SC Lawyer, March 2006, #2. The new rules and you.

• Author: By John Freeman

South Carolina Lawyer

Ethics Columns.

SC Lawyer, March 2006, #2.

The new rules and you

South Carolina LawyerMarch 2006The new rules and youBy John FreemanAs noted in the last issue of the South Carolina Lawyer, the Supreme Court's latest amendments to the Rules of Professional Conduct are now effective. They're available on the Web at www.judicial.state.sc.us/courtReg/newrules/NewRules.cfm. Last issue's Ethics Watch focused on changes tied to money matters affecting law practice. A number of additional ethical refinements are discussed in this month's column.

Conflicts of interest

The old guidepost in dealing with waivable conflicts used to be that the client consent "after consultation." The new rules are more specific, introducing two new defined terms found in the new "terminology," Rule, Rule 1.0. These terms are "informed consent" and "confirmed in writing." Conflict waivers now always require informed consent, confirmed in writing.

Informed consent denotes "the agreement by a person to a proposed course of conduct after the lawyer has communicated adequate information and explanation about the material risks of and reasonably available alternatives to the proposed course of conduct." The confirmatory writing need not be signed by the client and could consist of an e-mail sent by the lawyer promptly confirming the client's oral informed consent.

The smart lawyer recognizes that the writing requirement now is included in the ethics rules both for the lawyer's protection and the client's. If a dispute erupts between a lawyer and client focusing on the lawyer's conflict of interest, proof of a waiver may be crucial. Proving the legitimacy of an oral waiver by a former client who has brought suit based on an alleged conflict is close to Mission Impossible. Almost never would a lawyer sued in a conflict case involving an oral waiver be able to escape on a motion for summary judgment. The existence of a written waiver, in contrast, offers the glimmer of a possibility that hostilities can be ended based on a motion, rather than after a jury's deliberation. The bottom line is this: written waivers are good for both clients and lawyers facing potential conflicts.

Arbitration agreements are not automatically forbidden

Rule 1.8(h) deals with lawyers contracting to limit their liability to their clients. A new comment to the rule reads, "This paragraph does not prohibit a lawyer from entering into an agreement with the client to arbitrate legal malpractice claims, provided such agreements are enforceable and the client is fully informed of the scope and effect of the agreement." Thus, the comment validates, in a backhanded way, the availability of arbitration as a means of resolving client disputes.

Any lawyer thinking about putting a mandatory arbitration provision in his or her retainer agreement (as do stockbrokers, architects, etc.), would do well to also include an explanation of ways that dispute resolution under arbitration differs from, and may be less advantageous than, a court case. Among the arguably negative consequences of arbitration are that the client will lose his or her right to: a jury trial, a presiding judge bound by the Code of Judicial Conduct, full discovery proceedings, certain evidentiary rules or a right to findings based on the evidence with explicit legal reasoning. Additionally, the client should be told that his or her ability to appeal adverse decisions will be curtailed, and costs of the proceeding may be higher than in a court case. Failure to include these explanatory matters could lead to the arbitration provision not being enforced and, worse, used by the client as evidence that the contracting lawyer was seeking to take advantage of the client's ignorance in order to keep malpractice from ever being ruled on by a jury.

Advertising issues

The word "expertise" is a form of the word "expert." As such, it belongs in your ads, including your Web site discussion, only if you are a certified specialist. A number of lawyers are violating this ethical requirement on an ongoing basis. See Rule 7.4. Ads need to include the office address of the lawyer responsible, not just the lawyer's name. Rule 7.2(d). Exclude from your ads testimonials of any kind, whether quality-related or not. Rule 7.1(d). Advertising literature (save "directory" information) is now required to be filed (together with a $50 filing fee) with the Commission on Lawyer Conduct within 10 days of use. Rule 7.2. Minor changes to ads or Web pages may be filed as supplements, without a new filing fee. "Directory" information represents the sort of identifying data customarily found on business cards, such as street address, phone, fax and e-mail address. Thus, if you wanted to support the local high school football team by placing an ad in the program, you would escape the filing and fee payment requirements of Rule 7.2 if the football boosters just inserted a copy of your business card in the program.