Thursday, April 28, 2016

Podcast: interview with Legal Zoom

Last year I posted a link to a podcast on LegalZoom with its CEO, John Suh (see here).  The Legal Talk Network has a new one here.  You can listen to is by clicking the play button below or by going to the link.

ABA issues new ethics opinion on splitting fees under Model Rule 1.5(e)

EThe Standing Committee on Ethics and Professional Responsibility of the ABA recently issued a new ethics opinion reviewing the details on splitting fees under Model Rule 1.5(e).  You can read and download the opinion here.  (Remember the the opinions are available free for a limited time.)

The opinion is fine.  I don't think there is really anything in it that we didn't know already.  Here is the summary:  "Rule 1.5(e) allows lawyers who are not in the same firm to divide a fee under certain circumstances. A lawyer who refers a matter to another lawyer outside of the first lawyer’s firm and divides a fee from the matter with the lawyer to whom the matter has been referred, has undertaken representation of the client. Fee arrangements under Model Rule 1.5(e) are subject to Rule 1.7. Unless a client gives informed consent confirmed in writing, a lawyer may not accept a fee when the lawyer has a conflict of interest that prohibits the lawyer from either performing legal services in connection with or assuming joint responsibility for the matter. When one lawyer refers a matter to a second lawyer outside of the firm and the first lawyer either performs legal services in connection with or assumes joint responsibility for the matter and accepts a referral fee, the agreement regarding the division of fees, including client consent confirmed in writing, must be completed before or within a reasonable time after the commencement of the representation."

You can read more on the Opinion at Lawyer Ethics Alerts Blog, Professional Liability Matters, The ABA Journal, and Lawyers for the Profession.

Interestingly, the Court of Appeals in Illinois recently issued an opinion on the splitting fees that illustrates how the ABA's opinion could be applied.  In Naughton v. Pfaff,  a referring attorney sought to recover under an oral fee-sharing agreement with another attorney, alleging that the receiving attorney breached his fiduciary duty by failing to obtain the client's signed consent. The Court held that both attorneys have a non-delegable ethical obligation to ensure that the client agrees in writing to a fee division. Absent the client's signed consent, the attorneys' agreement violated the Rules of Professional Conduct and thereby precluded recovery.  These are the consequences of not getting client consent, which the ABA Opinion explains should be done before the beginning of the representation.  Go here for a discussion of the case.

Wednesday, April 27, 2016

I just posted a short article on SSRN on Indiana's opinion regarding confidentiality and reporting child abuse

Last year, the Ethics Committee of the Indiana Bar Association issued an opinion on whether an attorney has to comply with the state's mandatory child abuse disclosure statute.  I did not like the opinion and wrote about it here and here.  I looked further into it and wrote a short article.  If you are interested, you can read it on SSRN.  Feel free to send me your comments.

Tuesday, April 12, 2016

Alcoholics and the Profession of Law

Professor Ronald Rotunda's most recent column is available here.

Saturday, April 9, 2016

Is it ethical for a firm to pay Uber to provide transportation for clients

Over at My Shingle (a blog I recommend, by the way), Carolyn Elefant discusses whether it is ethical for a law firm to pay a client's transportation costs via Uber.  Does paying for a taxi (or a rental car) for a client constitute a violation of the rule that bars attorneys from providing financial assistance to clients?  (This is assuming the client is involved in litigation because the rule does not apply if the attorney-client relationship relates to transactional matters.)  If so, why would using Uber be different?   Carolyn argues Uber is different.  You can read her comment here.

Should a law firm be allowed to bill a client for work performed by an unpaid intern?

Suppose a law firm hires a student as a law clerk and the student does some work for one of the lawyers.  The lawyer would be allowed to bill the client for the "cost" of the law clerk's time, right?  But what is the client paying for?  Is it an amount that reflects a portion of the firm's overhead costs or is the client paying the firm for the value of the time of one of its employees (the law clerk)?  Is there a difference?

Now, what if the firm is not paying the law clerk at all.  It would seem odd that the firm could claim the client has to pay certain value for "overhead" when in reality there is no overhead.  On the other hand, since the law clerk is not a lawyer, can the firm charge the client for the value of the time of the law clerk?

My guess is these questions have probably been addressed by ethics opinions, but I have not done the research.

What I can tell you is that there is a new opinion (available here) out of the New York State Bar Association that holds that a "law firm may bill a client for work performed by a student-intern despite the fact that the law firm does not pay the intern, because the intern receives academic credit for the work, as long as (i) the internship program complies with applicable law, (ii) the educational institution does not object to the client charges, and (iii) the charge is not excessive."

Not everyone agrees this is the correct decision.  See this article in Above the Law for a negative review of the opinion.

Avvo now offers free legal forms

A few days ago, Avvo announced it has started yet another new law practice related service:  Avvo Legal Forms, which offers free legal forms.  According to one report, Avvo describes the forms as “a selection of no-cost, high-quality legal forms for family, business, estate planning and real estate.” So far, Avvo Legal Forms lists just 20 available forms. But Avvo says that it expects to have more than 200 forms available by the end of the year. The forms include a “wizard” feature to assist in filling them out, as well as e-signature capability."  

This new venture places Avvo in competition with LegalZoom and Rocket Lawyer, both of whom have been offering legal forms for some time.  Only, and big, difference is that Avvo is offering the forms for free.

And free is good, right?  Well, yes and no.  Free is good if you are only thinking about the initial cost.  But cost also must take into account quality because if the product is lousy it may end up costing the consumer more in the long run.

I have not looked at the Avvo website carefully nor at the forms so I can't comment on the quality, but the first review I saw (Adams on Contract Drafting) calls it "a real stinker."  You should read the review to get the details.  One part of the argument is that the forms are sloppy, imprecise, confusing, etc - in other words that they are not very good.  The other part of the argument is that Avvo's business model creates a race to the bottom where lawyers are willing to give up quality of service in general, which in the end is bad for consumers.  [Interestingly, this was part of the argument originally made against allowing attorneys to advertise (remember Bates?).]

Avvo, on the other hand, as it has done in the past, claims that what it is doing is providing avenues for people to get better access to legal representation.  But I find the way Avvo explains its position curious.  In an interview in Law Sites, Avvo's CEO states that "By providing free legal forms, Avvo Legal Forms is an attempt to get in front of consumers who would otherwise go to paid form sites such as LegalZoom and RocketLawyer and bring them to Avvo, where they can be introduced to Avvo’s various services for connecting consumers with lawyers."  Also, in the comments to the review itself, Avvo's general counsel wrote:  "While our forms are designed to cover a wide range of basic situations . . . they’re not – or at least, shouldn’t be – comparable to a lawyer’s custom work product. And that’s where your post misses the larger point: we believe that many consumers who are currently trying to go it alone would benefit from counseling with an experienced attorney. The purpose of our forms is to give those do-it-yourselfers a frictionless starting point, while also making it as easy as possible for them to step up to a paid legal check-up of what they’re doing (or full-on legal representation if they find their situation is more complex)."

So, am I reading too much between the lines here or does this sound like they are admitting that the free forms are just bait so the prospective clients feel they actually need to consult a lawyer after all, and to get the consumers to pay Avvo to connect them with the lawyer?   Here's how Avvo's CEO put it, after all:  "Our belief is if we can get in front of these consumers at the time that they think they need DIY and get them — I guess the term is upsold — but introduce them to our directory or our Q&A or Avvo Advisor, then we can start tapping into this market of people who wouldn’t mind having a lawyer involved."

Looked at this way, the free legal forms is just a way to attract prospective clients to Avvo's other services where Avvo operates as a lead generator for lawyers who pay Avvo's fees.  For my comments on Avvo's other services go here and here.

You should also read the comment posted by Matthew Kreitzer below the review in Adams on Contract Drafting in which he argues that there is “a disconnect between the ideal of what websites like Avvo are trying to accomplish, and what the likely end result will be.”  Go read the comment to see his full argument. 

Thursday, March 31, 2016

Supreme Court decides Luis v United States, upholding right to attorney of choice -- UPDATED

Today the US Supreme Court announced its decision in an important case involving the right to an attorney.  As explained in a story in Slate, the case involves a defendant (Sila Luis) accused of criminal fraud of some sort.  Understandably, the defendant wanted to to hire the best lawyer she could afford.  However, the government froze all her assets, including those completely untainted by the alleged fraud. The defendant argued that the asset freeze violates her Sixth Amendment right “to have the assistance of counsel for [her] defense.” The government replied that there is no violation because the defendant can still hire counsel; she just has to find one who’ll represent her for free.  You can see the issue, right?

So, today the Supreme Court announced its decision in which it vacated the judgment and remanded the case, siding with the defendant. Justice Breyer wrote a plurality opinion in which he wrote that the Sixth Amendment grants a defendant “a fair opportunity to secure counsel of his own choice" and that the government “would undermine the value of that right by taking from Luis the ability to use the funds she needs to pay for her chosen attorney.” In short, the defendant must be permitted to pay her preferred lawyer with untainted funds.

You can read the Slate story here.  You can also read the SCotUS blog analysis of the case here.  You can access all the documents filed in the case here.

UPDATE 3/31:  Amy Howe, of the SCOTUS blog, has published an analysis of the opinion here. Bloomberg Law has a 3 minute clip on the case here

Monday, March 28, 2016

Another podcast on artificial inteligence and the practice of law

Back in August of last year, I posted a podcast on artificial intelligence and the practice of law (see here).  My intro was as follows:  "Have you seen the newest commercial for LegalZoom in which lawyers say "I am definitely not a robot!"?   This line is a reference to recent debates as to whether lawyers can (or will be) replaced by robots or computers in the future.  Interestingly, some lawyers have been replaced by computers already by a computer program that allows parties to resolve disputes without the need for lawyers, mediators or arbitrators.  But I don't think we need to worry about all lawyers being replaced ....yet, at least"

The issue of artificial intelligence is back in the news and here is a new podcast courtesy of the Legal Talk Network:  "Artificial intelligence has long been a tool for lawyers to perform their tasks more efficiently. However, the technology has advanced to the point where computers can now perform many of the tasks that were once the exclusive domain of humans. In this month’s Asked and Answered, the ABA Journal’s Victor Li talks to freelance writer Julie Sobowale about how artificial intelligence is revolutionizing the practice of law." 

You can listen to the podcast by pressing the play button below or by going here.

Ron Rotunda on judges who impose unusual punishment

A few years ago, I commented on judges who impose sentencing by creating their own type of punishment, like public shaming, or ordering someone to go to church.  See here and here for previous posts on this.

Professor Ronald Rotunda's most recent column at Verdict (available here) offers an update on the issue addressing the practice of forcing lawyers to donate money to charity as a form of sanction. He notes that although there are a host of ethics opinions and laws that say it is improper because it is an abuse of judicial power, many judges continue to think they have the power to impose such a sanction.  He proposes that, just like the court did in In re Merritt, 432 N.W.2d 170 (Mich 1988), courts should start enforcing the rules by requiring judges to pay, out of their own pockets, the money they ordered the defendants to pay.