Ethics CLE 2023: Recent Developments in Legal Ethics & Professional Responsibility

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Jack Capizzi:  Well, hello, and welcome to today's Federalist Society virtual event. Today, Wednesday, December 20, we are delighted to present our "Ethics CLE" update discussing recent developments in legal ethics and professional responsibility.  My name is Jack Capizzi, and I'm an Assistant Director of Practice Groups at The Federalist Society. As always, please note that all expressions of opinion are those of the experts on today's call.

 

      Today we are delighted to be joined by Judge Margaret Downie, the Presiding Disciplinary Judge of the Arizona Supreme Court; Andy Halaby, a shareholder at GreenbergTraurig; and Judge Jennifer Perkins, a judge on the Arizona Court of Appeals for Division One. After our speakers have given their remarks, we will turn to you, the audience, for any questions you might have. If you have a question at any point, please type it into the Q&A function at the bottom of your screen, and we'll handle those as we can towards the end of the program.

 

      Also, please pay attention to the CLE announcement that will be posted hallway through the program. We will post a code that you will be required to submit on your certificate of attendance that will be emailed to you following the event. With that, thank you all very much for being with us today. Judge Perkins, I'll turn it over to you.

 

Hon. Jennifer Perkins:  Thank you, Jack. And thank you to The Federalist Society for inviting us for this program. As you probably gathered from the list of topics, we have a lot to cover. We do aim to reserve a few minutes for questions at the end. And, again, you can enter those at any point in the Q&A function, but we'll be looking to take them at the end of our prepared remarks. 

 

      From the list of topics and the relatively short duration of this webinar, just at the outset, I will say we do not intend to plumb the depths of these topics. We are aiming to maybe whet your appetite and give you something to think about in the ethics update realm and, really, quite frankly, to get your CLE credit before the end of the year. That's the goal that we aim to hit.

 

      So, my topic is artificial intelligence and ethics issues. Starting out, what is artificial intelligence? Of course, there are entire seminars devoted to answering this question. And AI comes in many flavors. I would say generative AI models — those producing various forms of work products like images, memos, dare I suggest judicial opinions — are the models that most, I would say, give rise to the ethics issues I'm going to touch on today.

 

More broadly speaking, AI are models that use algorithms to analyze data to produce predictions and insights. AI models are trained on really vast quantities of data, more than the human mind can process and potentially using more variables than the human mind can process. AI results are, thus, based on correlations which can be subject to uncertainty and error and, notably, because of the complexity of AI and the depth and breadth of its data inputs, how an AI model reached its result may be opaque, which can be critical to your ethics inquiries.

 

As noted, there are different kinds of AI that can be used for different purposes; think facial recognition versus online customer service chatbots. And, of course, different design features are used for different purposes. Some programs may use what they call "cleaned data," so faulty, irrelevant inputs have been removed. Some use proprietary data. Others use open source.

 

Because of these differences, the framing of your question input to the AI model will net different results from different AI programs, which is also something to bear in mind in considering legal and ethics issues with AI. And, of course, AI systems have built-in limitations. For example, they recognize correlations, but generally cannot establish causation. And the correlations recognized may be neither relevant nor appropriate under the circumstances to the question you have actually asked.

 

Again, there is a likelihood of uncertainty and error in the output, which may be a result of the actual model, the method, or the algorithms used, or due to incomplete or inaccurate data on which the AI has been trained. And, even if accurate at one time, AI performance can downgrade or become biased over time if it learns from user input and then assumes false associations. So, none of that is encouraging.

 

But, nonetheless, we are all enthralled, I think, these days, with the fun that can be had with AI. So, let's talk about AI use in the courts, in the legal system, generally. Courts, in particular, and law offices, may choose to use AI for efficiency and streamlining operations: basic things like document management, case scheduling, record management. It's already proven useful in legal research and writing, including things like scanning the record, assisting lawyers, and searching for useful documents that have been produced in discovery. 

 

I actually had the opportunity to try out Westlaw's AI-assisted research function this week in preparing for some oral arguments. I typed in a series of detailed research questions that resulted in a short — I would say maybe 2/3 of a page — summary AI-generated research memo followed by a series of case excerpts on which the memo was based. I was actually able to generate a couple of truly useful memos and a series of, we'll call them less useful, sometimes not technically correct results. So, again, cautionary tales.

 

And, of course, there are more fun uses of AI for us all. For those who are fans of the SCOTUS 101 podcast, a recent episode featured trivia based on an intern's request to an AI program to "write for me an excerpt of a Supreme Court opinion in the style of," insert the names of various justices. I think you'd find the results and the related trivia very interesting. So, you might check out the episode. It was posted on November 3. Again, that's SCOTUS 101. That episode, just as an aside, featured Judge Jim Ho's "Joseph Story" lecture, which was also worth a listen.

 

So, what kinds of ethical issues or questions are we starting to face in the AI context? I'm going to focus on four here: candor to the Court, preserving client confidentiality, attorney competence, and reasonableness of fees. An overarching question that covers all of these and all the questions that we're asking is are the current rules sufficient to account for AI-related ethics issues, or do we need more specific rules? I tend to think our current rules will serve us well, or at least that perhaps we don't need to jump quickly into rule amendments, but we'll see what you think as we do a walk through the four areas that I've mentioned. 

 

So, starting with candor, Model Rule 3.3(a)(1) tells us "A lawyer shall not knowingly make a false statement of fact or law to a tribunal or fail to correct a false statement of material, fact, or law previously made to the tribunal by the lawyer." We have a real-life case study. And I imagine most of us have heard some bits of this case, if not being real familiar with it. But it's Mata v. Avianca in the southern District of New York.

 

This is the case in which the judge sanctioned attorneys for submitting ChatGPT-generated briefing containing citations to non-existent judicial opinions with fake quotes and citation. I think Judge Downie is going to give us a little bit of a flavor of what happens when you walk down a road really far into bad -- and sort of dig yourself deeper and deeper. This case is also a case study of that problem. And I believe a copy of it is in your CLE materials.

 

Brief rundown: the case started in state court with -- so the names are in the opinion, but for our purposes here we'll call him "Attorney X," our state court-admitted attorney. He represented the plaintiff, Mata. Defendant Avianca removed the case to federal court and moved to dismiss the case, at which point, Attorney Y, also in the same firm with X, entered his appearance because X was not admitted to the Southern District of New York. 

 

As you might have guessed, this meant that Attorney Y attested to the response to the motion to dismiss, but Attorney X did the actual work in preparing the response. And Attorney Y, although declaring to the court that the foregoing is true and correct, did not actually check to see if the work was true and correct. The record apparently contained no basis for the court in the sanctions ruling to conclude that Attorney Y did anything other than rely on his past experience with X to assume the work product was accurate. 

 

Now, they had 25 years of experience together, so it's maybe, perhaps, not unreasonable, except the reply brief contained this statement: "Although plaintiff ostensibly cites to a variety of cases in opposition to this motion, the undersigned has been unable to locate most of the case law cited in plaintiff's affirmation in opposition, and the few cases which the undersigned has been able to locate do not stand for the propositions for which they are cited."

 

So, the court ordered Attorney Y to file an affidavit with copies attached of the decisions cited in the response brief, giving him a week to do so. Attorney X was out of the office, so Attorney Y did what you should not do. He filed an extension request claiming he, Attorney Y, was on vacation. He was not. So he lied to the court, later acknowledging, "I was just attempting to get the other attorney additional time that he needed because he was out of the office." This is not the end of the story.

 

Attorney X then prepared an affidavit and attached what the court called "what purported to be copies or excerpts of all but one of the decisions." Attorney Y signed and submitted the affidavit and attachments, apparently without asking his colleague any questions. Again, in the court's words, "the affidavit did not comply with the court's orders because it did not attach the full text of any of the cases that are now admitted to be fake."

 

So, I'm not sure how much more I really need to say on candor except to note attorneys have an explicit duty of candor to the tribunal, and you violate that duty when you submit fake citations and then again when you lie about what you have submitted. So don't do that. In all seriousness, part of your duty of candor is in accurately affirming the authenticity of your work. If you did not know before, you should now know that affirming AI-generated work product as your own is a risky business.

 

So, let's move on to confidentiality. Model Rule 1.6 is our Confidentiality of Information rule, and it is incredibly broadly worded. "Unless authorized by the client, and with limited exceptions, a lawyer shall not reveal information related to the representation of a client." So, in other words, it's not just information that the client has asked you to keep confidential. It's not just information that you have discussed in a private meeting with the client, but any information related to the representation of a client, absent the client's authorization and absent meeting one of the limited exceptions. You cannot reveal it. 

 

Many, probably most, AI programs continue to learn, in part, based on what users submit or input. In other words, they retain the data that you provide and they retain the generated results. Now, this is not true across the board. I think there's some indication that maybe Thomson Reuters is working with parameters that would not retain any data that's generated. But I think this is going to be a significant issue going forward, both for judges and lawyers. And it would be discerning the appropriate confidentiality boundaries when you are using AI tools. 

 

Is the tool you are using going to retain your information? Is it going to be used elsewhere, either just for learning or perhaps providing something that you generated in the context of somebody else's effort to generate related work product? So, client confidentiality is going to be a significant issue. Attorney competence, obviously, there are clearly dangers in trusting AI to assist you in legal or judicial work. So, there could be the temptation, "I'm out. I'm not using AI." But if AI can be used to increase efficiency, do lawyers have an obligation to learn about it? 

 

Model Rule 1.1. tells us that "A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness, and preparation reasonably necessary for the representation." Notably, in 2012, the ABA amended a comment to this Model Rule to add the clause that specifically requires lawyers to keep up with current technology. That's in Comment 8 to the Model Rule. And 40 states have adopted a similar requirement for lawyers to maintain technological competence. There are two advisory opinions included with your materials, and they touch on this in the judicial context. Both are actually from, I think, October of this year. 

 

The Michigan opinion touches on the need for judicial officers to understand AI sufficiently that they can know its benefits and risks and be capable of evaluating the accuracy of AI work product. So, in terms of judicial use, the opinion cautions judicial use of AI must distinguish between using an AI application to decide and using AI to inform a decision. I think, translating that to the lawyer context, it's one thing to use AI to inform your research, to inform, perhaps, the beginning of a briefing process. It's another thing to give AI control over your work, writ large. So I encourage maybe checking out those opinions.

 

And my last theory that I wanted to just very briefly cover is reasonableness of fees. Model Rule 1.5 prohibits attorneys from collecting an unreasonable fee or unreasonable amount for expenses. And the rule contains a variety of factors to consider, including the time and labor required for the legal services. Historically, these have all been factors driven by human inputs and outputs. I think we're going to face some novel issues in this area. Can you charge your client to manually perform a task that could have been performed by AI more quickly?

 

We have, for example, long struggled with is this block of time appropriate to charge partner fees, associate fees, perhaps paralegal fees? Now we have new metrics to grapple with. And according to a March 2023 Goldman Sachs report, 44% of tasks in the legal field could feasibly be automated through AI. I don't know how accurate that is. But throwing that out there is an interesting number. You start to enter an interesting space in attesting to the reasonableness of your fees and the fee applications for the court to consider.

 

Now, this has been a quick hit. And I don't want to take up too much time. Obviously, there are many ethical issues that are actually implicated in dealing with AI: unauthorized practice of law; the duty of supervision over non-lawyer assistance, and what does that mean in this space; the duty of consultation and communication with clients; and the use of AI on behalf of the client. Do you need to tell the client you're going to be using AI? What does that communication look like? Is it on individual products, or writ large?

 

There are issues of bias as AI models learn from work product. And that work product might produce different types of bias. We're not going to cover all of those today. But I think they are things that you should be thinking about. And, as a takeaway, be aware of ethics advisory opinions from courts and bar associations' best practices guidance that are coming out, new committees that are considering rules. 

 

Just three examples: on November 16, so just a month ago, California adopted a practical guidance on the use of generative AI by attorneys. Attorneys in California should be familiar with that. And you should be familiar with it on an ongoing basis. They plan to update it regularly. Florida has an in-progress advisory opinion for attorneys to be finalized next month. The draft currently concludes "A lawyer may ethically utilize generative AI technologies, but only to the extent that the lawyer can reasonably guarantee compliance with the lawyer's ethical obligations." 

 

Other states, such as Connecticut, New Jersey, and Texas, currently have committees established to study the use of AI by lawyers, and, specifically, whether rule changes may be needed. And then, just one final aside, I included in the materials an article. It's actually a few years old. It's from 2018. But it specifically targets patent lawyers and the ethical concerns arising from the use of AI in patent drafting. So, if we have IP lawyers here, you might want to take a look at that article just to jumpstart your thinking in this area. 

 

With that, I will turn it over to Andy. And I'll be watching the Q&A function for any interesting questions.

 

Andrew F Halaby:  Thanks, Jen. So, folks, I have two topics. I'm going to start with the ABA's amendment to Model Rule 1.16. The ABA recently adopted changes to Model Rule of Professional Conduct 1.16 which governs declining or terminating representation. The changes represent a compromise between responding to pressure from national and international law enforcement interests to combat money laundering and financial support for terrorism while attempting to maintain fidelity to core professional values, including client confidentiality. 

 

As a preliminary matter, let me say that everyone, or almost everyone listening in, probably understands that, by themselves, the ABA Model Rules have no force of law. Only when a particular jurisdiction adopts a Model Rule or amendment, or a variant, does it become a rule having legal force. That said, the ABA Model Rules continue to be influential, having been adopted with variations, some substantial, in every state. Now, let's talk about Model Rule 1.16.

 

We'll begin by recalling that Model Rule 1.16 identifies circumstances in which a lawyer must decline or withdraw from representing a client, and circumstances in which the lawyer may. The recent changes apply to mandatory turning down or withdrawing from representation. So, let's focus on that mandatory component of the rule. Before the recent amendment, it applied only in three circumstances: one, the representation would result in a violation of the rules; two, the lawyer's physical or mental condition materially impairs the lawyer's ability to represent the client; or, three, the lawyer is discharged.

 

Now, there is a fourth: withdrawal or turning down the representation is mandatory where, and I'm going to quote, "the client or prospective client seeks to use or persists in using the lawyer's services to commit or further a crime or fraud." Additionally, the Model Rule now, where it didn't before, imposes on the lawyer an affirmative duty — and, again, it's worth quoting — "to inquire into and assess the facts and circumstances of each representation to determine whether the lawyer may accept or continue the representation." Now, the recent amendments to Rule 1.16 add content to the comments as well. And I'd like to touch on what I think are three features of those. First, the facts and circumstances inquiry that the lawyer must undertake is necessarily risk-based.

 

According to the new comment, factors to be considered in determining the level of risk may include: one, the identity of the client, such as whether the client is a natural person or an entity, and, if an entity, the beneficial owners of that entity; two, the lawyer's experience and familiarity with the client; three, the nature of the requested legal services; four, the relevant jurisdictions involved in the representation, for example, whether a jurisdiction is considered at high risk for money laundering or terrorist financing, and; five — and I'm going to ask you to put an asterisk on this — the identities of those depositing into or receiving funds from the lawyer's client trust account or any other accounts in which client funds are held.

 

Now, the second addition to the comments relates to the duration of the duty of inquiry and assessment. The comments make clear that that duty to inquire and assess as to the risk of facilitating criminal activity continues through the representation, not just at the outset. Again, I'll read to you from the rule, and we'll hear more about that asterisk.

 

"For example," the comment provides, "the client traditionally uses a lawyer to acquire local real estate through the use of domestic limited liability companies with financing from a local bank. The same client then asks the lawyer to create a multi-tier corporate structure formed in another state to acquire property in a third jurisdiction and requests to route the transaction's funding through the lawyer's trust account."

 

Another example is when, during the course of the representation, a new party is named, or a new entity becomes involved. Now, I'm a working lawyer in a big law firm and that's what I've always done for the entirety of my career. And so, I can tell you that, of the factors that are recited in those two excerpts from the comments, one runs into those things every day: multiple entities, who the beneficial owners are. One, as a general practice prudence matter, wants to know those things anyway. 

 

To me, the distinguishing feature is use of the lawyer's trust account for things the trust account isn't traditionally used for: that is, holding money that the lawyer has taken possession of, but hasn't necessarily earned yet, holding settlement dollars pending their disposition, and reconciliation of any third-party liens, etc. And so, to me, a big takeaway from this addition to the comments is if you're using your client trust account for out of the ordinary activities, that's going to be a matter of interest, potentially, one day, to reviewing authorities.

 

Third, the comments reaffirm — and this was the law before, if you're in a Model Rules jurisdiction — that a client merely suggesting unlawful conduct does not, by itself, require that the lawyer decline or withdraw from representation. This is important, because the Model Rules make clear, and I think it's 1.2(d), in particular, that figuring out the ambit of the law and compliance with the law is very much what lawyers do. And if the rule becomes that if anything coming near criminal activity touches the representation, the lawyer has to scurry away, flee from it, then clients who are trying to figure out whether they are operating lawfully or unlawfully or how to operate lawfully will be deprived of the benefit of counsel. 

 

So, that element of the rules has not changed. Lawyers still have the ability to counsel clients through — in accordance with Rule 1.2(d) — figuring out what the legal consequences are of any proposed course of conduct and assisting the client in making a good-faith effort to determine the validity, scope, meaning, or application of the law. So, on 1.16, I'm going to wrap up with this question — to me, interesting — which is whether the new, now explicit, duty of inquiry and assessment adds anything substantively new to lawyer duties.

 

The report accompanying the resolution as adopted late this last summer maintains, no, this new duty of inquiry and assessment doesn't add anything substantively new. And it cites as examples the rules on Conflicts of Interest 1.7; Competence, which judge Perkins mentioned, 1.1 and others, as examples where, according to the report, lawyers perform inquiry and assessment before and during representation every day. But those rules don't contain an explicit ethical duty of inquiry and assessment.

 

And so, to my mind, it's going to be interesting to see whether the existence of an explicit duty means that disciplinary authorities will now charge independent violations of that duty, and, if so, how responding attorneys will identify and defend their acts of inquiry and assessment. And though the preamble to the Model Rules is explicit that — and here, it's worth another quote — "violation of a rule should not, itself, give rise to a cause of action against a lawyer, nor should it create any presumption in such case that a legal duty has been breached," one can also imagine scenarios in which the new ethical duty of inquiry and assessment will be invoked in civil litigation against lawyers and law firms. 

 

Thus, again, as a matter of self-protection, lawyers governed by equivalents of the new Model Rule, as amended, should consider preparing to identify and defend what they did to inquire and assess. Those are my comments on Rule 1.16. And, Judge Perkins, I think I'll now turn to my other topic, which is an update on Arizona's alternative business structures law. 

 

So, just by way of background, Arizona is now — and has been for coming up on three years — one of the two states in the union that allows non-lawyer ownership of law firms. Arizona calls such law firms "alternative business structures," which harkens to the lexicon used in the United Kingdom. And, in brief, an alternative business structure is simply an entity licensed by the Arizona Supreme Court to provide legal services to third parties that can be owned, in whole or in part, by non-lawyers. And ABS is a law firm that happens to be owned, in whole or in part, by non-lawyers.

 

The theory of Arizona's adoption of its ABS law is that we have to do something in order to bring together clients who need legal services but can't afford them at their current price point, and providers of legal services whose services many ordinary people can't afford for ordinary things. And the theory of the ABS law's adoption is that by allowing non-lawyer investment, adding to, reaching into one's pocket and borrowing a third source of capital for lawyers and law firms, that will spur innovation, spur competition, and bring prices down. That's the theory.

 

So, I included in the materials a brief piece by a colleague and I that provides an update to how the Arizona ABS program seems to be turning out now as we approach the third anniversary of its enactment. There are now 65 licensed Arizona alternative business structures, and another 30 pending applications. Interestingly, the practice areas in which these ABS's practice, or have been licensed to practice, run essentially the gamut: a heavy presence of personal injury law firms, mass tort law firms but, also, a substantial portion of them are trust and estate law firms. We also see law firms devoted to particular kinds of torts, general litigation, class action, immigration, some intellectual property.

 

And so, in this respect, I'd say the program is turning out as it was supposed to, in that we are seeing the injection of non-lawyer capital into the practice of the law in a wide variety of different disciplines. Let me turn to the regulatory regime governing alternative business structures in Arizona and tell you just a little bit about that. The analog is Character and Fitness. Every lawyer on this call has had to sit for a Character and Fitness in one or another state. And here, too, the regime for licensure is sort of like Character and Fitness.

 

The Administrative Office of the Court's staff review and conduct background investigations on substantial players in the ABS ownership structure. Staff make recommendations for licensure or not to a body established by the Supreme Court called the Committee on Alternative Business Structures. It consists of both lawyers and non-lawyers. And that committee, like a Character and Fitness Committee, makes recommendations to the Supreme Court as to whether the entity ought to be licensed. 

 

Now, because, in Arizona, as in most states, before the advent of this law, lawyer regulation is primarily an individual lawyer regulatory regime, rather than entity regulation, the Arizona authorities had to do something, in their view, to assure compliance of ABS's with the rules governing lawyers, considering that non-lawyers were in the mix. And so, what Arizona has done is established a position called the compliance lawyer. Every Arizona ABS must have one. And that individual lawyer, who must be admitted to practice in Arizona and agree to accept the obligations of a compliance lawyer, takes on quite a lot by accepting that role. And I want to tell you a little bit about that.

 

First, the compliance lawyer is personally on the hook, if you will, for any disciplinary investigation or charge that's leveled at the ABS. That's as a matter of the Arizona code of judicial administration. So, one of the things that isn't written down anywhere, but has turned out to be true in practice is that when a bar complaint is made in Arizona against alternative business structure or something that someone in the alternative structure did while practicing law, the state bar automatically levels a charge against the ABS as an entity and against the compliance lawyer individually. That happens every time, best I can tell, a charge is leveled against an ABS.

 

Another thing that's going on with Arizona compliance lawyers is that, speaking informally, there aren't enough lawyers in Arizona to match the demand for Arizona compliance lawyers. A lot of wonderful things about Arizona, but they're not as populous as, for example, our neighbor to the west. So, one of the things that we're seeing is that lots of lawyers from across the country who practice in reciprocal admission jurisdictions with Arizona are applying for admission to practice in Arizona on motion so they can serve as the compliance lawyer. 

 

And that, in turn, is interesting because it's sort of backing up the admission on motion process to take longer than it used to, months. Another related phenomenon we're seeing with compliance lawyers is that if one is going to serve as an Arizona compliance lawyer and has the level of experience that the regulators look for, and the capabilities necessary to discharge those functions, the lawyers out there who have those capabilities typically want to be paid something substantial. 

 

An interesting challenge is that though one needs those credentials and that experience to serve as a compliance lawyer, as a practical matter, once in the role, the compliance lawyer doesn't exactly — and this is anecdotal — the role doesn't exactly involve 40 hours a week.  So, ABS's are having to either decide to foot the bill on overhead for the compliance lawyer to do the job, or find something for the compliance lawyer to do that's related to the practice of the ABS. And that, in turn, creates a very interesting situation, since, in many instances, the Arizona compliance lawyer is focusing as the general counsel for the enterprise.

 

The Arizona code of Judicial Administration contains provisions that one could argue require the compliance lawyer to report to the state bar substantial events of misconduct occurring within the ABS.  Of course, that creates a tension. And Justice Rehnquist, with all his Arizona roots, didn't know, back when he was writing Upjohn, that he was seeing into the future decades as to the kinds of issues that we might confront when he wrote the Upjohn decision when we impose a regulatory obligation on an inside counsel to tell on the people who might be coming to them for advice. 

 

But some observers are noticing that that provision in the law may actually chill lawyers in the ABS from coming and talking to the compliance lawyer, much as, in any other kind of enterprise, if any employee knew that, by talking to the general counsel, they were setting themselves up to be ratted out to a regulatory authority, they might be a little less inclined to do it.

 

So, this isn't something I can say that I've seen happen. And, of course, one wouldn't expect to. One doesn't necessarily see chilling unfold. One only has to make logical guesses, as the United States Supreme Court did in Upjohn, as to how it might happen. But that is another interesting feature of the regulatory regime and the compliance lawyer rule, in particular, in Arizona. And, with that, Judge Perkins, I think I've concluded my comments.

 

Hon. Jennifer Perkins:  Thanks, Andy. And now, I'd like to turn it over to Judge Downie for just some remarks on her experience as disciplinary counsel, some of the issues that she's been identifying that we thought might be beneficial for the folks on the call to hear about.

 

Hon. Margaret H. Downie:  Thank you, Judge Perkins. My audio was a little wonky before. But you can hear me, correct? All right, good. Thanks for the invitation to join this discussion. I have been the presiding disciplinary judge in Arizona for just under three years. I am appointed by the Arizona Supreme Court. I'm not part of the State Bar of Arizona. I'm not affiliated with the State Bar. But my primary role is adjudicating formal complaints of ethical misconduct that the State Bar of Arizona does file.

 

So, I'm not involved with the thousands of bar charges that come in every year, most of which are weeded out through a screening process or an intake process. The ones that percolate up to me are typically, but not always, the cases where the State Bar is seeking to disbar, suspend, or reprimand a lawyer. We do have a lesser sanction available in Arizona, an admonition. Those are typically resolved at the State Bar level, as are lawyers who participate in diversion, which is not a disciplinary sanction.

 

So, most of the cases I see, not all of them, involve relatively serious misconduct. And so, I was trying to think of what I could talk about that would be of interest to this group. Because telling you not to steal client money or you shouldn't lie to courts, that's silly. You know that. So, when we were sort of brainstorming our presentation for today, I came up with two topics that I hope will have some broad-based appeal.

 

The first is the line, to the extent there can be a line, between unprofessional conduct that's inappropriate, annoying, stressful — we all encounter that — and unprofessional conduct that actually rises to the level of warranting a disciplinary sanction. The second topic I'll be touching on is what I guess I would characterize as some lessons I've learned from a couple of fairly recent hearings involving young lawyers who I think had very, very promising legal careers who got badly off track earlier in their careers in ways that might have been prevented So I want to talk a little bit about that.

 

But first, on the issue of unprofessional conduct, it's impossible to clearly delineate when a lawyer's conduct goes from merely being unprofessional to unethical. But, in the almost three years I've been here, I've tried at least three cases where that was the only allegation, is that the lawyer's extreme unprofessionalism rose to the level of disciplinary sanctions. And in your materials for the program are copies of two decisions resulting in matters that I adjudicated. And I have another one that's currently on appeal to the Arizona Supreme Court. All of my decisions can be appealed to the Supreme Court.

 

The two decisions that are in the materials both resulted in long-term suspensions of lawyers for extreme unprofessionalism. I've heard people speculate — and I think I was guilty of this speculation as well — that maybe the heightened levels of unprofessional conduct in the legal field can be attributed to younger members of the bar. Maybe the mentoring that some of us enjoyed when we were young lawyers isn't as robust as it used to be. Or maybe the financial stresses of law practice these days have caused more stress, frustration, whatever, or that there's some notion that the younger lawyers lack an appreciation for the collegiality that maybe we once valued.

 

Okay, so that's the speculation. And I think I was guilty of thinking that might be true too. I'll tell you that hasn't been my experience. In the three cases that I've had that went to formal hearing, involving unprofessional conduct, two of them were lawyers with more than 20 years of experience. The third was a lawyer with 48 years of experience. I have not yet had a younger lawyer come before me with those kinds of allegations. So, I don't know if that refutes the speculation. But I don't think we can blame it on the younger lawyers. 

 

The Arizona Supreme Court, dating back a couple of decades, has been really proactive and action-oriented in the realm of lawyer professionalism. We talked a little bit about some of the ABA Model Rule amendments. And I can't tell you exactly when this occurred. But I think it was 15-20 years ago. The last time the ABA did a substantial overhaul of the Model Rules of Professional Conduct, Arizona, as it usually does, appointed a task force to study those and see which ones we wanted to adopt, which ones we didn't.

 

And one thing that came out of that was our Supreme Court specifically rejected and took out of our code any reference to "zealous representation" or the root word "zeal." And they did that intentionally, explaining our court's belief that the use of the word "zealous" can incorrectly connote the notion that anything goes in the vigorous representation of a client. So, in our code, in our preamble, the word "zealous," "zeal," does not appear any longer.

 

The other thing our court did around the same time is it adopted a creed of professionalism. And so that sounds nice and has a lot of tenets that attempt to define what is professional conduct, such as agreeing to extensions of time that won't prejudice your client's interests, and a number of other specific points. But what's interesting about our creed is that the Arizona Supreme Court has specifically stated that violations -- let me rephrase that. That's too broad. Substantial or repeated violations of the creed of professionalism or the oath of admission can be grounds for disciplinary action.

 

So, our creed of professionalism is not merely aspirational. And if you look at the decisions that are in the materials, for example, the Levy decision, the respondent lawyer there made repeated disparaging references to and about his opposing counsel, both in email communications and in court filings. And then, Judge Perkins talked about doubling down on your misconduct. Boy, did he do that. Because then, when he gets the bar charge, he makes all of these allegations about the trial judge, calling him "amazingly careless," "utterly thoughtless," alleging that he failed to take the time to learn about the litigation.

 

And this lawyer, during his disciplinary hearing, represented himself — almost never a good idea — and really demonstrated why he was in the predicament he was in, even during his disciplinary hearing. So, one of the things that I find interesting about the Levy decision — and we talked about this briefly in a planning session — as the presiding disciplinary judge, I impose a sanction. And, if it's not appealed, it's final. But if it is appealed, the Supreme Court has the last word.

 

In Levy, the State Bar asked for a 90-day suspension. I sit on a hearing panel that includes a member of the public and a lawyer. We imposed a 90-day suspension. Mr. Levy appealed. The State Bar did not cross appeal. And the Supreme Court, sua sponte, without argument or further briefing, suspended him for six months and a day. And in Arizona, as in many jurisdictions, that extra day is very significant because if a lawyer is suspended for more than six months, he or she has to go through very rigorous reinstatement proceedings before coming back to the practice.

 

So, in the decision order that you have in the materials, the court said things like, "Opposing counsel were subjected to the type of bullying, belittling, unprofessional conduct that makes the practice of law needlessly stressful and unpleasant." The court rejected the lawyer's claim that the other side was obnoxious too and noted that the esteem that the public holds or doesn't hold for the legal profession is affected by this kind of unprofessional conduct.

 

And then, the second decision that's in your materials is another respondent lawyer who exhibited extreme unprofessionalism and made allegations against judicial officers that were not supported by anything in the record, like accusing judges of sanitizing the record because a minute entry didn't show up right away, and just things that were not supported by the record. And there, the Supreme Court suspended that lawyer for a year. 

 

The other thing that's interesting about these three cases that I've handled involving unprofessionalism is they all were initiated by judges. And I think judges are largely the gatekeepers when it comes to reporting this kind of conduct. I know it's a difficult and unpleasant task for a lawyer to report another lawyer for misconduct. Obviously, if you have the Model Rules 8.3, you have a duty to report, in certain circumstances, unprofessionalism.

 

It probably depends on how extreme it is. I think it would have to be pretty extreme before you would have a mandatory duty to report. But I think, perhaps, because our Supreme Court has taken the lead in stressing professionalism, judicial officers down the line have taken on the onus of reporting lawyers when this kind of truly unprofessional conduct occurs in front of them.

 

So, the other topic that I wanted to briefly touch on is a pattern that I've seen in a couple of reinstatement cases. And, as I just mentioned, if a lawyer has been suspended for more than six months, or disbarred, he or she has to go through formal reinstatement proceedings. And so, I had two in fairly close proximity, temporally, that raised similar issues and made me think it's really tough to be a lawyer these days. And it's really tough to be a younger lawyer, I think.

 

So let me give you the scenarios and see what conclusions might be drawn from them. So, we'll talk about lawyer A. Lawyer A is hired right out of law school by a large, prestigious law firm. He does excellent work. He has a reputation at the firm as being a very hard worker. He's solidly on the partnership track. And he's getting lots and lots of work from multiple partners. He doesn't know how to turn down work, how to turn off the spigot.

 

So, he speaks with a senior associate at his firm about what he should do. And the senior associate says, "You need to take it as a compliment and do the work if you want to make partner." So he keeps trying to do that. And he's drowning in work. His work suffers. He becomes clinically depressed. And he almost entirely shuts down. The firm fires him. He's too embarrassed to tell his parents. So he tries to open a solo practice. But he flounders there because he's always had the infrastructure of a big firm. Plus, his depressive symptoms have not dissipated. In fact, they're worsening.

 

So he starts neglecting the clients that he has. They file bar complaints. He ignores the bar complaints. He gets suspended. And he remains deeply depressed and ashamed until one of his former colleagues from the big law firm goes a couple of days in a row and pounds on his front door, because he won't answer the door. He hardly leaves the house. And, finally, the second day, he answers the door, and the lawyer says, "You need help, and I want to help you out."

 

So he gets help. He develops a support system. He learns that managing his mental health is a priority and it's not something to be ashamed of. He was never a bad or dishonest person. But he simply didn't know who to turn to within his firm or what to do to get help. He did get reinstated. I got notice about a month ago that he completed his two years of probation successfully. And he's doing very well in a smaller firm environment where the lawyers all know about what's happened in his past and are very supportive and testified at his reinstatement hearing.

 

So, Lawyer B, somewhat similar, somewhat different. He's young. He's smart. He's ambitious. He's an associate at a medium-sized firm. But his firm's billable hour requirements are oppressive. He has no life outside work. His marriage is suffering. And so, he starts to incrementally — not so much at first — pad his hours a little bit. And then, as the firm is pressuring him to bill even more, he starts padding the hours a little bit more. And he makes some mistakes that cause him to get caught by the firm. So he gets fired. He gets suspended.

 

He stays out two years longer than his suspension term. And when he testified at his reinstatement hearing he said, "You know, I really needed to understand how I went from someone who I thought had a strong moral compass, who wanted nothing more than to be a good lawyer, how I could have done something like that." And so, in Arizona, a lawyer seeking reinstatement has to identify the "weakness" that caused their underlying misconduct. He said, "You know, I've thought about that. And I guess all I can say is greed." He said, "I wanted to be a partner. I wanted to be admired. I wanted the firm to think I was great."

 

And you've got to kind of respect that, when somebody fesses up and says that the root cause of their misconduct was greed. So, he also was reinstated, and is doing well. So, what's the moral or point of these stories? I haven't been in private practice for more than 30 years. And times have changed a lot. So, all of you understand these dynamics probably much better than I. I do know that, when I read about some of the new associate starting salaries, I also realize law firms have to be expecting a lot out of them.

 

But if you are part of a law firm or a company that has the ability to do something, it's just so important to make sure you aren't burning out good people unintentionally or creating circumstances where they feel isolated and unable to deal with either their mental health or just problems at work. I know a lot of firms have associates' committees and maybe some of you can even talk about how you manage these issues. But, to me, it's a tale of two lawyers who flamed out early in their careers, and they didn't need to.

 

Now, some of it's on them. It's not just the firm or entity. But I worry that, with all of the financial pressures that are facing lawyers these days, we may see more lawyers like this. And I would like to avoid that. But I was very impressed with both of these lawyers. And I'm glad they're back in the practice because who doesn't love a good redemption story?

 

So those are my topics. Open to any questions.

 

Hon. Jennifer Perkins:  Thank you, Judge Downie. And that is a great end to the formal remarks at a time of Christmas and redemption and positive thinking. So, we do have a couple of questions in the queue. But I'll just make a pitch. We've got about, I think, six or seven minutes. We might be able to hit a few of these. I'll kick, first to Andy, our initial question. "Must the compliance lawyer be an employee of the ABS?"

 

Andrew F Halaby:  Thanks, Judge. Under the code, the compliance lawyer must be a manager or employee. The term "manager" is not defined. And so, as a practical matter, what's been happening is that independent contractor lawyers can serve as a compliance lawyer. The regulators tend to look askance if an independent contractor compliance lawyer has too many ABS's the compliance lawyer is serving. And the regulator wants the assurance that the compliance lawyer is cloaked with the authority, manager-like authority, necessary to see to the ABS's compliance. But the answer to your question, need the compliance lawyer be an employee, is no. 

 

Hon. Jennifer Perkins:  All right. Interesting question, "Should judges be above criticism?" And then, "What are the appropriate bounds for attorneys to criticize judicial conduct or rulings? Are certain viewpoints more prone to garner discipline complaints than others?" I'm not really sure about the last question, that I would have perspective on that. But I'll take a stab at the initial part as a currently serving judge. But also, earlier in my career, I served as disciplinary counsel to our commission on judicial conduct in Arizona, which is replicated nationally. 

 

States have conduct commissions to which you can submit judicial complaints for unethical behavior. So, no, judges should not be above criticism. I think I would insert a "were there reasonable criticisms?" And so, what are the appropriate bounds for attorneys to criticize judicial conduct or rulings? I think disagreement with a ruling, even if you think it is incredibly poorly reasoned or without legal basis, that's what the appeal process is for. And it's not always a successful one. And oftentimes it ends at a discretionary review court that opts not to correct the error that you have identified.

 

But, absent the kind of unprofessional conduct that Judge Downie was referring to — belligerent or personal attacks or that kind of thing in a ruling — I wouldn't say that a complaint is the appropriate place to take on a judge's ruling. Now, judges are bound by codes of conduct. We have pretty explicit rules and comments and advisory opinions telling us the kinds of things we can and can't engage in, in terms of conduct. Anything that skirts those bounds is totally fair game for a judicial conduct complaint.

 

And I guess I'm not sure why there would be a question, really, as to why you should file that, except I understand putting your name to that -- and maybe Andy, as a practicing lawyer, has some thoughts on that. But it's a bit fraught. But something that I think I struggled with as disciplinary counsel is that most of these regimes are progressive discipline regimes. So, the first time that a judge skirts maybe just a little bit over the line is not going to garner the same kind of response that the fourth, fifth, or sixth time that happens. 

 

But if the commission never knows about any of those previous incidents, it's hard to gauge the right type of discipline for judicial misconduct. So those are my thoughts on that. We don't have any other questions. So, we've got a couple more minutes if anybody does have questions. And I'll open if Judge Downie or Andy have any thoughts on that question. Please feel free to jump in.

 

Hon. Margaret H. Downie:  I agree with everything you said, Judge Perkins. I think disagreeing with judges and their rulings is perfectly fine. I think, to the extent personalization of the criticism is not necessary, it should be avoided. And, usually, it's not personal. It's a judge made a bad decision in your mind or your client's mind. I've been a judge for 25 years, and there are instances where judges' personal views come into play. But it's so rare, in my experience in the state court system. I'm not as familiar with the federal system.

 

      So, if you can avoid personalizing the attacks, I think you're on much more solid ground. And if you need to personalize it because you have evidence of that, then that's another thing. The [inaudible 00:58:14] case is one where he didn't have evidence of the personal attacks on the judges, in certain respects. And I think that was one of the things that really bothered the Supreme Court when it reviewed the case. 

 

Hon. Jennifer Perkins:  All right. We did get a couple of questions. We'll try to take them real quick. Would anyone care to comment on excellence or wise use of AI in the practice that they've seen? We've focused on the pitfalls. I don't really use generative AI, myself, other than the one that I mentioned. You can log onto Westlaw, is what I use. And there is an AI-assisted research function that I've actually found to be useful, although you do have to keep trying your questions to make sure you're getting the correct answer. So that's a useful function that I've found. I don't know if anybody else wants to type an answer in the function or in the chat, or Andy or Margaret, if either of you have found it useful.

 

Andrew F Halaby:  So far, I use AI for letters a bit. Just based on my own experience, we're too early in the adoption of it to really help me write a brief or memo that I know you largely have to replicate with conventional tools in order to assure integrity. So, I desperately want to use it. And I'm prepared to use it. But given some of the ethics issues that you identified, Judge, most especially confidentiality, I've felt a little handcuffed in being able to make much use of it yet. So, I restrict its use to things that aren't really law dependent. 

 

Hon. Jennifer Perkins:  So, "How does criticism of judges relate to the First Amendment? Wouldn't the standard for public officials apply?" Of course, when you use the word "criticism," it's sort of like, where are you criticizing? Are you filing a complaint against a judge? Are you posting a blog? Are you tweeting? What is it that you're doing? And, generally speaking, I would say, yes, the standards for public officials apply.

 

I'm more getting at here what is maybe wise or appropriate, not what is lawful or unlawful. And I actually don't have a good answer for the last question we have. "If checking AI to text, what types of sources may be used? Will databases end up being cluttered by AI-generated articles and even cases?" I fear the answer to the second question, which is yes, depending on how the AI source retains data and is intended to learn from the data, that it may well be cluttered by problematic articles or cases. 

 

In terms of the sources to be used in the legal area, you should be checking every cite. You should have somebody that checks every citation, every case, in every pleading or brief that you file, in order to ensure that they say what the work product says that they say and that they exist. And with that, I think we're actually over a couple of minutes. So, I apologize, Jack. But we'll call it a day.

 

Jack Capizzi:  Well, thank you very much, Judge Perkins. On behalf of The Federalist Society, I want to express our appreciation to Judge Downie for joining this update today. And, of course, to Judge Perkins and Andy Halaby as well, for their contributions and help putting this event together. 

 

For anyone who is seeking CLE credit, we will email the link of the certificate of attendance to the address that you used at registration.  If you have any problems receiving this link or if you don't have any other communication with us or if you have any questions that you'd like to ask, please direct those to [email protected].  And, with that, thank you all for joining us today. I hope you all have a great holiday season, a Merry Christmas and a Happy New Year.  And with that, we are adjourned.