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Questions and Answers
What is required for a lawyer to enter into a business transaction with a client?
Under Rule 1.8, what must a lawyer do if they are selling goods or services related to the practice of law to existing clients?
What is NOT covered under Rule 1.8 regarding business transactions between lawyers and clients?
When entering a business transaction with a client, what should a lawyer do regarding advising the client?
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In a business transaction with a client, when should the terms be disclosed to the client?
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What must be done to ensure compliance with Rule 1.8 in business transactions with clients?
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What is one requirement for a lawyer acquiring an ownership interest adverse to a client?
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Which type of fee arrangements between lawyers and clients are governed by Rule 1.5 instead of Rule 1.8?
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What action should be taken if a lawyer is engaging in selling goods or services related to their legal practice?
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Study Notes
Conflicts of Interest
- A lawyer's ability to represent multiple clients is determined by their ability to comply with duties to the former client and adequately represent the remaining clients.
- Loyalty to a current client prohibits representation directly adverse to that client without informed consent.
Directly Adverse Conflicts
- A directly adverse conflict arises when a lawyer is required to cross-examine a client who appears as a witness in a lawsuit involving another client.
- A lawyer may not act as an advocate in one matter against a person they represent in another matter, even if the matters are unrelated.
Conflicts of Interest (Non-Directly Adverse)
- A conflict of interest exists if there is a significant risk that a lawyer's ability to consider, recommend, or carry out an appropriate course of action for the client will be materially limited due to other responsibilities or interests.
Personal Interest Conflicts
- A lawyer's own interests should not have an adverse effect on representation of a client.
Representation of Clients with Materially Adverse Interests
- A lawyer subject to a conflict of interest cannot represent a client with interests materially adverse to those of a prospective client in the same or substantially related matter, if the lawyer received information from the prospective client that could be significantly harmful to that person.
- No lawyer in a firm with the disqualified lawyer can undertake or continue representation in such a matter, except as provided in paragraph (d).
Exceptions to Disqualification
- Representation is permissible if both the affected client and the prospective client have given informed consent, confirmed in writing.
- Representation is also permissible if the lawyer who received the information took reasonable measures to avoid exposure to more disqualifying information, and the disqualified lawyer is timely screened from participation and apportioned no part of the fee.
Model Rule 1.18: Duties to Prospective Clients
- A person becomes a prospective client by consulting with a lawyer about the possibility of forming a client-lawyer relationship with respect to a matter.
Model Rule 1.8: Business Transactions with Current Clients
- A lawyer shall not enter into a business transaction with a client or acquire an ownership interest adverse to a client unless the transaction is fair and reasonable, fully disclosed, and the client gives informed consent.
- The client must be advised in writing of the desirability of seeking independent legal counsel on the transaction.
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Description
Learn about conflicts of interest in legal representation, including the lawyer's duties to former and current clients, and when representing multiple clients. Understand how loyalty to a current client can impact representation of other clients.
