Ethics Forum: Questions and Answers on Professional Responsibility

Samuel C. Stretton.

It is critical that the independence of the legal profession remain.

I have been reading your columns and I note you always call law a profession. In reality, law is really a business now. Professionalism is secondary. Do you agree?

The question you raised is really one of the major issues facing the legal profession that’s never been directly addressed. In the last 20 years, there have been two major transformations of the legal profession. Obviously, the first is the informational revolution that has changed greatly the way law is practiced. It’s made it better in some ways, but it has eroded many of the personal aspects of the profession.

In the informational world, no one gets to meet anyone anymore. One doesn’t get to know the court clerks, the judge’s secretaries, the people in the courthouse, etc. Everything is electronic.  Communications are electronic. Over-communication occurs in abundance. Law becomes not a social business to help others, but more a mechanical business as to what’s the bottom line.

The second change is the fact that the business aspect of law now predominates. Law has always been a business, but the profession has always played the key role. This writer, as a young lawyer, talking to many of the older lawyers in the 1960s and 1970s, recalls that law was primarily a profession back then. It was much easier to make a living. Lawyers of the 19^th century didn’t have to worry about income tax. In the 20^th century, overhead was very low. One needed an office, a typewriter, a secretary and some law books. The telephone charge was usually $25 to $50 a month, at least when I started practicing. Therefore, although there were business considerations in those earlier years, law was predominantly a profession because hard work would easily make up the overhead.

That’s all changed now. Law has become a very expensive business. There is extreme competition for clients. There are tens of thousands more lawyers than there were 40 or 50 years ago. Since most people now communicate solely by electronics, the advertising and hiring of lawyers is by electronics. One’s activity in community groups, politics, etc. is relatively meaningless. Directed letters are sent and expensive advertising campaigns are waged. With the oversupply of lawyers, experienced lawyers’ legal fees are undercut by inexperienced lawyers when clients obviously don’t know the difference.

Yes, law has become a business and one could argue that the professionalism is now becoming secondary. Every lawyer who runs their practice, particularly small firm lawyers like me, know the agony of overhead and the worries when the money is not there to pay the secretaries or the rent, etc. Lawyers who always served in the public sector have no idea of the pressures of the business aspects of practicing law. Any private practice lawyer knows that only 50 percent of practicing law now is being a good lawyer. The other 50 percent is running a business and developing clients.

These are times of transition in the legal profession. The informational technology has changed many ways that law is practiced, and the predominance of the business concerns are also going to change the way law is practiced. The problem is that a good business practice and practicing law are not usually compatible. The incompatibility is seen by the ultimate purpose. Law is a profession where service is a critical factor. Helping a client and doing so in an ethical fashion is what lawyers are supposed to do. But, a business has a very different purpose. The purpose is to make money. That is the goal of an ongoing business. The business can have wonderful purposes and ideas, but if it doesn’t make money then the business is deemed a failure unless someone is very wealthy and making up the difference through their personal funds. Wealthy businesses do contribute greatly to charities and other matters, but most businesses aren’t wealthy and work very diligently toward the bottom line of making a profit.

Because of the incompatibility of business purposes versus legal profession purposes, that creates a problem. Now that business concerns have become utmost in the practice of law, the law has to adjust to those concerns. The question will be whether the adjustment will be to push the business aspect as the most important aspect of running a law practice or will professionalism still prevail.

The Rules of Professional Conduct clearly apparently come down on the side of a profession.  Lawyers are held to a much higher standard than any businessman. There can be no dishonesty; a lawyer’s word has to be their bond.  There can be no conflict of interest and there can be no undivided loyalties. Clients’ monies held by a lawyer can’t be touched. They are strictly regulated.

Perhaps a classic example of the differences can be seen as follows. A person’s father or mother has passed away and the family came to the lawyer to represent the estate. Here are some examples of the differences. Some lawyers, if they had written the Will for the person who’s passed away, will write themselves in as the executor or executrix. Some lawyers will even go further to say that their law firm should be hired as the attorney for the estate. That’s not in the client’s interest. That decision should be left open to the new executor or executrix.  From a professional standpoint, one shouldn’t do that. From a business standpoint, it’s a very good decision because then the lawyer will get the estate and perhaps the firm will also get hired with almost double the fees being charged to the estate.

Using the same example further, when the people come in, how does one charge? In Pennsylvania, there’s the Johnson Estate 5 percent with a sliding scale. But, many estates are very uncomplicated unless there’s going to be a lot of litigation. Most people who die have bank accounts, a pension, usually a house that is in joint names or was in joint names. And that estate will take all of about 20 or 30 hours to resolve with often times the paralegal doing the bulk of the work. A simple matter of collecting assets, listing the house for sale, opening an estate account, and then petitioning the court or using a family settlement agreement. But, because of the value of real estate, even row houses or townhouses, being worth six figures, usually many people have a fairly substantial amount of money in their estate. Five percent of several hundred thousand dollars is quite a bit of money when the matter could be handled maybe for 10, 20 or 30 hours of time at $200 to $400 an hour depending on the hourly rate. A lawyer who is a professional is going to give the client the option. It’s not difficult to figure what option the client will chose if presented. The lawyer who is a business is not going to give a client the option.

The same situation occurs if a very good personal injury or medical malpractice lawyer gets a major case and with a few calls can get policy limits offered. Should the lawyer take a third or 40 or 50 percent or should they just charge their hourly rate? Should they give the clients an option? The dilemma particularly arises in cases where there is no dispute as to liability.  Perhaps these examples oversimplify, but it does show the divergence between a lawyer who is a professional and a lawyer who is primarily a businessperson.

In a profession, it is the client’s interests that are predominant and the interest of the legal system. In a business approach, it is the lawyer’s economic and business interests that are predominant.

The Rules of Professional Conduct, although emphasizing the professional nature of law, cannot always deal with these nuances. Further, the Rules of Professional Conduct are becoming more complicated and more burdensome as years go by. Older lawyers can remember before there was a requirement to have a fee letter under Rule 1.5(b). Many lawyers can remember there used to be no specific requirements of how one maintained client ledgers and accounts as long as there was an escrow account and an operating account. Now, one must have almost a bookkeeper or a part-time bookkeeper to handle the ledger sheets and everything else, which can result in severe discipline if not maintained. Sometimes the overregulation pushes the business away from a profession to the business side because of the cost and expenses.

Where does this leave the legal profession which is on the cusp of these dramatic changes?  What direction is it going to go in the future? This is even more important because the older lawyers who knew the practice of law solely as a profession are solely retiring or dying off. The younger lawyers who are more exposed to the business aspect of it because of modern necessities may not have the opportunity to fully appreciate the professionalism required and necessary for the legal profession to survive.

Also, throw into this mix the concept of independence. The legal professional is independent since it’s not regulated by the executive or legislative branches. It is regulated only by the Pennsylvania Supreme Court. The Office of Disciplinary Counsel and the Disciplinary Board are created offices for the Supreme Court to regulate its authority. But, the self-regulation provides the independence of the legal profession. The annual fees are used for the Disciplinary Board and for the Client Security Funds. All of this is not taxpayer’s money. It is monies paid for by the lawyers themselves.

But, if it’s a business primarily and not a profession primarily, then the concept of independence is going to erode. Once the independence of the legal profession is weakened and the independence of the judiciary is weakened, there is no longer a significant role for the legal profession to pay in modern society. It is absolutely critical that the independence of the legal profession remain and that can only be done if it is still primarily a profession and business aspects are secondary.

The law profession over the next 20 years is going to have to meet these challenges. The professional is going to have to meet these challenges through the Pennsylvania Supreme Court and the bar associations. Changes will come through lawyers who are actively practicing in both large firms and small firms and as sole practitioners. This is what happened at the end of the 19^th century when lawyers like John Johnson and others made the transition from solo firms to large and mid-size firms and, to some extent, specialization. The 21^st century now has additional pressures. How these are handled will determine the fate of the legal profession and the role that the lawyers are going to continue or not continue to play in modern society.

But, these issues have to be addressed now by both the organized bar and by individual firms. The major issue of profession versus business will define the legal profession for the next 80 or 90 years. It will also define whether the independence of the profession will remain and the great historical role the legal profession will continue.

Lawyers should comply with an honor system if they want to maintain the profession’s integrity.

I noticed on my website that if someone types in my name on the website, another lawyer’s name pops up who is unrelated to my law firm. Is this ethical?

This practice could be considered unethical because it involves misrepresentation or deceit. Rule 8.4(c) of the Rules of Professional Conduct precludes fraud, misrepresentation, deceit and dishonesty.

Apparently, it’s not uncommon for lawyers to attempt to infringe on a successful website of a lawyer who has a good clientele. Although this writer has no idea how it’s done, apparently one can work their name into the website to such an effect that if someone goes on or seeks the website of a particular lawyer, the other lawyer’s name will appear.

This problem has occurred on a number of occasions, particularly with criminal lawyers and presumably also with personal injury lawyers. For lawyers representing criminal defendants and advertising heavily by their website for a particular area of law, it’s not uncommon that other lawyers somehow hook into a successful website so their name appears first.

Obviously, if that is done intentionally by a lawyer through some software program, that would be wrong and unethical. It is one thing to have competitive advantage, it’s another to do something that’s deceitful or that interferes or undermines an advertisement set up by someone else. Obviously, in many areas of law, particularly criminal, it’s extremely competitive now in terms of getting private business. But, as the first article notes, lawyers should still be professionals. Professionals don’t do that to each other.

The same concept is when someone else’s client comes to one’s office. A professional will attempt to reconcile that client with the prior lawyer unless the prior lawyer is not doing their job.

Therefore, the bottom line is that this type of electronic interference or electronic intrusion into another lawyer’s website resulting in someone else’s name appearing as the lawyer when someone is seeking representation through an established website, is wrong and shouldn’t be done. Whether this would result in discipline remains to be seen. But, the legal profession is a self-policing profession. The independence of the profession requires an inherent honor system so to speak. Lawyers have to all comply with that honor system if they want to maintain the profession’s independence and sense of honesty and integrity.