Legal Research

"Do FTC "Red Flag" Rules Apply to Law Firms?"

Posted by Jim Calloway: "On August 1, 2009, a new Federal Trade Commission rule goes into effect requiring businesses to have a written plan to identify and respond to "Red Flags" indicating possible identity theft.  Failure to comply may result in several government sanctions. Many feel that these should not apply to law firms and the American Bar Association has communicated that belief to the FTC.

Here's an article from the Ohio Lawyer with more details about the rule. But the date is almost here and, according to the FTC, if the lawyer regularly defers payment for services performed the rule applies. The FTC told the doctors the same thing. So if you tell a client they can pay their bill late because their home was just destroyed a few federal rule applies to your firm? I'd hate to guess the meaning of "regularly" for most law practices.

The good news is that the legal profession has long protected the confidentiality of client information. The bad news is that this is so deeply ingrained in the DNA of law firms that the required written documentation may be sparse and identity theft issues may present a somewhat different risk.

Maybe the answer is to reduce to writing the many protections of our clients' confidentiality we already have in place.

Judith D. Equels, Director of The Florida Bar's Law Office Management program, has these observations...

Full text and active links are available at the source site listed below.

Full post as published by Stark County Law Library Blawg on July 27, 2009 (boomark / email).