Beware of Common Ethical Blindspots

Building and maintaining a law practice requires hard work, even more so for solo practitioners and small firms where attorneys juggle business development, advertising, human resources, billing, accounting, and a host of other functions –all while servicing existing client needs.  Many of these tasks in one way or another implicate ethical obligations imposed by the Georgia Rules of Professional Conduct (“Georgia Rules”), some of which are obvious and some that are not.  And even the most detail-oriented and diligent attorney can have ethical blind spots.  Failure to fully understand and comply with such obligations can result in significant legal and financial consequences, not to mention intangible harm such as reputational damage. This article is not intended to be a comprehensive discussion of ethical obligations. Instead, it seeks to highlight several recurring ethical issues we encounter in representing attorneys in disciplinary and legal malpractice matters, which includes deficiencies in IOLTA account management, conflicts of interest, and attorney advertising and referral fee practices.

In order to gauge your awareness of these issues, begin by answering the following questions: 

Georgia Rule 1.15 – Safekeeping of property, IOLTA accounts, and related recordkeeping

1. For each client whose funds are deposited in my IOLTA account, do you maintain a client ledger sufficiently detailed to show:

• the fee agreement with each client;
• the name of the client;
• the date, amount, and source of all funds received on behalf of each client;
• the date, amount, payee, and nature of each disbursement for each client; and
• the current balance for each client.

YES – NO – NOT ALWAYS 

2. Do you perform a three-way reconciliation every month of my IOLTA statement, checkbook, and all individual client ledger balances. 

YES – NO – NOT ALWAYS 

3. Do you maintain for seven (7) years the following records:

• fee agreements with the client;
• copies of the monthly 3-way reconciliation; 
• all bank statements;
• all deposit slips; and
• all canceled checks.

YES – NO – NOT ALWAYS 

4. Do you ensure earned fees or other personal funds are never maintained in the IOLTA account, other than a nominal amount to cover any bank fees or to keep a required minimum balance. 

YES – NO – NOT ALWAYS 

Georgia Rules 1.7 and 1.9 – Conflicts of interest 

1. Do you have an established system to identify actual and potential conflicts of interest? 

YES – NO – NOT ALWAYS

2. Do you screen for conflicts prior to receiving confidential information (i.e. discussing the substance of the matter) from potential clients? 

YES – NO – NOT ALWAYS

3. Do you circulate information on the identity of new and prospective clients throughout the firm? 

YES – NO – NOT ALWAYS

4. Do you send written notice to potential clients whose cases you decline? 

YES – NO – NOT ALWAYS

5. Do you maintain a centralized computer repository of all client files, emails, and voicemails, and communications from potential clients who disclosed confidential information? 

YES – NO – NOT ALWAYS

6. As applicable, does your repository include the following information? 

• client name (including aliases and d/b/a name)
• affiliates, partners, directors, officers, etc. of client 
• adverse parties 
• co-plaintiffs or co-defendants 
• if known, counsel of any clients, individuals or entities identified in the repository 

YES – NO – NOT ALWAYS

7. If a potential conflict is found, do you either decline in writing to take the case or, if the conflict is waivable, notify the client of the potential conflict in writing and obtain written informed consent to waive the conflict?

YES – NO – NOT ALWAYS 

Georgia Rules 7.1, 7.2 and 7.3 – Communications about Services, Advertising, and Direct Contact with Prospective Clients 

1. Do you review the content of your firm’s advertisements and marketing materials prior to dissemination in order to verify compliance with the Georgia Rules? 

YES – NO – NOT ALWAYS 

2. Do you maintain for two (2) years copies of all advertisements and marketing materials along with a record of when and where it was used?

YES – NO – NOT ALWAYS 

3. Do you prohibit the payment of referral fees or other forms of compensation to non-lawyers in exchange for securing clients or as a reward for having made a recommendation resulting in the firm’s employment by a client?

YES – NO – NOT ALWAYS 

* * *

If you did not answer “yes” to each of these questions, you are at risk of a disciplinary action by the State Bar and potentially other claims.  Prompt action should be taken to correct identified deficiencies and you should consider a more complete audit of your law firm’s practices.  Towards this end, Chandler Law has helped hundreds of attorneys identify ethical deficiencies and implement best practices. We are happy to discuss this with you.