Introduction
Many law firms take pride in the contributions their attorneys make to the political process and their communities. In many firms, personnel make all kinds of donations, in kind and with dollars, to candidates and not-for-profit organizations. In addition, attorneys and non-lawyers alike often run for office in campaigns at all levels, although some firms (because of the issues that will be addressed in this article) have strict prohibitions against their personnel running for public office.
Many of these activities raise minimal ethical concerns in most circumstances. For example, the fact that an associate or legal assistant hands out campaign literature at the election polls rarely will be an issue (unless the candidate, for instance, uses anti-tobacco literature and the associate’s firm represents a tobacco company). Other activities, such as attorneys holding office or providing legal advice to candidates or not-for-profit organizations, more often do have both ethical and business ramifications. This article will focus upon the latter type of situation.
What is the bottom line for prudent law firms? As with many other areas involving subtle issues of ethics and judgment, it is important to have policies in place, a firm culture where adherence to these policies is important, and a designated partner to apply and police the policies in a consistent and impartial manner.
Identifying The Issue Before The Problem Arises
Of utmost importance, a firm must identify the issue before it progresses beyond the point of no return. Firms need to decide whether a particular candidate, if elected, will cause irreconcilable conflicts. For example, if a firm’s major client is a school board and a partner, if elected to a city council position, will need to take positions against the school board, the firm may decide that the attorney should not run for office if he or she is going to remain with the firm. Likewise, if a partner is elected chair of the zoning board in a jurisdiction where the firm has a thriving zoning practice, there probably will be irreconcilable conflicts. With respect to community service activities, before an associate appears on television on behalf of a neighborhood association to denounce a project being undertaken by a developer that is represented by the firm, the firm needs to be aware of the situation so that the television appearance can be stopped before it happens.
Firms which identify these issues early in the process -- before a partner mounts an expensive and time-consuming campaign and before the associate appears on television -- will be much better situated than the firm that discover the problem after the fact. Having policies in place, and educating the firm’s staff about the importance of following the policies, are critical aspects of every firm’s infrastructure.
As another example, if two attorneys want to provide legal advice to opposing candidates, it is critical that both attorneys raise the issue with the firm before any advice is given. That way, the firm can decide whether to seek consent or to inform the attorneys that one or both of them cannot provide the advice. Again, firms which have policies in place to identify these issues early, and to resolve them, are in much better shape. Otherwise, embarrassment to the law firm -- or worse -- is inevitable.
Specifying The Lawyer’s Role
It is very important that attorneys be specific about their roles, either when advising campaigns or not-for-profit organizations. Sometimes, what seems like practical advice can be deemed legal advice, especially if the attorney has not unequivocally specified that he or she is not providing legal advice. An attorney who acts as a treasurer for a candidate or a not-for-profit organization can obviate many potential conflicts ahead of time by simply specifying (preferably in writing) that he is a treasurer, and is not providing legal advice. By being specific about their roles, attorneys can also provide greater clarity regarding insurance coverage for their actions -- either under the firm’s malpractice policy or (if applicable) the organization’s directors and officers insurance policy.
Issue Conflicts
Moreover, even when the attorney is unequivocally providing legal advice to a campaign or not-for-profit group, the firm and the attorney must be sensitive to "issue conflicts." Assume, for example, that a firm does asbestos defense work, and a partner advises a candidate on damage cap legislation. Even though that legislation may not specifically apply to asbestos claims, there could be an issue conflict because of the impact of the legislation upon the firm’s asbestos clients. Similarly, an attorney, who advises a non-profit environmental organization regarding proposed EPA regulations that an existing environmental client is opposing, may have an issue conflict.
Issue conflicts are difficult enough to identify under normal circumstances, but when a firm is advising candidates or organizations on legislative issues, such conflicts are even more difficult to uncover. Again, having policies in place, and a visible designated partner to apply the policies on a consistent basis, are of paramount importance.
The Attorney/Legislator
Thus far, this article has focussed primarily upon an attorney who advises a candidate. Now I will address some of the issues a firm must consider when an attorney is a legislator.
Some firms try to dodge the ethics issues by converting the attorney to an "of counsel." As long as the attorney remains part of the firm, though, the ethics issues will still need to be addressed. Most jurisdictions have ethics rules which apply the rule of imputed conflicts -- i.e., every client (even pro bono ones) of any firm attorney are deemed, for conflicts purposes, to be a client of every firm attorney. Because of this principle, if a firm is going to resolve a conflict by having the attorney leave a firm, the departure must be bonafide and complete. Because of the imputed conflicts principle, as long as the attorney is de facto part of the firm, the conflict will remain.
But, assume that the legislator/attorney remains with the firm. The determination of whether a legislator’s actions creates a conflict with firm clients requires a close scrutiny of the nature of the legislator’s role and position that he or she is takingvis-à-vis the firm’s clients. Some conflicts can be resolved by having the legislator recuse himself from a decision, and obtaining consent from the firm’s client. For example, if firm clients appear before a city council to request a zoning variance, a partner/legislator probably can recuse himself from the decision-making process and defuse the ethics issue. In addition to analyzing the applicable legal ethics rules, however, law firms should be careful, in making this determination, to review local ordinances and statutes governing legislator conflicts of interest.
Sometimes, recusal will work. On the other hand, assume that the law firm regularly represents a major utility before the public services commission. Given the level of activity that the utility has before the commission, recusal may not be a viable alternative if a firm attorney is on the commission. In such circumstances, a conflict may be unavoidable. Moreover, the conflict can be greatly exacerbated if the partner/commissioner makes negative public comments about the firm client. Hypothetically, imagine the reaction of attorney grievance authorities if a partner/commissioner publicly accused a firm client of gouging consumers with regard to utility rate charges. Moreover, the fact that the firm only represents the client at an out-of-state office will not obviate the ethical violation.
Business And Liability Concerns
Throughout the course of this article, I have focussed upon the ethical ramifications of various actions. Even apart from ethical considerations, through, prudent law firms will also consider the business and liability aspects of these issues.
For example, even if conduct may be ethically permissible, a firm may find scant solace in that fact if a major client terminates the relationship because of public comments made by a legislator/partner or other firm personnel. By way of illustration, a law firm with developer clients may find itself representing fewer such companies if a legislator conducts a highly publicized campaign against development projects. Such a campaign might not be unethical, since the legislator/partner is not directing his campaign against a particular developer. Nevertheless, firm clients might well regard that campaign as a breach of loyalty, and decide to take their legal business elsewhere. The same loss of business can arise in countless contexts. For example, a furrier supplier might well fire a law firm whose associate is arrested for protesting in favor of animal rights by pouring ink on a mink stole.
Liability issues also must be considered in this area. Law firms that are successfully sued, by former clients and third parties, frequently have been encumbered by conflicts of interest or other arguably unethical conduct that can influence a jury in determining liability and damages. In essence, ethics issues often provide the "sizzle" that plaintiffs’ counsel can use to paint a law firm as bad actors before a jury. Just picture the closing argument by a former client that loses a government contract after a legislator/partner makes negative comments about the former client’s integrity.
Conclusion
The bottom line is that law firms and their personnel must be very sensitive to the unique ethical issues that can arise when attorneys and other employees participate in the political process or community service activities. Such participation is to be commended, but firms must be vigilant to prevent the onslaught of unintended yet serious ethical concerns. Again, having written policies, a firm culture of scrupulous adherence to such policies, and a designated partner to administer the policies in a consistent manner, will go a long way toward protecting the law firm from such ethical concerns.
Brief Author’s Biography
Jeffrey P. Ayres is a partner at Venable, Baetjer and Howard, LLP, with offices in Washington, D.C., Maryland, and Virginia. He is a member of the Editorial Board for The Law Firm Partnership and Benefits Report, and Chair of Venable’s Ethics Committee.