Professional Responsibility

I. Attorney Client Relationship

A. Formation & nature

1. formation of the ac relationship

a. what does it make? creates fiduciary relationship or

b. how to create:

i. expressly (by K, express consent; offer/promises/accepted)

ii. impliedly:

A) did the parties mutually manifest an intent to be bound in a representation relationship? elements

1. request for legal services

2. agreement by the lawyer to represent client

  • express
  • conduct (provides legals services)
  • failure to negate rzbl belief of representation (reliance)(duty to inform client of non-rep if there's a rzbl belief of representation)

B) if unsure, it's a fact Q for the jury (and they don't like attys) if you are atty then they can find breaches of duty

C) ex. Neighbor asks you at a block party some legal Q's (is Texas a community prop state? yes) then you start telling him about the laws expansively. No atty-client relationship b/c no request for representation

D) ex. Neighbor says he's selling his house and wants to sell it w/o a realtor to save money and asks you about forms needed to sell house. Later he sues you. Is there a request for legal services? Yes. Express ag to rep? No, but accepted by performing (by conduct).

E) ex. friend in wreck, calls you; your receptionist tells him to send you police report, ins, etc. You never do anything. Was a request, no conduct by performance; But was rzbl for dude to think you rep'd him

c. what is not required: written K (except req'd for contingency fee ag.)

d. Parker: if you're in a meeting w/ client that have potential consequences for someone who is w/ them, be v. clear you are not their atty

facts: lady went in to talk about her husband's problems and occassionally asked re effect on her ("why wasn't I sued along w/ my husband?") & that was enough to be a request for legal services

e. declining the a/c relationship: send a letter! so they don't have rzbl expectation you rep them

i. get proof of sending (send cert/rrr)

ii. tell them clearly you don't rep them

iii. tell them to see another atty b/c different lawyers see things differently (referral?? NO b/c negligent referral is a coa)

iv. tell them to act promptly b/c may be time barred (but don't put date in there or may mess it up)

v. tell them nicely so you don't burn bridges

f. Perez:

g. Duties to potential clients (ppl you refuse, but what they say in interim)

i. client is in your office telling you things but you don't want to work for them

  • ex. criminal case; driver says he hit someone in crosswalk, he was drinking, he fled the scene & he is wanted; you don't want to rep. him and you want to alert the police! Can you? NO even though there is no a/c relationship

ii. even if there is no a/c relationship b/c of prelim consultations

iii. rule an atty's responsibilities arise even during prelim consultations re atty's possible employment if discussion of client's legal problems ensues w/ an eye towards representation

iv. why? so clients can disclose info to potential atty's

v. conflict of interest:

ex. you rep. WalMart; potential client (victim) comes in and tells you he wants to sue WM b/c of slip and fall, etc.

1.you can't represent victim b/c of conflict

2.you can't tell WM about what victim told you (confidentiality)

3.can you represent WM in the action brought by that victim? eventually you can acquire so much confidential info. that you can't rep WM in that lawsuit (R109) (eventually the victim becomes a "client" per R1.09 & this is the same matter

soln: first ask who clients are & ease into more info.

h. court appointments creates a/c relationship (r6.01)

i. as officer of ct, we are req'd to provide the services

ii. can't turn down except for good cause (hard to get out of it)

1. would lead to violation of rules (say you are not competent)

2. result in unrzbl financial burden on atty or

3. so repugnant, likely to strain a/c relationship

i. R 1.12: organization is your client

a. your client is the entity (but officer might think you rep him, too)

e. but you must explain who you rep. to client if rzbly necessary

j. reminder: we need to know when the a/c relationship arises in any form becuase the relationship gives rise to fiduciary duties (competense, diligence, confidentiality, loyalty, to communicate)

2. responsibility & control of decision making (1.02, 1.03, 2.01)

a. 1.03: we have a duty to communicate: keep client rzbly informed & promptly reply to requests; give client enough info to make informed decisions

b. 1.02client controls

  • (a1) client has control over objectives of the representation (gets to decide if obj. of PI suit it to quick & rzbly settle, or go to trial or get as much money as possible, etc.)
  • (a2) client can decide if they want to settle or not
  • (a3) client can decide about plea bargains, jury trial, whether the client will testify

we control

  • means to reach the objectives of the client
  • being sucked into illegal schemes
  • getting guardians/representatives if client lacks legal competence

c. Quintero case: rule--> there is an obligation to consult re settlements (now DR 1.08f)

facts: P's hire atty1 to rep them; atty1 gives case to atty2 to take to trial (gets $78k verdict); atty1 later advises settlment to P's for less (doesn't know about verdict); verdict dismissed per settlement ag. (a K)

1.Quinteros set aside K as void for public policy

2.the policy is a violation of the disciplinary rules

3.DR requires consultation w/ client before settlement (here, no good consultation)

4.R1.08(f) must consult w/ all clients terms of settlements & effect of aggregate settlements on one individual; if you rep more than one client, you must get ea's infomred consent to settle any of their claims

d. budgeting

ex. client says only do half of the depos b/c I don't have enough money

e. alteration by contract: decision making repsonbility can be altered or spelled out by K

1. in engagement letter, can expressly discuss decision makng authority that is for the client and that that is for the lawyer

2. can also outline the scope of the engagement! (this is v. important - e.g. if later they want to add a stupid claim, your letter outlined you were only trying xx cause of action; or say you're not handling the appeal)

3. there are some limitations that atty's are not allowed to make:

i. hypo: you do divorce for W; later she's mad cause she could've gotten tort dmgs. for abuse (now res judicata); did we impliedly accept the entire case? (1) request for legal services (2) implied acceptance (provide services or don't say you're not representing when there is a rzbl expectation of representation). Here, the W had a rzbl expectation that we would take care of any coa's so we impliedly had to represent her on any coa's b/c we didn't expressly limit the scope of our representation. (993//760)

ii. we are allowed to limit the general objectives and methods of repreesntation (1.02b)

iii. but there are boundaries to limiting the scope of representation (cmt. 5): you cannot limit representation so much that you violate R. 1.01 or surrender the right to terminate lawyer's services or right to settle

3. termination of the ac relationship

a) client fires you:

1. a client always has the power & right to fire you, but it is still a breach of K (unless excused for some reason)

2. if you sue for failure to pay fee, you will always get counterclaim for malpractice & get formal grievance filed against you w/ state bar!

3. Mandel v. Thomas case: In Texas, when the client w/o good cause, discharges an attorney begore he has completed his work, the atty may recover on the K for the amt. of his compensation (less costs avoided by not doing the work).

b) mandatory withdrawl 1.15(a1-3) when you must w/draw

1.you would violate 3.08 (lawyer is a W)

2.lawyer's condition (mental/physical) materially impairs ability to represent

3.lawyer is discharged (w/ or w/o cause)

c) you must not w/draw voluntarily unless (b, voluntary):

  • anytime, as long as it won't adversely impact client (materially) or
  • exception - if you think your services are getting pulled into criminal or fraudulent uses, you can w/draw (even if adverse consequences to client)

d) 1.15(c) if a ct orders you to continue representation (e.g. motion to w/draw denied) you must continue even though you have good cause to w/draw (once you are counsel "of record" you have to get permission to w/draw)

e) 1.15(d) when you terminate representation, you must take steps to protect client's interests (to extent rzbly practicable); even if you've been unfairly discharged

f) how to voluntarily withdraw: send letter, rrr/cert, say why you can't represent them, mitigate potential consequences to your client (1.15d)

g) finished: send an "I am done" letter to let them know you are no longer handling things when the case is over/settled, etc. You have to take affirmative action to refute any rzbl belief the client may get as to what the scope of your representation is. You still owe duty of confidentiality and loyalty, but competency is over.

h) hypo you prepare bad will; beneficiaries can't sue you for boFD b/c they are not your client - no privity of K; civil coa? didn't listen

g) seller & buyer of land; seller's atty does lien check badly & says no liens; turns out there were liens; this is not PR duty breach, but it negligent misrep (McKamish); needs to be stmts of fact, not opinion

B. Payment for Services

1. Fee Agreements:

a. two types:

i. set by contract

A) hourly rate

B) flat/fixed fee

C) percentage fee (% of transaction)

D) contingent fee (% of recovery if any)

E) blended fee (mix of hourly rate and contingent %)

ii. set by statutory scheme (ex. dtpa or cprc & contracts)

A) usually "reasonably & necessary"

B) "rzbl" means...

b. setting fees by contract

i. communicate with the client

A) does not have to be in writing

B) unless for contingent fee K

C) what if you don't & can't recover on K? quantum meruit

D) explain what the fee is payment for

2. Excessive Fees

a. What fees may not be colltected? R 1.04

i. illegal: there are some statutes that say you can't charge these fees (veterans $10)

ii. unauthorized or (this is when you are not authorized to collect that type of fee); not illegal but b/c of public policy

A) improperly soliciting client's bsns, you can't collect a fee(7.03d)

B) you can't have contingency fee in criminal case (1.04e)

C) contingency fee in family law csse (1.04 cmt 9)

D) if you sell (crminal client's story) media/literary rights while you're still their lawyer, you can't collect your fee(1.08c)

E) if a 3P pays for your client & interferes w/ your representation, you can't take that fee (1.08e); 3P paying is okay only if there is no interference by 3P (think about mom & dad paying for representation) (or ins. co. paying for and controlling representation of insured!)

iii. unconscionable (1.04a)

A) a fee is unK if a competent lawyer couldn't form a rzbl belief the fee is rzbl

B) is it rzbl? limit to when rzbl minds could not differ that fee is unK; factors (1.04b)

1.time labor difficulty novelty skill req'd

2.likelihood of precluding other employ

3.usual charge in that area for that work

4.amt involved & results

5.time limits

6.nature & length of a/c relationship

7.experience reputation ability of atty

8.fixed or congingent fee

C) when do we need to know what's "rzbl"?

1. fee dispute

2. "rzbl & necessary fees" allowed by statute

3. ex. DTPA or contract disputes

showing damages & telling jury contingent fee % did not prove "rzlbness" of atty's fees; rule tell jury % and factors (and evidence of factors) and let jury decide what is rzbl

3. Contingent fee domestic relations case: usually a contingent fee improper (1.04 cmt 9) but this on was okay; but this fee was "unreasonable" b/c should be $700 and fee was $7000 & this was an easy & obvious recovery (and other 1.04 factors).

4. poor client communication is a big rzn for malpractice

b. contingency fees (1.04d)

1. elements

i. written

ii. method for determining fees

  • if different for settlement/trial/appeal
  • expenses to be deducted (identify)
  • & when expenses are to be deduted

iii. at conclusion, atty must describe outcome, recovery & calculation of expenses, etc.

2. explain to client if expenses deducted from total recovery (then to percentage) or if you do percentage & then deduct expenses from P's portion

3. proprietary interest: R. 108(h) atty shall not acquire proprietary interest in the litigation that he conducts for the client

i. this doesn't mean you can get contingency fee, but you can't buy a lawsuit, buy the claim

ii. but this doesn't mean anything b/c same difference!

iii. but lawyer may acquire lien on recovery to esure he gets his payment

3. Other fee issues

a. "retainer" - fee earned separate & apart from services; earned as soon as paid (but still could be unreasonable)

b. if someone hires you as atty & they have to pay you as a "retainer" as an advance pymt of fees & if you don't use it up you give it back

c. certain fee arrangements that are sometimes called "forbidden"

i. 1.08h(1): you may acquire a lien on coa recovery to secure your fee or expenses

ii. 1.08d: you can't provide financial assistance for client except you can

  • advance or guarantee for expenses of lawsuit & for rzbly necessary medical & living expenses
  • note you're not paying for it, but you can make repayment contingent on outcome
  • but medical and living expenses are banned in other states and that will be the MPRE answer
  • can pay for costs and expenses of indigents

iii. 1.04(f) fee splitting: general rule: not allowed unless... (fair)

  • in proportion to time ea atty spends
  • made with a forwarding lawyer [not allowed in other states - so not allowed for MPRE!] OR
  • made by written ag w/ client
  • 5.04 - you may not fee split w/ non-lawyers! (there is debate re: Multi-Disciplinary Practices)

d. fee forefeiture as a remedy:

i. Burrow v. Arce case:

1.clients claimed boFD

2.trial ct held there was no actual harm even if there was boFD

3.rule proving actual loss is not a prereq for fee-forfeiture for violating a fiduciary duty; why?

4.so there is incentive not to breach even if there is no harm

5.don't want attys to weigh costs & then breach FD

6.for what breaches of FD can we award fee forfeiture?

7.for breaches of the duty of loyalty (usually conflicts),

8.that are "clear & serious" violations of duties

9.(regardless of actual damages)

10.Procedure of fee forfeiture:

11.the court must determine if atty's lose fee (not jury q) and

12.may be partial or entire, depending on seriousness of violation

4. Client Propery & Trust Accounts (1.14)

a. don't commingle client funds with your money

i. have escrow or trust account for client's funds

  • just need one escrow acct (not one for everyone)
  • need accounting so each client's share is indentifiable

ii. duty of recordkeeping (have records & keep for 5 yrs)

b. if you get client's money

i. promptly notify client you have his funds (then put in trust acct)

ii. deliver to client any amt. they are entitled to receive (even if they owe you for your bill)

iii. render a full accounting upon request

c. if part of the money goes to the lawyer...

i. keep it separate

ii. do an accounting

iii. if not disputed: "sever the interests" (send client his part; ensure there is no dispute! and then if there isn't you can deposit your own amt. into bsns acct)

iv. if disputed, keep the disputed portion in escrow until resolved (practice tip: have arbitration clause saying any disputes will be arbited)

d. IOLTA interest is property (still open question if that is unconstitutional)

II. The DUTY OF CONFIDENTIALITY

three privileges:

1. ex bsnsman shares secrets with atty; atty insider-trades; this is not a violation of atty-client privilege b/c no disclosure; this violates the duty not to use the info w/o consent

2. ex. defending ACME in products liability case; go to facility and take stmts of non employee witnesses; this is work product ("other" work product); protected from disclosure

3. ex. represent bsnsman; DA investigating him for tax fraud; DA subpoenas atty's files; protected by a/c privilege

A. The Attorney-Client Privilege

1. Creating the privilege (TRE 503)

a. communication

  • any expression (written, oral, conduct)
  • facts are not privileged (can't tell your atty everything to protect fact w/ a/c privilege)
  • hypo: boK; one issue is client's course of dealing; client comes in for interview & talk about client's course of dealing; @ depo asked:
  • privileged: tell me what you told your atty about your cod or what did you talk about?
  • not privileged: tell me about your cod

iv. outside privilege

  • name of client
  • existence of the a/c relationship

v. just b/c you give your lawyer docs doesn't = privilege; if not privileged when prepared don't become privileged when att gest them

b. made between "privileged persons"

1.can be by client to atty and by atty to client

2.client, rep, replaywer, rep, rep, consultant => all privileged

3.btwn {client's side}and {atty's side}

4.the communication must originate with a privileged and be directed at or addressed to another privileged person

5."client" TRE 503a1: {person} {who is rendered (or consults for) prof'l legal services} = actual or potential clients

6."lawyer" lawyer or rzbly believed by client to practice law

7.**"representative"** =

8.of client: has authority to obtain prof'l legal services or to act on that advice, on behalf of client or

9.of client: other person who makes or receives confidential commincation while acting in scope of empl for the purpose of legal representation

10.includes ins. co. as rep. of client

11.bsns entities

12.old test: control group test: if the e'ee can control or take a substantial part in a decision re taking action on atty's advice => he is privileged rejected in fed ct

13.federal test - subject matter test is the sm of the communication

a. about which e'ee knows &

b. that is w/in his course and scope &

c. e'ee knows the info is being sought for purpose of legal advice

3. state test 503a2B: make communication while acting in scope of employment & for purpose of legal representation

  • of lawyer: employed by to assist in redering legal services
  • of lawyer: accountant who is rzbly necessary
  • of lawyer: not a rep!!! expert W preparation - he can repeat things b/c (not sure ...)

c. made in confidence (503a5)