Proposed Opinions

Council Actions

At a meeting on January 27, 2012, upon the recommendation of the Executive Committee, the State Bar Council adopted a comprehensive revision of Authorized Practice Advisory Opinion 2002-1 (January 24, 2003). The revised opinion appears on the State Bar website.
Also at its meeting on January 27, 2012, the State Bar Council adopted the ethics opinions summarized below:

2009 Formal Ethics Opinion 7
Interviewing an Unrepresented Child Prosecuting Witness in a Criminal Case Alleging Physical or Sexual Abuse of the Child

Opinion rules that a criminal defense lawyer or a prosecutor may not interview an unrepresented child who is the alleged victim in a criminal case alleging physical or sexual abuse if the child is younger than the age of maturity as determined by the General Assembly for the purpose of an in-custody interrogation (currently age 14) unless the lawyer has the consent of a non-accused parent or guardian or a court order allows the lawyer to seek to interview the child without such consent; a lawyer may interview a child who is this age or older without such consent or authorization provided the lawyer complies with Rule 4.3, reasonably determines that the child is sufficiently mature to understand the lawyer’s role and purpose, and avoids any conduct designed to coerce or intimidate the child.

2011 Formal Ethics Opinion 6
Subscribing to Software as a Service While Fulfilling the Duties of Confidentiality and Preservation of Client Property

Opinion rules that a law firm may contract with a vendor of software as a service provided the lawyer uses reasonable care to safeguard confidential client information.

2011 Formal Ethics Opinion 7
Using Online Banking to Manage a Trust Account

Opinion rules that a law firm may use online banking to manage its trust accounts provided the firm’s managing lawyers are regularly educated on the security risks and actively maintain end-user security.

2011 Formal Ethics Opinion 16
Responding to Ineffective Assistance of Counsel Claim Questioning Representation

Opinion rules that a criminal defense lawyer accused of ineffective assistance of counsel by a former client may share confidential client information with prosecutors to help establish a defense to the claim so long as the lawyer reasonably believes a response is necessary and the response is narrowly tailored to respond to the allegations.

Ethics Committee Actions

At its meeting on January 26, 2012, the Ethics Committee voted to publish four revised proposed opinions. The comments of readers are welcomed.

Proposed 2010 Formal Ethics Opinion 14
Use of Search Engine Company's Keyword Advertisements
January 26, 2012

Proposed opinion rules that it is a violation of the Rules of Professional Conduct for a lawyer to select another lawyer's name as a keyword for use in an Internet search engine company's search-based advertising program.

Inquiry:

Attorney A participates in an Internet search engine company's search-based advertising program. The program allows advertisers to select specific words or phrases that should trigger their advertisements. An advertiser does not purchase the exclusive rights to specific words or phrases. Specific words or phrases can be selected by any number of advertisers.

One of the keywords selected by Attorney A for use in the search-based advertising program was the name of Attorney B, a competing lawyer in Attorney A's town with a similar practice. Attorney A's keyword advertisement caused a link to his website to be displayed on the search engine's search results page any time an Internet user searched for the term "Attorney B" using the search engine. Attorney A's advertisement may appear to the side of or above the unpaid search results, in an area designated for "ads" or "sponsored links."

Attorney B never authorized Attorney A's use of his name in connection with Attorney A's keyword advertisement, and the two lawyers have never formed any type of partnership or engaged in joint representation in any case.

Does Attorney A's selection of a competitor's name as a keyword for use in a search engine company's search-based advertising program violate the Rules of Professional Conduct?

Opinion:

Yes. It is professional misconduct for a lawyer to engage in conduct involving dishonesty, fraud, deceit, or misrepresentation. Rule 8.4(c). Dishonest conduct includes conduct that shows a lack of fairness or straightforwardness. See In the Matter of Shorter, 570 A.2d 760, 767-68 (DC App. 1990). The intentional purchase of the recognition associated with one lawyer’s name to direct consumers to a competing lawyer's website is neither fair nor straightforward. Therefore, it is a violation of Rule 8.4(c) for a lawyer to select another lawyer’s name to be used in his own keyword advertising.

Proposed 2011 Formal Ethics Opinion 4
Participation in Referral Arrangement
January 26, 2012

Proposed opinion rules that a lawyer may not agree to procure title insurance exclusively from a particular title insurance agency on every transaction referred to the lawyer by a person associated with the agency.

Inquiry #1:

Attorney has developed a good working relationship with Referring Party who, over time, has referred real estate closings to Attorney’s office. Referring Party has some affiliation with Title Insurance Agency. Attorney desires to maintain this working relationship with Referring Party. As a condition of receiving further referrals, Referring Party asks that Attorney agree to procure title insurance exclusively from Title Insurance Agency on every transaction referred to Attorney by Referring Party. May Attorney agree to such a referral arrangement with Title Insurance Agency?

Opinion #1:

No. The ethical duties set forth in the Rules of Professional Conduct prohibit a lawyer from entering into an exclusive reciprocal referral agreement with any service provider. Such an arrangement impairs the lawyer’s ability to provide independent professional judgment in violation of Rules 2.1 and 5.4(c). In addition, the arrangement amounts to improper compensation for referrals in violation of Rule 7.2(b). Finally, such an arrangement creates a nonconsentable conflict of interest between the lawyer and the client. See Rule 1.7.

In most real estate transactions, the client delegates the choice of title insurer to the lawyer, who is charged with acting in the best interest of the client. In determining what is in the best interests of the client, it is appropriate for the lawyer to consider among other things the fees charged for title insurance, the financial stability of the insurer and/or title insurance underwriter, the willingness of the title insurer to provide coverage regarding title matters, and the ability of the insurer to meet the needs of the client with regard to the transaction.

The lawyer may also consider the lawyer’s working relationship with a specific title insurer, particularly where the relationship may prove beneficial to the client. This is true even where the client has been referred to the lawyer by someone affiliated with the specific title insurer. The lawyer may, and should, strive to cultivate the types of business relationships and provide the quality of legal services that will encourage clients and other professionals to recommend the lawyer’s services. What a lawyer cannot do, however, is permit a person who recommends the lawyer’s services to direct or regulate the lawyer's professional judgment in rendering the legal services. See Rule 5.4(c).

If the client indicates a preference as to a particular title insurance company that the lawyer does not believe is the best selection for the client, the lawyer’s role is to counsel the client so that the client may make an informed decision. Ultimately, the choice of the title insurer in a real estate transaction is in the province of the client acting in consultation with the lawyer.

Inquiry #2:

Upon becoming aware that another lawyer has agreed to procure title insurance exclusively from a title insurance agency on every transaction referred to the lawyer by someone associated with the title insurance company, is Attorney under an ethical obligation to report and refer the other lawyer’s conduct to the State Bar?

Opinion #2:

Rule 8.3(a) requires a lawyer to inform the State Bar if the lawyer knows that another lawyer has committed a violation of the Rules of Professional Conduct that raises a substantial question as to that lawyer's honesty, trustworthiness, or fitness as a lawyer. Attorney should communicate his concerns to the other lawyer and recommend that the lawyer contact the State Bar for an ethics opinion as to his continuing participation in what appears to be an improper referral arrangement. After this communication, if Attorney has knowledge that the lawyer has continued his participation in an improper referral arrangement, Attorney must report the lawyer to the State Bar.

Proposed 2011 Formal Ethics Opinion 11
Communication with Represented Party by Lawyer Who is the Opposing Party
January 26, 2012

Proposed opinion rules that a lawyer who is a party in a lawsuit, whether pro se or represented by counsel, may communicate with the represented opposing party relative to the subject matter of the representation with the consent of the opposing party's lawyer.

Inquiry #1:

Attorney A owns rental property. When the tenant stopped making rent payments, Attorney A brought suit against the tenant. Attorney A is representing himself as the plaintiff. The tenant is represented by Lawyer X. Attorney A would like to communicate directly with the tenant in an effort to settle the case. Lawyer X believes that Attorney A is prohibited by Rule 4.2 from communicating directly with the tenant unless Lawyer X consents to the communication. Rule 4.2 prohibits a lawyer from engaging in direct communications about a legal matter with a person who is represented in the matter unless the lawyer for that person consents.

May Attorney A communicate directly with the tenant to discuss the litigation and possible settlement?

Opinion #1:

Yes, with the consent of Lawyer X. Obtaining the consent of opposing counsel is a small burden in light of the protection provided to the client-lawyer relationship by the prohibition on direct communications in Rule 4.2. The rule does not require the consent of the lawyer to be in writing.

Rule 4.2(a) provides that “[d]uring the representation of a client, a lawyer shall not communicate about the subject of the representation with a person the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the consent of the other lawyer or is authorized to do so by law or a court order.” The purposes of Rule 4.2 are: (1) to prevent lawyers from circumventing opposing counsel to obtain statements from adverse parties; (2) to protect the integrity of the client-lawyer relationship; (3) to prevent the inadvertent disclosure of privileged information; and (4) to facilitate settlement by channeling disputes through lawyers. See Rule 4.2, cmt.[1].

In In re Discipline of J. Michael Schaefer, 117 Nev. 496, 25 P.3d 191 (2001), the Nevada Supreme Court concluded that the purposes served by the rule against communicating with represented persons are equally present when a lawyer appears pro se. The Nevada Supreme Court noted that, “the lawyer still has an advantage over the average layperson, and the integrity of the relationship between the represented person and counsel is not entitled to less protection merely because the lawyer is appearing pro se.” Id. at ___, 25 P.3d at 199.

We agree with the reasoning of the Nevada Supreme Court. Accord DC Bar Legal Ethics Committee, Op. 258 (1995); Disciplinary Board of the Hawaii Supreme Court, Formal Op. 44 (2003).

Inquiry #2:

The facts are the same as in Inquiry #1 except that Attorney A is represented by Lawyer B.
May Attorney A communicate directly with the tenant to discuss the litigation including possible settlement?

Opinion #2:

Yes, with the consent of Lawyer X. Attorney A should inform Lawyer B of his desire to communicate directly with the tenant and the lawyers for both parties must agree on the scope and duration of any direct communications between the parties.

A direct communication by a lawyer regarding the subject of the litigation poses the same threats to the interests of the adverse party whether the lawyer is representing a client, proceeding pro se, or being represented by another lawyer. In each scenario, the lawyer may use his legal training to influence or intimidate the adverse party and to interfere with the client-lawyer relationship. Although Rule 4.2, by its own terms, applies only “[d]uring the representation of a client,” the prohibition on conduct that is prejudicial to the administration of justice in Rule 8.4(d) justifies the extension of the anti-contact rule to a lawyer/litigant who is represented by counsel.

This opinion overrules Ethics Decision 2000-8.

Inquiry #3:

Would the responses to Inquiry #1 or Inquiry #2 be different if both of the opposing parties were lawyers?

Opinion #3:

No.

Inquiry #4:

Would the responses to Inquiry #1 or Inquiry #2 be different if the communication was initiated by the opposing party rather than the lawyer/litigant?

Opinion #4:

No. A client cannot waive the protection provided by the rule. Comment [8] states, “The Rule applies even though the represented person initiates or consents to the communication. A lawyer must immediately terminate communication with a person if, after commencing communication, the lawyer learns that the person is one with whom communication is not permitted by this Rule.”

Inquiry #5:

Would the responses to Inquiry #1 and Inquiry #2 be different if Attorney A wants to communicate with the tenant prior to filing suit and Attorney A is aware that the tenant is represented on the lease matter by Lawyer X?

Opinion #5:

No. As noted in Comment [8], Rule 4.2 “applies to communications with any person, whether or not a party to a formal adjudicative proceeding, contract, or negotiation, who is represented by counsel concerning the matter to which the communication relates.”

Inquiry #6:

Rule 4.2(a) permits a lawyer “to encourage his or her client to discuss the subject of the representation with the opposing party in a good-faith attempt to resolve the controversy.”
Does this provision authorize direct communications with the tenant by Attorney A, whether Attorney A appears pro se or through counsel?

Opinion #6:

Yes, with the consent of Lawyer X.

Direct communication presents the same potential dangers, as described in Opinion #1, regardless of Attorney A’s motives. Requiring consent of the represented person’s lawyer helps to insure that the protection and benefits of representation are not lost.

Nevertheless, resolution of a client’s dispute should be facilitated whenever possible. The authority to deny consent should never be used to gain a tactical advantage by delaying a resolution and increasing the costs of litigation. When a lawyer is asked to consent to a direct communication with his or her client, the lawyer should behave reasonably and grant such requests whenever the interests of his or her client will not be harmed. Consent may be granted broadly and for a specified period of time (e.g., the duration of the matter) to facilitate direct communications between the parties if the lawyer deems beneficial to his or her client.

Inquiry #7:

May Attorney A communicate directly with the tenant in the absence of an express request by Lawyer X to refrain from communicating directly with his client?

Opinion #7:

Lawyer X must consent prior to any direct communication by Attorney A with the tenant about the subject matter of the representation. See Opinions #1 and #2.

Inquiry #8:

In family law cases, it is often more efficient, economical, and potentially ameliorating for the spouses to communicate directly with each other about a range of subjects, particularly those relating to the ongoing care of children. Indeed, matters relating to child custody, child visitation, and property distribution are often handled more efficiently and economically outside the courtroom. If one of the parties to a family law case is a lawyer, may the lawyer/spouse communicate directly with the other spouse regarding matters related to the litigation?

Opinion #8:

Yes, provided the lawyer/spouse informs his/her lawyer in advance of his/her request to communicate directly with the other spouse, and counsel for both spouses agree on the scope and duration of direct communications between the parties. Consent of the spouse’s lawyer may be granted at the beginning of the representation for the duration of the case unless revoked by the lawyer. Consent should be liberally granted when there is no potential for harm to the interests of the lawyer’s client. If the lawyer/spouse is pro se, this discussion should occur between the lawyer/spouse and opposing counsel.

Inquiry #9:

In a family law case, if a court orders the parties to consult prior to making a decision about the children, may the lawyer/spouse communicate with the other spouse without the consent of the other spouse’s lawyer?

Opinion #9:

Yes. Consent is not required if the communication is authorized by a court order. Rule 4.2(a). As noted in Comment [3], “a lawyer having…legal authorization for communicating with a represented person is permitted to do so.”

Proposed 2011 Formal Ethics Opinion 14
Outsourcing Clerical or Administrative Tasks
January 26, 2012

Proposed opinion rules that a lawyer must obtain client consent, confirmed in writing, before outsourcing its transcription and typing needs to a company located in India.

Inquiry:

Law Firm would like to outsource its transcription and typing needs to a company located in India. Specifically, voice files would be sent via email and some documents would be scanned to the company via email. The communications would, in turn, be transcribed to paper. The files would include information about client matters and work product regarding client matters. Law Firm investigated the security measures the company utilizes and found them to be extensive.

Is Law Firm required to disclose the outsourcing of these clerical tasks to its clients and obtain their informed written consent as contemplated by 2007 FEO 12?

Opinion:

Yes. 2007 FEO 12 provides that a lawyer must disclose the outsourcing of support services to an assistant in another country and obtain the client's informed written consent to the outsourcing. 2007 FEO 12 does not differentiate between the outsourcing of administrative as opposed to legal support services. Similarly, ABA Formal Opinion 08-451 (2008) provides that “where the relationship between the firm and the individuals performing the services is attenuated, as in a typical outsourcing relationship, no information protected by Rule 1.6 may be revealed without the client's informed consent.” (Emphasis added.) The bar associations of New York and Ohio have reached similar conclusions. NY State Bar Ass’n. Comm. on Prof’l Ethics, Op. 2006-3 (2006); Ohio Ethics Op. 2009-6 (2009).

The ABA opinion notes the existence of unique risk factors that must be evaluated when client information is outsourced to a foreign vendor. As noted in the ABA opinion:

[c]onsideration . . . should be given to the legal landscape of the nation to which the services are being outsourced, particularly the extent that personal property, including documents, may be susceptible to seizure in judicial or administrative proceedings notwithstanding claims of client confidentiality. Similarly, the judicial system of the country in question should be evaluated to assess the risk of loss of client information or disruption of the project in the event that a dispute arises between the service provider and the lawyer and the courts do not provide prompt and effective remedies to avert prejudice to the client.

The protection of client confidences is one of the most significant responsibilities imposed on a lawyer. Given the risk that a foreign jurisdiction may provide less protection for confidential client information than that provided domestically, the outsourcing of any task to another country that involves the disclosure of confidential client information requires disclosure and client consent confirmed in writing. Consent “confirmed in writing” denotes consent that is given in writing by the person or a writing that a lawyer promptly transmits to the person confirming an oral informed consent. See Rule 1.0(c). The client’s consent to the outsourcing may be incorporated into the employment agreement.