Legal ethics attorney Jim Doppke returns for an encore appearance in Episode 23. Jim discusses the impact that legal tech and legal innovation have on the Rules of Professional Conduct and other rules that govern how lawyers practice law.
Jim explains how Model Rules of Professional Conduct 1.1 (Lawyer’s Duty of Competence) and 5.3 (Responsibilities Regarding Nonlawyer Assistance) are implicated by advances in legal technology and legal innovation. A comment to Rule 1.1 (and adopted by most states) says that as part of a lawyer’s duty of competence, lawyers must stay abreast of changes in technology.
Rule 5.3 states that lawyers must actively supervise “non-lawyer” assistance they engage to help out on legal matters. Historically, this meant that lawyers needed to supervise others lending them a hand–like a paralegal. However, Jim points out that the rule specifically relates to “assistance” and not just “assistants”.
This is significant, because certain legal tech, like artificial intelligence (AI), is really non-lawyer “assistance.” So, as Jim points out, if lawyers are going to use AI, they must supervise the training of the algorithms to ensure accuracy, just like they are obligated to supervise the work of their paralegals and other assistants to make sure their work is accurate.
In a similar vein, Jim points out that as the use of ALSPs (alternative legal service providers) increases, there too is another situation in which lawyers must supervise work done by those who may not be attorneys.
Legal Tech Founder Segment: Jeffrey Eschbach of Page Vault
Things we talk about in this episode:
Editing and Production: Grant Blackstock
Theme Music: Home Base (Instrumental Version) by TA2MI
Chad: I’m Chad Main, and this is the Technically Legal podcast. A podcast about the intersection of technology and innovation in the practice of law. Jim is an ethics attorney, and on this episode he and I talk about the impact of technology and innovation on the rules that govern how lawyers operate. In our Legal Tech Founders segment, we talk to Jeffrey Eschbach. He’s the CEO of Page Vault, an app that lets lawyers easily capture web content and social media posts for use in legal matters.
Jim Doppke was my very first guest on the very first episode of this podcast, so this is kind of an encore performance. He practices with the law firm of Robinson, Stewart, Montgomery & Doppke here in Chicago. The firm’s sole focus is on legal ethics. They counsel attorneys on ethical issues and also represent them when they get into trouble for running afoul of the rules of professional conduct that govern how lawyers do their work. These rules of professional conduct are the very reason I wanted to get Jim back on the podcast. As tech and innovation changes the way lawyers work, the rules of professional conduct themselves are also changing in response to tech and innovation.
I think lawyers are generally aware that the ethics rules are changing, but this episode, I wanted to focus on what these changes really mean in practice with real-world examples that lawyers might face in their day-to-day work, but before we talked about that, we got a little sidetracked.
College Radio DJ
Chad: You were a radio disc jockey in college, right?
Jim Doppke: I was.
Chad: Yeah. So was I. What kind of music did you play?
Jim: I did two shows. I had one on an FM station and one on an AM station. The FM station, my specialty thing was I did a blues show, and I tried to go hardcore, old Chess Chicago blues and acoustic blues and things like that, but you also had to do a classical show if you had any kind of show on that station, so I did that too.
Chad: Classical music.
Jim: Yeah, so I did that too. And the other one was our AM station. This was not the official motto, but the motto that my friends and I made up was “Six watts of pure power.” And I don’t think I reached to the building across from me. The FM one could go all the way into Michigan. The AM one, I don’t think even reached my dorm. But that was just almost anything goes except unless, of course, it had swear words. This was a Catholic college after all. So that was it.
Chad: What kind of music did you play on the AM station?
Jim: Oh, I was very into post-punk like Replacements, Hüsker Dü, things like that, but just anything else that struck my fancy, and I tried to make it all fit. I broke the band Nirvana, if you ever heard of them.
Chad: You personally did.
Jim: I don’t usually want to take credit, but I played their records. What can I tell you? Then they got huge. That’s… You know?
Chad: So it’s funny you bring up Nirvana because I was just about to say you play the classical, you play the blues. My days as a college disc jockey… Actually, I started in high school. We’re not as sophisticated. I played all the ’80s metal. At its peak. The Crew, the Priest, even later into the ’80s too, where it got a little weaker, but yeah.
Jim: Nice. I’m getting together with one of my old roommates who was super into heavy rock and metal at that time, and he was… Soundgarden like changed his life, such that he would play it at 10 o’clock in the morning, and I’m like, “This is really dreary music for 10 o’clock in the morning.” We did not dig that, my roommates and I, but that’s okay. And he also… I was refreshing myself in anticipation of seeing him on the kinds of music we listened to, and I found Queensrÿche, Operation: Mindcrime.
Chad: I just listened to that the other day with Jim.
Jim: Did you really?
Chad: Yeah, of all places. And it’s funny you bring up Soundgarden, because… and it’s funny you bring up Nirvana and the change of the guard from the excess ’80s metal to the grunge movement that was kind of anti-that, but… Because the first time I heard of Soundgarden, I was… obviously I was still in high school and really into metal, but you know how I heard about it was an interview with Axl Rose in Hit Parader magazine. It might have been Circus. There was those magazines, those metal magazines, and they asked him who he was listening to and he said Soundgarden. This is like ’86, ’87, so way before Big Love and they started to get some notoriety at Sub Pop and stuff, so.
Jim: Right. That would have been like pre-Louder Than Love, even. Ultramega OK.
Chad: Yeah. Yeah, yeah. Louder Than Love, not Big Love. Yeah, definitely.
Jim: Nice. Yeah, no, Louder Than Love was the one that echoed through my room all the time. And that’s okay. I liked it. It’s fine, but my guy was just way into it.
Chad: And it’s got the song that you could not play on the AM station.
Jim: Correct. Correct. That was one… If you had one of those, you didn’t… Half the time I didn’t even realize or you don’t realize until it’s on and then we had a policy of what you had to do, which was turn it down, fade it out, and say, “Sorry about that. You won’t hear that song again on our airwaves,” or something like that.
Chad: And did you major in music?
Jim: No, I majored in English and Classical Greek. I tried to find the least practical majors I could, and that’s what I came up with.
Chad: How do you go from college radio DJ majoring in English and Classical Greek to law?
Jim: Oh, you know, a series of unfortunate events, I guess. I was doing the liberal arts stuff and I was good at it, but I didn’t feel like I had the kind of creativity or new ideas I would want in order to be able to advance in it, and I wasn’t sure I’d be a good teacher of it either, which was like the obvious career path, you know? So I didn’t know… I don’t want to say I didn’t know what else to do, because I had an idea about why I wanted to go to law school, which was I wanted to learn about how the world works, you know? I didn’t know that, and I had ideas about how I thought the world should be, as you do when you’re a senior in college, and I thought I need to know things about that, rather than just about books and stuff.
Jim: And so I was able to go, and my goal was to be a legal aid attorney and I actually did that. So I wound up doing that for three years, so that was something that I pursued. It wasn’t… It’s easy to say I was casting about for something to do and I found that, like a lot of liberal arts majors say after they go into law, but I don’t really feel that way. I really was goal directed. I really had an idea, and I was able to basically achieve that.
Chad: Goal directed. But aren’t you still? Because in some ways it’s not legal aid. Attorneys can help themselves, obviously, but… Well, [inaudible 00:06:31].
Chad: But you’re still in a area of law, that of ethics, legal ethics. It’s still… It’s to help the individual, you know? To the lawyers that need guidance so they’re doing the right thing or maybe if they run astray. So I don’t see… They’re not that unlike.
Jim: In some ways, yeah. I mean the work I did at ARDC, I still counted that as public interest work. It was government work, first of all, and-
Chad: And the ARDC is like the Illinois governing body for attorneys, similar to the State Bar of California.
Jim: Correct, and I did that for almost 15 years and that was public interest work. That was doing right by the profession and the public as I saw it, and the work I do not is just the flip side of that. It is helping. It is a bit less of a triage situation than legal aid was. It’s less of an emergency situation than legal aid is. Half the time you’d get a call and somebody’s being put out of their house right then or an emergent family situation is happening. You’d have to help with it. But this is not quite that, but it is helping. I still feel like it’s a service to the profession, just from a somewhat different angle. It’s one that’s even a bit richer than what I did previously.
Jim: I’m more connected even now to the profession than I was before, even though I sort of represented the profession before in a way, I feel more of a kinship with it now than I ever have because I talk to lawyers all the time and I learn what’s on their mind. I learn what their struggles are. I let them talk to me, and complain, and argue with me sometimes, but also just tell me what’s on their minds and I try to alleviate the stress if I can, in my way.
What’s Changed Since Adoption of Lawyers’ Duty of Tech Competence/Duty to Supervise Artificial Intelligence
Chad: So it’s probably about time we get to the point of their episode: tech in legal ethics. When I had Jim on the show a few years ago, we spent a lot of time talking about a change made to Rule 1.1 of the Model Rules of Professional Conduct. Rule 1.1 focuses on a lawyer’s duty of competence. In short, the rule says lawyers better understand and know the particular type of law they are handling for a client, and if they don’t, they better hit the books and learn it, bring in someone to help that does know what they’re doing, or decline the representation entirely.
About seven or so years ago, the American Bar Association added language to the comments to Rule 1.1, stating that as a part of the lawyer’s duty of competence, they need to keep up with changes to technology and its impact on the law. So far, more than half of the United States have adopted this comment, made it a part of the rules that govern the attorneys that practice within their borders. Since the adoption of that comment a few years ago, use of technology has undeniably increased in the practice of law, as it has in the way we do our legal work. So that’s what Jim and I talked about. What’s changed since the adoption of the comment and also what’s changed since he was last on the podcast? One of the biggest changes, according to Jim, is the more prevalent use of artificial intelligence by attorneys.
Jim: Things are changing. The ethical duties that you have don’t change as much with the development of new technologies. They’re more or less the same duties, but they apply in different ways. They have different aspects to them as technology evolves and as the business marketplace evolves around those technological changes. So that’s what we’ll talk about today. One area I wanted to talk about in that respect was artificial intelligence and predictive coding. They kind of go together. You know a lot about predictive coding. But artificial intelligence, for example, I was reading a study by a company called QuisLex, which was founded by a number of former big law lawyers, and what they studied was abstraction tools for contracts, and that’s actually the business that QuisLex is in.
Jim: And they rated a number of the abstraction tools that are out there and rated them all according to different criteria. The conclusions that they drew were very interesting, and I would direct listeners to the study. The one that I thought was most relevant to what we’re talking about today is that they concluded that training AI, training the system and helping it develop the algorithms that it needs to do the tasks you want it to do, that is a skill that lawyers can have, and need to have if they’re going to employ these methods. And the reason I think that’s most relevant is because that seems, to me, to relate directly to Rule 1.1, which requires you to have the competence that’s necessary to carry out a representation and the skill that’s necessary as well, and if not, if you don’t have it, to develop those skills.
Chad: So what you’re saying there is if you’re using AI, be it predictive coding for a document review or maybe you’re even using it at least a first pass on contract analysis… So what you’re saying is if you, as a lawyer, don’t know how to train it, you need to bring in somebody that can or you need to learn how to train it. Is that what you’re saying? And if you don’t, maybe you are running afoul of 1.1 there. Is-
Jim: You’re in a risk area, yeah, for running afoul of the rule, because you have to figure out how this is going to work. If you go into an AI project for contract review or anything else without knowing that without having the skill to either train the AI yourself or to hire someone who can, then you run the risk of the project going off the rails and you not being able to manage it correctly, which then puts your interests at risk and your client’s interests at risk. So one way of looking at it is you have to do sort of due diligence on the AI methods that are going to be used, and on the AI providers that you’re using.
Jim: And we’ll talk about the duty to supervise those types of entities in a few minutes, but you have to ask how much time is going to be needed to train the AI? Initially or as it goes along. How do you improve it as it goes along? These are questions you can ask at the outset so that you can understand what kind of effort needs to be put into it, what kind of cost needs to be put into it, and how best to protect your client’s interests as the information you feed the AI system goes through the system.
Chad: The more I hear you discuss this, I think just that’s a perfect example of… Very few lawyers probably will or should actually figure out how to train the algorithm, the AI, but they should bring in someone to help them, but the person you bring in to help you is maybe not an attorney, and they’re not going to know the legal implications. So at that point the lawyer should step in and say, all right, here’s what’s important legally or factually. And so it’s like a team effort. So it’s the perfect example of Rule 1.1. You got to get up to speed a little bit and then bring in somebody else that maybe has skills you don’t have.
Jim: Right. Exactly. A lot of it is knowing what you don’t know. A lot of it is understanding the basics so that you can ask the right questions of the people who do know, and that, again, wraps in the concept of Rule 5.3, which is the duty to supervise non-lawyer assistance. Not assistants, the individuals, but assistance, as in the concept of the assistance that you’re getting from individuals or entities or whatever it is. And we often think of that rule as encompassing supervision of other humans, right? And working, as you say, as a team with other humans to guide a project to the right conclusion, and making sure as the lawyer that anyone you’re dealing with, when they do their tasks on it, that their conduct meets your ethical obligations.
Jim: That’s the technical obligation under Rule 5.3 but as I was preparing for our talk today, I thought what if Rule 5.3 means you also have to supervise non-human assistance?
Chad: Interesting, interesting.
Jim: The whole point of the project, of an AI project, is to train a machine to do what humans would otherwise be doing. That’s the whole reason you’re doing it. I don’t… I haven’t found any authority on this, and it’s not… I think a lot of a literature you read on AI and technological developments will emphasize the future of law is not robot lawyers, right? And so I don’t mean to suggest that we have to read Rule 5.3 to say that lawyers have to supervise robots. We’re getting pretty far afield here. But I think it’s fair to say the duty to supervise assistance that you get is a duty to be familiar with the technology as it’s working.
Jim: And the reason I thought of that is because, again, what I understand is that as an AI project progresses, the algorithm can learn more, and the system can learn more about, for example, what is relevant in an e-discovery project. It can learn more about how to sort the documents you’re asking it to sort, and you can train it more. And I think 1.1 and 5.3 should be read together to require the lawyer to continue to do just that, and continue to train the AI competently or have someone else do it so that the project can work to its best effect.
Chad: I think the good news is that these tools don’t work without the lawyer’s input. And what I mean by that is, and I think that it’s a really interesting point about do you have a duty to supervise the AI? But I think the good news is it’s baked into it for the most part. You got to have the attorney’s expertise. So for instance in electronic discovery, predictive coding, best practice there is you have one of the main attorneys on the case or the… if you’re using a company like mine, one of the lead attorneys that’s a subject matter expert in that particular case to train the algorithm.
Chad: For the contracts AI, what you usually do is you feed in a contract, and the lawyer goes in and puts in things to look for and what clauses. What’s going to meet the approved clauses in their playbook. So I think baked into how this AI works… lawyers can probably meet that, their duty, to supervise the robots.
Jim: Right, no, I think that’s true. And as you say, it requires continuous input, and nobody can just press a button and have the processes start and work the way they need it to, and I don’t think any lawyers really have that expectation. It’s not a set it and forget it, and the rules require you never to set it and forget it, whether we’re talking about supervising a paralegal, supervising a bookkeeper, or supervising an AI project. You can never just count on someone else to do it, and the older cases that implicate… disciplinary cases that implicate the supervisory rule are ones in which the lawyer did set it and forget it, allowed someone to manage a trust account, often a trusted advisor who then betrayed them, and that redounded on the lawyer’s disciplinary liability because they didn’t monitor what was going on.
Jim: They weren’t opening their own bank statements to find the theft. And I think lawyers have been sufficiently cautioned by those cases over the years not to do that, and to be aware of what their non-lawyer assistance is producing. And now we have to do that with software and technology as well.
Chad: 5.3, the duty to supervise non-lawyers, it’s assistance or assistants?
Chad: Oh, assistance. [inaudible 00:17:40]. Yeah. So common refrain, and it’s… I agree that 150% is practice of law is a team sport now. It’s not just a lawyer and a paralegal and an executive assistant churning out opinions and briefs, whatnot. You need help with your software. So you need technologists. Maybe you need project management. So it seems to me, would you agree that maybe Rule 5.3 is going to become more prevalent in governing the conduct of attorneys as you bring more people from outside the legal realm to help with legal work?
Jim: Definitely. I think that recognition of that was behind the amendment of the rule to stop saying supervising lawyer assistants, A-N-T-S, as if we’re referring to the individuals, and now to say supervising lawyer… or non-lawyer assistance, A-N-C-E. I mean to supposed to say non-lawyer, I know.
Jim: That’s a bad word these days, but forgive me. I’ve spent fifteen years saying non-lawyer. No, it is becoming more and more of a focal-point type of rule.
Chad: But again, that goes to the point, because historically, like, “Oh, you’re not a lawyer. You don’t understand. You can’t help with this.” But the reason that becomes… that non-lawyer becomes a faux pas to say is people with other skills are just as important to getting certain legal matters done now, and I think that the reason behind that is it’s a team sport now.
Jim: Absolutely. I was kidding myself a little bit, because it is a habit that I got into when I was a regulator to say that. We talked about the people we regulated and then we talked about not-that, so I got used to saying things like non-lawyers, but even in my private practice, I see the point. I’ve come to see the point through my own experience and through the eyes of others who interact with the profession. And I get the reason why non-lawyer is not really the right term anymore, or if it ever was, because it sounds exclusive. It sounds like you’re either in the guild or you’re not.
Legal Founder Segment: Jeffrey Eschbach, Founder of Page Vault
Chad: Let’s take five away from our talk with Jim Doppke, because now it’s time for our Legal Tech Founders segment. In this episode’s segment we’re talking to Jeffrey Eschbach. He’s the founder of Page Vault. That’s a tool that lets lawyers easily capture web content and social media posts. But before we get to my conversation with Jeff, I want to let you know if you want to get a hold of me or you want to learn more about my company, Percipient, you can shoot me an email at firstname.lastname@example.org. That’s C-M-A-I-N@percipient.co. You can catch me on Twitter at chad_main. There’s also a contact page on tlpodcast.com.
Chad: Additionally, if you go to tlpodcast.com, there’s a dedicated episode page for every one of our guests and every one of our episodes. You can find out more information about them, and also there’s links to stuff they talked about. So I encourage you, if you want to learn more, to go to tlpodcast.com. Okay. Without further ado let’s get to our Legal Tech Founders segment, where we’re talking to Jeffrey Eschbach, the founder of Page Vault. All right Jeff, thanks for being here today. Tell us a little bit about Page Vault.
Jeffrey E.: Sure. So Page Vault is a solution to collect content from the web for attorneys, primarily for use in the legal system. So it could be anything from preserving Facebook to websites, online videos. If it needs to be used for legal uses, Page Vault does that. Whether it’s through our software solution, [inaudible 00:20:47] attorneys can deploy in-house, or we’ve got outsource services where we can do it for them.
Chad: Now is it SaaS-based product?
Jeffrey E.: Yeah. So the product itself for what we deploy to our law firms, that essentially works like a browser. So if you think about firing up Chrome, instead of that you would fire up the Page Vault browser. It works just the same. You could navigate to any content. Again, a Facebook profile, a webpage, you name it. If you can surf to it our browser can reach it as well. When you actually see the content, there’s a button that says Capture. Click on that and then behind the scenes Page Vault does its thing to scroll through the content, collect it, preserve it, and eventually generate a great looking PDF output that can be used as an exhibit or it can be shared.
Chad: And one of the cool things and one of the main features of Page Vault is that it preserves all relevant metadata and the important information for evidentiary purposes. What all does it grab?
Jeffrey E.: Yeah. And that is [inaudible 00:21:39]. We have our one-two punch. It is the high-admissibility along with the ease of use and looks great. So on the admissibility side, for the metadata, it gets the basics that you need. You want the time stamp. You want the URL or the link name. You want to know what the browser type was. All those other little details, but when you boil it down if you know when and you know what you collected, you’ve got the heart of it. And we do that for any web collection that we get. So any webpage URL that comes along with it. In addition to that, we give affidavits all the time. So if you get under the hood, the way Page Vault works is we keep the users out of the chain of custody, which is crucial.
Jeffrey E.: No attorney wants to be having to testify for their own case, right? They want to put their own paralegals on the stand if something ever came to that. Usually they want essentially a trusted third party, and even for our software we deploy to the law firms, Page Vault, with our tech design, we serve as that trusted third party. So at the end of the day, you’re not in the chain of custody. Content goes straight from the web server, like Facebook, straight to our servers. We store it away, which means we can give an affidavit that says this is really what the website looked like.
Chad: Cool. So you’re not a lawyer. How’d you come up with the idea for Page Vault?
Jeffrey E.: That’s right. [inaudible 00:22:47]. Took a little while to ramp up in the legal space. We’ve been doing this for seven years, and at first it was more seeing the broad need in society. Things had kind of hit a tipping point where earlier, if there was something that was relevant or mattered to me in my life, it would be stored away in a filing cabinet or on my own hard drive. And more and more we started seeing that stuff that was really about me, by me, for me, things I cared about, were on the web. I had access through a browser. Whether that’s something in a social media profile. It could be pictures or photos about something I care about. Could be my bank account. Online video.
Jeffrey E.: We’re like wow, this stuff we no longer have under our control. Specifically it’s from friends in academia that wanted to preserve content, refer to content that was online and that content changed. Caused them some issues. Had some friends that were also doing… going through some family issues. They had child custody things, and they were like, “Oh my gosh, this social media profile, Facebook said something yesterday and now that post is gone. Boy, it would have been nice to have preserved that.” And we started seeing just that need to be able to say… Stamp of truth of this is what a webpage actually looked like or what it said at a particular point in time.
Jeffrey E.: And that general need led into Page Vault. You just got to say after that I’m a technologist, so my career is more on the tech side and how to implement things in a network, and knowing how to do this from a tech perspective, kind of seeing that problem, we put together our solution that, again, keeps the users out of the chain of custody. But it did take a while to go in and learn the legal space, and now we’ve got a great brand name. Very highly trusted. But it was an interesting space to kind of get into. But we’re very glad now that we focused very much on the legal space. So we pride ourselves on being the solution for law firms. Am Law 200 boutique firms. That’s what we specialize in providing help to.
Chad: Yeah, and that leads into my next question. Who are your biggest users? What type of lawyers?
Jeffrey E.: So you can get a range, but usually it ends up being someone with litigation, because they’ve got a need to collect content that’s on the web. If you have a contract lawyer, probably less of a need. So specifically insurance defense, trademark infringement, family law, employment law. If you just think on a daily basis there might be something on the web that’s relevant to them, that’s our bread and butter. And again, as far as the types of firms, we’ve served a majority of the Am Law 100. We’ve got great boutique firms as well. Solo practitioners. If that’s what they do and what matters on the web could be relevant to their cases, that’s who we serve.
Chad: Who’s not using Page Vault that should be?
Jeffrey E.: Well it’s interesting you say that. I’d still say the groups I just outlined are the correct groups, but it’s not always easy to reach and get your message out to every single attorney that’s out there. So I wouldn’t put it as a particular camp, but more there’s always an effort that we have to let people know about Page Vault and what we’re doing. We’re actually at a point now where we’ve got, again, a lot of users, and word is getting out, so it’s kind of nice to see people reaching out to us and we haven’t had to do any marketing directly to them. But end of the day, we know that there are a lot of people that struggle.
Jeffrey E.: They hit print screen all day long or they’re getting some off the shelf tool like Snagit. We hear all these stories about some poor paralegal [inaudible 00:25:54] poor person literally taking days trying to open every comment in a Facebook profile, and hitting print screen, and realizing later they missed things. Those people are out there, and those are the ones we want to raise awareness with.
Chad: Speaking of raising awareness, let’s get you some more users. If people want to learn more, where do they find you?
Jeffrey E.: Our website is www.page-vault.com. If you go and search on Page Vault, again, like a page of paper, and a bank vault, Page Vault on the web, you should find us without any trouble. They can reach out to us through web forms. So if they have a on-demand request, say something that they want us to collect, we have forms. You can make a submission, we’ll give you a free quote, and if you approve, then we’ll get the work turned around here in a couple days or faster if needed. They can call us. We get phone calls all the time with requests. Email address is on there as well. So all these different channels, you reach out to us, we pride ourselves on responding very quickly and taking care of our customers.
ALSP’s (Alternative Legal Service Providers)
Chad: Okay. It’s time to get back to our discussion with Jim Doppke. We spent a lot of time in this episode focused on lawyer’s ethical duties as they relate to technology, but it isn’t just technology that’s changing the way lawyers do their work. There’s innovation in other ways, such as clients working with ALSPs, that’s alternative legal service providers, or what some might call law companies. Or the way clients and law firms are looking to litigation funding companies to help cover costs. Innovation outside of technology and how it relates to legal ethics is a big reason I wanted to get Jim on the podcast again, because in our first go around we didn’t talk about it too much.
Jim: I don’t think the Rules of Professional Conduct impose a duty to innovate in your own practice, or even to know exactly how others are innovating. A lot of us are curious about that, and a lot of us want to innovate or be aware of the ways others are in order to improve how we do things, and that relates to AI-type projects or just new ways of doing trust accounting, or new products offered by banks that help you in different ways. It’s good to be aware of those things. I don’t know that I would say it’s a duty that flows from Rule 1.1 to do it.
Chad: Let me phrase the question a different way then, and we’re going to talk about, in a minute, alternative legal service providers. That’s an innovation, because that’s people and tech and the way legal work is getting done, and obviously I’m going to have some bias there, because it’s what my company does, but… and this is where this question’s coming from, probably the bias. Lawyers have a duty. We have a duty to act in the best interests of a client, correct?
Chad: I think, undoubtedly, for certain legal matters, it’s in the best interests of our clients to innovate the way the work is getting done. So what about if I frame it that way? Does that implicate a lawyer’s duty to get something done, where they should bring in a piece of tech to help look at contracts, or they should bring in an alternative service provider to help get the work done, or they should bring in a product manager to streamline things, to save money and get the work done more efficiently?
Jim: I see the point, and I think you can argue that 1.1 and really Rule 1.3 which requires reasonable diligence, it at least requires you to think about those things. What is the best method of getting these things done? And as you say, it goes back to even the more general fiduciary duty concept of having the client’s best interests in mind as opposed to your own, and doing what needs to be done in order to advance the representation to best effect. And so in that sense, I see it. Again, I think a lot of lawyers have more of a concept of should I do it for my practice? Should I reorganize my business in a certain way to make things easier for me? But you can also say your duty to represent the client best is a duty to ensure that you at least consider comment 18 to Rule 1.1 requires you to consider the ways in which you can get benefits from relevant technologies.
Jim: There are also risks and the comment requires you to know about those too, but when it says that you need to understand the benefits of technology, maybe that’s what this really is. The benefits of perhaps engaging a new business system or a new idea for accomplishing a client’s goals.
Chad: So along those lines then, alternative legal service providers. They’re becoming more prevalent now. Much more used, thankfully, selfishly. What ethical obligations, what Rules of Professional Conduct are implicated there?
Jim: Well, again, Rule 5.3 is the big one here, because especially under the rewording of it encompass a wide variety of assistance that a lawyer can get, ALSPs are for sure falling within that category. And again, the duty under that rule is to make sure that any assistance you get is consistent with your own ethical obligations, and the more traditional views of the rule that that would mean making sure that someone else who you employ in whatever capacity isn’t doing something that you couldn’t do. That’s the traditional view of it. That’s how regulators have often thought of it.
Chad: Doing something wrong that you couldn’t otherwise do.
Chad: Not what you can’t do physically.
Jim: Oh, no, no, not what you’re not able to do, but what you must not do, in a ethical sense, in a moral sense. The paralegal can’t be going out and soliciting cases in a way that you can’t. The paralegal or other executive assistant can’t take money and do things with it that you can’t do. And you have to make sure that you have systems in place to ensure that they don’t do those things. That’s the real wording of the rule, and that is how it was typically thought of. That is the forcing of another person not to do certain things by means of a system or systems.
Chad: So you’re talking about stuff like if you’re using an ALSP the attorneys involved can’t have conflicts. Security. Make sure that they’re keeping client confidences confidentials.
Jim: That’s a big one, and that remains a big one. And none of that is off to the side or in the past now. That’s all still true, and that’s all still commensurate with your duty under rule 5.3, especially the confidences and some thoughts about how tech is implicated in all of that. But for ALSPs, I think the rule has a more diffuse kind of application, because there are so many ways now in which a lawyer can get assistance. Either on a case-by-case basis or with an ongoing relationship between the lawyer or firm and the ALSP, there are so many more things that ALSPs do now than the traditional lawyer assistant used to do that the rule can be applied in many different ways, and I think can be applied in a more positive kind of way as opposed to a negative framing.
Jim: That is, it’s not just about making sure the paralegal doesn’t do X bad thing. It’s about making sure that the ALSP is working toward the goal in the right way to make sure that nothing goes wrong. And-
Chad: What are you alluding to there? What would an attorney do to make sure they’re working to the goal in a proper manner?
Jim: Well, for example, let’s say you hire an ALSP to do due diligence on a merger and acquisition type of transaction. What is that going to involve? That’s going to involve the firm giving the ALSP information about the transaction that underlies it, or expecting that they will uncover information that isn’t yet known by the law firm. The lawyer’s duty under Rule 5.3 is going to require the lawyer to supervise the provision of that information and make sure that the ALSP has procedures in place to protect that information, to acquire that information in a reasonably secure way, and to transmit the information that they gather back to the law firm also in a secure way, and to ensure that the ALSP has appropriate policies about who owns that information and what happens to it at the termination of the project.
Jim: A lot of what I just said involves the lawyer’s duty to safeguard information under Rule 1.6. There could be other kinds of concerns that arise in the engagement that the lawyer has to focus on and make sure that the service provider is conversant with and understands. And that’s what I mean when I say there’s a positive aspect to it now. There’s a consultative aspect in which the lawyer is required not to supervise as a lawyer would supervise an employee, but, going back to the team concept, to confer with the service provider and make sure that they understand what the ethical parameters have to be so that they continue to act in a way that is consistent with the lawyer’s obligations.
Chad: On the topic of ALSPs, The State Bar of California just proposed a rule that would let non-lawyers, true non-lawyers, people that aren’t licensed attorneys, have ownership interests in law firms.
Jim: My understanding is that if those entities start to occur in America, that is if entities that are part-owned by non-lawyers or have non-lawyer participation but are engaged in the practice of law, that those entities will be regulated by some form of the professional regulators that we have now. That is the ARDC here in Illinois or The State Bar of California, or whichever entity it is would be given some power to regulate those companies just as law firms and lawyers are regulated. And the proponents of the establishment of those entities are arguing for that because, they say, those entities are going to be able to innovate and invest in processes and procedures in ways that lawyers can’t, and that that’s a good thing for the development of practice.
Jim: Essentially it would be like an ALSP merging with a law firm, in a way, or becoming part of a law firm and using outside funding that does not come from lawyers necessarily, outside capital, to fund the development of business processes for the ALSP that will benefit the law firm and its clients. It’s a powerful argument, and I do see these things changing at some point in America. I don’t know if it’s going to be this California proposal, or something else down the line. Not every bar association or regulatory entity is signing on to this, you know? And California is requesting comment about it, and I’m interested to see the comments as they develop. But there’s another view of it that says no, these things should still be separate.
Jim: It’s okay for lawyers to work with ALSPs and make sure that they supervise the ALSPs in appropriate ways, but to merge the two and have that outside capital infusion is too dangerous, because it allows for profit motive to govern decisions about what is best to do for the client.
Chad: Come on. Profits for partner. I mean-
Jim: I know.
Chad: The whole goal of the law firm, unless you’re a public interest law firm or a legal aid law firm, the whole goal of a law firm is to put money in the lawyer’s pockets at the end of the day.
Jim: Well, the rejoinder to it is, like you said, come on. The point is law firms are getting lapped by other entities that can innovate, streamline, and do better. And why should the legal profession hamstring itself because they’re not keeping up? Even the biggest funded and best earning and most wealthy firms can’t do what outside capital does with a IPO or with just a large infusion of money to help improve systems. They’re not doing that, and it’s because of this rule that restricts our ability to partner with non-lawyers. And it’s funny that… because when I was a regulator, I dealt with Rule 5.4. Had some cases in which I prosecuted violations of it. Had nothing to do with any of this.
Jim: It had to do with lawyers paying people to go and run cases in to them and refer cases to them and so forth, and we alleged that it a splitting of a fee in a way that was improper. It didn’t have anything to do with technology and innovation, and yet that’s the focal point of that rule now, and it should be. And I think the debate is healthy to have, and I do think it’s one of those areas in the profession and in society that I just see as changing inevitably at some point.
Chad: Well it already is. Somewhat related, I mean you have litigation funding and legal funding where there are certain lawsuits that probably wouldn’t have ever been filed without third party backing. So I mean you already have people that aren’t licensed attorneys that are participating in legal matters.
Jim: Right, and there are ways of ensuring that ethical obligations are met in that. You do disclosures, you do as you would with a conflict, or you make sure that others understand where the decision making authority lies. If money is coming in from outside, is the provider of that money making legal decisions? No. That still can’t happen, and shouldn’t happen, I think. But a lawyer should be making those kinds of strategic decisions and consulting with the client in the way that lawyers do. But the money is a valuable thing to come into the case, because as you say, the case might not exist without it, and if it creates relief, if it furthers a client-based goal or even a societal goal, then that can be a good thing as long as the lawyer’s professional independence is preserved.
Jim: I hesitated almost to say that, because that’s supposed to be what Rule 5.4 is all about: professional independence. But when I say those words now, that strikes me as the same tone as we say non-lawyer. That is, the same problem with it is the problem behind saying non-lawyer. It sounds like here we are again, being the guild. The people apart from the rest of society. The special wizards who are the only ones who can do certain things. And that’s what the proponents of the amendment to Rule 5.4 would argue against. And I’m somewhat in sympathy with that. I just think… I don’t know, again, if it’s going to be the California thing or if it’s going to be a more gradual, graduated change, but I think it’s going to be there.
Jim: And I think you will see, even before we get to the point of new or amended rules being enacted, you will see not partnerships, but affiliations between lawyers and law firms and ALSPs.
Chad: We’ve already seen it. UnitedLex, you know they spun off a law firm. And the closed loop on that, from a purely economic, selfish standpoint if you’re a law firm, I think there’s an argument to be made that you want this additional capital and this additional place to look for money from people that aren’t licensed attorneys because if you don’t change, you’re going to lose this business. You’re already losing this business. My business wouldn’t exist but for the fact that clients are moving to document review, or the contract analysis away from law firms because it was costly and maybe a little less efficient. So the law firms can stay in this ballgame if they take advantage of this other pot of resources.
Jim: Right. It’s about meeting the needs that are out there, and lots of different lawyers have lots of different practices. There are still small firms and neighborhood firms that are never going to have an in-house e-discovery department, and may not need those services. But if they do, if they come up with a case that turns huge on them in ways they didn’t expect and ALSP is out there for them in a way that it wasn’t previously, and it doesn’t have to get handed off to a big law firm which, as you say, may have its own systems, but maybe the client wouldn’t be served as well by those systems as they would by a more nimble and better funded entity.
Jim: And that’s something that I think is developing whether we like it or not, and that will continue to develop as the technology gets better, the algorithms get better. I was, again, reading older articles and newer articles about that, and there are already just in the last few years, different things that you can train an algorithm, an AI software to do, than you could just a few years ago. And it’s not every lawyer that needs to know all the ins and outs of that or be coding themselves or anything like that, but if your client winds up needing it, you better be able to learn what those things are.
Chad: James, thank you very much.
Jim: Sure, Chad.
Chad: Second time’s a charm. People want to reach out, how do they find you?
Jim: Our firm website is different from what it was last time we talked. We are now Robinson, Stewart, Montgomery & Doppke, LLC, and our website is rsmdlaw.com. And you can find our contact information on there. That’s probably the best way to do it.
Chad: Well that’s a wrap. Thanks for listening to this episode of Technically Legal. If you want to subscribe, which I hope you do, you can catch us on most major podcasting platforms, such as iTunes, Spotify, Google, Stitcher, et cetera, et cetera. If you like us enough I hope you’ll leave a positive rating. Thanks for listening, and until next time, this has been Technically Legal.