South Carolina ethics advisory opinion finds that participating in programs like Avvo Legal Services is unethical

South Carolina's Ethics Advisory Committee has issued an opinion holding that participating in a program like Avvo's Legal Services is unethical. You can read the Opinion here.  

This comes as no surprise to me, or, I suspect, to readers of this blog since I have been saying that for quite some time.  (See here, here and here.  I also wrote a law review article on the subject which will be published by Georgetown Law Journal.  I will post a link when it comes out.)

Although the opinion does not mention Avvo specifically, it is clear from the description of the program it is commenting on that that is what is at issue here.  After describing the terms of the service, the opinion concludes that participating in it would violate the ban on sharing fees with non-lawyers:

In the situation described above, the service collects the entire fee and transmits it to the attorney at the conclusion of the case. In a separate transaction, the service receives a fee for its efforts, which is apparently directly related to the amount of the fee earned in the case. The fact that there is a separate transaction in which the service is paid does not mean that the arrangement is not fee splitting as described in the Rules of Professional Conduct.

A lawyer cannot do indirectly what would be prohibited if done directly. Allowing the service to indirectly take a portion of the attorney’s fee by disguising it in two separate transactions does not negate the fact that the service is claiming a certain portion of the fee earned by the lawyer as its “per service marketing fee.”

As I have argued before, the key to Avvo's problem is that the fee it charges is essentially a percentage of the lawyer's fee.  I have read Avvo's arguments to the contrary and they simply can't get around this fact. You can read their response to the South Carolina opinion here, and you will see they don't address this issue.  And that's because they don't have an argument. 

The opinion also states that marketing fees must represent the reasonable cost of the service, and these fees do not meet that criteria because the fees vary depending on the amount of the fees.  In other words, as stated above, the fees are essentially a percentage of the fees charged, as opposed to a set fee for advertising as Avvo claims.   As the opinion points out,

“Presumably, it does not cost the service any more to advertise online for a family law matter than for the preparation of corporate documents. There does not seem to be any rational basis for charging the attorney more for the advertising services of one type of case versus another.”

“The service, however, purports to charge the lawyer a fee based on the type of service the lawyer has performed rather than a fixed fee for the advertisement, or a fee per inquiry or “click.” In essence, the service’ s charges amount to a contingency advertising fee arrangement rather than a cost that can be assessed for reasonableness by looking at market rate or comparable services.”

Again, as I have argued in the past, I think this is correct. 

Interestingly, the opinion does not address another, perhaps worse, problem with Avvo's system:  the fact that Avvo retains the fee paid by the client until the work is performed, which I would argue violates the attorney's duty to safeguard that money by placing it in a trust account.

In any case, that is the third opinion this summer holding that for one reason or another participating in a program like Avvo's would be unethical.  See here (Ohio) and here (Florida).

Even so, though, according to the ABA Journal, Avvo is signing up lawyers in South Carolina and plans to launch there soon based on its stance that the opinion "is advisory and Avvo disagrees with the conclusions."  As Avvo's chief legal officer has stated “We’ve looked at the rules. We have our own interpretation of the rules."  That's cute.  Just like Avvo has stated elsewhere that it "believes" its fee arrangement system does not constitute fee sharing.

Of course Avvo will say it has a different interpretation of the rules.  Avvo wants to lure lawyers who need work into paying it for "leads."  But it is the the lawyers who take the risk of getting disciplined.  Remember that the rules don't apply to Avvo; they only apply to the lawyers who sign up with Avvo. 

For that reason, I would not advise a lawyer to sign up with Avvo in Ohio, Florida or South Carolina before the rules are amended unless he or she is willing to be disciplined in order to challenge the rules in court.

If that is a risk you are willing to take, my advise is for you to read up on Avvo's arguments in support of its "own interpretation of the rules."  Those are the arguments you would be trying to use in your defense against a disciplinary charge.  Just because Avvo claims it ‘believes’ that participating in its services does not place lawyers at risk of violating the rules of professional conduct does not make it so. Relying on Avvo’s claims is not a good substitute your own careful judgment.

For another comment critical of Avvo (other than my own) go here.

ABA Commission on Future of Legal Services issues its final report; I am not particularly impressed -- UPDATED

Back in 2014, the American Bar Association created a Commission on the Future of Legal Services and charged it with the task of studying how legal services are delivered in other countries and of recommending innovations that would improve the delivery of, and the public’s access to, legal services in the United States.

At the time, this seemed like a great way to organize what could otherwise have become an ever expanding and hard to manage debate, but now that the Commission's final report is out, it is being criticized for a number of reasons.   

The Commission presented its final report at the 2016 ABA Annual Meeting and it has already been criticized for avoiding the hardest issues.  See here, here and here, for example. The commission stated that courts should be open to innovations in the delivery of legal services and called on them to adopt the ABA Model Regulatory Objectives for the Provision of Legal Services but fell short of taking a specific stance on the more controversial topics.  It merely encouraged states to “explore how legal services are delivered by entities that employ new technologies and internet-based platforms and then assess the benefits and risks to the public.”  In other words, after two years of work, the Commission encouraged the states to consider what the Commission itself considered during those two years.  And, as for the notion of alternative business structures, the Commission’s report’s language is even more tentative.  It merely states that “[c]ontinued exploration of alternative business structures (ABS) will be useful.”

Thus, while the ABA’s Commission took steps to open the door to innovative approaches to the delivery of legal services, even considering allowing alternative business structures and non-lawyer service providers, the ABA itself continues to avoid embracing some of those approaches.  As expressed by one commentator, even though the report documents the successful use of non lawyer legal services providers (LSPs) in a number of jurisdictions,

rather than explicitly endorse wider use of LSPs, the commission passes the buck, calling on courts to “examine, and if they deem appropriate and beneficial to providing greater access to competent legal services, adopt rules and procedures for judicially authorized and regulated legal services providers.”

With regard to companies that use technology to deliver legal services, the commission finds that “in many instances, these innovative LSP entities have positively contributed to the accessibility of legal services.” Here again, however, the commission takes the route of recommending further study, calling on states to “explore how legal services are delivered by entities that employ new technologies and internet-based platforms and then assess the benefits and risks to the public associated with those services.”

. . . .

. . . No one can deny that the future of legal services hinges on how we, as a profession, answer critical questions about evolving business models, evolving service-delivery models, and emerging technologies. Yet on these questions, the commission falls short of taking bold and decisive stands, instead recommending further study and consideration.

Moreover, as a result of the Commission’s report, the ABA has done what it does all too often.  It created yet another Commission – or, in this case, a Center – to be chaired by one of the co-chairs of the ABA Commission on the Future of Legal Services, to continue studying the issues.  This new Center, to be known as The Center for Innovation, will be responsible for “driving innovation in the justice system and the legal profession” by, among other possibilities, serving as a resource for ABA members, maintaining an inventory of the ABA’s innovation efforts as well as the efforts of the domestic and international legal services community, and operating a program of “innovative fellowships” to work with other professionals, such as technologists, entrepreneurs and design professionals, to create models that improve the justice system.

How these goals can be achieved, of course, is the real challenge that lies ahead.

In addition to recommending the creation of the Innovation Center, the Report lists 11 specific recommendations, most of which are general and things that no one would disagree with. For example:

1. The legal profession should support the goal of providing some form of effective assistance for essential civil legal needs to all persons otherwise unable to afford a lawyer.

2.  The legal profession should adopt methods, policies, standards, and practices to best advance diversity and inclusion.

3.  The criminal justice system should be reformed.

4.  Resources should be vastly expanded to support long-standing efforts that have proven successful in addressing the public’s unmet needs for legal services.

5.  Outcomes derived from any established or new models for the delivery of legal services must be measured to evaluate effectiveness in fulfilling regulatory objectives.

6.  The ABA and other bar associations should make the examination of the future of legal services part of their ongoing strategic long-range planning.

7.  Courts should be accessible, user-centric, and welcoming to all litigants, while ensuring fairness, impartiality, and due process.

8. All members of the legal profession should keep abreast of relevant technologies.
[Note that idea has been incorporated into the Model Rules and into the rules of most states by now.]

Then there is this interesting recommendation:  

9.  Individuals should have regular legal checkups, and the ABA should create guidelines for lawyers, bar associations, and others who develop and administer such checkups.

I am not sure I understand this one.  The report reminds us that most Americans don't have access to legal representation, but at the same time it recommends that all Americans go get a legal check up regularly.

Finally, there are the recommendations that are going to be the center of criticism of the Commission:

10.  The legal profession should partner with other disciplines and the public for insights about innovating the delivery of legal services.

I am not sure how to interpret this recommendation.  Is the Commission endorsing eliminating the ban on allowing lawyers to form partnerships with non-lawyers or something less controversial?  I am not sure.  My guess is that working on this recommendation will be part of the new Center's goal.

11.  Courts should consider regulatory innovations in the area of legal services delivery.

OK, but, as stated above, this is kind of an empty recommendation because all the Commission does is recommend that state courts consider that which the Commission has been considering for the last two years.  I would have preferred to see something more concrete.

Also, it is interesting that rather than recommend the use of innovative ways to provide access to legal services, the Commission is recommending the adoption of innovative regulation to manage the delivery of legal services.

UPDATE (8-23-16):   A few days after I posted this, I posted a link to an interview with one of the founders of LegalZoom with more criticism of the Commission's report.  The same website that published that interview, now has a column by the co-chairs of the Commission in which they respond to the criticism.  You can read it here.  They reply to some direct criticism of the report and defend its conclusions and recommendations, but it is not clear to me they explain why the language of the recommendations is tentative.  Why, instead of recommending states to "consider" something, not recommend that they "adopt" a particular view or approach.  I don't have a problem with the recommendations; I guess I just expected that they would be more definitive or concrete.

UPDATE (8-24-16):  Another member of the Commission has posted a reply to some of the criticism here.

UPDATE (10-23-16):  The Legal Talk Network has posted a podcast discussing the Commission's report.

ABA adopts amendment to Model Rule 8.4; is it unconstitutional?

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.  The final version of the amendment is available here.

Here is my concern: the adopted amendment does not address the fact that the new rule can be applied to impose sanctions on attorneys for expressing Constitutionally protected speech.  In fact, on this point, the adopted proposal is worse than the original.   The earlier version of the proposal stated explicitly in the proposed new comment that the rule did not apply to conduct protected by the First Amendment.  Unless I missed it, that language has been taken out. 

Worse still, the adopted comment to the rule states that the rule applies to "harmful verbal . . . conduct that manifests bias or prejudice towards others."

What exactly does "harmful verbal conduct" mean?  I don't know how that is different than a verbal expression.  And once we understand that as an expression, the First Amendment's protection of freedom of speech comes into play.

And what is it that makes the expression "harmful"?  As stated in the new comment, it seems that what makes the "verbal conduct" harmful is the fact that it "manifests bias or prejudice."  Note that it does not say verbal conduct that results in some sort of exclusion or discrimination.  It only seems to require that the verbal conduct express bias.

The ABA being a private organization can adopt any rules it wants to apply to its members.  However, assume a state adopts the new language for its own rules, how would that not be an example of the state trying to penalize someone for expressing his or her views because those views are objectionable to others?  Isn't that what the First Amendment is there to prevent?

What do you think?  Can a ban on "harmful verbal conduct" survive a Constitutional attack?

Parents of two Americans killed in Benghazi sue Hillary Clinton for wrongful death; should attorney be sanctioned for filing frivolous lawsuit?

NPR is reporting that the parents of two Americans killed in Benghazi, Libya, are suing Hillary Clinton for wrongful death, alleging the 2012 attack "was directly and proximately caused" by the then-secretary of state's mishandling of government secrets.  Even though none of the many Congressional investigations nor the FBI investigation found any proof that the attack was due to access to information in Clinton's emails, the lawsuit argues that Islamic terrorists were able to track the movements of Ambassador Chris Stevens and plot the deadly siege because of Clinton's use of a personal email server to conduct government business.

Here is a copy of the complaint. The main argument is this:

It is highly probable, given Defendant Clinton’s history of reckless handling of classified information, that Defendant Clinton, as Secretary of State, sent and received information about Ambassador Christopher Stevens and thus the U.S. Department of State activities and covert operations that the deceased were a part of in Benghazi, Libya. This information was compromised from the second that it left Defendant Clinton’s private e-mail server and easily found its way to foreign powers including, but not limited to Russia, Iran, China, and North Korea. As a direct result of Defendant Clinton’s reckless handling of this classified, sensitive information, Islamic terrorists were able to obtain the whereabouts of Ambassador Christopher Stevens and thus the U.S. State Department and covert and other government operations in Benghazi, Libya and subsequently orchestrate, plan, and execute the now infamous September 11, 2012 attack.

In the section on "facts" (presumably the factual basis for the complaint), the plaintiffs affirm that "Islamic terrorists obtained the information sent and received by Defendant Clinton about the location of Ambassador Christopher Stevens and thus the U.S. Department of State and the covert CIA and other government operation s in Benghazi and used it to plan, orchestrate, and carry out the horrific and devastating attack on the American diplomatic compound in Benghazi, Libya on September 11, 2012 (“Benghazi Attack”), resulting in the death of four Americans..."

Now, this is a very different type of statement.  This is an affirmative statement of fact, which, presumably, the plaintiffs will be able to prove.  Is there any evidence that what is alleged here is true?   Not according to any of the investigations I have heard of, but I guess it is possible there is information out there I am not aware of.  Are you?  Let me know.

If there is no basis in law or fact for the complaint, this is a frivolous lawsuit, and I think it will be dismissed in due time.  The only question in my mind is whether the lawyer who brought it will be sanctioned for violating the ethical duty, and procedural rules, against bringing frivolous claims.  According to Above the Law, the lawyer "has been banned from multiple judges’ courtrooms" and has orchestrated other politically motivated legal stunts, including a deportation petition against President Obama, which claimed the president was born in Kenya; alleging the Clintons murdered White House associates in the 90s; and filing lawsuits accusing the Clintons of racketeering.

For more go to NPR or Slate. 

ABA approves resolution urging recognition of evidentiary privilege to cover communications between prospective clients and lawyer referral services

The ABA House of Delegates just adopted a Resolution, which urges courts and legislatures to adopt rules or enact statutes that would establish an evidentiary privilege for communications between bar-sponsored lawyer referral services and the clients who contact them for assistance in locating representation.

Florida adopts amendments to rules that may make it improper for lawyers to participate in Avvo Legal Services and other similar "matching" sites

Original post (July 11, 2016); Update below:

I recently posted a note on a recent opinion in Ohio which essentially concludes it is unethical for lawyers to participate in services like Avvo's Legal Services.  (I happen to think that, as presently constituted, participating in Avvo Legal Services is unethical pretty much anywhere (see here, here and here), but not everyone agrees with me.)

Now comes news that the Florida Bar is considering certain amendments to its rules on referral services, which, depending on how they are interpreted, may also make it unethical to participate in Avvo's services.

Avvo Legal Services can argue it should not be considered a referral service, but the proposed Florida rule is apparently designed to defeat that argument by eliminating the distinction between referral services and "lead generators" - which is what Avvo is.  The new Florida rule holds that any private entities that connect consumers looking for legal services with lawyers are to be called “qualifying providers” regardless of whether they are a “traditional” referral service or a technology-based provider (AVVO, LegalZoom).

Once all the different services are in the same category, whether they are lead generators or referral services does not make a difference.  And the other important change to the rule is that it says that a lawyer can participate in private, for profit service only if the lawyer receives no fee or charge that is a division or sharing of fees unless the provider is The Florida Bar Lawyer Referral Service or a referral service approved by the Florida Bar.

As I have discussed elsewhere, Avvo disputes that its payment structure constitutes fee sharing, but I think the argument can easily be made that it is.  In such a case, therefore, unless the Florida Bar has "approved" Avvo as a referral service in Florida - which I doubt - than Florida lawyers would be violating the rules by participating in Avvo's Legal Services.

You can find the redline version of the proposed rule and its comment here.   Lawyers Ethics Alert Blog has more information here.

UPDATE (8/1/16):   The Board of Governors met on Friday, July 29, 2016 in Miami Beach and approved the proposed revisions.  Lawyer Ethics Alert Blog has more details here.

DC's strange concept of moral turpitude -- UPDATED

In Washington DC, disbarment is mandatory for convictions of crimes that involve moral turpitude, yet I continue to be baffled by Washington DC's concept of moral turpitude.  I have discussed cases that found no moral turpitude when a lawyer was convicted of murdering his wife (here), or of stealing property from a store for personal gain (here), or of felony traveling for the purpose of engaging in sex with a minor in a case in which the attorney had made a 12-year-old boy his sex slave for six years (here). Yet tampering with a witness was considered to involve moral turpitude (here). See here for more.

Adding to the list now we have a case in which an attorney who pleaded guilty to a misdemeanor violation of 22 D.C. Code section 3531(c), which makes it a crime to electronically record, without consent, a person using a bathroom or restroom or who is undressing or changing clothes.

According to the Legal Profession blog, Maryland recently disbarred an attorney who videotaped three tenants in intimate encounters.

In Washington DC, apparently this type of conduct is not considered to involve moral turpitude and resulted in only a three year suspension.

The Legal Profession Blog has more information on the case here.

For a short summary of the issues related to the concept of moral turpitude go here.

UPDATE (7/30/16):  The District of Columbia Board on Professional Responsibility has issued its long-awaited report in which it explains that it disagreed with a hearing committee recommendation and concluded that the attorney's crime involved moral turpitude.  The Legal Profession Blog has more details here.  The Board apparently stated this was "a difficult case."  I don't understand that.  To me this was an easy case, but as you know, I have long had reservations about DC's concept of moral turpitude, so what do I know...

South Carolina opinion finds lawyer can wait until litigation is over to report misconduct under rule 8.3

The South Carolina bar's ethics committee has issued an opinion (S.C. Bar Ethics Advisory Comm., Op. 16-04, 7/18/16) holding that a lawyer who believes an opposing attorney in a pending matter has committed professional misconduct may wait until the proceeding concludes to make a disciplinary report.

The generally accepted rule on this is that if the rule applies, attorneys must disclose misconduct "promptly."  However, it is not always clear what "promptly" means.  In the well known In re Himmel case in Illinois, the affected attorney argued that he did not want to disclose the misconduct because doing so would be contrary to his client's interests.  The attorney wanted to wait until he got his client the compensation the client wanted before disclosing.  In that case, the court did not buy the argument.

Yet, it appears the SC committee agrees with it, holding that a lawyer may wait until the conclusion of the matter if the lawyer determines immediate reporting may hurt the client. However, the misconduct should be reported “promptly” at the conclusion of the litigation or appeal.  Thus, the committee concluded that “it is appropriate for a lawyer to consider any potential adverse impact to his or [her] client in determining the timing of a report against another lawyer.”

I understand the spirit of the opinion, but it seems to me it does not take into account that civil litigation can take years to conclude.  Indeed, although not all cases take years to conclude, it is certainly not uncommon for some cases to last a long time.  Should that make a difference?  And what if the representation is not in litigation? 

Washington State Supreme Court holds plaintiff has to show actual innocence in malpractice claim against former criminal defense lawyer

Back in February I reported (here) that the two most recent decisions on whether a convicted criminal defendant had to prove actual innocence in order to recover for malpractice against his or her former lawyer had broken away from the majority view on the issue.  The majority view is that the plaintiff does have to obtain post conviction relief and prove that he or she was actually innocent of the crime for which they were convicted. Yet cases in Kansas and Iowa recently held otherwise.

Now comes news that the Washington State Supreme Court has reversed the trend and has held that a criminal defendant must establish actual innocence to sue the defense attorney for malpractice.  The case is called Piris v Kitching and you can read the opinion here.  The Legal Profession blog has more details here.

One Justice dissented in Piris, making what I think is a persuasive argument.  Interestingly, the argument is not that plaintiffs should not have to show actual innocence in all cases, but that it was improper to use that "rule" in this particular case because the plaintiff had already obtained post conviction relief.

Christopher Piris successfully obtained postconviction relief from a miscalculated sentence. But due to alleged attorney negligence, he was not timely resentenced and he spent more time imprisoned than his corrected sentence authorized. The majority holds that Piris cannot pursue malpractice claims against his defense attorneys unless he proves he is actually innocent of the underlying charges. I disagree. When a client wins postconviction relief for resentencing and attorney negligence results in the client's excessive imprisonment because the client did not timely receive the benefit of resentencing, it is no excuse to say that the client was subject to some imprisonment. Extending the "actual innocence rule" to the unique circumstances of this case serves only to perpetuate an injustice. I respectfully dissent...

In other words, the plaintiff in the malpractice case (defendant in the original criminal case) endured a longer stay in jail (more than a year) because of the attorney's conduct.  Yet the court says he was not entitled to a remedy because he was "due" some time in jail anyway.  The fact that the attorney's conduct caused him to suffer more than he was legally "due" is irrelevant to the majority.  I agree with the dissent in this case.  This view is not justified.  It allows for an injustice to go unpunished and gives a pass to an attorney whose conduct clearly caused injury to the client.  I don't see why it makes sense to give the attorney such a free pass.

What Can Johnny Manziel Teach Lawyers About Ethics?

What Can Johnny Manziel Teach Lawyers About Ethics? Go here for the first installment of this multi-part column at IPethics & INsights.

New proposed California rules are now ready for comment

Long time readers of this blog know that I have been following the process of revision of the rules in California.  See here and here, for example.  Here is the latest:  The State Bar of California has authorized public comment on 68 proposed new and amended Rules of Professional Conduct developed by the State Bar’s Commission for the Revision of the Rules of Professional Conduct (“Commission”). The public comment period is 90-days with a deadline of September 27, 2016.

You can access the public comment notice and proposed rule drafts posted at the Bar’s website here. 

The Board also authorized a public hearing on the proposed rules. The public hearing is scheduled for July 26, 2016.  It will be held at the Los Angeles office of the State Bar with a remote audio/video connection to the San Francisco office. Testimony may be given at either location.

North Carolina legislature amends definition of practice of law as part of agreement with Legal Zoom

Last December I reported that the North Carolina Bar and Legal Zoom reached a consent agreement which suspended the litigation between them for two years or until the legislature approved an amendment to the definition of the practice of law.

The amendment was finally approved about a week ago when the House and the Senate both unanimously passed House Bill 436 after a conference committee spent months negotiating the final language in the bill.

The measure now heads to Gov. Pat McCrory.

The bill redefines the term "practice of law" in the state by exempting services that provide blank legal documents. The services must register with the State Bar every year, and each type of document must be reviewed and approved by a licensed North Carolina attorney before going online. The services also must include a disclaimer that the online documents aren't a substitute for seeking legal advice, and any customer satisfaction disputes must be referred to the State Bar.

Is there a duty to disclose to client that co-counsel has committed a significant error?

What should you do when you are co-counsel on a case or in a deal, and you become aware that the other lawyer has made an error?  A new ethics opinion from the New York State Bar Association says that if you reasonably believe that your co-counsel has committed a significant error or omission that may give rise to a malpractice claim, you must disclose the information to the client.  The Law For Lawyers Today has more information here.

Attention Ohio Lawyers: PR Board finds participating in programs like Avvo Legal Services is likely unethical

Just a few weeks ago the Professional Responsibility Board of the Supreme Court of Ohio issued an advisory opinion on whether it is ethical to participate in certain internet programs that "match" prospective clients with available lawyers.  The opinion does not mention any such services specifically by name but given the description of the services, it is clear (at least to me) that one of the programs at issue is Avvo Legal Services.  The opinion concludes that the business model of these types of services present many ethical concerns and that because of at least some of them, participating in them might be unethical.

The opinion starts by explaining the question presented as follows:

A lawyer seeks guidance regarding whether a particular business model involving online lawyer referrals is permissible under the Rules of Professional Conduct and the Rules for the Government of the Bar of Ohio. The proposed business model is an online referral service that matches a prospective client with a lawyer for a particular legal service. Although the client chooses the lawyer, the company defines the types of legal services offered, the scope of the representation, the fees charged, and other parameters of the legal representation. Additionally, the model requires a lawyer to pay a “marketing fee,” for each completed client matter. The “marketing fee” is based on the fee generated from the completed individual legal matter.

Based on this description, the opinion concludes that the business model at issue constitutes a “referral service” regardless of how the company running it describes itself.  I am not sure I agree with this conclusion.

I don’t think that the hypothetical business model described in the Ohio Board’s opinion is a referral service because the consensus on whether online matching services constitute “lawyer referral services” turns on whether such services utilize someone exercising discretion, such as an intake worker answering a telephone, when determining which attorneys to recommend to which clients based upon some stated criteria. See ABA Standing Committee on Lawyer Referral and Information Service, The Regulation of Lawyer Referral Services: A Preliminary State by State Review, page 5.

Thus, if the program at issue simply creates and provides a list of potential lawyers from which potential clients can choose who they want to hire, the argument that the program is a referral service is weaker.  In such a case, the program is more akin to a “lead generator,” a type of business model that is mentioned specifically in the Comment to Model Rule of Professional Conduct 7.2 which bans giving anything of value to a person for recommending the lawyer’s services.

In Ohio, however, the key is not a ban on paying a fee, even if that fee is calculated as a percentage of the legal fee earned on the referred matter.  The key is whether the referral service is registered with the Supreme Court of Ohio.  If the service is not registered with the Court or if it does not follow all the requirements imposed by the Court’s regulations, participating in the service is unethical.

The Board then goes on to discuss other concerns including the duty of a lawyer to supervise non lawyers, the possibility of lawyers facilitating the practice of law by non lawyers, the possible interference with a lawyer's independent professional judgment, the sharing of fees with non lawyers and possible violations of the duty to keep client money in a trust account.  This is not surprising to me since these are some of the issues I have argued create problems for lawyers participating in Avvo's Legal Services.

You can read the Ohio Board's Opinion here.

Judge in trial of police officer charged with murder in the death of Freddie Gray rules that prosecutors withheld exculpatory evidence

According to a story in ABC news, available here, the judge overseeing the trial of a police officer charged with murder in the death of Freddie Gray has determined that prosecutors withheld information that would have been beneficial to the defense.  It seems to me this would be big news, but, oddly, I have not seen this reported anywhere else. 

Thanks to the Legal Ethics Forum for the link.

New York State Bar ethics opinion addresses ethics issues when a lawyer copies a client with communications to opposing counsel

A recent New York State Bar Association Ethics Opinion (available here) addresses whether a lawyer must obtain the consent of opposing counsel before he or she can blind copy the client on correspondence to opposing counsel. The opinion concludes that "[a] lawyer may blind copy a client on e-mail correspondence with opposing counsel, despite the objection of opposing counsel.  Because a lawyer is the agent of the client, sending such a blind copy is not deceptive.  However, there are practical reasons why the lawyer should consider forwarding the e-mail correspondence to the client rather than using “bcc”." 

Lawyer Ethics Alerts Blog has more information here.

New York Times editorial board calls for federal government oversight over DA offices that violate defendants' rights

In a recent Op-ed piece, the NY Times is arguing that because prosecutors are almost never held accountable for misconduct, even when it results in wrongful convictions "it is time for a new approach to ending this behavior: federal oversight of prosecutors’ offices that repeatedly ignore defendants’ legal and constitutional rights." You can read the full article here.

Illinois Appelate court on whether there is a duty to disclose death of client during settlement negotiations -- UPDATED, again

Back in February, 2015 I posted a story about an Illinois appellate court's opinion on whether an attorney has a duty to disclose the death of a client when the attorney is negotiating a settlement in litigation. The case is called Robison v. Orthotic & Prosthetic Lab, Inc and it is available here.  I later updated the story with the news that a disciplinary action had been filed against the attorney.  Today I am updating the story again to report that the Illinois Supreme Court has censured the lawyer. Go to the bottom of the post for the most recent update.


Original Story (February 2015)

About ten days ago, the Illinois appellate court issued a good opinion that deals with several issues we cover in class. The first one is whether an attorney has a duty to disclose the death of his client when the attorney is negotiating a settlement in litigation. The case is called Robison v. Orthotic & Prosthetic Lab, Inc and it is available here.

In this case, the plaintiff, Randy Robison, filed a product liability action against the defendant, Orthotic & Prosthetic Lab, Inc. in 2008.   In January, 2013, while the case was still ongoing, the plaintiff died but the plaintiff’s lawyers did not alert the court or the attorneys for the defendant.

In September 2013, the attorneys for both sides began settlement negotiations and reached an agreement on September 24. To finalize it, the attorney for the plaintiff sent an e-mail to the attorney for the defendant in which he stated “My client has instructed me to accept . . . in full and final settlement of this matter. Please provide an appropriate release and I will present it to my client for review and approval.”

The plaintiff's lawyer did not notify the defendant's lawyer of the plaintiff's death until after the defendant had submitted the settlement agreement, and he did so when he sent an amended version of the proposed release in which he asked the defendant's lawyer to agree to substituting the plaintiff's son as plaintiff in the case.  The defendant's lawyer refused and asked how come he had not been informed of the plaintiff's death, to which the plaintiff's lawyer replied that he had researched the issue and determined that he had no affirmative duty to disclose the information because it was against his clients' interests and he had a duty to protect his clients' interests within the bounds of the rules of professional responsibility.

The defendant refused to follow through on the settlement agreement claiming it was not valid, and the plaintiff moved to enforce the settlement.  Eventually, the lower court granted the motion and the defendant appealed.

In a short and well written opinion, the Court of Appeals reversed holding that the agreement was not valid and suggesting that the conduct of the attorney for the plaintiff in not disclosing the death of the client was unethical.  Interestingly, it also suggested that the conduct of the defendant's lawyer was unethical in not reporting the conduct of the plaintiff's lawyer.  Here are the most important paragraphs of the opinion:

... The defendant further argued that the settlement was invalid because the death of the plaintiff was a material fact that had been concealed from the defendant prior to and during settlement negotiations. ...

....

Settlement negotiations commenced in September 2013, and an agreement was ostensibly reached on September 24, 2013. The defendant, however, had no knowledge about the plaintiff's death or the appointment of a personal representative throughout the period of settlement negotiations. [These facts were not disclosed until] weeks after the settlement was reached and months after the plaintiff's death. [The plaintiff's lawyer acknowledged that] the disclosure of the plaintiff's death would have adversely impacted the settlement value of the case. He stated that he believed that the decision to withhold the information was in his clients' best interest and was in keeping with the rules of professional responsibility. We strongly disagree. We find that the arguments expressed by [the plaintiff's lawyer] are specious and incredible, and we are concerned about his professional judgment in this case. In failing to disclose the fact of the plaintiff's death, [the plaintiffs lawyer] intentionally concealed a material fact that would have reduced the overall value of the claim for damages. In addition, and equally troubling, [he] led the defendant to believe that he had authority to negotiate a settlement of the litigation on behalf of the party plaintiff, when the action was without a plaintiff as the plaintiff had died and a representative had not been substituted. Given [these] intentional misrepresentations and material omissions prior to and during the settlement negotiations, we conclude that the settlement agreement is invalid and unenforceable, and that the trial court erred in granting the motion to enforce it. 

In my opinion, this is the correct approach to the issue, but it needs to be explained a bit further.  Although it is well known that a lawyer does not have a general duty to volunteer adverse facts to an opponent in litigation,  Rule 4.1 has been interpreted to imply an exception which requires the disclosure of a client's death.  The most cited case holding this proposition is Virzi v. Grand Trunk, 571 F. Supp. 507 (E.D. Mich. 1983), which approaches the issue from the perspective of a duty to the court because in that case the attorney did not disclose the death of the client until after the court had entered an order. However, the court does go on to say that just as the lawyer owes a duty to the court, he or she also owes the same duty to opposing counsel.  Based on this view, at least two courts (one in Ohio and one in Kentucky) have imposed sanctions on attorneys for failing to disclose their client's death. In Robison, the court did not discuss rule 4.1 but emphasized the attorney's general duty of honesty under rule 8.4, which is presumably owed to everyone.

Interestingly, the court did not stop there and also took up the fact that counsel for the defendant did not report the misconduct under rule 8.3:

Finally, we believe that we have a profound responsibility to comment on the conduct of the attorneys in this case.  ... Rule 8.4(c) of the RPC states that it is professional misconduct for a lawyer to engage in conduct involving dishonesty, fraud, deceit, or misrepresentation. ...   Rule 8.3 requires a lawyer to report unprivileged knowledge of misconduct involving fraud, dishonesty, or deceit, or misrepresentation by another lawyer to the Illinois Attorney Registration and Disciplinary Commission (ARDC). ...

In this case, we believe that the material omissions and misrepresentations ... constitute serious violations of Rule 8.4. We also believe that defense counsel possessed sufficient knowledge to trigger a duty to report [the plaintiff's lawyer's] misconduct to the ARDC, and that the failure to report the misconduct constitutes a potential violation of Rule 8.3.

UPDATE 10/26/15:  About ten days ago, a formal disciplinary complaint was filed against the lawyer who did not report the death of the client.  You can read the complaint here.  (Thanks to the Legal Profession blog for the update.)  It remains to be seen if there will be a complaint against the lawyer who did not report the misconduct.  Given the language in the opinion, it seems to me it would be inconsistent, to say the least, if the administrator did not do so.

UPDATE 12/14/15:  The attorney has now filed an answer to the disciplinary complaint (available here) in which he argues that he researched the issue and discussed the matter with his partners and concluded that the death of his client was confidential information which he had a duty not to disclose under Rule 1.6(a). 

UPDATE 5/27/16:   The Illinois Supreme Court has imposed a censure on the lawyer for settling the case without informing court or opposing counsel of the client’s death.  The case is In the Matter of: Anthony Patrick Gilbreth, No. 6289576, Commission No. 2015PR00100 (Ill. SC May 18, 2016).   Lawyer Ethics Alert Blog has more information here.

New Podcasts

The Legal Talk Network has just posted a bunch of new podcasts, most of them related to "technology" and innovation.  Here is a list of (and links to) a few of them:

How Artificial Intelligence Will Influence the Future of Legal Practice

How Technology Has, and Will, Impact the Practice of Law

What Lawyers Should Know About Cloud Computing Security Standards

The Limited License Legal Technicians Program

Rocket Lawyer’s Charley Moore sees lawyer collaboration as the future

Prosecutors Coercing Defendants to Contribute to the Prosecutor’s Favorite Charities

Ron Rotunda's most recent column at Verdict  is about prosecutors who force defendants to contribute to charity. His conclusion:  "The best way to avoid the appearance of impropriety is not to engage in the conduct at all. Fines in plea bargains should go to the state or federal treasury, not to friends of the prosecutor."

Puerto Rico adopts statute of limitations for disciplinary proceedings

About two weeks ago, the Governor of Puerto Rico signed into law a bill that creates a 3 year statute of limitations for disciplinary proceedings (subject to a few exceptions).  As you may know, the majority of the states follow the approach suggested by the ABA in Rule 32 of the Model Rules for Disciplinary Enforcement, the comment to which states:

Statutes of limitation are wholly inappropriate in lawyer disciplinary proceedings. Conduct of a lawyer, no matter when it has occurred, is always relevant to the question of fitness to practice. The time between the commission of the alleged misconduct and the filing of a complaint predicated thereon may be pertinent to whether and to what extent discipline should be imposed, but should not limit the agency's power to investigate. . . .

Discipline and disability proceedings serve to protect the public from lawyers who are unfit to practice; they measure the lawyer's qualifications in light of certain conduct, rather than punish for specific transgressions. Misconduct by a lawyer whenever it occurs reflects upon the lawyer's fitness.

If you can read Spanish, you can read my comment on the newly adopted statute in Puerto Rico here.  In that article I argue that adopting the new statute does not make much sense for a number of reasons:

1.  There is no need to adopt a statute of limitations because there is precedent that holds that a disciplinary action should be dismissed if the amount of time the state has taken to file the complaint has placed the attorney in question at a disadvantage.  Under that approach, cases are decided on a case by case basis depending on whether the passage of time has had a detrimental effect on the attorney's ability to defend himself or herself against the allegations.

2.  There is no logic in placing the statute in the Puerto Rico Civil Code.  The statute of limitations should be in the rules for disciplinary enforcement.  In fact, the Puerto Rico Supreme Court is currently considering a proposal to establish new rules.  The Legislature should have deferred to the Supreme Court at least until it finished its revision of the rules.

3.  The majority of American jurisdictions do not have a statute of limitations for disciplinary actions, and the time period adopted in Puerto Rico is shorter than almost all of those adopted in the few jurisdictions that have adopted one.

4.  Although the statute does recognize an exception for conduct that constitutes a crime, it does not recognize an exception for cases of non-criminal intentional conduct.  In fact, the statute makes no distinction among different types of conduct.

5.  The Puerto Rico Supreme Court is currently considering new rules for disciplinary procedures and new rules of professional conduct.  The proposal for disciplinary proceedings has two options as to a possible statute of limitations.  The first one is not to adopt a statute; the second one is to adopt a 5 year statute of limitations with a series of exceptions.  The drafters wanted to give the Supreme Court the alternatives and let it decide.  The Legislature has now taken that decision from the Court.  Some have argued this is a violation of the principle of the separation of powers.

Two days ago I lamented the lack of action against prosecutors who present false testimony; here is an example of the opposite

A couple of days ago, I commented on a news story about possible perjury by prosecutors’ witnesses and complained about the lack of action against prosecutors who present false testimony.

In response, one of the readers of the blog sent me a copy of Grievance Administrator v. Plants (March 20, 2012) in which the Michigan Attorney Disciplinary Board disbarred a prosecutor for presenting perjured testimony. In its opinion, the Board stated that "knowing submission of false testimony is among the most serious of ethical violations and the presumptive sanction for such misconduct is disbarment."

Thank you very much to Cynthia for the link!

ABA Journal on perjury by prosecutors' witnesses, but no comment on the conduct of the prosecutors -- UPDATED

The ABA Journal has a story today on how courts are not doing much about a little kept secret in Chicago courts:  that police officers sometimes lie on the stand.  I wrote "sometimes" but the tone of the story clearly implies this is a much bigger problem than that.

In any case, the story and the comments are all about how there are little consequences for the officers who lie on the stand, which is likely true.  But what is not discussed in the story is the role of the prosecutors who present the testimony.  How come they get a pass too?  If it is true that "everyone knows" the witnesses are lying, can you really say the prosecutors didn't know?  And if that is the case, shouldn't they be disciplined for it?

Obviously, part of the problem is proving the allegations of "knowledge" but the rules clearly hold that knowledge "can be inferred from the circumstances."   I have said it a million times and will continue to say it.  If you want to do something about prosecutorial misconduct, judges have to start taking it seriously.

For more comments on prosecutorial misconduct go here and scroll down.

UPDATE 10:30pm:  So, a few hours after I posted this comment and my complaint about judges not taking prosecutorial misconduct seriously, I came across this story in Simple Justice about what appears to be the very first ever attempt to impose sanctions on a prosecutor in Utah.

Ohio's Board on Professional Conduct issues opinion on duty to report misconduct, which is different under Ohio rules

Back in February I wrote a comment on the first ethics opinion of the year by the Ohio Board on Professional Conduct in which I argued the opinion was based on faulty analysis.  As I looked more into the issue, I realized the problem was not with the opinion but with the text of the Ohio rules which is different than that of the Model Rules.  I later wrote an article about it.

Just about a month ago, the Board issued its second opinion of the year and it again illustrates that another of Ohio's rules is different from the text adopted in most jurisdictions.  The opinion (available here) attempts to clarify an attorney's duty to report misconduct under rule 8.3.

Ohio's version of Rule 8.3 states (in relevant part) that "A lawyer who possesses unprivileged knowledge of a violation of the Ohio Rules of Professional Conduct that raises a question as to any lawyer's honesty, trustworthiness, or fitness as a lawyer in other respects, shall inform a disciplinary authority empowered to investigate or act upon such a violation."

So here is my first question:  what is "unprivileged knowledge"?  Knowledge can't be privileged or unprivileged.  What is privileged is the information about which one has knowledge.  But that's just a matter of language.  It seems to me it is clear that what the rule means to say is "a lawyer who has knowledge of privileged information.."

The Board appears to read the text this way too since it states in the opinion that in order to determine if there is a duty to disclose lawyers should consult rule 1.6 to determine whether information is privileged or unprivileged.

Yet, this statement does not make much sense since Rule 1.6 does not address that question.  Rule 1.6 defines the duty of confidentiality, not the extent of the privilege, which is a matter of the law of evidence.  The Board seems to confuse the important distinction between confidentiality and privilege.

For this reason, it is not entirely clear that the Board realizes that, as it is drafted, Ohio's Rule 8.3 (on reporting misconduct) requires attorneys to disclose misconduct even if the misconduct is discovered as a result of a confidential communication as long as the information is not privileged.

Model Rule 8.3 states that a lawyer is not obligated to disclose misconduct if it would require disclosure of confidential information (protected under MR 1.6).  In contrast, in Ohio a lawyer is obligated to disclose the misconduct even if doing so would require disclosure of information protected by the duty of confidentiality under Rule 1.6, as long as the information is not privileged.

In addition, the Rule in Ohio applies if the information raises a question as to a lawyer's honesty, trustworthiness or fitness to practice, while according to the Model Rules, the duty to report only applies if the information raises a substantial question as to those same elements.

In other words, for these reasons, the duty to disclose misconduct is much broader in Ohio than in other jurisdictions that have adopted the language of the Model Rules.

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.

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.

Alcoholics and the Profession of Law

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

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.

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. 

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. 

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.  

I recently wrote a short essay on flat fees; here is the link

Last month, the Board of Professional Conduct of the Ohio Supreme Court released an advisory ethics opinion discussing the propriety of flat fee agreements. In it, the Board reiterates the principles contained in the Ohio Rules of Professional Conduct on whether a lawyer may enter into an agreement requiring a client to pay a flat fee in advance of representation and whether a lawyer must deposit such a fee into a client trust account.

I did not like the opinion when I first read it, so I decided to look at it more carefully.  Go here for my original post.  As I looked more into it I realized that the problem was not with the opinion but with the Ohio Rules of Professional Conduct, and, in particular with a paragraph in the comment to Rule 1.5 which does not appear in the Model Rules but was added by the drafters of the Ohio rules.  So I decided to write a short comment on the opinion and the rule/comment upon which it is based.  I recently posted a draft in SSRN.  You can take a look at it here.  The abstract reads:

Last month, the Board of Professional Conduct of the Ohio Supreme Court released an advisory ethics opinion discussing the propriety of flat fee agreements. In it, the Board reiterates the principles contained in the Ohio Rules of Professional Conduct on whether a lawyer may enter into an agreement requiring a client to pay a flat fee in advance of representation and whether a lawyer must deposit such a fee into a client trust account. Because these questions are addressed in the applicable Rules of Professional Conduct or their comments, the Opinion does not actually add much to the current state of the law. Unfortunately, however, that state of the law is based on a confusing and indefensible inherent contradiction within the applicable rules. By simply repeating that confused doctrine without criticizing it, the Board missed the opportunity to take a stand against the wrongheaded state of the law and to propose a much needed change in the applicable rules. As a result, the Board’s opinion merely reiterates a faulty analysis that leads to confusion and defeats the purpose of providing clear guidance to lawyers. This short essay will discuss the issues and will provide an alternative approach to help Ohio lawyers better understand the issues they face when handling flat fees paid in advance.

Podcast on technology and competence

There has been a lot of discussion on whether lawyers meet their duty of competence when it comes to "technology."  For some of my recent posts, and links, on the subject go here, here and here.

Adding to the list, the most recent podcast in the Legal Talk Network is features lawyer and legal technology blogger Bob Ambrogi talking about the lawyer’s duty of technology competence, how it applies to discovery and confidentiality, and how technology can really benefit lawyers too. You can listen to the program by hitting the play button below or by going here.

Federal District Judge enjoins Florida Bar from enforcing rule prohibiting truthful claims of expertise -- UPDATED

(You may remember this story from October 2015; skip to the bottom for the latest update.)

I have often criticized jurisdictions that impose sanctions when attorneys advertise that they specialize in a particular area of the law based on the notion that such a claim is either "misleading" or in violation of a rule that prohibits lawyers from advertising that they are “a specialist" unless the lawyer is actually so certified by a certifying agency, the state or the ABA.   I made my case against this view back in 2011 in reaction to a case from Indiana (here) and then again to the news about the case in Louisiana (here) and was happy to see a court reaching what I believe to be the correct result here.

Florida, one of those states that is very aggressive when it comes to enforcing rules related to advertising, was among those states that held that claiming to specialize in an area of the law should be considered to be unethical.  Until now.  Last week, District Court Judge Robert L. Hinkle (Northern District of Florida) found unconstitutional Florida’s rule.

The Bar had argued that potential clients would be misled into assuming that lawyers who advertise that they “specialize” or have “expertise” are board certified, but the Court found no evidence to support this argument.

Because the rule essentially bans attorneys from making true statements that describe their areas of practice, the judge concluded the rule was unconstitutional under the test used to determine the constitutionality of restrictions on commercial speech under the First Amendment.  Accordingly, the court enjoined the bar from prohibiting the plaintiffs from making truthful statements on websites, blogs or social media about their specialty and expertise.

This, in my opinion, is the correct approach to the issue -- as I have argued before in other cases (see links above).  The case is Searcy v Florida Bar, and you can read the Court's order here.

The ABA/BNA Lawyers' Manual on Professional Conduct has more on the story at 31 Law. Man. Prof. Conduct 566.

UPDATE 10/18/15:  The Lawyer Ethics Alert Blog has a comment here.

UPDATE 3/13/16:  The ABA Journal has a story on this in its February issue here.

Supreme Court orders new trial for death-row inmate because of prosecution failure to disclose evidence

The U.S. Supreme Court has ruled in a summary disposition that a death-row inmate’s due-process rights were violated when the prosecution failed to turn over material evidence.  You can read the opinion here (scroll down to page 33 of the document).  The ABA Journal.com has more here.

Ohio Board of Professional Conduct issues opinion on flat fees

Over the past couple of years many jurisdictions have issued opinions on whether flat fees can be non-refundable and the result of these opinions is a mixed bag of approaches.  By my non-scientific count (ie, what I have seen and written about here), the most common approach seems to be that flat fees are not earned upon receipt, and therefore must be deposited in a trust account until earned.  That means that the client owns the money until earned.  The advantage of this approach is that it makes sense to say that if the lawyer does not complete the task the fee is supposed to pay for, the lawyer is obligated to refund the client the portion of the fee that was not earned.

Some jurisdictions, however, have taken a different approach which, quite frankly I don't understand.   The Board of Professional Responsibility of Ohio just issued an opinion that illustrates this alternative approach.

The opinion (available here) concludes, first, that a lawyer is required to deposit flat fees paid in advance into an IOLTA trust account, unless designated as “earned upon receipt” and only may withdraw the fees as they are earned.

This is the generally accepted view I described above with the added caveat that the client may agree to say the fee is earned upon receipt.  This is an important alternative for the attorney, because if the fee is earned upon receipt the attorney would be allowed to deposit the money in the attorney's general account.  Since the fee has been earned, the money belongs to the lawyer and the lawyer can do with it as the lawyer pleases except leaving it in the trust account.  Since the money belongs to the attorney - because it has been earned - leaving it in the trust account would mean the lawyer is commingling funds.  The Board explains this in the opinion.

OK, so far, so good; but then the opinion goes on to say that "even if a flat fee paid in advance of representation is deemed “earned upon receipt,” “nonrefundable ,” or similarly, Prof.Cond.R. 1.5 requires a lawyer to return any unearned portion of the fee if the lawyer does not complete the representation for any reason."

Here is what I don't understand:  How can the fee be earned and unearned at the same time?  If the fee is deemed earned, then it is earned. No?  Or is the Board saying that "designating" a fee as earned does not mean that it "is" earned?  That doesn't make sense to me.  What would be the purpose of "designating" a fee as earned if the lawyer could not handle the money as if it had been earned?

Which brings me to the question:  how is a lawyer going to handle the money?  According to the opinion itself, if the fee is deemed earned upon receipt then the attorney can't leave the funds in the trust account.  Doing so would be a violation of the rules against commingling.  But once the money is deposited in the general account, if there is a refund to pay, where is the refund going to come from?  It has to be from the general account where the money was placed, right?  And if that's the case, doesn't that mean that the attorney had been commingling client money (the unearned amount to be refunded) and attorney money in the same account?

Thus, the Board's conclusion inevitably results in a violation of the rules.  If the fee is earned but some of it has to be refunded, it means that some part of the fee was in reality not earned and by placing the full amount in the general account the lawyer commingled.  On the other hand, if the fee is earned but the lawyer leaves even part of the amount in the trust account just in case maybe a portion of the fee will have to refunded, the lawyer has also commingled.

I understand the Board is trying to protect the client, but the only way to do that and still make sense of the other rules at issue is to say that a fee paid in advance has to be kept in the trust account until it is earned.  In other words, I would eliminate the possibility of allowing the fee to be "designated" as earned upon receipt. OR you could say that the flat fee can be deemed earned upon receipt, but that meant that it can be non refundable.  But you can't do both.


Thanks to the Legal Profession blog for the link.

ABA issues new ethics opinion on what to do when lawyers received a subpoena for client's documents

 The ABA Standing Committee on Ethics and Professional Responsibility recently issued a new opinion which provides some guidance to lawyers receiving subpoenas for client documents or information. You can download Formal Opinion 473 here but do so soon because once the opinion goes into the "archive" it will be available for free only to members of the Center for Professional Responsibility.

For comments on the opinion go here and here.

ABA abandons its partnership with Rocket Lawyer!

Lawyerist and The American Lawyer are reporting that the ABA has abandoned its partnership with Rocket Lawyer.  This is an embarrassing turn of events for the ABA, but I have to say that I am not terribly surprised by it.

But first here is the background in case you don't know what it is this is all about.  Last October, to much fanfare, the ABA announced the creation of a pilot program that provides on-demand legal advice for small businesses called ABA Law Connect.   The program was part of the ABA's efforts to improve access to legal services, but also to respond to criticism that it has been slow to allow "innovation" in the legal market.  (In 2015, the ABA held a Summit on Innovation and one of the most reported sessions during the meeting of the House of Delegates was a speech by Avvo's CEO in which he called for the elimination of rules regarding unauthorized practice of law in the name of innovation to open the legal market to innovators like, you guessed it, Avvo, of course.)

Yet, as I have argued here before, "innovation" has become a buzzword and we shouldn't rush to try to be innovative at the risk of creating other problems.  There is no point in being innovative for innovation's sake.  It reminds me of the Direct TV commercial in which a group of executives are meeting to discuss "new ideas."  One of the executives throws shrimp on the conference table at breakfast and the CEO says "... not the way I would have gone, but it is innovative.  And that's what we want around here..."

When I first wrote about the RocketLawyer program here, I pointed out a few concerns I had.  I have also written about my concerns regarding Avvo.  And, well, I hate to say it, but ...  there you have it.  As BB King would say, "the thrill is gone."

To be clear, I don't know exactly why the ABA decided to back out -- probably a combination of reasons--  but whatever the reason was, ABA Connect is no more.   And as Lawyerist writes, "this may be . . .  another example of innovation getting ahead of regulation. The ABA did try to innovate boldly, but it got ahead of its own regulations in doing so."  Just what I have been saying all along...

Now the more interesting question becomes, if the regulation is not ready to support the innovators, are the lawyers who are signed up with RocketLawyer, ABA Connect and Avvo in violation of the rules?...  Stay tuned...

Is an attorney's LinkedIn profile an advertisement?

Legal Ethics in Motion is reporting that the Association of the Bar of the City of New York Committee on Professional Ethics'  Formal Opinion 2015-7 concludes that if the primary purpose of an attorney’s LinkedIn profile is not to attract new clients, it is not advertising.  I understand the idea, but I am not sure I understand how it applies in reality.  If the profile is about a lawyer and his or her practice, is there really any other purpose for having a profile in LinkedIn?

Iowa Supreme Court rejects notion that malpractice plaintiff has to show actual innocence in order to support claim against former criminal defense lawyer

In a many jurisdictions, a convicted criminal defendant who wants to recover for malpractice against his or her former lawyer has to obtain post conviction relief and prove that he or she was actually innocent of the crime for which they were convicted.  This view has been criticized but still appears to be the majority view.  Yet, I have read recent cases where a few courts have abandoned this view in favor of the minority approach which does not require the convicted defendant (plaintiff in the malpractice claim) to show actual innocence.  The most recent court to so hold was the Kansas Supreme Court, something I reported about a month ago here.

Now comes news (via the Legal Profession blog) that the Iowa Supreme Court has taken the same step.  Actual innocence is no longer required as an element of the cause of action.  The case is called Barker v Capotosto, and it is available here.

UPDATE (7/21/16): The Chicago Legal Malpractice Blog has a story on the case here.

Another comment on lack of accountability for prosecutorial misconduct

Long time readers of this blog know I often complain about the fact that courts do not seem to take prosecutorial misconduct too seriously.  You can go to the prosecutors tag and scroll down for lots of stories, and links on the topic.  Here is the latest from the blog a public defender.