This article originally appeared in the March 24, 2008 issue of The Daily Journal.  Reprinted and/or posted with the permission of Daily Journal Corp. (2008).


Nothing draws controversy like revising professional conduct rules for lawyers. The legal community does not seem to have a unified view on what the scope of lawyer codes should be. Some view ethics rules in terms of their adequacy as minimum standards to weed out bad lawyers. Others evaluate rules in terms of whether they enhance compliance with the ethical norms of the legal profession. Still others believe that rules should have a dual purpose of ensuring ethical conduct by disciplinary enforcement and enhancing voluntary compliance as a critical means of maintaining the integrity of the Bar.      

The State Bar Rules Revision Commission has been toiling with these concepts in evaluating the existing California Rules of Professional Conduct and developing proposed amendments for public comment, and, ultimately, for consideration by the California Supreme Court. The State Bar Board of Governors recently authorized the release of 13 proposed rules for a 90-day public comment period. This batch of rules includes some of the most important rules that go to the core of lawyer conduct, including rules regulating fees for legal services, conflicts of interest among current clients, business transactions with clients, representing organizations, terminating representation, the purchase and sale of a law practice, communications with persons represented by counsel and avoiding interference with a lawyer’s professional independence.      

There are plenty of issues in these proposed rule amendments to warrant the attention of lawyers, bar organizations and the public. This initial public comment period affords an opportune time to send comments on these proposed rules to the commission. Interested persons and organizations can access the proposed rules using the State Bar’s Web site.     

A lot has happened since the last full-scale review of the rules occurred in 1989. Some further revisions were added in 1992. The American Law Institute published the Restatement Third, The Law Governing Lawyers, in 2000. The American Bar Association made extensive changes to the Model Rules in 2002 in light of developments in the law and the legal profession. In doing so, the ABA retained its restatement-style format. Important amendments to the Model Rules relating to multi-jurisdictional practice, confidentiality and entity representation were added in 2003. Most states have adopted a version of the revised Model Rules while others are well on their way to doing so.      

The Rules Revision Commission is charged with evaluating the existing rules in view of these developments and the legal profession’s rapidly changing environment. In the first group of rule amendments, distributed for public comment in 2006, the commission recommended the adoption of the Model Rules format, structure and style and the Model Rule number system. It also recommended use of the term “lawyer” rather than “member.” Proposed Rule 1.0, included in the first batch of rule amendments, states that the purpose of the rules is to: protect the public, protect the interests of clients, protect the integrity of the legal system and promote the administration of justice and promote respect for, and confidence in, the legal profession. A second group of proposed rules was distributed for initial public comment last year. There will be a final comprehensive public comment period on all of the proposed rules before they are submitted to the Supreme Court.     

The public comment period on the current batch of rule amendments will end on June 6.     

Here are a few of the things to look for in this new batch of proposed rules. Proposed Rule 1.5 on fees continues the prohibition against illegal or unconscionable fees and adds that expenses chargeable to a client cannot be unconscionable. In contrast, Model Rule 1.5 prohibits a lawyer from charging or collecting an unreasonable fee or an unreasonable amount for expenses.     

Proposed Rule 1.7 continues the regulation of conflicts arising from certain client representations and from a lawyer’s own interests and relationships. Although the proposed rule is numbered to track the comparable ABA Model Rule, the proposed standards and scope of the rule are substantially different from Model Rule 1.7. The proposed rule continues to regulate a number of specific conflict situations found in current rule 3-310 and distinguishes between conflicts arising from representing joint clients and conflicts arising from representing other current clients.      

Most jurisdictions follow the Model Rule in identifying a concurrent conflict as either representations that are “directly adverse” to one another or representations that create a significant risk that representing one client will be “materially limited” by the lawyer’s responsibilities to another client, a former client or a third person or by a personal interest of the lawyer. Model Rule 1.7(a). The Restatement has a similar formulation.      

The proposed rule perpetuates the distinction between “potential” and “actual” conflicts in representing joint clients, requiring “informed written consent” for both, while requiring only written disclosure without client consent in regard to a lawyer’s personal conflicts. There are 39 comments, the bulk of which are new and cover a broad spectrum of issues, including conflicts that might arise when a lawyer acts in a nonlawyer fiduciary capacity and advanced conflict waivers. California’s unique approach to conflicts deserves particular attention by public commentators.      

Proposed Rule 1.8.1 continues the regulation of conflicts arising from business transactions with clients and from a lawyer acquiring a pecuniary interest adverse to a client. A significant change in the text of the rule eliminates the need to advise the client in writing to seek the advice of independent counsel if the client is already represented in the transaction or acquisition by an independent lawyer. Another significant change is in Comments 5 and 6, which state that the rule does not apply to a modification of a fee agreement unless the modification confers on the lawyer a pecuniary interest adverse to the client.      

Proposed Rule 1.13 enhances a lawyer’s responsibilities in representing organizations by requiring “up the ladder” reporting of certain acts or omissions by constituents of the organization that are reasonably believed to be either a violation of a legal obligation to the organization or a violation of law reasonably imputed to the organization and that are likely to result in substantial injury to the organization. The mandatory reporting requirement tracks Model Rule 1.13 in many respects; however, unlike the Model Rule, there is no provision permitting lawyers to act as whistle-blowers.       Two proposed rules address the purchase and sale of a law practice. Proposed Rule 1.17.1 continues the restrictions imposed on the purchase and sale of all, or substantially all, of a lawyer’s law practice and is generally consistent with current rule 2-300 with several clarifying provisions. Rule 1.17.2 authorizes the purchase and sale of geographic areas or substantive fields of law practice by law firms as well as lawyers under restrictions provided in the proposed rule.

Proposed Rule 3.4 on fairness to opposing party and counsel amends current rules 5-200(E), 5-220 and 5-310 and incorporates new provisions found in Model Rule 3.4. Proposed Rule 3.5 on impartiality and decorum of the tribunal amends current rules 5-300 and 5-320 and generally follows the approach used in Model Rule 3.5. Rule 3.10 amends current rule 5-100 on threatening criminal, administrative or disciplinary charges. There is no corresponding ABA Model Rule.      

Proposed Rule 4.2 on communications with people represented by counsel generally retains the substantive content of current rule 2-100, but there are significant changes. It is anticipated that the proposed change from “party” to “person” will be seen as a significant policy issue particularly by prosecutors and government lawyers. The commission considered these concerns and determined that the exception in proposed paragraph (c)(3) that permits “communications authorized by law or a court order” addresses these concerns. That paragraph has been amplified by new commentary to make clear that authorized investigative prosecutorial practices are not intended to be affected by the change from “party” to “person.” See proposed new Comments 18 to 21. The proposed rule continues the exception for communications with a public officer, board, committee or body. This exception generated considerable debate and led to the inclusion of new Comments 11 to 16 to address the competing First Amendment and government client issues.

Proposed new Rule 4.3, dealing with communications with unrepresented persons, is a companion rule to proposed Rule 4.2 and is substantially similar to Model Rule 4.3. Proposed Rule 5.4 is patterned after Model Rule 5.4 and combines standards relating to the preservation of a lawyer’s professional independence that are currently found in rules 1-310, 1-320 and 1-600. The proposed rule generally retains the substantive content of each of the current rules but with changes in the text to track Model Rule 5.4 as amplified by the proposed comments. Proposed Comment 5, for example, clarifies that the rule applies to group, prepaid and voluntary legal service programs but does not prohibit the payment of court-awarded legal fees to a nonprofit legal aid, mutual benefit and advocacy group that is not engaged in the unauthorized practice of law. See Frye v. Tenderloin Housing Clinic Inc., 38 Cal.4th 23 (2006).      

There are many more differences, both obvious and subtle, in the proposed rules from the comparable Model Rules and California’s current rules. The public comment version of the proposed rule amendments includes a clean version of the proposed rule and redline versions that shows changes to the current California rule and changes to the comparable ABA Model Rule. Anyone interested should submit comments on these important rule changes.           

Mark Tuft is a partner in the San Francisco office of Cooper, White & Cooper, where his practice includes matters of the professional responsibility of lawyers and business and criminal litigation.

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