Ethics are the moral principles that guide people to act one way and not another. Attorneys make ethical decisions every day when deciding how to defend or represent a client, and attorneys working for large firms also must act ethically in their business practices. The state’s code of professional ethics guides an attorney’s behavior, but so do the attorney’s personal standards.
Staff and Management
Large law firms sometimes select a non-lawyer to be their chief executive officer. This can pose ethical problems, because people who aren’t lawyers can’t give legal advice. Other employees, such as paralegals and secretaries, are also not permitted to offer legal advice, and law firms must carefully train staff to ensure they don’t violate this rule. Law firms must ensure client confidentiality and prohibit misappropriation of client funds. Employees, for example, have to be aware that disbursements from insurance companies must go into an escrow account and not into a personal or business account. They must know state guidelines governing client confidentiality; they can’t, for example, post information about clients on social networking sites or reveal details of a client’s case to a third party — even a client’s family member — without express permission from the client.
Conflicts of Interest
Lawyers can’t represent clients when they have a conflict of interest. For example, an attorney could not sue someone he had previously represented if his previous representation gave him information that would lead to an unfair advantage or the appearance of one. Two lawyers in the same firm generally can’t represent clients with opposing interests. Because law firms are large entities that may represent thousands of clients, many firms use conflict-checking software to ensure they do not contract with a client who might pose a conflict of interest. Further, even if one lawyer in the firm has no direct conflict of interest, the fact that another lawyer does might prohibit representation.
State codes of professional ethics provide specific guidelines for how attorneys must handle client finances, and the right way to handle client money isn’t always obvious. If a client pays into an attorney’s escrow account or an attorney is required to hold funds from a settlement for a client, this money cannot be used for anything else. Lawyers are generally prohibited from commingling their business assets with their clients’ money. When a lawyer works with a law firm, the firm’s accounting department is often tasked with managing financing and ensuring that lawyers properly manage finances.
Law firms face ethical challenges when determining how best to advocate for their clients. Lawyers can represent clients they know to be guilty, but they can’t induce clients to perjure themselves on the witness stand. Similarly, lawyers in emotionally charged cases, such as child custody battles, frequently have to determine how to advocate for their clients in a way that meets their personal ethical beliefs. For example, a lawyer might be asked to allege that a parent molested a child when the lawyer doesn’t believe the parent committed this crime. Law firm managers frequently have to balance ethical considerations with zealous advocacy of their clients; they can withdraw from cases when balance is not possible.
Each state bar establishes its own rules of professional responsibility for lawyers, and law firms must ensure that their partners, associates and any lawyers with whom they contract follow these rules. These rules are more important than any other duty an attorney has, including her duties to make money for her firm or to advocate for her client. Generally speaking, codes of professional responsibility require that lawyers communicate effectively with their clients, avoid criminal behavior, manage payments legally and fairly and refrain from defrauding anyone. If a lawyer breaks one of these rules and commits malpractice, the law firm and the individual attorney could be sued. Lawyers who break rules of professional conduct can be sanctioned or even disbarred, and law firms with a history of rules violations may also be sanctioned.
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