Washington Lawyer - July/August 2024 - 51

SPEAKING OF ETHICS
Attorneys must exercise
care and due diligence when
using third-party services
(such as banks) that hold
client funds.
positor, as well as the bank policies that govern
that relationship. This includes what duties, if
any, banks owe to depositors who are victims
of fraud.10
Rule 5.1 (Responsibilities of Partners, Managers
and Supervisory Lawyers) requires attorneys
" with managerial authority within a firm to
make reasonable efforts to establish internal
policies and procedures designed to provide
reasonable assurance that all lawyers in the firm
will conform to the Rules of Professional Conduct. " 11
Finally,
Rule 5.3 (Responsibilities Regarding
Nonlawyer Assistants) governs the oversight
and training that lawyers must provide to nonlawyer
assistants. " Lawyers generally employ
assistants in their practice, including secretaries,
investigators, law student interns, and paraprofessionals.
Such assistants, whether employees
or independent contractors, act for the
lawyer in rendition of the lawyer's professional
services. A lawyer should give such assistants
appropriate instruction and supervision concerning
the ethical aspects of their employment. " 12
Lawyers
should regularly inform and update
their attorney and nonattorney staff about potential
scams. When appropriate and reasonable,
procedures should be put in place to uncover
or thwart ever-evolving schemes.
THE CHECKLIST
The following are some concrete steps that
lawyers can take to meet their ethical obligations:
1.
Vet new clients. Try to gather information
or verify identity outside of the client-provided
information. Use technology to your
advantage. Utilize online directories to verify
client information or even to return client
calls instead of using the number they provided
you. This could uncover the use of
spoofed numbers or emails.
2. Meet new clients in person, if possible.
While meetings may occur via Zoom or other
video conferencing platforms if the client
is international, having face time can prove
to be valuable.13
Clients should want to ensure
that they have a diligent and thorough
attorney given the fast-changing world of
artificial intelligence and deep fakes, especially
those with large sums of money at
stake.
3. Beware of suspicious requests. Examples
include clients promising something for
nothing, requiring immediate transfer of
funds, and/or threatening you if immediate
transfer or refund is not made.
4. Question wire transfers. Be wary of any
last-minute changes to transfer instructions,
even if they seemingly come from the client.
5. Exercise caution before moving funds.
Verify not only that a check is legitimate, but
also, and more importantly, that the funds
have actually cleared and are fully available
before moving any money.14
Additionally,
consider using a separate IOLTA/trust account
to deposit funds from a new client
that raises a red flag or heightened concern.
6. Train your staff. Discuss the prevalence
of scams facing law practices and the hallmarks
of common scams.
7. Make sure you know what steps to take
if you become a victim of fraud.15
These
include, but are not necessarily limited to,
contacting the bank, notifying clients pursuant
to Rule 1.4, and, if any client funds have
been taken, contacting a professional responsibility
lawyer and/or your liability insurance
provider.
8. Finally, don't ignore your instincts. When
your internal meter says something isn't
right, pay attention!
CONCLUSION
The practice of law, like many other businesses,
can be the target of scams. While there is no
foolproof method to guard against all schemes,
taking time to become aware of common
scams16
and implementing reasonable measures
to avoid them may help protect you from
becoming a victim of crime - or a respondent
in a disciplinary proceeding.
D.C. Bar legal ethics counsel are available for confidential
inquiries on the Legal Ethics Helpline at
202-737-4700, ext. 1010, or at ethics@dcbar.org.
NOTES
1 N.C. State Bar Formal Ethics Opinion 6 (2015), N.C.
State Bar Formal Ethics Opinion 5 (2020), and N.C.
State Bar Formal Ethics Opinion 2 (2021).
2 New York City Bar Opinion 2015-3 (April 2015).
Significantly, the opinion concludes that after
undertaking reasonable diligence to investigate,
" an attorney who discovers that he is the target
of an Internet-based trust account scam does
not have a duty of confidentiality towards the
individual attempting to defraud him and is
free to report the individual to law enforcement
authorities. " The opinion also advises that
because " Internet-based trust account scams
may harm other firm clients, a lawyer who
receives a request for representation via the
Internet has a duty to conduct a reasonable
investigation to ascertain whether the person is
a legitimate prospective client before accepting
the representation. "
3 In the Matter of Jeremy C. King, North Carolina
State Bar Grievance Committee (Feb. 20, 2023); In
the Matter of Richard M. Morgan, North Carolina
State Bar Grievance Committee (Feb. 20, 2023); In
the Matter of William H. Morgan Jr., North Carolina
State Bar Grievance Committee (Feb. 20, 2023).
4 California, Wisconsin, and Louisiana.
5 See lsba.org/NewsArticle.aspx?Article=673b2ef8686e-45a1-b425-5022169fc235.
6
Rule 1.1, Comment [6] (To maintain the requisite
knowledge and skill, a lawyer should keep
abreast of changes in the law and its practice,
and engage in such continuing study and
education as may be necessary to maintain
competence). See also LEOs 371, 378.
7 See Rule 1.15, Comment [1].
8 N.C. Formal Ethics Opinion 5 (2020) (A Lawyer's
Responsibility in Avoiding Fraudulent Attempts
to Obtain Entrusted Client Funds).
9 N.C. Formal Ethics Opinion 7 (2011).
10 Geiger v. Crestar Bank, 778 A.2d 1085 (D.C. 2001).
11 Rule 5.1, Comment [2].
12 Rule 5.3, Comment [1].
13 See natlawreview.com/article/deep-fake-cfovideocall-used-defraud-company-us25m.
14
Check the bank's policies because it could take
weeks for international checks to clear.
15 See justice.gov/criminal/criminal-fraud/reportfraud#:~:text=Contact%20the%20FBI%20at%20
(202,or%20tips.fbi.gov.&text=Contact%20
the%20Department%20of%20Health,.oig.hhs.
gov%20.&text=Contact%20the%20Internet%20
Crime%20Complaint,at%20www.ic3.gov.
16
See https://blog.texasbar.com/2024/05/articles/
law-firms-and-legal-departments/scamscontinue-to-target-texas-attorneys.
JULY/AUGUST
2024 * WASHINGTON LAWYER 51

http://www.lsba.org/NewsArticle.aspx?Article=673b2ef8-686e-45a1-b425-5022169fc235 http://www.lsba.org/NewsArticle.aspx?Article=673b2ef8-686e-45a1-b425-5022169fc235 http://www.natlawreview.com/article/deep-fake-cfo-videocall-used-defraud-company-us25m http://www.natlawreview.com/article/deep-fake-cfo-videocall-used-defraud-company-us25m http://www.justice.gov/criminal/criminal-fraud/report-fraud#:~:text=Contact%20the%20FBI%20at%20(202,or%20tips.fbi.gov.&text=Contact%20the%20Department%20of%20Health,.oig.hhs.gov%20.&text=Contact%20the%20Internet%20Crime%20Complaint,at%20www.ic3.gov http://www.justice.gov/criminal/criminal-fraud/report-fraud#:~:text=Contact%20the%20FBI%20at%20(202,or%20tips.fbi.gov.&text=Contact%20the%20Department%20of%20Health,.oig.hhs.gov%20.&text=Contact%20the%20Internet%20Crime%20Complaint,at%20www.ic3.gov https://blog.texasbar.com/2024/05/articles/law-firms-and-legal-departments/scams-continue-to-target-texas-attorneys https://blog.texasbar.com/2024/05/articles/law-firms-and-legal-departments/scams-continue-to-target-texas-attorneys

Washington Lawyer - July/August 2024

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