Vol. 80, No. 2, February 2007
n Jan. 5, 2007, the Wisconsin Supreme Court issued order 04-07 to repeal and recreate SCR Chapter 20, the Rules of Professional Conduct for Attorneys. The new rules take effect on July 1, 2007. (Order 04-07 appears on page 42; the full text of the new rules is online at www.wisbar.org/RulesOfConduct.) The new rules grew out of the work of the Wisconsin Ethics 2000 Committee, which the supreme court appointed to review the work product of the ABA Ethics 2000 Commission and to make recommendations to the court on whether and to what extent to update Wisconsin's Rules of Professional Conduct. During its deliberations, the court considered recommendations from the Ethics 2000 Committee, the State Bar and its membership, and other entities and individuals.
Many of the changes in the new rules are modeled after changes to the ABA Model Rules adopted by the ABA House of Delegates in 2002. The new rules also continue several Wisconsin rules that vary from the ABA Model Rules, such as the definition of what constitutes false and misleading advertisements and the requirement that lawyers disclose confidential client information under certain circumstances.
Timothy J. Pierce, U.W. 1992, is the State Bar ethics counsel and liaison to the State Bar Professional Ethics Committee.
Dean R. Dietrich, Marquette 1977, of Ruder Ware, Wausau, is chair of the Professional Ethics Committee.
Many of the changes are editorial in nature and simply clarify already existing duties, but some create new or different obligations for Wisconsin lawyers, especially when dealing with a client.
The major changes to the new Rules of Professional Conduct are summarized below.
Preamble and Scope
The Preamble and Scope sections of the new rules are similar to those of the current rules. One noteworthy change to the Scope section is an acknowledgement that, while violation of a rule should not, standing alone, form the basis for civil liability (for example, malpractice liability), a lawyer's violation of a rule may be "evidence of breach of the applicable standard of conduct." For example, a lawyer's discipline for failure to exercise reasonable diligence in violation of SCR 20:1.3 may be evidence (although not necessarily dispositive evidence) in a subsequent malpractice action.
Law Firm (SCR 20:1.0(d))
The new rules expand the definition of a law firm. The current rule defines a firm as a private law firm, legal services organization, or corporate legal department. The new rule explicitly adds governmental entities to the definition of a firm, thus clarifying that government lawyers must be regarded as practicing within firms for purposes of the rules. Imputation of conflicts, however, is limited within governmental law offices (see SCR 20:1.11).
Informed Consent from Client (SCR 20:1.0(f))
Lawyers are required to obtain client consent in various instances. The new rule requires the lawyer to obtain the client's informed consent in those instances in which the lawyer is now obligated to obtain consent after consultation with the client. The definition of informed consent, found in new rule SCR 20:1.0 (entitled "Terminology"), makes clear that the lawyer must explain the relevant facts and circumstances and discuss all available options and alternatives, and the advantages and disadvantages of a proposed course of conduct, when presenting a matter to a client for the client's informed consent to a proposed course of action.
Misrepresentation (SCR 20:1.0(h))
The current rules do not define misrepresentation. Under the new rule, misrepresentation is specifically defined to include false statements made with reckless disregard as to their truth or falsity, as opposed to actual knowledge. Further, omissions may constitute misrepresentation under this rule.
Tribunal (SCR 20:1.0 (p))
The new rules modify the definition of tribunal to explicitly include administrative law judges, arbitrators, administrative agencies, and any other body or individual that renders binding legal judgment after presentation of evidence or argument. This clarifies that the obligations of lawyers appearing before a circuit or appellate court also apply when appearing before an administrative law judge or arbitrator (see, e.g., SCR 20:3.3 and SCR 20:3.5).
Writing (SCR 20:1.0(q))
The rules now define writing and signing as including electronic and audio records. Therefore, in situations requiring a client's informed consent confirmed in a writing signed by the client, such as with conflict waivers, the written confirmation and signature can be via email or even voicemail. Be cautious, however, because some media present problems of preserving and documenting the lawyer's communication to the client.
Scope of Representation and Allocation of Authority between Lawyer and Client (SCR 20:1.2)
With the exception of subsection (e), new SCR 20:1.2 follows ABA Model Rule 1.2 and is similar to the current rule, which provides that the client has final authority to determine the course of representation. New subsection (e) requires insurance defense lawyers to inform clients, in writing and within a reasonable time of being retained to represent the insured, of any limitations on the scope of representation imposed by the terms of the insurance policy.
Communication (SCR 20:1.4)
Lawyers are obligated to keep their clients informed about all aspects of the representation and to respond to inquiries from a client about the representation. The new rule combines in one place the many duties of communication that a lawyer owes to a client. The duty of communication includes:
- Promptly notifying the client of any decision or circumstance in which the client's informed consent is
- Reasonably consulting with the client about how the client's objectives are to be accomplished;
- Keeping the client reasonably informed about the status of the matter;
- Promptly complying with the client's reasonable requests for information; and
- Consulting with the client about any relevant limitation on the lawyer's conduct when the client expects assistance from the lawyer that is not permitted by the Rules of Professional Conduct or other law.
Fees (SCR 20:1.5)
Several changes have been made to the rule governing lawyer fees. Under the new rule, the lawyer must advise the client in writing of the nature and scope of representation and the basis or rate of fees and costs that will be charged to the client. The lawyer also must advise the client whenever the basis or rate for the fee or costs is increased during the course of representation. If the lawyer reasonably believes that the fees and costs to be charged to the client for the representation will be less than $1,000, the lawyer still must advise the client of the nature and scope of the representation and the basis or rate of the fees and costs but is not required to do so in writing.
The new rule also clarifies the ethical duties of lawyers who participate in fee-sharing when a legal matter is referred from one lawyer to another lawyer (for example, a "third of a third" of a contingent fee). Both lawyers have the same ethical responsibilities with respect to the representation as if they were partners in a law firm, and the client must be informed of and consent to, in writing, the terms of the referral fee arrangement, including how the fees will be apportioned.
Confidentiality (SCR 20:1.6)
Lawyers have a paramount duty to preserve the confidentiality of information learned during the representation of a client, whatever the information's source. New SCR 20:1.6 differs from ABA Model 1.6 and retains the unique features of the current Wisconsin rule. Notable features include:
- Retention of the current mandatory disclosure of information to the extent necessary to prevent a client from inflicting death or substantial harm on the person or financial interests of another;
- New, permissive disclosure to prevent death or substantial bodily harm that is reasonably likely to occur, regardless of whether the client is involved in the conduct likely to cause such harm;
- New, permissive disclosure to seek advice about compliance with the Rules of Professional Conduct (for example, calling the State Bar's Ethics Hotline);
- New, permissive disclosure to comply with other law or court order. This clarifies that although a lawyer must raise all nonfrivolous objections to court-ordered disclosure of information protected by SCR 20:1.6, a lawyer does not violate the rule by complying with a court's final orders.
Conflicts of Interest: Current Clients (SCR 20:1.7)
Preventing conflicts of interest in representing clients is a cornerstone of the duty of loyalty owed to a client. New SCR 20:1.7 in large part follows ABA Model Rule 1.7 and refers to conflicts involving current clients as "concurrent conflicts of interests." A concurrent conflict of interest exists when the representation of one client is directly adverse to another client or when there is a significant risk that the representation of a current client may be materially limited by the lawyer's responsibilities to another current client or a former client or by the lawyer's own interests. Notable features of the new rule include:
Conflicts of Interest: Prohibited Transactions (SCR 20:1.8)
- A general definition of unwaivable conflicts;
- Retention of the requirement in the current rule that all waivers of conflicts be in writing and signed by each affected client; and
- Extensive and informative comments about conflicts.
The new rule is similar to the current rule but contains some new and noteworthy provisions. First, all of the conflicts enumerated in SCR 20:1.8, with the exception of the prohibition on sexual relations with clients, are now imputed to other lawyers in the same firm. Second, SCR 20:1.8(h)(3) now explicitly prohibits making any agreement with a client that would limit the client's right to report the lawyer's conduct to the Office of Lawyer Regulation (OLR). Third, lawyers' obligations when entering into business transactions with clients are expanded slightly, including the obligation to obtain the client's informed consent to the transaction in a writing signed by the client.
Duties to Former Clients (SCR 20:1.9)
The language of the new rule concerning conflicts of interest with former clients is substantially similar to the current rule, but the comment now explicitly references the "substantial relationship" test that is widely recognized in disqualification caselaw (see, e.g., Burkes v. Hales, 165 Wis. 2d 585, 478 N.W.2d 37 (Ct. App. 1991)).
Imputed Disqualification: General Rule (SCR 20:1.10)
Many conflicts of one lawyer are imputed to other lawyers in the same law firm. New SCR 20:1.10 retains the basic proposition that an individual lawyer's conflicts are imputed to other members of the firm. The new rule, however, differs from the current rule and ABA Model Rule 1.10 and, in some respects, is less restrictive on a firm's ability to accept cases despite the conflict of one of its members. New provisions include:
- Conflicts arising from a lawyer's personal interests that do not pose a significant risk of materially limiting the representation of the client will not be imputed to the other members of the firm; and
- When a lawyer has a conflict arising from having provided only minor and isolated services to a former client at the lawyer's previous firm, the lawyer with the conflict may be timely screened to defeat imputation of the conflict to other lawyers in the firm. Notice of the screening arrangements must be given to the affected client. For example, the fact that an associate had done some document review on a large case while with another firm would not necessarily disqualify the associate's new firm, provided the associate was timely screened from the matter.
Organization as Client (SCR 20:1.13)
Representing an organization creates special obligations for a lawyer. New SCR 20:1.13 provides for more detailed reporting "up the ladder" when the lawyer is aware of actions in violation of law that are likely to harm the organization. In most circumstances, the lawyer must report the actions to higher authority within the organization. If that higher authority fails to appropriately address the situation, the lawyer may reveal information otherwise protected by SCR 20:1.6 to the extent necessary to protect the organization. The new rule also clarifies that the mandatory disclosure requirements of SCR 20:1.6(b) apply to lawyers representing organizations.
Client with Diminished Capacity(SCR 20:1.14)
A lawyer who represents a client who may have diminished capacity is obligated to treat the client, as far as reasonably possible, as the lawyer would treat any other client. If a client cannot act in his or her own interest and is at risk of substantial harm, the rule allows lawyers to take reasonable protective actions, such as seeking the appointment of a guardian, even if such protective actions require revealing information otherwise protected by SCR 20:1.6. The comment to the new rule recognizes that a lawyer may take steps to determine whether a client suffers from diminished capacity, such as by contacting medical professionals.
Duties to a Prospective Client (SCR 20:1.18)
This new rule is identical to the ABA Model Rule. The rule describes the duties that a lawyer owes to a prospective client who has contacted the lawyer for purposes of seeking representation when the prospective client has not retained the lawyer or the lawyer has not agreed to represent the individual. The rule clarifies that a lawyer owes the same duty of confidentiality to the prospective client as to any former client and clarifies that conflicts of interest may arise even though the lawyer has decided not to represent the prospective client. The conflict of interest that one lawyer may have would not be imputed to other members of the law firm provided the lawyer with the conflict is timely screened from involvement with the representation and the lawyer took reasonable measures to limit the amount of disqualifying information received from the prospective client to that amount necessary to determine whether to undertake the representation.
Lawyer Serving as Intermediary (current SCR 20:2.2)
The current rule addresses situations in which the lawyer has been retained to represent two clients simultaneously. The new rules eliminate Rule 20:2.2 because a lawyer's responsibilities when representing clients simultaneously are fully addressed by other rules. Lawyers must look to SCR 20:1.7 and seek appropriate waivers of conflicts following the rigorous requirements of obtaining informed consent from each client represented in the matter. The elimination of SCR 20:2.2, which was commonly called the "scrivener rule," does not forbid situations in which a lawyer could be retained by two parties for a representation that is limited in scope, such as drafting documents, provided that the limitation is reasonable and the clients provide signed consent to any waivable conflicts. Lawyers simply must follow the conflict of interest rules to serve in that capacity.
Lawyer Serving as Third Party Neutral (SCR 20:2.4)
This completely new rule recognizes that lawyers often serve as mediators or arbitrators. The rule imposes a duty on lawyers serving in such roles to inform unrepresented parties that the lawyer is not representing them and to explain the lawyer's role as a third-party neutral when a party does not adequately understand the lawyer's role. The comment recognizes that lawyers serving as third-party neutrals face the same conflicts as a former judge under SCR 20:1.12.
Candor Toward the Tribunal (SCR 20:3.3)
The new rule expands a lawyer's duties concerning tribunals, in that a lawyer now is obligated to take remedial measures if the lawyer is representing a client in an adjudicative proceeding and knows that any person is engaging in or intends to engage in fraudulent conduct related to the proceeding. The new rule, like the current rule, does not put any time limit on a lawyer's duties of candor toward a tribunal. Thus, the duty to take remedial measures may arise with respect to closed matters.
Special Responsibilities of Prosecutors (SCR 20:3.8)
The current rule provides guidance to prosecutors on what statements can be made to individuals who are not represented by a lawyer. The new rule explicitly prohibits prosecutors from giving any sort of legal advice to unrepresented persons and prohibits prosecutors from assisting unrepresented persons in completing court forms, such as guilty plea forms. (These prohibitions do not apply to municipal prosecutors.)
Threatening Criminal Prosecution (current SCR 20:3.10)
The new rules eliminate SCR 20:3.10, which makes it misconduct to threaten criminal prosecution solely to gain advantage in a civil matter. The ABA Model Rules contain no similar provision, and Wisconsin's current rule has proven difficult to enforce. To the extent such conduct would constitute the crime of extortion, it likely would be misconduct under SCR 20:8.4(b).
Truthfulness in Statements to Others (SCR 20:4.1)
The current rule prohibits lawyers from making false statements of material fact or law to other persons, whether represented or unrepresented. The new rule retains this prohibition but adds an additional provision that allows lawyers to supervise or advise other persons about (but not participate in) lawful investigatory activities. The change allows lawyers to give advice to others engaged in lawful investigatory activities, which may involve deception in some cases, in order to ensure that the investigation is conducted in accordance with applicable law and regulations.
Communication with Person Represented by Counsel (SCR 20:4.2)
The new rule is very similar to the current rule, except that the new Rule explicitly recognizes that lawyers may directly contact represented persons when authorized to do so by a court order. The comment, however, makes significant changes to the ability of lawyers to contact constituents or employees of represented organizations. First, former employees or constituents are explicitly not covered by the new rule and may be contacted without permission of the organization's lawyer. Second, the current constituents or employees covered by the new rule are now limited to those who direct, control, or regularly consult with the organization's lawyer, those who have authority to settle the matter, and those whose acts or omissions may be imputed to the organization for purposes of civil or criminal liability in the matter.
Respect for Rights of Third Persons (SCR 20:4.4)
The new rule requires that when a lawyer receives a document that has been inadvertently sent, the lawyer must promptly notify the sender. Thus, if a lawyer receives an email from opposing counsel that was intended for the opposing counsel's client, the lawyer must promptly notify opposing counsel of receiving the document. The rule does not impose duties beyond prompt notification to the sender.
Guardians ad Litem (SCR 20:4.5)
This new rule has no counterpart in the ABA Model Rules. The rule makes clear that guardians ad litem are bound by the Rules of Professional Conduct consistent with their role in representing the best interests of individuals rather than individuals personally.
Voluntary Pro Bono Publico Service (SCR 20:6.1)
The new rule, which is identical to ABA Model Rule 6.1, retains the current rule's aspirational rather than mandatory goals but sets a specific target of 50 hours pro bono service per year. The rule also provides a definition of pro bono that focuses on providing legal services to low-income individuals. The rule, in essence, remains a nondisciplinary rule, because it is impossible to violate.
Nonprofit and Court-annexed Limited Legal Services Programs (SCR 20:6.5)
This completely new rule allows lawyers to more freely participate in clinical or other programs that provide limited legal services by limiting conflicts and imputation of conflicts to matters in which the lawyer has knowledge of the conflict. Thus, a lawyer's provision of limited advice at a walk-in legal clinic will not result in the lawyer's firm being barred from a matter if the lawyer unknowingly provides advice to a person to whom the lawyer's firm is adverse.
Advertising (SCR 20:7.2)
This new rule allows lawyers to enter into referral agreements with other lawyers or nonlawyer professionals provided that the referral agreement is nonexclusive, the client gives informed consent, there is no interference with the lawyer's independent professional judgment, the lawyer keeps information confidential as required by SCR 20:1.6, and the lawyer does not violate the fee sharing provisions of SCR 20:1.5(e) and SCR 20:5.4.
Political Contributions to Obtain Government Legal Engagements or Appointments by Judges (SCR 20:7.6)
This completely new rule prohibits lawyers from accepting government engagements or appointments if the lawyer or the lawyer's firm has made or solicited contributions for the purpose of obtaining such engagements. This often is referred to as the "pay to play" rule.
Reporting Professional Misconduct (SCR 20:8.3)
Lawyers have, in certain circumstances, an obligation to report the misconduct of another lawyer to the appropriate authority. This new rule maintains the current rule's requirement that a lawyer report the substantial misconduct of another lawyer or judge, but the new rule makes clear that when reporting would require revealing information protected by 20:1.6, the lawyer must consult with the client concerning the lawyer's duty to report and then abide by the client's wishes. The comment to the rule also expands exemptions from the duty to report to include the State Bar's Law Office Management Assistance Program and the Ethics Hotline.
Misconduct (SCR 20:8.4)
The current rule identifies several acts or behavior that are considered misconduct. The new rule has two subsections not in the current rule. The first makes plain that it is misconduct to fail to cooperate with the OLR in the investigation of a grievance. This has always been the case, but new subsection SCR 20:8.4 was added to provide better notice to lawyers. The second new subsection makes it misconduct for a lawyer to harass a person because of that person's status (for example, age, race, gender, and so on) in connection with the lawyer's professional activities. The comment states that what constitutes harassment may be determined by relevant legislation and case law.
While many of the provisions in the new Rules of Professional Conduct are not significantly different from the current rules, lawyers must be aware of all of the changes and modify their practices and procedures to ensure compliance with the new Chapter 20, Rules of Professional Conduct. In addition, lawyers should be aware that the Wisconsin Supreme Court is holding public hearings in January and April to consider petitions to amend the rules affecting lawyer trust accounts and the multi-jurisdictional practice of law. The Wisconsin Lawyer and WisBar will report on these anticipated rule changes as they occur.