19th annual professional responsibility seminar

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Recent
DEVELOPMENTS
presented by
Geoffrey Stern

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Defending Jacob
A Test of Guilt + Innocence
presented by Judge
Charles Schneider

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Rule 1.7
Current Client Conflicts

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A lawyer’s acceptance or continuation of
representation creates a conflict of interest if:
1
the representation will be directly
adverse to another current client, OR
2 there is a substantial risk that the lawyer’s
ability to consider, recommend, or carry
out an appropriate course of action for that
client will be materially limited by the
lawyer’s responsibilities to another client, a
former client, or a third person or by the
lawyer’s own personal interest

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Even with a
conflict, lawyer
may proceed, IF

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Lawyer provides competent + diligent
representation to each affected client
Each affected client gives informed
consent, confirmed in writing
Representation is not
precluded by 1.7 (c)
AND
AND

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Agreement by a person to a proposed
course of conduct (having lawyer continue
with representation) after the lawyer has
communicated adequate information
and explanation of the material risks of
and reasonably available alternatives to
the proposed course of conduct

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Rule 1.9
Former Client Conflicts

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A lawyer who has formerly represented a client
shall not thereafter represent another person:
1
In the same or a substantially
related matter in which
2 the current client’s interests are
materially adverse to the former
client, UNLESS
The former client gives informed consent,
confirmed in writing.

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Current vs. Former
Client Conflicts

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CURRENT FORMER
Direct Adversity
Substantial risk
that lawyer’s
judgment will be
materially limited
Each client waives
Only if same or
substantially-
related matter
Current + former
client materially
adverse in current
matter
Former client
waives

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Law firm with 150
lawyers and offices in
Cincinnati + Columbus
Cincinnati: Environmental
lawyer – 3 year partner
Columbus: Transactional
lawyer – 25 year partner

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Firm did environmental work for
Client “A” a handful of times
over 10 yrs - last work was 2010
Columbus lawyer has long-
standing relationship with
Client “B”
6/2014: Client “A” calls + asks
for a review of environmental
questions about Akron property
Cincinnati lawyer looks at
material + spends hour
advising Client “A”
Tells Client “A” he needs more
information to provide more
detailed analysis
At client request, time is billed
on an old closed matter
8/2014: Client “B” contacts
Columbus lawyer and wants
assistance with commercial
real estate purchase from “A” –
Toledo property
Columbus lawyer starts working
on transaction for Client “B”

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12/2014: “A” reneges on
purchase agreement and wants
purchase money back
Cincinnati lawyer tells his
Columbus partner – did one
hour’s worth of work for “A” in
June and hasn’t heard from
them since
On behalf of Client “B”
Columbus lawyer tells “A” that
purchase money has been
forfeited
Columbus lawyer does conflicts
check – finds out firm had
represented “A” on
environmental matters and
calls Cincinnati lawyer but
doesn’t tell him about possible
litigation between “A” + “B”

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2/2015: “A” sends additional
material to Cincinnati lawyer
for him to review
2/2015: “A” files suit against
Client B. Columbus lawyer sends
complaint to litigation partner
for prep of counterclaim
Cincinnati lawyer tries,
unsuccessfully, to contact CEO
of “A” to get info for conflicts
check
3/2015: Cincinnati lawyer gets
info and runs formal conflicts
check to represent “A”
Has associate start review of
materials
3/2015: Columbus lawyer runs
formal conflicts check to
represent B in litigation

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3/7/2015: Cincinnati lawyer
learns that conflicts check
reveals that as he is opening a
file for the environmental review
for “A,” his Columbus partner is
currently representing “B” in
“A v. B”
3/7/2015: Columbus lawyer
learns that his junior Cincinnati
partner is opening a file to do
some environmental work for
“A” while he reviews the counter
claim against “A” on behalf of B

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1. 2. 3.
1 1 1
Is there a conflict of interest between
representation of “A” in environmental
matter in Akron AND “B” in real estate
transaction now in litigation?
1. Yes
2. No
3. I don’t know

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Type of Conflict
Former
Client
Conflict
Current
Client
Conflict

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1. 2. 3.
1 1 1
Is it a former client conflict
or a current client conflict?
1. Former client
conflict
2. Current client
conflict
3. I don’t know

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1. 2.
1 1
Direct adversity between two current clients
OR substantial risk that lawyer’s ability to consider,
recommend, or carry out an appropriate course of
action for that client will be materially limited by
lawyer’s responsibilities to another client conflict?
1. Direct adversity
between 2 current
clients
2. Substantial risk
that lawyer’s
judgment/actions
will be materially
limited

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Back to our
LAWYERS…
Per direction of
senior Columbus
partner, Cincinnati
lawyer tries to contact
CEO of “A” to request the
waiver
Columbus lawyer
decides “A” is a
former client and
tells Cincinnati lawyer
not to do any work
on new matter
for “A” unless and
until “A” waives
the conflict

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Lawyers for “A” in A v. B lawsuit
request the Firm withdraws from
representing B in suit

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1. 2.
1 1
Should law firm withdraw?
1. Yes
2. No

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“A” files motion to
disqualify law firm
because of conflict
of interest

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1. 2. 3.
1 1 1
Should law firm pay for the
defense of the motion or ask
client to pay?
1. Law firm
2. Ask client to pay
3. How should I
know

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Judge asks
Cincinnati partner
“At time you received call
from “A” about environmental
question in June 2014,
did you consider “A”
a firm client?”
At Disqualification Hearing...
Cincinnati partner
“Yes, but I didn’t open it as
a new matter because
they didn’t want me to.
I did not expect to hear
from them again
about that issue.”

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Corporate officers from
“A” testify that they
considered Cincinnati
partner their lawyer
on the environmental
issue and fully
intended to get back
to him with further
information
And they did get
back to him
in 2/2015

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1. 2. 3.
1 1 1
So, what DOES determine
whether an individual/entity
is a client?
1. The lawyer’s
understanding
2. The client’s
understanding
3. I don’t have clients
so I don’t care

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Did the
individual/entity
seek to form a
professional
relationship?

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Did the lawyer
respond in a way
that could create
a reasonable belief
in the individual/entity
that the relationship
had been formed?

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What are the
manifest
intentions of the
attorney and the
prospective
client?

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1. 2. 3.
1 1 1
Does it matter that Cincinnati office
only started review of “A’s”
materials and never shared analysis
with “A” of environmental issues?
1. Yes, it matters that
nothing was shared
with “A”
2. No, it doesn’t matter
in the conflicts
analysis
3. How should I know?

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If judge finds “A” was a
former client what
happens?
The two matters are NOT the same or substantially related
NOT a former client conflict

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If judge finds “A” was a
current client what
happens?

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When Columbus partner told Cincy partner –
get a waiver before you do any further work
Remember – Columbus partner thought
it was a former client
Let’s Go Back

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But the judge said it was a
current client conflict…

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1. 2.
1 1
If the judge was right – current
client conflict – any problem with
Cincy lawyer contacting CEO of “A”
to seek a waiver?
1. Yes, definitely a
problem to ask client
for waiver under
these circumstances
2. Nope, one is always
able to contact one’s
client to seek a waiver

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Judge thought
BIG
problem…
it was a

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Concluded that a firm which
is aware it is representing
directly adverse clients in
separate matters, yet
seeks a waiver of the
conflict from one client
despite firm’s knowledge
that client is represented
by counsel from another
firm, is acting in bad faith
By bypassing opposing
counsel, the firm acts
with a dishonest purpose,
moral obliquity, conscious
wrongdoing, and in
breach of a duty, premised
on an ulterior motive to
obtain a benefit or
advantage it could not
otherwise obtain

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Mid-sized law firm represents individual since
early 1990s mostly in business transactions
Client buys and
services debt
instruments – enters
business arrangement
with new partner
New partner to
supply capital to buy
debt instruments,
client to service
debt instruments
Client + new partner
agree to allocate
ownership of debt
between client (1/3) +
new partner (2/3)

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New partner’s
investment to be
paid off from
proceeds received
from debt
instruments
Client + new partner
agree to form
new LLC
(1/3) + (2/3)
Client, using LLC,
agrees to service
debt instruments,
pay off new partner
and then split
profits with
new partner
Client tells law firm
to bill new LLC for all
debt servicing work
done on newly acquired
debt purchased with
new partners’ funds
Client shares all
financial information
on debt purchases
along with invoices
from law firm with
new partner
THEN

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New partner tells
client “you have no
ownership interest
in debt (I paid) + LLC
never formally existed
(not filed with
SOS office)
New partner sues
client for ownership
of all debt purchased
under arrangement
Law firm represents
client in suit brought
by new partner
New partner files
motion to disqualify
law firm saying
that law firm, all
the while, was
his lawyer too
Attaches all the
financial info
and invoices
from law firm
All firm invoices were
paid out of a bank
account in the name
of non-existent LLC

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1. 2. 3. 4.
1 1 1 1
Was law firm representing client + new partner? Was
law firm representing client + non-existent LLC?
Was law firm representing all three?
Was law firm representing only client?
1. Client + new partner
2. Client + non-existent
LLC
3. All three
4. Only client

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1. 2. 3.
1 1 1
Is it a former client conflict or a
current client conflict?
1. Former client conflict
2. Current client conflict
3. I don’t know

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1. 2.
1 1
New partner’s lawyers in litigation
requests that law firm withdraw
from representation of client
1. Yes
2. No

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Firm lawyer assists agency
to obtain Federal and State
grants to provide
transportation for
3 counties
Grant contract says Federal
government retains
interest in any property
acquired with grant funds
Grant funds are used to
purchase land
(transportation center),
lawyer represented agency
in land purchase
3 years later, bank, long-
standing firm client, asks
firm to do title search on
property in question for
possible mortgage to agency

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Firm handles closing for
bank on new mortgage
to agency
Government tells firm deed
needs to contain reference
to our contingent interest
Firm thinks since this
post-dates mortgage no
impact on bank’s position
and doesn’t even notify
bank of new deed
Agency defaults on
mortgage, Federal Judge’s
opinion says
government’s interests
supercede bank’s interests
in property

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Is there a
conflict of
interest?

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Is there a
conflict of
interest?
 Law firm represented agency in obtaining grants and the closing on the
purchase of the property
 3 years later, law firm represented bank in title work and closing on
subsequent mortgage on property
 Law Firm omits reference to government interest in property in title

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1. 2. 3.
1 1 1
Is it a former client conflict or
a current client conflict?
1. Former client conflict
2. Current client conflict
3. I don’t know

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Firm does trust for husband + wife in 2007
If both husband + wife pass, partner will be trustee
Fast forward, 2016 – firm represents Airport Authority
Airport Authority has dispute with husband and wife
about renting space for their airplane

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1. 2. 3.
1 1 1
Does the fact that partner is
potential successor trustee create a
conflict of interest for firm’s
representation of Airport Authority?
1. Yes
2. No
3. I’m not
answering

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So what is
the relevant
question?

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Make sure your clients are happy AND
be clear when they are former clients……
And be very clear who you do + do not represent
Preferably in writing

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Thank You!
Jonathan E. Coughlan
Director, Kegler Brown Hill + Ritter
jcoughlan@keglerbrown.com
keglerbrown.com/coughlan
614-462-5455

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presented by Chris Weber + Jason H. Beehler

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Kickback TRILOGY
Zuckerman Linick Kanter

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IHC for Glidden Refers cases to
Zuckerman
Z bills Glidden
IHC approves
Z gives ½ fees
to IHC
OSBA v. Zuckerman (1998)

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Rule 7.2(b)
Professional
Employment

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Rule 7.2(b)
Lawyer shall not give anything of
value to person for recommending
lawyer’s services.

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Rule 1.5
Lawyers not in same firm may divide fees ONLY
IF all of the following apply:
Fees divided in proportion to services
performed by each lawyer
Client gives written consent after full
disclosure
Closing statement signed by client and all
lawyers in contingent fee case
Total fee is reasonable

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Same Same Same
Same
Now we’re
talking about
Linick (IHC)
OSBA v. Linick (1998)

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Rule 8.4
Dishonesty,
deceit

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Rule 8.4
It is professional misconduct for
a lawyer to . . . engage in
conduct involving dishonesty,
fraud, deceit, or
misrepresentation.

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The panel noted in
mitigation . . . that Glidden
was happy with
respondent’s performance
as a lawyer.
Majority Opinion

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“Sure, you stole $38,000
from us – but great work
on that brief!”
Glidden

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Linick was the mastermind
and the beneficiary of the
scheme. His discipline
should therefore be greater
than Zuckerman’s.
Lundberg Stratton

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Same Same Same
Same Same
OSBA v. Kanter (1998)

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Let me make something
very clear: Mr. Linick
received no monies from
me for work related to
Glidden.
Kanter

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“we strongly disapprove
+ condemn such
practices.”
Court’s message on
“kickbacks”

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Company “should be
able to rely on IHC to
choose honestly among
attorneys”
“we strongly disapprove
+ condemn such
practices.”
“undermine
lawyer/client
relationship”

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+ Shooting victims sue Sheriff
+ Plaintiff sends preservation letter to Sherriff’s IHC
(Lane)
+ Lane - no litigation hold
+ Evidence destroyed – laptop, electronic data,
guns dissembled
Swofford v. Eslinger

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Swofford v. Eslinger
Held:
+ Notifying EEs not enough
+ “Affirmative steps to monitor compliance”
+ “bad faith destruction” – inference that evidence unfavorable
+ Lane jointly/severally liable for fees/costs

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+ Capital sued over failure to disclose liens
+ Capital’s IHC (Phelps) on notice of potential
litigation
+ fails to: (1) issue litigation hold; (2) suspend doc
retention/destruction; (3) Search e-discovery
properly
Surowiec v. Capital Title

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Surowiec v. Capital Title
Held:
+ Duty to preserve evidence
+ Capital liable for fees/costs relating to later
proper discovery

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Cache v. Land O’Lakes
+ Land O’Lakes IHC issued litigation hold
+ But no steps to monitor compliance
+ Held: "litigation hold" without more insufficient
+ IHC has duty to monitor compliance
+ Ensure available responsive info produced

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+ IHC did not timely issue litigation hold
+ No attempt to collect data
+ Special Master appointed to investigate
+ IHC destroys info on morning of SM’s visit
PIC Group v. LandCoast
Insulation

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PIC Group v. LandCoast
Insulation
Held:
+ Acted with “callous/careless attitude toward discovery”
+ Ordered to produce contents of wiped computer
+ Pay plaintiff’s attorney’s fees/costs
+ Pay SM expenses
+ Defendants pay – not carrier

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Confirm receipt +
compliance
3

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Suspend document
destruction/purging
4

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Rule 1.6
A lawyer shall not reveal
information relating to the
representation of client [unless
otherwise permitted/required].

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IHC: non-
legal/
business
functions
IHC: acts as
lawyer

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+ Wrongful discharge
+ IHC - member of review committee
+ Plaintiff sought committee minutes/communications
+ Where business and legal intertwine – “legal advice must
predominate” to be protected
+ “when legal advice is merely incidental to business advice,
privilege does not apply”
Neuder v. Batelle

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Neuder v. Batelle
+ Committee’s primary purpose – terminate plaintiff
+ A business purpose
+ IHC acting in business capacity as committee
member
+ IHC self serving affidavit insufficient

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Alomari v. ODPS
+ Relied on Neuder
+ Where business/legal intertwine – “legal advice
must predominate” to be protected
+ IHC at mtg to give legal advice
+ A/C privilege applied

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Neuberger v. Lola Brown
+ Where “IHC involved, presumption that attorney’s
input is more business than legal”
+ Apply “heightened scrutiny” to IHC communications
+ Prevent corporate clients from hiding behind veil of
secrecy by using IHC as conduits of otherwise
unprivileged info

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Lindley v. Life Investors Insur.
+ Business advice not privileged
+ Must show “primarily a legal purpose”
+ If mixed business/legal, redact only primarily legal
+ If “inextricably intertwined,” does legal purpose
outweigh business purpose

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Henderson Apt. v. Miller
+ EEs must be seeking legal advice
+ Cc IHC on communications not enough
Protection:
+ Caption email – “confidential/for purpose of legal advice”
+ “litigation related”

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Rule 5.3
“A lawyer having direct supervisory
authority over nonlawyer shall
make reasonable efforts to ensure
that person’s conduct is
compatible with professional
obligations of lawyer”

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Mahoning Cty. Bar v. Lavelle
+ Assistant placed false information on documents
and misled mortgage company
+ Forged respondent's signature + falsely notarized

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“[I]t is a lawyer's duty to
establish a system of
office procedure that
ensures delegated legal
duties are completed
properly."

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Lawyer “violat[ed] the
trust that his clients and
others placed in him and
his office staff.”

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Accounting
checks + balances
3

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Periodic team
meetings + updates
4

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Did you have
reasonable
procedures
in place?

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Hauser v. TCP
+ Rule 1.13(b) - duty to report “up the ladder”

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+ IHC - Union Pacific
+ IHC Defends depo of Yanez (UP employee)
+ Yanez feared testimony would harm company
+ IHC assured Yanez “I am your attorney”
Yanez v. Plummer

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+ Q’s by plaintiff’s counsel – denied seeing accident
+ IHC cross examines Yanez
+ Shows signed document indicating he saw accident
+ UP fires Yanez for dishonesty
Yanez v. Plummer

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Yanez v. Plummer
+ Yanez sues for wrongful termination, legal
mal against IHC
+ Held: IHC had conflict for representing UP
and Yanez
+ IHC - equal duties of loyalty to both

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JOINTRepresentation
Both corp. + EE
(i.e. litigation)
Identify potential conflicts
Get consent
Encourage right to seek
independent counsel
No secrets
If conflict arises, get advance
waiver to represent corp.

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Thank You!
Christopher Weber
Kegler Brown Hill + Ritter
cweber@keglerbrown.com
keglerbrown.com/weber
614.462.5415
Jason Beehler
Kegler Brown Hill + Ritter
jbeehler@keglerbrown.com
keglerbrown.com/beehler
614-462-5452

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