Should Lawyers Serve on Boards?

Posted on January 30, 2014 08:49 by Steve Crislip


Lawyers should seize the opportunity to give back to their communities by volunteering to serve on a board, whether non-profit or profit.  However, you really need to be alert before you do so, even though this is a historical role of lawyers.  Just after the formation of our country, a French political writer, Alexis de Tocqueville, spent considerable time in the new United States in the early 1800’s making observations about the new democracy (On Democracy in America).  He was struck by the involvement of lawyers in every portion of the American society and felt their involvement and influence acted as a natural function against any excesses in democracy.  He said:  “The American is the Englishman left to himself.” 

I suspect that you will find that to still be true today.  In any small town in America, the local attorneys are involved in their churches, civic groups and non-profits.  It is part of practicing law, in my personal view.  However, if you plan to serve on a board, you must make the determination early whether or not you are going to be a lawyer, or a board member.  If you are the lawyer for an organization, you really should not be serving on the board.  You also have to recognize that many non-profits are asking you to serve on their board so they can have free legal advice.  That really does not work.  There is a real conflict in duties there.  You need to tell them you would be glad to serve, but you cannot give legal advice or render legal opinions.  In the alternative, you can consider donating your time as a lawyer to the organization and not serve on the board.

One of the common denominators with all lawyers is a lack of time, so logically you must first determine how much time you need to spend on this board, what your personal exposure for liability purposes might be, and how much money they are going to want you to raise or give.  A drive-by approach to service on any board will help neither of you.  If you are going to do it, then spend the time and do it right.

I always recommend personal due diligence by each person before they consider accepting the flattering offer to serve on a board.  If the board is dysfunctional, poorly run, or dominated by a person or faction, then you do not want to be part of it unless you want to go in and change the entire structure.  Eyes open for this type of service is my advice.

I also recommend that individuals immediately determine whether or not the organization has purchased directors’ and officers’ coverage (D&O).  If not, they probably should.  When you serve as a board member, your coverage must come from the organization or their insurance since most professional liability policies will exclude you from coverage as a board member.  In other words, you are acting as a board member and not as a lawyer.  

Conversely, if you are a board member rendering legal advice while on the board, most D&O coverage will exclude you from that.  You are covered as a board member, but not as a lawyer.  You are trying to do a good deed and you have no coverage in the process.  So, some reasonable advice is to decide whether you are going to be a board member or the lawyer for the organization and act accordingly.  Do not fall in the trap of answering legal questions and then having an absolute conflict of interest in the process.  I think that is particularly true if it is a client of the firm and particularly if it is a for-profit corporation.  Your duties as a board member are different than yours as a lawyer.  The privilege is also different.

Some additional thoughts on service:

• Publicly traded board service is a bit more involved since the passage of the Sarbanes-Oxley Act of 2002;

• All law firms should require their lawyers to seek permission to serve from a firm body so such issues can be considered;

• Consider coverage issues;

• Consider validity of director’s indemnity for actions;

• Will your service disqualify your firm in some manner?

• Would the firm be vicariously liable?

• Will you be stuck with a higher standard of care than other directors?

• Closed family corporate boards can be problems and a firm imposed limitation or review may well give you cover from this.


I know, I’ve told you to go do it and then as a lawyer, I’m telling you all of the things you have to watch out for.  That’s what lawyers do, isn’t it?  Go serve and give back, but do it wisely and with full knowledge of any risks.  See also, Serving on a Nonprofit Board:  Identifying and Resolving the Ethics Issues (audio) (ALI CLE).  

See also 30 Law Man. Prof. Conduct 23:

Corporate Counsel as Director

"It is not unethical per se for a lawyer to serve as a director of a corporation as well as its legal counsel, but this dual role can endanger the attorney-client privilege in several ways, according to the ABA Standing Committee on Ethics and Professional Responsibility. See ABA Formal Ethics Op. 98-410 (1998).

First, confusion may arise when the lawyer-director provides the company with advice that has both legal and business implications, the ethics committee noted. When management or the board of directors consults the lawyer-director for legal advice, the lawyer should make clear that the meeting is for that purpose alone. The lawyer-director should avoid the temptation of providing business or financial advice, the committee advised, unless it affects legal considerations such as the business judgment rule.

The lawyer-director also should realize, the committee said, that her status as director empowers her to waive the corporation's privilege, and may require her to reveal information to outsiders such as an auditor. Moreover, what the lawyer knows as a director may be imputed to the corporation and, in the case of outside counsel, what the lawyer knows as a lawyer may be imputed to other members of her law firm, the committee noted.

Similar concerns were expressed by an ABA task force on lawyer-directors in The Lawyer-Director: Implications for Independence (1998)."

This blog was originally posted on January 7 on Lawyering for Lawyers blog. Click here to read the original entry. 

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On January 25, 2013, the U.S. Court of Appeals for the District of Columbia held that the National Labor Relations Board (“NLRB”) lacked a sufficient quorum of members when it issued a finding that Noel Canning had violated the National Labor Relations Act.  See Noel Canning v. NLRB, 2013 U.S. App. LEXIS 1659 (D.C. Cir. Jan. 25, 2013).  On the date that the NLRB issued its findings against Noel Canning, three of its five members were sitting after appointment by President Obama, without Senate confirmation, under the Recess Appointment Clause of the U.S. Constitution.  The problem, according to the court, was that the “recess appointees” had been appointed while the Senate was in pro forma session, not recess, thereby making the appointments invalid.  With only two validly appointed members sitting on the NLRB, the Court of Appeals held that the NLRB lacked the necessary quorum to take any action against Noel Canning.

The court’s ruling potentially invalidates all NLRB rulings since January 4, 2012, the date of the recess appointments.  And because two of the unconfirmed appointees continue to sit on the NLRB, all NLRB decisions going forward may be called into question.  The NLRB does not appear phased by the court’s ruling, however, and continues to issue decisions.  It is expected that the NLRB will continue with business as usual until the Supreme Court weighs in on the issue.

On February 13, 2013, President Obama asked the Senate to confirm his re-nomination of NLRB Members Sharon Block and Richard Griffin.  That same day, various Republican House of Representatives leaders sent a letter to President Obama and NLRB Chairman Mark Pearce, requesting that the President nominate “four qualified individuals” to the NLRB and that the NLRB cease all activity until confirmation of the requested appointments.  While each branch of the government weighs in on this issue, employers and their attorneys are left with the challenge of interpreting the current state of labor law.

We look forward to gaining insight on the recess appointee controversy, as well as the NLRB’s recent decisions and agendas, from Lafe Solomon, Acting General Counsel for the NLRB, during DRI’s 36th Annual Employment and Labor Law Seminar, to be held May 1-3, 2013, at the Arizona Biltmore, in Phoenix, Arizona.  If you have not already registered for this exciting event, please access the registration information here to secure your spot today.

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Last month the National Bureau of Economic Research released results of its recent research that indicates more women receive raises than their male counter parts, largely because women are more likely than men to haggle and negotiate salary when there is an opportunity to do so. This fact in and of itself is great news – women are taking charge of their careers and sitting down with employers to have “difficult” conversations.  TribeHR decided to delve deeper and create the TribeHR Pay Raise Index – TribeHR concurs with the NBER’s data and found that women receive more pay raises than men - 7.4 percent compared to 6.2 percent. 

What these recent figures do not explain, though, is that, despite these efforts, women as a whole are still earning less money than their male counterparts. Although women seem to receive more raises, men who receive raises are rewarded with higher pay. According to TribeHR’s research, when reviewing pay raises of 5 percent or greater, 60 percent of these raises went to men while only 38 percent went to women; men were three times more likely than women to receive a raise over 25 percent. This data, coupled with findings from the National Association of Women Lawyers’ 2012 Survey that women attorneys typically earn only 89 percent of what their male counterparts earn and account for 70 percent of staff attorneys in the nation’s 200 largest firms, undoubtedly contributes to women unnecessarily fleeing the legal profession altogether.

Wondering how to take control of your salary and career? Consider attending the 2013 Women in the Law Seminar – in addition to practice-related topics, The Careerist Vivia J. Chen will present a session entitled “The Careerist’s Top Ten Tips to Advance Your Career” and offer practical advice on what drives success in the legal field based on her own experience as a practicing lawyer. Caroline Turner from DifferenceWORKS LLC will further empower attendees with a session on enacting gender initiatives within firms and corporations. And nothing compares to networking with fellow women practitioners facing the same professional challenges, brainstorming how to navigate around these statistical detours while continuing on the path to success. Hope to see you in Miami, Florida, March 13-15, 2013! 
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Terry Baynes of Thomson Reuters has an interesting article on efforts by a few plaintiffs’ attorneys to “crowd source” consumer arbitration claims.  The effort arises out of the Supreme Court’s decision in AT&T Mobility v. Concepcion, 131 S.Ct. 1740 (2011), upholding class action waivers in mandatory arbitration clauses.  The article discusses how two plaintiffs’ attorneys have created a website to generate consumer interest in filing multiple arbitration claims against a company with the stated goal of overwhelming the company “with hundreds or thousands of claims.”   The article quotes one of the founding lawyers as saying, “If it happens enough, companies will want class actions again.”  Andrew Pincus, who represented AT&T Mobility before the Supreme Court, is quoted as calling the site “marketing front for plaintiffs’ law firms.”  Mr. Pincus discussed Concepcion at DRI’s 2011 Class Action Seminar in Washington, DC.  DRI will hold the next edition of the Class Action Seminar on July 25 and 26, 2013.  That program is expected to include discussions of the Supreme Court’s current term’s class action and collective action cases.  More details on that will follow soon.

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I came across a post on the Lawyerist on the question whether good legal writing is inherited or developed.  Putting aside that debate (the answer is both, by the way), it occurred to me that there are two steps that mediocre legal writers can take to immediately improve their writing.

There are actually three steps.  The first is to realize your legal writing needs help and care enough to try to improve it.  There are lots of advocates who slog through an entire career filing nearly incomprehensible briefs.   Don't be that lawyer.  Take pride in your product.  The fact you have read this far, rather than clicking on to something more compelling, means you are at least curious, or you just got an Apple and haven't figured out how to navigate away from this page.

The first sure-fire way to improve your legal writing is to strive to use an active rather than a passive voice.  It's ironic that I spent several (ok 6, but who's counting) years getting a degree in Literature-Writing from a really solid university, but it wasn't until I was a staff member on Law Review that I truly began to understand the importance of active voice.  If you missed the special torture that is editing a legal journal, or were otherwise never trained to write in active versus passive voice, I'll provide a very easy example to illustrate the difference.  Using passive voice, a lawyer might construct a sentence that reads: A man, woman and two children were shot by the defendant.  Contrast that sentence with one written using active voice: The defendant shot a man, woman and two children.

See? Simplest thing in the world.  But, even those of us who generally strive to use active voice occasionally fall into passive voice.  The key is to recognize when you're doing it and decide whether the sentence you've created could be improved by changing the voice.

The second way to immediately improve your legal writing is equally simple.  Pare back the number of words you use to say what you're trying to say.  This was something my mentor taught me when I was a baby lawyer and I've generally tried to adhere to the principle, at least when writing to a court or opposing counsel.  Basically, every word in any sentence should be necessary.  Nothing extraneous.  This will automatically take care of the tendency to include "herein" and other pointless words.  It also forces the writer, you, to think about what you're trying to say and how to say it in the clearest way possible.  Judges and clerks appreciate clarity.

Now.  This second "way to immediately improve your legal writing" is not a rule.  It's just an approach.  And, it's an approach I freely disregard when I want to emphasize something through repetition or diction (word choice).  Hell, I often write entire paragraphs in the passive voice  and include a lot of extra words.  But, when I do it, I do it purposely, usually for effect.  Otherwise, I strive to write clean, spare, Hemingway-like sentences, in the active voice, as free as possible of legalese.*  (*Ok, I'll admit an affinity for ancient latin phrases like sua sponte, ab initio, inter alia.  I know that writers who know what they're talking about, as opposed to armchair poseurs (who me?), have zero tolerance latin phrases.  If I give in to the urge to use them in an early draft, I almost always delete them.)

There.  If you struggle with your legal writing, try these two suggestions.  I guarantee you'll see results.

(As originally posted at http://atcounseltable.wordpress.com/2012/07/02/two-sure-fire-ways-to-immediately-improve-your-legal-writing/)

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In the upcoming Annual Meeting of the ABA, the Commission of Ethics 20/20 will consider amending Model Rule 5.5, which addresses unauthorized practice of law issues.  Of particular concern is the issue of whether the Rule needs to be amended to address whether the proliferation of lawyers' use of technology allows them to maintain a "virtual practice" in a jurisdiction in which they are otherwise not licensed to practice.  The key issue centers around the question of how much "virtual practice" is sufficiently "systematic and continuous" to require an attorney to become licensed in a particular jurisdiction.

If you have seen the draft proposal to amend Model Rule 5.5, which was circulated in September 2011, but sent back to the drawing board because of feedback suggesting that it did more to cloud the issues than to clarify the issues, you probably felt the same way. 

In my humble opinion, at least for the time being, it may be much ado about nothing.  The rule as it stands appears to address most issues, and there probably needs to be considerably more in-depth analysis and study before any tweeking to the Rule occurs.  We've all dealt with pro hac vice issue, serving as and locating "local" counsel when necessary, and electronic filing hasn't really changed the process of being admitted, even if just temporarily, to a particular jurisdiction. Nonetheless, we have all seen how the practice of law has changed over the past ten to fifteen years, particularly as our dependence on electronic communication has multiplied exponentially, and this opinion could change as that dependence grows more and more.

 

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Suppose your client, a lawyer, has been sued for malpractice. Could the alleged malpractice be a basis for discipline? Alternatively, is a disciplinary complaint likely to give rise to a malpractice suit? This article will attempt to shed some light on the distinction between attorney malpractice on one hand and professional misconduct on the other, as well as the types of conduct that may constitute both.


1. What is attorney malpractice?

Simply stated, attorney malpractice is a failure to exercise ordinary skill and knowledge, where that failure damages a client. “To state a cause of action to recover damages for legal malpractice, a plaintiff must allege: (1) that the attorney ‘failed to exercise the ordinarily reasonable skill and knowledge commonly possessed by a member of the legal profession’; and (2) that the attorney's breach of the duty proximately caused the plaintiff actual and ascertainable damages.” Schurz v. Bodian, 2012 WL 502680, *1 (N.Y. App. Div. 2012) (internal citations omitted). See also Legacy Healthcare, Inc. v. Barnes & Thornburg, 837 N.E.2d 619, 624 (Ind. Ct. App. 2006). (attorney malpractice claim involves “failure of the attorney to exercise ordinary skill and knowledge (the breach of the duty).”).

2. What is attorney misconduct?

By contrast, attorney misconduct is the failure to comply with the rules of conduct adopted by a court to which an attorney has been admitted to practice. Because all states except California have adopted some version of the American Bar Association’s Model Rules of Professional Conduct (the “Rules of Professional Conduct”), they will be the focus of this article. A failure to abide by the rules subjects the attorney to discipline by the highest court of that jurisdiction. “Failure to comply with an obligation or prohibition imposed by a Rule is a basis for invoking the disciplinary process.” Rules of Professional Conduct, Preamble, ¶ 19. See also Rule 9, American Bar Association’s Model Rules for Disciplinary Enforcement (“Enforcement Rules”) (“It shall be a ground for discipline for a lawyer to: (1) violate or attempt to violate the [State Rules of Professional Conduct], or any other rules of this jurisdiction regarding professional conduct of lawyers…”). The Enforcement Rules also provide for discipline for refusal to cooperate in the disciplinary process itself. See Enforcement Rule 9 (3), providing for discipline for disobeying a subpoena or order from a bar disciplinary authority.

Of course, the potential consequences of an attorney discipline case are very different from those of an attorney malpractice case. In the worst outcome of an attorney malpractice case, the attorney must pay monetary damages to the plaintiff. By contrast, attorney discipline actions place the attorney’s law license in jeopardy. An attorney who has been found to have violated the Rules of Professional Conduct faces a range of sanctions from a private reprimand up to disbarment, depending on the severity of the violation. See Enforcement Rule 10.

3. Does malpractice equal misconduct, or vice versa?

As noted above, attorney malpractice occurs where an attorney fails to exercise ordinary skill and care, and thereby causes damage to a client. Rule of Professional Conduct 1.1 provides "A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation."

Furthermore, Rule of Professional Conduct 1.3 provides "A lawyer shall act with reasonable diligence and promptness in representing a client."

Thus, it would seem that Rule 1.1 and Rule 1.3 may codify the requirement that an attorney exercise ordinary skill and care, and that failure to do so may constitute misconduct as well as malpractice. It is difficult to imagine a failure to exercise ordinary skill and care that is not also a failure to employ the “legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.”

Some courts have indeed treated isolated mistakes as misconduct and punished it accordingly. For instance, in Board of Professional Responsibility, Wyoming State Bar v. Vreeland, 2012 WL 662236 (Wyo. 2012), an attorney represented a client in a criminal trial. Id. at *1. The jury returned a conviction on February 4, 2010. Wyoming Rule of Criminal Procedure 29(c) required that a motion for judgment of acquittal be made within 10 days of the jury’s verdict, and Rule 33(b) required a motion for new trial to be filed within 15 days of the verdict. However, Vreeland did not file the motions for judgment of acquittal and for a new trial until March 3, 2010; hence, the motions were untimely. Id. The Wyoming Supreme Court found that Vreeland violated Rules 1.1 and 1.3 of the Wyoming Rules of Professional Conduct (based on the Model Rules) and imposed a sanction of public censure. Id. at *2. See also Board of Professional Responsibility, Wyoming State Bar v. Dunn, 262 P.3d 1268 (Wyo. 2011) (attorney received public reprimand for failing to file timely governmental claims notice and complaint); In the Matter of Brown-Williams, 2012 WL 366587 (Ga. 2012) (attorney received public reprimand for missing statute of limitations in workers' compensation case).

By contrast, some courts have explicitly held that an isolated mistake is not a proper basis for discipline. For instance, in In the Matter of the Application for Disciplinary Action Against William E. McKechnie, 656 N.W.2d 661 (N.D. 2003), the Supreme Court of North Dakota addressed a mistake similar to the mistake made by Vreeland, but found that the mistake did not constitute misconduct. "In this case, McKechnie gave Follman incorrect legal advice about the statute of limitations and Follman's case was dismissed for failure to file within the limitations period. This evidence shows nothing more than an isolated instance of ordinary negligence, or error of judgment. We conclude there is no clear and convincing evidence that McKechnie violated N.D.R. Prof. Conduct 1.1." Id. at 669.

Even in jurisdictions whose highest courts have not specifically stated that isolated attorney mistakes should not give rise to discipline, attorneys are not typically sanctioned under Rule 1.1 or 1.3 for simple negligence. More commonly, it appears that attorneys are disciplined for violations of Rule 1.1 or 1.3 in addition to numerous other violations of the Rules of Professional Conduct that involve intentional misconduct, dishonesty, ongoing failure to communicate with clients, or chronic neglect of clients’ interests. For instance, in In Re Adinolfi, 934 N.Y.S.2d 94 (N.Y. App. Div. 2011), an attorney was sanctioned for violating New York Rule of Professional Conduct 1.3 where at least 26 of the attorney’s 103 cases before the Second Circuit Court of Appeals had been dismissed for failure to file a brief. Id.at 95.

Finally, the Preamble to the Rules themselves suggest that isolated mistakes should not subject a lawyer to discipline: “Moreover, the Rules presuppose that whether or not discipline should be imposed for a violation, and the severity of a sanction, depend on all the circumstances, such as the willfulness and seriousness of the violation, extenuating factors and whether there have been previous violations.” Rules of Professional Conduct, Preamble, ¶ 19. Thus, those courts that have either explicitly stated that an isolated mistake is not a basis for discipline, or at least typically decline to sanction lawyers for such mistakes, appear to employ an approach more in keeping with the spirit of the Rules.

What about the reverse question: can an act or omission that constitutes attorney misconduct give rise to a malpractice action? The Preamble to the Rules of Professional Conduct provides that violation of a Rule should not in itself give rise to a cause of action. “Violation of a Rule should not itself give rise to a cause of action against a lawyer nor should it create any presumption in such a case that a legal duty has been breached.” However, violation of a Rule can be evidence of the breach of the standard of ordinary care. The Preamble provides that though “[the Rules] are not designed to be a basis for civil liability,…[n]evertheless, since the Rules do establish standards of conduct by lawyers, a lawyer's violation of a Rule may be evidence of breach of the applicable standard of conduct.” Furthermore, some kinds of attorney misconduct have nothing to do with attorney malpractice. For instance, a felony conviction for operating a vehicle while intoxicated will certainly result in discipline, but would provide no basis for a malpractice claim.

Dina M. Cox is a partner with Lewis Wagner, LLP in Indianapolis, who focuses her practice on the defense of complex litigation, including legal malpractice, drug and medical device, product liability, consumer class actions, and insurance coverage and bad faith lawsuits.

Neal Bowling, attorney with Lewis Wagner, LLP, focuses his practice on complex business litigation as well as defense of lawyers in malpractice and disciplinary matters. He has extensive experience advising and representing clients in complex and challenging litigation including: securities matters; employment litigation involving breach of noncompete and wrongful termination claims; and representation of lawyers in malpractice actions and disciplinary investigations and proceedings. 

 

 

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May 1 is Law Day

Posted on May 1, 2012 04:35 by Matthew Cairns

I often find it curious that Law Day falls on May 1st.  Growing up, May 1st was always the day the news carried pictures of over the top parades in Red Square in Moscow where the USSR would display its missiles, goose stepping soldiers and mummified Politburo.  In hindsight, that seems quite antithetical to what I now celebrate on May 1st – the rule of law that sets our country apart from all others.  Being a lawyer should be and most often is a noble profession.  Incrementally, lawyers and judges shape the rules of conduct for society.  We protect the rights of individuals who are victims of crime.  We hold the government’s feet to the fire when it seeks to deprive a person of liberty.  We work to ensure that injured persons are fairly compensated when they prove their case to a jury of their peers.  We provide the vehicles for businesses to form, grow, prosper and provide jobs.  We protect assets at death so that heirs can enjoy the fruits of their loved ones’ hard work.  So on May 1, 2012, remember the great things lawyers and judges do for society and all of us, and not the punch lines of inane lawyer jokes.

 

Matt is a partner with Gallagher, Callahan & Gartrell in Concord, New Hampshire.  He is the DRI Immediate Past President.  He also sits on the Board of Directors for the NFJE and LCJ.

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CPSC and Enhanced Enforcement Capabilities

Posted on April 4, 2012 01:56 by Kenneth Ross


The CPSC has enhanced enforcement capabilities and potential fines have significantly increased.  Also, the CPSC commissioners are expecting for there to be more fines and bigger fines for late reporting.  As a result, manufacturers and product sellers need to be more diligent in post-sale surveillance, investigation, and analysis of incidents and litigation to identify potentially reportable situations.    

Also, consumers and other entities can post product safety issues on a public database that is accessible to everyone.  There have been thousands of postings since the database’s inception. 

These issues and other regulatory issues can adversely affect a manufacturer and retailer and result in civil penalties, unnecessary recalls, bad publicity, and cause an increase in the number and severity of product liability claims and litigation.   

Be sure to attend the Consumer Goods SLG Program on Wednesday, April 11th at the DRI Products Liability Conference in Las Vegas to hear from 3 experienced CPSC practitioners about this and other exciting consumer goods topics.   

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Tell Us Why You’re Attending!

 

#10: You can learn the latest trends in IP and business litigation.

 

#9:  CLE credit.

 

#8: It’s a great opportunity to network with in-house counsel & more.

 

#7: Cool dine-arounds at some of the hottest NY restaurants.

 

#6:  The best in biz will be sharing their advocacy skills.

 

#5: Learning how to manage all your information without losing your mind.

 

#4: Did we mention the networking receptions?

 

#3: Protecting your client’s business & IP interests is a must.

 

#2:  Because the Yankees aren’t the only sluggers in town!

 

And Reason #1: It’s the DRI in the Big Apple! Need we say more?

 

Register Now and Tell Us Why You’re Attending!

 

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