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TABLE OF CONTENTS

• Features:
  The Future of Law in Admissions to the CA State Bar - Richard Frankel
  It’s Always Darkest Before Dawn - Nick Casper
  “BYOCR” (Bring Your Own Court Reporter) - Hon. David B. Flinn
  Growing Trends in Today’s Legal World -  Pete Tormey and Felix Antero
  Tomorrow’s Lawyer - Mark Ericsson
  SELF-STUDY MCLE Ethical Guidelines for Practicing in a Virtual Law Office - Sarah Banola

• Spotlight:
  The Good, the Bad and the Ugly With Online Reviews - Carol M. Langford

• Columns:
  President’s Message: The Changing Times - Jay Chafetz
  Inside Column: Revolutionizing Law - Elva Harding, Guest Editor
  Inns of Court - Matthew Talbot

• News & Updates:
  Women’s Section Annual Wine Tasting Event, Honoring Judge Cram [photos] 
  Barristers/Young Lawyers Section BRIDGING THE GAP [photos] 
  Solo Section Breakfast [photos]

• More:
  Coffee Talk: How have the court budget cuts affected you?

Elva Harding, Guest Editor

Welcome to the brave new world of providing legal services. In case there is any doubt out there, let me assure you, the way legal services are purchased, how they are delivered, who provides them and how they are priced is undergoing a revolution. In large part, these changes are being driven by the same forces that built Silicon Valley—technological change, innovation and American entrepreneurship.

These changes are not just a passing fad. Consider the Reinvent Law Laboratory, a project of Michigan State University College of Law which is funded with a substantial grant from the Ewing Marion Kauffman Foundation, and is dedicated to advancing entrepreneurship and innovation. Reinvent Law recently held a day-long conference in our own Silicon Valley (also London and Dubai). Lawyers, leaders of online virtual law firms (such as Axiom Law and DirectLaw), journalists, venture capitalists and law professors presented their visions for a more efficient, online, technologically sophisticated law industry that is funded with private investment. An industry where the billable hour is extinct, freelancers replace associates and access to justice is discussed in terms of online dispute resolution. This is not your grandfather’s law practice. Mark Ericsson explores our changing industry, both here and abroad, in his article, “Tomorrow’s Lawyer.”

In this issue of the Contra Costa Lawyer, we take a look at how the practice of law is advancing here in Contra Costa County. Access to justice is a primary concern of the Contra Costa bench and bar. The severe budget cuts that our courts have suffered have hit close to home. We have all heard the stories of the rising number of pro per litigants, the long waits to file documents, the long delays for trial dates. In his article, “It’s Always Darkest Before Dawn,” Nick Casper brings light to the impact of budget cuts on our courts and discusses CCCBA’s efforts to reach our state legislators to advocate for more funding. One of the results of the budget cuts is that court reporters are no longer provided in civil, family and probate courts. Our thanks to Judge Flinn for explaining the rules by which litigants may provide their own court reporters (see “BYOCR“).

As first-year associate positions become scarce, more young attorneys are hanging their shingle straight out of law school. The State Bar has taken note of this development, and is considering adding a new practical skills training requirement before licensing new members. Dick Frankel’s article fills us in on the task force’s recommendations. Additionally, Pete Tormey, a recent JFK Law School graduate, and Felix Antero look at strategies for building a competitive modern practice in “Growing Trends in Today’s Legal World.”

Finally, with the decline of traditional law firms, more attorneys are working solo or as part of virtual law firms. Sarah Banola’s article considers the ethical implications of virtual law practice.

As you read this issue, I hope you will keep in mind that the Bar Association is a resource to help you navigate these changes. Again this year, we are presenting our popular Law Practice Management Series, which got underway in April with practical advice on how to develop a business plan and get to work on business development. At this month’s LPMS seminar, Randy Wilson will discuss the ethical issues related to lawyers’ use of social media. Other programs will include practical steps to establishing a modern law practice, issues and best policies around use of mobile devices by your law practice employees, transitioning practices for part-time or retiring lawyers and what you need to know about the Affordable Health Care Act. For more information, call the Bar Association or check online at www.cccba.org.

As Mark Ericsson said in our March issue, these are certainly exciting times, and perhaps a bit uncomfortable as the new normal takes hold. But with exciting times comes energy, innovation and most importantly, opportunity. Our challenge is to harness the energy and capture the best of these new ideas to build a better, stronger legal system that can well serve our citizens.

Elva D. Harding is a real estate and business attorney and founder of Harding Legal, dedicated to providing efficient and effective legal service to individuals and small, mid-sized and family-owned businesses. Elva serves on the Bar Association’s Board of Directors and is Chair of the Law Practice Management Series task force. Contact Elva Harding at (925) 215-4577 or www.edhlegal.com.

Jay Chafetz, 2013 CCCBA Board President

The theme of this month’s edition of the Contra Costa Lawyer—the future of law practice—has me reflecting about some potential changes in the practice of law and the nature of change itself.

Some people crave change. Others, like me, work more on a model of “if it ain’t broke, don’t fix it.” Change that we choose can be exhilarating. It can stimulate our imaginations with the promise of a better life. Change that is foisted upon us is another matter. The latter may instill resentment, discomfort, even fear. We can often anticipate the changes that the future will bring. Exactly how we will deal with them is less certain. But experience teaches us that deal with them we will.

I am told that there are some changes on the horizon regarding the practice of law. I wonder how they will affect us.

The first is that one day soon a requirement for admission to the bar or engaging in practice may be a certain amount of practical experience (see Richard Frankel’s article). This prerequisite may be required to be fulfilled by participation in clinics or specialized classes in law school about the actual practice of law. It may instead take the form of required internships after graduation from law school. I know that one law school in our community, John F. Kennedy University College of Law, is currently debating how to prepare for this coming requirement, what clinics to offer and how to balance them with other aspects of the required curriculum.

For as long as I’ve known, the model we followed was that law firms trained new lawyers. Perhaps they are no longer willing to do so. Or perhaps there has been such a contraction in the job market that they no longer can, and too many people graduating from law school are forced to start their own practice, servicing whatever clients they can find without as much practical knowledge of how to do so as would be optimal. Whatever the reason, I am told that the requirement for law students to obtain practical experience before they are admitted to the bar or engage in the practice of law is coming.

A second possible change is what is being called Limited Practice Licensing. This proposal concerns the possibility of creating a new category of licensed technicians able to give basic legal advice on routine matters. The State Bar held its first public meeting on April 11 to discuss this idea. I will quote here from an email that I recently received concerning the idea:

“The idea of limited-practice licensing surfaced at a State Bar retreat in San Diego in January where the Board of Trustees looked at ways of improving public protection, access to justice and the State Bar’s regulatory functions. Proponents of limited–practice licensing see it as a way to improve delivery of legal services to the public, who often turn to non-lawyers for assistance when they can’t afford the services of licensed attorneys. Such a program, supporters argue, would make legal services more affordable, while ensuring consistency and quality. California currently allows non-lawyers to perform some tasks that don’t constitute the practice of law, such as helping people fill out legal forms. Paralegals working under attorney supervision, unlawful detainer assistants, legal document assistants and immigration consultants registered by county clerks or the California Secretary of State can also assist consumers with some legal needs, short of practicing law. Each year, the State Bar receives hundreds of complaints about businesses and individuals practicing law without a license, but it is limited in the action it can take because it does not regulate non-attorneys.”

Are either of these proposed changes going to be dramatic for current or future lawyers? Are they to be feared or welcomed? There is no way to know. The only thing certain in our lives is change, not whether any particular change will ultimately prove to be good or bad.

In addition to serving as CCCBA’s President this year, Jay Chafetz has a solo practice in Walnut Creek and specializes in personal injury, medical malpractice, elder abuse, trust and estate litigation and general civil litigation.

Most American law schools today follow the traditional Langdellian model of legal education, emphasizing doctrinal study as the basis for teaching students the art of “thinking like a lawyer.” Over the course of more than a century since this model of legal education took root around the country, law schools have gradually incorporated clinical experience and practical skills training into their core curriculum.

The importance of providing new lawyers with opportunities to develop practical skills has been driven, in large part, by the rapidly changing landscape of the legal profession. Due to the economic climate and client demands for trained and sophisticated practitioners fresh out of law school, fewer and fewer opportunities are available for new lawyers to gain structured practical skills training early in their careers. Many new lawyers, in fact, are now entering the profession as solo practitioners, without the solid practical skills foundation necessary to represent clients in a competent manner and with nowhere to turn to build that foundation.

From the standpoint of regulatory policy, this situation presents serious issues of public protection that cannot be ignored. The record that we have compiled and examined confirms the importance and urgency of a thoughtful policy response.

Following a series of hearings during which the Task Force took testimony from many practitioners, legal academics, judges, clients, and members of the public at large, and based on a thorough review by the Task Force of the literature on the topic of practical skills training for new lawyers (an extensive body of work going back decades that has repeatedly addressed the same set of questions considered here, and that has time and again confirmed the need for reform), we now answer the charge given to us in the affirmative. In our view, a new set of practical skills requirements focusing on competency and professionalism should be adopted in California in order to better prepare new lawyers for successful transition into law practice, and many of these new requirements ought to take effect pre-admission, prior to the granting of a law license.

The draft Task Force recommendations are:

• Pre-admission: A practical skills training requirement fulfilled prior to admission to practice. There would be two routes for fulfillment of this pre-admission practical skills requirement: either in law school, where 15 units of course work following the first year of law school must be dedicated to developing practical skills and serving clients, or, alternatively, employment in a State Bar-approved clerkship or apprenticeship program of at least six months in duration.
• Pre-admission or post-admission: An additional practical skills training requirement, fulfilled either at the pre- or post-admission stage, where 50 hours of legal services are specifically devoted to pro bono or low bono service. Credit towards those hours would be available for “in-the-field” experience under the supervision and guidance of a licensed practitioner or a judicial officer.
• Post-admission: Ten additional hours of Mandatory Continuing Legal Education (MCLE) courses for new lawyers, over and above the required MCLE hours for all active members of the State Bar, specifically focused on practical skills training. Alternatively, credit towards these hours would be available for participation in mentoring programs.

The recommendations of the task force incorporate the thinking and findings of recent articles which tend to focus on the following facts:

• Law school admissions are generally down about 15 percent.
• Law school graduates frequently incur debt in excess of $100,000.
• About 50 percent of law school graduates are obtaining full time employment in the legal profession.
• More and more new lawyers are hanging out their shingle and are joined by experienced lawyers whose firms have been downsized.
• Except for Internet based legal services (growing at about a 30-35 percent rate), traditional law firms are “hanging on.”
• Legal services for the poor and middle class continue to be largely either not available or cost prohibitive. Ask any judge about the volume of self-represented litigants in civil proceedings.
• Court budget reductions have adversely impacted the administration of justice.
• Private ADR services have created a broader market share of the civil dispute business for those that can afford such services.
• The practice of law has dramatically changed over the past 10 years through the use of technology.

The Task Force is comprised of more than 20 individuals from private attorneys, public attorneys, in-house counsel, law school deans and professors and members of the judiciary. The Task Force has been meeting over the past year. The last meeting was in Los Angeles on April 23 and the final meeting will be on June 11 in San Francisco. All meetings are open to the public.

The objective of the Task Force is to present its final report after the June 11 meeting to the Board of Trustees for consideration for eventual submission to the California Supreme Court for adoption.

This article is abridged from a drafting proposal written by Jon Streeter, Task Force Chair and former California State Bar President, with contributions from other Task Force members. The entire text of Mr. Streeter’s comments and Task Force recommendations and analysis are available on the California State Bar website at www.calbar.ca.gov.

Richard Frankel, a San Ramon attorney, is a member of both the Task Force and Committee of Bar Examiners, State Bar of California.

Since 2008, the budget of the California court system has been slashed by $1.2 billion, a cumulative reduction of over 40 percent. As Chief Justice Tani Cantil-Sakauye emphasized, spending on the judicial branch now amounts to only 1 percent of the state’s general fund (down from a historical 2 percent), a pittance to meet the needs of 38 million Californians. Statewide, courts have eliminated over 2,000 staff positions, closed 175 courtrooms and shuttered 61 courthouses. The operating hours of filing clerks have been reduced, courtrooms routinely no longer provide court reporters in civil matters and most counties have been forced to reluctantly eliminate specialty courts and vital services, such as alternative dispute resolution programs and self-help services previously offered to pro per litigants. Work furloughs and judicial vacancies abound.

The real-world effects of these cuts have been nothing less than devastating. Filing lines at county clerk windows—traditionally, a minor nuisance—now can become all-day endeavors. Splintered families face daunting delays in reunification proceedings. Domestic violence victims are denied expeditious processing of their claims for civil protection. Business disputes, some involving millions, or even billions of dollars, have grinded to a near-halt, resulting in unknown economic costs. Unlawful detainer matters are delayed, resulting in uncertainty to both tenants and landlords. Civil fees have been categorically increased to alleviate shortfalls, raising access to justice concerns, particularly for the state’s most vulnerable populations.

Contra Costa County has been far from immune from the financial pinch imposed on the judicial system. The county’s Superior Court has absorbed nearly $14.5 million in cuts since 2010, and this year $8 million in reserves that the court had prudently amassed were swept up by the state. All told, the county’s judicial budget has been slashed by 25 percent. In response, the county was forced to take on a range of austerity-type measures, including closing the Concord courthouse, reducing the Walnut Creek courthouse’s operations to traffic cases only, eliminating or reducing several specialty courts, laying off five of eight commissioners and consolidating much of the county’s judicial operations to Martinez. Like other courts throughout the state, Contra Costa County Superior Court now is faced with absurdly jammed dockets and overworked judicial officers and staff. Delays in hearings and trial dates are unavoidable, and residents in East and West counties now must travel to Martinez to have their family and juvenile law matters heard due to courtroom closures in Pittsburg and Richmond.

Last year, in the face of this gloomy judicial picture, a large alliance of California lawyers from both sides of the bar, called the Open Courts Coalition (OCC), initiated an effort to give a voice to the oft-neglected third branch of government, as well as to the 38 million residents who depend on the courts. The OCC encouraged participation by counties across the state to join the collective effort of reaching out to local lawmakers to seek a restoration of funding so that the courts could resume functioning on a basic level of service.

The Contra Costa County Bar Association heeded the call of the OCC. In the beginning of 2012, the CCCBA created the Pro Bono/Access to Justice Committee, on which I serve as Chair, as a means of advocating for the beleaguered courts on the local level. In April of last year, we co-sponsored and participated in a court funding rally on the steps of San Francisco City Hall, where several hundred lawyers, judges, court workers and citizens convened to speak out on the budget crisis. State Attorney General Kamala Harris, Justice Carlos Moreno (Ret.) and other notable judicial figures delivered stirring sermons regarding the critical importance of the state’s court system, and how the cuts have crippled the judiciary’s ability to meet the needs of Californians.

In 2012, members of the CCCBA Access to Justice Committee also met with the state lawmakers who represent portions of Contra Costa County, including state Assembly members in their District Offices, and Senators Mark DeSaulnier and Loni Hancock at the State Capitol. The purpose of the meetings was simple: to paint a picture of how the severe judicial budget cuts were adversely affecting the administration of justice for Contra Costa residents (who also represent the lawmakers’ constituencies).

This year, the Access to Justice Committee has renewed the struggle to reach the hearts and minds of lawmakers. Committee members Elva Harding, Samantha Sepehr, Peggy Bristol-Wright and I are in the process of organizing meetings with Contra Costa legislators to once again express the debilitating effects of the budget cuts, this time with the county’s significant court closures and reorganizations of 2013 in mind. The hope is that the CCCBA’s legislative efforts will add to the growing chorus across the state to impress upon lawmakers that the cuts over the last five years have gone too deep, and that the courts are on the brink of reaching a breaking point. Governor Brown’s revised state budget will be issued in mid-May; it is hoped that California legislators restore critical funding to the courts and convince Governor Brown to leave these funds alone with his “blue pencil.”

Locally, the CCCBA is not acting alone in this fight to restore much needed court funding. Presiding Judge Barry Goode and other Contra Costa judges have taken a proactive role in meeting with state lawmakers to articulate the difficulties faced by judicial officers, court staff and litigants under the current budgetary constraints. Judge Goode serves as the Legislative Outreach Chair of the Trial Court Presiding Judges Advisory Committee (which is comprised of all the presiding judges across the state), and he recently testified before the Budget Subcommittees of the state Assembly and Senate on the budget issues.

The county’s Superior Court has also implemented creative strategies to help address the docket logjam created by courtroom closures, including that of the civil discovery commissioner. The court invited local practitioners to volunteer to serve as temporary judges to handle small claims and unlawful detainer matters or to serve as civil discovery facilitators. The response by local lawyers has been encouraging, and both of these pilot programs are in full flight.

A silver lining of the court funding crisis is that it has fostered greater collaboration between the bench and bar, as well as by attorneys on opposite sides of the ”v.,” to discover novel solutions to the formidable challenges created by the underfunded judiciary. It is hoped that the court system currently inhabits that ”darkest hour just before the dawn.” The CCCBA, as well as the Contra Costa County Superior Court, are making a concerted effort to help ensure that the dawn of restored court funding is close at hand.

Nick Casper is the Treasurer of the Contra Costa County Bar Association. As an associate with Casper, Meadows, Schwartz & Cook since 2007, Nick has been actively involved in litigating many of the firm’s largest cases involving catastrophic injury, wrongful death, medical malpractice, employment discrimination/harassment, and civil rights violations. Nick has also taken several of the firm’s cases to jury trial.

As the need of a record of proceedings in many types of matters is, of course, important, the obvious step is to allow the parties to provide their own reporters. That would appear simple until one reviews the statutory provisions regarding court reporters and considers the need that when the court certifies a record to a higher court the applicable provisions must be regarded. It thus became necessary for our civil, family and probate judges to formulate a process that allows for a ”certifiable” record.

Using extensive work done by the Los Angeles Superior Court on the topic, our judges have put together a protocol that hopefully will accommodate all concerned. Our plan is based upon the expectation that for the vast majority of cases needing court reporting, the parties will stipulate as to the selection of the reporter. Things will work most smoothly if, based upon civility, a party asked to stipulate will do so absent a bona fide reason for not doing so.

The specific provisions for reporting by stipulation are contained on the court’s website.[1] From the home page, scroll to “Information and Notices” in the middle of the page and click on the link “Use of Private Court Reporters.” The link “Protocols” on that page will give you a 13-page explanation of the issues and requirements. There is also a link for Local Rule 24, which covers court reporting.[2]

In a nutshell, the provisions of the Government Code are such that by far the easiest approach is for the parties to a hearing or trial to stipulate as to the selection of a qualified reporter. New form CV-310 is used and includes an agreement by the reporter to meet the court’s requirements.[3] Reporters should be capable of providing “Livenote” and tying into the judges’ bench computers either by a Wi-Fi remote connection or cable connection. This is especially important as it assists the court in reviewing oral proceedings and therefore being able to more quickly render decisions that are important to the clients.

Reporters will also be provided a welcome packet and must become familiar with the court’s process for timely uploading the raw stenographic notes into the court’s ACORN storage site for safe storage and future reference.

As it is important that our court avoid favoritism, we do not make recommendations on reporters to be used for private reporting.

The court will protect parties who desire reporting and cannot obtain a stipulation from their opponent, although so far our experience has been that this is a rare occurrence. Due to the Government Code provisions, a reporter must then be chosen from the list of reporters that have been vetted and approved by the bench. Making these selection arrangements can be time consuming and may result in a delay of the proceedings.

Where matters might take several days, we require that a single reporter is used. Good cause will be required to obtain permission for an exception. All financial obligations lie with the parties—there is no court reimbursement even in cases where one party has obtained a fee waiver. Stipulating parties should therefore be clear on their interparty arrangements at the outset.

The judges very much appreciate the cooperation that we have received from the bar in undertaking this substantial change in our normal proceedings. We look forward, with you, to better budget times which would allow us to reinstate court-provided reporting in all judicial proceedings.

[1] http://www.cc-courts.org/

[2] http://www.cc-courts.org/_data/n_0046/resources/live/rule24_CourtReportingServices.pdf

[3] http://www.cc-courts.org/_data/n_0046/resources/live/cv310_Stip&OrderToUseCSR&RptrAgreement.pdf

Trends in Legal Services

Following the Great Recession, there has been a large increase in unemployed and underemployed lawyers, many of whom are young, inexperienced and saddled with crushing student loans. The collapse of the century-old firm Dewey & LeBoeuf, the trans-Atlantic mergers of giant white-shoe firms and cutbacks in budgets by local governments and judicial branches have only added to a general sense of pessimism among many practitioners in the legal profession, both young and old.

The pessimism, however, is partly misplaced because the fact is, the underlying demand for legal services has not abated much and is in fact growing. This demand for legal services is being met through “The Great Upender”—the Internet—where cheap-to-free legal services and information are overly abundant.

This overabundance of free (albeit sometimes questionable) online information has taken a lot of the mystery out of the attorney-client relationship and made self-help a viable alternative for many legal consumers. As a result, prospective clients are better informed than before and searching for value-based legal services instead of the traditional hourly model where the lawyer acts as the knowledge gatekeeper.

Unfortunately for many lawyers, but fortunately for the brave do-it-yourselfers, the quality of online resources will continue to improve and online services such as Rocket Lawyer and LegalZoom will hone their business models to better meet the growing demand. Thus, a new law practice has to allow for these improvements and create a business model that can thrive in this environment.

Focus on Clients

Even though today’s typical clients are better informed, the reality is they still have that underlying fear that caused them to seek legal help in the first place. This fear might be of losing everything in a divorce, risking criminal conviction or that a new business venture might fail. The opportunity for a viable practice starts with recognizing this underlying fear, understanding it fully and addressing it competently.

For example, in our practice it is not uncommon for a client to call with questions about starting a new business, only to call back months later, after using an online incorporation service, with questions about how to operate this new business. Many lawyers might take umbrage at this, but we recognize that it isn’t just a new legal entity that the client needs, but the assurance that they are operating the new business properly—because of their underlying fear that they may have overlooked something that can end up hurting them. Accordingly, the opportunity for a law firm isn’t trying to sell the formalities of corporate filings but instead to focus on the higher value-added service of understanding and allaying the client’s fear.

In business and commercial law, the changes are more pronounced but the opportunities are also bigger and better. Clients want their lawyers to provide more value instead of merely being another “cost center.” The corporate client is looking towards their lawyers more for problem-solving and business strategy than in the past; hence, lawyers with business degrees and substantial real-world business experience will provide more value to clients. The rise in joint MBA/JD programs reflects this trend.

Thus, even though our clients have not specifically asked for lawyers with business experience, as a firm and individual lawyers, we emphasize our practical business experiences early on in our client relationships. Letting the clients know we’ve been in their shoes helps assure them, strengthens the attorney-client relationship and provides us opportunities to address underlying business concerns as a value-added service.

Focus on Growth Areas

Starting a law firm today requires an examination of growth areas where it is worth investing scarce marketing resources. Despite the gloomy outlook by many in the profession, there are in fact ample growth areas in law. These areas include regulatory compliance, international transactions and intellectual property, to name just a few. Regulatory compliance is particularly promising because as the global economy matures, the push for increased regulation will also boost demand for sophisticated business lawyers. In addition, we are creating a slew of new regulations in the financial, medical, environmental and energy industries which will open doors to more opportunities.

Despite jurisdictional limitations, globalization has actually expanded an American lawyer’s legal world, thanks in no small measure to the outsized impact of American laws internationally and the fact that global business transacts in English. Consequently, emerging markets are full of opportunities for an American lawyer able to guide clients in cross-border transactions and compliance with international regulations. Populous countries like China, India and Brazil are primary candidates (hence, the massive expansion of U.S. law firms there) because they are experiencing mind-boggling growth spurts across multiple industries and building new infrastructures which require more sophisticated legal systems. Some less populous but equally impressive growth stories are coming from the Southeast Asian, Middle East, North African and South American regions, such as Indonesia, Philippines, UAE, Colombia and Peru, which are also looking for legal practitioners who know how to put together deals.

Another noteworthy example is Qatar, which has set a goal to be an international commercial dispute resolution center open to parties from all over the globe. Qatar’s court is operating under “international common law,” which allows judges to draw from precedents across the common law world. Their bench includes a former Lord Chief Justice of England and Wales, a former Chief Justice of India and a former Australian federal court judge. Qatar and other forward–looking countries recognize that there is an unmet demand for international legal dispute resolution and are working to capitalize on it.

Since the passage of Britain’s Legal Services Act of 2007, the legal landscape in the U.K. and all over Europe has undergone dramatic changes. With law firm structures there now changing to allow for partners who are not lawyers, one can expect other regions to follow suit. Practitioners hoping to make inroads into other international common law jurisdictions will be competing with law firms that have experienced finance and marketing people as full partners. These firms will change the dynamic between lawyers and clients who will be demanding new solutions across the business spectrum, not just in legal services. At the same time, modern marketing of law firms is likely to open opportunities for all lawyers in these areas as the public gets better educated.

Cash is Still King

While many news outlets covered the Dewey collapse with ill-masked traces of “Schadenfreude,” countless small law offices shut their doors because clients could not pay their invoices. This is why it is critical to keep your expenses extremely low, especially if your practice is in an area where it is difficult to get clients to pay in advance. Fortunately, new online tools make it easy to create a virtual law office, including the ability to rent a professional-looking office anywhere in the world. For example, LiquidSpace aggregates business centers around the world and provides them at a low hourly rate. This lets a new practice operate in low-cost offices but still meet clients in a professional environment.

Relationships Are Key

Regardless of new technologies and low-cost legal service providers, the attorney-client relationship will always be based on building and keeping the client’s trust. The client’s trust depends not only on how well you provide them your services, but also how good a resource you are overall. This means being responsive, staying up-to-date and cultivating a good referral network to handle cases that are beyond your capabilities or provide other know-how for the client’s business.

Although new technologies and social media are affecting professional interactions, they are not a substitute for building a good network. A good network relies on knowing other lawyers well enough to trust your client with them. While there is no easy formula for assessing another lawyer, the more time you spend with the lawyer, the better feel you will have for their expertise. Thus, the usual advice for networking, such as using LinkedIn or going to mixers, is not sufficient to develop this level of trust.

For us, this means spending considerable time with other attorneys, especially those not in our practice area. That is why we go out of our way to create or sponsor events where lawyers come together for roundtable discussions about different areas of law so we can get a chance to interact with them, evaluate them and develop mutually beneficial relationships with them.

The legal profession is undergoing massive structural changes that will be felt globally. Firms who are doggedly focused on clients, willing to venture into the growing geographic regions and fields of practice, able to keep their expenses low and build strategic relationships, are no doubt going to succeed. We are hoping and working hard to be one of them.

Pete Tormey manages the Intellectual Property Group of Antero & Tormey LLP. He has a BS in Electrical Engineering from San Francisco State University (Magna Cum Laude), an MBA from St. Mary’s of California (Marketing) and a JD from John F. Kennedy School of Law. His experience includes over 15 years of international sales and marketing and starting several technology companies.

Felix Antero manages the International Transactions Group of Antero & Tormey LLP. He has a bachelor’s degree in Economics from the Ateneo de Manila University where he was a Far East Bank scholar. He earned his JD at John F. Kennedy School of Law. Before practicing law, he was involved in the international banking, lending and insurance industries.

If Joe were one of the larger British firms, he could have dialed into a collaborative effort by law firms that provide a computer program with a decision tree, which when filled out, produces a final draft of an employment agreement. English firms in this case act as the experts in a computer-programming project. Through Listservs, legal consumers ask others how they have solved their problems and compare costs. Is this where the practice of law is headed?

The agent of change is the cost of legal advice and representation. The practice of law is going to change. Legal advice is too expensive. Lawyers are pricing themselves out of the market. Twenty-five years ago, the average partner pay at the nation’s top 100 law firms was 11 times higher than that of the average American worker. Today, it is 23 times higher. The 2010 median pay of a lawyer was $112,760 per year. Interestingly, the U.S. Bureau of Labor Statistics finds that when asked about work related experience or on-the-job-training, the response is “none.” As lawyers, we find every day that we have to tell clients that they can’t afford our services or we find that they cannot pay us once the services are provided.

Who are the future clients who will be able to afford us? This is a question little addressed in law schools. There are basically large businesses, small businesses such as Joe’s business, the wealthy and the rest of us. It is fair to say that the first three categories are and will continue to become more sophisticated consumers of legal services and the fourth will lose access.

The nature of recessions is changing. Until 1981, the country snapped out of a recession in six months. In 1990, it was 15 months; in 2001 it was 39 months. We are currently 64 months into what is a recession for those employed and a depression for those who are not. Companies have remained profitable by cutting costs, and legal costs have been at the top of their lists. In-house counsel budgets have been cut by 50 percent in some cases. About half of corporate counsel and private attorneys believe the recession will permanently change the way business is done in the legal industry. Companies are becoming more sophisticated when they go outside for legal representation. This has led to increased consolidation among the largest firms and the layoff of 9,500 lawyers in 2009 and 2010. That’s one in every 76 lawyers. The largest law firms are not addressing the new norm (more value for less fees) and as a result are losing business. I would expect a trickle-down effect to our smaller firms.

Wealth in this country is becoming more concentrated. The top 1 percent owns 40 percent of the wealth, or 225 times the wealth of the typical American. The ratio of CEO annual compensation for the Fortune 500 companies to that of the typical worker is 234 to one versus 16 to one in Japan. Income growth for the bottom 90 percent has been 15 percent over the past 30 years. For the top 1 percent it has been 300 percent. Lawyers routinely raise their rates around 5 to 10 percent per year. This effectively eliminates the bottom 90 percent from representation. The number of people that can afford justice is rapidly diminishing.

The wealthiest 1 percent can afford representation and will be willing to pay the premium for lawyers that can deliver (the Boies of the world). However, with money for expertise, one must assume that they, as well as the large corporations, will become more sophisticated consumers of legal services.

Any analysis of the markets leads one to conclude that the price of legal advice and representation will come down. We will no longer be able to charge for work for which we are overqualified to do. Clients are driving change by pushing efficiency and demanding the use of the latest technology. Clients want to see value and are forcing firms to unbundle. Clients will seek lower-cost service providers including online services.

Throughout the world, countries are allowing the practice of law to evolve. England (from where our law evolved) and Australia allow non-lawyers to provide many services considered legal. In America, we have LegalZoom, Axiom Law, Clearspire, Rocket Lawyer, Practical Law Company, Huron, Mindcrest, Pangea3 and Novus Law. Online dispute resolution has proved tremendously successful. New York City, using Cybersettle, saved $11.6 million during its first year of a demonstration project. SquareTrade, eBay’s preferred dispute resolution provider, offers two services: a free web-based forum which allows users to attempt to resolve their differences on their own, or if necessary, the use of a professional mediator.

Qatar is spending billions on developing a legal system that it hopes will facilitate incoming capital flows. Our position as the reserve capital of the world is based in part upon the availability of our courts and the stability of our statutory and case law. Today, we are dismantling our courts for lack of funds. Tomorrow’s litigators are going to have to navigate a world of less access and alternative dispute resolution options. Interestingly, American law students increasingly want to go to work for the government, a trend not seen elsewhere.

In Joe’s case, lawyers provide three value-added services. We are the trusted advisor who provides customized advice for our clients based upon our knowledge of their situations, the provider of risk management compliance and the agent for dispute resolution and litigation. This is particularly true in risk management, which receives little emphasis in most law firms. We need to learn how to do each task most cost-effectively. We need to develop practices where Joe seeks the advice, experience or expertise that he cannot find online. We need to become experts in areas not widely understood. We need to become online providers, and probably available 24 hours a day or we risk losing our clients. And in this world of connectivity where the reply button is all too alluring, we need to become experts in quality control.

Here in Contra Costa County, we have a million residents. One out of every 250 (3,938) residents is a lawyer, versus one out of 400 nationwide. Forty-two percent of us (yes, even me) are over 55. Twenty-eight percent have been in practice for less than five years or are under 35. I suspect that our county, which is primarily white and wealthy, will not be on the leading edge of change. But there is no question that the next 20 years will not mirror the last 20 years. It certainly gives us pause to think.

This article was adapted from a presentation made by Dick Frankel to the Contra Costa County Bar Association Board of Directors.

Mark Ericsson is a partner in the tax and business firm of Youngman & Ericsson, has served as the 2006 president of the CCCBA and is currently the chair of the Taxation Section. He has written over 30 articles on tax and business issues.

Virtual 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]

• Rule 1-300 (Unauthorized Practice of Law).
• Rule 1-400 (Advertising and Solicitation).
• Rule 3-100 (Confidential Information of Client).
• Rule 3-110 (Failing to Act Competently).
• Rule 3-310 (Avoiding the Representation of Adverse Interests).
• Rule 3-500 (Communication).

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 General 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).

Matthew Talbot

The best Inns Of Court presentations get all of its members involved. Instead of just having a group standing up performing for their adoring fans in the audience, the best groups make the adoring fans part of the performance. Judge Maier’s group (starring Erika Littlefield, Lisa Mendes, Matthew Mraule, Nick Casper, Nicholas Jay, Janine Ogando, Patrick Perez, Scott Reep, Laureen Bethards and John Warnlof) proved this old saw one more time with a great “Legal Jeopardy!” presentation at the March 14, 2013, meeting.

If you’ve ever watched an episode of “Jeopardy!,” seen the “Saturday Night Live” always hilarious “Celebrity Jeopardy!” skits, or even caught any part of the “E! True Hollywood Story” on Alex Trebek, you know how “Jeopardy!” works. They give you the answer, you give them the question!

The twist here is that all of the categories were legal in nature. Even the “Movies” category related to law movies, like the always realistic “Jury Duty” (Pauly Shore’s greatest role). The most basic questions were fairly easy; most practitioners in that field would quickly get them. However, the difficulty quickly escalated and most teams spent the entire night in the negative. Yes, it’s true. An entire room full of veteran attorneys and judges got the vast majority of the questions … wrong.

Partial credit should go to Judge Maier’s group for crafting increasingly challenging questions. However, more of the credit (or blame) should go to the groups for buzzing in too soon or failing to answer in the form of a question. These are basic “Jeopardy!” tenets, yet they tripped up so many groups. Groups had plenty of enthusiasm for the rules of the game and were not bashful about alerting Judge Maier’s group when the answering groups made the most basic mistakes. When it comes to a raucous energy at an Inns Of Court meeting, you don’t have to turn up the stove too much to get that water to boil.

Inns President Scott Reep played Alex Trebek, but went old school Trebek, donning a perm wig and rocking a red blazer. He wielded a buzzer like it was a light saber, striking down the groups that dared answer incorrectly (although, it should be noted, that actually didn’t make them more powerful than you could ever imagine).

The groups careened helplessly towards “Final Jeopardy!,” sadly arriving to the championship round mostly empty handed. Only two groups were actually in the positive, which meant that only two groups could even really take part in “Final Jeopardy!”

It came down to Judge Cram’s group (my group) versus Judge Mockler’s group for all the marbles! Judge Mockler’s group was up by approximately $2,000, so they had the advantage. Before we received the “Final Jeopardy!” answer, both groups had to enter our wagers. Our group decided to bet a single dollar, pinning our hopes on Judge Mockler’s group failing. It was the conservative play and I was concerned. Were we betting not to lose? But I was assured it was the way to go. Plus, you have to have hope.

The “Final Jeopardy!” answer came in: “This justice said: ‘It is better, so the Fourth Amendment teaches us, that the guilty sometimes go free than the citizens be subject to easy arrest.’”

We guessed Justice Douglas, which was correct! Judge Mockler’s group guessed another, incorrect justice. What’s more, they had wagered so much money that they fell behind us into second place! Our $1 betting plan had worked! Clear Eyes, Full Hearts, Can’t Lose!

It was an extremely successful evening that helped bring the Inns Of Court community together in a fun and funny way.

The next Inns of Court meeting is May 9, 2013, at the Lafayette Park Hotel. To learn more about the Inns Of Court and get involved, contact President Scott Reep at (707) 748-0900 or Scott@Solanolawgroup.com.