Can a North Carolina lawyer run an internet-only virtual law firm and offer clients unbundled, limited-scope legal services?

Plain-English summary

A firm plans to market and deliver legal services exclusively over the internet under the name Virtual Law Firm, with all communication by email, regular mail, and telephone and no face-to-face consultation or physical meeting space.

On whether lawyers may maintain a virtual practice, the opinion concludes yes, while flagging recurring pitfalls. The Rules of Professional Conduct do not prohibit using the internet as the foundation of a practice, but the opinion identifies five concerns: unauthorized practice in other jurisdictions, out-of-state advertising violations, competence given limited client contact, creating an unintended client-lawyer relationship, and protecting confidences. At a minimum the firm must comply with North Carolina's advertising rules by including a physical office address on its website under Rule 7.2(c), and should also list the lawyers primarily responsible for the site and the jurisdictional limits of the practice. Virtual lawyers from other states who actively solicit North Carolina clients must comply with North Carolina's unauthorized-practice restrictions (N.C. Gen. Stat. § 84-4). Because limited contact can affect competence and communication (Rules 1.1 and 1.4), the opinion states the cyberlawyer should make the same inquiries, communication, and precautions a lawyer would in an office setting. The opinion also cautions that an unintended client-lawyer relationship can arise from an email exchange when specific legal advice is given, so a lawyer should not give specific advice without first determining the applicable jurisdiction's law and running a conflicts analysis, and must take reasonable precautions to protect confidential information (RPC 215).

On unbundled services, the opinion concludes yes, if the lawyer obtains informed consent, provides competent representation, and follows Rule 1.2(c). The Rules permit limited-scope representation, but under Rule 1.2 comments [6] and [7] the limitation must be reasonable under the circumstances and still allow competent representation. Before undertaking the matter the lawyer must disclose how the representation is limited and what services will not be performed, make an independent judgment about what limited services can ethically be provided, and discuss the risks and advantages with the client. If the lawyer believes a client's chosen single service is unreasonable or that more is needed for competent representation, the lawyer must so advise the client and decline to provide only the limited service. The decision is made case by case, considering the matter's complexity and the client's sophistication.

In practice

Under the North Carolina rules as they stood at the time of the opinion, the analysis turns on applying the existing rules to an internet-delivered practice rather than on any special "virtual" exception. The opinion holds that a virtual firm must post a physical office address under Rule 7.2(c), watch for unauthorized practice and out-of-state advertising exposure, and supply the same level of inquiry, communication, and confidentiality safeguards an office practice would.

Per the opinion, unbundled service is permitted only when the scope limitation is reasonable and accompanied by the client's informed consent under Rule 1.2(c); the lawyer must decline a limitation that would prevent competent representation.

Common questions

Q: Can a North Carolina lawyer run a practice that operates entirely over the internet?

A: Yes. The opinion concludes the Rules do not prohibit an internet-based practice, subject to compliance with advertising, unauthorized-practice, competence, communication, and confidentiality rules.

Q: What must a virtual firm put on its website?

A: A physical office address under Rule 7.2(c), and the opinion adds that the firm should also list the lawyers primarily responsible for the site and the jurisdictional limits of the practice.

Q: Can a lawyer offer unbundled or limited-scope services?

A: Yes, if the lawyer obtains informed consent, provides competent representation, and follows Rule 1.2(c). The opinion stresses the limitation must be reasonable under the circumstances.

Q: What if a client picks a single limited service that the lawyer thinks is not enough?

A: The opinion concludes the lawyer must advise the client and decline to provide only that limited representation if the limitation is unreasonable or more is needed for competent representation.

Background and rules framework

The opinion interprets Rule 1.2(c) (limited-scope representation, corresponding to Model Rule 1.2) together with Rule 1.1 (competence), Rule 1.4 (communication), Rule 7.2(c) (advertising and the office-address requirement), and the unauthorized-practice limits reflected in Rule 5.5 and N.C. Gen. Stat. § 84-4. It also relies on RPC 215 for the duty to protect electronically transmitted confidences.

Citations and references

Rules of Professional Conduct:

• MR 1.2 / NC Rule 1.2(c) (limited-scope representation; cmts [6], [7])
• MR 1.1 / NC Rule 1.1 (competence)
• MR 1.4 / NC Rule 1.4 (communication)
• MR 7.2 / NC Rule 7.2(c) (advertising; office-address requirement)
• MR 5.5 / NC Rule 5.5 (unauthorized practice)

Statutes:

• N.C. Gen. Stat. § 84-4 (unauthorized practice of law)

Other opinions cited:

• RPC 215 (protecting confidences transmitted electronically)

See also

• ABA Formal Op. 498: Virtual Practice
• ABA Formal Op. 472: Communication With Limited-Scope Client
• ABA Formal Op. 07-446: Undisclosed Assistance to Pro Se Litigants
• Alabama Ethics Op. 2010-01: Unbundling of Legal Services and Ghostwriting

Source

• Landing page: https://www.ncbar.gov/for-lawyers/ethics-and-governing-rules/ethics-opinions/opinions/2005-formal-ethics-opinion-10/

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

Inquiry #1:

Law Firm markets and provides legal services via the internet under the name Virtual Law Firm (VLF). VLF plans to offer and deliver its services exclusively over the internet. All communications in the virtual law practice are handled through email, regular mail, and the telephone. There would be no face-to-face consultation with the client and no office in which to meet.

May VLF lawyers maintain a virtual law practice?

Opinion #1:

Advertising and providing legal services through the internet is commonplace today. Most law firms post websites as a marketing tool; however, this opinion will not address passive use of the internet merely to advertise legal services. Instead, the opinion explores use of the internet as an exclusive means of promoting and delivering legal services. Many lawyers already use the internet to offer legal services, answer legal questions, and enter into client-lawyer relationships. While the Rules of Professional Conduct do not prohibit the use of the internet for these purposes, there are some key concerns for cyberlawyers who use the internet as the foundation of their law practice. Some common pitfalls include 1) engaging in unauthorized practice (UPL) in other jurisdictions, 2) violating advertising rules in other jurisdictions, 3) providing competent representation given the limited client contact, 4) creating a client-lawyer relationship with a person the lawyer does not intend to represent, and 5) protecting client confidences.

Advertising and UPL concerns are endemic to the virtual law practice. Cyberlawyers have no control over their target audience or where their marketing information will be viewed. Lawyers who appear to be soliciting clients from other states may be asking for trouble. See South Carolina Appellate Court Rule 418, "Advertising and Solicitation by Unlicensed Lawyers" (May 12, 1999)(requiring lawyers who are not licensed to practice law in South Carolina but who seek potential clients there to comply with the advertising and solicitation rules that govern South Carolina lawyers). Advertising and UPL restrictions vary from state to state and the level of enforcement varies as well. At a minimum, VLF must comply with North Carolina's advertising rules by including a physical office address on its website pursuant to Rule 7.2(c). In addition, VLF should also include the name or names of lawyers primarily responsible for the website and the jurisdictional limitations of the practice. Likewise, virtual lawyers from other jurisdictions, who actively solicit North Carolina clients, must comply with North Carolina's unauthorized practice restrictions. See N.C. Gen. Stat. §84-4. 2.1. In addition, a prudent lawyer may want to research other jurisdictions' restrictions on advertising and cross-border practice to ensure compliance before aggressively marketing and providing legal services via the internet.

Cyberlawyers also tend to have more limited contact with both prospective and current clients. There will rarely be extended communications, and most correspondence occurs via email. The question becomes whether this limited contact with the client affects the quality of the information exchanged or the ability of the cyberlawyer to spot issues, such as conflicts of interest, or to provide competent representation. See generally Rule 1.1 (requiring competent representation); Rule 1.4 (requiring reasonable communication between lawyer and client). Will the cyberlawyer take the same precautions (i.e., ask the right questions, ask enough questions, run a thorough conflicts check, and sufficiently explain the nature and scope of the representation), when communications occur and information is exchanged through email?

While the internet is a tool of convenience and appears to respond to the consumer's need for fast solutions, the cyberlawyer must still deliver competent representation. To this end, he or she should make every effort to make the same inquiries, to engage in the same level of communication, and to take the same precautions as a competent lawyer does in a law office setting.

Next, a virtual lawyer must be mindful that unintended client-lawyer relationships may arise, even in the exchange of email, when specific legal advice is sought and given. A client-lawyer relationship may be formed if legal advice is given over the telephone, even though the lawyer has neither met with, nor signed a representation agreement with the client. Email removes a client one additional step from the lawyer, and it's easy to forget that an email exchange can lead to a client-lawyer relationship. A lawyer should not provide specific legal advice to a prospective client, thereby initiating a client-lawyer relationship, without first determining what jurisdiction's law applies (to avoid UPL) and running a comprehensive conflicts analysis.

Finally, cyberlawyers must take reasonable precautions to protect confidential information transmitted to and from the client. RPC 215.

Inquiry #2:

VLF offers its legal services to pro se litigants and small law firms seeking to outsource specific tasks. VLF aims to provide more affordable legal services by offering an array of "unbundled" or discrete task services. Unbundled services are legal services that are limited in scope and presented as a menu of legal service options from which the client may choose. In this way, the client, with assistance from the lawyer, decides the extent to which he or she will proceed pro se, and the extent to which he or she uses the services of a lawyer. Examples of unbundled services include, but are not limited to, document drafting assistance, document review, representation in dispute resolution, legal advice, case evaluation, negotiation counseling, and litigation coaching. Prior to representation, VLF will ask that the prospective client sign and return a limited scope of representation agreement. The agreement will inform the prospective client that VLF will not be monitoring the status of the client's case, will only handle those matters requested by the client, and will not enter an appearance on behalf of the client in his or her case.

May VLF lawyers offer unbundled services to clients?

Opinion #2:

Yes, if VLF lawyers obtain informed consent from the clients, provide competent representation, and follow Rule 1.2(c). The Rules of Professional Conduct permit the unbundling of legal services or limited scope representation. Rule 1.2, Comment 6 provides:

The scope of services to be provided by a lawyer may be limited by agreement with the client or by the terms under which the lawyer's services are made available to the client. A limited representation may be appropriate because the client has limited objectives for the representation. In addition the terms upon which representation is undertaken may exclude specific means that might otherwise be used to accomplish the client's objectives. Such limitations may exclude actions that the client thinks are too costly or that the lawyer regards as repugnant or imprudent.

Rule 1.2, comment [7], however, makes clear that any effort to limit the scope of representation must be reasonable, and still enable the lawyer to provide competent representation.

Although this Rule affords the lawyer and client substantial latitude to limit the representation, the limitation must be reasonable under the circumstances. If, for example, a client's objective is limited to securing general information about the law the client needs in order to handle a common and typically uncomplicated legal problem, the lawyer and client may agree that the lawyer's services will be limited to a brief telephone consultation. Such a limitation, however, would not be reasonable if the time allotted was not sufficient to yield advice upon which the client could rely.

VLF's website lists a menu of unbundled services from which prospective clients may choose. Before undertaking representation, lawyers with VLF must disclose exactly how the representation will be limited and what services will not be performed. VLF lawyers must also make an independent judgment as to what limited services ethically can be provided under the circumstances and should discuss with the client the risks and advantages of limited scope representation. If a client chooses a single service from the menu, e.g., litigation counseling, but the lawyer believes the limitation is unreasonable or additional services will be necessary to represent the client competently, the lawyer must so advise the client and decline to provide only the limited representation. The decision whether to offer limited services must be made on a case-by-case basis, making due inquiry into the facts, taking into account the nature and complexity of the matter, as well as the sophistication of the client.1

End Notes

• The ABA Standing Committee on the Delivery of Legal Services has created a website encouraging the provision of "unbundled" legal services and assisted pro se representation. The Standing Committee believes unbundling is an important part of making legal services available to people who could not otherwise afford a lawyer. The website has also has compiled a list of state ethics opinions addressing limited scope representation. See www.abanet.org/legalservices/deliver/delunbund.html