Conflict of Interest - Examples Overreaching or Fraud Example: Making a profit at expense of client Witness Example: Representing a client when you may be a witness Financial interest in the case Example: Being financially involved in the litigation of the client Gifts Example: Accepting more than nominal value Intimate Relationship Dating current and probably former client

Conflict of Interest - Examples Representing seller and purchaser Representing insured and insurer Representing husband and wife Representing debtor and creditor Joint representation of criminal defendants (in most cases)

Conflict of Interest Remember: Ethical wall and waiver A lawyer who has formerly represented a client in a matter shall not thereafter: represent another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client unless the former client consents after consultation . . .

Unit 6 Review: Advertising It wasn’t until the landmark Supreme Court case of Bates v. State Bar of Arizona, 433 U.S. 350 (1977), that lawyer advertising was declared to be protected commercial speech under the First Amendment. In the years since the Bates v. State Bar of Arizona case was decided, there has been a significant increase in lawyer advertising. Each state has its own ethical rules regulating attorney advertising and the solicitation of prospective clients.

What can a lawyer advertise? Name Address Phone Number Areas of Practice Contingency fee basis (some states you can state “no fee unless you win,” but you must disclose if there are expenses)

What can a lawyer not advertise? Some states: Examples that create unjust expectations Prior “win” record Amounts of previous damage awards Subjective claims as to the quality of the lawyer’s services or credentials “expert,” “highly qualified, “experienced” Testimonials by current clients or paid endorsements Nicknames, mottos, trade names that suggest an ability to obtain results Fictionalized portrayals of clients, judges, or lawyers

Solicitation Solicitation is in person, by telephone, or by written Almost all forms of solicitation are not permitted Solicitation is in person, by telephone, or by written communication that is directed to a specific individual Ambulance chasing Offering your unsolicited legal services Advertising, on the other hand, is directed to the public at large Direct Mail is somewhere in between Solicitation and Advertising and is allowable in some states, while in others it is prohibited

Unit 7 Review: Fees & Trust Accounts Fair Fees and Client Trust Accounts One of the most common ethical violations in the legal profession: mishandling of clients' money. Paralegals play a large role in financial matters, from billing clients to maintaining client trust funds. It is therefore essential for students who plan to be legal assistants to have a complete understanding of attorney fees, ethical billing practices, and the duties required in handling client funds.

Fee Agreement Fee Agreements should include: 1. identify the client(s); 2. identify the lawyer primarily responsible for handling the file; 3. describe the nature and the scope of the representation; 4. set out the objectives of the representation; 5. tell the client what you expect from the client, such as timely responses to your requests and absolute truthfulness; 6. set out the basis for calculating the fee; 7. make clear the responsibility for paying costs and give some examples of standard costs; 8. describe the method, manner, and frequency of billing, including how any retainer money held in trust will be used; 9. make a disclaimer about results; 10. set forth the process for dealing with unpaid bills (are you going to arbitrate disputes?); 11. Tell the client what happens if the firm needs to terminate the representation; 12. make a disclosure about professional liability insurance; and 13. make a clear statement about what will happen to the files at the conclusion of the case (remember, you don’t want to store those files!) and if the representation is terminated.

Fee Agreements - Types Fee agreements are normally negotiable Types of fee agreements Contingency Fees Mostly for personal injury cases Attorney’s fee is a portion of settlement/award Fee structure needs to be fully explained to client in advance Cannot be “objectively unfair;” court will review: the sophistication of the client how well the contract was explained, and how acceptable the fee agreement would seem to the average person. Provide a full accounting at conclusion of case Watch for overreaching!

Fee Agreements - Types Hourly Billing Each client is assigned an hourly billing rate Normally lawyers, law clerks, and paralegals have different billable rates Should keep billing records contemporaneously Normally bill in 30-day increments For example: Daily Time Sheet Date: 4-4-10 Employee: Dan Molnar 30 minutes for S. Smith – Discussed DWI case 120 minutes for K. Davis – Researched client’s employment record

Fee Agreements - Types Value Billing – Charging a flat rate for certain tasks $200 for drafting a complaint $400 for a court appearance Bonus Billing – Reduced hourly rate and a bonus for good results Fixed Fee Billing – One flat rate for representation no matter how long matter takes For example, bankruptcy or divorce Blended Rate Billing – Flat rate for all billable employees

Retainers Retainers are fees that are paid in advance Types of retainers “Classic” Retainer – A fee paid to “reserve” the services of an attorney. Sometimes called a nonrefundable retainer. Advance Payment Retainer – Is a present payment for a future service and is considered earned upon receipt Security Retainer – Is to secure payment for future services; remains property of client until applied to charges for services and any unused amounts are refunded to client.

Client Trust Accounts All client monies need to be held in a separate bank account called a client trust account Settlement proceeds or damage payments or advances Must be interest-bearing In many states interest does not go to clients but to the State Bar to fund free legal services Attorneys should have separate operating account from which payroll, expenses, etc. are paid Never commingle funds! When in doubt, as your State Bar!

What are defenses to negligence? “Typical” torts defenses Comparative Fault Contributory Negligence Assumption of Risk Acting in Good Faith When a legal professional acts in good faith with an honest belief that his or her acts and advice are in the client’s best interest and they are based on accurate information and adequate research, the legal professional will not be liable for mere errors in judgment.

Wrap-up Questions? Comments? Good luck on your final exam!