Calif. lawyers can operate VLOs in the cloud

Nicole Black, The Daily Record Newswire

With the rapid advancements in technology and a continued ailing economy, it’s no surprise that enterprising lawyers are regularly finding new ways to serve their clients more efficiently and affordably. Of course, innovating in the delivery of legal services can sometimes trigger ethical issues and as a result, lawyers will often query their state and local ethics committees about the efficacy of their ideas.

As a result, in recent years, a number of state and local bar associations have issued opinions on the ethical issues related to using cloud computing services to store confidential client data.

One of the most recent opinions was issued by the State Bar of California Standing Committee on Professional Responsibility and Conduct. I wrote about the proposed opinion last year, and the committee has now released the final opinion, Formal Opinion No. 2012-184.

At issue was this question: “May an attorney maintain a virtual law office practice (VLO) and still comply with her ethical obligations, if the communications with the client, and storage of and access to all information about the client’s matter, are all conducted solely through the internet using the secure computer servers of a third-party vendor (i.e., “cloud computing”)?”

At the outset, the committee addressed the cloud computing technology that the inquiring attorney intended to use in her VLO. The committee noted that because of the “the wholly outsourced Internet-based nature of our hypothetical VLO, special considerations are implicated, which require specific due diligence on the part of our VLO practitioner.”

Next the committee explained that although the inquiring attorney was not required to become a technology expert in order to ensure that client confidentiality was maintained when outsourcing the storage of client data to the cloud computing provider, she nevertheless had an obligation to take reasonable steps to understand — or to consult with someone who understood — the basic technology provided by her cloud vendor.

Of note, the committee determined that the inquiring attorney “should determine that the VLO vendor selected by her employs policies and procedures that at a minimum equal what attorney herself would do on her own to comply with her duty of confidentiality.”

Issues that an attorney must consider when assessing the vendor’s services include: 1) the vendor’s credentials, 2) the steps taken by the vendor to secure data, 3) whether the data stays within certain geographical boundaries, 4) the extent to which the attorney is able to supervise the vendor, and 5) the terms of service set forth in the contract with the vendor.

The committee also stressed that the attorney had a continuing duty to periodically reassess the services provided by the vendor. And, importantly, the committee adopted the majority position and concluded that client consent to store confidential client data in the cloud under the set-up described by the inquiring attorney was unnecessary — as long as the attorney appropriately exercised due diligence in vetting the cloud vendor.

Next, the committee turned to the attorney’s duty of competency when delivering legal services solely via an online channel. The committee explained that in order to meet her ethical obligations, the inquiring attorney must: 1) take steps to ensure that her intake system obtains necessary information from the potential client sufficient to allow the attorney to determine whether she is able to competently provide the legal services requested, 2) take steps to ensure that the client truly understands the legal concepts involved and the advice given, 3) take steps to ensure that the client is reasonably informed about case-related developments, including confirming that the client is receiving information posted to the online portal, 4) ensure that the client has access to technology which will permit use of the online portal and that the client fully understands how the technology works, 5) ensure that she complies with her ethical obligations regarding the scope of her representation as enumerated in Rules 3-1110 and 3-700, and 6) take reasonable steps to ensure that she appropriately supervises subordinate attorneys, and non-attorney employees or agents.

Also important was the committee’s final conclusion — that “(t)he Business and Professions Code and the Rules of Professional Conduct do not impose greater or different duties upon a VLO practitioner operating in the cloud than they do upon attorneys practicing in a traditional non-VLO.”

In other words, ethical obligations to clients remain the same, regardless of whether legal services are delivered via a brick and mortar office or a VLO; the medium does not change the ethics.

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Nicole Black is a director at MyCase.com, a cloud-based law practice management platform. She is also of counsel to Fiandach & Fiandach in Rochester and is a GigaOM Pro analyst. She is the author of the ABA book “Cloud Computing for Lawyers,” co-authors the ABA book “Social Media for Lawyers: the Next Frontier,” and co-authors “Criminal Law in New York,” a West-Thomson treatise. She speaks regularly at conferences regarding the intersection of law and technology. She publishes three legal blogs and can be reached at niki@mycase.com.

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