What happens when a Pennsylvania lawyer desires to invest in a law firm in D.C. where some of the owners are not lawyers? Under the Pennsylvania Rules of Professional Conduct, the lawyer is not permitted to make that investment, but the D.C. Rules would allow it for a D.C. lawyer.

ABA Formal Opinion 499 resolves this question and provides guidance on key considerations for lawyers in states, like Pennsylvania, whose rules do not permit non-lawyer ownership in law firms. Lawyers may invest passively in a law firm that includes nonlawyer owners in jurisdictions that permit such alternative business structures, according to the new ABA ethics opinion. The lawyer may passively invest, even though the lawyer practices law in a jurisdiction that does not permit such nonlawyer ownership.

On December 21, 2020, the Supreme Court of New Jersey issued its ruling and opinion in the case of Delaney v. Trent S. Dickey and Sills Cummins & Gross, P.C., (“Sills”), a law firm located in New Jersey.

Initially, when Brian Delaney, a client of Sills, refused to pay outstanding fees allegedly owed by Delaney to Sills for professional services Sills invoked the arbitration provision contained in its Engagement Agreement with Delaney.  However, thereafter Delaney brought a separate action against Sills for malpractice and moved to stay their fee dispute, and have the malpractice claim proceed in the Chancery Division.  That request was granted, and the Court ruled that both of these disputes were subject to the arbitration provisions of the parties’ Engagement Agreement.  However, in December, 2020, the Appellate Division ruled, to the surprise of many attorneys and other commentators, that the malpractice action was not subject to the arbitration provisions of their Engagement Agreement and, that, therefore, Delaney could proceed with such action in the Law Division.

Virtual practice and remote work are seemingly here to stay, in some capacity.  The ABA’s Standing Committee on Ethics and Professional Responsibility recently issued a formal ethics opinion addressing virtual practice to help guide practitioners.  The ABA’s Formal Opinion tracks similar guidance issued from state bar associations, such as the Pennsylvania Bar Association’s Formal Opinion 2020-300 (Ethical Obligations for Lawyers Working Remotely).

We spent the past year uncertain what our post-pandemic lives will look like, but we are slowly gaining clarity.  Firms are preparing to reopen but are doing so with the understanding that work-from-home flexibility will likely remain, to some degree.  The way that we practice and interact with colleagues, clients, adversaries, judges, and witnesses has forever changed. ABA Formal Opinion 498 (March 10, 2021) helps navigate the relevant ethical considerations for lawyers when practicing virtually.

Undoubtedly professional responsibilities and obligations bind an attorney regardless of their location, but certain Model Rules are of particular importance when practicing virtually.  Key considerations addressed by Formal Opinion 498 are confidentiality, competence, and supervision.  The Opinion goes beyond security concerns that have been expressed repeatedly in years past, such as secure wifi connections and two-factor authentications, and addresses issues that arise when our family homes are now our offices—and also our significant other’s office and children’s classrooms.  The Opinion also comes on the heels of Formal Opinion 495, issued in December, which addresses lawyers working remotely from jurisdictions in which they not licensed to practice—a common scenario during the pandemic.

When Family Homes Become Family Offices.  During the last year many attorneys, and other professionals, have been working in tight corners and shared spaces making concealing confidential documents and guarding confidential communications particularly important.  Attorneys must make reasonable efforts to avoid inadvertently disclosing or granting unauthorized access to confidential client information.  Working from home where others are present should involve keeping work surfaces free of confidential papers and computer desktops free from confidential documents and communications.  For those who routinely print hard copies of documents, it is important to remember to shred them when finished and not to merely drop them in the kitchen trash bin.  Computer screens should be locked when the attorney is a way to avoid confidential information being left displayed.  Phone calls and virtual meetings are best taken using headphones to avoid unintended listeners from overhearing privileged conversations.  Lastly, the Formal Opinion reminds attorneys to turn off listening enabled devices, like Alexa and Siri, in their workspaces. 

Learning the Ins and Outs of New Technology. We all quickly adapted to a half dozen video conferencing platforms that a year ago many of us couldn’t even name.  Today, we click a link, turn cameras on, and hopefully remember to mute when not speaking.  But are attorneys closely looking at the service providers’ terms and conditions and knowledgeable of the privacy settings?  They need to be.  Formal Opinion 498 urges practitioners to be familiar to such terms and also updates and changes to any terms, which can be made frequently.

Supervising Colleagues from a Distance.  Much has been said and written about the impact of remote work environments on the younger generations of employees—within the legal profession and other workplaces.  Lawyers with managerial authority, unlike other professionals, have an ethical obligation to establish policies to ensure compliance with ethical obligations and supervising attorneys have a duty to ensure that their subordinates comply with the rules of professional conduct.  This, for obvious reasons, is significantly more difficult to oversee when colleagues are working in their own separate spaces, but the ethical obligations remain.  The Formal Opinion advises managing and supervising attorneys to check-in with their subordinates—both lawyers and non-lawyers—frequently and routinely.  Regular interaction and communication is more critical than ever.  This also provides an opportunity for attorneys to check in on each other’s mental health and well-being during these difficult times.

While things are looking up and plans coming together to return to our offices in the coming months, the ABA’s Formal Opinion 498 prepares us for the reality that the days of being in a traditional brick-and-mortar office full-time may never return, and adequate measures must be in place to adjust accordingly.

Leigh Ann Benson is a member of Cozen O’Connor’s Legal Professionals Practice Group, and a member of the PBA Bar Leaders Institute class.