Tuesday, July 2, 2024
Georgia: Ethics Rules Do Not Apply To Lawyers As Fiduciaries
The Georgia Supreme Court has rejected a petition for voluntary discipline on the grounds that the ethical rules do not apply to lawyers acting in a fiduciary capacity
In the petition, Brown, who has been a member of the State Bar of Georgia since 1997, admits that she “may have” violated Rules 1.15 (I) (c) and 1.15 (II) (b) of the Georgia Rules of Professional Conduct (“GRPC”) while serving as the successor trustee of a South Carolina trust—even though the Bar acknowledges that she was acting only in a fiduciary capacity, and not as a lawyer, at the time. The Bar asserts that Brown violated Rules 1.15 (I) (c) and 1.15 (II) (b) and requests a suspension of between three and six months.
We ultimately conclude that Brown’s conduct did not violate Rule 1.15 (I) (c) or 1.15 (II) (b). As we explain below, the text of Rules 1.15 (I) (c) and 1.15 (II) (b) does not clearly indicate whether these Rules apply to lawyers when they are acting as fiduciaries not in connection with the legal representation of a client or otherwise in the practice of law. Even after applying rules of statutory construction, either reading of Rules 1.15 (I) (c) and 1.15 (II) (b)—that they do, or do not, apply to lawyers acting as fiduciaries but who are not engaged in legal representation of a client or in the practice of law—is plausible. However, applying these Rules to lawyers when they are not practicing law would raise serious constitutional concerns, which we set out below. As a result, under the canon of constitutional doubt, we interpret Rules 1.15 (I) (c) and 1.15 (II) (b) such that they do not apply to lawyers when they are acting as fiduciaries not in connection with the legal representation of a client or otherwise in the practice of law. Because Brown’s conduct at issue in this matter falls outside our interpretation of Rules 1.15 (I) (c) and 1.15 (II) (b), we conclude that Brown’s conduct did not violate those Rules. We therefore reject her petition for voluntary discipline.
The court
Faced with two plausible, alternative interpretations of the Rules at issue in this matter, we are compelled to point out that the expansive interpretation of Rules 1.15 (I) (c) and 1.15 (II) (b) the Bar advocates implicates real concerns regarding the scope of this Court’s inherent authority to regulate the practice of law. We have long held that this Court has the inherent and exclusive authority to regulate the practice of law in Georgia...
But our authority to regulate the practice of law is not unbounded, see In the Matter of Palazzola, 310 Ga. at 650 (Peterson, J., specially concurring) (observing that “not every bad thing a lawyer does should jeopardize the lawyer’s ability to work” and in evaluating Rule 8.4 (a) (4), expressing skepticism that “the inherent authority to regulate the practice of law that the Georgia Constitution vests in this Court includes the authority to adopt such a far-reaching rule even if the Court wanted to”), including because the Due Process clause contained in the Georgia Constitution guarantees the “‘right to work in one’s chosen profession free from unreasonable government interference,’”
A finer point
To put a finer point on it: applying the canon of constitutional doubt to the competing, plausible interpretations of Rules 1.15 (I) (c) and 1.15 (II) (b), we adopt the narrower construction of the Rules (as articulated above) that avoids serious questions about the constitutionality of those Rules. And that narrower interpretation leads to the conclusion that Rules 1.15 (I) (c) and 1.15 (II) (b) do not apply to Brown’s conduct as a fiduciary in this case, even though she is a lawyer licensed in Georgia, because her conduct does not involve a legal representation of a client or the practice of law.
I expect this opinion will generate interest and commentary in the legal ethics community. I further expect the bar discipline defense community to seize on the reasoning and offer it up as a defense to charges in other jurisdictions.
I do note that the charges here do not involve dishonest or criminal conduct with respect to trust assets. (Mike Frisch)
https://lawprofessors.typepad.com/legal_profession/2024/07/georgia-ethics-rules-do-not-apply-to-lawyers-as-fiduciaries.html