California Lawyers Association
Ethics Spotlight: Annual Review 2022
By Neil J Wertlieb
This Ethics Spotlight highlights changes in the California Rules of Professional Conduct during 2022, as well as ethics advisory opinions that were issued during 2022 by the American Bar Association’s Standing Committee on Ethics and Professional Responsibility (“ABA”), the Orange County Bar Association’s Professionalism and Ethics Committee (“OCBA”), and the California Supreme Court’s Committee on Judicial Ethics Opinions (“CJEO”).
The conduct of attorneys licensed in the State of California is regulated by the California Rules of Professional Conduct (the “California Rules”), the State Bar Act (California Business and Professions Code, § 6000 et seq.), and opinions of California courts. See California Rule 1.0(b)(2). The advisory opinions of ethics committees in California (including those cited herein) are not binding on California-licensed attorneys, but should be consulted for guidance on proper professional conduct. See Comment  to California Rule 1.02(b)(2). The advisory opinions of other bar associations (including the ABA) may also be considered, but note that such opinions may be based on rules of professional conduct (such as the ABA’s Model Rule of Professional Conduct) that differ from the California Rules.
RULE CHANGES: CLIENT TRUST ACCOUNT PROTECTION PROGRAM AND REVISIONS TO CALIFORNIA RULE 1.15 (SAFEKEEPING FUNDS AND PROPERTY OF CLIENTS AND OTHER PERSONS) AND RULE 1.4 (COMMUNICATION WITH CLIENTS)
On October 24, 2022, the Supreme Court of California approved amendments to California Rules 1.4 and 1.15, which went into effect on January 1, 2023. These amendments are part of the new Client Trust Account Protection Program the State Bar of California proposed to impose proactive oversight and regulation of client trust accounts, following an audit of closed discipline cases against now-disbarred attorney Thomas Girardi.
Prior to these amendments, subparagraph (d)(1) of Rule 1.15 (Safekeeping Funds and Property of Clients and Other Persons) obligated a lawyer to “promptly notify a client or other person of the receipt of funds, securities, or other property in which the lawyer knows or reasonably should know the client or other person has an interest.” [emphasis added] This language was amended to require such notification to occur “no later than 14 days” following the receipt of such funds, securities or other property, “absent good cause.”
Similarly, subparagraph (d)(7) of Rule 1.15 obligated a lawyer to “promptly distribute, as requested by the client or other person, any undisputed funds or property in the possession of the lawyer or law firm that the client or other person is entitled to receive.” [emphasis added] This language has been amended to remove the phrase “as requested by the client or other person,” to clarify that undisputed funds should be promptly distributed regardless of whether requested by the client or other person. New Comment  to Rule 1.15 was added to clarify that subparagraph (d)(7) “is not intended to apply to a fee or expense the client has agreed to pay in advance, or the client file, or any other property that the client or other person has agreed in writing that the lawyer will keep or maintain.”
New paragraph (f) has been added to Rule 1.15, as follows:
“For purposes of determining a lawyer’s compliance with paragraph (d)(7), unless the lawyer, and the client or other person agree in writing that the funds or property will continue to be held by the lawyer, there shall be a rebuttable presumption affecting the burden of proof as defined in Evidence Code sections 605 and 606 that a violation of paragraph (d)(7) has occurred if the lawyer, absent good cause, fails to distribute undisputed funds or property within 45 days of the date when the funds become undisputed as defined by paragraph (g). This presumption may be rebutted by proof by a preponderance of evidence that there was good cause for not distributing funds within 45 days of the date when the funds or property became undisputed as defined in paragraph (g).”
New paragraph (g) was added to Rule 1.15, to define the term “undisputed funds or property” as “funds or property, or a portion of any such funds or property, in the possession of a lawyer or law firm where the lawyer knows or reasonably should know that the ownership interest of the client or other person in the funds or property, or any portion thereof, has become fixed and there are no unresolved disputes as to the client’s or other person’s entitlement to receive the funds or property.”
Subparagraph (a)(3) of Rule 1.4 (Communication with Clients) obligates a lawyer to “keep the client reasonably informed about significant developments relating to the representation.” Comment  to Rule 1.4 provides, “Whether a particular development is significant will generally depend on the surrounding facts and circumstances.” Comment  was amended to further clarify that “a lawyer’s receipt of funds on behalf of a client requires communication with the client pursuant to rule 1.15, subparagraphs (d)(1) and (d)(4) and ordinarily is also a significant development requiring communication with the client pursuant to this rule.”
In addition, the new Client Trust Account Protection Program will require actively licensed attorneys to report annually to the State Bar whether they are responsible for client trust accounts and provide basic account information; complete an annual self-assessment that highlights specific rules and requirements for managing a client trust account; and annually review the applicable California Rules related to safeguarding client funds and certify to the State Bar that they comply with those rules. These additions are reflected in new rule 9.8.5 of the California Rules of Court, as further articulated in Rule 2.5 of the Rules of the State Bar of California.
These new rules may very well prove a daunting task for both lawyers in their attempts to comply with their mandates and the State Bar in proactively monitoring the compliance. In recognition of this, the State Bar and most local bar associations, as well as the California Lawyers Association, have offered webinars to help train lawyers in their new trust accounting obligations.
SOLICITATION: ABA OPINION 501 (APRIL 13, 2022)
ABA Model Rule of Professional Conduct 7.3(a), amended in 2018, contains a narrow definition of what constitutes a “solicitation.” Model Rule 7.3(b) delineates the type of solicitation that is expressly prohibited. Model Rules 8.4(a) and 5.3 extend a lawyer’s responsibility for solicitation prohibitions not only to actions carried out by the lawyer directly but also to the acts of persons employed by, retained by, or associated with the lawyer under certain circumstances. Model Rule 5.3(b) requires lawyer supervisors to make reasonable efforts to ensure that all persons employed, retained, or associated with the lawyer are trained to comply with the Rules of Professional Conduct, including Rule 7.3(b)’s prohibition. Under Model Rule 5.3(a), partners and lawyers possessing comparable managerial authority in a law firm must make reasonable efforts to ensure that the firm has training that reasonably assures that nonlawyer employees’ conduct is compatible with the professional obligations of lawyers. Under Model Rule 5.3(c), a lawyer is responsible for the conduct of a nonlawyer (i) if the lawyer orders or, with actual knowledge of the conduct, ratifies the nonlawyer’s conduct, or (ii) if the lawyer is a manager or supervisor and knows of the conduct at a time when its consequences can be avoided or mitigated but fails to take reasonable remedial action. Model Rule 8.4(a) makes it professional misconduct for a lawyer to “knowingly assist or induce another,” to violate the Rules or knowingly do so through the acts of another.
On the one hand, the opinion, through the use of helpful hypotheticals, demonstrates how failing to train a person employed, retained, or associated with the lawyer regarding Model Rule 7.3’s restrictions may violate Model Rules 5.3(a), 5.3(b), and 8.4(a). Many legal consumers obtain information about lawyers from acquaintances and other professionals. The Model Rules of Professional Conduct are rules of reason. On the other hand, the opinion’s hypotheticals show that recommendations or referrals by third parties who are not employed, retained, or similarly associated with the lawyer and whose communications are not directed to make specific statements to particular potential clients on behalf of a lawyer do not generally constitute “solicitation” under Model Rule 7.3.
COMMUNICATION WITH A REPRESENTED PERSON BY A PRO SE LAWYER: ABA OPINION 502 (SEPTEMBER 28, 2022)
Under Model Rule 4.2, if a person is represented in a matter, lawyers for others in the matter may not communicate with that represented person about the subject of the representation but instead must communicate about the matter through the person’s lawyer, unless the communication is authorized by law or court order or consented to by the person’s lawyer. When lawyers represent themselves, i.e., pro se, they may wish to communicate directly with another represented person about the subject of the representation and may believe that, because they are not representing another in the matter, the prohibition of Model Rule 4.2 does not apply. The ABA opinion concludes, however, that both the language of the Model Rule and its established purposes support the conclusion that Model Rule 4.2 applies to a pro se lawyer because pro se individuals “represent a person,” i.e., themselves, and lawyers are no exception to this principle. Accordingly, unless the pro se lawyer has the consent of the represented person’s lawyer or is authorized by law or court order to communicate directly with the other represented person about the subject of the representation, such communication is prohibited under the Model Rule. In this context, if direct pro se lawyer-to-represented person communication about the subject of the representation is desired, the pro se lawyer and counsel for the represented person should reach an advance agreement on the permissibility and scope of any direct communications.
It is critical to note that ABA Opinion 502 is based on Model Rule 4.2. California Rule 4.2 contains a comment which requires the opposite conclusion from that reached in ABA Opinion 502. See Comment  to California Rule 4.2 (“The rule also does not prohibit a lawyer who is a party to a legal matter from communicating on his or her own behalf with a represented person in that matter.”).
‘REPLY ALL’ IN ELECTRONIC COMMUNICATIONS: ABA OPINION 503 (NOVEMBER 2, 2022)
This opinion concluded that, in the absence of special circumstances, lawyers who copy their clients on an electronic communication sent to counsel representing another person in a matter impliedly “consent” within the meaning of Model Rule 4.2(a) to the receiving counsel’s “reply all” to the communication. The opinion concludes that unless that result is intended, lawyers should not copy their clients on electronic communications to other counsel; instead, lawyers should separately forward these communications to their clients. Alternatively, the opinion suggests that lawyers may communicate in advance to receiving counsel that they do not consent to receiving counsel replying to all, which would override the presumption of implied consent.
Note that COPRAC issued an advisory opinion in 2011 that addressed this same issue of implied consent under the former California Rule 2-100(A). Taking a nuanced approach, the opinion identified several factors that should be considered when analyzing a particular fact situation and concluded that the lawyer’s consent could be implied under the facts presented in the opinion. See COPRAC Opinion 2011-181 (“Such consent may be implied by the facts and circumstances surrounding the communication with the represented party. Such facts and circumstances may include those set below. None of the factors belowindividually are necessarily determinative of whether consent has, in fact, been implied. Rather, an examination of all facts and circumstances surrounding the communication with the represented party is necessary to determine whether consent may be inferred.”). A similar multi-factor analysis under Opinion 2011-181 suggests that a lawyer copying a client on an electronic communication should be only one of the factors that should be considered in determining whether the lawyer’s consent can be implied.
ATTORNEY BIOS: OCBA OPINION 2022-01 (JULY 27, 2022)
Issue: Without obtaining a client’s consent, may an attorney include on her bio or resume or in other marketing materials information about the representation of that client or even the name of the client in a listing of representative clients?
Digest: Absent informed client consent, the duty of confidentiality (Bus. & Prof. C. § 6068(e); CRPC 1.6(a)) precludes an attorney from including on her bio or resume or in other marketing materials the names or other information about her representation of a current or former client if the listing would be embarrassing or detrimental to that client or the client requested it to be kept confidential. An attorney also may not suggest that she regularly represents a client absent that client’s informed consent. In addition, even if listing a representation would not be embarrassing or detrimental to the client and thereby not a breach of the duty of confidentiality, an attorney still would be precluded from listing the client’s representation if the listing is in any way misleading.
DISQUALIFICATION AND DISCLOSURE OBLIGATIONS WHEN COACHING YOUTH SPORTS: CJEO OPINION 2022-019 (SEPTEMBER 2, 2022)
A trial judge who coaches a youth sports team on which the child of an attorney plays must determine whether mandatory or discretionary disqualification is required pursuant to the Code of Judicial Ethics and the California Code of Civil Procedure when the attorney appears before the court. If there is no basis for mandatory disqualification, the judge must then consider whether any of three discretionary grounds nonetheless support disqualification. Importantly, a judge must engage in an objective analysis of whether a person reasonably aware of the facts would doubt the judge’s ability to be impartial in the case. If the judge concludes that disqualification is not required, the judge must disclose, on the record, information reasonably relevant to the determination not to disqualify. The disclosure may be tailored to avoid potential security concerns, and the judge may consult with court administrators to address any unique circumstances regarding safety.
JUDICIAL CONSULTATIONS WITH OTHER JUDGES: CJEO OPINION 2022-020 (NOVEMBER 15, 2022)
Canon 3B(7)(a) [of the California Code of Judicial Ethics] expressly permits judges to consult with other judges subject to limited exceptions. For instance, a judicial officer may not consult with judicial officers who are disqualified from the matter or who may be involved in appellate review of the matter. (Ibid.)
The code does not define consultation; however, courts have interpreted the term broadly. The committee interprets consultation as any conversation among judges that assists a judicial officer in carrying out judicial functions, facilitates independent decision-making, and does not otherwise violate the code. Permissible consultation need not be phrased as a question or request for advice, initiated by the deciding judge, or follow a particular format. Consultation may include a discussion of the facts or legal issues in a case; however, a judge should make reasonable efforts to avoid receiving facts outside the record.
Judicial consultation may involve a discussion of facts, parties, or witnesses that another judge might encounter in a future proceeding; this is permissible under the code. There is a presumption of honesty and integrity in the judiciary, and judicial officers must be entrusted with the ability to disregard information that would be inadmissible in their own matters.
Neil J Wertlieb is an Inaugural Co-Chair and Founding Member of the California Lawyers Association Ethics Committee and a former Chair of the Business Law Section and its Corporations and Business Litigation Committees. Mr. Wertlieb is the General Counsel of Milbank LLP. The views expressed herein are his own.
 No ethics advisory opinions were issued during 2022 by the California Lawyers Association’s Ethics Committee (“CLAEC”), the California State Bar’s Committee on Professional Responsibility and Conduct (“COPRAC”), the Los Angeles County Bar Association’s Professional Responsibility and Ethics Committee (“PREC”), the San Diego County Bar Association’s Legal Ethics Committee (“SDCBA”), or the Bar Association of San Francisco’s Legal Ethics Committee (“BASF”).
 The three Model Rules discussed in Opinion 501 (Model Rules 7.3, 5.3, and 8.4(a)) are substantially similar to their counterparts in the California Rules of Professional Conduct. However, it is important to note that many California Rules of Professional Conduct differ significantly from the Model Rules. Before relying on an ABA advisory ethics opinion, a California lawyer is well-advised to closely compare the applicable ABA model rules with their California counterpart.
 ABA formal ethics opinions are generally available for free to ABA members. They are also available for free to non-ABA members for approximately one year after they are issued. All of the ABA opinions discussed in this article are currently available. See https://www.americanbar.org/groups/professional_responsibility/publications/ethics_opinions/ [last visited 1/19/23]. After one year, all ABA opinions are available for a fee.
 Former rule 2-100(A) differs from current rule 4.2(a) in that the latter substitutes the term “person” for “party” in rule 2-100(A).
 “Such facts and circumstances may include the following: whether the communication is within the presence of the other attorney; prior course of conduct; the nature of the matter; how the communication is initiated and by whom; the formality of the communication; the extent to which the communication might interfere with the attorney-client relationship; whether there exists a common interest or joint defense privilege between the parties; whether the other attorney will have a reasonable opportunity to counsel the represented party with regard to the communication contemporaneously or immediately following such communication; and the instructions of the represented party’s attorney.” See https://www.calbar.ca.gov/Portals/0/documents/ethics/Opinions/2011-181%20[10-0002]%20-%20PAW.pdf.
 See also https://calawyers.org/california-lawyers-association/ethics-spotlight-implied-consent-under-the-no-contact-rule/.
 See https://www.ocbar.org/Portals/0/pdf/OCBA202201.pdf.
 See https://www.judicialethicsopinions.ca.gov/wp-content/uploads/CJEO-Formal-Opinion-2022-019.pdf.
 See https://www.judicialethicsopinions.ca.gov/wp-content/uploads/CJEO-Formal-Opinion-2022-020.pdf.