Ethical Guidelines for Practicing in a Virtual Law Office

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Earn one hour of Legal Ethics MCLE credit by reading the article below and answering the questions on the Self-Study MCLE test. Send your answers, along with a check for $20 ($30 for non-members), to the address on the test form.


Banola_Sarah_webVirtual law practice is becoming increasingly popular as an alternative to the traditional physical law office. It typically involves the use of a secure internet portal to render legal services to, and communicate with clients.[1] Advocates emphasize the decreased real estate and overhead costs, increased productivity and the work-life balance that may result from lawyers working from home. Critics stress the need for in-person client and team meetings to collaborate and solve complex legal problems. As shown by the recent stir created by the Yahoo! no-work-from-home policy, management concerns and the effect on employee morale are hotly contested issues. It is clear, however, that lawyers practicing in a virtual law office need to comply with employment laws and the rules of professional conduct.

Employment law issues arising from operation of a virtual law office are similar to those arising from telecommuting policies. Virtual law firms should implement practices to address: (1) methods for tracking and reporting hours worked, meal and rest breaks; (2) preservation of confidential information; (3) employee privacy expectations, including monitoring computer usage and ownership of computers or other equipment; (4) harassment; and (5) workers’ compensation and safety issues.

Virtual law practitioners must also consider the following ethical issues:

California’s Rules of Professional Conduct Apply to Virtual Law Offices

No California Rule of Professional Conduct specifically addresses lawyers who practice in virtual law offices. Rather, the same rules of professional conduct that apply to attorneys practicing in traditional law firms apply to attorneys practicing in a virtual firm.[2] The application of the rules, however, raises unique issues for virtual law practitioners, particularly in regard to the following California Rules of Professional Conduct:[3]

California lawyers and courts may also look to the ABA Model Rules and ethics opinions for guidance on practicing in a virtual law firm.[4]

Although the Model Rules do not specifically address virtual law firms, in August 2012, the ABA approved recommendations by the Ethics 20/20 Commission to amend the Model Rules to address issues regarding a lawyer’s use of technology, including:

  • Model Rule 1.1 (revising Comment [8] to confirm that the duty of competence includes “keeping abreast of … the benefits and risks associated with relevant technology”).
  • Model Rule 1.4 (revising Comment [4] to reflect changes in communication technology).
  • Model Rule 1.6 (adding new paragraph (c) requiring lawyers to undertake reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or access to, confidential client information and adding comment [18] regarding safeguarding confidential client information).
  • Model Rule 1.18 (revising the rule and Comment [2] to clarify when electronic communications give rise to a prospective client-lawyer relationship).
  • Model Rule 5.3 (revising the title of rule and Comment [2] and adding Comments [3]-[4] to clarify a lawyer’s duties when outsourcing legal work to non-lawyer service providers).
  • Model Rule 7.1, Comment [3], Model Rule 7.2, Comments [1]-[3], [5] and Model Rule 7.3, Comments [1], [3] (involving revisions that address a lawyer’s use of technology for client development).

In addition to the Model Rules, several state bar associations have issued formal ethics opinions addressing ethical issues that arise from a lawyer’s practice of law through a virtual law office.[5]

Formation of Attorney-Client Relationship and Client Intake

In communicating with prospective clients via a secure website portal, lawyers should avoid forming unintended attorney-client relationships by including disclaimers on their websites that “posted information is not legal advice” and that communication through the website does not create an attorney-client relationship or a duty of confidentiality. In addition, before entering into an engagement agreement, lawyers should obtain sufficient information from the client to screen for conflicts of interest and ensure that the party they are communicating with is the actual client or someone with authority to act on the client’s behalf.[6]

Duty of Confidentiality

Lawyers are also required to take reasonable measures to safeguard confidential client information on the website portal, including investigating and monitoring third-party providers, limiting access to confidential information and obtaining written assurances from the provider concerning data security and the handling of breaches of confidentiality.[7] If a lawyer is not able to evaluate the security of the technology used, the lawyer must seek additional information, or consult with someone who possesses the requisite knowledge to ensure compliance with the lawyer’s duties of competence and confidentiality.[8]

Duty of Competence

In addition to ensuring that confidential information is protected, the lawyer’s duty of competence includes implementing data backup systems for the paperless law office. In addition, the lawyer must supervise subordinate attorneys and staff who may be working in various physical locations to ensure compliance with the lawyer’s professional obligations.[9]

Duty of Communication

Although the duty to keep the client “reasonably informed about significant developments” and “to promptly respond to reasonable requests for information“[10] may seem easier through electronic communication, the attorney should ensure that the client is receiving and understanding the information exchanged via the website portal.[11] In certain circumstances, phone conferences, video-conferences or in-person meetings would be prudent.

Duty of Candor in Advertising and Marketing

To avoid claims of misleading or false statements under CRPC 1-400 and corresponding State Bar Act provisions, lawyers should disclose to potential clients the nature and composition of the firm’s virtual law office, relevant practice areas and the jurisdictions where its lawyers are licensed to practice.

Avoiding Unauthorized Practice of Law

Because a virtual law firm’s audience reaches across jurisdictions, lawyers must avoid the unauthorized practice of law when responding to requests from potential clients outside the jurisdictions where the lawyers are admitted to practice. In California, engaging in the unauthorized practice of law is not only a basis for discipline, it is a misdemeanor.[12] What constitutes the practice of law is a fact-specific determination that is the subject of California case law.[13]

Under the Model Rules, Rule 5.5(b)(1) prohibits a lawyer from establishing a “systematic and continuous presence” for the practice of law in a jurisdiction in which the lawyer is not admitted to practice. While Comment [4] provides that a lawyer’s “presence may be systematic and continuous even if the lawyer is not physically present” in the jurisdiction, the rule provides no other guidance on when virtual practice is sufficiently “systematic and continuous” to require that the lawyer be licensed in that jurisdiction.

On June 19, 2012, the Ethics 20/20 Commission published an “issues paper” proposing several options to clarify when virtual practice in a jurisdiction is “systematic and continuous,” including identifying relevant factors that lawyers and disciplinary authorities should consider and referring the issue to the Standing Committee on Ethics and Professional Responsibility for an ethics opinion. Although the Commission received substantial feedback, it ultimately decided to defer the issue as virtual law practice and the pertinent technology continues to develop.[14]

Virtual law practice offers many potential benefits, but also presents distinct issues regarding a lawyers’ compliance with the existing rules of professional conduct. While California’s rules of professional conduct may not keep pace with the evolving nature of virtual law practice, virtual law practitioners need to stay abreast of changes in California’s rules, and should remain alert to new ethics opinions, amendments to the Model Rules and law practice management standards[15] addressing virtual law practice.


Download the MCLE Self-Study test form here: Earn one hour of Legal Ethics MCLE credit by reading the article above and answering the questions on the Self-Study MCLE test. Send your answers, along with a check for $20 ($30 for non-members), to the address on the test form.


Sarah Banola is a litigation attorney at Cooper, White & Cooper LLP’s San Francisco office. Ms. Banola represents lawyers and law firms in matters related to legal ethics, legal negligence, attorney-client fee disputes, professional discipline, conflicts of interest, disqualification motions and law firm break-ups. Ms. Banola is a contributing editor to the professional responsibility chapter of the California Practice Guide on Employment Litigation and the legal malpractice section of the California Practice Guide on Claims and Defenses (The Rutter Group, a division of West, a Thomson Reuters business, 2012). She also serves as Secretary of the Bar Association of San Francisco’s Legal Ethics Committee.


[1] A virtual law office has been defined as the “delivery of, and payment for, legal services exclusively, or nearly exclusively, through the law firm’s portal on a website, where all of the processing, communication, software utilization, and computing will be internet-based.” Cal. State Bar Formal Opn. 2012-184.

[2] Cal. State Bar Formal Opn. 2012-184.

[3] The California State Bar Commission for the Revision of the Rules of Professional Conduct recommended, and the State Bar Board of Trustees has approved, proposed revisions to California’s rules of professional conduct that conform in style and format to the American Bar Association’s Model Rules, and contain many substantive provisions similar to those in the Model Rules. These proposed revisions are currently under consideration for adoption by the California Supreme Court.

[4] CRPC 1-100(A); Vapnek, Tuft, Peck & Wiener, Cal. Prac. Guide: Professional Responsibility, ¶¶1:88-90 (The Rutter Group, a division of West, a Thomson Reuters business, 2012).

[5] See, e.g., Cal. State Bar Opn. 2012-184; Penn. State Bar Opn. 2010-200; Florida State Bar Opn. 00-4.

[6] See Cal. State Bar Formal Opn. 2012-184.

[7] See Cal. State Bar Formal Opn. 2012-184.

[8] Id.

[9] Id.

[10] CRPC 3-500.

[11] See Cal. State Bar Formal Opn. 2012-184.

[12] Bus. & Prof. C. § 6126.

[13] See, e.g., Birbrower, Montalbano, Condon & Frank, P.C. v. Sup. Ct. (1998) 17 Cal.4th 119.

[14] ABA Commission on Ethics 20/20, House of Delegate filing (February 2013) available at: http://www.americanbar.org/content/dam/aba/administrative/ethics_2020/20121112_ethics_20_20_overarching_report_final_with_disclaimer.authcheckdam.pdf.

[15] See, e.g., ABA Law Practice Management Section eLawyering Task Force, “Suggested Minimum Requirements for Law Firms Delivering Legal Services Online” (Oct. 15, 2009).

 

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