Conflicts of Interest

In re Morse, 748 S.E.2d 921 (Ga. 2013)

This disciplinary matter is before the Court on a Petition for Voluntary Discipline filed by Respondent Jack O. Morse pursuant to Bar Rule 4-227(b)(2) before a formal complaint was issued. In his petition, Morse admits violating Rule 1.8(e) of the Georgia Rules of Professional Conduct set forth in Bar Rule 4-102(d). Although such a violation is punishable by public reprimand, Morse requests the imposition of a Review Panel reprimand. The State Bar has no objection.

Morse, who has been a member of the State Bar since 1972, admits that while representing a client in a personal injury claim, he lent the client $1,400 for the client’s use in avoiding foreclosure and possible jail time for his violation of probation. Although the client repaid the loan in full, Morse admits that he violated Rule 1.8(e). He asserts that while he has had three instances of prior discipline (having received a 90-day suspension in 1996, and Review Panel reprimands in both 1993 and 1998—one of which was for similar misconduct), he has had no disciplinary matters for an extended period of time. He further asserts that since 1998, he has shown a strong regard for the professional standards of conduct and asks that this Court consider, in mitigation, his cooperative attitude with disciplinary authorities and the fact that the violation occurred as a result of him attempting to assist the client, a longtime acquaintance.

Under these specific circumstances, we agree that imposition of a Review Panel reprimand is an appropriate sanction. Accordingly, we accept Morse’s petition for voluntary discipline and hereby order that Morse receive a Review Panel reprimand in accordance with Bar Rules 4-102(b)(4) and 4-220(b) for his admitted violation of Rule 1.8(e).

Blackwell, Justice, concurring.

I concur fully in the opinion of the Court, but I write separately to remind our readers that a lawyer providing financial assistance to a litigation client is not always a violation of Rule 1.8(e). With two exceptions, Rule 1.8(e) provides that “a lawyer shall not provide financial assistance to a client in connection with pending or contemplated litigation.” By its plain terms, the Rule only prohibits the provision of financial assistance to a litigation client to the extent of some “connection” between the financial assistance on the one hand, and the litigation or representation on the other.(n.2 in opinion) Such a connection might exist, for instance, if the lawyer intended the financial assistance to enable or encourage the client to retain the lawyer or to prosecute the litigation, if the client actually was encouraged or enabled by the financial assistance to retain the lawyer or to prosecute the litigation, or if the lawyer and client agreed that the financial assistance would be repaid from amounts awarded in the litigation. By the way, this list of circumstances that might suffice to show the requisite connection is not intended to be an exhaustive one.

Absent such a “connection,” a lawyer may provide financial assistance to a litigation client without running afoul of Rule 1.8(e).

This understanding not only is required by the plain terms of the Rule, but it also is perfectly consistent with the three purposes of Rule 1.8(e). First, Rule 1.8(e) is intended to preserve the loyalty and independence that the lawyer owes to the client, loyalty and independence that might be compromised if the lawyer obtained “too great a financial stake in the litigation.” American Bar Association Model Rules of Professional Conduct, Rule 1.8, comment 10. Second, the Rule is intended to “prevent clients from selecting a lawyer based on improper factors,” considering that “unregulated lending to clients might generate unseemly bidding wars for cases.” Third, the Rule is intended to restrain the pernicious practices of barratry, maintenance, and champerty.(n.4 in opinion) At common law, barratry was “the offence of frequently exciting and stirring up suits and quarrels between his majesty’s subjects, either at law or otherwise.” Maintenance was “an officious intermeddling in a suit that in no way belongs to one, by maintaining or assisting either party with money or otherwise, to prosecute or defend it.” Champerty was a particular species of maintenance, namely “a bargain with a plaintiff or defendant to divide the land or other matter sued for between them, if they prevail at law; whereupon the champertor is to carry on the party’s suit at his own expense.”

As I see it, financial assistance to an existing client that has no connection whatsoever with the litigation or representation of the client does not offend any of the policies that the Rule is intended to promote.

This case is a little troubling to me because it appears from the record that Morse has been a friend of his client for a long time, such that he might have provided financial assistance to his client independent of the attorney-client relationship or the litigation, and indeed, even in the absence of an attorney-client relationship or litigation. Lawyers can be generous, and it is not uncommon for lawyers to help out their kin, their friends, and their neighbors. Nevertheless, Morse has unequivocally admitted a violation of Rule 1.8(e), and as such, he has implicitly admitted a connection between the financial assistance he provided and the litigation in which he represented his client. For that reason, I am content to join the Court in accepting his petition for voluntary discipline, and I am satisfied with the discipline that the Court has seen fit to impose. I am authorized to state that Justice Hunstein joins in this concurrence.

Committee on Prof. Ethics v. Mershon, 316 N.W.2d 895 (Iowa 1982)

McCormick, Justice

This case involves review of a Grievance Commission report recommending that respondent be reprimanded for alleged ethical violations arising from a business transaction with a client. We adopt the recommendation.

From our de novo review of the record, we find the facts as follows. Respondent is a Cedar Falls attorney. He began to do tax and property work for Leonard O. Miller, a farmer, in 1951. Miller owned 100 acres of farmland adjacent to a country club near the city. In 1969, when he was 68, Miller became interested in developing the land for residential purposes. He employed a landscape architect and R. O. Schenk, of Schenk Engineering Company, to prepare a preliminary plat and market study.

When the preliminary work was completed, Miller brought Schenk to meet with respondent to discuss the project. Miller wished to proceed with the development but did not have sufficient funds to pay engineering costs. Schenk suggested that the three men form a corporation to which Miller would contribute the land, Schenk would contribute engineering services, and respondent would contribute legal services. They agreed the land was worth approximately $400 an acre. Schenk estimated engineering costs at $400 an acre, and he said legal costs were usually one half that amount.

After several conferences in early 1970, the three men formed a corporation, Union Township Development, Inc. Subsequently Miller conveyed the farmland to the corporation at a capitalized value of $12,500 and received 400 shares of stock. Schenk gave the corporation a $12,500 promissory note and also received 400 shares of stock. Respondent gave the corporation a $6,250 promissory note and received 200 shares of stock. The promissory notes were interest free and due at the discretion of the corporation. They were to represent the services to be rendered by Schenk and respondent.

Development plans were premised on the corporation’s ability to obtain financing on the security of the farmland. As it turned out, the corporation was unable to borrow money unless the three individuals would guarantee the obligation personally. They refused to do so, and financing was never obtained.

The trio met at least annually to discuss the development, but when Miller died on December 31, 1978, at the age of 77, the project was still at a stalemate. Respondent believed the parties had an oral agreement that if development did not occur he and Schenk would relinquish their interests in the corporation to Miller. Three days after Miller’s death, he transferred his stock to the corporation. He asked Schenk to do the same thing, but Schenk refused, denying any obligation to do so.

Respondent was nominated in Miller’s will as executor of his estate. He served in that capacity until Miller’s two daughters expressed dissatisfaction with his role in Miller’s conveyance of the farmland to the corporation. He then resigned as executor. Consistent with his view, he showed Miller as owner of all corporate stock in the preliminary probate inventory. The farmland was appraised at $4,000 an acre.

Although respondent had expended $900 in out-of-pocket expenses for the corporation and performed legal services worth more than $6,000, he did not intend to seek payment. Schenk, however, maintained at the time of the grievance hearing that he still owned one half of the outstanding stock of the corporation.

The determinative question in our review is whether this evidence establishes a violation of the principle in DR5-104(A), which provides:

A lawyer shall not enter into a business transaction with a client if they have differing interests therein and if the client expects the lawyer to exercise his professional judgment therein for the protection of the client, unless the client has consented after full disclosure.

In order to establish a violation of DR5-104(A) it is necessary to show that the lawyer and client had differing interests in the transaction, that the client expected the lawyer to exercise his professional judgment for the protection of the client, and that the client consented to the transaction without full disclosure.

The definitions section of the code of professional responsibility defines “differing interests”:

“Differing interests” include every interest that will adversely affect either the judgment or loyalty of a lawyer to a client, whether it be a conflicting, inconsistent, diverse, or other interest.

Miller and Mershon plainly had differing interests in at least two aspects of the transaction. One was the issue of giving respondent a present interest in the corporation in anticipation of future legal services. The fee agreement was made during the existence of the attorney-client relationship and thus was subject to the general principles governing attorney-client transactions. Because respondent’s fee was tied to the amount of his stock in the corporation, he and Miller had differing interests concerning the extent of respondent’s stock ownership. Another differing interest involved making respondent a debtor of the corporation to assure that the services would be performed. Because Miller’s interest was aligned wholly with the corporation, he and respondent had differing interests with respect to respondent’s promissory note.

No dispute exists that Miller relied on respondent to exercise his professional judgment to protect him. One respect in which respondent did so was in preparing a written agreement to assure that Miller was reimbursed from the first profits of the corporation for the preincorporation expenses of preliminary studies. This, however, was the only agreement of the parties that was reduced to writing.

The fighting issue before the Commission was whether respondent made full disclosure to Miller within the meaning of the Canon before Miller entered the transaction. If full disclosure means only that respondent made Miller fully aware of the nature and terms of the transaction, this requirement was satisfied. Nothing was hidden from Miller, and he was an active participant in the transaction. Full disclosure, however, means more than this.

Because of the fiduciary relationship which exists, the attorney

has the burden of showing that the transaction was in all respects fairly and equitably conducted; that he fully and faithfully discharged all his duties to his client, not only by refraining from any misrepresentation or concealment of any material fact, but by active diligence to see that his client was fully informed of the nature and effect of the transaction proposed and of his own rights and interests in the subject matter involved, and by seeing to it that his client either has independent advice in the matter or else receives from the attorney such advice as the latter would have been expected to give had the transaction been one between his client and a stranger.

Respondent acknowledges he did not suggest to Miller that he obtain independent advice. The record does not show he otherwise gave Miller the kind of advice Miller should have had if the transaction were with a stranger. Respondent let Schenk estimate the value of his legal services and thus the extent of respondent’s stock ownership without any investigation to determine whether the estimate was accurate. Nor did he suggest to Miller that he make such investigation. If Schenk’s estimate was generous, the effect may have been to chill respondent’s scrutiny of the benchmark for the valuation, which was Schenk’s valuation of his own services. Furthermore there was no discussion or investigation concerning the reasonableness or wisdom of tying respondent’s fee for future services to a present twenty percent interest in the corporation. Respondent acknowledges that the arrangement was at least a technical violation.

Nothing was done to assure that Miller would get his farm back if either Schenk or respondent did not perform or if the development should not be undertaken. Nothing was done to protect Miller or his estate in the event of the death of any of the parties. The promissory notes could hardly have been on more favorable terms to the debtors. The record does not show whether Miller was informed of the difficulty the corporation might have in enforcing respondent’s obligation. So far as the record shows, Miller was not told of any possible effect of respondent’s differing interests on the exercise of his professional judgment.

The Commission found respondent is forthright and honest and gained no profit from the transaction. The record confirms this finding. As the Commission also found, however, a violation of DR5-104(A) was nevertheless established. Respondent had three alternatives when the Schenk proposal was first made. The safest and perhaps best course would have been to refuse to participate personally in the transaction. Alternatively, he could have recommended that Miller obtain independent advice. Finally, if Miller refused to seek independent advice or respondent did not recommend he do so, he could have made the least desirable choice. He could have attempted to meet the high standard of disclosure outlined in this opinion.

Having chosen to enter the transaction without recommending that Miller obtain independent advice, respondent was obliged to make full disclosure. Because the record does not show full disclosure was made before Miller consented to the transaction, a violation of DR5-104(A) has been established. This is true even though respondent did not act dishonestly or make a profit on the transaction.

In accordance with the Commission recommendation, we reprimand him for the violation.

Saladini v. Righellis, 426 Mass. 231 (1997)

Marshall, J.

The plaintiff, Lisa Saladini, appeals from the decision of a judge in the Superior Court dismissing her complaint, sua sponte, on the ground that a written agreement she had with the defendant, George P. Righellis, was champertous and unenforceable. Saladini had sought a declaratory judgment establishing her rights under the agreement. We granted Saladini’s application for direct appellate review to consider whether we should continue to enforce the doctrine. We rule that the common law doctrines of champerty, barratry, and maintenance no longer shall be recognized in Massachusetts. We reverse the judgment entered in the Superior Court and remand this case for further proceedings.

I

On September 23, 1992, Saladini and Righellis entered into a written agreement pursuant to which Saladini agreed to advance funds to Righellis to allow him to pursue potential legal claims he had arising out of his interest in real estate in Cambridge, known as Putnam Manor. In return, Righellis agreed that, if pursuit of his claims yielded any recovery, the first amount recovered would be used to reimburse Saladini, and that Saladini would, in addition, receive 50% of any net recovery remaining after payment of attorney’s fees. Saladini, herself, had no interest in Putnam Manor.

Saladini thereafter advanced funds to Righellis that he used to retain an attorney under a contingent fee agreement to bring a lawsuit and to pursue his legal claims. At some point Righellis became dissatisfied with that attorney’s representation and, with the concurrence of Saladini, hired a new lawyer, Robert Potters, to replace him. Righellis signed a new contingent fee agreement with Potters.

The original agreement between Saladini and Righellis did not anticipate retaining a second attorney to represent Righellis in the Putnam Manor lawsuit. Saladini maintains that to deal with this circumstance, she and Righellis agreed that each would pay one-half of the retainer required by Potters, each would pay one-half of the litigation disbursements, and that in all other respects the terms of their original agreement would remain in effect. No new or amended agreement was executed, but Saladini did pay one-half of the retainer to Potters and one-half of the litigation disbursements. All told, Saladini advanced a total of $19,229 to Righellis.

At some point Righellis settled the Putnam Manor lawsuit, with the defendants in that case agreeing to pay him $130,000. The first payment of $10,000 was paid on or about November 2, 1994, with the balance due on January 11, 1995. Neither Potters nor Righellis informed Saladini that a settlement had been reached, or that the first settlement funds had been received.

When Saladini became aware of the settlement, she filed suit, seeking to establish her rights under the agreement. She also sought, and a judge in the Superior Court granted, injunctive relief, enjoining Righellis and Potters from disbursing any of the settlement funds until her claims had been adjudicated.

In November, 1995, Righellis filed a motion for summary judgment that Saladini opposed. After reviewing the submissions of the parties, a judge in the Superior Court, sua sponte, invited both parties to submit memoranda on the issue whether the agreement between Saladini and Righellis was champertous. A hearing followed and, in September, 1996, another judge ruled that the agreement was champertous and unenforceable as against public policy. She ordered that Saladini’s complaint be dismissed in its entirety. A judgment to that effect was entered on September 24, 1996. Saladini appealed. A judge granted Saladini’s motion to continue the preliminary injunction pending her appeal.

II

Champerty has been described as the unlawful maintenance of a suit, where a person without an interest in it agrees to finance the suit, in whole or in part, in consideration for receiving a portion of the proceeds of the litigation. We described the doctrine as a “narrow and somewhat technical concept,” a type of maintenance that occurs when a person engages in “officious intermeddling in a suit that no way belongs to one, by maintaining or assisting either party with money or otherwise, to prosecute or defend it.”

The doctrine has a long and, in this country, checkered history. The ancient prohibition against champerty arose in feudal England. More recently the doctrine has been viewed as a check on frivolous or unnecessary litigation, or a mechanism to encourage the settlement of disputes without recourse to litigation. The extent to which courts, here, accepted the doctrine has varied. In some States, champerty was never adopted, or has been abandoned. In others, the doctrine was given narrow application. Massachusetts followed the common law prohibition against champerty, although we have never enforced the doctrine to the same extent as English courts.(n.4 in opinion) For example, we consistently have held that it is not unlawful “to engage in the business of buying choses in action and enforcing them by suit if necessary,” although under English common law assignments of choses in action are within the scope of champerty. We have not prohibited agreements otherwise champertous where the party has an independent interest in the suit. We also have recognized the validity of contingent fee arrangements with attorneys, which otherwise would be champertous.

Nevertheless, under our own development of the doctrine we have little doubt that the agreement between Saladini and Righellis would be champertous were we to continue to recognize the offense. We no longer are inclined to do so.

We have long abandoned the view that litigation is suspect, and have recognized that agreements to purchase an interest in an action may actually foster resolution of a dispute. In more recent cases we have questioned whether the doctrine continues to serve any useful purpose. In McInerney, we noted that “the decline of champerty, maintenance, and barratry as offences is symptomatic of a fundamental change in society’s view of litigation—from ‘a social ill, which, like other disputes and quarrels, should be minimized’ to ‘a socially useful way to resolve disputes.’” In Christian v. Mooney, we declined to consider whether an agreement between a “bounty hunter in troubled titles” and other plaintiffs in a suit was champertous because that issue was not contested by the parties to the agreement—even though that plaintiff’s repeated instigation of litigation regarding troubled real estate titles was the very conduct traditionally condemned as violative of the prohibition against champerty. Most recently, in Berman v. Linnane, we declined to strike down a contingent fee agreement that did not satisfy the requirements of S.J.C. Rule 3:05 as champertous, relying rather on “the public policy against the recovery of excessive fees” to limit the financial recovery by an attorney. We observed in that case that “at least as to lawyers, other principles fulfill whatever purpose champerty once had.” These decisions all reflect the change in our attitude toward the financing of litigation.

We also no longer are persuaded that the champerty doctrine is needed to protect against the evils once feared: speculation in lawsuits, the bringing of frivolous lawsuits, or financial overreaching by a party of superior bargaining position. There are now other devices that more effectively accomplish these ends. Our rule governing contingent fees between attorneys and clients is based on the principle that an attorney’s fee must be reasonable. We also recognize a public policy against the recovery of excessive fees. Additional devices include Mass. R. Civ. P. 11, providing sanctions for misconduct, and G. L. C. 231, § 6F, regulating the bringing of frivolous lawsuits. General Laws c. 93A, and the doctrines of unconscionability, duress, and good faith, establish standards of fair dealing between opposing parties. To the extent that we continue to have the concerns that the doctrine of champerty was thought to address, we conclude that it is better to do so directly, rather than attempting to mold an ancient doctrine to modern circumstances.(n.6 in opinion) The doctrine of champerty may also be unworkable or have harsh results. Rather than punishing the owner of the legal claim who has entered into a champertous agreement, the doctrine bestows on him a windfall. In this case, for example, Righellis would be permitted to retain the full benefit of the positive result achieved in the Putnam Manor lawsuit, while he would not have to honor his obligations to Saladini, the person whose support made pursuit of the lawsuit possible. A defendant sued in a champerty-supported litigation may not assert the champerty as a defense, but a court may refuse to enforce a champertous agreement even where the defense of champerty has not been asserted.

As Justice Holmes, then a member of this court, said a century ago: “It is revolting to have no better reason for a rule of law than that so it was laid down in the time of Henry IV. It is still more revolting if the grounds upon which it was laid down have vanished long since, and the rule simply persists from blind imitation of the past.”

Other States that no longer recognize the doctrine of champerty have continued to scrutinize an agreement to finance a lawsuit with care. We shall do likewise. This means that if an agreement to finance a lawsuit is challenged, we will consider whether the fees charged are excessive or whether any recovery by a prevailing party is vitiated because of some impermissible overreaching by the financier. Judges also retain their inherent power to disapprove an attorney’s fee that is unreasonable. We shall be guided in our analysis by a rule of what is fair and reasonable, looking to all of the circumstances at the time the arrangement is made to determine whether the agreement should be set aside or modified. In this case, for example, had the agreement been challenged, relevant factors might have included the respective bargaining position of the parties at the time the agreement was made, whether both parties were aware of the terms and consequences of the agreement, whether Righellis may have been unable to pursue the lawsuit at all without Saladini’s funds, and whether the claim by Righellis that he will receive but $35,000 of the total $130,000 settlement award if Saladini prevails is unreasonable in the circumstances. We observe that before the judge raised the issue, Righellis had never challenged the validity of his agreement with Saladini. The record before us does not permit any conclusion regarding the reasonableness of the agreement between Righellis and Saladini on the one hand, or Righellis and Potters on the other. We see no reason why Righellis should be the beneficiary of any windfall, or why any adjustment to the financing arrangement—if appropriate at all—should be made solely at Saladini’s expense. If pursued, those matters can be decided by the trial judge.

In re State Grand Jury Investigation, 983 A.2d 1097 (N.J. 2009)

Justice Rivera-Soto delivered the opinion of the Court.

Confronted with a grand jury inquiry that commanded the testimony of several of its employees, an employer elected to provide and pay for counsel to those employees for purposes of that investigation. Fearing that having individual employees/grand jury witnesses represented by counsel retained and compensated by the putative target of the grand jury inquiry violated several of the Rules of Professional Conduct, the State moved to disqualify those counsel. The trial court denied that application, limited the amount of information to be transmitted by such counsel to the employer, and, further, imposed restrictions both on the ability of the employer to discontinue paying the fees of counsel for the employees as well as on the ability of those counsel to discontinue representing the subpoenaed employees.

Regardless of the setting—whether administrative, criminal or civil, either as part of an investigation, during grand jury proceedings, or before, during and after trial—whether an attorney may be compensated for his services by someone other than his client is governed in large measure by RPC 1.8(f) and, to a lesser extent, RPC 1.7(a) and RPC 5.4(c). The overarching Rule, which purposely is written in the negative, forbids a lawyer from “accepting compensation for representing a client from one other than the client unless [three factors coalesce]: (1) the client gives informed consent; (2) there is no interference with the lawyer’s independence of professional judgment or with the lawyer-client relationship; and (3) information relating to representation of a client is protected” as provided in the RPCs. RPC 1.8(f). A straightforward application of RPCs 1.7(a), 1.8(f) and 5.4(c) requires that we affirm the order of the trial court.

I.

The operative facts on which this appeal arise are readily stated. The State commenced a grand jury investigation into whether a corporate contractor had submitted fraudulent invoices for services purportedly rendered to a county government. That inquiry focused primarily on the contractor and three of its employees. In response, the company arranged for counsel for its employees. The company entered into four separate retainer agreements with four separate lawyers, three of whom were assigned to represent, respectively, the three specific employees noted, and the fourth was retained to represent “all non-target current and former employees of [the company] in connection with the current state grand jury investigation.”

The retainer agreements with each of the four lawyers, however, shared common characteristics and were, in all substantive and material respects, indistinguishable. A typical retainer agreement provided (1) that the company “will be ultimately responsible to the law firm for all reasonable and necessary legal fees and expenses incurred in this matter[;]” (2) that the “undertaking by the company is made with the express understanding that the sole professional obligation of the law firm will be to [the named employee;]” (3) that the “law firm is not required to disclose any legal strategy, theory, plan of action, or the like, to the company;” (4) that “payment of legal fees by the company to the law firm in no way depends upon any such disclosure[;]” (5) that “no professional relationship will arise between the company and the law firm as a result of the rendering of legal services by [the law firm] or the payment of legal fees and expenses by the company;” (6) that “the reimbursement of legal fees and expense is neither conditioned upon nor dependent upon the law firm’s cooperation with the company or any other party;” (7) that while “detailed invoices will be provided to [the represented employee,] to preserve the attorney/client privilege, only summary invoices will be submitted to the company;” and (8) that the company would be responsible to pay those invoices “upon receipt.”

Based on the company’s retention of separate counsel for each of three employees identified by the State, the company wrote to each such employee, informing them that:

As you know, the New Jersey Attorney General’s office served [the company] with a Grand Jury subpoena seeking various billing and payroll records related to [the company]’s contract with [the specified county government]. The company has been fully cooperative with the State’s investigation.

Recently the Attorney General’s office has begun interviewing some of our employees at the identified project. Given your position with the company and involvement in this project, and based upon the advice of our attorneys in New Jersey, we believe it would be prudent to retain separate counsel to represent you personally in connection with the State’s investigation. Accordingly, [the company] has retained [a specially retained lawyer] to represent you in connection with the State’s investigation. You do not have to use [that specially retained lawyer] as your attorney. You are free to hire your own attorney, at your own costs.

You should not interpret this decision to mean that [the company] believes there to have been any illegal activity in this matter on the part of any company employee. Rather, it is based upon the recognition that your personal rights may conflict with the interests of the company. While [the company] agrees to pay for your legal representation in this matter, please understand that it has no obligation to do so and may stop paying those legal fees and costs at any time, should it believe it appropriate to do so.

[Your specially retained lawyer] may be reached at [____]. His firm address is: [_____].

Please expect [your specially retained lawyer] to contact you directly to arrange a convenient time to meet and discuss this matter. Please feel free to contact me directly or speak with [the company’s local counsel] if you have any questions regarding this matter.

Very truly yours,

/s/ Senior Vice President and General Counsel

The company also announced to all other employees that the company had retained a lawyer—free of charge to the employees—with whom those employees could consult and who was available to represent those employees in respect of the grand jury inquiry.

In time, two of the four lawyers retained by the company to represent its employees were subpoenaed to appear before the grand jury; they declined to appear, and the State later withdrew those subpoenas. The State then notified the company that it, along with several unnamed employees, had been designated as targets of the grand jury’s investigation, and later served grand jury subpoenas for the company’s records in respect of the retention of counsel for its employees. The company complied with that subpoena by producing responsive but non-privileged documents.

The State moved before the Superior Court to disqualify the counsel retained by the company to represent its employees “from further participation in this matter, pursuant to RPC 1.7, RPC 1.8 and RPC 1.10[.]” In response, each of the employees to whom the company had provided counsel to date—the three identified “target” employees and two additional “nontarget” employees—submitted certifications asserting that none of them could afford to retain separate counsel, and that each was satisfied with and wished to remain with their then counsel.

The trial court noted at the outset that it “view[ed the company’s] conduct as one that is certainly to be appreciated.” Addressing the caliber of the lawyers retained by the company for its employees, the trial court explained that “as a major corporation, [the company] didn’t go out and hire some low-level attorney. They went out and hired competent, knowledgeable, respected attorneys[.]” Focusing on the application of the Rules of Professional Conduct to the State’s motion for disqualification, the court first observed that RPC 1.5 “talks about fees being reasonable [and t]hat is not an issue before the Court.” Moving on to the application of RPC 1.6, which addresses the confidentiality of information between a lawyer and his client, the trial court remarked that the retained lawyers had provided certifications and sample redacted bills. Agreeing that the procedure employed was proper, the trial court emphasized that “the only thing that I would require going forward is that all of the bills sent to [the company] be redacted and that no specific information be detailed in the billing.”

Turning to RPC 1.7, the general conflict of interest rule, the trial court concluded that, “at least at this point, there’s been no demonstration that there is even a conflict and even if there were, these employees have the right to waive that conflict.” It also declared itself “satisfied that there has been informed consent given by all of the employees by way of what they have put in the certifications.” It concluded that

“the Court finds nothing improper about the attorneys that have been retained by [the company.] In fact, the Court would go further and say that [the company] acted responsibly, quite frankly, and with corporate policy and, quite frankly, having been advised of the reputation of these attorneys. And clearly the understanding between the company and these attorneys was spelled out in not only the retainer agreements, but in previous letters before all this was signed.”

It added, however, some restrictions: “that [the company] and the individual attorneys, prior to ending any relationship for payment, would have to make application to the Court[,]” and that counsel were to “redact the billings to cure any notion that the State may have that somehow the billings will reveal significant aspects of [the grand jury] investigation.”

The trial court entered an order that denied the State’s motion to disqualify counsel. More specifically, it

FURTHER ORDERED that before [the company] may cease paying any of the attorney’s legal fees and costs, [the company] shall provide notice to the Court and all parties, and the Court shall conduct a hearing on the issue of whether [the company] may cease paying such legal fees and costs; and

IT IS FURTHER ORDERED that before any of the attorneys may withdraw from this case based upon the refusal of [the company] to pay the attorney’s legal fees and costs, such attorney shall provide notice to the Court and all parties, and the Court shall conduct a hearing on the issue of the attorney’s request to withdraw; and

IT IS FURTHER ORDERED that the attorneys henceforth shall submit to [the company] legal bills either in summary form or with all detailed information redacted therefrom.

The State sought leave to appeal that determination and, in an unpublished order, the Appellate Division denied that application. It then moved before this Court, seeking leave to appeal the trial court’s order and other ancillary relief. We also granted leave to the Association of Criminal Defense Lawyers of New Jersey (ACDL-NJ) to appear as amicus curiae. For the reasons that follow, we affirm the order of the trial court.

II.

According to the State, a per se conflict of interest arises whenever, as here, two facts contemporaneously appear: a target in a grand jury investigation unilaterally selects and retains a lawyer to represent potential witnesses against it, and the lawyer relies on the target for payment of legal fees. In the State’s view, that arrangement will split the attorney’s loyalty and will discourage the lawyer from counseling the client to cooperate with the State, even when cooperation might be in the client’s best interest. It asserts that the perceived effect of allowing a target to select and pay for counsel for the witnesses against it is to irreparably taint the proceedings. The State also claims that such a conflict cannot be waived and that, even if it could be waived, a waiver could only be demonstrated through the live testimony of the witnesses, and not, as was done here, via certifications.

The lawyers whose disqualification is sought counter that RPC 1.8(f) clearly contemplates an employer designated as a grand jury “target” providing and paying for separate counsel for its employees during that grand jury inquiry. They reject the State’s claim that, in the criminal law setting, the better rule is the imposition of a per se conflict. Finally, they assert that, even if a potential conflict of interest exists, it has been effectively waived. Amicus ACDL-NJ repeats those arguments.

The company echoes the arguments advanced both by the lawyers whose disqualification is sought and by amicus, and further asserts that, under the laws of its place of incorporation, it has an obligation to provide counsel to its employees, noting that, absent counsel provided by and paid for by the company, most of its employees would be unable to afford a lawyer.

III.

A.

“Our evaluation of an actual or apparent conflict does not take place in a vacuum, but is, instead, highly fact specific.” “In that respect, the Court’s attention is directed to something more than a fanciful possibility.” “To warrant disqualification in this setting, the asserted conflict must have some reasonable basis.”

The State asserts that a target of a grand jury inquiry providing and paying for the lawyers who will represent the target’s employees before the very grand jury considering the target’s culpability creates an insoluble conflict not subject to waiver. Although the State’s arguments possess considerable initial appeal, in light of modern changes in the manner in which attorney-client relationships are to be viewed, we are constrained to disagree.

No doubt, it long has been the law of this State that it is “improper for [the attorney for an employee] to have accepted the organization’s promise to pay his bill, for such an arrangement has the inherent risk of dividing an attorney’s loyalty between [his client] and [his client’s] employer who will pay for the services.” In those instances, we have concluded that “a conflict of interest inheres in every such situation[,]” one that cannot be waived “when the subject matter is crime and when the public interest in the disclosure of criminal activities might thereby be hindered.” Reasoning that “an attorney must realize that the employer who agrees to pay him is motivated by the expectation that he will be protected[,]” we have concluded that

it is inherently wrong to represent both the employer and the employee if the employee’s interest may, and the public interest will, be advanced by the employee’s disclosure of his employer’s criminal conduct. For the same reasons, it is also inherently wrong for an attorney who represents only the employee to accept a promise to pay from one whose criminal liability may turn on the employee’s testimony.

B.

That said, effective September 10, 1984, New Jersey replaced its then extant Canons of Professional Ethics and Disciplinary Rules with the more modern Rules of Professional Conduct. Among these was RPC 1.8(f), which then provided that

a lawyer shall not accept compensation for representing a client from one other than the client unless: (1) the client consents after consultation; (2) there is no interference with the lawyer’s independence of professional judgment or with the lawyer-client relationship and (3) information relating to representation of a client is protected as required by RPC 1.6.

Thereafter, starting in 2001 and continuing for almost two years, New Jersey engaged in a “review of the existing Rules of Professional Conduct in light of the work of the American Bar Association’s Commission on Evaluation of the Rules of Professional Conduct (the”Ethics 2000 Commission”).” This process culminated in yet another round of modifications to the Rules of Professional Conduct. In respect of RPC 1.8(f), however, only minor changes were made; it now provides in full as follows:

A lawyer shall not accept compensation for representing a client from one other than the client unless:

(1) the client gives informed consent;

(2) there is no interference with the lawyer’s independence of professional judgment or with the lawyer-client relationship; and

(3) information relating to representation of a client is protected as required by RPC 1.6.

C.

However, RPC 1.8(f) does not exist in a vacuum: two other RPCs directly touch on the question presented. First, RPC 1.7(a) forbids a lawyer from representing a client “if the representation involves a concurrent conflict of interest.” That RPC recognizes “a concurrent conflict of interest if: there is a significant risk that the representation of one or more clients will be materially limited by the lawyer’s responsibilities to a third person or by a personal interest of the lawyer.” RPC 1.7(a)(2). Second, RPC 5.4(c) provides that “a lawyer shall not permit a person who recommends, employs, or pays the lawyer to render legal services for another to direct or regulate the lawyer’s professional judgment in rendering such legal services.”

Our task, then, is to harmonize RPC’s 1.7(a)(2), 1.8(f) and 5.4(c) seemingly overlapping mandates so as to give proper guidance on whether, and under what circumstances, a lawyer may represent a client when the fees and costs incurred are being paid by another.

D.

The starting point for analysis must be the RPC that most specifically addresses the question of when a lawyer can represent a client while being paid by another: RPC 1.8(f). That RPC makes clear that three factors must coalesce in order to allow a lawyer paid by a third party to represent a client: the client must give informed consent; the lawyer’s independent professional judgment and the lawyer-client relationship must be maintained sacrosanct; and no improper disclosures relating or referring to the representation can be made. However, the considerations that animate RPC 1.7(a)(2)—that there be no concurrent conflict of interest—and RPC 5.4(c)—that no third party may influence the lawyer’s professional judgment— also are relevant and must be addressed.

A synthesis of RPCs 1.7(a)(2), 1.8(f) and 5.4(c) yields a salutary, yet practical principle: a lawyer may represent a client but accept payment, directly or indirectly, from a third party provided each of the six conditions is satisfied. Those conditions are:

(1) The informed consent of the client is secured. In this regard, “‘informed consent’ is defined as the agreement by a person to a proposed course of conduct after the lawyer has communicated adequate information and explanation about the material risks of and reasonably available alternatives to the proposed course of conduct.”

(2) The third-party payer is prohibited from, in any way, directing, regulating or interfering with the lawyer’s professional judgment in representing his client.

(3) There cannot be any current attorney-client relationship between the lawyer and the third-party payer.

(4) The lawyer is prohibited from communicating with the third-party payer concerning the substance of the representation of his client. RPC 1.8(f)(3). The breadth of this prohibition includes, but is not limited to, the careful and conscientious redaction of all detail from any billings submitted to the third-party payer.

(5) The third-party payer shall process and pay all such invoices within the regular course of its business, consistent with manner, speed and frequency it pays its own counsel.

(6) Once a third-party payer commits to pay for the representation of another, the third-party payer shall not be relieved of its continuing obligations to pay without leave of court brought on prior written notice to the lawyer and the client. In such an application, the third-party payer shall bear the burden of proving that its obligation to continue to pay for the representation should cease; the fact that the lawyer and the client have elected to pursue a course of conduct deemed in the client’s best interests but disadvantageous to the third-party payer shall not be sufficient reason to discontinue the third-party payer’s continuing obligation of payment. If a third-party payer fails to pay an employee’s legal fees and expenses when due, the employee shall have the right, via a summary action, for an order to show cause why the third-party payer should not be ordered to pay those fees and expenses.

E.

We now apply this principle, and its conditions, to the case on appeal.

Informed consent. Each of the letters from the company to the individual employees provided that the employee “did not have to use [the assigned counsel] as your attorney. You are free to hire your own attorney, at your own costs.” As conceded by counsel for the company during oral argument, that “take-it-or-leave-it” approach, on its face, does not satisfy the requirement that the employee’s acceptance of counsel be based on informed consent. Therefore, presumptively, the retention of counsel here does not comply with RPC 1.8(f)(1). However, as acknowledged by the trial court, each of the employees certified that he was satisfied with the assigned counsel and wished to remain as that counsel’s client. Therefore, we conclude that the arrangement approved by the trial court below is satisfactory, albeit with the caveat that, in the future, no such limitations on the choice of counsel should be communicated or imposed on the employee/client save for reasonable limitations on fees and expenses.

Interference with the lawyer’s professional judgment. As clearly set forth in the separate retention letters between the lawyers and the company, each of the lawyers explained that “the sole professional obligation of the law firm will be to [the assigned client].” For the avoidance of future doubt, such retention letters should clearly and conspicuously note that nothing in the representation shall limit the lawyer’s responsibilities to the client, as provided in RPC 1.8(f)(2), and that the third-party payer shall not, in any way, seek to “direct or regulate the lawyer’s professional judgment in rendering such legal services.” RPC 5.4(c).

Current representation. The record is clear that none of the lawyers selected to represent the individual employees had any current relationship with the company, and that “no professional relationship will arise between the company and the law firm as a result of the rendering of legal services by [the assigned lawyer] or the payment of legal fees and expenses by the company.” Those facts, standing alone, constitute a sufficient showing in favor of permitting this representation. Again, as an aid in future matters, the retention letters should clearly spell out that the lawyer does not have a professional relationship with the third-party payer.

Prohibited communications. Each of the retention letters made clear that the lawyer “is not required to disclose any legal strategy, theory, plan of action, or the like, to the company and payment of legal fees by the company to the law firm in no way depends upon any such disclosure.” In this respect, the better practice is to affirmatively state that the lawyer will not disclose any part of the substance of the representation of the client to the third-party payer. Consistent with that representation, all billings from the lawyer to the third-party payer must have any detail information redacted, simply stating the sum due for services rendered and the sum due for expenses incurred. Because these latter conditions were imposed by the trial court, the retention letters, as modified by the trial court, clearly comply with the requirements we have imposed.

Prompt and continued payment. Once an employer commits to paying the legal fees and expenses of its employees, it scrupulously must honor that commitment. Also, if the employer wishes to discontinue paying the legal fees and expenses of one or more of its employees, it may only do so by leave of court granted. Because this condition also was imposed by the trial court and was agreed to by all parties, the arrangements at issue are satisfactory.

In sum, through the combined product of the good faith of an employer, the diligence of competent counsel and the exercise of a trial court’s supervisory authority, the net result of the company’s retention and payment of counsel for its employees complies with the Rules of Professional Conduct. For these reasons, the trial court properly denied the State’s motion to disqualify counsel.

Negotiating Private Employment with Opposing Counsel, 2016 Formal Ethics Op. 3 (N.C. State Bar Jan. 27, 2017)

Opinion rules that a lawyer may not negotiate for employment with another firm if the firm represents a party adverse to the lawyer’s client unless both clients give informed consent.

Note: This opinion is limited to the explanation of the professional responsibilities of a lawyer moving from one place of private employment to another. Rule 1.11(d)(2)(B) governs the conduct of a government lawyer seeking private employment.

Inquiry:

May a lawyer negotiate for employment with a law firm that represents a party on the opposite side of a matter in which the lawyer is also representing a party?

Opinion:

Yes, with client consent.

A lawyer shall not represent a client if the representation of a client may be materially limited by a personal interest of the lawyer unless the lawyer reasonably believes that he can provide competent and diligent representation to the affected client and the client gives informed consent, confirmed in writing. Rule 1.7(b)(2). As observed in Rule 1.7, cmt. 10, when a lawyer has discussions concerning possible employment with an opponent of the lawyer’s client, or with a law firm representing the opponent, such discussions could materially limit the lawyer’s representation of the client.

On the same issue, ABA Formal Ethics Op. 96-400 (1996) advises that there are two overriding factors affecting the “likelihood that a conflict will eventuate” and “materially interfere with the lawyer’s independent professional judgment in considering alternatives or foreclosing courses of action”: the nature of the lawyer’s role in the representation of the client; and the extent to which the lawyer’s interest in the firm is concrete, and has been communicated and reciprocated. The ABA opinion states:

the likelihood that a lawyer’s job search will adversely affect his “judgment in considering alternatives or foreclosing courses of action” is far greater when the lawyer has an active and material role in representing a client. Thus, if the posture of the case is such that there is no call on the lawyer’s judgment in representing a client during the period of his job search, it is not likely that his search and negotiations will adversely affect his judgment. Furthermore, if a lawyer’s interest in another firm, or its interest in him, is not reciprocated, it seems unlikely, in most cases, that such unreciprocated interest will have a material effect on a lawyer’s judgment in a matter between them.

While the exact point at which a lawyer’s own interest may materially limit his representation of a client may vary, the committee believes that clients, lawyers, and their firms are all best served by a rule that requires consultation and consent at the earliest point that a client’s interests could be prejudiced.

The ABA opinion concludes that a lawyer who is interested in negotiating employment with a firm representing a client’s adversary must obtain the client’s consent before engaging in substantive discussions(n.1 in opinion) A substantive discussion entails a communication between the job-seeking lawyer and the hiring law firm about the job-seeking lawyer’s skills, experience, and the ability to bring clients to the firm; and the terms of association. ABA Formal Ethics Op. 96-400 (1996). Thus there is a two-prong test for “substantive discussions.” There must be (1) a discussion/negotiation that is (2) substantive. Sending a resume blind to a potential employer is not a “discussion.” Speaking generally with a colleague at a social event about employment opportunities is not “substantive.”

with the firm or the lawyer must withdraw from the representation.

The Restatement (Third) of the Law Governing Lawyers advises that once the discussion of employment has become concrete and the interest is mutual, the lawyer must promptly inform the client; without effective client consent, the lawyer must terminate all discussions concerning the employment, or withdraw from representing the client. Restatement (Third) of the Law Governing Lawyers: A Lawyer’s Personal Interest Affecting the Representation of a Client, §125, cmt. d (2000). See also Kentucky Ethics Op. E-399 (1998) (lawyer may not negotiate for employment with another firm where firms represent adverse parties and lawyer is involved in the client’s matter or has actual knowledge of protected client information, unless the client consents to negotiation).

We agree: a job-seeking lawyer who is representing a client, or has confidential information about the client’s matter, may not engage in substantive negotiations for employment with the opposing law firm without the client’s informed consent.

To obtain the client’s informed consent, the job-seeking lawyer must explain to the client the current posture of the case, including what, if any, additional legal work is required, and whether another firm lawyer is available to take over the representation should the lawyer seek to withdraw. If the client declines to consent, the job-seeking lawyer must either cease the employment negotiations until the client’s matter is resolved or withdraw from the representation but only if the withdrawal can be accomplished without material adverse effect on the interests of the client. Rule 1.16(b)(1). Because personal conflicts of interests are not imputed to other lawyers in the firm, another lawyer in the firm may continue to represent the client. Rule 1.10(a).

Similarly, the hiring law firm must not engage in substantive employment negotiations with opposing counsel unless its own client consents. If the client does not consent, the firm must cease the employment negotiations or withdraw from the representation. The firm may only withdraw if the withdrawal can be accomplished without material adverse effect on the interests of the client. Rule 1.16(b) (1).

Model Rules of Professional Conduct, Rule 1.8

Disciplinary Counsel v. Sarver, 119 N.E.3d 405 (Ohio 2018)

Kennedy, J.

Respondent, Jason Allan Sarver, of Rockbridge, Ohio, Attorney Registration No. 0082073, was admitted to the practice of law in Ohio in 2007.

In a formal complaint certified to the Board of Professional Conduct on April 6, 2017, relator, disciplinary counsel, charged Sarver with four ethical violations arising from his sexual relationship with a client. Initially, the parties entered into an agreement for discipline by consent and stipulated to a two-year suspension, with the entire suspension stayed on just one condition—that Sarver not engage in any further misconduct. The board accepted the consent-to-discipline agreement and the stipulated sanction and recommended that we do so also. However, we rejected that sanction and remanded the matter for additional proceedings. 150 Ohio St.3d 1439, 2017-Ohio-7742, 82 N.E.3d 1173. Subsequently, at a hearing before a panel of the board, the parties presented stipulations of fact, misconduct, and aggravating and mitigating factors, submitted 28 joint exhibits, and recommended that Sarver be suspended from the practice of law for two years, with the entire suspension stayed on multiple conditions.

The panel adopted the parties’ stipulations and recommended sanction, and the board again adopted the panel’s report in its entirety, and no objections have been filed. Although we agree with the finding that Sarver committed professional misconduct, we reject the board’s recommended sanction and conclude that Sarver’s misconduct warrants a suspension from the practice of law for two years, with the last 18 months of the suspension stayed on the conditions recommended by the board.

Misconduct

Sarver and J.B. met each other in 2012 when Sarver represented J.B.’s then boyfriend in a legal matter. On September 11, 2015, J.B. reached out to Sarver when she needed “a good attorney for felony … some stupid shit happened and I really need to talk to u its not good.” The next day, Sarver and J.B. met at a Columbus restaurant, discussed J.B.’s criminal case over drinks, and then had sex in Sarver’s vehicle in the parking lot.

J.B. was charged with theft in the Hocking County Municipal Court and a warrant was issued for her arrest. According to Sarver, he was unaware that a warrant had been issued when he subsequently instructed her to turn off the Global Positioning System (“GPS”) on her mobile phone so that law enforcement could not track her. Several days later, a grand jury indicted J.B. for multiple felonies, and due to Sarver’s advice to turn off the GPS on her mobile phone, she avoided arrest for almost one month before being apprehended.

The judge presiding over J.B.’s arraignment appointed Sarver to represent her, and Sarver, now representing an indigent client as court-appointed counsel, engaged in sexual activity with her at least seven more times over the next four months. They also trespassed onto Sarver’s neighbor’s property to use a hot tub.

In the meantime, Sarver filed a petition to run for Hocking County Prosecuting Attorney. And although rumors of his sexual relationship with J.B. soon spread, Sarver falsely denied the rumors to the judge presiding over J.B.’s criminal case on two separate occasions. Around the same time that Sarver had lied about his inappropriate relationship with J.B. to the judge, the Hocking County Sheriff’s Office began investigating Sarver. Detectives interviewed J.B. and promised her a reduced sentence if she disclosed the true nature of her relationship with Sarver. J.B. agreed to cooperate with the investigation, and during her interview with detectives, she stated that Sarver had “insinuated” that he would help J.B. with her “warrants and cases for sexual favors.” She told the detectives that she had “problems saying no to something like that * * *. You feel kinda forced into it. * * * And, you know, of course, I had something over my head, I was facing 7 felonies.”

The state, through a special prosecutor, charged Sarver with several offenses, including two counts of sexual battery in violation of R.C. 2907.03(A)(1), which prohibits knowingly coercing another to engage in sexual conduct. However, the sexual-battery counts were dismissed as part of an agreement under which Sarver pleaded guilty to three misdemeanor counts of criminal trespassing (based on Sarver’s unauthorized use of his neighbor’s hot tub) and one misdemeanor count of obstructing official business (based on his advice to J.B. to turn off her phone’s GPS while there was an outstanding warrant for her arrest). Additionally, as part of the plea agreement, Sarver had to withdraw his candidacy for county prosecuting attorney and the special prosecutor dismissed the remaining counts of the indictment. The court sentenced Sarver to two years of community control and fined him $1,250.

After we rejected the board’s original recommendation to accept the parties’ consent-to-discipline agreement and remanded the cause to the board for further proceedings, a hearing was held before a panel, the parties presented stipulations of fact, misconduct, and aggravating and mitigating factors, and they recommended that Sarver be suspended from the practice of law for two years, with the entire suspension stayed on multiple conditions.

The panel adopted the parties’ stipulations and recommended sanction. The board adopted the panel’s report in its entirety and found that Sarver’s conduct violated Prof.Cond.R. 1.8(j) (prohibiting a lawyer from soliciting or engaging in sexual activity with a client unless a consensual sexual relationship between them existed prior to the client-lawyer relationship), 8.4(b) (prohibiting a lawyer from committing an illegal act that adversely reflects on the lawyer’s honesty or trustworthiness), 8.4(c) (prohibiting a lawyer from engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation), and 8.4(d) (prohibiting a lawyer from engaging in conduct that is prejudicial to the administration of justice).

Sanction

When imposing sanctions for attorney misconduct, we consider all relevant factors, including the ethical duties that the lawyer violated, the aggravating and mitigating factors listed in Gov.Bar R. V(13), and the sanctions imposed in similar cases.

The parties stipulated and the board found the presence of two aggravating factors—that Sarver acted with a dishonest and selfish motive and committed multiple offenses. See Gov.Bar R. V(13)(B)(2) and (4).

Stipulated mitigating factors found by the board include the absence of prior discipline, Sarver’s full and free disclosure to the board and cooperative attitude toward the disciplinary proceedings, and other penalties and sanctions incurred for his misconduct. See Gov.Bar R. V(13)(C)(1), (4), and (6). The parties stipulated and the board found that Sarver had submitted letters attesting to his good character and reputation, and the judge who had presided over J.B.’s criminal case also submitted a letter expressing his agreement with the proposed sanction. See Gov.Bar R. V(13)(C)(5). In addition, the board noted that Sarver had successfully completed court-ordered counseling and made a good-faith effort to address the issues underlying his misconduct by entering into a contract with the Ohio Lawyers Assistance Program (“OLAP”) and attending additional counseling with his spouse.

In considering the appropriate sanction for Sarver’s misconduct, the board emphasized that “compelling” mitigating factors in this case warranted a two-year suspension, with the entire suspension stayed on conditions:

(1) not only was there no harm to the client but the client leveraged her relationship with Sarver to get a better plea deal by agreeing to testify against him; (2) he received a very public reprimand of sorts from the local media because his arrest and indictment, while he was a candidate for prosecutor, were front-page news; (3) he was over-indicted with 14 felonies and four misdemeanors including bribery and sexual battery charges; (4) he was arrested twice and spent two nights in jail; and (5) he was forced to withdraw his candidacy for county prosecutor.

The board explained that “what makes these factors so significant is that they all stem from Sarver’s consensual sexual relationship with his client.”

We agree that Sarver’s conduct violated Prof.Cond.R. 1.8(j), 8.4(b), 8.4(c), and 8.4(d). However, we disagree that a two-year suspension, with the entire suspension stayed on the conditions recommended by the board, is the appropriate sanction for that misconduct.

Prof.Cond.R. 1.8(j) prohibits a lawyer from soliciting or engaging in sexual activity with a client unless a consensual sexual relationship between them predated the client-lawyer relationship. In the absence of a preexisting, consensual sexual relationship, seeking or having sex with a client is a per se violation. The fact that a client appears to have consented does not mitigate the attorney’s misconduct or provide a defense against a violation. Indeed, Comment 17 to Prof.Cond.R. 1.8(j) explains that “this rule prohibits the lawyer from engaging in sexual activity with a client regardless of whether the relationship is consensual and regardless of the absence of prejudice to the client, unless the sexual relationship predates the client-lawyer relationship.” (Emphasis added.) Compare Prof.Cond.R. 1.7 (allowing client to consent to representation of another client that will be directly adverse to the client in certain circumstances); Prof. Cond.R. 1.8(a) (allowing client to consent to an attorney’s transacting business with the client when certain conditions are met). And Gov.Bar R. V(13)(C) does not identify the client’s consent as a mitigating factor that may be considered in favor of a less severe sanction.

We have admonished lawyers and sanctioned them with an actual suspension from the practice of law for engaging in sexual conduct with clients with whom they had no sexual relationship prior to the representation. “Most disturbing are cases in which a lawyer has had sex with a client while defending the client against criminal charges * * * or has accepted sex in lieu of fees.”

In Disciplinary Counsel v. Booher, Booher had been appointed to represent a female client who was facing felony charges. When Booher met with his client to discuss a possible prison sentence in a jail meeting room, they engaged in sexual activity. The client reported the incident to the judge presiding over her case, resulting in disciplinary action against Booher. The board recommended a one-year suspension of Booher’s license, with the entire suspension stayed on conditions. We concluded, however, that a more severe sanction was warranted, explaining:

The case before us involves court-appointed counsel for a criminal defendant. The lawyer-client relation in a criminal matter is inherently unequal. The client’s reliance on the ability of her counsel in a crisis situation has the effect of putting the lawyer in a position of dominance and the client in a position of dependence and vulnerability. The more vulnerable the client, the heavier is the obligation upon the attorney not to exploit the situation for his own advantage. Whether a client consents to or initiates sexual activity with the lawyer, the burden is on the lawyer to ensure that all attorney-client dealings remain on a professional level.

We also noted that because the client was incarcerated, Booher had abused his status as an officer of the court by meeting with the client and engaging in sexual activity with her in the jail. We therefore imposed a one-year actual suspension.

In Disciplinary Counsel v. Freeman, Freeman paid his 18-year-old female client—who was facing serious criminal charges—$150 to pose for nude photographs. And after the attorney-client relationship had ended, Freeman offered his underage client alcohol and solicited her to perform sex acts in exchange for specific monetary amounts. Citing Booher, this court explained that “we have denounced the patent impropriety of similar misconduct before.” And given the reprehensible nature of Freeman’s conduct and our obligation to protect the public, we suspended his license to practice law for an actual six-month term.

In Krieger, we explained that an assistant public defender “took advantage of the ‘inherently unequal’ balance of power between a criminal defense lawyer and his or her client” when Krieger had a sexual relationship with—and provided financial assistance to—a male client whom she had previously represented as a juvenile and continued to represent in other legal matters. The attorney had also lied about the relationship to her employer, the public defender, and impeded the public defender in providing competent and objective representation to this indigent defendant, eventually causing the public defender to refuse to provide him with future legal representation. We suspended Krieger from the practice of law for two years, with one year of the suspension stayed on conditions.

In Akron Bar Assn. v. Williams, the attorney represented a female client in a domestic-relations proceeding and defended her against charges for driving under the influence and driving with a suspended license. During this time, the client “was in danger of losing custody of her children, had little, if any, money to pay for legal assistance, was struggling with drug use, and was in counseling for having attempted suicide.” Nonetheless, Williams began a sexual relationship with the client with an understanding that she would not be charged for his legal services. After the client filed a grievance, Williams lied in a deposition under oath when he denied that he was having a sexual relationship with her. Noting the “egregious” misconduct in which the attorney “took advantage of a vulnerable client and lied under oath to hide his misdeeds,” we suspended Williams’s law license for two years, with the last 18 months of the suspension stayed on conditions.

These cases all involved attorneys who took advantage of the attorney-client relationship and their clients’ vulnerable circumstances for the attorneys’ own sexual gratification. And in each case, we determined that an actual suspension was the appropriate sanction for their misconduct.

In this case, however, the board concluded that “compelling mitigating factors” supported adopting the parties’ recommendation of a two-year suspension, with the entire suspension stayed on conditions. It noted that “not only was there no harm to the client but the client leveraged her relationship with Sarver to get a better plea deal by agreeing to testify against him.” The board also explained that other negative consequences that Sarver experienced—a public shaming “of sorts” from the local media, his being “over-indicted with 14 felonies and four misdemeanors,” his two arrests and the two nights that he spent in jail, and his being forced to withdraw his candidacy for county prosecutor—were “significant” because “they all stemmed from Sarver’s consensual sexual relationship with his client.”

However, the board’s finding that there was a consensual relationship seems oblivious to the facts that (1) J.B. was an indigent criminal defendant, (2) Sarver was her court-appointed, criminal-defense attorney, (3) “the lawyer-client relation in a criminal matter is inherently unequal,” and (4) “the client’s reliance on the ability of her counsel in a crisis situation has the effect of putting the lawyer in a position of dominance and the client in a position of dependence and vulnerability,” This power imbalance “‘enables the lawyer to dominate and take unfair advantage’” of the client.

Reported cases are filled with clients who have said that they submitted to their attorney’s sexual advances out of fear that refusing to submit would affect the quality of their representation at a time of vulnerability and dependence on the attorney.

Here, Sarver met an indigent client “for drinks” and to discuss a serious criminal matter. At the end of the meeting, Sarver proceeded to have sex with her in his parked car, which the client described as a “favor” for his legal services. Then, after the client had been found indigent and Sarver had been appointed by the court to represent her, Sarver continued to engage in sexual activity with J.B. while she remained vulnerable and dependent on him as he defended her against serious criminal charges.

Yet, although J.B. told detectives that she believed Sarver was helping her in exchange for sexual favors and that she had submitted to his sexual advances because of her legal jeopardy—and notwithstanding relator’s statement at the hearing that J.B. still contended that the sexual activity with Sarver was not consensual— the board never heard directly from her before making conclusions about the nature of her relationship with Sarver. Instead, the board essentially blamed the victim, J.B., for the negative consequences that Sarver experienced resulting from his own decision to engage in sexual relations with a vulnerable client whom he had been appointed to represent in a criminal case.

And then, ignoring all the indications that Sarver exploited the attorney-client relationship to obtain “sexual favors,” the board concluded that the client was all the better for it, because she “leveraged her relationship with Sarver to get a better plea deal.” The mere fact that the client’s criminal case was not prejudiced does not mean that she suffered no harm from Sarver’s misconduct. As the Supreme Court of Colorado has explained, “a sexual relationship between lawyer and client during the course of the professional relationship is inherently and insidiously harmful.” The client may be psychologically and emotionally harmed by an exploitative sexual relationship regardless of the outcome of the legal case.

The abuse of the attorney-client relationship not only harms the dignity of the client, whose body and trust in her lawyer have been violated, but it also impugns the legal system as a whole. J.B., an indigent criminal defendant, turned to the court and the legal profession to protect her freedom and right to due process, only to be exploited for Sarver’s sexual gratification.

It is for all these reasons that Ohio has adopted a per se prohibition against an attorney’s having a sexual relationship with a client when such a relationship did not exist before the attorney-client relationship was formed, and the professional-conduct rules do not indicate that a lesser sanction should be imposed on the attorney when the relationship “appears” to be consensual or when the client’s case does not seem to have been prejudiced. And in keeping with the aspiration expressed in A Lawyer’s Creed “to make the law and our legal system available to all,” courts have the obligation to ensure that the lawyers appointed to represent indigent criminal defendants “offer loyalty, confidentiality, competence, diligence and their best judgment” and abide by their professional duty not to initiate a sexual relationship with a vulnerable client whose liberty and right to due process are at stake. Failing to impose an actual suspension on a court-appointed, criminal-defense attorney who has violated Prof.Cond.R. 1.8(j) by having sex with his indigent client would contravene our obligation to protect the public.

The board’s finding that J.B. freely engaged in a relationship with Sarver ignores the power imbalance between an indigent client and court-appointed defense counsel, and its finding that J.B. had not been prejudiced discounts the inherent harm that results when an attorney abuses the attorney-client relationship in pursuit of the attorney’s own sexual gratification. For all of these reasons, Sarver’s misconduct of engaging in a sexual relationship with a client in a criminal case—during which he also obstructed official business, committed trespass, and lied about the relationship to a judge—warrants an actual suspension of his law license.

Accordingly, Jason Allan Sarver is suspended from the practice of law in Ohio for two years, with 18 months of the suspension stayed on the conditions that he (1) comply with his December 12, 2017 OLAP contract, (2) take the Multistate Professional Responsibility Exam and receive a passing score, (3) in addition to the requirements of Gov.Bar R. X, complete 12 hours of continuing legal education focused on professional ethics or attorney-client relationships, (4) serve a two-year period of monitored probation in accordance with Gov.Bar R. V(21), and (5) engage in no further misconduct. If Sarver fails to comply with any condition of the stay, the stay will be lifted and he will serve the full two-year suspension.

Fischer, J., concurs in part and dissents in part, with an opinion joined by O’Connor, C.J., and DeGenaro, J.

The sanction recommended by the Board of Professional Conduct, with the inclusion of conditions such as probation, is much improved from the previous discipline-by-consent agreement submitted to this court. I agree with the majority’s position, however, that a two-year suspension, with the entire suspension stayed on the conditions recommended by the board, is an unsuitable sanction in this case. Although I agree with much of the majority’s analysis, I believe that given the circumstances of this case, a longer actual suspension of respondent Jason Allan Sarver’s Ohio law license is warranted and is necessary to protect the public. Specifically, I find that a two-year suspension, with one year stayed on the conditions recommended by the board, would be a more appropriate sanction in this case. Therefore, I respectfully concur in part and dissent in part.

A. An Actual Suspension of One Year is Warranted

I wholeheartedly agree with the majority that the board was incorrect to conclude that because Sarver’s client, J.B., was not prejudiced in her criminal case, she was not harmed by Sarver’s misconduct. And I further agree with the board and the majority that Sarver acted selfishly and with a dishonest motive.

But I believe that Sarver’s actions necessitate a longer actual suspension of his law license. Here, Sarver violated four professional-conduct rules stemming from his sexual relationship with his indigent female client, J.B.: Prof. Cond.R. 1.8(j), by engaging in sexual activity with a client; Prof.Cond.R. 8.4(b), by committing an illegal act that reflects adversely on the lawyer’s honesty or trustworthiness; Prof.Cond.R. 8.4(c), by engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation; and Prof.Cond.R. 8.4(d), by engaging in conduct that is prejudicial to the administration of justice.

Generally, for many of these rule violations, including Prof.Cond.R. 1.8(j), whether an actual suspension is imposed depends on the facts of each case. However, when the violation of Prof.Cond.R. 1.8(j) involves an attorney and an indigent client, an actual suspension of an attorney’s law license is warranted.

We have also held that when an attorney engages in a course of conduct involving dishonesty, fraud, deceit, or misrepresentation, the attorney will serve an actual suspension from the practice of law. While we have tempered that sanction in cases presenting an isolated incident in an otherwise unblemished career, this is not such a case. Sarver made a series of poor decisions over the course of at least six months stemming from his selfish motives to engage in a sexual relationship with his indigent client.

The majority correctly emphasizes that the consensual nature of the sexual relationship between Sarver and J.B. does not excuse or provide a defense for Sarver’s misconduct. But even if consent were a mitigating factor, given the imbalance of power inherent in an attorney-client relationship, I question whether J.B.—who was heavily dependent on Sarver for help with navigating the criminal-justice system and maintaining her liberty —could have given adequate informed consent.

Furthermore, “whether a client consents to or initiates sexual activity with the lawyer, the burden is on the lawyer to ensure that all attorney-client dealings remain on a professional level.” Here, it is apparent that Sarver did not meet his burden to maintain a professional relationship with J.B. Sarver immediately acted on J.B.’s request for help with her criminal case by contacting an assistant prosecuting attorney. The following day, Sarver met J.B. for drinks where they discussed her case and then proceeded to have sex in Sarver’s vehicle. Sarver continued his sexual relationship with J.B., which included trespassing on the property of Sarver’s neighbor to use the neighbor’s hot tub. Sarver acted dishonestly and selfishly, and he continuously and repeatedly failed to maintain professionalism in his interactions with J.B.

Perhaps the most disturbing behavior demonstrated by Sarver during this six-month period occurred when Sarver deceived the court at least three times. After establishing the attorney-client relationship with J.B., Sarver began a sexual relationship with her and then sought appointment by the court to serve as J.B.’s court-appointed, criminal-defense attorney. A court, in making appointments, must take into account “the avoidance of conflicts of interest or other situations that may potentially delay timely completion of the case,” and “intangible factors, including the court’s view of a potential appointee’s commitment to providing timely, cost-effective, quality representation to each prospective client”. By seeking to be appointed to J.B.’s case and failing to disclose his relationship, Sarver misled the court as to his ability to adequately represent J.B. as her court-appointed, criminal-defense attorney. Making matters worse, Sarver continued his sexual relationship with J.B. after being appointed by the court and twice lied about the relationship to a caring judge when the judge expressed concern about the situation.

While there are some mitigating factors in Sarver’s favor, such as his lack of a disciplinary record, his cooperation with the board, and his character references, the mitigating factors do not outweigh Sarver’s abhorrent behavior, boorish selfishness, and complete disregard for the legal profession. Sarver engaged in a sexual relationship with his indigent client who was facing serious felony charges, advised his client on how to evade authorities, and then misled and explicitly lied to the court about that relationship. As the majority correctly emphasizes, the most disturbing attorney-disciplinary cases are those in which a lawyer engages in sexual activity with a client while defending the client against criminal charges. Given the facts of this case, I believe that this court should suspend Sarver from the practice of law in Ohio for two years, with one year of the suspension stayed on the conditions recommended by the board.

B. The Additional Conditions Will Help Ensure Protection of the Public

While I believe that an actual one-year suspension of Sarver’s law license is necessary to protect the public, I also believe that the board’s newly recommended conditions will help to further protect the public.

Originally, the board had accepted a discipline-by-consent agreement whereby disciplinary counsel and Sarver stipulated to a two-year suspension, fully stayed on just one condition—that Sarver not engage in further misconduct during those two years. This court specifically rejected that recommended sanction and remanded the cause to the hardworking members of the board for further proceedings. I voted to reject the board’s originally recommended sanction because that sanction did not adequately protect the public.

Subsequently, the board again recommended that Sarver be suspended from the practice of law for two years, with the entire suspension conditionally stayed. The board included additional conditions that require Sarver to comply with his Ohio Lawyers Assistance Program (“OLAP”) contract, take and pass the Multistate Professional Responsibility Exam, and, in addition to his normal continuing-legal-education (“CLE”) requirements, complete 12 hours of CLE focused on professional ethics or relationships with clients. And most importantly, the conditions include a period of monitored probation under Gov.Bar R. V(21).

Under Gov.Bar R. V(21)(A), disciplinary counsel must appoint an attorney or attorneys to monitor Sarver’s compliance with all of the conditions listed above. The monitoring attorney or attorneys must then file written, certified reports with disciplinary counsel regarding the status of Sarver’s compliance with the conditions of his probation, and shall “immediately report_” to disciplinary counsel any violation by Sarver of any condition of probation. The written reports must be filed “at least quarterly or as otherwise determined” by disciplinary counsel.

Further, while on probation, Sarver must (1) have a personal meeting with the monitoring attorney or attorneys at least once a month during the first year and at least quarterly thereafter, unless required by the monitoring attorney or attorneys to have more frequent meetings; (2) provide the monitoring attorney or attorneys with a written release or waiver so that Sarver’s compliance with the conditions concerning medical, psychological, or other treatment and his attendance at self-help programs may be verified; and (3) cooperate fully with the efforts of the monitoring attorney or attorneys. Significantly, Sarver’s probation may be terminated only with this court’s approval, see Gov.Bar R. V(21)(D), and disciplinary counsel must immediately investigate “any report of a violation of the conditions of probation” by Sarver and must move to revoke his probation if warranted (emphasis added).

These additional requirements will protect the public far more effectively than the sanction originally recommended by the board, as Sarver will be forced to be in regular and repeated contact with both the monitoring attorney or attorneys and OLAP. The written release or waiver that Sarver signs will provide the monitoring attorney or attorneys access to Sarver’s medical and mental-health information —a significant intrusion into Sarver’s private life—to ensure that he is in compliance with the conditions of his probation. Sarver must also abide by the significant obligations placed on him by his contract with OLAP. Moreover, Sarver has the proverbial “sword of Damocles” of more time without his license “hanging over his head” if he violates any ethical duty or any of the conditions during the suspension period. In other words, this sanction will keep Sarver, in colloquial terms, “on a short leash” once he is able to return to practice. Indeed, these additional conditions on the stay of Sarver’s suspension will better help to protect the public.

C. Conclusion

While I agree with much of the majority opinion and agree that the significant conditions attached to Sarver’s suspension, specifically probation, will help protect the public more effectively than the board’s previously recommended discipline-by-consent agreement, I believe that a longer actual suspension of Sarver’s Ohio law license is warranted. Therefore, I concur in part and dissent in part.

I hope that in the future, this court will more often utilize probation, as was done in this case, as a means of protecting the citizens of Ohio from attorney misconduct.