Conflicts of Interest

Question 1

Under rule 1.7, a conflict of interest: (with a) current client, exists if:

Answer 1

(1) the representation of one client will be directly adverse to another client; or
(2) there is a significant risk that the representation of one or more clients will be materially limited by the lawyer’s responsibilities to another client, a former client or a third person or by a personal interest of the lawyer.

Question 2

Notwithstanding a concurrent conflict of interest under 1.7(a), clients may consent if:

Answer 2

• Lawyer has reasonable belief that the conflict won’t impede representation [1.7(b)(1)]
• Other law doesn’t prohibit consent 1.7(b)(2)
• or is otherwise un-consentable because both parties are involved in same suit [1.7(b)(3)]

Question 3

Rule 1.10 Imputation Of Conflicts Of Interest: General Rule
(a) While lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by Rules 1.7 or 1.9, unless

Answer 3

(1) the prohibition is based on a personal interest of the disqualified lawyer and does not present a significant risk of materially limiting the representation of the client by the remaining lawyers in the firm; or
(2) the prohibition is based upon Rule 1.9(a) or (b) and arises out of the disqualified lawyer’s association with a prior firm, and

(i) DQ’d lawyer is timely screened and is apportioned no fee therefrom;
(ii) written notice is promptly given to any affected former client, so the client can ascertain compliance with this Rule, which shall include a description of the screening procedures employed; a statement of the firm’s and the screened lawyers compliance with these Rules; a statement that review may be avialble before a tribunal; and an agreement by the firm to respond promptly to any written inquiries or objections by the former client about screening procedures; and
(iii) certifications of compliance with these Rules and with the screening procedures are provided to the former client by the screened lawyer and by a partner of the firm, at reasonable intervals upon the former client’s written request and upon termination of the screening procedures.

Question 4

1.10(b) When a lawyer has terminated an association with a firm, the firm is not prohibited from thereafter representing a person with interests materially adverse to those of a client represented by the formerly associated lawyer and not currently represented by the firm, unless:

Answer 4

(1) the matter is the same or substantially related to that in which the formerly associated lawyer represented the client; and
(2) any lawyer remaining in the firm has information protected by Rules 1.6 and 1.9(c) that is material to the matter.

Question 5

Your firm can’t go against your firm’s other clients… what rules?

Answer 5

1.10(a)/1.7(a)

Question 6

List 5 factors useful in evaluating positional conflicts in 1.7(a)(2) and comment 24

Answer 6

1. Where cases are pending (trial/appellate, jurisdiction)
2. Whether the issue is substantive or procedural (substantive generally more likely to create conflict)
3. Temporal relationship between the matters (pending at the same time, more likely to conflict)
4. Significance of the issue to the interest of the clients
5. Clients reasonable expectations in retaining the lawyer

Question 7

Duties To Prospective Client rule?

Answer 7

Rule 1.18

Question 8

Under Rule 1.18 (a), who is a prospective client?

Answer 8

A person who consults with a lawyer about the possibility of forming a client-lawyer relationship with respect to a matter is a prospective client.

Question 9

Under Rule 1.18 (b), even if no client-lawyer relationship ensues, what can’t a lawyer do?

Answer 9

a lawyer who has learned information from a prospective client shall not use or reveal that information, except as Rule 1.9 would permit with respect to information of a former client.

Question 10

Duties to prospective client 2-step analysis?

Answer 10

Step 1: Is this person a prospective client?
1.18(a) comment 2 – look for specifically inviting or requesting client information

Step 2: If she is a prospective client, can you continue to represent the other party?
1.18(c) – consent

Question 11

Resolving Prospective-Client Conflicts 1.18(d)

Answer 11

Method 1: informed consent
Method 2: screening and notice (only works with prospective client conflicts)
1.0 (k) “Screened” denotes the isolation of a lawyer from any participation in a matter through the timely imposition of procedures within a firm that are reasonably adequate under the circumstances to protect information that the isolated lawyer is obligated to protect under these Rules or other law.

If communication for purposes of disqualifying then no conflict (comment 2)

Question 12

Client-Lawyer Relationship
Rule 1.8 Conflict Of Interest: Current Clients: Specific Rules
(b)

Answer 12

A lawyer shall not use information relating to representation of a client to the disadvantage of the client unless the client gives informed consent, except as permitted or required by these Rules.

Question 13

When corporation is talking through a CEO

Answer 13

• Corporation is the client 1.13(a)
  Corporations can only act through agents

Don’t have relationship with employees unless explicitly state

Question 14

Officer and employee wrongdoing: shredding documents

Answer 14

• 1.13(b)
  No duty to keep CEO’s secrets, duty to report agent’s actions (that you KNOW) that are either unlawful or likely to “substantially injure” the org.– report up the corporate ladder (or sometimes outside the org. look to (c))
• 1.13(c) Except as provided in (d) if:
  1) despite a lawyer’s efforts to report to “highest [organizational] authority insists upon or fails to address”
  AND 2) the violation is reasonably certain to result in substantial injury to the organization, then the lawyer may reveal information relating to the representation whether or not Rule 1.6 permits such disclosure (but only to the reasonable extent to prevent harm).
• 1.13 (d)
  paragraph (c) will NOT APPLY with respect to information relating to a lawyer’s representation of an organization to investigate an alleged violation of law, or to defend the organization or an officer. employee or other constituent associated with the organization against a claim arising out of an alleged violation of law.

1. 13 (e) - if you believe that org retaliated against you, let the highest chain of command know
2. 13 (f) - In dealing with organizational constituents the lawyer SHALL EXPLAIN when the lawyer knows or should know that the organzation’s interests are adverse to those of the constituents.

Question 15

REPRESENTING CRIMINAL CO-DEFENDANTS

2-step analysis

Answer 15

Step One: is there a potential conflict
1.7(a)(1) – direct adversity; cross examine
1.7(a)(2) – one to testify against another
Does it matter if your partner represents one?
YES 1.10(a) if you can’t represent both, your partner can’t represent one
“Conflict for one of you is conflict for both of you”

Step Two: Is the conflict consentable?
1.7(b)(2) – in some jurisdictions, is prevented by state law to represent criminal co-defendants
(on test will be told)
(many – for death penalty)

Question 16

Co-Defendant must show conflict of interest that actually affected the adequacy of his representation under what case?

Answer 16

Cuyler v. Sullivan

Question 17

Former Client Conflict Analysis

Answer 17

1. Is it a former client?
2. If so, are you representing a current client against the former client in the same or a substantially related matter?
   a. What confidential information would “normally” (not actually) have learned in the former client’s matter?
   b. Would this confidential information help the current client?
   (If answer is yes, is there a substantial relationship?)
3. Are you materially adverse to your client?

Question 18

Options if You Learn You Are Adverse to Your Former Client

Answer 18

1. Conclude unrelated and proceed without consent
2. Conclude substantial relationship and decline
3. Disclose to former client and ask for WRITTEN** consent

Question 19

What does it mean to be substantially related (as for former client conflict)?

Answer 19

] Matters are “substantially related” for purposes of this Rule if they involve the same transaction or legal dispute or if there otherwise is a substantial risk that confidential factual information as would normally have been obtained in the prior representation would materially advance the client’s position in the subsequent matter.

Question 20

Lawyers Changing Firms

Answer 20

1.9(b) – former firm client

Can’t represent against former client where you gained information

No conflict where old firm represented and you know nothing about the matter

When directly worked on matters [1.9(a)] personal involvement

Buddy at firm talked directly about it to you even though you weren’t on case – 1.9(b)

Question 21

Need for Screening:

Answer 21

• No leaks
• Notification to the firm
• Notification to opposing counsel to give opportunity to object

Question 22

Lateral Screening Exception

Answer 22

1. Conflict must be a former client conflict under 1.9
2. Conflict must have arisen out of your association with a prior firm
3. You must be timely screened from participating against your old client

Question 23

Forbidden Fees
1.5(a) – no unreasonable fees

FACTORS:

Answer 23

(1) Time, skill, novelty of issue
(2) Opportunity cost
(3) Local custom
(4) Stakes
(5) Exigency
(6) Course of dealing
(7) Qualification (about well-respected, known attorney in area)
(8) Fixed or contingent (bigger because lawyer accepts risk)

Question 24

In re Fordham: “

Answer 24

“Big shot tries a new area of law.” Client asked to sign promissory note. Big firm lawyer working same way in content where it was not appropriate (criminal).

Question 25

Fee Disclosure – 1.5(b)
“Preferably” = writing optional

However, when is writing not optional for fees?

Answer 25

Writing only required in contingent fee 1.5(c)

Question 26

1.5(b)

Answer 26

• Must notify of basis or rate of fees and expenses
• Notice must be within a reasonable time after beginning representation
• Writing is optional
o Note: should confirm in writing just to protect yourself

Question 27

Increasing Fee Arrangements

Answer 27

Modifying contract is enforceable if it is fair and equitable in view of circumstances not anticipated by the parties when the contract was made.

Question 28

Hourly Billing and Fraud

Answer 28

• Probably an 8.3(a) violation not report

Question 29

Contingent Fee Agreements

• Must include:

Answer 29

o Method of calculating fee
 Percentages by litigation stage (voir dire, settlement, trial, appeal)
 Expenses (lawyer or client responsibility) – come off the top or bottom
 Expenses deducted before or after fee is calculated
• Before = more for lawyer

Question 30

1.5(d) – No contingent fees to defend criminal cases

Answer 30

Forbidden Contingency Fees:
• Criminal cases and
• Divorce cases

NOTE: prosecutors can get raises for prosecuting more cases

Question 31

Two Types of “Retainers”

• Both called “retainer”:

Answer 31

o Security Deposit: client gives lawyer money against which lawyer bills. It is like a deposit to guarantee payment.
o Classic Retainer: The client pays lawyer to guarantee lawyer’s availability. Lawyer “earns” the money without doing any particular task. Note: State bar hates this.

Question 32

1.15(a) Safekeeping Client Funds

Answer 32

• Must keep client money in separate account
• Must keep records of funds for 5 years after representation
• May put lawyer’s own money in account only to pay bank fees (see 1.15(b)); and
• Absolutely NO borrowing unearned client money.
o Keep accurate records to know whose money is whose

Question 33

What Constitutes Client Funds/Money:

Answer 33

• Unearned security-deposit retainers
• Settlement proceeds
• Expense prepayments
• Any other money belonging to the client

Question 34

LAWYER/CLIENT CONFLICTS – ODDS & ENDS

Answer 34

• Business transactions with clients – prohibited unless you jump through some disclosure and consent hoops. 1.8(a); bad idea.
• Substantial, solicited gifts from clients, including gifts in a client will – generally prohibited (unless attorney related to client). 1.8(e).
• Sex with clients – prohibited unless the relationship is consensual and began before representation. 1.8(j). But see TDRPC 1.08 (sex with clients not prohibited – still a terrible idea).