Vol. 77, No. 11, November 2004

Ethics 2000: Understanding Proposed Changes to Professional Conduct Rules

by Daniel W. Hildebrand

This article describes proposed changes to the Rules of Professional Conduct for Attorneys, Chapter 20, Supreme Court Rules.¹ By way of background, in 1997, the American Bar Association (ABA) president established the Ethics 2000 Commission to make a comprehensive study and evaluation of the ABA Model Rules of Professional Conduct. After the commission made its report, the ABA adopted most of the commission's recommendations, resulting in substantial changes to the Model Rules.

These changes were sent to the various states for consideration. In response, the Wisconsin Supreme Court created the Wisconsin Ethics 2000 Committee (the committee).² Its objectives, among other things, were to 1) conduct a comprehensive review of the Wisconsin Rules of Professional Conduct for Attorneys both on their own merits and in light of the changes, both proposed and adopted, to the Model Rules by the ABA Ethics 2000 Commission; 2) recommend changes, if any, to the existing Wisconsin rules via a petition to the supreme court for a rules change; and 3) in the interest of providing full and fair consideration of these important public policy issues, solicit comments from the bench, the bar, and the public.

On July 29, 2004, the committee filed its petition and a comprehensive report recommending changes to Wisconsin's version of the Model Rules.³ In its petition the committee noted that the great majority of the recommended changes would clarify rather than change existing duties.

Key proposals for changes are summarized in the committee's petition to the court.⁴ This article reiterates that summary.

Key Proposals

Rule 1.0 Terminology. This new rule defines certain terms used throughout the rules. Among its most significant provisions is the "informed consent" standard. This standard is applied in the proposed rules to many decisions that clients are responsible for making, including defining the scope of representation (Rule 1.2), authorizing disclosure of information relating to the representation of a client (Rule 1.6(a)), obtaining written waivers of a conflict of interest (Rule 1.7(b)), entering into a business transaction with a client (Rule 1.8(a)), and having a client agree that a third party, including an insurer, pay fees and expenses to the attorney (Rule 1.8(f)). The rules do not currently include "informed consent" as a standard. The committee also proposes definitions for "misrepresentation" (to include only intentional misrepresentation) and "prosecutor" (to include municipal prosecutors and prosecutors in juvenile court). These terms are not presently defined in the Model Rules.

Rule 1.5 Fees. Amendments to this rule are pending before the court by virtue of a petition filed by the court's Fee Arbitration Study Committee. The Ethics 2000 Committee's proposal, which differs in some respects from its response to the Fee Arbitration Study Committee petition, was developed after consulting with the Fee Arbitration Study Committee and considering comments by lawyers and others. Of significance is the committee's proposal requiring the scope of representation, the basis or rate of the fee, and the expenses charged to the client to be set forth in writing. When the amounts charged to the client are $1,000 or less, the communication may be oral or in writing. The committee disagreed with the Fee Arbitration Study Committee's recommendation that lawyers be required to provide written estimates of fees.

The committee also proposes revising Rule 1.5(e) to obligate lawyers in a referral arrangement to assume the same ethical responsibility for the representation as if they were partners in one firm and to disclose to the client the share of the fee that each lawyer expects to receive.

Rule 1.6 Confidentiality. The proposal contains the current rule's distinctive exception to the duty of confidentiality, which arises in certain cases involving client crimes and frauds. The proposal adopts the ABA Model Rule exceptions for compliance with a court order to testify, for disclosures that "comply with other law," and for disclosures that the lawyer may need to make to another lawyer to obtain advice on ethical issues affecting the representation.

Rule 1.8 Conflicts of Interest: Prohibited Transactions. Among other proposed changes, the committee recommends deleting the insurance defense exception in Rule 1.8(f) and requiring that a client give informed consent to the lawyer's fee being paid by a third party. One of the recurring themes in the proposed rules is that lawyers should clarify their relationships, and the committee views this theme as equally important in the insurance defense setting.⁵

Rule 1.10 Imputed Disqualification: General Rule. The committee proposes that, when a lawyer changes firms, the lawyer's conflict of interest in a matter will not be imputed to lawyers at the new firm if 1) the conflict arises from legal services that were only minor and isolated and 2) the personally disqualified lawyer is timely screened from participation. The committee believes that this limited screening rule protects important client interests, while responding in a fair and practical way to the litigation strategy of using disqualification motions in an abusive manner.⁶

Rule 1.13 Organization as Client. This substantially revised rule guides the lawyer for an organization when an officer or employee of that organization violates a legal obligation of the organization by engaging in an action, intending to act, or refusing to act and thereby is likely to substantially injure the organization.

Rule 1.18 Duties to Prospective Clients. The committee recommends that the court adopt this new rule, which has no counterpart in chapter 20. This rule provides needed guidance to lawyers concerning restrictions on using information obtained from a prospective client.

Rule 2.2 Intermediary and Rule 2.4 Lawyer Serving as Third-party Neutral. The committee recommends that Rule 2.2 be deleted in its entirety from the revised Model Rules, because the issues this rule addresses are better dealt with in other rules, including conflicts of interest rules and new Rule 2.4. New Rule 2.4 defines the role and obligations of third-party neutrals and requires third-party neutrals to advise unrepresented parties that the neutral is not representing them.

Rule 3.8 Special Responsibilities of a Prosecutor. The committee proposes new provisions, not contained in the Model Rules, to clarify what types of communications are permissible between a prosecutor and an unrepresented defendant. The committee believes that a prosecutor should be able to negotiate a plea with an unrepresented defendant, but the prosecutor should not provide other legal advice or assistance to the defendant during the negotiation process.

Rule 3.10 Threatening Criminal Prosecution. The committee recommends deleting from the current rules this provision, which has no counterpart in the ABA Model Rules. The committee found that standards for establishing a violation of the rule are high, and the facts of individual cases often will contain sufficient ambiguity to make the rule inapplicable.⁷ To the extent that threats to present criminal charges amount to extortion, such conduct can be prosecuted under appropriate provisions in Rule 8.4.

Rule 4.1 Truthfulness in Statements to Others. The committee proposes a new paragraph, not found in the ABA Model Rules, recognizing that prosecutors may advise and supervise other persons with respect to lawful undercover investigations that involve deception. The failure of the rules to address this issue leaves such conduct largely unregulated because the parameters of ethical conduct are unstated. Moreover, the committee believes that it is wise to encourage that prosecutors supervise investigations so that the rights of suspects can be better protected.

Rule 4.5 Guardians ad Litem. The committee proposes this new rule, which has no counterpart in the ABA Model Rules, so that guardians ad litem understand that their conduct is governed by the rules, even though their responsibilities may differ in some respects from those in the usual representation.

Rule 6.1 Pro Bono Publico Service. The committee proposes that lawyers be required to file a report annually concerning their pro bono activities. This requirement is recommended to emphasize the pro bono responsibilities of lawyers and to collect information about pro bono services and needs. The ABA Model Rule does not contain a reporting requirement.

Rule 6.5 Nonprofit and Court-annexed Limited Legal Services Programs. This new rule, which is part of the ABA Model Rules, provides limited protection against disqualifying conflicts of interest for certain legal advice hotlines and advice-only clinics that fit within the rule's parameters.

Rule 7.6 Political Contributions to Obtain Government Legal Engagements or Appointments by Judges. This new Model Rule is designed to prohibit "pay-to-play" practices. The committee did not see this as a problem in Wisconsin, but believes that the express prohibition of such practices is sound policy.

Rule 8.4 Misconduct. The committee has proposed two new paragraphs that are not included in the ABA Model Rules. Paragraph (h) restates the lawyer's duty to cooperate in the investigation of a grievance, in the belief that placing this duty in chapter 20 will provide better notice to lawyers. Paragraph (i) makes it misconduct for a lawyer to harass a person, in connection with the lawyer's professional activities, on the basis of sex, race, age, creed, religion, color, national origin, disability, sexual preference, or marital status. This provision is intended to reinforce the strong commitment to equal justice under law.

Readers of this article are encouraged to review the entire petition and report, which are available on the State Bar's Web site, www.wisbar.org/ethop/2000/. The Wisconsin Supreme Court has scheduled a public hearing on the committee's petition for Feb. 17, 2005, at 9:30 a.m., in the Supreme Court Room in the State Capitol.

Endnotes

¹The Model Rules of Professional Conduct, with some modifications, were adopted by the Wisconsin Supreme Court effective Jan. 1, 1988, replacing the Code of Professional Responsibility. See Daniel W. Hildebrand, Introduction, Model Rules of Professional Conduct, 60 Wis. B. Bull. 19 (August 1997); Order, In re Amendment of Supreme Court Rules, Chapter 20, 139 Wis. 2d xiii (1987). Citation of the Wisconsin version of the Rules is SCR 20:____. For example, the current Wisconsin version of Model Rule 1.1 can be found at SCR 20:1.1.

²Wisconsin Ethics 2000 Committee members are: lawyers Daniel W. Hildebrand (chair), Thomas J. Basting Sr. (vice chair), Prof. Michael K. McChrystal (reporter), Prof. Kenneth M. Streit (associate reporter), Ralph Cagle, Ben Kempinen, Earl H. Munson, Barbara A. Neider, Maura Whelan, Nathaniel Cade Jr., Hannah Dugan, Mel Scott Johnson, and Dean R. Dietrich; and nonlawyers Rosemary Hinkfuss, Casey L. Perry, Marcia Mentkowski, Dawn L. Miller, Mary O. Pieschek, and Michael Staeck.

³The Wisconsin Ethics 2000 Committee petition and report are available on the State Bar's Web site, www.wisbar.org. The petition recites the text of all of the proposed changes.

⁴This article's discussion of key proposals corresponds to the "Key Proposals" outlined in the committee's report.

⁵See Marten Transport, Ltd. v. Hartford Speciality Co., 194 Wis. 2d 1, 533 N.W.2d 452 (1995).

⁶See generally Nelson v. Green Builders, Inc., 823 F. Supp. 1439 (E.D. Wis. 1993).

⁷See generally In re Disciplinary Proceedings Against Coe, 2003 WI 117, 265 Wis. 2d 27, 665 N.W.2d 849.

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