Vermont Bar Journal, Vol. 40, No. 2 Fall 2015, Vol 41, No. 3 | Page 17

by Jordan K. Carpenter

The Ethics of Dealing with Internet Scams
Targeting Vermont Lawyers
Introduction

Scam artists target lawyers.1 Many of
these scammers take advantage of the relative anonymity offered by the Internet and
the eagerness of lawyers to take on new,
money-making clients. The average scam
is carried out under the guise of a quick
settlement or transaction, usually under
extraordinary, urgent circumstances. The
scammers promise the lawyer will be entitled to a generous fee, contingent upon
his or her quick execution of the requested
representation. It sounds too good to be
true, and it almost always is.
Lawyers can avoid being taken in by a
scam by performing the due diligence expected of every professional relationship
formed.2 In fact, the New York City Bar has
determined that each lawyer’s duty to provide competent legal representation—expressed in Rule 1.1 of the Vermont Rules
of Professional Conduct3—“includes a duty
to exercise reasonable diligence in identifying and avoiding common Internet-based
scams, particularly where those scams can
harm other existing clients.”4 Additionally,
the Iowa Supreme Court cited that state’s
corresponding competence rule when it
suspended an attorney’s license for twelve
months because a “cursory internet search
¼ would have revealed evidence that [the
proposal] was probably based on a scam.”5
Apart from the general duty to provide
competent legal representation, specific
ethical considerations can arise in two separate instances: (1) to the prospective client (who may not actually be a scammer)
when an attorney spots what she thinks is
a scam; and (2) to the firm’s other clients
when an attorney falls victim to a scam.

the lawyer reasonably believes necessary ¼ to prevent the client from committing a crime or fraud that is reasonably certain to result in substantial injury to the financial interests or property of another and in furtherance of
which the client has used or is using
the lawyer’s services.8
The gray area that exists between the
duty of confidentiality owed to a prospective client and the duty to report a suspected fraudster imposes a responsibility on
a Vermont lawyer to investigate someone
who raises red flags in initial communications. Because “[t]he presumption of confidentiality gives way only if and when the
lawyer reasonably concludes that the purported client was not actually seeking legal services,”9 a lawyer must maintain confidentiality while gathering information.
However, a lawyer who determines the purported client is engaging in fraudulent activities may report that person to the proper authorities without fear of breaking confidentiality.
Thus, a targeted lawyer has a few options
when she receives a suspicious email. First,
the lawyer could simply delete the email.
The California State Bar Association Committee on Professional Responsibility and
Conduct advised that “[h]itting the delete

button may be the best course of action for
the attorney.”10 Until a lawyer responds to
an unsolicited email, she has no ethical obligations to the sender.11 If the lawyer does
respond, she must take proper precautions
to ensure that the prospective client is legitimate and maintain confidentiality until
she determines that the solicitation is propagating a scam.
When a lawyer is taken in by a scam, the
resultant problems can affect other clients.
A typical scam usually involves a check that
a lawyer deposits in the “firm’s trust account and, once the check has ‘cleared,’
the attorney transfers his contingent fee
into his operating account and wires the
remainder of the funds to a foreign bank
account designated by the email sender.”12
This chain of events often puts at risk other
clients’ funds, which were also being held
in the trust account. Rule 1.15 of the Vermont Rules of Professional Conduct governs the safekeeping of clients’ property in
the lawyer’s possession; it dictates that “a
lawyer shall not use, endanger, or encumber money held in trust for a client or third
person for purposes of carrying out the
business of another client or person without the permission of the owner given after
full disclosure of the circumstances.”13 The
rule also states that “a lawyer shall not disburse funds held for a client or third person

Ethical Considerations

When a lawyer receives a letter or email
from “[a] person who, in good faith, discusses with a lawyer the possibility of forming a client-lawyer relationship with respect
to a matter,” that person becomes a prospective client.6 A lawyer owes any prospective client a duty of confidentiality,
governed by Rule 1.6 of the Vermont Rules
of Professional Conduct.7 However, a lawyer does not owe the duty of confidentiality to someone who merely poses as a prospective client in order to defraud the lawyer. In fact, Rule 1.6 requires a ]