1. Grievance 101 Jennifer A. Hasley Hasley Scarano, L.L.P. P.O. Box 25371 Houston, TX 77265 T: 713.667.6900 F: 713.667.6904 jennifer@hasleyscarano.com www.hasleyscarano.com HBA All Day Ethics November 1, 2014 Alex B. Roberts Beck Redden LLP 1221 McKinney St., Suite 4500 Houston, TX 7701 T: 713.951.6261 F: 713.951.3720 aroberts@beckredden.com www.beckredden.com

2. Disclaimer Unless otherwise specified, examples discussed are fictional and do not depict any actual person or event. 2

3. The Ethics of Unethical Conduct Will know it when you see it? If you will know it when you see it … Why do you need an ethics lawyer? 3

4. Where do you stand? 4

5. Ethics – Grievance Defense How do you act – generally? How are you acting now? Has it already happened? Are you being proactive? Have you been caught? Can you fix it? Do you want to fix it? Legal Obligation Ethical Obligation Moral Obligation 5

6. Will you know it when you see it? Depends on your perspective … 6

7. Things that can turn your life upside down. The “D” in Disbarment Divorce Debt Drugs / Alcohol Depression Death Dishonesty Deceit Discretion (lack thereof) Disinterest / Neglect Dissatisfaction (Job) 7

8. Expecting a Grievance or just worried about it What is a grievance? What happens after a grievance is filed? What should you do if you receive a grievance? 8

9. Expecting a Grievance What to do … Evaluate options (e.g., refunds in fee disputes or at termination of representation). Take preemptive measures and corrective action (e.g., put papers in order, review trust account, communicate, file appropriate motions, etc.). Talk to objective third party, preferably a lawyer. 9

10. Expecting a Grievance What not to do … Do not panic. Do not get angry or retaliate. Do not conceal information or lie (cover up can be worse than problem or potential problem). 10

11. Responding to a Grievance Hire a lawyer. Respond timely - Do not “bury your head in the sand.” – 30 days. Focus on allegations. Less is more. Objectivity. Do not create new allegations. Do not provide or create evidence. Do not make admissions against interest. Do not sign affidavits or declarations. Evaluate current status of underlying case. Do not talk to just anyone. The CDC is NOT your friend. Do not try to “fix it” – “the cover up is worse than the crime!” 11

12. Not every case is a disbarment case. DISCIPLINARY SANCTIONS Dismissal GRP Private Reprimand Public Reprimand Probated Suspension Active Suspension Disbarment Relevant factors for sanctions … and DISBARMENT Number of rule violations. Seriousness of the conduct in question (e.g., stealing client trust funds; self-dealing; attempt to cover-up misconduct, etc.). Dishonesty, fraud, deceit or misrepresentation. Conduct during disciplinary proceedings. Recidivism and/or pattern of misconduct. Harm. Prior disciplinary history. ------------------------------------------------------------------- Compulsory discipline. ------------------------------------------------------------------- Judge as Witness or Complainant 12

13. Texas Attorney Disciplinary System Statistics 13

14. Attorney Disciplinary System Statistics 14

15. Attorney Disciplinary System Statistics Areas of law 15

16. Attorney Disciplinary System Statistics Rule Violations Alleged 16

17. Legal Malpractice 17

18. Types of Legal Malpractice Claims Ordinary Negligence Claims Breach of Fiduciary Duty Breach of Contract DTPA 18

19. Legal Malpractice Claims – General Principles Requires Attorney-Client Relationship Generally, Two Year Statute of Limitations Claims May Not Be Split Expert Testimony Required Generally, Strict Privity Rule Applies 19

20. Legal Malpractice Claims The Standard of Care “Reasonable Attorney” Standard At a Minimum, Comply With Applicable Rules of Ethics And Professional Conduct (Texas and ABA) Know The Law Meet Deadlines 20

21. Legal Malpractice - Damages The “Suit Within The Suit” Puts Lawyer In a Difficult Position Positions Taken By Lawyer In Underlying Litigation May Come Back To Haunt Pleadings and communications with opposing counsel Document your file with communications with client regarding “problems” with the case Damages Based On Change In Settlement Value 21

22. Legal Malpractice - Statute of Limitations Two year statute of limitations – Apex Towing Co. v. Tolin; 41 S.W. 3d 118 (Tex. 2001) Whether all claims are governed by two year status remains unsettled Many cases say all claims governed by two year statute McGuire v. Kelley ruled that breach of fiduciary duty claims based upon intentional fraud governed by four year statute 22

23. Legal Malpractice - Statute of Limitations Claim occurs when client sustains “legal injury” (tort committed and damage suffered) Apex clarified confusion between Hughes and Murphy – statute tolled during pendency of underlying litigation Hughes does not apply to DTPA claims or transactional work Discovery rule applies to malpractice claims Fraudulent concealment rule applies 23

24. The Statistics – Who Is Being Sued Source: ABA Standing Committee on Professional Liability 24

25. Avoiding A Legal Malpractice Claim Use Engagement Letter DOCUMENT AND LIMIT YOUR RETENTION Specifically identify client Individuals, corporations, partnerships Identify who not representing Specify scope of representation Identify lawyers on case Set forth expense and fee arrangement Get retainer on new clients Local Counsel 25

26. Avoiding A Legal Malpractice Claim Check For Conflicts Run Conflicts Before Obtaining Confidential Information Identify Client, Adverse Parties, Potential Adverse Parties and Third Parties Check Related Parties Multiple representation – Get consent Business Conflicts Former Clients Check Employee Conflicts at Hiring 26

27. Avoiding A Legal Malpractice Claim Manage Client Expectations Define Client’s GOALS and EXPECTATIONS Regularly Monitor Goals and Expectations. Tailor the Course of Action Don’t Overpromise Do NOT Guarantee Specific Results Be Up Front on Fees and Expenses Don’t Surprise Your Client 27

28. Avoiding A Legal Malpractice Claim Client Communications Keep Your Client Informed Determine Extent of Client Involvement Client Participation in Major Decisions Solicit Clients Opinion Document Decisions and Discussions Watch for Warning Signs 24 Hour Rule 28

29. Avoiding A Legal Malpractice Claim Client Communications Provide Detailed Time Entries Do Not Talk Down to Your Client Forward Documents Report Activities Choose Proper Medium of Communication 29

30. Avoiding A Legal Malpractice Claim Know Your Limitations Know Your Opponent Stick To What You Know Manage Your Time Associate Experts in Area Venue Considerations 30

31. Avoiding A Legal Malpractice Claim Calendaring Electronic System/Case Management Software Essential Keep Paper Calendar Electronic Notification System Enter Deadlines Immediately Multiple Entries/Notifications Schedule Lead Time Know Local Rules Know Standing Orders 31

32. Avoiding A Legal Malpractice Claim Just Say No! Particular Client or Matter Trust Gut Instinct Unhappy with Current Representation? Litigation History Do You Have Time? Do You Have The Expertise? Put It In Writing 32

33. Avoiding A Legal Malpractice Claim Avoid Business Relationships Governed by Rule 1.08 Texas Disciplinary Rules of Professional Conduct Burden on Lawyer to Make Sure Client Knows What Getting Into Must Be Fair and Reasonable Don’t Mix Business with Legal Representation 33

34. Avoiding A Malpractice Claim Avoid Fee Disputes Specify Rates and Personnel in Retention Letter Set Out Clear Statement of Scope of Work Provide Accurate Assessment of Cost of Handling the Matter Don’t Just Send Bill-Report on What You Have Been Doing Think Twice Before Suing for Fees 34

35. Avoiding A Legal Malpractice Claim Avoid Fee Disputes Follow Established Billing Practices Provide Detailed Time Entries Read Bills from Client’s Perspective 35

36. Avoiding A Legal Malpractice Claim Electronic Discovery ELECTRONIC DISCOVERY Ultimately YOUR Responsibility Litigation Hold Notice Scope of Responsibilities Preserving Electronic Information Record All Preservation Efforts 36

37. Grievance 101 Jennifer A. Hasley Hasley Scarano, L.L.P. P.O. Box 25371 Houston, TX 77265 T: 713.667.6900 F: 713.667.6904 jennifer@hasleyscarano.com www.hasleyscarano.com HBA All Day Ethics November 1, 2014 Alex B. Roberts Beck Redden LLP 1221 McKinney St., Suite 4500 Houston, TX 7701 T: 713.951.6261 F: 713.951.3720 aroberts@beckredden.com www.beckredden.com