Sunday, June 18, 2017

Professional Responsibility Committee of the California Bar issues opinion on whether a blog should be subject to advertising rules

The Standing Committee on Professional Responsibility of the State Bar of California recently issued an advisory opinion on whether “blogging” by an attorney is, or should be, subject to the requirements and restrictions of the Rules of Professional Conduct and related provisions of the State Bar Act regulating attorney advertising.  The answer, summarized below, is pretty straight forward and are pretty much what I suggested would be the logical answer to the question when I first blogged about it a few years ago (here).

The opinion is available here and the summary is as follows:

1. Blogging by an attorney is subject to the requirements and restrictions of the Rules of Professional Conduct and the State Bar Act relating to lawyer advertising if the blog expresses the attorney’s availability for professional employment directly through words of invitation or offer to provide legal services , or implicitly through its description of the type and character of legal services offered by the attorney, detailed descriptions of case results, or both.

2. A blog that is a part of an attorney’s or law firm’s professional website will be subject to the rules regulating attorney advertising to the same extent as the website of which it is a part.

3. A stand-alone blog by an attorney that does not relate to the practice of law or [that] otherwise express[es] the attorney’s availability for professional employment will not become subject to the rules regulating attorney advertising simply [even if] the blog contains a link to the attorney or law firm’s professional website.

Nevada may become the first jurisdiction to adopt controversial ABA Model Rule 8.4(g)

Back in January I wrote a long post on a proposal to amend Model Rule 8.4 to make it a sanctionable offense to engage in harassment or discrimination.  I thought that the original proposal was problematic for a number of reasons.  Some of the problems I thought of originally were addressed (and fixed) in subsequent versions of the proposal, but I still have some concerns. Go here for some of my comments

The ABA eventually adopted the amendment and enacted a Model Rule 8.4(g).  Despite strong support for it within the ABA, not everyone agreed it was a good idea.  See here for example.  The Texas Attorney General issued an opinion concluding it is unconstitutional.  So did the Montana legislature in a resolution.  Pennsylvania rejected it and instead adopted the approach used in Illinois, which is different from the one suggested by the ABA.  Illinois rejected adopting the new rule too.  So did the Professional Responsibility Committee of the South Carolina Bar.

So far, no jurisdiction has adopted the Model Rule.  It is still too early to say that it has been a failure but at least some within the ABA are frustrated the reaction has not been more positive.

Now comes news that Nevada may become the first state to adopt the new rule, although according to this commentator, the state is being misled by the rules proponents.

Virginia Supreme Court makes revisions to lawyer advertising rules which streamline the rules and reduce their number

Back in May I reported that the Virginia Supreme Court announced it was going to adopt new lawyer advertising rules.  See here.  The new rules are now in place.  You can find a copy of the new rules here.

Saturday, June 10, 2017

Illinois decision provides good test for discussion of Constitutionality of new ABA Rule 8.4(g) -- UPDATED

As I am sure you know by now, the ABA recently approved an amendment to Model Rule 8.4 to make it misconduct to use discriminatory or biased speech.  The amendment is now Model Rule 8.4(g) which you can find here.  Back in January I wrote a long comment on the original proposal, which was changed before it was approved last month.  The approved version improved some of the issues I had originally objected to, but I still have reservations about the approved language. My main concern is that the language seems to punish protected, even if offensive speech.  You can read my most recent comments on it here and here

In one of my comments I posed asked rhetorically whether the new rule could survive a Constitutional attack.  So to pursue the question with some real facts, here is a good example.

The Legal Profession blog is reporting that a recent Illinois Hearing Board report recommended sanctions on an attorney who, among other things, “used demeaning and insulting language” toward the father of a client.  The father, by the way, was supposed to pay for the client’s representation which courts in Illinois have found makes him a client too.  The report lists some of the statements in question as follows: 
You are a piece of garbage. All black people are alike. You're slovenly, ignorant. [...]

I'm sick of you, you piece of shit.

I don't know who's the biggest bitch. You or [___]. I'm going to lock you up.

Low class n#!*s. I'm going to have you all locked up. [...]

You are such a pussy. ...

You're ugly, low class, ignorant. I'll finish with you when he gets off. You're demeaning your son.

Help your son. Pay. Stop delaying case.
Given those statements, the attorney was charged with a violation of Illinois Rule 4.4, which states that “[i]n representing a client, a lawyer shall not use means that have no substantial purpose other than to embarrass, delay, or burden a third person, or use methods of obtaining evidence that violate the legal rights of such a person.”

Personally, I don’t think that Rule 4.4 was meant to address this type of conduct; it is not meant to address the use of offensive speech directed at client.  It seems to me a better rule to use in a case like this would be the section of Illinois Rule 8.4(d) that talks about engaging in conduct that is prejudicial to the administration of justice. 

However, since 8.4 is also not squarely on point, it can be argued that the fact that the lawyer was charged under 4.4 rather than under another rule that may be more “on point” shows the need to adopt a new rule that would address this type of conduct. 

But what if that rule is adopted?  What if Illinois had adopted the new Model Rule 8.4(g)?  It seems to me this would be a good case to have a court decide the issue I have been writing about all along.  The conduct is deplorable and the speech is offensive; but the First Amendment protects against the state imposing sanctions on speech merely because some might find it offensive.

In the end, I think the issue comes down to deciding whether the state can support the argument that regulating offensive speech by lawyers outweighs the lawyer’s constitutional right to utter offensive statements.  If the answer is yes, the facts of this case are a good example to use in support of the adopting the new rule.  If the answer is no, then the facts of the case can be used as an example of the consequences of the Constitutional protection of what some might believe to be offensive speech. 

UPDATE 6/10/17: The Illinois Review Board has recommended a 60 day suspension. The Legal Profession blog has an update here

Sunday, June 4, 2017

Magistrate imposes sanctions on lawyer for making too many improper objections during deposition -- UPDATED

I have often complained that judges don't do enough to discourage misconduct by lawyers during discovery in civil trials, which I think is very important because most civil trials settle on the basis of what happens during discovery. 

For this reason, I was glad to read a story in the ABA Journal about a recent case in which a federal magistrate imposed sanctions on New York City because of the conduct of one of its lawyers during a deposition.  The lawyer reportedly made more than 600 improper objections which lengthened the deposition, may have influenced the answers of the witness and prevented the witness from answering questions even though there was no basis to do so.  The lawyer's conduct was so improper that the lawyer taking the deposition had to interrupt the deposition in order to call the judge’s chambers to seek guidance.

The conduct was clearly improper, and I am glad the magistrate imposed sanctions.  I wish, however, that the sanctions could have been harsher.   Unfortunately, given the recent US Supreme Court decision in Goodyear v Haeger, the power to impose sanctions for discovery misconduct is now more limited.  I did not like the result in that case, which I think eliminates one of the few ways in which courts can try control discovery abuse, but that is a different and longer topic.

UPDATE 6/4/17:  The Law for Lawyers Today has a comment here.

Tuesday, May 23, 2017

New ABA Ethics Opinion on duties related to the use of modern technology -- UPDATED

The ABA Standing Committee on Ethics and Professional Responsibility recently issued Formal Ethics Opinion 477, which updates Formal Ethics Opinion 99-413, and which addresses different duties related to the use of modern technology.

The opinion concludes that "[a] lawyer generally may transmit information relating to the representation of a client over the internet without violating the Model Rules of Professional Conduct where the lawyer has undertaken reasonable efforts to prevent inadvertent or unauthorized access. However, a lawyer may be required to take special security precautions to protect against the inadvertent or unauthorized disclosure of client information when required by an agreement with the client or by law, or when the nature of the information requires a higher degree of security."

This does not strike me as new or surprising.  It essentially reinforces a duty already in place in Rule 1.6(c) of the Model Rules of Professional Conduct which states that a lawyer "shall make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client."

What is new (but I don't know if surprising) is that the committee declined to draw a bright line as to when encryption or other security measures would be required. Instead, the committee recommended that lawyers undergo a “fact-based analysis” that includes evaluating factors such as the sensitivity of the information, the likelihood of disclosure if additional safeguards are not employed, the cost of employing additional safeguards, the difficulty of implementing the safeguards, and the extent to which the safeguards adversely affect the lawyer’s ability to represent clients.  Thus, some cases may require lawyers to use encryption, while others might not.  

For a good explanation of the opinion go here, and here.

UPDATE 5/23/17:   Formal Opinion 477 has been revised to clarify that the opinion does not alter Formal Ethics Opinion 11-459 and to note that the change in Model Rule 1.6(c) supported 11-459. There is no substantive change in the opinion. The revised opinion can be found here.  For a good analysis of the opinion go here.

Saturday, May 20, 2017

Wednesday, May 17, 2017

North Carolina is considering amending its rules to make it easier for lawyers to participate in Avvo Legal Services

Long time readers of this blog know that I have been following and writing about the debates related to Avvo Legal Services for some time now.  For an article on my position on the subject go here

As you may remember Avvo has attempted to argue that lawyers should not worry about participating in Avvo Legal Services because doing so does not violate rules of professional conduct, or, if it does, because the rules are unconstitutional.  Yet, all the opinions issued so far have concluded that Avvo is wrong.  And that is because under the current regulatory scheme in pretty much all states, Avvo’s arguments are weak. 

Having said that, however, note that the key to the previous statement is “under the current regulatory scheme.”  Saying that participating in Avvo Legal Services would violate the rules is not the end of the debate.  The more interesting question is whether the rules should be changed to accommodate what Avvo wants to do. 

Today’s update on this story is that instead of continuing to argue that the rules don't apply or that they should be ignored, Avvo apparently has been trying to convince the North Carolina regulators to change the rules.  As a result, North Carolina may soon become the first state to change the regulatory approach in order to formally make it acceptable for lawyers to participate in services like Avvo Legal Services.  (Interestingly, as you might remember, North Carolina also amended its definition of the “practice of law” as part of an agreement with LegalZoom.)

According to documents I have reviewed, as a result of meetings between Avvo and a committee of the State Bar Association, the committee has drafted a proposal to amend several rules of professional conduct, including Rule 5.4, which bans splitting fees with non-lawyers.  The proposal would add a new paragraph to the rule to state that “a lawyer may pay a portion of a legal fee to a credit card processor, group advertising provider or online platform for identifying and hiring a lawyer if the amount paid is a reasonable charge for administrative or marketing services and there is no interference with the lawyer’s independence of professional judgment or with the client-lawyer relationship.”

Adoption of this new rule would be good news for Avvo, but would not necessarily clear the way entirely.  One point of contention within the committee was whether Avvo’s rating system operates as a recommendation to consumers which would result in a violation of rule 7.1 if lawyers were to pay Avvo for recommending them, particularly since Avvo does not disclose the basis of the rating system.  Within the committee, this created a concern over whether Avvo is providing recommendations that are not based on legitimate criteria because the rating system is not transparent since it does not provide information on the factors used to create the rating.

To address this concern, there is now a proposal to add a new paragraph to the comment of Rule 7.1 to state (in part) that “A lawyer may participate in online directories and other rating systems that allow the lawyer to “claim” the lawyer’s profile and to provide information for inclusion in the profile or to be used to rate the lawyer.  The information provided by the lawyer must be truthful and not misleading.  No money may be paid by the lawyer for a rating and, before voluntarily providing information to an online rating system, the lawyer must determine that the rating system uses objective standards that are verifiable and would be recognized by a reasonable lawyer as establishing a legitimate basis for evaluating the lawyer’s services. . . .”

If it is true that Avvo does not disclose the basis of its ratings, I am not clear how a lawyer can meet these requirements. 

Finally, as one would expect, another concern is whether allowing Avvo to retain the consumer’s payment until the lawyer finishes providing the legal services constitutes a violation of the lawyer’s duty to safeguard client’s funds in a trust account and to contribute the interest generated by that account to the state’s IOLTA program.

To address this concern, Avvo has suggested an amendment to the comment of the rule on safeguarding property, but it is not clear that the committee of the State Bar has adopted it.  Avvo’s proposal is to add a new paragraph to the comment to read: “Client or third person funds sometimes pass through, or are originated by, intermediaries before reaching the lawyer’s account.  Such intermediaries have traditionally included banks, credit card processors, or litigation funding entities, and have been chosen unilaterally by the client.  However, newer intermediaries include attorney marketing programs, chosen by the attorney, that collect payments directly from clients and pass them through to the attorney.  Attorneys have an affirmative obligation to ensure that such intermediaries 1) adequately protect client funds and 2) do not retain client funds for a period [of time] that materially impacts i) the client’s opportunity to earn interest on the funds, or ii) the availability of interest earnings for [state legal services organization that receives IOLTA interest, if applicable].  Absent other indicia of fraud (such as the use of non-industry standard methods for collecting credit card information), an attorney’s diligence obligation will be deemed met with respect to intermediaries that collect client funds using credit or debit cards and remit such funds to attorney accounts within [ ] days.”

As of now, I don’t know if the State Bar proposal will include this suggested language.  It is not included in the copy I have, but there may be more documents I have not seen yet.  Clearly, Avvo's goal is to exempt lawyers from having to deposit client money in a trust account, at least for some, as of yet not determined, period of time.  For those who have argued the rules about trust accounts should be abandoned or relaxed, this would not be a problem.  But for those who think they need to be followed strictly in order to protect clients, this proposal might be a problem.  The North Carolina rules regarding trust accounts can be found here.

The documents I have seen about these proposals are all from within the last three months, but I do not know what is the current status of the proposals.  It remains to be seen if they will be adopted by the State Bar Ethics Committee.

Stay tuned.

Tuesday, May 16, 2017

Florida Supreme Court dismisses Florida Bar’s petition proposing substantial revisions to lawyer referral service rules

Back in 2015, the Florida Supreme Court rejected amendments to state regulations on referral services and directed the State Bar to instead draft amendments that would “preclude Florida lawyers from accepting referrals from any lawyer referral service that is not owned or operated by a member of the Bar.”  See, In re Amend. to Rule Reg. The Fla. Bar 4-7.22—Lawyer Referral Services, 175 So. 3d 779, 781 (Fla. 2015).

The State Bar went back to work and adopted a new proposal in 2016, but this new proposal was recently rejected again by the Supreme Court because it still allowed attorneys to accept referrals from entities owned and operated by non-lawyers. 

What is interesting about this story is that the new proposal was adopted to make it easy for entities like LegalZoom, RocketLawyer and Avvo to participate in the state’s legal market.  To this end, under the new proposed amendments any private entities that connect consumers looking for legal services with lawyers would have been called “qualifying providers” regardless of whether they were “traditional” referral services or a technology-based “lead generator” (like Avvo, RocketLawyer or LegalZoom).

The Court however, rejected the proposal stating that the proposed amendments “do not comply with the Court’s direction concerning lawyer referral services that are not owned or operated by a member of the Bar” and it objected that the proposed amendments “seek to expand the scope of the rule to include “matching services” and other similar services not currently regulated by the Bar.”  This last reference, obviously, is directed at services like RocketLawyer, Avvo and LegalZoom.

Having said all that, however, the debate is not over.  The Court again sent the issue back to the State Bar stating that “the Bar’s petition in this case is . . . dismissed without prejudice to allow the members of this Court to engage in informed discussions with the Bar and those who are in favor or against the proposed regulation of matching and other similar services. The Court lacks sufficient background information on such services and their regulation at this time.”

In other words, it is still possible that the Court will adopt the proposed amendments; it just won’t do it at this time.

The Court’s order is officially called In Re: Amendments to the Rules Regulating The Florida Bar-Subchapter 4-7 and you can read it here.

Thanks to Lawyer Ethics Alerts Blog for the update.

Monday, May 15, 2017

NPR article on one example of prosecutorial misconduct

NPR has published an interesting short article chronicling a criminal case recently dismissed because of prosecutorial misconduct.  The title says it all:  "'This Was A Colossal Screw-Up': A Close Look At A Case Dismissed For Misconduct."