Final Report - Summary Of Recommendations
Margaret Colgate Love
The American Bar Association Commission on Evaluation of the Rules of Professional Conduct (the "Ethics 2000" Commission) was established in the spring of 1997 to undertake a comprehensive study and evaluation of the ABA Model Rules of Professional Conduct in light of developments in the law and in the legal profession since the Rules’ adoption in 1983. Experience had revealed substantive shortcomings in some rules and lack of clarity in others, and the need to reconcile text and commentary in a number of cases. Moreover, while 38 states and the District of Columbia had by then adopted some version of the Model Rules, there were significant variations in particular rules from jurisdiction to jurisdiction. (Since 1997, three additional states have adopted some version of the Model Rules.) The desirability of a complete review of the rules to promote national uniformity and consistency was underscored by the extensive and innovative interpretive work of The American Law Institute’s Restatement of the Law Governing Lawyers (the "Restatement"), then nearing completion.
In the four years since its establishment, the Commission has met frequently, held public hearings, and circulated public discussion drafts of all of its proposed rule changes, as well as several proposed new rules. It has opened its meetings to the public, engaged in regular communication with its 250-member advisory council, reached out to special interest groups, and posted its discussion drafts and meeting minutes on the Internet. It has received hundreds of comments, which have resulted in numerous responsive modifications in its proposals. After publishing a report with a complete set of recommended rules changes in November 2000, the Commission received additional comments and met with numerous interested entities. Its final report was filed in May 2001, and reflects a number of changes made in response to comments received. The Commission expects debate in the ABA House of Delegates to begin in August 2001.
At the outset, the Commission determined that it should take a relatively "minimalist" approach to its task, retaining the basic format and approach of the Model Rules, and generally clarifying and refining rather than making major changes in particular rules. Its presumptive operating principle was to make no change unless substantively necessary – although as time went along, it found more and more that fell into this category. In the end, the Commission decided to propose a number of significant substantive changes to the existing rules, as well as several entirely new rules. It has also proposed numerous editorial and stylistic changes in the interest of clarification, and amplification to commentary to provide additional guidance in interpreting and applying the rules. It decided early on not to include aspirational "good practice" notes following each rule, concerned that these would be out of place in a disciplinary code.
In approaching its work, the Commission was influenced by the legal profession’s rapidly changing internal and external environment, particularly the expanded scope and complexity of client activities, heightened public scrutiny of lawyers’ involvement in those activities, the impact of technology and globalization, and new competitive pressures on law firms (including specialization, multidisciplinary practice and increased use of in-house counsel). These developments have in turn drawn into question traditional jurisdictional limits on the practice of law, the allocation of authority between lawyer and client, ethical restrictions on lawyer mobility and on fee-sharing (with other lawyers and with nonlawyers), the special status of government lawyers under the rules, and the parameters of such time-honored concepts as confidentiality, civility, and conflict of interest. They have raised anew the vexing issue of whether a lawyer’s obligation to perform pro bono service should be enforced through the disciplinary process, and a new issue of law firm responsibility for the conduct of its constituent lawyers. The Commission decided that it was important to address these emerging trends, as well as situations in which state versions of particular rules vary widely, in light of the ABA’s historical role in developing consensus on ethical standards for the profession. It appreciates, and has often incorporated, the contributions of state experimentation in its effort to produce rules that will commend themselves to uniform adoption.
Summarized below are some of the more significant rule revisions the Commission has proposed in its report to the ABA House of Delegates. Any changes to the rules will not become effective until adopted by the House, and they will not be binding on lawyers unless and until they are adopted by the states. Some changes that the Commission has decided not to recommend are also of interest.
Preamble and Scope
1. Preamble: Language has been added to the Preamble to emphasize a lawyer’s duty to ensure access to the legal system for those who cannot afford or secure adequate legal counsel, and to further the public’s understanding of and confidence in the rule of law and the justice system. A new paragraph notes that certain rules may apply to lawyers serving in a nonrepresentational capacity, such as a third party neutral, or to practicing lawyers even when they are acting in a nonprofessional capacity
Scope: The Commission proposes to modify the provisions of the Scope section that discuss the effect of a rule violation on a lawyer’s substantive legal duty (renumbered paragraph ), in recognition of the weight of judicial opinion in malpractice litigation that a violation of the rules may be admissible as evidence of a breach of the duty of care. The paragraph will now explain that violation of a rule should not "itself" give rise to a cause of action against the lawyer or "necessarily" warrant disqualification or any other non-disciplinary remedy. However, violation of a rule "may be evidence of a breach of the applicable standard of conduct."
2. Terminology: The terminology section that was previously part of the Preamble/Scope section of the Rules has been elevated to rule status, as Rule 1.0 ("Terminology"). Several new definitions have been proposed ("informed consent," "screening," "tribunal," "writing" and "confirmed in writing"), and several definitions in the current terminology section have been revised.
a. " Informed Consent": The Commission proposes to make clear a lawyer’s obligations in connection with obtaining client consent (e.g., to conflicts of interest, to limitations on scope of representation, to business transactions with clients), by replacing the concept of "consent after consultation" with the somewhat more familiar concept of "informed consent." As defined, "informed consent" denotes agreement "after the lawyer has communicated adequate information and explanation about the material risks of and reasonably available alternatives to the proposed course of conduct." The Commission also proposes to require that client consent be confirmed in writing in many cases, notably in connection with conflict waivers. Ordinarily the writing need not be signed by the client. See subsection (f) below, and section 7, infra.
New commentary explains how one determines the adequacy of communication about risks and alternatives necessary to make consent properly "informed." In this regard, it may be relevant that the person from whom consent must be obtained is already aware of the relevant facts and their implications, though by not communicating with the client personally the lawyer assumes the risk that the client is inadequately informed and that the consent will therefore be invalid. It is relevant whether the client is "experienced in legal matters and in making decisions of the type involved" in assessing whether the lawyer has complied with her obligations under the rule. Moreover, informed consent may generally be inferred where a client or other person has been independently represented by other counsel in giving the consent.
b. " Firm": The proposed revised definition now specifies several different forms of private association. The commentary (imported from Rule 1.10 on "Imputation of Conflicts" and revised) explains that a "firm" may include lawyers sharing office space, depending on such facts as how the lawyers present themselves to the public, the terms of any formal agreement between them, and whether they have mutual access to information concerning the clients they serve. It also notes that "there is ordinarily no question" that members of the law department of an organization, including the government, constitute a firm – although there may sometimes be uncertainty as to the identity of the client or clients. Whether the lawyers should be treated as associated with each other can depend on the particular rule that is involved, and on the facts of the situation.
c. " Fraud": The Commission proposes to make clear that the term fraud denotes conduct that is fraudulent under applicable substantive or procedural law, as long as it has a "purpose to deceive." New commentary explains that "under the proposed new definition of fraud, it is not necessary that anyone have suffered damages or relied upon a misrepresentation or failure to inform." (The Commission considered and ultimately rejected a broader definition of fraud that would potentially have included negligent misrepresentation or failure to inform. The effect of this broader definition of fraud would have been to expand the category of situations in which a lawyer was permitted or obliged to disclose client wrongdoing.)
d. " Screened": A new definition will explain the general elements of an adequate screen, for purposes of Rules 1.10, 1.11, 1.12, and 1.18. These include the "timely" imposition of procedures designed to "isolate" the personally disqualified lawyer so as to protect confidential information in the lawyer’s possession. New commentary further details the requirements of an acceptable screen.
e. " Tribunal": The proposed new definition of a "tribunal" includes a court, an arbitrator in a binding arbitration proceeding, or "a legislative body, administrative agency, or other body acting in an adjudicative capacity." An entity acts in "an adjudicative capacity" if it "will render a binding legal judgment affecting a party’s interests in a particular matter." Ordinarily an administrative agency in a rule-making proceeding is not a "tribunal."
f. " Writing" and " Confirmed in Writing": The proposed new definition of "writing" includes both tangible and electronic records. When a person’s informed consent is required to be "confirmed in writing," it is sufficient if "the lawyer promptly transmits to the person [a writing] confirming an oral informed consent." In other words, the requirement of written consent can in most situations be satisfied by a letter from the lawyer to the client that need not be signed by the client. 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. There are only three rules that require a client actually to sign a consent: Rule 1.5(c) on contingent fees, Rule 1.8(a) on business transactions with clients, and Rule 1.8(g) on aggregate settlements. See sections 5 and 12, infra.
Obligations to Clients
3. Scope of Representation: The Commission discussed at length the allocation of decision-making authority between lawyer and client under paragraph (a) of Rule 1.2 (now "Scope of Representation," retitled "Scope of Representation and Allocation of Authority Between Lawyer and Client"). The Commission was concerned that the current formulation sends conflicting signals: on the one hand it might be read to require consultation with the client before the lawyer takes any action; and on the other it suggests that the lawyer is not obliged to abide by the client’s decisions with respect to the "means" (as opposed to the "objectives") of the representation. After considering and rejecting a number of alternative formulations, the Commission decided to add a new sentence to clarify that "a lawyer may take such action on behalf of the client as is impliedly authorized to carry out the representation," and to leave the resolution of disagreements with clients about means to be worked out within a framework defined by the law of agency, the right of the client to discharge the lawyer, and the right of the lawyer to withdraw from the representation if the lawyer has a fundamental disagreement with the client. To emphasize the lawyer’s obligation to consult, a cross reference to Rule 1.4 ("Communication") will be added to the text.
Limitations on the scope of representation under paragraph (c) will be made subject to a reasonableness requirement, in addition to the current requirement of client consent.
Assisting Client Crime or Fraud: Paragraph (d) of Rule 1.2 prohibits a lawyer from "assisting" the client in conduct the lawyer knows is criminal or fraudulent. This provision raises important unsettled questions about the relationship between a lawyer’s obligation to third parties when she learns that her services have been or are being used to further client crime or fraud, and her obligation of confidentiality to her client under Rule 1.6 ("Confidentiality of Information"). The commentary has been amplified to explain a lawyer’s obligations where she has inadvertently been assisting an ongoing client fraud or crime: if withdrawal alone is insufficient to disassociate the lawyer from the client wrongdoing, it may be necessary for the lawyer to give notice of the withdrawal and disaffirm her work product. "In extreme cases, substantive law may require a lawyer to disclose information relating to the representation that would otherwise be protected by Rule 1.6." The lawyer’s obligation to disclose information to avoid assisting client crime or fraud is addressed specifically in connection with paragraph (b) of Rule 4.1 ("Truthfulness in Statements to Others"), which is now more clearly described as a "specific application" of the general duty set forth in Rule 1.2(d). See section 22, infra.
4. Communication with Client - The text of Rule 1.4 ("Communication") will be expanded to identify more specifically various aspects of the lawyer's duty to keep the client "reasonably informed" about the status of a matter, and to consolidate all discussion of the duty to communicate in this Rule rather than having some parts stated in Rule 1.2. The comment will make clear that a lawyer who has blanket settlement authority does not have to advise the client of every offer.
5. Fees: The Commission proposes to amend paragraph (a) of Rule 1.5 ("Fees") to make charging an excessive fee a disciplinable offense, as it was under the Model Code. In addition, paragraph (a) will now require that costs and disbursements, as well as fees, be "reasonable under the circumstances." The Commission initially proposed to include the "degree of risk assumed by the lawyer" as a factor to be considered in determining the reasonableness of a fee, as a substitute for current paragraph (a)(8), but in the end decided against it. The Commission rejected a proposal to add "the relative sophistication of the lawyer and the client" to this list. The Commission added a new comment explaining that the enumerated factors are applied as relevant in the circumstances. As to expenses, the commentary now explains that a lawyer may seek reimbursement for in-house costs and services, such as copying and telephone charges, either by charging "a reasonable amount to which the client has agreed in advance," or by charging "an amount that reasonably reflects the cost incurred."
For the first time, the rule text will provide that a lawyer must give the client written notice of the basis or rate of the fee she intends to charge. Under paragraph (b) as revised, the lawyer must communicate this information before or shortly after commencing the representation, except where she will charge a regularly represented client at the same rate. A new client must also now be informed in writing of the scope of representation, and of his responsibility for expenses. Changes in the basis or rate of the fee must also be communicated in writing. A provision requiring the lawyer to communicate changes in the scope of representation in writing was rejected by the Commission, on grounds that this would be impracticable and inefficient in many cases. The Commission also decided to add a de minimis exception to the writing requirement, suggesting the sum of $500 as a measure. The commentary points out that a fee paid in property may be regarded as a "business transaction" that is subject to the detailed requirements of Rule 1.8(a). See section 12, infra.
Paragraph (c) requires the lawyer to obtain the client’s signed agreement to a fee arrangement where the fee is contingent. New commentary makes clear that a contingent fee, like any other fee, is subject to the rule’s reasonableness standard. Language in existing commentary requiring a lawyer to offer a client an alternative to a contingent fee in certain circumstances will be deleted. The Commission is proposing to retain the bar on contingent fees in domestic relations matters involving divorce or child custody (including actions to change the terms of the original divorce or custody decree), but new commentary will propose that this bar not extend to post-divorce actions to collect arrearages.
Rule 1.5(e) will now require a client’s agreement to a division of the fee in all cases, including those in which the division is in proportion to the services performed. The client must also agree to the share each lawyer will receive, and this agreement must be confirmed in writing – though the agreement need not be signed by the client, as the Commission had initially proposed. Commentary will emphasize, through a cross-reference to Rule 1.1, that the referring lawyer has an obligation to refer the matter to a competent lawyer. In its initial report the Commission proposed to permit division of fees without requiring either division of work or "joint responsibility" for the representation, but ultimately decided to retain the restriction of the existing rule.
6. Confidentiality: While recommending no change in the broad concept of "information relating to the representation" under Rule 1.6 ("Confidentiality of Information"), the Commission is proposing a substantial expansion of the grounds for discretionary disclosure. Under existing Rule 1.6, a lawyer may reveal client information only if impliedly authorized to do so, to defend herself against criminal or disciplinary charges or in a fee controversy with the client, or "to prevent the client from committing a crime that is likely to result in imminent death or substantial bodily harm." The Commission’s proposed changes to paragraph (b) will revise and expand the grounds for permissive disclosure, in line with the Restatement and the recommendations of a number of scholars, substantially reverting to the original proposals of the Kutak Commission.
As proposed to be amended, Rule 1.6 will permit disclosure "to the extent the lawyer reasonably believes necessary" to prevent "reasonably certain death or substantial bodily harm"; to prevent the client from committing a crime or fraud reasonably certain to result in substantial financial injury, if it involves the lawyer’s services; and to prevent, mitigate or rectify the consequences of a client’s financial fraud or crime in furtherance of which the lawyer’s services were used. In addition to the existing "implied authorization" and "self-defense" exceptions to confidentiality, another new provision will explicitly permit the lawyer to disclose confidences to obtain legal advice about her compliance with the Rules. Note that new commentary to Rule 1.6 directs that "a disclosure adverse to the client’s interest should be no greater than the lawyer reasonably believes necessary to accomplish the purpose."
Finally, the Commission decided that disclosure should in no case be mandatory under Rule 1.6, even where disclosure is required by another rule or by a law or court order. At the same time, however, Rule 1.6 should not forbid disclosure in such situations. Thus a final new section of paragraph (b) permits but does not require the lawyer to disclose information where she is otherwise obliged to do. As a result, Rule 1.6 does not add an ethical dimension (and the possibility of discipline) to whatever legal disclosure obligation the lawyer may otherwise have. New commentary will deal with a lawyer’s duty to raise non-frivolous challenges to disclosure requirements external to the Rules, including disclosures required by order of a court or other tribunal. Other rules that may require disclosure are discussed in sections 21 and 22, infra. See also section 3, supra.
7. Conflict of Interest - Current Clients: The Commission completely reorganized Rule 1.7 (retitled "Conflict of Interest: Current Client"), and substantially revised the commentary, in an effort to clarify the rule’s provisions on concurrent conflicts. However, the basic provisions of Rule 1.7 remain substantively unchanged. Paragraph (a) will now define what constitutes a conflict of interest, and distinguish conflicts in which a lawyer may be "directly adverse" to a client, from those in which his representation of the client may be "materially limited." Paragraph (b) will provide that a lawyer may undertake a representation involving a conflict only with the "informed consent" of each affected client. The Commission will propose that client consent to a conflict be valid only if confirmed in writing (though the writing need not be signed by the client). (The terms "informed consent" and "written consent" are defined in Rule 1.0, discussed in section 2, supra.) The Commission was persuaded that the requirement of a writing has proved workable in California’s diverse bar, and that it protects both clients and lawyers. New commentary explains that "the writing is required in order to impress upon clients the seriousness of the decision the client is being asked to make and to resolve disputes or ambiguities that might later occur. . . ."
As noted, Rule 1.7(a) distinguishes two basic types of concurrent conflicts. A "directly adverse" conflict under paragraph (a)(1) is defined in commentary as one in which the lawyer takes a position on behalf of one client against another client, in the same or an unrelated matter. A directly adverse conflict might also arise if a lawyer were required to cross-examine her own client. A directly adverse conflict may arise in a transactional setting as well as in litigation, as where a lawyer represents a buyer against a seller who is a client in an unrelated matter.
Even where there is no direct adverseness, a conflict may exist under paragraph (a)(2) if there is a "significant risk" that a lawyer’s ability to carry out an appropriate course of action for the client would be "materially limited as a result of the lawyer’s other responsibilities or interests." Material limitation conflicts always require an examination of the facts, and may derive from the lawyer’s responsibilities to another client or to a former client, or from the lawyer’s own interests or duties to a third person. Commentary will explain that simultaneous representation in unrelated matters of clients whose interests are only economically adverse does not constitute a "directly adverse" conflict, although it may constitute a "material limitation" conflict, depending upon the facts. Similarly, a "positional conflict," in which a lawyer takes inconsistent legal positions in different tribunals on behalf of different clients, may in some circumstances constitute a "material limitation" conflict.
The specific prohibition now contained in Rule 1.8(i) that bars a lawyer from representing a client when a close family member is on the other side of a matter will be deleted from that rule, and new commentary to Rule 1.7 will explain that such a representation will ordinarily constitute a conflict under Rule 1.7(a)(2). However, as a personal interest conflict, it will ordinarily not be imputed to other members of a firm under the Commission’s proposed changes to Rule 1.10. See section 9, infra. Thus, for example, a husband and wife may not appear on opposite sides of a case; however, a member of the husband’s firm may participate in a matter in which the wife is opposing counsel. Exceptions to this general rule could arise where one or both of the firms involved is very small, so that the financial interest of both spouses in the matter is substantial.
Paragraph (b) defines three circumstances under which a lawyer may not even ask for consent, i.e. where a conflict is deemed nonconsentable: 1) a lawyer may not represent multiple clients even in a transactional setting, if the lawyer does not "reasonably believe" that she can "provide competent and diligent representation to each affected client;" 2) consent will be ineffective to permit representations "prohibited by law;" and 3) a lawyer or lawyers from the same firm are prohibited from representing clients asserting claims against one another in the same litigation or other proceeding before a tribunal, even where both clients are willing to consent. New commentary provides additional guidance on nonconsentability in a transactional setting, as well as on common representation generally ( see infra). For example, the commentary points out that, in determining whether multiple client representations are nonconsentable, "one factor to be considered is whether the representation will be provided by a single lawyer or by different lawyers in the same firm."
New commentary will also discuss how a lawyer should respond to "unforeseen developments" giving rise to a conflict in the course of a representation, such as changes in corporate and other organizational affiliation, or the addition or realignment of parties in litigation, and whether the lawyer may continue to represent any of the clients in the circumstances. A lawyer’s obligation to withdraw where a conflict arises after a representation has begun will be reviewed in several contexts, including common representations. Where more than one client is involved, the question is whether a lawyer must terminate both representations, and whether client consent is sufficient to permit the lawyer to continue any participation in the matter.
The Commission discussed at length the issue of prospective consent to conflicts. A new comment to Rule 1.7 will explain that a lawyer may ask a client to consent to conflicts that may arise in the future, but the efficacy of such advance consents will depend upon the extent to which the client reasonably understands the material risks involved. For this reason, a general open-ended consent will ordinarily not be effective. Where a client is "an experienced user of the legal services involved" and is "reasonably informed that a conflict may arise," advance consent is "more likely to be effective," especially when the client is independently represented in connection with giving prospective consent. Other new comments deal with such controversial and unsettled conflicts issues as corporate family conflicts, positional conflicts, and class action conflicts. Conflicts of interest that may arise between an organization and its constituents, including constituents who purport to speak or act for the organization, are more specifically addressed by Rule 1.13 ("Organization as Client"), in whose provisions the Commission has proposed no substantive change. See section 13, infra.
Rule 2.2 ("Intermediary") has been deleted entirely: the Commission was concerned that this rule has been the source of some confusion insofar as it suggests that a lawyer representing multiple clients as "intermediary" is not fully subject to Rule 1.7. The issues raised by common representations are now discussed in a series of new comments to Rule 1.7. These new comments discuss the circumstances under which a lawyer may undertake a common representation in the first place if it appears that the clients’ interests potentially conflict; the effect of common representations on client-lawyer confidentiality and the attorney-client privilege; limits on the scope of representation and advocacy in this context; and the lawyer’s options if a conflict unexpectedly arises in the course of the representation and cannot be resolved (the lawyer "ordinarily . . . will be forced to withdraw from representing all of the clients if the common representation fails"). A new rule on third party neutrals is also being proposed. ( See section 18 infra.)
8. Conflict of Interest – Former Clients: No substantive change is being recommended in the text of Rule 1.9 (now "Conflict of Interest: Former Client", retitled "Duties to Former Clients"), but the commentary has been substantially modified to focus on the lawyer’s continuing duty of confidentiality to former clients. An entirely new comment explains when matters will be deemed "substantially related" for purposes of the rule: "if they involve the same 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." The commentary explains in some detail when information acquired in a prior representation will be disqualifying: "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." Moreover, in the case of an organizational client, "general knowledge of the client’s policies and practices ordinarily will not preclude a subsequent representation." Finally, the passage of time may render information obsolete, a circumstance that may also be relevant to whether two matters are substantially related.
Another addition to commentary makes clear that a lawyer who has represented multiple clients in a matter may not subsequently represent one client against the others in the same or a substantially related matter, without the consent of all affected clients.
9. Imputation of Conflicts: As under the current Rules, conflicts arising under Rules 1.7 and 1.9 are imputed to all lawyers associated in a "firm" under Rule 1.10 (now "Imputed Disqualification: General Rule," retitled "Imputation of Conflicts"). The commentary to Rule 1.0 ("Terminology") explains that a "firm" may include lawyers sharing office space without adequate measures to protect confidential information. ( See section 2, supra.) The Commission considered but ultimately decided against recommending a change in the scienter provisions of Rule 1.10, to impute one lawyer’s conflicts to others in his firm who know "or reasonably should know" of the conflict. (The scienter provisions of rules dealing with imputation of conflicts in specific situations, listed in the following paragraph, have been brought into conformity with the subjective knowledge standard in current Rule 1.10.)
As amended, the text of Rule 1.10(a) would exempt from imputation "personal interest conflicts" that do not present a "significant risk of materially limiting the representation of the client by the remaining lawyers in the firm." Thus, for example, the personal disqualification of a lawyer who has a financial interest in an opposing party, or who is personally related to or negotiating for employment with opposing counsel, would ordinarily not be imputed to other lawyers in the firm. New Comment  to Rule 1.10 states that the conflicts of nonlawyer firm personnel such as paralegals, and conflicts of a lawyer resulting from prior work as a nonlawyer (including as a law student), are not imputed to others in the firm, though such persons "ordinarily must be screened" from any personal participation in the matter. Similarly, under Rule 1.11 the conflicts of current government lawyers are not imputed to others in their agency, though "ordinarily it will be prudent" to screen them. See section 10, infra.
The Commission also decided to recommend screening without client consent in the case of lawyers moving between firms. (The Commission initially proposed to permit screening in all situations except when a moving lawyer has had a substantial role in a pending litigation matter, but ultimately decided that there was no reason to treat litigation differently than transactions. It recognized that this is a factor that may be considered in disqualification motions by courts concerned with the appearance of impropriety.) A new paragraph (c) of Rule 1.10 will allow the moving lawyer to be "timely" screened to enable lawyers in her new firm to continue to handle the matter. The personally disqualified lawyer may receive no part of the fee from the representation, and affected clients must be notified. The Commission was persuaded that non-consensual screening in these cases adequately balances the interests of the former client in confidentiality of information, the interests of current clients in hiring the counsel of their choice (including a law firm that may have represented the client in similar matters for many years), and the interests of lawyers in mobility, particularly when they are moving involuntarily because their former law firms have downsized, dissolved or drifted into bankruptcy. The Commission understands that there have been few significant complaints regarding screening of laterals in the seven jurisdictions whose rules currently permit it. It has proposed additional commentary for Rule 1.7 addressing the conflict that arises when a lawyer negotiates for employment with an adversary while a case is pending. See Rule 1.7, Comment .
The elements of an effective screen are set forth in a new provision of the terminology rule, Rule 1.0 ( see section 2, supra). Other specific situations in which non-consensual screening will be permitted involve former government lawyers, judges and third party neutrals ( see Rules 1.11(b) and 1.12(a), discussed in sections 10 and 17, infra), lawyers who interview prospective clients ( see new Rule 1.18, discussed in section 11, infra), and lawyers who perform "short-term limited legal services" pursuant to new Rule 6.5 ( see section 19, infra).
10. Conflict of Interest – Government Lawyers: The Commission wrestled with the subject of the conflict of interest obligations of former and current government lawyers, and in particular whether and to what extent Rule 1.9 should apply to former government lawyers. It concluded that the substantive provisions of Rule 1.9 should apply where a current or former government lawyer would oppose a former client in a matter that is the same as or substantially related to one the lawyer participated in while in government. It also affirmed that additional obligations should be imposed on a current or former government lawyer in situations where the lawyer is not adverse to a former client, "to prevent a lawyer from exploiting public office for the advantage of another client." All of these ethical obligations have been consolidated in an expanded Rule 1.11 (now "Successive Government and Private Employment," retitled "Special Conflicts of Interest for Former and Current Government Officers and Employees"), thus combining in a single rule the lawyer’s duties when opposing a former client, and the special obligations of a government employee not to abuse the power of public office. Rule 1.11 will also make clear that lawyers employed by the government are subject to Rule 1.7.
As to former government lawyers, they will be barred from representing another client (either a private client or another public entity) only in matters involving a specific party or parties, thus excluding most rule-making and policy-making matters from the scope of the rule. However, a former government lawyer has a general obligation of confidentiality to her former government client under Rules 1.6 and 1.9(c). (Whether movement from one government agency to another triggers application of the rule depends upon whether the two public entities should be regarded as the same client. The question of the identity of the government client is addressed in a comment to Rule 1.13. See section 13, infra.) The prohibition in existing Rule 1.11(b) against using "confidential government information" about a person acquired during government service against that person will be retained.
As to current government lawyers, the text of Rule 1.11(d) will now make clear that they are fully subject to Rule 1.7 respecting concurrent conflicts, and to Rule 1.9 respecting their obligations to former private clients. In addition, they will be barred from any participation on behalf of the government in a matter where they formerly represented another client, regardless of the former client’s wishes, unless the government consents.
Rule 1.10 on imputation will remain inapplicable to former and current government lawyers (see proposed new 1.10(e)). As under current Rule 1.11, lawyers associated with a former government lawyer may not undertake a representation from which that lawyer is personally disqualified unless she is screened and apportioned no part of the fee resulting therefrom. The black letter of Rule 1.11(b) will now provide that screening must be implemented in a timely manner, and that all affected parties must be notified. The requirements of an effective screening arrangement will be discussed in the Terminology section, see section 2 supra. The commentary provides that the conflicts of current government lawyers are not imputed to other associated government officers or employees, "although ordinarily it will be prudent to screen such lawyers."
11. Prospective Clients: Under a new Rule 1.18, a lawyer will have the same duty of confidentiality to a person who discusses with her the possibility of forming a client-lawyer relationship, as she does to clients. In addition, a lawyer will not be permitted, without consent, to represent any clients against such a prospective client in the matter about which she was consulted (or one substantially related to it), if she received information from the prospective client that could be "significantly harmful" to him in the matter. Other lawyers in the firm will be permitted to undertake such a representation, however, as long as the personally disqualified lawyer is screened from any participation in the matter and apportioned no part of the fee. Reference is made to the new definition of "screening" in Rule 1.0. (Note that this somewhat less rigorous treatment of the lawyer’s conflict of interest obligations to prospective clients is based substantially on § 27 of the Restatement.)
12. Transactions with Clients: The Commission proposes to reformulate and clarify some of the provisions of Rule 1.8 ("Conflict of Interest: Prohibited Transactions"), notably paragraph (a) regulating a lawyer’s business transactions with clients. As amended, this provision will require the lawyer to advise the client in writing of the desirability of seeking independent legal counsel on the transaction, and to obtain the client’s informed consent to the essential terms of the transaction and the lawyer’s role in it, including whether the lawyer is representing the client’s interests in the transaction. In contrast to the requirement of written consent elsewhere in the Rules, a writing under Rule 1.8(a) must be signed by the client. New commentary explains the risks associated with a lawyer’s dual role as legal adviser and participant in a transaction, pointing out that in some cases the conflict may be such that Rule 1.7 would preclude the lawyer from even seeking the client’s consent to the transaction.
The Commission initially proposed to amend the text of Rule 1.8(f) to require client consent not just to third party payment, as under the current rule, but also to third party "direction." The Commission subsequently decided against making this change, out of a concern that it might be understood to condone third party direction without regard to the potential for interference with the lawyer’s exercise of independent professional judgment on behalf of the client. See Rule 5.4 ("Professional Independence of a Lawyer"), section 31, infra.
The Commission deleted the "unless permitted by law" qualification on advance waiver of malpractice liability in paragraph (h)(1), so that an advance waiver will be permitted if the client is independently represented in giving it whether or not there is a provision of "law" affirmatively permitting it.
As previously noted in the discussion of Rule 1.7, see section 7 supra, the Commission proposes to delete paragraph (i) of this rule, which now specifically prohibits persons closely related by blood or marriage from appearing on opposite sides of a matter. These issues will now be discussed in the commentary to Rule 1.7 as a particular form of "personal interest" conflict prohibited under paragraph (a)(2) of that rule. The Commission believes that there is no longer a need for a special rule to avoid imputation of conflicts arising from close family relationships, because personal interest conflicts will ordinarily no longer be imputed under Rule 1.10. See section 9 supra.
The Commission proposes to add a new paragraph (j) to Rule 1.8 to prohibit "sexual relations" between a lawyer and a client, unless a consensual sexual relationship existed at the time the client-lawyer relationship commenced. New commentary provides that a lawyer for an organization (whether inside counsel or outside counsel) may not have a sexual relationship with a constituent of the organization who supervises, directs, or regularly consults with that lawyer concerning the organization’s legal matters.
Another new paragraph (k) will extend all of the prohibitions in Rule 1.8 to lawyers associated in a firm, except for the new prohibition on sexual relations with a client. (While sexual relations with a client will generally also give rise to a "personal interest" conflict under Rule 1.7, such conflicts are ordinarily not imputed to associated lawyers under the proposed amendments to Rule 1.10(a). See section 9, supra.) The commentary notes that one lawyer in a firm may not enter into a business transaction with a client of another member of the firm without complying with the requirements of paragraph (a), even if the first lawyer is not personally involved in the representation of the client.
New commentary to Rule 1.8 will deal with such controversial issues as a lawyer’s use of information relating to the representation to the client’s disadvantage, appointment of a lawyer as executor of the client’s estate, a lawyer’s subsidization of lawsuits or administrative proceedings brought on behalf of a client, aggregate settlements, and prospective limitation of malpractice liability.
13. Organization as Client: The Commission decided against including a specific provision in Rule 1.13 ("Organization as Client") permitting the lawyer to disclose wrongdoing by organizational constituents in the interests of the organization, on the theory that the proposed amendments to Rule 1.6 will be adequate to allow such disclosures. It amended the text to clarify the point at which the lawyer must explain her role when dealing with organizational constituents whose interests are or may be adverse to the organization. The commentary dealing with the applicability of Rule 1.13 in the government context will be revised to incorporate a functional test for determining the identity of the government lawyer’s client. It will also include language making clear that any special duty a government lawyer may have to prevent or rectify wrongful official action derives not from the rules of legal ethics but from external law.
14. Clients With Diminished Capacity: The Commission is proposing a number of amendments to Rule 1.14 (now "Client Under a Disability," retitled "Client With Diminished Capacity") further explicating a lawyer’s duties to a client whose capacity to make decisions concerning the representation is diminished by reason of minority or mental disability, or for some other reason. The term "diminished capacity" will be substituted for "disability" throughout the rule. Where the lawyer believes that a client with diminished capacity is at risk of physical, financial or other harm unless action is taken, the lawyer may take necessary protective action (including appointment of a guardian), and in such circumstances may be impliedly authorized under Rule 1.6 to reveal information relating to the representation to protect the client’s interests. New commentary discusses the lawyer’s relationship with the client’s family members, and provides guidance for the lawyer in taking protective measures short of seeking a guardian. The Commission decided against including a requirement that a lawyer advocate the least restrictive action on behalf of the client.
15. Withdrawal from Representation: The Commission proposes to clarify and make minor revisions in the grounds for permissive withdrawal in Rule 1.16 ("Declining or Terminating Representation"). The text will be restructured to make clear that a lawyer may withdraw for any reason if withdrawal can be accomplished "without material adverse effect on the interests of the client." Where there would be such an adverse effect, paragraph (b)(4) will permit withdrawal only where the lawyer has a "fundamental disagreement" with the client’s objectives or intended action, not simply where she considers them "imprudent." The Commission thus proposes to limit the lawyer’s ability to threaten withdrawal whenever she disagrees with the client over the course of the representation, since this detracts from the client’s ability to direct the representation.
The Commission initially proposed that a lawyer should be permitted to withdraw on grounds of "unreasonable financial burden" only if the financial burden was "unforeseeable" at the outset of the representation. Subsequently it decided not to include an explicit foreseeability requirement, on the ground that this would unduly restrict a lawyer’s ability to withdraw. There may be circumstances in which the lawyer should be permitted to withdraw even where the financial burden could have been foreseen, and this factor is relevant in any event in determining whether the financial burden on the lawyer should be considered "unreasonable." Finally, lawyers will be reminded of the requirement of obtaining court approval for withdrawal in certain circumstances. Additional issues affecting withdrawal where a conflict arises midway through a representation are addressed in new commentary to Rule 1.7, see section 7, supra; and withdrawal as a remedial measure in cases where the lawyer’s services have been or are being used in connection with client crime or fraud is addressed in the commentary to Rules 1.2(d), 3.3, and 4.1. See section 3, supra, and sections 21 and 22, infra.
The commentary will now point out that "[o]rdinarily, a representation in a matter is completed when the agreed-upon assistance has been concluded," citing Rules 1.2(c), 1.3 comment , and 6.5. The lawyer is not required to give notice of withdrawal or termination to the client, though the commentary points out that "[a] lawyer must comply with applicable law requiring notice to or permission of a tribunal when terminating a representation."
16. Client Property: The Commission proposes to add a new provision to Rule 1.15 ("Safekeeping Property") requiring a lawyer to deposit into a client trust account fees and expenses that have been paid in advance, to be withdrawn by the lawyer only as fees are earned or expenses incurred. The Commission is responding to reports that the largest class of claims made to client protection funds is for the taking of unearned fees.
17. Sale of Law Practice: The Commission agreed to revise paragraph (b) of Rule 1.17 ("Sale of Law Practice") to allow the sale of a law practice to more than one buyer, but rejected a proposal to allow the sale of only a portion of a practice. It proposes to make clear that existing agreements between the seller and firm clients as to fees and scope of representation must be honored by the purchaser, by deleting qualifying language in paragraph (d) permitting fees increases with client consent. The deleted language had been interpreted to permit the buyer to tell the seller’s clients that the buyer would not work on their cases unless they agreed to pay a higher fee than they had agreed to pay the seller. The Commission was persuaded that this result was problematical because the seller could not unilaterally abrogate the fee agreement as a matter of contract law. The proposed change in paragraph (d) is in accord with the rules in a number of jurisdictions, including California, New York, and Florida.
18. Third-Party Neutrals: The Commission is proposing a new rule on lawyers serving as third-party neutrals in ADR settings. This new Rule 2.4 ("Lawyer Serving as Third-Party Neutral") will require lawyers serving as neutrals to make clear the nature of their role in the matter to the parties. The Commission decided after consultation with various ADR groups not to attempt further to define the obligations of lawyers serving as third-party neutrals through lawyer ethics rules. For example, the Commission considered and rejected provisions that would have prohibited a neutral from giving legal advice to the parties, and one that would have prohibited a neutral from assisting the parties in drafting a settlement document.
The Commission is also proposing amendments to Rule 1.12 (now "Former Judge or Arbitrator," retitled "Former Judge, Arbitrator, Mediator or Other Third-Party Neutral") to extend the conflict of interest provisions of paragraph (a) to all third-party neutrals. This means that former mediators, like former judges and arbitrators, may not represent a client in any matter in which they participated personally and substantially while a mediator, but others in their firm may do so if the former mediator is screened. The Commission initially proposed to extend a broader conflict of interest rule to all third-party neutrals, and disallow screening for lawyers associated with them, but decided against this in light of comments received that this would tend to discourage arbitration and mediation practice by lawyers in firms, including participation in voluntary court-sponsored ADR programs. The Commission was persuaded that third-party neutrals typically do not share confidential information with other lawyers, and are usually precluded from doing so by applicable rules. Mediators as well as arbitrators and judges will now be barred by paragraph (b) from negotiating for employment with a party to the proceeding, or with a party’s lawyer.
19. Limited Legal Service Programs: A new Rule 6.5 ("Non-Profit and Court-Annexed Limited Legal Service Programs") will address the ethical obligations of lawyers providing "short-term limited legal services" to persons of limited means under the auspices of a non-profit or court-annexed legal services program (such as "legal advice hotlines, advice-only clinics, or pro se counseling programs"). In these programs a client-lawyer relationship is established, but the lawyer is subject to Rules 1.7 and 1.9(a) "only if the lawyer knows that the representation of the client involves a conflict of interest." The commentary points out that a lawyer representing a client in the circumstances addressed by the rule "ordinarily is not able to check systematically for conflicts of interest," and therefore may "rely on his personal recollection and information provided by the client in the ordinary course of the consultation." The more relaxed treatment of conflicts of interest in the limited circumstances described in this rule was designed with an eye to the situation of part-time law firm volunteers fulfilling their pro bono obligations, but the Commission decided to make the benefits of the rule available to full-time legal service lawyers. If the representation becomes more extensive, the ordinary conflict of interest rules will apply.
A lawyer providing short-term limited legal services will be disqualified from any matter that he knows is being (or has been) handled by other lawyers in his firm. However, under paragraph (b) of the new rule, the personal disqualification of a lawyer engaged in a limited representation pursuant to the Rule will not be imputed to other lawyers associated with him, either in his firm or in the program itself.
Obligations to Persons Other Than Clients
20. Meritorious Claims and Contentions: After considering several possible changes in Rule 3.1 ("Meritorious Claims and Contentions"), the Commission decided to retain the current rule. The Commission initially proposed to substitute an objective standard ("non-frivolous") for judging the legitimacy of an argument for an extension, modification or reversal of existing law. While Rule 11 of the Federal Rules of Civil Procedure now refers to "non-frivolous arguments," the "good faith" formulation has been widely adopted by the states and endorsed in Section 170 of the Restatement of the Law Governing Lawyers, and the Commission believes it has not been misunderstood. The Commission deleted from commentary the reference to a client’s desire to bring an action "primarily for the purpose of harassing or maliciously injuring a person."
21. Candor to the Tribunal: The Commission proposes to clarify and amplify a lawyer’s obligation of candor to a tribunal under Rule 3.3 ("Candor Toward the Tribunal"). (The term "tribunal" is defined in new Rule 1.0 to include a court, an arbitrator in a binding arbitration proceeding, and a legislative or administrative body acting in an adjudicative capacity. See section 2, supra.) First, the Commission proposes to delete the requirement of materiality that now qualifies a lawyer’s obligation in 3.3(a)(1) not to make a false or misleading statement of fact or law to a tribunal. This change will bring the duty not to make false statements into conformity with the duty not to offer false evidence to be set forth in 3.3(a)(3). The Commission also proposes to add a new sentence to (a)(1) addressing the lawyer’s duty to correct a false statement of "material" fact or law previously made to the tribunal. The requirement of materiality in connection with the duty to correct in (a)(1) will parallel the duty in paragraph (a)(3) to take reasonable remedial measures if the lawyer comes to know that she has previously offered material false evidence.
Respecting the truthfulness of evidence offered by the lawyer’s client or a witness called by the lawyer, the text of (a)(3) will more clearly distinguish the situation where the lawyer "knows" the evidence is false or misleading from the situation where he only "reasonably believes" this to be the case. Where the lawyer knows the evidence is false, the lawyer is prohibited from offering the evidence. In addition, where the lawyer subsequently learns that "material" evidence offered by a client or a witness is false or misleading, she must take remedial steps, "including, if necessary, disclosure to the tribunal." As under the current rule, the duty to take remedial measures applies "even if compliance requires disclosure of information otherwise protected by Rule 1.6." See paragraph (c), formerly paragraph (b). The Commission discussed and rejected a suggestion that the lawyer’s obligation not to offer false evidence, and to correct evidence that she subsequently learns is false, depends upon whether the evidence was deliberately falsified. Thus the lawyer’s duty does not depend upon whether the client or other witness knows or otherwise appreciates that the evidence is false. New commentary will explain that a lawyer does not violate the Rule if the lawyer knowingly elicits false testimony for the purpose of subsequently establishing its falsity.
On the other hand, where the lawyer does not "know" but only "reasonably believes" the evidence to be false, she has discretion whether or not to offer it. The lawyer would be under no disclosure obligation if her doubts arose after the evidence had been offered. The commentary provides that doubts about the veracity of testimony or other evidence should be resolved in favor of the client, though the lawyer "cannot ignore an obvious falsehood."
The special obligations of a criminal defense lawyer under this rule are addressed in the rule text for the first time: the lawyer’s discretion under paragraph (a)(3) to refuse to offer evidence she reasonably believes is false does not extend to the testimony of a criminal defendant. Consistent with the special protections historically accorded criminal defendants, the text of paragraph (a)(3) will now specifically provide that a lawyer representing a criminal accused may not refuse to allow her client to testify even if the lawyer reasonably believes the testimony will be false. The commentary also emphasizes, however, that a lawyer representing a criminal defendant is generally subject to the duty in the first two sentences of paragraph (a)(3) not to offer testimony that the lawyer knows is false, and to take remedial measures where the lawyer subsequently comes to know that testimony the lawyer previously offered is false. Finally, the commentary makes clear that where a court requires defense counsel to allow the accused to testify if he wishes to do so, the obligation of the advocate under the Rules is subordinate to such a requirement.
The Commission proposes to delete paragraph (a)(2) of the present rule, and to address the lawyer’s duty to disclose crime or fraud in connection with an adjudicative proceeding more generally in a new paragraph (b). (The lawyer’s general duty to disclose when necessary to avoid assisting client crime or fraud is addressed in Rules 1.2(d) and 4.1(b). See section 3, supra, and section 22, infra.) The new paragraph (b) provides that a lawyer who knows that any person, including the lawyer’s client, intends to engage, is engaging or has engaged in criminal or fraudulent conduct related to the proceeding, shall take reasonable remedial measures, including, if necessary, disclosure to the tribunal. A new comment identifies the type of conduct sought to be reached under the rule: "bribing, intimidating or otherwise unlawfully communicating with a witness, juror, court official, or other participant in the proceeding, unlawfully destroying or concealing documents or other evidence or failing to disclose information to the tribunal when required by law to do so."
New commentary describes remedial measures short of disclosure, including remonstrating with the client, consulting with the client about the lawyer’s duty of candor to the tribunal, and withdrawal from the representation. It also makes clear that the lawyer’s obligation of candor applies "in an ancillary proceeding conducted pursuant to the tribunal’s adjudicative authority, such as a deposition." Respecting the duration of the obligation, the commentary explains that a proceeding has concluded within the meaning of Rule 3.3 when a final judgment has been affirmed on appeal or the time for review has passed.
22. Truthfulness in Statements to Others: The Commission proposes no change in the text of Rule 4.1 ("Truthfulness in Statements to Others"), but will clarify the duty imposed by paragraph (b) (a lawyer may not knowingly "fail to disclose a material fact when disclosure is necessary to avoid assisting a criminal or fraudulent act by a client, unless disclosure would be prohibited by Rule 1.6"). This duty is a specific application of the general duty set forth in Rule 1.2(d), see section 3 supra, and is most frequently invoked where a client’s wrong-doing involves a lie or misrepresentation to a third party. New commentary explains the relationship between the lawyer’s duty to third parties under Rules 1.2(d) and 4.1(b), and the lawyer’s duty of confidentiality to the client under Rule 1.6. Even though Rule 1.6 would, if amended as the Commission is proposing, permit disclosure in a wider variety of circumstances involving client crime or fraud ( see section 6, supra), disclosure is still conceived as a measure reserved for the extreme case where other remedial measures (such as withdrawal and/or disavowal of work product) are insufficient to disassociate the lawyer from the client’s wrongful conduct. If a lawyer can avoid assisting client crime or fraud only by disclosing information relating to the representation, then the lawyer is required by paragraph (b) to do so, unless the disclosure is prohibited by Rule 1.6. (Note that a lawyer’s obligation of candor to a tribunal under Rule 3.3 ("Candor Toward the Tribunal") is not qualified by the obligation of confidentiality in Rule 1.6. See section 21, supra.)
The Commission proposes to clarify in commentary that the term "misrepresentation" in paragraph (a) of the rule includes "partially true but misleading statements or omissions that are tantamount to an affirmative false statement."
23. Trial Publicity: The Commission initially proposed to amend comment  to Rule 3.6 ("Trial Publicity") to delete from the list of statements deemed "more likely than not to have a material prejudicial effect" on a proceeding, the fact that a defendant has been charged with a crime, unless it is accompanied by a statement explaining that the defendant is presumed innocent until proven guilty. After receiving a number of critical comments, the Commission reconsidered this proposal and now proposes to leave the comment unchanged. The special responsibilities of a prosecutor in connection with trial publicity, including statements of investigators assisting or associated with the prosecutor, are discussed in section 27, infra.
24. Communications with Represented Persons: The Commission spent a great deal of time and energy considering possible amendments to Rule 4.2 ("Communication with Person Represented by Counsel"), to meet concerns raised by the U.S. Department of Justice. In the end, the Commission decided to propose only one amendment to the black letter of the rule, confirming that otherwise prohibited communications may be authorized by court order. New commentary provides that a court order may be sought, either to clarify the application and scope of the rule; or, in exceptional circumstances, to authorize communication that would otherwise be prohibited by the rule.
Existing commentary is revised to explain that communications "authorized by law" may include those made by a lawyer "on behalf of a client who is exercising a constitutional or other legal right to communicate with the government." They may also include those made in the course of "investigative activities of lawyers representing governmental entities, directly or indirectly through investigative agents, prior to the commencement of criminal or civil enforcement proceedings." In this latter regard, the revised commentary attempts to clarify the relationship between Rule 4.2 and constitutional limits on government lawyers’ investigative activities: "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."
New commentary makes clear that the no-contact rule does not preclude a lawyer from advising a represented person who is seeking a second opinion, as long as the lawyer is not otherwise representing a client in the matter. It also confirms that a lawyer may not make a communication prohibited by the rule through the acts of another – though parties to a matter may communicate directly with each other. Finally, it provides that the "no-contact rule" applies even when the represented person "initiates or consents to" the communication, and that a lawyer must immediately terminate communications if she learns that the person is one with whom communication is not permitted.
Perhaps most significant, the test in existing commentary for determining the applicability of the rule in the organizational context has been modified: communication is now prohibited with "a constituent" of the organization who "supervises, directs, or regularly consults with the organization’s lawyer concerning the matter or has authority to obligate the organization with respect to the matter, or whose act or omission in the matter may be imputed to the organization for purposes of civil or criminal liability." (The Commission considered a proposal to include a specific prohibition on communications with members of a governing board, and decided instead to change the term "agent or employee" in the discussion draft to "constituent.") The Commission also deleted the problematic reference to any other person "whose statement may constitute an admission on the part of the organization," on the theory that lawyers cannot know in advance whether the information they elicit will be binding on the organization. It added a new sentence to confirm that consent of the organization’s lawyer is not required for contacts with former constituents, reflecting existing interpretation of the rule and the Commission’s judgment that there is not sufficient unity of interest between an organization and its former constituents to justify treating them as representatives of the organization. The commentary warns that a lawyer communicating with former constituents should not solicit or assist in the breach of any duty of confidentiality owed to the organization.
Finally, the commentary on the rule’s scienter requirement has been corrected to eliminate the suggestion that a lawyer’s actual knowledge can be established by proof that the lawyer had "substantial reason to believe" that a person was represented, which is inconsistent with the relevant definition in Rule 1.0.
25. Dealing with Unrepresented Persons: The Commission proposes to restore to Rule 4.3 ("Dealing with Unrepresented Person") a provision from the Model Code prohibiting a lawyer from giving legal advice to an unrepresented person whose interests "are or have a reasonable possibility of being in conflict" with those of her client, other than the advice to seek counsel. New commentary provides guidance on what constitutes impermissible advice-giving, and alludes to the particular problems that may arise when a lawyer for an organization deals with an unrepresented constituent.
26. Inadvertent disclosures: A new provision in Rule 4.4 ("Respect for Rights of Third Persons") deals with the currently controversial issue of the "errant FAX." It provides that a lawyer who receives a document, and knows or reasonably should know that it was inadvertently sent, must promptly notify the sender. Beyond this, however, the rule does not attempt to sort out a lawyer’s possible obligations under other law in connection with examining and using confidential documents that come into her possession through the inadvertence or wrongful act of another.
27. Special Responsibilities of a Prosecutor: The Commission is not proposing any substantive changes to the text of Rule 3.8 ("Special Responsibilities of a Prosecutor"). It decided, after initially proposing its deletion, to retain the requirement that prosecutors exercise "reasonable care" to prevent law enforcement personnel assisting or associated with them from making extrajudicial statements that they themselves would be prohibited from making. It is also recommending retention of a controversial limitation on the issuance of subpoenas to defense counsel, as well as a provision making the prosecutor responsible for public statements made by investigators assisting or associated with the prosecutor. However, it is recommending deletion from commentary of a reference to the disclosure obligations of a prosecutor in connection with grand jury proceedings, and decided against otherwise separately addressing the ethical issues that arise in connection with grand jury practice. The Commission also decided against attempting to explain the relationship between this Rule and the prosecutor’s constitutional obligations under Brady and its progeny.
The Commission is recommending deletion of a controversial reference in comment  suggesting that a prosecutor’s disclosure obligations in the grand jury are governed by Rule 3.3(d). In this regard, it initially proposed adoption of a new comment linking a prosecutor’s grand jury disclosure obligations to the requirement in Rule 3.8(a) that charges be supported by probable cause, but deleted this comment after the Department of Justice argued that it was inconsistent with the historical independence of the grand jury. The Commission also decided against recommending an addition to commentary relating to impeachment evidence.
28. Reporting Misconduct: The Commission is proposing to revise Rule 8.3 ("Reporting Professional Misconduct") to make clear that information revealed to a lawyer participating in a lawyer assistance program will be exempt from the reporting requirements of this rule regardless of whether the information would be considered protected by Rule 1.6. A new provision states that the rules generally do not address whether information transmitted in a lawyer assistance program is confidential, although the program itself may impose such a requirement.
29. Misconduct/Discrimination: The Commission is proposing to include a new comment to Rule 8.4 ("Misconduct") elaborating the lawyer’s responsibility under paragraph (a) not to violate the rules through the acts of another. This comment points out that while the lawyer must not "request or instruct an agent to [violate the rules] on the lawyer’s behalf," he is "not prohibited from advising a client of action that the client is lawfully entitled to take." It rejected a proposal from the Department of Justice to add a specific exception for law enforcement. Finally, it decided against adding a provision to the black letter of Rule 8.4 prohibiting discrimination, concluding that the discussion of this issue Comment  (renumbered ), is adequate to deal with the issue.
The Practice of Law
30. Law Firm Management and Discipline: The Commission recommends that the text of Rule 5.1(a) ("Responsibilities of a Partner or Supervisory Lawyer") and Rule 5.3(a) ("Responsibilities Regarding Nonlawyer Assistants") be amended to make clear that the responsibilities imposed by these provisions to ensure that other lawyers and nonlawyer assistants comply with the Rules, apply not just to "partners" in a law firm, but to all lawyers with "managerial authority" in a firm (defined in Rule 1.0 to include corporate legal departments, legal services organizations, and law offices within government agencies, see section 2, supra). The commentary to Rule 5.1 will elaborate the duty of each responsible lawyer to make "reasonable efforts" to establish internal policies and procedures designed to provide "reasonable assurance" that all lawyers in a firm will conform to the Rules, including procedures designed to detect and resolve conflicts of interest, to account for client funds, and to ensure proper supervision of inexperienced lawyers, as well as nonlawyers employed by a firm. Similar additions will be made to the commentary to Rule 5.3.
The Commission initially proposed to extend the duties in Rules 5.1 and 5.3 to law firms as well as individual lawyers. However, it became persuaded that any possible benefit from being able to extend disciplinary liability firm-wide was small when compared to the possible cost of allowing responsible partners and supervisors to escape personal accountability.
The Commission also considered and rejected a proposal to delete paragraph (b) of Rule 5.2 ("Responsibilities of a Subordinate Lawyer"), which shields a subordinate lawyer from discipline if she acts in accordance with a supervisory lawyer’s "reasonable resolution of an arguable question of professional duty." The Commission was concerned that deleting this provision might mislead junior lawyers into thinking that they were safe in "following orders" of a senior lawyer. It decided not to recommend any changes to Rule 5.6 ("Restrictions on Right to Practice").
31. Multidisciplinary Practice: The Commission decided against making significant amendments to Rules 5.4 ("Professional Independence of a Lawyer") and 5.7 ("Responsibilities Regarding Law-Related Services"), in light of the action by the ABA House of Delegates in July 2000 to refer proposals relating to fee-sharing and multidisciplinary practice to the Standing Committee on Ethics and Professional Responsibility. It considered but decided against expanding the commentary to paragraph (c) of Rule 5.4 on the issue of third party direction that may interfere with the lawyer’s professional independence. See discussion of Rule 1.8(f) in section 11, supra. It did, however, decide to add a provision to the text of Rule 5.4 specifically authorizing a lawyer to share court-awarded legal fees with a non-profit organization that employed, retained or recommended employment of the lawyer in the matter.
32. Information About Legal Services: The Commission considered a number of recommendations for relaxing the rules governing the provision of information about a lawyer’s services, and decided against most of them. It will, however, update the rules to take account of such emerging trends as targeted solicitations and Internet advertising. It proposes to reduce the text of Rule 7.1 ("Communications Concerning A Lawyer’s Services") to a simple prohibition against false or misleading communications (defined as those containing material misrepresentations or omissions), and to provide additional guidance in commentary about what sorts of statements may be deemed misleading.
In addition, after initially rejecting proposals to amend Rule 7.2 ("Advertising") to allow payments to for-profit lawyer referral services, the Commission decided to allow such payments under limited circumstances, where the particular referral service has been "approved by an appropriate regulatory authority." It also developed new commentary dealing with the obligations of a lawyer who accepts assignments or referrals from a legal service plan, or referrals from a lawyer referral service. These changes strike a balance between the need to protect consumers of legal services on the one hand, and ABA policy favoring expanded consumer access to legal services on the other.
With one exception, the Commission declined to relax the restrictions in Rule 7.3 ("Direct Contact With Prospective Clients") on in-person or live telephonic or electronic solicitations, while distinguishing real-time conversations in internet "chat rooms." Specifically, it rejected a proposal to allow in-person solicitations to businesses and non-profit or government organizations, but agreed to allow solicitations to lawyers (including in-house counsel) and to family members and close personal friends. It also declined to adopt a specific prohibition on contacts with persons in a vulnerable physical, emotional or mental state. Finally, it tightened up the requirements in Rule 7.4 (retitled "Communication of Fields of Practice and Specialization") respecting the terms on which a lawyer may advertise herself as a certified specialist.
33. Multijurisdictional Practice and Choice of Law: The Commission approved significant changes to Rule 5.5 ("Unauthorized Practice of Law") and Rule 8.5 ("Disciplinary Authority: Choice of Law") that recognize the fact that modern practice crosses jurisdictional boundaries in a variety of ways. Proposed amendments to Rule 5.5 identify four "safe harbors" for a lawyer practicing outside his licensing jurisdiction: 1) where he is preparing for a proceeding in which he expects to be admitted pro hac vice; 2) where he is acting on behalf of a client of which he is an employee; 3) where he is handling a matter that is "reasonably related" to his practice on behalf of a client in a jurisdiction where the lawyer is licensed; and 4) where he is "associated in a particular matter" with a lawyer admitted in the jurisdiction. As to the last-mentioned "safe harbor," the commentary explains that the admitted lawyer may not "serve merely as a conduit" for the out-of-state lawyer. The commentary also notes that in-house counsel must comply with relevant state practice requirements.
The commentary makes clear that the safe harbors are not intended to imply that conduct falling outside them constitutes the unauthorized practice of law. This incremental approach seems an appropriate response to the growing sentiment against blanket "unauthorized practice" restrictions on lawyers, while acknowledging the concerns of those who may have a more parochial view.
Under proposed amendments to Rule 8.5, a lawyer who "renders or offers to render any legal services" in a jurisdiction where he is not admitted will be subject to the disciplinary authority and rules (including choice of law rules) of that jurisdiction, as well as the jurisdiction where he is licensed. The Reporter’s explanation notes that there are a number of ways in which discipline might be implemented by a nonadmitting jurisdiction, including "making a disciplinary record, sending it to states in which the lawyer is admitted and having those states impose reciprocal discipline." In addition, the Commission is proposing a new approach to choice of law where conduct does not take place in connection with a matter before a tribunal, proposing that a determination should be made as to where the conduct had its predominant effect. A lawyer will not be subject to discipline if she makes a reasonable (if incorrect) determination about which jurisdiction’s rules apply to her conduct. The choice of law provisions would now apply to lawyers engaged in transnational practice, unless international law, treaties or other agreements between competent regulatory authorities in the affected jurisdictions provide otherwise.
34. Pro Bono Service: The Commission discussed at length the question whether to amend Rule 6.1 ("Voluntary Pro Bono Publico Service") to make mandatory a lawyer’s obligation to perform 50 hours of pro bono service. After seeking public comment on the issue, the Commission voted to recommend that pro bono service remain voluntary. It also considered and rejected several compromise options, including one that would leave the pro bono obligation voluntary but impose a mandatory reporting requirement. However, in order to emphasize that pro bono publico service is a time-honored ethical obligation of members of the legal profession, the Commission voted to add to the text of the rule a provision now in commentary stating that "Every lawyer has a professional responsibility to provide legal services to those unable to pay." New commentary will emphasize law firms’ responsibility to enable firm lawyers to meet their pro bono obligations.
During the debate over this rule, proponents of mandatory pro bono service focused on the difficulty many citizens have in finding a way to pay for the legal services they need, and justified mandatory pro bono service in terms of the proper functioning of the legal system. Those who favored keeping the pro bono requirement voluntary were also concerned about the provision of legal services to persons of limited means, but feared that imposing pro bono work on unwilling practitioners would foster an atmosphere of opposition and resentment that would be inconsistent with the ABA’s goal of increasing pro bono participation. They also argued that a lawyer’s pro bono efforts are demeaned by a mandatory rule, and pointed to enforcement problems. In considering whether to make pro bono mandatory, the Commission was concerned about reports that pro bono service by lawyers in large firms has declined in recent years. The Commission also noted that the need for pro bono service is greater than ever, given the withdrawal of most government support for legal service organizations, and that the current system of providing needed pro bono service on a voluntary basis does not seem to be working very effectively. In the end, however, it concluded that instituting a mandatory pro bono requirement enforceable through the disciplinary process was not an effective way of ameliorating this situation.
The Commission is grateful for the strong interest shown in its work by so many members of the profession, and for the many insightful comments it has received to date on its proposals. It is especially grateful to those who have regularly attended its meetings and public hearings, and participated so helpfully and patiently in its sometimes protracted discussions. As the Commission nears completion of its work, and public interest in its recommendations intensifies, it is mindful of the debt it owes all those who made their views known early on. Their contributions have had a significant impact on the Commission’s work.
From the beginning, the Commission sought to use the unprecedented openness of its process to build a substantial body of support for its proposals by the time they were ready for presentation to the House of Delegates. Judging from the lively engagement of so many members of the profession, and the generally enthusiastic response to the Commission’s work to this point, this strategy appears to have been successful. The Commission hopes that its recommended revisions to the Model Rules will command consensus within the legal profession and respect within the larger community.
Margaret Love is a member of the Ethics 2000 Commission and of counsel to the Washington, D.C. firm of Brand & Frulla. The original version of this summary memorandum was published in the Winter, 2000 issue of The Professional Lawyer. Since then it has been revised several times as the Commission’s recommendations developed and posted on the Commission’s website.