PROFESSIONAL RESPONSIBILITY OUTLINE – FALL 2006 (F0X)
A. Four fiduciary duties of lawyers
4. Loyalty (proper response to conflicts of interest)
Important themes to keep in mind:
HAVE FORESIGHT – how might the situation change in the future and what’s the probability that it
DISCLOSE – especially when you’ve done something wrong.
YOU’RE NOT THE ONLY LAWYER IN EXISTENCE – many situations warrant deferral.
Important thing is getting the client the best person to do the job, might not always be you.
CHOOSE CLIENTS CAREFULLY – who you represent today affects who you can represent
GET CONSENT – for all potential conflicts!
PRESERVING JUDGMENT – the Rules are all about creating the best possible environment for both
the client and the lawyer to be able to exercise their best objective judgment. Neither should influence
the other too much.
II. DECIDING WHOM TO REPRESENT
A. Rule 6.1 – Voluntary Pro Bono Service: Every lawyer has a professional responsibility to provide
legal services to those unable to pay. A lawyer should aspire to render at least (50) fifty hours of pro
bono public legal services per year. See rest of rule for guidelines to how the lawyer should fulfill his
1. Note that this is a SHOULD rule not a SHALL or MUST rule. Should it be a requirement or a
recommendation as it is?
i. We want lawyers who want to do pro bono, not who are forced to do it, b/c people forced into it
won’t work zealously.
ii. Not all lawyers are able to put in 50 hours – not all lawyers work at firms
2. In FL there is a hortatory (suggested) obligation, but a mandatory reporting requirement for whether
the lawyer performed his pro bono. This has led to a huge increase in pro bono in Florida.
B. Judge-Appointed Representations
1. Bothwell v. Republic Tobacco Co. (D. Neb. 1995): The Court has the inherent right to appoint
counsel in a civil case if the litigant was denied counsel b/c of his indigency. If the lack of counsel
was b/c of a lack of marketability of his claims, the court won’t exercise its power to appoint.
i. Facts: The ct appointed L to rep P. P claims that the court cannot appoint her to rep P b/c a
federal court has no statutory or inherent authority to force an attorney to take an ordinary civil
case for no compensation.
ii. Holding: “When indigency is the principal reason for disparate access to the civil justice system
in an individual case, a federal court does possess the inherent authority to bring about a fair and
just adjudicative process by conscripting an unwilling lawyer to rep the indigent party.” The
reasons why a judge may appoint counsel include (1) preserving the integrity of the civil justice
system, (2) lawyers are officers of the court so they’re necessary to preserve the justice system
itself and the ordered liberty of society, (3) lawyers hold a monopoly on access to the courts, (4)
lawyers have an ethical obligation to provide representation to indigent litigants. However, the
court’s inherent power to appoint counsel should only be exercised where it’s reasonably
necessary for the administration of justice.
iii. Note: When determining whether counsel should be appointed for an indigent P, the court
should consider such factors as: (1) the factual complexity of the case, (2) the ability of P to
investigate the facts, (3) the existence of conflicting testimony, (4) the P’s ability to present his
claims, and (5) the complexity of the legal issues.
2. HYPO: Though a law firm has good reasons for not wanting to take a client when a judge appoints
it to, the firm should not say no.
i. Facts: Judge X calls and says that he’s decided that M&F will take on the representation of a
death row inmate – the judge assigns the case to the firm. Bothwell indicates that such an
assignment is within the inherent authority of the judge.
ii. Why M&F might want to say no:
a) It’s expensive to do habeas petitions
b) All M&F lawyers are busy
c) May get negative publicity for the firm for repping bad guys
d) Inmates don’t have a right to counsel on habeas appeals
e) Client seems despicable – so some partners want to say no.
iii. Why M&F can’t say no:
a) Lawyers have an obligation to do pro bono
b) The inmate is indigent, and may be innocent → just because he’s been convicted of rape and
murder doesn’t he’s actually guilty of it; and he may be a good person who has lots of
c) Don’t want to anger the judge
d) It may give the firm good publicity for doing pro bono.
e) The judge has the power to order the firm to do pro bono because lawyers are needed
(1) The system doesn’t provide counsel for people on death row, despite the fact that the
record of reversal in habeas cases is quite high. Therefore there is a lack of
representation – an unfulfilled need. Judge appointment is one way of dealing with the
(2) See rule 6.1 (above) – noting that lawyers have an obligation (though not a requirement)
to do 50 hours a year of pro bono service.
III. LAWYERS, ROLE, AND LAW
A. A lawyer’s duty is to her client, not to the world. While the client may have a duty to others, the lawyer
must focus on the client
B. Role of the Lawyer
1. Is the lawyer a hired gun for the client, or should/must the lawyer obey her own conscience?
i. Individual (client) autonomy and dignity are essential values in a just society.
ii. Until contracted, the lawyer acts independent of the prospective client → so he can act on his own
conscience until he takes on the client.
iii. Lawyers are obligated to give “entire devotion to the interest of the client, warm zeal in the
maintenance and defense of his rights and the exertion of the lawyer’s utmost learning ability.”
2. Two standard ethical justifications for the advocate’s role
i. In an adversarial system, working for your client first is essential
a) Relies on the criminal proceeding paradigm for guidance.
b) Favors the haves, who can afford better counsel
ii. We should not allow attorneys to use their own moral compass b/c:
a) Clients with the most need of moral compass would be without counsel, because counsel
would refuse to advise them given the clients’ moral reprehensibility.
(1) But sometimes the law hasn’t kept up with the actions it purports to govern, such that
behavior that is technically legal is morally unjust
b) And sometimes the state’s moral compass doesn’t match the lawyer’s.
3. Lawyers have a fiduciary obligation to represent clients zealously, motivated by and focused on the
i. Some view lawyers as instruments, doing the client’s bidding
a) Within the bounds of the law and legal system itself
b) Assumes the social fabric is fairly strong, such that absence of morals in lawyer’s duties will
not injure society grievously
c) Careful not to over-identify with client
ii. Others view lawyers as directors, guiding clients
a) As the expert, should determine the course of action client should take with little client
b) Problem with directive behavior: Under-identification with client.
(1) Lawyers often assume an air of authority, and attempt to define the scope, outcome, or
process of the atty-client relationship
(2) Lawyers assume all clients would want the same result (usually, but not always true)
(3) Most dangerous when the client is unfamiliar with the law.
(4) Lawyers breaching a duty will be liable for torts and subject to professional discipline,
regardless of intent.
(i) Lack of sinister intent mitigates, but does not absolve attorney.
iii. Lawyers can also be viewed as collaborators
a) A combination of the above – lawyers must help clients articulate what the client wants to
(and should) do, but the lawyer should neither dominate nor be dominated by the client.
b) HYPO: A lawyer must do what the client wants (if it’s legal), but if the lawyer thinks it’s not
advisable she may also advise the client; Rule 2.1 allows the L to give advice about non-legal
(1) Facts: M gets a call from a client who wants M to write him a new will cutting out his
gay grandson. Do you write the will?
(2) Analysis: Yes, b/c people have the right to do with their money what they will → it’s not
the lawyer’s job to impose his moral views on his clients.
(i) But maybe M could counsel her client on the wisdom of the decision.
(ii) Rule 2.1: “In representing a client, a lawyer shall exercise independent
professional judgment and render candid advice. In rendering advice, a
lawyer may refer not only to law but to other considerations such as moral,
economic, social, and political factors, that may be relevant to the client’s
situation.” Gives permission for the lawyer to counsel her client on non-legal
4. HYPO: When a client comes to L wanting to bring a claim forward that the L thinks/knows is likely
to fail, the lawyer should present the risk/situation to the client and let the client decide – even if the L
knows the claim probably should not succeed. The lawyer’s role is to advocate for his client, not
protect the functioning of the system.
i. Facts: M interviewed a client and wants to take the matter. Her only concern is that the statute of
limitations ran out six months ago. But it’s a good case. Should she file the complaint?
a) If she does, she can still challenge the SoL
b) But maybe she just wants the client’s money (although if this is a malpractice case she
wouldn’t get any money unless she won – case would be on a contingency fee basis)
iii. Rule: We have to tell the client about the SoL situation, and then it’s up to the client to decide
whether to go forward or not. Client may still win.
a) D has to raise the SoL as an affirmative defense → There’s nothing to lose by going forward.
b) Fox says if the client says so we should file b/c since the SoL is an affirmative defense, it’s up
to the other side to raise it. We just have to accept the downside that it may cause others not to
like or trust us anymore.
iv. Note: It may be a misuse of the system/a waste of the court’s time to file a complaint and it’s our
job as lawyer’s to protect the system; the SoL was passed to prevent waste. BUT the SoL is also
an affirmative defense → this shows that the policy goal was to protect Ds but maintain the
adversarial system. SO our role as lawyers is to advocate, not look out for the system.
5. HYPO: When a client has an available defense, even if it will get them off on a technicality when
they’re actually guilty, the L has duty to identify the defense and present it to the client, and the final
decision of whether to use it is the client’s. The lawyer may, however, also counsel a client on the
non-legal implications/proper (moral?) thing to do.
i. Facts: Employee wants to sue employer (our client) for being fired when he has a 3-year K. He
wasn’t fired for cause – they just didn’t like him. In the state where the company is, the statute of
frauds applies, and since the K wasn’t in writing, the agreement wasn’t enforceable. Should we
screw the employee, even though the co. admits there was an agreement?
a) This is no different than the previous hypo. If you can bring a claim you know is barred by
the SoL, you can take a case where the defense is a technicality
b) BUT one of the things we have to do is be good lawyers, which does not necessarily mean we
counsel our clients to take advantage of all the opportunities available to them.
(1) They can raise the SoF, but if they do the whole world will know they don’t honor their
contracts and there may be repercussions; all their other employees may then want
iii. Note: As a lawyer, you have a duty to identify that the statute of frauds defense exists –
otherwise you’re in violation of Rule 1.1, which requires an L to be competent. You also have
to tell the client about the SoF under Rule 1.4 duty of communication. But once you’ve done
these things, THEN you should sit down with the client and explore ALL the implications of
pleading the SoF.
a) As a lawyer you can help the client reach a better decision – rule 2.1 says that while we have
an obligation to counsel clients re: the law, we also have the right to counsel them about other
things. But the final decision is the client’s.
6. HYPO: A lawyer has no obligation to correct the opposing side’s mistake if they make it on their
own. So long as the L and his client didn’t misrepresent the other side, they are not liable for the
other side’s mistaken belief, even if they have actual knowledge of that belief.
i. Facts: In negotiations for the sale of real estate. The opposing lawyer says his client’s excited
about the purchase b/c they’re going to subdivide the land. You know the land can’t be
subdivided. You did nothing to mislead the other side into thinking a subdivision is possible.
ii. Lawyer’s obligations:
a) Make sure your client didn’t make any misrepresentations to the other side → you have to
beware that your client may have met with the buyer separately and did say something, which
could be a problem in litigation
b) But there’s no obligation to correct the opposing side’s mistake if they make it on their own.
A lawyer’s obligation is to his CLIENT, not to the other side.
c) It is the client’s decision whether or not to allow the buyer to continue to be misled.
(1) He might want to tell the buyer b/c they do a lot of business together
(2) He might want to tell the buyer to prevent future litigation for fraud.
iii. Note: If as a lawyer you feel that not telling the other side will hurt your practice, your only
option is to resign as counsel (which you can only do if it doesn’t hurt the other side).
7. HYPO: The line between aiding a client in committing a crime and just advising them not to commit
it/about their behavior may be all about perception and how concrete and documented your advice is.
i. Facts: Client comes and says they haven’t been paying social security tax for the nanny. You
advise your client to start paying. He doesn’t want to and asks you his chances of getting caught.
You know that in the last five years only 275 people have been caught for breach of the nanny tax.
a) There’s no obligation to turn client in for not reporting the crime; it’s a past crime.
b) The line between aiding and abetting a client in fleecing the IRS and just giving advice may
be all about perception.
(1) So saying in passing that you have one chance in 10,000 of getting caught may be OK,
but writing a memo documenting that you told client not to do it after you told the stats
may not be OK.
c) Re: the question of whether you have to tell the client the odds of being caught at all – there
may NOT be an obligation to reveal the info.
IV. COMPETENCE AND COMMUNICATION
A. Elements of Malpractice
i. Duties of competence and communication, etc.
ii. P will generally have to have an expert testify that a lawyer had a particular duty in their case.
i. Must prove reliance on lawyer’s advice (but for causation) AND
ii. Must prove proximate causation (foreseeability)
B. Who Is Your Client?
1. RULE 1.18 – Duties to Prospective Clients: (a) A person who discusses with a lawyer the
possibility of forming a client-lawyer relationship with respect to a matter is a prospective client. (b)
Even when no client-lawyer relationship ensues, a lawyer who has had discussions with a prospective
client shall not use or reveal information learned in the consultation (c) A lawyer subject to
paragraph (b) shall not rep a client with interests materially adverse to those of a prospective client . .
. if the lawyer received info from the prospective client that could be significantly harmful to that
person in the matter.
2. HYPO: If a prospective client visits a lawyer and the lawyer gives any kind of advice, the lawyer is
liable for the advice given. A lawyer should make it clear when she rejects a client – disengagement
letters are advisable.
i. Facts: M interviews a woman W. M says we’re not interested in taking the matter on. The
woman calls two months later and says how’s my case going? M’s done nothing in the interim
and the SoL has run on W’s claim. Does M have anything to worry about?
a) Generally lawyers don’t send letters declining to represent prospective clients, though it may
be smart to do so (as indicated by this situation)
b) If M doodled and took no notes and then told W “I don’t think you have a good case” she may
be in trouble b/c that looks like M gave advice without doing any research.
(1) Though M will respond by saying that she clearly rejected the client
(2) A problem for M is that there’s no evidence to back up M’s claim and when it comes to a
he said, she said argument in court, the client may win out.
(3) So it’s always good to have a paper trail – write disengagement letters.
iii. Practical Lesson: If there’s a battle between a lawyer and a client, especially re: a
misunderstanding, there’s much more sympathy for the client. Juries often feel that the lawyer has
a duty to make herself clear.
iv. MRPC 1.4: Lawyers as fiduciaries have a responsibility to communicate with their clients.
v. Lesson: When dealing with prospective clients, lawyers have some duties similar to those owed
to actual clients.
a) Thus if M says no b/c “you have a bad case,” M is liable to W for the advice she gave that the
case was bad. Since M never did any research, she is liable.”
b) So when interviewing a client: 1) Make sure you don’t form a lawyer-client relationship
AND 2) make sure you don’t give advice in the initial interview.
3. Togstad v. Vesely, Otto, Miller & Keefe (Minn. 1980): Even if the client didn’t pay the lawyer and
the lawyer didn’t take the case, if the lawyer gave the client advice on legal matters and the advice
was negligently given, the lawyer is guilty of malpractice.
i. Facts: Misunderstanding between prospective client and lawyer causes statute of limitations to
lapse on a malpractice claim. The client (T) met with the L for 45 mins and L told her that “he did
not think we had a legal case, however, he was going to discuss this with his partner.” When she
didn’t hear back from him she assumed there was no case and didn’t consult another lawyer. By
the time she did, the SoL had run. T sues lawyer for malpractice.
ii. Holding: L is guilty of malpractice b/c he negligently gave advice to the client – i.e. told her that
he didn’t think she had a case without doing any investigating.
a) To prove legal malpractice, must show four elements:
(1) An attorney-client relationship existed,
(2) the attorney acted negligently or in breach of K,
(3) such acts were the proximate cause of client’s damages, and
(4) but for L’s conduct, the cl would have been successful in the prosecution of the medical
b) Here an a-c relationship existed b/c L gave advice to T.
c) Note that jury believed T over L → clients are usually much more credible to juries than
4. Practice Pointers: Engagement, Nonengagement, and Disengagement Letters
i. Nonengagement Letters:
a) If you aren’t going to take on a client or a case, it is a good idea to send them a letter
b) This will clear up misunderstandings and create a record of what has transpired.
c) The more clear and detailed they are, the better.
ii. Engagement Letters:
a) Letter to the client detailing what you will do for them and how they will be charged.
b) It is used to address any issues that might arise during the course of the representation,
including identifying all involved parties, the fee arrangement, methods of communication,
and identification of the goals of the representation.
c) Neither engagement nor nonengagement letters are required, but they are recommended.
iii. Disengagement Letters:
a) Prevent misunderstandings at the close of a matter.
b) Just a letter to the client saying that you are finished with their matter
c) Turns a client into a former client.
1. RULE 1.4 – Communication: (a) A lawyer shall: (1) promptly inform the client of any decision or
circumstance with respect to which the client’s informed consent is required by these rules, (2)
reasonably consult with the client about the means by which the client’s objectives are to be
accomplished; (3) keep the client reasonably informed about the status of the matter; (4) promptly
comply with reasonable requests for information; and (5) consult with the client about any relevant
limitation on the lawyer’s conduct when the lawyer knows that the client expects assistance not
permitted by the Rules of Professional Conduct or other law.
(b) A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make
informed decisions regarding the representation.
2. This is the second main fiduciary duty.
3. HYPO: If the L makes a mistake, she has a duty to tell the client what the situation is and allow the
client to decide what the next move is – even if the client will want to sue the L. An L can also inform
an interested third party, but the duty is to the CLIENT, not the insurance co.
i. Facts: M meets with the client from last hypo who has malpractice claim and takes the case, but
by the time she looks at the file, the statute of limitations has run.
a) Even if the insurance carrier says don’t tell the client, we still have to inform them of what’s
going on. Ls can’t take direction from a third party – we are independent of third party
(1) So while it’s good to tell client’s insurance co., if they tell us not to talk to the client, we
shouldn’t listen IF we believe we have an obligation under rule 1.4 to tell the client want
b) RULE: We have a duty to tell the client about the SoL having run.
iii. Q: What if we think there’s a way around the SoL? Do we still have an ethical obligation to tell
about the SoL having run? And does it matter if we’re working on a contingency basis or will
have to bill hours re the SoL motion practice?
iv. A: We HAVE to tell the client what’s going on.
v. Rule: At the end of the day, Ls have a duty to communicate. No matter how the client is paying,
you must communicate important events both good and bad. Preferably, you tell them in writing.
The obligation is to communicate everything; it’s a fiduciary duty to tell when we make a
vi. Reasons why have to communicate substantive mistakes:
a) It’s an important development in the case
b) It’s the client’s decision whether to proceed esp. b/c making the mistake creates a conflict of
interest since now the client may sue the lawyer, and the lawyer wants to prevent a malpractice
suit. But L has a duty to let client decide what to do next, including suing the L.
4. dePape v. Trinity Health Systems, Inc. (N.D. Iowa 2003): L is liable for failing to communicate
with his CL, which is any person to whom the L indicates he reps, not just the co. that pays the L
i. Facts: P’s lawyer was supposed to make sure he had the necessary visa to enter the U.S. and work
as a doctor. The lawyer didn’t tell P that he was ineligible for the type of visa he wanted, he just
manipulated the paperwork and then told P everything was fine. P tried to enter the country and
was stopped at the border. So the lawyer tried to get P to enter the country as a visitor, which
would have been illegal.
ii. Holding: The lawyer is liable for failing to counsel/communicate with the client – which is P,
and not just the co. hiring him. Damages are lost wages and emotional distress. Judge would have
also awarded punitive damages if P had asked for them
5. HYPOS: L is liable if she forgets to advise a client about standard K clauses AND (especially) if the
client told L to do something and she forgot. However, a malpractice action against L will only win if
there are also damages.
i. Facts: 1) M forgot to tell the client about his need for a non-compete clause. 2) Client told M to
put in an NCC and she forgot to do it.
ii. Analysis: In both cases, M may be liable
a) (1) This is more of a matter of judgment – should she have told the client about the need for a
non-compete clause? In order to establish malpractice, have to have an expert testify that it’s
automatic to ask for an NCC and no good lawyer would fail to do so.
(1) As a defense, M could say that the other party would never have consented to a NCC.
b) (2) Even here, where the breach is more clear b/c M violated the fiduciary obligation to listen
to client’s orders; the client wouldn’t necessarily win malpractice case – may be no damages if
the other side would never have agreed.
iii. Note: The obligation to inform the client of your breach is part of the obligation to keep the
client informed, but that doesn’t mean you have to write a check b/c the client still needs to prove
1. RULE 1.1 – Competence: A lawyer shall provide competent representation to a client. Competent
representation requires the legal knowledge, skill, thoroughness and preparation reasonably
necessary for the representation.
i. Comment: In determining whether a lawyer employs the requisite skill in a certain matter,
relevant factors include the relative complexity and specialized nature of the matter, the lawyer’s
general experience, the lawyer’s training and experience in the field in question.
a) Expertise in a particular field of law may be required in some circumstances, but in an
emergency a lawyer can give advise in an area in which he is not particularly skilled (if it
would be impractical for him to confer with another lawyer).
2. RULE 1.3 – Diligence: A lawyer shall act with reasonable diligence and promptness in representing
3. The duty to act competently is a main fiduciary duty.
4. HYPO: If L makes a mistake, she cannot settle with the client without advising the client that she
may have a malpractice claim and recommending that the client get another lawyer.
i. Facts: Assume M missed the SoL and there’s no way around it. Should M automatically write a
ii. Outcome: NO – there’s a rule saying we can’t settle a malpractice claim without telling the client
of her right to sue and sending her to another lawyer. If client just wants a check, we have to write
a letter saying we advised her to get counsel, and of her right to sue, and have her sign it, and then
give her money.
a) But if you’re going to settle, it’s best that the client gets another lawyer.
iii. Note: There’s nothing wrong with making a settlement situation confidential. There’s no
obligation to make the settlement public.
iv. Note: If the client’s new lawyer vigorously says there’s a good malpractice claim and demands a
high settlement, M doesn’t NEED to settle b/c the client might not win.
a) To show malpractice have to prove 1) a legal mistake 2) caused 3) damages (i.e. client would
have recovered $ but for L’s mistake/legal malpractice).
b) So missing the SoL might not be malpractice on its own. You have to show that client would
have won on the merits/that mistake caused the client to lose money.
c) Defending legal malpractice claim puts the original L (M) in the unseemly place of saying the
underlying claim they had agreed to prosecute would not have won.
v. Note: M is being sued for her failure to fulfill her duty to act COMPETENTLY (Rule 1.1)
5. HYPO: It is unlikely that an L will be disciplined by the bar for one mistake; but if the L displays a
pattern or practice of incompetent behavior, she will be disciplined.
i. Facts: In same case – M forgot about the case and the SoL ran, could M be disciplined for her
failure to act competently (violation of rule 1.1)?
a) Note: She may be even more guilty of violating Rule 1.3 – which says that lawyers SHALL
act with reasonable diligence and promptness in representing a client.
ii. Outcome: It depends. There are a very few disciplinary cases based on one incident even if the
client complains. BUT disciplinary action will be taken if there’s a pattern or practice of
iii. Note: If the client hires a second lawyer, the second lawyer can’t use threat of reporting M to the
bar as a way of getting a better settlement; under Rule 8.3, an L is required to report the actions
of other lawyers whose conduct goes to the fitness of that lawyer’s ability to practice law.
a) This situation doesn’t apply to when one L consults another L about possible misconduct b/c
in that case client confidentiality rules trump the reporting req.
iv. Note: Disciplinary actions have no causation or damages requirement as in malpractice.
6. HYPO: The rules of professional conduct only apply to individual lawyers; a law firm cannot be
disciplined for one lawyer’s pattern of mistake (except in NY and NJ, or maybe under a
negligence/malpractice theory that firm management has a duty to supervise its lawyers).
i. Facts: Assume this was M’s third instance of missing the SoL in four years. Can M’s law firm be
disciplined? Does it being an LLP protect the firm? How would you discipline a whole law firm?
ii. Outcome: The current rules of professional conduct only apply to an individual lawyer.
a) However, both NY and NJ have added law firm responsibility to their rules, under the theory
that if law firms are responsible, they’ll monitor their partners better.
b) Law firms revolted from having the model rules adopt rules making them responsible.
(1) In big firms, partners don’t monitor each other.
(2) How is it possible to discipline firms? Much better to rely on bad publicity, which firms
are keen on preventing.
iii. Note: There are a series of rules – 5.1, 5.2, 5.3 – which provide that lawyers have supervisory
responsibility in these instances: 1) Lawyers for the law firm staff, 2) senior lawyers for
what they tell junior lawyers to do, 3) responsibility of associates for their own independent
actions. And these rules have been applied to the management of law firms.
a) Ex: Get a W to say the standard of care is for management to monitor, especially when it’s on
notice of past violations. The duty to supervise is part of the standard of care.
7. HYPO: A L may be liable for failing to advise a client on something related to the L’s representation
but outside of its scope unless the L sends out an engagement (retainer) letter setting forth the scope
of the representation.
i. Facts: M gets a new client who is settling a case for $ 1 million. The client wants M to tell him
how to minimize his tax burden. M does so. Six months later, someone (X) has an identical law
suit to client, goes to trial, and gets $3 million in damages. Client gets pissed at M for letting him
settle and threatens to sue, saying he has an expert who will claim that he never should have
settled. Is M as a tax lawyer liable? What if M had commented on how good the settlement was?
a) If M had written a proper engagement letter, she would not be liable for a bad settlement.
BUT if M knew it was a bad settlement, she does have an obligation to disclose that fact to
b) Elements of a good engagement letter
(1) Defines the scope of the representation
(2) Sets out fees
(3) Retainer letters should not be used as sales tools advertising how much L can do for
client; they should define the scope of the rep
(4) DON’T promise outcomes!!
c) Note: Some states require written retainer letters (engagement letters) but the model rules
8. HYPO: If M settles and another case goes to trial and the client there gets a bigger reward, M is
only liable if she didn’t do research and so settled for too little. If she did research and thought the
settlement was reasonable, she is not liable.
i. Facts: Client comes to M re: the underlying case (not tax consequences). M settles for $1 million.
Five weeks later, someone else gets $3 million on the same facts. Can the client sue?
a) Cl’s args: M should have known no reasonable lawyer would make that settlement.
b) M’s args: So long as M did her research into similar cases and honestly believed $1 million
was a good settlement, M is not liable.
(1) Remember Togstad – the lawyer was liable for giving advice without doing research. So
if M does no research she’s liable. But if she acts diligently, she is not liable.
iii. Outcome: M’s args win. So long as an L is competent (acts diligently/as a reasonable lawyer
would), communicates, and defines the scope of the representation, he is not liable.
1. Greycas v. Proud (7th Cir. 1987): L who misrepresented the truth (that he had investigated whether
his bro’s farm had prior liens) to a third party (not his client), he had intended the third party to
benefit from his statements is liable for malpractice and/or negligent misprepresentation.
i. Facts: Bro-in-law of lawyer had the L deal with the bank in a mortgage situation. L told bank, on
bro’s say-so, that there the property was free and clear of liens, but he didn’t really check to verify.
The bank lent the money. The bro went bankrupt. It turns out bro’s farm was already mortgaged,
and the bank couldn’t recover. The bank sues L.
ii. Issue: Could the bank sue the lawyer for misrepresenting the truth, even though the lawyer was
the bro’s client, not the bank’s? YES.
iii. Holding: While a lawyer has no general duty of care toward his adversary’s client, a non-client
has a negligence (professional malpractice) action against an attorney if he proves that the primary
purpose of the attorney-client relationship was to benefit or influence the third party. Since L’s
statements were meant for bank to rely on in lending bro money, L was liable.
i. Facts: M wrote an opinion for a municipality saying that the municipality would stay within all
legal limits if it issued new bonds. M didn’t check if the municipality was over its statutory
lending limit, but they were. The borrowers sue, saying they relied on M’s statement.
ii. Rule: Third parties DO have a right to sue lawyers of clients with whom they have certain kinds
of relationships: Where the L or client intends 3rd parties to benefit from or be affected by the L’s
work, the third party can sue.
3. Four Places in Rules Where L’s have Clear Duty to 3rd Parties:
i. Rule 2.3: L has duty to 3rd party in situation where L is performing services for client, and
the client expects the 3rd party to rely on L’s services, which will benefit the client.
a) The rule is carefully crafted to say that the Ls must be aware that the opinion will be relied on.
b) L’s standard of care to her client = her standard of care to the third party in this situation.
ii. Rule 4.1: Prohibits intentional misstatements made by lawyers in documents, as well as oral
statements made in the course of negotiating or closing a transaction or settlement – and this
applies to both clients AND third parties.
iii. Rule 8.4: Prohibits all fraud, deceit, dishonesty, and misrepresentation, whether before a
tribunal or in other statements.
iv. Rule 3.3: Requires candor to the tribunal – shall not make a false statement of fact or law
or fail to correct a false statement of material fact previously made to a tribunal
4. Note: Generally 3rd party claims arise when lawyers give opinion letters or in negotiations.
F. INEFFECTIVE ASSISTANCE OF COUNSEL
1. Roe v. Flores-Ortega (US 2000): D can make a claim for ineffective assistance of counsel based on
L’s failure to file an appeal by showing 1) L either failed to consult w/client re the appeal OR
consulted and failed to act as directed AND 2) counsel’s actions prejudiced D (i.e. but for L’s failure
an appeal would have been filed). Strickland Test
i. Facts: Client was convicted, said he told his lawyer to appeal, but the lawyer didn’t appeal.
Client then appealed on ineffective assistance grounds.
ii. Rule: There is a two-pronged Strickland test for determining whether there’s a valid ineffective
assistance of counsel (specifically a failure to consult) claim.
a) “Counsel’s representation ‘fell below an objective standard of reasonableness’” (Counsel
either failed to consult OR failed to act on what the client directed.)
b) Counsel’s actions prejudiced D → but for the lawyer’s failure, the client would have done the
a) Re showing that counsel’s rep fell below an objective std of reasonableness (Strickland part 1)
-- “Counsel has a constitutionally-imposed duty to consult with the D about an appeal when
there is reason to think either (1) that a rational D would want to appeal OR (2) that this
particular D reasonably demonstrated to counsel he was interested in appealing.
(1) A highly relevant factor in this inquiry will be whether the conviction follows a trial or a
guilty plea.” But even where there’s a guilty plea, the court will consider factors such as
whether D received the sentence bargained for or whether the plea expressly waived
appeal rights before deciding if D has a claim.
(2) If the facts satisfy this, then part one of the rule (Strickland test) has been satisfied.
b) Strickland prejudice prong: “To show prejudice in these circumstances, a D must demonstrate
that there is a reasonable probability that, but for counsel’s deficient failure to consult with
him about an appeal, he would have timely appealed. . . . We hold that when counsel’s
constitutionally deficient performance deprives a D of an appeal that he otherwise would have
taken, the D has made out a successful ineffective assistance of counsel claim entitling him to
(1) Evidence that there were nonfrivolous grounds of appeal or that the D promptly
expressed a desire to appeal will be taken into consideration in making this
2. HYPO: It’s very hard to meet the Strickland standard for ineffective assistance of counsel because
for part 1 (L’s behavior must fall below an objective std of reasonableness) the L’s behavior must
shock the conscience. A mere failure to bring a plea offer to a client who has previously directed the
L he doesn’t want to accept a plea will not suffice.
i. Facts: M is defending a criminal case that’s going to trial in three weeks. The U.S. Attorney calls
up offering a deal – if he cooperates D will get two years. M and the client already agreed not to
accept any deals. So M says no. Client is convicted and sentenced to 5 years. Client finds out
about deal offer after convicting and says, what deal? Is M liable for not bringing her client the
ii. Analysis: Apply Strickland test
a) Part 1 – Objective standard of reasonableness: Does not telling client about deal count as a
failure to consult – was it objectively reasonable not to tell the client about the deal after it was
(1) RULE 1.2 – Scope of Representation and Allocation of Authority Between Client
and Lawyer: When it allocates responsibility between lawyer and client, it specifically
reserves for the client the decision of whether to settle AND whether to plea → only
two specified things reserved for clients.
(2) Since clients often posture and say I’ll never settle before deciding to settle, M’s actions
are wrong – client can probably satisfy part 1 of test
(3) HOWEVER – even if M doesn’t bring the offer to the client, in reality it’s really hard to
bring an ineffective assistance of counsel claim – much harder than ordinary malpractice.
There is an incredible presumption that the lawyer’s conduct did not fall below an
objective standard of reasonableness – courts assume most behavior is strategic.
Therefore Part 1 is only satisfied if the lawyer’s behavior shocks the conscience. (e.g.:
Lawyer fails to bring a client a plea offer when they never discussed pleas).
b) Part 2 -- Prejudice Prong: Once you prove that L’s behavior shocks the conscience, then
you have to prove that L’s performance’s prejudiced the D. This is essentially a but for
inquiry – but for the lawyer’s bad performance, the client would have taken the plea (or
(1) This would be hard to prove here, since the client had already said he wouldn’t take a
3. Wiggins v. Smith: Failing to investigate for mitigating circumstances is objectively unreasonable –
ineffective assistance of counsel!
i. Facts: L failed to conduct an investigation into mitigating circumstances, which may have kept
Wiggins (D) off of death row. D claims that he was put on death row b/c of ineffective assistance
of counsel → failure to investigate at all was not a strategic decision, it was objectively
unreasonable (so meets prong 1).
ii. Holding: S. Ct. found it was unreasonable for a lawyer not to conduct the investigation. You
couldn’t know whether or not you want to put info into the record if you fail to discover what’s
out there. The Ct. said you need to at least fully inform yourself of all alternatives before you
decide which path to pursue.
A. RULE 1.6 – Confidentiality of Information: (a) A lawyer shall not reveal information relating to the
representation of a client unless the client gives informed consent, the disclosure is impliedly authorized
in order to carry out the representation or the disclosure is permitted by paragraph (b).
(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;
(2) to prevent the client from committing a crime or fraud that is reasonably certain to result in
substantial injury to the financial interests or property of another and in furtherance of which the client
has used or is using the lawyer’s services;
(3) to prevent, mitigate or rectify substantial injury to the financial interests or property of another that is
reasonably certain to result or has resulted from the client’s commission of a crime or fraud in
furtherance of which the client has used the lawyer’s service;
(4) to secure legal advice about the lawyer’s compliance with these Rules;
(5) to establish a claim or defense on behalf of the lawyer in a controversy between the lawyer and the
client, to establish a defense to a criminal charge or civil claim against the lawyer based upon conduct in
which the client was involved, or to respond to allegations in any proceeding concerning the lawyer’s
representation of the client; or
(6) to comply with other law or a court order.
B. HYPO: If the L learned the location of info in the public record from a client and that location is related
to her representation, she cannot reveal such info/the info is confidential, even though it is a matter of
1. Facts: A Wall St. Journal reporter calls up looking for info. You know if you point the reporter in
the direction of a deposition on file in the courthouse, he’d get what he needed. The deposition is in
the public record, but reporter wouldn’t find it without the L telling where to look.
i. Rule 1.6 says that a lawyer may not reveal confidential info. This is a broad rule – it puts the
burden on the lawyer to stay quiet rather than on the client to tell the lawyer to stay quiet as the
previous rule did.
ii. So today you CAN’T tell the reporter the location of info, if you learned that info while
representing a client UNLESS that client tells you to do so.
iii. If the info hasn’t been widely known public info, then you can’t reveal the info to someone else.
3. Note: Rule 1.6 doesn’t say you have to keep confidential anything learned in the course of the
representation; it says that you have to keep confidential info relating to the representation.
4. Note: Client authorization gives the lawyer the right to disclose. And the client may impliedly
authorize disclosure (ex: by discussing reporters in general and saying he’d love them to know my
side). Most implied authorization is situational – for ex: when you hire someone it’s implied that the
L has the right to follow the discovery rules or disclose info in the course of the negotiation.
5. Note: This hypo emphasizes that Rule 1.6 stretches to cover public info.
C. HYPO: Ls may not act on confidential info without client OK; and even with OK, conflicts of interest
are often created.
1. Facts: M reps Disney on the purchase of land. But she just learned from someone not Disney that
the land next door to the Disney property is available. If M&F buy the land, the Disney deal will
make it very valuable. Can M&F buy the land?
2. Analysis: If we do buy the land, we put ourselves in a situation where we may not be able to give
Disney independent advice – our interest in the value of our land may color our advice to Disney
about others (may create a conflict of interest).
3. Outcome: Lawyers may NOT use confidential info so M&F can’t buy the land without telling
Disney b/c they’d be buying land without telling them b/c we’re buy. AND, even if they tell Disney
about the land deal, buying the land would place the firm in a conflict of interest, because owning the
land could skew their advice to the client. Disney’s consent MAY make it OK, but it still raises sticky
4. Note: If M&F informs Disney of the land opportunity and possible conflicts and they still OK the
purchase, it’s not a breach of confidentiality. But the client must give the OK to buy the land b/c the
duty of confidentiality extends to both the release AND use of the information.
5. Note: Confidentiality duty is imputed to all people at the firm.
D. HYPO: When a prospective client A informs L that it wants to initiate a suit that will hurt another client
B collaterally (A is not suing B), the L can still not inform B about the suit unless A gives its consent.
Duties of conf. owed to prospective clients are equal to those owed to current clients (rule 1.18)
1. Facts: Someone at M&F circulates a conflicts memo asking if it’s OK to rep Small in an action
against Magna. Six days from now, M will be finishing a deal in which Big Bank is going to loan
money to Magna. M’s client is Big Bank. M wants to tell BB that Small is initiating this huge suit
against Magna. Magna (and Big Bank) don’t know about the law suit yet and M&F hasn’t accepted S
as a client yet.
2. Analysis: RULE 1.18 – Duties to Prospective Clients – says that when Small approaches as a
prospective client, it is entitled to the same level of confidentiality as a real client, so even if M&F
says it can’t take on Small as a client, it’s still required to keep Small’s info confidential – which
means not telling Big Bank UNLESS M&F gets Small’s OK to disclose to BB the possibility of a law
suit. (Small of course is unlikely to say yes b/c it wants Magna to have as much money and fiscal
health as possible when it sues).
3. Note: We probably can’t tell Small why we want to tell BB about the suit, b/c we owe BB a duty of
confidentiality as well. Navigating to get the client OKs is difficult.
4. Q: Can M&F still rep Small in the matter against Magna?
5. A: If it was a small, garden variety law suit M&F can take the case – we don’t worry about who our
clients do business with. But if the suit is so big it constitutes a material limitation on our ability to
vigorously represent Small b/c we’re concerned about not bringing down BB, then we can’t do it.
(See conflicts of interest section, rule 1.7(a)(2)).
6. Q: Can M&F still rep BB on loan to Magna?
7. A: The question is whether BB is entitled to a lawyer even three days before a deal closes who may
through due diligence find out about the law suit, because M&F obviously can never reveal that info
having learned of it through Small (even if M learned of it through searching, she still can’t reveal it
b/c she would be conducting the search based on info from Small). It’s a very close question →
simply by virtue of a phone call from Small you may have to give up the representation of an existing
E. Perez v. Kirk & Carrigan (Tex. App. 1991): Lawyers who tell a man that statements made to them are
confidential and then turns those statements over to the DA are in breach of their fiduciary duty of
1. Facts: P was a bus driver that crashed and killed a bunch of kids. Lawyers for the company came to
him and said they were his lawyer and they wanted his statement. He told them his story, which they
then revealed to people suing him.
2. Rule: The relationship between attorney and client is one of uberrima fides, which means “most
abundant good faith,” requiring absolute and perfect candor, openness and honesty, and the absence of
any concealment or deception. This includes former clients.
i. “Kirk & Carrigan initially obtained the statement from Perez on the understanding that it would be
kept confidential. Thus . . . K&C breached their fiduciary duty to Perez either by wrongfully
disclosing a privileged statement or by wrongfully representing that an unprivileged statement
statement would be kept confidential.”
F. Confidentiality in the Corporate Setting
1. RULE 1.13 – Organization as Client: (a) A lawyer employed or retained by an organization
represents the organization acting through its duly authorized constituents. . . . (g) A lawyer
representing an org. may also rep any of its directors, officers, employees, members, shareholders or
other constituents, subject to the provisions of Rule 1.7 (conflicts of interest). If the org’s consent to
the dual rep is required by Rule 1.7, the consent shall be given by an appropriate official of the org
other than the individual who is to be represented, or by the shareholders.
i. When a lawyer represents a corporation, the officers, directors, employees and shareholders are the
constituents of that corporation.
ii. When we rep an org, we don’t rep its constituents, though we do deal through those people
iii. If a L is going to take on the rep of a constituent in a situation where there could be a conflict of
interest, then you have to get the permission of someone in the org other than the constituent.
iv. The communications between an organization’s constituents and the lawyer is protected by Rule
2. HYPO: Where the CEO requests that the corp’s L do something that would require the L to
represent both the corp and the CEO in an individual capacity, the L must get consent from someone
else in the corp. before agreeing to do the deal. It can sometimes be hard to tell if the L reps the corp.
or the CEO individually, especially in the case of small privately held corps.
i. Facts: CEO of a client asked M to draft a deed transferring a bill of property from the company to
the CEO. Can M draft the deed? What about if the CEO says if you don’t do it he’ll send his
business elsewhere? Can you tell the corp. what CEO wants?
ii. Issue: Is there a conflict b/c M reps the co. and the CEO is coming to her as an individual
prospective client OR comes to her claiming that as CEO HE is the client as well as the corp.?
iii. Analysis: Either way, there may be a problem. If CEO is just a prospective client, you still owe
him a duty of confidentiality under 1.18 - So you probably can’t tell others in the co. about CEO’s
iv. Q: Is CEO a current client when he approaches you re the land transfer?
v. A: It may depend on what kind of co. you’re talking about. In the case of a big public co., CEO’s
claim that he’s an individual client is tenuous; but if it’s a small closely held business, CEO’s
claim is more plausible.
vi. RULE 1.13: If view corp. as your client, you’d have to get permission from someone other than
the CEO to take on the rep because there are potential conflicts of interest.
vii. Note: Under Sarbanes-Oxley an L may be obligated to report a CEO trying to engage in conduct
detrimental to the org. Under the rules, such reporting is allowed but not required.
G. ATTORNEY-CLIENT PRIVILEGE
1. Def: A lawyer may not be compelled to testify re information she learned from her client if the client
was speaking with/dealing with the lawyer in order to get legal advice or representation.
i. It does not apply to situations where the client hired lawyer for non-legal purposes
2. Requirements of the Privilege
a) Can be spoken, email, letters, etc.
ii. Between privileged persons
iii. For the purpose of giving legal advice
iv. With the intent of keeping the info confidential.
a) So if you speak with a non-privileged person in the room, it’s considered
b) A conversation with a third party in the room is not privileged unless the third party is an
agent of the client (like an interpreter necessary to aid communication).
3. HYPO: A L cannot be compelled to reveal his client’s name, if doing so will reveal information the
client gave him for the purpose of getting legal advice. (If you can establish there’s a lawyer-client
relationship AND the lawyer is not aiding and abetting a continuing crime, the lawyer cannot be
compelled to reveal the identity of his client.)
i. Facts: M met with a client on Friday. The client handed her some bearer bonds and said please
return these to the police so they can make it back to the people I stole them from (Vs). Now M
has been called to testify re the identity of her client.
ii. Rule: If you can establish there’s a lawyer-client relationship AND the lawyer is not aiding and
abetting a continuing crime, the lawyer cannot be compelled to reveal the identity of his client.
The lawyer is covered by the A-C privilege.
iii. Note: Here the criminal was already a client AND was going to M to consult re the best way to
turn over evidence, so there was no trouble establishing such a relationship. But if client just
wanted to use M as a conduit – wasn’t getting any legal advice, was just trying to find a way to
return goods – then the privilege doesn’t attach. The privilege only applies if the client went to the
L for LEGAL ADVICE.
4. Hughes v. Meade (Ky. 1970): The A-C privilege doesn’t include non legally-related acts, such as
the return of stolen goods to the police. Therefore a lawyer can be compelled to reveal the name of
i. Facts: Lawyer got a call from his client saying he wanted to return some stolen typewriters. The
lawyer gave the typewriters to the police, but refused to say who had given them to him.
ii. Holding: The lawyer could be compelled to reveal the client’s name. The A-C privilege does not
include non-legal-related acts, such as the return of stolen goods to the police. The L was acting
as a mere agent or conduit for the delivery of property, which was completely unrelated to legal
representation – since he was not rendering legal advice, the privilege doesn’t protect the name of
5. Dean v. Dean (Fla. App. 1992): If an L is consulted for legal advice re: how to turn over stolen
good, the client’s ID is protected by the A-C privilege (L cannot be compelled to reveal the name),
even if L is then the conduit for return of those goods. The A-C privilege protects any sort of legal
advice, not just advice re legal proceedings.
i. Facts: Lawyer and D had a discussion and lawyer gave D advice about how to turn over stolen
property. Lawyer helped D do that. State now wants to have lawyer testify to identity of D.
ii. Holding: D’s ID is protected by the A-C privilege b/c D consulted L to get legal advice. L
wasn’t just a conduit – he performed a function as a lawyer. The A-C privilege protects any sort
of legal advice, not just advice re a legal proceeding. The Ct. distinguishes Hughes by saying that
there the lawyer wasn’t consulted for legal advice, he was just used b/c of his police contacts.
iii. Note: In order to decide whether the lawyer was a mere conduit or was acting as a lawyer giving
legal advice, the client has to wave confidentiality b/c L has to reveal the contents of the
6. Difference Between Confidentiality and Attorney-Client Privilege
i. Rule 1.6 (confidentiality) governs what a lawyer can do voluntarily – what they can tell family,
friends, colleagues, reporters, etc. It is a rule of discipline – governed by Rules of Professional
Conduct; can be disciplined by bar, sued for malpractice on it.
ii. Privilege = what you can be compelled to reveal in court.
iii. Attorney Client privilege is a rule of evidence; confidentiality is a rule of professional conduct.
iv. ID of client is clearly confidential; it’s not necessarily privileged
7. Attorney Client Privilege in the Corporate Setting
i. Upjohn Co. v. United States (SCOTUS 1981) (p. 136): The A-C privilege protects more than
the communications from a control group of a corporation’s core people, but the Ct. doesn’t say
how far it does extend/which employees may not be covered. It clearly covers the people
questioned here; and the data compilations based on their questionnaires are protected by the
work product doctrine.
a) Facts: D is a multinational corp. D’s in-house counsel finds out about alleged bribes made by
a subdivision. L sends out questionnaires to a large number of employees. They discover
illegal payments and report them to the SEC. The IRS starts to investigate tax consequences
and want to subpoena the questionnaires. D claims they’re privileged docs.
b) Issue: Who in a corporation is protected by the A-C privilege (and Work Product Doctrine)?
Gov’t says it’s just a control group of the corp’s top people. D says it is anyone employed by
the corp who communicates with the corp’s lawyers.
c) Holding: The court rejects the gov’t’s control group theory and says the privilege extends
further than that. It doesn’t decide how far the privilege DOES extend, but says it clearly
covers everyone involved here.
(1) “The control group test adopted by the court below thus frustrates the very purpose of the
privilege by discouraging the communication of relevant information by employees of
the client to attorneys seeking to render legal advice to the client corporation.”
ii. HYPO: Interviews with client’s employees conducted to help L give client advice is protected by
the A-C privilege b/c L needs to be able to get info from the co. without worrying about need to
later disclose that info. Co’s should be encouraged to investigate possible illegalities. (Fox
a) Facts: M is hired by a co. to conduct an investigation into a potential environmental problem
– the company is worried about whether they’ve run afoul of gov’t regs. M interviewed
employees to make her report. Now, as part of the EPA’s action against Co., M is being asked
to turn over the materials from the interviews. Can M be compelled to turn over her materials?
b) Outcome: NO. Before Upjohn, the privilege only extended to conversations between the
lawyer and key employees, b/c conversations w/non-key employees was not seen as
conversations related to advice between the lawyer and the client. But the Ct held in Upjohn
that to give good advice a lawyer has to do research and conduct interviews. Therefore
interviews are privileged if they’re necessary to give adequate advice, even if a non-lawyer
could have performed those interviews (and the non-lawyer interviews would, of course, not
8. Work-Product Doctrine
i. Def: Work done in preparation of litigation is protected and a lawyer cannot be compelled to
a) There doesn’t need to be an actual litigation; L just has to have some expectation that
litigation will commence.
ii. HYPO: WP Doctrine ONLY protects info/documents prepared by the lawyer in anticipation of
litigation. It does not protect work done in preparation for business transactions like an IPO.
a) Facts: Last hypo continued – M interviews employees to see if co. is within EPA compliance.
Simultaneously, she also interviews employees to try and prepare documents for co’s IPO.
Are both those interviews covered by W-P Doctrine?
b) Outcome: Interviews re EPA compliance ARE covered by W-P doctrine as well as A-C
privilege; prep for IPO is not – though the IPO interviews are probably privileged. A lot of
work Ls do for IPOs/other business transactions are not privileged OR covered by WP
doctrine (ex: discussion with investment bankers – no priv b/c it’s not conversations w/ your
client), even though the work is work product. Reason is that an IPO is not litigation, so the
work was not prepared in anticipation of litigation.
iii. Necessity Exception to the WP Doctrine
a) If work product can’t be duplicated (witness dies or something), release of the work product
may be compelled even if it’s done in anticipation of litigation.
b) However, CORE work product can never be compelled.
(1) Core WP = a lawyer’s mental impressions re an interview/facts discovered. If L’s notes
reflect the L’s impressions, can never be compelled to be turned over.
iv. Ex of WP not subject to A-C Privilege: An interview of a W who is not an employee of the
v. Note: It’s v rare for courts to order production of WP. The Hardship argument is rarely granted.
vi. Note: A-C privilege does block the search for truth, but it allows the L to get all the info he
needs to/encourages the client to speak fully. That is the tradeoff the rule makes.
vii. Note: There’s a good argument that the WP privilege doesn’t belong to the client, it belongs to
the lawyer. Case law is mixed on this, but often the lawyer has to waive the privilege as well.
9. HYPO: If an L turns over some stuff related to a specific subject, it may be deemed a waiver of
privilege re all info on that subject – not just what you turned over, so rest of info may be subpoenaed.
i. Facts: Assume that the client has decided that we have to turn our notes over to DoJ → the client
directs us to turn the notes over. If we waive privilege here, have we waived it for everything and
in every circumstance. Can the info then be used in a later civil suit?
ii. Outcome: Case law holds that if you turn over some stuff related to a specific subject, it may be
deemed a waiver of privilege re all info on that subject – not just what you turned over.
iii. Note: What about the people interviewed – if they’re asked to turn over info to the co. L, the L
must make sure that when she interviews the employees, they don’t think that she’s their lawyer
(when L tells an employee they’re a L bound by confidentiality, the employee may assume L is
10. Note: It’s great to label documents privileged if you think they’re subject to privilege. Even though
the label doesn’t create privilege, it does indicate when you think it applies.
11. HYPO: If there’s a question as to whether L repped only co. or both co AND an officer
individually, L should get a waiver of privilege from both before revealing any info gotten from the
i. Facts: M has been told her client (corp.) has waived privilege and wants her to testify to
everything re the representation. At a deposition, they ask her about conversations she had with
the former CEO of the corp. Can the corp waive the privilege re what former CEO said?
ii. Outcome: When L reps a co, they only rep the co. They don’t automatically rep the CEO as an
individual. BUT during the course of working with people, Ls call them clients and may give
advice to the individuals. So in any situation like this where there’s ambiguity, the smart thing to
do is ask the old CEO if he wants to assert the privilege. If M repped both CEO and co, she can
only talk about privileged stuff re co – can’t discuss advice given to CEO until the CEO personally
waives the privilege.
12. LIMITS OF THE PRIVILEGE
i. HYPO: Privilege prevents a L from testifying re a conversation with client; but it doesn’t protect
the underlying info. So client can still be deposed re info he revealed to his L.
a) Facts: M’s client’s case depends on where he was at a particular time. When M interviewed
the client, the client tells M where he was. Then client is being deposed and is asked where he
was, M objects, saying the information is privileged. Is it?
b) Outcome: NO. What you talk about with your lawyer is privileged – but that only means the
LAWYER can’t be compelled to testify re that info. The underlying info itself is not
privileged. Privilege protects the conversation but doesn’t cover the facts. For clients to
refuse to testify, need an independent reason.
ii. HYPO: When, in the course of a representation, an L talks to people hired by the client co.
(investment bankers or subsidiary employees – people you can view as an outside contractor), the
privilege may not (and probably doesn’t) cover those conversations. The further away from the
ideal of confidential conversations with the client an L gets, the less strong the privilege is.
a) Facts: L was handling an IPO and in the course of that goes to talk to an investment banker
who’s underwriting the deal. The deal goes bad. The stock tanks. The SHers sue. L is asked
to testify re her conversations with the banker. L says the conversations are privileged. Are
(1) L would claim privilege b/c the conversation was in the course of the representation.
This would be L would have to try and extend the definition of who a client is as far as
possible → say that b/c the I-bankers were hired by L’s client, the privilege extends to the
I-bankers as agents.
(2) The principle is that what is most privileged is a conversation between a lawyer and a
client, the contents of which are intended to be confidential. The further away reality
gets from that ideal, the weaker the claim of privilege. But an L should always argue it.
c) Note: This analysis also applies to a parent/subsidiary situation, where L is the lawyer for the
parent and needs to deal with someone in the subsidiary. Is the conversation with the
subsidiary protected? Case law is split, but most of it recently goes against the lawyer –
probably not protected.
iii. Swidler & Berline v. United States (US 1998) (p. 141): The A-C privilege survives the death of
a) Facts: P made notes of an interview with a client shortly before the client’s death. The
government now wants those notes to aid in a criminal investigation.
b) Issue: Does the A-C privilege survive the client’s death?
c) Holding: Yes. Knowing that communications will remain confidential even after death
encourages the client to communicate fully and frankly with counsel, which furthers the
purposes of the privilege – posthumous disclosure of such communications may be as feared
as disclosure during the client’s lifetime.
iv. HYPO: Client confidentiality survives the death of the client.
a) Facts: L’s client confessed to a crime. Told L that someone else was serving a sentence for
the crime. The client dies. Can L reveal what the client told her?
(1) We know that A-C privilege survives death from Swidler & Berlin. But here it’s not an
issue of privilege b/c the L isn’t being asked to testify; so it’s a matter of confidentiality.
Does confidentiality also survive client’s death?
c) Rule: Confidentiality also survives the death of the client because (1) the deceased legally
becomes the estate and the estate has an interest in the matters discussed AND (2) there are
(1) The rules don’t have an exception to confidentiality for the death of a client (except in
MA). But you can make the argument, especially if the wrongfully convicted guy is on
death row, that there is a risk of substantial bodily harm if L remains quiet, so L can
break confidentiality on that exception.
13. ABA Formal Opinion 92-368 – The Inadvertent Fax (p. 146): If L gets confidential info
inadvertently, she should notify the other side and not look at/use it.
i. Facts: What should a lawyer do upon receiving material that was not meant for him (the
ii. Holding: The lawyer receiving inadvertent communications:
a) Should not examine the materials once the inadvertence is discovered.
b) Should notify the sending lawyer of the receipt, AND
c) Should abide by the sending lawyer’s instructions as to their deposition.
iii. Note Rule 4.4 – Respect for Rights of Third Persons: (b) A lawyer who receives a document
relating to the representation of the lawyer’s client and knows or reasonably should know that the
document was inadvertently sent shall promptly notify the sender.
a) L should notify the other side if she gets something accidentally. BUT if the material shows
misconduct of the other side or is a document L should have had, L can seek the aid of the
iv. Note: This view is not followed in every jurisdiction
a) D.C. and others say any breach is a waiver of privilege
b) Most jurisdictions take a middle view – L has to intend to waive privilege (and must get OK
from client to do so), but the L also has to take reasonable care to keep confidential
(1) If L does a sloppy job or don’t go through the docs before sending them, the docs don’t
c) Very few jurisdictions say that there MUST be an affirmative waiver of privilege from client
for the privilege to be broken.
14. HYPO: If there is a priv b/w client and third party in the room, the conversation between all three
i. Facts: L meets with client and his wife. Are communications privileged b/c it combines A-C
privilege with spousal privilege?
ii. Outcome: YES. If there is a priv b/w client and third party in the room, the conversation
between all three is privileged.
VI. EXCEPTIONS TO CONFIDENTIALITY
A. EXPRESS OR IMPLIED AUTHORITY
1. Rule 1.6(a) – A lawyer shall not reveal information relating to the representation of a client unless
the client gives informed consent, the disclosure is impliedly authorized in order to carry out the
representation or the disclosure is permitted by paragraph (b).
i. Implied authorization generally refers to allowing a L to do things such as obey discovery rules,
use secretaries and paralegals, etc.
2. HYPO: Fox does not think that clients can contract out of their right to decide when to waive
confidentiality in advance/in a retainer letter. But other ethics Ls disagree.
i. Facts: L wants to put a clause in a retainer agreement saying that the client gives the L the right to
disclose confidential info when the L thinks it’s appropriate to do so.
ii. Issue: Fox says the q is the extent to which we’ll allow lawyers to contract out of the rules of
professional conduct. If we have a rule re client waiver – that we need client waiver to break
confidentiality – can we allow clients to waive their rights to waiver?
a) Risk to Allowing Client Waiver in Advance:
(1) How does the L know the client’s best interest?
(2) Client’s interest changes over time.
(3) Client may have collateral interests.
(4) L knows virtually nothing about client.
b) Pro Advanced Waiver arg: If it’s a sophisticated client who understands the waiver, then
they know what they’re bargaining away.
iv. Fox’s view: There can’t be valid advanced waivers of confidentiality in a retainer agreement.
He doesn’t think that lawyers can waive the duties that mind them. What makes lawyers
professionals is their fiduciary duties; it’s what makes us lawyers. But he says that other ethics
lawyers disagree with him.
v. Note: In some sense the enforceability of a waiver depends on how temporally close to the
revelation of confidential info the waiver was. (3 days OK; 10 years not OK).
3. In re Pressly (VT 1993) (p. 153): L who ignored his client’s direction not to reveal info about her
case (that she suspected her H of abusing her daughter) and told H’s lawyer broke confidentiality and
is subject to public censure.
i. Facts: In a divorce proceeding, a woman told her lawyer that she thought their child had been
sexually abused by her husband, but that she didn’t want the lawyer to say anything to anyone. L
told H’s lawyer, and she sued.
ii. Holding: The L breached his fiduciary duty of confidentiality, since the client had not expressed
or implied that it was OK for L to reveal confidential info. L knew or should have known that
revealing the info broke his client’s confidence, and so he shouldn’t have done it even if his
intentions in doing so were good.
B. PHYSICAL HARM
1. Rule 1.6(b)(1): A L may reveal info relating to the representation of a client to the extent the L
reasonably believes necessary to prevent reasonably certain death or substantial bodily harm.
i. This rule does not tie disclosure only to CLIENT conduct. It’s all about whether there’s a risk of
harm to anybody. So if client tells L that his son is going to kill V, L can still warn V.
2. HYPO: If L’s client tells L confidentially that he intends to commit suicide, L MAY reveal that info in
an attempt to prevent serious bodily harm or death to the client. Rule 1.6 doesn’t require disclosure,
i. Facts: L met with a client who said he needed a new will b/c he’s terminally ill. He then tells L
that as soon as his affairs are in order, he’s going to commit suicide. L said don’t do it, but I’ll
write your will. L wants to know if she should do anything re revealing her client’s plans.
a) The info the client gave L is clearly confidential. Even though L didn’t need to know about
client’s suicide plans, it’s info learned in the course of the rep, so is confidential.
b) Rule 1.6(b)(1) permits disclosure to prevent reasonably certain death or substantial bodily
harm. This includes death from suicide – so breaking confidentiality is PERMITTED (though
not required) here.
iii. Note: L may suspect client has diminished capacity b/c of his illness or suicide threat. In that
case, L has the right (though not the obligation) to take action to help the client out (Rule 1.14).
But if L has no reason to suspect client’s incapacity, then must rely on 1.6.
iv. Note: Before L discloses, she should definitely talk over her plans with the client.
3. Hawkins v. King County (Wash. App. 1979) (p. 156): The lawyer has a duty to (MUST) warn a
threatened third party about his client’s potential violence only when the potential victim is unaware
of the threat OR where the lawyer knows beyond a reasonable doubt that the client will commit the
crime. Otherwise, the lawyer as a right to (MAY) warn, but is not required to do so.
i. Facts: Lawyer was representing an inmate at his bail hearing. A psychiatrist told the lawyer that
he thought the inmate was mentally unstable and dangerous, but the lawyer nonetheless complied
with his client’s request for freedom. After he was released on bail, he assaulted his mother then
tried to commit suicide. His family sued the lawyer for malpractice and negligence.
ii. Holding: The court said that the duty of counsel to be loyal his client and to zealously represent
his interests overrides the nebulous and unsupported theory that counsel should reveal information
that would be detrimental to his client’s stated interest.
a) “The obligation to warn, when confidentiality would be compromised to the client’s
detriment, must be permissive at most, unless it appears beyond a reasonable doubt that the
client has formed a firm intention to inflict serious personal injuries on an unknowing third
b) The family members knew that the inmate might be dangerous if released, thus “no duty befell
[L] to warn [mother] of a risk of which she was already fully cognizant”
4. Crime-Fraud Exception to the A-C Privilege
i. Def: The A-C privilege doesn’t apply when the lawyer aids and abets a criminal’s illegal
conduct/furthers the criminal enterprise.
ii. Generally, the exception is only triggered
a) When the L breaches confidentiality and part of the conversation becomes known OR
b) There’s some sort of paper trail.
iii. Purcell v. District Attorney for the Suffolk District (Mass. 1997) (p. 158): The A-C privilege
does not protect communications where the client was seeking advice from L re how to commit a
crime (crime-fraud exception kicks in). The burden is on the one asserting the privilege to prove
a) Facts: Lawyer was consulted by a client he determined was planning on burning down an
apartment building. He called the police, who searched the client’s apartment and found
incendiary materials, disabled smoke detectors, and gasoline poured on the floor. The client
was arrested for attempted arson. They wanted the lawyer to testify at trial about his
conversation with the client, but he refused.
b) Holding: If the client’s discussions with the L were made for the purpose of getting advice
for the commission of a fraud or crime, then the discussions are not protected by the A-C
privilege – the crime-fraud exception applies. The burden of proving that client was using L’s
services to help him commit a crime are on the party asserting the privilege.
(1) “A statement of an intention to commit a crime made in the course of seeking legal
advice is protected by the A-C privilege, unless the crime-fraud exception applies. That
exception applies only if the client or prospective client seeks advice or assistance in
furtherance of criminal conduct.”
c) Rule: The crime-fraud exception only applies when the client is seeking advice for the
furtherance of a crime. A statement by client about his intentions that doesn’t involve asking
the lawyer for help is not included in the exception.
(1) Reason: We want lawyers to be able to feel free to call the police and break
d) NOTE: Judge conducted a discretionary in camera review of the substance of the
conversation concerning arson between L and the D in determining whether C-F exception
applied to their conversation.
iv. HYPO: A statement of intent to commit a crime by a client which L reveals to police to prevent
the crime does not fall under the C-F exception to A-C privilege unless the client intended to use
the L’s help in committing the crime.
a) Facts: A client told L that he was so angry at his ex-employer that he wanted to know if L
could help him find a legal remedy. L said she didn’t think the client had much of a case. On
the way out of her office, the client says he’s going to burn his employer’s office down. So L
calls police to warn them. Police catch client with the gas tank. He’s arrested and charged
with attempted arson. Gov’t wants L to testify to what was said in their conversation.
b) Issue: Can L be forced to testify (assume that she was free to disclose client’s plans under
1.6(b))? Does her disclosure to the police waive the privilege entirely? What is confidential
about a declaration of client’s intent to commit arson?
c) Outcome: Under Purcell, a client statement “I’m going to commit arson” followed by L’s
disclosure to police is not covered by the C-F exception and so remains confidential/covered
by the A-C privilege.
d) Note: It’s the CLIENT’S intention that triggers the C-F exception. If L innocently gives
advice that client intends to use for a crime, the L can be compelled to testify. However, if it’s
the lawyer who intends to commit a fraud, C-F exception doesn’t apply b/c the client was
innocent of wrongdoing.
e) Q: Why didn’t breach of confidentiality (talking to police) waive privilege?
f) A: The breach didn’t describe the conversation. But if L had described a conf. conversation
to the SEC, the breach would have waived the privilege.
g) C-F Exception kicks in when:
(1) Client intends to commit crime, AND
(2) Solicits L’s services/advice for the purpose of committing or furthering the crime
If neither above apply, conversation was still privileged and L cannot be forced to
testify about the contents of the conversation. BUT L can still call the cops to prevent
the crime without violating A-C privilege, so long as he does not testify about the
5. Spaulding v. Zimmerman (Minn. 1962) (p. 161): Lawyers of D had an obligation to disclose info
re D’s medical condition (and potential death) when applying for court approval of a settlement that
they wouldn’t have been required to disclose had it been an adversarial proceeding.
i. Facts: Spaulding (P) was in a car accident and suffered injuries. Sued Z (D). D’s doctors
examined P and found an aneurysm. D did not reveal the aneurysm to P. The case was settled. P
then died from the aneurysm.
ii. Issue: Did D’s lawyers have an obligation to warn P about the aneurysm?
iii. Holding: “There is no doubt that during the course of the negotiations, when the parties were in
an adversary relationship, no rule required or duty rested upon Ds or their representatives to
disclose [knowledge of the aneurysm]. However, once the agreement to settle was reached, it is
difficult to characterize the parties’ relationship as adverse.” At that point, Ds had an obligation to
reveal the info to P.
a) There’s no obligation to disclose in an adversary situation. But once that situation disappears,
an obligation arises.
iv. Note: Medical rules now say if an examining physician hired by the opposing party discovers an
illness, the physician has a duty to disclose. But when the case was decided, that wasn’t the rule.
v. Would model rules permit D’s lawyers to reveal injury? YES. Rule 1.6(b)(1) allows the
lawyer to reveal the info to prevent substantial bodily harm – but not that it is a MAY rule, not a
must. Case confirms that in the context of contentious litigation, the Ls don’t have an obligation
to reveal the injury; but once the case settles, they do.
C. DEFENDING AGAINST A LAWSUIT
1. Rule 1.6(b)(5): A L may reveal info relating to the representation of a client to the extent the lawyer
reasonably believes necessary to establish a claim or defense on behalf of the L in a controversy
between the L and the client, to establish a defense to a criminal charge or civil claim against the L
based upon conduct in which the client was involved, or to respond to allegations in any proceeding
concerning the L’s representation of the client.
2. HYPO: A L being sued may not reveal ALL confidential info she has – L may only disclose info
related to the case necessary for her defense, and she may only disclose it to those who are required
to hear it for purposes of the suit (the judge, other side, etc.).
i. Facts: L says one of our clients wants to sue us for malpractice re a leasing transaction we
handled. L says she has good confidential info about the client – we can threaten to disclose info
about the client’s illegitimate son if the client goes forward with the malpractice suit. The rules of
professional conduct say we don’t have to maintain confidentiality once we’ve been sued.
ii. Analysis. While there is an exception allowing Ls to break confidentiality when they are sued,
the right to breach only applies to information relevant to the claim. We can’t reveal confidential
information unrelated to the lawsuit.
a) An L must disclose the minimum amount possible.
b) Also, L must disclose to as few people as possible – can disclose to the judge, but not to the
D. SEEKING ADVICE AND SELF DEFENSE
1. Rule 1.6(b)(4): A L may reveal info relating to the representation of a client to the extent the lawyer
reasonably believes necessary to secure legal advice about the lawyer’s compliance with these rules.
2. See Rule 1.6(b)(5) (above) for self defense provision.
3. HYPO: A L may not reveal info to successor counsel without the client’s OK. There is no exception
to confidentiality for successor counsel (though there is an exception for co-counsel).
i. Facts: Fox finally got rid of a bad client. F gets a call from a lawyer friend who says that the
client wants to hire him. Friend wants to know why F and the client parted ways. The reason was
that the client didn’t pay F.
ii. Analysis: Nonpayment of bills IS CONFIDENTIAL. Therefore F can tell his friend nothing.
Even though it seems like F should be able to discuss issues with successor counsel, there is no
exception for successor counsel in the rules. So F can only reveal the info with the client’s OK.
iii. Note: There is an exception for co-counsel.
4. HYPO: Ls can break confidentiality to get advice re an ethical dilemma, but can’t break
confidentiality just to get general legal advice without CL’s OK.
i. Facts: M gets phone call from another lawyer who says I am having problem with George,
president of Big Bank, and I think I need some advice in how to be his lawyer. Should M talk to
ii. Issue: How does a L get advice when she needs advice on how to deal with a client (not
necessarily to defend a claim)?
iii. Outcome: Under 1.6(b)(4), L can reveal info to get advice about how to deal with the client – so
long as the advice is re an ethical dilemma. (Can’t break confidentiality to just get general legal
advice without client’s OK).
a) People who seek advice on difficult ethical problems will rarely lose their license.
iv. Note: When seeking advice, L has to tell other attorney who the parties are b/c want to make
sure that person is free to give ethics advice
v. Note: Many jurisdictions have not yet adopted 1.6(b)(4). Courses of action for Ls in jx that have
not adopted the rule:
a) Seek advice from anyone at your firm
b) Go outside, but use hypotheticals and keep it anonymous.
c) Ask state bar hotline - but use hypothetical questions and keep it anonymous.
5. Meyerhofer v. Empire Fire & Marine Insurance Co. (2nd Cir. 1974) (p. 173): A L may give a
person trying to sue him a memo he wrote for his client that discloses otherwise confidential info b/c
he may disclose confidential info to defend himself from suit (1.6(b)(5)).
i. Facts: Company and law firm were sued for allegedly making misleading statements in the
offering of stock. In order to show he had nothing to do with the alleged misrepresentation, the
lawyer showed privileged information to the opponent that proved his innocence, and he was
subsequently dropped from the lawsuit.
ii. Holding: The court noted that the cost to the lawyer in defending the suit would have been
extremely high, as well as the possibility of damage to his reputation. He therefore had the right
to make an appropriate disclosure about his amount of involvement in the alleged conduct, as well
as the right to back it up with suitable evidence. Still a narrow exception – can only reveal
information relevant for L to exculpate himself.
E. FINANCIAL HARM
1. Rule 1.6(b)(2): A L may reveal info relating to the representation of a client to the extent the L
reasonably believes necessary to prevent the client from committing a crime or fraud that is
reasonably certain to result in substantial injury to the financial interests or property of another and
in furtherance of which the client has used or is using the L’s services.
2. Rule 1.6(b)(3): A L may reveal info relating to the representation of a client to the extent the L
reasonably believes necessary to prevent, mitigate or rectify substantial injury to the financial
interests or property of another that is reasonably certain to result or has resulted from the client’s
commission of a crime or fraud in furtherance of which the client has used the L’s services.
3. United States v. Chen (9th Cir. 1996) (p. 178): The A-C privilege applies when a client asks a
lawyer to help bring it into compliance. But the crime fraud exception will also apply if the
communications between the CL and the L were in furtherance of an intended or ongoing illegality
AND that there is some relationship between the communication and the illegality. If D alleges C-F
exception applies, it must satisfy two-step process outlined below.
i. Facts: Lawyer was hired to help bring company into compliance with laws they had been
breaking in the past. The lawyer was subpoenaed, and said that lawyer-client privilege protects
their communications, but the government argued that the representation was used to further an
ongoing fraud, and so it wasn’t privileged.
ii. Holding: The A-C privilege applies when a client asks a lawyer to help bring it into compliance.
But the crime fraud exception will also apply if the communications between the CL and the L
were in furtherance of an intended or ongoing illegality AND that there is some relationship
between the communication and the illegality. The party seeking to strip attorney-client privilege
under the crime-fraud exception must satisfy two steps:
a) they must satisfy the judge that there is a factual basis adequate to support a good faith belief
by a reasonable person that an in camera review of the materials may reveal evidence to
establish the claim that the crime-fraud exception applies.
b) then if the judge decides (1) in favor of the moving party, the material may be submitted for
an in camera examination.
iii. Note: L must testify even though L is not trying to perpetrate the fraud.
iv. Note: Court holds here that they will not even look at privileged documents unless gov’t makes
prima facie showing that there was a crime or fraud.
4. HYPO: If the L’s services in any way facilitated the crime or fraud (even if L didn’t do anything
wrong themselves), L can be made to testify
i. Facts: M told our client, right before client filed bankruptcy, that he must put down all of his
assets on the forms including brand new BMW just bought. Client didn't follow M's advice and is
indicted for bankruptcy fraud -- specifically client did not list BMW. Can M be called to testify in
a) Arg that C-F exception doesn’t apply is that the Ls were not being used to facilitate the crime
b/c the L did not fill out the forms.
b) But Chen held that even Ls who don’t help perpetrate fraud have to testify if client used their
info to commit the fraud.
iii. Rule: Fox thinks that the key is facilitation. If the L’s services in any way facilitated the crime
or fraud (even if L didn’t do anything wrong themselves), L can be made to testify.
5. Misrepresentation/Client Fraud
i. Rule 1.2(d): A L shall not counsel a client to engage, or assist a client, in conduct that the L
knows is criminal or fraudulent, but a L may discuss the legal consequences of any proposed
course of conduct with a client and may counsel or assist a client to make a good faith effort to
determine the validity, scope, meaning or application of the law.
a) Prohibits Ls from counseling or assisting clients in conduct the L knows to be criminal or
ii. Rule 4.1: In the course of representing a client a lawyer shall not knowingly (a) make a false
statement of material fact or law to a third person OR (b) fail to disclose a material fact when
disclosure is necessary to avoid assisting a criminal or fraudulent act by a client, unless
disclosure is prohibited by Rule 1.6.
iii. Rule 3.3: Requires Ls to disclose info where necessary to avoid knowingly assisting a criminal
or fraudulent act by a client on a tribunal or third person.
iv. HYPO: Rule 4.1 says we have to tell the truth. However, a comment says we can “puff” – it’s
OK to negotiate
a) Facts: M is worried about client liability. Client is prepared to settle for $5 million. M met
with other side in a mediation session. The mediator said to M, "What is your best offer?" M
says my client will never pay more than $500,000 After the meeting, gets a letter from other
side saying he is reporting her for violation of Rule 4.1 for a misrepresentation b/c sure client
is willing to pay more than $500,000. Was it OK to lie?
b) Outcome: Rule 4.1 says we have to tell the truth. However, a comment says we can “puff” –
it’s OK to negotiate (and therefore to start out with different numbers than client actually gave
c) Note: Client discussions about settlement are confidential. So L can’t talk about settlement
numbers without having the client’s permission to do so.
v. HYPO: If client lies to L so that L will tell the lie to a third party, L has an obligation under 4.1
to disclose the misstatement b/c rule 1.6 doesn’t bar disclosure of client fraud. If, however, the
client didn’t intentionally deceive the L but just misspoke and the L unknowingly passed on the
misinformation, it doesn’t seem like the rules allow L to reveal the mistake to the third party.
a) Facts: M thinks she is in trouble. She was engaged in some negotiations over purchases of
land. She was representing seller. She met with buyer's lawyer. Before the meeting, seller
told M that the property was zoned commercial. M told other side this, which piqued their
interest. Buyer is going to make an offer tomorrow. M told client about conversation and
client said, I made a mistake, the property is actually residential. Note that M did not make a
misrepresentation. What should M do?
b) Analysis: M has a piece of confidential info – that the property is zoned residential. So M
either has to get client consent to reveal the truth OR find an exception to confidentiality if she
wants to reveal the truth.
(1) There is an obligation to disclose (L MUST disclose) if the L KNOWINGLY made a
misrepresentation. (rule 4.1(b)) But here the L didn’t knowingly misrepresent – L thought
she was telling the truth.
(2) Rule 4.1 says that if L has participated in a client fraud she MUST disclose UNLESS
prevented by Rule 1.6. Rule 1.6 doesn’t prevent disclosure if a L’s service has been used
to commit a fraud. So question here would be whether L was used to commit a fraud. If
it’s an honest mistake, is it a fraud?
(i) So if client lied to us about it being commercial and meant us to misrepresent, it’s an
easy case – we have to reveal.
(ii) But if it was an innocent mistake, it’s a harder instance.
c) Rule: If you have discretion to reveal under 1.6, you MUST disclose if required to do so by
4.1. In other words, 4.1 requirement is absolute unless completely barred by 1.6.
vi. In re American Continental Corp./Lincoln Savings & Loan Securities Litigation (Jones Day
Case) (D. Ariz. 1992) (p. 189): SJ denied to law firm issuing an opinion letter rather than
withdrawing representation or counseling compliance. Choosing to issue the letter raises issues
of material fact.
a) Facts: L Schilling was not allowed to work for banks b/c he had been a banking regulator
recently, but he went after them as clients anyway. Jones Day knew of irregularities, but kept
repping the bank anyway. Schilling wrote a memo saying “We were made for Keating and
Keating was made for us.”
(1) The law firm got way too involved in its client’s business/overidentified with the client
and so failed to advise the client not to engage in a course of conduct designed to deceive
(2) Actions that seemed innocent at the time were in retrospect obviously fraudulent.
(3) See the highlights for issues.
(4) Don’t quote this case on the exam – it’s too complicated.
vii. HYPO: Before do 4.1/1.6 analysis, an L must determine whether or not the client has
committed (is committing) a fraud. Once L thinks CL committed a fraud, she then must determine
what the proper action is. 4.1 only applies if the fraud is ongoing. If fraud is not ongoing, L may
instead simply withdraw or make a noisy withdrawal.
a) Facts: L is at a closing dinner. On the way out, the client’s CFO says “I’m sure glad we’ve
finished this IPO and we didn’t have to disclose that threatened infringement suit.” But if L
had known about it, she was obligated to put it in the offering statement.
b) Issue: Is L permitted to disclose what she thinks may be a client fraud? It’s not clear that
there is a client fraud – we don’t know who’s suing, how valid the claim, how central it is.
(1) If there IS a fraud, under Rule 4.1(b) a L can’t knowingly fail to disclose a material fact
when disclosure is necessary to avoid that fraud unless absolutely barred by Rule 1.6.
But 1.6 allows disclosure of client fraud IF (1) disclosure will help prevent a crime or
fraud that will result in serious financial injury AND the L was used to help commit the
fraud. So once you figure out that the client committed a fraud, you have to reveal the
(i) Rule 1.6 permits, but doesn’t require disclosure of PAST behavior.
(1) Therefore it permits a lawyer to withdraw instead of revealing the info. It also
permits a “noisy withdrawal” → L doesn’t have to hide the fact of the
withdrawal, and may actually actively tell people about it.
(ii) Rule 4.1 is re ongoing behavior that the L could potentially stop.
(iii) So once you determine there was a fraud, then have to determine if disclosure is
necessary or if you can take lesser action (withdrawing as counsel and withdrawing
the opinion letter – making a noisy withdrawal – see rule 1.16 for when lawyer
MUST (a) or MAY (b) withdraw). If rule 4.1 applies and fraud is ongoing MUST
disclose; if 4.1 doesn’t apply, L has more options.
d) Arg for disclosure: Ls should to be able to threaten in order to get clients not to commit
e) Arg against disclosure: Clients won’t discuss their fraud w/Ls unless Ls can’t reveal it, so Ls
won’t be able to dissuade them from the behavior.
f) Note: A jr. associate who thinks a partner is going to violate rules isn’t excused b/c she’s
junior. But it puts jr. in a tough place, so she should call an ethics expert (1.6 allows
disclosure to help yourself).
g) Note: If individual you are dealing with is difficult, you have to remember that in cases like
this, your client is the organization – Rule 1.13 says you rep the org not the individual. So if
the CFO balks, you can go to the CEO or BoD. You are not breaching confidentiality when
you go to someone else within the org.
(1) Sarbanes-Oxley mandates you go up the corporate ladder.
(2) Rule 1.13 doesn’t mandate you go up the ladder but it does mandate you to do
something/go somewhere for advice.
viii. HYPO: If crime or fraud is completely over/not ongoing, L doesn’t need to disclose anything.
And she may not under 1.6 unless client used the L’s services to commit the crime.
a) Facts: M meets with a CL who says “I stole money and it’s in a safe deposit box.” Does M
have to disclose anything?
b) Outcome: Obviously not – there’s no ongoing crime or fraud.
ix. HYPO: If CL shows L stolen goods, L still does not have to disclose the info so long as L doesn’t
hold onto or alter the goods.
a) Facts: What if CL comes in with a backpack and asks the L to hold onto stolen money, but L
says no, she won’t hold onto it.
b) Outcome: No requirement to disclose so long as L doesn’t alter the evidence and isn’t
holding on to it.
F. LAW OR COURT ORDER: PHYSICAL EVIDENCE
1. In re Original Grand Jury Investigation (Ohio 2000) (p. 207): A L who gets a letter (or other
physical evidence) from a CL indicating the CL is planning to commit a crime is required to, and can
be compelled, to turn the physical evidence over.
i. Facts: Lawyer was representing a D in a murder trial. Lawyer came into possession of a
threatening letter written by D that threatened third parties. Lawyer read the letter to the judge,
who alerted the people threatened. The lawyer withdrew his representation, and was then
subpoenaed to turn over the letter and testify about what it contained. He refused.
ii. Holding: The court ruled that the lawyer had to turn the letter over to the court, as it was physical
evidence of a crime, but he didn’t have to testify about it. L had the right to disclose the contents
of the letter to prevent the crime (and he even went too far by reading the whole letter). He is
required to turn the letter over b/c under Ohio law D’s L must produce real evidence obtained
from his CL or from a third-party source. “Accordingly we hold that where an attorney receives
physical evidence from a third party relating to a possible crime committed by his or her client, the
attorney is obligated to relinquish that evidence to law-enforcement authorities and must comply
with a subpoena issued to that effect.”
2. HYPO: An L cannot disclose the location of bodies CL said he killed b/c doing so violates
confidentiality AND the CL’s 5th Am. right not to incriminate himself. If L thinks Vs are still alive and
may be saved, however, he may reveal.
i. Facts: What if CL says I want you to defend me; I know where the bodies are? The whole town
is looking for the bodies of these children. P tries to subpoena the L to get the info.
ii. Outcome: L can’t disclose the location of the bodies unless the crime is ongoing (people may
still be alive). If L suspects Vs are still alive, may disclose under 1.6(b)(1) to prevent death or
iii. People v. Belge (p. 211): A L cannot be indicted for failing to tell police when a CL tells where
a body is b/c that would violate the CL’s 5th Am. rights.
a) “Attorney Belge was affirmatively required to withhold disclosure. The criminal D’s rights
become completely nugatory if compulsory disclosure can be exacted through his attorney.”
b) “In this type of situation we must balance the rights of the individual against the rights of
society as a whole.”
c) Facts are that D was the lawyer for a man accused of murder. Based on what his client told
him, D found the body of one of the people his client had murdered, but he did not tell anyone
about it. This later came out at trial, and D was charged with violating a law that requires a
decent burial for dead bodies.
G. LAW OR COURT ORDER: PRACTICE BEFORE A TRIBUNAL
1. Rule 3.3 – Candor Toward the Tribunal: (a) A L shall not knowingly (1) make a false statement of
fact or law to a tribunal or fail to correct a false statement of material fact or law previously made to
the tribunal by the L; (2) fail to disclose to the tribunal legal authority in the controlling jurisdiction
known to the L to be directly adverse to the position of the CL and not disclosed by opposing counsel;
or (3) offer ev that the L knows to be false. If a L, the L’s client, or a W called by the L, has offered
material ev and the L comes to know of its falsity, the L shall take reasonable remedial measures,
including, if necessary, disclosure to the tribunal. A L may refuse to offer ev, other than the testimony
of a D in a criminal matter, that the L reasonably believes is false.
(b) A L who represents a client in an adjudicative proceeding and who knows that a person intends to
engage, is engaging, or has engaged in criminal or fraudulent conduct related to the proceeding shall
take reasonable remedial measures, including, if necessary, disclosure to the tribunal.
i. Note: The requirements of 3.3 are MANDATORY. L doesn’t have discretion when the CL
commits perjury. But you have to recognize the limits of 3.3, esp. re administrative agencies.
Sometimes agencies have adjudicative functions and conduct hearings, and when those hearings
are ongoing, 3.3 applies. But when there are no hearings, rule 3.3 doesn’t apply.
ii. Note: While in cases of bodily harm, a lawyer MAY disclose (1.6(b)(1)), in cases of perjury a
lawyer MUST disclose (3.3).
2. HYPO: When a CL lies in a meeting with an admin agency, 3.3 doesn’t apply b/c it’s not a hearing
or trial. So to be able to disclose, L can look to 4.1, see if the lie counts as a fraud.
i. Facts: M goes to a meeting with the IRS b/c CL is being audited. IRS asks CL a question and CL
lies. Does M have to disclose that the CL lied?
a) Rule 1.2(d) says that we can’t aid and abet a CL fraud. But we didn’t do anything at all here,
so it doesn’t seem as if we’re aiding and abetting anything.
b) It doesn’t seem as if any 1.6(b) exception to confidentiality applies here (no financial interests
of a third party are being injured or anything).
c) Rule 3.3 requires candor to the tribunal – were we before a tribunal, it would apply. But this
is not an adjudicative proceeding. While the tribunal doesn’t have to be a court, this probably
doesn’t count as a tribunal.
(1) Administrative hearings would be considered adjudicative proceedings; but here there
was just a meeting re an audit – so no proceedings.
d) So look to 4.1 – is this an ongoing fraud that the L is aiding and abetting? If yes, than have to
reveal unless barred by 1.6. And if there’s a fraud, gov’t would argue that financial interests of
a third party – the government – were being injured.
iii. Note: You may also want to look at RULE 3.9, which deals with the duty of candor before a
legislative body or administrative agency in non-adjudicative proceedings.
3. HYPO: A L does not violate 3.3 when she is untruthful about the CL’s max settlement amount if the
judge is acting as a settlement mediator rather than a judge. Application of 3.3 depends on the
circumstances, not on the intermediary’s title.
i. Facts: L goes before a judge and the judge asks what the max L can settle for is. L’s authority is
$5 million but tells the judge $500,000. Has L violated her duty of candor under 3.3?
ii. Outcome: NO. When a judge is acting as a settlement intermediary, she is not the tribunal so the
duty of candor doesn’t apply. 3.3 depends not on whether the person is a judge, but on whether
the person is acting as a judge.
4. People v. Casey (Colo. 1997): A L has a duty to reveal his CL’s true identity to the court when the
court mistakes her for another person/the CL identifies herself as someone else.
i. Facts: CL SR is arrested and identifies herself as SJ (a diff person). When representing her, L
does not correct the court’s assumption that CL is SJ, even though he knows she’s really SR.
ii. Issue: Did L have a duty to identify the real identity of his client?
iii. Holding. Yes. “The respondent had the duty to disclose to the court that his client was
impersonating SJ in the criminal proceeding. . . . The duty to be truthful to the court applies even
if to do so requires disclosure of otherwise confidential information (rule 3.3(b)).”
iv. Note: It’s even more obviously required that L break confidentiality and reveal CL’s true
identity if CL actively lies about her name to the judge/in the hearing.
5. In re Forrest (NJ 1999) (p. 224): L has a duty to reveal to the court the death of a CL in a personal
injury case b/c L’s duty of candor includes the duty to correct implicit assumptions that are
i. Facts: Lawyer was representing a married couple in a personal injury suit. Before a settlement
was reached, the husband died of causes unrelated to the accident, and the lawyer failed to disclose
his death to the other attorneys or the tribunal. His death was only discovered when the husband
failed to show up for a medical examination.
ii. Holding: The court found that this was a breach of MRPC 3.3(a)(1) as well as the stricter NJ
rules of professional conduct. “A misrepresentation to a tribunal is a most serious breach of ethics
because it affects directly the administration of justice.” Pretending that CL is alive is more than
just puffing, it’s a misrepresentation.
a) When the H died, L no longer had a claim b/c the injuries on which the claim was based were
no longer an issue – the injured party died.
b) The duty of candor includes a duty to correct implicit assumptions that are fundamental.
(1) Clearly the assumption that the injured party is alive is fundamental.
(2) It would be even more fundamental if H was the only client and the settlement was going
to be for his long-term care; then when he dies, L no longer has a CL.
6. HYPO: A L is under no obligation to correct a judge’s mistaken belief if the L and the CL had
nothing to do with creating that belief.
i. Facts: During a sentencing hearing, the judge says it’s a serious offense, but since it’s the client’s
first offense, the judge is only sentencing CL to six months. L knows it’s actually CL’s third
offense. Does L have a duty to reveal the truth to the court, considering neither he nor CL had a
rule in judge’s mistake?
ii. Fox’s A: L doesn’t have an obligation to reveal. It’s an adversarial process and the obligation is
on the judge and prosecutor to bring out the priors. If L or CL didn’t create the problem, L is
not obligated to reveal the truth and may even be prohibited from revealing it.
7. Matter of Hendrix (7th Cir. 1993) (p. 227): Rule 3.3 requires that a party bring to the court’s
attention controlling precedent in the jurisdiction that is adverse to their position.
i. Facts: An insurance company appealing a decision failed to cite the only case in the district that
was a controlling authority in the situation because it was adverse to their position. They chose
instead to ignore the case.
ii. Holding: The court said that this amounted to a frivolous appeal, and failing to cite the case
violated MRPC § 3.3(d). Rule 3.3 requires that a party bring to the court’s attention controlling
precedent in the jurisdiction that is adverse to their position.
a) Note that the case that the insurance company failed to cite was a well known case, was the
only case in the district, and a ruling in favor of the insurance company would have required
the court to overrule it directly. This shows that a future issue may be is the case a controlling
8. The Lying Client in the Criminal Context
i. Nix v. Whiteside (SCOTUS 1986) (p. 236): A L is not obligated to put CL on the stand if he
thinks his CL will lie. And he can tell CL he will withdraw as counsel if CL testifies in a way that
CL has told him is perjury.
a) Facts: Defendant in a murder trial was asserting self defense, but he told the lawyer he didn’t
actually see a gun in the victim’s hand. The lawyer said that if the D testified that he saw a
gun the lawyer would withdraw because D would be committing perjury. So D testifies and
admits he didn’t see a gun in V’s hand. D was found guilty and he appealed arguing that the
lawyer’s threat prevented him from getting a fair trial.
b) Holding: The court ruled that the lawyer was well within his rights to persuade his client not
to commit perjury. The lawyer did not reveal any client confidences, and there is no reason to
believe that the defendant was denied a fair trial by not lying on the stand.
ii. Commonwealth v. Mitchell (Mass. 2003) (p. 239): If a L knows a CL is lying, he can ask the
CL to tell his story in narrative form, but if L knows it’s a lie, L can’t use the testimony in his
closing arguments b/c using it in closing = L assisting the lie (but just asking for CL to tell his
story provides no assistance).
a) Facts: Lawyer knew his client was going to testify falsely at his trial. Lawyer informed the
judge that the client was to testify falsely, and asked the judge how to proceed. The judge
allowed the client to testify in narrative form. In the closing argument, the lawyer did not
mention his client’s testimony at all.
b) Holding: The court ruled that Rule 3.3(e) was properly invoked by the lawyer, and that it was
properly done in the prosecutor’s presence. The prosecutor did not know which portion of D’s
testimony was going to be perjurious, and had he not been informed of the invoking of Rule
3.3 he would have vigorously objected to the narrative testimony, drawing more attention to it
from the jury.
(1) Mass. R.Prof.Con. 3.3(e): In a criminal case, defense counsel who knows that D intends
to testify falsely may not aid the client in constructing a false testimony, and has a duty to
strongly discourage the client from testifying falsely. If a criminal trial has commenced
and the lawyer discovers that his client intends to testify falsely, he is not required to
withdraw from the representation if that will prejudice his client. If a lawyer learns after
the fact that his client has testified falsely, he shall persuade the client to rectify the
situation, but is not required to reveal false testimony to the tribunal. In no situation
shall the lawyer examine his client to elicit testimony that the lawyer knows to be false,
and the lawyer cannot argue testimony he knows was false in the closing argument.
9. Final Notes:
i. If the lie occurs during a deposition, the duty of candor applies b/c 3.3 applies to all discovery
ii. L must correct the mistake in the most effect/least damaging way.
a) In depo can take a bathroom break and get the CL to come back and tell the truth
b) In court there’s less you can do if a CL lies
iii. Under 3.3 there’s no affirmative duty to bring to the attention of the court mistakes in court’s
factual record. But there is an affirmative duty to bring to the attention of the court precedent that
is controlling in the jurisdiction that is adverse to the CL’s position. (Hendrix case)
a) Note that it may be better to bring precedent up even if you’re not positive it’s controlling b/c
if you do you can present it to the judge with all the arguments for why it doesn’t apply.
VII. DUTY OF LOYALTY
A. Rule 1.7 – Conflict of Interest: Current Clients (General Rule): (a) Except as provided in paragraph
(b), a L shall not represent a CL if the representation involves a concurrent conflict of interest. A
concurrent conflict of interest exists if: (1) the rep of one client will be directly adverse to another client;
OR (2) there is a significant risk that the rep of one or more clients will be materially limited by the L’s
responsibilities to another CL, a former CL, or a third person or by a personal interest of the L.
(b) Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a L may rep a
client if: (2) the L reasonably believes that the L will be able to provide competent and diligent
representation to each affected client; (2) the rep is not prohibited by law; (3) the representation does not
involve the assertion of a claim by one client against another client represented by the L in the same
litigation or other proceeding before a tribunal; AND (4) each affected CL gives informed consent,
confirmed in writing.
1. Under Rule 1.7, there are 2 ways a conflict of interest can be created
i. CL2 is directly adverse (on other side of v.) to CL1 (current CL)
a) This is an objective standard.
ii. Taking on CL2 presents a significant risk that the rep of CL1 will be materially limited.
a) This is more subjective
2. If none of the provisions of 1.8 apply but the two parties aren’t adverse, then you do a 1.7(a)(2)
analysis and determine whether there’s a significant risk that your representation of the original client
will be materially limited by taking on the second client.
B. Rule 1.8 – Conflict of Interest: Current Clients Specific Rules: This is really long. See the rules
1. How to approach CoI problems
i. (1) Identify the Client(s)
ii. (2) Determine whether a conflict of interest exists. Six categories:
a) Personal Interests of L
b) Interests of Another Current CL
c) Interests of a Third Person
d) Interests of a Former Client
e) Government Lawyers
f) Imputed Disqualification
iii. (3) Decide whether the conflict is consentable. If it is, consult with the affected clients and
obtain informed consent in writing.
2. HYPO: While a L/firm may not take on a client whose position is directly adverse to a current client
(1.7(a)), a L who reps a corporation is not automatically deemed to represent that corp’s subsidiaries.
A problem only arises if the particular situation suggests that the L reps the subsidiary as well.
i. Facts: M is asked to represent Co1 against Co2; Co2’s L also represents Co3 & Co3 is a wholly
owned subsidiary of Co1; can the L represent Co2?
a) Everywhere, except Texas, there is a rule that you may not take a position directly adverse to
your client no matter how unrelated the matters are or how big the client is (In Texas Ls can
take a position adverse to a CL so long as the matters are not substantially related).
b) Comment 34 to rule 1.7 governs a situation dealing with subsidiaries. It says that “A L who
reps a corp. does not by virtue of that rep necessarily rep any constituent or affiliated
organization, such as a parent or subsidiary.” Thus, the L for an org. is not barred from
accepting representation adverse to an affiliate in an unrelated matter, unless the circumstances
are such that the affiliate should also be considered a client of the L, there is an understanding
between the L and the organizational client that the L will avoid representation adverse to the
CL’s affiliates, or the L’s obligations to either the org client or the new client are likely to limit
materially the L’s rep of the other CL.
(1) Some sophisticated CLs will make it part of their representation K that the firm will not
take a position adverse to any affiliates.
(2) But without that agreement, the rule permits a L to take a position adverse to a wholly
owned subsidiary. (Of course, this risks that the parent may drop L as counsel).
c) So in this situation, no CoI arises automatically; but if circumstances indicate that the affiliate
should be considered a CL in this case, a conflict does arise.
iii. Note: L’s can get waivers to CoIs, but can’t do it in every situation (ex: Can’t call a CL to ask
for a waiver to sue that CL).
1. Maritrans GP Inc. v. Pepper, Hamilton & Scheetz (Pa. 1992) (p. 257): A trial court can issue a
preliminary injunction barring a law firm from representing a former client’s competitors where
allowing the representation to go forward creates too great a risk that the law firm would breach the
former client’s confidences. Too great a risk exists where the Ls and the former client had a
i. Facts: Pepper represented Maritrans, and in the scope of their representation they evaluated the
strengths and weaknesses of many of Maritrans’ competitors. Armed with this information,
Pepper sought to represent those competitors in their labor relations, during which the other
companies sought wage and benefit reductions in order to be able to compete better with
Maritrans. They did this in part by sending the competitors to Ls at other firms who they then
hired. Maritrans found out, and asked Pepper to stop, but Pepper didn’t think it was a legal
conflict. Pepper set up a screen between the Maritrans representation and the other
representations, with the attorneys on each matter not talking to each other.
ii. Holding: Even if the rules of professional responsibility do not specifically say they create a
cause of action, breach of the principles of loyalty & fiduciary duty provide the cause of action. A
lawyer’s duty of loyalty to his client stems from the common law, and long before the MRPC, the
common law recognized that a lawyer could not undertake a representation adverse to a former (or
current) client in a matter “substantially related” to that in which the lawyer had previously served
the client. Pepper’s actions here violated the CL duty of loyalty.
a) Even though Maritrans ultimately fired Pepper, that didn’t solve the problem. The matters
Pepper was seeking to take on for the competitors were still substantially related to the rep of
Maritrans, and Maritrans still was owed a duty of loyalty as a former client.
iii. Note: The rules now say that “they don’t necessarily provide a cause of action.”
2. Injunctive Relief
i. Since lawyers are fiduciaries, and fiduciaries owe duties of loyalty and confidentiality, typical
agency remedies apply to the lawyer-client relationship. This was the case in Maritrans, where
the client didn’t want to wait until its business had been damaged before bringing an action against
Pepper, they simply got an injunction preventing Pepper from representing their competitors.
i. Works like injunctive relief, but is for matters pending before a court. The party seeking
disqualification asks for prophylactic relief from the tribunal. When granted, disqualification
ensures that a matter will be tried without conflicting loyalties or that confidential information of a
former client will not be used against that client in the current matter.
ii. Disqualification motions can be brought by the client, the lawyer, any third party, or sua sponte by
In assessing disqualification motions, courts look to the relevant professional codes.
iii. Some courts require a higher standard, only granting disqualification where allowing the
contested lawyer to participate would taint the trial
E. PERSONAL INTERESTS OF THE LAWYER
1. Rule 1.8(a) – When a L can enter into a business transaction w/CL: A L shall not enter into a
business transaction with a CL or knowingly acquire an ownership, possessory, security or other
pecuniary interest adverse to a CL unless: (1) the transaction and terms on which the L acquires the
interest are fair and reasonable to the CL and are fully disclosed and transmitted in writing in a
manner that can be reasonably understood by the CL; (2) the CL 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 (3) The CL gives informed consent, in a writing signed by the CL . . .
i. The transaction must be entirely fair to the CL
a) Fairness is judged in hindsight.
ii. Client must give consent after full disclosure
iii. CL must be informed in writing that he should go see another L
a) The firm is better off if the CL does go see another L
iv. Note: Rule 1.8 indicates that a L who accepts shares of a CL’s stock creates a possible conflict.
a) will it be said that the firm’s independence was compromised by the interest in the stock?
b) there is an increased chance that the firm will be viewed as principals instead of just lawyers,
if the firm has a significant stock interest in the client and assists the client in stock offerings
v. Monco v. Janus (Ill. App. 1991) (p. 266): When a L and CL enter into a business transaction
together, a clear presumption of undue influence arises. L must rebut that with clear and
convincing ev, which can be done by showing that L satisfies three factors below.
a) Facts: Monco was Janus’s lawyer, Janus approached Monco with a business idea and said he
wanted Monco to be his partner. The two formed a business, during which Monco repeatedly
told Janus that he needed his own lawyer. Later the business relationship soured, and Janus
b) Holding: Because a strong presumption of undue influence arises when an attorney engages
in a transaction with a client and is benefited thereby, courts require clear and convincing
evidence to rebut this presumption. Some of the factors that courts deem persuasive in
determining whether the presumption of undue influence has been overcome include a
showing by the attorney that:
(1) He or she made a full and frank disclosure of all relevant info
(2) That adequate consideration was given
(3) That the CL had independent advice before completing the transaction.
c) Holding cont: Once the presumption has been rebutted, the burden of production and
persuasion is again on the CL. The court found that Monco failed to meet any of the 3 factors,
and so he exerted undue influence over Janus.
2. Rule 1.8(c) – Soliciting Gifts From CLs: A L shall not solicit any substantial gift from a CL,
including a testamentary gift, or prepare on behalf of a CL an instrument giving the L or a person
related to the L any substantial gift unless the L or other recipient of the gift is related to the CL.
i. HYPO: A L can name herself executrix of a will she is preparing – doing so is not giving herself a
testamentary gift or entering into a business transaction. She may even make herself the default
executrix in all wills, so long as she fully explains the situation to her CLs.
a) Facts: L says why doesn’t firm put in all the wills we write a standard clause naming M&F
executors of the estate. Ls serve as executors all the time. Is this doing business with the CL
(so 1.8(a) applies or getting a gift from a client 1.8(c)? Is it allowed even if it isn’t?
(1) Fox says it’s not doing business with a client or getting a gift (so doesn’t violate a or c).
But it is problematic to say you won’t write a will if you can’t be the executor or even to
set yourself up as the default executor.
(2) But if you make it clear that you discussed with the client the advantages and
disadvantages of naming a lawyer as executor and make full disclosure, you can solve the
(3) This case highlights the importance of having a CL sign an informed consent release
c) Note: If CL does pick L to be the executor, L can only pick her partners to be the estate’s
lawyers if doing so is in the best interest of the estate.
d) Note: Under 1.8(c) lawyers may NOT solicit gifts; and if CL wants to leave you a
testamentary gift, you can’t draft the will.
3. Rule 1.8(d) – Media Rights: Prior to the conclusion of representation of a client, a L shall not make
or negotiate an agreement giving the L literary or media rights to a portrayal or account based in
substantial part on info relating to the representation.
i. HYPO: D may not give L media rights to the case in lieu of payment; L can’t accept rights until
close of the case.
a) Facts: M has a chance to rep a celebrated criminal defendant. But the D doesn’t have any
money. So D offers to assign M the media rights to D’s story if M takes the case. Can she do
b) Outcome: NO – rule 1.8(d) directly prohibits getting media rights assigned as a fee. Once
case is over, D may in gratitude assign the rights, but not until then.
ii. Betty Lou Beets Case: Can’t assign media rights b/c it may cause L to act in his own interest
(make rights more valuable by extending trial) rather than in the client’s interest.
a) Facts: Widow comes to L saying her trailer burned down, killing her H. She asks L about
insurance. L tells her about death benefits. She’s then accused of capital murder for going
after the death benefits. L reps her for the murder charge in exchange for the media rights. He
didn’t want to lose the rights, so he didn’t recuse himself so he could be a witness saying she
didn’t know about the death benefits before he died – which would have made it a non-capital
case. She’s convicted. When these facts come out, she still loses on habeas b/c the Ct. says
she couldn’t show prejudice.
4. Rule 1.8(e) – Financial Assistance: A L shall not provide financial assistance to a CL in connection
with pending or contemplated litigation, except that: (1) A L may advance court costs and expenses of
litigation the repayment of which may be contingent on the outcome of the matter; AND (2) A L
representing an indigent client may pay court costs and expenses of litigation on behalf of the client.
i. HYPO: A L may not advance CL costs to help her live during pendency of litigation
a) Facts: M says we have a broke client and M is worried that the client will have to settle the
case too early to get some money. Can we advance money to the client so she can live until
the close of the case?
b) Outcome: NO – the ONLY $ a L can give a CL is court costs/the costs of litigation
ii. Reason for Rule: We don’t want the lawyer to have too great an interest in the matter. Also,
CLs should be able to get rid of the L whenever they want.
iii. Counter arg: (This is the reason that NY and Cali don’t have this rule and allow the
advancement of living expenses) – if the L is working on a 1/3 contingency fee, she can’t get any
more interested in the case.
iv. Note: Ls like the rule b/c it gives them an easy excuse to say no to the client.
5. Rule 1.8(h) – Malpractice Settlement: A L shall not (1) make an agreement prospectively limiting
the L’s liability to a client for malpractice unless the CL is independently represented in making the
agreement; OR (2) settle a claim or potential claim for such liability with an unrepresented CL or
former CL unless that person is advised in writing of the desirability of seeking and is given a
reasonable opportunity to seek the advice of independent legal counsel in connection therewith.
i. HYPO: L can settle with a client re a potential malpractice claim only if CL has separate counsel
or L has advised CL to get separate counsel in writing and CL refused.
a) Facts: M failed to meet the SoL in a case. Since she feels badly, she’s just going to offer the
client $5,000 to settle the case.
(1) Simply b/c L made a mistake doesn’t mean she should fall on her sword. She has an
obligation to disclose the situation to the client under the duty to disclose (1.4). She
might also have to withdraw b/c now she has a CoI (1.7). Besides, under 1.8(h) she
CANNOT settle unless CL is repped by other counsel or is first advised in writing of the
need for counsel.
(2) And just b/c she breached a duty doesn’t mean she’s liable for malpractice → breach
must cause damages
(3) However, L CAN settle with a client if she wants, so long as she FIRST gives the
client/urges the client to get separate counsel.
6. HYPO: Whether or not a L can oppose a firm where a relative works? Governed by rule 1.7
material limitation standard.
i. Facts: M has taken on a case against a big law firm. M’s brother is a partner at that firm. Can she
take the representation?
a) There used to be a 1.8 rule saying you couldn’t be directly adverse to certain relatives – it was
OK to be adverse to the brother’s firm but not to the brother as opposing counsel at trial.
b) But the ABA decided that such situations should be judged under 1.7. So M must determine
if there’s a substantial likelihood of a material limitation in her representation of her new CL
from the fact that her bro is a partner at opposing firm.
7. Rule 1.8(j) – Sexual Relations: A L shall not have sexual relations with a CL unless a consensual
sexual relationship existed between them when the client-lawyer relationship commenced.
i. HYPO: Whether a sexual relationship violates CoI rules depends on when the relationship began
AND whether the person L is dating is a representative of the client (if CL is an entity, must be a
representative of that CL under 1.13.
a) Facts: Associate Sarah (of M&F) is dating the general counsel of Big Bank. Is there anything
wrong with that?
b) Outcome: There’s nothing wrong if they were dating before M&F took on BB as a client; but
if S started dating him after we began repping BB, then it is a violation – the general counsel is
an entity representative of the client, so she can’t date him.
ii. In re Halverson (Wash. 2000) (p. 271): Divorce L violated ethics rules by having an affair with
his CL, even though he later withdrew as her L.
a) Facts: Wickersham came to Halverson to have him represent her in her divorce. The two of
them started having sex, and that went on for over 6 months until Halverson’s wife found out.
Halverson then sought to withdraw as her lawyer, and he referred her to another lawyer.
Wickersham alleged that because of the relationship she didn’t get a fair shake in her divorce,
and she found herself unable to trust her new attorney. Halverson should have told
Wickersham that the affair had the chance to further complicate the divorce proceedings, but
he did not disclose this to her at the commencement of the relationship.
b) Holding: The court suspended Halverson for 1 year followed by a year of probation for
violating the rules of ethics.
iii. Note: The reason we don’t want to allow sex with clients is that L may have undue influence
over the CL’s judgment.
iv. Note: The rule of imputation doesn’t apply to sexual relations. So as long as Sarah doesn’t work
on BB’s issues, the firm can still rep BB.
a) But then you have to decide if other Ls will be free of influence/judgment even though their
associate is sleeping with the general counsel. (Do 1.7 analysis). If they have no influence, can
continue; if not, must withdraw.
v. Note: The real question is does the relationship have some element to it that will inhibit the L’s
independence. Fox thinks a rule where you have to judge the relationships on a case-by-case basis
would be better → there shouldn’t be an absolute prohibition on sex b/c sometimes there’s no
a) Essentially he wants sex to be governed by the material limitation provision of 1.7
F. MULTIPLE CLIENTS
1. Aggregate Settlements
i. Rule 1.8(g) – Aggregate Settlements and Pleas: A lawyer who represents two or more clients
shall not participate in making an aggregate settlement of the claims of or against the clients, or
in a criminal case an aggregated agreement as to guilty or nolo contendere pleas, unless each
client gives informed consent, in a writing signed by the client. The lawyer's disclosure shall
include the existence and nature of all the claims or pleas involved and of the participation of
each person in the settlement.
ii. HYPO: The easy part of aggregate settlement is getting approval in writing for a settlement
offer; it’s much harder to navigate between clients and determine how much each one gets. If
CLs’ interests are irredeemably adverse, you should recommend they get separate Ls.
a) Facts: Three clients – mom, grandma, child – are injured in an auto accident. M is repping
all three. D has called up and said we’ll settle for the limits of our insurance policy (the real D
has no money). What should L do?
(1) The easy point to the aggregate settlement issue is the one outlined by 1.8(g) – the L has
to get all three CL’s informed consent in writing.
(i) Each client must be informed of the existence and nature of the settlement
(ii) Each CL must know what the others are getting.
(2) The problem with the rule is that it assumes that disclosure fixes the issues making
aggregate representation difficult
(i) The CLs’ interests may be adverse. Diff CLs may have diff impressions, diff
thoughts about what each should get.
(ii) If there’s one pile of money, how do you divide it?
(3) The truth is if a L gets herself into a situation where aggregate clients disagree about how
much each should get, L should get each separate counsel.
(i) It’s probably a good idea to recommend separate counsel from the get-go, even
though aggregating is often beneficial (strengthens claims; aids negotiations)
(4) Aggregate settlement rules don’t get you out of problems of conflict of interest. Can still
be liable for violating 1.7 rules.
iii. Burrow v. Arce (Tex. 1999): A L repping a group of aggregate clients may be forced to forfeit
his fees if he is found to have breached his duties to any individual clients.
a) Facts: Burrow’s firm represented workers injured in a plant explosion. The clients said that
the lawyers didn’t investigate individual claims and refused to meet with individual plaintiffs
for more than 20 minutes. Burrow got the Ps a settlement of $190 million, of which the
lawyers got $60 million. The lawyers argue that they can’t be made to give up their fee absent
a showing of actual damages.
(1) A client need not prove actual damages in order to obtain forfeiture of an attorney’s fee
for the attorney’s breach of fiduciary duty to the client.
(2) Whether an attorney must forfeit any or all of his fee is determined by examining several
(i) Should the lawyer, knowing the relevant facts and law, have known that his conduct
(ii) Did the lawyer perform valuable services before the misconduct began?
(1) If so, complete forfeiture might not be appropriate.
(iii) Would complete forfeiture be a windfall to the client?
(1) If so, complete forfeiture might not be appropriate.
(3) The question of whether to award forfeiture is a matter of law for a judge to decide, not a
2. Simultaneous Representation of Adversaries
i. Rule 1.7(b): Notwithstanding the existence of a concurrent conflict of interest, a L may represent
a CL if: (1) the L reasonably believes that the L will be able to provide competent and diligent
representation to each affected client; (2) the representation is not prohibited by law; (3) the
representation does not involve the assertion of a claim by one client against another client
represented by the L in the same litigation or other proceeding before a tribunal; AND (4) each
affected CL gives informed consent, confirmed in writing.
ii. HYPO: Before L can ask a CL to consent to L taking on a prospective CL that will raise a CoI,
the L must clear all confidentiality probs (get current AND prospective clients’ OK to reveal their
identities). L must also ensure that the conflict is consentable in the first place (can’t be on
opposite sides of a litigation; reas. lawyer would seek to consent).
a) Facts: M has been repping Viacom for an open channel in NYC called Channel 44. She has
been repping them for two weeks. Lawyer F just got a call from Disney who wants F to rep
them in an attempt to get Channel 44. Can F take on Disney as a CL?
(1) Rule 1.7(b)(1) says that if a lawyer reasonably believes he can provide competent
representation, then he can take on concurrent clients with adverse interests, so long as he
gets informed, written consent from both clients.
(2) However, M can’t call up Viacom and get its waiver unless she gets Disney’s OK to
make the call first because of confidentiality rules. And you can’t ask for Disney’s
waiver until you get Viacom’s OK to reveal that you rep them on this matter. If you
don’t get Viacom’s OK to disclose they’re a client, you have to reject Disney as a client
out of hand, and do it without telling them why.
(i) Basically, you need consent to reveal your representation of either party in order to
obtain consent to the conflict of interest.
(3) So, have to go through a two-step process before you can even ask for a waiver of the
conflict: (1) Decide if you can disclose you’re currently repping a CL to the prospective
client. Can you disclose to Disney you rep Viacom (Is Viacom representation public
knowledge? If yes, can ask Disney to consent. (2) If that info is not confidential, will the
prospective client allow you to reveal their interest to the current client? If no, have to
reject Disney because you can’t get Viacom’s consent. If yes, can call Viacom and start
to get a waiver.
c) Note: There are a number of clients that can NEVER be consented to/you can never take on.
(1) If the prospective CL will be on the opposite side of a litigation (1.7(b)(3))
(2) If no reasonable lawyer would seek consent (1.7(b)(1)).
d) Note: Fox says that this situation may be one that’s totally nonconsentable because, while
they’re not technically litigants, their position is LIKE those of litigants (both have same
interest in the same matter).
iii. HYPO: Even if we rep our current client in a matter totally unrelated to the matter the
prospective client wants to hire us on; if our current client is adverse to the prospective client on
the matter, must get informed consent to take on the representation.
a) Facts: Assume F got the call from Disney re channel 44. They told F their competitor for the
channel was Viacom. M&F is not repping Viacom in the ch. 44 matter, but does do other
work for Viacom.
(1) The position would not be directly adverse to current client, as in hypo above, so conflict
(2) However, we must still clear the confidentiality issues – will Viacom let us reveal we rep
them; will Disney let us reveal their interest in ch. 44?
(3) Still have to get OK both to reveal that we rep them and to the conflict itself.
c) Note: Rule 1.10 – all conflicts are imputed to the whole firm. No lawyer may represent
client that any single lawyer in the firm would be prohibited from doing by 1.7 (CoI) or
1.9 (former clients).
iv. HYPO: A CL cannot give prospective consent allowing L to take on a conflict; can’t consent to
a CoI before it arises.
a) Facts: M gets a call from a developer who wants us to handle an appeal from a zoning
decision in A-Town. However, two years ago we repped A-Town in tax collection matters.
At that time, the township manager told M that repping it wouldn’t interfere with the ability to
take on clients in other matters against them. A-Town is still a current client.
(1) This is a rule 1.7 situation b/c A-Town is a current client.
(2) So to take on developer, under 1.7(b) need informed, written consent.
(3) Question is, was A-Town’s prospective consent, given when we took them on two years
ago, enough to count as consent even if it’s written?
(i) Fox says NO – you can’t consent to a conflict before it arises. Still have to look at
the situation as it is now.
(1) Consent must be in writing
(i) Reason: clients don’t necessarily understand oral waivers or won’t remember giving
(2) “Informed” consent cannot be given before the conflict arises.
(i) Reason: Client doesn’t have any idea in advance what the conflict will be about OR
what the scope of L’s representation will be at the time the conflict arises.
(ii) The only way to get a prospective waiver is to outline a hypothetical situation and
get a waiver for those situations.
(3) Always determine if what is at issue is a consentable conflict under 1.7(b). There are
three ways a conflict is not consentable.
(i) No reasonable lawyer would seek consent.
(ii) The representation would be contrary to law
(1) Ex: Some states have laws saying municipalities may not consent to conflicts.
(iii) Can’t rep both sides of a litigation (or to a situation that looks LIKE a litigation).
v. Universal City Studios, Inc. v. Reimerdes (SDNY 2000) (p. 296): A lawyer cannot get around
a conflict by simply “firing” one of his clients
a) Facts: Lawyers who had previously represented a Time Warner subsidiary in a licensing
dispute regarding the Harry Potter books were now representing a website that was being sued
by Time Warner for violations of the copyright act. Time Warner sought to have the attorneys
b) Rule: A lawyer cannot get around a conflict by simply “firing” one of his clients.
c) Holding: Here, the court ruled that this situation normally would warrant disqualification of
the lawyers, but that Time Warner had waited too long to make their motion, so the D would
be unfairly prejudiced by having to find new counsel at this late stage. Additionally, the
matters were unrelated enough that there is little chance of the trial being tainted by the
3. Joint Clients
i. HYPO: A L may not rep both H and W in a divorce, even if they say they agree.
a) Facts: Fox gets a visit from a husband and wife who wants Fox to represent them in a
divorce. They say they’ve agreed to everything in advance. Can Fox take on the
b) Outcome: NO. If a L does this, the divorce may be challengeable later.
c) Reasons: While H and W may think they’ve solved everything, that might not be the case. A
L may look at the settlement and disagree with its fairness.
d) Note: This is a nonconsentable conflict – they’re on opposite sides of the v.
e) Note: This does not mean that L can’t mediate between the two spouses – rule 2.4. In that
situation, however, L must inform both that he is repping neither AND he must advise both
parties to each get a lawyer to rep them.
ii. HYPO: It is possible to defend two Ds simultaneously in a criminal prosecution; but if their
interests at any point become adverse, may have to withdraw.
a) Facts: M is asked to rep two Ds who have been accused of murder. Can she do it if they say
there’s no way they’ll plea?
b) Outcome: It’s difficult but not impossible to rep both. Can even make an arg that Ds have a
6th Am. right to share the same lawyer.
(1) But that doesn’t mean that we can always take on the rep.
(i) If when interview Ds we confirm that their interests are concurrent, we can do it.
(ii) But if circumstances are different or have changed, we may have to withdraw or
(1) Probably can’t rep one or the other at that point b/c have confidential info from
iii. HYPO: L can only rep two clients simultaneously if thinks their interests are concurrent and L
won’t have to mediate between the two/try to divide up inadequate amount of money between the
a) Facts: M gets a visit from father and son. Son was the driver, dad the passenger, in an
accident. The other driver is charged with speeding. F & S want us to sue the other driver.
Can we rep both F&S?
(1) Any time people present themselves to us as joint clients, we have to go beyond the
surface to see if there really is no conflict.
(2) Here, two things can prevent us from repping both
(i) 2 clients are not identically situated.
(1) Find out: Interview both separately before agree to rep – need to find out all
(ii) Can’t rep jointly in a situation where there’s not enough money to be won and
they’ll have to split up the award and neither will get the full amount.
c) Note: The default rule is that if one client gives you confidential info, you have to reveal it to
(1) Rule 1.4 trumps 1.6 in these situations→ you are a fiduciary to BOTH clients; fiduciary
obligation to keep clients informed trumps the duty of confidentiality
(2) However, you can change the default in the retainer agreement → can say if find out
conf. info from 1 client can simply withdraw without revealing it to 2nd CL.
(i) So if son tells you in private he had three drinks, could withdraw without revealing it
to dad only if it said so in the retainer agreement.
iv. Wolpaw v. General Accident Insurance Co. (NJ Super 1994) (p. 312): A liability insurer that
insures codefendants whose interests conflict with one another must retain separate and
independent counsel for each insured or allow each insured to do so at the insurer’s expense.
a) Facts: Involved a liability suit over a kid shooting another kid’s eye out with a BB gun. The
liability insurance company assigned all three Ds the same law firm to defend their claims,
even though they had conflicting interests in the outcome of the case.
b) Rule: A liability insurer that insures codefendants whose interests conflict with one another
must retain separate and independent counsel for each insured or allow each insured to do so at
the insurer’s expense.
v. A v. B. (NJ 1999) (p. 316): A L must reveal conf. info from one co-client to another unless the
retainer agreement says he can withdraw without disclosing. There’s no confidentiality b/w joint
clients at default.
a) Facts: Law firm jointly represented husband and wife in drafting wills. Unbeknownst to
wife, the husband had recently fathered an illegitimate child, and the mother of the child
retained the same law firm to institute a paternity suit against the father. Upon learning of the
conflict, the firm withdrew from representing the mother in the paternity suit. Husband wants
to stop the firm from disclosing the illegitimate child to his wife.
b) Holding: The court felt that this situation fell under the preventing an ongoing fraud
exception to the A-C privilege, so L has to tell W (unless the retainer agreement stated that he
can withdraw instead).
c) Rule: An attorney, upon commencing a joint representation of co-clients should agree
explicitly with the clients on the sharing of confidential information.
(1) A disclosure agreement should probably say that any information gotten from either party
will be shared with both (or neither)
(2) Absent such an agreement, the lawyer has the discretion to inform the affected co-client
of the specific communication if, in the lawyer’s reasonable judgment, the immediacy
and magnitude of the risk to the affected co-client outweigh the interest of the
communicating client in continued secrecy.
vi. HYPO: L can rep both a co. AND its CEO at a deposition. But conceptually it’s unclear how
you view the CEO – as part of corp. client, as an accommodation client, or as an individual.
a) Facts: We’re repping a brokerage firm in a 10b-5 action. Now the other side has given notice
it wants to depose the CEO. Can we rep the CEO at the deposition?
b) Outcome: As long as we’re OK under the regular conflicts rules re repping 2 clients, we can
rep CEO individually.
(1) Although if a conflict develops, we may have to drop both. And both need to know that
there’s no confidentiality between joint clients.
c) Issue: This situation happens all the time. Question is what are we doing/who are we repping
when we do that?
(1) Just repping the org.
(i) But this can’t be so b/c the only advice we’re allowed to give to unrepped
individuals is to get a lawyer, and that’s not all we do at depositions.
(ii) So whose interests are we looking out for? When the other side asks if we rep
deponent, we say yes?
(2) Say we rep org and CEO is an accommodation client (a subset client of our main client)
and our main duties to CEO aren’t as strong to that client as to the corp.
(i) Problem is the rules don’t recognize this. There’s no such thing as a second class
(3) We are repping the individual as individual
(i) This is OK except we generally don’t also do the things needed when taking on joint
d) Note: If the corporation’s interests diverge from the individual’s from the start under
1.7(a)(2) have to say from the outset you can’t rep both and tell the CEO to get his own lawyer
vii. HYPO: A L can not rep both a buyer and a seller in a property deal, even if they think
everything is settled in advance.
a) Facts: Two individuals approach M – a buyer and a seller of real estate. They say they’ve
already decided everything – price, description, closing date, etc. – and want us to rep both in
the sale of property.
b) Outcome: This is like a divorce case – though everything seems like it’s in agreement, things
may come out the parties haven’t thought of and over which they disagree. They are like
people on opposite sides of litigation.
(1) Buyers and sellers always may have divergent interests – even if they don’t think so.
viii. HYPO: When trying to put deals together, especially when one of people is existing client,
there’s nothing barring you from the rep, but it’s good to get informed consent re the conflicts.
a) Facts: Three people show up in M’s office – the money guy (our client), the patent owner,
and the CEO. They want M to set up the business/draw up the K.
(1) This is a problem b/c they can’t get separate lawyers b/c it’s too expensive. And we want
to encourage the formation of companies like this one.
(2) There used to be a rule 2.2 saying lawyers can be intermediaries in cases like this, but it
(3) You can get informed consent re conflicts – lay out all the issues before all three and then
have them sign a writing
(i) This won’t necessarily keep you from getting sued, but it may insulate you if you are
c) Note: Once the corp. is formed, the L can rep the org, and then is subject to 1.13, which sets
out how you have to report irregularities.
4. Positional Conflicts
i. HYPO: You can’t take a positional conflict if winning for one client means losing for another.
a) Facts: Client A calls saying it wants to take over a DE corp and wants us to attack the use of
DE’s poison pills. Two days later, M gets a call from a diff client worried about a takeover
who wants M to set up a poison pill for a DE corp. Can we attack the use of the poison pill for
one client while simultaneously setting one up for another.
b) Def: This is called a positional conflict – where you take diff views of the law for diff clients.
c) Issue: Can you establish a position for one client that will substantially interfere with the
position of another client? If you set precedent, you don’t want to have own case cited against
you (bigger concern for constitutionality cases)
(1) Not all issue conflicts are ethical (i.e. rise to the level of positional conflicts) – we argue
opposite sides of issues all the time (often procedural or fact-specific – this D ran the red
light but the other D didn’t, based on similar facts). A positional conflict really arises
when you make opposite LEGAL arguments (PPs are unconstitutional for one client but
totally valid for another).
(2) There’s no way to clear positional conflicts in advance. We can only rely on what we
(3) If we know there’s a current positional conflict, we have to reject the case.
e) Note: Generally Ls know big areas of conflict in advance b/c they always rep one side or
another – big co.s or big labor; plaintiffs or hospitals, etc.
f) Rule: The basic rule seems to be that if winning for one client will adversely affect the other
client, then you can’t do it
G. INTERESTS OF A THIRD PERSON
1. Rule 1.8(f): A lawyer shall not accept compensation for representing a client from one other than the
client unless: (1) the client gives informed consent; (2) there is no interference with the L’s
independence of professional judgment or with the client-lawyer relationship; AND (3) information
relating to the representation of a client is protected as required by Rule 1.6.
2. Rule 5.4(c) -- Professional Independence of a Lawyer: A lawyer shall not permit a person who
recommends, employs, or pays the lawyer to render legal services for another to direct or regulate the
lawyer’s professional judgment in rendering such legal services.
3. In re Rules of Professional Conduct (Mont. 2000) (p. 325): The client of a L being paid by an
insurance co. is the client alone. Therefore, the insurance co. cannot limit the scope of representation
by requiring that the L get prior approval from them before consulting experts or holding depositions.
The L may share info with the Insurance co, but not with third-party auditors (b/c auditors’ interests
may be too opposed to client’s).
i. Facts: K between insurance company and lawyers let lawyers defend cases for its insured, but
they had to abide by guidelines set by the insurance company and get prior approval on things like
expert witnesses and the number of depositions to take. The insurance company also wanted
detailed descriptions of the professional services rendered, even if it compromised client
ii. Rule: Forcing counsel to get prior approval violates the lawyer’s independence and rule 1.8(f).
iii. Holding: The insurance company shares an interest in the outcome of the matter with the
insured, combined with the fact that the insurance policy states that that information will be given
to the insurance company places the insurer within a “magic circle” in which the information can
be disclosed, which is OK. However, the insured is the sole client of the lawyer, so the Ls cannot
abide by agreements limiting the scope of representation – so agreements to get prior approval for
depositions and experts are invalid. Third party auditors, however, are not inside the magic circle
and therefore can’t get the information – their common interest in keeping litigation costs and
premiums down is not sufficient to bring them within the magic circumstances, because there’s
always the possibility of dispute between auditors and counsel. So L can reveal info to insurance
co but not to auditors.
4. HYPO: Generally, the client of a L who is paid by an insurance co. is the insured. So insured is one
who gets to make all rule 1.2 decisions. However, IC may have insured contract out of his right to
make settlement decisions, but it’s unclear what else insured can contract out of. Insurance co.
CAN’T have veto power over L’s tactical decisions (# depos, experts, etc.)
i. Facts: M gets a call from an insurance co. (IC) who wants to send us a client if we’ll give them a
good rate. We agree to a rate. So the client, an accident victim, is sent by the insurance co.
Question is who do we rep – the IC or the individual client?
a) Whoever is the client is the one who gets to decide whether to settle, plead guilty, etc. (Rule
1.2(c)) and the individual and the insurance co. may have different opinions on these things.
Rule 1.2 makes it sound like the individual is the client, not the IC.
b) Maybe the solution is to require a clause in the insurance K between insured and IC saying
who gets to decide settlement and fees → basically having the insured contract out of their
Rule 1.2 rights.
(1) The problem with this is many people don’t read their Ks. (unconscionability)
(2) Even if they do read them, consent is not really informed if CL is signing a K with one
small clause on the issue before the accident happens.
(3) Also, the L is not a party to insurance Ks. So the question is can the IC in advance
contract an as-yet-hired L out of his professional responsibility.
(4) Fox says the one prospective waiver that courts have upheld is the CL waiver of the right
to decide to settle. ICs can have the insured waive their settlement rights. Other than that
it’s not clear what they can waive.
(5) You can’t get informed consent to waive any conflicts issues in the insurance K.
iii. Rule: In most jurisdictions, L represents the CL, not the insurance co. However, several have
said that the L reps both, despite the potential for conflicts.
a) The problem if L reps both is that the L generally reps the IC in many matters, so if a conflict
develops, L would have to withdraw from repping the individual.
iv. Q: What if the IC wants more say in the case – approval of the number of depositions, time spent
on discovery, etc?
v. A: These are tactical decisions left up to the Ls. The insurance co. has NO say. In re Rules of
Prof. Conduct says that giving the insurance co. that right violates 1.8(f) and 5.4(c) b/c it
interrupts the independent judgment of lawyers. The IC shouldn’t be in a position to decide tactics
b/c that interferes with the professional judgment of lawyers.
a) IC can’t undermine the rules of professional responsibility, which these kinds of Ks do,
especially when the client is the insured alone.
vi. Note: However, it doesn’t breach confidentiality to reveal aspects of the case to the insurance co
EXCEPT if info goes to the question of coverage – did the insured act in a way that’s not covered?
– then the L can’t reveal insured’s info to the IC. And if after the case, the parties disagree to
whether the insured is covered, the L can NOT reveal info or rep either party in the dispute.
5. Paradigm Insurance Co. v. The Langerman Law Offices (Ariz. 2001) (p. 330): A lawyer
designated by an insurer to defend its insured owes a duty of care to the insurer with respect to
matters as to which the interests of the insurer and insured are not in conflict, whether or not the
insurer is held to be a co-client of the lawyer.
i. Facts: Lawyer represented a doctor in a malpractice suit, but was being paid by the doctor’s
insurance company. But L didn’t investigate whether the hospital’s insurance actually covered the
doctor, which would determine whether it should even be the one paying. By the time the doc’s
IC found out, it was too late to have hospital’s IC take over. Doc’s IC sued L, saying L was
negligent in not investigating whether hospital’s IC covered the doctor.
ii. Issue: Can an attorney be held liable to an insurer, when the attorney’s negligence damages only
iii. Rule: A lawyer owes a duty of a care to a nonclient when and to the extent that: (a) the lawyer
knows that the a client intends as one of the primary objectives of the representation that the
lawyer’s services benefit the nonclient, (b) such a duty would not specifically impair the lawyer’s
performance of his obligations to the client; AND (c) the absence of a such a duty would make
enforcement of those obligations to the client unlikely.
a) A lawyer designated by an insurer to defend its insured owes a duty of care to the insurer with
respect to matters as to which the interests of the insurer and insured are not in conflict,
whether or not the insurer is held to be a co-client of the lawyer.
6. Two Final Notes:
i. P sues for $300,000; insured only has $100,000 in coverage. If P agrees to just take the $100,000,
L must first present settlement to insured and then to IC. If insured says yes but IC says no and
you take it to trial, IC will be liable for the whole amount of judgment – even if P is awarded more
ii. IC wants to settle but insured doesn’t. In that situation, L’s obligation is to the primary client –
the individual. So have to go forward with the case. However, L has a duty to warn the client that
IC won’t be liable/won’t have to pay more – and may not have to pay for further repping insured
7. Other Issues that arise:
i. Can IC K with a law firm and say we’ll hire you for 500 cases at $5K each? At least one court has
said this is NOT OK b/c fixed fees interfere with independent judgment of the lawyer.
ii. Many ICs have lawyers as full-time employees. This is a problem, especially in states where the
L reps insured alone and not IC, b/c the L’s main client is already the IC, so how can they then rep
the insured? Some states have overturned this. Others have upheld it.
H. FORMER CLIENTS
1. Rule 1.9 – Duties to Former Clients: (a) A L who has formerly represented a CL in a matter shall
not thereafter represent another person in the same or a substantially related matter in which that
person’s interests are materially adverse to the interests of the former client unless the former client
gives informed consent, confirmed in writing.
(b) A lawyer shall not knowingly represent a person in the same or a substantially related matter in
which a firm with which the L formerly was associated had previously represented a client (1) whose
interests are materially adverse to that person; and (2) about whom the lawyer had acquired
information protected by Rule 1.6 and 1.9(c) that is material to the matter; unless the former client
gives informed consent, confirmed in writing.
(c) A lawyer who has formerly represented a client in a matter or whose present or former firm has
formerly represented a client in a matter shall not thereafter: (1) Use information relating to the
representation to the disadvantage of the former client except as these Rules would permit or require
with respect to a client, or when the information has become generally known; or (2) reveal
information relating to the representation except as these Rules would permit or require with respect
to a client.
2. Kanaga v. Gannett Co. (Del. 1993) (p. 336): A L may not take on a new client if the new client’s rep
is re a matter substantially related to a matter taken on for a former client. To determine if matters
are substantially related, look to three questions below. Ls here were conflicted out of malpractice
prosecution of a former client, who they had repped in a previous malpractice action.
i. Facts: Lawyers who previously represented Kanaga in a malpractice now want to represent
Gannett in a suit against Kanaga for defamation. Can they?
ii. Holding: Ls may rep G if the rep is not in the same or a substantially related matter. In
determining whether a “substantial relationship” exists between the two parties, three questions
are to be considered:
(1) What is the nature and scope of the prior representation at issue?
(2) What is the nature of the present lawsuit against the former client?
(3) In the course of the prior representation, might the client have disclosed to his attorney
confidences which could be relevant to the present action? In particular, could any such
confidences be detrimental to the former client in the current litigation? The burden is
on the party moving for disqualification to show the requisite substantial relationship
Here the court held that Kanaga had met the burden, and they disqualified the lawyers.
3. HYPO: To take on a client adverse to a former client, the L must ensure that (1) the subject of the
rep is not the same or a substantially related matter to the original rep AND (2) the L won’t have
to/be able to use confidential info learned in the course of the prior representation.
i. Facts: M did the tax returns for wife’s business three years ago. Now Fox has been approached
by H to rep him in a divorce from W. Can F rep H?
a) M’s conflict is imputed to whole firm (1.10), so F is bound by former client rules. So question
is, are the representations re “the same or a substantially related matter.” If no, F can’t take on
H as client without the informed consent of W.
(1) We make Ls do this because we don’t want lawyers to have to use confidential info
against a former client; and we want judges to defer to L’s judgment in these situations
without requiring the lawyer or former client to reveal confidential info in court before
allowing the L to withdraw.
b) Even if matters are not substantially related, F still may not take on the representation if doing
so will cause F to use confidential info learned in the course of the prior representation.
iii. Note: Ls can agree to set up screens between lawyers in order to get former client to agree to
4. HYPO: A matter is substantially related to a former representation if the L gained confidential
information in the course of the former rep that applies to the current rep.
i. Facts: M repped a client who wants to build a shopping center. We got them zoning approval.
Now Wal-Mart wants us to rep them in leasing space from the shopping center.
ii. Issue: Are the two representations substantially related?
a) Have to look at the substance of the relationship. If it’s likely that doing zoning work we
picked up confidential information that would be useful in a leasing situation, then the two are
b) But if the representations are far enough apart in time and subject matter, then we probably
don’t have a conflict b/c we don’t have a conflict b/c we don’t have confidential info related to
5. Fouled-Up Nest Doctrine: No matter how unrelated two matters are, an L can NOT take on a
representation if it will undermine the former work/purposes a former client hired L to advance.
i. So, for example, an L can’t take on the representation of an environmental group who wants to
challenge the shopping center development we helped get zoning for. While the two matters may
not be substantially related, still can’t take on the rep.
I. PROSPECTIVE CLIENTS
1. Rule 1.18 – Duties to prospective clients: (c) A L subject to paragraph (b) [bound by rule 1.9] shall
not represent a client with interests materially adverse to those of a prospective client in the same or a
substantially related matter if the L received information from the prospective CL that could be
significantly harmful to that person in the matter, except as provided in paragraph (d). [This rule is
imputed to the firm.]
(d) When the L has received disqualifying info as defined in paragraph (c), representation is
permissible if: (1) both the affected CL and the prospective CL have given informed consent,
confirmed in writing, OR; (2) the L who received the info took reasonable measures to avoid exposure
to more disqualifying info than was reasonably necessary to determine whether to represent the
prospective client AND (i) the disqualified L is timely screened from any participation in the matter
and is apportioned no part of the fee therefrom; and (ii) written notice is promptly given to the
2. HYPO: If M is part of a beauty contest and isn’t hired, F probably can’t take on a different party to
the same action as a client, because M didn’t try to minimize the amount of info learned from CL in
i. Facts: M gets a call from an accounting firm who’s holding a beauty contest to find someone to
rep them in a 10b-5 action. M meets with them and thinks they’ll like her. Before they offer her
the job, Fox gets a phone call from the Ds in the 10b5 action asking F to rep them. Can F take on
the rep of the law firm? Does it matter whether the accounting firm hires M?
a) F can take on the rep if he gets consent from both parties – it’s definitely a consentable
b) But if he doesn’t get consent, whether F can take on the rep is governed by Rule 1.18.
(1) 1.18(d) says that generally conflicts are imputed to the law firm but the firm can get out
of the conflict by (1) getting informed consent from both parties OR (2) the L who
received the info (talked to the prospective client) took reasonable measures to avoid
learning more disqualifying info than was reasonably necessary to determine whether to
take on the representation AND the disqualified lawyer (M) is timely screened and
written notice is given to the prospective client.
iii. Outcome: Fox doesn’t think that 1.18(d) covers the beauty contest situation where M gets lots of
confidential info in the initial meeting, M is not hired, and then D in the case wants to hire the firm
b/c M didn’t limit the amount of info M got from the prospective client. But if the accountant just
called up and had a 20 minute conversation with M, the rule would apply and F could take on D.
iv. Note: Fox questions the reliance on screens to protect clients.
v. Note: Only a few states have adopted 1.18 – it’s a new provision, so many more will follow.
J. FORMER JUDGES, ARBITRATORS, MEDIATORS, ETC.
1. Rule 1.12 – Former Judge, Arbitrator, Mediator or other 3rd-Party Neutral: (a) Except as stated
in paragraph (d), a L shall not represent anyone in connection with a matter in which the L
participated personally and substantially as a judge or other adjudicative officer or law clerk to such
a person or as an arbitrator, mediator, or other third-party neutral, unless all parties to the
proceeding give informed consent, confirmed in writing.
(c) If a L is disqualified by paragraph (a), no L in a firm with which that L is associated may
knowingly undertake or continue representation in the matter unless: (1) the disqualified lawyer is
timely screened from any participation in the matter and is apportioned no part of the fee therefrom;
and (2) written notice is promptly given to the parties and any appropriate tribunal to enable them to
ascertain compliance with the provisions of this rule.
2. HYPO: An L in the same firm as a mediator may take on a client for whom L was a mediator so long
as the mediator is timely screened and written notice is given to the other party.
i. Facts: F had mediated a dispute between Big Steel and Electric Co. re 2002 electric charges.
Now M has gotten a call from Big Steel asking if she can rep them in a dispute re 2003 electric
charges. Mediators get lots of confidential info.
a) Rule 1.12(c) was designed to allow firms to hire judges and law clerks. It said doing so would
not disqualify firms from taking on matters handled by clerk or judge, so long as they’re
screened. Now that applies to mediators as well.
b) Under the rule FOX can’t take on the rep, but the conflict is NOT imputed to rest of firm – so
M can take on the rep – IF F is timely screened AND written notice is given to the other party.
iii. Arg to allow screening of mediators: We want to encourage mediation and if don’t allow this
talented people wouldn’t become mediators and parties might not seek out mediation.
iv. Arg not to allow screening: While judges don’t get confidential info, mediators do. By
definition mediators pledge confidentiality and meet individually with both sides. Not sure how
effective screening really is.
1. Hypo: A L is only conflicted out of giving advice over a hotline to CLs she has actual knowledge she
is conflicted out of repping.
i. Facts: Lawyer A volunteers to answer a hotline for the bar. She gives advice to someone having
money trouble with money store. The next day she finds out that her firm reps money store.
ii. Outcome: Rule 6.5 says this is OK. Since we want to encourage people to do hotlines, which by
def is quick one-time advice, L is only liable for giving advice to clients she has actual knowledge
of the conflict. Don’t have to do a conflicts check before giving advice to someone when
participating in a hotline and not collecting fees.
L. DEPARTING LAWYERS and IMPUTED CONFLICTS
1. Rule 1.10 – Imputed Conflicts: (a) While lawyers are associated in a firm, none of them shall
knowingly represent a client when any one of them practicing alone would be prohibited from doing
so by Rules 1.7 or 1.9, unless the prohibition is based on a personal interest of the prohibited lawyer
and does not present a significant risk of materially limiting the representation of the client by the
remaining lawyers in the firm.
(b) When a lawyer has terminated an association with a firm, the firm is not prohibited from thereafter
representing a person with interests materially adverse to those of a client represented by the formerly
associated lawyer and not currently represented by the firm, unless: (1) the matter is the same or
substantially related to that in which the formerly associated lawyer represented the client; AND (2)
any lawyer remaining in the firm has information protected by Rules 1.6 and 1.9(c) that is material to
(c) A disqualification prescribed by this rule may be waived by the affected client under the conditions
stated in Rule 1.7.
2. Kala v. Aluminum Smelting & Refining Company, Inc. (Ohio 1998) (p. 348): When a L leaves
firm 1 to go to firm 2 and firm 2 is the opposing firm in a matter substantially related to something he
worked on at firm 1, a rebuttable presumption arises that firm 2 is conflicted out of continuing the
representation. Court sets up a 3-part test re rebutting the presumption. If the switching lawyer
worked too closely on the matter, even if he is screened upon moving, no amount of effort on the part
of the new firm will rebut the presumption that they’re conflicted out.
i. Facts: Kala was represented by Pearson in a suit against ASR for employment discrimination. In
the middle of the representation, Pearson left his firm and joined Duvin, the firm that represented
ASR. Duvin attempted to erect a screen before Pearson arrived, whereby the two sides of the case
would be completely separate. Kala wanted Duvin disqualified because of the newly arrived
ii. Holding: When a L switches firm to the firm repping the other side in a case, a presumption that
the new firm will be disqualified b/c of the new L’s conflict arises, but may be rebutted by
showing that an effective screen has been raised.
iii. Rule: Ct establishes Rebuttable-Presumption Test for Motions to Disqualify (used when an
attorney leaves one firm and joins a firm representing the opposing party)
a) (1) Is there a substantial relationship between the matter at issue and the matter of the
former firm’s representation?
(1) Here they were on opposite sides of the same case, so yeah, this is clearly satisfied.
b) (2) If there is a substantial relationship between these matters, is the presumption of shared
confidences within the former firm rebutted by evidence that the attorney had no personal
contact with or knowledge of the related matter?
(1) Here Pearson worked on the matter, so the answer is no rebuttal on this point.
c) (3) If the attorney did have personal contact with or knowledge of the related matter, did the
new law firm erect adequate and timely screens to rebut a presumption of shared
confidences with the new firm so as to avoid imputed disqualification?
(1) Here, the court found that since Pearson had worked so closely with Kala, there was
nothing that Duvin could do that would be seen as adequate. This is a classic side
3. HYPO: A L can’t switch sides to a new firm when the litigation is at a critical stage and the CL will
be harmed by the L’s withdrawal.
i. Facts: Sr. partner is working on a big case that’s entering its final 10 days before trial. Then an
associate who’s been working on the matter for 3 years says he’s leaving the firm to go work for
the firm who’s repping the adverse party. He’s going to be screened at the new firm. What can
the partner do? What can associate do?
ii. Analysis: RULE 1.16 says when you can withdraw from a rep. It says you can’t withdraw for no
reason if doing so will be materially adverse to a client (1.16(b)(1)). Therefore the associate can’t
withdraw at this time.
a) Of course, the sr. partner may not want him around so may instead want to get an extension on
b) Generally lawyers finish important cases before actually leaving.
iii. Note: the use of involuntary screening was originally designed specifically for Ls working for
the government who make the move to private practice in order not to discourage public service.
All jurisdictions allow for this kind of screening. Only a few allow the same for Ls moving from
one private practice to another – Kala is one example, and the Court there still wouldn’t allow
side-switching in the middle of a case to work for the firm who was on the other end of the
litigation that L was working on at his former firm.
iv. Note: An ABA opinion says that a L should disclose to his current employer that he’s
interviewing with the other side b/c at that point the interviewing “ripens into mutual interest” and
you have a duty to the CL re this.
v. Note: RULE 1.10 says a lawyer leaving a firm would normally disqualify his new firm from
continuing to rep the party because the moving lawyer’s conflict conflicts the new firm out. A few
states, however, allow the L to switch sides and the new firm doesn’t have to stop repping the CL
if the L is screened.
M. GOVERNMENT LAWYERS
1. Rule 1.11 – Special Conflicts of Interest for Former and Current Gov’t Officers and Employees:
(a) Except as law may otherwise expressly permit, a L who has formerly served as a public officer or
employee of the gov’t: (1) is subject to Rule 1.9(c) – former client confidentiality; AND (2) shall not
otherwise represent a CL in connection with a matter in which the L participated personally and
substantially as a public officer or employee, unless the appropriate government agency gives its
informed consent, confirmed in writing, to the representation.
(b) When a L is disqualified from representation under (a), no L in a firm with which that L is
associated may knowingly undertake or continue representation in such a matter unless: (1) the
disqualified L is timely screened from any participation in the matter and is apportioned no part of the
fee therefrom; AND (2) written notice is promptly given to the appropriate government agency to
enable it to ascertain compliance with the provisions of this rule.
Check out (c) and (d) (which notes that L is subject to rule 1.7 and 1.9 if he was formerly in private
practice and now enters gov’t service). If get a question re a L who was formerly in private practice
and is now a gov’t L, look to 1.9(d).
i. The rule says a gov’t L can go to a law firm that works on matters with the L’s former gov’t
agency, so long as the L is screened from matters on which he was personally and substantially
involved while he was working for the agency.
2. Note: While 1.9 only prohibits regular lawyers from taking on matters that are adverse to those of the
former CL, 1.11 prohibits gov’t Ls from working on matters whether the position is directly adverse
i. Reason: We don’t want Ls to benefit from knowledge gained from the government.
VIII. FEES AND CLIENT PROPERTY
A. Rule 1.5 – Fees: (a) A L shall not make an agreement for, charge, or collect an unreasonable fee or an
unreasonable amount for expenses. The factors to be considered in determining the reasonableness of a
fee include the following: (see list of 8 in rule book).
(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 L will charge a regularly represented client
on the same basis or rate. Any changes in the basis or rate of the fee or expenses shall also be
communicated to the client.
Contingent Fees (c) A fee may be contingent on the outcome of the matter for which the service is
rendered, except in a matter in which a contingent fee is prohibited by paragraph (d) (domestic relations
or criminal cases), or other law. 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 . . . .
(d) A lawyer shall not enter in an arrangement for, charge, or collect: (1) Any fee in a domestic relations
matter, the payment or amount of which is contingent upon the securing of a divorce or upon the amount
of alimony or support, or property settlement in lieu thereof; OR (2) a contingent fee for representing a D
in a criminal case.
Referral Fees: (e) A division of a fee between Ls who are not in the same firm may be made only if: (1)
the division is in proportion to the services performed by each lawyer or each lawyer assumes joint
responsibility for the representation; (2) the client agrees to the arrangement, including the share each L
will receive, and the agreement is confirmed in writing; AND (3) the total fee is reasonable.
B. ABA Formal Opinion 93-379 – Billing For Prof. Fees, Disbursements, and Other Expenses:
1. Rule: The nature and details of the compensation agreement should be fully discussed by client and
lawyer before an agreement is reached. Among the factors that should be discussed:
i. The likelihood of success;
ii. The likely amount of recovery or savings, if the case is successful;
iii. The possibility of an award of exemplary or multiple damages and how that will affect the fee;
iv. The attitude and prior practices of the other side with respect to settlement;
v. The likelihood of , or any anticipated difficulties in, collecting the judgment;
vi. The availability of alternative dispute resolution as a means of achieving an earlier decision in the
vii. The amount of time that is likely to be invested by the lawyer;
viii. The likely amount of the fee if the matter is handled on a non-contingent basis;
ix. The client’s ability and willingness to pay a non-contingent fee;
x. The percentage of any recovery that the lawyer would receive as a contingent fee and whether that
percentage will be fixed or on a sliding scale;
xi. Whether the lawyer’s fees would be recoverable by the client by reason of statute or common law
xii. Whether the jurisdiction in which the claim will be pursued has any rules or guidelines for
contingent fees; and
xiii. How expenses of the litigation are to be handled.
C. HYPO: A L cannot bill two clients for work done for one while traveling for 2 unless the fee agreement
specifies that you can. The CL gets the benefit of efficiencies.
1. Facts 1: M is going to fill out time sheets. On Monday she flew out to San Fran to take a depo on
Tuesday for client A. The flight was 6 hours. While on the plane she worked on a brief for client B.
Her agreement w/A is that A pays for the hours she travels. Can she bill both clients and get 11 hours
of credit? NO
2. Facts 2: M won a SJ motion last year and worked 40 hours on it. Now she’s relitigating the same
issues for CL 2 and only has to work 2 hours. Can she bill CL 2 40 hours? NO
3. Facts 3: M took the same 6 hour trip on Mon, but for 5 of those 6 hours she worked on a pro bono
matter, can she still bill A 6 hours for the trip? NO
4. Analysis: 93-379 was an attempt to bring order to billable hours.
i. If in fact L was prepared to tell clients what you’re doing, all these practices would be reasonable.
ii. But in the absence of clear disclosure, you can’t do any of these three things.
a) So in fee agreement with A, M should get consent to do other work during travel.
iii. Facts 2 is not OK b/c the L could just make up how much they should be billed. Unless the fee
agreement says otherwise, the benefits of efficiencies go to the client.
D. HYPO: A law firm must reveal to CL what it charges for incidentals/must tell how much it marks up
services like photocopying.
1. Facts: Law firm marks up services provided to CL → when it gives L food, charges three times the
cost, charges a lot for photocopies, etc.
2. Rule: Charges to CLs for out-of-pocket expenses can’t be marked up UNLESS firm discloses to CL
what they’re doing.
i. Tell CL they’re charging 15 cents per photocopy. Tell CL charging $20 for 2 danishes.
ii. This rule has stopped ridiculous mark-ups.
E. Contingent Fees
1. HYPO: When determining the reasonability of a contingent fee, look at it from the time it’s
negotiated, not after the case is closed and you see how much the Ls get.
i. Facts: Massachusetts wants to get into suing a tobacco co. MA hires M&F, negotiates a fee for
20% of recovery. Everyone knows MA is suing for $10 billion in damages. Five years later, the
suit is settled and MA recovers $8.3 billion to be paid over 20 years. Does M&F get $2 billion for
its 20,000 hours of work? It works out to $10K an hour.
ii. Rule: 1.5(a) – fees must be reasonable.
a) So the question is, is this contingent fee reasonable? Do you determine reasonableness at the
time the agreement is made or when you look at the size of the award?
b) One element of reasonability in a contingent fee is whether there is a contingency in the case –
is there a chance your client may lose?
c) Fox says reasonability should be determined at the time the agreement is made b/c looking
back after the fact is unfair b/c it would always reduce a L’s fee.
(1) Contingent Fees include risk on both sides – it’s bad to punish lawyers for doing better
iv. Note: In the actual case, the judge said you do look back and can take into account the fact that
the if the Ls didn’t take the money it would go to the Ps.
2. HYPO: Reverse contingent fees are OK.
i. Facts: M has a CL suing for $10 million in an antitrust suit. There’s a chance that the $10 million
will be tripled to $30 million. Can M charge a contingent fee based on how much she saves the
CL? (A reverse contingent fee.)
ii. Rule: Yes, reverse CFs are OK.
iii. Probs w/reverse CFs: How do you set the benchmark? People often sue for larger amounts
than they reasonably expect to recover.
a) So it makes more sense to make these agreements with sophisticated CLs.
3. Prob for all CFs: There’s a disparity between the L and the CL – L may have a greater interest in
not settling. Ls are often criticized for acting in their own interest by pushing CLs into trial where the
CL could settle for less
F. Referral Fees
1. Most jurisdictions do not allow a naked referral fee, which means that if you get a referral fee, you
must maintain some level of responsibility for the case. Though PA allows naked referrals (fees
where you don’t maintain a level of responsibility).
2. You cannot take a referral fee in matter you could not take on originally (like if you referred b/c you
were barred by 1.7/1.9)
3. HYPO: One L may share fees with another L, so long as the fee share is reasonable and in
proportion to the services provided
i. Facts: CL visited M. M couldn’t take the case so referred the matter to L2. But when she did, M
said she wanted 1/3 of L2’s fee. The case settled for $3 million. Can M take 1/3 of L’s 20%?
ii. Outcome: Rule 1.5(e) says lawyers may share fees under specific conditions – (1) the fee is in
proportion to the services performed (which means Ls share responsibility/liability for services
performed) (2) the client agrees AND (3) the total fee is reasonable
a) While we can’t share fees with nonlawyers, we are allowed to share fees with other lawyers.
iii. Note: Not every jurisdiction requires informed consent in writing OR fee agreements to be in
writing. But every jurisdiction requires contingent fee agreements to be in writing, and Fox sees
referral fees as a subset of contingent fees.
G. Statutory Fees
1. These are sec. 1983 fees. In some cases Ls may be awarded them.
2. But the fee award is deemed to go to the client. So if you have a CF agreement, L would get only 1/3
of the statutory fee.
i. Ex: CL wins 10K. Attorney’s fees are 100K. L gets 1/3 of $100,000, not 1/3 of $10,000 plus
IX. TERMINATING THE RELATIONSHIP
A. Rule 1.16 – Declining or Terminating Representation: (a) Except as stated in paragraph (c), a L shall
not represent a CL or, where representation has commenced, shall withdraw from the rep of a CL if: (1)
the representation will result in violation of the rules of professional conduct or other law; (2) the L’s
physical or mental condition materially impairs the L’s ability to rep the CL; OR (3) the L is discharged.
(b) Except as stated in paragraph (c), a L may withdraw from representing a CL if: (1) withdrawal can
be accomplished without material adverse effect on the interests of the CL; (2) the CL persists in a course
of action involving the L’s services that the L reasonably believes is criminal or fraudulent; (3) The CL
has used the L’s services to perpetrate a crime or fraud; (4) the CL insists upon taking action that the L
considers repugnant or with which the L has a fundamental disagreement; (5) the CL fails substantially to
fulfill an obligation to the L regarding the L’s services and has been given reasonable warning that the L
will withdraw unless the obligation is fulfilled; (6) the representation will result in an unreasonable
financial burden on the L or has been rendered unreasonably difficult by the CL; OR (7) other good
cause for withdrawal exists.
(c) A L must comply w/applicable law requiring notice to or permission of a tribunal when terminating a
representation. When ordered to do so by a tribunal, a L shall continue representation notwithstanding
good cause for terminating the representation.
1. 1.16(a) sets out the grounds under which we MUST withdraw or refuse
2. 1.16(b) says when we MAY withdraw
i. (b)(1) says we may withdraw for any reason if it doesn’t aversely affect the CL. Though before
you withdraw you must give notice to the client
3. 1.16(c) – if court orders you to continue to rep the CL, you can’t withdraw
B. HYPO: If a conflict is thrust upon the law firm, it does not have to drop BOTH clients – it can choose
which one to drop and continue representing the other.
1. Facts: M&F reps Magna in a suit against Colossus. M gets a call telling her that another client,
Acme, just bought Colossus. What do we do?
2. Analysis: There’s no good solution.
i. Rule 1.16 says a lawyer MUST withdraw if continuing the representation would result in violation
of law or the rules of professional conduct. So even though we took on all reps free and clear,
now that there’s a conflict, we must withdraw. Q is can we keep one or do we have to drop both?
ii. Comment 5 to rule 1.7 says that while it’s true we must withdraw, there is an exception for
“thrust-upon conflicts” – those which are created by actions of the CL without involvement of the
lawyers. In that case, we can choose which CL to drop, and can keep the other one.
C. HYPO: If a L wants to be able to withdraw when a CL fails to pay, the L should set out that it’s the CL’s
obligation to pay in a timely manner and if they don’t the L has a right to withdraw.
1. Facts: M has a client she charges on an hourly basis that is behind in their bills by $100,000. They
haven’t paid in four months. Can M&F cut its losses and withdraw from the representation? It’s a
i. Rule 1.16(b)(5) says that a L may withdraw after giving CL reasonable notice, for failure to
substantially fulfill an obligation to the lawyer. The comments say that the retainer letter may set
out that it’s an obligation of the CL to pay their bill in a timely manner and we consider a failure
to pay a failure to fulfill their obligations, and we’re going to withdraw if they don’t pay.
ii. While the rules don’t set out absolutely that a lawyer can withdraw for failure to pay, a L can
create that situation w/his retainer letter.
iii. And of course a L can withdraw for no reason so long as he gives reasonable notice and it doesn’t
harm the CL to do so.
D. Ex of a rep that may be legal but you find too repugnant to remain counsel (1.16(b)(4)): CL has
baby food in warehouse that has expired, but CL wants you to sell it in Mexico where it’s legal to do so.
Helping with that may be viewed as repugnant.
X. LIMITS OF THE LAW
A. Rule 4.2 – Communication with Person Represented by Counsel: In representing a CL, a L shall not
communicate about the subject of the representation with a person the L knows to be represented by
another L in the matter, unless the L has the consent of the other L or is authorized to do so by the law or
a court order.
B. HYPO: A L cannot talk to a person who’s repped by another lawyer (4.2). If person doesn’t have a L,
all a L who is repping his opponent can ethically do is tell the person to go get a L (4.3).
1. Facts: M’s been repping a buyer. She gets a phone call from the seller directly who says my lawyer
is driving me crazy, let’s just negotiate directly you and me. Is this OK? What if seller fires her
lawyer? No and maybe, depending on what you say.
i. Rule 4.2 says that a L can’t communicate w/ a person the L knows to be repped by counsel, unless
the person’s lawyer gives consent or the L is authorized to do so by law or court order.
ii. The only way you can talk to other L’s client is to get the other L’s permission.
iii. If CL says he fired his L
a) Have to contact other L to make sure L was actually fired
b) But once you know L is actually fired, then you go to Rule 4.3, which says that when you’re
dealing with unrepresented people you can’t represent that you’re disinterested AND you can’t
give any help or advice EXCEPT that the person should go and get counsel themselves.
(1) Can still engage in the same kind of puffing as in regular negotiations. Can say “I’ve
got a good deal for you” – that’s negotiating, not giving advice.
C. HYPO: An L can’t contact the CL on the other side, even if he suspects his settlement offers are not
being passed on. Similarly, L can’t direct his CL to talk to other CL – that’s basically the same thing.
1. Facts: CL1 comes to F and says I don’t think the L on the other side is passing our settlement offers
to his CL2. So CL1 asks F to write a letter to CL2 restating the settlement offers.
i. F can send a letter to the other L, but NOT TO CL2. Can’t even send a copy to the L with a copy
to the client b/c that’s the same as contacting the CL directly.
ii. L also can’t have CL1 send a letter to CL2 himself.
a) Rule 4.2 prohibits doing through others what we can’t do ourselves.
(1) Can’t get client, paralegal, or secretary to do what we can’t do ourselves.
b) HOWEVER, if CL1 and CL2 have contact on their own without the lawyers’ involved, this is
OK. Ls just can’t facilitate the contact.
D. HYPO: When an L reps a corp., the other side is prohibited from contacting the control group or
anyone whose conduct is imputed to the corp. They may also (though not covered under 4.2) be
prohibited from being contacting anyone whose admissions might bind the corp.
1. Facts: M&F rep CL in SEC investigation. F calls up SEC lawyer and tells him that he reps CL. The
next Monday, CL’s CEO calls Fox and says that the U.S. Attorney’s office interviewed 10 employees
of CL on Saturday: The CFO, VP for investments, 5 brokers, and 3 secretaries. Could they do this?
Which count as clients?
i. F is only the lawyer for the corp. So who in the corp. is SEC permitted to contact?
a) Anyone whose conduct is going to be imputed to the corp. cannot be contacted; however,
mere witnesses can be contacted
(1) So if brokers’ conduct will be imputed to the corp., they cannot be contacted.
b) The group of people dealing with the lawyer for purposes of this rep – people giving
lawyer direction cannot be contacted
(1) This probably includes the CFO (the control group)
c) Anyone whose admissions might bind the corp.
(1) The model rule doesn’t include this category – 4.2 only includes the control group and the
3. Note: Never send out a letter saying don’t talk to the Feds b/c this is viewed as an obstruction of
justice. You CAN tell people they don’t HAVE to talk to gov’t and that, if the gov’t calls, they can be
repped by counsel (supplied by co.). You can inform people of their rights, but can’t tell people
not to talk at all.
4. Note: One problem with this rule is that the other side doesn’t know who is covered by the rule.
5. Secondary issue – do these rules apply to the SEC (or any gov’t entity?)
i. Thornburg was an attorney general who said the gov’t can talk to repped people before an
indictment or before the complaint is filed.
ii. Then Reno strengthened that by trying to set up regulations governing gov’t employees talking to
iii. Then the DOJ prosecuted Senator McDade and pissed him off. McDade proposed a bill which
passed which says that employees of the fed gov’t are required to follow the rules of professional
conduct of their state.
iv. But then Congress passed the Patriot Act, which may authorize violations of 4.2
v. Today, the government contacts based on Thornburg principle – they contact people without the
people’s L present prior to indictment or filing of a complaint.
E. HYPO: A L cannot talk to an opposing CL without identifying herself – cannot go in and secretly
investigate/pose as a reporter.
1. Facts: M’s repping a vegetarian group who thinks McDonald’s is using animal fat in its fries. M
thinks McD’s is stonewalling us in discovery, so CL wants M to send a paralegal to the factory posing
as a journalist to find out what’s going on.
2. Rule: Under Rule 4.1 Ls can’t be testers b/c they can’t misrepresent what they’re doing. And if the
lawyer’s can’t do it, then their agents can’t either.
3. Note: The L can NOT talk to the employees directly/interview them as a L, either, b/c the
employees’ actions may be imputed to the co.
1. HYPO: Ls have a duty to perform discovery in good faith. Therefore they can not use an otherwise
valid motion to prevent the other side from finding docs the L knows are relevant.
i. Facts: A litigation associate has been working on discovery in an antitrust case. She has
discovered two docs that are very beneficial to the other side (Ps). She brings them to M’s
attention, and M says great, since these came from Germany we’ll file an objection to limit
discovery to U.S. docs only b/c producing foreign docs is too burdensome.
ii. Outcome: A L has a duty to perform discovery in good faith. This is NOT in good faith and
cannot be done.
a) In real case, P let the objection stand and don’t file a motion to compel. The case settles.
Then the smoking gun documents appear. P moves to reopen the case.
b) In normal circumstances, you can object. But you can’t misrepresent your reasons for the
objections/lie to the court.
iii. Note: If an associate thinks action her supervising lawyer is ordering her to do violates rules,
under 5.1 an associate can accept the supervisor’s decision if the question is arguable.
2. In re Tutu Wells Contamination Litigation (3rd Cir. 1997) (p. 436): When a party obstructs
discovery contrary to F.R.C.P. 11, it faces not only attorney’s fees incurred by the party in obtaining
the material through other means, but also the attorney’s fees incurred in the sanctioning process.
The Ct must, however, give adequate notice to Ls it’s considering suspending and cannot direct a
party to pay $ to third parties.
i. Facts: Ps were suing Esso for environmental contamination. During discovery, Esso met many
discovery requests with legal tactics intended to delay, harass, or oppress their opponents; Often
Esso would refuse to turn over documents until forced to do so by a court order; and Esso did not
turn over an important memorandum until 4 years after the litigation had commenced. The trial
court sanctioned the lawyers by suspending them, forced Esso to pay money to community
service, and forced huge monetary payments.
a) The party against whom sanctions are being considered is entitled to legal notice of the legal
rule on which the sanctions would be based, the reasons for the sanctions, and the form of the
(1) Here, the court found that the lawyers were not given adequate due process regarding
notice and opportunity to be heard, so they vacated their suspensions.
b) Regarding the community service, the court found that an order directing a party to the
litigation to remit funds to a third party is outside the scope of a court’s inherent powers.
c) Regarding monetary sanctions of attorney’s fees, the court found that the district court was
well within its discretion in making such an award.
iii. Rule: When a party obstructs discovery contrary to F.R.C.P. 11, it faces not only attorney’s fees
incurred by the party in obtaining the material through other means, but also the attorney’s fees
incurred in the sanctioning process.
G. LAWYER AS WITNESS
1. Rule 3.7 – Lawyer as Witness: (a) A L shall not act as advocate at a trial in which the L is likely to
be a necessary W unless: (1) the testimony relates to an uncontested issue; (2) the testimony relates
to the nature and value of legal services rendered in the case; OR (3) disqualification of the lawyer
would work substantial hardship on the CL.
(b) A L may act as advocate in a trial in which another L in the L’s firm is likely to be called as a W
unless precluded from doing so by Rule 1.7 or Rule 1.9.
2. HYPO: If a settlement falls apart and one side sues the other over whether a settlement was reached,
the L who repped the CL in the principal case may continue to rep the CL at depositions, even though
the L may have to be deposed/may be a W herself. The L may not rep the CL at a later trial, however.
i. Facts: F gets a call from L saying he was engaged in settlement negotiations and thought the case
had settled but the other side didn’t think so. The matter is being litigated and L is being deposed.
The other side says he is disqualified from participating as a L in the case (continuing to rep his
side) b/c he is testifying. Is this right?
ii. Three Q’s raised by hypo:
a) Should L be disqualified from testifying? NO. testimony relates to nature and value of legal
b) Should he be disqualified from repping CL? YES.
c) Should the rest of the firm be disqualified from repping the CL/should his conflict be
imputed? Maybe, if barred by 1.7 or 1.9.
a) Rule 3.7 says a lawyer-witness may not participate at the trial of the case. Therefore L is not
barred from being deposed himself but also representing the client at a deposition on the same
(1) Though you could argue that this is the wrong line to draw and L should be barred from
depositions as well.
b) Under 3.7, even if L can’t rep CL, his conflict is not imputed to the firm UNLESS that
representation would be prohibited by rule 1.7 or 1.9.
(1) This means you have an absolute obligation to sit down with the client and discuss at
length the implications of the firm participating in the trial.
(i) May be awkward for one partner to q another.
(ii) Run the risk that L may not be as good a W as CL likes
c) Note: Rule 3.7 doesn’t apply where L is testifying to matters not in dispute OR where it
would be a true hardship to CL for L to withdraw.
iv. Note: Any time in which L may be a W, there’s an issue/possibility that L’s conduct is at issue
and CL may have a claim against L.
a) In this case the law firm can’t rep the CL b/c the law firm will have its own issues/CoIs
3. Stewart v. Bank of America (Georgia 2001) (p. 455): Ls who were key witnesses in CL’s second
litigation could not rep the CLs in that litigation b/c under 3.7 you can’t rep a CL and be a witness at
the same trial. Note the hypo above – this rule doesn’t apply to depositions.
i. Facts: Lawyers who represented a client in a foreclosure sale then wanted to represent the client
in litigation about that sale, even though they would be key witnesses in the litigation.
ii. Holding: The judge ruled that under Rule 3.7 the lawyers had to be disqualified, as without their
testimony their client loses his key witnesses.
A. HYPO: Under rule 5.6, an employer cannot restrict the right of a L to practice law – can’t put
restrictions like saying if L leaves the firm can’t go to a competitor in the region for a year.
1. Facts: M&F want to take on new office space, but they’re worried about new hires wanting to leave.
So they want to institute a policy whereby if a L leaves M&F to practice in a nearby firm, they have to
forfeit one year’s salary.
2. Outcome: The rules are clear that you can’t restrict the right to practice law (Rule 5.6). The courts
have weighed in a bit, however, and in Cali and PA have been v. accepting of restrictions but no other
i. Reason for rule: CLs should be able to hire whoever they want – and limiting a L’s ability to
move limits the CL’s ability to hire him.
3. Note: Courts HAVE accepted deals saying a departing L has to pay the old law firm a percentage of
fees from clients he took from the old firm, so long as the percentage is reasonable.
B. HYPO: D cannot offer P’s lawyer extra money as part of a settlement offer on the condition that P’s L
agrees to never bring a case against D again.
1. Facts: CL has been sued multiple times in product liability suits, all of which have been brought by
the same lawyer Fitts. So CL suggests offering the latest CL an extra $100,000 if Fitts agrees never
tosue the CL again. Is this OK?
2. Outcome: NO. Rule 5.6(b) says a L shall not participate in offering or making an agreement in
which a restriction on a L’s right to practice is part of the settlement of a CL controversy.
i. Reason: (1) If don’t have the rule, an opponent can put a L in a situation where his interests are
diff than his CL’s. Don’t want to make a L decide between restricting himself and getting the CL
more money. (2) Public policy is that we want to provide the public with the very best lawyers –
so we want them to be able to specialize if we want to.
3. Note: The only way a CL can restrict Fitts is, after the case, to HIRE him – and then he’s conflicted
out of future cases.
4. Note: Another situation that creates the same CoI probs is where L handles a civil rights case and can
get statutory fees and the gov’t comes to L and says we’ll give your client X if you agree not to file for
i. Fox says it is unethical for the gov’t to make this offer b/c the CL obviously wants the money but
to get it the L is forfeiting an important right.
ii. But the S. Ct has ruled that this deal is perfectly OK. So now civil rights lawyers need to enter
into contingent fee agreements.
C. HYPO: Courts have to a stronger or lesser degree depending on the state an inherent power to regulate
the profession – including fees. Therefore the legislature probably can NOT pass a law limiting the
percent an L can accept as a contingent fee.
1. Facts: State legis just passed a statute saying that in medical malpractice cases, the max contingent
fee is 3%. Plaintiffs’ Ls want to challenge the statute.
i. Can challenge the statute by saying it is the courts who establish the rules of professional conduct,
and here the legis is usurping the judiciary’s prerogative. The Constitution gives courts the right
to regulate themselves.
ii. The question is, is there some area that the state legis is prohibited from acting? The answer is
that courts have to a stronger or lesser degree depending on the state an inherent power to regulate
the profession – including fees. The legis can’t usurp that power.
iii. This hypo is right at the edge of what legis can do b/c there may be a public policy reason to
enact the law. But in PA, for example, the courts say they regulate the conduct of Ls exclusively.
D. Generating Business – Advertising and Solicitation
1. RULE 7.1 – Communications Concerning a L’s Services: A L shall not make a false or
misleading communication about the L or the L’s services. A communication is false or misleading if
it contains a material misrepresentation of fact or law, or omits a fact necessary to make the
statement considered as a whole not materially misleading.
2. Rule 7.2 – Advertising: (a) Subject to the Requirements of Rules 7.1 and 7.3, a L may advertise
services through written, recorded or electronic communication, including public media. (See b as
well for rules re when you can give $ to CLs).
3. Rule 7.3 – Direct Contact With Prospective CLs: (a) A L shall not by in-person, live telephone or
real-time electronic contact solicit professional employment from a prospective CL when a significant
motive for the L’s doing so is the L’s pecuniary gain, unless the person contacted: (1) is a L OR (2)
has a family, close personal, or prior professional relationship with the L.
(b) A L shall not solicit professional employment from a prospective CL by written, recorded or
electronic communication or by in-person, telephone, or real-time electronic contact even when not
otherwise prohibited by paragraph (a), if: (2) the prospective CL has made known to the L a desire
not to be solicited by the L; OR (2) the solicitation involves coercion, duress or harassment.
4. HYPO: Ls can advertise, but the ad can’t be false or misleading. An ad is misleading if it indicates
that the L can get a CL a specific result – even if ad does so by telling the truth.
i. Facts: M wants to start an ad campaign running newspaper ads saying, “M&F – three $10 million
verdicts this year.” This is the truth. Can we do it?
a) Rule 7.2: says that a L may advertise subject to rule 7.1 and 7.3
(1) Rule 7.1 says A L shall not make false or misleading communication about the L or L’s
service service. A communication is false or misleading if it contains a material
misrepresentation of fact or law, or omits a fact necessary to make the statement
considered as a whole not materially misleading.
(i) Cmt 3 to 7.1 says a truthful ad that creates an unjustified expectation that the same
results could be obtained without reference to factual and legal circumstances of
each client’s case
b) So this ad is not OK, because it misleads the CL into thinking you could win a $10 million
verdict for them when you don’t know the facts of their case.
iii. Note: Many ads out there fairly regularly violate the rules.
a) The hypo does
b) An ad where a former client says “I got a $10 million award!” does as well
(1) The rule says that advertising that creates false expectations and you can’t do that
without talking about specific facts and circumstances is NOT OK.
iv. Note: The rules balance the tension for the profession’s traditional disdain of advertising with
the Supreme Court’s ruling that you can’t ban advertising b/c it violates L’s 1st Am. rights. Ct
said, however, that it is OK to say the ad can’t be misleading.
v. RULE: Whenever you see an ad, the q to ask is: Is it misleading? That is the only limit on the
right to advertise
vi. Note: A firm web site is advertising, yet they all publish results.
5. HYPO: A L cannot go into chat rooms to solicit business. He can send e-mails, however.
i. Facts: M wants to go to chat rooms for those worried about the effects of Vioxx and remind
people that M&F is looking to sue Merck if anyone wants to sue.
a) Rule 7.3 bars this: You can’t solicit clients by in-person, live telephone or real-time electronic
contact when a motive for the contact is the L’s pecuniary gain.
b) So balance struck after S. Ct ruling is that while advertising and direct advertising is OK we
CAN’T go up to a potential client in person – no ambulance chasing.
iii. Q: What about e-mails?
iv. A: They’re in the middle. So you can send e-mails b/c they’re more like print ads, but can’t
participate in real-time communication so you can’t IM or go to chat rooms.
v. Note: If you’re talking to someone about legal issues but not seeking to gain a client or money,
it’s not solicitation.
6. Florida Bar v. Went For It, Inc. (SCOTUS 1995) (p. 466): FL’s 30-day prohibition on sending
direct mail to Vs who may want to bring personal injury or wrongful death suits does not violate Ls’
1st Am rights.
i. Facts: FL passed laws saying that a L cannot send a written communication (direct mail) to a
potential client in a personal injury or wrongful death suit for 30 days after an accident. The rules
also applied to lawyer referral services. In effect they created a 30-day blackout period during
which accident victims could not be contacted by lawyers. P, a lawyer-referral service, claims this
violates his 1st Am. rights.
a) While commercial speech is protected by the first amendment, its less protected, so only gets
intermediate scrutiny. Restrictions on purely commercial speech (that isn’t misleading or re
unlawful activity) are subject to the three-prong Central Hudson test:
(1) First, the gov’t must assert a substantial interest in support of its regulation
(2) Second, the gov’t must demonstrate that the restriction on commercial speech directly
and materially advances that interest
(3) Third, the regulation must be narrowly drawn.
b) The restriction here meets all three prongs
(1) FL’s interest in upholding the reputation of Ls is substantial. In addition, FL has an
interest in protecting the privacy and tranquility of personal injury victims and their loved
ones against intrusive, unsolicited contact by Ls.
(2) Re the second prong, “a governmental body seeking to sustain a restriction on
commercial speech must demonstrate that the harms it recites are real and that its
restriction will in fact alleviate them to a material degree.” FL did this by conducting a 2-
year study that provided both statistical and anecdotal ev that direct mail reflects badly on
(3) The 30-day ban is limited in scope and duration, and so is narrowly drawn.
(i) The Const. requires “a ‘fit’ between the legislature’s ends and the means chosen to
accomplish those ends,’ a fit that is not necessarily perfect, but reasonable; that
represents not necessarily the single best disposition but one whose scope is ‘in
proportion to the interests served,’ that employs not necessarily the least restrictive
means but . . . a means narrowly tailored to achieve the desired objective.”
E. Non-Legal Services Offered by Law Firms
1. RULE 5.7 – Responsibilities Regarding Law-Related Services: (a) A L shall be subject to the
Rules of Professinal Conduct with respect to the provision of law-related services, as defined in
paragraph (b), if the law-related services are provided: (1) by the L in circumstances that are not
distinct from the L’s provision of legal services to CLs; OR (2) in other circumstances by an entity
controlled by the L individually or with others if the L fails to take reasonable measures to assure that
a person obtaining the law-related services knows that the services are not legal services and that the
protections of the client-lawyer relationship do not exist.
(b) The term “law-related services” denotes services that might reasonably be performed in
conjunction with and in substance are related to the provision of legal services, and that are not
prohibited as unauthorized practice of law when provided by a nonlawyer.
2. RULE 5.4(b) – Professional Independence of a L: A L shall not form a partnership with a
nonlawyer if any of the activities of the partnership consist of the practice of L.
3. HYPO: A law firm can establish ancillary businesses either within the firm or as a subsidiary so
long as it never shares fees with nonlawyers – but it can hire non-L employees (rule 5.7).
i. Facts: M says why don’t we join together with a stock broker/merge the firm with a stockbroking
firm and offer our CLs legal AND investment advice.
a) Rule 5.4(b) says a L can’t form a partnership with a non-lawyer if any of the activities of the
firm consist of the practice of law.
(1) This is important b/c other professions don’t have the same focus on client confidentiality
and conflicts of interest.
b) One way to get around this is to set up a multi-disciplinary firm where the providers of
ancillary services are lawyers as well OR
c) Rule 5.7 allows law firms to set up ancillary businesses either as a subsidiary of the firm or
within the firm itself so long as no profits are shared with nonlawyers.
(1) So nonlawyer service providers can’t be partners; but they can be salaried employees.
(2) The problem with 5.7 is how do you avoid CL confusion – how do you make it clear to
the customers of the ancillary business that they’re not getting the benefit of the
confidentiality or loyalty rules (particularly if they are clients of the law firm as well).
(3) Another problem is if you have an ancillary consulting business and you need to tell your
CL to hire a consultant. There’s an incentive to send the CL to your consulting business,
even if that’s not best for him.
iii. Note: An L can make referrals to an investment advisor (affiliated or unaffiliated) as part of a
cross-referral. But there can be no formal arrangement b/c that’s like fee sharing.
a) So long as don’t share fees or pay for referrals
b) So long as tell CL about the sitch and tell them they have the right to go to someone else.