Supervisory duties (Rules 5.1, 5.2, 5.3)

Special Coverage

PROPOSED RULES OF PROFESSIONAL CONDUCT

One of the reasons that ethics lawyers in California are mostly applauding the proposed new Rules of Professional Conduct is that the new rules incorporate many parts of the ABA Model Rules that clarify and explain concepts alluded to the California rules and case law but not explicitly stated.

The debate over the dual function of the rules as both disciplinary yardstick and prophylactic guidance as old as 1928 (when California's first set of bare bones disciplinary rules was written) and 2014 (when the California Supreme Court returned the work product of the first rules revision commission, partially on ground that it strayed too far from the disciplinary purpose of the rules). It probably won't end with the adoption of these new rules. There is plenty of both to go around here.

More explicit guidance for lawyers should be an unquestionable aspiration and without doubt the new rules provide it. The flipside of course is that explicit articulation of such duties creates greater potential for possible disciplinary action. The professional prosecutors in the Office of Chief Trial Counsel will be reading the new rules as well.

The attorney's duty to supervise subordinates is only alluded to in a comment to our competence rules, current Rule of Professional Conduct 3-110: "The duties set forth in rule 3-110 include the duty to supervise the work of subordinate attorney and non-attorney employees or agents." This is followed by a long list of citations to case law.

New proposed Rules 5.1, 5.2 and 5.3 offer a succinct but more detailed statement of what that duty to supervise requires.

Proposed new Rule 5.1(a) says that lawyers who manage law firms, both individually and collectively "shall make reasonable efforts to assure that all lawyers in the firm comply with with these rules and the State Bar Act." Rule 5.1(b) also requires lawyers who supervise other lawyers, whether or not a member or an employee, to make similar reasonable efforts to assure the compliance by the lawyer supervised.

New Rule 5.1(c) provides for vicarious culpability. A lawyer will be responsible for another lawyer's violation of the rules or of the State Bar Act if the "the lawyer orders or, with knowledge of the relevant facts and of the specific conduct, ratifies the conduct involved" or if the "lawyer, individually or together with other lawyers, possesses managerial authority in the law firm in which the other lawyer practices, or has direct supervisory authority over the other lawyer, whether or not a member or employee of the same law firm, and knows of the conduct at a time when its consequences can be avoided or mitigated but fails to take reasonable remedial action." Not only the lawyer who ordered or ratified the offending conduct but the managerial and supervising lawyers who knew and did nothing may be responsible.

The proposed comments to new Rule 5.1 make it clear that a violation of any of these duties is a cause for discipline.

Proposed new Rule 5.2 makes it clear the vicarious responsibility provided for in Rule 5.1(c) does not absolve a subordinate from responsibility for a violation of the rules, even if results from direction given from a managing or supervising lawyer. Only if the direction results from a close question of ethics "a reasonable resolution of an arguable question of professional duty" can the subordinate rely on the Nuremberg defense ("I was only following orders.")

Proposed new Rule 5.3 mirrors the structure of proposed Rule 5.1 but applies to non-lawyer employees. Managerial and supervisory lawyers must make reasonable efforts to ensure that the conduct of the non-lawyers they supervise is "compatible with the professional obligations of the lawyer." There is no explicit statement that violation of this rule is a cause for discipline but one is not really needed because there is much more disciplinary case law in this area, including most of the citations alluded to in the comment to our current Rule 3-110.

Prudent lawyers who manage or supervise other lawyers or non-lawyers would be well advised to provide education for all office personnel on what the rules and the State Bar Act require.

Rule 5.1 Responsibilities of Managerial and Supervisory Lawyers

(Proposed rule adopted by the board March 9, 2017)

(a) A lawyer who individually or together with other lawyers possesses managerial authority in a law firm,* shall make reasonable* efforts to ensure that the firm* has in effect measures giving reasonable* assurance that all lawyers in the firm* comply with these rules and the State Bar Act.

(b) A lawyer having direct supervisory authority over another lawyer, whether or not a member or employee of the same law firm,* shall make reasonable* efforts to ensure that the other lawyer complies with these rules and the State Bar Act.

(c) A lawyer shall be responsible for another lawyer's violation of these rules and the State Bar Act if:

(1) the lawyer orders or, with knowledge of the relevant facts and of the specific conduct, ratifies the conduct involved; or

(2) the lawyer, individually or together with other lawyers, possesses managerial authority in the law firm* in which the other lawyer practices, or has direct supervisory authority over the other lawyer, whether or not a member or employee of the same law firm,* and knows* of the conduct at a time when its consequences can be avoided or mitigated but fails to take reasonable* remedial action.

Comment

Paragraph (a) -- Duties Of Managerial Lawyers To Reasonably* Assure Compliance with the Rules.

[1] Paragraph (a) requires lawyers with managerial authority within a law firm* to make reasonable* efforts to establish internal policies and procedures designed, for example, to detect and resolve conflicts of interest, identify dates by which actions must be taken in pending matters, account for client funds and property, and ensure that inexperienced lawyers are properly supervised.

[2] Whether particular measures or efforts satisfy the requirements of paragraph (a) might depend upon the law firm's structure and the nature of its practice, including the size of the law firm,* whether it has more than one office location or practices in more than one jurisdiction, or whether the firm or its partners* engage in any ancillary business.

[3] A partner,* shareholder or other lawyer in a law firm* who has intermediate managerial responsibilities satisfies paragraph (a) if the law firm* has a designated managing lawyer charged with that responsibility, or a management committee or other body that has appropriate managerial authority and is charged with that responsibility. For example, the managing lawyer of an office of a multi-office law firm* would not necessarily be required to promulgate firm-wide policies intended to reasonably* assure that the law firm's lawyers comply with the rules or State Bar Act. However, a lawyer remains responsible to take corrective steps if the lawyer knows* or reasonably should know* that the delegated body or person* is not providing or implementing measures as required by this rule.

[4] Paragraph (a) also requires managerial lawyers to make reasonable* efforts to assure that other lawyers in an agency or department comply with these rules and the State Bar Act. This rule contemplates, for example, the creation and implementation of reasonable* guidelines relating to the assignment of cases and the distribution of workload among lawyers in a public sector legal agency or other legal department. See, e.g., State Bar of California, Guidelines on Indigent Defense Services Delivery Systems (2006).

Paragraph (b) -- Duties of Supervisory Lawyers

[5] Whether a lawyer has direct supervisory authority over another lawyer in particular circumstances is a question of fact.

Paragraph (c) -- Responsibility for Another's Lawyer's Violation

[6] A lawyer will not be in violation of paragraph (c)(1) if the lawyer's decision to ratify a course of conduct is a reasonable* resolution of an arguable question of professional responsibility.

[7] The appropriateness of remedial action under paragraph (c)(2) would depend on the nature and seriousness of the misconduct and the nature and immediacy of its harm. A managerial or supervisory lawyer must intervene to prevent avoidable consequences of misconduct if the lawyer knows* that the misconduct occurred.

[8] A supervisory lawyer violates paragraph (b) by failing to make the efforts required under that paragraph, even if the lawyer does not violate paragraph (c) by knowingly* directing or ratifying the conduct, or where feasible, failing to take reasonable* remedial action.

[9] Paragraphs (a), (b), and (c) create independent bases for discipline. This rule does not impose vicarious responsibility on a lawyer for the acts of another lawyer who is in or outside the law firm.* Apart from paragraph (c) of this rule and rule 8.4(a), a lawyer does not have disciplinary liability for the conduct of a partner,* associate, or subordinate lawyer. The question of whether a lawyer can be liable civilly or criminally for another lawyer's conduct is beyond the scope of these rules.

Rule 5.2 Responsibilities of a Subordinate Lawyer

(Proposed rule adopted by the board Nov. 17, 2016)

(a) A lawyer shall comply with these rules and the State Bar Act notwithstanding that the lawyer acts at the direction of another lawyer or other person.

(b) A subordinate lawyer does not violate these rules or the State Bar Act if that lawyer acts in accordance with a supervisory lawyer's reasonable* resolution of an arguable question of professional duty.

Comment

When lawyers in a supervisor-subordinate relationship encounter a matter involving professional judgment as to the lawyers' responsibilities under these rules or the State Bar Act and the question can reasonably* be answered only one way, the duty of both lawyers is clear and they are equally responsible for fulfilling it. Accordingly, the subordinate lawyer must comply with his or her obligations under paragraph (a). If the question reasonably* can be answered more than one way, the supervisory lawyer may assume responsibility for determining which of the reasonable* alternatives to select, and the subordinate may be guided accordingly. If the subordinate lawyer believes* that the supervisor's proposed resolution of the question of professional duty would result in a violation of these rules or the State Bar Act, the subordinate is obligated to communicate his or her professional judgment regarding the matter to the supervisory lawyer.

Rule 5.3 Responsibilities Regarding Nonlawyer Assistants

(Proposed rule adopted by the board Nov. 17, 2016)

With respect to a nonlawyer employed or retained by or associated with a lawyer:

(a) a lawyer who individually or together with other lawyers possesses managerial authority in a law firm,* shall make reasonable* efforts to ensure that the firm* has in effect measures giving reasonable* assurance that the nonlawyer's conduct is compatible with the professional obligations of the lawyer;

(b) a lawyer having direct supervisory authority over the nonlawyer, whether or not an employee of the same law firm,* shall make reasonable* efforts to ensure that the person's conduct is compatible with the professional obligations of the lawyer; and

(c) a lawyer shall be responsible for conduct of such a person* that would be a violation of these rules or the State Bar Act if engaged in by a lawyer if:

(1) the lawyer orders or, with knowledge of the relevant facts and of the specific conduct, ratifies the conduct involved; or

(2) the lawyer, individually or together with other lawyers, possesses managerial authority in the law firm* in which the person* is employed, or has direct supervisory authority over the person,* whether or not an employee of the same law firm,* and knows* of the conduct at a time when its consequences can be avoided or mitigated but fails to take reasonable* remedial action.

Comment

Lawyers often utilize nonlawyer personnel, including secretaries, investigators, law student interns, and paraprofessionals. Such assistants, whether employees or independent contractors, act for the lawyer in rendition of the lawyer's professional services. A lawyer must give such assistants appropriate instruction and supervision concerning all ethical aspects of their employment. The measures employed in instructing and supervising nonlawyers should take account of the fact that they might not have legal training.