A new code of ethics for lawyers, which encourages them to "blow the whistle" on law-breaking clients in some instances and requires unpaid public interest legal service, was proposed today by a commission of the American Bar Association.

The proposals, which must go through a year of debate and revision within the profession, represent an effort to convince the nation's 500,000 lawyers that they have dual obligations: The traditional one to their clients and another to society as a whole.

The proposals also reflect their author's sensitivity to the three "chronic" complaints of clients about lawyers: incompetence, dishonesty and exhorbiant fees.

The proposed rules would set out new and more specific definitions of competence. They would require that a client be told in writing about lawyer's time would cost him before substantial sevices were rendered. And they would place new stress on the obligation to keep a client fully informed about the progress of a case.

The proposals, at this stage and possibly even in the future, may form only an ideal of lawyer behavior. At the same time they reflect the acute self-consciousness among many leaders of the profession about the lawyer-dominated scandals of the past decade and the growing antipathy toward lawyers among the public, from anonymous small-time clients to presidents of the United States.

The most vigorous controversy over the next year is expected to arise from the proposed code's stipulated resolutions of conflict between client and societal needs. The proposals would significantly narrow the options available to a lawyer forced to confront the extremes of such situations; they would, as well, sometimes subordinate previously sacred rules of lawyer-client confidentiality to greater public claims.

Under the proposals, for example, a lawyer would be obliged to disclose confidential information to prevent a client from killing or seriously injuring someone.

Lawyers also would be required to disclose perjury on the part of clients in legal proceedings if they have been unable to prevent it.

And, under the proposals, a lawyer who learns of illegal conduct within the corporation or organization he represents would be permitted -- and in some cases duty-bound to make public what he knows.

That provision will be among the most keenly debated as the model rules of professional conduct are discussed over the next year in ABA hearings around the country.

The proposed rules are the first revision in 10 years of the code of ethics To have to force on individual lawyers, the proposals must be adopted next year by the ABA ruling body -- the House of Delegates -- and then accepted by the supreme courts of each state. A state can accept or reject individual provisions.

A lawyer who violated accepted provisions would be subject to discipline ranging from admonition to disbarment.

Ultimately, the observence of the code would depend on local and state bar enforcement machinery and coluntary compliance. The effectiveness of both is currently the subject of much argument inside and outside the legal profession.

A "discussion draft" presented today by Ohama lawyer Robert Kutak, chairman of the commission which drew it up, is the sixth version of the moral code, written since the summer of 1977. During the intervening period, some provisions have been altered substantially.

Originally, for example, a fixed percentage of a lawyer's work time was to be left aside for unpaid public service. Now, the revised rules simply state that "a lawyer shall render unpaid public interest legal service" and report the extent of that service to the local bar every year. The obligation could be fulfilled through free representation of poor people or public service organizations, or through efforts to improve the legal system under the aegis of voluntary organizations.

Other provisions, new or expanded, from the current code, include:

Rules for lawyer advertising, something forbidden when the old code was formulated. The proposals permit radio, television, direct mail, newspaper and telephone directory advertising, subject to certain rules of accuracy and taste.

A heavier stress on competence and quality of legal services, with new admonitions against procrastination and withholding of information from clients.

New provisions holding lawyers who works together responsible for one another's conduct. A supervisory lawyer would be liable for his colleague's misfeasance or malfeasance in disciplinary proceedings if he ratifies misconduct or failed to take steps to prevent misconduct when aware of it.

The code would also, for the first time, set out standards of behavior for lawyers as conventional advocates in the legal system but lawyers who function -- outside the traditional bounds of the legal system -- as advisers, intermediaries, and as counsel to governments and other public or private organizations.

This last proposal -- in what will undoubtably be one of its most controversial provisions -- encourages corporate lawyers to battle internally against legality and, if unsuccessfull, to expose wrong doing.