by Jim Doppke
In my last blog post (further installments of which will appear here, on our new firm’s website), I discussed proposed Supreme Court Rule 781, which sets forth the responsibilities and authority of designated representatives of another lawyer’s practice in the event of that lawyer’s disappearance, death, disability, or other such event.
In this post, I will examine how the proposed Rule could raise questions about the potential disciplinary liability of the representative. I’ll also suggest a potential amendment to the proposed Rule that might help to ease concerns about that potential liability.
Lawyers acting as representatives for their colleagues under the terms of proposed Rule 781, or under the terms of individual succession plans, would be a great help to our profession. Lawyers should help ensure that unexpected events do not disrupt the lives and businesses of Illinois lawyers and clients alike.
Rule 781(e) provides that representatives can and should take steps to sensibly fulfill the unavailable lawyer’s obvious needs: securing the lawyer’s office, client accounts, and files; looking into what litigation or other time-sensitive matters are pending; and communicating with the lawyer’s family members and office personnel.
The proposed Rule also provides, though, that the representative may take still more, and more detailed, actions relating to the lawyer’s practice. The representative may “serve as a successor signatory for any client trust or operating accounts” maintained by the lawyer; and may, “if necessary, audit and distribute client funds held in trust.”
We can assume that if the need to disburse client funds arose, the representative would do so based on the information available to her – ideally via a clear written settlement statement or other document.
But what if the client, or a third party, raises an issue regarding the amount, timing, or propriety of the distribution? What if someone questions a trust account audit that the representative performed? What if the unavailable lawyer’s maintained poor account records, or mismanaged funds?
The proposed Rule addresses the potential civil liability of the representative in subsection (f):
(f) Liability of Designated Representative. Based upon the designated representative’s limited and temporary role, a designated representative serving pursuant to this Rule shall:
(1) not be regarded as having an attorney-client relationship with the clients of the disabled, absent or deceased attorney;
(2) have no liability to the clients of the disabled, absent, or deceased attorney except for injury to such clients caused by intentional, willful or gross neglect in the performance of the authorized activities under this Rule;
(3) except as herein provided, be immune to separate suit brought by or on behalf of the disabled, absent, or deceased attorney;
(4) not be required to file an appearance in any pending matter before a tribunal in order to provide notice to the court or opposing counsel of an attorney’s death, disability, disappearance, or abandonment of practice.
Proposed subsection (f) recognizes the representative’s limited role — and limited familiarity with the lawyers’ clients and cases. It provides that representatives should be culpable only “intentional, willful, or gross neglect in the performance of” the representative’s duties.
But that phrasing raises questions. In the first place, the Rule suggests that a representative could be held responsible for “intentional…neglect” or “willful…neglect.” It’s difficult to determine what those concepts might mean. A better phrasing might be “intentional or willful misconduct, or gross neglect.” But even with that clarification: who decides whether the representative has engaged in “intentional [or] willful” conduct, or whether she has “grossly neglected” her responsibilities?
Civil tribunals certainly do. We can assume that Rule 781(f) would be intended to function as a basis for affirmative defenses in civil cases, and that the representative can argue that the complained-of conduct was an unintentional error rather than the kind of malfeasance upon which the claimants could recover.
But would the representative be exposed to a disciplinary inquiry as distinct from a civil claim? Nothing in the proposed rule indicates that representatives would be immune from disciplinary inquiry or liability for any conduct they engage in as representatives.
In In re Karavidas (2013 IL 115767), the Court held that “discipline for conduct occurring outside the attorney-client relationship should be limited to situations where the attorney’s conduct violates the Rules by demonstrating ‘a lack of professional or personal honesty which render[s] him unworthy of public confidence’” (par. 78). When proposed Rule 781(f) says that representatives in succession plans don’t stand in attorney-client relationships with the lawyer’s clients, does it combine with Karavidas to prevent disciplinary liability for representatives?
It might, but not clearly so. Under Karavidas, lawyers can always be investigated or disciplined for conduct involving dishonesty even if the conduct arises outside an attorney-client relationship. Proposed Rule 781 does not foreclose anyone from reporting a representative to the Administrator for an investigation of alleged dishonest conduct.
The question of whether disciplinary liability exists for representatives has not yet arisen in disciplinary law. In observing that it could theoretically arise, I don’t intend to raise unnecessary alarms, or to discourage lawyers from acting as representatives under succession plans.
But clients whose lawyers suddenly become unavailable can and do raise issues about the distribution of funds by any lawyers who become involved in their matters. Proposed Rule 781 should include a reasonable limit on representatives’ disciplinary liability for trust distributions or audits.
For example, the drafters of the proposed Rule could amend subsection (f)(2) to state: “No charge of ethical impropriety or other breach of professional conduct shall attend to a designated representative’s exercise of reasonable judgment in the audit or distribution of client funds” pursuant to the Rule.
That language, imported from Rule 1.15(g), could help representatives by establishing an objective standard by which their work could be examined in a disciplinary context, while leaving open the possibility (as does proposed Rule 781(f)(2)) that a representative who commits intentional malfeasance could face consequences.
If the Court ultimately approves Rule 781, lawyers in private practice will need to assist each other in the conscientious ways contemplated by the Rule. We should also work together to ensure that we can do that work without fear of unwarranted disciplinary consequences.
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