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Prof Responsibility • Loyalty
PR#028
Legal Definition
When a lawyer enters into a business transaction with a client, the lawyer must advise the client to speak to independent counsel about the deal. Under the ABA Rules, this advice can be given verbally or in writing. However, under California's more strict rules, this advice must be given in in writing.
Plain English Explanation
Under the ABA Rules, lawyers have some flexibility in how they advise clients to seek independent legal advice about a potential business transaction. The lawyer can give this advice either verbally or in writing. This allows for more informal situations where a lawyer might discuss the need for independent counsel during a meeting or phone call with the client.
In contrast, the California Rules require that the advice to seek independent counsel must be given in writing.
In contrast, the California Rules require that the advice to seek independent counsel must be given in writing.
Hypothetical
Hypo 1: Bob, a lawyer, specializes in real estate. His client, Sam, owns a vacant lot in a prime location. Bob sees an opportunity and offers to buy half of the lot from Sam for $100,000. Bob explains the deal to Sam over the phone and verbally advises Sam to seek independent legal counsel, stating that it would be a good idea for Sam to consult another lawyer before proceeding. Sam trusts Bob, declines to consult another lawyer, and they proceed with the transaction. Bob later sends Sam a written confirmation of the transaction, but does not put the advice to seek independent counsel in writing.
Result: Under the ABA rules, this would be permissible, because Bob verbally advised Sam to seek independent legal advice, which satisfies the requirement of ABA Model Rule 1.8(a). However, under California rules, this is a violation because California Rule 1.8.1 requires that the advice to seek independent counsel be provided in writing, which Bob failed to do.
Result: Under the ABA rules, this would be permissible, because Bob verbally advised Sam to seek independent legal advice, which satisfies the requirement of ABA Model Rule 1.8(a). However, under California rules, this is a violation because California Rule 1.8.1 requires that the advice to seek independent counsel be provided in writing, which Bob failed to do.
Visual Aids
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