Ethical Perils in the Probate Process

In Michigan, the Michigan Rules of Professional Conduct (MRPC)[1] provide the ethical framework for lawyers and those who work with lawyers in their practice.  The MRPC set forth some requirements that are mandatory and others that are permissive.  The MRPC work in conjunction with obligations imposed by statute, case law and court rule. 

The MRPC are interpreted through ethics opinions produced by the State Bar of Michigan Committee on Professional and Judicial Ethics.[2]  The Committee, responding to a request by an attorney to interpret prospective conduct only, issues informal opinions.  These opinions are denoted "RI".  The Committee also issues formal opinions, denoted "R" for matters that have wide reaching interest to the entire bar.  Ethics opinions do not have the force of law.  They will not offer a complete defense to a charge of ethical impropriety.  They do, however, offer a touchstone for proper conduct – giving guidance to help resolve issues of professional responsibility.

The State Bar of Michigan Board of Commissioners has also adopted Role of Nonlawyers in Law Practice: Guidelines for the Utilization of Legal Assistant (Guidelines).[3]  These Guidelines cover the conduct of legal assistants and other nonlawyer assistants. 

A legal assistant is defined in the State Bar of Michigan Bylaws as "[a]ny person currently employed or retained by a lawyer, law office, governmental agency or other entity engaged in the practice of law, in a capacity or function which involves the performance under the direction and supervision of an attorney of specifically delegated substantive legal work, which work, for the most part, requires a sufficient knowledge of legal concepts such that, absent that legal assistant, the attorney would perform the task, and which is not primarily clerical or secretarial in nature . . ."  Article 1, Section 6 of the State Bar of Michigan Bylaws.

The Guidelines direct that a lawyer shall "make reasonable efforts to ensure that the conduct of a legal assistant under the lawyer's direct supervision is compatible with the lawyer's professional obligations under the Michigan Rules of Professional Conduct."  Guideline 1, Guidelines, supra.  These efforts, among other areas, should include training about communications with persons other than the lawyer's clients.  This requirement is compatible with MRPC 5.3 which provides:

Rule 5.3 Responsibilities Regarding Nonlawyer Assistants.

With respect to a nonlawyer employed by, retained by, or associated with a lawyer:

(a) a partner in a law firm shall make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that the person's conduct is compatible with the professional obligations of the lawyer;

(b) a lawyer having direct supervisory authority over the nonlawyer shall make reasonable efforts to ensure that the person's conduct is compatible with the professional obligations of the lawyer; and

(c) a lawyer shall be responsible for conduct of such a person that would be a violation of the rules of professional conduct if engaged in by a lawyer if:

(1) the lawyer orders or, with knowledge of the relevant facts and the specific conduct, ratifies the conduct involved; or

(2) the lawyer is a partner in the law firm in which the person is employed or has direct supervisory authority over the person and knows of the conduct at a time when its consequences can be avoided or mitigated but fails to take reasonable remedial action.

This rule is established to insure that the nonlawyer assistant "does not engage in conduct incompatible with the professional obligations of the lawyer, or engage in conduct that would be a violation of the Michigan Rules of Professional Conduct if engaged in by a lawyer." Ethics Opinion R-1.

There is an overarching concern raised in MRPC 5.5 that "a lawyer shall not assist a person who is not a member of the bar in the performance of activity that constitutes the unauthorized practice of law."  MRPC 5.5(b).  As the comment to this rule indicates, this rule does not prohibit the employment of or delegation of work to para-professionals.  The lawyer, in light of the mandates of MRPC 5.3, must supervise the work done by the paraprofessional.

A lawyer may assign responsibility to a legal assistant for conducting legal work.  The tasks assigned must be in line with the legal assistant's experience and training.  The lawyer must supervise the work and review the work product before it is disseminated outside of the law firm.  It must be clear that the legal assistant is participating in the work as a non-lawyer.  The legal assistant must neither convey to persons outside of the law firm a legal opinion nor discuss the legal effects, rights, responsibilities or obligations regarding the outside person's particular legal matter.  The legal assistant may not appear on behalf of another person or entity in legal proceedings in court or as part of discovery unless permitted by law.  Guideline 2, Guidelines, supra.

A.  DISTINGUISHING BETWEEN PRIVELEGED AND NON-PRIVILEGED COMMUNICATIONS

Who is the client

Before turning to what is privileged and non-privileged communication, it is necessary to look at who is the client.  For without knowing who the client is, it will be impossible to tell for whom any privilege might apply.

MCL 700.3715(w) specifically allows a personal representative to "employ an attorney to perform necessary legal services or to advise or assist the personal representative in the performance of the personal representative's administrative duties."  In an estate administration setting where an attorney represents the personal representative, the client is not the estate, but rather, the personal representative.  Becht v Miller, 279 Mich 629 (1937), In re Grover's Estate, 233 Mich 467, Ethics Opinions R-10, RI-85 and RI-156.

The attorney's obligations do not specifically run to the heirs.  As Ethics Opinion RI-85 observes "although potential heirs may benefit from the estate, the lawyer owes no lawyer-client duties to the heirs. The lawyer may not pursue any action or proposal which conflicts with the duties the lawyer has undertaken on behalf of the personal representative acting as fiduciary."

Confidentiality of Information

MRPC 1.6 addresses the issue of maintaining client confidences in the lawyer-client relationship.  As discussed above, the nonlawyer assistant plays a critical role in maintaining confidences and secrets that clients reveal through the course of the representation. 

MRPC 1.6 provides:

Rule 1.6 Confidentiality of Information.

(a) "Confidence" refers to information protected by the client-lawyer privilege under applicable law, and "secret" refers to other information gained in the professional relationship that the client has requested be held inviolate or the disclosure of which would be embarrassing or would be likely to be detrimental to the client.

(b) Except when permitted under paragraph (c), a lawyer shall not knowingly:

(1) reveal a confidence or secret of a client;

(2) use a confidence or secret of a client to the disadvantage of the client; or

(3) use a confidence or secret of a client for the advantage of the lawyer or of a third person, unless the client consents after full disclosure.

(c) A lawyer may reveal:

(1) confidences or secrets with the consent of the client or clients affected, but only after full disclosure to them;

(2) confidences or secrets when permitted or required by these rules, or when required by law or by court order;

(3) confidences and secrets to the extent reasonably necessary to rectify the consequences of a client's illegal or fraudulent act in the furtherance of which the lawyer's services have been used;

(4) the intention of a client to commit a crime and the information necessary to prevent the crime; and

(5) confidences or secrets necessary to establish or collect a fee, or to defend the lawyer or the lawyer's employees or associates against an accusation of wrongful conduct.

(d) A lawyer shall exercise reasonable care to prevent employees, associates, and others whose services are utilized by the lawyer from disclosing or using confidences or secrets of a client, except that a lawyer may reveal the information allowed by paragraph (c) through an employee.

The comment to this rule provides the context for the typical application of the rule:

Almost without exception, clients come to lawyers in order to determine what their rights are and what is, in the maze of laws and regulations, deemed to be legal and correct. The common law recognizes that the client's confidences must be protected from disclosure. Upon the basis of experience, lawyers know that almost all clients follow the advice given and that the law is upheld.

A fundamental principle in the client-lawyer relationship is that the lawyer maintain confidentiality of information relating to the representation.  The client is thereby encouraged to communicate fully and frankly with the lawyer even as to embarrassing or legally damaging subject matter.

Comment to MRPC 1.6.

There are two related bodies of law that deal with the principles of confidentiality.  "[T]he client-lawyer privilege (which includes the work-product doctrine) in the law of evidence and the rule of confidentiality established in professional ethics. The client-lawyer privilege applies in judicial and other proceedings in which a lawyer may be called as a witness or otherwise required to produce evidence concerning a client. The rule of client-lawyer confidentiality applies in situations other than those where evidence is sought from the lawyer through compulsion of law." Comment to MRPC 1.6.

Generally, the information that a client provides in the course of representation should be maintained in confidence unless the client authorizes disclosure or disclosure is permitted or mandated under the ethical rules or requirement of the court.

Looking at the lawyer-client privilege in the context of the laws of evidence, courts have held that the communications covered by the attorney-client privilege survive the death of the client.   Lorimer v Lorimer, 124 Mich 631 (1950), citing  Chirac v. Reinicker, 24 US 280 (1826). ("The general rule is not disputed that confidential communications between client and attorney are not to be revealed at any time. The privilege, indeed, is not that of the attorney, but of the client, and it is indispensable for the purposes of private justice. Whatever facts, therefore, are communicated by a client to counsel, solely on account of that relation, such counsel are not at liberty, even if they wish, to disclose, and the law holds their testimony incompetent.")

There is a noted exception to this general proposition when it comes to will contests.  The Michigan Supreme Court in Eicholtz v Grunewald, 313 Mich 666 (1946)  discussed the overall nature of the attorney-client privilege, articulating that the privilege surrounding the creation of a person's will is only the client's to waive during his or her lifetime.  The Court went on to say that the "privilege could only by waived [after the client's death] by the administrator for the protection of the estate, and not for the dissipation or the diminution thereof." Eicholtz, at 671, citing McKinney v. Kalamazoo-City Savings Bank, 244 Mich. 246, 253 (1928). Further noting that "[t]he great weight of the authorities and the text-writers is that communications between attorney and client during the preparation of a will are not privileged. This rule, where the contest is between parties not strangers to the estate, appears to be universal, except where a statute controls." Eicholtz, at 672, citing In re Loree's Estate, 158 Mich. 372, 377 (1909).

There are moments in the representation that may lead to the unintended waiver of the attorney-client privilege.  Often at the start of the case, the whole family or one side of the squabbling parties in a contested estate setting will want to come and meet.  If the client is going to be just one or a limited number of the parties at the meeting, the discussion should be just with those people that will be the client.  To have other non-clients present during the meeting will make it very difficult to latter assert that the attorney-client privilege should  protect that conversation.

Maintaining client confidences and secrets is the other aspect of confidentiality contemplated under MRPC 1.6.  If a legal assistant meets with a prospective client and that prospective client provides confidential information to the legal assistant, a duty that is binding on the lawyer to maintain the confidences imparted arises.  In reviewing the requirements of MRPC 1.6 (d) and 5.3, the Committee opined that the result is the same even if the attorney never meets with the prospective client and that the confidences are only shared with the legal assistant.  See Ethics Opinion RI-123.

It is a better practice to be overprotective of a confidence imparted.  Giving out information on a client or even the fact that the person is a client at all may run afoul of the duties imposed under MRPC 1.6.

Joint representation, say of co-personal representatives, in addition to the complexity of potential conflict of interest, poses unique issues for handling confidential information.  It is critical to know from the beginning of the representation how confidences and secrets are to be shared or maintained.  Without having had the discussion about the handling of confidences at the very beginning of the representation, significant problems will arise if one client seeks to reveal confidences during the course of the representation.

B.  WHEN THE CLIENT ASKS FOR LEGAL ADVICE – KNOWING HOW TO SAY "NO"

Throughout the representation, it is important to be clear about the role in which you come to the case.  If a client is uncertain whether a person is a legal assistant or an attorney on the case, both legal assistant and attorney have an affirmative duty to clarify the assistant's role.

"In Michigan, it is not unauthorized practice of law for a nonlawyer to engage in legal research, investigation, client or witness interviews, or in other tasks in which the nonlawyer performs as a courier (e.g., services of process, notary public) or conduit (e.g., relay of offers of settlement, tracking case dockets, scheduling meetings)."  Comment to Guideline 2, Guidelines, supra.

A lawyer may not have a legal assistant establish the attorney client relationship or the fee arrangement with a client.  Guideline 3, Guidelines, supra.  The lawyer must evaluate the scope of the representation, any limitations to be imposed, and actual or potential conflicts.  These tasks are non-delegable.  See MRPC 1.2, 1.5 and 1.16.

The Comment to Guideline 3 notes that legal assistants "may play a valuable role by participating in initial client interviews, gathering background information from the client and others, preparing initial drafts of fee agreements, and performing other tasks incidental to establishment of the lawyer-client relationship. RI-123, RI-128. The lawyer may not delegate responsibility to a nonlawyer for deciding whether the representation will be undertaken." Comment to Guideline 3, Guidelines, supra.

The Michigan Supreme Court in State Bar v. Cramer, 399 Mich 116 (1976) held that it was the unauthorized practice of law for a nonlawyer to offer particular legal advice to a third party.  A legal assistant may discuss his or her research and strategic approach to the case internally to others in the law firm.  Ultimately, the lawyer should convey these outcomes, strategies and discussions to the client.  MRPC 1.2(a) and (b), 1.4and 5.4(c).  After the lawyer has approved, the legal assistant may disseminate the advice from the lawyer to third parties.

"As long as the work product of the legal assistant is supervised and reviewed by the lawyer, and conveyed over the lawyer's name, a legal assistant may draft preliminary pleadings, settlement agreements, contracts, wills or any other legal document. Drafts that have not been adopted by the lawyer should not be conveyed to anyone outside the law office. It is improper for a legal assistant to sign the lawyer's name to a legal document, even with the lawyer's direction and consent. See MRPC 4.1; MCR 2.114. The legal assistant may sign the lawyer's name to correspondence at the direction of the lawyer, as long as the lawyer has authorized and reviewed the correspondence and the correspondence shows that the legal assistant signed the correspondence at the lawyer's direction." Comment to Guideline 2, Guidelines, supra.

MCL 600.916(1) provides in part:

A person shall not practice law or engage in the law business, shall not in any manner whatsoever lead others to believe that he or she is authorized to practice law or to engage in the law business, and shall not in any manner whatsoever represent or designate himself or herself as an attorney and counselor, attorney at law, or lawyer, unless the person is regularly licensed and authorized to practice law in this state. A person who violates this section is guilty of contempt of the supreme court and of the circuit court of the county in which the violation occurred, and upon conviction is punishable as provided by law.

The statute itself does not identify the kinds of conduct that will be considered the unauthorized practice of law.  The case law has helped shape the definition of what is the practice of law.

The Bankruptcy Court for the Eastern District of Michigan in In re Pinkins, 213 B.R. 818 (ED Mich 1997), reviewed the conduct of legal assistants in a bankruptcy law firm and concluded that the legal assistants had engaged in the unauthorized practice of law.  The legal assistants engaged in the following prohibited conduct:

1.      Defining and explaining legal concepts and legal terms of art to clients.

2.      Rendering legal advice that is particular to the client's circumstance.

3.      Helping the client determine the course of legal action to take without the direct involvement of the attorney during the consultation.

4.      Using the legal assistant's sole judgment to decide which questions to refer to an attorney and which questions to attempt to answer without input from the attorney.

5.      Signing the retention letter instead of the attorney signing.

In light of the violations of the unauthorized practice of law prohibition, the Court denied all fees attributable to the legal assistants' work in the cases before the Court.

This case highlights the importance of not overstepping the bounds from legal assistant to lawyer.  It is our general nature to be helpful to our clients.  It is, however, critical to the conduct of an ethical practice not to cross beyond the role of assistant.

C.  PROTECTING YOUR FIRM FROM MALPRACTICE ACTIONS – TOOLS YOU CAN USE TO MEET DEADLINES

The timelines and deadlines for the administration of a probate estate must be followed to meet the requirements of the law, the ethical requirements and to keep the client satisfied.  Below you will find some checklists that may prove useful in meeting the obligations imposed through the administration of an estate.

These are general guidelines.  Each case requires independent analysis and evaluation to confirm the necessity/desirability of any particular step or approach.

Summary Proceedings List

·  Decedent Name:  ___________________

·  Date of Death: ___________________

·  County of Death:  ___________________

·  Will:  Yes    No     Date: ___________________

·  Codicil:  Yes              No   Date:  ___________________

·  Case Appropriate for Summary Proceedings:  Yes     No

·  PR Appointment Date:  ___________________ 

·  Date LOA expires:  ___________________

·  Serve Letters of Authority on Interested Persons 14 days after PR appointment  See MCR 5.304:  ___________________

·  Serve Notice Regarding Attorney Fees and fee agreement 14 days after PR appointed or attorney retained, whichever is later See 5.304 and 5.313:  ___________________

·  Serve Right to Election Notice to Surviving Spouse 28 days after PR appointed  See MCL 700.3505(5) and MCR 5.305: ___________________

·  Serve Inventory and present information to compute inventory fee to Court 91 days after PR appointed See MCL 700.3706 and MCR 5.307: ___________________

·  Surviving Spouse election must be made 63 days after claims period runs or 63 days after inventory served on spouse, whichever is later  See MCL 700.2202 and MCR 3.505:  ___________________

·  File Final Income Tax Return – 15^th day of fourth month after decedent's fiscal year (April 15 for calendar year filers):  ___________________

·  Sworn Statement to Close served on distributees, creditors, others with right to receive:  ___________________

·  Sworn Statement to Close filed with Court: ___________________

·  Obtain Certificate of Completion 28 days after filing Sworn Statement to Close:  ___________________

·  Termination of PR authority 1 year after Sworn Statement to Close filed:  ___________________

·  File Closing Date:  ___________________

Unsupervised Estate Administration List

·  Decedent Name:  ___________________

·  Date of Death: ___________________

·  County of Death:  ___________________

·  Will:  Yes    No     Date: ___________________

·  Codicil:  Yes              No   Date:  ___________________

·  Case Appropriate for Unsupervised Administration:  Yes     No

·  PR Appointment Date:  ___________________ 

·  Date LOA expires:  ___________________

·  Serve Letters of Authority on Interested Persons 14 days after PR appointment  See MCR 5.304:  ___________________

·  Serve Notice Regarding Attorney Fees and fee agreement 14 days after PR appointed or attorney retained, whichever is later            See 5.304 and 5.313:  ___________________

·  Serve Right to Election Notice to Surviving Spouse 28 days after PR appointed  See MCL 700.3505(5) and MCR 5.305: ___________________

·  Serve Inventory and present information to compute inventory fee to Court 91 days after PR appointed See MCL 700.3706 and MCR 5.307: ___________________

·  Surviving Spouse election must be made 63 days after claims period runs or 63 days after inventory served on spouse, whichever is later  See MCL 700.2202 and MCR 3.505:  ___________________

·  File Final Income Tax Return – 15^th day of fourth month after decedent's fiscal year (April 15 for calendar year filers); Establish other timeline for tax issues:  ___________________

·  Pay Inventory fee no later than 1 year after LOA issued to PR See MCR 5.307:  ___________________

·  File and serve Notice of Continued Administration within 28 days after anniversary of PR appointment See MCL 700.3951:  ___________________

Creditor Items

·  Creditor Claims Notice publication date  See MCL 700.3801 and MCR 5.306:  ___________________

·  4 months after publication date (Send notice to known creditors, claims bar date for unknown creditors) See MCL 700.3801, 700.3803 and 700.3807:  ___________________

·  Known creditor bar date – 4 months after date of creditor claims publication or 1 month after notice to known creditor, whichever is later  See MCL 700.3803:  ___________________

·  Response to creditor claim due 63 days after last date for presentment of claim or 63 days after appointment of PR, whichever is later.  No response is deemed allowance of claim See MCL 700.3806: ___________________

·  Claimant must file proceeding on denied claim 63 days after PR mails notice of disallowance of claim See MCL 700.3804 and 700.3806: ___________________

·  General claim bar for known claim where notice not given is 3 year from DOD See MCL 700.3803: ___________________

Closing the Estate

·  Sworn Statement to Close served on distributees, creditors, others with right to receive (As soon as 5 months after appointment of PR):  ___________________

·  Sworn Statement to Close filed with Court: ___________________

·  Obtain Certificate of Completion 28 days after filing Sworn Statement to Close:  ___________________

·  Termination of PR authority 1 year after Sworn Statement to Close filed:  ___________________

·  If closing formally, date of Order for Complete Estate Settlement:  ___________________

·  File Closing Date:  ___________________