Virtual Law Offices in New Jersey
I am a strong advocate of virtual law offices and non-traditional law practices. This comes as no surprise to my clients and colleagues, as well as judges and state officials.
When I receive reams of files from clients and opposing counsel, I scan everything. I try to limit my paper files as much as possible. Keeping everything in electronic format makes things easier to organize and track.
When I correspond with the court, state officials, clients, and opposing counsel, I try to use email whenever possible. I don’t have a fax machine — I don’t understand why people still use fax machines! Email makes everything much easier to organize and track. It’s good for the trees too.
When I meet with clients, I try to be as flexible as I can be. I meet clients in their homes, their offices, in libraries, and hot spots at mutually convenient times. This is especially true when a client works and can only meet during the lunch hour or after work.
So, when I learned that the New Jersey Supreme Court approved new rules that essentially abolished the bona fide office requirement, I was delighted. My three years of waiting was finally over.
Here’s what happened.
Back on March 25, 2010, a joint opinion by the Advisory Committee on Professional Ethics and Committee on Attorney Advertising opined that virtual offices violate the bona fide office rule set forth in NJ Rule 1:21-1(a), which required that a New Jersey attorney maintain a bona fide office for the practice of law. The joint opinion defined a bona fide office as:
a place where clients are met, files are kept, the telephone is answered, mail is received and the attorney or a responsible person acting on the attorney’s behalf can be reached in person and by telephone during normal business hours to answer questions posed by the courts, clients or adversaries and to ensure that competent advice from the attorney can be obtained within a reasonable period of time.
In essence, the rules required that a lawyer must have a brick-and-mortar office, where mail is received, a landline telephone is utilized, and a secretary or at least a person to answer the phones are available during business hours “to answer questions” that anyone might have.
The opinion went on to give the impression that attorneys must be available when clients walk into the office — analogous to emergency physicians who are always on call.
The opinion appeared oblivious to the many ways in which lawyers keep in touch with clients, opposing counsel, and the courts — like email, cell phones, texting, Skype, and so forth.
It was clear to me that the bona fide office requirement benefited only one group: Big law firms that have plenty of money to hire secretaries and associates and rent physical space to store their paper files.
Solo practitioners and small firms don’t benefit from bona fide office rule. And if they don’t benefit, neither does the general public, particularly the lower and middle class.
The reality is that some portion of an attorney’s hourly rate goes to overhead. Overhead costs are passed on to the clients in some fashion. If overhead costs could be reduced or cut out completely, attorneys’ fees could be more affordable. In fact, if there were no need for overhead, there might be more competition among attorneys for the same client.
In addition to benefiting big law firms, I felt that the joint opinion discriminated against solo practitioners who want to keep costs low for their clients, female attorneys who need or want to work from home, recent law graduates who want to go solo, part-time lawyers who have a full time job elsewhere, and lawyers with disabilities who may have difficulties attracting clients.
Suffice it to say, I was unhappy with the opinion set forth in ACPE 718/CAA 41.
So, in April 2010, I filed a petition with the New Jersey Supreme Court to challenge ACPE 718/CAA 41. In my brief, I made a number of arguments and urged the NJ Supreme Court to overrule the opinion. One of these arguments was that the joint opinion imposed a hardship on solo practitioners, particularly recent law graduates who started (or want to start) their new practice, either out of want or necessity.
The reality is that for solo pratictioners who recently graduated from law school, it is expensive to rent an office; it is expensive to hire a secretary; and it is not feasible for an attorney to be present in the office every time a client walks in the door.
The Attorney General of the State of New Jersey filed a response to my petition, and I filed a reply. In August 2010, the NJ Supreme Court dismissed my petition. However, all was not lost. Although it had dismissed the petition, the NJ Supreme Court ordered the matter be referred to the Professional Responsibility Rules Committee to consider the arguments that I made in my brief and to submit a report to the Court whether virtual offices should be permitted in New Jersey. This was promising.
Two years later, in February 2012, the PRRC issued a report that was very amenable to virtual law offices.
Then, in January 2013, the NJ Supreme Court approved a new set of rules that went further than the PRRC’s report. The new rules essentially abolishes the bona fide office requirement. Although there still is a requirement that lawyers designate an actual location where files are kept, the bona fide office requirement as we knew it vanished.
The New Jersey Law Journal and the Bureau of National Affairs reached out to me for a comment. You can read some of my comments here.
It goes without saying that the new rule is a huge step forward: The new rule is now in pace with technology. The NJ Supreme Court and the PRRC acknowledge the role that technology plays in our lives. Lawyers use all kinds of technology to keep in touch with their clients and with opposing counsel and the courts — email, Skype, texting, and so forth.
The new rules are a win-win for lawyers and clients. Lawyers, particularly solo practitioners, can reduce their overhead costs by working out of their homes or at shared offices.
Clients also benefit. Since overhead costs can be kept to a minimum, solo practitioners can offer the same or better rates to their clients over a much longer period of time.
None of this is to say that lawyers have less responsibility than they did under the old rules. On the contrary. Lawyers who choose to abandon the fixed, physical office still have certain responsibilities. Among other things, lawyers will be required to (1) establish and maintain a system of prompt and reliable communication with clients, attorneys, and the courts (which may include email), (2) be available for in-person meetings at mutually convenient times and places, (3) and designate a physical location for inspection of files and records, hand deliveries, and service of process.
Now, that last requirement might sound a little awkward, particularly if solo practitioners keep all files in electronic format. I am not entirely certain if it is possible to have a completely paper-free office — I am certainly not there yet — but it seems reasonable at this point to assume that most lawyers can designate a particular place where paper files can be inspected on a short notice. Such files could be original copies of signed retainer agreements or original copies of settlement agreements.
If a lawyer in NJ has a completely paper-free office, however, I certainly don’t think it is problematic to explain to an auditor that “Everything I have is on my computer. You are free to inspect it.”
I am fairly certain that we will see ethics questions pop up from time to time with regards to the new rules. That is natural and to be expected. There is almost always an ethical issue that no one could have anticipated. But I think it is safe to say that we will never go back to the bona fide office requirement.
Clients and lawyers should applaud the NJ Supreme Court for acknowledging the role of technology and the need for more lawyers to charge reasonable rates.
The new rules take effect February 1, 2013.