2014 SPRING
MICHELS PROFESSIONAL RESPONSIBILITY Torts Outline Professor: I.
Goals A.
B.
C.
II.
Kevin Michels Avoiding Disbarment Preparation for MPRE Preparation for a legal practice 1. Balance between interests of a) Client b) Lawyer c) Courts d) Adversary e) Public 2. Vision for Excellence HYPOTHETICALS A. Mary & Dave (Spalding vs Zimmerman) 1. Facts a) Dave is driving and automobile with Mary as a passenger b) Dave runs into Larry’s car and both Mary and Larry are injured c) Mary sues Dave d) Mary goes to a doctor at the request of her attorney, Dr. Lucy finds no injuries e) Mary goes to a doctor at the request of Dave’s attorney, Dr. Brown finds that Mary suffers from an aorta problem that could result in instant death f) Mary’s attorney offered a $5,000 settlement 2. We are Dave’s attorneys, what do we do? a) Speak with Dave and disclose the recent development (1) What are the legal consequences of disclosure? (a) Economically devastating for Dave (2) Is failure to disclose illegal? (a) b) Fairness business 3. Take Aways a) May lawyers participate in non­legal discussions/decisionmaking Page 1 of 15 2014 SPRING
MICHELS III.
IV.
V.
PROFESSIONAL RESPONSIBILITY (1) Under RPC 2.1 lawyers are allowed to participate in discussions outside of the legal realm. (2) An attorney is not telling the client what to if he is informing the client of the non­legal (political, ethical, normative) considerations (3) Lawyers may be valuable advisors to clients outside of the strict lawknowing, lawyering role (4) Participating in the discussion without stepping on the client’s toes b) Who is a professional & what is a professional? (1) Attorneys’ obligations are not only to maximize profits but to protect a client and society (a) E.g Attorneys may not bill whatever they want (2) Professional: someone with expertise who owes duties that non­professionals do not have. Client bestowes trust What is a Professional & Who Should Be a Lawyer? A. Educational Requirement B. Character Requirement 1. Lane v Nebraska Bar a) Substantive disagreement without personalization b) Disagreement is a basis for the legal system c) DISCLOSURE MATTERS (1) Disclosing is a common objective reason to deny d) Difficult to form fast rules about character, integrity, fitness ethics, and morality (1) Even if unethical, what punishment should be attached The Law of Lawyering A. ABA Model Rules of Professional Conduct 1. No force or effect except for the extent to which adopted by states 2. Rules of Professional Conduct of Washington are similar but provisions differ 3. MPRE focuses on the model rules B. Committee Opinions released in each state Washington Committee on professional ethics. Opinions are usually advisory but important. C. Court interpretations of the legal ethics rules D. Restatement of the law governing lawyers E. Malpractice case law: tort law is a non­disciplinary method for enforcing lawyer behavior F. Evidence and Civil Procedure rules Disciplinary Process Page 2 of 15 2014 SPRING
MICHELS VI.
VII.
PROFESSIONAL RESPONSIBILITY A. Grievance: person complains of attorneys wrongdoing 1. Reacting to a reported grievance aggressively may result in creating a ethical violation B. Disciplinary Official Review: determination of whether a C. Complaint 1. The wrongdoing is often publicly disclosed D. Hearing: panels take testimony and decides whether there is a violation and, if so, what the punishment should be E. Intermediate Review: appellate panel to review the decision of the hearing panel is valid/good/fair F. State Supreme Court 1. Full Review: presentation of the case before the Supreme Court a) Often widely publicized case 2. Many states require that the State Supreme Court write off on all conduct discipline Unauthorized Practice of Law A. Birbrower v Superior Court 1. New York law firm represents client in arbitration in California with no attorneys admitted to practice in California 2. CA Court relieved client of more than $1,000,000 in legal fees because the firm was not authorized to practice law in CA B. Local Counsel: whenever a case involves another state, hire an attorney from the other state to supervise the work C. Pro Hac Vice: admission to a state’s bar just for purposes of the case, 1. Most States Require: a) Licensed in Home State b) Pending disciplinary proceedings now c) Hire local attorney to work with you on the case d) Must bring local counsel with you to court 2. When an attorney calls about using you as local counsel ask if you’re going to be a lame duck participant Accepting and Rejecting Clients A. Reasons NOT to take clients 1. Dishonest Client: untrustworthy client could turn on attorney and compromise reputation a) Determining Dishonesty: if a client has an internally inconsistent story. Request a detailed narrative, dishonest clients hate details. b) Michael Tigar: matrix chronology of every essential fact with columns of the fact, the time, and the source of the fact. Page 3 of 15 2014 SPRING
MICHELS VIII.
PROFESSIONAL RESPONSIBILITY 2. Drawing line between suspecting dishonesty and knowing client is deceiving 3. Likelihood of success in a contingency case (Book: A Civil Action) 4. Conflict of Interest B. PRACTICE TIP: Be wary of which clients you take as an attorney C. Preliminary Problems (pg. 94) 1. Amanda problem with tenant, not hired a) Send a disengagement letter (1) Avoid malpractice liability (2) Easier to take adverse party as client later b) 1.16 ­ How to decline representation (1) Clarity in whether you represent c) 1.18 ­ Duty to prospective clients (1) Confidentiality even though no relationship forms (2) Conflict if adverse party requests representation (a) 1.18(d) ­ way to avoid the firm becoming entirely disqualified by conflict 2. XYZ Employee complains of conduct to in­house counsel a) Clarify that you do not represent employee b) Conflict, duty to organization c) Employee NOT represented or protected by the in­house counsel d) PRACTICE TIP: lecture to the employee(s) about the in­house role, company wide lecture and individual 3. Preparing a witness a) Truth, Truth, Truth b) Legitimate reasons for preparing a witness (1) Difficult to answer questions well/accurately the first time (2) Not good to be surprised c) 3.4(f) Mistakes, Malpractice A. Expectations 1. Lawyers are expected to be perfect and never make mistakes 2. Apply a discrete body of knowledge to specific set of facts with another person 3. Failure is a sign of incompetence and malpractice B. Reality 1. We are all human beings who make mistakes 2. Hindsight reveals imperfections that challenge the expectation of perfection C. Doctor Malpractice Hypothetical 1. Everyone will commit an act of negligence before finishing the practice of law. 2. Statistically, lawyers will commit an act of negligence while practicing Page 4 of 15 2014 SPRING
MICHELS PROFESSIONAL RESPONSIBILITY 3. Perfection is is not a sustainable standard for anyone 4. Mistake is too small of a word is it because a) You are indifferent b) You keep making mistakes c) You were told of a risk and chose to ignore D. How to think about mistakes 1. If it is true that we will all make mistakes that result in negative results 2. Michel’s Mindset a) Problem: challenge posed by mistakes (1) Eg. Entrepreneurship, software 1.6, bugs, defects (2) When professionals make mistakes they are losers, incompetent b) Mistakes are an opportunity to learn c) Perfection is the enemy of the good d) Cannot believe that we are really bad lawyers, self identity (1) Can make a mistake and still be a good lawyer, good person, grow from them, and tell a client I gave it my best but I made a mistake. (2) Look at the entire body of a person’s work e) Psychologically crippling to internalize mistakes f) Systems for feedback 3. Tendency not to tell them E. Law of Negligence, Competence, Malpractice 1. We owe the client of a duty of care 2. Malpractice is a professional negligence standard a) Did you act as a reasonably competent and prudent lawyer? b) Did it result in a loss? (1) Difficult to prove (2) Causation (3) Would the result have been different 3. Malpractice: Civil Breach / Civil Liability 4. RPC Rule 1.1 ­ you must be competent a) “A lawyer shall be competent…” b) Some states “Incompetence shall be a pattern…” 5. Many states equate malpractice with a disciplinary violation under 1.1 a) Prosecutors often recognize that it should not be completely equated and look for a pattern of mistakes, reckless behavior… 6. MUST disclose the mistake to the client a) RPC 1.4: must keep the client reasonably informed b) Very harsh: make a mistake and do not inform the client Page 5 of 15 2014 SPRING
MICHELS IX.
PROFESSIONAL RESPONSIBILITY (1) Intentionally withholding information (2) Could damage their case (3) Could frustrate ability to recover from malpractice suit c) Failure to disclose: breach of fiduciary duty, separate unethical case 7. Third parties may sue attorneys for malpractice a) Examples: Will drafter; Property report b) Law Review Article in Georgetown Ethics c) Courts over the map about when there is a third party duty d) Limit Liability: create protection by adding that nobody except the client may rely upon this information. Reliance becomes unreasonable 8. RPCs act as evidence in an malpractice claim a) Can’t sue someone for an ethical violation b) RPCs can be used to establish the standard of care owed to a client c) Juries get indignant when they believe a lawyer has acted unethically. Perception of malintention. Fees & Funds A. Trust Accounting 1. Reasons for having money in trust a) Escrow in real estate deal b) Corporate transaction ­ money held until party satisfies obligation c) Settlement payment ­ pay out for experts, costs, fees etc. d) Collection Action ­ money collected for client from debtor 2. Attorney acts as trustee of money held for the benefit of others 3. Results of abuse a) People lose money b) People get sued c) Legal profession takes a reputational hit 4. Example a) Client gives money to attorney that they need in 6 months b) Attorney puts money in trust account c) Daughter calls and needs money to stay in college d) Attorney pulls money out of trust account and sends it to daughter e) Attorney gets paid by other client f) Attorney replaces money borrowed from the trust account g) Client returns for the money and receives it in full h) Auditor goes through trust account books and finds attorney borrowed money i) Attorney is disbarred 5. No defense for use of trust funds by an attorney Page 6 of 15 2014 SPRING
MICHELS PROFESSIONAL RESPONSIBILITY 6. Rational: when clients give money to attorneys, it must be held inviolate or it will undermine the entire system of trust accounting 7. POWERPOINT ON TWEN B. Practice Finances 1. Opportunities a) Empathize with a client who has no idea how much the services will cost b) How much will this whole thing cost? (1) “A LOT IS NOT UNDER MY CONTROL” (a) Opponents (b) Law (c) Paths that the case takes (d) New more expensive but lucrative paths (e) Not the same as building a house: other party tearing down house? (2) We are going to take as much control as possible (3) I am going to sit down and put together an estimate, please give me some time (4) There are very few things that I will do without discussing it with you in advance. Dialoge; value; efficiency; working together; uncertain domain. (5) Base line of competence which I will not go below because to do so would be incompetent c) Communication Partner with client (1) Value of attorney with client (2) Shows how to be a great lawyer while losing d) Billing and invoices in itemized detail important for being paid and building credibility 2. Pitfalls a) Practitioners feel uncomfortable talking about money with clients (1) Clients and Lawyers are both very concerned about finances b) Be careful not to give the client a number that will box the attorney 3. Retainers a) Advance payment for services that are yet to be rendered. b) Placed in attorney trust account c) Bill against the retainer d) Send client invoice e) Calls out client ­ Earnest Money (1) Signals the client’s understanding of the commitment (2) Takes heat off of subsequent payments, ask less later Page 7 of 15 2014 SPRING
MICHELS PROFESSIONAL RESPONSIBILITY (3) Solidify discussion regarding value and expense of legal representation. 4. Threat of client leaving before case is finished a) Fee Collection (1) Retaining Lien: bad idea to withhold client papers and materials pending full payment of their services (a) Hinders litigation (b) Self help mechanism (c) Interferes with client’s right to choose counsel (2) Suing former client for fees (a) Fee arbitration system (i)
Give client notice of fee arbitration (ii)
Informal, quick, inexpensive (b) Some states only have an arbitration option for clients (3) Danger of clients interposing claim of malpractice (a) Solution: never allow a client to run up a large invoice (b) Find out if you are not going to get paid by billing often and finding it early (c) Get out early b) Protection in Contingency Fee Case (1) Proceeds Lien: write a letter to the court and the new attorney saying that I worked on this case and I should be paid before disbursement of the judgment (a) How to calculate the portion? (i)
By agreement between the attorneys (ii)
Fee Allocation Hearing: Decision by the judge when attorneys cannot agree X.
XI.
XII.
MPRE Scope of Representation A. Client Objectives vs Means to accomplish the objectives 1. Will the limitation on scope interfere with the attorney’s ability to accomplish the means 2. Cannot give objective that is inconsistent with the means allowed 3. Client Objectives Test a) Find the objectives of the client b) What is reasonable for accomplishing the client’s objectives Confidentiality A. Purpose: a lawyer without full confidentiality protections will not be able to provide effective counsel. Fair, full and free communication with counsel is key to creating a fair Page 8 of 15 2014 SPRING
MICHELS B.
C.
D.
E.
F.
PROFESSIONAL RESPONSIBILITY trial and protecting the people’s rights. 1. Social value of lawyers helping citizens follow rule 2. Categorical rule is easier to follow In the Matter of Anonymous 1. Facts: wife discloses domestic abuse to an attorney who sends her to another attorney. Original attorney tells another person about the domestic abuse. 2. Result: private reprimand RPC 1.18 ­ Duty to Prospective Client 1. Concerns that clients take advantage of the duty of confidentiality by seeing attorneys which they know they plan not to retain. a) Can use law partner to do intake so that other attorney won’t be conflicted out. Privilege Log 1. When a discovery request is made and you believe that one or more of the documents is privileged, record it and disclose its existence vaguely to the opposing side 2. FRCP 26(B)(5) Ethical Duty of Confidentiality: information relating to the representation 1. EXCEPTIONS a) Consent (1) Implied or Express (2) When in doubt, confirm with the client (3) Third Party: a third party may want a copy of invoices etc. b) Waiver (1) Disclosing information to opposing or third parties (2) Handing over privileged information (3) Inadvertent Disclosure: information is protected if disclosure of privileged information is made (a) Inadvertently (b) By a firm with reasonable precautions AND c) Attorney Self­Defense Exceptions (1) Attorneys can use confidential information in a dispute with a client (2) Limited to information Work­Product Protection: documents prepared in anticipation of litigation 1. Hickman v Taylor 2. Very strong protections because attorneys must be free to reduce tactics & strategies to writing. Otherwise it could harm client. 3. Settlement matters because so many cases settle so we need to be candid with Page 9 of 15 2014 SPRING
MICHELS XIII.
XIV.
XV.
PROFESSIONAL RESPONSIBILITY clients so that they can make correct decisions. 4. Corporations a) Day 1: Corporate Execs send e­mails about new drugs they are going to sell b) Day 10: Dispute between company and other pharm company c) Day 11: Corporation prints e­mails and gives them to attorney d) Day 30: Opposing attorneys request e­mails e) NOT PRIVILEGED G. Attorney­Client Privilege: confidential communication between attorney and client for the purpose of securing legal advice. CONFIDENTIALITY EXCEPTIONS A. 1.6(b)(1) Death: a lawyer may reveal information relating to the representation of a client to the extent the lawyer reasonably believes necessary to prevent reasonably certain death or substantial bodily harm. 1. Many jurisdictions use “shall” in place of “may” 2. Possible duty to a third party B. 1.6(b)(2) Death: a lawyer may reveal information relating to the representation of a client to the extent the lawyer reasonably believes necessary prevent the client from committing a crime or fraud. C. UNIT 3 REVIEW pg 254 TRIBUNAL CANDOR A. Nix v Whiteside 1. Man stabs other man in chest 2. Attorney refused to allow defendant to perjure in order to fabricate self defense 3. Proper Process ­ Do not present evidence or possible withdraw. B. Right to effective assistance of counsel does not create a right to perjure. C. Firm factual foundation to believe it is false D. New York Solution: allow defendant to narrative. 1. Tips off prosecution 2. Judicial discretion 3. Allows attorney to avoid supporting perjury, or does it? E. Problem of client who lies to attorney 1. Helpful to learn that the client is lying early on 2. Clients who lie fear detail, elicit layer upon layer of detail to figure out if the client is lying. 3. Inconsistency red light NEGOTIATIONS & MISREPRESENTATION A. RPC 4.1 1. Rule discontinues to apply after withdrawal from representation. Page 10 of 15 2014 SPRING
MICHELS XVI.
PROFESSIONAL RESPONSIBILITY 2. Hypothetical a) Actors (1) Baker Street Shopping Center, Inc.­ Landlord (2) Larry Lawyer ­ Landlord’s Lawyer (3) Mary CEO ­ Landlord CEO (4) Delicious Bakery ­ Tenant (5) Bank ­ Landlord Mortgage Holder b) Delicious wants to lease space within Baker’s shopping center and so Mary wants Larry to draft lease. Larry and Mary know that the bank is foreclosing on the property but do not disclose to Delicious but do include a quiet enjoyment. CONFIDENTIALITY AND COUNSELING COMPLIANCE A. Class Discussion on Waterboarding Prisoners of War. 1. From the perspective of the executive’s attorneys 2. Memos from the office of legal counsel recommend that waterboarding was not classified as torture, although a 2nd Circuit case concluded otherwise. 3. Attorneys were attempting to justify the action that the client (Bush Administration) wanted to hear 4. What was the ethical obligation of the legal counsel in this situation. a) Need to answer the question thoroughly by examining all of the underlying legal issues and then provide a conclusion. 5. Argument against the legal counsel a) Did not admit bad precedent. b) Did not qualify advice. c) Personal view that the administration should be able to do this. 6. Counter Argument a) This nuanced part of the law is complicated and indeterminate and so there is room for people to disagree while exercising independent advice in good faith. 7. Clear and Convincing standard B. RPC 2.1 ­ ADVISOR 1. Lawyers are not hired to skew information when giving advice to client 2. Word “COUNSELOR” makes a difference 3. Independant: not swayed by client’s preference a) Does not mean “no conflicts of interest” 4. Professional Judgment: what is gained through law school and being part of the legal community. It includes what the community considers reasonable and rational standards for a reasonably competent lawyer. 5. Independent Professional Judgment is different from non­Frivolous. Page 11 of 15 2014 SPRING
MICHELS XVII.
PROFESSIONAL RESPONSIBILITY C. Does the law have enough objectivity to even allow for independent legal advice? D. Hypothetical regarding corporation where an employee confesses the release of toxins by the Co. 1. First Talk with the CEO 2. Second Talk with the Board of Directors a) Communications with CEO and BoD are not breach of confidentiality b) Original talk with employee is CONFLICTS OF INTEREST A. Hypothetical 1. Benington Pharmaceuticals In­House Counsel 2. Company produces hip replacements 3. The Hipster has declined in sales in recent months 4. Rumors in the medical community that the hip is not effective as other hip replacement devices 5. Legal Question: create a program where company pays $10,000 secret consulting fee to surgeons who implant the replacement 6. Tom CEO ­ “I’m counting on you, I need this program to make this company viable” 7. Assume that the program is illegal commercial bribery 8. Questions a) What type of pressures are on you as a lawyer? (1) SOLE CLIENT (2) UNDER DIRECT SUPERVISION & CONTROL (3) Family, Community, Friends Pressures (4) Likelihood of finding another job b) What do you do? (1) AFFIRMING THE CEO (2) TELL TOM THAT THE PLAN IS ILLEGAL (3) DEVELOP POSSIBLE ALTERNATIVE COURSES OF ACTION c) How could those pressures affect you as a lawyer? d) How do you tell the CEO that you are not going to do this? B. ANSWERS 1. Just because there are pressures it does not justify a bad act 2. Neutral advisors are required to avoid secret payments 3. Pressures a) Family, Community, Friends Pressures b) Co­Workers are Personal Friends c) Financial Vulnerability Page 12 of 15 2014 SPRING
MICHELS XVIII.
PROFESSIONAL RESPONSIBILITY (1) Only Client / Lose Job (2) Fate of Company Tied to Success of Company d) Looking to own values, want to do the right thing e) Conflict Avoidance ­ psychological trap f) If you don’t do what I want then you are disloyal and failing me. g) Milgram Experiment ­ deference to authority figures h) Favor people that we know and see 4. Why do pressures matter? Because they lead good, rational, and otherwise normal people to do bad things. C. Ethical Trap: situations that psychologically influence a person to act unethically 1. Diffusion of Responsibility ­ belief that another in the group will resolve issue. 2. Sense of Loyalty ­ pressure created by relationship to another and the desire to please that person. 3. Deference to Authority ­ Milgrim experiment shows people will obey authority figures. 4. Favor Those Known Personally ­ people are more likely to punish those who they have never met or seen in favor of those they know personally. Cannot visualize the victim. 5. Conflict Avoidance ­ people do not want to harm, discourage, or displease other people, even if doing so is more ethical and beneficial. 6. Conformity ­ failure to address issue in order to conform with the status quo. 7. Financial Vulnerability ­ threats to livelihood could encourage unethical decision 8. Tyranny of Goals ­ opportunity 9. Small Steps ­ one small unethical decision leads to another D. Voice ­ How To Respond to Ethical Traps 1. Incredibly difficult to respond to the pressure of most ethical traps Conflicts of Interest A. 1.7 Current Client 1. Concurrent: applies to contemporaneous representation of clients B. 1.8 Current Client Specific Rules 1. A&C Conflict: applies to conflicts between attorneys and clients 2. No Transactions with a client or possessory interest in client company UNLESS a) Deal is Fair and Reasonable b) Full Disclosure in Writing that client understands c) Advise client to seek independent legal counsel (best practice: must have client do it) d) Informed consent: is the lawyer representing the client in the transaction between the lawyer and client. Page 13 of 15 2014 SPRING
MICHELS XIX.
PROFESSIONAL RESPONSIBILITY C. 1.9 Duties to Former Clients 1. Former: applies to conflicts with former clients D. 1.10 Imputation Conflicts E. 1.11 Former Government Work F. 1.12 Former Judicial / Clerkship Position Client Identity A. WHO IS THE CLIENT? 1. Entities can divide an attorney's’ loyalty a) Creation of a Corporation: does the attorney represent creator 1, creator 2, or the corporation b) Representing Creator 1 & 2 elicits conflicts c) Representing Corporation is facile and only Creator 1 & 2 are interested in the corporation (RPC 1.13) B. WHO IS NOT THE CLIENT? 1. In writing, inform those who are not represented by you C. WAIVER 1. RPC 1.7(b) 2. How to act diligently while having a conflict: a) The limitation of scope may keep the representation from being invalid by allowing the attorney to give both parties exactly what they what. b) SO ­ ask the parties what they want c) THEN ­ decide whether they can obtain what they want without the conflict undermining their interests 3. Required contents a) DON’T say that there is a potential conflict of interest b) DO say that there is a current and potential conflict of interest (1) Nature of the problem (2) Downsides of moving forward together (a) Analyze every step of the representation for places where the representation could be compromised by the conflict (3) Reasonably believe that you can do it c) DO say that any and all communication between the client and attorney will be shared with the other client. (Confidentiality) d) e) DO encourage them to speak with other attorneys before signing the conflict waiver D. LIMIT SCOPE 1. RPC 1.2 allows the limit of scope of limitation Page 14 of 15 2014 SPRING
MICHELS PROFESSIONAL RESPONSIBILITY 2. Use scope limitation to restrict or eliminate the conflict Page 15 of 15