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Some portions of the collection may already be severely out of date, so please be cautious in your use of this material.
California Legal Ethics
2.1:100 Comparative Analysis of CA Rule
California has no direct counterpart to MR 2.1. The most pertinent rules governing the lawyer as advisor are given in CRPC 3-110, which defines the required standard of competence in providing legal service [see 1.1:200 Disciplinary Standard of Competence, supra] and CRPC 3-210, which contains a general prohibition on advising a violation of law [see 1.2:600 Prohibited Assistance, supra]. As advice is certainly a "legal service," CRPC 3-110(B) therefore requires that the lawyer shall give advice with a reasonable amount of "mental, emotional, and physical ability." CRPC 3-210 states that "(a) member shall not advise the violation of any law, rule, or ruling of a tribunal unless the member believes in good faith that such law, rule, or ruling is invalid." This relates back to the "independent professional judgment" mandated by MR 2.1. MR 2.1 is closely intertwined with MR 1.7, which deals with conflicts of interest. MR 1.7 advocates that lawyers follow a policy of "zealous representation," which will have a profound effect on how they give advice. In other words, by avoiding conflicts of interest, lawyers will be better equipped to act as advisors. [See rule 1.7 Conflict of Interest: General Rule, supra].
Many of the cases that discuss the same subject matter as CRPC 3-110 insert a specific allusion to the importance of competent legal advice. See, e.g., Kirsch v. Duryea (1978) 21 Cal.3d 303, 308, 146 Cal.Rptr. 218, 578 P.2d 935, 938 ("[T]he attorney, by accepting employment to give legal advice or to render other legal services, impliedly agrees to use such skill, prudence, and diligence as lawyers of ordinary skill and capacity commonly possess and exercise in the performance of the tasks which they undertake.")(citations omitted). See also, Smith v. Lewis (1975) 13 Cal.3d 349, 118 Cal.Rptr. 621, 530 P.2d 589 (overruled on other grounds); see In re Marriage of Brown (1976) 15 Cal.3d 838, 844, 126 Cal.Rptr. 633, 639, 544 P.2d 561; Nichols v. Keller (5th Dist. 1993) 15 Cal.App.4th 1672, 1682, 19 Cal.Rptr.2d 601, 607; Banerian v. O'Malley (1st Dist. 1974) 42 Cal.App.3d 604, 612, 116 Cal.Rptr. 919, 924; Ishmael v. Millington (3rd Dist. 1966) 241 Cal.App.2d 520, 523, 50 Cal.Rptr. 592, 595; Moser v. Western Harness Racing Ass'n (2nd Dist. 1948) 89 Cal.App.2d 1, 7, 200 P.2d 7, 10.
Although California has not explicitly adopted MR 2.1, its courts have tacitly done so through their decisions. In Wolfrich Corp. v. United Services Auto. Ass'n (1st Dist. 1983) 149 Cal.App.3d 1206, 197 Cal.Rptr. 446, the court quoted almost in verbatim from MR 2.1:
Attorneys act as counsellors, and in rendering advice to their clients may, and when appropriate should, consider social, economic and even political factors as well as legal. [Citations omitted.] Clients have a right to expect their attorneys to render complete and candid advice. [Citations omitted.]
Id. at 1211 (overruled on other grounds by Doctors' Company v. Superior Court (1989) 49 Cal.3d 39, 40, 260 Cal.Rptr. 183, 775 P.2d 508, 509).
CRPC 3-110 and CRPC 3-210 relate to EC 5-11, EC 5-12, EC 5-13, EC 5-24, EC 5-17, EC 7-3, EC 7-7, EC 7-8 and EC 7-9 in much the same way as they relate to MR 2.1. The same standards apply. [See 2.1:101 Model Rule Comparison, supra].
2.1:200 Exercise of Independent Judgment
A lawyer representing more than one client with regard to the same transaction may not further the interests of one client over another client. Valley Title Co. v. Superior Court (1st Dist. 1981) 124 Cal.App.3d 867, 177 Cal.Rptr. 643.
"In representing a plaintiff in a federal civil rights action or similar 'private attorney general' actions," an attorney is "obligated to inform the client that statutory attorney's fees are the client's property which the client may waive as a condition of settlement." C.O.P.R.A.C. Op. 1989-114. However, an attorney may contract with the client "that the right to recover attorney's fees pursuant to civil rights statutes belongs to the attorney and may not be waived by the client." C.O.P.R.A.C. Op. 1994-136. An attorney's personal interest in the payment of fees could certainly affect his or her exercise of independent judgment. Another issue affecting independent judgment involves the potential prestige of settling an important case; in a rush to put a "notch in his or her belt," the lawyer must be sensitive to the manner in which their motivation may affect their standards for the content of such a settlement.
"Every attorney, including an associate in a legal partnership, must exercise his professional judgment in the best interest of his clients and must take steps which are necessary to assure competent representation for his client or withdraw from the case." L.A. Op. 1979-383.
2.1:300 Non-Legal Factors in Giving Advice
[See 2.1:101 Model Rule Comparison, supra].
2.2:100 Comparative Analysis of CA Rule
California has no direct counterpart to MR 2.2. Concurrent representation in transactions, an alternative to the intermediary role of MR 2.2, is dealt with in CRPC 3-310(B). CRPC 3-310(B) is more concerned with preventive measures than with the affirmative facilitation of intermediation. CRPC 3-310(B) does not only concern the lawyer's function in a business setting, the primary area in which MR 2.2 is applied, but also in a litigation setting. CRPC 3-310(B) also contemplates that the lawyer's relationship with one client will predate the relationship with the second client, whereas MR 2.2 assumes that the matter will originate simultaneously from two clients.
CRPC 3-310(B) does not limit disclosure to the fact that the lawyer is undertaking simultaneous representation of another client in the same matter, as does MR 2.2; CRPC 3-310(B) mandates disclosure of all past and present "legal, business, financial, professional, or personal relationship[s] with a party or witness" or "another person or entity the [lawyer] knows or reasonably should know would be affected substantially by resolution of the matter."
CRPC 3-310(B) also differs from MR 2.2 in that CRPC 3-310(B) does not require a lawyer to consult with the client regarding the implications of the concurrent representation. Instead, CRPC 3-310(B) merely requires that the lawyer disclose to a client or potential client the full extent of the lawyer's involvement in the matter. It is unclear whether a strict interpretation of CRPC 3-310(B) would mandate that the lawyer explain the ramifications of such involvement, or whether a simple presentation of the facts is sufficient. Whether the lawyer reasonably believes that the joint representation is possible without adversely affecting either client is an integral factor of MR 2.2, whereas it is immaterial to CRPC 3-310(B).
MR 2.2(c) finds a parallel in CRPC 3-310(C)(2). The latter section requires a lawyer to withdraw from "representation of more than one client in a matter in which the interests of the clients actually conflict." CRPC 3-310(C)(2). This paraphrases MR 2.2(c), which requires a lawyer to withdraw if he or she no longer "reasonably believes that the matter can be resolved on terms compatible with the clients' best interests." MR 2.2(c); MR 2.2(a)(2).
The requirement that the lawyer weigh his or her ability to effectively represent all parties concerned is emphasized in EC 5-14, EC 5-15, EC 5-18, EC 5-20, DR 5-105(A) and DR 5-105(B). This requirement is not a factor in CRPC 3-310(B). Similarly, EC 5-16, EC 5-19 and EC 5-20 and DR 5-105(C) require that the lawyer both disclose all pertinent facts to all clients and explain their ramifications before obtaining each client's consent. CRPC 3-310(B) only requires written disclosure of the situation before obtaining each client's consent.
It is unclear exactly what constitutes "full disclosure." The rules are silent as to the extent to which a lawyer must disclose potential ramifications of his or her representation of the client.
2.2:200 Relationship of Intermediation to Joint Representation
California case law makes little distinction between "intermediation" and "joint representation"; most cases which would be governed by MR 2.2 or CRPC 3-310(B) refer strictly to the lawyer's role as representative of two or more clients. The division between these situations and those that would be governed by MR 1.7, MR 1.8 and MR 1.9 is dictated not so much by semantics as by the character of a given situation.
If a lawyer undertakes to represent multiple clients when there is presently no litigation and none contemplated, MR 2.2 and/or CRPC 3-310(B) would guide the lawyer's conduct. [See 2.2:101 Model Rule Comparison, supra]. In such a case, the clients are perceived to have an overriding common interest in the matter in question. If the litigation element is present at the beginning of the relationship, however, it is assumed that the clients' goals are separate enough that the lawyer's role is not to reconcile them but to advocate on behalf of each individually, and MR 1.7, MR 1.8 and/or MR 1.9 would apply.
The preeminent California case regarding the lawyer's function as an intermediary is Lessing v. Gibbons (1st Dist. 1935) 6 Cal.App.2d 598, 45 P.2d 258. The Lessing case does not use the term "intermediary"; however, in acknowledging that the duties of the lawyer in the case were to conduct negotiations and draw up relevant agreements with a movie studio on behalf of both an actress and a movie director, the court outlines an intermediary relationship. In outlining the important components of this situation, the court emphasizes that "there was no litigation pending or contemplated," and that "the general objective [of the two clients] was the same." Id. at 605.
The types of situations that would be characterized as "intermediary" fall into several general categories, including "acting for both partners in drawing articles of copartnership or drawing agreements for the dissolution of copartnership... acting for both the grantor and the grantee in the sale of real property... acting for both the seller and purchaser in the sale of personal property... acting for both the lessor and the lessee in the leasing of property, and ... acting for both the lender and the borrower in handling a loan transaction." Lessing v. Gibbons (1st Dist. 1935) 6 Cal.App.2d 598, 606, 45 P.2d 258.
Dissolutions of Marriage
Lawyering in the context of dissolutions of marriage often involves intermediation and joint representation. Divorces must be filed and are often heard in court, but need not necessarily be adversarial. In such a case, the lawyer should look to the facts of the situation at hand in order to determine whether his or her role is primarily intermediary or representative in nature. In Klemm v. Superior Court (5th Dist. 1977) 75 Cal.App.3d 893, 142 Cal.Rptr. 509, the court decided that one lawyer could represent both parties in court where the dissolution was uncontested and where the parties had previously "settled their differences by agreement." Id. at 899. The court emphasized the fact that there was "no existing dispute or contest between the parties represented as to any point in litigation." Id. The lawyer's main role in the proceedings was to meet informally with the husband and wife and help them come to an oral agreement regarding the relevant issues. Id. at 896.
If the lawyer believes that there is any chance that he or she will not be able to maintain a complete and impartial loyalty to all clients involved, or that the situation he or she is asked to intermediate has the potential to come under dispute, the lawyer may not attempt intermediation. [See 2.2:300 Preconditions to Becoming an Intermediary, infra].
2.2:300 Preconditions to Becoming an Intermediary
While MR 2.2 requires that the lawyer consult with each client about the ramifications of common representation, CRPC 3-310(B) is unclear about the extent to which the lawyer is obligated to disclose potential issues. [See 2.2:101 Model Rule Comparison, supra]. Cases such as Klemm v. Superior Court (5th Dist. 1977) 75 Cal.App.3d 893, 142 Cal.Rptr. 509, require full and informed disclosure of all pertinent issues. In practice, therefore, California cases and ethics opinions have required that the strict MR standards be applied.
The lawyer may not have a more significant relationship with one party than with the other. In the divorce case at issue in Ishmael v. Millington (3rd Dist. 1966) 241 Cal.App.2d 520, 50 Cal.Rptr. 592, the husband's lawyer undertook to represent both husband and wife in the dissolution, drew up the divorce settlement, and simply presented it to her without giving her any advice about it. The wife later realized that she had signed away a large percentage of her one-half share of the community property, and brought suit to regain it. In considering the lawyer's motion to dismiss the suit, the court took notice of the fact that the divorce suit was uncontested, and stated that "[m]inimum standards of professional ethics usually permit [an attorney] to represent dual interests where full consent and disclosure occur." Id. at 526. While this seems like the ideal situation in which a lawyer would be permitted to act as an intermediary, the court nevertheless found that the lawyer in this case may not have been zealous enough on behalf of the wife and therefore denied the motion to dismiss. The clear message to any lawyer considering acting as an intermediary in a dissolution setting is to be sensitive to any prior connections that he or she may have with one of the potential clients and, in all but the most unusual cases, to avoid attempting to act as intermediary in such a situation. It should also be noted that the court in this case set high standards for informed consent.
A somewhat similar situation presented itself in Gregory v. Gregory (1st Dist. 1949) 92 Cal.App.2d 343, 206 P.2d 1122. In Gregory, the lawyer for the husband never said that he would represent the wife, yet never told her to obtain independent counsel. The court annulled the divorce agreement, partly on the ground that:
'[w]here the attorney for one of the parties is compelled to deal directly with the other litigant he is under a most strict duty to deal with such litigant fairly and objectively, and the agreement will be scrutinized most carefully to be sure that there has been no overreaching.'
Gregory v. Gregory (1st Dist. 1949) 92 Cal.App.2d 343, 349, 206 P.2d 1122 (quoting Davidson v. Davidson (1st Dist. 1949) 90 Cal.Ap.2d 809, 204 P.2d 71). In Gregory v. Gregory, the preconditions to the lawyer becoming an intermediary were not met, and therefore his function as such was merely illusory.
Courts have recognized that when two individuals have formed an enterprise and come to a lawyer to act on behalf of that enterprise, the lawyer is ethically permitted to do so. Buehler v. Sbardellati (4th Dist. 1995) 34 Cal.App.4th 1527, 41 Cal.Rptr.2d 104.
Will situations, in which the testator and heir often approach the lawyer together, must be scrutinized carefully by the lawyer. As S.D. Op. 1990-3 states:
[w]hen an attorney agrees to draft a document with legal significance for another person, the person who must sign the document for it to have any effect becomes a client, regardless of who asked the attorney to draft the document, who paid for the services, or whether the attorney ever meets with the person who will be signing the will. Therefore, the attorney has an ethical obligation to ensure that the proposed document is made with the true consent of the person for whom the document is drafted, and that the document creates a will or estate plan that is appropriate for the person who will be signing the document. However, the person who requests that the will be prepared may also be a client. The attorney must clarify who is the client, disclose potential conflicts of interest in writing, and obtain any required consents from the mutual clients before proceeding further.
S.D. Op. 1990-3. In will-drafting instances, "[t]he lawyer must also look out for the problem [of fraud or undue influence]." See S.D. Op. 1990-3 (citing as an example In re Mader's Estate (2nd Dist. 1970) 11 Cal.App.3d 409, 89 Cal.Rptr. 787).
The California Legislature has dictated that adoption is not a situation in which a lawyer may act as intermediary. Fam. Code ¤ 8800 (unethical for lawyer to represent both prospective adopting parents and natural parents).
2.2:400 Communication During Intermediation
B&PC ¤ 6068 provides in pertinent part: "[i]t is the duty of an attorney? [t]o maintain inviolate the confidence, and at every peril to himself or herself to preserve the secrets, of his or her client."
In Petty v. Superior Court (2nd Dist. 1953) 116 Cal.App.2d 20, 253 P.2d 28, two clients retained a lawyer to write an agreement they had reached regarding an oil well lease. The court there stated: "Where two persons mutually employ the same attorney to represent them as their common agent and attorney in a particular transaction, the communications made by either of them in the presence of the other to the attorney are privileged as to strangers to the transaction, but are not privileged as between either of them and the attorney." Id. at 29 (citations omitted);. See also, Murphy v. Waterhouse (1896) 113 Cal. 467, 45 P. 866 (same proposition); [see also, 1.6:240 Use or Disclosure of Confidential Information of Co-Clients; 1.6:480 Privilege of Co-Clients, supra].
"The duty to communicate includes the duty to communicate to persons who reasonably believe they are clients? at least to the extent of advising them that they are not clients." Butler v. State Bar (1986) 42 Cal.3d 323, 329, 228 Cal.Rptr. 499, 721 P.2d 585.
"An attorney who has previously prepared estate plans for a husband and wife may not, while his clients are still married, represent the husband with regard to the negotiation and drafting of a Marvin Agreement with another woman without the informed and written consent of the wife." L.A. Op. 1987-448.
Even if a lawyer has a prior relationship with both clients, if they come to him basically to have him set down a previously agreed-to agreement on paper (i.e. act as "scrivener") then he can perform that service. Blevin v. Mayfield (3rd Dist. 1961) 189 Cal.App.2d 649, 11 Cal.Rptr. 882.
2.2:500 Consequences of a Failed Intermediation
Generally, if the intermediation fails and the lawyer is found to have represented one client before commencing representation of the other, the courts will find that the agreement, contract or other product of the intermediation is void. However, in certain circumstances the lawyer may continue his or her representation of a client even if litigation results.
The most common question to arise in California cases is whether or not the lawyer actually "represented" one of the clients before commencing representation of the other. See Woods v. Superior Court (5th Dist. 1983) 149 Cal.App.3d 931, 197 Cal.Rptr. 185.
In Meehan v. Hopps (1st Dist. 1956) 144 Cal.App.2d 284, 301 P.2d 10, a lawyer represented a corporation that had two fifty-percent shareholders. When a dispute arose between the two shareholders, the court ruled that the lawyer could continue to represent the corporation in the dispute.
S.F. Op. 1973-10 considered a scenario where a lawyer prepares an agreement of purchase and sale for buyer and seller. Later, the seller wants the lawyer to represent him in an action against the buyer for default under the original agreement. The opinion considers EC 5-15 and EC 5-16 as well as former CRPC 5 in its determination that the lawyer would have confidential information relating to both buyer and seller and, therefore, the lawyer can not represent seller in the present action unless the buyer gives him permission to do so.
S.F. Op. 1973-22 deals with a situation where a lawyer handles a purchase and sale of real property for both the buyer and the seller. When the buyer breaches the contract, the seller wishes the lawyer to represent him in an action against the buyer. The opinion discusses EC 5-1, EC 5-14 and EC 5-15 and DR 5-105(A), former CRPC 5 and former CRPC 7 in deciding that the lawyer can not do so. S.F. Op. 1973-22 examines the history of California case law from the time of Petty v. Superior Court (2nd Dist. 1953) 116 Cal.App.2d 20, 253 P.2d 28, and determines that in the beginning, courts held that "the ethical considerations attending representations adverse to a former client constitute no bar, where the element of confidentiality does not exist." S.F. Op. 1973-22. However, the opinion notes that newer cases have expressed the opinion that
'the rule that an attorney who has represented one party in a transaction may not thereafter represent the other party in an action against his former client, arising out of or closely relating to the transaction, does not depend for its operation upon a subsidiary decision as to whether the attorney would or might be using or misusing confidential information derived from his former client.'
Id. (quoting Cord v. Smith (9th Cir. 1964) 338 F.2d 516, 524). The opinion concludes by supporting the decision reached in Big Bear Municipal Water Dist. v. Superior Court:
whether the acceptance of the new retainer will require the attorney, in forwarding the interest of his new client, 'to do anything which will injuriously affect his former client in any matter in which he formerly represented him, and also whether he will be called upon, in his new relation, to use against his former client any knowledge or information acquired through their former connection.'
S.F. Op. 1973-22 (quoting Big Bear Municipal Water Dist. v. Superior Court (4th Dist. 1969) 269 Cal.App.2d 919, 927, 75 Cal.Rptr. 580). The opinion concludes that the factor of confidentiality has been removed in deciding whether a lawyer may represent a client against a former client . S.F. Op. 1973-22.
S.D. Op. 1974-13 addresses the question of whether a lawyer who represents 'A' and 'B' solely for the purpose of forming their corporation can represent the corporation in a dispute the corporation has against 'B' after 'B' has disassociated himself from the corporation. S.D. Op. 1974-13 concludes in the negative: "[t]he attorney should avoid representation of a party in a suit against a former client where there may be the appearance of a conflict of interests or a possible violation of confidences, even though such may not in fact exist."
2.3 Rule 2.3 Evaluation for Use by Third Persons
2.3:100 Comparative Analysis of CA Rule
There is no comparable California rule.
There was no comparable rule to MR 2.3 in the DR.
2.3:200 Undertaking an Evaluation for a Client
An attorney is required to perform his or her duties with competence. CRPC 3-110. [See Rule 1.1 Competence, supra]. "[B]y accepting employment to give legal advice or to render other legal services, [an attorney] impliedly agrees to use such skill, prudence, and diligence as lawyers of ordinary skill and capacity commonly possess and exercise in the performance of the tasks which they undertake . . . ." Kirsch v. Duryea (1978) 21 Cal.3d, 303, 308, 146 Cal.Rptr. 218, 578 P.2d 935, 938. An attorney may be liable, in connection with preparing an evaluation for a client, for conspiring with the client to intentionally harm a third party. See Roberts v. Ball, Hunt, Hart, Brown & Baerwitz (2nd Dist. 1976) 57 Cal.App.3d 104, 109, 128 Cal.Rptr. 901, 905.
Generally, an attorney has a duty of care only to his or her client. Goodman v. Kennedy (1976) 18 Cal.3d 335, 342-44, 134 Cal.Rptr. 375, 556 P.2d 737, 742-44. However, an attorney's duty of care may extend to a third party based upon various factors, including "'(i) the extent to which the transaction was intended to affect the [third party], the foreseeability of harm to him, the degree of certainty that the [third party] suffered injury, the closeness of the connection between the [attorney's] conduct and the injury suffered, the moral blame attached to the [attorney's] conduct, and the policy of preventing future harm.'" Goodman v. Kennedy (1976) 18 Cal.3d 335, 342-43, 134 Cal.Rptr. 375, 556 P.2d 737, 742-44 (quoting Biakanja v. Irving (1958) 49 Cal.2d 647, 650, 320 P.2d 16). See also, Bily v. Arthur Young & Co. (1992) 3 Cal.4th 370, 410, 11 Cal.Rptr.2d 51, 834 P.2d 745, 770 (dealing with accountants liability to third parties, but stating in dicta that an attorney may be liable to a third party who relied on information provided by the attorney with the intent to benefit the third party); Roberts v. Ball, Hunt, Hart, Brown, & Baerwitz (2nd Dist. 1976) 57 Cal.App.3d 104, 111, 128 Cal.Rptr. 901, 906 (determining that a law firm owed a duty of care to plaintiff who was shown a legal opinion in order to influence plaintiff to loan money to the firm's client); B.L.M. v. Sabo & Deitsch (4th Dist. 1997) 55 Cal.App.4th 823, 833, 64 Cal.Rptr.2d 335 (finding that an attorney selected as special and bond counsel by the City of Rialto on a construction project did not owe a duty to a contractor who provided services in reliance on the attorney's representation because contractor was not the intended beneficiary of the contract between the attorney and the City of Rialto).
Confidential communication between a client and lawyer includes "a legal opinion formed and the advice given by the lawyer in the course of the attorney-client relationship." Evid. Code ¤ 952. The client may waive his or her lawyer-client privilege regarding the disclosure of confidential communications if the client discloses "a significant part of the communication or has consented to such disclosure made by anyone." Evid. Code ¤ 912. "Consent to disclosure is manifested by any statement or other conduct of the [client] indicating consent to the disclosure...." Id.
2.4:100 Comparative Analysis of California Rule
MR 2.4 was added in February 2002. The Reporter's explanation of the change reads as follows:
The role of third-party neutral is not unique to lawyers, but the Commission recognizes that lawyers are increasingly serving in these roles. Unlike nonlawyers who serve as neutrals, lawyers may experience unique ethical problems, for example, those arising from possible confusion about the nature of the lawyer's role. The Commission notes that there have been a number of attempts by various organizations to promulgate codes of ethics for neutrals (e.g., aspirational codes for arbitrators or mediators or court enacted rules governing court-sponsored mediators), but such codes do not typically address the special problems of lawyers. The Commission's proposed approach is designed to promote dispute resolution parties' understanding of the lawyer-neutral's role.
California has not adopted the new model rule.
2.4:200 Definition of "Third-Party Neutral"
California has not adopted the new model rule.
2.4:300 Duty to Inform Parties of Nature of Lawyer's Role
California has not adopted the new model rule.