Rule change governing a lawyer's ideas and thoughts needs to be reconsidered.

I saw the publication of a proposed rule change to Pennsylvania Rules of Professional Conduct, Rule 8.4(g). There is a period to comment on the rule. Should I oppose it or agree to it?

Samuel C. Stretton.

The question is correct. In the Pennsylvania Bulletin, dated Aug. 31, there is published a proposed rule change to Rule of Professional Conduct 8.4. The rule change in essence adds a subsection(g). It also adds two new comments, 3 and 4, to the rule.

If anyone wants to give their thoughts on this, they can send a letter to the Executive Office of the Disciplinary Board in Harrisburg. The comments have to be sent before Sept. 30. There is also an email address.

The new rule reads as follows:

"It is professional misconduct for a lawyer to (g) in the practice of law, by words or conduct, knowingly manifest bias or prejudice, or engage in harassment or discrimination, as those terms are defined in applicable federal, state, or local statutes or ordinances, including but not limited to bias, prejudice, harassment, or discrimination based upon race, sex, gender identity or expression, religion, national origin, ethnicity, disability, age, sexual orientation, marital status or socio-economic status. This paragraph does not limit the ability of a lawyer to accept, decline, or withdraw from representation in accordance with Rule 1.16.  This paragraph does not preclude advice or advocacy consistent with these rules."

New comment 3 and 4 define what conduct in the practice of law means. The comment includes CLE seminars, bench-bar conferences, and bar association activities where legal credits are offered. Comment 4 states the substantive law of anti-discrimination and anti-harassment statutes and case laws can be used to clarify the scope of the prohibited conduct.

This rule should be questioned and probably shouldn't be adopted as written. First, the Rules of Professional Conduct should not become burdensome to lawyers. There is a tendency recently to start to overburden lawyers with regulations. Rule changes over the years have required specific financial record-keeping as opposed to lawyers having their own systems. The rule changes have required written fee agreements. Although all these are good ideas, they should not be the basis of discipline. But they are since they are Rules of Professional Conduct.

Now, if Rule 8.4(g) is adopted another set of conduct can result in professional discipline, potentially severe discipline, if a lawyer violates the broadly stated language. This is a grossly overreaching regulation, at least in the mind of this writer.

Just think of the overreaching here. One goes to a bench-bar conference and they are sitting at a bar with some of their close friends and there are some off-color jokes made. Someone hears this and the next thing that occurs is a disciplinary proceeding. Discussion at CLE seminars on issues may trigger this rule. Taking a client to a club that has a membership that is predominantly white could trigger a violation.

If a lawyer expresses negative feelings about sexual gender change, is the lawyer to be disciplined? This rule is so broadly drafted there may be a First Amendment issue.

One concern if one reads proposed Rule 8.4(g) is the language a lawyer knowingly manifests bias or prejudice. What does that mean? If I say I am not in favor of certain conduct or think it's odd that people would act in a certain way, but I don't do anything to discriminate against them or harass them, am I in violation of the rules? Would I be disciplined? In other words, this rule raises some serious concerns as to its impact.

If one tells a bad joke or something, is that a violation? The broad scope of this rule should raise concerns.

The Rules of Professional Conduct have the purpose of regulating one's ethics. The rules are to guide the profession to represent clients properly, to act appropriately in court, and set an example as a professional. But, the Rules of Professional Conduct should not start to define morality or punish people for differences of opinion or differences of thought. Particularly if a person doesn't act on their opinions or harass or take steps against other people. This rule now allows for discipline for a thought if it questions race, sex, orientation, etc. This goes far beyond what the Rules of Professional Conduct should cover and should not be the subject of professional regulation.

The Pennsylvania Supreme Court should not be regulating a lawyer's personal life. It should be regulating the lawyer's professional life. Of course, that doesn't mean if a lawyer steals things in his or her personal life they can't be disciplined or commits crimes. But, to start to get into areas of thought and ideas is of grave concern even if some of the thoughts and ideas are less than desirable.

Hopefully, the Disciplinary Board or the Supreme Court will rethink this proposal. Obviously, it's a proposal that goes along with the signs of the times. But, signs of the times aren't really the best way of developing Rules of Professional Conduct. This rule needs to be reconsidered because it pushes the Rules of Professional Conduct into regulating an entirely new area, a person's ideas and thoughts. That is far beyond the original concept of ethics.

A lawyer can sell his practice and allow his beneficiaries to receive a benefit from the equity.

My law partner and I each own 50% of our law practice. In the event one of us dies, we intend to leave our 50% share to the remaining partner. Is that transfer done better through some form of succession planning document or is it simply accomplished by including our intentions in our wills?

The question is an interesting one. It is now much better for a lawyer to devise an estate plan in the context of a law firm to define what happens when a partner dies or becomes disabled. As this writer has mentioned in a number of columns, before 2000 no one could ever sell their law practice. Even beneficiaries couldn't get the goodwill or value of the practice after the death of a lawyer. Rule 1.17 of the Rules of Professional Conduct, which has been amended several times since 2000, changes the above and allows for a sale or transfer of one's law practice or portions of it. The rule originally was limited only for death or disability of the lawyer. Now, a lawyer can sell their practice. It used to be the lawyer had to sell the whole practice; now one can sell portions of the practice of a particular area. But, if a lawyer sells a portion of the practice, they can't practice in that area of law anymore except if they are doing so on behalf of a public institution.

Having said that, what is the best way to transfer a practice? The first thing would be to make sure that both partners understand that their beneficiaries can benefit from the goodwill of the practice. A decedent lawyer's beneficiaries should be considered.

The way the question is written it makes one assume that the two law partners don't want their families to share or have any claim to any portion of their partnership share. That, of course, is fine if that's what both decide. On the other hand, if one has a family or children or a spouse, etc., it might be reasonable to reconsider to ensure that family gets reimbursed for the goodwill of the practice.

What some lawyers do, particularly in small firms, is to take out a life insurance policy on the other partner's life. The beneficiary is the remaining surviving partner or partners. That can be used then to pay for purchasing the share from the beneficiaries of the deceased lawyer's estate.

Obviously, beneficiaries of a decedent lawyer's estate would have a claim for fees owed the lawyer at the time of his death.

Assuming that there is no interest in beneficiaries benefiting and the two partners just want to ensure that the surviving partner can continue (and that's a fairly short-sighted view if one has family or relatives who are depending on them), then the best way to transfer it would be in the shareholder's agreement or the partnership agreement. The partners should retain an attorney who is an excellent transactional lawyer and understands not only law practice, but estate transfers, to draft the appropriate documents.

Without more information, that's the best advice that can be given in this column. But every lawyer who practices law, whether as a solo practitioner or as part of a partnership where there is equity interest, must know that the rules have changed and one can sell their practice and allow their beneficiaries to receive a benefit from the equity.

Chester County lawyer Samuel C. Stretton has practiced in the area of legal and judicial ethics for more than 35 years. He welcomes questions and comments from readers. If you have a question, call Stretton directly at 610-696-4243 or write to him at 301 S. High St. P.O. Box 3231, West Chester, Pennsylvania, 19381.