasonable steps to retrieve the information if the party disclosed it before being notified; and may promptly present the information to the court under seal for a determination of the claim. The producing party must preserve the information until the claim is resolved.

Thus, Rule 26(b)(5)(B) is much more demanding than Rule 4.4(b). Moreover, even before the 2006 addition of Rule 26(b) (5)(B), some courts found common law reasons to sanction attorneys who took advantage of misdirected documents. [See, e.g., American Express v. Accu-Weather, Inc., 1996 WL 346388 (S.D.N.Y. 1996) — sanctioning attorneys who ignored opposing counsel’s instructions to return a misaddressed, unopened FedEx package containing privileged documents.]

As to waiver, Comment [2] to Rule 4.4 also notes that whether the privileged status of a document has been waived “is a matter of law beyond the scope of these Rules” — but that question is now squarely addressed, at least in the federal courts, by new Rule 502 of the Federal Rules of Evidence (“Attorney Client Privilege and Work Product;. Limitations on Waiver”), which took effect in September 2008. Rule 502 provides as follows:

(b) Inadvertent disclosure. When made in a federal proceeding or to a federal office or agency, the disclosure [of a communication or information covered by the attorney-client privilege or work product protection] does not operate as a waiver in a federal or state proceeding if:

(1) the disclosure is inadvertent;

(2) the holder of the privilege or protection took reasonable precautions to prevent disclosure; and

(3) the holder promptly took reasonable steps to rectify the error, including (if applicable) following Fed. R. Civ. P. 26(b)(5)(B).

Thus, many provisions of the law outside Rule 4.4(b) may restrict a lawyer’s options after receiving inadvertently transmitted documents, and may impose additional obligations on the receiving lawyer beyond Rule 4.4(b). It makes no difference whether the sender is opposing counsel, opposing counsel’s client, or a third party who incorrectly addresses the documents — Rule 4.4(b) covers all of these. In all instances, Rule 4.4(b) requires the receiving lawyer to “promptly notify the sender,” whoever the sender may be.

Rule 4.5: Communication After Incidents Involving Personal Injury or Wrongful Death

Most of the new rules governing advertising and solicitation are the same as the old rules on those subjects, but Rule 4.5 contains something new — language directed specifically at defense lawyers. By way of brief background, Rule 4.5(a) comes into play after a “specific incident” that causes personal injury or death. According to Comment [5] to Rule 7.3 (the general rule governing solicitation):

A “specific incident” is a particular identifiable event (or a sequence of related events occurring at approximately the same time and place) that causes harm to one or more people. Specific incidents include such events as traffic accidents, plane or train crashes, explosions, building collapses, and the like.

However, whereas Rule 7.3(e) governs communications to victims by plaintiffs’ lawyers seeking to represent the injured victims or their families in cases arising out of a specific incident, Rule 4.5 (a) governs communications from defense lawyers seeking to defend the alleged or apparent wrongdoers in a “specific incident.” Rule 4.5(a) provides as follows:

(a) In the event of a specific incident involving potential claims for personal injury or wrongful death, no unsolicited communication shall be made to an individual injured in the incident or to a family member or legal representative of such an individual, by a lawyer or law firm, or by any associate, agent, employee or other representative of a lawyer or law firm representing actual or potential defendants or entities that may defend and/or indemnify said defendants, before the 30th day after the date of the incident, unless a filing must be made within 30 days of the incident as a legal prerequisite to the particular claim, in which case no unsolicited communication shall be made before the 15th day after the date of the incident.

Most of Rule 4.5(a) is similar to DR 7-111(A), but Rule 4.5(a) deletes the reference in old DR 7-111(A) to a lawyer “seeking to represent the injured individual … in a proceeding arising out of the incident” (which applied only to plaintiffs’ lawyers) and substitutes the phrase, “representing actual or potential defendants or entities that may defend and/or indemnify said defendants,” which applies to defense lawyers. Thus, a lawyer retained by a defendant or by the defendant’s insurer to defend a potential tortfeasor may not initiate contact with a victim (or the victim’s family) to propose a settlement, to gather facts, or even to apologize, until the 30th day after the incident. The rule imposes a total ban on unsolicited communications between defense lawyers and accident victims and their families for 29 full days.

The restrictions on defense lawyers in Rule 4.5(a) mirror the restrictions on plaintiffs’ lawyers in Rule 7.3(e), which bars plaintiffs’ lawyers from soliciting clients relating to a specific incident involving potential personal injury or wrongful death claims until the 30th day after the incident. Thus, during the 29-day blackout period after a mass disaster (or any accident) during which plaintiffs’ lawyers cannot solicit clients, defense lawyers cannot solicit settlements, statements, or information from the victims or their families, and may not otherwise communicate with the victims or their families. In other words, the victims and their families are out of bounds for both plaintiffs’ lawyers and defendants’ lawyers until the 30th day after an accident. This levels the playing field between plaintiff and defendant lawyers, and insures that defendants will not pick off potential plaintiffs with cheap settlements before they have had a reasonable opportunity to grieve or heal, and to consult counsel.

However, as Comment [1] to Rule 4.5 states, “if potential claimants are represented by counsel, it is proper for defense counsel to communicate with potential plaintiffs’ counsel even during the 30-day (or 15-day) period.” Thus, Rule 4.5(a) bars communications only with parties, not with their counsel. Moreover, Rule 4.5(a) applies only to “unsolicited communications,” so if a plaintiff for any reason initiates contact with a defendant’s lawyer (which is possible, but not likely), the defense lawyer may take the call and communicate with the victim, subject only to the general restrictions imposed by Rule 4.3 on communications between a lawyer and unrepresented persons. But the defense lawyer will be wise to document and confirm that the plaintiff initiated and solicited the communication.

Rule 6.4: Law Reform Activities Affecting Client Interests

Rule 6.4, which had no equivalent in the old Disciplinary Rules, sets parameters for lawyers working with law reform organizations such as bar association committees. Because so many lawyers work with law reform organizations, I suspect that the rule will probably affect half or more of all lawyers at one time or another. It provides as follows:

A lawyer may serve as a director, officer or member of an organization involved in reform of the law or its administration, notwithstanding that the reform may affect the interests of a client of the lawyer. When the lawyer knows that the interests of a client may be materially benefitted by a decision in which the lawyer actively participates, the lawyer shall disclose that fact to the organization, but need not identify the client. When the lawyer knows that the interests of a client may be adversely affected by a decision in which the lawyer actively participates, the lawyer shall disclose that fact to the client.

Rule 6.4 is based verbatim on ABA Model Rule 6.4, except for the last sentence, which is not in the ABA Model Rule and was not proposed by COSAC, but rather was written sua sponte by the Courts.

The first sentence of Rule 6.4 states the obvious: a lawyer may serve as a director, officer or member of an organization that works to improve (“reform”) the law or the administration of law even though the reforms may adversely or favorably affect the interests of the lawyer’s clients. If the lawyer actively participates in a decision of the organization that will materially benefit a client, however, the second sentence of Rule 6.4 requires the lawyer to disclose that fact (but not the client’s identity) to the organization.

The phrase “actively participates” is not defined, but in my view a lawyer would be actively participating by doing such things as taking part in discussion or debate, voting, or drafting a policy paper. In other words, any of those activities would trigger Rule 6.4’s disclosure obligation. Rule 6.4 does not require the lawyer to abstain or recuse herself from discussion — it merely requires that she disclose the fact that a client may be materially benefitted.

Once the lawyer makes that disclosure, the lawyer has no further obligations to the law reform organization, but the organization can act on the disclosure in whatever manner it deems best. The organization, like a client who is informed that another client may benefit from the lawyer’s advice, will have a broad range of options. For example, the organization may: (1) allow the lawyer to participate actively and accept the lawyer’s views at face value (like a client who trusts her lawyer to give candid advice despite the competing interests of another client); (2) allow the lawyer to participate actively but discount the lawyer’s views as slanted toward the client who may benefit; (3) restrict the lawyer’s participation (e.g., by not allowing the lawyer to vote, or by allowing the lawyer to listen but not to speak during debate); (4) ask the lawyer to leave the room or otherwise not to participate at all in the particular decision; or (5) in cases of serious conflict, remove the lawyer from the committee, from the organization’s board, or even from the organization itself. The appropriate option will depend on all of the circumstances and on the organization’s policies. Rule 6.4 does not speak to these options and does not favor any option over any other option. It merely requires the lawyer to make disclosure so that the organization can decide what option to choose.

The one-paragraph Comment to Rule 6.4, drawn partly from the last part of old EC 8-4, explains the Rule as follows:

Lawyers involved in organizations seeking law reform generally do not have a client-lawyer relationship with the organization. Otherwise, it might follow that a lawyer could not be involved in a bar association law reform program that might indirectly affect a client. For example, a lawyer concentrating in antitrust litigation might be regarded as disqualified from participating in drafting revisions of rules governing that subject. … A lawyer is also professionally obligated to protect the integrity of the law reform program by making an appropriate disclosure within the organization when the lawyer knows a private client might be materially affected.

The last two words of the Comment point up a possible flaw in Rule 6.4. COSAC had recommended a rule that required a lawyer to make disclosure to the organization whenever a client of the lawyer would be “materially affected” — which was the test in EC 8-4 and is the test in the Comment to Rule 6.4 (quoted earlier) — but the Courts substituted the ABA formulation, “materially benefitted.” Is that too narrow? Florida and New Hampshire thought it was too narrow — both states substituted the phrase “materially affected” in their versions of Rule 6.4, and with good reason. Conceptually, there is no difference between a lawyer who actively supports a measure that might materially benefit a client and a lawyer who actively opposes a measure that might materially harm a client. Yet at first glance Rule 6.4 appears to require disclosure only when the lawyer’s client may be materially benefitted, not when the client may be materially harmed. If that is the correct interpretation, then using the term “benefitted” instead of “affected” was a bad decision by the ABA and a bad decision by the Courts.

In my opinion, however, Rule 6.4 is not so narrow, because “the interests of a client may be materially benefitted by a decision in which the lawyer actively participates” whenever the organization debates any issue in which the outcome may materially affect the interests of the lawyer’s client. Consider the example in the Comment —drafting proposed revisions of rules governing antitrust law. While the organization is in the process of deciding the content of the revised proposals, the outcome of the debate is uncertain. If the organization ultimately decides to recommend tougher rules and harsher penalties (e.g., mandatory prison sentences for guilty executives), then that decision could materially harm the lawyer’s antitrust clients. But if the organization decides to oppose tougher rules and to recommend more lenient penalties (perhaps on grounds that the free market will improve society more than government intervention), then that decision could materially benefit the lawyer’s antitrust clients. The ultimate decision may harm the client, but it may help the client. During the debate, the outcome is necessarily up in the air.

Thus, at the outset of the debate, Rule 6.4 requires a lawyer who wishes to actively participate in the decision to make the disclosure. In other words, if the lawyer’s client may be negatively affected if the decision goes one way, we can also say logically that the lawyer’s client may be positively affected (i.e., “materially benefitted”) if the decision goes the opposite way. Q.E.D. But it would have been so much easier to see this result if the Courts had simply followed COSAC’s recommendation — and nearly four decades of EC 8-4 — by using the phrase “materially affected” instead of “materially benefitted” in the text of Rule 6.4.

The Courts also made a mistake in Rule 6.4 by adding the last sentence, which came out of nowhere. That new sentence, which has no equivalent in any other jurisdiction (and is thus a radical experiment), requires a lawyer to tell a client whenever the lawyer knows that “the interests of a client may be adversely affected by a decision in which the lawyer actively participates.” Are the Courts trying to discourage lawyers from participating in law reform activities? I am sure the Courts were not intending to do that, but that will be the likely effect. I even wonder whether disciplining a lawyer for violating the last sentence (i.e., for failing to disclose to a client) would violate the First Amendment by penalizing a lawyer’s participation in organizations engaged in law reform activities.

The price exacted by Rule 6.4 may be high. Lawyers do not want to say to their clients, “I want you to know that I am working with a law reform organization and am actively participating in formulating a decision that could adversely affect your interests.” How will the client respond? Will the client say: “Gee, Roy, that’s great. We admire your civic spirit — and frankly, the law has allowed companies like ours to get away with a lot of questionable things for a long time and it’s about time someone amended the law and cracked down on us.” I … don’t … think … so. The client is much more likely to say, “Why are you doing that? You know how competitive our business is and how tough the economic climate is right now, and you know how much we contribute to the country — jobs, innovation, products and services that people want, sponsorship of charitable events. We would prefer that you not participate in the debate over that decision. In fact, if you think our company is doing something wrong, maybe you don’t want us as a client anymore.”

No doubt most clients will respond somewhere in between — maybe something like, “Thanks for telling us. We hope you will convey to the organization how much our company contributes to the world, and how much we are already struggling under the weight of government regulations” — but many lawyers will not want to find out the client’s response. Instead, the lawyers will recuse themselves from participating in decisions that could harm the client, or will resign from the committee or organization altogether to avoid getting into such an awkward situation. Either way, law reform organizations will be deprived of a lot of legal talent as lawyers restrict their law reform activities to avoid uncomfortable conversations with clients.

Of course, disclosure obligations to clients do not stem from Rule 6.4 alone. The general conflict of interest rule, Rule 1.7, may also require disclosure about law reform activities in some circumstances. As the Comment to Rule 6.4 states, in a passage I omitted from my earlier quote of the same Comment:

In determining the nature and scope of participation in such activities, a lawyer should be mindful of obligations to clients. A lawyer’s identification with the organization’s aims and purposes, under some circumstances, may give rise to a personal-interest conflict with client interests implicating the lawyer’s obligations under other Rules, particularly Rule 1.7.

Rule 1.7, however, has a considerably higher threshold than the last sentence of Rule 6.4 in measuring whether disclosure is mandated. Rule 1.7(b)(2) provides that (unless the lawyer reasonably believes that the lawyer can provide competent and diligent representation to the client, and the lawyer obtains the client’s informed consent) “a lawyer shall not represent a client if a reasonable lawyer would conclude that … there is a significant risk that the lawyer’s professional judgment on behalf of a client will be adversely affected by the lawyer’s … personal interests.” In my view, except in extreme circumstances, a reasonable lawyer will not perceive a “significant risk” that law reform work will adversely affect the lawyer’s professional judgment on behalf of a client. Unless a lawyer identifies deeply with the aims of a law reform organization dedicated to measures that would devastate a client’s business, a reasonable lawyer will ordinarily believe that the lawyer can continue to offer her clients her honest professional judgment despite the lawyer’s active work toward some legal reforms that may be harmful to the client.

In sum, Rule 1.7 already requires disclosure in situations where disclosure is necessary to protect a client. Rule 6.4 goes too far — further than the rules in any other U.S. jurisdiction — and the Courts ought to delete the last sentence before it causes irreparable harm to law reform organizations and to society at large.

Rules 7.1 Through 7.5: Advertising, Solicitation, Specialization & Firm Names

The new Rules of Professional Conduct contain nothing new on advertising, solicitation, specialization, or law firm names. Virtually every paragraph in Rules 7.1 through 7.5 had an identical or nearly identical counterpart in the amended Disciplinary Rules that the Courts adopted effective Feb. 1, 2007, less than twenty months before the December 2008 announcement that the Courts would be adopting new Rules of Professional Conduct effective April 1, 2009. Since the Courts had taken the lead in drafting the 2007 rules, and had done so quite recently, COSAC saw no point in recommending changes — and the Courts apparently saw no point in making any changes on their own.

The Courts did not even delete the language in Rule 7.1(c) that was declared unconstitutional under the First Amendment and enjoined by a federal district court in Alexander v. Cahill, 634 F.Supp.2d 239 (N.D.N.Y. 2007). The State has appealed the Alexander decision, and oral argument was held before the Second Circuit way back on Jan. 22, 2009 (with then-Circuit-Judge Sotomayor as one of the three panelists), but the Second Circuit still has not issued a decision. Although New York has now adopted a Model Rules format, the appeal retains vitality because Rule 7.1(c) retains exactly the same provisions that were declared unconstitutional in Alexander. Indeed, I expect the loser in Alexander to seek certiorari in the United States Supreme Court — but we first have to wait for the Second Circuit to issue its opinion.

Rule 8.1: Candor in the Bar Admission Process

Non-lawyers — including aspiring members of the New York Bar — are not subject to the Rules of Professional Conduct, but Rule 8.1 looks backward, in effect, to penalize bar applicants if the disciplinary authorities discover that an applicant lied or failed to correct a lie on a bar application to New York or any other jurisdiction, foreign or domestic. Rule 8.1(a)(1) provides as follows:

(a) A lawyer shall be subject to discipline if, in connection with the lawyer’s own application for admission to the bar previously filed in this state or in any other jurisdiction, or in connection with the application of another person for admission to the bar, the lawyer knowingly:

(1) has made or failed to correct a false statement of material fact ….

This language is similar in substance to old DR 1-101, but Rule 8.1 makes clear that the rule governs bar admission applications in any jurisdiction, not just New York — a point that was not expressly stated in DR 1-101(A). Thus, the rule regulates (a) law students who lie on their New York bar application, (b) law students who were truthful on their New York bar applications but lied on applications for bar admission elsewhere, (c) lawyers from other states who lied when applying for admission to the New York bar, and (d) lawyers from New York who lied when applying for admission elsewhere.

Applicants in the first three categories who are denied admission to the New York bar (whether based on false statements or any other reason) never become subject to Rule 8.1 because New York’s disciplinary authorities have jurisdiction only over members of the New York bar. But people in the fourth category (New York lawyers who lied on applications for admission to any other jurisdiction’s bar) may be disciplined under Rule 8.1 whether or not they gained admission in the other jurisdiction. And Rule 8.1 imposes no time limit on the look-back period, so lawyers who lie or fail to correct a lie on a bar application will live with the guillotine blade of Rule 8.1 hanging over their New York law licenses as long as they remain members of the New York bar, which could be decades.

Comment [2] to Rule 8.1 adds an interesting constitutional observation. It says:

This Rule is subject to the provisions of the Fifth Amendment to the United States Constitution and corresponding provisions of state constitutions. A person relying on such a provision in response to a question, however, should do so openly and not use the right of nondisclosure as a justification for failure to comply with this Rule.

Thus, Rule 8.1 is not intended to override the protections of the Fifth Amendment, but if a bar applicant wants to invoke the Fifth Amendment, she must do so openly. The clear implication of this Comment is that if a bar applicant withholds material information based on the Fifth Amendment but fails to cite the Fifth Amendment expressly, the applicant can later be found in violation of Rule 8.1 for making a false statement of material fact. That is as it should be. A bar applicant is like a defendant who takes the witness stand. He is entitled to the protection of the Fifth Amendment if he decides not to answer a question truthfully, but he has to tell the jury that he is doing so. The Fifth Amendment is not a license to lie.

Regarding a lawyer’s affidavit or other involvement in another person’s bar application — a subject governed by a much less frequently invoked part of Rule 8.1 —the new Rule is also an improvement. DR 1-101(B)’s awkward phrase “shall not further the application for admission to the bar of another person that the lawyer knows to be unqualified in respect to character, education, or other relevant attribute” has now been replaced by Rule 8.1’s much simpler prohibition on making or failing to correct a material false statement “in connection with the application of another person for admission to the bar.”

Rule 8.4: Misconduct

Rule 8.4 generally repeats all of the categories of misconduct that were listed in old DR 1-102, but Rule 8.4(a) is phrased somewhat differently from its Code predecessor. Rule 8.4(a) provides:

A lawyer or law firm shall not:

(a) violate or attempt to violate the Rules of Professional Conduct, knowingly assist or induce another to do so, or do so through the acts of another…

This language is similar in substance to a combination of DR 1-102(A)(1) (lawyer or law firm shall not “[v]iolate a Disciplinary Rule”) and DR 1-102(A)(2) (lawyer or law firm shall not “[c]ircumvent a Disciplinary Rule through actions of another”), but Rule 8.4(a) goes further, in two ways.

First, Rule 8.4(a) adds the offense of attempt by providing that a lawyer shall not “attempt to violate” the Rules. Thus, a lawyer who sets out to violate a rule but changes his mind or is foiled in his plan might still be cited for attempting to violate the rule. The same will be true of (1) a lawyer who unsuccessfully tries to talk someone else (e.g., a secretary, associate, or client) into engaging in conduct that would violate the Rules if engaged in by the lawyer; or (2) a lawyer who succeeds in talking some other person into engaging in prohibited conduct even though that person changes his mind or is thwarted before completing the improper mission.

Second, Rule 8.4(a) adds that a lawyer shall not “knowingly assist or induce another” to violate the Rules. This clause is very similar to the next one, which prohibits a lawyer from violating or attempting to violate a rule “through the acts of another” (thus jettisoning the Code’s stilted word “circumvent”), but the Courts have kept both phrases, so they apparently intend the “assist and induce” clause to be a new and distinct transgression, beyond violating or attempting to violate a rule through the acts of another. My guess is that lawyers who engage in misconduct involving third parties, such as personal injury lawyers who hire investigators to create false evidence or who send runners to hospitals and accident scenes in search of clients, will be charged both with knowingly assisting or inducing another to violate a rule and with doing so through the acts of another. I can envision few third-party situations in which only one of those two clauses will apply, but at least the Courts have covered all of the bases.

Conclusion

I have now completed my initial exploration of the significant differences between the new New York Rules of Professional Conduct and the old New York Code of Professional Responsibility, and I can make some general observations. Most of the new features in the new Rules of Professional Conduct come in Article 1 through Article 3. Those three articles contain a total of 31 separate rules, and it has taken me seven months of articles to analyze the new and unusual features of those rules. Articles 4 through 8, in contrast, consist of 23 separate rules (almost exactly 75% of the number of rules in Articles 1 through 3), yet I have covered all of those changes in a single article.

Why the difference? The main reason is that many of the provisions in Articles 1 through 3 had no equivalent in the old Code of Professional Responsibility, and many other provisions in Articles 1 through 3 reflect significant amendments to their Code counterparts. They thus require a lot of explanation. In contrast, few of the provisions in Articles 4 through 8 are new or different when compared to the Code.

Moreover, the Rules and Comments in Articles 4 through 8 are relatively short — in the aggregate, they take up only about one-third of the pages in the new Rules.

In short, the vast majority of the big changes in the new Rules, when we compare them to the old Code, appear in Articles 1 through 3.

The new Rules are a vast improvement over the old Code in many respects. Of course, as the Vice-Chair and Chief Reporter for COSAC, I am personally disappointed that the Courts rejected so many of the provisions that we debated and refined during more than five years of hard work. During that time, COSAC — which is itself composed of two dozen lawyers from all around New York State, representing all types of law practice and all types of clients — solicited public comment from other members of the bar and made many material changes based on those comments. (I speak in this article only for myself, of course, and not for COSAC or its other members.)

The Courts, regrettably, did not solicit any public comments, even on provisions that they wrote from scratch during their hasty review. Nor did the Courts issue any minutes, explanatory notes, or public statements to assist lawyers in interpreting the language of the Rules and understanding the policies and the reasoning behind them. I can understand that the Courts may have wanted to keep their deliberations secret during the review process to avoid attempts at lobbying by interested parties, but I do not understand why those deliberations still remain secret.

I hope that in the future the Courts will open up their rulemaking process to allow for extensive public comment on proposed new or amended Rules of Professional Conduct, and will release legislative history or other materials to provide guidance to lawyers about the meaning and purpose of each Rule. In my view, those two steps — soliciting public comments and providing meaningful guidance beyond the bare text of the Rules — will result in better Rules and wider compliance with those Rules. That can only increase respect for lawyers, for the Courts, and for our entire system of justice.

Professor Roy Simon is the author of Simon’s New York Rules of Professional Conduct Annotated. The brand new 2015 edition analyzes more than 100 new cases, ethics opinions, and other developments critical to New York practice. It’s the legal ethics bible for all New York-area lawyers. To purchase, click here.

In addition, Professor Simon advises lawyers and law firms on questions of professional conduct and serves as an expert witness in cases raising issues of lawyer conduct. You may reach Professor Simon at 516-463-5289 or Roy.Simon@hofstra.edu.

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Roy Simon