DC Bar: Lawyers Must Consider Ethics When Dissolving Law Firms

Closing the doors on a law firm includes much more than just locking the door behind you. “Dissolution” means the process of terminating the law firm’s existence as a legal entity. The District of Columbia Bar recently issued an opinion that discusses the multiple rules of professional conduct come into play when considering the ethics involved in dissolving a law firm.

After the members of the firm decide to dissolve the firm, the next step is to promptly notify the firm’s clients. Timing is important because, after dissolution, the law firm no longer represents its clients. Notice of the dissolution should also be sent to opposing counsel and the tribunal.

During the dissolution period, lawyers must continue to diligently represent and communicate with clients while facilitating the client’s choice of counsel going forward and where appropriate, properly disposing of client files, funds, and any property.

Under Rule 1.16(d), if a particular lawyer and his client will be terminating their relationship then the lawyer is required to “take timely steps to the extent reasonably practicable to protect the client’s interests” which include surrendering property and papers to the client, allowing time for the client to find other counsel and other considerations.

To read the full opinion, click here.

Trusting Your Colleagues with Fees: ABA Opines on Lawyers Splitting Fees

The ABA Standing Committee of Ethics and Professional Responsibility recently opined that when one lawyer receives a fee that is to be shared with a lawyer (or lawyers) at another firm (or firms), the fee for the other lawyer(s) should be placed in trust in accordance with Model Rule 1.15.

Rule 1.5(e) allows a division of fees among lawyers in different law firms if the division fairly represents the services provided by each lawyer, the client agrees to the agreement, the agreement is confirmed in writing, and the total fee is reasonable. When multiple lawyers have entered into a Rule 1.5 agreement, the lawyers who do not receive the initial payment are considered to be a “third persons” under Rule 1.15.

Rule 1.15(a) states that a lawyer “shall hold property of . . . third persons that is in a lawyer’s possession in connection with a representation separate from the lawyer’s own property.”

Thus, the receiving lawyer must deposit the funds that belong to the other participating lawyer(s) into a trust account. The receiving lawyer must also inform the other lawyer(s) of the receipt of the funds, and promptly deliver to the other lawyer(s) their portion of the fee.

To read the full ABA opinion, click here.

 

Up in the ‘Clouds’: Illinois Finds Duty of Competence Applies to Selection of Provider

This fall, the Illinois State Bar Association Committee on Professional Ethics reached two conclusions regarding use of cloud-based services. In Opin. 16-06, the Committee opined that:

(1) a lawyer may use cloud-based services to store confidential client information, so long as the attorney uses reasonable care to make sure that client confidentiality and client information is protected; and

(2) a lawyer is responsible for complying with her duties of competence in selecting a cloud-based services provider, assessing cloud-based services practices, and monitoring compliance with the lawyer’s professional obligations.

 This opinion expands Illinois’s prior opinion where a lawyer may work with a private vendor to monitor the law firm’s computer server, so long as the lawyer takes reasonable steps to ensure the vendor protects client’s confidential information. See, ISBA Op. 10-01 (2009).

Rule 1.1 Competence provides that lawyers must provide competent representation to their clients. Illinois recently amended this rule to include that lawyers who use cloud-based services must have a sufficient understanding of the technology to properly consider the risks of disclosure of confidential information. See Illinois Rule 1.1 Comment 8. Lawyers must also make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, confidential information. See Rule 1.6(e) Confidentiality. Because lawyers hire third-party providers for cloud-based services, lawyers will be subject to the professional rules regarding employing and supervising subordinates. See Rule 5.3 Comment 3.

Due to technology constantly changing, Illinois does not provide any specific requirements for lawyers when choosing a provider. However, Illinois does provide some tips for lawyers when inquiring about a cloud-based services provider, which are:

  • Review cloud computing industry standards and what protections should be put in place when using a cloud-based service;
  • Investigate whether the provider has employed reasonable security measures to protect client data from unintentional disclosures;
  • Investigate the provider’s reputation and history;
  • Look into whether the provider has experiences any security breaches in the past;
  • Demand an agreement to reasonably safeguard that the provider will abide by the lawyer’s duties of confidentiality and will immediately notify the lawyer of any breaches of information;
  • Require that all data is backed up and under the lawyer’s control; and
  • To require reasonable recovery of information if the agreement with the provider is terminated, or if the provider goes out of business.

Several other states have allowed lawyers to use cloud-based services to help with storing client information. See e.g., Alabama Ethics Op. 2010-2; Iowa Ethics Op. 11-01; Tennessee Formal Ethics Op. 2015-F-159; see generally “Cloud Ethics Opinions Around the U.S.”, American Bar Association, Legal Technology Resource Center.

To read the full opinion, click here.

 

Rhode Island Approves Attorney’s “Winning” Advertisement

A lawyer whose last name rhymed with win may use an advertisement that proclaims “Win with [insert attorney’s rhyming last name].” Rhode Island Supreme Court’s Ethics Advisory Panel (“The Panel”) Opinion 2015-03 held that the slogan is not misleading, and a reasonable person would not be hoodwinked into believing the lawyer will always succeed; however, it should be noted that the inquiring attorney indicated the advertisement would include the disclaimer “Prior results do not guarantee similar outcome.” Moreover, the attorney plans to include similar language in his retainer agreement where a client will initial that statement.

The Panel framed the issue as “whether there is a substantial likelihood that the proposed rhyming slogan…would lead a reasonable person to form an unjustified expectation about the results that the inquiring attorney would achieve.” The Panel found that the slogan would not be misleading and based its decision on Rhode Island’s Rule 7.1: Communications Concerning A Lawyer’s Services and the 2007 amendments to the rule.

In 2007, Rule 7.1 was amended, and new comments explaining misleading statements added the qualifiers “substantial likelihood” and “reasonable person” to Comments [2] and [3] of the rule.

Comment [2] states:

A truthful statement is misleading if it omits a fact necessary to make the lawyer’s communication considered as a whole not materially misleading. A truthful statement is also misleading if there is a substantial likelihood that it will lead a reasonable person to formulate a specific conclusion about the lawyer or the lawyer’s services for which there is no reasonable factual foundation.

Comment [3] states:

An advertisement that truthfully reports a lawyer’s achievements on behalf of clients or former clients may be misleading if presented so as to lead a reasonable person to form an unjustified expectation that the same results could be obtained for other clients in similar matters without reference to the specific factual and legal circumstances of each client’s case . . .

The Panel explained that in today’s world, advertising is found everywhere—billboards, print, television, radio, and the Internet. Thus, “reasonableness” is the standard used to determine whether an advertisement is misleading. The Panel found the attorney’s advertisement that cleverly rhymes his last name with “win” to be reasonable in light of his disclaimers and the public’s constant exposure to all manner of advertising in today’s digital world.

For more information on the advisory opinion click here.

Is Your LinkedIn Profile Attorney Advertising?

Does an attorney’s LinkedIn profile necessarily constitute attorney advertising?

In analyzing whether a LinkedIn profile is advertising, The Association of the Bar of the City of New York Committee on Professional Ethics Formal Opinion 2015-7 (“Opinion”) applied the New York Rules of Professional Conduct’s definition of an advertisement, which is “any public or private communication made by or on behalf of a lawyer or law firm about that lawyer or law firm’s services, the primary purpose of which is for the retention of the lawyer or law firm.”

The Committee concluded that if the primary purpose of an attorney’s LinkedIn profile is not to attract new clients, it is not advertising. So, how does an attorney define primary purpose? The Opinion explains that if the following criteria are met then a LinkedIn profile is advertising:

  1. It is communication made by or on behalf of the lawyer;
  2. The primary purpose of the LinkedIn content is to attract new clients to retain the lawyer for pecuniary gain;
  3. The LinkedIn content relates to the legal services offered by the lawyer;
  4. The LinkedIn content is intended to be viewed by potential new clients; and
  5. The LinkedIn content does not fall within any recognized exception to the definition of attorney advertising

The Opinion’s elaboration on each of the criteria may be found here.

So what do you do if your LinkedIn profile is considered an advertisement?

The Committee noted that a LinkedIn profile that constitutes advertising must comply with all of New York’s attorney advertising rules, including, but not limited to, the inclusion of the label “Attorney Advertising” legibly placed on the profile along with the name, principal law office address, and telephone number of the attorney. Additionally, the advertisement must not be deceptive or misleading.

The Committee also cautioned attorneys to personally “pre-approve” their advertisements, and reminded them that LinkedIn is considered to be a “computer-accessed communication” and thus must be retained for at least one year in accordance with New York’s attorney advertising rules.

The Opinion is novel in that it is the first ethics advisory opinion to conclude that all attorney LinkedIn webpages (or other social media profiles) are not necessarily advertisements. It will be interesting to see whether other bar associations and state bars follow New York City’s lead.