Risk Update

Professional Rules Under Revision: Marketing Restriction + Non-lawyer Financial Interest Coming in California?

Hat tip to Karen Rubin at Thomson Hine: “No marketing using client’s info without express consent, says S.C. supreme court, even if ‘generally known‘” —

  • “As we’ve noted before (here and here), the ethical duty of confidentiality is broad, and can even cover publically-available information. Now comes a reminder that based on the confidentiality rule you should obtain consent before using your client’s name in marketing materials — and that some jurisdictions go even farther. For instance, South Carolina last month added a comment to its version of Model Rule 1.6 that expressly requires permission before using client information for advertising purposes, even including “generally-known” client information.”
  • “The South Carolina bar had filed a petition last year seeking to amend Rule 1.6 to allow lawyers to reveal citations to published judicial opinions without getting consent from clients involved in the case. But the law of unintended consequences kicked in.”
  • “Instead of approving the petition, the state supreme court tightened the confidentiality rule, saying in its order, ‘We decline to amend the rule as proposed by the Bar. Instead, we … add a new comment to the rule reminding lawyers that Rule 1.6 requires lawyers obtain informed consent from clients before revealing information about the representation to advertise their services. The comment further clarifies [that] this obligation applies regardless of whether any information revealed is contained in court filings or has become generally known.'”
  • “This goes farther than other state versions of Model Rule 1.6, and may be a burdensome slippery slope when it comes to ‘generally-known’ information.”
  • “On the other hand, clients value confidentiality and many want complete control over whether a firm publicizes its relationship with that client. For instance, as a condition of the representation, many large organizations expressly prohibit their outside counsel from mentioning the fact of the representation in their marketing materials without express consent.”

And to Joseph Corsmeier: “California Bar examines proposal that non-lawyers be permitted to provide legal advice and have a financial interest in law firms” —

  • “… the recent proposals of a State Bar of California task force which would, inter alia, permit legal technicians to offer legal advice and also permit non-lawyers to have a financial interest in law firms. The proposals were approved by the State Bar Board of Trustees on July 11, 2019.”
  • “The proposals were developed by the California Bar’s Task Force on Access Through Innovation of Legal Services. The task force’s proposals would make sweeping changes by modifying the restrictions on the unauthorized practice of law and ethics rules that prohibit fee sharing with nonlawyers and would also permit legal technicians to provide legal advice and practice law. The California Bar press release announcing the proposals is here. The California Bar agenda item with the proposals is here.”
  • “The proposals also would also permit state-approved businesses to use legal technology to deliver legal services. Regulatory standards governing the provider and the technology would be established and client communications with such entities would be covered by attorney-client privilege/confidentiality.”
  • “Bottom line: These California Bar proposals have a long way to go before being potentially implemented; however, if they are eventually implemented, California will be another one of the few states which would permit legal technicians to offer legal advice and the only jurisdiction (other than the District of Columbia) to permit nonlawyers to hold a financial interest in law firms. Stay tuned…”