Attorneys Who Work in the 'Cloud' May Get ABA Wake-Up Call With Proposed Rules

The ABA's Commission on Ethics 20/20 has issued proposed changes to the Model Rules of Professional Conduct designed to remind lawyers of the need to safeguard client confidentiality when engaging in "cloud computing," a phrase that refers to storing, managing and processing data on remote Internet servers in other words than on a personal computer.

Proposed rules would require lawyers to take reasonable steps to stay abreast of the benefits and risks associated with innovation used by Dropbox and other popular cloud computing services.

Commission member Frederick S. Ury, a partner at Ury & Moskow in Fairfield, Conn., said the recommendations strike a balance between the legal profession's need to tap the benefits of technology during protecting customers.

"I think what they're attempting to do is to acknowledge the need for lawyers to be aware of technological changes both in the management of their offices as so then as the providing of services to the public," he said. "I think the reality is, whether or not there is a rule change, every lawyer has a responsibility to understand the research they use."

The proposed rule changes have sparked concern nationwide from small firms and solo practitioners, who have been turning to cheaper, remote electronic data storage as then as Internet-based client service and marketing. Susan Cartier Liebel, a Connecticut lawyer who is founder and CEO of SoloPracticeUniversity, a virtual learning center, said any guidance from the ABA should be based on existing rules requiring lawyer competence and client confidentiality. "The rules are the rules. We have to comply with the same rules of professionalism regardless of what the media is."

Less costly alternative to practice management

Cartier Liebel said cloud computing software allows lawyers a less costly alternative to practice management and greater client access via virtual platforms that are accessible only to customers and their lawyers. "Positioned properly, having a virtual component is going where your customers want you to be."

Carolyn Elefant, founder of myShingle.com, is among those who sent comments to the ABA committee afterwards it announced it was considering rule changes. She urged the panel not to adopt bright line rules that would quickly become outdated by changes in innovation, or to recommend penalties for confidentiality lapses already covered by state and federal privacy laws.

The revised commentary for the proposed rules

According to the revised commentary for the proposed rules, lawyers will have to consider several factors, including the sensitivity of information being kept on a cloud computing site, the likelihood of disclosure, and the cost of employing additional safeguards.

Elefant said many small-firm lawyers or solo practitioners would like to see the ABA and state ethics panels establish standards for Internet data storage providers and recommend providers that meet those standards, much the same way state bar foundations have a list of approved banks for client trust accounts. That way, if a third-party provider experiences a security breach, the lawyer is not responsible.

Irene C. Olszewski, an East Hartford, Conn., solo practitioner, said cloud computing offers both customers and lawyers accessibility to data from virtually anywhere at a relatively reasonable price. She has been studying a service called Clio, which costs about $49 a month and offers Web-based storage backed up with high-grade security. During she says some are on the whole skittish about entrusting third parties with client data, she added, "We're now in an age of innovation we just can't ignore."

The rules changes concerning cloud computing are only the first to be unveiled by the ABA. Then up are proposals designed to guide lawyers who are using social media and other Internet-based means to draw customers.

"To be honest, it isn't an issue that has come across our radar screen, as it were, in terms of disclosure of that type of information. Most of the Internet-related cases we get are allegations of inappropriate jokes and inappropriate behavior in email communications."

She said the ABA proposals appear to be flexible enough to offer guidance in a world where innovation can change from year to year. "I don't think it was an unreasonable [proposal] given that what could be reasonable today could not be reasonable tomorrow," she said.