Wisconsin Lawyer: Ethics: A Dialog on the New Rules of Professional Conduct: Part 1:

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    Ethics: A Dialog on the New Rules of Professional Conduct: Part 1

    In Part 1 of this two-part conversation, Dean Dietrich and Ralph Cagle discuss some of the changes to Chapter 20, the Rules of Professional Conduct for Wisconsin attorneys, including the impact of informed consent and written agreements on the practice of law and lawyers' potential exposure to malpractice claims.

    Dean R. DietrichRalph M. Cagle

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    Wisconsin LawyerWisconsin Lawyer
    Vol. 81, No. 3, March 2008


    Part 1: A Dialog on the New Rules of Professional Conduct

    In Part 1 of this two-part conversation, Dean Dietrich and Ralph Cagle discuss some of the changes to Chapter 20, the Rules of Professional Conduct for Wisconsin attorneys, including the impact of informed consent and written agreements on the practice of law and lawyers' potential exposure to malpractice claims.

    by Ralph M. Cagle & Dean R. Dietrich

    On July 1, 2007, the Wisconsin Supreme Court adopted many changes to Chapter 20, the Rules of Professional Conduct for Wisconsin attorneys. Dean Dietrich, chair of the State Bar Professional Ethics Committee, and Ralph Cagle, a U.W. Law School professor and former reporter to the committee, frequently discuss the changes and how they affect lawyers. Here is Part 1 of a two-part dialog. Part 2 will continue in the April Wisconsin Lawyer.

    Dietrich: We've been discussing the change in the requirement from "consent after consultation" to "informed consent" when asking for a client's decision concerning representation. How do you think this new standard of informed consent will affect lawyers?

    Cagle: It could be quite significant. Here's what I think has happened. The new rules up the ante on the information a lawyer must convey to a client to validly obtain the client's consent to a large number of actions, including waiver of a conflict of interest, revealing of confidential information, certain fee arrangements, joint enterprises, and probably most significantly, agreement to any settlement or plea agreement.

    Ralph M. Cagle

    Ralph M. Cagle, U.W. 1974, is a professor at the U.W. Law School.

    The old standard of consent after consultation is replaced by informed consent. Now, over time, informed consent has taken on particular shades of meaning in other areas of activity, such as consent to medical treatment or procedures. The comments to the rules make clear that informed consent requires a lawyer to make a disclosure that includes: 1) the facts and circumstances giving rise to the situation requiring the client's consent; 2) any explanation reasonably necessary to inform the client of the material advantages and disadvantages of the proposed course of conduct; and 3) a discussion of the client's options and alternatives. The comments also stated that the disclosure needed for clients who are not experienced in legal matters is greater. Most clients aren't experienced in legal matters.

    I am not saying this is bad or the wrong standard for communicating with clients. In fact, I think it is the best practice. It certainly is what I teach my students to try to do. My concern is with making the best practice the minimum standard for which a lawyer is subject to being disciplined.

    Dietrich: Are you predicting that this new standard will result in more lawyers being disciplined ?

    Cagle: Don't know yet. Time will tell. But, I know that alleged failures in communication are one of the most frequent sources of disciplinary complaints and imposed sanctions. Inadequate communication claims can be difficult to defend in part because they often are "he said-she said" disputes where the client and the lawyer have very different recollections of what was or was not communicated. We are just going to have to see how the Office of Lawyer Regulation (OLR) applies this new standard. It can be a common sense and practical application or it can be enforced with biblical literalism. The latter would be problematic in my view.

    Dietrich: Will this affect lawyers' malpractice exposure?

    Cagle: Well, malpractice is a departure from the standard of care exercised by similarly situated lawyers. The new rule does not automatically change the way lawyers secure their clients' consent to undertake certain actions. But, a small change was made to the preamble to the rules that makes it clear, or clearer depending on your viewpoint, that a violation of the rules can be evidence of a failure to meet the applicable standard of conduct. I suspect that we will see some divided opinions about what that all means in this context. Over time, changes to the Rules of Professional Conduct can change how lawyers do certain things, and sometimes what once was a best practice becomes the standard way of doing something.

    Dean Dietrich

    Dean R. Dietrich, Marquette 1977, of Ruder Ware, Wausau, is chair of the State Bar Professional Ethics Committee.

    Dietrich: The changes to SCR 20:1.5 require a Wisconsin lawyer to send a written communication to a client about the scope of representation, fees, and costs related to the representation. Does this new rule make sense?

    Cagle: I think on balance it's a beneficial change for clients and lawyers. Too many grievances, lawsuits, fee disputes, and other misfortunes arise out of misunderstandings or mismatched expectations at the outset of the relationship. Having the basis of the fee and the scope of the retainer clarified by a writing should mitigate many of those problems. A writing forces us to be more disciplined and deliberate in addressing these issues. Clients gain a more transparent lawyer-client relationship and maybe a little more control over the form of that relationship. For lawyers, I think this change should reduce the incidence of fee disputes, grievances, and malpractice claims.

    Dietrich: But won't lawyers now be subject to discipline just because their fee arrangements are not in writing?

    Cagle: I doubt we will see public discipline being imposed just for not having a writing if the proof is that the fee arrangement was communicated orally and was understood by the client. The absence of a writing in that case could be seen as a bit of a technical violation. That has been my experience of how the OLR generally has enforced the writing requirement of conflict of interest waivers. But, the prevailing practice and the requirement is a writing. I strongly urge lawyers to do that.

    It is important to remember that the only writing required is a notice. There is no requirement of a written fee agreement, though many lawyers find written fee agreements are a good practice. The State Bar of Wisconsin has several form notices online that lawyers can look to in creating a notice that complies with the rules. From the front page on WisBar.org, just click on the shortcut "Rules of Professional Conduct" to access the sample forms.

    Dietrich: There have been a lot of seminars about the rule changes. Is there one particular rule change that lawyers may not be aware of but should be?

    Cagle: Picking one is a hard assignment. Beyond informed consent, which we have talked about, I think lawyers certainly should be aware of the new definition of misrepresentation that the OLR proposed to the court and the court adopted. Misrepresentation is now defined as "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."

    It seems to say that I can make a misrepresentation even though I didn't know what I said was untrue and even if I didn't say anything in the face of someone else misunderstanding something. Lawyers recognize and honor their duty to be honest and truthful in what they represent to others, but they also have duties of confidentiality and zealous representation of their clients, and they are not mind readers. I'm not sure I have a very clear idea what that definition means in a lot of scenarios.

    Dietrich: In what settings can this arise?

    Cagle: Misrepresentation, along with dishonesty, fraud, and deceit, are prohibited by Rule 8.4(c). The rule applies to statements or omissions made in court; in any pretrial setting; in representing clients outside of court, such as negotiating the sale of a business; and in activities where lawyers are not representing someone, such as in a lawyer's private business transactions, public reporting such as tax reporting, and in private behavior. It is one of those very few rules that can subject lawyers to professional discipline for behavior that occurs outside their professional activities, so it adds to my anxiety about this expansive definition.

    Dietrich: These rule changes give us a lot to consider.

    Cagle: Yes. We'll continue our conversation next month.

    The Dialog Continues in April …

    In Part 2 of "A Dialog on the Rules of Professional Conduct for Wisconsin Attorneys," the authors discuss how breaching the rules may affect legal malpractice claims, significant changes to the trust account rules, duties owed to prospective clients, client confidentiality and conflict issues, and how the rules affect cross-border practice.