Proposed New Ethics Rules, and Their Impact on Solo Practitioners
| Jurisdiction | California,United States |
| Author | By Neil J Wertlieb |
| Publication year | 2018 |
| Citation | Vol. 24 No. 2 |
By Neil J Wertlieb*
Neil J Wertlieb is an experienced transactional lawyer who provides expert witness services in litigation and arbitration matters. He has served as an expert witness in disputes involving business transactions and corporate governance, and in cases involving attorney malpractice and attorney ethics. He is a former Chair of the California State Bar's Committee on Professional Responsibility and Conduct, a former Chair of the Business Law Section of the California State Bar, and a former Co-Chair of the Corporations Committee of the Business Law Section. He is also an Adjunct Professor at UCLA School of Law, the General Editor of Ballantine & Sterling: California Corporation Laws, and the Vice Chair of the Los Angeles County Bar Association's Professional Responsibility and Ethics Committee. For additional information, please visit wwwWertliebLawcom.
Seventy proposed new and amended Rules of Professional Conduct were recently submitted by the State Bar to the California Supreme Court for approval.1 If approved, these proposed Rules would replace the forty-six Rules of Professional Conduct that currently govern the conduct of attorneys in California.2 Several of the proposed Rules would implement controversial or important changes to the current Rules or impose new obligations in California. As a result, all attorneys in the State should be aware of these proposed changes.
The California Rules of Professional Conduct apply to all attorneys in the state. Failure to comply with the Rules may result in discipline, including being disbarred from the practice of law.3 Failure to comply in a litigation matter may also result in disqualification from that matter.
All states other than California have rules of professional conduct that are based on the Model Rules developed by the American Bar Association.4In fact, at this time California is the only state with its own unique set of rules of professional conduct. The last comprehensive revision of the Rules in California was submitted to the California Supreme Court in 1987 and became operative in 1989. Since then, numerous changes have influenced the practice of law, including technological advances, multijurisdictional practices, and a focus more on the practice of law as a business—all with potential ethical implications.
In 2001 and 2002, the Model Rules were revised, which prompted the Board of Governors of The State Bar to appoint a Commission for the Revision of the Rules of Professional Conduct (the "Predecessor Commission") to do a comprehensive review of the Rules. However, after more than a decade of work, in 2014 the California Supreme Court granted The State Bar's request to restart the effort. A second Commission for the Revision of the Rules of Professional Conduct (the "Commission") was appointed in January 2015. The Commission began an expedited process, with a goal of submitting proposed Rules by the end of March 2017. The Commission carefully reviewed the California Rules and related law, compared the Rules against the Model Rules, and examined how the Model Rules had been adopted and interpreted in other jurisdictions. After soliciting public comment, the Commission presented a set of proposed Rules to the Board of Trustees of the California State Bar. The Board of Trustees then submitted the proposed Rules to the California Supreme Court before the March 31, 2017 deadline.
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One of the most significant (although nonsubstantive) changes reflected in the proposed Rules is a change to the numbering scheme of the Rules. The Commission determined that the Rules should generally conform to the organization and rule numbering of the Model Rules. This change allows for easier comparison and review across various jurisdictions.
This article highlights for solo practitioners a number of the proposed Rules that would implement material changes from the current regulatory scheme—material due to substantive changes in the law, potentially disruptive compliance issues, or public policy and enforceability considerations. It is important to note, however, that this article is not a comprehensive review of all of the changes reflected in all of the proposed Rules. Also, the proposed Rules discussed herein are not effective, and will not become effective, unless and until approved by the California Supreme Court.
The following three rules are noteworthy in that the changes they propose are controversial or potentially disruptive.
Sexual Relations with Current Client. Our current rule, California Rule of Professional Conduct 3-120, effectively permits a lawyer to engage in "sexual relations" (as defined in the Rule) with a client, provided that the lawyer does not:
"(1) Require or demand sexual relations with a client incident to or as a condition of any professional representation;
(2) Employ coercion, intimidation, or undue influence in entering into sexual relations with a client; or
(3) Continue representation of a client with whom the [lawyer] has sexual relations if such sexual relations cause the member to perform legal services incompetently in violation of rule 3-110 [Failing to Act Competently]."
In contrast, most other jurisdictions have adopted a version of Model Rule 1.8(j), which imposes a bright-line standard that generally prohibits all sexual relations between a lawyer and client unless the sexual relationship was consensual and existed at the time the lawyer-client relationship commenced.
Proposed Rule 1.8.10 reflects a major shift from current Rule 3-120, and substantially adopts the bright-line prohibition approach of Model Rule 1.8(j):
"A lawyer shall not engage in sexual relations with a current client who is not the lawyer's spouse or registered domestic partner, unless a consensual sexual relationship existed between them when the lawyer-client relationship commenced."5
This proposed change has been very controversial, and has attracted much commentary during the public review process and in the press. The Commission itself recognized that the change represents a significant departure from California's current Rule, and may implicate important privacy concerns. The members of the Commission, however, concluded that the current Rule has not worked as intended, as evidenced by the fact that, in the twenty-five years since the adoption of Rule 3-120, there have been virtually no successful disciplinary prosecutions under the Rule as currently formulated.
Prohibited Discrimination, Harassment and Retaliation. Proposed Rule 8.4.1, like current Rule 2-400 (which it would replace) would prohibit unlawful discrimination, harassment, and retaliation in connection with the representation of a client, the termination or refusal to accept the representation of any client, and law firm operations. However, Rule 8.4.1 reflects a fundamental change from Rule 2-400. Proposed Rule 8.4.1 would eliminate the current requirement that there be a final civil determination of such unlawful conduct before a disciplinary investigation can commence or discipline can be imposed.6 The current Rule requires a prior adjudication by a tribunal of competent jurisdiction (i.e., not the State Bar Court):
"No disciplinary investigation or proceeding may be initiated by the State Bar against a member under this rule unless and until a tribunal of competent jurisdiction . . . shall have first adjudicated a complaint of alleged discrimination and found that unlawful conduct occurred."7
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