April 09, 2020

Commission on Evaluation of the Rules of Professional Conduct

Changes from the November 2000 Report to the May 2001 Report

This document shows the changes the Commission made to its initial report, issued in November 2000, before submitting its final report to the House of Delegates in May 2001. These changes were made after consideration of the comments submitted on the November report.

Only paragraphs that have been changed since the November report are included in this document. The changes made after November are indicated by italics. The text of the changes for each Rule is followed by an explanation of the reasons for the changes.

RULE 1.0: TERMINOLOGY

TEXT:

(b) "Confirmed in writing," when used in reference to the informed consent of a person, denotes informed consent that is given in writing by the person or a writing that a lawyer promptly transmits to the person confirming an oral informed consent. See paragraph (e) for the definition of "informed consent." 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.

(c) "Firm" or "law firm" denotes a lawyer or lawyers in a private firm, law partnership, professional corporation, sole proprietorship or other association authorized to practice law , or in a legal services organization ; or lawyers employed in a legal services organization or the legal department of a corporation or other organization and lawyers employed in a legal services organization. See Comment, Rule 1.10.

(e) "Informed consent" denotes the agreement by a person to a proposed course of conduct after the lawyer has communicated adequate information and explanation about the material risks of and reasonably available alternatives to the proposed course of conduct.

(g) "Partner" denotes a member of a partnership and , a shareholder in a law firm organized as a professional corporation , or a member of an association authorized to practice law .

COMMENTARY:

Confirmed in Writing

[1] 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.

[4] Similar questions can also arise with respect to lawyers in legal aid and legal services organizations. Lawyers employed in the same unit of a legal service organization constitute a firm but not necessarily those employed in separate units. As in the case of independent practitioners, whether the lawyers should be treated as associated with each other can depend on the particular Rule that is involved and on the specific facts of the situation Depending upon the structure of the organization, the entire organization or different components of it may constitute a firm or firms for purposes of these Rules .

Informed Consent

[6] Many of the Rules of Professional Conduct require the lawyer to obtain the informed consent of a client or other person (e.g., a former client or, under certain circumstances, a prospective client) before accepting or continuing representation or pursuing a course of conduct. See, e.g, Rules 1.2(c), 1.6(a) and 1.7(b). The communication necessary to obtain such consent will vary according to the Rule involved and the circumstances giving rise to the need to obtain informed consent. The lawyer must make reasonable efforts to ensure that the client or other person possesses information reasonably adequate to make an informed decision. Ordinarily, this will require communication that includes a disclosure of the facts and circumstances giving rise to the situation, any explanation reasonably necessary to inform the client or other person of the material advantages and disadvantages of the proposed course of conduct and a discussion of the client's or other person's options and alternatives. In some circumstances it may be appropriate for a lawyer to advise a client or other person to seek the advice of other counsel. A lawyer need not inform a client or other person of facts or implications already known to the client or other person; nevertheless, a lawyer who does not personally inform the client or other person assumes the risk that the client or other person is inadequately informed and the consent is invalid. In determining whether the information and explanation provided are reasonably adequate, relevant factors include whether the client or other person is experienced in legal matters generally and in making decisions of the type involved, and whether the client or other person is independently represented by other counsel in giving the consent. Normally, such persons need less information and explanation than others, and generally a client or other person who is independently represented by other counsel in giving the consent should be presumed assumed to have given informed consent.

Screened

[9] The purpose of screening is to assure the affected parties that confidential information known by the personally disqualified lawyer remains protected. The personally disqualified lawyer should acknowledge the obligation not to communicate with any of the other lawyers in the firm with respect to the matter. Similarly, other lawyers in the firm who are working on the matter should be informed that the screening is in place and that they may not communicate with the personally disqualified lawyer with respect to the matter. Additional screening measures that are appropriate for the particular matter will depend on the circumstances. To implement, reinforce and remind all affected lawyers of the presence of the screening, it may be appropriate for the firm to undertake such procedures as The specific screening measures that are appropriate for any particular matter will depend on the circumstances but should provide reasonable assurance that there will be no significant risk to any information that the disqualified lawyer is obligated to protect. Where appropriate, such procedures could include a written undertaking by the screened lawyer to avoid any communication with other firm personnel and any contact with any firm files or other materials relating to the matter, written notice and instructions to all other firm personnel forbidding any communication with the screened lawyer relating to the matter, denial of access by the screened lawyer to firm files or other materials relating to the matter and periodic reminders of the screen to the screened lawyer and all other firm personnel.

Model Rule 1.0

Reporter’s Explanation of Changes from the November Report

TEXT:

1. Paragraph (b): "Confirmed in writing": Added new sentence on flexibility of timing

The purpose of the change is to clarify in the text of the Rules, rather than merely in Comment [20] to Rule 1.7, that if it is not feasible to obtain or transmit a writing at the time that informed consent is given, then the lawyer must obtain or transmit it within a reasonable time thereafter.

2. Paragraph (c): "Firm": Added reference to "other association authorized to practice law" and moved reference to legal services organization

The reference to "other association authorized to practice law" was added to encompass lawyers practicing in limited liability entities. The reference to legal services organization was moved to reflect the fact that lawyers are typically employed in such organizations, as in the legal department of a corporation or other organization.

3. Paragraph (e): "Informed consent": Added "by a person"

This change is stylistic change. No substantive change is intended.

4. Paragraph (g): "Partner": Added reference to "member of an association authorized to practice law"

As with the change to paragraph (c), this reference was added to encompass lawyers practicing in limited liability entities.

COMMENTARY:

[1] This new comment was added to clarify that if it is not feasible to obtain or transmit a writing at the time a person gives informed consent, a lawyer may undertake or continue representation based on the oral informed consent, so long as the writing is obtained or transmitted within a reasonable time thereafter.

[4] The Commission concluded that the current comment is confusing. The revision is intended to clarify that organizational structure of legal aid and legal services organizations will determine whether the entire organization or different components will constitute a firm or firms for purposes of these Rules.

[6] The addition of "the client or other person is" is stylistic, and no substantive change is intended. The substitution of "assumed" for "presumed" is intended to avoid any implication that a particular burden of proof is required to establish that a person who is independently represented did not give informed consent.

[9] The purpose of these revisions is to emphasize that the effectiveness of screening depends on the willingness of the screened lawyer not to discuss the matter, as well as the knowledge of lawyers working on the matter that they are not supposed to discuss the matter with or around the screened lawyer. The term "should" is used, rather than "must", in acknowledgment that these are not black-letter requirements, but rather advice to lawyers that failure to include such measures is likely to render the screen ineffective.

RULE 1.2: SCOPE OF REPRESENTATION AND ALLOCATION OF AUTHORITY
BETWEEN CLIENT AND LAWYER

COMMENTARY:

[9] [13] Paragraph (d) applies whether or not the defrauded party is a party to the transaction. Hence, a lawyer should must not participate in a sham transaction ; for example, a transaction to effectuate criminal or fraudulent escape avoidance of tax liability. Paragraph (d) does not preclude undertaking a criminal defense incident to a general retainer for legal services to a lawful enterprise. The last clause of paragraph (d) recognizes that determining the validity or interpretation of a statute or regulation may require a course of action involving disobedience of the statute or regulation or of the interpretation placed upon it by governmental authorities.

Model Rule 1.2

Reporter’s Explanation of Changes from the November Report

COMMENTARY:

[13] In response to a concern voiced by tax practitioners that the reference in the current Comment to a "sham transaction" might be construed to embrace a transaction that might not be respected by the Internal Revenue Service because it lacked economic substance, but would not be criminal or fraudulent as a matter of tax law, the Commission dropped the reference to a sham transaction in favor of a more direct reference to "a transaction to effectuate criminal or fraudulent avoidance of tax liability."

RULE 1.3: DILIGENCE

COMMENTARY:

[5] To prevent neglect of client matters in the event of a sole practitioner's death or disability, the duty of diligence may require that each sole practitioner prepare a plan, in conformity with applicable rules, that designates another competent lawyer to review client files, notify each client of the lawyer's death or disability, and determine whether there is a need for immediate protective action. Cf. Rule 28 of the American Bar Association Model Rules for Lawyer Disciplinary Enforcement (providing for court appointment of a lawyer to inventory files and take other protective action in absence of a plan providing for another lawyer to protect the interests of the clients of a deceased or disabled lawyer).

Model Rule 1.3

Reporter’s Explanation of Changes from the November Report

COMMENTARY:

[5] This new Comment has been added to alert sole practitioners to the need to have a plan in place to prevent client matters from being neglected in the event of the sole practitioner's death or disability. It also calls attention to the recommendation of the Senior Lawyers Division approved by the House of Delegates in 1997 that "urges state, local and territorial jurisdictions, that do not now have programs in place, to address the issue of the death or disability of lawyers and to develop and implement through court rule or other appropriate means effective procedures for the protection of clients' interests and property and the ethical closure or disposition of the practices." It is also consistent with Formal Ethics Opinion 92-369.

RULE 1.5: FEES

TEXT:

(a)(8) whether the fee is fixed or contingent the degree of risk assumed by the lawyer.

(b) When the lawyer has not regularly represented the client, The scope of the representation and the basis or rate of the fee and expenses for which the client will be responsible shall be communicated to the client , preferably in writing, before or within a reasonable time after commencing the representation , except when the lawyer will charge a regularly represented client on the same basis or rate. Any changes in the basis or rate of the fee or expenses shall also be communicated in writing. This paragraph does not apply in any matter in which it is reasonably foreseeable that total cost to a client, including attorney fees, will be [$500] or less.

(e)(1) the division is in proportion to the services performed by each lawyer or , by written agreement with the client, each lawyer assumes joint responsibility for the representation;

(2) the client is advised of and does not object agrees , in a writing signed by the client, to the participation of all the lawyers involved arrangement, including the share each lawyer will receive , and the agreement is confirmed in writing; and

(3) (2) the total fee is reasonable.

COMMENTARY:

[1] [2] When the lawyer has regularly represented a client, they ordinarily will have evolved an understanding concerning the basis or rate of the fee and the expenses for which the client will be responsible. In a new client-lawyer relationship, however, an a written understanding as to the fee fees and expenses should must be promptly established , unless the total cost to the client is unlikely to exceed [$500] . It is not necessary to recite all the factors that underlie the basis of the fee, but only those that are directly involved in its computation. It is sufficient, for example, to state that the basic rate is an hourly charge or a fixed amount or an estimated amount, or to identify the factors that may be taken into account in finally fixing the fee. When developments occur during the representation that render an earlier estimate substantially inaccurate, a revised estimate should be provided to the client. Generally, furnishing the client with a simple memorandum or copy of the lawyer's customary fee arrangements will suffice, provided that the writing states the general nature of the legal services to be provided, the basis, rate or total amount of the fee and whether and to what extent the client will be responsible for any costs, expenses or disbursements in the course of the representation. A written statement concerning the fee terms of the engagement reduces the possibility of misunderstanding. Furnishing the client with a simple memorandum or a copy of the lawyer's customary fee schedule is sufficient if the basis or rate of the fee is set forth. When the service provided is brief, providing a prompt written bill satisfies the requirements of this paragraph.

[3] Contingent fees, like any other fees, are subject to the reasonableness standard of paragraph (a) of this Rule , including consideration of the degree of risk assumed by the lawyer at the outset of the representation . In determining whether a particular contingent fee is reasonable, or whether it is reasonable to charge any form of contingent fee, a lawyer must consider all of the factors that are relevant under the circumstances. Applicable law may impose limitations on contingent fees, such as a ceiling on the percentage allowable, or may require a lawyer to offer clients an alternative basis for the fee. Applicable law also may apply to situations other than a contingent fee, for example, government regulations regarding fees in certain tax matters.

[4] [7] A division of fee is a single billing to a client covering the fee of two or more lawyers who are not in the same firm. A division of fee facilitates association of more than one lawyer in a matter in which neither alone could serve the client as well, and most often is used when the fee is contingent and the division is between a referring lawyer and a trial specialist. Paragraph (e) permits the lawyers to divide a fee on either on the basis of the proportion of services they render or by agreement if each lawyer between the participating lawyers if all assume s responsibility for the representation as a whole . In addition, and when the client is advised and does not object. It does not require disclosure to the client of must agree s, in a writing signed by the client , to the arrangement, including the share that each lawyer is to receive , and the agreement must be confirmed in writing . Contingent fee agreements must be in a writing signed by the client and must otherwise comply with paragraph (c) of this Rule. Joint responsibility for the representation entails financial and ethical responsibility for the representation as if the lawyers were associated in a partnership. the obligations stated in Rule 5.1 for purposes of the matter involved. A lawyer should only refer a matter to a lawyer whom the referring lawyer reasonably believes is competent to handle the matter. See Rule 1.1. If the referring lawyer knows that the lawyer to whom the matter was referred has engaged in a violation of these Rules, the referring lawyer should take appropriate steps to protect the interests of the client.

Model Rule 1.5

Reporter’s Explanation of Changes from the November Report

TEXT:

1. Paragraph (a): return to original language on contingent fees

The Commission agrees that the proposed change was confusing at best and possibly misleading in suggesting that the degree of risk is a factor that is typically known at the outset of a representation. Given that courts have the ability to address problems under the existing rules, the Commission is recommending retention of the current language in paragraph (a)(8).

2. Paragraph (b): addition of de minimis exception to writing requirement

The Commission is recommending that there be a de minimis exception to the writing requirement. Also, providing such an exception makes clear that there is no requirement that the scope of the representation be communicated in writing when there will be no fee at all, as is the case not only in pro bono matters but also in matters where the lawyer is salaried, e.g., an in-house or government lawyer. The Commission recommends putting an amount in brackets in an acknowledgment that the size of the de minimus exception is a matter that is likely to vary among the states. The Commission is recommending a fairly low amount for the exception on the ground that it is middle and lower income clients who are most in need of the protection offered by this requirement.

3. Paragraph (e): division of fees: text revision

The Commission recommends retaining the current text of this Rule, with the sole exception that the client must agree, and the agreement must be confirmed in writing, to the participation of each lawyer, including the share of the fee that each lawyer will receive.

COMMENTARY:

[2] The change in the second sentence reflects the change in the text of paragraph (b). The additional last sentence clarifies that when the service provided is brief, prompt submission of a written bill is sufficient to meet the requirements of this Rule.

[3] The change in the first sentence conforms the comment to the changes made to paragraph (a)(8). The change in the second sentence is stylistic, and no substantive change is intended.

[7] The changes in this paragraph reflect the changes made to paragraph (e). The Commission proposes revising the explanation of "joint responsibility" to entail legal responsibility, including financial and ethical responsibility, as if the lawyers were associated in a partnership. This is the interpretation that has been given to the term according to ABA Informal Opinion 85-1514, as well a number of state ethics opinions.

RULE 1.7: CONFLICT OF INTEREST: GENERAL RULE CURRENT CLIENTS

TEXT:

(b) Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a lawyer may represent a client if each affected client gives informed consent, confirmed in writing, and :

(2) the representation is not prohibited by law; and

(3) the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal .; and

(4) each affected client gives informed consent, confirmed in writing.

COMMENTARY:

[2] [4] If such a conflict arises after representation has been undertaken, the lawyer should ordinarily must withdraw from the representation , unless the lawyer has obtained the informed consent of the client under the conditions of paragraph (b). See Rule 1.16. Where more than one client is involved and the lawyer withdraws because a conflict arises after representation, whether the lawyer may continue to represent any of the clients is determined both by the lawyer's ability to comply with duties owed to the former client and by the lawyer's ability to represent adequately the remaining client or clients, given the lawyer's duties to the former client. See Rule 1.9. See also Rule 2.2(c) Comments [5] and [29]. As to whether a client-lawyer relationship exists or, having once been established, is continuing, see Comment to Rule 1.3 and Scope.

[5] Unforeseeable developments, such as changes in corporate and other organizational affiliations or the addition or realignment of parties in litigation, might create conflicts in the midst of a representation, as when a company sued by the lawyer on behalf of one client is bought by another client represented by the lawyer in an unrelated matter. Depending on the In these circumstances, the lawyer may have the option to withdraw from one of the representations in order to avoid the conflict. The lawyer must seek court approval where necessary and take steps to minimize harm to the clients. See Rule 1.16. The lawyer must continue to protect the confidences of the client from whose representation the lawyer has withdrawn. See Rule 1.9(c).

[3] [6] As a general proposition, loyalty Loyalty to a current client prohibits undertaking representation directly adverse to that client without that client's informed consent. Paragraph (a) expresses that general rule. Thus, absent consent, a lawyer ordinarily may not act as an advocate in one matter against a person the lawyer represents in some other matter, even if it is when the matters are wholly unrelated. The client as to whom the representation is directly adverse is likely to feel betrayed, and the resulting damage to the client-lawyer relationship is likely to impair the lawyer's ability to represent the client effectively. In addition, the client on whose behalf the adverse representation is undertaken reasonably may fear that the lawyer will pursue that client's case less effectively out of deference to the other client, i.e., that the representation may be materially limited by the lawyer's interest in retaining the current client. Similarly, a lawyer acts directly adverse ly to a client if it will be necessary for conflict may arise when a the lawyer is required to cross-examine a client who appears as a witness in a lawsuit involving another client , as when the testimony will be damaging to the client who is represented in the lawsuit. On the other hand, simultaneous representation in unrelated matters of clients whose interests are only generally economically adverse, such as representation of competing economic enterprises in unrelated litigation, does not ordinarily constitute a conflict of interest and thus may not require consent of the respective clients. Paragraph (a) applies only when the representation of one client would be directly adverse to the other.

[7] Although d Directly adverse conflicts arise most frequently in litigation, they can also arise in transactional matters. For example, if a lawyer is asked to represent a the seller of a business in negotiations with a buyer represented by the lawyer, not in the same transaction but in another, unrelated matter, the lawyer could not undertake the representation without the informed consent of each client.

[6] [10] The lawyer's own interests should not be permitted to have an adverse effect on representation of a client. For example, a lawyer's need for income should not lead the lawyer to undertake matters that cannot be handled competently and at a reasonable fee. See Rules 1.1 and 1.5. If if the probity of a lawyer's own conduct in a transaction is in serious question, it may be difficult or impossible for the lawyer to give a client detached advice. Similarly, when a lawyer has discussions concerning possible employment with an opponent of the lawyer's client, or with a law firm representing the opponent, such discussions could materially limit the lawyer's representation of the client. A Similarly, In addition, a lawyer may not allow related business interests to affect representation, for example, by referring clients to an enterprise in which the lawyer has an undisclosed financial interest. See Rule 1.8 for specific Rules pertaining to a number of personal interest conflicts, including business transactions with clients. See also Rule 1.10 (personal interest conflicts under Rule 1.7 ordinarily are not imputed to other lawyers in a law firm).

[15] Consentability is typically determined by considering whether the interests of the clients will be adequately protected if the clients are permitted to give their informed consent to representation burdened by a conflict of interest. Thus, under paragraph (b)(1), representation is prohibited if in the circumstances the lawyer cannot reasonably conclude that the lawyer will be able to provide competent and diligent representation. See Rule 1.1 (competence) and Rule 1.3 (diligence). In determining whether a multiple-client conflict is consentable, one factor to be considered is whether the representation will be provided by a single lawyer or by different lawyers in the same firm. Cf. Rule 1.10.

[19] Under some circumstances it may be impossible to make the disclosure necessary to obtain consent. For example, when the lawyer represents different clients in related matters and one of the clients refuses to consent to the disclosure necessary to permit the other client to make an informed decision, the lawyer cannot properly ask the latter to consent. In some cases the alternative to common representation can be that each party may have to obtain separate representation with the possibility of incurring additional costs. The cost benefits of common representation These costs, along with the benefits of securing separate representation, are factors that may be considered by the affected client in determining whether common representation is in the client's interests.

[20] Paragraph (b) requires the lawyer to obtain the informed consent of the client, confirmed in writing. Such a writing may consist of a document executed by the client or one oral consent that the lawyer promptly records and transmits to the client following an oral consent. See Rule 1.0(b). See also Rule 1.0(n) (writing includes electronic transmission). If it is not feasible to obtain or transmit the writing at the time the client gives informed consent, then the lawyer must obtain or transmit it within a reasonable time thereafter. See Rule 1.0(b). The requirement of a writing does not supplant the need in most cases for the lawyer to talk with the client, to explain the risks and advantages, if any, of representation burdened with a conflict of interest, as well as reasonably available alternatives, and to afford the client a reasonable opportunity to consider the risks and alternatives and to raise questions and concerns. Rather, the writing is required in order to impress upon clients the seriousness of the decision the client is being asked to make and to avoid disputes or ambiguities that might later occur in the absence of a writing. The writing need not take any particular form; it should, however, include disclosure of the relevant circumstances and reasonably foreseeable risks of the conflict of interest, as well as the client's agreement to the representation despite such risks.

[22] Whether a lawyer may properly request a client to waive conflicts that might arise in the future is subject to the test of paragraph (b). The effectiveness of such waivers is generally determined by the extent to which the client reasonably understands the material risks that the waiver entails. The more comprehensive the explanation of the types of future representations that might arise and the actual and reasonably foreseeable adverse consequences of those representations, the greater the likelihood that the client will have the requisite understanding. Thus, if the client agrees to consent to a particular type of conflict with which the client is already familiar, then the consent ordinarily will be effective with regard to that type of conflict. If the consent is general and open-ended, then the consent ordinarily will be ineffective, because it is not reasonably likely that the client will have understood the material risks involved. On the other hand, if the client is an experienced user of the legal services involved and is reasonably informed regarding the risk that a n unforeseeable conflict may arise, such consent is more likely to be effective, particularly if , e.g., the client is independently represented by other counsel in giving consent and the consent is limited to future conflicts unrelated to the subject of the representation. In any case, advance consent cannot be effective if the circumstances that materialize in the future are such as would make the conflict nonconsentable under paragraph (b).

[13] [27] Conflict For example, conflict questions may also arise in estate planning and estate administration. A lawyer may be called upon to prepare wills for several family members, such as husband and wife, and, depending upon the circumstances, a conflict of interest may arise be present , as when one spouse owns significantly more property than the other or has children by a prior marriage . In estate administration the identity of the client may be unclear under the law of a particular jurisdiction. Under one view, the client is the fiduciary; under another view the client is the estate or trust, including its beneficiaries. The In order to comply with conflict of interest rules, the lawyer should make clear the lawyer's relationship to the parties involved.

[31] As to the duty of confidentiality, continued common representation will almost certainly be inadequate if one client attempts to keep something in confidence between the lawyer and that client, which is not to be disclosed to the other client asks the lawyer not to disclose to the other client certain information relevant to the common representation . This is so because the lawyer has an equal duty of loyalty to each client, and each client has the right to be informed of anything bearing on the representation that might affect that client's interests and the right to expect that the lawyer will use that information to that client's benefit. See Rule 1.4. The lawyer should, at the outset of the common representation and as part of the process of obtaining each client's informed consent, advise each client that information will be shared and that the lawyer will have to withdraw if one client decides that some matter material to the representation should be kept from the other. In limited circumstances, it may be appropriate for the lawyer to proceed with the representation when the clients have agreed, after being properly informed, that the lawyer will keep certain information confidential. For example, the lawyer may reasonably conclude that failure to disclose one client's trade secrets to another client will not adversely affect representation involving a joint venture between the clients and agree to keep that information confidential with the informed consent of both clients.

Model Rule 1.7

Reporter’s Explanation of Changes from the November Report

TEXT:

1. Paragraph (b): reorganization

The reorganization of this paragraph clarifies that the lawyer should obtain the client(s)'s informed consent only after determining that the conflict is consentable under subparagraphs (1) through (3).

COMMENTARY:

[4] The Commission deleted "and the lawyer withdraws" because it is unclear what representation or representations the lawyer is withdrawing from until the lawyer determines whether he or she may continue to represent any of the clients.

[5] These changes reflect that whether the lawyer will be permitted to withdraw from representing one of the clients in order to avoid the conflict will depend on the circumstances.

[6] These changes reflect the Commission's conclusions that cross-examination of a client-witness does not present directly adverse conflicts in all instances. An example is given of when such cross-examination would present a clear conflict

[7] In the first sentence, the Commission deleted the statement regarding the frequency with which directly adverse conflicts arise in both litigation and transactional matters. The second sentence was revised to provide a clearer example of a directly adverse conflict arising in transactional practice.

[10] These changes are intended to incorporate ABA Opinion 96-400, which addresses a lawyer negotiating for employment with opposing counsel, which might lead to a lawyer switching to the law firm opposing the lawyer's client in the middle of a representation.

[15] The Commission deleted the last sentence because it is confusing.

[19] This change is stylistic, and no substantive change is intended.

[20] The changes to the second sentence are stylistic, and no substantive change is intended. The cross-reference to Rule 1.0(b) was added in recognition of the changes made to that Rule. The Commission deleted the last sentence of this comment as providing too much detail regarding the amount of information that must be included in the required writing.

[22] These changes are intended to provide additional guidance on the circumstances in which advance waivers are more likely to be effective.

[27] The deletion of the specific references to spouses with different property interests and children by a prior marriage is intended to avoid the implication that it is only in these types of circumstances that material limitation conflicts are present when a lawyer represents both spouses in estate planning matters.

[31] This change is stylistic, and no substantive change is intended.

RULE 1.8: CONFLICT OF INTEREST: PROHIBITED TRANSACTIONS
CURRENT CLIENTS: SPECIFIC RULES

COMMENTARY:

[19] When the client is an organization, paragraph (j) of this Rule prohibits a lawyer for the organization (whether inside counsel or outside counsel) from having a sexual relationship with a constituent of the organization who supervises, directs or regularly consults with that lawyer concerning the organization's legal matters.

[19][20] Under paragraph (k), a prohibition on conduct by an individual lawyer in paragraphs (a) through (i) also applies to all lawyers associated in a firm with the personally prohibited lawyer. For example, one lawyer in a firm may not enter into a business transaction with a client of another member of the firm without complying with paragraph (a), even if the first lawyer is not personally involved in the representation of the client. The prohibition set forth in paragraph (j) is personal and is not applied to associated lawyers.

Model Rule 1.8

Reporter’s Explanation of Changes from the November Report

COMMENTARY:

[19] This new comment was added to explain how paragraph (j) of the rule is applied in the case of an organizational client.

[20] This revision to former comment [19], now renumbered, is intended to clarify the application of paragraph (k).

RULE 1.9: CONFLICT OF INTEREST: DUTIES TO FORMER CLIENT CLIENTS

COMMENTARY:

[1] After termination of a client-lawyer relationship, a lawyer has certain continuing duties with respect to confidentiality and conflicts of interest and thus may not represent another client except in conformity with this Rule. The principles in Rule 1.7 determine whether the interests of the present and former client are adverse. Thus Under this Rule, for example, a lawyer could not properly seek to rescind on behalf of a new client a contract drafted on behalf of the former client. So also a lawyer who has prosecuted an accused person could not properly represent the accused in a subsequent civil action against the government concerning the same transaction. Nor could a lawyer who has represented multiple clients in a matter represent one of the clients against the others in the same or a substantially related matter after a dispute arose among the clients in that matter, unless all affected clients give informed consent. See Comment [9]. Current and former government lawyers must comply with this Rule to the extent required by Rule 1.11.

[2] The scope of a "matter" for purposes of this Rule may depend s on the facts of a particular situation or transaction. The lawyer's involvement in a matter can also be a question of degree. When a lawyer has been directly involved in a specific transaction, subsequent representation of other clients with materially adverse interests in that transaction clearly is prohibited. On the other hand, a lawyer who recurrently handled a type of problem for a former client is not precluded from later representing another client in a wholly factually distinct problem of that type even though the subsequent representation involves a position adverse to the prior client. Similar considerations can apply to the reassignment of military lawyers between defense and prosecution functions within the same military jurisdictions. The underlying question is whether the lawyer was so involved in the matter that the subsequent representation can be justly regarded as a changing of sides in the matter in question.

[3] Matters are "substantially related" for purposes of this Rule if they involve the same subject matter transaction or legal dispute or if there otherwise is a substantial risk that confidential factual information as would normally have been obtained in the prior representation would materially advance the client's position in the subsequent matter. For example, a lawyer who has represented a businessperson and learned extensive private financial information about that person may not then represent that person's spouse in seeking a divorce. Similarly, a lawyer who has previously represented a client in securing environmental permits to build a shopping center would be precluded from representing neighbors seeking to oppose rezoning of the property but on the basis of environmental considerations; however, the lawyer would not be precluded, on the grounds of substantial relationship, from defending a tenant of the completed shopping center in resisting eviction for nonpayment of rent. Information that has been disclosed to the public or to other parties adverse to the former client ordinarily will not be disqualifying; nor will government information that the lawyer is impliedly authorized to use or disclose or that is otherwise known to persons outside the government agency involved . Information acquired in a prior representation may have been rendered obsolete by the passage of time, a circumstance that may be relevant in determining whether two representations are substantially related. In the case of an organizational client, general knowledge of the client’s policies and practices ordinarily will not preclude a subsequent representation; on the other hand, knowledge of specific facts gained in a prior representation that is relevant to the matter in question ordinarily will preclude such a representation. A former client is not required to reveal the confidential information learned by the lawyer in order to establish a substantial risk that the lawyer has confidential information to use in the subsequent matter. A conclusion about the possession of such information may be based on the general nature of the services the lawyer provided the former client and information that would in ordinary practice be learned by a lawyer providing such services. In the case of an organizational client, general knowledge of the client's business ordinarily will not preclude a subsequent representation; on the other hand, specific knowledge that is relevant to the matter in question ordinarily will preclude such a representation.

Model Rule 1.9

Reporter’s Explanation of Changes from the November Report

COMMENTARY:

[1] This change is stylistic only, and no substantive change is intended.

[2] and [3] These changes are designed to further refine and cabin the concept of substantial relationship, particularly as it affects the potential disqualification of former lawyers for an organization, including the government.

RULE 1.10: IMPUTED DISQUALIFICATION IMPUTATION OF
CONFLICTS OF INTEREST: GENERAL RULE

TEXT:

(c) (1) the matter does not involve a proceeding before a tribunal in which the personally disqualified lawyer had a substantial role;

COMMENTARY:

[1] For purposes of the Rules of Professional Conduct, the term "firm" includes denotes lawyers in a private firm, and law partnership, professional corporation, sole proprietorship or other association authorized to practice law , or in a legal services organization ; or lawyers employed in a legal services organization or the legal department of a corporation or other organization or in a legal services organization. See Rule 1.0(c). Whether two or more lawyers constitute a firm within this definition can depend on the specific facts. For example, two practitioners who share office space and occasionally consult or assist each other ordinarily would not be regarded as constituting a firm. However, if they present themselves to the public in a way suggesting that they are a firm or conduct themselves as a firm, they should be regarded as a firm for purposes of the Rules. The terms of any formal agreement between associated lawyers are relevant in determining whether they are a firm, as is the fact that they have mutual access to information concerning the clients they serve. Furthermore, it is relevant in doubtful cases to consider the underlying purpose of the Rule that is involved. A group of lawyers could be regarded as a firm for purposes of the rule that the same lawyer should not represent opposing parties in litigation, while it might not be so regarded for purposes of the rule that information acquired by one lawyer is attributed to another. See Rule 1.0, Comments [1] - [3] [2] - [4] .

[3] The rule in paragraph (a) does not prohibit representation where neither questions of client loyalty nor protection of confidential information are presented. Where one lawyer in a firm could not effectively represent a given client because of strong political beliefs, for example, but 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 firm should not be disqualified. On the other hand, if an opposing party in a case were owned by a lawyer in the law firm, and others in the firm would be materially limited in pursuing the matter because of loyalty to that lawyer, the personal disqualification of the lawyer would be imputed to all others in the firm.

[6] Where the conditions of paragraph (c) are met, imputation is removed, and consent to the new representation is not required. Screening is not effective to avoid imputed disqualification of other lawyers in the firm if the personally disqualified lawyer participated substantially in representing the former client in the same matter before a tribunal in which the lawyer's new firm represents an adversary of the former client. Determining whether a lawyer's role in representing the former client was substantial involves consideration of such factors as the lawyer's level of responsibility in the matter, the duration of the lawyer's participation, the extent to which the lawyer advised or had personal contact with the former client and the former client's personnel and the extent to which the lawyer was exposed to confidential information of the former client likely to be material in the matter. Lawyers should be aware, however, that courts may impose more stringent obligations in ruling upon motions to disqualify a lawyer from pending litigation.

[8] Notice, including a description of the screened lawyer's prior representation and of the screening procedures employed, generally should be given as soon as practicable after the need for screening becomes apparent. When disclosure is likely to significantly injure the client, a reasonable delay may be justified.

[11] Where a lawyer is prohibited from engaging in certain transactions under Rule 1.8, paragraph (k) of that rule, and not this Rule, determines whether that prohibition also applies t o other lawyers associated in a firm with the personally prohibited lawyer.

Model Rule 1.10

Reporter’s Explanation of Changes from the November Report

TEXT:

1. Paragraph (c): delete pending litigation exception

The pending litigation exception has been deleted on the ground that it will require extensive litigation on whether a lawyer's involvement constituted a "substantial relationship." The Commission recognizes that this is factor that might well be considered in disqualification motions by courts concerned with the appearance of impropriety, but believes that it is inappropriate for incorporation into a disciplinary rule. With respect to the impropriety of a lawyer negotiating employment with the adversary while the case is pending, the Commission has proposed additional commentary for Rule 1.7 addressing this material limitation conflict. See Rule 1.7, Comment [10].

COMMENTARY:

[1] These changes conform this comment to the changes in Rule 1.0(c).

[3] This revision is intended to clarify the application of the "personal interest" exception to imputation.

[6] The second two sentences of the comment proposed in the November Report have been deleted to conform this comment to the change in paragraph (c). The purpose of the new second sentence is to clarify that courts may impose more stringent standards on lawyers in determining whether to disqualify a lawyer from representing a client in pending litigation.

[8] The last sentence has been deleted as confusing and unnecessary.

[11] Historically lawyers have relied on paragraph (a) of Rule 1.10 for a complete list of the conflict Rule numbers and paragraph references that trigger imputed disqualification. All references to Rule 1.8 have been removed from Rule 1.10(a) because none of the Rule 1.8 paragraphs fits logically or grammatically in Rule 1.10(a). The Commission added this new paragraph for the assistance of lawyers who look to Rule 1.10 to determine if the prohibitions of Rule 1.8 apply to other lawyers in the firm.

RULE 1.11: SUCCESSIVE SPECIAL CONFLICTS OF INTEREST FOR FORMER
AND CURRENT GOVERNMENT OFFICERS
AND PRIVATE EMPLOYMENT EMPLOYEES

COMMENTARY:

[3] [4] Where This Rule represents a balancing of interests. On the one hand, where the successive clients are a government public agency and a private another client, public or private, the risk exists that power or discretion vested in public authority that agency might be used for the special benefit of a private the other client. A lawyer should not be in a position where benefit to a private the other client might affect performance of the lawyer's professional functions on behalf of public authority the government . Also, unfair advantage could accrue to the private other client by reason of access to confidential government information about the client's adversary obtainable only through the lawyer's government service. However On the other hand, the rules governing lawyers presently or formerly employed by a government agency should not be so restrictive as to inhibit transfer of employment to and from the government. The government has a legitimate need to attract qualified lawyers as well as to maintain high ethical standards. The provisions for screening and waiver in paragraph (b) are necessary to prevent the disqualification rule from imposing too severe a deterrent against entering public service. The limitation of disqualification in paragraphs (a)(1), (a)(3) and (d)(2) to matters involving a specific party or parties, rather than extending disqualification to all substantive issues on which the lawyer worked, serves a similar function.

[4] [5] When the client is an agency of a lawyer has been employed by one government agency and then moves to a second government agency, it may be appropriate to treat that second agency should be treated as a nother private client for purposes of this Rule if the lawyer thereafter represents an agency of another government, as when a lawyer represents is employed by a city and subsequently is employed by a federal agency. However, because the conflict of interest is governed by paragraph (d), the latter agency is not required to screen the lawyer as paragraph (b) requires a law firm to do. The question whether two government agencies should be regarded as the same or different clients for conflict of interest purposes is beyond the scope of these Rules. See Rule 1.13 Comment [6].

Model Rule 1.11

Reporter’s Explanation of Changes from the November Report

COMMENTARY:

[4] and[5] These changes clarify that a lawyer who moves from one government agency to another (within the same government) does not necessarily represent two separate clients and that law external to these Rules governs the question whether two government agencies should be regarded as the same or different clients for conflict of interest purposes.

RULE 1.13: ORGANIZATION AS CLIENT

COMMENTARY:

[6] The duty defined in this Rule applies to governmental organizations. However, when the client is a governmental organization, a different balance may be appropriate between maintaining confidentiality and assuring that the wrongful official act is prevented or rectified, for public business is involved. In addition, duties of lawyers employed by the government or lawyers in military service may be defined by statutes and regulation. Therefore, d D efining precisely the identity of the client and prescribing the resulting obligations of such lawyers may be more difficult in the government context and is a matter beyond the scope of these Rules. See Scope [18]. Although in some circumstances the client may be a specific agency, it is generally may also be a branch of government, such as the executive branch, or the government as a whole. For example, if the action or failure to act involves the head of a bureau, either the department of which the bureau is a part or the relevant branch of government as a whole may be the client for purpose purposes of this Rule. Moreover, in a matter involving the conduct of government officials, a government lawyer may have authority under applicable law to question such conduct more extensively than that of a lawyer for a private organization in similar circumstances. Thus, when the client is a governmental organization, a different balance may be appropriate between maintaining confidentiality and assuring that the wrongful act is prevented or rectified, for public business is involved. In addition, duties of lawyers employed by the government or lawyers in military service may be defined by statutes and regulation. This Rule does not limit that authority. See note on Scope.

Model Rule 1.13

Reporter’s Explanation of Changes from the November Report

COMMENTARY:

[6] These changes are intended to clarify what is meant by the second sentence to the current comment.

RULE 1.15: SAFEKEEPING PROPERTY

TEXT:

(b) A lawyer may deposit the lawyer's own funds in a client trust account for the limited sole purpose of minimizing paying bank service charges on that account, but only in an amount necessary for that purpose.

(c) A lawyer shall deposit into a client trust account legal fees and expenses that have been paid in advance, to be withdrawn by the lawyer only as fees are earned or expenses incurred.

COMMENTARY:

[2] While normally it is impermissible to commingle the lawyer's own funds with client funds, paragraph (b) provides that it is permissible when necessary to minimize pay bank service charges on that account. Accurate records must be kept regarding which part of the funds are the lawyer's.

Model Rule 1.15

Reporter’s Explanation of Changes from the November Report

TEXT:

1. Paragraph (b): clarification of provision regarding bank service charges

The Commission has modified this language to clarify the limited intent of this exception to the normal prohibition to commingling personal funds with client funds.

2. New paragraph (c): advance payment of fees and expenses

This new paragraph provides needed practical guidance to lawyers on how to handle advance deposits of fees and expenses. The Commission is responding to reports that the single largest class of claims made to client protection funds is for the taking of unearned fees.

COMMENTARY:

[2] These changes were made to conform the comment to the changes in paragraph (b) of the text.

RULE 1.16: DECLINING OR TERMINATING REPRESENTATION

TEXT:

(d) Upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect a client's interests, such as giving reasonable notice to the client, allowing time for employment of other counsel, surrendering papers and property to which the client is entitled and refunding any advance payment of fee or expense that has not been earned or incurred . The lawyer may retain papers relating to the client to the extent permitted by other law.

Model Rule 1.16

Reporter’s Explanation of Changes from the November Report

TEXT

1. Paragraph (d): add reference to return of unearned fees and unexpended advanced expenses

This change corresponds to the change in Rule 1.15, which requires lawyers to segregate advanced fees and expenses in a client trust account.

RULE 3.1: MERITORIOUS CLAIMS AND CONTENTIONS

TEXT:

A lawyer shall not bring or defend a proceeding, or assert or controvert an issue therein, unless there is a basis in law and fact for doing so that is not frivolous, which includes may include a good faith nonfrivolous argument for an extension, modification or reversal of existing law. A lawyer for the defendant in a criminal proceeding, or the respondent in a proceeding that could result in incarceration, may nevertheless so defend the proceeding as to require that every element of the case be established.

COMMENTARY:

[2] The filing of an action or defense or similar action taken for a client is not frivolous merely because the facts have not first been fully substantiated or because the lawyer expects to develop vital evidence only by discovery. What is required of lawyers, however, is that they inform themselves about the facts of their clients' cases and the applicable law and determine that they can make nonfrivolous good faith arguments in support of their clients' positions. Such action is not frivolous even though the lawyer believes that the client's position ultimately will not prevail. The action is frivolous, however, if the client desires to have the action taken primarily for the purpose of harassing or maliciously injuring a person, or, if the lawyer is unable either to make a good faith nonfrivolous argument on the merits of the action taken or to support the action taken by a good faith nonfrivolous argument for an extension, modification or reversal of existing law.

[3] Although this Rule does not preclude a lawyer for a defendant in a criminal matter from defending the proceeding so as to require that every element of the case be established, the defense attorney must not file frivolous motions.

[3] [4] The lawyer's obligations under this Rule are subordinate to federal or state constitutional law that entitles a defendant in a criminal matter to the assistance of counsel in presenting an appeal a claim that otherwise would be prohibited by this Rule.

Model Rule 3.1

Reporter’s Explanation of Changes from the November Report

TEXT:

1. Replace "nonfrivolous" with "good faith."

The purpose of the change is to retain the current Model Rule's subjective standard for judging the propriety of an argument for an extension, modification or reversal of existing law. The Commission concurred with concerns voiced by commentators about the possible chilling effect of an objective standard when applied to motions and appeals on behalf of criminal defendants. The Commission also concluded that a good faith standard was more appropriate for purposes of professional discipline. Finally, current Rule 3.1 has been widely adopted by the states and has been incorporated into '110 of the American Law Institute's Restatement of the Law Governing Lawyers.

COMMENTARY:

[2] With the exception of the one new sentence and the deletion of the reference to the client's desires, this Comment is now the same as Model Rule Comment [2] and conforms to the changes in the rule text. The reference to client desires was deleted on the ground that lawyer discipline ought not be based on subjective client motivations.

[3]The Commission concluded that is not necessary to call special attention to the applicability of Rule 3.1 to criminal practice.

[3] The Commission replaced the reference to "an appeal" with a broader reference to

"a claim" because the constitutional right to assistance of counsel is not limited to appeals.

RULE 3.2: EXPEDITING LITIGATION

COMMENTARY:

[1] Dilatory practices bring the administration of justice into disrepute. Although there will be occasions when a lawyer may properly seek a postponement for personal reasons, it is not proper for a lawyer to routinely fail to expedite litigation solely for the convenience of the advocates. Delay should not be indulged merely for the convenience of the advocates, or Nor will a failure to expedite be reasonable if done for the purpose of frustrating an opposing party's attempt to obtain rightful redress or repose. It is not a justification that similar conduct is often tolerated by the bench and bar. The question is whether a competent lawyer acting in good faith would regard the course of action as having some substantial purpose other than delay. Realizing financial or other benefit from otherwise improper delay in litigation is not a legitimate interest of the client.

Model Rule 3.2

Reporter’s Explanation of Changes from the November Report

COMMENTARY:

[1] The Commission concluded that the reference in the second sentence to indulging delay "merely for the convenience of the advocates" is too restrictive and modified it to recognize that there are circumstances where it is acceptable for a lawyer to request a postponement for personal reasons.

RULE 3.8: SPECIAL RESPONSIBILITIES OF A PROSECUTOR

COMMENTARY:

[3] As a minister of justice and not simply an advocate, the prosecutor has the obligation to see that both guilt and punishment are decided on the basis of sufficient evidence, including consideration of exculpatory and mitigating evidence known to the prosecution. This obligation goes beyond the duty imposed upon prosecutors by constitutional law. Evidence tending to negate the guilt of the accused includes evidence that [materially] tends to impeach a government witness. The exception in paragraph (d) recognizes that a prosecutor may seek an appropriate protective order from the tribunal if disclosure of information to the defense could result in substantial harm to an individual or to the public interest.

Model Rule 3.8

Reporter’s Explanation of Changes from the November Report

COMMENTARY:

[3] In light of questions raised regarding the relationship between this Rule and the prosecutor's constitutional obligations under Brady and its progeny, the Commission decided that the new material was not helpful. Rather than attempt to explain that relationship, which may change in light of constitutional developments, the Commission opted to return to the language of the current Comment.

RULE 4.2: COMMUNICATION WITH PERSON REPRESENTED BY COUNSEL

COMMENTARY:

[3] Communications authorized by law may include communications by a lawyer on behalf of a client who is exercising a constitutional or other legal right to communicate with a governmental official the government . For example, the constitutional right to petition and the public policy of ensuring a citizen’sright of access to government decisionmakers, may permit a lawyer representing a private party in a controversy with the government to communicate about the matter with government officials who have authority to take or recommend action in the matter. [2] [4] Communications authorized by law may also include constitutionally permissible investigative activities of lawyers representing governmental entities, directly or through investigative agents, prior to the commencement of criminal or civil enforcement proceedings , when there is applicable judicial precedent that either has found the activity permissible under this Rule or has found this Rule inapplicable. However, the Rule imposes ethical restrictions that go beyond those imposed by constitutional provisions. When communicating with a represented criminal defendant the accused in a criminal matter , a government lawyer must comply with this Rule in addition to honoring the defendant’s constitutional rights of the accused. The fact that a communication does not violate a state or federal constitutional right is insufficient to establish that the communication is permissible under this Rule.

Model Rule 4.2

Reporter’s Explanation of Changes from the November Report

COMMENTARY:

[3] The Commission deleted all parts of this comment that suggested a substantive view of what "authorized by law" might mean in the context of communications with government officials, on grounds that 1) the law is too unclear to express a view; and 2) the view expressed in the November report is inconsistent with ABA Opinion 97-408 and most authorities. The Commission also combined what was left of the proposed comment on this "authorized by law" issue with the language in Comment [4] of the November report that dealt with another "authorized by law" issue (contacts by government investigators). In this way, Comment [3] addresses both of the government-related contexts in which the "authorized by law" exception is most likely to come into play. Finally, the Commission substituted the phrase "the accused in a criminal matter" for "a represented criminal defendant." This change is intended to make clear that the rule applies in a criminal matter even before charges are filed. No substantive change is intended.

RULE 5.1: RESPONSIBILITIES OF A PARTNER OR PARTNERS, MANAGERS, AND

SUPERVISORY LAWYER LAWYERS AND LAW FIRMS

TEXT:

(a) A partner in a law firm , and a lawyer who individually or together with other lawyers possesses comparable managerial authority in a law firm, and the law firm shall make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that all lawyers in the firm conform to the Rules of Professional Conduct.

COMMENTARY:

[1] Paragraphs Paragraph (a) and (b) refer applies to lawyers who have supervisory managerial authority over the professional work of a firm or legal department of a government agency. See Rule 1.0(c). This includes members of a partnership , and the shareholders in a law firm organized as a professional corporation, and members of other associations authorized to practice law ; lawyers having supervisory comparable managerial authority in a legal services organization or a the law department of an enterprise or government agency; and lawyers who have intermediate managerial responsibilities in a firm. Paragraph (b) applies to lawyers who have supervisory authority over the work of other lawyers in a firm.

[2] Paragraph (a) also applies to the law firm as an entity. See Rule 1.0(c) for the definition of a firm. For example, a law firm that has no system for identifying conflicts of interest may itself be disciplined for a violation of paragraph (a). The primary responsibility for the firm's compliance with paragraph (a), however, still resides with each partner or managing lawyer in the firm.

[2] [3] Paragraph (a) requires lawyers with managerial authority within a firm , and the firm, to make reasonable efforts to establish internal policies and procedures designed to provide reasonable assurance that all lawyers in the firm will conform to the Rules of Professional Conduct. Such policies and procedures include those designed to detect and resolve conflicts of interest, identify dates by which actions must be taken in pending matters, account for client funds and property and ensure that inexperienced lawyers are properly supervised.

[4] [5] Paragraph (c)(2) defines the duty of a partner or other lawyer having comparable managerial authority in a law firm, as well as a lawyer who has direct supervisory authority over performance of specific legal work by another lawyer. Whether a lawyer has supervisory authority in particular circumstances is a question of fact. Partners of a private firm and lawyers with comparable authority have at least indirect responsibility for all work being done by the firm, while a partner or manager in charge of a particular matter ordinarily also has direct authority over supervisory responsibility for the work of other firm lawyers engaged in the matter. Appropriate remedial action by a partner or managing lawyer would depend on the immediacy of that lawyer's partner's involvement and the seriousness of the misconduct. The A supervisor is required to intervene to prevent avoidable consequences of misconduct if the supervisor knows that the misconduct occurred. Thus, if a supervising lawyer knows that a subordinate misrepresented a matter to an opposing party in negotiation, the supervisor as well as the subordinate has a duty to correct the resulting misapprehension.

Model Rule 5.1

Reporter’s Explanation of Changes from the November Report

TEXT:

1. Caption

The caption has been modified to reflect the changes in paragraph (a).

2. Paragraph (a): Delete reference to "the law firm."

After careful consideration of thoughtful commentary pro and con, the Commission has withdrawn its recommendation that the duties imposed by Rule 5.1(a) on partners and managing attorneys in a law firm be extended to the law firm as an entity. The Commission was influenced by the following considerations: (1) the disciplinary system is premised on licensure to practice law, and only individual lawyers are licensed to practice; (2) the National Organization of Bar Counsel voiced concerns about the proposal, indicating that the change is not necessary for effective enforcement of Rule 5.1; and (3) there is substantial disagreement among lawyers as to the effect law firm responsibility will have on the partners' and managing attorneys' sense of personal responsibility for compliance with Rule 5.1.

COMMENTARY:

[1] Added references to "members of other associations authorized to practice law" and to "lawyers having comparable authority in a legal service organization" to conform the Comment to the definitions of a "law firm" and "partner" in Rule 1.0. Replaced "supervisory authority" in the third sentence with "comparable managerial authority" to conform the Comment to the rule text.

[2] Deleted to conform to change in the rule text.

[2] Modified to delete the reference to a law firm in conformity with the change in the rule text

[5] Modified to clarify that paragraph (c) applies to partners, lawyers with comparable managerial authority, and supervising lawyers.

RULE 5.3: RESPONSIBILITIES REGARDING NONLAWYER ASSISTANTS

TEXT:

(a) a partner , and a lawyer who individually or together with other lawyers possesses comparable managerial authority in a law firm, and the law firm shall make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that the person's conduct is compatible with the professional obligations of the lawyer;

COMMENTARY:

[2] Paragraph (a) requires lawyers with managerial authority within a law firm , and the firm itself, to make reasonable efforts to establish internal policies and procedures designed to provide reasonable assurance that nonlawyers in the firm will act in a way compatible with the Rules of Professional Conduct. See Comment s [1] and [2] to Rule 5.1. Paragraphs (b) and (c) impose personal responsibility on lawyers who have supervisory authority over the performance of nonlawyers in the firm. Paragraph (b ) applies to lawyers who have supervisory authority over the work of a nonlawyer. Paragraph (c) specifies the circumstances in which a lawyer is responsible for conduct of a nonlawyer that would be a violation of the Rules of Professional Conduct if engaged in by a lawyer.

Model Rule 5.3

Reporter’s Explanation of Changes from the November Report

TEXT:

1. Paragraph (a): Delete reference to "the law firm."

As with Rule 5.1, the Commission has withdrawn its recommendation that the duties imposed by Rule 5.1(a) on partners and managing attorneys in a law firm be extended to the law firm as an entity. The Commission was influenced by the following considerations: (1) the disciplinary system is premised on licensure to practice law, and only individual lawyers are licensed to practice; (2) the National Organization of Bar Counsel voiced concerns about the proposal, indicating that the change is not necessary for effective enforcement of Rule 5.1; and (3) there is substantial disagreement among lawyers as to the effect law firm responsibility will have on the partners' and managing attorneys' sense of personal responsibility for compliance with Rule 5.1.

COMMENTARY:

[2] Modified to more accurately describe paragraphs (b) and (c).

RULE 5.4: PROFESSIONAL INDEPENDENCE OF A LAWYER

TEXT:

(d)(2) a nonlawyer is a corporate director or officer thereof or occupies a position of similar responsibility in any form of association other than a corporation ; or

Model Rule 5.4

Reporter’s Explanation of Changes from the November Report

TEXT:

1. Paragraph (d)(2): Broaden to include nonlawyers who occupy positions with responsibilities similar to those of corporate directors or officers.

The current rule is too limited because it employs terminology peculiar to corporate law, and lawyers are now practicing in professional limited liability companies.

RULE 5.5: UNAUTHORIZED PRACTICE OF LAW

TEXT:

(i) a lawyer who is an employee of a client acts on the client's behalf or, in connection with the client's matters, on behalf of the client's other employees or its commonly owned organizational affiliates;

(iii) the lawyer is associated in a particular the matter with a lawyer admitted to practice in this jurisdiction who actively participates in the representation.

COMMENTARY:

[1] A lawyer may regularly practice law only in a jurisdiction in which the lawyer is admitted to practice. The practice of law in violation of lawyer-licensing standards of another jurisdiction constitutes a violation of these Rules. This Rule does not restrict the ability of lawyers authorized by federal statute or other federal law to represent the interests of the United States or other persons in any jurisdiction.

[2] There are occasions in which lawyers admitted to practice in another jurisdiction, but not in this jurisdiction, will engage in conduct in this jurisdiction under circumstances that do not create significant risk to the interests of their clients, the courts or the public. Paragraph (b) identifies four situations in which the lawyer may engage in such conduct without fear of violating this Rule. This Rule does not address the question of whether other conduct constitutes the unauthorized practice of law. The fact that conduct is not included or described in this Rule is not intended to imply that such conduct is the unauthorized practice of law. With the exception of paragraph (b)(2)(i), nothing in this Rule is intended to authorize a lawyer to establish an office or other permanent presence in this jurisdiction without being admitted to practice here.

[3] Lawyers not admitted to practice generally in the jurisdiction may be authorized by law or order of a tribunal or an administrative agency to appear before a the tribunal or agency. Such authority may be granted pursuant to formal rules governing admission pro hac vice or pursuant to informal practice of the tribunal or agency. Under paragraph (b)(1), a lawyer does not violate this Rule when the lawyer appears before such a tribunal or agency. Nor does a lawyer violate this Rule when the lawyer engages in conduct in anticipation of a proceeding or hearing, such as factual investigations and discovery conducted in connection with a litigation or administrative proceeding, in which an out-of-state lawyer has been admitted or in which the lawyer reasonably expects to be admitted. Nothing in paragraph (b)(1) is intended to authorize a lawyer not licensed in this jurisdiction to solicit clients in this jurisdiction.

[5] Paragraph (b)(2)(ii) recognizes that the complexity of many matters requires that a lawyer whose representation of a client consists primarily of practice conduct in a jurisdiction in which the lawyer is admitted to practice, also be permitted to act on the client's behalf in other jurisdictions in matters arising out of or otherwise reasonably related to the lawyer's representation of the client. This conduct may involve negotiations with private parties, as well as negotiations with government officers or employees, and participation in alternative dispute-resolution procedures. This provision also applies when a lawyer is conducting witness interviews or other activities in this jurisdiction in preparation for a litigation or other proceeding that will occur in another jurisdiction where the lawyer is either admitted generally or expects to be admitted pro hac vice.

[6] Paragraph (b)(2)(iii) recognizes that association with a lawyer licensed to practice in this jurisdiction is likely to protect the interests of both clients and the public. The lawyer admitted to practice in this jurisdiction, however, may not serve merely as a conduit for an out-of-state lawyer but must actively participate in and share actual responsibility for the representation of the client. If the admitted lawyer's involvement is merely pro forma, then both lawyers are subject to discipline under this Rule.

Model Rule 5.5

Reporter’s Explanation of Changes from the November Report

TEXT:

1. Paragraph (b)(2)(i): delete "other employees"

The Commission agrees that in-house counsel should not be authorized to represent individual employees, given that employees will not typically have been in the same position as the employer to understand and evaluate the significance of the fact that in-house counsel has not been admitted to practice generally within the jurisdiction.

2. Paragraph (b)(2)(iii): delete "particular"

The Commission agreed that the reference to "matter" should be the same in (b)(2)(ii) and (b)(2)(iii).

3. Paragraph (b)(2)(iii): add participation

The Commission agreed to add language to more clearly indicate that merely passive "association" with a locally admitted lawyer would not be sufficient for this safe harbor.

COMMENTARY:

[1] The Commission added a new reference to federal law that supercedes the applicability of state law on unauthorized practice.

[2] Two new sentences have been added to this Comment. The first sentence emphasizes that the Commission does not intend any negative implication by its failure to include other inter-jurisdictional conduct by a non-admitted lawyer. The second added sentence makes explicit what is otherwise implicit in the Rule, i.e., that with the exception of the safe harbor for in-house counsel, none of the safe harbors is intended to authorize the permanent presence of the lawyer in the jurisdiction.

[3] This new sentence clarifies that some agencies may not have formal rules of pro hac vice admission but may nevertheless have an informal practice of permitting out-of-state lawyers to appear before them.

[5] This change is stylistic. No change in substance is intended.

[6] These changes are made to conform to the changes in the text of paragraph (b)(2)(iii).

RULE 5.6 RESTRICTIONS ON RIGHT TO PRACTICE

TEXT:

(a) a partnership , shareholders, operating, or employment, or other similar type of agreement that restricts the right of a lawyer to practice after termination of the relationship, except an agreement concerning benefits upon retirement;

Model Rule 5.6

Reporter’s Explanation of Changes from the November Report

TEXT:

1. Paragraph (a): Add references to shareholders, operating and other similar types of agreements.

The reference to a partnership agreement is under-inclusive because lawyers also practice in professional corporations and professional limited liability companies.

RULE 7.2: ADVERTISING

TEXT:

(b)(2) pay the usual charges of a not-for-profit lawyer referral service or legal service organization plan 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; and

COMMENTARY:

[6] [5] A lawyer is allowed to pay for advertising and advertising-related expenses permitted by this Rule and for the purchase of a law practice in accordance with the provisions of Rule 1.17, but otherwise is Lawyers are not permitted to pay another person others for channeling professional work. Paragraph (b)(1), however, allows a lawyer to pay for advertising and communications permitted by this Rule, including the costs of print directory listings, on-line directory listings, newspaper ads, television and radio air time, domain-name registrations, sponsorship fees, banner ads, and group advertising. 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 , a group legal-services plan 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. A lawyer may compensate employees, agents and vendors who are engaged to provide marketing or client-development services, such as publicists, public-relations personnel, business-development staff and website designers. A lawyer may pay for the costs of directory listings, newspaper ads, television and radio airtime, domain-name registrations, banner ads and similar expenses. See Rule 5.3 for the duties of lawyers and law firms with respect to the conduct of non-lawyers who prepare marketing materials for them.

[6] A lawyer may pay the usual charges of a legal service organization plan or a not-for-profit or qualified legal referral service. A legal service organization plan is a prepaid or group legal service plan or a similar organization plan that assists prospective clients to secure legal representation. A lawyer referral service, on the other hand is any organization that holds itself out to the public as a lawyer referral service. Such referral services are understood by laypersons to be consumer-oriented organizations that provide unbiased referrals to attorneys with appropriate experience in the subject matter of the representation and afford other client protections, such as complaint procedures or malpractice insurance requirements. Consequently, this Rule only permits a lawyer to pay the usual charges of a not-for-profit or qualified lawyer referral service. A qualified lawyer referral service is one that is approved by an appropriate regulatory authority as affording adequate protections for prospective clients. See e.g. American Bar Association's Model Supreme Court Rules Governing Lawyer Referral Services and Model Lawyer Referral and Information Service Quality Assurance Act (requiring that organizations that are identified as lawyer referral services (i) permit the participation of all lawyers who are licensed and eligible to practice in the jurisdiction and who meet reasonable objective eligibility requirements as may be established by the referral service for the protection of prospective clients; (ii ) require each participating lawyer to carry reasonably adequate malpractice insurance; (iii) act reasonably to assess client satisfaction and address client complaints; and (iv) do not refer prospective clients to lawyers who own, operate or are employed by the referral service.)

[7] A L lawyer s who accept s assignments or referrals from a legal service organizations plan and or referrals from a lawyer referral service s must act reasonably to assure that the organization's conduct is the activities of the plan or service are compatible with the lawyer's professional obligations. See Rule 5.3. Legal service organizations plans and lawyer referral services may communicate with prospective clients, but such communication must be in conformity with these Rules. Thus, advertising must not be false or misleading, as would be the case if the communications of a group advertising program or a group legal services plan would mislead prospective clients to think that it the program was a lawyer referral service sponsored by a state agency or bar association. Nor could the lawyer allow the organization to make in-person, telephonic, or real-time contacts that would violate Rule 7.3.

Rule 7.2

Reporter’s Explanation of Changes from the November Report

At the time it published its Final Draft, the Commission had deferred consideration of a proposal from the ABA Commission on Responsibility in Client Development to revise Rule 7.2(b)(2) to permit lawyers to pay the usual charges of for-profit lawyer referral services so that the Commission could receive recommendations from the ABA Standing Committee on Lawyer Referral and Information Service and the ABA Standing Committee on Group and Prepaid Legal Services. The changes in paragraph (b)(2), the modification of Comment [5], and the addition of Comments [6] and Comment [7] represent the effort of Commission to find the right balance between the need to protect the expectations of prospective clients who contact lawyer referral services and the need to allow lawyers some flexibility to pay the usual charges of other programs that may be developed to expand consumer access to needed legal services.

TEXT:

1. Paragraph (b): Replace reference to "legal service organization" with "legal service plan."

This change in terminology is intended to avoid confusion between a "legal services organization" that provides direct legal services to clients and is included in Rule 1.0(c)'s definition of a law firm and prepaid and group legal service plans, and other similar plans, whose usual charges are excepted from Rule 7.2(b)'s prohibition against a lawyer giving anything of value to a person for recommending the lawyer's services.

2. Paragraph (b): Modify to permit lawyers to pay the usual charges of a for-profit lawyer referral service that has been approved by an appropriate state authority, in addition to the changes of a not-for-profit lawyer referral service.

This change is intended to more closely conform the Model Rules to ABA policy with respect to lawyer referral services. It recognizes the need to protect prospective clients who have come to think of lawyer referral services as consumer-oriented organizations that provide unbiased referrals to attorneys with appropriate experience in the subject matter of the representation and afford other client protections, such as complaint procedures or malpractice insurance requirements. The effect of the proposal is to permit lawyers to pay the usual charges of a for-profit lawyer referral service, but only if it has been approved by an appropriate regulatory authority as affording adequate protections for prospective clients, preferably in conformity with the four core standards prescribed in the American Bar Association's Model Supreme Court Rules Governing Lawyer Referral Services and Model Lawyer Referral and Information Service Quality Assurance Act. Because the need for special regulation arises from the prevailing public perception of lawyer referral services, this special regulatory regime is only applicable to a for-profit organization that holds itself out to the public as a lawyer referral service. See Comment [6].

COMMENTARY:

[5] The discussion of advertising expenses has been modified to more accurately reflect the current state of client-development activities in law firms. To this has been added a cross-reference to Rule 5.3 as a reminder of the partner's and firm's obligations with respect to the conduct of nonlawyers involved in client development activities.

[6] In response to a concern about the ambiguity of the reference in paragraph (b)(2) to "a legal service organization," this new Comment defines a legal service plan to specifically include prepaid and group legal service plans, and also to include "other similar plans that assist prospective clients to secure legal representation." This clarifies that lawyers may pay the usual charges of not only traditional prepaid and group legal service plans, but also the usual charges of new hybrid plans that might undertake to provide a variety of services to prospective clients. Also by its definition of a lawyer referral service as an organization that holds itself out to the public as a lawyer referral service, the Comment precludes extension of the special regulatory regime governing lawyer referral services to prepaid or group legal service plans and other similar legal service plans. Finally the Comment articulates ABA policy with respect to the core characteristics of a qualified lawyer referral service.

[7] This new Comment alerts lawyers who accept assignments or referrals from legal service plans or referrals from lawyer referral services that they must act reasonably to assure that the activities of the plan or service are compatible with the lawyers' professional obligations.

RULE 7.5: FIRM NAMES AND LETTERHEADS

COMMENTARY:

[2] With regard to paragraph (d), lawyers sharing office facilities, but who are not in fact partners associated with each other in a law firm , may not denominate themselves as, for example, "Smith and Jones," for that title suggests partnership in the practice of law that they are practicing law together in a firm.

Model Rule 7.5

Reporter’s Explanation of Changes from the November Report

COMMENTARY:

[2] The reference to partnership in the current Comment is underinclusive because lawyers also practice in professional corporations and professional limited liability companies.

RULE 8.3: REPORTING PROFESSIONAL MISCONDUCT

TEXT:

(c) This Rule does not require disclosure of information otherwise protected by Rule 1.6or information gained by a lawyer or judge while serving as a member of participating in an approved lawyers assistance program . to the extent that such information would be confidential if it were communicated subject to the attorney-client privilege related to the representation of a client.

COMMENTARY:

[5] Information about a lawyer's or judge's misconduct or fitness may be received by a lawyer in the course of that lawyer's participation in an approved lawyers or judges assistance program. In that circumstance, providing for an exception to the reporting requirements of paragraphs (a) and (b) of this Rule the confidentiality of such information encourages lawyers and judges to seek treatment through such a program. Conversely, without such an exception, confidentiality, lawyers and judges may hesitate to seek assistance from these programs, which may then result in additional harm to their professional careers and additional injury to the welfare of clients and the public. The Rule therefore exempts the lawyer from the reporting requirements of provides that a lawyer may not report pursuant to paragraphs (a) and (b) with respect to information that would be privileged protected by Rule 1.6 if the relationship between the impaired lawyer or judge and the recipient of the information were that of a client and a lawyer. On the other hand, a lawyer who receives such information would nevertheless be required to comply with the Rule 8.3 reporting provisions to report misconduct if the impaired lawyer or judge indicates an intent to engage in illegal activity, for example, the conversion of client funds to his or her use. These Rules do not otherwise address the confidentiality of information received by a lawyer or judge participating in an approved lawyers assistance program; such an obligation, however, may be imposed by the rules of the program or other law.

Model Rule 8.3

Reporter’s Explanation of Changes from the November Report

TEXT:

1. Paragraph (c): change "serving as a member of" to "participating"

This change expands the reporting exception to any lawyer or judge who participates in an approved lawyers assistance program, even if such participation is limited to a single instance.

2. Paragraph (c): Modify reference to information gained in lawyers assistance program.

The Commission determined that the attempt to qualify or specify the conditions on which information gained by a lawyer or judge while participating in an approved lawyer's assistance program is unnecessary and confusing. This modification makes it clear that this Rule does not require the reporting of information obtained during such participation.

COMMENTARY:

[5] These changes clarify that paragraph (c) of this Rule does not generally address the confidentiality obligations of a lawyer or judge who participates in a lawyers assistance program, but merely creates an exception to the reporting obligation under paragraphs (a) and (b). Whether an obligation of confidentiality is incurred depends on the rules of the particular program as well as law external to these Rules.

RULE 8.4: MISCONDUCT

COMMENTARY:

[1] Lawyers are subject to discipline when they violate or attempt to violate the Rules of Professional Conduct, knowingly assist or induce another to do so or do so through the acts of another, as when they request or instruct an agent to do so on the lawyer's behalf. Paragraph (a), however, does not prohibit a lawyer from advising a client concerning of what action that the client is lawfully entitled to take.

Model Rule 8.4

Reporter’s Explanation of Changes from the November Report

COMMENTARY:

[1] This change is intended to clarify that the lawyer may not appoint the client as an agent of the lawyer in an attempt to accomplish indirectly what the lawyer is not permitted to do directly.

RULE 8.5: DISCIPLINARY AUTHORITY; CHOICE OF LAW

COMMENTARY:

[6] [7] The choice of law provision is not intended to apply to applies to lawyers engaged in transnational practice , unless international law, treaties or other agreements between competent regulatory authorities in the affected jurisdictions provide otherwise. Choice of law in this context should be the subject of agreements between jurisdictions or of appropriate international law.

Model Rule 8.5

Reporter’s Explanation of Changes from the November Report

COMMENTARY:

[7] This comment was modified to provide transnational practitioners with more certainty when acting in different countries, whether on a transient or more permanent basis.

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