Ethical Issues of Remote Practice: Remote Clients, and Debtor’s Counsel’s Duty to Investigate

With the U.S. Trustee Program announcing that § 341 meetings for all chapter 7 and 13 cases will be heading to Zoom, there is no turning back now. Most routine consumer bankruptcy cases can now be completed without the debtor ever leaving home.

Gone are the days of plastic grocery bags full of unopened mail from creditors. Gone are the days of printing hundreds of pages of bankruptcy schedules. Gone are the days of debtors listening to prior answers during § 341 meetings and simply parroting responses. Gone are the days of finding parking at the bankruptcy courthouse. Gone are the days of debtors finding it difficult to access a local or nearby attorney (a big win for access to the bankruptcy system). Gone are the days of wet-ink signatures (in some jurisdictions).

Some attorneys now are decrying the losses to the consumer bankruptcy system because of these modernizations. As a consumer bankruptcy attorney, I agree that there has been a loss of community from not seeing my colleagues at the § 341 meetings. The panel chapter 7 trustees lose out on not being able to look the debtor in the eyes to determine the veracity and truthfulness of the debtor’s testimony under oath.

Overall, though, I believe that modernization has made it easier for consumer debtor attorneys to comply with their legal, ethical and professional obligations under the Bankruptcy Code and Rules, especially the duty to investigate. [1]

The advent of remote practices and the elimination of conventional practices have given rise to novel opportunities and challenges, for both attorneys and clients. With the COVID-19 pandemic having acted as a catalyst for this transformation, bankruptcy attorneys have had to adapt to a new reality. That modernization presents a range of advantages, but it also brings its own challenges.

Ethical Issues and Challenges

The shift to remote practice gives rise to several ethical issues and challenges:

1. Ensuring Honest and Accurate Information. One of the primary challenges is ensuring that clients provide honest and accurate information. Attorneys need to rely on their ability to build trust with remote clients and effectively communicate the importance of providing complete and truthful disclosures.
2. Meeting the "Reasonable Inquiry" Standard. Attorneys must still meet the "reasonable inquiry" standard, ensuring that they thoroughly investigate a client's financial affairs. This requirement extends to gathering the necessary documentation and verifying the accuracy of the information presented.
3. Handling Sensitive Data. The nature of remote practice introduces concerns related to data security and privacy. Attorneys must safeguard sensitive financial and personal information, adhering to ethical standards and legal requirements for data protection.
4. Maintaining Client Confidentiality. The duty to maintain client confidentiality remains paramount, even in a digital environment. Attorneys must utilize secure communication methods and platforms to protect their clients' sensitive information.
5. Effective Communication. Effective communication with remote clients becomes essential. Attorneys need to establish clear channels of communication, ensuring that their clients understand their obligations and the implications of their disclosures.

The Benefits of Modernization

While remote practice does present unique challenges, it also offers several benefits that aid attorneys in fulfilling their ethical obligations:

1. Enhanced Access. Remote practice enables debtors to access bankruptcy attorneys more easily. This broadens access to the bankruptcy system, ensuring that those in need can seek relief without geographical constraints.
2. Digital Documentation. The move to digital documentation simplifies the sharing of information between attorneys and clients. This transition minimizes the need for physical paperwork, streamlining the process.
3. Efficient Investigations. Attorneys can conduct more efficient investigations by utilizing technology for information-gathering, verification and communication. Online resources, digital records and videoconferencing tools enable attorneys to fulfill their duty to investigate effectively.
4. Reduced Costs. The modernization of bankruptcy practice can reduce costs for both clients and attorneys. Remote practice eliminates the need for robust staff, physical office space, parking fees and other associated expenses, making legal services more accessible.

Conclusion

While the shift to remote practice in consumer bankruptcy cases has raised ethical and practical challenges, it has also introduced new opportunities. By embracing modernization and adapting their investigative techniques, debtor's counsel can continue to fulfill their legal, ethical and professional obligations under the Bankruptcy Code and Rules. With the duty to investigate at the forefront, attorneys can navigate this evolving landscape while providing effective and efficient legal representation to their clients, ultimately improving access to the bankruptcy system.