Quiz 4 - PR - Wh Flashcards
A real estate lawyer was approached by two large corporate clients, one a seller of an industrial plant and one seeking to buy the plant. The corporations wanted the lawyer to represent each of them in negotiating the price and terms of the transaction, drafting the
documents, and in closing the transaction. The lawyer knew the parties were sophisticated
and capable of making informed decisions. But the lawyer also knew there were many conflicts in how this deal could be structured and the lawyer was uncertain as to whether she could represent both clients. The lawyer concluded that she did not have a reasonable
degree of confidence that she could deliver competent and diligent representation to the
corporate clients, but she wanted to leave the final decision to the clients. The management of the two corporations agreed to waive the conflicts and have the lawyer represent both
entities in negotiation of the price and terms of the deal. As sophisticated clients and
experienced users of legal services, they explicitly took all of the risk to protect themselves in the transaction. May the lawyer represent the two corporations in this complex real estate transaction?
- Yes, because the corporate clients’ consent to the conflict was executed by experienced
users of legal services. - Yes, because the lawyer knew that the corporate clients were capable of making informed
decisions. - No, because the lawyer did not have a reasonable belief that she could deliver
competent and diligent representation to both clients. - No, because attorneys may never represent buyer and seller of commercial real estate in the same transaction.
- No, because the lawyer did not have a reasonable belief that she could deliver
competent and diligent representation to both clients.
Attorney was assigned by the court to defend an indigent teacher at her murder trial. The jury convicted the teacher, and she was sentenced to 40 years in prison. Attorney’s court
appointment expired at the end of the trial, but he promised the teacher that he would
represent her without cost in taking an appeal from her conviction. Attorney advanced $350 on the teacher’s behalf to cover the expenses of the appeal, knowing that the teacher would probably not be able to pay him back. While the appeal was pending, the teacher wrote a manuscript for a book about life in prison. She hired Attorney to negotiate a contract with a publisher to have the book published, and in return for the contract work, she promised to pay Attorney 30% of the royalties from her book.
Is the attorney subject to discipline?
- Yes, because he entered into a literary rights contract with his client while her appeal was still pending.
- Yes, because he advanced appeal expenses for his client, knowing that she probably could not pay him back.
- No, unless 30% of the book royalties is unreasonably high for the contract negotiation
work. - No, because he agreed to represent his client past the court appointment and therefore is able to negotiate a new fee.
- No, unless 30% of the book royalties is unreasonably high for the contract negotiation
work.
Attorney represents Vista Corporation in a regulatory compliance matter, drafting
documents for Vista to file with the Securities and Exchange Commission and the Federal
Trade Commission regarding executive salaries (for the SEC) and product market share (for
the FTC’s antitrust inquiry). Vista owns or co-owns numerous subsidiaries and affiliates in unrelated industries. Attorney’s retainer agreement limits his representation exclusively to
the SEC and FTC regulatory matters. An injured person hires Attorney to represent him in a personal injury suit against Subsidiary Corporation, partly owned by Vista Corporation, over a slip and fall accident in Subsidiary’s parking lot. Is it proper for Attorney to represent the 4 injured plaintiff in a tort action against an affiliate or subsidiary of his other client, Vista
Corporation?
- Yes, a lawyer who represents a corporation or other organization does not, by
virtue of that representation, necessarily represent any constituent or affiliated
organization, such as a parent or subsidiary, and the lawyer for an organization
may provide representation adverse to an affiliate in an unrelated matter. - Yes, so long as the attorney obtains written informed consent from both injured plaintiff and the legal representative of Vista Corporation, after explaining the conflict of interest
fully to each client. - No, unless Attorney obtains written informed consent from both injured plaintiff and the
corporate director of Vista. - No, because the parties are directly adverse in litigation, and therefore the conflict of
interest described here is nonconsentable under the Rules of Professional Conduct.
- Yes, a lawyer who represents a corporation or other organization does not, by
virtue of that representation, necessarily represent any constituent or affiliated
organization, such as a parent or subsidiary, and the lawyer for an organization
may provide representation adverse to an affiliate in an unrelated matter.
For five years, Attorney was a partner in a law firm. During that period, Attorney represented a client, Omega, in obtaining a business loan from a bank. Omega disclosed to Attorney a great deal of confidential information about his business and his personal assets. No other attorney in the law firm gained access to that confidential information. Recently, Attorney terminated his representation of Omega and retired from the practice of law. Shortly thereafter, an injured prospective client asked the senior partner of the law firm to represent him in a civil suit for serious personal injuries suffered when he was run over by a delivery truck driven by one of Omega’s employees.
Would it be proper for the senior partner to represent the injured prospective client?
- Yes, because the information obtained by deceased Attorney about Omega’s assets has
no effect on liability in a personal injury suit. - Yes, because neither the senior partner nor any other attorney in the law firm
gained access to Omega’s confidential information. - No, because the conflict created by deceased Attorney’s work for Omega is imputed to
the senior partner. - No, because the senior partner did not obtain Omega’s informed consent, confirmed in
writing.
- Yes, because neither the senior partner nor any other attorney in the law firm
gained access to Omega’s confidential information.
Attorney Alice was approached by a husband and a wife who had decided to dissolve their
marriage. They had no children and had worked out a tentative mutual property settlement.
They did not want to retain separate lawyers because they hoped to save money and believed that working with one attorney was more likely to result in a reasonably amicable dissolution. They had already drafted and signed a written agreement not to run up the costs and increase the adversarial nature of the dissolution by retaining separate lawyers.
Attorney Alice reasonably believed that she was able to provide competent and diligent
representation to both the husband and the wife. Attorney Alice consulted with both
independently concerning the implications of the common representation, including the
advantages and risks involved and the effect on their respective attorney-client privileges. Attorney Alice reduced the disclosures to writing in the form of a written retainer agreement
and gave them each several days to consult independent legal counsel if they so desired. The husband and the wife each chose not to consult independent counsel.
After six months of reasonably amicable negotiations, the wife announced that she had
changed her mind how the negotiations were progressing and that she was considering
whether to retain her own lawyer. However, after the husband and Attorney Alice insisted that she was obligated to adhere to her prior written agreement, she reluctantly agreed to abide by it. Attorney Alice was then able to draft a property settlement agreement
satisfactory to both parties.
Is Attorney Alice subject to discipline for her conduct in the representation?
- Yes, because Attorney Alice’s acceptance of the representation was improper because of the potential that the interests of the wife and the husband could become directly
adverse. - Yes, because Attorney Alice’s ability to represent the wife in negotiations became materially limited by her responsibilities to the husband.
- No, because both the husband and the wife initially gave informed consent, confirmed in writing, to all aspects of the representation.
- No, because the husband and the wife independently made the agreement that neither
would retain separate counsel.
- Yes, because Attorney Alice’s ability to represent the wife in negotiations became materially limited by her responsibilities to the husband.
Solo practitioners Sharky and Gator share office space. Each has organized their practice as a professional corporation. Their office door sign reads:
“Sharky, P.C.”
“Personal Injury Law”
“Gator, P.C.”
“General Practice”
Sharky and Gator frequently consult each other on cases and refer clients to one another. Sometimes they work together under a fee-sharing arrangement. When one is out, the other
fields client inquiries as best they can, and to make that easier, they have physical access to each other’s client files.
One day, a plaintiff hired Sharky to sue a bakery after biting into a dinner roll laced with glass.
Meanwhile, the bakery’s liability insurer asked Gator to defend the bakery.
Sharky and Gator disclosed their working relationship, and the plaintiff, the bakery, and the
insurance company all provided written consent for Gator to serve as defense counsel.
Can Gator take the case?
- Yes, because Sharky and Gator believe that they can effectively represent their
respective clients. - Yes, because the rule of imputed disqualification does not apply to Sharky and Gator
- No, even though Sharky and Gator believe that they can effectively represent
their respective clients. - No, because Sharky and Gator sometimes share fees.
- No, even though Sharky and Gator believe that they can effectively represent
their respective clients.
Attorney has found herself on hard times thanks to an affinity for the Blackjack table. Finding
herself in dire financial straits and unable to keep her practice afloat, she made an agreement
to borrow money from a client who had received a large inheritance. Attorney agreed to pay the client the same interest rate that banks in that area were charging for unsecured business loans, and she gave the client a detailed written disclosure of the terms and conditions of the loan, with phrasing that a nonlawyer could understand. The client gave written, signed consent to the essential terms of the loan, including the fact that Attorney was not representing the client in the transaction. During one of their phone conversations about the loan, Attorney also told the client that it would be prudent to obtain the advice of another lawyer about the transaction, and she offered to give the client time to find another lawyer, but the client did not want to do this. Upon consummation of the agreement, the client
transferred the loan amount to Attorney, who made regular payments according to the terms of the agreement, eventually repaying the full amount with interest. Based on these facts, could Attorney be subject to discipline for this transaction?
- Yes, Attorney gave inadequate notice to the client regarding the desirability of seeking independent legal counsel for the transaction.
- Yes, it was impermissible for Attorney to borrow money from a current client,
even though the attorney fully repaid the loan - No, Attorney repaid the loan with interest, so the client suffered no adverse
consequences. - No, Attorney complied with the requirements of the Model Rules for this type of
transaction with a client.
- Yes, Attorney gave inadequate notice to the client regarding the desirability of seeking independent legal counsel for the transaction.
A lawyer represented a large commercial landlord, Slum Lords, for many years. During that time, Slum Lords shared confidential information with the lawyer about incentives that it offered its anchor tenants that were instrumental in keeping anchor tenants in the complex for the duration of the lease. Those incentives were memorialized in the agreements prepared by the lawyer. One year ago, Slum Lords stopped using the lawyer and gave all of its legal business to a new law firm.
Recently, the lawyer began to represent a new commercial landlord and the lawyer would like to disclose Slum Lord’s confidential information about its anchor tenant incentives to the new client.
May the lawyer disclose Slum Lord’s confidential information to the new client under the
Model Rules?
- Yes, because the lawyer no longer represents Slum Lords.
- Yes, because the client, Slum Lords, made the decision to no longer use the lawyer.
- No, because the lawyer owes the former client a duty of confidentiality and no
relevant exceptions to the duty exist under the Model Rules. - No, because the lawyer may never disclose or use the confidential information of a
former client to help a new client.
- No, because the lawyer owes the former client a duty of confidentiality and no
relevant exceptions to the duty exist under the Model Rules.
An attorney is preparing to propose to his long-term girlfriend and is searching for a specific type of ring. Coincidentally, the exact ring he wants was recently the subject of a divorce settlement involving a client. The attorney had successfully represented the client in his divorce from an adulterous spouse.
During their final meeting, the client—who is a renowned jeweler—mentioned he was eager to sell the ring due to its bad juju. The attorney expressed interest in purchasing it, recognizing the client’s craftsmanship. He proposed paying the appraised value as determined by an independent jewelry expert of the client’s choosing. The client arranged for an appraisal, which valued the ring at $28,000.
The attorney then encouraged the client to consult friends before deciding. The client
confirmed, “The price is fair, and I want to sell it to you.” The attorney paid $28,000, a fair and reasonable price.
Was the attorney’s conduct in this transaction consistent with the Model Rules?
- Yes, because the client was an experienced jeweler who received a fair and reasonable
price. - Yes, because the price paid was based on an independent appraisal.
- No, because an attorney should never enter into a business transaction with a client.
- No, because the attorney did not prepare a written agreement outlining the
terms, advising the client to seek independent legal counsel, and obtaining the
client’s signed consent.
- No, because the attorney did not prepare a written agreement outlining the
terms, advising the client to seek independent legal counsel, and obtaining the
client’s signed consent.
Two nineteen-year-old teenagers, Lincoln and Everly, were arrested for vandalizing a cookie booth. The crime was a felony that carried potential jail time, but in all probability, a
prosecutor would seek misdemeanor charges against the two teenagers. Lincoln was a model student with no prior involvement in prior crimes, while Everly had been convicted of several assault charges in the past. Therefore, the two teenagers were likely to have different plea bargaining and sentencing options. However, because both teenagers were under the age of 21 years old, they would be able to expunge and seal any convictions once they turned 21 years old.
Under the Model Rules, may one lawyer represent both Lincoln and Everly in their criminal defense?
- Yes, because both teenagers ultimately could reach the same result, expunging and
sealing any convictions once they turned 21 years old. - Yes, because in all probability the prosecutor would seek misdemeanor charges against
the two teenagers. - No, unless both Lincoln and Everly gave informed consent confirmed in writing to the
joint representation. - No, because the matter involved a criminal case with two prospective clients
with different prior criminal histories and thus would involve plea negotiations
that could be inconsistent and in conflict with each other.
- No, because the matter involved a criminal case with two prospective clients
with different prior criminal histories and thus would involve plea negotiations
that could be inconsistent and in conflict with each other.
