Metadata – What is it and Why Should I Care?

I must be honest.  Though I had an idea what metadata was, and I knew it should be “scrubbed” from documents sent to opposing counsel, I did not really know exactly what it entailed.  I recently searched for a non-technical definition for metadata.  I could not find an entry under Black’s Law Dictionary and Webster’s definition was “data that provides information about other data.”  Helpful, right?  So, I delved further and found a publication by the National Information Standards Organization that purported to explain metadata.  “Metadata is structured information that describes, explains, locates, or otherwise makes it easier to retrieve, use or manage an information resource.  Metadata is often called data about data or information about information.”  http://www.niso.org/publications/press/UnderstandingMetadata.pdf.  This did not help much either, so I continued my search of a simple definition of metadata.

I found my answer in, 2009 FEO 1 and the Pennsylvania Formal Opinion 2009-100.  Thankfully, these opinions present the definition of metadata in a simple fashion that those of us with low-tech skills understand.  “Metadata … is data contained within electronic materials that is not ordinarily visible to those viewing the information.  Although most commonly found in documents created in Microsoft Word, metadata is also present in a variety of other formats, including spreadsheets, PowerPoint presentations, and Corel WordPerfect documents.”  2009 FEO 1 quoting Pennsylvania Formal Op. 2009-100.  Metadata can include information about a document such as the date and time the document was created, the computer on which it was created, the last time it was saved, track changes showing what was added or deleted to the document, or comments made during the editing process.  This information can be revealed to a recipient by right-clicking, clicking on an icon, or using software to reveal the metadata.  Id.  These explanations make much more sense.

Not only does 2009 FEO 1 present a helpful definition of metadata, it addresses why lawyers should be concerned about disclosure of metadata and the duty to ensure this does not occur.  The danger of metadata in the practice of law is that it may contain confidential client information.  We are all aware that RPC 1.6(a) prohibits lawyers from revealing confidential client information unless it falls under a certain exception, but what is a lawyer’s duty regarding metadata that is “not ordinarily visible?”  The opinion states that a lawyer must use “reasonable care to prevent the disclosure of confidential information hidden in metadata when transmitting an electronic communication…”  What constitutes reasonable care depends on the circumstances and hinges on the following factors:

(i)                  The sensitivity of the confidential information that may be disclosed;

(ii)                The potential adverse consequences from disclosure;

(iii)               Any special instructions or expectations of a client; and

(iv)              The steps that the lawyer takes to prevent the disclosure of metadata.

Rather than having to analyze these factors each time a document is sent electronically, it is probably a better idea to use a metadata “scrubbing” application to remove any embedded information before sending electronic files to others.  These applications can be found online and many are reasonably priced.  However, before scrubbing metadata, make sure you are not inadvertently violating any disclosure duties under the law.  This is especially important when forwarding electronic documents in response to a subpoena or formal discovery request.  For example, Rule 26(b)(1) of the NC Rules of Civil Procedure states, “[f]or the purposes of these rules regarding discovery, the phrase ‘electronically stored information’ includes reasonably accessible metadata that will enable the discovering party to have the ability to access such information as the date sent, date received, author, and recipients. The phrase does not include other metadata unless the parties agree otherwise or the court orders otherwise upon motion of a party and a showing of good cause for the production of certain metadata.”

Bottom line, metadata is potentially embedded in every document drafted.  Lawyers must concern themselves with metadata in order to remain compliant with NC rules, statutes, and ethics opinions.

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Checking Under the Hood of Your Trust Account

Are you doing the ethical equivalent of checking under the hood and kicking the tires of your trust account? If not, you better make some time to do so, and soon.   Over the last several years, the State Bar has made a concerted effort to step up enforcement concerning supervision of trust accounts, or lack thereof.  It primarily has done this by aggressively pursuing disciplinary action against attorneys who fail to satisfy what it considers to be adequate supervision and oversight of trust accounts.

A significant number of attorneys have received public discipline, including active or stayed suspensions.  Many of these individuals were experienced, well- respected attorneys with previously unblemished disciplinary records and in many instances very impressive credentials.  If you believe you are immune because you’re in a large or well-established firm or because you’re not the partner or principal directly responsible for the trust account, think again.  This is an issue that potentially affects any lawyer in North Carolina whose firm handles trust funds.  The most common reasons that lawyers have gotten caught in this disciplinary net is either because: (1) they placed too much faith in a trusted employee, who betrayed it, or (2) they abdicated, rather than delegated, their responsibilities concerning the trust account to an employee or outside bookkeeper or accountant.

It is not possible in this format to provide an exhaustive list of the potential issues or pitfalls on this subject.  Instead, I will cover three of the most common areas that have ensnared some very good lawyers over the last several years.  There also is an e-publication available on our Firm website that addresses these issues entitled, “Tips for Safeguarding Client Trust Funds.”  http://brockerlawfirm.com/wp-content/uploads/2014/02/Trust-Funds.pdf

First, all the lawyers in a firm must ensure that they have an adequate system in place to comply with the trust account rules, including adequate supervision of non-lawyers.  In the last few years, if trust funds were stolen or even just misapplied by employees or other non-lawyers and there was an inadequate system in place concerning trust account supervision (or none at all), the State Bar has obtained a stayed or active suspension against at least one of the lawyers in the firm in many cases.

Second, even when there is a system in place, if funds are misused or misappropriated by an employee, the State Bar has issued public disciplinary action against one or more lawyers in the firm.  Public discipline has been imposed even when the lawyers discovered the theft, self-reported it to the State Bar as required, and took all other possible corrective remedies after the discovery, including full reimbursement to the client and pursuing criminal charges against the embezzler. In essence, the State Bar has taken a strict liability approach to trust account violations concerning misuse of the funds.     

Third, the State Bar has taken the position that supervising attorneys are required, at least periodically, to review the trust account bank statements, checks, deposit slips, wire transfers and other source documents.  Although this requirement is not specifically set forth in the Rules, Comments or Formal Ethics Opinions to my knowledge, the Bar consistently has taken the position in recent years that such review of source documents is required as part of a lawyer’s duty to adequately supervise non-lawyers with respect to trust accounts.  According to the State Bar, it is not sufficient for an attorney merely to review trust acccount summaries prepared by a non-lawyer without crosschecking or confirming the information in the summaries with the corresponding source documentation, at least periodically.

In other words, the State Bar expects that lawyers will go beyond just merely observing if things appear to be running smoothly and requires them to check under the hood of their trust account, at least periodically.  A good place to start for a DIY approach is the State Bar’s Trust Account Handbook, which is available on its website.  Our Firm also offers customized trust account procedural assessments for law firms and lawyers who need outside assistance.  However you decide to do it, it is past time to roll up your sleeves and get your hands dirty.

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Are You Checking Your LinkedIn Endorsements?

At its last quarterly meeting, the Ethics Committee adopted a proposed opinion about the propriety of making and accepting both invitations to connect and endorsements on LinkedIn.  The proposed opinion first holds that an attorney may ordinarily accept an invitation to connect from a judge.  The opinion warns that if the attorney is currently in proceedings before the judge at the time of the invitation, however, the Rules of Professional Conduct may require the lawyer to decline the invitation at that time.  The lawyer must at the time of the invitation determine whether acceptance of the invitation during the pendency of a case will impair the lawyer’s ability to comply with the Rules against ex parte communications (Rule 3.5) and prohibiting conduct that is prejudicial to the administration of justice (Rule 8.4), among others.  Ultimately, the opinion directs lawyers to be mindful of their obligation to protect the integrity of the judicial system and to avoid creating an appearance of judicial partiality.  The same criteria apply when deciding whether to send an invitation to a judge to connect.

Although there does not appear to be a hard and fast rule prohibiting it, my advice, based upon this proposed opinion, is to wait to connect with a judge until you are not appearing before that judge, if possible.

The next part of the opinion dealing with endorsements was an education for me.  I didn’t really know how the LinkedIn endorsements worked.  Apparently, you have an option to display your “skills & expertise” on your profile page.  Your connections can then endorse a skill or expertise for you.  Then you will get a notification of the endorsement.  If you do nothing, and the endorsement is for a skill you have selected to show, then that endorsement automatically will appear on your profile page.  You may also edit the “skills & endorsements” section to “hide” selected endorsements or skills.  Why is all of this important?  The proposed ethics opinion says that it is OK to endorse a judge for skills or expertise (assuming you are not currently appearing before them).  Likely, this is permitted because it is really no different than sponsoring a judicial campaign or being listed publicly as a donor.  The proposed opinion goes on to say that an attorney may not, under any circumstances or at any time, accept an endorsement from a judge.  Further, if a person that you had previously accepted an endorsement from then becomes a judge, you are required to remove the endorsement from your profile.  And, this prohibition applies to any social media website that allows public displays of endorsements or recommendations.

Ack!  I’m not checking my LinkedIn for people that I have connected with who may have become judges and might have endorsed me at one time! Perhaps I should know or remember which of my connections have become judges, but heck, I sometimes have trouble remembering what I ate for breakfast.  Before you panic, know that this opinion is being published for comments which if received by the Bar, will be considered by the Ethics Committee at its next meeting in October 2014.  If the opinion does become final as is, hopefully you don’t have too many endorsements to check.  This can be one time that I count myself lucky not to know very many people.

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Disbursements Against Cashier’s Checks – You’ve Got to Know When to Hold ‘Em

Have you ever received an email from a potential client asking you to collect a debt owed to them by an ex-spouse, a corporation, or other person or entity?  Did the email offer to pay you a hefty percentage of the amount collected?  Many of us have received similar emails.  More often than not, such requests are scams which involve fraudulent cashier’s checks.  Some emails are easily identifiable as scams due to spelling and grammatical errors, but some are fairly sophisticated.  Cashier’s checks have had the reputation of being reliable in the past, but these schemes are making attorneys a bit more wary of immediately distributing against them, and rightfully so.

RPC 191 permits attorneys to immediately disburse funds from a trust account upon the deposit of a financial instrument specified in the Good Funds Settlement Act (“Act”) (N.C. Gen. Stat. Chapter 45A).  Certified checks, cashier’s checks, teller’s checks, and official bank checks drawn on an FDIC insured bank are all listed under the Act.  Attorneys are allowed to immediately disburse against the provisional credit extended to these kinds of instruments because they are considered extremely reliable and have a low risk of noncollectibility.  Due to the increasing scams involving cashier’s checks and the NC Court of Appeals decision in Lawyers Mutual v. Mako, should attorneys still be allowed to immediately disburse against these instruments?

In Lawyers Mutual v. Mako, a firm received an email from a prospective client asking for assistance in collecting $350,000 owed by his former employer in a workers’ compensation matter. 756 S.E.2d 809 (2014). The firm agreed to accept the case on a contingent fee basis of 20%.  The firm received the first cashier’s check for $175,000 and deposited it into the trust account, but the firm was unable to wire the client his money or collect the contingent fee due to an error in the account information provided.  The firm then received a second cashier’s check for $175,000, deposited it into the trust account, immediately wired $140,000 to the Japanese account and retained the $35,000 contingent fee.  The bank later notified the firm that both checks were dishonored.  Id. at 810-11.

The firm made a claim under its policy with Lawyers Mutual.  Lawyers Mutual denied the claim stating that pursuant to the language of the policy, it was not obligated to cover losses for instruments that were not irrevocably credited to the trust account.  Defendants argued that the “irrevocably credited” language of the insurance policy was ambiguous.  They stated that they understood this term to mean that losses from forged cashier’s checks would be covered, as such checks are irrevocably credited upon deposit.  Lawyers Mutual ultimately brought an action for declaratory judgment asserting that the cashier’s checks were not irrevocably credited, and it was not required to provide coverage.  Id.

The Wake County Superior Court granted summary judgment on behalf of Lawyer’s Mutual and the Court of Appeals affirmed the decision.  The opinion explained that “pursuant to N.C.G.S. § 25-3-104(f), a cashier’s check is treated the same as a traditional check.  A traditional check cannot be deemed fully credited until its provisional settlement period has elapsed without action by the bank to reject the check; the same is true for a cashier’s check.  Therefore, the provisional settlement period that accompanies traditional checks must also apply to cashier’s checks.”  Id. at 811-12.

The purpose of allowing attorneys to disburse against the instruments listed in the Act is to avoid delay and inconvenience, but is the inconvenience worth it?  It is likely much more inconvenient to replace the amount of any failed deposit which is required under RPC 191.  The safer course of action may be to ensure that any funds received have been irrevocably credited before distributing, even though the rules may permit otherwise.

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Case Results on Your Website? The Line Between Creating Unjustified Expectations and Good Marketing

Under the Rules of Professional Conduct, a law firm’s website is considered a form of advertisement and is regulated by the State Bar.  Most attorneys are mindful of this, but as with everything, the devil is in the details. For example, you have just obtained an exceptional and hard-won settlement for your client. Can you use this result on your website and other social media to market your legal skills to potential clients?

You can and you should because potential clients are using the internet to research products and services; law firms are judged and selected by their online presence.  However, the Rules provide, “A lawyer shall not make a false or misleading communication about the lawyer or the lawyer’s services.” N.C. Rules of Prof’l Conduct, Rule 7.1 (2003).  Further, a communication is considered false or misleading if it “is likely to create an unjustified expectation about results the lawyer can achieve…” N.C. Rules of Prof’l Conduct, Rule 7.1(a)(2) (2003). 

The State Bar Ethics Committee has determined that advertising specific settlements and verdicts can create unjustified expectations about the results attorneys can achieve.  How then do you avoid creating these “unjustified expectations” about the results you can achieve for potential clients?  In the past, the State Bar required that the lawyer list both favorable and unfavorable results on their websites.  However, the Bar now permits a lawyer to advertise that he or she has argued and won numerous cases before a specific court or has successfully handled cases in a specific area of law, without noting any unsuccessful cases or losses.

In 2009 FEO 16, the N.C. State Bar specifically addresses favorable case results:  The opinion rules a website may include successful verdicts and settlements as long as it is factually accurate and contains an appropriate and “prominently displayed” disclaimer:

…The disclaimer must be sufficiently tailored to address the information presented in the case summary section. The disclaimer must be displayed on the website in such a manner that it is reasonable to expect that anyone who reads the case summary section will also read the disclaimer. Depending on the information contained in the case summary section, an appropriate disclaimer should point out that the cases mentioned on the site are illustrative of the matters handled by the firm; that case results depend upon a variety of factors unique to each case; that not all results are provided; and that prior results do not guarantee a similar outcome.

The opinion provides that an appropriate disclaimer would preclude a finding by the Bar that the website is likely to lead to unjustified expectations that the same results can be obtained for a potential client.

The use of websites, including case results, to attract potential clients is a wise and essential use of marketing dollars; just make sure you are not overstepping the line between unjustified expectations and good marketing.  Likewise, keep abreast of ethical developments in the rapidly changing arena of online marketing and advertising to avoid potential grievances from the Bar.

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Social Media Ethics: Part 2

At its last quarterly meeting, the State Bar Ethics Committee decided that competent representation includes advice about a client’s social media postings to the extent they are relevant and material to the representation.  Proposed 2014 FEO 5.  The opinion goes on to say that a lawyer may have a duty to advise a client about social media and its possible effect on litigation both before and after a lawsuit is filed, may advise the client to change privacy settings on social media sites, and may only instruct a client to remove postings so long as it does not amount to spoliation or otherwise violate the law.

If removing postings does not constitute spoliation and is not otherwise illegal or a violation of a court order, the lawyer may instruct the client to remove existing postings on social media. If the lawyer advises the client to take down postings on social media, where there is a potential that destruction of the postings would constitute spoliation, the lawyer must also advise the client to preserve the postings by printing the material, or saving the material to a memory stick, compact disc, DVD, or other technology, including web-based technology, used to save documents, audio, and video. The lawyer may also take possession of the material for purposes of preserving the same. Advice should be given before and after the law suit is filed.

Proposed 2014 FEO 5.  This result is intuitive as e-discovery is commonplace these days. But there are other social media-type discovery questions that remain unanswered.  In the last blog, we posed three of those questions.  The first is whether an attorney can view publicly available portions of social media to gain information about the opposing party for litigation.  The answer is yes, as there is no ethical impediment to gathering information about the opposing party through publicly available sources.

The second question is whether an attorney may “friend” an opposing party to gain access to non-public information.   Although there is no opinion in NC on this issue, I believe that this is problematic, at least where the opposing party is represented by counsel.  Under that circumstance, Rule 4.2 prohibits communications with a represented person “about the subject of the representation.”  There is no question that sending an invitation to “friend” someone on Facebook is a communication, but is it “about the subject of the representation.”  A good argument can be made that it is not, without more, because it does not touch upon the subject of the representation, or any subject at all.  As long as the attorney makes the request under his actual name, does not communicate any false or misleading information, and does not try to elicit any information from the opposing party through social media, should this be a problem under the Rules of Professional Conduct?  My guess is that because the attorney’s motivation for making the friend request is to find information about the opposing party which would relate to the representation and is not otherwise in the public domain, there is also the argument that the communication is ostensibly “about the subject of the representation.”  Even a “friend” request to an unrepresented party may be problematic, as Rule 4.3(b) requires that when the lawyer reasonably should know that the unrepresented person misunderstands the lawyer’s role in the matter, the lawyer has the obligation to try to correct the misunderstanding. Keep in mind that the Ethics Committee has not opined on this issue, so I would be careful and seek ethics advice before proceeding in this fashion.

The third question is whether the attorney can direct another person, perhaps his firm administrator or a relative for example, to “friend” the individual to gain access on the attorney’s behalf.  In this situation, it is more likely the opposing party may not recognize the name of the person making the friend request.  In addition to the Rule 4.2 issue, I have more trouble with this, as the entire purpose of asking a third person to make the “friend” request is the hope that the opposing party won’t know from whom they are receiving the request, and would not view the person as a threat.  This approach could be considered misleading under the Rules, and a likely violation of Rule 8.4(c).

Bottom Line:  To be safe, if you want to view non-public portions of an opposing party’s Facebook page, represented or not, use ordinary discovery methods, or ask the State Bar first.  It might be time for the Bar to look at this issue and weigh in on it.

 

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Social Media Ethics: Part I

Although it began as a tragic personal injury case where a concrete truck crossed the center line and tipped over the car of a newly married 25-year-old woman, the case effectively ended the career of Mathew Murray, a Virginia lawyer and managing partner in one of the largest personal injury firms in Virginia.  So what went so wrong to end the career of this experienced and prominent attorney?

The case, Isaiah Lester, Individually and as Administrator of the Estate of Jessica Lynn Scott Lester v. Allied Concrete Company, et al., involved a personal injury action where Mr. Murray represented Isaiah Lester, the husband of the woman who died in the crash with the Allied Concrete truck.  Mr. Murray’s problems began after he received a discovery request from Allied Concrete, the defendant. Through an email from his paralegal, Mr. Murray instructed Mr. Lester to “clean up” his Facebook page after Allied Concrete’s attorneys sought Facebook screenshots, pictures, profile, message board, status updates and messages.  Following his lawyer’s advice, Mr. Lester deleted sixteen photos including one where he wore a T-shirt exclaiming “I (heart) hot moms” while holding a beer can. Mr. Murray also instructed Mr. Lester to deactivate his Facebook accounts so that he could respond to the discovery request that no such account existed.

Ultimately, the judge in the personal injury case ordered Mr. Murray and Mr. Lester to pay $722,000 in sanctions where the judge found an “extensive pattern of deceptive and obstructionist conduct.”  Mr. Murray was further disciplined by the Virginia State Bar and received a five year suspension for violating ethics rules that govern candor toward the tribunal, fairness to opposing party and counsel, and misconduct.  There are also reports that Mr. Murray resigned from the firm and is retiring from practicing law.

There is no doubt social media evidence will become more prevalent in the future. To provide competent representation, lawyers likely already have a duty to address social media evidence as it can be a powerful investigative tool.  However, social media can also be a minefield of ethical issues.  As the Lester case illustrates, lawyers need to be cognizant of how they counsel their clients regarding social media evidence.

Clearly, the advice to turn off or deactivate Facebook, so that the the lawyer could deny the existence of such an account in discovery violates Rule 3.3(a)(1) (making a false statement to the tribunal) and Rule 8.4(c) (engaging in conduct involving dishonesty or misrepresentation).  But even a casual statement to a client to “clean up” their social media accounts or profiles, whether discovery is pending or not, is insufficient direction to the client.  A lawyer must anticipate when social media will be relevant in the client’s case, and must be careful not to suggest that the client do anything to their social media account that would amount to spoliation of evidence.

In the firm’s next blog, Deanna will address social media discovery, highlighting the new State Bar proposed opinion on this issue, and discuss other social media ethical questions including: (1) May an attorney view the publicly available portions of social media to gain information; (2) May an attorney “friend” an individual to gain access to non-public information; (3) May the attorney direct a third party to gain access on their behalf- whose name the non-client may not recognize-by requesting the third party “friend” the individual.

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The Ethics of Ghost Blogging and Astroturfing

In today’s marketplace, having a strong social media presence is essential. For example, in addition to a firm website and blog, our firm has a  presence on LinkedIn, Google +, Twitter, and Facebook. While an on-line presence can translate into positive business development, it also means more ethical considerations. Two trends in online marketing, which seem to be particularly problematic for attorneys, recently caught my attention: ghost blogging and astroturfing.

Ghost Blogging. Ghost blogs are created by writers who are hired to pen content for their client’s blog anonymously. Although many different professions and markets utilize ghost bloggers in an effort to increase their credibility and market development, lawyers, because of our advertising rules, should tread carefully.  Although the Rules do not specifically prohibit ghost blogging, the Rules do prohibit false and misleading and deceptive communications to the public about our legal services. Rule 7.1. The Ethics Committee has opined that similar conduct is misleading and therefore prohibited if, at the heart of it, you are hiring someone to pretend to be you, or are simply buying legal content to publish under your name.  2008 Formal Ethics Opinion 14, Opinion #6. Less clear is what level of collaboration on a blog would be permissible in the eyes of the State Bar or under what circumstances the inclusion of an appropriate disclaimer may be enough.

Astroturfing. Astroturfing is defined as “the act of trying to boost one’s image online with fake comments, paid-for reviews, made-up claims and testimonials.”  Although it may be tempting to have an employee post a positive or flattering review or testimonial of your legal services, and there are many companies who will do this for hire, you should never post false reviews.  For example, Yelp, an online business review site, sued a San Diego law firm for allegedly causing false postings regarding their legal services to be posted to the Yelp site. Yelp alleged the positive reviews were actually posted by employees of the firm. And in New York, following “Operation Clean Turf,” the Attorney General announced 19 companies were heavily fined for writing fake online reviews to promote products and services where the companies were hiring employees to post positive online reviews for their clients.

Although I have not yet seen any astroturfing cases with the N.C. State Bar, there is no doubt this practice is unethical for attorneys (Rules 7.1 and 8.4(c)) and could lead to a grievance. As Gyi Tsakalakis in his Lawyerist article states: “Many of the rules governing what attorneys can and can’t do are vague, confusing and unduly restrictive. But this one’s pretty reasonable and clear: Don’t mislead potential clients with false testimonials, endorsements, reviews, etc.”

One last point: Some lawyers may want to leave their social media presence in the hands of others for reasons including a lack of time or expertise.  However, lawyers still have an ethical duty to supervise the non-attorneys who provide content on their social media to ensure the content complies with the Rules.  Regardless of whether an attorney approved of the social media message related to the legal services he or she is providing, the Bar can ultimately hold the attorney responsible if there is a violation of the Rules.

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What Now? – Handling the Uncertainty of Personal Injury Lien Disbursements

My colleague Brooke Ottesen and I recently presented a CLE on trust account disbursement at Elon University School of Law.  The participants asked many wonderful questions regarding this subject.  Several of these questions were from personal injury attorneys and focused on how to handle certain types of liens.  I previously practiced in this area, and I recall facing the same issues and having the same questions.  Medicare liens, in particular, can be onerous and confusing.  I presented the scenarios below to Deanna Brocker of our firm for her advice and comment:

Scenario 1:          The client has Medicare and the claim has been reported.  Medicare Secondary Payer Recovery Contractor (MSPRC) has sent a conditional payment letter itemizing the claims Medicare has paid and listing the potential lien amount.  The case is settled and the proceeds are deposited into the attorneys’ trust account.

(1)    Can the attorney hold Medicare’s conditional payment amount in trust and distribute the remainder of the funds even though Medicare’s final demand letter has not been issued?

(2)    What if Medicare’s final demand amount is greater than the conditional payment amount?  Can the attorney seek the difference from the client?

Answer:               The attorney is required to hold in trust the amount he believes will cover the final demand.  Clearly, the attorney cannot know exactly what that amount will be; however, he should make an educated guess based upon the information he possesses.  If the amount of the final demand is more than the amount held in trust, the attorney may either (a) make up the difference in the trust account first, pay the final amount to Medicare, and seek reimbursement from the client OR (b) if there is time, seek reimbursement from the client, deposit those funds into the trust account, and make the disbursement to Medicare.  The attorney is not required to seek reimbursement from the client for any shortfall, and may decide to absorb that cost.

Scenario 2:          Insurance Company A contracts with numerous subrogation companies to collect liens it may have on client settlements.  Often, the insurance company cannot tell the attorney which of the subrogation companies has the lien or they provide the name of the incorrect company to the attorney.  Sometimes, Insurance Company A informs the attorney there is no lien and then sends a letter claiming a lien after funds have been disbursed.

Answer:               The attorney is required to perform due diligence to determine whether there is a lien on the proceeds of a client’s settlement.  If a lien is discovered after the case has settled, the attorney may seek payment from the client or he or she may decide to pay the lien from his funds first and then decide whether to seek reimbursement from the client.  Under this latter scenario, there are no funds in trust, so if the attorney elects to pay the lien, the attorney may do so from funds in his operating account and place any funds reimbursed by the client back into the operating account.  The attorney must be careful, however, to create a paper trail documenting where the funds are going and what they are for.

Dealing with liens is certainly frustrating.  It is wise to be proactive and have clients sign a statement at your initial meeting divulging any benefits they may receive that could potentially result in a lien.  Knowing what agencies and insurance companies you need to contact at the outset can save both time and money.

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Clarity is Key

As lawyers, we like to think we excel in communicating our thoughts, ideas and arguments to others.  Yet sometimes, we forget that it is important to be direct, concise, and clear when describing ourselves in advertising, when communicating with potential clients, and when communicating with clients.  Here are some ways lack of clarity can get you in trouble:

Violation of Advertising Rules

If we are not precise when describing ourselves, our experience, or our services in advertising, we may run afoul of the advertising rules.  For example, many attorneys advertise, “You pay no fee unless you recover.”  The intent may be to say that you do not pay an attorney fee, but you may still be responsible for costs.  The problem here is that “fee” is undefined, and the average client is not going to understand that they still may be responsible for costs even if they lose their case.  2004 FEO 8 requires that an attorney say “no attorney fee unless you recover” so that it is clear.  Keep in mind that certain other statements, such as any statement about results, must include appropriate and conspicuous disclaimer language as well.

The Accidental Client

Suppose you regularly represent a corporation, but on some occasions, the officers come to you with legal questions, and you provide answers. Or suppose someone asks you a legal question, on-line through social media, and you provide a general response.  In either situation, you likely have created an attorney client relationship. I would recommend not undertaking to provide legal advice to anyone under any circumstances unless you are prepared to engage in an attorney-client relationship.  Even if you don’t provide specific advice, the person who is consulting with you may believe that you are their attorney.  If you accidentally create an attorney-client relationship, keep in mind that you owe that person duties under the Rules, including confidentiality, loyalty and communication.  You may also inadvertently conflict yourself out of a matter or raise liability issues if you are not vigilant.

Confused Client

A confused client is more likely to file a grievance against his or her attorney.  Make sure you clearly define the scope of representation and fee for services. If you charge a flat fee just to prepare a simple will, make sure the client understands that additional legal documents will be extra. Be clear about how your fee is determined and when payment is due.  If you are not retained until paid, then say so. In addition, a contingent fee agreement must be in writing and must also include an explanation about how the fee will be calculated. Rule 1.5. Also, let your client know when the relationship has terminated. If the client only paid you for a consultation, but did not ultimately retain you to represent them, make sure they understand (1) you do not represent them, (2) they need to consult with other counsel, and (3) when the statute of limitations runs.

As always, we recommend that you put everything in writing when possible.  Even a confirming e-mail is better than nothing.  And remember, clarity is key.

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