The recent surge of States that have chosen to legalize marijuana through the legislative process is in direct conflict with federal law. To produce, process, possess, transport, or sell marijuana is a violation under the Controlled Substances Act (CSA). The tension between state and federal laws creates a dangerous ethical situation for any unsuspecting lawyer. The Model Rules of Professional Conduct pose a large hurdle for any lawyer hoping to engage with law-abiding (or not) cannabis entrepreneurs. For example, Model Rule 1.2(d) states:
A lawyer shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent, but a lawyer may discuss the legal consequences of any proposed course of conduct with a client and may counsel or assist a client to make a good faith effort to determine the validity, scope, meaning or application of the law.
If interpreted narrowly, Model Rule 1.2(d) prohibits lawyers from counseling any person or any entity that even remotely relates to cannabis. While the state the lawyer practices in may have its own laws about marijuana consumption and sale, prohibition of this Schedule I drug still exists at the federal level. As a result, any marijuana-related conduct is technically “criminal” under this rule. The remainder of this rule does not help clarify what a lawyer is to do in a situation like this, but comment [9] of Model Rule 1.2(d) offers some guidance, reading:
Paragraph (d) prohibits a lawyer from knowingly counseling or assisting a client to commit a crime or fraud. This prohibition, however, does not preclude the lawyer from giving an honest opinion about the actual consequences that appear likely to result from a client’s conduct. Nor does the fact that a client uses advice in a course of action that is criminal or fraudulent of itself make a lawyer a party to the course of action. There is a critical distinction between presenting an analysis of legal aspects of questionable conduct and recommending the means by which a crime or fraud might be committed with impunity.
Still, the difference between “presenting an analysis” and “recommending” a course of action in this case is a slippery slope, separated merely by what seems to be little more than sentence construction; “here is the legal analysis and possible consequences of forming a cannabis-related entity in this State” versus “here is how you should go about forming your cannabis-related entity in this State to comply with local and state laws.” Model Rule 1.2(d) shifts a lawyer’s focus from external, acting as an advisee, to internal, attempting to avoid sanctions under the Model Rules. This shift cuts against Model Rule 2.1, which says:
In representing a client, a lawyer shall exercise independent professional judgment and render candid advice. In rendering advice, a lawyer may refer not only to law but to other considerations such as moral, economic, social and political factors, that may be relevant to the client’s situation.
A lawyer cannot be truly candid if she is primarily concerned with her own interests—avoiding ethical sanctions. Model Rule 2.1 offers a small amount of leeway for lawyers by acknowledging that they may refer to current moral, economic, social, and political factors in offering “candid advice.” Still, in a field like cannabis-law, these types of factors are anything but stable. To defend oneself against ethical allegations under the Model Rules on nothing more than circumstantial evidence of fluctuating social norms would be difficult.
Even if a lawyer chooses to look past Model Rule 1.2(d), she is at risk of violating other rules in the course of fully and competently representing her cannabis client. Model Rule 8.4(b) and (c) state: “It is professional misconduct for a lawyer to: (b) commit a criminal act that reflects adversely on the lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects; (c) engage in conduct involving dishonesty, fraud, deceit or misrepresentation[.]”
One common and easy way in which a lawyer may violate Model Rule 8.4(b) and (c) is in relation to the banking and financial aspects of a cannabis client. Nearly all banks, being federal institutions, refuse to work with any person or entity connected to cannabis in any capacity. To do so would make banks liable for money laundering under federal law. In People v. Furtado, No. 15PDJ056 (Colo. 2015), a Colorado lawyer was found to have violated Model Rule 8.4(b) and (c) when he knowingly established and chose not to disclose the purpose of a bank account related to the payment of taxes and bills of a cannabis client at a bank that had a no-tolerance policy for any cannabis-related business. As such, many lawyers understandably choose to avoid cannabis-related matters altogether.
Model Rule 1.2(d), in conjunction with rules such as Model Rule 2.1 and Model Rule 8.4(b) and (c), disincentivizes lawyers from diving into a booming industry in desperate need of sound legal advice. Moving forward, States can follow one of three courses of action in the enforcement of the Model Rules of Professional Conduct. States can (1) choose not to enforce the rules, (2) interpret the rules such that they do not apply to cannabis-related conduct if the conduct is legal under state law, or (3) change the rules to offer more guidance on whether or not the rules will apply to cannabis-related conduct.
Sixteen (16) states— Arizona, Colorado, Connecticut, Florida, Hawaii, Illinois, Maryland, Minnesota, Nevada, New York, Ohio, Oregon, Pennsylvania, Vermont and Washington, along with the District of Columbia—have modified Model Rule 1.2(d) to offer more guidance. For example, the Supreme Court of Illinois amended the Illinois Rules of Professional Conduct, Rule 1.2(d) as follows:
A lawyer shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent, but a lawyer may
(1) discuss the legal consequences of any proposed course of conduct with a client,
(2) and may counsel or assist a client to make a good-faith effort to determine the validity, scope, meaning or application of the law, and
(3) counsel or assist a client in conduct expressly permitted by Illinois law that may violate or conflict with federal or other law, as long as the lawyer advises the client about that federal or other law and its potential consequences.
Essentially, Illinois’s modification of Model Rule 1.2(d) allows a lawyer to advise a cannabis client as long as she puts the client on notice of the conflicting federal law and its potential consequences. Many of the other sixteen (16) States have taken a similar approach. However, in the States that have not expressly taken a stance on the matter, lawyers are still stuck in the catch-22 described earlier. One other place in the Model Rules that may offer guidance to a lawyer that wants to partake in this field is the Preamble, which outlines a lawyer’s responsibilities. Section [9] of the Preamble of the Model Rules of Professional Conduct acknowledges:
Virtually all difficult ethical problems arise from conflict between a lawyer’s responsibilities to clients, to the legal system and to the lawyer’s own interest in remaining an ethical person while earning a satisfactory living. The Rules of Professional Conduct often prescribe terms for resolving such conflicts. […] Such issues must be resolved through the exercise of sensitive professional and moral judgment guided by the basic principles underlying the Rules.
The “basic principles underlying the Rules” can be found in Section [2] of the Preamble, which instructs lawyers to be representatives, advisors, advocates, negotiators, and evaluators to clients.
Currently, there is no “right” or “wrong” answer to the ethical question of whether or not a lawyer may advise a client on cannabis-related matters in a State that has legalized said conduct. Lawyers can choose to forego advising clients in this emerging field, or lawyers can proceed with the knowledge that they are at risk of ethical proceedings and sanctions as a result of the normal and ordinary course of advising clients. The only way forward is for State legislatures to modify their Model Rules of Professional Conduct such that they align with recent changes to the legalization of cannabis, or for the federal government to end the prohibition against cannabis. Until one, or both, of these events occur, lawyers, clients, businesses, and society will continue to suffer as a result of the lack of concrete and unified legal counsel in an emerging field that needs guidance the most. At its roots, this question is one that must be answered by the legislature in the form of policy-making, not by lawyers on an individual, case-by-case basis.
-Zoe Lanier
