CLIENT-LAWYER CONFLICTS Flashcards
1
Q
rules // CONFLICTS BTWN LAWYERS & CLIENTS
A
o R.1.5 FEES
o R.7.1 COMMUNICATION CONCERNING A LAWYERS SERVICES
o R.1.8 CONFLICT OF INTEREST: CURRENT CLIENTS: SPECIFIC RULES
o R.1.15 SAFEKEEPING PROPERTY
2
Q
5 duties upon withdrawal // WITHDRAWAL
A
- The lawyer shall give reasonable notice of withdrawal to the client
- The lawyer shall give the client time to find a new lawyer (the lawyer may have to stay on until a new lawyer is hired)
- The lawyer must protect the client’s property and confidences
- The lawyer shall promptly surrender the client’s files and property to the client or the new lawyer (some states have statutory attorney lien statutes that allow retention of the file)
- The lawyer shall promptly refund any unearned fees or expenses.
3
Q
leave of court // WITHDRAWAL
A
- if litigation has commenced, the lawyer must obtain leave of court to withdraw, regardless of whether such withdrawal is mandatory or permissive.
- if the court denies such leave, the attorney must continue to represent the client competently
4
Q
3 ways lawyer’s interests may conflict with client’s // CONFLICTS BETWEEN LAWYER AND CLIENT
A
- Legal fees under R.1.5
- Lawyer as custodian of client property under R.1.15
- Personal interests
5
Q
3 examples // PERSONAL INTERESTS
A
- Gifts
- Business transactions
- Intimate or familial relationships
6
Q
4 main types of fee arrangements // LAWYER-CLIENT FEE CONTRACTS
A
- Hourly (most common)
- Contingency (most regulated by the Rules)
- Retainer
- Flat fee
7
Q
3 considerations // LAWYER-CLIENT FEE CONTRACTS
A
- In writing
- Disclosure of nature of fee arrangement
- Standard by which court/bar review challenge lawyer’s fee
8
Q
In writing requirement – legal fees // LAWYER-CLIENT FEE CONTRACTS
A
- Contingency fee arrangement = must be in writing under R.1.5(c)
- All other arrangements = preferable to have in writing under R.1.5(b)
9
Q
Disclosure of nature fee arrangement requirement – legal fees // LAWYER-CLIENT FEE CONTRACTS
A
- Not mandated by rules
(good faith estimate of likely cost NOT required) - R.1.5(b) = scope of representation and basis/rate must be communicated before or within reasonable time after commencing representation
EXCEPT when lawyer charges regularly represented client on same basis/rate
10
Q
Standard by which court/bar review challenge lawyer’s fee – legal fees // LAWYER-CLIENT FEE CONTRACTS
A
using various combinations of 8 reasonableness factors listed in R.1.5(a) =
- the time and labor required, the novelty and difficulty of the questions involved, and the skill required to perform the legal service properly
- the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer
- the fee customarily charged in the locality for similar legal services
- the amount involved and the results obtained
- the time limitations imposed by the client or by the circumstances
- the nature and length of the professional relationship with the client
- the experience, reputation, and ability of the lawyer or lawyers performing the services
- whether the fee is fixed or contingent
11
Q
Regulation of hourly billing – legal fees // LAWYER-CLIENT FEE CONTRACTS
A
- May NOT double-bill or bill for recycled work
- Can bill each client for half the time expended or with consent allocate time in some other way
- Just cannot bill the block of time twice
12
Q
Billing for expenses – legal fees // LAWYER-CLIENT FEE CONTRACTS
A
- No profits on costs = lawyer may not bill on overhead or makeup costs
- EXAMPLE = cannot make a profit on costs of copies made in in-house copy room BUT can be reimbursed by client (AKA paid what you paid/charge what you were charged)
- May not bill for personal expenses or mark up expense receipts
13
Q
Limits on types of cases that can be paid on // CONTINGENCY FEES
A
Limit on types of cases that can be paid on contingency fee basis under R.1.5(d)
= Prohibited in
1. Divorce
2. Criminal
14
Q
Max percentage cap // CONTINGENCY FEES
A
- No maximum percentage cap in contingency fee cases
- Limited by reasonable standard and factors
- Usually between 30-40% but sometimes 50%
15
Q
4 specific requirements for contingency fee arrangements under R.1.5(c) // CONTINGENCY FEES
A
- Signed by client (not merely confirmed in writing)
- State method by which fee is determined, including % that shall accrue in event of settlement
- State whether such expenses are to be deducted before or after contingent fee is calculated
- Clearly notify client of any expenses for which client will be liable whether or not prevailing party
16
Q
rule // DIVIDING FEES WITH OTHER FIRMS OR WITH NONLAWYERS
A
R.1.5(e) = division of fee among lawyers not in same firm allowed ONLY IF meet 3 requirements
- Division in proportion to services performed OR each lawyer assumed joint responsibility for representation
- Client agrees to arrangement, including share to each, confirmed in writing
- Total fee is reasonable
17
Q
rule // FINANCIAL ASSISTANCE TO CLIENT UNDER R.1.8(e)
A
Cannot provide financial assistance to client in connection with pending or contemplated litigation EXCEPT
- To advance court costs and expenses of litigation, repayment of which is contingent on outcome
- Lawyer representing indigent client can pay court costs and litigation expenses
18
Q
PROSPECTIVE LIMITATION OF LIABILITY UNDER R.1.8(h)(1)
A
Lawyer can’t make an agreement prospectively limiting lawyers liability to a client for malpractice UNLESS client has independent legal representation
19
Q
malpractice claim settlements // RESPONDING TO CLAIM AGAINST LAWYER UNDER R.1.8(h)(2)
A
- Lawyer can settle a malpractice claim with client who doesn’t have independent legal counsel (but encourage them to have anyway) IF lawyer advises client in writing to seek independent legal advice and gives opportunity to consult another lawyer
- Settlement of malpractice claim may not bar client from filing disciplinary complaint or require client to withdraw complaint that was already filed
20
Q
2 rules // RETAINERS
A
- non-refundable retainers are generally impermissible
2. a lawyer must transfer retainer funds from the client trust fund account to the office account as they are earned
21
Q
8 rules re: client trust fund account // DUTY TO SAFEGUARD CLIENT’S PROPERTY/FUNDS
A
- the rule with regard to client trust fund accounts is “zero tolerance”
- there must be no commingling of funds (client and non-client)
- the lawyer cannot move money out of such accounts until earned or the client approves
- the lawyer must keep complete, accurate and up-to-date records of client trust fund accounts (and maintain them for 5 years)
- even bookkeeping neglect or sloppiness will subject the lawyer to discipline (despite the fact that the client was not injured).
- lawyer may deposit personal funds into a client trust fund account to pay bank service charges
- lawyer shall deposit retainer advances in the client trust fund account and must withdraw those funds as earned or expended
- trust funds must be kept in a separate account maintained in the state where the lawyer’s office is situated, or elsewhere with the consent of the client or third person (former MPRE question)
22
Q
duty upon receipt of client property // DUTY TO SAFEGUARD CLIENT’S PROPERTY/FUNDS
A
- lawyer must promptly inform the client of the lawyer’s receipt of any property belonging to the client
- lawyer must then promptly deliver the property to the client (or as the client instructs)
- lawyer must provide the client with a full accounting, where requested
- for tangible property, the lawyer must earmark the property and keep it safe
23
Q
third-party claim // DUTY TO SAFEGUARD CLIENT’S PROPERTY/FUNDS
A
- if a dispute arises between the attorney and client over ownership of funds, the lawyer should deliver to the client any funds which the parties agree belong to the client, but the lawyer should retain the disputed portion in the client trust fund account
- where a third party has a non-frivolous claim to client funds held by the lawyer, the lawyer must refuse to surrender the property to the client until such claims are resolved
- In some cases, this may require the lawyer to seek action in court (e.g., interpleader) for a resolution
24
Q
proprietary interest in cause of action under R.1.8(i) // LAWYER’S DUTY TO CLIENT
A
lawyer shall not acquire proprietary interest in cause of action EXCEPT
- Lawyer may acquire lien to secure lawyer’s fee/expenses
- Contract with client for reasonable contingent fee in civil case (can be cash or property)
- May take security interest or mortgage in property that is NOT the subject of the litigation to secure payment of fees
25
literary media rights under R.1.8(d) // LAWYER’S DUTY TO CLIENT
= cannot contract for literary/media rights of transaction
- client cannot consent to this conflict
- after termination of representation, lawyer may acquire such rights (assuming person is not longer a client, making this a business transaction between lawyer and non-lawyer)
26
transacting business with clients under R.1.8(a) // LAWYER’S DUTY TO CLIENT
lawyer shall not enter into a business transaction (other than transactions in the ordinary course of business -- bank accounts at client’s bank) OR acquire a property interest adverse to a client, UNLESS
a. the terms are fair and fully disclosed in writing in a manner that can be reasonably understood by the client
b. the client is advised in writing of the desirability of seeking and is given a reasonable opportunity to seek the advice of independent legal counsel, and
c. the client gives informed consent in a signed writing
27
using client information // LAWYER’S DUTY TO CLIENT
lawyer may not, without informed consent of client, enter into transactions disadvantageous to the client
28
gifts from clients // LAWYER’S DUTY TO CLIENT
lawyer shall not solicit any substantial gift form a client or prepare an instrument giving the lawyer (or a close family member) a substantial inter vivos or testamentary gift EXCEPT
1. where donor of close family member of the lawyer (EXAMPLE = may draft will for parents in which he receives bequest)
2. lawyer accept simple, unsolicited gifts from clients that do not require preparation of an instrument
3. lawyer may even accept large, unsolicited gifts from client but client should seek the advice of an independent lawyer prior to making such a gift (but donee lawyer is not required to inform client of this fact)
29
financial assistance to client // LAWYER’S DUTY TO CLIENT
- a lawyer shall not provide financial assistance to a client in connection with litigation EXCEPT
1. the lawyer may advance the court costs and expenses of litigation, contingent upon outcome of the matter (but not other costs, such as the client’s rent payments, food, medical bills, etc.)
2. the lawyer may pay the court costs and expenses of litigation for an indigent client (but not other costs, such as the client’s rent payments, food, medical bills, etc.)
- for non-litigation clients, a lawyer may make loans, etc. to such clients if the lawyer complies with the rules for entering into business transactions with a client
30
third-party payment // LAWYER’S DUTY TO CLIENT
lawyer shall not accept compensation for representing a client from someone other than the client (e.g., an insurer, parent, employer) UNLESS
- the client gives informed consent in writing
- the third party does not interfere with the relationship or the lawyer’s independent judgment
- the client’s Rule 1.6 information is protected (i.e., the third party is not entitled to such information)
31
3 malpractice claim rules // LAWYER’S DUTY TO CLIENT
- lawyer shall not make a prospective agreement limiting the lawyer’s liability for malpractice, unless the client is independently represented
- lawyer may agree with a prospective client to arbitrate malpractice claims.
- lawyer may not settle a malpractice claim with a client without first advising the client in writing to seek independent legal advice
32
sexual relationship with client // LAWYER’S DUTY TO CLIENT
- may not have sexual relationship with client UNLESS such relationship existed prior to the representation
- this conflict with NOT imputed to other members of the lawyer’s firm
33
Other firm lawyers // FEE-SPLITTING
lawyer may split fees with other lawyers in his or her firm without notice to or consent of the client as long as the overall fee is reasonable
34
Nonlawyers // FEE-SPLITTING
lawyer may not split fees with a non-lawyer witness or consultant under any circumstances
35
Non-firm lawyers // FEE-SPLITTING
lawyer may split fees with lawyers outside of his or her firm if the overall fee is reasonable and:
- a. the division is in proportion to the services performed (i.e., two lawyers truly sharing the work) or each lawyer assumes responsibility for the representation, and
- b. the client agrees to the arrangement, including the share each lawyer will receive, and the agreement is confirmed in writing.
- c. a lawyer may enter into a non-exclusive reciprocal referral agreement with another lawyer or a non-lawyer professional; clients obtained through such agreements must be informed of the nature of such agreement
36
Gifts from clients under R.1.8(c) // LAWYER AS CUSTODIAN OF CLIENT PROPERTY/DOCUMENTS
- Cannot solicit substantial gifts or bequests from a client
- But may receive unsolicited gift if transaction meets general standards of fairness
- But if gift is too large, client could later sue for its return UNLESS lawyer of other recipient of gift is related to client
- Doesn’t apply to standard commercial transaction (CMT 1)
- May make an investment that client has decided not to invest in if doesn’t adversely impact client or get informed consent
37
Sexual relationships with clients under R.1.8(j) // LAWYER AS CUSTODIAN OF CLIENT PROPERTY/DOCUMENTS
- Cannot have sexual relationship with client unless precedes representation
- Sexual relationship with client’s spouse = bad under R.1.7
38
Intimate/family relationships with adverse lawyers // LAWYER AS CUSTODIAN OF CLIENT PROPERTY/DOCUMENTS
Member of the same family may only represent clients with adverse interests IF client have been informed of relationship, advised of possible problems, and given informed consent (CMT 11)
39
R.1.15 safekeeping client property // CONFLICTS WITH HANDLING CLIENT PROPERTY
- keep client property separate from lawyer’s property = NO COMMINGLING
- May deposit lawyer’s own funds into client trust account ONLY to pay bank service charges on that account
40
Third party interest in funds // CONFLICTS WITH HANDLING CLIENT PROPERTY
R.1.15(d) = must promptly deliver funds in which client or 3P has interest (like settlement) upon receipt
41
Conflicted interest in funds // CONFLICTS WITH HANDLING CLIENT PROPERTY
R.1.15(e) = must keep separate property in which 2 or more people have interest (may induce lawyer) until matter resolved
42
HYPO = A has been representing C in litigation. During protracted pretrial proceedings, C complained bitterly about the time and expense involved and insisted that A take steps to terminate pretrial proceedings. A believes that a termination of such proceedings will jeopardize C’s case. A feels that the case cannot be adequately prepared without at least six more months of pretrial proceedings. C tells A to forego all further pretrial proceedings and schedule the case for an immediate trial. Under these circumstances, is it proper for A to withdraw? // WITHDRAWAL
Yes, because C’s conduct makes it unreasonably difficult for A to represent C effectively and competently
43
mandatory withdrawal // WITHDRAWAL
A lawyer must withdraw (or must not accept representation) if:
1. the representation will result in a violation of the Rules or Law by the lawyer
(EXAMPLE = Client insists that Lawyer file suit against X. Lawyer believes that Client’s suit is frivolous and is being asserted solely to harass X. Lawyer must withdraw.)
2. the lawyer’s physical or mental condition materially impairs the lawyer’s ability to represent the client
3. the lawyer is discharged (a lawyer may always be fired, even if working on a contingent fee basis); the lawyer, however, is entitled to fees earned up to the time of discharge (this would be quantum meruit recovery in a successful contingent fee case)
44
permissive withdrawal // WITHDRAWAL
A lawyer may withdraw if:
1. the client persists on a course of action the lawyer reasonably believes is criminal or fraudulent (if the representation will cause the lawyer to violate the Rules or the law, the lawyer must withdraw)
2. the client has used the lawyer to commit a crime or fraud
3. the client insists on taking action the lawyer considers repugnant or with which the lawyer has a fundamental disagreement
4. the client breaches the lawyer-client agreement (e.g., the client fails to pay the lawyer); in such cases, the lawyer must give the client warnings before withdrawing
5. the representation will result in an unreasonable financial burden to the lawyer (particularly if the matter has been rendered unreasonably difficult by the client) or the client’s conduct is making it unreasonably difficult for the lawyer to represent the client effectively and competently
6. the client consents to the lawyer’s withdrawal
7. other good cause exists
