5. Conflicts

Question 1

What duties are at risk in the context of conflicts

Answer 1

Lawyers owe a duty of loyalty to clients, which entails (1) duty to protect the client’s interests and (2) duty to avoid conflicts.

Bonus: There is also obvious interplay with obligations to avoid breaching their duty of confidentiality.

Question 2

What is a conflict of interest?

Answer 2

A conflict of interest (“CoI”) exists/arises where:

+ interests of the lawyer personally, another client, a former client or a 3rd party
+ directly adverse to OR
+ materially limits
+duty of loyalty

Question 3

What are the policies behind conflicts (either protecting against adverse interests or material limitations in representation?)

Answer 3

Adverse interests - undermines trust relationship (interplay with duty of confidentiality)

Material limitation - ability to advance the client’s interests (undercuts their duty of competence and care - particularly duties of communication and diligent rep)

Question 4

There are concurrent and past conflicts. Describe the key elements of a concurrent conflict…

Answer 4

Concurrent (present) conflicts can arise where [KEY elements]

(A) there is a direct conflict or

(B) significant risk of material limitation

on basis of (i) lawyer’s personal interests, (ii) another client / former client’s interests or (iii) interests of a 3rd party

Bonus points: significant risk doesn’t mean actual harm.

Question 5

What is “direct conflict” (concurrent conflict)

Answer 5

+ One client’s interest
+ directly adverse to / directly conflicts with
+ another client’s

Question 6

What is a “material limitation conflict” (concurrent conflict)

Answer 6

+ significant risk
+ that lawyer has
+ relationship with OR
+ responsibility to
+ another person (another client, 3rd party or even themselves)
+ materiality limits
+ ability to comply with their duties (i.e., of loyalty, zealous advocacy, etc.)

E.g., Client A sues Company B and lawyer’s spouse owns company B stock

Question 7

What is a non-consentable conflict (concurrent conflict?

Answer 7

1st step: determine if direct conflict or material limitation.

2nd step - getting consent: rule out non-consentable
(1) against the law, cannot waive the conflict
(2) such as (i) co-defendants in criminal case that is a capital suit (seeking death penalty) or (ii) opposing parties in same lawsuit

Question 8

What’s the primary CA distinction for material limitations?

Answer 8

If there’s ANY possibility of material limitation (doesn’t need to be significant risk) still required to provide written disclosure of:

ANY relationship of the lawyer/lawyer at their firm with (1) a party in the same matter (legal, business, personal, other) or (2) opposing counsel.

Don’t need written consent, provided they reasonably believe they can provide diligent and competent representation.

But, if there’s a significant risk it’ll materially limit representation, then you need to clear conflicts/get consent.

Question 9

What’s a “positional conflict”

Answer 9

Your position for one client conflicts with your representation of another

Question 10

What’s a past or successive conflict (two elements)

Answer 10

Representing a new client against a past client if

(1) matters are SAME or SUBSTANTIALLY RELATED (use your discretion - would confidential information from prior representation cause a conflict here?)

&

(2) interests are materially adverse

Question 11

What is an “imputed conflict”

Answer 11

If one lawyer is conflicted out, all the lawyers at their firm are conflicted out, without an exception.

Question 12

What is the exception for “imputed conflicts” if it comes up at your current firm?

Answer 12

If it’s based purely on a personal relationship, others can represent.

If the conflict if due to their time at a prior firm, provided they didn’t substantially participate, they should be screened (walled off, no cut of fee) and client’s written notice is needed.

In the notice, they have to explain the screening process and that they’re happy to respond to inquiries/objections.

Question 13

What is the exception for an “imputed conflict” if it comes up after you leave a firm?

Answer 13

Matters can’t be SUBSTANTIALLY THE SAME - if any lawyer at the prior firm still holds confidential information about a prior client, you can’t represent the new client with a materially adverse interest.

Otherwise, it’s okay, if the former client isn’t represented by the former firm anymore.

Question 14

Discuss third party payment of fees

Answer 14

If a 3rd party wants to pay someone’s fees, you need to be sure they won’t influence the lawyer’s judgment, that confidentiality will be protected and get consent after full disclosure (informed written consent in CA)

Question 15

What’s the rule if you’re settling up a matter for multiple clients

Answer 15

You cannot settle/accept plea bargain for all, without everyone’s consent

Question 16

How do you resolve a conflict?

Answer 16

Must reasonably believe you can represent everyone effectively, inform everyone of the risks/alternatives

Question 17

What’s the rule if you’re settling up a matter for multiple clients

Answer 17

You cannot settle/accept plea bargain for all, without everyone’s informed consent in writing. Class action settlement requires court approval.

Question 18

Malpractice liability limitation

Answer 18

Client needs independent representation (CA: not allowed at all)

Question 19

What do you need to do if you are settling a malpractice suit with your client?

Answer 19

Let them know in writing that should seek independent legal counsel and give them an opportunity to do so

Question 20

How do the federal rules and CA rules differ for obtaining an interest in your client’s case/story

Answer 20

In California, you can obtain a proprietary interest in the subject of a lawsuit or buy media rights, before conclusion. Can’t do either under federal rules.

In CA, you can’t buy subject property if affiliated with party.

Question 21

Can you enter into a business transaction with a client?

Answer 21

Yes, requires written informed consent. The terms must be fair and reasonable, disclosed fully in writing, you should advise in writing that they get outside counsel and give them an opportunity to do so.

Same rules apply for loan (must be unrelated to legal matter).

Exception for contingency fee agreements.

Question 22

Can you obtain a gift from your client?

Answer 22

Okay if related. Otherwise you cannot solicit from your client - or draft up a legal document for (e.g., will) - a substantial gift.

Question 23

How can you help an indignant client?

Answer 23

Under federal rules, you can advance litigation and court expenses for them (in CA these can be any expenses). Can be contingent on outcome. You can also make modest gifts to meet basic needs - just don’t advertise your willingness to do so.

This only applies to indigent clients though.

Question 24

What is the rule regarding sexual relations with clients?

Answer 24

If relationship began prior to representation, that’s okay. But if after representation commences, you must withdraw.

Can’t condition representation on sex (it scares me that this is even a rule we have to learn…)

Question 25

What duties are at risk in the context of conflicts?

Answer 25

Lawyers owe a duty of loyalty to clients, which entails (1) duty to protect the client’s interests and (2) duty to avoid conflicts.

Bonus: There is also obvious interplay with obligations to avoid breaching their duty of confidentiality.