When big law firm lawyers won’t say ‘No’ to unethical demands from major clients

Canadian Bar Association’s Ethics Forum underlines why ordinary citizens should involve themselves in the discussion. Legal Ethics are too important to be left to the legal profession alone.

by Donald Best, former Sergeant, Detective, Toronto Police

by Donald Best, former Sergeant, Detective, Toronto Police

In life and in legal practice, sometimes making an ethical decision is simple, even easy. Other times, doing the right thing, no matter how carefully considered, seems to be an impossiblity given all the circumstances.

In any profession the laws, practices, technologies and societal expectations are constantly changing in ways that make new difficulties for anyone trying to behave ethically. While I’m sure that plumbers and ceramic tile installers have their ethical concerns and codes of conduct, I think you’ll agree with me that along with medicine, the practice of law is probably one of the most difficult professions when it comes to the challenge of behaving ethically.

The Canadian Bar Association’s Ethics Forum is coming up on March 7, 2016. I won’t be attending but I just might next year after my book is published, because the one thing that seems to be missing at these conferences is the perspective from outside of the legal communities.

While some lawyers may not appreciate independent civilian involvement and oversight of the legal profession, virtually all ordinary Canadians I’ve spoken with agree that laws and the practice of law are far too important and foundational to our society to be left to lawyers alone.

The list of speakers and moderators at this year’s Ethics Forum includes many of the ‘Who’s Who’ leaders in the area of legal ethics. Malcolm Mercer (McCarthy Tetrault LLP) and Alice Woolley (University of Calgary) are the co-chairs. Dr. Steven Vaughan (University of Birmingham) will deliver the keynote speech.

Other panelists and moderators include:

  • Brent Cotter, University of Saskatchewan
  • Elaine Craig, Schulich School of Law
  • Adam Dodek, University of Ottawa
  • Allan Fineblit, Thompson Dorfman Sweatman LLP
  • Charles Gluckstein, Gluckstein Personal Injury Lawyers
  • Stephen Goudge, Paliare Roland LLP
  • Julia Holland, Torys LLP
  • Gavin Hume, Harris & Co
  • Jasminka Kalajdzic, Windsor Law School
  • Darrel Pink, Nova Scotia Barristers’ Society
  • Stephen Pitel, Western University
  • Amy Salyzyn, University of Ottawa
  • Noel Semple, Windsor Law School

Although I won’t be attending this year, I do have an ethical question for the panels to consider, especially in light of the topic of Dr. Vaughan’s keynote address about the too-cosy relationships between large law firms and some major clients:

Example Situation: A Large Law Firm lawyer acts unethically. Should the law firm refund the client’s payments for ‘work done’?

And just to make it interesting for the discussion panels at the Ethics Forum, the following example is real, and involves one of the law firms (but not the lawyers) participating on the panels:   

A prospective new client consults with a lawyer at a large law firm, concerning a contemplated high stakes civil case. The list of potential defendants includes individuals and corporate entities.

Unbeknownst to the new client, the large law firm and in fact, the very lawyer being consulted, have regularly represented one of the potential corporate defendants (the ‘Major Client’) for over a decade in numerous and varied civil proceedings.

The lawyer does not inform the new client of this potential conflict of interest, agrees to take on the case and requests and receives a significant retainer. The new client turns over all evidence to the lawyer, including evidence against the law firm’s Major Client (now a potential defendant in the new client’s lawsuit.)

Seven months or so later, little has been done to advance the new client’s interests and the potential civil case is not even close to being ready – notwithstanding substantial fees already deducted from the retainer.

When the new client questions the lawyer about the slow preparation of the case, the lawyer effectively fires the client. The client eventually hires a new lawyer and files a lawsuit that includes the Major Client as a defendant.

Only after another year has passed does the new client accidentally learn of the undeclared conflict of interest and ongoing relationship between the large law firm and the Major Client.

When informed of the unethical behaviour of the lawyer, should the large law firm’s managing board order the refund of all fees to the new client?

Can we have a show of hands, please? Considering the unethical behaviour of the lawyer, should the large law firm in question refund the new client’s payments for ‘work done’?

Steven Vaughan ethics law-private

To close this piece, here are a few words from Dr. Steven Vaughan’s excellent article: Do institutional clients threaten lawyer independence?

Independence is often characterised as a simple three-way relationship between the lawyer, the client and the state. A lawyer should be free to advise a client without state interference, and a lawyer should be independent of their client. An independent legal profession is said to inculcate and foster the independence of individual lawyers.

This independence (in theory) helps individual lawyers to push back against inappropriate influences which might seek to distort the legal advice they give. As such, the independent lawyer acts in an unbiased and detached fashion and can (again, in theory) serve both the public interest and their client’s interests at the same time. (snip)

What is of concern is when a lawyer’s closeness with their client becomes what other academics have termed “client capture”; when the lawyer is unable to stand back from the client relationship and say “no” to client demands.

Read the entire article at The Lawyer (free registration required): Do institutional clients threaten lawyer independence?

Dr. Steven Vaughan @lawvaughan is a senior lecturer in law at the University of Birmingham. He will be the keynote speaker at the Canadian Bar Association’s Ethics Forum on March 7, 2016 (pdf factsheet here.)

 

2 comments

  • Donald – it always was the new client’s money. It’s in the trust account. It must be returned – under every circumstance.

    To keep it – would risk disbarment and theft charges.

    • Thanks Simon,

      Your comment made me realize that I hadn’t clearly explained that the retainer had, in fact, been used to pay for ‘legal services rendered’ prior to the lawyer firing the new client. A year later the new client realized that they had paid the unethical lawyer to review the evidence and case against the big law firm’s major client. The unethical lawyer should have declared a conflict right away and refused to take the case.

      So what do you think? Under the circumstances, should the big law firm refund the new client’s payments?

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