Ch-Ch-Ch-Ch-Changes!*

On November 1, 2018 new Rules of Professional Conduct went into effect. These new rules were the result of years of drafting and review, comments and revision and represent the first major overhaul of the rules governing attorneys in California since 1989.

Many of the revisions reflect a new numbering system for the rules, which was the direct result of wanting to bring our rules in alignment with the ABA Rules (and the rules of almost every other state), making it easier for out-of-state lawyers to determine their obligations when practicing law in California.  For those of us who have practiced law for our entire careers under the old rules, the State Bar has created a helpful chart that lays out the old rule and identifies the corresponding new rule. The chart can be found here.

This chart also provides a very easy way to see where the Commission declined to adopt one of the ABA Rules or has adopted a brand new rule that had no corresponding rule under our old rules.  For example, despite numerous comments from estate planning attorneys, the State Bar declined to adopt a version of ABA Rule 1.14, which provides guidance on dealing with clients with diminished mental capacity.  The State Bar did not provide an explanation for this decision.

In addition, the State Bar lists the following new rules that had no corresponding rule under the old system:

Rule 1.2 Scope of Representation and Allocation of Authority
Rule 1.8.2 Use of Current Client’s Information
Rule 1.8.11 Imputation of Prohibitions Under Rules 1.8.1 to 1.8.9
Rule 1.10 Imputation of Conflicts of Interest: General Rule
Rule 1.11 Special Conflicts of Interest for Former and Current Government Officials and Employees
Rule 1.12 Former Judge, Arbitrator, Mediator or Other Third-Party Neutral
Rule 1.18 Duties to Prospective Client
Rule 2.1 Advisor
Rule 2.4 Lawyer as Third-Party Neutral
Rule 3.2 Delay of Litigation
Rule 3.9 Advocate in Non-adjudicative Proceedings
Rule 4.1 Truthfulness in Statements to Others
Rule 4.3 Communicating with an Unrepresented Person
Rule 4.4 Duties Concerning Inadvertently Transmitted Writings
Rule 5.3 Responsibilities of a Subordinate Lawyer
Rule 6.3 Membership in Legal Services Organizations

For those who are interested, the State Bar also provides a summary of the history of these current rules at http://www.calbar.ca.gov/Attorneys/Conduct-Discipline/Rules/Rules-of-Professional-Conduct/Proposed-Rules-of-Professional-Conduct. This link is a great resource for understanding each of the new rules, how it was developed, what the Commission considered and whether it made changes in response to comments. It includes a separate link to each one of the new rules, so if you have questions about a particular rule, it is a great place to start.

California likes to be just a bit different and the new rules are no exception. The Commission did not simply adopt the ABA Rules wholesale. In addition to declining to adopt all rules, in some instances it specifically decided to retain some California requirements that differed from the ABA Rules so as to preserve the body of California law on that point. Making sure you know what is a new rule, what is an old rule, and what looks new but retains case law from the old is a complicated process. Therefore, in this issue, our authors have focused on specific areas of change to help you understand the new landscape governing the Rules of Professional Conduct.

The new rules represent changes to many areas of law, particularly relating to conflicts of interest. Theodore Brown has delved into the changes affecting conflicts relating to existing and former clients, including a discussion on the repercussions of the recent opinion of the California Supreme Court in Sheppard Mullin Richter & Hampton LLP v J-M Manufacturing Co Inc., (2018) 6 Cal.5th 59, 237. That case looks at a myriad of issues including the identification of a current client versus a former client, a required disclosure of a known conflict and the consequences of failing to get informed consent to a conflict (spoiler alert–that can be a very expensive mistake!).

While Mr. Brown’s article focuses mostly on the rules relating to conflicts with clients (either current or former), Mary Grace Guzman’s article expands that discussion to the duties that attorneys owe to potential clients, which are  duties now covered under Rule 1.18 (a rule that did not have a counterpart under the old rules).  The new rules clearly describe our duties to this group of clients, not only by making them clear, but also by adding to them.  More specifically, a discovery of privileged information in a potential client interview can be the basis for removing you from a case later on.  Ms. Guzman’s article looks at the language of the new rule, the important decision in SkyBell Technologies, Inc. v. Ring Inc., No. 18-cv- 00014 (C.D. Cal Sept. 18, 2018), and discusses some of the ways in which you can prevent that result.

Everyone charges fees and everyone collects fees, so everyone needs to know the changes in the rules relating to fees– how do we charge our clients and how do we hold our funds? The rules in this area have changed and violating these rules can land you in a lot of trouble, so make sure to read Lorraine Walsh’s article discussing these changes as they appear in Rules 1.5, 1.5.1 and 1.15.

Natasha Chee and Jeffrey Thayer explore one of the more talked about new rules, Rule 1.8.10, which represents a big change in the law governing sexual relations with a client. Interestingly, they note that there was very little enforcement under the old rule, but the Commission believed that the reason for that was not that there were no violations, but that they were very hard to prove under the old standard, so rather than engaging in a fact-heavy analysis of consent or negligence, the new rule creates a bright line with very few exceptions – no sexual relations with clients. There are a few notable exceptions to that rule (married couples, for example) but given the big changes in liability here, this is an important area to understand.

You won’t find all of the big changes in the Rules of Professional Conduct. As of January 1, 2019 we also have some new Local Rules of Court. Matthew Kitson alerts us to one of the big new changes. As most of you are aware, we have not had court reporters in most of the courtrooms for a while now due to budget issues. In July, 2018 the California Supreme Court handed down its decision in Jameson v. Desta (2018) 5 Cal.5th 594, which guaranteed access to verbatim records of proceedings for litigants who qualify for fee waivers upon request. The holding in this case created the need for new court rules addressing the availability of verbatim records and the Contra Costa County Superior Court’s new rules on this became effective on January 1, 2019. Anyone who represents indigent clients will want to know about this new rule!

Finally, there are big changes in the world of mediation – you don’t see that sentence often! This is not the result of the Rules of Professional Conduct, but the legislative answer to the Cassel case, which was decided in 2011 and which upheld mediation confidentiality even between an attorney and his/her client and had the effect of denying the client’s ability to use the attorney’s actions in mediation as evidence in an action for malpractice. Cassel v. Superior Court (2011) 51 Cal. 4th 113. In its decision, the Supreme Court found that the Evidence Code granted broad protections and changes to those protections, if any, should come from the legislature and not the Supreme Court. Well, here is that change. The newly adopted California Evidence Code §1129 became effective on January 1, 2019 and it affects every single attorney who represents a client in mediation, so please take time to read Robert Jacobs’ insightful article on the changes and on your new obligations to your client!

It’s a new year and we have a lot of new rules to keep track of. I hope you find this issue of the Contra Costa Lawyer helpful in doing just that.