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Prof Responsibility • Loyalty
PR#026
Legal Definition
Common conflicts of interest involving the lawyer's own interests are: (1) financial conflicts involving transactions that favor the lawyer; (2) gifts; (3) client media rights; (4) sex with clients; (5) attempts to limit the liability for malpractice; (6) loans and advances made to the client; and (7) when the lawyer is a witness in the matter.
Plain English Explanation
When we talk about conflicts of interest for lawyers, we often think about situations where a lawyer might be torn between two clients. But there's another area that's just as important: conflicts between a lawyer's own interests and those of their client. These situations can be tricky because they test a lawyer's ability to put their client's needs first, even when it might cost them personally.
Let's break down the seven most common types of these conflicts:
(1) Financial Transactions: This is probably the most straightforward. Lawyers aren't supposed to use their position to strike business deals that benefit themselves at their client's expense. For example, a lawyer shouldn't convince a client to invest in the lawyer's side business without full disclosure and consent.
(2) Gifts: While it might seem nice for a grateful client to give their lawyer a gift, this can create complications. Large gifts might make people question whether the lawyer is taking advantage of the client, or it might create expectations of special treatment.
(3) Client Media Rights: Sometimes, a client's case might be interesting enough for a book or movie. Under ABA rules, lawyers aren't supposed to try and secure the rights to their client's story while they're still representing them. This could lead to the lawyer making decisions that make for a better story rather than what's best for the client.
(4) Sexual Relationships: Under the ABA rules, lawyers shouldn't have sexual relationships with their clients. It can cloud judgment and create power imbalances that compromise the professional relationship.
(5) Limiting Malpractice Liability: Lawyers shouldn't try to get clients to agree not to sue them for malpractice. This could lead to the lawyer being less careful with their work, knowing they're protected from consequences.
(6) Loans and Advances: While it might seem kind for a lawyer to lend money to a struggling client, this can create a conflict. The lawyer might start making decisions based on getting their money back rather than what's best for the case.
(7) Lawyer as Witness: If a lawyer might be a key witness in a case, they generally shouldn't also be the advocate. It's hard to be both a neutral witness and a zealous advocate at the same time.
Let's break down the seven most common types of these conflicts:
(1) Financial Transactions: This is probably the most straightforward. Lawyers aren't supposed to use their position to strike business deals that benefit themselves at their client's expense. For example, a lawyer shouldn't convince a client to invest in the lawyer's side business without full disclosure and consent.
(2) Gifts: While it might seem nice for a grateful client to give their lawyer a gift, this can create complications. Large gifts might make people question whether the lawyer is taking advantage of the client, or it might create expectations of special treatment.
(3) Client Media Rights: Sometimes, a client's case might be interesting enough for a book or movie. Under ABA rules, lawyers aren't supposed to try and secure the rights to their client's story while they're still representing them. This could lead to the lawyer making decisions that make for a better story rather than what's best for the client.
(4) Sexual Relationships: Under the ABA rules, lawyers shouldn't have sexual relationships with their clients. It can cloud judgment and create power imbalances that compromise the professional relationship.
(5) Limiting Malpractice Liability: Lawyers shouldn't try to get clients to agree not to sue them for malpractice. This could lead to the lawyer being less careful with their work, knowing they're protected from consequences.
(6) Loans and Advances: While it might seem kind for a lawyer to lend money to a struggling client, this can create a conflict. The lawyer might start making decisions based on getting their money back rather than what's best for the case.
(7) Lawyer as Witness: If a lawyer might be a key witness in a case, they generally shouldn't also be the advocate. It's hard to be both a neutral witness and a zealous advocate at the same time.
Hypothetical
Hypo 1: Bob is representing Sam in a lucrative business deal. Bob suggests that Sam invest $100,000 in a startup company, claiming it's a great opportunity. Bob doesn't disclose that he also has a significant stake in the company. Result: This is a clear financial conflict of interest. Bob is using his position as Sam's lawyer to promote a transaction that benefits him personally. Bob should have fully disclosed his own interest in the company and advised Sam to seek independent legal advice before considering the investment. This behavior could lead to disciplinary action against Bob.
Hypo 2: Sam, grateful for Bob's legal services in a successful lawsuit, offers Bob his vintage sports car as a gift. The car is worth $50,000. Bob, a car enthusiast, is tempted to accept. Result: This situation presents a conflict involving gifts. While small tokens of appreciation might be acceptable, a gift of this value could be seen as excessive and potentially influencing Bob's professional judgment. Bob should politely decline the gift, explaining that ethical rules prevent him from accepting such valuable gifts from clients. If Bob really wants to accept, he should, at minimum, advise Sam to seek independent legal advice about the gift.
Hypo 3: Bob is representing Sam in a high-profile criminal case. A movie producer approaches Bob about buying the rights to Sam's story. Bob sees an opportunity and asks Sam to sign over the media rights to Bob as part of their fee agreement. Result: This is a conflict involving client media rights. Bob shouldn't try to acquire literary or media rights from Sam while still representing him. This could incentivize Bob to handle the case in a way that makes for a better story rather than in Sam's best legal interests. Bob should refuse the producer's offer and focus on Sam's defense.
Hypo 4: During a lengthy and emotional divorce case, Amy begins to develop romantic feelings for Bob, her lawyer. Amy suggests they start dating, assuring Bob it won't affect the case. Result: This scenario presents a clear conflict involving sexual relationships with clients. Even if Amy initiates it, Bob must refuse. Sexual relationships with current clients are generally prohibited as they can impair the lawyer's independent judgment and create a power imbalance. Bob should explain this to Amy and consider whether he can continue representing her given the situation.
Hypo 5: Bob has been representing Sam in various matters for years. Concerned about a potential malpractice claim in a complex case, Bob asks Sam to sign an agreement waiving his right to sue Bob for malpractice. Result: This is a prohibited attempt to limit liability for malpractice. Lawyers cannot ask clients to prospectively limit the lawyer's malpractice liability. This kind of agreement undermines the lawyer's accountability and duty of care. Bob's request is unethical and could itself be grounds for disciplinary action. Instead, Bob should focus on providing competent representation and maintaining appropriate malpractice insurance.
Hypo 2: Sam, grateful for Bob's legal services in a successful lawsuit, offers Bob his vintage sports car as a gift. The car is worth $50,000. Bob, a car enthusiast, is tempted to accept. Result: This situation presents a conflict involving gifts. While small tokens of appreciation might be acceptable, a gift of this value could be seen as excessive and potentially influencing Bob's professional judgment. Bob should politely decline the gift, explaining that ethical rules prevent him from accepting such valuable gifts from clients. If Bob really wants to accept, he should, at minimum, advise Sam to seek independent legal advice about the gift.
Hypo 3: Bob is representing Sam in a high-profile criminal case. A movie producer approaches Bob about buying the rights to Sam's story. Bob sees an opportunity and asks Sam to sign over the media rights to Bob as part of their fee agreement. Result: This is a conflict involving client media rights. Bob shouldn't try to acquire literary or media rights from Sam while still representing him. This could incentivize Bob to handle the case in a way that makes for a better story rather than in Sam's best legal interests. Bob should refuse the producer's offer and focus on Sam's defense.
Hypo 4: During a lengthy and emotional divorce case, Amy begins to develop romantic feelings for Bob, her lawyer. Amy suggests they start dating, assuring Bob it won't affect the case. Result: This scenario presents a clear conflict involving sexual relationships with clients. Even if Amy initiates it, Bob must refuse. Sexual relationships with current clients are generally prohibited as they can impair the lawyer's independent judgment and create a power imbalance. Bob should explain this to Amy and consider whether he can continue representing her given the situation.
Hypo 5: Bob has been representing Sam in various matters for years. Concerned about a potential malpractice claim in a complex case, Bob asks Sam to sign an agreement waiving his right to sue Bob for malpractice. Result: This is a prohibited attempt to limit liability for malpractice. Lawyers cannot ask clients to prospectively limit the lawyer's malpractice liability. This kind of agreement undermines the lawyer's accountability and duty of care. Bob's request is unethical and could itself be grounds for disciplinary action. Instead, Bob should focus on providing competent representation and maintaining appropriate malpractice insurance.
Visual Aids
Related Concepts
Are lawyers allowed to have sex with their clients?
Can an attorney continue to represent a client if a conflict exists?
Does representing clients with inconsistent positions violate the lawyer's Duty of Loyalty?
How can a lawyer limit their malpractice liability with a client?
How can screening avoid imputed conflicts?
How do the California rules differ from the ABA when it comes to a lawyer accepting compensation from a party other than their client?
In assessing a conflict of interest, what is a concurrent conflict?
In assessing the Duty of Loyalty, what's the difference between an actual conflict and a potential conflict?
In California, are lawyer's allowed to have sex with their clients?
In California, how can a lawyer limit their malpractice liability with a client?
In California, how must a lawyer advise their client to seek independent counsel when dealing with potential financial conflicts?
In California, may a lawyer represent an insurance company and its policyholder as joint clients?
In California, what are the restrictions related to lawyers acquiring the media rights of their clients?
In California, what are the restrictions related to lawyers receiving gifts from their clients?
In California, when may a lawyer loan money to a client?
What are some common issues that occur when a lawyer represents multiple clients in the same matter?
What are the restrictions related to lawyers acquiring the media rights of their clients?
What are the restrictions related to lawyers receiving gifts from their clients?
What is an imputed conflict and how can it be resolved?
What is required in order for a lawyer to accept compensation from a party other than their client?
What is required in order for a lawyer to avoid a financial conflict with a client?
What is the Duty of Loyalty?
When does the general rule of imputed conflicts NOT apply?
When may a lawyer appear as a witness in a matter where they represent a party?
When may a lawyer loan money to a client?
When may there be a conflict of interest with a former client?
