Professional Responsibility Exam Outline 2006 (MN)

Professional Responsibility Final Exam Study Notes 

Reckless Lawyering: the conversion of innocent acts to guilty ones by the addition of improper intent Improper intent can make an act of ordinary o lawyering a crime of civil or criminal fraud Reckless Closing your eyes when you a duty to see o o helping the fraud w/o knowing because you should have known stating of facts of which you are ignorant o Reckless vs. Ignorant Once it becomes hard to believe that any half way o competent lawyer would have failed to recognizes the fraud  reckless In a civil action for fraud  the ∏ has to show that recklessness (intent) was beyond reasonable doubt •

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Model Rule 1.13   

a lawyer for an org. represents the org and not its constituents the lawyer has a duty to the entity and not the management lawyer doesn’t need an exception to the duty of confidentiality to report misconduct w/in the client organization

Model Rule (b) – original version  if a lawyer knows that an officer in engaged in action, that is against the best interest of the org then the lawyer has ha s to act reasonably  the lawyer doesn’t need to take any action that is not “ a matter related to the representation”  in injury that triggers … “likely to result in substantial injury to the org”, is when the lawyer has to react  if a lawyer knows of ongoing or future that IS a violation then the lawyer is liable malpractice if  he fails to take steps to protect o the corporate client from violations even if the lawyer doesn’t know of the illegality the law of fraud/aiding and abetting/ allows liability to attach to reckless o conduct which doesn’t require a lawyer to “know” of illegality What should you do in this type of situation?  ask wayward manager to reconsider nd  recommend 2 opinion  referral to higher authority

Donated by Marvie Nickola

PR Exam Outline 2006

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Reckless conduct: Unreasonable omission; extreme departure from reasonable care  o presents a danger of misleading buyers and sellers that is know or actor should have known “a lesser form of intent rather then a greater degree of negligence” o Aiding and abetting: The existence of an independent primary wrong o Knowledge by the alleged aider/ abetter of the wrong and his role in o furthering it Substantial assistance in the wrong o

Jones Day Case:  lawyer must withdraw if “representation with result in a violation of rules of professional conduct or law”  clients wrong doing cant negate attorneys fiduciary duty Kaye Scholer Mater:  MR 4.1(a): a lawyer must be truthful when dealing de aling with a 3rd person statements or  MR 1.16(a): a lawyer must resign rather then make misleading statements engage in illegal conduct Federal Deposit Insurance Corp.:  A lawyer has a duty not to be negligent and has a duty to protect in everyway possible Klein v. Boyd  if you find out that your services have been used to commit fraud, you can disclose or withdraw  you don’t owe a duty until you decide to speak, once you speak you cant omit facts  you can be held liable for the person knows that the statement will be relied upon by investors o the person is aware of the omission o the person played a role in the creation of the statement o the other requirements of primary liability are satisfied o

Attorney Client Privilege   

protects communications between attorney/ client for professional advice



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in confidence o the purpose of full disclosure it protects unconsummated relationships with other attorney’s o also protects communications to agents and attorneys o o privilege can be waived by the client  exceptions to the privilege it only protects communication, not facts facts exist outside communication it doesn’t protect documents • • •

Up John Case:  control group test: the attorney client in only for upper level employee’s  Upjohn test: Communication o  Made by employee’s  To counsel to Upjohn  Acting as attorney’s  Communications were made my executive order  For legal advice Does privilege apply to former employees? o  No because they are no longer agents of organization A/C can be waived by: o  Upper management  New management that takes over A lawyer has a duty to shat that he represents the corporation and not the o individual  This puts the individual on notice Perspective clients have privilege o

Ex: IRS serves employee subpoena about payments, can employee assert A/C?  NO! you cant assert A/C on under lying facts

Work Product:  These are docs prepared in anticipation of litigation  Applies only to docs  There is a crime fraud exception to the Work Product rule Fisher v. US:  Lawyer refused to turn over docs  Court said that turning over docs is not self incrimination  Only testimony is protected  If the production itself is incriminating, then there is protection… but production itself is not incrimination



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Ex: Is a tape recording privileged?  No, because its not communication between an attorney and client

Hubbell Case: Test: if government could establish that it knew about the existence of docs, the act of production is not to be qualified as compelling the client to incriminate themselves 

S.Ct held that immunity extended to the docs content in this case

Boyd case: th th  Suggests that 4 and 5 amendment protects private papers 

“entity exception”: self incrimination privilege is not available to a corp./union/ partnership

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“required records”: requiring a person to keep records and having those records available doesn’t violate self incrimination clause

In re Columbia/HCA Healthcare corp. Billing Practices Litigation Dis Ct said waived privilege with docs because gave them to other agency Investigating for possible Medicare and Medicaid Fraud Columbia did audits to find out. During change of management they settled with the Gov and gave over documents with agreement that it does not constitute as a waiver of any applicable privilege or work product. Private payers sought these Docs and Columbia refused. Attorney Client privilege determined 3 types of possible outcome for waiver 1. No selective waiver – cant pick and chose among his opponents, waiving the privilege as to some and resurrecting the claim of confidentiality to obstruct others or to invoke the privilege as to communications whose confidentiality he has already compromised for his own benefit 2. Selective Waiver in all Situations – discloser to government agencies (typically SEC in voluntary disclosure program situation) do not waive the protections of A-C-P 3. Some Selective Waiver - one ct said disclosure to the SEC should be deemed to be complete waiver of the ACP unless the right to assert the privilege in subsequent proceedings is specifically reserved at the time the discloser is made. Here the Ct REJECTED any concept of selective waiver • • • •

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ACP designed to protect against communications between A and C not between A and Gov If client gives away this privilege then it is by his consent and no longer exists Gov should try to bring in light illegal activities and not to assist wrongdoers by allowing the info to stay privileged There is not different between work product and ACP

Dissent

Attorney Client Privilege Designed for open line of communication Can reduce amount of info discoverable in a lawsuit Ought not have the ability to select among their opponents Waived to all if discloses privilege to 3 rd party and waiver covers not just the documents disclosed but all privileged doc Gov has finite litigative resources and no individual monetary state in the outcome and the Gov starts out at a disadvantage to private π given the procedural protections afforded criminal Δ such as higher burden of proof and privilege against self-incrimination Would make the exception apply to all the disclosures to the Gov Would be difficult to remove disincentive to cooperate with Gov if protection from waiver depended on the circuit where litigation took place Also thinks work product to follow suit and not be waived if gave to GOV • • • •

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The state of Play on Selective Waiver White collar defense A, reg A, corporations and Gov support idea of selective • waiver Privilege once waived is waived.

Privileged Discloser If disclosure of information protected by ACP takes place in a communication • that is itself covered by a privilege there is no waiver – Example A seeks help on a case and asked another A what to do. Settlement. – only applies to parties. Disclosure to third parties isn’t protected. Many cautious a preface any damaging disclosure in negotiations or plea • bargaining b stating that the statement is made “without prejudice” or make the admission in a hypothetical form The Scope of the Waiver Subject matter waiver – if at trial client says “my A said X to me about Y” the she • has waived privilege to X and Y Cant waive privilege to introduce favorable material while simultaneously • invoking the privilege on the same subject matter to hide unfavorable material



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In re Von Burlow Disclosures made in public rather than court-even if selective- create no risk of legal prejudice until put at issue in the litigation by the privilege-holder. Waiver by Putting – in – Issue ACP is waived for relevant info if client files claims against A for malpractice • ACP can also be waived for self-defense of A if Gov files claim against for • example of aiding and abetting Inadvertent Disclosure Restatement §79 • Its effective as disclosure – the privilege is deemed to be waived. • Most inadvertent disclosure is same as intentional but some courts distinguish • Professional Duty of Confidentiality Broader than A-C privilege. • Privilege is not testifying but Confidentiality is the everyday event of not saying • anything in public Agent has a duty to the principal not to use or to communicate information • confidentially given him by the principal or acquired by him during the course of or on account of his agency M.R. 1.6 • Scope of Confidentiality Model Rule 1.6 (a) – protects all information relating to the representation whether the lawyer • learned the information before during or after the representation. Applies to whether or not disclosure would harm or embarrass the client • Limited by • 1. permits to reveal confidential info when disclosure is impliedly authorize to carries out the representation 2. customary practice of lawyers recognizes some disclosures no mentioned in the rule. It survives even the death of the client • Allows disclosure if client consents • MR 1.18 includes even the introductory consultation – has to do with perspective • clients.

If you breach your duty of confidentiality 1. grievances 2. sued for malpractice 3. criminally prosecuted



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Using as Opposed to Revealing Client Info MR 1.8 prohibits using confidential info concerning a present client to the • disadvantage of that client without the clients informant consent MR 1.9c1 – prohibits using confidential info of a former client to that clients • disadvantage until info becomes generally known

Public Available info as confidential info. Confidence applies even if info known to public • Exceptions to Confidentiality 1. protection of lawyer threatened by a acclaim or charge brought by the client or a 3rd person 2. Protection of innocent 3rd arty who ware being or may be victimized by the client. 3. preventions or rectification of fraud on the tribunal

Self defense exception – not an exception to privilege, but only confidentiality. 1. when a client charges a lawyer with wrongdoing in the coarse or representation 2. when a lawyer sues the client to enforce some duty owed the lawyer such as fee 3. when a 3rd person accuses a lawyer of wrongdoing in the course of representing a client perhaps in complicity with the client lawyers right to respond arises when an assertion of such complicity has been made. A does not have to wait until the action takes place. •

Meyerhofer v Empire Fire and Marine Ins Co • Associate Goldberg warned firm about lack of disclosure in securities prospectus for client Empire. Firm refused to disclose so Goldberg resigned and disclosed to the SEC. • Information later became public and plaintiffs filed suit against Empire, the law firm, and Goldberg. • Goldberg revealed his SEC affidavit to class action lawyers to convince them to dismiss suit against him personally • Defendants moved to disqualify class action lawyers because they were “tainted” by receipt of confidential Empire information. • Second Circuit held that Goldberg “had the right to make an appropriate disclosure with respect to his role in the public offering,” in light of being charged with a serious securities law violation in a civil action. 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



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Meyerhofer v. Empire Fire and Marine Insurance Co . (Goldberg ) 1) scope of self-defense exception a) client v. lawyer in wrongdoing (waiver) b) lawyer v. client (fees) c) 3rd person accuses lawyer of wrongdoing (lawyer must defend himself in this case). 2) Should Goldberg have behaved differently (model rules) 3) Conflict of Interest and Disqualification

Here, confidentiality, not ACP because nobody demanding evidence. Confidentiality out the window once self-defense at issue. MR note – legal action need not be actually initiated. Material information about lawyer fees ($200,000) for underwriting. Goldberg worked at Sitomer, he’s named by the Bernson firm. He said that he had nothing to do with the issue, and in fact resigned over it. ACP is a part of Evidence. Confidentiality has to do with Agency. Privilege can’t be asserted proactively, so there has to be a demand for evidence and not resisting production. Confidentiality does not require this. This is the initiation of the fee arrangement is the lawfirm’s, not Empire’s. Goldberg was clearly accused of wrongdoing (so the self-defense exception triggered). The charge was serious career-wise, financially. But why can he turn over all that information (affidavit incl). Court is reversing the order of the firm’s disqualification because once it falls into the exception, there’s no way it’s confidential – it’s gone once the exception is invoked. Goldberg is disqualified not necessarily because he has confidential information, but appearance of impropriety, BUT BECAUSE OF A CONFLICT OF INTEREST – DISLOYALTY of switching sides. If he’s just a witness, he is under the guise of the court. Should Goldberg have gone to the SEC? Duty of lawyer when he thinks that corporation is going to engage in illegal conduct. Could: 1) Out the client 2) Confront corporation – Rule 1.13 – gone higher up in the corporation 3) go to SEC to get law enforced Goldberg did right thing, but no basis within the attorney’s ethics codes. Securities law relieves him here. Meyerhofer 1. Why duty of confidentiality (not ACP) – confidentiality is broader. 2. Scope of self-defense exception 3. Disclosure to SEC did not prompt suit (10-K filing did) Disclosures precede any accusations against Goldberg - NY followed DR 4-101 (c) (3) future crime? “necessary” to prevent mens rea? • •



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Beiny v Wynyard – Wall St firm procured ACP docs through deception held that the evidence so procured should be suppressed and the firm disqualified.

3. Client Fraud

In 2003, the ABA amended its confidentiality rule on disclosing client fraud to give lawyers considerable discretion to disclose, which eliminated a central source of confusion. O.P.M – A Case Study O.P.M (Other People’s Money) was created by Goodman and Weissman in 1970 to purchase main-frame computers from venders and lease them to businesses. Banks, insurance companies and other financial institutions would lend OPM $ to purchase the computers. The loans were secured by the leases. (The plan was that the leases would generate enough money to repay the loans and leave OPM with profit) The company was a force in the computer leasing market because it slashed its prices. The result was the lease payments it was due were too low to pay back the loans. OPM appeared legitimately successful, but only bc Goodman and Weissman resorted to fraud. A single computer would be used as collateral for 2 or 3 loans with different banks; the value of computers and leases would be inflated to obtain larger loans. It was a continuing cycle. They would take out money to pay off loans and then need more loans to pay off the next loans and so on. Vicious circle. Throughout the decade OPM operated, it used the legal services of Singer Hutner. It documented and closed lease transactions and provided legal opinions to the lenders concerning the existence and security of the loans. By 1979, SH had indications that G and W were capable of serious illegality. In June 1980 the law firm received a letter from Clifton, who had just resigned as OPM’s financial officer. June 12, 1980, the letter was delivered to the desk of Reinhard, a partner at SH. Supposedly Goodman somehow managed to retrieve Clifford’s letter before Reinhard read it. Goodman left the firm and admitted that he was responsible for a wrong that he could not set right due to the amount. SH hired McLaughlin and Putzel as ethics experts. They said that bc the frauds were in the past, NY Code of Prof Respon prohibited SH from disclosing the past fraud. They also said the firm did not need to withdraw •

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from the representation or disaffirm its prior opinions. It also said that SH could continue closing OPM lease transactions while it sought details of past wrong, if G provided the firm with a certificate in writing verifying the legitimacy of each new transaction. The firm continued to close more OPM fraudulent leases with “written verifications”. SH decided to withdraw gradually asking for its fees up front, but not disclosing the ongoing fraud. In 1981, a lawyer for a St. Paul lender noticed that insurance on a leased computer was being paid by OPM even though the docs provided that Rockwell would pay the insurance. He called Rockwell’s counsel letting the parties know that their contract should be changed to reflect this change in practice. The contract didn’t exist. A report to the US Attorney’s office in NY City was filed and G and W were arrested. The fraud was all disclosed. SH would up settling civil claims against it for $10 million. None of the lawyers was prosecuted or publicly disciplined.

- In August 2003, M.R. 1.6 was amended to allow disclosure of client confidences to the extent reasonably necessary: (b)(2) to prevent the client from committing a crime or fraud that is reasonably certain to result in substantial injury to the financial interests or property of another and in furtherance of which the client has used or is using the lawyer’s services; AND (b)(3) to prevent, mitigate or rectify substantial injury to the financial interest for property of another that is reasonably certain to result or has resulted from client’ omission of a crime or fraud in furtherance of which the client has used the lawyer’s services.

Required Disclosure of Client Fraud Under M.R. 4.1 In the course of representing a client a lawyer shall not knowingly: (a) make a false statement of material fact or law to a third person; OR (b) fail to disclose a material fact when disclosure is necessary to avoid assisting a criminal act by a client, unless disclosure is prohibited by Rule 1.6 4. Confidentiality When Death or Bodily Harm May Result

Model Rule 1.6(b)(1) – a lawyer may reveal information to the extent the lawyer reasonably believes necessary: 1. to prevent reasonably certain death or substantial bodily harm. State v. Macumber – a lawyer reported to public officials that his client, now deceased, had confessed to a crime for which another person had been prosecuted and convicted. The disclosure was ethically permissible on the basis of a state ethics opinion. The prosecutors did not credit the lawyer’s report. The deceased client’s communication



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was ruled inadmissible in a subsequent hearing challenging the allegedly wrongful conviction; the client’s A-C privilege survived his death.

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Balla v. Gambro, Inc. Issue: whether in-house counsel should be allowed the remedy of an action for retaliatory discharge. NO Balla alleged that he was fired in a contravention of Ill public policy and sought damages for the discharge. Trial ct dismissed the action and appellate ct reversed. Leave to appeal was granted. Gambro distributes kidney dialysis equipment made by Gambro Germany. This manufacture and sale is regulated by the FDA. Balla was Gambro’s general counsel and manager of Regulatory Affairs. In July 1985, Gambro Germany informed Gambro in a letter that certain dialyzers were not up to specifications. Balla told the pres of Gambro to reject the shipment bc the dialyzers were not up to FDA regulations. The Pres did not take this advice and accepted the order with the plan to sell them. Balla told the pres that he would do whatever was necessary to stop the sale of the dialyzers. September 4, 1985, Balla was discharged from Gambro, and Balla then reported the dialyzers to the FDA. March 19, 1986, Balla filed a 4-count complaint in tort for retaliatory discharge seeking $22 million in damages. court found that generally, in-house counsel do not have a claim under the tort of retaliatory discharge. Bella had no choice but to report the intent to sell the bad dialyzers to protect public policy. to allow this tort, employers might be less willing to be forthright and candid with their in-house counsel. Bella could have withdrawn from representing Gambro if continued representation would result in the Rules violation. In-house counsel shouldn’t be able to sue their employers for damages because they obeyed their ethical obligations. It would be inappropriate for the employer to bear the economic costs and burdens of their in-house counsel’s adhering to their ethical obligations under the Rules of Prof Conduct. All Attys should know that at a certain time in their professional career that they will have to forgo economic gains in order to protect the integrity of the legal profession. The appellate court is reversed and the trial court is affirmed. – Gambro D Dissent – majority ignores reality. There should be incentives for attorneys to do the right thing. To allow a corp employer to discharge its in-house counsel without fear of any sanction, is truly to give the assistance and protection of the courts to scoundrels. Considering he was discharged and will face stigma in the profession, he should be compensated with a claim for retaliatory discharge.



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Confidentiality and Retaliatory Discharge Claims

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Stewart Stewart – well-liked general counsel for GTE’s lighting business. S wrote corporate officers a series of memos regarding 3 GTE products that were unsafe telling of potential liability. Shortly thereafter Stewart’s supervisor Trevisan, lowered Stewart’s performance rating drastically and said Stewart’s “confrontational” style and that Stewart should stop being the “social conscience” of the company. Stewart resigned, and Trevisan tried to persuade him to return. the court said that retaliatory discharge claims by in-house co unsel would be recognized only in a limited set of circumstances. Here, those circumstances were limited to those that could “be proved without any violation of the attorney’s obligation to respect client confidences and secrets. Held that Steward had not established the elements of “constructive discharge.” The single unfavorable performance review was not sufficient to establish, as required by the law of constructive discharge.

Subsequent Cases on Retaliatory Discharge

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General Dynamics Corp. v. Superior Court P, Rose worked as A for Gen Dy for 14 years. He alleged that he was fired in retaliation for his unwelcome legal advice on several matters, including drug use in the co and unlawful pay practices. Cal Sup Ct held that there is no valid reason why an in-house A should not be permitted to pursue a lack of good cause K claim in the same way as the nonA employee. it approved the maintenance of only those claims that could be established without breaching the A-C privilege or unduly endangering the values lying at the heart of the professional relationship.

Hawkins: rejecting a General Duty to Warn About Dangerous Clients Hawkins v. King County A Sanders’s client Hawkins was arrested on minor drug charge and wanted to be released on bail prior to trial. Hawkins’s mother wanted him committed bc she believed he was mentally ill and a danger to himself and others. His mother’s lawyer told this to Sanders as did a psychiatrist. At the bail hearing, Sanders, following his client’s wishes, did not volunteer the information regarding his potential illness and danger to the judge, and the judge did not ask about it. 8 days after Hawkins’s release, he assaulted his mother and attempted suicide. •

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Hawkins’s guardian and his mother filed suit against Sanders and the mental hospital where Hawkins had previously been treated. Trial ct granted SJ for Sanders and an appeal followed. On appeal, Mother argued lawyer had a duty to tell ct about his client’s mental state  malpractice. Also argued the lawyer had a CL duty to warn foreseeable victims of his client’s danger to them and to himself. The first claim was rejected and the second considered. Court found no duty befell Sanders to warn the mother of a risk of which she was already fully aware of. Sanders had no information that Hawkins planned to assault anyone. Therefore D Sanders wins.

Protecting the Judiciary From Dangerous Clients Washington v. Hansen appeal of a criminal conviction for threatening a judge. A told the judge of the threat ct held that when the accused told the A of the threat, there was no A-C privilege due to no A-C relationship. Ct treated the threat as within the duty of confidentiality, requiring an exception to justify the A’s our-of-court disclosure of the threat to the judge. Held: that the out-of-court disclosure was not only permissible but was required. As officers of the court have a duty to warn of true threats to harm a judge made by a client or 3rd party when the A has a reasonable belief that such threats are real. • • •

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Protecting the Public From Dangerous Whistleblowers In re Schafer High ct of Wash. Disciplined A Schafer, meting out a 6 month suspension for disclosing client confidences that exposed a corrupt judge. Client Hamilton retained Schafer to form a corp to purchase property from an estate. Hamilton told Schafer that the guardian of the estate, Anderson, had been “milking” the estate for 4 years and that Anderson was about to become a judge and needed to close out the sale of the estate property before assuming the bench. Hamilton also told Schafer that Anderson was giving him a good deal and that Hamilton would repay Anderson “down the road.” Schafer said he didn’t want to hear anymore about his and formed the corp for Hamilton, which then bought the property. 3 years passed. Anderson, now a judge, ruled that a petition filed by Schafer for client Barovic was frivolous and ordered Barovic to pay $1000 in A fees. Schafer found out that Hamilton helped finance the judge’s car, suggesting payback for the cheap price Anderson gave Hamilton on the estate property. •

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Hamilton got a lawyer who repeatedly warned Schafer not to disclose Hamilton’s confidences in Schafer’s pursuit of “dirt” on the judge. Feb 1996 Schafer disclosed info to state and fed investigators about Anderson. He continued to disclose this info gained from Hamilton, and eventually disclosed to the press. Hamilton then filed a grievance against Schafer, and Anderson was removed from the bench before the grievance was heard. Ct rejected all Schafer’s justifications for disclosing Hamilton’s confidence. Ct said he was motivated by Anderson’s ruling against Barovic, and that he waited too long to act. Ct frowned on disloyalty on the part of the lawyer to his client. In all things he must be true to that trust, or, failing it, he must leave the profession.

Cuyler v. Sullivan: 

Issues: at what point does conflict deprive a client of a right? o FRCP requires investigation for C of I in criminal actions o Court should only look for C of I on its own when:  Co-∆ are tired together or separately  Defense counsel for all the ∆’s is the same  And when tactical decisions indicate questions should be asked Holding: Test for C of I  Must prove conflict and that conflict adversely affected the client

Conflict of Interest Rules:         

1.7  general conflict 1.8  prohibited A/C 1.9  former client 1.10  imputed disqualification 1.11  lawyer for the government 1.12  former arbitrators 1.13  organization 1.18  perspective clients 3.7  witness in client cases

C of I: 2 adverse affects on the client 1. Erodes clients interest and trust 2. reduction in quality of representation



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Duties with C of I: 1. Duty of loyalty 2. duty of confidentiality Conflict rules: 1. to protect confidences 2. to ensure loyalty 3. to ensure the integrity of the process Reasons to permit representation in conflict to interest cases: 1. w/ large firms it allows lawyers to move from firm to firm 2. small cities they aren’t enough lawyers to go around 3. allows people to have the representation of their choice 4. less costly to have one attorney 5. tactical use of disqualification

Why do people engage in C of I? 1. greed  “breaking up is hard to do”; you don’t want to send your clients away 2. sometimes lawyers don’t know about the conflict Conflicts fall into 3 categories: 1. lawyer/client MR 1.8 2. client/client a. current representation  1.7 b. successive representation  1.9 c. Client/ 3rd party  MR 1.7 Concurrent Representation Issues: 1. degree of adversity  1.7 (a) 2. affect on quality of representation a. material limitations 1.7 (b) 3. degree of legal relationship of conflict  1.7(b)

Simultaneous representation: client  client conflict Present client  direct adversity  indirect adversity

Steps to Resolve and questions to ask: 1. ID the lawyer client relationship a. Is this my client?



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b. Is this a quasi client? c. Did I imply that this is my client? 2. Is there a 1.7 conflict? 3. is there is a conflict, is it a consentable conflict? 4. you must then get INFORMED Consent from all involved

Step 1 Expanded:  Is this person my client? Is it an organization or person? o Who do you represent? o Test: this is an objective standard. Was it reasonable for the client to o believe you were representing them? If yes, then she is your client  Ex: Upjohn: Is there documentation to support existence of the • relationship? Is there a retainer fee? • Who is paying for your services? • Whose confidential information is submitted? • Is the client current or former? o  Are you still getting payment?  Is the case settled?  What’s the time lapse? Step 2 Expanded:  Is there a conflict? 1.7 (a) (1); is there direct adversity? o 1.7(a) (2); are you materially limited? o For current clients, you have to look at all of rule 1.7 o Are the ∏ and the ∆ both your clients? o Are they opposing parties? o Is there an indirect interest conflict? o  Material Limited: Is there a concern for one client that makes you do less for • another client? There must be a SIGNIFICATN RISK • The limitation must be a REAL MATERIAL BREACH  • objective test  Concurrent Representation: If they are not related materials, there can still be a C of I • Examples of Common conflicts: o  Being paid by someone else other then the client  Working for an organization



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 

Multiple parties in a single transaction Lawyers personal conflicts

Step 3 Expanded:  Is the conflict waivable? MR 1.7(b) Can you get informed consent or a waiver? o  You can of the affect is minimal, and competent representation is still possible  MR 1.7(b) A lawyer reasonably believes that • Test: a disinterested lawyer would conclude that o affected clients would be adversely affected Informed consent must be given in writing (in MI only in • the case of a business conflict) Representation prohibited by law • Representation doesn’t involve assertion of claim by one • client against another

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Examples of direct conflicts include:  Co-parties in a capital or death penalty case  Criminal conflicts  Inconsistency issues in a criminal case  Civil cases  Is there a cross claim?  Does discrepancy exist?  Positions of clients are comparable?  Does the decisions you make for one client affect the other client Even if you get consent you o still have to be careful, its not advisable, its still a direct conflict Consent has to come from o both clients Examples of non litigants conflicts  Cant negotiation K’s between current conflicts  Seller/buyer = direct adversity  You can possibly represent competitors in the same industry, unless they are competitors in the same product and or unless the relationship is not amiable


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What kind of representations are materially limiting?  Is advice to one client limited by loyalty to another  Is there an option you could have given the client and because of loyalty to the other, you cant… this is an act of omission 

Business Deals: If the interests of both parties are aligned then there is o no conflict MR 1.7 (28) o  If the interests are aligned, then its ok  If interests are not aligned, then its not ok

MR 2.4  Lawyer serving as 3rd party neutral rd  Can serve as 3 party when neither of the people are the clients  If acting as mediator you must make it clear that you aren’t the lawyer and explain your role  If party wants you to be their lawyer after mediation, you need to get CONSENT from each client from the mediation process Rule 1.18(a) Perspective Clients: 1. current clients interests must be in the same relationship w/ prospective clients 2. did all the clients give informed consent? a. Lawyer has to initiate the discussion of consent not the client In a letter for consent:       

Describe the conflict nature ID what would have if the agreement goes sour Explain the advantage to common representation Explain the possible negotiation strategies Explain possible affects on personal judgment Provide alternative courses of action Explain impact of personal information

Revocation of Consent:  Explain what can happen  Advise to get separate counsel Test: If a disinterested lawyer says that there shouldn’t be consent, then its not a option; seek consent when the conflict arises



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Perspective Waivers:  Signed as soon as you come in  Ct held that valid in only a small amount of cases  Cant get client to do this to waive confidentiality If there is a conflict:  Decline representation from the beginning  w/draw representation if you have already started C of I are raised:  in litigation  during grievances  motions to disqualify

MR 1.7 and MR 1.9 Former Clients MR 1.9:  who is the client?  Is there a conflict?  Do you have consent? Test to determine if consent or final client: Its an objective test based on totality of circumstances, and also based on the clients belief MR 1.9: Former Client Rule  Is new client matter the same of similar to former client, Are they adverse?  Do you have information that would be adverse to the new client  Irrebuttable presumption: former client shared information with new lawyer?  Substantially Related test: If yes, then C of I exists Legal issues o Factual issues o Exceptions to MR 1.9: see comments and definitions sections for substantially related, and materially adverse

MR 1.10 Imputed disqualification

Relationship w/ another attorney



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General Rule:  If one attorney of a firm is disqualified the whole firm is  In MI, if you are imputed disqualification via a personal interest, then the whole firm is NOT disqualified o Exceptions: screening and Chinese wall, you don’t need consent Moving Lawyers: 1.9(b) & 1.10 (a)  Disqualification ends when you get consent  Family relation  requires full consent from both parties

Exceptions to 1.11:  Disqualification must be screened  No part of the fee must be taken  Written notice to each applicant  In ct, parties and tribunal must be notified Screening:  To protect information for new lawyers

Elements of effective Screening:  Email/ conflicts check  Walls put up if there is a conflict o No access to files  Instruct other staff about screening  Notify clients  Segregate feeds from rep.  IN MI, notice to tribunal is required If you do all this and there is still a conflict then you must resign o To determine if a firm is disqualified, this is a question of fact o

When there is a fraud or crime

4 R’s 1. remonstrate: talk to client 2. rectify: recant 3. resign: withdraw 4. reveal: disclose



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Rule 11:  Objective standard or reasonableness  Depends on the circumstances o Knowingly unmeritorious claim, if you continually are filing bad claims you can be sanctioned under rule 11 Rule 11(c)(1)(a)  safe harbor provisions o Rule 11(c)(1)(1)  sua sponte of court o Rule 11 (b)(3)  discovery procedure o Rule 11 (b)  continuing practice o o Attorney fees can be awarded when motion is filed by the other side for deference You must only file good faith claims o



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Professional Responsibility Exam Outline 2006 (MN)

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