How to Avoid the Most Common Legal Ethics Violations with Daniel Siegel

civil litigation cybersecurity ethics ethics lawyers legal entities technology violations Jun 22, 2023

Ethics is an integral part of any professional practice. But be that as it may, it is a fact that lawyers are also human and are susceptible to making errors. There are so many areas in ethics lawyers can miss. However, the repercussions for these mistakes can be more grave as legal entities. That said, lawyers bear the responsibility of being proactive, well-informed, and up-to-date with legal ethics guidelines.

In this episode, Daniel Siegel joins us to discuss the most common violations of ethics lawyers and law firms encounter. He also delves into the number one source of client complaints with lawyers: mismanagement of communication. Daniel shares actionable tips on managing time and client expectations, handling IOLTA, and law firm equity stakes.

The ethics lawyers have to follow may seem complex, but ignorance is no excuse. If you want to avoid ethical pitfalls as a lawyer, this episode is for you.

Here are three reasons why you should listen to this episode

Find out the most common areas of ethics lawyers get into trouble.
Discover the best practices for managing your time as a lawyer.
Learn more about how IOLTA works.

Resources

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Want to implement what you’ve learnt in this episode? Download the Action Guide, a workbook designed to help you process and implement the knowledge gained from this interview.
Learn more about the Profit with Law Elite Coaching Program here.
Episode 379 - Cultivating Endless Referrals The Power of Relationships with Bob Burg
Connect with Daniel: Website
How to Do More in Less Time by Daniel Siegel
Read Daniel’s books for more on legal ethics!
Maximum Lawyer

Episode Highlights

Daniel’s Story

Daniel: “Like most people, when I got into law, I didn't know where I would end up. And in fact, where I ended up isn't where I could have even envisioned when I started.”

When he started, there wasn't technology, and he didn't know much about the ethics lawyers have to think about.
He practiced in prominent personal injury firms for a long time, where he also did appellate work.
Being in a workplace with some questionable ethics got him involved in ethics. It led him to meet a lot of lawyers outside of personal injury.
Nineteen years ago, he realized the firm he was with wasn't where he wanted to be. He decided to open his firm.
Lawyers, not public clients, came to him for assistance. His experience writing a technology column led him to open a tech consulting firm.

Daniel: “I was able to do that once I had the freedom to be my own boss. My other firms just wanted me to do what they needed me to do.”

The Most Common Areas of Ethics Lawyers Get into Trouble

The single area lawyers across the country find themselves getting into trouble is mismanaged trust accounts.
IOLTA stands for Interest on Lawyers Trust Accounts. It’s mismanagement, not stealing.
Another area is conflicts of interest and mismanaging the client aspect.
The single number one source of client complaints to disciplinary authorities is failure to communicate and non-response.
Time management is often the problem with mismanagement of client communication.

How to Do More in Less Time

Lawyers either feel they need to respond to their clients immediately or ignore them.
Know when you’re going to do certain things in your day.
Manage client expectations. Explain to them that you will respond to them as soon as possible, but not always instantly.

Daniel: “Managing time is managing the expectations of others and planning.”

Every day, make a list of three times that you must do that day. That will keep you in check on the things you won't do.

Daniel: “You manage the time, and you don't let the time manage you.”

Tune in to the full episode to hear Moshe's explanation of batching, context switching, and auto-responses!

Interest on Lawyers Trust Accounts (IOLTA)

All attorneys in every state abide by Rule 1.15, which deals with IOLTA accounts.
The rule differs a little for every state, but it’s the same for the most part. It requires the three-way reconciliation by ABA.
ABA’s three-way reconciliation is set to be done monthly. Listen to the episode to know how the rule works in Pennsylvania!
Many lawyers get into trouble when they put off managing their money in the account for later. It could lead to a license issue.
It’s ultimately on the lawyer. It’s not something you can completely delegate.

Daniel: “It's one thing if they steal from your business account, but once it's your trust account, it's not your money, and the responsibilities are greater. You're a fiduciary, and the consequences are significantly greater.”

On Flat Fee Billing

Flat fees are permissible. The Professional Guidance Committee issued a formal opinion on it.
A flat fee doesn't have to go into an IOLTA account if the client agreement specifies in writing that it is a flat fee, non-refundable, and will not be placed in a trust account.
As long as lawyers do that and it is deemed earned on receipt, they don't have to go through the IOLTA regulations.
Concerns only arise in cases where you don't complete the work or if the fee is excessive.
IOLTA is only for funds you hold for someone else until another event occurs. Listen to the episode to learn more about flat fee billing and IOLTA!

What is a Formal Opinion?

A formal opinion provides general guidance to the Bar and lawyers licensed in the state.
Lawyers should always check with their own state's guidance. The ethics lawyers should keep in mind may vary from state to state.

Ownership and Equity Stakes in Law Firms

Having non-attorneys as equity partners of a law firm refers to a regulatory sandbox. Some states are experimenting with it, including Arizona and Utah.
The challenge is two-fold: non-attorney ownership, and the flip side of creating greater access to justice. They're two very different reasons.
The downside of it is the limitation of not giving valid legal services. Nevertheless, the sandbox is a potential payoff to help people.
In some cases, it can also fall into another area called unauthorized practice of law.

Daniel: "There are some states that are zealous, or at times, I think, overzealous with lawyers who aren't licensed in that state coming in to just do something that's called multi-jurisdictional practice, and a lot of it is just self-protection."

Daniel’s Parting Piece of Advice

Don’t be afraid to do something.

Daniel: "Make sure you have the support of key people. But when you're doing it, do it with your eyes open because it's a challenge."

Making the right decision is sometimes scary. But the ethics lawyers have shouldn’t be something they pick and choose based on convenience.

Moshe: “Think about what your possibilities are if you get really good at running your law firm.”

About Daniel

Daniel Siegel is a nationally recognized authority on ethics, technology, data protection and cybersecurity, civil litigation and workers' compensation matters, and business workflow management, and the principal of both the Law Offices of Daniel J. Siegel, LLC and Integrated Technology Services, LLC. His practice includes representing attorneys in disciplinary matters; providing professional responsibility guidance to attorneys and firms; serving as appellate counsel; representing individuals in workers' compensation and personal injury matters. In short Dan handles the types of matters that keep attorneys awake at night.

Connect with Daniel on his website.

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