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Co-Chairs’ Corner
The Ethics and Professional Compensation Committee had a tremendous 2023! We strived to continue to provide our members with enlightening and useful substantive information, while also offering enjoyable and valuable social and networking opportunities.
During 2023, our committee offered a wide variety of opportunities for ABI members to learn about timely and interesting issues facing professionals in the bankruptcy arena.
No Vote, No Problem — Right? Novel Ethical Implications of a Subchapter V Bankruptcy Nonconsensual Plan
The Small Business Reorganization Act of 2019, also known as SBRA (Pub. L. No. 116-54), became effective on Feb. 19, 2020. This legislation allows a small business debtor to choose, during the filing process, to proceed under subchapter V within chapter 11.
Practical Overview of Lawyers’ Use of AI and Billing
Increasingly, consumer bankruptcy lawyers will be using AI in the future. It therefore is incumbent upon them to develop procedures and policies for its use and in billing for such services. Doing so will be a combination of art and science controlled by both ethical and practical considerations. Because its use is in an embryotic phase, standards are still being developed, and the area is plagued by a dearth of both case law and statutory guidelines. Practitioners also have to be cognizant that AI is a rapidly and ever-changing tool characterized by advances made on a constant basis.
First-Day Hearings and the Due Process Balancing Act
Due process is a fundamental right, reiterated in the foundational documents of the U.S. [2] All lawyers are taught and tested on the requirements of due process, both in a procedural and substantive context. As a review, “procedural due process” requires that the deprivation of life, liberty or property by adjudication be preceded by notice and opportunity for hearing appropriate to the nature of the case. [3]
The Importance of the Recent In re Palm Springs Fifth Circuit Decision
On April 17, 2023, the Fifth Circuit issued a decision that demonstrated considerable deference to the bankruptcy court’s determination that a senior lender affiliated with the debtor remained a “good faith purchaser” when submitting a credit bid to purchase the debtor’s real property. [2]
Can You Chat with a Bot About a Client’s Matter Without Revealing Client Information?
AI chatbots like OpenAI’s ChatGPT clearly have the potential to become useful tools in a lawyer’s toolbox. Of course, lawyers using AI chatbots, like lawyers using any other tools, must be mindful of their ethical obligations, including not only the duty to verify the accuracy of the results of legal research, but also the duty to maintain client confidentiality. In considering what client information can be used in prompting a chatbot, Rule 1.6 of the ABA’s Model Rules of Professional Conduct provides guidance, but not a bright-line rule.
Danger Ahead! Avoiding and Addressing Ethical Landmines in Attorney Engagement and Compensation
This panel will focus on disputes regarding engagement as counsel and payment of fees. The panel will cover such issues as unbundling of services, bifurcated fee arrangements and conflicts of interest. The panelists also will discuss a number of ethical issues that have arisen in recent cases.