Share

Share this on Twitter Share this on Facebook Share this on Linked In Share this by Email
 
 

Technology offers an E-ticket to a new world of legal practice

By Diane Karpman

Diane Karpman
Diane Karpman

Last month at the American Bar Association’s Midyear Meeting in Orlando, President Carolyn Lamm recognized that American lawyers no longer practice just on Main Street or Wall Street. Many lawyers, including those in small towns, are engaged in cross-border transactions. This is accomplished with great ease, due to the profound impact of technology generally embraced by the profession during the last couple of decades.

As an example of our rapidly advancing technology, this is the first month of the electronic publication of the California Bar Journal. Clearly, if you are reading this column, you are not one of the estimated 30,000 lawyers lacking an e-mail address, which is required as of February 1. (California Rule of Court 9.7)

The “standard of conduct,” articulated in the California Rules of Professional Conduct is an immutable and static expression of our ancient fiduciary duties. The “standard of care” is the obligation to exercise ordinary skill and knowledge possessed by other lawyers similarly situated. The standard of care is transitory, dynamic and fluid. The enactment of Rule 9.7 demonstrates a change in the standard of care. If lawyers are required to receive information electronically, that inferentially suggests use of the Internet, which means that all lawyers will possess access to the robust information highway of the Internet.

Rule 9.7 demonstrates the impact of technology on the practice of law in California, but it’s myopic to think that it is limited to our state. Technological changes in practice coupled with globalization are having a dramatic effect on the profession. Thomas Friedman said “the world is flat.” So, too, is the practice of law.

The American Bar Association has established a new commission to address the impact of technology and globalization on the practice of law. The Ethics 20/20 Commission, co-chaired by lawyers Michael Traynor of California and Jamie Gorelick of Washington, D.C., is supposed to figure this out in three years, although the name (20/20) suggests something longer.

The commission will retain the core values of public protection, confidentiality, loyalty and self-regulation. However, we need to examine how to reconcile our core values with the impact of technology and globalization.

Some of the issues involve “multidisciplinary practice” (lawyers partnering with other professionals), now being labeled as “alternative business structures.” Washington, D.C., has allowed non-lawyers to have ownership interests in law firms for many years. Last year, in New South Wales, a class action law firm became a publically traded entity. Are we economically disadvantaged by rules restricting the ownership of firms to lawyers, which results in thinner capitalization?

Some of our regulations may disadvantage U.S. lawyers, not creating a “level playing field in a global legal services marketplace” (Preliminary Issues Outline, ABA Commission on Ethics 20/20, abanet.org/ethics2020/outline.pdf). In California, we have full-time prosecutors and judges. What type of regulation exists in Nepal or other countries? If they are not as regulated, we may be in a serious anti-competitive position in the legal marketplace.

Should those “marketplace” concepts have an impact on our fundamental duties? New York, New Jersey and some countries regulate law firm “entities” to enhance client protection, so that idea will be revisited. There are a few lawyers who suggest that state bars have never seen conduct that did not merit regulation (not California).

Another issue is multijurisdictional practice. It seems antithetical to client needs for 50 state bars (in a global market) to limit where and how we can be of service to our clients. Lawyers are solely permitted to practice in states where they are admitted, but what about foreign lawyers? Or U.S. lawyers going to foreign countries?

How do lawyers protect confidentiality when outsourcing to Bangladesh? Or when using “cloud computing” where client files can be stored on the Internet? How should we address the fact that the European Union affords clients greater rights to privacy and data protection than in the U.S.? What rules or regulations apply in international arbitrations? Would it be different if the lawyer’s client is not a U.S. person or entity?

Do the rules apply to social networks? What about Twitter, with its famous 140 characters limitation? The onerous advertising disclaimers of hyper-regulatory states could just about consume all the characters for a tweet.

In addition to a laundry list of other topics, the commission will “investigate whether there is or should be a professional obligation to understand and to use new technologies and new applications reasonably” (page 9), which conveniently circles back to the issues presented by Rule of Court 9.7.

The commission will be meeting in San Francisco at the ABA Annual Meeting in early August. The meetings are public and you might want to attend. In my opinion, this was the “E” ticket in Orlando, and of course, all the information is available on the Internet.

Ethics expert Diane Karpman can be reached at 310-887-3900 or karpethics@aol.com.