PROFESSIONALISM IN A BOX Teaching Materials on Professionalism by liuhongmei

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									                              PROFESSIONALISM IN A BOX:

                       Teaching Materials on Professionalism Prepared
                       by the American College of Real Estate Lawyers
                               Task Group on Professionalism


        In 2004, the American College of Real Estate Lawyers launched a multi-year program
designed to provide leadership to the real estate bar both in reexamining principles of
professionalism in a transactional law setting and in developing tools to assist busy practitioners
in mentoring younger lawyers in these principles. The ACREL Statement of Professionalism, a
copy of which is included in these materials, was the first result of this program. One of the
tenets of the Statement is that ―Members should advance the dialogue on professionalism in the
legal profession by participating in ACREL CLE professionalism programs, writing articles on
professionalism, and engaging other lawyers in professionalism discussions.‖ These materials
are an effort to respond to that imperative.

        It has been said that for lawyers, the distinction between ethics and professionalism is
that ethics defines what we must do, while professionalism defines what we should do. ACREL
members aspire to make professionalism one of the hallmarks of our membership. Recognizing
our responsibility for leading younger lawyers in developing an understanding of and respect for
principles of professionalism, we have developed these model teaching and group learning
materials on professionalism issues in the real estate practice. These materials have been tested
in workshops participated in by ACREL members and have been adapted based on their
feedback. Our intent was to develop teaching materials that are rich in real world examples and
hypotheticals from our practice area that can be used in law firms, law departments and local bar
groups to initiate workshops that will advance the dialogue on professionalism.

        Issues of professionalism often do not generate easy answers. For that reason, it is
particularly important that these issues be discussed and debated among practicing lawyers and
that seasoned practitioners mentor less experienced lawyers as to what professionalism demands
in actual practice situations. These materials are intended to be used in a discussion setting.
Each of the three segments should produce ample material for a discussion of approximately an
hour, assuming participants have had the opportunity to review the materials beforehand.

       The three segments focus on the principle of independence, lawyer truthtelling and
lawyer civility. Each segment features hypothetical fact situations followed by discussion
questions and resource materials. The discussion leader should be able to use the materials as-is,
without additional preparation—thence the title ―Professionalism in a Box.‖ We encourage and
hope for the widespread use of these materials and look forward to user feedback.

                      American College of Real Estate Lawyers Task Group on Professionalism
                                           Portia Morrison
                                           Kevin Shepherd
                                           Bob Thompson
                                                                      September 2007
                                                         Contents


                                                                                                                        Page

ACREL Statement of Professionalism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Part I: Principle of Independence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Part II: Lawyer Truthtelling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Part III: Lawyer Civility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16




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                ACREL STATEMENT OF PROFESSIONALISM
        The American College of Real Estate Lawyers stands for the highest standards in the
practice of real estate law. In furtherance of the standards of the College, its Members have
adopted this Statement of Professionalism and aspire to the following tenets.

                 1.   COMMITMENT TO THE CLIENT.

                             Members must adopt the highest standards of excellence in the
                      practice of law, fulfill the fiduciary duties owed to each client, and place
                      the interests of the client, the legal profession and the administration of
                      justice above self-interest.

                             Members should endeavor to achieve the client’s lawful objectives
                      in matters as expeditiously and economically as possible.
                             Members should keep the client informed of the progress of the
                      matter for which the Members have been retained or engaged, including
                      the costs and fees.

                 2.   COMMITMENT TO INTEGRITY AND CIVILITY.

                              Members must adhere strictly to applicable legal and ethical
                      standards of professional responsibility, acting with fairness, honesty,
                      personal dignity and professional integrity.
                              Members must scrupulously honor commitments made and extend
                      civility and courtesy to all persons.
                              Members should advise clients that civility and courtesy are not to
                      be equated with weakness but are consistent with vigorous advocacy and
                      zealous representation.
                              In the conduct of negotiations, Members should conduct
                      themselves with dignity and fairness and refrain from conduct meant to
                      harass or annoy the opposing party.
                              Members should (a) in pursuing the objectives of the client act in
                      the best interests of the client but at all times in a professional manner
                      consistent with this Statement, (b) conduct civil, honest and open
                      negotiations, (c) draft understandable documents consistent with the
                      understandings of the parties, and (d) disclose to the other party obvious
                      drafting errors inconsistent with those understandings.
                              Members will clearly identify, for other counsel or parties, all
                      changes and revisions made to documents.
                              Members will scrupulously refrain from making misleading
                      statements of law or fact, whether by omission, inference, or implication.

                 3.   COMMITMENT TO THE PROFESSION.




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                     Members should, at a personal level, encourage excellence in the
              law by one or more of the following activities: promoting a stringent
              program of continuing legal education, engaging in professional speaking
              and writing that expands the knowledge and practice skills of all members
              of the bar, training and mentoring new and less experienced lawyers, and
              voicing respect for the legal system.
                     Members should avail themselves of professionalism courses to
              remain abreast of developments in this important area.
                     Members should strive to provide role models and examples of
              balanced lives and professional practice for law students and young
              lawyers.

         4.   COMMITMENT TO THE COMMUNITY.

                     Members must provide pro bono or reduced fee legal services to
              low income members of the community or legal services to public or
              private organizations designed to address needs or persons of limited
              means and should perform public and community service for the public
              good.
                     Examples of this commitment include, among others, providing
              legal assistance to non-profit neighborhood and community development
              organizations and offering negotiating and drafting skills to resolve local
              ―not in my backyard‖ issues.

         5.   COMMITMENT TO THE ORGANIZATION.

                     Members should advance the dialogue on professionalism in the
              legal profession by participating in ACREL CLE professionalism
              programs, writing articles on professionalism, and engaging other lawyers
              in professionalism discussions.
                     Members should nominate those candidates for admission into
              ACREL who have exhibited high levels of professionalism in their
              practices.
                     Members should observe and practice the tenets set forth in this
              Statement of Professionalism.



Adopted 10/2004




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                                               PART I

                                   Principle of Independence

                                       I.       Introduction

      The principle of independence refers to independence from the client. Professor Roger
Cramton has spoken of the ―basic paradox of professional independence‖:

       The lawyer is loyal to his client, providing a vigorous and fearless presentation of the
       client’s cause. But his zeal for the client is tempered by the lawyer’s duties to the court,
       to adversaries and third persons, and to the public. He is not a mere alter ego,
       mouthpiece or ―hired gun‖ of the [client], but an independent professional who observes
       professional standards of integrity, devotion to truth and justice, and respect for broader
       social values. [Cramton at 49-50]

       Professor Eleanor W. Myers has said, ―This meaning of independence entails the lawyer
standing apart from the client and giving detached, objective advice, fully informed by the law,
experience, and the practical ramifications of the client’s situation.‖ [Myers at 857]

       We will examine three elements of the lawyer’s duty of independence by way of
hypotheticals:

      Duty to the court and the legal system

      Duty to adversaries and third parties

      Duty to the public

             II.     Hypothetical One: Duty to the Court and the Legal System

        You are representing a client as buyer in a real estate sale transaction involving an office
property. The state where the property is located imposes a very steep transfer tax on the transfer
of real property. The sale contract requires the buyer (your client) to pay the transfer tax. The
transfer tax statute and filing form allow for the exclusion of the value of ―personal property‖
from the base purchase price on which the tax is calculated The buyer and seller have not made
any allocation of the purchase price to any of these elements in the sale contract.

        Notwithstanding that this is a typical office building including minimal landlord-owned
personal property, your client proposes to allocate a substantial portion of the purchase price to
personal property on the transfer tax form. He also suggests modifying the contract to provide
for a covenant not to compete by the seller with respect to ownership and operation of other
office buildings within a few blocks of the subject property and that a portion of the purchase
price be allocated to the value of that covenant for transfer tax purposes. How do you advise the
client?




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       A.      Does the buyer’s lawyer have a responsibility to attempt to dissuade the client
from these attempts to minimize transfer tax liability? On what basis?

       B.      Should the answer differ depending on whether or not the lawyer is requested (or
required) to sign the transfer tax declaration?         Note that the ACREL Statement of
Professionalism says that ―members will scrupulously refrain from making misleading
statements of law or fact, whether by omission, inference, or implication.‖ Is this relevant?

       C.      Should the lawyer have a differing level of concern regarding the exclusion of the
value of personal property, on the one hand, and the covenant not to compete, on the other?

       D.     If the lawyer advises against these tax minimization steps, and the client insists on
following them, what should the lawyer do?

        E.      What is the relevance of Rule 1.6 of the Model Rules of Professional Conduct,
which states that ―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 . . . . to the extent the lawyer 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 interest or property of another . . . .‖

              III.    Hypothetical Two: Duty to Adversaries and Third Parties

        You are representing a client (as seller) in the sale of an apartment property located in a
state where real estate taxes are assessed on a calendar year basis and paid a year in arrears. The
buyer is a company headquartered in another state. Your client has had extremely acrimonious
dealings with the buyer in the past and would not have done business with this company again
but for the very attractive price the buyer offered for the property. The client, feeling she has
heavy leverage, has told you she wants to take the toughest positions possible in the negotiation.

        The buyer is represented by inside counsel located in the buyer’s corporate office. In the
first draft of the contract, prepared by buyer’s counsel, the tax proration provision calls for
proration of real estate taxes ―payable in the year in which closing occurs.‖ It is the universal
custom and practice in your jurisdiction to prorate taxes assessed for the year in which closing
occurs (and payable in the following year). The closing will occur in December, and pursuant to
the contract as drafted, the buyer will receive no proration at all for almost a year’s worth of
taxes assessed for the closing year. How do you advise the client?

        A.    Does the seller’s lawyer have any responsibility to the buyer and its counsel that
would require the lawyer to volunteer information on local custom and practice regarding tax
prorations?

         B.     The ACREL Statement of Professionalism says that ―members should . . .disclose
to the other party obvious drafting errors‖ inconsistent with the understandings of the parties. Is
this statement relevant to the instant case?




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        C.     Does the seller’s attitude towards the buyer, or leverage in the transaction, or
instructions as to negotiating posture have any bearing on how its counsel should analyze the
question? Note that the ACREL Statement of Professionalism states that ―in the conduct of
negotiations, Members should conduct themselves with dignity and fairness and refrain from
conduct meant to harass or annoy the opposing party.‖ Is this directive applicable?

         D.      Would the lawyer’s decision to disclose violate the duties of the lawyer to his
client, the seller? Is it the sole responsibility of the buyer and its counsel to inform themselves
regarding local custom and practice by engaging local counsel?

       E.       Assuming that the client is unaware of the proration provision in the buyer’s draft
contract, and that the lawyer decides to inform buyer’s counsel of local proration custom, should
the lawyer first discuss this disclosure with the client? Inform the client after the fact?

        F.      What is the relevance of Rule 4.1(a) of the Model Rules of Professional Conduct,
which states that ―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.‖
(Rule 1.6 is quoted above under Hypothetical One.)

                        IV.     Hypothetical Three: Duty to the Public

        Your client is the master developer of a large planned community—practically the size of
a new town--with several thousand residences, both owner occupied units and apartments. The
community has a number of common parks, swimming pools and other recreational facilities
which are a major draw to potential residents, but which are anticipated to be expensive to
maintain. These facilities are maintained and operated, and assessments for that purpose are
levied, by a master association covering the entire community.

        You are negotiating the sale of the apartment land in the community, involving a big tract
where a large number of units are planned. The apartment land would be brought under the
jurisdiction of the master association at closing. Given the attractiveness of the community
recreational facilities, the apartment residents are expected to make heavy use of them.

        Your client still controls the master association and is in the process of finalizing the
details of the assessment regime as it will apply to the apartment land. He anticipates an
assessment formula that would result in substantially lower assessments against the apartments
on a per unit basis than on the owner occupied homes and condominiums, on the theory that the
apartment project will have its own pool and clubhouse. The formula does not violate any
applicable legal requirements. These relatively lower assessments were reflected in the offering
materials for the apartment land sale and are likely to have been factored into the price.

        You feel confident that the homeowners have not focused on the fact that the many new
apartment tenants who will soon be coming to the community will be entitled to use the common
recreational facilities without contributing a proportionate share of the cost of upkeep, but in
discussions with your client, he expresses reluctance to introduce that topic to the apartment land



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buyer for fear of impacting the sale price. Besides, almost all of the land in the community has
been sold, and the client expects to be substantially out of the development soon. How do you
advise the client?

     A.      Does the master developer’s lawyer have any duty to homeowners in the
community to assure the fairness of the assessment regime?

        B.    Does the master developer’s lawyer have any duty to the future community as a
whole to structure the recreational use rights and assessments in such a way as to minimize
friction among residents?

        C.      If the client insists that the proposed assessment program is fair because he
expects that the pool and clubhouse dedicated to the apartment community will substantially
lessen apartment dweller use of the community facilities, does the lawyer have any basis for
substituting his or her judgment to the contrary?

       D.      Does the fact that the master developer probably will no longer be involved when
the homeowners become aware of the extent of use of community facilities by apartment
dwellers, and the lower costs assessed to the apartment owner, have any bearing on how the
developer’s lawyer analyzes his or her professional responsibilities?

                                       V.      Resources

A.     Applicable Rules

       The source of the principle of independence is Rule 2.1 of the ABA Model Rules of
Professional Conduct:

       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.

       Comment:
       [1] A client is entitled to straightforward advice expressing the lawyer’s honest
       assessment. Legal advice often involves unpleasant facts and alternatives that a client
       may be disinclined to confront. In presenting advice, a lawyer endeavors to sustain the
       client’s morale and may put advice in as acceptable a form as honesty permits. However,
       a lawyer should not be deterred from giving candid advice by the prospect that the advice
       will be unpalatable to the client.

       [2] Advice couched in narrow legal terms may be of little value to a client, especially
       where practical considerations, such as cost or effects on other people, are predominant.
       Purely technical legal advice, therefore, can sometimes be inadequate. It is proper for a
       lawyer to refer to relevant moral and ethical considerations in giving advice. Although a




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     lawyer is not a moral advisor as such, moral and ethical considerations impinge upon
     most legal questions and may decisively influence how the law will be applied.

     [3] A client may expressly or impliedly ask the lawyer for purely technical advice. When
     such a request is made by a client experienced in legal matters, the lawyer may accept it
     at face value. When such a request is made by a client inexperienced in legal matters,
     however, the lawyer’s responsibility as advisor may include indicating that more may be
     involved than strictly legal considerations.

     [4] Matters that go beyond strictly legal questions may also be in the domain of another
     profession. Family matters can involve problems within the professional competence of
     psychiatry, clinical psychology or social work; business matters can involve problems
     within the competence fo the accounting profession or of financial specialists. Where
     consultation with a professional in another field is itself something a competent lawyer
     would recommend, the lawyer should make such a recommendation. At the same time, a
     lawyer’s advice at its best often consists of recommending a course of action in the face
     of conflicting recommendations of experts.

     See also Restatement of the Law Third: The Law Governing Lawyers, Section 94(3):

     In counseling a client, a lawyer may address non-legal aspects of a proposed course of
     conduct, including moral, reputational, economic, social, political, and business aspects.

B.   State Bar Example: The Florida Bar, Ideals and Goals of Professionalism

     Ideal: A lawyer should exercise independent judgment and should not be governed by a
     client’s ill will or deceit.

     Goals:

     A lawyer should counsel the client or prospective client, even with respect to a
     meritorious claim or defense, concerning the public and private burdens of pursuing the
     claim as compared with the benefits to be achieved.

     A lawyer should at all times provide the client with objective evaluations and advice
     without purposefully understating or overstating achievable results or otherwise creating
     unrealistic expectations.

     A lawyer should not permit the client’s ill will toward an adversary, witness or tribunal to
     become that of the lawyer.

     A lawyer should counsel the client against the use of tactics designed: (a) to hinder or
     improperly delay the process involved; or (b) to embarrass, harass, intimidate, improperly
     burden, or oppress an adversary, party or any other person and should withdraw from
     representation if the client insists on such tactics.




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     In contractual and business negotiations, a lawyer should counsel the client concerning
     what is reasonable and customary under the circumstances.

C.   Relevant Commentary

     1.     Hoffman,Resolutions in Regard to Professional Deportment:

             ―If, after duly examining a case, I am persuaded that my client’s claim or defense
     (as the case may be) cannot, or rather ought not, to be sustained, I will promptly advise
     him to abandon it. To press further in such a case, with the hope of gleaning some
     advantage by an extorted compromise, would be lending myself to a dishonourable use of
     legal means, in order to gain a portion of that, the whole of which I have reason to believe
     would be denied to him both by law and justice.

             My client’s conscience, and my own, are distinct entities: and though my vocation
     may sometimes justify my maintaining as facts, or principles, in doubtful cases, what
     may be neither one nor the other, I shall ever claim the privilege of solely judging to what
     extent to go. In civil cases, if I am satisfied from the evidence that the fact is against my
     client, he must excuse me if I do not see it as he does, and do not press it; and if the
     principle also be wholly at variance with sound law, it would be dishonourable folly in
     me to endeavour to incorporate it into the jurisprudence of the country, when, if
     successful, it would be gangrene that might bring death to my cause of the succeeding
     day.‖ [Hoffman]

     2.     Luban, Asking the Right Questions:

             ―Representing a client does not entail endorsement of the client’s objectives;
     advocating for a client doesn’t mean believing that the client’s cause is just; and, above
     all, advising a client sometimes means telling the client that what he wants to do is
     against the law and he shouldn’t do it.‖

             ―The ideal of the lawyer as public citizen requires lawyers to mediate between
     public norms and private interests.‖

             ―In its pure form, the adversarial ethic discounts to zero the interests of everyone
     but the client.‖ [Luban at 839]

     3.     Meyers, Examining Independence and Loyalty:

             Refers to ―[the tension arising from] the claims of the client to a lawyer’s
     fiduciary obligation balanced against and sometimes conflicting with the lawyer’s
     obligations to the legal system and to the lawyer’s sense of justice, what some would
     describe as the lawyer’s ―public-regarding‖ obligations.‖




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               ―This meaning of independence entails the lawyer standing apart from the client
       and giving detached, objective advice, fully informed by the law, experience, and the
       practical ramifications of the client’s situation.‖

              ―[This type of] independence is not a duty to the client at all—it is a responsibility
       of lawyers to the legal profession.‖ [Myers, supra}

       4.     Radzik, Advocacy and Genuine Autonomy: The Lawyer’s Role When the Client
       Has a Right to Do Wrong:

              ―. . . there are many things that one can do legally but not justly.‖ [Radzik at 255]

                                      VI.     Bibliography

Roger C. Cramton, The Lawyer’s Professional Independence: Memories, Aspirations, and
Realities, The Lawyer’s Professional Independence: An Ideal Revisited, 49, 50 (John B.
Davidson ed., 1985) (―Cramton‖).

David Hoffman, Resolutions in Regard to Professional Deportment, A Course of Legal Study
Addressed to Students and the Profession Generally (American Law: the Formative Years, Arno
Press 1972) (1836) (―Hoffman‖).

David Luban, Asking the Right Questions, 72 Temple L. Rev. 839 (1999) (―Luban‖).

Eleanor W. Myers, Examining Independence and Loyalty, 72 Temple L. Rev. 857 (1999)
(―Myers‖).

Linda Radzik, Advocacy and Genuine Autonomy: The Lawyer’s Role When the Client Has a
Right to Do Wrong, 40 S. Tex. L. Rev. 255 (1999) (―Radzik‖).




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                                                  PART II

                                          Lawyer Truthtelling

                                          I.       Introduction

        Many commentators have viewed the perceived failure of lawyers to meet the highest
standards of honesty and candor as contributing significantly to popular disenchantment with,
and negative perception of, the legal profession. Yet there remains considerable professional and
scholarly debate as to what that standard is or ought to be. While there is considerable legal
commentary on the responsibility of litigation attorneys, as officers of the court, to address the
court and often adversaries in the forthright and honest fashion and to avoid withholding relevant
case law or factual information, the application of these principles to a transactional setting is far
from clear. To some degree, the professional obligations to adversary parties in litigation
settlement negotiations (see ABA Bar Opinion 06-439 (April 12, 2006)) can be viewed as
relevant to a transactional setting; however, the translation is not always clear or intuitively
correct. With this in mind, consider the following hypothetical facts.

                                    II.        Hypothetical Facts

       You are representing an important client in a complicated real estate partnership and
financing transaction. Key issues in the business deal are the ultimate net worth of the entity
your client proposes to act as the partner in the joint venture, as well as how much your client
will contribute to capitalize the venture. How do you deal with each of the following
circumstances:

        A.      Your client instructs you to inform the other lawyer during the process of
negotiations that its proposed venture partner has five times the net worth that he admits is
actually the case.

        B.      In the course of your negotiations with opposing counsel, the issue of initial and
total capital contribution to the venture by your client arises. You know that an initial capital
contribution of $20 million has been included in the client's confidential, internally generated
pro forma financial analysis for the project, but the client instructs you that, if asked, you are to
identify $15 million as its "bottom line."

       C.     As a basis for negotiating a more favorable business deal, your client presents to
the opposing party and its counsel a pro forma that you and he know to be generally accurate, but
also know contains highly questionable assumptions as to one aspect of project feasibility.

                                           III.     Resources

A.     Applicable Rules

        The ABA Model Rules of Professional Conduct, Section 4.1(a), sets forth the basic,
traditional mandate of honesty on the part of litigators and transactional negotiators alike:




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       "Truthfulness in Statements to Others

       "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
       [client confidentiality]."

       This relatively unequivocal statement is, however, complicated (or, in fact, made
confusing) by the qualifications in the commentary to Rule 4.1(a) and its predecessor provisions.
Comment [2] grapples with the question of what constitutes a "material fact" in a negotiating
context:

              "Whether a particular statement should be regarded as one of fact can
       depend on the circumstances. Under generally accepted conventions in
       negotiation, certain types of statements ordinarily are not taken as statements of
       material fact. Estimates of price or value placed on the subject of a transaction
       and a party's intentions as to an acceptable settlement of a claim are in this
       category."

       Issues of exaggeration of the truth and "puffery" were addressed, albeit somewhat
imprecisely, in a 1980 Discussion Draft of what became Model Rule 4.1:

              "A party is permitted to suggest advantages to an opposing party that may
       be insubstantial from an objective point of view. The precise contours of the legal
       duties concerning disclosure, representation, puffery, overreaching, and other
       aspects of honesty in negotiations cannot be concisely stated. "

        Comment [1] to Rule 4.1 (discussed below) reiterates the lawyer's obligation to be
truthful, but then indicates that the lawyer "has no affirmative duty to inform an opposing party
of relevant facts", but yet again suggests that "misleading omissions" can be equivalent to
affirmative false statements.

B.     Lying as Part of the Process?

      As to the inevitability or desirability of efforts at deception in the negotiating process,
compare the following two diametrically opposed views:

       1.     White, "Machiavelli and the Bar: Ethical Limitations on Lying in Negotiations":

              "Like the poker player, a negotiator hopes that his opponent will
       overestimate the value of his hand. Like the poker player, in a variety of ways he
       must facilitate his opponent's inaccurate assessment. The critical difference
       between those who are successful negotiators and those who are not lies in this
       capacity both to mislead and not to be misled.



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               "Some experienced negotiators will deny the accuracy of this assertion,
       but they will be wrong. I submit that a careful examination of the behavior of
       even the most forthright, honest and trustworthy negotiators will show them
       actively engaged in misleading their opponents about their true position. . . . To
       conceal one's true position, to mislead an opponent about one's true settling point,
       is the essence of negotiation." [White at p.928]

       2.     Wetlaufer, "The Ethics of Lying in Negotiations":

              " [R]egrettably, lying is not the province of a few "unethical lawyers" who
       operate on the margins of the profession. It is a permanent feature of advocacy
       and thus of almost the entire province of law.

              "Our discomfort with that fact has, I believe, led us to create and embrace
       a discourse on the ethics of lying that is uncritical, self-justificatory and largely
       unpersuasive. . . .

               "Somehow we must stop kidding ourselves about these matters. We must
       grant a place to ethics, first in our discourse and then in our actions. . . . First, we
       might acknowledge that we have a personal stake in the existing discourse
       concerning the relationship between effectiveness and ethics. . . . Second, we
       might admit that, in a wide range of circumstances, lying works. Third, we might
       become more critical of our self-serving claims about what is not a lie and about
       what lies are ethically permissible. This involves acknowledging, for instance,
       that many lies are ethically impermissible even though they effectively serve our
       interests and those of our clients—even though they are not forbidden either by
       law or by our codes of professional self-regulation. It also involves giving up our
       claim that all our lies are justified by the rules of the game or by our duties to our
       clients. It entails accepting the proposition that ethics and integrity are things for
       which a price may have to be paid. Fourth, we might clearly define winning in a
       way that leaves room for ethics. . . . And finally, we might give up our claim that
       this is all too hard, that we have no choice in these matters and that we are not
       responsible for the choices we make and the harm we inflict upon others."
       [Wetlaufer, pp 1272-73]

C.     Partial Disclosures

       With respect to incomplete or misleading partial disclosures, see Craver, ―Negotiation
Ethics: How to Be Deceptive Without Being Dishonest/How to Be Assertive Without Being
Offensive‖:

              "When lawyers negotiate, they must constantly decide whether they are
       going to divulge relevant legal and/or factual information to opposing counsel. If
       they decide to disclose some pertinent information, may they do so partially or is
       complete disclosure required? They must also determine the areas they may
       permissibly misrepresent and the areas they may not distort." [Craver at p. 720]

D.     Reasonable Reliance and Expectations of the Parties


                                                 12
        Some commentators make the argument that efforts at deception are within the "rules of
the game" and are permissible because reliance on a lawyer's assertions by his or her counterpart
is not part of that party's expectations nor would it be reasonable. Wetlaufer [Wetlaufer at pp.
1272-73] quotes two such viewpoints:

                "Professor White has asked the rhetorical question, "Why is it so clear that
       one's responsibility for truth ought not be a function of the . . . expectations of the
       opponent?" [White at 929-30.] He further notes that "everyone expects" lawyers
       to lie about certain subjects and that makes the question of the permissibility of
       those lies "easy." [Id. at 934.] Haydock went further and argued that lawyers are
       obligated not to play by rules that are more ethical than those established by
       "local custom" and by the "general consensus of propriety among peers."
       [Haydock at 198-99.] These positions seem consistent with the rule of law that a
       lie is not cognizable for purposes of fraud unless it would have been, under all the
       circumstances, reasonable for the other person to have relied on the lie."
       [Wetlaufer at 1248, n. 91]

E.     Conflicting Duties.

      As to potentially conflicting obligations of confidentiality or loyalty to the client, see
Model 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) [prevention of death or bodily harm, etc.].

       At least one commentator suggests that any supposed dilemma created by the duty to
maintain client confidences through prevarication is illusory:

               "[E]ven if we conclude that there are certain secrets that it is wholly
       permissible to keep, there is still the second question of whether it is ethically
       permissible to lie for the purpose of protecting such secrets. . . . The difficulty
       here is that while lies are often useful or convenient in the protection of secrets,
       they are rarely necessary. The negotiator may, for instance, decline to volunteer
       the information in question. Even if asked, there are all kinds of ways to avoid
       answering a question without resorting to lies." [Wetlaufer at 1262]

       Yet, in other circumstances, the strategy of attorney silence may be more complicated.
As noted above, Comment [1] to Model Rule 4.1 states:

               "A lawyer . . . generally has no affirmative duty to inform an opposing
       party of relevant facts. . . . Misrepresentation can . . . occur [however] by partially
       true, but misleading, statements or omissions that are the equivalent of affirmative
       false statements."

       At least two commentators have extended the mandate of Rule 4.2, Comment [1] to
include a duty of disclosure:


                                                 13
               "[A] lawyer learning that a prior assertion by a client [or the lawyer] is
       false and also having reason to believe that the opposing party is or may be
       relying upon the original assertion to that party's potential detriment is obligated
       to correct the prior assertion or require that the client do so." [Jarvis & Tellam at
       559]

       In their view, the only question that remains is, given obligations of client confidentiality,
"[m]ay a lawyer correct a prior misunderstanding or misstatement even if the client does not
wish the lawyer to do so?" [Jarvis & Tellam at 561]

F.     Practical Considerations

       As to the pragmatic reasons for not lying in a negotiating context, see Loder, "Moral
Truthseeking and the Virtuous Negotiator":

               "Even without regulatory penalties, . . . informal sanctions already govern
       negotiation. Professional reputations develop surprisingly easily and tend to stick
       like glue. . . . A deceitful reputation can make [a lawyer] less effective with
       lawyers who are aware of that persona. Other clients then suffer from reduced
       effectiveness, and this eventually can affect business. . . .

               "In addition, all lawyers using deception risk discovery in progress. If the
       deception surfaces, the negotiation may fail because the deceived party retreats in
       distrust. Then the client may be unhappy." ["Loder" at 90-91]



                                       IV.     Bibliography

Craver, Charles B., "Negotiation Ethics: How to be Deceptive Without Being Dishonest/How to
be Assertive Without Being Offensive," 38 S. Tex. L. Rev. 713 (1997) ("Craver")

Dahl, Scott S., "Ethics on the Table: Stretching the Truth in Negotiations," 8 Rev.Litig.173
(1988-89)

Haydock, R., "Negotiation Practice," (John Wiley 1984) ("Haydock")

Jarvis, Peter R. and Tellam, Bradley F., "A Negotiations Ethics Primer for Lawyers," 31
Gonzaga L. Rev. 550 (1995-96)

Loder, Reed Elizabeth, "Moral Truthseeking and the Virtuous Negotiator," 8 Geo. J. Legal
Ethics 45 (Fall, 1994)

Peters, Geoffrey M., "The Use of Lies in Negotiation," 48 Ohio St. L. J.1 (1987)

Rubin, Michael H., "The Ethics of Negotiations: Are There Any?", 56 La. L.Rev.447 (1995)




                                                 14
Simon, William H., "Virtuous Lying: A Critique of Quasi-Categorical Moralism," 12 Geo. J .
Legal Ethics 433 (Spring, 1999)

Wetlaufer, Gerald, "The Ethics of Lying in Negotiations," 75 Iowa L. Rev. 1219 (July, 1990)
("Wetlaufer")

White, James J., "Machiavelli and the Bar: Ethical Limitations on Lying in Negotiations," 1980
Am. Bar. Found. Re. J. 926 ("White")




                                             15
                                                  PART III

                                               Lawyer Civility

                                          I.       Introduction

         Recent literature has suggested that, in addition to the perception of lawyers’ penchant for
deception and prevarication, the public regards declining civility between lawyers, in both
litigation and transactional contexts, as directly impacting the perceived deterioration in the level
of professionalism in the legal community. The contrary view can be found in suggestions that
vigorous and effective representation of the client is a lawyer’s primary professional obligation
and that public perceptions may, perhaps unavoidably, misunderstand this aspect of our
adversary system. As is often the case, while there is considerable scholarly commentary as to
these competing concerns in a litigation context, there is much less available that is applicable to
a transactional setting. With this in mind, consider the following hypothetical.

                                    II.         Hypothetical Facts

       You are representing an important client in a complicated real estate partnership and
financing transaction. The opposing party in the transaction is represented by an attorney with
whom your principal client contact has negotiated previous transactions in an exceedingly
acrimonious and adversarial context. Your client states that his experience with the opposing
counsel, who is relatively younger and less experienced, leads him to believe that your
counterpart’s effectiveness can be seriously impaired if you undertake an extremely aggressive
and antagonistic negotiating demeanor and style. How do you deal with each of the following
circumstances:

         A.     Your client instructs you to be as difficult and unpleasant as possible in all aspects
of the transactional negotiation.

       B.     You discover in your own dealings with opposing counsel that an intimidating
and unpleasant demeanor is in fact quite effective in negotiating strikingly favorable contractual
provisions.

       C.      Does it make a difference that in other contexts your opposing counsel or his/her
law firm has a reputation for exploiting similar advantages in comparable circumstances?

                                           III.      Resources

A.     Applicable Rules

       1.      Disciplinary Rule 7 to the 1969 ABA Code of Professional Responsibility
provides that:

               ―A lawyer should represent a client zealously within the bounds of
               the law.‖




                                                     16
       2.      The more recent ABA Model Rules of Professional Conduct, Rule 1.3, on the
other hand, do not make reference to zealous representation, but instead provides, simply, that:

              ―A lawyer shall act with reasonable diligence and promptness in
              representing a client.‖

              Comment [1] to Rule 1.3 provides that a lawyer should:

              ―take whatever measures are required to vindicate a client’s cause
              or endeavor. A lawyer must also act with commitment and
              dedication to the interests of the client and with zeal on the client’s
              behalf. A lawyer is not bound, however, to press for every
              advantage that might be realized for a client.‖

The Preamble of the Model Rules includes among the lawyers’ responsibilities the following
mandates:

              ―[5] . . . A lawyer should use the law’s procedures only for
              legitimate purposes and not to harass or intimidate others.

              [8] . . . when an opposing party is well represented, a lawyer can be
              a zealous advocate on behalf of a client and at the same time
              assume that justice is being done.‖

In a possible attempt to reconcile these concepts, the Preamble to the Model Rules also provides
that:

              ―[9] . . . These principles include the lawyers’ obligation zealously
              to protect and pursue a client’s legitimate interests, within the
              bounds of the law, while maintaining a professional, courteous and
              civil attitude toward all persons in the legal system.‖

Commentary on the ABA Code of Professional Conduct and the more recent Model Rules has
debated the significance of the omission of ―zealously‖ from the later and the meaning of the
Preamble’s mandates.

       3.     The ACREL Statement of Professionalism includes the following provisions:

              “Commitment to Integrity and Civility.

                      ...

                     Members must scrupulously honor commitments made and extend civility
                      and courtesy to all persons.

                     Members should advise clients that civility and courtesy are not to be
                      equated with weakness but are consistent with vigorous advocacy and
                      zealous representation.


                                                17
                     In the conduct of negotiations, Members should conduct themselves with
                      dignity and fairness and refrain from conduct meant to harass or annoy the
                      opposing party.

                     Members should (a) in pursuing the objectives of the client act in the best
                      interests of the client but at all times in a professional manner consistent
                      with this Statement, (b) conduct civil, honest and open negotiations, (c)
                      draft understandable documents consistent with the understandings of the
                      parties, and (d) disclose to the other party obvious drafting errors
                      inconsistent with those understandings.

                     Members will clearly identify, for other counsel or parties, all changes and
                      revisions made to documents.‖

B.     Civility versus “Warm Zeal”

       1.     Prima Facie Concepts of Civility

                Allen Harris, in ―The Professionalism Crisis: The ―Z‖ Words and Other Rambo
Tactics‖, identifies the following constituent elements of ―civility‖:

              ―Civility is courtesy, dignity, decency and kindness . . . Courtesy is
              neither a relic of the past or a sign of less than fully committed
              advocacy. . . . Civility is not inconsistent with zealous advocacy.
              You can be civil while you’re upset, angry and intimidating;
              you’re just not allowed to be rude. Unfortunately, some lawyers
              and the public don’t understand the difference.‖ [Harris, Part 1 at
              p. 4.]

       2.     ―Warm Zeal‖ as a Standard.

                 Some commentators argue that excessive concern about professional values of
civility may jeopardize the fundamental obligation of representing the client’s interests.
Responding to Harris’ (see above) argument that zeal is incompatible with reasonableness [and
civility], William Wernz argues:

              ―Has incivility so dominated today’s thinking that zeal should now
              be regarded as ―unprofessional or unethical?‖ . . . Admittedly,
              there is tension between civility and reasonableness on the one
              hand, and zeal on the other, just as zeal is also in tension with a
              lawyer’s duty as an officer of the court. However, this tension is
              central to the advocate’s role in our legal tradition. A client,
              especially a client who as one of society’s outsiders may well
              suspect that his counsel does not have his interests sufficiently at
              heart, needs an advocate who is zealous, not merely diligent.‖
              [emphasis in original] [Wernz at p. 6.]

Wernz does identify boundaries to uncivil behavior:


                                               18
              ―Gratuitous offensiveness and zealotry (which is zeal unrestrained
              as to manner and degree) have no place in lawyering. However,
              zeal, unlike zealotry, is restrained by the client’s purposes, by the
              law including professional rules, and by the lawyer’s professional
              and personal unwillingness to cause harm, except when harm is
              necessary for the client’s legitimate purposes.‖ [emphasis in
              original] [Wernz at p. 7]

C.     Practical Considerations

       Several commentators have noted the importance of civility to an efficient and well-
respected legal process. The following statement, while focused on the court system, can be
viewed as equally relevant to the transactional context:

              ―Polarization of lawyers and parties resulting from uncivil conduct
              frequently creates an unfortunate outcome for all concerned.
              Civility with the fellow lawyer lies in the public interest because of
              the likelihood of quicker resolution of disputes with better results.
              Long experience teaches that undue aggressiveness leads to the
              kind of polarization which often prevents settlement or at least
              deters more efficient resolution of contested disputes. This even
              impacts on the public interest because of the increased financial
              burden on the judicial system. [Harris, Part 2 at p. 10.]‖

       Others have noted that professional reputations may well depend on the degree of
cooperativeness and civility manifested by individual practitioners:

              ―An attorney who consistently demonstrates civility in dealings
              with opposing counsel enhances his or her reputation and promotes
              good business practices. An attorney’s reputation in the profession
              is extremely important throughout his or her practice. . . .
              ―Burning bridges‖ with opposing counsel may easily backfire later
              in the same case or in a subsequent matter. On the other hand, if
              attorneys consistently treat opposing counsel with civility, their
              communication tends to be better. It becomes more likely that they
              can work out problems in a case and that the atmosphere will be
              more conducive to settlement discussions.‖ [State Bar of Arizona,
              Instructor’s Manual for Professionalism Course, May 23, 2003.]

                                IV.     Relevant Commentary

"The Professionalism Crises – The 'z' Words and other Rambo Tactics: The Conference of Chief
Judges Solution," Allen K. Harris, The Professional Lawyer (Winter, Spring 2001)

―Does Professionalism Literature Idealize the Past and Over-Rate Civility? Is Zeal a Vice or a
Cardinal Virtue?‖, William J. Wernz, The Professional Lawyer (Fall, 2001)




                                               19
"A Dissenter's Commentary on the Professionalism Crusade," Rob Atkinson, 74 Tex. L. Rev.
259 (1995)




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