conflicts of interest / duty of loyalty Flashcards
when a lawyer is both counsel for the organization and on BOD … conflict?
yes
meaning of imputation and standard for imputation
Imputation means that one lawyer’s conflict is considered to be the conflict of all lawyers in his firm, or defender/prosecutor’s office if the other lawyers knew or reasonably should have known that that lawyer is prohibited from representing the client
proper use of conflict checking system may help avoid lack of knowledge
what are the conflicts involving current clients
(1) direct adversity
A lawyer must not represent a client when the client will be directly adverse to another client in the same or in a separate proceeding
[NOT mere economic adversity]
(2) material limitation
A lawyer must not represent a client when there is a significant risk that the representation would be materially limited by:
(a) the lawyer’s personal interest, or
(b) the layers responsibilities to another client, former client, or third person
Ex: lawyer repping multiple parties on same side of a matter and parties have potential conflicting interests
Ex: lawyer owes duty to third party, such as board of directors of the client-organization
Ex: Lawyer has personal or financial interest in the matter involved (consider that starting a sexual relationship with client will materially limit your representation)
when undertaking common representation, what must lawyer always inform clients of:
AC privilege will not apply to their communications if the parties end up suing each other
how to resolve current client client conflicts (material limitation or direct adversity)
need all of these, otherwise, it is a NONwaivable conflict and you must withdraw
(1) lawyer reasonably believes she can competently and diligently represent the client despite the client (objective standard)
(2) representation is not prohibited by law
(3) it is not a proceeding where lawyer is on both sides of same litigation in same proceeding before a tribunal [this is never consentable]
(4) each affected client gives consent after consultation [must appreciate significance of the conflict and potential harms], memorialized in writing [need not be signed by client, need not be given to client after memorialized]
business transactions with clients - conflict rules
A lawyer must not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security, or money interest that is adverse to a client unless:
FIRST DISCUSS OVER COFFEE
(1) (FAIRNESS) terms are fair and reasonable to the client
(2) (DISCLOSURE0 terms of the transaction are fully disclosed to the client in a writing that the client can reasonably understand
(3) (OPPORTUNITY TO GET OUTSIDE LAWYER) client is given a reasonable opp to seek advice of independent counsel before agreeing to arrangement
and
(4) ( CONSENT) client consents in writing [consent itself must be in written form]
common examples of business transactions with client
Accepting non-monetary property (such as stock) as payment for legal services
Borrowing money from a client, or purchasing property from a client
Selling property to a client
Taking an interest in the client’s property as security for pay- ment of fees
NOT - standard transactions such as opening an account at a bank
Rules governing conflicts with former clients
(A) Repping a new client against a former client in the same or substantially related matter
Rules:
(1) A lawyer must NOT represent a new client whose interests are materially adverse to a former client in a matter that is substantially related to or the same as a matter in which the lawyer represented the former client UNLESS both the former client and current client consent after consultation
(2) “same or substantially related”= issues in the matters are essentially the same
-
(B) using confidential info to former client’s disadvantage
Rules:
(1) must not reveal former client’s confidential info or use it to her disadvantage unless consent
-
(C) Repping new client against a client of former firm in substantially related matter
Rules:
(1) if former firm repped a client in a matter where lawyer actually acquired confidential information about the client, lawyer must not represent the new client in the same or related matter which is adverse to former firm’s client’s interest IF the confidential info is material to that matter …. UNLESS both new client and former firm’s client consent after consultation
(2) if lawyer is disqualified, so are the members of her firm since there is imputation
-
(D) Firm represents a new client whose interests are adverse to that of a former client of a lawyer who has departed the firm
Rules;
(1) Firm must no longer represent the client (obviously)
(2) firm generally will not be prohibited from repping the new client whose interests are adverse to the old client of the lawyer who left the firm
EXCEPTIONS:
(1) if matter is same or substantially related to that in which formerly associated lawyer repped the client
AND
(2) at least 1 remaining lawyer in the firm has confidential info that is material to the matter
who counts as a prospective client
a person who consults with a lawyer in good faith about the possibility of forming a lawyer-client relationship with respect to a matter
BUT NOT someone who unilaterally communicates info to lawyer without reasonable expectation that lawyer will discuss possibility of representation with him
rules governing conflicts of interest for prospective clients
How to cure imputation
PROHIBITED CONFLICT
A lawyer who obtains confidential information during a consultation with a prospective client may not represent a client adverse to the prospective client in the same or substantially related matter if the information could be significantly harmful to the prospective client in the matter UNLESS:
–both the current and prospective client provide informed consent, confirmed in writing
HOW TO CURE IMPUTATION TO OTHER LAWYERS AT THE FIRM
Other lawyers at the attorney’s firm typically may not represent the new client either due to the lawyer’s client being imputed onto them. However, they may represent the current client against the prospective client if ALL of the following are met:
(1) disqualified lawyer took reasonable measures to avoid exposure to more confidential information than was necessary to determine whether to represent prospective client
(2) disqualified lawyer is timely screened form the matter and reasonably believes that screening will be effective to protect the info they received
(3) prospective client is promptly given written notice of the subject matter about which disqualified lawyer was consulted and screening measures employed
when can trial counsel be witness
IN GENERAL: A lawyer must not act as an advocate at trial in which she is likely to be a necessary witness
EXCEPTION:
(1) trial lawyer’s testimony relates solely to uncontested issue
(2) testimony will relate solely to nature and value of legal services they have rendered int he case
or
(3) withdrawal would cause substantial hardship to the client
ALSO - NO IMPUTED DISQUALIFICATION (other lawyers at the firm may be witnesses)
limiting liability for malpractice rules
lawyer must not make agreement prospectively limiting liability for malpractice unless
(1) lawyer is employee of the client (in house counsel)
and
(2) client is independently represented in making the agreement
