module 4 (full): COIs

direct adversity rule + 2 exceptions

can’t lawyer against your own client, even if for unrelated matter!

• eg, repping client A directly adverse to rep of client B (both current clients)

Exceptions:

• mere econ. adversity (general biz competitors, provided clients aren’t adverse to each other in any of the matters) = NOT CONFLICT

• unnamed class action members = NOT CLIENT

Material Limitation conflicts

significant risk that client rep will be materially limited by duty to another client (former, current, prospective), 3rd party, or personal interest

4 egs of material limitation conflicts

• joint defense (special rules here)

• personal/family interest (eg, fid duty to corp)

• taking inconsistent legal positions— legal arg for client A creates binding precedent on client B’s position on the same matter IN SAME JX

• 3rd party payers (insurance - special rules here)

2 General Reqs for Waiving Concurrent Conflicts

• IC, W — informed consent, confirmed in writing from every affected client involved

• atty reasonably believes can provide competent & diligent rep to each affected client despite the conflict

ICW Writing Req - can this be memorialized?

yes! ICW can = oral consent later memorialized in writing that’s sent to client

• can’t be a written note left in client file

2 unwaivable conflicts

representation that’s prohibited by law

atty can’t be on both sides of the “v.”

• note here that lawyers within a firm are treated as a single unit for conflicts purpose, so 2 lawyers at same firm can’t rep 2 diff clients in the same matter

insurance concurrent conflict — who is represented here?

either policyholder (PH) only OR PH + Insurance Co.

how to resolve/waive insurance conflicts + who pays

advise client to seek independent counsel → who pays for IC?

• PH’s own expense: excess claim (lawsuit asks for more $ than policy covers)

• Ins. Co’s expense: Reservation of rights (won’t payout policy under certain outcome); settlements w/in limits (insurer refuses to settle, gambling w client’s risk of going to trial); other actual conflict

when can you use confidential info to FORMER client’s disadvantage? 3 ways

• IC, W from FC

• confidentiality exception applies

• the CI becomes public knowledge

when can you use confidential info to CURRENT client’s disadvantage? 3 ways

• IC, no W

• they have implied authorization

• Specific Rule Exception Permits or Requires It (eg confidentiality exception, duty of candor to tribunal)

NOTE: NO "Generally Known" Exception for Current Clients!!

entering a biz transaction/having ownership interest that’s adverse to client = OK IF: (4 reqs + exceptions)

• fair + reasonable to client

• terms fully disclosed in writing in understandable way

• written advice to seek ind. counsel + reas. opp. to do so (UNLESS client already has ind. counsel)

• IC, W, + S — informed consent, confirmed in writing, and SIGNED by client

Exceptions: std commercial biz transactions; ordinary fee agmts

Acquiring interest in subject matter of representation - rule + exceptions

Rule: not allowed AT ALL (no IC can waive this!) for LITIGATION ONLY (for transactional matters, apply biz transaction rule)

Exceptions: lien on client’s recovery if allowed by Jx; contingency fees

Rules for acquiring interest in literary/media rights

• client story substantially related to rep: atty can’t acquire during rep, but can after

• client story unrelated to rep: atty can acquire these rights at any time

NOTE: still subject to biz transaction reqs if allowed

rules for gifts w current clients + imputation

Rule: can’t solicit substantial gifts for client/draft will for the same unless related to client

• NOTE: can accept gifts, but right raise undue influence Qs

Imputation: IS imputed to firm

when is atty providing financial assistance to client allowed? 3 ways

• advancing court/litigation costs for ANY client (eg, filing fees); repayment may be contingent on the outcome of the case

  • can’t pay court costs for non-indigent client outright

• court costs for indigent clients (eg, expert witness fees), without any provision for repayment

• PRO BONO INDIGENT CLIENT ONLY: can provide modest gifts for basic living, BUT 1) can’t promise/advertise this & 2) can’t ask for reimbursement

  • here, can only give out gifts, NOT LOANS!

when is a 3rd party paying for litigation costs ok? 3 reqs

• client gives IC, no W

• 3rd party can’t interfere w lawyer’s independence or the representation of the client; AND

• atty can’t reveal confidential info to 3rd party

Special Rules for Joint Defense (4)

• crim vs civil: both allowed, but strongly discouraged for crim, ok under civil

• atty must explain risks/consequences of joint defense; must re-address if potential conflict becomes real

• no secrets/confidentiality bw clients: info from client A shared w client B

• IC, W, & S req for each party— step up from general conflict waivability

if a conflict arises during rep of joint clients, what happens?

If atty can’t cure via 4 steps, atty must withdraw from repping both joint clients unless

1. one client gives IC, W to be dropped so atty can go forward w repping the other client; OR

2. special advance conflict waiver given + signed by joint clients

aggregate settlement rule (3 things) (also applies to joint plea deals)

atty can’t participate in arranging agg. settlement UNLESS

1. clients come to agmt themselves

2. full disclosure to every client → incl. payout for each client, settlement amt, etc

3. IC, W, & S from each client

rule for lucrative appointments (eg, executor) - 3 reqs

Not a Gift, But Still a potential current conflict (ie material limitation), subject to general waive reqs

• must disclose alternatives

• IC, W

• reasonably believe you can give competent + diligent advice

general COI rule for former clients + waiver

lawyer can’t rep new client in S/SR matter if new client’s interests = materially adverse to FC. any confidential info = conflict in S/SR matter

• waivable if: IC, W from FC

substantially related definition + exception [FC]

SR = same transaction/dispute OR subs. risk that CI from FC would materially advance new client in subsequent matter

Exception: lawyer may rep against FC in new matter, even if it involves the same general type of legal issue, as long as the facts and circumstances are different and the matters are not substantially related.

• EG: drafted std comm. lease for FC; new tenant wants to sue FC for bad repair on newly leased bldg → NO CONFLICT. not SR!

switching firms: If lateral lawyer’s old firm represented the client, but lateral lawyer did not personally work on the case,

can’t work on opp side of S/SR matter of FC ONLY IF lawyer acquired confidential info from FC

• waiver = IC, W from FC

• if lawyer acquired no CI from FC while at old firm, then no conflict!

firm imputation rule for lateral hires - if lateral lawyer disqualified due to FC conflict, firm imputed unless (2 ways)

1) FC given written notice (no IC req!) & disclosure ab screening procedures; AND properly screened (walled off from case info), no direct fee sharing (unless salary/partnership profit share); OR

2) FC gives IC, W

lawyer leaves old firm and takes client X w her to new firm. Can old firm later rep client Y, whose adverse to client X (former client)?

YES, unless:

• S/SR matter bc FC and new client; AND

• “ghost secret” remains: at least 1 lawyer at old firm has confidential info material to the matter

even so, still waivable if FC gives IC, W

prospective client (PC) definition + exceptions

PC = anyone who consults with a lawyer about possibility of forming a AC relationship regarding a legal matter

Exceptions: unilateral disclosures (eg, sending unrequested CI); bad faith “taint shopping” (giving lawyer CI to conflict them from repping adverse party)

screening definition (4 reqs)

• no fee sharing

• no case file access

• notice w disclosure ab screening procedures

• updates

PC Conflict General Rule, waiver, + exception

If lawyer received significantly harmful info from PC, can’t rep a mat. adverse client in S/SR matter.

• WAIVER: IC, W from both clients

• EXCEPTION: if confidentiality exception applies; no unilateral belief of rep; no taint shopping

PC imputation rule - if lawyer has PC conflict, imputed to firm (can’t rep client adverse to PC) UNLESS (2 options):

Option 1: IC, W from PC and adverse client; OR

Option 2: 3 conditions must be met:

1. Limited Info: conflicted lawyer took reas. steps to limit info learned to what was reas. necessary to decide whether to take the case

2. Prompt screening + no direct shared fee (remember salary/partnership exception tho)

3. written notice to PC (no consent needed!)

matter definition

specific claims, Ks, or litigation involving specific parties/facts - not general legislation

• can apply to nonlegal stuff too!

Govt → priv. practice (rule for acquiring govt CI while in govt) + lawyer waivability

if atty learns govt CI ab someone while working for govt, can’t later rep private client adverse to that person in a matter where that CI could be used to that person’s material disadvantage. this = conflict

WAIVER: not allowed by govt agency!!! rule meant to protect individual, not agency

Govt → priv. practice (lawyer acquires govt CI while in govt) - imputed to firm unless

disqualified lawyer properly screened and no fee sharing

• written notice NOT req!

Govt → Priv. practice rule + waiver

don’t work on SAME MATTER + you were P/S involved in as govt employee

• WAIVER: Govt agency gives IC, W; may also have to apply FC waiver (ICW_

Priv. practice → Govt rule + waivability

lawyer can’t participate in matter they P + S worked on while in priv. practice. note - may also have to apply FC rule here

• WAIVER: Govt agency gives IC, W

former judge/clerk/3rd party neutral (J/LC/3PN) → priv. practice (client rep rule, waivability, + exception)

former J/LC/3PN can’t rep client in a matter they were P + S involved in as J/LC/3PN

• WAIVER: IC, W of ALL parties to the proceeding

• EXCEPTION: arbitrator selected as partisan of multimember party - here, can rep w no IC needed!

J/LC/3PN → priv. practice (firm imputation): if former J/LC/3PN disqualified due to conflict, this is imputed to firm UNLESS

disqualified lawyer property screened, no fee sharing, & prompt written notice to all parties AND relevant tribunal

Current J/LC/3PN/GOVT - negotiation for private employment rule + exception

can’t negotiate for private employment w any party/lawyer involved in a matter in which J/LC/3PN/govt P + S participating in - no exceptions!

• Exception: law clerks can IF they give judge notice