MARYLAND STATE BAR ASSOCIATION, INC.
COMMITTEE ON ETHICS
ETHICS DOCKET NO. 2004-13
Duty to Report Professional Misconduct
Your inquiry states that you represent an attorney who employed four (4) salaried associates. In his practice, he is appointed, by court order, to serve as a fiduciary in various matters. During a brief period of time, your client was the subject of a disciplinary investigation and during that time frame; he authorized two of his senior associates to substitute their name for his in various appointments. After about six months, the disciplinary matter was resolved and the associates were instructed to cease seeking their own appointments and to return to the prior practice of only seeking your client's appointment.
Subsequently, your client discussed retiring from the practice of law and selling his practice to the two associates. The negotiation was unsuccessful. In December 2003, your client discovered that the associates were being appointed as fiduciaries, not with-standing his contrary directive. He confronted one of the associates and after failing to receive an adequate explanation terminated her employment. He then accessed the computers in his office and discovered an "Instant Messenger" conversation between the two associates that had taken place in December 2002. The conversation in part states:
"A: all the templates for guardianships and estates updated with 2003 date
A: didn't change any of yours
A: will do so on Thursday
B: i am not going to enter any deal w/o you. i think i will get a salary increase, make him feel cozy & steal his practice
A: he's even a bigger [expletive] then I could have imagined
A: he'd sell his mother for a buck
B: we can still steal it even without you getting appointed. He can't stop me from getting appointed & he has not suggested it as of yet."
After being terminated, the two associates removed a number of files from your client's office without his notice or permission. Your client has received further requests from clients to turn their files over to the former associates, who have now relocated to a different floor in the same building. Based upon the above information, you request this Committee to render an opinion as to whether your client is required under Rule 8.3 to report the prior associates' actions to the appropriate professional authority. You indicate that you have discussed this matter with the associates' attorney who contends that Rule 8.3 does not mandate reporting because there is no actual knowledge of wrongdoing. You specifically ask whether Rule 8.3 mandates that a lawyer must have "actual personal knowledge" before being required to contact the appropriate professional authority, or is one bound to report based on reasonable inference.
The applicable portion of Rule 8.3 provides as follows:
Rule 8.3. Reporting Professional Conduct
(a) A lawyer having knowledge that another lawyer has committed a violation of the Rules of Professional Conduct that raises a substantial question as to that lawyer's honesty, trustworthiness or fitness as a lawyer in other respects, shall inform the appropriate professional authority.
This Committee, in Ethics Docket 98-3 has previously opined on the steps that should be followed by an attorney attempting to reach a determination as to when Rule 8.3 requires the reporting of another attorney's misconduct. In that Opinion, we stated as follows:
Thus, you must determine whether the conduct at issue raises substantial question as to the attorney's honesty, trustworthiness or fitness to practice law. The rules define substantial as denoting a "material matter of clear and weighty importance." We cannot provide a definitive response as to whether the conduct at issue meets this threshold. That assessment is a factual determination that must be made by the attorney confronted with the conduct. This precise issue was, however, addressed by two of the leading writers on professional ethics:
Conduct sufficiently serious to trigger Rule 8.3(a) cannot be described with precision. A "substantial" violation of the rules alone is not enough; the violation must be of such a nature that the conduct raises a "substantial" question about the fitness of the offending lawyer to carry out his professional role.
Given the standard, the duty to report probably extends to criminal or fraudulent conduct not directly incident to the provision of legal services. As discussed in connection with Rule 8.4(b) and (c), the commission of certain crimes and other fraudulent behavior is a legitimate concern of professional ethics, and those rules use language echoing that of Rule 8.3(a). The combined effect of these provisions appears to be that if a lawyer's tax fraud on her own income tax return, or a lawyer's illegal securities transactions are sanctionable because they involve dishonesty, untrustworthiness or lack of "fitness" then they are also subject to the duty to report. Hodes and Harzard, The Law of Lawyering, Section 8.3:201 at 945-46 (1997).
With this information as guidance, the Committee leaves it to you to form your own judgment, based on your detailed knowledge of the facts, as to whether the conduct at issue rises to the level that would trigger the mandatory reporting requirements.
Similarly, in Ethics Docket 89-36, this Committee also addressed an attorney's duty to report ethics violations and set forth standards to follow. In that Opinion, our Committee stated:
While a lawyer who violates any of the ethical and professional conduct standards set forth in the Rules is subject to disciplinary sanctions [Rule 8.4(a)], another lawyer has no duty1 to report a violation unless the violation raises a "substantial" question as to a lawyer's honesty, trustworthiness or fitness as a lawyer in other respects. Comment to Rule 8.3.
Also, while every lawyer is answerable to the entire criminal law, a lawyer is "professionally answerable only for offenses that indicate lack of those characteristics relevant to law practice. Offenses involving violence, dishonesty, or breach of trust, or serious interference with the administration of justice are in that category." Comment to Rule 8.4(b). Thus, under the Rules of Professional Conduct, a lawyer's duty to report criminal acts of another lawyer is also limited to those acts which raise a "substantial" question as to a lawyer's honesty, trustworthiness or fitness as a lawyer in other respects.
"The term 'substantial' refers to the seriousness of the possible offense and not to the quantum of evidence of which the lawyer is aware." Comment to Rule 8.3.
Whether or not a given violation of ethics or illegal act is "substantial" requires a judgment call, since the Rule is not more specific. Comment to Rule 8.3.
Since the conduct and acts you refer to are already a matter of public record, because of disclosure by your clients on the court record, then it appears that that information is not protected from further disclosure under Rule 1.6. While the Rule requires that a lawyer have "knowledge" of the violation, it does not require that such be based on "personal knowledge". In the Terminology Section of the Rules, "Knowingly", "Known" or "Knows" is defined to be "actual knowledge of the fact in question." It is further stated therein that "A person's knowledge may be inferred from circumstances." We are of the opinion that the Rule requires that a lawyer have some reliable evidence, which indicates a reasonable probability that a violation has occurred, as opposed to having a mere suspicion thereof. MSBA Committee on Ethics Opinion 84-57.
Your questions as to whether the Rule mandates that a reporting attorney have "actual personal knowledge" to report under 8.3 or whether he should do so based on reasonable inference are questions that the Committee believes are dependent upon the entire set of circumstances presented to your client. We as a Committee do not, as a matter of policy, make these types of decisions because of the subjective nature of the determination that must be made by your client. Furthermore, the Committee's Guidelines provide that it does not usually issue Opinions regarding the conduct of someone other than the person requesting the Opinion. Although your inquiry purports to seek guidance for your client, if the Committee were to make a determination as to the allegedly offending attorney's actions in this matter, it would, in effect, be rendering a determination regarding the conduct of someone other than the inquirer. Lastly, the Committee, pursuant to its Guidelines, does not issue Opinions on questions of law and issues likely to be decided by a court or tribunal in existing or threatened litigation. In light of the fact that both sides are represented in this matter, it would appear that this matter is either in, or will shortly be in litigation, at which time additional facts may be brought to light, which would help your client reach a decision regarding his reporting duty.
In conclusion, the Committee feels that your client's duty to report is his decision to make based upon the entire set of circumstances, including facts and reasonable inferences drawn therefrom.
1 The Rule is concerned only with a lawyer's affirmative duty to report certain wrongdoings to the Attorney Grievance Commission, the failure to do so in the appropriate situation may itself be a violation of the Rules of Professional Conduct. Attorney Grievance Commission v. Kahn, 209 Md. 654, 664(1981); MSBA Ethics Committee Opinion 86-14