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self-study / Legal Ethics

Comment on proposed rule revisions before time is up

Rosing heather web

Heather L. Rosing

Chief Financial Officer, Shareholder, Klinedinst PC

legal malpractice (specialist), business law

501 W Broadway Ste 600
San Diego , CA 92101

Phone: (619) 239-8131

Fax: (619) 238-8707


Northwestern Univ School of Law

Heather serves as the chairperson of the Legal Ethics and Law Firm Risk Management Practice Group, as well as the Lawyers and Accountants Practice Group. She is an appointed advisor to the State Bar of California's Rules Revision Commission.

Have you heard of the Second Commission for the Revision of the Rules of Professional Conduct (RRC)? If not, you are missing out. This is an incredibly talented and diverse group charged with conducting a comprehensive review of the current Rules of Professional Conduct. The RRC is chaired by Justice Lee Smalley Edmon, who has done - by all accounts - a masterful job of leading the process. And the end game? To prepare a brand-new set of rules for submission to the Supreme Court next year.

The days when it was enough to simply pass the professional responsibility exam, and hope you never needed to look at the rules again, are long over. Our Rules of Professional Conduct govern almost every aspect of the practice of law in California. They tell you how to structure your partnership, what to do if you are retiring, how to advertise, how to structure your fee arrangements, how to manage your trust account, what types of gifts you can accept, what types of things you need to disclose to clients, when conflict waivers are necessary, how to handle trial publicity, how to handle contact with jurors, and much, much more. These rules are critical for every practitioner to know, study, remember and implement.

And now is your opportunity to weigh in on the proposed changes, as well as other ideas that you may have. The State Bar released the RRC's draft rules for public comment, with the comment period expiring on September 27. The 68 draft rules can be found at Public comment is very easy to submit through the State Bar's online form, which can be accessed at

The RRC and the State Bar Board of Trustees really and truly want to hear from you. The RRC is very cognizant of the fact that the real-life practitioners in California have seen the current rules "play out" in the course of the representation of your clients. Without your input, the RRC cannot know how these rules have worked, how they have failed, and how they can be improved or made more understandable. It is to the distinct advantage of the entire system of justice and rule of law for all legal practitioners to embrace a set of rules that the profession has had a close hand in crafting.

Importantly, the RRC is specifically charged with eliminating, when and if appropriate, unnecessary differences between the California rules and the American Bar Association's Model Rules, which are used in many other states. Multijurisdictional practice is becoming more and more common, with many lawyers holding licenses in several states, and law firms with offices across the country. The California Supreme Court, in directing the RRC, has recognized the importance of promoting a national standard with regard to professional responsibility issues.

You are now likely asking yourself the following: "This is all very interesting, but what are the significant proposed changes? What are the highlights?"

Let's take a look at proposed Rule 1.5.1, which deals with the division of fees among lawyers. The key topic addressed is the regulation of fee sharing by lawyers who are not in the same law firm, including typical referral fees. This is a huge issue for many California practitioners. The RRC has proposed modifying the current rule to mandate that the lawyers who decide to divide the fee must put that agreement in writing. Also, in the new version, the client must consent to the division at or near the time that the lawyers enter into this agreement. Under the current rule, the agreement between lawyers does not need to be in writing, and consent from the client can be obtained later in the game. These changes are designed to increase protection for the clients.

Another proposed rule to keep on your radar screen is 1.15, which deals with the safekeeping of funds and property of clients. The proposal is that fees paid in advance be held in trust (similar to the current requirement regarding advanced costs). This could be a change for many practitioners, who do not currently maintain client trust accounts. The new rule would also include a specific protocol for flat fees paid in advance, with the understanding that there are circumstances under which these should be held in the operating account rather than trust account.

There is one brand new rule which every trusts and estates attorney needs to know - 1.14. This proposed rule discusses how you can ethically work with clients with diminished capacity to protect them, while still respecting your duty of confidentiality under Business and Professions Code Section 6068(e). In sum, under certain circumstances, your client can consent to you taking protective action on behalf of him or her.

But wait, there is more! Don't forget to take the time to look at proposed Rule 8.4.1, regarding prohibited discrimination, harassment and retaliation. This rule significantly changes the current state of affairs embodied in Rule 2-400. Under the new proposal, law firms shall not unlawfully harass or discriminate in the course of representing a client, or in terminating or refusing to accept the representation of any client. In relation to the operations of the firm, the lawyer shall not unlawfully discriminate, permit discrimination, or refuse to hire or employ a person, on the basis of any protected characteristic, or for the purpose of retaliation. In addition, the new proposal omits the current rule's limitation mandating that no disciplinary investigation may be initiated by the State Bar unless and until a tribunal of competent jurisdiction shall have first adjudicated a discrimination claim and found that unlawful conduct occurred. While this is the law, it now may become an ethical obligation, in recognition of the importance of creating confidence in the legal profession, and respecting the fundamental principle that all people are created equal.

What about conflicts of interest? The old rules are proposed to be completely reformulated, in accordance with the structure of the Model Rules. The RRC has proposed, for example, Rule 1.9, which specifically discusses duties to former clients. Right now, you need to read to the end of Rule 3-310 to figure this out. Under the new proposed framework, there would be three upfront provisions, each of which addresses a different aspect of the duties owed to the former client.

What about when you hire a new lawyer at your firm? Proposed Rule 1.10 concerns imputation of conflicts of interest. California would finally have a rule to address this important issue that is currently only discussed in California case law. It would permit the creation of an ethical screen in narrowly defined circumstances to avoid the imputation of conflict within the law firm structure. The core issue would be if the prohibited lawyer substantially participated in the matter at issue.

What about sex with clients? Believe it or not, contrary to what most practitioners think, the current rule only prohibits sexual relations in certain limited circumstances. The new proposed Rule 1.8.10, provides a bright-line standard, prohibiting all sexual relations unless the consensual sexual relationship existed at the time that the attorney-client relationship commenced.

Again, there are 68 new proposed rules and this article can only be 1,200 words, so we must regrettably end our journey into the rules together here. Please take the time to go to the State Bar's website, look over the entirety of the proposal, and consider providing your feedback and comments no later than September 27. The RRC thanks you in advance for your participation.


Ben Armistead

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