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Title: Legal Ethics 2012: The Challenges of Technology, Social Media and Internet Marketing, Outsourcing and Supervision


1
Legal Ethics 2012The Challenges of Technology,
Social Media and Internet Marketing,
Outsourcing and Supervision
  • An Ethics CLE Presentation for
  • The Ho-Chunk Nation
  • December 14, 2012

2
ABA Model Rules of Professional Conduct 2012
Amendments
  • In August 2012, the ABA amended the Model Rules
    of Professional Conduct to provide guidance
    regarding the
  • use of technology,
  • the outsourcing of legal work, and
  • the increasing number of lawyers who practice in
    multiple jurisdictions.

3
The Relationshipof
  • The ABA Model Rules of Professional Conduct
  • to
  • The Wisconsin Rules of Professional Conduct

4
  • The Wisconsin Rules of Professional Conduct were
    substantially revised and adopted by the
    Wisconsin Supreme Court in 2007 to reflect the
    2002 revisions to the ABA Model Rules of
    Professional Conduct.
  • Following each of the Wisconsin Rules are the ABA
    Comments.
  • If there is a difference between the Model Rule
    and the Rule adopted in Wisconsin , the
    Wisconsin Committee Comments indicate the
    difference.
  • The Wisconsin Supreme Court also added comments,
    the Wisconsin Comments, where it adopted
    changes that differed from the Model Rule or
    where it deemed additional guidance appropriate.

5
ExampleABA Model Rule 1.12 Former Judge,
Arbitrator, Mediator Or Other Third-Party Neutral
  • (a) Except as stated in paragraph (d), a lawyer
    shall not represent anyone in connection with a
    matter in which the lawyer participated
    personally and substantially as a judge or other
    adjudicative officer or law clerk to such a
    person or as an arbitrator, mediator or other
    third-party neutral, unless all parties to the
    proceeding give informed consent, confirmed in
    writing.
  • ABA COMMENT
  • 1 This Rule generally parallels Rule 1.11. The
    term "personally and substantially" signifies
    that a judge who was a member of a multimember
    court, and thereafter left judicial office to
    practice law, is not prohibited from representing
    a client in a matter pending in the court, but in
    which the former .

6
Example SCR 201.12 Former judge, arbitrator,
mediator or other 3rd-party neutral
  • (a) Except as stated in par. (d), a lawyer shall
    not represent anyone in connection with a matter
    in which the lawyer participated personally and
    substantially as a judge or other adjudicative
    officer or law clerk to such a person or as an
    arbitrator, mediator or other 3rd-party neutral.
  • WISCONSIN COMMITTEE COMMENT
  • Paragraph (a) differs from the Model Rule in that
    the conflict identified is not subject to waiver
    by consent of the parties involved. As such,
    paragraph 2 of the ABA Comment should be read
    with caution. Paragraph (d) differs in that
    written consent of the parties is required.
  • ABA COMMENT
  • 1 This Rule generally parallels Rule 1.11. The
    term "personally and substantially" signifies
    that a judge who was a member of a multimember
    court, and thereafter left judicial office to
    practice law, is not prohibited from representing
    a client in a matter pending in the court, but in
    which the former .

7
The Challenges of Technology Competence and
Confidentiality
8
Technology affects nearly every aspect of our
legal work.
  • How we store client information,
  • How we communicate with clients,
  • How we conduct discovery,
  • How we engage in research,
  • How we market legal services, and
  • How we deliver legal services (e.g., in an
    office, over the Internet, or through virtual law
    offices).

9
Technology Traps
  • Mobile Devices
  • Sending Emails
  • Receiving Inadvertently Sent Emails
  • Lawyer Websites and Unsolicited Emails
  • Metadata
  • The Cloud
  • Electronic Files

10
The Duty of Competence
  • ABA Model Rule 1.1 Competence
  • A lawyer shall provide competent representation
    to a client. Competent representation requires
    the legal knowledge, skill, thoroughness and
    preparation reasonably necessary for the
    representation.
  • SCR 201.1 Competence
  • A lawyer shall provide competent representation
    to a client. Competent representation requires
    the legal knowledge, skill, thoroughness and
    preparation reasonably necessary for the
    representation.

11
2012 Amendment to Model Rule 1.1Comment
  • Maintaining Competence
  • 68 To maintain the requisite knowledge and
    skill, a lawyer should keep abreast of changes in
    the law and its practice, including the benefits
    and risks associated with relevant technology,
    engage in continuing study and education and
    comply with all continuing legal education
    requirements to which the lawyer is subject.

12
The Duty of Confidentiality
  • SCR 201.6 Confidentiality
  • (a) A lawyer shall not reveal information
    relating to the representation of a client unless
    the client gives informed consent, except for
    disclosures that are impliedly authorized in
    order to carry out the representation, and except
    as stated in pars. (b) and (c).
  • WISCONSIN COMMITTEE COMMENT
  • The rule retains in paragraph (b) the mandatory
    disclosure requirements that have been a part of
    the Wisconsin Supreme Court Rules since their
    initial adoption. Paragraph (c) differs from its
    counterpart, Model Rule 1.6(b), as necessary to
    take account of the mandatory disclosure
    requirements in Wisconsin. The language in
    paragraph (c)(1) was changed from "reasonably
    certain to "reasonably likely" to comport with
    sub. (b). Due to substantive and numbering
    differences, special care should be taken in
    consulting the ABA Comment.

13
Duty of Confidentiality, continued
  • ABA Model Rule 1.6 Confidentiality Of Information
  • A lawyer shall not reveal information relating to
    the representation of a client unless the client
    gives informed consent, the disclosure is
    impliedly authorized in order to carry out the
    representation or the disclosure is permitted by
    paragraph (b).
  • 2012 Amendment
  • (c) A lawyer shall make reasonable efforts to
    prevent the inadvertent or unauthorized
    disclosure of, or unauthorized access to,
    information relating to the representation of a
    client.

14
Protecting Information on Mobile Devices The
Duties of Competence and Confidentiality
  • Use a strong password to protect laptops,
    tablets, smart phones.
  • Use a privacy screen.
  • Use a remote access program to wipe or lock
    device.
  • Purge data from discarded devices.
  • Use firewalls.
  • Use virus and spyware programs.
  • Update operating systems with latest security
    protections.
  • Configure software and hardware to minimize
    risks.
  • Encrypt sensitive information.
  • Avoid public WI-FI when transmitting client
    information.

15
Sending EmailsThe Duties of Competence and
Confidentiality
  • When sensitive information is involved, discuss
    the risks of email with the client and follow
    clients instructions.
  • If you have enabled the auto-fill function for
    email addresses, be careful that you do not
    inadvertently send the email to the wrong person.
  • When replying to an email that has several
    recipients, make sure that you do not reply to
    all if you want to reply to only one person.

16
Duties of a Lawyer Who Receives an Inadvertently
Sent Email SCR 204.4(b)
  • When a lawyer receives an email (or letter or
    fax) that was intended for someone else, the
    lawyers only duty is to promptly notify the
    sender.
  • Whether the lawyer chooses to read the document
    is left to the discretion - professional
    judgment - of the lawyer. ABA Comment 3

17
Lawyer Websites and Unsolicited EmailsAvoid
Creating the Unintentional Client
  • Who is a Prospective Client?
  • A Prospective Client is a person who discusses
    with a lawyer the possibility of forming a
    client-lawyer relationship with respect to a
    matter. SCR 201.18(a).
  • A person who sends a unilateral and unsolicited
    communication has no reasonable expectation that
    the lawyer is willing to discuss the possibility
    of forming a client-lawyer relationship.

18
  • Consequently, the duties a lawyer owes
    prospective clients are not triggered by an
    unsolicited email that the lawyer receives out of
    the blue from a stranger in search of counsel, so
    long as the lawyer did not do or publish anything
    that would lead reasonable people to believe
    that they could share private information with
    the lawyer without first meeting the lawyer and
    establishing a lawyer-client relationship.

19
Formation of a Client-Lawyer Relationship
  • Restatement (Third) of the Law Governing Lawyers,
    14 provides
  • A relationship of client and lawyer arises when
  • (1) a person manifests to a lawyer the person's
    intent that the lawyer provide legal services for
    the person and either
  • (a) the lawyer manifests to the person consent to
    do so or
  • (b) the lawyer fails to manifest lack of consent
    to do so, and the lawyer knows or reasonably
    should know that the person reasonably relies on
    the lawyer to provide the services or
  • (2) a tribunal with power to do so appoints the
    lawyer to provide the services.

20
Duties Owed to Prospective Clients
  • The Duty of Confidentiality
  • If a person who provides information through a
    lawyers website or sends an email is classified
    as a prospective client within the meaning of
    SCR 201.18(a), then the lawyer owes that
    prospective client the duty of confidentiality.
    It is the same duty of confidentiality that the
    lawyer owes a current client.
  • The Duty of Loyalty
  • The lawyer may represent a party who is adverse
    to the prospective client in the same or
    substantially related matter unless the lawyer
    received information from the prospective client
    that could be significantly harmful to the
    prospective client in the matter. In other words,
    SCR 201.18(c) forbids a later representation
    adverse to the prospective client if the
    information disclosed by the prospective client
    would be significantly harmful to the
    prospective client in the matter.

21
Avoid Creating the Unintentional Client
  • Use disclaimers to prevent advertisements or
    solicitations from being interpreted as the
    lawyers agreement to create a client-lawyer
    relationship.
  • These disclaimers must have two separate and
    clear warnings
  • 1. there is no client-lawyer relationship, and
  • 2. the email communications are not
    confidential.
  • These warnings should be short and easily
    understood by a layperson.
  • The use of nonlawyer staff to screen or
    communicate with the person will not prevent the
    person from becoming a prospective client or
    relieve the lawyer of the duties owed to a
    prospective client.

22
Example Disclaimer
  • If you are seeking representation, please read
    the following notice before sending an e-mail to
    our firm
  • Sending us an e-mail will not make you a client
    of our firm. Until we have agreed to represent
    you, anything you send us will not be
    confidential or privileged. Before we can
    represent you, a lawyer will first take you
    through our conflict of interest procedure and
    see that you are put in touch with the lawyer
    best suited to handle your matter.
  • If you proceed with an e-mail, you confirm that
    you have read and understood this notice.

23
Example Disclaimer
  • CAUTION Before you proceed, please note.
  • Do not send us any information that you or anyone
    else considers to be confidential or secret
    unless we have first agreed to be your lawyers in
    that matter. Any information you send us before
    we agree to be your lawyers cannot be protected
    from disclosure.
  • By clicking accept you agree that our review of
    the information contained in the e-mail and any
    attachments you send to us will not create a
    lawyer-client relationship with us, and will not
    preclude any lawyer in our firm from representing
    a party in any matter where that information is
    relevant, even if that information is highly
    confidential and could be used against you.

24
Example Disclaimer
  • NOTICE
  • Please note that we cannot act as your attorney
    or provide you with any legal advice until we
    know that doing so will not create a conflict of
    interest. While we welcome inquiries, please do
    not send us any secret, confidential, or
    privileged information until you receive a
    written confirmation from us that we have agreed
    to serve as your lawyer. Unsolicited emails from
    non-clients containing confidential or secret
    information cannot be protected from disclosure.
    The best way for you to discuss a possible
    representation is to call us at (phone number).
    We will make every effort to put you in touch
    with a lawyer suited to handle your matter.

25
Metadata Duties of Sender
  • A lawyer who sends an electronic document is
    required by SCR 201.6 and SCR 201.1 to stay
    reasonably informed about the types of metadata
    that are included in the electronic document that
    he or she generates.
  • A lawyer who sends an electronic document is
    required to take steps, when necessary, to remove
    (scrub) the metadata to avoid disclosing
    information relating to the representation of the
    client.

26
Metadata Duties of Receiver
  • A lawyer who receives an electronic document is
    not prohibited by the rules from searching for
    metadata contained in the document. Searching
    (mining) for metadata is not deceitful or
    dishonest and does not violate SCR 208.4(c).
  • A lawyer who chooses to search a document for
    metadata and discovers metadata of material
    significance must promptly notify the sender as
    required by SCR 204.4(b). A receiving lawyer
    should assume, unless circumstances indicate
    otherwise, that any metadata was inadvertently
    sent.
  • Lawyers are not compelled to routinely search
    electronic documents for metadata.

27
Cloud Computing
  • Cloud computing has dramatically changed the way
    lawyers store , retrieve, and access client
    information.
  • Cloud computing encompasses several types of
    services including
  • web-based email (gmail, hotmail),
  • online data storage (Dropbox, GoogleDrive), and
  • software-as-a-service (Clio,RocketMatter,
    MyCase).
  • Recent ethics opinions (but not from Wisconsin)
    conclude that it is acceptable for lawyers to use
    cloud computing, but lawyers must use reasonable
    care when selecting a cloud or internet service
    provider.

28
Using the CloudPotential Confidentiality
Problems
  • Storage in countries with less legal protection
    for data
  • Unclear policies regarding data ownership
  • Failure to adequately back up data
  • Insufficient encryption
  • Unclear policies for notice of data breach
  • Unclear data destruction policies
  • Bankruptcy of cloud providers
  • Protocol for change of cloud providers
  • Disgruntled or dishonest insiders
  • Technical failures
  • Server crashes
  • Viruses
  • Data corruption
  • Data destruction
  • Business interruption
  • Absolute loss

29
Factors for Determining Reasonable Care
  • Examine the providers terms of use and written
    policies and procedures with respect to data
    privacy and the handling of client information.
  • Ensure that the providers terms of use and
    written policies and procedures prohibit
    unauthorized access to data stored on the
    providers system, including access by the
    provider itself for any purpose other than
    conveying or displaying the data to authorized
    users.

30
Factors for Determining Reasonable Care ,
continued
  • Ensure that the providers terms of use and
    policies and procedures, as well as its
    functional capabilities, give the lawyer
    reasonable access to, and control over, the data
    stored on the providers system in the event that
    the lawyers relationship with the provider is
    interrupted for any reason.
  • Examine the providers existing practices
    (including data encryption, password protection,
    and system backups) and available service history
    (including reports of known security breaches or
    holes) to reasonably ensure that data stored on
    the providers system will not be intentionally
    or inadvertently disclosed or lost.

31
Factors for Determining Reasonable Care ,
continued
  • Periodically revisit and reexamine the providers
    policies and procedures to ensure that they
    remain compatible with the lawyers professional
    obligations to protect client information under
    SCR 201.6 and SCR 201.1.

32
Electronic Files
  • The lawyer must protect important original
    documents from destruction or loss.
  • The lawyer must retain any original documents
    that have an economic, legal, evidentiary,
    personal, or other value in their original form.
  • The lawyer must be able to provide the file to
    the client in a format that is usable by the
    client.
  • The lawyer must take reasonable steps to protect
    the confidentiality of electronically stored
    client documents.

33
Nonlawyer Investment or Involvement in Law Firms
Rule 5.4
  • Nonlawyer ownership in law firms has long been
    forbidden by the ABA rules and by every U.S.
    jurisdiction except the District of Columbia,
    which for two decades has allowed partial
    nonlawyer ownership of law firms.

34
Wisconsin Rule on Nonlawyer InvolvementSCR
205.4
  • (b) A lawyer shall not form a partnership with a
    nonlawyer if any of the activities of the
    partnership consist of the practice of law.
  • (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
  • (1) a nonlawyer owns any interest therein, except
    that a fiduciary representative of the estate of
    a lawyer may hold the stock or interest of the
    lawyer for a reasonable time during
    administration
  • (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 or
  • (3) a nonlawyer has the right to direct or
    control the professional judgment of a lawyer.

35
D.C. Rule on Nonlawyer InvolvementDistrict of
Columbia Rule of Professional Conduct 5.4
  • District of Columbia Rule of Professional Conduct
    5.4 states, in part
  • (b) A lawyer may practice law in a partnership or
    other form of organization in which a financial
    interest is held or managerial authority is
    exercised by an individual nonlawyer who performs
    professional services which assist the
    organization in providing legal services to
    clients, but only if
  • (1) The partnership or organization has as its
    sole purpose providing legal services to clients
  • (2) All persons having such managerial authority
    or holding a financial interest undertake to
    abide by these Rules of Professional Conduct
  • (3) The lawyers who have a financial interest or
    managerial authority in the partnership or
    organization undertake to be responsible for the
    nonlawyer participants to the same extent as if
    nonlawyer participants were lawyers under Rule
    5.1
  • (4) The foregoing conditions are set forth in
    writing.

36
New York Law Firm Argues That Rule 5.4 Is
Unconstitutional
  • Jacoby Meyers, LLP brought an action against
    the Presiding Justices of the First, Second,
    Third, and Fourth Departments of the Appellate
    Division of the Supreme Court of the State of New
    York, contending that New York Rule of
    Professional Conduct 5.4, which prohibits
    non-lawyer investment in law firms,
    unconstitutionally burdens various fundamental
    rights under the First and Fourteenth Amendments
    and violates the dormant Commerce Clause.

37
Jacoby Meyers argued
  • The new realities of the global legal marketplace
    should be recognized and Rule 5.4's absolute bar
    of non-lawyer investments in law firms should be
    struck down as unconstitutional.
  • The "parade of horrors" caused by nonlawyer
    involvement in firms have not materialized in the
    District of Columbia, which has allowed partial
    non-lawyer ownership for two decades, or in
    Australia and the United Kingdom, both of which
    permit non-lawyers to obtain ownership interests
    in law firms.
  • Rule 5.4 puts law firms at a disadvantage to
    Internet legal service providers, such as
    LegalZoom, and outsourcing companies, such as
    Pangea3, which are not law firms and which can
    access capital markets to expand and adapt to
    changing economic conditions.

38
  • Social Media and Internet Marketing Online
    Dangers and How to Avoid Them

39
Forms of Internet Communication
  • Social Media (e.g., Facebook)
  • Professional Networks (e.g., LinkedIn)
  • Rating Services (e.g. Avvo)
  • Firm Websites
  • Blogs
  • Microblogs (e.g., Twitter)
  • Online Video (e.g., YouTube)
  • Listservs
  • Online Referral Networks

40
Confidentiality
  • The law firm is Vegas what goes on there, stays
    there!
  • The duty of confidentiality prohibits the
    disclosure of all information relating to the
    representation of the client, whatever its
    source.
  • The duty of confidentiality prohibits the
    disclosure of even the clients name, even the
    fact that someone has hired a lawyer, and even
    information that is in court-filed public
    documents or available from other sources.

41
Some General Rules for Online Presence
  • Remember that any information relating to the
    representation of the client, even information
    that is available from other sources or is
    publicly-filed, must not be disclosed without the
    informed consent of the client.
  • Get client consent before announcing successful
    court decisions or transactions on firm websites,
    blogs, microblogs, or listservs.
  • Do not post hypotheticals on listservs that
    contain too much specific information that could
    be identified by opposing counsel, who may be on
    the listserv.
  • Prohibit lawyers, staff, and vendors from posting
    on their own personal social media sites any
    information about clients.

42
Spoliation
  • Spoliation is the act of destroying evidence.
  • Lawyers must caution clients against destroying
    possibly discoverable information or evidence.
  • Even if there are privacy settings, anything
    posted on social media sites may be discoverable
    if relevant.
  • Deleting or destroying a social media site when
    litigation is reasonably anticipated may
    constitute spoliation of evidence.

43
Conflicts of Interest
  • When lawyers use social media, they may risk
    unintentionally forming a lawyer-client
    relationship.
  • Firm websites that do not have effective
    disclaimers may result in an unintentional
    client-lawyer relationship. The person responding
    may believe that the client-lawyer relationship
    is created solely by virtue of his or her
    response.
  • Answering legal questions online, even when
    posted by anonymous inquirers may create a
    conflict of interest and result in
    disqualification.

44
Communications Concerning a Lawyers Service
  • SCR 207.1 prohibits lawyers from making false or
    misleading communication about the lawyer or the
    lawyers services. A false or misleading
    communication is defined as
  • a. any material misrepresentation of fact or law,
    whether by omission or commission
  • b. any statement that is likely to create
    unjustified expectations, such as a statement
    without a caveat about prior results
  • c. any comparison with other lawyers that cannot
    be factually substantiated and
  • d. any paid testimonial that does not indicate
    that payment had been made or whether it was made
    by the client.

45
Monitor Your Online PresenceMake Sure All
Information Complies with the Rules
  • SCR 207.1 applies to not only what the lawyer
    says, but also may apply to what others say about
    the lawyer.
  • A lawyer will be responsible for any content that
    they directly or indirectly place, disseminate,
    or endorse.
  • While a lawyer is not responsible for what others
    write about him or her unbidden, the lawyer is
    responsible if the site allows the lawyer to
    claim the listing and exercise control over the
    information. (South Carolina Ethics Advisory
    Opinion)

46
You Make the Call
  • Lawyer has a LinkedIn page and Client
    recommends Lawyer. Clients recommendation
    reads
  • Lawyer is the best lawyer in Wisconsin. He
    guaranteed I would get my deal done in 20 days
    and he specializes in complex contract matters.
    And his fees are half what other lawyers charge.
  • Lawyer accepts the recommendation. Has Lawyer
    violated the Rules of Professional Conduct?

47
Advertising
  • SCR 207.2(a) permits a lawyer to advertise
    services through written, recorded, or electronic
    communication.
  • However, SCR 207.2(b) prohibits a lawyer from
    giving anything of value to a person for
    recommending the lawyers services. An exception
    to this prohibition is the cost of advertising.
  • In other words, a lawyer may pay for the cost of
    advertising, but may not give anything of value
    (pay) for someone to provide a recommendation
    of the lawyers services.
  • Internet advertising has created some confusion
    about the difference between online, for-profit
    companies that provide permissible advertising
    (pay-per-click) and those that deliver
    impermissible lawyer recommendations
    (pay-per-lead).

48
Permissible Advertising Pay-Per-Click
  • Pay-per-click advertisements are the modern
    equivalent to paid advertising in the yellow
    pages.
  • An intermediarywhether the yellow pages, a
    television station, or Googledelivers a lawyers
    advertising message to a consumer, and the
    consumer understands the message to be an
    advertisement provided by an intermediary acting
    impartially.
  • In a pay-per-click situation, a consumer enters a
    search term into a search engine and is provided
    with ads based upon the search term and the
    specific information sought.
  • Such pay-per-click ads are clearly designated as
    being advertisements.

49
Yellow Pages Regular Listings and Paid Ads
  • Regular Listings
    Paid Ads

50
Google Search Paid Ads and Regular Listings
  • Paid Ads
  • Regular Listings

51
Impermissible Lawyer Recommendation
Pay-Per-Lead
  • Pay-per-lead services function much differently
    from pay-per-click advertising. Pay-per-lead
    online entities market to the consumer by
    promising to provide a specific service the
    delivery of a specially-selected attorneys
    contact information based on the consumers
    specific legal problem.
  • These services frequently tout the screening of
    their attorneys as the reason consumers should
    use their services, using terminology such as
    verified, qualified, or legal specialists.

52
Impermissible Lawyer Recommendation
Pay-Per-Lead
  • Find Expert Lawyers
  • Search for Legal Specialists

53
Impermissible Lawyer Recommendation
Pay-Per-Lead
  • These services do nothing more than simply
    recommend attorneys willing to pay the for-profit
    companys fee.
  • Even if these pay-per-lead services do not
    explicitly endorse or vouch for the
    attorneys abilities or qualities, it is implicit
    in their very nature that there is some reason
    for their selection of, and referral to, a
    particular attorney for a given client.
  • For some services, they sell a given zip code to
    an attorney without ever informing the consumer
    that the purported recommendation they are
    providing is based solely on the lawyers
    willingness to pay for the right to referrals
    from that zip code.

54
Dishonest Representation
  • It is also a generally dishonest representation
    to the consumer, and a clear violation of ABA
    Model Rule 7.1, Communications Concerning a
    Lawyers Services. The consumer is not told that
    the right attorney selected for him/her was in
    fact simply the attorney who paid for the right
    to be represented as the right attorney to a
    particular group or in a particular geographic
    region.

55
Differing Interpretations
  • Arizona, Washington, Kentucky, and New York have
    found that websites act as prohibited for-profit
    referral services when they purport to evaluate
    the needs of the consumer to match the consumer
    to the attorney, or vouch for the qualifications
    of the participating attorneys.
  • Texas and Ohio found websites to provide
    permissible advertising rather than acting as
    impermissible referral services, but with the
    caveat that sufficient information must be
    presented to the consumer and the websites must
    make no assertions about the qualifications of
    the participating attorneys.
  • South Carolina sets forth the rule that any
    website restricting attorney participation is an
    impermissible referral service and not
    advertising.
  • New Jersey found a for-profit pay-per-lead
    service, even when designed to avoid
    classification as an impermissible lawyer
    referral service, may still be misleading and in
    violation of Rule 7.1.

56
Groupon and Daily Deal Websites
  • These websites typically send consumers an email
    offering the opportunity to purchase a
    certificate for services or products from a
    retailer at a discounted rate of at least 50
    percent.
  • For example, a law firm might agree to sell a
    coupon entitling the purchaser to 500 worth of
    legal services for a discounted rate of 250. A
    purchaser would pay the website 250 and receive
    a certificate for 500 to redeem legal services
    with the law firm. The website would keep half of
    the revenue -125 in this example - and remit the
    remaining 125 to the law firm.
  • Some states have issued ethics opinions approving
    the use of these websites, concluding that the
    fee retained by the website is merely an
    advertising cost and not sharing a fee with a
    nonlawyer. Some states, like Alabama, have issued
    ethics opinions disapproving of these sites.

57
Groupon and Daily Deal Websites
  • The Alabama ethics opinion concluded that the use
    of websites like Groupon violates the Rules of
    Professional Conduct in several ways
  • The share of fees, which websites of this type
    keep, cannot be justified as a reasonable cost of
    advertising permitted under Rule 7.2(c). Instead,
    it is an impermissible sharing of fees under
    Rule 5.4(a). The sites do not charge a flat-rate
    fee or even a fee based on the website's traffic,
    but instead take a percentage of each purchase
    and charge an amount not tied in any manner to
    the reasonable cost of the advertisement.
  • Under the fee model used by Groupon, half of the
    legal fee the customer pays is claimed by Groupon
    at the time of purchase. This makes it impossible
    for the lawyer to place the entire unearned legal
    fee into trust as required by Rule 1.15.

58
Groupon and Daily Deal Websites
  • A participating lawyer would be obligated to make
    a full refund to a purchaser who demanded his
    money back before any legal services were
    provided, regardless of the fact that half of the
    fees were claimed by Groupon. Failure to make a
    complete refund would be viewed as charging a
    clearly excessive fee in violation of Rule 1.5(a)
    or as failing to return the client's property as
    required by Rule 1.16(d) when a client's
    representation ends.
  • A lawyer's participation in daily deal websites
    could embroil the lawyer in potential conflicts
    of interest among the lawyer's former and current
    clients, due to the inability to perform any
    conflict check before the payment of legal fees
    by the potential client.
  • The lawyers participation could also result in
    violations of Rule 1.1, which requires competent
    representation, because the lawyer would have no
    opportunity to determine his ability to represent
    each purchaser before being hired.

59
Direct Solicitation and Real-Time Electronic
Contact Targeted Emails, Facebook Messages, Text
Messages, and Twitter
  • SCR 207.3(a) prohibits a lawyer from soliciting
    professional employment for pecuniary gain by
    in-person or live telephone or real-time
    electronic contact unless the prospective client
    is a lawyer or has a prior relationship with the
    soliciting lawyer.
  • SCR 207.3 does not, however, define real-time
    electronic contact. However, most forms of
    internet communication such as targeted emails,
    Facebook messages, text messages, and Twitter are
    not considered to be real-time electronic
    contact.
  • The prevailing position is that emails are a form
    of targeted direct mail solicitation, which is
    permitted by SCR 207.3(c), and not a real-time
    electronic contact.

60
Direct Solicitation and Real-Time Electronic
Contact Chat Rooms
  • Chat rooms are by definition real time
    communication tools, and some ethics opinions
    view lawyer communications in chat rooms as
    impermissible direct contact.
  • Other ethics opinions have concluded that chat
    room communication is not a prohibited direct
    contact because the interaction is different from
    in-person direct communication and telephone
    calls. During an in-person and telephone
    communication with an overbearing lawyer, the
    prospective client can walk away or hang up the
    phone, but it is socially awkward to do so. In
    chat room interactions, however, a recipient can
    readily and summarily decline to participate in
    the communication.

61
Pretexting and Dissembling
  • A lawyer is required by two rules to be truthful
    in his or her statements to others.
  • First, SCR 208.4(c) prohibits a lawyer from
    engaging in conduct involving dishonesty, fraud,
    deceit or misrepresentation.
  • Misrepresentation is defined in SCR 201.0(h) and
    denotes communication of an untruth, either
    knowingly or with reckless disregard, whether by
    statement or omission, which if accepted would
    lead another to believe a condition exists that
    does not actually exist.
  • Second, SCR 204.1(a) prohibits a lawyer, in the
    course of representing a client, from making a
    false statement of material fact or law to a 3rd
    person.
  • These rules apply to nonlawyer assistants SCR
    208.4(a) prohibits nonlawyer assistants from
    engaging in conduct that the lawyer could not
    engage in.

62
SCR 204.1(b) A lawyer may advise or supervise
others with respect to lawful investigative
activities.
  • Notwithstanding SCR 208.4(c) and SCR 204.1(a),
    a lawyer may advise or supervise others with
    respect to lawful investigative activities even
    though the conduct involves some form of
    deception, such as the use of testers to
    investigate unlawful discrimination. Wisconsin
    Committee Comment.
  • When the lawyer personally participates in the
    deception, serious questions arise.
  • SCR204.1(b) recognizes that , where the law
    expressly permits it, lawyers may have limited
    involvement in certain investigative activities
    involving deception.
  • Lawful investigative activity can involve the
    lawyer as an advisor or supervisor only when the
    lawyer in good faith believes there is a
    reasonable possibility that unlawful activity has
    taken place, is taking place or will take place
    in the foreseeable future.

63
Friending on Facebook and MySpacePretexting
Prohibited
  • As a general rule, SCR 204.1(b) does not permit
    lawyers and their non-lawyer assistants to lie
    about their identity or why they are contacting
    someone online.
  • A lawyer who represents a client in a pending
    litigation, and who has access to the Facebook or
    MySpace network used by another party in
    litigation, may access and review the public
    social network pages of that party to search for
    potential impeachment material.
  • As long as the lawyer does not "friend" the other
    party or direct a third person to do so,
    accessing the social network pages of the party
    will not violate Rule 8.4 (prohibiting deceptive
    or misleading conduct) and Rule 4.1(prohibiting
    false statements of fact or law).

64
Researching Jurors on the Internet
  • In 2011, the New York County Lawyers Association
    published a formal opinion on the ethics of
    conducting juror research using social media.
    This opinion examined whether a lawyer may
    conduct juror research during voir dire and trial
    using Twitter, Facebook and other similar social
    networking sites.
  • The opinion concluded that it is proper and
    ethical under Rule 3.5 for a lawyer to undertake
    a pretrial search of a prospective jurors social
    networking site, provided there
  • is no contact or communication with the
    prospective juror and
  • the lawyer does not seek to friend jurors,
    subscribe to their Twitter accounts, send jurors
    tweets or otherwise contact them.
  • What constitutes contact or communication
    within the meaning of Rule 3.5 was not addressed
    by this opinion. New Yorks Rule 3.5, like SCR
    203.5, prohibits a lawyer from communicating ex
    parte with a prospective juror.

65
Researching Jurors on the Internet
  • In June 2012, the New York City Bar Association
    released a ground-breaking ethical opinion that
    attempted to define or at least clarify the
    meaning of communication within the context of
    Rule 3.5.
  • The opinion states that attorneys might violate
    the New York Rules of Professional Conduct if
    they contact a prospective juror through a social
    media site, even if the contact was
    unintentional.
  • According to the opinion, if a social media site
    automatically notifies a juror when another
    person has viewed the jurors profile page, a
    lawyer communicates with that juror simply by
    looking at the jurors publicly available profile.

66
Researching Jurors on the Internet
  • Consequently, whether research conducted through
    a particular service will constitute a prohibited
    communication under the Rules may depend in part
    on, among other things, the technology, privacy
    settings and mechanics of each service.
  • Attorneys must educate themselves about how
    social media websites work before they use those
    websites. It is the duty of the attorney to
    understand the functionality and privacy settings
    of any service he or she wishes to utilize for
    research, and to be aware of any changes in the
    platforms settings or policies to ensure that no
    communication is received by a juror or venire
    member.
  • A request or notification transmitted through a
    social media service may constitute a
    communication even if it is technically generated
    by the service rather than the attorney, is not
    accepted, is ignored, or consists of nothing more
    than an automated message of which the sender
    was unaware. In each case, at a minimum, the
    researcher imparted to the person being
    researched the knowledge that he or she is being
    investigated.

67
  • Outsourcing and Supervising

68
Due Diligence
  • The hiring lawyer should make reasonable inquiry
    and act competently in choosing a provider and
    use reasonable measures to follow-up and
    supervise the providers work, which should bring
    the lawyer in compliance with the requirements of
    supervision required in Rule 5.1 and 5.3.
  • The extent of this obligation will depend on the
    circumstances.

69
Protecting ConfidentialityProcedures Used by
Outsourcing Providers
  • Many outsourcing providers require their lawyer
    and nonlawyer employees of to sign
    confidentiality agreements, and some providers
    require employees to sign new and separate
    confidentiality agreements for each new
    assignment.
  • Providers use security measures such as
    encryption, malware protection, and firewalls to
    protect electronic information.
  • Providers use biometric and other security
    measures, such as separate premises or areas for
    each project, to ensure only authorized physical
    access to data.

70
Protecting ConfidentialityProcedures Used by
Outsourcing Providers
  • Providers use continuous video monitoring and
    monitoring of employee computers.
  • Providers perform repeated identity checks within
    buildings, elevators, and other areas where work
    is being performed.
  • Providers frequently disable the portals on
    employee computers so that portable data storage
    devices cannot be used to remove information from
    the premises.
  • Providers perform extensive background checks on
    employees.
  • Providers perform periodic internal and external
    audits of all of the security measures.

71
Service Agreements
  • Written service agreement should be used when
    outsourcing to protect both the law firm and the
    client.
  • The agreement should include provisions regarding
    confidentiality, security, conflicts,
    unauthorized practice of law issues, and client
    contact. It should also include assurances that
    the third-party vendor will meet all professional
    obligations of the hiring lawyer.

72
Degree of SupervisionSupervision of Lawyers
Outside the Firm
  • Rule 1.1 (Competence) requires a lawyer to
    perform legal services competently. In August
    2012, the ABA amended the Comments to Rule 1.1
    in light of the frequency with which lawyers now
    outsource work to another lawyer or law firm. The
    new Comment 6 refers specifically to the
    practice of retaining or contracting with lawyers
    outside the firm.

73
New Comment to ABA Model Rule 1.1
CompetenceRetaining or Contracting With Other
Lawyers
  • Before a lawyer retains or contracts with other
    lawyers outside the lawyer's own firm to provide
    or assist in the provision of legal services to a
    client, the lawyer
  • 1. should ordinarily obtain informed consent
    from the client, and
  • 2. must reasonably believe that the other
    lawyers services will contribute to the
    competent and ethical representation of the
    client.

74
Retaining or Contracting With Other
LawyersReasonableness Factors
  • The reasonableness of the decision to retain or
    contract with other lawyers outside the lawyer's
    own firm will depend upon the circumstances,
    including
  • the education, experience, and reputation of the
    nonfirm lawyers
  • the nature of the services assigned to the
    nonfirm lawyers
  • the legal protections, professional conduct
    rules, and ethical environments of the
    jurisdictions in which the services will be
    performed, particularly relating to confidential
    information and

75
Retaining or Contracting With Other
LawyersCompliance with Other Rules
  • When determining whether the nonfirm lawyers
    services will contribute to the competent and
    ethical representation of the client, the lawyer
    should consider not only Rule 1.1 (competence),
    but also
  • Rule 1.2 (allocation of authority),
  • Rule 1.4 (communication with client),
  • Rule 1.5(e) (fee sharing),
  • Rule 1.6 (confidentiality), and
  • Rule 5.5(a) (unauthorized practice of law).
  • Moreover, the lawyer should also ensure that the
    nonfirm lawyers work is performed competently.

76
Degree of SupervisionSupervision of Nonlawyers
Outside the Firm
  • In August 2012, the ABA amended the Comments to
    Model Rule 5.3 (Responsibilities regarding
    nonlawyer assistants) to clarify the meaning of
    the Rule with regard to the use of nonlawyer
    assistants outside the firm.
  • A lawyer may use nonlawyers outside the firm to
    assist the lawyer in rendering legal services to
    the client.
  • Examples include the retaining an investigative
    or paraprofessional service, hiring a document
    management company to create and maintain a
    database for complex litigation, sending client
    documents to a third party for printing or
    scanning, and using an internet based service to
    store client information.

77
New Comment to Rule 5.3 Using Nonlawyer
Assistants Outside the Firm
  • When using such services outside the firm, a
    lawyer must make reasonable efforts to ensure
    that the services are provided in a manner that
    is compatible with the lawyers professional
    obligations. The extent of this obligation will
    depend upon the circumstances, including
  • the education, experience and reputation of the
    nonlawyer
  • the nature of the services involved
  • the terms of any arrangements concerning the
    protection of client information and
  • the legal and ethical environments of the
    jurisdictions in which the services will be
    performed. particularly with regard to
    confidentiality.

78
Using Nonlawyer Assistants Outside the Firm
Compliance with Other Rules
  • When determining whether the use of nonlawyer
    assistants outside the firm is compatible with
    the lawyers professional obligations, the lawyer
    should consider
  • Rule 1.1 (competence),
  • Rule 1.2 (allocation of authority),
  • Rule 1.4 (communication with client),
  • Rule 1.6(confidentiality),
  • Rule 5.4(a) (professional independence of the
    lawyer), and
  • Rule 5.5(a) (unauthorized practice of law).
  • Moreover, when retaining or directing a nonlawyer
    outside the firm, a lawyer should communicate
    directions appropriate under the circumstances to
    give reasonable assurance that the nonlawyer's
    conduct is compatible with the professional
    obligations of the lawyer.

79
Guidance from Ethics Opinions Using Nonlawyer
Assistants Outside the Firm
  • The outsourcing lawyer needs to make reasonable
    inquiry and act competently when selecting
    providers, and then take reasonable steps to
    follow up and supervise the third party's work.
  • When a lawyer uses outside nonlawyers for legal
    support services such as conducting legal
    research, reviewing document production, or
    drafting due diligence reports, pleadings, or
    legal memorandums, adequate supervision must be
    provided to ensure competent representation,
    discharge supervisory duties, and avoid aiding
    unauthorized practice.
  • The lawyer must retain ultimate responsibility
    for legal work and cannot yield his independent
    professional judgment to the nonlawyer.

80
Guidance from Ethics Opinions Using Nonlawyer
Assistants Outside the Firm
  • The lawyer who outsources a legal support service
    such as document review to an overseas company
    must take reasonable steps to ensure that the
    company performs its tasks competently and in
    compliance with the ethics rules.
  • An outsourcing lawyer may need to take extra
    steps to ensure that foreign workers are familiar
    with the state's ethics rules governing conflicts
    of interest and confidentiality.
  • If physical separation, language barriers,
    differences in time zones, or inadequate
    communication channels do not allow a reasonable
    and adequate level of supervision to be
    maintained over the foreign assistant's work, the
    lawyer should not retain the foreign assistant to
    provide services.

81
The End
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