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End-of-life notice: American Legal Ethics Library

As of March 1, 2013, the Legal Information Institute is no longer maintaining the information in the American Legal Ethics Library. It is no longer possible for us to maintain it at a level of completeness and accuracy given its staffing needs. It is very possible that we will revive it at a future time. At this point, it is in need of a complete technological renovation and reworking of the "correspondent firm" model which successfully sustained it for many years.

Many people have contributed time and effort to the project over the years, and we would like to thank them. In particular, Roger Cramton and Peter Martin not only conceived ALEL but gave much of their own labor to it. We are also grateful to Brad Wendel for his editorial contributions, to Brian Toohey and all at Jones Day for their efforts, and to all of our correspondents and contributors. Thank you.

We regret any inconvenience.

Some portions of the collection may already be severely out of date, so please be cautious in your use of this material.


Louisiana Legal Ethics

1.8   Rule 1.8 Conflict of Interest: Prohibited Transactions

1.8:100   Comparative Analysis of Louisiana Rule

¥ Primary Louisiana References: LA Rule 1.8
¥ Background References: ABA Model Rule 1.8, Other Jurisdictions
¥ Commentary:

1.8:101      Model Rule Comparison

LRPC 1.8 begins with the general premise that all transactions between a lawyer and his client should be fair and that a lawyer may not exploit the representation of his client to the clientÕs disadvantage. This introductory statement is followed by specific examples of transactions which violate this general rule. MR 1.8 lacks the introductory statement, although similar language appears in Comment 1 to MR 1.8.

LRPC 1.8(a) adopts MR 1.8(a) verbatim. Both LRPC 1.8(b) and MR 1.8(b) prevent a lawyer from using information obtained from the representation of his client to the clientÕs disadvantage without the clientÕs consent. MR 1.8(b) allows the lawyer to use this type of information when Òpermitted or required by Rule 1.6 or Rule 3.3.Ó LRPC 1.8(b) allows no such exception. Louisiana Paragraphs (c) through (e) were adopted verbatim from MR 1.8(c) through (e). Both LRPC 1.8(f) and MR 1.8(f) provide that a lawyer may not accept payment from a third party unless the client consents, there is no interference with the lawyer-client relationship and information regarding the representation is protected as provided in LRPC 1.6 or MR 1.6, respectively. LRPC 1.8(f)(1) adds that a lawyer may accept payment from a third person if either the client consents or payment is provided pursuant to a contract the client has with the third person. The Model Rules have no similar provision. Louisiana Paragraphs (g) through (j) are identical to MR 1.8(g) through (j). LRPC 1.8 also adds an additional section, Paragraph (k). LRPC 1.8(k) prevents a lawyer from negotiating an agreement with his client which would allow him to enter into a settlement without first obtaining the clientÕs consent. MR 1.8 has no explicit counterpart to LRPC 1.8(k).

1.8:102      Model Code Comparison

LRPC 1.8 prevents a lawyer from engaging in unfair transactions with his client and from exploiting the representation of his client or the information gained through the representation to the clientÕs disadvantage. Paragraphs (a) - (c) list examples of violations of this general rule. Paragraph (a) forbids a lawyer from entering into a business transaction with his client or knowingly acquiring any type of pecuniary interest adverse to his client. A lawyer may enter into such a transaction if the terms are fair and reasonable to the client and fully disclosed, in writing, to the client in a way that he can understand. The client must have the opportunity to seek advice of independent counsel and must consent in writing. DR 5-104(A) forbids a lawyer from entering into a business transaction with a client who has differing interests and who expects the lawyer to protect the clientÕs interests unless the client consents after full disclosure. LRPC 1.8(a) is a broader prohibition because it prevents this sort of transaction regardless of the clientÕs expectation that the lawyer will protect his interests and because it applies to more than business transactions. Once the rule is implicated, the Model Code allows the transaction if the client consents. The Louisiana lawyer must have the clientÕs consent and meet the additional criteria set out in LRPC 1.8(a) before entering into this type of transaction.

LRPC 1.8(b) prevents a lawyer from using information relating to the representation of the client to the disadvantage of the client unless he consents after consultation. DR 4-101(B)(2) prevents a lawyer from knowingly using a confidence or secret of the client to the clientÕs disadvantage. The Model Code creates an absolute bar on the use of this information, allowing no exception when the client consents. DR 4-101(B)(3) prohibits an attorney from using a clientÕs confidence or secret to his, or a third personÕs, advantage without the clientÕs consent after full disclosure. Louisiana has no comparable rule. Thus, a Louisiana lawyer could use information relating to the representation of his client without the clientÕs consent as long as the client was not disadvantaged and no other laws or rules were implicated. DR 4-101(D) imposes a duty upon the lawyer to exercise reasonable care in preventing his associates or employees from disclosing secrets or confidences of the client except as allowed by DR 4-101(C).

LRPC 1.8(c) forbids a lawyer from preparing an instrument which gives the lawyer or his spouse, parent, child or sibling any substantial gift unless the client is related to the donee. Although not addressed by the Disciplinary Rules, EC 5-1 states that a lawyer should exercise his professional judgment free of compromising influences and loyalties. EC 5-5 advises that a lawyer should not suggest that a client make a gift to the lawyer himself or for his benefit. In most cases, a lawyer should insist that the instrument giving this gift be prepared by another lawyer. LRPC 1.8(d) forbids a lawyer from acquiring literary or media rights to an account or portrayal based substantially upon the information relating to the representation prior to the conclusion of the representation. DR 5-104(B) restricts the lawyerÕs acquisition of publication rights from clients and prospective clients.

LRPC 1.8(e) prevents a lawyer from providing his client with financial assistance in connection with pending or contemplated litigation. The lawyer may advance court costs and expenses, the repayment of which may be contingent on the outcome, and, if the client is indigent, the lawyer may incur this expense outright. DR 5-103(B) provides the same general rule against the lawyer advancing litigation costs and expenses to his client. Although not expressly stated in the Louisiana Rules, the Model Code allows a lawyer to advance costs associated with litigation as long as the client remains ultimately liable for the cost. The Model Code provides no opportunity for a lawyer to absorb costs for his indigent clients nor does it specifically allow a lawyer to advance funds, repayment of which is contingent on the outcome of the case.

LRPC 1.8(f) prevents a lawyer from accepting payment from a third person unless the client consents after consultation or the third party provides payment pursuant to a contract it has with the client (as with an insurance contract). Regardless of the arrangement, a lawyer must refuse compensation from a third person if his professional judgment and relationship with the client will be affected or if he is required to reveal any confidential information protected by LRPC 1.6. DR 5-107(A) also requires that a lawyer get his clientÕs consent before accepting payment from a third person. The Model Code makes no exception for payments made pursuant to a contract with the client. Although DR 5-107(B) provides that a lawyer who accepts payment from a third person cannot allow that third person to affect his professional judgment, the Model Code does not require the attorney to show that the third partyÕs payment had no effect on the attorneyÕs relationship with his client. While DR 5-107 does not require an attorney to prove that he is keeping confidential information away from the paying third party, this is achieved under the Model Code since other Disciplinary Rules impose that duty.

LRPC 1.8(g) prevents a lawyer representing two or more clients from participating in an aggregate settlement of claims involving the clients or, in a criminal context, making an aggregated agreement as to guilty or nolo contendere pleas, unless each client consents after consultation. DR 5-106(A) prevents the same type of settlements in the civil context but makes no explicit prohibition in the criminal context.

LRPC 1.8(h) forbids a lawyer from prospectively limiting his malpractice liability unless the client is independently represented and it is permitted by law. A lawyer is also forbidden from settling malpractice claims with unrepresented clients or former clients unless he advises the client in writing that independent representation is appropriate. DR 6-102(A) creates a general bar prohibiting attorneys from limiting or avoiding their malpractice liability. The Model Code, unlike LRPC 1.8(h), offers no exceptions.

LRPC 1.8(i) prevents a lawyer who is related to another lawyer as parent, child, sibling or spouse from representing a client Òdirectly adverse to a person who the lawyer knows is represented by the other lawyerÓ unless the client consents after disclosure of the relationship. The Model Code has no comparable rule.

LRPC 1.8(j) forbids a lawyer from acquiring a proprietary interest in the litigation he is conducting for the client. This rule does not prevent the lawyer from acquiring liens to secure his fees or expenses nor does it prevent the lawyer from entering a contingent fee contract with the client in a civil case. DR 5-103(A) propounds the same rule.

Louisiana recently added Paragraph (k) which became effective June 1, 1997. This rule prevents a lawyer from soliciting or obtaining a power of attorney or mandate from a client which would authorize the lawyer to enter into a binding settlement agreement without the clientÕs prior consent to settle. The Model Code has no explicit counterpart.

1.8:200   Lawyer's Personal Interest Affecting Relationship

¥ Primary Louisiana References: LA Rule 1.8(a)
¥ Background References: ABA Model Rule 1.8(a), Other Jurisdictions
¥ Commentary: ABA/BNA ¤ 51:501 et seq., ALI-LGL ¤ 207, Wolfram ¤¤ 7.6, 8.11

This section has not yet been completed.

1.8:210      Sexual Relations with Clients

This section has not yet been completed.

1.8:220      Business Transactions with Clients

This section has not yet been completed.

1.8:300   Lawyer's Use of Client Information

¥ Primary Louisiana References: LA Rule 1.8(b)
¥ Background References: ABA Model Rule 1.8(b), Other Jurisdictions
¥ Commentary: ABA/BNA ¤¤ 55:501-55:2001 , ALI-LGL ¤¤ 113-117A, Wolfram ¤ 6.7

This section has not yet been completed.

1.8:400   Client Gifts to Lawyer

¥ Primary Louisiana References: LA Rule 1.8(c)
¥ Background References: ABA Model Rule 1.8(c), Other Jurisdictions
¥ Commentary: ABA/BNA ¤ 51:601, ALI-LGL ¤ 208, Wolfram ¤ 8.12

This section has not yet been completed.

1.8:500   Literary or Media Rights Relating to Representation

¥ Primary Louisiana References: LA Rule 1.8(d)
¥ Background References: ABA Model Rule 1.8(d), Other Jurisdictions
¥ Commentary: ABA/BNA ¤ 51:701, ALI-LGL ¤ 48, Wolfram ¤ 9.3.3

This section has not yet been completed.

1.8:600   Financing Litigation

¥ Primary Louisiana References: LA Rule 1.8(e)
¥ Background References: ABA Model Rule 1.8(e), Other Jurisdictions
¥ Commentary: ABA/BNA ¤ 51:801, ALI-LGL ¤ 48, Wolfram ¤ 9.2.3

This section has not yet been completed.

1.8:610      Litigation Expenses

This section has not yet been completed.

1.8:620      Living and Medical Expenses

This section has not yet been completed.

1.8:700   Payment of Lawyer's Fee by Third Person

¥ Primary Louisiana References: LA Rule 1.8(f)
¥ Background References: ABA Model Rule 1.8(f), Other Jurisdictions
¥ Commentary: ABA/BNA ¤ 51:901, ALI-LGL ¤¤ 215, 216, Wolfram ¤ 8.8

This section has not yet been completed.

1.8:710      Compensation and Direction by Third Person

This section has not yet been completed.

1.8:720      Insured-Insurer Conflicts [see also 1.7:315]

This section has not yet been completed.

1.8:730      Lawyer with Fiduciary Obligation to Third Persons [see 1.13:520]

This section has not yet been completed.

1.8:800   Aggregate Settlements

¥ Primary Louisiana References: LA Rule 1.8(g)
¥ Background References: ABA Model Rule 1.8(g), Other Jurisdictions
¥ Commentary: ABA/BNA ¤ 51:375, ALI-LGL ¤ 209, Wolfram ¤ 8.15

This section has not yet been completed.

1.8:900   Agreements Involving Lawyer's Malpractice Liability

¥ Primary Louisiana References: LA Rule 1.8(h)
¥ Background References: ABA Model Rule 1.8(h), Other Jurisdictions
¥ Commentary: ABA/BNA ¤ 51:110l, ALI-LGL ¤ 76, Wolfram ¤ 5.6.7

This section has not yet been completed.

1.8:910      Prospective Limitation of Malpractice Liability

This section has not yet been completed.

1.8:920      Settlement of Legal Malpractice Claim

This section has not yet been completed.

1.8:1000   Opposing a Lawyer Relative

¥ Primary Louisiana References: LA Rule 1.8(i)
¥ Background References: ABA Model Rule 1.8(i), Other Jurisdictions
¥ Commentary: ABA/BNA ¤ 51:1301, ALI-LGL ¤ 203, Wolfram ¤ 7.6.6

This section has not yet been completed.

1.8:1100   Lawyer's Proprietary Interest in Subject Matter of Representation

¥ Primary Louisiana References: LA Rule 1.8(j)
¥ Background References: ABA Model Rule 1.8(j), Other Jurisdictions
¥ Commentary: ABA/BNA ¤ , ALI-LGL ¤¤ 47, 53, 55, Wolfram ¤¤ 8.13, 9.6.3

This section has not yet been completed.

1.8:1110      Acquiring an Interest in Subject Matter of Representation

This section has not yet been completed.

1.8:1120      Contingent Fees [see also 1.5:600]

This section has not yet been completed.

1.8:1130      Lawyer Liens

This section has not yet been completed.

1.8:1140      Retention of Files to Collect Fees

This section has not yet been completed.

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