Law Governing Lawyers Fall 2007 (Rofes) -Nathan Erickson

BACKGROUND & REGULATION BACKGROUND 1. Sources of LGL: 1) ABA model rules, 2) WI version of rules, 3) Restatement of LGL CHARACTER, FITNESS, ADMISSION TO THE BAR 2. WI Admission Requirements (four of them) (Rule 40.02) a. Age of Majority (18) b. Satisfaction of legal competence requirements i. Diploma privilege, bar exam, or proof of practice elsewhere c. Satisfaction of Character & Fitness requirements (Rule 40.06) i. Applicant has burden to show good moral fitness, an undefined standard. ii. Purpose: 1) protection of clients, 2) protect administration of justice, 3) PR iii. Common Character Issue: crimes, untruthfulness, fiscal mismanagement d. Oath (Rule 40.15): includes promise to abstain from offensive personality. 3. Best Advice: be honest & candid. Coverup creates more issues than the offense. 4. Rule 8.1: applicant may not make false statements or fail to disclose relevant facts SYSTEM OF LAWYER DISCIPLINE 5. Methods of Enforcement: 1) bar admission, 2) discipline, 3) Civil Actions 2. Purposes of Discipline a. Cleansing Function: identify & remove deviant members b. Deterrence Function: provide incentives for lawyers to comply c. Public Relations Function: Enhance image of lawyers 3. Misconduct (Rule 8.4) a. Covers 1) violation of any conduct rule, 2) criminal activity reflecting on honesty, trustworthiness, or fitness, 3) non-criminal conduct involving dishonesty, fraud, deceit, or misrepresentation, 4) conduct prejudicial to admin. of justice b. Includes things like dishonesty that are broadly defined (may include tax problems) c. Need not actually cause harm to violate rules 4. Disciplinary Choice of Law (Rule 8.5) a. Answer to WI if admitted to WI (regardless of location), or if action was in WI b. Safe Harbor: OK if conform to rules of that you reasonably believe govern the location 5. Duties: a. Competence (Rule 1.1): Provide competence (knowledge, skill, thoroughness) of general practitioner & determine when specialist is needed. Consider such things as experience, specialization, and ability to refer to a specialist. Must keep abreast of changes through continuing education. b. Diligence (Rule 1.3): Includes promptness. Do not procrastinate or take more work than you can handle. 6. Civil Actions for Malpractice a. Most complaints come in emotional areas (family & criminal law) b. Most complaints relate to inattentive lawyering (communication, procrastination, diligence) 6. Problem 1 (p32): c. Gary cheated on bar exam, uses connection for leniency, hides criminal past by name change. d. Main points are demonstration of dishonesty and that incidents are recent. e. Hypo: Gary uses you as bar reference & you receive inquiry by mail. Required to respond to inquiry, confidentiality applies. Could claim confidentiality (red flag), get Garys consent to answer, advise Gary to modify application to disclose his past problems (best solution). 7. Problem 2 (p46) f. Lawyer Black has an alcohol problem. This is violation of competence duty. g. Lawyer Andrews procrastinates and seeks continuances. Violation of diligence duty. REPORTING PROFESSIONAL MISCONDUCT 8. Duty to Report (Rule 8.3) a. Five Elements: i. Knowledge: reasonable lawyer would form opinion that conduct had occurred ii. Violation of MRPC: Invokes the very broad requirements of rules iii. Raising Substantial Questions [as to..] iv. Honesty, Trustworthiness, Fitness: need not be related to professional capacity v. Appropriate Professional Authority [should be notified]: usually notify the state Bar

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Law Governing Lawyers Fall 2007 (Rofes) -Nathan Erickson

Limits on Duty: Trumped by confidentiality if it relates to representation of a client i. WI 8.3(c): Duty to discuss with client whether lawyer can be permitted to disclose 9. Himmel Case: Lawyer disciplined for failure to report that prior lawyer ran off with clients money. Reached an agreement with that lawyer to get the clients money back, but also had a duty to report. 10. In Re Ethics Opinion: Client refuses to allow lawyer to rat out prior embezzling lawyer. Confidentiality trumps. 11. Weider v Skala: Despite lack of whistleblower protection in NY, firm may not fire attorney for his reporting misconduct of another attorney, b/c that duty was required by MRPC, which lawyer was required to comply with. MALPRACTICE AND OTHER FORMS OF REGULATION 12. Generally: a. Malpractice is a tort: show 1) duty, 2) breach, 3) cause, 4) harm b. Role of Expert Testimony: Usually use an expert to show reasonable lawyer actions. c. MRPC not intended to be standard for civil liability. But may be evidence of breach of duty. d. Lack of Expertise is No Excuse: obligated to consult w/ or refer to specialist 13. Following Instructions (Olfe Case): Lawyer failed to follow clients instruction to secure a first mortgage & client loses big on the mistake. Lawyer breached duty to client (by bad action, as opposed to inaction in prob. 3). 14. Protection Against Malpractice Liability (Rule 1.8h) a. Client may not preemptively waive malpractice claims unless independently represented in agreement b. Practice is strongly discouraged by law b/c it undermines motivation to provide good representation 15. Liability To Non-Clients a. Liability for using their confidential info, for harming an intended beneficiary in T&E b. Opinion Letters: e.g., Lawyer writes legal tax opinion for a clients CPA c. Accomplice Issues: Lawyer may be charged accomplice for assisting clients with crime 16. Problem 3: (p64) a. Lawyer fails to get medical opinion & settles med. mal. claim too cheap. Violated competency reqt. b. Lawyer botches a trust causing a big tax payment. Competence. Should have consulted w/ specialist. c. Lawyer botches criminal case by missing 1st day of trial, then arriving late & unprepared. i. Ineffective Counsel: New trial by showing 1) incompetent lawyering, 2) Altered outcome of trial ii. Sanction: Judge may impose sanction on the lawyer iii. Malpractice: Rare for to succeed in malpractice (usually just wants new triial). But possible. But would have to show that underlying conviction was incorrect. LAWYER/CLIENT RELATIONSHIP FUNDAMENTALS: GETTING IN, GETTING OUT, ALLOCATING DECISION MAKING AUTHORITY 17. Formation of A/C Relationship a. Forms when 1) A & C manifest agreement, or 2) Reasonable client belief that A/C relationship exists b. Togstad: went to lawyer w/ potential claim. Lawyer didnt think there was much of a case, but left relationship ambiguous. Turned out to be a big case but SOL had run. Held that A/C relationship had formed based on client perception. Attorney failed in min. duty to discuss SOL & investigate. i. Errors: Attorney opined as to merits of case, failed to advise to seek another attorney, failed to mentions SOL. Most importantly, he failed to clearly indicate he was declining the case. c. Case: A/C formed by client discussion with firm secretary. Firm has burden to clarify. d. Engagement Letter: Identifies client, scope of representation, fees, other aspects (e.g., involve the mother) e. Disengagement Letter: Proper tool to document that lawyer is declining a case. f. Right to refuse representation may be limited. E.g., divorce firm that refused to represent males. 18. Duties to Prospective Clients a. Confidentiality applies even if no A/C relationship formed (rule 1.18) b. Must protect any documents received, as if they belonged to actual client c. Responsible for advice given (like Togstad error telling client there was no case) 19. Allocation of decision making authority (rule 1.2) a. Generally, client decides objectives and lawyer decides means. We really want client consent to both b. Lawyer can agree to representation regarding limited scope (i.e., only certain claims). c. Lawyer muse present any settlement offers to the client. d. Hypo: Opposition wants time extension but your client wants to be a jerk. Engagement letter should indicate that lawyer makes this decision. 20. Terminating the A/C Relationship (rule 1.16) a. Mandatory Withdrawal: i. Representation involves violating law or rules ii. Lawyers physical or mental condition materially impairs representation b.

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Law Governing Lawyers Fall 2007 (Rofes) -Nathan Erickson

iii. Lawyer is discharged (fired) b. Discretionary Withdrawal: i. If withdrawal can be accomplished w/o adverse effect ii. Client persists in actions involving lawyers services that lawyer believes are crime/fraud iii. Client uses services to perpetrate crime/fraud iv. Client insists on actions lawyer finds repugnant (fundamental disagreement) v. Client fails to substantially fulfill obligations to lawyer (i.e., not paying bills) vi. Representation creates unreasonable financial burden on lawyer (or unreasonably difficult) vii. Any other good reason (catch-all) c. Court Order to Continue: Need judges permission to withdraw (even if good reasons) d. Protecting Former Client After Withdrawal: still owe duties to former client after withdrawal including notice, sufficient time to attain new counsel, refund unearned fees 21. Problem 4: Client mad at broker who lost retirement funds. Client wants blood! Claims of churning & suitability. a. Lawyer may limit scope: E.g., agree to pursue churning/suitability claims but not license suspension. b. Lawyer needs clients consent in order to argue that client lacked sophistication. Embarrassing to client. DUTY OF CONFIDENTIALITY 1. Elements of Obligation: 1) Confidentiality, 2) Privilege, 3) Work Product 2. Confidential (MRPC 1.6): a. No revealing info. related to client rep. w/o client authorization (note: lobbying is not lawyering) b. Broader than privilege and includes information that is privileged. They are not the same! c. Ramifications: i. Lawyer has affirmative obligation not to reveal w/o client consent. Duty includes shredding documents (see Rstmt 60(1)(b)). d. Exceptions To Confidentiality i. MRPC: May reveal to prevent reasonably certain belief of death/bodily harm, future crime/fraud, prevent lawyer services being used for 3rd party financial harm, prevent/mitigate/rectify substantial injury caused by past crime/fraud ii. WI Variation (WI SCR 20:1.6) (big!): same as MRPC but 1. SHALL reveal to prevent future crime/fraud likely to result in 1) death, 2) substantial bodily harm, 3) substantial financial injury to 3rd party iii. Notes on WI: 1. Greater obligation to rat on future crime of clients than non-clients 2. Past crime/fraud requires that lawyers services were used to effectuate it. iv. Safeharbor: OK to seek ethics opinion from attorney. But speak hypothetically. 3. Privileged (Fed. Rules Evid.): a. Four Elements (p132): 1) communication, 2) made between privileged persons, 3) in confidence, 4) for purpose of obtaining or providing assistance to client b. Ramifications: i. Neither lawyer nor client can be compelled to talk about the communication. Info. can not be obtained from the lawyer. Client cant be asked about that communication (e.g., what did you say to lawyer?) but can be asked what he knew (e.g., what did prior owner tell you?) c. Privilege survives death d. Does not include communication related to future crime/fraud. But does include past crimes. e. Waiver/Loss of Privilege (yes, privilege, the more narrow aspect of confidentiality) i. 1) Express Waiver by Client, 2) Waiver by Inaction (failure to object), 3) Client Reveals to a Non-Privileged Person (e.g., tells his friend about robbery), 4) Legal assistance or communication put in issue (claim of malpractice or ineffective assistance.), 5) Court Order ii. Right to waive belongs only to client, not to lawyer iii. WI Case: Lawyer violated by turning over to many docs in discovery (some was privileged). 4. Work Product: (Rsmt 87, p136) Protects info. prepared in anticipation of litigation 5. Problem 7: Client told homebuyer that basement was dry. Client was told by prior homeowner of floods. You interview prior owner who confirms telling client. You take notes in interview. Buyer sues & subpoenas notes. a. Privileged? Yes, meets the 4 elements. b. Confidential? Yes, related to rep. of client. Need client authorization. c. Work Product? No, not prepared in anticipation of litigation. 6. Prob. 7 Hypo: Info given by prior homeowner (that basement floods). You have notes on his credibility at trial. a. Privileged? No, not comm. b/w privileged persons. (potential witness not agent of client or lawyer) b. Confidential? Yes, info related to representation of the product.

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Law Governing Lawyers Fall 2007 (Rofes) -Nathan Erickson

c. Work Product? Yes, gathered in reasonable anticipation of future litigation. 7. Prob. 7 Hypo: Info conveyed by banker (that client has financial difficultyimportant for settlement negot.) a. Privileged? No, not privileged parties. b. Confidential? Maybe, related to rep. of client. Unlike privilege, source is irrelevant for confidentiality. c. Work Product? No. 8. Hypo 1: Divorce lawyer learns that client intends to shoot husbands new girlfriend. Client leaves office w/ gun. a. WI: This is a shall revealto prevent crime/fraud resulting in substantial bodily injury/death b. MRPC: May reveal to prevent reasonably certain death/bodily harm. (need not even be future act, but is) 9. Hypo 2: Client says he planted device to burn building. a. Again, a SHALL reveal in WI, but a MAY reveal in MRPC 10. Hypo 3: Lawyer help prepare client loan documents to borrow $5M then learns of clients fraudulent statement. a. WI: Likely a SHALL reveal, assuming we consider it a substantial financial injury to bank b. MRPC: MAY reveal 11. Hypo 4: Same as #3, but lawyer learns of fraud after closing. a. MAY reveal in both WI & MRPC. Rectify susbst. financial injury where lawyers services were used. 12. Spalding v Zimmerman: a. Defense doctor discovers aneurysm in accident victim, so they settle for cheap w/o revealing to victim. Victim discovers later & undergoes emergency surgery. This is a MAY reveal under both WI & MRPC. FEES (MRPC 1.5) 1. Reasonableness: the key principle in attorney fees a. MRPC lists factors to consider (skill needed, novelty, time/effort, complexity, market rates) 2. Notice: a. Must communicate fees prior to undertaking, or at least early on in representation if over $1k b. Writing: WI requires notice of fees to be in writing (MRPC does not) 3. Responsiveness: Respond promptly to client inquires regarding fees 4. Contingency Fees: a. Contingency arrangements must be in writing b. Generally OK, except in certain family law & criminal defense matters i. Family Law: (we dont want lawyers motivated to prevent reconciliation) 1. MRPC 1.5: No CF for domestic relations matters 2. WI 1.5: No CF for any family matter including divorce ii. Criminal Law (dont want to discourage plea agreements) 1. MRPC 1.5: No CF for defendant in criminal case iii. But there are also problems with hourly fee agreements (slow work, dragging out proceedings) 5. Advanced Fees & Retainers a. Retainer: Earned immediately. Client pays to make lawyer available when needed (opportunity cost). b. Advanced Fee: Pre-payment for future services, deposited in trust. Not earned until service is performed. 6. Division of Fees (MRPC 1.5(e)) a. Requires total amount must to be reasonable, client must be aware, and division reflects work performed 7. Minimum & Maximum Fees: lawyers may not conspire to set fees (anti-trust law) 8. Problem #5 (p99): a. Lawyer wants 1/3 over market rate (44%) b/c hes that good. Is this reasonable? i. Good: gave notice upfront. Professional client. ii. Bad: High rate for case of average complexity. b. Lawyer has contingency case for 1/3. Calculates more profitable for himself to settle. i. Cant put own interest ahead of clients. If they do settle, should consider giving back partial contingency fee or converting to flat fee due to the minimal actual work needed for case. c. Lawyer refuses client request to use hourly fee & advises client to go elsewhere. HANDLING CLIENT PROPERTY (MRPC 1.5) 1. Rule requires lawyer to promptly notify & deliver any funds that 3rd party is entitled to. Trust account must be used for funds (interest goes to IOLTA fund), safe deposit boxes for valuable property. 2. Trust Accounts: required for client funds held by attorney. Interest earned goes to IOLTA fund. 3. Problem #6 (p115): a. Contingent fee arrangement for 40% of punitive award. Award is much larger than expected, client protests & refuses to pay more than 25%. Lawyer deposits the entire award in trust until issue resolved. i. Violation for lawyer to hold on to the undisputed portion. Hold only the disputed portion. (1.5d)

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Law Governing Lawyers Fall 2007 (Rofes) -Nathan Erickson

b. Lawyer wears the ring that was won in the lawsuit. Its a prohibited use of client property. CONFLICT OF INTEREST: DUTY OF LOYALTY BACKGROUND (MRPC 1.7 1.10) 1. Dangers of conflict of interest: Disqualification, malpractice, MRPC discipline, rarely even criminal prosecution. CURRENT CLIENT CONFLICTS (MRPC 1.7) 2. Two Steps to Analyzing Conflict: a. Is there Conflict? 1. Direct Adversity (A v. B): What A gains, B loses 2. Significant Risk that Representation Will Be Materially Limited b. Exception: May still proceed if 1. Lawyer determines that he can adequately represent their interests. 1. Comment: Would an objective lawyer advise party to waive the conflict? 2. Consent: Lawyer obtains informed written consent of the clients. 1. In WI, the consent must also be signed (WI 20.1.0(f)). 2. Informed consent requires explaining the risks and alternatives. c. Prohibited By Law: Certain conflict situations are prohibited by law & cannot be waived. 1. E.g., Some states forbid single attorney in divorces, but its common in WI for cases with minimal assets and no custody issues. 3. Problem 9 (p165): H & W want to use a single attorney for divorce. Have agreed to custody & financial terms. a. Potential Conflict Issues: If things go badly, attorney could get disqualified. Also a problem for confidentiality issues, and potential malpractice claim if a party later regrets the settlement. b. Advantages: A single lawyer is cheaper, and is less likely to provoke new conflict b/w parties. c. Analysis: Check for conflict. If it exists, check for exception (adequate representation & client consent). 1. Is there a conflict? 1. Direct Adversity: Maybe. Not opposing parties, but settlement is a zero-sum game. 2. Materially limited in Representation? Maybe. H indicates that the settlement amount is a bargain, implying that maybe W is getting a bad deal. Is the representation materially limited if Lawyer cant explain to W that she should get more? 2. Conflict Exception: 1. Does lawyer reasonably believe he can provide competent representation to each client? 2. Must gain informed consent of clients. 3. Comment 18: To proceed under exception, explain that information given by one party may be shared with the other & that you may have to withdraw if there is a dispute later on. Go over advantages (cost, less conflict) and risks (no confidentiality b/c parties, potential withdrawal). 4. Problem 10 (p178) (Direct Adversity): Bank hires you to foreclose on Bolts, whom you have occasionally represented on labor issues but are not actively working with now. Can Bolts force your removal? a. Direct Adversity: Probably. It exists if Bolts is a current client (does not require an ongoing matter). Hinges on clients expectation of your future availability (also consider retainers, advanced fees) b. Waiver: Would need to get Bolts to waive. But cant promise any special treatment that splits loyalties. 5. Hypo: H & W go to L for estate planning. H tells L about ongoing paternity action that W doesnt know about. Prior to taking the representation, L should have explained to H&W that there is no confidentiality b/w the two. If lawyer failed to do that, hes probably left w/ noisy withdraw (explain a conflict prevents him from continuing). 6. Zuck Case (material limitation): L represents criminal in Case1, and represents prosecutor in civil matter Case2. Cases unrelated, but L is materially limited b/c he has a financial interest in not upsetting the prosecutor. The criminal would want to know about this situation (good indicator). Get consent from the criminal . 7. Hypo (material limitation): You have been discussing employment w/ opposing counsels firm. Like in Zuck, you have a strong interest in not offending the firm, which may limit your zealousness. 8. Hypo (indirect adversity): Neighbor wants you to challenge mortgage prepayment legality. You have client banks & know that success would be against their best interest. This is a materially limited situation (as opposed to direct adversity). Probably could proceed with this case (but its bad business). a. Rules do not require L to decline for indirect adversity, until L becomes materially limited. b. Complication: Informing the bank about the upcoming challenge would breach confidentiality! 9. Hot Potato Rule: You can just dump an old client to avoid conflict with a new & better client. (see Cinerama). 10. Waiver of Future Conflicts (p191): a. Lawyer requests that client waive any future conflict that may arise (common w/ big firms). b. Generally upheld, unless too vague or open-ended. Consider client sophistication as well.

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Law Governing Lawyers Fall 2007 (Rofes) -Nathan Erickson

c. All other waiver requirements apply (waiver in writing, lawyers reasonable belief of competent rep) LAWYER/CLIENT CONFLICTS 1. MRPC 1.8(a): Business Transaction With Clients a. Must be objectively fair, informed written consent of client, advise client of benefits of seeking independent counsel & give client time to do so. b. Exception: Ordinary commercial transaction b/w L & C are ok (e.g., C is a car dealer & L buys a car). 2. MRPC 1.8(c): Solicitation of Gifts a. May not solicit client gifts, but may accept if its fair (e.g., simple holiday gift). b. May not prepare paperwork to transfer a substantial gift to self or close relative. c. Other Rules: Restatement says no accepting substantial gifts, but MRPC does not go this far. However, substantial gifts are presumptively voidable under doctrine of undue influence. 3. MRPC 1.8(j): Sex With Clients (Also, WI 1.8(j)) a. No sex (broad def.) w/ clients unless relationship existed prior to A/C relationship. b. For corporations, it applies to persons who supervise, direct, or consult w/ lawyer on behalf of org. c. WI State Bar fought this on grounds of constitutional right to privacy but was rejected. (wanted a lesser rule only prohibiting taking advantage of the client). 4. Problem 12: High school friends. a. Client wants to start a business but needs cash. Lawyer offers services of 10% of stock. i. Violated 1.8 by not advising for independent counsel, & not getting written informed consent. b. Lawyer knows where client will build & wants to invest if nearby property that will appreciate. i. Probably not a 1.8 violation b/c not disadvantageous to client (but might be an agency law problem). Also, potential problem if deal looks bad but lawyer is invested in seeing it through. c. Client is happy & wants to give lawyer a $75k auto. i. Not a solicitation but prohibited from doing title change. Also is presumptively voidable. d. Lawyer & client getting it on and want to married. i. Yes, violation. No intimacy prior to A/C representation. 5. Hypo: L takes a loan from C, but fails to disclose his bad credit & uses very low interest rate. (violation of 1.8). FORMER CLIENT CONFLICTS (MRPC 1.9) 1. Intro: a. less loyalty owed to former clients. Can go adverse but cant switch sides in a substantially related mater. b. Rule based on twin principles of confidentiality & loyalty 2. MRPC1.9: May not represent another client in a substantially related matter materially adverse to former client. a. Cmt. 19: Matters can be substantially related by 1) facts, or 2) law 3. Hypo: L helps client A sell business to B. Later, L takes on B and advises him to cease payments to A. 4. Hypo: Violation to represent client against barowner, after L first consulted w/ barowner but declined his case. 5. Hypo: may also apply to work done as law student or staff, if it provided insight into clients case or procedures 6. Hypo: Violation where L represented GM for years on lemon law, then quit & went plaintiffs side to sue GM. 7. Work Product: If L1 disqualified, L2 usually entitled to L1s work product so that client doesnt have to pay for it again. Unless it provides an improper advantage. If L1 should have known, client might recover from him. 8. Problem 14 (p239): L takes med-mal case against Dr., after previously representing Dr. in adoption matter. a. Probably OK. But could be a problem if e.g., L has knowledge that Dr. is an alcoholic. IMPUTED DISQUALIFICATION (MRPC 1.10) 9. Intro: a. Generally, one lawyers conflict is imputed to his entire firm. b. Key is to follow the taint. If tainted lawyer leaves, then firms is OK again (if he left no confid. Info.) c. When a lawyer leaves a firm, he takes with him only actual conflicts (not ones imputed by the old firm). 10. MRPC 1.10 a. Lawyer may not represent a client when another lawyer at the firm would be barred under 1.7 or 1.9. b. Cmt 11: lawyers also get imputed conflict from those with close familial relationships (e.g., lawyer spouses), but this type of taint does not get imputed to the whole firm (but client must be informed of it). c. Model rule rejects screening, but WI softens the rule for former client conflicts. 1. WI: If one lawyer is conflicted, the firms is conflicted UNLESS 1. Its a former client conflict (20:1.9) AND 2. disqualified lawyer did only minor & isolated services & did it at a former firm AND 3. written notice is promptly given to the affected former client

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Law Governing Lawyers Fall 2007 (Rofes) -Nathan Erickson

11. Problem 15 (p253): NF represents DBIZ. PBIZ sues DBIZ & NF hires LF as local counsel. Partner (TL) from LF used to represent PBIZ when he was a solo practitioner. a. LF is conflicted out due to TLs former representation. If TL leaves the firm then LF is OK again unless BOTH 1) substantially related matter & 2) X tainted another lawyer by passing confidential info. NF will need to find new local counsel. b. If an associate A leaves LF, his new firm is able to take on DBIZ, because A is no longer subject to taint. 12. Nelson Case: L1 does contract work for C in a biz deal. L1 changes firms and C hires that new firm to litigate against other investment partners in the failed biz deal. Other partners want firm disqualified. a. Held: When new firm hired L1 it was presumed to gain the imputed conflict. Firm failed to implement screening in a timely manner & was unable to overcome the presumption. Firm is disqualified. ADVISING, COUNSELING, NEGOTIATION LAWYER AS ADVISOR 1. MRPC 1.2: shall not assist a client w/ engaging in a known crime or fraud 2. MPRC 1.13: a. For an organization, the client is the entity, not individual officers w/in it. b. Reporting Up: if substantial injury to corp., including violation of law that might reasonably be imputed to the organization, then may need to report up to board of directors c. Reporting Out: If org. fails to address concerns that are likely to result in substantial injury then may reveal regardless of 1.6 confidentiality rules i. Remember that WI 1.6 requires breaking confidentiality to prevent substantial injury 3. Problem 18 (p297): CBIZ wants to sell flammable clothing in violation of fed. law, b/c expected tort damages are less than the price of a recall. a. First try to persuade him, then report up, then report out to regulatory agency. b. What safest? Under MRPC youre never required to disclose, but you are in WI! 4. Hypo: Client w/ pillow case just killed his wife & asks for list of countries w/o extradition treaties a. OK to discuss consequences of certain actions, but at what point are you assisting under 1.2? LAWYER AS NEGOTIATIOR 5. MRPC 4.1: No false statement of material fact to 3rd party except for 1) price estimates, 2) settlement intentions. 6. MRPC 1.4: Duty to inform client of all settlement offers. 7. MRPC 1.8(h): Cant negotiate for one client against interest of another client w/o written consent 8. Hypo: Client selling property. Would accept $300k, but you say not a penny less than $310. Its OK. 9. Omission of Facts: Concealing death of you client is an MRPC violation (Virz case, p235). Its less clear whether lawyer would need to disclose knowledge that SOL has run on a claim (ABA says no). 10. Hypo: You discover flaw w/ cities DUI testing. City will drop if you agree not to take any more DUI cases. a. MRPC 5.6: may not offer or make agreements w/ restrictions on right to practice as part of a client deal. Also barred from deals agreeing never to use a particular expert again. 11. Hypo: You have two clients and opposing insurer says it will settle both claims for $20k. a. Not permitted to use that offer to settle for one client w/o written authorization from both clients. 12. Problem 20 (p327): a. DUI client admits to you that he was drunk, but cop had no breathalyzer. Criminal & civil cases. b. MRPC 4.1 allows you to say no evidence of drinking but not he was not drinking ETHICAL PROBLEMS IN LITIGATION FILING THE CIVIL SUIT 13. MRPC 3.1: Meritorious Claims: must be a basis in law & fact that is not frivolous. Must have a good faith argument for an extension, modification, or reversal of existing law. a. WI 3.1: Much softer than MRPC. (very difficult to violate WI version) i. WI requires knowingly frivolous, as opposed to MRPC objective standard ii. WI violation only if merely to harass, not just principally b. FRCP 11: Companion rule prohibiting filing for improper purpose (including unnecessary delay) 14. MRPC 3.2: must make reasonable efforts to expedite litigation, consistent w/ interest of client. (contradictory) 15. ADR: a. MRPC 2.4: When acting as a neutral, clarify that you dont represent them. b. MRPC 1.12: After acting as 3rd party neutral, you can not represent those clients (but not imputed here) 16. Problem 23 (p377): Wine maker learns that preservative is carcinogen & fed. law bans it, but science is not clear. Client wants to delay until wine sells out. Considering a constitutional attack, but similar one failed 2 years ago. a. Probably OK under 3.1, if you can show different facts, constitutional claim, or updated science.

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b. A mixed purpose is OK. Issue is with the law. Delay is also helpful but not sole purpose. CANDOR & DECEPTION 17. MRPC 3.3: Candor: a. No false statements of fact or law to tribunal. b. Must correct material misstatements that you have made. c. Must disclose directly adverse authority if not disclosed by opposition (only controlling jurisdiction). i. Theory is that creating bad precedent hurts more than just the clientbad for whole system d. Must take remedial action to prevent/remedy client fraud (including disclosure to tribunal). e. Note: generally no affirmative obligation to turn over a bad witness or bad facts 18. MRPC 3.4: No frivolous discovery or obstructing access to evidence. 19. Hypo: Failure to disclose a witness who would hurt your case? a. Rules dont require this disclosure. Only forbids obstructing access to such things. 20. Hypo: Lawyer know that court about to base decision on its own mistake (e.g., no criminal record) a. Question splits many experts. Cant confirm a misstated fact, but can probably remain quiet. 21. Problem 25 (p412): You discover the opposing counsel fails to discover relevant cases that hurt you. a. Hinges on whether its directly adverse under 3.3. Facts indicate it is. b. Ex Parte Proceedings: Here there is a special obligation to disclose all material facts (its non-adversarial) c. FRCP 26 (p418): In these jurisdictions there are affirmative discovery, but still doesnt include a witness. PERJURY 22. MRPC 3.3: Perjury: a. Before Obligations: i. lawyer may not knowingly offer evidence he knows is false (note: know is a strong word) ii. L may refuse to offer evidence (except criminal testimony) that he reasonably believes is false b. After Obligations: i. If material evidence offered that lawyer later learns is false, must take remedial actions ii. How to Remedy: 1. First, try to convince the client to come forward 2. Try to withdraw if that will remedy situation (rare that it would) 3. Make disclosure to the court (preferably in chambers) [friedman disagrees here] 23. Nix v Whiteside: no const. right to commit perjury (not ineffective counsel for lawyer to talk him out of perjury). a. But dissent believes that refusing to use false testimony could sometimes amount to ineffective counsel. 24. Narrative Approach: generally rejected as a method of examining a witness that you know will commit perjury a. WI: Rare exception (McDowall, p27 in supp.): Use narrative if know he will perjure. b. Friedman: Suggests just regular Q&A and to go with the perjured testimony 25. Problem 27 (p447): Robbery wants to use false alibi. Agrees to drop it, but then testifies to it anyway. a. This is a material misstatement. Must be remedied under the rule. (Friedman disagrees) DELIVERY OF LEGAL SERVICES ADVERTISING & SOLICITATION 26. MRPC 7.1: No false or misleading information about lawyer services. a. Includes misrepresenting fact/law, leaving out info. needed to prevent misunderstanding, creating inflated expectations, comparisons with other lawyers/firms not factually substantiated (e.g., best settlements) 27. MRPC 7.2: Lawyers may advertise [by a number of specified means including mail] 28. MRPC 7.3: a. No real time solicitation except to 1) other lawyers, 2) certain personal relationships b. No solicitation at all to those whom lawyer knows dont want to receive solicitation c. No solicitation involving coercion, duress, harassment (see also WI 7.3) d. WI 7.3: No solicitation to those in a physical/emotional/mental state that makes them unlikely to exercise reasonable judgment in employing a lawyer (e.g., mail to plane crash families, flowers to funerals) 29. Background: Prior to 70s constitution provided no protection for commercial speech. Changed in a case where a pharmacist won right to advertise his prices, under theory that information good for public & part of free speech. Later expanded to lawyer advertising. States can now regulate where needed, but cannot ban. a. Ohralik (p519): Court finds lawyers in-person solicitation of accident victim is too high-pressure b. Shapero (p532): Strikes down ban on mail solicitation. Not high-pressure b/c allows time to consider. c. Edenfield (p530): Court protects CPA in-person solicitation on the basis of providing info to public. This ruling implied that advertising should also open up for lawyers, but it never happened.

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Law Governing Lawyers Fall 2007 (Rofes) -Nathan Erickson

d. FL Bar Case: SCOTUS upheld 30-day wait before contacting accident victims. (but not total ban) 30. Electronic Advertising: OK if more similar to mail (asynchronous). Not OK if real-time (chat rooms) a. TN Case: Spammer disciplined for violation of MRPC 8.4 (conduct prejudicial to admin. of justice) 31. Problem 31: New lawyer publishes ad in newspaper to introduce himself, including flat rate of $95/hour.

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