Professional ResponsibilityLaw 115

Wed., Sept. 26

• Compulsory Limitations on Scope – counseling or assisting crime/fraud

• 1.2(d) • A lawyer shall not counsel a client to engage,

or assist a client, in conduct that the lawyer knows is criminal or fraudulent, but a lawyer may discuss the legal consequences of any proposed course of conduct with a client and may counsel or assist a client to make a good faith effort to determine the validity, scope, meaning or application of the law.

• Comment 10 to 1.2• A lawyer may not continue assisting a client in

conduct that the lawyer originally supposed was legally proper but then discovers is criminal or fraudulent. The lawyer must, therefore, withdraw from the representation of the client in the matter. See Rule 1.16(a). In some cases, withdrawal alone might be insufficient. It may be necessary for the lawyer to give notice of the fact of withdrawal and to disaffirm any opinion, document, affirmation or the like. See Rule 4.1.

• R. 4.1In the course of representing a client a lawyer

shall not knowingly:(a) make a false statement of material fact or

law to a third person; or(b) fail to disclose a material fact to a third

person when disclosure is necessary to avoid assisting a criminal or fraudulent act by a client, unless disclosure is prohibited by Rule 1.6.

• Permissive rejection of prospective clients

• TERMINATING REPRESENTATION

1.16(a) Except as stated in paragraph (c), a lawyer shall not represent a client or, where representation has commenced, shall withdraw from the representation of a client if:…(3) the lawyer is discharged.

1.16(a) Except as stated in paragraph (c), a lawyer

shall not represent a client or, where representation has commenced, shall withdraw from the representation of a client if:

(1) the representation will result in violation of the rules of professional conduct or other law;

(2) the lawyer's physical or mental condition materially impairs the lawyer's ability to represent the client; or

(3) the lawyer is discharged.

Permissive withdrawal

1.16(b) Except as stated in paragraph (c), a lawyer may withdraw from representing a client if:

(1) withdrawal can be accomplished without material adverse effect on the interests of the client;

• (2) the client persists in a course of action involving the lawyer's services that the lawyer reasonably believes is criminal or fraudulent;

• 1.16(b)(3) the client has used the lawyer's services to perpetrate a crime or fraud;

• (4) the client insists upon taking action that the lawyer considers repugnant or with which the lawyer has a fundamental disagreement;

• (5) the client fails substantially to fulfill an obligation to the lawyer regarding the lawyer's services and has been given reasonable warning that the lawyer will withdraw unless the obligation is fulfilled;

• (6) the representation will result in an unreasonable financial burden on the lawyer or has been rendered unreasonably difficult by the client; or

• (7) other good cause for withdrawal exists.

• 1.16(d) Upon termination of representation, a lawyer

shall take steps to the extent reasonably practicable to protect a client's interests, such as giving reasonable notice to the client, allowing time for employment of other counsel, surrendering papers and property to which the client is entitled and refunding any advance payment of fee or expense that has not been earned or incurred. The lawyer may retain papers relating to the client to the extent permitted by other law.

• Problem of organizational clients

• Rule 1.13 Organization As Client(a) A lawyer employed or retained by an

organization represents the organization acting through its duly authorized constituents.

• 1.13(f) In dealing with an organization's directors, officers, employees, members, shareholders or other constituents, a lawyer shall explain the identity of the client when the lawyer knows or reasonably should know that the organization's interests are adverse to those of the constituents with whom the lawyer is dealing.

• 1.13(b) If a lawyer for an organization knows that an officer, employee or other person associated with the organization is engaged in action, intends to act or refuses to act in a matter related to the representation that is a violation of a legal obligation to the organization, or a violation of law that reasonably might be imputed to the organization, and that is likely to result in substantial injury to the organization, then the lawyer shall proceed as is reasonably necessary in the best interest of the organization.

• Unless the lawyer reasonably believes that it is not necessary in the best interest of the organization to do so, 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.

You are counsel for a small corporation with three shareholders. Two of the shareholders, who are also officers, ask you to draw up a contract between the corporation and what you discover are entities owned by the officers. This is illegal self-dealing, but neither crime nor fraud. May you draw up the contracts?

Illus. 2: Lawyer represents Client, a closely held corporation, and not any constituent of Client. Under law applicable to the corporation, a majority shareholder owes a fiduciary duty of fair dealing to a minority shareholder in a transaction caused by action of a board of directors whose members have been designated by the majority stockholder. The law provides that the duty is breached if the action detrimentally and substantially affects the value of the minority shareholder's stock. Majority Shareholder has asked the board of directors of Client, consisting of Majority Shareholder's designees, to adopt a plan for buying back stock of the majority's shareholders in Client. A minority shareholder has protested the plan as unfair to the minority shareholder. Lawyer may advise the board about the position taken by the minority shareholder, but is not obliged to advise against or otherwise seek to prevent action that is consistent with the board's duty to Client.

The same facts as in Illustration 2, except that Lawyer has reason to know that the plan violates applicable corporate law and will likely be successfully challenged by minority shareholders in a suit against Client and that Client will likely incur substantial expense as a result. Lawyer owes a duty to Client to take action to protect Client, such as by advising Client's board about the risks of adopting the plan.

• (e) A lawyer who reasonably believes that he or she has been discharged because of the lawyer's actions taken pursuant to paragraphs (b) or (c), or who withdraws under circumstances that require or permit the lawyer to take action under either of those paragraphs, shall proceed as the lawyer reasonably believes necessary to assure that the organization's highest authority is informed of the lawyer's discharge or withdrawal.

Sarbanes-Oxley

• DUTY OF CONFIDENTIALITY vs. ATTY CLIENT PRIVILEGE

–duty of confidentiality• applies everywhere• keeps lawyer from divulging a wide

range of information relating to representation• BUT must give it up if required by court

(in discovery)

–attorney client privilege• evidentiary privilege (reason to refuse to

divulge in discovery – including if asked by court)•much more limited• does not protect information

• Attorney-Client Privilege• communications are privileged• if made between privileged persons• in confidence– reasonable belief no one will learn of contents

except privileged person

• for the purpose of obtaining or providing legal assistance

Privileged persons

• client• prospective client• agents facilitating communication • agents facilitating lawyers representation

• A lawyer’s daughter, who was just involved in a hit and run accident, asks the lawyer whether she should go to the police. Is this communication privileged?

• A tax lawyer’s son gives her the information she needs to fill out his 1040EZ personal income tax form. Are these communications privileged?

• After few hours after murdering someone, a client goes to his lawyer and tells him about the murder, in order to allow the lawyer to undertake his defense if he is arrested. During the meeting, the client’s hands are shaking and have specks of blood on them. Are the facts that the client’s hands are shaking and have blood on them privileged?

• A defendant in a negligence case reveals to his lawyer that he was looking the other way when he hit the plaintiff. • May the client claim the privilege

when he is served with an interrogatory asking for the content of this conversation?

May the client claim the privilege if the interrogatory asks whether he was looking the other way during the accident?

Assume the client insists on testifying that he was not looking the other way during the accident

What must the lawyer do?

Client says to his lawyer that he though he was driving recklessly during the accident

After consultation the lawyer concludes that client is mistaken and that he was exercising due care

• A client visits a lawyer to discuss the incorporation of his business. Present at the meeting is one of the client’s employees, the client’s daughter (whom he is babysitting at the time), and the lawyer’s secretary. Are the communications privileged?

Fee Agreements, Client Identity

Client asks lawyer to pay back taxes to IRS for client anonymously

Can lawyer be required to testify about client’s identity?

Corporate Attorney-Client Privilege

Upjohn v. United States(U.S. 1981)

• Who are the constituents that count for the privilege

• Upjohn– Court of Appeals’s Theory• Control group

– Supreme Court’s Theory• All employees

“[The Court of Appeals’s] view, we think, overlooks the fact that the privilege exists to protect not only the giving of professional advice to those who can act on it but also the giving of information to the lawyer to enable him to give sound and informed advice.”

zone of silence?

One gas station is a sole proprietorship and the other is incorporated. An accident occurs in each of the gas stations that is observed only by an employee. Is the communication between the gas station's lawyer and the employee privileged when the gas station is a sole proprietorship? Is the communication privileged when the gas station is incorporated?

§ 73. The Privilege For An Organizational ClientWhen a client is a corporation, unincorporated association, partnership, trust, estate, sole proprietorship, or other for-profit or not-for-profit organization, the attorney-client privilege extends to a communication that:(1) otherwise qualifies as privileged under §§ 68-72;(2) is between an agent of the organization and a privileged person as defined in § 70;(3) concerns a legal matter of interest to the organization; and(4) is disclosed only to:(a) privileged persons as defined in § 70; and(b) other agents of the organization who reasonably need to know of the communication in order to act for the organization.

After receiving the questionnaires, Upjohn management emailed them to all Upjohn employees.

governmental attorney-client privilege

attorney-client privilege in the representation of law firms

problems of joint representation of a corporation and a constituent of

the corporation

Representing joint clients

• Restatement § 75. The Privilege Of Co–Clients• (1) If two or more persons are jointly represented by

the same lawyer in a matter, a communication of either co-client that otherwise qualifies as privileged … and relates to matters of common interest is privileged as against third persons, and any co-client may invoke the privilege, unless it has been waived by the client who made the communication.

• (2) Unless the co-clients have agreed otherwise, a communication described in Subsection (1) is not privileged as between the co-clients in a subsequent adverse proceeding between them.

§ 76. The Privilege In Common–Interest Arrangements(1) If two or more clients with a common interest in a litigated or nonlitigated matter are represented by separate lawyers and they agree to exchange information concerning the matter, a communication of any such client that otherwise qualifies as privileged under §§ 68-72 that relates to the matter is privileged as against third persons. Any such client may invoke the privilege, unless it has been waived by the client who made the communication.(2) Unless the clients have agreed otherwise, a communication described in Subsection (1) is not privileged as between clients described in Subsection (1) in a subsequent adverse proceeding between them.

In re Grand Jury Subpoena(1st Cir. 2001)

First, they must show they approached [counsel] for the purpose of seeking legal advice. Second, they must demonstrate that when they approached [counsel] they made it clear that they were seeking legal advice in their individual rather than in their representative capacities. Third, they must demonstrate that the [counsel] saw fit to communicate with them in their individual capacities, knowing that a possible conflict could arise. Fourth, they must prove that their conversations with [counsel] were confidential. And, fifth, they must show that the substance of their conversations with [counsel] did not concern matters within the company or the general affairs of the company.

work product privilege

R 26(b)(3)(A) Documents and Tangible Things. Ordinarily, a party may not discover documents and tangible things that are prepared in anticipation of litigation or for trial by or for another party or its representative (including the other party’s attorney, consultant, surety, indemnitor, insurer, or agent). But, subject to Rule 26(b)(4), those materials may be discovered if: (i) they are otherwise discoverable under Rule 26(b)(1); and (ii) the party shows that it has substantial need for the materials to prepare its case and cannot, without undue hardship, obtain their substantial equivalent by other means.

(B) Protection Against Disclosure. If the court orders discovery of those materials, it must protect against disclosure of the mental impressions, conclusions, opinions, or legal theories of a party’s attorney or other representative concerning the litigation.

• Intersection of privilege against self-incrimination and attorney-client privilege

Client says to lawyer “I did it”Lawyer is asked whether his client said he did itLawyer cannot assert client’s privilege against self-incrimination

- lawyer is not giving self-incriminating testimonyBUT lawyer can assert attorney-client privilege

problem of documentary evidence in the hands of a lawyer

• assume incriminating material is given to the lawyer– Will be protected under attorney-client privilege

to the extent that it would be protected under the privilege against self-incrimination in the hands of the client

– If not protected under attorney-client privilege in the hands of the client, then no attorney-client privilege by giving to lawyer

but when would documentary evidence be protected by the

privilege against self-incrimination in the hands of client?

Fisher v. United States(U.S. 1976)

• Criminal defendant can be compelled to turn over incriminatory evidence– Unless act of responding to request is itself

testamentary– “Turn over the weapon you used to kill X.”

required records exception

United States v. Hubbell(U.S. 2000)

• The government suspects that your client is a hitman. Your client draws up an outline of all his activities as a hitman the day that he realizes that he is under investigation by the police. He gives you the outline to you to help you represent him. The client also gives you checks from his clients as payment for hits.

• The government subpoenas you, asking for the outline and for “any other documents itemizing financial payments to your client for his services as a hitman.”

• May you refuse to turn over the outline and/or the checks?

• Can the government take away the outline or the checks if they are found in your office during a search pursuant to a valid warrant?