A glimpse into the world of consumer-facing legal services providers

Yesterday, I had the pleasure of serving as a moderator at a CLE event in Nashville focused on developments in the world of consumer-facing legal services providers.  There are a world of companies – predominantly existing only online — that have an increasing presence in the lives of people in need of legal services and answers to their legal questions who, often otherwise, would not reach out directly to a lawyer to try to obtain help for their problems.

The full event was a 3 hour long seminar covering several topics, but the panel I moderated encompassed an hour of conversation with Bob Aicher of ZeekBeek, Matt Horn from Legal Services Link, and Dan Lear from Avvo.

Now, if you are reading this, you’re likely already familiar with the various aspects of Avvo’s footprint in the marketplace.  You may not know as much, however, about ZeekBeek or Legal Services Link.

In some ways, they do quite similar things but the approach is different.  Both operate as an online platform through which people in need of legal services can connect with lawyers who are willing to provide services.  ZeekBeek partners exclusively with state bar associations and, thus, in those states comes across as an entity that has the imprimatur of the state regulatory body and also — for a fee — provides its participating lawyers within a state a different platform for making referrals of work to other lawyers.  Legal Services Link monetizes its provision of a market place for consumers to ask questions and obtain legal advice and representation from participating lawyers by allowing lawyers to view questions for free but requiring lawyers who want to interact with the consumer by replying and answering their inquiries to pay an annual membership fee for that privilege.

While each of the three representatives had differing views on the topic of whether they versus those they compete with are able to do what they do in a way that the participating lawyers can be assured of compliance with the ethics rules, it was very interesting (though not surprising) to hear all three of them agree that the ethics rules that relate to their services are desperately in need of change.

It was a very interesting and engaging discussion.  The good news for you, if you are interested in checking it out, is that you can view the entire program by registering/purchasing it at this link from the TBA.  (As of now there is no way to just pay for the middle hour which was the program I moderated, but should that change I will update this post.)

 

North Carolina – Good intentions leading to a pretty seemingly bad rule.

So North Carolina has got quite a bit going on these days.  Last night UNC won the NCAA Men’s Basketball championship.  A few days ago, its general assembly kind of, sort of, repealed the bathroom bill that brought it much negative publicity and cost it some sporting events.  And, in March 2017, it adopted a first-of-its-kind ethics rule that seeks to require all lawyers — not just prosecutors — to reveal any evidence of the innocence of someone that comes into their possession after the person has been convicted.

Tennessee, I am proud to say, is among the “Sweet Sixteen” of other states that have adopted the ABA Model Rule 3.8(g) and (h) language that imposes this kind of duty upon prosecutors, but North Carolina’s act of going further to say that all attorneys have this obligation — at a mandatory level and when not doing so could somehow lead to discipline — seems very misguided to me.

Now because this is being written on the Internet, and because taking things out of context and ascribing intents and beliefs not intended to things written on the Internet is pretty much a sporting event itself these days, I feel beholden to make the point that — obviously I am not in favor of anyone being convicted of a crime they didn’t commit and I very much count myself in the category of folks who agree with the “it’s better that 10 guilty people be set free than 1 innocent person be imprisoned” line of thinking.  Also, I absolutely think that if an attorney comes across solid evidence that would indicate someone has been convicted of something they didn’t do, then an attorney ought to be encouraged to try to do something about that.

Nevertheless, I am not at all a fan of the idea of constructing an ethics rule that would require a lawyer to do so on pain of discipline.  Not even in the abstract because the architecture of such a rule would have to weigh in the balance too many other ethical obligations a lawyer might have that would compete.  I’m also not a fan of North Carolina’s specific effort to do so — North Carolina RPC 8.6 — which actually does attempt to  balance those competing obligations and in so doing, I think, actually proves the inherent pointlessness of this line of proposed rulemaking.

So, step by step, here is black-letter of North Carolina’s Rule 8.6.  The first paragraph establishes the initial scope of the duty.

(a) Subject to paragraph (b), when a lawyer knows of credible evidence or information, including evidence or information otherwise protected by Rule 1.6, that creates a reasonable likelihood that a defendant did not commit the offense for which the defendant was convicted, the lawyer shall promptly disclose that evidence or information to the prosecutorial authority for the jurisdiction in which the defendant was convicted and to North Carolina Office of Indigent Defense Services or, if appropriate, the federal public defender for the district of conviction.

So, as a starting point, this duty would override obligations of client confidentiality that would otherwise require a lawyer to remain quiet.  But obviously that creates some problems.  So, the next paragraph carves out exceptions to the obligation.

(b) Notwithstanding paragraph (a), a lawyer shall not disclose evidence or information if:

(1) the evidence or information is protected from disclosure by law, court order, or 27 N.C. Admin. Code Ch. 1B §.0129;

(2) disclosure would criminally implicate a current or former client or otherwise substantially prejudice a current or former client’s interests; or

(3) disclosure would violate the attorney-client privilege applicable to communications between the lawyer and a current or former client.

So, the exceptions still do not allow Rule 1.6 concerns to prevent disclosure (unless, I guess, breaching certain 1.6 client confidences would be considered “otherwise substantially prejudic[ing] a current… client’s interests”), but the exceptions to protect the subset of Rule 1.6 communications that would also be protected as attorney-client privilege and protect a lawyer in the event that complying with Rule 8.6(a) would require them to put one of their own clients or former clients in jeopardy of criminal prosecution.  Thus, Rule 8.6(b) essentially makes certain that Rule 8.6(a) will not apply to the most reasonably likely scenarios in which any lawyer who isn’t a prosecutor is going to learn of information indicating that someone has been wrongfully convicted.

The next paragraph, for good measure, also provides the same kind of “good faith”/exercise of professional judgment safeguard in place for private lawyers that Rule 3.8 provides for prosecutors:

(c) A lawyer who in good faith concludes that information is not subject to disclosure under this rule does not violate the rule even if that conclusion is subsequently determined to be erroneous.

The final paragraph then proceeds to make clear that no duty to disclose arises when the lawyer knows that the right people essentially already know.

(d) This rule does not require disclosure if the lawyer knows an appropriate governmental authority, the convicted defendant, or the defendant’s lawyer already possesses the information.

So, in the end, and as Professor Bruce Green is quoted as saying in a few of the news articles about the development, “it carves out so much that it’s hard to known when it will apply.”  I think that’s a kinder way of saying:  Other than whatever encouraging effect it might have on some small set of lawyers who wouldn’t otherwise step up and do the right thing to let authorities know about something if doing so wouldn’t violate their duty to another client or former client, this rule is not really going to accomplish much and is probably largely unenforceable.

And while that encouraging effect might be a laudable goal, pursuing it through this kind of rule seems the wrong way to go about it.  If you are truly going to insist on something like this in a jurisdiction, it would be better pursued as a purely aspirational rule.  We already have one of those with respect to the obligation to do pro bono.

Friday follow-up: Puff, puff, PA’s overreach

Couple of quick hits (pun wasn’t really intended but just sort of happened) for this Friday.

A little more than a month ago, I wrote about an ethics opinion out of Ohio that created a real dilemma for lawyers looking to advise businesses related to the medical marijuana industry that was going to become legal in Ohio on September 8, 2016.  Under the analysis in the ethics opinion, Ohio’s RPC 1.2(d) prohibited lawyers from assisting people with such business endeavors.

Moving with what seemed like an unusual amount of speed when it comes to rule-making endeavors (and entirely contrary to the conventional wisdom that pot slows things down), the Ohio Supreme Court has adopted a revision to its RPC 1.2(d) to specifically address the situation and permit Ohio attorneys to assist clients in this industry.  The new rule language reads:

(d)(1)  A lawyer shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is illegal or fraudulent.  A lawyer may discuss the legal consequences of any proposed course of conduct with a client and may counsel or assist a client in making a good faith effort to determine the validity, scope, meaning, or application of the law.

(2)  A lawyer may counsel or assist a client regarding conduct expressly permitted under Sub. H.B. 523 of the 131st General Assembly authorizing the use of marijuana for medical purposes and any state statutes, rules, orders, or other provisions implementing the act.  In these circumstances, the lawyer shall advise the client regarding related federal law.

Now, I totally understand the addition of (d)(2), though it is the kind of hyper-specific revision to the language of a rule that makes me cringe on the inside.  But, I don’t quite understand why the Ohio court changed the language of (d)(1) to replace “criminal” with “illegal.”  Wonder what that is all about exactly and what they would articulate to be the difference in those two terms?

About a week before I wrote about the Ohio marijuana opinion, I wrote at length about a South Carolina ethics opinion that served as an exemplar of the kind of ethics opinion I anticipated a number of other states might write about the problems with  Avvo Legal Services.  Well, this month another state has added its voice with an ethics opinion pointing out ethical dilemmas for lawyers that might look to do business with that service and similar services. Pennsylvania has issued Formal Op. 2016-200: Ethical Considerations Relating to Participation in Fixed Fee Limited Scope Legal Services Referral Programs.  Ironically though, I can’t help reading the Pennsylvania opinion as being a bit more of an indictment of certain kinds of thinking in our profession than it is an indictment of the ethics problems with Avvo Legal Services.

I plan to write about this Pennsylvania opinion in more detail later — and can’t give you a link to go read it yourself because Pennsylvania still tries to keep its ethics opinions limited to members-eyes only in the online world.  (That is, in and of itself, a weird and outdated way of thinking altogether but that too would be a topic for another day.)

For today, I’ll simply preview that the fundamental problem I currently have with the Pennsylvania opinion is that it overreaches and comes across as indicative of a line of inflexible thinking that seems to be entirely out of touch with what is actually going on in the marketplace and that is mostly antithetical to innovation altogether.

Let me offer one example to hopefully pique your curiosity if not whet your appetite, it comes from Section IX of the opinion, titled “Access to Legal Services” —

Operators of FFLS programs argue that “unbundling” legal services reduces the cost to clients, thereby making legal services more accessible.  Expanding access to legal services is, of course, an important goal that all lawyers, and the organized Bar, should support.  However, the manner in which these FFLS programs currently operate raises concerns about whether they advance the goal of expanding access to legal services.  Further, compliance with the RPCs should not be considered inconsistent with the goal of facilitating greater access to legal services.  Any lawyer can offer “unbundled” or “limited scope” legal services at, or even below, the rates described by an FFLS program, provided the lawyer can do so in a manner that complies with his or her professional and ethical obligations, including the obligation of competence (see RPC 1.1) and full disclosure of and informed consent to any limitations on the scope of the legal services rendered.  If a lawyer cannot fulfill those obligations working outside the scope of an FFLS program, he or she almost certainly would not be able to do so working within such a program.

Really?

Two developments from the ABA Annual Meeting – which one will have the bigger impact?

The 2016 ABA Annual Meeting continues today and tomorrow but the two actions for which it likely will be most remembered have already transpired.  One happened Monday when, after much public discussion and multiple revisions to the proposal along the way, a final set of proposed revisions to ABA Model Rule 8.4 was approved in a voice vote by the ABA House of Delegates.   As this short article at The ABA Journal makes clear, after all of the criticism over many months, no one requested time to speak against the final version of the proposal.  You can see the full, final version of Revised Resolution 109 that passed here.

I’ve written twice before about earlier versions of the proposal here and here.  The action adds a new RPC 8.4(g) designed to make harassment and discriminatory conduct by lawyers connected to their law practice unethical.  A last set of revisions were made to the proposal in just the last month to change the triggering conduct from potential strict liability of “harass or discriminate on the basis of,” to a more favorable mens rea standard of “engage in conduct that the lawyer knows or reasonably should know is harassment or discrimination on the basis of” and to clarify that “legitimate advice or advocacy consistent with these Rules” would not be prohibited by moving the language protecting such conduct from the comment up into the black-letter rule itself.

It is certainly a significant and historic event for the ABA to have passed this rule revision, and I don’t mean to downplay the significance from the standpoint of the ABA as the largest lawyer organization in the United States.  But, what will be the impact exactly of this action?  The ABA Model Rules do not, of course, actually govern anyone anywhere.  They are, however, a standard setter and often result over time in adoption and implementation in other U.S. jurisdictions.

Will this change to RPC 8.4 work its way through the states?  Well, it is kind of hard to say because one of the big advocacy points of the ABA change was the assertion that 20 states already had a form of the anti-discrimination provision in their version of the rule, so as a starting point this is a change that only targets 30 states.  As a lawyer who practices in the deep South, I will simply state my skepticism about how quickly my own state and the various bright red states around me will move to revise a version of RPC 8.4 not already prohibiting harassment and discrimination.  I’d love to be proven wrong about that though.

The second potentially historic development was the final work product from the ABA Commission on the Future of Legal Services – The Report on the Future of Legal Services in The United States, and the establishment of the Center on Innovation.  In the words of the Commission, the Center on Innovation will be something like an R&D division for the legal industry.  The creation of the Center has already been approved by the Board of Governors, but what will it do — and what will be off-limits to it?  According to the piece at The ABA Journal, the Center’s “primary tasks will include assisting law firms interested in introducing new approaches to their practices, studying innovations in legal services delivery in other countries, and developing training programs for law students interested in innovative law practice.”

But, given the ABA’s problematic history over the years with efforts at exploring nonlawyer ownership of law firms, it is hard to figure out how “studying innovations in legal services delivery in other countries,”  truly leads to anything other than yet another obvious conclusion that the innovations in the delivery of legal services occurring in other countries pretty much involve nonlawyer ownership of law firms.  It doesn’t require much additional study to grasp that point.

Lest I end up sounding completely like Eeyore today, the creation of the Center does not have to be the sole lasting legacy of the ABA Commission on the Future of Legal Services, one of the other recommendations the final report encourages should be implemented — involving making courts more accessible by doing things such as embracing online dispute resolution and self-service kiosk centers — might actually have the most significant potential to assist with perceived, and real, access to justice gaps in the United States, even though it might not be of any benefit to the legal profession.

Here, for those who don’t necessarily have a moment right now to read the full 100+ page report are the 12 recommendations made by the Commission:

RECOMMENDATION 1. The legal profession should support the goal of providing some form of effective assistance for essential civil legal needs to all persons otherwise unable to afford a lawyer.

RECOMMENDATION 2. Courts should consider regulatory innovations in the area of legal services delivery. 2.1. Courts should consider adopting the ABA Model Regulatory Objectives for the Provision of Legal Services. 2.2. Courts should examine, and if they deem appropriate and beneficial to providing greater access to competent legal services, adopt rules and procedures for judicially-authorized-and-regulated legal services providers. 2.3. States should explore how legal services are delivered by entities that employ new technologies and internet-based platforms and then assess the benefits and risks to the public associated with those services. 2.4. Continued exploration of alternative business structures (ABS) will be useful, and where ABS is allowed, evidence and data regarding the risks and benefits associated with these entities should be developed and assessed.

RECOMMENDATION 3. All members of the legal profession should keep abreast of relevant technologies.

RECOMMENDATION 4. Individuals should have regular legal checkups, and the ABA should create guidelines for lawyers, bar associations, and others who develop and administer such checkups.

RECOMMENDATION 5. Courts should be accessible, user-centric, and welcoming to all litigants, while ensuring fairness, impartiality, and due process. 5.1. Physical and virtual access to courts should be expanded. 5.2. Courts should consider streamlining litigation processes through uniform, plainlanguage forms and, where appropriate, expedited litigation procedures. 5.3 Multilingual written materials should be adopted by courts, and the availability of qualified translators and interpreters should be expanded. 5.4. Court-annexed online dispute resolution systems should be piloted and, as appropriate, expanded.

RECOMMENDATION 6. The ABA should establish a Center for Innovation.

RECOMMENDATION 7. The legal profession should partner with other disciplines and the public for insights about innovating the delivery of legal services. 7.1. Increased collaboration with other disciplines can help to improve access to legal services. 7.2. Law schools and bar associations, including the ABA, should offer more continuing legal education and other opportunities for lawyers to study entrepreneurship, innovation, the business and economics of law practice, and other relevant disciplines.

RECOMMENDATION 8. The legal profession should adopt methods, policies, standards, and practices to best advance diversity and inclusion.

RECOMMENDATION 9. The criminal justice system should be reformed. 9.1. The Commission endorses reforms proposed by the ABA Justice Kennedy Commission and others. 9.2. Administrative fines and fees should be adjusted to avoid a disproportionate impact on the poor and to avoid incarceration due to nonpayment of fines and fees. 9.3. Courts should encourage the creation of programs to provide training and mentoring for those who are incarcerated with a goal of easing re-entry into society as productive and law-abiding citizens.9.4. Minor offenses should be decriminalized to help alleviate racial discrepancies and over-incarceration. 9.5. Public defender offices must be funded at levels that ensure appropriate caseloads.

RECOMMENDATION 10. Resources should be vastly expanded to support long-standing efforts that have proven successful in addressing the public’s unmet needs for legal services. 10.1. Legal aid and pro bono efforts must be expanded, fully-funded, and better-promoted. 10.2. Public education about how to access legal services should be widely offered by the ABA, bar associations, courts, lawyers, legal services providers, and law schools.

RECOMMENDATION 11. Outcomes derived from any established or new models for the delivery of legal services must be measured to evaluate effectiveness in fulfilling regulatory objectives.

RECOMMENDATION 12. The ABA and other bar associations should make the examination of the future of legal services part of their ongoing strategic long-range planning.

 

“Cases Without Counsel” study confirms the obvious but also raises more subtle dilemmas

If all you manage to do was read the headline from the ABA Journal online story today — “Self-represented litigants perceive bias and disadvantage in court process, report finds,” your reaction will likely be limited to “Duh.”  But, there is much more that can be gleaned from this “Cases Without Counsel” study and report that the Institute for the Advancement of the American Legal System has put out than confirmation of obvious suspicions.  The report includes findings and recommendations learned from the experiences of more than 125 self-represented litigants in family law matters in four different states, including my own state of Tennessee.  The group also interviewed nearly 50 other players in the systems (judicial and non-judicial) who regularly interact with self-represented litigants, but not any opposing counsel.

As to the headline, of course someone who seeks to represent themselves is going to see the way the system is set up as putting them at a disadvantage, and, of course, they are going to think that the deck is stacked against them in favor of an adversary who has a lawyer.  The lawyer (hopefully) knows what they are doing and, thus, speaks the language of the court and, more likely than not, will at least appear to have a cordial, professional relationship with the presiding judge.  All of those factors are discussed by interviewees in the report and all of them, not surprisingly, affect the perception of whether the result was fair and just.  One study participant explains quite vividly how even what likely is intended by judges to be an effort at being helpful — encouraging a self-represented litigant at a disadvantage to go get a lawyer — can be perceived as discouraging if not insidious:

She [the judge] actually told me twice that I needed to get a lawyer….She made it sound like that was her ruling — that I had to get a lawyer or they weren’t going to welcome me back into court.  She sided with him and I felt like it was because he had the lawyer, because she told me twice I needed to get one.

I’ve a timely example of this from my own life.  As I know I’ve mentioned before, Tennessee’s bar is not unified and the Tennessee Bar Association is just a voluntary membership organization.  I get telephone calls and emails from people who are unhappy with a lawyer and find on the web that I am the Chair of the TBA Standing Committee on Ethics and Professional Responsibility.  They reach out to me thinking I’m in the business of disciplining lawyers – I end up explaining to them that I’m not, that I actually represent lawyers and law firms – but I let them know how to get in touch with the Tennessee Board of Professional Responsibility, if they want to, which is the regulatory/disciplinary arm in our state.  Yesterday I received such a call, but the complaint – which the caller managed to communicate before I could truly suss out the situation and cut them off politely to point them in the right direction — was that opposing counsel in their case had information but was waiting to turn it over until the court-established deadline for doing so.  The caller wanted to know whether opposing counsel could get in trouble for that since surely the lawyer is supposed to tell any one who is self-represented information learned it or documents gathered as soon as the opposing lawyer learned it.  This person may not end up calling the BPR after hearing me say, “no, generally speaking, the lawyer on the other side of your case owes most of their duties to their client, some more to the court, but a very small number to you as their client’s adversary,” (or probably words to that effect but that weren’t nearly as well-articulated).

The report generated from the study sheds a good bit of light on the complexities involved in how people end up having to (or choosing to) navigate the court system on their own in family law cases.  It clearly confirms another piece of information that is obvious — while not the “only” factor, actual (or perceived) lack of ability to afford a lawyer is beyond question the primary factor that leaves people to navigate the court system on their own.

But, that non the “only” factor still deserves real discussion.  Almost 25% percent of the participants in the study actually “expressed a preference to handle the matter without attorney representation.”  And nearly 20% of the participants in the study also indicated that past bad experiences with attorneys influenced their decision to not hire a lawyer for their family law matter.

This report is another data point helping make clear that trying to “solve” the problem of self-representation, which is often described as an access to justice problem but is really a second-level version of what is traditionally thought of as the original access-to-justice problem — delivering legal services to people who are truly indigent — is not something for which there is going to be one “silver bullet” solution in the form of changes to the ethics rules.

The full report is absolutely worth adding to your reading pile and you can get it here.  Digesting the full report does leave me, for the first time, questioning whether the absolute prohibition on contingent fee representation in divorce cases set out in Model Rule 1.5(d)(1) ought to be reevaluated.

Independence of professional judgment, and other thoughts spurred by the ABA Commission on the Future of Legal Services

April 2016 has brought another iteration of a seemingly, endless, (yet kind of potentially pointless unless you think the politics of the situation will somehow play out differently from the past) debate: whether some entity within the ABA is attempting to usher into reality a world in which people other than lawyers will be allowed to have ownership interests in law firms?

The raising of the mere possibility of outside investment in law firms by people who are not lawyers incites debate and inflames passion among lawyers immediately.  Not all lawyers of course.  Some just go to work, represent their clients, get stuff done, go home, lather, rinse & repeat.  But lawyers who are active in state bar associations certainly get pretty revved up, as do many ethics nerds like me.

The ABA Commission on the Future of Legal Services put out an issues paper on April 8, 2016 for comment that has stirred this topic up again.  You can read it here.  The deadline for comments (if you are so inclined) is tomorrow.  About a week before putting out the paper discussing Alternative Business Structures, the same Commission put out an issues paper focused on the world of “unregulated” entities operating as legal service providers.  That issues paper also makes for interesting reading and you can get it here.

It should be no surprise that these two topics are being addressed in close proximity by the ABA Commission because they are relatively intertwined in the minds of many people.  (And, for clarity, I have put “unregulated” in quotes because what the ABA Commission means when it uses that term is not regulated by courts in the way that lawyers practicing law are regulated.  Entities that provide legal services but that are owned and operated by people other than lawyers are, of course, regulated to some extent by agencies such as the Federal Trade Commission.)

Unlike the comment deadline on the Alternative Business Structures paper, the comment deadline on the paper regarding what to do about unregulated LSPs has passed.  I’ve spent a bit of time reading some but not all of the comments, and you can find links to all of the comments here.

For those who don’t want to go read all of the original source material, I think a fair description/takeaway/summary of the two ABA issues papers is:

  1.  The ABA Commission is likely thinking pretty strongly about trying to propose that courts, through entity regulation and using the Model Regulatory Objectives approved by the ABA House of Delegates in Resolution 105, attempt to exert some control over entities such as Legal Zoom and Avvo and others that provide services that would certainly be treated as the practice of law if performed by a lawyer.
  2. The ABA Commission is certainly trying to spur another conversation about whether business models presently prohibited because of RPC 5.4 throughout the U.S. (other than Washington, D.C.) might be a worthwhile endeavor.  And, the Commission’s issues paper has managed to lay out the potential benefits and risks of doing so in a pretty fair, even-handed manner.

For those that cannot remember off the top of their head, ABA Model Rule 5.4 is the ethics rule which (a) generally prevents lawyers from sharing fees with those who are not lawyers; (b) prohibits lawyers from being in partnerships with nonlawyers if any of the partnership’s activities involve the practice of law; (c) mandates that a lawyer who is letting someone other than their client pay them cannot let that other person “direct or regulate the lawyer’s professional judgment in rendering such legal services,” and (d) prevents lawyers from practicing law in certain business entity forms if a nonlawyer has an ownership interest or serves in certain roles.   [N.B. – sorry, I tried.  Once I started talking about this specific rule, “nonlawyer” as a term became unavoidable.]

I’m not sure that my thoughts on these issues are fully-baked as of yet, but I think that each of the following six positions are reasonable ones to have:

  1.  Maintaining independence of professional judgment is a core principle of the legal profession, but that doesn’t mean that the conditions in which lawyers work have to be sanitized so as to try to free lawyers from temptations.  We already allow quite a few things under the ethics rules that can create temptations for lawyers to allow others to control or interfere with their professional judgment or that, at minimum, place severe negative economic pressure on the exercise of independent professional judgment.  We let lawyers be hired by, and paid by, insurance companies for the purpose of representing policyholders.  Those insurance companies establish guidelines for how those lawyers are supposed to go about handling the litigation; they scrutinize and reject bills if the right billing codes are not used by the lawyers; and they ultimately place the pressure on lawyers who think the guidelines and restrictions go too far to exercise their independent professional judgment to do what is necessary to represent the client’s interests even if it sometimes means they end up not getting paid for time and effort that needed to be done.  Our ethics rules have no problem with lawyers being employed as in-house counsel even though they are constantly at risk of having their employer (and only client) potentially pressure them to set aside their professional judgment and do things that help drive profits.  Our ethics rules have long allowed lawyers to handle cases on a contingent fee basis.  Our ethics rules do not prohibit law firms from imposing requirements on how many billable hours must be logged to stay employed. Sometimes the strongest principles are those that survive despite temptations.
  2. Allowing people other than lawyers to invest in law firms or otherwise be owners or stakeholders in law firms is not going to increase access to justice among those who cannot afford legal services.  It’s just not, and people should just stop already with the effort to claim that the reason it should be considered is because of how it will help as an access to justice initiative.
  3. Expanding on the Washington, D.C. approach to allow people other than lawyers to be partners in law firms or to have a minority ownership interest in the firm as long as they agree to abide by the lawyer ethics rules will neither create Armageddon, nor create any more economic pressure on lawyers than already exists from items discussed in point #1.
  4. If you aren’t a lawyer, there is a fairly compelling logic to the notion that the limit of regulation that should be imposed by courts or by lawyers as officers of courts on “unregulated” LSPs should be that such entities and the people involved with them cannot hold themselves out as if they were a lawyer.
  5. On the other hand, if you are a lawyer, it is reasonable to believe that the restriction identified in #4 alone is not sufficient.  There has to be some line over which LSPs cannot cross.  This is true if for no other reason than that the regulations lawyers have to endure are significantly more restrictive than the regulations imposed by agencies like the FTC and similar state regulatory agencies, and those more restrictive regulations render competition in certain legal services entirely unfair.
  6. It is silly for RPC 5.4(d)(2) to only allow someone who is not a lawyer to be an officer or have a position of similar responsibility (i.e. Chief Marketing Officer, or CFO, or COO) in a law firm if the law firm is organized as a corporation.  I cannot think of any legitimate reason that a law firm organized as a PLLC or an LLP can’t have an accountant serving as CFO but a law firm organized as a Professional Corporation should.  (And, for this last thought I owe Lynda Shely thanks for reminding me while we were in Austin that the rule actually says this.)

What do you think?  Are any of these six positions above not reasonable ones to have?  I almost never solicit input in the comments, but have at me if I’ve lost the plot.

 

 

ABA Law Connect post-mortem. ♫ Five. Five dollar. Five dollar not long. ♫

This is going to be a short update offered on a Friday for any weekend reading needs you may be facing.

A bit back (on Back to the Future day actually) I mentioned (almost as only an aside) the pilot project that the ABA was launching in cooperation with Rocket Lawyer to offer a limited-scope representation service where consumers of legal services could seek a quick answer to a specific legal question, and a follow up, from participating lawyers for $4.95.

Yesterday, The American Lawyer (which usually has its stuff behind a firewall) put up a publicly-available piece about the ABA’s decision to walk away from the joint venture.  Although just coming to light now, the American Lawyer piece indicates that the ABA dropped the Rocket Lawyer partnership in January 2016.

The fact that this fizzled out as quickly as it did could be a real indication of where lines may be drawn that simply cannot be overcome in the near future — which is a sentiment you could glean from one of the quotes from the Executive Director of the California State Bar near the end of the piece — or it may just be an anomalous event heavily influenced by other circumstances.  It, of course, cannot help but be connected in terms of timing at least (as The American Lawyer piece rightly noticed) to the contentious proceedings in the ABA House of Delegates over the adoption of proposed guidelines for states to use in seeking to regulate the conduct of nontraditional legal providers.

Either way, any post-mortem on ABA Law Connect ought to be a useful opportunity to make what should be a fundamental, and non-controversial, point.  The idea of any service where a lawyer makes herself available to answer a discrete question from a client, without a continuing obligation to provide further representation, is absolutely something that can be done in compliance with the ethics rules in any jurisdiction that a rule in place patterned upon ABA Model Rule 1.2(c).  That rule provides:

A lawyer may limit the scope of the representation if the limitation is reasonable under the circumstances and the client gives informed consent.

The primary fly-in-the-ointment in any given proposed limited-scope situation is whether a limitation is “reasonable.”  In the words that show up in Comment [7] to RPC 1.2 (albeit only with reference to a not-so-state-of-the-art method of communication):

If, for example, a client’s objective is limited to securing general information about the law the client needs in order to handle a common and typically uncomplicated legal problem, the lawyer and client may agree that the lawyer’s services will be limited to a brief telephone consultation.  Such a limitation, however, would not be reasonable if the time allotted was not sufficient to yield advice upon which the client could rely.

Presumably, ABA Law Connect was set up so that its underlying agreements (whether click-wrap or otherwise) had all participants involved acknowledging that there may be some questions for which answers cannot be provided in a limited scope representation universe because they are too complicated.

The other thorny issue that can often make or break participation by a lawyer in an arrangement designed to provide a high-volume of limited-scope representations is conflicts.  While the ethics rules contemplate the ability to limit the scope of a representation, the limited-scope client is still a client for purposes of RPC 1.7 and then becomes a former client for purposes of RPC 1.9.

The ABA Model Rules, already provide relief for lawyers from this conflict burden as long as they are providing these kind of “short-term limited legal services” through a “program sponsored by a nonprofit organization or court.”  (ABA Model Rule 6.5.)  The Rocket Lawyers of the world, however, are in the business of being for-profit endeavors and, thus, cannot offer the limited conflict of interest exposure that can be offered by the same bar associations that denounced ABA Law Connect as jeopardizing their revenue stream.

Pursuing a popular cause? Crowdsourcing payment of your fees may be an option for your client.

Some time ago, I wrote a bit about how existing ethics rules make attempting to use Kickstarter to launch a law firm not a viable option.  The primary problem with using crowdsourcing to raise funds to start a law practice is the prohibition in the ethics rules on nonlawyer ownership or investment in law firms.

Having someone other than a client pay the fees and expenses of an attorney, however, is a concept that the ethics rules have long acknowledged, permitted, and embraced as long as certain safeguards are in place — primarily measures to make certain the attorney does not permit the person paying the fees to call the shots or impact the lawyer’s independent professional judgment.

Thus, it should come as no surprise to hear that the use of crowdsourcing platforms to raise money to pay for attorney fees is permitted by the ethics rules as long as the same kinds of safeguards are in place.  Yet, given that new technologies can sometimes lead bodies that draft ethics opinions to lose sight of the “old wine in a new bottle” aspect of some questions, it is always refreshing to read a well-written ethics opinion that gets the answer to such a question correct.

And that is exactly what the Philadelphia Bar Association’s Professional Guidance Committee offers in Opinion 2015-6.  And to make matters even better, Opinion 2015-6 does so in the context of educating the lawyer who made the initial inquiry that s/he can accomplish the goal but not in a fashion different from what s/he initially contemplated.

Opinion 2015-6 starts out answering an inquiry from a lawyer who is contemplating representing a client who cannot afford to pay a fee in pursuit of litigation against a government entity on a cause of action that would not include damages but where the possibility exists for a statutory attorney fee award.  The lawyer’s proposal in requesting the opinion was:

to solicit compensation for his or her work on a crowdfunding platform, an internet site that enables users to post information about a project and solicit financial contributions from persons who believe the project to be a worthy cause.  The inquirer would publicize the anticipated litigation on such a website and solicit contributions to serve as his or her fee.

The lawyer’s inquiry also explained that any contract with the client would make clear that money obtained from crowdfunding would belong to the lawyer under any circumstances.  Before working through the ethical issues implicated by, and the one real flaw associated with, the specific proposal, Opinion 2015-6 offered highly practical, and ultimately helpful, advice about the existence of an alternative that should work much better under the guidance the rest of the opinion will provide:

It is possible to raise funds on a crowdfunding site to support litigation, either by paying lawyers’ fees or expenses or both, but to hold the funds raised in some sort of trust arrangement and pay them out only as earned or incurred.

After teeing up the existence of this alternative, to which it returns in its discussion about the ethical requirement for reasonableness of fees, the opinion works through the traditional concept under the ethics rules permitting someone other than the client to pay an attorney’s fees as long as the safeguards imposed by RPC 1.8(f) are met.  The opinion then addresses the reality that, in order to avoid violating RPC 1.6, the client will have to give consent to any disclosures about the case that would be made in connection with seeking to raise funds from public supporters on any such site.

The longest portion of the opinion, however, involves working through why having the money raised be the property of the lawyer creates ethical problems — and simultaneously why the contrasting alternative approach where the funds raised belong to the client (or even to a separate entity created on the client’s behalf) — is a much sounder ethical approach for lawyers.

We suspect that the inquirer anticipates that the amount raised will total far less than he would expect to be paid if the matter takes as long as he or she now anticipates, he or she spends the total number of hours now anticipated and if those hours were compensated at average rates of pay in the area.  However, it may not turn out that way…. The litigation could end quickly, either favorably or not; before the litigation’s end the inquirer may seek to withdraw or the client may wish to discharge him; or the inquire may or may not succeed in seeking the payment of fees and expenses under an applicable fee shifting statute…. Without knowing how much was raised, it would therefore be difficult to determine whether or not the fees would be clearly excessive….

Opinion 2015-6 then proceeds to explain the kind of agreement attorney should enter into with client to pursue such an endeavor so as to avoid the RPC 1.5 concerns:

First, the fee arrangement should include terms which describe the lawyer’s obligations including the lawyer’s obligation to remain in the case, assuming the client wishes him to do so, until its conclusion or until some other point at which retention of the total fees paid would not constitute an excessive fee.  For example, the fee arrangement with the client could state that the inquirer is obligated to remain in the representation until the time expended reaches a total figure such that the total fee paid is reasonable in light of that time expended.

Second, the arrangement should require that the amount raised be placed in a trust account established under Rule 1.15 until those amounts are earned in accordance with the terms of the final fee agreement.  Until such time that it is determined that the fee is actually earned, the monies raised constitute Rule 1.15 funds and should be held separate from the lawyer’s own property.

The best part of the Philadelphia committee’s willingness to proffer such guidance is that it makes this kind of crowdfunding endeavor practically much more viable in terms of fundraising.  One would anticipate that the average person would be more likely to throw some money toward an impecunious client than a lawyer representing that client.  But even if the client in question would not qualify as impecunious, having the person who is the face of whatever cause is being pursued as the person making the plea for funds that can be used to pay an attorney seems like a rich vein of opportunity.  Particularly so, given how divided the public is on so many polarizing issues and how fervently each side feels on a variety of issues, such that the number of “causes” that could be popular enough to generate ample fundraising is likely larger than you might otherwise think.

And, I’m certainly no tax lawyer, but depending on the nature of the cause to be pursued, I would guess the possibilities exist for the creation not only of entities separate from the client who would be the recipient of the funds raised and then paid on the client’s behalf to an attorney but also of even entities that might qualify as non-profits in terms of the “mission” of the litigation.

(One caveat worth referencing is that in any jurisdiction in which the mostly outdated concepts of champerty, maintenance, or barratry are still alive and kicking, an attorney would be wise to assist a client in working through whether any of those common law doctrines might offer some risk to an otherwise potentially successful crowdfunding endeavor.)

[Edited to add: Crowdsourcing also works for editing purposes.  Thank you kind reader for catching my significant error which is now corrected above.]

A duty to ask: Another of the unintended consequences of unbundling

Yesterday, the ABA Standing Committee on Ethics and Professional Responsibility issued its latest ethics opinion, Formal Opinion 472, “Communication with Person Receiving Limited-Scope Legal Services.”  On the whole, it isn’t a bad opinion.  It is well-constructed, addresses multiple topics that seem ripe for discussion, and clearly is the product of a lot of thought and consideration.

The main topic it seeks to address involves a situation that doesn’t fit nicely into traditional models – the use of the authority under RPC 1.2(c) to provide limited scope services to a client to provide what are usually referred to as “unbundled” legal services and whether/when a lawyer on the other side can treat the litigant as unrepresented for purposes of RPC 4.3 versus when RPC 4.2 applies.

RPC 1.2(c) wasn’t originally a rule designed to necessarily encourage unbundling, especially not in the litigation context, but that is a place that it has gone.  As the ABA Formal Opinion explains:

Limited-scope representation may include assisting a litigant who is appearing before a tribunal pro se, by drafting or reviewing one or more documents to be submitted in the proceeding.  “This is a form of ‘unbundling’ of legal services, whereby a lawyer performs only specific, limited tasks instead of handling all aspects of a matter.”

In Tennessee, there was a proposal a few years ago that would have involved rule changes on the civil procedure side to try to address the reality of problems with limited scope representations in litigation proceedings.  Concerns were expressed that judges might not let lawyers withdraw in accordance with terms of a limited scope representation. If memory serves, the proposal would have required lawyers in such situations to file a notice of appearance that revealed that the representation essentially had an expiration date and then would have permitted the lawyer to file a notice of withdrawal that the court would have no discretion to overrule once complete.  There were voices in opposition to aspects of the proposed rule, ironically, to make the point that it would truly make recipients of such services into second class citizens as the party on the other side would be fully aware that they could likely paper to death the lawyer in the short term to levy pressure or could simply hunker down and wait the inevitable withdrawal.  It probably was a bad rule and ultimately was not adopted.

This ABA opinion probably will be viewed in the future as a bad opinion, and I already wish it hadn’t been issued in this form.  Usually an ethics opinion that exhorts the fact that the ethics rules are “rules of reason and must be construed and applied ‘with reference to the purposes of legal representation and the law itself,'” can be counted upon to reach a practical, well-measured result.

I have no doubt the authors believe they did so here, but they squarely put the onus on the attorney who is undertaking a traditional representation model and placing the burden there is the wrong outcome under the opinion’s own terms.

In addition to calling upon the exhortation from [14] Scope above, the opinion hangs its hat on being just a repetition of the warning in Comment [8] to RPC 4.2 that a lawyer cannot circumvent RPC 4.2’s prohibition by “closing eyes to the obvious.”  Yet, the framing doesn’t track that warning at all.

In describing circumstances it says are enough for knowledge of representation to be inferred, the opinion offers:

[W]hen a lawyer representing a client faces what appears to be a pro se opposing party who has filed a pleading that appears to have been prepared by a lawyer or when a lawyer representing a client in a transaction is negotiating an agreement with what appears to be a pro se person who presents an agreement or a counteroffer that appears to have been prepared by a lawyer.

How would proceeding on the basis that you don’t actually “know” that there is a lawyer involved behind-the-scenes in either scenario “closing eyes to the obvious?”

The only obvious thing is that the “eye of the beholder” will make all the difference.  Today, it’s already fairly easy for a person, without a law license, to use the internet to find forms and pleadings of all sorts from other cases and, with some modification, attempt to use them for their own purposes.  That’s true even if you don’t bring into the mix companies that offer such forms for a fee.  When is it going to appear there is a lawyer involved as opposed to when it is going to appear that someone is buying forms or cannibalizing materials from the internet?

If the endeavor of trying to reconcile this “gap” where RPC 1.2, 4.2, and 4.3 intersect was to be undertaken “with reference to the purposes of legal representation,” then (if you didn’t already figure this out) I think the answer should clearly have been different.

The purpose of permitting unbundling as a good thing is inherently the idea that some access to the assistance of a lawyer is better than no access.  Half a loaf and all that.  Thus, unbundling necessarily contemplates that the client will have to navigate certain aspects of the matter — including communicating with counsel for the other side — on their own.  So, why shouldn’t the onus be placed on the person receiving unbundled services (with the guidance of their limited scope lawyer to make a choice — either (a) get the benefit of counsel’s involvement on a behind-the-scenes basis in exchange for the burden of being fair game for direct communication; or (b) get the benefit of being shielded from direct communication with counsel for the opposing party in exchange for the burden that your lawyer must come forward, no matter how limited the scope, and communicate forthrightly about that involvement?

A little something to be thankful for

If you’re a lawyer, then many days you may find yourself either complaining that you are too busy or that you aren’t busy enough.  Rare is the time for lawyers (in my experience) when they think their workload lands in a “just right” kind of spot.  There actually can be such a thing as too busy.  In fact, the ethics rules in Tennessee (and elsewhere) even recognize this in a statement relegated to the Comment to RPC 1.3 (Diligence).    Comment [2] to RPC 1.3 of the ABA Model Rules (Tennessee’s provision is identical) reads:  “A lawyer’s work load must be controlled so that each matter can be handled competently.”

Unless you happen to work as a public defender though, you are very unlikely to end up with a workload that truly jeopardizes your ability to handle each of your cases competently.  For most lawyers who get to that place, they have no one to blame but themselves.  If you are a public defender, there’s a really good chance you are in that boat through no fault of your own.

Two news items this week help to drive this point home.  The first comes out of Maryland where a public defender’s overwhelming workload was actually cited by the trial court when ordering the retrial of a murder case that had ended in a conviction.  The defendant’s attorney, a public defender, overstepped his bounds by refusing to let his own client testify in her defense — a decision that RPC 1.2(a) clearly bestows unequivocally on the client.  The RPC 1.2(a) ethical transgression, and not a caseload at a level violating RPC 1.3,  was the substantive justification for the reversal, but the court went out of its way to attempt to make clear that it didn’t consider the error indicative of the type of attorney the public defender was.  Rather, the judge characterized the error as a side effect to having been handling 88 felony cases over a six month period, explaining in the ruling that the p.d. in question was “a very good attorney,” but “was simply overwhelmed by the number of cases that he had.”

The second new item comes out of New Orleans, where the Orleans Parish Public Defenders Office has filed a motion – indicated to be the first of several – with a criminal court judge to request that the office not be assigned any new cases.  The motion explains that the combination of excessive caseloads, budget cuts, hiring freezes, and staff shortages have all led to a situation where the members of the office aren’t able to provide “constitutional, effective representation.”  Contrary to how he views the world, the motion does not blame the former defensive coordinator of the New Orleans Saints in any fashion.  The Times-Picayune article on the story reports that the public defenders’ office estimates that it presently represents 85% of all felony criminal defendants in the Parish.  Local media also reports that the first day of a multiple day hearing on the motion has begun and the founder of The Innocence Project is expected to testify next week.

So, if you can’t think of anything else to be thankful for this week, be thankful that you’re not a public defender.  And, if you’re reading this, you likely aren’t.  Because you don’t have the time to spare.