Professional Responsibility Law 115 Wed., Nov. 28 DUTY OF LOYALTY (conflicts of interest) 2 • Personal Interest Conflicts 1.8 – All imputed to other members of firm (except 1.8(j) – sexual relations) • See 1.8(k) • While lawyers are associated in a firm, a prohibition in the foregoing paragraphs (a) through (i) that applies to any one of them shall apply to all of them. 3 • Maintenance • Champerty 4 • 1.8(e) A lawyer shall not provide financial assistance to a client in connection with pending or contemplated litigation, except that: • (1) a lawyer may advance court costs and expenses of litigation, the repayment of which may be contingent on the outcome of the matter; and • (2) a lawyer representing an indigent client may pay court costs and expenses of litigation on behalf of the client. 5 • 1.8(i) A lawyer shall not acquire a proprietary interest in the cause of action or subject matter of litigation the lawyer is conducting for a client, except that the lawyer may: • (1) acquire a lien authorized by law to secure the lawyer's fee or expenses; and • (2) contract with a client for a reasonable contingent fee in a civil case. 6 • Personal interests affecting representation – Need not be mentioned in 1.8 7 • The disqualification arising from a close family relationship is personal and ordinarily is not imputed to members of firms with whom the lawyers are associated. See Rule 1.10. 8 • Having sex with clients 9 • 1.8(j) • A lawyer shall not have sexual relations with a client unless a consensual sexual relationship existed between them when the client-lawyer relationship commenced. 10 • Problem of jointly representing criminal defendants 11 • Problems in representing joint clients in transactional work 12 State v. Callahan (Kan. 1982) MR 1.2(c) (c) A lawyer may limit the scope of the representation if the limitation is reasonable under the circumstances and the client gives informed consent. • But joint representation can be in clients’ interest • Despite disadvantages – Especially if there is a falling out – No attorney client privilege with respect to one another – problems of duty of confidentiality – And generally cannot represent one in a substantially related issue unless the other consents 15 • Successive Representation 16 • 1.9(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. 17 • Rule 1.9 Duties To Former Clients • (a) A lawyer who has formerly represented a client 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. 18 • Comment 3 to 1.9 • substantially related = same transaction or legal dispute or if there otherwise is a substantial risk that confidential factual information as would normally have been obtained in the prior representation would materially advance the client's position in the subsequent matter 19 what happens when you jointly represented A and B in the past and now want to represent B only in a substantially related matter in which B’s interests are materially adverse to A’s? Brennan’s Inc v Brennan’s Restaurants Inc (5th Cir. 1979) what if lawyer represents organization and constituent and then there is a falling out may lawyer continue representing organization in a substantially related manner when organization’s interests are materially adverse to constituents? accommodation client • You were corporate counsel for the A Corp. from 1996-98. Since then a new board of directors has gained control. B approaches you and asks you to represent him in a suit against members of the board concerning actions they undertook after you left. Any conflicts problems? 24 • You have defended the A Corp. in employment discrimination suits brought against it from 1978-98. This year B approaches you and asks you to bring an employment discrimination suit against the A Corp. concerning actions by the corporation that occurred after you terminated your relationship with it. Any conflicts problems? 25 • You unsuccessfully defend A in criminal charges. Afterward the prosecutor in the case approaches you and asks you to bringing a high profile product liability action on his behalf against the D Corp. Any conflicts problems? 26 Prosecutor approaches you and asks you to bringing a high profile product liability action on his behalf against the D Corp. The suit was successfully concluded. Then A asks you to defend him in criminal changes brought by Prosecutor. Any conflicts problems? - A and B are bitter rivals - Lawyer represented A in a breach of contract suit against C - B asks Lawyer to represent it in a tort suit against it filed by D - any conflicts problems? - A and B are bitter rivals - Lawyer defended A in a antitrust suit brought by C - B asks Lawyer to represent it in a antitrust suit against A - any conflicts problems? Lawyer represented Maritrans in reducing labor costs without violating labor laws It dropped Maritrans and undertook to represent Maritrans’s rival in order to help it reduce labor costs without violating labor laws conflicts problems? • Prospective clients 31 • Rule 1.18 Duties To Prospective Client • (c) A lawyer subject to paragraph (b) 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 lawyer received information from the prospective client that could be significantly harmful to that person in the matter, except as provided in paragraph (d). 32 • L represents A is the simple drafting of a will • L is approached by B to discuss L representing B in drafting B’s will (no actual representation) • assume A and B give same amount of info to L • assume that A’s and B’s wives want to sue A and B for child support and have L as their lawyer • does B have a greater burden in disqualifying L than A? 33 • A – must show only that the matters are substantially similar and interests are materially adverse • B – must also show that lawyer received information from B that could be significantly harmful to B in the matter 34 • A former client is not required to reveal the confidential information learned by the lawyer in order to establish a substantial risk that the lawyer has confidential information to use in the subsequent matter. A conclusion about the possession of such information may be based on the nature of the services the lawyer provided the former client and information that would in ordinary practice be learned by a lawyer providing such services. 35 • Comment  to 1.18 • Even in the absence of an agreement, under paragraph (c), the lawyer is not prohibited from representing a client with interests adverse to those of the prospective client in the same or a substantially related matter unless the lawyer has received from the prospective client information that could be significantly harmful if used in the matter. 36 • Conflict tainting 37 • Comment 2 to 1.18 • A person who communicates information unilaterally to a lawyer, without any reasonable expectation that the lawyer is willing to discuss the possibility of forming a client-lawyer relationship, is not a "prospective client" within the meaning of paragraph (a). 38 imputation concerning prospective client conflicts • If a lawyer is disqualified from representation under this paragraph, no lawyer in a firm with which that lawyer is associated may knowingly undertake or continue representation in such a matter, except as provided in paragraph (d). 40 • 1.18(d) When the lawyer has received disqualifying information as defined in paragraph (c), representation is permissible if: • (1) both the affected client and the prospective client have given informed consent, confirmed in writing, or 41 • (2) the lawyer who received the information took reasonable measures to avoid exposure to more disqualifying information than was reasonably necessary to determine whether to represent the prospective client; and • (i) the disqualified lawyer 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 prospective client. 42 • Imputed conflicts • Transitory lawyers 43 • 1.10(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 • (1) 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 44 • If one lawyer in a firm is prohibited from representing a client (w/o consent) under conflicts rules 1.7 or 1.9 (not personal interest conflicts), all lawyers in the firm are. 45 1.8(k) While lawyers are associated in a firm, a prohibition in the foregoing paragraphs (a) through (i) that applies to any one of them shall apply to all of them. screening does not help, except… (2) the prohibition is based upon Rule 1.9(a) or (b) and arises out of the disqualified lawyer’s association with a prior firm, and (i) the disqualified lawyer is timely screened from any participation in the matter and is apportioned no part of the fee therefrom; (ii) written notice is promptly given to any affected former client to enable the former client to ascertain compliance with the provisions of this Rule, which shall include a description of the screening procedures employed; a statement of the firm's and of the screened lawyer's compliance with these Rules; a statement that review may be available before a tribunal; and an agreement by the firm to respond promptly to any written inquiries or objections by the former client about the screening procedures; and (iii) certifications of compliance with these Rules and with the screening procedures are provided to the former client by the screened lawyer and by a partner of the firm, at reasonable intervals upon the former client's written request and upon termination of the screening procedures. • c) A disqualification prescribed by this rule may be waived by the affected client under the conditions stated in Rule 1.7. 51 • 1.10(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 the matter. 52 • If a tainting lawyer leaves the firm, the remaining lawyers are free of limitations except • They still not may not represent (w/o consent) someone with interests materially adverse to a client of the tainting lawyer • If the matter is the same or substantially similar to the earlier representation and • The remaining lawyers have confidential information material to the matter 53 • 1.9(b) A lawyer shall not knowingly represent a person in the same or a substantially related matter in which a firm with which the lawyer 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 Rules 1.6 and 1.9(c) that is material to the matter; • unless the former client gives informed consent, confirmed in writing. 54 • If a lawyer who was tainted leaves the firm with the tainting lawyer, he is free of limitation except • she still may not represent (w/o consent) someone with interests materially adverse to the tainting lawyer’s client • If she has confidences material to the matter 55 • Assume X, a lawyer at Firm 1, defends A in connection with an antitrust claim against A brought by B. Y, also a lawyer at Firm 1, is approached by C, who wants to sue A for employment discrimination. Is there a conflicts problem? employment discrimination C A A Firm 1 antitrust X Y B 56 • What if “Firm 1" was not a partnership, but was merely a collection of lawyers that shared the same offices? 57 • Assume X, no longer represents A. Now may Y represent C? employment discrimination C A A Firm 1 X Y antitrust B 58 • May Y represent D, who is suing A for antitrust violations? antitrust D A A Firm 1 X Y antitrust B 59 • May Z, who entered Firm 1 after X dropped A as a client, represent D? antitrust D A A Firm 1 Z (brand new lawyer) antitrust X B 60 • Assume that after dropping A as a client, X moves to Firm 2. May X now represent D in his suit against A? Firm 2 X antitrust D A A Firm 1 antitrust X B 61 • May W, another lawyer at Firm 2, represent D in his suit against A? W Firm 2 X antitrust D A A Firm 1 antitrust X B 62 • After X leaves for Firm 2, may Y, who is still a lawyer at Firm 1 and who did a small amount of discovery work for A in B’s suit against A, represent D? Firm 2 X antitrust D Y (small amt. of discovery A work for A) A Firm 1 antitrust X B 63 • May V, who is still a lawyer at Firm 1 and who knew nothing about B’s suit against A, represent D? Firm 2 X antitrust D Y (small amt. of discovery A work for A) A Firm 1 V antitrust X B 64 • Assume Y moves to Firm 3. May he now undertake to represent D? Y Firm 3 antitrust D Y (small amt. of discovery A work for A) A Firm 1 antitrust X B 65 • May U, another lawyer at Firm 3, represent D? Y U Firm 3 antitrust D Y (small amt. of discovery A work for A) A Firm 1 antitrust X B 66 • Assume instead that V moves to Firm 3. May V represent D? V Firm 3 antitrust D Y (small amt. of discovery A work for A) A Firm 1 V antitrust X B 67 Firm 1 and Firm 2 cooperate jointly in the defense of A in an antitrust case. At the same time Firm 1's is representing B in his suit against C, who is represented by Firm 2. Is there a conflicts problem? Duty of Competence • Malpractice • also disciplinary law • 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. • Comment  A lawyer need not necessarily have special training or prior experience to handle legal problems of a type with which the lawyer is unfamiliar. …A lawyer can provide adequate representation in a wholly novel field through necessary study. • Comment  In an emergency a lawyer may give advice or assistance in a matter in which the lawyer does not have the skill ordinarily required where referral to or consultation or association with another lawyer would be impractical. Even in an emergency, however, assistance should be limited to that reasonably necessary in the circumstances, for ill-considered action under emergency conditions can jeopardize the client's interest. • Rule 1.3 Diligence • A lawyer shall act with reasonable diligence and promptness in representing a client. Malpractice • duty of care • breach – failure to exercise are that a reasonably competent attorney would under the circumstances • causation • harm Lucas v. Hamm (Cal. 1961) Smith v. Lewis (Cal. 1975) Problems with causation • Lawyer botches case by failing to call witness in a medical malpractice case • She is sued for malpractice • Even if she was breached her duty of care, how can escape liability Lawyer undertakes to represent P in P’s slip and fall suit against D Lawyer already represents D in a breach of contract suit against X P was not informed of Lawyer’s representation of D. Malpractice action? • Lawyer breaches her duty of care to her client by failing to communicate a settlement offer to the other side. • Later they settle on terms unsatisfactory to client. • How does one determine the damages caused by Lawyer’s breach? Malpractice in criminal defense • Public defenders usually immune • But even if lawyer was not public defender, plaintiff can successfully sue only if post- conviction relief was granted • Sometime actual innocence must be shown liability to third parties Greycas v. Proud (7th Cir. 1987) • Attorney asked to draft opinion letter concerning whether liens on some property owned by the client • Attorney knows that the letter is to be given to X, who intends to loan money to client, provided that debt can be secured by property • Attorney negligently drafts the letter, stating that the property has no liens on it, when in fact it does • X decides for other reasons that it cannot make the loan, but tells another company, Y, that it should make the loan to X because it may be secured by the property • Y makes the loan to the client. The client defaults and Y sues the attorney for negligent misrepresentation. What result? Limiting malpractice liability 1.8(h) A lawyer shall not: • (1) make an agreement prospectively limiting the lawyer's liability to a client for malpractice unless the client is independently represented in making the agreement; or • (2) settle a claim or potential claim for such liability with an unrepresented client or former client 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.
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