President's Message

Ethics: The Third Rail of Bar Politics?

by Gary L. Bakke

THE CLOCK IS TICKING. CLIENTS are increasingly turning to other professions or to software and the Internet to provide the help that was once the private domain of lawyers. The marketplace is making it increasingly clear that the public does not view lawyers as the exclusive source of legal assistance. Most of our problems have nothing to do with ethics. However, I believe that there are a few, but significant, issues that can be traced to our ethics rules. We must consider bold action in order to stay relevant in the 21st century. Changes to our Rules of Professional Conduct must be part of the discussion.

The Rules of Professional Conduct did not come down from the Mount with Moses. They are not, and never were intended to be, immutable laws for all time. They have been modified over the years to adapt to changes in society and in our profession. In fact, the current Rules of Professional Conduct have been in force only 13 years¹ and have been amended 11 times since adoption. The current rules replaced the Code of Professional Responsibility, and before that we had the Canons of Ethics. The ABA's Ethics 2000 Commission currently is proposing hundreds of changes to the Model Rules, which will be debated by the House of Delegates in February. It is time for us in Wisconsin to carefully review our ethics rules.

I do not propose that we relax the rules, nor do I believe in deregulation of the profession. Lawyers and the public need a strong, clear, enforceable set of ethical standards that assure the quality of what we do. That does not, however, call for blind acceptance of the status quo.

When the State Bar of Wisconsin was created, the Wisconsin Supreme Court designated the purposes for which it should exist. These purposes include the mandate:

"[t]o promote the innovation, development, and improvement of means to deliver legal services to the people of Wisconsin; to the end that the public responsibility of the legal profession may be more effectively discharged."²

Thus, a periodic careful review and analysis of our ethical rules is not only permitted but expected.

The Current State of Ethics Rules

Ethics rules have always been designed primarily for litigators. That is not surprising considering that almost all lawyers (until recently) found themselves in court regularly and that the rules are enacted by the supreme court, which is at the top of the litigation food chain.

Today, many of us do not see the inside of a courtroom from one year to the next. We have many other roles, including advisor,³ intermediary,⁴ and evaluator⁵ (evaluating a client's matter for use by a third party). Lawyers may be primarily advocates, but the Rules of Professional Conduct specifically delineate those additional functions. Yet the current Rules don't fit the transactional and advisory roles well. Dale Sorden, now retired from Quarles & Brady, wrote to me saying, "The Rules of Professional Conduct are poorly suited to the counseling and advisory functions that businesses and families most often want from their lawyers," as he encouraged us to "pursue the battle" of reviewing and revising our Rules.

Our Rules of Professional Conduct have several objectives. They are designed primarily to assure adequate representation; to protect clients and the public from overreaching or unscrupulous lawyers; and to protect the legal system. The Rules, even though they describe only a minimum level of acceptable conduct, are extensive in their mandates and prohibitions.

The Rules mandate competence,⁶ diligence,⁷ adequate communication,⁸ and fair fees.⁹ They prohibit divulging confidences,¹⁰ proscribe conflicts of interest,¹¹ and require trust accounts.¹²

The Rules require that a lawyer advance only meritorious claims,¹³ expedite litigation,¹⁴ exhibit candor toward the tribunal,¹⁵ and treat the opposing party fairly.¹⁶ They prevent improper attempts to influence a judge or juror and ex parte communications.¹⁷ They make it a violation to threaten criminal prosecution to obtain an advantage in a civil matter¹⁸ and to make false statements regarding the integrity or qualifications of a judge.¹⁹ Basic truthfulness in statements to others, fairness to unrepresented parties, and respect for the rights of others is required.²⁰ The Rules encourage pro bono work²¹ and regulate advertising, marketing, and soliciting.²²

In general, the Rules of Professional Conduct is an admirable document, crafted and honed by leading scholars, jurists, and ethicists to meet the needs and expectations of the public. It has served us well. But we see some problems with lawyers' conduct that can be traced to the ethics rules. Maybe we can do better. We can start by recognizing that the current Rules can be changed to better fit the needs of litigators, and to become more relevant to transactional lawyers.

A Closer Look at Our Ethics

Zealous advocacy. One of the public's charges against lawyers relates to a concept that is not a direct part of the current Rules. Zealous advocacy is primarily a carryover from the old Code of Professional Responsibility,²³ although there are references to zealousness in the preamble to the current Rules and in the comments to the section requiring diligence.²⁴

Lawyers, courts, and disciplinary committees interpreted the former Code of Professional Responsibility, which directly mandated zealous advocacy, to require an attorney to do everything, short of violating the law, to achieve the client's goals. Thus, some thought that attorneys were obligated to carry out even those client directives that the attorney found harsh, ethically distasteful, or unnecessarily harmful to opposing parties, counsel, or others, such as children in a divorce action.²⁵ It was in response to this overzealous interpretation of the zealous advocacy requirement that the current Rules of Professional Conduct eliminated the zealous advocacy requirement. It is my observation that the distinction between the old Code and the new Rules has been lost on a segment of the profession.

I submit that the zealous advocacy idea is used to justify aggressive, belligerent, hostile conduct that has caused more pain to more litigants than any other factor. Boorish conduct, disrespect for others, "Rambo" tactics, and similar conduct hurts us all. Conduct under the umbrella of zealous advocacy is the primary reason that people fear lawyers and will go to great lengths to avoid us. Our clients deserve dedicated, energetic, creative, diligent, and competent representation within the bounds of fairness to others and our responsibility to the legal system.

Our former Code of Professional Responsibility, which included the zealous advocacy requirement, also included an ethical consideration that is not part of the current Rules. It provided that "The duty of a lawyer to represent his or her client with zeal does not militate against his or her concurrent obligation to treat with consideration all persons involved in the legal process and to avoid the infliction of needless harm."²⁶ Our clients need advocacy and problem solving skills but rarely benefit from an aggressive display of zealousness.

Loyalty. Another problem in the public's perception of us relates to our apparent inability to balance our duty of undivided loyalty to the client with the other obligations of fairness to others and support for the legal system.

The preamble to the current Rules recognizes that, "In the nature of law practice, however, conflicting responsibilities are encountered. Virtually all difficult ethical problems arise from conflict between a lawyer's responsibilities to clients, to the legal system, and to the lawyer's own interest in remaining an upright person while earning a satisfactory living." However, the Rules do little to help us balance the conflicting duties.

The preamble notwithstanding, the duty of undivided loyalty frequently takes precedence over other, sometimes conflicting, mandates. When that happens, the duty of undivided loyalty to a client, when coupled with the mandate for zealous advocacy, runs roughshod over other equally valid and highly important ethical values. I have in mind the rules that require that a lawyer not advance claims that are frivolous or not meritorious,²⁷ require that lawyers expedite litigation,²⁸ require candor toward the tribunal,²⁹ and mandate fairness toward the opposing party.³⁰ Similarly in jeopardy are the rules requiring basic truthfulness in statements to others, fairness to unrepresented parties, and respect for the rights of others.³¹ I submit that we should not have a single-minded duty of loyalty to our clients. Rather, that duty of loyalty must be balanced with other duties to the system and to other parties and to our own morals.

Professional independence. As our profession begins to seriously consider multidisciplinary practice, unauthorized practice of law, and multijurisdictional practice issues, two rules are in the cross hairs for reconsideration: professional independence³² and unauthorized practice of law.³³ Both are found in that part of the Rules that regulates law firms and specifies the duties and responsibilities of supervising and subordinate lawyers.

The requirement for professional independence prevents a lawyer from sharing legal fees with a nonlawyer and prevents formation of a law practice partnership or corporation with a nonlawyer. Professional independence confers no direct benefit to the client; it only makes sense if we conclude that other rules will be more difficult to enforce if there is nonlawyer involvement in the decision making or financing of a law office. This is the heart of the matter.

Is SCR 20:5.4, Professional Independence, essential to the viability of the core mandates of the Rules? Can the Rules' client protection, public protection, and legal system protection functions be attained and enforced without professional independence? If we conclude that it is impossible or impractical to enforce the other Rules without a requirement of lawyer independence, then we should consider what restrictions are necessary to assure the reasonable objectives of the Rules.

Are we convinced that the ethical practice of a lawyer would come under irresistible assault in a CPA or consulting firm? Have we concluded that the thousands of lawyers currently employed by such firms worldwide are less ethical than the rest of us? Are the ethical pressures on such a lawyer greater than the ethical temptations faced by a solo practitioner struggling to earn $35,000? What about the pressures on young associates in large firms where billable hours and collections are the yardstick of professional performance? I believe that the ongoing quest for financial survival in many firms, large and small, creates ethical pressures equally intense as those that would be created by a for-profit nonlawyer enterprise.

What about the pressures on a senior partner who derives most of her income from one very large client? Who controls the work of a government lawyer? A nonlawyer supervisor? What about in-house corporate counsel? Attorneys employed by insurance companies? All lawyers, regardless of workplace structure, encounter ethical pressure every day as we struggle to represent the interests of our clients and remain true to our values as human beings. Our legal system is designed around the assumption that as professionals we will put our ethical obligations above the short-term gain to be reaped by an ethical violation. Living up to that standard is an obligation that we expect lawyers to take in stride. Why should we be suspect of an attorney who chooses to work for a CPA firm? Do we believe that society would be better off if attorneys are required to forfeit their law licenses if they wish to work in nonlawyer-controlled businesses?

We must acknowledge that frequently our obligation to a client is at odds with our financial self-interest. This is true for partners and shareholders, for associates and employees, and for those in private, corporate, or government practice. If we expect ourselves to put the needs and interests of our clients ahead of our personal self-interest, and we do, certainly we can design rules that will protect clients from the pressures of nonlawyer owners and managers.

Another area of concern is the unauthorized practice of law rules, which provide that a lawyer shall not practice law in a jurisdiction unless licensed to do so and shall not assist a nonlawyer in the unauthorized practice of law. We struggle to define the practice of law. Other professions are more clearly defined in the statutes. We do not have an accepted and enforceable definition, the current Wis. Stat. section 757.30 notwithstanding, and without such a definition, attempts to regulate the unauthorized practice are doomed.³⁴

The ABA has a commission working on multijurisdictional practice issues, which for transactional lawyers are closely related to unauthorized practice issues. The current rules are clear for litigators. Don't practice in a jurisdiction unless admitted to practice in that state or associated with co-counsel who is. It is much less clear whether transactional lawyers can participate in negotiations or other noncourt activity in another jurisdiction.

Taking the First Step

In response to the unprecedented changes in our society, and therefore our profession, the State Bar Board of Governors is studying and debating an extremely ambitious resolution that involves changing our ethics rules to more effectively serve the public. The resolution has been called "gargantuan, earth shaking" by one board member.

The resolution calls for a bold review of fundamental issues facing the profession, including multidisciplinary practice, multijurisdictional practice, unauthorized practice of law, ancillary businesses operated by lawyers, member education and technological support, pro bono services, unbundling of legal services, alternative billing methods, changes in law school education, changes to the rules of civil procedure, the rules of evidence and scheduling procedures, alternative dispute resolution, and legislative consideration of the legal and transactional costs of new legislation to Wisconsin citizens.

I predict that before formal action by the board, the resolution will be broken into its component parts for deliberation and voting. However, the fact that it was created as a unified resolution emphasizes the importance of a coordinated consideration of the future of our profession.

Back to the Basics

The ABA Commission on Multidisci-plinary Practice made a very strong statement in favor of careful change. I have cited it before, and I do so again to remind us all that we have a collective obligation to effectively serve the public.

"The legal profession should adopt and maintain rules of professional conduct that protect its core values, independence of professional judgment, protection of confidential client information, and loyalty to the client through avoidance of conflicts of interest, but should not permit existing rules to unnecessarily inhibit the development of new structures for the more effective delivery of services and better public access to the legal system."³⁵

Endnotes

1 Adopted by the Wisconsin Supreme Court on June 10, 1987, effective Jan. 1, 1988.

2 SCR 10.02(2). Purposes. The purposes of the association are to aid the courts in carrying on and improving the administration of justice; to foster and maintain on the part of those engaged in the practice of law high ideals of integrity, learning, competence and public service and high standards of conduct; to safeguard the proper professional interests of the members of the bar; to encourage the formation and activities of local bar associations; to conduct a program of continuing legal education; to assist or support legal education programs at the preadmission level; to provide a forum for the discussion of subjects pertaining to the practice of law, the science of jurisprudence and law reform and the relations of the bar to the public and to publish information relating thereto; to carry on a continuing program of legal research in the technical fields of substantive law, practice and procedure and make reports and recommendations thereon within legally permissible limits; to promote the innovation, development and improvement of means to deliver legal services to the people of Wisconsin; to the end that the public responsibility of the legal profession may be more effectively discharged.

3 SCR 20:2.1.

4 SCR 20:2.2.

5 SCR 20:2.3.

6 SCR 20:1.1.

7 SCR 20:1.2.

8 SCR 20:1.3.

9 SCR 20:1.5.

10 SCR 20:1.6.

11 SCR 20:1.7, 1.8, 1.9, 1.10, 1.11, and 1.12.

12 SCR 20:1.16.

13 SCR 20:3.1.

14 SCR 20:3.2.

15 SCR 20:3.3.

16 SCR 20:3.4.

17 SCR 20:3.5.

18 SCR 20:3.10.

19 SCR 20:8.2.

20 SCR 20:4.1, 4.3, 4.4.

21 SCR 20:6.1.

22 SCR 20:7.1, 7.2, 7.3, 7.4, 7.5.

23 Code of Professional Responsibility, SCR 20.34, repealed effective Jan. 1, 1988.

24 Preamble. "[A]s advocate, a lawyer zealously asserts the client's position under the rules of the adversary system."

"[w]hen an opposing party is well represented, a lawyer can be a zealous advocate on behalf of a client and at the same time assume that justice is being done."

Comment to SCR 20:1.3 Diligence. "[A] lawyer should act with commitment and dedication to the interests of the client and with zeal in advocacy upon the client's behalf."

25 The American Academy of Matrimonial Lawyers, a national organization of divorce lawyers, of which I am a fellow, has determined that the current Code of Professional Conduct is not appropriate for family law cases where the litigants will have to continue to deal with each other about financial or child care issues long after the case is concluded. It has adopted standards of conduct for its members called Bounds of Advocacy. It can be found at http://www.aaml.org/bounds.html.

26 Code of Professional Responsibility, SCR 20.34(2)(g), repealed effective Jan. 1, 1988.

27 SCR 20:3.1.

28 SCR 20:3.2.

29 SCR 20:3.3.

30 SCR 20:3.4.

31 SCR 20:4.1, 4.3, 4.4.

32 SCR 20:5.4.

33 SCR 20:5.5.

34 The ABA Commission on Multidisciplinary Practice did propose a definition that was rejected by the House of Delegates:

"'Practice of Law' means the provision of professional legal advice or services where there is a client relationship of trust or reliance. One is presumed to be practicing law when engaging in any of the following conduct on behalf of another:

"(a) Preparing any legal document, including any deeds, mortgages, assignments, discharges, leases, trust instruments or any other instruments intended to affect interests in real or personal property, wills, codicils, instruments intended to affect the disposition of property of decedents' estates, documents relating to business and corporate transactions, other instruments intended to affect or secure legal rights, and contracts except routine agreements incidental to a regular course of business;

"(b) Preparing or expressing legal opinions;

"(c) Appearing or acting as an attorney in any tribunal;

"(d) Preparing any claims, demands or pleadings of any kind, or any written documents containing legal argument or interpretation of law, for filing in any court, administrative agency or other tribunal;

"(e) Providing advice or counsel as to how any of the activities described in subparagraph (a) through (d) might be done, or whether they were done, in accordance with applicable law;

"(f) Furnishing an attorney or attorneys, or other persons, to render the services described in subparagraphs (a) through (e) above.

"This definition is based in great part on District of Columbia Rule 49, which the Reporter viewed as a useful model."

35 American Bar Association Commission on Multidisciplinary Practice, Report to the House of Delegates, June 8, 1999.

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