Maintaining Competence in Your Legal Practice in the Face of Technological Advancement

November/December 2015

By Amy Walker Wagner, Esquire

When was the last time your law office changed its billing software, upgraded computers, used floppy disks, or used cassette tapes to dictate or in answering machines? What do you do with the data stored in the old software, the old computers, the floppy disks, and the cassettes? What is the cloud and is it safe to use? These are all issues that many of our clients face and issues that have become more prevalent in the legal profession. Gone is the time when data was maintained in paper format; lawyers now face the need to heighten their technological savvy.

On August 6, 2012, following a review of the ABA Model Rules of Professional Conduct (MRPC) by the Commission on Ethics 20/20, the ABA amended a comment to Rule 1.1, which governs lawyers' competence in their representation of clients, that made it unequivocal that lawyers, as part of their duty, must keep up-to-date on the "benefits and risks associated with relevant technology…." ABA MRPC 1.1 cmt. 8 (2012 revision). The ABA recognizes, as do many state bar associations that technology has become an integral part of the legal practice; lawyers must become more aware of advances in technology and the impact technology has on their practice of law. Many lawyers who have looked at this amendment to the MRPC might first think it applies only to e-discovery, but the application of it extends to the daily practice of law and that can, at times, be daunting. So, setting aside the e-discovery challenges that litigators and in-house counsel face regularly, consider the technology that we all use every day in our practices and the "benefits and risks associated with [that] technology."

Countless benefits have emanated from innovation and advances in technology, which have provided the legal profession with both cost efficiencies (certainly word processing has sped up the preparation of legal documents) and cost increases (with licensing and training expenses). But, as the ABA has recognized, there are also risks.

The ABA's updated view of competence can be read to suggest that law firms and lawyers need to be aware of the technology being used in their practice to store data that may be confidential to the firm, the client, or other counsel, or protected by attorney-client privilege. The data that law firms possess is an asset to the firms, and often their clients, and lawyers need to understand how to protect it.

As a whole, data is growing and so are the methods of storing it. The data that is regularly used in the legal profession is now stored on countless devices and locations such as mobile phones, laptops, iPads and tablets, the cloud, personal and work email, servers, external drives, archival backup tapes, legacy systems, databases, mobile apps, and so forth. While many of these data sources have improved productivity and increased mobility in the practice of law, they can be easily lost, hacked, stolen, destroyed, or they can simply fail, all of which can potentially jeopardize the ever-important attorney-client relationship and the confidentiality that lawyers all endeavor to maintain. Also, some of these methods of data storage could see diminished use over time and become obsolete.

The legal profession faces challenges as technology becomes obsolete, particularly with data storage. Just as fixtures and appliances in our homes become outdated and it becomes difficult or impossible to find replacement parts, this can also happen with data storage. Many questions arise: Can you discard the obsolete technology? Do you need to maintain it to access the data? Do you need to continue paying license fees on outdated software? Is there a way to extract the data? The answers to these questions first depends on what data needs to be maintained, either by statute or regulation, for an ongoing client relationship, or for the law office's practice. The next step is to determine how it can be maintained with technology that is not yet obsolete, perhaps through a conversion process, or if it can be maintained on paper. While not ideal, it might also be possible to maintain a legacy system for the old data that is separately supported.

Take, for example, backup tapes and the transition to cloud computing. In years past, many law firms relied upon backup tapes to ensure the data on their servers; most were eventually sent off-site for additional security. With the dawn of cloud-based storage, the use of backup tapes has dwindled. Tape is not dead, but the cost of data storage in the cloud is shrinking and more firms are moving in that direction.

In recent years, there has been significant discussion at the state bar level concerning the use of cloud-based data storage. For instance, predating the ABA's revisions to the MRPC, the New York State Bar Association Committee on Professional Ethics concluded in Opinion 842 (Sept. 10, 2010) that "(a) lawyer may use an online data storage system to store and back up client confidential information provided that the lawyer takes reasonable care to ensure that confidentiality is maintained in a manner consistent with the lawyer's obligations under Rule 1.6." More recently, the committee issued Opinion 1019 (Aug. 6, 2014) and Opinion 1020 (Sept. 12, 2014). In addressing whether a law firm may "provide its lawyers with remote access to its electronic files," Opinion 1019 concluded that it was permissible, provided that the law firm "takes reasonable steps to ensure that confidentiality of information is maintained."

If such security precautions cannot be assured, then the firm "may request the informed consent of the client to its security precautions, as long as the firm discloses the risks that the system does not provide reasonable assurance of confidentiality…." Similarly, as to whether a lawyer may use cloud-based storage to share documents with another party involved in a transaction, Opinion 1020 concluded that it "depends on whether the particular technology employed provides reasonable protection to confidential client information and, if not, whether the lawyer obtains informed consent from the client after advising the client of the relevant risks."

In November 2011, the Pennsylvania Bar Association Committee on Legal Ethics and Professional Responsibility issued Formal Opinion 2011-200, outlining a detailed list of considerations for lawyers using cloud computing against which their "standard of reasonable care" would be measured. Their opinion also summarized similar ethics opinions from 14 other states relating to the transmission and storage of client data.

In addition, the Florida Bar Ethics Opinion 12-3 (Jan. 25, 2013) concluded, "Lawyers may use cloud computing if they take reasonable precautions to ensure that confidentiality of client information is maintained, that the service provider maintains adequate security, and that the lawyer has adequate access to the information stored remotely. The lawyer should research the service provider to be used."

Don't become bewildered by the technology. Determining how to handle data in your practice might involve a cost-benefit analysis in consultation with a technology vendor or expert with the particular type of technology. In fact, comment 3 to Rule 5.3, which governs lawyers' "Responsibilities Regarding Nonlawyer Assistance," specifically acknowledges "[a] lawyer may use nonlawyers outside the firm to assist the lawyer in rendering legal services to the client." In addition, any decisions concerning the firm's data should unquestionably contemplate the security of the data and the necessity to maintain confidentiality in the storage of client files. Consequently, competence commands lawyers to consider and understand these technological risks and challenges, and if necessary, seek out assistance. u

Amy Walker Wagner, Esquire, is a partner at Stone & Magnanini LLP in Berkeley Heights, New Jersey and is a member of the John C. Lifland American Inn of Court. She devotes a majority of her legal practice to healthcare and retail industry litigation, including intellectual property, primarily in New York and New Jersey.

© 2015 Amy Walker Wagner, Esq. This article was originally published in the November/December 2015 issue of The Bencher, a bi-monthly publication of the American Inns of Court. This article, in full or in part, may not be copied, reprinted, distributed, or stored electronically in any form without the express written consent of the American Inns of Court.