This week, the ABA released a formal opinion clarifying (somewhat) the obligations lawyers have when a data breach occurs involving (or having a substantial likelihood of involving) material client information.
Just in time for Cybersecurity Awareness month 2018.
You can find Formal Opinion 483 here.
From the ABA Journal:
The ABA House of Delegates on Monday voted in favor of amending Rule 7 of ABA Model Rules of Professional Conduct, which addresses lawyer advertising.
Lucian Pera, of Adams and Reese in Memphis, Tennessee, and chair of the Center for Professional Responsibility, told delegates that in the decades since the 1977 U.S. Supreme Court decision in Bates v. State Bar of Arizona allowed for lawyers to advertise their services, there’s been a “breathtaking variation in advertising rules” among states. He said the amendments were necessary to clarify and simplify these rules.
Resolution 101 amends Rules 7.1-7.5, and was informed 2015 and 2016 reports by the Association of Professional Responsibility Lawyers. The Standing Committee on Ethics and Professional Responsibility worked on the edits over the course of two years, holding at least two open hearings. A detailed article on their work is available here.
No one rose to oppose the amendment, and the majority of delegates voted in favor of the amendments.
For those of you teaching PR during 2018-2019, you may wish to advise your students regarding the appearance of revised rules on the MPRE. Here is the position of the NCBE as posted on its website:
Amendments to the ABA Model Rules of Professional Conduct or the ABA Model Code of Judicial Conduct will be reflected in the examination no earlier than one year after the approval of the amendments by the American Bar Association. Until that time, the examination may include questions that test on the rules before amendment.
An opinion by New Jersey legal ethics authorities that deemed Avvo off-limits to lawyers in the state will not be reviewed by the state Supreme Court.
In an order dated June 1 and obtained by the Law Journal on Monday, the court denied a petition for certification by Consumers for a Responsive Legal System, an organization that represents Avvo and other online companies providing lawyer referrals.
The organization, called Responsive Law for short, had asked the court to review the June 2017 opinion, jointly issued by the Advisory Committee on Professional Ethics, the Committee on Attorney Advertising and the Committee on the Unauthorized Practice of Law, which found that Avvo facilitates improper fee-splitting and may not be utilized by New Jersey lawyers.
Opposing the petition were the Attorney General’s Office, representing the committees, and the New Jersey State Bar Association.
Responsive Law executive director Tom Gordon said in a statement Monday that the court, “by summarily declining to review the decision … has abrogated its responsibility to engage in active supervision of the bar’s anti-competitive conduct.”
“According to the U.S. Supreme Court’s [North Carolina State Board of Dental Examiners v. Federal Trade Commision (2015)] decision, active supervision by a disinterested government agency is a prerequisite for antitrust immunity when policy decisions are made by market participants,” Gordon said. “The real losers here, though, are the people of New Jersey, who are being prevented from finding affordable lawyers online using the same tools they use to find doctors, babysitters, and mechanics.”
Now-former State Bar president Robert Hille, of McElroy, Deutsch, Mulvaney & Carpenter in Morristown, filed a brief on behalf of the bar urging the court to pass on the case. The NJSBA issued a statement Monday from current president John E. Keefe Jr. of the Keefe Law Firm in Red Bank.
“The court’s decision to let stand the joint opinion is an important one that provides clarity for New Jersey lawyers and protects consumers,” Keefe said.
“The association has increasingly grown concerned about the number of organizations that have sought to open the door to fee sharing, which could interfere with a lawyer’s independent professional judgement, and with the concept of organizations providing legal services when they are not bound by the same ethics rules that guide attorneys,” he said, adding that the court’s denial of certification “has ensured that a client’s interests are paramount and that they are represented fairly and impartially by lawyers adhering to our long-established rules governing professional conduct and ethics.”
Representing the state was Deputy Attorney General Steven N. Flanzman. An email to an Attorney General’s Office’s spokesman didn’t get an immediate response Monday.
The June 21, 2017, opinion was issued in response to an NJSBA inquiry asking whether lawyers may “participate in certain online, non-lawyer, corporately owned services.” The inquiry named Avvo, LegalZoom and Rocket Lawyer specifically.
The shortcomings of LegalZoom and Rocket Lawyer could be fixed simply by registering with the state, the committees held. But they found ethical trouble with the very structure of Avvo’s “pay-for-service” programs. The opinion decreed that “New Jersey lawyers may not participate in the Avvo legal service programs because the programs improperly require the lawyer to share a legal fee with a nonlawyer in violation of Rule of Professional Conduct 5.4(a), and pay an impermissible referral fee in violation of Rule of Professional Conduct 7.2(c) and 7.3(d).”
According to the opinion, Avvo offers “Avvo Advisor”—through which customers buy 15-minute phone conversations with a lawyer for a $40 flat rate, of which Avvo keeps a $10 marketing fee—and “Avvo Legal Services,” which allows customers to pay flat fees to Avvo for legal services provided by affiliated lawyers, after which Avvo pays the lawyer but keeps a marketing fee.
“The participating lawyer receives the set price for the legal service provided, then pays a portion of that amount to Avvo,” the committees said. “The label Avvo assigns to this payment (“marketing fee”) does not determine the purpose of the fee. … Here, lawyers pay a portion of the legal fee earned to a nonlawyer; this is impermissible fee sharing.”
The opinion also held that marketing fees lawyers pay to Avvo are not for advertising but amount to an “impermissible referral fee” by the definition contained in RPCs 7.2(c) and 7.3(d), and Avvo’s practice of holding the lawyer’s fee until the service is provided violates an attorney’s requirement to maintain a registered trust account per Rule 1:28(a)-2.
A new complaint this week against LegalZoom for the unauthorized practice of law, this time from LegalForce RAPC, a patent and trademark filing firm. The complaint alleges that non-lawyer “trademark document specialists” “provid[e] legal advice to the plaintiffs by selecting classification and modifying the goods and services description from the template thereby applying specific law to facts.”
More from the ABA Journal.
Last month, NC adopted 2017 FEO 1, finding:
(1) that lawyers may use subscriber based text services to send texts with links to the lawyers website; and
(2) it is not a violation of 7.3(a) if the subscriber has the option to reply to the text message as follows:
The committee also confirmed that it is not a violation of 7.3(a) if the second text message from includes the lawyer’s phone number and an invitation to call the lawyer.
Yesterday, the ABA issued a formal opinion on attorney email encryption, providing that while encryption is not required always, it may be – and to determine if it is, a lawyer must understand certain things, including how information is transmitted and where it is stored.
Great summary of (and link to) the opinion here.
H/T to Jim Calloway @ Law Practice Tips.
On April 27, 2017, the Law Society of Upper Canada, which is the body that regulates lawyers in Canada’s largest province of Ontario, approved a set of recommendations that cap lawyer referral fees. The action limits referral fees to 15% of the first $50,000 in legal fees and 5% thereafter, with an absolute cap of $25,000. It adopted a standardized form for referral agreements that would be signed by everyone involved in a referral, including the referring lawyer, the lawyer getting the file and the client.
This action was based on a report issued by the Professional Regulation Committee’s Advertising & Referral Fee Arrangements Issues Working Group. That Report is described in this new story and is available here (at Tab 4-2).
The U.S. counterpart to this issue is ABA Model Rule 1.5(e). Under Rule 1.5(e), a fee division among lawyers from different firms is proper if “the client agrees to the arrangement, including the share each lawyer will receive, and the agreement is confirmed in writing.” That rule also requires that the feed division be in proportion to the work done or all lawyers assume “joint responsibility for the representation.” Some states, such as Pennsylvania, have omitted the proportionality/joint responsibility clause, and other have omitted the “confirmed in a writing” requirement.
When a lawyers tries to withdraw for a client’s failure to pay, the lawyer must take care to avoid breaching the Rule 1.6 duty of confidentiality, according to the December 2016 opinion. But what does this mean, practically speaking? I see this as yet another tension between the law as a profession v. the law as a business.
“If a buyer repudiates a contract, the seller can cancel without judicial approval. A lawyer cannot do so, necessarily, when a client repudiates a contract by failing to pay. This reality existed before this opinion; the opinion does not change things. But it is notable that the structure of the process found in this opinion increases uncertainty for the lawyer and therefore the costs of doing business. A lawyer can’t be a professional unless she can get paid.”
More thoughts via the ABA Journal article Lawyers Should Tread Carefully Before Quitting a Troublesome Client.
Source: Shifting Incomes for American Jobs | FlowingData
The average American hourly wage is $24/hour. So how many people can afford to hire you? The average person makes 40% of what you do – IF you earn $100,000.
Click through for an interactive graph which Nathan Yao has designed. It shows the distribution of income within occupations by occupation in 1960, 1980, 2000, and 2014. Looking at lawyers income you will see that most lawyers make under $100,000. A handful make $150,000 and then a sizeable group earning above $200,000 This is no surprise to me. It is a struggle to generate the $500,000 in business and fees you need to make $100,000. Note that there is employer’s shareof Social Security and Medicare is 7.65%. Plus health insurance. A good individual plan costs about $700/month. So to make declare $100,000 costs you about $115,000 minimum. So that comes to $57/hour if you work 2,000 hours/year. GWC
Shifting Incomes for American Jobs | FlowingData
by Nathan Yao
From the New York Times Room for Debate:
The disclosure that Peter Thiel, co-founder of PayPal, spent about $10 million to help the wrestler Hulk Hogan sue Gawker Media apparently because a Gawker blog outed him as gay years ago revealed for many the lucrative practice of investors paying for litigation in which they are not involved.
While Thiel’s motives were not profit driven, most investors seek a cut of any final judgment or settlement. Should third parties be allowed to invest in lawsuits or does that unduly influence them?
Lisa Rickard, president of the United States Chamber of Commerce Institute for Legal Reform, says no – This is Casino Litigation Where We All Lose
Anthony Sebok, professor of law at Benjamin N. Cardozo Law School, says yes – Third-Party Litigation Finance Promotes Justice and Deters Wrongdoing
On April 22, 2016, the Second Circuit decided SCHOENEFELD v. SCHNEIDERMAN, et. al. In a 2-1 decision, the Second Circuit reversed the district court and remanded the case with instructions to the court to award judgment to the defendants. The Second Circuit majority upheld the constitutionality of New York’s rule that requires an instate office. Relying on
McBurney v. Young, 133 S. Ct. 1709 (2013), the Court held, inter alia, that “in the absence of any proof that that statute’s in‐state office requirement was enacted for a protectionist purpose”, plaintiff could not prevail.
The suit was filed in 2008 by Ekaterina Schoenefeld, who was a New Jersey resident. She had cited the Privileges & Immunity Clause and argued that the policy, which blocked her from practicing in New York despite passing the bar there and meeting all other requirements, served no substantial state interest. She had noted that New York residents need not have a physical office in New York and may practice from their homes. This argument was not successful. The opinions are quite lengthy – 31 pages for the majority and 25 pages for the dissent. The ABA Journal has a story about the case here about and there is Wall Street Journal article here.
Although the Court held that it was constitutional for New York to have an in-state office requirement, the decision does not require such a rule. At some point, New York might want to revisit this issue. In addition to its domestic implications, this ruling has the potential to reduce the number of foreign-admitted lawyers who annually sit for New York’s bar exam. See Diane Bosse, Testing Foreign-Trained Applicants in a New York State of Mind. New York’s in-state office rule could affect the attractiveness of the New York license as a global credential.
From NPR’s All Things Considered:
Out of State Lawyers Descend on Flint, Mich., Amid Water Crisis
For the most part, official help has been slow in getting to Flint, Mich., but one group of first responders is on the ground. A growing number of out of state lawyers are setting up shop in Flint, and they are filing dozens of lawsuits.
Listen to the coverage by Steve Carmody here (disclaimer, you’ll hear my thoughts about the situation during the last few seconds of this 3 1/2 minute radio spot). Or read the full transcript after the jump. (Cross-posted at the Legal Ethics Forum.)Read More »
The ABA Journal reports today that the Missouri Supreme Court suspended a lawyer for using the information obtained by the lawyer’s divorce client, who obtained the information by accessing the wife’s email without permission (husband guessed his wife’s email password). The information obtained included:
The court found that the lawyer violated the following Missouri Rules of Professional Conduct:
The court noted that the lawyer had been disciplined five times previously.
You can find the opinion here.
Source: O’Bannon v. NCAA – fee award largely affirmed
U.S. District Judge Claudia Wilkens has affirmed with relatively modest changes the fee award of the Magistrate Judge in favor of the college players who prevailed in their Sherman Act case against the NCAA. They sought to share in revenues the colleges gain from selling the student athletes images and likenesses.
For the reasons stated above, the Court GRANTS the NCAA’s motion for de novo review of Magistrate Judge Cousins’ fee order and adopts the fee order in part. Docket No. 415. The Court orders the following reductions in addition to the reductions ordered by Magistrate Judge Cousins. The Court will further reduce Plaintiffs’ attorneys’ fees by $3,628,610.15, to $40,794,245.89, and will further reduce Plaintiffs’ costs by $5,675.00, to $1,540,195.58.
Source: Meet Ken Feinberg, the Master of Disasters | | Observer
A good profile of the ADR superstar (wherein I get some “ink”). – gwc
Meet Ken Feinberg – the Master of Disasters //NY Observer
This week, the Federal Circuit found that “patent agent”-client privilege exists independent from the attorney-client privilege, resolving a district court split, according to IPethics and INsights.
While the court recognized the “presumption against the recognition of new privileges,” including that “courts have consistently refused to recognize as privileged communications with other non-attorney client advocates,” it found “that the unique roles of patent agents, the congressional recognition of their authority to act, the Supreme Court’s characterization of their activities as the practice of law, and the current realities of patent litigation counsel in favor of recognizing an independent patent-agent privilege.”
I find this decision particularly interesting in light of the increasing numbers of non-lawyer legal services providers. While the privilege will no doubt remain sacred, the court’s reasoning did rely on the “clear congressional intent to authorize an agency to create and regulate a group of individuals with specific authority to engage in the practice of law,” a factor which will no doubt be relevant as our regulatory scheme increasingly embraces alternative legal service providers.
h/t to Wake Law Student and Patent Agent John Sears.
At yesterday’s Midyear Meeting, the ABA House of Delegates adopted Resolution 105, Model Regulatory Objectives for the Provision of Legal Services. This resolution is a product of the ABA Commission on the Future of Legal Services. (Disclaimer, I am a Reporter for the Commission.) Coverage from the ABA is here, the ABA Journal is here, and the American Lawyer is here. For information on the purpose of regulatory objectives generally, see Professional Responsibility: A Contemporary Approach co-author Laurel Terry’s seminal work on this topic, and for more background on the development of the ABA Model Regulatory Objectives specifically, see the Commission’s Report.
Here is the resolution in full:
RESOLUTION
RESOLVED, That the American Bar Association adopts the ABA Model Regulatory Objectives for the Provision of Legal Services, dated February, 2016.
ABA Model Regulatory Objectives for the Provision of Legal Services
A. Protection of the public
B. Advancement of the administration of justice and the rule of law
C. Meaningful access to justice and information about the law, legal issues, and the civil and criminal justice systems
D. Transparency regarding the nature and scope of legal services to be provided, the credentials of those who provide them, and the availability of regulatory protections
E. Delivery of affordable and accessible legal services
F. Efficient, competent, and ethical delivery of legal services
G. Protection of privileged and confidential information
H. Independence of professional judgment
I. Accessible civil remedies for negligence and breach of other duties owed, disciplinary sanctions for misconduct, and advancement of appropriate preventive or wellness programs
J. Diversity and inclusion among legal services providers and freedom from discrimination for those receiving legal services and in the justice system
FURTHER RESOLVED, That the American Bar Association urges that each state’s highest court, and those of each territory and tribe, be guided by the ABA Model Regulatory Objectives for the Provision of Legal Services when they assess the court’s existing regulatory framework and any other regulations they may choose to develop concerning non-traditional legal service providers.
FURTHER RESOLVED, that nothing contained in this Resolution abrogates in any manner existing ABA policy prohibiting non lawyer ownership of law firms or the core values adopted by the House of Delegates in Resolution 10F, adopted on July 11, 2000.
(Cross-posted at the Legal Ethics Forum.)
Libel is a ancient cause of action. The ease of communication on the internet allows a lie to spread farther and faster than ever. But the Communications Decency Act 47 USC 230 (c) immunizes internet service providers and others who post defamatory statements. But it has not abolished the state tort actions against the speaker or writer.
Abraham Lincoln famously said that a lawyer’s stock in trade is his time and advice. But the most important asset may be reputation. So the need to respond to sharp defamatory words in online reviews on websites like Yelp arises often. But the confidentiality command of RPC 1.6 drastically limits the ability to do so. The New York State Bar Association in Ethics Opinion 1032 (2014) opined that such an “informal” statement that a lawyer did not adequately communicate and that his services were lacking did not trigger the self defense right of RPC 1.6 (b)(5) which permits disclosure of confidences “to establish a claim or defense”.
Similarly Pennsylvania Bar Association Formal Opinion 2014-300 opined that a lawyer may respond in only a “general” way to a negative review, being careful not to reveal any confidential information. Similarly the Bar Association of San Francisco in Opinion 2014-1 was of the view that
While the online review could have an impact on the attorney’s reputation,
absent a consent or waiver, disclosure of otherwise confidential information is not ethically permitted in California unless there is a formal complaint by the client, or an inquiry from a disciplinary authority based on a complaint by the client. Even in situations where disclosure is permitted, disclosure should occur only in the context of the formal proceeding or inquiry, and should be narrowly tailored to the issues raised by the former client.
In my own experience as a member of the New Jersey Supreme Court’s Advisory Committee on Professional Ethics I was voted down decisively. I argued that the lawyer had been defamed by the client who wrote an online assertion that she had been abandoned. That I felt entitled the lawyer to respond publicly that the retainer agreement limited the lawyer’s undertaking to research and investigation. In the view of the Committee that would be a breach of the duty of confidentiality.
But a lawyer can reveal such information if she takes the step of filing a defamation action. Florida lawyer Anne Marie Giustibelli took that step against a client who accused her of lying about fees. Because Giustibelli was trying to “establish a claim…in a controversy between the lawyer and the client” she was allowed to disclose confidences. But filing defamation actions and seeking punitive damages is such a blunt instrument that it is likely to be rarely employed. Perhaps a rule that a defamatory comment opens the door to rebuttal does have merit? – gwc
Hello and welcome to this Ethics Alert blog which will discuss the recent opinion of the Fourth District Court of Appeal upholding a judgment in a lawsuit filed by a lawyer alleging libel for false online comments.. The case is Ann-Marie Giustibelli, P.A. et al v. Copia Blake and Peter Birzon, Case No. 4D14-3231 (Florida 4th DCA, January 6, 2016).
Professional Responsibility: A Contemporary Approach 