New professional rules generate plenty of disagreement

By Diane Karpman

This is a report from the front. For nine years, the Rules Revision Commission of the State Bar has been painstakingly engaged in redrafting the Rules of Professional Conduct to more closely reflect the American Bar Association’s Model Rules. This has been a difficult process, replete with conflicts, disagreements and philosophical schisms reflected in the razor-thin voting margins. Dedicated specialists in legal ethics cannot agree after years of intense labor and hundreds of hours of meetings.

Two commission members (Kurt Melchior and Jerome Sapiro), in a recent four-part article in the Daily Journal, urge rejection of the whole package. They point out that our current rules encompass about 29 pages in State Bar Publication 250 (the “gray book,” which includes the rules, State Bar Act and California Rules of Court), whereas the new version will take up about 99 pages. What is breathtaking about their dissertation is the narrow votes on rules that will conceivably govern our profession for the next few decades.

For example, take the rule prohibiting sexual relations with clients. After an initial tie vote (meaning no rule at all), it was passed 6-5 with one abstention. Sleeping with clients is never a good idea, but the Business and Professions Code already prohibits that conduct.

Another controversial rule (literally debated for years) would permit a lawyer or law firm to sell only a geographic or subject matter part of the law practice, which again passed 5-4, with one abstention. 

California lawyers do not have a duty to report the misconduct of another lawyer, known as the “snitch rule,” as do lawyers in most states (Model Rule 8.3). A highly modified and nuanced version barely passed out of the commission (6-5 with one abstention). However, any version creating lawyer “informants” was flatly rejected by the board of governors of the State Bar. (The board has its own committee considering the proposed new rules.) Many lawyers call my office about this issue. You may have a duty to self-report some events in your own life, but there is no duty to “rat out” colleagues. Such a duty could impair client confidentiality. Greater client protection is achieved when lawyers are permitted to try to fix problems rather than be mandated to report misconduct to a disciplinary agency.

One version of the rule involving fee agreements (Rule 1.5) might have subjected a lawyer to discipline for use of the term “non-refundable.” This enraged members of the criminal defense bar. Many bar organizations (including the Beverly Hills bar) wrote in opposition to the proposal. The commission eventually backed off from attempting to prohibit something that is not prohibited in the Model Rules. It may be a good idea to eliminate this term in your retainer. Although not specifically prohibited, it could raise eyebrows in civil litigation or in fee arbitrations, so why take the chance?

Another commission member, Robert Kehr, explained in a Daily Journal article that most of the California rules proposed for adoption are “rule-based” as opposed to “principle-based” (ABA Model Rules). Principle-based rules generally express best practices or goals we all attempt to achieve but remember that our rules are primarily used for disciplinary regulation. Discipline requires due process, often absent in a principle-based paradigm. We all know that the rules have an independent life in motions to disqualify and legal malpractice, but they are designed primarily for disciplinary sanctions.

Kehr articulately explains this in terms of a lawyer’s liability for negligent conduct. Our current rules and the proposed future rules can subject a lawyer to discipline for “intentionally, recklessly or repeatedly fail[ing] to perform legal services with competence.” Obviously, lawyers should not perform services incompetently, but lawyers should also not be disciplined for isolated acts of ordinary negligence. Lewis v. State Bar (1981) 28 Cal. 3d 683.

One of the biggest obstacles during this reconciliation process is the uniquely Californian emphasis on client autonomy and confidentiality. California lawyers owe greater duties to their clients than exist in Model Rules states. “California imposes on lawyers only limited duties to the courts and the legal system,” Kehr wrote. We do not have a “noisy withdrawal” or the right to “out” a client that exists in Model Rules states. In Model Rule regimes, lawyers are far cozier with the court and patronizing towards clients. “The lawyer’s undivided loyalty to the client must be balanced against a conflicting set of duties to society and to the legal system,” said Kehr.

You may ask, how could this process take nine years and result in so little unanimity? Reasonable minds can disagree. Once the proposed rules are approved by the board of governors, they will move to the Supreme Court for final approval. The new chief justice will have new rules. Nobody can estimate how long this will take, but by the time it is completed, the process will probably have taken at least a decade and is still clearly controversial.

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