Last week I was honored to give a keynote at the annual Canadian Discipline Administrators Conference in Toronto hosted by the Law Society of Upper Canada. The attendees were the discipline authorities of the different Canadian Bar jurisdictions. After speaking with several of them and based on the Q & A session, I can report that our neighbors to the north are grappling with some of the same issues as our State Bar ethics regulators regarding the use of SaaS in law practice management.

An interesting idea was raised by a member of the group that the Canadian Bar might create a private cloud just for Canadian lawyers. I believe there was some mention of this as well in the cloud computing report published by the Law Society of British Columbia this summer.

Would this address some of the concerns surrounding lawyers placing their data into the hands of third-party providers and hosting it in a public cloud?  It’s certainly something to think about. My initial reaction was that it would limit competition and because of the expense of creating and maintaining a private cloud, might take away many of the cost-savings associated with a public cloud as well as cause problems when a law firm wants to use another SaaS product that does not collaborate with the Canadian Bar to host a copy of the data on the private cloud. But there would be benefits, especially for Canadian lawyers who are subject to a more rigorous auditing process that requires immediate access by regulators to a law firm’s data.

I still think the best approach to take would be to create guidelines for lawyers rather than restricting use of web-based technology to a private cloud or restricting technology use to a specific list of approved vendors, especially if that list of vendors might not be updated regularly.

What do you think about the creation of a private cloud? What if your state bar proposed to create a private cloud just for its members? What about cross-border and multijurisdictional practices?

The slides from the presentation are below. I’ve integrated several ethics slides that are specific to the Canadian Bar. For those of you familiar with my presentations, the first few slides may be familiar background information on cloud computing and virtual practice, so skip ahead to the interesting case studies and resources.

This Saturday I’m giving a live lecture focused on virtual law practice marketing strategy for my students in Concord Law School’s Small Business LLM program. I’m having the students slowly add in components of a business plan with each assignment so that by the end of the semester they have a complete and ready-to-implement business plan for a virtual law practice. Some of them are going to have completely web-based, unbundled practices and others are adding a virtual law office to their traditional, full-service offerings. Each form of virtual practice will require a unique marketing strategy based on their approach to providing unbundled services online and the state of their existing brand development.

I’ve written about marketing issues in virtual practice on this blog before. But because marketing a virtual practice is so dependant upon web-based forms of marketing which changes at a crazy pace, your strategy has to be regularly re-evaluated and revised.

Below are some bulleted tips and things to consider. Be warned, I am not even touching how social media plays into your strategy (which should be a major part) and for once, I’m not going to harp on ethical issues other than to tell you to check with your state bar and use some common sense.

Start out by asking: More »

Twice a year I compile a list of links to published articles and posts related in some  way to virtual law practice.  I’m a bit behind this year largely because of how quickly this area of practice management is evolving. I don’t just pull this together as a resource for the blog. It’s also a way to organize my thoughts around where trends are heading based on these developments.  If you don’t think the last nine months has been particularly busy in the elawyering arena, then look back at my list from this time last year.

Starting where I left off the last time, here is the list in loose chronological order.

California State Bar publishes ethics opinion, FEO 2010-179, related to the use of technology in law practice, specifically addressing an attorney’s duty of confidentiality to clients when using technology that may be accessed by a third-party. December, 2011

Pennsylvania Bar Association publishes Ethics Opinion No. 2010-060, January 2011. It’s not published online, but Niki Black wrote a summary of the opinion.

Regulatory Barriers to Virtual Law Practice, by Darryl Mountain, Slaw.ca, January 14, 2011

Total Attorneys Takes Proactive Role in Shaping the Future of the Legal Industry – Secures Investment from BIA Digital Partners, Business Wire,  January 19, 2011

LexisNexis Launches FirmManager at LegalTechNY LexisNexis Firm Manager, January 2011

IBM’s Watson is a contestant on Jeopardy and makes some in the legal profession ponder the use of computers to take over portions of a lawyer’s work. “Watson Computer, Making ‘Jeopardy’ Debut, Could Do Associate Research, IBM GC Says”, ABA Journal, By Debra Cassens Weiss, Feb 15, 2011

James M. McCauley, ethics counsel for the Virginia State Bar, writes an article for the February issue of the Virginia Lawyer Magazine, entitled “Cloud Computing — A Silver Lining or Ethical Thunderstorm for Lawyers?”, February 2011 More »

After five years, I finally got around to updating my virtual law office website. I’m still kicking the tires and making a few tweaks, but I’m pretty pleased with it as it is. I’ve got grand plans to update my whitepapers and to send out monthly emails to my online clients.  I’d also like to add realtime chat and more instructional videos and testimonials in the near future.

Because most of my clients are seeking online legal services, I needed to focus on the integration of social media applications and online “calls to action” to provide free, useful content related to NC Estate Planning. This approach should generate additional prospective clients for my practice.  I’ve also added a property analysis calculator for prospective clients to use to get an estimate of the value of their estate. The site launched last Tuesday afternoon and that week I landed a new estate planning client and saw an increase in prospective clients registering on my site. Not bad. Note also the disclaimer at the bottom of the homepage regarding information about my physical location, jurisdiction and office hours. There should be no question in anyone’s mind where I am licensed to practice law and serve clients.

I worked with Cynthia and Selena at Rowboat Media on the redesign. Feedback is welcome.

Here is a blatant redirect to another blog post written by Ron Friedmann who interviewed Bryce Arrowood, co-founder of Clearspire in D.C.

When I read about this virtual law firm, my first question was about the technology it used and whether it was solely for in-house communication and collaboration or whether the firm members were going to provide their clients with access and deliver a portion of their services online.  Nothing I read gave me enough details to understand how the technology behind their virtual law practice was structured.

Thankfully, Mr. Friedmann has done the hard work for us and provides a teaser at the end that he may get a demo of the tech and report back at a later point. Let’s hope so.  Here is the meat I was looking for from his post:

The firm created its own information technology stack to support efficient and collaborative work. The bottom layer consists of several practice management applications, a combination of highly-customized, third-party products and proprietary systems. The custom-built middle layer integrates and aggregates data from the bottom layer. And the proprietary top layer is the user interface. This was an ambitious project and required top talent (see the IT team credentials). Bryce reports the platform can scale to an unlimited number of users.

The stack runs in secure, hardened data centers with real-time mirroring to a back-up center for disaster recovery. Lawyers and staff can access the system securely anywhere in the world on both notebook computers and multiple brands of mobile devices. Access to data and software features depends on device security and configuration. Users with Clearspire-provided and -configured equipment have maximum access and can use the most features.

The firm has already successfully used this platform with lawyers and clients around the world. It was built from the ground up to respect varying global data privacy requirements.

As with some of the other larger firms I’ve spoken with about setting up a virtual law firm, the tech is a balance of proprietary systems with third-party products.  A solo or small firm would never have the funds to build a customized virtual law firm structure such as this.  But that is the benefit of cloud computing – a larger number of users can benefit from pooling their resources into the development of software and keep the costs down.

Hopefully we will get more details about how the Clearspire system is structured and how they intend to scale with it.  I’d love to know if they use any form of doc assembly and automation, if web or video conferencing tools are added in to the case and client management features, and whether they unbundle any of their services to clients and deliver online.

Many thanks to Ron Friedmann for sharing.

One of the more recent initial resolutions published by the ABA Commission on Ethics 20/20 clarifies Model Rule 5.5 as it relates to systematic and continous presence and shows the Commission’s acceptance of the growth of alternative law practice structures, such as virtual law practice.

Comment [4] of Rule 5.5 covers when systematic and continues presence is established in a jurisdiction by a lawyer who is not admitted to practice in that jurisdiction.  The question for virtual law practitioners is whether or not their physical presence in one state while they practice the law of another state online constitutes the authorized practice of law in another jurisdiction in violation of Rule 5.5.

The Commission’s changes to the comment are intended to help lawyers determine when their “non-physical” presence might be classified as “systematic and continuous.”  And more importantly, to make it clear that virtual law practice is still subject to the restrictions of the Rule 5.5(b). The comment also clarifies that legal services may be delivered online to clients in other jurisdictions occasionally as long as it is in compliance with Rule 5.5(c).

The previous version of the comment stated simply that “[p]resence may be systematic and continuous even if the lawyer is not physically present here.”  The revised version of Comment [4] provides this additional language and restructuring of the last paragraph:

For example, a lawyer may direct electronic or other forms of communications to potential clients in this jurisdiction and consequently establish a substantial practice representing clients in this jurisdiction, but without a physical presence here.  At some point, such a virtual presence in this jurisdiction may become systematic and continuous within the meaning of Rule 5.5(b)(1).  Moreover, a lawyer violates paragraph (b)(2) if the lawyer is not admitted to practice in this jurisdiction and holds out to the public or otherwise represents that the lawyer is admitted to practice law in this jurisdiction.

Let’s place that into a virtual law practice scenario: More »

The September/October issue of the ABA Law Practice Magazine is devoted to virtual practice.  I co-authored an article in the publication entitled Popular Cloud Computing Services for Lawyers: Practice Management Online with Tom Mighell.  Other topics in this issue contain discussions of a variety of virtual practice structures and technologies for online delivery and practice management.  Here are titles and links to some of the other articles in the issue which would be instructive to any attorney or law firm considering adding a virtual law office or other virtual component to its practice management structure:

Moving to a Virtual Practice Model – Do You Have the Right Stuff? By Jim Calloway

The Next Five Years – Predictions for the Future of eLawyering By Richard S. Granat and Marc Lauritsen

The Untethered Law Office – Tools and Tips for Getting It Done By Jay S. Fleischman

The Virtual Pulse Highlights from the 2011 ABA Legal Technology Survey Report

A couple weeks ago, I wrote a post for the NC Law Blog entitled “What Contact Information Must a Non-Traditional Law Firm Provide?“. The post discussed how more non-traditional law offices are opening up, many of them delivering legal services online, and how this is raising the question of how to comply with residency requirements, bona fide office rules and providing accessible contact information for a firm that may not have a physical office location in the jurisdiction to which the legal matter pertains. In the past, I’ve written about how residency requirements can be a barrier to entry for a virtual law practice: “Residency Requirements and the Virtual Law Practice.”

Last week brought good news on this front.  A U.S. District Court Judge in the North District of New York issued an opinion finding that New York’s Judicial Code Section 470 (which creates a residency requirement for members of the NY Bar) infringed on an attorney’s right to practice NY law.  Section 470 was last reenacted in 1945 and hasn’t been changed since then. An overhaul was long overdue.

In a nutshell, the court found New York’s residency requirement to be unconstitutional.  For a great summary of the opinion read Carolyn Elefant’s post and follow the link out to the full opinion. This decision comes down from the interesting 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.

What I most enjoyed about this opinion was the judge’s willingness to reconsider how we define accessibility in an age when almost all of us are connected online.  As long as the attorney is transparent about where he or she is actually located and working on the client’s legal matter, the question of the need for physical location within the jurisdiction should be based on the needs of the client, the case, and the surrounding circumstances.  As the opinion notes, it would have been more physically convenient for an attorney working in NJ to drive over to courthouse in NY City than it would be for an attorney in Buffalo to drive down. (page 18 of the opinion)

Even if it is appealed to the Second Circuit, the fact that this issue has been brought to the forefront and reconsidered as a requirement for members of the NY Bar may prompt other states to revisit the effectiveness of their existing residency requirements. As more virtual law offices spring up across the country, it will continue to be a question they will need to address.

The ABA Standing Committee on Ethics and Prof. Responsibility has published a new ethics opinion, Formal Opinion 11-459 “Duty to Protect the Confidentiality  of E-mail Communications with One’s Client”. I didn’t see this one coming, but I think it’s a move in the right direction.

The situation described in the opinion relates to when an attorney has reason to believe that his or her client  is sending the attorney or anyone else confidential information via email and the client’s employer has keystroke logging on their system or some other way of monitoring the employee’s activities where there is a risk that the employer  could access that confidential information.

However, the opinion is worded broadly and might expand to more than just email and to more than just these workplace situations. Check out the last paragraph of the opinion: More »

I wrote a couple weeks ago about South Carolina’s new Formal Ethics Opinion 11-05 regarding an attorney’s use of services, such as Groupon, to offer discounts and deals on their legal services.  North Carolina also has a proposed ethics opinion, 2011 Formal Ethics Opinion 10 entitled “Lawyer Advertising on Deal of the Day or Group Coupon Website.”

The proposed NC ethics opinion states:

[A] lawyer may advertise on a website that offers daily discounts to consumers where the website company’s compensation is a percentage of the amount paid to the lawyer if certain disclosures are made and certain conditions are satisfied.

The primary concern with this opinion and the one that was published in South Carolina is that it does not violate Rule 5.4(a) which prohibits sharing of legal fees with nonlawyers. In the case of the website providing the daily deals service to the lawyer for his or her practice, the fees are directly paid by the lawyer for the cost of advertising and does not include any fees paid by the lawyer’s clients obtained through the daily deals service.

Ensuring that this method does not equate to fee-splitting and that the method falls under the normal costs of advertising, the opinion goes on to caution that a few other rules and regulations related to lawyer advertising may arise depending on the website service used and how the attorney uses it to market their services.

To simplify the basic rules laid out in this opinion:

1) Don’t mislead your prospective clients (it has to actually be a discount from your regular fees offered);

2) Disclose the method and remind prospective clients not to act hastily in making decisions about their legal representation (um, isn’t that actually the marketing benefit of a coupon – to create immediacy and prompt the consumer to spend? anyway….) ;

3) Remind them that there may be some reason why you can’t go through with the discount because of conflict of interest, jurisdiction conflict, etc.;

4) Still follow trust accounting rules even if the funds go to the website service first as prepaid fees;

5) If you put a time limit on the discount and the client lets it expire, you can’t go back and charge your regular fee for the same service. You have to return any advance payment on the service or if the client agrees to the higher price, add that advance payment to the revised cost;

6) The legal work provided must still be competent. So if the services exceed what the discount included, you still have the obligation to provide full, competent services to complete the matter for them.

Both this proposed opinion and the one in South Carolina will be interesting to watch to see how attorneys implement them into their marketing strategies for their firms. It would seem like unbundled legal services at fixed fees would work best with these types of daily deal offers. Following best practices for delivering unbundled services, in terms of educating the client about the scope of services and signing a limited scope engagement agreement would protect both the attorney and the client in this situation.

UPDATE: It looks like the New York State Bar Association published an ethics opinion on daily deal sites in December 2011: NYSBA Committee on Professional Ethics Opinion 897 (12/13/11). (HT to NY Attorney Paul Jeff Perez.)