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Professional Responsibility
Wayne State University Law School
Henning, Peter J.

PROFESSIONAL RESPONSIBILITY
HENNING – WINTER 2013
 
 
THE ATTORNEY-CLIENT RELATIONSHIP
 
I. DUTY OF CONFIDENTIALTY & THE ATTORNEY-CLIENT PRIVILEGE
 
To Whom Do Lawyers Owe a Duty?
·         Have to represent your client’s interests, not your own – have to put the client’s interests first.
·         Judicial system (judges)
·         Regulatory agencies
·         The public
·         The truth (you)
 
Rule 1.6 Confidentiality of Information
·         Only profession with an absolute privilege – lasts forever
(a) “Confidence” = information protected by the client-lawyer privilege under applicable law, and “secret” = other information gained in the professional relationship; cannot be disclosed if (1) the client asks that it not be disclosed, (2) disclosure would be embarrassing to the client, or (3) disclosure would be detrimental to the client [assumption: disclosure would be detrimental].
(b) Except when permitted under paragraph (c), a lawyer shall not knowingly:
            (1) reveal a confidence or secret of a client;
            (2) use a confidence or secret of  client to the disadvantage of a client; or
(3) use a confidence or secret of a client for the advantage of the lawyer or of a third person, unless the client consents after full disclosure.
(c) A lawyer may reveal [discretionary]:
(3) confidences and secrets to the extent reasonably necessary to rectify the consequences of a client’s illegal or fraudulent act in the furtherance of which the lawyer’s services have been used;
(4) the intention of a client to commit a crime and the information necessary to prevent the crime;
o   Disclosure pursuant to Rule 1.6(c)(3)-(4) does NOT waive the privilege (if it applies to the communication) [Purcell v. District Attorney].
(5) confidences or secrets necessary to establish or collect a fee, or to defend the lawyer or the lawyer’s employees or associates against an accusation of wrongful conduct.
 
The Attorney-Client Privilege
·         A rule of EVIDENCE that prohibits a lawyer from being compelled by judicial process to disclose what a client said if:
o   (1) the information involves a confidential communication (e.g., no 3rd party present)
o   (2) with one’s attorney or agent of attorney
o   (3) for the purpose of seeking legal advice
·         The privilege does not protect the underlying facts, only the content of the communication with counsel.
 
Privileged Information & Secrets
·         Privileged information – for the purpose of legal advice/legal assistance
·         Secrets – broader, anything learned in the course of the relationship that the client wants to be confidential or is embarrassing.
 
Rationale for the Privilege
·         Enhances the free exchange of information between clients and lawyers by creating a relationship of trust will allow lawyers to counsel clients to act properly.
·         Dignity and autonomy – it is a SPECIAL relationship similar to the doctor-patient and priest-penitent relationships, so the law should respect it.
·         Constitutional Protection – in a criminal case
·         An economic monopoly to protect lawyers’ financial position (i.e. lawyers “sell” the privilege)
 
Perez v. Kirk & Carrigan
·         Facts: An attorney-client relationship exists between K&C and Perez – it’s a SJ motion, so they must take everything Perez alleges as true.
o   Rule 1.6 applies – confidences and secrets must remain confidential, unless there is a mandatory [Rule 1.6(b)] or permissive [Rule 1.6(c)] disclosure.
o   Damages are an issue for trial
o   K&C should’ve told Perez they were not his lawyers – should have put it in writing and told him that he had the right to remain silent (corporate Miranda).
 
Communication Not Privileged
·         Not talking about secrets, even if something isn’t privileged it can be a secret. Distinction: if it is not privileged, even though the lawyer can’t reveal on his or her own initiative, the lawyer could be compelled to disclose the information, for example by a court or subpoena.
·         Waiver – through voluntary revelation to any 3rd party, either at the time of the communication or in a subsequent disclosure [except pursuant to Rule 1.6(c)].
·         Client Identity & Free Information – not privileged because it does not involve a communication for legal advice.
·         Government Attorneys – no privilege for a government attorney providing legal advice to a government employee (ex: Bill Clinton).
·         Crime-Fraud Exception
o   A judicial finding that the client used the lawyer’s services to engage in criminal or fraudulent conduct, so the communication is NOT protected by the privilege and lawyer may be compelled to disclose. (Privilege is “vitiated.”)
o   Need not prove the crime, only that it reasonably appears the communication was for the purpose of engaging in a crime or fraud [Rule 1.2(c)]. The court may consider the statement in determining whether the communication was for committing a crime or fraud. [U.S. v. Zolin].
o   The communication remains confidential under Rule 1.6, but it may be discovered by the government or an opposing party.
 
 Corporate Privilege (Upjohn)
·         Covers factual investigations by attorneys representing the entity who are gathering information to prepare legal advice for the entity. (Includes communications between agents of the organization and counsel).
·         The entity controls the privilege (i.e. waiver) and not the individual employees, unless the attorney also represents the employee personally.
o   Perez – even if Perez wasn’t a client, his statement was still privileged under Rule 1.6, BUT the disclosure was permissible b/c Coca-Cola held the privilege and chose to waive the privilege.
·         If the attorney represents the entity and the individual, then there may be a conflict of interest.
 
Analysis of Rule 1.6 Issues
·         Who is the client?
·         Who communicated, and who solicited the communication?
·         What was the purpose of the communication?
·         If it is protected by Rule 1.6, is there an exception that permits disclosure?
·         What constitutes a “crime or fraud” that permits disclosure?
·         Should disclosure be mandatory?
 
II. LAWYER-CLIENT AUTHORITY/RELATIONSHIP
 
Lawyers, Clients & 3rd Parties
·         Principal-Agent Relationship – the lawyer is the agent and the client is the principal (directs the lawyer).
o   Lawyer owes the client a fiduciary duty – highest obligation that the law imposes, the lawyer must put the client’s interests first.
o   Remedy for breach – tort claim (or k claim) – emotional damages
o   The agency in relation to 3rd parties – you’re the agent to the principal, you’re carrying the principal’s interests when you deal with 3rd parties (opponent or non-client).
§  The client’s interests are first – the lawyer as a fiduciary has to put the client’s interests first.
Rule 1.1 Competence
A lawyer shall provide competent representation to a client. A lawyer shall not:
(a) handle a legal matter which the lawyer knows or should know that the lawyer is not competent to handle, without associating with a lawyer who is competent to handle it (can bring in co-counsel, but you have to share fees);
(b) handle a legal matter without preparation adequate in the circumstances;
(c) neglect a legal matter entrusted to the lawyer.
 
Rule 1.3 Diligence
A lawyer shall act with reasonable diligence and promptness in representing a client.
 
Rule 2.1 Lawyer as Advisor
In representing a client, a lawyer shall exercise independent professional judgment and shall render candid advice. In rendering advice, a lawyer may refer not only to law but to other considerations such as moral, economic, social and political factors that may be relevant to the client’s situation.
·         You are allowed to say no to a client – one of the important things that you’re going to do. Can talk about anything, at least according to the Rules.
 
Is violation of the rules malpractice?
Rule 1.0(b)
Failure to comply with an obligation or prohibition imposed by a rule is a basis for invoking the disciplinary process. The rules do not, however, give rise to a cause of action for enforcement of a rule or for damages caused by failure to comply with an obligation or prohibition imposed by a rule. In a civil or criminal action, the admissibility of the Rules of Professional Conduct is governed by the Michigan Rules of Evidence and other provisions of law.
·         Can be disciplined for any violation – all the way up to disbarment BUT cannot have an order against you to comply with the RULES (or damages against you for not complying). Up to the court to use the Rules as evidence for a malpractice claim against the lawyer.
 
FRE 801(d)(2)(C) & (D) – Admission by party-opponent
[A statement is not hearsay if] – The statement is offered against an opposing party and (C) was made by a person whom the party authorized to make a statement on the subject; (D) was made by the party’s agent or employee on a matter within in the scope of that relationship and while it existed…
·         Scope of the relationship – actual authority and apparent authority, everything you said can bind the client, so therefore the client can be liable based on what you said.
 
The Effect of Lawyer Misconduct
·         Taylor v. Illinois – When you’re in trial the client must accept the consequences of the lawyer’s choices.
·         Baker Machinery & Fabrication v. Traditional Baking – The lawyer screwed up during the default judgment, but this was not excusable neglect – no extraordinary circumstances, so BMF is stuck with its lawyer’s choices.
 
Maples v. Thomas (2012)
·         Supreme Court – under agency principles, a client cannot be charged with the a

the fee is in excess of a reasonable fee.
·         Objective standard – a lawyer of ordinary prudence
 
Determining Reasonableness [Rule 1.5(a)] (1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
(3) the fee customarily charged in the locality for similar legal services;
·         Price fixing – don’t undercut your price because clients don’t usually shop based on fee price.
(4) the amount involved and the results obtained;
(5) the time limitations imposed by the client or by the circumstances;
(7) the experience, reputation, and ability of the lawyer or lawyers performing the services;
Is client wealth a factor in determining reasonableness?
 
Brobeck, Phleger v. Telex
What if your client is a jerk?
·         The Court said it was not an excessive fee – set up as a k case, as a k case you cannot win if the terms are unambiguous. The corporation got what it paid for.
 
Can you charge more if your client is a jerk, but not if the client is an unsophisticated jerk?
Can you change the fee after commencing representation? (See AGC of Maryland v. Hess)    
·         No but you can renegotiate your fee but be really careful, have a situation where the client is dependent on the lawyer – arm’s length bargaining.
 
In the Matter of Fordham
·         “It cannot be said that an inexperienced lawyer is entitled to charge three or four times as much as an experienced lawyer for the same service.”
·         “Clark did not appear to have understood in any real sense the implications of choosing Fordham.”
·         No “safe harbor”/objective standard
 
Rule 1.16(a) Mandatory Withdrawal
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
Comment – a client has a right to discharge a lawyer at any time, with or without cause, subject to liability for payment for the lawyer’s services
 
Organization as Client (Rule 1.13)
(a) A lawyer employed or retained to represent an organization represents the organization as distinct from its directors, officers, employees, members, shareholders, or other constituents.
·         MI – the presumption is that you do not represent any of the individuals.
(e) A lawyer representing an organization may also represent any of its directors, officers, employees, members, shareholders, other constituents, subject to the provisions of Rule 1.7.
Why is there a special rule for corporations? Because they’re really complicated. The client is the organization (LLC, beneficial org, 501(c)(3), etc) as distinct from any individuals.
 
Rule 1.9 Conflict of Interest [Former Client] (a) 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 interest are materially adverse to the interests of the former client unless the former client consents after consultation.
·         Corporations change over time but they exist forever – where problems arise. Person includes corporations/business organizations.
 
Who controls the client? CFTC v. Weintraub – its current management controls the corporation. Whoever is in charge of it makes the decisions (i.e. whether to waive attorney-client privilege, attorney-client relationship).
 
Tekni-Plex: Who is the Client?
·         You can buy the attorney-client privilege, the new management controls the attorney-client relationship and the attorney-client privilege, at least for environmental matters. You have to go back to Rule 1.9(a)