Why the Proposed New Rules of Professional Conduct Should Be Rejected

Jerome Sapiro, Jr.
08.05.2010
Daily Journal

Nossaman Partner Kurt Melchior and colleague Jerome Sapiro, Jr. of The Sapiro Law Firm, co-authored the four part series, "Why the Proposed New Rules of Professional Conduct Should Be Rejected."  This series was published in the Daily Journal from 7/30/10 - 8/4/10. The first part can be viewed directly below; to read the complete series please click on the above link.   

We submitted the following as a dissent to the submission of a package of proposed new Rules of Professional Conduct, which is many hundreds of pages long and has gone from the Commission on Revision to the State Bar Board of Governors in the last few days. But we believe that the dissent will be buried within the cyclone of words that has gone forward, and more importantly, we feel that the issues concerning the proposed new Rules are of vital concern to every California lawyer, and should be known to the Bar.

We hope that our views, which we reached with no little pain and difficulty, will have merit in the eyes of our colleagues at the Bar, and that you will make your views known to the Board of Governors. It is not too late to save the Bar from what we firmly believe is a wrong path.

And please understand that the following is a single work. Space limitations require that it be published in segments, which may make the pieces seem somewhat fragmented. That is the best we could do, and we ask our readers to take the four parts of our article and consider them as a whole.

The Commission for the Revision of the Rules of Professional Conduct was appointed by the Board of Governors of the State Bar in 2001 and has labored for nine years. It is about to bring forward its final work product. We have been members of this Commission since its inception, as we were of its predecessor Commission, which wrote the current Rules of Professional Conduct that have served us well since 1989. The majority of the Commission's members also served on that prior incarnation. Our colleagues and we have spent an unbelievable number of hours over the last nine years, going word by word through the American Bar Association's Model Rules, which were last revised in 2002, under a directive that the Commission should see what it could do to conform California's Rules to the ABA Model Rules, which have been adopted in all other United States jurisdictions, albeit with extensive and various modifications from state to state.

The Commission has painstakingly examined the work product of the ABA word by word, and over these nine years has parsed that material as well as the myriad variations that members of the Commission proposed when we were unhappy with the ABA language. In various places we have departed from the ABA formulation. The two of us are convinced that, despite the intelligence, knowledge, and diligence of our colleagues, the new Rules will blur the reasonably clear lines that now exist, that lead to discipline for improper conduct. The new Rules will create numerous unnecessary obstacles to a reasonable, careful, and client-oriented practice of law. The Board of Governors should reject the Rules; and if it does not, the Supreme Court should reject them.

The two authors do not agree on all of the criticisms contained in this paper. Jerry does not share the objections to the sale of geographic or subject matter practices; and Kurt does not share the objections to accepting the Legislature's solution to buying in at a client's probate or similar sale. But we are in such broad overall agreement that we have decided to go forward with our common protest.

As a first matter, let's be clear on what is involved. Common parlance refers to these Rules as the "ethical rules" governing lawyers. Not true: they are promulgated by the Supreme Court and have the force of law in governing the professional conduct of all California lawyers. Ethics are everyone's private business. Non-compliance with the Rules of Professional Conduct can subject a lawyer to discipline, including suspension or loss of license; and their violation may indicate a violation of a professional standard of care, creating civil liability. (Mirabito v. Liccardo (1992) 4 Cal.App.4th 41.)

The current Rules of Professional Conduct and the official comments to those Rules take up 29 double column pages in the State Bar's Publication 250, "California Rules of Professional Conduct and the State Bar Act." An incomplete late draft of the new version takes up 99 pages of the same format. The actual "final, final" work product will be still longer. Is there so much new and regulatory development in the law of lawyers that the details of lawyers' regulation have become more than three times more complicated in just over 20 years? The answer is no.

To be sure, the proposed new Rules include many new and sometimes painful regulations; but the main part of the expansion lies in hopelessly wordy, academic and obscure musings called Comments. For instance, proposed Rule 1.7, entitled "Conflict of Interest: Clients," has 38 comments, but even so it is not the only rule dealing with conflicts of interest. Depending on how you count them, there are at least 8 more conflict of interest rules. By contrast, the only current rule concerning conflicts of interest - Rule 3-310 - has just 12 paragraphs of "Discussion," many of which are just two to three lines long, while Comment 22 to proposed Rule 1.7 is 42 lines long all by itself! And that is just one of 38 Comments to that one proposed Rule. We will discuss the substantive content of the Rules and Comments later.

The present Professional Rules of Conduct are reasonably clear. They have served us well for more than 20 years, and there has been no general complaint that they are inadequate. Amendments have been few. Some of the new proposed Rules are often rigid where the present rule allows flexibility, as we will explain. At other times, the converse is true: the new proposed Rules are at times more unnecessarily yielding, and some are exceedingly vague. But before we turn to our main theme, we would like to report on last weekend's meeting of the Commission. This was the Commission's "final, final" meeting except for whatever may be returned to us by the Board of Governors or the Supreme Court, and its activities at that well seasoned event are indicative of the various ills which the new Rules, if adopted, will bring on all members of the State Bar,

Because our rules are disciplinary rules, the violation of which is cause for discipline, they should state principles about which there is broad consensus. However, the proposed new rules do not do that. To start with a highly controversial rule which is also discussed below, the Commission voted 6-6 on a motion to adopt proposed Rule 1.8.10 about "sexual relations with client," meaning that the Rule would not be recommended for adoption. After further discussion, one member changed her vote to an abstention, and the Rule was passed out by the overwhelming vote of 6:5:1, marking the Commission's fourth about-face on whether this rule should or should not go forward. For further detail about the issues involved on this vote, read on below.

Regarding proposed Rule 1.17, which would for the first time allow a lawyer or law firm to sell a geographic or subject matter part of the law practice, a motion to delete the permission to sell a geographic part of the practice failed by a 4:4 vote with two abstentions. The Rule then passed out of the Commission by an overwhelming 5-4 vote with one abstention.

The ABA Model Rules include a "snitch" rule: a mandatory requirement that an attorney report to the State Bar "when the attorney knows that another lawyer has committed a felonious criminal act that raises a substantial question as to that lawyer's honesty, trustworthiness or fitness as a lawyer." Note that no conviction is necessary to trigger this reporting provision. Most informed lawyers agree that mandatory reporting has its problems, as exemplified by Illinois' Himmel case in which a lawyer was found to have violated that state's snitch rule when his client directed the lawyer not to report but instead to work out the problem with the miscreant lawyer by obtaining restitution for the client. The lawyer who accomplished the client's wishes was then found to have thereby violated the snitch rule. Still, the Commission is recommending adoption of a somewhat modified snitch rule - making mandatory informants out of all of us - by the overwhelming vote of 6-5-1.

Rule 1.5, concerning the important subject of Fees for Legal Services, failed of adoption on the first vote, 6-6. (I won't detail the issues that may have influenced various of the voters.) One member then changed her vote, and the rule is now recommended for adoption by a 7-5 margin.

Kurt W. Melchior is a Partner at Nossaman's San Francisco office and chair of the Firm's Insurance Coverage Practice Group. He serves on the State Bar Commission for Revision of the Rules of Professional Conduct. He can be reached at 415.438.7279 or kmelchior@nossaman.com.

Jerome Sapiro Jr. of The Sapiro Law Firm in San Francisco handles a wide variety of business litigation, legal ethics, estate planning, probate, and trust matters. He serves on the State Bar Commission for Revision of the Rules of Professional Conduct; is a past chair of the State Bar Litigation Section; and was a member of the State Bar Committee on Administration of Justice. He can be reached at 415.771.0100 or jsapiro@sapirolaw.com.

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