Monday, June 18, 2018

How many states have adopted a duty to understand "technology" in the practice of law?

As you know, in 2012 the American Bar Association amended the comment to Model Rule 1.1 (Competence) to make clear that lawyers have a duty to be competent not only in the law and its practice, but also in technology.  A majority of states have adopted the suggestion.  Law Sites has an updated summary here.

Wednesday, June 13, 2018

Illinois disciplinary agency publishes comprehensive report recommending changes to the rules and the creation of a new regulatory system to allow lawyers to participate in for profit referral services and other "matching" services

A couple of weeks ago I participated in a panel on the debate over for-profit services that help “match” potential clients with lawyers who are looking for clients such as Avvo Legal Services.  As long time readers of this blog know, this is a topic I have been writing about for some time.  (To see my previous posts on the subject, go here and scroll down.)  To see an article I wrote on the subject go here.  (An update to this article with more recent developments since its publication is forthcoming.)

As I have chronicled here and elsewhere, all of the published opinions, and one proposed opinion have concluded that participating in for profit matching services such as Avvo Legal Services would violate, or likely violate, rules of professional conduct.  Only one proposed opinion has suggested the opposite.  Having said that, it should be noted that the vast majority of jurisdictions have not published any opinions on the subject which may mean that the regulators don’t see the question as a problem that needs to be addressed. Also, California allows for profit referral services, while others may not allow them, but seem to tolerate them.

Given the state of affairs, in some of my writings about this topic I have suggested that Avvo would be better served by seeking to get jurisdictions to change the rules so it would be allowed to do what it wants to do (rather than argue that what it is doing was not against the rules - a battle it seems to be losing.)

Which brings me to today’s news: the day before I spoke at the conference, the Illinois Attorney Registration and Disciplinary Commission (ARDC) published the most comprehensive report on this issue in which it suggests amendments to the Illinois rules of professional conduct in order to allow attorneys’ participation in for-profit referral services such as Avvo Legal Services.

In doing so, it is the first jurisdiction to publish such a recommendation.  (North Carolina has been considering one, but it has not been officially published yet.)

The report, which you can find here, is very comprehensive (124 pages long) and I have not had a chance to read it all, but I looked at some sections and here is a quick review.

First of all, it should be noted that the report is just that; a report.  It is not a final recommendation or a decision of any sort.  And it is subject to changes since the ARDC is now seeking comments on it.  But it does have suggestions on how to approach the issues.

Second, given those suggestions, it is clear that the report sides with what I have called the “Justice gap” theme in the debate.  [See, "Justice Gap vs. Core Values: The Common Themes in the Innovation Debate" 41 Journal of the Legal Profession 1 (2016)]  This refers to the position that we should do what we can to help provide more access to legal services, even if doing so involves taking innovative approaches that seem to go against tradition.  As the report states, “[p]rohibiting lawyers from participating in or sharing fees with for-profit services that refer clients to or match clients with participating lawyers is not a viable approach, because the prohibition would perpetuate the lack of access to the legal marketplace.”

What is new, and may be controversial, in the report is that it does not only suggest changing the rules that apply to lawyers, it suggests creating a regulatory system to apply to the non-lawyers who want to provide for-profit referral services that would require them to meet certain standards and to register with, and be regulated by, the ARDC.  According to the report, this approach would be better to protect clients and the integrity of the legal profession.

The ARDC will accept comments through at least Aug. 31, 2018. Comments should be sent to information@ardc.org.  More here.

As expected, the report has generated some debate already.  Here are some links to comments about it.

Carolyn Elefant writes that the proposal is a very bad idea, but not for the reasons that the jurisdictions that have published opinions have argued.

Law Sites describes the report here.

Legal Profession blog comments here.

Robert Ambrogi comments on the report at Above the Law.

Finally, here is a podcast discussing the report with its author.  (if you can't see the podcast play button below, you can go here to access it.)


Saturday, June 9, 2018

NJ Supreme Court rejects request to review opinion on Avvo legal services

About year ago, 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 issued an opinion holding, among other things, that it would be unethical for New Jersey lawyers to participate in Avvo Legal Services.

In response, Consumers for a Responsive Legal System, an organization that represents Avvo and other online companies providing lawyer referrals, petitioned the NJ Supreme Court to review the order.  But earlier this month, the court denied the petition.

Responsive Law executive director Tom Gordon said in a statement that, “by summarily declining to review the decision … [the court] has abrogated its responsibility to engage in active supervision of the bar’s anti-competitive conduct.”

This statement is, of course, a reference to the holding of the U.S. Supreme Court's decision in North Carolina State Board of Dental Examiners v. Federal Trade Commision, in which the Court found regulation of a profession is subject to antitrust regulation if it is exercised by market participants unless there is active supervision by a government agency.  In other words, the organization (and Avvo) are gearing up to argue that the system of self regulation used by the legal profession violates antitrust principles.

On the other hand, the NJ State Bar Association issued a statement stating, in part, that “The court’s decision to let stand the joint opinion is an important . . . provides clarity for New Jersey lawyers and protects consumers" and that “[t]he association has increasingly grown concerned about the number of organizations that have sought to open the door to fee sharing, which could interfere with a lawyer’s independent professional judgement, and with the concept of organizations providing legal services when they are not bound by the same ethics rules that guide attorneys.”

I am not sure that both statements are entirely accurate.  The fact that the court denied the petition does not mean it did not exercise supervision.  If it reviewed the petition, it exercised supervision.  Avvo just doesn't like the result.  That does not make the review insufficient; it just makes it unfavorable to its position.

On the other hand, the statement by the Bar Association, is not entirely convincing either.  It suggests that Avvo is "providing legal services," which it does not do.

For more on the court's denial of the petition, go here.

Friday, May 18, 2018

Supreme Court decides McCoy v Louisiana, finding ineffective assistance of counsel when attorney conceded guilt over client's objection

Back in October I wrote a comment on McCoy v. Louisiana, a case before the US Supreme Court in which a Louisiana death row inmate argued he received ineffective assistance of counsel because his lawyer conceded his guilt over the defendant's objection. (I later posted some updates and relevant links here.) 

In my original post, I argued, among other things, that the case could result in expanding the reach of an older case which I don’t like (Florida v. Nixon).  In Nixon, the Court found that the lawyer had not provided ineffective assistance of counsel based on a distinction between "conceding guilt" and "pleading guilty."   I have never been comfortable with Florida v Nixon for many reasons, the most important one of which is that I don't see the difference between conceding guilt and pleading guilty.  In the end, the Court allowed an attorney to make a fundamental decision, which is explicitly reserved for the client to make, without client consent.

McCoy had the potential to make things worse because the Court was asked to find no ineffective assistance of counsel even if an attorney decided to concede guilt over the express objection of the client. 

Yet, I am pleased to report that the Court found for the defendant, holding that
“a defendant has the right to insist that counsel refrain from admitting guilt, even when counsel’s experienced-based view is that confessing guilt offers the defendant the best chance to avoid the death penalty. Guaranteeing a defendant the right “to have the Assistance of Counsel for his defence,” the Sixth Amendment so demands. With individual liberty—and, in capital cases, life—at stake, it is the defendant’s prerogative, not counsel’s, to decide on the objective of his defense: to admit guilt in the hope of gaining mercy at the sentencing stage, or to maintain his innocence, leaving it to the State to prove his guilt beyond a reason- able doubt.”
I definitely think this is the right decision in this case.  I just wish the Court had used the opportunity to find it had erred in Nixon (and to overrule it) too.

You can read the full opinion here.  The SCotUS blog has an analysis of the opinion here and NPR has a short comment here.


Another lawsuit alleging UPL to keep an eye on

I recently wrote about the controversy over the company TIKD (here) which is fighting a complaint alleging it is engaged in the unauthorized practice of law in Florida, a case that could really question the authority of the legal profession to continue to operate as a monopoly that regulates itself.

Now comes news of another case that may have similar implications.  As reported in Bloomberg Law, a lawsuit was filed earlier this month in California federal court accusing venture-backed legal matchmaker UpCounsel Inc. of violating ethics rules and unfair competition laws to gain an edge over traditional legal service providers. The lawsuit was filed by LegalForce RAPC Worldwide P.C., an intellectual property law firm that uses artificial intelligence software to streamline the trademark application process. Raj Abhyanker, an engineer-turned-attorney who founded the plaintiff entities, told Bloomberg Law that the UpCounsel lawsuit will shine a light on regulatory inequities that have allowed nontraditional legal service providers to gain a competitive edge in the marketplace.

Note how ironic this claim is.  The legal marketplace is essentially a monopoly in which only state admitted lawyers can participate and which is regulated by people who are participants in the monopoly itself.  Companies like UpCounsel and others have argued that this constitutes an inequity because it prevents them from entering and competing in the market.  Yet, the plaintiffs in this lawsuit are now claiming that allowing the companies to enter the market would constitute unfair competition.  In other words, those who have benefited from controlling the market as a monopoly are now arguing it is unfair to allow others to enter the market because they might gain a competitive edge.

According to Bloomberg, UpCounsel has stated that the suit “is a frivolous act” by “an entrepreneur who has failed to compete in the market and is lashing out in frustration.” “UpCounsel's goal is to create a platform that provides access for businesses to find, connect and work with independent attorneys across the nation,” the statement said. The company, it added, has “worked diligently for years, and at great expense, to ensure our business is compliant with all ethical rules.”

I suspect that the future of regulation and the opening of the market to "outsiders" will be the "next big thing" in Professional Responsibility, and will probably get a lot of attention at the upcoming ABA National Conference on Professional Responsibility at the end of the month.

Tuesday, May 15, 2018

Wisconsin Supreme Court to consider raising pay for private lawyers assigned to represent criminal defendants

Wisconsin's Public Defender's Office assigns private attorneys around 40 percent of its cases and pays them the lowest rate in the nation. Now, the office is having a difficult time finding lawyers willing to take those cases. Tomorrow, the state Supreme Court will take up a petition that would give attorneys a raise. Wisconsin Public Radio's Danielle Kaeding has more.


Thursday, May 10, 2018

California adopts new rules -- UPDATED

A few days ago, in a comment on a different topic, I wrote something along the lines that California had not adopted the Model Rules...

Well, that's not true anymore!

The California Supreme Court announced today that it has adopted 69 new rules of professional conduct patterned on the ABA Model Rules.

Here is a press release and the court's order.

And here is a table that correlates the California rules in place until today and the new ones.

UPDATE 5-11-18:  Here is a link to the new rules. 

ABA Formal Opinion 481: When does a lawyer have a duty to inform a client that the lawyer has made a mistake in the representation?

The Standing Committee on Ethics and Professional Responsibility of the American Bar Association recently issued Formal Opinion 481, called “A Lawyer’s Duty to Inform a Current or Former Client of the Lawyer’s Material Error” in which it concludes that attorneys have a duty to disclose material errors in representation to their clients. You can read the opinion here.

Evidently, the duty is limited by "materiality," but what is it that makes an error "material." According to the opinion, a material error is defined as one that a “disinterested lawyer” would conclude is either “(a) reasonably likely to harm or prejudice a client, or (b) of such a nature that it would reasonably cause a client to consider terminating the representation even in the absence of harm or prejudice.”

Interestingly, however, the opinion finds that there is no duty to inform a former client if the lawyer discovers after the attorney-client relationship has ended that the lawyer made a material error in the former client’s representation.

You can find short comments on the opinion over at The Law for Lawyers Today and Professional Liability Matters.

Wednesday, May 9, 2018

TIKD v The Florida Bar: the case that challenges the very notion of professional regulation

If you are reading this blog it must be because you are interested in Professional Responsibility issues; and if you are interested in that topic, you probably know by now that there is a controversy in full swing in Florida that challenges the very notion of professional regulation.

I am referring to the antitrust case filed by a company called TIKD against the Florida Bar.  TIKD's website is here.

TIKD is a company that promises consumers to take care of their traffic tickets (with a money back guarantee).  The consumer pays a fee to the company and the company takes care of everything, including hiring a lawyer to represent the consumer.   Based on this business model, a law firm in Florida filed a complaint with the Florida Bar alleging that TIKD was practicing law without a license.  The Florida Bar issued an opinion finding that lawyers who work with TIKD could be in violation of Florida Bar disciplinary rules and requested an injunction to prevent TIKD from continuing to provide services in the state.

Meanwhile, TIKD went on the offensive and filed a federal lawsuit against the Florida Bar, the law firm, and others alleging, among other things, antitrust violations and that the Florida Bar and the law firm are engaged in a “concerted effort” to put TIKD out of business.

In response, the Florida Bar argued it has immunity from antitrust laws under the so-called state action doctrine, which provides that the Sherman Act does not apply to the conduct of a state when it regulates its economy by displacing competition in favor of regulation of a monopoly in the public service.  For the doctrine to apply, however, the state must act as a sovereign, rather than as a “participant in a private agreement or combination by others for restraint of trade.”

Private entities can also be protected by state-action immunity, but only if their conduct is (1) taken pursuant to a clearly articulated and affirmatively expressed state policy and (2) actively supervised by the State itself.  (See, California Retail Liquor Dealers Ass’n v. Midcal Aluminum, Inc., 445 U.S. 97 (1980)).  Midcal, however, did not decide whether professional regulators, such as the Florida Bar, whose members are participants in the market they regulate, should be subject to the doctrine’s requirement of active state supervision for private entities claiming state-action immunity.

Thus, the application of the state action doctrine is the key to the controversy, and that’s where North Carolina State Board of Dental Examiners v. Federal Trade Commission comes into play. In that case the Supreme Court held that if a controlling number of decisionmakers are active market participants in the occupation the agency regulates, a state agency must be actively supervised by the state in order to obtain antitrust immunity.  (For a comment on the North Carolina case, you can go to the Harvard Law Review here.)

In the TIKD case, the Florida Bar is arguing that, as an “arm of the Florida Supreme Court,” it is entitled to state-action protection without having to meet the “clear articulation” or “active supervision” requirements recognized by the Supreme Court.  Yet, the U.S. Department of Justice has filed a statement of interest arguing that the Florida Bar is not immune from federal or state antitrust liability based on North Carolina State Board of Dental Examiners.  You can read the statement of interest here.

The National Law Review has a short discussion of the issues raised by the case here.

On the other side of the equation, so to speak, TIKD’s arguments are also problematic.  It argues that it is not engaging in the practice of law because it is merely a referral service rather than a law firm.  But its own representations in its website, do make it sound like it provides legal services to the consumers.  It essentially says, pay us, send us your ticket and we will provide you with a lawyer.  From what I can see in its website, the consumer does not choose the lawyer, TIKD does, and the lawyer doesn’t even have to meet the client.  At best TIKD seems to be operating as a temp agency, which finds lawyers and sends them off to do tasks for clients who have no (or very limited) contact with the lawyers themselves.

Also, if TIKD wants to be considered to be a referral service, then it needs to make sure it is complying with all the rules related to referral services, and the lawyers who are accepting referrals from TIKD need to worry about whether they are violating the rules related to paying for referrals or sharing fees with non-lawyers.

As of now, it seems that both the petition for injunction at the state level and the case in federal court are pending, but the results will have significant implications on the future of the notion of regulation of the profession.

More on the question of accepting fees in Bitcoin

After I posted a link to a story on whether attorneys can accept payment for fees in Bitcoin last night, I vaguely remembered I had seen an article about the same issue by Ron Rotunda in Verdict recently.  So I searched for it today and here it is.  As he always did, Ron provides a short and interesting analysis.