CBA Record July-August 2017

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LEGAL ETHICS
BY JOHN LEVIN
New ARDC Rule: Lawyers Without
Malpractice Insurance Must Take Course
S ome readers of this column may
remember the long and somewhat
acrimonious debate that preceded
the adoption by Illinois of a minimum
continuing legal education requirement.
Readers may also recall that Illinois was far
from the first jurisdiction to adopt such a
requirement.
However, Illinois has now taken the lead
in a new area of legal education. Under
amended Illinois Supreme Court Rule
756(e)(2), commencing in 2018 Illinois
lawyers who do not carry legal malpractice
insurance must take a self-assessment on
“an interactive online educational pro-
gram” provided by the Administrator of
the ARDC “regarding professional respon-
sibility requirements for the operation of a
law firm.” The subsection further provides
that: “The self-assessment shall require that
the lawyer demonstrate an engagement in
learning about those requirements and
that the lawyer assess his or her law firm
operations based upon those require-
ments.” The results of the self-assessment
are confidential and may not be used in
evidence in a disciplinary proceeding.
The biennial course also carries 4 hours of
MCLE professional responsibility credit.
The purpose of this new provision is
two-fold. The first is to educate lawyers
on practices and procedures to reduce
the chances of a malpractice claim. The
John Levin is the retired Assis-
tant General Counsel of GATX
Corporation and a member of
the CBARecord Editorial Board.
John Levin’s Ethics columns,
which are published in each
CBA Record, are now in-
dexed and available online.
For more, go to
legalethics/.
major malpractice insurers have their own
educational programs and resources to
educate and advice policyholders. It only
makes good business sense to reduce the
likelihood of a claim. Larger institutions
and law firms also provide resources to
their members and employees for the same
reason. Under the new Rule, the ARDC
will provide a similar service to the unin-
sured.
A second purpose of the new rule is to
motivate lawyers to purchase malpractice
insurance. According to research provided
by the ARDC, most of the uninsured
lawyers in Illinois are sole practitioners.
According to the ABA, five to six percent
of private attorneys face a malpractice claim
every year. Unless you want to represent
yourself in the claim (a generally accepted
“very bad idea”), the cost of defense could
be excessive. By drawing the uninsured
bar’s attention to the issue of malpractice
liability and insurance on a regular basis,
the new rule may cause more Illinois law-
yers to purchase the coverage over time.
The amendments to Rule 756 are a form
of regulatory program called “proactive
management-based regulation.”This concept
was discussed at length in a 2013 Hofstra Law
Review article [Vol. 42:233] byTed Schneyer
titled “The Case for Proactive Management-
Based Regulation to Improve Professional
Self-Regulation for U.S. Lawyers.” The
article draws a distinction between two
forms of regulation. The first is “professional
self regulation” in which “the courts adopt
a code of professional conduct based heav-
ily on the ABA rules in order to govern the
lawyers practicing in their jurisdictions….
And the courts and their agencies impose
discipline, ranging from private warnings to
disbarment, on lawyers whom they find to
ETHICS QUESTIONS?
The CBA’s Professional Responsibility Commit-
tee can help. Submit hypothetical questions to
Loretta Wells, CBA Government Affairs Direc-
tor, by fax 312/554-2054 or e-mail lwells@
.
have breached code rules.”
The second is “proactive management-
based regulation,” which is “a regulatory
model formulated by theorists Cary
Coglianese and David Lazer that requires
firms to engage in their own planning and
develop their own management processes
in order to achieve externally defined but
broadly stated public goals. Compliance
with professional duties is, of course, an
example…. The proactivity element turns
on a self-assessment process….” Schneyer
discusses at length the successful use of
proactive management-based regulation by
lawyers in Australia and suggests its use in
the United States.
What I find intriguing in the adop-
tion of this rule is that Illinois, after
lagging in the adoption of mandatory
continuing legal education, has taken the
lead in using this novel form of regula-
tion of lawyers. We will soon see if it is
successful.
NEED SOME AFFORDABLE
MEETING SPACE?
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provide catering and audio/visual services for
client conferences, firmmeetings, social gather-
ings etc. Call Michele Spodarek, CBA Conference
Center Manager at 312/554-2124 for details.
50 JULY/AUGUST 2017