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Ethics rules get a rewrite

While the California Rules of Professional Conduct may not provide the most scintillating reading, they form the basis of good attorney behavior and every member of the State Bar is bound by them. Would-be lawyers must pass a professional responsibility exam, separate from the bar exam, to be admitted to practice. Violations can lead to trouble with judges, other lawyers and clients, as well as discipline by the State Bar. An entire body of legal practice is devoted to interpreting, enforcing and defending the rules.

Eight years ago, the Commission for the Revision of the Rules of Professional Conduct embarked on the herculean task of revising and updating the rules, a project that hadn’t been undertaken for two decades. The end product presents a multitude of substantive changes to both existing law and public policy and addresses issues as varied as conflicts of interest, legal fees, confidentiality, terminating representation, publicity, advertising, handling client money and sex with clients. California is the only state that does not pattern its rules on the American Bar Association’s Model Rules of Professional Conduct, but the commission now recommends adoption of the Model Rules format, numbering system and, in many instances, the substantive standard. In part, this is because the panel was charged with trying to eliminate unnecessary and potentially confusing differences between California and other states and to foster the evolution of a national standard with respect to professional responsibility issues. “Our charge was to review the law of lawyering and to remove any unnecessary differences between the model rules and local rules,” said Kevin Mohr, a consultant to the commission and ethics instructor at California Western School of Law. Where the model rules departed from California’s standards (for example, confidentiality exceptions are much more limited in California), the commission recommends not pursuing the ABA rules, Mohr said.

While some proposals appear benign, others have attracted widespread attention. The duty of confidentiality, for example, seems always to draw controversy – and did again. Replacing the word “party” with “person” in the longstanding rule prohibiting improper contacts with another lawyer’s contact drew fierce opposition from prosecutors and criminal defense lawyers alike. Some rules, including sex with a client and conflicts of interest, were sent back to the commission by the board of governors for further work. Nine Model Rules were considered and rejected.

The commission is now seeking public comment on its final product — 69 proposed new and amended rules. “This is a chance for people to actually have a say,” said Mohr. “There might be areas of practice where people will feel a particular impact and they need to look at these rules.”

In particular, he cited a new rule governing lawyer conduct in non-adjudicative proceedings, such as local boards of supervisors or school boards; a comprehensive definition of the type of client information protected by lawyer-client confidentiality; rules that govern lawyers who act as third-party neutrals; and an express statement in advertising rules that cover real-time electronic communications. The commission also recommends the adoption of a multi-rule approach to conflicts of interest, rather than the current single rule approach.

The proposals and a form for online submission of written comments can be found at The deadline for comment is June 15; the board of governors is expected to adopt the new rules by September. Although the rules do not become binding until approved by the California Supreme Court, lawyers and consumers of legal services now have an opportunity to have their voices heard.

Following is a Top Ten list of selected rule changes that may soon become California law.

10. Just following orders? California’s rules do not address the obligations of a subordinate lawyer, such as a new associate, when a supervising partner gives a direct order for action that might result in the subordinate’s violation of a professional duty. The Model Rules address this situation and provide that a subordinate lawyer does not violate the rules if he or she acts in accordance with a supervisory lawyer’s “reasonable resolution of an arguable question of professional duty.” Under that rubric, a subordinate lawyer is not given a “free pass” to simply “follow orders.” The subordinate still must exercise independent judgment to determine first, whether there is an “arguable question” and second, whether the supervisor’s resolution is reasonable. As proposed, Rule 5.2 would adopt the Model Rule approach.

9. Innocence and Prosecutorial Duties. The ABA recently revised the Model Rules to impose new duties on prosecutors to take action in response to certain newly discovered exculpatory evidence. For example, if a prosecutor learns of information suggesting that a person did not commit an offense of which the person was convicted within the prosecutor’s jurisdiction, the prosecutor is required to take action to remedy the wrongful conviction. These new duties may apply even if the new information pertains to closed cases outside the jurisdiction of the prosecutor. As proposed, Rule 3.8 would follow the ABA’s lead and impose these new duties on prosecutors.

8. It’s okay to be a “snitch.” The Model Rules require a lawyer to report misconduct committed by another lawyer, but the current California rules do not. As proposed, Rule 8.3 would add new mandatory and permissive reporting standards, including a mandatory requirement that an attorney report to the State Bar when the attorney knows that another lawyer has committed a felonious criminal act that raises a substantial question as to that lawyer’s honesty, trustworthiness or fitness as a lawyer. For non-felonious lawyer misconduct and for misconduct by judges and other adjudicative officers, Rule 8.3 permits, but does not require, an appropriate disciplinary report.

7. Should clients expect more than legal advice from their counselors at law? Model Rule 2.1 has only two sentences in the rule text. The first concerns the settled principle that a lawyer must exercise independent professional judgment in advising a client. The second sentence provides that a lawyer’s advice may include considerations such as moral, economic, social or political factors. The proposed Rule 2.1 would adopt only the first sentence of the Model Rule requiring that a lawyer exercise independent professional judgment and render candid advice. The second sentence of the Model Rule would not be adopted as rule text but would be moved to the explanatory rule comments. Supporters of the Model Rule approach contend that sometimes non-legal factors predominate over legal considerations and a client should expect a lawyer to raise such issues even if the lawyer herself might not be, for example, an expert in politics or social norms. Opponents counter by saying that such extra-legal counseling should be voluntary rather than implemented in a rule that might subject a lawyer to discipline even though the lawyer’s legal advice was competent and complete.

6. Sex with clients is just plain wrong. Since 1992, the California rules have prohibited a lawyer’s sexual relations with a client whenever the relations are: 1. required as a condition of a representation; 2. obtained by coercion, intimidation or undue influence; or 3. cause the lawyer to perform legal services incompetently. The Model Rules have a more restrictive approach prohibiting all sexual relations unless such relations are between spouses or are ongoing relations that predate the initiation of a lawyer-client relationship. As proposed, Rule 1.8.10 would adopt the Model Rule approach and impose a near complete ban on sexual relations.

5. Other people’s money. The Model Rules require a lawyer to hold the funds or property of clients or third parties separate from the lawyer’s own funds or property. This general fiduciary standard includes a specific requirement that a lawyer deposit into a client trust account all fees that have been paid in advance, and that the lawyer withdraw such advance fees only after they have been earned. California’s rules permit, but do not require, advance fees to be deposited into a client trust account. As proposed, Rule 1.15 would continue California’s existing standard. This is a longstanding difference between the ABA and California rules and the bar previously has considered moving to the more client-oriented Model Rule policy, which requires advance fees to be held in trust. When the bar has explored this change, however, it has received critical opposition from the private criminal defense bar, bankruptcy lawyers and others who argue that access to justice dictates that lawyers and clients retain the freedom to contract for advance fees that are not treated as trust funds. If not, a criminal defendant’s advance fee payment held in their lawyer’s trust account might be subject to a prosecutor’s forfeiture action, or bankruptcy debtor’s fees might be claimed by the bankruptcy trustee as estate property to be divided among creditors. In either scenario, there would be a chilling effect on the lawyer’s willingness to handle such cases in the future.

4. Helping those who can’t help themselves or overriding client autonomy? For many the years, the Model Rules have provided that a lawyer who represents a client with diminished capacity is permitted to reveal that client’s confidential information or, in an extreme case, is permitted to institute conservatorship proceedings when such action becomes necessary to protect the impaired client from harm such as physical abuse or financial victimization. California’s current rules do not permit such actions as they likely constitute a breach of client loyalty or confidentiality. As proposed, Rule 1.14 would move in the direction of the Model Rule approach but would not go so far as permitting a lawyer to bring a conservatorship against the lawyer’s own client. Rule 1.14 would permit, but not require, a lawyer to notify an individual or organization that has the ability to take action to protect a client suffering from significantly diminished capacity who is at risk of undue influence or other harm. The scope of the rule is very limited and excludes the representation of minors, clients in criminal matters and persons who are already the subject of conservatorship proceedings. Those who favor the rule believe it allows lawyers to protect helpless clients who otherwise would become victims of negligent or greedy relatives and other supposed caretakers. Those who oppose the rule claim that it blurs the conceptual lines of the principal-agent underpinnings of the lawyer-client relationship by placing a lawyer in the paternalistic position of deciding the client’s best interest rather than zealously advocating for the client’s stated desires

3. No Cure for Typhoid Mary in the Rules. California’s case law has long provided for the imputation of confidential information among lawyers in the same firm. Because information is imputed, courts often disqualify an entire firm when one lawyer in the firm is disqualified because of a conflict. The Model Rules likewise provide for the imputation of a lawyer’s personal disqualification but also go further to permit a law firm to erect an ethical wall or screen to prevent one lawyer’s conflict based on confidentiality owed a former client from infecting the entire firm. Model Rule 1.10 is the ABA’s rule applicable to imputed conflicts in the private law firm context. Other Model Rules govern other contexts, such as the situation when a lawyer moves into or from government practice. After consideration by the commission and the board of governors, no counterpart to Model Rule 1.10 is being proposed for the new California rules. This means, first, that there will be no Rule of Professional Conduct that addresses the feasibility of screening in the private firm context. Second, it means that an imputed conflict likely will not be chargeable in a State Bar disciplinary proceeding. Imputation and vicarious disqualification in civil matters, and especially the unsettled issue of ethical walls, will continue to be governed by case law rather than guided by a new rule.

2. Ex parte contacts with represented clients, the “person” v. “party” debate. All states have a rule that prohibits one lawyer from communicating about a controversy with the opposing lawyer’s client, absent the consent of that client’s lawyer. Common sense says that this is something that clients should rightly expect after hiring a lawyer. The Model Rule says that a “person” represented by a lawyer is entitled to this protection. The similar language of the California counterpart says that a “party” represented by a lawyer is entitled to this protection. As proposed, Rule 4.2 would abandon the word “party” and use the Model Rule term “person.”

While this slight revision seems innocent enough, it has received fierce opposition from a surprising alliance of prosecutors and criminal defense lawyers who claim that the one-word change would effectuate a sea change in the way criminal cases are investigated. One major bone of contention is the issue of whether a witness, who is not a party, but who elects to hire a lawyer, is entitled to the protection of the ex parte rule when prosecutors and/or defense counsel seek an informal interview. Proponents of the change from “party” to “person” take the position that the witness is someone who should be protected by the rule. Prosecutors and defense counsel claim that such protection would frustrate investigations.

Like the rule in many other states, proposed Rule 4.2 includes an exception for “communications authorized by law,” and this exception is explained in the rule comments as recognizing “that prosecutors or other lawyers representing governmental entities … , as authorized by relevant federal and state, constitutional, decisional and statutory law, may engage in legitimate investigative activities, either directly or through investigative agents and informants.” Defense lawyers argue that the explanation of the exception plainly does not recognize their investigatory activities because they are not “prosecutors” or “lawyers representing governmental entities.” Prosecutors say the explanation is defective because it places the burden on them to identify statutory or case law expressly stating that certain activities are “authorized” when in reality codified laws and case law holdings tend to specify only acts that are prohibited. Prosecutors would rather have the rule’s exception state that investigatory activities are “permitted” unless some are specifically prohibited by a statute or case law.

1. Telling secrets. California lawyers’ duty of confidentiality resides in statute, Bus. & Prof. Code § 6068(e). The one exception permits a lawyer to reveal information reasonably necessary to prevent a criminal act likely to result in death or substantial bodily harm. This exception is recited in the California confidentiality statute and in the California rules. The Model Rules approach to confidentiality includes a broader death or bodily harm exception that is not limited to criminal acts. It also includes additional exceptions, such as an exception to prevent a client from committing a crime or fraud that is reasonably certain to result in substantial injury to the financial interests or property of another person. As proposed, Rule 1.6 would retain California’s approach of favoring strict confidentiality. Some existing case law exceptions to confidentiality are recognized in proposed Rule 1.6, such as an exception permitting a lawyer to comply with a court order to reveal information, and an exception permitting a lawyer to reveal information necessary to litigate a fee dispute or malpractice claim with a former client, but the more controversial Model Rule exceptions regarding financial or property harm are rejected in the proposed rule. Some supporters of the Model Rule approach take the view that self-regulation of the legal profession militates in favor of financial harm exceptions to confidentiality promulgated by the bar itself, rather than risking inevitable federal regulation along the lines of the Sarbanes-Oxley legislation. Supporters of California’s current policy believe that the proper functioning of the American legal system demands that a lawyer remain the one place where clients can confide their deepest secrets without fear of judgment or consequence.