Track These Changes: Ethics of Inadvertent Disclosure of Metadata

Track These Changes: Ethics of Inadvertent Disclosure of Metadata

Texas Ethics Opinion 665 says lawyers have an ethical duty to avoid inadvertently disclosing confidential metadata, but not an ethical duty to disclose they received inadvertently-sent metadata

Does a lawyer have an ethical duty to avoid sending opposing counsel a document containing metadata that reveals confidential client information? Does the receiving lawyer have a duty to inform the sending lawyer of the receipt of confidential metadata and to refrain from using the information obtained therefrom?

Did I really just use the word “therefrom” in Five Minute Law? Please don’t report me to Bryan Garner.

In any case, the Professional Ethics Committee for the State Bar of Texas recently addressed these questions in Opinion No. 665, which appeared in the January 2017 Texas Bar Journal. The Committee said yes, a Texas lawyer generally has an ethical duty to avoid transmission of confidential metadata, and no, a Texas lawyer generally does not have an ethical duty to notify opposing counsel of the inadvertent receipt of confidential metadata.

In short, you could say the Texas rule on inadvertent disclosure of metadata is don’t disclose. If you’re the sending lawyer, don’t disclose confidential metadata. If you’re the receiving lawyer, you don’t have to disclose that you received it.

The Committee included this important qualification: the opinion applies only to the “voluntary transmission of electronic documents outside the normal course of discovery.” Disclosure of metadata in discovery—an issue currently before the Texas Supreme Court in the State Farm case—is an entirely different subject.

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 I read these things on the weekend so you don’t have to

The second part of Opinion 665 is consistent with Opinion 664, which I covered here. Opinion 664 said generally Texas lawyers do not have an ethical duty to notify opposing counsel they have inadvertently received confidential information. You might even say Opinion 665 simply applies Opinion 664 to metadata.

Once again, this puts Texas at odds with the ABA’s Model Rule of Professional Conduct 4.4(b), which  requires a lawyer to promptly notify the sender of the receipt of inadvertently-sent electronically stored information. This is Texas, the home of rugged individualism. If the other guy inadvertently sends you confidential information, that’s his problem.

But there is a limit. Would you believe the Texas ethics rules require lawyers to be honest? It’s right there in Rule 8.04(a)(3), which says a lawyer shall not “engage in conduct involving dishonesty, fraud, deceit or misrepresentation,” and Rule 3.03(a)(1), which requires that a lawyer shall not knowingly “make a false statement of material fact or law to a tribunal.” You can use confidential metadata opposing counsel inadvertently sent you; you just can’t lie about it.

In the Committee’s words:

[A]lthough the Texas Disciplinary Rules do not prohibit a lawyer from searching for, extracting, or using metadata and do not require a lawyer to notify any person concerning metadata obtained from a document received, a lawyer who has reviewed metadata must not, through action or inaction, convey to any person or adjudicative body information that is misleading or false because the information conveyed does not take into account what the lawyer has learned from such metadata.

That sounds reasonable. But it’s so abstract. What does it really mean?

Application of the Texas “don’t disclose” rule to metadata in a settlement agreement

Let’s make this concrete with my favorite hypothetical non-compete lawsuit, Paula Payne Windows v. Dawn Davis. Suppose Dawn’s lawyer sends Dawn Paula Payne’s proposed settlement agreement in Microsoft Word. Dawn revises it and inserts some confidential comments, such as “change this to a one-year non-compete, but I’ll agree to two years if that’s what it takes—I just want this nightmare to be over!”

Dawn’s lawyer emails Paula Payne’s lawyer, Sam Sneaky, a Word document containing metadata that allows Sam to recover and review Dawn’s comments, including the comment about the length of the non-compete. Sam decides not to tell Dawn’s lawyer about the inadvertent disclosure. Knowing that Dawn is desperate to settle and will cave on the non-compete, Sam sends back a demand for more money and a two-year non-compete.

So has anyone broken any ethical rules under Opinion No. 665?

Dawn’s lawyer probably failed to meet his duties of competent representation (see Rule 1.01) and maintaining confidentiality of client information (Rule 1.05).  According to Opinion 665:

Lawyers . . . have a duty to take reasonable measures to avoid the transmission of confidential information embedded in electronic documents, including the employment of reasonably available technical means to remove such metadata before sending such documents to persons to whom such confidential information is not to be revealed pursuant to the provisions of Rule 1.05.

Let’s assume Dawn’s lawyer knew the original Word document had sensitive client communications in it and should have known those communications could be recovered from the metadata in the new document. In that case, Dawn’s lawyer should have taken reasonable measures such as using a common metadata-scrubbing program when emailing the document to opposing counsel.

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Be careful what you send opposing counsel

On the other hand, Dawn’s lawyer only has to take reasonable measures. “Not every inadvertent disclosure of confidential information in metadata will violate Rule 1.05.”

What about Sam Sneaky? Under the ABA Rule, you could argue Sam had a duty to promptly notify Dawn’s lawyer that the confidential metadata was inadvertently sent. But under Opinion 665, he’s fine in Texas.

That is, unless he conveys information that is false or misleading because it doesn’t take into account what he learned from the metadata. For example, after reviewing the confidential metadata, Sam couldn’t say to Dawn’s lawyer, “I have no idea what length of non-compete your client is willing to agree to, but my client insists on two years.” That would be dishonest. It’s a statement Sam could truthfully make before seeing the confidential metadata, but not after.

Admittedly, this hypothetical is pretty contrived. Who talks like that?

Let’s imagine something more subtle and realistic. Can Sam say to Dawn’s lawyer, “we have to insist on a two-year non-compete because anything less than that won’t adequately protect my client”? That statement is misleading, you could argue, because it omits the material fact that Sam is insisting on the two-year non-compete because he knows from the inadvertently-disclosed metadata that Dawn will agree to it.

The bottom line seems to be this: when Texas lawyers receive confidential metadata from opposing counsel, they don’t have to disclose they received it, and they can use it to their advantage. They just have to be careful what they say after receiving it.

Is this the Cowboy Way?

I’ll be honest. I don’t like this. Ethics Opinion 665, like Opinion 664 before it, seems to make Texas an outlier, and in the wrong direction. I prefer the approach of the ABA Model Rule.

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Let’s rustle up some metadata

Yes, Texas is the Lone Star State, where the legacy of Old West rugged individualism is strong. But we should also remember “Tejas” means “friendship.” And last I checked, Texas was still part of the Bible Belt. The Bible says “do unto others as you would have them do unto you.” If you inadvertently sent a document containing confidential metadata and opposing counsel discovered it, wouldn’t you want him to tell you?

I’m not saying Ethics Opinion 665 is wrong. It’s a reasonable interpretation of the existing disciplinary rules. But using confidential information that opposing counsel inadvertently sends you just doesn’t feel like the Cowboy Way. If your neighbor’s cattle wander onto your ranch because he wasn’t careful, you don’t keep them and say “that’s his problem.”

Perhaps this comes down to the difference between “professionalism” and “ethics.” Ethics, in this context, means complying with a specific set of rules. Professionalism, on the other hand, is a higher—and admittedly fuzzier—standard. Telling a lawyer he accidentally sent you something you know he didn’t mean to send you is good professional courtesy, even if the Rules of Professional Conduct don’t require it.

It’s just following the Golden Rule. And the principles derived therefrom.

Texas lawyers: register for my March 22 webcast covering this very issue here.

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head-shot-photo-of-zach-wolfeZach Wolfe is a Texas trial lawyer who handles non-compete and trade secret litigation. His firm Fleckman & McGlynn, PLLC has offices in Austin, Houston, and The Woodlands. You can probably tell from this week’s image that his son is into Lamborghinis.  

These are his opinions, not the opinions of his firm or clients, so don’t cite part of this post against him in an actual case. Every case is different, so don’t rely on this post as legal advice for your case.

Do Lawyers Have an Ethical Duty to Disclose That Their Clients Took Confidential Information?

Do Lawyers Have an Ethical Duty to Disclose That Their Clients Took Confidential Information?

A typical customer list scenario illustrates the problem

On the first day of law school, they teach us that the answer to almost every legal question is “it depends.” (And I hear they teach the same lesson on the first day of Economist School.) Opinion 664 from the Texas Center for Legal Ethics takes 1,699 words to say the same thing. The issue: a lawyer’s ethical duty to disclose that he has the opposing party’s confidential or privileged information.

We’re talking lawyer ethics, so you know there’s going to be a hypothetical, right? Well here it is.

Paula Payne Windows sells windows, primarily for residential construction. Dawn Davis, one of Paula Payne’s top sales people, leaves Paula Payne and takes a job with Real Cheap Windows. Paula Payne sues Dawn Davis and Real Cheap for misappropriating confidential information and trade secrets.

Specifically, Paula claims that Dawn took a confidential customer list she compiled while working for Paula—specifically, the names and contact information for her customers stored on her iPhone contacts.

Dawn hires you to represent her in the lawsuit. She tells you she does indeed have the names and contact information for her 50-some-odd customers on her iPhone. Shortly after you file an answer, opposing counsel inadvertently copies you on a confidential email to his client in which he says, “I know it’s silly, but we need to claim that Dawn’s customer list is a trade secret.” The email attaches a memo outlining opposing counsel’s legal strategy.

Two questions: (1) do you have an ethical duty to disclose to opposing counsel that Dawn has the customer list? (2) do you have an ethical duty to disclose to opposing counsel that you received the confidential email?

A recent Texas ethics opinion weighs in on two issues

These two questions, in abstract form, are the subject of Texas Ethics Opinion 664. The answer? “Not necessarily.” Which is another way of saying, “it depends.”

The opinion is careful to distinguish between what a lawyer should do and what the Texas Disciplinary Rules of Professional Conduct require. A lawyer should aspire to inform opposing counsel of an inadvertent disclosure of confidential information, the opinion says, but failing to do so is not necessarily an ethical violation.

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Don’t miss the ethics opinion tucked away in the December 2016 Texas Bar Journal

In the words of the Opinion: “a Texas lawyer who fails to provide notice to opposing counsel upon receipt of an opposing party’s confidential information outside the normal course of discovery does not necessarily or automatically violate the Texas Disciplinary Rules. The answer is the same whether the information is obtained in an unauthorized manner or inadvertently.”

But the Opinion also notes that the use of the confidential information could violate the ethics rules depending on the circumstances, citing rules that bar lawyers from engaging in or assisting criminal, fraudulent, or dishonest conduct.

The “not necessarily” answer strikes me as basically correct, but not very helpful. To use a technical legal term, Ethics Opinion 664 is too wishy-washy.

A duty to disclose the other guy’s inadvertent disclosure of privileged information would make more sense

The root of the problem is that the opinion tries to address two significantly different questions at once. The opinion underappreciates the difference between the questions, particularly the difference between privileged information and confidential information. Instead of giving a wishy-washy answer that tries to cover both issues, the opinion could have given separate, more definitive answers.

I’ll use my hypothetical to explain what I mean. As Dawn Davis’s lawyer, would you have an ethical duty to disclose to opposing counsel that he inadvertently sent you a privileged memo outlining his legal strategy? I bet when you first read this question you said yes. That seems like the right answer to me as well.

And I’m not the only one. ABA Model Rule 4.4(b) says: “A lawyer who receives a document or electronically stored information relating to the representation of the lawyer’s client and knows or reasonably should know that the document or electronically stored information was inadvertently sent shall promptly notify the sender.”

This seems like a workable common sense rule. Like most good manners, it’s reciprocal: if you tell me when I send you something privileged by mistake, I’ll do the same for you.

One reason this rule would make sense is that in most cases it is obvious when opposing counsel has inadvertently sent you privileged material. The lawyer who receives the communication usually doesn’t have to make a difficult judgment call about whether it’s privileged or not.

A duty to disclose that your client has confidential information would make less sense

The second issue from the hypothetical is quite different. Do you have an ethical duty to disclose that your client Dawn Davis took Paula Payne Window’s confidential customer list? I bet when you read this question you said no, and I agree.

But why? First, it’s important that the confidential status of the customer list is an issue in dispute in the lawsuit. Keep in mind that a customer list can be—but is not necessarily—a trade secret (more about this issue here). If you represent Davis, you’re going to take the position that Davis’s list of her own customers is not a trade secret or even confidential information.

Now imagine that the ethics rules required you to volunteer that your client possesses that information if the information is actually confidential. Your ethical obligation would depend on a judgment call on an issue in dispute in the litigation. This would be unworkable.

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Ethic Opinion 664 isn’t necessarily wrong. But it could have been better.

Ethics Opinion 664 fails to address this problem. It simply assumes that the information is confidential.

But the problem goes beyond that. Even if we assume that the information held by the client is confidential information or a trade secret, it would be strange for trade secret cases to be subject to a special rule that a lawyer has an ethical duty to volunteer information to the other side about an issue in dispute in the litigation.

Keep in mind we’re talking about an ethical obligation to volunteer information, not the duty to respond to proper discovery requests. If the Court orders Dawn Davis to produce documents that contain customer names and information, then her lawyer’s obligation is clear. But that is not the question presented.

If I ran the zoo

It’s hard to find anything incorrect in Ethics Opinion 664. But the opinion could have provided better guidance. Rather than giving one generic answer to two different questions, the opinion could have drawn a sharper distinction between the questions and taken a stronger stand on each.

Generally, there should be an ethical duty to disclose to opposing counsel that he has inadvertently sent you privileged information. Generally, a lawyer should not have an ethical duty to disclose that his client has documents that the opposing party claims contain confidential information or trade secrets.

But why do I say “generally”? Well, you know. Because it depends.

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head-shot-photo-of-zach-wolfe

Zach Wolfe is a Texas trial lawyer who handles non-compete and trade secret litigation. His firm Fleckman & McGlynn has offices in Austin, Houston, and The Woodlands.

These are his opinions, not the opinions of his firm or clients, so don’t cite part of this post against him in an actual case. Every case is different, so don’t rely on this post as legal advice for your case.

Five Rules Texas Lawyers and Other Professionals Must Follow When Using Social Media

Five Rules Texas Lawyers and Other Professionals Must Follow When Using Social Media

Complying With the Ethics Rules for Texas Lawyers Can Actually Make Your Social Media Content More Effective

This week’s challenge: give Texas lawyers the key tips they need to use social media without violating ethics rules, while also giving non-lawyers tips on more effective use of social media for professional networking and business development.  My hypothesis is that complying with the ethics rules for Texas lawyers can actually make your use of social media more effective, whether you are a Texas lawyer, a non-Texas lawyer, or not a lawyer at all.

First a little background. If you follow me on LinkedIn or Twitter (see photos below), you know that last week I hit the road to Dallas to present “It’s Not Just for Millennials – How to Incorporate Social Media into Your Business Development Efforts Without Violating Ethics Rules.” I often speak to Texas lawyers about how to use social media in a way that complies with the advertising rules in the Texas Disciplinary Rules of Professional Conduct.

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I typically tell Texas lawyers there is good news and bad news for lawyers who use social media. The bad news is that the Texas ethics rules are both unclear and potentially onerous when applied to social media, the worst of both worlds. But the good news is that the Texas State Bar has issued interpretive comments that use some common sense to apply the poorly written ethics rules to social media. If you like details and need to be shown the backup, you can read the applicable rules, interpretive comments, and some brilliant commentary here.

But if you just want the bottom line, keep reading.

Tip #1: Use your social media posts to educate and inform your target audience, not to make a sales pitch

The Problem with the Texas Ethics Rules: They generally require all advertising to be filed with the State Bar’s Advertising Review Committee.  Promoting your experience or qualifications in a social media post that is available to the general public is advertising. But filing every tweet, status update, or post with the State Bar would be a huge pain.

Take for example Peggy Schuyler, a transactional lawyer who focuses her practice on handling commercial real estate deals. She could post “I’m proud to announce I’ve been named a 2016 Texas Legion of Justice Super Friend in Commercial Real Estate Law.” There’s nothing unethical about that, but it would be advertising that she would need to file.

Help from the Texas State Bar: Social media content that is “educational or informational” is generally not advertising.

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Why This is Actually Good for Lawyers and Other Professionals:   It’s usually more effective to show people your expertise than to tell people how great you are. Take Peggy, for example. Telling people about an award she won is probably better than nothing, but many firms post announcements like this, and they sound like advertising. Instead, what if Peggy posted a link to an article about the year’s top 10 commercial real estate transactions in her city? Her target audience will probably find that more interesting, and because it’s “educational or informational,” it’s not advertising.

Tip #2: Think about whether you really want or need the “call to action”

Lawyers can get “marketing” guidance from a wealth of literature from the world of sales. For example, my friend Drew Sanocki at Nerd Marketing is an e-commerce expert who knows all the hacks that can help online retailers increase their sales. Online marketing experts typically say your social media post needs to have a “call to action.” For example, they would tell Peggy to add, “Call me today if you or your client needs help with a commercial real estate transaction.”

The Problem with the Texas Ethics Rules: The “call to action” may be great sales advice, but it creates a problem for lawyers. When Peggy adds the call to action, she has just crossed the line into advertising. That means she needs to file her post with the State Bar.

Why This is Actually Good for Lawyers and Other Professionals: I feel like leaving out the call to action is good advice for lawyers and other professionals anyway. You’re selling professional expertise, not inexpensive razor refills. The call to action makes your post sound like just another sales pitch, and it doesn’t seem that necessary. People know they can hire you. In the history of the universe, has anyone ever read a lawyer’s social media post and thought, “I was thinking about hiring this guy, but he didn’t say he’s taking new clients, so I guess I’ll go somewhere else”?

Tip #3: Don’t overstate your role in good results obtained

The Problem with the Texas Ethics Rules: Taken literally, the rules prohibit a lawyer from stating a past success or “result obtained” if the lawyer was not lead counsel. So, for example, if I say in my social media profile that I “assisted” the trial team in the defense of a trademark infringement claim (which is absolutely true), the literal interpretation of the rule says this is a prohibited “misleading” statement, because I was not lead counsel.

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Help from the Texas State Bar: The interpretive comment says you don’t have to be lead counsel as long as you don’t “claim responsibility” for the result obtained. So my statement about “assisting” the trial team is fine, because I’m not claiming responsibility for the result.

Why This is Actually Good for Lawyers and Other Professionals: Have you ever read a lawyer’s list of results obtained and thought, “wow, that’s a lot of accomplishments for such a young lawyer”? Do you sometimes think, “I wonder if this lawyer’s role in these cases was not quite what he’s making it out to be”? When a lawyer overstates his or her role in past successes, it has the opposite of the intended effect. So this is another case where following the ethics rules will actually improve the effectiveness of your content.

Tip #4: Don’t compare yourself with other professionals in your field

The Problem with the Texas Ethics Rules: None. In this case, the rule is fairly clear and not that onerous: don’t state comparisons with other lawyers that cannot be supported with objective, verifiable data. This means that most opinions comparing yourself to other lawyers are off limits. You can’t say things like “we’re the toughest lawyers in town” or “we’re the best law firm in Texas if you want a big recovery.” (Let’s put aside the fact that this rule seems to be routinely ignored.)

Why This is Actually Good for Lawyers and Other Professionals: Tooting your own horn in comparison with other professionals in your field is not the best use of social media. Like the “call to action” discussed above, it sounds too sales pitchy. It’s all about you instead of providing valuable information to your audience. And talking down other people who do what you do is not a good marketing strategy for professionals. As with overstating your role in successful cases, it doesn’t inspire confidence; it just makes you look insecure.

Tip #5: Leave the opinions out of your profile on LinkedIn and other social media

I’ve noticed that the slicker and more professional law firm websites—the ones that you guess expensive marketing consultants helped prepare—tend to have this kind of statement:

Zach Wolfe is a tough, aggressive litigator who fights hard for the best possible outcome for his clients. He is dedicated to thoroughly understanding the problems faced by his clients and crafting creative solutions. Zach’s clients value his uncanny knack for persuading juries in even the most difficult and complex cases . . .

Marketing gurus must think this kind of thing is effective. Notice the heavy use of subjective opinions that are virtually impossible to back up with data.

I’m not a fan of this. I may get some pushback here, but hear me out. Not only is your profile better when you stick to the facts, leaving out the self-serving opinions may also help you avoid making your profile an “advertisement” required to be filed with the State Bar.

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The Problem with the Texas Ethics Rules: Warning, this one is a downer. Do you have a profile on LinkedIn? Does it describe your experience and qualifications as a lawyer? Is it accessible to the public? Have you filed the profile with the State Bar?

If you’re a Texas lawyer, I’m willing to bet you answered yes, yes, yes, and no. I have yet to meet a Texas lawyer who has filed his LinkedIn profile—or any other social media profile—with the State Bar.

This is a potential problem. If your social media profile is publicly accessible and describes your experience and qualifications, then technically it’s “advertising in the public media” that must be filed. “But no one does that!” you say. True, but good luck with the “everyone’s doing it” defense.

Help from the Texas State Bar: Sorry, no official help. In fact, the interpretive comment states explicitly: “Landing pages such as those on Facebook, Twitter, LinkedIn, etc. where the landing page is generally available to the public are advertisements.”

Why This is Actually Good for Lawyers and Other Professionals: For this one, it’s complicated. Texas lawyers have a range of unattractive options. You could take the ultra-cautious approach and change the settings on LinkedIn so your profile is only visible to your connections. But do you really want to hide your light under a bushel? Another option is to bite the bullet and file your profile with the State Bar, but that seems likely to open another can of worms.

On the other end of the spectrum, hakuna matata. You could just not worry about it, hoping that out of the thousands of Texas lawyers who have not filed their social media profiles, the State Bar won’t decide to make an example of you.

I tend to favor a middle ground: take the opinions out of your profile and focus on your basic contact information and practice areas. This kind of information is exempt from the filing requirement. This does not entirely solve the problem, because your profile will probably still have endorsements and recommendations, which don’t fall under any official exemption. But at least you have made a good faith effort to limit your profile to exempt information.

And your profile is better without the self-serving subjective opinions anyway, whether you are a lawyer or some other kind of professional.

Do you disagree? If so, I’d like to hear from you.

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head-shot-photo-of-zach-wolfe

Zach Wolfe is a Texas trial lawyer who handles non-compete and trade secret litigation. His firm Fleckman & McGlynn has offices in Austin, Houston, and The Woodlands.

These are his opinions, not the opinions of his firm or clients, so don’t cite part of this post against him in an actual case. Every case is different, so don’t rely on this post as legal advice for your case.