Conflicts (Duty of Loyalty)

Question 1

Conflicts

Answer 1

1. a conflict of interest arises when there is a significant risk that the client’s interests will be materially limited by the lawyer’s own interests or responsibilities to another person
2. if a conflict arises:
   i. before the representation, the lawyer must not take the client on
   ii. during the representation, the lawyer must withdraw
3. failure to handle a conflict properly can result in disqualification, discipline, and civil liability

Question 2

Concurrent conflicts

Answer 2

1. a lawyer must not represent a client if there is an actual concurrent conflict of interest:
   i. the representation of will be directly adverse to another client, or
   ii. there is a significant risk that the representation will be materially limited by the lawyer’s interests or responsibilities to another person

Question 3

Client consent

Answer 3

1. a lawyer may represent a client even with a concurrent conflict of interest if
   i. the representation is not illegal
   ii. lawyer would not be representing both sides before any tribunal
   iii. lawyer reasonably believes both clients can be represented diligently and competently, and
   iv. each affected client gives informed written consent

a. Reasonable informed written consent
b. each client understands how the conflict can harm him
c. consent must be in writing
d. clients can be asked to consent to future conflicts if client is informed and truly understands the kinds of conflicts and consequences of consent
i) waivers specific to a topic are more likely to be valid, general future waivers are unlikely to be valid

2. a conflict is not contestable (i.e. cannot be consented to) if:
   i. consent is unreasonable: a reasonable lawyer could not conclude that the client’s interests can be adequately protected
   ii. consent is uninformed: lawyer cannot fully disclose info the client needs to understand the conflict because of lawyer’s duty of confidentiality
   iii. even with consent, cannot represent a third party against the current client in a related litigation matter
3. CA:
   i. both the lawyer’s disclosure of the conflict and the client’s consent must be in writing
   ii. no reasonable lawyer standard for finding consent unreasonable
   iii. only a written disclosure to the client is required (not informed written consent) when the conflict arises out of lawyer’s prior relationships or personal interests
4. summary:
   i. ABA: lawyers’ disclosure need not be in writing, client must give written + informed consent
   ii. CA: lawyers’ disclosure of conflict must be written + client consent must be written and informed
   iii. CA (if personal interests/prior relationship): only written dislcosure to the client is required

Question 4

REPRESENTING MULTIPLE PARTIES IN A SINGLE MATTER– Criminal cases

Answer 4

1. a lawyer must not represent co-defendants in a criminal matter

Question 5

REPRESENTING MULTIPLE PARTIES IN A SINGLE MATTER– Civil cases

Answer 5

1. lawyers may represent two parties whose interests potentially conflict with valid consent
2. lawyer must:
   i. reasonably believe she is able to represent the clients diligently and competently
   ii. obtain informed written consent from both parties (strictly enforced in CA)
   iii. inform the clients that disclosures will be shared with the other client, and that attorney-client privilege does not protect clients in future litigations between them

Question 6

REPRESENTING MULTIPLE PARTIES IN A SINGLE MATTER– When conflict ripens

Answer 6

1. if the potential conflict (material limitation) ever ripens into an actual conflict, lawyer must re-assess whether she can effectively represent the clients
2. lawyer must withdraw if she cannot effectively represent the clients, or re-obtain informed consent if she can
3. if an actual conflict emerges and one party deicides to drop out, the lawyer needs the informed consent of both the dropped and the consenting party to continue representing the consenting party

Question 7

1. business transactions

Answer 7

with a client or knowingly acquiring an interest adverse to a client is impermissible unless (all 4):

i. the terms are fair to the client
ii. the terms are disclosed in writing, in a manner that the client can reasonably understand
iii. client is advised in writing to seek an independent lawyer, and
iv. client gives written and signed informed consent
v. note: does not apply to ordinary fee agreements or to standard commercial transactions marketed to the public

Question 8

2. confidential information

Answer 8

must not be used to client’s disadvantage to benefit the lawyer or any 3P, unless:

i. client gives informed consent, or
ii. an exception to confidentiality applies
iii. note: lawyers who use the confidential information for his own benefit, without harming or even benefiting the client are subject to civil liability for disgorgement of profits

Question 9

3. gifts

Answer 9

i. must not solicit a substantial gift from a clients (small tokens are fine)
ii. must not create a legal instrument giving a substantial gift to the lawyer (unless it’s family)
a. CA: the lawyer is only prohibited from inducing the gift, not from preparing the instrument

iii. gifts allowed from relatives who are clients
iv. may seek lucrative appointments or other fee-paying positions (ex. executor of estate or counsel to executor), but general conflict of interest principles apply to prohibit advice tainted by self-interest

Question 10

Media rights

Answer 10

must not negotiate for nor acquire media rights concerning the case until after it is concluded
i. CA: lawyer can acquire media rights at any time, but because of the conflict (incentive to sensationalize), the trial judge must ensure the client fully understands and consents to the conflict

Question 11

Financial assistance

Answer 11

financial assistance to clients is prohibited, whether litigation is pending or completed

i. may advance litigation expenses, and may make repayment contingent on the outcome
ii. may pay the court costs and litigation expenses for an indigent client without repayment

iii. CA:
e. same as ABA with respect to litigation purposes. can’t give money unless
- advancing litigation expenses or
- paying court costs for indigent client

but can also
c. lend clients money for any purpose if there is a written promise to repay (but still cannot donate to clients)

CA also allows paying 3P out of recovery: with client’s consent, the lawyer may pay or agree to pay to a third party the expenses collected from the client for the representation

Question 12

Compensation from a third party

Answer 12

6. compensation from a third party other than the client for the representation cannot be accepted unless
   i. the client gives informed consent (CA: must be written too)
   ii. there is no interference with the lawyer’s professional judgment or with the attorney-client relationship
   iii. information relating to the representation is protected

Question 13

Aggregate settlement

Answer 13

lawyers must not participate in making an aggregate settlement when representing co-parties unless

i. each client gives informed consent in a signed writing
ii. clients agree how the aggregate sum will be shared and the lawyer discloses to each client all terms of the sharing agreement, including:
a. the total amount, the nature of all claims, defenses, and pleas involved in settlement
b. details of each other client’s participation in the settlement
c. how and by whom the lawyer’s fees will be paid

Question 14

limiting malpractice liability

Answer 14

agreement prospectively waiving or limiting malpractice liability is valid only if the client is independently represented in making the agreement
i. CA: not valid in any circumstance

Question 15

Settling malpractice claims

Answer 15

cannot settle malpractice claims with an unrepresented client or a former client without first advising that person that independent counsel is desirable, and giving that person a chance to consult with independent counsel

Question 16

Closely related lawyers

Answer 16

10. closely related lawyers (blood or marriage) must obtain informed consent before representing different clients in substantially related matters
    i. CA: also includes relationships:
    a. when one lawyer is a client of the other
    b. when the lawyers live together
    c. when the lawyers have an intimate personal relationship

Question 17

Proprietary interest in cause of action:

Answer 17

lawyers must not acquire a proprietary interest in the client’s cause of action or the subject matter of the litigation, except:

i. contract with a client for contingency fees
ii. attorney’s liens used to secure fees (not recognized in CA)

Question 18

Sexual relations

Answer 18

i. no sexual relations with clients, nor with constituents of organizational clients who supervise the lawyer’s work or consults with the lawyer about the organization’s legal matters
ii. does not include pre-existing consensual sexual relations, but must make sure the relationship will not adversely affect the representation
iii. conflicts caused by sexual relations are not imputed to other lawyers
iv. CA: (new) sexual relations with clients is permissible, except
a. cannot demand sexual relations with a client as a condition of representation
b. cannot be the product of coercion or undue influence
c. cannot result in incompetent representation of the client
d. does not apply to spouses or ongoing relationships

Question 19

Liability insurance

Answer 19

i. policies that pay for a lawyer, but require policyholder to cooperate with the defense
ii. conflict: policy holder wants to minimize risks, while insurance company wants to minimize expenses
iii. CA: the policyholder and client are joint clients, but lawyer’s obligations are governed by RPC not the insurance contract
a. some states say the policyholder is the sole client

Question 20

Imputed conflicts - General rule

Answer 20

1. a firm is a single unit for conflicts; conflicts are imputed to all other lawyers in the firm
2. whether a group of lawyers is a firm depends on:
   i. existence of a formal agreement
   ii. holding themselves out as a firm
   iii. sharing revenues and responsibilities
   iv. having physical access to each other’s client files
   v. routinely talking among themselves about the matters they are handling, and
   vi. whether the purpose of the particular conflict rule would be served by imputing one lawyer’s conflict to other lawyers in the group

Question 21

No imputed conflict if

Answer 21

• a conflict is not imputed if:

1. caused by former government lawyers
2. caused by close relationships with another lawyer representing a different client in the matter
3. conflict is personal to the disqualified lawyer (ex. sexual relations) and do not present a significant risk of materially limiting the representation by the firm’s other lawyers
4. conflict involves duties owed to former clients and the disqualified lawyer is timely screened from participation in the matter and is apportioned no part of the fee from the matter

Question 22

Screening

Answer 22

5. if a lawyer is disqualified from representing a client because of a duty to a former client, and the lawyer joins a new firm, the new firm is also disqualified, unless:
   i. the lawyer is properly screened (i.e., does not work on the case, discuss it with those who do, or have access to case files)
   ii. does not share fees from the matter (can receive full regular independently contracted for salary or share of partnership proceeds), and
   iii. the affected former client is prompt given written notice (note: screening does not require consent)
   iv. certifications of compliance with the screening procedures are provided to the former client and by a partner of the firm upon request, and at the termination of screening procedures
6. CA: there is automatic imputation when the lawyer has actual confidential information from a representation and switches sides, even with screening
   i. otherwise, CA courts accept screening to preventing imputation
   ii. but CA lawyers are not subject to discipline for imputed conflicts, bc CA RPC does not mention imputed conflicts

Question 23

Using confidential info of former conflicts

Answer 23

1. duty of confidentiality duty remains even after the representation ends
2. cannot use confidential information to former client’s disadvantage without written informed consent, thus cannot oppose the former client in any matter to which confidential information would be relevant
3. CA follows the same rule substantively

Question 24

New Clients Adverse to Former Clients

Answer 24

3. cannot represent a new client whose interests are materially adverse to those of the former client in a substantially related matter, unless there is informed consent in writing (from the former client)
   i. substantially related usually means same specific transaction, not same type of matter
   ii. i.e. can’t represent new clients materially adverse to old clients in the substantially related matters absent written consent
4. a lawyer whose firm formerly represented a client in a matter, where the lawyer acquired confidential information or information pertaining to the representation, cannot represent a new client in the same or a substantially related matter if that person’s interests are materially adverse to those of the firm’s former client, unless there is informed consent in writing
   i. a lawyer’s duties extend to clients she represented personally and to clients of the lawyer’s former firm
   ii. i.e. can’t represent new clients materially adverse to the firm’s old clients in the substantially related matters absent written consent, if lawyer obtained information that was confidential or related to the representation

Question 25

Conflicted Firms

Answer 25

5. new firm: if a lawyer is disqualified from representing a client because of a duty to a former client, and the lawyer joins a new firm, the new firm is also disqualified, unless screening procedures followed
6. former firm: a lawyer’s former firm is prohibited from representing a person with interests materially adverse to those of a client of the formerly associated lawyer if (i) the matter is the same or substantially related to that in which the formerly associated lawyer represented the client, and (ii) a lawyer remaining in the firm has confidential information or information pertaining to the representation
   i. i.e. if the lawyers leave they take their conflicts with them

Question 26

FORMER AND CURRENT GOVERNMENT EMPLOYEES

Answer 26

1. narrow and flexible disqualification rules: balance between protecting government information and incentivizing lawyers to join government (by minimizing resultant disqualifications)

Question 27

Government to private practice – same matter

Answer 27

1. an ex-gov’t lawyer cannot then represent a private client in a matter if lawyer participated personally and substantially in the same matter for the gov’t, unless the gov’t agency gives written informed consent (written informed consent is generally the standard for former client conflicts)
   i. matter means a specific dispute involving specific facts and parties
   ii. personally and substantially means that the lawyer worked on the matter herself and that her work was more than trifling
   iii. applies regardless of whether or not the later work would be adverse to the gov’t

iv. imputed disqualification (to other lawyers in the firm) can be avoided by screening, not sharing fee with the disqualified lawyer, and giving written notice to the gov’t
a. only requires notice to the government not consent

Question 28

Government to private practice – confidential information

Answer 28

1. an ex-gov’t lawyer with confidential government information actually received (i.e. not just imputed) that could be used to harm a person cannot represent a private client whose interests are adverse to that person
   i. disqualification is imputed unless there is screening
   ii. only applies to confidential information actually received, not to imputed information

Question 29

Private to government practice

Answer 29

1. ordinary conflict rules apply:
   i. conflict if confidential information of a former client would be relevant
   ii. conflict if representation of government is materially adverse to a former client in a substantially related matter
   iii. representation requires written informed consent
2. additional stricter rule:
   i. ex-private lawyer cannot then represent gov’t in a matter if lawyer participated personally and substantially in the same matter for a private client, regardless of whether or not the later work would be adverse to a former client, unless private client gives written informed consent
   ii. note: applies even if lawyer takes the same position, helping former client, when representing the gov’t
   iii. ex. Lawyer helps C petition gov’t to pass a bill, Lawyer cannot then represent gov’t in helping get the bill to pass without C’s written informed consent
3. except for law clerks, a person in government service is currently working personally and substantially on a matter not negotiate for private employment with any party or lawyer involved in that matter
   i. law clerks must give notice to the judicial officer before negotiating

Question 30

Prospective client definitions

Answer 30

1. prospective client: person who consults with a lawyer about forming a client-lawyer relationship
2. consultation: occurs when a lawyer either in person or through advertising:
   i. specifically requests or invites submission of information without clear warnings limiting the lawyer’s obligations, and (i.e. no relationship is formed)
   ii. the person provides information in response
3. no consultation if:
   i. a person provides information in response to a general advertisement (ex. only providing attorney’s name and contact information)
   ii. a person contacts the attorney in order to create a conflict to disqualify them

Question 31

Prospective client conflict rules

Answer 31

1. a lawyer who obtains confidential information during a consultation with a prospective client must not later represent a different person in a substantially related matter if the confidential information could significantly harm the prospective client
2. conflict is imputed onto other lawyers in the firm
3. the conflict can be overcome by:
   i. obtaining informed written consent, or
   ii. only written notice (without consent) if the firm can show:
   a. timely screening, and
   b. lawyer took care to avoid exposure to any more confidential information than necessary to determine whether to represent the person during consultation
4. CA: no counterpart rule
   i. representation begins when the lawyer learns of the confidential information, even if during a consultation and no services are subsequently provided
   ii. screening is developing in CA, and may not prevent imputation

Question 32

When can clients revoke written consent to a conflict

Answer 32

at any time

Question 33

what is reasonable consent?

Answer 33

e. clients can almost always revoke consent to a conflict of interest

Question 34

what is informed reasonable consent?

Answer 34

a. Reasonable informed written consent
b. each client understands how the conflict can harm him
c. consent must be in writing
d. clients can be asked to consent to future conflicts if client is informed and truly understands the kinds of conflicts and consequences of consent
i) waivers specific to a topic are more likely to be valid, general future waivers are unlikely to be valid

2. a conflict is not contestable (i.e. cannot be consented to) if:
   i. consent is unreasonable: a reasonable lawyer could not conclude that the client’s interests can be adequately protected
   ii. consent is uninformed: lawyer cannot fully disclose info the client needs to understand the conflict because of lawyer’s duty of confidentiality
   iii. even with consent, cannot represent a third party against the current client in a related litigation matter
3. CA:
   i. both the lawyer’s disclosure of the conflict and the client’s consent must be in writing
   ii. no reasonable lawyer standard for finding consent unreasonable
   iii. only a written disclosure to the client is required (not informed written consent) when the conflict arises out of lawyer’s prior relationships or personal interests
4. summary:
   i. ABA: disclosure -> <= written + informed consent
   ii. CA: written + disclosure => <= written + informed consent
   iii. CA (if personal/prior relationship): written + disclosure =>