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Conflict of Interest - Examples• Overreaching or Fraud
– Example: Making a profit at expense of client• Witness
– Example: Representing a client when you may be a witness
• Financial interest in the case– Example: Being financially involved in the litigation
of the client• Gifts– Example: Accepting more than nominal value
• Intimate Relationship – Dating current and probably former client
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Conflict of Interest - Examples• Representing seller and purchaser• Representing insured and insurer• Representing husband and wife• Representing debtor and creditor• Joint representation of criminal defendants (in most cases)
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Conflict of InterestRemember: Ethical wall and waiverA lawyer who has formerly represented a client in a mattershall not thereafter:represent another person in the same or a substantially related matter inwhich that person’s interests are materially adverse to the interests of theformer client unless the former client consents after consultation . . .
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It wasn’t until the landmark Supreme Court case of Bates v. State Bar of Arizona, 433 U.S. 350 (1977), that lawyer advertising was declared to be protected commercial speech under the First Amendment.
In the years since the Bates v. State Bar of Arizona case was decided, there has been a significant increase in lawyer advertising. Each state has its own ethical rules regulating attorney advertising and the solicitation of prospective clients.
Unit 6 Review: Advertising
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What can a lawyer advertise?
• Name• Address • Phone Number• Areas of Practice• Contingency fee basis (some states you can state “no fee
unless you win,” but you must disclose if there are expenses)
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What can a lawyer not advertise?
• Some states:– Examples that create unjust expectations• Prior “win” record• Amounts of previous damage awards• Subjective claims as to the quality of the lawyer’s services or
credentials– “expert,” “highly qualified, “experienced”
– Testimonials by current clients or paid endorsements– Nicknames, mottos, trade names that suggest an ability to
obtain results– Fictionalized portrayals of clients, judges, or lawyers
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Solicitation• Almost all forms of solicitation are not permitted – Solicitation is in person, by telephone, or by written
communication that is directed to a specific individual– Ambulance chasing– Offering your unsolicited legal services
– Advertising, on the other hand, is directed to the public
at large
Direct Mail is somewhere in between Solicitation andAdvertising and is allowable in some states, while inothers it is prohibited
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Fair Fees and Client Trust Accounts • One of the most common ethical violations in the legal profession: mishandling of clients' money. • Paralegals play a large role in financial matters, from billing clients to maintaining client trust funds. • It is therefore essential for students who plan to be legal assistants to have a complete understanding of attorney fees, ethical billing practices, and the duties required in handling client funds.
Unit 7 Review: Fees & Trust Accounts
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Fee Agreements should include:1. identify the client(s); 2. identify the lawyer primarily responsible for handling the file; 3. describe the nature and the scope of the representation; 4. set out the objectives of the representation; 5. tell the client what you expect from the client, such as timely responses to your requests and absolute truthfulness; 6. set out the basis for calculating the fee; 7. make clear the responsibility for paying costs and give some examples of standard costs; 8. describe the method, manner, and frequency of billing, including how any retainer money held in trust will be used; 9. make a disclaimer about results; 10. set forth the process for dealing with unpaid bills (are you going to arbitrate disputes?); 11. Tell the client what happens if the firm needs to terminate the representation; 12. make a disclosure about professional liability insurance; and 13. make a clear statement about what will happen to the files at the conclusion of the case (remember, you don’t want to store those files!) and if the representation is terminated.
Fee Agreement
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• Fee agreements are normally negotiable 1. Types of fee agreements
• Contingency Fees• Mostly for personal injury cases• Attorney’s fee is a portion of settlement/award• Fee structure needs to be fully explained to client in advance• Cannot be “objectively unfair;” court will review:
• the sophistication of the client• how well the contract was explained, and• how acceptable the fee agreement would seem to the average person.
•Provide a full accounting at conclusion of case• Watch for overreaching!
Fee Agreements - Types
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2. Hourly Billing• Each client is assigned an hourly billing rate• Normally lawyers, law clerks, and paralegals have
different billable rates• Should keep billing records contemporaneously • Normally bill in 30-day increments
For example:
Daily Time SheetDate: 4-4-10 Employee: Dan Molnar30 minutes for S. Smith – Discussed DWI case120 minutes for K. Davis – Researched client’s employment
record
Fee Agreements - Types
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3. Value Billing – Charging a flat rate for certain tasks• $200 for drafting a complaint• $400 for a court appearance
4. Bonus Billing – Reduced hourly rate and a bonus for good results
5. Fixed Fee Billing – One flat rate for representation no matter how long matter takes• For example, bankruptcy or divorce
6. Blended Rate Billing – Flat rate for all billable employees
Fee Agreements - Types
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• Retainers are fees that are paid in advance• Types of retainers• “Classic” Retainer – A fee paid to “reserve” theservices of an attorney. Sometimes called a nonrefundable retainer. • Advance Payment Retainer – Is a present
payment for a future service and is considered earned upon receipt
• Security Retainer – Is to secure payment for future services; remains property of client until applied to charges for services and any unused amounts are refunded to client.
Retainers
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• All client monies need to be held in a separate bank account called a client trust account• Settlement proceeds or damage payments or
advances • Must be interest-bearing• In many states interest does not go to clients
but to the State Bar to fund free legal services• Attorneys should have separate operating account
from which payroll, expenses, etc. are paid• Never commingle funds!• When in doubt, as your State Bar!
Client Trust Accounts
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•“Typical” torts defenses• Comparative Fault• Contributory Negligence• Assumption of Risk
• Acting in Good Faith• When a legal professional acts in good faith with an honest belief that his or her acts and advice are in the client’s best interest and they are based on accurate information and adequate research, the legal professional will not be liable for mere errors in judgment.
What are defenses to negligence?
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Wrap-up
– Questions? Comments?– Good luck on your final exam!