Conventional models of regulating lawyer conduct tend to be largely reactive. In most cases, law society disciplinary regimes respond after a complaint is filed alleging that a lawyer has engaged in some kind of professional misconduct. One obvious shortcoming to this approach is that concerns are addressed only after they become problems. For clients and affected third parties, this type of “after the fact” regulation often provides little solace: lawyer discipline can be a lengthy, time-consuming process that yields little in the way of meaningful relief. Obviously, it would be preferable if the problem never occurred in the first place.
So, what if we didn’t wait for problems to occur? What if problematic lawyer conduct could be prevented? What if we had a more proactive regulatory regime for governing the ethical conduct of lawyers?
To help us think through answers to these questions, we can, once again, look to encouraging developments in other jurisdictions.
In Australia, in particular, regulators have broadened their focus beyond reacting to client complaints to put in place measures to proactively engage with law firms to promote the development of effective “ethical infrastructure”. The term “ethical infrastructure” (coined by Ted Schneyer, a law professor at the University of Arizona) is just a fancy way of talking about the systems, procedures and policies that a law firm has in place to ensure that lawyers properly discharge their ethical duties. Conflicts checks systems, the use of template retainer letters and billing protocols are obvious examples. The concept also includes less tangible things like workplace culture which can be an important factor in ensuring that lawyers and staff meaningfully comply with formal policies and procedures.
Several years ago, regulators in the Australian state of New South Wales (NSW) adopted new procedures requiring certain firms to complete a self-assessment process to evaluate whether they had “appropriate management systems” in place. Rather than dictate specific practices, the self-assessment process identifies ten broad areas of ethical concern (including, for example, negligence, communication and conflicts) and requires firms to evaluate themselves as to whether they have sufficient structures, policies and procedures in place in relation to each of these areas. The aim is not to be prescriptive, but rather, as put by the Australian regulators, to focus on “education towards compliance”. The goal is to facilitate a learning process through which firms can improve their own practices.
Preliminary studies suggest that the NSW self-assessment process has been remarkably successful. One study found that “[o]n average, the complaint rate for [firms] after self-assessment was one third the complaint rate of the same firms before self-assessment.”
In addition to reducing complaints, this type of self-assessment process is also promising for its potential to address systemic conduct leading to ethical breaches that tends to be missed by a reactive complaints-focused process. For example, because many lawyers now practice collectively within large organizations, responsibility for client services issues like delay and lack of communication may be diffuse. This diffuse responsibility can make it difficult for these issues to be addressed in the context of law society disciplinary proceedings where individual lawyers are often the focus and legal burdens of proof must be met. A self-assessment process like the one used in NSW that examines ethics at an institutional, rather than individual level, is better situated to lead to improved practices in such cases. Indeed, another study on the self-assessment process in NSW suggests that the reforms have inspired a significant amount of change within law firms: a majority of firms reported that the process resulted in revisions to firm policies or procedures and helped them improve client service, and close to half adopted new systems, policies or procedures.
Although the self-assessment process in NSW was introduced in conjunction with new legislation permitting alternative business structures, and currently only applies to such structures, the criteria target ethical concerns that reach across practice contexts and apply in equal force to more conventional law firm arrangements. Following NSW’s lead, other Australian states have now adopted similar self-assessment processes.
Here in Canada, we should be looking at these developments and exploring how we might take a more proactive stance to promote ethical infrastructure within law firms. This year, the Ethics and Professional Responsibility Committee of the Canadian Bar Association has undertaken a project to develop an “Ethical Practices Self-Evaluation Tool” for use by Canadian law firms that is scheduled to be available in early fall 2013 (full disclosure: I am the Research Director for this project). Like the self-assessment form used in NSW, the CBA Ethical Practices Self-Evaluation Tool identifies ten prominent areas of ethics concerns and risks and provides suggestions to firms for evaluating whether these issues are adequately accounted for in their existing practices. The goal of this project is to assist lawyers and their firms by providing practical guidance on law firm structures, policies and procedures to ensure that ethical duties to clients, third parties and the public are fulfilled.
Canadian regulators should also become involved and consider how they might take up more robustly pro-active regulatory stances. There will always be bad or negligent lawyers that regulators will need to single out for “after the fact” discipline. There will also, however, always be ethical problems that can be better addressed with preventive, educative, and institutionally focused regulatory approaches. The Australian reforms discussed above provide compelling models that should be seriously considered.