At the recent AAML/BVR divorce conference in Las Vegas, one of the sessions that drove home the advantages of an interdisciplinary discussion was on ethics. It featured Marie Ebersbacher (CBIZ MHM LLC), an appraiser and financial forensics expert, and Lawrence Moskowitz (Perry, Johnson, Anderson, Miller & Moskowitz LLP), a family law attorney, discussing dicey ethical issues that often arise while working on a divorce or any other engagement.
In “Ethics Violations: How to Avoid the Letter No One Wants to Receive,” the speakers analyzed various hypotheticals from their vantage points as expert and attorney and explained how, as professionals with different roles to play in litigation, they could ensure they followed their profession’s rules of ethics and also worked together effectively and efficiently.
Different roles: Moskowitz explained that an attorney is retained to apply legal theory to a case and advocate on the client’s behalf. Under the applicable Rules of Professional Conduct (RPC), the lawyer must be competent and diligent. Diligence means being committed to the interests of the client and being a zealous advocate for the client. In contrast, the expert, under Federal Rule of Evidence 702, is there to assist the trier of fact. Ebersbacher explained that doing so means educating the court and the jury by providing an analysis based on observable data and facts.
In an informative exchange, the speakers made clear how this difference may play out in real life. What happens, for example, if the expert does an analysis for an attorney representing the owner spouse and arrives at a capitalization rate of 25%, while the attorney, aiming for a low valuation (which benefits the owner-client), prods the expert to use a higher cap rate? If you are the expert, don’t take instructions on this matter from the attorney, Ebersbacher cautions. She notes that anytime an expert’s position on an issue is easily rebuttable by the opposing party, that expert’s testimony risks being dismissed in court as biased.
Moskowitz, giving the attorney’s perspective, notes that, as an advocate for the client, the attorney will not offer an expert opinion that may hurt the client’s case. But Moskowitz also points out that, under the applicable rules, an attorney has a duty of candor toward the court and an obligation to be truthful in statements to others.
Takeaways: The attorney advocates for the client, but the expert must only advocate for his or her opinion. Experts and lawyers need to know, and follow, the rules of ethics that apply to their professions in the state in which they practice. Remember, different jurisdictions have different rules.
An extended discussion of this ethics session and additional coverage of the divorce conference will appear in the July edition of Business Valuation Update.