1. BUILDING LAW FIRM CAPACITY TO SERVICE COMMERCIAL LAW TRANSACTIONS: WHAT LAW SCHOOL DID NOT TEACH YOU Presented by LEAD in co-sponsorship with ISLP and with the assistance of the Black Corporate and Commercial Attorneys Network (BCCAN)
Session: Ethical Issues a Business Lawyer May Confront
Presenters: Steven Spronz and Jackie Huntley
Johannesburg, October, 2014

2. What is Ethics?
Ethics is “finding the balance between the greater good and the interests of the self and others” – Professor Mollie Painter Morland (University of Pretoria, 2011).

3. Caring Why should I care about ethics, generally?
Why is caring about ethical issues important in representing business clients?

4. Why Act in an Ethical Manner?
Because it is the right thing to do.
Because the Law Society tells us to.
Because the courts require us to.
Because failure to do so has economic, social and political costs to one’s community/society/country.

5. Because it is the right thing to do
Self, community, or societally generated standard of proper behavior.
It may be viewed through the lens of a religion, a group or community code unrelated to religion, or an individual sense of what is appropriate behavior.

6. Sources of South African Attorney Ethics Rules
Rules of the Provincial Law Societies.
Attorneys Act 53 of 1979 (deals primarily with admission requirements and trust accounts).
Common law (court decisions).
Interpretations of ethical rules in treatises (Lewis).

7. Because the Law Society Tells Us To
“An attorney who has received a mandate by a client is under an absolute duty not to disclose any information of a confidential nature which has come to his/her knowledge by virtue of the mandate.”
“Where the interests of clients are in conflict the attorney can only act for the parties with conflicting interests at his peril, and the onus of showing that the conflicting interests did not prevent him from doing his/her duty to both clients rests firmly on the attorney.” – From the Attorney Rules of the Northern Provinces Law Society.

8. Because Common Law Punishes Attorneys Who Act in an Unethical Manner
An attorney who does not take the trouble of familiarizing himself with the [Attorneys] Act and the Rules [of the various law societies] and who, as a result, lands on the wrong track, cannot expect much sympathy on punishment” Die Prokeurersorde van the Omje Vrystaat v. Schoeman, 1977 (4) SA 598 (O).

9. Because Failing to Act In An Ethical Manner Corrupts
Corrupts the individual.
Corrupts the profession.
Corrupts society.

10. Corruption Hampers Both Economic Activity and Social Advancement
“Imagine a project which is supposed to benefit 10,000 people but only benefits two or three politicians… I cannot relax when corrpution is retarding development in my own province. Enough is enough.” – Kudakwashe Bhasikiti, Zimbabwe’s Minister of State for Provincial Affairs; September 25, 2013 (reported in The Zimbabwean).

11. What Are Some of the Ethical Issues in Representing a Business?

12. Who Is Your Client? Is your client ‘the business?’
Is your client the owner of the business?
Is your client the officers of the corporation, perhaps the officer to whom you report?
Is your client the board of directors?

13. Answer to the Question: Who Is Your Client?
Answer is…….
It depends who hires you, who engages your services?

14. Who Is Your Client?
One of the first questions you should ask when you are asked to represent a business is “Who is involved in this business? This is an open ended questioned designed to elicit information about ownership and management.

15. Conflicts of Interest Duty of loyalty.
Whose interests, whose cause, must you advocate?
Duty to maintain confidentiality of information disclosed to the attorney.
Can the attorney disclose to one person involved in the business, confidential information disclosed by another person involved in the business?

16. Example
The attorney is retained by “Bobby Coolwheels” a venture of two individuals. One individual discloses to the attorney that the venture has engaged in unlawful behavior but he does not want attorney to report this to the other venturer.

17. Example
An employee of the Bobby Coolwheels business reports to you that one of the owners of the business has purposely, and with the aid of the reporting employee, filed a tax return which materially underreported the earnings of the business for tax purposes in order to reduce the business’ tax liability. The employee feels badly but does not want you tell anyone because he is afraid his boss – the perpetrator of the fraud – will fire him for tattling.

18. How Can the Attorney, Reduce or Avoid Many Conflicts of Interest in Representing A Business?
Talk to your client about potential conflicts of interest before they become actual conflicts of interest.
Talk to employees about it in advance of receiving any information when the employee comes to you and says that he has something confidential to talk with you about.

19. Talking to Your Client
When does the conversation with the client begin?
Before you are engaged as the attorney.
And when is that?

20. Shh! Don’t Tell Anyone… But you have heard it here before
When you are preparing and negotiating the Engagement (Mandate) Letter

21. Contact Information.
Steven C. Spronz
Murchison & Cumming
801 S. Grand Avenue
Los Angeles, California 90017
Tel:
Fax: