ABA STANDING COMMITTEE ON CLIENT PROTECTION
Proposed Amendments for Malpractice Coverage Disclosure
RULE 1.4 COMMUNICATION*
(a) A lawyer shall keep a client reasonably informed about the status of a matter and promptly comply with reasonable requests for information.
(b) A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation.
(c) A lawyer shall inform new and existing clients, in writing, if the lawyer does not have malpractice insurance. A lawyer shall inform the client, in writing, any time the lawyer’s malpractice insurance is terminated. A lawyer shall maintain a record of these disclosures for five years from the conclusion of the client’s representation.
(d) The requirements in (c) do not apply to full-time members of the judiciary or full-time, in-house counsel or government lawyers, when representing the entity by whom they are employed.
Comment
[1] The client should have sufficient information to participate intelligently in decisions concerning the objectives of the representation and the means by which they are to be pursued, to the extent the client is willing and able to do so. For example, a lawyer negotiating on behalf of a client should provide the client with facts relevant to the matter, inform the client of communications from another party and take other reasonable steps that permit the client to make a decision regarding a serious offer from another party. A lawyer who receives from opposing counsel an offer of settlement in a civil controversy or a proffered plea bargain in a criminal case should promptly inform the client of its substance unless prior discussions with the client have left it clear that the proposal will be unacceptable. See Rule 1.2(a). Even when a client delegates authority to the lawyer, the client should be kept advised of the status of the matter.
[2] Adequacy of communication depends in part on the kind of advice or assistance involved. For example, in negotiations where there is time to explain a proposal, the lawyer should review all important provisions with the client before proceeding to an agreement. In litigation a lawyer should explain the general strategy and prospects of success and ordinarily should consult the client on tactics that might injure or coerce others. On the other hand, a lawyer ordinarily cannot be expected to describe trial or negotiation strategy in detail. The guiding principle is that the lawyer should fulfill reasonable client expectations for information consistent with the duty to act in the client's best interests, and the client's overall requirements as to the character of representation.
[3] Ordinarily, the information to be provided is that appropriate for a client who is a comprehending and responsible adult. However, fully informing the client according to this standard may be impracticable, for example, where the client is a child or suffers from mental disability. See Rule 1.14. When the client is an organization or group, it is often impossible or inappropriate to inform every one of its members about its legal affairs; ordinarily, the lawyer should address communications to the appropriate officials of the organization. See Rule 1.13. Where many routine matters are involved, a system of limited or occasional reporting may be arranged with the client. Practical exigency may also require a lawyer to act for a client without prior consultation.
Withholding Information
[4] In some circumstances, a lawyer may be justified in delaying transmission of information when the client would be likely to react imprudently to an immediate communication. Thus, a lawyer might withhold a psychiatric diagnosis of a client when the examining psychiatrist indicates that disclosure would harm the client. A lawyer may not withhold information to serve the lawyer's own interest or convenience. Rules or court orders governing litigation may provide that information supplied to a lawyer may not be disclosed to the client. Rule 3.4(c) directs compliance with such rules or orders.
Disclosure of Lack of Malpractice Insurance
[5] Lawyers are not required to maintain professional liability insurance, but if they choose not to, that fact shall be disclosed to a client. Lawyers’ funds for client protection (clients’ security funds) are designed to reimburse clients only in the event of their lawyer’s dishonesty. See Rule 1.15, Comment [5]. The absence of professional liability insurance is a material fact that may bear upon a client’s decision to hire a lawyer. See also Rule 7.2(e) This disclosure may be accomplished either by letter or by including the disclosure in the written fee agreement, as required by Rule 1.5(b).
ABA STANDING COMMITTEE ON CLIENT PROTECTION
Proposed Amendments for Malpractice Coverage Disclosure
RULE 7.2 ADVERTISING*
(a) Subject to the requirements of Rules 7.1 and 7.3, a lawyer may advertise services through public media, such as a telephone directory, legal directory, newspaper or other periodical, outdoor advertising, radio or television, or through written or recorded communication.
(b) A copy or recording of an advertisement or communication shall be kept or two years after its last dissemination along with a record of when and where it was used.
(c) A lawyer shall not give anything of value to a person for recommending the lawyer's services except that a lawyer may
(1) pay the reasonable costs of advertisements or communications
permitted by this Rule;
(2) pay the usual charges of a not-for-profit lawyer referral service or
legal service organization; and
(3) pay for a law practice in accordance with Rule 1.17.
(d) Any communication made pursuant to this rule shall include the name of at least one lawyer responsible for its content.
(e) A lawyer shall, in any public media advertisement or communication, disclose the absence of professional liability insurance, using the following specific language, either that:
- "This lawyer is not covered by professional liability insurance" or
- "This firm is not covered by professional liability insurance"
Comment
[1] To assist the public in obtaining legal services, lawyers should be allowed to make known their services not only through reputation but also through organized information campaigns in the form of advertising. Advertising involves an active quest for clients, contrary to the tradition that a lawyer should not seek clientele. However, the public's need to know about legal services can be fulfilled in part through advertising. This need is particularly acute in the case of persons of moderate means who have not made extensive use of legal services. The interest in expanding public information about legal services ought to prevail over considerations of tradition. Nevertheless, advertising by lawyers entails the risk of practices that are misleading or overreaching.
[2] This Rule permits public dissemination of information concerning a lawyer's name or firm name, address and telephone number; the kinds of services the lawyer will undertake; the basis on which the lawyer's fees are determined, including prices for specific services and payment and credit arrangements; a lawyer's foreign language ability; names of references and, with their consent, names of clients regularly represented; and other information that might invite the attention of those seeking legal assistance.
[3] Questions of effectiveness and taste in advertising are matters of speculation and subjective judgment. Some jurisdictions have had extensive prohibitions against television advertising, against advertising going beyond specified facts about a lawyer, or against "undignified" advertising. Television is now one of the most powerful media for getting information to the public, particularly persons of low and moderate income; prohibiting television advertising, therefore, would impede the flow of information about legal services to many sectors of the public. Limiting the information that may be advertised has a similar effect and assumes that the bar can accurately forecast the kind of information that the public would regard as relevant.
[4] Neither this Rule nor Rule 7.3 prohibits communications authorized by law, such as notice to members of a class in class action litigation.
Record of Advertising
[5] Paragraph (b) requires that a record of the content and use of advertising be kept in order to facilitate enforcement of this Rule. It does not require that advertising be subject to review prior to dissemination. Such a requirement would be burdensome and expensive relative to its possible benefits, and may be of doubtful constitutionality.
Paying Others to Recommend a Lawyer
[6] A lawyer is allowed to pay for advertising permitted by this Rule and for the purchase of a law practice in accordance with the provisions of Rule 1.17, but otherwise is not permitted to pay another person for channeling professional work. This restriction does not prevent an organization or person other than the lawyer from advertising or recommending the lawyer's services. Thus, a legal aid agency or prepaid legal services plan may pay to advertise legal services provided under its auspices. Likewise, a lawyer may participate in not-for-profit lawyer referral programs and pay the usual fees charged by such programs. Paragraph (c) does not prohibit paying regular compensation to an assistant, such as a secretary, to prepare communications permitted by this Rule.
Disclosure of Lack of Malpractice Insurance
[7] The absence of professional liability insurance is a material fact that may bear upon a client’s decision to hire a lawyer. See also Rule 1.4(c) and (d).
[8] The alphabetical listing of the name, address and telephone number of the lawyer’s office in any public media is not subject to the insurance disclosure requirement. All other advertising, regardless of content, requires disclosure of the absence of professional liability insurance. A lawyer purchasing an advertisement is responsible for the content of the advertisement and must make reasonable efforts to insure the disclosure is adequately communicated in the medium selected.