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I am a consultant to a Medical practice and I run a managed…

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I am a consultant to...
I am a consultant to a Medical practice and I run a managed advisory services company in the same building as the Medical Practice. The owner (an MD) is a longtime friend of 45 years. Every aspect of the Medical practice is run by me EXCEPT for the clinical part of medicine. By this I mean the payroll, billing, hiring, terminating, equipment maintenance, building maintenance, legal issues, accounting, credit etc. The Doctor collects the fees and I charge the Doctor every week, a fixed amount, not based on the collected fee (to avoid fee splitting issues). The employees all work for my company at the Doctor’s location which is also my location. I am NOT a doctor. This model is becoming more and more common and I NEVER get involved in the clinical aspects or in setting time periods etc. to complete a procedure.
I hired an attorney to represent the Doctor in a lawsuit (not medical malpractice) in which the Doctor is the Plaintiff. It is strictly an economic based lawsuit related to overpaying on the original purchase price of the practice. Since I am the money and management person, I have been informing the attorney in the lawsuit as to what has occurred over the last 3 years. He has taken over from the previous attorney that the Doctor had hired and who has since resigned. The new attorney is similar to in-house counsel. He is on a 1099 so he is NOT an employee. The attorney has brought up some very nitpicky points. A few of them:
That he cannot use our supplies.
That he cannot use our address for mail and correspondence related to the case.
That he cannot discuss the case with me because I am not the Doctor (the lawsuit is in the Doctor’s name but I have been given 100% authority to handle it). I am in no way DIRECTING the attorney’s actions, just feeding him the info as I know it. I was also the accountant for the original purchase of the practice and the strategist for the original design of the lawsuit as I am the only one that has a true economic understanding of the situation. I was also the ONLY person deposed so far in the law suit.
I am I no way preventing the attorney from speaking with the Doctor, either with or without my presence. The Doctor always wants me there. While I have a vested interest in this I do not want to make the attorney uncomfortable. However, I am beginning to wonder if his issue is really that I am more knowledgeable then a typical client and if he fears that I might fire and replace him. My background is in Tax and Accounting and Credit with a Management Consulting MBA from a top business school. I am the one who hired him and I feel really pushed out by all this as I discussed the situation at the interview. I have a financial interest and I pay the attorney’s bill from my own funds.
That being said, is there a legal reason why the attorney wants me out of the loop as he has tried to go behind my back and asked the Doctor if the Doctor could eliminate me from the process. The Doctor promptly told me. I have not confronted the attorney yet and I will not confront him if it turns out that there is a basis for him being frightened of losing his license or some genuine ethical code that this violates.
THANK YOU
Submitted: 2 years ago.Category: Legal
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3/1/2016
Lawyer: Lucy, Esq., Attorney replied 2 years ago
Lucy, Esq.
Lucy, Esq., Attorney
Category: Legal
Satisfied Customers: 32,260
Experience: Lawyer
Verified

Hi,

I'm Lucy, and I'd be happy to answer your questions today. I'm sorry to hear about your situation.

Every state has their own rules of ethics that members of the bar must follow. They tend to be similar from one state to the next, but if you can tell me where you are located, I'll can make sure that the information I'm giving you is 100% accurate. Thank you.

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Customer reply replied 2 years ago
NJ
Lawyer: Lucy, Esq., Attorney replied 2 years ago

Thank you.

Conversations between the attorney and the client are privileged, which means that no one else can insist upon finding out what was said. Neither the lawyer nor the client can be called on to testify as to a privileged matter, and a person cannot be held in contempt of court for refusing to answer a question about a privileged matter. See Rule 1.6. The client here is the doctor, even though you're the one paying the bills.

The problem is, the presence of a third party destroys privilege. You can be subpoenaed to testify as to what they talk about. The doctor can be asked questions about conversations with the lawyer, because, by allowing a third party into the conversations, they're not confidential anymore. That is likely what the attorney is concerned with. Keeping you generally apprised of what's going on is allowed because you have a common interest in the outcome of the litigation, but there could be an issue if you sit in on all conversations.

He could also be worried that a dispute would arise between you, the billpayer, and the doctor, the client, about how to handle things - and he's obligated to follow the client's direction. Getting conflicting instructions from two people would put him in a very difficult situation. So that could also be part of the concern.

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Lawyer: Lucy, Esq., Attorney replied 2 years ago

The rule on that is 1.7, conflict of interest. A lawyer cannot represent someone if there is a significant risk that the lawyer's duty to his client will be limited by a third party.

If you have any questions or concerns about what I've written, please reply so that I may address them. If I did not address the specific thing that you wanted to know, it may not have come across clearly to me, so please restate that question. It's important to me that you are 100% satisfied with the service I provide. Otherwise, please rate my service positively so that I get credit for answering your question. Thank you.

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Customer reply replied 2 years ago
But I'm not limiting anything. And they can speak without me as I have stated. Also, I know accountants can be part of the privilege. And what if the client requests this situation?
Customer reply replied 2 years ago
also, I have already been deposed.
Lawyer: Lucy, Esq., Attorney replied 2 years ago

I know you're not limiting anything, but the lawyer might be concerned that you could in the future.

Accountant-client privilege is 100% separate from attorney-client privilege. The fact that you work as someone's accountant does not make conversations with their lawyer privileged. And the fact that you've been deposed is not relevant. There are many, many things a lawyer and client might want to talk about privately, and having a third party there means the other party might be able to get information they should not have.

A client cannot make a lawyer breach the rules of ethics. If he's worried about having a third party present, he can insist upon speaking without that person or withdraw from the case.

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Customer reply replied 2 years ago
The rule on that is 1.7, conflict of interest. A lawyer cannot represent someone if there is a significant risk that the lawyer's duty to his client will be limited by a third party.Which means that if there is not a significant risk, then it is ok? Does the rule prove the exception.
Lawyer: Lucy, Esq., Attorney replied 2 years ago

It's not about what you know. It's about what the opposing party might be able to do to get information THEY should not have.

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Customer reply replied 2 years ago
now when we say a third party present, does that mean at the same time? Because usually, we speak to him separately because of our different schedules.
Lawyer: Lucy, Esq., Attorney replied 2 years ago

Any conversations where you're sitting in the room are not privileged. But if the attorney is telling you what happened when he spoke with the client, that also breaks privilege. He can object to either.

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Customer reply replied 2 years ago
really only the client can speak to the attorney with no exceptions of any kind.
Lawyer: Lucy, Esq., Attorney replied 2 years ago

That's not an accurate statement. For example, opposing counsel MUST talk to the lawyer, not the party. But the lawyer can decline to speak to third parties about the case when he thinks doing so could jeopardize the client's rights.

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Customer reply replied 2 years ago
then this has no merit either?IN UNITED STATES V. KOVEL , THE SECOND circuit extended the attorney-client privilege to communications between a client and someone an attorney retains to provide accounting-related services. The court said that just as secretaries and clerks have been recognized as necessary to providing legal services, so should accountants.
ATTORNEY-CLIENT PRIVILEGE CAN extend to a broad array of parties having a relationship with an attorneys client based on U.S. Supreme Court Standard 503 and the Diversified Industries Inc. decision.
- See more at: http://www.journalofaccountancy.com/issues/1997/apr/segal.html#sthash.fnARdRZC.dpuf
Customer reply replied 2 years ago
It would be close to impossible for the client to explain all of the nuances of the accounting and the economics of this situation without the original accountant being there. Attorneys know less then noting about these issues as I have learned and was shocked at how mistaken they are (in general) in trying to understand the implications of how one economic error or mistatement affects the next.
Customer reply replied 2 years ago
THIS HAS NO IMPACT AT ALL?I FEEL HELPLESS THAT I CAN NOT HELP MY PARTNERIN UNITED STATES V. KOVEL , THE SECOND circuit extended the attorney-client privilege to communications between a client and someone an attorney retains to provide accounting-related services. The court said that just as secretaries and clerks have been recognized as necessary to providing legal services, so should accountants.
ATTORNEY-CLIENT PRIVILEGE CAN extend to a broad array of parties having a relationship with an attorneys client based on U.S. Supreme Court Standard 503 and the Diversified Industries Inc. decision.
- See more at: http://www.journalofaccountancy.com/issues/1997/apr/segal.html#sthash.fnARdRZC.dpuf
Customer reply replied 2 years ago
lthough federal courts recognize
that the attorney-client privilege
can protect communications
between corporations and
independent contractors who are the
“functional equivalent” of employees,
they disagree about the evidence required
to meet the functional equivalent test.
A federal district court in Pennsylvania
recently joined the debate, adopting a
“broad, practical approach” and rejecting
the “stringent, multi-factor” tests used by
some courts.
“The case law has not yet clearly established
what the criteria for being deemed
a ‘functional equivalent of an employee’
are so that privilege protection will attach
to communications. It is an evolving area
of the law,” says Edna S. Epstein, Chicago,
author of The Attorney-Client Privilege and
the Work-Product Doc
Lawyer: Lucy, Esq., Attorney replied 2 years ago

That case doesn't REQUIRE the lawyer to speak with you, either with or without the other party present. It doesn't give accountants an all-access pass to the case. And it depends on what is being discussed. Issues that have nothing to do with accounting wouldn't be protected.

Keep in mind that you're asking me to essentially speculate on why the lawyer doesn't want to talk to you. Privilege is one possibility. Conflict of interest is another, as I said. But the best way to find out what his actual concerns are is to ask him.

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Customer reply replied 2 years ago
WE did earlier when this was less formal, and thank you by the way. He said that I (meaning me) am a control freak (not true) and that he is afraid I will take over (definitely don't want that) and direct his activities since I direct everyone else. I certainly don't want to pay an attorney so I can sit there and do his work so that's ridiculous. But I do need an idea of what the expenses and length of time will be and what the chances of winning are.
Lawyer: Lucy, Esq., Attorney replied 2 years ago

It's not uncommon for lawyers to worry that third parties who want information on a case will try to direct and control what happens, especially when the third party is paying. I see this a lot when a parent is helping fund a case for an (adult) child. So I can understand that concern. The problem is, you can't compel him to talk to you - and the more you try, the may you might wind up reinforcing his beliefs in his own mind, even though that's not your intent.

If you need to be kept in the loop and he's not willing to speak to you, the recourse is to talk to the doctor about firing him and hiring another lawyer who will talk to you.

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Customer reply replied 2 years ago
I understand, but I am much more concerned about whether it can LEGALLY be done rather then what the attorney wants. I want to know if this is his subjective opinion or if its just him exercising his discretion or whether it is absolutely PROHIBITED. These are 2 different concepts. If it IS allowed and he explains why we wont do it I might even agree with him. BUT, he is saying, it is not allowed and that's a different story altogether.
Lawyer: Lucy, Esq., Attorney replied 2 years ago

Legally, the attorney doesn't HAVE to talk to anyone but his client. The only rules are the ones I gave you about confidentiality and conflict of interest. But everything in the law is open to interpretation. If, in his discretion, he's worried about a conflict of interest from including you in conversations, he doesn't have to. Or if he's worried that there could be a confidentiality issue down the line.

He ALSO has discretion to choose not to speak to you simply because you're not the client and he doesn't want to. That is his legal right under the First Amendment's guarantee of freedom of association.

What can be done legally, as I said, is to encourage the doctor to fire him. I don't believe that you'd be able to get a court order requiring him to talk to you about the case, and quite honestly, he'd probably quit if you tried.

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