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Legally Speaking

 

Issue: June, 2006
Author: John M. Burman

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Ethically Speaking - Supreme Court Adopts Changes to the Wyoming Rules of Professional Conduct

On April 11, 2006, Chief Justice William U. Hill signed the Order Adopting Revised Rules of Professional Conduct for Attorneys at Law. The revisions represent the first comprehensive changes to the Wyoming Rules in twenty years. They are the culmination of a process that began over three years ago when the court appointed the Select Committee to Review the Rules of Professional Conduct (“the Committee”). The Committee was charged with examining the ABA Model Rules of Professional Conduct, the Wyoming Rules of Professional Conduct for Attorneys at Law, and other related matters, to evaluate whether it would be appropriate to recommend changes in the Wyoming Rules. The Committee issued its final report to the State Bar Officers and Commissioners (“the Commissioners”) in March of 2005. The Commissioners adopted the Committee’s recommendations and directed that the proposed changes be put out to the members of the Bar for comment. Comments were due on or before July 1, 2005. After considering the comments, the Commissioners recommended some changes, which were also put out for comment. The Commissioners then made a recommendation to the Supreme Court in October of last year. After considering the recommendations, the Court issued its order adopting the recommendation in April of this year.

The Order adopting the revisions specifies that they become effective on July 1, 2006. The Order further says that the revised rules “shall be published in the advance sheets of the Pacific Reporter, the Wyoming Reporter, and in the Wyoming Court Rules . . . .” As the revisions are extensive, this column presents an overview of them. Subsequent articles will discuss changes in more detail.


Summary of Changes

The revised Wyoming Rules contain many important changes, which are discussed, in general terms, below. Describing all the changes will take a series of columns, and the following is intended to give lawyers a general sense of the changes and the references will direct them to those provisions of the revised rules that may require further reference. The references are to the rules as revised, which means that some of the numbers are different than in the current rules.


Preamble

The Preamble contains numerous changes. Only one of them represents a significant departure from the current language. Paragraph [3] recognizes that a lawyer may “serve as a third-party neutral [which encompasses a mediator or arbitrator],” which is a “”nonrepresentational role” that is very different from the representational roles discussed in paragraph [2]. Rule 2.4, discussed below, establishes ethical standards for lawyers functioning as third-party neutrals.


Rule 1.0. - Terminology

Several definitions have been added or amended. The most important deletion is “consult.” Three new definitions, “confirmed in writing,” “confidential information,” and “informed decision” are worthy of particular note.

Rule 1.6(a) says that “a lawyer shall not reveal confidential information relating to the representation of a client.” The important change is the addition of the word “confidential” to that rule. The terms “confidential information” is, in turn, a defined term, which is critical to an understanding of the revised rule. “Confidential information” means “information provided by the client or relating to the client which is not otherwise available to the public.” As discussed below, this is an important change to Wyoming’s rule on confidentiality. When it comes to the definition of “confidential information,” the key for lawyers is to know into which category information fits. Is it confidential or not?

The nature of the representation will go far to determining whether information is “confidential.” If, for example, an attorney enters an appearance before a tribunal on behalf of a client, that information is generally available to the public as most court files are open to the public. The common exceptions are juvenile cases, commitment proceedings, and paternity actions. Accordingly, if an attorney enters an appearance in a public matter, the identity of the client will not be confidential as it is “otherwise available to the public.” The same will be true of the contents of pleadings filed in a public matter.

By contrast, many representations do not involve the lawyer entering an appearance, e.g., estate planning, commercial transactions, etc. In such matters, the client’s identity is likely “not otherwise available to the public.” A client’s identity, therefore, is confidential.

Under the revised rules, many more client decisions must be in writing, including, for example, decisions to waive conflicts of interest. Accordingly, the term “confirmed in writing” is now defined. It means either a “writing by the person or a writing that a lawyer promptly transmits to the person confirming the oral informed decision.” Lawyers need to be careful to distinguish between decisions that must be “confirmed in writing,” such as the waiver of a conflict for current or former government employees, from those which require that the decision be confirmed in writing “signed by the client,” such as the waiver of a concurrent conflict of interest or a conflict involving a former client. Having a decision “confirmed in writing” when the rules require a decision in writing “signed by a client” will simply not suffice.

The term “informed decision” is defined as a “decision by a person to a proposed course of conduct after the lawyer has communicated adequate information and explanation about the material risks of and reasonably available alternatives to the proposed course of conduct.” The term is used throughout the rules to emphasize a lawyer’s duty to explain matters to clients, and clients’ right to make decisions based on adequate information provided by their lawyers.

Finally, the commentary section to Rule 1.0, the terminology rule, is all new. Significant parts of it previously existed in other places in the Wyoming Rules (Comment [2], for example, was largely taken from former Comment [1] to Rule 1.10). Adding commentary to the rule should help explain and illustrate the terminology.


Rule 1.4 - Communication

Rule 1.4(a) has been substantially reorganized. The reorganization clarifies a lawyer’s obligations to (1) have the client make informed decisions about certain matters; (2) consult with the lawyer about the means to be used to attempt to achieve the client’s objectives; (3) keep the client informed about a matter; (4) comply with a client’s requests for information; and (5) consult with the client about relevant limitations on the lawyer’s behavior. The first four concepts were implicit in former Rule 1.4(a). The fifth was formerly codified in Rule 1.2(e).


Rule 1.5 - Fees

The rule of reasonableness now applies expressly to costs, as well as to fees. The change is consistent with a Formal Ethics opinion issued by the ABA’s Standing Committee on Ethics and Professional Responsibility regarding old Rule 1.5.


Rule 1.6 - Confidentiality of Information

As noted earlier when discussing the new definition of “confidential information,” the rule on confidentiality contains a significant change. The change is to make a lawyer’s duty of confidentiality apply to “confidential information,” rather than all information “relating to the representation.” The definition of “confidential information” defines the scope of the duty. When read in light of that definition, revised Rule 1.6 says that a lawyer may not disclose information that is “not otherwise available to the public.”

The revised rule also contains new subparagraphs (b)(2) and (b)(4). Subparagraph (b)(2) permits a lawyer to reveal information “to secure legal advice about the lawyer’s compliance with these Rules.” (Although not stated in the former rules, that was probably implicit.) Subparagraph (b)(4) allows the disclosure of information to “comply with other law or a court order.” That paragraph should be read in conjunction with Comment [17], which explains a lawyer’s obligation to report child abuse and abuse of a vulnerable adult pursuant to Wyoming Statutes §§ 14-3-205 and 35-20-103.

Comments [23] & [24] are new and clarify a lawyer’s ethical obligation to “act competently to safeguard confidential information.”

The ABA recommended the addition of two more paragraphs that allowed the disclosure of otherwise confidential information to protect the financial interests of third parties under certain circumstances (some of the so-called “Enron rules”). As Wyoming Rule 1.6(b)(1) was retained and allows the disclosure of confidential information to prevent a client from committing a “criminal act,” there was no need to adopt the ABA’s recommendations. That provision has been in effect for twenty years, and it appears to have worked well.


Rule 1.7 - Conflict of Interest: Current Clients

The conflict of interest rules (1.7 through 1.12) have been reorganized to clarify their applicability and lawyers’ obligations. Although Rule 1.7 is significantly reorganized, it generally retains the standards of the current rule. The most important change is the requirement in 1.7(b)(4) that a client’s waiver of a conflict be the result of “an informed decision to waive the conflict, in writing signed by the client.” Requiring written waivers should protect both clients and lawyers.


Rule 1.8 - Conflict of Interests: current clients: specific prohibited transactions

While this rule remains generally the same, paragraphs (j) and (k) deserve mention. The former rules did not contain a per se prohibition on a lawyer having a sexual relationship with a client. The new rule contains such a prohibition, “unless a consensual sexual relationship existed between them when the client-lawyer relationship commenced or unless the lawyer and client are married.” The rule then goes further. A lawyer may not have a sexual relationship “with the spouse of a current client.” The prohibition brings the legal profession into line with virtually every other profession, such as the medical profession, that prohibits such relationships.

Paragraph (k) imputes all disqualifications under Rule 1.8 to the lawyer’s firm, except the personal disqualification that results from a lawyer having a sexual relationship with a client or the spouse of a client.


Rule 1.9 - Duties to former clients

Both paragraphs 1.9(a) and 1.9(b)(2) adopt the requirement that a decision to waive a conflict involving a former client be the result of “an informed decision . . . confirmed in writing signed by the client.” Since the writing must be “signed by the client,” it will not be adequate for a lawyer to confirm the client’s oral decision in a writing to the client.


Rule 1.10 - Imputed conflicts of interest: general rule

The principle of imputing the disqualifications of one lawyer to all the lawyers in that lawyer’s firm remains the same. The important addition to (a) is to clarify that disqualifications “based on a personal interest” of the disqualified lawyer, such as strong political or philosophical beliefs about a client or a case, are not imputed to the firm. The reasons for not imputing certain personal conflicts of interest are explained in Comment [3]. Also, Comment [4] notes that the rule of imputed disqualification “does not prohibit representation by others in the law firm where the person prohibited from involvement in a matter is a nonlawyer, such as a paralegal or legal secretary.”


Rule 1.12 - Former judge arbitrator, mediator or other third-party neutral

The important change to this rule is to add mediators and other third-party neutrals, and thereby generally prohibit them from representing a client who was involved in the mediation. The rationale is that a mediator or other third-party neutral has had access to information which he or she would not have had but for the mediation. Such access to information disqualifies future representation.


Rule 1.13 - Organization as client

The rule remains as is. The reason for mentioning it is that the ABA recommended substantial changes. Those changes, largely a product of fall-out from the Enron case, allow lawyers to disclose information in certain circumstances. Wyoming’s Rule 1.6(b)(1), which permits the disclosure of confidential information to prevent a client from committing a criminal act, adequately addresses the issue.


Rule 1.14 - Client with diminished capacity

This rule is substantially revised. Paragraph (b) clarifies when a lawyer may take “protective action” on behalf of a client with diminished capacity to make informed decisions, and gives two examples of the kinds of action a lawyer might take. First, the lawyer may consult “with individuals or entities that have the ability to take action to protect the client . . .” As new Comment [3] explains, this may include family members. Second, a lawyer may, in appropriate circumstances, seek “the appointment of a guardian ad litem, conservator or guardian.”

Paragraph (c) is new. It acknowledges that taking protective action will likely result in the disclosure of confidential information, which the lawyer is generally not permitted to do because of Rule 1.6(a). The new paragraph authorizes such disclosure, noting that such disclosure falls under Rule 1.6(a), which allows disclosure when a lawyer is “impliedly authorized” to disclose information to carry out the representation. Disclosing information to take protective action is, thus, impliedly authorized.

Paragraph (d), which was (c), remains the same. That is, “[a] lawyer appointed to act as a guardian ad litem represents the best interests of that individual, and shall act in the individual’s best interests even if doing so is contrary to the individual’s wishes.”


Rule 1.15 - Safekeeping property

Rule 1.15 was broken into two rules, 1.15 and 1.15A to address recurring enforcement issues. New language was added to (b): [A trust] account must be in the name of the lawyer or the law firm and be clearly labeled or designated as a ‘trust account.’” Paragraph (d) was also inserted: “A lawyer shall deposit into a client trust account legal fees and expenses that have been paid in advance. The lawyer may withdraw those funds only as fees are earned or expenses incurred.” The changes should help lawyers understand what is required of them and eliminate ambiguities.


Rule 1.71 - Sale of law practice

For the first time, Wyoming has a rule on selling law practices. Not having a rule did not stop sales from occurring. Now, there is a rule to regulate such sales. The general idea behind the rules is that while sales are taking place, clients deserve protection. Hence, the heart of the rule is that notice must be given to clients to let them make a choice of how to proceed.


Rule 1.18 - Duties to prospective clients

This is a new rule. Under the former rules, most duties arise only after the formation of a lawyer-client relationship, but as paragraph [16] of the Scope notes, “there are some duties, such as that of confidentiality under Rule 1.6, that attach when the lawyer agrees to consider whether a client-lawyer relationship shall be established. See Rule 1.18. .” The ABA has also issued a Formal Ethics Opinion which says that a lawyer owes a duty of confidentiality to prospective clients who never become clients. Rule 1.18 clarifies the extent of the duty of confidentiality owed to prospective clients and establishes conflict of interest standards.

The key to defining a lawyer’s duties to a prospective client is in Comment [1]: “[P]rospective clients should receive some but not all of the protection afforded clients.” Accordingly, after defining “prospective client” in paragraph (a) of the Rule, paragraph (b) defines a lawyer’s duty of confidentiality, paragraph (c) explains when a conflict of interest may exist even though a lawyer never represented a prospective client, and paragraph (d) permits representation notwithstanding a conflict of interest.

Generally, the information received from a prospective client must be treated in the same manner as information received from a client, and it may be disclosed only as information about a former client (pursuant to Rule 1.9).

Paragraph (c) disqualifies a lawyer, and lawyers in association with that lawyer, from representing a client with interests that are adverse to the former prospective client’s in certain circumstances. Most importantly, the lawyer is not disqualified unless he or she received information that could be “significantly harmful” to the former prospective client. The “significantly harmful” standard is very different from the standard that applies to former clients. Accordingly, while there are circumstances under which a lawyer may be disqualified from representing a client because of having met with a former prospective client, those circumstances are significantly more limited than those under which a lawyer will be disqualified because of having represented a former client. The rule appears to protect former prospective clients when appropriate, while leaving lawyers more free to represent adverse parties.


Rule 2.4 - Lawyer serving as arbitrator, mediator, or third-party neutral

This rule is new. It both acknowledges that lawyers may play a non-representational role, and establishes standards when they do. Paragraph (a) defines a third-party neutral, and paragraph (b) requires a lawyer acting in such a role to make certain that the other persons involved understand the lawyer’s role, and that the lawyer does not represent either of the parties. Rule 1.12 now limits the subsequent representational activities of a third-party neutral.


Rule 3.6 - Trial publicity

Several years ago the United States Supreme Court considered the constitutionality of Nevada’s rule on trial publicity, which was identical to Wyoming’s former Rule 3.6. The Court held that the rule was unconstitutional as applied, but upheld the substantive standard of the rule. After the decision, the ABA adopted changes to its Model Rules and recommended that states follow suit. Wyoming’s new Rule 3.6 incorporates those changes.

The biggest change is to paragraph (a). The former rule applied to all lawyers, regardless of whether they had been involved in a case. The change restricts the rule’s applicability to a lawyer “who is participating or has participated in the investigation or litigation of a matter.” Paragraph (b) creates a new “safe harbor” by specifying those things about which a lawyer may comment. Paragraph (d) allows a lawyer to make a statement “to protect a client from the substantial undue prejudicial effect of recent publicity.”


Rule 3.8 - Special responsibilities of a prosecutor

The only significant change to this rule is a revision to paragraph (e). The change should provide clarification of a prosecutor’s duties regarding trial publicity. In particular, the paragraph imposes on prosecutors a duty to “exercise reasonable care” to prevent “investigators, law enforcement personnel, employees or other persons assisting or associated with the prosecutor” from making statements that might violate Rule 3.6.


Rule 4.2 - Communication with person represented by counsel

The rule remains largely unchanged. The significant additions are in the comments. Comments [4] through [9] are all new. Comment [5] addresses communications “authorized by law.” Such communications may include constitutional or other legal rights to contact the government (the First Amendment includes the right to petition the government for redress of grievances, and courts have consistently held that the right may be exercised through an attorney).

Permissible communications may also include investigative activities, during which an attorney or someone acting on behalf of an attorney, such as an investigator, may have contact with a person who has an attorney. Many courts, including the Tenth Circuit, have allowed such contacts, finding that to hold otherwise would unfairly hamper law-enforcement activities. Such opinions, and this Comment, have been very controversial.

Comment [7] addresses communications with an organization that is represented by counsel. The Comment reflects the holding of the Wyoming Supreme Court in Strawser v. Exon, both regarding current and former employees of the organization.


Rule 4.3 - Dealing with unrepresented persons

Language was moved from the commentary to the former rule to the rule itself, expressly limiting the advice a lawyer may give an unrepresented person. The rule now clarifies that the only advice a lawyer may give to an unrepresented person is the advice to get an attorney.


Rule 4.4 - Respect for rights of third persons

A new paragraph (b) was added (former (b) became (c)). That paragraph addresses a lawyer’s responsibilities when he or she receives a document that the lawyer knows, or “reasonably should know . . . was inadvertently sent . . .” to the lawyer. The former Wyoming Rules did not address the issue. Several years ago, however, the ABA issued a Formal Ethics Opinion, saying that in such circumstances a lawyer should promptly notify the sender of the document. The new language adopts that standard.

New (c), formerly (b), was retained, despite its omission from the ABA’s Model Rules. That paragraph prohibits a lawyer form using the threat of criminal charges “solely to obtain an advantage in a civil matter.”


Rule 5.5 - Unauthorized practice of law

This rule is substantially revised. Paragraph (b) clarifies when a lawyer who is not admitted in Wyoming may practice in this jurisdiction. Paragraphs (c) and (d) are new. Paragraph (c) says that a non-Wyoming lawyer may provide temporary legal services in Wyoming “in a pending proceeding before a tribunal in this jurisdiction, if the lawyer, is authorized by law or order to appear in such proceeding with a lawyer who is admitted to practice in this jurisdiction and who actively participates in the matter.”

This paragraph represents a significant narrowing of the ABA’s recommendations regarding multi-jurisdictional practice. The ABA’s proposals encourage multi-jurisdictional practice by allowing lawyers to provide temporary services in a wide variety of situations. The changes adopted instead represent temporary practice that has long been permitted. That is, when a matter is pending in a Wyoming court, a non-Wyoming lawyer may apply for admission pro hac vice.

Paragraph (d) addresses two other situations when a lawyer not admitted in Wyoming may furnish legal services. First, subparagraph (d)(1) allows a non-Wyoming lawyer to furnish services to an organizational employer, e.g., the lawyer is acting as an in-house counsel for a corporation. Subparagraph (d)(2) allows a non-Wyoming lawyer to practice as authorized by federal or tribal law, such as a patent attorney or a tribal advocate on the Wind River Reservation. Once again, the paragraph is consistent with existing practice and law.


Rule 5.7 - Responsibilities regarding law-related services

This rule is new. It protects clients when a lawyer is involved in providing law-related services (Comment [9] gives examples of such services, including financial planning, lobbying, tax preparation, and environmental consulting.) The concern is that a client generally will not know that the law-related services are not legal services and that he or she is not, therefore, entitled to all the protections of the lawyer-client relationship, such as confidentiality, avoiding conflicts of interest, etc. Unless the lawyer furnishing the law-related services makes it clear that he or she is not acting as a lawyer, (a) makes the lawyer “subject to the Rules of Professional Conduct.”

Comment [7] makes it clear that the burden will be on the lawyer to show that the lawyer “has taken reasonable measures . . . to communicate” to the client that the lawyer is not acting as a lawyer, and that the client is not entitled to the protections of the lawyer-client relationship.


Rule 6.1 - Pro Bono Publico Service

The rule is not changed but significant revisions were made to the comments. The revisions are largely the comments recommended by the ABA, which more accurately explain the rule.


Information About Legal Services

Part 7 of the Wyoming Rules addresses communications with clients and the public, in general, and lawyer advertising and solicitation, in particular. The rules in this part are significantly changed. The changes reflect a generally restrictive approach to lawyer advertising, while taking heed of the decisions of the United States Supreme Court which permit certain types of advertising. Also, the public should be better served by allowing lawyers to advertise the areas of law in which they practice, and that in some circumstances, lawyers should be allowed to say that they have been certified as specialists.


Rule 7.1 - Communications concerning a lawyer’s services

This rule applies to all communications with the public or with clients. The general prohibition on false or misleading communications remains in place (the United States Supreme Court has held that states may not constitutionally prohibit advertisements which are not false or misleading).


Rule 7.2 - Advertising

While retaining a generally restrictive approach to lawyer advertising, the rule has been changed to eliminate provisions that appeared to be more matters of taste or judgment than ethics (For example, former paragraph (f) required advertisements to be “articulated by a voice, with no background sound or other instrumental music”). So long as the advertisements are not false or misleading, lawyers have a Constitutional right to make them, regardless of how tacky or tasteless they may be.

Paragraph (g) retains the requirement that advertisements contain a disclaimer, except as permitted by new Rule 7.4, which regulates advertizing of specialities.

Former paragraphs (h), (I) and (j) were either substantially simplified or eliminated. The changes eliminate what were probably unenforceable restrictions, such as the restrictions in former (I) on illustrations. The Bar had never attempted to enforce the former restrictions, and they were likely not enforceable.


Rule 7.3 - Direct contact with prospective clients

The general prohibition on direct in-person solicitation has been retained (the United States Supreme Court has expressly allowed states to prohibit in-person solicitation of clients.) The probation has been expressly extended to include real-time computer contact. Paragraph (c) retains the prohibition on direct mail solicitation for thirty days after an occurrence has given rise to a need for legal services (the United States Supreme Court has upheld a state’s ban on plaintiffs’ lawyers contacting victims within thirty days of their accidents). After that time, only written contact is permissible.

The revisions to the rule do not allow any contact which was previously prohibited. Rather, the changes clarify the previous rule. Most of the recommended changes to the Comments are based on the ABA’s model comments.


Rule 7.4 - Communication of Fields of Practice

This is a new rule. Former Wyoming Rule 7.4 has become Rule 7.5.

Paragraph (a) allows a lawyer to communicate “the fact that the lawyer does or does not practice in particular fields of law.” The disclaimer required by Rule 7.2(g) will, of course, still be required.

Paragraphs (b) and (c) reflect the tradition that patent and admiralty lawyers may advertise their unique credentials.

Paragraph (d) allows Wyoming lawyers, for the first time, to advertise that they are “certified” in a particular area of law, but only if the certifying body has been approved by the Wyoming State Bar and the name of that body appears in the communication. If certifications mean something, such as certification as a civil or criminal trial specialist by the National Board of Trial Advocacy, lawyers have a constitutional right to communicate that fact. Others are meaningless, requiring only the payment of money to become a member. The former information should be communicated to the public, while the latter should not. The ultimate safeguard is the State Bar. No approval mechanism currently exists and one will have to be created. After it is, its task will be to approve only reputable organizations. This rule, in short, is designed to allow lawyers to say what they are constitutionally permitted to say–that they are certified by a reputable organization.


Rule 8.4 - Misconduct

Paragraph (g) was retained. That paragraph makes it misconduct to “knowingly employ or continue to employ or contract with any person in the practice of law who has been disbarred or is under suspension from the practice of law by any jurisdiction, or is on disability inactive status by any jurisdiction.”


Rule 8.5 - Disciplinary authority: choice of law

This rule is substantially revised and expanded. Former Wyoming Rule 8.5 did not address the choice of law issue that arises whenever a lawyer is a member of the bar in more than one jurisdiction. The new rule is based on ABA Model Rule 8.5. The ABA’s Model Rule was adopted several years ago, and is now in effect in many states.


Conclusion

Just over a year ago, revisions to the rules were proposed and comments were solicited from Wyoming lawyers. The Commissioners subsequently recommended changes, which the Court adopted. Perhaps most significant among those changes is retaining paragraph (g) of Rule 8.4, which makes it misconduct to employ a disbarred or suspended lawyer. One of the more important changes that resulted from the comment period, in other words, was no change. The rule remains as it was.

Please be aware that the new rules go into effect on July 1st, and watch for publication of them in the Pacific Reporter and in subsequent editions of the Wyoming Court Rules. Given the number of revisions, it is hard to say which are most important. Lawyers who advertise should, however, pay careful attention to the changes in Rules 7.1 through 7.5.

As time and space permit, this column will address the changes in the Rules in more detail.




     

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