Ethics

I post sample exam questions from time to time.  I used this one last semester.

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You and another associate work for Margret Brant at her three-person law firm.  You arrive at work one day and find that Brant has left you this voicemail message.

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 ?Hey, sorry I can?t be there today.  It?s been crazy.  As you know, I?m out of town doing an investigation for our start-up client, Online Gabbing, which suspects that one of its founders, Leslie Brown, lied to the IRS about Online Gabbing?s taxes. The IRS claims that Online Gabbing?s corporate structure is flawed, but I offered to send the IRS my evaluation of that structure.  The IRS?s accusation about Brown shocked me, because four years ago when I worked with the founders to incorporate Online Gabbing for them, Brown was the one I trusted most.  Yesterday I accompanied Brown to a recorded interview by the IRS, under oath. I made it clear to Brown that I do represent the company and that our conversations were privileged.  The IRS lawyer began the interview by saying to me, ?Just so we?re clear.  As I understand your statement, you do not as far as you?re concerned, represent Leslie Brown here today?? I replied, ?I represent her insofar as she is an officer of my client Online Gabbing.?  That should be adequate, right?

?That litigation we?re doing for Acme, Inc. against Bravo, Inc has been one wild thing after another.  Bravo acquired an operating unit of Acme and twenty-five Acme employees moved to Bravo.  Acme and Bravo have been fighting about who pays the employee benefits during the transition.  Apparently there are complicated federal ?ERISA? regulations that govern.  I?ve never dealt with those before.  Fortunately we?re just negotiating over a settlement number. Anyway, the news channel said that Delta, Inc. just acquired Bravo.  Delta might be our client!  We?ve done a bunch of things for them over the years.  But as I said, the Acme litigation is likely to settle soon.  I told Bravo?s lawyer that Acme won?t settle unless Bravo pays Acme $800,000, even though Acme would gladly take half that.  At this point, I don?t want to negotiate too aggressively?it won?t look good to Delta!  All the same, let?s hit Bravo with some meaty interrogatories, just to keep the pressure on.  Have my secretary show you which ones to use.  Send them to Acme for review before serving them on Bravo.  When you speak to Acme, remember that the presiding judge, Judge Carvajal, ordered us not to tell Acme that Bravo?s lawyer is under a grand jury criminal investigation.  Carvajal?s great by the way; he and I go way back and I do pretty well in his court room.  But here?s the issue that I need some help with.  I represented one of the Acme employees at her deposition and afterwards in the parking garage she confided to me that had she fudged her answer about where she was born.  I don?t need to correct that, do I? 

?I keep getting calls from the administrator of a prepaid legal services plan.  It makes sense, really.  The plan is offered as an employment benefit and if I pay the plan $1,000 I?m on their panel for one year, which could lead to some business?mostly divorce cases.  In fact, their administrator tracks the new divorce filings in the county and calls the parties to see if they want to join the plan at their work.  It?s sad, but the economic downturn has increased family law practice.  You know John Jones, the accountant who agreed to refer cases to us so long as we refer matters to him?  He says that that his free public seminars on the ?Finances and Blended Families? have been packed lately.  I?m going to do some pro bono by appearing with him at a seminar, talk about divorce law, and then stick around afterward to pick up clients.   Jones is preparing a flyer for the seminar and we need to get him some examples of good results that we?ve gotten for clients.  Also, make sure Jones spells my firm name correctly: ?Brant, Occhipinti & Partners.? 

?Speaking of Cody Occhipinti, before he left us five years ago to become a judge, he represented Foxtrot, Inc. on some real estate leases.  I now have a chance to represent Foxtrot?s landlord as it re-negotiates the lease.  Five years is enough for a conflict to dissipate, don?t you think?  The landlord will pay two-thirds my hourly fee and a percentage of whatever rent increase we can get from Foxtrot.  I had the agreement confirmed in writing with the landlord.  Because I need some economic analysis on the leasing issues, I will send half my hourly fees on the matter to another lawyer in town, Randy Biernet, who?s an expert on pricing real estate leases.  Biernet worked up some figures for me in less than an hour, so he?s happy.  Plus he doesn?t have to bill the client or meet with them; he just waits for my check.  After looking at the numbers, I assume I?ll spend about ten hours on the engagement but will make triple my hourly fee.  Not too shabby!

?Anyway, I?ll be back tonight.  Maybe you can meet up for dinner and drinks with me and Cody Occhipinti at Happy Jacks.  It?s usually a good time swapping war stories with him.?

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The rules (ABA and California) and common law test identified above govern the fact pattern.  Spot issues arising in this fact pattern and identify the issues by reference to the rules, comments, discussions, and common law test as appropriate.  You will receive credit for one issue if you write "beware substance abuse" anywhere in your answer.