Q: Dear Ethics Lawyer, I am in-house counsel for a corporation dealing primarily with Mr. P, who is president and a substantial shareholder. Mr. P has asked me to prepare a legal analysis that would lay out the tax ramifications of a proposed compensation and benefits package for all corporate officers, and make recommendations about how to optimize it.
Because part of the motivation in considering the new package is the recruitment and retention of corporate officers, he asks that the memo address ramifications to both the corporation and to affected individuals, including himself, who would be subject to the new package. He provides his relevant tax information (as do other existing corporate officers). What are the ethical considerations?
The twice-monthly “Dear Ethics Lawyer” column is part of a training regimen of the Legal Ethics Project, authored by Mark Hinderks, former managing partner and counsel to an AmLaw 200 firm. Read More
2023
July 3 Issue – Third-Party Witnesses
By Mark Hinderks on
Q: Dear Ethics Lawyer, I represent a client in litigation during discovery. May I tell an unrepresented third-party witness that they are not obligated to speak to opposing counsel about the matter? May I ask our client to reach out to third-party witnesses with which the client has an ongoing relationship to ask them not to speak to opposing counsel about the matter?
Continue Reading July 3 Issue – Third-Party WitnessesJune 15 Issue – Conflicts Adversity to Client Who Left with Departing Lawyer
By Mark Hinderks on
Q: Dear Ethics Lawyer, I am a lawyer with a small firm. Recently, one of our partners (Betty) left the firm to join another firm, and Betty took with her a significant client that she had brought to the firm. She took all the client files (paper and electronic) and also took with her the only associate who had worked on any of that client’s matters. Now, a month later, a dispute has erupted between one of my clients and Betty’s client, and they want me to represent them in a suit against Betty’s client. I am worried that Betty’s client was also a client of our firm only a month ago. Does this create a conflict issue for us either under the former client rule 1.9, or the imputation of conflicts rule 1.10?
Continue Reading June 15 Issue – Conflicts Adversity to Client Who Left with Departing LawyerJune 1 Issue – Generative AI Tools
By Mark Hinderks on
Q: Dear Ethics Lawyer, Seemingly out of nowhere, the world is abuzz about ChatGPT and other generative AI tools capable of nearly instantaneous creation of writings that address complex questions, including briefs, memos and other legal documents. Depending upon who you listen to, this is either the end of human usefulness, an incredible tool to magnify our efforts, or a risky novelty riddled with false information. From a legal ethics standpoint, should our law firm ban it, use it or something in between?
Continue Reading June 1 Issue – Generative AI ToolsMay 15 Issue – Drafting Document for Adverse Party to Use
By Mark Hinderks on
Q: Dear Ethics Lawyer, I am an attorney for a company desiring to complete a relatively small real estate transaction with an individual to facilitate a larger development. In order to complete the transaction, the individual needs to document an agreement she has with a third party by which the third party will release their interest. In order to make this happen, she asked me if I could draft a writing to reflect the agreement between her and the third party, that she can then get signed. My client company doesn’t mind. Can I do it and if so under what circumstances?
Continue Reading May 15 Issue – Drafting Document for Adverse Party to UseMay 1 Issue – Advance Waiver Commercial Parties
By Mark Hinderks on
Q: Dear Ethics Lawyer, My firm currently represents two sophisticated commercial parties: client A on tax matters and client B in environmental work. Our firm’s engagement letter with each contains a paragraph providing for an advance waiver of conflicts for matters that are unrelated to the engagement. A and B now desire to enter into an asset purchase/sale unrelated to any work done by our firm for either one. A has already secured different counsel. May our firm advise B in the transaction? Are there any additional requirements or disclosures that must be made?
Continue Reading May 1 Issue – Advance Waiver Commercial PartiesApril 18 Issue – Conflicts from Family Relationships
By Mark Hinderks on
Q: Dear Ethics Lawyer, I am a litigation partner in a firm. My daughter and niece graduated from law school together, and they have now gone to work for separate local litigation boutiques. A large multi-party case was recently filed against a number of defendants, including one of my firm’s clients. Most local law firms have become involved. In a quirk of coincidence, my daughter, my niece and I have each entered appearances for defendants, which have cross-claimed against each other. Do I have a conflict appearing as counsel in the action in which my daughter and niece are on opposing legal teams if they are not the lead? Does this situation result in Rule 1.10(a) imputed disqualification of any of the firms?
Continue Reading April 18 Issue – Conflicts from Family RelationshipsApril 3 Issue – Choice of Law in Multi-State Ethics Issues
By Mark Hinderks on
Q: Dear Ethics Lawyer, I am responsible for growth at a law firm based in States A and B. I have recruited a group of lawyers from another firm who would join our State A office, and we are currently working through conflict issues. Two of these issues relate to which state’s rules apply, specifically because State A has adopted the current version of Model Rule 1.10(a)(2) which allows screening (with certain notices and certifications) to remove imputation of an incoming lateral lawyer’s conflicts arising from association with a prior firm, while State B has a version of Rule 1.10 that does not permit screening to do so, without express consent of the affected clients.
The first issue in this context is a litigation matter in State A for a State B client of our firm currently being handled by Lawyer A of our State A office adverse to a State B client of a lawyer from the firm the laterals would come from. The second issue relates to a transactional matter being handled by Lawyer B (licensed in both States A and B) of our firm’s office in State B, for a client in State B, adverse to a State A client of the laterals’ firm. In both circumstances, the other firm’s client would be Rule 1.9(b) former clients of one or more of those laterals who acquired confidential information related to the matters. See Rule 1.9(b)(2). Therefore, given the versions of Rule 1.10 in effect in the two states, screening without client consent would work if State A Rules apply, but would not work if State B’s Rules apply. This makes my head hurt – could you please help?
March 15 Issue – Settlement to Avoid Disclosing Client Fraud Lawyer Did Not Participate In
By Mark Hinderks on
Q: Dear Ethics Lawyer, Our client was sued for breach of contract, and discovery requests were served with the complaint. I immediately reviewed relevant documents and determined that a constituent of the client had fraudulently entered the contract knowing it could not be performed, in order to boost sales figures upon which bonuses would be based on his way out the door. May we settle the case immediately for the full amount requested, or even confess judgment on the contract claim, in order not to reveal the fraud reflected in the internal documents that would otherwise have to be disclosed?
Continue Reading March 15 Issue – Settlement to Avoid Disclosing Client Fraud Lawyer Did Not Participate InMarch 1 Issue – Communication with Others in Non-Lawyer Capacity
By Mark Hinderks on
Q: Dear Ethics Lawyer, I am in-house counsel in a growing company. However, as I rise in the ranks of my in-house position, I am gaining the confidence of others, and find myself being asked to attend more and more meetings as a business executive, not a lawyer. This has not been an issue for internal meetings as there is typically a clear delineation between when I’m raising business questions versus providing legal advice.
Recently, however, I was asked to attend an external meeting between a senior executive at my company and a senior executive at another company that we are thinking of doing business with. The senior executive made it clear that he was asking for my attendance as a business person and not as a lawyer because he wants to expand my business acumen/judgment. I am concerned because even though I’d be attending solely as a business person, my company role is as in-house counsel. The other company does not have in-house counsel and likely will not have legal representation at the meeting. Given the possible ethical issue of attending a meeting where the other party will not be represented by counsel, is there a way for me to attend (disclosure, etc.) without running afoul of the ethics rules or requiring the other company to have outside counsel attend?