Conflicts of Interest

Question 1

The Seven Conflict Rules:

Answer 1

1. Rule 1.7 – Conflicts between Current Clients
2. Rule 1.8 – Conflicts created by Personal Interests
3. Rule 1.9 – Conflicts with Former Clients
4. Rule 1.10 – Imputation Rule
5. Rule 1.11 – Conflicts related to Government Employment
6. Rule 1.12 – Conflicts related to Former Judges and Arbitrators
7. Rule 1.13 – Conflicts in Entity Representation

Question 2

Rule 1.7 – Conflicts Between Current Clients

Rule 1.7(a):

Answer 2

• Except as provided in paragraph (b):
• A lawyer shall not represent a client if the representation involves a concurrent conflict

Question 3

What is a Concurrent Conflict?

Answer 3

• A concurrent conflict exists where:
  
  1. The representation of one client will be directly adverse to (against) 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, a third person or by a personal interest of the lawyer

Question 4

Directly Adverse – 1.7(a)(1)

Answer 4

• The representation of one client will be directly adverse to (against) another client

Question 5

Rule 1.7(a)(2) - Significant Risk of Material Limitation

Answer 5

• Even in the absence of direct adverseness, a conflict also exists
• if there is a significant risk that a lawyer’s ability to represent a client
• will be materially limited by the lawyer’s other responsibilities or interests

Question 6

Rule 1.7(b):

Answer 6

• If a concurrent conflict is present either under 1.7(a)(1) or (2),
• in order to determine whether the concurrent representation is permissible,
• a 1.7(b) analysis is required

Question 7

Rule 1.7(b) Analysis:

Answer 7

• The 1.7(b) analysis decides whether the 1.7(a) conflict can be remedied by client consent or,
• whether the conflict is so direct and intense,
• that regardless of client consent, the concurrent representation would be impermissible

Question 8

The Four Prongs of 1.7(b):

Answer 8

1. It must be reasonable to conclude that the lawyer can represent both clients competently and diligently (with equal loyalty);
2. The concurrent representation must not be prohibited by law;
3. The concurrent representation can not involve both sides of a claim in the same case; and,
4. Even if prongs (1) though (3) are satisfied, the representation is still impermissible unless each affected client gives informed consent, confirmed in writing

Question 9

Informed Consent:

Answer 9

• Rule 1.0(e) defines informed consent.
• In order to qualify as an informed consent each affected client must be made aware of:
  
  • the relevant circumstances; and of,
  • the material and reasonably foreseeable ways
  • that the conflict could have adverse effects on the interests of that client

Question 10

Confirmed in Writing:

Answer 10

• The confirmed in writing requirement is defined in Rule 1.0(b) and (n). According to these provisions, an informed consent must be:
  
  • Signed by the client; or,
  • Signed by the lawyer following an oral consent and promptly transmitted to the client in confirmation of the consent. (If prompt transmission is impossible, it must be transmitted within a reasonable time).

Question 11

Rule 1.8(a) – Business Transactions with Clients

Answer 11

• You shall not enter into a business transaction with a client
• or knowingly acquire an ownership, possessory, security or other pecuniary interest adverse to a client unless:
  
  • The transaction and terms are fair and reasonable to the client and are fully disclosed and transmitted in writing in a manner that can be reasonably understood by the client;
  • The client is advising in writing of the desirability of seeking and is given a reasonable opportunity to seek the advice of independent legal counsel on the transaction;
  • The client gives informed consent in a writing signed by the client to the essential terms of the transaction and the lawyer’s role in the transaction, including whether the lawyer is representing the client in the transaction

Question 12

Rule 1.8(b) – Use of Client Information

Answer 12

• A lawyer shall not use information relating to the representation of a client to the disadvantage of the client unless the client gives informed consent, except as permitted or required by these rules.
• To do otherwise violates the duty of loyalty
• Lawyer can not use a third person to circumvent this prohibition.
• Note: This rule does not prohibit uses that do not disadvantage the client

Question 13

Rule 1.8(c) – Gifts to Lawyers

Answer 13

• A lawyer shall not solicit any substantial gift from a client, including a testamentary gift,
• or prepare on behalf of a client an instrument giving the lawyer or a person related to the lawyer any substantial gift,
• unless the lawyer or other recipient is related to the client

Question 14

Rule 1.8(d) – Literary Rights

Answer 14

• Prior to the conclusion of representation of a client, a lawyer shall not make or negotiate an agreement giving the lawyer literary or media rights to a portrayal or account based in substantial part on information relating to the representation
• E.G., Johnny Cochran / O.J. Simpson

Question 15

Rule 1.8(e) – Financial Assistance to a Client

Answer 15

• A lawyer shall not provide financial assistance to a client in connection with pending or contemplated litigation except that:
  
  1. You may advance the costs and expenses of litigation, the repayment of which may be contingent on the outcome of the matter; and,
  2. When representing an indigent client, you may pay court costs and expenses of litigation on the client’s behalf.

Question 16

Rule 1.8(f) – Person’s Paying for Lawyer’s Services

Answer 16

• A lawyer shall not accept compensation for representing a client from one other than the client unless:
  
  1. The client gives informed consent;
  2. There is no interference with the lawyer’s independence of professional judgment or with the a/c relationship; and,
  3. Information relating to the representation is protected by Rule 1.6

Question 17

Rule 1.8(g) – Aggregate Settlements

Answer 17

• A lawyer who represents two or more clients shall not participate in making an aggregate settlement of the claims of or against the clients,
• or in a criminal case, an aggregated agreement as to guilty or nolo pleas,
• unless each client gives informed consent, in writing signed by the client

Question 18

Rule 1.8(h) – Limiting Liability and Settling Malpractice Claims

Answer 18

• A lawyer shall not:
  
  1. Make an agreement prospectively limiting the lawyer’s liability to a client for malpractice unless the client is independently represented in making the agreement;
  2. Settle a claim or potential claim for such liability with an unrepresented client or former client unless that person is advised in writing of the desirability of seeking and is given a reasonable opportunity to seek the advice of independent legal counsel in connection therewith.

Question 19

Rule 1.8(i) – Acquiring a Property Interest in Litigation

Answer 19

• A lawyer shall not acquire a propriety interest in the cause of action or subject matter of litigation the lawyer is conducting for a client except that the lawyer may:
  
  1. Acquire a lien authorized by law (retaining/charging) to secure attorney fees and expenses; and,
  2. Contract with a client for a reasonable contingent fee in a civil case

Question 20

Rule 1.8(j) – Lawyer/Client Sexual Relationships

Answer 20

• A lawyer shall not have sexual relations with a client unless a consensual sexual relationship existed between them when the attorney/client relationship commenced

Question 21

Rule 1.8(k) – Imputation

Answer 21

• Where lawyers are associated in a firm, a prohibition in the foregoing paragraphs (a) through (i) that applies to anyone of them shall apply to all of them. (In other words, the conflict is imputed to everybody).
• Note: Exception for Rule 1.8(j) – sexual relationships