Monday, February 20, 2023
A Need For Study And Reform
Thanks to Lucian Pera for sending this announcement of a call for a long overdue study of bar discipline processes
It's time for the American Bar Association to launch a fresh, high-level effort to renew the US lawyer discipline system for the 21st century.
There has been a steady drumbeat of discussion recently about US lawyer regulation. Much of the debate has surrounded questions of nonlawyer ownership of law firms, fee-sharing with nonlawyers, and licensing of legal para-professionals. These are important discussions, but that's not what we propose.
Instead, as lawyers who have practiced and worked in the lawyer regulatory system for many years—more than 200 years collectively—we believe it is time for the ABA, the traditional convener and leader on lawyer regulation, to launch a once-in-a-generation review of the mechanics, structure, and reach of lawyer regulation. It's time to revisit the infrastructure of lawyer regulation, rather than the substance of ethics rules.
Some of us hold elected or appointed positions in the ABA. None of us speak in those official positions, for the groups we represent or work with, or for the ABA. We speak only for ourselves in our personal capacities. Still, we believe many in lawyer ethics and regulation share our view.
Like roads and bridges, the rules, procedures, enforcement tools, as well as the jurisdictional boundaries of lawyer regulation, need periodic maintenance. We believe the infrastructure of American lawyer discipline is overdue for an update.
Background: The Clark Committee & McKay Commission
The ABA has used its convening authority more than once for this purpose.
In 1970, the ABA's Special Committee on Evaluation of Disciplinary Enforcement, chaired by former U.S. Supreme Court Justice Tom Clark, which became known as the Clark Committee, spent three years studying lawyer discipline, only to find what it described as “a scandalous situation that require[d] the immediate attention of the profession.”
The Committee noted that “the prevailing attitude of lawyers toward disciplinary enforcement range[d] from apathy to outright hostility.” Moreover, “public dissatisfaction with the bar and the courts [was] much more intense than [was] generally believed within the profession.”
So much so that, “unless public dissatisfaction with existing disciplinary procedures [was] heeded and concrete action [was] taken to remedy the defects, the public soon [would] insist on taking matters into its own hands.”
The Clark Committee identified 36 problems in disciplinary enforcement and proposed solutions. The overall thrust was a call for the professionalization of lawyer disciplinary enforcement. The ABA in the ensuing years led jurisdictions in the effort to bring the Committee's vision to reality. Within five years, half the jurisdictions in the US employed professional disciplinary counsel in their discipline systems, replacing the former disciplinary structure that had been composed purely of lawyer volunteers.
Over the two decades following the 1970 Clark Committee report, the ABA framed out the structure it had envisioned. It enacted model procedural guidelines for lawyer discipline that became the ABA Model Rules for Lawyer Disciplinary Enforcement as well as model sanctions standards that became the ABA Standards for Imposing Lawyer Sanctions.
In 1989, the ABA launched its Commission on Evaluation of Disciplinary Enforcement to study current lawyer discipline and examine the implementation of the Clark Committee's recommendations. In honor of its first chair, former NYU School of Law Dean Robert B. McKay, the group became known as the McKay Commission. Its detailed recommendations, adopted by the ABA House of Delegates in 1992, carried forward the vision of the Clark Committee.
The McKay Commission confirmed the ABA's—and the profession's—view that judicial regulation of the profession is a paramount value. They surveyed the country's best practices in its recently professionalized lawyer disciplinary systems. Importantly, they expanded the structure of lawyer discipline to include several additional elements, all well known today, including alternatives to discipline, client protection funds, trust account overdraft notification, random audits of trust accounts, continued study of mandatory malpractice insurance requirements, lawyer assistance, and law practice management assistance.
The McKay Commission's recommendations are still relevant and should be updated and improved upon. The Standing Committee on Public Protection in the Provision of Legal Services (formerly known as the Standing Committee on Client Protection) has worked steadily to advocate for model rules designed to prevent lawyer misconduct and client harm and to compensate legal consumers when necessary. Rules designed to prevent the invasion of trust funds through audits and payee or overdraft notifications are examples of useful prophylactic regulation. Some jurisdictions’ requirements of written fee agreements in some instances, and assistance in resolution of client-attorney fee disputes are other examples of the expansion of the lawyer regulatory system beyond a purely prosecutorial model. Many of these changes have served the profession, clients, and the public well.
Trends Requiring Regulation
Thirty years on, it's time to update and improve upon this landmark work, in light of current circumstances and the experience of all our jurisdictions.
But today we face more than the need to update the current lawyer regulation system. The last generation has seen at least two major trends that require fresh attention to the infrastructure of lawyer regulation. Multi-Jurisdictional Practice
First, lawful, appropriate practice by lawyers across the borders of US jurisdictions has increased dramatically. Over the last several decades, the legal needs of clients—individuals, businesses, and governments—have increasingly become regional, national, and even international. Even the most local clients may have regular international suppliers. Domestic relations matters increasingly involve cross-jurisdictional issues that track clients’ moves to follow careers and family.
Because as lawyers we serve clients, lawyers’ practices and work are increasingly less limited by the boundaries of their state of licensure. Multi-jurisdictional practice, or “MJP,” has been authorized in some form in the overwhelming majority of US jurisdictions under versions of ABA Model Rule of Professional Conduct 5.5. An increasing number of lawyers are also licensed in multiple jurisdictions, and the ABA has just begun a new round of study of potential changes that might better reflect these new realities.
With those changes have come challenges for lawyer discipline in confronting lawyer misconduct involving multiple jurisdictions or lawyers misbehaving away from their home jurisdictions. Which rules apply? Which jurisdiction should initiate an investigation? Can clients and lawyers choose those rules? Which regulatory elements – trust account requirements, client protection funds – apply to lawyers practicing in multiple jurisdictions? And who pays for disciplinary investigation and prosecution of multijurisdictional misconduct when a lawyer may not even be admitted to practice in a jurisdiction investigating misconduct inside that jurisdiction? Disciplinary counsel need new approaches, maybe new procedural help, and possibly new structures to confront multijurisdictional misconduct with effective disciplinary enforcement.
Alternative Legal Service Providers
Second, the boundaries of law practice and the legal services business have blurred and expanded. Over the last thirty years, a whole new class of non-law firm businesses has been created. Sometimes called “alternative legal service providers,” or ALSPs, these businesses sell legal services to clients of law firms and law departments. These legal services are provided by temporary or contract lawyers, employed by the company (not by any law firm), and supervised by those law firms or law departments.
Some of these staffing companies are multi-national behemoths, rivaling the biggest BigLaw firms. Others provide temporary brief writers to individual lawyers. However they differ, they share one thing: they are not law firms, and they are selling legal services.
For a generation, they have thrived and grown, by and large serving client needs. They are only regulated today through traditional regulation of the lawyers who work for and deal with them. Is that sufficient? Or should lawyer regulation be broadened, as some have suggested, to more consciously regulate them?
Since the dawn of the internet, lawyer marketing has exploded into digital form, from lead generation to lawyer matching services. Many jurisdictions do nothing at all to separately regulate this activity, relying on the traditional lawyer advertising and solicitation rules. A small, growing number of jurisdictions have each taken their own path to regulate this activity, some requiring registration by these nonlawyer companies, others placing new regulations on lawyers who deal with them, and still others electing to not regulate these services at all. Should lawyer regulation encompass this new terrain more directly?
A few jurisdictions have also authorized other alternative legal service providers such as legal technicians, legal paraprofessionals, social workers, courthouse navigators, and more. Other jurisdictions are considering these options today. No national discussion has yet focused on how the regulation of these authorized providers should relate to the traditional regulation of lawyers.
Those who regulate lawyers and legal services need to survey, consciously, and intentionally, the changing boundaries of regulation. Should it expand? If so, how? Through new types of regulation of lawyers themselves? By bringing others under some form of regulation? If so, should lawyer regulators take on that challenge, or should there be other or new regulators?
Both as a part of periodic maintenance of our lawyer regulation infrastructure, and in the wake of the changes in how and where lawyers practice and who delivers legal services, a number of other subjects also need attention by the best minds on lawyer regulation. Those include a number of issues concerning procedure in disciplinary proceedings, including whether blanket confidentiality rules for investigations best serve the public or profession; who should decide contested proceedings; what burden of proof should apply; and what kind of discovery should be permitted.
The ABA Model Rules for Lawyer Disciplinary Enforcement provide jurisdictions a template for investigations and proceedings governing lawyer discipline. These model rules were adopted in 1989, and periodically tweaked, but no thorough review has been attempted in decades. Increasing cross-border practice, remote practice, and technology changes in the last 20 years require a review of these rules to assess if they are still the most effective and realistic approaches to investigating, adjudicating, and sanctioning lawyer misconduct.
Review of Professional Conduct & Sanctions Rules
While the ABA's core guidance on the substantive rules governing lawyer conduct—the ABA Model Rules of Professional Conduct—now serve as the model for ethics rules in every US jurisdiction, the ABA's model disciplinary enforcement rules are out-of-date, and closely adopted by virtually no US jurisdiction. Ethics regulators deserve better, as do the clients, public, and lawyers they serve. On many particular issues, in fact, individual jurisdictions do better on one aspect or another of the rules or regulation. That success needs to be identified and spread to other jurisdictions.
The same is true for the ABA Standards for Imposing Lawyer Sanctions. These are guidelines most jurisdictions use more or less as sentencing guidelines for lawyer disciplinary proceedings. Their goal is greater fairness and consistency. They set baseline sanctions for specific kinds of disciplinary violations. They identify appropriate aggravating and mitigating factors that should or must be considered in imposing sanctions for violations of the disciplinary rules. Some jurisdictions mandate the use of these standards; some simply use them routinely; and some do not use them at all.
The Standards were last amended 30 years ago. They need to be re-evaluated in light of a generation of substantive rule changes, enforcement experience, and case law.
Related ABA models that also need review include the Model Rules for Lawyers’ Funds for Client Protection Funds and the Model Rules for Client Trust Account Records. The model client protection rules were last updated in 1989 and today struggle to address such issues as which jurisdiction's client protection fund should apply when a lawyer is admitted in more than one jurisdiction and how should funds work together to assure as much client protection as possible for a multi-state admitted lawyer.
The Model Rules for Client Trust Account Records were last amended in 2010. These trust account record rules similarly provide little guidance to lawyers on which rules should apply when a lawyer represents clients in more than one jurisdiction and the lawyer is admitted in more than one jurisdiction.
We submit that the ABA president should appoint a group of experts from all the relevant constituencies to survey the current landscape and experience of the last few decades. This review should include the more than 50 versions of disciplinary enforcement rules currently operating in US jurisdictions, as well as innovations in regulation US jurisdictions might adopt from other countries. This group should examine carefully the full scope and record of other regulatory approaches and should also reinforce the strengths in our current system. We strongly believe that those strengths, which include individual accountability, client-focused rules, and increasing attention to the prevention and redress of misconduct, must be carefully preserved and strengthened.
Those experts need to include veteran regulatory counsel from jurisdictions big and small, disciplinary defense counsel, academics who study lawyer regulation, client protection fund administrators, IOLTA program representatives, and ultimate regulators such as state supreme court justices. This group should review existing rules and changes in the profession and the legal services market to make recommendations to establish renewed and improved model standards for all jurisdictions. That's how ABA leadership in ethics and lawyer regulation has worked successfully for more than 100 years.
Your authors may each have their own tentative views, and those views are by no means uniform. But we all share the firm conviction that it's time to be conscious and intentional about defining the proper frontiers of legal professional regulation for the 21st Century, as well as about identifying and developing the tools regulators need for the new world.
To be crystal clear, we propose that this effort not consider any changes to the substantive ethics rules involving nonlawyer ownership or fee-sharing with nonlawyers. Those are entirely different debates we do not address here.
In the history of lawyer regulation in this country, no single organization has done remotely as much as the ABA to advance client and public protection and responsible and sensible regulation. In fact, the success of lawyer regulation in the US owes more to the ABA than any other organization.
It's time for the ABA to step up again and renew our lawyer regulatory system to meet the needs of the next generation.
In my view, one of the most pressing issues is the delay between complaint and final resolution. My own jurisdiction - the District of Columbia - is the poster child for inexcusable delay. (Mike Frisch)