How one state handles ­virtual law firms

Nicole Black, BridgeTower Media Newswires

Cloud computing — where electronic data is stored off-site on servers owned and maintained by a third party — is quite common in 2017. The proliferation of mobile devices, which are essentially useless in the absence of cloud computing, has helped contribute to this trend. Another relevant factor is the convenience and flexibility offered by web-based computing. When data is stored in the cloud, it can be accessed from anywhere using any internet-enabled device, at any time, day or night.

Because of the many benefits offered by cloud computing, more and more lawyers are using cloud-based software to store and access documents, track time and billing, manage their contacts and calendars, accept online credit card payments from clients, and interact and collaborate with clients, experts, co-counsel and more. Lawyers are even forgoing brick-and-mortar law firms and launching virtual law practices.

Because of these developments, ethical committees across the country are weighing in on lawyers using cloud computing in their practices, with more than 25 permitting it thus far. In June, Ohio joined their ranks when the Ohio Board of Professional Conduct issued Opinion 2017-05.

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Two issues considered

There were two issues considered in the opinion: “1) Is it proper for a lawyer to provide legal services exclusively, or almost exclusively, via a “virtual law office?” 2) Is it proper for a lawyer operating primarily as a “virtual law office” to lease a shared, nonexclusive office space for purpose of occasional face-to-face meetings with clients, or receiving mail?”

The board acknowledged that lawyers have a continuing duty to maintain technology competence, explaining that “a VLO lawyer should possess a general knowledge of the security safeguards for the technology used in the lawyer’s practice, or in the alternate hire or associate with persons who properly can advise and inform the lawyer.”

The board confirmed that Ohio lawyers are permitted to use cloud computing technologies to run virtual law practices. In order to comply with their ethical obligations, lawyer must take reasonable efforts to prevent the unauthorized disclosure of confidential client data. Steps lawyers should take include analyzing “ several nonexclusive factors including 1) the sensitivity of the information, 2) the likelihood of disclosure if additional safeguards are not employed, 3) the cost of employing additional safeguards, 4) the difficulty of implementing the safeguards, and 5) the extent to which the safeguards adversely affect the lawyer’s ability to represent clients.”

Lawyers must also vet third-party cloud computing providers and confirm that the vendor understands that lawyers have a duty of confidentiality, and must also verify that the vendor will maintain and regularly back up law firm data. Finally lawyers must “(r)equire that the vendor give the lawyer notice of subpoenas for client data, nonauthorized access to the stored data, or other breach of security, and a reliable means of retrieving the data if the agreement is terminated or the vendor goes out of business.”

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Obligation to clients

Next the board moved on to address a virtual attorney’s obligation to clients. According to the board, due to the unique nature of virtual law offices, lawyers must discuss the technologies that the firm uses with clients, along with the communication methods available, and ascertain which ones are amenable to the client. These determinations should be memorialized in the client fee agreement.

Finally, the board turned to the issue of the office setup of virtual law firms, concluding that a physical office is not required in Ohio. However, an office address must be provided on letterhead and elsewhere which can consist of “the lawyer’s home or physical office, the address of shared office space, or a registered post office box.” And, the use of shared office space with both lawyers or nonlawyers is permissible as long as steps are taken to maintain the confidentiality of client files.

Overall, this opinion is in line with those issued in other jurisdictions and takes a reasonable stance on lawyers using cloud computing software, such as law practice management software, as part of a virtual law office setup.
Notably, Ohio allows provides lawyers with flexibility when it comes to listing an office address, permitting the use of a post office box, rather than requiring virtual lawyers who have no physical office space to use their home address, as some justifications do.

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Nicole Black is a director at MyCase.com, a cloud-based law practice management platform. She is also of counsel to Fiandach & Fiandach in Rochester, New York, and is a GigaOM Pro analyst. She  can be reached at niki@mycase.com.
 

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