Lawyer-Client Relationship Formation
Lawyer-client relationship is formed when C reasonably perceives that L is representing them or by an actual agreement. When this occurs, L owes a duty of confidentiality to the prospective C.
Contingency Fee
Contingency fee agreements are those in which the fee is dependent on the outcome and must include a writing, be signed by the client, and in Cal. by both the lawyer and the client with each retaining a copy, state the method to determine the fee and the percentage, state the litigation and other expenses to deduct and whether they should be deducted before or after the contingency fee is calculated, and Cal. looks at any other fees not covered by the agreement that might affect the client.
They are prohibited in criminal and domestic relations cases.
→ usually 30-33% (anything higher red flag)
Fee Agreements
TENT FLAW (ABA)
Under the Model Rules (MR), fees must be reasonable, considering factors including time limitations imposed by the client; the experience and ability of the lawyer; the nature and length of the relationship; the time, labor, novelty, difficulty, and skill involved, the fee customarily involved; the likelihood of precluding other employment; the amount involved and results obtained; and whether the fee is fixed or contingent.
Furry Dogs Satisfy Anxious Clients (CRPC)
In Cal., the fee must not be illegal or unconscionable and Cal. considers the same MR factors as well as whether the lawyer engaged in fraud or overreaching when setting the fee, whether the lawyer failed to disclose material facts, the amount in proportion to the services provided, and whether the client gave informed consent.
(Sophistication of both the lawyer and the client.)
→ look at what type of case it is and go through each one.
→ if fee problem later = CA violation if C did not give informed consent.
Conclude: fee is likely reasonable and not unconscionable
Advancing Fees
Under the MR, a lawyer may not provide financial assistance to the client unless it is for a contingency case, or the client is indigent. Under the CRPC, the lawyer may advance money to the client for any purpose if the client promises to pay it back in writing.
→ exam note: if contingency agreement not valid = L violated the rules.
Duty to Communicate
A lawyer shall promptly inform the client of any decision that affects their case, reasonably consult with the client, and keep the client informed of the status of the case, such as settlement offers.
→ if any problem with fees / misunderstanding bring this up
→ settlement offers
Scope of Representation
The client makes the substantive decisions, such as whether to take a settlement offer, and the lawyer makes the legal strategic decisions.
Duty of Competence
Under the MR, a lawyer shall competently represent a client with the legal knowledge, skill, thoroughness, and preparation reasonably necessary for the representation. Under the CRPC, a lawyer must not intentionally, recklessly, with gross negligence, or repeatedly fail to perform legal services with competence.
Both: L may associate or consult with another competent L or acquire the necessary skills to become competent.
Duty of Diligence
Under the MR, a lawyer shall act with reasonable diligence and promptness in representing a client. Under the CRPC, a lawyer shall not intentionally, repeatedly, recklessly, or with gross negligence fail to act with reasonable diligence in representing a client.
Conflict of Interest
(Duty of Loyalty)
A lawyer owes a duty of loyalty to act in the best interest of their client and avoid all conflicts of interest. A conflict of interest exists if there is a significant risk that the representation of the client will be materially limited by the lawyer’s responsibilities to another client, a former client, a third person, or by a personal interest of the lawyer.
A lawyer may still represent the client despite the conflict if they reasonably believe they can provide competent and diligent representation to the client, representation is not prohibited by law, clients are not directly if between two clients, and the client gives informed consent, confirmed in writing (Cal. requires informed written consent).
→ Here, L owes a duty of loyalty to C.
→ conclude ex: L’s representation was materially limited by her own personal interest…
→ analyze exceptions - conclude.
Client Trust Account/ Commingling Funds
A lawyer shall hold a client’s money separate from lawyer’s money. A client’s money must be kept in a client trust account. CRPC requires the trust account to be registered with the Cal. State Bar.
Fee Disbursements
A lawyer must promptly (CRPC requires within 45 days) pay a client any funds due along with an accounting, but they may hold back money they believe is due to them.
Fee Disputes
Any disputed funds must remain in the client’s trust account. CRPC allows mandatory fee arbitration for fee disputes.
Limiting/
Settling Malpractice Liability
Under the MR, a lawyer may not limit their liability to a client without advising the client to seek independent counsel. Under the CRPC, a lawyer may not limit their liability to a client.
Under both the MR and CRPC, a lawyer may not settle a claim or potential claim with an unrepresented client unless they are advised in writing to seek independent counsel and given a reasonable time to do so.
Duty of Loyalty—Corporate Conflicts of Interest
A lawyer owes a duty of loyalty to their client and must avoid potential and actual conflicts of interest. A lawyer employed by a corporation represents the corporation and must act in the best interest of the corporation. A corporate lawyer may also represent the corporation’s officers, directors, employees, and other constituents if there is no conflict in doing so.
A conflict of interest exists if there is a significant risk that the representation of one or more clients will be materially limited by the lawyer’s responsibilities to another client or a prospective client. Where there is a conflict, a lawyer may represent the clients only if the lawyer reasonably believes there will not be an adverse effect, the clients are not directly adverse, the representation is not against the law, and the client gives informed consent, confirmed in writing under the ABA or informed written consent in Cal.
Corporate employee disclosure
When a lawyer represents a corporation, they must explain the identity of their client to employees when the lawyer knows or should know that the corporation’s interests are adverse to those of the employee.
L violates duty if did not inform that corp. was her client or explain that L represented them not him.
Reporting Corporate Misconduct Up
If a lawyer knows that an officer, employee, or other person associated with the corporation is engaged in action that is a violation of a law reasonably imputable to the corporation and is likely to result in substantial injury to the corporation, the lawyer shall report up, and refer the matter to a higher authority in the corporation, unless the lawyer reasonably believes that it is not in the best interest of the corporation to do so. Cal. requires that the duty of confidentiality be maintained unless death or substantial bodily injury is likely.
Reporting Corporate Misconduct Out
If the highest authority fails to take action and the lawyer reasonably believes the violation will result in substantial injury to the corporation, then under the ABA, the lawyer may report out and reveal confidential information if such disclosure is necessary to prevent the injury. In Cal., the lawyer may not report out and disclose information outside the corporation if it will violate the duty of confidentiality, but the lawyer should urge reconsideration of the matter to the higher authorities within the corporation, and resign or withdraw from representation, unless death or substantial bodily injury is likely at which point they can report out.
Duty of Confidentiality
A lawyer shall not reveal information relating to the representation of a client unless under the ABA, the client gives informed consent, disclosure is impliedly authorized, or to prevent the client from committing a crime or fraud or to mitigate or rectify a crime or fraud committed by the client that will result in substantial injury to another and the client has used the lawyer’s services to do so. Cal. allows revealing confidential information to prevent a criminal act that will result in death or substantial bodily harm, but the lawyer must first persuade the client to not commit the act, inform the client of the lawyer’s ability to reveal the information, and only reveal as much as necessary.
Mandatory Withdrawal
L shall withdraw if the representation will result in a violation of the PR rules, or under the ABA in other law; ABA also if C uses L’s services to commit or continue to commit a crime
Permissive Withdrawal
L may withdraw if C insists on action involving L’s services that are fraudulent or criminal, C has used L’s services to perpetrate a crime or fraud, or other good cause.
ABA: If L finds acts of C so repugnant.
[only list means possibly at issue]
Duty to the Public and Profession
A lawyer shall not counsel a client to engage, or assist a client, in criminal or fraudulent conduct, but may counsel the client to discuss the legal consequences and assist them in making a good faith effort to understand the law. Further a lawyer shall not engage in conduct involving dishonesty, fraud, or deceit.
Referral Agreements and Fees
A reciprocal referral agreement between lawyers is permissible if it is not exclusive and the client is informed of the agreement. However, a lawyer may not give anything of value to a person for recommending the lawyer’s services unless it is for a qualified referral service or a nominal gift as an expression of appreciation not intended as compensation for the recommendation or future recommendations.
Fee Splitting Among Lawyers
Division of fees between lawyers who are not in the same firm may be made under the ABA only if the division is proportionate, the client agrees to the arrangement and the agreement is confirmed in writing, and the total fee is reasonable. They are only allowed in Cal. if there is a written agreement between the lawyers to divide the fee, the client consents in writing after full written disclosure that fees will be divided along with identity of the lawyers and division terms, and the total fee is not increased by the division.
Duty of Fairness/Trial Publicity
A lawyer who is participating in an investigation or litigation or a matter shall not make an extrajudicial statement that the lawyer knows or should reasonably know will be publicly disseminated and have a substantial likelihood of materially prejudicing the proceeding. One exception is information already available in the public records.
