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

Hypo #1

Rule 1.7 – Conflict of Interest: Current 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 of interest exists if: (1) the representation of one client will be directly adverse to another client; or

Rule 1.7 – A concurrent conflict 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 #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 #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 #1 Question: Is there a conflict of interest for Atticus to represent the board concerning the superintendent's contract buyout?

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?

Things to consider Past relationship with the superintendent Superintendent's perception of lawyer/client relationship Does superintendent have his own lawyer already?

Resolution 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 #2

Rule 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 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 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 #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 #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 #2 Is there potential for “substantial injury” to the school district if this board member organized protest occurs? What must Atticus do?

Question 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 #3

Rule 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 1.13 (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 #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 #3 Can Atticus represent Ed Ministration in his divorce? What rule? Is there a conflict?

Answer 1.13 makes it clear Atticus Finch can represent Ed. There is no Rule 1.7 conflict There is no reason for Rule 1.7 consent

Rule 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 #4 Question: Is there a conflict with the Doing Better School District representation for Atticus to expand his personal representation of Ed to include his employment contract with the district?

Answer Yes, there is a conflict.

Additional Questions Hypo #4 Is this a conflict that is likely to be overcome by informed client consent? Why or why not? Is this a conflict that is likely to be overcome by informed client consent? Why or why not? What does Atticus say to Ed? What does Atticus say to Ed?

Hypo #5

Rule 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 #5 Question: Is there a problem under the Arkansas Rules of Professional Conduct for Marvin to represent school districts while sometimes representing school district employees against school districts?

Answer 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 #6

Rule 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 1.5 (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 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 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 #7

Rule 4.2 Communication with Person 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: knows –The lawyer has the consent of the other lawyer –Is authorized to do so by law

Rule 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 #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 #8

Rule 4.3 – Dealing with Unrepresented Person When 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 misunderstandingknowsreasonably should know

Rule 4.3 – Dealing with Unrepresented Person The 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 #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 #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 #8 Is Otistine asking for legal advice, or is she asking a procedural question about the hearing?

Rule 4.3 – Hypo #8 Question: What should Atticus say to the teacher?

Answer 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 #9

Rule 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 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 2 Question: Given that Mrs. Kay has a reputation of being very knowledgeable about real estate law, what should Ima do?

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

Questions?