FRANKFORT — Less than two weeks after two disbarred lawyers were convicted of what some say is the greatest legal theft in the state's history, the Kentucky Supreme Court unveiled new rules governing attorney conduct on Thursday.
The overhaul — the first of its kind in 20 years — includes a provision that would require attorneys to report misconduct on the part of another attorney or a judge.
Other tweaks include changes to rules about contingency-fee agreements, confidential information, trial publicity and the unauthorized practice of law.
The changes are scheduled to take effect July 15.
The overhaul was nearly six years in the making. A Kentucky Bar Association committee began looking to change the professional standards in 2003, after the American Bar Association adopted a Model Rules of Professional Conduct in 2002. Public hearings on the changes were held in 2007 and 2008. The Supreme Court signed off on the 153-page document Thursday.
"The revised rules reflect thoughtful changes that will bring Kentucky into line with national standards for attorney conduct," Chief Justice John D. Minton Jr. said. "Our goal is to improve public confidence in our state's legal profession by strengthening attorney accountability."
Some of the changes in the rules go into greater detail about prohibited behavior or are the result of changes in technology.
But the biggest change is the requirement that lawyers would have to report suspected misconduct of a judge or a lawyer or face disciplinary action. Other states with similar policies have found the reporting requirements to be an effective tool in rooting out misdeeds, legal scholars said Thursday.
Some lawyers have misgivings about turning in one of their own or even turning in a more senior colleague in a law firm, said Linda Gosnell, chief counsel for the Kentucky Bar Association and a member of the committee that helped draft the proposed changes.
"It's going to establish for the bar an expectation that members of the bar will intercede when a lawyer is engaged in serious misconduct," said William Fortune, a University of Kentucky College of Law professor who helped advise the committee on the changes. "And in some instances, it could prevent a lawyer from doing something injurious to the public."
The last time the rules were revised was in 1989.
Included in some of the changes is specific language about attorney conduct when he or she represents multiple clients, which was at issue in the recent criminal trial of former lawyers Shirley Cunningham Jr. and William Gallion.
The two men were accused of taking millions of dollars from 440 former clients they represented in a 2001 settlement over the diet-drug fen-phen. Federal prosecutors, in a nearly seven-week trial, said the men deliberately lied to their clients about the details of the $200 million settlement and failed to communicate with their clients.
Evidence during the criminal trial showed that Cunningham and Gallion did not tell their clients that a settlement had been reached and did not ask their clients' permission to settle the case. The new rules contain language that says a lawyer must obtain written permission signed by the client to settle a case.
Gosnell said the change was not prompted by the fen-phen case. Those changes were adopted directly from the American Bar Association's model code.
Cunningham and Gallion were each convicted of conspiracy and eight counts of wire fraud on April 3. A jury has said they need to repay their clients $30 million in addition to turning over more than $20 million of the settlement money that was placed in a non-profit. Cunningham and Gallion were disbarred by the Kentucky Supreme Court in October 2008.
Angela Ford, a Lexington lawyer who represents the former fen-phen clients in a civil lawsuit, said it's unlikely — even if someone had reported Gallion, Cunningham and a third lawyer on the case, Melbourne Mills Jr. — that it would have prevented the lawyers from taking the additional money. But she hopes that more lawyers will now step forward and not be afraid if they spot serious improprieties.
"I think it will force more lawyers to report misconduct in other cases," Ford said. "Any kind of serious misconduct is more obvious to someone in the profession. There are a lot of lawyers who are very, very hesitant to report another lawyer or a judge. I get calls from lawyers all the time who talk about a judge's behavior but never do anything about it because they're scared to."