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Virtual practice: Lawyers hanging a shingle in cyberspace

In Melissa Howell’s employment law practice, she rarely meets with her clients in her Norfolk office space. Instead, her clients prefer to work with her via phone and email or have her come to them, where she can access employment records and interview witnesses.

Matthew Kaplan, who practices law out of his home in Arlington, described a similar preference by his clients. As in Howell’s practice, most of Kaplan’s client interaction takes place over the phone or through email and the only reason he would rent an office would be to satisfy ethics requirements of the Virginia State Bar.

Not having to spend the money to rent a physical location cuts down on his costs, Kaplan said, keeping his fees lower and clients happier.

“I wouldn’t like to think that would be an expenditure the bar would be encouraging,” he said.

Legal Ethics Opinion 1872 from the Virginia State Bar, issued on March 29, addresses the burgeoning use of virtual law practices and executive office rentals, where a lawyer rents access to a non-exclusive space, like a shared office suite or conference room.

“Virtual law offices involve issues that are present in all types of law offices – confidentiality, communication with clients, and supervision of employees – but that manifest themselves in a new way in this context,” the VSB wrote.

Chantilly lawyer Daniel J. Wisniewski praised the opinion for recognizing the changing needs of the profession.

A recent law school grad, Wisniewski said many of his contemporaries are hanging their own shingles and need the option to leverage technology to keep costs down.

“The opinion promotes business,” he said.

Howell, who recently launched the Howell Law Group in Norfolk, said she understood the bar’s concerns about confidentiality and was glad the opinion recognized the value of a virtual practice.

‘Virtual’ practice defined

The opinion defines a virtual law practice as “a lawyer/firm interacting with clients partly or exclusively via secure Internet portals, emails, or other electronic messaging.” Such a practice implicates a variety of the Rules of Professional Conduct, including 1.1 Competence, Rule 1.6(a) Confidentiality of Information, Rule 5.1(a) and (b) Responsibilities of Partners and Supervisory Lawyers, Rule 5.3 Responsibilities Regarding Nonlawyer Assistants and Rule 7.1 Communications Concerning a Lawyer’s Services.

While lawyers are not required “to absolutely guarantee that a breach of confidentiality cannot occur when using an outside service provider,” Rule 1.6 requires that attorneys act with “reasonable care” to protect client information.

“The use of cloud computing or any other technology inherent in a virtual practice requires the exercise of care in selecting a vendor,” according to the opinion. “A lawyer will have to examine the third party provider’s use of technology and terms of service in order to know whether it adequately safeguards client information, and if the lawyer is not able to make this assessment on her own, she will have to consult with someone qualified to make that determination.”

James M. McCauley, VSB Ethics Counsel, advised that lawyers consider what the vendor does in the event of a data breach or a third party request for information like a subpoena, as well as what back-up systems are in place in the event of a disaster.

Adequate security protections should also be in place to prevent hacking and guard against viruses, and lawyers should determine what happens to their data in the event the company goes out of business or files for bankruptcy.

“Worst case scenario – terrorist attack, server goes down – what happens to my information? What arrangements are made to return the data?” McCauley asked.

In a virtual practice, a lawyer may never meet a client face-to-face during the entire representation. That means that extra precautions are required, the VSB said.

In-person contact is not mandated by the Rules, but “the lawyer must take some steps beyond merely providing information to make sure that the client is in a position to make informed decisions. A lawyer may not simply upload information to an Internet portal and assume that her duty of communication is fulfilled without some confirmation from the client that he has received and understands the information provided.”

A virtual practice may utilize virtual employees – lawyers in other physical locations or a “virtual assistant.” But lawyers still have the same duty to take reasonable steps to supervise staff and subordinate lawyers, according to LEO 1872.

“Additional measures may be necessary to supervise staff who are not physically present where the lawyer works,” the VSB cautioned.

McCauley said the opinion tracks prior LEOs addressing contract attorneys and the outsourcing of legal work, emphasizing that lawyers are ultimately responsible for the work of virtual employees. “Nothing should be delivered to the client that was prepared by [a virtual employee] that hasn’t been vetted and reviewed by the lawyer,” he cautioned.

Turning to the use of an executive office/suite rental or other shared, non-exclusive space, the LEO said these locations raise distinct issues.

“A non-exclusive office space or virtual law office that is advertised as a location of the firm must be an office where the lawyer provides legal services,” the VSB said. “Depending on the facts and circumstances, it may be improper under Rule 7.1 for a lawyer to list or hold out a rented office space as her ‘law office’ on letterhead or other public communications,” the advisory opinion said.

Factors to be considered include the frequency with which the lawyer uses the space, whether nonlawyers also use the space and whether signage indicates the space is used as a law office. Attorneys are prohibited from using rented office space to misleadingly advertise a geographically diverse practice or bigger firm, the VSB said.

“It should be clear that the place listed as a law office needs to be where the lawyer at least occasionally practices law there and not simply used to inflate or bloat the size of the lawyer’s firm or create the impression that the lawyer has a statewide presence,” McCauley explained.

Watch this office space

McCauley said the advisory opinion was issued in response to queries from attorneys. A recent case of lawyer discipline involving a Fairfax attorney who rented executive office suites for client meetings and then advertised that those locations were his “offices” also raised related questions about advertising and marketing.

Christopher G. Hill, a sole practitioner with a construction law practice, operates in a suite of offices in Glen Allen. While he doesn’t have a virtual practice, he was concerned about the proposed version of the opinion, which failed to distinguish his situation from an executive office rental.

“I’m breathing a little easier,” with the final opinion, Hill said. “I have a physical office and if somebody shows up, this is where they will find me – unless I’m in court.”

However, some questions remain.

The opinion creates a case-by-case analysis about whether the use of an executive office space runs afoul of the Rules based on various factors and Howell noted that may leave some lawyers wondering whether or not they are in compliance.

Kaplan questioned whether clients in 2013 would really be deceived by an address on a lawyer’s letterhead or business card that serves only as a location to receive mail and meet clients while the lawyer works elsewhere.

“Members of the public understand [a virtual practice] and appreciate it because it can potentially save them a lot of money,” he said.

McCauley added that the considerations listed by the VSB “are not exhaustive.” Other state bars considering virtual law practices have addressed additional issues like verifying the identity of prospective clients and the need to use caution when accepting payment from a new virtual client, ensuring that their funds clear – concerns attorneys should keep in mind even though they aren’t outlined in the opinion, he suggested.

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