California's Rules of Professional Conduct Makeover

The Lawyer’s Lawyer is digressing somewhat in this issue to discuss a topic that all California lawyers are eagerly anticipating – the revised Rules of Professional Conduct.  When I say revised, I mean largely re-numbered.  Don’t despair, however.  All is not lost.  The State Bar has prepared a cross-reference guide that can be located on the State Bar’s website at http://www.calbar.ca.gov/Attorneys/Conduct-Discipline/Rules/Rules-of-Professional-Conduct/New-Rules-of-Professional-Conduct that will save you a lot of time trying to figure out what new number corresponds to the prior designation.  For all of you American Bar Association (“ABA”) Model Rule aficionados, the reference table also compares the new rules to the ABA Model Rules.

The new rules see changes in the wording, changes in the titles, and 16 new rules that we have not seen before.  This article will highlight some of the main changes to the rules and the new rules that go into effect on November 1, 2018 and the ethical implications of the same. 

If it Isn’t Broke, Why Fix it?

I think the burning question in every California lawyers’ mind is why change the numbering?  I have been governed by the goofy numbering nomenclature for years and now I have to re-learn the numbering system?  It is not as if we have all the time in the world to re-learn the numbering system, right?  Well, that being said, it should come as no shock that the reason for the change is to be more in line with the ABA Model Rules of Professional Conduct.  That begs the question: why not simply adopt the ABA Model Rules?  That would have been the easy response, but we Californians have to be different.  While the new rules largely track the ABA Model Rules, we have 7 rules that do not have an ABA Model Rules counterpart.

According to an article written in the California Bar Journal, since California’s rules had not undergone any substantive changes in two decades and California was the only state that did not pattern its rules of professional conduct after the Model Rules, the Commission for the Revision of the Rules of Professional Conduct recommended that California adopt the Model Rules format.  (California Bar Journal, Ethics Rules Get a Rewrite, http://www.calbarjournal.com/April2010/TopHeadlines/TH3.aspx)  After eight years, the Commission completed its task with the California Supreme Court adopting 69 of the 70 rules drafted by the Commission.

What’s Changed?

As noted above, wording of the rules has changed in addition to the titles of the rules.  Since the most popular rules we are interested in here at the Lawyer’s Lawyer, let’s compare new Rule 1.7 Conflicts of Interests – Current Clients with current Rule 3-310(C).  The first significant change is in the definition of “informed written consent.”  Under Rule 3-310, informed written consent is simply defined as “the client’s or former client’s written agreement to the representation following written disclosure.”  (Rules Prof. Cond., rule 3-310(A)(2).)  “Written disclosure” is defined as “informing the client or former client of the relevant circumstances and to the actual and reasonably foreseeable adverse consequences of the client or former client.” (Rules Prof. Cond., rule 3-310(A)(1).)

Under the new rules, “informed written consent” is not defined within the text of Rule 1.7 itself.  Rather, the new rule 1.0.1 titled “Terminology” sets forth the definitions of several keys words or phrases used throughout the rules.  For instance, the new rules define “informed consent” as “a person’s agreement to a proposed course of conduct after the lawyer has communicated and explained (i) the relevant circumstances and (ii) the materials risks, including any actual and reasonably foreseeable adverse consequences of the proposed course of conduct.”  (Rules Prof. Cond., rule 1.0.1(e).)  “Informed written consent” simply means that the informed consent needs to be in writing.  (Rules Prof. Cond., rule 1.0.1(e-1).)  The new rule has effectively combined the former “written disclosure” and “informed written consent” into one definition.  Not earth-shattering, but there is a significant difference between the two.  The new rule uses the term “person” as opposed to “current or former client” in the outgoing rule 3-310.  “Person” is not confined to a current or former client, but could also include a non-client or prospective client as the only limitation on “person” is that it has the same definition as “person” is defined in Evidence Code section 175.  (Rules Prof. Cond., rule 1.0.1(g-1).) 

Not to be an alarmist, but this new rule suggests that the informed written consent is much broader and extends beyond the client.  This makes sense viewed in light of several of the new rules that we have not seen before, specifically the one dealing with prospective clients as more fully discussed below.  (See Rules Prof. Cond., rule 1.18.)

New Rules

There are 16 new rules that have been added that we have not seen before in California.  The new rules are as follows:

Rule 1.2           Scope of Representation and Allocation of Authority
Rule 1.8.2        Use of Current Client’s Information
Rule 1.8.11      Imputation of Prohibitions Under Rules 1.8.1 to 1.8.9
Rule 1.10         Imputation of Conflicts of Interest: General Rule
Rule 1.11         Special Conflicts of Interest for Former and Current Government Officials and Employees
Rule 1.12         Former Judge, Arbitrator, Mediator or Other Third-Party Neutral
Rule 1.18         Duties to Prospective Client
Rule 2.1           Advisor
Rule 2.4           Lawyer as Third-Party Neutral
Rule 3.2           Delay of Litigation
Rule 3.9           Advocate in Non-adjudicative Proceedings
Rule 4.1           Truthfulness in Statements to Others
Rule 4.3           Communicating with an Unrepresented Person
Rule 4.4           Duties Concerning Inadvertently Transmitted Writings
Rule 5.3           Responsibilities of a Subordinate Lawyer
Rule 6.3           Membership in Legal Services Organizations

A few of these new rules are worth noting.  The first is Rule 1.2 – Scope of Representation and Allocation of Authority.  In particular, Rule 1.2(b) specifically addresses and attorney’s ability to limit his or her scope of representation.  In this regard, the rules states, “[a] lawyer may limit the scope of representation if the limitation is reasonable under the circumstances, is not otherwise prohibited by law, and the client gives informed consent.”  This is a departure from the seminal case of Nichols v. Keller (1993) 15 Cal.App.4th 1672, where a workers compensation attorney was sued for malpractice after failing to advise his client regarding a possible third party claim that ultimately was time-barred.  In Nichols, the court held that attorneys can limit the scope of representation, but the attorney must make the limitations in representation clear to the client.  (Id. at 1687.)

In the author’s view, Rule 1.2 unnecessarily expands an attorney’s duty to the client by requiring the attorney to provide “informed consent” about matters that he or she is not going to pursue on the client’s behalf, as opposed to simply advising the client “You may have a case for this, but I will not pursue this on your behalf. You should seek the advice of another attorney in this regard, but do not delay as there are limitations periods for bringing claims.”  Under the new rule, this advice may not be sufficient.  This is a trap for the unwary, particularly family law attorneys, where limited scope representation is commonplace.  Come November 1, 2018, if you are limiting the scope of your representation, make sure you provide the requisite informed consent.

Another rule of interest is Rule 1.18 regarding prospective clients.  A prospective client is one who consults an attorney, directly or indirectly through an authorized representative, for the purposes of retaining the attorney or securing legal advice from the attorney.  (Rules Prof. Cond., rule 1.18(a).)  However, if the attorney declines the representation and the prospective client has provided confidential information consistent with Business & Professions Code section 6068(e), then the attorney may not represent a client in the matter for which the prospective client consulted attorney or a substantially related matter unless the client and prospective client provide informed written consent or the attorney who was consulted is effectively screened from participating in the matter after providing written notice to the prospective client.  (Rules Prof. Cond., rule 1.18(d).)

This rule creates another potential problem for the unwary attorney.  Let’s say your attorney friend is representing a client in a transactional matter that may be heading towards litigation.  However, your attorney friend does not provide the names of the potential parties, yet provides you with an overview of the case and potential claims to see if you are interested in taking on the case.  Turns out that your attorney friend’s client is contemplating suing your current client.  Given that your attorney friend is arguably an authorized representative of the prospective client, the conversation that you had with your attorney friend may now preclude you from representing your existing client in this matter unless someone else in your firm can represent the client and you are effectively screened from participating in the litigation after giving notice to the prospective client.  However, this does not preclude the prospective client from seeking to disqualify you from representing your current client.

Consequently, in light of this new rule, you must be careful in the conversations you have with colleagues who may be referring a prospective client to you to ensure that you don not inadvertently obtain confidential information that may preclude you from not only representing the prospective client, but also an existing client.  It is going to require attorneys to be more diligent in their screening process for prospective clients.  Additionally, if you are already not doing this, before meeting with the prospective client or discussing a prospective client with a colleague, get the names of all potential parties to run a conflict check before obtaining any information about the case.  If there is a conflict, this will eliminate the inadvertent disclosure of confidential information from the prospective client that may result in a disqualification motion down the road or your inability to represent an existing client.

Lastly, Rule 4.3 regarding communicating with an unrepresented person is a change.  Again, in this author’s humble opinion, this rule is creating a duty that did not exist previously.  Typically, an attorney does not owe any duty to the opposing party.  (Fox v. Pollack (1986) 181 Cal.App.3d 954, 957.)  However, by this new rule, we as attorneys dealing with unrepresented parties must go the extra step of making sure that the unrepresented party knows that we are interested in the matter at issue.  The rationale behind the rule is “to protect unrepresented person, regardless of their interests, from being misled when communicating with an attorney who is acting for a client.”  (Rules Prof. Cond., rule 4.3, cmt. 1.)  Granted there are a few attorneys who ruin it for the rest of us by taking advantage of an unrepresented party and will attempt to mislead them; however, it should be patently obvious to the unrepresented party that the attorney representing his opponent is not your friend and has the duty to zealously represent his client.  In other words, it should be patently obvious to the unrepresented party that the opposing lawyer is interested in the matter at hand.  We should not be required to further document this fact in writing as it does nothing but create further exposure for the attorney.

Conclusion

The new Rules of Professional Conduct are coming.  With new numbering, new language and additional rules that we have not seen before, there will be growing pains.  However, think of these new rules as a new opportunity to re-familiarize yourself with the Rules of Professional Conduct and your ethical obligations as a California attorney.  It will be well worth your time and effort.  Until next time!

William A. Muñoz, Esq, is a Civil Trial Attorney, Legal Ethics Expert, and Third-Party Neutral with over 20 years of experience defending attorneys, and other professionals such as architects and engineers, real estate agents/brokers, real estate appraisers, and insurance brokers, as well as defending personal injury, toxic torts, products liability, defamation, wrongful termination / harassment, wage and hour and discrimination claims.

Mr. Muñoz also serves as a Dispute Resolution Conference judge for El Dorado County Superior Court, a judge pro tem for Sacramento County Superior Court’s Settlement Conference Department, and more recently, a mediator for the Third District Court of Appeals Mediation Program. His approach is further informed by the renowned Straus Institute for Dispute Resolution at Pepperdine University Caruso School of Law mediation training program and the National Conflict Resolution Center mediation training program.

©Copyright - All Rights Reserved

DO NOT REPRODUCE WITHOUT WRITTEN PERMISSION BY AUTHOR.