Next week I’ll be presenting at the ABA Women Rainmakers Mid-Career Workshop on “Lawyering in the Digital Age.” My presentation covers technology issues that the lawyers of today are faced with that didn’t exist 20, 10, or sometimes even 5 years ago, including issues involving electronic communication, data storage and security, “cloud” services, websites and virtual law offices.
In the past several months, the New York State Bar Association Committee on Professional Ethics has issued a number of ethics opinions that deal with some of these topics.
Here is a quick overview of the New York Opinions.
Remote Access to Law Firm Electronic Files
Perhaps the most comprehensive of the recent New York opinions dealing with the application of the New York ethics rules to modern technology is Opinion 1019, discussing confidentiality and remote access to a law firm’s electronic files. The opinion concludes that, “A law firm may give its lawyers remote access to client files, so that lawyers may work from home, as long as the firm determines that the particular technology used provides reasonable protection to client confidential information, or, in the absence of such reasonable protection, if the law firm obtains informed consent from the client, after informing the client of the risks.”
This reasonableness standard comes from Rule 1.6, Confidentiality. Rule 1.6(c) provides that a lawyer must "exercise reasonable care to prevent . . . others whose services are utilized by the lawyer from disclosing or using confidential information of a client" except as provided in Rule 1.6(b).
Comment 17 to Rule 1.6 provides some additional guidance regarding reasonableness, and notes that “special circumstances might require additional security precautions.” Comment 17 also sets forth factors to be considered in determining reasonableness, including the sensitivity of the information and the extent to which the privacy of the communication is protected by law or by a confidentiality agreement.
Opinion 1019 concludes that,
Because of the fact-specific and evolving nature of both technology and cyber risks, we cannot recommend particular steps that would constitute reasonable precautions to prevent confidential information from coming into the hands of unintended recipients, including the degree of password protection to ensure that persons who access the system are authorized, the degree of security of the devices that firm lawyers use to gain access, whether encryption is required, and the security measures the firm must use to determine whether there has been any unauthorized access to client confidential information. However, assuming that the law firm determines that its precautions are reasonable, we believe it may provide such remote access. When the law firm is able to make a determination of reasonableness, we do not believe that client consent is necessary.
However, if a law firm cannot make such a conclusion, the client’s informed consent may be obtained.
Use of Cloud Services for a Transaction
In Opinion 1020, issued September 12, 2014, the Committee addressed a question raised by a real estate attorney who wanted to use an electronic project management tool which would allow sellers’ attorneys, buyers’ attorneys, real estate brokers and mortgage brokers to post and view documents, including contracts and building financials, using a cloud-based data storage tool.
As they did in Opinion 1019, the Committee referred to Rule 1.6(c) and the reasonableness standard, stating that,
Whether a lawyer to a party in a transaction may post and share documents using a “cloud” data storage tool depends on whether the particular technology employed provides reasonable protection to confidential client information and, if not, whether the lawyer obtains informed consent from the client after advising the client of the relevant risks,” and that lawyers must “exercise reasonable care to prevent … [persons] whose services are utilized by the lawyer from disclosing or using confidential information of a client."
Virtual Law Offices
In Opinion 1025, issued September 25, 2014, the Committee opined that a lawyer would be permitted to have an entirely virtual law practice in the State of New York (operating solely online, with no physical location to meet with clients or conduct the practice of law), as long as the attorney complied with the requirements of Judiciary Law §470.
The issue presented was based on Rule 7.1(h) of the Rule of Professional Conduct, which requires that advertisements contain the attorney's principal law office address. An attorney inquired about whether Rule 7.1(h) prohibited the attorney from operating via a purely virtual law office.
Previous NYSBA Opinions concluded that Rule 7.1(h) required all attorneys who advertise to have and disclose a physical office address, however, based in part on court rulings applying Judiciary Law §470, Opinion 1025 comes to a somewhat different conclusion, stating that, “[W]e no longer believe that Rule 7.1(h) -- a rule that on its face regulates only advertising -- provides an independent basis for requiring a physical office.”
The opinion points out that there is potential value to clients of having a lawyer who works solely through a virtual law office, particularly where the client themselves works only virtually, and stating that, "The robustness of electronic communications, and the appointment of a virtual law office service as an agent for accepting service of process, effectively combine to eliminate any concern that a physical office is necessary in all cases for the receipt of service and other communications,” and that, “there is nothing inherently misleading about advertising a virtual law office.”
The opinion cites N.Y. City opinion 2014-2, which deals with a similar issue. It was noted however, that the lack of requirement for a physical law office was not automatic, and would depend heavily on the circumstances.
New York Rule of Professional Conduct 1.1, Competence, requires all attorneys to ensure competence, which Opinion 1025 notes
[N]ot only includes competence in performing the legal work but also competence in handling communications and storing and providing access to client files. An attorney should only use technology that he or she is competent to use. Attorneys owe duties of effective communication with clients to keep them promptly and reasonably informed and consulted about the means of achieving the client's objectives (Rule 1.4). Attorneys owe duties to maintain confidentiality (Rule 1.6), and there are unique concerns about confidentiality that relate to conducting all communications and client file storage electronically. Attorneys have numerous duties relating to the proper preservation of client materials (Rules 1.6(c) and 1.15). Attorneys must assure adequate supervision of subordinate lawyers and of non-lawyers (Rule 5.1 and 5.3). There is no “virtual law office exception” to any of the Rules.
Website Domain Names
As I discussed in this post, in mid-2013, the NYSBA Committee on Professional Ethics issued Opinion 972, in which it noted that attorneys are prohibited from listing their services under the heading “Specialties” on a social media site unless the lawyer is certified in conformity with the provisions of Rule 7.4(c).
On September 12, 2014, the Committee issued Opinion 1021, which addresses the issue of the use of the word “expert” in a law firm’s domain name, citing New York Rule of Professional Conduct 7.5(e)(3), which prohibits firms from using a domain name that implies the ability to obtain results in the matter. The opinion notes that, “The implication of the word [expert] is that the law firm may bring to the matter a seal of approval that provides comparatively greater assurance of some favorable outcome which no disclaimer may readily cure.”
With the rapid pace of technology change in today’s legal environment, all attorneys must remain up to date not only on the changes in technology that affect the delivery of legal services and advertising for those services, but in the ethical rules implicated in the use of such technology.