2024 Clarke Family Prize in Legal Ethics & Professionalism
You were recently hired as in-house ethics counsel for Rao, Chen, & Hilliard, a Spokane law firm of fifteen lawyers. The ethics counsel position is a new one. The firm has grown in recent years, and this growth has resulted in an increase in potential ethical issues to navigate. As a first task, the firm would like for you to focus on a number of issues related to diversity, equity, inclusion, and accessibility (DEIA).
For the last several years, the firm has prioritized taking on cases for members of underrepresented groups, those impacted by the justice gap, and those who have historically been marginalized in or excluded from the legal system. It takes on some of these cases pro bono or at a reduced rate, and it has also increased the number of cases it takes on a contingent-fee basis, where clients don’t owe a fee unless they secure a judgment or settlement. In addition, for some cases for which the firm continues to charge its normal hourly rates, it has allowed junior associates (whose rates are lower than those of senior associates and partners) to do most of the work in order to keep fees on the lower side for clients who otherwise might not be able to afford legal services. The firm’s recent growth has been in part due to this initiative, which caused several successful attorneys from rival firms to lateral to the firm. It also helped the firm to hire several highly sought-after recent law school graduates who care deeply about the firm’s DEIA commitment and the central role junior attorneys would play in those cases.
However, some of the firm’s partners have recently become concerned about some of the effects of its DEIA commitment. While several of the firm’s recent pro bono cases have led to positive client outcomes and good publicity for the firm, the cases have required significant time and resources from partners, associates, and staff. At the same time, more of the firm’s contingent-fee cases have failed than anticipated. In addition, many of the firm’s new hourly cases (at either full or reduced rates) have proven to be inefficient revenue streams because they have been “one-and-dones” in more varied areas of law, and the firm so far hasn’t charged clients for the necessary background research in those cases out of fear that it would make the representation unaffordable, undermining the firm’s efforts. These “one-and-done” cases have also led to a decrease in retainers generated from new clients, which has impacted the firm’s revenue stream. Moreover, there have been a few cases where new clients for hourly cases have not been able to pay their legal bills. In addition to not receiving those fees, the firm is worried about the reputational impact of having to “drop” or even sue some of these clients for collection of the fees, which the firm feels pressured to do in order to continue to afford to do its pro bono cases.
The firm also has questions regarding one of its newest pro bono cases. Several of the firm’s lawyers who are also licensed in Idaho recently agreed to partner with an Idaho firm in its representation of a transgender student in a lawsuit challenging an Idaho law designed to prevent transgender students from using school facilities that correspond with their gender identity. The suit claims that the law violates the Equal Protection and Due Process Clauses of the Fourteenth Amendment and Title IX of the Education Amendments of 1972 by singling out transgender youth for discriminatory treatment. One of the firm’s partners, Isaac, who is also licensed in Idaho, thought that the case was too politically contentious, but ultimately did not oppose the firm members ultimately taking it on.
Shortly after the firm took on this case, one of Isaac’s clients, Mountain View Mall, a Coeur d’Alene, Idaho, indoor shopping mall, reached out to him to express concern. Isaac has represented the shopping mall for several years, partnering with a Coeur d’Alene firm in assisting with zoning, construction, and regulatory compliance issues during the mall’s construction and first several years of operation. Part of this work involved defending the mall in some challenges to its compliance with the Americans with Disabilities Act, including the accessibility of its restroom facilities for individuals with disabilities. Mountain View’s owners, who continue to consult with Rao, Chen, & Hilliard under a retainer agreement, explained to Isaac that they are concerned that the school restroom case could eventually cause the mall to have to take public stances on the issue of transgender restroom access that it would rather avoid. Although the firm is not aware of any issues related to which restrooms its patrons have been using to date, the owners have agreed that if such an issue arose, the mall would take a stance that mirrors the restrictions in the Idaho school law. The owners have said that if Rao, Chen, & Hilliard continue challenging the Idaho law, they might not renew their retainer, which has proven to be quite lucrative for the firm, allowing it to continue its DEIA work.
Finally, in a recent intake interview with a prospective client seeking assistance with bringing a case of wrongful termination on the basis of race, Nancy, another firm partner, said to colleagues in front of the prospective client, “I’ve about had it with these worthless ‘do-good cases,’” and told the prospective client, “Stop wasting our time,” before storming out of the meeting. The prospective client abruptly left the meeting. The other attorneys thought the case would have been a challenging one, but were hoping to take it on because it was in line with the firm’s new DEIA focus and because it would have allowed firm members to gain more experience for future employment discrimination cases.
Some partners, including Isaac and Nancy, believe the firm should scale back the cases it has been taking as part of its DEIA efforts. Others believe it is the firm’s ethical duty to keep doing what it is doing and that it is setting a standard that all firms should follow. The firm is wondering whether the ethics rules provide grounding for a path forward. (The firm has upcoming budget meetings where it will receive separate guidance on firm finances, specifically; it is hoping your advice will provide an ethical lens that would inform those meetings and other ongoing discussions about the firm’s direction.) The firm also wonders how it must or should navigate the situation with the Idaho transgender bathroom case and Mountain View Mall, as well as whether Nancy’s interaction with the recent prospective client raises any ethical concerns. In sharing your guidance, the firm would like for you to focus on the Washington Rules of Professional Conduct, as needed. After sending your memo on these issues, the firm would like to meet briefly to discuss your guidance, as well as any questions you have for the firm.
—End of 2024 Competition Problem—
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