THE ASSOCIATION OF THE BAR OF THE CITY OF NEW YORK
COMMITTEE ON PROFESSIONAL AND JUDICIAL ETHICS
April 5, 1995
ACTION: FORMAL OPINION
TOPIC: Duty to Report Misconduct; Mental Incapacity.
DIGEST: A lawyer has an obligation to report a former partner to appropriate disciplinary authorities upon obtaining knowledge that the former partner engaged in a pattern of neglect of matters or in the mismanagement or conversion of client or firm funds, subject to the limitation that client confidences or secrets should not be revealed without the clients' consent. If the lawyer concludes that the former partner is impaired or may even be unfit to practice based on mental incapacity, the appropriate disciplinary body should be informed.
CODE: DRs 1-103(A), 4-101(A), 6-101(A)(2), 6-101(A)(3), 7-102(B), 9-102(C); EC 1-4.
Under what circumstances must a lawyer report misconduct of a former partner to disciplinary authorities?
The inquirer seeks guidance regarding his obligations to report what he perceives as misconduct by "P," his former partner, who engaged in conduct that the inquirer perceives as misconduct. That conduct included, among other things, neglecting and mishandling legal matters, avoiding court appearances, failing to account for the firm's disbursements and expenses when forwarding settlement proceeds to a client and depositing firm funds into his personal account. The inquirer additionally alleges that P suffered from depression in the past that required medication.
DR 1-103(A) governs the inquirer's obligation to report P's conduct. This disciplinary rule requires a lawyer to report misconduct or conduct reflecting on another lawyer's fitness if the lawyer (1) possesses knowledge, (2) not protected as a confidence or secret (3) that raises a substantial question as to another lawyer's honesty, trustworthiness or fitness in other respects.
In this case, the inquirer and the former employees of the firm have first-hand knowledge of most of P's conduct and this would satisfy the "knowledge" requirement of DR 1-103(A). Nevertheless, in order to provide guidance to the inquirer with respect to the allegations for which there is no actual knowledge, a brief discussion follows. This Committee has recognized that charging another lawyer with misconduct is a serious matter that should not be undertaken lightly. Consequently, a lawyer should not report a mere suspicion of misconduct. N.Y. City 1990-3; N.Y. City 82-79; N.Y. City 80-42; see also N.Y. State 635 (1992); N.Y. State 480 (1977). A lawyer should only report another lawyer if he or she has either actual knowledge or "believes clearly" (EC 1-4) there has been a violation of the Code. N.Y. City 1990-3.
In Doe v. Federal Grievance Committee, 847 F.2d 57 (2d Cir. 1988), the Second Circuit described the type of knowledge necessary to report misconduct in its discussion of the analogous disclosure obligations to report fraud pursuant to DR 7-102(B). The court stated that disclosure is required only if the lawyer has knowledge that he or she "reasonably knows to be a fact" and which "clearly establishes" the existence of a fraud. Id. at 62. The court went on to state that "proof beyond a moral certainty" was not necessary but the lawyer must "clearly know, rather than suspect" the fraud. Id. See generally Committee on Professional Responsibility, Association of the Bar of the City of New York, The Attorney's Duties to Report the Misconduct of Other Attorneys and to Report Fraud on a Tribunal, 47 The Record 905 (1991); Bruce A. Green, Doe v. Federal Grievance Committee: On the Interpretation of Ethical Rules, 55 Brooklyn L. Rev. 485 (1989); Hal R. Lieberman, A Lawyer's Duty to Report Misconduct Under DR 1-103(A), N.Y.L.J., Aug. 21, 1990, p. 1, col. 1. The inquirer should be guided by the above rules as to allegations concerning which he has no actual knowledge.
The question of protecting client confidences and secrets within the dictates of DR 1-103(A) is somewhat more difficult. It is true that the otherwise broad definitions of "confidences and secrets" do not encompass P's behavior in the law office or conversations with other lawyers in the law firm not regarding client matters. To the extent that specific cases involving the firm's former clients are involved, however, the inquirer must be mindful that some, if not all, of the information about the cases may fall within the definition of a secret set forth in DR 4-101(A). This consideration does not change because the confidence or secret involves a former client. DR 5-108(A)(2); EC 4-6; see generally Charles W. Wolfram, Modern Legal Ethics 255 (1986).
Specifically, if the inquirer reports the misconduct, he may be required to give the disciplinary authorities as part of their investigation (pursuant to their subpoena power or otherwise) his former clients' names, and either he or the clients could be compelled to provide details of the cases. As a result, if the inquirer determines that the "secrets" doctrine applies to the disclosure, he should contact his former clients to obtain consent to disclose the information to a disciplinary committee. This is obviously a delicate matter because the firm's former clients are present clients of P. However, the inquirer is not prohibited from talking to the former clients for this purpose.
The final issue is whether P's conduct is sufficiently substantial to warrant reporting him to the disciplinary authorities. There is no precise definition of "substantial," but since the use of the word "substantial" in the Code is drawn from Model Rule 8.3, the official comment to that Rule is illuminating. It states in pertinent part (emphasis supplied):
This Rule limits the reporting obligation to those offenses that a self-regulating profession must rigorously endeavor to prevent. A measure of judgment is, therefore, required in complying with the provisions of this Rule. The term 'substantial' refers to the seriousness of the possible offense and not the quantum of evidence of which the lawyer is aware.
As evidenced by the above description, it is not easy to define the term "substantial." Nonetheless, it would appear that certain allegations regarding P's conduct raise substantial questions as to his honesty, trustworthiness and fitness. For example, if there was a pattern of neglect and incompetence as the inquirer described, P violated DR 6-101(A)(2) and (3) and there would be an obligation to report the conduct, assuming there are no applicable restrictions.
Even more compelling is the inquirer's allegation that P failed to account for expenses relating to a settlement. Such a failure to account is a violation of DR 9-102(C) and is an extremely serious matter. This may even be indicative of P's concealment of a conversion of client funds. This type of allegation clearly reflects upon an attorney's honesty and trustworthiness and if the inquirer has the requisite knowledge, and there are no other impediments, he should report it. Similarly, if the inquirer is suggesting that P converted firm funds, obviously, this too reflects directly on P's honesty.
Another concern is the suggestion that P may have a psychiatric problem. While it is true that some of the inquirer's factual allegations could be interpreted as simply reflecting a different life style or point of view, at the same time, some of the conduct may confirm the necessity to scrutinize P's mental capacity. It is extremely important that the public be protected from an incapacitated attorney. If P resolved a short term psychiatric problem, there is nothing to report. If, on the other hand, the inquirer has actual knowledge or clearly believes that P is impaired or even unfit to practice law due to a mental incapacity, the appropriate disciplinary or grievance committee should be immediately informed. This will allow the committee to review P's mental state and decide whether to seek a psychiatric evaluation or, if appropriate, a temporary suspension. See 22 N.Y.C.R.R. § 603.16.
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The inquirer's concern about his obligations under DR 1-103(A) is valid since the failure to comply with this rule is a violation of the Code that could result in a disciplinary sanction. See, e.g., Matter of Jochnowitz, 189 A.D.2d 342 (1st Dep't 1993); Matter of Dowd, 78 A.D.2d 160 (2d Dep't 1990). It would appear from the facts presented in the inquiry that P should be reported, assuming there are no applicable restrictions. The inquirer may gain some comfort from the fact that there is immunity for people who file disciplinary complaints. See Wiener v. Weintraub, 22 N.Y.2d 330 (1968). Finally, and most importantly, the legal profession relies upon lawyers to report appropriate cases to protect the public and the integrity of the Bar. See Matter of Wieder, 80 N.Y.2d 628, 636 (1992).
Subject to the rules governing the maintenance of client confidences and secrets, the lawyer has a duty to report the misconduct and possible mental incapacity of the former partner to the appropriate disciplinary authorities under DR 1-103(A).