Letter Head

Pennsylvania Collaborative Practice

ABA Ethics Opinion Approves Collaborative Law Practice

By Linda S. Pellish, Esquire

In August, 2007, the American Bar Association issued a formal opinion addressing ethical considerations in Collaborative Law Practice. The ABA Standing Committee on Ethics and Professional Responsibility stated:

ABefore representing a client in a collaborative law process, a lawyer must advise the client of the benefits and risks of participation in the process. If the client has given his or her informed consent, the lawyer may represent the client in the collaborative law process. A lawyer who engages in collaborative resolution processes still is bound by the rules of professional conduct, including the duties of competence and diligence. 1

The ABA Committee based its Opinion on the Model Rules of Professional Conduct as amended by the ABA House of Delegates through February, 2007. As noted in the Opinion, the laws, court rules, regulations, rules of professional conduct, and opinions promulgated in individual jurisdictions are controlling. 2The Committee analyzed the implications of the Model Rules on the Collaborative Practice of Law.

Collaborative Law is another form of dispute resolution model where parties each retain collaboratively trained attorneys to represent them to resolve legal disputes in a cooperative and transparent manner with the goal to reach settlement. Negotiations are interest-based and options are chosen to best meet the needs of the parties. The parties and their collaborative attorneys sign a participation agreement, also called a four-way agreement, at the onset of the process where they contract to negotiate an acceptable settlement without going to court, to engage in open communications and full disclosure, and to use problem solving techniques that will result in a mutually acceptable agreement. The four-way agreement includes a provision requiring that, if the process breaks down, the collaborative attorneys' representation of the parties will terminate and the parties must retain new counsel. Under the terms of the participation agreement, the collaborative attorneys will not represent the parties in any subsequent court proceedings.

Collaborative law practice began with Attorney Stu Webb in Minnesota in 1990 and has spread extensively throughout the United States, into Canada, Australia, and Europe. Collaborative law practice had its basis in family law but is now utilized in other areas of practice including probate and estates and civil litigation.

The ABA Opinion notes that several state bar opinions have analyzed collaborative practice and, with one exception, they have concluded that it is not inherently inconsistent with the Model Rules. 3 The ABA recognizes that most of the opinions treat collaborative law practice as one involving a limited scope representation and they address the duties of those lawyers in those situations, which include communication, competence, diligence, and confidentiality. The ABA notes that these opinions have been guarded and caution collaborative practitioners to be aware of potential ethical difficulties. 4

The ABA Opinion concludes that collaborative law practice and the four-way or participation agreement represent a permissible limited scope representation under Model Rule 1.2, with the collateral duties of competence, diligence and communication. Notably, the opinion rejects the suggestion that collaborative law practice sets up a non-waivable conflict under Rule 1.7(a)(2) 5 which is the basis of the sole disqualifying opinion from the Colorado Bar Association for finding that collaborative practice violates Colorado Rules of Professional Conduct. 6

Under Model Rule 1.2, a lawyer may limit the scope of this representation if it is reasonable under the circumstances and the client gives informed consent.7 The ABA notes that nothing in the Rule or its Comments suggests that limiting a representation to a collaborative effort to reach a settlement is per se unreasonable. On the contrary, they note that Comment [6] provides that A[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.8

For a client to give informed consent, the lawyer must consider the objectives of the client, and communicate information to explain the potential benefits and risks of the process, together with reasonably available alternatives to the limited representation.9 The lawyer must insure that he proves adequate information about the contractual terms governing the collaborative process included in the four-way agreement, the advantages and disadvantages of the process, and any alternatives available to the client. The lawyer must make sure that the client understands the provision in the four-way agreement that, if the parties do not reach a settlement, the collaborative lawyer must withdraw and the client must find another attorney. The collaborative lawyer cannot represent the party in any litigation.10 The ABA Opinion also notes that Rule 1.4(b) requires that a lawyer Aexplain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation11

The ABA Opinion addressed the view of the Colorado Bar Association and its Ethics Opinion which found that the practice of collaborative law violates Rule 1.7(b) of the Colorado Rules of Professional Conduct insofar as a lawyer participating in the process enters into a contractual agreement with the opposing party requiring the lawyer to withdraw in the event the process is unsuccessful.12 The Colorado Opinion viewed the collaborative practice as impermissible because they found that the four way agreement created a non-waivable conflict of interest under Rule 1.7(a)(2).13 The ABA disagreed with that Colorado Opinion because it concluded that it turned on a faulty premise. The ABA recognized that the four-way agreement is at the heart of the collaborative practice and includes a promise that both lawyers will withdraw from representing their respective clients if the collaborative process fails and the lawyers will not continue to represent the clients in litigation. The ABA did not disagree with the proposition that this contractual obligation to withdraw creates on the part of each lawyer a Aresponsibility to a third party@ within the meaning of Rule 1.7(a)(2). However, the ABA disagreed with the view that such a responsibility creates a conflict of interest under that Rule.14

As analyzed in the ABA Opinion:

the lawyer's responsibilities to. . .a third person or by a personal interest of the lawyer. A self-interest conflict can be resolved if the client gives informed consent, confirmed in writing, but a lawyer may not seek the client’s informed consent unless the lawyer >reasonably believes that [she] will be able to provide competent and diligent representation  to the client. According to Comment [1] to Rule 1.7, >[l]oyalty and independent judgment are essential elements in the lawyer’s relationship to a client.  As explained more fully in Comment [8] to that Rule, >a conflict exists if there is a significant risk that a lawyer's ability to consider, recommend or carry out an appropriate course of action for the client will be materially limited by the lawyer's other responsibilities or interests. . .The conflict in effect forecloses alternatives that would otherwise be available to the client 15

The ABA found Rule 1.7 Comment [15] to be instructive. The Rule provides that A[c]onsentability is typically determined by considering whether the interest of the clients will be adequately protected if the clients are permitted to give their informed consent to representation burdened by a conflict of interest. Thus, under Paragraph (b)(1) of Rule 1.7, representation is prohibited in the circumstances the lawyer cannot reasonably conclude that the lawyer will be able to provide competent and diligent representation16

As noted, in the ABA Opinion, responsibilities to third parties create a conflict with one's own client only if there is a significant risk that the responsibilities will materially limit the lawyer's representation of the client. The Opinion notes that it has been suggested that a lawyer's agreement to withdraw is essentially an agreement by the lawyer to impair her ability to represent the client.17 The ABA Committee disagreed with this opinion because they viewed participation in the collaborative process as a limited scope representation.18

The ABA Opinion found that if a client has given informed consent to be represented by an attorney in a process limited to collaborative negotiation toward settlement, the lawyer's agreement to withdraw if the process fails is not an agreement that impairs the lawyer's ability to represent the client, but rather is consistent with the client's limited goals for the representation. The agreement to a limited scope representation does not exempt the lawyer from the duties of competence and diligence, notwithstanding that the requisite competence and diligence are limited in accordance with overall scope of the representation of which the client is fully advised.19 Thus, they conclude that there is no basis to determine that the lawyer's representation of the client will be materially limited by the lawyer's obligation to withdraw if a settlement cannot be reached. Without the risk of such a material limitation, the ABA Committee found that no conflict would arise between a lawyer and client under Rule 1.7(a)(2). The ABA concluded that there would be no foreclosing of alternatives, i.e., consideration and pursuit of litigation, otherwise available to the client because the client had limited the scope of the lawyer's representation to a collaborative negotiation of the settlement.20

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Linda S. Pellish is a partner with Pellish and Pellish, Pottsville, Pennsylvania, where she has been in practice since 1993. She is a trained collaborative attorney and certified mediator. She incorporates the collaborative practice of law and mediation into her general practice and, in doing so, offers choices of options to clients seeking resolutions of their legal disputes in family law settings and in civil practice.

Pellish served as a Co-chair of the Collaborative Law Subcommittee of the ADR Committee of the Pennsylvania Bar Association from 2008 to 2010. She is currently a member of Pennsylvania Collaborative Practice (PaCP), which she so-founded and co-chaired from 2006 to 2008, and is also a member of the Collaborative Professionals of Central Pennsylvania (CPCP). She is a member of The International Academy of Collaborative Professionals (IACP). Her website is www.pellishlaw.com. In addition, for more information about collaborative practice go to www.pacollaborativepractice.com, www.collaborativelawpa.com and www.collaborativepractice.com.

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1 ABA Formal Ethics Opinion 07-477. 8 2007 by the American Bar Association. Reprinted with permission. Copies of ABA Model of Rules of Professional Conduct, 2006 Edition are available from Service Center, American Bar Association, 321 North Clark Street, Chicago, IL 60610, 1-800-285-2221.

2 ABA Comm. on Ethics and Professional Responsibility, supra; see also supra text accompanying note 1.

3 ABA Comm. on Ethics and Professional Responsibility, Formal Opinion 07-447 (2007) supra; see also supra text accompanying note 7 listing references to opinions issued by Colorado, Kentucky, New Jersey, North Carolina and Pennsylvania, and also identifying California, North Carolina, and Texas among states with special rules for Collaborative Law Practice. For the Pennsylvania Opinion see Pennsylvania Bar Ass=n Comm. on Legal Eth. & Prof=l Resp. Inf. Op. 2004-24 (May 11, 2004), available at http://www.collaborativelaw.us/articles/Ethics_Opinion_Penn_CL_2004.pdf.

4 ABA Comm. on Ethics and Professional Responsibility, supra.

5 ABA Comm. on Ethics and Professional Responsibility, supra.

6 ABA Comm. on Ethics and Professional Responsibility, supra.; Colorado Bar Ass=n. Eth. Op. 115 (February 24, 2007).

7 ABA Comm. on Ethics and Professional Responsibility, supra.

8 ABA Comm. on Ethics and Professional Responsibility, supra

9 ABA Comm. on Ethics and Professional Responsibility, Formal Opinion 07-447 (2007); see also supra text accompanying note 9.

10 ABA Comm. on Ethics and Professional Responsibility, supra.

11 ABA Comm. on Ethics and Professional Responsibility, supra; see also supra text accompanying note 9.

12 Colorado Bar Ass=n. Eth. Op. 115 (February 24, 2007).

13 ABA Comm. on Ethics and Professional Responsibility, supra.

14 ABA Comm. on Ethics and Professional Responsibility, supra.

15 ABA Comm. on Ethics and Professional Responsibility, supra; Model Rules of Professional Conduct Rules 1.7(b)(1) and 1.7(b)(4)(2007).

16 ABA Comm. on Ethics and Professional Responsibility, supra; Model Rules of Professional Conduct Rule 1.7 Comment [15].

17 ABA Comm. on Ethics and Professional Responsibility, supra, citing Colorado Bar Ass=n. Eth. Op. 115 (Feb. 24, 2007) note 7.

18 ABA Comm. on Ethics and Professional Responsibility, supra; see also text accompanying note 15.

19 ABA Comm. on Ethics and Professional Responsibility, supra.

20 ABA Comm. on Ethics and Professional Responsibility, supra; see also supra text accompanying note 16.

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