On second thought, “this” is the least discussed ethics rule.

Many moons ago (look at me and my topical thinly-veiled 8/21/17 Eclipse reference), I wrote a post about Model Rule 2.1 being perhaps the least discussed ethics rule and why maybe it shouldn’t be.  But, a recent news item about a relatively humdrum topic, a relatively large multi-state law firm (Husch Blackwell) announcing that it has named a new CEO who is not lawyer, got me thinking about another ethics rule that much more likely is, hands-down, the least discussed ethics rule.  That rule is Model Rule 5.4(b)(2).  Unlike Rule 2.1 though, Rule 5.4(b)(2) is deservedly never made the subject of discussion because if it were paid attention to, then one of two things would be true.  Either it is an essentially meaningless rule or it’s a rule that tens (if not hundreds) of thousands of lawyers throughout the U.S. violated by showing up to work today.

You probably might have some trouble thinking what the rule in question says so I’ll help you out.  It’s this one:

(d)  A lawyer shall not practice with or in the form of a professional corporation or association authorized to practice law for a profit, if:

(2) a nonlawyer is a corporate director or officer thereof or occupies the position of similar responsibility in any form of association other than a corporation.

We have this same language in Tennessee in our RPC 5.4(d)(2) and, odds are, you do too in whatever state where you happen to be reading this.  Now, if your law firm is organized as a corporation, then no worries under any circumstances because the “other than a corporation” language at the end there makes it clear that a corporation can have a nonlawyer in an officer position.

If you practice law in a firm that is organized as a professional limited liability company, or a limited liability partnership (for the record, Husch Blackwell happens to be an LLP) or some such similar entity, and you have someone – not a lawyer – in a position like a Chief Marketing Officer, or a Chief Financial Officer, or a Chief Operating Officer, or a CEO, then … well the existence of this rule is unfortunate, unless it can be said that none of those entities qualifies as a “form of association.”

If they don’t qualify, then what exactly is the purpose of this rule?  Why should only lawyers practicing in an “association of attorneys,” but not organized in one of these other formal business entity forms be prohibited from having a nonlawyer be an officer?

If such limited liability entities do qualify as associations under the rule, then what exactly is the reason for still having this rule on the books anywhere?  Particularly given that 5.4(d)(3) already effectively prohibits the actual harm by prohibiting practicing even in a firm that is a corporation if “a nonlawyer has the right to direct or control the professional judgment of a lawyer.”

There are a significant number of firms these days that have someone who isn’t a lawyer serving in one of those roles managerial roles as an officer, and I’m certainly not aware of any instances of any bar regulator seeking discipline against lawyers practicing with those firms on that basis.  (For what it is worth the ABA’s Annotated Model Rules of Professional Conduct that I have handy [Sixth Edition] declares that “Rule 5.4(d) prohibits a lawyer from practicing in any for-profit entity in which a nonlawyer has an ownership interest, a position of responsibility, or a right to direct the lawyer’s professional judgment.”)

So, like I said, probably for the best that this is the least discussed rule.

Does Avvo provide a bona fide lawyer rating?

A number of folks have already written about how New York has dealt another setback for Avvo Legal Services in the form of NY State Bar Ethics Op. 1132 which found that New York lawyers could not participate in Avvo Legal Services because payment of Avvo’s marketing fee amounts to payment for recommendation of services in violation of New York’s Rule 7.2(a).

You can read the full opinion here.  You can read some other pieces elaborating on the opinion here, here, and here.

The opinion is notable not just for its potential influence and the number of lawyers it impacts but because it is the first opinion weighing in on Avvo Legal Services that explicitly ties together the rating service that Avvo provides and has long provided with the Avvo Legal Services platform that has more recently come to pass.

In doing so, the New York opinion went ahead and analyzed the Rule 7.2(a) question assuming that Avvo’s lawyer ratings were bona fide ratings.  It made the point that, if they were not, then other issues would arise regarding lawyer participation with Avvo and lawyer touting of ratings issued by Avvo but went ahead and assumed they were bona fide.

I want to spend just a moment to tackle that assumption and offer my own opinion on the subject.  Are Avvo’s lawyer ratings bona fide?  No.  Of course they are not bona fide.  They are not bona fide because your only hope of having a high rating is to work with them and cooperate with them.

My basis for having this opinion is not solely about on my own experience.  But, an examination of my own rating with Avvo is an admittedly good place to start explaining my opinion.

I have never “claimed” my Avvo profile nor contributed any information to Avvo to assist in building the profile they have put together on their own for me.  (Interestingly, a few times after I have written posts here about problems with Avvo Legal Services I have gotten multiple, repeated calls from Avvo trying to assist me in improving/completing my profile and offering how to claim my profile.)  When you go search me up on Avvo you will see that they have afforded me a 6.7 rating out of 10.

Now, admittedly all lawyers are egotistical and none of us are truly capable of objectively evaluating are own worth, but …  You can probably say many negative things about me but I don’t think you can say I’m a 6.7 out of 10 when it comes to being a lawyer.

I’ve been listed in Best Lawyers in America every year since 2009.  In 2017, Best Lawyers listed me as its Appellate Lawyer of the Year in Memphis.  I’ve been listed as a “Super Lawyer” by Mid South Super Lawyers since 2011 and for two out of three years before that (2008 & 2010) I was listed by that publication as a “Rising Star.”  I have been AV rated by Martindale Hubbell since at least as early as 2010.  (It’s rating of me is 4.7 on a scale of 5).

All of that information is readily, publicly available and could be gathered and evaluated by Avvo without any input from me and without any need for me to confirm or claim my profile.  But I haven’t claimed my profile and, they’ve pegged me as a 6.7 out of 10.

Just to make clear that my opinion on this isn’t solely based on my own personal experience/situation.  Let me offer a few more examples that are impossible to reconcile with the concept of Avvo offering a bona fide rating system.

Christine P. Richards, the General Counsel of FedEx – she gets an even lower rating than I do, at 6.5.

Also getting a 6.5, Bill Freivogel the conflicts-guru in the ethics world behind Freivogel on Conflicts.  Barbara Gillers a fantastic lawyer with a prominent law firm in New York and who is the incoming Chair of the ABA Standing Committee on Ethics and Professional Responsibility also gets the same 6.7 rating I do.

Or, how about Abbe Lowell the prominent D.C. lawyer who is now representing Jared Kushner.  He gets a 6.6.  Or, here’s a fun one, the lawyer heading up the special counsel investigation into the President, Robert Mueller?  He too is just a 6.5.

But Avvo’s own general counsel, Josh King?  Well, Avvo gives him a 10 rating.

Dan Lear, an attorney who also works for Avvo, he gets a 9.2 rating.

Oh, I can tell you one that they have gotten correct though, Roy D. Simon, who happens to be a member of the NYSBA committee that issued this most recent ethics opinion also gets a 10 rating from Avvo.

(N.B. While I have no misgivings about my level of readership or influence, on the off chance any of these ratings gets changed subsequent to this post, the ratings indicated above have been confirmed as of today’s date and print outs of the pages are on-file with yours truly.)

Speaking again of rarer occurrences

Last week I dedicated a post to highlighting some topics of note that I hadn’t written about in a while.  This is another such post as the Tennessee Supreme Court has again taken action on its own initiative to increase discipline against an attorney beyond a result that both the accused attorney and the prosecuting entity had decided not to even appeal.  I previously wrote about such an occurrence back in April 2015.

Any time it happens it’s an interesting outcome because for lawyers in such proceedings, and the lawyers who represent them, the possibility always looms in the background when handling a matter but does not frequently occur.  As the opinion explains, Tenn. Sup. Ct. R. 9, § 15.4 imposes a duty on the Court even if no one has appealed to “review the recommended punishment provided in such judgment or settlement with a view to attaining uniformity of punishment throughout the State and appropriateness of punishment under the circumstances of each particular case.”

This more recent instance has occurred to a Nashville criminal defense lawyer by the name of Paul Walwyn and you can read the full ruling here.

The nature of case against the lawyer reads in a pretty straightforward manner:

This case arose from Mr. Walwyn’s representation of Jonathan Gutierrez in a first degree murder trial in 2011. At the time, Mr. Walwyn had been licensed to practice law since 1996 and had been practicing criminal law for fifteen to sixteen years. Following
Mr. Gutierrez’s convictions for first degree murder and four counts of aggravated assault, he was sentenced to life in prison and four consecutive four-year sentences, for a total effective sentence of life plus sixteen years. Mr. Walwyn filed a motion for new trial,
which was subsequently denied on September 30, 2011. However, Mr. Walwyn did not file a notice of appeal in Mr. Gutierrez’s case until May 8, 2015, even though the Tennessee Rules of Appellate Procedure require that a notice of appeal be filed within
thirty days.  The trial court appointed new counsel, Mr. Richard Strong, on June 3, 2015.  The Tennessee Court of Criminal Appeals subsequently accepted the late-filed notice of appeal in the interest of justice. See Tenn. R. App. P. 4(a).

The opinion reveals there were some factual wrinkles, including questions about how (in)frequent communication with the client was during the delay in noticing the appeal and that a TV interview the lawyer provided after trial meant he shouldn’t handle the appeal, but the primary focus of the disciplinary matter was on the 3 1/2 year delay in filing a notice of appeal.

Originally the hearing panel imposed a one-year suspension with all of the time served on probation rather than active suspension.  While that used to be an acceptable framework in Tennessee, the rules changed within the last few years and, now, if an attorney is to be suspended they must have an active period of suspension of no fewer than 30 days.  Because the hearing panel managed to overlook the rule changes, disciplinary counsel filed a motion to have the judgment altered to comply with the rules.  In response, the hearing panel altered the punishment not by imposing 30 days of active suspension but by reducing the punishment to a public censure along with certain conditions, including a practice monitor.  Thereafter, Mr. Walwyn (not surprisingly) did not appeal and neither did disciplinary counsel (surprisingly).

The Court exercised its Section 15.4 obligation to review, however, and indicated it would consider increasing the punishment.  After that point, the Board – which is allowed a second bite at the apple in such a situation – did begin to advocate to the Court that Mr. Walwyn should be suspended.  The Court agreed and imposed a 12-month suspension with 6 months of active suspension and 6 months on probation with a practice monitor as well as imposing some additional CLE requirements as the final sanction.

In the end, the driving force was the fact that the attorney had previously been disciplined several times for very similar conduct.

Prior to this disciplinary hearing, Mr. Walwyn had been disciplined on five separate occasions. In 2003, he received a private reprimand for failing to file a proposed order for four years. In 2004, he received a public censure for filing a proposed order late
in a child support and custody case, filing a notice of appeal in a criminal case five days late, filing an appellate brief sixty days late, and failing to file a timely petition to this Court, resulting in the petition being denied as untimely. In 2006, he received a public
censure for failing to timely respond to Disciplinary Counsel. As a condition of his guilty plea, Mr. Walwyn was required to undergo a law practice management evaluation by another attorney; audit the law practice management course at the Nashville School of
Law; and complete six additional hours of CLE hours on subjects related to client relations, the management of a law practice, the Rules of Professional Conduct, or disciplinary actions of the Board of Professional Responsibility. In 2006, Mr. Walwyn received a private informal admonition for neglecting to have a default judgment set aside and for failing to provide an affidavit to Disciplinary Counsel. Finally, in December 2015, Mr. Walwyn was suspended from the practice of law for six months, with thirty days to be served on active suspension and five months to be served on
probation. See Walwyn v. Bd. of Prof’l Resp., 481 S.W.3d 151, 161-62, 171 (Tenn.2015). Mr. Walwyn was still completing this probation at the time of his disciplinary hearing in this case.

Loyal readers of this blog (or at least those with eidetic memories) will recall that December 2015 suspension of Mr. Walwyn as being the case in which his lawyer articulated the “rambling and bordering on incoherent” attack on the structure of the disciplinary system in Tennessee.  (That same lawyer represented Mr. Walwyn in this matter as well.)

Finally, having received a bit of feedback from a fellow ethics nerd as a comment on my post about my perceived delay in a California disciplinary case last week, I also want to mention that this case also shows some of my perspective as to timing.  A review of this latest Walwyn matter will show that the time between the filing of the formal petition for discipline and this ultimate outcome from the Tennessee Supreme Court, even with all of the added procedural hurdles involved, was just under 2 years.

It’s been a while.

Today I’m going to splice together two short discussions about topics that I haven’t mentioned in a while.  (And, for any fans of the podcast U Talking U2 to Me that are out there, you do have to read the title of this post to sound like the first words of this remake right here.)

I have not written in a while of an instance of a lawyer getting into disciplinary trouble over saying too much in the process of withdrawing from a client representation.  But it’s happened again, so it’s worth reminding people not to do that.

A week ago, the Ohio Supreme Court issued its opinion affirming a recommended one-year suspension (but with all of the suspension stayed) for a divorce lawyer who paired an affidavit with his motion to withdraw from a client’s matter.  The Ohio court succinctly laid out the problematic contents of the affidavit:

In the affidavit, he recounted communications he had had with
[the client] about the scope of his representation and his compensation, accused her of refusing to pay his agreed-upon fees “without cause,” and disclosed legal advice that he had given her. He also described [the client]’s discharge of him as “retaliatory” and alleged that it had “occurred because of [his] advice to her
concerning her objectionable and potentially illegal actions” relating to her ex-husband, which he characterized as “a problem similar to the one [he] experienced in [his] previous representation of her.”

The Ohio opinion not only cogently walks through why the lawyer’s attempted arguments that such disclosures were permitted to be made under exceptions set out in Ohio’s Rule 1.6(b) weren’t triggered, but also stresses another point too often overlooked by lawyers even when they might have justification to make certain disclosures:

Finally, even if [the lawyer] had reasonably believed that Prof.Cond.R. 1.6(b) permitted him to disclose [the client]’s allegedly fraudulent conduct, the means by which he chose to do so were improper. The comments to Prof.Cond.R. 1.6 clarify that when a lawyer believes that disclosure of client information is
necessary, the lawyer should first seek to persuade the client to take suitable action to obviate the need for the attorney’s disclosure and that a disclosure adverse to the client’s interest should be no greater than necessary to accomplish the purpose. Prof.Cond.R. 1.6, Comment 16. And “[i]f the disclosure will be made in connection with a judicial proceeding, the disclosure should be made in a manner that limits access to the information to the tribunal or other persons having a need to know it and appropriate protective orders or other arrangements should be sought by the lawyer to the fullest extent possible.” Id. Here, [the lawyer] failed to notify or communicate with [the client] about the allegations in his affidavit prior to filing it, and he did not attempt to limit public access to the document.

Another topic I haven’t mentioned in a while is ABA Model Rule 8.4(g) and how it’s playing in various states.  You will recall on at least one occasion when I did write about it, I mentioned how one of the ABA’s talking points was that somewhere north of 20 states already had black-letter rules in one form or fashion making acts of discrimination unethical.

About three weeks ago, one of those states, Vermont, just decided to scrap its version of such a rule and replace it with a Rule 8.4(g) that is substantially equivalent to the ABA Model Rule.  You can read the order of the Vermont Supreme Court adopting such a rule which will become effective on September 18, 2017 here.

Robot roll call …

If I had any faith that the Venn diagram showing overlap between readers of this blog and fans of Mystery Science Theater 3000 had broad, heavy shading in the overlapping areas of the circles, then I would take this joke all the way with some clever effort at following up the title with a first line “In the not-too-distant future, next Sunday A.D.,” but I don’t, so I’m not.

In fact, at this point by having dropped off the map for a bit to pursue what was, and what I should have been realized sooner was, a fool’s errand, I can’t definitively believe that I still have any readers at all.  Hoping to do better moving forward with the regular posting.

The purpose of today’s post, in addition to apologizing into what might be a void, is to very quickly reference just how quickly things are moving in a certain aspect of the legal tech space – something that is not quite AI but seems like it, the world of chatbots.

Last week there were two pretty significant stories in the legal press regarding developments in this area.  First, the maker of DoNotPay (the most well-known/most influential legal chatbot to date) announced that not only has it made legal chatbots available at present for some 1,000 areas of law but that it has made its framework available for lawyers to use to create their own chatbots for areas of law not presently provided for.  You can read more of the details at the ABA Journal online. 

The thing that I find most interesting about this sort of development is not just the role that such chatbots can play for would-be-consumers of legal services to solve their own issues without lawyers, but the potential for lawyers to use the chatbots themselves to venture into areas in which they do not otherwise have expertise to represent clients and claim the work product generated by the bot as their own.

A second story made the rounds about another software/robot offering that is more AI than chatbot that would serve as competition for paralegals in the patent marketplace and likely – quite quickly – beyond.  Again, you can read more about RoboReview a patent drafting software product at the Journal.

Beyond the obvious upside for lawyers of access to this kind of AI and machine learning to do their own job, and the work of others that might assist them, faster and perhaps better, the existence of these kinds of products could serve to prevent lawyers from being in position to make the bad choice this Texas attorney is being alleged to have made to try to keep his legal assistant in the United States.

Here’s something you don’t see every day: Brave Law Firm sues a competitor.

I’ve written here pretty frequently about issues of lawyer advertising.  I am too lazy today to try and go find links to other posts of mine in which I have stated that the overwhelming majority of disciplinary complaints filed over lawyer advertisements are filed by other lawyers.  Not always competitors, sometimes lawyers on the other side of the v, but just about always by lawyers.

While that remains true, it is rare that you ever see one lawyer or law firm sue another lawyer or law firm over advertising.  Earlier this month, one such lawsuit was filed.  That lawsuit is captioned Brave Law Firm, LLC v. Truck Accident Lawyers Group, Inc. et al. and was filed in federal court in Kansas. Here is link to the lawsuit (07914726612 brave law firm) if you desire to go read the whole thing.

There are lots of reasons why such lawsuit filings are infrequent.  The fact that in order to come up with a claim for damages a firm is likely going to have to demonstrate losing some clients to the other firm that can be traced to the advertisements in question is usually a pretty solid reason not to do it.  Instead, it is much simpler for a firm or lawyer who wants to complaint to file a disciplinary complaint because any rules infractions won’t turn on whether or not your firm was actually harmed by what the other lawyer was doing.

This suit though provides the basis for the roadmap that you’d see in terms of causes of action for such a lawsuit, including a Lanham Act claim and the relevant state law claim for tortious interference with a business relationship.

What makes the lawsuit a particularly interesting read, however, is that it levels its attacks against advertisements that defendant lawyer’s firms have made about past successes but it does not involve exactly the kind of complaints you often expect hear made about such things.  It does not undertake an assault on the advertisements as being misleading because advertising that you obtained a multi-million dollar recovery for a litigant might arguable mislead a potential client into thinking that such outcomes are achievable in their case as well.

Instead, it challenges the very veracity of the advertised outcomes themselves. The core allegations from the Complaint in this regard are as follows:

29. As one recent example, Defendants Brad Pistotnik and Brad Pistotnik Law, P.A. ran a series of advertisements touting their alleged results [NB: you can see an actual screenshot in the complaint itself but I have not included it]

30. The disclaimer at the bottom of the screen is consistent with the content of the entire ad and explicitly states that the “Amounts are gross recovery before fees and expenses.”

31. Instead, the actual “gross recovery” before fees and expenses was $387,018.00, or 16% of what was advertised.

32. This advertisement is literally false because there was no “gross recovery” of $2,400,000 by any person(s) in the case referenced in the advertisement, either before or after legal fees and expenses.

33. In addition, this advertisement is literally false as it advises the viewer that “Our past performances are no guarantee of future results” when, in fact, the “past performance” referenced in the advertisement never happened at all.

[snip]

35. As another example, all of the Defendants widely disseminated advertisements claiming that they obtained a jury verdict of $4,100,000 in a personal injury case.

36. This same advertisement also advised that the jury awarded a punitive damage award of $2,500,000 to the alleged client.

37. These advertisements were, and are, literally false as the “gross recovery” in that case was approximately $850,000.00 and the jury did not award any punitive damages to the plaintiffs.

38. Other advertisements ran by the Defendants featured other literally false “gross recoveries” via alleged verdicts including ones for $1,100,000, $845,000, and $401,000.00.

39. In addition to advertising alleged “gross recoveries” via jury verdicts that never actually happened, the Defendants also advertised purported settlements that never happened.

40. As one example, all of the Defendants advertised that they had settled a case for $9,000,000 on behalf of a former client.

41. This settlement did not happen as advertised because Defendant Bradley A. Pistotnik and the AAPLO had been terminated by the client prior to the settlement occurring and the settlement was actually obtained by another lawyer, apparently
in another state, but at various times each of the Defendants has claimed it as their own.

Obviously, if such facts could be proven, then disciplinary exposure for the lawyer responsible for such advertisements would be in the mix as well and, might I add, would be within the ambit of the kind of more limited, and more focused, ethics rules on lawyer advertising that are being advocated for adoption as a revision to the ABA Model Rules.

Given that the complaint reads like someone has provided the Brave Law Firm with some significant behind-the-scenes knowledge, it appears possible that there could be more interesting developments arising if this suit moves forward.  For example, I’d be interested to know if someone previously employed by one of the defendants now works for the plaintiff.  Unless the Brave firm got all of this information from people free to share it, then one would think potential counterclaims could get thrown into the mix in the future.

Final thoughts for now on the Oregon report

For this last, at least for now, of the three posts I envisioned to talk about the important aspects of the Oregon State Bar Futures Task Force, I want to talk about the piece I’ve not really said anything about to date – the recommendations of the Innovations Committee of that Futures Task Force.

As the briefest of refreshers for those who may vaguely remember what that committee was intended to be about, the Executive Summary of the OSB report explained that its Futures Task Force was split into two committees and that the Legal Innovations Committee was “focused on the tools and models required for a modern legal practice.”

Now you can read the entirety of its report starting at p. 60 of the overall report, but I should warn you that right out of the gate it reads unlike most state bar work-product you may have encountered with references to products you may never have heard of and business-speak you likely never use.  Here for example is the paragraph that explains how the Innovations Committee “built” its report:

The report itself was built in Sprints, a tool that comes from the Agile project management methodology known as Scrum.  This method placed an early emphasis on “minimum viable product” for each report section, with subsections developing iteratively over the course of subsequent sprint periods.  We also conducted periodic retrospectives (another Scrum technique) to ensure that team members were feeling comfortable with the methodology.  To manage the sprints, we used the technology tool Trello and the cards for each report subsection (including items considered but not acted upon) can be found at https://trello.com/b/X7N8kKki.

Now, if that makes your head hurt, then a lot of the report probably isn’t going to be for you… unless, of course, you plan to continue to practice law for 5 or more years because then it probably is for you… whether you want that to be true or not.

The first recommendation of the Innovations committee — though numbered as 4 in the overall report — is “Embrace Data-Driven Decision Making.”  That is a recommendation that many law firms do or should adopt and that all lawyers at some level ought to as well.  As just an example, if you run your law practice taking cases on a flat fee basis but don’t know which of the types of cases you handle are the ones where you end up with the best return on investment, then you don’t exactly have the data you need to best decide where to focus your marketing efforts or which cases to be less inclined to agree to take on rather than declining on the front end.

Within this recommendation, the OSB Futures Task Force offers four subparts of the recommendation, but I only want to write a little bit about one of those:

RECOMMENDATION 4.3: The OSB and the Oregon Judiciary should adopt an Open-Data Policy.

Simply put, many of the bright ideas that focused individuals and groups can come up with to try to alleviate burdens on access to justice are made all the more difficult (if not impossible) to implement by the lack of ready access to system-wide data.

The second broad recommendation of the Innovations committee — Expand the Lawyer Referral Service and Modest Means Programs — targets Oregon-specific programs that may or may not exist in your jurisdiction and that are difficult to talk about in any universal fashion.  What I do think is interesting is to contemplate a bit about what correlation there might be between Oregon’s willingness to embrace and advocate for rule changes to permit fee sharing with nonlawyers in connection with online lawyer referral services such as Avvo Legal Services and the fact that Oregon has successfully been running a referral service that, to quote the report, was changed to a “percentage-based fee model in 2012” and, since that time, “Oregon lawyers who utilize the program have earned over $22M in fees and, in 2016, returned $815,000 in revenues to the OSB.”

The third recommendation out of the Innovations committee focused on ways to “Enhance Practice Management Resources,” specifically:

RECOMMENDATION 6.1: The OSB should develop a comprehensive training curriculum to encourage and enable Oregon lawyers to adopt modern law-practice management methods, including (but not limited to) automation, outsourcing, and project management.

The details and rationale offered by the Futures Task Force on these subjects makes for a compelling and cogent read, and I’d recommend at least reading that section (p.65-68) in full.  Hopefully, you will come away from that thinking that such an approach to teaching modern practice management would be worth pursuing perhaps in your own law firm if not something you’d very much like to see made available by your state regulatory body – though in states like Tennessee where we have a bar association that is a purely voluntary membership organization, the road map offered up by the OSB task force seems tailor made for advancement by such organizations.

The fourth and final recommendation of the Innovations committee seems to me to be the most vital piece of innovation that those invested in the practice of law can hope to see come about if unemployed and underemployed lawyers are going to be able to build better careers by findings ways to deliver legal services to under-served populations and those who have unmet legal needs.

RECOMMENDATION NO. 7: Reduce Barriers to Accessibility

The recommendation is comprised of four sub-parts but I only want to point your attention to two of those because they are essentially inextricably linked and can be thought of in a way that is more readily universal.  Those recommendation sub-parts are:

7.2:  The OSB should more actively promote the use of technology as a way to increase access to justice in lower income and rural communities.

7.3:  Make legal services more accessible in rural areas.

These recommendations include a number of concrete, and thought-provoking suggestions for how technology can be embraced and leveraged not just to make life easier for lawyers as it has been but to “bring down some of the geographic barriers that constrain access to justice,” and to emulate other industries where “[t]echnological innovation” has been used to “reduce[] the cost of products and services and made them more accessible to a broader range of customers and clients.”

One specific recommendations made in Oregon that — when you think about the vast array of actions people take in the ordinary course of life now through the use of streaming video services and online resources on a daily basis — seems ripe for serious consideration by small claims courts throughout the nation is:

Encouraging the courts to provide opportunities to conduct court proceedings through video conferencing in civil procedural cases or hearings that involve few witnesses and documents.  The use of videoconferencing can reduce the costs and burdens for parties and witnesses who have difficulties personally appearing in court due to geographic distance, lack of transportation, employment needs, childcare issues, or other challenges.

New Jersey weighs in as well, reminding us the difference between “is” and “ought.”

My last two posts have focused on the pretty wide-ranging and very thought-provoking work (and work product) of the Oregon State Bar Futures Task Force.  I do plan to return to the topics because there is more in that report worth discussion, but we are taking a break from that with this post.

Let’s move from the West Coast to the East Coast and talk today about a joint opinion issued in New Jersey last week because it offers something of a juxtaposition for discussion of the future of legal ethics.

On June 21, 2017, three committees of the Supreme Court of New Jersey – the Advisory Committee on Professional Ethics, the Committee on Attorney Advertising, and the Committee on the Unauthorized Practice of Law — issued a Joint Opinion announcing that lawyers in New Jersey can’t get involved with Avvo Legal Services, Rocket Lawyer, or LegalZoom.  In fact, you don’t actually have to read much further than the title of the Joint Opinion to get the gist of it as it is entitled:

Lawyers Participating in Impermissible Lawyer Referral Services and Providing Legal Services for Unregistered Legal Service Plans — Avvo, LegalZoom, Rocket Lawyer, and Similar Companies

As indicated, the opinion explains that there are two problems: one that plagues Avvo Legal Services under their analysis, and another that plagues LegalZoom and Rocket Lawyer.  The message New Jersey is sending reads as one that as starkly different from Oregon’s message.

But, and here’s what makes all of this both complicated, fascinating to discuss, and extremely important:  the analysis New Jersey offers is not wrong.

As to lawyer participation in services like LegalZoom and Rocket Lawyer, which offer something that New Jersey refers to as a legal services plan — and the choice to see them that way and call them that is an important one — the problem for New Jersey lawyers is described in a way that appears much less pervasive than as to other companies operating in the space – that these companies simply are not properly registered in New Jersey.  I’ve written in the past about the barrier that Tennessee’s special RPC 7.6 can create for attorney participation in programs if they can be considered an intermediary organization.  New Jersey has a particular registration requirement for companies that provide “legal service plans.”  That rule is RPC 7.3(e)(4).

The opinion walks through each of the requirements ending with the registration requirement that appears in RPC 7.3(e)(4)(vii).  The opinion indicates that, regardless of anything else, neither of those companies have registered their plans and, thus, lawyers cannot participate.  The implication is that the only obstacle standing between New Jersey lawyers and signing up for plans offered by Rocket Lawyer or LegalZoom is proper registration.  The opinion doesn’t pull back the curtain to make plain for the reader whether there is any institutional barrier that makes it impossible for Rocket Lawyer or LegalZoom to choose to register.  But, the joint opinion certainly appears to strongly imply that lack of registration is the only problem.

As to participation with Avvo Legal Services, the New Jersey joint opinion has serious problems to point out – problems that would require a change in business model altogether to be solved.  The problems voiced by the New Jersey joint opinion are ones that have been expressed before in a number of other states and, in fact, the New Jersey opinion unsurprisingly explicitly cites to those other ethics opinions from Ohio, South Carolina, and Pennsylvania.  Avvo’s marketing fee requires a lawyer to improperly share fees with a nonlawyer in violation of New Jersey Rule 5.4.  The opinion, in a way that when truly contemplated seems like piling on, also goes after the same payment as being the payment of impermissible referral fees in violation of New Jersey’s Rules 7.2(c) and 7.3(d).

Back in February 2016, I wrote a lengthy post that was a barely-veiled critique of the arguments Avvo kept making in terms of their efforts to defend their business model over how they were trying to blur the distinction between what is, and what ought to be, when it comes to whether participating lawyers were complying with the ethics rules.

The difference between the message being sent in New Jersey and developments in Oregon may be just as simply summed up though.

Perhaps, the gap between the two approaches is only as big as the difference between what is and what ought to be.

More of me weighing in on Oregon weighing in on the future

For those that missed my post earlier this week on the release of the Oregon State Bar Futures Task Force report, you can read that post here and get caught up.

Today, I want to offer some thoughts on one of the three Recommendations made by the Regulatory Committee of the Futures Task Force.  It is likely the most important of the Recommendations but certain to be the most controversial as well.

Recommendation 2: Revise Rules of Professional Conduct to Remove Barriers to Innovation.

This recommendation is comprised of four parts.  I’ll list them in the order they are presented, even though that is not the order in which I want to discuss them.

2.1  Amend current advertising rules to allow in-person or real-time electronic solicitation, with limited exceptions.

2.2  Amend current fee-sharing rules to allow fee sharing between lawyers and lawyer referral services, with appropriate disclosure to clients.

2.3  Amend current fee-sharing and partnership rules to allow participation by licensed paraprofessionals.

2.4  Clarify that providing access to web-based intelligent software that allows consumers to create custom legal documents is not the practice of law.

Now, that third sub-part creates a spoiler for another of the three Regulatory Committee recommendations – Implement Legal Paraprofessional Licensure.  Given the way those programs have played out to date in a number of other jurisdictions, I don’t think that is going to do much to turn any tides, so for now I’m going to pass on discussing it.  (If you want to delve into it, you can read all of thoughts of the Futures Task Force on that subject and the entirety of the 90+ page report behind the Executive Summary here.)

The fourth one – making clear that certain software programs that let someone through self-help generate customized legal documents — is a perfectly fine idea and, in this day and age, seems very difficult to argue against.  With each passing day, the notion that there are certain legal problems that states cannot allow be served through software programs that do for certain legal problems what tax return software programs do for income taxes seems harder and harder to justify.  But, I’m not sure that such a clarification is what is standing between better access to legal services for consumers and where things are today.  I tend to think that, in part, because those services already exist and are in pretty wide use because companies already make them available and consumers already use them.

The first one about changes to the advertising rules is most certainly a provision I would support (and have supported in past posts).  Virginia has just done something similar with its recent rule revisions.  But again, I don’t know that this change would be something that, as a response or solution to trying to improve public access to legal services, will make any real difference.  Why do I say that?  It is currently not at all very difficult to create an online platform in which it is the consumers that make the first communication effort so that lawyers can respond to it rather than initiate it.  As long as that is true, then lawyer advertising rules prohibiting solicitation do not present any barrier at all to getting consumers in need of legal services and lawyers with the time and ability to provide the services together.

That leaves the second subpart.  And that is the one where I suggest, respectfully, all the marbles are located for lawyers.

The notion of changing the ethics rules to allow lawyers to share fees in a particular matter with nonlawyers, as long as there is full, appropriate disclosure to the consumer of what is taking place.

The specific proposal Oregon’s Task Force has offered is for its current RPC 5.4(a)(5) that only references bar-sponsored or not-for-profit referral services to be revised to read instead as follows:

(a)  A lawyer or law firm shall not share legal fees with a nonlawyer, except that

***

(5) a lawyer may pay the usual charges of a lawyer-referral service, including sharing legal fees with the service, only if:

(i) the lawyer communicates to the client in writing at the outset of the representation the amount of the charge and the manner of its calculation, and

(ii) the total fee for legal services rendered to the client combined with the amount of the charge would not be a clearly excessive fee pursuant to Rule 1.5 if it were solely a fee for legal services, including fees calculated as a percentage of legal fees received by the lawyer from a referral.

That is an action that would, overnight, make pretty much every technological innovation already available (or even conceivable) viable for lawyers to participate in as a way of delivering legal services to consumers and businesses.  It would also allow many existing operators in the legal space to spend less time on trying to come up with workarounds about not being engaged in making referrals in their business model to try to assuage concerns that lawyers who use their platforms will be the subject of disciplinary complaints.

In short, that recommendation appears to me to the one that must be discussed and debated and decided on before any evaluation can be made about what any of the other ones might mean or accomplish.

If Oregon follows through, it seems difficult to speculate that one or more other states won’t follow.  And, if the experience of those states shows that full disclosure of the sharing arrangement, plus compliance with the other ethics rules requiring exercise of independent professional judgment and not allowing interference with that judgment, then it will seem very difficult for any jurisdiction to argue against doing the same.

It is inherently a controversial topic because the prohibition against fee sharing with nonlawyers is viewed by many as a bedrock principle of our profession.  But — if the underlying premise of that bedrock principle is restated as preserving the independent professional judgment of lawyers from undue influence by others — then the Oregon proposal that would allow fee sharing, require fulsome disclosure to the consumer involved about that arrangement could still readily be expected to serve that bedrock principle and protect consumers while benefiting consumers because – though not highlighted in the Report, RPC 5.4(c) would still be in force as well.

(c) A lawyer shall not permit a person who
recommends, employs, or pays the lawyer to render
legal services for another to direct or regulate the
lawyer’s professional judgment in rendering such legal
services.

Existing models of the online approach to pairing lawyers and consumers in need of legal services could almost all be placed into this bucket and, thus, lawyers using these services would still have maintain their independent professional judgment and refuse and resist efforts to compromise it.

The Future of Legal Services – Oregon weighs in

I was given an opportunity to provide a Legislative Update piece in the Spring 2017 issue of TortSource a publication of the ABA Tort Trial & Insurance Practice Section.  The focus of the Spring 2017 issue is “Evolving Legal Markets” and, although the authorship is Tennessee-heavy, I think you will find all the articles to be worth a read if you can get access.  There is a piece on artificial intelligence, a piece on consumer-facing legal services provided by non-lawyers, a piece on predictive coding, and one on online dispute resolution.

My piece focuses on questions of UPL and responses by states to challenges posed by the companies that compete with lawyers for clients and I’ll share with you the conclusion section:

Other jurisdictions may choose to take more strident approaches, but it would appear that the best path forward for leveling the playing field for lawyers is to seek the adoption of regulations that will require companies providing such legal services to consumers to adhere to the same ethics rules as lawyers. The ABA’s Model Regulatory Objectives for the Provision of Legal Services (A.B.A. Resolution 105, Feb. 2016) provide one template for states to consider to pursue such a path forward.

That conclusion feels more prescient than it truly was because, this past week, the Oregon State Bar Futures Task Force issued its report on the Future of Legal Services in Oregon.   Oregon is often discussed a rainy part of the U.S., and the volume of materials provided as the end product of the Futures Task Force is something of a deluge — the Executive Summary alone spans 15 pages of material.  You can read the Executive Summary here.

There is so much content of note in the work the OSB Futures Task Force has performed that I foresee spending a few posts discussing aspects of it, but today I want to start with a discussion of the findings of one of the two committees that made up the task force.

But even before discussing those two items, some background about the Futures Task Force and about the structure of the report and recommendations is in order.  First, the origin of the task force itself:

In April 2016, the OSB Board of Governors convened a Futures Task Force with the following charge:

“Examine how the Oregon State Bar can best protect the public          and support lawyers’ professional development in the face of            the public evolution of the manner in which legal services are            obtained and delivered.  Such changes have been spurred by              the blurring of traditional jurisdictional borders, the                            introduction of new models for regulating legal services and              educating legal professionals, dynamic public expectations                about how to seek and obtain affordable legal services, and                technological innovations that expand the ability to offer legal          services in dramatically different and financially viable ways.”

Second, the first step that was pursued as to the Task Force once created:

The Board split the Futures Task Force into two committees: a Legal Innovations Committee, focused on the tools and models required for a modern legal practice, and a Regulatory Committee, focused on how to best regulate and protect the public in light of the changing legal services market.

The end result was that the Regulatory Committee has made three recommendations and the Legal Innovations Committee has made five recommendations.  I plan to definitely write further, and in more detail, about the Regulatory Committee recommendations.

But, as indicated, for now I just want to talk about the findings made by one of the two committees, the Regulatory Committee.  I want to focus on them because, I think, they reveal just how universal the situation is that is faced in U.S. jurisdictions and, in turn, this means that the work product of this Oregon group has obvious potential application as a road map for action just about anywhere.  The Regulatory Committee made these nine findings:

  1. Oregonians need legal advice and legal services to successfully resolve problems and to access the courts.
  2. Consumers are increasingly unwilling or unable to engage traditional full-service legal representation.
  3. A significant number of self-represented litigants choose not to hire lawyers, even though they could afford to do so.
  4. Self-help resources are crucial and must be improved, even as we take steps to make professional legal services more accessible.
  5. Subsidized and free legal services, including legal aid and pro bono representation, are a key part of solving the access-to-justice gap, but they remain inadequate to meet all of the civil legal needs of low-income Oregonians.
  6. Despite the existence of numerous under- and unemployed lawyers, the supply of legal talent is not being matched with the need.
  7. Oregonians’ lack of access to legal advice and services leads to unfair outcomes, enlarges the access-to-justice gap, and generates public distrust in the justice system.
  8. For-profit online service providers are rapidly developing new models for delivering legal services to meet consumer demand.
  9. To fully serve the Bar’s mission of promoting respect for the rule of law, improving the quality of legal services, and increasing access to justice, we must allow and encourage the development of alternate models of legal service delivery to better meet the needs of Oregonians.

The question I would leave you with today is:  any reason at all to think that the first 8 items described would be any different if the discussion was about your state and its consumers rather than Oregon and Oregonians?  And, if not, then how could you think that the item identified in 9 isn’t something that your state is going to have to pursue as well?