Duty of Loyalty and Conflicts of Interest--Introduction and Conflicts with Current Clients Flashcards
What is the concept of imputation?
If one lawyer can’t take on a matter because of a conflict, the conflict is imputed to the entire firm, unless imputation is waived by affected client
* Failure to use or maintain a conflict-checking system may constitute a violation of this rule if proper use of such a system would have identified the conflict
What are the two types of current conflicts of interest?
(1) The client is directly adverse to another client represented by the lawyer OR
(2) There is a significant risk that the representation of the client will be materially limited by the lawyer’s personal interest, responsibilities to another client, responsibilities to a former client, or to a third person
What conditions must be satisfied for a lawyer to resolve a current-client conflict?
(1) Lawyer reasonably believes they can competently and diligently represent client despite conflict
(2) Representation not prohibited by law
(3) The lawyer is not on both sides of the same litigation AND
(4) Client gives consent after consultation, memorialized in writing
* This means affected client must appreciate the significance of the matter, including how conflict might harm them
* Note that where confidentiality prevents disclosure needed in order to understand the conflict, this cannot be waived
Where does a direct conflict arise?
Where the client is directly adverse to a different current client, even if the clients are represented in totally unrelated matters
* Conflict can be (possibly) properly waived
* Mere economic adversity does NOT amount to direct adversity for conflicts purposes
Where does a material limitation conflict arise?
Where there is a significant risk that representation will be materially limited by lawyer’s personal interest or responsibilities to another client, former client, or third persons
* May be waived
* Example–representing multiple parties on the same side of a matter and the parties have potentially conflicting interests (OK in civil but cautioned against in criminal cases)
May a lawyer enter into a business transaction with a client?
NOT unless:
1. Terms are fair and reasonable to the client
2. Terms are fully disclosed to client in a writing that the client can reasonably understand
3. Client given reasonable opportunity to seek advice of independent counsel
4. Client CONSENTS IN WRITING
NOTE that this does not apply to standard commercial transactions b/w lawyer and client for products and services client markets to others (e.g., Bank of America–can still have a checking account)
“First Discuss Over Coffee”
When may a lawyer use a client’s confidential information to the client’s disavantage/their own a third party’s advantage?
ONLY IF:
(1) Client consents after consultation
(2) Some exception to confidentiality applies OR
(3) Rules of candor to tribunal require disclosure
What are the rules of solicitation of gifts/preparation of instruments for a client?
A lawyer must NOT do either of the following:
1. Solicit a substantial gift from a client, or accept any such gift if solicited by a third party at the lawyer’s request
2. Prepare an instrument on behalf of the client giving a substantial gift to the lawyer (or relative)
NOTE that prohibitions do not apply if the client is related to the recipient of the gift (i.e., lawyer/lawyer’s relative)
How may a lawyer financially assist a client?
They cannot, except for:
1. Advancing court costs/litigation expenses–repayment may be contingent on the outcome of the case
2. Where client is indigent, lawyer may pay court costs and litigation expenses outright
Where may a lawyer participate in an agreement where multiple parties settle their claim at the same time?
A lawyer must not participate in the making of an aggregate settlement agreement UNLESS:
1. Lawyer discloses to each client the existence and nature of all the claims or pleas involved and the participation of each person in the settlement AND
2. Each client consents after consultation
When may a lawyer accept compensation for reprsenting a client from someone other than the client?
- The client consents after consultation
- There is no interference with the lawyer’s independent professional judgment or with the lawyer-client relationship AND
- Confidential information relating to the representation of the client is protected
May a lawyer prospectively limit liability for malpractice?
Only if: (1) the lawyer is an employee of the client (e.g., in-house) AND (2) the client is independently represented in making the agreement
When may two lawyers related to one another represent clients whose interests are directly adverse?
Only after consent of the respective clients after consultation is given
* Note this type of conflict is not imputed to the firm
May a lawyer acquired literary or media rights to a story concerning a client’s case?
Only after the client’s legal matter is entirely completed (including appeals)
