(4) Professional Responsibility: Duty to Clients Flashcards
Duty of Competence
A lawyer owes his client the duty of competence which requires them to possess the legal knowledge, skills, preparation and thoroughness necessary to effectively represent the client.
Gain Competence Rule
Duty of Competence
A lawyer can gain competence by (a) associating with another lawyer reasonably believed to be competent; OR (b) acquiring sufficient learning and skill before performance is required.
Emergency Rule
Duty of Competence
A lawyer may give advice or assistance (even without the skill ordinarily required) where referral/consultation/association with another lawyer would be impractical.
Discipline for Incompetence
Duty of Competence
Incompetence exposes a lawyer to (1) discipline by the bar; (2) disqualification of the lawyer from a litigation matter; AND/OR (3) a civil malpractice lawsuit.
In CA how is a lawyer subject to discipline?
Duty of Competence
In CA: A lawyer is only subject to discipline if they intentionally, recklessly, act with gross negligence, or repeatedly fail to perform legal services with competence.
FRE vs CA Rule:
Does a lawyer need to stay up to date with the changing laws?
Duty of Competence
In CA: A lawyer has a duty to keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology.
Federally: A lawyer should keep abreast of changes in the law and its practice to maintain their requisite knowledge and skill.
Rule:
Duty of Communication
A lawyer must keep a client reasonably informed about any significant developments relating to the representation. All settlement offers must be conveyed to the client.
What communications are included in a Lawyers Duty to Communicate
(1) promptly informing the client of any situation where their informed consent is required; (2) keeping the client reasonably informed on the status of the matter; (3) promptly complying with requests for information (i.e., phone calls, inquiries, etc.); (4) consulting with the client about strategy decisions and any matters requiring the client’s consent; (5) advising the client when the lawyer knows that the client expects assistance not permitted by ethical rules.
FRE vs CA
Duty of Diligence
FRE: A lawyer shall act with reasonable diligence and promptness in representing a client. Unless representation is properly terminated the lawyer must pursue the case to the end.
In CA: A lawyer cannot intentionally, repeatedly, recklessly, or with gross negligence fail to act with reasonable diligence in representing the client.
Overall Rule:
Duty of Confidentiality
A lawyer has a duty to maintain the confidentiality of all information relating the representation of a client. This applies to potential clients and regardless if the client requested the information be confidential or if the information will damage the client.
Federal Disclosure Rule
Duty of Confidentiality
Under the ABA a lawyer may disclose confidential information if (a) the client consents; (b) the lawyer is compelled by law or court order; (c) to defend a malpractice action or in a suit to recover legal fees; (d) to prevent death or substantial bodily harm; (e) to prevent the client from committing a crime or fraud (in which the lawyers services were used) that will result in substantial financial loss; OR (f) to secure the legal advice about the lawyers compliance with ethical rules.
CA Disclosure Rule
Duty of Confidentiality
In CA, a lawyer may (but is not required) to disclose confidential information of a client when: (a) the client consents; (b) the lawyer is compelled by law or court order; (c) to defend a malpractice action or in a suit to recover legal fees; (d) the lawyer reasonably believes disclosure is necessary to prevent a crime that will likely result in death or substantial bodily harm to a person.
The lawyer must also satisfy 2 requirements before disclosure of (d) takes place – the lawyer must (1) make a good faith attempt to counsel the client out of committing the crime; AND (2) inform the client of the lawyers ability or decision to disclose the information.
General Rule & FRE/CA Differences:
Organization as a Client
Duty of Confidentiality
The lawyer may refer the matter to higher authorities within the organization if the matter violates the law, legal obligation or will result in substantial injury to the organization.
ABA: After reporting up the lawyer may disclose to an outside source to prevent substantial injury to the corporation.
In CA: A lawyer only has a right to report up or withdraw from the representation unless the disclosure is necessary to prevent death or substantial bodily harm to a person.
Inadvertent Disclosure of Confidential Information
Duty of Confidential
A lawyer shall make reasonable efforts to prevent the inadvertent or unauthorized disclosure of confidential information related to representing a client. The lawyer is not required to return the documents under the ABA or CA.
FRE vs CA:
What must a lawyer do when they recieve documents inadvertently?
Duty of Confidential - Inadvertent Disclosure of Confidential Info
ABA: A lawyer who inadvertently receives a document or ESI (Electronically stored information) must promptly notify the sender. This only applies if the lawyer knows or should know that the transmission was inadvertent.
CA: When a lawyer inadvertently/accidentally receives material that obviously appears to be confidential and privileged, the receiving lawyer must do 3 things (1) refrain from examing the materials any more than is essential to ascertain that the materials are privileged; (2)immediately notify the sender; AND (3) proceed to resolve the situation by agreement or through the court.
Duty to Safeguard Property
A lawyer must hold the property of a client that it is in the lawyers possession separate from the lawyers own property.
All client funds (including advances of fees, costs and expenses) must be kept in a separate attorney trust account.
When can client funds be withdrawn?
Duty to Safegaurd Property
Client funds shall be withdrawn only as fees are earned or expenses incurred.
Rule w/CA Difference:
Can funds belonging to the lawyer be deposited into the client trust account?
Duty to Safeguard Property
Funds belonging to the lawyer may not be deposited into the trust account except: (a) funds reasonably sufficient to pay bank charges; OR (b) funds belonging in part to both the client and lawyer which must be withdrawn at the earliest reasonable time (CA Only).
FRE vs CA
Trust Location
Duty to Safeguard Property
Under the ABA the trust must be in the state of the lawyers office unless the client consents to another place, and in CA the trust must be in the State of California.
Returning Property
Duty to Safeguard Property
A lawyer must return all client property (including all documents related to the representation) to client upon the client’s request or at the end of the representation.
In CA can a lawyer withhold a clients case file for the purpose of getting paid?
Duty to Safeguard Property
NO, in CA, a lawyer cannot withhold a client’s case file for the purpose of getting paid.
Duty of Loyalty / Conflict of Interest
A lawyer owes a duty of loyalty to their clients. This means they must act in the client’s best interest and avoid conflicts of interests.
Thus a lawyer cannot represent a client when a conflict exists and a lawyer cannot engage in self dealing or act in their own interest rather than the clients best interest.
Types of:
Conflicts of Interest
- Concurrent Conflict of Interest: Current Clients
- Former Clients
- Prospective Clients
- Imputed Conflicts
- Former Lawyer for Government
- Business Ownership by Lawyer
- Client Gifts
- Use of Current Client Information
- Business Transactions with a Client & Pecuniary Interests Adverse to the Client
- Acquiring Interest in Litigation
- Acquisition of Client’s Literary/Media Rights
- Financial Assistance & Loans to Clients
- Payment to Legal Fees by a Third Party
- Serving on the Board of a Client’s Organization
- Sexual Relations with Clients
- Aggregate Settlements & Pleas
- Limiting Liability to a Client
- Organization as Client
Concurrent Conflict of Interest: Current Clients
When does a concurrent conflict of interest exist?
Conflicts of Interest
(a) the representation is directly adverse to another client; OR (b) there is a significant risk that the lawyer’s representation will be materially limited due to his (i) personal interests or (ii) responsibilities to another present/former client or third person.
Rule & CA Difference
Can a lawyer represent clients whose interests conflict?
Conflict of Interest: Concurrent Current Clients
YES, if (1) they reasonably believe that they will be able to provide competent and diligent representation; (2) the representation is not prohibited by law; (3) they are not representing parties on opposite sides of the same litigation; AND (4) each client affected by the conflict gives informed consent confirmed in writing (In CA – informed written consent)
Dual Representation - Criminal Cases (FRE)
Conflict of Interest: Concurrent Current Clients
A lawyer should normally decline to represent multiple D’s in a criminal case because the potential for a conflict of interest is so grave.
Dual Representation - Criminal Cases (CA)
Conflict of Interest: Concurrent Current Clients
A lawyer must provide written disclosure when: (a) they have a legal, business, financial, professional, or personal relationship to a party or witness in the same matter or knows that another lawyer in the firm has; OR (b) knows or reasonably should know that another party’s lawyer is a family member, lives with or is a client of the lawyer; OR (c) another lawyer in the firm or has an intimate personal relationship with the lawyer.
Rule w/CA Difference:
Former Client of Lawyer
Conflict of Interest
Unless a former client gives informed consent, confirmed in writing (In CA – informed written consent), a lawyer cannot represent another person in the same or a substantially related matter when the persons interests are materially adverse to the interests of the former client.
Rule w/CA difference:
Former Client of Firm
Conflict of Interest
Unless a former client gives informed consent, confirmed in writing (In CA – informed written consent), a lawyer cannot knowingly represent a person in the same or a substantially related matter that the lawyer’s firm had previously represented a client: (1) whose interests are materially adverse to that person; AND (2) about whom the lawyer had acquired confidential information that is material to the matter.
Can a lawyer use or reveal confidential information of a former client?
Conflict of Interest
A lawyer cannot use or reveal confidential information to the detriment of a former client.
2 Rules:
Prospective Clients
Conflict of Interest
Rule: A lawyer cannot disclose confidential information received from a prospective client.
Rule: A lawyer cannot represent a client with materially adverse interests to a prospective client in the same or a substantially related matter if the lawyer received confidential information material to the matter from the prospective client.
w/CA Difference
Prospective Clients - Exceptions
Conflict of Interest
(1) If both the affected client and prospective client provide informed consent, confirmed in writing (In CA – informed written consent); or (2) The lawyer whom the prospective client consulted with is timely screened from participation in the matter AND written notice is promptly given to the prospective client.
ABA vs CA
Who is a Prospective Client?
Conflict of Interest
In CA, a prospective client is someone who consults the lawyer for the purpose of hiring the lawyer OR securing legal services/advice.
ABA, a prospective client is someone who consults with a lawyer about the possibility of forming a client lawyer relationship with respect to a matter.
ABA vs CA
Who is NOT a prospective client?
Conflict of Interest
In CA, (a) those who communicate information unilaterally without a reasonable expectation that the lawyer is willing to be retained; (b) after the lawyer has stated an unwillingness or inability to consult; OR (c) without a good faith intention to seek legal advice or representation.
ABA: (a) those who communicate information unilaterally without a reasonable expectation that the lawyer is willing to be retained; (b) in response to advertising that merely describes the lawyer’s education, experience, areas of practice and contact information, or provides legal information of general interest; OR (c) for the purpose of disqualifying the lawyer.
Rule w/CA Differences:
Imputed Conflicts
Conflict of Interest
A conflict of interest is imputed to the entire law firm and the entire law firm is disqualified from representation. However the law firm will not be disqualified if: (a) the conflict is purely personal and does not materially limit the representation; OR (b) the lawyer is properly screened when: (i) conflict arises out of association with the lawyer’s previous firm; (ii) the lawyer is timely screened and doesn’t receive a portion of the fee; (iii) written notice is given to the former client; AND (iv) In CA Only, the lawyer did not substantially participate in the matter at the prior firm.
Former Lawyer for Government
Conflict of Interest
Former government lawyers including prosecutors who worked personally and substantially on a matter cannot work on that same matter at a private firm unless the government agency consents in writing.
*The conflict will not be imputed to the rest of the firm if (1) the lawyer is timely screened and doesn’t receive a portion of the fee; AND (2) prompt written notice is given to the government agency.
Business Ownership by Lawyer
Conflict of Interest
A lawyer may own and operate a business separate from the practice of law. However the lawyer must be careful to not engage in a business that would pose a conflict of interest to their clients.
Gifts Given regularly & Gifts given through instruments rules w/CA dif:
Client Gifts
Conflict of Interest
A lawyer cannot solicit a client to make a substantial gift to the lawyer or the lawyers relatives unless the lawyer is related to the client.
* A lawyer may accept a gift subject to the general standards of fairness and absence of undue influence (i.e., simple gift such as a holiday present or token of appreciation.)
A lawyer cannot prepare an instrument for the client giving the lawyer or the lawyers relative a substantial gift unless (a) the lawyer/recipient of the gift is related to the client; OR (b) In CA, an independent lawyer advised the client and provided independent review.
* Related/relative means a close family relationship.
Use of Current Client Information
Conflict of Interest
A lawyer cannot use a clients confidential information to the disadvantage of the client unless: (a) the client gives informed consent; OR (b) the use is permitted by the relevant ethical rules.
Rule:
Business Transactions with a client & Pecuniary Interests Adverse to the Client
Conflict of Interest
A business transaction with a lawyer and a current client is only permitted if (1) all terms are fair and reasonable to the client; (2) the terms are fully disclosed in writing; (3) the client is advised to consult with outside counsel and is given reasonable opportunity to do so; AND (4) the client consents in writing.
When does and when doesnt this rule apply (w/CA difference)?
Business Transactions with a client & Pecuniary Interests Adverse to the Client
Conflict of Interest
This rule applies when a lawyer knowingly acquires an ownership, possessory, security, or pecuniary interest adverse to the client.
This rule does not apply to (a) ordinary fee arrangements – except when accepting an ownership interest in a clients business or other property is full or partial payment of legal fees; (b) standard commercial transactions for products/services that the client generally markets to others; AND (c) In CA, to a charging lien given to secure payment of a contingency fee.
Acquiring Interest in Litigation (ABA)
Conflict of Interest
a lawyer cannot acquire a proprietary interest in the cause of action or subject matter of litigation UNLESS (a) acquiring a lien authorized by law to secure the lawyers fee or expenses; OR (b) a contract for a contingency fee in a civil case.
Acquiring Interest in Litigation (CA)
Conflict of Interest
There is no direct rule. However, retaining liens are not allowed. Upon termination the lawyer must release to the client all client materials and property (except for the materials subject to a protective order, non-disclosure agreement or statute/regulation).
Acquisition of Client’s Literary/Media Rights (ABA only)
Conflict of Interest
ABA Rule: A lawyer cannot make/negotiate an agreement giving the lawyer literary or media rights to a portrayal or account on information related to the representation (prior to the conclusion of the representation).
CA no rule exists.
Rule w/CA Differences:
Financial Assistance & Loans to Clients
Conflict of Interest
A lawyer cannot provide financial assistance to a client, except in the following instances: (a) advancing litigation costs/expenses in contingency cases; (b) advancing an indigent client’s litigation expenses/costs; (c) In CA, paying a 3rd party from funds collected or to be collected with consent of the client; OR (d) In CA, a personal loan to the client after the lawyer is retained with a written promise to repay by the client, and compliance with relevant ethical rules (current client conflict and business transactions).
Under ABA loans to clients for personal expenses are never permitted.
Under ABA this rule applies to pending or contemplated litigation in CA this rule applies in all situations.
w/CA Differnces:
Payment of Legal Fees by a Third Party
Conflict of Interest
A third party may pay a client’s legal fees if: (1) the client gives informed consent, confirmed in writing (In CA – informed written consent); (2) there is no inference with the lawyers independence of professional judgement or the lawyer-client relationship; AND (3) information related to the representation remains confidential.
In CA, the informed written consent requirement doesn’t apply to a lawyer rendering services on behalf of any public agency or nonprofit that provides legal services to the public.
Serving on the Board of a Client’s Organization
Conflict of Interest
If a lawyer seeks to serve as a board member for a corporation/organization they represent then they must do so effectively AND without jeopardizing his ethical duties to the company as his client.
If a director of a company is also a lawyer, are they held to a different standard?
Conflict of Interest - Serviving on the board of a clients organization
YES, A director who is also a lawyer to the company is held to a higher standard in their knowledge of company matters.
w/CA Difference
Sexual Relations with Clients
Conflict of Interest
A lawyer cannot have sexual relations with current clients unless a consensual relationship existed before representation.
In CA, a lawyers spouse or registered domestic partner are specifically excluded from the definition current client.
Sexual Relations with Clients: Organization Clients Rule
Conflict of Interest
When the client is an organization this rule prohibits a lawyer for the organization from having sexual relationship with a constituent of the organization who supervises, directs or regularly consults with that lawyer concerning the organizations legal matters.
Aggregate Settlements and Pleas
Conflict of Interest
If a lawyer represents multiple clients in a case, the lawyer must obtain informed written consent of each client before entering into an aggregate settlement of claims (civil) OR guilty or nolo contendere pleas (criminal).
Does Aggregate Settlements and Pleas apply to class action settlements?
Conflict of Interest
NO, this doesn’t apply to class action settlements subject to court approval.
Limiting Liability to a Client: Claim Settlements
Conflict of Interest
Under both CA and ABA a lawyer cannot settle a claim or potential claim for professional malpractice liability unless the client is (a) represented by an independent lawyer for the settlement; OR (b) advised in writing that the client may seek the advice of an independent lawyer and is given a reasonable opportunity to do so.
ABA & CA
Limiting Liability to a Client: In a Contract
Conflict of Interest
CA Rule: In CA, a lawyer cannot contract to prospectively limit the lawyers liability to the client for malpractice.
ABA Rule: A contract prospectively limiting the lawyers liability for malpractice is permitted if the client is independently represented in making the agreement.
Organization as Client: Lawyer Represents the Organization
Conflict of Interest
A lawyer employed by an organization represents the organization acting through its duly authorized constituents (directors, officers, employees, owners). In this situation the lawyer must act in the best interest of the organization.
Can a lawyer represent the officers, director, or managers or the organization individually?
Conflict of Interest - Organization as Client - Lawyer Represents Org.
A lawyer may also represent the officers, directors, or managers of the organization individually but must (1) abide by applicable conflict of interest rules; AND (2) obtain consent to the dual representation when such consent is required under the rules, by (a) an appropriate official of the organization other than the person to be represented OR (b) the shareholders.
Organization as Client: Lawyer Represents the Organization
Is a lawyer required to disclose the organizations identity?
Conflict of Interest
The lawyer representing the organization must explain the identity of the client when dealing with constituents that have adverse interests to the organization.
Reporting Violations
Conflict of Interest
A lawyer must report up the actions within the organization when the lawyer knows a person is acting in a manner that (1) violates the law or a legal obligation AND (2) the action is likely to result in substantial injury to the organization, the lawyer must report those actions up to a higher authority in the organization – including the highest authority if necessary.
*A lawyer is not required to report up if they reasonably believe it is not in the best interest of the organization.
ABA Sub Rule & When it doesnt apply:
Reporting Violations: After Reporting Up
Conflict of Interest
if the highest authority doesn’t change course the lawyer may report outside the organization if (1) the action or refusal to act is clearly a violation of law; AND (2) the lawyer reasonably believes the violation will result in substantial injury to the organization. The lawyer may only reveal confidential information to the extent necessary to prevent substantial injury.
*This rule doesn’t apply when the organization hired the lawyer to investigate or defend against an alleged violation of the law.
CA Sub Rule
Reporting Violations: After Reporting Up
Conflict of Interest
If the highest authority doesn’t change course the lawyer cannot report outside the organization unless it causes bodily injury to a person or may resign.
