Sept by accinent

VIEWS: 21 PAGES: 16

									Alberts                              Legal Profession                             Fall 2002


Introduction

Can a good lawyer be a good person?            Can a good person be a good lawyer?

Themes: loyalty, honor, perfidy, greed, etc.

Four problems
       1. prohibited assistance
       2. competence
       3. confidentiality
       4. conflict of interest: e.g., duty of “zealous advocacy” while being an officer sworn to
                                         uphold the integrity of the court

“Self-Regulating” Profession?
       -1909 Canons          -1969 ABA Model Code           -1983 Model R. of Prof. Conduct
       -2002 ABA Revised Ethical Rules
       -Sarbanes-Oxley legislation creates duty to report corporate misconduct

Core Principles of Our Profession
       loyalty, confidentiality, lawyerly objectivity

Ethical rules vs. Substantive law (criminal, procedural, tort)
             substantive law trumps
             agency, fiduciary duty, malpractice, securities/mail fraud, aiding & abetting, etc.
             agency relationship: client is principal, lawyer is agent
             but attorney is agent of a special order (unique autonomy)
                        lawyer may use “professional judgment” & discretion
                        lawyer may be liable to 3rd-party

Constitutional Aspects
            5th Am. (e.g., prosecutor must disclose exculpatory info)
            6th Am. (right to an attorney)

**must do research into caselaw when deciding how a given rule applies**

new axiom: “If blameless people are injured, somebody must be accountable ….
              Lawyers will wind up in the plaintiff’s crosshairs ….
              Lawyers and their firms have become as vulnerable as the people they sue.”

Do the way lawyers/judges think mask human drama?




                                                                                                    1
Alberts                               Legal Profession                             Fall 2002


The Relationship of Law, the Lawyer and Ethics

Spaulding v. Zimmerman (Minn. 1962) p5
Facts: -D’s lawyer didn’t disclose what he knew about severity of D’s injury (aortic aneurysm)
        -P’s own doctor’s failed to disclose the potentially fatal injury
        -Ds opposed setting aside settlement aside b/c no mistake of fact; no duty to disclose
Decision: -settlement set aside b/c lawyer should have disclosed (morality > ethics)
                 special responsibility of court/lawyers to a minor, court mislead in its approval

NB: -Firestone tires: P lawyers didn’t reveal defect b/c not confident in NHTSA, lives lost
       -it is malpractice not to ask for the other side’s evidence
       -potential conflict when insurer hires lawyer to represent insured

MRPC 1.2(a): lawyer shall abide by client’s decision, consult re: objectives, settlement
     1.3: lawyer shall act with diligence & promptness in representing client
     1.4: lawyer shall keep client reasonably informed, shall explain matter to the extent
             reasonably necessary to permit client to make informed decisions
     1.6: lawyer shall not reveal info relating to representation without client consent,
             unless to prevent reasonably certain death/bodily harm or establish claim/def
                     (ABA revised in 2002 b/c most states hadn’t followed it)
     2.1: lawyer shall exercise independent professional judgment, render candid advice;
             may refer to all considerations: legal, moral, economic, social, political
     3.3: before a tribunal, lawyer shall not make false statement, fail to disclose material fact
             or controlling legal authority
     4.1: lawyer shall not make false statement of material fact or law to 3rd party, or fail to
             disclose material fact when necessary to avoid assisting criminal/fraudulent act,
             unless disclosure prohibited by 1.6

         should duty to disclose turn on age, whether agreement reached, or seriousness of injury?
         what if the injury is financial, not physical? 1.6 trumps 4.1, so no disclosure allows
         what if court is involved? 3.3 trumps 1.6, so must disclose

 Spaulding shows how substantive/procedural law often trumps ethical rules

Criminal equivalent to Spaulding: silence allowing innocent to go to jail/electric chair
Negotiations: statement as to price/value is not material fact

Hypo: client wants $100K; opponent opens with “will your client take $100K?”
        can say no, or (to be safe) consult with client & leave decision to him
Hypo2: asks about limits on insurance policy, lawyer says $1m when really $2
Hypo3: A: “Thank God the doctors didn’t find anything” B: “Thank God”




                                                                                                     2
Alberts                                Legal Profession                              Fall 2002


MRPC 1.16: lawyer can withdraw if representation will result in violation of the rules of
                     professional conduct or other law
     1.2 (d): lawyer shall not counsel client to engage in criminal/fraudulent conduct,
                     but may counsel as to legal consequences of proposed conduct
     3.4 (a): lawyer shall not obstruct other party’s access to evidence or destroy/alter/conceal
                     a document or other material having potential evidentiary value

Commonwealth v. Stenhach (Super. Ct. Penn. 1986) p41
Facts: -young public defenders hid rifle stock from prosecution
Decision: -Ds should have disclosed (physical vs. testimonial evidence), but not criminally liable

People v. Belge [The Dead Bodies Case] (N.Y. 1975) p57
Facts: -Garrow’s lawyers knew of location of victims’ bodies & took pictures, didn’t disclose
Decision: -affirm dismissal based on attorney-client privilege; no concealment of evidence
                + info created by the lawyers (photos) is litigation work product, hence protected

Hypo: -D gives own photos of crime scene to lawyer          must disclose b/c admissible evidence

NB: attorney-client privilege protects confidential lawyer-client communication w/o 3rd party
        doesn’t protect suborning of perjury, obstruction of justice (18 USC §1503)


Conformity to the Law

Criminal Law

United States v. Benjamin (2d Cir. 1964) p62
Facts: -lawyers assisted promoter to sell fraudulent securities (drafting docs & opinions)
Decision (Friendly): -affirmed convictions [also violated 1.2(d)]
          “In our complex society, the accountant’s certificate and the lawyer’s opinion can be
          instruments for inflicting pecuniary loss more potent than the chisel or the crowbar.
          …Congress equally could not have intended that men holding themselves out as members
          of these ancient professions should be able to escape criminal liability on a plea of
          ignorance when they have shut their eyes to what was plainly to be seen or have
          represented a knowledge they knew they did not possess.”

NB: stamping something “attorney-client privilege” doesn’t make it so
NB2: if lawyer had reason to suspect fraud in one aspect of transaction but continues to represent
       him in another part of the transaction, could be liable for entire fraud

Hypo: -document memorializing price-fixing plan; when lawyer finds out, advises firing
        document not privileged, but lawyer’s thoughts about it are
        can destroy it unless legal investigation/subpoena pending
        document retention policy does not trump the law
Hypo2: -what if lawyer an innocent dupe?  due diligence, lawyer not being professional
Hypo3: -research extradition on eve of client’s flight  potential obstruction of justice
        delicately ask partner for more info or turn to mentor/other lawyer


                                                                                                     3
Alberts                                 Legal Profession                           Fall 2002


Tort Law

         Lawyer’s liability to non-clients (3rd parties)  privity

Greycas v. Proud (7th Cir. 1987) p79
Facts: -Crawford wanted loan, already had liens on all equipment, tells D no liens
        -D (C’s brother-in-law) sends legal opinion saying did search, “free of encumbrances”
        -C defaults, P left holding the bag, sues D for malpractice & negligence (not fraud)
Decision (Posner): -can allege malpractice/negligent misrepresentation w/o privity
                        -D careless, P had no further duty of care  1 UCC search enough

Greyhound Leasing v. Norwest Bank (8th Cir. 1988) p86
Facts: -P sent false documents (no liens) to D to issue letter
Decision: -lawyer wins b/c P more negligent than he is
                 must establish reasonable reliance to prove negligent misrepresentation

Relaxation of privity: when 3rd-party was to be beneficiary of lawyer’s actions (e.g., testator)

War Story: -representation of TX lawyers in failed transaction w/ MX company
           -young partner wouldn’t have been paid unless transaction had gone through
           -sued for fraud, malpractice after last-minute opinion confirming tax treatment
               (lawyer added “this is not a legal opinion” just “no reason to believe in contrary”)
        judge rejected argument that lawyer owed no duty to 3rd party (see MRPC 2.3)
       NB: it was malpractice by the other side to advise their clients to rely on letter
               -transactionally it is customary for other side to rely on own lawyers
        settlement for face-saving token
Moral of the Story: -don’t get into the situation we’re client’s fee contingent on deal closing




                                                                                                   4
Alberts                             Legal Profession                             Fall 2002


Competence

MRPC 1.1: lawyer shall provide competent representation (knowledge, skill, thoroughness, prep)
     1.13: lawyer’s client is organization, not officers/directors/employees
     1.16: a) lawyer shan’t represent/shall withdraw when:
             1) violation of MRPC or other law, 2) physically/mentally unable, 3) fired
           b) lawyer shall withdraw when:
             no harm to client, client wants to do crime/fraud, fundamental disagreement
           c) lawyer shall comply with notice/permission requirements of court
           d) upon termination, lawyer shall take steps to protect client interests
     2.3: lawyer may evaluate matter for 3rd party if compatible with relationship w/ client

Securities & Regulatory Law
SEC v. National Student Marketing Corp. (D.C. D.C. 1978)
Facts: -comfort letter for merger amended at last minute, lawyers didn’t advise client
Dilemma: -if delay the deal, will be sued by shareholders; if not, fraudulent financials
Issue: -can silence/inaction be construed as malpractice/fraud?
Decision: -guilty of failure to act but no facilitation of securities fraud
                 legal opinion not important; duty was to delay merger pending disclosure

NB: -lawyer w/ interest in deal advising client on whether to close the deal!
        should’ve gone up the corporate chain, blow the whistle as per MRPC 1.13
        even if no duty to do anything, has duty not to sign: guilty b/c could’ve walked
Lawyer violates duty to refrain from assisting in illegal conduct if:
   1. The client is engaged in criminal conduct (or that which violates civil obligation), other
       than failure to perform a contract or to sustain a good faith claim for property.
   2. Lawyer has knowledge sufficient to reasonably discern that client’s conduct is violation.
   3. The lawyer facilitates the client’s conduct either by giving encouraging advice or
       indicates how to reduce risk of detection, or by performing act that furthers the conduct.

Malpractice
Elements: duty, breach of duty, causation, harm       often need expert for standard of care

Lucas v. Hamm (Cal. 1961) p157
Facts: -D drafted erroneous will, P received $75,000 less than should have
Decision: -lawyer can have duty to non-client (intended beneficiary of a will)
               -reasonable lawyer not expected to navigate rule against perpetuities

Smith v. Lewis (Cal. 1975) p160
Facts: -D drafted divorce settlement, omitted husband’s pension
Decision: -D liable for malpractice: law was settled, reasonable lawyer would’ve done better
                lawyer expected to do research, present all strategic issues to client
NB: -NEVER SHOOT FROM THE HIP




                                                                                                    5
Alberts                                Legal Profession                               Fall 2002


Koniak p122: When court defers & doesn’t punish illegal conduct, it encourages more violations.

Issue1: is violation of ethical rule a basis for malpractice?
        -not necessarily, but relevant & admissible evidence, sometimes rebuttable presumption
Issue2: can malpractice liability be limited by agreement?
        -only if permitted under law, client is independently represented on limitation
        NB: in In re Tallon, lawyer disciplined for having client sign general release
                 is it malpractice not to inform client of prior malpractice? YES
Issue3: do you have to blow the whistle on yourself? always (sometimes no happy ending)


Confidentiality
1. professional duty of confidentiality        2. agency law          3. federal evidentiary rules
Restatement of Law Governing Lawyers §118:
--attorney-client privilege protects a communication made between privileged persons in
        confidence, for the purpose of obtaining or providing legal assistance for the client
Restatement of Law of Lawyering §123:
--communication b/w agent of organization & org’s lawyer is privileged if disclosed only to:
        a) privileged persons, and b) other agents of org who reasonably need to know the comm.

NB:       -must be client (reasonable perception of “quasi-client”), must be lawyer
          -counsel must make clear distinction b/w legal & business advice
          -privilege waived if disclosure to 3rd-party (e.g., auditor/accountant)
          -no privilege b/w co-clients, only against 3rd-parties
          -privilege only protects communications, not facts or observations
          -court-appointed successor can waive corp. privilege

Exceptions: 1. dispute re: decedent’s disposition of property
            2. client crime/fraud          3. lawyer self-protection
            4. disputes in which trustee/fiduciary charged w/ breach of duty
            5. disputes b/w representatives of organizational client & org’s constituents
 as well as info re: engagement of counsel, fee, lawyer’s name (unless reveals something)

Upjohn v. United States (1981) p209
Issue: -scope of corporate attorney-client privilege given reports re: bribery of foreign officials
Decision: -reject CA’s control group test; protect all info counsel needs upstream/downstream
               - need more than “substantial need” to overcome work product privilege

MRPC 4.2: no communication by lawyer with person represented by someone else on that matter
              but what if employee of corp. (depends if human personification of party)?
     4.3: in dealing with unrepresented person, lawyer shall not say he’s disinterested

Hypo: -Upjohn wants to give Turkish manager to the government
        Upjohn can waive its privilege, but lawyers have to clarify that they’re not T’s lawyers
        potential malpractice to reveal communications b/c fiduciary duties to quasi-client



                                                                                                      6
Alberts                                Legal Profession                             Fall 2002


Professional Duty of Confidentiality
--if lawyer inadvertently produces, must notify client; otherwise violation of fiduciary duty

Meyerhofer v. Empire Fire & Marine Ins. Co. (1974) p274
Facts: -associate Goldberg advised partners about undisclosed commission fees
        -partners decided not to publicize, Goldberg resigned & advised SEC
        -DC disqualified both Goldberg & Ps’ form b/c they have tainted information
Decision: -affirm Goldberg’s disqualification from advising Ps, reverse firm’s b/c no violation
                 G made disclosure out of self-defense (he’d been named in suit)
NB: -client may not have known about the disclosure violation, so conflict for lawyers

Self-defense exception to duty of confidentiality (only to the extent necessary):
    1. protection of lawyers threatened by client/3rd-party
    2. protection of innocent 3rd-parties being victimized by client
    3. prevention/rectification of fraud on the court

MRPC 1.8(b): lawyer shall not use info re: client rep to client’s disadvantage w/o consent
     1.9(c)(1): lawyer who formerly represented client shall not use info against former client

Client Fraud
Recall: 4.1: lawyer shall not make false statement of material fact or law to 3rd party, or fail to
                disclose material fact when necessary to avoid assisting criminal/fraudulent act,
                unless disclosure prohibited by 1.6  exception swallows the rule
        1.6: lawyer shall not reveal info relating to representation without client consent,
                unless to prevent reasonably certain death/bodily harm or establish claim/def

Why maintain strict confidentiality (prohibiting prevention of future crimes, mitigate past ones)?
      --any relaxation of rules will result in chilling of trust central to lawyer-client relationship
      --relaxation will enlarge potential liability if lawyer has discretionary option to disclose
      --“noisy withdrawal” option allows lawyer to escape liability
but most U.S. jurisdictions reject rigidity of 1.6 (allow disclosure when any future crime)
       does absolutist rule increase lawyer’s liability? (lawyers sued anyway)
       noisy withdrawal of no help when lawyer unwitting accomplice (untidy, disingenuous)

Case Study: Mayer Brown’s representation of securitization firm (CFS) that went under for fraud
             -lawyer ultimately left decision of what to disclose to the client
             -CEO quit b/c could no longer in good faith tell investors they’d be repaid

Klein v. Boyd (3d Cir. 1998, vacated) p289
Facts: -fraudulent disclosure documents prepared by lawyers, but w/o lawyers’ names
Decision: -no dice; once lawyer actively involved in process, responsibility to be truthful

Schatz v. Rosenberg (4th Cir. 1991) p298
Decision: -affirm dismissal b/c lawyers only passed on fraudulent reps, didn’t make any selves
Alberts: -would come out differently now b/c lawyer knowingly passed off fraud



                                                                                                      7
Alberts                            Legal Profession                           Fall 2002



Wake of Enron: -movement again to relax duty of confidentiality to allow disclosure of fraud
               -movement to change scienter requirement to “known or should have known”

O.P.M.: -OPM became one of largest compute-leasing companies, but became a Ponzi scheme
              lawyers should have withdrawn, not continued when suspected massive fraud
              implicates 1.2, 1.6, 1.13, 1.16, 4.1, 5.1, 5.2, 8.3, 8.4
              should the banking fraud have alerted lawyers to potential for future fraud?
      NB: -even ethics experts got it wrong

Lessons of OPM: 1. rely on instincts when deciding whether to accept/continue representation
                2. don’t pretend you/firm are invulnerable
                3. fuss about details of transaction
                4. take disclaimers in opinion letters, prospectuses, etc., seriously
                5. look at laws that govern lawyers, not just ethical codes
                6. learn about major client’s business, ask about sudden changes
                7. inquire into client’s termination of long-term advisers
                8. don’t become dependent on single client
                9. don’t assume attorney-client or work-product privileges protect files/comm.




                                                                                               8
Alberts                               Legal Profession                             Fall 2002


Duty to the Court

MRPC 3.3(a): lawyer shall not make/fail to correct false statement, or offer false evidence;
        (b): must take remedial measures if knows client has/plans to perjure/obstruct
              first remonstrate with client, then need to disclose material information
        (c): all this trumps MRPC 1.6 duty of confidentiality
        (d): in ex arte proceeding, must disclose all material facts, whether or not advers
     3.4: lawyer shall not obstruct access to evidence, suborn perjury, mess with witness, etc.

Iowa Ethics Committee v. Crary (Iowa 1976) p339
Facts: -D allowed client (with whom he’d been having an affair) to testify falsely
Decision: -reprobation not enough; must be disbarred

MRPC 1.8: a lawyer shall not have sex with a client unless prior consensual relationship (2002)
              comes from Reynalla (IL divorce lawyer), who took advantage of clients
              if something develops, must advise client to get a new lawyer

Freedman, “Perjury: The Lawyer’s Trilemma”
--conflict b/w duty to learn everything client knows, to hold this in confidence, to reveal to court


Lawyer-Client Relationship

MRPC 1.2(c): lawyer may limit scope of representation if reasonable & w/ consent

Forming the Relationship
Togstad v. Vesely, Otto, Miller & Keefe (1980) p457
Facts: -P consulted D re: potential malpractice claim, D never got back to P b/c thought no claim
        -P later found out she would’ve had a good claim, but SOL lapsed (D hadn’t mentioned)
Decision: -affirm malpractice; reasonable lawyer would review medical records, consult expert
                 client must prove success on merits of underlying claim but for D’s conduct
NB: -duty of care owed even if first consultation, no retainer, no bill
                 put everything in writing

Terminating the Relationship
mandatory: -rep will result in violation of MRPC or law, physical/mental condition, discharge
permissive: -w/o material adverse effect, client persists in criminal conduct, client fails to pay
                must give notice to client, gain permission of court if during litigation
client discharge: -subject to quantum meruit (even for contingent fees, unless for cause)




                                                                                                     9
Alberts                               Legal Profession                               Fall 2002


Conflicts of Interest

Concurrent Conflicts
MRPC 1.7(a): no conc. conflicts (rep of one adverse to another or otherwise materially limited)
       1.7(b): except if able to provide competent rep, no litigation, each gives informed consent
       1.10: ethical disability of one lawyer imputed to entirety of firm
                prohibition against screening in all but 7 jurisdictions
  (per se prohibition approp. when harmed party couldn’t prove violation under permissive rule)

Westinghouse v. Kerr-McGee (7th Cir. 1978) p581
Facts: -K&E-DC lobbied for API (incl. K-M) relating to uranium industry’s antitrust issues
        -K&E-Chicago reps Westinghouse in private antitrust action against uranium corps.
Decision: -oil cos. (associated w/ API) entertained reasonable belief that they were submitting
                confidential info regarding their involvement in uranium industry to a law firm
         Westinghouse has the option and choice of dismissing Gulf, Kerr-McGee and Getty
                from the antitrust case or discharging K&E as its attorney in the case

--what if lobbying had been on unrelated matter (e.g., tax allowances)? –still loyalty concern
--loyalty obligation prevents firm from suing a clients in an unrelated dispute w/o consent
         concern over diminished zeal
         consent must be in writing; put all considerations into letter
--why would client ever consent? –wants particular lawyers/firm

Fiandaca v. Cunningham (1st Cir. 1987) p595
Facts: -public interest firm reps female convicts in suit, also reps mental health patients
        -NH offered settlement causing conflict b/c let convicts stay in mental health facility
        -trial court refused to disqualify firm b/c female convict case too close to trial
                 (hint of unfair tactics on the part of the NH AG’s offer)
Decision: -disqualifying conflict, but one that is material only to the remedy phase (m. h. facility)
         though the lawyers had conflicting loyalties, this was not of consequence to the merits
                 of whether NH was discriminating against the female convicts
         conflict re: remedy not consentable

State v. Callahan (1982) p618
Facts: -D acted on behalf of both sides on real estate deal, hid business deals with L
        -L fails to pay F, F wants to foreclose but turns out not to have secured interest
Decision: -D’s failure to disclose conflict & secure consent = deceit, dishonesty
        -D’s failure to later disclose lack of security interest, protection of L also violates duty

 D probably couldn’t have represented F in the first place b/c he couldn’t seek consent (due to
      his ethical duty to L not to disclose certain confidential facts)

“Lawyer for the Situation” (Brandeis): a tenuous position, may have to withdraw from all clients

Hypo: -lawyer represents F in K-renewal with Ballet co.; B asks lawyer to rep in real estate
       OK if each gives informed consent, no litigation involved (1.7b), but shouldn’t



                                                                                                       10
Alberts                               Legal Profession                              Fall 2002


Other Cases: -insurance triangle, parent hires lawyer for child (must fully disclose, get consent)
                see 5.4(c): lawyer can’t allow employer/payer of lawyer to direct services

Successive Conflicts

MRPC 1.9(a): lawyer who formerly represented client shall not represent another in a
             substantially related matter in which that person’s interests are materially adverse
             (unless previous client consents)

Brennan’s Inc. v. Brennan’s Restaurants Inc. (5th Cir. 1979) p642
Facts: -W represented family, caught in middle when feud erupted
        -both sides wanted to use trademark W helped register
        -brother sued sister, W defends sister, counterclaims that TM (he obtained) unenforceable
Issues: -whether the two matters were “substantially related,” whether material adversity
Decision: -no basis for disqualifying W b/c info not confidential b/w joint clients
        but W disqualified due to residual loyalty considerations (attacking own work)
           -associate S not disqualified b/c had no relationship w/ family, so no residual loyalty

In Re : American Airlines Inc. (5th Cir. 1992) p650
Facts: -NW, Cont. sued AA for attempted monopolization
        -V&E hired by NW, but had represented American in prior antitrust matters
Issue – Substantial Relationship test:
        1) actual attorney-client relationship b/w moving party & attorney he seeks to disqualify,
        2) substantial relationship b/w subject matter of former & present representations
            2 Questions: a) Will the current representation involve the use of confidential info?
                         b) Are the specific subject matters/issues/causes of action in common?
Decision: -V&E disqualified b/c its prior reps of AA were in substantially related matters

NB: -affiliate is not a client for purposes of adverse representation (unless confidentiality issues)

1.7 conflicts vs. 1.9 conflicts
can lawyer turn a current client into a former client by dropping him?  probably not

Rule 1.9 former client analysis:
1. Is there a former client?
2. Is there material adversity?
3. What is the relationship of the two matters? – are they substantially related?
4. Has there been informed consent by the former client after lawyerly consultation?
5. Is personal disqualification imputed to the law firm?

Hypo1: -lawyer represents a gentleman in criminal tax prosecution; man acquitted
       -two years later, can lawyer be hired by the man’s wife to bring a divorce action?
                no b/c confidence issues relating to financial information
(Have to disclose all financial info in divorce cases anyway, but lawyer will know something
about quality of production.)




                                                                                                   11
Alberts                              Legal Profession                             Fall 2002


Hypo2a: -A retained by B to help with legal work in opening a record store
      -A incorporates the store, reviews lease, negotiates deals with suppliers, gets trade name
      -6 months later, may A work with comm. group to reroute traffic away from B’s street?
       not substantially related: nothing similar b/w setting up business, changing bus route
     2b: -may A represent B’s landlord in eviction suit for breach of the lease?
         no, b/c reasonable lawyer similarly situated could receive confidential information
(Also, you would have a lawyer attacking his own lease, so then we might have a lawyer leaving
loopholes in the lease that they could later use to attack the old client.)
     2c: -may A represent funeral parlor next to B’s store in nuisance suit against B
        no, it’s not acceptable for A to turn around and destroy his own previous work
           (in the alternative, potential malpractice claim for not warning about noise ordinance)


Almost clients

Representing a Closely-Held Corporation or Partnership
Fassihi v. Sommers et al. (Mich. App. 1981) p759
Facts: -P ousted by radiologist partner with assistance of corporate counsel D
Decision: -no attorney-client privilege b/c P also was client; D had duty to disclose dual rep.

Skarbrevik (Cal. 1991): [no duty] -no fiduciary duties to shareholders
In re Banks (Ore. 1978): [co-client] -where it is reasonable to assume that there is no real reason
for an individual to differentiate between his own and corporate interests, corporate counsel owes
that individual the same duty not to represent conflicting interests that he would a client

Garner v. Wolfinbarger (5th Cir. 1970) p768
Rule: -shareholder-plaintiffs may gain access to information protected by corporation’s attorney-
        client privilege if they can “show cause why [the privilege] should not be invoked”
         “good cause” = # or % of stockholders, nature of claim, criminal allegations, etc.
Common law precedent: if showing of serious breach of fiduciary duty, the privilege may not be
        claimed by the fiduciary against the beneficiary for whose benefit the relationship exists

Hypo1a: -corporation in spat with former CEO about a breach of fiduciary duty
      -corp decided to sell the corp; CEO organized management-led buy out
       lawyers have fiduciary duty of undivided loyalty to shareholders
     1b: -during litigation, corp. enters into deal to sell the assets; turns down CEO’s bid
      -CEO has his lawyers bring shareholder derivative suit to prevent closing
       shareholder must bring derivative suit on behalf of the company, not on own behalf
       Albers sued CEO for breach of fiduciary duty; wants to know about communications
               between him and his attorneys re: derivative suit (~Garner doctrine)
      NB: lawyers could be subject to discipline for bringing false derivative suit




                                                                                                  12
Alberts                              Legal Profession                             Fall 2002


Representing a Fiduciary
What is the nature of a lawyer’s responsibility to a non-client when representing the fiduciary
who has a duty of undivided loyalty to the non-client?

Fickett v. Superior Ct. of Pima Cty. (Ariz. App. 1976) p772
Facts: -guardian defrauds ward through misappropriation, conversion; lawyer failed to discover
Decision: -guardian’s lawyer violated fiduciary duty to ward; which he assumed upon hiring
                if lawyer should have known that guardian acting adversely, should have acted

Hazard, Triangular Lawyer Relationships p775: -lawyer-client & -3rd party concepts inadequate


Professional discipline

MRPC 8.3: lawyer who knows of other lawyer’s ethical violation shall inform prof. authorities
              (unless information protected by MRPC 1.6)
     8.4: it is misconduct to violate/assist in violating RPC, dishonesty/fraud/deceit/misrep.

In Re Himmel (Ill. 1988) p927
Facts: -D won settlement for client from Casey but failed to disclose Casey’s theft of client funds
Decision: -D’s law license suspended for a year; must report despite client’s wishes

MRPC 5.1: lawyer with supervisory authority shall ensure that other lawyers conform to RPC,
             shall be responsible for other lawyer’s violation if orders/ratifies/fails to mitigate
     5.2: no RPC violation if subordinate lawyer acts in accordance w/ supervisor’s reasonable
             resolution of ethical dilemma

Steven Brill, “When a Lawyer Lies” (1979) p938
Issue: -Fortenberry kept quiet even when he knew the senior partner was lying, fraud on tribunal
Result: -partner Peck went to jail; Fortenberry eventually cleared but passed over for partner




Conclusion

Technique without compassion is a menace; compassion without technique is a mess. –Llewellyn

Reputation: everyone remembers this, even when every other case detail is forgotten

Crushing burden imposed by the commercialization of the legal profession: HOURS

“We are in a lawyer’s moment” vis-à-vis the war on terrorism ~ civil rights movement
       lawyer’s are the foot-soldiers of the constitution




                                                                                                  13
Alberts                              Legal Profession                             Fall 2002


Summary of Select Rules

Rule 1 – Client Lawyer Relationship
  Competence
       1.1: lawyer shall provide competent representation (knowledge, skill, thoroughness, prep)
  Scope of Representation
       1.2(a): lawyer shall abide by client’s decision, consult re: objectives, settlement
          (c): lawyer may limit scope of representation if reasonable & w/ consent
          (d): lawyer shall not counsel client to engage in criminal/fraudulent conduct,
                but may counsel as to legal consequences of proposed conduct
  Diligence
       1.3: lawyer shall act with diligence & promptness in representing client
  Communication
       1.4: lawyer shall keep client reasonably informed, shall explain matter to the extent
                reasonably necessary to permit client to make informed decisions
  Fees
       [1.5: not discussed]
  Confidentiality of Information
       1.6: lawyer shall not reveal info relating to representation without client consent,
                unless to prevent reasonably certain death/bodily harm or establish claim/def
  Conflict of Interest: General Rule
       1.7(a): no conc. conflicts (rep of one adverse to another or otherwise materially limited)
       1.7(b): except if able to provide competent rep, no litigation, each gives informed consent
  Conflict of Interest: Prohibited Transactions
       1.8(b): lawyer shall not use info re: client rep to client’s disadvantage w/o consent
           (j): lawyer shall not have sex with a client unless prior consensual relationship (2002)
  Conflict of Interest: Former Client
       1.9(a): lawyer who formerly represented client shall not represent another in a
                substantially related matter in which that person’s interests are materially adverse
                (unless previous client consents)
          (c)(1): lawyer who formerly represented client shall not use info against former client

   Imputed Disqualification: General Rule
       1.10: ethical disability of one lawyer imputed to entirety of firm
   Successive Government and Private Employment
       [1.11: not discussed]
   Former Judge or Arbitrator
       [1.12: not discussed]
   Organization as Client
       1.13: lawyer’s client is organization, not officers/directors/employees
   Client under Disability
       [1.14: not discussed]
   Safekeeping Property
       [1.15: not discussed]




                                                                                                 14
Alberts                              Legal Profession                            Fall 2002


   Declining or Terminating Representation
       1.16: a) lawyer shan’t represent/shall withdraw when:
               1) violation of MRPC or other law, 2) physically/mentally unable, 3) fired
             b) lawyer shall withdraw when:
               no harm to client, client wants to do crime/fraud, fundamental disagreement
             c) lawyer shall comply with notice/permission requirements of court
             d) upon termination, lawyer shall take steps to protect client interests
   Sale of Law Practice
       [1.17: not discussed]

Rule 2 – Counselor
  Advisor
       2.1: lawyer shall exercise independent professional judgment, render candid advice;
               may refer to all considerations: legal, moral, economic, social, political
  Intermediary
       [2.2: not discussed]
  Evaluation for Use by 3rd Persons
       2.3: lawyer may evaluate matter for 3rd party if compatible with relationship w/ client

Rule 3 – Advocate
  [Meritorious Claims-3.1, Expediting Litigation-3.2]
  Candor Toward the Tribunal
       3.3(a): lawyer shall not make/fail to correct false statement, or offer false evidence;
          (b): must take remedial measures if knows client has/plans to perjure/obstruct
                first remonstrate with client, then need to disclose material information
          (c): all this trumps MRPC 1.6 duty of confidentiality
          (d): in ex arte proceeding, must disclose all material facts, whether or not advers
  Fairness to Opposing Party & Counsel
       3.4 (a): lawyer shall not obstruct other party’s access to evidence or destroy/alter/conceal
               a document or other material having potential evidentiary value
           (b): lawyer shall not suborn perjury, mess with witness, etc.
  [Impartiality & Decorum of Tribunal-3.5, Trial Piblicity-3.6, Lawyer as Witness-3.7,
      Special Responsibilities of Prosecutor-3.8, Advocate in Non-adjudicative Proceedings-3.9]

Rule 4 – Transactions with Persons Other than Clients
  Truthfulness in Statements to Others
       4.1: lawyer shall not make false statement of material fact or law to 3rd party, or fail to
               disclose material fact when necessary to avoid assisting criminal/fraudulent act,
               unless disclosure prohibited by 1.6
  Communication with Person Represented by Counsel
       4.2: no communication by lawyer with person represented by someone else on that matter
                but what if employee of corp. (depends if human personification of party)?
  Dealing with Unrepresented Persons
       4.3: in dealing with unrepresented person, lawyer shall not say he’s disinterested
  Respect for Rights of 3rd-Persons
       4.4: [not discussed]



                                                                                                 15
Alberts                              Legal Profession                              Fall 2002



Rule 5 – Law Firms & Associations
  Responsibilities of a Partner/Supervisory Lawyer
       5.1: lawyer with supervisory authority shall ensure that other lawyers conform to RPC,
               shall be responsible for other lawyer’s violation if orders/ratifies/fails to mitigate
  Responsibilities of a Subordinate Lawyer
       5.2: no RPC violation if subordinate lawyer acts in accordance w/ supervisor’s reasonable
               resolution of ethical dilemma
  [Nonlawyer Assistants-5.3, Professional Independence-5.4, Unauthorized Practice-5.5,
       Restrictions on Practice-5.6, Restrictions on Law-Related Services-5.7]

[Rule 6 – Public Service]

[Rule 7 – Information About Legal Services]

Rule 8 – Maintaining the Integrity of the Profession
  [Bar Admission & Discipline-8.1, Judicial & Legal Officers-8.2]
  Reporting Professional Misconduct
       8.3: lawyer who knows of other lawyer’s ethical violation shall inform prof. authorities
                (unless information protected by MRPC 1.6)
  Misconduct
       8.4: it is misconduct to violate/assist in violating RPC, dishonesty/fraud/deceit/misrep.




                                                                                                   16

								
To top