Speaker 1: I'm Drew Stevenson, this is for my professional responsibility class. Here we're continuing our discussion of conflicts of interest under model rule 1.7. And we're going to talk specifically about the lawyers personal conflicts of interest, and where this is addressed in the comments to model rule 1.7. So let's dive in. So now we're going to talk about personal conflicts of interest. Senate 10 to rule 1.7 says, a lawyer's own personal interest should not be permitted to have an adverse effect on the representation of a client. It gives an example. If the probity of a lawyer's own conduct in a transaction is in serious question, it may be difficult or impossible for the lawyer to give a client detached advice. In other words, if you did previous legal work, and that's now the subject of the dispute, you shouldn't be representing someone if you're simultaneously going to have to defend your prior legal work. I'll give you an example. Let's say you represent a lot of landlords who own big apartment buildings. And at one point, you draft a lease for one of them to use with all the tenants in his building, and you forget all about it a few years go by. And then a new client comes to you, and they're a tenant and they want to get out of their lease or somehow challenge the terms of their lease. And you ask who the landlord is, and it's someone you've never heard of, but when they show you the lease, you recognize it as your lease that you drafted a few years ago. And in order to represent this client, you're going to have to either challenge the validity of the lease, whether it's legal under state law, or you're going to have to say that the provisions are so ambiguous that the tenant can somehow wiggle out of it. Now, how did this happen? Well, maybe the opposing party obtained a copy of the lease that their landlords are friends, or maybe they bought the building in the meantime, in the intervening years, and decided to keep all the tenants there under their current lease, which was the lease you drafted many years ago. And so that is actually a pretty common scenario. But you need to think about what would you do in this case to challenge a lease that you yourself drafted that's going to create some awkward moments in the courtroom. You're not going to go into court and say, boy, some kind of idiot must have drafted this lease. So you have a personal conflict of interest here because the case is going to turn on your own conduct. Moving on, let's say a lawyer has a discussion concerning possible employment with an opponent of the lawyer's client or with the law firm representing the opponent. Well, those types of discussions could materially limit the lawyer's representation of his or her own client. Let's pretend you're a new associate, a year or two out of law school, and you go to do a deposition for an upcoming trial. And at the end of the deposition, opposing counsel comes up to you and says, wow, that was amazing. You're a really talented lawyer. Hey, my firm is hiring. Here's my card. Why don't you send us your resume? We're always looking to hire top talent like you. I'll bet we could pay more than you're making now at your current employer. And so you're excited. That's quite a compliment, right? And you run back to your office and email your resume to the other lawyer, thanking him for his kind words. Maybe you call your mom and say, you're not going to believe what happened today at this deposition. I was awesome. And the other lawyer offered me a job on the spot. Well, I hate to tell you this, but you probably just fell for a cheap trick. They know that you're going to do something like that, and it's probably going to come back to haunt you later because they know that you shouldn't be negotiating for employment with opposing counsel's firm while you're handling a case or a case that you're working on. And they could bring this up in a motion to disqualify you and your law firm before the trial. Hey, we think it's inappropriate for this lawyer to be representing that person, their client when they're in negotiations with our firm for a new position. Maybe they won't, but it puts you in an awkward position. And even if they don't bring it up, if they tell your client at one point, hey, you know, your lawyer's interviewing with us, that can really undermine the trust that your client has in you. Here's another example. A lawyer should not allow related business interests to affect their representation. So suppose that you are referring your clients to some business or enterprise in which the lawyer has an undisclosed financial interest. And maybe you've invested in a friend's business. They open a medical testing center that does x-rays and MRIs for people after their accidents. And you refer all your clients there. Well, you have a duty to disclose to the clients that you are a partial owner or have invested in that clinic. Moving on, Comet 11 to Rule 1.7 says, when lawyers representing different clients in the same matter or in substantially related matters are closely related by blood or marriage, there may be a significant risk that client confidences will be revealed and that the lawyer's family relationship will interfere with both loyalty and independent professional judgment. As a result, each client is entitled to know the existence and implications of the relationship between the lawyers before the lawyer agrees to undertake the representation. In other words, if opposing counsel is one of your family members or relatives, you have to disclose it. So a lawyer related to the other lawyer as a parent, child, sibling, or spouse ordinarily may not represent a client in the manner where that lawyer is representing another party unless each client gives informed consent. The disqualification arising from a close family relationship, though, is personal and will not be imputed to members of other members of the firms with whom the lawyers are associated under Rule 1.10. We haven't gotten to that yet in my course, but we'll come to it later. Basically, another lawyer from your firm could handle the case if they don't have the family issue. Okay, next. You're not allowed to have sex with your clients. We had to make a rule about this. So this comes up, unfortunately, quite a bit in family law contexts. So the lawyer is prohibited, it says, from engaging in sexual relationships with a client unless the sexual relationship predates the formation of the client-lawyer relationship. This is also going to reappear as a standalone rule in 1.8j, so we'll talk about this again when we get to that rule. Please know, it says that if you have a sexual relationship already with someone, so let's say you're married, or it's a boyfriend or girlfriend, and then that person asks you to handle one of their legal matters, you can proceed with the representation because it predates the formation of the client-lawyer relationship. But be careful with this because it's hard to be objective in your professional judgment when you are so intimately involved with the client, even if it's your spouse or long-time romantic partner. And also keep in mind, though, that going back to the situation where the person became your client first, and then something happened, right? One thing led to another, and you ended up sleeping together. It creates all sorts of problems. It can affect your judgment. A lot of times these sort of flings or short-term relationships end really badly, and that impacts the representation in your relationship with the client. So you often end up not only with a failed relationship out of the situation, but a failed representation. Here's a case from South Carolina where a court said it's a per se violation of Rule 1.7 as well to sleep with your client's wife. Okay, moving on from that, I want to mention before we end that the American Bar Association has, in an ethics opinion, addressed the personal conflicts of interest that relate to posting bail for your clients. So some lawyers will post bail for a client out of their own pocket to get the client out of jail when they've been arrested. The answer here depends on how much. Is the bail $5,000 or is it a million dollars? And it also depends on the lawyer's personal worth. So is a few thousand dollars enough to cloud your judgment if the client skips bail or more? So it's really a question of how much skin in the game does this really mean for the lawyer. The ABA refused to draw a clear line here because it depends on the amount and how significant or burdensome that amount would be for the lawyer if they end up having to forfeit it. And the ABA put out a similar opinion about taking a security interest in some of the client's property, like business equipment, to guarantee their future payment of their fees. It's going to depend on the amount and what that represents for the lawyer because some lawyers are struggling financially and some are very wealthy. And in some situations, it could be enough to create a material limitation on the lawyer's judgment of the representation. And if so, it's a conflict of interest. And at the least, the client would need to give informed consent. That concludes our discussion of material limitation, conflicts of interest, and specifically the lawyer's personal interests that can create a conflict of interest. And from here, we're going to move on to some specific provisions in the comments about third-party payers and other issues that come up with client consent and clients revoking consent. So stay tuned for the remainder of our lectures.