Introduction

The profession, the legal system and society have all traditionally seen it as a cornerstone of professional responsibility that lawyers serve each client's interest loyally, carefully and confidentially. Clients need to be able to trust their lawyers to provide advice and represent them in the legal system loyally and uninfluenced by any concern other than the client's interests. We examine lawyers’ obligations to avoid situations involving a conflict of interest between a lawyer's personal interest and their duty to a client, or a conflict of duties owed to two or more clients, in Chapter 7. Lawyers also owe a general duty of care to their clients. Many of the most common client complaints against lawyers to independent regulators relate to everyday breaches of the duty of care, such as failures of lawyers to communicate with their clients in a clear and timely manner. Gross breaches of care can be subject to disciplinary action, and clients can also sue lawyers for negligence or breach of contract if they do not take reasonable care to protect and advance their clients’ interests, and to perform their legal work competently. We discussed the complaints and discipline system in Chapter 3. The topic for this chapter is the third duty, confidentiality: the obligation to keep secret all communications made by the client to the lawyer about his or her affairs and all the information learned about the client directly or indirectly during the professional relationship (subject to various exceptions to be discussed below).

The first part of the chapter argues that strong obligations of confidentiality support the lawyer's role as zealous advocate and officer of the court, but that there must be ethical limitations in some circumstances. Next we show that the concept of confidentiality has become quite tenuous in a world of surveillance, wired for instant disclosure and based on a communication and business model which feeds on demolishing all secrecy. Lawyers, as much as anyone, are caught up in the demand for instant, widely accessible and therefore transparent communication, and can forget that their primary stock-in-trade is that secrecy. We discuss cloud computing as a case in point, and explain how to limit the risk of disclosure of cloud-stored information. Using more case studies, we then examine the proper ideals of confidentiality and client legal privilege (‘CLP’).

Introduction

The profession has traditionally seen it as a cornerstone of adversarial advocacy that lawyers serve each client's interest loyally, confidentially and carefully. As we saw in Chapter 4, the touchstone of lawyers’ professional obligations of devoted service to their clients is the trilogy of duties – loyalty, confidentiality and care; and the most strict and onerous rules in the law of lawyering relate to these duties. This chapter is concerned with the first of those duties – loyalty.

The duty of loyalty requires lawyers to avoid situations involving a conflict of interest between a lawyer's personal interest and their duty to a client; or, a conflict of duties owed to two or more clients. It also requires lawyers to refrain from using their relationship with the client as a means of making any personal gain; and they must fully disclose to their client any conflicts of interest or personal gains that do arise. These obligations apply not just to the individual lawyer but to the whole firm: if one lawyer cannot act for a potential client because of a conflict of interest, then usually the whole firm cannot act. These are ‘fiduciary’ obligations set out and enforceable in the law of equity and also reinforced in professional conduct rules and disciplinary decisions. In addition to being sued by their clients for breach of these obligations at general law, lawyers can also be disciplined for misconduct.

The duty of loyalty is a virtue ethics concept and can be based in either or both adversarial advocacy and responsible lawyering. Adversarial advocacy assumes that clients need to be able to trust their lawyers to provide advice and represent them in the legal system completely uninfluenced by any concern other than the client's interests. A narrow adversarial advocacy conception of the duty of loyalty would see the client's interest as the touchstone of the duty. This means that as long as the client's interests are not actually harmed, then it might be possible to ‘cure’ a potential conflict through measures such as client consent or information barriers (discussed further below). On an adversarial advocacy approach, the duty of loyalty also might not survive the ending of the lawyer-client relationship to the extent that the lawyer is no longer obligated to further the client's interests.

Introduction

This chapter considers how the structure and processes of the regulatory systems that govern the legal profession are relevant to lawyers’ ethics and behaviour – that is, the significance of ‘institutions’ for lawyers’ ethics. Traditionally, as we shall see, the legal profession self-regulated on the basis of blind confidence that any misbehaviour by lawyers was an individual anomaly, while the culture and practices of the profession as a whole were ethical. Most lawyers probably spend more time thinking about their personal ethics than the way the legal profession as a whole is structured and regulated. But the ethical character of lawyers’ practices does not depend on personal factors alone. In practice, personal ethical decisions will either be supported or undermined by the surrounding ‘institutional’ ethical culture and processes in which they are embedded. Personal ethics will be influenced by institutional constraints such as who sets and enforces the rules that govern the legal profession; what ethical and conduct issues the rules address; what values are represented in what the rules say; and whose interests are promoted, and whose are ignored, in those rules – the interests of lawyers, clients, the community or the profession?

In this chapter we consider two principal ways in which the ethics demonstrated by the legal profession as a whole are likely to impact on lawyers’ individual and personal ethics. First, we consider the ethical dimensions of different models of regulation of the legal profession – self-regulation, co-regulation and independent regulation. Secondly, we focus on a particular issue where institutional and personal ethics interact with one another – the use of interest on clients’ trust account balances.

The previous two chapters introduced different ways of thinking about which values should characterise legal practice – and therefore any regulatory system for lawyers. In the following chapters we will look at a number of specific topics or areas and examine in more detail what these quite different approaches might mean, and which values would be appropriate to apply in these different contexts. In doing so we will critique the extent to which the rules and regulations as they currently stand do a good job of demonstrating the right values, and how these rules and regulations influence individual lawyers’ capacity to put different values into action in practice.

Introduction

While the work of lawyers can ensure ‘law is still the most powerful instrument for creating and maintaining a world that is free, rational and just’, it can also have a dark side. Global tobacco companies, with the help of both their in-house and external lawyers, continue their fight against tobacco control measures such as bans on advertising and plain packaging. Indeed, a recent decision by an arbitral tribunal at the Permanent Court of Arbitration found Philip Morris Asia's challenge to Australia's plain packaging laws to be an ‘abuse of rights’, essentially because it amounted to impermissible forum shopping. Other revelations, such as the Panama Papers leak, show how lawyers and law firms sometimes help wealthy individuals evade tax and engage in other illegal conduct through shell companies, strategic use of different regulatory regimes in different countries and the use of confidentiality and privilege. It has been suggested that many corporate lawyers (by which we mean both in-house and external lawyers advising corporations) are ‘ethically apathetic: neither good nor bad, but rather indifferent and unenthusiastic when it comes to the ethics of what they do and the impacts their work may have’. Sometimes it seems that enthusiasm is reserved only for a client service ethos. In 2005, the large national Australian law firm, Allens Arthur Robinson (‘Allens’) won the Business Review Weekly – St George ‘Client Choice’ awards for being best large law firm, and also best large professional services firm of the year. The managing partner was quoted explaining how the firm had won these accolades:

This subservient attitude has obvious negative impacts on lawyers’ own wellbeing, their ability to engage in caring relationships with their friends and families and to spend time cultivating their own personal ethical and political beliefs. It also means they have little free time and thought to devote to learning about and coming to an opinion on important social, environmental and justice issues and getting involved in action on those causes.

Introduction

Television and movies often portray criminal practice as the most glamorous speciality within the legal profession. In fact it is among the least attractive to most new lawyers – probably because defending accused criminals can be seen as repulsive and mostly low paying. Yet it is for these very reasons that the criminal defence advocate is usually taken as the paradigmatic example of the reason why adversarial advocacy is necessary, is ethically justified and is fully deserving of our admiration. As one senior barrister puts it:

Because the potential sanctions for criminal offences, such as deprivation of liberty, are so serious and the resources and capacity of the state to investigate and prosecute crimes so vast, our system assumes and insists that an accused should always have the opportunity to ‘put the Crown to proof’ of any charges brought against the accused. This effectively holds the state (including the police and other prosecutors) accountable by making sure that they have strong enough evidence to justify a court deciding to convict. It also maintains the integrity of the criminal justice system by making sure that the accused is treated fairly.

While there are unfortunately a few examples of dodgy lawyers in this area of the law as much as in others, and we must teach by reference to the cases which highlight these issues, we are completely convinced of the moral authority and examples set by the notable advocates who can and do represent ‘undesirable’ or high profile defendants, in the interests of public confidence in the justice of the overall system. The lawyers who represent, for example, alleged terrorists, or alleged paedophiles, or those whom media and commissions of inquiry consider have protected these defendants, receive only limited support from the general public. It is for this reason if no other that they deserve the complete support of the wider legal profession.

Introduction

Lawyering in the 21st century is now a complex mix of skills, knowledge, experience and ethics. While all these are obviously important for successful practice, it is the ethical zone that ultimately defines reputable lawyers and separates them from those who are merely successful – if it is fair to draw that distinction! As a concept, reputation is elusive and hard to analyse in a short introduction. But one vital element of reputation is the notion of sound ethical judgement; the capacity of a modern lawyer to understand and choose wisely between contrasting ethical frameworks before making a difficult decision. In this task, it is vital to appreciate that the various alternatives to adversarial advocacy are compelling and cannot be considered as merely of secondary importance. In this chapter, we explore those different approaches and explain why it is frequently appropriate to assess all alternatives together for their possible impact.

Different approaches to lawyers’ ethics

There are four main strands of ethical reasoning or considerations specific to lawyers in the context of Australian legal institutions: adversarial advocacy (discussed in the previous chapter); responsible lawyering; moral activism; and ethics of care. These four types are set out in this book as ‘ideal types’ that emphasise what is distinctive about each approach. (Table 2.1 sets out a summary of the four types.) These four types are reflected in applied ethics scholarship and in the commonsense ‘folk practices’ of lawyers, and share concepts with more general methods of moral reasoning. Each emphasises a different value (or bundle of values) that lawyers could or should serve in legal practice.

It would be over-simplistic to seek to brand most individual lawyers or applied legal ethics scholars as following one type or another. Just as many of us call unconsciously on more than one moral framework to justify our behaviour, the four different types tend to complement one another and build on an understanding of those moral frameworks introduced in Chapter 1. In order to develop ethical judgement, it is good to consider a scenario or issue from all points of view, and the four types, augmented by general moral analyses, are helpful in doing that. In many situations all four types will lead to agreement on the right thing to do.

Introduction

As we saw in the previous chapter, the different roles of criminal defence and prosecution lawyers are clearly delineated by the very nature of a criminal trial as a public forum for determining guilt and innocence and upholding the Rule of Law. In civil litigation, however, the nature of the process and the roles and responsibilities of the lawyers are more ambiguous. Lawyers play a number of roles in civil matters which can range from aggressive advocacy in fully litigated civil trials to deal-maker and representative in negotiating the legal structure of multi-party collaborative commercial projects. Lawyers may act on behalf of clients in formal mediation or informal negotiations to settle civil matters. They may also provide advice, guidance and practical help in pro-actively managing and structuring commercial, domestic or governmental transactions and affairs to avoid disputes.

There is a public interest in maintaining the fairness and justice of the court system and the legal decisions emanating from that system. Lawyers therefore have an overriding duty to the administration of justice. In recent times it is also increasingly recognised that there is a public interest in the encouragement of efficient and efficacious dispute resolution without recourse to court where possible. Therefore, even in private negotiations and alternative dispute resolution, lawyers have a duty to the administration of justice, grounded in responsible lawyering.

Lawyers are also, however, representatives of their clients who have a private interest in having disputes concluded in certain ways. When a person needs to use a lawyer, they are often in the midst of conflict and not always at their most altruistic or rational. The work that clients ask their lawyers to do may be aimed at cutting across the interests and positions of other people. People need lawyers precisely because of the conflicts we face as we live together in society. Surveys show that people tend to be critical of lawyers in general but very favourable towards their own lawyer: they condemn lawyers for doing for others what they praise them for doing for themselves – being adversarial advocates.

Introduction: ethics and lawyering

In this third edition we return to and strengthen our concept of underlying lawyers’ ‘types’, as a way of explaining why good ethical decisions involve not just the application of a legal framework – such as the professional conduct rules and case law – but also a working understanding of moral philosophy, otherwise known as general morality. In prior editions, we showed how an individual lawyer's preference for a particular type or approach to making ethical decisions (for example, adversarial or zealous advocacy) influenced their thinking about ‘the right thing to do’ in any particular situation. That approach seems to be helpful to the law students and new lawyers whom we encounter. But times are changing.

Legal practice is becoming more difficult, both financially and in terms of lawyers’ personal stress levels. Some medium sized and many smaller firms are operating only at the margins of profitability. Artificial intelligence technology and globalised outsourcing of legal tasks are steadily reducing the number of entry-level legal jobs, and lawyers appear to be more obviously under sustained mental health pressure. And yet new lawyers are adaptable and many are optimistic. Whether in firms, corporations or government, lawyers everywhere are realising that their capacity to truly serve complex clients and complex scenarios, as well as make a living, depends on an understanding of social forces beyond legal practice and the capacity to think through ethical obligations.

It is no longer realistic, if indeed it ever was, for a lawyer to practise without regard to major social and economic trends, particularly those that are reflected in political policy. Foremost among these, in our opinion, is the emerging shift away from economic neo-liberalism, under which much lawyering has expanded for five or more decades, and towards a slow recognition that sustainable legal practice is becoming a lower-growth phenomenon than we have been used to. We are persuaded that less growth and more ethics is the sustainable future for lawyering, and is needed in a deteriorating climate and biosphere, if there is to be economic, social and cultural justice in the decades ahead. Our position is of course a highly value-laden position – and will probably be contested – but it does inform our choice to include, for example, a short section on ‘earth lawyering’ in this chapter, and to introduce similar elements into the discussion on corporate lawyers in Chapter 9.

Introduction

Legal fees and access to justice

Clients are more likely to complain about their lawyers’ fees and costs than any other issue, and even the most conscientious lawyers have trouble explaining fees to clients and controlling their growth. Successful lawyers are effective in managing the communication process so that costs are paid on time, but that communication has many elements and some common pitfalls. Typical complaints include that the lawyer has failed to make proper disclosure of likely costs at the commencement of the matter, failed to provide a written bill, failed to provide an itemised bill when requested by the client, failed to provide an updated estimate, or has charged for the preparation of an itemised bill (even though clients have a right to request one). Deliberate ‘gross’ over-charging also features prominently among client complaints, as does the withdrawal of costs from a client's trust account without their permission, or the deduction of fees in the absence of a proper bill. In all these matters, small individual clients are especially vulnerable. Corporate clients are in a better position to complain effectively about costs because of their greater capacity to deny ongoing work to a lawyer who is seen to be price-gouging. Not surprisingly, clients complain about lawyers who have the temerity to charge costs for litigated matters that amount to more than the amount actually recovered in the litigation. Also featuring prominently among client complaints about lawyers are complaints about excessive hourly billing rates and exploitation of ‘no-win, no-fee’ agreements. There is considerable potential for clients to think that ‘no-win, no-fee’ means exactly that, whereas it is clear that a client's disbursements (out of pocket expenses) and, as we outline below in the section ‘Fees and costs in litigation’, the reasonable legal costs of the other party will generally be paid by a losing client. Clients routinely complain that they have been promised that they will incur no fees unless they win, but find themselves losing and either having to pay the costs of the other side or disagreeing with their lawyer about whether there has been a ‘win’.

One Queensland lawyer was suspended for 12 months for gross over-charging for billing a ‘no-win, no-fee’ client $300 per hour plus a premium of 25% for all work done by any employee of the firm, from partner to paralegal to secretary.

It is very encouraging to be publishing a third edition of this book in response to the confidence of our publishers and reviewers, and especially the teachers and students who have explored our earlier editions. This new edition includes substantially revised chapters and new case studies, and more purposefully comes to grips with the contributions of general morality to the increasingly diverse and complex ethical challenges facing law students and new lawyers.

The Uniform Law for lawyers is now in force in major Australian States and its influence is gradually extending to other jurisdictions, particularly in the widespread adoption of standard rules of professional conduct: The Australian Solicitors’ Conduct Rules. As with our approach in prior editions, we have attempted throughout not just to state and describe conduct rules and ethics-related case law, but to analyse and criticise them in terms of their purpose, design, implementation and enforcement, in light of the multifaceted role of lawyers in society as adversarial advocates, responsible officers of the court, champions of justice and caring professionals. At the time of writing this Preface, the Federal Immigration Minister has publicly asserted that lawyers acting for detained asylum seekers are ‘un-Australian’. In doing so, he ignores and denigrates the centuries-old examples of lawyers who have stood up against government oppression in the interests of justice. In our view, those examples and that tradition of lawyer independence remain central to the essence of modern legal ethics. Our emphasis therefore continues to be on the greater moral purposes of legal practice, and we remain convinced that those purposes – particularly as they can impact on major existential challenges such as global warming, corruption and human rights – are even more important to new lawyers’ emotional and spiritual sustainability; and at least as important as the rapidly changing nature of legal work and workplaces.

So, to paraphrase what we said in the Preface to our second edition, we remain convinced that the best hope for the moral and ethical future of our lawyers, and hence our legal system, is for law students and new lawyers to learn early about how to connect their humanity with their engagement in passionate and reasoned lawyering. We hope this third edition again makes these connections.