Professional Responsibility
Law 115
Wed., Nov. 7
substantial physical harm/death
MR 1.6(b) A lawyer may reveal
information relating to the
representation of a client to the
extent the lawyer reasonably
believes necessary:
(1) to prevent reasonably certain
death or substantial bodily harm;
• Your client, whom you are representing in a
divorce proceeding, tells you that her husband
is furious at his lawyer and plans to beat him
up. She requests that you keep this quiet.
• May you inform opposing counsel under MC,
Va. Rules, or old MRs?
• Spaulding v. Zimmerman
• the defendant’s lawyers (and perhaps the
defendant), but not the plaintiff or his
counsel, are aware that the plaintiff has a life
threatening aneurism resulting from accident
caused by defendant’s negligence.
• Assuming that the defendants do not want to
divulge the information, may their lawyers do
so anyway under MC, Va. Rules, or old MRs?
a client reveals that he has dumped
toxins in a river
may you tell the people who might
be harmed under MC, Va. Rules, or
old MRs?
forced exceptions
Tarasoff v. Regents of the University
of California
(Cal. 1976)
Hawkins v. King County
(Wash. App. 1979)
DUTY OF LOYALTY
(conflicts of interest)
10
• Conflicts concerning current clients
11
• Rule 1.7 Conflict Of Interest: Current Clients
• (a) Except as provided in paragraph (b), a
lawyer shall not represent a client if the
representation involves a concurrent conflict
of interest. A concurrent conflict of interest
exists if:
• (1) the representation of one client will be
directly adverse to another client
12
• (2) there is a significant risk that the
representation of one or more clients will be
materially limited by the lawyer's
responsibilities to another client, a former
client or a third person or by a personal
interest of the lawyer.
13
• (b) Notwithstanding the existence of a
concurrent conflict of interest under
paragraph (a), a lawyer may represent a client
if:
• (1) the lawyer reasonably believes that the
lawyer will be able to provide competent and
diligent representation to each affected
client…and
• (4) each affected client gives informed
consent, confirmed in writing.
14
• Unconsentable conflicts:
• 1.7(a)(1) lawyer cannot reasonably believe that
she will be able to provide competent and
diligent representation to each affected client…
• 1.7(b)(2) the representation is…prohibited by
law
• 1.7(b)(3) the representation involves the
assertion of a claim by one client against
another client represented by the lawyer in the
same litigation or other proceeding before a
tribunal
15
• You represent A for the purposes of drafting
his will and creating a trust for his children. B
asks you to represent him in his suit against A
for breach of an unrelated contract.
16
• You are a famous civil rights lawyer who
specializes in cases of police brutality. A police
officer asks you to defend him in a civil rights
action in which he claims to have been falsely
accused of police brutality. May you
undertake to represent him?
17
• You represent C in a tort suit concerning a car
accident involving A, B and C’s car. A and B
are suing C. A few weeks into the case A
decides to bring a crossclaim against B
claiming that B’s negligence too caused the
accident. Because so many of the same
arguments that B will give against A are
arguments that C will give against A, B asks
you to represent him in connection with the
crossclaim. He will retain his own lawyer in
connection with his suit against C.
18
• Comment 17
• Paragraph (b)(3) describes conflicts that are
nonconsentable because of the institutional
interest in vigorous development of each
client's position when the clients are aligned
directly against each other in the same
litigation or other proceeding before a
tribunal. Whether clients are aligned directly
against each other within the meaning of this
paragraph requires examination of the context
of the proceeding.
19
Westinghouse Elec. Corp. v. KerrMcGee Corp.
(7th Cir. 1978)
imputation
MR 1.10
• Positional conflicts
22
Lawyer represents Bank1. Lawyer
also represents Consumer who is
bringing a suit against Bank2,
arguing that its ATM fees are illegal.
Bank1 charges the same fees.
• Comment [24] Ordinarily a lawyer may take
inconsistent legal positions in different
tribunals at different times on behalf of
different clients. The mere fact that
advocating a legal position on behalf of one
client might create precedent adverse to the
interests of a client represented by the lawyer
in an unrelated matter does not create a
conflict of interest.
24
• A conflict of interest exists, however, if there is
a significant risk that a lawyer's action on
behalf of one client will materially limit the
lawyer's effectiveness in representing another
client in a different case; for example, when a
decision favoring one client will create a
precedent likely to seriously weaken the
position taken on behalf of the other client.
25
• Factors relevant in determining whether the
clients need to be advised of the risk include:
where the cases are pending, whether the
issue is substantive or procedural, the
temporal relationship between the matters,
the significance of the issue to the immediate
and long-term interests of the clients involved
and the clients' reasonable expectations in
retaining the lawyer.
26
Does the 7th Circuit analyze
Westinghouse as a positional
conflict case (i.e. its arguments for
API will materially limit its
representation of Westinghouse
and visa versa)?
Assume that Westinghouse has
sued Getty for breach on an
unrelated contracts.
Would K&E have to get Getty’s
consent to the conflict?
quasi-clients
how was K&E supposed to discover
the conflict?
• advance waiver of conflicts
31
• Comment 22 to MR 1.7
• If the consent is general and open-ended, then the
consent ordinarily will be ineffective, because it is not
reasonably likely that the client will have understood
the material risks involved.
• On the other hand, if the client is an experienced user
of the legal services involved and is reasonably
informed regarding the risk that a conflict may arise,
such consent is more likely to be effective, particularly
if, e.g., the client is independently represented by
other counsel in giving consent and the consent is
limited to future conflicts unrelated to the subject of
the representation.
32
Fiandaca v Cunningham
(1st. Cir. 1987)
• Hot potato rule
– Under 1.7 and 1.9 a lawyer can sue a former client
concerning issues not substantially related to the
earlier representation
– Rule 1.16 allows a lawyer to terminate the
relationship when there is no material adverse
effect on the client as a result of the termination.
34
• You represent company A in a small contract
dispute. B approaches you and suggest that
you represent him in a mega-million dollar
class action suit against A. You are sure that A
will not consent to your representing B.
• May you terminate the relationship with A,
and represent B?
– Assuming no material adverse effect will result
from the termination, eg because in early stages.
35
• Thrust-upon conflicts
– You discover late in game (and unforeseeably) that
you have a conflict
– no consent (by one or both) is available
– you try to solve it by dropping a party
36
• Personal Interest Conflicts 1.8
– All imputed to other members of firm (except
1.8(j) – sexual relations)
• See 1.8(k)
• While lawyers are associated in a firm, a prohibition in
the foregoing paragraphs (a) through (i) that applies to
any one of them shall apply to all of them.
37
• Business transaction with client
• 1.8(a) A lawyer shall not enter into a business
transaction with a client or knowingly acquire
an ownership, possessory, security or other
pecuniary interest adverse to a client unless…
38
• (1) the transaction and terms on which the
lawyer acquires the interest are fair and
reasonable to the client and are fully disclosed
and transmitted in writing in a manner that
can be reasonably understood by the client;
39
• (2) the client is advised in writing of the
desirability of seeking and is given a
reasonable opportunity to seek the advice of
independent legal counsel on the transaction;
and
40
• (3) the client gives informed consent, in a
writing signed by the client, to the essential
terms of the transaction and the lawyer's role
in the transaction, including whether the
lawyer is representing the client in the
transaction.
41
• If duty of disclosure and consent not satisfied,
lawyer can be disciplined
– Even if the transaction is reasonable
– And even if the lawyer loses money
42
• Lawyer is representing client in slip and fall
litigation
• Lawyer also enters into an agreement with
client to buy piece of property
• Does 1.8(a) apply?
43
• What about buying a stick of gum from your
client’s store?
• Is that a violation of 1.8(a), unless informed
consent etc.
44
• Comment 1 to 1.8
• In addition, the Rule does not apply to
standard commercial transactions between
the lawyer and the client for products or
services that the client generally markets to
others, for example, banking or brokerage
services, medical services, products
manufactured or distributed by the client, and
utilities' services.
45
Iowa State Bar Assn v Mershon
(Iowa 1982)
• Different problems of being lawyer for startup
(even when you don’t get a cut)
• First lawyer for people creating startup
– Representing adverse sides in transaction
• Then represent corporation instead (or also)
– Could have conflict due past (or continued)
representation of the people starting up
47
• One financial transaction almost always occurs
between lawyer and client
• Fee for legal services
• Will discuss this later
– R 1.5
48
1.5(a) A lawyer shall not make an agreement for,
charge, or collect an unreasonable fee or an
unreasonable amount for expenses.
(b) The scope of the representation and the basis
or rate of the fee and expenses for which the
client will be responsible shall be communicated
to the client, preferably in writing, before or
within a reasonable time after commencing the
representation, except when the lawyer will
charge a regularly represented client on the same
basis or rate.
• Assume that L draws up the papers for a
startup corp - gets hourly fee
• after project is completed C offers to sell L
shares at below market rate because he
believes that L did good work and wants to
cement the relationship
• What should L do?
50
• Client gifts?
51
• 1.8(c) A lawyer shall not solicit any substantial
gift from a client, including a testamentary
gift, or prepare on behalf of a client an
instrument giving the lawyer or a person
related to the lawyer any substantial gift
unless the lawyer or other recipient of the gift
is related to the client.
– For purposes of this paragraph, related persons
include a spouse, child, grandchild, parent,
grandparent or other relative or individual with
whom the lawyer or the client maintains a close,
familial relationship.
52
1.8(d)
Prior to the conclusion of
representation of a client, a lawyer
shall not make or negotiate an
agreement giving the lawyer literary or
media rights to a portrayal or account
based in substantial part on
information relating to the
representation.
• you have an poor client you are representing
in an eviction case and you put him up in a
hotel
54
• 1.8(e) A lawyer shall not provide financial
assistance to a client in connection with
pending or contemplated litigation, except
that:
• (1) a lawyer may advance court costs and
expenses of litigation, the repayment of which
may be contingent on the outcome of the
matter; and
• (2) a lawyer representing an indigent client
may pay court costs and expenses of litigation
on behalf of the client.
55
• Champerty
• Maintenance
56
• 1.8(i) A lawyer shall not acquire a proprietary
interest in the cause of action or subject
matter of litigation the lawyer is conducting
for a client, except that the lawyer may:
• (1) acquire a lien authorized by law to secure
the lawyer's fee or expenses; and
• (2) contract with a client for a reasonable
contingent fee in a civil case.
57
• Special rules on contingency fees
58
1.5c
A contingent fee agreement shall be in a writing signed by
the client and shall state the method by which the fee is to
be determined, including the percentage or percentages
that shall accrue to the lawyer in the event of settlement,
trial or appeal; litigation and other expenses to be
deducted from the recovery; and whether such expenses
are to be deducted before or after the contingent fee is
calculated. The agreement must clearly notify the client of
any expenses for which the client will be liable whether or
not the client is the prevailing party. Upon conclusion of a
contingent fee matter, the lawyer shall provide the client
with a written statement stating the outcome of the
matter and, if there is a recovery, showing the remittance
to the client and the method of its determination.
• Personal interests affecting representation
– Need not be mentioned in 1.8
60
• You are a partner in a small law firm. Another
partner in your firm is representing P, who is
suing D in a personal injury case. D is
represented by your husband, who is counsel
for D’s insurance company.
• Any conflicts problems?
61
• Comment [11] to 1.7
• When lawyers representing different clients in the same
matter or in substantially related matters are closely related
by blood or marriage, there may be a significant risk that
client confidences will be revealed and that the lawyer's
family relationship will interfere with both loyalty and
independent professional judgment. As a result, each client is
entitled to know of the existence and implications of the
relationship between the lawyers before the lawyer agrees to
undertake the representation. Thus, a lawyer related to
another lawyer, e.g., as parent, child, sibling or spouse,
ordinarily may not represent a client in a matter where that
lawyer is representing another party, unless each client gives
informed consent.
62
• The disqualification arising from a close family
relationship is personal and ordinarily is not
imputed to members of firms with whom the
lawyers are associated. See Rule 1.10.
63
• Having sex with clients
64
• 1.8(j)
• A lawyer shall not have sexual relations with a
client unless a consensual sexual relationship
existed between them when the client-lawyer
relationship commenced.
65
• Problem of jointly representing criminal
defendants
66
• Comment [23] to 1.7 … The potential for
conflict of interest in representing multiple
defendants in a criminal case is so grave that
ordinarily a lawyer should decline to represent
more than one codefendant.
67
• When does a conflict in representing joint
criminal defendants result in ineffective
assistance of counsel?
68
• Problems in representing joint clients in
transactional work
• First problem
– Don’t know you are jointly representing
69
• But joint representation can be in clients’
interest
• Despite disadvantages
– Especially if there is a falling out
– No attorney client privilege with respect to one
another
– And cannot represent one in a substantially
related issue unless the other consents
70
• Puzzle about confidentiality in joint
representation
• AvBvHill Wallack
• Lawyer jointly represents husband and wife
husband in connection with drafting will
• Husband discovers he has an illegitimate child
• Husband says don’t tell wife
• What do you do?
71