Are Differences Among the Attorney Conflict of Interest Rules Consistent with Principles of Behavioral Economics?

Georgetown Journal of Legal Ethics, The, Winter 2006 by Gross, Leonard E

C. LAWYERS COMMIT PROFESSIONAL MISCONDUCT AT LEAST AS FREQUENTLY AS OTHER PROFESSIONALS, IF NOT MORE FREQUENTLY

To determine if lawyers can be expected to conform to a professional norm even when it is not in their self-interest to do so, I compared statistics regarding lawyer discipline with those for accountants. I looked in particular at instances of converting client money based on the assumption that lawyers and accountants would have similar opportunities to commit this offense. From my informal survey, I determined that lawyers were much more likely to be disciplined than were accountants for converting client funds.104 It is certainly possible that there are explanations for the disparity other than the fact that lawyers are more likely to be dishonest than accountants. For example, lawyers are disciplined not only for converting client funds but for failing to keep proper records of segregated funds.105 It is not clear from the data whether accountants are being disciplined for similar failings. In addition, differences in data may also be attributable to differences in the rate at which the behavior is detected and prosecuted. To compare apples to apples, we would need to know how frequently complaints were generated against lawyers and accountants and how much money the enforcement agencies had to prosecute the offenses. Nonetheless, the data, flawed as it is, at least suggests that there is no reason to believe that lawyers as a class are more likely to conform to professional norms than accountants.

In sum, although the empirical data is far from conclusive, it is consistent with the notion that lawyers, like other professionals, are willing to put their interest ahead of their clients while rationalizing that what they are doing is perfectly ethical.

V. PRINCIPLES OF BEHAVIORAL ECONOMICS Do NOT SUPPORT DISPARATE TREATMENT OF CERTAIN KINDS OF CONFLICTS OF INTEREST

The ethics rules permit clients to waive some attorney conflicts of interest but not others. For example, Rule 1.8(c) allows lawyers to draft wills or other instruments in which the lawyer or the lawyer's relative receives a substantial gift if the lawyer or donee is closely related to the client. Perhaps even more problematic is Rule 1.8(a), which allows lawyers to enter into business transactions with a client if the terms are fair and reasonable to the client and fully disclosed to the client in writing, the client is advised of the desirability of obtaining independent counsel to review the transaction, and the client gives informed consent in writing to the transaction. On the other hand, Rule 1.8(d) precludes a lawyer from representing a client while simultaneously negotiating an agreement giving the lawyer literary or media rights to a portrayal based in substantial part on information relating to the representation. Also, Rule 1.8(j) now absolutely precludes a lawyer from having sexual relations with a client unless a consensual sexual relationship existed between them when the lawyerclient relationship commenced.106 This apparent anomaly, which precludes lawyers from having sexual relations with existing clients but permits business relations with existing clients, may be predicated on the assumption that lawyers will be more likely to take advantage of clients sexually than they will financially. However, none of the principles of behavioral economics discussed above would suggest that lawyers are more inclined to put their interests ahead of their clients' in the personal realm rather than the financial area.