Virtual Law Practice

Category: Ethics

  • NJ Bona Fide Office Rule and Virtual Law Offices

    NJ Bona Fide Office Rule and Virtual Law PracticeNew Jersey’s Advisory Committee on Professional Ethics and the Committee on Attorney Advertising released a joint opinion dated March 25 that states that even when an attorney hires a virtual assistant or receptionist or shares a rented office space for conferences to attempt to create an office presence in the state, this does not create a “bona fide office” that complies with the state’s residency requirements for practicing law.

    This opinion limits attorneys licensed in New Jersey to having a physical law office where clients may call during regular business hours.  Such restriction on business discriminates against many solos and in particular women attorneys who may need to practice law from home, but for personal and security reasons, they do not want to provide their home address or phone number to clients.

    The opinion refers to “virtual offices” but defines them as “a type of time-share arrangement whereby one leases the right to reserve space in an office building on an hourly or daily basis” and does not address web-based, virtual law offices or the use of technology to deliver legal services online.  From the discussion in the opinion it may be assumed that any law practice without a physical, dedicated office building would be included as violating Rule 1:21-1(a).

    How this restriction will affect solos and small firms wanting to form completely virtual law offices is yet to be seen. However, the joint opinion does allow for attorneys with traditional law practice to also operate virtual law office with adequate notice to prospective clients of the firm’s physical office location. This does not sound like it protects the solo practitioner wanting to operate a home-based virtual law office. Or an attorney located in another state who is licensed in NJ and wants to provide NJ legal services through their virtual law office. (more…)

  • Technology at Techshow to Enable Online Delivery of Legal Services

    Exhibitor Hall at this year’s ABA Techshow has a number of different web-based technologies that allow  for attorneys to take all or portions of their practice online.  Most of them seem to be practice management applications, and not so much geared towards working online securely with clients. However, there are a few new developments that assist virtual law practice that warrant mention.  

    DirectLaw and VLOTech are again this year the two products intended for the online delivery of legal services. (By way of disclaimer, and as most of my readers know, my husband and I co-founded VLOTech which was acquired by Total Attorneys this past fall).  Both products are SaaS, but with different features and focuses so they will appeal to different types of law practices.  Both products facilitate the unbundling of legal services online and from my exploration of the exhibitors’ booths there are not any other products at the show this year that focus on unbundling legal services for online clients.  DirectLaw has recently launched a new site for members of the public to locate a virtual law firm, MyLawyer.com.  If you operate a virtual law practice, you should see about getting a listing in their directory.  (more…)

  • Clearing Up the Terminology Before TECHSHOW

    TECHSHOW is here.  Some of the buzz this year is related to cloud computing, SaaS and web-based technologies that take aspects of law practice management online.  There are a lot of terms thrown around when discussing these topics.  One of them is “virtual law practice”.  We are bound to hear this phrase several times during TECHSHOW in various contexts.  Other terms, including VLOs, VLPs, virtual law offices, virtual law firms, online law offices, web-based or web-enabled law offices, are used to describe different methods of elawyering. However, when they are used, they are often not used to mean the actual delivery of legal services online to clients. 

    Elawyering is defined by Marc Lauritsen, the co-chair of the ABA’s eLawyering Task Force as

    all the ways in which lawyers can do their work using the Web and associated technologies.  These include new ways to communicate and collaborate with clients, prospective clients and other lawyers, produce documents, settle disputes and manage legal knowledge.  Think of a lawyering verb — interview, investigate, counsel, draft, advocate, analyze, negotiate, manage and so forth — and there are corresponding electronic tools and techniques.

    Check out the eLawyering Task Force’s website for more white papers and links to info about different elawyering methods. 

    When you ask attorneys to explain in detail what they mean when they say they have a “virtual law firm,” they may describe different combinations of elawyering.  However, from firm to firm there is usually a great deal of difference in the web-based technology they are using and each firm’s purpose for that technology in the scheme of their law practice management.

    So why try to limit the definition?  After all, when we try to cage something in there is the risk that this discourages future innovation and development of new forms of elawyering.  The key is whether the attorney is actually delivering legal services online to clients.  It should matter greatly in our profession for malpractice and ethics concerns.  If they are, the standards for daily use of web-based technology will be higher than if the technology is not being used to handle sensitive attorney/client data.  In other words, it should matter to their clients and their state bars whether they are delivering legal services online to clients using unencrypted methods of delivery and software products without the benefit of user agreements developed for the needs of legal professionals. 

    A virtual law practice involves the delivery of legal services to clients securely over the Internet by way of a client portal — whether the virtual law practice is completely web-based or integrated into a brick & mortar law office where the attorneys see in-person clients as well as their online clients.  Regardless of what web-based technology is used, the law firm is working with the client from the beginning of the legal representation through to the payment and rendering of legal services.   

    When discussing these issues, let’s be clear about what is meant by a “virtual law firm.”  It may be a paper(less) law office and the technology may be used for aspects of law practice management, but it is not virtual law practice.  When the practice of delivering legal services online to our clients is commonplace, as it will become in the near future, these distinctions will seem ridiculous.  But for the time being, they are important to keep us all on the same page.

  • Residency Requirements and the Virtual Law Practice

    I’ve been reading with interest the case of Attorney Ekaterina Schoenefeld who filed a lawsuit against the State of New York claiming that by requiring an attorney to maintain a physical law office in the state, New York law discriminates unconstitutionally against attorneys who are out-of-state.  Schoenefeld is licensed in California, New York and New Jersey and claims she was not aware of NY’s residency requirement before taking and passing the NY Bar Exam.   Law.com has a detailed article on the case and Carolyn Elefant over at MyShingle.com wrote a rousing post in support of this solo attorney’s plight.

    I do not know if in the case of Schoenefeld the attorney was planning on operating a virtual law office, but her intent was clearly to provide legal services pertaining to the law of each of the states for which she obtained a law license. This is a similar situation faced by attorneys wanting to open virtual law offices.  They may choose to reside in a state in which they do not hold a law license or to provide legal services of one state while maintaining an office in another.  The technology allows them the flexibility to deliver legal services online and choose where they live and work.

    In my opinion, residency or physical office requirements, which exist for some state bars, are an example of an out-dated restriction on the legal profession that could use some updating to reflect changes in law practice management.  If you feel like reading up on some examples of residency requirements, see New York’s §470 of Judiciary Law, Missouri State Bar Informal Advisory Opinion Number 970098 regarding Rule 5.5;   Tolchin v. New Jersey Supreme Court, 111 F.3d 1099 (3d Cir. 1997); Lichtenstein v. Emerson, 674 N.Y.S.2d 298 (App. Div. 1998);  Parnell v. West Virginia Supreme Court of Appeals, 110 F.3d 1077 (4th Cir. 1997) or Mich. Comp. Laws Ann. § 600.946 (the attorney must show intent “either to maintain an office in this state for the practice of law, and to practice actively in this state, or to engage in the teaching of law”).

    These residency requirements focus on the attorney “actively practicing law within the state.”  How should this be interpreted if the attorney physically resides in one state and actively practices law from a virtual law office providing the legal services pertaining to the laws of another state?  He or she is actively practicing law, just not physically within the state.  Residency requirements make more sense to me when they are restricted to attorneys who are handling litigation in that state and will be expected to make court appearances.  But if they are drafting state law contracts and handling IP projects for NY clients while living in NJ or CA? 

    Does the attorney need to run a physical law office or reside in the state in which he or she practices law?  It probably depends on the attorney’s practice area and client base.  For those practices in which it does make good business sense, then the residency requirements place a significant burden on the attorney trying to startup a virtual law office that is located out-of-state.  It seems a very geo-centric and out-dated rule in a society that has become increasingly more global and interconnected through technology. 

    I’d love to hear others thoughts on residency requirements whether related to a completely virtual office or a traditional law practice that is integrating a virtual law office to expand into multiple jurisdictions.

  • Presentation on Virtual Law Practice for Ethics Commission 20/20

    ABA Ethics Commission 20/20 PresentationThe ABA’s Commission on Ethics 20/20 held a public hearing at the ABA’s Mid-year conference in Orlando, Florida to discuss topics related to their Preliminary Issues Outline.  On Friday, I was honored to be invited to speak to the commission about virtual law practice. The ABA Now wrote up an article about the hearing and presentations here.  

    Below are slides from my presentation at the hearing.  The text of the hearing should be available on the ABA’s website at some point in the near future.  I am happy to report that the Commission is making a great effort to educate itself on the subject of virtual law practice from the benefits to the concerns related to this form of law practice.  I hope to have the opportunity in the future to share additional information on the topic with its members. 

    Virtual Law Practice – ABA Commission on Ethics 20/20

    View more presentations from Stephanie Kimbro.

  • Reminders for Avoiding Malpractice in Virtual Law Practice

     

    This past Friday I attended a Law Practice Management Section Council meeting at the NCBA Bar Center.  This is the first meeting I’ve attended in person. Usually I am on conference call and booming my thoughts to the group via voice box.   Thanks to the Chair, Lee Rosen, these meetings are about the least boring I’ve ever been in and worth the two hour drive up to Raleigh. 

    At each session, we have an educational “mini-CLE” for the council members.  This past Friday’s mini-CLE was presented by Mark Scruggs of NC Lawyers Mutual which provides services to attorneys licensed to practice in North Carolina.   Mark engaged us in a great “refresher” session on the top malpractice issues and how to avoid them.  Many of these tips are ones that every attorney knows by heart, but it can’t hurt to occasionally review the basics. 

    For the attorney with a virtual law practice, it might good to review these rules and put them in the perspective of how they apply to the use of technology to deliver legal services online.  Here are some of the reminders for avoiding malpractice that Mark discussed.  He did not talk about virtual law practice, but I’ve added here below how I thought they related to an attorney practicing law online.  These tips were based on those issues for which his company sees the most malpractice claims filed. (more…)

  • Contributing to the Lawyerist

    I’m happy to announce that I will be a contributor to the Lawyerist.com blog. Here’s my intro post. An article on unbundling legal services with a virtual law practice should post sometime next week. If anyone has requests for topics related to virtual law practice that they would like for me to cover on this blog or as a contributor to Lawyerist, please drop me a line.

  • Drawing the Line – What a Virtual Law Practice is Not

    Defining virtual law practice and the delivery of legal services online by licensed professionals is becoming ever more important as the market continues to fill with companies offering various forms of online legal services.  Two of the biggest concerns that surround these companies include the unauthorized practice of law (UPL) and misleading the public.  Many of these entities do not provide attorney review of the legal documents that they sale online and are coming up against strong criticism for this aspect as well some of their marketing techniques.  For example, the Connecticut Bar Association has formed a task force to review the websites that provide unbundled online legal services.  According to the task force, their primary concern is for the consumer’s safety.  Last year the North Carolina State Bar’s Authorized Practice Committee also investigated the services provided by LegalZoom claiming they constituted UPL by non-licensed professionals.

    Let’s be clear: the Internet-based legal services companies facing criticism do not provide the same level of quality or security of a virtual law office. (more…)

  • Recent AZ Bar Ethics Opinion Discusses eLawyering Methods

    The Arizona State Bar has published Ethics Opinion 09-04 “Confidentiality; Maintaining Client Files; Electronic Storage; Internet” in December 2009.  This opinion will apply to attorneys operating virtual law practices within the AZ Bar jurisdiction and is similar to the NC Bar 2008 Formal Ethics Opinion 5, Web-based Management of Client Records published July 2008.  In fact the NC Formal Ethics Opinion 5 is cited in this new AZ opinion.

    AZ Opinion 09-04 addresses the ability of an attorney to work with clients and deliver legal services online.  The question presented in the opinion lays out the method that the inquiring attorney would use to securely deliver the documents to his or her clients online.  In this case, the documents would be converted to “password-protected PDF format,” and the client would access those files for review over a secure site which uses “encryption and three layers of unique randomly generated alpha-numeric folder names and passwords.”

    The AZ Bar pointed to the two related, existing rules of professional conduct which are the same rules that we have seen applied in other opinions related to virtual law practice: Competence and Confidentiality of Information.  A previous AZ Bar ethics opinion has permitted electronic storage of law office data, including clients’ files (Az Ethics Op.05-04). 

    Here is what I love about this opinion.  They allow for the proposed method of delivering legal services online to the client, but they recognize that this is not where it ends. From the Opinion:

    However, the Committee also recognizes that technology advances may make certain protective measures obsolete over time.  Therefore, the Committee does not suggest that the protective measures at issue in Ethics Op. 05-04 or in this opinion necessarily satisfy ER 1.6’s requirements indefinitely.  Instead, whether a particular system provides reasonable protective measures must be “informed by the technology reasonably available at the time to secure data against unintentional disclosure.” N.J. Ethics Op. 701.  As technology advances occur, lawyers should periodically review security measures in place to ensure that they still reasonably protect the security and confidentiality of the clients’ documents and information. (emphasis added)

    This is clearly the best way that the state bars can address virtual law practice without preventing or discouraging innovation.   The attorney practicing law online has the responsibility to stay current on the security issues involved in using the technology. If they are not able to do so for themselves, then they need to trust an IT professional or their SaaS provider to keep their system up to date and protected.

  • Minimum Requirements for Delivering Legal Services Online

    Co-chairs of the ABA eLawyering Task Force, Marc Lauritsen and Richard Granat, have submitted a draft set of minimum requirements for delivering legal services online which was published in this month’s Law Practice Today.  As a member of the Task Force, we have discussed these minimum requirements as a set of guidelines that attorneys will be able to turn to when they are interested in forming a virtual law practice .  Once approved by the ABA’s LPM, these requirements may be used by different state bars as a way to guide attorneys in their states who are forming virtual law practices.  You may check out the minimum requirements posted in the article and the Task Force welcomes comments and reactions to the document through their listserv. 

    Keep in mind when reading these minimum requirements that the idea behind them is to provide guidance, but not to be too specific in ways that might stifle future innovation in the delivery of legal service.  The topics covered include website architecture, ethics issues, statement of terms and conditions, retainer agreement acceptance, online payment of legal fees, protecting client confidences, and security certification.

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