Monday, September 18, 2017

ACLU files lawsuit to block customs and border searches of electronic devices

Last week I reported that the New York City Bar Association  issued an ethics opinion holding that lawyers must take reasonable precautions to protect confidential information if the lawyer is searched by U.S border/customs agents.

In a related story, now comes news that the ACLU and the Electronic Frontier Foundation have sued the Department of Homeland Security to block U.S. Customs and Border Protection personnel from searching travelers’ electronic devices without warrants.

TechDirt has a comment here.  The Law for Lawyers Today has more information here.  You can read the complaint here

Sunday, September 17, 2017

How do we (or should we) define "the practice of law"?

How we define "the practice of law" has been a difficult question for a long time.  At one point, the ABA created a task force to propose a model definition which was eventually disbanded because it could not reach a viable solution.  And, more importantly, the answer to the question has tremendous implications.

The whole notion of regulation is based on the justification that there is something to regulate and that there is a reason for the regulation.  We have a hard time justifying it if we can't define what it is we are trying to regulate and why.  Likewise, the principle that lawyers need to be "admitted" to practice in a jurisdiction to be able to engage in the practice of law in that jurisdiction is equally shaky if we can't find a way to justify it.

Both principles are under attack.  There is an ongoing debate on whether lawyers admitted in one jurisdiction should be allowed to practice in all other jurisdictions.  In some jurisdictions, non-lawyers are allowed to engage in activities that could be considered to be the practice of law, and there are efforts in other jurisdictions to start allowing it.  Many are arguing for the elimination of rules that prevent lawyers from partnering up with non lawyers.  The use of technology has opened the door for computers to perform tasks that used to be performed by lawyers.  And now Congress is considering legislation that would affect the regulation of the profession.

Where will it all lead?  I don't know.   But the discussion starts with the basic question: what is the practice of law?

Prof.  Ronald Rotunda's most recent column at Justicia addresses the issue.  You can read it here.

Monday, September 11, 2017

Duty of confidentiality at the border

Given a number of recent reports that people's phones are being "searched" by customs officials when entering the US or other countries, it is not surprising to know that the New York City Bar Association recently issued an ethics opinion holding that lawyers must take reasonable precautions to protect confidential information if the lawyer is searched by U.S border/customs agents.  You can read the opinion here: NYCBA Opinion 2017-5.

Although the specific context in which the topic is discussed, the actual content of the opinion is nothing new or surprising.  It is merely an application of the principle already expressed in Model Rule 1.6(c) 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."

Since the duty is to take reasonable measures to protect the information, the fact that the information is disclosed, by itself, would not result in a violation of the rule.  Whether an attorney violates the rule, will depend on the reasonableness of his or her efforts to protect the information, Thus, the key question is what will be considered "reasonable."

On this, the opinion restates the comment to the Model Rule which explains that reasonableness will depend on may factors and that factors to be considered in determining the reasonableness of the lawyer’s efforts include, but are not limited to, 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 (e.g., by making a device or important piece of software excessively difficult to use).

The opinion then adds that the simplest way to avoid a problem is to not possess any client confidential information when crossing the border and instead opting for other alternatives such as carrying a “burner” telephone, laptop computer, or other digital device, removing confidential information from digital devices, signing out of cloud-based services, uninstalling applications allowing remote access to confidential information, storing confidential information in secure online locations rather than locally on digital devices, and using encrypted software.

Saturday, September 9, 2017

How not to practice law: videotape co-worker while she is undressing in the office

It has been a while since I have posted an entry into the "How not to practice law" series, a series of posts about incredibly stupid things that lawyers do.  Past examples include the "typical" showing up drunk, judge having someone deciding case for them, lying and so on.

Today's story involves a lawyer who had the bright idea to place a secret camera in a colleague's office so he could record her changing clothes.  When caught, he was indicted and charged with a felony, after which he pled guilty to a reduced charge.  Now he is facing disciplinary charges for violating Illinois Rule 8.4(b) (committing a criminal act that reflects adversely on the lawyer’s honesty, trustworthiness, or fitness as a lawyer in other respects.)

You can read the disciplinary complaint here and a summary here.

All kidding aside, though, it is often the case that many of the stories in the "how not to practice law" series involve personal issues such as addiction, alcoholism, inability to control urges (whether based on greed or sexual desire) and so on.  That is troubling and sad, but lawyers need to know that their role requires professionalism, discipline and the ability to stay in control.  If you or someone you know has these types of issues, get help.  Bar associations have lawyer assistance programs or access to other alternative.  Everybody makes mistakes; but often those mistakes will cost lawyers their livelihood.

Sunday, September 3, 2017

California opinion on the "insurance triangle"

Back in April, the Los Angeles County Bar Association issued an ethics opinion on whether a lawyer hired by an insurance company to represent an insured can disclose certain information to the insurance company to the detriment of the insured.   It concludes that
When an attorney engaged by an insurance carrier to defend the interests of an insured obtains information that could provide a basis for the insurance carrier to deny coverage, the attorney is ethically prohibited from disclosing that information to the insurance carrier.  In such a situation, the attorney must withdraw from the representation.
Up to the last sentence, the conclusion is not surprising and, as far as I know, the generally accepted view on this issue everywhere.  But the last sentence (the duty to withdraw) only makes sense in jurisdictions that hold that an attorney hired by a person to represent another actually has two clients.  In jurisdictions where the attorney in such circumstances only has one client (the insured, in this example), there should be no duty to withdraw. 

Also, as pointed out by Faughnan on Ethics, what happens when the attorney in California withdraws and a new attorney is appointed to the representation of the insured.  The same thing will happen again, and that new attorney will have to withdraw.

You can read the opinion here.

Friday, August 18, 2017

Florida Bar to consider whether it is ethical to participate in Avvo Legal Services

A few days ago, I reported that the NY state bar association issued an opinion holding it would be unethical to participate in Avvo Legal Services. See here.  Now comes news that the Florida Bar’s Board of Governors has decided to prepare an advisory opinion on whether lawyers could participate with a private lawyer referral service which charges a different set fee depending upon the type of case referred.  Without mentioning it, of course, this description refers to the Avvo Legal Services scheme which has now been rejected in every ethics opinion that has considered the question. 

The Florida Bar has in the past attempted to change the state rules to allow lawyers to participate in private referral services, but the Florida Supreme Court rejected the idea.  In fact, it published an opinion on September 24, 2015 which instructed the Bar to draft rules that “preclude Florida lawyers from accepting referrals from any lawyer referral service that is not owned or operated by a member of the Bar.”  Given this background it will be interesting to see if the Board of Governors attempts to revise its position or follows the lead of the Court.  For more on the news from Florida go here.

For some of my previous posts on Avvo go here and scroll down.

Wednesday, August 9, 2017

NY State Bar Association issues opinion holding participating in Avvo Legal Services is unethical

The New York State Bar Association’s Committee on Professional Ethics has issued a new opinion holding that participating in Avvo Legal Services violates the state’s rules of professional conduct.  In particular, the opinion holds that a lawyer paying Avvo’s current marketing fee for Avvo Legal Services is the equivalent of making an improper payment for a recommendation in violation of Rule 7.2(a). 

As long time readers of this blog know, the opinion is similar to opinions in Ohio, Pennsylvania, South Carolina and New Jersey.  And, as I have argued many times, no one should be surprised by the conclusions reached in these opinions because the analysis is consistent with the text of the rules.  You can read my article on the subject here, which was published just after the first couple of those opinions were issued. 

In that article, I pointed out that because the comment to rule 7.2 states that lawyers are banned from paying a lead generator “if the lead generator states, implies, or creates a reasonable impression that it is recommending the lawyer,”  lawyers paying Avvo should be concerned with the possibility that their state disciplinary authority might argue that by providing Avvo’s own “ratings,” as opposed to client ratings, Avvo creates the impression that Avvo is recommending some lawyers more than others. 

That question had not been approached back when I wrote that.  Now it has.  While the other opinions have mostly emphasized the issue of whether paying Avvo’s fees constitutes sharing fees with a non-lawyer, the NYSBA opinion focuses on that precise point.  You can read the full opinion of the New York State Bar Association’s Committee (Opinion 1132 (8/8/17))  here

As the Committee explains “[i]f the lawyer is paying [Avvo’s] fee solely to obtain advertising and marketing services from Avvo, then the lawyer is not giving Avvo something “of value” to recommend the lawyer, but is instead paying Avvo for marketing services, which does not violate Rule 7.2(a).  If, however, the marketing fee also includes a payment to Avvo for recommending the lawyer, then the payment constitutes giving something “of value” for a recommendation, which does violate Rule 7.2(a).”

After discussing Avvo’s business model, the Committee concluded that Avvo does seem be recommending lawyers and, thus, lawyers who pay Avvo’s fee would be in violation of the rule.  This is so, according to the opinion, because Avvo does more than merely list lawyers, their profiles, and their contact information. Avvo also gives each lawyer an Avvo rating, on a scale from 1 to 10 in a way that suggests mathematical precision.  Also, some of Avvo’s ads expressly state that the Avvo Rating enables a potential client to find “the right” lawyer or “the right lawyer for their needs.”

Based on this, the committee found that “[t]hrough these statements and through Avvo’s description of its rating system, Avvo is giving potential clients the impression that a lawyer with a rating of “10” is “superb,” and is thus a better lawyer for the client’s matter than a lawyer with a lower rating.”  Thus, the opinion concludes that “the way Avvo describes in its advertising material the ratings of participating lawyers either expressly states or at least implies or creates the reasonable impression that Avvo is “recommending” those lawyers.”

In addition, the opinion pointed out (but did not resolve) more issues raised by participation in Avvo Legal Services, including:

(1) the fact that Avvo sets the amount of the legal fee for each service raises questions about whether a participating lawyer can deliver competent legal services for Avvo’s chosen price and whether a lawyer is allowing Avvo to interfere in the lawyer’s independent professional judgment regarding how much time to spend on a matter.

(2) the marketing fee raises questions about whether lawyers who participate in Avvo Legal Services are improperly sharing legal fees with a nonlawyer.

(3) Avvo’s satisfaction guarantee raises questions about confidentiality. If clients call Avvo to complain, does the “documentation” that Avvo asks for or receives include “confidential information” within the meaning of Rule 1.6(a)?

As in the past, Avvo’s chief legal officer, has posted a short response to the opinion, but, also as in the past, it is weak and again bases part of the argument on the wrong the constitutional standard.

Yet, Avvo can count one small "victory" in the NYSBA opinion.  Avvo always refers to its fee as "marketing fee" -- not as just "fee" -- perhaps thinking that if you repeat something enough times people will begin to believe it.  And it works.  While other opinions have held that merely because Avvo says the fee is for "marketing" (by which they really mean "advertising"), it does not make it so, the NYSBA opinion states explicitly that Avvo’s website is an “advertisement.”  According to the opinion, "[t]he Avvo website is a public communication on behalf of each participating lawyer, about that lawyer, for the primary purpose of helping the participating lawyers obtain employment by potential clients who use the Avvo website."

Monday, July 31, 2017

Florida seeks comments on proposed opinion on whether to allow sharing of fees with firms that allow sharing of fees with non-lawyers

The Florida bar is likely to adopt an ethics opinion that would make it easier for Florida lawyers to enter into co-counsel relationships with law firms in which non-lawyers have ownership stake -- or, in other words, to share fees with firms that share fees with non-lawyers.  Only two jurisdictions in the US allow sharing fees with non-lawyers, but a number of foreign countries do. 

This is a big change in approach since only two jurisdictions in the US currently allow sharing of fees with non-lawyers and it may open the door for even more changes including allowing lawyers to share fees with non-lawyers directly in Florida - which would be good news for Avvo, as discussed in previous posts below. 

But let's not get ahead of ourselves, yet.  The draft opinion emphasizes that it does not address a Florida Bar member becoming a partner, shareholder, associate, or other formal arrangement in a law firm that is permitted to have non-lawyer ownership in its home jurisdiction.

The committee will accept comments on the proposed opinion until Aug. 15. If no comments are received, the opinion will become final five days later. If comments are received, the matter will be taken up at The Florida Bar's Fall Meeting on October 13.

You can read the proposed opinion here.

Sunday, July 23, 2017

Avvo responds to NJ Opinion

Last month I reported (here) that three committees of the New Jersey Supreme Court issued a joint opinion concluding that it would be unethical to participate in Avvo Legal Services.  A few days ago, Avvo's Chief Legal Officer posted a reply to the opinion in the blog Socially Awkward.  The reply is short and, in my opinion, weak.  All it does is repeat some of the arguments the opinion rejected.  It also gets the constitutional standard that applies to the commercial speech doctrine wrong (as I have pointed out in the past).

For some of my previous posts on Avvo go here, here, here, here, here, here, here, here, here, and here.

Thursday, June 29, 2017

Three committees of the New Jersey Supreme Court issue opinion holding that it is unethical to participate in Avvo Legal Services; also affects Legal Zoom and Rocket Lawyer but for different reasons

The Advisory Committee on Professional Ethics, the Committee on Attorney Advertising, and the Committee on the Unauthorized Practice of Law of the Supreme Court of New Jersey recently issued an opinion holding, among other things, that it would be unethical to participate in Avvo Legal Services.  You can read the opinion here.

This comes as no surprise to me since I have argued both here and in a law review article (available here), that under the current regulatory system, Avvo Legal Services puts lawyers in positions to violate a number of rules and that Avvo's arguments to the contrary are not convincing.  All the opinions addressing the question so far have reached the same conclusion.  See here.

The opinion from the New Jersey committees is short and well written and addresses most, if not all, the arguments I have been discussing regarding Avvo's claims.  And it reaches pretty much the same conclusions I reached in my article, concluding that New Jersey lawyers may not participate in Avvo legal service programs because the programs improperly require the lawyer to share a legal fee with a non-lawyer in violation of Rule of Professional Conduct 5.4(a), and to pay an impermissible referral fee in violation of Rule of Professional Conduct 7.2(c) and 7.3(d).

Interestingly, Avvo was able to respond to the inquiry addressed by the committees before the opinion was issued and it seems it made the same arguments it has been making elsewhere and that I have discussed before.  The opinion rejects them all for pretty much the same reasons I described in my article.

For example, Avvo argued that its fee scheme does not constitute sharing fees with a non-lawyer because it is a "marketing fee."  About this, the opinion concludes that the fact that Avvo refers to its fee as a “marketing fee” does not determine the purpose of the fee or negate the fact that paying it constitutes sharing a fee with a non-lawyer.

Similarly, I have argued that the fact that Avvo’s fee varies depending on the value of the legal fee creates the impression that  the  lawyer  is  paying  Avvo  a  percentage  of  the  legal  fee,  which  is precisely what the ban on sharing fees with a non lawyer prohibits.

On this, the New Jersey opinion concludes that the fee lawyers pay to Avvo is not for marketing because "it is a fee that varies with the cost of the legal service provided by the lawyer, and is paid only after the lawyer has completed rendering legal services to a client who was referred to the lawyer by Avvo."   Further, it states:
Avvo claimed that the “marketing fee” is not a referral fee but an advertising cost, and because the “marketing fee” is a separate transaction, there is no improper fee sharing. The label and timing of the fee does not transform it into an advertising cost. This fee varies depending on the cost of the legal service provided, which is inconsistent with the essential elements of an advertising cost. Avvo defended the varying amounts of its “marketing fees” by stating that in the online market, bigger-ticket services should have bigger-ticket fees. It stated that it spends more to advertise the range of services and takes a bigger payment processing risk for more expensive services. The Committees are not convinced that the sliding scale of fees for legal services rendered bear any relation to marketing.
Moreover, as I pointed out in my article, according to the drafters of the Comment to Model Rule 7.2, a fee paid to a non lawyer for a client lead should not be contingent on a person’s use of the lawyer’s service because “[s]uch a fee would constitute an  impermissible  sharing  of  fees  with  non lawyers  under  Model  Rule 5.4(a).”  Since a lawyer does not have to pay a fee to Avvo unless a client chooses the lawyer, the fee seems to be “contingent on a person’s use of the lawyer’s  service.”  Thus,  paying  the  fee  to  Avvo arguably constitutes  a violation of the ban on fee sharing and, as a consequence, of Model Rule 7.2.

Once again, the New Jersey opinion agrees with my analysis when it concludes that "[w]hen the lawyers pay a fee to the company based on the retention of the lawyer by the client or the establishment of an attorney-client relationship, the answer to the inquiry is simple: the company operates an impermissible referral service."

Finally, the opinion addressed Avvo's contention that fee sharing with non-lawyers is not inherently unethical.  According to this argument it is unethical only if it results in an interference with the lawyer's independent professional judgment.

In my article I explained that Avvo's argument is wrong because, at least as far as the text of the Model Rule is concerned, unless allowed by one of the specific exceptions, splitting fees with a non lawyer is inherently unethical. The rule does not say that sharing a fee with a non lawyer is unethical only if it interferes with the attorney’s independent professional judgment; it says sharing a fee is unethical because it is a threat to an attorney’s independent professional  judgment. Clearly,  part  of  the  policy  behind  the  rule  is  to protect the attorney’s independent professional judgment, but that does not mean that the interference needs to be shown in order for the rule to apply.

And, again, the New Jersey opinion agrees:
Avvo further asserted that fee sharing is only unethical if it compromises the lawyer’s professional judgment. The Committees acknowledge that concerns about independent professional judgment undergird the prohibition on sharing legal fees with nonlawyers. But the precedent in New Jersey, in case law, opinions, and the language of the Rule of Professional Conduct itself, do not restrict the prohibition to situations where there is a clear connection between the fee sharing and the lawyer’s professional judgment. . . .  Sharing fees with a nonlawyer is prohibited, without qualification.
The opinion also addressed certain services offered by LegalZoom and Rocket Lawyer.  It found they also violate the rules, but for other, easy to address, reasons.  The opinion held that these programs are different than Avvo's because they operate as legal service plans and that, therefore, New Jersey lawyers may not participate in the plans until they are registered with the Administrative Office of the Courts.  This is a setback for LegalZoom and Rocket Lawyer, but one that should be easy to solve by registering the programs accordingly.

Simple Justice has a comment on the New Jersey opinion here.  (He agrees with me.)
My Shingle has a comment here.  (She does not.)
Above the Law comments here.
The Law for Lawyers today comments here.

Now back to the issues related to Avvo Legal Services, I want to reiterate something else I have stated in the past.  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.  That is not addressed by the New Jersey opinion.  As I reported recently, though, it is under review in North Carolina and, perhaps in Oregon.

In other words, I think Avvo is going at this all wrong.  It should not be arguing that participating in its services does not constitute a violation of the rules.  Given the current rules, that argument is weak.  What it should be doing is arguing that the rules should be changed to allow it to do what it wants to do and to allow lawyers to participate.  That is a better approach, which may yield better results for Avvo.  What happens in North Carolina will tell.