CONFLICTS OF INTEREST Flashcards
CONFLICTS OF INTEREST // Rules
o R.1.7 CONFLICT OF INTEREST: CURRENT CLIENTS
o R.1.13 ORGANIZATION AS CLIENT
o R.1.18 DUTIES TO PROSPECTIVE CLIENT
o R.1.8(f) & (g) CONFLICT OF INTEREST: CURRENT CLIENTS: SPECIFIC RULES
o R.1.9 DUTIES TO FORMER CLIENTS
o R.1.10 IMPUTATION OF CONFLICTS OF INTEREST: GENERAL RULE
GENERAL PRINCIPLES // policies/duties behind conflicts of interest
- Duty to exercise independent judgment
- Duty to be loyal and diligently represent clients
- Duty to preserve client confidences
GENERAL PRINCIPLES // 3 levels of seriousness for conflicts
- Most serious = so serious that even consent would not solve the problem, should decline/withdraw
- Middle level = may be adequately addressed if affected clients are willing to provide informed consent
- Lowest level = may proceed without advising client or asking for consent
KEY TERMS // concurrent conflicts
= 2 current (or 1 prospective) clients
KEY TERMS // successive conflicts
= 1 current client and 1 former client
KEY TERMS // imputed conflicts
= if 1 lawyer has conflicts, infect the other lawyers in the firm as to this client
KEY TERMS // one-lawyer conflict
- Conflict between 2 clients of 1 lawyer (contrasted to imputed conflicts)
R.1.7 CURRENT CLIENT CONFLICTS // breakdown/outline of R.1.7
- R.1.7(a) determines when you have conflict
- R.1.7(b) helps to resolve conflicts
R.1.7 CURRENT CLIENT CONFLICTS // direct adversity under R.1.7(a)(1)
= if lawyer’s conduct on behalf of 1 client requires the lawyer to act against the interest of another current client
NOTE: direct adversity is more serious subset of material limitation (AKA if directly adverse, then necessarily material limitation)
R.1.7 CURRENT CLIENT CONFLICTS // 3 key examples of direct adversity
- lawyer who represents client A in one matter sues client A in second matter on behalf of client B (even if client A is represented by someone else)
- lawyer acts adversely to client in litigation (EXAMPLE = cross-examining)
- outside of litigation, lawyer undertakes adversarial negotiation against another client (BUT if negotiation is oriented more toward conciliation/cooperation, less likely to be found to involve direct adversity)
R.1.7 CURRENT CLIENT CONFLICTS // material limitation under R.1.7(a)(2)
= representation of 1 client is materially limited by 1 of the other responsibilities of the lawyer
KEY EXAMPLE = co-D’s/P’s
R.1.7 CURRENT CLIENT CONFLICTS // 5 common examples of material limitation
“other responsibilities” that might materially limit a lawyer’s representation of a client include obligations to
- another present client
- a former client
- someone else to whom a lawyer owes a duty
- someone other than the client who is paying the lawyer’s fee
- lawyer’s own financial, employment, personal, or other interests
R.1.7 CURRENT CLIENT CONFLICTS // analysis of conflict of interest problems
resolution of conflict of interest problem requires lawyers to
- clearly identify the client or clients
- determine whether a conflict of interest exists
- decide whether the representation may be undertaken despite the existence of conflict (whether consentable)
- if so, consult with clients affected and obtain informed consent confirmed in writing
CMT 2, R.1.7
R.1.7 CURRENT CLIENT CONFLICTS // resolving current client conflicts under R.1.7(b)
- Must satisfy all conditions of (b) to resolve conflict by informed consent (= consentable)
- If cannot satisfy all conditions = nonconsentable
R.1.7 CURRENT CLIENT CONFLICTS // 4 R.1.7(b) conditions
- Lawyer reasonably believes she will be able to competently and diligent represent client
- Representation not prohibited by law (EXAMPLE = in some states, cannot represent co-Ds in capital cases)
- Representation doesn’t involve assertion of claim by client against other in same proceeding before tribunal
- Each affected client gives informed consent confirmed in writing
R.1.7 CURRENT CLIENT CONFLICTS // confirmed in writing
confirmed in writing = denotes informed consent that is given in writing by the person or a writing that lawyer prompt transmit to the person confirming an oral informed consent
- if not feasible to obtain/transmit writing at time of giving informed consent, lawyer must obtain/transmit within reasonable time thereafter
R.1.7 CURRENT CLIENT CONFLICTS // consent – advance waivers
= client consents early in litigation to possible conflicts in future
VALIDITY of advance waiver = depends on factors in SEE CMT 22, PG. 348
R.1.7 CURRENT CLIENT CONFLICTS // nonconsentable under R.1.7(b)
3 times when conflict is nonconsentable (reciprocal to R.1.7(b) conditions)
- Lawyer has unreasonable belief in ability to diligently and competently represent client (SEE PG. 342)
- Representation prohibited by law
- Representation involves litigation in which lawyer is representing one client against another client whom lawyer is representing in that matter
R.1.7 CURRENT CLIENT CONFLICTS // imputation of concurrent conflicts
R.1.10(a) = firm prohibited from representing conflicting client unless 1 lawyer could’ve under R.1.7 and R.1.9
AKA if 1 lawyer has conflict with 1 other lawyer in firm = ALL lawyers in firm have conflict
(general prohibition with 2 exceptions)
R.1.18 PROSPECTIVE CLIENT CONFLICTS // duties to prospective clients
- Lawyers owe duties to prospective client under R.1.18
- Much more narrow than R.1.7
R.1.18 PROSPECTIVE CLIENT CONFLICTS // prospective client
- Definition of prospective client = R.1.18(a)
- Whether communication constitutes consultation depends on circumstances (CMT 2)
- SEE CMT 2
- SEE PG. 371-72 for all notes/key takeaways
R.1.18 PROSPECTIVE CLIENT CONFLICTS // analysis
- R.1.18(c) = Shall not represent client
- with interests materially adverse to those of a prospective client
- in the same or substantially related matter
- IF lawyer received info from prospective client
- that could be significantly harmful to that person in the matter
R.1.18(d) = EXCEPT IF
a. Both affected and prospective clients
- give informed consent
- confirmed in writing OR
b. Lawyer
- takes reasonable measures to avoid exposure to more disqualifying information than necessary to determine whether to represent prospective client
- AND timely screen
- AND written notice promptly given to prospective client
R.1.18 PROSPECTIVE CLIENT CONFLICTS // screened
R.1.0(k) defines “screened” = SEE PG. 373, FN 87
R.1.7 REPRESENTING BOTH PARTIES TO A TRANSACTION // general principles
- SEE CMT 7 = direct adversity in transaction matters
- SEE CMT 28 = whether consentable depends on circumstances
- Is it antagonistic?
- Cannot avoid potential conflict by acting like “mere scrivener”
R.1.13 REPRESENTING ORGANIZATIONS // general principles
- Client = organization itself under R.1.13(a)
- Doesn’t include officers, directors, employees, shareholders, and other constituents (CMT 1, 2)
- Possible to represent both organization and its employees/affiliates (CMT 12, R.1.13(g)) UNLESS interests of organization and employee conflict
- Need to assess if consent necessary or nonconsentable
- Can’t keep disclosure by employees confidential from organization, make sure employees know that (CMT 10)
R.1.13 REPRESENTING ORGANIZATIONS // illegal act/harm to org
If officer/employee threatens to do something that’s illegal or that would harm the organization
= Shall report up under R.1.13(b)
- Mandatory
- Must do this first
If highest authority refuses to act properly, may report out under R.1.13(c)
R.1.13 REPRESENTING ORGANIZATIONS // 4 requirements to trigger duty to report up under R.1.13(b)
- Lawyer for organization knows
- That officer/employee/etc is engaged in action or intend to act or refuses to act in matter related to representation
- Violation of legal obligation to organization or violation of law reasonably likely to be imputed to organization
- That’s likely to result in substantial injury to organization
= Then proceed as reasonably necessary in best interest of organization
R.1.13 REPRESENTING ORGANIZATIONS // considerations in reporting up more under R.1.13(b)
- If reasonably believes necessary, shall refer to higher authority
- Considerations in deciding to report up SEE CMT 4
R.1.13 REPRESENTING ORGANIZATIONS // 2 requirements to trigger duty to report out under R.1.13(c)
- Despite best efforts to report up, the highest authority that can act on behalf of the organization insists upon or fails to address in a timely and appropriate manner
- Lawyer reasonably believes violation reasonably certain to result in substantial injury to organization
= then may reveal info but only if and to the extent lawyer reasonably believes necessary to prevent substantial injury whether or not R.1.6 confidentiality permits UNLESS hired to investigate/represent org in that particular fraud/crime
REPRESENTING CRIMINAL CO-DEFENDANTS // rule
- If potential for conflict is so great, lawyer should decline to represent co-defendants in criminal cases (CMT 23 of R.1.7)
- No full-out prohibition, but ABA strongly disfavors and argues against/discourages
REPRESENTING CRIMINAL CO-DEFENDANTS // 2-part test
- 2-part test for if joint representation of co-defendants violates 6th amendment
- SEE PG. 339-400
- Compare to rule when lawyer objects to representation because of conflict and judge overrules and requires lawyer’s representation = reversal is automatic, no showing of prejudice is requires
REPRESENTING FAMILY MEMBERS // divorce
- Most states forbid, but permit settlements
- RULES don’t expressly permit, but don’t love
- R.1.7 still applies
- whether conflict is consentable depends on circumstances (key q = is it antagonistic?)
REPRESENTING FAMILY MEMBERS // estate planning
- Under normal circumstances, permissible (and common)
- But issues can arise
- whether conflict is consentable depends on circumstances (key q = is it antagonistic?)
REPRESENTING INSURANCE COMPANIES/INSURED PERSONS // client
- Client = individual insured, even if hired/paid by insurance company
- Contract may designate insurance company is also your client
- Can represent both as joint clients if interests of both are the same
REPRESENTING INSURANCE COMPANIES/INSURED PERSONS // conflict analysis
evaluate using R.1.7
REPRESENTING INSURANCE COMPANIES/INSURED PERSONS // 3 common potential sources of conflict
- Insurance company wants to settle, insured doesn’t
- Damage award may exceed amount covered by policy
- Insured may liable for accident (AKA insurance co. contesting coverage)
REPRESENTING INSURANCE COMPANIES/INSURED PERSONS // conflict resolution
- R.1.8(f) will always apply when 3P is paying lawyer for representation of client
- EXAMPLES = insurance company/insured, parent/minor
- If conflict arises and lawyer decides to continue representation, apply R.1.7
REPRESENTING PLAINTIFFS IN CLASS ACTIONS // issue
Traditional principles for analysis of conflicts of interest don’t fit
REPRESENTING PLAINTIFFS IN CLASS ACTIONS // 3 common examples of potential conflicts
SEE PG. 420
REPRESENTING PLAINTIFFS IN CLASS ACTIONS // client
- client = only named clients (for purposes of evaluating conflicts)
- Unnamed class members generally not considered to be clients (R.1.7 CMT 25)
REPRESENTING PARTIES TO AGGREGATE SETTLEMENTS OF INDIVIDUAL CASES // requirements
R.1.8(g) requires lawyers to disclose to each client
1. The total amount of settlement
2. The details of every other client’s participation in the settlement
3. Amount of fees/cost to be paid to lawyer
BUT must first get informed consent from all clients in writing
REPRESENTING PARTIES TO AGGREGATE SETTLEMENTS OF INDIVIDUAL CASES // informed consent
- Have to get consent BEFORE engaging in settlement talks
- ALSO should advise each client that if any client refuses offer, defendant may withdraw it
- Differences in willingness to make/accept an offer is part of risk, should be discussed when getting informed consent (CMT 13)
REPRESENTING PARTIES TO AGGREGATE SETTLEMENTS ON INDIVIDUAL CASES // approach
Rule applies to both mass torts and other situations whether lawyer represents 2 parties and is offered single lump sum to apportion
R.1.9 CONFLICTS WITH FORMER CLIENTS // successive conflicts
Defined in R.1.7(a)(2) = conflict between at least 1 former client and 1 current client
R.1.9 CONFLICTS WITH FORMER CLIENTS // analysis
- apply R.1.9 for impact on former client
- apply R.1.7 for impact on present client
R.1.9 CONFLICTS WITH FORMER CLIENTS // former client
client becomes former client only after termination of lawyer-client relationship (CMT 1)
R.1.9 CONFLICTS WITH FORMER CLIENTS // nonconsentable conflicts
- No nonconsentable conflicts under R.1.9 = former clients may always consent
- Rationale = ABA views potential conflicts with former clients as less serious
R.1.9 CONFLICTS WITH FORMER CLIENTS // same matter
= SEE PG. 436
R.1.9 CONFLICTS WITH FORMER CLIENTS // substantial relationship
= SEE pg. 437
IMPUTATION OF FORMER CLIENT CONFLICTS TO AFFILIATED LAWYERS // rules
- R.1.9 = lawyer conflict rule
- R.1.10 = firm conflict rule
IMPUTATION OF FORMER CLIENT CONFLICTS TO AFFILIATED LAWYERS // use
General rule re: former clients
IMPUTATION OF FORMER CLIENT CONFLICTS TO AFFILIATED LAWYERS // same or substantially-related matter
= anything confidential that could have been learned
- “Could have been” = hypothetically (not actually) acquired
- Fact-specific, objective standard
IMPUTATION OF FORMER CLIENT CONFLICTS TO AFFILIATED LAWYERS // application
Only comes into play with substantially-related
AND materially adverse
UNLESS informed consent
R.1.10
IMPUTATION OF FORMER CLIENT CONFLICTS TO AFFILIATED LAWYERS // rules
R.1.9 = lawyer conflict rule R.1.10 = firm conflict rule
REPRESENTING COMPETITOR OF FORMER CLIENT // general rule
= ordinarily not conflict re: economic competitors (CMT 6 of R.1.7)
REPRESENTING COMPETITOR OF FORMER CLIENT // 5 factors
MARITRANS 5 factors
AKA hot potato situations (“firm may not drop a client like a hot potato, especially if it is in order to keep happy a far more lucrative client”)
1. Extent to which the fiduciary was involved in its former client’s affairs
2. ?!
3. ?!
4. Firm’s unseemly handling of the potential conflict
5. Absence of any lapse of time between representation of competitors
REPRESENTING COMPETITOR OF FORMER CLIENT // R.1.9(b) former client of firm
- Same or substantially-related matter
- AND actually acquired confidential information
- AND materially adverse
= can’t do it UNLESS informed consent in writing
REPRESENTING COMPETITOR OF FORMER CLIENT // R.1.10(a) general rule
= general rule that 1 lawyer’s conflict is imputed to all others at his firm
AKA firm of lawyers is essentially 1 lawyer for purposes of governing loyalty to client (CMT 2)
REPRESENTING COMPETITOR OF FORMER CLIENT // R.1.10(a) 2 exceptions
Exception 1 = personal interest under r.1.10(a)(1)
o Not imputed if conflict comes from personal interest AND other lawyers don’t share that same interest
o SEE CMT 3 for examples of personal interests
Exception 2 = former firm conflict under R.1.10(a)(2)
o Not imputed if prohibition based on R.1.9(a) or (b)
o AND arises out of association with proper firm
o AND timely screened
o AND written notice promptly given
o AND certificate of compliance
REPRESENTING COMPETITOR OF FORMER CLIENT // permitted screening examples
- SEE BTM OF PG. 460 TO 461 for other situations in which MR permit screening
REPRESENTING COMPETITOR OF FORMER CLIENT // screening definition
Screened = isolation of lawyer from any participation in matter through 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 (defined in R.1.0(k))
REPRESENTING COMPETITOR OF FORMER CLIENT // screening use
R.1.10 allows screen to cure disqualification ONLY WHEN SEE PG. 460 1ST BULLETED LIST OF 3
REPRESENTING COMPETITOR OF FORMER CLIENT // screening purpose
- SEE CMT 9 OF R.1.0 purpose of screen = ?! (CMT 9 OR R.1.0)
REPRESENTING COMPETITOR OF FORMER CLIENT // former firm’s conflict
R.1.10(b) = if a lawyer leaves a firm, his former firm should evaluate new business that conflicts with former employee’s business at the firm
Generally, conflict leaves firm when lawyer leaves UNLESS
- Same or substantially-related matter AND
- Remaining lawyer knows material confidential information
REPRESENTING COMPETITOR OF FORMER CLIENT // waiver of disqualification
R.1.10(c) = allows R.1.10 disqualifications to be waived under conditions stated in R.1.7 (informed consent confirmed in writing)
REPRESENTING COMPETITOR OF FORMER CLIENT // firm
- Firm = includes in-house legal department, partnerships, corporation, etc. (defined in CMT 1 TO R.1.10 for purposes for conflicts)
- Whether two or more lawyers constitutes firm depends on facts
- SEE CMT 2 for specific factors
REPRESENTING ORGANIZATION // lawyer duty for employee’s breach/illegal act – procedure
if a lawyer learns that a corporate employee has breached his or her obligations to the corporation or violated the law in such a fashion that the act may be imputed to the corporation and is likely to result in substantial injury to the corporation, the lawyer should proceed as follows (minimizing disruption to the entity as much as possible):
- ask the employee to reconsider (if possible)
- if that fails, advise the employee to get a separate legal opinion (assuming there is a dispute as to the legality of the act)
- if that fails (and the matter is sufficiently serious), disclose the matter to the employee’s boss (all the way to the CEO, if necessary); the Rules give lawyers some discretion to take this step; for securities lawyers, the Sarbanes-Oxley Act requires lawyers to refer such matters to the Chief Legal Officer
- if that fails, disclose the matter to the Board of Directors; the Rules give lawyers some discretion to take this step; for securities lawyers, the Sarbanes-Oxley Act requires lawyers to refer such matters to the Board, an audit committee, or a committee of outside directors
- if that fails and the entity is clearly violating the law, the lawyer may (but is not required to) reveal information relating to the representation to the appropriate authorities or injured parties, but only if and to the extent the lawyer reasonably believes necessary to prevent substantial injury to the organization; for securities lawyers, the Sarbanes-Oxley Act gives lawyers the discretion (but does not require them) to disclose such matters to the SEC
REPRESENTING ORGANIZATION // lawyer duty for employee’s breach/illegal act – example
L represents ABC Corp.
X is vice-president of ABC.
While working with X on the sale of ABC securities, L learns that X is misrepresenting the value of the securities to the public in violation of federal securities law.
Such illegal conduct could be imputed to ABC and is quite serious.
L informs X of the violation, but X ignores L.
What should L do?
- explain to X that L represents ABC and not X;
- advise X to reconsider or seek a second legal opinion;
- if that fails, reveal the fraud to X’s superior (the Sarbanes-Oxley Act requires this act), and continue all the way to the Board, if necessary to resolve the matter;
- if that fails, L may (but is not required to) reveal the fraud to the SEC (or other appropriate party) if L reasonably believes necessary to prevent substantial injury to the organization
REPRESENTING ORGANIZATION // lawyer duty for employee’s breach/illegal act – 2 key takeaways
- a lawyer may not reveal information outside the organization relating to the 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
- a lawyer who reasonably believes that she has been discharged because of the lawyer’s actions taken pursuant to Rule 1.13 (as stated in the preceding paragraphs of this Section), or who withdraws under circumstances that require or permit the lawyer to take action under that Rule, shall proceed as the lawyer reasonably believes necessary to assure that the organization’s highest authority is informed of the lawyer’s discharge or withdrawal
REPRESENTING ORGANIZATION // 4 key takeaways
- A lawyer who represents an entity (e.g., a corporation) represents the entity and not its officers, directors, employees, etc.
- when a corporation’s lawyer deals with corporate officers, directors, employees, or agents, the lawyer shall inform such individuals that the lawyer represents the entity, and not them as individuals, where the individual’s interests are adverse to the entity; the lawyer may advise the individual to obtain independent counsel (but should provide no other advise)
- a lawyer may jointly represent a corporation and one or more of its officers, directors, employees, etc., if such representation can be made without violating the rules regarding conflicts of interest between two current clients
- for purposes of the attorney-client privilege, communications between a corporation’s lawyer and corporate officers, directors, and employees are protected from disclosure if the communications relate to issues within the scope of the employee’s work and occur while the employee is employed by the corporation
4 rules for conflict between 2 current/regular clients // CONFLICT BETWEEN 2 CLIENTS OF SAME FIRM
- as part of the lawyer’s duty of loyalty, a lawyer shall not represent a person with an interest directly adverse (e.g., opposite side of transaction or litigation) to that of another current (or regular) client, unless both clients give informed consent in writing and the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to both clients (i.e., would a disinterested lawyer advise against the representation?)
- lawyer may not represent two concurrent clients if such joint representation is prohibited by other law (i.e., some states prohibit joint representation in certain criminal matters)
- also lawyer may not represent both clients if one of them is asserting a claim against the other in litigation. If a lawyer is disqualified under this rule, all lawyers in the lawyer’s firm are disqualified
- If a lawyer is disqualified under this rule, all lawyers in the lawyer’s firm are disqualified
3 rules for conflict between 2 current/regular clients // CONFLICT BETWEEN CURRENT AND FORMER CLIENT
- a lawyer may represent a person in litigation or a transaction against a former client as long as the matter is not substantially related to the matter the lawyer handled for the former client; if the matters are substantially related, the lawyer must get the informed written consent of the former client.
- a lawyer who has confidential information about a former client may not use that information to the disadvantage of that former client, unless permitted to do so by Rule 1.6 or if the information has become public
- If a lawyer is disqualified under this rule, the disqualification is imputed to other members of the lawyer’s firm
material limitation // CONFLICT BETWEEN CURRENT CLIENT AND 3RD PARTY
a lawyer shall not represent a person if there is a serious risk that the representation will be materially limited by the lawyer’s responsibilities to
- another client
- a former client
- a third person
- the lawyer’s own interests, unless the client gives informed consent in writing and the lawyer reasonably believes that the client will not be adversely affected
4 examples // CONFLICT BETWEEN CURRENT CLIENT AND 3RD PARTY
- A asks L to represent him in a quiet title lawsuit against X. The property is Blackacre. A claims ownership, as does X. X is L’s father-in-law. L should decline to represent A because his representation of A would be materially limited by his relationship to X. This is probably true even if A gives informed consent.
- A asks L to represent him in a quiet title lawsuit against ABC Corp. The property is Blackacre. A claims ownership, as does ABC. L owns 10% of ABC’s stock. L should decline to represent A because his representation of A would be materially limited by L’s own interests. This is probably true even if A gives informed consent.
- A and B are being tried jointly for burglary. A and B ask L to represent them jointly. L should decline, unless (1) there are no existing or potential conflicts between A and B (i.e., A is prepared to plea and testify against B); (2) both parties consent knowing the implications (i.e., L will be forced to withdraw if a conflict between A and B ensues) and risks (i.e., there is no attorney-client privilege between joint clients) of joint representation; and (3) the lawyer reasonably believes that neither client will be adversely affected. Note that it is rarely appropriate for a lawyer to represent joint clients in a criminal matter; lawyers have more flexibility to represent joint clients in civil cases.
- Lawyer A represents C in litigation against D. D asks Lawyer B, who is Lawyer A’s mother, to represent D. Lawyer B may not represent D unless a reasonable lawyer would conclude that such representation is feasible and D gives informed written consent to the conflict. However, other lawyers in B’s firm may represent D, as such conflicts are personal.
2 rules – conflicts that follow lawyer to her new firm // CONFLICTS WHEN LAWYERS CHANGE FIRMS
- R.1.9(b)
- R.1.10(a)
HYPO // CONFLICTS WHEN LAWYERS CHANGE FIRMS
L is an associate at the Smith Law Firm. The Smith Firm represents P in a contract action against D. While the case is pending, L leaves the Smith Law Firm and joins the Jones Law Firm. The Jones Law Firm represents D in the contract action. (1) Can L work on the case at the Jones Law Firm? (2) Can the Jones Law Firm continue to represent D? – conflicts that follow lawyer to her new firm
because this is the same (or substantially related) matter that L’s former firm handled, and because D’s interest is materially adverse to P’s interest, L may not represent D if L acquired material Rule 1.6 information about P while at the Smith Law Firm
if L is barred from representing D, the disqualification is not imputed to other members of the Jones Law Firm if
- L is timely screened from any participation in the matter and is apportioned no part of the fee;
- a detailed written notice is promptly given to P; and
- certifications of compliance with these screening procedures are provided to P upon written request (2009 amendment)
Conflicts at the Former Firm after the Lawyer Leaves (R.1.10(b)) // CONFLICTS WHEN LAWYERS CHANGE FIRMS
L is a partner in the Smith Law Firm. While at the Smith Law Firm, L represents P in a contract action against D. L leaves the Smith Law Firm and joins the Jones Law Firm. L takes P (and P’s case against D) with him to the Jones Law Firm. The Smith Law Firm no longer represents P in any matter. (1) May the Smith Law Firm now represent D in her action against P? (2) May the Smith Law Firm represent X in an unrelated case against P?
- when a lawyer leaves a firm (and takes a client with her), the firm is not prohibited from representing a person with an interest materially adverse to that former client (if it’s a present client, Rule 1.7(a) applies), unless the representation involves the same or a substantially related matter and any lawyer remaining in the firm has Rule 1.6 information about the former client (this conflict may be waived by the former client). Thus, in the hypo, the Smith Law Firm could not represent D in P v. D (which is the same case that L handled for P at the Smith Law Firm) if any lawyer at the Smith Law Firm has Rule 1.6 information about P (which is quite likely).
- as to the unrelated case, the Smith Law Firm could represent X in his suit against P.
3 takeaways – imputed disqualification // CONFLICTS WHEN LAWYERS CHANGE FIRMS
- if a lawyer is disqualified because of a conflict of interest, the lawyer’s entire firm is disqualified, except for Rule 1.8(j) conflicts (sexual relationships with clients), Rule 1.9(b) (former clients of a new partner or associate, if properly screened), and Rule 1.11 or 1.12 conflicts (conflicts caused by lawyers moving between the government and private practice)
- conflict will not be imputed to the firm, however, if it is based on a “personal interest” (e.g., the political beliefs) of the prohibited lawyer and does not present a significant risk of materially limiting the representation of the client by the remaining lawyers in the firm
- non-lawyers (e.g., secretaries, clerks, etc.) that have conflicts may be screened
R.1.7 CURRENT CLIENT CONFLICTS // informed consent
informed consent = denote agreement by a person to a propose course of conduct after lawyer communicated adequate info and explanation about material risks of and reasonable available alternative to proposed course of conduct
relevant factors include
- whether client or other person is experience in legal matters generally and in making decision of type involve
- whether client is independently represented by other counsel in giving consent
confidentiality between joint clients // R.1.7 THE BAD STUFF
- unless agreed otherwise, duty/privilege of confidentiality is common, info can be shared with both
- when one person discloses something adverse to another and ask to keep it secret, must withdraw (cannot disclose)
- particularly important when representing both parties to a transaction
INCONSISTENT LEGAL POSITIONS IN TRIBUNALS // 5 factors
Factors relevant in determining whether the clients need to be advised of the risk include:
1. where the cases are pending
2. whether the issue is substantive or procedural
3. the temporal relationship between the matters
4. the significance of the issue to the immediate and long-term interests of the clients involved
5. the clients’ reasonable expectations in retaining the lawyer
= if there’s significant risk of material limitation, then absent informed consent of the affected clients, lawyer must refuse one of the representations or withdraw from one or both matters
