1. Demanding language: “puntilio of an honor most sensitive” vs. practical realities; need to re-ground in tort & contract common law standards
2. Essential fiduciary duties: preserve confidences, avoid impermissible conflicts (loyalty), honesty & fair dealings, safeguard property. See Rstmt §16(3)

Tort: negligent, reckless or intentional breaches of fiduciary duties
Equity: accounting, injunction, constructive trust, forfeiture; “equity does what needs to be done”
& malleable equitable doctrines (unclean hands, estoppel, etc.)
Agency: Client is Principal, with authority to control
& direct conduct of Agent (including Lawyer) See, e.g., Rstmt §20: Duty to inform & consult with
Client

• Some jurisdictions: relaxed standard
(“substantial factor” rather than “but for”)
• P & D both need expert witnesses (single expert to address both negligence & fiduciary duties)
• Risk that conflict of interest can morphe ordinary negligence claim into actionable fiduciary breach
> increase damage exposure
• Defense strategies: motions to dismiss, for summary judgment & to exclude evidence

Informed consent doctrine?
Recall: Prob. 3-6 Summer Associate’s Memo. C should make settlement decision with Informed Consent (IC), after full disclosure of material risks & relevant alternatives.
See Rstmt §20, RPC 1.0(e) “agreement …to proposed course of conduct after L communicated adequate info. & explanation about mat’l risks of & rsnbly avail. alts. to proposed course of conduct. (used in RPC 1.2, 1.6-1.9)
Highest disclosure obligations apply when adversity in interests of lawyer & client, especially lawyer self-interest
(e.g., fees, business transactions; sex; confidential information; other preferred clients)
Text at 105-111

(text at 109-11)
• Beyond scope of representation;
• Immaterial; unreliable;
• Already known by client;
• Competing obligations require confidentiality;
• Client reasonably agreed to nondisclosure;
• Disclosure would cause serious harm to client or others.

Burrow v. Arce, 997 S.W.2d 229 (Tex. 1999)
(text pp. 112-16)
∙Alleged breaches; procedural posture; disposition
∙Reciprocal influence of Restatement tentative drafts & judicial decisions; conversion table (Tent. Draft § 49 > as adopted in 2000 §37)
∙Judicial discretion to consider total or partial forfeiture, even in absence of actual harm to client
∙Standard: “clear and serious” violation of duty owed client;
TX: public interest (protect integrity of L/Cl relationships by discouraging agents’ disloyalty)
∙Jury: disputed fact questions
Judge: questions of law, amount of forfeiture

• Gravity & timing of violation
• Willfulness
• Effect on value of lawyer’s work
• Actual or threatened harm to client
• Adequacy of other remedies
• Public interest in maintaining integrity of attorney-client relationships (Texas)

text at 116-17, SKIPPED
• L&L: made lateral move from P&W (Atlanta, associates in employment litigation) to A&B
(Memphis litigation matters, “non-equity partners”, compensation package partly based on business generated)
• L&L for Plaintiff Jane Cady v. Midsouth (P&W lawyers as fact witnesses): unsuccessful employment arbitration before single arbitrator
• TASK: Evaluate potential exposure for
Malpractice Carrier

• Fiduciary breaches?
– Litigation decisions? (failure to cx P&W fact witnesses)
– Non-disclosure of relationship w/ P&W? vs. active deception?
– Breach of loyalty?
• Damages caused to Client?
– Fee forfeiture?

(text pp. 117-28)
• Contours of liability remain uncertain (i.e.,
“dangerous theory”
• P = client (e.g., corp. or partnership); D L helped constituent, e.g., President or another partner breach duty owed to client)
• Liability more difficult where P = nonclient
(e.g., Norton, situations in Rstmt §51 & material in Ch. 5)

• Fiduciary breached duty owed to P (e.g.,
Collensbee breached duty owed Norton)
• Dft Lawyer provided “substantial assistance” to fiduciary’s achievement of the breach
• Dft Lawyer knew, or is deemed to have known that fiduciary’s conduct was a breach
(circumstantial evidence or constructive knowledge)
• Fiduciary’s breach caused P’s damages

Reynolds v. Schrock, 142 P.3d 1062)(Or.
text pp. 125-27
• Qualified privilege insulates lawyer from liability, if lawyer’s conduct on behalf of client falls within the permissible scope of scope of representation
(e.g., L merely acted as scrivener, not chargeable with knowledge of and complicity with the breach)
• NOT privileged if L 1) acted outside permissible scope of the cl/L relationship; 2) assisted client with crime or fraud; 3) acted in self-interest

• Partners: mutual agents with full range of duties
(disclose material facts, not divert business opportunities, engage in competing enterprise, or otherwise prefer own self-interest over partners)
• Johnson v. Brewer & Pritchard, P.C., 73 S.W.3d 193 (Tex.
2002) (associate does not breach duty to firm by referring client or potential client to outside lawyer,
absent any pecuniary gain to associate)
• Many complex legal issues, especially on lateral moves, break-off firms. See R OBERT W. H ILLMAN , H ILLMAN ON
L AWYER M OBILITY