When It Comes to Innovation, Lawyers Are Being Left Behind

lawyers left behind by innovation quote eric cooperstein

One of the most frequent excuses we hear for the glacial pace of innovation and problem-solving in the legal profession is that our ethical rules are too confining. Eric Cooperstein and Megan Zavieh propose to remove this last barrier and use this 4-part series to highlight the ethical rules that most desperately need updating. Excuses be damned, these changes would free lawyers to innovate, adapt, and‚ hopefully‚ bridge the gaping access-to-justice divide. This series focuses on updating the Rules of Professional Conduct that threaten the very future of law practice.

In our first post on revising lawyers’ ethics rules, we argued that an overhaul of the advertising rules is long overdue. Today we explore Rule 5 of the Model Rules of Professional Conduct, which is ripe for innovation in its own right.

Professional Independence – Rule 5.4

Let’s begin with Rule 5.4, which purports to govern lawyers’ professional independence and prevent lawyers from sharing fees with non-lawyers.

To set the tone, here’s a composite of several conversations we’ve had with lawyers about the scope of Rule 5.4:

Can I incentivize my non-lawyer employees by paying them a percentage of the fees on files if they meet efficiency goals on that case?

No. Rule 5.4 prohibits that.

Can I defray the costs of rolling out a web-based platform for serving more clients by paying my web developer based on the volume of business generated? 

Nope. Rule 5.4 prohibits that.

Well, can I get some venture capital to fund the franchising of my law firm concept and in exchange give the funders a 10% interest in the business?

No dice. You got it—Rule 5.4.

Rule 5.4 says lawyers cannot share fees with non-lawyers. So no per-case bonuses, no law-firm ownership for non-lawyers, and no referral fees. Without these guardrails, the thinking goes, hordes of money-hungry non-lawyers will improperly influence lawyers to settle cases prematurely or abandon difficult, unprofitable clients. Rule 5.4 protects the profession, and therefore clients, from the ugliness of the capitalist marketplace.

Oh, those weak-willed, spineless lawyers! One might wonder how they dress themselves each morning, let alone represent their clients’ diverse, complex, high-stakes interests. Thank heavens Rule 5.4 insulates us from Machiavellian business interests.

How ironic that other ethics rules—especially Rules 4.2 (contact with represented persons) and 4.3 (contact with unrepresented persons)—protect the public from lawyers’ interrogation and negotiation superpowers. Maybe sharing fees with non-lawyers is our kryptonite?

Rule 5.4 assumes lawyers are unable to maintain independence if a non-lawyer owns a financial stake in the entity providing legal services. This is absurd and, frankly, insulting. With all of ethics rules to which we are subject, the duties we owe our clients and the courts, and the manner in which we are entrusted with client funds, we as a profession have somehow deemed it necessary to protect ourselves from outside financial investment?

Notably, our rules do not explicitly prohibit investment in our law firm by a manipulative and ill-willed licensed attorney who could just as easily corrupt our professional judgment.

Rule 5.4 says that no matter how upstanding lawyers are as a profession, and no matter how much the public trusts us, when it comes to money, we are so susceptible to influence that we must protect ourselves from ourselves. Oy. We wonder why the public doesn’t trust lawyers? We don’t trust ourselves. The prophecy has been self-fulfilled.

We Are Stronger Than Regulators Think

A lawyer’s judgment is influenced daily by financial pressures. Undoubtedly, Rule 5.4’s drafters knew about work in a private law firm. But perhaps they drafted the rule before billable-hours goals, utilization and realization rates, and per-partner profitability came into vogue. Because struggling solo lawyers feel pressure to settle cases (if only to manage their financial exposure). Lawyers with “mill practices” emphasize high volume over personalized client attention. Thinking we need to protect the public by limiting lawyers’ financial relationships with non-lawyers sounds noble (maybe), but it lacks support in the empirical data.

Experiments with non-lawyer ownership of law firms have yet to collapse any democratic legal systems. The District of Colombia Rules of Professional Conduct allow non-lawyers to own up to 25% of a law firm. Great Britain began allowing non-lawyer ownership of law firms in 2011. And Australian non-lawyers have been permitted to purchase equity interests in law firms since 2007.

Sadly, it appears that most innovation in the legal profession is coming from outside the practice and is being spearheaded by non-lawyers. Legal Zoom and Avvo have built super-charged internet engines to identify potential consumers of legal services, increase access to legal services, and—to the extent lawyers provide those services—control how the work is routed to lawyers and how much the lawyers are paid. What roles have lawyers played in these developments? Very few, if any. Except, of course, to oppose them.

Fixing the access to justice gap will require innovation. Indeed, the gap has proven so stubbornly resistant to decades of lukewarm policy tweaks that we can conclude a fix will demand game-changing innovation. Other issues plaguing the legal profession will benefit, too.

Innovation requires significant investments of time and money. Practicing lawyers—whose days are often filled only with their provision of legal services—have proven unable (and, perhaps, unwilling) to reinvest their time and money into meaningful innovation.

Lawyers Funding Lawyers

Some lawyers manage to make it happen. Erin Levine of Levine Family Law Group, a full-service family law firm, recently built and launched Hello Divorce, a self-help platform for California family law litigants. She kept her firm open and helping people during her innovation cycle. But most lawyers with great ideas for innovation can’t fathom launching a powerful new innovation at all, let alone doing it while continuing to run a law firm.

Our observation is that lawyers at the forefront of innovation—often with an access-to-justice angle, but not exclusively—seem to be leaving their law practices entirely. Take, for example, Chad Burton of CuroStudio and CuroLegal and his former partner Nicole Braddick of Theory and Principle as two examples. There are more. When they stop practicing law, the rules let them solicit investors. But relying on innovation by non-lawyers and so-called “recovering” lawyers is fraught.

Our rules—or, more precisely, states’ implementation of the Model Rules—hinder the innovation process. Every entity currently offering legal services lacks access to catalytic outside investment.

Imagine if Uber could have launched and grown only by reinvesting its profits (or by relying on taxi companies and their drivers to give them money to develop their disruptive technology and implement their vision). The game-changing innovations would never have happened. What are we leaving on the table? What could outside investment unlock in our industry?

Consider a law firm that wants to implement a costly custom software solution to allow its lawyers to take and resolve pro bono matters at scale. Or a non-profit or low bono firm that needs a significant influx of cash to create and implement a new solution to grow its services.

The profession’s allergy to outside cash prevents these entities from creating or implementing tools that could—without hyperbole—change the way our profession and our society delivers legal services and bridges the yawning access-to-justice divide.

Arrogance Preventing Meaningful Change While Lawyers Are Left In The Cold

Maybe it’s plain arrogance that lets lawyers believe that other professions have nothing to teach us about business or innovation, or that partnerships with non-lawyers cannot grow the market for legal services.

Still, while lawyers sit around grinding our collective teeth about Legal Zoom, long-established market forces drive non-lawyers and their capital to carve up and repackage a host of services that we used to regard as the practice of law.

We have long known, for example, that accounting firms provide tax consulting and strategic planning services that look an awful lot like giving legal advice. There are entire industries that provide employers with “out-sourced” human resources services, assist closely-held businesses in converting to employee-owned (ESOP) companies, review discovery documents, and facilitate completing and filing mechanics liens.

Non-lawyers can own these companies and provide services that used to be performed by lawyers alone. Notably, they can also accept and leverage investors’ cash to do it better, more efficiently, and in more innovative ways.

This trend is not limited to transactional work. The Social Security Administration has decided that non-lawyers may represent claimants in hearings before administrative law judges. That process, for the uninitiated, involves direct examination of the claimant, cross-examination of government experts, and making legal arguments to the ALJ.

A social security benefits services company—not organized or holding itself out as a law firm—is doing exactly the things that lawyers have always thought was their birthright.

In Washington State, the nascent Limited License Legal Technician program allows “technicians” to provide some legal services after completing a one-year educational program and 2,000 hours of field experience. The program is limited to family law for the moment, but there are plans to expand to landlord-tenant law and elsewhere. These are just a few examples.

These entities are exempt from fee-sharing, trust accounting, multi-jurisdictional practice, non-compete, and advertising rules that restrict how lawyers run their businesses. These “outsiders” innovate, invest, solicit venture capital, and partner with other professionals in ways that lawyers may not. All this because lawyers must be “independent.”

There have been efforts to make Rule 5.4 less stifling. But some of the exceptions are as absurd as the rule itself. In some jurisdictions, insurance companies have “captive” law firms that hold themselves out to the public as law firms, but that only defend policyholders of the insurance company that controls the firm. Bar associations—which are, obviously, not licensed to practice law—operate referral services that require lawyers to split fees with them.

We are asserting our “independence” straight to our extinction. The practice of law is being carved up like so many cuts of meat, each slice a value-judgment that what lawyers do is not quite so unique as we lawyers think. Lawyers are missing out on the spoils of these new ventures, of course. But the greater missed opportunity is that we are not even part of the conversation.

Change Is Possible

Our argument for change is not theoretical. Change is possible. Like Britain and Australia, we could allow full or partial non-lawyer ownership of law firms. We could allow sharing of legal fees with non-lawyers (while ensuring the lawyer retains complete control over the attorney-client relationship and decision-making process).

Until ethics rules evolve, lawyers will struggle under the weight of the old ones that directly cripple their innovation. This crisis should be self-evident: lawyers face possible sanction, clients suffer, and access to justice remains as sticky as ever, all because we lack the will and creativity to create a regulatory regime that fosters innovation and empowers us and our profession. If we continue to do nothing, we’ll just keep getting carved to pieces.

The post When It Comes to Innovation, Lawyers Are Being Left Behind appeared first on Lawyerist.com.

This Post is Privileged and Confidential

But you started reading it anyway.

We’re all so inundated with disclaimers and license agreements at every turn that we barely flinch anymore when we see the words privileged and confidential — or worse, long paragraphs in small fonts portending doom for the unwitting recipient of a misdirected email or the surfer of a law firm website. Disclaimers seem to have spread like a consensual virus — a lawyer sees another lawyer using a disclaimer, figures it must be a good idea, and includes it in his own materials.

Website Disclaimers

Website disclaimers are fairly inoffensive. These disclaimers generally warn visitors that the information on the website is not meant to provide legal advice about the visitor’s individual legal problem and caution the visitor not to disclose confidential information in an email or contact form sent to the law firm until the firm has agreed to enter into an attorney-client relationship. Lawyers are concerned, of course, that an opposing or related party to one of the firm’s existing clients might provide confidential information that would conflict the lawyer out of its already existing representation.

There do not appear to be any reported cases that have disqualified a law firm from representing a client because the firm received unsolicited confidential information from a non-client. The Virginia State Bar Committee on Legal Ethics did issue an opinion that compared websites to advertisements in the Yellow Pages. Just as a prospective client who obtains a lawyer’s phone number from a Yellow Pages ad should have no expectation of confidentiality when leaving a voicemail message for a lawyer, the Virginia Bar reasoned that there ordinarily should be no expectation of confidentiality in an email message sent from a website. The opinion recommends, but does not require, that Virginia lawyers include such a disclaimer on their websites and cautions that lawyers may create a duty of confidentiality through sites that offer  a “free evaluation” of a prospective client’s case and invite web visitors to provide the lawyer with information about their situations.

Website disclaimers are designed to address the exact same situation repeatedly: stranger v. law firm. No disclosure of an existing client’s confidential information is involved, and whether the stranger reads the disclaimer or heeds its warning is of no consequence to the law firm, which has discharged its duty to itself (protect against claims of reliance on alleged legal advice) and to its existing clients (prevent being disqualified from existing representations).

Email disclaimers, however, are a different and dangerous breed.

Email Disclaimers

They probably have their roots in that antiquated technology: the facsimile transmission (which our ancestors colloquially referred to as a fax).  Right after the first lawyer sent a fax to opposing counsel when it was meant for the client‘s eyes only, that lawyer starting putting a disclaimer on the fax cover sheet. That way, the next time it happened the blame for the mistake could be shifted from the lawyer to the accidental recipient, who had no business reading that fax in the first place. When lawyers started using email, it must have seemed only logical to try to remedy the predictable calamity of the future misdirected email with a warning to those who receive messages that were not intended for them.

Now, probably 80% or more of the emails I receive from lawyers contain some form of disclaimer. Nearly all appear after the signature block; in longer messages they don’t even appear on the screen until I scroll down further. Some simply declare that the email is “privileged and confidential;” most suggest that the email “may” be privileged and confidential (how I should determine whether it is or not is not explained), and either ask or demand that I notify the sender, and destroy the email and any paper copies I may have printed.

There are several problems with these disclaimers, aside from cluttering up email threads. For one, attorney-client privilege and confidentiality are not the same thing.  Without digressing too much, suffice it to say that while all attorney-client privileged communications are confidential, only a small portion of the client information lawyers are required to treat as confidential is also privileged. Another incongruity is that an email intentionally sent from a lawyer to almost anyone except a client will not be confidential or privileged at all (setting aside agents or experts the lawyer may be contacting on the client’s behalf or negotiations subject to a confidentiality agreement or rule).  So for the vast majority of emails that lawyers send — to colleagues, to witnesses, to vendors, to friends, to listservs, etc. — the disclaimer is meaningless.

Undermining Disclaimers Through Overuse

Which brings us to the real problem with these disclaimers. By overusing them, lawyers may be undermining the effectiveness of disclaimers in protecting the confidential or privileged nature of the information in the email in the (hopefully) rare event that an email is misdirected (or inadvertently produced in discovery).

In Scott v. Beth Israel Medical Center Inc., 847 N.Y.S.2d 436, 444 (2007), the court refused to find that a series of emails were privileged just because they contained a disclaimer that was found in every email sent by the plaintiff. Moreover, by overusing disclaimers and privilege warnings, lawyers are training the world to ignore them — which is precisely what we don’t want people to do.

Using Disclaimers Appropriately

Appropriately used, disclaimers may allow lawyers to rescue misdirected emails that were sent to other parties and preserve the client’s confidentiality, particularly in close cases in which the confidential or privileged nature of the email is not clearly apparent on the face of the email.  Those disclaimers should be sparingly used, appear at the beginning rather than the end of the email,  and state that information in the email is confidential or privileged only when it really is. That way, unintended recipients might really sit up and take notice when they see privileged and confidential declared in an email.

This was originally published on November 17, 2008. It was (lightly) revised and re-published on February 21, 2014.

Featured image: “confidentiality” from Shutterstock.

Ninety-Five

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These remarks by Eric Cooperstein were first given at the Hennepin County Bar Association‘s annual meeting in May, then printed in the July 2013 issue of The Hennepin Lawyer, member publication of the HCBA. I am re-publishing them here because we have talked about the problems with bar associations, wondered whether they are still useful, suggested ways for them to stay relevant, and more. This is one bar association president’s answer. — Ed.

When I meet lawyers and explain that my entire law practice is devoted to representing attorneys in ethics matters, I typically get one of two responses. Either they say “There must be a lot of unethical lawyers out there who need help,” or they say “I hope I never need to hire you.” I’m always a little taken aback. When people meet ophthalmologists, I doubt they say “I hope I never have glaucoma!”

Behind these comments there lies a hope that lawyers who have ethics issues are very different from the rest of us. In a very small percentage of cases—intentional thefts, felony convictions—that may be true. Those cases account for maybe one-tenth of one percent of all lawyers who are disciplined and often they are unrepresented in the discipline process.

For the most part, my clients are people very much like you. You might be surprised to hear that you have a lot in common with my clients. They are:

  • good lawyers;
  • often but not always solo and small firm lawyers;
  • they care deeply about their clients;
  • they are proud of the good work they do for clients;
  • they are typically in mid-career;
  • they tend to have busy practices; and
  • they have made some type of mistake.

One common mistake is accepting the representation of a client that the lawyer knew in her gut she should not have taken. Some mistakes are merely overlooking communications with the client or procrastinating on a file. Some mistakes are more significant than that: mistakes of judgment, mistakes of “perceived expediency.” A false statement, such as a lie to a client about whether the lawyer has worked on a matter. Good lawyers, like yourselves, are tortured by these kinds of mistakes.

I notice other patterns in the lawyers I represent. One that has been particularly striking to me is that oftentimes lawyers are isolated. This is a problem not just for solo lawyers, but also for lawyers who run small firms, and lawyers in larger firms. No matter what the practice setting, lawyers who are facing an ethics violation sometimes seem to have few other lawyers they can confide in. I have seen a similar pattern in lawyers who are marginalized within law firms for other reasons. It’s that sense of waking up one morning and not being quite sure who your friends are.

It seems also that the more serious the misconduct, the more isolated the lawyer is. In serious cases, there is an opportunity to offer character evidence to try to mitigate the disciplinary sanction. A recurring pattern is that my clients have difficulty identifying another lawyer in whom they have confided, who understands the respondent lawyer’s background and challenges, and can talk about the person behind the mistake.

On the other hand, I have also seen the power of true friendship. Lawyers who stand by their colleagues in spite of their mistakes. Those are the lawyers who are best able to get back up on their feet after they’ve taken a fall.

The practice of law is challenging, much more so than the public has any appreciation for. The deadlines, the trust clients place in us, the responsibility, the judgment calls, the multiple sets of rules, the pressure to generate business and collect fees—few other professions face such demands. Nobody understands a lawyer’s problems like another lawyer.

Despite how much we need each other, we have difficulty connecting. Increasingly, we spend our time in front of computer screens. Business development pushes us to spend our marketing time and dollars learning rain dances. And we love our “privacy.” Privacy, of course, was once described by Justice Brandeis as the “right to be let alone.”1 In practice it has become the right to seclusion.

At one time, most lawyers practiced in small towns. Lawyers knew each other, they knew each others’ families, and they had cases with the same lawyers time after time. There was little room for sharp practice. As decades passed we moved to big cities and become used to a certain anonymity. It is easy to be nasty to opposing counsel when you figure that the chances of seeing her on another case are slim.

After hearing this, it should not come as a shock to any of you that I have become a bar association evangelist. A bar association, particularly a geographically-based bar association, has a critical role to play in connecting lawyers and fostering a healthy profession. But we need to make some adjustments to the way in which we view our bar association.

For many years now, one of the primary rationales for belonging to a bar association is for “networking.” There is nothing wrong with networking; we all need to eat and a network of referral sources is the way one builds a strong law practice. In fact, I would argue that lawyers whose practices are referral-based are likely to be healthier lawyers than lawyers whose business generation is driven by advertising—or worse—paying for lead generation.

But networking, as a paradigm or a rationale for belonging to an organization, has a somewhat Machiavellian spin to it. When a lawyer networks, the event—the coffee, the lunch, or the committee meeting—is in some sense only a means to an end. And the end is rather self-focused. What will this contact do for me? A network is a web that we use to snare future clients. If lawyers can build a better web without a bar association, they’re gone.

Networking will always play a role in the life of a bar association but the networking paradigm is failing us as an association. Because not all lawyers generate business through referrals from other lawyers, they think their time is better spent building client-snaring webs through other organizations. And with respect purely to generating business, they are probably correct.

The paradigm I prefer is community. When one is participating in and trying to build a community, the means and the end are the same. The means may be similar to networking—particularly good networking, which focuses on meaningful connections rather than handing out business cards—but the focus in a community is on building the relationship for the sake of the relationship. I’m not having lunch with you because the marketing guru at my firm told me I had to have lunch with X number of people per month; I’m having lunch with you because I want to be a part of a larger community. When we build relationships we are giving as well as receiving.

In my church we have a metaphor for the community. We say the community is like an ocean that embraces people and buoys them up when they need it. Most of the time we are part of the ocean. Our role most of the time is to help others. When we face difficulties, we turn to the ocean to support us.

When lawyers are beaten down by the difficulties of practicing law, when they are feeling isolated, they don’t need a network, they need an ocean. Lawyers who are in trouble because they made a mistake need an ocean, not a network. Young lawyers without jobs, hanging out shingles, struggling to figure out how to practice law, don’t so much need a network as they need an ocean.

I realize that some of this is semantics. Good networking and community building may look very similar. Going to lunch or coffee with someone you’re genuinely interested in getting to know serves both ends. But I want to challenge the way you think of the bar association.

A networker looks at an event like a section meeting or the Judges Social or this annual meeting and says “Who will I see at this event? Will it help me generate business in the long run?” When you see yourself as part of a community, you might instead say to yourself “Who might be at this event who needs to see me? Who might need my friendship, my advice, or my mentoring? Who might be suffering? Who might be helped by reconnecting with me?”

Now, I don’t expect you to save a life every time you go to the Bar Benefit or attend a CLE. But I believe that this bar association will thrive if we can recapture a sense of community we had back in the day, when the bar was smaller and 100 lawyers would show up every Tuesday for lunch at the bar association office, just to get together. That sense of community is important if we are ever going to put to rest the perennial hand-wringing over the lack of professionalism and collegiality amongst lawyers.

Our bar has grown since the days of the weekly lunch and our demographics have changed. We can no longer just let people know lunch is available and expect a crowd of lawyers to show up every week. But we will be working this year on providing more ways for lawyers to connect with each other through the bar association in ways that resonate with them.

Other bar associations have experienced tremendous success with affinity groups that are not limited to providing CLEs about the latest changes to the title standards or the Rules of Civil Procedure. Books clubs, running clubs, lawyers who brew their own beer—we are going to try to find ways to foster connections amongst lawyers through the interests they already have. Some of these new groups will launch as early as this fall; see the announcement in this issue (on page 35) and in the weekly e-newsletter.

I am just the 95th in a long line of lawyers who cared enough about our colleagues and the profession to want to become the chief evangelist of the bar association. Whether the HCBA prospers depends not on some clever program I come up with that will cement my place in bar association history, marvelous though that might be, but on whether you will join me in thinking of our association as a community that exists primarily because of how much we value the community itself. I am looking forward to connecting and working with you in the coming year. Thank you.

(image: http://www.flickr.com/photos/evaekeblad/632538407/)


  1. Olmstead v. United States, 277 U.S. 438, 478 (1928) (Brandeis, J., dissenting). 

Avoid Ethics Complaints by Taking Notes

Despite lawyers’ efforts to get the best possible results for their clients, sometimes clients are dissatisfied. Their disappointment is often accompanied by finger-pointing; surely someone must be to blame for the outcome of the case besides the client or the opposing party. When the lawyer ends up in the path of that finger, the most common complaint is that the lawyer rarely, if ever, talked to the client and that on the few occasions the lawyer did talk to the client, the lawyer never let the client know what bad events were about to unfold.

For the lawyer who has tried to do everything right, defending against such allegations might be unpleasant but not threatening. Of course the lawyer talked to the client. Quite frequently, in fact. And yes, the lawyer is certain she warned the client about the possible outcome. The client was given the choice of how to proceed and, unfortunately, made a poor choice.

“Sounds great,” says the investigator from the attorney discipline office. “Can I see your notes of those conversations?” “Well, I’m not sure I have notes of every conversation . . . ”

Most of my practice is devoted to defending lawyers against allegations of unethical conduct. As a result, I often review my lawyer-clients’ files for the matters they have  handled. This includes not just the substantive documents, such as pleadings, correspondence, financial documents, etc., but also the parts of the file that one typically does not see in the course of discovery, such as the client questionnaires, the e-mails, the time records, and –hopefully– the notes.

In the last few months, however, finding notes in my lawyer-clients’ files has become the exception rather than the rule. I do not doubt my clients when they assure me that there were multiple phone calls with the client and at least a couple of meetings, but there are no specific records of those contacts: when they took place, what was said, how long they lasted. The ethics investigation is suddenly at risk of being reduced to a battle between “Did not!” and “Did so!” The disgruntled client may be regarded as having a legitimate gripe.

Why bother taking notes?

The value of taking notes should not be underestimated. Beyond providing a first line of defense against a client’s ethics complaint, notes can be helpful in tracking previous conversations with a client. The client does not then have to repeat information or suspect that the lawyer cannot remember the client’s case. For clients who challenge a bill or later demand a copy of the file, the notes fill in the gaps between written contacts with the client and show how attentive the lawyer was to the client’s case (under most states’ ethics rules, your notes are part of your clients’ files and belong to them, so avoid excessive doodling and gratuitous comments about your clients’ mental health). Your notes will also provide the chronology of events on which you may need to rely when explaining your decision to withdraw to the client or the court.

Contingent and flat fee lawyers who eschew time keeping seem to be more prone to avoiding note-taking, perhaps a byproduct of their attempts to streamline their practices. Lawyers who do not keep time records are probably in greater need of good notes than lawyers who bill hourly and can use their timesheets to track very brief conversations with clients, some of which may be written-off. The inconvenience of taking notes while talking to clients from a cell phone while walking, driving, or waiting for some other appointment to begin may have led many busy lawyers to get out of the practice of taking notes. Whatever the reason, the time lawyers save on the front end can come back to bite them on the other.

Making record-making a habit

Note-taking should be a habit, hopefully one developed early in a law practice. Personally I think that hand-written notes are the most efficient way to make a record of a conversation with a client, but it doesn’t matter whether the notes are handwritten, entered into your practice management software, typed into a Word document, scrawled on your iPhone or iPad, or dictated to your legal assistant. The goal is to create a record of the date and time that you talked with the client and, even for short conversations, some indication of the subject matter that was discussed. Lawyers should do the same for conversations with opposing counsel, witnesses, court clerks, prospective clients, supervising lawyers, and so on.  If you are talking, there should be a notepad or a keyboard in front of you.

In addition to the client’s name, the date, and at least some brief description of what the conversation, it is a good idea to note whatever advice or instructions the you gave the client. It is also wise to spend an extra few minutes after the conversation ends to fill in details you did not have time to record and clarify on paper the advice you orally gave the client. At the end of the conversation or meeting, I typically also record in the margin the length of the conversation, usually in tenths of an hour. This can help corroborate the fees you charged a client and refresh your recollection years later about the length of a conversation.

Taking notes is a lot like wearing a seat belt: 99% of the time it probably doesn’t matter whether you do it or not but it is the other 1% that you are preparing for. Take notes. The license you save may be your own.

(Photo: http://flic.kr/p/8HNqQi)

Wash That Client Right Out of Your Hair

Many of the posts on Lawyerist focus on how to get good clients; we spend very little time talking about how to get rid of bad clients. As a general rule, the goal is to keep the clients around once they hire you. Nevertheless, for some clients, the lawyer’s advice should be limited to “don’t let the door hit you on the way out.”

Lawyers are typically reluctant to withdraw from representing clients. Several of the most important principles of lawyer ethics —confidentiality, avoidance of conflicts, holding funds in trust— are built on the idea of loyalty to the client. Many old school lawyers believe that once you agree to represent a client, you stick with them until the bitter end, even if you are the one left with the sour taste in your mouth.

The Model Rules of Professional Conduct, however, do not require a lawyer to go down with the client’s ship. To the contrary, Rule 1.16(b), which has been adopted by most jurisdictions, says that a lawyer may withdraw from representing a client if the “withdrawal can be accomplished without material adverse effect on the client.” Note that the rule does not require that there be no adverse effect on the client at all, just that the effect not be material. Presumably, every withdrawal before a matter is completed will have some adverse effect on a client – the hassle of finding a new lawyer, getting that lawyer up to speed, some additional cost to the client, etc.

Often, by the time the lawyer gets to the point of wanting to withdraw, the matter will have progressed far enough that there will be some material adverse effect on the client. In those cases, the lawyer must to look to the other subparts of Rule 1.16(b) to see if the lawyer‘s reason for withdrawing is sufficient to overcome the material prejudice to the client (and, of course to determine whether any presiding court will allow the lawyer to get out). Conflicts of interest, client fraud, and the client’s refusal to cooperate with the lawyer may fall into this category. But there are many cases in which a lawyer has discretion to decide that his or her time would be better spent elsewhere. Here are a few examples:

Do you hear that barking sound? When that car accident case came in, it sounded great. Your injured client was the breadwinner in the family, the other driver was clearly at fault, and there was lots of insurance coverage to go around. As you started gathering information, however, you learned about the client’s pre-existing medical conditions, spotty work history, faulty recollection, and fondness for the drink.

Sure, you could stick with the client and try to get the best deal that you can under the circumstances, assuming that you can readjust the client’s expectations from a high six-figure recovery to something less than the cost of a new car. It is not unusual though to see a lawyer avoid a tough conversation with the client, hope that the client’s injuries will “mature” (a real consideration in some cases, less so in others), and let the file collect dust in a remote corner of the office. These are the types of files that turn into ethics complaints for neglect or non-communication. Instead, if the case is pre-suit and not close to a statute of limitations deadline, you can withdraw.

Sorry, I forgot my checkbook. The first few months of the attorney-client relationship are critical for figuring out whether the client is going to pay the lawyer’s bills. Human beings are remarkably consistent creatures. Clients who pay their bills within a week or two of when they get them are likely to keep doing so. Clients who need three written reminders and a phone call, or who promise to pay and do not follow through, will maintain that pattern throughout your representation. When clients fall behind on their bills, lawyers may become frustrated or angry and cross some ethical line in trying to collect their fees.  Let the next lawyer be the one who ends up representing your client for free. Get out before the receivables start aging.

Talk to the hand. You (hopefully) have several dozen clients. Your client has one lawyer. Some clients are oblivious to this imbalance. Combine that with the high emotions of a custody battle and you may get a client who calls you multiple times a day, demanding action against an estranged spouse. Emotional, needy clients not only eat away at your time but they drain the energy of your staff and may even be abusive when they do not get what they want. Sure, there are ways to manage your client communications. Some clients though are so demanding that they will overwhelm you. Withdraw from representing the problem clients and save your energy for the rest of your docket.

If you do decide to withdraw, keep the explanation simple. Avoid the urge to provide the client with a laundry list of his or her faults. And be generous in refunding fees. That way you look less like the stereotypical greedy lawyer and the client has some funds to try to find a new lawyer, likely one who is less savvy than you are about choosing which clients to represent.

Wash That Client Right Out of Your Hair is a post from Lawyerist.com. The original content in this feed is © 2013 Lawyerist Media, LLC. This feed is provided for private use only and may not be re-published.

Pssst, Buddy—Wanna Buy a Client?

Running a successful law practice is all about getting clients. One way is by building a referral network, a frequent topic on Lawyerist. Another way is by advertising, such as in the yellow pages.

As traditional advertising methods wane, lawyers are getting excited by new methods of attracting clients through the internet. All those potential clients out there, yearning to find the lawyer of their dreams — all they need is a little encouragement. A little channelling. A system of connecting clients with lawyers. And lawyers will be eager to pay to have pre-screened clients sent their way – as long as they do not violate any ethics rules.

The general ethics rule is that a lawyer can not pay someone for referring a particular client or case. In fact, not only is a lawyer prohibited from paying but in most jurisdictions a lawyer cannot give “anything of value” to someone who recommends a lawyer’s services. No tickets to the Superbowl, no bottles of single-malt, not even a Starbucks gift card.

So unseemly. As draconian as that sounds, the practice of law has actually come a long way in its attitudes about advertising. Old school lawyers abhorred advertising as beneath the dignity of the profession. When SCOTUS declared in Bates v. Arizona (1977) that lawyers had a First Amendment right to advertise, then yellow pages ads, billboards, television commercials, local newspaper ads, little league jerseys, etc., all became fair game. None of these traditional advertising methods violates any rules on paying for clients because the advertisement is not targeted at a particular person with a specific legal problem. The fee is paid to the advertiser regardless of whether anyone ever reads the ad or contacts the lawyer. In short, the connection between the payment for the ad and the contact with a prospective client is attenuated at best.

Click here. Pay-per-click advertising, such as Google Adwords, presents a slightly more difficult question. In its simplest form, with Adwords an advertiser (such as a lawyer)  targets the words that consumers might search for using Google (e.g. “ethics lawyer”). When someone searches using those words, the lawyer’s 4-line advertisement may show up above or to the right of the search results. The lawyer does not pay for the ad to appear but does pay when someone clicks on the lawyer’s ad and then is whisked away to the lawyer’s website.

So, the lawyer pays for clicks. Sounds pretty close to paying for each referral. But Google has no idea whether the clicker needs legal services, is just curious, or is bored at the office. Nor does Google guarantee a certain number of clicks or that the clickers will actually turn into paying clients. In the end, it looks more like targeted advertising than paying for clients.

Total Trouble? Several websites take targeting one step further and actually try to connect individual lawyers with individual clients. These on-line referral services, like Legal Match and Total Attorneys, invite prospective clients to submit information about their legal issues and then make that information available to lawyers who practice in the client’s geographical area. The lawyers pay for having access to these referrals.

Each service tries to avoid the ban on paying for referrals in its own way. With Legal Match, prospective client (PC) inquiries are routed to lawyer subscribers based on the lawyer’s practice area and location. The lawyer pays a flat subscription fee for the service. Presumably there are serveral lawyers for each location and practice area, so multiple lawyers are likely competing to respond to the same PCs (if there was only one lawyer, that would seem a lot more like paying for referrals). Several jurisdictions permit this type of service — Legal Match provides links to several ethics opinions.

Total Attorneys comes even closer to the line. Their referral program promises “geographical exclusivity” (only one attorney per practice area in a specific location) and “pay for performance” (the lawyer pays when Total Attorneys “produces results,” not a flat fee). The “performance” the lawyer pays for appears to be tied to new client contacts, not actual agreements to represent clients. Their scheme offended at least one gadfly who allegedly filed complaints against Total Attorneys lawyers in 47 jurisdictions for violating the rule against paying for referrals.  So far, it appears that the complaints in about a half-dozen of those jurisdictions have been dismissed, with Connecticut being the most recent. Whether we will ever find out the dispositions of the other 40+ complaints remains to be seen.

A final oddity in this area is that many states’ ethics rules allow nonprofits, such as bar associations, to operate referral services which charge attorneys directly for taking cases referred to them or require the lawyers to share the fees they receive with the bar association. Apparently, when a nonprofit is paid for a referral, it’s a public service; when anyone else receives a payment, it’s a pox upon the public interest.

As technology continues to change our lives, lawyer advertising will likely continue to change as well. If you’re thinking of being the first on your block to try a new method of attracting clients through the internet, make sure you are buying advertising, not clients.

Pssst, Buddy—Wanna Buy a Client? was originally published on Lawyerist.com.

Pssst, Buddy—Wanna Buy a Client?

Dark Alley Pssst, Buddy—Wanna Buy a Client?Running a successful law practice is all about getting clients. One way is by building a referral network, a frequent topic on Lawyerist. Another way is by advertising, such as in the yellow pages.

As traditional advertising methods wane, lawyers are getting excited by new methods of attracting clients through the internet. All those potential clients out there, yearning to find the lawyer of their dreams — all they need is a little encouragement. A little channelling. A system of connecting clients with lawyers. And lawyers will be eager to pay to have pre-screened clients sent their way – as long as they do not violate any ethics rules.

The general ethics rule is that a lawyer can not pay someone for referring a particular client or case. In fact, not only is a lawyer prohibited from paying but in most jurisdictions a lawyer cannot give “anything of valueâ€� to someone who recommends a lawyer’s services. No tickets to the Superbowl, no bottles of single-malt, not even a Starbucks gift card.

So unseemly. As draconian as that sounds, the practice of law has actually come a long way in its attitudes about advertising. Old school lawyers abhorred advertising as beneath the dignity of the profession. When SCOTUS declared in Bates v. Arizona (1977) that lawyers had a First Amendment right to advertise, then yellow pages ads, billboards, television commercials, local newspaper ads, little league jerseys, etc., all became fair game. None of these traditional advertising methods violates any rules on paying for clients because the advertisement is not targeted at a particular person with a specific legal problem. The fee is paid to the advertiser regardless of whether anyone ever reads the ad or contacts the lawyer. In short, the connection between the payment for the ad and the contact with a prospective client is attenuated at best.

Click here. Pay-per-click advertising, such as Google Adwords, presents a slightly more difficult question. In its simplest form, with Adwords an advertiser (such as a lawyer)  targets the words that consumers might search for using Google (e.g. “ethics lawyerâ€�). When someone searches using those words, the lawyer’s 4-line advertisement may show up above or to the right of the search results. The lawyer does not pay for the ad to appear but does pay when someone clicks on the lawyer’s ad and then is whisked away to the lawyer’s website.

So, the lawyer pays for clicks. Sounds pretty close to paying for each referral. But Google has no idea whether the clicker needs legal services, is just curious, or is bored at the office. Nor does Google guarantee a certain number of clicks or that the clickers will actually turn into paying clients. In the end, it looks more like targeted advertising than paying for clients.

Total Trouble? Several websites take targeting one step further and actually try to connect individual lawyers with individual clients. These on-line referral services, like Legal Match and Total Attorneys, invite prospective clients to submit information about their legal issues and then make that information available to lawyers who practice in the client’s geographical area. The lawyers pay for having access to these referrals.

Each service tries to avoid the ban on paying for referrals in its own way. With Legal Match, prospective client (PC) inquiries are routed to lawyer subscribers based on the lawyer’s practice area and location. The lawyer pays a flat subscription fee for the service. Presumably there are serveral lawyers for each location and practice area, so multiple lawyers are likely competing to respond to the same PCs (if there was only one lawyer, that would seem a lot more like paying for referrals). Several jurisdictions permit this type of service — Legal Match provides links to several ethics opinions.

Total Attorneys comes even closer to the line. Their referral program promises “geographical exclusivity� (only one attorney per practice area in a specific location) and “pay for performance� (the lawyer pays when Total Attorneys “produces results,� not a flat fee). The “performance� the lawyer pays for appears to be tied to new client contacts, not actual agreements to represent clients. Their scheme offended at least one gadfly who allegedly filed complaints against Total Attorneys lawyers in 47 jurisdictions for violating the rule against paying for referrals.  So far, it appears that the complaints in about a half-dozen of those jurisdictions have been dismissed, with Connecticut being the most recent. Whether we will ever find out the dispositions of the other 40+ complaints remains to be seen.

A final oddity in this area is that many states’ ethics rules allow nonprofits, such as bar associations, to operate referral services which charge attorneys directly for taking cases referred to them or require the lawyers to share the fees they receive with the bar association. Apparently, when a nonprofit is paid for a referral, it’s a public service; when anyone else receives a payment, it’s a pox upon the public interest.

As technology continues to change our lives, lawyer advertising will likely continue to change as well. If you’re thinking of being the first on your block to try a new method of attracting clients through the internet, make sure you are buying advertising, not clients.

lawyeristlab banner Pssst, Buddy—Wanna Buy a Client?

Pssst, Buddy—Wanna Buy a Client? is a post from the law firm marketing blog, Lawyerist.com

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A Family and Friends Plan for Your Law Firm

family dinner11 A Family and Friends Plan for Your Law FirmA family member or close friend calls you one day with a “quick” question. Seems she has a dispute with a neighbor or she just got denied a promotion or she needs to tell the renter of her duplex to stop smoking in his unit. She knows you are really busy but was wondering if you would mind looking into it or just writing a letter or making a phone call for her. She hates to bother you but she does not know any other attorneys and really needs some help with this problem.

So, do you agree to help? The answer differs for each attorney. Some swear against representing friends and family on the theory that no good deed goes unpunished. If the case turns sour, you lose the friendship or become a persona non grata at family get-togethers. Plead ignorance as to that area of the law, refer the matter out, and keep your nose clean.

Some lawyers, on the other hand, feel it is their obligation to help out a family member or friend. Remember when Joe helped you re-roof the garage? How about when Stacey brought your family meals for a week when your spouse was hospitalized? And you are unwilling to write a simple letter? Loser.

Basics. Let us say you decide to help this person. Keep in mind that regardless of whether she is going to pay you, she is your client. In fact, she probably became your client during the first phone call or the conversation in the family room during Thanksgiving dinner. She asked for legal advice and provided you with confidential information, you listened, nodded your head, made some noncommittal remarks, and did not give her any sign she should stop talking. She’s a client. Make sure you treat her like one.

Representation agreements. In most jurisdictions, ethics rules require representation agreements only for contingent fee matters or advance payment of availability or flat fees that will not be placed in a trust account. Nevertheless, a representation agreement is a good idea for all client engagements, including those you may do for free. Legal Aid and other pro bono lawyers always have their clients sign representation agreements. Even where no money is being paid, the client should understand the scope of the representation, what obligations the client has to cooperate with the lawyer, and how the client or lawyer may end the representation. This is no less applicable to friends and family (F/F) than it is to other clients. Signing a representation agreement also shows that you are taking the matter seriously and you expect the same from your clients.

Fees. If you do not charge the F/F a fee, you risk that if the matter becomes more complicated than you anticipated, you may become resentful that you are working for free, do a poor job, or let the case “mature” under a pile of files that do generate fees. Charging a fee, however, may give the impression that you are greedy and deserve to be the butt of lawyer jokes. See paragraph three, above.

One compromise is to agree with the F/F that you will provide them with several hours of legal services for free. After that first two or four or whatever hours, you will expect them to pay your bills. If your rate is $250 an hour, that is like giving them $500 or $1,000 right off the bat. Difficult for them to later say you did not treat them fairly when you gave them that much in free services.

You could be more elaborate and say that after the first four hours free, you will bill at one-half your rate for the next X hours, and then the full rate after that. However it is done, the idea is to convey to the F/F that your time is valuable, that they have to participate as well, and that you do not intend to make their very irritating case your life’s work unless they are willing to pay for it. Even if you would have felt guilty about charging your best friend for legal work, you are likely to feel less guilty after you have put in a number of hours free. The invoices also provide a permanent record of what work you did for them, which may help avoid recriminations later.

Getting out. Having an exit strategy is a particularly good idea when representing friends and family. Your personal relationship may lead you to get in deeper than you anticipated, with no good way to extract yourself once you are up to your hips in your client’s stuff. The time to think about getting out is at the beginning, when you are drafting the representation agreement. Think carefully about what the scope of your services will be and how to define when you will be done.

Confidentiality. Remember, no matter what happens, all of the information you receive during the representation of friends or family is confidential. No matter how badly it blows up, or how you are maligned in your circle of friends, or who whispers about you in grandma’s pantry, keep your mouth shut. No name-clearing, no setting the record straight.

Hopefully, if you take some of the steps outlined above, you will maintain long and happy relationships with your family and friends. At least that’s the plan.

(photo: toastforbrekkie)

lawyeristlab banner A Family and Friends Plan for Your Law Firm

A Family and Friends Plan for Your Law Firm is a post from the law firm marketing blog, Lawyerist.com

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Emailing clients at work: privilege trumps employer policy

Typing on keyboard11 Emailing clients at work: privilege trumps employer policyA few months ago, I posted a warning to lawyers about emailing clients at work. My concern was based in large part on a NJ district court decision that found an employee had waived the attorney-client privilege for emails that she sent to her attorney while using her work computer. Although the emails had been sent using a Yahoo! account, the employer found images of the emails on the employee’s hard drive.

Well, the New Jersey Court of Appeals has quickly reversed the decision. Although the opinion starts off as a criticism of the district court for not properly evaluating the factual dispute over whether the employer had properly adopted its computer usage policy, the appellate court went on to proclaim the preeminence of the attorney-client privilege over employers’ computer usage policies.

The opinion contains quite a few quotables regarding the extent of an employee’s privacy interest in the information on their work computer. For example:

“A computer in this setting constitutes little more than a file cabinet for personal communications. Property rights are no less offended when an employer examines documents stored on a computer as when an employer rifles through a folder containing an employee’s private papers or reaches in and examines the contents of an employee’s pockets.â€� The court also compares reviewing an employee’s emails with “the highly impermissible conduct of electronically eavesdropping on a conversation between plaintiff and her attorney while she was on a lunch break . . . .

“We thus reject the philosophy buttressing the trial judge’s ruling that, because the employer buys the employee’s energies and talents during a certain portion of each workday, anything that the employee does during those hours becomes company property.â€�

Privilege and privacy trump the employer’s computer usage policy, concludes the NJ Court of Appeals.

But the Court was not quite done with the issue. Next it turned to the employer’s attorneys, who viewed images of the allegedly privileged emails that had been stored on the hard drive of the employee’s computer. The Court invoked a relatively new Rule of Professional Conduct, Rule 4.4(b), which reads (in NJ and many other states) “[a] lawyer who receives a document and has reasonable cause to believe that the document was inadvertently sent shall not read the document or, if he or she has begun to do so, shall stop reading the document, promptly notify the sender, and return the document to the sender.” The Court says the defense attorneys violated this rule when they failed to notify the employee’s lawyers that they had found images of the emails on the hard drive.

The Court is kind of stretching here to tag the attorneys for conduct that offends the spirit, but perhaps not the letter, of the rule. The defense attorneys viewed the hard drive images of the emails after the plaintiff filed her lawsuit. Seems like a stretch to call those images “inadvertently sent� documents. The defense attorneys’ conduct seems more akin to searching for metadata in documents, the ethics of which are still in dispute (and about which NJ has not taken a particular position). A prudent lawyer, however, reviewing paper documents clean out of a fired employee’s office, should probably not read letters that appear on their face to have been sent from the employee to his or her attorney. The NJ Court apparently applies the same reasoning to electronic information.

In NJ at least, the pendulum has swung back in favor of protecting the attorney-client privilege in emails sent through a work computer. Until, perhaps, the NJ Supreme Court takes its swipe at the issue.

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Emailing clients at work: privilege trumps employer policy is a post from the law firm marketing blog, Lawyerist.com

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Facebook ethics: it’s not about Facebook

facebook11 Facebook ethics: it’s not about FacebookThere is a good deal of postulating in the blogosphere about the types of ethical trouble a lawyer can get into by using social media. The nattering nabobs of negativism warn us to be careful when using social media like Facebook or Twitter, lest we unwittingly disclose client confidences, improperly solicit new clients, or misrepresent facts or law.

Although there is precious little evidence that any lawyers have gotten themselves in ethical hot water using social media, the Philadelphia Bar Association recently gave its own example of the potential dangers when its Professional Guidance Committee issued Opinion 2009-02 (March 2009).

The premise for the opinion is straightforward: a lawyer wanted to know if he could have a non-lawyer assistant send a Facebook “friendâ€� request to a witness for the opposing party in a piece of litigation. The lawyer apparently thought there were juicy tidbits to be found on the witness’s Facebook  page (or at least information with impeachment value) but did not think the witness would accept a friend request directly from the lawyer (no surprise there—he had just recently taken her deposition). But the lawyer thought a friend request from an otherwise unknown assistant stood a good chance of being accepted.

The Philly opinion frowned on the lawyer’s proposal. It called it a “highly material fact� that the witness would be making a friend request without disclosing the real reason for the request. Inducing the witness to respond favorably without that important fact would be a deception traceable to the lawyer, violating several ethics rules.

Whether one agrees with the opinion or not ( I did a double-take the first time I read it), the opinion is not really about Facebook. It actually tackles a difficult subject in legal ethics known as “dissembling� or “pretexting� (which has nothing to do with sending text messages). The terms refer to situations in which a person, particularly a lawyer or the lawyer’s subordinate, pretends to be someone he or she is not for the purpose of obtaining information.

As noted in the Philly opinion, such conduct is permitted in many jurisdictions for the limited purposes of civil rights investigations (think fair-housing testers) or for patent infringement cases. Some jurisdictions, in contrast, have tried to outlaw pretexting entirely (see the authorities cited in the Philly bar opinion).

When one takes a step back from the Philly opinion and looks at it in the context of the larger legal issue, it becomes clearer that while it is certainly possible for a lawyer to violate an ethics rule while using social media, it is the lawyer’s conduct, not the medium, that will likely be at the heart of the issue. An unthinking lawyer who posts too quickly on Facebook or Twitter is not that unlike a lawyer who speaks too loudly about a client matter in a crowded elevator or puts an ad in the yellow pages that inflates the lawyer’s credentials.

The old maxim that one should think before he or she speaks (or tweets) applies no less to the internet than it applies to other forms of communication.

If you are new to social networking, check out our Facebook 101 post.

lawyeristlab banner Facebook ethics: it’s not about Facebook

Facebook ethics: it’s not about Facebook is a post from the law firm marketing blog, Lawyerist.com

 

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