VIRTUAL PRACTICE: HOW ONLINE CAN GO OVER THE LINE

Transcription

1 VIRTUAL PRACTICE: HOW ONLINE CAN GO OVER THE LINE AL HARRISON & RANDY CLARIDGE Harrison Law Office, P.C. Houston, Texas State Bar of Texas 26 th ANNUAL CONSUMER BANKRUPTCY LAW COURSE June 3-4, 2010 Dallas CHAPTER 15

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3 Virtual Practice: How Online Can Go Over the Line Al Harrison & Randy Claridge Harrison Law Office, P.C. Houston, Texas Al Harrison Randy Claridge Harrison Law Office, P.C. [ 1

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5 AL HARRISON Harrison Law Office, P.C. 411 Fannin Street, Suite 350 Houston, Texas (tel) (fax) Law Practice: Patent Law & Intellectual Property Matters; Computer & On-Line Law Education: City College of the City of New York: B. Eng (cum laude) New York University: M.S. Oper. Res (summa cum laude) University of Houston Law Center: J.D (Research Fellow 1984) Professional Activities Board of Governors, Downtown Club Houston Chair, SBOT Computer & Technology Section ; Council Chair, SBOT Computer Law Committee, Intellectual Property Law Section Council, SBOT GP Solos/Small Firm Section SBOT Law Practice Management Committee American Inns of Court, Garland Walker Chapter Editorial Board, HBA The Houston Lawyer ; Guest Co-Editor, IP/Litigation Issue 2007 Chair, HBA Law Practice Mgt. Section ; Chair, HBA Computer And Online Law Section HBA President's Award SBOT Computer & Technology Section Lifetime Achievement Award 2007 Board of Directors, Houston Intellectual Property Law Assoc Chair, HIPLA Computer Law Committee Life Fellow, Texas Bar Foundation & Houston Bar Foundation Fellow, College of Law Practice Management President, Houston Area League of PC Users (HAL-PC) Advisory Board, PC World Magazine Law-Related Publications & Presentations Speaker, SBOT Emerging Legal Issues & Internet Course, Internet & Privacy 2009 Panelist, SBOT, Perfecting Your Practice Course, Law Practice Virtualization 2009 Speaker, Houston Bar Assoc. Billing & Collecting 2009 Panelist, SBOT, Perfecting Your Practice Course, Billing & Collecting 2009 Panelist, San Antonio Bar Assoc, TechLawSA Course, Law Office Software-Taming Paper Tiger 2008 Panelist, SBOT Webcast, Maintaining A Legal Calendar & Docket 2008 Panelist, SBOT NailingIt Course, Establishing SBOT-Compliant Website 2008 Panelist, Austin Bar Assoc & SBOT Webcast, Establishing SBOT-Compliant Website 2008 Co-Author, The Houston Lawyer Magazine: Trademark-Surfing in Domain Name Space 2007 Speaker, Houston Solos & Galleria Chamber of Commerce Fail-Safed Electronic Office 2007 Speaker, Houston Bar Assoc. Empowering Your Law Practice: Online Strategies & Techniques 2006 Speaker, El Paso Women s Bar Assoc. Technology Treasure Trove 2006 Speaker, SBOT BarTech Course Writer/Reviewer, Law Office Computing Magazine Faculty, Center For Texas Judiciary Speaker, Advanced Computers Courses, Texas Center for the Judiciary Faculty, STCL Resolution Forum ADR Courses Speaker, Texas Aggie Bar Conference 2000 Speaker, Intellectual Property & the Internet" Assoc. Microsoft Solution Providers 1999 Speaker, Technology in the Year 2000" Texas Society of CPAs 1999 Bovay Lecture, Intellectual Property Ethics" Texas A&M University, Engineering School 1999 Panelist, Houston Business Journal Forum on E-Commerce 1998 Panelist, The Texas Lawyer Panel of Law Office Technology 1998 Director, SBOT Lawyers and the Internet Seminar 1997 Director, STCL Internet Course 1996 [4/2010]

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7 TABLE OF CONTENTS I. INTRODUCTION...3 II. CURRENT TOOLS OF THE TRADE...3 A. HARDWARE...3 i. Desktop Computers...3 ii. Laptops...3 iii. Netbooks...4 iv. Communications...4 B. CLIENT DATA MANAGEMENT...4 i. In-Office...4 ii. Online...5 iii. Confidentiality Requirements...6 iv. Inadvertently Crossing the Line...7 C. ONLINE EXECUTION OF DOCUMENTS...8 D. UNITED STATES PATENT & TRADEMARK OFFICE...9 i. Patent Process...9 ii. Trademark Process...9 III. STATE BAR RULES AND RULES OF PROFESSIONAL CONDUCT...9 IV. OTHER STATES...10 A. NORTH CAROLINA...10 B. NEW JERSEY...10 V. CONCLUSIONS

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9 I. Introduction The Virtual Law Office (VLO) at first glance appears to present a radically new approach to the practice of law. But, as will become apparent, ethical obligations remain regardless of the tools invoked while engaging in law practice. A VLO, in pure vanilla form, is a professional law practice that is conducted solely on the electronic landscape and solely via electronic communications. Inherently, under such an online environment, attorneys and clients have access to files virtually anywhere an Internet connection is available, while typically being devoid of having a single physical ( brick-and-mortar ) address that functions as a principal office. Why consider working in a VLO? A VLO has the potential to provide attorneys heretofore unknown, if not impossible, flexibility with regard to selection of work environment and implicated hours of operation while simultaneously providing clients extended services and greater access to pertinent files. Of course, the antithesis of a VLO is perhaps an antiquated image of a law practice relying upon clerical staff for typing dictated legal documents and requiring in-person appointments whenever legal services are rendered regardless of the matter at-hand. Interestingly, nearly every contemporary law firm relies upon a combination of electronic communications, including landline telephone, cellular phones, facsimile, , video-conference, or online document storage while rendering legal services. Therefore, while few firms operate solely online, many are nonetheless routinely using tools which inch the law firm ever closer to conducting legal activities substantially online. II. Current Tools of the Trade a. Hardware i. Desktop Computers A single desktop computer can store the equivalent of several file rooms of client files and can enable lawyers to remotely access office networks from other computers without incurring maintenance and support fees to vendors or to Internet Service Providers ( ISPs ) for such access. Generally, desktop computers are about twice as fast as comparable notebook computers operating essentially at the same level of performance. Reliable and effective physical security of the premises actually housing a network of desktop computers is essential for effectively safeguarding clients' confidential data. 3 Drawbacks associated with desktops include the need for floor and concomitant desk space to adequately accommodate such hardware. In order to remotely access (in the vernacular, to remote into ) a desktop computer, the computer usually should be powered on (the on-off switch should be situated in the on position), wherein overhead 24-by-7 operation consumes prerequisite electricity. Unauthorized parties being physically proximal to these desktops may be able to view an ongoing remote session if the session is not configured to blank implicated desktop screens. Since desktops are not portable, if attorneys need to use another computer when away from the office, then a laptop or netbook will be necessary. Another option, albeit being inherently less safe and secure, it to remote into a network via a publicly-available desktop at hotels, libraries, etc. If an Internet connection is not available at a particular remote location, then attorneys should anticipate which files and documents will be needed and either offload the appropriate files to the portable computer or to a thumb drive or CD preferably password-protected and/or encrypted. ii. Laptops Laptop and notebook computers inherently provide portability. Many attorneys actually use a laptop as the primary computer which may be emplaced in a docking station not only in the brick-and-mortar office, but also at home or elsewhere. While away from the office and away from home, docking stations are usually unavailable and online connections are achieved ad hoc depending upon the availability of electrical power, broadband access, etc. So, obviously, a VLO should be equipped with sufficient mobile infrastructure to function with minimal available resources such as electricity; otherwise, the VLO will be inadvertently closed. Data files should preferably be synchronized between an office network and laptops to allow a mobile lawyer to review and enhance documents while out of the brick-and-mortar office (if one exists) and especially if the lawyer will be expected to prepare documents offline. On the other hand, if high-speed and secure Internet connections will be available, then the mobile lawyer may elect to remote into the office and either download prerequisite files to the local laptop or to simulate being present in the office ( virtual presence ). Drawbacks of laptops include increased cost per computer when compared to desktop systems with similar performance. There must be a routine backup protocol for any computer network which contemplates offsite backup storage. Especially if an attorney's

10 practice relies exclusively upon a single laptop that is ported to and from the brick-and-mortar office, i.e., that travels with the attorney, implementing a regular backup protocol, including offsite backup, is essential. This solo environment precludes being able to remote into the office while being located elsewhere, except if backup files are accessible perhaps under exigent circumstances. Since confidential data will be lost if an attorney's laptop is stolen, destroyed, or lost, it is imperative to secure the data stored thereon with passwords and/or encryption, and to diligently safeguard the integrity and well being of the laptop while traveling. iii. Netbooks Benefits and drawbacks of netbook computers are essentially the same as laptops. But, in view of the inherent light weight and minimal footprint, not to mention modest computing power, netbooks are ideally suited for remoting into an office network. Ergo, being designed to be dependent upon other resources, Netbooks require cellular, WI-FI, or Ethernet access to the Internet at all times. Notwithstanding, netbooks have small screens and keyboards, so that installation and use of typical application software is inherently inconvenient and not recommended. iv. Communications Contemporary law practice communications takes many forms, including: cellphone, landline telecommunications, Voice Over Internet Protocol ("VOIP"), video conferencing, , texting, paper letters, or in person face-to-face encounters. Cellphones and landlines are the most common and well known methods of verbal communication, but VOIP and video conferences are rapidly gaining popularity. Modern business phone solutions offer lawyers the ability to literally travel with the office phone, plug it into a phone jack, and receive telephone calls as if the lawyer were perched at a desk in the law firm's brick-and-mortar office. Other options include the use of a headphone/microphone on a lawyer's computer to place and receive calls or to invoke use of an Internet phone which plugs into a law firm computer or which communicates wirelessly with a law firm's Internet router. High-definition webcams for enabling videoconferencing are inexpensive and can be readily implemented. Using any one of several free video services, such as Skype, Google, and Yahoo!, enables lawyers to communicate via video-conference with clients or potential clients, or colleagues or adversaries across time and distance boundaries thereby saving time and money by avoiding unnecessary travel 4 expenses and other logistics problems for all parties concerned. b. Client Data Management i. In-Office It is clear that, with the exponential growth of information that regularly inundates the practice of law, data management demands are increasing at a phenomenal rate. How to deal with the seemingly unavoidable deluge of paper? Instead of receiving piles of paper pertaining to contracts and the like, contracts might be signed, scanned, and then ed rather than contemporaneously being signed in person as has been the standard procedure since the days of yore. Current copy machines are being delivered equipped with built-in scanning capabilities which automatically generate PDF files. Research documents are typically contemporaneously downloaded from online sources onto local hard drives or network storage devices. Accordingly, to manage law office data requirements, lawyers should preferably invoke one or more of the following approaches to entertain data storage challenges: (a) Individual computers; (b) Network Server or Network Attached Storage; and (c) Cloud Computing. Data stored on an individual computer is the simplest data storage solution. Every Microsoft Windows based computer purchased is innervated with the familiar "My Documents" folder (or the equivalent). Needless to say, data stored on a single desktop computer or on a mere portable computer, probably laden with several years of confidential client information and proprietary law office information, is unduly vulnerable to inadvertent disclosure and, hence, is unacceptable. If the data drive integrated with the individual computer should fail, either mechanically or as the result of an intrusive electronic virus or the like, then virtually all of this valuable data would be irrecoverably lost! Of course, this disaster would be avoided if backup copies were regularly created and preferably stored in a variety of different physically and geographically disparate locations. A Network Server or a so-called "Network Attached Storage" (abbreviated "NAS") device is traditionally the means by which small, medium, and even large companies can efficiently store and retain electronic data. A NAS device is ideally suited for use by solo or small firms; it consists of two or more hard drives interconnected with a local area network, redundantly storing data, and physically contained on-site within a small enclosure. If one of the "twin" hard drives fails, then the other hard drive seamlessly takes over data management tasks with no data loss. Not surprisingly, but at higher cost, with configurations of more than

11 two hard drives, a NAS can increase read/write performance and/or store incremental backup copies for immediate use if a file were inadvertently deleted or altered. Network Servers can range from a single shared desktop computer to an entire server rack filled with cascaded customized computers and hard drives. A Network Server is sometimes required by specific software that requires a dedicated computer to function as a central server. For such central server situations, a NAS device might not be adequate inasmuch as NAS devices do not usually have a Microsoft Windows or Apple Mac operating system, but a LINUX OS. As with an individual computer, if a NAS or a Network Server is stolen or destroyed, so too is data residing on the implicated computer hardware. A common solution to remedy this predictable occurrence is to have another NAS device or Network Server located in a different geographic area to which data is copied on a regular preferably, daily basis. ii. Online Cloud computing, sometimes referred to as Software as a Service (abbreviated "SaaS"), is a current technological trend that, while permeating the electronic landscape for several years, has recently come to the virtual office forefront. Rather than maintaining software applications and computer hardware on a central server or on a NAS device, SaaS has allocated such tasks to third-party vendors. Regardless of the third-party vendor chosen, the risks and benefits to the law firm are fundamentally the same: risks include lack of access to law firm data if Internet access is lost by either the law firm or by the storage service provider. Risks of Cloud Computing Loss of data or access thereto can abruptly occur if the storage service provider ceases doing business, files for Bankruptcy protection, or otherwise terminates operations. Also, storage service fees might increase sharply after the initial contract term, whereupon the law firm is left hanging in the wind at the mercy of a potentially capricious and irresponsible data storage vendor. Even if service fees do not increase, the law firm will still be compelled to pay monthly or yearly fees in order to access its own data. Transferring data from one data storage service provider to another is always an option, but may well be time-consuming and probably would involve a significant time-investment. In addition to these general access and reliability issues, law firms must always address the issue of security of client confidential information under the 5 auspices of third-party data storage service providers. On its face, cloud computing means that proprietary data could and probably is stored literally anywhere in the world. While geographic diversity is typically an admirable objective, what assurances does the law firm have that unauthorized access to its proprietary information is not occurring in some unknown foreign country or otherwise? Benefits of Cloud Computing The benefits of cloud computing include low computing power requirements for desktops, laptops, and netbook computers if (shared) cloud-based software is invoked. Law firm data may be readily accessed by authorized personnel anywhere that Internet connectivity exists. Presumably, law firm data is routinely stored data in different geographical areas throughout the world so that data redundancy is maximized by the data storage service provider. If any law firm computer installation were physically destroyed, then, theoretically, no data would be lost. Indeed, stored law firm data could be instantaneously downloaded from the cloud to resurrect local databases. Since cloud computing allocates hardware and software updates and concomitant maintenance tasks to a third-party, there is no need for a law firm to be concerned about IT issues or to employ IT personnel. Logistics services have also evolved with the release of Google's IMAP-enabled cloud-based service. All s are stored on Google Servers. Individual users can view s using an Internet browser or using an client such as Microsoft Outlook or Open Office Thunderbird. The primary benefit of using an IMAPenabled service is that s are always available online regardless of the specific computer invoked to download and/or to access the s. Additionally, Google offers access to a paid (nominal annual cost) archiving service called Postini which provides a rolling archive of all accumulated s. As a failsafe, if any s are accidentally deleted or if an archive must be created in response to a discovery request, then the Postini Service can recover the inadvertently deleted and can create a fixed, filtered copy of s relevant to discovery requests. Another consideration when accessing with an Internet browser is whether the web session is encrypted. An encrypted Internet session is usually signified by your URL starting with the prefix "https" rather than "http"; coupled with the presence of a closed-padlock icon in the browser's lower right screen. An encrypted web session scrambles data while it is in transit to and from the provider's website

12 thereby preventing unauthorized viewing of confidential and privileged communications while in transit between Mail Servers. Still another alternative, apparently routinely invoked by financial institutions and increasingly by cloud computing service providers is to establish a folder on a server that a financial institution owns and/or controls. Clients are sent notification of the existence of a new communication, but the clients must follow a hyperlink and then login to a secure account in order to read the contents of the confidential communication. Presumably taking this "snake path" to a legitimate assures that the communication is legitimate and tamper-free. iii. Confidentiality Requirements The confidentiality standards of the attorney-client relationship enable an open and honest discussion between clients and their respective counsel, and generally promote resolution of clients' legal matters. Except as otherwise permitted or required, a lawyer shall not knowingly [r]eveal confidential information of a client or a former client to: (i) a person that the client has instructed is not to receive the information; or (ii) anyone else, other than the client, the client s representatives, or the members, associates, or employees of the lawyer s law firm. Tex. Disciplinary R. Prof l Conduct 1.05(b) (2005). A common issue arises when dealing with routine duplication and transport of confidential client information. Specifically, if a third-party is provided access to confidential client information for the purpose of providing a service to the lawyer, has a breach of Disciplinary Rule 1.05 occurred? The Supreme Court of Texas Professional Ethics Committee Opinion Number 572, June 2006, addresses the use of an independent contractor, such as a copy service, hired by the lawyer to perform services in connection with the lawyer s representation of the client. The Committee concluded: that a lawyer's delivery of materials containing privileged information to an independent contractor providing a service, such as copying, to facilitate the lawyer's representation of a client (and not for the purpose of disclosing information to others) does not constitute "revealing" such privileged information within the meaning of Rule 1.05, provided that the lawyer reasonably expects that the independent contractor will not 6 disclose or use such items or their contents except as directed by the lawyer and will otherwise respect the confidential character of the information. In these circumstances, the independent contractor owes a duty of confidentiality both to the lawyer and to the lawyer's client. Although not explicitly addressed by the Committee, use of independent contractors in the form of Internetbased services would not necessarily constitute revealing of privileged client information. However, lawyers preferably should sustain a reasonable expectation that particular Internet-based service providers will neither disclose nor use such privileged information, except as specifically directed by the lawyer. In addition to Internet-based data security measures, lawyers should take care to take reasonable measures to safeguard the computing equipment housed in a brick-and-mortar office or the like because a single laptop computer may contain all (or a copy of all) of the files of a law practice; misplacement or theft of one computer could potentially compromise multiple client files and undermine the attorney-client relationship. Safe computing or safe computer use requires a basic understanding of a plethora of implicated security issues. Without adequate security measures, any intruder who has access to a computer environment will have access to all data stored throughout the electronic landscape. Names, addresses, phone numbers, social security numbers, credit card information, legal contracts, and related personal and proprietary information are often stored on home and on office and on portable computers. The two most common means of securing sensitive information are passwords and encryption. Password Protection Passwords can be applied in the form of a login screen for a computer and/or applied to folders and/or individual files. The primary benefit of passwords is ease of implementation. But, a downside of passwords is the likelihood of there being a large number of passwords to be remembered and recalled in a single workday. Notwithstanding, using only one or two common passwords is not recommended, even though easier to remember, because an intruder who discovers a common password can abruptly gain access to most, if not all, confidential and privileged information throughout the VLO.

13 Happily, some business-level laptop and desktop computers currently are delivered with built-in biometric tests to assure limited access to the laptop and/or desktop computers. For instance, Lenovo and other laptops have optional facial recognition software for identifying authorized users by comparing a facial image to prerecorded images on-file. Similarly, fingerprint readers can be used to associate a particular user with numerous passwords, thereby lessening the burden of routinely recalling several passwords. A disadvantage of both facial recognition software and fingerprint reader software/hardware is that users often forget seldom used passwords and, when prerequisite biometric-scanning hardware malfunctions, users might be temporarily locked out of their data until the biometric screening protocol is satisfied or until the overriding passwords are recollected. Encryption Protection An alternative to password based security is the use of encryption technology. Encryption is the process by which data is transformed from a known, readable form ("encoded") into a jumbled, unintelligible form. This encoding transformation uses a key consisting of a long string of characters. This character string constitutes the Rosetta Stone for encryption: only the specific string of characters used to originally transform the data can decode the encrypted data back into unencrypted, humanly-readable format. The key benefit of encryption is the strong level of security applied to individual files, folders, or computers. The primary drawback of encryption is that permanent data loss can occur if the specific encryption key used to encode the data is corrupted or purged. Another drawback of encryption is that most encryption keys are set to expire at some future date. In other words, at some distant point in the future, e.g. 10 years later, the original encryption keys will expire, thereby rendering the encrypted data permanently inaccessible. One possible solution for dealing with such encryption-expirations is to periodically decode encrypted data and then immediately apply a new encryption key or perhaps to destroy the data as dictated by law firm data retention policies. Also, it should be noted that some encryption protocols allow the user to print encryption keys for storage in paper format, thereby enabling physically safeguarding the encryption keys to be archived. Needless to say, this encryption-archiving protocol is only a fail-safe if the decoding keys, per se, are safeguarded! Cloud computing environments typically require encrypted Internet connections achieved by entering a user name and password before allowing access to secure data. Some government services such as patent and trademark filings and inquiries under the auspices 7 of the United States Patent and Trademark Office require the storage of security credentials, e.g., digital signatures, on a local computer. Security credentials are tied to a specific user and access to secure websites is only granted if the security credential is recognized. Otherwise, access is not authorized. iv. Inadvertently Crossing the Line Cloud computing offers several advantages over inoffice computers. First and foremost is the ability to access client information from any Internet connected personal computer or smartphone. Unfortunately, although the content of the data is no different from a traditional in-office solution, the perils associated with entrusting confidential client information to third-party Internet-based vendors are very different indeed. A few common cloud computing tools and services include: Facebook, Google Docs, Microsoft Office Live, Clio, Carbonite, Mozy, LogMeIn, and GoToMyPC. Facebook Facebook ( is currently the world s leading social-networking service provider with more than 500 million users worldwide. See last accessed May 18, Individuals and businesses can create a profile page within Facebook which is automatically shared with other Facebook users who have been identified as friends through an invitation process. Originally, Facebook limited friend information to only select individuals and/or select organizations. Unfortunately, Facebook has consistently altered its terms of service and privacy settings to reveal greater and greater amounts of what was previously deemed to be semi-private information presumably to capitalize on an unprecedented amount of demographic information. According to the current Facebook Privacy Policy ( effective April 22, 2010: Information set to everyone is publicly available information, just like your name, profile picture, and connections. *** The default privacy setting for certain types of information you post on Facebook is set to everyone. You can review and change the default settings in your privacy settings. If you delete everyone content that you posted on Facebook, we will

14 remove it from your Facebook profile, but have no control over its use outside of Facebook. Lawyers and Law Firms should refrain from using Facebook in a professional capacity because the publicly available list of connections, i.e. friends, will almost certainly reveal a list of current or former clients. Furthermore, the Facebook Privacy Policy explicitly states that Facebook cannot guarantee that only authorized persons will view your information and information you share on Facebook may become publicly available. Google Docs Google Docs ( is an online file storage and dissemination service provided by Google. The main purpose of Google Docs is to provide online storage of customer files and to enable customers to collaborate while developing such documents. Although the Google Docs Privacy Policy, effective October 20, 2009, is one of the better privacy policies available, the Google privacy policy still fails to eliminate some potentially troubling scenarios. For example, will a gadget developed by a party other than Google compromise client information stored in Google Docs? As a result of Google storing information on servers outside of the United States, is confidential client information unreasonably susceptible to unauthorized search and seizure? Does the provision allowing Google to access user information to (d) protect against harm to the rights, property or safety of Google, its users or the public as required or permitted by law pose a conflict of interest when dealing with client matters involving technology? Microsoft Office Live Microsoft Office Live ( is a free online document sharing and storage service. As with Google Docs, potentially troubling scenarios still exist in the Microsoft Privacy Policy, effective October Furthermore, Microsoft introduces the additional possibility that personal information may be disclosed as part of a corporate transaction such as a merger or a sale of assets. Clio Clio ( is a web-based law practice management service providing document management, scheduling, time tracking, and billing features. Electronic documents can be shared with clients by way of encrypted client logins. A review of the Clio Privacy Policy, effective October 2008, reveals greater protection than stated in Google and 8 Microsoft privacy policies; however, an issue remains regarding potential conflicts between Clio s interests and the interests of attorneys' clients. Mozy Mozy ( a product of the Decho Corporation, is a popular online backup service. Mozy appears to offer a very strong commitment to protecting the confidentiality of data, but short of an enforceable government request for access. Nevertheless, storage of data in jurisdictions outside of the United States may still be of concern because those locations may have less stringent prerequisites for issuing enforceable government requests for access. Remote Access: LogmeIn & GoToMyPC LogMeIn ( provides remote access to computers without requiring substantial user knowledge (computer-specific configuration settings) or in-house IT support. LogMeIn has proven to be a robust, efficient, and readily available secure means of achieving remote access to law-office computers. Although containing language similar to other online service providers, remote access services such as LogMeIn may actually pose less of a threat to confidential client information because remote access merely provides access to a remote computer's login screen. GoToMyPC ( offers a remote access service comparable to LogMeIn. As with LogMeIn, GoToMyPC reserves a right to disclose information in circumstances other than solely in response to a court order. Fortunately, secure login passwords and/or other security measures on the remote computer preferably should serve as an effective barrier to unauthorized intrusion by a remote access service provider. c. Online Execution of Documents With exceptions for the creation and execution of wills, codicils, or testamentary trusts and portions of the Uniform Commercial Code, the Texas Business & Commerce Code (2009) provides: (a) A record or signature may not be denied legal effect or enforceability solely because it is in electronic form. (b) A contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation. (c) If a law requires a record to be in writing, an electronic record satisfies the law. (d) If a law requires a signature, an electronic signature satisfies the law.

15 For many transactions, the final distinction between a conventional brick-and-mortar based practice and a VLO the requirement of physical documents has been removed. Of course, legal documents must still be timely and properly executed. If the agreement is one of legal representation, the scope of the legal representation that will be initiated and (substantially) conducted online should be clearly defined. It is recommended that PDF engagement letters be tendered to potential or existing clients and that the executed agreement be, in turn, scanned by the client, and then returned likewise via PDF document. Engagement letters and agreements, and other legal documents may also be downloaded and uploaded via a secure law firm intranet, wherein password access is required to gain entry. Some lawyers use this scannedsignature approach as a confirmation of using a clickwrap engagement to expedite triggering prompt legal representation. But, obviously, care must be taken not to false-start legal representation until the nature and extent of the scope of employment are clear, the attorney is licensed to practice law in the incipient client's geographical venue and/or licensed to practice the type of legal matter regardless of the incipient client's venue, compensation logistics are established and agreed in writing, etc. d. United States Patent & Trademark Office The Federal government has made significant efforts to lessen the use of physical paper, choosing instead to institute several online data management systems which address nearly every aspect of the patent and trademark processes, including electronic submission of documents and applications, dispute resolution, and payment of maintenance fees. i. Patent Process The United States Patent and Trademark Office (USPTO) currently allows web-based patent applications and document submission via an Electronic Filing System (EFS-Web). Using EFS-Web, anyone with a webenabled computer can file patent applications and documents without downloading special software or changing document preparation tools and processes. EFS-Web utilizes standard web-based screens and prompts to enable you to submit patent application documents in PDF format directly to the USPTO within minutes. EFS-Web is safe, 9 simple and secure and gives you all of the same benefits as paper filings, including an electronic receipt that acknowledges your submission date. USPTO: last accessed May 17, ii. Trademark Process The USPTO, although not requiring digital signatures for access by licensed patent attorneys and other duly licensed patent procurement practitioners, as for the EFS-Web, has enabled trademark applications, responses, assignments, and petitions to be e-filed using the Trademark Electronic Application System (TEAS), TEAS/index.html. Similarly, the Electronic System for Trademark Trials and Appeals (ESTTA) website, coordinates active trademark oppositions, cancellations, appeals, and the like. III. State Bar Rules and Rules of Professional Conduct On October 6, 2008, the Supreme Court of Texas amended the State Bar Rules (Misc. Docket No ) to require that members notify the State Bar of Texas of address changes within 30 days of the change. (The Supreme Court of Texas, pdf, last accessed May 17, 2010.) Due to confidentiality requirements regarding public disclosure of home address and home telephone number records maintained by the State Bar, members no longer are required to provide permanent place of residence [and] principal place of practice information in order to maintain enrollment in the State Bar, rather a preferred physical address or post office box serves as the member s registered address. Id. In essence, members of the State Bar of Texas are no longer required to maintain a record of permanent address, either home or office, and are thus free to use a preferred address such as P.O. Box or commercial mail-stop service. Furthermore, Rule 7.04(j) of the Texas Disciplinary Rules of Professional Conduct (March 2005) only requires that legal advertising disclose the city or town of the lawyer s or firm s principal office, not a specific physical address. Thus, a VLO may advertise a lawyer s name, city, and contact information without disclosing a specific postal code address. Regarding the use of time-share office space where conference rooms and administrative answering services are rented on a recurring basis, such arrangements may not qualify as a principal office

16 because lawyers are usually not permitted to store anything in the office and the lawyer only visits the office by appointment. A VLO which uses a rented office space to receive mail, phone calls, and to meet clients, but which does not otherwise occupy such an office space, is more akin to a "satellite office" location and arguably subject to advertising requirements enumerated in Rule 7.04(j): A lawyer or firm shall not advertise the existence of any office other than the principal office unless: (1) that other office is staffed by a lawyer at least three (3) days a week; or (2) the advertisement discloses the days and times during which a lawyer will be present at that other office. TDRPC 7.04(j) (March 2005). Comment 16 to Rule 7.04(j) indicates that satellite offices may be advertised as long as the principal office is among those advertised and the advertisement discloses the city or town in which that office is located. Id. Therefore, if a time-share office space is advertised, it is a reasonable inference that a principal office address should also be listed. It should be noted, however, that there is no clear delineation of the attributes required for a principal office and therefore a cloud appears to obscure how a VLO should be classified. IV. Other States a. North Carolina On January 20, 2006, the North Carolina State Bar issued 2005 Formal Ethics Opinion 10 in which a VLO planned to offer and deliver its services exclusively over the internet. Key concerns identified by the NC State Bar 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 restrictions and the enforcement thereof vary from state to state. Thus, the NC State Bar advises that a prudent lawyer should research 10 restrictions on advertising, UPL, and cross-border practice to ensure compliance before marketing and providing legal services by way of the Internet. Rule 1.1 (requiring competent representation) and Rule 1.4 (requiring reasonable communication between lawyer and client) of the North Carolina State Bar Rules of Professional Conduct (2003) apply to all members of the North Carolina State Bar and therefore apply to lawyers engaging in the practice of law via Internet. Internet-facilitated representation may affect the quality of the information exchanged or the ability of the lawyer to identify issues, such as conflicts of interest. Therefore, lawyers offering services via Internet 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 Ethics Opinion 10, North Carolina State Bar. b. New Jersey On March 25, 2010, New Jersey s Advisory Committee on Professional Ethics (ACPE) and Committee on Attorney Advertising (CAA) issued Joint Opinion 718 and 41, respectively, The Bona Fide Office Requirement and Listing of Offices on Letterhead, Websites, or Other Advertisements, responding to an inquiry about whether a home office or a virtual office can qualify as a bona fide office for the practice of law under Rule 1:21-1(a). Rule 1:21-1(a) requires that a New Jersey attorney maintain a bona fide office for the practice of law. For the purpose of this section, a bona fide office is 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. [R. 1:21-1(a).] ACPE has determined that a virtual office does not qualify as a bona fide office because a virtual office refers to a type of time-share arrangement whereby one leases the right to reserve space in an office building on an hourly or daily basis and the attorney generally is not present during normal business hours. Furthermore,

17 the receptionist at a virtual office is unable to server as a responsible person acting on the attorney s behalf because he or she is typically incapable of answering questions posed by the courts, clients or adversaries and functions much like an answering service. ACPE does not interpret Rule 1:21-1(a) as prohibiting use of a home as a bona fide office provided the home office meets the requirements of the Rule and appropriate steps to preserve the confidentiality of client information. If the attorney is regularly out of the office during normal business hours, then a responsible person must be present at the office. Joint Opinion 718. Once a bona fide office has been established, nothing in the Rule prohibits the use of other locations for client meetings as long as the bona fide law office is in fact the place where the attorney can be found, and clients could be met there. Id. Regarding communications on letterhead, websites, or other advertisements, including the listing of office locations, the CAA interprets RPC 7.1(a) as requiring at least one bona fide office, but satellite office locations may also be listed. If a virtual office satellite location is listed, the law firm letterhead, websites, or other advertisements must state that the virtual office location is by appointment only. Id. V. Conclusions Due to privacy requirements, the State Bar of Texas no longer requires members to register a permanent place of residence and principal place of practice; rather, members are only required to register a preferred physical address or post office box. Furthermore, Texas Disciplinary Rules of Professional Conduct require that an attorney list the city or town of his or her principal office in advertisements, not a physical postal address. Texas appears to be open to the idea of the practice of law via a VLO. By permeating the practice of law, technology and the electronic landscape have metamorphosed perspectives and possibilities for delivering legal services to clients independently of time and geographic boundaries. Indeed, as has been elucidated in this paper, attorneys licensed to practice in Texas and before certain government agencies can effectively effectuate client engagements entirely via the Internet and under circumstances in which physical brick-and-mortar addresses are optional rather than required. Even if neither currently practicable nor advantageous to commit entirely to a VLO, many law office environments may still maximize custom implementations of technology and the Internet to assure client satisfaction with the quality of legal services provided, and to safeguard the integrity of client confidential information which, insodoing, challenges traditional principal office concepts. Nevertheless, as also emphasized herein, regardless of the scope and tenor of the unavoidable VLO, members of the State Bar of Texas have the duty to sustain all of the traditional ethical obligations recited in the Texas Disciplinary Rules of Professional Conduct, namely, diligent and competent legal representation, reasonable ongoing client communications, sustaining confidentiality and safeguarding the integrity of client information, and compliance with advertising requirements. While it is clear that there are myriad ways for attorneys to traverse the line while functioning as a VLO, Texas attorneys who have carefully considered selection of suitable technology tools of the trade and who are rigorously engaging in professional conduct as contemplated by these Rules should be safely situated virtually. Notwithstanding such flexibility, attorneys should be abundantly careful and cautious how a VLO is advertised to potential and current clients. Specifically, attorneys should not (inadvertently) attempt to misrepresent the nature of the law-office by listing a time-share, appointment-only brick-and-mortar office as though it were a full-time principal office location. Rather, an attorney should choose instead to state in advertisements only the city or town in which the attorney practices law. If reference to a physical address is preferable for receiving documents and packages, then it should be clearly qualified as a mailing address or mail-stop in order to avoid confusion by potential or current clients. 11

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