Hello everyone and welcome to this Ethics Alert, which will discuss recent approval of Rocket lawyer and other entities to participate in Utah’s pilot regulatory “sandbox program.
On September 8, 2020, Rocket Lawyer announced that it was one of the first entities approved by the Utah Supreme Court to participate in the regulatory “sandbox” program permitting, inter alia, nontraditional legal service providers. Rocket Lawyer’s website is here: https://www.rocketlawyer.com/
A total of five entities were approved for participation in the sandbox program. The other approved applicants were:
LawHQ: A Salt Lake City law firm which plans to offer equity ownership to certain software developers in the firm and a software application called CallerHQ, which is designed to allow consumers to report spam telephone calls, text messages and voicemails. Consumers who sign up may then be included in a mass tort litigation brought by LawHQ against the spammers.
1Law: An entity which plans to provide no-cost and low-cost legal services to assist clients in completing court documents and also offer related legal advice using chatbots, instant messaging, automated interviews, nonlawyer staff and technology-assisted lawyers. 1Law plans to have more than 50% nonlawyer ownership.
LawPal: An entity which plans to provide a TurboTax-like technology platform to generate legal documents in contested and uncontested divorce and custody cases, eviction cases and debt-related property seizure cases. It expects to feature 50% nonlawyer ownership.
Blue Bee Bankruptcy Law: The sole owner of this law firm states that he will give his paralegal employee a 10% ownership interest in the firm as an incentive to remain with the firm.
The Utah Supreme Court’s Order creating the pilot sandbox program states that participants must demonstrate that the activities and services “do not cause levels of consumer harm above threshold levels established by” the Court’s innovation office. Successful sandbox participants may also ultimately receive approval to exit the sandbox program and continue practicing the services after the pilot program ends.
After the two-year pilot program period, which began on August 14, 2020, is over, the Utah Supreme Court will evaluate whether the program should continue “based on a review of data collected from those entities and individuals participating in the program.” If not approved to continue, the program will sunset after the 2 year period.
Bottom line: As I have said before, if this trend continues, this could become the wave of the future in other states and jurisdictions.
Stay safe and healthy and be careful out there.
Disclaimer: this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.
Hello everyone and welcome to this Ethics Alert which will discuss the Third U.S. Circuit Court of Appeals opinion which reversed a federal district court opinion upholding a New Jersey guideline prohibiting a lawyer from posting judicial opinion excerpts praising his legal work. The opinion is Andrew Dwyer et al v. Cynthia A. Cappell et al, No. 13-3235 (U.S. Third Circuit Court of Appeal August 11, 2014) and the opinion is here: http://www2.ca3.uscourts.gov/opinarch/133235p.pdf
According to the opinion, the lawyer had posted multiple excerpts of unpublished and public judicial opinions related to fee applications in employment discrimination cases brought under the New Jersey Law Against Discrimination on his law firm website. One quote stated: ““The inescapable conclusion is . . . that plaintiffs achieved a spectacular result when the file was in the hands of Mr. Dwyer. . . . Mr. Dwyer was a fierce, if sometimes not disinterested advocate for his clients, and through an offensive and defensive motion practice and through other discovery methods molded the case to the point where it could be successfully resolved.”
A judge whose opinion quotes were posted on the lawyer’s website wrote to the lawyer in April 2008 and asked that the quotes be removed because he did not want his comments to be misconstrued as a blanket endorsement of the lawyer. The lawyer refused to remove any quotes and the New Jersey State Bar Association’s Committee on Attorney Advertising began examining the issue. The Committee and the New Jersey Bar Association ultimately produced Guideline 3, which was approved by the New Jersey Supreme Court in 2012. Guideline 3 stated that an attorney “may not include, on a website or other advertisement, a quotation or excerpt from a court decision (oral or written) about the attorney’s abilities or legal services.” The guideline did permit a lawyer to post the entire text of a judicial opinion on the website or in an advertisement.
The U.S. District Court upheld Guideline 3 in June 2013; however, before the Guideline was to become effective, the lawyer filed a lawsuit in federal court claiming that Guideline 3 violated his First Amendment rights to engage in truthful commercial speech. The district court found against the lawyer and found that the Guideline was a mere disclosure requirement and not a direct restriction on the lawyer’s speech. In making its ruling, the district court relied on the U.S. Supreme Court opinion in Zauderer v. Office of Disciplinary Counsel (1985), which stated that “an advertiser’s rights are adequately protected as long as disclosure requirements are reasonably related to the state’s interest in preventing deception of consumers.”
The Third Circuit Court of Appeals unanimously reversed the district court’s opinion. The opinion confirmed that disclosure requirements receive less scrutiny than actual restrictions on speech and that the New Jersey Guideline had characteristics of both a disclosure requirement and a restriction on speech. The opinion did not address whether the Guideline was a restriction or a prohibition; however, it stated that even under the less restrictive standard of review for disclosure requirements, the Guideline was constitutionally flawed.
The appellate opinion stated that “Guideline 3 does not require disclosing anything that could reasonably remedy conceivable consumer deception stemming from (the lawyer’s) advertisement.” The opinion also listed an example of a disclosure that would be sufficient: “This is an excerpt of a judicial opinion from a specific legal dispute. It is not an endorsement of my abilities.” Since Guideline 3 required a lawyer to post entire judicial opinions, it “effectively precludes advertising with accurate excerpts from judicial opinions on (the lawyer’s) website, it is unduly burdensome.”
“Guideline 3 as applied to (the lawyer’s) accurate quotes from judicial opinions thus violates his First Amendment right to advertise his commercial services. Requiring (the lawyer) to reprint in full on his firm’s website the opinions noted above is not reasonably related to preventing consumer deception. To the extent the excerpts of these opinions could possibly mislead the public, that potential deception is not clarified by Guideline 3. In any event, what is required by the Guideline overly burdens (the lawyer’s) right to advertise. We thus reverse the order of the District Court and remand the case.
Bottom line: This is a significant First Amendment decision related to lawyer advertising which found that New Jersey Guideline 3, which prohibited a lawyer from publishing excerpts of judicial opinions on his website, was an unconstitutional restriction on the lawyer’s commercial speech. The opinion did approve of the use of a disclosure/disclaimer to prevent any consumer confusion related to the opinion excerpts.
Be careful out there.
Disclaimer: this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.
Joseph A. Corsmeier, Esquire
Law Office of Joseph A. Corsmeier, P.A.
2454 McMullen Booth Road, Suite 431
Clearwater, Florida 33759
Office (727) 799-1688
Fax (727) 799-1670
jcorsmeier@jac-law.com http://www.jac-law.com
Hello everyone and welcome to this Ethics Alert which will discuss recent ABA Formal Opinion 511, which discusses and provides information and guidance regarding lawyers providing client information on a listserv. ABA Formal Opinion 511 is here: Formal Opinion 511 (americanbar.org)
According to the lengthy ABA opinion:
(ABA Model) Rule 1.6, Confidentiality, prohibits a lawyer from posting questions or comments relating to a representation to a listserv, even in hypothetical or abstract form, without the client’s informed consent if there is a reasonable likelihood that the lawyer’s questions or comments will disclose information relating to the representation that would allow a reader then or later to infer the identity of the lawyer’s client or the situation involved. A lawyer may, however, participate in listserv discussions such as those related to legal news, recent decisions, or changes in the law, without a client’s informed consent if the lawyer’s contributions will not disclose, or be reasonably likely to lead to the disclosure of, information relating to a client representation.
The opinion also refers to ABA Formal Opinion 496 (2021), “which cautioned lawyers about responding to online criticism: Lawyers ‘who choose to respond online must not disclose information that relates to a client matter or that could reasonably lead to the discovery of confidential information by another.’” (Emphasis added).
The ABA opinion further states:
Finally, it bears emphasizing that lawyer listservs serve a useful function in educating lawyers without regard to any particular representation. Lawyers use listservs to update one another about newly published decisions and articles or to share recommendations for helpful contractors or fellow practitioners. Comment 8 to Rule 1.1 advises lawyers to “keep abreast of changes in the law and its practice,” and lawyer listservs can help in doing so. These uses, unrelated to any particular representation, would not require a lawyer to secure the informed consent of a client. A lawyer must, however, remain aware of the possible risks to confidentiality involved in any posts to a listserv. Even a general question about the law, such as a request for cases on a specific topic, may in some circumstances permit other users to identify the client or the situation involved. Therefore, before any post, a lawyer must ensure that the lawyer’s post will not jeopardize compliance with the lawyer’s obligations under Rule 1.6.
Bottom line: According to this ABA opinion, lawyers are prohibited from providing client confidential information on a listserv, even if it is in hypothetical form, if there is a reasonable likelihood that the lawyer’s communications will disclose confidential information that would allow the inference of the identity of the lawyer’s client or the situation involved, unless the client provides informed consent .
Be careful out there.
As always, if you have any questions about this Ethics Alert or need assistance, analysis, and guidance regarding ethics, risk management, or other issues, please do not hesitate to contact me.
Disclaimer: this communication is not an advertisement, does not contain any legal advice, does not create an attorney/client relationship, and the comments herein should not be relied upon as legal advice by anyone who reads it.
Hello everyone and welcome to this Ethics Alert which will discuss the recent Massachusetts Board of Overseers Order imposing a reprimand on a lawyer who sent an email to another lawyer to evade a judge’s and accidentally copied opposing counsel. The case is Massachusetts Bar Counsel v. Cosentino, Public Reprimand No. 2024-1. The Board Report and Order are here: https://bbopublic.massbbo.org/web/f/PR2024-1.pdf
According to the Board of Overseers’ March 28, 2024 report:
On March 10, 2022, a few days prior to trial, the Court held a pretrial hearing. The respondent informed the judge that a trial likely was not going to be necessary because his clients had been consulting with a bankruptcy attorney and were either going to default or file for bankruptcy protection prior to trial. The respondent stated that it was unclear to him whether both of his clients had retained the bankruptcy attorney, or just Giving Tree. The judge stated that if only Giving Tree was filing for bankruptcy protection, they would still need to address the claims against Mr. Bairos individually. CSI’s counsel alleged that the defendants were withholding information about their bankruptcy plans in order to encourage CSI not to prepare for trial.
The judge stated that he wished to telephone the bankruptcy attorney from the bench, and CSI’s counsel provided the bankruptcy attorney’s phone number to the clerk. While the clerk was dialing the bankruptcy attorney’s number, the respondent took his cell phone from his pocket and sent the bankruptcy attorney an email that stated “Court is going to call you. Don’t pick up.” He also sent the bankruptcy attorney a text message that stated: “Don’t pick up your phone.” The bankruptcy attorney did not pick up the phone because he was occupied with another client, and not because of the respondent’s email and text.
The respondent did not inform the judge that he was sending the email and text to the bankruptcy attorney. However, he inadvertently copied the email to CSI’s counsel. The next day, CSI’s counsel brought the email to the judge’s attention. (emphasis supplied).
Bottom line: This lawyer was sent an email to another lawyer attempting to prevent a judge from properly communicating with another lawyer during a court hearing. The lawyer’s plan was discovered because he copied the opposing. The conduct was clearly sanctionable and arguably conduct that was prejudicial to the proper administration of justice. I am not sure a lawyer in another jurisdiction (including Florida) would only have been reprimanded.
Be careful out there.
Disclaimer: this communication is not an advertisement, does not contain any legal advice, does not create an attorney/client relationship, and the comments herein should not be relied upon as legal advice by anyone who reads it.
Hello everyone and welcome to this Ethics Alert which will discuss the recent Georgia Supreme Court opinion disbarring a lawyer who missed statutory filing deadline and falsified email to cover it up. The case is In the Matter of Andrea Jo Anne David-Vega, Case No: S24Y0099 and the opinion is here: https://www.gasupreme.us/wp-content/uploads/2024/03/s24y0099.pdf
According to the opinion, the lawyer falsified an email to make it appear that her personal injury client fired her before she missed the deadline to file the lawsuit. The lawyer submitted the false email in her disciplinary case and in a malpractice lawsuit filed against her by the client. The false email was in a different font and format and used better diction, capitalization, and punctuation. The lawyer also falsified a text message and submitted it as evidence in the malpractice lawsuit.
The disciplinary allegations against the lawyer were deemed to be admitted because she failed to file a timely answer to the complaint filed by the State Bar of Georgia: however, she was permitted to submit evidence of mitigating circumstances at a sanctions hearing.
The lawyer admitted creating the email and text to make it appear that her client had fired her before the statute of limitations had expired. The lawyer’s counsel stated that she lawyer had expanded her caseload in 2016 by becoming a special assistant attorney general representing the Georgia Division of Family & Children Services and acquired 200 cases in Gwinnett County, Georgia, and 150 cases in a neighboring county; however, she continued her own general practice.
The opinion states: “(The lawyer) became overwhelmed with her caseload but continued to take cases because she ‘did not know how to say no’ and felt unable to ask for help.” A counselor testified that the lawyer also helped with care for her mother and stepfather, who had become ill. She eventually “reached a point where she completely unplugged”. The lawyer had no prior discipline and expressed remorse for her actions, and she also had an excellent reputation with the judges before whom she appeared.
The lawyer’s client testified in aggravation that he suffered permanent injuries to his eye, neck, head, back and brain in the auto accident for which he sought to file a lawsuit, he had debt collectors calling, and the lawyer failed to provide his medical records that she was provided. The client also testified there was no written contingency agreement, and the lawyer contacted the liability insurer but then stopped communicating with the insurer. The lawyer also failed to respond to the client’s questions, even though he called her office over 65 times between January 2019 and February 2020 to ask about the status of his case and he continued to text and email her through April 2020.
The client told the lawyer that he was terminating her in May 2020 and the deadline for filing a lawsuit had passed in August 2018. The lawyer falsely asserted that the complainant had terminated her in March 2018. The client’s lawyer in the malpractice lawsuit also testified that the lawyer lied and failed to cooperate in the malpractice case, and that settlement negotiations had been ongoing for two years. A special master had recommended the lawyer be suspended for two years.
Bottom line: This lawyer attempted to cover up her negligence and misconduct by creating false evidence in the form of a fabricated email and text message and presented the false evidence in both the Bar proceedings and the legal malpractice action. As people have said, “it is not always the crime, but the cover up”. The Georgia Supreme Court imposed the most severe sanction of disbarment.
Be careful out there (and of course do not do this).
Disclaimer: this communication is not an advertisement, does not contain any legal advice, does not create an attorney/client relationship, and the comments herein should not be relied upon as legal advice by anyone who reads it.
Hello everyone and welcome to this Ethics Alert which will discuss the recent Florida Middle District Senior Judge’s Opinion and Order suspending a Florida lawyer from practicing before that court for one (1) year for filing false cases created by artificial intelligence. The case is In Re: Thomas Grant Neusom, Case No: 2:24-mc-2-JES and the March 8, 2024 Opinion and Order is here: https://ecf.flmd.uscourts.gov/cgi-bin/show_public_doc?2024-00002-6-2-mc
According to the January 4, 2024 Middle District Report and Recommendation of Grievance Committee, the matter was referred to the committee after the opposing counsel in the underlying litigation matter was unable to find the cases and asked the lawyer to provide copies. The Report states that the lawyer “provided non-responsive and evasive answers to the request for the cited authorities.” .
According to the Report, when the lawyer was asked about the court pleadings during a telephone interview by the committee, he said that he “used Westlaw and Fastcase and may have used artificial intelligence to draft the filing(s) but was not able to check the excerpts and citations.” In his written response, the lawyer did not offer any explanation for the fabricated cases “or provide any sense of understanding of the seriousness of the situation.”
The Report found that the lawyer’s conduct was “beyond a lack of due diligence as some of his legal authorities were completely fabricated.” In addition, “(w)hereas we understand that artificial intelligence is becoming a new tool for legal research, it can never take the place of an attorney’s responsibility to conduct reasonable diligence and provide accurate legal authority to the Court that supports a valid legal argument.” The Report and Recommendation is here: https://www.lawnext.com/wp-content/uploads/2024/03/M.D.-Fla.-24-mc-00002-dckt-000003_000-filed-2024-02-01.pdf
After reviewing the Report and Recommendation, Senior U.S. District Judge John E. Steele issued an Opinion and Order dated March 8, 2024 suspending the lawyer from practice in the Middle District of Florida court for one year and requiring the lawyer to comply with the following conditions during the suspension:
i. Attend and complete The Florida Bar’s Professionalism Workshop;
ii. Attend and complete all aspects of a Law Practice Management CLE;
iii. Attend and complete all aspects of the Practicing with Professionalism CLE; and
iv. Receive Counseling through the Florida Lawyers Assistance Program.
Pay all outstanding monetary sanctions, fees, and costs levied against him, in any federal, state, or disciplinary actions;
Complete all remediation ordered by The Florida Bar, if any;
Complete all remediation ordered by any court, including reporting of any sanction orders levied by any court to the appropriate parties:
E. Re-read the Florida Rules of Professional Conduct and the Local Rules of the United States District Court for the Middle District of Florida in full and certify in writing to this Court that he has done so; and
F. Report to the Court the completion of subparagraphs (A) through (E) of this paragraph on or before the date marking the end of the suspension period.
Bottom line: This is yet another example of the dangers of lawyers’ use of artificial intelligence, particularly for lawyers who are negligent and fail to ensure that all cases cited in a court document exist and are correct and are not the result of “AI hallucinations”. This lawyer is most likely also facing an investigation by The Florida Bar and potential disciplinary sanctions.
Be careful out there.
Disclaimer: this communication is not an advertisement, does not contain any legal advice, does not create an attorney/client relationship, and the comments herein should not be relied upon as legal advice by anyone who reads it.
Hello everyone and welcome to this Ethics Alert which will discuss the Florida Bar’s offer of free IOTA trust accounting software through NOTA. The link to the Bar’s website with information and access to the NOTA software is here: www.trustnota.com/TheFloridaBar
As Florida lawyers who maintain IOTA trust accounts well know, the complexities and redundancies of the Bar trust account rules can create issues with technical noncompliance with the rules, which may bring the lawyer into the Bar complaint process. The Florida Bar is now offering free access to Nota, which is a financial platform designed to help small law firms and solo lawyers manage trust accounts and comply with the trust account requirements of Chapter 5., Rules Regulating Trust Accounts
Nota’s platform provides lawyers with the ability to view their bank accounts and provides integration into law firm workflows. The platform was designed specifically for lawyers and helps to streamline the management of IOTA trust accounts. According to NOTA, it also integrates easily with the main practice management, legal payment, and accounting platforms and integrates with client accounts across multiple financial institutions or as a standalone trust accounting solution.
According to Florida Bar president, Scott Westheimer, “In the last 10 years, trust accounting violations have always been a top-10 violation (related to complaints filed against members).” “In fact, the Bar gets one NSF (Non-Sufficient Funds) notification per day due to poor trust accounting practices.” Bar records show that in 2019-2020, trust accounting was the top violation, the fourth highest in 2020-2021, the third highest in 2021-2022, and “currently this year, 2022-2023, it is again a top violation.” “With Nota, our members have access – at no cost – to the latest in trust accounting technology and a provider who can help them focus on the growth and continued success of their practice.”
According to NOTA CEO Paul Garibian, “Nota was designed to help smaller legal practitioners easily manage the complex and onerous process of trust reconciliation so they can focus on what’s important—their clients.” “Core to Nota’s platform is providing small businesses with access to the banking and recordkeeping services they need to remain compliant and drive growth.”
Bottom line: Solo and small law firm lawyers can and should take advantage of this free software to ensure compliance with the Bar trust account rules. Florida lawyer Andy Sasso deserves kudos for shepherding this free lawyer trust account software to its completion and implementation.
Be careful out there.
Disclaimer: this communication is not an advertisement, does not contain any legal advice, does not create an attorney/client relationship, and the comments herein should not be relied upon as legal advice by anyone who reads it.
As I previously blogged, in December 2023, the Florida Bar’s Board of Governors (BOG) approved a Real Property, Probate, and Trust Law Section proposal to remove the words “zealous” and its derivatives from the Florida Bar Rules. The proposed amendments would remove the words from the Preamble to Chapter 4 and the comment to Rule 4-1.3 and would also add a comment that provides an explanation and historical perspective.
The proposed amendments remove a sentence in the Preamble which states: “As an advocate, a lawyer zealously asserts the client’s position under the rules of the adversary system” and substitute “As an advocate, a lawyer asserts the client’s position with commitment and dedication to the interests of the client under the rules of the adversary system.” Another sentence in the Preamble: “Zealous advocacy is not inconsistent with justice,” would be changed to “Commitment and dedication in advocacy are not inconsistent with justice.”
A sentence in the comment to Rule 4-1.3 (Diligence), “A lawyer must also act with commitment and dedication to the interests of the client and with zeal and advocacy on the client’s behalf,” would be changed to “A lawyer must also act with commitment and dedication to the interests of the client.”
A proposed new comment would be placed in the Preamble under the subheading “Conduct” and state “All prior references to this chapter to a lawyer’s duty to act zealously, as a zealous advocate, or with zeal upon the client’s behalf have been removed. Zealous advocacy has been invoked in the legal profession as an excuse for unprofessional behavior.” The comment would also refer to a 2000 Supreme Court decision, The Florida Bar v. Buckle, which states, “we must never permit a cloak of purported zealous advocacy to conceal unethical behavior.”
The Florida Supreme Court will review the proposed amendments and issue an Order. If the revisions are implemented, Florida would join at least 13 other states, including Georgia, New York, and California, that have removed such words from their rules and comments.
Bottom line: As I have said and written many times, the words zeal and zealous are related to the term zealot and the ordinary meaning of the term zealot is a person who is fanatical and uncompromising. There is no place in the Bar rules or in a lawyer’s practice for fanatical and uncompromising conduct.
Be careful out there.
Disclaimer: this communication is not an advertisement, does not contain any legal advice, does not create an attorney/client relationship, and the comments herein should not be relied upon as legal advice by anyone who reads it.
Hello everyone and welcome to this Ethics Alert which will discuss the recent Florida Third District Court of Appeal opinion which invalidated the arbitration provision in a fee agreement (and the fee agreement itself) because of a violation of Florida Bar Rule 4-1.5(i). The case is Labelle v. Berenson LLP, 2023 Fla. App. LEXIS 8693 (December 26, 2023).
In this case, the plaintiff/client (Labelle) filed a legal malpractice action against the defendant law firm (Berenson, LLP), which then filed a motion to compel arbitration pursuant to the arbitration provision in the fee agreement. According to the opinion, the client signed the fee agreement “midway through” the law firm was representing the plaintiff in an underlying commercial lawsuit.
The arbitration provision stated that all disputes arising out of the fee agreement and the law firm’s’ legal services were subject to binding arbitration; however, the provision did not advise the plaintiff to seek independent counsel. The trial court granted the motion to compel arbitration and the plaintiff appealed.
The 3rd DCA opinion noted that Florida Bar Rule 4-1.5(i) prohibits a lawyer from making a fee agreement with a “client prospectively providing for mandatory arbitration of fee disputes without first advising that person in writing that the potential client should consider obtaining independent legal advice as to the advisability of entering into an agreement containing such mandatory arbitration provisions.”
Florida Bar Rule 4-1.5(i) requires the following Notice to be included in the fee agreement in bold print:
NOTICE: This agreement contains provisions requiring arbitration of fee disputes. Before you sign this agreement, you should consider consulting with another lawyer about the advisability of making an agreement with mandatory arbitration requirements. Arbitration proceedings are ways to resolve disputes without use of the court system. By entering into agreements that require arbitration as the way to resolve fee disputes, you give up (waive) your right to go to court to resolve those disputes by a judge or jury. These are important rights that should not be given up without careful consideration.
The opinion held that an arbitration provision which fails to include the required notice to the client to consider consulting with another lawyer violates Florida Bar Rule 4-1.5(i); therefore, it is unenforceable on its face, regardless of the type of dispute. The 3rd DCA opinion cited to the 4th DCA case of Owens v. Corrigan, 252 So. 3d 747, 750-51 (Fla. 4th DCA 2018). The opinion states:
“In Ramkelawan v. Morgan &Morgan, P.A., 336 So.3d 71 (Fla. 3d DCA 2021), we found it necessary to distinguish the facts in Owens from those in Ramkelawan, as the issue in that case was whether the existing requisite notice in the arbitration provision was sufficiently compliant with the rule. We determined that “the instant agreement reveal[ed] minor differences that [did] not invalidate the arbitration provision,” while in Owens, “the arbitration provision was held unenforceable because it did not contain any portion of the bold print notice required by rule 4-1.5(i).” Id. at 74-75. Therefore, because the requisite notice is completely absent from the arbitration provision, the provision is unenforceable on its face and cannot to be severed without rewriting the agreement.
Even if severability could be accomplished without rewriting the agreement, the arbitration agreement does not contain a severability clause.
Because the arbitration agreement is unenforceable on its face, we reverse the trial court’s order granting the motion to compel arbitration and remand for further proceedings. Reversed and remanded.
Bottom line: This opinion clearly shows how important it is for lawyers to know and follow the Bar Rules, particularly in drafting fee agreements with clients. As in this case, a lawyer’s violation Florida Bar Rule 4-1.5(i), may or will render the arbitration provision (and fee agreement) unenforceable. Lawyers should also consider including a severability clause.
Be careful out there.
Disclaimer: this communication is not an advertisement, does not contain any legal advice, does not create an attorney/client relationship, and the comments herein should not be relied upon as legal advice by anyone who reads it.
Hello everyone and welcome to this Ethics Alert which will discuss the Florida Bar Board of Governor’s (BOG) recent withdrawal of proposed Advisory Opinion 23-1 which would have allowed Florida lawyers to passively invest in out of state alternative lawyer business structures that permit non-lawyer ownership.
As background, the Florida Bar Rules prohibit alternative business structures with non-lawyer ownership; however, other jurisdictions, such as Washington D.C. and Arizona law permit them. In March 2022, Florida Bar ethics staff declined to issue an opinion based on a lack of Florida precedent. The individuals who requested the opinion asked that the BOG Professional Ethics Committee (PEC) review the denial.
Proposed Advisory Opinion 23-1 was drafted and stated that, even if a lawyer is admitted in a jurisdiction that does not authorize non-lawyer ownership of law firms, a lawyer may passively invest in an ABS in another jurisdiction so long as the relevant jurisdiction permits those entities. In the proposed advisory opinion, the PEC found the Florida attorney’s participation as a passive investor in an ABS permissible so long as it met certain criteria.
The proposed opinion also stated the ABS cannot have any presence in Florida nor can it provide Florida legal services, the ABS must comply with all requirements of the jurisdiction that permits it, the Florida investor cannot have a managerial role or be involved in the daily operations of the ABS, and the Florida attorney may not have access to any confidential information regarding the ABS.
At its meeting at the Bar’s Annual Convention on June 23, 2023, the Florida Bar’s Professional Ethics Committee voted unanimously to support Proposed Advisory Opinion 23-1 which would have permitted a Florida attorney to be a passive investor in an alternative business structure (ABS) in another state that allows non-lawyer ownership of law firms.
At its December 2023 meeting, the BOG voted to withdraw the proposed Florida Bar Advisory Opinion 23-1.
Bottom line: According to reports, the withdrawal of the proposed opinion came after a BOG discussion regarding whether this would be a potential “camel’s nose” under the tent and lead to non-lawyer ownership of Florida law firms, which has been strongly opposed by many Florida lawyers..
Be careful out there.
Disclaimer: this communication is not an advertisement, does not contain any legal advice, does not create an attorney/client relationship, and the comments herein should not be relied upon as legal advice by anyone who reads it.
The Board of Governors (BOG) voted at its December 2023 meeting, to approve a Real Property, Probate, and Trust Law Section proposal to remove the words zealous, and its derivatives from the Florida Bar Rules. The proposed amendments would remove the words words from the Preamble to Chapter 4 and the comment to Rule 4-1.3 and add a comment that provides an explanation and historical perspective.
The proposed amendments would remove a sentence in the Preamble stating “As an advocate, a lawyer zealously asserts the client’s position under the rules of the adversary system” and substitute “As an advocate, a lawyer asserts the client’s position with commitment and dedication to the interests of the client under the rules of the adversary system.” Another sentence in the Preamble: “Zealous advocacy is not inconsistent with justice,” would be changed to “Commitment and dedication in advocacy are not inconsistent with justice.”
A sentence in the comment to Rule 4-1.3 (Diligence), “A lawyer must also act with commitment and dedication to the interests of the client and with zeal and advocacy on the client’s behalf,” would be changed to “A lawyer must also act with commitment and dedication to the interests of the client.”
A proposed new comment would be placed in the Preamble under the subheading “Conduct” and state “All prior references to this chapter to a lawyer’s duty to act zealously, as a zealous advocate, or with zeal upon the client’s behalf have been removed. Zealous advocacy has been invoked in the legal profession as an excuse for unprofessional behavior.” The comment would also refer to a 2000 Supreme Court decision, The Florida Bar v. Buckle, which states, “we must never permit a cloak of purported zealous advocacy to conceal unethical behavior.”
The board approved the Florida Bar rule proposed revisions,24-9 and they will now be filed with the Florida Supreme Court for review and potential implementation.
Bottom line: If the proposed revisions are approved by the Florida Supreme Court, Florida lawyers will be put on notice that unethical conduct under the guise of “zealousness” is a potential violation of the Florida Bar Rules.
Be careful out there.
Disclaimer: this communication is not an advertisement, does not contain any legal advice, does not create an attorney/client relationship, and the comments herein should not be relied upon as legal advice by anyone who reads it.
Hello everyone and welcome to this Ethics Alert which will Proposed Florida Bar Advisory Opinion 24-1 provides guidance regarding lawyers’ use of generative artificial intelligence (AI).
According to the Bar’s Notice, the BOG will consider any comments received at a meeting scheduled to be held on Friday, January 19, 2024, at the AC Hotel in Tallahassee, Florida. Comments must contain the proposed advisory opinion number and clearly state the issues for the committee to consider. A written argument may be included explaining why the Florida Bar member believes the committee’s opinion is either correct or incorrect and may contain citations to relevant authorities. Comments should be submitted to Jonathan D. Grabb, Ethics Counsel, The Florida Bar, 651 E. Jefferson Street, Tallahassee 32399-2300, or emailed to eto@flabar.org, and must be postmarked no later than January 2, 2024.
The lengthy proposed ethics advisory opinion is below:
PROFESSIONAL ETHICS OF THE FLORIDA BAR
Proposed Advisory Opinion 24-1
[DATE]
The Florida Bar Board of Governors has directed the Board Review Committee on Professional Ethics to issue an opinion regarding lawyers’ use of generative artificial intelligence (“AI”). The release of ChatGPT-3 in November 2022 prompted wide-ranging debates regarding lawyers’ use of generative AI in the practice of law. While it is impossible to determine the impact generative AI will have on the legal profession, this opinion is intended to provide guidance to Florida Bar members regarding some of the ethical implications of these new programs.
Generative AI are “deep-learning models” that compile data “to generate statistically probable outputs when prompted.” IBM, What is generative AI?, (April 20, 2023), https://research.ibm.com/blog/what-is-generative-AI (last visited 11/09/2023). Generative AI can create original images, analyze documents, and draft briefs based on written prompts. Often, these programs rely on large language models. The datasets utilized by generative AI large language models can include billions of parameters making it virtually impossible to determine how a program came to a specific result. Tsedel Neeley, 8 Questions About Using AI Responsibly, Answered, Harv. Bus. Rev. (May 9, 2023).
While generative AI may have the potential to dramatically improve the efficiency of a lawyer’s practice, it can also pose a variety of ethical concerns. Among other pitfalls, lawyers are quickly learning that generative AI can “hallucinate” or create “inaccurate answers that sound convincing.” Matt Reynolds, vLex releases new generative AI legal assistant, A.B.A. J. (Oct. 17, 2023), https://www.abajournal.com/web/article/vlex-releases-new-generative-ai-legal-assistant (last visited 11/09/2023). In one particular incident, a federal judge sanctioned two unwary lawyers and their law firm following their use of false citations created by generative AI. Mata v. Avianca, 22-cv-1461, 2023 WL 4114965, at 17 (S.D.N.Y. June 22, 2023).
Even so, the judge’s opinion explicitly acknowledges that “[t]echnological advances are commonplace and there is nothing inherently improper about using a reliable artificial intelligence tool for assistance.” Id. at 1.
Due to these concerns, lawyers using generative AI must take reasonable precautions to protect the confidentiality of client information, develop policies for the reasonable oversight of generative AI use, ensure fees and costs are reasonable, and comply with applicable ethics and advertising regulations.
Confidentiality
A lawyer’s first responsibility when using generative AI should be the protection of the confidentiality of the client’s information as required by Rule 4-1.6 of the Rules Regulating The Florida Bar. The ethical duty of confidentiality is broad in its scope and applies to all information learned during a client’s representation, regardless of its source. Rule 4-1.6, Comment. Absent the client’s informed consent or an exception permitting disclosure, a lawyer may not reveal the information. In practice, the most common exception is found in subdivision (c)(1), which permits disclosure to the extent reasonably necessary to “serve the client’s interest unless it is information the client specifically requires not to be disclosed[.]” Rule 4-1.6(c)(1). Nonetheless, it is recommended that a lawyer obtain the affected client’s informed consent prior to utilizing a third-party generative AI program if the utilization would involve the disclosure of any confidential information.
Rule 4-1.6(e) also requires a lawyer to “make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the client’s representation.” Further, a lawyer’s duty of competence requires “an understanding of the benefits and risks associated with the use of technology[.]” Rule 4-1.1, Comment.
When using a third-party generative AI program, lawyers must sufficiently understand the technology to satisfy their ethical obligations. For generative AI, this specifically includes knowledge of whether the program is “self-learning.” A generative AI that is “self-learning” continues to develop its responses as it receives additional inputs and adds those inputs to its existing parameters. Neeley, supra n. 2. Use of a “self-learning” generative AI raises the possibility that a client’s information may be stored within the program and revealed in response to future inquiries by third parties.
Existing ethics opinions relating to cloud computing, electronic storage disposal, remote paralegal services, and metadata have addressed the duties of confidentiality and competence to prior technological innovations and are particularly instructive. In its discussion of cloud computing resources, Florida Ethics Opinion 12-3 cites to New York State Bar Ethics Opinion 842 and Iowa Ethics Opinion 11-01 to conclude that a lawyer should:
Ensure that the provider has an obligation to preserve the confidentiality and security of information, that the obligation is enforceable, and that the provider will notify the lawyer in the event of a breach or service of process requiring the production of client information;
Investigate the provider’s reputation, security measures, and policies, including any limitations on the provider’s liability; and
Determine whether the provider retains information submitted by the lawyer before and after the discontinuation of services or asserts proprietary rights to the information.
While the opinions were developed to address cloud computing, these recommendations are equally applicable to a lawyer’s use of third-party generative AI when dealing with confidential information.
Florida Ethics Opinion 10-2 discusses the maintenance and disposition of electronic devices that contain storage media and provides that a lawyer’s duties extend from the lawyer’s initial receipt of the device through the device’s disposition, “including after it leaves the control of the lawyer.” Opinion 10-2 goes on to reference a lawyer’s duty of supervision and to express that this duty “extends not only to the lawyer’s own employees but over entities outside the lawyer’s firm with whom the lawyer contracts[.]” Id.
Florida Ethics Opinion 07-2 notes that a lawyer should only allow an overseas paralegal provider access to “information necessary to complete the work for the particular client” and “should provide no access to information about other clients of the firm.” Additionally, while “[t]he requirement for informed consent from a client should be generally commensurate with the degree of risk involved[,]” including “whether a client would reasonably expect the lawyer or law firm to personally handle the matter and whether the non-lawyers will have more than a limited role in the provision of the services.” Id. Again, this guidance seems equally applicable to a lawyer’s use of generative AI.
Finally, Florida Ethics Opinion 06-2 provides that a lawyer should take reasonable steps to safeguard the confidentiality of electronic communications, including the metadata attached to those communications, and that the recipient should not attempt to obtain metadata information that they know or reasonably should know is not intended for the recipient. In the event that the recipient inadvertently receives metadata information, the recipient must “promptly notify the sender,” as is required by Rule 4-4.4(b). Similarly, a lawyer using generative AI should take reasonable precautions to avoid the inadvertent disclosure of confidential information and should not attempt to access information previously provided to the generative AI by other lawyers.
It should be noted that confidentiality concerns may be mitigated by use of an inhouse generative AI rather than an outside generative AI where the data is hosted and stored by a third-party. If the use of a generative AI program does not involve the disclosure of confidential information to a third-party, a lawyer is not required to obtain a client’s informed consent pursuant to Rule 4-1.6.
Oversight of Generative AI
While Rule 4-5.3(a) defines a nonlawyer assistant as a “a person,” many of the standards applicable to nonlawyer assistants provide useful guidance for a lawyer’s use of generative AI.
First, just as a lawyer must make reasonable efforts to ensure that a law firm has policies to reasonably assure that the conduct of a nonlawyer assistant is compatible with the lawyer’s own professional obligations, a lawyer must do the same for generative AI. Lawyers who rely on generative AI for research, drafting, communication, and client intake risk many of the same perils as those who have relied on inexperienced or overconfident nonlawyer assistants.
Second, a lawyer must always review the work product of a generative AI just as the lawyer must do so for the work of nonlawyer assistants such as paralegals. Lawyers are ultimately responsible for the work product that they create regardless of whether that work product was originally drafted or researched by a nonlawyer or generative AI.
Functionally, this means a lawyer must verify the accuracy and sufficiency of all research performed by generative AI. The failure to do so can lead to violations of the lawyer’s duties of competence (Rule 4-1.1), avoidance of frivolous claims and contentions (Rule 4-3.1), candor to the tribunal (Rule 4-3.3), and truthfulness to others (Rule 4-4.1), in addition to sanctions that may be imposed by a tribunal against the lawyer and the lawyer’s client.
Third, these duties apply to nonlawyers “both within and outside of the law firm.” ABA Comm. on Ethics and Prof’l Responsibility, Formal Op. 498 (2021); see Fla. Ethics Op. 07-2. The fact that a generative AI is managed and operated by a third-party does not obviate the need to ensure that its actions are consistent with the lawyer’s own professional and ethical obligations.
Further, a lawyer should carefully consider what functions may ethically be delegated to generative AI. Existing ethics opinions have identified tasks that a lawyer may or may not delegate to nonlawyer assistants and are instructive. First and foremost, a lawyer may not delegate to generative AI any act that could constitute the practice of law such as the negotiation of claims or any other function that requires a lawyer’s personal judgment and participation.
Florida Ethics Opinion 88-6 notes that, while nonlawyers may conduct the initial interview with a prospective client, they must:
Clearly identify their nonlawyer status to the prospective client;
Limit questions to the purpose of obtaining factual information from the prospective client; and
Not offer any legal advice concerning the prospective client’s matter or the representation agreement and refer any legal questions back to the lawyer.
This guidance is especially useful as law firms increasingly utilize website chatbots for client intake. While generative AI may make these interactions seem more personable, it presents additional risks, including that a prospective client relationship or even a lawyer-client relationship has been created without the lawyer’s knowledge.
The Comment to Rule 4-1.18 (Duties to Prospective Client) explains what constitutes a consultation:
A person becomes a prospective client by consulting with a lawyer about the possibility of forming a client-lawyer relationship with respect to a matter. Whether communications, including written, oral, or electronic communications, constitute a consultation depends on the circumstances. For example, a consultation is likely to have occurred if a lawyer, either in person or through the lawyer’s advertising in any medium, specifically requests or invites the submission of information about a potential representation without clear and reasonably understandable warnings and cautionary statements that limit the lawyer’s obligations, and a person provides information in response. In contrast, a consultation does not occur if a person provides information to a lawyer in response to advertising that merely describes the lawyer’s education, experience, areas of practice, and contact information, or provides legal information of general interest. A person who communicates information unilaterally to a lawyer, without any reasonable expectation that the lawyer is willing to discuss the possibility of forming a client-lawyer relationship, is not a “prospective client” within the meaning of subdivision (a).
Similarly, the existence of a lawyer-client relationship traditionally depends on the subjective reasonable belief of the client regardless of the lawyer’s intent. Bartholomew v. Bartholomew, 611 So. 2d 85, 86 (Fla. 2d DCA 1992).
For these reasons, a lawyer should be wary of utilizing an overly welcoming generative AI chatbot that may provide legal advice, fail to immediately identify itself as a chatbot, or fail to include clear and reasonably understandable disclaimers limiting the lawyer’s obligations.
Just as with nonlawyer staff, a lawyer should not instruct or encourage a client to rely solely on the “work product” of generative AI, such as due diligence reports, without the lawyer’s own personal review of that work product.
Legal Fees and Costs
Rule 4-1.5(a) prohibits lawyers from charging, collecting, or agreeing to fees or costs that are illegal or clearly excessive while subdivision (b) provides a list of factors to consider when determining whether a fee or cost is reasonable. A lawyer must communicate the basis for fees and costs to a client and it is preferable that the lawyer do so in writing. Rule 4-1.5(e). Contingent fees and fees that are nonrefundable in any part must be explained in writing. Rule 4-1.5(e); Rule 4-1.5(f)(2).
Regarding costs, a lawyer may only ethically charge a client for the actual costs incurred on the individual client’s behalf and must not duplicate charges that are already accounted for in the lawyer’s overhead. See The Florida Bar v. Carlon, 820 So. 2d 891, 899 (Fla. 2002) (lawyer sanctioned for violations including a $500.00 flat administrative charge to each client’s file); ABA Comm. on Ethics and Prof’l Responsibility, Formal Op. 93-379 (1993) (lawyer should only charge clients for costs that reasonably reflect the lawyer’s actual costs); Rule 4-1.5(h) (lawyers accepting payment via a credit plan may only charge the actual cost imposed on the transaction by the credit plan).
Regarding fees, a lawyer may not ethically engage in any billing practices that duplicate charges or that falsely inflate the lawyer’s billable hours. Though generative AI programs may make a lawyer’s work more efficient, this increase in efficiency must not result in falsely inflated claims of time. In the alternative, lawyers may want to consider adopting contingent fee arrangements or flat billing rates for specific services so that the benefits of increased efficiency accrue to the lawyer and client alike.
While a lawyer may separately itemize activities like paralegal research performed by nonlawyer personnel, the lawyer should not do so if those charges are already accounted for in the lawyer’s overhead. Fla. Ethics Op. 76-33 & 76-38, Consolidated. In the alternative, the lawyer may need to consider crediting the nonlawyer time against the lawyer’s own fees. Id. Florida Ethics Opinion 07-2 discusses the outsourcing of paralegal services in contingent fee matters and explains:
The law firm may charge a client the actual cost of the overseas provider [of paralegal services], unless the charge would normally be covered as overhead. However, in a contingent fee case, it would be improper to charge separately for work that is usually otherwise accomplished by a client’s own attorney and incorporated into the standard fee paid to the attorney, even if that cost is paid to a third party provider.
Additionally, a lawyer should have sufficient general knowledge to be capable of providing competent representation. See, e.g., Att’y Grievance Comm’n of Maryland v. Manger, 913 A.2d 1 (Md. 2006). “While it may be appropriate to charge a client for case-specific research or familiarization with a unique issue involved in a case, general education or background research should not be charged to the client.” Id. at 5.
In the context of generative AI, these standards require a lawyer to inform a client, preferably in writing, of the lawyer’s intent to charge a client the actual cost of using generative AI. In all instances, the lawyer must ensure that the charges are reasonable and are not duplicative. If a lawyer is unable to determine the actual cost associated with a particular client’s matter, the lawyer may not ethically prorate the periodic charges of the generative AI and instead should account for those charges as overhead. Finally, while a lawyer may charge a client for the reasonable time spent for case-specific research and drafting when using generative AI, the lawyer should be careful not to charge for the time spent developing minimal competence in the use of generative AI.
Lawyer Advertising
The advertising rules in Subchapter 4-7 of the Rules Regulating The Florida Bar include prohibitions on misleading content and unduly manipulative or intrusive advertisements.
Rule 4-7.13 prohibits a lawyer from engaging in advertising that is deceptive or inherently misleading. More specifically, subdivision (b) includes prohibitions on:
(3) comparisons of lawyers or statements, words, or phrases that characterize a lawyer’s or law firm’s skills, experience, reputation, or record, unless the characterization is objectively verifiable; [and]….
(5) [use of] a voice or image that creates the erroneous impression that the person speaking or shown is the advertising lawyer or a lawyer or employee of the advertising firm unless the advertisement contains a clear and conspicuous disclaimer that the person is not an employee or member of the law firm[.]
As noted above, a lawyer should be careful when using a generative AI chatbot for advertising and intake purposes as the lawyer will be ultimately responsible in the event the chatbot provides misleading information to prospective clients or communicates in a manner that is inappropriately intrusive or coercive. To avoid confusion, a lawyer should inform prospective clients that they are communicating with an AI program and not with a lawyer or law firm employee. Additionally, while many visitors to a lawyer’s website voluntarily seek information regarding the lawyer’s services, a lawyer should consider including screening questions that limit the chatbot’s communications if a person is already represented by another lawyer.
Lawyers may advertise their use of generative AI but cannot claim their generative AI is superior to those used by other lawyers or law firms unless the lawyer’s claims are objectively verifiable. Whether a particular claim is capable of objective verification is a factual question that must be made on a case-by-case basis.
Conclusion
In sum, a lawyer may ethically utilize generative AI technologies but only to the extent that the lawyer can reasonably guarantee compliance with the lawyer’s ethical obligations. These obligations include the duties of confidentiality, avoidance of frivolous claims and contentions, candor to the tribunal, truthfulness in statements to others, avoidance of clearly excessive fees and costs, and compliance with restrictions on advertising for legal services. Lawyers should be cognizant that generative AI is still in its infancy and that these ethical concerns should not be treated as an exhaustive list. Rather, lawyers should continue to develop competency in their use of new technologies and the risks and benefits inherent in those technologies.
Bottom line: Florida lawyers who use or plan to use artificial intelligence in their practice must be aware of the issues related to AI and address them to avoid potential issues. This is proposed advisory opinion is subject to potential revisions and formal approval by the BOG. If you are a Florida lawyer and would like to provide comments, should be submitted to Jonathan D. Grabb, Bar Ethics Counsel in Tallahassee or emailed to eto@flabar.org. Any written comments must be postmarked no later than January 2, 2024.
Be careful out there.
Disclaimer: this communication is not an advertisement, does not contain any legal advice, does not create an attorney/client relationship, and the comments herein should not be relied upon as legal advice by anyone who reads it.
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