Conflicts of Interest
What is the rule number?
1.7
What is the rule number?
1.6
The police arrested Professor Stevenson and would not permit him to communicate directly with his attorney. Professor Stevenson asked his longtime friend and confidant, Sisyphus, to convey to his attorney that the attorney should not permit the police to search Professor Stevenson’s home. Later, the prosecution calls the friend to testify about the contents of the message he related from Stevenson to his attorney. The attorney claims this information is privileged.
How should the court rule?
The contents of the message transmitted through the friend are privileged and therefore both undiscoverable and inadmissible at trial, because the friend was acting as an agent of the client.
b) The contents of the message are not privileged because the client disclosed them to a third party to transmit the information to the attorney.
c) The attorney waived privilege for the information by receiving it from a third party without the client present.
d) The friend has a right to testify and disclose the information if he chooses, but neither the client nor the attorney should have to disclose it themselves.
Conglomerate Corporation owns a little more than half the stock of Giant Company. Conglomerate’s stock, in turn, is public, available on the public stock exchange, as is the remainder of the stock in Giant Company. The president of Conglomerate Corporation has asked Attorney Stevenson to represent Giant Company in a deal by which Giant would make a proposed transfer of certain real property to Conglomerate Corporation. The property in question is unusual because it contains an underground particle collider used for scientific research, but also valuable farmland on the surface, as well as some valuable mineral rights in another part of the parcel. These factors make the property value difficult to assess by reference to the general real-estate market, which means it is difficult for anyone to determine the fairness of the transfer price in the proposed deal.
Would it be proper for Attorney Stevenson to facilitate this property transfer at the behest of the president of Conglomerate, if Attorney Stevenson would be representing Giant as the client in this specific matter?
a) Yes, because Conglomerate Corporation owns more than half of Giant Company, so the two corporate entities are one client for purposes of the rules regarding conflicts of interest.
b) Yes, because the virtual impossibility of obtaining an appraisal of the fair market value of the property means that the lawyer does not have actual knowledge that the deal is unfair to either party.
c) No, because the attorney would be unable to inform either client fully about whether the proposed transfer price would be in their best interest.
d) No, not unless the attorney first obtains effective informed consent of the management of Giant Company, as well as that of Conglomerate, because the ownership of Conglomerate and Giant is not identical, and their interests materially differ in the proposed transaction.
An attorney represents a client who went through a divorce several years ago in another state, and the divorce resulted in a court order for child support and spousal maintenance. The client then moved to the attorney’s state, started a new career in politics, and formed new relationships. She has kept her previous marriage a divorce a secret, except from her closest friend and her attorney, because she is afraid it will affect her new career and public image. Recently, she hired her attorney to handle various legal matters for her, which included issuing a press release about her withdrawal from a political campaign. When news media outlets posted online about the client’s withdrawal from the race, the attorney responded to some of the comments that readers posted, to clear up some misunderstandings. In one of the attorney’s responses, he mentioned the client’s previous marriage and divorce.
Did the attorney violate the duty of confidentiality?
a) It depends on whether there was a sealed record in the client’s divorce case.
b) No, because the divorce and court order regarding child support are a matter of public record.
c) No, because the client authorized the attorney to issue the press release, which impliedly authorized the disclosure of other helpful information.
d) Yes, because even disclosures of information contained in the public record must have client authorization.
A client kept in his files an old memorandum that the client had prepared for his attorney during an earlier representation by the attorney. After some time, the client takes the memorandum to another lawyer, in confidence, to obtain legal services on a different matter. The memorandum qualified as a privileged communication in the earlier matter.
While in the hands of the new lawyer, does the memorandum remain under the protection of privilege?
a) Yes, privilege still applies to the document due to its originally privileged nature.
b) Yes, because once privilege attaches to a document, it remains privileged permanently.
c) No, the client waived privilege by showing it to another lawyer.
d) No, the privilege for the communication with the first attorney ended when the client switched to another lawyer.
Mr. Burns, the chief executive officer of Conglomerate Corporation, now faces criminal charges of discussing prices with the president of a competing firm. If found guilty, both Mr. Burns and Conglomerate Corporation will be subject to civil and criminal penalties under state and federal antitrust laws. An attorney has been representing Conglomerate Corporation. She has conducted a thorough investigation of the matter, and she has personally concluded that such pricing discussions did in fact occur. Both Mr. Burns and Conglomerate Corporation have stopped their denials, and they now concede that the pricing discussions took place. One of Mr. Burns’ defenses will be that the former general counsel of Conglomerate Corporation had advised Mr. Burns that a discussion of general pricing practices with a competitor would not be illegal. In contrast, Conglomerate Corporation denies that this was the legal advice given, and instead asserts that Mr. Burns acted without authority.
Given these facts, would it be proper for the attorney to proceed with the dual representation, if both Mr. Burns and a separate corporate officer at Conglomerate provide written consent to any potential conflict of interest between them?
a) Yes, because their legal and factual assertions appear identical in this case, so the risk of contradiction or adverse positions in the litigation is de minimis.
b) Yes, although the likelihood of conflicting positions in such matters as plea bargaining requires the attorney to obtain the informed consent of both clients before proceeding with the representation, dual representation is permissible if each party consents.
c) No, because it will always be in the best interest of a corporation to blame the individual who acted in the situation, to avoid liability under a theory of respondeat superior.
d) No, the conflicting positions between Conglomerate and Mr. Burns are so great that the same lawyer cannot provide adequate legal representation to both, so consent to the conflict is ineffective.
An attorney is representing a corporate client on a variety of litigation matters. The attorney receives a subpoena (compulsory process) for information and a document relating to one of her corporate clients. The attorney promptly produces the information and document required by the subpoena, and then informs the client. Could the attorney be subject to discipline for this action?
a) Yes, because she did not consult first with the client before making the disclosure.
b) Yes, because it was incompetent for her to believe that a subpoena could have legal force binding a corporate entity, as opposed to individuals.
c) No, because the client is a corporation, not an individual.
d) No, because she was acting under a subpoena.
The corporate officers of a large hospital were trying to decide whether to provide free HBO and Showtime (and other subscription cable channels) to all the televisions in the patient rooms. Corporate counsel participated in these meetings due to his familiarity with the pricing of these channels and what other hospitals in the area were doing in this regard. Later, the hospital finds itself in contract litigation with its cable provider, and the opposing party requests disclosure of the comments and discussion in this meeting. The hospital’s corporate counsel objects that this meeting was privileged communication because of the participation of the attorney in the meeting.
Is he correct?
a) Yes, if the meeting was confidential and the hospital has not waived privilege in the meantime.
b) Yes, because the participation of corporate counsel in a management meeting ensures that the discussions are privileged.
c) No, because the cable company owns the privilege in this case.
d) No, because the attorney was participating as a business advisor in this meeting, not providing legal services.
Three individuals hire an attorney to represent them as co-defendants in a tort action. At the outset, the attorney tells them that there could be a potential conflict of interest if he represents all three of them, and that they will need to sign informed consent forms, which they do. The three individuals have common goals and interests in the litigation, so they do not hesitate to sign the forms or inquire further about the implications of the potential conflicts. No further discussion occurs about the issue, and Attorney proceeds with the representation.
Could the attorney end up having a duty to withdraw from representation later in the litigation, if the clients gave written consent to the shared representation at the outset?
a) Yes, when undertaking representation of multiple clients in a single matter, the information must include the implications of the common representation, including potential effects on loyalty, confidentiality and the attorney-client privilege and the advantages and risks involved.
b) Yes, if the liability insurers for the three co-defendants disagree on the terms of settlement and were unincluded in the original written consent.
c) No, because the attorney dutifully obtained written consent from each client, as required by the Rules of Professional Conduct.
d) No, assuming no situations arise where the lawyer obtains confidential information from one client that he could use to harm the interests of another client, and none of the clients file a cross-claim against another co-defendant.
An attorney is a partner in a seven-lawyer firm. The client retained the attorney to handle his workers’ compensation matter. Yet the attorney did not discuss with the client that he would normally disclose to the other partners in the firm some of the details about his cases and clients. At the weekly meeting of the partners, as everyone discussed their pending cases, the attorney explained the client’s case and solicited input from the partners. One partner had an ingenious suggestion that would have been quite helpful to the client’s case. The attorney mentioned to the client in their next phone call that one of his partners had made a brilliant suggestion that could turn the case in the client’s favor. The client was upset that the attorney had discussed the case with anyone else.
Is the client correct that the attorney should not have discussed the case with the others at the firm?
a) Yes, because a lawyer has a duty to preserve the confidentiality of client information, even from other lawyers in his law firm, unless the client expressly authorizes disclosure.
b) Yes, because the disclosure automatically created potential conflicts of interest for the other lawyers in the firm who might represent clients with adverse interests to this client.
c) No, because lawyers in a firm may disclose to each other information relating to a client of the firm, unless the client has instructed that certain information be available only to specified lawyers.
d) No, because in this case the disclosure yielded a brilliant suggestion from another lawyer that was immensely helpful to the case, which offsets any potential injury to the client from the disclosure.
Which of the following is NOT one of the elements of the work product doctrine?
a) anticipation of litigation applies to almost any legal work performed for a client, because litigation could eventually arise over any contract, will, or property disposition
b) the materials normally must be documents or tangible things
c) the materials must be prepared in anticipation of litigation or for trial – that is, the party had reason to anticipate litigation and the primary motivating purpose behind the creation of the document was to aid in potential future litigation.
d) the materials must be prepared by or for a party's representative.
An experienced attorney handles claims against banks for many clients for issues regarding the failure of banks to investigate in a timely manner claims of fraud or unauthorized use of bankcards. Most of the attorney’s work consists of sending demand letters, and most cases never actually result in the filing of a suit. Bank, a small local bank, retains the attorney to handle a certain claim against a customer for non-payment of a loan. The attorney has not represented any clients against Bank. Even so, the attorney includes in his contract for services a clause in which Bank waives any conflicts that may arise in the future - conflicts that involve the attorney representing clients against Bank for issues regarding failure to investigate claims of fraud or unauthorized use of bankcards.
Is the attorney’s conduct proper?
a) Yes, attorneys may include waivers of future conflicts assuming clients are aware of the waiver.
b) Yes, attorneys can include waiver clauses for specific future conflicts in their contracts, if the clients are aware of the waiver, and if the contract delineates the types of future representations that may arise.
c) No, attorneys cannot ever include waivers of future conflicts in contracts.
d) No, attorneys cannot include waivers of future conflicts in contracts specifically for financial claims.
Client, a large auto dealer, retains an attorney to represent him in a bankruptcy case. This attorney’s firm represents a bank, through which the client has several large loans that covered loans for the dealership. The loans are all contained in the bankruptcy. The attorney is concerned about whether there is a conflict, so he contacts a lawyer friend of his. While explaining his dilemma, the attorney tells Friend the name of the dealer.
Is the attorney subject to discipline?
a) Yes, because the attorney disclosed more than what details were necessary to accomplish his purpose.
b) Yes, because attorneys shall not discuss client matters with other lawyers not also serving as counsel for their client.
c) No, because attorneys may discuss their cases with other lawyers to ensure they are following the rules of professional conduct.
d) No, because the restrictions regarding confidentiality only apply in criminal cases.
A defendant accused of bank robbery hired an attorney. The attorney interviewed a bank teller, who witnessed the robbery. The attorney memorialized the conversation in a written memorandum that qualified as work product. Later, during the trial, the same teller testified for the prosecution, and the attorney cross-examined the bank teller by quoting from the teller's prior statement, as memorialized in the memorandum. The bank teller then denied making the statements. In turn, the prosecutor demanded a copy of the document from which the attorney had read statements during the cross-examination, and the attorney objected that the document was attorney work product and therefore not subject to discovery.
Is the attorney correct?
a) Yes, if the attorney prepared the document in anticipation of litigation, the memorandum is work product and is not subject to discovery or compelled disclosure.
b) Yes, disclosure would violate the criminal defendant’s right to confront witnesses, guaranteed in the Confrontation Clause of the Sixth Amendment, and the right against self-incrimination, guaranteed in the Fifth Amendment.
c) No, when the attorney chose to ask the teller questions with direct reference to the memorandum, it waived work-product immunity for the portion of the memorandum discussing the teller's story, and any other parts of the document that are necessary to place all the testimony fairly into context.
d) No, the entire document merely summarizes the factual statements of an eyewitness, and it contains no attorney work product.