Crowdfunding: The More Things Change….

The first post to this blog argued that a lawyer’s duty of competence includes a duty to stay abreast of developments in technology and the benefits and risk thereof.  It’s HERE.

Today, I came across a tech ethics issue I hadn’t previously considered:  is it ethical for a lawyer to use a “crowdfunding platform” to solicit donations to fund the representation of  a client who cannot afford the lawyer’s fee?

The answer, according to the Philadelphia Bar Association, is “yes, as long as the lawyer complies with the rules.” The full text of the Philly advisory opinion is HERE.

I love the opinion.  Why?  Good question.  Let me tell you why.

You’d be surprised how often lawyers tell me “we need to change the rules to keep up with technology.”

No.  We.  Don’t.

Let’s use Rule 1.6 as an example.  Comment 16 tells us that:

  • “A lawyer must act competently to safeguard information relating to the representation of a client against inadvertent or unauthorized disclosure by the lawyer or other persons who are participating in the representation of the client or who are subject to the lawyer’ supervision.”

The rule does not reference technology.  In other words, the rule draws no distinction between the lawyer who is having a conversation with a person who is standing two feet away and a lawyer who is emailing a person who is 5000 miles away.

Advances in technology that have resulted in new methods of communicating & transmitting information have not changed a lawyer’s duty to safeguard client information that is communicated & transmitted. Are the risks associated with storing client information in the cloud different than those associated with talking with a client in a crowded hallway at the county courthouse?  Of course!  But the duty not to disclose otherwise protected information remains the same in each situation.

That’s why the Philly opinion is great.  It doesn’t treat “crowdfunding platforms” as new creatures that require new rules.  Rather, it reminds lawyers that the rules that apply when using a crowdfunding platform are the same rules that apply to any other representation.  That is, if a lawyer & client use crowdfunding to raise money  to cover the lawyer’s fee, the lawyer must:

Remember: advances in technology do not change the duties lawyers owe to client, courts, and third persons.

Some of you might be muttering “what’s a ‘crowdfunding platform’ ?”  If you want to learn more, or if you think they might help your clients, the wikipedia entry is HERE.  You’ve probably heard of GoFundMe and Kickstarter.  They are crowdfunding platforms.  For a list of the top 10 by traffic, go HERE.

Are you required to learn about crowdfunding?  No.  But, if a client asks about crowdfunding your fee, “i don’t know about that &  it’s probably not allowed” might not cut it.

Finally, as Margaret Barry of Vermont Law School has mentioned to me, advances in technology will improve access to justice.  That is the case with crowdfunding platforms. As the Philadelphia Bar Association noted, “[c]rowdfunding sites can be a beneficial source of funds allowing the public to assist in the assertion of valid legal claims that might otherwise go without recourse.” So, please, don’t succumb to the knee jerk reaction that if it’s new, it must be unethical.  There’s too much at stake for that thought process to prevail.


Wait, I wasn’t supposed to say that?

Fill in the blank:  Rule 1.6 of the Vermont Rules of Professional Conduct prohibits a lawyer from revealing __________________.

Did you guess “client confidences”?  Guess again.

Did you guess “confidential or privileged information”?  Guess again.

Did you guess “a client’s confidences and secrets”?  Umm, 1999 is calling and wants its version of the rule back.

The answer: “information relating to the representation of a client.

So what’s that mean?  Let me share some thoughts.

…….brief interlude: I intend to post on client confidences often in the next month.  Today’s post is a primer, to make sure everyone takes a look at the rule we’re going to be discussing.  Now, back to our regularly scheduled blawging……

Rule 1.6 encompasses much more than information covered by the attorney-client privilege and information disclosed in confidence.  Indeed, the rule “applies not only to matters communicated in confidence by the client, but to all information relating to the representation, whatever its source.”  V.R.Pr.C. 1.6, Comment [3].

As with anything and everything in which lawyers are involved, there are exceptions.  The two obvious ones: a lawyer may reveal information relating to the representation if the client gives informed consent and a lawyer may reveal information when impliedly authorized to do so in order to carry out the representation.

The other exceptions are the mandatory disclosures required by paragraph (b) and the permissive exceptions allowed by paragraph (c). For mandatory, think “lawyer knows client is about blow up a stadium filled with 80,000 people.”  For permissive, think “lawyer may disclose information relating to the representation in response to a malpractice claim filed by the client.”

But as exceptions go, those are about it.

I cannot stress this enough: “but it’s public knowledge” is NOT one of the listed exceptions to Rule 1.6.  One might argue that it is impossible “to reveal” information that is “public knowledge.”  Maybe.  But, is a disciplinary hearing really the time you want to test your interpretation of the rules? Again, “information that is public knowledge” is not one of the listed exceptions.

This point is highlighted near the end of one of the most informative posts I’ve seen on Rule 1.6.  The post is HERE.

My experience has been that Rule 1.6 violations do not occur in the ways we discuss at CLE seminars.  Yes, seminars about encrypting email and cloud storage are interesting and thought-provoking.  But you know what leads to Rule 1.6 violations?  A lack of common sense.

To wit: the last three sanctions for violations of Rule 1.6 in Vermont were imposed:

My guess is that far more lawyers have put information related to a representation at risk by leaving files or computers in restaurants or airport waiting areas than by sending unencrypted emails or storing information in the cloud.

I’ll be back to Rule 1.6 over the next few weeks.  For now, I’ll end by paraphrasing Thomas Edison: as you go through life, you’ll have plenty of opportunities not to talk about your cases.  Take advantage of them all.

Oh, and for those of you new to the blog, the post people liked the most was on technology and social media.  It’s HERE