Spring 2016 | Page 38

ETHICS OPINION 16-02, continued The lawyer’s independent professional judgment is governed by Rule 5.4(c), N.D.R.Prof. Conduct, which provides limitations on permitting a third party to interfere with the lawyer’s professional judgment and obligation to his client, even if the third party is paying the lawyer’s fee. The North Dakota Rules of Professional Conduct are consistent with the A.B.A. Model Rules of Professional Conduct 1.6(a), 1.7(a)(2), (b)(1)(4), 1.8(f ), and 5.4(c). Minnesota reflects similar requirements under M.R.P.C. 1.6(a), 1.7(a)(2), (b) (1)(4), 1.8(f ), and 5.4(c). Although this matter has not come before the Court in North Dakota, other states with similar codes of professional conduct have held that a third party paying for attorney fees is not a conflict of interest per se. The Pennsylvania Rules of Professional Conduct recognize that lawyers are frequently asked to represent a client in circumstances where a third party will pay the attorney fees. Cohen v. Oasin, 844 F. Supp. 1065, 1068 (E.D. Pa. 1994). Courts in both Louisiana and Massachusetts have denied motions to disqualify attorneys under each state’s 1.8(f ) rule. In Devaney, the court stated “it is not apparent that the mere fact of [a third party] paying counsel’s fees should count as an actual conflict.” Devaney v. U.S., 47 F. Supp. 2d 130, 132 (D. Mass. 1999). Likewise, in Leleux, the argument that the attorney’s representation was in violation of La. R. Prof. Conduct 5.4(c), 1.8(f ) and 1.7(a)(2) merited “little discussion,” as there was no evidence that the lawyer’s independent professional judgment was affected by the third party paying his fees. LeleuxThubron v. Iberia Parish Gov’t, Civil No. 6:13-0852, 2015 WL 339617 at *9 (W.D. La. Jan. 23, 2015). In re Duke Investments, Ltd. states: “Ultimately, it is the lawyer’s responsibility to determine ‘whether a conflict of interest exists,’ and it ‘is primarily an issue to be resolved between lawyer and client.”’ In re Duke lnvs., Ltd., 454 B.R. 414, 426 (Bankr. S.D. Tex. 2011) (quoting Marin v. Gilberg, No. V-07-62, 2008 WL 2770382, at *3 (S.D. Tex. July 11, 2008)). 38 THE GAVEL In this case, Party A may pay the attorney’s fees on behalf of Party B once the lawyer has determined there will be no interference with his independent professional judgement and the client consents. After undertaking representation, the lawyer for Party B is then obligated to abide by all of the rules set forth in the N.D.R.Prof. Conduct, paying particular attention to those rules that provide for confidentiality of Party B and the lawyer reasonably believes that his representation of Party B will continue to remain adversely unaffected by Party A. CONCLUSION Client consent is required after a discussion about the payment arrangements. Written consent is strongly suggested. The lawyer must determine that there will be no interference of his independent professional judgment and there will be no adverse effect on his representation of Party B, despite his attorney fees being paid by Party A. Once both of those requirements are met, the lawyer must maintain confidentiality in his representation of the client and abide by the N.D.R.Prof. Conduct. This opinion was drafted by Ward K. Johnson II, and was unanimously approved by the Ethics Committee on the 17th day of February, 2016. This opinion is provided under Rule 1.2(B), North Dakota Rules for Lawyer Discipline, which states: A lawyer who acts with good faith and reasonable reliance on a written opinion or advisory letter of the ethics committee of the association is not subject to sanction for violation of the North Dakota Rules of Professional Conduct as to the conduct that is the subject of the opinion or advisory letter.