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  • Inside Track
    February 04, 2015

    Petition to Change Ethics Rules Addresses Technology and Modern-day Practice

    After two years of study, the State Bar of Wisconsin’s Professional Ethics Committee is recommending an upgrade to the Professional Rules of Conduct for Attorneys. Learn what’s included in a petition headed for the Wisconsin Supreme Court.

    Joe Forward

    Balance, levelFeb. 4, 2015 – A petition that will be filed with the Wisconsin Supreme Court recommends changes to Wisconsin’s attorney ethics rules to address lawyers’ use of technology, outsourcing, and other changes affecting modern-day law practice.

    State Bar Ethics Counsel Tim Pierce says the State Bar’s Professional Ethics Committee recommends the amendments to the Wisconsin Rules of Professional Conduct for Attorneys to reflect recent approved changes to the ABA Model Rules of Professional Conduct, as recommended by the ABA Ethics 20/20 Commission.

    “We are also recommending changes unique to Wisconsin that will clear up some inconsistencies and address other areas perceived as problematic,” Pierce told the State Bar’s Board of Governors, which approved the changes at its meeting last week.

    Adopting these changes, Pierce said, is important to keep Wisconsin’s rules consistent with current professional responsibility law and assist Wisconsin lawyers with guidance that accounts for contemporary practice. The committee studied changes for two years.

    The State Bar-supported petition will now be submitted to the Wisconsin Supreme Court, which must approve any changes to Wisconsin’s attorney ethics rules. The following explains the major changes that are outlined in the petition.

    Screening Disqualified Lawyers

    In certain circumstances, lawyers who move between law firms must be “screened” to ensure the lawyer does not impute a conflict to other members of the new firm.

    Firms must establish screening procedures to ensure lawyers avoid access to communications or files relating to a matter from which they are disqualified.

    An amendment to ABA Comment [9] to Wisconsin Supreme Court Rule (SCR) 20:1.0 adds “information in electronic form” among the types of information that ordinarily must be screened from a disqualified lawyer. The change recognizes that advances in technology make client information more accessible by law firm personnel through electronic means.

    Contracting With Other Lawyers, Maintaining Competence

    SCR 20:1.1 requires lawyers to provide competent representation to clients through legal knowledge, skill, thoroughness, and preparation necessary for the representation.

    Attorneys frequently outsource aspects of their work to attorneys outside the firm. The petition adds several ABA comments about the lawyer’s duty to ensure that outsourced work is performed competently. For instance, the outsourcing lawyer must reasonably believe that the other lawyers’ services will contribute to the competent and ethical representation of the client.

    When lawyers from more than one law firm provide legal services to a client, new ABA comments urge lawyers to “consult with each other and the client about the scope of their respective representations and the allocation of the responsibility among them.”

    The State Bar Professional Ethics Committee’s petition also recommends adopting a change to the ABA comments to SCR 1.1 that urges lawyers to keep abreast of the “benefits and risks associated with relevant technology” as part of a duty to maintain competence. The now explicit obligation includes competence on cloud computing, email, and metadata.

    Communications

    Under SCR 20:1.4, lawyers must take measures to keep clients informed on matters. Previously, ABA Comment [4] advised lawyers to promptly return telephone calls. Now lawyers are advised to promptly return or acknowledge “client communications.”

    The change merely recognizes that a lawyer’s obligation to promptly respond extends to communications, regardless of the medium used between the lawyer and the client.

    Confidentiality

    The petition recommends amending SCR 20:1.6 (confidentiality) to permit attorneys to reveal information relating to the representation of a client to the extent the lawyer reasonably believes necessary “to detect and resolve conflicts of interest, but only if the revealed information would not compromise the attorney-client privilege or otherwise prejudice the client.”

    Currently, detecting and resolving conflicts of interest is not among the exceptions to the duty of confidentiality. Under new ABA Model Rules, adopted under the petition, lawyers may reveal information relating to the representation of a client if necessary when joining a new law firm, firms are merging, or a lawyer is selling his or her law practice.

    The petition differs from the ABA Model Rules by broadening the exception to all circumstances wherein a lawyer may be required to detect and resolve conflicts.

    “The law firm would be able to disclose the identity and other limited information about the client to detect conflicts and begin the process of seeking waivers,” Pierce said.

    This rule recognizes that lawyers in different firms may need to disclose limited information to each other, or to clients or former clients. The petition adopts ABA Comment [13], providing examples of when the disclosure may prejudice the client.

    Pierce said lawyers will be required to make a good-faith assessment on whether disclosures would compromise the attorney-client privilege and “there will be instances, notwithstanding the exception, where lawyers will be prohibited from disclosure.”

    Protecting Information

    Another amendment to SCR 20:1.6 requires lawyers to “make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating the representation of a client.”

    A violation does not occur if the lawyer makes reasonable efforts to prevent access or disclosure. In determining the reasonableness of such efforts, a lawyer should consider sensitivity of information, the safeguards employed, and the cost and difficulty of employing additional safeguards that may have prevented disclosure, among other factors. Clients may require additional safeguards not required by the rule or give informed consent to forego security measures that may be required under the rule.

    This change recognizes that lawyers’ duty of confidentiality includes lawyers’ use of modern technology, such as cloud-based information management systems.

    “The proposed amendment is intended to make it clear that lawyers have an ethical obligation to make reasonable efforts to prevent these types of disclosures, such as by using reasonably available administrative, technical, and physical safeguards,” the State Bar Professional Ethics Committee notes in its supporting information.

    Duties to Prospective Client

    The petition adds ABA comments to SCR 20:1.18 on duties to prospective clients, adding “consultations” in place of “discussion” with prospective clients as the type of communication that may give rise to the duties owed to prospective clients.

    For instance, lawyers may not use or reveal information learned through a consultation, which includes consultations through electronic communications.

    The comment notes that a consultation likely occurs when a lawyer, through advertising or in person, requests or invites information about a potential representation “without clear and reasonably understandable warnings and cautionary statements that limit the lawyer’s obligations, and person provides information in response.”

    “The [20/20] Commission concluded that the definition of ‘prospective client’ needed to be sufficiently flexible to address the increasing volume of electronic communications that lawyers receive from people who seek legal services,” the draft petition states.

    Inadvertent Disclosures

    The petition adds provisions to SCR 20:4.4 relating to the lawyer’s duty when receiving documents or electronically stored information that is inadvertently sent. This includes embedded data within documents called “metadata.”

    Tim Pierce

    State Bar Ethics Counsel Tim Pierce addresses the State Bar Board of Governors on proposed changes to the rules of professional conduct at it's Jan. 30 meeting. Read coverage of the board meeting.

    Pierce said this is another area in which the Professional Ethics Committee differed slightly from the ABA revisions by providing more guidance to the receiving lawyer.

    Under the petition, when the lawyer knows or reasonably should know a document or electronically stored information contains information protected by the lawyer-client privilege or the work product rule, the lawyer must terminate review or use of the information, promptly notify the sender or the sender’s lawyer, and abide by their instructions with respect to disposition until obtaining a ruling from a court.

    Under current rules, the lawyer’s only duty upon receipt of inadvertently sent information is to promptly notify the sender. The proposed amendment would bring a lawyer’s duties under the disciplinary rules more in line with modern evidentiary law, Pierce says, which generally holds that inadvertent disclosures do not forfeit privilege.

    “I have certainly run into many lawyers who felt that they needed further guidance whenever they received something that appeared to be privileged,” Pierce said.

    Limited Liability Legal Practice

    The proposed rules clarify that an out-of-state limited liability law firm may register to practice law in Wisconsin if at least one lawyer in the firm is licensed in Wisconsin, that lawyer has an ownership interest in the firm, and is the one who signs the registration.

    In addition, lawyers who are “authorized,” but not licensed, to practice law in Wisconsin may still practice law as part of a limited liability organization registered in Wisconsin.

    For instance, lawyers who practice only federal law can practice law in Wisconsin through limited liability organizations that are registered in Wisconsin.

    Previously, such lawyers could only practice law in Wisconsin through sole proprietorships or partnerships. The change addresses the incongruity.

    Law-related Services

    The petition adopts a new ABA Model Rule and Comments regarding obligations in providing law-related services, which are services that might reasonably be performed in conjunction with or relating to legal services but could be performed by nonlawyers.

    In providing law-related services, a lawyer is subject to the Rules of Professional Conduct if the lawyer provides law-related services in circumstances that are “not distinct from the lawyer’s provision of legal services to clients.”

    “Many lawyers are looking to engage in the sale of ancillary products,” said Pierce, noting the sale of title insurance by real estate practitioners as an example.

    “Previously, we simply looked to the ABA Model Rules for guidance. Adopting the rule itself provides greater clarity for Wisconsin lawyers.”

    The ethical rules would also apply if the services are provided by “an entity controlled by the lawyer individually or with others if the lawyers fails to take reasonable measures to assure that a person obtaining the law-related services knows that the services are not legal services and that the protections of the lawyer-client relationship do not exist.”

    The Ethics Committee, in supporting information, says these provisions do not create any new obligations but merely clarify existing obligations and provide a framework for determining when a lawyer should be bound by ethics rules for non-legal services.

    Online Lawyer Advertising

    The petition adds amendments to ABA comments to SCR 7.2, addressing online marketing known as “lead generation,” whereby lawyers pay online entities a fee for generating leads or “clicks” that take prospective clients to the law firm’s website.

    Under the comments, lawyers are permitted to use these services as long as they follow certain safeguards. For instance, lawyers cannot use lead generation services that engage in false or misleading tactics.

    Joe ForwardJoe Forward, Saint Louis Univ. School of Law 2010, is a legal writer for the State Bar of Wisconsin, Madison. He can be reached by email or by phone at (608) 250-6161.

    In addition, lead generators cannot “recommend” the lawyer, vouching for the lawyer’s credentials or abilities, which is consistent with current rules on advertising.

    Other comments deal with restrictions on the division of fees and the professional independence of the lawyer in relation to lead generation services.

    Solicitation of Clients

    The proposal adopts changes to SCR 20:7.3 and related ABA Comments dealing with client solicitation through direct contacts. “Solicitations” are targeted communications to a specific person, as opposed to communications directed to the general public.

    The amendments clarify what constitutes “solicitation” with corresponding restrictions under SCR 20:7.3, and the types of communication not considered “solicitation.”



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