NEW RULES OF PROFESSIONAL CONDUCT: TEN RULE CHANGES MOST LIKELY TO AFFECT YOUR PRACTICE

James M. McCauley

VSB Ethics Counsel

Much has been published and said about the new Virginia Rules of Professional Conduct which go into effect January 1, 2000. In addition to worrying about whether the "Y2K bug" will cause their law office computers to implode, lawyers will also have to contend with an entirely new format of legal ethics rules. However, locating and using the new ethics rules should prove much easier than dealing with computer glitches. The rules already appear in a number of publications. Subscribers to the Michie Code of Virginia will find the new Rules of Professional Conduct in Volume 11 containing all the Rules of the Supreme Court of Virginia. The Michie Company has even published a small, separate gray booklet containing just the new rules. The Virginia State Bar's Annual Professional Guidelines issue will have the new rules along with the other rules and regulations governing the bar. The new rules also appear in another publication offered by Virginia CLE including four (4) detailed comparison charts prepared by Thomas E. Spahn. Finally, the Rules of Professional Conduct are posted on the Virginia State Bar's website (www.vsb.org) and can be loaded into your web browser by clicking on the link to "Professional Guidelines."

In addition, the "Legal Ethics Hotline" (804-775-0557) remains available to answer your ethics questions, especially questions raised by the application of the new rules. Now lets turn to those rules which, in my opinion, represent the most significant fundamental changes from the old Code of Professional Responsibility.

• Duty to Cooperate With Bar Investigations. Rule 8.1 makes it a separate disciplinary offense for an attorney to obstruct or refuse to respond to disciplinary inquiries, unless the information sought by Bar Counsel is protected under Rule 1.6 or would violate the lawyer's privilege not to self-incriminate.⁽¹⁾
• Duty to Advise Client of Advantages, Disadvantages and Availability of Alternative Dispute Resolution (i.e., Mediation). In all cases, a lawyer is expected to consult with his or her clients about the means to solve or address their legal problems. In some cases, this includes informing the client regarding the availability of mediation, its benefits and its disadvantages. Rule 1.2, Comment [1].
• Clearer Guidance on Conflicts When Lawyers Switch Firms. Conflicts arise when a lawyer leaves one firm and joins another which represents a client adverse to a party represented by the old firm. The new rules make it clear that if the attorney changing firms did not participate in the representation of old firm's client, and did not acquire confidences and secrets, the new firm which the attorney has now joined is not conflicted out of representing its client. Rule 1.9, Comments [3], [4].⁽²⁾
• Screening Former Government Attorneys Who Join Private Firms. Private law firms which hire government attorneys will not be disqualified from representing a private client on a legal matter in which the former government attorney participated, provided they comply with Rule 1.11 (b). The new rule eliminates the requirement of consent from the governmental agency, provided the former government attorney is screened.⁽³⁾
• Sale of a Law Practice. Rule 1.17 will permit attorneys to sell their law practice, including "goodwill" provided notice to clients is given and the clients have an opportunity to object to the transfer of their cases to the purchasing lawyer. Opinions interpreting the old Code, forbid the sale of the "goodwill" of a law practice.⁽⁴⁾
• Rules Governing Lawyers When They Serve as Mediators. Rules 2.10 and 2.11 provide ethical standards for lawyers who are mediators, an area not covered under the Code, but dealt with in several legal ethics opinions.⁽⁵⁾
• Discovery Abuse. One of the new rules aimed at encouraging professionalism, Rule 3.4 (e), specifically forbids frivolous discovery requests and requires a lawyer to make a reasonably diligent effort to comply with a legally proper discovery request from an opposing party.
• Entire Firm Not Disqualified if One of its Lawyers has to Testify. Under the Code's "witness advocate rule" [DR 5-101(B), DR 5-102] if a lawyer has to testify on behalf of a client, or is called by an adversary to give testimony that would hurt the lawyer's client, the entire firm has to withdraw as counsel of record. Under new Rule 3.7, only the testifying lawyer is disqualified. Another lawyer in the firm can assume the role as advocate even though one of his partners or associates will testify.
• Disclosure of Controlling Adverse Legal Authority. Once a mandatory rule under the original Code of Professional Responsibility⁽⁶⁾, the Code was revised in 1983 and the rule was relegated to an ethical consideration (EC)⁽⁷⁾-an aspirational goal rather than an enforceable rule. Now it is a mandatory duty again. Rule 3.3 (a)(3).
• Responsibilities of a Partner or Supervisory Lawyer. The new rules make it clear that a partner or supervising attorney may face discipline for the misconduct of his or her associate or subordinate attorney. Rule 5.1. There is no counterpart to this rule in the Code.

Conclusion

There are other changes and nuances not covered here. One final change is noteworthy. Rule 8.4 (a) defines professional misconduct to include not only violations of the rules, but also attempts to violate the rules. No similar rule exists under the Code and the Office of Bar Counsel now appears to have the authority to prosecute attempted ethical violations. The new year should prove interesting for us all.

ENDNOTES

1. If a complaint against an attorney is made by a client or former client, then the attorney is no longer bound by the confidentiality requirements under Rule 1.6 and may reveal information that would otherwise be protected in order to defend himself against a client's accusations of misconduct. Rule 1.6 (b)(2). In regard to trust accounts, since they are records which the attorney is required to maintain as a member of the profession, such required records are not regarded as privileged or protected, under the attorney client-privilege or the privilege against self-incrimination, from disclosure to an agency or authority which has the right to examine them. In the Matter of Stephen L. Bryant, 27 Va. Cir. 414 (Richmond 1992) (overruling Respondent's Motion to Quash Bar subpoena for trust account records), citing Shapiro v. United States, 355 U.S. 1, 17 (1947) (governmental interest in production of records required by law to be kept in order that certain transactions which are subject of government regulation may be validly established overrides claims of self-incrimination and attorney-client privilege) and Lesh v. United States, 715 F. Supp. 1333, 1335 (E.D. Va. 1989) (there is no attorney-client privilege in bank records maintained by an attorney for his clients). In addition, as to trust accounts required to be kept under Rule 1.15, every lawyer or law firm shall be conclusively deemed to have consented to the reporting and production requirements mandated under that rule. Rule 1.15 (f)(1)(v).

2. The Code of Professional Responsibility does not address this problem, although several legal ethics opinions interpreting DR 5-105 apply the "functional analysis" approach embodied in the new rules. See LEOs 1428, 1629.

3. "Screening" a lawyer from participation in a matter is sometimes referred to as setting up a "Chinese Wall."

4. Oddly enough, the Code of Professional Responsibility is silent on the sale of a law practice. Yet ethics opinions applying the Code, concluded that it is unethical to sell the goodwill of a law practice. See LEO 956. In LEO 1324, the committee opined that a lawyer becoming a judge may sell the physical assets of a law firm but not its goodwill, active client files or work in progress. It is improper to inflate the value of the assets to disguise the sale of the practice as a going business.

5. LEOs 511, 519, 544, 590, 849 and 1684.

6. DR 7-106 (B)(1).

7. EC 7-20.