BarMax MPRE Study Guide

III. Conflicts of Interests & the Duty of Loyalty (12% to 18%) an attorney owes a duty of loyalty to her client, to exercise her time, professional judgment and efforts solely for the benefit of that client, without any interference from outside loyalties of interests. This duty requires a lawyer to work in the best interests of the client, and not for the lawyers personal interest or for the interest of any third party. A conflict may arise as between the lawyer and the client, as between the interests of current clients or current and prospective clients or current and former clients, and as between current clients and third parties. A. General Rules 1. Resolving Conflicts of Interests if there is significant risk that a conflict with the lawyer and the client, a past client, or any third party will materially limit the lawyers ability to effectively represent the client, the attorney may not represent the client UNLESS: ! Reasonably Believe No Adverse Affect the lawyer reasonably believes (i.e. reasonable attorney standard) that the lawyer will be able to provide competent and diligent representation to each affected client; Representation Not Prohibited by Law the representation is not prohibited by law;

AND ! Client Gives Informed Written Consent each affected client gives informed consent, confirmed in writing.

2. Continuing Duty the duty to disclose to a client a conflict of interest and to obtain that clients consent is a continuing duty, and the duty of loyalty requirements must be met each time a potential conflict comes into fruition, before the attorney should continue representation. 3. Consequences of Unresolved Conflicts of Interest if there is an unresolved conflict with the lawyer and the client, a past client, or any third party that materially limits the lawyers ability to effectively represent the client, she must not take the representation or withdraw from it. ! ! Prior to Acceptance of Representation = Refuse Representation of Client After Acceptance of Representation = Mandatory Withdrawal an attorney must withdraw from representation where the attorney becomes aware of actual conflicts of interest and the conflicts cannot be resolved.

4. Imputed Disqualification if one lawyer employed by a firm is unable to take on the representation because of a conflict of interest or confidentiality problem with a former client, the disqualification is imputed to the entire firm and no lawyer in the firm may take on the representation (i.e. none of them shall knowingly represent a client when any of them practicing alone would be prohibited from doing so). 5. Exceptions ! Personal Interest of Disqualified Lawyer no imputed disqualification if the prohibition is based on a personal interest of the disqualified lawyer and does not present a significant risk of materially limiting the representation of the client by the remaining lawyers in the firm. ! "!

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BarMax MPRE Study Guide

! Conflict Arises Out of Disqualified Lawyers Association with Prior Firm when the conflict arises because of a lawyers previous representation of a client at the lawyers previous firm or the lawyers prior firms previous representation of a client, the new law firm will not have the disqualified lawyers conflict imputed if: o Timely Screened & No Sharing in Fees the disqualified lawyer is timely screened from any participation in the matter and is apportioned no part of the fee from the matter. o Written Notice is Promptly Given to Any Affected Former Client written notice is promptly given to any affected former client to enable the former client to ascertain compliance with the provisions of this rule. Please note that this rule does not prohibit the disqualified lawyer from receiving a salary or partnership share that was established by prior independent agreement. AND o Certification of Compliance with Model Rules & Screening Procedures Provided to Former Client certifications of compliance with these rules and with the screening procedures are provided to the former client by the screened lawyer and by a partner of the firm, at reasonable intervals upon the former clients written request and upon termination of the screening procedures. Former Government Lawyer or Judge if a lawyer is employed by a firm and has confidential information regarding a government matter obtained through previous representation of the government, the firm may properly represent another client against the government if the following requirements are satisfied: o Ethical Wall the former government lawyer or judge is completely screened from handling any portion of the representation against the government; o No Sharing in Fees the former government lawyer or judge shares in NO PART of the fees produced from the representation of a client against the former government client; AND o Written Notice written notice is promptly given to the appropriate government agency to enable it to ascertain compliance with the provisions of this rule.

B. Multiple Clients & Joint Representation 1. Opposing Parties in Same Lawsuit/Transaction an attorney may never represent opposing parties in the same lawsuit or transaction. 2. Present Clients in Unrelated Lawsuits the duty of loyalty precludes an attorney from advocating against the client even in a matter entirely unrelated to the clients other lawsuit. 3. Resolving Conflicts of Interests Among Multiple Clients if an interest of another client materially limits or is adverse to loyal representation, there is a conflict of interest and the attorney may not represent either client unless the lawyer has a reasonable belief that there is no significant risk that a conflict of interest will materially limit the representation and each client gives informed consent. ! #!

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BarMax MPRE Study Guide

! Reasonably Believe No Adverse Affect the lawyer reasonably believes (i.e. reasonable attorney standard) that the lawyer will be able to provide competent and diligent representation to each affected client; Representation Not Prohibited by Law the representation is not prohibited by law; Representation Does Not Involve Assertion of a Claim By One Client Against Another Client Represented by the Client in Same Litigation 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;

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AND ! Client Gives Informed Written Consent each affected client gives informed consent, confirmed in writing.

4. Aggregate Settlements or Guilty Pleas a lawyer cannot accept an aggregate settlement of claims or guilty plea unless each client consents in writing after being informed of all the agreements. ! After Being Informed of All Other Agreements an attorney must disclose to each client the nature and extent of all claims or pleas involved and the participation of each person in the settlement.

AND ! Each Client Consents In Writing each client must consent in writing after consultation and disclosure.
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5. Neutral 3 Party if the lawyer reasonably believes she can represent the interest of each party effectively, the attorney discloses her role to both and the lawyer does not engage in representation of one of the parties, a lawyer may act as a neutral third party between parties. 6. Evaluation for Use by 3 Parties an attorney may provide an evaluation for people other than her client as long as it is consistent to the lawyers duties to the client. C. Attorney & Client these conflicts do not result in imputed disqualification unless the reason for disqualification also applies to other lawyers in the same firm. 1. Soliciting Gifts from the Client an attorney shall not solicit substantial gifts from a client or prepare an instrument (will, trust agreement or deed) that will give the lawyer (or person related to the lawyer) a substantial gift unless the lawyer and client are related. 2. No Financial Assistance a lawyer shall not give financial assistance to a client in connection with contemplated or pending litigation except litigation expenses when representing an indigent client (i.e. pro bono work) and the advance of litigation expenses in contingent fee cases. ! Exceptions o Litigation Expenses for Indigent Client AND ! 8!
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BarMax MPRE Study Guide

o Litigation Expenses in Contingent Fee Cases 3. Business Transactions with Clients business transactions between lawyers and clients are permissible if the following four requirements are met: ! Fair & Reasonable Terms terms of the transaction are fair and reasonable under the circumstances known to the lawyer at the time the interest was acquired; Fully Disclosed in Understandable Writing disclosed in writing in a manner the client can reasonably understand; Independent Legal Counsel client must be advised in writing to seek the opinion of another lawyer and given reasonable opportunity to do so;

AND ! Written Informed Consent the client consents in writing.

4. Publication or Media Rights a lawyer shall not acquire publication or media rights to a portrayal or account based in substantial part on information relating to the representation of the client prior to the end of the representation. 5. Acquiring Interest in the Litigation an attorney must not obtain a proprietary interest in the cause of action or the subject matter of the litigation in which the client is represented. ! Exceptions o Lien to Secure Fees or Expenses an attorney may acquire a lien granted by law to secure the payment of the lawyers fees or expenses. o Contract for Reasonable Contingency Fee an attorney may enter into a contract for a reasonable contingency fee in a civil case.

6. Attorney as Witness an attorney should not act as an advocate in a trial where the lawyer is likely to be called as a witness. ! Exceptions o Testimony Only Relates to Uncontested Matter an attorney may be a witness if the testimony relates to an uncontested matter or to one of mere formality that there is no reason to believe substantial evidence will be offered to counter. o Testimony Regarding Nature and Value of Legal Services Provided an attorney may be a witness if the testimony is to the nature and value of legal services rendered by the attorney in the case. OR o Disqualification Would Result in Substantial Hardship to the Client an attorney may be a witness if disqualification of the attorney would result in substantial hardship to the client.

7. Consensual Sexual Relationship with Client the ABA expressly forbid lawyers from engaging in consensual sex with their clients unless there was a preexisting consensual sexual relationship when the lawyer-client relationship began. ! Exception: Preexisting Sexual Relationship ! %!

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BarMax MPRE Study Guide

D. Former Client Conflicts 1. Opposing Former Client ! Substantially Related Matter an attorney may not be materially adverse to a former client if the current matter is substantially related to a former representation without informed written consent of the former client. Confidential Information an attorney may not oppose a former client if the attorney received confidential information in the prior representation that is relevant to and could be used in the present representation to the disadvantage of the former client unless the former client gives informed written consent or the confidential information has already been revealed or is generally known.

E. Third Party Compensation & Influence 1. Lawyer Representing an Entity or Other Organization an attorney owes the duty of loyalty to the entity or organization not the directors, officers or shareholders. ! Conflicts Between Entity & Its Constituents when dealing with the organizations directors, officers and employees, the attorney must reveal the identity of the client (i.e. the organization) if the attorney knows or should know that the organizations interests may conflict with the directors, officers or employees interests. Simultaneous Representation of Entity & Individuals a lawyer representing an organization may also represent any of its directors, officers, employees, members, shareholders or other constituents, if the attorney reasonably believes she can represent all parties effectively and there is consent by all parties. If the organization's consent to the dual representation is required, 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. Protecting Organizations Interest when a person associated with the organization advocates a course of action that the attorney reasonably believes could cause the organization substantial injury, the attorney must act as reasonably necessary to protect the interests of the organization. o Reconsideration of Matter an attorney may ask the person associated with the organization to reconsider the matter. o Reporting Up an attorney must refer the matter to a higher authority within the organization. o Reporting Out if the highest authority fails to take appropriate timely action, the attorney may report the information to appropriate persons outside of the organization.
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2. Attorneys Fee Paid by 3 Party an attorney may accept payment for her representation of rd the client from a 3 party if the following requirements are satisfied (e.g. corporate employees or parental payment for representation of child):

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BarMax MPRE Study Guide

! Informed Consent by Client informed consent but consent does not have to be in writing. No Inference with Attorneys Independent Professional Judgment or Representation !

AND ! Attorney-Client Confidentiality Uncompromised

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