Originally published on May 31, 2011 in our free SmallLaw newsletter. Instead of reading SmallLaw here after the fact, sign up now to receive future issues in realtime.
In September 2010, the ABA's Commission on Ethics 20/20 set into motion a process that could have negatively impacted the ability of sole practitioners and small law firms like yours to compete with the Legal Zooms of the world, which are not bound by the Rules of Professional Conduct. Fortunately, activists within the solo and small law firm community have fought for your right to compete on a level playing field. Herein lies their story thus far, which I will continually report on here in the SmallLaw newsletter.
Creation and Purpose of the ABA's Commission on Ethics 20/20
In early 2009, then-ABA President Carolyn Lamm appointed the Commission, asking that it investigate ways to enable American lawyers to compete with legal providers in other countries while continuing to protect the public and the core values of the profession. At the time of its creation, Robert Mundheim, the Chair of the Standing Committee on Ethics and Professional Responsibility issued a memorandum to the Commission's co-chairs, Jamie Gorelick and Michael Traynor, asking them to consider additional points, one of which was the impact of further regulation on the solo and small firm segment of the legal profession (the largest and fastest-growing segment), and lawyers in rural and remote areas.
The purpose of any revisions to the Model Rules would be to identify and address the expanded opportunities for ethics violations resulting from the adoption of newly-emerging practices, such as cloud computing or legal process outsourcing. What resulted was an either a perceived or real effort to increase regulations on law practice by revising the Model Rules related to confidentiality, competence, conflicts of interest, and other ethical obligations.
As reported in BlawgWorld, on September 20, 2010, the commission released the first two of their initial papers:
For Comment: Issues Paper Concerning Client Confidentiality and Lawyers' Use of Technology
For Comment: Lawyers' Use of Internet Based Client Development Tools
The papers requested comments on both the form and substance of how the Commission could extend the protections of the Model Rules to current practices, offering such ideas as imposing an obligation to negotiate the terms and agreements with Web application vendors and making the assumption that cloud computing "is arguably a form of outsourcing." The Commission concluded that "lawyers must take reasonable precautions to ensure that their clients' confidential information remains secure" and that the goal is to "identify the precautions that are either ethically necessary or professionally advisable."
With respect to online client development, the Commission examined ethics issues arising out of four common online methods of client development: (1) social and professional networking services (such as Facebook, LinkedIn, and Twitter), (2) blogging, (3) pay-per-click advertising (e.g., Google AdWords), and (4) law firm Web sites.
On September 29, 2010, the Commission also announced that a public meeting would be held in Chicago on October 14, 2010. If you wanted to attend and present, supporting papers were due October 4, 2010. Given the short notice, solos and small firms found themselves at a disadvantage. As a result, only five witnesses signed up to testify — one law firm, one representative from the Legal Marketing Association, and three vendor representatives.
Reactions From the Solo and Small Law Firm Community
Immediately after the release of the Commission's papers, Larry Bodine, an authoritative legal marketer, proclaimed Red Alert: The ABA Wants to Regulate Online Lawyer Marketing — citing the deleterious effects of increased regulation on law firm marketing.
At MyShingle, solo evangelist Carolyn Elefant sounded the alarm too. "[T]his is a critical time for solos and small firms to step forward and make our voices heard," she wrote. "We cannot allow vendors and marketers to dominate this rulemaking; we need to let the Commission hear from real lawyers in real practice."
These rallying cries did not fall on deaf ears. The information circulated throughout the legal social media community. Stephanie Kimbro (creator of VLO, a Web-based practice management system acquired by Total Attorneys) railed against the whole idea that anyone would think the review was necessary ("The basic principles are there and easy to comply with.")
At the same time, the lack of solo and small firm representation at the public hearing, and concern that members of the commission lacked an adequate understanding of technology, led Carolyn Elephant to conduct a teleseminar to educate small firms and emphasize the importance of activism on the issues.
Carolyn also combined a 300-page collection of comments by lawyers, associations, and service providers in response to the issues paper, voicing a wide array of opinions.
Jack Newton of Clio, Richard Granat of DirectLaw, Larry Port of Rocket Matter, and David Dahl of Total Attorneys — Web-based practice management competitors that had recently joined together to form The Legal Cloud Computing Association — submitted a joint paper in response to the Commission's call for comments. They recommended the creation of an online educational resource for lawyers (identifying measures lawyers could take to comply with Model Rule 1.6), and refuted the idea that using Web applications should be considered outsourcing.
If the ABA hadn't been paying attention before, it had no choice given this response.
The ABA Listened! They Really Listened!
On May 2, 2011, the Commission issued its Initial Draft Proposal — Technology and Confidentiality — to the Standing Committee on Ethics pending comments received by July 15, 2011.
Carolyn Elefant shouted on her blog, They Listened, They Really Listened!
The Commission proposed four actions:
1. The ABA Center for Professional Responsibility should work with relevant entities within the Association to create a Web site providing the most current information on client confidentiality.
2. Two of the ABA's working bodies should centralize their data and collaborate on their efforts to provide updated technology-related resources.
3. An amendment to Comment [6] of Model Rule 1.1, making it clear a lawyer's need to have a basic understanding of technology's benefits and risks.
4. An amendment to Model Rule 1.6(c) to clarify that lawyers have a duty to take reasonable measures to protect client data.
Jack Newton believes the proposed actions represent Increasing Clarity on the Ethics of Cloud Computing by being tool-neutral to accommodate for the inevitable evolution of technology systems.
In Clouding the Issue, Mary Grady observes that Commission member Frederick Ury said the recommendations strike a balance between the legal profession's need to tap the benefits of technology while protecting clients.
Don't Let Your Guard Down
We're still in the early innings regarding emerging law practice trends such as alternative business structures, multi-jurisdictional practice, and virtual law firms — not to mention the final verdict of the Commission. All of these trends concern solos and small firms in their efforts to compete in an increasingly globalized legal marketplace. I think it wise that the rules be reviewed in light of these new trends, but I hope the Commission's adoption of an "educate, don't regulate" approach continues, as it is the only reasonable path.
As Solo Practice University founder Susan Cartier-Leibel states, "The Rules are the Rules. We have to comply with the same rules of professionalism regardless of what the media is." Stephanie Kimbro advises that the legal community stay engaged. "My impression is that the ABA realizes that their membership has changed dramatically as solos and small firms are now the growing majority of legal practitioners. I think they understand that they have to address this more than they have in the past. That said, it's important that solos and small firms continue to provide the Commission with their comments and feedback throughout this process and make sure that any proposed changes to the Model Rules have the solo and small firm perspective."
Staying involved in the Commission's work during this process is essential as the future of law practice becomes the present. Your involvement will also enable the ABA to learn more about the needs of the profession it serves, and encourage it to continue development of tools and resources to support the solo and small firm segment.
Donna Seyle is Content Manager at JD Supra.
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