Recent natural disasters, both nationally and in Wisconsin, have illustrated how vulnerable a law practice can be to the destruction of property and interruption of business. Disaster planning can mitigate the harm to the clients and the firm, and much information is available about the practical steps lawyers should take to be prepared for a disaster and to respond to one.1
There is little guidance, however, to help lawyers understand which actions or inactions in preparing for or responding to a disaster could constitute an ethical violation.2 An American Bar Association formal ethics opinion, issued on Sept. 19, 2018, attempts to fill this void by recommending actions that lawyers should take to fulfill their ethical obligations when a disaster threatens and after a disaster occurs.3 The ABA opinion and the actions it recommends are advisory only. However, the opinion reflects a perception that through “proper advance preparation and taking advantage of available technology,” lawyers should be able to continue to represent their clients uninterrupted regardless of the type of disaster.
ABA Formal Opinion 482: Ethical Obligations Related to Disasters
ABA Formal Opinion 482 focuses on the ethical obligation that law firm partners and managers have under Model Rule 5.14 to implement policies and procedures to ensure that all lawyers in the firm comply with the Rules of Professional Conduct. This ethical obligation, for example, requires law firm partners and managers “to implement reasonable measures to safeguard property and funds they hold for clients or third parties, prepare for business interruption, and keep clients informed about how to contact the lawyers (or their successor counsel).”5 These policies and procedures play a crucial role in both being prepared for a disaster and responding after a disaster strikes.
Some of the specific ethical obligations addressed by the ABA opinion include communication with clients, loss of files and other client property, continued representation in the area affected by the disaster, withdrawal from representation after the disaster, and solicitation and advertising.
Communication with Clients
Model Rule 1.4, like SCR 20:1.4, requires lawyers to communicate with clients.6 The clients will need to know if the lawyer can continue to represent the client or if the lawyer may need to withdraw because of the effects of the disaster. “To be able to reach clients following a disaster, lawyers should maintain, or be able to create on short notice, electronic or paper lists of current clients and their contact information. This information should be stored in a manner that is easily accessible.”7 The opinion also recommends that when a disaster is predicted, lawyers should consider providing clients with a means by which the lawyer can be reached if emergency communication is necessary. The opinion suggests adding that information to the engagement agreement.
Lawyers are reminded of their obligations to keep abreast of technology related to law practice8 and to “make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client.”9
Loss of Files, Trust Account Records, and Other Client Property
The ABA opinion acknowledges that the files and trust account records of some lawyers may be destroyed in a disaster and that lawyers “who maintain only paper files or maintain electronic files solely on a local computer or local server are at higher risk of losing those records in a disaster.”10 Consequently, the opinion concludes: “To prevent the loss of files and other important records, including client files and trust account records, lawyers should maintain an electronic copy of important documents in an off-site location that is updated regularly.”11
A lawyer’s obligations regarding destroyed files depends on whether the client is a current or former client and on the nature of the documents in the file. The opinion creates categories of documents: documents that are originals or have intrinsic value, documents that have no intrinsic value or serve no useful purpose to the current or former client, and documents that are necessary for current representation or would serve some useful purpose to the client.12
“Under the lawyer’s duty to communicate, a lawyer must notify current clients of the loss of documents with intrinsic value, such as original executed wills and trusts, deeds, and negotiable instruments. Lawyers also must notify former clients of the loss of documents and other client property with intrinsic value. A lawyer’s obligation to former clients is based on the lawyer’s obligation to safeguard client property under Rule 1.15.”13
Moreover, Rule 1.15 requires lawyers to “make reasonable efforts to reconstruct documents of intrinsic value for both current and former clients, or to obtain copies of the documents that come from an external source.”14 To avoid the difficulties created by this situation, lawyers should consider returning all original documents and documents with intrinsic value to clients at the end of the representation.15
A lawyer is not required, however, to notify either current or former clients about “lost documents that have no intrinsic value, that serve no useful purpose to the client or former client, or for which there are electronic copies.”16
Continued Representation in the Area Affected by the Disaster
The ABA opinion states that “[l]awyers who continue to provide legal services in the area affected by a disaster have the same ethical obligations to their clients as before the disaster.”17 In an emergency, however, lawyers may “give advice or assistance in a matter in which the lawyer does not have the skill ordinarily required where referral to or consultation or association with another lawyer would be impractical.”18 The assistance should be limited to that reasonably necessary in the circumstances so that the client’s interest is not jeopardized.19
The opinion recognizes that lawyers may not be able to access paper files after a disaster. Consequently, the opinion concludes that “lawyers must evaluate in advance storing files electronically so that they will have access to those files via the Internet if they have access to a working computer or smart device after a disaster.”20 Lawyers who choose to store client files in the cloud are reminded that they should select a reputable provider, take reasonable precautions to protect the confidentiality of client information, and take reasonable steps to ensure that the information will be readily accessible to them.21
Because a disaster may affect financial institutions in which trust funds are held or the lawyer’s ability to communicate with the financial institution, lawyers should take appropriate steps in advance to determine how they will obtain access to their accounts after a disaster.
The opinion states that “[l]awyers also must take reasonable steps in the event of a disaster to ensure access to funds the lawyer is holding in trust.”22 The opinion suggests that even before a disaster, “all lawyers should consider” adding another signatory to trust accounts in case of unexpected death, incapacity, or prolonged unavailability, as well as designating a successor lawyer.23
Moreover, because a disaster may affect financial institutions in which trust funds are held or the lawyer’s ability to communicate with the financial institution, “lawyers should take appropriate steps in advance to determine how they will obtain access to their accounts after a disaster.”24 The opinion further suggests that lawyers who have “notice of an impending disaster should take additional steps.” For example, “a transactional lawyer should review open files to determine if the lawyer should transfer funds to a trust account that will be accessible after the disaster or even attempt to complete imminent transactions prior to the disaster if practicable.”25
Withdrawal from Representation after the Disaster
If a lawyer is unable to fulfill ethical obligations to a client because of circumstances following the disaster, then the lawyer may be required to withdraw from representation. Model Rule 1.16(a)(1), which is identical to SCR 20:1.16(a)(1), requires the lawyer to withdraw if “the representation will result in violation of the Rules of Professional Conduct.” Model Rule 1.16(a)(2), which is also identical to SCR 20:1.16(a)(2), requires a lawyer to withdraw if “the lawyer’s physical or mental condition materially impairs the lawyer’s ability to represent the client.” Consequently, the opinion concludes that in “determining whether withdrawal is required, lawyers must assess whether the client needs immediate legal services that the lawyer will be unable to timely provide.”26
Solicitation and Advertising
Although lawyers may want to offer legal services to persons affected by the disaster, lawyers nevertheless must comply with the advertising and solicitation rules.27 A lawyer is prohibited from soliciting professional employment by in-person or live telephone or real-time electronic contact when a significant motive for the lawyer’s doing so is the lawyer’s pecuniary gain, unless the person contacted is a lawyer, or has a family, close personal, or prior professional relationship with the lawyer.28 Lawyers may, however, solicit in person to offer pro bono legal services to persons affected by the disaster because the lawyer’s motive does not involve pecuniary gain.29
Lawyers may also, using written, recorded, or electronic communication, target persons affected by the disaster who are known to be in need of legal services in a particular matter, but the lawyers must comply with Rules 7.1-7.3.30 The words “Advertising Material” must be on the outside envelope, if any, and at the beginning and ending of any printed, recorded, or electronic communication. A copy of the communication must be filed with the Office of Lawyer Regulation within five days after its dissemination.
Text of Selected Supreme Court Rules
SCR 20:5.1 Responsibilities of partners, managers, and supervisory lawyers
(a) A partner in a law firm, and a lawyer who individually or together with other lawyers possesses comparable managerial authority in a law firm, shall make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that all lawyers in the firm conform to the Rules of Professional Conduct.
(b) A lawyer having direct supervisory authority over another lawyer shall make reasonable efforts to ensure that the other lawyer conforms to the Rules of Professional Conduct.
(c) A lawyer shall be responsible for another lawyer’s violation of the Rules of Professional Conduct if:
(1) the lawyer orders or, with knowledge of the specific conduct, ratifies the conduct involved; or
(2) the lawyer is a partner or has comparable managerial authority in the law firm in which the other lawyer practices, or has direct supervisory authority over the other lawyer, and knows of the conduct at a time when its consequences can be avoided or mitigated but fails to take reasonable remedial action.
SCR 20:1.4 Communication
(a) A lawyer shall:
(1) Promptly inform the client of any decision or circumstance with respect to which the client’s informed consent, as defined in SCR 20:1.0(f), is required by these rules;
(2) reasonably consult with the client about the means by which the client’s objectives are to be accomplished;
(3) keep the client reasonably informed about the status of the matter;
(4) promptly comply with reasonable requests by the client for information; and
(5) consult with the client about any relevant limitation on the lawyer’s conduct when the lawyer knows that the client expects assistance not permitted by the Rules of Professional Conduct or other law.
(b) A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation.
The Search for Reasonableness
At first read, the ABA opinion seems to set a standard that requires lawyers to be Herculean. For example, the opinion states that lawyers who have “notice of an impending disaster should take additional steps.” To illustrate “additional steps,” the opinion suggests that “a transactional lawyer should review open files to determine if the lawyer should transfer funds to a trust account that will be accessible after the disaster or even attempt to complete imminent transactions prior to the disaster if practicable.”31
The Rules of Professional Conduct are, however, “rules of reason,”32 and this reasonableness standard appears throughout the Rules. For example, SCR 20:5.3 requires that partners and managers “make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that all lawyers in the firm conform to the Rules of Professional Conduct.” In fact, the opinion itself states that lawyers have an ethical obligation to implement reasonable measures to safeguard property and funds, prepare for business interruption, and keep clients informed about how to contact the lawyers.
Lawyers may solicit in person to offer pro bono legal services to persons affected by the disaster because the lawyer’s motive does not involve pecuniary gain.
Similarly, SCR 20:1.15(f)(1) requires lawyers to have in place “commercially reasonably security measures” for trust account transactions. SCR 20:1.6(d) requires that a lawyer “make reasonable efforts to prevent inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client.” Lawyers are not required to use only infallibly secure methods of communication or to guarantee that a breach of confidentiality cannot occur.33
In other words, lawyers must make reasonable efforts to communicate with their clients, to protect their clients’ property, to protect the confidentiality of their clients’ information, and to protect their ability to reliably access and provide information relevant to a client’s matter when needed.
But what is reasonable? Reasonable is defined in SCR 20:1.0(k): “‘Reasonable’ or ‘reasonably’ when used in relation to conduct by a lawyer denotes the conduct of a reasonably prudent and competent lawyer.” As a general rule, to be reasonable, the lawyer’s efforts must be commensurate with the risks presented.34 Consequently, there is no one-size-fits-all answer: the risks will vary depending on the situation. Disasters vary in size and scope, from the recent flooding in large parts of Wisconsin to a broken pipe or an electrical fire. The type and size of the practice as well as the special needs of individual clients will vary. Lawyers must exercise their professional judgment.
Conclusion
The foremost value of the ABA opinion is that it strongly encourages lawyers to make reasonable efforts to protect their clients and their practices in the event of a disaster. It recommends ways in which lawyers can do so. Not all the specific recommendations in the opinion, however, may be feasible or reasonable for all lawyers, all locations, and all types of law practice.
What is the opinion’s best advice? “Lawyers should review these and other resources and take reasonable steps to prepare for a disaster before one strikes the communities in which they practice. Lawyers should also review their disaster preparedness plans when a disaster threatens. Included within disaster planning, and of particular importance for sole practitioners, is succession planning so that clients and others know where to turn if a lawyer dies, is incapacitated, or is displaced by a disaster.”35 If your firm needs additional assistance, please contact the State Bar of Wisconsin Ethics or Practice411™ programs for confidential consultations.
Practical Tips for Disaster Preparedness
By Christopher C. Shattuck
ABA Formal Opinion 482 changes the perception of what lawyers “should” be doing to plan for and recover from a disaster. In fact, the opinion uses “should” 45 times. Practice411™ has long stressed that lawyers should have strong practice-management protocols in place that exceed the requirements articulated pursuant to the Rules of Professional Conduct and client requirements. The ABA opinion, while only advisory, raises the bar for lawyers. Here are some recommendations for lawyers who seek to practice ahead of the curve.
Communication with Clients
The “should” part of this opinion basically stresses that lawyers need to have a way to communicate with their clients when disaster strikes and that the alternative contact arrangements should appear in engagement letters. An easy and low-cost way to comply with the new communication recommendation requirement is to establish a Google Voice account. You can access messages from the Google Voice account anywhere that you have internet access. Another alternative, albeit not free, would be to convert your entire phone system to VoIP (voice over internet protocol). With this option, you’ll also be able to access your phone system anywhere you have internet access.
If you are using the VoIP phone system, your client contact information can be stored in the phone system’s database. If you decide to use the Google Voice account, you should consider storing your master contact list for clients in a secure cloud-storage database. In either case, when a disaster strikes you should have the ability to look up contact information for your clients and have the ability to contact your clients.
Loss of Files, Trust Account Records, and Other Client Property
Although the ABA opinion does not explicitly state that lawyers are required to operate in a paperless environment, the opinion stresses that lawyers should maintain a regularly updated, off-site electronic storage facility for documents. If your firm currently uses cloud-based practice management solutions, then the only extra steps you’ll need to take to comply with this recommendation are to ensure that all documents are being stored, captured, or placed into your practice management software. Lawyers using private servers must ensure the information on the private servers is being backed up to a different, off-site location.
If you do not store your information electronically, there are cost-effective ways to convert to an electronic system. For instance, you can obtain a subscription to cloud-based practice management systems for $40-$100 per month, per user. If you do not want to store your information in the cloud, you can back up your information to an external, encrypted hard drive and take the drive with you in the event you need to access your information remotely. There are other options; just ensure that you use reasonable methods to safeguard the data.
When seeking to protect original documents or documents with intrinsic value, consider storing those documents in disaster-proof containers (fireproof, waterproof, and damage proof). You’ll want to ensure that whatever container you select also can be mobile. In the event of a known, impending disaster, such as a severe storm system, you must have the ability to move the container to a safe area.
Continued Representation in the Area Affected by the Disaster
While not specifically requiring lawyers to use financial institutions with a national presence, the ABA opinion indicates that lawyers should have the ability to transfer and access client funds in the event of a disaster. This probably will not be an issue for lawyers who already use a large, national bank or credit union. However, for those lawyers who use local financial institutions whose branches are concentrated in a small geographical area, the opinion seems to imply that perhaps those institutions should only be used if they can guarantee lawyers continued access to their funds in case of a disaster. If a natural disaster will render you unable to access the funds from your financial institution, the opinion recommends obtaining the services of a financial institution that will provide you with uninterrupted access to your funds.
Withdrawal from Representation, Solicitation, and Advertising after the Disaster
The simple lesson here is in line with the overarching requirements of the ABA opinion, in that lawyers should have mechanisms in place to withdraw from representation and avoid soliciting or advertising in violation of the rules of professional conduct, which basically requires lawyers to have electronic and remote ways of addressing matters. Remember that withdrawing from representation does not only apply to matters that have been filed with the court but also applies to matters for which lawyers have been retained to file cases. To withdraw efficiently, lawyers would need to have access to their case management systems to determine pending and existing matters.
Similarly, for solicitation or advertising, lawyers would need the ability to access jobs that have established publication deadlines. Lawyers will want to have electronic control to ensure not only that solicitations or advertisements do not violate the rules of professional responsibility but also to avoid sending a poorly timed advertisement before, during, or after a disaster. Lawyers should continue to keep in mind that although a particular action might not violate the rules, failure to act can have severe consequences for their businesses.
State Bar Resources
To access disaster planning and recovery resources, visit Practice411™. To participate in the Succession Planning Registry, visit www.wisbar.org and choose myStateBar (click on the myProfile tab and go to Advanced Profile). For more information on the need for succession planning, see the ethics column in this issue.
Christopher C. Shattuck, Univ. of La Verne College of Law 2009, M.B.A. U.W.-Oshkosh 2015, is manager of Practice411™, the State Bar’s law practice assistance program. If you have questions about the business aspects of your practice, call (800) 957-4670.
Endnotes
1 See, e.g., ABA Comm. on Disaster Response & Preparedness, Surviving a Disaster: A Lawyer’s Guide (Aug. 2011).
2 The Rules of Professional Conduct cannot possibly delineate every situation that could give rise to an ethical violation, and there are only three ethics opinions from state bar associations on a lawyer’s obligations after a disaster. Footnote 3 of ABA Formal Opinion 482 provides a summary of those opinions: “N.Y. City Bar Ass’n Formal Op. 2015-6 (2015) advises lawyers to notify clients of destruction of client files in a disaster if the destroyed documents have intrinsic value (such as a will) or if the lawyer knows the client may need the documents; La. Advisory Op. 05-RPCC-005 (2005) advises lawyers on providing pro bono assistance through a hotline or both; and State Bar of Cal. Standing Comm. on Prof’l Responsibility & Conduct, Formal Op. 2004-166 (2004) advises lawyers not to participate in a mass disaster victims chat room because it is intrusive, but not because it is prohibited as in-person solicitation.”
3 ABA Standing Comm. on Ethics & Prof’l Responsibility, Formal Op. 482 (Sept. 19, 2018) (hereinafter ABA Formal Op. 482).
4 SCR 20:5.1 is identical to Model Rule 5.1. See Sidebar, Text of Selected Supreme Court Rules.
5 ABA Formal Op. 482.
6 SCR 20:1.4 Communication. See Sidebar, Text of Selected Supreme Court Rules.
7 ABA Formal Op. 482.
8 Id.; ABA Comment [8] to Model Rule 1.1 & SCR 20:1.1.
9 ABA Formal Op. 482; Model Rule 1.6(c); SCR 20:1.6(d).
10 ABA Formal Op. 482.
11 Id.
12 Id.
13 Id.
14 Id.
15 Id. n. 22.
16 ABA Formal Op. 482.
17 Id.
18 Id. n. 10; Comment [3] to ABA Model Rule 1.1 & SCR 20:1.1.
19 ABA Formal Op. 482.
20 Id.
21 Id.
22 Id.
23 Id. Footnote 14 of the ABA opinion reminds lawyers that a power of attorney to handle law firm affairs is insufficient because it expires on death of the principal.
24 Id.
25 Id.
26 Id.
27 ABA Formal Op. 482. See SCR 20:7.2 – 7.3 for the rules regarding advertising and solicitation.
28 SCR 20:7.3(a).
29 ABA Formal Op. 482.
30 Id. SCR 20:7.1, 7.2 and 7.3 are substantially the same as their Model Rule counterparts.
31 Id.
32 Preamble [14] to the ABA Model Rules of Professional Conduct.
33 Wisconsin Formal Ethics Op. EF-15-01: Ethical Obligations of Attorneys Using Cloud Computing (amended Sept. 8, 2017).
34 Id.
35 ABA Formal Op. 482.
