ABA ethics proposals involving technology could impact small and solo firm lawyers Commission says there is much 'misunderstanding'

By Sylvia Hsieh

Dolan Media Newswires

BOSTON, MA--The ABA Ethics Commission 20/20 met recently to discuss a package of proposals that are likely to affect small and solo law firms.

At the end of last year and earlier this year, the commission issued a series of papers that address the impact of technology and globalization on the practice of law.

Some small firm and solo attorneys have sounded alarms about the fact that the ABA ethics commission is even considering certain issues, such as marketing with social media and cloud computing. They are concerned that the ABA may recommend changes to ethics rules that could curb the use of tools that have been instrumental in allowing small firms to compete with big ones.

But Andrew M. Perlman, chief reporter for the commission, said there's no cause for panic.

"I think there's a lot of misunderstanding," said Perlman, a professor at Suffolk University Law School in Boston. "In no way is the commission trying to put the kibosh on these technologies. ... Nobody, not a single person, on the commission is looking to prohibit lawyers' use of social media or the Internet to market themselves or to build their practices."

Still, solo lawyers, like Carolyn Elefant of myshingle.com, are worried that the commission may come up with rules that "would be a little bit too restrictive and done in a way that impose so many obligations that it either increases the costs for solos or just makes it seem so complicated and onerous that it deters them from adopting" new technological tools.

The commission has not taken any formal position on these issues and is still seeking comments. It will meet again at the ABA annual meeting in August and is likely to finish draft reports in May 2012, which will be voted on in August 2012, according to Michael Traynor, a co-chair of the commission.

Silver lining around cloud computing

The use of cloud computing and its implications for client confidentiality is one of the issues on the commission's agenda.

In its issues paper, the working group for the commission raised some eyebrows when it called cloud computing "arguably a form of outsourcing," which would make it subject to rules about oversight of non-lawyers.

"Is my IOLTA account outsourcing? Is my telephone service outsourcing?" asked Elefant. "To treat [cloud computing as] something where oversight is required seems silly to me. I hope they don't take that approach."

Elefant noted that the commission has made a distinction between "active outsourcing," such as handing over files to an assistant, which would require more oversight, and "passive outsourcing," such as uploading files, which would require less oversight.

The commission is exploring the idea of creating a website that gives lawyers guidelines or "good practices" when looking for a cloud computing provider.

"Are there firewalls [and] system integrity? Are there protections against unauthorized access? Where are the servers located? There would be a set of questions for lawyers to look at," said Traynor, an attorney at Cobalt in Berkeley, Calif. He said that the website would track evolving standards in the cloud computing industry and state ethics opinions.

But meeting these guidelines would not be safe harbors or best practices, Traynor said.

A similar website is being considered for standards for the outsourcing of legal work.

Elefant also expressed concern that the ABA could charge lawyers to get onto such a website, adding another barrier for small-firm lawyers on a tight budget.

But Perlman said plainly, "No, there are no plans to charge for that."

Another question on the table is how existing ethics rules apply to lawyers' use of "Internet-based client development tools," including websites, blogs, Facebook, LinkedIn, Twitter and "pay-per-click" advertising.

Elefant, an early and successful adopter of social media, is afraid that the commission members don't have enough familiarity with social media and social networking tools to issue sound proposals.

"Only three people on the committee have ever used social media," said Elefant, who tweeted about the commission's meeting in Washington, D.C.

But Perlman again sought to reassure lawyers that "the proposals are really clarifying changes rather than revolutionary or new restrictions."

For example, he said there is general agreement that a lawyer shouldn't engage in false or misleading statements, and the proposals will merely clarify how those rules apply when using social media.

On the pay-per-click issue, Perlman said the commission is not looking to ban "pure pay- per-click advertising like Google AdSense," but has not yet reached a conclusion about similar advertising models, such as totalattorneys.com.

"If no state has found a particular form of online marketing is unethical, I would be very surprised the commission would conclude it should be prohibited," Perlman said.

Although the deadline for comments on this topic was December 2010, the commission "remains interested in comments" and "everyone's comments will be reviewed," said Marcia Kladder, director of policy & programs for the ABA's Center for Professional Responsibility.

At the commission meeting, general counsel representing large law firms suggested an exception to the conflict of interest rules for "sophisticated clients," such as large, multistate public corporations. Their proposal would relax conflicts rules in a number of ways, including allowing law firms to get consent in advance to waivers of future conflicts and permitting firms to take on new matters adverse to a sophisticated client but not substantially related to prior work without consent, as long as the firm doesn't hold confidential information and screens off lawyers working on the new matter.

Elefant opposes such an exception because small and solo firms often get business when a large firm is conflicted out.

But Traynor said he does not anticipate the commission adopting such a broad change that would make a distinction between sophisticated and unsophisticated clients.

"We are certainly sympathetic to the mobility of lawyers to serve clients, which is even more important for solo and small firm practitioners," he said.

Technology has erased many borders, and the commission is addressing the concerns of lawyers about current restrictions on multijurisdictional practice.

One model the commission has on the table is a Colorado rule that permits a lawyer licensed in another jurisdiction to practice in the state on a temporary basis as long as the lawyer doesn't take up residence in Colorado.

The commission is also considering an "admission on motion" rule that would make it easier for lawyers to get admitted to an out-of-state jurisdiction via a motion.

However, such proposals would not apply where existing rules require an attorney to be admitted pro hac vice.

Published: Wed, May 18, 2011

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