CENTER FOR PROFESSIONAL RESPONSIBILITY
COMMISSION ON EVALUATION OF THE RULES
OF PROFESSIONAL CONDUCT
MINUTES
Friday, March 16 - Saturday, March 17, 2001
Charleston, South CarolinaCommission Members Present:
E. Norman Veasey, Chair
Lawrence J. Fox
Albert C. Harvey
Geoffrey C. Hazard, Jr.
Patrick E. Higginbotham
W. Loeber Landau
Margaret C. Love
Susan R. Martyn
Richard E. Mulroy
Lucian T. Pera
Henry Ramsey, Jr.
Laurie D. ZelonLiaison:
Seth Rosner, Center for Professional ResponsibilityGuest:
Sheldon J. Warren, Standing Committee on Lawyer Referral and Information ServiceReporters:
Nancy J. Moore
Carl A. PierceStaff:
Jeanne P. Gray
Charlotte K. Stretch
Susan M. CampbellObservers:
See list following minutes.
The Commission met on Friday, March 16, from 9 a.m. to 4 p.m., and on Saturday, March 17, from 9 a.m. to 3 p.m.
I. Preamble and Scope
The Commission agreed to make no changes to Comment [20].
II. Rule 1.0
The Commission voted 6 to 4 to add the Reporter's proposed new sentence to the black letter definition of "confirmed in writing." The new sentence is: "If it is not feasible to obtain or transmit the writing at the time the person gives informed consent, then the lawyer must obtain or transmit it within a reasonable time thereafter."
The Commission reviewed a new Comment [1] that would read:
"If it is not feasible to obtain or transmit a written confirmation at the time the client gives informed consent, then the lawyer must obtain or transmit it within a reasonable time thereafter. If a lawyer has obtained a client’s informed consent, the lawyer may act in reliance on that consent so long as it is confirmed in writing within a reasonable time thereafter. When a lawyer has in fact obtained a client’s oral informed consent, the absence of a written confirmation should not normally be a basis for lawyer disqualification, lawyer liability or a defense to enforcement of a fee agreement."
The Commission voted 6 to 4 to include the first two sentences of the new Comment and voted 7 to 3 to exclude the third sentence.
The Commission did not agree with a suggestion to delete the word "material" from the definition of "informed consent." The Commission also disagreed with a suggestion to return to the phrase "consents after consultation" in place of "informed consent".
The Commission asked the staff to search the Rules for the word "partner" so the Reporters can consider whether the definition needs to be changed in light of changes in the profession.
The Commission approved the proposed new language in Comment [8]. A member asked the Reporters to consider adding a sentence in Comments [8] or [9] regarding the need to review screens as new personnel arrive.
A member questioned the use of the word "unit" in Comment [3]. The Commission did not agree with a suggestion to delete Comment [3] and move the last sentence to Comment [2].
The Commission did not agree with a suggestion to delete the word "ordinarily" in Comment [5]. The Commission supported a suggestion to change the word "presumed" to "inferred" or "assumed."
III. Rule 1.5
The Commission agreed that proposed language in paragraph (a)(8) can be misunderstood and agreed to return to the original Model Rule language.
The Commission voted 6 to 3 to approve the proposed change to Comment [3].
The Commission agreed to add to paragraph (b) a de minimis exception to the writing requirement. The exception will be in the amount of $500 and will be in brackets.
A motion to return paragraph (e) to the language of the current Model Rule was defeated 4 to 5.
A motion to return to the "joint responsibility" language of the current Model Rule and to include a writing requirement that includes the share each lawyer will receive passed 7 to 2.
A motion to explain in a comment that "joint responsibility" includes malpractice liability was defeated 2 to 5.
The Commission voted 6 to 2 to restore the deleted language in lines 17 to 19 in the third sentence of Comment [7].
IV. Rule 7.2
The Commission agreed to change paragraph (b)(2) to read:
"pay the usual charges of a legal service organization or a not-for-profit or qualified lawyer referral service. A qualified lawyer referral service is a lawyer referral service that has been approved by an appropriate regulatory authority."
The Commission agreed to put in the Comment additional detail about the minimum standards for lawyer referral programs from the Model Rules for Lawyer Referral Services.
The Commission approved the proposed new Comment [6] with the last phrase deleted.
The Commission approved the proposed new Comment [7].
The Reporter indicated that he will amend Comment [5] in light of the changes in the black letter rule.
V. Rule 5.4
The Commission agreed to make no changes to Rule 5.4.
VI. Rules 5.1 and 5.3
The Commission voted 6 to 5 to delete the references to law firm discipline. Those in favor of the deletion argued that, while discipline of law firms may provide additional incentive to firms and may provide increased visibility of the disciplinary system to the public, law firm discipline is not necessary since all partners and those with managerial authority are responsible for making sure the firm has in effect reasonable measures to assure compliance with Rules 5.1(a) and 5.3(a).
The Commission agreed that the Reporter's Observations or the Final Report should emphasize that Rule 5.1 was still strengthened even without the addition of law firm discipline.
VII. Rule 1.10
A motion to delete paragraph (c)(1) and to point out in the comment that a valid screen does not ensure a firm is safe from disqualification passed 6 to 4.
The Commission agreed to retain Comment [8]. A member asked the Reporter to consider striking the last sentence.
The Commission agreed to add to the second sentence of Comment [3] after the words "that lawyer will do no work on the case": "and the personal beliefs of the lawyer will not materially limit the representation by others in the firm."
The Commission did not agree with the suggestion that a Comment should address which firm is the major firm in a merger.
VIII. Rule 1.7
The Commission did not agree with the suggestion to amend paragraph (b) by creating a different writing requirement for regularly represented clients.
The Commission agreed unanimously to move the concept of informed consent into a fourth subparagraph of paragraph (b).
The Commission agreed with the Reporter's proposed changes to Comment [7] and agreed with a member's suggestion to amend the first sentence to read: "Directly adverse conflicts also arise in transaction matters."
The Commission agreed to delete the words "and the lawyer withdraws" in the fourth line of Comment [4].
The Commission agreed to add to Comment [5] the idea that, depending on the circumstances, the lawyer may have the option to withdraw from one representation in order to avoid the conflict.
The Commission agreed to amend the sentence beginning with "Similarly" in Comment [6] to get across the point that the situation is not necessarily adverse (i.e. it might be...).
The Commission agreed to delete the last sentence of Comment [15].
The Commission agreed to delete "The cost benefits of common representation" in Comment [19] and replace it with, "Balancing the cost of securing separate representation with the benefits that will be added. . . "
The Commission voted 7 to 2 to delete the word "unforeseeable" in the second to the last sentence of Comment [22].
The Commission did not agree with a member's proposed changes to Comment [26].
IX. Rule 1.8
The Commission agreed with the Reporter's proposed new Comment [19] regarding the application of Rule 1.8(j) to organizational clients. The Commission agreed to make no changes to the black letter rule prohibiting sexual relationships with clients.
A motion to put "permitted by law" back in paragraph 1.8(h)(1) was defeated 4 to 7.
X. Rules 1.9/1.11
A motion to delete the new language in the third sentence of Comment [3], "on the basis on environmental considerations", was not seconded.
A motion to delete the language in the new fourth sentence before the semicolon failed with only 2 votes.
A motion to delete the word "factual" in the first sentence was not seconded.
A motion to approve the proposed amendments to Comment [3] passed 8 to 1.
XI. Rule 3.8
The Commission agreed to delete the second sentence of Comment [3], as proposed by the Reporter, but to mention that there are similar restrictions in the U.S. Constitution.
A motion to delete "materially" in the third sentence of Comment [3] passed 4 to 3. On reconsideration, a motion to delete the third sentence passed 7 to 1. Having agreed to delete those two sentences, the Commission agreed there was no point in keeping the first sentence, and agreed to restore the Comment to the original Model Rule language with the addition of the reference to obligations in the Constitution.
XII. Rule 3.1
The Commission endorsed the Reporter's change back to "good faith", the current language of the Model Rule.
The Commission agreed to delete Comment [3].
The Commission approved the Reporter’s proposed changes to Comment [2].
XIII. Rule 1.17
The Commission did not agree with the suggestion to amend the Rule to permit the sale of a portion of a practice.
The Commission determined that the ethics rules were not the appropriate place to address the need to make provisions for protection of clients in the event of a lawyer's death and disability. The Commission asked the Reporters to consider adding a comment about the need for sole practitioners to make provisions for death or disability.
XIV. Rule 1.15
The Commission did not agree with a suggestion to amend paragraph (d).
The Commission approved a proposed new paragraph (x) regarding client trust accounts with the substitution of the word "or" instead of "and." The Commission also agreed to use the words "expenses incurred" instead of "expenses paid" in the new Comment.
XV. Rule 1.16
The Commission approved the Reporter's proposed changes in paragraph (d), but changed "expended" to "incurred."
The Commission did not agree with a suggestion delete the word "all" in Comment [9].
XVI. Rule 1.13
The Commission approved the proposed amendments to Comment [6].
XVII. Rule 3.2
The Commission approved the proposal to amend Comment [1].
XVIII. Rule 3.6
A motion to reconsider Comment [5] was defeated.
XIX. Rule 8.3
The Commission agreed to end paragraph (c) after the word "program" and to replace the phrase "serving as a member of" with the term "participating in." The Commission asked the Reporter to add something to the Comment about the rules governing lawyer assistance programs. The Commission determined that this issue should not be addressed in Rule 1.6.
XX. Rule 5.5
The Commission agreed to delete "other employees" in paragraph (b)(2)(i).
A motion to include a caveat applicable to all of paragraph (b)(2) to the effect that nothing in the Rule is intended to authorize a lawyer to establish an office in the jurisdiction without being admitted failed.
The Commission agreed that such a caveat should be applicable to paragraphs (b)(2)(ii) and (b)(2)(iii).
The Commission voted 6 to 2 to note in a Comment that in-house counsel must comply with relevant state regulations regarding admission.
The Commission asked the Reporter to make paragraphs (b)(2)(ii) and (iii) consistent with respect to the use of the word "particular."
The Commission agreed to consider adopting the suggestion of NOBC to add language to paragraph (b)(2)(iii) regarding active participation and joint responsibility.
The Commission voted 5 to 3 to strengthen the point in Comment [2] that the fact that conduct is not described in this Rule does not imply that such conduct is the unauthorized practice of law.
XXI. Rule 8.5
In response to a suggestion from the National Organization of Bar Counsel that additional detail be added regarding the effect of a disciplinary sanction in a jurisdiction where the lawyer is not admitted, the Commission requested that staff contact the Standing Committee on Professional Discipline about proposing a change to the Model Rules for Lawyer Disciplinary Enforcement that will work together with the Commission's proposed changes to Rule 8.5.
XXII. Rule 3.3
The Commission agreed to add commas around the words "or a witness called by the lawyer" in paragraph (a)(3) and in Comment [10].
XXIII. Rule 2.1
A motion to delete the third sentence in Comment [5] was defeated 4 to 4 with the Chair voting against the motion.
XXIV. Rule 8.4
The Commission voted 4 to 3 to change the words "advising a client concerning action that the client is lawfully entitled to take" in the second sentence of Comment [1] to "advising a client of what action the client is lawfully entitled to take."
Respectfully submitted,
Charlotte K. Stretch
MEETING OBSERVERS
David Caylor, International Municipal Lawyers Association
Steve Csontos, U.S. Department of Justice
Robert Cummins, Section of Litigation
Claudia Flynn, U.S. Department of Justice
Ronald Goldstock, Section of Criminal Justice
Noel Hensley, Southwestern Legal Foundation
Joseph R. Lundy, Attorneys' Liability Assurance Service
Robert E. O'Malley, D.C. Bar Association
George W. Overton, Chicago Bar Association
Hugh Reynolds Jr., Section of Tort and Insurance Practice
Sylvan Siegler, Section of Tax Law
Nancy Slonim, ABA Media Relations
William P. Smith III, National Organization of Bar Counsel