December 2021 Ethically Speaking - Marketing Mishap: Recording Initial Client Calls to Maximize Return on Investment

by Nicole Nuzzo

Legal marketing has changed considerably, with many lawyers turning to internet marketing campaigns as a key component to bringing in new business. Formerly successful marketing tactics such as billboards, print ads, and yellow page advertisements are being replaced with pay-per-click (PPC) advertisements, local service advertisements (LSA), and other similar web-based advertising.

To ensure that the advertisements are generating the right lead for the law firm, when signing up for these services, a lawyer may also be asked to have her telephone calls recorded. In other words, marketing service providers are committing to keep a lawyer’s telephone ringing so long as the lawyer agrees to allow her initial telephone call with her potential new client to be recorded. Although it is ensured that the client will receive a prompt notification that the call is recorded, this prompt alone does not ensure a lawyer is meeting her ethical obligations to her potential new client. Allowing a third party to record a potential new client telephone call poses serious risk to the lawyer and the client.

This article addresses the ethical risk of violating the duty of confidentiality and waiving attorney-client privilege when a lawyer agrees to such recordings. Potential liability and requirements for recording telephone calls generally are beyond the scope of this article.

Web-Based Marketing
In general, before embarking on any marketing campaign, lawyers must ensure that such campaigns comply with their ethical obligations.

The California Rules of Professional Con­duct (CRPC) specifically state that electronic means of advertising communications are governed by the rules. Cal. Rules of Prof. Conduct, Rule 7.2(a). The State Bar’s Standing Committee on Professional Responsibility and Conduct (COPRAC) has addressed the issue as well and concluded that an attorney’s website is governed by rules applicable to attorney print advertising. Cal. State Bar Formal Opn. No. 2001-155. Lawyer marketing and advertising campaigns are also subject to the limitations set forth in Business and Professions Code sections 6157 et. Seq.

At the outset of any marketing campaign, a lawyer must ensure the campaign meets the requirements of the CRPC and State Bar Act. Robert Sall, Promoting Business under the Advertising Rules, LACBA Update, Dec. 2009, https://www.lacba.org/news-and-publications/lacba-update/past-ethics-articles/2009-dec-ethics-sall (published prior to the new rules of professional conduct adopted on November 1, 2018).

Often, lawyers may delegate website design and optimization to third-party vendors who may require a lawyer to permit the recording of telephone calls in order to analyze the rate of return on investment. The CRPC permit a lawyer to delegate marketing efforts to third-party vendors on the condition that the lawyer properly supervises the conduct of the third party preparing and executing the marketing strategies in accordance with Rule 5.3. Cal. Rules of Prof. Conduct, Rule 7.2, Comment [3]. While the act of delegating marketing efforts is permitted by the CRPC, the lawyer must ensure the third-party vendor is complying with the CRPC and properly vet the vendor accordingly. Kristin Yokomoto, Ethically Speaking: Vetting Vendors: A Lawyer’s Ethical Duty, Orange County Lawyer, Aug. 2021.

Duty of Confidentiality
Attorneys in California have an express duty “[t]o maintain inviolate the confidence, and at every peril to himself or herself to preserve the secrets, of his or her client.” Bus. & Prof. Code § 6068(e)(1). Absent the informed consent of the client to reveal such information, the duty of confidentiality has very few exceptions. See Cal. Rules of Prof. Conduct, Rule 1.6.

The purpose of this rule is to encourage candor with the attorney and to ensure that every aspect of the relationship will further the client’s interests. Confidentiality applies to information a lawyer acquires by virtue of the representation, whatever its source, and encompasses matters communicated in confidence by the client. See Goldstein v. Lees, 46 Cal. 3d 614, 621(1975).

Even when no lawyer-client relationship ensues, a lawyer has an ethical obligation not to reveal information protected by Business and Professions Code section 6068(e)(1) and Cal. Rules of Prof. Conduct, Rule 1.6. Cal. Rules of Prof. Conduct, Rule 1.18.

Under CRPC 1.0.1(e), “informed consent” means “a person’s agreement to a proposed course of conduct after the lawyer has communicated and explained (i) the relevant circumstances and (ii) the material risks, including any actual and reasonably foreseeable adverse consequences of the proposed course of conduct.”

A lawyer who agrees to have her intake calls recorded by a third-party provider may find it difficult, if not impossible, to obtain the necessary informed consent required by CRPC 1.6 without offending the rule. In analyzing and explaining to the client the material risks and actual or reasonably foreseeable adverse consequences of recording the telephone call, the lawyer will inevitably need to obtain information about the client’s matter, which likely will include confidential information. In some instances, the client’s name and purpose for the telephone call in and of themselves may trigger the duty of confidentiality. Thus, the act of properly obtaining informed written consent while on an automatically recorded telephone call may violate CRPC 1.6.

Moreover, in 2010, COPRAC issued a helpful opinion addressing factors a lawyer should consider when using specific technology to transmit or store confidential information in her practice. Before using a particular technology in the course of representing a client, an attorney must take appropriate steps to evaluate: (i) the level of security attendant to the use of that technology, including whether reasonable precautions may be taken when using the technology to increase the level of security; (ii) the legal ramifications to a third party who intercepts, accesses, or exceeds authorized use of the electronic information; (iii) the degree of sensitivity of the information; (iv) the possible impact on the client of an inadvertent disclosure of privileged or confidential information or work product; (v) the urgency of the situation; and (vi) the client’s instructions and circumstances, such as access by others to the client’s devices and communications. Cal. State Bar Form. Opn. No. 2010-179.

A lawyer who is evaluating whether to permit a third party to record a client call should consider investigating the provider’s policies for maintaining confidentiality, whether calls can be deleted at the request of lawyer or client, whether the lawyer is permitted to only ask for a client name and telephone number before hanging up, and whether there are any other appropriate steps that may be taken to mitigate the risk of violating CRPC 1.6. Even with mitigating factors in place, an attorney may find the risk of using recorded telephone lines for the purposes of measuring the attorney’s return on investment is too high to engage a third party service provider who mandates recordation.

Attorney-Client Privilege
Even if, arguendo, the recordation of a telephone call does not violate a lawyer’s duty of confidentiality, a lawyer may find that such act has resulted in a waiver of the attorney-client privilege.

Evidence Code section 952 provides for the confidentiality of communications between client and lawyer. Certain third parties may be privy to the communication without destroying the privilege. These include (i) persons “present to further the interest of the client in the consultation”; (ii) persons “to whom disclosure is reasonably necessary . . . for the accomplishment of the purpose for which the lawyer is consulted”; and (iii) persons “to whom disclosure is reasonably necessary for the transmission of the information.”

Depending on the circumstances, these persons can include secretaries, clerks, interpreters, physicians, parents, spouses, joint clients, or business associates. See Ins. Co. of N. Am. v. Superior Court, 108 Cal. App. 3d 758, 771 (1980). The privilege is waived if the communication is made in the presence of third persons, such as bailiffs, who have no legitimate reason for hearing such communications. People v. Poulin, 27 Cal. App. 3d 54, 64 (1972).

In evaluating whether disseminating her telephone call to a marketing provider waives privilege, a lawyer will be required to assess whether the purpose of disseminating the information to the third-party service provider meets one of the three carve-outs delineated in Evidence Code section 952.

In one case, the court found that communications disclosed to a public relations consultant could be privileged only if the disclosure “was reasonably necessary to accomplish the purpose for which the client consulted the attorney.” Behunin v. Superior Court, 9 Cal. App. 5th 833, 845 (2017). In Behunin, the court declined to extend the privilege to communications made to a public relations consultant for the purpose of inducing settlement. Id. at 850.

The reason behind companies recording telephone calls is for marketing purposes. That is, the lawyer’s self-interest in analyzing her rate of return on investment for a specific marketing strategy. This reason is distinguishable from the reason lawyers appropriately include paralegals, assistants, or interpreters in communications (all of whom have been considered “necessary” in the representation). There is little to no nexus between communicating with a client with staff present to advance the client’s matter and including a marketing company on calls to enhance a marketing strategy. Therefore, it is highly likely that communications between an attorney and client on an automatically recorded telephone line would not be considered privileged.

As the legal field evolves and law firms assess marketing strategies resulting from technological advances in business generally, lawyers must remember that the legal profession is governed by rules of professional conduct which may make otherwise acceptable marketing strategies unavailable to lawyers, without modification to the terms of agreements.

Nicole Nuzzo is a partner with Farzad & Ochoa, Family Law Attorneys, LLP, who is designated by the State Bar of California Board of Legal Specialization as a Certified Family Law Specialist. Nicole limits her practice to family law matters. Nicole is a member of the OCBA Professionalism & Ethics Committee and may be reached at Nicole.Nuzzo@farzadlaw.com.