Bar News - August 10, 2007
Changes to Ethics Rules Take Effect in ‘08
By: Dan Wise
Rewriting the Rules: It's Final!
The NH Supreme Court late last month adopted new Rules of Professional Conduct that will take effect Jan. 1, 2008.
It is the first major rewrite of the NH lawyers’ ethics code since 1986, and, among many notable changes, imposes a stricter pro bono duty, specifying that each attorney has the “responsibility” to provide at least 30 hours of pro bono service each year, and allows for fee-splitting (informally known as “naked referrals”).
(The Court’s adoption of the rules came in a July 25, 2007, order that also makes changes to the fee caps for the indigent defense and GAL fees for indigent cases. Read the 162-page order at http://www.courts.state.nh.us/.)
The following are some of the major changes in the new rules. Attorneys are urged to review the entire proposal to consider the implications of changes on their areas of practice.
- Fees: (Rule 1.5 f) Lawyers from different law firms may now share fees if the fees are divided “in reasonable proportion to the services performed or responsibility or risk assumed by each,” or “based on an agreement with the referring lawyer” (also known as a “naked referral”). In either case, clients must agree to the fee division in writing, and the total fee paid by the client cannot be increased due to the fee division arrangement.
- Conflicts: (Rule 1.7) Both in the proposed rule and in several paragraphs of Comments, greater guidance is provided than exists in the current rule on when an attorney can or cannot represent different clients in the same matter. Rule 1.10 allows for exceptions to the imputation of conflicts for attorneys within a firm to represent a client who poses a conflict due to the “personal interest” of a particular lawyer in the firm. The new rule allows others in the firm to represent the client as long as the personal interest conflict of the prohibited lawyer “does not present a significant risk of materially limiting the representation by others in the firm.” This would allow private firms to represent clients with adverse interests, as do public sector lawyers such as the Attorney General, as long as “firewalls” prevent client information from being accessible to the prohibited lawyer.
- Conduct of Lawyer-Officials: (Rule 1.11A) This Rule was modified by the Court in the adopted version to address an objection raised by attorney Martin Gross. He objected to proposed language that would restrict the participation of lawyers in public office in situations where other members of that attorney’s law firm were appearing or interacting with entities whose members had been appointed by that lawyer-public official.
- Safekeeping of property: Rule 1.15 (d) imposes a stricter standard on the drawing of money from client trust accounts that some attorneys say runs counter to common practice in NH in the handling of flat fees. The rule states: “A lawyer shall deposit into a client trust account legal fees and expenses that have been paid in advance, to be withdrawn by the lawyer only as fees are earned or expenses incurred.” (Emphasis added.) Michael Iacopino, of the NH Criminal Defense Lawyers Association raised objections to this language in comments to the Ethics Committee and the Court’s Rules Committee. He said that the phrase “as fees are earned’ would be problematic for attorneys who primarily operate with advance retainers and need to access funds from the client before significant actions have been taken in the case. The Comment to this rule runs several paragraphs, and discusses the difficulties of interpretation that may arise as to when the fees in the trust account have been “earned.”
- Sale of law practice allowed: (Rule 1.17) The proposal creates a new Rule 1.17, following the guidance of the ABA’s Model Rules, governing the sale of a law practice, not currently allowed under the NH RPC.
- Greater attorney accountability for misstatements in court: (Rule 3.3 ) New language heightens attorneys’ duties to prevent or correct all misstatements (not just those that are “material), and clarifies remedial measures required when previously submitted evidence is discovered to be false.
- Trial Publicity: (Rule 3.6) For attorneys involved in high-profile cases covered by the news media, the minor changes in language in this Rule should be read carefully. Also, in the adopted version of this Rule, the Court deleted section (d) as submitted by the Rules Advisory Committee, based on objections raised by NH Attorney General Kelly Ayotte. Section (d) would have provided an exception to statements prohibited by the Rule that” a reasonable lawyer would believe is required to protect a client from the substantial undue prejudicial effect of recent publicity not initiated by the lawyer or the lawyer’s client.” A new section (d), extends prohibitions regarding prejudicial, extra-judicial statements to lawyers “associated in a firm or government agency” with the lawyer involved in the case being discussed.
- Multijurisdictional practice: (Rule 5.5) The Court has already acted to approve a new Rule 5.5 that allows lawyers admitted in other states (and in good standing there) to provide limited services in NH, using the “safe harbor” language provided in the ABA Model Rules, which would provide reciprocity for NH attorneys providing limited services in other jurisdictions.
- Voluntary Pro Bono Publico service: (Rule 6.1). The new rule markedly changes the emphasis to enhance the obligation of pro bono service. The new rule begins: “Every lawyer has a professional responsibility to provide legal services to those unable to pay. A lawyer should aspire to render at least (30) hours of pro bono publico legal services per year.” (The language parallels the ABA Model Rule, except it reduces the numerical obligation from 50 hours annually.) By contrast, NH’s existing rule has more permissive language, and begins: “A lawyer should, consistent with his or her expertise and interests, render public interest legal services.”
The new Rules will provide more guidance to practitioners than the current RPC as they include extensive Comments written by the Ethics Committee. These Comments will be published with the Rules, although they are not “adopted” as part of the Rules. As explained in the Statement of Purpose, the Comments are intended to be “interpretive, not mandatory.” According to Rolf Goodwin, former chair of the Ethics Committee, who oversaw the drafting process of the new Rules, the Court intends to allow the Ethics Committee to update the Comments as circumstances dictate. By not “adopting” the Comments, updates will not be required to go through the Court’s rule-making process and will be advisory rather than official.
The Ethics Committee has worked on the rule-by-rule review since 2001, prompted by a request from the NH Supreme Court itself. The Ethics Committee sought to incorporate recent caselaw, and changes in technology and practice, as well as proposing fixes to recurring problems in the wording of existing rules. It has largely used the ABA Ethics 2000 Commission rewrite of the Model Rules of Professional Conduct as a template, but departed from the ABA approach as necessary, and included new rules for NH.
Editor’s Note: We welcome your comments or interpretations of the new Rules and we will facilitate discussion of these changes in Bar News and on the Web site. Visit a special section at http://www.nhbar.org/publications/ethics/default.asp that allows for easier perusal of the Rules in a clickable rule-by-rule format (with links to the existing Rule and to the ABA Rule.) The Web page also has links to recent CLE programs on aspects of the new rules, past Bar News articles and other commentary.