CHAPTER 10 ETHICAL ISSUES FOR IN-HOUSE COUNSEL AND LANDMEN

• Jurisdiction: United States

Oil and Gas Agreements: Surface Use in the 21st Century (May 2017)
CHAPTER 10
ETHICAL ISSUES FOR IN-HOUSE COUNSEL AND LANDMEN
Jack M. Tanner
Director
Fairfield & Woods P.C.
Denver, CO

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JACK M. TANNER helps solve business disputes, employing traditional and atypical litigation tactics to obtain the best results for his clients. He has represented clients in all aspects of complex commercial litigation and arbitration, including oil and gas, contracts, business torts, receiverships, intellectual property, and construction matters. He clients have included Noble Energy, Microsoft, and Time Warner Telecom. Mr. Tanner has served on the Colorado Bar Association Ethics Committee since 1996, and is a frequent lecturer on legal ethics, particularly ethics for in-house counsel. He has authored several articles on legal ethics, including "Top 10 Things In-House Lawyers Ned to Know About Ethics," 45 Colo. Law. No. 7, p. 59 (July, 2016) and "The New Rules of Professional Conduct: Significant Changes for In-House Counsel," 36 Colo. Law. No. 11, p. 71 (November, 2007). He also regularly speaks and writes on ethical issues for landmen under the AAPL Code of Ethics, and the interaction between that and legal ethics. Mr. Tanner has practiced with the Denver, Colorado full-service business law firm of Fairfield and Woods since 1987. After graduating from Duke Law School (with honors) in 1986 and prior to joining Fairfield and Woods, he served as law clerk to Justice (later Chief Justice) Luis Rovira of the Colorado Supreme Court.

Introduction

Many Landmen are also licensed lawyers. The ethics required by each profession, however, may differ at times and require different conduct. Even if one is only a lawyer or a landman, knowing the ethical requirements of both will be of advantage. What follows is a brief analysis of some situations that Landmen/Lawyers may routinely face in their jobs when negotiating contracts.

Ethical framework

Ethical Rules for landmen are set by the American Association of Professional Landmen ("AAPL"), the largest trade association of landmen in the country. The AAPL Code of Ethics ("Code") itself is only two sections and runs a single page.¹ In addition to the Ethics Rules, there are the "Best Practices" for Landmen.²

The AAPL's wants to "police its own" so as to avoid the formal legal/regulatory supervision of land management, as is done in most other professions. The maximum punishment it can give is expulsion from AAPL. The AAPL is actively promoting itself so reputable organizations will not hire landmen that are not AAPL members.

Each state sets its own ethical rules for lawyers. Most state codes of ethics are modeled on the ABA Model Rules of Professional Conduct ("Model Rules").³

Almost every state modifies the Model Rules when adopting them, and so anyone identifying an issue in this paper should refer to his or her own state's rules of ethics. Typically, ethical rules for lawyers are enforced by the state's judicial system. Penalties can include everything from private admonitions to being disbarred, and even jail time for the unlicensed practice of law.

Scenario #1--duties to the opposing party and one's employer when negotiating surface agreements (or anything else).

Code §1 provides that it is the primary duty of a landman is to establish and maintain goodwill with the public. Best Practices 3, 4, & 5 require that the landman protect the public from discredit or damage from fraud, misrepresentation, unethical practices, and treat all parties fairly.

A lawyer's general ethical requirement is to represent the client. The Preamble to the Model Rules provides "As negotiator, a lawyer seeks a result advantageous to the client but consistent with the requirements of honest dealings with others."

Hypothetical #1

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Landman/Lawyer ("LL") is both a Certified Professional Landman ("CPL") and...