Conflicts of Interest

Question 1

duty of loyalty

Answer 1

lawyer owes duty of loyalty to client and must avoid or properly address any conflicts of interest

Question 2

imputation of conflict

Answer 2

generally when a lawyer cannot take matter b/c of conflict, other lawyers in firm are barred from taking on that matter. exceptions:

1. conflict is uniquely personal to disqualified lawyer and would not materially limit the rep of the client by the other lawyers in the firm
2. lawyer is properly screened and affected person given notice

**can also be WAIVED by the affected clients

Question 3

when does a conflict exist

Answer 3

when there is direct adversity or material limitation

Question 4

how to resolve a conflict

Answer 4

1. reasonably believe you can competently and diligently represent client despite conflict
2. representation not prohibited by law
3. representation does not involve asserting a claim by one client against another client represented by lawyer in the same proceeding
4. each affected client gives informed consent, confirmed in writing (CA: disclosure + consent must both be in writing)

Question 5

direct adversity conflicts

Answer 5

generally must not represent, even if in totally unrelated matters

mere economic adversity does not amount to direct adversity - can simultaneously represent competitors as long as they are not adverse to each other in any of the matters

Question 6

material limitation conflicts

Answer 6

relevant in situation where lawyer’s ability to represent a client could be affected (own interest, or responsibilities to another client/former client/third person unless waived)

CA: written disclosure for any sort of business or personal conflicts related to someone in the client’s matter, or opposing attorney in the matter

Question 7

business transactions with clients

Answer 7

must not enter into or knowingly acquire an ownership, possessory, security, or money interest adverse to client unless unless (First Discuss Over Coffee):

1. terms are FAIR to client
2. terms and lawyer role are fully DISCLOSED to client writing that is reasonably understandable
3. client advised in writing that they should get advise from OUTSIDE LAWYER
4. client gives informed CONSENT in writing signed by client

**rule doesn’t apply to standard commercial transactions for products/services that client generally markets to other

Question 8

misuse of client’s confidential info

Answer 8

must not use confidential info a client’s disadvantage unless client gives informed consent or some exception applies

Question 9

substantial gifts from clients

Answer 9

must not solicit gifts or prepare instrument unless client is related to recipient of gift
CA: can prepare instrument if client has been advised by independent lawyer who has provided certificate of independent review

Question 10

financial assistance

Answer 10

can’t in connection w/ pending or contemplated litigation. exceptions:
1. advance court costs and lit expense
2. pay court costs for indigent clients
3. modest gifts for pro bono indigent client

CA: applies in both lit and non-lit contexts; can’t promise to pay debts
- after lawyer hired, lawyer can lend money to client for any purpose if client gives written promise to repay
- lawyer can pay client’s expenses to third party w/ clients consent

Question 11

aggregate settlement agreements

Answer 11

an agreement where multiple parties settle their claim at the same time; must not participate unless lawyer discloses to each client existence/nature of all claims/pleas and each clients gives informed consent in signed writing

Question 12

compensation from someone other than client

Answer 12

client needs to give informed consent, no interference w/ lawyer’s independent professional judgment or w/ lawyer-client relationship, confidential info still protected

CA requires written consent

Question 13

settling existing malpractice claim w/ unrepresented client or former client

Answer 13

have to advise in writing that independent counsel is desirable and give the person a reliable chance to consult w/ independent counsel

Question 14

prospectively limiting liability for malpractice

Answer 14

can’t do it unless client independent represented
CA: can’t do it at all

Question 15

acquiring literary or media rights

Answer 15

can’t do during rep but may acquire after legal matter is done/including eppeals
CA: treated as biz transaction

Question 16

acquiring proprietary interest

Answer 16

CA: treats as biz transaction

Question 17

foreclosure or sale (CA only)

Answer 17

lawyer cant purchase property directly or indirectly in action where they are a party or rep seller if purchaser is family member/other lawyer at firm

Question 18

sexual relationships

Answer 18

not allowed unless predates l-c relationship
- no imputation
- pre-existing might still cause conflict if it will materially limit the l-c relationship and implicate general conflict of interest rule for current clients

Question 19

opposing former client in same or substantially the same matter

Answer 19

can’t represent one client whose interests are materially adverse to those of a former client in a matter that is the same or substantially related to a matter in which the lawyer represented the former client

former client can consent in writing (but consider whether still risk of material limitation by former client’s confidential info)

Question 20

what is a substantially related matter

Answer 20

same transaction/dispute or substantial risk that confidential factual info would have been normally obtained in prior would materially advance client’s position int he subsequent matter (actual info exchange is not required)

Question 21

what to do if lawyer’s former client conflict arises out of a lawyer’s association with a former firm (firms conflict)

Answer 21

imputation will be cured if screened, no fee sharing, and former client is given notice

CA: screening only cures if the disqualified lawyer did not substantially participate in the same or substantially related matter at the former firm

*former client can consent in writing

Question 22

what to do when firm wants to represent an opposing client of a departed lawyer

Answer 22

generally not prohibited unless:

1. matter is the same or substantially related to that in which the formerly associated lawyer represented the former client AND
2. at least one remaining lawyer in the firm has confidential info that is material to the matter

*former client can consent in writing

Question 23

opposing prospective client in substantially related matter

Answer 23

can’t if info could be significantly harmful (CA: material) to prospective client unless BOTH current and prospective client provide informed consent, confirmed in writing