Legal Ethics Forum

"We need reforms to increase confidence in the justice system: Pascal Calogero Jr."

Nola.com: retired Louisiana Supreme Court Chief Justice Pascal Calogero takes a critical look at the behavior of prosecutors in Louisiana.

 

 

New Jersey: Padilla v. Kentucky will be applied only prospectively

Otherwise covers the story.

Legal ethics odds and ends (February 29, 2012)

• Patent Math (David Healey) looks at some recent disqualification cases in patent law.

• Bloomberg: Lynne Stewart's appeal of her 10-year jail sentence was heard yesterday. Stewart argued that she was being punished for exercising her free speech rights.

• ABA Journal: Howrey trustee needs a plan to manage huge collection of client files.

• Thomson Reuters: "Lawsuits against law schools weak: legal ed experts"  Further down in the article are some insightful comments from Douglas Rush and Mark Gergen, both law professors.

• Texas Tribune has an interesting story about a one-man operation that generates challenges to race-conscious policies. “I find the plaintiff, I find the lawyer, and I put them together, and then I worry about it for four years,” [Edward Blum] said. Blum's recent case is the challenge to affirmative action at the University of Texas, which has been taken up by the SCOTUS.

• Lawfare looks at the recent ruling on the screening of mail and other attorney client communications between detainees and their lawyers.

Review of Ethics 20/20 Proposals

I have been fortunate to serve as the chief reporter for the ABA Commission on Ethics 20/20.  In that role, I have had the privilege of working with an extraordinary group of lawyers, judges, and academics (including co-blogger and Commissioner, Stephen Gillers) who have thought deeply about the profession’s future and how the rules governing lawyer conduct should be revised in light of globalization and the profession’s increasing reliance on technology. 

The Commission's process has been thorough and collaborative.  Many segments of the bar and the public have responded to the Commission's work and commented on early drafts of the Commission's proposals.  This highly deliberative process has produced nearly final proposals relating to a number of topics that the Commission expects the ABA House of Delegates to consider this August.  (The Commission may submit additional proposals for the House's consideration next February.  See here for a description of topics that could be the subject of additional Commission action.)

Now that a slate of proposals is far along (but not yet final), I thought it might be useful to provide an overview of what those proposals are intended to accomplish.  Calling this overview of the Commission’s work a “symposium” overstates what I’d like to do.  Basically, by drawing verbatim from the Commission's reports, I want to describe each proposal and its purpose through a series of blog posts.   A mini-symposium, if you will.

My hope is that these posts will be helpful to those of you who have not followed the Commission’s work closely.  But I also hope to benefit as well.  The Commission will be meeting in early April to finalize the proposals referenced below, and I would value feedback on what the Commission has produced.  If you think that a particular proposal is useful, please say so in the comments.  If you think a particular proposal is problematic, explain how you would propose to address the problem that you identify (or better yet, send an email to the Commission).  The more specific you are, the more helpful it will be to the Commission.

The headers below contain links to the Commission’s draft resolutions and reports, where you can find a more detailed explanation for each proposal.  The links underneath the headers will take you to blog posts that show the proposed changes in redline form (relative to the existing Rule) and quote the Commission's explanations for the proposed changes.

 

UPDATE: Please note that, on May 7th, 2012, the Commission filed final versions of its resolutions and reports with the ABA House of Delegates.  Some of those resolutions and reports differ from what appears below.  You can find links to the final versions of those documents here.

 

Technology and Confidentiality

Amendments to Rule 1.0 (Terminology) to elaborate on the definition of a “screen” in order to emphasize the importance of taking appropriate precautions regarding electronically stored information.

Amendments to Model Rule 1.1 (Competence) to emphasize that a lawyer has a duty to keep abreast of changes in technology, including the benefits and risks associated with its use.

Amendments to Model Rule 1.4 (Communication) to update existing Comment language that refers to the duty to respond promptly to client telephone calls.

Amendments to Model Rule 1.6 (Duty of Confidentiality) to address a lawyer’s ethical obligations to protect a client’s confidences from inadvertent and unauthorized disclosures as well as from unauthorized access.

Amendments to Model Rule 4.4 (Respect for Rights of Third Persons) to clarify a lawyer’s obligations upon receiving inadvertently disclosed confidential information in electronic form.

Technology and Client Development

Amendments to Model Rule 1.18 (Duties to Prospective Client) to clarify the definition of a prospective client so that lawyers can better understand the implications of the Rule given the various new ways in which lawyer and clients communicate.

Amendments to Model Rule 7.2 (Advertising) to address how the prohibition against paying others for a “recommendation” applies to Internet-based client development tools.

Amendments to Model Rule 7.3 (Direct Contact with Prospective Clients) to clarify when a lawyer’s online communications constitute “solicitations” that are governed by the Rule.

Outsourcing

Amendments to Model Rule 1.1 (Competence) to clarify that lawyers have an obligation under the Rule to make reasonable efforts to ensure that the work outsourced to lawyers is performed competently and contributes to the overall competent and ethical representation of the client.  A new Comment identifies the relevant factors to consider when assessing whether those efforts have been reasonable. 

Amendments to Model Rule 5.3 (Responsibilities Regarding Nonlawyer Assistants) to underscore that lawyers should make reasonable efforts to ensure that nonlawyers outside the firm provide their services in a manner that is compatible with the lawyer’s own professional obligations, including the lawyer’s obligation to protect client information. The changes also alert lawyers that they have an obligation to give appropriate instructions to nonlawyers outside the firm when retaining or directing those nonlawyers. 

Mobility Issues (here, here, and here)

Amendments to Model Rule 1.6 (Confidentiality of Information) that explain the ethical considerations associated with the disclosure of confidential client information to detect and prevent conflicts of interest, such as when lawyers move to another firm or when firms merge.

Amendments to Model Rule 1.17 (Sale of Law Practice) to clarify the information that can be disclosed to the potential purchaser of a law practice in light of the proposed changes to Rule 1.6

A new Model Court Rule on Practice Pending Admission that would enable a lawyer licensed in one jurisdiction to establish a systematic and continuous presence in a new jurisdiction while diligently pursuing admission in the new jurisdiction through one of the procedures that the jurisdiction authorizes (e.g., admission by motion or passage of that jurisdiction’s bar examination)

Amendments to Model Rule 5.5 (Multijurisdicitonal Practice of Law) to offer more guidance on when a virtual practice could give rise to the establishment of an office in another jurisdiction

Amendments to the ABA Model Rule on Admission by Motion that would reduce the time in practice requirement from 5 years to 3 years and a resolution urging jurisdictions that have not adopted this Model Rule to do so without additional restrictions, such as reciprocity requirements

 

Ethics 20/20 Proposed New Model Rule on Practice Pending Admission

ABA Model Rule on Practice Pending Admission 

1.   A lawyer currently holding an active license to practice law in another U.S. jurisdiction may provide legal services in this jurisdiction through an office or other systematic and continuous presence for no more than [365] days, provided that the lawyer:

    a. is not disbarred or suspended from practice in any jurisdiction and is not currently subject to discipline or a pending disciplinary matter in any jurisdiction;

    b. has not previously been denied admission to practice in this jurisdiction or failed this jurisdiction’s bar examination;

    c. notifies Disciplinary Counsel and the Admissions Authority in writing prior to initiating practice in this jurisdiction that the lawyer will be doing so pursuant to the authority in this Rule;

    d. submits within [60] days of first providing legal services in this jurisdiction a complete application for admission by motion or by examination;

    e. reasonably expects to fulfill all of this jurisdiction’s requirements for that form of admission;

    f. associates with a lawyer who is admitted to practice in this jurisdiction;

    g. complies with Rules 7.1 and 7.5 of the Model Rules of Professional Conduct [or jurisdictional equivalent] in all communications with the public and clients regarding the nature and scope of the lawyer’s practice authority in this jurisdiction; and

    h. pays any annual client protection fund assessment.

2.  A lawyer currently licensed as a foreign legal consultant in another U.S. jurisdiction may provide legal services in this jurisdiction through an office or other systematic and continuous presence for no more than [365] days, provided that the lawyer:

    a. provides services that are limited to those that may be provided in this jurisdiction by foreign legal consultants;

    b.  is a member in good standing of a recognized legal profession in the foreign jurisdiction, the members of which are admitted to practice as lawyers or counselors at law or the equivalent, and are subject to effective regulation and discipline by a duly constituted professional body or a public authority;

    c. submits within [60] days of first providing legal services in this jurisdiction a complete application for admission to practice as a foreign legal consultant;

    d. reasonably expects to fulfill all of this jurisdiction’s requirements for admission as a foreign legal consultant; and

    e. meets the requirements of paragraphs 1(a), (b), (c), (f), (g), and (h) of this Rule.

3.  Prior to admission by motion, through examination, or as a foreign legal consultant, the lawyer may not appear before a tribunal in this jurisdiction that requires pro hac vice admission unless the lawyer is granted such admission.

4.  The authority in this Rule shall terminate immediately if the lawyer’s application for admission by motion, by examination or as a foreign legal consultant is denied prior to [365] days or if the lawyer fails to file the application for admission within [60] days of first providing legal services in this jurisdiction.  Upon the termination of such authority the lawyer, within [30] days, shall:

    a. cease to maintain a presence or occupy an office for the practice of law in this jurisdiction unless authorized to do so pursuant to another Rule;

    b. notify all clients being represented in pending matters, and opposing counsel or co-counsel of the termination of the lawyer’s authority to practice pursuant to this Rule;

    c. not undertake any new representation that would require the lawyer to be admitted to practice law in this jurisdiction;

    d. take all other necessary steps to protect the interests of the lawyer’s clients.

5.  Upon the denial of the lawyer’s application for admission by motion, by examination, or as a foreign legal consultant, the Admissions Authority shall immediately notify Disciplinary Counsel that the authority granted by this Rule has terminated. 

COMMENT

[1] This Rule recognizes that a lawyer admitted in another jurisdiction may need to relocate to or commence practice in this jurisdiction, sometimes on short notice.  The admissions process can take considerable time, thus placing a lawyer at risk of engaging in the unauthorized practice of law and leaving the lawyer’s clients without the benefit of their chosen counsel.  This Rule closes this gap by authorizing the lawyer to practice in this jurisdiction for a limited period of time, subject to restrictions, while the lawyer diligently seeks admission. 

[2] While exercising this authority, the lawyer must not hold out to the public or otherwise represent that the lawyer is admitted to practice in this jurisdiction.  See Rule 5.5(b)(2).  Because a lawyer with an office in this jurisdiction will typically be assumed to be admitted to practice in this jurisdiction, the lawyer must, under this Rule, disclose the lawyer’s limited practice authority and jurisdiction of licensure in all communications with potential clients, such as on business cards, websites, and letterhead.  Further, the lawyer must disclose the limited practice authority to all potential clients before agreeing to represent them.  See Rules 7.1 and 7.5(b). 

[3] The provisions of paragraph 4 (a) through (e) of this Rule are necessary to avoid prejudicing the rights of existing clients or other parties.  Thirty days should be sufficient for the lawyer to wind up his or her practice in this jurisdiction in an orderly manner.

The Commission's Explanation for the Proposal

The Commission concluded that technological and economic changes have produced an increase in cross-border practice, revealing an important gap in the practice authority granted by Model Rule 5.5(d).  That gap affects an increasing number of lawyers who have found it necessary to establish a practice in a jurisdiction where they are not otherwise admitted.  For example, a lawyer may need to relocate in order to accommodate the needs of a client who has moved to a new jurisdiction. Or the lawyer may receive a job opportunity in a jurisdiction other than the jurisdiction of original licensure or be transferred to another jurisdiction, often requiring relocation within a very short timeframe.  Lawyers also frequently have to relocate due to changes in personal circumstances, such as the relocation of a spouse or domestic partner due to military deployment or other professional opportunities.  In sum, lawyers increasingly need to relocate during their careers, often more than once and frequently without much notice. 

The Commission found and heard that, despite the increasing need to relocate, the admissions process for these lawyers can take considerable time.  For example, the admission by motion process requires an applicant to complete and submit a lengthy application that requires personal and professional information that can take weeks or months to compile.  In particular, the process typically requires a lawyer to obtain proof of licensure from the lawyer’s home jurisdiction, submit evidence of a passing score on the Multistate Professional Responsibility Examination, and accumulate substantial personal and professional information in order to satisfy the character and fitness requirements of the jurisdiction.  Similarly, if the lawyer does not qualify for admission by motion (e.g., the lawyer has not satisfied the durational practice requirements), the lawyer will need to sit for the jurisdiction’s bar examination, which is administered only twice per year. 

The Commission found that this time consuming process can adversely affect lawyers’ ability to represent their existing clients effectively and can have adverse consequences on lawyers’ careers in a marketplace that requires an increasing amount of cross-border practice.  Thus, the Commission concluded that, assuming procedural safeguards are put in place, these lawyers should be permitted to establish a continuous and systematic presence in the new jurisdiction for a limited time (not to exceed 365 days) while diligently pursuing formal admission.  The proposed new standalone Model Rule on Practice Pending Admission, if adopted, would authorize this form of practice. 

The proposed new Model Rule on Practice Pending Admission also includes a separate section that allows a foreign lawyer already licensed in one U.S. jurisdiction as a foreign legal consultant to continue practicing as a foreign legal consultant in another U.S. jurisdiction while an application to become a foreign legal consultant is pending in that new U.S. jurisdiction.  It is important to note that this provision does not create any practice authority for foreign lawyers beyond what the Model Rules have already long allowed (e.g., rules relating to licensing and practice by foreign legal consultants and rules governing whether foreign lawyers can sit for a particular jurisdiction’s bar examination).  The section merely provides (subject to important limitations) that a foreign lawyer who is already admitted in a U.S. jurisdiction as a foreign legal consultant may continue to practice as such while their application for that form of admission is pending in another U.S. jurisdiction.

To make lawyers aware of the new practice authority, the Commission also proposes to amend Rule 5.5(d)(2) of the Model Rules of Professional Conduct to remind lawyers that they can practice in another jurisdiction on a systematic and continuous basis as long as another “rule” so provides.  Comment [18] to Rule 5.5 would then make an explicit cross-reference to the proposed Model Rule on Practice Pending Admission. 

The Commission’s recommendation in this regard is not without precedent.  The District of Columbia allows out-of-state lawyers to practice law from a principal office located in the District of Columbia for a period not to exceed 360 days during the pendency of a person’s first application for admission to the District of Columbia Bar.[1]  The Commentary to the Rule states that it is designed to provide a one-time grace period for out-of-state lawyers who are moving their principal office to the District of Columbia.  Missouri also has a similar procedure,[2] and New York recently adopted a similar provision for in-house lawyers.[3]  The Commission did not learn of any problems caused by these provisions.   

The Commission nevertheless concluded that, to ensure that lawyers do not abuse the proposed exception or use this privilege in ways that would put the public at risk, numerous restrictions and limitations are appropriate.  First, the lawyer must not be disbarred or suspended from practice in any jurisdiction and must not currently be subject to discipline or be the subject of a pending disciplinary matter in any jurisdiction.   

Second, the lawyer must not have been previously denied admission to practice in the jurisdiction (e.g., due to a failure to satisfy the jurisdiction’s character and fitness requirements) or previously failed the jurisdiction’s bar examination.  This requirement is designed to ensure that a lawyer does not use the authority to practice under the Model Rule on Practice Pending Admission to circumvent a prior denial of the right to practice in the jurisdiction.  For example, if a lawyer fails the bar examination in one jurisdiction and passes it in another, the lawyer cannot establish a practice in the former jurisdiction while waiting to re-take that jurisdiction’s bar examination.  (The Commission considered whether a failure of the jurisdiction’s bar exam should be disqualifying for only a limited period of time (e.g., five years), but concluded that a cap would allow a lawyer who failed the jurisdiction’s bar examination (and whose competence was, therefore, previously called into question in that jurisdiction) to engage in the practice of law in that jurisdiction without having completed a thorough vetting process, like admission by motion.)

Third, the lawyer must notify Disciplinary Counsel and the licensing authority in writing that the lawyer is taking advantage of the practice authority in the Model Rule on Practice Pending Admission.  This requirement is intended to ensure that the disciplinary and licensing authorities are aware of the lawyer’s presence and intention to establish an ongoing practice in the jurisdiction under the Rule. 

Fourth, the lawyer must submit an application for admission by motion, examination, or as a foreign legal consultant within [60] days of first providing legal services.[4]  The purpose of this requirement is to ensure that a lawyer is serious about applying for admission in the new jurisdiction and applies promptly upon arriving there.  The time frame is placed in brackets so that a jurisdiction can tailor it according to the particular needs of that jurisdiction.

Fifth, the lawyer must have a reasonable expectation that the lawyer will fulfill all of the jurisdiction’s requirements for admission.  This requirement is analogous to Rule 5.5(c)(2), which permits a lawyer to practice temporarily in a jurisdiction in connection with a litigation matter if the lawyer “reasonably expects to be . . . authorized” to appear before a tribunal in that jurisdiction.

Sixth, the lawyer must associate with a lawyer who is licensed to practice in the jurisdiction.  This requirement is designed to ensure that the incoming lawyer has the ability to consult with a lawyer who is licensed in the jurisdiction regarding any issues that may require knowledge of distinctly local laws or procedures. This requirement is similar to the requirement in Rule 5.5(c)(1), which permits an out-of-state lawyer to practice temporarily in the jurisdiction if the lawyer associates with a lawyer who is admitted in the jurisdiction.  The Commission was reluctant to impose a stricter requirement, such as a requirement to be directly supervised by a lawyer who is admitted in the jurisdiction, because of the particular obstacles such a requirement would impose on solo practitioners.  In particular, in-state lawyers may be reluctant to directly supervise a lawyer from another jurisdiction who is not in the same office, because of the administrative difficulties associated with supervising a lawyer in a different law office.  For these reasons, the Commission concluded that the “association” requirement, which has worked well in the context of temporary practice under Rule 5.5(c)(1), is an adequate safeguard in the context of the Model Rule on Practice Pending Admission as well.[5]

Seventh, Section 4 provides that the practice authority terminates immediately if the lawyer’s application for admission is denied before the expiration of the 365 day period (e.g., the application for admission by motion is denied or the lawyer fails the jurisdiction’s bar examination), or if the lawyer fails to file an application for admission within 60 days.  Upon denial of the application for admission, Section 5 provides that the Admissions Authority must notify Disciplinary Counsel that the authority granted pursuant to the Rule has terminated.  Concurrently, the lawyer must stop practicing in the jurisdiction unless authorized to do so pursuant to another Rule; notify all clients being represented in pending matters in the jurisdiction, as well as opposing counsel or co-counsel, that the lawyer’s practice authority has terminated; and not undertake any new representation that would require the lawyer to be admitted to practice law in the jurisdiction.  These requirements are analogous to the client protection measures in Rule 27 (“Notice to Clients, Adverse Parties, and Other Counsel”) of the ABA Model Rules for Lawyer Disciplinary Enforcement applicable to lawyers disbarred, placed on inactive status due to disability or suspended for more than six months.

Eighth, a Comment to the proposed Model Rule would remind lawyers about their obligations under Rule 5.5(b)(2).  In particular, the clear import of Rule 5.5(b)(2) is that a lawyer who practices in a jurisdiction pursuant to the authority contained in the Model Rule on Practice Pending Admission cannot “hold out to the public or otherwise represent that the lawyer is admitted to practice law in this jurisdiction.”  The proposed new Comments would remind lawyers of this restriction and emphasize that, to avoid misleading potential clients, lawyers also have to disclose their limited practice authority and jurisdiction of licensure in all communications with potential clients, such as on business cards, websites, and letterhead, and explicitly disclose the lawyer’s limited authority to all potential clients before agreeing to represent them.

Finally, Section 3 makes clear that the practice authority does not extend to appearances before a tribunal.  The lawyer would have to obtain pro hac vice admission in order to appear before a tribunal in that jurisdiction.

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[1] District of Columbia Court of Appeals Rule 49(c)(8) (Limited Duration Supervision By D.C. Bar Member) http://www.dcappeals.gov/dccourts/docs/rule49.pdf

[2] Missouri Supreme Court Rule 8.06 (Temporary Practice by Lawyers Applying for Admission to the Missouri Bar) http://www.courts.mo.gov/courts/ClerkHandbooksP2RulesOnly.nsf/0/e0bcf992eb92f9ae86256db7007379ef?OpenDocument

[3] N.Y. Comp. Codes R & Reg. 22, § 522.7.

[4]Registration as in-house counsel is not listed because Rule 5.5(d)(1) already provides authority for lawyers to practice as in-house counsel in a jurisdiction without being fully admitted to practice there.   Although some jurisdictions require these lawyers to seek registration as in-house counsel, Rule 5.5(d)(1) is sufficient to protect the lawyer from allegations of unauthorized practice while the lawyer completes the registration process. 

[5]The Commission believes that state and local bar associations could provide a great service to the profession and the public by establishing a roster of experienced lawyers who are willing to associate with incoming lawyers under these circumstances.  Such an association not only would serve the public and the bar, but it also has the potential to be a source of new work for the in-state lawyer who may be called on to assist the incoming lawyer’s clients.  In many ways, this process would be analogous to the creation of rosters of lawyers who are willing to serve as mentors for new lawyers or who agree to serve as practice monitors for lawyers conditionally admitted to the practice of law. See http://bit.ly/pGDDtz.

Ethics 20/20 Proposal to Amend Rule 1.6 (Confidentiality Exception to Detect Conflicts)

Rule 1.6 (Confidentiality of Information)

. . .

(b) A lawyer may reveal information relating to the representation of a client to the extent the lawyer reasonably believes necessary:

    (1) to prevent reasonably certain death or substantial bodily harm;

    (2) to prevent the client from committing a crime or fraud that is reasonably certain to result in substantial injury to the financial interests or property of another and in furtherance of which the client has used or is using the lawyer's services;

    (3) to prevent, mitigate or rectify substantial injury to the financial interests or property of another that is reasonably certain to result or has resulted from the client's commission of a crime or fraud in furtherance of which the client has used the lawyer's services;

    (4) to secure legal advice about the lawyer's compliance with these Rules;

    (5) to establish a claim or defense on behalf of the lawyer in a controversy between the lawyer and the client, to establish a defense to a criminal charge or civil claim against the lawyer based upon conduct in which the client was involved, or to respond to allegations in any proceeding concerning the lawyer's representation of the client; or

    (6) to comply with other law or a court order.; or

    (7) to detect and resolve potential conflicts of interest, but only when the revealed information could not adversely affect the client.  Information revealed under this paragraph shall not be used or revealed by the recipient for any purpose except the detection and resolution of potential conflicts of interest.

COMMENT

. . .

Detection of Conflicts of Interest

[13] Paragraph (b)(7) recognizes that lawyers and firms may sometimes need to disclose information to each other about current and former clients to detect and resolve conflicts of interest.  For example, disclosures may be necessary when a lawyer is considering an association with a firm, two or more firms are considering a merger, or a lawyer is considering the purchase of a law practice.  See Rule 1.17, Comment [7].  Under these circumstances, lawyers and law firms are permitted to disclose limited information to each other, but only once substantive discussions regarding the new relationship have occurred and only to the extent reasonably necessary to permit the lawyer and firm to detect and resolve potential conflicts of interest that might arise from the possible new relationship.  In many situations, the disclosure of the client’s identity and the general nature of the legal and factual issues involved will be sufficient to detect potential conflicts of interest.  In other situations, it may be necessary to disclose additional information, which typically will include no more than the identity of parties involved in a matter and their counsel, the dates during which the work was performed, and whether the matter has ended.  The disclosure of any information, however, is forbidden if it could adversely affect the client or former client (e.g., the fact that a corporate client is seeking advice on a corporate takeover that has not been publicly announced; that a person has consulted a lawyer about the possibility of divorce before the person's intentions are known to the person's spouse; or that a person has consulted a lawyer about a criminal investigation that has not led to a public charge).  If there could be an adverse effect, the lawyer must not disclose the information unless the client or former client gives informed written consent to the disclosure. Moreover, the information disclosed under paragraph (b)(7) may be used or revealed to others only to the extent necessary to detect and resolve potential conflicts of interest; and except for the client's identity, the identity of parties involved in a matter and their counsel, no such information may be revealed to lawyers at the firm who have worked on the same or a substantially related matter.  This prohibition does not apply to other lawyers in the same firm who have obtained the information from an independent source.

 

The Commission's Explanation for the Proposal

Formal Opinion 09-455 from the ABA Standing Committee on Ethics and Professional Responsibility recently explained that lawyers and law firms must have some discretion to disclose limited confidential information to each other about current and former clients in order to determine if a conflict would arise from a lawyer’s association with the firm.[1]  The Formal Opinion nevertheless concluded that “[d]isclosure of conflicts information does not fit neatly into the stated exceptions to Rule 1.6.”  The Commission reached the same conclusion and determined that, given the importance of the issue and the increasing frequency with which it already arises and will continue to occur, the Commission should propose an amendment to Model Rule 1.6 that provides a firmer doctrinal basis for these disclosures and more guidance on the limitations on such disclosures. 

The Commission considered a number of ways to address this issue, but concluded that the most effective way to do so is to propose a new Model Rule 1.6(b)(7).  The proposed amendment would permit lawyers and firms, with restrictions, to disclose limited confidential information to each other in order to detect conflicts of interest. 

The Commission concluded that these disclosures, although necessary, need to be carefully limited and regulated.  First, the lawyer or firm must conclude that the disclosure is reasonably necessary to detect a conflict of interest.  As proposed new Comment [13] explains, this condition means that lawyers should disclose no more information than is necessary to detect a conflict.  In many situations, the disclosure of the client’s identity and the general nature of the legal and factual issues involved will be sufficient to accomplish this objective.  In other situations, it may be necessary to disclose additional information, but the information should typically include no more than the identity of parties involved in a matter and their counsel, the dates during which the work was performed, and whether the matter has ended. 

Second, even this limited disclosure is not permissible if it could adversely affect the client.  For example, the Comment explains that, if a lawyer or firm knows that a particular corporate client is seeking advice on a corporate takeover that has not yet been publicly announced or if an individual consults a lawyer about the possibility of a divorce before the spouse is aware of such an intention, it may be impossible to disclose sufficient information to ensure compliance with the conflict of interest rules.  Under those circumstances, the proposed relationship may have to be postponed until the information, if disclosed, could no longer prejudice the client.

Third, the disclosure should occur only when there is a reasonable possibility that the relationship in question (e.g., a law firm merger or the hiring of a new lawyer) might be established.  This moment can sometimes occur at an early point in discussing the possible relationship.  For example, the disclosure may be permissible before the lawyer and the firm begin to engage in substantive discussions regarding the lawyer’s possible association or before two firms begin serious negotiations regarding a possible merger.[2]

The last sentence of paragraph (b)(7) and the next to last sentence of the proposed new Comment are intended to remind lawyers that they must not use or reveal the information that they receive pursuant to a conflicts-checking process, except to determine whether a conflict would arise from the possible relationship.  The Comment also emphasizes that, except for the client's identity and the identity of parties involved in a matter and their counsel, no information obtained by a firm pursuant to Rule 1.6(b)(7) may be revealed to lawyers at that firm who have worked on the same or a substantially related matter.  This portion of the Comment is intended to recognize that it is often necessary to approach specific lawyers in a firm to find out more about their work in order to determine whether that work might give rise to a conflict if the firm creates a new relationship with another lawyer or firm.  The Comment language reminds firms that, when approaching their own lawyers under these circumstances, the information that can be shared with those lawyers may have to be particularly limited in scope.

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[1] Formal Opinion 09-455 describes the need to perform a conflicts check when hiring (or discussing the possibility of hiring) a lateral lawyer, but the logic of the Opinion applies equally well to other conceptually similar situations, such as when law firms consider a merger or when a lawyer considers the purchase of another lawyer’s practice.

[2] ABA Comm. on Ethics & Prof’l Responsibility, Formal Op. 09-455 (2009), at 5 (reaching a similar conclusion).

Ethics 20/20 Proposal to Amend Rule 1.17 (Sale of Law Practice)

Rule 1.17 (Sale of Law Practice)

. . .

COMMENT

. . .

Client Confidences, Consent and Notice

[7] Negotiations between seller and prospective purchaser prior to disclosure of information relating to a specific representation of an identifiable client no more violate the confidentiality provisions of Model Rule 1.6 than do preliminary discussions concerning the possible association of another lawyer or mergers between firms, with respect to which client consent is not required. See Rule 1.6(b)(7).  Providing the purchaser access to client-specific detailed information relating to the representation, and to such as the client’s file, however, requires client consent. The Rule provides that before such information can be disclosed by the seller to the purchaser the client must be given actual written notice of the contemplated sale, including the identity of the purchaser, and must be told that the decision to consent or make other arrangements must be made within 90 days. If nothing is heard from the client within that time, consent to the sale is presumed.

The Commission's Explanation for the Proposal

Model Rule 1.17 describes a number of ethical obligations that arise during the sale of a law practice, and Comment [7] describes the information that can be shared between the owner of the law practice and the prospective buyer.  The Commission concluded that, in light of the proposed changes to Rule 1.6 described above, Comment [7] to Rule 1.17 should be updated to reflect the content of the Rule 1.6 proposal and that Comment [7] should contain a cross-reference to the proposed new Rule 1.6(b)(7).

Ethics 20/20 Proposal to Amend the Model Rule on Admission by Motion

ABA Model Rule on Admission by Motion 

1.   An applicant who meets the requirements of (a) through (g) of this Rule may, upon motion, be admitted to the practice of law in this jurisdiction. The applicant shall: 

    (a)    have been admitted to practice law in another state, territory, or the District of Columbia and currently hold an active license to practice law in at least one state, territory or the District of Columbia;

    (b)   hold a J.D. or LL.B. degree from a law school approved by the Council of the Section of Legal Education and Admissions to the Bar of the American Bar Association at the time the applicant matriculated or graduated;

    (c)    have been primarily engaged in the active practice of law in one or more states, territories or the District of Columbia for five three of the seven years immediately preceding the date upon which the application is filed;

    (d)   establish that the applicant is currently a member in good standing in all jurisdictions where admitted;

    (e)    establish that the applicant is not currently subject to lawyer discipline or the subject of a pending disciplinary matter in any jurisdiction;

    (f)    establish that the applicant possesses the character and fitness to practice law in this jurisdiction; and

    (g)   designate the Clerk of the jurisdiction’s highest court for service of process.

2. For purposes of this rRule, the “active practice of law” shall include the following activities, if performed in a jurisdiction in which the applicant is admitted and authorized to practice, or if performed in a jurisdiction that affirmatively permits such activity by a lawyer not admitted in that jurisdiction; however, in no event shall any activities that were performed pursuant to the Model Rule on Practice Pending Admission or in advance of bar admission in some state, territory, or the District of Columbia be accepted toward the durational requirement:

(a)    Representation of one or more clients in the private practice of law;

(b)   Service as a lawyer with a local, state, territorial or federal agency, including military service;

(c)    Teaching law at a law school approved by the Council of the Section of Legal Education and Admissions to the Bar of the American Bar Association;

(d)   Service as a judge in a federal, state, territorial or local court of record;

(e)    Service as a judicial law clerk; or

(f)    Service as in-house counsel provided to the lawyer’s employer or its organizational affiliates.

    1. For purposes of this rRule, the active practice of law shall not include work that, as undertaken, constituted the unauthorized practice of law in the jurisdiction in which it was performed or in the jurisdiction in which the clients receiving the unauthorized services were located.

    2. An applicant who has failed a bar examination administered in this jurisdiction within five years of the date of filing an application under this rRule shall not be eligible for admission on motion. 

 

FURTHER RESOLVED, That the American Bar Association urges jurisdictions that have not adopted the Model Rule on Admission by Motion to do so and urges jurisdictions that have adopted admission by motion procedures to eliminate any restrictions that do not appear in the Model Rule on Admission by Motion.

 

The Commission's Explanation for the Proposal

In light of the Commission’s findings and changes in the practice of law during the last decade, the Commission proposes to reduce the length-of-practice requirement in the Model Rule for Admission by Motion.  The current Model Rule requires an applicant for admission by motion to have actively practiced in another jurisdiction for five out of the past seven years, and the Commission is proposing to allow lawyers to qualify for admission by motion after practicing in another jurisdiction for only three out of the past seven years.    

The Commission believes this change responds to client needs and market demands in an increasingly borderless world, where lawyers frequently need to gain admission in other U.S. jurisdictions.  For example, lawyers regularly need to move to, or establish a regular practice in, another jurisdiction in order to serve clients who are relocating or who regularly do business in the jurisdiction in which motion admission is sought.  The Commission’s proposal would address this need, thus benefitting both lawyers and their clients. 

The proposal also recognizes that lawyers often need to move to new jurisdictions for a wide range of personal reasons, including the need to find employment.  The Commission determined that a reduction of the active practice requirement from five to three years would have particularly salutary effects for less senior lawyers, who are most likely to need to move from one jurisdiction to another.  The challenging legal employment marketplace only increases the likelihood that relatively junior lawyers will need to move to a new jurisdiction in search of employment.

The Commission seriously considered several possible arguments against reducing the time-in-practice requirement of the Rule.  First, the Commission considered the concern that a lawyer who has practiced for only three years may not be sufficiently competent to practice law in a new jurisdiction.  The Commission, however, found no reason to believe that lawyers who have been engaged in the active practice of law for three of the last seven years will be any less able to practice law in a new jurisdiction than a law school graduate who recently passed the bar examination in that jurisdiction.  In fact, five jurisdictions already have a reduced duration-of-practice requirement of three years,[1] and none of those jurisdictions have reported any resulting problems.   

The Commission also found unpersuasive the concern that passage of the bar examination is necessary to demonstrate knowledge of the law of the jurisdiction in which the lawyer is seeking admission.  As explained above, more than 65,000 lawyers have obtained admission by motion in the last ten years, and there is no evidence from disciplinary counsel or any other source that these lawyers have been unable to practice competently in the new jurisdiction or have been unable to identify and understand aspects of the new jurisdiction’s law that differ from the law of the jurisdiction where those lawyers were originally admitted.

The Commission also concluded that the “local law” concern rests on the incorrect assumption that passage of the bar examination demonstrates competence in local law.  The Commission’s research revealed that approximately half of U.S. jurisdictions do not test knowledge of local law on the bar examination.[2]  And in jurisdictions that do test local law, the local law portion of the test is usually sufficiently small that bar passage does not turn on it.  Thus, the majority of bar examinations require either limited knowledge of local law or none at all, suggesting that passage of the bar examination does not offer better evidence of a lawyer’s understanding of local law than three years of practice in another jurisdiction.  To the contrary, the Commission concluded that three years of practice in another jurisdiction may actually enable a lawyer to identify and understand variations in the law more easily than a recent law school graduate who has never practiced at all but has passed the jurisdiction’s bar examination.

Another possible concern that the Commission considered is that lawyers might take and pass the bar examination in a jurisdiction with a relatively high passage rate and then seek admission by motion in a jurisdiction that has more demanding examination requirements.  The Commission concluded, however, that the three year waiting period is sufficiently long that lawyers would not have an incentive to circumvent the bar examination requirements of a jurisdiction with a relatively low bar pass rate.  Lawyers who intend to practice in a jurisdiction with a bar examination that is difficult to pass are not likely to defer the start of their careers in that jurisdiction for three years in order to take advantage of an admission by motion procedure.    

Finally, the Commission considered reducing from seven to five years the time within which a lawyer must fulfill the three year practice requirement.  The Commission concluded, however, that the career tracks of modern lawyers are not always linear and that lawyers, both male and female, frequently need to take time away from the practice of law due to changes in personal circumstances, including changes in substantive employment, military service, returning to school for another degree or, an issue that continues to disproportionately affect women, family care. Thus, the Commission determined that a lawyer seeking admission by motion should be able to fulfill the three year practice requirement within the existing seven year time period.

The Commission concluded that Section 2 of the Model Rule on Admission by Motion should state that the time spent practicing pursuant to the proposed new Model Rule on Practice Pending Admission should not count toward the period of time necessary to qualify for admission by motion. (The proposed new Model Rule on Practice Pending Admission would allow lawyers to establish a law practice in another jurisdiction while diligently pursuing admission in that jurisdiction through one of the recognized forms of admission, such as through admission by motion.)  The Commission determined that this restriction in Section 2 is a necessary additional client protection as it will prevent lawyers from establishing a practice in a new jurisdiction in fewer than three years and prevent lawyers from serially relocating to new jurisdictions under the Model Rule on Practice Pending Admission in order to accumulate the necessary practice experience to qualify for admission by motion.

In sum, the Commission determined that, in most jurisdictions, a lengthy practice requirement unnecessarily hinders the lawyer mobility that clients and those who employ lawyers increasingly demand.  Although the Commission recognizes that some jurisdictions may have particular needs that warrant a longer or shorter durational requirement, the Commission concluded that the vast majority of jurisdictions would benefit from the proposed approach.   

Implementation of ABA Model Rule on Admission by Motion Rule

The Commission concluded that the widespread adoption of admission by motion procedures is a positive development, but also found that at a number of jurisdictions have not yet adopted an admission by motion process or have adopted a process that imposes unnecessary restrictions and requirements. Thus, in addition to proposing the amendments described above, the Commission also urges the eleven jurisdictions that have not adopted the Model Rule to do so and urges jurisdictions with admission by motion procedures to eliminate any restrictions, such as reciprocity requirements, that do not appear in the Model Rule.

With regard to the eleven jurisdictions that have not adopted any admission by motion procedure, those jurisdictions require lawyers to take at least some portion of the jurisdiction’s bar examination (or a special lawyers’ examination) in order to gain admission.  The Commission concluded that such a requirement is unnecessary for lawyers who have three years of experience and that these jurisdictions should adopt an admission by motion procedure. 

With regard to the forty jurisdictions that have adopted an admission by motion procedure, ten have an admission by motion procedure that is nearly identical to the Model Rule.[3]  The other thirty jurisdictions, however, have procedures that impose restrictions beyond those contained in the Model Rule.  More than half of these jurisdictions have some type of reciprocity requirement, which makes admission by motion possible only for lawyers from states that also offer admission by motion on a reciprocal basis.[4]  Moreover, some jurisdictions define law practice in a manner that is narrower than the Model Rule definition.[5] Other jurisdictions require lawyers to certify that they intend to practice actively and maintain an office in the state where admission by motion is being sought.[6]

The Commission found no evidence that these more restrictive approaches are related in any way to the competence of the applicants or the protection of the public.  Indeed, jurisdictions that have adopted the Model Rule without any additional restrictions have reported no problems. The Commission believes that such varied additional restrictions only serve to sustain outdated and parochial purposes at a time when the relevance of borders to the competent practice of law has and will continue to erode.  The Commission believes that the Model Rule on Admission by Motion ensures competent representation and amply protects the integrity of the bar. 

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[1]http://www.americanbar.org/content/dam/aba/migrated/cpr/mjp/admission_motion_comp.authcheckdam.pdf

[2] Nat’l Conference of Bar Exam’rs & Am. Bar Ass’n Section of Legal Education & Admissions to the Bar, Comprehensive Guide to Bar Admission Requirements 2011, at 32-34 (available at http://www.ncbex.org/fileadmin/mediafiles/downloads/Comp_Guide/2011_CompGuide.pdf)

[3] A comparison chart is available here: http://www.americanbar.org/content/dam/aba/migrated/cpr/mjp/admission_motion_comp.authcheckdam.pdf

[4] Id.

[5] Id.

[6] Id.

Ethics 20/20 Proposal to Amend Rule 5.5

Rule 5.5 Unauthorized Practice Of Law; Multijurisdictional Practice Of Law

(a) A lawyer shall not practice law in a jurisdiction in violation of the regulation of the legal profession in that jurisdiction, or assist another in doing so.

(b) A lawyer who is not admitted to practice in this jurisdiction shall not:

    (1) except as authorized by these Rules or other law, establish an office or other systematic and continuous presence in this jurisdiction for the practice of law; or

    (2) hold out to the public or otherwise represent that the lawyer is admitted to practice law in this jurisdiction.

(c) A lawyer admitted in another United States jurisdiction, and not disbarred or suspended from practice in any jurisdiction, may provide legal services on a temporary basis in this jurisdiction that:

    (1) are undertaken in association with a lawyer who is admitted to practice in this jurisdiction and who actively participates in the matter;

    (2) are in or reasonably related to a pending or potential proceeding before a tribunal in this or another jurisdiction, if the lawyer, or a person the lawyer is assisting, is authorized by law or order to appear in such proceeding or reasonably expects to be so authorized;

    (3) are in or reasonably related to a pending or potential arbitration, mediation, or   other alternative dispute resolution proceeding in this or another jurisdiction, if the services arise out of or are reasonably related to the lawyer’s practice in a jurisdiction in which the lawyer is admitted to practice and are not services for which the forum requires pro hac vice admission; or

    (4) are not within paragraphs (c)(2) or (c)(3) and arise out of or are reasonably related to the lawyer’s practice in a jurisdiction in which the lawyer is admitted to practice.

(d) A lawyer admitted in another United States jurisdiction, and not disbarred or suspended from practice in any jurisdiction, may provide legal services through an office or other systematic and continuous presence in this jurisdiction that provide legal services in this jurisdiction that:

    (1) are provided to the lawyer’s employer or its organizational affiliates and are not services for which the forum requires pro hac vice admission; or

    (2) are services that the lawyer is authorized by federal or other law or rule to provide in this jurisdiction. 

COMMENT

. . .

[4] Other than as authorized by law or this Rule, a lawyer who is not admitted to practice generally in this jurisdiction violates paragraph (b)(1) if the lawyer establishes an office or other systematic and continuous presence in this jurisdiction for the practice of law. Presence may be systematic and continuous even if the lawyer is not physically present here. For example, a lawyer may direct electronic or other forms of communications to potential clients in this jurisdiction and consequently establish a substantial practice representing clients in this jurisdiction, but without a physical presence here.  At some point, such a virtual presence in this jurisdiction may become systematic and continuous within the meaning of Rule 5.5(b)(1).  Moreover, a lawyer violates paragraph (b)(2) if the lawyer Such a lawyer must not is not admitted to practice in this jurisdiction and holds out to the public or otherwise represents that the lawyer is admitted to practice law in this jurisdiction. See also Rules 7.1(a) and 7.5(b).

. . .

[18] Paragraph (d)(2) recognizes that a lawyer may provide legal services in a jurisdiction in which the lawyer is not licensed when authorized to do so by federal or other law, which includes statute, court rule, executive regulation or judicial precedent.  See, e.g., The ABA Model Rule on Practice Pending Admission.

The Commission's Explanation for the Proposal

The Commission recommends that Rule 5.5(d) be amended to clarify the purpose of the paragraph.  In particular, Rule 5.5(d) was intended (and has been interpreted) to permit a lawyer, under limited circumstances, to establish an office or other systematic and continuous presence for the practice of law in a jurisdiction where the lawyer is not otherwise admitted to practice.  Except for those limited circumstances, an out-of-state lawyer must become admitted to practice law generally in the jurisdiction in order to establish an office or engage in any other systematic or continuous practice of law there.  The Commission concluded that the prefatory language in Rule 5.5(d) is not sufficiently clear in this regard and that the prefatory language should state explicitly that paragraph (d) is intended to explain when a lawyer may “provide legal services through an office or other systematic and continuous presence” in the jurisdiction.

Proposed Amendment to Comment [4] to Model Rule 5.5

Rule 5.5(b)(1) provides that, unless a lawyer is authorized to practice in a jurisdiction under Rule 5.5(d), a lawyer must seek admission in that jurisdiction when the lawyer has established “an office or other systematic and continuous presence” there.  It is not always clear, however, when a lawyer has established such a presence, particularly given the numerous ways  in which lawyers now deliver legal services in other jurisdictions without being physically present there, such as through the use of virtual law offices.  Thus, the Commission concluded that lawyers would benefit from more guidance as to when their practices involve a “systematic and continuous” presence in another jurisdiction.

The Commission concluded that Comment [4] already offers some guidance in this regard.  It provides that a lawyer may have a “systematic and continuous” presence in a jurisdiction even without establishing a physical presence there.  The Commission determined that additional language would give lawyers more clarity as to when a non-physical presence might be considered “systematic and continuous.”  In particular, the Commission is proposing an amendment to Comment [4] that would specify, by way of example, that a lawyer may have a systematic and continuous presence in a jurisdiction if the lawyer directs electronic or other forms of advertising to clients in the jurisdiction with the intent of representing those clients and establishing a substantial practice in the jurisdiction.  The Commission wanted to make clear that, at some point, such a virtual presence can give rise to a systematic and continuous presence within the meaning of Rule 5.5(b)(1). 

This amendment does not create any new obligations and is not intended to affect the scope of Comment [4], which already makes clear that a lawyer can establish a systematic and continuous presence in a jurisdiction even if the lawyer is “not physically present” there.  Moreover, the purpose of this amendment is not to discourage virtual law offices.  To the contrary, the Commission found that lawyers who have such practices can offer legal services efficiently and effectively and can improve access to justice. 

Rather, the amendment is designed to serve two purposes. First, the amendment makes clear that these new forms of practice are subject to the restrictions of Rule 5.5(b), just like more traditional forms of law practices.  And second, the amendment is intended to offer more guidance to lawyers who engage in new forms of law practice as to when the Rule might be triggered.  The Commission concluded that this clarification enables lawyers, including lawyers who practice virtually, to provide legal services to clients in other jurisdictions on an occasional basis as long as doing so is consistent with Rule 5.5(c), while at the same time prohibiting those lawyers from establishing a more systematic and continuous relationship with a jurisdiction unless they are admitted to practice or are otherwise authorized to practice in that jurisdiction. 

The Commission recognizes that the proposed new Comment does not clearly define the line between a permissible temporary virtual practice in a jurisdiction and in an impermissible systematic and continuous presence.  The Commission concluded that precision in this area is not possible.  The Commission, however, believes that the new language will give lawyers more guidance than the Comment currently provides.

In sum, lawyers who practice virtually must comply with the same restrictions as lawyers who have more traditional law offices, and the Commission’s proposal is intended to make this point more explicitly while offering lawyers more guidance as to the Rule’s application to these newer forms of law practice.

 

Ethics 20/20 Proposal to Amend Rule 5.3 (Responsibilities Regarding Nonlawyer Assistants)

Rule 5.3 Responsibilities Regarding Nonlawyer Assistancets

With respect to a nonlawyer employed or retained by or associated with a lawyer:

(a) a partner, and a lawyer who individually or together with other lawyers possesses comparable managerial authority in a law firm shall make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that the person's conduct is compatible with the professional obligations of the lawyer;

(b) a lawyer having direct supervisory authority over the nonlawyer shall make reasonable efforts to ensure that the person's conduct is compatible with the professional obligations of the lawyer; and

(c) a lawyer shall be responsible for conduct of such a person that would be a violation of the Rules of Professional Conduct if engaged in by a lawyer if:

    (1) the lawyer orders or, with the knowledge of the specific conduct, ratifies the conduct involved; or

    (2) the lawyer is a partner or has comparable managerial authority in the law firm in which the person is employed, or has direct supervisory authority over the person, and knows of the conduct at a time when its consequences can be avoided or mitigated but fails to take reasonable remedial action.

COMMENT

[21] Paragraph (a) requires lawyers with managerial authority within a law firm to make reasonable efforts to establish internal policies and procedures designed to provide reasonable assurance that nonlawyers in the firm and nonlawyers outside the firm who work on firm matters will act in a way compatible with the Rules of Professional Conduct. See Comment [6] to Rule 1.1 (retaining lawyers outside the firm) and Comment [1] to Rule 5.1. (responsibilities with respect to lawyers within a firm).  Paragraph (b) applies to lawyers who have supervisory authority over the work of a nonlawyer. such nonlawyers within or outside the firm. Paragraph (c) specifies the circumstances in which a lawyer is responsible for the conduct of a nonlawyer such nonlawyers within or outside the firm that would be a violation of the Rules of Professional Conduct if engaged in by a lawyer. 

Nonlawyers Within the Firm

[12] Lawyers generally employ assistants in their practice, including secretaries, investigators, law student interns, and paraprofessionals. Such assistants, whether employees or independent contractors, act for the lawyer in rendition of the lawyer's professional services. A lawyer must give such assistants appropriate instruction and supervision concerning the ethical aspects of their employment, particularly regarding the obligation not to disclose information relating to representation of the client, and should be responsible for their work product. The measures employed in supervising nonlawyers should take account of the fact that they do not have legal training and are not subject to professional discipline.

Nonlawyers Outside the Firm

[3] A lawyer may use nonlawyers outside the firm to assist the lawyer in rendering legal services to the client.  Examples include the retention of an investigative or paraprofessional service, hiring a document management company to create and maintain a database for complex litigation, sending client documents to a third party for printing or scanning, and using an Internet-based service to store client information.  When using such services outside the firm, a lawyer must make reasonable efforts to ensure that the services are provided in a manner that is compatible with the lawyer’s professional obligations.  The extent of this obligation will depend upon the circumstances, including the education, experience and reputation of the nonlawyer; the nature of the services involved; the terms of any arrangements concerning the protection of client information; and the legal and ethical environments of the jurisdictions in which the services will be performed, particularly with regard to confidentiality. See also Rules 1.1 (competence), 1.2 (allocation of authority), 1.4 (communication with client), 1.6 (confidentiality), 5.4(a) (professional independence of the lawyer), and 5.5(a) (unauthorized practice of law).  When retaining or directing a nonlawyer outside the firm, a lawyer should communicate directions appropriate under the circumstances to give reasonable assurance that the nonlawyer's conduct is compatible with the professional obligations of the lawyer.

[4] Where the client has chosen or suggested a particular nonlawyer service provider outside the firm, the lawyer or law firm ordinarily should consult with the client concerning the allocation of responsibility for monitoring as between the client and the lawyer or law firm.  See Rule 1.2.  When making such an allocation in a matter pending before a tribunal, lawyers and parties may have additional obligations that are a matter of law beyond the scope of these Rules.

 

The Commission's Explanation for the Proposal

Model Rule 5.3 was adopted in 1983 and was designed to ensure that lawyers employ appropriate supervision of nonlawyers.  Although the Rule has been interpreted to apply to lawyers’ use of nonlawyers within and outside the firm, the Commission concluded that additional comments would help to clarify the meaning of the Rule with regard to the use of nonlawyers outside the firm.

As an initial matter, nonlawyer services are provided not only by individuals, such as investigators or freelancing paralegals outside the firm, but also by entities, such as electronic discovery vendors and “cloud computing” providers.  To make clear that the Rule applies to nonlawyer services of all kinds, even services performed by entities, the Commission decided to recommend a change in the title of Model Rule 5.3 from “Nonlawyer Assistants” to “Nonlawyer Assistance.”  For the same reason, the first sentence of proposed Comment [3] expressly includes a “cloud computing” example to make clear that the Rule applies to services offered by entities (such as services provided over the Internet) as well as to individual service providers.

The Commission also concluded that Comment [2], which offers an overview of Rule 5.3, should be renumbered as Comment [1] and should be revised to make clear that Rule 5.3 applies to the use of nonlawyers within and outside the firm.  This revision is consistent with existing interpretations of Rule 5.3, but the Commission concluded that greater clarity on this issue was desirable.

Although Rule 5.3 applies to the use of nonlawyers within and outside a firm, the particular considerations that lawyers need to take into account may differ depending on where the nonlawyers are located.  An existing Comment (now Comment [2]) identifies the considerations that apply when the services are performed within the firm, and the Commission concluded that a separate Comment – proposed Comment [3] – should identify the distinct concerns that arise when the services are performed outside the firm.

Proposed Comment [3] states that, when a lawyer uses nonlawyer services outside the firm, the lawyer has an obligation to ensure that the nonlawyer services are performed in a manner that is compatible with the lawyer’s professional obligations. The proposed Comment then identifies the factors that determine the extent of the lawyer’s obligations relative to nonlawyer service providers.  These factors essentially parallel the factors that are recited in the proposed new Comment to Rule 1.1, which addresses the retention of nonfirm lawyers.  The Comment also references several other Model Rules that lawyers should consider when using nonlawyer services outside the firm.

The last sentence of Comment [3] emphasizes that lawyers have an obligation to give appropriate instructions to nonlawyers outside the firm when retaining or directing those nonlawyers.  For example, a lawyer who instructs an investigative service may not be in a position to directly supervise how a particular investigator completes a particular assignment, but the lawyer’s instructions must be reasonable under the circumstances to provide reasonable assurance that the investigator’s conduct is compatible with the lawyer’s professional obligations.

As is the case with the proposed Comment to Rule 1.1, proposed Comment [3] does not use the term “outsourcing.” The Commission concluded that lawyers may incorrectly conclude that they are not engaged in “outsourcing” when using such nonlawyer services outside the firm.  To avoid such a misunderstanding, the Commission decided to retain the original phrasing of the Model Rule within the Comment.

Proposed Comment [4] acknowledges that clients sometimes instruct lawyers to use particular nonlawyer service providers.  In such situations, the lawyer ordinarily should consult with the client to determine how the outsourcing arrangement should be structured and who will be responsible for monitoring the performance of the nonlawyer services.  The word “monitoring” was chosen intentionally to reflect the idea that, under these circumstances, a lawyer may have a duty to remain aware of how the nonlawyer service provider is performing its services, even if the lawyer has not chosen the provider and may not have any direct supervisory obligations.  When the lawyer or law firm chooses the nonlawyer service provider, there would likely be no reason to discuss the responsibility for monitoring, because the lawyer or law firm would have that responsibility. 

The final sentence of the proposed Comment [4] is intended to remind lawyers that they may have duties to a tribunal that are not necessarily satisfied by complying with the Rules of Professional Conduct.  For example, if a client instructs the lawyer to hire a particular electronic discovery vendor, the lawyer cannot cede all responsibility for monitoring the vendor to the client, given that the lawyer may have to make certain representations to a tribunal regarding the vendor’s work.

The proposed Comments do not describe the lawyer’s obligation to obtain consent when disclosing confidential information to nonlawyer service providers outside the firm.  The Commission concluded that there are many circumstances where such consent is unnecessary.  For example, lawyers regularly send documents to outside vendors for scanning or copying, but there is ordinarily no need to obtain the client’s consent to have those services performed.  There are, however, other situations where client consent might be advisable or required.  The Commission concluded that lawyers would benefit from further clarification of this issue in the form of an opinion from the Standing Committee on Ethics and Professional Responsibility and has requested that the Committee undertake consideration of this issue.