Chapter 5 Conflicts of Interest Part 2 Professional Responsibility - A Contemporary Approach .Spring.2015

Chapter 5 - part 2
Conflicts of Interest
George W. Conk
Adjunct Professor & Senior
Fellow
Stein Center for Law & Ethics
Room 409
gconk@law.fordham.edu
Ch. 5. Conflicts of Interest Part 2
Conflicts between clients

interests and personal or
financial interests of the lawyer
A.
Business Transactions
between lawyer and client
Q.5- 13 p. 453 Gifts and deals RPC

1.8 Was the lawyers conduct in
drafting the note proper?
(A) Yes, because the client, without

having been requested by the
attorney to do so, voluntarily made
the loan.
(B) Yes, because the court ruled that
the note had been discharged as a
gift.
(C) No, because a lawyer may never
accept a loan from a client.
(D)No, because the attorney did not
R 1.8 (a)Business transactions
(1) the transaction and terms on

which the lawyer acquires the
interest are fair and reasonable
to the client and are fully
disclosed and transmitted in
writing in a manner that can be
reasonably understood by the
client
(2) the client is advised in

writing of the desirability of
seeking and is given a
reasonable opportunity to seek
the advice of independent legal
counsel on the transaction; and
(3) the client gives informed

consent, in a writing signed by
the client, to the essential terms
of the transaction and the
lawyer's role in the transaction,
including whether the lawyer is
representing the client in the
transaction.
MRPC 1.8 (c)
(c) A lawyer shall not solicit any

substantial gift from a client,
including a testamentary gift, or
prepare on behalf of a client an
instrument giving the lawyer or a
person related to the lawyer any
substantial gift unless the lawyer or
other recipient of the gift is related to
MRPC 1.8 (c)
For purposes of this paragraph,

related persons include a
spouse, child, grandchild,
parent, grandparent or other
relative or individual with whom
the lawyer or the client
maintains a close, familial
relationship.
Q. 5-14, p. 453 Literary rights
What is the conflict of interest

between attorney and client in
such circumstances?
Do we need the bright line rule

ofRPC 1.8 (d)?
R. 1.8 (d) Literary rights
(d) Prior to the conclusion of

representation of a client, a
lawyer shall not make or
negotiate an agreement giving
the lawyer literary or media
rights to a portrayal or account
based in substantial part on
information relating to the
representation.
10
Sexual relations with clients

RPC 1.8 (j)
Q. 5-15, p. 458
Who is the lawyer?
Who is the client?
What is the impact, if any, on

Jims firm?
11
R. 1.8(j) Sexual relationships
(j) A lawyer shall not have sexual

relations with a client unless a
consensual sexual relationship
existed between them when the
client-lawyer relationship
commenced.
12
Literally true cf. Inglimo, p.459
Now, I have to go back to work on

my State of the Union speech. But I
want to say one thing to the
American people. I want you to listen
to me. I'm going to say this again. I
did not have sexual relations
with that woman, Miss Lewinsky.
I never told anybody to lie, not a
single time never. These allegations
are false. And I need to go back to
work for the American people.
13
Lawyer advocate as
witness
MRPC 3.7
14
Q. 5-16 p. 467
Is it proper to accept representation?

A) Yes if there is no contested fact
question re formal execution of the
will
B) Yes because Executor has no
beneficial interest under the will
C) No unless attorneys services are
necessary to avoid substantial
hardship to Executor
D) No because attorney will be called
as a witness
15
Lawyer advocate as
witness
R. 3.7 (a)
A lawyer shall not act as
advocate at a trial in which
the lawyer is likely to be a
necessary witness unless:
16
R. 3.7 Lawyer Advocate as

witness
(1) the testimony relates to an

uncontested issue;
(2) the testimony relates to the

nature and value of legal
services rendered in the case; or
17

witness
(3) disqualification of the lawyer

would work substantial hardship
on the client.
18

witness
(b) A lawyer may act as advocate

in a trial in which another lawyer
in the lawyer's firm is likely to be
called as a witness unless
precluded from doing so by Rule
1.7 or Rule 1.9.
19
The continuing duty of

loyalty
No side-switching by
lawyers absent informed
consent
20
Restatement 122 - Client Consent to a Conflict

of Interest
Informed consent requires:

client or former client have
reasonably adequate information
about the material risks
of such representation to
him/her/it
21
Restatement - Conflicts with Former Clients

132 A Representation Adverse to the Interests of
a Former Client
Absent consent
a lawyer who
has represented a client in a
matter
may not thereafter represent
another client in the same or a
substantially related matter
in which the interests of the
former client are materially
adverse.
22
Restatement - Conflicts with Former Clients

132 A Representation Adverse to the Interests of
a Former Client
The current matter is substantially

related to the earlier matter if:
(1) the current matter involves the
work the lawyer performed for the
former client; or
(2) there is a substantial risk that
representation of the present client
will involve the use of information
acquired in the course of
representing the former client, unless
that information has become
generally known.
23
Representation adverse
to a former client
R. 1.9
Duties to former clients
24
Q. 5-17, p. 469
It is proper for Attorney to:
(A) represent Owner on the issue of
damages only and not disclose the
information that might prevent the
condemnation.
(B) represent Owner and attempt to
prevent the condemnation by using
the information about the adverse
environmental impact.
25
Q. 5-17, p. 469
It is proper for Attorney to:
(C) refuse to represent Owner, but
disclose to Owner the information
about the adverse environmental
impact.
(D) refuse to represent Owner and

not disclose the information about
the adverse environmental impact.
26
Q. 5-18, p. 470
Which of the following would be

proper for Attorney to do?
I. Refuse to discuss the matter with
Claimant.
II. Represent Claimant.
III. Give Claimant a list of lawyers
who Attorney knows are competent
and specialize in such claims.
27
Q. 5-19, p. 471 Should K&E be

disqualified?
(A) No disqualification, because they
are not former clients.

(B) No disqualification, because two
different offices worked on the
matters.
(C) Disqualification, because a
member of the organization is former
client.
(D)Disqualification, because the
relationship was client-like.
28
Westinghouse v. Gulf Oil (C.A. 7 1978)

RPC1.9 p. 472
Motion to disqualify
Are the matters substantially
related?
Might attorney have acquired
information related to the
subsequent representation?
Is such information relevant to the
subsequent adverse representation ?
29
R. 1.9 (a) former client

(a) A lawyer who has formerly
represented a client in a matter shall
not thereafter represent another
person in the same or a substantially
related matter in which that person's
interests are materially adverse to
the interests of the former client
unless the former client gives
30
R. 1.9 former client

(b) A lawyer shall not knowingly
represent a person in the same
or a substantially related matter
in which a firm with which the
lawyer formerly was associated
had previously represented a
client,
31

(1) whose interests are
materially adverse to that
person; and
(2) about whom the lawyer has

acquired information protected
by Rule 1.6 and 1.9(c) that is
material to the matter; unless
the former client gives informed
32

(1) whose interests are
materially adverse to that
person; and
(2) about whom the lawyer has

acquired information protected
by Rule 1.6 and 1.9(c) that is
material to the matter; unless
the former client gives informed
33
(c) A lawyer who has formerly

represented a client in a matter
or whose present or former firm
has formerly represented a
client in a matter shall not
thereafter:
34
(1) use information relating to

the representation to the
disadvantage of the former
client except as these Rules
would permit or require with
respect to a client, or when the
information has become
generally known; or
35
Former and Current

Government Lawyers
RPC 1.11
36
Q. 20, p. 476 MRPC 1.11

Governmental conflicts
Is it proper for Attorney Beta to

continue to represent Deft?
(A) Yes, if Alpha does not reveal to
Beta any confidence or secret learned
while an assistant district attorney.
(B) Yes, because a public prosecutor
must make timely disclosure to the
defense attorney of any exculpatory
evidence.
37
Q. 5-20, p. 476 MRPC 1.11

Governmental conflicts
(C) No, unless Alpha agrees not to

participate in the representation of
Deft.
(D)No, because Alpha had substantial

responsibility for the indictment of
Deft.
38
Babineaux v. Foster p. 479
Motion to disqualify former

City Attorney denied
pursuant to RPC 1.11
39
Third party Neutrals and

the Mediation Alternative
RPCs 2.4, 1.12
40
Rule 2.4 Lawyer Serving As

Third-Party Neutral
(a) A lawyer serves as a third-party

neutral when the lawyer assists two
or more persons who are not clients
of the lawyer to reach a resolution of
a dispute or other matter that has
arisen between them. Service as a
third-party neutral may include
service as an arbitrator, a mediator
or in such other capacity as will
enable the lawyer to assist the
41
Rule 2.4 Lawyer Serving As ThirdParty Neutral
(b) A lawyer serving as a third-party

neutral shall inform unrepresented
parties that the lawyer is not
representing them. When the lawyer
knows or reasonably should know
that a party does not understand the
lawyer's role in the matter, the
lawyer shall explain the difference
between the lawyer's role as a thirdparty neutral and a lawyer's role as
one who represents a client.
42
Q. 5-21p.485 Is the attorney who

served as partisan arbitrator subject to
discipline?
(A) Yes, because the attorney should not

have represented the company in a matter
in which the attorney had been an
arbitrator.
(B) Yes, because the attorney should have
declined the arbitration assignment in view
of his law firms regular representation of
the company.
43
Q. 5-21p.485 Is the attorney who

served as partisan arbitrator subject to
discipline?
(C) No, because the attorney obtained the

consent of the other arbitrators before
accepting the representation.
(D)No, because the attorney was
appointed to the arbitration panel as a
partisan arbitrator.
44
R. 1.10 Imputation
Law firm as a single person
The presumption of
knowledge
45
Model Rule 1.10 (a)

Imputation of Conflicts of Interest
If lawyers are associated in a firm,

none of them shall knowingly
represent a client if any one of
them practicing alone would be
prohibited from doing so by Rules
1.7 or 1.9 [former client]
Ch. 5. Conflicts of Interest
46
Q. 22, p. 486 R. 1.10 vicarious

disqualification of entire firm
A Can pat represent victim?
B Can he refer victim to another

member of the firm
C What if pat left in 2006
D What if Pat joins firm P hired
47
LaSalle Bank v. County of

Lake,p. 488(7 Cir. 1983)
Substantial related matter
Screening not timely

implemented
No mechanisms in place to
prevent sharing of confidental
information even inadvertently
48
Hempstead Video v. Village of

Valley Stream, p. 491
Of counsel relationship
What does it mean?
Rebutting the presumption of

shared confidences
49
Kassis v. TIAA (NY 1999) p. 498
Whether Thurm & Heller should be

disqualified from continued
representation of defendants on the
basis that it hired Charles Arnold, a
former associate of Weg & Myers
who participated in the Kassis
litigation while employed there. For
the reasons that follow, we hold that
Thurm & Heller should be disqualified
50
Kassis v. TIAA
No presumption of disqualification
will arise if either
A) the moving party fails to make any

showing of a risk that the attorney
changing firms acquired any client
confidences in the prior employment
***
or
B) the nonmoving party disproves
that the attorney had any opportunity
to acquire confidential information in
51
the former employment.
Kassis v. TIAA
Objector must establish that the

side-switching attorney
actually represented the former
client in a matter" (DR 5-108)
If actual representation is not
shown then neither the attorney
nor the firm would need to be
disqualified.
(see, Silver Chrysler Plymouth v
Chrysler Motors Corp., [2d Cir])
52
Kassis v. TIAA
Where the presumption does arise,

however,
1) the party seeking to avoid

disqualification must prove that any
information acquired by the
disqualified lawyer is unlikely to be
significant or material in the
litigation***
2) with the presumption (thus)

rebutted, a "Chinese Wall" around the
disqualified lawyer would be
5. Conflicts of Interest Part 2
53
sufficient toCh.avoid
firm
Kassis v. TIAA (N.Y. 1999) p. 337
where one attorney is

disqualified as a result of having
acquired confidential client
information at a former law firm,
the presumption that the
entirety of the attorney's current
firm must be disqualified may be
rebutted.
54
New York limits screening to cases of

insignificant involvement
Kassis v. TIAA (N.Y. 1999) p. 337

[T]he disciplinary rules prohibit
attorneys who have represented
the former client in a matter from
switching sides and impute one
attorney's personal conflicts of
interest to his or her current firm
(DR 5-105; DR 5-108,
[But] do not establish a mandatory
disqualification rule.
55
Kassis Chinese wall ineffective
1. The entire file which presently

consists of 15 redwells will be kept in
my office in lieu of our general filing
area.
"2. Mr. Arnold's office will be at a

substantial distance from my office.
56
"3. Mr. Arnold upon commencement

of his employment with the firm on
March 3, 1997 will be instructed not
to touch the Kassis file nor to discuss
the Kassis matter with any partner,
associate or staff member of the
firm.
57
"4. There will be no meetings,

conferences or discussions in the
presence of Mr. Arnold concerning
the Kassis' litigation.
"5. All future associates who may

work on the Kassis matter with me in
preparation for trial will be instructed
not to discuss this file with Mr.
58
[2] Resolution of a conflict of interest problem R.1.7 Comments
1) clearly identify the client or

clients;
2) determine whether a conflict of

interest exists;
59
[2] Resolution of a conflict of interest problem R.1.7 Comments
3) decide whether the

representation may be undertaken
despite the existence of a conflict,
i.e., whether the conflict is
consentable; and
60
Migration and Chinese

Walls
Logic of disqualification:
Knowledge of one attorney imputed to
every firm member.
Lawyers switch loyalties when they
switch firms.
61
Migratory lawyers
disqualifying conflict waivable
Model Rule 1. 9
Conflicts created by Migratory

Lawyer can be waived by all
parties (informed consent)
62
Migratory Lawyers - M.R. 1.9
Migratory Lawyer M
Firm X>>>>>>>>>>>>>>>Firm Y
Client A............vs................Client B
The matter is the same or

substantially related (R. 1.9)
Migratory Lawyer M infects Firm Y

with her knowledge of Client As
confidences
Firm Y must withdraw because M is
presumed disloyal to A and her
disloyalty (conflict)
is imputed
to Firm
63
Exceptions and limitations to

imputed disqualification rule
7th Circuit - Cromley screening M

cures taint when M switches sides
Accord: Mass, MI, OR, Penn
2d Cir. - Silver Chrysler significant
knowledge reqd to bar
representation
NY: screening permissible if Ms
information is unlikely to be
significant or material Kassis v.TIAA
Restatement 124 minor
involvement, screening allow
64
Peripheral involvement not

disqualifying
Silver Chrysler Plymouth, Inc. v. Chrysler Motors

Corp. (2d Cir. 1975) p. 337
There is reason to differentiate for

disqualification purposes between lawyers
who become heavily involved in the facts of
a particular matter and those who enter
briefly on the periphery for a limited and
specific purpose relating solely to legal
questions. ...
Under the latter circumstances the

attorney's role cannot be considered
"representation"... so as to require
65
disqualification.
Rule 1.10 Imputation of Conflicts of

Interest: General Rule
(a) While lawyers are associated
in a firm, none of them shall
knowingly represent a client
when any one of them practicing
alone would be prohibited from
doing so by Rules 1.7 or 1.9
66
Rule 1.10 Imputation of Conflicts of

Interest: General Rule
Unless
the prohibition is based on a
personal interest of the
prohibited lawyer and does not
present a significant risk of
materially limiting the
representation of the client by
the remaining lawyers in the
firm.
67
R. 1.10 screening of laterals
(ii) written notice is promptly

given to any affected former
client including
- a description of the
screening procedures
employed
68
R. 1.10 notice of screening of laterals

- a statement of the firm's
and of the screened lawyer's
compliance
- that review may be
available before a tribunal
-agreement by the firm to
respond promptly to any
written inquiries or
objections by the former
client about the screening
procedures
69
(iii) certifications of compliance

with these Rules and with the
screening procedures shall be
provided to the former client
by the screened lawyer and
by a partner of the firm
at reasonableintervals upon the
former client's written request
70
NY R. 1.10 (b) a lawyer leaves
When a lawyer leaves a firm it is

prohibited from representing
interests materially adverse to
the former associates migrating

clients
if the firm or any remaining member

has confidential material information
about the former
members
clients
Ch. 5. Conflicts of
Interest Part 2
71
NY R. 1.10 (c) a lawyer arrives
The firm may not represent

anyone adverse to an arriving
lawyers former firm in the same
or a substantially related matter
UNLESS
arriving lawyer did not acquire
any confidential information
material to the current matter
72
Ethical Screening
2009 Amendment to M.R. 1.10
ABA seeks wider margins when
lawyers change firms
73
A migratory lawyer may be

timely screened! R. 1.10
While lawyers are associated in a

firm, none of them shall knowingly
represent a client when any one of
them practicing alone would be
prohibited from doing so by Rules 1.7
or 1.9, unless
the prohibition is based on a
personal interest of the disqualified
lawyer and does not present a
significant risk of materially limiting
74
Migratory lawyer
(i) the disqualified lawyer is

timely screened from any
participation in the matter and is
apportioned no part of the fee
therefore
75
(ii) written notice is promptly

given to any affected former
client including
- a description of the
screening procedures
employed
76
R. 1.10 notice of screening of laterals

- a statement of the firm's
and of the screened lawyer's
compliance
- that review may be
available before a tribunal
-agreement by the firm to
respond promptly to any
written inquiries or
objections by the former
client about the screening
procedures
77
(iii) certifications of compliance

with these Rules and with the
screening procedures shall be
provided to the former client
by the screened lawyer and
by a partner of the firm
at reasonableintervals upon the
former client's written request
78

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Chapter 5 - part 2

Conflicts between clients

Ch. 5. Conflicts of Interest Part 2

Q.5- 13 p. 453 Gifts and deals RPC

(A) Yes, because the client, without

R 1.8 (a)Business transactions

(1) the transaction and terms on

Ch. 5. Conflicts of Interest Part 2

R 1.8 (a)Business transactions

(2) the client is advised in

Ch. 5. Conflicts of Interest Part 2

R 1.8 (a)Business transactions

(3) the client gives informed

Ch. 5. Conflicts of Interest Part 2

MRPC 1.8 (c)

(c) A lawyer shall not solicit any

MRPC 1.8 (c)

For purposes of this paragraph,

Ch. 5. Conflicts of Interest Part 2

Q. 5-14, p. 453 Literary rights

What is the conflict of interest

Do we need the bright line rule

R. 1.8 (d) Literary rights

(d) Prior to the conclusion of

Sexual relations with clients

Who is the lawyer?

Who is the client?

What is the impact, if any, on

Ch. 5. Conflicts of Interest Part 2

R. 1.8(j) Sexual relationships

(j) A lawyer shall not have sexual

Literally true cf. Inglimo, p.459

Now, I have to go back to work on

Ch. 5. Conflicts of Interest Part 2

Is it proper to accept representation?

R. 3.7 Lawyer Advocate as

(1) the testimony relates to an

(2) the testimony relates to the

Ch. 5. Conflicts of Interest Part 2

R. 3.7 Lawyer Advocate as

(3) disqualification of the lawyer

Ch. 5. Conflicts of Interest Part 2

R. 3.7 Lawyer Advocate as

(b) A lawyer may act as advocate

The continuing duty of

Ch. 5. Conflicts of Interest Part 2

Restatement 122 - Client Consent to a Conflict

Informed consent requires:

Ch. 5. Conflicts of Interest Part 2

Restatement - Conflicts with Former Clients

Restatement - Conflicts with Former Clients

The current matter is substantially

Ch. 5. Conflicts of Interest Part 2

Ch. 5. Conflicts of Interest Part 2

(D) refuse to represent Owner and

Which of the following would be

Ch. 5. Conflicts of Interest Part 2

Q. 5-19, p. 471 Should K&E be

are not former clients.

Westinghouse v. Gulf Oil (C.A. 7 1978)

R. 1.9 (a) former client

R. 1.9 former client

R. 1.9 former client