MPRE Set 4 (Conflicts of Interest)

Are non-lawyers imputed by conflict of interest rules?

Not really, but they should still be screened.

Absent exceptions who is imputed for conflicts?

Everyone in the firm.

What is the definition of a firm for purposes of conflict imputation?

A group of lawyers who practice closely together. E.g., corporate law department, legal aid office, prosecutor’s/public defender’s office (and classic firm).

• Ultimately depends on a number of factors (formal agreement among lawyers, holding themselves out to the public in a way that suggests that they practice together, sharing revenues/responsibilities, physical access to files.)

• Watch for office-sharing arrangements which can go either way.

What are the two/kind of three exceptions to firm imputation regarding conflicts?

1) Uniquely personal interest: based on personal interest (obviously) and doesn’t carry a significant risk of materially limiting other lawyers’ representation.

2) Former client + screening

3) S*xual relationships (but falls under first category)

Specific screening rules for former clients at prior firm or former firm’s clients

Lawyer must be:

• Timely screened from the matter;

• Doesn’t receive a fee (fees from general funds are fine)

• Written notice to former client so they know firm is complying with rule

• Continuing certification of compliance with rules and procedures to former client both by screened lawyer AND partner of firm at former client’s written request and upon termination of screening.

What are the two types of conflicts with current clients?

1.7:

1) representation directly adverse to another client

2) representation at significant risk of being materially limited by some personal interest or responsibility to a client, a former client, or a third person (unless conflict is properly waived)

When can direct adversity with a current client apply?

1) in totally unrelated matters between two clients

2) multiple clients in the same matter and their interests are in actual conflict

3) representing client’s opponent in a different matter (this can mean either representing a client who is adverse to another client on a different matter for which you are representing them or the same)

4) conducting a harmful or embarrassing cross examination of another existing client

What doesn’t constitute as direct adversity with another client?

1) economic adversity (can simultaneously represent business competitors provided they aren’t directly adverse in any matters)

2) Any unnamed class members in a class action

Examples of possible material limitations

• representing co-parties in criminal litigation

• representing co-parties in civil case

• clients with inconsistent legal positions in two different cases AND one case is likely to become controlling precedent in the other case (if either or both clients won’t consent, lawyer needs to ask court’s permission to withdraw)

• duty to former client

• duty to third person as a fiduciary

• lawyer’s personal interests, such as financial, possible employment w/ opponent of lawyer’s client, close relatives as lawyers of opposing sides.

• conflicts raised by liability insurance

Procedure for waiving concurrent conflict

1.7(b): both types of concurrent conflicts can be waived if:

1) Each client gives informed consent (w/o breaking confidentiality), confirmed in writing

2) Lawyer reasonably believes they can competently and diligently represent each client

3) clients are not on opposite sides of same litigation/proceeding before a tribunal

4) representation is legal

tribunal definition

court, arbitrator, legislative body, administrative agency, or other body acting in an adjudicative capacity.

• adjudicative capacity = neutral official rendering binding legal judgment directly affecting party’s interests after presentation of evidence/legal argument; could be a gov’t agency that is adjudicating something

• NOT: a mediation (not binding) or a gov’t body that isn’t adjudicating something

Can a client waive future conflicts?

yes, but subject to waiver under 1.7(b).

What are the special rules on conflicts with current clients?

1.8 outlines several categories:

• misuse of client’s confidential info

• business transactions with client and money or property interests adverse to client

• proprietary interest in subject of litigation

• gifts to lawyer from client who is not a relative

• literary/media rights

• financial help to a client

• compensation from third parties

• aggregate settlements/plea agreements

• s*x with clients

Procedure for lawyer knowingly acquiring an ownership, possessory, security, or other pecuniary interest adverse to a client

(same as business transaction requirements… same rule)

• transaction and terms are fair and reasonable

• terms are fully disclosed and transmitted in understandable writing

• client is advised in writing of desirability of seeking independent counsel

• client gives reasonable opportunity to seek independent counsel AND

• informed consent, in writing signed by client, to transaction’s essential terms and the lawyer’s role in it

Rule for proprietary interest in subject of litigation

1.8(i): lawyer cannot have proprietary interest in a cause of action or subject matter of litigation except for reasonable contingent fees in civil cases, or liens authorized by law to secure lawyer’s money.

Can a lawyer receive substantial gifts from unrelated clients?

Yes. As long as the substantial gifts are not solicited and the lawyer doesn’t prepare the instrument giving the lawyer (or someone related to the lawyer) the gift.

Can lawyers seek lucrative appointments from clients?

Yes. Lawyers can seek to have themselves or someone else from their firm names as the executor of an estate, counsel to the executor, or some other fee-paying position. Don’t forget conflict of interest principles which may be violated if lawyer’s advice is tainted by their own self-interest.

Can a lawyer get literary/media rights from their representation of a client?

1.8(d): prior to the end of the representation, cannot negotiate or agree to rights to a portrayal or account based in substantial part on the information relating to representation. However, lawyer can negotiate to have their fee come from shared ownership of literary property as long as 1.8(a) and (i) are complied with.

Can lawyer financially assist their client in connection with litigation? Exceptions?

No. Exceptions:

1) advance (not pay) court costs/litigation expenses

2) pay indigent client’s court costs/litigation expenses outright

3) provide indigent client, represented pro bono, with modest gifts for food, rent, transportation, medicine, and other basic living expenses as long as they don’t promise anything prior to or during, seek/accept reimbursement, publicize/advertise gifts to perspective clients, and unlikely to create conflict of interest or abuse.

Financial assistance not allowed under fee-shifting contractual arrangement or contingency fees, even if the lawyer ends up recovering nothing. If modest expenses have consequences (i.e., gov’t benefit receipts) need to consult with the client.

Rule for compensation from third parties

1.8(f): Lawyer cannot accept compensation from someone other than the client UNLESS:

• client informedly consents

• there is no interference with lawyer’s personal judgment or client-lawyer relationship; AND

• confidential information is protected

When can a lawyer make aggregate settlements of civil claims or criminal plea agreements?

1) Each client informedly consents by signing in writing

2) lawyer discloses existence and nature of all claims/please involved and each person participating in the settlement and what they’re getting

class actions different story because unnamed class members aren’t clients. But still must follow class action rules.

Can lawyers have sex with their clients?

No. Unless the relationship existed before A/C relationship began. This rule applies to anyone who supervises, directs, ore regularly consults w/ attorney about legal matters in organizations.

Are conflict rules more relaxed or more stringent with former clients?

more relaxed. Can be waived by giving informed consent, confirmed in writing.

When does a conflict arise with a former client?

1.9(a):

Lawyer cannot represent a client with materially adverse interests to a former client in a substantially related matter, unless former client gives consent.

Meaning of substantially related

1) matters involving the same transaction/dispute; or

2) substantial risk that former client’s confidential info would materially advance current client’s position

can often involve a common nexus of facts

When is there a conflict with a former firm’s clients?

When a lawyer knowingly represents a client w/ materially adverse interests to former firm’s client in a substantially related matter and the lawyer acquired confidential information about the client that is material to the matter. (Can be waived by informed consent in writing.)

Imputation of conflict to a firm after a lawyer leaves the firm and takes their client with them?

When a lawyer leaves a firm, it can represent people with materially adverse interests to that lawyer’s client no longer represented by the firm, UNLESS:

1) matter is substantially related to the former lawyer’s client’s matter AND

2) Any lawyer remaining in the firm has confidential information material to the matter

What is the nature of a lawyer’s ongoing duty to former clients?

Under 1.9©, if a lawyer, the lawyer’s present firm, or the lawyer’s former firm has formerly represented a client, the lawyer cannot reveal confidential info or use it to the former client’s disadvantage unless there is consent, other rules require disclosure, or in the case of using info to former client’s disadvantage, the information has become generally known

When does a conflict arise with respect to a prospective client?

1.18©: Cannot represent and firm cannot knowingly represent a client with materially adverse interests to that lawyer’s prospective client if the matter is the same or substantially related and lawyer received information from prospective client that could be significantly harmful to that person in the matter.

When can a lawyer represent both current and prospective client with conflict?

1) both parties give informed consent, confirmed in writing; OR

2) the lawyer took reasonable measures to avoid exposure to more disqualifying info than reasonably necessary to determine whether to represent the prospective client, disqualified lawyer is timely screened and gets no fees, and prospective client is given prompt notice.

What is a lawyer’s ongoing duty of confidentiality to prospective clients?

1.18(b): Prospective client’s confidential information cannot be revealed, except as 1.9 would permit for former clients. So, the lawyer cannot:

·       Reveal confidential information OR use confidential information to the prospective client’s disadvantage, unless

o   Prospective client informedly consents;

o   Other rules permit/require disclosure; OR

o   In the case of using info to the prospective client’s disadvantage, the information has become generally known

What is the rule of conflicts for former and current gov’t officers and employees?

1.11: former public officer of gov’t employee cannot:

1) reveal or confidential info to former client’s disadvantage, absent informed consent/allowance by 1.9© OR

2) represent a client in a matter* that the lawyer personally and substantially participated in, unless appropriate government agency gives informed consent, confirmed in writing OR

3) represent a private client w/ interests adverse to a person they acquired confidential gov’t info about when the info could be used to their material disadvantage.

*a specific dispute involving specific facts and parties. personally and substantially means the lawyer worked on it and their work was more than trifling.

*Timely screening + no fee + notice OK.

Rules concerning current public officers and employees

Cannot participate in matter they personally and substantially participated in during private practice/nongov’t employment, unless there is consent, and negotiate for private employment with anyone involved in matter lawyer is participating in personally and substantially (except for law clerks under 1.12)

Additional Rules:

• moving from gov’t agency to gov’t agency could be treated like different clients but beyond rule scope.

• lawyer not prohibited from representing both a public agency and a private party as long as rule compliant.

• when a lawyer goes from private practice —> gov’t, former client conflicts not imputed to gov’t lawyers associating with individually disqualified lawyer.

Definition of conflict of interest

-         something that affects your duty of loyalty to your client; mustn’t allow personal interests, the interests of another client, or the interests of a third person to interfere w/ loyalty.

-        Failure to comply with rules may involve discipline, disqualification from case, or legal malpractice claims (civil liability)

Timing of conflict

·       Can arise at any point during the representation

o   Must determine whether you can proceed notwithstanding the conflict, or instead must decline representation/withdraw if representation has begun