Ethics 20/20 Is Lauded on Tech Proposals, Rejects Plea to Lower Barriers to Marketing

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By Joan C. Rogers  

NEW ORLEANS—The ABA Commission on Ethics 20/20 rejected Feb. 3 a proposal to recommend eliminating the disciplinary rule that generally prohibits lawyers from paying others to recommend their services.

The idea was proffered by the ABA Standing Committee on Delivery of Legal Services. Speaking on the committee's behalf, University of Tennessee law professor Carl A. Pierce acknowledged that the proposal might “raise a few eyebrows,” but contended that dropping the ban could encourage innovative use of technology to increase access to legal services.

The commission discussed the committee's proposal, but tabled it without a vote after no commissioner spoke in favor of it.

Pierce was one of a dozen speakers who addressed the commission at its latest public hearing and meeting, held here Feb. 2-3.

The commission is scheduled to present its recommendations for amending the ABA Model Rules of Professional Conduct to the ABA House of Delegates at the bar group's next two meetings, this August and February 2013.

Several speakers at the public hearing lauded the commission's proposals on technology and confidentiality, which would encourage lawyers to keep abreast of the benefits and risks of technology and require them to take reasonable steps to safeguard clients' confidential information.

The commission's proposals will encourage providers of continuing legal education to develop programs on technology beyond those that simply scream about its dangers, said Jayne Reardon, executive director of the Illinois Supreme Court Commission on Professionalism.

Commissioners got an earful on two issues that have proven particularly controversial: whether nonlawyers should be allowed to own an interest in law firms, and to what extent foreign lawyers should be allowed to practice in the United States.

The commission is still debating tentative recommendations by its working groups on those subjects, and remains divided about what to endorse. See 28 Law. Man. Prof. Conduct 100.

Drafts Left Largely Intact

After the hearing, the commission spent hours poring over written comments it received concerning a group of proposals the commission is preparing to submit to the delegates in August. The commission mostly decided to keep the draft language but concluded in some instances that certain adjustments or additions would be a good idea.

The commission was launched in August 2009 to recommend how the Model Rules should be updated in light of changing technology and the globalization of law practice. In December the commission issued a summary of the actions it has taken so far. See 28 Law. Man. Prof. Conduct 21.

Its next meeting and public hearing are scheduled for April 12-13 in Washington, D.C.

Access to Justice Proposals

In a Jan. 19 letter to the commission, the ABA Standing Committee on the Delivery of Legal Services asked the commission to recommend several changes in the rules that govern how lawyers use technology to seek potential clients. The committee urged:

• Eliminate Model Rule 7.2(b), which prohibits lawyers from paying others to recommend them except in a few circumstances. This prohibition, the committee said, has the effect of needlessly restricting lawyers' use of technology to broaden consumer's access to legal services.

• Amend Model Rule 7.1 so that the prohibition against making false and misleading statements about lawyers or their services applies only to communications “to a potential client.” The committee said this change would prevent overly broad applications of Rule 7.1. It pointed to a recent disciplinary proceeding in which the Virginia State Bar claims that a lawyer violated the rule in the way he blogged about his cases. See 27 Law. Man. Prof. Conduct 723. The committee also cited South Carolina Ethics Op. 09-10, which concluded that Rule 7.1 applies when lawyers “claim” their online profile.

• Change the commentary to Model Rule 7.3 to make clear that “solicitation” means “direct contact with a potential client.”

In his remarks at the hearing, Pierce said technology can help bring together “underemployed lawyers and the huge number of unrepresented citizens” if barriers in the current professional conduct rules are removed.

Getting rid of Rule 7.2(b), Pierce said, would permit lawyers to participate in innovative for-profit services that help bring lawyers and clients together. Clients would still have the core protections of the rules against solicitation, interference with professional judgment, and false and misleading statements, he stated.

Pierce said that while the committee applauds the work of lawyer referral services sponsored by bar associations and other nonprofit groups, the market needs the innovative energy of for-profit companies to bring together the “seriously underserved middle population” and lawyers who want them as clients.

Commission member George W. Jones Jr., of Sidley Austin in Washington, D.C., asked Pierce whether the committee had considered how Model Rule 5.4 impacts the ability to meet unmet legal needs. Rule 5.4, which addresses professional independence, states that lawyer may not share fees with nonlawyers or allow nonlawyers to own an interest in a law practice.

Pierce said the committee assumed that under its proposals the lawyer's payment to the third party could not take the form of a fee-split. ABA-approved lawyer referral services can receive a percentage of fees, but whether that payment should be permitted to for-profit services is a separate question, he said.

Not a ‘Squelching Influence.'

The proposal to eliminate Model Rule 7.2(b) came under fire from Ann Jacobs, who spoke on behalf of the ABA Standing Committee on Lawyer Information and Referral Service. Jacobs is a personal injury lawyer with Domnitz & Skemp in Milwaukee.

Jacobs acknowledged that technology has brought a tremendous increase in information about lawyers and law practice, but added that “with that access comes tremendous responsibility.” The protections in Rule 7.2(b) and 7.3 should not be watered down, she asserted.

Rule 7.2 has not been a “squelching influence” on the availability of information, and it has an essential role, including the prevention of kickbacks and ambulance chasing, she insisted.

Jacobs said that for the better part of a century the prohibitions now reflected in Rules 7.2(b) and 7.3 have been recognized as fundamental and long-standing. “Don't undermine 100 years of jurisprudence that has developed protections” for potential clients, she urged.

Thumbs Down From Commission

When the commission discussed the committee's proposals later that same day, Jones disagreed with the view that Rule 7.1 has been limited to statements made to potential clients. It applies to all statements about a lawyer or his services, he said.

Commissioner Judith S. Miller said she too didn't like the committee's proposed change to Rule 7.1. “The limitation sends the wrong message,” she declared. Miller is general counsel of the Bechtel Group in San Francisco.

Commissioner and New York University law professor Stephen Gillers characterized the proposed elimination of Rule 7.2 as allowing lawyers to pay lead generators a share of their fee, not just a flat fee.

That proposal is “quite remarkable,” he commented, saying that under current marketing rules it already is feasible to bring together people who need legal advice and lawyers who are willing to do that work.

After no one on the commission spoke in favor of the committee's recommendations, the commission rejected them without a formal vote.

In other discussion of marketing rules, the commission mulled over at length an idea, recommended in comments submitted by the Connecticut Bar Association, of requiring a so-called “lead generator” to affirmatively state that it is not recommending or endorsing the lawyer whose name it provides to a potential client.

Although several commissions objected to the proposal, an apparent majority tentatively endorsed the suggestion.

The commission also discussed reactions it received from other quarters criticizing its proposed definition of “solicitation” in a new comment to Model Rule 7.3. It did not end up embracing any of the suggested substitutions, however.

Technology Proposals Praised

At the public hearing, Reardon said that in her work with the Illinois Supreme Court Commission on Professionalism she has learned that many lawyers do not use technology effectively in their practice and fail to understand that the economic challenges they face have been wrought by technology.

If adopted, the commission's proposals on technology and confidentiality will go a long way toward countering the impression that lawyers may ignore technology, Reardon said.

She also predicted that the contemplated changes will encourage the development of better CLE programs on technology. Stating that continuing legal education providers want to develop programs that fit the Model Rules, Reardon predicted that the commission's proposed reforms will spur providers to develop courses that teach lawyers the benefits and not just the risks of technology.

Problem of Hacking

But David G. Ries, another speaker at the hearing, told the commission that there is real reason for lawyers to be scared about the impact of new technologies on lawyers' ability to preserve confidentiality. He practices with Thorp Redd & Armstrong in Pittsburgh and is co-author of Locked Down: Information Security for Lawyers, to be published in March by the ABA Law Practice Management Section.

To illustrate his point, Ries cited a recent story from Bloomberg News that reported on widespread hacking of law firms and described a meeting the FBI convened with the top 200 law firms in New York City last November to deal with the rising number of law firm intrusions. See “China-Based Hackers Target Law Firms to Get Secret Deal Data,” (Jan. 31, 2012).

Ries suggested that the comment to Model Rule 1.6 should remind lawyers that security requires “administrative, technical, and physical” safeguards. Many lawyers incorrectly view safeguards, he said, as merely keeping the doors locked or hiring an IT consultant. The comment should also remind lawyers that there is a continuing duty to review safeguards as technology, risks, and security measures develop, he remarked.

When the commission discussed the idea of adding a reference to “administrative, technical, and physical” safeguards, commissioner and University of Arizona law professor Theodore J. Schneyer said that “most lawyers would wrack their brain trying to figure out what these categories cover.”

Similarly, Jones suggested that “these words don't really tell anybody anything.” Without any groundswell of support for adding the language that Ries suggested, the commission let the idea drop.

Andrew S. Perlman, the Ethics 20/20 Commission's chief reporter, noted that the commission has been operating on the premise that it can't offer detailed guidance on technology because it would become outdated quickly. The commission envisions a website that could provide information about what precautions are needed, he noted. Perlman is a professor at Suffolk University law school in Boston.

How to Motivate Vendors

Another speaker on the subject of technology and confidentiality, Steven N. Hollman, urged the commission to require lawyers to use vendors that will comply with lawyers' obligations of confidentiality. Hollman, who chairs the ABA Science and Technology Section's task force on cloud computing, is with the Business & Technology Law Group in San Jose, Cal.

Such a rule, he said, would encourage lawyers' use of “cloud computing” and SaaS (software as a service), and would motivate vendors to protect confidentiality. As an example, Hollman posited that if Google understands that lawyers are required to use vendors that will help them meet their professional obligations, the company will pay attention to the security of “Google Docs.”

The commission didn't embrace this idea. It's a little odd to put the word “vendors” in a rule, according to commission co-chair Jamie S. Gorelick, of WilmerHale in Washington, D.C.

(Although the commission did not mention it, the issue of e-discovery vendors and confidentiality is percolating in a widely watched malpractice case in a California state court in which a company claims that its former counsel in a qui tam action failed to properly supervise production of documents to the federal government, with the alleged result that thousands of privileged or nonresponsive documents ended up in the hands of the qui tam plaintiffs. The litigation is still at an early stage, as it was initially removed to federal court before being remanded to state court in late October. J-M Mfg. Co. v. McDermott Will & Emery, Los Angeles Super. Ct., No. BC462832.)


During its meeting after the public hearing, the commission devoted hours to fine-tuning its proposals that it will present to the ABA delegates in August. In detailed discussions, commissioners painstakingly reviewed suggestions the commission received in its response to public comments, debated them, and determined whether to incorporate them in its own proposals.

For example, the commission decided to add a comment to Rule 1.6 stating that an inadvertent or unauthorized disclosure would not violate a lawyer's duty of confidentiality if the lawyer has taken reasonable precautions to prevent the disclosure.

In addition, it changed its mind about the wording of the commission's proposed update of Model Rule 4.4(b), which sets out a lawyer's obligations when an adversary mistakenly turns over confidential information.

Over a year ago, the commission decided to propose that the rule be revised to refer to information “that was not intended to be disclosed to the lawyer.” But at this meeting the commissioners reversed that decision, choosing to keep the rule's current language referring to information that is “inadvertently sent.”

The commission also debated some adjustments to its proposed models for rules on admission by motion and admission for practice pending admission.

For example, the commission decided to flatly recommend that lawyers be admitted on motion if they meet certain requirements and have practiced law for three of the past seven years, rather than putting those time periods in brackets to signify that they are merely suggested standards.

Regarding the rule on practice pending admission, the commission decided to modify its proposal to specify that lawyers may not take advantage of the rule while a disciplinary matter against them is pending elsewhere.


For More Information

The proposals offered by the Standing Committee on the Delivery of Legal Services can be viewed at

The commission's proposals can be viewed on its website at

The commission's Dec. 28 summary of its work is at

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