Professional Responsibility

Professional Responsibility

Professor Redlich

Fall 1995

General considerations

Where you have a permissive ability to take action, failure to take the action might subject the lawyer to liability

Always advise client of the limits of legal assistence (Rule 1.2(e))

Sources of authority

The first rule of ethics is competence

Rule 1.1

DR 6-101(A) to (C)

Choosing and losing clients

General notes

Ask the client the objective of the representation?

Harrassment or publicity; or

Pursuance of a legal position

Does the client understand counsel's role (Rule 1.2(e))?

Lawyers have a right to be happy with whom they represent

Decision to represent

Rule 1.2(b) -> client representation  client endorsement

EC 2-27

Decision to withdraw

Rule 1.16

DR 2-109 and 2-110

Code does not allow for withdrawal based on repugnancy of client or objective (compare Rule 1.6(b)(3))

Appointment by tribunal (Rule 6.2)

Confidencies generally

Justification for protecting confidences

Encourages candor between cleint and legal advisor

Creates more lawful society (will seek prospective advice)

["Secrets"] -> eables lawyer to gather info relating to representation

Attorney client privilege (can't be judicially compelled)

Wigmore (81)

ALI '118 (682)

Work product -> ALI '136

Ethical protections generally:

Rule 6.1

DR 4-101

Crime exception -> lawyer may reveal information relating to:

DR 4-101(C) -> any future planned crime

Rule 1.6(b)(1) -> only future crimes likely to result to substantial bodily harm or imminent death

General rules against client frauds on others

DR 7-102(B)

Rule 4.1

Rules don't require disclosure of client confidences in these situations because rules are only drafted to prevent lawyers from furthering harm, not to prevent others from doing so

Noisy withdrawal -> used where attorney's work product is used to assist client fraud (so think "transactional" context)

Rule structure

Rule 1.2(d) -> no assisting client to commit fraud

Rule 1.16(a)(1) -> withdrawal is required where continued representation would violate rules or law

Rule 1.6 cmt. 14 & 15 -> lawyer may announce fact of withdrawal and may disavow prior work product

Criticisms:

Gives comments the weight of rules

If lawyer is compelled to withdrawal, why shouldn't a noisy withdrawal be required as well

Is it proper to define "assistence" as continued availability of prior work product

Remedying a fraud on a tribunal

Why do the Rules require disclosure of confidences for frauds on tribunals but not for frauds on third parties?

Integrity of the legal system; lawyers as officers of the court

Inability of the lawyer to withdraw from representation at that time

What do you do if the client want to testify falsely?

Rule 1.2(e) -> tell client limits of legal assistence

Tell client you're required to tell court of perjury if client commits it

After you do this, you can call client on to the stand without violating 3.3(a)(4); you don't know client will perjure himself

You can call client and just ask him questions you think will be truthful

If you don't call client, you risk ineffective assistence of counsel

Nix v. Whiteside:

6th Amendment assistence of counsel and right to testify in own defense does not include false testimony or assistence in promulgating it

But code pulls you in two directions at once: (DR 7-102)

It bars you from revealing confidences even in the face of perjury.

But it bars you from using perjured testimony

To satisfy rules, client can tell his story in a narrative form, without assistence from attorney, and without attorney using client testimony in closing argument

Rule 3.3 applies to statements in the discovery process (Op. 93-376)

Use of inadvertently disclosed confidences

ABA Op. 92-368 -> inadvertent disclosure (fax to wrong place)

ABA Op. 94-382 -> unsolicited receipt of privileged material (anonymous tip)

What do you do?

Look at materials only in order to determine how to procede (is the info ethically protected?)

Notify adverse party or lawyer that you have the document, and follow their instructions

Where there's a dispute (i.e., should have been part of discovery), go to court

If you have to give the info. back

You can't use the info and the fruits you get from the info. (stuff you wouldn't have gotten but for the info)

You may be disqualified because of your knowledge

Law firm practice -- Rules 5.1 - 5.3

Representation of the corporate client (code is useless): Rule 1.13

Legal violations by a corporate client

First thing you should do is advise client to stop violation

If lawyer's services are being used to further crime: (cmt. 6)

Rule 1.2(d) applies -> disclosure of risks

Rule 1.16(a) applies -> withdrawal may be mandatory

Depending on how serious the violation is, counsel may have a duty to bring violation to a higher authority's attention (cmt. 4 at 142)

Lawyer cannot disclose violation to shareholders

Cmt. 3 -> Rule 1.6 still applies

Contra DR 4-101(C) -> intent to commit any crime can be disclosed

If you withdraw, you'll want to disclose the matter to the board to limit your liability

If you take it to the board and the board does nothing, you'll want to resign

If you're personally accused of legal violation, you can disclose under Rule 1.6(b)(2)

If crime is in the past, Rule 1.13 doesn't apply, but Rule 1.1 may establish a permissive ability to disclose employee's prior criminal conduct to the board

Conflicts between corporation and constituents

If you represent only the corp., you should make this clear to constituents you talk to (Rule 1.13(d) and 1.2(e))

You can represent the corp. and its constitutents at the same time, however Rule 1.7 applies to any conflicts (Rule 1.13(e)).

General rule for suits against the corporation:

Where the corporation takes a passive role, corp lawyer may represent both corp and directors and officers

Where the corporation takes an active role (shareholder derivitive suit), lawyer may not be able to also represent directors and officers

Garner -> atty can assert corp.'s atty-client privilege against SH suit subject to right of SHs to show cause why privilege should not be invoked in a particular instance

Corporate client privileges and confidences

Attorney client privilege (matter that can't be subpoenaed)

Upjohn -> adopts subject matter test for federal law

Did communication concern matters within scope of employees' corporate duties; and

Was purpose of the communication to enable the corporation to obtain legal advice

Some states use control group test -> only covers conversations with persons having managerial control over the co.

Some states use a hybrid of the two

Work product privilege

Generally ALI '136 (688)

Opinion work product generally carries an absolute immunity, so tactically, intersperse corporate interviews with litigation strategy

Ethically protected confidences

Rule 1.6 protects any communication by constituent of a corp. in their organizational capacity to atty (Rule 1.13 cmt. 3)

So interviews by atty with corp. employees investigating legal violation are ethically protected from disclosure outside the corporate family

Waiver:

All of these privleges can by waived at the option of the client

So if the corporation goes into bankruptcy, trustee can waive confidentiality

Contact between opposing counsel and represented clients

Generally, a lawyer cannot communicate about the subject of the representation with a represented client unless he secures the consent of counsel or is authorized by law to do so (Rule 4.2 and DR 7-104)

Rationale is to prevent lawyer from

Getting a damaging admission from the opposing client

Learning info protected by the attorney-client or work-product privilege

Casting doubt on strength of client's position or client's counsel

Thwarting protection normally afforded by presence of counsel

Corporate clients

Rule 4.2 cmt. 2 -> opposing counsel can't speak with:

Control group ("persons having a managerial responsibility")

Person whose acts may be imputed to the organization

Person whose statements may constitute an admission of the organization

ABA Op. 91-359 -> Rule 4.2 cmt. 2 does not apply to former employees notwithstanding that what they say may be imputed back to their former corporation ***

Niesig (construing DR 7-104) -> opposing counsel can't speak with:

Employees whose acts or ommissions in the matter under inquiry are binding on or imputed to the corporation

Employees implementing the advice of counsel

DOJ "Thornburgh memo"

Uses control group theory to determine who is represented by counsel

Says Rule 4.2 and DR 7-104 presents no bar to DOJ attorneys who want to speak with employees outside of control group

Claims its power is beased on federal preemption and "necessary and proper" clause

Limits of zeal (generally Rules 1.2(d) and 3.4, DR 7-109(C))

Payment of experts (Rule 3.4 cmt. 3)

Proper to pay for expert's services/expenses

Improper to pay an expert a contingency fee

Payment of witnesses

Proper to pay witness for expenses (but not pro rata payment of salary)***

Improper to pay witness a fee for testifying

Destruction of evidence

General rule is that you may not unlawfully obstruct (alter, destroy, conceal, etc.) another party's access to material having potential evidentiary value (Rule 3.4(a) and DR 7-109(A) are slightly different)

When is destruction unlawful?

When the material has been subpeonaed or is the subject of a discovery request

In most jurisdictions, when you have fruits or instrumentalities of a crime, you must turn them over to the government (remember this only refers to tangible materials, not info.)

In some jurisdictions, where the material has evidentiary value in a pending proceeding or one whose commencement can be foreseen (Rule 3.4(a) cmt. 2) [is the litigation imminent?]

Regardless of whether it's ethical to destroy the material, competent thing to do may be to retain the material or turn it over to opposition in a poorly drafted discovery request (Rule 1.1)

Cf. Rule 3.4(f) -> atty should not request person other client to refrain from voluntarily given information to another party

Catch-all "do good" provisions of the rules

Don't commit crimen falsi (Rule 8.2(b); DR 1-101(A)(3) & (A)(6))

Don't commit conduct prejudicial to the administration of justice (Rule 8.2(d); DR 1-101(A)(5))

Rules against harrassing advocacy

Against harrassment generally

Rule 4.4

DR 7-102(A)(1); DR 7-106(C)(2)

While atty must abide by client decisions (Rule 1.2(a)), atty can withdraw if request is repugnant (Rule 1.16(b)(3))

Using truthful facts to create false inferences

Rules and code only cover false statements of law or fact (Rule 3.3(a)(1) and DR 7-102(A)(5)) so arguing false inference is O.K.

It is permissible to cross examine and undermine the credibility of a truthful W. Why?

Beyond a lawyer's capacity to know what the truth is

Mitchell and Rifkind -> its all about the rules

Frankl -> rules distort truth, so change the rules

Lawyer has a duty to protect client and to put opposing party to their burden of proof

Metzger

Defense counsel hands fake handwriting evidence to prosecution expert witness for analysis

Even if you are pursuing the truth, you can't practice deception on a court

Prosecutors have a higher duty to the truth; prosecutor can't argue false inference even if supported by the record ***

Federal rules which limit the nature of the advesary system

Rule 11

Atty signing paper certifies to the best of his knowledge and with reasonable inquiry that paper is not being filed for improper purpose

So now, atty must perform reasonable investigation into what client says before filing a claim

Rule 26 -> mandated discovery for materially relevant documents

Administrative advocacy and Kaye-Scholer

Model rules and code don't address the problem of administrative advocacy

Agency can be an adversary, can set disclosure requirements, can be a tribunal, and can establish ethics rules all at the same time:

Traditional rules were not designed to cover this situation because they compartmentalize lawyers into different roles

Lawyers as client counselors (Article 1 & 2)

Lawyers and the tribunal (Article 3)

Lawyers dealings with others (Article 4)

Problems

Agency power is pervasive; it has the power to bankrupt the atty or the client

Agency sets level of disclosure, and atty has to decide what to disclose.

This may create agency rel. between atty and client

Atty assumes the obligation of the client to disclose

Incentive for agency is to go after atty

Client may be broke

Atty will quickly settle

Agency can use its powers to set ethics standards to compel additional disclosure not mandated by law

What should atty do in preparing a disclosure to agency?

ABA Op. 335

Atty should make ask client for info. on all relevant facts and receive answers

If answers are incomplete, suspect, etc., lawyer should make further inquiry

Extent of inquiry depends on factual circumstances (history of relationship, appearance of evasion, etc.)

But there's no duty to "audit" clients affairs, or to engage in investigation without "reasonable cause"

Rule 1.13(b) -> heightened scruitiny is only triggered by knowledge of suspicious activity

But under Rule 1.1, competent thing to do may be to do some investigation

If you don't investigate, you may be sued (failure to exercise discretion) and agency may be angry

In re Carter

SEC policy is that where atty has signficant responsibilites for SEC disclosures and becomes aware that client is failing to satisfy the disclosure required, continued participation constitutes "unethical conduct" unless atty takes prompt steps to end noncompliance

ABA opposed this rule, and claimed SEC lacked rulemaking authority (similar to Thornburg criticisms)

SEC has never enforced this rule

IRS '6653

Congress says you can't take certain tax shelter deductions without opinion letter saying its more likely than not that a deduction is valid.

There's no question that Congress has authority to do this

Kay-Scholer controversy -> office of thrift supervision (OTS) came up with various theories to make Kay-Scholer liable for Lincoln Savings deficient disclosure

Imposed an investigatory duty on Kay-Scholer

OTS claimed an interposition theory

KS demanded that all OTS requests go through KS

So KS assumed Lincoln's obligation to make disclosures

Since Lincoln had fiduciary duty to creditors and government insured creditors, KS as agent of Lincoln assumed this duty

So now, KS has an investigatory ("due diligence") duty; this goes beyond ABA Op. 335

KS claimed it was only litigation counsel, not regulatory counsel, and thus had no such duty