California Adopts Modified ABA Model Rules (1)

By Joyce E. Cutler

California joined the rest of the nation in approving a package of rules of professional conduct that bring the state more in line with model rules and recognize the unique nature of how lawyers are overseen in the state.

The California Supreme Court unanimously approved May 10 a first-in-a-generation revision to the rules after rejecting the first attempt that took 14 years to devise. Justices approved 27 rules as submitted and modified 42 rules, including copywriting changes and deleting commas, to regulations covering everything from fees and conflicts of interest.

“This is full panoply of new rules that conform not only with California current law but the law across the country,” Mark L. Tuft, partner in the San Francisco office of Cooper, White & Cooper LLP was a vice-chair of the original rules revision commission, told Bloomberg Law.

The rules represent “a major improvement so regulators and lawyers can speak in the same language on what their professional and legal duties are,” Tuft, who’s been involved for 17 years in initiatives to revise California’s rules, said May 11. “It’s a good start.”

The court left most of the rules intact. Justice’s approval is “like Christmas and the Fourth of July combined for me. I’m pretty excited,” said David Carr, a San Diego ethics lawyer and senior counsel at Klinedinst PC.

The court without comment denied the state bar’s request for a unique to California rule regarding a lawyer’s obligations in representing clients with diminished capacity.

Uniformity Achieved

The rules add some uniformity to the numbering to more closely track with the American Bar Association Model Rules numbering and compare with the other jurisdictions’ rules.

“Conforming our number system to national standards is a big improvement,” said Sean SeLegue, a partner in the San Francisco office of Arnold & Porter Kaye Scholer LLP, and a former chair of the state bar’s Committee on Professional Responsibility and Conduct.

The conformity ties into the national ABA standard and makes it easier for those not in California to find and understand the rules, SeLegue told Bloomberg Law.

California is the last state to remodel its lawyer conduct rules along the lines of the ABA templates.

“California is an outlier no more–at least when it comes to its ethics rules,” Michael E. McCabe Jr., McCabe Law LLC in Potomac, Md., said in a blog post.

The approval is a win for counsel who worked for years to revise the rules last changed in the early 1990s. The state bar in 2015 launched a second Commission for the Revision of the Rules of Professional Conduct after the California Supreme Court abruptly told the bar to go back to the drawing board in its years-long effort to update the state’s lawyer conduct rules. The revised rules were filed in March 2017.

California’s 250,000 licensed attorneys have dual masters – they’re licensed and disciplined by the California Supreme Court and are subject to the state’s Business & Professions Code and legislative fiat.

“We’ve always had dual control,” Carr said. “I compare it to a lonely planet in a double solar system being whipsawed” by the pull of two bodies.

Sex Distraction

The rule that gets the most attention is Rule 1.8.10 covering sexual relations with a current client, which is prohibited unless the personal relationship existed before the professional. The current rule prohibits sex as a quid pro quo for legal representation or if there was coercion, intimidation, or undue influence.

The rule applies when the client is an organization and the lawyer has relations with someone within the organization who regularly consults with the attorney, whether in-house or outside counsel. It’s also an instance where California law, at Bus. & Profs. Code Section 6106.9, also applies. Justices adopted the rule without change.

A second approved rule, Rule 8.4.1, makes lawyers responsible for even passive discrimination and harassment in their practice, including failing to act by discriminatory, harassing, or retaliating conduct by nonlawyers in their office.

“In terms of the practical impact, obviously the anti-discrimination rule, the sex with client rules, these things get a lot of publicity but that isn’t where most lawyers are going to have to change their practices,” Carr said.

The rules are effective in Nov. 1, a little less than six months for lawyers to learn about the new rules and comply, said Wendy Wen Yun Chang, a partner with Hinshaw & Culbertson LLP in Los Angeles.

“This is sufficient time for those who make the effort to learn about the changes and make any necessary adjustments. I am confident that there will be a significant amount of resources put out there designed to educate the bar about the new rules, what is new, what has changed, etc.,” Chang said in an email to Bloomberg Law.

Client Trust Funds

A big change comes from Rule 1.5, covering legal services fees and holding trusted funds for clients, which deserves much more attention and affects many more attorneys, especially criminal defense attorneys in small or solo practices, Carr said May 11.

Under the new 1.15, advanced fees are required to be placed in trust, “which is a pretty significant expansion of that obligation,” he said. “A lot of lawyers who might not have even had client trust accounts in the past are now going to have to open client trust accounts if they take an advance fees.”

The change from the current rule will especially affect smaller firms and solo practitioners and criminal practices that take flat fees, Carr said.

Another clarification comes in Rule 1.9, which covers a lawyer’s duty to former clients. The commentary explains the case law that provides for a very limited duty to former clients, “which was not a well-known concept before,” said SeLegue.

“I think clarity does reduce litigation,” SeLegue said.

Federal Conflicts

California’s laws on such issues as sanctuary cities and recreational marijuana tripped a return to the commission.

Rule 1.2.1 covers assisting, soliciting, or inducing violations. The court asked the commission for a revision “because it wanted us to work on a comment dealing with advice and deal assistance to consumers in compliance with California law that conflicts with federal law,” Tuft said.

The commission devised a revision that will go out for a 45-day comment period and return to the court, Tuft said.

To contact the reporter on this story: Joyce E. Cutler in San Francisco at jcutler@bloomberglaw.com

To contact the editor responsible for this story: S. Ethan Bowers at sbowers@bloomberglaw.com

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