Ethics

Some interesting observations on reading the magistrate judge's opinion rejecting Gucci's claim of privilege for communications with its director of legal services because he was was an inactive member of the California bar. 

Jonathan Moss, the lawyer (or "lawyer"), was deposed last year and said he had been inactive for 3 years, according to the opinion, but in fact the court says he was inactive for 13 years. How did he make this 10-year mistake? (And what liability might he now have to Gucci?)

Gucci hired Moss in 2002, at which time he would have been inactive for 6 years. Are all his communications across 8 years now unprotected?  Pretty daunting. Will other litigation opponents of Gucci now seek to piggyback on this decision? I expect so.

The opinion seems to conclude that Gucci was obligated to check Moss's status, at least when it hired him (Gucci  tried to avoid any such duty by claiming he was not initially hired as a lawyer but eventually of course he was put in a legal position so I'm not sure what this claim would have accomplished even if so).  

Does this now mean that the status of every new firm or corporate law department hire must be checked? Maybe not because the opinion suggests that if Moss had actually worked at Patton Boggs, which had recommended him to Gucci (apparently as the child of a friend of the firm), the company might "perhaps" have been able to assume that Moss was admitted to the bar in reliance on his work at the firm. In other words, it could assume that the firm did its due diligence.

 But this is only a possibility. The court just speculates.  And so to be safe, assuming this opinion stands, and maybe even if it does not, the risk averse employer now will check status of every new hire (and all new law school graduates awaiting admission).

Law firms are especially vulnerable if they don't check because their lawyers work for many clients. A broad reading of this opinion -- or maybe not even a broad reading -- means privilege will be lost for all the work they do unless the firm can claim that the "lawyer" falls within another lawyer's privilege zone. Who wants to take a chance on that? And if a firm lawyer turns out not to be a lawyer and privilege is lost, does that open the firm to liability to clients who suffer as a result? I would think so. 

P.S. Left open for later ruling is whether Gucci can get mileage from a work-product claim.