TABLE OF CONTENTS

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

1. Duty of Confidentialty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

2. Attorney Fee Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . 22

3. Disqualification to Serve as Attorney. . . . . . . . . . . . . . . . . 68

4. Attorney as an Advocate . . . . . . . . . . . . . . . . . . . . . . . . . . .87

5. Relations with the Opposition . . . . . . . . . . . . . . . . . . . . . . 111

6. The Attorney and the Media . . . . . . . . . . . . . . . . . . . . . . .130

7. Trust Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .148

8. Using Paralegals . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . 173

9. Specialization of the Practice . . . . . . . . . . . . . . . . . . . . . . .184

10. Continuing Legal Education and Certification . . . . . . . ..199

11. Malpractice Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . .211

12. Termination or Withdrawal from the Attorney-Client

Relationship. . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . 221

INDEX. . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 245

This book is directed toward defining and explaining the scope of the attorney-client relationship. As part of its discussion on the attorney-client relationship the book will deal with such topics as client confidentiality, conflict of interest, fiduciary responsibility, attorney fees, attorney fee agreements, withdrawal of the relationship, and termination of the attorney-client relationship.

Any discussion on professional responsibility would be incomplete if no attempt was made to explain the two types of Codes of Professional Responsibility which serve as the underpinnings for the attorney-client relationship. In 1969 the American Bar Association promulgated its ABA Model Code. This Model Code dealt primarily with the conduct of attorneys. Several states have since patterned their Canons of Professional Responsibility on this ABA Model Code. In 1977 the ABA upgraded its rules for professional conduct and instituted the Model Rules of Professional Conduct. These Model Rules have since been adopted in the entirety or with modification by almost all of the states. Regardless of whether they have adopted the Model Code or Model Rules, the states have usually added their own individual interpretations or additions concerning the attorney-client relationship. A "disciplinary rule" in this book is areference to the ABA Model Code of 1969. Likewise, reference in this book to the "Model Rules" is a reference to the Model Rules of Professional Conduct that were subsequently promulgated.

Generally, it is easier for an attorney to maintain compliance with the Model Rules than with the Model Code. For a particular state, an attorney will have to comply with the professional canons of responsibility that were adopted by that particular state. A difficult situation can arise when an attorney is admitted to practice in one or more states. In such a situation, an attorney's conduct may not violate the rules of one state using the Model Rules but might violate the rules of another state that uses the Model Code. Attorneys should remember they are bound by the Canons of Professional Responsibility for every state in which they practice even if the practice is temporarily by comity.

The first responsibility of every attorney is to preserve any communications from the client. The heart and soul of the attorney-client relationship is that no attorney can be forced to testify against the client. Confidentiality is owed by every attorney to the client. Absent a client's consent, an attorney usually cannot reveal information relating to the representation of a client. Both ABA Model Rule 1.6 and ABA Disciplinary Rule 4-101(B) impose upon the attorney the obligation to maintain client confidences.

The rationale behind this duty of an attorney to maintain client confidences is rather straight forward. A person seeks legal advice from an attorney to handle a legal matter. A client seeking legal advice does not and should not have any reason to believe the evidence and confidences being given to the attorney can be used against the client. In most instances compelling an attorney to divulge client confidences and communications would violate the client's Sixth Amendment right to counsel. If a client's attorney could be compelled to give evidence against the client, no one would ever consult an attorney or freely discuss their case with him for fear that the content of the discussion would be divulged in court. The promotion of full and frank discourse between the client and the attorney was the basis for the ABA sustaining the duty of an attorney to maintain clientconfidences. Both the Model Rules and the Model Code seek to protect the client from the risk of his attorney divulging confidential information. Without this protection, a client would risk self-incrimination every time he consulted an attorney for legal service regarding a potential criminal matter.

The duty to maintain client confidentiality necessitates an attorney-client relationship. The existence of the attorney-client relationship requires several different elements. First, the confidences in question must have been divulged in a situation where legal advice was sought from the attorney. The person must have sought legal advice in a situation that a reasonable person would presume was compatible for eliciting professional advice. No attorney-client relationship would be thought to have been created in a party setting of casual conversation, laughter and jokes. Such a meeting with the attorney is social rather than professional and not done as a consultation even though the attorney is giving an opinion on a legal matter. The creation of the attorney-client relationship requires that the meeting of the attorney with the potential client be under such circumstances that a reasonable person would consider the purpose of the meeting to be for the potential client to obtain legal advice or representation. The chance meeting at a social gathering where general examples are given and no specifics are discussed would probably give rise to the belief that the conversation was social, not business, and that no attorney-client relationship exists.

The communication given to the attorney, be it written ororal, must be related to the subject being discussed by the attorney and potential client. The consultation must also be made in confidence. For a consultation to be confidential, a reasonable person must be able to conclude that it is a confidential communication. The most common example is a situation where legal advice is sought from an attorney when non-lawyers not employed by the attorney are present. This consultation is not a confidential communication, and there is no attorney-client privilege. When these conditions are met, the attorney-client privilege exists and the attorney-client communications are privileged.

Once a communication is privileged, it will remain so until the client waives the privilege. The privilege is usually waived by the client testifying to the content of the communication. The client can also expressly release the attorney from the obligation to maintain the client's confidentiality.

The client's conduct can waive the attorney-client privilege. Voluntarily talking about the advice or testifying about such legal advice will terminate a client's privilege. One of the most common ways for a person to lose the protection of the attorney-client privilege is for the person to sue the attorney for malpractice. In a situation where the attorney is sued by a client, the attorney-client privilege is waived to the extent necessary for the attorney to defend himself. In a malpractice action, it would be unfair for the attorney to be barred from using information he has to defend against the compliant.

In addition to information that the client gives directly tothe attorney (the communication), the attorney is duty-bound to preserve in secret confidences regarding the client even though they may not have been learned directly from the client. Canon 4 of the ABA Code of Professional Responsibility holds that a lawyer should preserve the "confidences of secrets" of his client. Disciplinary Rule 4-101(A), defines a secret as "other information gained in professional relationship that the client had requested to be held inviolate or the disclosure of which would be embarrassing or likely to be detrimental to the client." A confidence is defined as "information protected by the attorney-client privilege under applicable law." A confidence is what the attorney is told, but a secret is information the attorney gains from a different source. Confidences and secrets may not be used to the disadvantage of the client. The attorney cannot disclose this information if it is going to hurt his client.

In addition to Disciplinary Rule 4-101, the attorney should be aware of Ethical Consideration 4-5 that holds such information may not be used to the advantage of the attorney or third party unless the client consents. Not only can information not be given or disseminated if it is going to hurt the client, it cannot be used if it is going to give an advantage to the attorney or someone else without the client's consent.

The duty of the attorney to preserve the client's confidences and secrets does not preclude the disclosure of that information to the attorney's agents. Disclosure of such information to an attorney's agent is permissible because these agents are workingfor the attorney and are bound by the same obligation to keep the information secret.

An attorney can discuss confidential information with co-counsels, other attorneys in the office and support staff as long as the discussion is geared toward helping the client. Sometimes an investigator working for the attorney needs to know this information in order to investigate, helping the attorney who in turn will use that information to help the client. Such a disclosure is not considered a violation. The client can place limits on any disclosure of the client's information. The client can tell the attorney, "Under no circumstances tell anyone. You know, and you alone will know." Once the client has placed specific limitations on the release of confidential information, the attorney cannot disseminate that information to anyone outside those limits. In the face of such a limiting proviso, the attorney should not communicate that information to the people in the office. Moreover, a mere rumor in the office that serves no benefit to the client can get the attorney in trouble even if it is not a violation of a client confidence.

The general rule is that unless there is reason to divulge a client confidence to an agent, the attorney should not do so. In the absence of a client's direct prohibition not to disclose information to anyone, if there is a reason for someone in the attorney's office to know a client's confidence, the attorney can divulge the information to the extent necessary for the recipient to assist the attorney in servicing the client's legal matter.

There is a difference in the way confidences and secrets are treated between the two ABA Acts. Attorneys should understand these differences in planning their conduct. In a state that uses the ABA Model Code, Disciplinary Rule 4-101 applies. Disciplinary Rule 4-101, imposes an ethical duty to maintain the secrecy of all information protected by the attorney-client privilege and all information that is not protected by the privilege that the client asks be kept in confidence or that would harm or embarrass the client if revealed.

In contrast, the ABA Model Rule which is adopted by most states is actually much broader. The Model Rules impose upon attorneys an ethical duty to preserve as confidential any information that relates to the representation of the client, regardless of whether or not it is privileged, regardless of whether or not the client asks it to be kept in confidence and regardless of whether or not revealing it would harm or embarrass the client. Under the Model Rules, the attorney is basically forbidden to divulge privileged client information, however obtained, without the client's consent. The ABA Model Rule is much broader and can expose an attorney to liability for inadvertent conduct that would not be applicable under the earlier Model Code. Under the Model Rules, the only way for an attorney to obtain maximum protection is for the attorney to take the high road and not speak about the client. In reality, an attorney who constantly discloses clients' business will lose clients whether or not any violation of clients' confidences occur. These are the rules thatgovern the imputation to the attorney of the duty of confidentiality.

One of the areas where attorney-client privilege comes into play quite often is that concerning a corporate client. The United States Supreme Court set forth the limitations on corporate communication in its case Upjohn Company vs. The United States, 1981, 449 US 383, where it stated that the attorney-client privilege does, in fact, apply to corporate clients as well as to individuals.

Prior to the Upjohn case, the lower courts had held that the attorney-client privilege only existed between communications of the corporate officers and their attorneys who fell within the control group of the company: the attorney-client privilege only extended to the officers and directors who actually ran the company. The Upjohn decision actually rejected the control group argument and expanded the coverage of the attorney-client privilege. The Supreme Court ruled that where the client is a corporation or other organizational entity, the attorney-client privilege applies to communications generated to secure legal advice that are between the organization's employees concerning matters within the scope of their duties and responsibilities and the organization's counsels or attorneys who are acting in a professional capacity at the direction of the organizational superiors.

Information so disclosed by the corporation is covered by theattorney-client privilege. If an attorney is hired to represent the corporation or limited liability company or other such legal entity, the attorney can talk to anyone in the company regarding their duties and responsibilities, and the information obtained is privileged information if it is related to the subject involving the corporation and the attorney. By contrast, information that is disclosed by an employee concerning misconduct that was observed outside of his employment responsibilities is not privileged even if made to the organization's attorney. An example of non-privileged information could arise as follows: An employee observed from a window another employee drive recklessly and cause an accident. The fact that the employee related what the employee saw to the attorney would not make the statement a privileged communication because it was observed outside the scope of the employee's employment responsibilities. A corporate client cannot create a privilege when one does not exist.

Attorneys should bear in mind that a communication might be protected under the attorney-client work product rule even if it is not privileged. Under the attorney-client work product rule, information amassed by an attorney is usually not discoverable by the opposing party if the opposing party also has the ability to get the information. In the situation where an attorney has acquired non-privileged information that the other side cannot get, the opposing party might be able to force the attorney to disclose such information. This is an interesting situation.

Attorneys should always bear in mind these two conflictingprivileges whenever material in the attorney's hands is sought to be discovered. The attorney-client privilege is an absolute bar against disclosure; the work product rule extends nondisclosure of the attorney's work product under certain circumstances.

Disputes regarding client confidences usually revolve around client communications with the attorney. What actually is a communication? The basic definition is any communication between an attorney and a client or potential client seeking legal advice where advice is given on the matter they are discussing, and it is given in confidence. There are, however, certain areas that courts have ruled are not confidential communications. Among such areas are the identity of the client and the fee arrangement between the attorney and the client. The fact that the attorney may be acting on behalf of a client is not privileged either.

Generally, the identity of the client is not a matter the attorney can normally keep concealed. The exception is where the revealing of the client's identity would expose the client to liability of some form or another. An example of this occurred a few years ago in Florida. There was a felony hit-and-run in which a person was killed. The driver of the vehicle went to his attorney. The attorney went to the D.A. and attempted to negotiate a very low plea saying, in essence, "You don't know who the driver is. We do, and my client will plead guilty to a lesser charge like manslaughter, not vehicular manslaughter." The District Attorney tried to get the attorney to release the name of the client so theycould prosecute. The prosecution threatened the attorney with obstruction of justice charges and even sought an indictment against the attorney. The attorney stood on the attorney-client privilege and refused to disclose the information. The court sided with the attorney saying that releasing the information would have exposed his client to criminal prosecution. In this situation, it was held that the disclosure of the identity of the client would be a confidential communication. The statute of limitations eventually ran out, and there has never been any prosecution on that case.

Another situation involving the revealing of client's identities has arisen where criminals, specifically drug dealers, wish pay their income taxes in absentia (in secret). Such clients would send the payment to a particular account set up by the IRS. Records were kept that payment was received, but the IRS did not know who made the payment. In the case of criminal prosecution, the criminal defendant could prove that he did pay his income tax. Sometimes this was done through an attorney, and the information was always kept confidential because the information would immediately tip the IRS and the government that this person was a drug dealer. This would make criminal prosecution much easier on the drug dealing. This practice has since been abolished, but it was one way the government did get a lot of tax money.

Another area of dispute regarding communication is over documents or intangible evidence turned over to the attorney by the corporation. In this situation the result is the same regardless of whether or not the client is a corporation. Evidence that isdiscoverable in the hands of the client is equally discoverable in the hands of the attorney. If the client can be compelled to turn over that information by simply giving it to the attorney, this does not shield it from being produced. In a breach of contract suit, for example, if the defendant gave documents (such as records) relating to the breach of contract to the attorney, the defendant could not thereafter claim that because the documents are now in the hands of the attorney they are no longer discoverable. If documents are originally discoverable, giving them to the attorney does not thereafter make them nondiscoverable. In a case where the attorney receives evidence of a crime, the law is equally clear. If the attorney has evidence of the crime itself, it must be turned in. The attorney does not have to state where the attorney got the evidence.

The example most often used is where the client gives the attorney the gun that might have been used in the crime. The attorney is permitted to keep the gun for as long as necessary to run any reasonable tests that the attorney might want, but thereafter the gun must be turned over to the police. The attorney cannot be forced to disclose the name of the client; but at the same time the attorney cannot remove the serial number from the gun that might lead to the identity of the client.

The attorney cannot become a depository for crime. A client cannot give 20 pounds of cocaine to the attorney with the instruction, "Put this in your safe." The attorney would be obligated to deliver it to the authorities. In the case ofCalifornia vs. Meredith, 29 Cal.3d 682, the client told his attorney the location in a trash can of the gun used in a crime. The argument was whether or not the attorney should have disclosed this information to the court. The court held that if the attorney simply looked in the trash can and saw that it was there, he was under no duty to disclose it.

On the other hand, attorney possession requires disclosure. In re Ryder 1967, 263 F. Supp. 360, the court upheld suspension of an attorney who kept a shotgun rather than turn it over to the police for use against the client.

"It is an abuse of a lawyer's professional responsibility knowingly to take possession of and secrete the fruits and instrumentalities of a crime. Ryder's acts bear no reasonable relation to the privilege and duty to refuse to divulge a client's confidential communication. Ryder made himself an active participant in a criminal act, ostensibly wearing the mantle of the loyal advocate, but in reality serving as an accessory after the fact."

The Court held that once the attorney took possession of the gun the attorney acquired the affirmative duty to disclose and deliver. This is a close area in the case of potential discipline for an attorney. Before proceeding, it would be wise to get an opinion from the state bar on how to proceed. In the Ryder case, however, that did not work because the attorney had the prior opinion of two judges and a state attorney before proceeding. Yet, the attorney was still suspended for 18 months. There could be serious problems when the attorney is dealing with a major crime or concealing evidence or not disclosing evidence.

The Justice Department often uses subpoenas against attorneysin an attempt to try to find out information about their clients. This has become a favorite tactic by the U. S. Justice Department against attorneys who represent suspected major drug dealers. In response to which the ABA added rule 3.8(f) to its Model Rules in 1990. Model Rule 3.8(f) prohibits prosecutors from subpoenaing a lawyer in a criminal proceeding unless the prosecutor reasonably believes that (a) the information sought is not protected from disclosure by any applicable privilege, (b) the evidence sought is essential to successful completion of an on-going investigation or prosecution, (c) there is no other feasible alternative to obtaining the information and (d) the prosecutor obtains prior judicial approval after an opportunity for an adversarial proceeding. This is the holding of the United States First Circuit Court of Appeals in United States vs. Klubock 1987, 832 F2d 664.

An attorney is required to identify the location of a fugitive client. If he knows, an attorney must disclose the location of the client when the client is a fugitive. In such cases the attorney must disclose the location of his fugitive client to the District Attorney or the Justice Department, whichever is prosecuting.

The duty of confidentiality is imposed upon the attorney. The holder of this privilege is the client; it is not the attorney. Therefore, the attorney cannot waive it. The attorney must invoke it whenever the attorney is being compelled to provide such information that would violate the privilege. The duty of confidentiality is not absolute. There are certain exceptions tothe attorney-client privilege which relate to communications. The privilege does not apply if the client is seeking the advice from the attorney in order to commit a crime or to aid someone to commit a crime. If the client's purpose behind contacting the attorney is to learn how to commit a crime, the communication is not confidential. If it were not so, every criminal would first discuss it with their attorney and work out a flawless plan before committing the crime. Without this limitation, the attorney would not be able to turn in such criminals. If, for example, a client came into an attorney's office and said, "I'm going to kill my wife. I want to know, however, what is my best strategy for getting off." This is a flat statement that the person intends to commit a future crime; there is no privilege. The attorney should, and in fact is required, to report the person's intent to commit a crime. While an attorney must report future intended crimes by a client, an attorney cannot and is prohibited from reporting past completed crimes. Model Rule 1.2(d) and Disciplinary Rule 1.16(a)(1) hold that an attorney cannot reveal the fraud or previous activity done by client. The attorney must withdraw from representing the client in any future work that would involve reliance another on the fraudulent actions of the client. For example, assume that an attorney discovers that a client has used the attorney's advice to prepare a fraudulent contract that cheated another party. The attorney is required to withdraw from the case and representation of the client in any matters dealing with the party whom the attorney knows is relying on that contract. The attorney, however,is not permitted to explain to anyone, except the client, the reason behind the withdrawal.

The duty of an attorney to preserve a client's confidence does not extend to any communication that is relevant to the issue of a lawsuit by the client against the attorney. If an attorney is sued for malpractice based upon the manner in which the attorney handled a case, the attorney can introduce into evidence any communications with the client which show that the attorney did not commit the malpractice.

There is no privilege in the attorney-client relationship if the attorney had been hired by two people and those two people subsequently get into a lawsuit between themselves and one party wants to call the attorney as a witness. The attorney can be called by either party to testify as to what the other party told the attorney as part of the dual representation. The attorney is required to maintain a neutral relationship to the parties and testify for either or both parties.

The privilege does not apply in situations where the evidence relates to competency or intention of a client who has attempted to dispose of property by a will or inter-vivos transfer. Estate planning advice is an important issue although it does not come up that often. When it does it often deals with a testator or grantor's competency. The attorney is often the only person who actually has such knowledge about whether or not the person was competent at that time. The attorney is the one who would be testifying. The testimony is for the benefit of the client: toeither preserve the estate plan that the client wrote or to set aside an estate plan the client was incompetent to make. If the client is incompetent, the attorney is still helping the client by making sure an incompetent document is not probated or used to pass the estate. In both cases the attorney is still acting for the client and the courts tend to view this as an exception. It is a necessary exception, particularly in a situation where the testator is dead and the only person who can testify to his competency is his attorney. Without that testimony, all wills could basically be terminated. There would be no evidence to prove competency in order to create a will.

In the area of ethical considerations pertaining to secrets or information the attorney discovers, the client must consent to reveal the information if the client is going to be harmed by it. This is not information that the attorney learned directly from the client but from other sources. Nonetheless, it is in his possession and should not be disclosed without the client's consent. Again there is an implied authority that permits an attorney to use such information and to release it if it can be done for the benefit of the client. In fact, such has always been the case. Even in the attorney-client privilege, if it can help the client, there is a belief that it can be released unless specifically prohibited by the client.

Many legal ethics disputes involve the relationship of an attorney with a former client. The most common area of conflictsconcerns suits against a former client by a current client. ABA Model Code, Ethical Consideration 4-6 and the ABA Model Rule 1.9(C) require an attorney to maintain the confidentiality of a client even though the person is no longer the client of the attorney. "Once the client, always a client" stands for the purpose of confidentiality. This adage is a statement of the continuing obligation which does not cease with the termination of the relationship. If a former client has imparted confidential information to the attorney, the attorney is not permitted to oppose that former client in any matter in which the confidential information might be used. The exception to this rule is where the former attorney has received permission from the former client to represent the new client against this former client after a full consultation. Model Rule 1.9(A) and ABA Code Disciplinary Rule 4-101. In Trone vs. Smith, 1980, 621 Fed.2d 994, the Ninth Circuit Court of Appeals held that when the attorney has obtained such confidential information from a former client, such information cannot be used to the former client's disadvantage without consent following a consultation.

Regardless of whether an attorney is suing the former client or simply using privileged information to the former client's disadvantage without his consent, the attorney is going to be liable for violating the Canons of Professional Responsibility unless the attorney has the client's consent, and the consent is obtained after a full consultation as covered by Model Rule 1.9(C) and Disciplinary Rule 4-101(B)(2). To the contrary, as discussedearlier, there is no privilege of confidentiality where the attorney has an obligation to disclose such information to avoid the commission of an impending crime or the attorney is being sued by the former client or it is necessary to prove the competency of the former client in a contest of an executed estate planning document.

An attorney is not permitted to oppose a former client in a matter substantially related to the matter for which the attorney was first hired without such consent after consultation. Example: The attorney was originally hired by the former client to defend in a quiet-title action. He is thereafter barred from suing the former client in a matter involving the real property in which the title was quieted if the issue of title is involved. Where the matters are totally different, there might not be a finding of substantial relation. Whether or not an attorney-client relationship is violated is determined on a case-by-case basis. Where an attorney has been directly involved in a specific transaction, the attorney is not permitted to oppose a former client in a dispute involving the same transaction without the consent of the former client. This frequently occurs when attorneys move between law firms or withdraw from law firms and find themselves with a new client who wants to sue the old client on the same matter that the attorney had represented the old client. This can cause a lot of problems. These cases come up rather frequently simply because attorneys tend to be mobile.

Except as discussed above under Model Rule 3.7(A) and Disciplinary Rule 5-101(B), an attorney is not supposed to take a case in which it is reasonably expected that the attorney will be called as a witness unless his witness concerns only minor or factual background in the case. This prohibition is reasonable and straight forward because the attorney is testifying against his client. When the proposed testimony is of a minor nature in the case, such as background information that does not affect his client's liability, the attorney can testify, but he should have the consent of the client. Example: An uncontested will. The attorney may testify to the mental capacity of the deceased. The prohibition against attorney testimony is lifted only as to those situations where the testimony concerns fact or matter that is unopposed or uncontested; the attorney is merely laying a factual basis or the issue is not being contested.

Whenever the attorney realizes that he may be called as a witness against his present or former client on a contested matter he should withdraw and cease handling the case unless the client has agreed to the attorney's testimony after full consultation and with full understanding of the implications. It is seldom a good idea for an attorney to testify on a contested fact or item against a client in the same case for which the attorney is representing the client. To do so exposes the attorney to a malpractice action even if no professional ethics are violated.

In Britain, trial attorneys are called barristers. On their robes, barristers have a pocket in the back. The history behind the pocket is traditionally it was considered distasteful for a barrister to ask a client for money. For a barrister to discuss representing a client for a fee just wasn't done. It was not proper! In order for a barrister to be paid, he (for all barristers at that time were men), would turn his back to his client, and his client would put in the pocket the amount of compensation he felt the barrister deserved. The barrister was required to leave it to the client to decide how much money he should be paid for the work he had done. Of course, if he lost, the barrister would usually get nothing because the client of that day, as today, is generally unwilling to pay an attorney for a losing effort. To this day, barrister robes still have that little pocket in them, although today's barristers no longer rely upon the largess of their clients to determine the amount of fees they receive.

Today, under both the ABA Code of Professional Responsibility and the Model Rules of Professional Responsibility, a duty is imposed upon an attorney to reach an agreement, preferably early in the relationship, on the attorney's compensation for the services rendered. Although recommended by the ABA, it is not required that the attorney fee agreement be in writing. Many states, such asCalifornia, have enacted specific legislation or have required under their particular Canons of Professional Responsibility that the attorney have the fee agreement in writing.

An attorney should have the fee agreement in writing both for business and professional reasons. Without a written fee agreement, it is hard to prove in a fee dispute what was or was not covered. Fee disputes harm an attorney's reputation in the community and hamper developing new business. Having a written fee agreement detailing what work is covered and the compensation that will be paid will reduce fee disputes.

There are three types of fee arrangements. There is the fee for the work done by an attorney on an hourly basis, the flat rate type done for a set total fee and the contingency fee agreement. A fee agreement is supposed to be in writing. It did not used to be, but it makes a lot of sense and most state bars do require fee agreements nowadays to be in writing. The ABA model rule 1.5(B) actually requires the fee question to be determined very early in the relationship except where the attorney already has an on-going relationship with the client. In such a case, the attorney can forego a written contract, but he really should not.

Under the ABA Code Disciplinary Rule 2106 and Model Rule 1.5(A), an attorney is subject to discipline for trying to seek an unconscionable fee. There is no definition or set standard for an unconscionable fee. As such, the unconscionability of a fee is determined on a case-by-case basis as to whether or not it offends the sensibilities of the court or fee arbitrator. The court looks at a number of different factors to determine whether or not anattorney has acted unreasonably in an effort to receive more money than is merited for the amount of work done.

There are nine different factors that the court or state bar will study to determine whether or not the fee was unconscionable. These standards have been proposed by the American Bar Association and adopted by virtually every state in some form:

1.Time and labor actually performed by the attorney in the case is one of the first factors considered. In a situation where an attorney might charge $5,000 for three hours work, there begins to appear the inference that the fee charged by the attorney was too high.

2. The novelty and difficulty of the question involved is also a factor. The more novel and difficult a legal question, posed by a case, the more time and effort that will be required doing the legal research and preparation. It becomes more difficult for a client to find an attorney who is willing to undertake a novel or difficult area of law that could hurt the attorney's reputation in both the general and legal community if he loses. An example, could be a client seeking a product liability suit on a forklift. There are few attorneys with the experience and expertise in such types of product liability cases and they may charge a higher fee that is not unconscionable.

3. Whether or not working for this client will interfere with doing other profitable work of the attorney is important. While an attorney is working for one client, the attorney is not able to spend that time working for another client. Lost earnings are a factor to be considered. If the attorney has no other clients (e.g. the attorney is retired), the attorney might receive less than an attorney who is fully booked because the booked attorney might be found to have the ability to havereplaced the lost income by taking on additional work.

4. What other attorneys in the community charge for similar work is always compared to the attorney fee to determine if it is significantly higher than the norm. If an hourly rate is less that most of the other attorneys, the attorney has a good case to argue that he did not charge an unreasonable amount. A converse finding can be made if the attorney vastly overcharges from the norm for the same type of legal matters. In the past it was fairly common for the county bar association to publish fee agreements or fee rates that were being charged by attorneys in the area. That is no longer done because it to created the idea that an attorney who charged these amounts was charging fair fees. In fact, it has been held that it violates the Sherman Anti-Trust Act for attorneys to agree on a schedule of maximum fees (just like it was against the Sherman Act to agree on minimum fees). An attorney should not rely upon any fee schedules in setting a hourly rate.

5. The amount in controversy and the results that were obtained for the client. Obviously, if the attorney won $1 million for the client and the bill is only $100,000, that is a factor in determining whether or not the fee was unconscionable. If the attorney won a judgment of $100,000 and a bill of $75,000 is submitted, almost certainly the bill is going to be evaluated.

6. Time limitations are also a factor. If the attorney had to drop everything he was doing to handle a case that required immediate full effort, that is another factor to be considered because of the simple psychological pressure that was added to the normal preparation of a trial. Example: Cases that must be prepared and tried on short notice and the attorney was unable to get a continuance. The attorney must drop everything else to work solely on that case. In determining the validity ofthe fee, the psychological pressure and stress incurred in having to jump into the case right way is a legitimate factor considered in awarding a higher fee.

7. Prior relationships with the client are considered in determining the legitimacy of a fee. This is another emotional area because an attorney will often spend more time and effort on a case involving a personal relationship than the case really warrants. The attorney may be unintentionally overworking the case and thereby overcharging or not charging enough for the amount of time and effort put into the case.

8. The experience, reputation and ability of the attorney handling the case is a factor. The better qualified the attorney is, the more of a specialist, the more the attorney legitimately charges. An attorney with two Masters Degrees, an LLM in Law, a law school degree and one in Business would legitimately be able to charge more than an attorney with just a Juris Doctorate degree. Such an attorney would have his fees evaluated not against those of ordinary attorneys but against other tax attorneys doing the same type of work. A client would expect to pay more for a specialist than a general practitioner right out of law school.

9. The final area evaluated in determining whether or not a fee is unconscionable is whether the fee is a fixed fee (i.e. hourly or total) or a contingency fee. While a contingency fee can be higher than an hourly or fixed fee, it still cannot be so high as to shock the conscience of the court.

None of these factors are usually in themselves determinative on the issue of whether an unconscionable fee was charged. It is the cumulative effect of the factors that will determine if the attorney is charging a fee that offends the conscious of the court or the fee arbitrator.

Many states will allow the attorney to have an attorney fee lien on the property of the client. Sometimes the lien is limited to the settlement in a particular case. In some states it will be against all of the property owned by the client until there is a resolution of the bill. Usually in a lien situation the attorney must thereafter commence a suit within a specific period of time after the lien is filed or after conclusion of the case. In some states, the lien period for filing suit on an attorney is six months. In most states, in order to perfect an attorney lien, the attorney has to file a notice of lien in the case, and the lien stays in effect until the case is concluded. If the client wins and receives a judgment, the amount of the fees claimed by the attorney will be held in trust either by the succeeding attorney or the court until a hearing determines the correct amount of fees to be awarded to the attorney asserting the lien.

Law offices have reached the twentieth century in the aspects of collecting money. The ABA Formal Opinion 338 permits a lawyer to bill his client and allows payment by credit card. Under Formal Opinion 320, the lawyer may participate in a bar association program that enables clients to finance fees through bank loans. A client may give an interest bearing note to an attorney to secure payment of fees. This was permitted in the case of Hulland vs State Bar,(1972) 8 Cal3d. 442. Criminal attorneys in particular take interest bearing notes along with titles to their client's cars to secure payment of their attorney fees. This all has to be detailed in their fee agreement. This is also discussed in the fee agreement forms.

Another area that occasionally arises in a fee agreement is whether or not the agreement has given the attorney an interest in the litigation itself, which is improper. Under the Disciplinary Rule 5-103 and ABA Model Rule 1.8(J), an attorney cannot acquire a proprietary interest in the cause of action or the subject matter of the litigation in which the attorney is representing the client. This means if an attorney is bringing an action on behalf of a client or is defending an action on behalf of a client, the attorney cannot become a party in the suit by acquiring an interest in the subject matter of the lawsuit. The rationale behind the prohibition appears on its face misplaced. It seems that if the attorney had something to gain in the case by owning an interest in the subject matter, the attorney would be even more diligent in his prosecution. Nonetheless, that is the law, and you must comply with it.

Once an attorney enters a fee agreement with a client, the attorney is usually precluded from withdrawing from representation of that client without court approval or the consent of the client. Should a client refuse to pay attorney fees, the attorney cannot hold up services until payment is received. If the attorney is replaced by the client, the attorney cannot retain the client's files until payment for past services has been received unless an attorney lien is granted for legal fees under state law.

Any discussion of fee agreements would be incomplete without a discussion of what happens if an attorney is fired during the middle of representation of a client. If an attorney is on an hourly fee arrangement, there is no problem. The attorney wouldsimply submits the bill for the work done up to that point, and the client is responsible to pay it. If the attorney is on a flat fee, he can collect for the reasonable value of the provided legal services. An attorney on a flat rate would not be able to collect for the full amount owed under the contract because he had not completed the work and thus did not earn all of it. The attorney would get the reasonable value of the rendered legal services based on a percentage of how far along the attorney was on the case. If the attorney was 50% along in the case, he would probably get half of the agreed fee. Courts or fee arbitrators would look at it that way or they would put an hourly fee value on the work that had been done and charge accordingly. In neither event would an attorney ever collect more than he would have received under the actual fee agreement itself. In fact, if another attorney is hired the courts or arbitrators will reflect on the value of the amount of work the discharged attorney performed versus the amount of work that the new attorney had to do to complete the case. In the area of a contingency fee agreement where the attorney had been fired, the discharged attorney is entitled to recover the reasonable value of the provided legal services based on the percentage of the actual award. If the discharged attorney was to get 30% of the case and the case gets settled for $500,000, there is a $150,000 fee award and the value of discharged attorney's work is $50,000. The discharged attorney would never get more than the fee agreement stated. In addition the recovery is also based on the amount the other attorney is paid to complete the case.

Every fee agreement should have a clause that bestows attorneyfees to the prevailing party in the event of a lawsuit. The reason for this is many states will not permit an attorney to collect attorneys fees for collecting a judgment on his own case. In such states, the attorney who wins the case against the client will not be compensated for the time spent in getting the judgment. When an attorney fee clause is in the retainer agreement, the attorney can hire another attorney to get the judgment and will not be out anything when the judgment is obtained because the client will pay the attorney fees.

Some attorneys omit this provision in the hope that in the event of a client's successful malpractice action he will not receive attorney fees. That might be a good reason to not to include the clause in the fee agreement if the attorney does not have malpractice coverage or is sloppy in the manner in which he practices. In most instances, the clause will be of benefit to the attorney. In lawsuits against the client for failure to pay fees, the attorney will receive attorney fees if he hires another attorney to collect the judgment and if such clause is present in the agreement. The reason for this is many states will not permit an attorney to collect attorneys fees for collecting a judgment on his own case. In such states, the attorney who wins the case against the client will not be compensated for the time spent in getting the judgment. When an attorney fee clause is in the retainer agreement, the attorney can hire another attorney to get the judgment and will not be out anything when the judgment is obtained because the client will pay the attorney fees.

The most common exception to the prohibition against an attorney acquiring a proprietary interest in an action he is representing is a contingency fee arrangement between the client and the attorney. An attorney can enter a contingency fee agreement even though it gives the attorney an ownership interest in the case (specifically a percentage of the judgment or settlement) if the client and attorney should prevail or settle their case. A contingency agreement actually changes the attorney from an employee of the client to a co-plaintiff. A contingent fee arrangement is where the plaintiff, who is the client of the attorney, wins an award and the payment of the attorney fees is a fixed percentage of that award after the costs and expenses of the case have been returned to the attorney. If the client does not win, then the attorney gets nothing.

In some countries, contingency fee agreements are unethical. In the United States, there is nothing wrong with them. They are tolerated as long as the contingency fee is not considered to be unconscionable (where you get 50% of the case for doing 30 minutes work and not taking it to trial).

There is a lot of criticism about contingency fee cases, especially by doctors in the area of medical malpractice. They seem to feel that contingency fee cases tend to bolster the litigation. The other side is that the clients usually do not have the money to pay for a case to be prepared and go to trial. Without a contingency fee, most attorneys would not take a case pro bono and just accept the straight hourly fee if they win. It really doesn't work for the attorney. Example: In California itusually takes about five years to have a jury trial heard. Most attorneys cannot afford to carry a client for five years and then get paid on a straight hourly basis. The return is simply not large enough to warrant the wait. They would be better to charge a straight hourly fee for clients who will pay them up front.

There are certain cases in which contingency fee agreements are absolutely prohibited. The ABA, under its code disciplinary rule 2106 and its model rule 1.5(D)(2), makes it clear that contingency fee agreements in criminal cases are not permitted. In a criminal case the client is not going to get any money if he wins, so there is nothing the attorney can lien or claim for reimbursement. A contingency would not even apply in a criminal matter.

Another situation is in the family law area: an attorney is not permitted by ethical considerations and under model rule 1.5(D)(1) to get a contingency fee agreement. Example: In a divorce case the spouses had property in more than one state. There was a huge disparity between what the wife said the property was worth and what the husband said it was worth. This was a community property situation, and each spouse was presumed to own a one-half undivided interest in all property that was acquired during the marriage except by gift, devise or bequest. In this situation, a contingency fee agreement would have been very proper because of the amount of money involved and the complexity of the work. An attorney, however, cannot enter into a contingency fee agreement in a family law matter. He must instead use an hourly fee or flat rate agreement.

The ABA Model Rule 1.5(C) requires a contingency fee agreement be in writing and that the fee agreement state how the fee is to be calculated, including the percentages the attorney will get if the case is settled before trial, after trial or after an appeal. What the litigation and other expenses are to be and if they are to be deducted after the recovery and whether or not there will be deductions for expenses that will be made before or after the contingency fee is calculated.

With any kind of fee agreement, the attorney is required to give an accounting to his client, whether it be a contingency fee agreement, an hourly fee agreement or a flat fee. There still must be an accounting to determine how everything has been paid. The point to remember is that the client is responsible for paying back to the attorney all of the court costs and litigation costs that have been advanced. That will come off the top of any settlement or award. What is left will be split according to the percentage in the fee agreement.

Contingency fee agreements have always been recognized as being necessary in the legal profession in order to open the legal system to the poor. Example: A major litigation case involving products liability can cost upwards of $200,000 dollars. The cost for such a case is far beyond the ability of nearly anyone in the country to pursue on an hourly basis.

A contingency works by splitting the risks and benefits of the recovery between the attorney and the client. If the client loses a contingency case, the client is only out the cost of pursuing the case. In the same vein, upon loss of a contingency fee case, theattorney loses all of the time and effort spent on the case that could have been directed toward other profit making activities. In other words, the attorney lost the opportunity of earning fees for doing work for other clients.

Many persons have suggested that states put caps on attorney contingency fees as a form of tort reform. The groups making these proposals do so with the avowed intent of reducing the number of cases filed in the courts. These groups recognize that if the attorneys cannot receive a fee equal to the potential of lost earnings attendant to taking a case, they will not take the case on a contingency fee basis. This has been the case. Whenever limits have been placed on contingency cases, the number of cases tried in those areas has dropped because attorneys reduce the number of speculative contingency cases they take and concentrate more on the cases with a guaranteed recovery or those offering an hourly or flat fee.

Whether or not an attorney should seek a contingency fee arrangement with a client depends on the viability of the case, how long it will take to go to trial, the amount of time it will take to prepare and the financial standing of the attorney. A contingency fee case does not bring money into an office until settlement or judgment has been obtained. The attorney could wait years before getting any money from the case. For this reason, many of the largest law firms do not take contingency cases. All law firms, regardless of size, should be very selective in taking contingency cases. Sometimes it is possible for a sole practitioner to bring in one or more other attorneys as co-counsel on acontingency case. More law firms working on the case spreads both the risk and the rewards. Most attorneys, certainly most sole practitioners, lack the financial ability to handle a large contingency fee case alone. Yet many personal injury attorneys will handle relatively ordinary cases (such as auto accidents) on a contingency basis because these are relatively easy cases to develop and settle. The attorney must understand that no matter how good a case is, he should refuse unless sufficient money comes into the office to pay the bills while the case is pending. An attorney must earn a living. In the forms section of this book is a basic contingency fee agreement for use in California which can also be used with modifications to reflect the needs of various clients.

Besides contingency fee agreements, an attorney can also use a flat rate or hourly rate agreement. In a flat rate fee agreement the attorney does the work for a lump sum regardless of the amount of time spent on the case. In an hourly fee agreement, there is no cap on the total fee; the client is billed for the amount of time spent on the work.

Attorneys often require a retainer with an hourly fee agreement. He may also want a retainer with a flat rate fee agreement when the payments are to be made in installments rather than in a lump sum at the start. A retainer is a deposit to assure representation by an attorney. There are two types of retainers that an attorney can obtain from a client. A refundable retainer is not earned by the attorney until the attorney has done work for the client. The rate at which the retainer is used is determined by thefee agreement. A fee agreement that charges $150 per hour absorb a $600 retainer after four hours of work by the attorney. Whenever an attorney agrees to represent a client on an hourly basis or a flat rate payable in installments, the attorney should get a reasonable retainer at the start. The fee agreement should contain a clause which requires that the client maintain a fixed minimum in the account. If the fee agreement calls for a $500 retainer, once the attorney bills for $500 of work the client should contribute $500 to the retainer account to maintain the required balance. As a result the attorney will always have a minimum amount in the retainer account to cover future work.

It is important to get a retainer at the start. If a case is not important enough for a client to come up with a retainer, the attorney should consider not taking the case. This is different from a contingency case where the attorney expects not to be paid regardless of whether the case is won or lost. With an hourly or flat rate fee the attorney expects to be paid regardless. If the client is unable or unwilling to pay a retainer, then the client may be unable or willing to pay the fee after the case is over. It is important to ascertain at the initial interview whether or not a potential client is the type who will not pay the attorney after the case is over. The best way to do so is to ask for a retainer and see how the idea is received. The advantage of using retainers for an attorney is that they lessen fee disputes after the case is over. Most fee disputes occur after a case is completed and the attorney sends the final bill to the client for payment. At this point, the client no longer needs the attorney and is more likelyto look for a reason to avoid paying the bill. If the bill had already been paid via a retainer, the likelihood of a fee dispute is greatly diminished. Studies show that attorneys who require their clients to pay retainers and maintain the retainers by systematic deposits have a lower number of fee disputes than attorneys who do not use retainers.

Following this section are sample attorney fee agreements: A basic hourly fee agreement for litigation, a flat fee agreement for estate planning, a flat rate fee agreement for litigation and a flat rate agreement for family law representation. These forms can be modified to meet the needs of clients in most states.

One area of potential ethical concern for attorneys is the rendering of financial assistance to the client during the course of litigation. Under both ABA Code Disciplinary Rule 5-103(b) and Model Rule 1.8(e) an attorney may provide a limited amount of financial assistance to a client in pending litigation. This rule is strictly construed. An attorney is permitted to advance court costs and litigation expenses on behalf of the client. This is often done, even on a hourly basis just to get the case going and the client is billed for the fees later. The attorney is not permitted to advance funds for the client's living expenses or the payment of expenses not related to the preparation of the case.

In the matter of a contingency fee case, the attorney will usually advance the costs and expenses simply because the clientdoes not have the ability to pay the money beforehand. Legally, the client is supposed to be responsible for repayment, but the attorney can always forgive that obligation. Model Rule 1.8(e) is realistic on this point and provides that an attorney may advance court costs and litigation expenses and may make the repayment by the client contingent on the outcome of the case. That may be the only way the attorney will get a contingency fee case because most people simply do not have the money to pay for a large case to be taken to trial. For most persons, the only way their cases will go to trial is if the attorney agrees to take it on a contingency basis. An attorney taking a contingency fee case may do so with the understanding that he may waive those expenses and costs in the event the case is lost. In exchange for taking a contingency fee case, the attorney is able to recover a lot more than he would have received on an hourly fee agreement. That is the basis of a contingency fee agreement.

Under Model Rule 1.8(e)(2), an attorney is allowed to pay the court costs and litigation expenses incurred in representing an indigent client. There was no similar provision in the old ABA code. Under both the ABA Code and the Model Rules, a lawyer is subject to discipline for rendering any other kind of financial assistance to the client in any litigation under Disciplinary Rule 5-103(B) and Model Rule 1.8. The reason for this is that state bars do not want attorneys buying cases. If the attorney starts giving money to the client to keep, he is in essence buying the case. If allowed, clients would be selling their causes of action to attorneys rather than seeking attorneys to get fair representation. As a result, medical payments, cost of living advances, etc. are illegal under the Canons of Professional Responsibility for most states.

There is a potential tax trap for attorneys advancing client costs. The Internal Revenue Service (IRS) is training auditors to examine law firms to see how advanced costs are treated. There are two methods usually used by attorneys for treating advance client costs. The IRS claims both are wrong. As a result, many law firms now find themselves facing serious tax liabilities for their tax treatment of advance client costs.

For the cash basis law firm, advance costs have usually been deducted in the year paid as ordinary business expenses. From any judgment or settlement received in the case, the law firm would take the repayment of the costs as ordinary income. While this seems reasonable, the IRS states that is the wrong method to employ as regards advance costs.

The second approach used by many law firms (that is also rejected by the IRS) is to treat such advance costs as a loan to the client. The IRS claims that advance costs are not loans to the client and therefore are not deductible to the law firm. The IRS claims that since the advance costs are not loans there is no business deduction for the advances when made, and there is no income to the law firm when the costs are repaid to the law firm. If the client fails to pay the law firm for the advance costs, the attorney can claim the costs as a bad debt.

The IRS position is that advance costs can only be deducted ona law firm's tax return as a bad debt. The IRS will allow attorneys to come into compliance without penalty or interest by notifying the IRS of a change in accounting method within 180 days of the start of the filer's tax year. The result is that the attorney will have to report the deducted client costs for the previous tax years as income, but they can be spread over a four to six year period.

The IRS is serious in auditing attorneys concerning payments to clients. Under its Market Segment Specialization Program, the Audit Division is specifically directed to review attorney's accounting procedures for advance costs. It is envisioned that sole practitioners and small law firms will be the largest source of audits in this area.

An attorney cannot acquire literary or media rights as payment for attorney services from a client until the matter relating to those literary or media rights is entirely concluded. This prohibition is stated in Disciplinary Rule 5-104(B) and Model Rule 1.8(d). State bars do not want the attorney to be in the position of generating such publicity for the case that it will engender bad feelings or affect the client's own legal position. Consent of the client is irrelevant. The attorney is simply banned from doing it. If the attorney were to get such prior consent, it would probably show that he intentionally tried to avoid the act and it would actually work against the attorney. Such prior consent would evidence an intentional attempt to subvert the canons of professional responsibility and lead to disciplinary action against the attorney regardless of the client's feelings on the matter.

The fact that an attorney cannot acquire media or literary rights in a case does not mean that the client should not sell those rights. Sometimes, the revenue from the sale of such rights is the only source of payment for the legal services. In the O.J. Simpson murder trial, Mr. Simpson wrote a book and put out an audio tape to help raise money for his defense. All of which was proper. The rights in the book and the tape belonged to Mr. Simpson, and the attorneys did not acquire an ownership interest in them even though the proceeds from them will be used to pay the legal fees.

There is an exception to the rules against acquiring media and literary interests from a client. This exception involves literary property in which the attorney fee consists of a share of that property when that property is not a subject of the litigation. Example: If an attorney is representing a client in a criminal matter. As part of the fee the client wants to give him an interest in a series of books he had written that were unrelated to this case. This arrangement might be permitted.

A potential area of conflict arises where the attorney fees are being paid by a third party. This issue often arises in an insurance situation. When an insurance company hires an attorney to handle an insured person's case, is the company or the insured the attorney's client? The question becomes: Does the attorney owe professional duty to the insurance company who pays the attorney or to the insured? In another situation, the attorney might have been hired by a family member to represent a son or daughter or otherfamily member. In any situation arising in this area, the attorney must comply with Model Rule 1.8(f) or ABA Code Rule 5-107(A), whichever is applicable under state law. First, the client must consent to the payor retaining the attorney. Then, after consultation with both the client and the person paying the bill, both must understand that the attorney's allegiance is to the client only. The person paying the bill must be made to understand that the person paying the bill will not interfere with the attorney's independence or representation if the attorney takes the case.

Most importantly, the person paying the bill must understand that there will not be any compromise or release of a client's confidential information to the person paying the bill without the client's consent. This is similar to the position of an insurance company because such confidential information cannot be released to the insurance company either. When all rules are met, the attorney can have proper representation of a client with the bill being paid by someone else.

Attorneys often refer cases to other attorneys. Cases are referred for several reasons. The attorney may not handle a particular type of law or he may be too busy to take a case. An attorney who takes a referred case is not permitted under the ABA rules to pay a referral fee to anyone, including an attorney who does not work on the case.

If another attorney works on the case, the attorney in charge of the case can split fees with that attorney if he has consent ofthe client. In fact, an attorney is supposed to get the consent of the client before bringing any additional attorneys into the case. In a fee splitting situation, the total fee paid to all of the attorneys must still be reasonable and the client must not object. Any fee splitting must comply with the requirement of ABA Code Disciplinary Rule 2107 that the fee paid be in proportion to the actual work and responsibility done by the attorney. Under Model Rule 1.5 the split may be in proportion to the services performed or in a different proportion if the client consents and all of the attorneys agree to be responsible for the matter being handled.

NOTE: A fee agreement should comply with the law of each state in which the attorney is licensed to practice. Some states, such as California, require an attorney to state in the fee agreement whether or not he carries malpractice insurance. A sample clause could read,

"The attorney is self-insured for malpractice claims." or

"The attorney carries $ in malpractice insurance for errors and omissions with (name insurance company)."

Following are various fee agreements for use in California. With minor changes, they could also be used in other states in accordance with their state laws.

end of sample view of chapter

There are two questions facing any attorney when a client comes into the office. The first question is rather straight forward and obvious: Does the attorney or law firm want to take the case? Unless the answer is "yes," there is no reason to continue to the next question. The second question is sometimes more obscure: Can the attorney or law firm take the case? There are certain situations when an attorney cannot take a specific type of case or a specific person or entity as a client. There are times when an attorney or law firm is specifically disqualified from acting as an attorney for certain clients. When an attorney represents a client, for which the Canons of Professional Responsibility mandate automatic disqualification, the attorney may be disciplined and any judgment obtained by the attorney may be set aside. Such improper representation of a client may result in a malpractice award against the attorney in addition to disciplinary action by the state bar.

Disqualification of an attorney involves whether or not the attorney has acquired confidential information from a client that may be used against that client by another client of the attorney. The issue of disqualification does not require that the two clients of the attorney be engaged in litigation against each other. The issue is the possibility that an attorney may give one client confidential information received from another client.

A key factor in disqualification is whether or not confidential information has been given to the attorney. Where the information given to the attorney is not expected to be confidential, an argument for the disqualification of the attorney based on such information being given to an opposing client is seriously eroded. The Second Circuit of Appeals in Allegart vs. Perot 1977, 565 F.2d. 246 held that unless a former client had a reasonable belief that information given to an attorney would not be given to another attorney, the former client could not object to the attorney's representation of the other client. In this case, the former client was aware that information being furnished to the attorney was going to be given to other clients of the attorney. The Court was simply holding that since the client was aware of this fact when furnishing the information, the client was manifesting he had no expectation of confidentiality. A similar position was taken by the Ninth Circuit in Christensen vs. United States Dist. Court 1988, 844 F.2d 694. The Ninth Circuit denied a disqualification motion against a law firm representing a management group that operated a corporation. The law firm had acquired information from the corporation through its representation of the management group as it operated the corporation. There was now a lawsuit between the corporation and the management group. The court found there was no expectation of confidentiality for the information exchanged between the corporation and the law firm as it related to the management group.

Where a current or former client is able to show thatinformation given to the attorney was of a confidential nature, the issue of disqualification of the attorney immediately arises. To address that situation, the courts have developed several tests and state bars have adopted rules of professional conduct which are hereinafter discussed.

An interesting area under the conflict-of-interest purview is that of the imputed disqualification. Disqualification occurs in this area not because of what an attorney may have done but because of what another attorney in the office may have done. Under the imputed disqualification doctrine Disciplinary Rules 5-105 of the Model Code and Model Rule 1.10 mandated that if an attorney in a law firm is disqualified from representing a client, all of the attorneys in that firm are disqualified from representing that client. Under this imputed disqualification rule, the disqualification extends to the entire firm.

The word "firm" dictates not only the private law office but attorneys who work for corporate legal departments or legal services firms or legal staffs of labor unions or governmental law departments. Wherever the attorneys work together and would be able to share the same information. Simply sharing office space is not sufficient to make a relationship between several attorneys of a firm. In determining whether or not a firm relationship exists, the areas that are determinative are:

a.Do the attorneys hold themselves out as doing business as a single unit such as a partnership, corporation, or limited liability company?

b.Do the attorneys frequently consult with each other, as opposed to other attorneys in general? An attorney meeting other attorneys for lunch occasionally does not particularly make a firm relationship. In contrast, attorneys meeting every day and during business hours creates a different impression.

c.Do the attorneys refer cases among each other?

d.Do the lawyers associate within the group to work jointly on cases?

These are areas that have been considered to be important in determining whether or not there is actually a firm relationship. This has been discussed in the 1990 draft of the Restatement of Law Governing Lawyers, section 203.

The issue of imputed disqualification also arises where an attorney moves to a new law firm that seeks to sue a former client of the attorney. ABA Model Rule 1.9(b) states that a law firm may not represent a client in a legal matter if it has an attorney in the firm who has represented the opposing party in the same or substantially related matter and the attorney had acquired information that was protected under Model Rules 1.6 and 1.9(C) unless the former client consents to the consultation. Example: Attorney Smith leaves law firm ABC where he had represented client Jones. He goes to work for law firm DEF. Law firm DEF cannot sue Jones in any lawsuit that relates to the matter that was being handled by attorney Smith even though another DEF attorney would be handling the case. This disqualification can be waived by former client Jones. In reality, it is rare for a former client to give permission to represent an opposing party.

Whereas Model Rule 1.9 deals with disqualification of alawyer's new firm, Model Rule 1.10(b) deals with disqualification of the lawyer's former firm. Under Model Rule 1.10(b), the attorney's previous firm is disqualified from representing a client in a suit against a former client if:

1. It is a matter that is substantially related to one in which the previous firm had previously represented the former client.

2. There are attorneys remaining in the previous firm who have access to the information that was supplied to the attorney who left.

Example: Attorney Jones left firm A and joined firm B. Attorney Jones had represented client Smith. When attorney Jones left firm A, he left all of his files regarding client Smith with firm A. Since those files have been left with firm A and are still available to firm A, that firm is privy to information protected under rules 1.6 and 1.9(C). As a result, firm A is precluded from instituting any lawsuits against former client Smith that are substantially similar or related to the matters in which attorney Jones had represented Smith. If attorney Jones had taken all that information upon leaving, the firm would not have any of this privileged information in its possession and would be permitted to take the lawsuit in question against former client Smith.

Such disqualification can be waived, but it becomes difficult and technical as to where the information is and who has it. It also becomes appropriate to prove whether or not the attorneys actually had that information at one time. If attorney Jones had taken that information when leaving firm A, but attorneys for firm A had reviewed the confidential information, the firm still wouldbe disqualified even though it no longer had the physical evidence of the confidential information. It is really a matter of whether or not the former firm has or had access to this confidential information. If the law firm has or had such access to the confidential information, it is barred from suing the former client. If the former law firm does not have such information or knowledge available to it, the law firm is not disqualified from maintaining a suit and representing an opposing party against the former client. The determination of disqualification of the law firm really depends upon whether or not this information is or has been available to it.

Disqualification issues have arisen in relation to attorneys who have been government employees or who are entering government service from private practice. In addition to the Model Rule of Professional Responsibility and the Model Code of Professional Responsibility, there is also the Federal Ethics in Government Act, 18 U.S.C. Section 207-208, that governs federal employees who have left government service. This act governs what type of work certain federal employees, such as attorneys, can do for a number of years after they have completed federal service. Just as a private person has a right to expect that its attorney will not use confidential information obtained in the attorney-client relationship against the interest of the client, the government, including state and federal agencies, has the right to expect their former attorneys to preserve their confidential information underModel Rule 1.11.

Both Model Rule 1.11(a) and Disciplinary Rule 9-101 preclude an attorney leaving government service and entering private practice from taking a case in a "matter" on which the attorney had participated both "personally and substantially" while working for the government. The government, the same as any former client, can consent to the attorney taking the case, but as a practical matter the government virtually never gives such consent.

A former government attorney is precluded from taking only those matters he had previously handled. Model Rule 1.11(d) defines "matter" as being that which involves "any judicial or other proceeding, application, request for a ruling or other determination, contract, claim or controversy, investigation, charge, accusation, arrest, or other particular matter involving a specific party or parties." By "personally and substantially" is meant actual work done by the attorney that was material to the case development and not of a minor, casual, trifling or supervisory manner.

Once a former government attorney is disqualified from working on a case against the government under Model Rule 1.11(a) and Disciplinary Rule 9-101, all of the attorneys associated with the firm are also disqualified unless:

A. The disqualified lawyer is "screened off" from the attorney or attorneys in the firm who are handling the case. This provision is to assure that the disqualified attorney is not in position to communicate with the attorney or anyone else actually handling the case and therefore be able to communicate the confidentialinformation.

B.The disqualified attorney must not receive any portion of the fee earned in the case. Model Rule 1.11 states the disqualified attorney's compensation cannot be "directly related. . . to the fee in the matter in which the attorney is disqualified." The scope of this provision is to prevent the disqualified attorney from directly benefiting from the representation and thereby creating a monetary incentive for the attorney to violate the professional duty to maintain the client confidences.

C.Written notice is required to be given to the government so that it can assure the compliance of the above requirements.

If the above requirements are met to the satisfaction of the government or to the court, a law firm with a disqualified attorney may undertake representation of a client in a case involving the government.

The use of a disqualified attorney who has information obtained while working for the government is covered by Model Rule 1.11(b); the Model Code does not have an applicable provision. An attorney who, while working for the government, receives confidential information about a person must not after leaving government service represent a client in an action against that person where that confidential information may be used. The information applicable in this situation is limited to only that information which has actually been received by that attorney. There is no imputation of knowledge or information to the attorney which might be known or in the hands of other government attorneys. Model Rule 1.11(e) defines confidential information as that information which the government had obtained and which is notavailable to the public and which the government either has a privilege not to reveal or is prohibited by law from revealing. If an attorney is disqualified, then all of the attorneys in the firm are likewise disqualified from taking the case unless the former government attorney is screened off from the case and is not apportioned any part of the fee earned in the matter.

An interesting variation of the above occurs when a private attorney enters government service. Under Model Rule 1.11(c)(1), when a private attorney enters government service, he is prohibited from participating in any matter which he had substantially and personally participated in private practice. This prohibition does not apply when the attorney is the only one authorized by statute to act for the government in that matter. There is no similar requirement under the ABA Model Code.

Example: An attorney prepared an environmental report for a client and then went to work for the County Counsel's Office. The attorney would normally be disqualified from working on the report because of the prior relationship with the former client. If the attorney was the only attorney assigned environmental matters, the attorney could still handle the matter.

There is a duty of undivided loyalty owed by every attorney to a client. By its very nature, an attorney's duty of loyalty cannot be divided without incurring the ethical obligation to withdraw from further representation of one of the parties. Canon 6 of theABA's Canons of Professional Ethics published in 1908 originally defined an attorney-client conflict of interest as existing when: "a lawyer represents conflicting interests when, in behalf of one client, it is his duty to contend that duty to the other client whose interest requires him to oppose." The context of this position has been restated in the Model Rules under Rule 1.7 "A lawyer shall not represent a client if the representation .... will be directly adverse to another.." and Rule 1.9 "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. The ABA Model Code of Professional Responsibility Disciplinary Rule 5-101 similarly states, "Except with the consent of his client after full disclosure, a lawyer shall not accept employment if the exercise of his professional judgment on behalf of the client will be or reasonably may be affected by his own financial, business, property or other personal interests."

An attorney's duty to maintain client confidences survives the termination of the attorney-client relationship under both Model Code Ethical Consideration 4-6 and Model Rule 1.6. The extent of the scope of this duty has been defined by case law. In T.C. Theater Corp. vs. Warner Bros, Pictures, Inc. 1953, 113. F. Supp. 265, a substantial relationship test was first proposed to insure the protection of client confidences. The court stated that the finding of a substantial relationship between the cases of the two clients creates an irrebuttable presumption that the attorney had received confidential client information during the former client'srepresentation.

In a situation where there has been successive representation of clients with potentially adverse interest, the greatest threat to the imposed duty of loyalty is that of the loss of client confidentiality. In the situation where a former client seeks to have an attorney disqualified from serving as counsel to a successive client in litigation adverse to the interests of the former client, the governing test is whether there is a "substantial relationship" between the antecedent and current representations.

The "substantial relationship test" is a balancing test between the freedom of the succeeding client to be the client of choice and the interest of the former client to insure that client confidences previously disclosed in the attorney-client relationship will not be used against the former client to the advantage of the succeeding client. In such a situation, it is assumed by the courts that access to the privileged information by the attorney is presumed and as such disqualification is mandatory and will in fact extend to the entire firm of the prior attorney. Rosenfeld Const. Co. vs. Superior Court 1991, 235 Cal. App.3d 566. In Henriken vs. Great Am. Sav. & Loan 1992, 11 Cal.App.4th 109, the court stated, "Where an attorney is disqualified because he formerly represented and therefore possesses confidential information regarding the adverse party in the current litigation, vicarious disqualification of the entire firm is compelled as a matter of law." There is a split among the Second, Seventh andNinth Federal Circuits concerning application of the substantial relationship test.

The Second Circuit in Government of India vs. Cook Indus. 1978, 569 F.2d 737 held that for disqualification to occur the issues present in both of the clients' cases must be so similar in nature that they are essentially identical. The Second Circuit requires a "patently clear" relationship between the issues of the cases of the past and current clients handled by the attorney before ordering a disqualification. Under this test, the court may permit an attorney to represent a new client who may be pursing a legal action against a former client if the prior representation of the former client had no "substantial relationship" to the existing matter being handled by the attorney.

The Seventh Circuit has created a three-part test to determine if the past and prior representations are "substantially related." In Westinghouse Elec. Corp. vs. Gulf Oil Corp. 1978, 588 F.2d. 221 the court held that to determine the representations were substantially related, the court should:

1.Make a factual reconstruction of the scope of the prior legal representation. The court should determine what the attorney was retained to do for the client and what the attorney actually did in the representation.

2.Make a determination as to whether it is reasonable to infer that confidential information claimed to have been given to the attorney is the type which would have been given to a lawyer representing a similar client in such a matter.

3.Make a determination as to whether the claimed confidential information is relevant to the pendinglitigation between the past and former clients.

By using this test, the Seventh Circuit believes a court will be able to determine whether or not there is a substantial relationship between the two cases. This test was considered acceptable by the Fifth Circuit also in Duncan vs. Merrill Lynch, Pierce, Fenner & Smith 1981, 646 F.2d 1020.

The Ninth Circuit has developed its own tests for substantial relationship. In Trone vs. Smith 1980, 521 F.2d 994 the court adopted a more liberal definition than either the Second or Seventh Circuits. The Ninth Circuit held that "a substantial relationship is present if the factual contexts of the two representations are similar or related." The Ninth Circuit does not require an identical or nearly identical relationship of the issues as does the Second Circuit. Nor does the Ninth Circuit require a court to make the separate determinations of the Seventh Circuit's test. The Ninth Circuit approach is gaining prominence in the nation because it is the easiest to understand and follow. Under the Ninth Circuit approach, an attorney is disqualified from representing a client against a former client in any action similar or related (even though not identical) to the previous representation of a client without that other client's consent.

Where an attorney's conflicting representations are occurring simultaneously, both the attorney's loyalty and the governing test are different. In this situation, a substantial relationship test is different in that confidentiality is not the issue but rather attorney loyalty becomes the operative element. The courtstraditionally have a more stringent test on conflicts arising from dual representation than that of succeeding representation. It is understood that even though simultaneous representations may have nothing in common with the actions currently ongoing between the attorney's clients and no risk exists that confidences from one client can be used against the other client, nonetheless, disqualification is required. In fact, in nearly every instance dual representation of adverse clients will result in per se or automatic disqualification. An attorney's duty to dual representation was covered in Developments in the Law: Conflicts of Interest in the Legal Profession, 94 Harv.L.Rev. 1296-1302. "With rare and conditional exceptions, the lawyer may not place himself in a position where a conflicting interest may, even advertently, affect, or give the appearance of affecting, the obligations of the professional relationship..."

The rationale behind the automatic disqualification of an attorney for dual representation is grounded on two ideas. The first is that an attorney should avoid the appearance of impropriety. Even though no client confidences may be at risk through dual representation of clients (such as the attorney actually not representing either client in a suit against the other) the appearance of impropriety exists so as to bring disrepute upon the legal profession. The second reason is more practical in its basis, the preservation of loyalty. It is felt that once a client learns that the attorney is representing the opposing party, even on an unrelated matter, the client'sconfidence and level of trust in the attorney has been compromised. The mandatary rule requiring the disqualification of an attorney based upon dual representation is founded on the belief that an attorney cannot serve two masters. Jeffry vs. Pounds 1977, 67 Cal.App.3d 6 defined an attorney's duty not to engage in dual representation as follows:

"A law client is likely to doubt the loyalty of a lawyer who undertakes to oppose him on an unrelated matter. Hence his decisions condemn acceptance of employment adverse to a client even though the employment is unrelated to the existing representation....

The strictures against dual representation of antagonistic interests are far broader, they arise without potential breaches of confidentiality....

So inviolate is the duty of loyalty to an existing client that not even by withdrawing from the relationship can an attorney evade it."

Truck Ins. Exch, vs. Fireman's Fund Ins. Co, 6 Cal.App.4th 1050 referred to the dual representation rule as the "hot potato" rule. The court stated:

"The principle precluding representing an interest to others of a current client is based not on any concern with the confidential relations between attorney and client but rather on the need to assure the attorney's undivided loyalty and commitment to the client."

The court stated the effect of the disqualification rule was to cure dual representation conflicts by the rule itself severing the relationship with the pre-existing client. The court was specific in stating that the disqualification could not be avoided by an attorney unilaterally dropping a client.

The California Supreme Court laid down the attorney duty of loyalty in its decision, Anderson vs. Eaton 1930, 211. Cal.113, asbeing as follows:

"One of the principal obligations which binds an attorney is that of fidelity, maintaining inviolate the confidence reposed in him by those who employ him, and at every peril to himself to preserve the secrets of his client. This obligation is a very high and stringent one. It is also an attorney's duty to protect his client in every possible way and it is a violation of that duty for him to assume a position adverse or antagonistic to his client without the latter's free and intelligent consent given after full knowledge of all the facts and circumstances. By virtue of this rule an attorney is precluded from assuming any relation which would prevent him from devoting his entire energies to his client's interests. Nor does it matter that the intention and motives are honest. The rule is designed not alone to prevent the dishonest practitioner from fraudulent conduct, but as well to preclude the honest practitioner from putting himself in a position where he may be required to choose between conflicting interests, or be led to attempt to reconcile conflicting duties, or be led to attempt to reconcile conflicting interest, rather than to enforce to their full extent the rights of the interest which he should alone represent."

Under the duty of loyalty, an attorney is forbidden to engage in any act that would interfere with the attorney's duty to dedicate all energies to the client's interest.

A question of disqualification may arise in the situation where the attorney is asked by the client to make an evaluation of the client's affairs and to furnish that evaluation to a third party. This situation often arises in the sale or transfer of real estate where the seller asks the attorney to give a title opinion to the buyer. The situation also arises where the attorney is asked to give an opinion of the debts and strengths of a business to an accounting firm for inclusion in the annual report. Under these fact scenarios, the determining factor is that the client is the person or entity whose affairs are being evaluated, not the affairsof a third party.

Model Rule 2.3 has been adopted to govern the above situation. There is no applicable provision under the ABA Model Code. Under Model Rule 2.3, an attorney is permitted to evaluate a client's affairs and report them to a third party when:

(1) The attorney has a reasonable belief that the evaluation of the client's affairs is compatible with the fiduciary duties owed to the client, and

(2) The attorney releases such information to the third party only after consultation and informed consent of the client.

The ordinary rules of confidentiality, to the extent not needed to be invaded in connection with the report of an evaluation to be given to a third party, remain in effect against the attorney under Model Rule 2.3(b). Since it is the client who authorizes the attorney's release of a report or evaluation to a third party, the client has complete authority to limit the scope of the evaluation or the sources of information to be used by the attorney in making the evaluation. The attorney should describe any material limitations that were encountered in making the report. An attorney making a client evaluation to be furnished to a third party may owe that party a duty of due care. The attorney may be liable for negligence to that third party for having negligently prepared a report on the client's affairs upon which the third party relied and acted to that party's detriment.

A conflict of interest may be created between an attorney and a client if a legal malpractice claim, indemnity claim or claim forsanctions is asserted against the attorney arising as a result of representation of the client. The person or entity bringing the disqualification action can be the client, an adversary or even a third person. An adversary may bring the disqualification motion as a tactical aspect of the case. In Schenck vs. Hill, Lent & Troescher 1986, 530 N.Y.S.2d 486, an attorney was disqualified by an adversary because a claim for contribution in legal malpractice had been filed against the attorney. The claim against the attorney may be based upon potential liability or actual liability.

Various types of relief can be sought against the attorney which would create a conflict: Damages as in United States vs. Birrell 1968, 286 F.Supp. 885, discipline as in The Florida Bar vs. Ward 1985, 472 So.2d 1159, or disqualification as in Castell vs. Kemp 1985, 332 S.E.2d 528 and Cook vs. Cook 1983, 559 F.Supp. 216.

A recent case in which the prosecution had the criminal defendant's attorney disqualified occurred in New York by the Federal prosecutors against John Gotti. In that case, the prosecution had the defendant John Gotti's attorney disqualified because the prosecution stated that it might call the defendant's attorney as a witness even though the defendant wanted to retain the attorney to represent him.

A legal malpractice, whether potential or actual in nature, creates a conflict between the attorney and the client. In this situation, a loss of confidence can occur in the client's mind in addition to an impairment of the attorney's independent judgment. In any situation where a claim is being asserted against theattorney, the attorney may develop a defensive attitude. As a result, the attorney may become more interested in protecting himself from a monetary or disciplinary judgment than protecting the interest of the client. The attorney may no longer be an aggressive advocate for the client but rather may become more timid or cautious in his representation. It is recognized that the potential conflict of interest caused by a malpractice claim is a legitimate ground for an attorney to seek withdrawal from a client's representation, Bailey vs. Martz 1986, 488 N.E.2d 716.

In almost all cases, it is better for the attorney to withdraw from a case once a claim for malpractice has been filed related to the representation of the client. Even if the client consents to the continued representation, it is usually not a good idea. From the point of time that the claim is filed against the attorney, all subsequent acts and representations by the attorney will be subject to greater scrutiny to assure that the attorney has adequately represented the client. Normal tactical decisions may be challenged and claimed as having been taken to protect or limit the attorney's liability and not for the benefit of the client. In this situation, every decision subsequently taken by the attorney that fails to yield a benefit might be used against the attorney in furtherance of the malpractice claim. It is a better practice for an attorney to withdraw from a case once a malpractice claim has been filed against him.

The American system of justice has been labeled that of an adversary system. The adversary system is based upon both parties to a dispute presenting their arguments before an independent trier of fact and having a decision rendered. The adversary system is not the only method of justice used in the world. In China, the defendant's attorney is assigned not to represent the defendant but the state's interest. The Chinese attorney's duty is to explain to the defendant what he has done wrong and to teach the defendant how to obey the law in the future. While a Chinese attorney may argue for leniency in the sentence for a defendant, the attorney does not argue that the defendant did not commit the act alleged. The Chinese system is entirely different from that used in the United States; yet it covers nearly five times the number of citizens as that of the United States system.

The judicial systems in the Western World, however, use some form of an adversary system. The American system is derived from the English Common Law. Today, most of the law in Europe, South America and India is based upon the Napoleonic Code. The major difference between the English Common Law and the Napoleonic Code is the presumption of guilt or innocence. Under the English system, a defendant is presumed innocent until proven guilty beyond areasonable doubt. The Napoleonic system is the opposite. In the Napoleonic system, the defendant is presumed guilty until the defendant proves otherwise. It is recognized by those countries using the Napoleonic system that it is usually more difficult to prove a non-fact than a fact. It is often harder to prove that some one did not say or do something that to prove that the person actually said or did it. The Napoleonic system utilizes more preliminary hearings and greater care is made in filing a charge than in the English system because of this burden on the defendant to prove his innocence.

The adversary system is premised upon the fair and equal ability of each side to be able to develop a case and to present their position and contentions to an impartial adjudicator of the facts. The Model Code's Ethical Consideration 7-19 states, " An adversary presentation counters the natural human tendency to judge too swiftly in terms of the familiar that which is not yet fully known. . ." In the adversary system critical importance is placed upon the impartiality of the judge. The judge does not search for the law or marshall the facts. For a judge to do so (in addition to the judge's responsibility to apply the law to the facts presented while determining their accuracy and significance) would destroy the impartiality of the judge, the very hallmark of the adversary system.

In order for the adversary system to function as it isdesigned, an attorney is required to represent the client zealously to the limits permitted under the law. The very purpose of the attorney is to present all of the arguments, contentions and beliefs of the client to the trier of the action so that full and complete consideration can be made on them before a decision is rendered. Model Code Ethical Consideration 7-19 defines the duty of a lawyer to the adversary system as follows:

"Our legal system provides for the adjudication of disputes governed by the rules of substantive, evidentiary and procedural law. An adversary presentation counters the natural human tendency to judge too swiftly in terms of the familiar that which is not yet fully known. The advocate, by his zealous preparation and presentation of facts and law, enables the tribunal to come to the hearing with an open and neutral mind and to render impartial judgments. The duty of a lawyer to his client and his duty to the legal system are the same: to represent his client zealously within the bounds of the law."

Rule 3 of the Model Rules states that a lawyer, "should act with commitment and dedication to the interest of the client and with zeal in advocacy upon the client's behalf." The comment under Rule 3 makes it clear that the duty to represent a client zealously extends only to proper measures, " a lawyer is not bound to press for every advantage that might be realized for a client" but rather "may take whatever lawful and ethical measures are required to vindicate a client's cause."

It is the very basis of the adversary system that the attorney acts as an advocate. The very purpose of such active advocacy is to keep the decision maker's mind open so that an impartial judgment may be rendered on both the facts and the law. An attorney mustlimit advocacy to lawful and legitimate means. The attorney should not, in representing a client, engage in abusive practices such as ignoring local customs or the exercise of professional judgment in areas that do not affect the client matter. Where an attorney's personal feelings, scruples or morals will effect the representation of a client, the attorney should seek withdrawal from the matter.

An attorney is an advocate for the client and therefore must present defenses and positions for the benefit of the client. An attorney's advocacy, however, does not extend to filing a frivolous action or raising a frivolous defense in a proceeding. Under both Disciplinary Rule 7-102(A)(1),(2) and Model Rule 3.1, an attorney can be disciplined for taking a frivolous position on an issue in a proceeding. Federal Rules of Civil Procedure, Rule 11 permits a judge to impose sanctions against an attorney for filing pleadings and motions. Ethical Consideration 7-4 under the Model Code states:

"The advocate may urge any permissible construction of the law favorable to his client, without regard to his professional opinion as to the likelihood that the construction will ultimately prevail. His conduct is within the bounds of the law, and therefor permissible, if the position is supported by the law or is supportable by a good faith argument for an extension, modification, or reversal of the law. However, a lawyer is not justified in asserting a position in litigation that is frivolous."

An attorney can be disciplined by fines or disciplinary actions up to disbarment for taking a frivolous position.

Discovery abuse is one of the greatest sources of frivolouscomplaints against attorneys. Under both Disciplinary Rule 7-102(A)(1) and Model Rule 3.4(d), an attorney may not make a frivolous discovery request, Roadway Express, Inc. vs. Piper 1980, 447 U.S. 752. Nor may an attorney refuse to take reasonable steps to comply with a proper discovery request made by the opposing party. Under Federal Rules of Civil Procedure section 37(b), an attorney who abuses discovery procedures may be subject along with the client for fines and other sanctions.

The accepted definition of a frivolous position is one that cannot be supported by a good faith argument under the existing law and that cannot be supported by a good faith position for changing the law. An action or position taken solely to harass and maliciously injure another person is by its very nature frivolous, under Disciplinary Rule 7-102(A)(1). Under the Model Rule 3.1, an attorney is not subject to discipline for taking a frivolous position by not fully substantiating all the facts prior to taking a position or before uncovering all evidence for the position or even by taking a permitted position while possessing the belief that it will not ultimately prevail.

A specific exception to the frivolous position prohibition exists in the criminal defense area. Under Model Rule 3.1, a criminal defense attorney may conduct a defense in such a manner as to require each element of the crime to be proven beyond reasonable doubt without being found to have taken a frivolous position even if there is no real doubt about the defendant's guilt. Example:Trial of a bank robber caught on camera identifying himself and robbing the bank. The defense could plead the defendant not guilty and require the prosecution to prove the person on the screen was the defendant even though the only real purpose in doing so is to delay the trial in the hope of getting a plea bargain. In a non-criminal case, the attorney could not unreasonably take a position with the only purpose being to delay the proceeding.

Under Model Rule 3.2, a duty is imposed upon an attorney to expedite litigation consistent with the interest of the client. The exception to this rule is Model Rule 3.1, where a criminal attorney may insist on the proving of every element of a crime even if it needlessly delays or prolongs a trial. There is no comparable rule under the Model Code; however, Disciplinary Rule 7-102(A)(1) holds that an attorney can be disciplined solely for taking a position to harass or annoy others. Under the Model Code, a delay taken just to harm the other party may subject the attorney to discipline.

The duty to expedite a matter is balanced against the attorney's duty to protect a client's interest. Under Model Rule 3.2, an attorney is not permitted to take an improper delay merely to permit the client to reap financial or other benefits. The most common example of improper delay is that of an attorney who pursues an appeal without merit merely to delay and postpone the time when the client will have to pay the judgment.

The adversary system only works when the parties before acourt act honestly and in accordance with the rules. Attorneys are bound to act with honesty and candor when dealing with the court. In furtherance of these obligations, attorneys have specific duties imposed upon them, the violation of which will expose them to discipline. Under both Disciplinary Rule 7-102(A)(2) and (5) and Model Rule 3.3(a)(1), an attorney can be disciplined for knowingly making a false claim in bad faith. An attorney is precluded from participating in the falsification of evidence or offering evidence the attorney knows is false. While an attorney has a duty to act zealously for the client's benefit, an attorney nevertheless under Model Rule 3.3(c) can refuse to use evidence which the attorney reasonably believes is false. Where an attorney discovers that a client intends to testify falsely or has testified falsely in an ongoing case, he has a duty to either persuade the client to recant the false testimony if already given and if not given then seek to withdraw or not to testify falsely. Under Model Rules 1.6(a) and 3.3(b), the duty to reveal fraud or perjury ceases at the end of the proceeding. After that point, the attorney is absolutely prohibited from taking any action which might disclose the client's past fraud or perjury.

The duty of candor has been reiterated in Disciplinary Rule 7-102 and Model Code Rule 3.3. Ethical Consideration 7-37 in the Model Code states in part: "A lawyer should not make unfair or derogatory personal reference to opposing counsel. Haranguing and offensive tactics by lawyers interfere with the orderlyadministration of justice and have no place in our legal system." The making of false statements to the court is prohibited under Disciplinary Rule 7-102(A)(5) and Model Rule 3.3(a)(1). Part of the duty of candor owed by an attorney is the obligation under Disciplinary Rule 7-106(B)(1) and Model Rule 3.3(a)(3) to disclose controlling authority that is directly adverse to the attorney's position if the opposing attorney has not disclosed it.

Attorneys have long been under the requirement not to deceive the court or to permit the court to act on a misunderstanding of either the facts or law in a case. Attorneys have and remain under the obligation to correct such misconceptions by the court or tribunal. The 1908 Canons of Professional Ethics (CPE) promulgated Canon 22 that read in part:

"The conduct of the lawyer before the court and with other lawyers should be characterized by candor and fairness. It is not candid or fair for the lawyer knowingly to misquote the contents of a paper, the testimony of a witness, the language or the argument of opposing counsel, or the language of a decision or a textbook, or with knowledge of its invalidity to cite as authority a decision that has been overruled, or a statute that has been repealed, or in argument to assert as a fact that which has not been proved, or in those jurisdictions where a side has the opening and closing arguments to mislead his opponent by concealing or withholding positions in his opening argument upon which his side intends to rely....

Model Code Disciplinary Rule 7-106(B) restated Canon 22 of the CPE as follows:

"In representing a matter to a tribunal, a lawyer shall disclose:

(1) Legal authority in the controlling jurisdiction known to him to be directly adverse to the positionof his client which is not disclosed by opposing counsel."

No attorney can take advantage of the other party by knowingly relying upon a mistake of fact or law by the court or tribunal.

In furtherance of his obligation to maintain candor with a tribunal or court, an attorney is prohibited from knowingly making a false statement of material fact under both Disciplinary Rule 7-102(A)(5) and Model Rule 3.3(a)(1). Normally, an attorney is not required to have personal knowledge of the facts which serve as the basis for the pleadings. Usually, an attorney is permitted to rely upon the representations of the client or other persons as the basis from which the pleadings are created. When an attorney seeks to base a pleading upon the attorney's own declaration or affidavit, the attorney is required under Comment to Model Rule 3.3 to possess actual knowledge of the facts stated therein or a reasonable belief based upon diligent inquiry as to their truthfulness.

An attorney usually has no duty to inform the court or tribunal as to the existence of facts that are harmful to the attorney's stated position or contention. Under the comment to Model Rule 3.4, it is the presumption in the adversary system that it is the duty of the other side to raise the existence of such harmful facts. Normally, it is assumed that if such facts have not been raised by the opposing side it was the trial tactic of the other side not to raise those facts. That an injustice may result is regrettable, but that is how the system is designed to function.The exception to the above rule against being required to volunteer harmful facts exists in an ex parte proceeding. By its very nature, an ex parte hearing is without the presence of the other party at a time that the attorney is attempting to obtain affirmative relief. In the ex parte situation, the opposing party or the opposing attorney is not in court to present his case and position. Under Model Rule 3.3(d), an attorney in an ex parte proceeding must inform the court or tribunal of material facts known to the attorney. There is no precise counterpart rule in the Model Code; the closet rule is Disciplinary Rule 7-106(B), supra. The purpose behind the mandatory disclosure is to assure that the court or tribunal is not tricked into granting an order which is not proper. An example of the codification of this requirement is the treatment of California grand juries regarding indictments. Under California law, a district attorney seeking a grand injury indictment must present whatever exculpatory evidence that the district attorney has to the grand jury at the same time. Most states have not extended this requirement to their grand juries and the district attorney can continue to get an indictment without disclosing any exculpatory evidence.

Another area where an attorney may be forced to disclose harmful facts is where the disclosure is necessary to prevent the client from engaging in a crime or fraud. In such an instance, it is viewed that the silence of the attorney would be tantamount to assisting the client in the crime or fraud. Model Rule 3.3(a)(2)specifically requires the disclosure. Under the Model Code there is no specific requirement that an attorney disclose such intended crime or fraud of a client but Disciplinary Rule 7-102(A)(3), does require an attorney to reveal that which the law requires him to reveal: by case law that includes intended fraud or crimes by the client. This duty imposed under Model Rule 3.3(b) even superseded the requirement of the attorney to maintain client confidences to the extent necessary to prevent the intended fraud or crime by the client from being committed.

In every trial there will be witnesses, and there have been rules adopted to govern the duties of attorneys toward the witnesses. Canon 22 of the CPE reads as pertains to witnesses:

"It is unprofessional and dishonorable to deal other than candidly with the facts in taking the statement of witnesses, in drawing affidavits and other documents, and in the presentation of cases."

The most important obligation imposed upon an attorney is not to counsel or assist a witness knowingly to testify falsely. An attorney is not permitted to coach a witness. By coaching it is not meant seeking to refresh a witness's memory or recollection of the facts by exploring the basis of the witness's knowledge or pointing out discrepancies in the recollection by proper means. The attorney is forbidden from teaching or instructing the witness as to what to state in the testimony before the court.

As a practical matter, no attorney should ever put a client on the stand without first having been interviewed. The attorneyshould always be aware of what the witness will be testifying and the extent of that testimony. An attorney should always prepare the witness for the examination which will be undertaken by the opposing attorney. A potential witness should always be evaluated prior to use on such factors as knowledge, memory, demeanor and bias. A witness must have the ability to recall and recollect the facts before the court. An attorney should examine a witness prior to putting the witness on the stand so as to be able to evaluate not only the strengths of the witness's testimony but its weaknesses as well. With a complete knowledge of a witness' intended testimony, the attorney can prepare to bolster and strengthen the weak areas of it and be able to respond to an anticipated attack thereupon.

An attorney cannot coach a witness. That is black letter law. The definition of what constitutes coaching is written in less bolder type. The issue becomes even greyer when the witness is the attorney's own client. The attorney has an affirmative duty to educate the client on the law. It is an open question on when the advice on the law becomes improper coaching as to the content of the potential testimony. The accepted line between legal advice and impermissible coaching centers around whether the circumstances or facts show that the attorney knew or intended for the client to testify falsely. Utilizing this test, an attorney's advice is reviewed to determine if the attorney properly helped the client organize and relate relevant facts helpful to his case along withpreparing for the anticipated cross-examination. Where the attorney counseled or assisted the client to prepare, develop or create testimony known or reasonably suspected to be false, the attorney is subject to discipline.

Just as an attorney interviews the attorney's own witnesses, the attorney should attempt to interview the witnesses of the opposing side as well. Interview of an opposing party or opposition witness in a civil case is relatively simple. All states have adopted formal discovery procedures for interviewing parties and witnesses. These procedures include depositions, requests for admissions and interrogatories. In the formal discovery procedure the attorney for the other side is notified of the request and has the opportunity to be present at any depositions or may have the opportunity to review any document or interrogatory answers before they are submitted. In many case, an attorney would like to meet with an adverse witness without the opposing attorney having to be appraised of it. There are specific limitations which govern when an attorney may meet with an opposing witness.

An attorney is never permitted to meet with an opposing party who may be a witness without the presence or consent of the opposing counsel. Disciplinary Rule 7-104(A)(1) and Model Rule 4.2 forbid communicating about a matter with a person whom the attorney knows is represented by counsel except when specifically authorized by law unless that counsel consents to the communication. Under Model Rule 4.2, an attorney is further prohibited from engaging inan ex parte communication with an opposing party's employees who have managerial responsibility for the party or "with any other person whose act or omission in connection with that matter may be imputed to the organization for purposes of civil o