Back in November of 2019 I reported that Georgia became the 38th state to adopt the Model Rules proposition that the duty of competence must include a duty to be knowledgeable about technology. See here. And for all other posts on "technology" generally go here and scroll down.
Today I am writing to report that California is the next state to adopt the notion of technology competence. For details go here.
A few days ago I reported that the era of non-lawyer owned firms is here, now that Arizona and Utah have approved some version of such an alternative business structure.
As I have written elsewhere, the debate on whether this is a good idea is not new. (See here, for example). What is new is that these two states have decided to give it a try. And, not surprisingly, this has reinvigorated the debate again.
One of the main arguments used to justify opening up the practice of law to non-lawyers (whether by allowing non-lawyers to provide some types of legal services or by allowing lawyers to get capital from and to partner with non-lawyers, or by allowing non-lawyers to “own” law firms) is that it will provide more “access to justice.”
This notion of “access to justice” is, of course, a misnomer, since there is no guarantee of that. What we should be asking is whether the new regulatory system will provide more access to legal services, or, better yet, to affordable legal services.
Unfortunately, there is no evidence that it will, and if we go by the experiment with Legal Technicians in Washington state, there is evidence that it won’t work.
Although the new business models may provide more access to consumers, they won’t necessarily reduce the cost of legal services, prevent conflicts of interest or guarantee competent representation. That is so because the new non-lawyer owners of the law firms are in the business to make a profit. They need a good return for their investment and that margin is likely to come out of the difference between costs to provide the services and the fees that can be generated.
Unfortunately, maybe this means that companies more interested in making a profit than in providing wide ranging legal services will devote their attention to reviewing would be clients’ claims in order to find only high value cases, while the others will be swept aside or will not be given the attention they deserve. Thus, depending on how the new model is structured, it may result in clients with smaller cases actually getting less access to legal services.
But, let’s not rain on the parade. We won’t know how it will work until we try it so let’s see what happens in Utah and Arizona. Maybe they can make it work better than Washington could. I am sure we will be talking about this for a long time. And, as some have said, maybe this is an inevitable shift in the legal services market, in which case, just wait, it will soon be coming to a jurisdiction near you.
February 14, 2021 (updates at the end)
Last week, the ABA’s Standing Committee on Ethics and Professional Responsibility issued a new Formal Opinion (number 497) on conflicts involving materially adverse interests. Its summary states as follows:
Rules 1.9(a) and 1.18(c) address conflicts involving representing a current client with interests that are “materially adverse” to the interests of a former client or prospective client on the same or a substantially related matter. But neither Rule specifies when the interests of a current client are “materially adverse” to those of a former client or prospective client. Some materially adverse situations are typically clear, such as, negotiating or litigating against a former or prospective client on the same or a substantially related matter, attacking the work done for a former client on behalf of a current client, or, in many but not all instances, cross-examining a former or prospective client. Where a former client is not a party to a current matter, such as proceedings where the lawyer is attacking her prior work for the former client, the adverseness must be assessed to determine if it is material. General economic or financial adverseness alone does not constitute material adverseness.
You can read the opinion here.
UPDATE 3/4/21: Faughnan on Ethics has a short comment here. I agree with his conclusion that the terminology in the rule is a mistake and that the opinion does not really say anything particularly new or interesting. The terminology is a mistake because it is inconsistent with the terminology used in other rules related conflicts of interest. Rule 1.7 defines conflicts as involving either direct adversity or material limitation. Rule 1.9 merged those two terms into "material adversity" and I honestly believe that was by mistake. But it has never been corrected and here we are...
UPDATE 3/21/21: The Louisiana Legal Ethics blog has a comment here.
The complaint apparently argues that using the pitbull image and nickname harms the legal profession and the public’s trust and confidence in our system of justice.
I don't like pitbulls and I think that calling yourself a pitbull lawyer in advertising is tacky, but trying to impose sanctions for it is nonsense. I don't know what the specific Florida rules say, but the notion that the state can impose sanctions for protected speech merely because it harms "the image of the profession" and the "trust in the system" is a very weak argument.
The standard by which commercial speech is evaluated has been established for ages. As the US Supreme Court has explained:
Our general approach to restrictions on commercial speech is . . . by now well settled. . . . Commercial speech that is not false or deceptive and does not concern unlawful activities, . . . may be restricted only in the service of a substantial governmental interest, and only through means that directly advance that interest. . . . Our application of these principles to the commercial speech of attorneys has led us to conclude that blanket bans on . . . advertising by attorneys and rules preventing attorneys from using nondeceptive terminology to describe their fields of practice are impermissible . . . but that rules prohibiting in-person solicitation of clients by attorneys are, at least under some circumstances, permissible.
March 16, 2021 (update, below)
Back in December, a federal district court declared unconstitutional Pennsylvania's version of ABA Model Rule 8.4(g) holding that it violated the First Amendment. I wrote about the decision here and here.
At the time, I said I was hoping the Pennsylvania Bar would appeal so we could get a decision from a Court of Appeals on the subject. Then, as expected, in January, the Pennsylvania Bar field a notice of appeal to the Third Circuit.
However, I just heard that yesterday, the Bar voluntarily dismissed the appeal. I hope there will be more coverage about why in the next few days and I will surely report it when I see it.
Now, presumably the Pennsylvania Bar will go back to try to draft a new version of the rule.
I am sure the debate is not over. Stay tuned.
UPDATE (3/21/21): The ABA Journal has a short comment here. In it, I noticed a common mistake regarding the debate on this topic. Citing another source, the story attempts to distinguish the Pennsylvania rule from the Model Rule by suggesting that the model rule does not attempt to regulate speech. This is nonsense. The Comment to the Model Rule explicitly states that the rule applies to "verbal conduct" as well as "physical conduct." And, if nothing else, let's be realistic. Part of the motivation for the rule was clearly to get lawyers to stop saying bad things.
As I am sure you know by now, Utah and Arizona recently became the first two states to make changes to their regulatory structure of the practice of the profession to allow, among other things, lawyers to partner with non-lawyers, non-lawyer ownership of law firms and alternative business structures. I reported on those developments here and here (regarding Arizona) and here, here, here and here (regarding Utah).
And, here is the latest: Yesterday, the first entirely nonlawyer owned law firm in the United States opened for business in Utah while the Arizona Supreme Court announced (news release) that it has approved the first two alternative-business structure entities to operate in the state. The ABA Journal has a story from Utah.
Many lawyers and recent law school graduates believe they would benefit from mental health or substance abuse treatment but do not seek help because they fear that doing so will affect their ability to practice law.
Some jurisdictions have stopped asking questions about mental health in their character and fitness applications to the bar, but others have not.
As explained in a recent article in Bloomberg Law, “[w]hile states like Vermont have taken steps to assure students that receiving treatment will not affect bar admission, . . . students planning to seek admission in other states are not guaranteed the same reception, an issue that weighs heavily on students’ minds.” In Florida, for example, the Bar Examiners encourages treatment, but applicants with certain types of disabilities are required to submit treatment records even if they have no current issues which means that applicants may later be asked invasive questions by lawyers with no experience in mental health or substance abuse.
Other states have adopted a system of conditional admission. Once the conditions are met, the lawyer is fully admitted, but not everyone agrees this is a good alternative. Some states do not offer conditional admission, in part because of a lack of resources to monitor those subject to conditions and because of concerns about the imposition of conditions not based on individualized assessments.
For a good discussion of the issue you can read the full article at Bloomberg law, here.*
*I am not sure if you need a subscription to be able to read the full article. I can get access to it using one browser, but not Chrome for some reason.
Earlier this week in a case called Karton v. Ari Design & Construction, Inc., the California Court of Appeal decided that a court can deny the amount requested in attorney's fees in a case based on the fact that the attorney requesting the fee award was uncivil and "over litigated" the matter.
Ethical Grounds has a good summary of the case. The lawyer in question requested “$271,530 in attorney fees, $52,021 in discovery sanctions, and $203,646 for proving matters at trial that had been denied in discovery.” The trial court determined that the lawyer had not provided sufficient evidence to assess whether the fee request was reasonable and gave the lawyer additional time to make the argument. The trial court instructed the lawyer to limit the additional argument to 10 pages of text, plus any exhibits. In turn, the lawyer submitted additional evidence – 11 pages of text, over 400 pages of exhibits – and requested an additional $16,000 in fees. Yet, in the end, the trial court awarded $90,000 in fees and explained that it decided not to award the full amount requested because of the lawyer’s incivility and over-litigation of the matter.
You can read the opinion here. The Volokh Conspiracy has a comment here.
UPDATE 4/4/21: Above the Law has a comment here.
Benjamin Cardozo is better known to my students as the New York Court of Appeals judge who wrote Palsgraf v. Long Island Railroad, which developed what has become the standard analysis for proximate cause in Tort law. But in 1932, President Herbert Hoover appointed Cardozo to the Supreme Court of the United States to succeed Justice Oliver Wendell Holmes. Interestingly, Hoover, a Republican, appointed Cardozo even though he was a Democrat. I would be curious to know how many times that has happened since.
According to an article in The New York Times about Cardozo's appointment, "seldom, if ever, in the history of the Court has an appointment been so universally commended."
Cardozo was confirmed by a unanimous voice vote in the Senate on February 24 and was sworn in on March 14, 1932.
To celebrate and because I know you must be eager to know why I am writing about this today, here is a link to my article Ahead of his time: Cardozo and the Current Debates on Professional Responsibility, 34 Touro Law Review 101 (2018).
The story in a nutshell is that a big law firm had been representing, pro-bono, a non-profit organization for several months. At one point during that representation, the non-profit sought help from the firm because a government agency was trying to eliminate its only source of funding. In response to the agency's threat, lawyers from the firm met with the non-profit organization's board and president to discuss a potential lawsuit against a federal agency.
Later, however, the firm decided they did not want to get involved in the case because “the case might be too political” and withdrew from representation.
Ok, nothing wrong there, I suppose. The firm has a right to decided whether it wants to represent a client.
But then, eight weeks later, the firm agreed to represent the Agency threatening to take away the nonprofit's money for the year. And all this without ever asking for consent or even informing the (now) former client.
The general counsel for the non-profit organization is quoted in the story as saying "I was speechless." . . . "I had no idea that they would ever turn around and represent our actual adversary in a lawsuit, after an attorney in their practice had spoken to our board about our strategy and asked me for internal documents to help frame up the theory of our case."
Once the firm undertook the new representation, the lawyer and several staffers who had been representing the non-profit organization left the firm. The firm continued to represent the agency and, according to the story, made well over $2 million dollars over the next five months.
Does this sound like a violation of the hot potato doctrine to you?
You can read the full story here.
The ABA Standing Committee on Ethics and Professional Responsibility has been busy issuing formal ethics opinions recently. Formal Opinion 498 is the most recent one, issued March 10, and it deal with ethical concerns related to practicing law virtually. Evidently, this is an important opinion now that so many lawyers are practicing law from home due to the pandemic.
The opinion's summary reads as follows:
The ABA Model Rules of Professional Conduct permit virtual practice, which is technologically enabled law practice beyond the traditional brick-and-mortar law firm. When practicing virtually, lawyers must particularly consider ethical duties regarding competence, diligence, and communication, especially when using technology. In compliance with the duty of confidentiality, lawyers must make reasonable efforts to prevent inadvertent or unauthorized disclosures of information relating to the representation and take reasonable precautions when transmitting such information. Additionally, the duty of supervision requires that lawyers make reasonable efforts to ensure compliance by subordinate lawyers and non-lawyer assistants with the Rules of Professional Conduct, specifically regarding virtual practice policies.
I am not sure that says anything we did not know already, but there you go. You can read the full opinion (or download it) here. For more commentary you can go to LawSites, The ABA Journal, iPhone JD, Lawyers Ethics Alert Blog, 2Civility, LexBlog and My Shingle, which criticizes the opinion as a wasted opportunity.
Wisconsin Advisory Opinion offers cybersecurity tips on working remotely. Ethical Grounds has the full story here.
Late last year, the New Jersey state supreme court held that law firms that want to include mandatory arbitration provisions in their client engagement agreements must explain to the client the benefits and disadvantages of arbitrating a prospective dispute. The case is called Delaney v. Dickey, and you can read it here.
The Law for Lawyers Today has a comment here.
About a week ago, the Pennsylvania Bar Association and the Philadelphia Bar Association issued a joint ethics opinion on whether a lawyer licensed in Pennsylvania may work remotely from another jurisdiction, even if the lawyer is not licensed in that jurisdiction. The opinion concludes that the answer is YES, as long as it is OK with the jurisdiction where the attorney is located.
This conclusion is consistent with the ABA’s Formal Opinion 495, issued last December, but it does not really provide a lot of guidance to lawyers practicing from home in a different jurisdiction that the jurisdiction where they licensed.
Let’s say that a lawyer lives in New Jersey, where she is not licensed, but has an office in Philadelphia, where she is licensed. Typically, the lawyer commutes to the office and practices law in Pennsylvania. But due to the pandemic, she is now working from home in New Jersey. The question is whether the lawyer is engaged in the unauthorized practice of law in New Jersey, and the Pennsylvania opinion does not answer that question. To find and answer to that question, the lawyer will have to research what the law is in New Jersey.
LawSites has a short comment here.
Here is a little piece of advice: don’t ask your paralegal to lie for you, particularly to cover your mistakes.
Common sense, right? Apparently not for everyone. Here is the story of a case called Sieranski v. TJC Esq, decided a few days ago by the Appellate Court of Connecticut. The case involved a complaint for wrongful termination filed by a paralegal against her lawyer boss. In the complaint, the plaintiff alleged that after the attorney she worked realized that he had missed the deadline to appeal an arbitrator's decision on a case, the lawyer asked the plaintiff to prepare an affidavit stating that he had never received the arbitrator's decision. This was a lie, and the plaintiff refused to notarize the document because she knew it was false. The lawyer then fired the paralegal arguing that she “was not a good fit” for the office. I suppose that if lying is a job requirement, refusing to lie is, indeed, a sign that you are not a good fit for the job.
The paralegal sued and, not surprisingly, the court found that the alleged facts are sufficient to support a finding that the plaintiff's employment was terminated because she refused to assist the defendant in misleading the court and others involved in the subject litigation.
The question for us now is whether the lawyer should be disciplined. In my opinion, the answer is yes. I don’t know the rules in the specific jurisdiction, but using the Model Rules as a guide, I would say that the conduct violates several sections of Rule 8.4. For example, the conduct constitutes an attempt to violate the rules “through the acts of another” in violation of Rule 8.4(a). It also constitutes conduct involving dishonesty, fraud, deceit or misrepresentation in violation of Rule 8.4(c), and conduct that is prejudicial to the administration of justice in violation of Rule 8.4(d).
Thanks to Roy Simon for alerting me to this new case!
About a month ago I read a short article about two things happening in California related to the appearance of bias in the state's disciplinary system. I meant to write about it, but for one reason or another I didn't... So now I am.
Back in 2019, the California State Bar discussed a study that concluded that there is evidence of disparities in the disciplinary process based on race and law firm size. The study found significant differences between discipline rates of Black male and white male attorneys and between those of sole practitioners and attorneys in large firms. You can read a summary of the study here. A second study, commissioned to review the first one, confirmed the findings and made some recommendations.
In response, the Board of Trustees of the State of California created an Ad Hoc Commission on Lawyer Discipline to review the disciplinary system and to make recommendations for changes. Presumably, that commission is active. That's the first thing that is happening.
Meanwhile, the other thing that is happening, is that a disciplinary case has made its way through the courts and was recently remanded to the State Bar Hearing Department for further evidentiary hearings to determine whether the State Bar’s disciplinary practices had the effect of discriminating against the lawyer on the basis of race.
I am really interested to see what happens next in this case. The debate on whether there is some type of bias based on race, gender and/or firm size is not new, and I am happy to see that something is being done about it.
Stay tuned...
Here is a link to a short article on how disciplinary agencies are likely to handle complaints about lawyers who supported Trump or represented hi.
