Ethics Opinions

Opinion 12-02

Summary: When a suit to recover damages for personal injuries incurred on tribal lands in State X is contemplated, the ethics rules governing a contingent fee agreement between a Massachusetts attorney and her Massachusetts client are those of State X or the tribal court in State X and not the Massachusetts Rules of Professional Conduct.

Facts: Attorney's client, a Massachusetts resident injured on Native American tribal land in State X, hired Attorney, a Massachusetts lawyer, to represent him in a suit in the tribal court in State X against the tribal-owned business in which he was injured. Recognizing that the seriousness of the injuries meant that Attorney was going to have to do more work than usual, client agreed to a contingent fee of 40% of the recovery. The State X lawyer whom Attorney associated with her reported that State X would not permit a contingent fee of more than 33 1/3% in the matter. Attorney inquires whether she may enter into a contingent fee agreement of 33 1/3% with client and the State X lawyer and then enter into an additional contingent fee agreement with client that when added to the State X net fee and her initial referral fee would not exceed 40% of the recovery.

Discussion: This inquiry raises a question of interpretation of Rule 8.5(b) as it was recently adopted by the Supreme Judicial Court. That Rule provides:

(b) Choice of Law. In any exercise of the disciplinary authority of this jurisdiction, the rules of professional conduct to be applied shall be as follows:

(1) for conduct in connection with a matter pending before a governmental tribunal, the rules of the jurisdiction in which the tribunal sits, unless the rules of the tribunal provide otherwise; and

(2) for any other conduct, the rules of the jurisdiction in which the lawyer's principal office is located shall be applied, unless the predominant effect of the conduct is in a different jurisdiction, in which case the rules of that jurisdiction shall be applied. A lawyer shall not be subject to discipline if the lawyer's conduct conforms to the rules of a jurisdiction in which the lawyer reasonably believes the predominant effect of the lawyer's conduct will occur.

Comments 4, 4A, and 4B to that Rule go on to discuss the provisions relevant to this inquiry as follows:

[4] Paragraph (b)(1) provides that as to a lawyer's conduct relating to a proceeding pending before a government tribunal, the lawyer shall be subject only to the rules of the government tribunal, if any, or of the jurisdiction in which the government tribunal sits unless the rules of that tribunal, including its choice of law rule, provide otherwise. By limiting application of the rule to matters before a government tribunal, e.g., a court or administrative agency, parties may establish which disciplinary rules will apply in private adjudications such as arbitration.

[4A] As to all other conduct, including conduct in anticipation of a proceeding not yet pending before a tribunal, the choice of law is governed by paragraph (b)(2). Paragraph (b)(2) creates a "default" choice of the rules of the jurisdiction in which the lawyer's principal office is located. There are several reasons for identifying such a default rule. First, the jurisdiction where the lawyer principally practices has a clear regulatory interest in the conduct of such lawyer, even in situations where the lawyer's conduct affects other jurisdictions. Second, lawyers are likely to be more familiar with the rules of the jurisdiction where they principally practice than with rules of another jurisdiction, even if licensed in that other jurisdiction. Indeed, most lawyers will be licensed in the jurisdiction where they principally practice, and familiarity with a jurisdiction's ethical rules is commonly made a condition of licensure. Third, in many situations, a representation will affect many jurisdictions, such as a transaction among multiple parties who reside in different jurisdictions involving performance in yet other jurisdictions. The selection of any of the jurisdictions that are affected by the representation will often be problematic.

[4B]There will be some circumstances, however, where the predominant effect of the lawyer's conduct will clearly be in a jurisdiction other than the jurisdiction in which the lawyer maintains his or her principal office. Accordingly, paragraph (b)(2) provides that when the predominant effect of the lawyer's conduct is in a jurisdiction other than the jurisdiction in which the lawyer's principal office is located, the ethical rules of such other jurisdiction apply to such conduct. For example, when litigation is contemplated but not yet instituted in another jurisdiction, a lawyer whose principal office is in this jurisdiction may well find that the rules of that jurisdiction govern the lawyer's ability to interview a former employee of a potential opposing party in that jurisdiction. Likewise, under Rule 8.5(b), when litigation is contemplated and not yet begun in this jurisdiction, a lawyer whose principal office is in another jurisdiction may well find that the rules of this jurisdiction govern the lawyer's ability to interview a former employee of a potential opposing party in this jurisdiction.

The question raised by the inquiry is whether Massachusetts professional responsibility law on the one hand or State X or tribal professional responsibility law on the other governs questions about the proposed fee contract. We do not have to reach a conclusion on the issue whether Rule 8.5(b)(1) should be read literally to provide that no conduct falls within its terms until a complaint has actually been filed. The same outcome, that the rules of the litigation jurisdiction control, would result under Rule 8.5(b)(2). Under that provision, the default rule is that Massachusetts professional responsibility law governs unless the "predominant effect" of the lawyer's conduct is in State X, where the litigation will occur. Comment 4B suggests that the ability to interview former employees of an opposing party may well be governed by the litigation jurisdiction under the "predominant effect" rule. The lawyer's conduct at issue in this inquiry - the collection of a fee after litigation services have been rendered -- properly belongs with the litigation jurisdiction even though the fee agreement was signed before the complaint was filed. Typically, the litigation court claims jurisdiction to judge the reasonableness of a fee for litigation conducted in its court. It would be peculiar to say that the Massachusetts version of Rule 1.5 applies until suit is filed but then the law of another jurisdiction governs compensation arrangements relating to the litigation. For the same reason, we believe that Massachusetts law should govern a fee contract entered into in another state relating to litigation in a Massachusetts court.

Having reached this conclusion about the meaning of Rule 8.5, this committee may not advise about the law of another jurisdiction. Attorney perhaps needs to consult further with the State X lawyer about State X and/or tribal law relating to attorneys' fee contracts depending on the respective jurisdictions of the State X or tribal courts under the relevant federal legislation.

This opinion was approved for publication by the Massachusetts Bar Association's House of Delegates on May 17, 2012.

 

 

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