2013 Law Seminar Conflicts of Interest and other Ethics Hypotheticals Presented by Kristen Gould, ASBA Staff Attorney.

2013 Law Seminar2013 Law Seminar

Conflicts of Interest and other Ethics Hypotheticals

Presented by Kristen Gould, ASBA Staff Attorney

Hypo #1Hypo #1

Rule 1.7 – Conflict of Interest: Rule 1.7 – Conflict of Interest: Current ClientsCurrent Clients(a) Except as provided in paragraph

(b), a lawyer shall not represent a client if the representation involves a concurrent conflict of interest

Rule 1.7 – A concurrent conflict Rule 1.7 – A concurrent conflict of interest exists if:of interest exists if:(1) the representation of one client

will be directly adverse to another client; or

Rule 1.7 – A concurrent conflict Rule 1.7 – A concurrent conflict of interest exists if:of interest exists if:(2) there is a significant risk that the

representation of one or more clients will be materially limited by the lawyer’s responsibilities to:– another client– a former client– a third person, or– by a personal interest of the lawyer

Rule 1.7 – Hypo #1Rule 1.7 – Hypo #1

Atticus Finch represented the Do Right School district administration last year for a teacher termination hearing; another lawyer served as the hearing officer.

Atticus has just been contacted by the president of the Do Right school board about representing the district in a possible buyout of the superintendent’s contract.

Rule 1.7 – Hypo #1Rule 1.7 – Hypo #1

Atticus hesitates. He wonders: Did his previous representation of the school district’s administration—including the superintendent--create a conflict of interest with representing the board, this time against the personal interests of the superintendent?

Rule 1.7 – Hypo #1Rule 1.7 – Hypo #1

Question: Is there a conflict of Question: Is there a conflict of

interest for Atticus to represent the interest for Atticus to represent the

board concerning the board concerning the

superintendent's contract buyout?superintendent's contract buyout?

Things to Consider:Things to Consider:

The representation last year was of the administrative team, in their professional capacities—not personally.

The superintendent should have understood then that Atticus was employed by the school board.

What else should he consider?What else should he consider?

Things to considerThings to consider

Past relationship with the superintendent

Superintendent's perception of lawyer/client relationship

Does superintendent have his own lawyer already?

ResolutionResolution

While Atticus is still thinking about this, the superintendent calls him to give him the name of his attorney, and says, “I know you have always represented the board, not me as an individual.”

Hypo #2Hypo #2

Rule 1.13-Organization as ClientRule 1.13-Organization as Client

(a) A lawyer employed or retained by an organization represents the organization acting through its duly authorized constituents.

Rule 1.13 Organization as ClientRule 1.13 Organization as Client

(b) If a lawyer for an organization knows that an officer, employee or other person associated with the organization . . . intends to act . . . in a matter related to the representation that is a violation of a legal obligation to the organization . . .and that is likely to result in substantial injury to the organization . . .

Rule 1.13 Organization as ClientRule 1.13 Organization as Client

. . . the lawyer shall refer the matter to higher authority in the organization, including, if warranted by the circumstances, to the highest authority that can act on behalf of the organization as determined by applicable law.

Rule 1.13 Hypo #2Rule 1.13 Hypo #2

Atticus Finch gets a call from an individual board member of one of his school district clients. The board member does not like the basketball coach. Atticus attempts to explain that the school board has no role in employee discipline and that failing to rehire the coach at the next board meeting will not make him leave the district.

Rule 1.13 Hypo #2Rule 1.13 Hypo #2

The board member interrupts him. “This is what I am going to do!” says the board member. “I have created a banner, and organized a parent protest. At the board meeting, right before the vote to rehire all staff, I am going to whip out the banner that says “Fire Coach Smith” and the audience will shout out the same!”

Question Hypo #2Question Hypo #2

Is there potential for “substantial injury” to Is there potential for “substantial injury” to the school district if this board member the school district if this board member organized protest occurs?organized protest occurs?

What must Atticus do?What must Atticus do?

Question Hypo #2Question Hypo #2

Fact twist: What if the board member says that a majority of the school board knows about the “protest” and agrees with it?

Hypo #3Hypo #3

Rule 1.7 – Conflict of InterestRule 1.7 – Conflict of Interest

(b) Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a lawyer may represent a client if:– (3) the representation does not involve the

assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal; and

– (4) each affected client gives informed consent, confirmed in writing

Rule 1.13Rule 1.13

(g) A lawyer representing an organization may also represent any of its directors, officers, employees, members, shareholders or other constituents, subject to the provisions of Rule 1.7. If the organization's consent to the dual representation is required by Rule 1.7, the consent shall be given by an appropriate official of the organization other than the individual who is to be represented, or by the shareholders.

Rule 1.7 & 1.13 – Hypo #3Rule 1.7 & 1.13 – Hypo #3

Atticus Finch has represented the Getting Better School District for several years on a variety of employment and expulsion related matters. Mainly, he has dealt with the Superintendent, Ed Ministration.

Ed calls Atticus and wants him to represent him in a divorce and contested child custody matter.

Rule 1.7 & 1.13 – Hypo #3Rule 1.7 & 1.13 – Hypo #3

Can Atticus represent Ed Ministration in Can Atticus represent Ed Ministration in

his divorce? What rule? Is there a his divorce? What rule? Is there a

conflict?conflict?

AnswerAnswer

1.13 makes it clear Atticus Finch can represent Ed.

There is no Rule 1.7 conflictThere is no reason for Rule 1.7

consent

Rule 1.7 & 1.13– Hypo #4Rule 1.7 & 1.13– Hypo #4

Ed Ministration, superintendent of the Getting Better School District, consults with lawyer Atticus Finch about his pending divorce.

In the course of that representation, Ed asks Atticus to interpret and explain a potentially illegal provision of his employment contract with the Getting Better School District

Question Hypo #4Question Hypo #4

Question: Is there a conflict with the Question: Is there a conflict with the

Doing Better School District Doing Better School District

representation for Atticus to expand his representation for Atticus to expand his

personal representation of Ed to personal representation of Ed to

include his employment contract with include his employment contract with

the district?the district?

AnswerAnswer

Yes, there is a conflict.

Additional Questions Hypo #4Additional Questions Hypo #4

Is this a conflict that is likely to be Is this a conflict that is likely to be overcome by informed client consent? overcome by informed client consent? Why or why not?Why or why not?

What does Atticus say to Ed?What does Atticus say to Ed?

Hypo #5Hypo #5

Rule 1.7 – Hypo #5Rule 1.7 – Hypo #5

Attorney Marvin Gardens usually represents teachers and other school employees against school districts, and does a great deal of plaintiff's employment work.

He also is on retainer to three local school districts and handles a variety of matters for them, including:– preparing termination and nonrenewal letters– representing the districts in employment

hearings

Rule 1.7 – Hypo #5Rule 1.7 – Hypo #5

Question: Is there a problem under the Question: Is there a problem under the

Arkansas Rules of Professional Arkansas Rules of Professional

Conduct for Marvin to represent school Conduct for Marvin to represent school

districts while sometimes representing districts while sometimes representing

school district employees school district employees againstagainst

school districts?school districts?

AnswerAnswer

As long as Marvin never represents a school district employee against one of his client districts, he has not violated one of the Arkansas Rules of Professional Conduct

Hypo #6Hypo #6

Rule 1.5Rule 1.5

(a) A lawyer's fee shall be reasonable. A lawyer shall not make an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for expenses.

Rule 1.5Rule 1.5

(b) The scope of the representation and the basis or rate of the fee and expenses for which the client will be responsible shall be communicated to the client, preferably in writing, before or within a reasonable time after commencing the representation, except when the lawyer will charge a regularly represented client on the same basis or rate. Any changes in the basis or rate of the fee or expenses shall also be communicated to the client.

Rule 1.5 --Hypo #6Rule 1.5 --Hypo #6

Layla Lawyer has a new client, the Simply Splendid School District.

Over the course of 6 months, she files an answer on a lawsuit, consults with the superintendent primarily by telephone and office visit, and attends three board meetings.

Rule 1.5 --Hypo #6Rule 1.5 --Hypo #6

Fees are never discussed by either party.

After 6 months, Layla sends the district an non-itemized bill for $75,000, $15,000 of which is for expenses and travel.

Discuss

– A) Has a rule been violated?B) Is this appropriate?

– C) What is the district’s recourse?

Hypo #7Hypo #7

Rule 4.2 Communication with Rule 4.2 Communication with Person Represented by CounselPerson Represented by Counsel In representing a client, a lawyer shall not

communicate about the subject of the representation with a person the lawyer knows to be represented by another lawyer in the matter, unless:– The lawyer has the consent of the other

lawyer– Is authorized to do so by law

Rule 4.2 – Hypo #7Rule 4.2 – Hypo #7

Ima Lawyer has been asked to perform an independent investigation of alleged inappropriate conduct. It relates to, Mary, who is a Paraprofessional who may be in a romantic relationship with a student.

Eventually, Ima interviews Mary. Mary bursts into tears, confesses to being pregnant with the student’s child, and sobs hysterically.

Rule 4.2 – Hypo #7Rule 4.2 – Hypo #7

Mary blows her nose, and asks Ima, “I could ask my divorce attorney this, but do you think this will give me any trouble in my pending divorce?”

How should Ima handle this?

Hypo #8Hypo #8

Rule 4.3 – Dealing with Rule 4.3 – Dealing with Unrepresented PersonUnrepresented PersonWhen the lawyer knows or

reasonably should know that the unrepresented person misunderstands the lawyer's role in the matter, the lawyer shall make reasonable efforts to correct the misunderstanding

Rule 4.3 – Dealing with Rule 4.3 – Dealing with Unrepresented PersonUnrepresented PersonThe lawyer shall not give legal advice

to an unrepresented person, other than the advice to secure counsel, if the lawyer knows or reasonably should know that the interests of such a person are or have a reasonable possibility of being in conflict with the interests of the client

Rule 4.3 – Hypo #8Rule 4.3 – Hypo #8

Atticus Finch represents the Do Right School District in the matter of the termination of Otistine Bass, who was observed to be drunk at Open House.

The teacher requests a board hearing, but does not have a lawyer or representative present at the hearing

The teacher seems pretty confused during the hearing

Rule 4.3 – Hypo #8Rule 4.3 – Hypo #8

During a break in the hearing, attorney Atticus gets a drink from a water fountain down the hall from the board room

Otistine approaches Atticus with a piece of paper and asks, “Do you think I should just give my resignation and end the hearing now?”

Rule 4.3 – Hypo #8Rule 4.3 – Hypo #8

Is Otistine asking for legal advice, or is she asking a procedural question about the hearing?

Rule 4.3 – Hypo #8Rule 4.3 – Hypo #8

Question: What should Atticus say to Question: What should Atticus say to

the teacher?the teacher?

AnswerAnswer

It is Atticus duty to explain to the custodian that:– Atticus represents the school district– The school district’s interests are

directly different from those of the custodian

– Atticus cannot advise her Atticus should advise her to seek advice

from her own attorney

Hypo #9Hypo #9

Rule 4.3 – Example 2Rule 4.3 – Example 2

Mrs. Kay, a wealthy business leader, wishes to sell three acres of highway frontage to the school district

She also wishes to donate an additional 10 acres of woodland behind the frontage

The school district is represented by Ima Lawyer who explains to Mrs. Kay that she represents only the school district’s interests

Ima asks Mrs. Kay if she has a lawyer to represent her for the transaction

Rule 4.3 – Example 2Rule 4.3 – Example 2

Mrs. Kay responds:– “Darlin’ I’ve represented myself in $10

million deals– I don’t need to pay a lawyer to sell a

‘piddly’ little 3-acre tract to a school district

– You just go ahead and represent the school district, and I can take care of myself”

Rule 4.3 – Example 2Rule 4.3 – Example 2

Question: Given that Mrs. Kay has a Question: Given that Mrs. Kay has a

reputation of being very knowledgeable reputation of being very knowledgeable

about real estate law, what should Ima about real estate law, what should Ima

do?do?

AnswerAnswer

In this situation, due to Mrs. Kay’s sophistication and experience, it is not inappropriate for Ima to negotiate directly with Mrs. Kay

Questions?Questions?