Volume 20, Number 4
NOT USING NEW TECHNOLOGY: ETHICAL AND LIABILITY RISKS?
KEEP UP OR FACE PERIL
By Diane Karpman
Diane Karpman, a California ethics expert, represents attorneys before the California State Bar, handles risk management for firms, and is frequently retained as an expert witness in legal malpractice, conflicts of interest, and related matters.
We lawyers are on a precipice. The standard of care imposing liability on lawyers for legal malpractice is changing owing to the increasing use of computers. Internet accessibility is about to profoundly change our research obligations, since vast amounts of information are readily available to everyone, including courts and clients. The information revolution is a double-edged sword, providing the power to decimate our opponents but also making lawyers targets for failing to take advantage of the bounty of information. As early as 1984, a district court sanctioned a lawyer in an unusual case under Rule 11 for failing to find and disclose supporting authority, which the court asserted could have been done by using LEXIS.1 (Federal Rule 11 enhances duties regarding candor by virtue of the affirmative certification of the lawyer to the court.) According to the court of appeal, the district court's interpretation of Rule 11 was far too broad. Yet, the case sends a message to the profession that still reverberates.
In addition to cases, we have instant access to information about trends, news, clients, judges, and, of course, each other. Computer skills for such things as research, organizing documents, and communications are essential in today's legal marketplace. The failure to take advantage of something so readily available may someday increase litigation for malpractice involving the standard of care and reasonable research.
Legal malpractice is typically defined as a failure to exercise the degree of skill or knowledge ordinarily possessed by an average member of the legal profession in the same or similar circumstances. Professional negligence comes in two varieties, one involving "standard of conduct" and another involving "standard of care" or "standard of practice."
The standard of conduct. The standard of conduct is static and eternal and describes what is known as fiduciary obligations. These are the foundations of our expressly delineated duties and often the underlying principles behind the rules of conduct (an omnibus term referring to the rules of professional conduct enacted in a particular jurisdiction). For example, the duties of loyalty and confidentiality are core values of the legal profession. Therefore, regardless of what means we employ to transmit information, by smoke signals or even a message in a bottle, the content must be truthful, accurate, and the expression of our reasoned independent judgment.
The standard of care. We are obligated by the standard of care to competently represent our clients, or incur civil liability. We must utilize the legal knowledge, skill, thoroughness, and preparation necessary for that client's case. Whether it is in a minor's compromise or as lead counsel in a class action, we are presumed to be competent and to possess knowledge of the basic, elementary principles of law-that which is commonly known by other average members of the profession. We also have a duty to discover the additional law that may not be commonly known, but which can be gleaned from reasonable research. As members of the learned profession, we have an almost absolute responsibility to educate ourselves about general law, concepts, or ideas that are well settled.2 This includes information that can be readily found in newspapers and general knowledge found in textbooks and advance sheets.3
The rules of professional conduct express the lowest level of competency, or the bare minimum that is expected of us. Failing to meet that minimum level, depending upon the specific jurisdiction's application of the rules of conduct to the civil arena, can result in civil liability. A recent case maintained that malpractice is not a "failure to be brilliant, but a failure to come up to even a minimum standard of professional competence."4
Judgmental immunity. The standard of conduct also requires that we exercise independent judgment in the service of our clients; we must research, investigate, and analyze their particular problems. Our clients repose trust and confidence in us, and they do not present uniform "cookie cutter" situations. Each is entitled to our analysis of their unique circumstances. We must independently evaluate cases in order to be immune from liability for making mistakes in judgment. If we comply with our duty of competence and engage in reasonable research, then we are permitted to be incorrect in our evaluations. "An attorney need not be clairvoyant and foresee future changes in the law."5 We can make mistakes and still be protected by the venerable judgmental immunity doctrine, universally recognized. A good-faith evaluation based upon professional judgment involving unsettled or debatable propositions will not result in liability for legal malpractice.
Evolution of the standard of care. Unlike the standard of conduct, the standard of care is ever evolving and can depend on certain practice circumstances in a particular area of the law. Tax laws, for example, change like the shifting sands of the Sahara. Environmental regulations, such as permissible amounts of arsenic in water, can be modified by the EPA. As more and more attorneys become technologically savvy, the standard of practice will change, as it has in the past. Information was once written on papyrus or delivered by pony express. Now we can push a button to send e-mail.
Technology, when used properly, empowers lawyers to find more information, almost instantly. Modern technology enables vendors to supply updated information (recent decisions) faster than ever before. The lawyer employing this powerful tool has a clear advantage over the lawyer not taking advantage of it. If the increased availability of cases makes a vital Supreme Court decision available in time for inclusion in a brief, a lawyer should find and use it. If it is not available in print until after the filing deadline but was available online in time to be incorporated in the brief, then it may become irrelevant that one lawyer kept his hard copy library up to date and even checked it carefully before filing-this simply may no longer be enough.
Will the Use of Technology Change the Standard of Care?
If the average attorney would have found and used that case, then the failure to do so is below average and therefore below the ordinary standard in the community. Falling below the average, typical, ordinary standard in the community opens the door to charges of professional negligence. In this case liability would not be for failing to use technology, but for failing to find the information that other lawyers could find and use for their clients' benefit.
But is there really a difference if the only place it is commonly available is online? Print is not dead yet, but that may soon change. On April 18, 2003, the State of California broke a 150-year tradition and selected LexisNexis as the official publisher of the state's case law. As part of the deal, Lexis agreed to post all state opinions since 1850 on a website available to the public (including lawyers) without charge. Therefore, unreasonable expense can no longer offer a viable excuse in California not to access such information. It will be difficult to explain why a critical new ruling was not considered in your brief, when it is free.
Lawyers, regardless of whether their role is that of litigator or counselor, should disclose to their clients all relevant information that could have an impact upon the resolution of a case. Even if relevant information is available in hard copy, it might be difficult or impossible to find it in that format; the human brain does not necessarily think within a four-cornered box. Computer research engines can often find far more information than can traditional searches through books. Certainly the computer can identify the universe of potentially relevant cases faster. The ability to search text for specific strings of letters/words makes it possible to locate information that may not have made its way into a compendium. Compendiums are incapable of thinking beyond their four corners. Traditional methods of research were limited because the concept had to be phrased in a manner that was recognizable within the parameters of books. It was impossible to quickly find the latest information about regulations, legislative hearings, or ethics opinions. A mental association with a case-such as a unique phrase or a quote that may stick in a lawyer's mind-could not be located in a dusty tome. Now, however, a search engine such as Google.com can use the smallest unconnected scrap of knowledge to home in on the case in question. If relevant information could have been found using such online tools but it went undiscovered by a lawyer using traditional research methods, and the outcome of a case hinged on that factor, then you do not have to be a NASA specialist to know that the losing party may be grumpy and seek redress.
There is also an amazing bounty of unreported decisions-available only online-that provide a laser focus of the evolving judicial theory. Jurisdictions vary on whether or not phantom decisions are citable. However, the vision provided can be invaluable. Unreported decisions often provide keen insight into a particular judge's viewpoint, emerging judicial theory, or a novel application of the law, not to mention the valuable asset provided in the authority employed to support the decision. Certain types of information, such as judges' personality quirks, or even those of opposing counsel, are not available in hard copy but could provide a critical edge in a case. This information, like unreported decisions, is no longer limited to an "inner circle" of those in the know-it is now available to the average lawyer. Although accessing this type of information may not become standard operating procedure, the tech-savvy lawyer that does will be better off, based upon possession of more knowledge.
As discussed above, lawyers are not responsible for correctly predicting the ultimate outcome of a controverted issue. As long as the lawyer analyzed, investigated, and researched the issue, being on the "wrong side" of the controversy should not result in liability for professional negligence. To take advantage of the judgmental immunity rule, the issue must be unsettled or debatable, and the lawyer must exercise judgment based upon reasonable research. 6 The lawyer must exercise informed judgment, taking into consideration both long-established legal principles and current theories uncovered by research. We once received all our information in hard-copy volumes. Advance sheet updates took months to reach our libraries, and the liability clock was ticking more slowly. Now, we have almost instantaneous availability of information. In a sense, books should be considered suspect because electronic databases are updated within a day or two of the publication of a case. If something truly earthshaking occurs, the New York Times or the local press will cover it, and it is probably online and immediately accessible.
Once it was common to obtain specific consent from a client in the fee agreement to employ computer-assisted research, which generally required an additional fee. Perhaps now the opposite should occur: Clients are not permitted to preapprove or waive negligence or incompetence, but if we choose not to use computer research, our clients should possibly be notified.
Liability for Excessive Fees
Implicit in advising clients is the obligation to advise them of our fees, so that they can understand the basis of charges and determine their reasonableness. Lawyers have even been disciplined for travel to distant law libraries. Lawyers are prohibited from charging clients for their inexperience or getting up to speed in an area of law, absent specific knowing and informed client consent.
There are some advantages to unbundling our services to assist in providing access to justice. Yet the legitimate exercise of our independent judgment prohibits lawyers from agreeing to limitations on scope that impair or threaten our ability to provide competent representation. Litigation guidelines requiring preapproval of research, sometimes imposed by insurance companies or financially strapped clients, raise serious ethical considerations regarding independent judgment. These issues mandate a delicate balancing of our duties, since our ethical obligations would be meaningless if sophisticated or needy clients could modify them by creative contractual provisions.
Computer-assisted legal research is faster, more complete, and more efficient. Electronic research allows you to view hundreds of cases in minutes, without schlepping to the library. Sheperdizing is instant and effortless. There is a vast body of useful information about everything from a next-door neighbor to the assets and disclosure statements of Fortune 500 companies. Someday lawyers may have to obtain client approval to use books, which are far more time consuming and inefficient. Of course, you don't need your clients' approval to be inefficient. You just can't charge them for it.
If the use of computer research engines makes the average attorney in the community capable of researching a particular issue in 1.5 hours, while without the computer it takes an attorney six hours to do the work, the potential for litigation with clients respecting fees increases significantly. If both attorneys in this scenario bill time at $250 per hour, then the attorney using computer-assisted research would charge the client $375, while the attorney using only books would bill $1,500. Charging 400 percent of what the "average" attorney charges for the same work is, at least arguably, a violation of the ethical constrains on billing. It is simply not reasonable.
Again, the failure to use the computer or the online research tool itself is not the issue. The issue is the total amount charged to the client. If the attorney does not use a computer, spends six hours on the project, but bills the client only $375, there is no issue of liability; the attorney charged the going rate. If it's a few dollars more or less, that's OK, too. From the legal and ethical perspective, the lawyer has consciously undercharged for his or her time, and there is no harm to the client from the lawyer's failure to use technology. The impact of such billing practices on an attorney's economics is a whole different problem.
Time to Face the Music
Above and beyond the potential malpractice liability involving research and fees (and the need to obtain the protection of the venerable judgmental immunity doctrine), there are more basic reasons why lawyers have to use new technology. Judges are surfing the Internet, many class actions have homepages, and class notices are being sent online. Our clients are far more sophisticated as a result of the information superhighway. Once access to legal information was within the dominion and control of the profession. That is simply no longer true, since computers are ubiquitous. When a clear tune is coming from the bench and from clients, lawyers simply cannot ignore the music. Then, of course, there are the wonders of downloading music online . . . paid for, of course.
1. Golden Eagle Distributing Corp. v. Burroughs Corp., 103 F.R.D. 124, 129 (N.D. Cal. 1984), rev'd, 801 F. 2d 1531 (9th Cir. 1986). The district court sanctioned the lawyer under Rule 11 for failing to use LEXIS to find and disclose an opinion adverse to his case, even though he had already attached a LEXIS copy of an older, unreported decision that supported his client.
2. 3 MALLEN & SMITH, LEGAL MALPRACTICE 8-13 (5th ed. 2000).
3. Smith v. Lewis, (1975) 13 Cal. 3d 349, 358-360, overruled in part on other grounds by In re Marriage of Brown (1976) 15 Cal. 3d 838.
4. McKnight v. Dean, 270 F. 3d 513, 518 (7th Cir. 2001).
5. Vande Kop v. McGill, 528 N.W. 2d 609 (Iowa 1995).
6. In Village Nurseries v. Greenbaum, 101 Cal. App. 4th 26 (2002), the issue was unsettled, but the attorney failed to research it. Summary judgment was affirmed because although treatises supported the lawyer's position, he failed to establish that his advice was based on informed judgment at the time he advised his client.