FINAL EXAMINATION
PROFESSIONAL RESPONSIBILITY §30
SUMMER 1999 ! PROFESSOR TUTTLE
Instructions
1. This examination is open book.
2. This jurisdiction, The State of Affairs, has enacted the Model Rules of Professional Conduct (as currently adopted by the American Bar Association) as its state rules of professional conduct for attorneys. The jurisdiction’s State Bar Association has also adopted by reference all of the ABA’s Formal and Informal Opinions. If you need to cite decisional law, assume that the State of Affairs’ courts accept other courts’ interpretations of the rules as persuasive, though not binding. Try to be explicit about any other assumptions you are making about decisional law interpreting the professional rules.
3. You will have 2 hours and 15 minutes to complete this examination.
4. Be sure to answer all questions that follow the single fact pattern; the questions have different weight, so allocate your time proportionately. The first question is worth 95 points, so you should spend no more than 95 minutes answering it. The second question is worth 15 points, so you should spend no more than 15 minutes answering it. The third question is worth 10 points, so you should spend no more than 10 minutes answering it. That will leave you an additional 15 minutes to use as you see fit.
5. Feel free to use abbreviations for the Rules and for characters in the fact pattern; if you use other abbreviations regularly, let me know what they mean.
6. Please number the blue books you use.
7. Try to write on every other line and on one side of the page only. (Don't panic if you forget to follow these instructions at some point; just try to remember them.) Please write legibly.
8. Identify each blue book ONLY with your social security number. Do NOT write your name anywhere on your blue books.
9. Stop work immediately when time is called. Failure to do so constitutes ground for a charge of academic dishonesty. You may receive a failing grade for academic dishonesty.
FINAL EXAMINATION - §30 - PROFESSIONAL RESPONSIBILITY
You are an associate working in the law firm of Bland & Bland. Senior Partner has just called you into her office and told you the following story:
Albert Attorney is an experienced lawyer in the State of Affairs, duly admitted to practice in the state’s highest court. While the bulk of his work is done as a solo practitioner, he occasionally helps your firm, Bland & Bland (B&B), and is listed as "of counsel" on B&B’s letterhead. He has never had a desk in B&B’s offices, however.
Six months ago, Albert’s longtime friend Chris Carter called with a lucrative opportunity: Chris is a successful Internet web page designer, and he had been talking with Donna Dollars about investing in a potential Internet business. Donna has become very, very wealthy financing and steering a number of Internet start-up companies. Together, Donna and Chris had decided that they should start an Internet company that would help others start Internet companies. What they were missing -- both to get their company started, and to provide on-going assistance to other start-ups -- was a lawyer who understood the legal regulations affecting such companies, and that’s when Chris brought up Albert’s name.
The three met together, and Donna proposed the following terms: Albert would work without a fee in getting the joint venture ("Web Ventures") started. In return, Albert would receive twenty-five percent of the shares of the corporation (which would be privately held for a while at least). Donna would serve as president of Web Ventures. Once Web Ventures had any clients, Albert would provide legal services to those clients, for which Web Ventures would pay him an annual salary and bonuses. Chris agreed to a similar deal for his computer services, though he received thirty percent of the shares. Albert asked Donna whether she was sure about this arrangement, and she replied: "I’ve done this at least ten times before, and it’s gotten me rich! This way, you and Chris are working for yourselves, not just me -- and that always works better." Albert quickly agreed to the terms, with visions of Bill Gates dancing in his head.
Within a month, Albert had gotten the company incorporated, Donna had worked out the financing, and Chris had launched the company’s web page. The first week, Web Ventures landed its first big client: J. Pretentious, a noted clothing retailer. Albert was already familiar with J. Pretentious (JP), because JP’s biggest supplier, Overpriced Trash (OT), is an important client of B&B. While Albert never did any work for OT, he is good friends with the B&B lawyer who handles OT’s matters. As part of Web Ventures’ contract with JP, Albert worked out an exclusive deal with OT for JP to sell their overpriced trash on the Internet. B& B handled the negotiations for OT (though you did not work on that matter). JP was extremely impressed with Albert’s ability to close so quickly what they assumed would be a complicated deal with OT.
Albert’s work for Web Ventures’ second major client has proved to be somewhat more challenging. Just after the JP project ended, Web Ventures was retained by Quik-Mortgage because of some problems they were having in their online lending service. Quik-Mortgage (Q-M) was one of Donna’s earlier start-ups, though she had sold her controlling interest in the company to Owen Owner before creating Web Ventures. (Donna has no current financial interest in Q-M.) Owen asked Web Ventures to perform a full-scale review of his company (of which he is the sole owner) in order to help him improve the operation, and also because the First Bank of Affairs needed an opinion letter from Q-M’s lawyer before the bank would extend them a loan for business development. This opinion letter would update one done a year earlier by B&B (though Albert was unaware that B&B had done any work for Q-M). The earlier opinion letter gave Q-M a clean bill of health.
Because Q-M is a small operation (with only three employees), Albert assumed this would be easy work. The bank needed only to know whether Q-M was in compliance with the State of Affairs lending regulations, and whether Q-M faced any significant contingent liabilities. Since Chris had worked with Donna in setting up Q-M, Chris quickly worked through the computer systems and found some areas for improvement. Albert’s work proved more complicated; as he was sorting through Q-M’s books, one of the Q-M employees came to Albert and told him that something fishy was going on with the company. On condition of anonymity, Earl Employee (Q-M employee) gave Albert photocopies of the "real books" of Q-M, showing that Owen Owner was paying off appraisers to inflate the estimates of property values -- allowing Q-M to appear more financially solid than it actually was, and to resell mortgages to other banks that were actually less secure than they appeared. If discovered, this practice would constitute both violation of financial regulations and civil -- and perhaps criminal -- fraud. In addition, Albert has reason to believe that Donna and Chris were not only aware of the practice, but had initiated it.
Feeling that he had no other choice, Albert confronted Owen with the documents. Though Albert would not disclose who had given him the documents, Owen immediately guessed that it was Earl, "the troublemaker." Owen promised to cease the practice immediately, and to quietly attempt to correct the previous "misjudgments." Albert was relieved, and wrote the requested opinion letter to the bank. Unfortunately, Earl was fired later that day for his disloyalty.
And if the Quik-Mortgage mess didn’t provide him with enough to worry about, Chris convinced Albert that they could reap more of the rewards from Web Ventures’ quick successes if they renegotiated the original corporate agreement with Donna. "After all," Chris said, "We’re doing all the work while she sits back and collects most of what comes in." In fact, over the first few months Donna had made almost $300,000, while Chris and Albert each received salaries of just under $15,000 a month. At a hastily called meeting last week, Chris and Albert voted their combined shares (55% to Donna’s 45%) and removed Donna as President. They then voted to change the initial compensation agreement so the firm’s profits would be split three ways. Donna was irate; she stormed out of the meeting, threatening to sue.
A week ago, Donna made good on her threat: her lawyer sent Albert a letter telling him that unless the original compensation agreement was restored, and Donna returned to her position as president of Web Ventures, she would sue Albert for legal malpractice and report him to the bar association. Then, two days ago, Albert received a letter from Earl Employee, threatening to sue for causing him to be fired by Owen. The letters from Donna’s lawyer and from Earl brought Albert in to see his good friend and sometime colleague at B&B, Senior Partner.
Question 1 95 points
Write a memo to Senior Partner in which you identify and discuss Albert’s likely areas of liability for professional malpractice or discipline. Another associate will be handling technical questions of corporate law. Assume that Albert’s overall fee, even if increased by the new profit-sharing arrangement, is not unreasonable per se (see MR 1.5). Include an assessment of remedial steps that Albert could make to mitigate his liability.
Question 2 15 points
Would it make any difference for your analysis in Question 1, particularly of the original agreement between Albert, Donna, and Chris if:
a) the problem took place in the District of Columbia rather than in the State of Affairs (assuming that all lawyers were licensed in DC); or
b) the State of Affairs had adopted proposed Rule 5.8 (and the other amendments suggested by the ABA’s MDP Committee)?
Question 3 10 points
Senior Partner didn’t ask you about any potential problems B&B might have in this matter. Now is your chance to impress her with your skills in legal ethics. Does B&B have anything to worry about here?
FINAL EXAMINATION
PROFESSIONAL RESPONSIBILITY §20
SPRING 1999 ! PROFESSOR TUTTLE
Instructions
1. This examination is open book.
2. This jurisdiction, The State of Panic, has enacted the Model Rules of Professional Conduct (as currently adopted by the American Bar Association) as its state rules of professional conduct for attorneys. The jurisdiction’s State Bar Association has also adopted by reference all of the ABA’s Formal and Informal Opinions. If you need to cite decisional law, assume that the State of Panic’s courts accept other courts’ interpretations of the rules as persuasive, though not binding. Try to be explicit about any other assumptions you are making about decisional law interpreting the professional rules.
3 You will have 2 hours and 15 minutes to complete this examination.
4. Be sure to answer both questions that follow the single fact pattern; the questions have different weight, so allocate your time proportionately. The first question is worth 100 points, so you should spend no more than 100 minutes answering it. The second question is worth 20 points, so you should spend no more than 20 minutes answering it. That will leave you an additional 15 minutes to use as you see fit.
5. Please number the blue books you use.
6. Try to write on every other line and on one side of the page only. (Don't panic if you forget to follow these instructions at some point; just try to remember them.) Please write legibly.
7. Identify each blue book ONLY with your social security number. Do NOT write your name anywhere on your blue books.
8. Stop work immediately when time is called. Failure to do so constitutes ground for a charge of academic dishonesty. You may receive a failing grade for academic dishonesty.
9. You must also sign and submit with your examination the class attendance form. The proctors will collect these attendance forms in a separate box. Write and sign your name on the attendance form; do not place your social security number on the attendance form.
FINAL EXAMINATION - §20 - PROFESSIONAL RESPONSIBILITY
You are an experienced associate in the law firm of Churning, Profitts & Howe (CPH), a large practice in the State of Panic. You are admitted to practice in the State of Panic. Penny, a partner for whom you have often worked calls you into her office one day to discuss a matter that is "extremely sensitive." She tells you that one of her long time clients, Generic Drug Co., has complained to her about the shoddy service that they received from CPH on a project handled by lawyers in a different practice group. Penny is not particularly concerned that Generic will sue CPH for malpractice, but she is extremely worried that the company will take its legal business elsewhere – to the tune of $2 million in average annual billings. Though most of Penny’s work for Generic (including several matters in which you have participated) involves general corporate practice, Generic also uses CPH as counsel in regulatory matters before the Food & Drug Administration, which typically involve applications for drug licenses. It is in the latter context that Generic’s displeasure with CPH arises.
Penny tells you to ask around "very discreetly," and report back to her. She has instructed the lawyers and support staff who worked on the case to talk with you – "and if they don’t, I will make sure they don’t work here a day longer." She instructs you not to tell them that Generic has complained, but to tell them that the information is needed for corporate work that Penny is doing for Generic. Over the next week, you discuss the representation with the lawyers and paralegal in your firm who worked on the Generic matter in question. A week later, you submit the following memo to Penny:
Memorandum
From: Associate
To: Penny Partner
-----------------------
At your request, I have inquired into the circumstances of CPH’s representation of Generic Drug Co. in the license proceeding for the drug Proboscutin, to be marketed as a remedy for pollen allergies. The representation was conducted by two CPH lawyers, Anthony and Brenda, both senior associates with extensive experience in similar cases. In this, as on all similar cases, Anthony and Brenda were assisted by Chris, a paralegal who is also well-versed in drug licensing.
Generic Drug, as you told me, is displeased with two aspects of this representation: they believe that CPH has not been sufficiently aggressive in pursuing FDA approval of Proboscutin; and they believe that the same CPH lawyers bungled an internal investigation of Generic relating to problems in the Proboscutin application.
Regarding the first problem: both Anthony and Brenda revealed that their case loads were already quite heavy at the time the Generic matter came to them, but the case seemed routine so they agreed to work on the project (in addition, Brenda is up for partnership next year, and she felt that she could not turn down work from such an important client). Unfortunately, just after they accepted the Proboscutin case, another of their drug cases began to require an unexpectedly high level of attention. Designer Drugs, another client, also had an allergy drug (Beekutin) pending before the same agency at the same time, and the FDA had initially refused to approve Beekutin for treatment of pollen allergies. Though eventually successful in the Beekutin proceeding, Anthony and Brenda were delayed by nearly a month in getting the Proboscutin license application prepared.
Brenda and Anthony each explained the delay as an unfortunate but normal part of a busy regulatory practice. In addition, Anthony felt that Designer was an important source of future business; Beekutin was the first matter Designer had given to CPH, and they came to CPH because the trusted Anthony – until last year, he worked in the general counsel’s office at Designer.
Generic’s primary concern with the delay has to do with marketing strategy: with FDA approval by mid-February, they would be able to launch a big promotion for Proboscutin in time for the spring allergy season, and compete with the two (and now, with Beekutin’s approval, three) other drugs in this extremely lucrative market. Instead, the delay has pushed Generic’s application well into the spring and perhaps summer as well.
Once the Beekutin matter had calmed down, Anthony and Brenda turned their attention back to Proboscutin. They immediately saw a minor problem with the Proboscutin claim: in arguing for Beekutin’s approval, the lawyers had convinced the FDA to accept a newer test for measuring allergy drugs’ safety (the Safer test), which reinforced their claims about Beekutin’s importance for the market. Under the Safer test, however, Proboscutin was likely to fall short. Anthony and Brenda knew they would have to find a way to argue for use of the previous standard (the Outdated test), a problem they are still wrestling with now.
The choice of test issue paled in comparison to the next problem that confronted them. Several weeks into work on the Proboscutin application, Anthony and Brenda were called into the office of Generic’s president, Ginny. The president told them that she had heard a rumor that some researchers, in collusion with the company VP for Research (Reese), had been submitting suspicious data on Proboscutin’s safety and effectiveness. Ginny was especially eager that Anthony and Brenda undertake the investigation because the fee for the inquiry could be buried within their fee for the Proboscutin application, and thus avoid undesirable attention.
The president asked that Anthony and Brenda represent not only Generic in the investigation, but the VP for Marketing (Mark) and herself as well. Anthony and Brenda agreed, and began their investigation. Conversations with Ginny revealed that she had given Reese and his staff very wide latitude because the group had been producing incredible results – another drug they had just developed, Nograine (for headaches), was projected for a $10 million profit this year, nearly half of Generic’s total profit – and Reese was "prickly" about others intruding in his domain. In fact, Ginny asked them to be especially careful in dealing with Reese’s office, and to make sure that all inquiries about the matter were handled as "routine parts of the application" to keep Reese from getting angry.
In conversations with Brenda and Anthony "off the record," Ginny disclosed that she had long harbored suspicions about Reese’s conduct, especially after Reese told her about particularly nasty side effects in Nograine that he had suppressed in the FDA application. Ginny says that she went along because Reese assured her that the side effects would produce no long-term injuries, so any potential tort liability would be limited. In addition, Ginny told the lawyers that Mark was also aware of these problems – indeed he encouraged Reese to keep quiet about the side-effects – and thought the company should move "full speed ahead" because the marketing environment was ripe for the drug. Time (and the balance sheet) have proven Mark right.
Private discussions with Mark told a slightly different story (though Brenda and Anthony certainly did not tell him what Ginny had told them): he suggested that it was Ginny’s insistence on keeping quiet about Nograine’s problems that guided their decision-making. Mark had little information to add about the Proboscutin rumors, only to tell them that he had received a phone message from "an anonymous source" in Reese’s office, and that he had forwarded the matter to Ginny.
Meanwhile, Anthony and Brenda dispatched their paralegal, Chris, to Reese’s office to retrieve documents necessary for the inquiry. As she was collecting the files Reese’s secretary had pulled for her, Chris ran into the leading research scientist, Sy. Sy asked her to come into his office, and he closed the door behind them. "I know you work for the law firm," Sy said, "and I have something that I think you will need." Sy handed her a document that he pulled from his desk. "This is a report of a test on Proboscutin’s safety that was supposed to have been done by two outside researchers who work for us all the time. Very little of the data on this form is true; we ran into some problems with severe dizziness in this test group that we can’t explain. It was only a few of them, it hadn’t happened in other tests, and we think we can explain it, but we can’t afford to wait another year to get this drug out – Beekutin will be too well established by then. So we rewrote the whole test using data from other studies, forged the researchers’ name on the test, and submitted a copy of it as part of our application to the FDA. The researchers won’t complain – we give them too much business." Sy then asked her: "Is this serious? Should I get my own lawyer?" Chris told him that Reese was going to be in serious trouble, but if Sy was only following orders, he would likely be protected by the company.
Chris said that she turned over the forged document to Anthony and Brenda, who have retained it in their files. Chris didn’t tell Anthony and Brenda about Sy’s last questions, however. A few days after Chris’s conversation with Sy, Ginny called Anthony and Brenda in again and told them that she had received an angry call from Reese, who had heard from his secretary that Chris visited privately with Sy. He has threatened to quit the company and take his talents elsewhere. Reese has repeated this threat to Mark as well, and the threat has thrown the management team into chaos. After Anthony and Brenda told Ginny that they had real worries about Reese’s office (though the never mentioned Sy’s document), she told them to drop the inquiry. "Get the Proboscutin application approved, but I’m not sure I ever want you or your law firm working for me again."
Anthony and Brenda have continued to work on the Proboscutin application.
Question 1 100 points
After you submitted the preceding memo to Penny, she asked you to prepare another memo detailing CPH’s potential liabilities arising out of the facts set forth in your first memo. She wants you to identify foreseeable discipline for violations of professional rules, civil liability to Generic or others, and criminal liability as well.
Question 2 20 points
Somehow the US Attorney’s Office has learned of your two memos (the one setting forth the facts contained in this examination, and the other that you prepared in response to Question 1). The US Attorney has opened an investigation into reports of fraud in Generic’s drug research, and believes that CPH may be implicated in this fraud. It has issued the law firm a subpoena for these two memos. Penny asks you to write a memo explaining CPH’s legal options in responding to this subpoena.
End of Examination
FINAL EXAMINATION
PROFESSIONAL RESPONSIBILITY §20
FALL 1997 ! PROFESSOR TUTTLE
Instructions
1. This examination is open book.
2. This jurisdiction, The State of Euphoria, has enacted the Model Rules of Professional Conduct (as currently adopted by the American Bar Association) as its state rules of professional conduct for attorneys. The jurisdiction’s State Bar Association has also adopted by reference all of the ABA’s Formal and Informal Opinions. If you need to cite decisional law, assume that the State of Euphoria’s courts accept other courts’ interpretations of the rules as persuasive, though not binding. Try to be explicit about any other assumptions you are making about decisional law interpreting the professional rules.
3. You will have 2 hours, 15 minutes to complete this examination.
4. Please number the blue books you use.
5. Try to write on every other line and on one side of the page only. (Don't panic if you forget to follow these instructions at some point; just try to remember them.) Please write legibly.
6. Identify each blue book ONLY with your social security number. Do NOT write your name anywhere on your blue books.
7. Stop work immediately when time is called. Failure to do so constitutes ground for a charge of academic dishonesty. You may receive a failing grade for academic dishonesty.
8. You must also sign and submit with your examination the class attendance form. The proctors will collect these attendance forms in a separate box. Write and sign your name on the attendance form; do not place your social security number on the attendance form.
FINAL EXAMINATION - §20 - PROFESSIONAL RESPONSIBILITY
Three years ago, Alan was a young associate in the Tulip Law Firm, working on employment discrimination cases. Alan is duly licensed to practice law in the State of Euphoria, and all his work for Tulip took place in this state. On most of his cases, Alan worked alongside his close friend and housemate Brenda, also an associate at the Tulip firm; the two had shared a house during law school and, struggling with all their law school loans, decided to continue sharing the house after graduation. In fact, last year they purchased a house together (which they hold as tenants in common -- meaning no survivorship rights). They split all household expenses such as utilities, food, etc., but otherwise keep their finances separate. In addition to handling work for present clients, Alan and Brenda were responsible for acquiring new employment discrimination clients. They found that the most effective way to get new clients was to offer free employment discrimination seminars to local companies that the firm had not previously represented. Companies welcomed the lawyers’ informational seminars, and clients started pouring in.
In the fall of 1994, Alan and Brenda conducted a day-long seminar for mid-level managers at Largecorp. In their presentation, Alan and Brenda lectured on various aspects of employment discrimination, outlined different options for structuring an in-house system to handle complaints, supervised role-playing exercises, and led "conversation groups" of managers in discussions of their own practices. Though the seminar was a success, Tulip Law Firm did not receive any work from Largecorp until after Alan had left the firm. A month after their seminar at Largecorp, Alan resigned his employment at the Tulip Law Firm and accepted a position as a senior counsel for the Euphoria Human Rights Commission (HRC), the state agency charged with investigating and prosecuting employment discrimination complaints. Brenda remained at the Tulip firm.
Six months ago (June, 1997), two Largecorp employees brought discrimination complaints to the HRC. The employees, Frank and Mary, acknowledged having a long-term romantic affair, in violation of company policy (though one that had never been enforced, despite numerous affairs involving those holding positions similar to ones held by Frank and Mary). Though married to others at the time their affair was discovered, Frank and Mary have since been divorced and are now engaged to be married. Mary alleges gender discrimination in her firing. She was the only female mid-level manager at Largecorp, and no male employee (except Frank) has ever been fired for having an affair with a co-worker. Frank alleges age discrimination; he is in his late 50s and was replaced by a man in his mid 30s.
Alan’s subordinate investigated the complaints and gave the report to Alan. After reading the report, Alan decided there was sufficient evidence to recommend a lawsuit by the HRC against Largecorp. The HRC commissioners disagreed, however, and rejected Alan’s recommendation. Frank and Mary were then sent letters informing them that the HRC would not sue Largecorp, but that they were free to do so on their own if they wished. Angered about this and other instances in which his recommendations had been rejected, Alan quit his job at the HRC. Luckily, he had already been discussing a new job with the Violet firm, which had been impressed with several reports he had done in cases involving their clients before the HRC. The Violet firm was somewhat concerned about possible conflicts of interest -- Violet opposed Tulip in a number of cases -- but Alan assured them that he had not worked directly on any of the cases in which the two firms opposed each other.
His first day at the Violet firm, Alan tracked down the phone number for Frank and Mary’s apartment, and called. Mary answered, and Alan told her that he had handled their claims while at the HRC, that he had recommended the suit be pursued, and that he had now gone into private practice. Alan also said that time was running out on their claims, and he encouraged Frank and Mary to come see him as soon as possible. Mary promised to discuss the matter with Frank. An hour later, Mary called back and they set up a meeting with Alan at his office for the next morning.
The next morning, Alan met with Frank and Mary to discuss their case. Alan explained that the HRC’s denial of their claim was more an indication of the commission’s pro-business politics than the law, and that they were likely to prevail in private litigation. All agreed that the clients’ primary objective was reinstatement at Largecorp. If Frank and Mary would agree to sue, Alan said he would forego the typical hourly fee and take compensation only from whatever money they might recover (incidental to the main goal of reinstatement). And Alan would only take 25% of that -- not even the 33% standard contingency fee.
Frank and Mary accepted Alan’s offer, and Alan went to work immediately. Before they left his office, Alan asked Frank and Mary to find copies of the sworn statements they gave to the HRC, and to review the statements to see if there was anything else to add. Once Frank and Mary were gone, Alan drafted discrimination complaints against Largecorp, filed them in the appropriate court, and had copies served on Largecorp and its counsel, Tulip Law Firm. As Alan expected, Brenda was assigned the case at Tulip.
Early the next morning, Brenda called Alan at work, and asked Alan why he hadn’t said anything earlier about Frank and Mary’s complaints. "We’ve been roommates for years," Brenda said; "The least you can do is let me know in advance when you’re suing me." Alan responded: "I know this is very awkward, but I thought it was best that we not discuss this outside of work." Brenda agreed, and they have avoided the subject when at home. In addition, neither Alan nor Brenda has told their respective clients that they share a house.
A few days later, Frank walked into Alan’s office, said he had been reviewing his HRC statement, and that he needed to talk. Frank explained that he had "embellished" several comments that Largecorp executives had made to him about their need for more young managers. Alan was a bit dismayed, these statements had not been challenged by Largecorp before the HRC, and they were the strongest part of Frank’s claim. He told Frank not to worry about the statement.
That night, Brenda was very late getting home (due to car trouble, as Alan would later discover). While finishing up some notes on the computer, Alan noticed a fax coming in from Brenda’s law firm. Thinking it was from her, Alan quickly read through it, and realized it was addressed to Brenda from one of the associates at Tulip (and stamped PRIVILEGED all across the cover sheet). The fax was a summary of the Tulip lawyers’ conversation with Mary’s former supervisor at Largecorp. The fax made it clear that the affair was just a convenient reason for terminating Mary -- and Frank was only fired because Largecorp knew it would look bad if both of them weren’t fired. The real reason Mary was fired was that she had "put a chill" in the atmosphere surrounding Largecorp’s management team; practical jokes and locker room sensibilities had been important to the management team dynamics, the supervisor said, and Mary’s presence seemed to put an end to it -- causing, he believed, a decrease in the team’s effectiveness. Alan was shocked -- both by the fact that the supervisor would have said these things, and also by the fact that it had been faxed to their house. Knowing Brenda would be upset if she thought he had seen the fax, Alan left it in the fax tray, turned off the computer, and went to sleep. The next morning, Brenda didn’t say anything about the fax, so Alan didn’t either.
Alan and Brenda arranged a settlement conference with several Largecorp executives. Alan thought it best if Frank and Mary did not attend, and his clients agreed. Alan started by focusing his attention on Frank’s case: "The sworn statement Frank gave to the HRC makes it clear what you all were up to; we expect full reinstatement with back pay." Surprisingly, Largecorp countered by offering reinstatement to both Frank and Mary -- but no back pay. Alan rejected the offered settlement out of hand. "My clients have been out of work for over a year, with combined salary losses approaching $200,000. They are not willing to just forgive and forget." When asked for a counteroffer, Alan proposed something he felt would be attractive to Largecorp: reinstatement with back pay for Frank, and a generous cash settlement for Mary -- a lump-sum payment of 2 years’ salary.
After conferring with Brenda, Largecorp’s vice president accepted -- but added one more requirement that surprised even Brenda: unless Alan convinced his clients to accept the settlement offer, the corporation would direct its counsel to pursue ethics charges against Alan -- for violations of both the state’s Rules of Professional Conduct (which are identical to the ABA Model Rules) and state conflict of interest laws (which are identical to 18 U.S.C. §§ 201-09). Alan left the meeting, promising to have a response by the next day.
Although shocked by the threat to file charges against him personally, Alan delivered the offer to Frank and Mary (except for the threat). At first, Mary adamantly refused the settlement offer, but Frank and Alan eventually convinced her that litigation carried great risks, that Mary (being significantly younger and better qualified) would have an easier time than Frank in getting another job, and that the amount they would recover from Largecorp (her cash settlement plus Frank’s back pay) was substantial. Mary finally agreed. All parties met the next day and signed the settlement papers, and the lawsuits were dismissed.
Alan is still somewhat shaken from the episode, however, and comes to you for advice. Alan knows that you are an expert in legal ethics (and a member of the State of Euphoria bar), and wants to know what he did wrong. Please write Alan a memo detailing his ethical problems, being sure to describe not only violations of attorney discipline rules but also likely areas of malpractice exposure and possible violations of state employee conflict of interest laws as well.
FINAL EXAMINATION ! PROFESSIONAL RESPONSIBILITY ! LAW 218 §20
FALL 1996 ! PROF. TUTTLE
Instructions
1. This examination is partial open-book: you are allowed to use only your standards supplement, along with notes you have written in the supplement. No additional materials may be pasted, taped or otherwise inserted into the supplement.
2. This jurisdiction, The State of Bliss, has enacted the Model Rules of Professional Conduct (as currently adopted by the American Bar Association) as its state rules of professional conduct for attorneys. The jurisdiction’s State Bar Association has also adopted by reference all of the ABA’s Formal and Informal Opinions. If you need to cite decisional law, assume that the State of Bliss’s courts accept other courts’ interpretations of the rules as persuasive, though not binding. Try to be explicit about any other assumptions you are making about decisional law interpreting the professional rules.
3. You will have 2 hours, 15 minutes to complete this examination. There is only one fact pattern, but I have asked two questions. But sure to answer both questions.
4. Please number the blue books you use. At the start of your answer to each question identify clearly the question you are answering.
5. Try to write on every other line and on one side of the page only. (Don't panic if you forget to follow these instructions at some point; just try to remember them.) Please write legibly.
6. IDENTIFY EACH BLUE BOOK ONLY WITH YOUR SOCIAL SECURITY NUMBER. DO NOT WRITE YOUR NAME ANYWHERE ON YOUR BLUE BOOKS.
7. STOP WORK IMMEDIATELY WHEN TIME IS CALLED. Failure to do so constitutes ground for a charge of academic dishonesty. You may receive a failing grade for academic dishonesty.
8. Be sure to read carefully and sign the Statement of Attendance that will be distributed along with the exam. MAKE SURE YOU HAND IN THE STATEMENT TO THE PROCTORS SEPARATELY FROM YOUR EXAM.
(The examination begins on the next page)
EXAMINATION QUESTION
Wanda and Harry were law school classmates who married after graduation. Wanda went to work as an associate in the law firm of Young & Young (Y&Y), while Harry went to work as an associate in the law firm of Zimmer & Zimmer (Z&Z). Both passed the bar exam in the State of Bliss, and were admitted to the bar.
Wanda’s most significant assignments at Y&Y all involved one client, Al’s Amazing Automart (AAA), the State’s largest car dealership. One case in particular accounted for nearly all her hours over a six-month period, a suit against AAA brought by The Bank of Big Bills (BBB) alleging breach of AAA’s promise to promote BBB’s car loans at AAA’s dealership. Interestingly enough, BBB was represented in this matter by Harry’s law firm, Z&Z, although Harry did no work on the case. The case ended in early 1994, although Wanda continued to work on AAA matters throughout her tenure at Y&Y.
After four years at their respective firms, Wanda and Harry decided to start their own law firm. They planned to "open for business" on January 1, 1995, so in September, 1994, Wanda began talking with her contacts at AAA about the possibility of AAA becoming her client rather than Y&Y’s. After substantial negotiations, AAA agreed to follow Wanda to her new firm; the agreement was memorialized in a retainer letter dated December 15, 1994, which contained (among other things) the following three points:
< The agreement will not take effect until January 1, 1995; nor will any party disclose the existence of such agreement until that date.
< Wanda and Harry (W&H) will charge AAA one-third less than the amount Y&Y charges for the same service.
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< AAA will pay W&H a three month retainer in advance at the beginning of each quarter-year, and will give W&H at least one full quarter-year’s notice before terminating the relationship. (For example, if AAA wants to end the relationship in April, it must give notice prior to the quarter beginning in January; if it fails to give such notice in advance, AAA will be obliged to pay W&H for the second quarter-year as well — through the end of June.)
Both parties seemed satisfied with the arrangement. AAA was pleased with the work Wanda had done for them at Y&Y, and the new arrangement significantly cut their legal expenses. Wanda and Harry, in turn, benefited from the relative security offered by the retainer agreement.
On January 1, 1995, Wanda and Harry opened their law firm. Although they hired a new secretary, Wanda and Harry brought with them two paralegals from their previous firms, Lou and Mary. Mary had actually been a legal secretary at Y&Y, working for Wanda, but was now a second-year law student, going to school in the evenings. Lou’s career, on the other hand, seemed to be going in the opposite direction. He had been a lawyer at Z&Z when Harry started working there, but last year was suspended indefinitely for having lied on his application to the bar. Despite this cloud from Lou’s past, Wanda and Harry considered themselves fortunate to have an experienced, talented legal professional working with them. Indeed, Lou handled almost any task Wanda and Harry needed, short of signing pleadings or arguing in court. His research and writing skills were impeccable, but most impressive was his charming personality. Lou would regularly handle client intake matters and explain the firm’s fee structure to potential clients, and most clients who met with him signed on with the firm. And when Wanda and Harry were particularly pressed for time, Lou was even able to handle routine negotiations with insurance companies on behalf of firm clients.
After a year of working together, however, Harry realized that Wanda had been more than
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impressed with Lou’s lawyering skills -- Wanda and Lou were having an affair. Harry was shocked at this betrayal -- not only by his wife but by his former Z&Z colleague, whom Harry had given a second chance after Lou’s suspension. Harry immediately resigned from the firm and filed for divorce. He mailed a letter to each of the firm’s clients explaining -- in excruciating and embarrassing detail -- the terms of his departure, and a statement of his availability to represent any of the clients. Harry closed with a statement of his own trustworthiness and personal moral rectitude.
Harry started his solo practice within days of leaving the now-dissolved W&H partnership, and hired Mary as his law clerk. Many of the W&H clients also followed Harry to his new practice -- although AAA remained with Wanda, since Harry had done virtually none of its work. But within six months, Harry picked up an even bigger client, BBB; Harry would handle all of its debt collection and loan foreclosure work.
When the General Counsel of BBB called with a new assignment a few months later, Harry was overjoyed -- but not just because of the potential fees. AAA had defaulted on a mortgage for its newest and largest showroom, and BBB wanted to foreclose. Though the divorce had been final for the past month, Harry remained bitter about Wanda’s infidelity and he relished the opportunity to oppose her. As Harry predicted, Wanda represented AAA in the matter, with Lou continuing to assist her. After brief and unproductive negotiations, BBB filed suit against AAA, seeking foreclosure on the loan. Given the lawyers’ hostility to one another, it came as no surprise that each party filed motions to have the other disqualified for conflicts of interest. The court has not yet decided the motions for disqualification (see Question 1 below).
While this was happening, Harry received some additional work through his relationship with
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BBB. Captain Credit Corporation, a wholly owned subsidiary of BBB, was being sued by several
borrowers for allegedly fraudulent practices. The Z&Z firm, Harry’s former employer, was representing CCC in the matter, but a potential conflict of interest prevented Z&Z from simultaneously representing Pamela, the President and CEO of CCC, who had been named individually in the lawsuit. So Harry was asked to represent Pamela -- CCC promised to pay his expenses -- and Harry agreed.
Harry and Pamela met several times over the next month, preparing their case, and Pamela grew to trust Harry. She decided to confide in Harry something that had been troubling her: though Pamela denied committing fraud against borrowers, she admitted to embezzling over ten thousand dollars from CCC through fraudulent travel and expense vouchers over the past few years, a practice that continued even to an inflated expense form for the lunch Harry and Pamela had shared the past week. Harry was shocked, and explained that she had a duty to report her misconduct to CCC. When Pamela refused, Harry withdrew from the representation and sent a letter to the CCC board of directors explaining that he was forbidden under Rule 1.16 to represent someone engaged in unlawful conduct.
Days later, Harry learned that Wanda had agreed to represent Pamela in the same matter. This act seemed to be the final straw for Harry; he was now firmly convinced of Wanda’s unethical conduct, and decided to report her to the state bar association. Harry wrote a letter to the bar setting forth all of the information disclosed in this narrative.
QUESTIONS FOLLOW ON THE NEXT PAGE
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QUESTIONS
1. You are a law clerk for the judge handling the case of AAA v. BBB, in which Wanda and Harry have entered appearances as opposing counsel, and filed motions to disqualify each other for conflicts of interest. Explain the nature of the ethical conflicts at issue in this case, and how they should be resolved -- including whether either, both, or neither lawyer should be disqualified.
2. You are counsel to the state bar disciplinary committee, and have received a letter of complaint from Harry. Analyze the facts set forth above to determine whether any ethical norms have been violated, and by whom. The bar committee is interested not only in Harry’s allegations about Wanda’s conduct, but whether the facts stated would constitute violations by any lawyer, including Harry himself. The answer should be in the form of a memorandum to the bar discipline committee.
END OF EXAMINATION
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FINAL EXAMINATION ! P.R. § 11 SPRING 1996 ! PROF. TUTTLE
Instructions
1. This examination is partial open-book: you are allowed to use only your standards supplement, along with notes you have written in the supplement. No additional materials may be pasted or taped into the supplement.
2. This jurisdiction, The State of Iniquity, has enacted the Model Rules of Professional Conduct (as currently adopted by the American Bar Association) as its state rules of professional conduct for attorneys. The jurisdiction’s State Bar Association has also adopted by reference all of the ABA’s Formal and Informal Opinions. If you need to cite decisional law, assume that the State of Iniquity’s courts accept other courts’ interpretations of the rules as persuasive, though not binding. Try to be explicit about any other assumptions you are making about decisional law interpreting the professional rules.
3. You will have 2 hours, 15 minutes to complete this examination. There is only one fact pattern, but I have asked two questions. But sure to answer both questions.
Exam Question
Anne and Bill are lawyers who practice in, and are admitted to the bar of, the State of Iniquity. About three years ago, Anne and Bill agreed to share office space in order to cut down on overhead costs, though they decided not to form a law partnership. Because they both represent large numbers of clients in the entertainment business, Anne and Bill rented office space at the heart of Sin City. Their space is divided into two offices and a large reception area where Carl, their shared secretary, works. The reception area also serves as a waiting room for the lawyers’ clients, and holds each lawyer’s filing cabinets. The door to the office (and also the sign in front of the building) lists the lawyers’ names, with each followed by the designation "attorney-at-law".
In last month’s Inside Entertainment magazine, Anne and Bill took out a half-page, color ad which read:
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ANNE ALLURE BILL BLISS
LAWYERS FOR THE STARS
IF YOU WANT TO BE LIKE THE STARS,
BRING YOUR LEGAL PROBLEMS TO ONE OF US
Our satisfied clients include Hugh Grant, Shannon Doherty and Pee-Wee Herman
CALL FOR AN APPOINTMENT TODAY!
Anne Allure Bill Bliss
55-STAR1 55-STAR2
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The ad has already generated several new clients for each lawyer.
Mimi de Ville, one of Anne’s new clients, came in for her first appointment last Wednesday. Mimi, in her late 60's, last held a starring role twenty years ago, but lately had been reduced to occasional appearances on Hollywood Squares. Sin City rumor attributed her decline to the bottle. On Mimi’s first visit, accompanied by her young male assistant, Studly Surfer, Anne learned that the rumors had some basis in truth. Though it was only mid-morning, the smell of alcohol was distinct on Mimi’s breath, and her speech was quite slurred. Anne was a bit surprised to see Studly with Mimi; Anne had represented Studly in negotiating his generous settlement with the estate of Ginger Lemieux, for whom he had also worked as a personal assistant. Neither Anne nor Studly acknowledged each other, however.
Anne asked Mimi if Studly could wait in the reception area, but Mimi responded: "I keep no secrets from him," and demanded that Studly stay with her. Mimi asked Anne to write a new will for her. When Anne asked about previous wills, Mimi pulled out one that had been written by Bill Bliss two years ago. From the wording, Anne determined that Mimi and her husband Otto had made reciprocal wills, with each leaving all their property to the other. Mimi announced that she was suffering from a terminal illness, and while she didn’t want to divorce her husband, she confessed her love for Studly and her desire to leave all her possessions to Studly, as he was taking such good care of her now. Studly smiled graciously. Anne agreed to write the new will, and Mimi and Studly left.
Over lunch the same day, Anne told Bill about her morning visitors (though omitting the client’s name, and the fact that Bill had drafted the previous will). Both agreed that the husband would be furious if he knew.
The next morning, Otto (Mimi’s husband), came into Bill’s office for a quarterly meeting of their company, TalentFinders. Otto asked if Bill knew why Mimi and Studly had visited this office building yesterday. Bill remembered the previous day’s lunch conversation with Anne, and knew instantly that Mimi and Studly were the ones Anne had talked about. Recognizing the sensitive nature of the matter, Bill said only: "I didn’t see them."
Bill and Otto had organized the company three years ago, with Bill contributing legal services for his one-half interest, and Otto contributing $15,000, along with his services as executive director. At their last meeting, Bill and Otto discussed TalentFinders’ cash shortage, and Otto agreed to come up with some solutions. At this meeting, Otto said that he had found a temporary solution to the cash flow problem: he had taken the money from Mimi’s trust, for which he served as trustee. Bill, who had set up the trust (which receives royalties from Mimi’s films), shook his head and said: "Otto, you know that the trust terms don’t allow you to do that!" Otto replied: "I’ll put the money back, with interest, when we get TalentFinders back on its feet."
Bill agreed that they should try to repay the money, but said that they should find a different source for future cash infusions. Otto said that he had talked with a loan officer at The Bank of Iniquity, who said she would be glad to consider their company’s application, so long as it included an opinion letter from the company’s outside attorney, giving the lawyer’s opinion that TalentFinders has no outstanding loans or contingent liabilities. Bill agreed that was a good idea, and wrote an opinion letter to the bank stating his professional opinion that TalentFinders has no oustanding loans or contingent liabilities.
You are a lawyer working as a risk assessor for Anne and Bill’s legal malpractice insurer, but you also happen to be a friend of Carl, their secretary (who knows only that you work for an insurance company). Over drinks, Carl relates the above facts to you, which he has learned through his individual conversations with Anne and Bill. The two of you laugh about the wild things one sees in law offices. But the next morning, being a diligent employee of the malpractice insurer, you realize that you need to inform your superior of these lawyers’ conduct.
QUESTIONS
PART 1: Write a memo detailing Anne and Bill’s ethical problems, being sure to describe areas of likely exposure to malpractice liability.
PART 2: Indicate how your analysis in Part 1 would differ if the State of Iniquity had adopted the Kutak Commission’s recommendations for Model Rules 1.6 and 4.1.
FINAL EXAMINATION ! PROF. TUTTLE ! SPRING 1996
PROFESSIONAL RESPONSIBILITY §20
You are a lawyer practicing in Burns City, the State of Friedenthal and a recognized expert in legal ethics. You have been consulted by Anne Activist, a well-known public interest lawyer and founder of Homes for Humans, an organization which promotes home ownership for residents of low-income housing. Anne is admitted to the bar of the State of Friedenthal. In your office, Anne tells you the following story:
About four years ago, Dennis Developer built Bluewater, a community of twenty single-family, affordable homes around Lake Lerner, in the nearby town of Trachtenberg. Given that Trachtenberg had very little housing for people with low incomes, Homes for Humans applauded Developer’s efforts. But the ensuing four years has changed residents’ (and Anne’s) estimation of Developer and his Bluewater project. Just after the residents’ one-year warranty expired, many basements started to flood badly. And now most of the homes have significant roof leaks as well. The cost to repair these problems--which cannot be avoided--has become so expensive that several residents have been unable to meet their mortgage obligations, and are now facing foreclosure and homelessness.
Anne heard about these problems from a friend who lives in Trachtenberg, and decided to get involved. On an evening last month, Anne visited Bluewater and went door-to-door, handing out her business card and a flyer inviting residents to a seminar she was going to hold the following Friday evening. Anne specifically avoided discussing the matter with anyone, telling those who were interested to come on Friday. The flyer she distributed read:
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TIRED OF WET BASEMENTS AND LEAKING ROOFS?
YOU HAVE A LEGAL RIGHT TO BE DRY IN YOUR HOME!
FREE CONSULTATION WITH A LAWYER
COME TO A SEMINAR FRIDAY NIGHT AT
THE TRACHTENBERG INN, 6:00PM
Appetizers and Soft Drinks Provided
Sponsored by Homes for Humans,
a non-profit institution dedicated to safe and affordable housing for all
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Fifteen people attended Anne’s seminar that Friday evening, where she discussed with them possibilities for postponing foreclosures and for getting compensation from Developer for their basements and roofs. At the end of her talk, Anne said that she, on behalf of Homes for Humans, would be willing to take anyone’s case against Developer. She also said that her fee would only be 10% of whatever any client collected from Developer.
Anne was surprised when only two of the fifteen waited to talk with her after the seminar. They explained that Developer’s sister, Diane, is mayor of Trachtenberg, and doesn’t respond well when her brother is criticized. The last time anyone made noises about suing Dennis, Diane managed to have the trash collectors ignore Bluewater for a month. Anne thanked the two for their courage, and scheduled a meeting with them the following week.
The next Wednesday, Barb and Claude, the two Bluewater residents, drove to Anne’s office in Burns City. Barb and Claude explained that they had each purchased a home from Developer, with Barb’s home backing onto the lake, and Claude’s sitting immediately across the street from Barb’s. Both claimed to have suffered significant water damage from basement flooding and roof leaks, and Anne asked each of them to provide a detailed list of costs they had incurred because of the water. Anne again explained the terms of her representation, including the 10% fee, and Barb and Claude said that they understood and agreed to have Anne represent them against Developer. Barb and Claude also asked Anne to draft an easement across Barb’s property allowing Claude to use it for putting his boat in the lake, so Claude could use the path even if Barb later sold her house. Anne agreed, and said the papers would be ready to sign when they met again the next week.
During the week between their meetings, Anne had a home inspector visit Barb and Claude’s houses to determine the extent of the damage. When they met again, Barb and Claude provided Anne with detailed lists of their costs due to water damage. Anne had each of them sign their lists, and also sign the easement deed she had prepared, which granted Claude a permanent easement across Barb’s land. Attaching a copy of the home inspector’s report and Barb and Claude’s lists of damages, Anne wrote a letter to Developer, threatening a lawsuit for violating the state’s building code unless Developer paid Barb and Claude $15,000 each.
As an aside, Anne mentions that, following their second meeting, she and Claude went out for dinner--Barb needed to return home, so she could not accompany them. While the dinner began as an informal way of getting to know her clients better, Anne and Claude discovered a mutual attraction, and have since developed an intimate relationship. Anne says they have kept the relationship a secret from Barb (and everyone else but you), since Claude had recently broken up with Barb’s sister.
To prepare for what she expected to be a drawn out battle with Developer, Anne hired Perry, an experienced paralegal who at one time worked for Developer’s lawyer Larry, handling Developer’s building code compliance. Perry had left Larry’s firm before the Bluewater project, however. Anne has not told Larry or Developer that she has hired Perry.
A week after Anne sent the letter to Developer, she received a phone call from Developer’s lawyer Larry, who conveyed Developer’s request to "sit down and talk this out like adults." A few days later, Anne, Barb and Claude met with Larry and Developer to discuss the water problems. After hearing Barb and Claude describe the damage to their homes, Larry replied: "We think you all should be compensated, so we will pay you the full amount you have requested, but on two conditions: first, Anne must agree not to bring, or help others to bring, any lawsuits relating to Developer’s conduct in the Bluewater project; second, you all must maintain strict confidentiality about this settlement. If anyone else hears of it from you, we will sue you for breach of contract." Anne asked for a break in order to confer with her clients in private.
Barb and Claude seemed eager to settle on these terms, but Anne refused: "Think of your obligations to your neighbors. Aren’t we fighting for safe and affordable housing?" Barb and Claude continued to press for settlement, but Anne remained adamant, and they returned to the table. After informing Developer that they rejected his offer, Developer countered: in addition to the $15,000 for Barb and Claude, he offered to contribute $5000 to Homes for Humans. Anne, Barb and Claude conferred again, and this time accepted Developer’s settlement terms. Anne and Larry reduced the agreement to a written contract, and each party signed it (including Anne).
While celebrating their victory over Developer at a restaurant, Barb whispered to Anne (with no one else around) that her roof had been leaking, but the water damage in her basement had actually been caused by a malfunctioning washing machine. Before Anne could reply, Claude returned to the table. Anne has said nothing about this to anyone since Barb’s admission.
Just a few days ago, Developer brought his donation to Homes for Humans to Anne at her office, and said that he had been impressed with her work. Developer asked Anne to work as his lawyer on several current low-income housing projects.
Questions
1) Anne asks you for advice about Barb’s disclosure and Developer’s offer of employment, and about any other ethics issues she might have overlooked in connection with the Bluewater case. Write a memo to Anne explaining her ethical problems, along with any areas of exposure to malpractice liability, arising out of the Bluewater case. (90 points)
2) Assume that Anne has accepted the $5000 check on behalf of Homes for Humans, but Developer has refused to pay Barb and Claude. May Anne now file suit against Developer for breach of contract? (10 points)
END OF EXAMINATION