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Ethical Issues with Employee Acts or Omissions

By Gina Hendryx, General Counsel


A supervisory lawyer must take reasonable steps to ensure the compliance of firm lawyers with ethical standards.  Oklahoma Rule of Professional Conduct 5.1 requires partners and supervisory lawyers make reasonable efforts to assure that other lawyers in the firm conform to the Rules.  Requirements upon supervisory lawyers include:

  1. Partners or lawyers with managerial authority shall make reasonable efforts to ensure that the firm has in effect, measures to provide assurance that all lawyers in the firm conform to ethical standards.
  2. Lawyers with direct supervisory authority over another lawyer shall make reasonable efforts to ensure that the other lawyer conforms to ethical standards.

Paragraph A includes members of a partnership, the shareholders in a law firm organized as a professional corporation, and members of other associations organized to practice law. This includes lawyers with managerial authority in a legal services organization or in a government setting. These managerial lawyers must establish internal policies and procedures designed to provide reasonable assurance that all lawyers in the firm will comply with the Oklahoma Rules of Professional Conduct. These policies and procedures should address detection and resolution of conflicts of interest, docketing procedures, client fund and property accounting, and ensure that inexperienced lawyers are properly supervised. The adequacy of these measures will be weighed by factors including the type of practice, size of the firm and structure of the firm. For example, a small firm of experienced lawyers may require only “informal supervision and periodic review of compliance with the required systems,” while at larger firms or in practice situations in which complex ethical issues often arise, “more elaborate measures may be necessary.” Oklahoma Rule of Professional Conduct 5.1, cmt. [3]. See In Re Cohen, 847 A.2d 1162 (D.C. 2004) (firm failed to offer associates rudimentary ethics training or mechanism for review and guidance by supervisors).

Paragraph B applies to lawyers who have supervisory authority over the work of other lawyers in a firm. In In Re Ritger, 556 A.2d 1201 (N.J. 1989) the court held “when lawyers take on the significant burdens of overseeing the work of other lawyers, more is required that the supervisor simply be available.” There are many lawyer ethics cases from other jurisdictions disciplining supervisory attorneys for failing to supervise and train inexperienced associates. Assigning excessive caseloads to inexperienced lawyers may also violate Rule 5.1(b). ABA Formal Ethics Op. 06-441 (2006) states that it is the supervisory lawyer’s responsibility to ensure that subordinate’s caseload is not so excessive that lawyer cannot provide competent and diligent representation to the clients.

Paragraph C of Rule 5.1 states that a lawyer may be held responsible for another lawyer’s ethical violations if the lawyer “orders” or “ratifies” the specific conduct involved or fails to take appropriate remedial action upon learning of the improper conduct. See e.g. In Re Weston, 442 N.E.2d 236 (Ill. 1982)(lawyer disciplined for failing to correct problems caused by mentally ill associate once they became known).

Whether a lawyer may be liable civilly or criminally for another lawyer’s conduct is a question of law beyond the scope of the Rules. See Rule 5.1, cmts. [7] and [8].

SUPERVISION OF NON-LAWYERS

At some time in most forms of legal practice, the lawyer will employ the assistance of a non-lawyer. These persons include the traditional secretary and bookkeeper, but more and more lawyers are employing the services of nontraditional aides including engineers, nurses, computer specialists and lobbyists. Regardless of title, non-lawyers are not bound by the ethical rules that apply to attorneys. Therefore, the rules require the lawyer make reasonable efforts to ensure that the non-lawyer employee or independent contractor’s conduct is compatible with the professional obligations of the lawyer.

Oklahoma Rule of Professional Conduct 5.3 sets out the lawyer’s responsibilities regarding non-lawyer assistants. As with Rule 5.1, lawyers with managerial authority over non- lawyers must make reasonable efforts to establish internal policies and procedures designed to provide assurance that the non-lawyers will act in a way compatible with the Rules of Professional Conduct. These policies and procedures should include appropriate instruction and supervision pertaining to the ethical aspects of their jobs. Of particular importance is the duty of confidentiality owed to the clients and the obligation to not reveal information relating to a representation. In State ex. Rel. Okla. Bar Ass’n v. Mayes, 977 P.2d 9 (Okla. 1999), a lawyer was found to have violated Rule 5.3 by failing to make reasonable efforts to ensure that non-lawyer assistant adhered to his professional obligations. He was also found to have failed to take reasonably remedial measures.

A lawyer who turns over the day to day operation of a law office to a non-lawyer assistant does so at her own peril. In State ex. rel. Okla. Bar Ass’n v. Patmon, 939 P.2d 1155 (Okla. 1997), the lawyer regularly allowed non-lawyer assistant to sign lawyer’s name and file court documents with oversight. Assistant filed a misleading motion and lawyer was disciplined for inadequate supervision.

Maintaining client funds is a nondelegable fiduciary responsibility. Lawyers may employ non-lawyer assistants such as bookkeepers and/or accountants to assist in fulfilling this duty, however lawyers must provide adequate training and supervision to ensure that ethical and legal obligations are met. With regard to client funds, “there must be some system of timely review and internal control to provide reasonable assurance that the supervising lawyer will learn whether the employee is performing the delegated duties honestly and competently.” In re Cater, 887 A.2d 1 (D.C. 2005).

A lawyer who is a partner or a direct supervisor of a non-lawyer has an obligation to take remedial action if the lawyer learns of misconduct by the non-lawyer in time to avoid or mitigate the consequences of the conduct. In State ex. rel. Okla. Bar Ass’n v. Taylor, 4 P.3d 1242 (Okla. 2000), the lawyer was disciplined for ratifying the conduct of his wife/office manager who improperly endorsed client’s settlement checks.

Courts generally hold the following as nondelegable tasks:
  1. Establishing a lawyer/client relationship
  2. Maintaining direct contact with clients
  3. Giving legal advice
  4. Exercising legal judgment

OF COUNSEL RELATIONSHIPS

The term “of counsel” denotes a relationship that is “close, regular and personal.” ABA Formal Ethics Op. 90-357 (1990). Most malpractice carriers require “of counsel” lawyers to be covered on the firm’s insurance policy. Whether ethics rules on supervision apply depends on the relationship between lawyers and not on the designation. “Of counsel” is most likely an inappropriate designation if there is a supervisory role of one over another.

ORPC 5.1 and 8.4 (a) impose disciplinary responsibility for the conduct of a partner, associate or subordinate. “Whether a lawyer may be liable civilly or criminally for another lawyer’s conduct is a question of law beyond the scope of these Rules. ORPC 5.1 cmt. [7].

ABOUT THE AUTHOR

Gina Hendryx is the General Counsel for the Oklahoma Bar Association. A licensed attorney for the past 25 years, she received her J.D. and B.S. degrees from OCU. She supervises a staff of 12 and serves as the association’s counsel on other legal matters. She works with the Professional Responsibility Commission and serves as a liaison to the OBA Board of Governors, OBA committees, the courts, and other local and national entities concerning lawyer ethics issues.

Originally published in the Oklahoma Bar Journal -- Dec. 12, 2009 -- Vol. 80, No. 33