Proposed Work Plan - Issues To Be Considered
This document lists the Model Rules of Professional Conduct in the order they will be considered by the Ethics 2000 Commission, along with an explanation of the issues the Commission will be considering in its analysis. Potential new rules to be considered by the Commission are also listed.
Rule 1.6 (confidentiality)
The rule as proposed by the ABA has been rejected by the vast majority of states and by the ALI Restatement of the Law Governing Lawyers. The substance of the rule (specifically its exceptions for both future and past harms) ought to be reviewed to determine what role, if any, a "model" rule can play when it has already been demonstrated to be unacceptable to the majority of those for whom it is intended. In addition, the Commission should consider the extent to which the absence of any "noisy withdrawal" provision or exception in the text is contrary to other law prohibiting lawyers from assisting in crimes or frauds. Other issues to consider include when confidentiality should trump reporting of lawyer misconduct and the confidentiality obligations of temporary lawyers as addressed by ABA Formal Ethics Opinion 88-356. There are additions that should be considered in the commentary, including addressing the problem of the misdirected fax, the protection of confidences from prospective clients and the handling of confidences among co-clients.
Rule 1.7 (conflicts of interest)
Lawyers need more guidance than is currently provided by this rule. The difference between direct adversity conflicts (a) and material limitation conflicts (b) is not well understood, and the Commission should consider collapsing the two into a single section, as in Restatement § 201. The Commission should also consider separating personal interest conflicts to avoid automatic imputation of such conflicts to other firm lawyers. In addition, the text of the rule should clarify when it is impermissible even to seek a client’s consent to a conflict of interest. Finally, the comment might be expanded to address such issues as prospective conflict waivers, revocation of consent, sexual relations with clients and representation of affiliated organizations. The discussion of positional conflicts might be reconsidered.
Rule 1.8(a) (business transactions with clients)
The Commission should consider whether to require lawyers to advise clients to seek independent legal counsel regarding the transaction. The comment should clarify the relationship between Rule 1.8(a) and Rule 1.7, which also applies when the lawyer will represent the client in the transaction.
Rule 1.8(b) (using confidential information)
The Commission should consider a prohibition on the use of protected information for the lawyer’s personal enrichment, regardless of the lack of risk of prejudice to the client, as in Restatement § 112(2).
Rule 1.8(c) (client gifts)
The Commission should consider whether to follow Restatement § 208 and prohibit either accepting or soliciting some client gifts. The applicable degrees of relatedness could be reformulated along the lines of either Restatement § 208 or the Model Code of Judicial Conduct.
Rule 1.8(f) (third-party payment)
The Commission should consider changes suggested by Restatement § 215 regarding the ability of the lawyer to accept reasonable directions from third-party payers and the non-consentability of some third-party payer arrangements. Rule 5.4(c) may need to be reconsidered in this regard.
Rule 1.8(h) (prospective limits to lawyer’s liability)
The Commission should consider prohibiting prospective limitations to a lawyer’s liability, as many states have done. The comment should address the applicability of this rule to agreements by a client to arbitrate disputes with the lawyer and to participation by lawyers in limited liability entities.
Rule 1.8(i) (familial relationships among lawyers)
The Commission should consider deleting this rule and treating familial relationships as an aspect of personal interest conflicts under Rule 1.7, particularly if the decision is made to eliminate automatic imputation of personal interest conflicts.
Rule 1.8(k) (new)
The Commission should consider adding a rule prohibiting attorneys from having sexual relations with clients. (Some states have located such a rule in Rule 8.4.)
Rule 1.9(a) and (b) (former client conflicts)
The present rule does not contain a non-consentability provision. The comment could be expanded to include a reminder that the present client must also consent (under Rule 1.7), a discussion of the validity of prospective waivers, a clarification of the substantial relationship test and a clarification of the extent of any duty of loyalty owed a former client. The Commission should clarify the present ambiguity regarding the application of this rule (versus Rule 1.11) to former government lawyers asked to undertake representation adverse to the former government client. Whether all these conflicts should be automatically imputed or whether screening ought to be permitted in some cases should be considered with regard to Rule 1.10(a).
Rule 1.9(c) (former client confidentiality)
The Commission should consider limiting the duty not to use information to the disadvantage of the former client to uses that are "reasonably likely to materially" disadvantage the former client.
Rule 4.2 (ex parte contacts)
There are a number of problems with this rule and its comment, including: the continuing problem of the application of the rule to prosecutors, communication with class members, the definition of a represented non-client in the context of entities, authorized contacts with government officials on matters of public policy, contacts that reasonably respond to an emergency, lawyers assisting clients in otherwise proper communications by the lawyer’s client and lawyers who are parties in a case. The Restatement covers this area comprehensively, specifically in §§ 158, 159, 161 and 162.
Rule 8.4 (misconduct)
The Commission should consider a number of additions adopted by various states, including a prohibition on sexual relations between attorneys and clients (also considered with regard to Rule 1.8) and a prohibition on a lawyer’s willful refusal to timely pay child support obligations. The Commission should also reconsider the question of an anti-discrimination rule. Some states have also amended this rule to prohibit discourteous treatment of persons involved in the legal process and/or reincorporating a provision of the former Model Code prohibiting lawyers holding public office from using that office improperly. Another suggestion is a rule prohibiting lawyers from firing or expelling another lawyer because of that lawyer’s refusal to take action contrary to law or the disciplinary rules. It may also be helpful to give more specific guidance on what conduct will be prejudicial to the administration of justice.
Rule 1.1 (competence)
Competence should include having not only the appropriate knowledge, skills and professional qualifications but also the time to devote to the matter. The comment might address the propriety of a trusted lawyer agreeing to provide advice in an area where the lawyer is unskilled (with the client’s informed consent), agreements to provide services only within an agreed upon budget and mitigation or rectification of the consequences of the lawyer's incompetence.
Rule 1.10(a) (imputation of conflicts)
The Commission should reconsider the application of this rule in conjunction with its examination of each of the specific conflict rules to which it does or might apply. It should also consider the possibility of avoiding disqualification through screening in some circumstances, including prospective clients and situations in which a lawyer has only insignificant client confidences. The Commission should consider the applicability of the rule to the various ways in which lawyers practice together, including: government offices, affiliated law firms, temporary lawyers, lawyer consultants, co-counsel arrangements and transient nonlawyer employees.
Rule 2.2 (lawyer as intermediary)
There has been considerable confusion regarding the relationship between this rule and Rule 1.7. The Commission should consider deleting this rule and incorporating much of the material into Rule 1.7, particularly the comment regarding joint representation.
Rule 1.2(a) (allocating decision-making authority)
The Rule presently gives insufficient guidance in allocating authority between lawyer and client to make decisions. It is contrary to case law giving the client authority to direct the lawyer as to certain "means" decisions and does not explicitly confer authority on the lawyer to take some actions without first consulting with the client. There is good reason to consider revisions in line with the work of the Restatement, specifically §§ 32 - 34.
Rule 1.2(c) (limiting objectives after consultation)
There is no "non-consentability" provision under the present rule, although Rule 1.1 may limit the extent to which a lawyer can agree to limit the scope of the representation. The Restatement (§ 30) does contain a non-consentability provision. Also, the D.C. rule has a specific provision governing the authority of government lawyers.
Rule 1.2(d) (prohibited assistance)
Should the rule be expanded to prohibit not only crimes and frauds but also acts in violation of a court order and/or contracts known to be unenforceable? See, e.g., Restatement § 151(2) & cmt. d (suggesting that decisions often use the prohibition in Rule 8.4(d) to cover knowingly counseling or assisting a client to violate a court order).
Rule 1.3 (diligence)
There is presently no rule that directly sets forth a duty of "zeal" or some other component of loyalty. The Comment suggests that "diligence" includes more than promptness. Restatement § 38, cmt. b states that lawyers must protect their clients’ interests with "competence, diligence, and loyalty." A more explicit duty of loyalty (or zeal) could be incorporated into the text itself.
Rule 1.4 (communication)
There is presently no rule that directly sets forth a duty of candor to the client. Restatement § 28 sets forth the lawyer’s fiduciary duties to a client, including a duty of honesty. A new rule incorporating various fiduciary duties could include loyalty and candor. A definition of informed consent could also be incorporated into this rule.
Rule 1.5(a) (fees - reasonableness)
The Commission should consider dealing, in text or comment, with such issues as unlawful fees, statutes or rules controlling percentages of contingent fees, non-refundable retainer fees and costs and disbursements. The Commission should also consider whether the rule should provide greater guidance regarding the factors to be considered in determining the reasonableness of a fee, including the reasonableness of a contingent fee and the time at which reasonableness will be measured.
Rule 1.5(b) (communicating basis of fee)
The Commission should consider requiring that all fee agreements be in writing, except where the lawyer has previously represented the client. The Commission should also consider whether other aspects of the relationship should be reduced to writing in a more general engagement letter.
Rule 1.5(e) (division of fees)
The Commission should consider changes suggested by Restatement § 223, which requires that clients be informed of both the fact of the division and the nature of the division of fees among lawyers not in the same firm. The Commission should also consider giving greater guidance regarding the duties of a lawyer who is receiving a fee and not performing any specific services.
Rule 1.11 (conflicts of interest/government lawyers)
The rule and comment do not sufficiently address the relationship between Rule 1.11 and other conflicts rules, e.g., its relationship to Rule 1.7 regarding concurrent conflicts of part-time government lawyers who also engage in private practice and its relationship to Rules 1.9 and 1.10 regarding the imputation of conflicts of former government lawyers when the present representation is materially adverse to the former government client. The comment should describe adequate screening measures. The Commission should consider whether this or another rule should more clearly address conflicts of interest and other duties of government lawyers.
Rule 1.12 (former judge or arbitrator)
The rule should include a reference to lawyers who have served as mediators. The Commission may also want to consider a more comprehensive rule directed to lawyers serving as neutrals, particularly while they are simultaneously engaged in the traditional practice of law. The Commission should consider whether this or another rule should address other duties of a lawyer serving as a dispute resolution neutral.
Rule 1.15 (safeguarding property)
The present rule gives insufficient guidance to lawyers in a number of situations, including the handling of advanced fees and the handling of clients’ property following the termination of representation. The Restatement covers this area comprehensively, specifically in §§ 56 - 58.
Rule 1.16 (declining or terminating representation)
The present rule gives insufficient guidance to lawyers regarding their duties to former clients, i.e., duties upon termination, including duties with respect to fees and documents relating to the representation. The Restatement covers this area comprehensively, specifically in §§ 45, 52 and 58. In addition, the Commission should consider under what circumstances a lawyer is permitted to withdraw when the lawyer disagrees with a client over the course of the representation. See Restatement § 44(f), especially cmt. j. Another issue to consider is if the rule should address a lawyer's technical withdrawal from a representation when the lawyer leaves the firm on behalf of which the lawyer is representing the client.
Rule 1.13 (entity representation)
Restatement §§ 155, 156 contain more extensive discussion that might be incorporated into the text and/or comment. The counterpart to Rule 1.13 in the Model Rules of Professional Conduct for Federal Lawyers differs significantly, suggesting that a separate rule for government lawyers might be worth considering. Other issues to consider include whether the lawyer is also deemed to be representing any organizations affiliated with the client organization, the extent to which confidentiality rules apply within the organization and whether separate provisions should be drafted for organizations without centralized management, such as partnerships or member-managed LLCs. Another issue concerns the lawyer's responsibility under the rule to report action likely to result in substantial injury to the organization to a "higher authority." Who is considered to be this authority when the action relates to a transaction that must be approved by shareholders?
Rule 1.14 (client under disability)
The rule and comment provide insufficient guidance for lawyers dealing with clients under a disability. See ABA Formal Ethics Opinion 96-404. In particular, there is almost no guidance for lawyers representing children: for example, whether it is the mere fact of minority or cognitive impairments that constitute a potential disability and whether and under what circumstances the lawyer should look to the parent (a natural but not necessarily a legal guardian) for decision-making. The Commission should also consider whether this or another rule should give greater guidance to lawyers representing guardians when the lawyer thinks the guardian is acting contrary to the interests of the ward. See ABA Formal Ethics Opinion 94-380.
Rule 1.17 (sale of law practice)
This rule might be revisited in light of what the states have done in allowing charges for the value of the goodwill of a law practice in law firm sales and in domestic disputes.
Rule 2.1 (adviser)
Some states provide for giving advice on alternative forms of dispute resolution. Restatement § 151, cmt. h questions whether lawyers may appropriately charge a fee for unsolicited nonlegal advice. The Commission might consider adding to this rule a further explanation of the prohibition against rendering advice that will assist a client in perpetrating a fraud or committing a crime.
Rule 2.3 (evaluation for use by third person)
Restatement § 152 contains comment on providing information on risks, including risks to confidentiality, to the client, as well as the nature and scope of the evaluation, auditors’ requests for information and tax opinion letters. See also Restatement § 73. Other issues to consider include: under what circumstances lawyers must disclose their interests in the company on whose behalf the opinion is rendered, whether there are certain requests for opinions that should be prohibited as unprofessional and whether there are certain qualifications on opinions that are unprofessional.
Rule 3.2 (expediting litigation)
If the Commission wants to include either mandatory or aspirational language regarding both treating persons involved in the legal process considerately or informing the client about ADR alternatives to litigation, this is one place where provisions along these lines might be inserted either in the text or the comment. The Commission could also consider giving additional guidance in the comment regarding the steps a lawyer is required to take to comply with the rule.
Rule 3.3 (candor to the court)
The problem of dealing with client perjury in the criminal context is not adequately addressed, and the comment is confusing in this regard. There is substantial state variation in efforts to deal more directly with the problem. There is a need to deal with the problem of handling physical evidence of a crime committed by the client, and this may or may not be the appropriate place to address this issue. The review of this rule should consider offenses against the administration of justice other than perjury, e.g., witness or jury-tampering, and offenses perpetrated by persons other than the client. The rule should also address how the lawyer should handle the awkward task of seeking the court’s permission to withdraw and what the lawyer should do if permission to withdraw is denied. The rule should also specify how it applies during discovery (ABA Formal Ethics Opinion 93-376). The situation in which criminal defendants intend to lie when testifying on their own behalf needs to be specifically addressed.
Rule 3.4 (fairness to opposing party and counsel)
The text and/or the comment could incorporate sections on dealing with physical evidence and/or complying with known local customs or courtesy. Comment might address the responsibilities of a lawyer receiving inadvertently sent or wrongfully disseminated privileged information. The Commission should also consider whether tactics beyond those already "unlawful" should be prohibited and whether the rule should deal exclusively with pretrial fact gathering.
Rule 3.5 (impartiality and decorum of tribunal)
Some states have added language in the text or the comment regarding engaging in undignified or discourteous conduct which is degrading to the tribunal.
Rule 3.6 (trial publicity)
The comment could contain additional language regarding the possible need to consult the client before communicating with the news media (addressing the lawyer’s interest in obtaining publicity, possibly at the expense of client interests). It may be useful to have some clarification of the relationship between Rules 3.6 and 3.8(g).
Rule 3.7 (lawyer as witness)
The rule on imputed disqualification relies on a cross-reference and could be more explicitly formulated. Restatement § 168 is more detailed and more clearly separates situations in which the lawyer is expected to testify for the client, should testify for the client and may be called as a witness by the adversary, as well as highlighting instances in which the client’s consent is required either to the lawyer’s decision not to testify or to the conflict with the lawyer or the lawyer’s firm.
Rule 3.9 (advocate in nonadjudicative proceedings)
The comment might better explain what the non-adjudicative administrative proceedings are that are referred to in this rule. See, e.g., Restatement § 164.
Rule 4.1 (truthfulness in statements to others)
The relationship between this section and Rules 1.6 and 1.2(d) needs clarification, e.g., whether there is an implicit exception under Rule 1.6 for disclosures necessary to avoid lawyer assistance in crimes or frauds. In any event, the comment could include a reminder that even if the lawyer may not or chooses not to disclose, the lawyer may still be obligated to withdraw in order to avoid assisting a crime or fraud. The Commission could rethink Comment [2] and reconsider the definition of "fraud."
Rule 4.3 (dealing with unrepresented person)
Should the black-letter rule be amended to prohibit giving advice other than the advice to obtain counsel? Some states have done so, as was required under the former Model Code. See also Restatement § 162. As for the last section of the rule, perhaps the Commission should consider a separate rule or a revision to Rule 4.3 prohibiting attempts to obtain protected information from non-clients (e.g., evidentiary privilege or trade secrets).
Rule 4.4 (respect for rights of third persons)
The comment could include more discussion along the lines of the various codes of courtesy and civility (perhaps in the proposed statements of excellent practice). Either the text or the comment could address the now ignored problem of impeaching the truthful witness, for which there may be no justification in a civil case. (This issue could also be addressed under duties to the tribunal.)
Rule 5.4(a) (fee-spitting with non-lawyers)
The Commission could consider modifying the rule to account for ABA Formal Ethics Opinions 93-374 and 95-392 and for state decisions permitting lawyers to pay a percentage of fees earned to a bar-association-sponsored lawyer referral service. The Commission could also consider permitting partnerships between lawyers and non-lawyers with regulatory safeguards like those in the D.C. rule.
Rule 5.4(c) and (d) (professional independence of lawyer)
Rule 5.4(c) will need to be changed if the Commission recommends changes in Rule 1.8(f) permitting third persons to direct the lawyer. Rule 5.4(d) may need to be changed to reflect the trend toward practice in limited liability companies (practice as an LLC needs to be reconciled with Rule 1.8(h).)
Rule 5.5 (unauthorized practice of law)
Either the text or the comment could address the problems of employment of suspended or disbarred lawyers, foreign legal consultants, statutes prohibiting the corporate practice of law and their application to in-house counsel who represent clients other than their employer and controversies over the interstate practice of law. A uniform definition of the practice of law could be developed, particularly in the context of lawyers participating in multi-state business transactions. More guidance could also be provided with respect to what constitutes "assisting" the unauthorized of practice of law.
Rule 5.6 (restrictions on right to practice)
The Commission should address the question of law firm restrictions on the amount of fees lawyers turn over to a firm if they leave and take clients with them. The Committee could reconsider the prohibitions on reasonable covenants not to compete and on settlement agreements in which a lawyer refrains from bringing substantially related actions against the defendant. Should in-house counsel be able to agree not to subsequently represent competitors in return for a client agreement not to discharge except for cause?
Rule 5.7 (law related activities)
Given the lack of response to the current version of Rule 5.7, the Commission might consider requiring lawyers to conduct law-related activities in accordance with the rules governing lawyers.
Rules 6.1 (pro bono publico) and 6.2 (accepting court appointments)
The Commission should consider mandatory pro bono service. Rule 6.2 could be modified to make it clear there are some circumstances in which a lawyer must request permission to decline an appointment.
Rules 7.1 - 7.5 (advertising and solicitation)
There is substantial state variation, suggesting that the Model Rules’ present approach might be reconsidered to include a ban on some targeted written solicitations (e.g., within 30 days of an accident) and/or a relaxation on the absolute ban on in-person or telephone solicitations. Possible constitutional problems with Rule 7.3(a) and Internet issues should also be considered.
Rule 8.5 (disciplinary authority and choice of law)
The Commission should consider extending disciplinary authority to lawyers not admitted to practice in a state who commit violations while practicing in the state or holding themselves out as practicing in the state (or to a lawyer who has the obligation to supervise or control a lawyer who commits a violation in the state). Some states (e.g., Maryland) have adopted such a rule, which is also the stated preference of the Restatement. (§ 5, cmt. g). Another issue is the choice of law problem in a multi-state transaction involving lawyers licensed in different jurisdictions.
NEW RULES TO BE CONSIDERED
Lawyer’s Duties to Prospective Clients
Either in a new rule, or in additions to existing rules, the Commission should explore incorporating Restatement provisions (§ 27) detailing a lawyer’s duties to protect confidences, to avoid conflicts of interests, to protect property and to use reasonable care in giving legal advice or performing legal services.
Ethical Responsibilities of Law Firms
Such a rule has been proposed by a number of commentators and has recently been adopted in New York. Among the issues such a rule might cover are the development of rules governing the conduct of lawyers associated in firms and non-firm "teams," including the articulation of rules governing law firm split-ups and mergers as well as the issues already addressed in Rules 5.1 through 5.3. The Commission could also consider the professional responsibility implications of affiliations among law firms, law firm franchising, "partnering" between law firms and corporate legal departments and "virtual" law firms.
Death or Disability of Lawyer
Should a lawyer be required to make plans for protecting clients in the event of the lawyer's death or disability? Obviously this is critical for sole practitioners, but it may also apply to law firms.
Intermediary Organizations
The rule would specify the circumstances in which a lawyer may cooperate with an intermediary organization.