The California Supreme Court yesterday approved a significant overhaul of California’s legal ethics rules, moving California’s rules closer to the structure of the ABA’s Model Rules for the first time. The Court’s Order approved 27 rules as submitted last year by the State Bar’s Commission for the Revision of the Rules of Professional Conduct, 42 rules as revised by the Court, and denied approval of one proposed rule (regarding a lawyer’s obligations representing a client with diminished capacity). The revised rules, effective November 1, 2018, change the numbering and format of California’s rules. Substantively, the revised rules relate to personal relationships with clients, conflicts imputed through a law firm, attorney advertising, and attorney’s fees, and represent a years-long effort to simplify and to update the rules that govern California lawyers.
California Attorney Ethics in Practice
California Supreme Court Approves Major Revisions to Ethics Rules
5 Law Firm Systems to Review for 2017
Properly managing a modern and profitable law firm in 2017 and beyond requires balancing vigilance and innovation. The legal headlines are full of emerging risks to law firms, including confidentiality breaches and technology disasters. The legal headlines are also full of competitive risks for law firms. Passive management of a law firm, even a successful one, is not a good strategy. You may not change, but the marketplace surely will.
January seems like the right time of year to face up to the things we should be doing, but aren’t. Here are 5 firm systems that you should review critically in 2017, and annually:
- Firm Management. Consider whether your Partnership Agreement or other organizing documents are up to date, with detailed compensation structures that incentivize partners and other attorneys at the firm to think about and comply with all ethical requirements. Analyze governance policies to ensure that you prioritize compliance with legal ethics requirements, and to ensure an appropriate response in the event of an ethics question or a potential ethics issue.
- Clients and Matters. Analyze technology systems for identifying and resolving client conflicts, protecting client confidentiality, and documenting each of the firm’s engagements. Any system is only as good as the information that goes into it and only works if it is used consistently and uniformly. Many conflict issues arise from latent conflicts (a subsidiary vs. parent conflict, for example) that may not be obvious on the face of a conflict search. Ensure that your systems are properly set up, and are being used, and used in the right way.
- Calendaring and Deadlines. A sophisticated calendaring system to monitor all firm deadlines is essential. Take advantage of new technology to integrate calendaring functions into attorney workflow, and to ensure accuracy. Ensure that your system is durable and can be accessed in the event of an emergency or significant disruption.
- Information Management. Client confidentiality in California is not a gray area: you must keep client information confidential. This means that your firm must have sufficient systems in place to ensure that information is secure. Analyze whether your information security policies are sufficient (what rules exist regarding laptop security, thumb drives, cloud data, for example). Analyze whether attorneys and staff are following the policies. Consider whether your firm’s technology is sufficient to prevent a breach, and/or to respond to one if it occurs.
- Financial Management. Review your trust accounting procedures and safeguards to ensure that client funds are handled properly. The rules are quite clear about what you can, and cannot, do with these funds. Ensure that your attorneys and staff are properly trained to identify appropriate issues and to handle these items properly. Separately, consider any alternative fee arrangement from an ethical perspective: does the arrangement place the client’s interest in conflict with yours? does the arrangement incentive something that could be an ethical concern (e.g., incentivizing attorneys to spend as little time as possible on a case)? is the arrangement properly documented, to avoid ambiguity when bills come due?
Tracking Proposed Revisions to California’s Rules of Professional Responsibility
California’s Commission for the Revision of the Rules of Professional Responsibility has proposed 68 new and amended rules for attorneys, and is seeking public comment on the proposed rules. California is the only state that whose professional responsibility rules do not track the ABA Model Rules. The Commission has issued an Executive Summary detailing the proposed and amended rules, comments, and dissenting views. The Commission also issued a detailed list of rule revisions considered, but rejected. Among other things, the proposed rules include suggested revisions to rules related to personal relationships with clients, conflicts imputed through a law firm, attorney’s fees, and handling clients with diminished capacity. The public comment period expires September 27.
Connect with Caution: Don’t Let Social Media Indirectly Compromise Client Confidentiality
We frequently repeat the refrain that client confidentiality in California is not a gray area: you must keep client information confidential. Most attorneys (hopefully) by now know not to divulge confidential client information on social media. Some attorneys have learned the hard way that casual comments about clients or client matters on social media is perilous. But attorneys must also focus on the potential to reveal confidential client information indirectly on social media. You may be revealing a lot on social media even though you aren’t posting directly about clients or client matters. How so?More
How to Stay on Top of New Rules Affecting Your Practice
Several significant amendments to the Federal Rules of Civil Procedure became effective on December 1, changing obligations for attorneys and parties in civil litigation in federal court. Significant amendments to California’s Code of Civil Procedure, affecting demurrer procedure, 998 offers, peremptory challenges, expedited trials in limited jurisdiction cases, among other changes, also took effect this year. These changes have the potential to be quite important, ranging from duties of the attorneys and parties to limit the scope of discovery to duties to preserve electronically stored information, which is an emerging change that heightens the competence obligations of attorneys dealing with this technology. Litigators know that significant amendments to the federal rules are rare, but even small revisions have the potential to dramatically change how their cases are litigated. From a practice management perspective, here’s how to make sure your firm has the right systems and procedures in place to monitor and to incorporate new rules into your practice in a comprehensive way.More
5 Reasons to Seek Independent Outside Ethics Counsel
Attorneys tend to view ethics compliance as something very personal, and firms correctly views ethics issues as an internal matter. Attorneys would not hesitate to engage outside counsel if a legal malpractice claim arose, but many do not yet have dedicated outside ethics counsel to advise as part of ongoing daily firm operations. Increasingly, there are compelling reasons for attorneys and firms to engage outside independent ethics counsel, as a confidential resource in the event that an ethical issue arises, to advise on ethics compliance systems, and to help prevent ethics problems.More
Tweeting Your Way Afoul of Attorney Advertising Rules
In Formal Opinion 2012-186, California’s Standing Committee on Professional Responsibility and Conduct addresses when and how attorney’s posts on social media may constitute attorney advertising within the requirements of California’s Rules of Professional Conduct and related governing statutes. In general, a social media post by an attorney falls within the professional responsibility rules and standards for attorney advertising if the post is a “communication” within Rule 1-400 or “advertising by electronic media” under Article 9.5 of the State Bar Act. In this context, a post that conveys information “concerning availability for professional employment” of an attorney is a “communication” within Rule 1-400 and must comply with the restrictions of Rule 1-400(D). Among other things, “a communication must not be untrue or misleading (Rule 1-400(D)(1), (2) & (3)), must disclose that it is a communication (Rule 1-400(D)(4)), and must not be transmitted in a coercive or intrusive manner (Rule 1-400(D)(5)).” That rule also includes detailed Standards expressed in a non-exclusive list of 15 types of communications that are presumptive violations.More
Can You Make Ethics Compliance a Competitive Advantage?
Among the people who think about the future of law practice and of lawyers, there is a developing recognition that ethics compliance can be a powerful competitive advantage in practice. Most lawyers view ethics compliance as a necessary (it is about as necessary as it gets) part of practicing law, but would you characterize ethics as potential competitive advantage for a law firm?
Well, you should. Ethics compliance, more specifically the demonstrated commitment to the practice of law at the highest ethical standards, is good business for law firms. This hardly needs explaining: if you hold yourself to high ethical standards, you will be better at what you do, more careful, and less likely to become engaged in distracting and potentially career-threatening ethical disputes and controversies. Beyond this, however, ethics compliance can be a unique point of distinction, a source of strong and coherent firm culture, an empowering identity for members of the firm, and a powerful symbol to clients that you are fair and wise, and exercise good judgment. Isn’t that what you are selling as a lawyer?More
When is an Attorney’s Blog Considered Advertising under Legal Ethics Rules?
The Standing Committee on Professional Responsibility of the State Bar of California earlier this year issued a detailed advisory Opinion regarding when an attorney’s blog should be subject to the advertising requirements of the Rules of Professional Conduct and the State Bar Act.
Formal Opinion Interim 12-0006 provides that attorney blogs are subject to attorney advertising rules if the blog expresses availability for professional employment, or if the blog is part of the law firm’s professional website. By contrast, a non-legal blog by an attorney is not necessarily subject to the advertising rules just because it is written by an attorney, or just because it links to an attorney’s professional website. The Opinion first analyzes whether attorney blogs are a “communication” under Rule 1-400(A), a three-part test: (1) is the message is made by or on behalf of a California attorney?; (2) is the message concerns the attorney’s availability for professional employment?; and (3) is the message is directed to former, present, or prospective client(s)? The Opinion concludes that all attorney blogs meet parts 1 and 3 of this test, so the relevant issue is whether the blog post concerns “the availability for professional employment” of the attorney or the attorney’s firm.More
5 Legal Ethics Compliance Systems to Review Today
Ensuring that every element of your practice complies with the highest ethical standards is not just required, it is also good business. Or, to be more specific, permitting an ethical lapse is very, very bad business. A review of these systems may lead to more questions than answers. But asking the right questions is the critical first step. Consider these 5 critical compliance systems in your law practice: firm management; clients and matter management; calendaring and deadlines; information management; and financial management.
In your firm, are all of these systems in place and performing as they should, as part of a complete ethics compliance protocol?More