Technology is central to how legal services are delivered, how lawyers communicate with clients, how information is exchanged, stored, and accessed, and how money moves from a client to and through a law firm. While the ethical rules governing lawyers were not originally written with artificial intelligence, cloud computing, or remote work in mind, those rules apply just the same, just as they continue to evolve in light of an ever-changing world.

‘Competence’ Now Includes Understanding Technology

Any discussion of ethics and technology begins with the American Bar Association’s Model Rules of Professional Conduct 1.1: the duty of competence.

Traditionally, ‘competence’ meant knowing the law and preparing adequately for a matter. It’s now clear that such preparation also includes understanding the technology lawyers rely on daily.

As Stephen J. Conover of Carmody Torrance Sandak & Hennessey LLP explains, ‘competence’ in this context does not require lawyers to become engineers or programmers, but it does require functional understanding of the technology they interact with and use, including legal research platforms, cloud storage systems, artificial intelligence tools, and digital communication methods.

Those who fail to understand the tools they use may expose themselves to malpractice claims and disciplinary action, even when their underlying legal analysis is sound.

The Expanding Attorney-Client Data Footprint

Communication

Model Rule 1.4 requires lawyers to keep clients reasonably informed and to explain matters so clients can make informed decisions. When technology materially affects representation, clients must be told.

This includes explaining how lawyers communicate, how documents are shared, and what risks may arise from those choices.

Technology that records and transcribes calls is increasingly common. However, recording conversations can implicate criminal law, ethics rules, and discovery obligations. Consent requirements vary by state, and some jurisdictions require client consent regardless of recording laws. AI-generated transcripts create additional risks. They may be inaccurate, discoverable, or stored on servers outside a lawyer’s control.

Clients might assume that email, messaging apps, or AI-generated summaries are inherently secure. They are often not. Lawyers should disclose recording practices and consider addressing them explicitly in engagement letters. Clear communication at the outset of a representation helps manage expectations and avoid misunderstandings later.

Confidentiality

Confidentiality under Model Rule 1.6 extends far beyond the attorney-client privilege. It covers virtually all information relating to the representation of a client, whether or not that information would be privileged in court. Technology has dramatically expanded where that information lives and how it can be accessed.

Michael Downey of Downey Law Group LLC underscores the importance of thinking holistically about data protection, i.e., how information is handled, where it goes, how it’s transferred, and taking the appropriate precautions at each of those stages. Such precautions include limiting internal access and understanding where data is stored and who controls it. It also includes vendor management; vendors such as cloud providers and payment processors all become extensions of the firms they serve for confidentiality purposes.

Electronic Payments and Pitfalls

Model Rule 1.15 requires lawyers to safeguard client property and prohibits its commingling with the lawyer’s. The most obvious manifestation of this is that client money in the form of a security retainer that has not yet been earned must be kept separate from a lawyer’s operating funds, typically in a trust or IOLTA account.

Many consumer payment apps are simply not designed with this requirement in mind. Funds often pass through intermediary accounts, sit temporarily in a pooled balance, or remain subject to chargebacks and clawbacks by the payment provider. When money moves through a platform that is not specifically designed for legal trust accounting, a lawyer may unintentionally violate multiple ethical rules before realizing it.

Privacy concerns compound the problem. Some payment platforms default to public or semi-public transaction settings, meaning third parties can see that a client paid a lawyer and sometimes even infer the nature of the legal matter. That visibility alone can compromise client confidentiality. Lawyers who accept electronic payments must understand not only where the money goes, but what information is exposed in the process.

Lawyer-specific payment platforms exist precisely to address these risks. These systems are designed to route earned fees and retainers into the correct accounts automatically, prevent improper chargebacks from trust accounts, and generate transaction records that support accurate reconciliation. Even with these tools, oversight remains critical. Lawyers must still review deposits, confirm that funds were directed correctly, and reconcile accounts regularly.

Payment technology can streamline billing and collections, but only when used deliberately and with a clear understanding of the ethical rules that govern client money.

Internal Considerations

Supervision and the Risk of Insider Misconduct

While cybersecurity often focuses on external threats, some of the most damaging breaches can originate from within a firm. Rules 5.1 and 5.3 require managers and supervisors to make reasonable efforts to ensure that lawyers and nonlawyers comply with ethical obligations.

Technology can magnify the damage caused by a single rogue employee. Broad system access, lack of monitoring, and poor internal controls can allow massive amounts of sensitive data to be misappropriated quickly. Failures here can have significant consequences for managers, supervisors, and the firm as a whole.

Clear policies, access controls, audits, and training are all part of meeting supervisory obligations in a modern firm.

Employee Monitoring and Surveillance Technology

Remote work has prompted some firms to consider employee monitoring software that tracks computer usage, keystrokes, or even webcam activity. While these tools may be legal in some jurisdictions, they raise special concerns in a legal environment.

Monitoring tools may capture confidential client information or create discoverable records that were never intended to exist. Firms must think beyond productivity here, as surveillance can affect morale, raise privacy issues, and introduce new confidentiality risks if data is stored by third-party vendors.

Employment law, privacy law, and legal ethics intersect sharply in this area, making careful analysis essential before adopting such technology.

Departing Lawyers and Firm Information

Professional mobility raises recurring questions about what information a departing lawyer may take when moving to a new firm. Courts and ethics opinions draw an important distinction between materials related to professional practice and internal firm business information.

As Jonathan Friedland of Much Shelist, P.C. observes, there is a dividing line between materials that allow a lawyer to do their job, like pleadings and forms, and internal firm operations, billing data, realization data, and strategic plans. Attempting to restrict the former can interfere with client choice, while failing to protect the latter can expose a departing lawyer and their new firm to trade secrets and fiduciary duty claims.

In the end, the best protection is clarity: written policies that explain what belongs to the client, what belongs to the lawyer, and what belongs to the firm.

Practical Takeaways

Technology is not inherently dangerous to ethical law practice. What creates risk is using technology casually, without understanding how it interacts with professional obligations. The good news is that most technology-related ethics problems are preventable with thoughtful planning and clear communication.

• Competence requires awareness, not mastery. Lawyers do not need to understand how every system works at a technical level, but they do need to understand what the tool does, what data it touches, and where potential risks lie. If a lawyer cannot explain a technology’s basic function and implications, that is a sign to pause before adopting it.
• Communication with clients is key. Engagement letters and early conversations should address how lawyers communicate, whether calls may be recorded, how documents are shared, and how payments are handled. Clients often adopt technology for convenience without understanding the risks. Educating them upfront protects both sides.
• Confidentiality must be considered end-to-end. This means thinking beyond passwords and firewalls to include vendor relationships, internal access controls, data storage locations, and employee practices. Every new tool that touches client information should be evaluated through the lens of Rule 1.6.
• Money handling deserves special caution. Electronic payments should be structured so that client funds move directly into appropriate accounts without interim commingling or exposure to clawbacks. Regular reconciliation is not optional, even when technology automates parts of the process.
• Supervision matters more than ever. Technology can amplify mistakes by employees and lawyers alike. Clear written policies, training, and reasonable monitoring are essential, not because everyone is untrustworthy, but because ethical compliance requires systems, not assumptions.

Technology does not change the ethical rules, but it does change how easily those rules can be violated. Lawyers who approach technology deliberately, rather than reactively, can enjoy its benefits without compromising professional responsibility.

To learn more about this topic view Best Practices Regarding Technology. The quoted remarks referenced in this article were made either during this webinar or shortly thereafter during post-webinar interviews with the panelists.  Readers may also be interested to read other articles about technology.

This article was originally published here.

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