LEGAL ETHICS IN THE INFORMATION AGE

December 21, 2007

Ronald I. Raether, Jr., Esq. Faruki Ireland & Cox P.L.L.

Reprint Ohio Super Lawyers 2006 - Rising Stars Edition

Ron Raether Knows His Bits From His Bytes

by DAVID SEARLS
The future is most definitely now. We're still waiting for those flying cars, but in the meantime, we've got spyware, cyber-stalking and identity theft. In this brave new wi-fi world, security and privacy come at a premium, and many computer users are suspicious of any digital interaction, even on their own home PCs. They're right to be concerned, says Dayton lawyer Ronald Raether Jr., but they shouldn't give in to the Luddites. "When was the last time you stood in a bank line?" the young litigator asks as he sits behind the neat desk of his sleek downtown office at Faruki Ireland & Cox, a 40-plus attorney firm in Dayton. Raether points out that tech-savvy bad guys have figured out how to steal your card-imbedded information at the ATM, and then visually capture your password keypunches. Now that you know that, will you wait in teller lines again? 2 Raether doesn't think so either. For most of us, the convenience is worth the risk.

High-technology and privacy litigation, throughout the United States: Federal and State Privacy Statutes Trademark/Domain name disputes Privacy/Data Security Audits Antitrust Software/Hardware Product Performance Author and featured speaker on numerous technology and privacy related
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ROADMAP
Technology & Legal Ethics Adventures and Misadventures in E-Mail and the Internet Discovery in the Electronic Age

Ethics of a Digital Practice

Technology is Everywhere
Difficult to Imagine a Law Practice Today Without Computers

Everyday Routine
Arrive at the Office Check Voicemail Turn on Computer Review E-Mail Review Client Information Stored on Firm Server

Ethical Rules are Implicated

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Questions You Should Ask Yourself

How much do you really know about the workings of e-mail and data storage? How much are you expected to know? Can you simply leave the tech issues to the IT managers? What knowledge and competency do our clients expect from the lawyers that maintain their electronic secrets? Can we practice law without some knowledge of digital discovery? Can we properly advise our clients on matters if we refuse to develop knowledge about our clients digital practices?

Professional Responsibility Rules

Do Not Answer Questions Directly Clearly Establish Expectations and Principals Which Apply To Modern Practice Lawyers Must Have Some Competency in the Technology Area to Ensure Client Confidences are Maintained

General Ethical Principles

Quality of Justice As an officer of the court, a lawyer not only represents clients but has a special responsibility for the quality of justice. Preamble 1. Multi-Tasking In representing clients, a lawyer performs various functions. As advisor, a lawyer provides a client with an informed understanding of the clients legal rights and obligations and explains their practical implications. As advocate, a lawyer asserts the clients position under rules of the adversary system. As negotiator, a lawyer seeks a result advantageous to the client and consistent with requirements of honest dealings with others. As an evaluator, a lawyer examines a clients legal affairs and reports them to the client or to others. Preamble 2
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General Ethical Principles

Competence and Confidence
In all professional functions, a lawyer should be competent, prompt, diligent, and loyal. A lawyer should maintain communication with a client concerning the representation. A lawyer should keep in confidence information relating to representation of a client except as far as disclosure is required or permitted by the Ohio Rules of Professional Conduct or other law. Preamble, 4

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Lawyer Competency
Competent Representation
A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness, and preparation reasonably necessary for the representation. Rule 1.1

Generally Not Restricted to General Substantive Law

Cannot Restrict Competency to Substantive Areas of Law Only Must be Competent in the Methods and Procedures and in the Practice of law
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Lawyer Competency
Competent Handling
Competent handling of a particular matter includes inquiry into and analysis of the factual and legal elements of the problem, and use of methods and procedures meeting the standards of competent practitioners. Rule 1.1, Comment (5)

Knowledge of Changes in Practice of Law

To maintain the requisite knowledge and skill, a lawyer should keep abreast of changes in the law and its practice, engage in continuing study and education and comply with all continuing legal education requirements to which the lawyer is subject. Rule 1.1, Comment (6)

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Ignorance is Not Bliss

Lawyer in 21st Century Needs to Know Practice Technology as Well as the Substantive Law Leaving to Others is No Longer an Option Ignorance of Technology is Problematic in Three Digital Realities:
Digital Discovery Data Transmission Data Retention
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Digital Discovery
Duty of Competency The duty requires you to educate yourself and your clients about electronic discovery before a complaint or answer is ever filed. Wall, Ethics in the Era of Electronic Evidence, Trial, October 2005 Courts view ignorance as stonewalling Counsel is presumed to be aware of the existence of responsive material, even if its digital A reasonable inquiry by the plaintiffs counsel prior to responding to Federals document requests or preparing the December 12, 2002 letter would have alerted counsel that the plaintiff possessed electronic mail that fell within the scope of Federals document requests. Invision Media Communications v. Federal Insurance Co., 2004 U.S. Dist. LEXIS 3196, *22

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Data Transmission
Legal practice is no longer one of telephones and letters Lawyers communicate daily with clients and opposing counsel Manner of communication has a direct impact on lawyers ability to maintain client confidentiality Ease of use and informality comes at a price
Usually Insecurity Professional and Ethical Troubles Await
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Data Transmission

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Data Retention and Destruction

Electronic information is not easily disposable E-mail can be sent and re-sent ad infinitum Deleted messages can be recovered

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Confidentiality and Privilege

Hallmark of the Client-Lawyer Relationship
A fundamental principle in the client-lawyer relationship is that, in the absence of the clients informed consent, the lawyer must not reveal information relating to the representation . . . This contributes to the trust that is the hallmark of the client-lawyer relationship. Rule 1.6, Comment (2)
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Whats the standard?

Rule 1.6
(a) A lawyer shall not reveal information relating to the representation of a client, including information protected by the attorney-client privilege under applicable law, unless the client gives informed consent, the disclosure is impliedly authorized in order to carry out the representation or the disclosure is permitted by division (b) or required by division (c) of this rule.
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The Three-Legged Stool

Attorney-Client Privilege, Work Product, and Client Confidentiality The principle of client-lawyer confidentiality is given effect by related bodies of law:
the attorney-client privilege, the work product doctrine, and the rule of confidentiality established in professional ethics.
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The Three-Legged Stool

Attorney-Client Privilege and Work Product Doctrine
Apply in judicial and other proceedings in which a lawyer may be called as a witness or otherwise required to produce evidence concerning the client.

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Confidentiality Rule
Broader Than Attorney-Client Privilege and Work-Product Doctrine
Applies to not only matters communicated in confidence by the client but also to all information relating to the representation, whatever its source. A lawyer may not disclose such information except as authorized or required by the Ohio Rules of Professional Conduct or other law. Rule 1.6, Comment (3)
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E-MAIL COMMUNICATION
E-mail poses a greater risk of inadvertent disclosure of confidences than other communications Think about the manner an e-mail is sent Unintended transmissions or unintended recipients
Can easily forward communication from a client to others by simple act of hitting forward button Hitting Reply All instead of Reply

Attachments may contain unintended data

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Protect Yourself
Disclaimers
Routinely used on attorney communications The above e-mail is for intended recipient only and contains confidential information protected by the attorneyclient privilege.

Limited Value
Indiscriminate use Computers programmed to send on every e-mail Court may view overuse as indication that nothing is privileged Usually off the screen - ineffective
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METADATA
Data About Data
Your name Your initials Your company or organization name Name of your computer Name of network server or hard drive File properties and summary information Names of previous document authors Document revisions Document versions Template information Hidden text or cell personalized views Comments Time spent editing a document

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METADATA
Unknown transmission of information
Poses potential risks to attorney-client communications as well as attorney work product

May inadvertently provide opposing counsel prior draft or comments made by client Other risks Removing Data
Scrubbing Software Send as image or .pdf
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Can Lawyers Use E-Mail?

Unencrypted e-mail transmissions of client information
Mid-1990
Iowa Bar initially condemned the use of e-mail to transmit client information (Iowa Legal Ethics Opinion 95-30) Iowa reconsidered and issues opinion authorizing use of e-mail (Iowa Legal Ethics Opinion 06-01)

Today
Every bar permits use of unencrypted e-mail to send privileged communications (although some states require disclosure to clients about the risk of data interception) (Missouri Informal Op. 970161 (1997)
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Can Lawyers Use E-Mail?

ABA Formal Opinion 99-413
ABA Model Rules authorize use of unencrypted e-mail
A lawyer may transmit information relating to the representation of a client by unencrypted e-mail sent over the Internet without violating the [Rules] because the mode of transmission affords a reasonable expectation of privacy from a technological and legal standpoint. The same privacy accorded U.S. and commercial mail, land-line telephone transmissions, and facsimiles applies to Internet e-mail. A lawyer should consult with the client and follow her instructions, however, as to the mode of transmitting highly sensitive information relating to the clients representation.

Formal Opinion notes that the above Rule does not diminish lawyer s obligation to consider the sensitivity of the communication
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Asia Global
In re Asia Global Crossing, Ltd, 322 B.R. 247 (S.D.N.Y 2005)
Addressed privacy in employees use of company e-mail Employee used company e-mail to communicate with private lawyer about dispute with employer Court (in a lengthy discussion of privacy and e-mail issues) held that privilege was not destroyed Conflict where ex-employee used company computer
Kaufman v. SunGard Inv. Sys. (E.D.N.Y. May 15, 2006) waiver. Curto v. Med. World Communications, Inc. (E.D.N.Y. May 15, 2006) no waiver.
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Privilege and Waiver

Waiver found with inadvertent production attached to proposed counterclaim. Marrero Hernandez v. Esso Standard Oil Co. (D. Puerto Rico July 11, 2006). No selective waiver when producing documents to federal agency during investigation. In re Qwest Communications Int l, Inc. (10th Cir. June 19, 2006). Privilege not waived with inadvertent production of spreadsheet. Williams v. Sprint/United Mgmt. Co. (D. Kan. July 1, 2006).
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Ethics of Receiving Inadvertent E-mail

Reasonableness The New Standard
A lawyer who receives an unintended e-mail or other privileged communication should notify the sender. A lawyer who receives a document relating to the representation of the lawyers client and knows or reasonably should know that the document was inadvertently sent shall promptly notify the sender. Rule 4.4(b)

Metadata
Is the transmission of metadata inadvertent? Some commentators only visible portion of document should be viewed Some commentators such conduct should be expected New York Bar Association
Absent an explicit direction to the contrary counsel plainly does not intend the lawyer to receive the hidden material or information. N.Y.St. B. Assn Op. 749 (12/14/2001)

District of Columbia
Permitted to review metadata unless the lawyer has actual knowledge that the metadata was sent inadvertently; mere uncertaintydoes not trigger an ethical obligationto refrain from reviewing the metadata. District of Columbia Legal Ethics Cmmt, Op. 341 (9/07)
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ROADMAP
Technology & Legal Ethics Adventures and Misadventures in E-Mail and the Internet Discovery in the Electronic Age

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E-Mail & Murphys Law

No matter how safe the system, or how careful the person, if something can go wrong, it will eventually go wrong.

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Advantages/Disadvantages of E-mail
Several Advantages
Speed Convenience Good for simple problems, answers Provides documentation No telephone tag Saves money

Several Disadvantages
Lack of confidentiality Impersonal Lack of real time Raises the expectation bar Potential for misunderstanding
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Dangers with E-mail

Lost productivity Wasted computer resources Viruses Lawsuits Embarrassment and regret

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Advantages/Disadvantages of E-mail

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Jack Abramoff
E-mails my biggest regret Referred to clients as:
Monkeys Idiots Morons

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Lawsuits Arising From E-mail

Sexual harassment Defamation Discrimination Breach of confidentiality Copyright infringement Trade secret violations Fraud Conspiracy Malpractice Bad Faith
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BTK

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Why all the Fuss

The jury found [Anderson] guilty on the basis [of this statement]
Houston Chronicle June 25, 2002

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New York v. Marsh & McLennan Companies

$850 million paid in restitution to policy-holders Marsh allegedly steered its clients to insurers with which it had lucrative payoff arrangements
Solicited rigged bids for insurance companies

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E-Mail Evidence
They [preferred insurers] have gotten the lions [sic] share of our Environmental business PLUS they get an unfair competitive advantage as our prefferred [sic] insurance company

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E-Mail Evidence
We acknowledge that this was inappropriate behavior . . . [We will] do the necessary to [sic] eliminate all documentation, electronic or otherwise, that references or otherwise alludes to the [contingent commissions]

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E-Mail Policies
Compliance with the law Minimize liability exposure Implement sound legal and operational policies Create awareness of responsibility Establish ground rules
Appropriate topics and content Appropriate attachment Permissible transactions Forwarding e-mails
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Typical E-Mail Policy

Internal/External e-mail for business purposes only Do not include anything in an e-mail that would not be written in a written memo or letter Use good judgment in creating and distributing All e-mail is property of the law firm

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Typical Law Firm Policy

We would like to hear from you, however, please do not send any sensitive or confidential information or any other information about any matter that may involve you unless you are requested to do so by one of our attorneys. Internet communications are not secure and are subject to interception by third parties. We specifically disclaim any and all liability for any harm or loss of any kind arising out of the transmission of sensitive or confidential information to our office via email.
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Statement on E-mail
This e-mail communication contains CONFIDENTIAL INFORMATION WHICH ALSO MAY BE LEGALLY PRIVILEGED and which is intended only for the use of the intended recipients identified above. If you are not the intended recipient of this communication, you are hereby notified that any use, dissemination, distribution, downloading, or copying of this communication is strictly prohibited. If you have received this communication in error, please immediately notify us by e-mail or by telephone at (xxx) xxx-xxxx and delete the communication and destroy all copies. Thank you in advance for your cooperation.
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IRS Disclosure
IRS Circular 230 Disclosure:
To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for purposes of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

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Good E-mail Practices

Before you send an e-mail, remember to ask yourself:
Who is getting this e-mail/reply? Who is getting this forwarded message? Who is getting this CC? Who is getting this e-mail?

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Failing to Follow Good Practices

Subject: Fwd: FW: FW: Lawyers Behaving Badly Im busy doing jack [ ]. Went to a nice 2hr sushi lunch today at Sushi Zen. Nice place. Spent the rest of the day typing emails and BS-ing with people. Unfortunately, I actually have work to do. Im on some corp. finance deal, under the global head of corp. finance, which means I should really peruse these materials and not be a [mess]-up.
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Follow-up E-mail
I am writing you in regard to an email you received from me earlier today. As I am aware that you opened the message, you probably saw that it was a personal communication that was inadvertently forwarded to the underwriting mailing list. Before it was retracted, it was received by approximately 40 people inside of the Firm, about half of whom are partners.
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Top 10 E-mail Mistakes

Losing track of recipients (reply) Forwarding previous messages No subject line or recycling subject lines Carelessly sending and opening attachments Not establishing a context for the e-mail Saying something you should not have said (criticism, frustration, speculating) Failing to proofread or use proper etiquette Improper downloading Personal inappropriate use Forgetting that every e-mail may become Exhibit A
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Forwarding E-mails Messages

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Remember
Dont put anything in an e-mail that you wouldnt put in a formal memo or you would be reluctant to say in public or say to the client Be professional Dont write in haste Dont be too cute, ironic, or sarcastic Dont jump to conclusions Use common sense Apply the Golden Rule
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ROADMAP
Technology & Legal Ethics Adventures and Misadventures in E-Mail and the Internet Discovery in the Electronic Age

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Law Develops
Printing data insufficient (Armstrong v. Executive Office of the President) Request for documents includes deleted emails (Playboy)

1972

1993

1995

1999

2000

FRCP adds data compilations Electronic Discoverable; paper not substitute (AntiMonopoly

Computerized data includes voice mail, email, back up files, data files, program files, system files, web site log files and more (Kleiner)

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Law Develops
Landscape Shifts for Lawyers 2002 2003
Counsel has affirmative obligation to become familiar with client systems and data retention policies (Zubalake V)

2004

2005

Negligence sufficient to impose adverse inference (Residential Funding)

Counsel must explain preservation obligation (Metropolitan Opera)

Adverse Inference and burden shifting for multiple violations (Morgan Stanley)

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Discoverability
"The law is clear that data in computerized form is discoverable even if paper 'hard copies' of the information have been produced . . . . [T]oday it is black letter law that computerized data is discoverable if relevant." Anti-Monopoly, Inc. v. Hasbro, Inc., No. 94 Civ.
2120, 1995 WL 649934, 1995 U.S. Dist. LEXIS 16355, at *1 (S.D.N.Y. Nov. 3, 1995).

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Old Rules-New Tricks: Discoverability

Amendments to Discovery Rules Timeline 2000: Mini-conference (Hastings and Brooklyn Law School) 2001: FJC studies electronic discovery disputes 2002/2003: Input solicited Feb. 20-21, 2004: Formal Conference at Fordham May 2004 Feb 2005: Public Comment Effective December 1, 2006
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Old Rules-New Tricks: Discoverability

Amendments to Discovery Rules
Fed. R. Civ. Rule 16 Early Meet and Confer
Modification of disclosure timing Disclosure or discovery of electronically stored information Preservation Permits agreements regarding privilege Format

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Old Rules-New Tricks: Discoverability

Amendments to Discovery Rules
Fed. R. Civ. Rule 26
Includes electronically stored information Identify (but not produce) electronically stored information not reasonably accessible because of undue burden or expense

Rule 45 includes electronically stored information

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Old Rules-New Tricks: Discoverability

Amendments to Discovery Rules
Fed. R. Civ. P. Rules 33 and 34
Can produce electronically stored information as response
May be required to explain how to access data

Can request information to be produced in specific format

Form normally maintained Reasonably usable Only one form

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ELECTRONIC DISCOVERY
93% of Corporate documents created electronically 70% of those NEVER migrate to paper corporations are expected to generate 17.5 trillion electronic documents annually Office workers exchange est. 2.8 billion e-mails per day

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ELECTRONIC DISCOVERY
Floppy Diskette
100 pages or inch stack

CD
52,500 pages or 16 boxes

DVD
350,000 pages or about 117 boxes

1 Terabyte
100,000,000 pages or about 30,000 boxes

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Checklist (Forms and Types)

E-mail
Including any attachments about author, recipients, date sent, etc.

Word-Processing Documents
Including drafts, revisions, and Metadata

Spreadsheets
Including drafts, revisions, and metadata

Databases
Customer-designed or off-the-shelf programs

Website information
Including intranet pages, web-based data or web sever logs

Internet data
Including web-browser history, cookies, etc.
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Checklist (Forms and Types) Digital Images

Including pictures or graphics in .jpeg, .gif, or .tif formats

Scanned Documents Digital Video Recordings Computer System Data or Network Operating Logs Containing Usage Information Electronic Scheduling or Calendar Information Contact Manager Information
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Checklist (Where to Look) Tapes, disks, DVDs, CD-ROMs, and other storage media Computer hard drives (desktop or laptop computers) Flash drives, thumb drives, memory sticks or flash cards Third-party vendor hosted servers or back up systems Network drives or servers
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Checklist (Where to Look)

Legacy systems (old computer systems no longer in use) Archive (off-site or third-party) Servers (web servers, e-mail servers, file servers, etc.) Back up systems (tapes, optical disks, etc.) Cell phones, pagers, PDAs (Blackberries, etc.) Voicemail Event date recorders
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Beware of Multiple Versions of Same Document

Revisions of the original Copies forwarded to others for review Comments being added by those reviewing Versions kept on home computers or flash drives Copies made for back-up for archiving

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Checklist (What to Ask For) Ask for in format which you prefer to receive data
Original or native format Searchable format Acrobat (PDF) format

Mirror Image of Relevant Hard Drives Index and/or Data as Kept in the Usual Course of Business
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Checklist (What to Ask For) Available Deleted Data Computer System Information
Type of Hardware, Operating Systems, and Applications Used

Computer Configuration
Local Area Network (LAN) Wide Area Network (WAN) Stand-alone computer
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Checklist (What to Ask For) Security Features

Passwords Encryption codes Document Destruction Software

Document Management Protocol List of Sources of Data (Custodians) Document Retention Programs Person Most Knowledgeable about above-listed items
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DATA BREACHES
Year of the Security Breach

A REAL RISK

Over 160 Announcements (2/15/05 55 Million People

5/12/06)

Lawyers Collect and Store Confidential and Sensitive Information

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Potential Cost of Breach

45.7 Million Records $256 Million (October 12, 2007) Reputation/Consumer Confidence
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Sources of Breach
Risks
Office Bound Workers Greatest Risk Contractors/Outsourced Labor Guests Hackers

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QUESTIONS?
Ronald Raether, Esq. Faruki Ireland & Cox P.L.L. rraether@ficlaw.com www.ficlaw.com